Commons Sitting of 3 March 1976

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Housing Schemes
    Mr. Robin F. Cookasked the Secretary of State for Scotland if he is satisfied with the number of housing schemes submitted to him by local authorities for approval.
    The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): Many more new local authority houses were approved in 1975 than in either of the two previous years, but schemes for improving council houses have not so far taken up all of the current allocations. It is primarily for each authority to decide how its housing needs should be met.
    Mr. Cook: Will my hon. Friend confirm that the Edinburgh housing authority has failed to take up the full allocation of money available to it for modernisation of council houses? Will my hon. Friend give us the relevant figures? Is he aware that in my constituency there is an empty block of council housing at Tron Square for which designs are available for modernisation but for which work has been delayed by the failure of the Conservative council to take up the money available? Will—
    Mr. Speaker: Order. The hon. Gentleman is embarking upon yet another supplementary question.
    Mr. Brown: For 1976–77 the total available to local authorities for work starts on housing, environmental improvement and capitalised house repair work is £95·1 million plus a further £3·9 million under the Job Creation Scheme. Edin-
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    burgh's bid for 1976–77 was only £1 million but on the formula it could have had £4·7 million. Therefore, without wanting to criticise Edinburgh District Council, I must say that there is money available if it will get on with the job.
    Mr. Canavan: Is my hon. Friend aware that in the course of the current financial year Stirling District Council has managed to start building only seven council houses? In view of the long waiting list in the district, will my hon. Friend instruct that council to pull its socks up and try to improve upon its abysmal record, which is the typical work of a council controlled by a Conservative-SNP coalition?
    Mr. Brown: It is not part of my job to instruct local authorities or to criticise them. In housing terms I am aware that the Stirling District Council is not one of the best authorities considering the many problems facing it.
    Mr. Welsh: Is the hon. Gentleman aware that to compare the 1973 and 1974 house-building statistics with those of 1975 is a shameful con trick? He knows that they were the lowest figures for house-building since 1951, almost a quarter of a century ago. Does he accept that local authorities are being swamped by this problem? Will he accept—
    Mr. Speaker: Order. Fair rations. The hon. Gentleman has already asked two supplementary questions.
    Mr. Brown: The Scottish National Party is much more skilful at con tricks than I am. I did not make any comparison with 1973 or 1974. All I am saying is that record sums of money are available for the kind of work mentioned in the Question asked by my hon. Friend the Member for Edinburgh, Central (Mr. Cook).
    Mr. Buchanan-Smith: Will the hon. Gentleman look at the situation of some local authorities which are anxious to proceed with housing schemes but which, because of the understandable cut-backs in public expenditure at regional level, have problems about getting sufficient finance for sewerage and water supplies? This problem is giving rise to conflict. I know of instances in the Tayside area and I should be pleased to give the Minister detailed examples. I hope that he will look into the matter.
    Mr. Brown: I cannot be held responsible for the backward Conservative authorities in many country areas which should have made better provision in the past. This is a problem. We work in collaboration and as colleagues with regional and district authorities and we are achieving some measure of success.
    Mr. Lambie: Before my hon. Friend criticises any more local councils, will he now criticise his own Department, which has been holding up Kyle and Carrick District Council's application to build 126 houses in Logan Drive in Troon? My hon. Friend should get his finger out.
    Mr. Brown: As we are in the mood to exchange compliments, I point out that it has taken my hon. Friend about three months to write to me on the matter about which he is now expressing great concern.

    Power Station Closures
    Mr. Gordon Wilsonasked the Secretary of State for Scotland if he will make a statement on power station closures.
    The Minister of State, Scottish Office (Mr. Bruce Millan): The South of Scotland Electricity Board recently announced its intention to close Clyde's Mill and Portobello Power Stations on 31st March 1977. Decisions on power station closures are a matter for the appropriate electricity board.
    Mr. Gordon Wilson: Is the Minister aware that as recently as 29th October 1975 he indicated that there would be no such power station closures this year? Will he indicate to the House what effect the 3,000 additional megawatts coming on stream fairly shortly will have on existing power stations in Scotland? Further, what will be the effect of the additional nuclear capacity?
    Mr. Millan: The hon. Gentleman's supplementary questions go much wider than his original Question. I point out that 1977 is not this year and therefore my previous answer was perfectly accurate. These are two very small stations by modern standards. The House might care to know that their total coal consumption is less than 90,000 tons per year, whereas the total consumption of the South of Scotland
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    Electricity Board is about 9 million tons per year. In this instance we are dealing with very small amounts.
    Mr. Alexander Wilson: Has my hon. Friend had a meeting recently with the South of Scotland Electricity Board and the Scottish area of the National Union of Mineworkers? If that meeting has been held as was promised, have the Government made any representations to these boards and other bodies that from now on they should settle for coal-burning stations rather than those using oil or any other fuel?
    Mr. Millan: The meeting, which has been held, included the Central Electricity Generating Board, the two Scottish boards, the National Coal Board and the respective trade unions. I attended that meeting. There will be a separate working party, which I shall chair, dealing with the Scottish situation. We have a very strong interest in getting the maximum amount of coal burnt in power stations in Scotland, and that will be one of the objectives of my chairing that working party.

    Purse Seine Nets
    Sir John Gilmourasked the Secretary of State for Scotland whether he will set up a committee to investigate the use of purse seine nets in the waters off Scotland, and if he will make a statement.
    Mr. Hugh D. Brown: I do not consider that the use of purse seine nets is giving rise to problems which require investigation by a committee, but I keep all types of fishing under review.
    Sir J. Gilmour: Does the Minister agree that, with the majority of fish species being subject to quota restrictions, there is a grave risk, if there is a major extension of purse seine netting, that there will have to be a restriction of the number of boats fishing?
    Mr. Brown: This is a problem. Last night the hon. Member was accused of being a progressive Conservative. Now he is being a Luddite. Increased efficiency can bring blessings and problems, and we are watching the point in co-operation with the industry
    Mr. Watt: Does the Minister agree that there is little point in Scottish fishermen adopting conservation measures

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    while the Danes and Belgians go on scooping up immature fish? Only three weeks ago about 17,000 tons of immature herring were landed in Danish ports.
    Mr. Brown: That is not the original Question I was asked. Of course, this is a problem linked to some extent to the method of catching. We are keeping a watch on the present methods being used by the fleets under our control and responsibility.
    Mr. Gray: If the Minister is not satisfied that the present situation requires the setting up of a committee, will he have another look at the whole question of fishery protection, which is grossly inadequate, which is adversely affecting inshore fishermen throughout Western Scotland?
    Mr. Brown: I reject that allegation. The protection is not grossly inadequate. I know that the hon. Member has a local problem and I have written to him about it. We hope to provide added protection in the next few months. The Fishery Protection Service is giving good service. This is just one of the many considerations we continually bear in mind.

    Roads
    Mr. Fairgrieveasked the Secretary of State for Scotland what plans he has for improving the road system north of the Edinburgh/Glasgow axis.
    Mr. Millan: The trunk road programme provides for the improvement of trunk roads giving acccess to oil-related developments and of those serving the central industrial belt, including the motorway and dual carriageway network. The improvement of other roads is primarily the responsibility of regional and island councils.
    Mr. FairgrieveIn view of the Minister's answer and his comments about oil-related areas, does he appreciate that with the importance of the Aberdeen area to the whole United Kingdom economy there should be an early commitment to announce the building of a road joining the oil capital of Europe—Aberdeen—and Edinburgh with dual carriageway throughout via Perth and Dundee?
    Mr. Millan: I think the hon. Gentleman knows the decision that the Government took to make the road from Dundee
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    to Stonehaven, via Forfar, the trunk road. That was indicated to the two regional councils concerned in January. We have not had their comments yet.
    Mr. Ronald Atkins: Will the Minister ensure that any road building in Scotland does not duplicate existing rail services, the closing down of which will be criticised by the people who are now asking for road improvements?
    Mr. Millan: I take the view that we need a correct balance between road and rail development.
    Mr. Crawford: Will the Minister authorise the reconstruction of the Dam-head Bridge at Coupar Angus on the A94, which is one of the main oil routes to and from Aberdeen?
    Mr. Millan: If the hon. Member tables a Question on that subject, I shall deal with it.

    Dunfermline General Hospital
    5. Mr. Adam Hunterasked the Secretary of State for Scotland what progress is being made in the planning for a new general hospital in Dunfermline and district; and when the work is likely to start.
    The Under-Secretary of State for Scotland (Mr. Frank McElhone): The preparation of the brief and schedules of accommodation for the first phase of the development is well advanced, and I expect approval in principle to be given shortly. I recognise the need for detailed planning to proceed as quickly as possible, but I am not yet able to say when work is likely to start.
    Mr. Hunter: Is my hon. Friend aware that the demand for a new hospital in this area has been continuing for over a decade? Within that period two Ministers—my right hon. Friend the Minister of State and the hon. Member for Dumfries (Mr. Monro), then in office—have both visited the existing hospital. Does not my hon. Friend think that some rapid progress should be made? Can he help?
    Mr. McElhone: I am aware of the continued interest in this project not only by my hon. Friend the Member for Dunfermline (Mr. Hunter) but by my hon. Friend the Member for Fife,

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    Central (Mr. Hamilton). The necessary consultations have now been completed between the board and the Department about the number of beds, revenue costs and the implications for hospital services in West Fife of phase I of the new hospital. I expect approval in principle to be given shortly, but in the meantime planning is continuing.
    Mr. Monro: What has gone wrong with the Minister's hospital building programme? This hospital was firmly in the band years ago. When the Peel Hospital should have been completed in 1979, why has the Minister still not completed the planning stage?
    Mr. McElhone: The hon. Member for Dumfries (Mr. Monro), who was himself a Minister in the Scottish Office, cannot get away with that. He knows that it was not that far advanced. However, we have considered it and we are going forward to acquire the site and we hope to have a start shortly.
    Mr. Teddy Taylor: If the Minister is unsuccessful in fighting for money for a new hospital, will he pay an urgent personal visit to the Neurological Institute in the Southern General Hospital where a third of the beds are not being used and lives are being put at risk because of the financial restrictions?
    Mr. McElhone: I am concerned, but I do not accept expressions of concern from the hon. Member for Glasgow, Cathcart (Mr. Taylor), because he was the Minister in December 1970 when this unit was moved from Killearn. These beds have been lying empty for five years—during most of the time of the previous Conservative Government—and it is hypocritical for the hon. Member to chide me when he was the responsible Minister in the first place.
    Dr. M. S. Miller: On a point of order, Mr. Speaker. Is not the hon. Member for Glasgow, Cathcart (Mr. Taylor) wrong? Should he not have referred to the situation at the Neuro-Surgical Institute, which has nothing to do with—
    Mr. Speaker: Order. That is not my business.

    Rating Accounts
    Mr. Lambieasked the Secretary of State for Scotland which of the previous
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    local authorities in the Cunninghame District Council area left credit balances in their rating accounts.
    Mr. Millan: I understand that the accounts have not yet been closed.
    Mr. Lambie: According to the local Press last week, large deficits have been left by previous local authorities to Cunninghame District Council. Will my right hon. Friend guarantee that extra supplementary grant will be given to Cunninghame District Council in order to help local ratepayers?
    Mr. Millan: I do not read the local Press in the Cunninghame district. Whether or not its report is accurate, the fact is that it is fairly common in other parts of Scotland for debit balances to have been left to the new authorities, and there can be no special assistance for that reason.

    Legal Aid Scheme
    Mr. Dempseyasked the Secretary of State for Scotland what was the largest amount of money paid under the free legal aid scheme in the last financial year to any firm of solicitors for legal services rendered; and if he will make a statement.
    The Under-Secretary of State for Scotland (Mr. Harry Ewing): The largest amount paid to a single firm of solicitors from the Legal Aid (Scotland) Fund in the year ending 31st March 1975 was £257,762. Of this total, approximately £97,000 was in respect of fees retained by the firm. A similar amount was in respect of fees remitted to other legal firms for whom the solicitors acted as agents, and approximately £64,000 was in respect of outlays.
    Mr. Dempsey: Is my hon. Friend satisfied that there are no abuses in the operation of this scheme? Is it true that solicitors are applying for an increase in their fees under the scheme? If so, will he assure the House that any increase will be confined to the £6 a week maximum which applies to the rest of the community?
    Mr. Ewing: The House will note with interest the Prime Minister's announcement yesterday of the setting up of the Royal Commission on the Legal Profession in Scotland, part of the remit of

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    which will be to examine the remuneration of solicitors in Scotland. The points that my hon. Friend raises will be dealt with in that examination. As to whether increases can be kept within the £6 limit, I certainly hope so, but that is a matter for others.
    Mr. Buchanan-Smith: But is the hon. Gentleman really satisfied with the supervision of this scheme, which dispenses hundreds of thousands of pounds of taxpayers' money? Is he aware that a spokesman of the High Court in Edinburgh yesterday reported abuses of the scheme under which up to £10 an hour has been claimed by solicitors for time spent travelling between their offices and the court? Is he sure that they are claiming fairly and properly?
    Mr. Ewing: I find the criticism from the Opposition interesting when their instant reaction yesterday was that the Royal Commission was not necessary. They now look rather silly against the background of the exchanges which have taken place. I am always concerned about criticism of the administration of the legal aid scheme. That is why the Royal Commission was set up with those terms of reference.
    Dr. M. S. Miller: Will my hon. Friend try to impress upon the legal profession the fact that it should not advise its clients to plead guilty to certain offences because the fine would be much smaller than the cost of the services provided in defending them?
    Mr. Ewing: I think that my hon. Friend will accept that it is not for me to consider giving advice to solicitors about what advice they in turn should give their clients.

    Fishing Industry
    8. Mr. Sproatasked the Secretary of State for Scotland if he will make a statement on the latest situation in the fishing industry.
    The Secretary of State for Scotland (Mr. William Ross): The general improvement in the market situation during the second half of 1975 has been sustained in 1976. In the first five weeks of 1976 the Scottish industry's gross earnings are 22 per cent. up on those for the comparable period in 1975. The
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    gross earnings of the white fish sector increased by almost 40 per cent., and the earnings per day at sea for white fish trawlers over 80 ft increased by 45 per cent.
    Mr. Sproat: Unfortunately, I cannot accept the optimism implied by the right hon. Gentleman about the market for the rest of this year. Is he aware that the latest EEC document on fishing limits is totally unacceptable to all sections of the industry? Since the Minister of Agriculture is in Brussels all this week, will he be discussing the latest document? If not, when can we expect ministerial discussions on fishing limits to begin?
    Mr. Ross: The EEC Commission has now produced two working documents which will provide the basis for urgent discussion of specific proposals. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has pressed the United Kingdom's case in Brussels earlier this week. My right hon. Friend the Minister of Agriculture and I will be furthering this matter in future discussions. I think that the hon. Gentleman will be aware of what we said about this working paper in the debate a short time ago.
    Mr. Henderson: Will the right hon. Gentleman accept that there is great concern in all parts of the House about this EEC document? Will he undertake to press vigorously for a 100-mile exclusive limit for our own fishermen when he has discussions with his right hon. Friend?
    Mr. Ross: I think that I spoke about this in the debate and outlined our difficulties. We are in a Community in which free access is already allowed and we have a derogation in respect of a certain coastal strip until 1982. Our position is not one for which I exactly wished, but the hon. Gentleman can take it from me that I will press as far as I can for satisfactory arrangements for the fishing industry.
    Mr. Robert Hughes: Am I not correct in thinking that my right hon. Friend's original answer expressed neither optimism nor dismay but simply gave a ray of hope that figures are standing up? Is not a 45 per cent. increase in earnings over the period he mentioned in stark contrast to the dismal and pessimistic forecasts by the industry only a few

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    weeks ago? Should not the industry perhaps give us a further set of figures so as to come clean about where it stands on this matter?
    Mr. Ross: If the House or hon. Members from the North-East do not like my figures, perhaps they would like to consult the Press and Journal of 25th February, which carried the headline:
    "Fishing Gets Off to a Flying Start".
    The figures given in that article show that in the first five weeks the total Scottish catch was worth £6·858 million. That is an increase over the same period last year of nearly £1¼ million.
    Mr. Buchanan-Smith: Would not the right hon. Gentleman admit that when one is considering the financial situation of the industry one should consider not just earnings but costs? Is it not a fact that costs rose over the last year by more than 25 per cent.? To be fair, therefore, should he not balance that increase against the increase of earnings?
    Mr. Ross: Of course. The hon. Gentleman should know, from what I said in the debate I mentioned and have said in answer to other questions, that we have been in touch with the industry. We have certain figures and at present we are asking for a breakdown in terms of size of boat and other matters. I have said before and I say again that the industry has been far too gloomy in its forecasts. The figures for the first five weeks certainly bear out what I said.

    Western Isles (Unemployment)
    Mr. Donald Stewartasked the Secretary of State for Scotland what plans he has for reducing unemployment in the Western Isles.
    Mr. Millan: The hon. Member will be aware of the measures taken by the Government to alleviate unemployment, including those announced by my right hon. Friend the Chancellor of the Exchequer on 12th February, which will be of benefit to the Western Isles as well as to the rest of the country. The Western Isles are also a priority area in the development strategy of the Highlands and Islands Development Board.
    Mr. Stewart: Is the right hon. Gentleman aware that that answer follows
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    roughly the same lines as answers I have always received? Is he aware that in my constituency there were 22 per cent. unemployed last month and 17 per cent. this month? Does it not all boil down to the fact that the Minister has no plans and virtually could not care less?
    Mr. Millan: The unemployment figure is too high. If the hon. Member would occasionally put a constructive idea to me, I would look at it. The Nigg refinery which my right hon. Friend approved this week will be useful to the Highlands but I notice that the leader of the SNP has come out against that refinery.
    Mr. Alexander Wilson: In considering plans for reducing unemployment in Scotland, will my right hon. Friend now make a rapid decision to give the go-ahead to the Stonehouse new town to alleviate unemployment in Hamilton and adjacent constituencies?
    Mr. Millan: There is a later Question on that matter and I think that it would be in accordance with the normal conventions if I did not comment now.
    Mr. MacCormick: Bearing in mind that the Nigg refinery is as far from the Western Isles and my constituency as Paris is from London, would the right hon. Gentleman agree that a constructive criticism or suggestion might be that he should impinge upon the Chancellor's mind the idea that further punishment of the whisky industry would greatly harm employment prospects in islands like Islay?
    Mr. Millan: I do not accept that the whisky industry has been punished. As I have said several times, if hon. Members will put sensible ideas to me about their constituencies, I am always willing to look at them, but when it comes to SNP constituencies sensible ideas are few and far between.
    Dr. M. S. Miller: My right hon. Friend must not be too parochial when he makes a decision. Does he agree that, while it is important that there should be reductions in unemployment in the Western Isles and other parts of Scotland, it is also important that he and his right hon. Friend should not be seen to be against a reduction in unemployment in other parts of the United Kingdom, which are just as badly hit as many areas in Scotland?
    Mr. Millan: Unemployment figures everywhere are too high. We want to see them brought down.

    School Uniforms
    Mr. Canavanasked the Secretary of State for Scotland whether he is satisfied with the operation of regulations in Scottish local authority schools concerning the wearing of school uniform.
    Mr. McElhone: The making and operation of school rules are matters for schools and education authorities.
    Mr. Canavan: Will the Minister take action about children who are being deprived of education simply because they are not wearing the prescribed clothing? Will he bear in mind that it could cost a family with three children over £100 to equip them for school? Surely this is a matter better left to the good sense of parents than to the whims of individual headmasters, some of whom have an almost Fascist-type obsession about wearing uniforms.
    Mr. McElhone: A headmaster should not set himself up as judge in every respect. There are no statutory provisions governing school dress. It is a question for local arrangement. I hope that the schools and local authorities will have regard to all the circumstances. It would not be proper for me to express a legal opinion about the wearing of school uniform, which is a matter for the good sense of local authorities.
    Mr. Teddy Taylor: Is there any evidence that over the long term the wearing of clothes other than the basic school uniform turns out to be less expensive? The Minister should stand up for discipline and authority of headmasters instead of undermining their authority.
    Mr. McElhone: I do not accept that. It is a matter for local authorities. They have the discretion and I hope that good sense will prevail.

    Oil Refinery (Easter Ross)
    Mr. Grayasked the Secretary of State for Scotland if he will now announce his decision on the application to build an oil refinery in Easter Ross.
    Mr. William Ross: I made a direction on Monday 1st March enabling the High-
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    land Regional Council to give planning permission for an oil refinery at Nigg Point on the Cromarty Firth. I have sent the hon. Member a copy of the decision letter.
    Mr. Gray: Will the Secretary of State accept that those of us who have the worry and responsibility of trying to attract continuing employment to the Highlands will welcome his decision? Will he now take the opportunity to revise his previous decision to delay for two or three years the building of the Kessock Bridge, as it is imperative that it now proceeds in view of the development for Easter Ross?
    Mr. Ross: I welcome the hon. Gentleman's attitude and I appreciate the work he has done and the concern he has shown on this issue. I am glad to have the opportunity publicly to apologise for the delay over the letter which I sent to him yesterday. I contrast his attitude with the strange attitude of the Scottish National Party. Its members proclaim at one time that they want work in particular parts of Scotland but when the opportunity is afforded they make disparaging remarks. The possible interaction between this project and the possible development of other projects, such as the Kessock Bridge, will certainly have to be kept in mind. The Scottish Development Department is considering alternative possibilities in the light of proposals put to me.
    Mr. Robert Hughes: I congratulate my right hon. Friend on his drive to get work for the Highland areas, which is necessary following oil construction work there. Is the necessary co-ordination work being done to provide the infrastructure, such as housing and schools, for the increased population which will live there for many years to come?
    Mr. Ross: The biggest element is the construction work, which is temporary but which will lead to over 400 jobs at first and I hope that more will flow from them. I shall bear the point in mind. We have some experience in this area—such as with the smelter—and if we handle this situation as well as we did that, we shall do well.
    Mr. Lambie: I congratulate my right hon. Friend on granting the planning permission. The scheme will guarantee

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    1,500 jobs in that area. Does he not agree that it is time that he provided the same number of jobs in North Ayrshire by granting permission to build an oil refinery at Hunterston, which is the best site in Scotland?
    Mr. Ross: It is the best site in Scotland for many other things as well.

    Employment Prospects
    Mr. Rifkindasked the Secretary of State for Scotland whether he is satisfied with the achievements to date of the Scottish Development Agency with regard to the improvement of employment prospects and economic development within Scotland.
    Mr. Crawfordasked the Secretary of State for Scotland what progress the Scottish Development Agency is making towards reducing unemployment in Scotland.
    Mr. Millan: Though the Agency has been established for only 11 weeks, it has lost no time in tackling the formidable tasks which face it. It has announced its first programme of 18 advance factories, and is already undertaking five environmental improvement schemes which are both providing work now and making Scotland a more attractive place to invest in for the future. It is assembling the manpower and other resources it will need, and is devising its strategies to improve employment prospects and stimulate economic development.
    Mr. Rifkind: Is the Minister aware that the Government's recent White Paper on Public Expenditure refers to the spending of £200 million on the Scottish Development Agency over the next five years, but that there is no reference to the further £100 million which the Government said would be forthcoming? Will this money be made available, and, if so, where will it come from, in view of what was said in the White Paper?
    Mr. Millan: The White Paper implements our promises and pledges that at least £200 million will be made available over the next five years. I know that that is a great disappointment to the hon. Gentleman, since his party tried to castrate the Scottish Development Agency when it was set up. If the money is spent successfully, no doubt the Agency will come back and ask for more.
    Mr. Crawford: Will the Minister come clean and admit that his dreams of a vibrant Scottish Development Agency have turned to dust and that in the Cabinet the basso profundo has become basso castrato? Does he agree that we need £300 million a year for the SDA?
    Mr. Millan: I do not agree. I understand that the SDA is content with the budget. We shall wait and see the results.
    Mr. Alexander Fletcher: Does the Minister agree that it would be more helpful if he accepted that any contribution the SDA can make will be in environmental matters? Does he agree that hopes that one organisation with such a small sum can regenerate the economy are false, particularly when the regeneration of the Scottish economy depends upon the success of the British economy?
    Mr. Millan: Not everything can be done by the SDA, but I do not accept what the hon. Gentleman says.

    Local Government Expenditure
    Mr. James Lamondasked the Secretary of State for Scotland what percentage of Scottish local government expenditure is met from central Government funds.
    Mr. William Ross: In 1974–75, some 65 per cent. of net expenditure falling to be met from rating accounts, and some 68 per cent. of total net current expenditure falling to be met from rating, housing and trading accounts.
    Mr. Lamond: Will my right hon. Friend accept that my constituents will hear of that answer with envy because the figure is considerably in excess of the figure for England? Will he make it plain to the Scottish electorate that it is in a very happy position under the present arrangements and would be most unwise to accept either complete separation from the United Kingdom or even the Government's modest devolution proposals?
    Mr. Ross: I listened with interest to what my hon. Friend said. There is nothing worse than a Scottish poacher who becomes an English gamekeeper. I hope that Councillor Lamond of Aberdeen entirely agrees.
    Mr. Lamond: I agree with her.
    Mr. Ross: There are considerable historic reasons for the difference. If my hon. Friend had met the ratepayers' association and the protest group which came to see me last year, he might have appreciated how strong are the feelings about rate increases in Scotland.
    Mr. Gordon Wilson: What proportions of the Scottish oil revenues will go into the United Kingdom's Treasury to finance and subsidise English extravagance?
    Mr. Ross: The revenues from the British oilfields will go into the United Kingdom Treasury. It is that sort of thing that will enable us to give help in the places that need it most. If the hon. Gentleman were more objective and looked at the situation in parts of England, such as in the area represented by my hon. Friend the Member for Oldham, East (Mr. Lamond), a former Lord Provost of Aberdeen, he would see that parts of Scotland are very much better off than many parts of England.

    Children's Panels
    Mr. Teddy Taylorasked the Secretary of State for Scotland if he will make a statement on the operation of children's panels.
    Mr. McElhone: I am glad of this opportunity to thank children's panel members, reporters, social workers and police. Their efforts in the last five years have ensured much more thorough consideration of the needs of children in trouble and a greater involvement of parents.
    Residential and supervisory resources for the increasing number of children placed under supervision remain under pressure, but the development of intermediate treatment is helping to keep more children constructively within the community. I have recently consulted a number of bodies about possible changes in the powers and procedures of children's hearings and of the courts in relation to proceedings against children. Comments are still being received.
    Mr. Taylor: Does the Minister agree that the work of the children's panels is being undermined by the shortage of List D places? In those circumstances, for how many extra places has the hon. Gentleman asked the Chancellor of the Exchequer in his recent five-year spend-
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    ing programme? What success has he had in seeking the money desperately needed for the expansion of this work?
    Mr. McElhone: There will always be a need for secure places and other places in List D schools, but this is not the only way to tackle children in trouble. The emphasis should be on various forms of treatment and not necessarily List D places.
    Mr. David Steel: Does the Minister agree that the children's panel system has been the subject of much ill-informed criticism and that the basic difficulty is the lack of facilities with which to carry out the work?
    Mr. McElhone: I do not deny that there is a lack of facilities. I agree that the system has been much criticised and that much of the criticism is ill-informed. I wish that some of the hon. Members who criticise the children's panels would see them working. It is a good system, which is still in its infancy even though it has been going for five years. The way to tackle the problem is to give the system a chance and have confidence in the members of the children's panels.

    Clackmannan District
    Mr. Reidasked the Secretary of State for Scotland whether he will pay an official visit to Clackmannan district.
    Mr. Millan: My right hon. Friend has no plans at present to do so.
    Mr. Reid: Does not the right hon. Gentleman consider that the recession in the textile industry, which has hit Clackmannan with particular ferocity, justifies a visit by the Secretary of State to the area? Will he institute an investigation into the circumstances of the closure of Magee's clothing factory at Tillicoultry, a company which has received considerable Government funds? Will he use his good offices with the SDA to ensure that it gives a favourable hearing to the Central Region's plea for four advance factories of 10,000 sq. ft.?
    Mr. Millan: The Magee factory is not a Government responsibility, but what happened was extremely unfortunate, to put it mildly. We told the firm that if it wished to continue in the area and move to another factory, we should sympathetically consider giving financial

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    assistance, but the firm decided to move. I shall draw the attention of the SDA to what the hon. Gentleman said. The SNP spends a great deal of time disparaging the SDA, but when it comes to a constituency problem it is anxious to obtain all the help it can from the SDA.
    Mr. Buchan: If my right hon. Friend decides to go to Clackmannan, will he ask the hon. Gentleman to amplify his threat that if the Shetlands seek any share of the oil revenues the SNP will invoke international law to prevent them from getting it? The relevant reference is the Falkirk Herald of 17th January.
    Mr. Millan: I should not like to see the Shetlanders let loose on the SNP. It would be a rather bloody sight.

    Bus Services
    Mr. Monroasked the Secretary of State for Scotland what consultations he has had with the local authorities concerning the sufficiency of bus services for the travelling public; and what effect any reduction will have on employment.
    Mr. Corrieasked the Secretary of State for Scotland what further help he intends to give the rural areas to assist in preventing a complete breakdown in rural transport.
    Mr. Millan: After consultation with the local authorities, I have made sufficent provision in the rate support grant settlements, for this year and next, to enable authorities to deal with requests from public transport operators for assistance to maintain services. But it is for each regional and island council to decide what assistance to provide, in the light of its own expenditure priorities and its assessment of the level of service needed in its area.
    Mr. Monro: Is the right hon. Gentleman aware of the anxiety felt by bus drivers and conductors that they may become unemployed and by the travelling public about the lack of services? In view of the cost of inflation to local authorities, will he reconsider his policies in this regard?
    Mr. Millan: No, Sir. I have explained the position to the STUC. The amount of subsidy going to the Scottish Bus Group from the regional authorities in the
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    current year is, because of the authorities' decision, less than the amount provided for in the rate support grant. There is no question of the Government's not providing sufficient sums. As for next year, the amount provided for in the rate support grant could accommodate the demands that the Scottish Bus Group has made on the regional authorities, even if they were met in full. These are matters that the regional authorities must decide for themselves, and these questions should be put to the regional authorities and not to me.
    Mr. Alexander Wilson: When considering rural bus services and subsidisation of some of the private firms involved, will my right hon. Friend consider instructing British Rail to resuscitate some of the branch lines which were closed in the past 10 or 20 years? They would be much more satisfactory to the Scottish public than some of the bus routes.
    Mr. Millan: I dare say they would be, but I am not in a position to instruct British Rail about anything. A considerable sum is already going into British Rail for capital programmes and current subsidies, and I can hold out no hope of reopening branch lines.
    Mr. Corrie: Is the right hon. Gentleman aware that a number of the people who lobbied hon. Members some weeks ago are now suggesting taking industrial action, which is very sad? If the right hon. Gentleman has not spoken to them, will he suggest that that action would do no one any good, particularly the people who would suffer in the rural areas?
    Mr. Millan: I have met the STUC and representatives of the unions principally concerned about the matter and explained the position. I agree that industrial action is not the way to solve the problem, but I repeat that the approach should now be to the regional councils. Perhaps it would help if I wrote to the two hon. Members concerned explaining the position and made the letter public, so that the public could understand the position.
    Mr. David Steel: Is the right hon. Gentleman aware that not just today but several times at the Dispatch Box he has unfortunately given the impression of washing his hands of the whole matter

    1305
    and passing the buck to the regional authorities? Does he accept that the subsidy demanded of the Borders Region will have increased tenfold in two years and that the Government are not compensating the authority for that? When will the Government introduce new legislation?
    Mr. Millan: It is not a question of passing the buck: we have passed the money. The hon. Gentleman's regional council was asked for £250,000 in the current year, and it has agreed only £200,000, which is not out of line with other regions in Scotland. The authority of the hon. Member for Dumfries (Mr. Monro) was asked for £600,000 and volunteered only £380,000. The sums that have gone to the Scottish Bus Group in the current year are less than was provided for in the rate support grant. Therefore, I accept no responsibility for those figures. I want to see good rural bus services, but the House has put the responsibility on the local authorities and hon. Members should take up the matter with them first.
    Mr. Cryer: Does my right hon. Friend agree that the Scottish Tories are as hypocritical as their English counterparts? Outside the House they call for public expenditure cuts, but in the Chamber they want more money to be spent by the Government when a matter affects their own constituency, even to the extent of trying yesterday to pass legislation to reduce standards by eroding the 1968 Transport Act.
    Mr. Millan: I agree with my hon. Friend. We shall be glad to welcome him more often to Scottish Question Time if he asks such intelligent and penetrating supplementary questions.
    Mr. Buchanan-Smith: Does the Minister acknowledge that the threatened explosion of bus fares will particularly hit those who live in rural areas, where it will increase the cost of living? What representations has he made to the Chancellor of the Exchequer to make sure that at least the other form of transport in rural areas—the private car—is fairly treated in the forthcoming Budget?
    Mr. Millan: I am sure that my right hon. Friend will read with interest what the hon. Gentleman has said.
    Mr. Thompson: We have had a campaign urging us to "Save it", but should we not now have a campaign urging us to "bus it", and heed what is said?
    Mr. Millan: Yes, if people did that, some of the problems would disappear. Most of those who come to me to complain about bus services get into their private cars and drive away when they leave me.

    PATRICK MEEHAN
    Mr. David Steelasked the Lord Advocate what representations he has received concerning the case of Patrick Meehan.
    The Lord Advocate (Mr. Ronald King Murray): Various representations have been received from Patrick Meehan and the Patrick Meehan Committee. These representations have been passed to my right hon. Friend the Secretary of State for Scotland.
    Mr. Steel: Has the right hon. and learned Gentleman read the book that one of my constituents, a Mr. Kennedy, has written on this case? Does he think that confidence in the administration of justice in Scotland demands either an inquiry or a reference back to the courts of the evidence that he has produced?
    The Lord Advocate: The answer to the first branch of the hon. Gentleman's question is "Yes". The answer to the second branch is "No".
    Dr. M. S. Miller: I have a vested interest in the case as it was my aunt who was murdered. Having had talks with my uncle on this subject, I can tell my right hon. and learned Friend that there will be no objection on his part to an inquiry. I accept that there should be a public inquiry into the whole case.
    The Lord Advocate: That matter was known to me and to my right hon. Friend the Secretary of State for Scotland, and it was taken into account.
    Mr. Rifkind: Will the right hon. and learned Gentleman take into account that the alleged new evidence that is presented in Mr. Kennedy's book is almost entirely obtained from those who have substantial criminal convictions? Will he take that into account in considering the case for a public inquiry?
    The Lord Advocate: Yes.

    AIRDRIE SHERIFF COURT
    Mr. Canavanasked the Lord Advocate how many residents of West Stirlingshire have been prosecuted at Airdrie Sheriff Court since the reorganisation of the sheriffdoms.
    The Lord Advocate: Since 16th May 1975 there have been 50 prosecutions relating to residents of West Stirlingshire.
    Mr. Canavan: Is my right hon. and learned Friend aware of the great inconvenience that is caused by members of the legal profession and citizens in the Kilsyth area by having to travel to the Airdrie Sheriff Court? Is he aware that there is virtually no public transport? Will he consult his colleagues in the Scottish Office about the possibility of using a suitable building in the Kilsyth-Cumbernauld district to serve the dual function of a district court and a sheriff court?
    The Lord Advocate: Of these 50 cases, 43 originated from offences in the Kilsyth district. Airdrie is the nearest sheriff court. According to my information there is a reasonable public service available from Kilsyth to Coatbridge and Airdrie. There is a bus service from Coatbridge to Airdrie. It seems that on balance the nearest sheriff court is the most appropriate court.
    Mrs. Bain: Will the right hon. and learned Gentleman investigate the public transport system in the area of Airdrie? I can assure him that my constituents have experienced exactly the same problems as those experienced by constituents of the hon. Member for West Stirlingshire (Mr. Canavan).
    The Lord Advocate: I recognise that the availability of public transport is an important element in considering the convenience of a sheriff court.

    GLASGOW COURTS
    Mr. Teddy Taylorasked the Lord Advocate when he next intends to visit courts in Glasgow.
    The Lord Advocate: I have arranged to visit Glasgow on Monday next in order to examine the state of prosecution in the District Court of Glasgow. As I intend
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    to discuss the subject with the procurator fiscal and his staff and to inspect the accommodation provided for the procurator fiscal in the Central Court, I shall not have time to undertake any other task on this occasion.
    Mr. Taylor: Is the right hon. and learned Gentleman aware how nice it is to find at least one Minister prepared to do something about real problems? On his next visit to Glasgow will he take the opportunity to visit the Glasgow Sheriff Court to see the prevailing deplorable conditions? Will he be able to give us some news that an attempt might be made to modernise or extend the court?
    The Lord Advocate: I have already answered a question to that effect. In the context of my ministerial responsibility an effort is being made to alleviate the congestion at the court. Unfortunately, on Monday next I shall not be able to visit the court to consider its problems.

    DIVORCE LAW
    Mr. MacCormickasked the Lord Advocate what recent representations he has had relating to the reform of the divorce law in Scotland.
    The Lord Advocate: I have not received any representations recently. This may not be unconnected with the initiative taken by the hon. Gentleman in introducing his Bill which received a Second Reading on Friday last.
    Mr. MacCormick: Will the right hon. and learned Gentleman confirm that the Government broadly support that measure? Will he do his best to ensure that the Standing Committee that is to consider the Bill meets as soon as possible?
    The Lord Advocate: Questions concerning the Committee are not for me. It is a Private Member's Bill. It has been indicated on several occasions from the Government Front Bench that the Government will give drafting assistance.

    PROCURATORS FISCAL
    Mr. Monroasked the Lord Advocate if he is satisfied that sufficient procurators fiscal are in post for the

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    conduct of prosecutions in the district courts.
    The Lord Advocate: Sufficient procurators fiscal are in post for the conduct of prosecutions in those district courts where this responsibility has already been assumed by the Procurator Fiscal Service.
    On 16th May 1976 the service will assume responsibility for prosecutions in the remaining district courts—15 in number. The additional staff required for this purpose are not yet in post, but it is hoped that they will be before 16th May. In the case of the legally qualified personnel it may be a little later before they are all recruited.
    Mr. Monro: I am grateful to the right hon. and learned Gentleman for that detailed reply. Will he give an indication that in general there will now be a reduction in the time taken in bringing cases to court?
    The Lord Advocate: I am afraid that I cannot give any such undertaking. As the hon. Gentleman will appreciate, the Procurator Fiscal Service has taken on a considerable additional burden in prosecuting in district courts. That is a problem that will have to be coped with before I can give any hope that there will be a positive reduction in the delay in bringing cases to court.
    Mr. Rifkind: Is the right hon. and learned Gentleman satisfied with the amount of training that is being given to the new justices who are attending and taking part in the administration of these courts?
    The Lord Advocate: As the training is in an early stage of development, it would be quite wrong to give the impression of complacency or satisfaction. Training is at an early stage and it is being constantly considered and reconsidered. I hope that the hon. Gentleman will play his part in ensuring that the judges who volunteer for this work will take a full part in the training.

  SCOTLAND

    Local Authority Staff
    Mr. Wattasked the Secretary of State for Scotland if he will make an early review of the statutory duties at present carried out by local authorities
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    with a view to reducing the numbers of staff employed in their execution.
    Mr. Millan: No, Sir. The statutory duties at present carried out by local authorities have been conferred on them over the years by Parliament.
    Mr. Watt: Does the right hon. Gentleman recognise that many local authorities had to appoint officials to carry out these statutory duties, and that now the circumstances have changed? Is he aware that in many cases the officials are grossly under-employed?
    Mr. Millan: If they are underemployed, there is no reason for the numbers not being reduced.

    Education Expenditure
    Mrs. Bainasked the Secretary of State for Scotland if he will make a statement on educational expenditure in Scotland during the financial year 1976–77.
    Mr. McElhone: I would refer the hon. Lady to the White Paper on Public Expenditure to 1979–80, which was published on 19th February.
    Mrs. Bain: Is the hon. Gentleman satisfied with the criteria that will be used in implementing any public expenditure cuts? Is he satisfied with the criteria applied by the Strathclyde regional authority, which opened and closed Cumbernauld Technical College in one day? Will the hon. Gentleman indicate whether he was consulted about that decision? No one at Cumbernauld appears to have been consulted.
    Mr. McElhone: These matters are for the Strathclyde regional authority. The White Paper provides for a 5 per cent. growth in current expenditure. It is time that the SNP treated the Scottish electorate with some sincerity. After all, on education matters it has no policy. I find it somewhat disturbing and dangerous that the SNP keeps issuing pamphlets claiming that 40,000 children are suffering from part-time education when it knows that the figure is about half that. It is disturbing and dangerous that it issues pamphlets about the difficulties of unemployed school leavers and about countless other matters. The SNP should stop calling itself a party when it is merely a pressure group which has no policy for Scotland.
    Mr. Teddy Taylor: As the Minister spent most of his time as a Back Bencher calling for a massive expansion in education expenditure, and then replaced the hon. Member for Aberdeen, North (Mr. Hughes), who resigned because of the Government's cuts in schooling, does the hon. Gentleman accept the Government's proposed reduction in capital spending for the school building programme?
    Mr. McElhone: I am sorry to say that the hon. Gentleman is wrong again.
    Mr. MacCormick: I listened with interest to what the Minister had to say about the Strathclyde regional authority's proposals for education cuts. Is he aware that on the Isle of Coll a school has been recently wired for electricity—the white man's tremendous invention—and that as a result of the education cuts it is not to be connected to the electricity supply?
    Mr. McElhone: I can only say that the electorate cannot be wired to common sense if it has an SNP Member of Parliament to represent it.

    Unemployment
    Mr. Hendersonasked the Secretary of State for Scotland what further measures he intends to take to deal with unemployment in Scotland.
    Mr. Millan: I described to the hon. Member on 10th December and 21st January the substantial measures we have already taken. Further measures were announced by my right hon. Friend the Chancellor of the Exchequer on 12th February, including additional help for the construction industry, extensions of the temporary employment and school leavers recruitment subsidies and the job creation scheme, assistance to encourage Stockbuilding in certain industries, and more finance for industrial training.—[Vol. 902, c. 450–1; Vol. 903, c. 1332–3.]
    Mr. Henderson: In view of that rather complacent answer, is the Minister aware that the number of redundancies being created in Scottish factories is far outstripping anything produced by the job creation scheme and that in the period up to January, although 2,000 jobs were provided under the scheme, 10,000 jobs were lost?
    Mr. Millan: My answer was not complacent. I have said repeatedly that the unemployment figures are too high, but they are factual answers and the measures which I have described are having an appreciable effect.

