HC Deb 26 June 1984 vol 62 cc835-50

Lords amendment: No. 6, in page 3, line 27, leave out for all authorities falling within that class and insert either for all authorities falling within that class or for all of them which respectively have and have not been designated under that section in the previous financial year.

Motion made, and Question put, That this House doth agree with the Lords in the said amendment:—

The House divided: Ayes 244, Noes 190.

Division No. 382] [5.32 pm
AYES
Adley, Robert Boscawen, Hon Robert
Aitken, Jonathan Bottomley, Peter
Alexander, Richard Bottomley, Mrs Virginia
Alison, Rt Hon Michael Bowden, A. (Brighton K'to'n)
Amess, David Boyson, Dr Rhodes
Ancram, Michael Braine, Sir Bernard
Ashby, David Bright, Graham
Aspinwall, Jack Brinton, Tim
Atkins, Rt Hon Sir H. Brown, M. (Brigg & Cl'thpes)
Atkins, Robert (South Ribble) Browne, John
Baker, Nicholas (N Dorset) Bruinvels, Peter
Banks, Robert (Harrogate) Bryan, Sir Paul
Batiste, Spencer Buck, Sir Antony
Bellingham, Henry Budgen, Nick
Bendall, Vivian Butcher, John
Berry, Sir Anthony Butler, Hon Adam
Best, Keith Butterfill, John
Biffen, Rt Hon John Carlisle, John (N Luton)
Biggs-Davison, Sir John Carttiss, Michael
Blaker, Rt Hon Sir Peter Cash, William
Body, Richard Chapman, Sydney
Clark, Sir W. (Croydon S) Jackson, Robert
Clarke, Rt Hon K. (Rushcliffe) Jenkin, Rt Hon Patrick
Clegg, Sir Walter Johnson-Smith, Sir Geoffrey
Cockeram, Eric Jones, Gwilym (Cardiff N)
Colvin, Michael Jones, Robert (W Herts)
Conway, Derek Joseph, Rt Hon Sir Keith
Coombs, Simon Kellett-Bowman, Mrs Elaine
Cope, John Kershaw, Sir Anthony
Cranborne, Viscount Key, Robert
Currie, Mrs Edwina King, Rt Hon Tom
Dorrell, Stephen Knight, Gregory (Derby N)
Douglas-Hamilton, Lord J. Knowles, Michael
Dover, Den Lang, Ian
du Cann, Rt Hon Edward Latham, Michael
Dunn, Robert Lee, John (Pendle)
Durant, Tony Leigh, Edward (Gainsbor'gh)
Dykes, Hugh Lennox-Boyd, Hon Mark
Edwards, Rt Hon N. (P'broke) Lester, Jim
Eggar, Tim Lewis, Sir Kenneth (Stamf'd)
Emery, Sir Peter Lilley, Peter
Evennett, David Lloyd, Ian (Havant)
Eyre, Sir Reginald Lloyd, Peter, (Fareham)
Fairbairn, Nicholas Lord, Michael
Fallon, Michael Luce, Richard
Farr, Sir John Lyell, Nicholas
Fenner, Mrs Peggy McCrindle, Robert
Fletcher, Alexander McCurley, Mrs Anna
Fookes, Miss Janet Macfarlane, Neil
Forman, Nigel MacKay, John (Argyll & Bute)
Forsyth, Michael (Stirling) Maclean, David John
Fox, Marcus McQuarrie, Albert
Franks, Cecil Madel, David
Fraser, Peter (Angus East) Major, John
Freeman, Roger Malins, Humfrey
Galley, Roy Malone, Gerald
Gardiner, George (Reigate) Maples, John
Gardner, Sir Edward (Fylde) Marland, Paul
Glyn, Dr Alan Marlow, Antony
Goodlad, Alastair Marshall, Michael (Arundel)
Gow, Ian Mates, Michael
Gower, Sir Raymond Mather, Carol
Grant, Sir Anthony Maude, Hon Francis
Greenway, Harry Mawhinney, Dr Brian
Gregory, Conal Maxwell-Hyslop, Robin
Ground, Patrick Mellor, David
Grylls, Michael Merchant, Piers
Gummer, John Selwyn Miller, Hal (B'grove)
Hamilton, Neil (Tatton) Mills, Iain (Meriden)
Hampson, Dr Keith Mills, Sir Peter (West Devon)
Hanley, Jeremy Mitchell, David (NW Hants)
Hargreaves, Kenneth Moate, Roger
Harris, David Monro, Sir Hector
Harvey, Robert Montgomery, Fergus
Haselhurst, Alan Moore, John
Havers, Rt Hon Sir Michael Moyninan, Hon C.
Hawkins, C. (High Peak) Neale, Gerrard
Hawksley, Warren Nelson, Anthony
Hayes, J. Normanton, Tom
Hayhoe, Barney Oppenheim, Philip
Hayward, Robert Oppenheim, Rt Hon Mrs S.
Heddle, John Ottaway, Richard
Henderson, Barry Page, Richard (Herts SW)
Hickmet, Richard Parkinson, Rt Hon Cecil
Higgins, Rt Hon Terence L Patten, Christopher (Bath)
Hind, Kenneth Patten, John (Oxford)
Hirst, Michael Pawsey, James
Hogg, Hon Douglas (Gr'th'm) Pollock, Alexander
Holland, Sir Philip (Gedling) Powell, William (Corby)
Hooson, Tom Powley, John
Hordern, Peter Price, Sir David
Howard, Michael Proctor, K. Harvey
Howarth, Alan (Stratf'd-on-A) Raffan, Keith
Howarth, Gerald (Cannock) Raison, Rt Hon Timothy
Howell, Rt Hon D. (G'ldford) Rees, Rt Hon Peter (Dover)
Hubbard-Miles, Peter Renton, Tim
Hunt, David (Wirral) Rhodes James, Robert
Hunt, John (Ravensbourne) Rhys Williams, Sir Brandon
Hunter, Andrew Ridley, Rt Hon Nicholas
Hurd, Rt Hon Douglas Ridsdale, Sir Julian
Irving, Charles Rifkind, Malcolm
Roberts, Wyn (Conwy) Thompson, Patrick (N'ich N)
Robinson, Mark (N'port W) Thorne, Neil (Ilford S)
Roe, Mrs Marion Thornton, Malcolm
Rost, Peter Thurnham, Peter
