Commons Sitting of 27 March 1984

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS

    ANGLIAN WATER AUTHORITY (KING'S LYNN TIDAL DEFENCES) BILL
    Order for Third Reading read.
    Queen's Consent, on behalf of the Crown, signified.
    Read the Third time, and passed.

    CARDIFF CITY COUNCIL BILL
    Considered; to be read the Third time.
Oral Answers to Questions
  SOCIAL SERVICES

    Women's Hospital, Liverpool
    Mr. Parryasked the Secretary of State for Social Services what representations he has received concerning the proposed closure of 21 beds at the Women's hospital, Liverpool.
    The Minister for Health (Mr. Kenneth Clarke): We have replied to two parliamentary questions and received three letters from hon. Members and five letters from members of the general public.
    Mr. Parry: Is the Minister aware that at present more than 551 women, many of whom are considered urgent cases, need medical treatment at the Liverpool Women's hospital, and that 226 women have been waiting for more than six months for treatment? Is that not disgraceful? Does the Minister agree that any further ward closures will lead only to misery, pain, suffering and fear among women? Is he aware that further ward or hospital closures in Liverpool will be fiercely opposed and resisted by the Health Service unions and by the Labour movement, both inside and outside Parliament?.
    Mr. Clarke: A number of Liverpool hospitals provide services for women. The gynaecological waiting lists in Liverpool as a whole, I am glad to say, are being reduced. Consultations are still taking place on the proposals about the beds at the Women's hospital. I shall not prejudge the matter, but the health authority says that it can provide the same level of service while economising on the number of beds at that hospital.
    With regard to closures in Liverpool generally, I hope that the hon. Gentleman welcomed the proposals of his own excellent local district health authority, showing how £30 million can be invested in new capital projects to provide the services that will be required in future. However, some older facilities in Liverpool will inevitably
    Mr. Alton: Is the Minister aware that many people on Merseyside have misgivings about the reductions in the Health Service, bearing in mind that last year the Liverpool area health authority budget was reduced by £1 million? Is he further aware that, despite reduced resources, the incidence of diseases, such as cancer, is higher than anywhere else in the United Kingdom and that the provision for treatment is one of the lowest in the United Kingdom? Will he therefore come and look at the Women's hospital and other facilities on Merseyside?.
    Mr. Clarke: The allocation of money to Liverpool is falling a little, and it is due to fall, but it is not falling as quickly as the population. As a result, spending per head in Liverpool will increase. The strategy that has been put forward by the chairman and members of the district health authority is one for congratulation, because it shows the way in which the service must change to meet up-to-date needs, as well as making the best use of the money.
    Mr. Porter: Is my right hon. and learned Friend aware that some of us on Merseyside are perfectly satisfied with the amount of money that is available both in the region and in the districts? Is it not for the area health authority and the region, by dint of better housekeeping, to provide the services that are adequate at present?
    Mr. Clarke: I wish it were not a rule of the political game that everyone should feel obliged to claim that his area is under-financed. There are always areas where we can spend more money, and there are many parts of the Health Service where we would get a much better service by continuing to improve management and eliminate waste. Liverpool district health authority has been doing a good job and is providing an excellent service within the resources that have been allocated to it.
    Ms. Richardson: Does the Minister realise that this most recent closure of 21 beds appears to be part of a pattern of attacks on the health of women, both as patients and as workers? In addition to Liverpool, for example, we have the Elizabeth Garrett Anderson, which seems to be having its philosophy turned round by being unable to have women doctors attending women patients. We have the scandalous closure of the South London hospital, about which we still hope—
    Mr. Speaker: Order. The subject is the Women's hospital, Liverpool.
    Mr. Clarke: The hon. Lady should not see any conspiracy between district health authorities, which have not consulted each other about their proposals, each of which is sensible in its own right. Liverpool, by improving the throughput at this hospital, can maintain services. Therefore, progress can continue to be made in reducing gynaecological waiting lists.
    At the Elizabeth Garrett Anderson there is just a faint possibility that every now and again a male registrar will be allowed in, because it is sharing one of the teaching posts with the University College hospital. As for the closure of the South London hospital—
    Mr. Speaker: Order. In fairness, I would rather, that the Minister did not pursue that matter.

    Alternative Medicines
    Mr. David Atkinsonasked the Secretary of State for Social Services if he plans to meet the British Medical Association to discuss its inquiry into alternative medicines.
    Mr. Kenneth Clarke: I have no plans to do so at present.
    Mr. Atkinson: Is my right hon. and learned Friend aware that all the main alternative medical professions have declined the BMA's invitation to submit representations to its inquiry because they do not believe that such an inquiry will be impartial? In view of the growing public support and appreciation for the alternative medical professions, will he now embark on a Government inquiry into them?
    Mr. Clarke: Ministers have no responsibility for the BMA, and we have not been involved in the arrangements for the inquiry to which my hon. Friend referred. We do not at present see any case for a full-blown Government inquiry, but I will consider my hon. Friend's suggestion. It is entirely up to patients to choose the kind of treatment they prefer, although they should make sure, if they can, that they go to reputable practitioners. The Medical Research Council is financing research on behalf of the Government into the treatment of back pain, comparing the results of chiropractic with those of conventional treatments.
    Mr. Freud: If the Minister should set up an inquiry into alternative medicines, may we be assured that it will be wide-ranging? Will he try not to emulate the Health Promotion Research Trust, which is specifically debarred from inquiring into certain diseases — for example, tobacco-related diseases?
    Mr. Clarke: That has nothing to do with the main question. However, I have repeatedly said that that trust is producing £11 million which is available for useful research into health education. It would be foolish to turn down the money simply because it is excluded from one subject for entirely understandable reasons. Those who are genuinely interested in preventive medicine and health education would be cutting off their nose to spite their face by not accepting the money.
    Mr. Greenway: If my right hon. and learned Friend should consider alternative medicines in the form of parallel imports, will he bear in mind that it has been estimated that such imports would cost the home-producing industries £120 million worth of orders a year and 7,000 jobs, which is alarming for my constituents who work in this industry?
    Mr. Speaker: Order. That supplementary question was very wide of the main question. However, does the Minister wish to comment on it?
    Mr. Clarke: Perhaps I can stay in order, Mr. Speaker, by remarking that a common thread running through all the questions is the fact that the Government's only interest is to protect the safety and well-being of patients.

    Hospital Staffing (Birmingham)
    Mrs. Jill Knightasked the Secretary of State for Social Services if he will take steps to ensure that the nurse staffing levels of the Queen Elizabeth and the General hospital in Birmingham are improved.
    The Under-Secretary of State for Health and Social Security (Mr. John Patten): Nurse staffing levels at the Queen Elizabeth and General hospitals, Birmingham, are the day-to-day responsibility of the health authorities concerned.
    Mrs. Knight: Is my hon. Friend aware that the nurse staffing levels at both hospitals, which are teaching hospitals for acutely ill patients, are at the bottom of the national league for staffing levels and that they have been described by consultants working there as dangerous? Is he aware, for example, that fledgling nurses, with the ink hardly dry on their qualifications, are sometimes looking after a whole ward at night? Can he imagine the consternation at the statement by the chairman of the relevant health authority that the £100,000 available for extra nurses would be spread over just a few nurses throughout the whole are and would not benefit the Queen Elizabeth and General hospitals?
    Mr. Patten: I am aware of some of the problems to which my hon. Friend has drawn attention, and I shall look at them. It is significant that the district health authority has injected an extra £100,000 into nurse staffing levels, and doubtless it has the situation under control.
    Mr. Corbett: Will the Minister stop being complacent and acknowlege that large parts of Birmingham are underprivileged compared with the region and country as a whole? Furthermore, does he accept that it is a question not merely of quantity—important though that is—but of the quality of the staff? As the hon. Member for Birmingham, Edgbaston (Mrs. Knight) has pointed out, there are large numbers of wards in which patients are being left irresponsibly in unqualified or semi-gualified hands? What does the Minister propose to do about that?
    Mr. Patten: The Department of Health and Social Security is not complacent about anything. Secondly, the hon. Gentleman is lamentably ill-informed about the situation in his own area. During 1984–85 the West Midlands regional health authority will receive gross money disproportionate to that received by other regions.

    Portable Pensions
    Mr. Tim Smithasked the Secretary of State for Social Services how many representations have now been received by his inquiry into personal portable pensions.
    The Secretary of State for Social Services (Mr. Norman Fowler): By 21 March we had received nearly 1,700 written submissions specifically about portable pensions and a number of more general ones which also dealt with this subject. In addition, I have held four public sessions and heard evidence from 14 organisations.
    Mr. Smith: Is my right hon. Friend aware that although most of the principal representations on this subject have been made by vested interests, one exception is the National Consumer Council, which has called for more choice in pension provision? Will my right hon. Friend ensure that, when the inquiry is concluded, there will be more choice for pension scheme members?
    Mr. Fowler: Yes, Sir. In principle, I entirely agree with what my hon. Friend says. We want to improve conditions so that if someone moves from one employer to another there is an early-leaver provision, which would be fairer. Too many people are adversely affected by the present situation.
    Mr. Hordern: Is it not time that we ended the inequity whereby the full occupational pensions of the few are financed by the contributions of many who have long since left their jobs? Is it not reasonable that every employee should have the option of a portable pension if he wishes?
    Mr. Fowler: That is precisely the point that the inquiry is considering. We have received much evidence about it, and it will be discussed in our final report.
    Mrs. Beckett: Will the Secretary of State tell the House how many of the representations that he has received stress the concern felt by many who are anxious to see the results of the inquiry? Unless there is proper protection for pensioners, there is a danger that the insurance companies rather than individuals will benefit most from the scheme. Is there not a real risk that that will happen unless clear and well-drafted provision is made?
    Mr. Fowler: Clearly, there is a conflict in the evidence. We do not want to do anything which will affect the growth of occupational pension schemes, but, as my hon. Friend the Member for Horsham (Mr. Hordern) has pointed put, we must look at the position of the many people who are either not covered by occupational schemes or whose rights could be improved. We must find a reasonable compromise between the interests of the schemes and of individuals.