RHODESIA
Mr. Teddy Taylor Mr. Teddy Taylor (by Private Notice) asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the announcement this morning by the President of Mozambique that he has declared a state of war against Rhodesia.
The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Edward Rowlands): The reports which I have seen do not confirm that the President of Mozambique has declared war against Rhodesia. I understand that President Machel, in a broadcast, spoke of frontier violations by Rhodesian security forces which amounted to a war of aggression. He reaffirmed Mozambique's support for the liberation struggle and called for defensive preparations, including the building of air raid shelters.
The British Government's policy is that an early settlement, based on majority rule, by peaceful means is essential. We regret that the illegal régime has so far failed to take advantage of the opportunities for a settlement. The need for Mr. Smith to accept majority rule in order to safeguard the peaceful future of all the people of Rhodesia is now even more important.
I welcome President Machel's announcement that his Government intend to apply forthwith full United Nations sanctions against Rhodesia.
Mr. Taylor: Will the Minister at least make it clear that he and the British Government will deplore an invasion of Rhodesia by Mozambique? Is he taking any steps, diplomatically or otherwise, to dissuade Mozambique from invading, or inviting Cuban mercenaries to invade, Rhodesia? If bloodshed becomes inevitable, will he at least give Rhodesia a chance to defend itself by scrapping British sanctions and providing Rhodesia with arms at least comparable to those of the invading forces?
Mr. Rowlands: As I told the hon. Gentleman in my reply, President Machel has not spoken of war against Rhodesia. That is a wrong interpretation of the report we have received. The easiest and simplest way to solve the problem is for the Smith régime to take action on an urgent transition to majority rule.
Mrs. Hart: Will the Minister confirm that what the President of Mozambique has announced is the closing of the border and the application of economic sanctions against Rhodesia? Will he recall the understanding which was reached between the United Kingdom Government and the Government of Mozambique in May last year on the supply of British aid to Mozambique? Is he aware that there has been no aid to Mozambique since then? Will he persuade his right hon. Friend the Foreign Secretary to take urgent action to fulfil the understanding that was reached almost a year ago?
Mr. Rowlands: The British Government fully support the proposals made at the Kingston Commonwealth Heads of Government meeting for an international programme of aid for Mozambique to help to offset the effects of sanctions. We have subsequently been in contact with the Mozambique authorities with a view to sending out a team of officials. That is the policy of Her Majesty's Government.
Sir Frederic Bennett: Does the hon. Gentleman accept that there are many of us who hold no particular brief for Mr. Smith? I hope that the Minister will take me seriously on that matter. Is not the best way to prevent a dangerous situation becoming even more dangerous to reassert British sovereignty in Rhodesia? I am suggesting not that we should sustain the illegal régime but that we should seek to prevent a dangerous situation becoming even worse because of invasion from outside. Would this not establish—
Mr. Speaker: Order. Many hon. Members wish to put supplementary questions.
Sir F. Bennett: Will not the Minister protect the interest of the majority of the people of Rhodesia?
Mr. Rowlands: I am sure that the best way to solve the problem is for Mr.
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Smith to take urgent action towards majority rule, which is the wish of the majority of the Rhodesian people.
Mr. Hooley: Does my hon. Friend agree that there is now a dangerous drift towards a racial war in Southern Africa? Would it not be advisable for the Foreign Secretary to suggest the convening of an urgent meeting of the Security Council to determine the threat to peace under Article 7 of the Charter and to take appropriate action?
Mr. Rowlands: We shall carefully consider this move. The Security Council has been closely involved in the Rhodesia situation for the last 10 years. I shall consider the matter again.
Mr. Maurice Macmillan: I accept that any agreement between Mr. Smith and Mr. Nkomo would considerably ease the position. Are Her Majesty's Government giving any incentive to Mr. Smith to reach such an agreement? If an agreement is reached, will his position and that of other Europeans in Rhodesia be any safer? If the Minister cannot give such an indication, should not Mr. Smith be extremely alarmed at what is happening in Mozambique? If the Minister can give such an indication, how does he propose to give it?
Mr. Rowlands: I do not think that I can go further than what was said by my right hon. Friend the Foreign Secretary yesterday. We have been considering what further action and steps we can take.
Mr. Robert Hughes: Will my hon. Friend ask the Foreign Secretary to consider providing material, including military aid, from this country to liberation movements which seek to free themselves from oppression?
Mr. Rowlands: Our proposals to join an international programme of aid to Mozambique are entirely for peaceful purposes.
Mr. Thorpe: Is it not a fact that any legal régime in Rhodesia enjoying majority support of the people will be entitled to receive the protection of the Crown and will obtain it?
Mr. Rowlands: That is not the present situation.
Mr. Arthur Bottomley: Is my hon. Friend aware that we are all concerned to see a peaceful solution in Southern Africa? The question is exactly how we can help. Did not the statement made yesterday by the Foreign Secretary show what the Government feel about this matter, and did he not stress the urgency of the situation? Therefore, could not the Commonwealth Secretariat be brought in to seek to bring the parties together in an effort to reach a peaceful solution?
Mr. Rowlands: We are willing to consider any means by which we can promote a peaceful solution of the problem and will consider all the ways in which we can do so. As my right hon. Friend the Foreign Secretary said yesterday, he is considering the report of Lord Greenhill and others.
Mr. John Page: Will the Minister now answer the question put by my hon. Friend the Member for Torbay (Sir F. Bennett) about whether Rhodesia is still a Crown colony even though its régime does not receive Government approval? If it is a Crown colony, does not a residual responsibility fall upon Her Majesty's Government?
Mr. Rowlands: It is not a question of approval. It is a question of illegality. This Parliament has reaffirmed time and again that it is an illegal régime.
Mr. Newens: Will my hon. Friend assure the House that in no circumstances will assistance be given for any action which would assist the Smith régime, because such assistance or action would not be in the interests of the Rhodesian people, black or white, who have to face the fact that minority rule must end immediately?
Mr. Rowlands: My right hon. Friend the Foreign Secretary put the Government's position very clearly yesterday. There is no question of giving military support to an illegal régime.
Mr. Tugendhat: Would not the Minister agree that the use of words like "state of war" is extremely unhelpful in the present situation? Is he aware that we all desire most earnestly the speedy resolution of the problem and that the only chance of achieving that will be a transition to majority rule? Does he also agree that unless this takes place quickly the men of violence on
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both sides will gather strength and all hope of a peaceful transition will be lost?
Mr. Rowlands: The hon. Gentleman has courageously said what the vast majority of the House knows to be true.
Mr. Evelyn King: Did not a previous Labour Government, supported, I think, by the Minister, ask the House to pass a solemn Act declaring that the Smith régime was illegal and that responsibility for the government, and therefore the welfare, of Rhodesian people, black as well as white, lay exclusively with this House? Is that not so? Will the Minister admit it—
Mr. Rowlands: Rhodesia remains, in law, one of Her Majesty's dominions. That is the legal position.
Mr. James Johnson: Does my hon. Friend accept that in this dynamic situation, when history is moving so quickly, the people who are now speaking for black Africans are those leading the guerrilla forces in the bush? Should we not be getting in touch with those leaders in anticipation of the future?
Mr. Rowlands: The future lies in urgent negotiations between Mr. Nkomo and Mr. Smith. That seems to be the most constructive way forward. Let us hope and pray that these negotiations will come to an urgent and successful conclusion and achieve a transition to majority rule.
Mr. Walters: Does not the gravity of the situation in Africa warrant an urgent meeting of the Security Council? Should we not at the same time press with our European partners for the withdrawal of all foreign troops from Africa?
Mr. Rowlands: As I said earlier, we shall certainly consider carefully whether this matter should be referred to the Security Council. There has already been an initiative by the EEC countries in a statement recently.
Mr. Grocott: Has my hon. Friend received any confirmation of reports in the Press of atrocities committed by security forces in Rhodesia? If there is even a grain of truth in them, does that not suggest that even at three-quarters past the eleventh hour the Smith regime has not remotely begun to come to its senses?
Mr. Rowlands: I have no information to confirm or deny such reports.
Mr. Churchill: In the event of the Soviet Union sponsoring a war of national liberation against Rhodesia, which side would the British Government take politically, morally and diplomatically?
Mr. Rowlands: This is a hypothetical question. The position which both main parties in the House have supported for a long time is the need to achieve a peaceful transition to majority rule in Rhodesia. That is the side we are on.
Mr. Flannery: No matter how much the Conservative Party continues its traditional role of running away from democracy, does not my hon. Friend agree that the only chance of peace in Rhodesia is for the minority to engage in the process of democracy and see that the majority have "one man, one vote" in order to institute a democratic regime in that country?
Mr. Rowlands: I agree. The only answer lies in an early transition to majority rule.
Mr. Townsend: Will the Minister make it perfectly clear that he totally condemns guerrilla activity from Mozambique into Rhodesia?
Mr. Rowlands: We condemn any form of military action in that part of the world. The answer lies in a peaceful transition to majority rule, but I fear that the situation could be created where violence will become the norm. It is in the interests of Mr. Smith and all the Rhodesians to move as rapidly as possible towards majority rule.
Mr. Eldon Griffiths: Is the hon. Gentleman saying categorically that in his speech, which was monitored in London, President Machel did not use the words "state of war exists" or that, if he did use them, he did not mean them? Since a threat to peace unquestionably exists in this part of the world, will the hon. Gentleman take seriously the propositions that the matter should be raised again in the Security Council and that the Government would be wise to keep in step with their EEC partners and President Ford?
Mr. Rowlands: I stated in my original reply that our reports were that the
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President spoke of frontier violations by Rhodesian security forces which amounted to a war of aggression and that he called for defensive preparations including the building of air raid shelters. We have no report of his using the words suggested by the hon. Gentleman or referring to a state of war against Rhodesia. I have already said two or three times that we shall consider what further action might be taken in the Security Council.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. We cannot pursue this matter any further now.
Mr. John Page: On a point of order, Mr. Speaker. In view of the evasive and inaccurate replies given by the hon. Member for Merthyr Tydfil (Mr. Rowlands), whom I believe to be a Minister, I beg leave to give notice that I shall seek to raise this matter on the Adjournment.
Mr. Speaker: There are words normally used—other than those used by the hon. Member—in these instances.
Mr. Cormack: As I advised your office as soon as I could, Mr. Speaker, I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the deteriorating situation in Rhodesia".
This application speaks for itself and I do not wish to detain the House long. By whatever standards one examines it, this is an urgent matter of the utmost importance and it is specific.
It is quite clear from the answers we have received from the Minister—I do not comment on the content—that this is a matter which needs the widest discussion in the House at the earliest possible opportunity.
Mr. Speaker: The hon. Member for Staffordshire, South-West (Mr. Cormack) seeks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the deteriorating situation in Rhodesia".
As the House knows, under Standing Order No. 9 I am directed to take

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account of the several factors set out in the Order but to give no reasons for my decision. I have listened carefully to the hon. Member, but I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 19TH MARCH
Members successful in the Ballot were:
Mr. Michael Alison
Mr. Eric S. Heffer
Mr. Bryan Davies

QUESTION OF PRIVILEGE (MR. SPEAKER'S RULING)
Mr. Speaker: I must now rule on the question of privilege raised yesterday by the hon. Member for Essex, South-East (Sir B. Braine). I have given his complaint the most careful consideration in the light of previous cases of this kind. I have come to the conclusion that, on balance, this is a matter on which the House should have the opportunity to express an opinion. I am therefore prepared to give precedence over the Orders of the Day to a motion concerning the complaint.
The Lord President of the Council and Leader of the House of Commons (Mr. Short): In view of your ruling, Mr. Speaker, I beg to move,
That the matter of the complaint made by the hon. Member for Essex, South-East (Sir B. Braine) be referred to the Committee of Privileges.
I think it would be in the interests of the House as a whole for us to decide that no further debate should take place at this stage.
Question put:—
The House proceeded to a Division—
Mr. Thomas Cox and Mr. David Stoddart were appointed Tellers for the Ayes but, no Member being willing to act as Teller for the Noes, Mr. Speaker declared that the Ayes had it.
Question accordingly agreed to.

STATUTORY INSTRUMENTS, &c.
Mr. Speaker: In order to save the time of the House, unless there is an objection I propose to put together the Question on the two motions relating to Statutory Instruments.
Ordered,
That the Fat Sheep (Protection of Guarantees) Order 1976 (S.I., 1976, No. 250) be referred to a Standing Committee on Statutory Instruments,
That the Fat Sheep (Guarantee Payments) Order 1976 (S.I., 1976, No. 249) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Harper.]

SEX DISCRIMINATION (AGE OF RETIREMENT)
3.55 p.m.
Mr. Greville Janner: I beg to move,
That leave be given to bring in a Bill to eliminate discrimination between men and women as to the age of retirement.
The Bill is not designed to require men to retire at 60 but to enable them to do so if they wish, on the basis that there can be no justification for forcing men to soldier on until they are 65, however ill they may be and however much they may wish to retire, while women who have equal rights in all other respects are able to retire at 60.
The present system is ludicrous. There are more than 1 million unemployed people, of whom most are well and most are anxious to work. There are also about 1 million men aged between 60 and 64, the majority of whom wish to retire but are unable to do so. Men who do not want to retire are forced to do so, and men who are anxious to have a decent and comfortable retirement are required by our incredible system to work on. At a time when women had fewer rights than men there was justification for women to have a shorter working life. But today when women—who live longer—are able to retire earlier the system is without logic or humanity.
Women have equal rights in work. They have had equal pay from 29th December. The Sex Discrimination Act is in force. Women will shortly be entitled to maternity pay and be free to return to work after they have given birth to a child at any time within 29 weeks. On the other hand, men will be forced to do without many of those rights by definition, but will also be required to continue to work on for an extra five years.
The expectation of life of a woman who retires at 60 is 19·9 years. An average of nearly 20 years of retirement lie before her. A man who retires at 65 may look forward to 12·1 years of retirement—12 years instead of 20 years. There can be no justification for that gross inequality.
My hon. Friend the Member for Preston, North (Mr. Atkins) and I, who have been pressing for this measure, are
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asked how it can be afforded at a time when there is little money and a high rate of unemployment. Our answer is that the high rate of unemployment is an indication of the low cost. The jobs vacated by people who are earning but who will go on to pension will be taken by people who are at present unemployed and receive unemployment benefit. That would save the Exchequer a substantial sum. What is more, the man who will be retiring will usually have only himself and his wife to look after, whereas the man who takes his place at work will usually be a family man. He will be anxious to have a job and will be paying tax and national insurance contributions when he gets back to work.
In reply to a question asking how much the total cost of the measure would be, the answer was given of about £1,500 million a year. That is a gross figure, taking no account of the savings which would be achieved through the drop in the unemployment figure.
The number of people at present unemployed, excluding persons temporarily stopped and adult students, at the last count, was 1,251,826, just over 1¼ million, of whom 981,308 are men. So we have a total unemployment figure of about 1¼ million, of whom probably 1 million are fit and could work. The total number of men aged between 60 and 64 is 1,491,500, just under 1½ million, of whom 1,171,000, at the latest count in 1972, were at work. The number of men be-between 60 and 64 who are at work almost matches the number of people who are unemployed.
We can safely reckon that although some of the jobs vacated by men who leave them in order to retire would be left empty and not be refilled, there would still be a balance of about 750,000 jobs, which would just about match the number of able-bodied and younger people who at present are unemployed and unhappy, willing and anxious to work and unable to do so, who are living off unemployment benefit, social security benefits, and unable to keep themselves and their families in a dignified way.
Therefore, we are forcing elderly men to remain at work and depriving them of a decent and dignified retirement at the very same time as we are keeping people out of work who are anxious to

1323
perform a dignified task and get on with the job but who are unable to do so because jobs are not available. I estimate, balancing the cost in purely financial terms, that my proposals would cost about £500 million a year. However, we cannot also leave out of account the social costs or the suffering which is caused to people who are forced to stay on at work when they are unfit to do so. If we compare £500 million with £51,172 million which is the estimated total public expenditure for 1975–76, it is about 1 per cent. at the very most.
Ever since it became known that my hon. Friend the Member for Preston, North and I were hoping that leave would be given to introduce this Bill, we have received a flood of correspondence from people all over the country saying how much they hope that the House will give leave to introduce the Bill and that it will be passed, if not in this form, perhaps in some other form if it is taken up by the Government.
I ask hon. Members to listen to two brief extracts from two typical letters from two totally different parts of the country. The first is from a gentleman who says that he will reach the age of 65 on 20th June 1976, so this measure would be too late to help him. He said:
"I used to literally groan with exhaustion and distress as I walked out at 5.00 p.m. every day. When I had still 97 weeks left to work … I was past it but struggled along until July 74. I was completely shot by then … I appealed to one of your friends the Labour M.P. for Oldham who is secretary to the Pensions, a wonderful person, to see if I could retire early and obtain a reduced pension until I was 65 but he could not help me. I would have like to have retired in decency and honour. I don't want sick or dole, had I continued to work full time it would have killed me and yet I can't manage on part time earnings. I feel, though it can be of no use to me, that you are embarking on a great and needful task in which there
1324
is tremendous humanity and a lot of needy cases in the 60–65 age group."
The other letter says:
"I am a young-looking "60"… but at most times I feel "70". I have Hernia trouble, Vertigo, low blood pressure and also lost a leg in the last war, and I have often wondered how on earth I can keep going for another five years. I am only stating this, and I know there must be hundreds who feel the same way or are in a worse position and would welcome a chance to slow down (as my doctor keeps telling me). Please don't think I am feeling sorry for myself. It is just that I feel sometimes that having worked all these years (46) one begins to feel ready to call a halt."
The House has the opportunity to call a halt to a system that is unkind, that lacks compassion and common sense and that is ludicrous in the modern world. The House has the chance to provide equality for men in a way that all hon. Members would welcome.
I ask that leave be given to introduce this Bill in the hope that it may be one of those rare, brief measures that will be allowed to go through.
Question put and agreed to.
Bill ordered to be brought in by Mr. Greville Janner, Mr. Ronald Atkins, Mr. Tom Bradley, Mr. Eric S. Heffer, Dr. J. Dickson Mabon, Mr. Max Madden, Mr. Jim Marshall, Mr. Robert Kilroy-Silk, Mrs. Gwyneth Dunwoody, Miss Joan Maynard and Mrs. Millie Miller.

SEX DISCRIMINATION (AGE OF RETIREMENT)
  SEX DISCRIMINATION (AGE OF RETIREMENT)
  Mr. Greville Janner accordingly presented a Bill to eliminate discrimination between men and women as to the age of retirement: and the same was read the First time; and ordered to be read a Second time on 19th March, and to be printed. [Bill 85.]
ORDERS OF THE DAY

  RATING (CARAVAN SITES) BILL [Lords]
  Order for Second Reading read.
  Mr. Speaker: Before I call the Minister, I should indicate that I have not selected either of the amendments on the Order Paper.
  4.6 p.m.
  The Under-Secretary of State for the Environment (Mr. Gordon Oakes): I beg to move, That the Bill be now read a Second time.
  This is a fairly short Bill with only one purpose, namely, to amend the law concerning the valuation and rating of leisure caravans and caravan sites. It provides that sites and individual caravans with their pitches can in future be valued and rated as one unit. This means that rates will be collected only from the site operator instead of from him and all the individual caravanners as well.
  Caravan rating is a subject which has troubled me much during the last year or so. The problem, simply put, is that, for reasons that I shall go into in a moment, many tens of thousands of caravans are now being rated, whereas previously they were not. The difficulties that this has brought are already well known to this House. Over 300 hon. Members from both sides of the House have written to me in recent months about these problems, and I made detailed statements to the House explaining the situation on 25th June, as reported at cols. 155–6 of the Official Report, and 24th July, as reported at cols. 1256–64. In those statements I promised to introduce the legislation at present before us to deal with these problems.
  Before I explain the provisions of the Bill, I think I should, for the benefit of those hon. Members who have not so far been involved with this problem, explain briefly just how caravans came to be rated and the difficulties that have arisen.
  For rating purposes there are three categories of caravans. The first are permanent residential caravans, which
  1326
  are caravans used as a permanent home. These are separately rated at present and will continue to be separately rated and so are not affected by the provisions of this Bill.
  The second category is caravans used for touring. Such caravans will not be permanently sited on any one pitch, and will not, therefore, be rateable and also will not be affected by the provisions of the Bill.
  Thirdly, there are leisure caravans. These are caravans permanently sited but which, under the terms of the site licence or planning permission, can be used only for a portion of the year. They may be used only by the caravan owner, or they may be let to other holidaymakers. It is these leisure caravans about which the Bill is concerned.
  Prior to 1966 the whole caravan site, including the pitches, was rated as one unit, but individual caravans were not included in this assessment as they were considered as chattels and so were not rateable. This applied both to permanent residential caravans and to leisure caravans. Then in 1966, in the case of Field Place Caravan Park Ltd v. Harding, the Court of Appeal decided that caravans that stayed in one place for a period of time which could be regarded as permanent were separately rateable, together with the pitch on which they stood. This covered both residential and leisure caravans, as whether a caravan is separately rateable or not depends not on how it is used but on whether the occupation is sufficiently permanent to create rateability. The liability of leisure caravans to be rated has also been upheld in the more recent Scottish cases, such as the Redgates Caravan Park case and the Thompson case.
  Therefore, following the 1966 case, all static caravans, both permanent residential and leisure, and their pitches were liable for separate rating with the site operator liable for rates for the common parts of the site together with any part of the site let out for the use of touring caravans. However, in England and Wales the Valuation Office in the years following 1966 was involved with more pressing tasks—including preparing for the 1973 general revaluation. There were similar difficulties in Scotland. It was therefore unable to get down to valuing

  1327
  the multitude of caravans immediately. In the 1973 revaluation, however, most permanent residential caravans were dealt with and nearly all now have separate rateable values with their owners paying rates like any other householder.
  The task of valuing the quarter of a million leisure caravans was enormous and, naturally, could be undertaken only slowly. About a year ago it became obvious that the disparity of treatment between leisure caravans which had been separately assessed and those which had not could not be allowed to continue much longer. The owners of the caravans which were separately rated were understandably asking why they should be paying rates on their caravans when caravan owners on another site were not. Although all leisure caravans would have been valued eventually, the valuation officers redoubled their efforts last year in order to treat all leisure caravan owners on the same basis.
  Now that most leisure caravans have been separately assessed, rating authorities must by law serve a rate demand on the caravan owners—and this is where the problem lies. I do not think I need explain how difficult it is to identify one caravan amongst the many hundreds that may be on a site, let alone trace the owner of that caravan—who may visit the site only occasionally and whose permanent address may be miles away. In some areas the total number of entries in the valuation list for all rateable properties has increased by as much as 20 per cent. because of the separate entries for leisure caravans. In order to collect these rates, many local authorities would certainly have to increase their staff if leisure caravans continued to be separately assessed.
  The Bill resolves this by allowing valuation officers to value as one unit a caravan site together with any leisure caravans and their pitches at present separately rateable. Thus, there will be only one rate demand to the site operator, who will be able to recoup the cost of this additional overhead through the rent charged for the pitch, commonly known as the site charge.
  A side effect of the Bill which will be of considerable interest to caravan owners is that the total rateable value of the combined caravans and site will be less
  1328
  than if they were valued separately. In other words, the owners of leisure caravans will in most cases be paying less than if their caravans were to continue to be separately rated.
  What of the Bill itself? It consists of six clauses and covers the whole of Great Britain. Two clauses relate solely to England and Wales, and two to Scotland. This is not simply because we are anticipating devolution in any way. Scotland's rating law is very different from the English and Welsh law, and whilst the problems are the same they had to be tackled in a slightly different way.
  I shall not take the House through each clause. We shall have the opportunity to examine the measure in detail in Committee. But it might be helpful if I explain in general terms how the Bill seeks to achieve its object, and the main points.
  Clause 1(1) enables the valuation officer to assess as a single unit—"hereditament" is the term used in England and Wales; I understand that a different phrase is used in Scotland—a caravan site, the pitches and the caravans on them which are already separately assessed. When this is done the site operator will be the rateable occupier.
  There are two important points in Clause 1 to which I should draw attention. Clause 1(4) enables this new hereditament to be regarded as a "mixed hereditament" for the purposes of domestic rate relief. This, combined with the lower total of rateable value for the new hereditament, will generally result in a lower total of rates paid—in many cases up to 20 per cent. less—than would otherwise be the case.
  The other important provision in this clause is subsection (7), which enables the owner of a caravan—other than the site operator—to make a proposal for his caravan to be separately assessed. This is to ensure that if, for some exceptional reason, the caravanner would be liable to pay less rates if his caravan were separately assessed than if he had to pay his proportion of the rates on the new combined hereditament, he will not be worse off as a result of the Bill. Clause 1 relates to England and Wales only. These two points are dealt with slightly differently in the Scottish clause, Clause 3.
  Clause 1(8) ensures that the provision in the clause will apply to drainage rates as well as general rates.
  Clause 1(9) ensures that if the Bill receives Royal Assent before 1st April—which I hope it will—it will do nothing to change the situation in the current rating year. The collection of rates from individual caravanners must remain for this year. Many caravanners have already paid their rates and it would be unfair to them to change the system now. It would also create immense problems for local authorities, valuation officers and site operators.
  May I also draw the attention of the House to Clause 2? This provides for the site operator to display information which will indicate to the owners of each caravan included in the single assessment the average rate liability for each caravan. This will enable caravanners to judge roughly whether or not the addition that the site operator makes to the site charge on account of rates is justified by the additional rate burden he has to bear. This was an amendment introduced by the Government when the Bill was considered in another place. Everyone there agreed that caravanners needed some such information.
  Mr. Kenneth Clarke: On that point, will the Minister confirm that the Bill imposes no obligation on a site owner to indicate to individual caravan owners how he has divided up the total rateable value where there are discrepancies in the age and size of the different caravans? In the event of disputes arising out of that, does the Minister contemplate that the Bill will provide any remedy for the caravan owner, other than being separately rated under Clause 1(7)?
  Mr. Oakes: I am grateful to the hon. Gentleman for raising that matter, to which we can give more attention in Committee. In general, however, the position is that it may not necessarily follow that a site operator will strictly arithmetically apply the average to each caravan, because when he is letting his various plots he considers whether a caravan is near to the water supply, whether it is too near to the toilets or too far away from them, the size of the caravan and so on. He will exercise
  1330
  his judgment, we hope, under the provisions of the Bill.
  Therefore, the Government's view at present—although we shall listen to hon. Members in Committee—is that we should not put the burden on the site operator in deciding what formula he uses for different rating of different parts of his site and different caravans. However, the notice is useful so that the caravanner knows what the general rates of that part of the site are and can then do a rough arithmetical calculation. If he thinks that he is being unjustly dealt with in any way, it will be a matter for discussion between him and the site owner. It ought not, I think, to be put on a specific site notice. I am very concerned with the wording of notices. We can consider this matter in Committee. The last thing that I want is for the wording of a notice to be like that of many statutory provisions which are meaningless to many Members of Parliament, let alone caravanners.
  Mr. Michael Latham: Will the Minister answer two questions? The first relates to the four-month period under Clause 2(3). The hon. Gentleman will be aware that many sites are closed for six months of the year, so that a four-month notice put up during a period when a site was closed would be a useless remedy for the caravan owner. My second question is whether caravan owners will be entitled to pay rates by instalments as under the present rating Acts.
  Mr. Oakes: The hon. Gentleman's first point is very valid, because many sites are closed for a six-month period. It would be useless for the notice to be up for four months when the site was closed. That is a matter we can consider in Committee. The second point raised by the hon. Gentleman—whether the rates may be paid by instalments—will be dealt with in the winding-up speech. I should think that that would be allowable. Although the total amount of rates on a caravan would in normal circumstances be far less than the rates to be paid on an ordinary house or hereditament which a person occupied all the year round, this is a matter that we can look at in Committee.
  Mr. Kenneth Clarke Mr. Kenneth Clarke rose—
  Mr. Speaker: Order. This is a three-hour debate. We are to have four Front Bench speeches, and at least 10 hon. Members wish to speak. Interruptions will only cut them out.
  Mr. Oakes: I am grateful, Mr. Speaker. Hopefully, hon. Members will be able to catch your eye during the debate. I shall proceed now in order to allow other hon. Members to speak in the debate.
  In commending the Bill to the House, I might point out that when the Local Government (Scotland) Bill was being considered in another place last Session the Opposition moved a new clause designed to do broadly the very thing which this Bill seeks to do. Examination of the clause revealed certain defects and it was, by leave, withdrawn. However, the debate on it was useful because it showed the pitfalls we had to avoid, and I hope that in this Bill we have done so.
  The Bill is important because it will ensure that caravanners should, in general, be paying less in total next year than they would have been paying if they continued to pay rent and separate rates. It will also prevent a significant increase in local authority expenditure in certain holiday areas which would certainly have arisen if leisure caravans continued to be separately rated.
  It has been suggested that the provisions of the Bill are unique in rating law in that site operators will become liable for rates on caravans which they neither own nor occupy. In theory that is true, but in practice the site operator is in a position similar to that of a landlord of tenanted property in that, although he does not own the caravans, he has control over their siting and usually over the terms and conditions under which they are used.
  It has also been said that the separate assessment should continue but that site operators should be made responsible for collecting the rates on individual caravans and should be given an allowance for doing so. I admit that this is an alternative which I have considered carefully. However, I have decided that, although that would have relieved rating authorities of many of their problems, it would not have made things easier for valuation officers. They would still have to identify the individual caravan owners, assess the caravans and serve the notices.
  1332
  Finally, many caravan owners—for all I know, the hon. Member for Melton (Mr. Latham) is one—feel that we should return to the situation in which caravans were not rateable at all. Although I understand and appreciate the dismay of caravanners who find themselves with a new status of caravanning ratepayers, such a move would, in my view, be unfair and difficult to operate. It would throw an even greater burden on the other ratepayers in areas where there are large numbers of leisure caravans.
  We have done what we can to help all ratepayers by increasing the rate support grant to unprecedented levels this year to keep rates at a reasonable level. I believe that owners of leisure caravans are in a similar situation to the owners of other second homes and should, like them, make a proper contribution to the expenses of the local authority in whose area their caravans are situated.
  Another difficulty is that in the pre-1966 situation all caravans, whether mobile homes or leisure caravans, were not rated because a caravan was not regarded as an hereditament. Certainly great difficulty would result in trying to turn the clock back to the pre-1966 situation because of the question of what is or is not a permanent home, and so on.
  In summary, the net result of this measure is that the cost of collecting rates will be reduced, to the benefit of local authorities and ratepayers. Anything which does that must be a good thing and welcome to both sides of the House. I commend this small but useful Bill to the House.
  4.24 p.m.
  Mr. Michael Morris: The noble Baroness Birk, in another place, on Third Reading said:
  "This was a more complicated Bill than appeared at first sight."—[Official Report, House of Lords, 10th February 1976; Vol. 368, c. 63.]
  The complications remain largely unresolved, despite the best efforts of their Lordships. That is in no way a criticism of their Lordships. It reflects two factors. First, it reflects on the fact that the Government have introduced the Bill late—not late in the Session, because we are not very far on—in relation to the rating year itself. Secondly, it reflects that, in their wisdom, their Lordships were

  1333
  allowed only a limited time to go through the Bill. In fact, the whole process was over and done with in just 26 days.
  The problem with the Bill is the nature of the web that we have before us and how the Government seek to unravel it. Prior to 1966 most matters in this area were fairly serene and straightforward on the old global site basis. Confusion No. 1 came along in 1966 with the case of Field Place Caravan Sites v. Harding, which was mentioned earlier. That was 10 years ago. On top of that, as the Minister said, there was the gigantic preparation for the 1973 revaluation, and then some additional case law in 1974 in Scotland.
  The majority of permanent and leisure caravan owners accept that they must pay rates. There is the natural reaction that they do not want to pay rates, but they accept that they are morally bound to do so.
  The problem is that there are about 90,000 outstanding objections to individual assessments. That is 90,000 out of the 250,000 referred to by the Minister. That, by any yardstick, is a sizeable percentage. I understand that there have been settlements in the Isle of Wight and Cornwall. But, equally, I understand from those involved in these matters that even today more objections are coming in from individual sites. I understand that 90,000 may indeed be a modest estimate and that the figure may top 100,000.
  We understand from what the local authorities and the Government have said that they cannot possibly economically cope with sending out thousands of demands to people, some of whom are known. Some may live in distant areas and others may not be traceable at all. Therefore, the Government have brought forward the Bill to cope with this mess—I think that the Under-Secretary will accept that it is a mess—and to return to the global system, but on a new basis.
  The Opposition understand the problem. We know that some action must be taken to resolve what appears to be a great number of problem areas. We shall seek reassurances on these problems from the Minister in his winding-up speech. I suspect that there will be a larger number of amendments in Com-
  1334
  mittee than was expected when the Bill was originally published.
  The first problem we see is that the principle of the Bill is questionable—the Minister alluded to this matter—because, for the first time, it makes a rateable person pay rates on something which is not in his occupation. I refer specifically to the site operator who will be responsible for someone else's property with no attendant advantages to him and, I understand, no means of redress if he is unable to recover other than through the civil court. I should be grateful for clarification on that point.
  Why could not the whole matter be left under Section 55 of the General Rate Act 1967 where the site owner would pay his own rates and collect the others instead of under Section 24 where he is to be responsible for the whole?
  The question of timing is unfortunate on a number of counts. Their Lordships were given a relatively short time in which to consider the Bill, and 10 years have elapsed since the case to which reference has already been made. One would have thought that, as the years have gone by, the Government would have carried out extensive consultations with those involved in this industry on this rather knotty problem. I understand from my conversations with the organisations representing site owners that there were no extensive consultations prior to the drawing up of the Bill.
  I think it is true to say that, if there had been some consultations in depth, the Government would have known from an early date that a normal site operator sends out his rental demand some time in December-January, at the beginning of the year, for the coming season. Yet here we are, at the beginning of March, with a Bill that might just become law before the new rate year starts. The site operator this year—and, as far as I can see, in every year thereafter—will have to send out a separate rate demand, and the Minister will, I am sure, accept that anybody trying to guess the level of rate demand in the last few years would have been in some difficulty.
  There might be some satisfaction for hon. Members, and for the caravan site owners, if we could believe that the whole problem will sort itself out over time, but the worrying dimension is that

  1335
  overhanging everything is the Report we are expecting from the Layfield Committee. The Minister has suggested that it will be any day now. I am convinced that it will not be until the district elections, but we shall see. That may well open up the whole question once again. We must, therefore, ask why we are rushing ahead at this point. If the Government say—this may well be their reaction—that this is the way out at this point of time, my comment is that there are a number of problem areas on which we should like reassurance either this afternoon or in Committee.
  If, as we understand, the site owners are to be statutorily responsible, what safeguards are there for bad debts? The Government have said, as I understand, that there will be safeguards, but none is as yet written into the Bill. Indeed, the only addition written into the Bill in that area is that, as the Minister has mentioned, mere is to be a fine of £50 if the site owner does not put up an adequate notice.
  I was grateful to the Minister for the reassurance that the Act will not be retrospective. This is a very important point, and has been of great concern to the site owners. There is, however, no common form of collection of back rates being undertaken in the country at the moment. In a number of areas the rating demands go back to 1973, and certain borough treasurers and district treasurers are taking the view that they will write them off. Others are saying that they will collect them from anybody left on the site. Others again are sitting on the fence because they do not know which way to turn. Therefore mere is a need for some guidance to local authorities on how they should view the collection of these bad debts.
  As the Government are in this case using the site owners as collecting agents, there has been considerable discussion and comment in the other place about whether the site owners will be paid a commission. The figure of 15 per cent. has been mentioned. Indeed, 15 per cent. is calculated to do no more than recover costs. A number of local agreements have been reached at the 15 per cent. level. I shall be grateful for confirmation that this is the Government's recommendation.
  1336
  Concerning the vexed question of the water authorities, I understand that a number of them are anxious to go over to direct billing. The question is how this will affect the site owners. Does this mean that they will get one rate demand from the local authority, and a few weeks later, or earlier, a separate one from the water authority? As I understand that the majority of sites have metered water supplies, I wonder whether we need to change that at all, and whether we could not have a separate clause enabling water consumption to continue to be dealt with on a metered basis.
  While on the subject of statutory authorities, I emphasise that many site and caravan owners have had battles royal, as the Minister knows, for many months and years in trying to get a proper refuse service and a number of other local services. I hope that when the Minister sends out his circular—presumably when this measure becomes law—he will make it clear to local authorities that caravanners are now equal to householders, and that this fact must be acknowledged wholeheartedly. I hope it will be made clear that it applies to the electricity boards as well.
  The Bill speaks of substantial savings. The Minister mentioned the savings there would be compared with the old system. We are all keen on savings, and it would help the House, in coming to a decision on this matter, to have some idea of the scale of these savings and what sort of monitor there would be to ensure that they take place in the areas in which extra staff has been taken on in the past years.
  I mentioned earlier the 90,000 outstanding bills. The House would welcome some information from the Government on what exactly is the current situation, and when the Government think that these matters will be resolved. These are all important problem areas that we shall want to examine later, but they pale before three other aspects that concern us.
  First, what will happen to the scheme if large numbers of individual owners opt for separate assessment, as they have a right to do under the Bill? As I read the Bill, many may opt for this course because they cannot, under Clause 1(5),

  1337
  individually object to the overall assessment. Moreover, a number of them may substantially alter their own caravans or their own pitches. As in any case they may see some advantage financially in paying by 10 instalments—a matter raised by my hon. Friend the Member for Rushcliffe (Mr. Clarke)—they may very much prefer to opt for that course rather than having to pay in January to the site operator.
  Although I accept that the level of rate may be relatively small, it should be borne in mind that many caravan owners are older people. As I understand, there will be no rate rebate, therefore this may be a larger item in their budget than it would normally be. If they opt for the separate assessment, what safeguard is there to ensure that the mixed hereditament status will continue for those who remain on the site? There is a real risk of some site owners finding that they are out of balance between the domestic and commercial elements, so that they will become fully commercially rated.
  A second matter of major significance is the concern of the site operator as to how he divides up his rate demand among the owners of pitches. If he has 100 pitches—this is not uncommon—there will be no simple mathematical division, because the pitches vary in size and position. Some are on the edge of a cliff and some are hidden away at the back of the site. The caravans themselves vary immensely in terms of size and facilities. They are quite often changed within a site. There is constant movement on a caravan site. The ownerships themselves are constantly changing. The owners live all over the country, and some live abroad.
  Thirdly, concerning Scotland, I am told that the 626 sites were successfully rated individually three years ago, and that the existing scheme is working smoothly. It seems to be a great pity, just for the sake of conformity, to upset Scotland once again and I wonder whether the Government would not be better advised to leave Scotland out altogether, particularly as the change will be delayed in any case.
  I regretfully have to give the Bill a lukewarm reception. I re-emphasise that we understand the problem and the need
  1338
  for action, but I ask the Government to weigh carefully what they are doing. It is no exaggeration to say that for many years caravanners have been hounded by local authorities and other parties. More recently they were hit by the Chancellor of the Exchequer with his 25 per cent. VAT. Now, without any consultation—this is in itself a worrying aspect—this administrative burden is to be placed on site operators. What used to be a simple, healthy enjoyment, either at the seaside or at an aquadrome—such as I have just outside my constituency—for ordinary people may now become, unless we are very careful, a rather expensive and burdensome way of spending holidays and weekends.
  I stress, however, that if on balance, after all the Government's research, they believe that this legislaton is necessary to solve the problem, we shall not resist it at this stage. But I must make it clear on behalf of the Opposition that we believe that the Bill is late, that there has not been proper consultation and that it has not been thought through properly. That suggests to me that there is work to be done in the Committee. But, however much we improve the Bill in Committee, I fear that it will rebound on the Government. As the Government know, caravans are extremely mobile—they are, after all, mobile homes—and it is their very mobility which I suspect may cause the Government some considerable embarrassment in the year ahead.
  4.40 p.m.
  Dr. Edmund Marshall: The hon. Member for Northampton, South (Mr. Morris) raised one matter in the course of his speech with which I readily agree when he said that this was a much more complicated issue than it appeared to be at first sight. This was brought to my attention very quickly in the last Session of Parliament when I introduced a Private Member's Bill the general aim of which was in line with the purpose of the Bill which is before us today. Although for many of the correspondents who contacted me the issue was extremely simple, when I looked at the legal position and at the possibility of drafting a Bill to express in legal terms what my correspondens wished to be done the situation became much more complicated.
  As I say, however, because the Government have brought in this Bill broadly

  1339
  reflecting the aspirations of my own Bill in the last Session, I give it a very warm welcome, in contradistinction to the lukewarm response which came from the hon. Member for Northampton, South. It is only right to say that it is the present Government who are attempting to put the problem right. I recall that in many of the letters which I received last year the opinion was expressed that, somehow, the whole problem in respect of caravan rating during the past year had arisen because of the deliberate policy of the Labour Government and that somehow the Labour Party was opposed to caravan owners. It needs to be shouted aloud that it is a Labour Government who are now doing what they can through this Bill to put the situation right. The Bill is very necessary, and I hope that it will have speedy progress through the House.
  The main point of concern about the Bill which remains in my mind is the discretion which is left to valuation officers. Clause 1(1) enables the valuation officer, if he thinks fit, to treat all or any of the pitches on a caravan site as a single hereditament. In other words, we are introducing a permissive power which, therefore, will give the local valuation officer complete discretion in this matter. I am worried that that discretion may not be exercised by some district valuers and that the very problem which we are trying to tackle may continue in some counties and metropolitan districts where district valuers use their discretion not to take action along the lines of the Bill. If that happens, it will lead to an even greater outcry than we have had in the past year, because many people will feel that Parliament has expressed its wish on the matter but that district valuers in the new situation are not following it through.
  If this discretion were left to district valuers, we could have a situation of disparity arising between one county and another. On some caravan sites we would be reverting to the situation of the whole site being treated as a single hereditament, whereas in other counties, perhaps quite close by, we would still have the situation that caravan owners were rated individually.
  Mr. Oakes: The policy of the Valuation Office will be as outlined in the Bill. That will be the general policy. The discretion is not left to the individual district valuer in the way my hon.
  1340
  Friend suggests. It is left because of the situation which may rise where the majority of the owners of caravans on a site opt for separate assessment. It is hard to believe that that would happen, but it could happen. In those circumstances the district valuer could exercise his discretion not to implement Clause 1.
  Dr. Marshall: I am grateful to my hon. Friend for saying that in this debate, but I remain worried that the wording of the Bill, as it may become law, will still leave widespread discretion to district valuers. However, I accept that this is a point which is better pursued in Committee rather than here. But it is the one dark cloud that I see in the Bill.
  The other matters which I wish to raise relate to how the Bill, when it is enacted, will be implemented. I note that Clause 1(9) says that that section will not come into force before 1st April 1976. Therefore, I assume that it is the Government's general intention that the situation which has arisen this year, 1975–76, has to be sorted out according to the legislation already on the statute book. The problem will, however, arise in respect of those rate proposals for caravan sites which are still the subject of appeal to the rating tribunals or even to the Lands Tribunal. I do not know the exact number of these but it is certainly very large, as the hon. Member for Northampton, South said, and a great many of these appeals will not be settled before 1st April. If they are still undecided and the individual ratepayers have not paid their rates for 1975–76, I think we will face the curious situation of having a Bill coming on to the statute book which is without any retrospective power but which applies to situations which still have to be resolved.
  Looking ahead into the next rating year, 1976–77, a great deal will depend on how quickly the offices of district valuers are able to reassess all these caravan sites. As I understand what my hon. Friend said, it will not be necessary for a new assessment to be made in respect of each of these sites. He told us that the total amount of rates to be payable on a site will be as great as in the current year. If we have to have all these reassessments, it could be well into 1976–77 before proposals are made,

  1341
  by which time, in the normal course of events, local authorities will have had to send out all their individual rate demands to caravan owners, in the same way as they did last year. Again I fear that hon. Members will be deluged with letters, as they were last year, when individual rate demands are reaching caravans during April, May and June.
  Therefore, it seems to me that special direction has to be given, on the assumption that the Bill becomes law even before 1st April, to enable the general policy behind it to be put into effect as rapidly as possible. This is extremely important, otherwise individual caravan owners will feel that Parliament has spoken but that local offices of district valuers have taken little immediate notice of it.
  With the one note of anxiety that I have expressed I welcome the general principle of the Bill warmly, and I hope that the principles and policies behind it can be put into effect as soon as possible.
  4.51 p.m.
  Mr. Michael Latham: I begin by commenting how nice it is to have our weekly trip on the boards with the Under-Secretary of State for the Environment. In the last two weeks it was on the Community Land Act, and next week, I gather, it is to be the Development Land Tax Bill.
  The hon. Member for Goole (Dr. Marshall) gave what he described as a warm welcome to the Bill, but that welcome became progressively less warm as he went on. I cannot say that I support him in viewing the Bill as a help to caravanners. It is of no help to them, although it is of help to the local authorities.
  No subject other than abortion and, possibly, live hare coursing has produced more letters to me from my constituents than the assessments for rating which they have received on holiday caravans. Caravan holidays on the Lincolnshire and Norfolk coasts are a traditional form of recreation for Leicestershire people, who, in large numbers, leave caravans there throughout the year. In most cases they are only permitted to go on the site at all between April and October, and this has been an added cause of resentment when receiving new rate demands.
  1342
  As I made clear in my reasoned amendment—which has quite properly not been selected—I oppose the Bill. I accept that valuation officers had to do something after the Field Place judgment and that the procedure by which site owners are assessed is better than the administrative nightmare which would arise if local authorities served demands on 220,000 individual holiday caravan owners, most of whom by definition do not live in the area. The Director of Finance of the East Lindsey District Council in Lincolnshire told me in a letter last April that individual assessment would add 50 per cent. to the work load of one section of his department. Clearly, that would be nonsense.
  I believe that the Government should have gone a lot further. In moving the Second Reading of the Bill in another place, Baroness Birk said:
  "It has been suggested that in addition to making it easier for the local authorities to collect rates, we should return to the situation in which caravans were not rateable, and rates were payable only on the site and the pitches."—[Official Report, House of Lords, 15th January 1976; Vol. 367, c. 304.]
  That view—not that the noble Lady agreed with it—represents mine exactly.
  I have three main reasons for opposing the Bill. The first two are logical and the third is emotional but none the worse for that. First, I think that "turning the clock back", as the noble Lady described my view—and the Under-Secretary agreed with her in his helpful speech—would be a logical step to take in advance of the Layfield Report. I wrote to, and then saw, Mr. Layfield about this matter last summer. I want to place on record that he received me most courteously and constructively but made it clear that the time scale for his inquiry did not permit his Committee to examine this matter properly. He therefore wrote to the Under-Secretary of State suggesting that the Department of the Environment should consider it instead.
  Unfortunately, while the hon. Gentleman agreed, in a letter from his private secretary to Mr. Layfield on 18th August, that this was
  "a pressing problem which needs examination now",
  the Government's response has been a measure tailored solely to the administrative convenience of local authorities rather than to the interests of caravanners.