Ryder, Richard van Straubenzee, Sir W.
Sainsbury, Hon Timothy Vaughan, Sir Gerard
St. John-Stevas, Rt Hon N. Viggers, Peter
Shaw, Giles (Pudsey) Wakeham, Rt Hon John
Shepherd, Colin (Hereford) Walden, George
Shepherd, Richard (Aldridge) Walker, Bill (T'side N)
Shersby, Michael Watson, John
Silvester, Fred Watts, John
Sims, Roger Wells, Bowen (Hertford)
Skeet, T. H. H. Wheeler, John
Smith, Tim (Beaconsfield) Whitfield, John
Speller, Tony Wiggin, Jerry
Steen, Anthony Winterton, Nicholas
Stern, Michael Wood, Timothy
Stewart, Allan (Eastwood) Young, Sir George (Acton)
Stokes, John
Temple-Morris, Peter Tellers for the Ayes:
Thomas, Rt Hon Peter Mr. Archie Hamilton and Mr. Michael Neubert.
Thompson, Donald (Calder V)
NOES
Abse, Leo Douglas, Dick
Alton, David Duffy, A. E. P.
Anderson, Donald Dunwoody, Hon Mrs G.
Archer, Rt Hon Peter Eastham, Ken
Ashdown, Paddy Evans, John (St. Helens N)
Ashley, Rt Hon Jack Ewing, Harry
Ashton, Joe Fatchett, Derek
Atkinson, N. (Tottenham) Faulds, Andrew
Banks, Tony (Newham NW) Field, Frank (Birkenhead)
Barnett, Guy Fields, T. (L'pool Broad Gn)
Barron, Kevin Fisher, Mark
Beckett, Mrs Margaret Flannery, Martin
Beith, A. J. Foot, Rt Hon Michael
Bell, Stuart Forrester, John
Benn, Tony Foster, Derek
Bennett, A. (Dent'n & Red'sh) Fraser, J. (Norwood)
Bermingham, Gerald Freud, Clement
Blair, Anthony George, Bruce
Boothroyd, Miss Betty Godman, Dr Norman
Boyes, Roland Golding, John
Brown, Gordon (D'f'mline E) Gould, Bryan
Brown, N. (N'c'tle-u-Tyne E) Gourlay, Harry
Brown, R. (N'c'tle-u-Tyne N) Hamilton, W. W. (Central Fife)
Brown, Ron (E'burgh, Leith) Hancock, Mr. Michael
Bruce, Malcolm Harman, Ms Harriet
Buchan, Norman Harrison, Rt Hon Walter
Callaghan, Jim (Heyw'd & M) Hart, Rt Hon Dame Judith
Campbell, Ian Haynes, Frank
Canavan, Dennis Healey, Rt Hon Denis
Carter-Jones, Lewis Heffer, Eric S.
Cartwright, John Hogg, N. (C'nauld & Kilsyth)
Clark, Dr David (S Shields) Holland, Stuart (Vauxhall)
Clarke, Thomas Home Robertson, John
Clay, Robert Howell, Rt Hon D. (S'heath)
Clwyd, Mrs Ann Howells, Geraint
Cocks, Rt Hon M. (Bristol S.) Hughes, Dr. Mark (Durham)
Cohen, Harry Hughes, Roy (Newport East)
Concannon, Rt Hon J. D. Hughes, Sean (Knowsley S)
Conlan, Bernard Hughes, Simon (Southwark)
Cook, Robin F. (Livingston) Janner, Hon Greville
Corbett, Robin Jenkins, Rt Hon Roy (Hillh'd)
Corbyn, Jeremy John, Brynmor
Craigen, J. M. Jones, Barry (Alyn & Deeside)
Crowther, Stan Kaufman, Rt Hon Gerald
Cunliffe, Lawrence Kennedy, Charles
Cunningham, Dr John Kilroy-Silk, Robert
Dalyell, Tam Kinnock, Rt Hon Neil
Davies, Rt Hon Denzil (L'lli) Lambie, David
Davies, Ronald (Caerphilly) Leighton, Ronald
Davis, Terry (B'ham, H'ge H'l) Lewis, Ron (Carlisle)
Deakins, Eric Lewis, Terence (Worsley)
Dewar, Donald Litherland, Robert
Dixon, Donald Lloyd, Tony (Stretford)
Dobson, Frank Lofthouse, Geoffrey
Dormand, Jack McCartney, Hugh
McCrea, Rev William Robertson, George
McDonald, Dr Oonagh Robinson, G. (Coventry NW)
McKay, Allen (Penistone) Rogers, Allan
McKelvey, William Rooker, J. W.
Mackenzie, Rt Hon Gregor Ross, Ernest (Dundee W)
McNamara, Kevin Rowlands, Ted
McTaggart, Robert Sedgemore, Brian
Madden, Max Sheerman, Barry
Marek, Dr John Sheldon, Rt Hon R.
Marshall, David (Shettleston) Shore, Rt Hon Peter
Martin, Michael Short, Ms Clare (Ladywood)
Mason, Rt Hon Roy Short, Mrs R.(W'hampt'n NE)
Maxton, John Silkin, Rt Hon J.
Maynard, Miss Joan Skinner, Dennis
Meadowcroft, Michael Smith, C.(Isl'ton S & F'bury)
Michie, William Smith, Rt Hon J. (M'kl'ds E)
Mikardo, Ian Soley, Clive
Mitchell, Austin (G't Grimsby) Spearing, Nigel
Molyneaux, Rt Hon James Steel, Rt Hon David
Morris, Rt Hon A. (W'shawe) Stott, Roger
Morris, Rt Hon J. (Aberavon) Strang, Gavin
Nellist, David Straw, Jack
Oakes, Rt Hon Gordon Taylor, Rt Hon John David
O'Neill, Martin Thomas, Dr R. (Carmarthen)
Orme, Rt Hon Stanley Thompson, J. (Wansbeck)
Owen, Rt Hon Dr David Thorne, Stan (Preston)
Park, George Tinn, James
Parry, Robert Torney, Tom
Patchett, Terry Warden, Gareth (Gower)
Pavitt, Laurie Wareing, Robert
Pendry, Tom Weetch, Ken
Penhaligon, David Welsh, Michael
Pike, Peter White, James
Powell, Rt Hon J. E. (S Down) Wigley, Dafydd
Powell, Raymond (Ogmore) Williams, Rt Hon A.
Prescott, John Winnick, David
Radice, Giles Wrigglesworth, Ian
Redmond, M. Young, David (Bolton SE)
Rees, Rt Hon M. (Leeds S)
Richardson, Ms Jo Tellers for the Noes:
Roberts, Allan (Bootle) Mr. James Hamilton and Mr. John McWilliam.
Roberts, Ernest (Hackney N)