    NHS Trade Unions (Meetings)
    Mr. Canavanasked the Secretary of State for Social Services what subjects he discussed at his last meeting with trade union representatives of National Health Service employees; and if he will make a statement.
    Mr. Fowler: On the last two occasions I have met the NHS trade union representatives I have discussed the question of resources for the National Health Service.
    Mr. Canavan: Will the Secretary of State confirm reports circulating at the weekend about a confidential Government document proposing a miserable 3 per cent. wage increase for our nurses and midwives and arguing that their wage levels should be determined by free market forces? Does the right hon. Gentleman not realise that such an offer will provoke a very angry reaction, as it amounts to a wage reduction in real terms and the exploitation of dedicated workers in our National Health Service, no part of which should ever be governed by doctrinaire adherence to free market forces?
    Mr. Fowler: I am sure that the hon. Gentleman will agree that the level of pay must be determined by what the Health Service and the country can afford. The hon. Gentleman is referring to evidence that has been given to the new nurses and midwives review body, which, in due course, will make recommendations to my right hon. Friend the Prime Minister on the level of pay for nurses. That has not yet been done. When it has been, my right hon. Friend will make a statement.
    Dr. Mawhinney: Did the trade union representatives raise with my right hon. Friend the increasing number of consultants who are not fulfilling their full schedule with the NHS? Does he have that problem under review?
    Mr. Fowler: They did not raise that subject with me. If my hon. Friend has such evidence, I am willing to examine and investigate it.
    Mr. Flannery: Is the Secretary of State aware that a delegation of the Association of Scientific, Technical and Managerial Staffs recently went to the Minister for Health about the pay of hospital pharmacists, who are expected to go into work at the weekend and get virtually nothing for it? Will he do something to curb the immense profits being made by drug manufacturers so that people, such as hospital pharmacists, can have higher wages?
    Mr. Fowler: Such matters are all part of this year's negotiations. There is money on offer. I think that it would be sensible to wait until the negotiations have been concluded.
    Mr. Yeo: Will my right hon. Friend make it clear to the trade union representatives that, although we are all anxious that there should be fair and competitive rates of pay for all National Health Service employees, any increase in their rates of pay over and above the 3 per cent. indicator can be achieved only at the expense of other resources for patient care throughout the service?
    Mr. Fowler: As I said earlier, there must be consequences of that. Pay must relate to what the service can afford. That is a sensible point for anyone negotiating in the current pay round to remember.
    Mr. Kennedy: When speaking to trade union representatives in the NHS, will the Secretary of State bear in mind the natural anxiety that they feel about his Department's circular on privatising or tendering contracts for ancillary services, especially as the Government's stated aim of cost-effectiveness cannot be measured in purely financial terms? Patient well-being and the working conditions of people in the Health Service must also be taken into account.
    Mr. Fowler: I was not aware that the alliance has hitherto favoured competitive tendering. Money saved by competitive tendering is available for health care. That is what we are trying to pursue.
    Mr. Meacher: When the Secretary of State sees representatives of the trade unions, will he explain why he always talks about economies and wage cutting when, at the same time, he is such a soft touch on the private sector? Will he also explain why he has given the British Oxygen Company a monopoly in the supply of oxygen to the NHS at a 20 per cent. profit and why he has allowed drug companies a 21 per cent. profit when the Committee of Public Accounts has said that it should be no more than 15 per cent.? Why has he given Kneels of Exeter, a private cleaning company—
    Mr. Speaker: Order. It is very unusual for right hon. and hon. Members to go so wide of the mark in social services questions, but that question is very wide of the mark.
    Mr. Meacher: May I say to you, Mr. Speaker—
    Hon. Members: No.
    Mr. Speaker: Order. I must tell the hon. Gentleman and the House that it is very unfair if we do not stick to the question. This question relates to meetings with trade union representatives in the National Health Service.
    Mr. Meacher: May I say, Mr. Speaker, that we are talking about wage-cutting, which affects trade unionists, while increased profits are being given to the private sector?

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    Will the Secretary of State explain why he has given that contract to Kneels, a private cleaning company, when the NHS in-house tender was £50,000 cheaper? Is it not clear that his real interest lies in the commercialisation of the NHS and increased profit-taking from it?
    Mr. Fowler: That is a typically absurd series of questions—[HON. MEMBERS: "Answer."] I shall answer. My interest is the welfare of patients in the Health Service. I am not interested in vested interests, which the hon. Gentleman persists in representing in the House. If money can be saved by competitive tendering, that money can be diverted to direct patient care. That is a sensible policy. My right hon. and learned Friend the Minister for Health has made a long and detailed statement about the laundry service in Cornwall. That was an entirely sensible statement to make. I deeply deplore the hon. Gentleman's absurd assumption that no economies can be made in the Health Service.

    Health and Prescription Charges
    Mr. Winnickasked the Secretary of State for Social Services what representations he has received following his recent statement on increased health and prescription charges.
    Mr. Kenneth Clarke: I have received 29 letters from hon. Members, 46 letters from members of the public and five letters from professional bodies and other organisations about the charges announced on 8 March.
    Mr. Winnick: What possible justification can there have been for the increase of 700 per cent. in prescription charges since the Tories came into office and in maximum dental charges from £30 to £110? When will the Secretary of State — a member of the Cabinet — have enough gumption and courage to stand up to the constant demands of the Treasury over these matters?
    Mr. Clarke: Because we believe that those who can afford to pay, and only those who can afford to pay, are prepared to make a reasonable contribution towards the cost of this treatment. If one does not raise a reasonable contribution, one gives up revenue which could be well spent within the NHS. The figures quoted by the hon. Gentleman reflect the fact that, for electoral reasons, the then Labour Government depressed the charges in the run-up to the general election. In fact, the proportion of total NHS spending now found out of charges is considerably less than was usual in the 1960s under successive Governments.
    Mr. Dickens: Is it not a fact that those in need do not have to pay for prescriptions, and that 70 per cent. of all prescriptions are dispensed at no cost?
    Mr. Clarke: Absolutely. I am grateful to my hon. Friend for making that elementary point. The Government have no intention of changing the present exemptions from prescription charges. The figure quoted by my hon. Friend shows how completely we protect those who might otherwise have difficulty in paying.
    Mr. Pavitt: Is the Minister not ashamed of the fact that, by raising the cost of pre-payment season tickets to £24 a year, he is taking £10 million from those who are permanently sick and whose illnesses are most acute? If he needs his pound of flesh, will he at least accept that it
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    is an outrage that females who have had a breast amputated and, therefore, will be on chemotherapy for 20 years, will probably be paying £24 a year?
    Mr. Clarke: Season ticket charges are paid only by those patients who are able to pay. We are protecting exactly the same exemptions as those protected by the Labour Government. We have not changed the policy on exemptions. We are raising not a pound of flesh, but a sensible contribution towards the growing amount of expenditure that the Government are sanctioning on the NHS.
    Mr. Couchman: Will my right hon. and learned Friend confirm that, even where prescription charges are payable, they barely cover a quarter of the true costs of the drugs prescribed?
    Mr. Clarke: Yes, indeed I can.
    Mr. Meacher: Is the Minister aware that on 28 April 1979, the Prime Minister said that Labour claims that the Tory Government would increase prescription charges were a lie? Will he therefore explain how prescription charges have now been increased by 800 per cent. —[HON. MEMBERS: "700."]—since this Government came to power? Is not this latest increase—three times greater than the rate of inflation— a fundamental tax on the sick? Is it not indicative of the Government's values that in one week the Chancellor gives away £360 million to the very rich through the abolition of the investment income surcharge and in the next week the Secretary of State increases prescription charges to the sick by £37 million?
    Mr. Clarke: The hon. Gentleman has a marvellous way with figures, but I have never known them go up quite so quickly as that, even in his presentation of the case. In 1979, my right hon. Friend the Prime Minister pledged that we would not introduce any new form of charge. The Labour party was then claiming that we would introduce charges for going to the doctor as well as hotel charges for hospitals. My right hon. Friend denied that, gave a promise, and we have stuck to it. We are applying a sensible policy which will raise valuable revenue for an improved NHS.

    Local Community Hospitals
    Mr. Jesselasked the Secretary of State for Social Services what value the Government attach to the work of local community hospitals.
    Mr. John Patten: We value highly the important contribution made by community hospitals to the National Health Service. Their place in the pattern of district services is primarily a matter for health authorities to decide in consultation with others concerned at local level.
    Mr. Jessel: Is my hon. Friend aware of the feeling of relief in Teddington, where next Sunday a thanksgiving service is to be held following the strong recommendation of my right hon. Friend the Secretary of State that Teddington memorial hospital should be saved? Is he also aware that that feeling contrasts deeply with the feeling in Twickenham, only a mile to the north, about the future of St. John's hospital which, like every community hospital, gives valuable service? Will my hon. Friend listen carefully to the strong representations that will be made about that
    Mr. Patten: It is not often that we have church services held for us. We are grateful for that and for my hon. Friend's kind words. No one could have worked harder or more effectively for his constituents, and for the interests of the Teddington memorial hospital. The other matter is one for the future.
    Mr. Rathbone: Does my hon. Friend agree that the use and value of these hospitals is reflected in what communities do to support them, as well as in the way communities use them?
    Mr. Patten: My hon. Friend is right. It is important to remember that community hospitals — those with 50 beds or fewer—form about 20 per cent. of hospitals in the country, and many of those are greatly helped by leagues of friends, voluntary organisations and individuals.
    Mr. Madden: Does the Minister appreciate that the feeling of thanksgiving would also spread to Bradford if he made an announcement that Thornton view hospital, which has been occupied since last August, will be saved? When will he make a statement and can he tell us the substance of that statement?
    Mr. Patten: The Thornton view hospital is not commonly thought of as a community hospital. The matter is under consideration and an announcement will be made in due course.

    Mental Health Act 1982
    Mr. Proctorasked the Secretary of State for Social Services whether he is satisified with the operation of the Mental Health Act 1982; and if he will make a statement.
    Mr. Kenneth Clarke: The Mental Health (Amendment) Act 1982 was consolidated with the 1959 Act into the Mental Health Act 1983, almost all of which was implemented satisfactorily on 30 September last year. I am very pleased with the bringing into operation of the provisions of the legislation so far.
    Mr. Proctor: Is my right hon. and learned Friend satisfied with the speed with which mental health review tribunal hearings are taking place?
    Mr. Clarke: I am glad to say that I am, and, in particular, section 2 applications are being dealt with within the statutory time limit that was laid down.
    Mr. Meadowcroft: Has the Minister received any representation regarding the use of electro-convulsive therapy under the Act, and is he directing the mental health commissioners to have regard to the strict validity of the detention of a patient without informed consent when receiving such therapy?
    Mr. Clarke: When the Act was considered by Parliament last year, a number of forms of treatment were made subject to the second opinion of an independent doctor. The commission is now arranging those second opinions, and I am glad to say that that part of the Act is working very well in practice. We have no intention of redrawing the lines laid down in recent legislation covering different forms of treatment, although we shall consider the advice of the commission on all these matters in due course.