  1343
  If there is legislative time to alter the basis of collecton, there would have been time also to have passed a Bill, as I urged the Minister to do in correspondence last summer, to overturn the Field Place judgment, which may in any case be rendered obsolete if the Layfield Report advocates a completely different system of local authority finance.
  My second reason for opposition concerns what I believe to be the illogicality of the Bill. The Under-Secretary of State told me in a letter last July that he believed that case law had evolved in the right way. In that letter—he sent a similar letter to many hon. Members—he compared holiday caravans with weekend cottages, which are already rateable. That argument is capable of indefinite extension.
  A chartered surveyor constituent of mine, who knows his rating law, asked me, in a letter which I sent to Mr. Layfield:
  "Why not assess the caravan parked almost permanently in a lay-by near the residence of its owner? Why not his boat, or indeed if he and his family park a number of cars"—
  for example, in their garden—
  "why not clobber the lot rate-wise?"
  Indeed, if potentially mobile chattels are to be rated purely because the custom and practice of holidaymakers decrees that they tend to be left on the site rather than taken home each weekend, we shall have Dormobiles or tents rated next.
  The Under-Secretary of State told the House on 24th July, in answer to my hon. Friend the Member for Faversham (Mr. Moate):
  "… the fact that caravans are indeed second homes is indisputable."—[Official Report, 24th July 1975; Vol. 896, c. 1260.]
  Well, I do dispute it. What is the logic in saying that a mobile object becomes a second home if it sits on a caravan site—even if it is required to be left empty on that site for six months of the year—but it is not a second home if it is driven home at the back of the car each weekend and sits in the owner's front garden? Such fine distinctions in law, which bear no relationship to what actually happens in everyday life, serve only to bring it into disrepute.
  My third reason is, frankly, emotional. I hope no one will think that caravanners are a lot of rich people pulling around
  1344
  luxury objects which are the mobile equivalents of holidays in a grand hotel. Many of my correspondents are old-age pensioners, one of whom was so frightened by the assessment notice from the district valuer that she thought she had to send a cheque for the amount of £80-odd, until I pointed out to her at my surgery that the actual bill from the local authority would be far less—unless the rate poundage was £1 in the pound.
  I give some other examples from my constituency. One lady from Barrow-on-Soar writes:
  "Please, Sir, do your best for us as most of us are OAPs and it is the only holiday we can afford in these very expensive times."
  A lady from Sileby writes:
  "We know if the Bill is carried through many of us will have to forgo the pleasure we have experienced in getting away at weekends."
  Another lady, from Thurmaston, writes:
  "We have saved hard to buy our van so that we can have odd weekends away and our summer holiday. But it look as if we shall have to give it up. But who on earth will buy it?"
  I implore the Government to think of those people, many of them elderly and of extremely modest means, who have worked hard all their lives and saved for a little bit of pleasure and who are already faced with the serious burden of heavy increases in the rates on their own homes and now the crushing burden of another £20 or £30 a year to pay for a holiday which is so precious to them.
  Finally there is a point of detail. It concerns the method of assessment by valuation officers. Of the approximately 220,000 caravan owners, about 95,000 have lodged appeals. As of 13th October and again as of 28th November 1975, Treasury Ministers told me in Written Answers that no appeals had yet been heard. My hon. Friend the Member for Northampton South (Mr. Morris) said that some had been heard since then, and I would like to have the situation clarified.
  One important ground for appeal is that the valuation officer did not necessarily inspect the caravan at all inside. A constituent from Thurmaston has told me that she wrote to the King's Lynn valuation officer asking for a reassessment in her presence but received the

  1345
  reply that pressure of work forbade this. She wrote:
  "I cannot see how they can assess a van just by a tape measure on the outside. Some vans have two bedrooms, others have none. I have recently met some friends who now live in a residential van with mains water and electricity laid on, and their rates for a full year are only £24·88. Yet, my holiday van is £51 rateable value."
  I accept that the lady may well be confusing rateable value in one case with rates payable in another. Nevertheless, if one assumes an average rate in the pound of 50p, disparities of that kind between residential and holiday caravans obviously need explanation.
  Let us consider what was the basis of the assessment in practice. Was it so much per square foot? I am not interested in the theoretical formula because we know, under the rating Acts, what it should be. But how was it actually done? I hope that when the Minister replies to the debate he will give us some guidance.
  I appreciate that my opposition in principle to the Bill will probably be in a minority. However, I ask the Minister to consider this cry from the heart of a constituent of mine in Birstall:
  "The majority of us only spend three weeks spread over the season by annual holidays from work, and three to four odd weekends. So, the average time spent by the owners in their caravans is four weeks a year. I think that the valuation proposal for my touring caravan of £50 and for the larger vans of £80 is preposterous and downright robbery. In desperation I implore you to fight this matter in the House of Commons."
  I agree with my constituent, and that is why I shall oppose the Bill today.
  5.3 p.m.
  Mr. Jim Marshall: I shall not follow the remarks of the hon. Member for Melton (Mr. Latham), especially those towards the end of his speech, when he quoted the view of a particular constituent. All hon. Members, if they so wished, could make reference to similar cases and make the same emotional plea on behalf of their constituents. Although I undoubtedly have sympathy with the owners of holiday caravans, I believe that the Bill should be viewed in a broader perspective than by just concentrating on particular constituents' problems.
  1346
  I assure my hon. Friend the Minister that I give the Bill a cautious welcome. I echo the remarks of my hon. Friend the Member for Goole (Dr. Marshall) who I think gave it a lukewarm reception. [Interruption.] Perhaps he missed out the word "lukewarm". The Bill will undoubtedly bring relief to those district councils which have an abundance of caravans. My hon. Friend made reference to an increase of about 250,000 in single hereditaments. That would present severe administrative difficulties if it were spread throughout the country. However, as we all know, these difficulties are localised in particular parts of the country. Undoubtedly they would have led to immense administrative difficulties and increased financial expenditure if the Bill had not been brought forward.
  I agree with the general feeling that the Bill will bring little or no relief to those who own holiday caravans. Later I shall put forward the argument that the Field Place Caravans Park case, which has been referred to so often in the debate, does not apply to holiday caravans.
  The history of the problem has been outlined, but hon. Members seem to have gone back as far as 1966 and tried to indicate that something very mysterious had occurred since then. That is not so. Prior to 1966 it had been for the convenience of the Inland Revenue that rates had been charged on caravan sites and pitches. However, there is well documented case law prior to 1966 that indicates only too clearly that, under certain circumstances, chattels may well be levied for rates.
  I bring to the attention of the House the decision in the case of London County Council v. Wilkins in 1956, in which it was stated quite clearly that
  "A structure placed on another person's land can with it form a rateable hereditament even though the structure remains in law a chattel and as such the property of the person who placed it there."
  Therefore, the 1966 case had good legal precedent. That is not to say that I necessarily sympathise with the Field Place Caravans Park judgment, but it does indicate that the history of this matter precedes July 1966.
  I should point out that the caravans involved in the 1966 judgment were of a

  1347
  permanent nature, were connected to electricity, and linked to a soak-away system. What is more important, the occupiers were clearly in control of their caravans, which, to all intents and purposes, were little different from ordinary dwelling-houses. Indeed, the precedent upon which the valuation officer proceeded to value holiday caravans was that of permanent caravans which were, in effect, little different from permanent private dwellings.
  As a consequence of the valuation officer's decision, which began to come into effect after the 1973 revaluation, not unnaturally, as has been said on many occasions, there were outcries from two sources. The first was from the owners of holiday caravans, who found themselves faced with not only a site charge but a bill for rates, which they had never received before, because previously it had been absorbed into the general site fee. However, the rates that they were being charged were greatly in excess of anything they had previously experienced. Not unnaturally, there was an outcry from these people. Moreover, there was an outcry from the treasuries of those district councils who had to collect the rates on the new single hereditaments.
  As we all know, this matter has given rise to serious administrative problems. We—especially Opposition Members, who constantly berate the Government to control not only central Government expenditure but local government expenditure—should not underestimate the increased costs that the local authorities would face.
  Mr. A. J. Beith: Which they have faced.
  Mr. Marshall: Yes, and will continue to face unless the Bill becomes law, which we hope will be by 1st April this year, at the latest. I emphasise that the treasuries of these district councils have faced—we hope that they will not face them after 1st April 1976—immense administrative problems. They have had to contact people throughout the country and, as the hon. Member for Northampton, South (Mr. Morris) has said, in some cases they have tried to contact people living outside the country. They have had to send out rate demand notes and follow them up to ensure that people pay. If they do not pay they have to
  1348
  know the reason why they have not done so. All this requires additional financial expenditure and, in some cases, additional staff.
  Reference has been made to the East Lindsey District Council. The hon. Member for Melton said that it would experience an increase in hereditaments of some 50 per cent.
  Mr. Michael Latham: I must correct the hon. Gentleman, because he has made a mistake. I said that the East Lindsey District Council registrar said that if the system was not changed there would be a 50 per cent. increase in the work load of some sections of his department.
  Mr. Marshall: I apologise to the hon. Gentleman. However, it so happens that the increase in hereditaments is also about 50 per cent. Therefore, he will understand the reason why I misunderstood the point he made. However, East Lindsey's hereditaments would have increased from 47,000 to 68,000, which represents a huge increase not only in hereditaments but in the consequential work load on an already hard-worked and, no doubt, harassed financial staff.
  There are two financial aspects that could lead to a local authority's facing a reduction in total income. One could foresee a situation in which, although the total rateable value available to the local authority had increased, its total rate income decreased. If that occurred there could be a reduction in the resources element of the rate support grant. The resources element is calculated on the deficiency of rateable value per head of population below the national average. That could have occurred in a number of district council areas in which total income would have been reduced as a consequence of the continuation of the present system.
  Fortunately the Government appear to have decided to change the system. The valuation officer can decide to exercise his discretion. In what circumstances would the valuation officer exercise his discretion to rate the site as a single hereditament rather than on the sum of the individual pitches and caravans on those pitches? A great deal will depend on how often and in what circumstances the valuation officer exercised his discretion.

  1349
  Earlier I referred to the fact that little relief would be going to those owning holiday caravans. Many of my constituents have complained to me about their rate bills this year. The Bill will offer them little financial relief, but it will enable them to obtain about half the domestic relief, since the site will be classified as a mixed hereditament.
  There is one question that I hope my hon. Friend the Minister will try to answer. Under the Bill a site will be classed as a single hereditament if the valuation officer exercises his discretion so to rate it. But we are also told in the Bill that each caravan owner will have the right to ask for a separate and individual assessment. How are those two factors reconciled? If the individual caravan owner asks for a separate assessment, does that not influence the valuation officer's discretion in the first place in valuing a site as a single hereditament rather than as separate hereditaments? Will my hon. Friend the Minister provide evidence in a written form—perhaps in a Written Answer—showing examples where people will be better off if the rates are levied on a single hereditament—where the site is classed as a mixed hereditament—than where an individual caravan owner asks for a separate assessment and thus qualifies for full domestic relief.
  If possible, I should like to see evidence that shows that the majority of individual caravan owners will be better off only by obtaining the mixed relief rather than the full domestic relief. My hon. Friend the Minister said that that was because if it were a single hereditament the total rateable value which had to be borne by the site operator and the individual caravan owners would be less than if all the individual caravans were assessed as single hereditaments. Before I am convinced on that point I shall need some written evidence rather than a verbal reply from the Dispatch Box.
  I said some time ago that I believed that the Field Place Caravans Park judgment was not applicable to many holiday caravans. I know that that opinion is shared by a number of district councils. In many cases the site operator exercises control to an extent that interferes with the caravan occupant's enjoyment of the
  1350
  caravan. I can list ways in which this is done. People are not able to live in the caravan throughout the year. The hon. Member for Melton referred to the period from April to October, during which owners could occupy their caravans. Often the owners are unable to live in the caravan continuously throughout the holiday season. In many cases the operator has the sole right to supply gas and other materials required in the caravans. The caravans are stored away from November to March, usually in some part of the same field. In those months the caravan owner is not able to attend to his individual caravan.
  Mr. Beith: For the sake of the record, will the hon. Member make clear that that is often a condition of planning consent and not the result of some unpleasant action by the site owner?
  Mr. Marshall: The hon. Member is right, but the situation indicates a restriction upon the caravan owner's right to occupy his caravan continuously and without undue restraint.
  If the caravan site owner is clearly in control of all pitches and caravans on his site and exercises that control to an extent that interferes with the caravan occupants' enjoyment of his caravan, it is likely that the site owner will be rateable in respect of the whole site, irrespective of this legislation. I am therefore urging my constituents who complain about their plight to continue to press valuation officers to reassess their caravans, and to make the point to individual valuation officers that they consider that they do not have free and unrestricted use of their caravans. They should also urge organisations representing the interests of leisure caravan users to press, if possible—it is not for me to encourage people to use the services of the many lawyers, or to go to court unnecessarily—for action to show that the 1966 judgment is being wrongly applied to holiday caravans. In spite of the Bill's lack of help for holiday caravan owners, I hope that they will be able to seek redress through the courts.
  I give the Bill a cautious welcome. It will undoubtedly be of great benefit to many district councils although, unfortunately, it will be of little benefit to owners of holiday caravans. I only hope that my hon. Friend the Minister has been

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  able to agree to the requests and pressures made by his hon. Friends to try to bring some help to holiday caravan owners.
  5.19 p.m.
  Mr. George Reid: There can seldom have been a time when this country had inflicted upon it an Administration so determined to legislate and legislate. Right or wrong, the Government seem desperate to meddle in everything. Regardless of the consequences of case law, an increasing spate of legislation is poured forth on the unsuspecting taxpayer. The Bill as it applies to Scotland is a case in point. It is a bad Bill, for three reasons. It pays scant regard to Scottish valuation and rating law, which should be the subject of a separate Scottish Bill. It introduces an entirely new principle into the rating system, whereby an individual is made responsible for not merely the collection but the payment of rates on subjects that he does not specifically and personally enjoy. At a time when the House is waiting for the publication of the Layfield Report on the reform of local government finance—a Report that is coming in a matter of weeks—the Government are bashing ahead with this measure regardless.
  Many of us from north of the border are deeply concerned by the extent to which recent United Kingdom joint legislation has run contrary to the spirit and principles of Scottish law. Dealing with the Consumer Credit Act, the Sale of Goods Act and the Children Act, the Chairman of the Scottish Law Commission recently said:
  "It is weird legislation; weird from the Scots point of view."
  The Council of the Law Society of Scotland echoed that view in a recent memorandum covering the Guardianship Act 1973, the Rent Act 1974 and insolvency law in general, when it commented:
  "The Council deplores the practice of changing the laws of both England and Scotland in a single Bill."
  This Bill is another example of that, and my hon. Friends and I oppose it for that reason.
  The Scottish and English rating systems are completely distinct. The valuation procedures are different, as is the whole basis of assesssment. A whole Series of
  1352
  expressions used in Clauses 3 and 4, such as "lands and heritages", "assessor" and "valuation roll", have no meaning in English usage. The system stems from a whole series of separate Scots Acts going as far back as 1854. If they are now to be subject to change they merit a separate Scots Bill, duly and conscientiously considered by Scottish Members.
  As matters stand, this measure is yet another example of Scots law being squeezed out by a centralising Parliament and a legislation-mad Administration. For proof of that, hon. Members need look no further than the Explanatory and Financial Memorandum, which contains a useful breakdown of what the Bill will mean when applied to English procedures, followed by the rather bald little note that
  "Clauses 3 and 4 make parallel provision for Scotland in a manner suited for the separate Scottish valuation code."
  English Members who flip casually through those clauses might be forgiven for thinking that great differences are not involved; but they are.
  There is a whole series of differences relating to the Valuation and Rating (Scotland) Act 1956, the Local Government (Scotland) Acts of 1966 and 1975 and the Land Valuation (Scotland) Act 1854, as well as issues such as the domestic water rates and gross annual values north of the border. Most significantly, the Bill is discretionary in England in allowing the individual caravan owner the right of appeal for separate assesssment, but it is mandatory in Scotland, with no such right of appeal.
  There are 505 static holiday parks in Scotland and 15,865 individual pitches. The individuals concerned, and the Scottish assessors, have the right to expect that the Scottish impact of this measure will be fully explored and examined. In 1972, in a parallel case to the Lymington, Hants case, an appeal went to the Scottish Valuation Appeals Court. It is known as the Maidens case and concerned Redgates Caravan Parks Limited. Taking due cognisance of Scots procedures, it established that an individual caravan owner has the right to separate assesment.
  Herein lies the difficulty. Will any Committee of this House, with one or, at most, two token Scots on it, plough its

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  way through Clauses 3 and 4, dotting Scots i's and crossing Scots t's with any real understanding or sympathy? The Minister's casual introduction of these clauses, when he neatly avoided any comment on Scots law, does not bode well, in that respect, for the future.
  However, things have been made easy for English Members in Committee, because the draftsmen have imported into the Bill settled Scots definitions and similar expressions that would not need to appear if there were a separate Bill for Scotland. This is another example of sinister centralising forces. How would English Members like it, for example, if the Explanatory and Financial Memorandum dealt in detail with "lands and heritages", "assessors" and "valuation rolls", and a whole series of Scots Acts from 1854 onwards, followed by the douce little note: "Clauses 3 and 4 make parallel provision in England in a manner suited for the separate English valuation code"? They would squeal like stuck pigs. Similarly, the House cannot expect Scots Members to remain silent when they see their ancient and distinctive law dealt with in this cavalier fashion.
  There is a clear case for measures such as this going to a Scots Parliament. Why rush it through when, if the Government are to be believed, a Scottish Assembly might change it all back again in a couple of years? If it has to go through, there is an equally clear case for a separate Scots Bill.
  The Minister for Planning and Local Government said on 10th February that he expected to receive the Layfield Report in a few weeks and to publish it "as soon as possible". The Government would therefore have been well advised to delay this measure until the Report came to hand, since the procedures proposed in the Bill will have serious consequences for everyone who owns or occupies property liable to a rate payment.
  I do not like the way that the Bill is being slipped through on the quiet. A whole new and unsatisfactory principle is involved.
  The Minister of State, Scottish Office (Mr. Bruce Millan): Can the hon. Gentleman explain how the Bill is being
  1354
  slipped through on the quiet, any more than any other Bill?
  Mr. Reid: My point was that a whole new principle is being slipped through on the quiet, pushed away in this Caravan Bill.
  Mr. Millan: That is not what the hon. Gentleman said. He said that the Bill was being slipped through on the quiet. What did he mean by that?
  Mr. Reid: I thought that I had said that the principle was being slipped through on the quiet. That is what I meant to say. I hope that the Minister will accept that. That is why I do not like it.
  For the first time a ratepayer will be required to pay rates on somebody else's property, with no consequential advantage and no means of redress if he cannot recover the amount of rate due.
  The business of assessing individual caravans, difficult though it may be, is virtually complete, and upheld by the courts. It avoids any doubt in the minds of the caravan owners as to the amount of rates being assessed to them and it avoids the element of compulsion threatened in the Bill, under which the park owner is liable to a criminal act and a fine if he does not supply rating details in writing to the caravan owner, who could be anywhere, or anyone, since caravans change hands with great regularity. The Bill as it stands is bound to lead to considerable friction between park owners and caravan owners.
  There will also be considerable difficulties in achieving an equable overall rating of parks—for two reasons. I cite only one example from my own constituency, but it is typical—Thomson Caravans, of Larbert, which operates a spendid park at Kincraig. The site is virtually closed during the winter months. Come the spring and the assessors, caravans are arriving and others are being moved from pitch to pitch, often on a temporary basis. As soon as a caravan is measured up by an assessor, it can be moved. In those circumstances, it is difficult to arrive at a true rating figure.
  The second difficulty stems from the way in which the assessment is to be apportioned among individual caravan owners. It is not simply a matter of one long division sum. The assessment will

  1355
  include the commercial elements, such as camp shop, offices, swimming pool, games hall—which have always been included in the rates—as well as individual leisure caravans. How is the sum to be apportioned?
  Additionally, not all the pitches are of the same area or environmental amenity, and the size, age and condition of caravans varies widely. How, again, are individual dues to be determined without an almighty bust-up between the park owner and the individual caravanner, especially as the former in Scotland would have no guaranteed right of entry? It would be wrong for Parliament to place those responsibilities on the proprietor without giving him adequate protection.
  This Bill is a bad Bill. Admittedly, this is a complex and difficult area, but the Government should have waited for Layfield. If it is absolutely necessary to legislate now, there should be a separate Scots Bill to take account of Scots rating and valuation procedures and to ensure that it is adequately considered by Scottish Members. If there is to be a Scots Bill, I trust that it will not contain the unacceptable principle of rating individuals for property that is not theirs. For all these reasons, my hon. Friends and I will oppose the Second Reading.
  5.29 p.m.
  Mr. Sydney Tierney: I do not own a caravan and I do not pretend to understand the deep ramifications of these principles but, like other hon. Members, I want to make representations on behalf of my constituents.
  The hon. Member for Melton (Mr. Latham) said that, apart from abortion and hare coursing, he had received more correspondence about this matter than about any other. I would say that it is a matter not of great principle but of achieving clarity and understanding in administration. I appreciate the Minister's difficulty. I thank him for the answers that he has given to me in correspondence.
  I understand that since 1966 any caravan in one place for a considerable length of time has been separately rateable from the pitch on which it stands. This means that rating authorities have to collect small sums in rates from large numbers of caravan owners. This has
  1356
  obviously caused some difficulty in certain areas. As I see it, the choice is either to amend the law to make individual caravans no longer rateable, or to retain the present system. Amending the law would make it easier for authorities to collect the rates, which seems to be the nub of the problem.
  The Government's case is that caravan owners benefit from local services and that they must make a fair rate contribution to the local authority. I do not argue with that proposition, because it is fair; nor do I believe that caravan owners would argue with it. They have always paid rates for local services, but it has been included in the amount that they have paid to be on the site. Site owners have never separated rates from rents in a form that individual caravan owners could understand to be clear or fair. That has been one of the basic problems. Caravan owners have always understood that caravan sites were rated. Before 1966 the rate level for a site was determined by the size of the site, the number of caravans it was capable of holding, and the services provided. In that way individual caravans were accounted for, even though they were classified as chattels.
  The alternative is to retain the rate liability of individual caravans but to ease the collecting problems by giving valuation officers discretion to rate caravans sites as one unit. Is this not the same thing, in practical terms? A sum of money will still be collected from each site and the site owner, as before, will be responsible for its collection. The only difference is that for a time the valuation officer will have an up-to-date file on each caravan on the site. With the movement and the change of ownership of caravans, his records will soon become out of date and he will be in the same dilemma whether to rate on a one-unit or an individual basis. That will cause further administrative difficulties, on top of the costs already incurred in recent years by rating individual caravans.
  Under the Bill a caravan owner will have a legal responsibility for the payment of rates, but he does not appear to have any rights over the amount of rent that he pays for a site. This will create difficulties. Many caravan owners did not even know that the rateable

  1357
  value of the common site had been reduced when individual caravans were rated. The amounts they had to pay to site owners were not reduced. Caravan owners seem to be in a very weak position when negotiating their contracts, because they are often neither clear nor fair.
  I welcome the provisions in Clause 4, that
  "On receipt of a notice under subsection (1) above the site operator shall display on the site a notice stating—

  (a) the number of pitches included in the said single unit, and the rateable value of that unit; and

  (b) the rate in the pound at which rates are levied in respect of that unit."

  That will be helpful. It is a progressive step towards greater understanding and clarity and is a further protection for caravan owners. It will mean that they have a better understanding about rent and rates and the gross overall costs involved.
  A number of caravan owners are genuinely concerned because they believe that they will still have to pay their current rent to site owners and that the rate levied on the individual caravans will be an additional payment. They fear that the element of rates that is already contained in the rent that they pay will be lost. That is why many caravan owners are against individual rating, and would rather see the law amended.
  I would welcome anything that the Minister can do to reassure caravan owners. They would appreciate assurances that would protect them from possible exploitation by site owners. Representations have been made to me by works caravan clubs in my constituency. Many people can only just afford to keep a caravan. They are worried about being able to continue to enjoy the utility and pleasure value that caravan ownership offers. They would appreciate anything that my hon. Friend can promise which would protect them from exploitation by caravan site owners.
  5.38 p.m.
  Mr. David Mudd: I hope that the hon. Member for Birmingham, Yardley (Mr. Tierney) will forgive me for not taking up his argument, but I want to refer to the speech made by the hon. Member for
  1358
  Clackmannan and East Stirlingshire (Mr. Reid) and his tartan view of the debate. He said that there were 505 registered sites in Scotland. The National Federation of Site Operators, for which I am a consultant, and therefore declare an interest, says that there are 626 sites.
  Mr. Reid: I am pleased to hear that the tourist industry is increasing in Scotland. My figures were from the Scottish Tourist Board.
  Mr. Mudd: If the Scottish National Party can lose 15 per cent. of one industry in one speech, perhaps greater, not less, intervention in Scottish affairs is needed.
  The Bill establishes beyond doubt the link between legislators and gynaecologists. Both groups can recognise the problems and deficiencies of premature birth, but neither has found a way of popping the short-term child back into the womb for a period of much-needed further gestation. The Bill is premature in two respects. First, at a time when the people of Britain are anxiously looking to the Layfield Report for alleviation of the rating liability and reorganisation of the system of local government finance, they suddenly find a new measure that reinforces rather than revitalises the national rating structure. Secondly, it will hit Scotland when local government reorganisation is in progress and burdens on local authorities are already heavy without the unwelcome addition of this legislation.
  The Bill is deficient in three ways. First, it fails to deal with the question of the adequate protection of site operators. Secondly, it overlooks the problem of rates outstanding and overdue at the date of its coming into force. Thirdly, it ignores the question of adequate financial recompense to the site operator for doing the work of the rating authority.
  Before the Bill completes its Committee stage, I hope that a provision will be added laying down at least that site owners shall be absolved from all legal obligation for the collection of outstanding, delayed or bad debts at the date of implementation, and that there shall be no liability on them for sites and pitches from which defaulting owners have departed. The many movements and transfers in the caravan market in the current year alone will make it impossible for site owners to trace those owners

  1359
  of caravans who have departed during the passage of the Bill.
  Even more important, if there is not to be an added cash flow crisis for site owners, further consideration must be given to recompensing them for the time and effort they will be called upon to give as agents for the local rating authority. A computer survey has suggested that a 15 per cent. commission would be the minimum adequately to recompense the site operator for his time and skill, for his accountancy and postage costs, and even for the consultations that he will have to have with rating authorities effectively to carry out his duties as a collector.
  As paragraph 3 of the Explanatory and Financial Memorandum speaks of a saving in local authority staff—I shall have to see it to believe it—there should be money to give financial recompense to the site operators. But a notable omission from the bodies opposed to the Bill is NALGO, which one would expect to scream from the roof-tops if it thought that there would be any cut-back in local authority employment as a result of the Bill. The fact that it has remained silent seems to indicate that it shares my belief that the Bill will make no difference to local government staffing.
  There will certainly be an increase in the number of rating appeals. I understand that there are about 90,000 outstanding.
  The Bill poses many problems. Many site operators have already based their current year's finances on the old system of the direct payment of rates, and they will be unable to recover additional sums from former caravan owners who have died, left the site, or changed caravans by 1st April.
  There will be chaos over the relationship between general rates and water rates, unless there is a consequent amendment to Section 56 of the Water Act 1945, as collection dates of water and general rates do not coincide in certain areas.
  Clause 1(7) creates a dangerous loophole, in that an owner may decide to seek a separate assessment, delay payment while the assessment is determined and leave the site without paying his rates while the appeals procedure
  1360
  legitimately open to him is being followed.
  There are several other points on which I hope we shall have guidance from the Minister. First, certain site operators may well be tempted to collect the rates on the day of demand but hold them until the final notice is served. What safeguards will there be for caravan owners in the event of a site operator defaulting or going bankrupt during the period when he holds the money in transmission from them to the local authority?
  Secondly, what is the legal right of recovery, and against whom, for a caravan owner who vacates during a period for which rates have been paid in advance, if the site operator defaults or goes bankrupt?
  Thirdly, on whom does the final legal obligation of action against a defaulting caravan owner lie? Is the site operator expected to subsidise the local rate fund by taking county court action against a defaulting resident, or does the rating authority override the site operator's responsibility?
  I hope that the Minister will give an assurance that from tonight he will put his foot down firmly in dealing with local authorities that are sending out demands on the assumption that the Bill has already been enacted. There is evidence that one or two authorities have jumped the gun, which is intolerable and arrogant, and an insult to the House.
  The noble Lady, Baroness Birk, the Under-Secretary of State, said in another place on 5th February that the Bill set out to tackle a difficult problem, and added
  "we have done as well as we could."—[Official Report, House of Lords, 5th February 1976; Vol. 367, c. 1466.]
  I hope that this House will do far better in turning this ailing, puny, premature and defective Bill into legislation that will be responsible and respected. I hope that it will not put the seal of approval on a measure that one Scottish regional assessor has already described as a piece of Frankenstein legislation.
  5.47 p.m.
  Mrs. Audrey Wise: It is strange to follow an hon. Member who uses such horror-film analogies about a comparatively small, ordinary Bill. I prefer to join those of

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  my hon. Friends who have given the Bill a cautious welcome; cautious because the Bill falls into some traps which magnify the problem of dealing with caravans.
  It is clear that certain Opposition Members are unhappy about the plight of site owners and operators. I approach the matter from a different point of view. I am concerned about the many caravan owners, especially retired people who have saved for a caravan in which to enjoy their retirement. Those of us from industrial constituencies have many such constituents, who have brought their problems to our notice.
  The problems include certain site operators and owners who are taking advantage of their favourable position to screw out of many people the maximum rent and to give the minimum security and control over the caravan. We should all like to see site operators and owners being on good terms with those renting pitches. I think that some Opposition Members have a point when they suggest that the Bill will not help to bring about that desirable situation.
  I ask my Front Bench colleagues to consider whether it is fair to say that owning a holiday caravan is like owning other forms of property which can be used for residence. We must be able to make that close analogy if we are to rate them in similar ways. I suggest that there is a great deal of difference between being an owner-occupier of stationary property, or renting a home, and owning a holiday caravan and renting a pitch for it. The differences should be realised in rating legislation.
  Clause 1(2) provides that
  "a caravan pitch … shall be taken as including the caravan for the time being on the pitch".
  The problem is contained in the words "for the time being". Caravans come and caravans go in a way that houses do not. We are making a rod for our own backs in not recognising that fundamental point.
  In a caravan site the clearly assessable and permanent elements are the land itself, the pitches and the services. On each site the land and the pitches will carry a certain number of caravans. It would be infinitely more straightforward
  1362
  to rate a site on that basis rather than on the basis of caravans which come and go.
  It will be virtually impossible for the valuation officer to exercise his duty as he exercises it in considering house properties. For example, the valuation officer makes his valuation on the basis of a deemed rental, not an actual rental. The owner-occupier does not receive rent for his house, but the valuation officer can estimate the reasonable value. However, there are owners of holiday caravans who do not let their caravans, as owner-occupiers do not let their houses. In fact, they are forbidden to let their caravans. The Bill takes no account of that situation. If an owner is forbidden to let his caravan, how can a valuation officer attribute a rental value to it? In the very nature of things it does not have a rental value, not even a deemed rental value. The owner would be out on his neck if he let his caravan. We are putting an exercise of imagination on valuation officers which it is not fair to expect them to carry.
  A further difference is that a tenant of property—this certainly applies to an owner-occupier—enjoys a certain amount of security. I am pleased to say that this Government have added to that security. The owner of a holiday caravan has no such security. Some of my constituents have told me that they have the worst of all possible worlds. On the one hand they are treated as owners of property to be rated in the same way as house owners, but, on the other hand, they do not have the sort of security which they would have if they owned or rented houses.
  As the Bill stands the criticisms will remain. Under Clause 1 a valuation officer
  "if he thinks fit, may … treat all or any of those pitches as forming a single hereditament."
  That is extraordinary. Surely we cannot expect valuation officers to make such a fundamental decision. Many problems may arise because of variations from place to place. Some of my constituents with a caravan on a certain site may find that they are treated differently from a neighbour with a caravan in another place. This will lead them to think that Parliament has not considered the matter sufficiently closely.

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  Holiday caravans should be treated in a much more standard way.
  No indication is given in the Bill of the sort of factors which should lead valuation officers to make a judgment in one direction or another. In giving the Bill a Second Reading we do not know in sufficient detail exactly what we are passing.
  I do not share the anxiety of some Opposition Members, and especially that of the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid). The hon. Gentleman complained about the Government being determined to legislate, legislate and legislate. However, he then demanded that a further Bill be introduced to deal exclusively with Scotland. I could not follow his logic, until it became crystal clear that his main concern was for site operators. It appeared that he was satisfied with the situation as it now pertains. I believe that most of my hon. Friends are not satisfied with the present situation.
  To that extent my hon. Friends and I welcome the Bill. However, I earnestly suggest that if we consider permanent property rather than mobile property it will be much easier to bring forward a more simple, straightforward and understandable Bill. That would lead to less trouble both for valuation officers and for those who, as they will see it, are valued against. I give a cautious welcome, but make an earnest request that we consider this measure a little more closely, perhaps making some changes in Committee.
  5.59 p.m.
  Mr. Roger Moate: The hon. Member for Coventry, South-West (Mrs. Wise) began by describing the Bill as a small and ordinary measure. I suspect that if the hon. Lady had a true concern for the position of the caravanner, as have many of my hon. Friends, she would not describe it in those terms.
  This is a Bill that will formalise for the first time a tax on caravans. The Bill, for the first time, will make—
  Mrs. Wise: Surely that cannot be correct. At present caravans are rated according to the law. An attempt is being made not to formalise but to improve.
  Mr. Moate: I fully expected Labour Members to deny that this is a new tax,
  1364
  but I shall clarify the position For the first time we are expressing in clear statutory form a situation that was not clear hitherto. If that were not so, the tax would have been collected right back in 1966, or before. Even if that tax were there in theory, it was not enforced. The Government had a number of options open to them. They chose to formalise a tax on caravans and to provide means that they deem to be enforceable for the collection of the tax.
  In July of last year, following a sitting of 26 hours—the longest sitting in the House for 24 years—I had an Adjournment debate on this very topic. However, now that I have seen the outcome of the pressures put on the Government, I wonder why I was so patient. The Government are now exercising their option to impose an enforceable tax on caravans. I did not think that anybody in his right mind would choose the rating system by which to collect a caravan tax. Furthermore, it is not a tax on all caravans; it is a tax only on static, leisure caravans, not on mobile caravans. In other words, an owner is taxed if his caravan sits on a static site but not if it is parked on his front drive. That situation is totally unjustifiable.
  It is intended to use the rating system to collect tax in respect of the caravans of 260,000 individuals, all of whom will still possess the right to appeal against that assessment and to claim an individual assessment. The reason why many hon. Members voiced their complaints in the House on earlier occasions was that many district authorities were suddenly faced with the bureaucratic nightmare of having to deliver individual assessments on 250,000 people. They found that situation well-nigh impossible. In my own area the district authority was responsible for 42 caravan sites, but was suddenly faced with the necessity to issue over 4,000 rating notices. The position for those authorities was extremely difficult.
  The Government have taken steps to try to correct the situation. I concede that this Bill may make it easier to collect the rates from site operators if those operators are acting not just as agents but as people directly responsible for those rates. But if the previous situation was regarded as chaotic, I suspect that the new situation will be even more chaotic.

  1365
  If individual caravanners exercise the right, laid down in the Bill, to challenge assessments, the Government, local authorities and district valuers will still face a difficult situation. There is every justification for individuals to call for separate assessments. For the first time, the average caravanner will be faced with a new tax. The Minister, in reply to my Adjournment debate last year, helpfully suggested £25 or £50 as the likely amount. I suspect that it will be a figure of that order. Therefore, on top of the already heavy costs borne by caravanners in higher licence fees and increased insurance premiums, they will now have to pay rates on their caravans.
  Caravanning is one of the few forms of holiday available to many in the lower income groups or to families who may have no other means of taking a holiday. Those individuals will resent this extra bill, and they may well think of delaying payment by appealing. It may even be in the interests of site operators to urge people to call for individual assessments.
  Certainly the site operator will be in a difficult situation. The Minister has said publicly that site operators will be in a position to appreciate what rates are to be collected at the beginning of the year, so that they can levy their own assessment on individual caravans. But this year site operators will have little idea what rates will be levied for the forthcoming year. If this Bill gets through by 1st April—the Minister is being somewhat optimistic if he thinks that that will happen—there is little chance that rate assessments will be made by the beginning of the new financial year and levied upon operators in that time.
  There will be a considerable period before the operator knows what is to be collected by him and levied on the individual. The site operator from the very beginning will have the responsibility for collecting those rates. If there are voids on the site, transfers of ownership, and so on, the site operator will still be responsible for collecting rates from owners, even though they may have left the site. Therefore, the operator may find it in his interest to encourage every caravanner on the site to seek individual
  1366
  assessments. It would not surprise me to see the number of appeals against rating assessments again rise, to 95,000 or even 100,000. Where shall we be then? The Minister will then have the experience of being written to by another 300 hon. Members. We shall have many complaints flooding in from caravanners about the system for collecting this new tax.
  This is an unfortunate Bill. The Minister could have decided to introduce legislation just as speedily as this Bill to ensure that the situation reverted to the position as it was thought to be before 1966. That would have been a simple and effective method of dealing with the matter. I regret that the Minister has not decided to take that course.
  I know that many other hon. Members are anxious to take part in this debate, and I do not wish to repeat points that have already been made. I hope that the Minister will answer the specific question as to how a site operator who, from the beginning of the year, will be responsible for the total rates levied on that site, is to be expected to cope with the problems of voids on the site, bad debts, and other matters. This is a fundamental problem. If the site operator is to be expected to act as tax collector, the Government should surely seek to help him.
  The Layfield Report will soon be published. Therefore, is it not nonsensical to extend the rating system to caravans when that system is already so full of anomalies and is crumbling under the weight of increasing burdens of expenditure and inflation? It will be extremely difficult to apply this nonsensical system to distinguish between caravans on one part of a site and caravans on another part, and to a caravan that may be a few feet longer than another. The mind boggles when one thinks of applying to caravans the follies of the present rating system.
  I regret that the Minister has chosen to cope with the problem in this way. He had a clear choice before him. I believe that the present Bill will make the situation worse rather than better. It will certainly not improve the situation for site operators, and it may not ease the burdens of district valuers and local authorities generally. It will perpetuate

  1367
  burdens of caravan owners at a time when they face rapidly rising costs. This is a bad measure, and I regret that the Minister has chosen to go about the situation in this way.
  6.8 p.m.
  Sir Anthony Meyer: My hon. Friends the Members for Faversham (Mr. Moate), Falmouth and Camborne (Mr. Mudd) and Melton (Mr. Latham) have shot many holes in this inoffensive little measure. I am inclined to look upon it as being by far the best, and certainly the most relevant measure, introduced by the Labour Government this Session—as far superior to the Government's other Bills as the Emperor Caligula was to the Emperor Nero.
  However, even though I give the measure a welcome, I admit that it has come rather late. This is a reflection not only on the present Government but on all Governments since 1966. It is now, in a different sense, too late even to provide for fresh valuations for the new financial year. Therefore, the troubles we have had over the past year will spill over into next year. In another sense, the Bill is too early because it pre-dates the findings of the Layfield Committee. Even if, as many hon. Members allege, the Bill will bring few benefits to caravanners, it will certainly bring benefits to local authorities, and I welcome it on that account. It will also reduce the voracious demands of bureaucrats and is to be welcomed even more warmly on that account.
  There are very many caravans and sites in my constituency and although virtually none of the caravanners is a constituent of mine I do not wish to play them off against my constituents. Much of the argument turns on whether caravans are second homes. In Wales, this is a highly emotive issue, and one of the advantages of a caravan in Wales is that it provides a second home without exciting the fierce political passions sometimes expressed by Members of a party currently conspicuous by their absence from the Chamber.
  I accept that there has to be some measure of rating of caravans. The alternative of licensing them, in the same way as motor cars, is less preferable, raising, as it would, many problems of definition.
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  There have been a number of references to Clause 1(7) and this will have to be considered in Committee. I think the Government will probably decide that it will cause more trouble than it saves, particularly if a large number of people decide to take advantage of it. It could undo all the beneficial effects of the Bill, and I shall be surprised if it is still in when the Bill returns to the House.
  Some local authorities have entered into ad hoc agreements with site owners for the collection of rates and there does not seem to be any provision for recognising or covering such agreements. It may be as well to take cognisance of such schemes and see how they can be phased in, or, at a later stage, phased out.
  A number of hon. Members have raised the difficulties site owners will face in securing redress when a caravan owner disappears owing money. This problem will have to be considered at a later stage of the Bill.
  Unlike most of my hon. Friends, I am grateful for small mercies. I would not go to the stake for this measure, but I am rather pleased that my hon. Friends are apparently not going to divide against it.
  Mr. Speaker: Before calling the hon. Member for Sunderland, South (Mr. Bagier), I remind him that there is only one other hon. Member who has sat throughout the debate and who wishes to speak. It is hoped that the winding-up speeches will start at 6.30 p.m. The hon. Member for Sunderland, South may, perhaps, try to give the other hon. Member a chance to speak before then.
  6.13 p.m..
  Mr. Gordon A. T. Bagier: I can assure you, Mr. Speaker, that I shall speak for only two or three minutes. I apologise to the Minister for not being here for his opening remarks.
  Like my hon. Friend the Member for Coventry, South-West (Mrs. Wise), I came under tremendous pressure from many constituents as a result of the change of the law caused by the court ruling. I received so many representations that I was beginning to wonder whether all my constituents lived in caravans.
  I have no doubt that what the Minister said about saving staff must take place.

  1369
  If rating staff tried to chase every caravan owner to determine rateable values, an enormous number of staff would be needed and the job would probably never be completed. At best, it would be extremely inefficient. As one hon. Member has already said, there have been instances of site owners not being very helpful and refusing to give the names and addresses of caravan owners in an attempt to frustrate rating and valuation officers.
  I am sorry that this big issue is being dealt with by just a small enabling Bill. Caravans, whether mobile or static, are big business. It is a great pity that the first time we have dealt with this subject for some years should be because of a court ruling on rateable values. One of the difficulties is that the Bill will apply to poorer people who have saved up to buy a caravan on a site in, say, the Lake District, but it will not apply to someone who can hawk about a blooming great vehicle on the back of a Rolls-Royce and is able to park it at his home. It would be much better if the Government had a more general review of caravanning.
  Reference has been made to the difficulty that site owners may have in collecting rates. I cannot understand this. It seems quite simple to me. They would merely have to add the rates on to what they charge for rent. I do not think it would cause any great difficulty. It was interesting to hear talks of this difficulty coming from a party which talks about the need to reduce public expenditure. They do not seem to realise that rates, like VAT and other taxes, can be collected in an everyday simple manner.
  Most caravan owners were satisfied before the court's decision which caused the huge furore. The Government are introducing a relatively small enabling Bill which will make it easier than chasing individual owners for rates. This is the object of the exercise and it should be supported, but I hope the Government will, in the near future, look at the whole scope of caravanning, whether the vehicles are static or hawked about on the backs of motor cars. Many are caravans in name only. They are static: they have wheels, but the wheels will never turn. They come in all shapes and
  1370
  sizes, and this is a problem with which the Government will have to come to terms.
  6.18 p.m.
  Mr. Kenneth Clarke: The last time I took part in a debate with the hon. Member for Sunderland, South (Mr. Bagier) was a few days ago, when he gave a guarded welcome to a Private Member's Bill we were discussing. I am delighted to find that we have other interests in common, because I wish to give a substantial welcome to the Bill.
  A considerable number of my constituents have holiday caravans, mostly on the East Lincolnshire coast. Caravanning offers one of the most convenient, modestly-priced ways of enjoying the facilities of the resorts on this coast, which are very popular with people from all over Nottinghamshire. I never realised just how popular caravanning was until the letters began to pour in from my constituents after they had received rating demands from the East Lindsey Rural District Council. It rapidly became clear that the council no more enjoyed the process of extracting rates than my constituents enjoyed receiving the demands. I was one of the hon. Members who put pressure on the Government and the Minister to legislate in order to sort out the mess which was rapidly developing. I congratulate the Minister on having won parliamentary time, and I give a cautious welcome to the Bill he has presented.
  Without damping down unduly my congratulations and welcome for the Bill, I have some grave reservations. I am not sure that my constituents will be much happier once the proposed system gets under way. I am under considerable constituency pressure to argue that holiday caravans should not be subject to the rating system, and that has been urged by some of my hon. Friends. I see why the Minister feels that that is not acceptable. My hon. Friend the Member for Northampton, South (Mr. Morris) said that it is difficult to draw a distinction between holiday caravans and other forms of second holiday home, which are sometimes quite modest. Therefore, some obligation for rates is inevitable as long as the rating system survives.
  If we are to persuade caravanners that this system is equitable and that some

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  liability to rates is inevitable, local authorities will have to improve drastically the level of local authority services provided to holiday sites. If the Minister can oblige the local authorities which receive rate income from holiday visitors to improve the level of provision on the sites, that would be a welcome step.
  While I accept that there is a case for some liability to rating and that the present system is a shambles, I envisage many difficulties developing if the Bill goes through to finality unamended. I am especially worried about the disputes that will break out on a considerable scale between caravanners and site owners about individual liability to rates and how rates are to be assessed. If the whole hereditament is made subject to one rate, there will be difficulty when the site owner tries to apportion the liability between caravans of different size, different age and different location in relation to the services.
  There is bound to be a process of negotiation, as the Minister said in his reply to my intervention. One hopes that it will work out satisfactorily for both sides, but that may be a pious hope. I am doubtful about the success of the negotiations. I was involved last year in Committee on the Mobile Homes Bill, and a great deal was left for negotiation between site owners and caravanners. The Minister will be aware of the appalling disputes which have now broken out all over the country as site owners and caravanners tried to come to terms in many cases failed to do so.
  Mr. Jim Marshall: Many site operators act as agents on behalf of caravan owners in renting out caravans to holiday-makers. The factors of age, size and location of the caravan are reflected in the weekly rental value that the site operator suggests should be charged to guest holidaymakers. The site operator therefore has some information to enable him to apportion rent levels.
  Mr. Clarke: As the hon. Member for Leicester, South (Mr. Marshall) has said, some apportioning has to be done when offering the caravan for rent in the first place. The caravanner on moving into his caravan knows what rent he will have to pay and he accepts that obligation. Under the new system a new obligation will be imposed upon a person who is
  1372
  already in occupation of the site. It will not be an offer made to him, as was the rent when he first moved in. It will be an obligation that the site owner has to sort out between the various occupiers. He will have to distribute the burden and they do so in a way which, I fear, many occupiers will challenge.
  What will happen if an individual caravanner wishes to challenge the method which the site owner adopts to apportion liability to rates? The Bill is entirely silent on how the site owner should apportion and how a caravanner can reject his apportionment. It is left to discretion and common sense. The Government try to meet the difficulty by Clause 2, which requires the site owner to give certain information to his caravan owners about the total rate being levied on the site and the average which that will produce between the individual carvans, but that does not go far enough. If the owners of caravans are to negotiate with the site owner or accept what he has done, they will need to know how the site owner has arrived at his conclusions on each individual rate. There is no obligation that any information of that kind should be disclosed by a site owner.
  The information which the site owner is asked to disclose may make matters worse. He is asked to display the average rate divided up between all the tenants. That, presumably, is not the rate that he will ask for from individual caravan owners if there is variation between the caravans on his site. On reading the notice a caravan owner will arrive at an average figure, which will surprise him if it is more than he is being asked to pay or outrage him if it is less.
  We hope that it will be possible to negotiate a sensible rate, but if an obligation is put on the site owner to give information to his tenants about the rating obligation he should equally be under an obligation to produce information which is more relevant to the vexed question of how he divides up the rate between individual caravans.
  That is my principal reservation about the Bill, which I accept as a worthy and well-intentioned attempt to resolve the difficulties. It is not easy to see how they can be resolved. One fears that the Minister will plunge from one problem about site rating to another as we change the system.