Question accordingly agreed to. [Special Entry.]

Lords amendment: No. 7, in page 4, line 18, at end insert— ( ) The Secretary of State's decision under subsectio (5) and any requirements imposed by him under subsection (6) above shall be stated in a notice served by him on the authority concerned.

Read a Second time.

Mr. Straw

I beg to move amendment (a), as an amendment to the Lords amendment, at end add 'and a copy of such notice shall be laid in the form of a report before the House of Commons within 28 days of such service on the authority as aforesaid.'. The Government's majority of only 54 on the previous vote was one of the smallest that has occurred in this Parliament. It shows that support for the Government is withering away, not just daily but hourly. The voting was 243 to 188—a majority of 55—at 5 o'clock, and now the majority is down to 54. No doubt with the skill of the speaking Whip, the hon. Member for Huntingdon (Mr. Major), the majority will be smaller after the next vote.

Amendment (a) raises an important issue about the role of the House and the possibility of the House checking the arbitrary abuse of power by the Secretary of State.

Under the Bill as drafted and sent to the other place by this House, it is open to an authority that has been designated for rate capping to seek a derogation from rate capping by the Secretary of State. I shall wait a second, because I know that the Minister needs to be present to reply to the debate. I am sure that he would not wish the Front Bench to be taken over by the alliance. That has brought him back quickly.

The derogation procedure, however, is oppressive on the authorities that seek it because the Secretary of State might not impose a lower expenditure limit than the one he orginally set. Where the Secretary of State imposes a higher limit, he is given wide and unfettered powers to control the financial and other management of the authority involved.

I shall read clause 3(6) which is the relevant subsection: Where under subsection (5) above the Secretary of State re-determines a level at a greater amount he may impose on the authority in question such requirements relating to its expenditure or financial management as he thinks appropriate; and it shall be the duty of the authority to comply with any such requirements and to report to the Secretary of State whenever he so directs on the extent to which those requirements have been complied with. We debated this subject at great length. These powers provide the Secretary of State with perhaps the greatest potential for controlling individual local authorities ever taken by a Secretary of State in any legislation.

If an authority is foolish enough to seek a derogation from the Secretary of State, then merely by increasing its expenditure limits by one or two pounds he would take control of that authority and could regulate not just the finance committee which determines the overall expenditure level, but every committee that makes decisions about the level of services. The Under-Secretary shakes his head, but that is what the clause means. It is what the Secretary of State intends, unless the Under-Secretary disabuses me. I went into print over this in the Municipal Journal because authorities could place themselves in even greater jeopardy of direct control over their services, expenditure or financial management. I suggested that authorities would be extremely unwise ever to seek derogation unless, as I said, the Secretary of State gives the clearest advance commitments about the way in which he intends to use the powers and says that he would not use them to seek to control an authority that was going to be rate capped.

These powers give the Secretary of State the opportunity to make different decisions for different authorities. An authority such as Portsmouth could be caught inadvertently as a result of the measures that the Secretary of State was using to ensure that Sheffield was in the frame for rate capping, which is the whole purpose of the Bill. We know that the political considerations are that crude. We know that it is a stitch-up. We know that a fine intellectual arrangement to control overall Government expenditure was not the genesis of the Bill. If that were the case, authorities spending less than £10 million would be included in the scheme.

The Bill is simply a crude, politically motivated and selectively vindictive attempt to control a few Labour authorities which have a mandate from their own people but happen to cause discomfort to the Government and particularly to the authoritarian tendencies of the Prime Minister. We know what lies behind the scheme. That is why we are deeply suspicious of the powers that the Secretary of State is taking under it. We also know that if Portsmouth or any other Tory authority was included in the list of rate-capped authorities so that another Labour authority which the Government wished to fix in the frame, such as Sheffield, could also be included, the Secretary of State would invite Portsmouth to seek derogation and would no doubt, on the flimsiest of grounds and undertakings, exempt that authority because it was under Conservative control.

That is the reality. Cerk-Anly a Conservative authority would not worry in the least about seeking derogation from the Secretary of State. It would be given a nod and a wink. It would be given to understand that if it made a few minor undertakings it would be exempted from the impact of the Rates Bill. By the same token, it would be an unwise Labour authority which sought derogation because of the much greater risks which would flow from derogation by a Secretary of State opposed to(that authority.

In the other place, the Government, by Lords amendment No. 7, stipulated that any requirements imposed on an authority relating to its expenditure or financial management should be served in a notice by the Secretary of State on the authority concerned, so that there could be no dubiety about the nature of the requirements. Given the scheme of the Bill, that is the correct thing to do, but it is important that, as amendment (a) provides, the details of that notice should be laid before the House within 28 days of such service on the authority". An amendment to that effect was moved in the House of Lords on 5 June by Baroness Nicol. In reply, the Minister of State, Lord Bellwin, said that he would consider the matter and would write to the baroness. On 11 June he did so. I hate rarely read such a disingenuous piece of nonsense as that letter, although I accept that Lord Bellwin goes in for that kind of thing.