    Association of Professionalal Ambulance Personnel
    Mr. Robert Atkinsasked the Secretary of State for Social Services if he will make a statement on the progress on health authority recognition for negotiating purposes of the Association of Professional Ambulance Personnel.
    Mr. Kenneth Clarke: Local recognition is in the first instance a matter for the health authorities concerned, but in my view they should recognise trades unions whose membership comprise a significant proportion of the relevant group of staff, and I have written to several chairmen of these lines. To date only one authority has recognised this association, but I expect others to do so. I am glad to say that 14 authorities in England have now granted the Association of Professional Ambulance Personnel the facility for trades union subscriptions to be deducted at source.
    Mr. Atkins: Is it not a disgrace that this association is being rejected by the Preston district health authority, acting on behalf of the Lancashire health authorities, and that trade unions such as the National Union of Public Employees, the Confederation of Health Service Employees, the General, Municipal, Boilermakers and Allied Trades Union and the Transport and General Workers Union are refusing to sit down and discuss this problem? Is my right hon. and learned Friend aware that these organisations are refusing to acknowledge the existence of the APAP and will boycott it and take industrial action if it is recognised? What is his department going to do about this?
    Mr. Clarke: As I understand it, APAP is now the largest single union in the Lancashire ambulance service and I made it clear to the chairmen of the health authorities that I expected the union to be given recognition if it holds the confidence of the staff. It is up to the staff to decide which organisations it wishes to represent them, and that should be the deciding factor in all this.
    Mr. Parry: Does the Minister agree that there is a sufficient number of unions on the Whitley council and that the recognition of other organisations will add to the problems of the collective bargaining process?
    Mr. Clarke: It is up to those who work for health authorities to decide which unions they wish to join. The Whitley structure cannot be frozen for all time if it transpires that a significant number of staff want to be represented by another organisation. The Government and the employers are wholly neutral and the chairmen have been addvised to be guided by the wishes of their staff.

    Leptospirosis
    Mr. Colin Shepherdasked the Secretary of State for Social Services how many people were treated for cattle-attributed leptospirosis in the National Health Service in the last year for which figures are available; and what proportion was diagnosed by general practitioners.
    Mr. John Patten: This information is not available centrally. In 1983, 40 cases of this disease were notified from England and Wales to the communicable disease surveillance centre.
    Mr. Shepherd: I am grateful to my hon. Friend for that answer. Now that brucellosis has been cleared from the

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    scene, does he agree that the extent of leptospirosis is becoming more apparent, especially to those who work in the dairy industry? Does he accept that the more general practitioners are aware of the disease the more they are recognising it and diagnosing it? What steps will he take to ensure that it is made more widely known among GPs? What is his assessment of the danger to public health?
    Mr. Patten: The danger to public health is limited. There were 40 cases of leptospirosis last year, 12 cases the year before that and 10 the year before that. I am generally satisfied that GPs have an adequate knowledge of the risks of the disease, especially in dairying areas. It is very important for those engaged in health education to make it clear to those who work in the dairy industry that there is a need to wear adequate protective clothing and to take proper protective measures. We are grateful to the reference unit, which is in my hon. Friend's constituency in Hereford, for the work which it has undertaken.

    Organ Transplants
    Mr. Traceyasked the Secretary of State for Social Services what recent representations he has received about a system of opting out for donation of organs for transplant.
    Mr. Fowler: Since this subject was debated in the House on 13 February we have received letters about it from 24 hon. Members, mostly forwarding correspondence from their constituents or others, and about 30 other people.
    Mr. Tracey: Is my right hon. Friend aware of the opinion poll commissioned by the BBC's "That's Life" programme, which revealed that 71 per cent. of those questioned said that they favoured an opting-out scheme? Notwithstanding that opinion poll result, there is a substantial body of opinion that is still against opting out, including doctors. Will he consider an official inquiry before any steps are taken?
    Mr. Fowler: We shall examine this issue extremely carefully. As I said when I was last asked a question on the matter, I think that there is more prospect of an opting-in system than an opting-out system. I am sure that my hon. Friend will be pleased to know that, following the launch of the donor card system, in the five weeks from 13 February to 19 March there were 173 transplant operations compared with only 103 in the same period in 1983.

    Parallel Imports
    Mr. Campbell-Savoursasked the Secretary of State for Social Services what representations he has received from the British Medical Association on parallel imports.
    Mr. Kenneth Clarke: The British Medical Association has replied to our consultation document on parallel imports, giving a general welcome to our proposals. It has made a number of detailed comments, which are being considered carefully along with the others that we have received.
    Mr. Campbell-Savours: Is true that prescription-only drugs are available from parallel importers without prescriptions? What is the Government's response to the
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    ABPI suggestion to its members that it should not cooperate with the Government in evaluating the hazards of parallel imports?
    Mr. Clarke: There have been some worrying newspaper reports suggesting that some importers will supply through the post drugs to those who apply for them without checking whether they are qualified pharmacists. It is illegal to distribute drugs in that way and the Government will expect the law to be enforced. I have no evidence of the Association of British Pharmaceutical Industries withdrawing any co-operation from the Government. They have given us their representations, along with others, on parallel importing and we hope to produce our final proposals as soon as possible.
    Sir Dudley Smith: Is my right hon. and learned Friend aware that it is nothing short of immoral that some pharmacists are importing cheap foreign drugs and selling them to the NHS at full British prices? What does he intend to do about this?
    Mr. Clarke: We have issued a consultation document, which shows that we shall close a loophole that has appeared in the present regulations, which allows large quantities of drugs to be imported without a licence. At the same time, we shall set up a proper licensing arrangement for imports from the EC. The consultations have thrown up many conflicting detailed points, but we realise the urgency of the matter and hope to sort it out as quickly as possible.
    Mr. Ashley: When the Minister speaks of cheap foreign goods, he refers to drugs that are produced in Britain and exported cheaply. Is he aware that the British pharmaceutical industry is damaging the National Health Service by charging it higher prices than it charges comparable health services in Europe? The Health Service should use parallel imports at lower prices, provided that the DHSS exercises quality control. Can the Minister confirm that the pharmaceutical industry has refused to cooperate with quality control?
    Mr. Clarke: The reason for such movements is that different countries have differing systems for setting drug prices, which means that certain drugs may be cheaper in some countries at different times. Changes in exchange rates may also affect prices and good entrepreneurs can buy drugs more cheaply abroad and import them into this country in competition with the identical drugs produced here; it works both ways. Recently, Britain was a major source of parallel imports to EEC countries because the drugs could be bought more cheaply here. We have negotiated a fair price arrangement with the pharmaceutical industry, which saves the National Health Service £100 million a year. It is completely untrue that any sector of the pharmaceutical industry is refusing to co-operate with the Government on safety.
    Mr. Nicholas Winterton: Will my right hon. and learned Friend confirm that some drugs coming to Britain through parallel importing are not as safe as British proprietary brands, yet imported drugs are dispensed by chemists as if they were proprietary drugs? Could not such a practice put at risk the health of those relying on dispensing pharmacists to give them a drug that will work in the way required by the prescribing doctor?
    Mr. Clarke: That is our major concern. Although we have no evidence at present of patients being injured by

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    imported drugs, we need to eliminate that risk. Where the drugs involved are the same, we must be sure how they have been handled, where they came from, that individual batches can be checked back and that instructions are given in English for English patients. We are working rapidly to solve those problems.
    Mr. Dobson: Will the Minister confirm that the reason why British pharmacists find it cheaper to buy drugs abroad is that drugs are cheaper in western Europe because western European Governments have forced their pharmaceutical industries to keep down drug prices? Is it not time that the British Government followed suit?
    Mr. Clarke: That is far too simplistic an analysis. For the reasons that I gave, some drugs will sometimes be cheaper in western Europe than in Britain, and at other times drugs will be cheaper here. That is because people are playing the market. The Government are concerned, however, with patient safety. As I told my hon. Friend the Member for Warwick and Leamington (Sir D. Smith), we hope to produce a workable system to bring us a supply of drugs at a fair and competitive price, while protecting people against drugs that have not been handled properly.

    Hospital Closures
    Mr. Chapmanasked the Secretary of State for Social Services how many hospitals were closed upon the decision of the Secretary of State between May 1979 and March 1984; and what were the comparable figures for the period from March 1974 to May 1979.
    Mr. Fowler: Between May 1979 and December 1983 there have been 159 whole closures of hospitals, which compares with a figure of 270 whole closures under the last Labour Government. Of those closures, the numbers approved by Ministers were 32 and 35 respectively.
    Mr. Chapman: I thank my right hon. Friend for that information. Is he aware that many people listening to Labour propaganda will be surprised to learn that the Labour Administration closed down many hospitals, and even more surprised that that Government closed down almost twice as many hospitals as the Conservative Government in an equivalent period?
    Mr. Fowler: My hon. Friend is absolutely right. The Labour Government carried out the biggest capital cut in the history of the National Health Service. From 1976–77 to 1977–78 capital spending was reduced from £356 million to £314 million, which was a cut of £160 million in real terms.
    Mr. Ron Lewis: Can the Minister advise the House of the number of his next planted question?
    Mr. Fowler: I am sorry that we should have caught the hon. Gentleman on such a sore point. I repeat that those figures on capital spending inside the Health Service deserve to be better known.
    Mr. Alexander: Can my right hon. Friend tell the House whether any of the hospitals closed were listed buildings and, if so, their likely use in future?
    Mr. Fowler: Not without notice. I shall consider the matter and write to my hon. Friend.
    Mr. Norman Atkinson: If the Secretary of State wanted a planted question, should he not have got the
    136
    Opposition to ask it, because the net loss of beds under his Administration is far greater than it was under the Labour Government?
    Mr. Fowler: That is not so. If we wanted planted questions, we already have the Leader of the Opposition.
    Later—
    Mr. Chapman: On a point of order, Mr. Speaker. It was alleged earlier that I planted question No. 14. Will you rule that, if that is on the record, I am entitled to deny it? Do you agree—it is well known to hon. Members, not least the hon. Member for Carlisle (Mr. Lewis)—that the only things I am guilty of planting are trees?
    Mr. Speaker: The planting of questions is a colloquialism which is unknown to me.

    Supplementary Benefit
    Mr. Phillip Oppenheimasked the Secretary of State for Social Services what is the average length of time between a person registering a claim for supplementary benefit and a decision being reached on that claim in the latest year for which figures are available.
    The Minister for Social Security (Dr. Rhodes Boyson): In the year ending 14 February 1984 it was five days.
    Mr. Oppenheim: Is my hon. Friend aware that the decision on the claim of my constituent, Mr. Allan took no less than four months, causing him much hardship? Although I accept that that is in no way typical, is not that an unacceptable length of time for making a decision on such a claim?
    Dr. Boyson: I appreciate my hon. Friend's concern. I have already written to him about this case. If there are any further points that he would like to bring to my attention, I should be glad to receive them. The average time for supplementary benefit claims to be decided in the various offices in his constituency is between three and seven days.