  1373
  The Government have the convenience of the local authorities right. My hon. Friend the Member for Flint, West (Sir A. Meyer) rightly said that the burden on the local authorities under the present system was acceptable. I trust that the Government have not regarded as their first priority the convenience of local authorities. They have found that to be the easiest matter to be resolved. Although local authorities welcome the measure, site owners and caravanners who are my constituents hope that the Bill will sort out the problems but fear that it may lead to more confusion and worse problems unless the drafting of the Bill can be improved in Committee.
  6.27 p.m.
  Mr. Wyn Roberts: It has become clear from this short debate that the Bill is not as simple as the Government hoped it might be. Its broad aim is simple enough. It is to restore the global system of rating in a different form—that is, including caravans as well as pitches—while allowing the individual system of rating to continue. The restoration of the status quo is never easy. As Heraclitus said, one can never step into the same water twice. Much has happened in caravan rating practice since the old system was broken down by case law, and the Bill endeavours to take these developments into account.
  It would be true to say that the Bill is an invention necessitated by the situation resulting from the breakdown of the old system which caused difficulties to valuation officers with their assessments and even greater difficulties for local authorities with rate collection. The loss of revenue to local authorities this year must have been very high.
  No doubt the Government would have preferred to wait for the Layfield Committee's Report before introducing a Bill of this kind, as many hon. Members have suggested. The Secretary of State for Wales said as much in a letter to the Secretary of State for Foreign and Commonwealth Affairs, who, as a constituency Member, had asked him to comment on a letter from the Association of Welsh District Councils. The letter, dated 4th June 1975, reads:
  "As you can see caravans are now individually rateable not because the Government has decided that this should be so but because
  1374
  the case law has evolved in this way. To change the position would require legislative action and I fear I cannot see any likelihood that this will be practicable at least until after the Layfield Committee has reported."
  Necessity, in the shape of local authorities' difficulties in rate collection, has intervened and prompted the Government to go ahead without waiting for Layfield, although I am sure that by now the Government must have some idea of how the Layfield Committee views the caravan rating problem, and presumably the Bill does not go against Layfield in any significant manner. I see that Members on the Government Front Bench are shaking their heads. With 90,000 appeals, and possibly more pending, among the 250,000 leisure caravan ratepayers, the individual system of rating cannot be very satisfactory. Therefore, the Government seek to revert in part to the global system and are trying to do so quickly before the new rating year.
  My hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) sought further reassurances on the matter of retrospection, with good cause. I want to read from a letter from the treasurer of the Alnwick District Council in Northumberland to caravan site owners. It reads:
  "You may have read recently that the Government has introduced legislation to enable local authorities to collect the rates due from each separately rated caravan via the site owner. This will mean that you will be responsible for collecting the rates due and … paying the amount over to the Council at an appropriate date.
  In order that you may make arrangements for the current year, I enclose a list of the (proposed) rateable values of the caravans on your site".
  A number of hon. Members have spoken about whether the Government have allowed sufficient time for the Bill to become operational as from 1st April. I press the Government to answer that. I understand that there is a special problem in Scotland, because the Scots have advanced quickly to the individual system and would like more time to unravel it and implement the Bill.
  There are four dramatis personae in the Bill—the valuation officer, the local authority, the site owner and the caravan occupier. The Government have taken reasonable care of the first two and the official interests they represent. However, as most hon. Members who have participated in the debate

  1375
  have indicated, it is doubtful whether the Government have taken anything like equal care of the interests of the site owner and the caravan occupier. My hon. Friend the Member for Melton (Mr. Latham) feels so strongly about the bias in favour of what he calls the
  "administrative convenience of rating authorities"
  that he tabled a critical motion and has spoken to this effect with his usual persuasive clarity and forcefulness.
  The main purpose of the Bill is to give the valuation officer discretion to treat occupied pitches separately and the remainder of the site as a single rating unit, except, as was pointed out by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid), in Scotland, where the assessor, as I understand it, has a duty as specified in Clause 3(1). There is no individual right of appeal. I have some sympathy with the hon. Gentleman's view and I hope that the Minister will deal with it.
  As far as England and Wales are concerned, the discretion is entirely the valuation officer's although others are involved, in particular the site owner, who, if the valuation officer uses his discretion to treat as a single rating unit, assumes onerous responsibilities. The Government have not acknowledged that. It is not at all clear that the site owner has any right to object to the valuation officer's exercise of his discretion. He should have such a right, because he may be unwilling or incapable for some reason of fulfilling the consequential duties and responsibilities that will fall upon him.
  The crucial fact is that, if the valuation officer exercises his discretion to treat as a single unit, the site owner becomes responsible for the payment of other people's rates. That is a unique situation, although I agree that there is a comparison with the landlord and tenant situation. There is certainly no attendant advantage as far as we can see for the site owner, and he has no means of redress against a defaulting tenant except by taking action in the civil courts.
  If we take these points singly, the fact is that local authorities have in practice in many instances paid the site owner a commission for rate collection. I know that that has been done in the Colwyn
  1376
  area, which is on the borders of my beautiful constituency, and elsewhere. Surely this commission arrangement is justified and necessary to provide an incentive for single site treatment, which, as the Explanatory Memorandum to the Bill states, will save expense and staff to the local authority. Of course we welcome that saving, but why should local authorities be able to save at the expense of site owners? It does not seem fair to me although it may seem fair to the hon. Member for Sunderland, South (Mr. Bagier), who, I am sorry to see, is not present.
  The Government will be aware of the feelings of many of the self-employed, as site owners frequently are, about the burdens placed upon them by the Government in connection with VAT. I believe that there will be many objections to this new imposition.
  There is also the question of redress if the site owner is unable to recover. If he defaults, the local authority can bring an action against him in the magistrates' court. Surely the site owner should have a similar right of action in the magistrates' court and should not have to bring a civil action against a defaulting caravanner, with all its consequent costs and delays. I understand that a promise of some protection to the site owner in his new responsibilities was given by the Under-Secretary of State at a meeting at Earl's Court on 11th November 1975. I believe that the Government are obliged to honour that promise, which was fully reported in the Rating and Valuation Journal of January last.
  Finally, the site owner is obliged to display information about the rateable value of the single unit, the number of caravans included in it and the rate poundage charged by the local authority. However, as my hon. Friend the Member for Rushcliffe (Mr. Clarke) asked, how will this help the individual caravanner in any way? Frankly, I agree with my hon. Friend that it will lead to endless bickering between caravanners and site owners about their proper rate portion—that is, assuming that the site owner in his invoicing has to specify the amount of rate payable. He does not have to specify the amount of rate payable under the Bill. I do not believe that publication of the average rate liability for each caravan

  1377
  will tend to create peace and harmony on the sites.
  The site owner is the allocator as well as the collector of rates. There is no appeal so far as we can make out against his judgment. This is neither fair to him nor fair to the caravanner.
  The fourth member of the cast is the caravanner himself. His right to an individual assessment is preserved in Clause 1(7), but I understand that apart from the disabled, who might benefit from special rate relief under Section 45 of the General Rate Act 1967, few will benefit from separate assessment as the composite assessment will be less than the total assessment of the parts, which are currently liable to separate assessment. However, how is the individual caravanner to know that? The distribution of the rating element among caravan occupiers is not likely, as so many people have said, to be a simple mathematical division sum. Not all the pitches will be of the same size, nor will they have the same environmental amenity. The size, age and condition of each caravan will differ. Finally, the commercial element will have to be apportioned in whole or in part.
  There may, therefore, be some validity in the point that Clause 1(7) may frustrate the primary purpose of the Bill and that there will be extensive applications for individual rating, with all that that may mean in terms of tilting the balance against mixed hereditaments and in favour of commercial rating.
  Finally, there seems to be some confusion as to the basis of rating itself. Baroness Birk, the Under-Secretary of State for the Environment, said during Report stage in the other place that the majority of sites would qualify as mixed hereditaments. In these cases, the total rates payable on the site and the caravans might be up to 20 per cent. less than they otherwise would have been—presumably, 20 per cent. less than they would have been had they been rated as commercial. It remains likely that in most cases the caravanner will still be better off as part of a single unit assessment. Does this mean that, where there is a commercial rating, domestic rate relief will still apply to the caravan element?
  1378
  All this I regard as highly problematical. There are significant differences between the various levels of rate poundage, and, like the hon. Member for Leicester, South (Mr. Marshall), I cannot see how the Government can be so certain of the advantages accruing to the individual from single unit rating.
  Our feeling about the Bill is that it is very much the product of necessity. We feel that it is an attempt to create order out of near-chaos in England and Wales. We feel that it may well create fresh chaos in Scotland unless the date of operation is advanced to, possibly, 1st April 1977. We feel that the Bill is strongly biased in favour of the local rating authorities and the valuation officers. We feel that it places burdens on the site owners without providing recompense or protection. We feel that it does not really solve the problems of the individual caravanner, for whom the site owner once again become the working villain of the piece, as the hon. Member for Coventry, South-West (Mrs. Wise) would have him.
  Nevertheless, the Bill will be welcomed by local authorities, especially in rural areas such as my own constituency, where the caravanner is an extensive user of local services—of roads and all the other facilities and amenities that are provided. Of course, this costs a great deal of money to the local ratepayers. Hon. Members may be surprised when I say that in certain areas in my constituency the summer population is double the winter population, so that there is a very considerable burden on local services. Therefore, the caravanner's contribution to the rates is welcome, and it is right that he should contribute to the rates.
  Therefore, while we shall not be dividing the House tonight, the Government may look forward to a strenuous Committee stage, during which we hope that they will listen to the amendments that we shall put before them.
  6.44 p.m.
  The Minister of State, Scottish Office (Mr. Bruce Millan): I do not think that any Minister introducing a rating Bill of any kind ever believes that it will be a simple or uncontroversial matter. This Bill, which by rating standards is very modest, has obviously excited a good

  1379
  deal of controversy. It has been demonstrated throughout this debate that, despite the Bill's limited purpose, it is of some complexity. Therefore, perhaps I should say at the outset that in Committee we shall obviously look very carefully at any amendments that are tabled to improve the general purposes of the Bill. As I think will become clear to hon. Members when I mention one or two particular matters a little later, I am not suggesting at present that we have the wording absolutely right. There are certainly places in the Bill where we would welcome improvements. If the improvements come from Opposition Members or from Labour Members rather than from the Government, we shall welcome them none the less.
  I think that the main purpose of the Bill, despite the reservations that have been expressed by a number of hon. Members, is fairly well accepted by everyone in the House. I should like to start by saying something about the Scottish aspects of this matter, in the sense of the complaint that we had from the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) that there ought to have been either a separate Bill for Scotland or no Bill for Scotland at all.
  I do not really understand the hon. Gentleman's complaints on this matter. The complaint about putting English and Scottish legislation together arises—and quite rightly, in my opinion—in legislation where there is basically English provision with application clauses which are intrinsically complex for Scotland. However, that is not being done in this Bill. The provisions for Scotland are entirely separate from the provisions for England. Therefore, there is no need for English Members to worry about Scottish application per se or for Scots Members to worry about English provisions per se. However, having the provisions in one Bill means that with hon. Members who are conscientious and diligent enough to compare the two sets of provisions there may be matter there for Committee points.
  It is also able to be demonstrated that the Scottish approach in a number of matters is quite different because the Scottish legislative background is different from that of the English legislation. If this were a major matter of rating, there would be a separate Scottish Bill. The
  1380
  Local Government (Scotland) Act 1975 contained major provisions regarding Scottish rating and it was a separate Scottish Bill. I do not actually remember the hon. Member for Clackmannan and East Stirlingshire ever saying anything about that Bill at any of its stages. I may be wrong about that. He may have contributed to our very lengthy discussions but he did not make a great deal of impact on me, because I have forgotten anything he may have said on that Bill.
  However, we are dealing now with a much narrower point, and it is a point of some urgency for Scotland as well as for England and Wales. I fail to understand the references in the debate to the Scottish position being less urgent and something that could wait. The Scottish local authorities as well as the Scottish assessors asked us to extend the Bill to Scotland. There is, therefore, no question of our putting in English provisions for Scotland. This is what the Scots themselves want.
  Sir John Gilmour: How is it that in Clause 1 there is a definite date for the operation of the Bill which does not seem to appear in the clauses applying to Scotland, Clauses 3 and 4?
  Mr. Millan: Again, that is for technical reasons arising out of the different legislative background in Scotland. However, that is a different point which we can take up in Committee.
  The hon. Member for Clackmannan and East Stirlingshire said quite a number of things about the so-called penalties that we incur for having a joint Scottish and English Bill. That allowed him to say very little about the merits of the Bill. So far as I distinguished anything in his speech which dealt with the merits of the Bill, however, he seemed to be much less concerned with the local authorities and the caravan owners and his main preoccupation seemed to be with the site owners. I shall come to that matter shortly in a more general sense when I leave the Scottish position.
  Mr. Reid: I do not want to anticipate the Committee of Selection, but does not the right hon. Gentleman agree that one of the difficulties in joint measures of this type, in which there is distinctive Scots law, is whether we have enough Scots Members to go through the legislation line by line and clause by clause?

  1381
  It tends to be second rate when compared with English matters.
  Mr. Millan: It has never been my experience that Scots Members, or even only one of them, do not go through legislation line by line. There may be occasions on which I wish that they would not do so. But that is not what happens in practice.
  I was about to say that one's reaction to the Bill depends to a large extent on the point of view with which one approaches it. Looking at the matter from the point of view of a caravanner, one has a certain view; looking at it from the point of view of a site owner, one has another view; and looking at it from the point of view of the local authority and the assessors, one has yet another view.
  I have considerable sympathy with those who say that caravans used for leisure purposes as distinct from those used permanently for homes should not be rated. It is a fine balance of judgment. I do not pretend that the arguments are all on one side. There is a respectable argument for saying that caravans used for leisure purposes should not be rated. But we are not providing for the rating of these caravans for the first time in this Bill. The law has been established. We are not consolidating or formalising the law. The law having been established, this is a more convenient way of rating for leisure caravans.
  It would have been open to the Government to take the view that we should change the law in a substantial way. But, looking at it from the point of view of local authorities and ratepayers generally, I do not think that the argument comes down in favour of the leisure caravan owner not being rated.
  There are analogies with second homes. Certain demands are placed on local services. Therefore, that is sufficient argument for saying that caravans used for leisure purposes, provided that they have a permanency, ought to bear a certain amount of the rating burden. The fact that caravans are subject to restrictions on the length of time they might be occupied and so on will form part of the relevant evidence to be taken into account by the assessors. That will come into the assessment and will affect the
  1382
  rates payable on the caravans with which we are dealing. In normal circumstances we expect the rating burden to be about £25 a year. No one likes paying even £25 a year in rates, but it is not an excessive burden in the circumstances.
  Looking at the matter from the local authorities' viewpoint, apart from questions of convenience and so on, they will be anxious to have the maximum amount of rateable value while the rating system continues in its present form. Local authorities which have large numbers of caravans permanently sited in their areas are entitled to argue that those caravans place certain demands on local services and that they should therefore be rated in some way or other.
  If that proposition is accepted, we immediately come up against the formidable problem of separate assessment, which places a disproportionate burden on local authorities. Therefore, in these days, when we are asking local authorities to restrict staffing, we are obliged to produce a workable and economic system. That is one of the main objectives of the Bill.
  Naturally, from the site operator's point of view, the matter looks different because he is admittedly being asked to take over a certain burden which would not otherwise be placed on him. I do not pretend that that is not so. However, the burden that is being placed on him is comparatively light compared with the burden that we are removing from the local authorities.
  I do not suggest that the problems of recovering the additional rates and so on are simple in all circumstances. There may be problems regarding timing in the first year. We shall no doubt discuss that matter in Committee. But the problems of recovery are not in normal circumstances formidable. Accounts are sent out to caravan owners for rent and other charges. It will be a comparatively simple matter for the additional rate burden to be obtained in that way. The rate will in effect, become another item which the site owner will have to recover from caravan owners as part of his normal commercial operations.
  We are not dealing with a matter of deep principle. Basically we are dealing with administrative convenience. I recognise that we are putting an additional

  1383
  burden on site owners. However, it is not of a sufficient nature that they ought to be recompensed for it. No doubt that point will also be discussed in Committee.
  A number of detailed points were made and I should like to deal with some of them in anticipation of the Committee stage.
  First, I do not understand the difficulty which is envisaged regarding outstanding appeals. The Bill is not retrospective in any way. Therefore, appeals relating to the current year's assessment will be proceeded with as if the Bill were not being introduced.
  Appeals in future years may give rise to a more complicated situation—for example, if there were a lot of appeals for individual assessments arising from the discretionary powers in Clause 1, which, as has been pointed out, apply only to England and Wales, not to Scotland. It is easier to get a standard valuation policy for England and Wales, because of the arrangements through the valuation office, than for Scotland, where individual local assessors have considerably more independence. Therefore, we cannot legitimately talk about a standard policy in a matter of this kind. For that reason we are unable to give discretionary powers to Scotland. If we were to do that, we should produce a patchy and perhaps unfair situation.
  My hon. Friend the Under-Secretary of State pointed out in opening the debate that the discretion is intended to be used only in circumstances where it is justified. For example, where too many of the individual caravan owners opt out, the general policy will be to have a single assessment for the whole of the site.
  Mr. Michael Morris: The worry is that, with 90,000 appeals outstanding and the evidence from the first cases being of a substantial reduction in valuation, that will influence valuations thereafter.
  Mr. Millan: We have that situation now. The purpose of the Bill is to avoid a similar situation in subsequent years. The large number of outstanding appeals is a graphic demonstration of the unsatisfactory nature of the present situation.
  The only other important point of detail which I want to mention concerns the notices under Clauses 2 and 4 of the Bill. A number of the points made by the hon. Member for Rushcliffe (Mr. Clarke) are legitimate and will, no doubt, be gone into in Committee. We want the information given to the individual caravan owner to be intelligible enough for him to be able, if possible, to calculate the rate burden included in his total charges. We want the mechanics of giving the notice to work in practice. If we do not have the information properly presented, at worst we could mislead individuals on what the additional burden should be. We shall try to get this matter absolutely right in Committee, and I hope that hon. Members will help us.
  That is the spirit in which the Government will approach the Bill generally in Committee. We recognise that a number of hon. Members have reservations. However, we believe that the Bill is basically on the right lines and we ask the House to give it a Second Reading.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 210, Noes 19.

  Division No. 79.]

  AYES

  [7.00 p.m.

  Archer, Peter

  Canavan, Dennis

  Davidson, Arthur

  Armstrong, Ernest

  Cant, R. B.

  Davies, Bryan (Enfield N)

  Atkins, Ronald (Preston N)

  Carmichael, Neil

  Davis, Clinton (Hackney C)

  Atkinson, Norman

  Carter, Ray

  Deakins, Eric

  Bagier, Gordon A. T.

  Carter-Jones, Lewis

  Dean, Joseph (Leeds West)

  Beith, A. J.

  Cartwright, John

  Delargy, Hugh

  Bennett, Andrew (Stockport N)

  Castle, Rt Hon Barbara

  Dell, Rt Hon Edmund

  Bidwell, Sydney

  Clemitson, Ivor

  Dempsey, James

  Blenkinsop, Arthur

  Cocks, Michael (Bristol S)

  Dormand, J. D.

  Boardman, H.

  Cohen, Stanley

  Douglas-Mann, Bruce

  Booth, Rt Hon Albert

  Coleman, Donald

  Duffy, A. E. P.

  Bottomley, Rt Hon Arthur

  Conlan, Bernard

  Dunn, James A.

  Bray, Dr Jeremy

  Cook, Robin F. (Edin C)

  Dunnett, Jack

  Brown, Hugh D. (Provan)

  Corbett, Robin

  Eadie, Alex

  Brown, Ronald (Hackney S)

  Cox, Thomas (Tooting)

  Edge, Geoff

  Buchan, Norman

  Crawshaw, Richard

  Edwards, Robert (Wolv SE)

  Buchanan, Richard

  Crosland, Rt Hon Anthony

  Ellis, John (Brigg & Scun)

  Campbell, Ian

  Cryer, Bob

  English, Michael

  Ewing, Harry (Stirling)

  Lyon, Alexander (York)

  Ross, Stephen (Isle of Wight)

  Fernyhough, Rt Hon E.

  Mabon, Dr J. Dickson

  Ross, Rt Hon W. (Kilmarnock)

  Flannery, Martin

  McCartney, Hugh

  Rowlands, Ted

  Fletcher, Raymond (Ilkeston)

  McElhone, Frank

  Sandelson, Neville

  Fletcher, Ted (Darlington)

  MacFarquhar, Roderick

  Sedgemore, Brian

  Ford, Ben

  McGuire, Michael (Ince)

  Shaw, Arnold (llford South)

  Forrester, John

  Mackenzie, Gregor

  Sheldon, Robert (Ashton-u-Lyne)

  Fower Gerald (The Wrekin)

  Mackintosh, John P.

  Short, Rt Hon E. (Newcastle C)

  Fraser, John (Lambeth, N'w'd)

  McMillan, Tom (Glasgow C)

  Short, Mrs Renée (Wolv NE)

  Freud, Clement

  Madden, Max

  Silkin, Rt Hon John (Deptford)

  Garrett, John (Norwich S)

  Mallalieu, J. P. W.

  Silkin, Rt Hon S. C. (Dulwich)

  George, Bruce

  Marks, Kenneth

  Skinner, Dennis

  Gilbert, Dr John

  Marquand, David

  Small, William

  Golding, John

  Marshall, Dr Edmund (Goole)

  Smith, Cyril (Rochdale)

  Goodhart, Philip

  Marshall, Jim (Leicester S)

  Smith, John (N Lanarkshire)

  Gow, Ian (Eastbourne)

  Maynard, Miss Joan

  Spearing, Nigel

  Graham, Ted

  Meacher, Michael

  Spence, John

  Grant, John (Islington C)

  Mellish, Rt Hon Robert

  Spriggs, Leslie

  Grocott, Bruce

  Mendelson, John

  Steel, David (Roxburgh)

  Hamilton, James (Bothwell)

  Mikardo, Ian

  Stoddart, David

  Hardy Peter

  Millan, Bruce

  Stott, Roger

  Harrison, Walter (Wakefield)

  Miller, Dr M. S. (E Kilbride)

  Strang, Gavin

  Hart, Rt Hon Judith

  Miller, Mrs Millie (llford N)

  Summerskill, Hon Dr Shirley

  Heffer, Eric S.

  Molloy, William

  Taylor, Mrs Ann (Bolton W)

  Hooley, Frank

  Morris, Charles R. (Openshawe)

  Thomas, Jeffrey (Abertillery)

  Horam John

  Moyle, Roland

  Thomas, Mike (Newcastle E)

  Howells, Geraint (Cardigan)

  Mulley, Rt Hon Frederick

  Thomas, Ron (Bristol NW)

  Hoyle, Doug (Nelson)

  Murray, Rt Hon Ronald King

  Thorne, Stan (Preston South)

  Hughes, Rt Hon C. (Anglesey)

  Newens, Stanley

  Tierney, Sydney

  Hughes, Robert (Aberdeen N)

  Noble, Mike

  Tinn James

  Hughes, Roy (Newport)

  Oakes, Gordon

  Torney, Tom

  Hunter Adam

  O'Halloran, Michael

  Tuck, Raphael

  Irvine, Rt Hon Sir A. (Edge Hill)

  O'Malley, Rt Hon Brian

  Varley, Rt Hon Eric G.

  Irving, Rt Hon S. (Dartford)

  Ovenden, John

  Wainwright, Edwin (Dearne V)

  Jackson, Miss Margaret (Lincoln)

  Palmer, Arthur

  Wainwright, Richard (Coine V)

  Jay, Rt Hon Douglas

  Pardoe, John

  Walker, Terry (Kingswood)

  Jeger, Mrs Lena

  Park, George

  Ward, Michael

  John, Brynmor

  Parker, John

  Watkins, David

  Johnson, James (Hull West)

  Parry, Robert

  Watkinson, John

  Jones, Alec (Rhondda)

  Pavitt, Laurie

  Weetch, Ken

  Jones, Barry (East Flint)

  Penhaligon, David

  Wellbeloved, James

  Jones, Dan (Burnley)

  Perry, Ernest

  White, James (Pollock)

  Judd, Frank

  Phipps, Dr Colin

  Whitlock, William

  Kelley, Richard

  Price, C. (Lewisham W)

  Willey, Rt Hon Frederick

  Kerr, Russell

  Price, William (Rugby)

  Williams, Alan Lee (Hornch'ch)

  Kilroy-Silk, Robert

  Radice, Giles

  Wilson, Alexander (Hamilton)

  Lambie, David

  Roberts, Albert (Normanton)

  Wise, Mrs Audrey

  Lamborn, Harry

  Roberts, Gwilym(Cannock)

  Woodall, Alec

  Lamond, James

  Robertson, John (Paisley)

  Woof, Robert

  Leadbitter, Ted

  Rodgers, George (Chorley)

  Young, David (Bolton E)

  Lee, John

  Rodgers, William (Stockton)

  TELLERS FOR THE AYES:

  Lewis, Ron (Carlisle)

  Rooker, J. W.

  Mr. Joseph Harper and

  Lipton, Marcus

  Rose, Paul B.

  Mr. A. W. Stallard.

  NOES

  Brotherton, Michael

  Latham, Michael (Melton)

  Thompson, George

  Carson, John

  MacCormick, Iain

  Watt, Hamish

  Clark, Alan (Plymouth, Sutton)

  Mills, Peter

  Wilson, Gordon (Dundee E)

  Crawford, Douglas

  Moate, Roger

  Dunlop, John

  Mudd, David

  TELLERS FOR THE NOES:

  Ewing, Mrs Winifred (Moray)

  Reid, George

  Mrs. Margaret Bain and

  Fell, Anthony

  Stewart, Donald (Western Isles)

  Mr. Andrew Welsh.

  Henderson, Douglas

  Taylor, R. (Croydon NW)

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order).
  Order for Second Reading read.
  7.11 p.m.
  Mr. Ronald Brown: I beg to move, That the Bill be now read a Second time.
  On this occasion the Bill is concerned primarily with the London boroughs, and much of the requirement is at their behest. For that reason, I am afraid that it is a rather technical piece of legislation.
  For the convenience of the House I propose to try to explain briefly the background to some of the clauses, hoping that right hon. and hon. Members will accept that to spend too much time going through the intricacies of each provision is unnecessary at this hour.
  If the House agrees, I propose to ignore Clause 6 for the moment. As I understand it, it is the general view that this would be taken more appropriately when we come to the proposed Instructions after Second Reading. In order to get some good order in our debate, I propose to ignore that one and not discuss it in any detail.
  Clause 3 is concerned with increasing the penalties for the breach of certain tunnel byelaws where various dangerous goods, flammable goods and explosive goods are being moved through tunnels. The Greater London Council takes the view that the present maximum penalty is not sufficient. At the moment, the maximum penalty for infringing these dangerous goods byelaws is only £20. This was determined in the London County Council (General Powers) Act of 1900. Prior to 1967 the maximum penalty for infringing the general byelaws was £5, but the Criminal Justice Act 1967 increased the figure to £20. At present, therefore, there is no difference between the general penalty and the dangerous goods penalty. Clearly, in these days it is no disincentive to be fined only £20 for contravening these byelaws. Therefore, Clause 3 is designed to increase the penalty to £400, that being more in line with what the GLC considers to be proper for dissuading people from breaking the byelaw. It is a simple
  1388
  attempt, therefore, to make life safer for Londoners and to dissuade people from carrying such goods through tunnels.
  Clause 4 is a modification of Schedule 12 to the 1972 Act. This modest clause enables the Council to bring items before a Council meeting at a later stage than it would be able to do otherwise. I understand that occasions have arisen when it would have been convenient for the Council to be able to consider a matter referred from a committee meeting after the printing of the agenda paper for the Council meeting. I think that this is eminently sensible, and Clause 4 makes it possible for matters to be considered even though they have not appeared on the agenda paper for the Council meeting.
  Clause 5 has caused many right hon. and hon. Members some concern. It is an understandable attempt by the Greater London Council and the boroughs to tidy up street furniture and to see whether it is possible to affix traffic signs in a more discreet way than can be done at present, since they now have to be placed on the highway itself. The GLC took the view that it might perhaps emulate the action of the City of London Corporation, whose legislation allows it to affix traffic signs to the external walls of certain buildings.
  My view and that of many right hon. and hon. Members was that, as drafted, Clause 5 provided no right of appeal to an aggrieved person whose house or wall might be chosen for the affixing of traffic signs. It seemed to many of us to be an unjust situation. However, I pay tribute to the promoters of the Bill, who, following our representations to them, decided to table appropriate amendments in Committee to allow for appeal procedures. As a result, the owner of a building or wall can refuse consent. If the Council feels that the refusal is unreasonable, it can apply to the magistrates' court and it will then be a matter for the magistrates to decide whether they are prepared to accept that the Council has made its case. I think that this proposal now settles the problem to the satisfaction of most of us and that people will have the right to refuse consent to having traffic signs affixed to their walls.
  As I said in my opening remarks I propose to leave Clause 6 for the moment

  1389
  because that may well be the subject of a lengthy debate in itself.
  I move on, therefore, to Clauses 7, 8 and 9 which are concerned with night cafes. This is a matter of grave concern in all parts of London and has been the subject of many debates in this House. The most recent one was on 28th February 1975, when the hon. Member for Ealing, Acton (Sir G. Young) raised the problem of food shops and take-away meals. Right hon. and hon. Members will find the debate reported in the relevant Hansard at column 999.
  On that occasion the hon. Member for Acton made a very powerful case about the difficulties being experienced. He gave details of his own researches, which showed the problems which had to be dealt with, and those of us who were present were extremely impressed with his argument. The GLC has brought forward its proposals in Clauses 7, 8 and 9, which substantialy take care of the hon. Gentleman's arguments.
  There is one basic problem arising from these proposals, however. The National Federation of Fish Fryers felt that in some way the proposals would have some effect upon its members. It felt that if its members had to register too, there might be some difficulties. I looked at the GLC's proposals and discussed them with the hon. Member for Hampstead (Mr. Finsberg). In the end I asked the promoters of the Bill to talk to the fish fryers and to those hon. Members who were concerned. I understand that the National Federation of Fish Fryers was written to, and its representatives had an opportunity of talking to the promoters.
  The Federation received a letter dated 25th February and had an opportunity to discuss it with the GLC. It was addressed to the General Secretary of the National Federation of Fish Fryers, and the last paragraph read:
  "I shall be glad to know whether this wording or some similar form of words would be satisfactory."
  As I understand it, there has been no dissent from that. The House can take it, therefore, as far as one can assess the situation, that the fish fryers—the people mainly concerned in terms of the effect of this provision—will be satisfied with the
  1390
  amendment which the promoters will seek to make.
  Clause 10 concerns the power to extinguish the right of interment in cemeteries. It is an attempt by the GLC to meet a difficult problem which is increasing as time goes by. There is insufficient burial ground, and Clause 10 would enable the GLC to make more provision for burials by making more room in existing cemeteries. It is an attempt to try to provide the power for the local authority to extinguish the burial rights when there has already been a burial in a grave.
  Mr. Ernest G. Perry: Does my hon. Friend realise that in London over 60 per cent. of those who have passed away are now cremated, and that the need for burial ground is much less than it was, say, 20 years ago?
  Mr. Brown: I do not know whether that figure is correct, but the point remains. Even with the change in the mode of dispatch, there is still difficulty in providing sufficient burial space in London. The City of London Corporation was given power in the City of London (Various Powers) Act 1969 to extinguish burial rights in grave spaces in Newham cemetery 75 years after the date of the latest burial or after any burial has taken place. Southwark Borough Council has a similar right in relation to its cemeteries by virtue of the Greater London Council (General Powers) Act 1975. These local Acts are superior to cemetery Order powers in that they permit the extinguishment of burial rights where there has already been a burial in the ground. It is the view of the GLC and of the London boroughs that the cemeteries Order power has only a marginal benefit to London and that the new power proposed in Clause 10 would help the situation very much.
  Clause 11 is a modification of Section 33 of the Greater London Council (General Powers) Act 1973. It is an attempt by the GLC and the boroughs to come together in terms of the cost of providing the maintenance and reserving of places in and improving specialist residential establishments, particularly for children. It is felt that under this clause it would be easier for the boroughs themselves to co-operate. It is believed that Section 33 of the 1973 Act should be extended, and Clause 11 would enable

  1391
  the cost of providing or approving designated homes as defined in Section 33, thereby including it as designated expenditure for the purposes of a scheme made under Section 33.
  Clause 12 has caused a great deal of concern, primarily because it was a little difficult for some of us to discover its origin. We could not see who was claiming the paternity. When I was asked to present the Bill on behalf of the promoters, their view was that they were only the pianists and, therefore, they should not be blamed. They said that I should discuss it with the London Boroughs Association. The Association said that if the House made its view known as to what it wanted, it would not stand in the way of democracy. It turned out, however, that the Department of the Environment had slipped the clause in, which many of us find a bit much.
  Unless we had read the Bill rather closely, it is likely that the Department of the Environment could have slipped through something which many of us did not necessarily favour. The matter became pertinent because many London boroughs, certainly the inner boroughs, were involved at that stage in attempting to obtain exemptions from the Minister for sites, as is required, and the situation was one of extreme difficulty. The Minister had given exemptions to Kensington and Chelsea and to Westminster but was refusing exemptions to other boroughs. It appears that there is reasonable doubt as to the strength of the statute whch gives to London boroughs the obligation of providing sites for gipsies under the 1960 and 1968 Acts.
  The result is that the Department is anxious to ensure that the statute is full and absolutely firm in this respect. That leads us to the difficulty this evening. Many of my hon. Friends really cannot support the view that Clause 12 should be included in this way. They feel that if the Government wish to bring forward legislation of this nature, they had better do so. The situation arose from an error which appears to have been made in 1972, when the Government of the day apparently updated the 1968 Act but omitted the words "the London boroughs". The result is that there is grave doubt as to whether a London borough has the right to provide or spend money in this way.
  I have had discussions with the Department of the Environment on the matter. It has told me that it would regret it if we did not pass Clause 12, but it still of the opinion that, if any fractious item were taken to court, the court would rule that the intention of Parliament was that the London boroughs should have this power. We have no procedure for withdrawing the clause tonight, but I am empowered to say on behalf of the promoters that, having regard to the fact that the Kirby Committee has been set up by the Secretary of State to look into the matter—its terms of reference being
  "the provisions for the exemption of local authorities and the designation of their areas"—
  they will seek discussions with hon. Members and with departmental representatives in an attempt to see whether they can meet the requirements of those of us who object to the clause being treated in this way.
  Mr. William Molloy: I remind my hon. Friend that under the Conservative Government, in relation to the situation covered by Clause 12, officers of the London borough of Ealing tried to get clarification. They sent about half a dozen letters in 1971 and did not get any reply for three years. That is not bad going for a Tory Administration. I hope that my right hon. Friend the Secretary of State will see to it that we get a little more speedy response from the present Government.
  Mr. Brown: I support what my hon. Friend has said. Had there been a means of withdrawing Clause 12 tonight, I should have so recommended. As we cannot do that, however, I give an undertaking on behalf of the promoters that they will ensure that in Committee they will do all in their power to meet the wishes of the House.
  Mr. George Cunningham: Is my hon. Friend saying that the promoters are prepared to say that in Committee they will initiate the removal of this clause, which I imagine would be within their power? He is saying that if there is no power procedurally now to arrange for its removal, he, on their behalf, would agree to that. It is not procedurally possible on the Floor of the House, because we

  1393
  shall not come to the relevant Instruction in time, as we know. It would, however, be possible for my hon. Friend to give a firm indication, as far as the GLC is concerned, that it will take this clause out in Committee. Can he be sure that he is saying that and not just saying that there will be discussion in Committee?
  Mr. Brown: I tried to get as much clarity as I could. I do not think that I can, on behalf of the promoters, make that pledge absolute, because the clause is not their property in that sense. Some of the London boroughs are involved as well, and they have to come together to discuss whether it would be in the interests of the London boroughs to take such a view.
  Therefore, I am empowered to say that before we come to the end of the Second Reading debate I shall consult the promoters about what my hon. Friend has put in absolute terms, and I hope that if I catch your eye again, Mr. Deputy Speaker, I shall be able to give my hon. Friend the answer to his specific question. However, I understand at present that the promoters, in wishing to meet the wishes of my hon. Friends and myself, will do everything in their power to ensure that as far as the London boroughs are concerned they will look at the matter again in Committee. That is as far as I can go at present. I shall attempt to intervene again in order to give my hon. Friend an absolute answer to his specific question.
  I point out to my hon. Friend the Under-Secretary that matters of this sort cause us great concern. If someone has made an error, in my view it would be far better to come clean at the very beginning and not meet many representatives of borough councils and imply that the boroughs are responsible when it is clear, certainly from the viewpoint of lawyers, that they are not responsible under the law.
  Therefore, it would have been far better to have brought forward an amendment in the usual way which could have been debated and on which all hon. Members could have had their say rather than to involve a Bill of this nature in a political argument and local government in something which is really a matter for this House. The House should
  1394
  put its own house in order rather than involve the Bill in this way.
  Part V has caused a great deal of concern to many hon. Members. My hon. Friends the Members for St. Pancras, North (Mr. Stallard) and Islington, North (Mr. O'Halloran) and the hon. Members for Hampstead and for Hornsey (Mr. Rossi) have made many representations to me as the person presenting the Bill on behalf of the promoters. I pay a tribute to the promoters, who have done everything in their power to ensure that hon. Members' objections to the clauses in Part V are dealt with.
  As this part of the Bill is really the responsibility of the London borough of Camden, the promoters obviously can do only their best to ensure that the London borough of Camden understands the criticisms being made by hon. Members. I gather that they understand that to be the case. I am not empowered to say that Camden has withdrawn or deleted references in Clause 17(2)(a)(iii) to
  "'gymnasiums' and to clubs etc. having 'athletic' objects".
  However, I understand that the Camden Council this evening, at this very hour, is holding a meeting and that it is the intention of the appropriate committee to ask for the deletion. I can only say that I understand that there will be a recommendation to the Camden Council not only to delete Clause 17(2)(a)(iii) but
  "That the powers of disinterment as contained in Clause 22 of the Bill should not be deleted or amended.
  That special cemeteries regulations be prepared for Highgate Cemetery and that the Council's standard regulations should not apply in this instance.
  That the Council should not agree to make provision in the Bill for the establishment of an Advisory Trust but should inform the Highgate Society of its willingness to establish and participate in a Trust, being solely advisory in nature, and that the officers of the Council be authorised to discuss the composition and constitution of a Trust with the Highgate Society with a view to the setting up of the Trust as soon as possible."
  I have been reading a letter sent to the hon. Member for Hampstead from the London borough of Camden. From my own meeting with the London borough of Camden representatives, I understand that they have gone as far as possible to meet the objections I have raised. I therefore invite the House to accept that the promoters have put themselves out to ensure that the objections

  1395
  put forward by hon. Gentlemen have been taken care of.
  Clause 27 is purely a matter of form.
  I have tried to go through the Bill very briefly and acquaint the House with the various clauses. With the exception of Clause 6, which we trust, with your approval, Mr. Deputy Speaker, will be the subject of debate, I invite the House to give the Bill a Second Reading.
  7.36 p.m.
  Mr. Geoffrey Finsberg: As the hon. Member for Hackney, South and Shoreditch (Mr. Brown) said, there is little between us on a party political basis, apart from Clause 6. I shall make passing reference to that Clause at this stage, but I shall not deal with it in any great detail now. My one criticism is that the Bill has been brought on somewhat earlier in the Session than it need have been, because it is still not possible to provide much of the information, on nonparty lines, that I have asked for. I shall be making reference to that in the course of my speech. Indeed, had the Bill come on a little later—unlike the Money Bill there is no terminal date—some of the nonsense about gipsy caravans might have been sorted out, without the need for the speech that the hon. Gentleman rightly made criticising people pulling bits of stuff out of pigeon-holes.
  The major problem of the Bill arises on Clause 6. I hope that we shall be able to debate the first Instruction, which covers the clause in considerable detail In connection with Clause 5, I welcome the undertaking given by the hon. Member for Hackney, South and Shoreditch that in Committee the promoters will seek to amend the Bill so as to provide that if anyone objects to a sign being put up, and the authority considers that to be unreasonable, the matter shall go to the courts, for them to decide. I am sure that this is right, and I join the hon. Gentleman in welcoming the fact that the promoters have given this underaking, which I believe removes an objectionable feature from the Bill.
  I turn to Clause 7, which is the fish-fryer's clause. In a letter from the General Secretary of the National Federation of Fish Fryers dated 2nd March, it is made quite clear that it is not satisfied with what the promoters of the Bill have so far offered.
  1396
  I now come to the first justification for my criticism that the Bill has been brought forward too early. It is interesting to note that the Bill was originally due to be debated tomorrow but, presumably, the people in charge of Government business were suddenly told that there was to be a by-election in Coventry and that their hon. Members might be needed up there, so the date was changed. However, I have obtained some figures from the London Boroughs Association and also a fair number of letters from people throughout the country in connection with the Instruction that I have put down. Many people are confused. I am seeking to exclude off-sales from fried fish-and-chip shops. I have no desire to remove from the ambit of the Bill off-sales from Kentucky chicken shops, which are a confounded nuisance wherever they are, as my hon. Friend the Member for Ealing, Acton (Sir G. Young) said on a previous occasion. All my figures relate to fried fish-and-chip shops.
  I met the promoters, and especially the London borough representatives, and asked for some information showing a breakdown of the number of complaints that have been received in respect of shops selling food—that is, curry, chicken and so on, as well as fish and chips. On 20th February the London Boroughs Association wrote to all town clerks asking for certain information to be returned to the Honorary Parliamentary Officer, saying that the "usual ready response" of town clerks and chief executives in producing a speedy response would be greatly appreciated. They were asked in any case to provide the information during the course of the week ending 28th February.
  I have here facts and figures relating to only 16 of the London boroughs. That shows the response they give to this sort of letter, and it shows how the House is left to discuss the Bill without adequate information. I shall give the figures as they relate to the 16 London boroughs. The total number of "take-aways" in them are 633, of which 260 are fish-and-chip shops. There have been 106 complaints relating to "take-aways" generally and of them 20 were about fish-and-chip shops. So important do some chief executives regard this matter that they have not even bothered to give the number. In a very sloppy way they have

  1397
  put "some" or "a few". That is a discourtesy to the House. I complain about this sloppiness in a non-partisan way on behalf of all hon. Members.
  Mr. Marcus Lipton: It might help the House if the hon. Member indicated how many of the 16 boroughs are inner London boroughs and how many are outer London boroughs.
  Mr. Finsberg: I think it would take too much time to do the arithmetic, but I assure the hon. Member that Lambeth, for example, has not replied and, to balance it with an outer London borough, neither has Brent.
  If suitable amendments are not made in Committee the hon. Member for Hackney, South and Shoreditch may well find that when the Bill comes back to the House on recommittal, we shall want to amend it, certainly if the information provided is no better than we already have.
  I wish to be brief on Second Reading, because we do not object to the bulk of the Bill. Perhaps I may refer to Part V, dealing with Highgate Cemetery. The London borough of Camden is meeting at this moment in one of its marathon sessions, but my information from the assistant town clerk is that no amendment will be moved tonight to the recommendations that have come from the committees of the council. That information was given to me on the telephone yesterday.
  The assistant town clerk said that in the next cycle of committees he hoped to get them to agree to certain undertakings that he has offered in a letter dated 1st March. If that happens, I am sure that the hard work done by my hon. Friend the Member for Hornsey (Mr. Rossi) and the hon. Members for St. Pancras, North (Mr. Stallard) and Islington, North (Mr. O'Halloran), on behalf of the Highgate Society and the Friends of Highgate Cemetery, will prove satisfactory. But that depends on the committees of the council carrying out the undertakings that the assistant town clerk says he hopes they will.
  The Bill is an opportunity to look at what local government in London thinks it needs in addition to the powers it
  1398
  already enjoys. It provides an opportunity for debating some matters that affect London. We shall probably have a slightly more acrimonious and wide-ranging general debate on the money Bill. I make the usual point—I am sure that no Labour Members will dissent from it—that if Scotland and Wales can have full-day debates on general subjects in this House, London, too, wants that facility. I hope that London will not be fobbed off with the nonsense of being told that it can have a debate in some provincial regional Committee upstairs. With the reservations that I have expressed about Clause 6, I commend the Second Reading of the Bill to the House.
  7.46 p.m.
  The Under-Secretary of State for the Environment (Mr. Gordon Oakes): I shall be brief, but I intend to indicate the Government's attitude to the Bill, mentioning, in passing, some of its controversial aspects. First, I wish to pay tribute to my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown). Presenting a Private Bill to this House is not the most glamorous thing to do. It is time-consuming, tedious and dull work. All Londoners, regardless of their political inclinations and every London borough, as well as the GLC, should be indebted to my hon. Friend for the great care and attention that he gives to London matters and the great care that he shows in presenting Private Bills to the House. I express my admiration for the work that he does.
  I am glad that the Opposition are not taking the same hard line on this Bill that they took on the West Midlands County Council Bill, in the form of blanket opposition. This Bill contains some very useful measures, which will be of great benefit to London.
  The Government believe that Clause 6 should be passed to the Committee and, if necessary, restricted and examined there in respect of its operation. In proposing the clause the GLC and the boroughs knew what they were about. A great deal of care went into the framing of the clause. It is possible that there will be general legislation on the subject by the Government, probably in the next Session of Parliament, but it is useful that London should be given these powers, or at least that the powers should be considered in Committee.