Lord Bellwin noted that Baroness Nicol had suggested that, under this procedure, the Secretary of State could show undue favour to an authority, without Parliament being aware of what was being done. He continued: I am afraid that I do not accept that line of argument. Secretaries of State do not act in that way. The present Government act in exactly that way. They have tried to discriminate in an outrageous way against the GLC by fixing special targets much more onerous than those fixed for any other authority. They have discriminated against the metropolitan counties. They have sought to help their friends—sometimes with success and sometimes without. Indeed, they have promised to help their friends. No Government have ever been more partisan than the present Government. No Government have been less willing to follow the true rule of law and to be fair to their friends and adversaries alike. They are fully intent on showing undue favour to their friends.

It is therefore important, not necessarily that Parliament should have power to debate the derogations—that is not what we seek—but that Parliament should be told the nature of the derogations and have the opportunity to hold the Secretary of State to account if it deems that such action is necessary.

If the Secretary of State says that we are fretting about nothing, I have to remind him of the experience in Scotland, where there have been similar developments. Initially, five authorities were designated in 1983 by the Secretary of State for Scotland for the equivalent of rate capping. Then, hey presto! As a result of representations, the authority that had exceeded the expenditure guidelines by the greatest amount—not the authority that was nearest to the guidelines—was suddenly removed from the list of authorities that were to be controlled by the Secretary of State. There is a wry smile on the Parliamentary Under-Secretary's face. The authority concerned was Shetland, and it would have been deeply embarrassing for the Government if Shetland had dug its heels in over rate capping, because of the power that Shetland council exercises over oil development.

The Government respond only to displays of power. They do not respond to reasoned arguments. The Government recognised the power in Shetland's hands and decided to concede. The authority that had exceeded the guideline by 46 per cent. was exempted altogether.

The arguments used by the Secretary of State for Scotland when the issue was debated were totally spurious. He said that the Government had come across new information. The new information was that oil development was taking place in Shetland, that Shetland had a mobile population, that there was a large amount of housing there, and so on. That information could not possibly have been new to the Secretary of State or to the Scottish Office.

It is clear that the aim of the Secretary of State for Scotland was simply to hit four Labour authorities, and that he was willing unscrupulously to exempt the Shetland authority—even though, according to the Secretary of State's own selective measurements, that authority was the worst overspender—because of the embarrassment that could have ensued. In so doing, he cleared the way so that the authorities remaining to be rate-capped were all Labour controlled.

I hope that the Parliamentary Under-Secretary will not treat us to any of the rubbish about how fair the Government will be, and how they are above the party battle. The Bill is a partisan attempt to hit democratically elected Labour authorities. It is rooted in unfairness. The derogation principles are profoundly unfair and give the Secretary of State arbitrary power. The very least that we can expect is that the Government should have the courage to tell the House on what basis they will exempt authorities from the draconian powers that the Secretary of State is given under subsequent clauses of the Bill.

Mr. Simon Hughes (Southwark and Bermondsey)

The amendment under discussion will give the House only a marginally greater influence on matters which are already slipping out of the control of people who have been democratically elected and into the hands of the Government. The hon. Member for Blackburn (Mr. Straw) will accept that at this stage we can do no more than try to restrain to some degree the Secretary of State's power to make decisions and redeterminations and regularly affect the spending power of local authorities.

One of the terrifying aspects of the situation is that, whatever expenditure limits are determined, they are no more or less valid than any other set of limits that could be determined at any other time. I believe that the Secretary of State is at the moment working on later criteria. At the end of the day, Portsmouth or one or two other Tory authorities may or may not be caught by those criteria. The criteria will all be related to indices—indices of the number of the aged in the population, the length of coastline, the amount of home ownership or the amount of money that needs to be spent on the disabled. There is a wide range of criteria. All those things can be put in a package that is regarded as the most suitable for the time being, but ultimately it is a subjective package.

The Government are trying to determine what they believe are the right levels of expenditure. They will be given power to alter how those definitions are made so that if they are found unsatisfactory one year they can be different the next, and authorities that are rate capped one year will not be the next.

6 pm

Amendment (a) enables the House to have a copy of the notice that will be served on the local authority. An anomaly was spotted when the Bill went to another place. It is that, although an authority was to be told about the original determination, it was not to be informed about a redetermination. A procedure such as is laid out in amendment (a) is desirable if the House is forced by the Government's majority in terms of Members, though not in terms of popular support—their majority is distorted by the system. At least we should be able to see the cases that are difficult and are the subject of review.

The Government having rightly made a concession in another place, the Minister should say that a notice will be issued so that the local authority concerned will know where it stands if, in the light of additional factors, the amount of its rates is altered. Because the law will give the Secretary of State complete power and subjectivity in regard to how the law is employed, it is important that the House should be able to have the arguments, facts and figures on each case that is the subject of the exceptional procedure. Second determinations will be rare but when they occur we should all benefit by knowing how the Government establish rate levels. We should then be able to argue in an attempt to improve the system which, for the time being, we shall have to put up with. If that provision is extended to our having reports on other matters, so much the better.

The Government should not regard amendment (a) as providing anything other than an opportunity for the House to do its duty—to act as a watchdog on the Secretary of State and the Government. We can only perform that duty if we have information. Amendment (a) is one means of obtaining information.

Sir George Young

Lords amendment No. 7 was moved in the other place by the noble Lady Baroness Gardner of Parkes. We accepted it because it fills something of gap in the provisions of the Bill as it left this House. Lords amendment No. 7 deals with the point in rate limitation at which the Secretary of State has carefully considered an application for the redetermination of a local authority's expenditure level. It requires him to notify the authority of his decision and, if its expenditure level were increased, of any requirements he might impose on it.

I should make it clear that the Government always intended to do that but we were happy to accept the amendment to remove any uncertainty that there might have been by placing a duty on the Secretary of State to inform an authority formally of his decisions. By agreeing with their Lordships we shall ensure that, when an authority is to have a requirement placed upon it, it will receive a clear written notice of what is required. Moreover, the amendment establishes a clear end point for the procedure by which an authority may apply and have its expenditure level redetermined.