  PRIME MINISTER

    Engagements
    Ql. Mr. Terry Lewisasked the Prime Minister if she will list her official engagements for Tuesday 27 March.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. I also attended the memorial service for our late colleague Maurice Macmillan at St. Margaret 's, Westminster. In addition to my duties in the House] shall be having further meetings later today.
    Mr. Lewis: The savage sentence meted out to Miss Tisdall contrasts sharply with the establishment—[HON.MEMBERS: "Question."]
    Mr. Speaker: Order. I must stop the hon. Gentleman. He must be aware that this case is sub judice. Mrs. Knight.
    Mr. Lewis rose——
    Mrs. Jill Knight: In between her engagements today, can my right hon. Friend spare a moment to consider whether it might—[Interruption.]
    Mr. Lewis rose——
    Mr. Speaker: Order. In fairness, I shall give the hon. Gentleman another chance to complete his original question.
    Mr. Lewis rose—
    Mr. Speaker: Order. The hon. Gentleman may complete his question in a moment. I have just called Mrs. Knight.
    Mrs. Knight: In between her engagements today, will my right hon. Friend consider whether it might be possible to divert the attention of Mr. Arthur Scargill from the business of investing hundreds of millions of pounds' worth of funds to the best possible commercial advantage to the fact that the miners' strike will put people out of work if they are not careful?
    The Prime Minister: I believe that my hon. Friend is referring to problems at certain foundries that are short of coke; Scunthorpe has not enough for steel making. Scunthorpe has made strenuous efforts to get its steel output up to a high quality and to sell it at a very competitive price. The jobs of some of those people would be at stake. They have worked extremely hard. It would be ironic if as a result of the strike people were made unemployed, as customers would go overseas for steel and the products of foundries, and their custom, would never return.
    Mr. Terry Lewis rose——
    Mr. Speaker: Order. I ask the hon. Member for Worsley (Mr. Lewis) to take care in framing his supplementary question.
    Mr. Lewis: Does the Prime Minister agree that the time has arrived when sentencing policy should be reviewed in terms of cases that affect national security compared with those that do not?
    The Prime Minister: No, Sir. Sentencing is a matter for the courts. The hon. Gentleman will be aware that in certain cases we are proposing next year to introduce a right of appeal against a sentence, but it would not apply to the particular case. It would apply only where it was thought that a sentence was unduly low and would be guidance for the future.

    Local Authority Services (Privatisation)
    Mr. David Atkinsonasked the Prime Minister if she is satisfied with the progress being made by local authorities to privatise services.
    The Prime Minister: No. I am still dissatisfied with the progress that local authorities are making in seeking better value for money by putting their services to the test of competition. We are continuing to study what measures can be taken to speed up the process.
    Mr. Atkinson: I welcome that reply from my right hon. Friend. Does she agree that there is now ample evidence from those Conservative councils that have had the guts and the vision to put out their services to private enterprise that that is the most positive way of capping rates? Will my right hon. Friend consider introducing legislation that will oblige all local authorities to compare existing costs for those services with the costs if they are tendered to the private sector?
    The Prime Minister: I agree with my hon. Friend that there are great opportunities for reducing expenditure by
    138
    submitting contracts to private competition. So far, progress has been very disappointing. Only 23 contracts have been let, but they result in a saving of £7 million annually. I hope that we can be much more successful in persuading local authorities to go out to private competition, but I should be reluctant to commit us to legislation, because that would be a very technical measure to put through the House.
    Miss Maynard: Is the Prime Minister aware that there is great anxiety that the Territorial Army will be increased to 86,000—
    Mr. Speaker: Order. The question concerns privatisation.

    Engagements
    Mr. Blairasked the Prime Minister if she will list her official engagements for Tuesday 27 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Blair: When people can be imprisoned for six months for, in effect, telling the British public what the Government should have told them, does the right hon. Lady not agree that there is an urgent need for legislation so that, while the interests of our national security are protected, the Government cannot conceal the scale of what they are doing from the British public and Parliament?
    The Prime Minister: No. I do not believe that any Government can carry on their business unless they can trust those in the Civil Service who have charge of secret documents to keep those documents to themselves.
    Mr. Ashby: Did my right hon. Friend read in the Leicester Mercury the report of Mr. Jack Jones, who said:
    "We are not violent men but we will not be intimidated. We have voted to work and even if we"—[HON.MEMBERS: "Reading."]
    Mr. Speaker: Order. The hon. Member must not read.
    Mr. Ashby: Mr. Jones said:
    "even if"——[Interruption.]
    Mr. Speaker: Did the Prime Minister hear that question? If this type of baying goes on, neither the Prime Minister nor I will be able to hear the question. Will the hon. Member please repeat his question.
    Mr. Ashby: Did my right hon. Friend read the report of the leader of the miners in Leicestershire, Mr. Jack Jones, who said:
    "We are not violent men but we will not be intimidated."[HON. MEMBERS: "Reading."]
    Mr. Speaker: Order. The hon. Member must not read.
    Mr. Ashby:
    "We have voted to work and even if we are operating the last 4 holes in the country, we will work."
    The Prime Minister: I am not sure that I could hear all of that question precisely. The Conservative party is totally and utterly against intimidation of people who are trying to go about their law-abiding business normally. We believe that the police are doing a superb job enabling those people to get through to their place of work.
    Mr. Tim Smithasked the Prime Minister if she will list her official engagements for Tuesday 27 March.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Smith: Is my right hon. Friend aware of the disgraceful campaign being conducted by the GLC against its abolition?—[Interruption.]
    Mr. Speaker: Order. This type of behaviour is very unseemly.
    Mr. Smith: That campaign includes threats amounting to blackmail of its suppliers, including my constituents. Will my right hon. Friend confirm that she remains determined to abolish the GLC and the metropolitan counties?
    The Prime Minister: Yes, the Greater London council and the metropolitan counties will be abolished in accordance with the provisions in our manifesto. A paving Bill will be introduced in the House shortly.
    Mr. Kinnock: In his negotiations in Brussels today, has the Foreign Secretary been given instructions to ensure that any agreement that he makes will contain provision for rebates to the United Kingdom that are sufficient to offset the additional £675 million contribution that will arise if our own resource subscriptions were to increase from 1 to 1·4 per cent.?
    The Prime Minister: He is instructed, if I might use —[Interruption.] My right hon. and learned Friend is under the same instructions as I impose upon myself. The Foreign Secretary would, of course, refer back if there were to be a change.
    Mr. Onslow: Does my right hon. Friend think that any Government could carry on their business effectively if the Official Secrets Act 1911 were so amended as to legalise the wilful betrayal of trust by civil servants? Could not a civil servant of any grade who supposes himself or herself to be the victim of a conflict of loyalties ask to be transferred to non-controversial work or resign from the service?
    The Prime Minister: Yes. I wholly agree with my hon. Friend. I note that when the matter came up during the lifetime of the previous Labour Government, in June 1976, the then Prime Minister said:
    "There must be absolute confidence that papers and discussions that take place are kept within the circle to whom they are given."
    I note that the then Leader of the Opposition said:
    "Is the Prime Minister aware that we fully share his view about the gravity of this matter? It is essential that confidentiality of discussions and documents should be assured."—[Official Report, 17 June 1976; Vol. 913, c. 738–39.]
    The then Prime Minister was right, and I was right to support him.
    Mr. Winnick: How can the Prime Minister possibly justify the all-embracing section 2 of the Official Secrets Act, which was described by the present Home Secretary
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    six years ago as indefensible? Do a Government who have shown such contempt for civil liberties welcome such a section to deal with all those who happen to displease them?
    The Prime Minister: The Franks report on the Official Secrets Act was published in 1972. The Labour Government held office from 1974 until 1979. During those five years they could have introduced legislation, but they did not. In 1979 we introduced legislation which did not find favour with the House. We have no intention at present of introducing further legislation.
    Mr. Leigh: Is my right hon. Friend aware that an internal CND document—[HON. MEMBERS: "Leak."]—on cruise, just published, instructs CND members to render the deployment of cruise missiles militarily useless by informing the world, including our enemies, of exactly where they are sited? Does my right hon. Friend agree that that confirms the impression of many Conservative Members that Lenin's willing dupes in the CND are now doing the Soviet's dirty work for them?
    The Prime Minister: That is correct. They are making a fundamental attack on the defence, security and liberties of our country, including the liberties that enable them to have freedom of speech and demonstration.
    Mr. Beith: Would not the country be far better governed if freedom of information legislation protected those areas that should be in the public domain and left the apparatus of the law to protect far fewer secrets?
    The Prime Minister: We try to keep protection to such matters as are vital. The hon. Gentleman must understand that it is vital to keep certain matters confidential for security reasons and certain negotiations confidential for commercial reasons.
    Mr. Heddle: I refer to my right hon. Friend's answer to Question No. 2. Has she yet read the Audit Commission's report, which shows that local authorities have amassed £250 million in rent arrears? Does she agree that that is a classic case for putting out, at least to the voluntary housing movement, the collection of rent and the housing management function?
    The Prime Minister: I agree with my hon. Friend that it would be possible to put the collection out to the private sector, possibly with profit to the public sector.
    Mr. Frank Cook: Will the Prime Minister take this opportunity to make a clear and unequivocal statement of support for the principle that the wishes of the Clevelanders must be paramount?
    The Prime Minister: I make a clear and unequivocal statement of support for the manifesto upon which the Conservative party fought the general election.

Matrimonial and Family Proceedings Bill
3.32 pm
Mr. Merlyn Rees: On a point of order, Mr. Speaker. I wish to inform you and the House of a matter of concern to me as Chairman of the Special Standing Committee set up to take evidence under the Matrimonial and Family Proceedings Bill, and to seek your advice. The matter gives rise to a complaint against someone in the Lord Chancellor's Department.
On Friday 23 March 1984 the Hansard printers stopped printing the report of our sitting on Thursday 22 March as a result of the "instructions" of someone from the Lord Chancellor's Department. This is a serious matter. On Thursday valuable evidence, both written and oral, was given to the Committee by Lord Scarman and Sir John Arnold of the Family Division, which was to be published.
The first I knew of the matter was from a letter given to me this morning addressed to the Clerk to our Committee from Mr. Morgan, the Editor of the Official Report. He wrote:
"My attention has been called to the half report of the Third Sitting of your Committee on 22nd March. This half report was made available, I understand, as a result of pressure from the Lord Chancellor's Department late on Thursday. The full version was not available until today.
As a result of this episode I have directed the printers in no circumstances to repeat this exercise and to take instructions on the publication of Standing Committee reports only from my office. To proceed otherwise is a recipe for disaster."
It is not easy these days for a printer—in this case a subcontractor — if he receives a call from the Lord Chancellor's Department. One never knows who is telephoning him about events. During our Sitting there was some conflict between what the Lord Chancellor said, I understand in another place, and what the President of the Family Division reported to the Committee on Thursday. It was requested that it be cleared up at ministerial level so that the report could be sent to Sir John Arnold to resolve the conflict. I am given to understand that the printer received the request and, because it could not be carried out without stopping printing, he stopped printing without anyone telling him that he must stop printing. However it happened, we had only a half copy of the Official Report. It never reached the Vote Office and today we received the full report.
Government Whips and Ministers have co-operated with me, but I am worried that somebody in the Lord Chancellor's Department, with whatever intention, should contact the printer direct, not through Hansard. The nature of the Special Standing Committee procedure is such that we depend on evidence—and people outside the House as well as right hon. and hon. Members want to read the evidence. It is an excellent procedure, but all Government Departments must be told that they do not control
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Hansard. The Hansard printers are responsible to this House and to no one else. I ask for your advice, Mr. Speaker.
Mr. Speaker: The right hon. Gentleman raises a very important matter. As the Solicitor-General is present, I think that he should say something.
The Solicitor-General (Sir Patrick Mayhew): I am grateful to you, Mr. Speaker. It may help if I tell the House the result of the inquiries that I have made.
Last Thursday, evidence was given to the Special Standing Committee by the President of the Family Division, as the right hon. Member for Morley and Leeds, South (Mr. Rees) has said. A later witness on the same day told the Committee that there was a disparity on a particular issue between the President's evidence and a speech made in another place by the Lord Chancellor expressing an opinion.
The President had already undertaken to submit a further written memorandum to the Committee in any event, as the right hon. Gentleman said. So that the matter could be dealt with by the President in the course of that memorandum and received by the Committee in time for its final sitting today, I asked that a copy of Thursday's Hansard be obtained as soon as possible and that the President be invited to refer to the relevant passage in his evidence and to deal with the point made by the witness to whom I have referred.
Accordingly, I understand that on Friday morning an official of the Lord Chancellor's Department spoke by telephone to an official of St. Stephen's Press, printers to Hansard, to inquire when copies of Thursday's report would be available. On being told that the report would probably be available at about 6 pm on Friday, he asked whether it would be possible to obtain sooner a proof copy of the transcript of the President's evidence.
The printer's official undertook to try to obtain proof copies from the subcontractors and in fact by 12 noon sent copies to the Lord Chancellor's Department official. No instruction and no request was at any time made for the publication of Thursday's report to be divided or delayed in any way. Nor, I understand, was it suggested to the Lord Chancellor's official that either would occur. In the event, the President was enabled to deal with the matter in a supplementary memorandum which the Committee had before it at its final sitting this morning.
I am sorry that an initiative of mine, taken solely in the interest of putting the fullest information before the Special Standing Committee before its final meeting, seems inadvertently to have led to some unauthorised delay in the printing of Hansard, but this was not requested, intended or foreseen.
Mr. Speaker: I am sure that the House will accept the explanation given by the Solicitor-General. I will, of course, look into the matter and ensure that nothing of this kind happens again.