  1399
  The traditional approach of Governments to Private Bills is that they do not whip their Members. I hope that there has been no unofficial whipping, either on the Bill as a whole or on any part of it, because it is for the Committee to deal with it. Our attitude is of benevolent neutrality, but we are certainly in favour of its being carefully considered in Committee.
  My hon. Friend the Member for Hackney, South and Shoreditch upbraided my Department over Clause 12 and the provisions for gipsy sites. Section 6 of the 1968 Act provided London boroughs with a duty to provide such sites. The 1972 Act inadvertently removed the power that had been specifically provided. Our legal advice on the matter is that where a statute imposes a mandatory duty on an authority the power follows the duty, and that is how a court would rule. My hon. Friend raised the point about my Department's taking up the question of Clause 12 with the London Boroughs Association, particularly concerning certain provisions that will tidy up the general law. The Association was very willing that this should be done. When the error of the 1972 Act was pointed out to it, it suggested to the Department that the Bill would be a convenient vehicle in which to put the matter right, and Clause 12 was consequently included.
  With hindsight, I have considerable sympathy with what my hon. Friend said. I do not think that this is the proper way to go about this matter. It was an error in general legislation, which should be put right in general legislation. Therefore, whatever steps my hon. Friend takes over Clause 12—I know that it is a complicated procedural problem, it being now in the Bill and he being the promoter—if it is now felt that that clause is repellent the Department would not object to its being removed. It was put in because of a previous omission, and it might have been done better than in private legislation.
  I shall not enter into a discussion with Opposition Members about the relative merits of Kentucky fried foods and fish and chips. There are constant references to "fish fryers". In my part of the world, we refer to "fish-and-chip shops" but, no doubt due to the price of potatoes, they fry only fish. Chips are
  1400
  going out—not only in legal wording but in practice.
  When the hon. Member for Hampstead (Mr. Finsberg) and I discussed Nunhead Cemetery on a previous Bill, he pointed out the need for provisions to deal with Highgate Cemetery, and there are provisions in the Bill to do so.
  We do not whip our Members on Private Bills in any circumstances. The Government look with favour on the Bill, including Clause 6. If the Committee wants to curtail the clause or discuss it in detail, that would be the right and proper way to do so, rather than by means of an Instruction.
  7.52 p.m.
  Mr. Hugh Rossi: I want to address myself only to Part V, which relates to Highgate Cemetery. In doing so I speak not only for myself but for my hon. Friend the Member for Hampstead (Mr. Finsberg) and for the hon. Members for Islington, North (Mr. O'Halloran) and St. Pancras, North (Mr. Stallard). All four of our constituencies border the cemetery, and the question of how Camden Council handles the matter is of great importance to us all.
  Perhaps I should admit responsibility for having set in train the events which have led to the appearance of Part V in the Bill—incidentally, the largest part of the Bill, accounting for over half of it, both in terms of clauses and in terms of pages.
  It was in September 1973 that I first wrote to my noble Friend the Baroness Young, then Under-Secretary of State for the Environment, following a number of representations that I had received from constituents about the deplorable state into which Highgate Cemetery had degenerated. It was a veritable wilderness, vandalism was rampant and various occult practices were taking place. This was a matter of considerable distress to the relatives of those buried there and also of concern to constituents in those four constituencies.
  As a result of that approach inquiries were put in hand, from which it became clear that the private company owning the cemetery was making a substantial annual loss and had no funds at all available for urgent maintenance. As a result of discussions, Camden undertook the care and maintenance of the cemetery

  1401
  for about two years and has now put in hand this legislation, which will enable it to acquire the cemetery.
  It is gratifying that Camden should have responded in that way. I am grateful that it should be considering action to preserve the cemetery and also the not inconsiderable expenditure which will be necessary. According to estimates that I have seen, the minimal capital cost of restoring the fabric of the cemetery will amount to £350,000, followed by annual running costs of about £50,000. At a time when local authorities are being asked to cut back on their expenditure, it is indeed far-sighted of Camden to contemplate that sort of expenditure. But one must see this matter in the unique context of the Highgate Cemetery. It is, in effect, a national monument. It has a site of about 40 acres on the southern slopes of Highgate Hill, adjacent to Hampstead Heath. In that alone, it is a matter of major significance for the residents of North London.
  Beyond that, however, the cemetery dates back to 1839 and contains many remarkable monuments. It is probably best known as the resting place of Karl Marx, whose tomb is alternatively the subject of international pilgrimage and the object of daubing. However, it is the western part of the cemetery, in which Karl Marx's tomb does not lie, which is of unique interest as a national monument.
  That part of the cemetery is a fine example of nineteenth century funerary architecture, set in an area of great natural beauty. The buildings and monuments of great interest are the Egyptian avenue, the circle of burial chambers, the chapels of rest, the colonnade and the entrance gates. I should like to describe the architectural merit of these monuments, but I know that hon. Members are anxious to move on rapidly to the first Instruction. Therefore, I hope that the House will forgive me if I do not go into these matters, which may be of interest to the House—and certainly of greater interest to people outside who are concerned about the future of these monuments.
  As well as the architectural merit of these mausoleums and tombs, it may be of interest to the House to know that
  1402
  interred in the western part of the cemetery are the bodies of Michael Faraday, the famous scientist, John Galsworthy, Sir Rowland Hill, Christina Rossetti, George Eliot and William Friese-Greene, the inventor of the cinema, to mention only a few.
  The Royal Fine Art Commission and the Nature Conservation Council have shown an interest in Highgate Cemetery and expressed the view that it should be preserved very much in its present state and as an area of natural beauty. By their interest they have encouraged the Highgate Society and the Friends of Highgate Cemetery, who have taken a vigorous part in seeing that steps are taken in the best interests of the nation.
  Therefore, the House may ask, why am I raising the matter in this way, by speaking upon Part V of the Bill? The reason is that within Part V there seems to be a requirement by Camden for extremely wide powers going far beyond what many people consider to be necessary for a simple conservation of the cemetery in its present state as a national monument. It is the seeking of these wide powers and the way in which they are expressed that cause concern.
  The hon. Member for Hackney, South and Shoreditch (Mr. Brown) referred to Clause 17. If passed in its present form, that clause would enable the Council to alter the user of the western part of the cemetery so that it could be used for the purposes of gymnasia or centres for the use of clubs, societies or organisations with athletic, social or educational objects under the Physical Training and Recreation Act 1937.
  This immediately raises a question in people's minds. If the atuhority is to spend so much money taking over a cemetery, and is seeking these powers, surely it will try over a period to turn the land area into something different. It is feared that alongside the mausoleums and monuments, in this area of controlled but wild natural beauty, some ghastly concrete structure will be built for use as an athletics hall. To be fair, Camden has had discussions with the residents' organisations, the Highgate Society and the Friends of Highgate Cemetery. It seems that Camden would be prepared to delete reference to gymnasiums or centres for athletic clubs.

  1403
  In the view of those who are interested in the matter, that does not go far enough. They believe that the dangers would remain if the wording was not further cut down. This is borne out in a letter from the town clerk to the representative organisations. He says that passive and active recreation is the objective of Camden Council. It is the use of the words "active recreation", coupled with the power that would remain, even after amendment, to use the grounds as a centre for social purposes which causes concern. The word "social" is extremely vague. It could cover a whole variety of activity for which centres could be built in the middle of this area of natural beauty.
  We feel that Camden has not accepted sufficiently readily the basis of objection. The area should be preserved as one of natural beauty, open to the public for recreation, for walking and enjoyment of the surroundings, but recreation should go no further than that.
  The promoters must consider this matter. Although the Instructions to the Committee which appear on the Order Paper and which would deal with the matter cannot be reached today, the Bill will come to the House for further consideration. If Camden Council, in the cycle of Committees, does not produce the formula for which residents are asking, we must reserve our position and at a later stage table amendments and vote upon them.
  The wide powers in Clause 18 also give rise to concern. The clause gives Camden Council the power to remove any tomb or mausoleum after three months' notice. When the House appreciates the character of the area, it will be able to imagine the concern which is felt about a blanket power of that kind. Already Clause 10 of the Bill gives a general power to the borough to deal with cemeteries in their areas, but it is a restricted power. There is reference to graves which have not been used for 75 years. Under this clause a notice has to be served upon the owners, who must be given various opportunities to object. When there are safeguards which we are asked to approve, dealing with the overall situation of council cemeteries, why is it necessary to have a special clause with special powers going beyond that which
  1404
  is considered necessary for the generality of local authorities? For that reason I ask the Camden Council to reconsider its refusal to contemplate an amendment to Clause 18 and Clause 22, which deals with interment. If the Council is not prepared to do that, on another occasion my hon. Friends and hon. Members of all parties representing neighbouring constituencies will seek to persuade the House to amend the Bill.
  I now turn to the setting up of an advisory council. There is no reference to this in the Bill and we would like to see it added to the Bill. We cannot deal with the Instruction to set up an advisory council today because of the time available. The kind of advisory council that we have in mind would be of great advantage to Camden Council because it would immediately make available to it a great deal of expertise and specialist knowledge for the preservation of the monuments which I have mentioned, and also for the conservation of the area. It would also be a vehicle by which public funds could be raised nationally for the preservation of the monuments. Camden would benefit because it would not have to undertake the expense of restoring and maintaining the monuments. In return we would require a little more than consultation between Camden Council and the advisory council. We would not want Camden Council to act unless it had the approval of the advisory council.
  We want to ensure that Camden Council, faced with the difficulties of a London borough with 40 acres of land, will not be tempted to use that land for purposes which local residents feel to be inconsistent with the character and nature of the cemetery. Camden is prepared to consider setting up an advisory council if the Bill is passed. We would prefer the Council to be referred to in legislation and its powers and objectives to be specified in the Bill. There could then be no doubt or difficulty about the relationship between Camden Council and the advisory council.
  I hope that the promoters of the Bill and Camden Council will consider my observations, which represent not only my views but those of hon. Members from adjoining constituencies and a wide range of public opinion.
  8.8 p.m.
  Mr. John Cartwright: I intervene briefly to refer to Clause 12. I was a little perturbed by the different legal interpretation of the current state of the law on caravan sites given by my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) and the Minister. I represent one of the only two London boroughs that have provided caravan sites under the Act. It is an extremely expensive business. Greenwich provided a site not just for 15 caravans, as required under the Act, but for 54. The capital cost to ratepayers has been more than £300,000. I was leader of the council at that time and I was concerned that our action was ultra vires and that the spectre of surcharges might arise.
  The provision of this extremely expensive caravan site has not eased the problem of gipsies or travellers. It has considerably increased them in my constituency. In addition to the 54 caravans on the site, with all the management problems that go with them, we have a travelling circus of caravans. About 50 of them camp on the public open spaces and roadsides in the general vicinity of the authorised caravan site.
  The nuisance is well known to a number of hon. Members. It is not just the car-breaking all over the place, the rubbish, and the dogs; a burning issue on a GLC estate in my constituency over the past year has been wild horses roaming over the public open space and people's gardens, scaring schoolchildren, and getting into school playgrounds and just about everywhere else. We have had to waste a great deal of police time and manpower to round up those wild horses
  As a borough designated under the 1968 Act, we have tried to move on unauthorised caravan dwellers—and a fruitless operation it has been. We have had to take them to court. It is staggering how many Browns, Smiths and Joneses live on the caravan sites. When they come to court they turn out to be different Browns, Smiths and Joneses. Even if one succeeds in taking them to court and moving them on, all they do is to move a few hundred yards down the road, where the whole circus starts all over again, or they move into the constituency of my hon. Friend the Member for Erith and Crayford (Mr. Wellbeloved) and the Lon-
  1406
  don borough of Bexley has to take legal action.
  It is distressing that organisations such as the Romany Council—organisations that are rightly concerned about the welfare of travellers—are now pressing my borough to do even more. Having provided a site for 54 caravans at a cost of more than £300,000, we are apparently now expected to provide even more facilities for such people. It is unfair to my constituents and ratepayers that having spent that gigantic sum they should have on their doorsteps the continuing nuisance of the unauthorised caravans.
  The attitude of my right hon. Friend the Minister for Planning and Local Government is not particularly helpful. His view is that the London borough of Greenwich should think carefully before moving on the unauthorised caravans and should consult neighbouring authorities. What sort of response is the borough likely to have if it asks its neighbours whether they would like it to move the caravans into their areas? I doubt whether it would receive a great deal of co-operation.
  If there is to be, as I hope, a consideration of the present situation under the 1968 Act, I hope that it will be borne in mind that the Act does not provide adequate safeguards for those authorities that have tried to meet their obligations under it. I hope that there will be some tidying up in that respect.
  8.13 p.m.
  Sir George Young: I wish to speak briefly about Clause 12, but first I have something to say on the Minister's comment about the Whip. If there are more Conservatives than Labour Members in the House at 10 o'clock, that will mean only that the Conservative Party views the affairs of the capital with more concern and affection than the Government do.
  The hon. Member who moved Second Reading, the hon. Member for Hackney, South and Shoreditch (Mr. Brown), spoke with less enthusiasm about Clause 12. It is disturbing that he and the Minister do not support it and yet we are still lumbered with it. There seems to be no way of getting rid of it. I hope that we shall be reassured later that the procedural problem has been overcome.

  1407
  The clause is needed because the parliamentary draftsmen made a mistake in the 1972 Local Government Act, unintentionally depriving some London boroughs of their powers to provide sites under the Caravan Sites Act 1968. I understand that the object of the clause is to clarify the position by giving London boroughs the powers that everyone thought they had.
  There are two powerful reasons for objecting to the clause. First, the Minister declared himself unhappy with the operation of the Caravan Sites Act, and therefore it is nonsense to try to extend that Act to the London boroughs. Secondly, the financial implications of implementing the Act in London are disastrous.
  On the first point, I am indebted to the Minister for Planning and Local Government for his answer to the hon. Member for Peckham (Mr. Lamborn) who asked whether the Minister was satisfied with the operation of Part II of the Caravan Sites Act 1968. The right hon. Gentleman replied:
  "No. I have asked Mr. John Cripps … to undertake a study".
  The terms of reference included
  "the provisions for the exemption of local authorities and the designation of their areas".—[Official Report, 26th February 1976; Vol. 906, c. 314–15.]
  The designation and exemption provisions are of particular concern to London boroughs, which believe that land in the boroughs could be put to better uses than providing sites for gipsies. This has caused particular resentment in boroughs such as my own in Ealing, which has been unable to gain exemption although it has asked for it several times.
  My hon. Friend the Member for Streatham (Mr. Shelton) spoke movingly on 16th January about the problem in his constituency. I know how hard he has been trying to see that his own borough does not have to implement the Bill. As the Minister is unhappy with the Act, there can be no case for extending it to the boroughs in London.
  The implications of extending the Act are frightening. If the London borough of Ealing is compelled to make provision for gipsies, the cost will be £275,000 for 16 pitches—about £16,000 per pitch. Furthermore, the annual deficit will be £34,000, or more than £2,000 a pitch,
  1408
  which is economic nonsense. How can the Government tell the people of Acton that we are in such a financial crisis that the hospital building and school building programmes must be cut, and yet tell them that the borough must provide sites for gipsies? In my book—I am sure that my constituents agree—that must have lower priority than the items that the Government are cutting.
  We are looking for specific assurances from the hon. Member for Hackney, South and Shoreditch and the Minister that they will suspend the implementation of the measure in boroughs such as Ealing and Lambeth, which have a particular problem, until the study has been completed, and that in the meantime there will be no compulsion on boroughs to provide sites. If we do not have such assurances tonight, I am sure that hon. Members on both sides of the House will insist that Clause 12 is removed at a later stage.
  8.17 p.m.
  Mr. John Parker: Many of us very much appreciate what the hon. Member for Hornsey (Mr. Rossi) has done about Highgate Cemetery, but I cannot agree with all that he said.
  I have an interest, first, as a member of the executive of the Commons, Open Spaces and Footpaths Preservation Society and, secondly, as a member of the Historic Buildings Council, although the Council has not officially considered the matter. The Society has been in discussion with the Camden Council on the question of open spaces, and is satisfied that the proposals put to it by the Council will satisfy its argument that there should be open spaces in part of the cemetery. I fully agree.
  The Society has played an active part in trying to have old cemeteries all over the country taken into public ownership. One such was Nunhead Cemetery, which I recently visited. Its landscaping is very successful, and I hope that there will be similar landscaping and use of the site at Highgate. A part of the cemetery at Nunhead is to be open space, with most of the trees remaining as they have grown up naturally over the years and the monuments of architectural and historic value being maintained. Part of the space will rightly be changed into an open space for young children to enjoy. We

  1409
  must consider not only the dead and their relatives but the young people of such an area.
  Discussion of the best use to be made of certain parts of a cemetery is well worth while, but if there is to be an open space one must have power to remove graves, many of which have no architectural or historic merits, though many people may have sentimental feelings about them. I remember a canon of Carlisle telling me, many years ago, that he had an enormous battle to clear the graves around the cathedral so as to have a green, open space to set the cathedral off. He had to move some at night, because of local feeling.
  I do not think that that will be necessary at Highgate, but the area should be well landscaped and the monuments well preserved. A certain part should be an open space. That does not mean that we should cover it with buildings of various kinds. As I understand it, the discussions now taking place are based on an understanding that it should be kept as an open space.
  I am opposed to Instructions 5 and 6 but I think that Instruction 4 might be discussed further. I do not think that the powers of Camden Council should be legally limited by its having to consult a public advisory trust. But provision should be made for discussions to take place with the Council as to the way in which the area should be developed. The Council should not be mandated, however.
  All of us who are interested in the general London scheme will compliment the local Members on the lead that they have given in trying to get action taken to preserve the cemetery and to utilise it. No one likes a place that is a wilderness—an area comprising overgrown grass and brambles. Such a place is a disgrace to London. That is especially so when people come from all over the world to pay homage to, or at least to see, the Marx tomb. I am sure that all Londoners wish to see the best use made of this area. We should all like to see the Camden Council given the power to ensure that it is utilised in that way.
  8.22 p.m.
  Mr. William Molloy: support the remarks apropos Clause 12
  1410
  made by my hon. Friend the Member for Woolwich, East (Mr. Cartwright) and the hon. Member for Ealing, Acton (Sir G. Young). I am bound to say that some of the hon. Gentleman's Conservative colleagues in the borough of Ealing would have been seeking to slash and cut just as much if the gipsies had never left Egypt, or wherever they come from.
  We still have a gruesome problem. Those of us who seek the removal of the clause wish to draw to the attention of the House that for over a decade local authorities have been placed in an almost impossible situation. It is not a bit of use our trying to put the blame on the administrators in the Department of the Environment or anywhere else. That is a remarkable Department because the Minister, who took part in the Adjournment debate which I raised on this subject and who was present at the beginning of this debate, has now vanished.
  The gipsies have presented us with a serious problem. In fact, they are not gipsies in the sense that most of us would use the term. I understand that the current phrase is "itinerant caravan dwellers". Under previous legislation they had the right to go into Buckingham Palace and on to the greensward where the garden parties take place. It seems that they had that right and that the police would not have been able to remove them. Of course, the police would have found some means of removing them if that had happened, but if the itinerant caravan dwellers had decided to move into a public park in Ealing—I am sure that the hon. Member for Acton will confirm this—the police would have had no powers to remove them. That is an extraordinary state of affairs.
  If someone drove a London bus on to a public park in Ealing he would be summoned, but it seems that an itinerant caravan dweller could move on to such an area because of the slipshod legislation which has been pushed through the House. We must all accept responsibility for that state of affairs.
  The problem which I have described has taken place in my constituency near Church Road, an area in the north of the borough. Indeed, the same problem is being faced by the hon. Member for Acton. The House must understand that, aided and abetted by the Southern England Gypsy Council, which is active

  1411
  in these matters, itinerant caravan dwellers have a complete disregard for the law of the land. I do not know that any of the do-gooding gentlemen concerned have any itinerant caravan dwellers at the end of their gardens, but my constituents in Ealing are fed up to the teeth with what is happening in the borough. My hon. Friend the Member for Woolwich, East mentioned wild horses. My constituents would be willing to swap their problem for the problem of wild horses.
  This is a problem which is now on the verge of leading to some form of action being taken by ordinary people who live on the council estates near the itinerant caravan dwellers. They have appealed to their Members of Parliament, but they have not done very much. They have appealed to their councillors, and not much has been done. They have appealed to the police and, again, not much has been done. The problem still remains. Where are they to go, and what are they to do?
  It seems that the law allows anyone who has a caravan to move safely on to someone else's ground. Under previous legislation the London borough of Ealing thought that it had powers to make a contribution to the provision of sites outside the borough. When the Conservative Party was in government, the London borough of Ealing wrote to the Department of the Environment on umpteen occasions. I believe that nine or ten letters were written. Over three and a half years not even an acknowledgement was received. That is slipshod behaviour in anyone's language. I believe that it is downright insulting behaviour. I agree that in many instances local authorities have displayed slipshod behaviour, but that argument is destroyed when Departments of State behave in an even worse manner.
  I ask my hon. Friend the Under-Secretary of State to do me the courtesy of listening to my remarks. Perhaps he is having a talk with the Clerk, but that is not good enough. I repeat that in Ealing we are on the verge of having a form of race riot. Perhaps my hon. Friend will take note of what I have said. Let him understand that shopkeepers have been smashed up and police have been injured. Council officials have been savagely attacked, as have ordinary
  1412
  citizens going about their everyday business. The police tell me that there was an increase in crime when the caravan dwellers moved in.
  I ask my hon. Friend to take full cognisance of what my hon. Friend the Member for Woolwich, East and the hon. Member for Acton have said. If necessary, I ask him to see all those who are concerned with this problem after the debate, or some time next week, so that we can introduce legislation that will clear up this ludicrous situation once and for all.
  8.28 p.m.
  Mr. Harry Lamborn: I wish to refer to Clause 12 of the Bill. We must remember that inner London boroughs, such as Southwark, have a high density of population—indeed, in my area it is as high as 130 to the acre. Therefore, when a gipsy site is put down in such an area, the deplorable conditions and the consequent mess created have considerable repercussions on the people who live in adjoining properties. I recently took part in a deputation from the Southwark Council to the Minister. We gather that the Minister cannot suggest to the borough a suitable site on which caravans can be situated. In an attempt to achieve designation, Southwark must provide a rolling programme of sites over the next five or six years. Therefore, as one site is redeveloped, the council face the expense and problems of moving to the next development area. The present situation is quite impossible for the council. I believe that there is a case for the exemption of inner London boroughs such as Southwark.
  I know that initially the local inhabitants in my area had an open mind on the subject and took a benevolent attitude to gipsies. I remember that the Rev. David Sheppard, who lived in the area, took a great lead in persuading the local community to accept the gipsies, but the conditions that they created were so bad that the whole area is now seething with hostility. Therefore, if it is thought that legislation is ineffective surely steps should be taken to deal with the situation.
  I have every sympathy for hon. Members who have put the case for areas such as Ealing, but they must realise that the densely populated areas of inner

  1413
  London have even higher housing densities and extremely depressing housing lists. Southwark has a housing waiting list of 8,000 and certainly cannot spare land to provide a permanent site, as is suggested. Indeed, under the present situation the council must provide a series of sites. I have already said that it must provide a rolling programme of sites.
  I understand from the local authority in my area that it has never been able to collect rates or rent from the people concerned, although it has spent a great deal of money in laying out sites. Therefore, I hope that the Minister will pay heed to what I and other hon. Members are saying, and will appreciate the concern felt by people in the London area. I hope that he and his colleagues will re-examine the situation.
  8.34 p.m.
  Mr. Ronald Brown: With the permission of the House, I should like to reply to the debate on behalf of the promoters of the Bill.
  I have taken advice on Clause 12 and I can only say that the matter is precisely as it was left in the first place. We can only undertake to examine the matter in Committee to see whether something can be done. The promoters are willing to re-examine the matter in consultation with all the interests concerned to see whether some solution to the problem can be found.
  I should like to thank the Minister for the courteous way in which he has dealt with the criticisms levelled at the Government on this issue. I gather he feels that at the end of the day the matter will have to be solved in some other way. Following complaints raised by many hon. Members, I hope that after consultation we shall be able to resolve the situation.
  It would be satisfactory if the promoters could provide some accommodation for the views expressed tonight either by withdrawing the clause in Committee or getting the Minister to invite all those concerned for a discussion about how to escape from this dilemma. I remind hon. Members that if we are dissatisfied with the action taken on Clause 12 in Committee, we can take the appropriate decision on Report.
  Mr. Arthur Latham: May we have an undertaking that there will be wider consultations with the London boroughs? It would be very unfair to allow a problem to be shifted from inner London to outer London, and must be careful not to undermine the original principles under which the arrangements were to be made. I do not wish to prevent a debate on this issue, but it would not be healthy or helpful to kick the gipsy issue around the House. I hope that in giving an undertaking my hon. Friend will not go too far in his assurances of what might be done—
  Mr. Deputy Speaker (Sir Myer Galpern): Order. Let us have reasonably brief interventions and not speeches.
  Mr. Latham: I apologise, Mr. Deputy Speaker. I was responding to a sedentary intervention, which I should not have done.
  Mr. Brown: I understand the point my hon. Friend is making, but this matter has been fully discussed by the London Boroughs Association and between individual London boroughs.
  We now have a situation in which the law is indeterminate. There is reason to believe that London boroughs do not have the powers which it is alleged they possess. Therefore, my hon. Friend will understand that the boroughs are having great difficulties and will use this opportunity to clarify their position.
  Mrs. Millie Miller: While I appreciate the problems of the inner London boroughs which are required to provide sites when they have so much difficulty in providing housing for local residents, I hope that what emerges from this debate will not be a blanket condemnation—
  Mr. Deputy Speaker: Order. Is the hon. Lady making a speech?
  Mrs. Miller: I am asking a question.
  Mr. Deputy Speaker: It sounded more like a speech to me.
  Mrs. Miller: I am asking my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) not to give the impression in his response to the debate that we are condemning all the people who have been established in perfectly acceptable situation in some boroughs.
  Mr. Brown: I have not made an issue of the re-siting of gipsies. I have merely suggested that, on reflection, perhaps the Government will feel that this is not the way to put right the statute book. I have attempted not to get involved in all the other arguments. My hon. Friend the Member for Islington, South and Fins-bury (Mr. Cunningham) is not present, but I hope he will read what I have said and realise that I have tried to give the assurance he requested.
  On Clauses 7 to 9, the hon. Member for Hampstead (Mr. Finsberg) made some carping criticism about London boroughs not responding and the insufficient time allowed for the debate. I cannot say why the debate was called at this time. That is a matter for the Chair. The hon. Gentleman has greater courage than I to criticise the Chair. I want to speak again. Perhaps the hon. Gentleman has given up hope. I know of no conspiracy for bringing the debate forward by one day.
  I do not want to be critical of the hon. Gentleman. He sought a sample of the views of three inner London boroughs and three outer London boroughs. He was given the views of 16, and the promoters thought that they had more than honoured his request to know something about the reaction of the London boroughs. The promoters are speaking on behalf of Camden Council, and I quote from a letter written by the hon. Member for Hampstead:
  "The council's proposal therefore would be that Clause 17(2)(a)(iii) is amended to read 'for the purposes of centres for the use of clubs, societies or organisations having social or educational objects'".
  For many years Camden Council has done great work. I was given a list of six former cemetery grounds which are now being used as children's play areas and are supplied with play equipment. Camden is attempting to be as helpful and understanding as possible of the needs of the area.
  My hon. Friend the Member for St. Pancras, North (Mr. Stallard) is champing at the bit at being unable to say his piece. His constituents should know that he has been present at the debate all the time. Over the past weeks he has been hectoring me and has told me of the close interest he has taken in this matter.
  I have tried to answer the points raised in the debate, which is being closely watched by the promoters of the Bill. The promoters have undertaken to answer any point which requires an answer. They have undertaken to give further information to any hon. Member who wishes it. I hope that the House will give the Bill a Second Reading.
  Question put and agreed to.
  Bill accordingly read a Second time and committed.
  Mr. Deputy Speaker: I remind hon. Members that Mr. Speaker has selected Instructions No. 1, No. 3, and Nos. 5, 4 and 6 taken together.
  8.43 p.m.
  Mr. Geoffrey Finsberg: I beg to move,
  That it be an Instruction to the Committee on the Bill to leave out Clause 6.
  Harmony may now cease.
  Mr. Deputy Speaker: I hope that the hon. Gentleman is not trying to stir up some strife.
  Mr. Finsberg: As we are not debating devolution, no, Mr. Deputy Speaker. Harmony will cease between the two sides on the principle of the Instruction. It should come as no surprise that we are utterly opposed to the proposals in the Bill that cover direct labour. The Instruction seeks to remove that power from the Bill. There is no evidence that over the years there has been any benefit to the ratepayer from construction by direct labour by any local authority; indeed it has acted to the detriment of private enterprise, as I shall try to prove.
  On the maintenance of council property, there may be a case, although I am not certain, because I have yet to find an efficient direct labour force that does maintenance work. In order to be satisfied that it was efficient I should want to see it in competition for at least 50 per cent. of the work.
  Let me give the House some examples. First, I cite the example of the metropolitan district council of Wigan. In October 1975 that council gave its own direct labour department some work on 249 houses, although two contractors had submitted lower tenders. There were protests and, in the end, the Minister for Housing and Construction decided that the estimates and tenders were too

  1417
  high. He said that new tenders should be sought.
  During that year the direct labour department of Wigan obtained only one project—an old people's home and a community centre. It tendered for seven and got one. It was successful on that job by only 1½ per cent.—that is, £5,000 out of £305,000 against a firm price tender from a contractor. On a fluctuating basis—that is, where there is a rise and fall clause and allowing for some compensation if certain costs rise—one contractor was prepared to tender 2½ per cent. below the direct labour figure. That was the largest job that the direct labour department of Wigan sought. On the next largest job, which was over £200,000, seven contractors produced lower tenders. On the next largest job about £140,000—three tenders were lower.
  The department's estimated overheads, on all work—capital, refurbishing and maintenance—in 1975–76 are about 65 per cent. of labour costs, but a notional on-cost rate of only 50 per cent. is charged on all tenders. Therefore, the unrecovered portion of overheads has to be met from the rates. That is not fair competition.
  I may be told that I should confine my remarks about bad direct labour to London. So be it. I can find plenty of examples, and I propose so to do. The first is that of the promoters of the Bill, namely, the Greater London Council. The GLC carried out some work in 1973 on behalf of the Inner London Education Authority, which relies upon the GLC for its school maintenance work. It transpired that the costs of the GLC at that time were between 50 per cent. and 60 per cent. higher than those in Manchester or Birmingham.
  I mentioned earlier the failure to obtain information. I regret that I accused the London boroughs of not giving as much information as they should. They offered me three pieces of information for inside and outside London. They even sent a chart setting this out. I regret that I omitted that, and I apologise. However, I do not apologise for the letter dated 26th February from the Controller of Housing of the GLC, who said:
  1418
  "You asked for information showing the detailed financial results of the GLC's present direct labour organisation in the construction field over recent years. Reports on the final costs of individual jobs are being assembled and will be supplied to you shortly, together with an analysis as soon as this is complete."
  I should have thought that even the GLC would know that the latest time of arrival for that information is this debate. That information had not been supplied to me by 6 o'clock this evening. At least that criticism can be completely sustained.
  I want to give one or two examples of what is happening in Loudon. London is in a difficult situation. People want to know exactly what has been happening, and whether there is any justification for local authorities asking for the powers that are so badly needed—so they say.
  Let me take as an example the London borough of Enfield, which closed down its direct labour department in 1971. Following a National Building Agency inquiry, it was found that complete figures could be compiled for only two major projects, and these showed an overspending of £1 million on the original figures. Documents for another £3½ million worth of work were missing, and officials did not report some overspending to the responsible committee. The council wants power to carry out more direct labour work.
  The next example is that of Wandsworth. A number of Wandsworth's major building projects being done by direct labour are running late. In June, one was reported to be 90 weeks behind schedule, and another to be 65 weeks behind. After all, penalty clauses cannot be imposed upon direct labour departments, because in the end it is the poor ratepayer who has to pay. Wandsworth's direct labour department has been expanded again in recent years, although in 1969, when Wandsworth was Conservative-controlled, its new work turnover was reduced from £2 million to £500,000 a year. At that time the works committee chairman stated that from 1964 to 1968, when it was Labour-controlled, the department had been allowed to take on increasingly large work-loads without evidence whether the work could be completed efficiently in terms of cost. In 1971 the council was still awaiting the final costs of direct labour work completed in February 1967.

  1419
  It wants more power and more direct labour.
  Next comes Hammersmith. In July 1975 Hammersmith's director of housing reported that of 30,000 repair orders sent out in a year, many jobs were not done and many were bodged. Those are his words, not mine. Because of staff shortages it had been a long-standing practice not to check work in progress or to carry out final inspections to ensure that work had been completed to the estate manager's satisfaction. Orders were often returned stamped to show that they had been completed, and it was not discovered whether certain items had been completed until tenants complained that they had not been. In the year 1967–68 the district auditor had reported that the department overspent by 10 per cent. on its new work, and final accounts were outstanding for up to three years. Hammersmith wants power to have more direct labour.
  All these boroughs want the power to do work not merely for themselves but for private individuals anywhere in Greater London. They do not strike me as very efficient.
  Let me come on to Southwark, which is almost the worst of all examples. There was an investigation into Southwark because of an overspending of about £500,000 in 1967. This revealed features that are common to most direct labour departments—not all, but most. Those features included bonuses paid without regard to output, overtime payments without regard to cost, and bonuses of more than 30 per cent. over standard wage rates paid without ascertaining whether they had even been earned. An investigation into one instance of excessive overtime payments revealed that 31 men were recorded as working a total of 574 hours on one particular Sunday, most recording 22 hours or more in the 24-hour day. They were paid double time, plus bonuses, on 100 per cent. of all the hours worked—four times the normal rate.
  The district auditor commented:
  "I am left with the firm impression that cost was clearly regarded as very much secondary to the speed of completion and that there was no positive or informed encouragement by the building manager towards cost-consciousness."
  1420
  This was on a job that was expected to cost £7¼ million and to take 181 weeks to complete. The job was finally completed for a cost of £11 million in 300 weeks. Southwark wants power to build for private persons anywhere in its borough or throughout London.
  I turn now to my own borough—Camden. An investigation showed that, for a large proportion of work on which bonuses were paid, there were no written orders, no records in the men's timesheets, and no records of essential materials for the jobs being issued. Less than 1 per cent. of the bonused work was inspected, and nearly one-third of the claims inspected were overstated. Nearly 50 separately targeted jobs claimed had not been done.
  It is true that the GLC, in the letter from which I quoted earlier, has tried to give certain undertakings to comply with the report of the Chartered Institute of Public Finance and Accountancy. I am grateful for that having been said. The fact is that the Bill confers powers not only on the GLC but on the 32 boroughs and, fairly, the London Boroughs Association states that it cannot give those undertakings, because it is not empowered so to do. Only individual boroughs can do that. They have not done so. If they did, in the light of what they have been doing, I am not sure how much value could be placed on them.
  The clause goes much further. It widens the normal powers to provide work for the local authority. It now seeks to go into competition and to try to do work for private individuals.
  We are getting reports all the time, confirmed by the Department of the Environment, that the construction industry is going through a bad time. This Bill is trying to shift the load of work from one section to another. It is attempting to shift it from a private enterprise section to a public ownership section, where the losses will be footed in the end by the poor benighted ratepayers. That is not good enough.
  I do not accept the Minister's complacent attitude. He said that the House should pass this clause and let the Committee look at it. I hope that the House will be wise enough to delete this clause, so that the Committee is not burdened

  1421
  with having to listen to the nonsense of justification to which it might otherwise have to listen.
  The clause goes further. I wonder how many hon. Members have carefully studied the Bill. Do they realise that Clause 6(1)(c) seeks to give power to the GLC and the 32 boroughs to provide for the person for whom they are doing the building work any administrative, professional or technical services. In other words, the boroughs are entering into competition with quantity surveyors, architects, and the like. From my knowledge of local government, frequently the boroughs' departments are so overloaded that they invite outside architects and surveyors to do work for them. Yet they are trying to take powers to do that work themselves. How will that speed anything up? I do not believe that prices would be competitive, because they would be undercut.
  The GLC—I must read this word for word—states:
  "The Council has been somewhat surprised by the strength of opposition to the provisions of Clause 6(1)(c) which it had included purely as a consequential and incidental matter arising from the main proposal to provide a building works service for construction, improvement or repair. An undertaking would be given that there is no intention or desire to exercise the powers in the field of professional or technical services beyond that which is reasonably necessary to offer building work services. Again the Council would undertake that these services would be charged to the private owner, including all overheads, on the professional scale basis appropriate to the type of work."
  As far as it goes, that seems all right. The House will remember the case of Wigan, where there were 65 per cent. overheads and where only 50 per cent. were recovered. I do not know what the 32 London boroughs would do, so I am not prepared to accept just this statement from the GLC.
  The Chartered Institute of Public Finance and Accountancy report was made in June. This is from the professional organisation that used to be the Institute of Municipal Treasurers. The Government have not taken up CIPFA's recommendations have set up a working party. To my knowledge they have not agreed to have a representative of CIPFA on it. If I am wrong, the Minister will no doubt correct me. I believe that it is
  1422
  purely a departmental working party, and that is not good enough. It would have been wiser for the Government to wait for the report before taking a decision and before commending this aspect of the Bill to us.
  My hon. Friend the Member for Ash-ford (Mr. Speed) has said quite firmly for the Opposition that we accept the recommendations of CIPFA, which is an utterly independent body and understands how these things work. The Minister, on behalf of the Government, displayed a reasonable face when he graced us with his presence earlier, and we now have the presence of another Minister who is a very reasonable man. But in the end the Government are dragged along—squealing, perhaps—and they still vote for the most outrageous measures of municipalisation and of State ownership. In the end, all the so-called moderates give their support to direct labour.
  It is time the House realised that there are no moderates on the Government Benches. When the time comes they all vote for full-blooded Socialism. Sympathies may be expressed for the right hon. Member for Newham, North-East (Mr. Prentice) and for the hon. Member for Hammersmith, North (Mr. Tomney), but they voted for the measures relating to the Clay Cross law breakers. They voted for the removal of the freedom of speech and the freedom of the Press.
  The measure commended to us by the Minister is just another example of the nastiness of Socialism and its determination to make all private enterprise so bankrupt that it is driven out of business, so that we are left with direct labour organisations such as those at Southwark or Wigan. They are both exactly the same—utterly inefficient, and proved so to be.
  I hope that the House will accept the Instruction.
  9.2 p.m.
  Mr. Ted Graham: I am grateful for the opportunity to attempt to bring not only some sanity but also a great measure of honesty and correction into the debate, following the speech by the hon. Member for Hampstead (Mr. Finsberg). I have never heard such rubbish or such a distortion of the facts as that given when the hon. Member referred

  1423
  to the London borough of Enfield and the alleged reasons why the direct labour organisation was run down.
  I shall concentrate most of my remarks on trying to answer fairly the charge which has been made. A great number of measuring rods and yardsticks have been used by the hon. Member as to what an efficient business ought to be. He tells us that it needs to be efficient, profitable and reliable. He says that in housing it needs to have adequate design standards—in other words, it needs to be as good as, if not better than, the organisations with which it is in competition.
  I am, in a sense, delighted that reference has been made to the London borough of Enfield. The hon. Member was no doubt given some facts by someone, and those facts have become distorted in the course of their transmission. The hon. Member might accuse me in the same way if I were to use my own version of the events. I shall therefore give to the House very briefly the views of what might be considered to be an independent source, the journal Municipal Engineering of October 1971.
  The headline reads:
  "How Enfield LBC killed its direct labour department".
  The sub-heading is
  "Officers' advice rejected",
  and the report states:
  "Next week's Institute of Municipal Building Management annual conference at Scarborough gathers in what has been a gloomy year for direct labour. The saddest single blow was the decision by Enfield LBC to close EDLO, the oldest continuously operating direct labour department in the country. It was a decision taken by the Conservative controlling group against the unanimous advice of all their most senior officers.…EDLO's epitaph is the thousands of houses and all the public buildings in Edmonton which it has built since its formation in 1925. Every aspect of this district—merged into the borough of Enfield in 1965—and the whole well-being of community is a monument to public enterprise.
  EDLO's last task, now being undertaken, is to rebuild Edmonton Green—the largest town centre in Europe to be tackled by a council department.
  Since the war it has built nearly 6,000 houses and flats, at least four schools, three libraries, numerous clinics, a fire station, several community centres, a Civic Trust award-winning scheme of shops and flats—even a Scouts HQ—but most important of all, two industrial estates of six and 17 acres.…But the beginning of the end came when fol-
  1424
  lowing closely on the retirement of Tom Wilkinson, the borough architect who had done so much of the design for EDLO building, the town planning committee on 13th January resolved that as it could no longer envisaged a work-load sufficient to maintain the direct labour capital building department, the finance and administration committee be recommended to consider closing the department'.
  The major reason why it was said EDLO must be axed was a shortage of land—a situation not totally unconnected with the sale by the council of considerable areas which it had been intended to develop for housing".
  I suggest that anyone looking for effect should also look for the cause.
  One of the most significant paragraphs in the article is the conclusion:
  "A very senior Enfield officer told me: 'An appreciable slice of the savings which EDLO has achieved on its contracts in the past may well be translated in future into profits from private contracts, of which of course our ratepayers will see nothing'.
  He summed up the whole affair by saying: 'I like to see a bit of good local government. This is not it'."
  That is the manner whereby ELDO was wound up. It was a disgraceful, shoddy, squalid, typical Tory manoeuvre, and Enfield's Tories were able to carry it out because they controlled the Council at the time.
  I ask right hon. and hon. Members to examine some of the yardsticks which have been used to underline the way in which an efficient organisation should be run. More than one reference has been made to completions of contracts. A first-class record in this respect is shown by the report of the building manager produced when the whole issue was under review. I invite the hon. Member for Hampstead to appreciate this and to study it. In order after order projects show completion dates which are either on time or in advance. If Conservatives in Enfield are looking for efficiency in terms of completions, they will see that they had it in their direct labour organisation.
  Opposition Members also talk in terms of profitability, and the hon. Member for Hampstead gave some figures which I am not in a position to dispute. But in Enfield the organisation which was closed down in 1971 for doctrinaire reasons achieved a total of work, for which it tendered and won in competitive tender every time, of £4,287,000. The actual bills presented at the end totalled £4,690,000. That represented a saving