The hon. Member for Blackburn (Mr. Straw) reasserted his allegation that the whole Bill is a stitch up. He said that the Secretary of State could act arbitrarily according to political whim. He completely overlooked what my right hon. Friend said in reply to an earlier debate to the effect that the Secretary of State is obliged to act reasonably and that, if he does not, he can be taken to the courts. That is a real sanction that Opposition Members have consistently overlooked.

The hon. Member for Southwark and Bermondsey (Mr. Hughes) implied that the House was not democratically elected. If he looks at the report of the beginning of his speech, he will see that that is what he implied, doubtless in error. We dealt with this matter at some length in Committee and it will not surprise Opposition Members to learn that the arguments are basically the same. Amendment (a) would require the Secretary of State, after notifying the authority of his decision on an application for a redetermination, to lay a report before the House within 28 days. Conservative Members do not accept that such an amendment is necessary.

Throughout the passage of the Bill we have made it clear that expenditure levels will be only an intermediate stage in the process of rate limitation. They are a stepping stone to the setting of rate limits. They have no statutory effect once the rate limit has been settled. They will then have no further purpose. That is why we have not provided for Parliament to become deeply involved in the setting and redetermining of expenditure levels.

While any redetermination of an expenditure level by the Secretary of State might involve a departure from the original principles applied to all authorities—or at least all authorities in the same class—I cannot agree that this, of itself, means that a special degree of scrutiny is necessary.

If it is suggested that the Secretary of State might depart from the principles in a partisan way, of course I repudiate any such suggestion. The Secretary of State will be accountable to this House and in the courts for his decisions, and he must conduct himself properly. Even if, in our wildest imagination, we could conceive of special treatment being given when it was not merited by the facts that were put before the Secretary of State, such an occurrence could not be hidden for long, with or without a report.

The Secretary of State's decisions will be in the public domain, irrespective of whether they are reported in a formal document before Parliament. In the same way, if he attempted to impose unreasonable requirements on an authority in return for a redetermination at a higher level, that would soon become known.

Mr. Straw

The Minister said that the documents will be in the public domain. I therefore assume that if an hon. Member tables a question asking that the notice be printed in the Official Report, the Secretary of State would be bound to answer in full. If that is the case, why does the Minister not accept amendment (a)?

Sir George Young

Because I do not need to accept it. The information will be in the public domain. The hon. Gentleman will find that Lords Amendment No. 7 says that any decision shall be stated in a notice served by him on the authority concerned. Councillors in the authority concerned would have the information, and if the hon. Gentleman asked the Secretary of State to publish a letter that he had sent to an authority under clause 3 no doubt the Secretary of State would be obliged to reply and give details of his decision. I do not think that there is much between us on this point. As the hon. Gentleman says, amendment (a) does not secure debate on the report. Dealings with the local authority should be brought to the House's attention at the appropriate stage, which is when the rate level is fixed.

In the meantime, there are executive actions which the Bill rightly leaves to the Secretary of State and the local authority concerned. The opportunity for debate and approval, or disagreement, in Parliament comes when disagreed rate limits are tabled in an order. Even if an authority had agreed a limit because it had been based on a favourable redetermination, hon. Members representing other authorities which felt that they had not been so favourably treated would surely bring the matter before the House. We have provided for an order which will have to be debated and approved at that stage. That is the guarantee that the issues will be aired properly.

The hon. Member for Blackburn referred to Scotland, where the powers are different from those that we are taking in the Bill. There is, however, a broad parallel of the principles. Some authorities may have special circumstances, but these can be taken into account only at the second stage. There is nothing capricious about that. In the case of the Shetland Islands, there were a large number of unique circumstances arising from North Sea oil which carried with them special financial consequences. I do not doubt that such factors may well be known beforehand, but in order to operate fairly we must apply principles that we would expect to give the right expenditure level across all authorities.

I hope that the House will agree with the Lords in the said amendment, and in the light of what I have said—given the small difference between us—I hope that the Opposition will not press amendment (a).

Question put, That the amendment to the Lords amendment be made:—

The House divided: Ayes 181, Noes 237.