Statutory Instruments, &c
Mr. Speaker: With the leave of the House, I will put together the three motions relating to statutory
instruments.
Ordered,
That the draft General Practice Finance Corporation (Increase of Borrowing Powers) Order 1984 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Administration of Estates (Small Payments) (Increase of Limit) Order 1984 be referred to a Standing Committee on Statutory Instruments, &c.
That the Block Grant (Education Adjustments) (England) Regulations 1984 (S.I., 1984, No. 224) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Neubert.]

European Community Documents
Mr. Speaker: With the leave of the House, I will put together the two motions relating to European Community documents.
Ordered,
That European Community Document No. 7933/83 concerning the Community Road Haulage quota be referred to a Standing Committee on European Community documents.
That European Community Document No. 8307/83 concerning the reduction in noise from motor vehicles be referred to a Standing Committee on European Community documents. —[Mr. Neubert.]

Select Committee on Members' Interests
3.39 pm
Mr. Brian Sedgemore: On a point of order, Mr. Speaker. It goes to the heart of the integrity of this House.
You will be aware, Mr. Speaker, that it is a convention that when Select Committees report to the House, unless there are reasons of security or confidentiality, they usually publish the evidence that has been submitted to them, and they certainly do so in cases where not to do so would render the main report incomprehensible and meaningless. You will also be aware, Mr. Speaker, that it is not the practice of Select Committees to suppress evidence given to them on a party political basis in order to protect one or more Members of the House from having their conduct made public. If that were to happen, clearly the Select Committee would be showing bias and the odour of political corruption would hang heavily in the air.
Yesterday, the Select Committee on Members' Interests reported on a submission in relation to the Prime Minister's conduct in Oman. It is impossible for the public to read and understand that report because none of the evidence which was given to it was published. The submission which the Committee dealt with was not the submission which I made, and I want to ask you, Mr. Speaker, how you can protect the good name and integrity of the House from a Select Committee which, in my submission, has acted with grave irresponsibility.
Sir Geoffrey Finsberg: On a point of order, Mr. Speaker. Is it not a fact that the way to protect the House is the way the Select Committee seems to have pursued — by not wishing to publish rubbish from the gutter?
Mr. Sedgemore: Further to that point of order, Mr. Speaker. It is important that the House should consider exactly where it stands in relation to this matter, particularly in view of the remarks made by the hon. Member for Hampstead and Highgate (Sir G. Finsberg). All that has happened is that a list of facts, 15 in number, has been submitted to the Select Committee, together with a list of witnesses who can speak to those facts. It was up to the Select Committee to decide whether to call those witnesses. To refer to facts backed up by witnesses as rubbish is an insult to the good name of the House.
Mr. Speaker: Nevertheless, it is for the Select Committee itself to decide what it publishes. It is not a matter for me.

Local Authority (Standards of Service)
3.41 pm
Mr. Nicholas Brown: I beg to move,
That leave be given to bring in a Bill to provide for the maintenance of standards of service where local athorities place public services out to competitive tender.
The Bill does not seek to deal with the issues of principle involved in the privatisation argument. Its narrow purpose is to enable local authorities and other public sector authorities to deal with a range of practices which I am sure the whole House would consider unacceptable. It is, for example, clearly unfair that a reputable private sector builder who adheres to nationally agreed terms and conditions of employment should fail to win work in competitive tender because he is undercut by an unscrupulous rival exploiting high unemployment by wage-cutting and the use of the black economy.
To continue the same example, it surely cannot be acceptable to any Member of the House that Government youth employment schemes should be used to enable private sector contractors to reduce the wage element in their tender. Not only is it obviously unfair to other contractors and exploitation of the young people themselves, but it can be downright dangerous. I think in particular of a recent example in Newcastle where an electrical contractor was caught using youngsters on a job creation scheme to rewire council houses. No credit is due to the supervision of the housing department in Newcastle. It did not catch the contractor. He was caught by local tenants worried about going back to their houses when the work was finished and by an official of the EEPTU whom they contacted to have a look at the job. The purpose of my Bill is to outlaw that sort of conduct.
Breaches of the Health and Safety at Work etc. Act can also lead to unfair competition. The contractor who puts up scaffolding, catwalks and hoists to a roof is clearly at a tremendous price disadvatage if he is competing with a contractor who sends his men up an unfooted ladder to walk along the roof, perhaps breaking up the lats—but of course that would not be found out until later—and throw the broken tiles off the roof. He saves money on the hoist and it is clearly quicker, but it is bad luck on anyone standing underneath. The House must be concerned with the protection of the whole of our society and not just with the narrow issue of getting the job done as quickly as possible.
One of my constituents in Shieldfield was recently surprised when a painter came in through her double-glazed windows feet first. Since she lives at the top of a high-rise block of flats, the visit was something of a surprise. The painter was working for a private contractor and his hoist had given way. The only way to save his life
146
was to jump through the window. But why was the equipment not properly checked, and why was he not wearing a personal safety harness? It is the duty of public authorities to take these matters into consideration when awarding tenders.
Equally, it is my view and that of my supporters that ratepayers must be protected against price rings. Where there is a reasonable suspicion that a public authority is not getting competitive prices but is being held to ransom, that authority should have the power to use its own direct labour force to ensure competitiveness. This point applies particularly to work where the labour cost is the main price element in the total cost.
The Bill will place a more exacting requirement on public authorities to take reasonable steps to satisfy themselves that contractors are financially sound. An authority must satisfy itself that a contractor has the financial backing to sustain the work for which he has contracted. If the contractor collapses halfway through the contract, the taxpayer inevitably receives the costly bill. It is our purpose to outlaw unacceptable working practices that endanger the quality of the work or the safety and welfare of the work force or general public.
There are two other related matters. The first is a minor provision to require public authorities to take into account the administrative cost to the authorities when considering where to place contracts, and that especially applies to minor works. The second relates directly to the day-to-day maintenance of public sector housing.
The Bill will place a duty on a housing authority to make provision for a direct interface between the officer responsible for managing the housing stock and the building contractor. That would be quite separate from the emergency procedures. It is intended to enable the housing authority, as landlord, to obtain a swift response to a particular repair, even if it would not usually be classed as an emergency.
I hope that hon. Members will welcome the Bill because it is intended to be of assistance to private business, ratepayers, council tenants and public authorities alike.
Question put and agreed to.
Bill ordered to be brought in by Mr. Nicholas Brown, Mr. Tony Blair, Mr. Gordon Brown, Mr. Harry Cowans, Mr. Allan Roberts, Mr. Chris Smith and Mr. Jack Thompson.

LOCAL AUTHORITY (STANDARDS OF SERVICE)
Mr. Nicholas Brown accordingly presented a Bill to provide for the maintenance of standards of service where local authorities place public services out to competitive tender: And the same was read the First time; and ordered to be read a Second time upon 6 April and to be printed [Bill 138.]

RATES BILL (ALLOCATION OF TIME)
Ordered,
That the Report [26th March] of the Business Committee be now considered.—[Mr. Neubert.]
Report considered accordingly.
Question, That this House doth agree with the Committee in its resolution, put forthwith, pursuant to Standing Order No. 45 (Business Committee) and agreed to.
Following is the report of the Business Committee:
That—
(1) the order in which proceedings on Consideration are taken shall be new Clauses, amendments to Parts I, II and III, amendments to Schedules 1 and 2, amendments to Part IV, new Schedules.
(2) the allotted days which the Order [29th February] are given to the proceedings on Consideration and Third Reading shall be allotted in the manner shown in the Table set out below and, subject to the provisions of that Order, each part of the proceedings shall be brought to a conclusion at the time specified in the third column of that Table.

TABLE

Alotted day

Proceedings

Time for conclusion of proceedings

First day

New clauses

8 p.m.

Amendments to Part I

Midnight

Second day

Amendments to Part II

7.15 p.m.

Remaining proceedings on Consideration

8.15 p.m.

Third Reading

10 p.m.

Orders of the Day

  Rates Bill
  [1ST ALLOTTED DAY]
  As amended (in the Standing Committee), considered.

New Clause 6

  LEVELS OF EXPENDITURE
  'Where the Secretary of State has—

  (a) determined the grant related expenditure (as defined in section 56(8) of the local Government, Planning and Land Act 1980) for an authority pursuant to section 57(1) of the said Act of 1980.