  1425
  on the lowest tenders of £197,000 and, what is more, a saving to the ratepayers of an additional 4 per cent. These figures were certified by an independent firm of quantity surveyors and not by any organisation in the Council.
  In the comparable period, £1,437,000 worth of work quantified by an independent firm of surveyors was done for £1,378,000—a saving on those works of £58,000, or 4 per cent.
  Then I come to Edmonton Green, the largest single development of its kind built by a municipality in Europe. The lowest tender was £3,575,000. The actual bills presented amounted to £3,334,000, representing a saving to the ratepayers of £240,000, or 6·74 per cent.
  Opposition Members must realise that if their colleagues in Enfield were such good business men and were so fair-minded and so determined as to judge these matters on their merits, they should ask themselves why, in the light of these facts, they decided to close down their direct labour organisation.
  I give another illustration of the value of a direct labour force. Tragically, in 1968, the Ronan Point disaster occurred. The Department issued a circular, 62/68, concerning the improvement and radical strengthening of tower blocks above seven storeys. In the London borough of Enfield, eight such blocks had been built by private contractors. The cost of strengthening them was £350,000. The 24 which had been built by EDLO cost £32,000 to strengthen. If all the work done by EDLO had been done by outside contractors, an additional £1 million would have been required to put these high-rise developments right.
  Sometimes Conservative Members talk as though all direct labour work is inferior and all private work is superior. That is nonsense. Sadly, in Enfield over a number of years—I make no great point of it except in rebuttal—there have been a number of situations in which private contractors have left a great deal of work to be done, such as remedial work, leaks at roof level and basement flooding in one development. Car parks had to be done again. The private developers clearly needed far more supervision to ensure that the quality of their work was up to standard.
  1426
  The hon. Gentleman mentioned the report from the National Building Agency. I have here a report by the Agency which is larded with phrases about work done by EDLO:
  "A high standard has been maintained throughout the contract",
  and
  "The standard of finish and general workmanship is extremely high".
  Then we come to the question of competitive tendering. There is always a veiled suggestion that, somehow or other, all direct labour organisations have an unfair advantage. During the years of Tory rule in Enfield, a great attempt was made to say that, somehow or other, the tendering was not right. For a number of developments in 1971, for instance, the Council went directly to tendering to Lindsay Parkinson, Reema Construction, Bernard Sunley, J. and J. Dean, and Cook's of Enfield. In every case the lowest tender came from EDLO, with the highest profit for the ratepayers.
  The report at the time of the National Building Agency—I cannot understand the hon. Gentleman's reference to it—said:
  "The Cost Controller has prepared a sound system of cost control which has been installed and is in operation on the Edmonton Green site. This is a comprehensive system, covering all elements of cost (labour, materials, subcontracts, plant etc.), and also includes routines for showing up any such items as variations and delays and the costs these have incurred. It is a good system, comparable to those in use in well organised large firms of commercial contractors."
  The report commented on the Brettenham road development:
  "We wish to draw the council's attention to the excellent manner in which the construction work is organised on site, which reflects very well on the capability of the site staff."
  Much nonsense has been talked by Conservative Members. In my view, their motivation is exactly the same as that of their political colleagues in the London borough of Enfield—pure spite and malice, with complete disregard for the interests of the ratepayers. They have been more concerned to destroy a successful and efficient piece of municipal enterprise and to provide opportunities for their friends and supporters in the land and building business. The Enfield Tory councillors then were not

  1427
  without their links with the building industry, and, believe me, they have not altered much since then.
  For purely doctrinal reasons, Enfield Tories committed municipal murder by destroying one of the finest pieces of municipal engineering that we had. They have criminally ignored the facts and the evidence and have clung to their prejudices and petty party politicking. Direct labour in Enfield was murdered for party and private gain. I welcome this clause, because at least it may provide a partial remedy to that disgraceful, squalid and dirty deed.
  9.15 p.m.
  Mr. Kenneth Baker: Once again we are debating a Greater London Council (General Powers) Bill. I am sure that all hon. Members who represent London constituencies, irrespective of their views on direct labour, agree that the amount of time devoted to London debates in this House is totally inadequate. Once a year between 7 and 10 o'clock we debate London matters in connection with a Bill of this nature and sometimes a Money Bill. When we consider the amount of time that we spend debating Scottish and Welsh affairs, it is wrong that we should debate the affairs of our capital in snatched moments and usually on very narrow Bills and measures.
  This Bill extends the powers of the boroughs and, to some extent, the powers of the Greater London Council. I am sure that most of the London electors would like to have a debate not about the extension of the GLC's powers but about their restriction. We have not debated that matter for almost 10 years. There is no doubt that there is a growing feeling in all the London constituencies that the powers of the GLC must be fundamentally revised and reduced.
  We should consider the whole question of housing. It is rather presumptuous of the GLC to impose upon the London boroughs the opportunity of direct labour when its own direct labour has not been successful for many years. The brief which the GLC sent out refers to direct labour and states:
  "The Council's own housing department DLO is, in terms of both size, and performance, high in the national league of building contractors."
  1428
  It may be high in terms of its volume of business, but it is not high in terms of the reputation it has earned in the building world or among the people who suffer from it—the GLC tenants.
  The brief goes on to say:
  "In recent years there has been some criticism of the performance of the housing maintenance branch of the Council's DLO".
  It can say that again.
  "this branch employs over 5,000 staff and maintains over 250,000 dwellings".
  I wonder why some of these men never manage to visit my constituency to deal with many of the complaints from GLC tenants. I am sure that there are many hon. Members with GLC estates in their constituencies whose letters about constituents' complaints have gone unanswered. There are long delays before plumbing, plastering or painting gets done.
  I am convinced that one of the powers we shall have to look at when the Conservatives gain control of the GLC next year—as we shall—is housing. I am convinced that the GLC housing estates should be returned to the management and control of the respective London boroughs in which they are sited. Indeed, in the whole area of housing management the GLC has a totally dismal record.
  In 1971–72 GLC rents represented 69 per cent. of the total housing revenue. This year, 1976–77, they will represent only 30 per cent. What does that mean? The direct labour part of the GLC will be managed and run on exactly the same basis as its housing department. We cannot expect a higher level of management on the direct labour side when we get in the housing department.
  The point I am making is that the GLC housing department is now getting a net rental income of £51 million a year after it has given rebates. The cost of GLC housing maintenance this year is £55 million. Therefore, the maintenance and management of the estates is not covered by the net rental income. This is financial lunacy and a control of housing finance which is matched and only exceeded by that of the London borough of Camden.
  If the system of direct labour is extended, it will certainly lead to an increase in the rates, particularly in my borough of Westminster. I see that my two Westminster colleagues are in the

  1429
  House. My hon. Friend the Member for City of London and Westminster, South (Mr. Tugendhat) would probably be making this very point but, unfortunately, he has lost his voice. It no doubt happened when he heard of the increase in the rates in Westminster this year. It is a Conservative-controlled council. Domestic ratepayers there face an increase of 18 per cent. and commercial ratepayers one of 12·7 per cent. I hope that Labour Members will not tut-tut at that increase, because it is not at all the fault of the Westminster Council. Of the 52p which Westminster ratepayers pay out, Westminster itself is responsible for only 9p. The rest is the responsibility of other sources.
  The large increase is due to the unfair treatment that Westminster has received from the London Boroughs Association. It has meant that the ratepayers of Westminster, Paddington and Marylebone will this year have to bear a disproportionately high increase. Westminster already pays 16½ per cent. of all GLC expenditure and 28 per cent. of all ILEA expenditure. Westminster will be paying £120 million to ILEA this year. There is already a substantial equalisation in these payments, but on top of this the Socialist-controlled London Boroughs Association has imposed this year an additional heavy burden, and this means that the constituents that I and my hon. Friend the Member for City of London, and Westminster, South represent will have to pay a very large rate increase.
  Other boroughs will be getting about £3 million or £4 million each to reduce their rates or to reduce the level of rate increase. Westminster will get only £100,000. This is not fair. We must examine the whole rate equalisation scheme within both inner and outer London, the proportion that goes from one borough to another and from the inner boroughs to the outer boroughs.
  The high level of rates in inner London is leading to depopulation. It is estimated that the population in my borough from 1971 to 1981 will fall by 58,000. In Camden there will be an estimated fall of 45,000.
  Mr. Cartwright: We have been through the equalisation scheme, London rates and now London depopulation. Is this all due to the wickedness of direct labour?
  Mr. Baker: When the hon. Member has been in the House a little longer, he will know that the General Powers Bill is an occasion for a general debate on London matters. It is all very well—
  Mr. Deputy Speaker: Order. The hon. Member for St. Marylebone (Mr. Baker) is quite right about the General Powers Bill. We are dealing here, however, with Instruction No. 1, which confines the debate to a very narrow point.
  Mr. Baker: Of course I accept your benign guidance, Mr. Deputy Speaker. I was seeking to show what I admit is a slightly tenuous link between direct labour and the subject under discussion. On the subject of tenuous links, I am reminded of what was said by the hon. Member for Hackney, South and Shore-ditch (Mr. Brown) four years ago when a Bill similar to this one was debated. There was a clause dealing with walkways and the hon. Member spoke for an hour on the deficiencies of London Transport, which were so great that the bus routes were being made into walkways.
  It is of concern to everyone in London that we do not debate London enough in this House. Depopulation of central London is a national problem. The population of inner London over the 10 years ending at 1981 is estimated to drop by 572,000 and of outer London by 339,000. If there were depopulation on that scale in Scotland or Wales, there would be debates on it in this House night after night. The Government should have a programme to deal with it. Yet we can debate this matter as it affects London only on measures of this sort. These important measures deserve more time, and I hope that in future they will get it.
  9.25 p.m.
  Mrs. Millie Miller: The Association of Municipal Authorities has particularly asked for the support of its vice-presidents in getting this Bill through because of the number of anomalies which have arisen since 1970–72, when confusion reigned in the reorganisation of local government.
  It is generally admitted that the AMA does not indulge in party political activity. I was therefore bewildered to hear one of its vice-presidents oppose the clause in such virulent terms. It is as if he is living on an island of direct

  1431
  labour forces, unaware of what the situation in the building industry in London is and has been over the last few years, unaware of the volume of bankruptcies and delays in housing plans, unaware of the inefficiency of the maintenance work done by private industry.
  On Second Reading we talked about Highgate Cemetery. I invite the hon. Member for Hampstead (Mr. Finsberg) to go and visit that cemetery and on the way to pass the Highgate New Town development, which is so far behind that people have almost forgotten its existence. Yet it is one of the largest schemes in the borough of Camden, operated by successive unsuccessful private companies, which are seriously depriving the borough and those who live in the area—where I live—of the new homes for which they have been waiting for many years.
  As my hon. Friend the Member for Edmonton (Mr. Graham) has made clear, this singling out of direct labour is a party political issue, and it should be exposed as such. My hon. Friend talked about the competitive tendering which is demanded of direct labour forces unless, because of their record, they are allowed to negotiate prices on new schemes. Of course there has been, especially in the past few years, great difficulty for direct labour in inner London, but the greatest difficulties have developed because of the greed and speculation involved in housing and office building in central London. That has siphoned off men who would otherwise work regularly, either for private firms or for direct labour forces, by the offer of wages above national and London rates. A direct effect has been to harm not merely direct labour forces but the industry itself.
  Surely the hon. Member for Hampstead is as aware as we are of the problems which have arisen both for direct labour and for private building through the development of the "lump"—the so-called self-employed system which has done irreparable harm to the structure of direct labour and private constuction in inner London. One cannot separate the clause and the allegations about inefficiency in that area from the almost total collapse of the building industry in inner London.
  The hon. Member for St. Marylebone (Mr. Baker) spoke about financial lunacy.
  1432
  As a former member and leader of Camden Council, I know that perhaps the greatest example of financial lunacy on record was that of the previous Conservative majority on that Council, in which the hon. Member for Hampstead played a direct part, which resulted in a district auditor calling upon the Council to say why its rent arrears had increased fivefold in less than three years. Yet here we are talking about the financial lunacy of the development of direct labour. London deserves far better.
  The local authorities have had to survive, particularly during the 1970–74 period, under impossible pressures, including those of depopulation. They have also been affected because most of the skilled workers and their families have moved out of inner and outer London, leaving the area with the greatest concentration of population in the country almost denuded of its service workers. The origins of the problem can be found. They certainly do not rest at the door of local government in London.
  9.31 p.m.
  Mr. William Shelton: I do not wish to take up the points made by my hon. Friend the Member for St. Marylebone (Mr. Baker) after your remarks to him, Mr. Deputy Speaker, except to say that I entirely agree with him that it is better to talk about restricting the GLC's powers than about widening them. The GLC has almost disastrously moved from its original and proper function as a planning authority to that of an authority that is far too much involved in housing management and housing construction, to the detriment of its true planning function. A clear example is the problem of the London docks.
  Clause 6 deals with the possible widening of the GLC's powers and those of the London boroughs with regard to direct labour. A dramatic defence of direct labour was made by the hon. Member for Edmonton (Mr. Graham). I say to him that about £69 million in capital is available to the GLC's Department of direct labour for construction. That is a considerable sum for any city in any part of the world. The GLC seems to have adequate powers already. It has at least £69 million for building, so it cannot be regarded as being hampered or hamstrung.
  We should have two criteria. First, will it benefit the ratepayers? Secondly, will the competition be fair and just? Hon. Members on the Labour Benches must accept that private builders are also ratepayers and do a valuable job in the community. The House must agree on those two criteria.
  Let us consider the benefit or disadvantage for taxpayers. There is a scheme at Bayonne Road, Hammersmith, costing £11 million. When it is completed there will be fewer homes on the site than those previously demolished. The cost of each home will be over £18,000, exclusive of land cost. I look forward to visiting these magnificent dwellings when they are completed.
  The hon. Member for Ilford, North (Mrs. Miller) spoke of delays in completions by private enterprise builders. Of course there are sometimes delays by private enterprise.
  The GLC Housing Construction Branch—New Works lists the job name, the original completion date given to the job when it started, and the anticipated completion date, as at February 1976.
  I take two jobs at random. One, in Juniper Street, which was expected to be completed in August 1974 is now expected to be completed in November this year—27 months late. The expected completion date of one in Wynyatt Street, which was April 1974, is now June this year—26 months late. Reading down the right-hand column, I see periods of 15 months, 27 months, 12 months, 24 months, 26 months, 19 months, five months, and so on. Of a total of 42 jobs, one has been completed before the expected date, four have been completed on time and 37 have been completed late or are expected to be late. Of those, 12 will be at least a year late, and many will be far more than a year late. Last year there was good weather, and building was not delayed. Most builders were able to get on with the job, but the GLC did not seem able to do so.
  I turn to the maintenance branch. In the 1976–77 estimates of the GLC there is a figure of more than £34 million for the managed dwellings account. That is to fix things that go wrong in GLC properties. My hon. Friend the Member
  1434
  for St. Marylebone said that all of us with GLC estates in our constituencies well know tenants' problems in having work done. If we divide the number of GLC homes into the total of £34 million a year we have a figure of £160 per dwelling. The GLC is certainly not spending an average of £160 per dwelling a year in my constituency—or, if it is, it must be spending it very badly, and the ratepayer and the GLC tenant are not getting value for money. I suspect a certain degree of inefficiency in both the construction branch and the maintenance branch.
  It can be said with some justice that housing management is not in the direct labour department, but it is direct labour because it need not be carried out by the council; in some parts of the world and in some parts of this country it is done by private contract. The staff cost to chase rent arrears has risen from £160,000, in the last year of a Tory GLC administration, to £900,000. That is what the ratepayers are spending to try to persuade people to pay their rents on time. The interest charge on £900,000 presumably comes to another £90,000 or £100,000. In the same period the housing staff of the GLC has been increased by 2,000, with no apparent increase in efficiency.
  In one week earlier this year rent arrears topped £3 million for the first time. In the week beginning 12th January they totalled £3,064,000. In addition, when a GLC tenant leaves a GLC dwelling with rent arrears the arrears are removed from the rent arrears account—a nice bit of financial management—and put into what I understand is called the "rent on vacation account". I must confess that I do not know why that is done. The rent on vacation account totals £762,000. That is in addition to the £3 million. The ratepayers of London are paying £900,000 a year to keep it at that level. Perhaps there is a hint of inefficiency in a body that is promoting a Bill to widen its powers.
  I do not wish to labour the problem, but the GLC has squatters in about 3,200 homes in the Greater London area. I understand that 2,000 are licensed by the GLC on a no-repair-no-rent basis. Another 1,200 squatters are in GLC homes without any permission from the

  1435
  GLC. Again, perhaps, there is just a whiff of inadequate management.
  Finally, will the competition be fair? That is the second criterion which I believe the House should apply. I quote from Mr. Richard Balfe, the Chairman of the GLC Housing Committee. He said:
  "Private contractors should not cower in the corner at the prospect of an expansion of direct labour activities, but accept the challenge of competition."
  I point out to Mr. Balfe that the building industry probably is one of the most competitive industries in the country. Every contract attracts a good many tenders, and competition is always fierce. I do not believe that the building industry is cowering in the corner at the threat of competition from the GLC.
  Mr. Molloy: Does the hon. Gentleman concede that for decades we have had a massive problem in Greater London? Try as it might, the private enterprise sector could not resolve the problem. A solution depended on the major contribution being made by local authorities. Much of what the hon. Gentleman has said is true, but the basic fact is that the boroughs and the GLC have provided for Londoners the homes that the private sector could not provide.
  Mr. Shelton: We are discussing widening the powers of the GLC, and I was querying whether the competition would be fair. I do not believe that the building industry is cowering in the corner, to use the rather inelegant phrase adopted by Mr. Balfe, through fear of competition from a super-efficient GLC or super-efficient boroughs. Quite rightly, the building industry is frightened of unfair competition. Much play is made in the brief from the GLC, which I expect all hon. Members received, about fair accounting procedures and other matters. The Bill provides that best endeavours must be made, taking one year with another, not to make a loss. I remind the House that that fatal phrase is to be found in all the instruments that have been used to set up the nationalised industries. Need I say more? Can the House, or London ratepayers, repose any confidence in the Bill when it uses a phrase that has been used in the past to create, for example, the Post Office, the railways and a nationalised steel industry? I do not believe so.
  1436
  There is no penalty for overspending. It seems that a direct labour organisation cannot go broke. I was prepared to give an example of overspending but I shall not do so because my hon. Friend the Member for Hampstead (Mr. Finsberg) gave an excellent series of example. One could go adding to the list indefinitely. I cannot see any benefit to the ratepayer from widening the GLC's powers. I cannot see any benefit to the ratepayer in allowing the GLC or the boroughs to go further. I cannot see that the competition will be fair. Indeed, I believe that it will be unfair.
  Mr. Deputy Speaker: May I remind hon. Members that the debate must finish at 10 o'clock? I should like, if possible, to call two Back Benchers, then I should like to provide time for the hon. Member for Hackney, South and Shoreditch (Mr. Brown) to reply to the debate on behalf of the promoters.
  9.45 p.m.
  Mr. Ernest G. Perry: In the short time at my disposal in this debate, I shall try to be concise in my remarks.
  The last two contributions from the Opposition Benches have sought to do nothing else but deride the efforts of the Greater London Council. It is strange that, as soon as there is a change of power from one political party to another that organisation, its officers and staff suddenly become incompetent and of no use.
  I must take to task the hon. Member for St. Marylebone (Mr. Baker), who complained bitterly and blamed the GLC for the decline in Westminster's population by 58,000. He sought to suggest that that was a result of direct labour. Surely, with a little more direct labour in the Westminster area that population would increase.
  I wish to apologise to the hon. Member for Hampstead (Mr. Finsberg) because I was absent when he dealt with Wandsworth. I was out of the Chamber because I was seeking information on the Bill. However, I have been informed about the hon. Gentleman's remarks, and I can only say that it is not true that the saga of Wandsworth in respect of direct labour is one of incompetence. At present, private building contracts in Wandsworth have been held up for over

  1437
  18 months—I do not say as a direct result of incompetence, but certainly due to a failure to get on with the job. I am not arguing that direct labour or private labour will be the solution to the problem. If, however, there is to be a direct labour system—and that seems necessary to provide some element of competition—the authority must have power to carry out its task.
  We have been successful in Wandsworth on many occasions in direct labour schemes. Battersea has had a record of direct labour dating back to 1900. The estates built under that scheme are a credit to Battersea. I refer to the Burns Estate in the area of my right hon. Friend the Member for Battersea, North (Mr. Jay). There are many other similar estates in Battersea built by direct labour which are a credit to the area. However, in parts of Battersea some schemes built during Tory control are nothing less than slums because of the way in which they were constructed and because of their design and the meanness of expenditure when they were built. Direct labour has produced some of the best ideas and buildings in Wandsworth today.
  It is not true to say that direct labour schemes are behind schedule. I refer to the Battersea Park Road scheme and the Winstanley Road scheme, which are a credit to the area. Those schemes were built by direct labour in co-operation with the private enterprise concern of Bovis. Bovis supplied the technical ability and the London borough of Wandsworth supplied the labour arganisation. I repeat, those estates are a credit to direct labour and to private enterprise.
  It is a pity that the whole purpose of Opposition effort tonight has been aimed at deriding public enterprise, as if to suggest that only private contracts are ever successful. We have only to look at the record to see that that is not the case. My experience on a local authority was to the effect that private companies came back again for payment for what they called "extras". If a scheme was three months or six months behind time, what did those firms do? They asked the Council for one reason or another, to pay more money. Many local authorities have to pay private contractors tens of thousands of pounds because they have
  1438
  not completed a job on time or within the costings.
  I am being assailed on all sides, with some hon. Members urging me to keep going and others urging me to keep quiet. I conclude by saying that we want direct labour in competition with private enterprise to ensure that we get good building and fewer slums.
  9.51 p.m.
  Mr. John Moore: This has been an astonishing debate. For the third time, I have sought, like many other hon. Members, to address myself to the problems of London—the greatest city in the world—and I have just three or four minutes to do so. It is very difficult to seek to represent one's constituents in a debate that, in essence, is about an extension of the power of government in a State already benighted by government, whether at local or national level. What an absurd situation!
  The time limit makes it difficult to illustrate to one's constituents the appalling nature of the extension of more government by the GLC. My hon. Friend the Member for Hampstead (Mr. Finsberg) asked why hon. Members on the Government Benches opposite failed miserably to follow their own voices in the debate into the Lobby. I remind him of Clemenceau, who said:
  "A good speech can change my mind—but my vote, never."
  That is the attitude we shall see again from hon. Members opposite tonight.
  I wish to refer to efficiency and competition to illustrate the absolute nonsense of extending direct labour any further. How can we consider it efficient to run a housing stock and manage it, like the GLC, when its income is only 30 per cent. of its expenditure? That is not efficiency; it is crass moral turpitude. Yet that is how the GLC manages its financial affairs.
  The GLC talks about fair competition and addresses private enterprise firms in an attempt to persuade them to advertise in a magazine that the Council plans to send to all its tenants. This is the sort of competition we are talking about when we refer to direct labour. An editorial in the magazine says:
  "'You and your home' a new magazine to be introduced by the GLC will have a guaranteed 220,000 door-to-door distribution

  1439
  backed by the security of the GLC's own organisational network".
  It goes on with incredibly peculiar words, which might be appropriate for Mayor Daly, in Chicago, but certainly not for London:
  "Council employees such as residents and mobile caretakers—who know their areas and their tenants—will deliver the handbook personally to all householders. In this way you can be sure that 'You and your home' will reach its target audience in the most direct and sympathetic way."
  How on earth can we talk about fair competition with this illustration of the way in which the GLC uses its own labour force? This is a classic illustration of an unnecessary extension of government and a failure to serve constituents, from wherever they may come.
  9.54 p.m.
  Mr. Ronald Brown: The debate on this part of the Bill has been very peculiar. I was prepared to listen to the arguments put by the Opposition, but I could have found better reasons for not having direct labour than they submitted. It was a pretty squalid effort by the hon. Member for Hampstead (Mr. Finsberg) and his hon. Friends. The hon. Member for Hampstead could get nothing more up to date than 1967, and some of his hon. Friends were wallowing about in information from before even that date.
  Clause 6 is designed to make direct labour schemes in London efficient and effective. Many of them are. An opportunity is given by Clause 6 to enable the work to be done by direct labour schemes more efficiently than it is now done by private enterprise.
  Ratepayers complain when they see the borough council working on a site and the Greater London Council working on an adjacent site. Ratepayers want to know why one authority cannot do the work on both sites. Clause 6 provides an opportunity to ensure that costs are reduced in that way.
  We are all urging improvement schemes on our local authorities. It is absurd that a housing association has to
  1440
  go to the local authority for money to do its work, and has to employ its own architects, engineers, surveyors, administrators and builders because the local authority that gives it the money cannot offer to do the work. It is stupid to perpetuate that state of affairs. I am saddened that no Conservative Member seems to understand that that is an expensive way to do business. Clause 6 tries to put that right.
  I understand Conservative Members wanting undertakings. The clause gives an undertaking in relation to the accounts. The promoters assure me that the intention is to work within the rules of the Chartered Institute of Public Finance and Accountancy. I cannot understand why Conservative Members argue that that is a wrong procedure. The accounts will have to be balanced one year with another, and auditors are available to audit the accounts. The safeguards are already there.
  I am surprised by the idea that only direct labour organisations are poor timekeepers. The building of the Ealing Hospital was commenced five years ago by private enterprise and is being paid for by the regional health authority. It is running more than 40 weeks behind time and it will be even more behind time as each week goes by. The private builder has no intention of finishing the hospital and is holding the authority to ransom by threatening to sack the men on the job, which is a great threat to the health service. He is blackmailing the health authority in this way to try to screw more money out of it. It is the most deplorable and disgraceful exhibition I have ever seen.
  It saddens me to see the House interfering in local government in this way. We can all make party points and pick out examples, but I hope that the House will decide to vote against the Instruction. The Instruction will not help local government, it will not help the taxpayer or the ratepayer, and I urge the House to vote against it.
  Mr. John Page: The hon. Member for Hackney, South and Shoreditch (Mr. Brown)—
  Mr. Geoffrey Finsberg Mr. Geoffrey Finsberg rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question put accordingly:—
  The House divided: Ayes 228, Noes 159.

  Division No. 80.

  AYES

  10.0 p.m.

  Aitken, Jonathan

  Grant, Anthony (Harrow C)

  Morrison, Hon Peter (Chester)

  Alison, Michael

  Gray Hamish

  Mudd, David

  Amery, Rt Hon Julian

  Griffiths, Eldon

  Neave, Airey

  Arnold, Tom

  Grist, Ian

  Nelson, Anthony

  Atkins, Rt Hon H. (Spelthorne)

  Grylls, Michael

  Neubert, Michael

  Baker, Kenneth

  Hall, Sir John

  Newton, Tony

  Banks, Robert

  Hall-Davis, A. G. F.

  Normanton, Tom

  Bennett, Sir Frederic (Torbay)

  Hamilton, Michael (Salisbury)

  Nott, John

  Bennett, Dr Reginald (Fareham)

  Hannam, John

  Onslow, Cranley

  Benyon, W.

  Harvie Anderson, Rt Hon Miss

  Oppenheim, Mrs Sally

  Berry, Hon Anthony

  Hastings, Stephen

  Osborn, John

  Biffen, John

  Hawkins, Paul

  Page, John (Harrow W)

  Biggs-Davison, John

  Hayhoe, Barney

  Page, Rt Hon R. Graham (Crosby)

  Blaker, Peter

  Heseltine, Michael

  Parkinson, Cecil

  Body, Richard

  Hicks, Robert

  Pattie, Geoffrey

  Boscawen, Hon Robert

  Higgins, Terence L.

  Percival, Ian

  Bottomley, Peter

  Hordern, Peter

  Peyton, Rt Hon John

  Bowden, A. (Brighton, Kemptown)

  Howe, Rt Hon Sir Geoffrey

  Price, David (Eastleigh)

  Braine, Sir Bernard

  Howell, Ralph (North Norfolk)

  Prior, Rt Hon James

  Brittan, Leon

  Hurd, Douglas

  Pym, Rt Hon Francis

  Brotherton, Michael

  Irving, Charles (Cheltenham)

  Raison, Timothy

  Brown, Sir Edward (Bath)

  James, David

  Rathbone, Tim

  Bryan, Sir Paul

  Jenkin, Rt Hon P. (Wanst'd & W'dt'd)

  Rawlinson, Rt Hon Sir Peter

  Buchanan-Smith, Alick

  Jessel, Toby

  Rees, Peter (Dover & Deal)

  Buck, Antony

  Johnson Smith, G. (E Grinstead)

  Renton, Rt Hon Sir D. (Hunts)

  Budgen, Nick

  Jones, Arthur (Daventry)

  Ridley, Hon Nicholas

  Bulmer, Esmond

  Jopling, Michael

  Ridsdale, Julian

  Butler, Adam (Bosworth)

  Joseph, Rt Hon Sir Keith

  Rifkind, Malcolm

  Carlisle, Mark

  Kaberry, Sir Donald

  Rippon, Rt Hon Geoffrey

  Carson, John

  Kellett-Bowman, Mrs Elaine

  Roberts, Michael (Cardiff NW)

  Chalker, Mrs Lynda

  King, Evelyn (South Dorset)

  Roberts, Wyn (Conway)

  Channon, Paul

  King, Tom (Bridgwater)

  Rossi, Hugh (Hornsey)

  Churchill, W. S.

  Kirk, Sir Peter

  Rost, Peter (SE Derbyshire)

  Clark, Alan (Plymouth, Sutton)

  Kitson, Sir Timothy

  Royle, Sir Anthony

  Clark, William (Croydon S)

  Knox, David

  Sainsbury, Tim

  Clarke, Kenneth (Rushcliffe)

  Lamont, Norman

  St. John-Stevas, Norman

  Cope, John

  Lane, David

  Scott, Nicholas

  Cormack, Patrick

  Langford-Holt, Sir John

  Scott-Hopkins, James

  Corrie, John

  Latham, Michael (Melton)

  Shaw, Giles (Pudsey)

  Costain, A. P.

  Lawrence, Ivan

  Shaw, Michael (Scarborough)

  Crouch, David

  Lawson, Nigel

  Shelton, William (Streatham)

  Davies, Rt Hon J. (Knutsford)

  Le Marchant, Spencer

  Shepherd, Colin

  Dean, Paul (N Somerset)

  Lester, Jim (Beeston)

  Shersby, Michael

  Dodsworth, Geoffrey

  Lewis, Kenneth (Rutland)

  Silvester, Fred

  Drayson, Burnaby

  Loveridge, John

  Sims, Roger

  du Cann, Rt Hon Edward

  Luce, Richard

  Sinclair, Sir George

  Dunlop, John

  McAdden, Sir Stephen

  Skeet, T. H. H.

  Durant, Tony

  MacGregor, John

  Smith, Dudley (Warwick)

  Dykes, Hugh

  Macmillan, Rt Hon M. (Farnham)

  Speed, Keith

  Eden, Rt Hon Sir John

  McNair-Wilson, M. (Newbury)

  Spence, John

  Edwards, Nicholas (Pembroke)

  McNair-Wilson, P. (New Forest)

  Spicer, Jim (W Dorset)

  Elliott, Sir William

  Madel, David

  Spicer, Michael (S Worcester)

  Emery, Peter

  Marshall, Michael (Arundel)

  Sproat, Iain

  Eyre, Reginald

  Marten, Neil

  Stainton, Keith

  Farr, John

  Mates, Michael

  Stanbrook, Ivor

  Finsberg, Geoffrey

  Mather, Carol

  Stanley, John

  Fletcher, Alex (Edinburgh N)

  Maude, Angus

  Steen, Anthony (Wavertree)

  Fletcher-Cooke, Charles

  Mawby, Ray

  Stewart, Ian (Hitchin)

  Fookes, Miss Janet

  Maxwell-Hyslop, Robin

  Stokes, John

  Fowler, Norman (Sutton C't'd)

  Mayhew, Patrick

  Stradling Thomas, J.

  Fox, Marcus

  Meyer, Sir Anthony

  Tapsell, Peter

  Fraser, Rt Hon H. (Stafford & St)

  Miller, Hal (Bromsgrove)

  Taylor, R. (Croydon NW)

  Fry, Peter

  Mills, Peter

  Taylor, Teddy (Cathcart)

  Galbraith, Hon T. G. D.

  Miscampbell, Norman

  Tebbit, Norman

  Gardiner, George (Reigate)

  Mitchell, Davild (Basingstoke)

  Temple-Morris, Peter

  Gilmour, Rt Hon Ian (Chesham)

  Moate, Roger

  Thatcher, Rt Hon Margaret

  Gilmour, Sir John (East Fife)

  Monro, Hector

  Thomas, Rt Hon P. (Hendon S)

  Glyn, Dr Alan

  Moore, John (Croydon C)

  Townsend, Cyril D

  Goodhart, Philip

  More, Jasper (Ludlow)

  Trotter, Neville

  Goodhew, Victor

  Morgan, Geraint

  Tugendhat, Christopher

  Goodlad, Alastair

  Morgan-Giles, Rear-Admiral

  van Straubenzee, W. R.

  Gorst, John

  Morris, Michael (Northampton S)

  Vaughan, Dr Gerard

  Gow, Ian (Eastbourne)

  Morrison, Charles (Devizes)

  Viggers, Peter

  Wakeham, John

  Wells, John

  Young, Sir G. (Ealing, Acton)

  Walker-Smith, Rt Hon Sir Derek

  Whitelaw, Rt Hon William

  Walters, Dennis

  Winterton, Nicholas

  TELLERS FOR THE AYES

  Weatherill, Bernard

  Wood, Rt Hon Richard

  Mr. John Hunt and

  Mr. Neil MacfarIan.

  NOES

  Armstrong, Ernest

  Gilbert, Dr John

  O'Malley, Rt Hon Brian

  Atkins, Ronald (Preston N)

  Golding, John

  Ovenden, John

  Atkinson, Norman

  Graham, Ted

  Palmer, Arthur

  Bagier, Gordon A. T.

  Grant, John (Islington C)

  Park, George

  Bean, R. E.

  Grocott, Bruce

  Parker, John

  Beith, A. J.

  Hamilton, James (Bothwell)

  Pavitt, Laurie

  Benn, Rt Hon Anthony Wedgwood

  Harper, Joseph

  Penhaligon, David

  Bennett, Andrew (Stockport N)

  Harrison, Walter (Wakefield)

  Perry, Ernest

  Blenkinsop, Arthur

  Hart, Rt Hon Judith

  Phipps, Dr Colin

  Booth, Rt Hon Albert

  Helfer, Eric S.

  Prentice, Rt Hon Reg

  Bottomley, Rt Hon Arthur

  Hooley, Frank

  Price, C. (Lewisham W)

  Bray, Dr Jeremy

  Howells, Geraint (Cardigan)

  Price, William (Rugby)

  Brown, Hugh D. (Provan)

  Hoyle, Doug (Nelson)

  Radice, Giles

  Brown, Ronald (Hackney S)

  Hughes, Rt Hon C. (Anglesey)

  Roberts, Gwilym(Cannock)

  Buchan, Norman

  Hughes, Robert (Aberdeen N)

  Rodgers, George (Chorley)

  Canavan, Dennis

  Hughes, Roy (Newport)

  Rooker, J. W.

  Cant, R. B.

  Hunter, Adam

  Ross, Stephen (Isle of Wight)

  Carmichael, Neil

  Jackson, Miss Margaret (Lincoln)

  Rowlands, Ted

  Cartwright, John

  Jay, Rt Hon Douglas

  Sandelson, Neville

  Clemitson, Ivor

  Jeger, Mrs Lena

  Shore, Rt Hon Peter

  Cocks, Michael (Bristol S)

  Johnson, James (Hull West)

  Short, Rt Hon E. (Newcastle C)

  Cohen, Stanley

  Jones, Alec (Rhondda)

  Silkin, Rt Hon S. C. (Dulwich)

  Coleman, Donald

  Jones, Barry (East Flint)

  Silverman, Julius

  Concannon, J. D.

  Jones, Dan (Burnley)

  Skinner, Dennis

  Conlan, Bernard

  Judd, Frank

  Small, William

  Cook, Robin F. (Edin C)

  Kaufman, Gerald

  Smith, Cyril (Rochdale)

  Corbett, Robin

  Kerr, Russell

  Smith, John (N Lanarkshire)

  Cox, Thomas (Tooting)

  Lambie, David

  Spearing, Nigel

  Crawshaw, Richard

  Lamborn, Harry

  Spriggs, Leslie

  Cryer, Bob

  Lamond, James

  Stallard, A. W.

  Davies, Bryan (Enfield N)

  Latham, Arthur (Paddington)

  Stott, Roger

  Davis, Clinton (Hackney C)

  Leadbitter, Ted

  Strang, Gavin

  Deakins, Eric

  Lewis, Ron (Carlisle)

  Strauss, Rt Hon G. R.

  Dean, Joseph (Leeds West)

  Lipton, Marcus

  Taylor, Mrs Ann (Bolton W)

  Dempsey, James

  Litterick, Tom

  Thomas, Ron (Bristol NW)

  Dormand, J. D.

  McCartney, Hugh

  Thorne, Stan (Preston South)

  Douglas-Mann, Bruce

  McGuire, Michael (Ince)

  Tierney, Sydney

  Duffy, A. E. P.

  Mackenzie, Gregor

  Tinn, James

  Dunn, James A.

  McMillan, Tom (Glasgow C)

  Urwin, T. W.

  Dunnett, Jack

  Madden, Max

  Varley, Rt Hon Eric G.

  Eadie, Alex

  Marks, Kenneth

  Wainwright, Edwin (Dearne V)

  Edwards, Robert (Wolv SE)

  Marshall, Dr Edmund (Goole)

  Walker, Terry (Kingswood)

  Ellis, John (Brigg & Scun)

  Maynard, Miss Joan

  Ward, Michael

  English, Michael

  Mellish, Rt Hon Robert

  Weetch, Ken

  Ewing, Harry (Stirling)

  Mendelson, John

  Wellbeloved, James

  Fernyhough, Rt Hon E.

  Mikardo, Ian

  Williams, Alan Lee (Hornch'ch)

  Flannery, Martin

  Millan, Bruce

  Wise, Mrs Audrey

  Fletcher, Raymond (Ilkeston)

  Molloy, William

  Woodall, Alec

  Fletcher, Ted (Darlington)

  Moyle, Roland

  Woof, Robert

  Ford, Ben

  Murray, Rt Hon Ronald King

  Wrigglesworth, Ian

  Forrester John

  Newens, Stanley

  Fowler, Gerald (The Wrekin)

  Noble, Mike

  TELLERS FOR THE NOES:

  Fraser, John (Lambeth, N'w'd)

  Oakes, Gordon

  Mr. Arnold Shaw and

  George, Bruce

  O'Halloran, Michael

  Mrs Millie Miller.

  Question accordingly agreed to.
  Ordered,
  That it be an Instruction to the Committee on the Bill to leave out Clause 6.

  HOUSING (AMENDMENT) (SCOTLAND) BILL
  Order for Second Reading read.
  Motion made, and Question put forthwith pursuant to Standing Order No. 67 (Public Bills relating exclusively to Scotland), That the Bill be committed to
  a Scottish Standing Committee.—[Mr. Hugh D. Brown.]
  Question agreed to.

  HOUSING (AMENDMENT) (SCOTLAND) [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to amend subsection (1) of section 25 of the Housing (Financial Provisions)

  1445
  (Scotland) Act 1968, it is expedient to authorise—

  (1) any increase not exceeding £210 million in the sums which may be issued out of the National Loans Fund by virtue of the said section 25 which is attributable to the provisions of the said Act of the present Session;

  (2) the payment out of moneys provided by Parliament of any increase in the sums
  1446
  payable out of moneys so provided under Part I of the Housing (Financial Provisions) (Scotland) Act 1972 which is so attribuable, and

  (3) the payment into the National Loans Fund of any increase in the sums received by the Secretary of State by virtue of the said section 25 which is so attributable.—[Mr. Hugh D. Brown.]

  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dormand.]

  ITINERANTS (WEST MIDLANDS)
  10.12 p.m.
  Dr. Colin Phipps: I had hoped that the numerous hon. Members in evening dress had hurried back from their dinner parties to listen to the subject of this Adjournment debate, but the rapidity with which they are deserting the Chamber suggests that they were here for a more underhand purpose. [Inter ruption.]
  Mr. Deputy Speaker (Sir Myer Galpern): Order. Will hon. Members leave the Chamber quietly?
  Dr. Phipps: Tonight's Adjournment debate concerns itinerants in the West Midlands. It might be useful if I were to begin by defining what is generally understood in the West Midlands by the term "itinerants". In West Midlands parlance, "itinerant" means a family living in a caravan moving from place to place in a nomadic way. It is not synonymous with the more familiar terms "gipsy" and "tinker". Indeed I understand that the number of genuine gipsies left in the United Kingdom is very small and that most of them are so busily occupied in casting horoscopes for ladies' magazines that they do not have the opportunity to move about in the way they did in the past. I take the genuine tinkers to be itinerant families engaged in the practice of mending pots and pans and so on. These are also now extremely rare.
  The modern itinerants are essentially a post-Second World War phenomenon and have arisen largely through the housing shortage. These are ordinary families who have taken to living in caravans, moving around the country, normally within one specified area, along one specified route with which they are familiar, and following in general the practice of totting or of scrap merchants. They gather bits and pieces of metal from different areas and sell them, so that the bits and pieces
  1448
  become part of the scrap metal going into our metalliferous industry. The itinerants probably provide a rather important and useful service in this respect.
  The problem with itinerants, as it relates to the West Midlands—and also, I believe, to many other of the larger conurbations, where most of the scrap metal is obtained—is that they have no permanent place in which to park their caravans. As they move around on their essentially nomadic circuit they stop at any convenient place, and within the urban areas this can provide very serious problems for the people living near them.
  The principal problems that arise are very well understood by hon. Members. If a family in a caravan, or possibly even a group of caravans, stops at an unauthorised site, usually waste land in the middle of an urban area, that land is not supplied with the normal basic facilities of sewerage, waste disposal, electricity, gas and so on. The itinerants are, after all, families who are no different from other families, and they produce the same type of waste and the same type of refuse as any normal family. The difference is that they have nowhere to put it. Quite naturally, therefore, the site on which they settle becomes extremely unsightly and in many cases odious to the people who live near it. From this arises the very general anathema with which itinerants are regarded by the population.
  That is not surprising. It is to be expected. Most people would not welcome a family living in a caravan moving on to land next door to them, with no type of sewerage or waste disposal facilities and living a nomadic life which is essentially different from their own.
  I am particularly concerned with the solution to the problem as it affects the West Midlands, in which my constituency lies, but I do not for one moment believe that it is a specifically West Midlands problem. The same problem exists in all our major conurbations, and I hope that what I have to say will have some relevance to the rest of our major conurbations.