Division No. 383] [6.10 pm
AYES
Abse, Leo Clarke, Thomas
Alton, David Clay, Robert
Anderson, Donald Cocks, Rt Hon M. (Bristol S.)
Archer, Rt Hon Peter Cohen, Harry
Ashdown, Paddy Concannon, Rt Hon J. D.
Ashley, Rt Hon Jack Conlan, Bernard
Ashton, Joe Cook, Robin F. (Livingston)
Atkinson, N. (Tottenham) Corbett, Robin
Barnett, Guy Corbyn, Jeremy
Barron, Kevin Craigen, J. M.
Beckett, Mrs Margaret Crowther, Stan
Beith, A. J. Cunliffe, Lawrence
Bell, Stuart Cunningham, Dr John
Benn, Tony Dalyell, Tam
Bennett, A. (Dent'n & Red'sh) Davies, Rt Hon Denzil (L'lli)
Bermingham, Gerald Davies, Ronald (Caerphilly)
Blair, Anthony Davis, Terry (B'ham, H'ge H'l)
Boyes, Roland Deakins, Eric
Brown, Gordon (D'f'mline E) Dewar, Donald
Brown, N. (N'c'tle-u-Tyne E) Dixon, Donald
Brown, R. (N'c'tle-u-Tyne N) Dobson, Frank
Brown, Ron (E'burgh, Leith) Dormand, Jack
Bruce, Malcolm Douglas, Dick
Buchan, Norman Duffy, A. E. P.
Callaghan, Jim (Heyw'd & M) Dunwoody, Hon Mrs G.
Campbell, Ian Eastham, Ken
Canavan, Dennis Evans, John (St. Helens N)
Carter-Jones, Lewis Ewing, Harry
Cartwright, John Fatchett, Derek
Clark, Dr David (S Shields) Faulds, Andrew
Field, Frank (Birkenhead) Morris, Rt Hon J. (Aberavon)
Fields, T. (L'pool Broad Gn) Nellist, David
Fisher, Mark Oakes, Rt Hon Gordon
Flannery, Martin O'Neill, Martin
Foot, Rt Hon Michael Orme, Rt Hon Stanley
Forrester, John Owen, Rt Hon Dr David
Foster, Derek Park, George
Fraser, J. (Norwood) Parry, Robert
Freud, Clement Patchett, Terry
Godman, Dr Norman Pavitt, Laurie
Golding, John Pendry, Tom
Gould, Bryan Penhaligon, David
Gourlay, Harry Pike, Peter
Hamilton, W. W. (Central Fife) Powell, Rt Hon J. E. (S Down)
Hancock, Mr. Michael Powell, Raymond (Ogmore)
Harman, Ms Harriet Prescott, John
Harrison, Rt Hon Walter Radice, Giles
Hart, Rt Hon Dame Judith Redmond, M.
Hattersley, Rt Hon Roy Rees, Rt Hon M. (Leeds S)
Haynes, Frank Richardson, Ms Jo
Healey, Rt Hon Denis Roberts, Allan (Bootle)
Hogg, N. (C'nauld & Kilsyth) Roberts, Ernest (Hackney N)
Holland, Stuart (Vauxhall) Robertson, George
Home Robertson, John Robinson, G. (Coventry NW)
Howell, Rt Hon D. (S'heath) Rogers, Allan
Howells, Geraint Rooker, J. W.
Hughes, Dr. Mark (Durham) Ross, Ernest (Dundee W)
Hughes, Roy (Newport East) Rowlands, Ted
Hughes, Sean (Knowsley S) Sedgemore, Brian
Jenkins, Rt Hon Roy (Hillh'd) Sheerman, Barry
John, Brynmor Sheldon, Rt Hon R.
Jones, Barry (Alyn & Deeside) Shore, Rt Hon Peter
Kaufman, Rt Hon Gerald Short, Ms Clare (Ladywood)
Kilroy-Silk, Robert Short, Mrs R.(W'hampt'n NE)
Lambie, David Silkin, Rt Hon J.
Lamond, James Skinner, Dennis
Leighton, Ronald Smith, C.(Isl'ton S & F'bury)
Lewis, Ron (Carlisle) Soley, Clive
Lewis, Terence (Worsley) Spearing, Nigel
Litherland, Robert Stott, Roger
Lloyd, Tony (Stretford) Strang, Gavin
Lofthouse, Geoffrey Straw, Jack
McCartney, Hugh Taylor, Rt Hon John David
McCrea, Rev William Thomas, Dr R. (Carmarthen)
McDonald, Dr Oonagh Thompson, J. (Wansbeck)
McKay, Allen (Penistone) Thorne, Stan (Preston)
McKelvey, William Tinn, James
Mackenzie, Rt Hon Gregor Torney, Tom
McNamara, Kevin Wainwright, R.
McTaggart, Robert Wardell, Gareth (Gower)
Madden, Max Wareing, Robert
Marek, Dr John Weetch, Ken
Marshall, David (Shettleston) Welsh, Michael
Martin, Michael White, James
Mason, Rt Hon Roy Wigley, Dafydd
Maxton, John Williams, Rt Hon A.
Maynard, Miss Joan Winnick, David
Meacher, Michael Young, David (Bolton SE)
Meadowcroft, Michael
Michie, William Tellers for the Ayes:
Mitchell, Austin (G't Grimsby) Mr. James Hamilton and Mr. John McWilliam.
Molyneaux, Rt Hon James
Morris, Rt Hon A. (W'shawe)
NOES
Adley, Robert Berry, Sir Anthony
Aitken, Jonathan Best, Keith
Alexander, Richard Biffen, Rt Hon John
Amess, David Biggs-Davison, Sir John
Ancram, Michael Blaker, Rt Hon Sir Peter
Arnold, Tom Body, Richard
Ashby, David Boscawen, Hon Robert
Aspinwall, Jack Bottomley, Peter
Atkins, Rt Hon Sir H. Bottomley, Mrs Virginia
Atkins, Robert (South Ribble) Bowden, A. (Brighton K'to'n)
Baker, Nicholas (N Dorset) Boyson, Dr Rhode
Batiste, Spencer Braine, Sir Bernard
Bellingham, Henry Bright, Graham
Bendall, Vivian Brinton, Tim
Brown, M. (Brigg & Cl'thpes) Holland, Sir Philip (Gedling)
Browne, John Holt, Richard
Bruinvels, Peter Hooson, Tom
Bryan, Sir Paul Hordern, Peter
Buck, Sir Antony Howard, Michael
Budgen, Nick Howarth, Alan (Stratf'd-on-A)
Butcher, John Howarth, Gerald (Cannock)
Butler, Hon Adam Howell, Rt Hon D. (G'ldford)
Butterfill, John Hubbard-Miles, Peter
Carlisle, John (N Luton) Hunt, David (Wirral)
Cash, William Hunt, John (Ravensbourne)
Chapman, Sydney Hurd, Rt Hon Douglas
Clark, Sir W. (Croydon S) Irving, Charles
Clarke, Rt Hon K. (Rushcliffe) Jackson, Robert
Clegg, Sir Walter Jenkin, Rt Hon Patrick
Cockeram, Eric Johnson-Smith, Sir Geoffrey
Colvin, Michael Jones, Gwilym (Cardiff N)
Conway, Derek Jones, Robert (W Herts)
Coombs, Simon Joseph, Rt Hon Sir Keith
Cope, John Kellett-Bowman, Mrs Elaine
Cranborne, Viscount Key, Robert
Currie, Mrs Edwina King, Rt Hon Tom
Dorrell, Stephen Knight, Gregory (Derby N)
Douglas-Hamilton, Lord J. Knowles, Michael
Dover, Den Latham, Michael
du Cann, Rt Hon Edward Lawrence, Ivan
Dunn, Robert Lee, John (Pendle)
Durant, Tony Leigh, Edward (Gainsbor'gh)
Dykes, Hugh Lennox-Boyd, Hon Mark
Edwards, Rt Hon N. (P'broke) Lester, Jim
Eggar, Tim Lilley, Peter
Emery, Sir Peter Lloyd, Ian (Havant)
Evennett, David Lloyd, Peter, (Fareham)
Eyre, Sir Reginald Lord, Michael
Fairbairn, Nicholas Luce, Richard
Fallon, Michael Lyell, Nicholas
Farr, Sir John McCrindle, Robert
Fenner, Mrs Peggy McCurley, Mrs Anna
Fletcher, Alexander Macfarlane, Neil
Fookes, Miss Janet MacKay, John (Argyll & Bute)
Forman, Nigel Maclean, David John
Forsyth, Michael (Stirling) McQuarrie, Albert
Fox, Marcus Major, John
Franks, Cecil Malins, Humfrey
Fraser, Peter (Angus East) Malone, Gerald
Freeman, Roger Maples, John
Gale, Roger Marlow, Antony
Galley, Roy Marshall, Michael (Arundel)
Gardiner, George (Reigate) Mates, Michael
Gardner, Sir Edward (Fylde) Mather, Carol
Glyn, Dr Alan Mawhinney, Dr Brian
Goodlad, Alastair Maxwell-Hyslop, Robin
Gow, Ian Merchant, Piers
Gower, Sir Raymond Miller, Hal (B'grove)
Grant, Sir Anthony Mills, Iain (Meriden)
Greenway, Harry Mills, Sir Peter (West Devon)
Gregory, Conal Mitchell, David (NW Hants)
Ground, Patrick Moate, Roger
Grylls, Michael Monro, Sir Hector
Gummer, John Selwyn Montgomery, Fergus
Hamilton, Hon A. (Epsom) Moore, John
Hamilton, Neil (Tatton) Moynihan, Hon C.
Hampson, Dr Keith Mudd, David
Hanley, Jeremy Neale, Gerrard
Hargreaves, Kenneth Nelson, Anthony
Harris, David Normanton, Tom
Harvey, Robert Onslow, Cranley
Haselhurst, Alan Oppenheim, Philip
Havers, Rt Hon Sir Michael Oppenheim, Rt Hon Mrs S.
Hawkins, C. (High Peak) Ottaway, Richard
Hawksley, Warren Page, Richard (Herts SW)
Hayes, J. Parkinson, Rt Hon Cecil
Hayward, Robert Patten, Christopher (Bath)
Heddle, John Patten, John (Oxford)
Henderson, Barry Pawsey, James
Hickmet, Richard Powell, William (Corby)
Higgins, Rt Hon Terence L. Powley, John
Hind, Kenneth Price, Sir David
Hirst, Michael Proctor, K. Harvey
Hogg, Hon Douglas (Gr'th'm) Raffan, Keith
Raison, Rt Hon Timothy Tebbit, Rt Hon Norman
Renton, Tim Temple-Morris, Peter
Rhodes James, Robert Thomas, Rt Hon Peter
Rhys Williams, Sir Brandon Thompson, Donald (Calder V)
Ridsdale, Sir Julian Thompson, Patrick (N'ich N)
Rifkind, Malcolm Thorne, Neil (Ilford S)
Roberts, Wyn (Conwy) Thornton, Malcolm
Robinson, Mark (N'port W) Thurnham, Peter
Roe, Mrs Marion Trippier, David
Ryder, Richard van Straubenzee, Sir W.
Sainsbury, Hon Timothy Viggers, Peter
St. John-Stevas, Rt Hon N. Wakeham, Rt Hon John
Sayeed, Jonathan Walden, George
Shaw, Giles (Pudsey) Walker, Bill (T'side N)
Shepherd, Colin (Hereford) Warren, Kenneth
Shepherd, Richard (Aldridge) Watson, John
Shersby, Michael Watts, John
Silvester, Fred Wells, Bowen (Hertford)
Sims, Roger Whitfield, John
Skeet, T. H. H. Wiggin, Jerry
Smith, Tim (Beaconsfield) Wood, Timothy
Speller, Tony Young, Sir George (Acton)
Steen, Anthony
Stern, Michael Tellers for the Noes:
Stewart, Allan (Eastwood) Mr. Michael Neubert and Mr. Ian Lang.
Stokes, John