  (b) issued guidance to an authority pursuant to section 59(6)(cc) of the said Act of 1980, and

  (c) determined a maximum expenditure level for an authority pursuant to this Act

  then, notwithstanding the provisions of the said Act of 1980, for the purposes of the determination of an authority's grant related expenditure, the issuing of guidance to an authority and the determination of an authority's maximum expenditure as aforesaid, the higher or highest of those figures shall be used for all three purposes.'—[Dr. Cunningham.]
  Brought up, and read the First time.
  3.48 pm
  Dr. John Cunningham: I beg to move, That the clause be read a Second time.
  I am afraid that the wording of the new clause is complicated, of necessity, but it seeks to prevent the Government from having three different systems, or three different amounts of money, under which they can control the budgets of local authorities which may be designated under the Bill.
  It is clear from what the Under-Secretary, the hon. Member for Ealing, Acton (Sir G. Young), said in Committee on 23 February, that a rate-capped authority would have a grant-related expenditure assessment, a target or expenditure guidance, as the 1982 Act put it. and an expenditure limit determined in accordance with this Bill. That statement highlighted the complexity into which this Administration have driven local government finance. The proposed new clause seeks to ensure that the highest of the three figures should be used for all purposes.
  It is important for us to discuss this issue for another reason, and that is to try to find out the Government's thinking about their intention to use three different spending norms for individual authorities. It is questionable whether a Government should set a norm for a local authority. It is doubtful whether two norms are sensible or practicable. To have three different norms for individual authorities is surely stupid in the extreme, but that is what will happen if the Bill goes ahead as it stands.
  It is important at the beginning of this Report stage to make it clear that the local authority associations remain united in their total opposition to the Bill. They made that clear in a press notice. The Association of County Councils, which is Conservative-controlled, the Association of District Councils, which is Conservative-controlled, and the Association of Metropolitan Authorities, which is Labour-controlled, speak with one voice in the press notice:
  "The Secretary of State has said nothing which would meet the criticisms of the Bill by the local authority associations. The

  149
  position therefore remains unchanged from the Second Reading. The Bill represents a massive shift towards the centralisation of local decision making by giving the Secretary of State effective power to fix expenditure and rate levels for all councils in England and Wales. The Associations remain united in their opposition to these proposals."
  The associations also remain united in their opposition to the Government's intention, conceded in Committee, that grant-related expenditure should be the central test on which they base their decisions to apply the measures contained in the Bill. That test was rejected by both previous Secretaries of State for the Environment in this Administration, and the present Secretary of State has reneged on persistent and numerous assurances given to the House and to local government on that key issue.
  Before the Local Government, Planning and Land Act 1980, Governments had not been in the business of telling individual local authorities what they should spend on services. That began to change with the introduction of the block grant system in the 1980 Act, because that required an explicit reference point for the purposes of grant distribution. Under the old needs element of RSG there was an implicit figure for a local authority's spending needs, but it was never used as a test for, or absolute norm of, what an authority should spend; nor was it used to judge its performance.
  The Committee spent many hours, including some during the night, discussing the shortcomings of GRE. The most important aspect of that to which we wish to pay attention today is the way in which all the undertakings that were given at the time of the passage of the Act and subsequently have been reneged upon. For example, writing in the Local Government Chronicle in December 1980, the present Secretary of State for Employment said of GRE that it would allow for the "inevitable degree of approximation". In a Department of the Environment document published in February 1981, referring to GRE, he wrote:
  "They are not, however, tailor-made to the circumstances of each authority. They do not set an expenditure target for authorities."
  There have been many similar references to the unsuitability of GRE for that purpose.
  Mr. Harry Cowans: Is my hon. Friend aware that the same right hon. Gentleman said in that same Department of the Environment document that for the Government to cap the rates would represent a conflict with local democracy? Is it not remarkable that we should be discussing a Bill which does exactly what the right hon. Gentleman then opposed?
  Dr. Cunningham: I agree with my hon. Friend. Even worse, in a briefing document dated 8 December 1983 circulated to his Cabinet colleagues, the right hon. Gentleman said:
  "The criteria by which we will select them"——
  referring to authorities to be controlled——
  "will have particular regard to authorities' recent levels of spending and how they vary from the objective measure of need represented by the grant-related expenditure."
  Far from accepting the objectivity of GRE, the local authority associations have made it clear that they are totally opposed to its use in that way as part of the proposals in the Bill.
  The Secretary of State went further in making it clear to the Committee that not only will GRE be the main test,
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  at the heart of his approach, but the local authority expenditure, not rates, will concern him principally in the application of these measures, should they have the misfortune to become law.
  The second part of the new clause deals with expenditure guidance issued by the Secretary of State under the Local Government Finance Act 1982. Expenditure guidance has been issued every year since block grant was introduced in 1981–82, although the then Secretary of. State anticipated its legality being conditional on the 1982 Act. Expenditure guidance has been enforced by massive grant penalties, and is clearly the Government's view of how much local authorities should be spending. The way of calculating the expenditure guidance has been different in each of the four years in which it has been issued. That is another measure of the uncertainty introduced into local government finance by the Government.
  There has been some reference to GRE in the calculations, but only in the first two years did the guidance represent the GRE for some councils—those councils whose calculated guidance would have been lower than the grant-related expenditure total. According to the Government's logic, targets had to be obtainable, and so it would not make sense to the Government to set GREs as targets for those authorities which were spending well above them.
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  The other side of the coin is that there is also pressure from those authorities whose guidance is below GRE. Some Tory-controlled local authorities were in that position. The Government have had to resolve that problem because it has implications for total local authority spending and is one reason why the total of GREs is. less than the total of targets.
  Trying to work one's way through the tortuous logic which has led the Government to their present position shows one just how complicated the position must be for those in town halls and shire halls throughout the country. The Government have not only consistently reduced the resources available to councils for funding services, providing jobs and helping the most disadvantaged, but they have thoroughly confused and unsettled local government to the point where good working relations between the Government and local government are at the worst level in living memory. That is the reality embodied in the words of the ADC and the ACC as well as of the AMA.
  In 1984–85, £660 million was unallocated, in 1985–86, the figure was £400 million and for 1986–87 the planned figure is £200 million. That represents the difference between what the Government would like to spend through GREs, in aggregate and individually, and the targets that they recognise may be attainable. However, in 1984–85 the targets set by the Government were described by Councillor John Lovill, the Conservative chairman of the ACC, and by others as unattainable for some authorities. Many authorities of various political complexions have endorsed that view. They are being asked to accept a 6 per cent. cash reduction. It is not fair, sensible or practicable for a Minister charged with responsibility for providing resources in a sensible working relationship with local authorities to have such a stranglehold over them, their budgets and their expenditure, or to have the option to

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  employ three different targets to suit his own political purposes. That is what is being proposed, and it is for that reason that I have moved the new clause.
  Mr. Anthony Beaumont-Dark: One great confusion was introduced with the Local Government, Planning and Land Act 1980, which some of us voted against. It abandoned the aggregate and the local policy in favour of a Government norm so rough and ready that some authorities find it easy to reach, some find it difficult to reach and some find it impossible. That is very unfair, and makes it impossible to plan.
  Dr. Cunningham: I agree with the sentiments expressed by the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). In seeking to impose their will centrally on local government, the Government are not concerned about the level of services. In reality, their principal concern is an overwhelming desire to cut local government expenditure for the sake of cutting it.
  I do not object to the Secretary of State saying that the Government should be seeking efficiency and improved performance from local authorities. No hon. Member would dissent from that. However, this is no way in which to achieve that aim. Indiscriminate cuts are forced upon those who are entrusted with the responsibility of providing services as important as education, the police, the fire services, and services for the elderly and the chronically sick and disabled.
  The Government's policies will lead not to great efficiency in local government but to an undermining of vital services and to further disadvantage in urban areas and the inner cities, especially of the black and ethnic communities and those who are already disadvantaged. That is not an improvement in efficiency. It will widen the gap between the haves and the have-nots.
  It is clear that the provisions of part I of the Bill cannot make a significant saving in public expenditure.
  The Under-Secretary of State for the Environment (Mr. William Waldegrave): Of course they can.
  Dr. Cunningham: I challenge the Under-Secretary to substantiate what he says. We took the Secretary of State's own figures, which were presented to the Committee, and his own hit list, and did the calculations. They show that in some cases there could barely be any net gain to the Treasury if a small number of authorities had their budgets controlled. The expenditure savings set out in the White Paper can be achieved only by the wide use of the general powers in the Bill.
  Mr. Waldegrave: As usual, the hon. Gentleman is employing elision and sliding from one argument to another. He is deliberately confusing grants with public expenditure, and that makes it look as though he has an argument when in fact he has not.
  Dr. Cunningham: The Under-Secretary and I will have to agree to differ.
  The Bill is really an attempt to control local authority expenditure. It is not about fairness for the ratepayer, or improved efficiency in the provision of services. The use of the powers in part I of the Bill to control the budgets of a small number of authorities is unlikely to produce any significant net saving for the Treasury. I also believe that a reduction in local authority expenditure raised from the rates will make no significant difference to the management of the economy as a whole.
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  I do not want to bore the House——
  Mr. Waldegrave: The hon. Gentleman's argument about how the economy should be managed is a perfectly fair one to advance, but no serious commentator doubts that the Bill will reduce public expenditure, and that is one of its prime purposes.
  Dr. Cunningham: The Under-Secretary of State says "no serious commentator". I assume that he is overlooking articles by the general secretary of the Chartered Institute of Public Finance and Accountancy, in the Financial Times and in a wide range of local government publications.
  Mr. Cowans: I am grateful to my hon. Friend for taking up the Under-Secretary of State's words. He is right only if part II is applied. Very little will be saved under part I, but there is a balance of £1·7 billion that can be saved only if part II is applied immediately. The Minister keeps telling his right hon. and hon. Friends that part II will never be applied. If that is so, he is incorrect to say that part I will make the savings that he claims.
  Dr. Cunningham: Yes. There is obviously a fundamental difference of opinion among the Government, their Back Benchers and the Opposition on this issue. Whatever the difference is, the Government's argument about their aims and intentions for the Bill are now a long way from their expressed intentions at the time of the publication of the White Paper and of the Bill before Second Reading.
  The new clause would prevent Ministers from having three means of taxing local authorities on their performance and saying that in every case the highest figures should be used. Under a general scheme, will the total of spending limits have any significance, and will it be cited in the Government's expenditure plans? If the general scheme under the Bill is to be employed, what will be the purpose of those spending limits? Will such a total be higher than the total of GREs or the total of target;? If the answer is yes, where will the extra money come from in the Government's expenditure plans? We should like an answer to that question, especially in the light of what the White Paper says.
  How will the Under-Secretary of State deliver the promise that he made during our debate on the rate support grant to the effect that the Bill enables the Government to improve financial assistance to the shire counties? We cannot see how that promise cart be delivered. What is the logic in penalising an authority for overspending—the Government's pejorative description of what many local authorities do when they feel it necessary to support services—expenditure guidance when spending within their expenditure limit?
  If the Government cannot answer those questions satisfactorily —I suspect that they cannot—it will be clear that they want to have the best of all possible worlds. That will be the reason for having three separate amounts by which they can tax the performance of local authorities. I believe that that is simply to suit their political purposes. It has become extremely clear in Committee that, with regard to fairness among ratepayers, those who use local authority services and control of local authority expenditure and the subsequent savings to the Exchequer, the Bill, as it stands, is fatally flawed.
  Mr. Geoffrey Rippon: I hope that the Government will look favourably on new clause 6. When