  1449
  Within the West Midlands, at the last count it was found that there were about 350 itinerant families moving around the whole of the districts in the West Midlands, on a fairly well regulated course. The fact that they move around means that any particular area may be visited within one year by all 350 itinerant families. Indeed, any area may be visited by them twice or three times. This may, and does, give the impression that there are many more itinerants than is actually the case. When a family has an itinerant family living next to it for a week or a fortnight, it sticks in the memory, even though it was only for a week or a fortnight out of 52 weeks in the year that the itinerant family was there. Therefore, the impression grows that the numbers are very much larger than is the case.
  The solution to this problem cannot be accomplished overnight. As most people of good will appreciate, it involves the settlement of itinerant families and their children going to normal schools so that they become part of the community and pay their rent, rates and taxes. One hears continual complaints that these are families which do not accept the normal costs within the society in which they live and that, for instance, they do not pay road tax on their cars, income tax and so on. In many cases this is probably true, and it causes great resentment not only among my constituents but to people throughout the country.
  Until the itinerants are settled, the possibility of their behaving in the way in which most members of society expect them to behave is remote, because there is no sanction which we can employ against them. It is more expensive to put the head of a family in prison and to support his wife and children than it is to let him continue to live in the way in which he is currently living.
  This is a problem of which my constituency, with the Dudley District Council, has had considerable experience, and I am pleased to say that people in the locality take a very humane and constructive approach to its solution.
  According to the last count, there are supposed to be 350 families of itinerants
  1450
  within the West Midlands County Council area. At present there are permanent berths on nine sites for 115 of these families. That means that 235 itinerant families in the West Midlands are still without any form of permanent berths.
  Following previous legislation, a district council providing a permanent site with 15 berths was able to become a designated area under the Act, which enabled that district to move on any itinerants who came into the area above the number of the 15 families already using the berths. Wolverhampton is a case in point. It is a district which has that designation—
  Mr. J. W. Rooker: And Birmingham.
  Dr. Phipps: As my hon. Friend points out, there are others. This means that Wolverhampton, for example, is able to move on its itinerants to Dudley, to Walsall, to West Bromwich or to where-ever there is an area which it not designated. Dudley has a permanent site which is in my own constituency, at Oak Lane in Kingswinford, with 15 berths. However, as a result of the difficulty which arose from districts moving itinerants on, Dudley is not designated because designation has stopped. Dudley is therefore unable to move on its itinerants.
  I am glad to say that Dudley does not take the view that moving them on is the only sensible solution. A district can move them on and on without any kind of solution ever being found for the problem. The position of the Dudley District Council, which I support, is that the solution to the problem lies in all the districts in the West Midlands County Council area taking their share of the burden. Each district should provide sufficient permanent sites for all the 350 current itinerant families. On average, this would mean each of the West Midlands districts providing three sites with from 10 to 15 berths. That is not an exceptional number, and there is no doubt that it would greatly ease, if not solve, the problem.
  We have found general acceptance for our own site at Oak Lane. There is

  1451
  always an initial outcry about the situation of a site. People do not like a site of this kind near them. However, if they visited the permanent sites which have been established in Dudley, Wolverhampton and other areas they would find that there is general acceptance of those sites. In my constituency there was considerable uproar prior to the development of the site. Since it was first occupied, not one complaint has reached me. I have not had a verbal or written complaint about the site since it was occupied.
  The problem of providing permanent sites—I believe that they must be permanent and not temporary, which would not be a solution—is the cost. To provide 15 berths at Oak Lane cost Dudley District Council £110,000. I have the balance sheet here. It cost that amount of money because it was done to a standard which allowed a complete facility of every kind to be available to the itinerants. Clearly, in present-day conditions, it would be extremely difficult for most of the district councils to find that sort of money to provide sites and berths for itinerants. My council suggests that we begin—and I have had correspondence with the Department, which supports the idea—to develop permanent sites, carefully located, which would not be to the very highest standards but which would be developed over a period until the standards were as good as those already provided by the current permanent sites.
  In Scotland, 75 per cent, of the cost of the provision of sites is provided by the Government, whereas in England and Wales that amount of money is not provided. Quite properly, my council wants to know why grants of this size cannot be offered also to English and Welsh councils. Even if they are not offered, however, one of the things I would like to press strongly is that we in the West Midlands and other areas are currently engaged in what is called a job-creation programme. In my constituency the programme is being used usefully to clear derelict sites—and the Black Country is famous for its large number of derelict sites. That is a valuable way of using the money, but it could usefully be provided also for the provision of sites for itinerants. To what more creative use could one put the money than by pro-
  1452
  viding sites for itinerants and work at the same time?
  My Council asks that the Government should take statutory powers if necessary. If the Government are unable to do so, it suggests that they use all the powers they have to impress on the West Midlands County Council area that every single district council must bear its share of providing sites. It would be useless for Dudley district to provide two more permanent sites if the whole of the rest of the area provided none. Dudley district would then merely become the magnet for itinerants, and that is what no one wants.
  If the problem is to be solved, it must be solved on a West Midlands-wide basis, also taking into account the county administrations around the West Midlands. I would like see the Government asking the West Midlands to ensure that each district provides its number of sites.
  There are certain districts—Solihull is one—which refuse to provide sites. I shall not go into the reasons for their reluctance, but this dog-in-the-manger attitude will result in no sites being provided. We need pressure to be put on all the districts to provide sites, each district taking its share and the Government playing their part. If we do so, I believe that we can begin to solve what is an increasingly difficult problem which, if we do not solve it now, will become a flood of itinerants moving around the West Midlands and other conurbations within the next five years.
  10.30 p.m.
  The Under-Secretary of State for the Environment (Mr. Gordon Oakes): I am grateful to my hon. Friend the Member for Dudley, West (Dr. Phipps) for raising the very difficult problems of the settling of itinerants in the West Midlands area.
  I think it is very indicative that this is the second time tonight that the problems of itinerants in metropolitan areas have been raised. I listened with great interest to the remarks made earlier on Clause 12 of the Greater London Council (General Powers) Bill. Moreover, this is the second time in just a few weeks that I have answered an Adjournment debate on this subject. I hope, therefore, that my hon. Friend will forgive me if I make

  1453
  some general remarks on the current statutory position on gipsies, and current action being instituted by the Government, before I turn to the specific problems of the West Midlands which my hon. Friend so vividly outlined.
  When I replied to the hon. Members for Streatham (Mr. Shelton) and Ealing, Acton (Sir G. Young) in January, I said that the problems of gipsies in urban areas applied both to London and to other metropolitan areas. We heard then, and have heard tonight, what some of these problems are. My hon. Friend engaged in some semantics but when I refer to gipsies I mean, in the words of the statute, persons of nomadic habit of life, whatever their race or origin.
  What we must accept is that such people are with us now; they are likely to remain with us; and, indeed, their numbers may even increase. More and more they are coming to urban areas, where they can carry on the livelihoods, particularly scrap metal dealing, with which they are now associated. In the jargon of planners they are becoming "urbanised", although I for one would dispute that term.
  Like most people in this country, I would understand "urbanised" as meaning that one has an urban or a settled way of life, with a home, a job, and children at school—all the normal appurtenances of normal city life. In that sense of the term I do not think we can talk of gipsies as "urbanised". I prefer to say that gipsies are increasingly coming to live in, and move around in, urban areas where they have not traditionally pursued their nomadic way of life. What we are looking at tonight are the problems to which that gives rise and which have been described by my hon. Friend.
  I would like briefly to describe the statutory framework within which we operate, the Caravan Sites Act 1968. My Department has been aware for some time that the 1968 Act is not working as intended. This Act, which came into operation on 1st April 1970, imposed a duty on local authorities to provide caravan sites in their areas. But not nearly enough sites are being provided. This means that unauthorised encampments continue to proliferate on as large a scale as ever. In the face of local hostility,
  1454
  many authorities find it easier to follow the time-honoured method of moving gipsies on preferably into the area of another authority, rather than try to solve the problem.
  However, being moved on from one authority to another does not make the gipsies disappear—quite the reverse. Their numbers have increased substantially over the last few years. The movement of gipsies from one unauthorised encampment to another without their being offered any alternative stopping place which has even basic sanitary or refuse clearance facilities simply ensures that the maximum amount of offence is caused to the maximum number of local residents.
  Today, nearly six years after the Act came into effect, about two-thirds of a gipsy population of perhaps 6,000 families cannot be accommodated on official sites. Wherever these gipsies park their caravans, they will be breaking the law.
  Over the years the problem of gipsies has changed. The picture-book image of gipsies living a rural Romany existence in brightly coloured caravans is now totally out of date. Like everyone else, gipsies have become more urbanised and industrialised, and they have been moving to the heavily industrialised areas like the West Midlands.
  Perhaps the scale on which the pattern of settlement was changing may not have been fully appreciated in 1968. Although it is only a few years since the 1968 Act came into operation, we must now look at how it is working. I do not think it is altogether working well. When a local authority tries to comply with the Act, it may well find itself in a difficult position because those around it have failed to fulfil their duties under the Act. Its willingness to cater for gipsies may cause it considerable problems with its electorate, perhaps exacerbated as itinerants are attracted to the site, because it is the only one in the area, and demands are made on it beyond those it was intended to meet.
  I think that the general picture is unsatisfactory, for all concerned—for gipsies, as their traditional pattern of travel alters and they move into areas which can make provision for them only with great difficulty, and where their way of life is more

  1455
  markedly out of tune with their surroundings. It is unsatisfactory for local authorities and for their electorates. Both are concerned at the demands made by these people, at their impact on the accustomed urban environment and by the financial and administrative demands which making provision for gipsies entails. There is prejudice and distrust on both sides.
  I would urge nomadic people that, just as in ordinary common courtesy one has to be much more careful in someone else's home than in one's own, so they and those who advise them should remember that the best and most suitable way in which gipsy families can help themselves and secure acceptance in the community is by demonstrating good behaviour in areas not accustomed to them.
  Given this unsatisfactory situation under the 1968 Act, early in 1974 my Department carried out an internal review of the Act, as a consequence of which a departmental advisory officer was appointed. We have now decided that a further, more searching, review is needed, and, as my right hon. Friend the Minister for Planning and Local Government announced last week, he has asked Mr. John Cripps, Chairman of the Countryside Commission for England and Wales, to carry out a study of the effectiveness of the arrangements to secure adequate accommodation for gipsies in England and Wales.
  Mr. Cripps has been given the following terms of reference:
  "To consider the effectiveness of the arrangements to secure adequate accommodation for gipsies in England and Wales, with special reference to:

  (a) the financial and administrative arrangements for the implementation of the Act; and

  (b) the provision for the exemption of local authorities and the designation of their area; and to report."

  I am sure my hon. Friend will join me in welcoming that review, in thanking Mr. Cripps for taking it on, and in looking forward to his report.
  I have dealt somewhat at length with the broad picture. I now turn to the specific problems of the West Midlands described by my hon. Friend. The Department's view at present is that the question of site provision in such areas should be looked at on a regional or
  1456
  sub-regional rather than a county or district level. The very nature of the gipsies' nomadic way of life—my hon. Friend used the word "itinerants"—obviously means that they cannot clearly be identified as belonging to one county or another, let alone one district or another. There is need for a strategy of site provision based on areas which have more regard to the pattern of gipsy encampments and the movement habits of gipsies than to local authority boundaries.
  The Department has therefore initiated a series of meetings with county and district councils on a regional basis with a view to evolving such strategies. A meeting with West Midlands authorities took place on 30th July last year. Since then there have been two meetings with Yorkshire and Humberside authorities, and further meetings are planned in the North-West and Northern Regions.
  The need to think in terms of a regional strategy is especially clear in the West Midlands. Not only has the region as a whole a large gipsy population, but the largest concentration is in the metropolitan county, whose duty of site provision under the 1968 Act is limited to the accommodation of 15 caravans in each district. There is a good reason for this limitation, in so far as it acknowledges the great pressures on land in urban areas.
  Therefore, while it may be possible for the West Midlands County Council to do more than the bare statutory minimum, it would probably be unreasonable to expect it to accommodate all the gipsies at present frequenting its area. If the surrounding counties are reluctant to accept that they have a part to play here, they should bear in mind that the large concentration of gipsies in the metropolitan county may be due not merely to the means of livelihood which the conurbation offers but to the lack of official sites in the surrounding counties.
  Following the July meeting a West Midlands regional working party was set up, with the task of reporting on a regional strategy of site provision. The working party has already met three times. It consists of representatives from the five county council departments, including the advisory officer and with representatives of the metropolitan districts attending as required.

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  The working party has, I understand, addressed itself so far mainly to establishing the facts of the situation—the number of gipsies involved, on which statistics are woefully inadequate, and the number and type of sites needed. I would not wish to seek to influence its conclusions, which must be based on its knowledge of the local situation. I think, however, because it is often the subject of misunderstanding, that it might be useful if I were to take this opportunity to make clear my Department's attitude in the matter of site standards.
  The Department has never laid down any mandatory requirements regarding the standard of facilities to be provided on gipsy caravan sites—or, for that matter, on any other type of caravan site. Model standards were certainly prescribed in 1960, to which local authorities are required to have regard, but these were never intended to be applied rigidly and in any case they apply only to permanent residential and regular holiday sites. Standards for other types of site, including gipsy sites, have always been a matter for the discretion of local authorities.
  In fact, it has recently become apparent that in many cases something well short of the 1960 model standards may best meet the needs of the gipsies themselves. A report on a two-year research project by the Centre for Environmental Studies suggests that types of gipsy sites should range from the present almost standard 10-to-20 pitch local authority sites to small plots and even temporary stopping places with, at the most, minimal facilities such as sanitation, water supply and refuse collection.
  The need for a flexible approach by authorities to the matter of site standards
  1458
  was one of the main points stressed by the Department at the West Midlands regional meeting in July, and has subsequently been elaborated by my Department's representatives on the working party.
  Not only may the needs of the gipsies themselves be best met, at least for the short term, by the provision of a lower standard of facilities than has been customary in the past, but current restraints on local authority spending clearly dictate a similar course, as my hon. Friend suggested.
  I would not for one moment seek to minimise the seriousness of the situation in the West Midlands which my hon. Friend has described. I have tried to show that the Department feels real concern about the situation in such areas and that it has positive ideas for dealing with it. Indeed, we have chosen the West Midlands as the first region in which to seek to put these ideas into practice, and I have been reasonably encouraged so far by the response to the Department's initiatives.
  It is true that there are black spots—authorities both inside and outside the conurbation which exacerbate the situation by continually evicting gipsies when there is no better place for them to go. On the other hand, there is evidence that some authorities are taking con structive—
  The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, prsant to the Standing Order.
  Adjourned at eighteen minutes to Eleven o'clock.

  Second Reading Committee
  Wednesday 3rd March 1976
  The Committee consisted of the following Members:
  Mr. R. Bonner Pink (in the Chair)
  Callaghan, Mr. Jim (Middleton and Prestwich)
  Cook, Mr. Robin F. (Edinburgh, Central)
  Davis, Mr. Clinton (Under-Secretary of State for Trade)
  Dormand, Mr. J. D. (Easington)
  Dunnett, Mr. Jack (Nottingham, East)
  Evans, Mr. Ioan (Aberdare)
  Ewing, Mrs. Winifred (Moray and Nairn)
  Fletcher-Cooke, Mr. Charles (Darwen)
  Ford, Mr. Ben (Bradford, North)
  Gould, Mr. Bryan (Southampton, Test)
  Higgins, Mr. Terence (Worthing)
  McCrindle, Mr. R. A. (Brentwood and Ongar)
  Percival, Mr. Ian (Southport)
  Renton, Mr. Tim (Mid-Sussex)
  Shersby, Mr. Michael (Uxbridge)
  Stradling-Thomas, Mr. John (Monmouth)
  Woodall, Mr. Alec (Hemsworth)

  INSOLVENCY BILL [Lords]
  10.30 a.m.
  The Under-Secretary of State for Trade (Mr. Clinton Davis): I beg to move,
  That the Chairman do now report to the House that the Committee recommend that the Insolvency Bill [Lords] ought to be read a Second time.
  I ought to say at the outset that, regrettably, I propose to take some little time in dealing with the Bill because it is a complex matter although it covers only 10 clauses. Before coming to the clauses, I want to say something about the general background against which the Bill was introduced in the Lords and is now being considered in this Second Reading Committee.
  The present system of bankruptcy law in England and Wales was established in 1883. In the meantime three different committees have considered the legislation. The Bankruptcy Acts of 1914 and 1926 followed directly from two of the reports. The third committee, the Blagden Committee, reported in 1957. It found that bankruptcy law was generally satisfactory and well suited to
  1460
  its purpose. It did, however, suggest amendments designed to remove as far as possible certain administrative difficulties and irregularities in bankruptcy law. Unfortunately, no Government since 1957 were able to find time to introduce the legislation suggested by Blagden—a sad but hardly unprecedented reward for a hard-working committee of this character.
  I am conscious of the need for more far-reaching changes in insolvency law than is proposed in this Bill—although I hope that I shall be able to satisfy the Committee that changes which enactment of this Bill would secure would be timely and significant. It is right that I should inform the Committee that the Department has started on a review to achieve this wider objective. There can be no doubt that this is a major and daunting task. It is a task which must take into account our EEC commitments and, in particular, the draft EEC Bankruptcy Convention, at present under general consideration by the member States.

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  The Bill is concerned with bankruptcy, winding-up of companies and also sequestration in Scotland. Its most important object is to bring certain monetary limits into line with present-day values. It is expected that, as a result, the workload of the Insolvency Service will be brought more into line with available resources. The Bill is also expected to result in a reduction of about 100 to 150 staff over the next three years, leading to a total saving of up to £750,000 a year. As I have already indicated, effect is also given in the Bill to a number of other changes in insolvency law, which are long overdue.
  In Scottish law, the term "bankruptcy" has connotations shrouded fairly heavily in mystery for us poor Sassenachs. It can mean insolvency, notour bankruptcy, as well as sequestration. I had hoped that we might have the benefit of certain views this morning from a Scottish National Party Member of Parliament, namely the hon. Lady the Member for Moray and Nairn (Mrs. Ewing), but she must be talking about fishing. Perhaps I shall get into trouble for having said that. I am informed that the term "notour bankruptcy" has nothing to do with the denial of a right of free passage, but it defines the condition of one who had retired to the sanctuary of the Abbey of Holyrood for the purpose of avoiding imprisonment for debt. His insolvency, I am told by the Lord Chancellor, thereby became "notour" or, as we would put it, notorious. I understand that there are no tours to the Abbey now available.
  The basis of the present law in Scotland lies in the Bankruptcy (Scotland) Act 1913. In November 1968 the Scottish Law Commission appointed a working party under Lord Kilbrandon to examine the relevant law in Scotland. It concluded that the 1913 Act had operated satisfactorily but suggested certain simplifications and improvements.
  Although, therefore, there is some similarity between bankruptcy in England and Wales and sequestration in Scotland, there are significant differences both in law and practice but, in so far as the provisions of this Bill are appropriate for Scotland, they will take effect in Scotland as well as in England and Wales.
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  Bankruptcy refers only to individuals and partnerships. Insolvent companies may be compulsorily wound up under the provisions of the Companies Act 1948. In December 1973 our predecessors introduced into the House of Lords a Companies Bill to implement a number of the recommendations of the Jenkins Committee, which reviewed the 1948 Act and reported in 1962. Because the present Government wished to undertake a wider-ranging review of company law, that Bill was not proceeded with. However, some of the measures—which I hope will be regarded as relatively non-controversial—contained in that Bill have now been included in this Insolvency Bill. Another Bill was published today—the Companies (No. 2) Bill, which will also deal with certain matters extracted from the 1973 Bill, although it has certain novel features.
  Unhappily the work of the Insolvency Service Division has been growing for a number of years, quite apart from the difficulties thrown up by the recession that we are now undergoing. In substantial part, this is due to the erosion in real value of the monetary limits laid down by the relevant statutes. We must try to adjust this work load to the specialised staff resources which are available. The most appropriate way of doing this is to restore the value of these limits.
  An instance of the need for this change is afforded by the monetary limit for the minimum debt required to found a creditor's petition in bankruptcy. The limit, at present £50, was fixed before 1914. It is completely out of date. Today, even though he may be owed this comparatively trivial sum, a creditor can institute bankruptcy proceedings against his debtor. I hope that the increase of this, and other monetary limits, will lead to a considerable reduction in the number of more trivial domestic and consumer credit cases which give rise to bankruptcy proceedings. These cases do not usually involve the general public or a wide circle of trade creditors, there are few or no assets available to discharge costs, and the proceedings, which necessarily involve a substantial number of skilled officials, are an unnecessary drain on the public purse.
  Some of the other major results of the restoration of the value of limits will be

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  the raising of the amount of wages or salary allowed as a preferential debt to employees; an increase in the amount of necessary goods a bankrupt may retain, and in the minimum amount necessary to constitute the offence of obtaining credit whilst an undischarged bankrupt.
  The position of employees so far as arrears of wages or salary is concerned will, of course, be improved when the relevant sections of the Employment Protection Act 1975 come into operation on 20th April this year. They provide that, in the event of an employer becoming insolvent, employees will receive early payment out of the Redundancy Fund of up to eight weeks' arrears of wages, payment in lieu of notice, holiday pay and so on, up to a total not exceeding £80 per week. The Secretary of State for Employment will then stand in the shoes of the employees in respect of such moneys paid out and will be entitled to claim in the bankruptcy or liquidation.
  There is a similar right of subrogation provided in the Companies Act 1948 for any person advancing moneys to pay the wages of company employees. It has been suggested that by increasing the monetary limit for preferential wages, we are merely assisting these lenders to recover moneys advanced, to the detriment of unsecured creditors. There are, of course, several categories of preferential debts, all of which rank equally between themselves, and we take the view that it would be undesirable to make an exception of one of them, that is, wages, by not fully restoring the value of the present monetary limit. I certainly consider, however, that the whole system of preferential debt is in need of review. This will be considered during the wider-ranging review of insolvency law which we are now undertaking.
  Mr. Terence Higgins: Could the Minister clarify one point? He said that it would not be desirable to give one particular part, within the group presumably, an advantage by not raising the limit to the full amount—presumably reflecting inflation. Should that read "not" or should he have said "by not making the full allowance"? I was not quite clear on that point.
  Mr. Davis: I thought I said that it would be undesirable to make an exception of one of them by not fully restoring
  1464
  the value of the present monetary limit. Is that the point about which the hon. Gentleman is asking?
  Mr. Higgins: Does that mean that it is proposed fully to restore the monetary limit? If so, it seems to be inconsistent with the line which the Government are taking on the main limit—the £300 limit as against £600, which would be the full amount.
  Mr. Davis: I do not altogether agree with the hon. Gentleman, but I shall certainly consider what he is saying. Perhaps he would like to develop the point later.
  May I say that we have not only set ourselves objectives for this Bill within the reasons for its introduction which I have already given, but we have taken this opportunity to effect urgently needed reforms of insolvency law, which will appear as I develop the purposes of the Bill and its clauses in detail.
  I can best summarise the Bill in this way. First, it will cause the monetary limits relating to bankruptcy and winding-up to be brought up to date, and will empower the Secretary of State to increase them further by regulation. Second, it will simplify certain statutory accounting and auditing procedures, and bring them into line with modern practices. Third, it will simplify the procedure for a creditor on submitting his claim in bankruptcy and winding-up. Fourth, in certain circumstances it will enable the court to dispense with the public examination of a debtor in bankruptcy. Fifth, it will provide a special procedure for speeding up discharges from bankruptcy. This will be additional to the present discharge procedure. Sixth, it will enable the court to disqualify a person from acting as a director or manager of a company where his conduct justifies that restraint. Finally, it will extend and strengthen the administration order procedure in the county court.
  The increase in the monetary limits, the simplified procedure for the lodging of creditors' claims, and the additional power to disqualify a person from acting as a director or manager of a company will apply also to Scotland.
  I turn now to the various clauses in more detail. Clause 1 and Schedule 1

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  broadly restore the real value of a number of monetary limits which they had when fixed in 1914. They are arrived at, generally speaking, by multiplying the 1914 figure by 12. This represents the measure of inflation, regrettably, to which we have been subjected since then. If the limits were fixed or amended after 1914, the new amount is intended to correspond with the real value which they had at that later date. For example, the maximum amount for which a worker can claim preferential rights in bankruptcy and winding-up for arrears of wages or salary was increased in 1947 to £200. The figure of £800 in column 3 of Schedule 1 for this limit restores the value to what it was in 1947 with a multiplier of four. I believe that that may be the point to which the hon. Gentleman was alluding.
  I must, however, refer to one important exception to this general rule. This concerns the minimum debt required to support a bankruptcy petition by a creditor. If we were to restore the 1914 value of the limit it would require an increase from the present sum of £50 to £600. We consider that in this case this would represent far too large an increase. The wage earner or self-employed person now has far wider opportunities for obtaining credit, and, sadly, the self-employed person is much more subject to becoming indebted to the revenue-collecting Departments of the Crown for taxes and social security contributions. I am advised, therefore, that an increase above £300 would place an undue restriction on bankruptcy proceedings as the best means of collecting fairly substantial debts. However, I propose to keep this position under close scrutiny.
  Clause 1 also gives the Secretary of State power further to increase the monetary limits by regulations. This will enable them to be kept up to date in future without the need for primary legislation. Clauses 2 and 3 bring existing accounting procedures up to date and provide for a more economical and efficient service.
  Every trustee in bankruptcy and liquidator of a company being wound up by the court is obliged to send an account of his receipts and payments to the Department of Trade at least twice a year. At
  1466
  present each individual account has to be audited in detail. At present trustees in bankruptcy and company liquidators must pay all moneys received by them into special accounts kept by the Secretary of State at the Bank of England. Bankruptcy moneys go into the Bankruptcy Estates Account and liquidation moneys go into the Companies Liquidation Account.
  Under Clauses 2 and 3 these two procedures will be changed. The result is that, under Clause 2, the audit of accounts of trustees in bankruptcy and liquidators will be brought into line with modern auditing practice. Under Clause 3 the two special bank accounts at the Bank of England will be replaced by a single account called "The Insolvency Services Account". This will not only simplify the position but enable the day-to-day balances which are not immediately required to be used more efficiently.
  Clause 4 will have the wholly desirable effect of substantially reducing the formalities required to be observed and the expenses incurred by a creditor in submitting his claim in bankruptcy, sequestration or company liquidation. At present, creditors must prove their debts by completing a complicated affidavit, which then has to be verified by formal affidavit. The clause will enable creditors to submit their claims on a simple form, without any requirement for it to be sworn, unless the circumstances are such that the Official Receiver or trustee requires an affidavit.
  I think that that is wholly desirable. I must declare my interest as a solicitor and commissioner for oaths. I hope that nobody will be obliged to undergo the appalling experience which I once had in getting an affidavit sworn. The poor lady concerned was trapped in a house by an aberrant landlord and I had to hoist the affidavit, the Bible and a pen up to her in a bucket which she managed to draw to her window. I then rehearsed the oath to her from the ground. She restored the bucket and its contents to me, and we were able to go off to the judge in chambers. I do not know whether anything of that nature would occur in these circumstances, but we are at least making efforts to prevent such a thing.
  Under Clause 5, on an application by the Official Receiver, the court will be

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  empowered to dispense with the public examination of a debtor in bankruptcy. At present every debtor must undergo public examination unless he is excused on the grounds of unfitness. In many cases, however, the public examination is of little concern to the public or to the creditors and does not justify a formal court hearing. It is in such cases that the official receiver might think it appropriate to make an application to dispense with the public examinaiton. Guidance, however, will be given to ensure that no application will be made unless, first, the debtor has already made a full disclosure of his affairs to the satisfaction of the official receiver and, second, the failure does not affect a wide circle of trade creditors and, third, the failure is of little public interest.
  Mr. Ian Percival: I am sure we are very glad that the hon. Gentleman has added that part of the words of his noble Friend the Lord Chancellor, because it is the beginning of some indication as to how the courts are to exercise this power. Could the hon. Gentleman tell us now—so that we can discuss the matter—what is meant by "guidance will be given"? Will it be given by means of writing into the Bill the criteria which are to be observed, or in some other way? If it is to be given in some other way, how will it be given?
  Mr. Davis: My noble Friend has the power, as I understand it, to make additions to the Bankruptcy Rules. This he proposes to do. It is perfectly correct that this matter—which has caused considerable controversy in the Press, which has some expertise on these matters, and among the bodies concerned—should be explored in detail by this Committee, and, no doubt, in greater detail at a later stage.
  Such an application would be made ex parte to the Registrar in Chambers not less than 21 days before the date fixed for the public examination. If the court makes an order, a copy will be served on the debtor and notice given to the creditors not less than seven days before the date fixed for the public examination. I wish to underline at this stage the fact that an order dispensing with the public examination will be capable of review by the court on motion pursuant to Section 108 of the Bankruptcy Act 1914.
  Clause 6 provides that adjudication in bankruptcy should be reviewed by the court after five years for the purpose of considering whether the bankrupt should then be given a discharge. I must emphasise that the new review procedure is additional to the existing discharge procedures. A bankrupt would still be able to apply for his discharge, but, if he has not done so within the five years after adjudication, the new review procedure will come into operation.
  There can be little doubt that the present law relating to discharge is defective in that it is for the bankrupt himself to apply to the court if he wishes to be discharged. Many never trouble to do so. In consequence there is an increasing population of undischarged bankrupts, which we would estimate at upwards of 60,000, perhaps as many as 100,000, at the risk of acting, perhaps inadvertently, in breach of bankruptcy laws. Under the new review procedure, all bankruptcies will be considered by the court with a view to discharging the bankrupt, without any need for any application on his part. I should expect that, since five years will have elapsed in every case since the adjudication order, the majority of bankrupts will be granted their discharge.
  Mr. Higgins:
  "I must mention that the new review procedure will not apply to any bankruptcy occurring more than five years before the date when this clause comes into force."—[Official Report, House of Lords, 4th December 1975; Vol. 366, c. 763.]
  That is the next section of the Lord Chancellor's speech, which the hon. Gentleman is reading out. Perhaps I can save the Minister some time. His speech is virtually word for word what the Lord Chancellor said. I wonder whether there is much point—since hon. Members will have read the Lord Chancellor's speech—in repeating exactly what he said, rather than summarising it.
  Mr. Davis: I have taken a deal of trouble to consider the Lord Chancellor's speech. I have introduced a good deal of new material into mine, to which the hon. Gentleman could not have been listening while he was talking to his hon. and learned Friend the Member for Southport (Mr. Percival). It is interesting that the hon. Gentleman is reading my noble Friend's speech. However, it is

  1469
  necessary, for the benefit of the Committee, that not only should I cover the ground covered in another place but in certain respects I should add to some of the matters to which my noble Friend referred. The hon. Gentleman will have to put up with what I have to say.
  I have already said that the Insolvency Service is under some difficulties. Clearly, it does not have the ability or resources to deal with all the undischarged bankrupts—60,000 or even 100,000 of them according to estimates. Accordingly, the new review procedure will not apply to any bankruptcy occurring more than five years before the date when this clause comes into force.
  Clause 7 deals with the disqualification of directors of insolvent companies and contains, I think, a useful addition. Section 188 of the Companies Act 1948 gives the court powers to restrain certain individuals who have been concerned in the management of companies from acting in this way for a period of up to five years. The clause introduces an additional ground upon which the court may make a disqualification order, namely, the conduct of the person concerned, in his dealings as a director of two or more insolvent companies, which have gone into liquidation within a period of five years.
  I know that this has caused the Law Society some concern and, no doubt, we shall have the benefit of being able to explore the points which it has made, and our rebuttal of them. We informed it well in advance of this debate and of our objections to the points which it had made. We shall have an opportunity of going into that in more detail in the Committee.
  Where the court considers the person's conduct as a director of these companies is such as to make him unfit to manage a company, it may disqualify him for a period of up to five years. I hope that the Committee will agree that this provision will do something to curtail the activities of those fly-by-night operators who attempt to hoax or those who exercise insufficient responsibility towards the public in one area or another and seek to preserve the advantages of limited liability for their less than worthy operations. It may be that this provision ought to be looked at in conjunction with a new provision which
  1470
  appears in the Companies (No. 2) Bill to which I have already referred and which will place restrictions upon directors who are in default of their obligations under the Companies Act.
  The clause provides for 10 days' notice of an intention to apply for a disqualification order. This is similar to the provisions of Section 188 of the Companies Act 1948, but under the winding-up rules the person against whom any disqualification order is sought is allowed a further eight days before the hearing of the application and such time thereafter as the court considers necessary for the preparation of a defence. At this point I want to stress another matter which concerned the Law Society and others. I make quite plain that it is intended that the normal rights of appeal will be available in respect of any order made under this clause.
  Cluases 8 and 9 both make amendments to the county court administration order procedure. The general effect of an administration order is to enable the settlement of a debtor's liabilities under the supervision of the court to be satisfactorily arranged. It debars a creditor who has obtained judgment in a county court from instituting further proceedings to enforce outstanding debts against a debtor.
  Usually the debtor is required to make regular payments into court. These are used to pay his debts by instalments, either fully or to such extent as the court may direct. Under the current law a county court may make an administration order against a judgment debtor if he applies for such an order and his total debts do not exceed £1,000, or where a creditor applies for an attachment of earnings order and the court considers that it would be more appropriate to make an administration order. Again in this case the debtor's total debts must not exceed £1,000.
  We consider that the present system is undermined by two essential weaknesses. First, as the earnings of a self-employed person may not be attached, the self-employed person cannot be the subject of an administration order unless he makes an application for an order of that kind. Accordingly, since the abolition of imprisonment for refusing to pay ordinary civil debts, the power of the court to enforce a judgment debt against

  1471
  a self-employed person has been considerably eroded. Clause 8 will strengthen the position by empowering the court of its own motion—I think that is important—to make an administration order against any judgment debtor if his total liabilities are not in excess of the prescribed amount.
  The exercise of the power of the court in this way may not, of course, accord with the wishes of the debtor or even the creditors, but to introduce a further stage requiring a creditor to apply to the court for an order that the debtor should provide a list of his creditors with a view to having an administration order made against him would involve extra expense and might defeat the purpose of the clause.
  I now turn to Clause 9. If a debtor fails—
  Mr. Higgins: How might that defeat the purpose of the clause? I am not quite clear.
  Mr. Davis: The hon. Gentleman is referring to Clause 8. The purpose of this clause is to simplify matters, to avoid additional and unnecessary expense and to reduce the work-load on the insolvency services. If we were to complicate the matter by proceeding in the way I outlined, we think that it would deflect substantially from the main purposes and objectives I have described.
  Mr. Higgins: That is not the main explanation which I understood the Minister to give. It was not purely a question of simplification, it was essentially a question of being able to make an administration order against the self-employed person. He then says that it would be wrong to have an arrangement whereby there could be an application for such an order, because that would frustrate the purpose of the clause. It seems a very hard rule if we are to be told that no such procedure should be allowed purely on grounds of simplification. It does not seem to me that doing so would, as the hon. Gentleman has just stated, defeat the object of the clause. It is true that it would make it rather more clumsy in operation, but the object of the clause would still be achieved.
  Mr. Davis: The hon. Gentleman may prefer a different course to be followed
  1472
  in this respect. I believe that simplification is vital to the whole procedure we are discussing. I am not sure whether the hon. Gentleman is suggesting that the Conservatives wish to pursue that course of action at this stage. If he is proposing to do that we shall be able to discuss the position at length at a later stage.
  I now turn to Clause 9. If a debtor fails to keep up his payments under an administration order the only sanction available to the court is to revoke the order thereby leaving creditors free to pursue their normal legal remedies. Clause 9 will give a much more effective sanction. In the event of default by the debtor, the court will be able to revoke the administration order and, instead, make a receiving order in bankruptcy against him. He will then be subject to normal bankruptcy proceedings.
  I have already said that we take the view that the insolvency law generally must be substantially reformed. I have referred to the wide-ranging review which we are undertaking. But that, unfortunately, is bound to take a great deal of time. I am advised that it could take as long as two or three years, particularly because of the EEC situation.
  I hope that the reasons I have given for introducing this stop-gap measure—which introduces some valuable reforms—will commend themselves to the Committee. We believe that the Bill provides the necessary legal provision for dealing urgently with certain matters. I believe it to be a useful Bill and I hope that the Committee will support it.
  11.6 a.m.
  Mr. Ian Percival: We welcome the Bill because we recognise that there is room for improvement in many aspects of the law relating to insolvency. So let me assure the Minister that we shall co operate fully with the Government to that end—to secure improvements.
  But I must say straightaway that we welcome the Bill more for what we hope can be made of it than by reason of any particular enthusiasm for its contents. That enthusiasm has not been heightened by the introduction we have just heard. I am glad, however, that the Minister has dealt in some detail with the clauses, that he has added a little to what his noble

  1473
  Friend said, and particularly that he has made some comments on the representations made by the Joint Committee of the Law Society and the Bar. I shall follow his example of dealing in a little detail with a considerable number of the clauses.
  First, however, I wish to make some general comments and voice what we consider to be some serious complaints about what has happened here. Of course, it is regrettable that we should be limited, in considering this important subject, to such a short and ill-assorted collection of provisions in an area where so much is to be done and where so many of the things which have to be done are inter-related and should be considered as a whole rather than piecemeal. What we are doing here is to consider piecemeal a ragbag of ill-assorted provisions.
  However, I recognise that at the moment it would not yet be possible for the Government to put forward the comprehensive measure that we would all like. Nevertheless, even if we must accept that we can deal only with a number of points in isolation, we are not happy about the choice of points. I shall say in a moment what we do not like, but let me say first that we also think that an opportunity is being lost to do several other isolated things which could well be done.
  I mention just a few. There has been a great deal of discussion about the time limit in Section 1(1)(g) of the 1914 Act. Here is an opportunity to consider that little item, which can be considered in isolation. We shall seek to satisfy the Committee that the Bill should be amended to deal with that.
  Another isolated point that could well be dealt with is Section 66 of the 1914 Act. Few would dispute the proposition that, since the cases of Garvin and Davis Investments, Section 66 has become not merely useless but a liability. I shall not enlarge on the reasons. No practitioner would quarrel with that proposition I think. Here is a golden opportunity to get rid of it. We shall be seeking to satisfy the Committee that that would be a useful purpose to fulfil in this Bill.
  Let me mention two other matters in the field of company law. I say at once that I do not know whether these are
  1474
  dealt with in the Companies Bill which appeared this morning or whether they would be better dealt with there. They are directly relevant to insolvency and, therefore, might best be dealt with in this Bill. They are a possible amendment of Section 270 of the Companies Act to make it a little less difficult to examine a director about the circumstances which have led up to the financial position, and possible amendments of Section 294 of the Companies Act to deal with the question of the qualifications which should be laid down for a liquidator and, also, to exclude from the categories of those who may be given that important task certain persons who may not be suitable for it.
  Mr. Clinton Davis: Is the hon. and learned Gentleman—whose Government, incidentally, failed significantly to legislate even upon the limited basis that we are now considering—really suggesting that the last matter—the qualifications of liquidators—is a simple subject which could readily be picked up in this limited Bill, which we are considering in this new Second Reading Committee procedure?
  Mr. Percival: Yes, indeed I am. In his somewhat ungracious introduction to chat remark, the Minister has overlooked the fact that we had a Bill before the House in 1973 which would have achieved a number of very sensible improvements, with which this Government have not continued.
  My answer to his question is "Yes". In Committee we shall hope to satisfy him that that is a far simpler matter than many others which this Bill undertakes. I express the hope that he will at least keep an open mind on the matter until we come to it.
  My purpose today is to make some general observations about what is and what is not included in the Bill and deliberately to say just sufficient about these matters so that they may receive consideration and thought before we get to them in Committee. One of the disadvantages of a Committee system is that sometimes we leave the subjects we intend to raise—either by way of new clauses or amendments to clauses—too late. Then the Minister is expected to be able to give a reply there and then off the cuff. This produces a situation in which things that might well prove useful if properly

  1475
  considered are not properly considered because the timing does not permit of it. I hope that the Minister will keep an open mind on these matters because they are important. I hope very much that they will receive the consideration they merit.
  The third general observation I want to make is this. We find it surprising and unsatisfactory that in such an assortment of provisions as are to be found in the Bill there should be found revolutionary proposals concerning two of the matters which are, perhaps, the most important ones of all those which call for consideration and which are central to the comprehensive review that so many people believe is overdue. I refer to Clauses 5 and 6—the provisions for reducing the number of public examinations and the provisions for increasing the number of discharges and facilitating them. It is further remarkable that there should be found in such a collection of provisions as this the revolutionary provision for the enforcement of judgments which appears in Clause 8.
  Lastly, on these general considerations, we find it particularly surprising and unsatisfactory that all of this, and the important provisions of Clause 1, should have been put forward without—so far as we are able to ascertain—any sort of consultation.
  I understand that in the past few days there have been consultations with members of the Justice Committee and the Joint Committee of the Law Society and the Bar Council. I recommend to the Minister that he should see these people himself. He has only to look at the names of those on the committees to realise that between them they must have more knowledge of the law and experience of the practice in this area than all the rest of us put together. They are ready and willing to put the benefit of that knowledge and experience at the disposal of the Government and the House.
  I am glad that, although at such a late hour, there have been some discussions with these people. I hope that they will prove to be but the first of what will be continuing discussions for the purpose of taking advantage of their expertise. The Opposition believe that such proposals should never be put before the House
  1476
  without consultations with the interests who can contribute so much to our discussions.
  Mr. Clinton Davis: The TUC.
  Mr. Percival: I do not know whether the TUC has been consulted. If not it must be the first time that it has not been consulted on anything.
  Mr. Clinton Davis: I was alluding to the failure of the Conservative Government, at certain highly relevant times in history, to consult properly or at all with the TUC.
  Mr. Percival: I am trying hard to keep this non-controversial so that the Committee may serve some useful purpose. The Minister has just risen from his sick bed. He sounds as if he feels a little bad-tempered. We have a great deal of sympathy with him but I hope that he can contain himself so that we may press on in a useful and constructive atmosphere.
  What I am saying about consultation is intended to be constructive. No Bill like this should be brought forward by any Government without consultation beforehand with those who are obviously interested and have something to con tribute—for instance, in the case of such a Bill as this, the chambers of trade and commerce, the Retail Consortium, the accountants, the liquidators' bodies and even the lawyers, because it is a matter of law.
  In this case it is even worse, because many of the things that we are discussing have been the subject of a great deal of consideration over recent years. I have referred briefly to the Committee of Justice. One could not imagine a committee with a more distinguished and knowledgeable membership. It produced a report in 1975 in which many of these matters were alluded to in detail. Recommendations were made. It is astonishing that these measures should have been put before the House—closely tied up as they are with matters discussed in that report—without any consultations with that committee. It must also have been well known to the Department and to the Government that there was a Joint Committee of the Law Society and the Bar Council which had also given considerable consideration to these matters.