Question accordingly negatived.

Lords amendment agreed to.

Lords amendment No. 7 agreed to.

Lords amendment: No. 8, in page 4, line 18, at end insert— ( ) In making a decision under subsection (5) above the Secretary of State shall have regard to the extent (if any) to which the authority's proposed expenditure is to consist of contributions to charities registered, or excepted from registration, under section 4 of the Charities Act 1960.

Sir George Young

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Harold Walker)

I have to inform the House that Lords amendment No. 8 involves privilege.

Sir George Young

This amendment was introduced by the Government in the other place in response to concern that local authorities which were rate capped might make disproportionate savings at the expense of voluntary bodies rather than their own organisations. The amendment has been welcomed by the National Council for Voluntary Organisations.

I wish to make it clear that the Government do not accept that local authorities will in fact behave in the way which is feared. Generally they accept the real contribution which voluntary organisations can make through their cost-effective and flexible provision of essential local services. Sadly, some local authorities have gone to considerable trouble to spread alarm in an attempt to bolster opposition to the Bill.

We have had to recognise that the concern expressed by voluntary organisations is genuinely felt, and we have therefore looked for an amendment to the Bill which could reassure them by giving some recognition to their particular problem. In doing so, however, we have been anxious to avoid imposing on local authorities the priorities of the Government. Contrary to the claims which have been made throughout the passage of this Bill, it does not provide powers for the Government to intervene in the setting of local priorities. It allows only for the setting of an upper limit on the rate income of the authority. We regard it as an important principle that the local priorities of the authority between services should remain a matter for local choice. The amendment requires the Secretary of State to have regard to the extent of funding for charities in considering an application for a redetermination of an expenditure level. If an authority does not apply for a redetermination, the implication is that the authority feels that it can manage within the expenditure level that was set. Where it feels that extra expenditure is required over and above that proposed by the Secretary of State, the Secretary of State will have to have regard to the funding of charities and for the purposes of doing that it will be necessary for him to make inquiries about it.