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  one examines legislation one asks whether it will work and, if so, whether it is desirable. I believe that the Bill fails on both counts, and will be proved to do so. Some of us, as my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) said, warned about that in 1980 and 1982. This attempt to determine in Whitehall the needs of every local authority will not work. It is just as hopeless a task as when, during the last war, the Government attempted to introduce legislation to measure rhubarb leaves and the translucency of eggs.
  4.15 pm
  I have considerable experience in local government, in the House and in various Ministries connected with local government, and I believe that the Bill will not work efficiently or with justice and will not contribute one iota to the general good of the country. If I may say so, I believe that my hon. Friend the Under-Secretary of State was a little unwise to intervene quite so quickly to say that the Bill, as every reasonable commentator knows, will reduce public expenditure. Public expenditure is running at about £126 billion a year. On the best estimates of the Government themselves, the rate-capping provisions will save £300 million out £12 billion. Even that is doubtful, because although some of the commentators in the Financial Times and elsewhere might have exaggerated when they said that the Bill will end up costing the Treasury £1·5 billion—it might be only £500 million—there is no justification for saying, as the hon. Member for Tyne Bridge (Mr. Cowans) said, that it will have any effect on the total of public expenditure unless part II is introduced. I do not see how it is possible to get away from that. The nation will not be benefited, because the rate-capping provision will apply—if the Secretary of State is right, and we might get clarification later—to only 20 authorities.
  Mr. Waldegrave: I understand and respect my right hon. and learned Friend's long-standing and consistent objections of principle to the Bill. I do not agree with his argument about the totality of public expenditure, as opposed to savings on rate support grant to the Treasury, where a complicated case can be made. Opposition Members complain about the Bill leading to a reduction in services, but no one doubts that the Bill will diminish spending in that part of the public sector which falls to the rate-capped authorities.
  Mr. Rippon: It is not possible to say that nobody says it, because I say it, and the Financial Times has said it. Acts of Parliament that are basically unworkable and so confused that hardly anyone can understand them do not end by producing a more efficient or cheaper system of government. That is my belief. I might be wrong, but time will tell. New clause 6 attempts to introduce some clarity. If Parliament is to give the Secretary of State such sweeping powers as are now envisaged to pick off one authority or other by whatever criteria he might ultimately have in mind, we should define those powers with much greater clarity. My right hon. Friend the Secretary of State said in Committee on 6 March that the implementation of part II would be "a major constitutional matter".
  That applies to the Bill as a whole and even to those matters to which new clause 6 is directed. Unfettered discretion—I also say this from some experience—given
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  to Ministers in matters of this type which affect hundreds of authorities is, in practice, given to permanent officials in Whitehall. Therefore, every time in a Bill such as this we read "Secretary of State for the Environment" we should substitute "principal" or "assistant principal". It is not good enough to give such wide powers to any Minister just on the basis that my right hon. Friend will use them wisely.
  A future Secretary of State — let us call him, hypothetically, Ken Scargill — might not act so benevolently when using this Conservative measure. Nothing is more prejudicial to good legislation than the idea that Parliament can merely pursue ends without very careful consideration of the means.
  No one is objecting to a limitation to the rate burden, to reduction, where appropriate, in the total percentage of Government grant, to measures that lead to greater efficiency, or to bringing pressure to bear on local authorities that are spending unwisely. That is also a matter for the local electorate to consider. However, it is absurd to make general sweeping observations that somehow a Bill of this kind will result in a dramatic reduction in public expenditure. Local authorities cannot print money, there will be no effect on the PSBR, and capital expenditure is already controlled. We should be extremely wary of so-called skeleton legislation of this kind.
  Mr. Beaumont-Dark: Perhaps I can add fuel to what my right hon. and learned Friend has said. Is it not impossible nonsense to say that local government expenditure will fall when the target set for it over three years falls by 11 per cent., allowing for inflation, as a result of which more expenditure is being passed to ratepayers, given that the rate support grant has fallen from 66 per cent. of expenditure to about 50 per cent.? Surely it is impossible to ask local authorities to do what this or any other Government have been unable to do for central Government expenditure.
  Mr. Rippon: I accept that part of the problem is that over a period of years—this applies to a number of Governments—we have shifted expenditure from taxes to rates and from voters to non-voters. There is no doubt in my mind that the only way to deal with these problems is to have a thorough-going restructuring of local government finance. I am all for restructuring the European Community budget, and there we are talking about a good deal less than £12 billion a year. Therefore, there is a good case for restructuring local government finance. Indeed, one of my objections to the Bill is that it dodges the whole issue of local government finance and the real necessity to reduce the rate burden on both domestic and non-domestic ratepayers.
  Mr. Christopher Chope: If my right hon. and learned Friend thinks that we should restructure rate revenue, would it not be preferable if we were able to take some effective measures against profligate authorities? What does he propose we should do with the undoubtedly profligate authorities which prosper in areas where there is no prospect of their being voted out of office?
  Mr. Rippon: My hon. Friend refers to a profligate authority. I have no objection in principle to rate-capping an authority that has abused its powers, nor have I any

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  objection to sending in commissioners when a local authority manifestly behaves illegally. However, in those circumstances, the House should consider every case. That is quite different from giving a sweeping power to a Secretary of State to nominate all sorts of authorities which he thinks are profligate. He will never be able to acquire the evidence in relation to 19 or 20 authorities, much less for the whole country, without being guided almost entirely by permanent officials.
  My objection to this type of skeleton legislation is that it does not clearly set out the criteria by which a profligate or overspending authority is defined. What is overspending is a political decision, not something that can be laid down automatically from Whitehall. After all, a skeleton is the very symbol of lifelessness, and a bony structure does not make an organism.
  In his book "Law and Orders" published just after the war, Professor C. K. Allen said of skeleton legislation:
  "It is a dangerous doctrine that the legislature is only concerned with that osseous framework and is incapable of understanding the organs and the flesh and the blood—not to mention the soul".
  We should not treat this simply as an exercise in controlling public expenditure, because we are undermining the entire historical relationship between Members of this House and members of local authorities, who in their own way are also trying to serve the country.
  The new clause tries to introduce some sort of order into a disordered situation. The three factors that must be considered are the target, which is the expenditure guidance as defined in the 1982 Act, the expenditure limit in accordance with the Bill, and the GRE.
  I have previously suggested that the 1980 and 1982 Acts would fail. That, presumably, is why we have the Bill. There have been two Acts, seven changes in the basis of grants and a system that is now operating under which people cannot be sure from month to month or from year to year whether they will be underspenders or overspenders according to whatever criteria may be chosen. This is a thoroughly unsatisfactory state of affairs, however we define it.
  Mr. Patrick Cormack: Does my right hon. and learned Friend agree that among the authorities most worried by this legislation are ones such as my own in Staffordshire, South which have records of prudence, good sense and sound housekeeping and which are now in a state of jittery uncertainty?
  Mr. Rippon: That is true and has developed. As I also warned, people were quite happy when they thought that the 1980 and 1982 Acts would hit Socialist authorities and only a few of the so-called overspenders. In the event, they hit authorities which thought they had been acting prudently. We must also bear that in mind. What is the logic of trying to pursue an authority for overspending when it is within its expenditure limit? There are so many anomalies in the present legislation, and there is such a state of confusion, that it is totally incomprehensible that we should have another Bill which will merely make things even worse and more confused.
  There has been much talk of a breach of some supposed convention between the local authorities and central Government. I do not recall any such convention. I do not know what has happened that is so very different. Normal practice has been the control of capital expenditure and a long negotiation with the local authority associations over
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  the basis and total percentage of the Government's contribution to local government. It was always accepted that needs would vary from area to area.
  In 1973, I recall asking the then Minister for Local Government and Development to discuss with individual local authorities whether their needs, unemployment position or availability of men and materials were so different that they could have an additional capital allowance. But once the Government had controlled the percentage of Government expenditure and adjusted domestic rate reliefs and so on, it was always accepted that the local authority had to define local needs. The local ratepayers had to pay the subsequent rate, and if they thought that the local authority was extravagant the remedy was in their own hands.
  I do not believe that the question of how many rate catchers are needed in Liverpool should be turned into a sort of war of Jenkin's ear between the local authority and the Department of the Environment. We must ask whether Parliament exists simply to enumerate general principles and then to leave their application entirely to the central bureaucracy. Should not we be considering the working of the principles that we may be willing to approve and adopt? We have— and I speak as, perhaps, a rather Right-wing Conservative—come a long way from John Locke's requirement for liberty under the law:
  "The laws must be known and certain and not subject to the unknown, unjust, arbitrary will of another man."
  The Bill concentrates Government power to an extent unparalleled since local' authorities were created. It seriously alters the whole relationship between central and local government.
  4.30 pm
  On Second Reading I suggested that my right hon. Friend the Secretary of State should read and that my right hon. and learned Friend the Lord Chancellor should reread his book on "The Dilemma of Democracy" and what he had to say about "elective dictatorship". In the light of the Government's White Paper, we are considering the so-called doctrine of the unitary state and the principles of parliamentary supremacy. There is one other document which I should like my right hon. Friends to look at—the book written by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), called "Freedom under the Law", published by the Conservative Political Centre in 1975. In it he said:
  "The unbridled supremacy of Parliament is quite recent, historically speaking. Parliamentarians of the past believed that Parliament, though primus inter pares among the powers, should respect the independence of other institutions. They saw the 'liberties of Englishmen', as actually enjoyed, as the great barrier to despotism. Parliament was respected precisely because it rested on a great base of independent and separate institutions. By turning on them and subjecting them, it is eroding its own political base."
  I hope that before my right hon. and hon. Friends support this measure they will hear in mind that they will be doing so contrary to every precept and rule of law for which the Conservative party has ever stood.
  Mr. John Cartwright: It is a pleasure to follow the right hon. and learned Member for Hexham (Mr. Rippon) because he articulates the true voice of local government Conservatism, with which some of us have grown up, on which we have cut our political teeth and from which we learnt a great deal. I agree with everything that he said.