  1477
  A further reason why it is so surprising that there has been no consultation is that as long ago as 30th July 1974 the Lord Chancellor, in reply to a Written Question, said:
  "The Department of Trade and the Lord Chancellor's Department are considering the question of discharge with a view to legislation when parliamentary time permits."—[Official Report, House of Lords, 30th July 1974; Vol. 353, c. 2300.]
  Apparently, the ideas behind Clause 6 have been under consideration since July 1974, yet there has been no consultation with anybody about them.
  I may already have said enough to indicate that the Bill is not quite the non-controversial measure that some may have thought it to be.
  Before I come to the clauses, I should like to say that I do not claim to be an expert in the law of insolvency, but I do claim that those of whose advice we have had the benefit, the members of the two committees I have mentioned, are those best able to give advice not merely on the law with which we are dealing but on the practical effects of it. I appreciate that many of the points to which I shall now refer might well be said to be Committee points, but I do not think that that is an objection to them. I want to say enough about the main Committee points now so that they will have had adequate consideration by the time we come to deal with them in Committee.
  The Lord Chancellor said that the main object of the Bill was to bring the monetary limits and the provisions set out in Schedule 1 into line with present-day values and, by so doing, to reduce the work load and public expenditure. We have heard that from the Minister again this morning, who said that it would save £750,000 a year. The first thing I want to ask him to do is to inquire into whether there would in fact be any net saving. Presumably it is expected that by raising the limit to £300 the number of bankruptcies will be so reduced that the staff can be reduced and, by reducing the staff, £750,000 can be saved. But does it work that way? Is it not a fact that the costs of the staff in that respect either are or should be and could be covered by the fees paid for the work it is called upon to do? Might this not merely result in a loss of jobs
  1478
  whilst depriving creditors of a means of enforcing their debts, by reducing the number of applications made and reducing the number of people necessary to handle them, without producing any net saving for the public purse?
  My second point about raising the limit to £300 is this. Even if it would produce a saving of public expense, are we not overdoing it to the detriment of creditors? I realise that the Lord Chancellor has recognised that this is a matter of judgment and no doubt the Minister will share that view. I want him to consider, in connection with making that judgment, certain aspects of the matter.
  It is recognised by the Lord Chancellor that serious erosions have been made into the means available to judgment creditors for enforcing their rights. Not the least of these was the doing away with imprisonment for civil debt. By raising the limit we shall, of necessity, make a further erosion of those means. The Committee should realise from the outset that this is one of the best—not only one of the few but one of the best—remaining means of enforcing a debt against a self-employed person. The experience of those who practise in this area is that the mere threat is often sufficient to produce the money or, if one has to proceed, the initial stages of making a person bankrupt are often sufficient to produce the money or sufficient information to show that it is not worth proceeding.
  That in itself is useful. It helps to keep down the number of cases which are processed and the work load which falls on the Insolvency Service, because I am told that bankruptcy is an expensive process for the judgment creditor. It does not cause much expense to the Service—certainly not much that could not be covered by an increase in fees—but it is expensive for the creditor. Therefore that is a powerful influence in restraining creditors from going ahead with bankruptcy proceedings when they feel that there will be little purpose in so doing.
  Mr. Clinton Davis: The argument which the hon. and learned Gentleman is adducing is, in a sense, in conflict with the original concept of these proceedings, because a value of £50 was imposed many years ago when it was a good deal of

  1479
  money. The object then was to enable relatively small and trivial payments to be pursued in this way. In essence, we are going back to the original concept, which I think was correct. This was a supplementary means of enforcing debt. It should not by any means be the main one, which I believe the hon. and learned Gentleman was seeking to argue.
  Mr. Percival: The difference between then and now is that, whereas it may have been a supplementary means then, we have made such great inroads into the other remedies which existed that it has now assumed the position when it is not only one of the few means but the most effective method remaining to creditors. It is because of these inroads and the recognition of the increased importance of this method, as I understand it, that the Government are making an exception here and not attempting to apply the multiplier of 12 to this figure.
  The second point I wish to make in this connection is that the Lord Chancellor in his speech in the other place indicated that the amount of the deposit which must be put down by the creditor was to be increased substantially. We have heard a figure of £60 mentioned. I mention that now because I should be grateful for the Minister's assistance about this. Can he give us an indication of what the increased figure is to be? His noble Friend has indicated that there will be a substantial increase. If it were to be an increase of that order, that of itself would have quite an influence in keeping down the number of small bankruptcies, because a creditor with a small domestic or consumer debt would be unlikely to put down a deposit of £60 unless he felt that the proceedings would produce the right answer and do so quickly.
  If, in addition to those factors which militate against the ability of a creditor to enforce his rights by this means, we put the limit up to £300, we shall have made a serious inroad into the usefulness of this as a means of doing that. We shall propose an amendment in committee substituting a figure of £200, so that this matter may be fully discussed. We hope that that is an aspect of the Bill to which the Government will give sympathetic and serious consideration.
  1480
  Two other simpler and shorter points arise on Clause 1. I was glad to hear the Minister confirm that it is recognised that a review of everything relating to the rights of preferential creditors must take place. I do not know whether he went so far as to say that it is already in train. If it is, I hope that consultations will start quickly, because consultations are as essential in that field as in all the others.
  We are worried about the fact that there would appear to be two classes of preferential creditors who may step in and leave all other creditors with little, if anything. The outstanding case is where the Inland Revenue has allowed arrears of taxation to mount up over several years. It may well be that this has arisen out of trying to help a business, out of sympathy with the difficulties of the business, and in the hope that a little holding off will enable the business to recover; but the end product is that, when the business finally becomes bankrupt, the other creditors suffer, not the people who produced the situation.
  Likewise, on the question of the subrogation of the banks in respect of the rights of employees for wages and salaries, I understand that it is quite common practice now for banks to advance money for wages and salaries in very considerable sums where there is really no hope of that producing a longstanding effect—no doubt, out of goodwill for the company, no doubt in order to try to help it to keep going, but, in the event, with the result of causing further disadvantage to the other creditors because when the balloon finally goes up, the bank is all right because it is able to step in and prove for all that money as a preferential creditor, but there is little, if anything, left for the other creditors.
  What we hope the Government may consider, and what we should like to discuss in Committee is whether we might take advantage of the pre-preferential creditor system which was put forward in our Government's Bill in 1973. But I shall not enlarge upon that at the moment.
  The third point which we hope to discuss in Committee on Clause 1 was also referred to by the Minister. It is all very well to say that the amount of credit which can be obtained by a bankrupt is

  1481
  now very much out of date and should be multiplied by 12 to bring it up to date—there is a certain logic in that—but if we approach it the other way, by observing that if the Bill became law a bankrupt could obtain £120 from any one person, or perhaps from each of a large number of persons, without being guilty of this offence, one may feel that the value of that structure has gone because the total amount of indebtedness which could arise by a number of debts of £120 here and there could soon add up to a very substantial sum.
  We shall ask the Government at a later stage—or if the Minister cares to comment on it today, so much the better—whether the time has perhaps come for a new approach here, possibly, for adopting that suggested by Justice in paragraph 9 of its recommendations, that is, to do away with the offence of obtaining credit as an undischarged bankrupt and substitute a different offence altogether.
  On the first point, the £300, the Committee and the House has to make up its mind as to what the new figure should be—whether it is to be £200, £250 or £300. As to the other two points, I put this thought to the Government. Is it really urgent that either of these be dealt with now? If it is, is it necessary to put the sums as high as they will be if the schedule goes through in its present form?
  I have nothing to say about Clause 2, I am glad to say. With regard to Clause 3, I think I heard the Minister say that the advantage of the provisions in this clause was that the money in the account would be put to better use. If I heard correctly, that would be directly related to the one observation I had to make on the clause. So far as I can see, there is no provision in the clause, or anywhere else in the bankruptcy and insolvency law, for any interest to be paid to the persons whose money is on account. We should like the Government to consider whether it would be desirable that interest should be paid at a commercial rate or, at all events, at a sensible rate rather than not at all or at a purely nominal rate on the sums in those accounts.
  Clause 4 we welcome without reservation. There was a query raised on it at one stage, as to whether the same simplification of the proof of debt could be
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  introduced into company winding-up as is here introduced for bankruptcy. I understand that that can be done by an amendment of the rules and that it is the intention that the rules should be amended to achieve that. If that be so, we welcome both what is in the clause and what is to follow by way of amendment to the rules relating to companies.
  I come now to Clauses 5 and 6, and I propose to deal in general terms with our feelings about them. Let me make clear to begin with that we are fully in sympathy with, and greatly welcome, the idea of reducing the number of public examinations. Furthermore, we are fully in sympathy with, and greatly welcome, the idea of speeding up discharge and ensuring that more people are discharged, and of simplifying the method of discharge. Therefore, we are very much in sympathy with the motives underlying both Clauses 5 and 6. However, in both cases we are very sceptical of the method chosen.
  I take Clause 5 first. I believe—if I am wrong, perhaps the Minister will tell us later this morning—that the method chosen is quite novel. I do not think it has ever been proposed in the report of anybody or has ever been discussed by the Department with any bodies of which I know. This is a classic example of the sort of provision about which it is not only essential that there should be consultation but that it should be on the widest possible basis, and not hurried. Here is a field in which we all want to make a big change. Until now, public examination could be dispensed with only by an order of the court on grounds of mental or physical disability. It is a very big change to decide that that is far too limited, that one wants to reduce them, and reduce them very substantially.
  It is a matter of principle. It is the kind of change that calls for early and full discussion. That is particularly so here because the proposal enshrined in Clause 5 is, I understand, entirely novel and differs fundamentally from two other major alternatives which have been the subject of public discussion from time to time.
  The Chairman's attention having been called to the fact that six Members were not present, he suspended the proceedings; and other Members having come

  1483
  into the room, and six Members being present, the proceedings were resumed.
  Mr. Percival: Those two alternatives are, first, that one should provide that there should be no public examination unless one is ordered—
  Mr. Clinton Davis: Would the hon. and learned Gentleman just repeat that?
  Mr. Percival: Yes. The first is that we should move to a system under which there is no public examination save where one is ordered. That is the reverse of the present situation where there must be one unless an order is made dispensing with it. Alternatively, there is the intermediate possibility which has been worked out and put forward in detail by Justice, the main terms of which are that there should always be a public examination if the amount of the liabilities exceeds £10,000 but that, if the total amount of liabilities is less than £10,000, there should not be a public examination unless one or more of certain features are present in that case.
  Those are two other alternatives which must be compared with the system put forward by the Government here. What we have to do—by "we" I do not just mean this Committee or this House but all of us who have an interest in making the law relating to insolvency as simple and as practical as possible—is to hammer out together which to choose.
  My second point on the clause is that even if, after all that consultation, it were decided that the approach adopted in Clause 5 is the correct one, it would still be necessary to hammer out the details with much more precision than has been done here before foisting on to all concerned this totally new system. It is all very well for us to say "This is what should be done; now you get on and do it". We sometimes forget that we ought to consider more the practical needs of those who will have to carry out what we say they must do. Without exception, all those to whom I have spoken about this and who are concerned in the practical side have said that, if we are to adopt the approach of Clause 5, the clause must be much more precise about what is to be done, and it must, in particular, contain guidelines.
  1484
  The Minister said that guidance would be given. I asked him "By whom, and to whom?" I hope that, before we rise this morning, he will give us a fuller answer to that. Is it guidance by the Department to somebody, and, if so, to whom, and what is the effect of that guidance? How are the courts to become cognisant of that guidance, what obligation have they to follow that guidance and so on?
  The noble and learned Lord the Lord Chancellor, speaking in the other place, specified three guidelines. He thought that a public examination would be dispensed with only where the official receiver had carried out a full investigation, the number of creditors was small, and the public interest was little. That is a start. Admittedly, if one simply put those into a Bill, it would be so vague as to constitute another rather bad piece of legislation, but that is no reason for not seeking to develop them and give precision to them. If those are the sorts of consideration which the Government have in mind in asking the House to pass this law, for goodness' sake let us make them more precise than that and put them in the Bill, so that the courts which have to consider these orders will know what they are supposed to be doing. Furthermore, the official receivers will have that much guidance in making their applications, because they are the ones who will have to make the applications.
  Second, we feel that the present proposals are open to the serious criticism that only the official receiver can apply. We think that that is too limited, and that others should be allowed to apply.
  I am sure that everyone realises what enormously serious consequences changes like this have for debtors and creditors alike, but I doubt that we are doing justice in this instance to the seriousness of those consequences. Before we make a change like this, whichever line we decide to take, we must have the fullest discussion both inside and outside the House and with all others who are interested.
  Again, we welcome the idea behind Clause 6 but we are frankly astonished at the method chosen. Here also, at least two others have been put forward and fully discussed. I refer to the Blagden

  1485
  proposals and the variations of Blagden put forward by Justice.
  In a letter from the Department to the Law Society, in answer to some comments offered by the Joint Committee of the Law Society and the Bar, it was said of Clause 6:
  "The provisions of this Clause are intended to implement the recommendations of the 1908 and 1924 Committees dealing with Bankruptcy Law amendment, whilst overcoming the practical objection mentioned by the Blagden Committee, by providing that the review can be undertaken by the Court in the bankrupt's absence."
  If that is the Government's intention, we are very surprised that it should have thought it desirable to go back to the recommendations of the Committees of 1908 and 1924 in preference to the recommendations of Blagden in 1957. Furthermore, I do not understand the second half of that sentence, because I remind the Committee that the reason Blagden gave for rejecting the recommendations of the 1908 and 1924 committees was the extra expense that would be caused and the extra burden that would fall on the Insolvency Service if those recommendations were adopted.
  I draw the Committee's attention to paragraph 57 of the Blagden Report:
  "It was recognised by both the previous Bankruptcy Committees "—
  those are the 1908 and 1924 committees—
  "that no bankruptcy should be allowed to continue indefinitely without the question of the bankrupt's discharge being dealt with. The difficulty was that, if every bankrupt were to be brought before the Court for the consideration of his discharge, it would increase the costs of discharge administration fourfold, so that the recommendation of the 1924 Committee to the effect that every bankrupt should have his discharge considered by the Court was never carried out."
  It appears to those with practical experience in this field that great increases would inevitably follow if Clause 6 were adopted. If the official receiver is to prepare a report on every bankruptcy in the sixth year following the adjudication, and every one of those is to be heard by the court, the costs and the burden of administration must be increased enormously. Considering that the number of bankruptcies now is so much greater than it was at the time of Blagden, and will continue, so far as one can see, to be very large, despite the raising of the limits, the mind boggles at the extra work
  1486
  and extra expense. Confining oneself to the time and expense involved in compliance by the official receiver with the new duties that would be imposed upon him and the time and expense which would be incurred in the court proceedings which would follow, the mind boggles.
  On the question of the extra expense of what is proposed the letter from which I was quoting said this:
  "We are of the opinion that the work involved in preparing reports for the purpose of review will be less onerous than that involved in considering whether or not to apply to the Court to enter a caveat."
  I should say just a word about caveats, and point out that the essence of the Blagden recommendation and the Justice recommendation was that there should be automatic discharge save where a caveat had been entered. What has been overlooked in the drafting of that sentence in the Department's letter is that both committees recommended a close link between the dispensing with the public examination and the automatic discharge, and that the caveat, if one was to be entered, would normally be entered at the stage when a public examination was held. So it would not be necessary for the official receiver to go all through every case again to see whether a caveat should be entered.
  In cases where there had been a public examination, the odds are that the caveat would have been entered at the close of that. In other cases, the question of entering a caveat would arise only if something happened during the course of the administration to give the official receiver cause to reconsider that particular case and, if he felt it necessary, to enter a caveat.
  At the moment, we cannot see any advantage in the way that has been chosen. It would clearly cause a great deal of extra work, far outweighing the work and expense that would be saved by raising the limits in Clause 1. It would put extra burdens on debtors as well. We are not soft about debtors. I do not want what I am about to say to be thought to indicate that. We are trying to be fair to both debtor and creditor. But I entirely accept the proposition that, if it is necessary in the genuine interests of the creditor to do something which may be considered hard on the debtor,

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  well and good. If that situation arises, preference must be given to being fair to the creditor.
  Here, however, we think that this would be hard on the debtor without compensatory advantage. A debtor who had been made bankrupt five years ago, possibly with very little publicity, might find himself before a court being asked a lot of questions about what had happened in the last five years. He would have attracted to him a great deal of publicity and attention which would serve no purpose. If it can be demonstrated that that would have an advantage for the creditor, let us do it. But here we cannot see how these extra burdens are justified, or what is gained by this method which would not be gained by either of the other two methods.
  We hope that, when the Bill goes into Committee, the Committee will give careful consideration to the Blagden recommendations bearing in mind also that Australia followed them in 1966 and New Zealand in 1967. At least two other countries, therefore, have thought them worthy of use. We shall not suggest that they should necessarily be slavishly copied. We have in mind that, if it was felt that two years was too short, a period of five years, or something in between, might be substituted. In this we should welcome the assistance of the Minister and the Department, because the effects of these times are not always easy to work out. It might also be sensible to introduce the variations to Blagden suggested by the Justice committee.
  I do not know the Government's intention, but we feel that the advantages of Clauses 5 and 6, as I have suggested they should be dealt with, should be extended only to first-time bankruptcies. Second bankruptcies may be another matter.
  It is good that these two clauses are in the Bill so that we may have a general discussion on them. At the end of the day, when they have been discussed here and there is a basis on which people outside can consider what we are doing, it may be thought right that they should be taken out of the Bill. Then everybody interested could really think about them, we could all decide what was the right approach, and they could take their rightful place as the central feature of the comprehensive measure which we hope will follow.
  On Clause 7, I am glad to hear that attention has been given to the Law Society's points, and we shall, no doubt, deal with those in Committee.
  The only other clause to which I wish to refer is Clause 8. The remedies which now remain to the judgment creditor of a self-employed person are very thin, and they will be even thinner after we have increased the limit to £300. Something should therefore be done about it. I do not quarrel with that—something should be done to improve the position of creditors—but I do quarrel with this proposal. What is being done here—so far unnoticed—is quite revolutionary. The court is being given power of its own motion to select a method of execution of a judgment debt. I do not know of any circumstances in the law in which such a right exists. I believe that the choice of method of execution rests solely with the creditor. It does not need much effort to see how important it is that it should. If he prosecutes his debt to the stage of final judgment, he has done it on the basis of the remedies which will be available to him, at his choice, after he has got his judgment. For the court to step in and say "We shall take a hand in this and make an administration order" is a revolutionary innovation which I find extremely unattractive.
  If what is desired is to make the administration order procedure available to the creditors of a self-employed person or available at the instance of a debtor himself, let us simply say that. Let us say that a creditor who has obtained a judgment may apply for the making of an administration order, or that a debtor against whom a judgment has been made may apply, as I think he can at the moment.
  What is proposed here, however, is that the court be invited and entitled to select the method of enforcement. It seems that, whether or not the creditors agree, the court may go ahead with that method although, as was recognised by the Lord Chancellor in his speech—and. I think, by the Minister—the making of the administration order would debar all creditors from any further process open to them to recover their debts.
  Second, even if it were right to make this innovation, it would be wrong to do it in such vague terms. There is nothing in the clause, so far as I can see, to

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  indicate that the court has to have any regard to the assets of the person. One would think that important in the case of an administration order. It is no good simply looking to see whether there are debts. One should be interested also in whether there are any assets to administer. There seems to be no requirement of notice to the debtor that it is proposed by the court to initiate the proceedings under the clause. The clause contains the words—if it appears to the court that the debtor "also has other debts". What does that mean? It is much too vague. Moreover, all of this is unnecessary. If the object is to make the administration order available as a means of execution to the judgment creditor of a self-employed person, let us just give the right to such a judgment creditor to apply for such an order.
  I hope that I have given sufficient warning of the major matters that we shall wish to raise in Committee so that they may be fully considered. I end on the note on which I began. It is our hope to have a thorough discussion of these maters and come to sensible conclusions about them, even if the sensible conclusion may in some cases be to leave something ut for the time being. It is as the vehicle for that that I welcome the Bill and support the proposition that it be read a Second time.
  12.1 p.m.
  Mr. Tim Renton: I rise with great temerity to make a few observations on the Bill. I am not a lawyer and am surrounded by lawyers. In particular, I have in mind the wise remarks made by my hon. and learned Friend the Member for Southport (Mr. Percival).
  Not being a lawyer, however, I take comfort from the remark made by Thomas Jefferson, referring to Congress, that for 150 lawyers to do business together was not to be expected. Therefore, as a mere company director, I venture to make a few remarks on the Bill.
  It is significant, as my hon. and learned Friend said, that the number of bankruptcies and isolvencies in companies has risen substantially recently. It is ironically appropriate, therefore, that we should be considering the Bill now. I believe that the most recent figures show insolvencies to be up about 60 per cent. on the last
  1490
  financial year. Many of these stem from the process of inflation.
  Inflation is noticeable in Schedule 1 where the limits are put up—as the Under-Secretary said—generally by a factor of 12 on the 1914 figures. However, inflation causes many companies to get into difficulties which perhaps lead to insolvency without there necessarily being bad management. This may happen when a company is dependent for its stock upon a raw material which goes up greatly in value. Copper, for example, went up from £500 to £1,400 in a matter of months. Or it may be that, flowing from this fact, the number of debtors owing money to the company increases greatly. The company may be unsuccessful in collecting its debts sufficiently quickly and thus find itself with cash flow problems. These problems can lead to insolvency, but they do not necessarily mean that there has been bad management. They certainly do not necessarily mean that there has been criminally bad management.
  I believe, therefore, that in approaching the Bill we must try to strike the right balance between debtors and creditors and between management and those to whom management owes responsibilities. This is a difficult balance to achieve, but it is right that we should try to do so.
  I should first like to ask the Under-Secretary about the question of wages. Schedule 1 proposes that the limit on wages ranking as preferential debt is to be increased to £800. Is that a total limit or a limit, per individual? If it is a total limit, I am surprised by the remark made by Lord Mansfield in the other place when he said that:
  "There cannot be many cases where a sum of £800 is owed in respect of wages or salaries"—[Official Report, House of Lords, 4th December 1975; Vol. 366, c. 766.]
  He was referring, of course, to firms which went into liquidation. I should have thought that that was not so. The figure could well be higher than that. I should, therefore, appreciate clarification on this point.
  Mr. Percival: It is per head.
  Mr. Renton: My hon. and learned Friend says that it is per head. I thank him for that clarification. That deals with one of my points.

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  Leading on from that, it has often struck me that employees in a small company which becomes insolvent do not know their rights in that situation. Greater information should be made available to them when they become aware of the difficulties into which their companies may be getting. They should know that their wages, up to the figure of £800, will rank as preferential in insolvency proceedings. Anything which can be done to make this right of employees more widely known would be helpful.
  I turn now to Clause 5. My hon. and learned Friend has rightly stressed the difficulties which we find in the clause. These difficulties have been well set out in a brief which many members of the Committee have received from Justice. As a non-lawyer, it is clear to me that the official receiver will surely be placed in a quasi-judicial position—a position which he does not occupy at present—in having to decide whether he should make an application to the court.
  At a time when the work of the official Receiver is increasing because of the number of bankruptcies, is this not placing an additional burden upon him and his staff? Furthermore, are we not asking him to exercise a function which he is not competent to perform? I believe that the Bill would be improved and would find wider acceptance if allowance were made for application to be made to the court by others—certainly by the debtor—as well. If the debtor does not have the opportunity to state his case directly to the court there is a burden upon the official receiver in that he is being required to make a judgment of Solomon before the matter ever gets to court. Moreover, what the court hears must inevitably be an ex parte view of the facts. It would be wise if the Bill could be amended in that manner. I hope that the Under-Secretary will be able to give us some comfort on these lines when he replies.
  The Lord Chancellor—as the Under-Secretary said—gave guidelines in another place as to the way in which this matter would be treated. However he avoided the point about others—notably the debtor—being able to make application to the court. In effect he said that only the official receiver would make such an application and that the court's discretion would be exercised on the facts
  1492
  of the particular case. However, if only the Official Receiver is making the application, the facts will already, in effect, have been decided by him in advance of the court hearing. I do not believe that this novel procedure can give as wide and broad a treatment of the subject in the court as it deserves.
  I turn next to Clause 7. Perhaps inevitably, as a company director, I am most concerned about this clause—more perhaps than is my hon. and learned Friend. There is an element of retrospection in the clause to the degree that if a director should find himself in the unfortunate position of having been a director of a company which went insolvent within the last five years he will now, under the Bill, as I read it, be in the position that if another company of which he is a director at present were to go insolvent before the five-year period were over he could be judged by the court to be unfit for management and thus unable to play any part in his normal business life. That would be a very severe penalty.
  First, to remove this element of retrospective legislation, it might be more appropriate if it were spelt out clearly in the Bill that there was no retrospective element in this, and that it did not refer to bankruptcies over the period leading up to the time when the Bill is enacted. As presently drafted, I believe that the Bill might be judged to do that.
  However, there is a wider point which greatly concerns me. That is the role of the non-executive director and how he sees his responsibilities in the light of the clause. As I said in my opening remarks, and as hon. Members on both sides of the Committee will realise, many companies go bust not necessarily through bad management but because they have been caught up in the whirlwind of events. If someone was a non-executive director on the board of such a company and, as a result of the company going insolvent in circumstances in which he knew relatively little about the affairs of the company but was collectively responsible for its conduct as a member of the board, he were then to have this sword of Damocles hanging over him, he would be loth to take on further directorships lest, through misfortune more than anything else, he might find himself caught under the provisions of the clause

  1493
  and be unable to practise his trade as a company director.
  Mr. Clinton Davis: I think it right that we should correct what I believe is a misapprehension on the hon. Gentleman's part about the nature of the provisions in Clause 7. What has to come before the court is the issue of determining whether, having regard to the criteria specified in (a) and (b), a director is unfit to be concerned in the management of a company. We have to view those two matters conjunctively and, therefore, the non-executive director who has been very largely blameless in the instance the hon. Gentleman was citing would have those matters taken very strongly into account. I cannot conceive that if those facts were found he would be in any jeopardy at all. One has to look at the two things conjunctively and that is what we are seeking to do in this particular provision.
  Mr. Renton: I take that point, which it is perfectly fair for the Under-Secretary to make. I did not realise that these two subsections should be taken conjunctively. However, the point to be borne in mind is that many non-executive directors, many directors fearful of their reputations, would surely not want to run the risk of having to go before the court or having the court decide whether their conduct was likely to be such as to make them unfit to be concerned with the management of other companies. Through this clause they are exposing themselves to arrest, making themselves liable to a decision by a court which is without their normal experience at present. In a sense, it is a particularly unfortunate moment for this clause, which places new responsibilities on directors, to be introduced. We know that the Bullock Committee is looking at the whole question of employee participation on boards and flowing on from that, and as part of it, the Government are engaged in a general study of the structure of boards. While this consideration is under way I should have thought it appropriate that this new caveat on directors should be put into cold storage until the new corporate structure of boards had been decided.
  It is clear from, for example, developments in the United States that there
  1494
  is now such a wide range of actions that can be brought by shareholders against boards that it is discouraging people of intelligence and wide experience from serving on boards. I believe it would be a great mistake if in this country we were to fall into the same trap of so legislating against members of a board that non-executive directors were discouraged from serving.
  In conclusion, it is clear that we want a law on insolvency that is as feasible and as pragmatic as possible. I believe that it should be easily interpretable by the layman in companies and for that reason clarification and codification of the law on bankruptcy is most important. It is also clear that we must strike the right balance between creditors and debtors. I give, with my hon. and learned Friend, a cautious welcome to the Bill. In some respects I think it has erred and we can go in greater depth into those aspects in Committee.
  12.15 p.m.
  Mr. Terence Higgins: I find increasingly that versatility seems to be the hallmark both of Trade Ministers and Shadow Trade Ministers. The difference is that whereas one may be dealing with matters as diverse as the balance of payments, the insurance industry, civil aviation and shipping and even the film industry and Sri Lanka tea estates, the Government normally have expert advice on all these matters at a moment's notice but that is not always the case for Shadow Trade Ministers. The Committee will, therefore, be very grateful to my hon. and learned Friend the Member for Southport (Mr. Percival) for the extensive analysis which he has carried out this morning. It is absolutely right that we should at this stage make it clear that in our view a great many changes are necessary in the Bill and should give the Government sufficient notice for them to take that into account.
  I should like to make one broad point on the whole question of reforming company law and matters such as insolvency. I become increasingly worried that the Government are taking the view that all these matters should, at some much later stage, be incorporated into some massive piece of legislation. We have outstanding many matters which were covered in

  1495
  the Bill which the Conservative Administration introduced. There are a great many highly controversial matters—for example, with regard to warehousing or insider dealing and the whole question to which my hon. Friend the Member for Mid-Sussex (Mr. Renton) has just referred, of employee participation. In addition to that, there are all the more fundamental or more complex points which the Minister has referred to this morning concerning bankruptcy and insolvency.
  I cannot help but feel that if, eventually, such a monster were produced it would be very difficult indeed for the House to give sufficient consideration to it during the course of one Parliamentary Session. Even if it were introduced the moment the gun goes, so to speak, we would be jolly lucky if we managed to get it through all its stages with proper consideration by the end of that time. Therefore, the more sensible approach would be a series of interlocking Bills which could then be comprehended on a basis of consolidation. I am absolutely sure it is right that the House should give proper consideration to these matters and, the burdens on hon. Members being what they are, this is somewhat difficult. Even in the present and immediate context, I hope that the Minister, through the usual channels, will give very careful consideration to the relationship between this Bill and the one which he has announced has been published today—again a relatively minor matter on company legislation. I hope that we can pursue this Bill through its various stages which, obviously, will now be pretty heavy before we proceed with the Committee stage on the other Bill because, necessarily, much the same team on both sides of the House will be dealing with both of these measures.
  I turn now to the substance of the Bill. We are grateful to the Minister, despite his recent indisposition, for spelling out the matter in detail. I merely interrupted him with reference to the Lord Chancellor's speech to suggest that he might spare himself some of the onerous task of going over all the issues point by point when we already had much of it on the record. I am not sure that it would not have been more helpful to have spelled out the differences between his speech and
  1496
  that of his noble Friend rather than go through the whole thing with certain bits added in.
  But be that as it may, we are grateful to him for what he said. As far as the general scope of the Bill is concerned, one should not underestimate the degree of public interest. I was rather surprised, on carrying out a certain amount of research, to see the amount of Press coverage which there has been on this subject—not just technical articles in The Times, for example but a great many articles elsewhere. The Sunday Times on March 9th 1975 had the headline
  "Did you know you could be bankrupt for £50?"
  There was a very interesting article for the layman in the Daily Telegraph colour supplement on March 7th 1975 headed:
  "Public Disclosure of Private Disaster"
  complete with illustrations. There are other points in New Society on bankruptcy. There was an article headed:
  "Legal snags for the liquidator"
  in The Times. There was another in New Society on insolvency. There was even one in the Sunday Times:
  "Bankrupts of the world unite".
  One should not underestimate the considerable interest in this matter.
  Mr. Clinton Davis: What about page 3 of the Sun?
  Mr. Higgins: I have not seen page 3 of the Sun.
  As the Minister has pointed out, pan of the interest may lie in the fact that we now have a growing population of undischarged bankrupts. This is presumably not a desirable situation, and it touches one of the main objects of the Bill. I want to make some comments on that, although my hon. and learned Friend and my hon. Friend the Member for Mid-Sussex (Mr. Renton) have already made many of them. I shall not go over the same ground.
  As the Minister told us, the Department has started a major review, and we need to consider all this in relation to the proposed EEC convention. I hope none the less that in this Bill we can not only correct some of the sins of commission to which my hon. and learned Friend has drawn attention but also rectify some of

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  the sins of omision. It would be very unfortunate if measures which can be suitably incorporated, say, in a new clause are not incorporated now, instead of waiting for the other major measure to which the Minister has referred.
  Looking at the history of this—some of these proposals apparently go back to committees in 1908 and 1924—we get a certain feeling of surprise that we ever managed to get rid of the debtors prison, for example. The process is very slow. But that being so, it is all the more surprising, in view of the thought given to these matters by committees in the past and the fact that Justice, the Bar and the Law Society have expressed views, that there was not adequate consultation before the Bill was introduced.
  I cannot understand why that should be so. I should be grateful if the Minister could tell us how the Bill could be produced, with all its sins on its head, so to speak, and apparently without the benefit of consultation with those experts—they are indeed experts—outside the House. I hope that this can now be rectified, although we may need to do so by way of a Committee stage in this House. I hope that in that case the Minister will have an open mind and will not feel that he is somehow committed to the proposals in the Bill but that we ought to look at it objectively. We should certainly not say that he was losing face in any way if at that stage he felt obliged radically to alter certain parts of the Bill.
  I almost contemplated that, even though the Bill has been described as a short and non-controversial measure, we should suggest that the Government take it back altogether and start from scratch. We ought to be able to make it a great deal better than it is, and we shall do all we can on this side to ensure that that is done. We hope that we shall have the Minister's co-operation on what is, after all, in no way a partisan measure.
  Despite the Lord Chancellor's speech, the House of Lords debate was pretty perfunctory. We now need to get down to the detail of the Bill, once we have agreed, as I hope we shall today, that its Second Reading should be recommended to the House.
  My first comment on detail concerns the monetary limits. I intervened in the
  1498
  Minister's speech to suggest that there seemed to be a somewhat inconsistent attitude about how one should adjust these limits. Here again, as has already been pointed out, the problem is to hit a balance between creditor and debtor, given the erosion of other means of seeking redress. My hon. and learned Friend has rightly drawn attention to the question whether the main £300 limit is right. The debate has tended to suggest that the £50 limit which we are now proposing to change was set in 1914. I understand that it actually goes back to 1869. If that is so, this is a remark able change. We shall need to debate on a specific amendment the right figure, bearing in mind the balance between debtor and creditor. We shall need to pursue also the point I raised with the Minister regarding the monetary limit as it applies to certain forms of preferential creditor.
  It would be helpful if the Minister would consider circulating to members of the Committee the comparative figures in the schedule set against the figures which would be appropriate if adjusted, say, by the consumer price index or something of that sort. Otherwise, it is difficult to see which ones are in line and which cut of line with that concept.
  Having said that, I turn now to Clauses 5 and 6. The Minister will be familiar with the representations on these clauses made by Justice. They seem to me to raise difficult questions, as my hon. Friend the Member for Mid-Sussex pointed out. The official receiver is now being asked to exercise a quasi-judicial function, which is quite different from anything he has done hitherto, the court will not have the benefit of hearing the debtor and his legal advisers and the creditors, and, in particular, there is a lack of guidelines or criteria.
  I understand that one of the guidelines proposed is that the official receiver should consider whether the matter is of public interest. If that is to be a guideline, it seems very odd. How on earth is this distinguished individual to have any real criteria as to whether this or that case may be of public interest? We can think of a number of recent, almost lurid cases—I shall not go into detail—in which the official receiver might well, at an earlier stage in the proceedings, before the facts became known, have come to the

  1499
  view that one should not go through the existing procedure. If it is proposed to put that kind of burden on him, we shall need to consider it very carefully.
  That brings out the fundamental point that the Government must be absolutely explicit on what they propose to give by way of guidelines. Will the Minister clarify for the benefit of laymen the basis of the bankruptcy rules? If it is not to be written into the Bill, we need to consider carefully how these rules can be made explicit, whether the House ought to have any consideration at all for what they should contain, or whether it is simply an administrative matter which does not have proper political—in the best sense of the word—consideration.
  The Justice submission on this point suggests that amendments might be made to Clause 5 if there is insufficient parliamentary time for it to be redrafted. I do not think that that is the right approach. The objections raised by Justice are very strong, and considerations of parliamentary time, or draftsmen's time, ought not to inhibit us from settling the best possible form of Clause 5.
  Similarly, on Clause 6, powerful arguments have been advanced by Justice. If every case is to be re-examined in order to dispose of outstanding cases of bankruptcy, the argument that the staff savings made by some clauses might be substantially offset by Clause 6, if not totally eliminated, may well be valid.
  Similarly—this is very important—the Bill as it stands seems to create the extraordinary consequence that a public examination of a bankrupt person may be dispensed with in the first instance when the matter first comes before the authorities, but then, if I understand correctly, the same individual may find himself five years later having to appear in open court. That seems extremely odd, and perhaps the Minister will confirm whether that is so when he replies.
  I make the point again. If we were to agree to the Bill in its present form, would its effect be that an individual would not have a public examination when he was faced with his problems, but five years later, when the question of his discharge arose, he would have to appear in court? That would be an extraordinary situation for the individual, since one reason why the number of
  1500
  bankruptcies is accumulating is that people are reluctant, despite the penalties which fall upon them for not being discharged, to go through the attendant publicity five years after their misfortune, mismanagement or folly and find that vented upon their heads.
  Another question on the same point is whether the judge at that stage will, or could in any circumstances, agree to the discharge if the official receiver has been unable to trace the individual concerned. The proposals of my hon. and learned Friend the Member for South-port for an alternative arrangement seem to me to be powerful. I hope that we shall be able to go into that in Committee in some detail.
  I take issue with my hon. and learned Friend on one point. He had no qualifications about Clause 4. I have a slight doubt about it because it substitutes for "a debt to be proved by affidavit"—
  "A debt may be proved by delivering or sending through the post in a prepaid letter to the official receiver …".
  All Members of Parliament know how unreliable the Post Office service is. No doubt, this provision was formulated in the last century. The post was much more reliable in the middle or latter part of the last century than it is now. This is a new point which has not been mentioned before. At least, it ought to be a registered letter or something of that kind. I raise the question because Members of Parliament present a good statistical sample for appraising how often letters go astray. I had a case where five letters to the Department of Health and Social Security went astray in one week a couple of years ago, and it took months to sort out the resulting chaos. If it can happen between this place and the Department of Health and Social Security, it can happen between someone who is trying to prove a debt by sending a letter to the official receiver. That matter should receive consideration.
  Various other points need to be raised. On Clause 3, the question of the funds, I understand that the two accounts are to be changed from what was originally the Insolvency Services Investment Account to the Insolvency Services Account—the word "investment" now being omitted from the title. I should be grateful if the Minister would tell us who receives the benefit of the use of the

  1501
  money, and whether any interest is paid on it, because it would seem unfair if the interest were to go to the Government or if the Government were to have the use of the money without interest. Presumably, the benefit should go to those who, sooner or later, will receive something from the account.
  I am worried also about various time limits. I recently received a copy of the form which is used for giving someone notice that bankruptcy proceedings may be taken against him in default of payment of a debt, and the final words read:
  "You must within three days apply to this Court to set aside this Notice, by filing with the Registrar an affidavit to the above effect."
  Frankly, first-class mail or not, three days seems to demand a rapid response from the individual concerned. We may wish to consider several time limits in the present context, although they are not extremely onerous on the debtor, or, indeed, in some cases the creditor as well.
  There is another main source of controversy over the Bill, which it is becoming increasingly clear is far from uncontroversial, as I am sure even the Minister will agree by now. This concerns the effect of Clause 8. This clause could work in an extremely onerous or oppressive manner on debtors. I understand that some of the safeguards in previous legislation are not repeated in this. In short, the effect of the Bill, if I understand it correctly, would be to remove certain safeguards which many experts consider essential if the individuals concerned are to be adequately protected. The expression "alarm" has been used about the implications of Clause 8. Our initial feeling at this stage is that we might be better off without Clause 8 at all, unless it can be satisfactorily amended in the manner which we shall suggest.
  I do not want to go into the sins of omission in detail, but I am happy to see that the Long Title is very broad, and will not preclude us from moving a number of amendments. There is one point which gives me, as a layman, increasing cause for concern. It raises broad issues, especially in regard to the operation of many institutions which give credit. It came out clearly in a television programme called "That's Life" in which Miss—or Ms—Esther Rantzen participates.
  Mr. Bryan Gould: She is Miss.
  Mr. Higgins: Miss Esther Rantzen acts with great effectiveness in bringing out and publicising a number of cases in which consumers and others have suffered. The way in which the operation of consumer credit is carried out at present may create a situation in which individuals are effectively blacklisted from obtaining further credit because there has been some mistake on the occasion of some previous debt. I understand that this occasionally happens through errors or wrong recording in county courts.
  As a result, an individual, all unknown to himself, may find that he is constantly refused credit or has great trouble in obtaining it, because there are such errors in the records. Because he is unaware of it, the situation may persist for a long time. We should consider whether some procedure could be developed to ensure that such jeopardy does not arise for a perfectly innocent individual who has paid a debt but who is recorded as not having paid it. I raise that matter because I have had several constituency cases where this has happened, and there are genuine worries to be expressed.
  Finally, we have grave doubts as to whether the Explanatory Memorandum to the Bill which gives the figures for savings and for savings in staff can be justified not on the basis of the alterations which the Government propose to make in the Bill. We shall need to probe that matter carefully. Clearly, the Opposition, as is well known, are in favour in making savings in public expenditure. However, we need to make sure that they are real savings, We must look at the matter on balance, taking fully into account both the savings, on the one hand, and the increases in expenditure or staff, on the other. It is extremely important that we do not press that particular economy, whatever the pressures of the Treasury may be on the Department of Trade, to a point at which it may result in injustice or hardship to individuals who ought to have the financial matters covered by the Bill adequately analysed by a process of law which ensures that the interests of both creditors and debtors are fully protected.
  I do not oppose the Second Reading, but I think that the Bill needs radical change, and a number of new clauses

  1503
  may well have to be added. I hope that we shall persuade the Minister of that.
  12.40 p.m.
  Mr. Clinton Davis: If I may have the leave of the Committee to speak again, may I explain my attitude to the progress of the Bill? I have not come to the Committee with a closed mind, because the Bill does not involve party-political controversy. It is a Bill about which I know some reservations have been expressed, not only in the Committee but outside the House.
  It has been introduced primarily because it is a short Bill. We should not have had parliamentary time for it if we had had a major review of insolvency law to contemplate within the legislation. Within that scope, I should certainly wish to see any reasonable amendments which satisfied me and the Committee incorporated in to the Bill. I make that absolutely plain. I hope that hon. Gentlemen, who have made long observations about the defects of the Bill, will also approach its consideration in Committee with an equally open mind. We shall have rather more time to adumbrate the variety of arguments about certain proposals that appear, or do not appear, in the Bill. I am sure that my view will be shared by the Opposition.
  The hon. and learned Member for Southport (Mr. Percival) said that he shared the view that changes were urgently needed. In a long speech, he made a variety of points on specific clauses which, he said, were not Committee points. Equally properly, he drew the Committee's attention to the need to lay down markers so that I and my officials should have advance notice of the points that the Opposition wished to make. That is a more useful way of proceeding than for amendments suddenly to appear on the Paper late in the day and for a hurried decision to be made about points which could be of considerable importance.
  The hon. and learned Member referred to Clauses 5, 6 and 8 as containing revolutionary proposals. I suppose that it depends from what base one decides to depict a revolution, but I do not think that they could be regarded in quite that light. They are different. He says that they are central to the comprehensive review that the Department must be carrying out. I do not necessarily agree,
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  but these matters we can explore more fully in argument at a later stage. He said that the Bill had been introduced without any consultation. It is true that the Bill is, as I have indicated, of a limited nature. We were aware long ago of the representations which Justice had made after careful consideration. They are essentially representations which go to the heart of the wide-ranging review that we have to undertake. So we knew what its position was.
  The Law Society made representations to us too, which were the subject of correspondence. At no time did I receive a request from either the Law Society or Justice for a meeting to discuss these wider issues. I should be happy to do so if they wish for such a meeting. It is right that I should put the record straight on that.
  I should like to pick up some of the points made by the hon. and learned Gentleman in particular and by some of his hon. Friends. The hon. and learned Gentleman questioned whether, under Clause 1, we were removing a useful bludgeon on the part of the creditor against a debtor. He says that it is one of the most effective remedies available. Certainly, in some instances, it does have effect. I speak from some personal knowledge and experience, having acted for creditors seeking to enforce their debts. Relatively few creditors, in fact, avail themselves of this form of remedy. Certainly in the sort of working-class practice in which I was a partner it does not touch them to any great extent.
  I do not deny that the process has its value. It certainly has its value for the Inland Revenue. It has in the past been established as a helpful way of threatening someone to pay up. As the hon. and learned Member said, it is not simply the issue of a bankruptcy notice but the initial stages of the bankruptcy proceedings that may procure the desired effect. But there is no doubt that the sum should go up. The difference between us is whether it should be £200 or £300. That is a fairly finely poised balance of judgment.
  The hon. and learned Gentleman asked me the amount of the proposed deposit. The proposed deposit on the debtor's petition is to be £50, and that on a creditor's petition is to be £90. I am advised that this is not expected to achieve a

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  sufficient reduction in the number of cases to bring the workload into line with staff resources without also increasing the limit of the petition debt to £300.
  Of course, officials in the Insolvency Service have considerable expertise, particularly in the demands made upon them, their staff and their general resources. That is a factor on which they have almost more expertise than anyone else.
  Mr. Percival: I hasten to recognise that. I am sure that nothing that I said would lead to any other conclusion. The Service is excellent. That is one side of the matter. The other concerns those who are at the receiving end, and that is the experience which I said was not being taken account of. But I welcome the opportunity to pay a similar tribute to the Service as that just paid by the Minister.
  Mr. Davis: I accept, of course, what the hon. and learned Gentleman has said. It is a question of trying to preserve a balance.
  The point about the question of interest was raised both by the hon. and learned Gentleman and by the hon. Member for Worthing (Mr. Higgins). This is a matter into which we should look further because, as I understand it, the position is that whereas in company liquidations the liquidator is able to use interest for the benefit of creditors at large, the same does not apply in bankruptcy. At the present time—and this is not simply something that has happened under the present administration but has been going on for a very long time now—the interest goes towards defraying the Insolvency Service's expenses.
  We had a long argument about the effect of the provisions in Clauses 5 and 6 and the hon. and learned Gentleman was sceptical of the methods we had chosen when there were these other methods which had been put forward—namely, that we might be able to dispense with the examination except where it is ordered. There was also the Justice suggestion. I cannot do justice to that in five minutes, but we will explore those matters again with interest and, perhaps, with some mutual advantage in due course.
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  One thing the hon. and learned Member said—and this was also touched on by all Opposition Members who spoke—was that we should be more precise in the guidelines that were laid down. It is difficult to be precise because of the variety of matters that can affect the issues relating to the conduct of a bankrupt and the way he has gone about performing his duties and so on. It is almost as difficult, if not more so, than the criteria relating to bail.
  The hon. and learned Gentleman is more expert, perhaps, than anybody else in the Committee on that matter and he knows how difficult it is to have a meaningful set of guidelines in that connection. I suggest that the same must apply here. It is perfectly true that it is laid down in the statute, but I have always wondered whether those guidelines were always as helpful as those who put them forward in the relevant debates argued at the time. However, that is another matter, but it has some relevance to the question whether we can have effective and meaningful guidelines beyond the general principles that we have proposed in this respect.
  As I indicated in an intervention, the guidelines would be provided by the Lord Chancellor. He has power to do that, with the concurrence of the Secretary of State, within the Bankruptcy Rules. These are made under the Bankruptcy Act by statutory instrument and are laid before Parliament.
  The hon. and learned Gentleman was amazed that we had chosen the remedy set out within Clause 6. I do not think that I have time now to go into that because it is a major area of controversy and we shall have to see how we can solve that in due course. He said that the court's power to move of its own motion was unprecedented. I think he is incorrect about that.
  The Chairman: Order. Standing Order No. 64 allows us to go on for another quarter of an hour if the Committee feels that it is desirable.
  Mr. Davis: I do not propose to continue for that length of time, but I am obliged to you, Mr. Pink, for reminding me of the possibility, of which I was wholly unaware.
  The court does have the power to move of its own motion where, in the

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  course of evidence given to it, it appears that a criminal offence is involved—if it becomes clear that a transaction is tainted with illegality. That is one aspect. The court may also move of its own motion under Section 4 of the Attachment of Earnings Act 1971. The court of its own motion can change its proceedings from county court to High Court, sometimes to the detriment of one party or the other, or perhaps to their advantage. But I do not think it conceivable that the court would use its power without considering the interests of both the creditor and the debtor. The rules will lay down the procedure.
  The non-lawyer of the Committee, the hon. Member for Mid-Sussex (Mr. Renton), has nothing to apologise for for not being a lawyer, because he always argues his case with skill and care. I intervened in the course of his remarks about Clause 7 because I thought he had misunderstood the purpose of the provision. I shall not take up the additional quarter of an hour which has been offered, but I do not think that, if the hon. Gentleman looks again at the provision, he will conclude that the non-executive director will find himself in any greater jeopardy under this provision than he does under existing law. At present, under Section 188 of the Companies Act 1948 a court has the power, where fraudulent activity has been committed, to disqualify a director. Therefore, every director lives within that peril. We know that it would be unrealistic to expect directors to take this type of situation into account when they become directors of a company.
  The hon. Gentleman said that under Clause 5 an additional burden would be imposed upon the official receiver, who would not be competent to deal with the matter. I do not accept that it is a quasi-judicial approach—a judgment—which the official receiver necessarily has to adopt. The official receiver, when he considers matters for public

  THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:
  Pink, Mr. R. Bonner (Chairman)
  Cook, Mr. Robin F.
  Davis, Mr. Clinton
  Dormand, Mr.
  Dunnett, Mr.
  Evans, Mr. Ioan
  Ford, Mr.
  Gould, Mr.
  Higgins, Mr.
  Percival, Mr.
  Renton, Mr. Tim
  Shersby, Mr.
  Stradling Thomas, Mr. John
  Woodall, Mr.
  examination concerning the conduct of the affairs of the insolvent, necessarily has to consider a variety of matters. He has to make judgments as to how a case is to be deployed at the public examination and so on. I do not think that radically different matters would have to come within his competence in this connection. It is right to say that there is the closest possible relationship between the official receiver and a debtor in the everyday course of bankruptcy matters.
  The hon. Member for Worthing contemplated a Bill of truly gargantuan proportions for company law reform. He welcomed the idea of a series of interlocking Bills. I should not dissent from that proposition, but I dare not say too much about that at this stage. One might almost think that it could appear in one of the colour supplements to which he alluded. I shall certainly take into account the suggestion the hon. Gentleman made that I should circulate certain comparative figures.
  Basically, the hon. Gentleman dealt with matters to which I have already referred. I maintain the point which he stressed about maintaining a balance between the creditor and the debtor. We may disagree about certain areas. We may disagree about whether we are maintaining the balance properly, but this is a useful measure. The Committee will be able to have some useful discussions, perhaps rather technical. However, I hope that the Bill will go through relatively unscathed. As I indicated earlier, my mind is not made up against helpful and constructive suggestions for amendment which might come from either side of the Committee.
  Question put and agreed to.
  Ordered,
  That the Chairman do now report to the House that the Committee recommend that the Insolvency Bill [Lords] ought to be read a Second time.
  Committee rose at One o'clock.