I anticipate the complaint that the amendment does not ensure the continued funding of charities by rate-capped local authorities. In my view, no amendment could achieve that—certainly not without breaching the principle, to which I have referred, that authorities must decide on their priorities for themselves. The amendment goes a long way to help those who are concerned. It establishes on the face of the Bill a clear statutory position for charitable organisations. It ensures that the Secretary of State must turn his mind to the implication of an expenditure level for the funding of charities, and it opens the possibility that a charity might write to the Secretary of State directly in support of an application by its local authority and the Secretary of State will have to have regard to that, too. There is no compulsion, of course, on an authority to apply for an redetermination, but I am sure that a local charity faced with a reduction in its funding will be in a much stronger position, as a result of this amendment, to press the authority to make an application for a redetermination and that, too, must be a positive benefit to them.

I hope that the amendment will be widely welcomed by the House as it has been on all sides in the other place and—as I have said—by the NCVO.

Mr. Allan Roberts (Bootle)

I am sorry to disappoint the Under-Secretary of State, but, while we do not oppose this amendment, we do not welcome it as a way forward to safeguard the interests of charitable organisations in rate-capped authorities. The Minister failed to mention, when he spoke of this amendment being introduced in the other place, that it was the consequence of an amendment tabled by Lady Faithful, which, if it had been passed, would have properly protected charities. We believe that if it had been pushed to a Division, that amendment would probably have been carried in the other place. Lord Bellwin, in the light of this amendment and the possibility of its being carried, undertook to come up with something, and this is the best that the Government can have come up with. It does not safeguard the position of charitable organisations or voluntary bodies of charitable status that have to exist within rate-capped authorities.

There are two major things wrong with this amendment. First, it operates only subsequent on an authority applying for redetermination of its expenditure limit. This means that, if an authority is rate capped and given an expenditure limit, the authority has to make an application for the redetermination on special grounds, and put in some special pleading. Then, through this amendment, the Secretary of State will consider the position of charities within that local authority area.

However, as right hon. and hon. Members have already said in previous debates, few local authorities are likely to make an application to the Government for this redetermination, and are not likely to make a case for special pleading. If they do so, the Government can take upon themselves even greater power to interfere with a local authority, and the local authority concerned has to accept the Government's findings. The local authority can be told, sector by sector and service by service, exactly what should happen, and this can include policy direction from central Government.

For example, if Merseyside county council were rate capped and then applied for a redetermination along the lines set out in the Bill, that would involve a policy decision by the Secretary of State that would cause a large fare increase in that area. That would be unacceptable not only to the county council but to the people of Merseyside. In other words, this amendment is asking local authorities to sacrifice themselves and their policies for the sake of the charities and voluntary organisations with charitable status within their area. That is not likely to happen. Even the most altruistic local authority is not likely to be tempted, even if it has a regard to charities.

The second thing that is wrong with the amendment is that it requires the Secretary of State only to "have regard to" the expenditure on charities. It does not require him to do anything particularly concrete or practical. It does not lay any real duties or responsibilities on the Secretary of State to protect charities or voluntary organisations with charitable status within the area of a rate-capped authority. The amendment is merely a sop. It is typical of the way in which this Government approach charitable organisations. They did the same in their housing legislation when they rode roughshod over charities and their status.

6.30 pm

The Government are inclined to support charities when it suits them. They use them to attack the Health Service by the back door because of their doctrinaire distaste of the Health Service. When the crunch comes and supporting charities contravene their doctrinaire view of local authority expenditure, they are not prepared to do anything about it. The Government treat charities and other organisations with charitable status in the way that Henry VIII treated most of his wives. While making love to them, he was preparing and erecting their scaffold. That is exactly what the Government are doing. They support charities with their words while introducing rate-capping legislation which will destroy many voluntary organisations and their programmes.

This is not a minor issue. Many voluntary organisations and charities act on behalf of the community. They defend services and ameliorate some of the cuts forced upon local authorities. We shall not divide the House on the issue because the amendment is at least a step forward and the Secretary of State has undertaken to consider, in limited circumstances, the effects of his actions upon charities. Certainly the anxieties of charities will not be put at rest. We do not oppose the amendment, but it does not protect charities and voluntary organisations.

Mr. Michael Meadowcroft (Leeds, West)

I do not oppose the amendment, but I shall not be as mean about it as the hon. Member for Bootle (Mr. Roberts). The amendment is an example of how defective the Bill is. The Government will face a number of problems in connection with the amendment. Exceptions always produce a host of anomalies. The distinction between authorities that use charities as an agency and those that use them directly will be blurred. I think in particular of mental health services. A number of authorities legitimately prefer to use agencies to provide accommodation. Under this provision such authorities might benefit more and perhaps avoid some of the harshest penalties of rate capping.

Exceptions from registration include housing associations. Local authorities which do a fair amount of rehabilitation work through associations might be in a better position than those which act directly. I do not accuse the Government of endeavouring to introduce privatisation or of any other ulterior motives. I believe the development of the voluntary sector to be good for the community, but anomalies are involved.

In the United Kingdom charitable status has never been conferred only by registration under an Act. Charitable status is given to those who can show that their objectives are charitable. They may apply for charitable status through registration, and registration under the Charitable Act demonstrates that they have that status, but people may obtain charitable status without being registered. Some people or organisations may not wish to register. The Government are changing the basis of charitable status by the back door. I do not know whether they realise that that is what they are doing. A charity may find itself outside the provisions of the Bill and be pressed into registering. I refer to the bodies that are limited by guarantee and do a certain amount of non-charitable work but for grant aid purposes do work which is charitable. For that they can claim tax relief. Such a body is not registered. The Government are producing a host of extra problems for themselves which they will rue.

The danger is that the provision will skew the whole local expenditure issue and may promote a move towards putting on to the voluntary sector expenditure with which it cannot cope. Many charities try to do work beyond their capacity. There is a danger in allowing a loophole.

The amendment represents a minor gain. It is not a conversion on the road to Damascus, but any Minister who hesitates on the way there is to be commended. For that reason we shall not divide the House.

Question put and agreed to. [Special Entry.]

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