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  One point that always puzzles me in debates about rate capping is the lack of confidence that most Conservative Members have in the electoral process. When they refer to the wicked, overspending authorities, one cannot help but remember that a number of those authorities have been Conservative-controlled at some time in the comparatively recent past. It is true that we must have a Labour Government to create that kind of Conservative control and that, faced with the problem of a local authority that seems to have forgotten the genuine priorities of its electors, Conservative politicians do not try to strengthen their local appeal so as to win an election and change that authority. Instead, they seek to bring into play higher forces — big brother in Whitehall — rather than to mobilise the forces of opinion at local level.
  Mr. Jack Straw: Does the hon. Gentleman agree that, in particular, new Conservative Members show a curious lack of confidence in the democratic process, and that their presence here often confounds their hestitations about that process?
  Mr. Cartwright: As ever, the hon. Gentleman puts things rather more elegantly than I. Perhaps my presence here shows that one can have greater faith in the electorate than Conservative Members seem to have when it comes to local government issues.
  I operate in one of the boroughs that has been picked out for rate capping — the London borough of Greenwich. I live there and represent a large chunk of it. I have made it clear on a number of occasions that I do not support its spending priorities. Much of what it is doing is not in the best interests of my constituents, and I have said so on a number of occasions. I should prefer to take the problem back to the electorate on the next occasion, in 1986, than to bring into play civil servants and Ministers in Whitehall to sort it out.
  It is not easy to help the London borough of Greenwich in these matters. Knowing that I was going to be on the Committee dealing with this Bill, I wrote to the chief executive of Greenwich on 10 January, asking him for the appropriate information about the effects of the Bill on the local authority. I have not had any information, a letter in reply, or even an acknowledgment. No doubt, the chief executive of Greenwich remembers that old story about the aged Member of Parliament in the Tea Room, giving advice to a new Member, who said, "Never answer letters, son. It only encourages them."
  I was not deterred. When the Secretary of State introduced his famous fruit machine and produced 11 possible methods of qualification for rate capping, we discovered that Greenwich hit every one of those categories and therefore qualified 11 times for rate capping. I thought that that might concentrate a few minds in Greenwich, so I went to see the leader, the chief executive and the treasurer and brought them the glad tidings. I asked them whether they would like to respond to these facts. They looked worried and said that they would. So far, I have not heard a word from them.
  I notice that the hon. Member for Copeland (Dr. Cunningham)—who has left us briefly—is apparently to visit my constituency on Thursday to lead the local population, in the great uprising called "Democracy Day", against the rate-capping legislation. The council has produced a leaflet that says that, with help, it can defeat
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  the Rates Bill. I should have liked some help from the London borough of Greenwich to help me defeat the Rates Bill. I have not had very much.
  Mr. Straw: We have given the hon. Member for Woolwich (Mr. Cartwright) a great deal of help, and I hope that he will show his gratitude.
  Mr. Cartwright: The hon. Gentleman is again leading with his chin. I was seeking practical information as to how this legislation affects the London borough of Greenwich, but I have not even had the courtesy of a reply to my letter. If the hon. Gentleman is saying that it cannot be done, I point out that this week I had a letter with facts from the leader of the council in Lewisham, the neighbouring borough, which contained a great deal of critical information showing how the legislation would affect Lewisham, and giving Lewisham's answer to the Secretary of State's approach. If Lewisham can do it, I do not see why Greenwich cannot.
  Mr. John Powley: Does the hon. Gentleman agree with my experience in local government — that when one asks officers for a report on how economies can be made in the local authority, they inevitably produce a report itemising the most emotional sectors with which the local authority deals as being subject to economies? They never say that they could do away with creating a nuclear-free zone or with the leaflets that are produced, or improving the efficiency of services so as to reduce the number of local authority staff. Such reports are never produced. Instead, officers report on the most emotional things that they can think of.
  Mr. Cartwright: The hon. Gentleman tempts me into interesting byways. All officers, when asked for suggestions about economies, make sure that those economies do not impinge on their responsibilities. That is a natural development in local government. I am saying that any answer, reaction or information from Greenwich would have been welcome. Instead, there was stone-wall silence.
  Mr. Cowans: Perhaps the hon. Gentleman is too hard on the London borough of Greenwich. I, too, received the correspondence from Lewisham, which was welcome. However, although most of the things in the document were valuable and interesting, they have already been used in Committee. Whether it be Greenwich or anywhere else, is it not the case that the vast majority of local authorities cannot react to the Bill because most of the things to which they want to react are not yet in the Bill and apply only after the Bill has become law?
  Mr. Cartwright: The hon. Gentleman always makes an interesting case, but if his local authority had struck gold on every one of the qualifications that the Secretary of State suggested for rate capping, would it not have come up with some good answers as to why it was in that position, why its spending looked to be higher in relation to past records of comparatively low spending, and so on? I was asking only for some practical information.
  Mr. Straw rose——
  Mr. Cartwright: This is getting rather like a seminar.
  Mr. Straw: The hon. Gentleman seems to be providing the answer to his question, to the satisfaction of the House. In his speech on Second Reading, he told us that, despite Greenwich's high level of spending, an Audit Commission

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  report showed clearly that expenditure per head in terms of services lagged behind comparable Tory boroughs. Surely that is the explanation.
  Mr. Cartwright: Unfortunately, that information turned out to be not entirely accurate. The Audit Commission's information, as related to me, turned out to be not quite as I presented it. That is why I wanted rather more firm information from the London borough of Greenwich than that which I quoted on an earlier occasion.
  I support the new clause because it reminds us that the Bill has not appeared out of a vacuum. It comes to us from the same team that produced the Local Government, Planning and Land Act 1980 and the Local Government Finance Act 1982.
  The 1980 measure gave us an extraordinary phrase that is referred to in shorthand as GREA — grant-related expenditure assessment. Many of us were suspicious of that form of assessment and disliked the idea that somebody could calculate a reasonable and rational level of spending for local authorities in various areas for a given service.
  A phrase constantly used by Ministers in Committee when describing the grant-related expenditure assessment system was "rough justice". It was claimed that it was the only available test of an authority's need to spend. A number of those engaged in local government accepted it on that basis. They accepted it also on the understanding that it would be used as a means of allocating grant, not of controlling expenditure. However, as we often discover when dealing with these issues, the one slid inexorably into the other.
  The 1982 Act regularised the complex business of expenditure guidance, as it was euphemistically called, which incorporates the target and penalty system. In this Bill we have the concept of a maximum expenditure limit. It provides a third weapon in the armoury with which Ministers can tax local authorities on their spending. Given their past record, I can understand why the Government feel that they need belt and braces, but to require belt and braces and a stout piece of string seems to be going rather far.
  If the clause were accepted, it would serve two useful functions. First, it would go far towards simplifying local authority expenditure. It is a novel idea that it could be made a good deal simpler. Local government officers, councillors and ordinary members of the public would very much welcome that.
  Secondly, it would go some way towards introducing an element of natural justice into the way in which local government operates. It seems extremely unfair that a local authority which is spending below its grant-related expenditure level should be penalised under the grant penalty arrangements or the rate-capping system. It seems monstrous that an authority that is spending below its maximum expenditure limit should be penalised under the preceding arrangement.
  Opposition Members have constantly urged the Government to accept amendments and new clauses which would smooth the impact of the Bill and make it appear rather more fair and reasonable than it is. Our efforts have been thrown back in our faces. It is a reflection that hope triumphs over experience that we continue to make them. It is very much on that basis that I commend the clause to the House.
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  Mr. Reg Prentice: The new clause and the proposed amendments to part I should be regarded as a form of damage limitation. The Bill is an extremely bad measure and it will not become acceptable to many of us, irrespective of the amendments that are accepted and implemented. I wish that at this late stage the Government would listen to the vast amount of expert criticism of what they are doing, especially the criticism that is coming to them from Conservative councillors of long experience throughout the country. Assuming, reluctantly, that they will not take that advice, there are two realistic hopes that we must bear in mind.
  The first hope is that the Bill will be seriously amended in another place. By that I mean removing the general powers and imposing some strict limitations on the way in which the Government will be able to use the powers in part I. When that has happened, I hope that the Government will not attempt to get this place to restore the Bill to its original form. Should they try to do so, I hope that they will not succeed.
  The second realistic hope is that by prolonged discussion, including the present one on the practicalities of the powers in part I, the ongoing debate outside the House and the dialogue with the local authority associations, the Government will be strongly encouraged to make the minimum, rather than the maximum, use of the powers in part I.
  Any use of the powers in part I would be profoundly damaging, because it would open a new chapter in the constitutional relationship between central and local government. For many years now Governments of both major parties have had some powers over the spending of local authorities. They have had direct powers over the capital expenditure of local authorities, but they have relied on persuasion in influencing local authorities' total expenditure. That persuasion has been reinforced with a carrot-and-stick apparatus. Sometimes there have been powerful carrots and sticks— for example, the present arrangement that bears on targets and penalties. The new step of the Government prescribing the maximum expenditure of a local authority will seriously change the constitutional relationship between central and local government. If that change were pursued widely and used more every year, it would be the beginning of the end of local democracy.
  Others have said that the Government would make the minimum use of the powers in part I if they applied them to less than 20 authorities. If they took that course, they would not make a significant saving in public expenditure. I thought that that was undeniable. I took that view until I heard the intervention from my hon. Friend the Under-Secretary of State. Perhaps he will enlarge upon that later.
  The figures that have been given, including those provided by the Secretary of State on Second Reading, suggest that the use of the powers in part I against a penal code would lead only to an insignificant part of public expenditure being saved.
  Mr. Allan Roberts: Is the right hon. Gentleman aware that in Committee the Secretary of State for the Environment suggested that there would be an increase in central Government expenditure as a result of rate capping under the restricted scheme, although that would mean lower rate increases, which might mean a reduction generally in public expenditure? However, there

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  would be more rate support grant given to local authorities which were rate-capped because they had held down their rates and cut their services. The consequence of that policy would be to increase central Government expenditure. That contradicts the belief of many Conservative councillors that there would be more money for them from central Government if profligate Labour authorities were rate-capped.
  Mr. Prentice: I am grateful to the hon. Gentleman for his intervention. It bears out the argument that, if the powers in part I are used in the limited way that is so often prescribed, there would be no savings in public expenditure, or only very small savings. That has led some to suggest that the Government would have to implement part II. That is not necessarily so, because there is no limit in part I on the number of authorities to be rate-capped. An amendment directed to that argument will be discussed later.
  The new clause is relevant to that point because it establishes the criterion of a higher threshold, so a smaller number of authorities would be less severely affected. I wish to concentrate on that aspect. After the Bill becomes law, many pressures will be put on the Government to use the power more each year. Pressure will come from disappointed ratepayers who, having expected the Bill to relieve their rate burden, find that it does nothing of the sort. Pressure will come from the CBI and other spokesmen of industry, as well as from the Treasury in the context of the annual discussions on public expenditure.
  There will also be the knock-on effect that was so well described by the hon. Member for Blackburn (Mr. Straw) in his closing speech for the Opposition on Second Reading. If a dozen or 20 authorities were rate-capped in the first year, and it was found that another dozen authorities were spending more than the rate-capped authorities, it would be logical to add that second figure to the first in the second year, and perhaps to add a third group of authorities in the third year. Therefore, the unamended Bill would tempt the Government to use the power more each year. Indeed, the Government would be under pressure, as a general election approached, to do something about the rates and would perhaps use the powers in the Bill.
  I support the new clause and, by implication, other new clauses and amendments before the House today. They would provide limits in different ways on the use of the powers in part I. The House could oppose these limits if it had the will to do so. Otherwise, they could be opposed in another place. If the Bill is passed unamended and if the Government made increasing use of those powers year by year, that would be the end of local democracy.
  Mr. Allan Roberts: I shall speak briefly about new clause 6, relating it to the Government's general powers to cap the rates of many local authorities. The new clause refers to grant-related expenditure—the target used for expenditure guidance referred to in the Local Government Finance Act 1982 — and to an expenditure limit determined in accordance with the Bill. That should not be used by the Government as justification for and means of assessment of rate capping. The new clause provides that the highest figure produced in those three determinations of expenditure shall be used for all the purposes required under the legislation.
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  The new clause is important because the existing provisions enabling the Secretary of State to use any one of those three determinations, or any combination, bureaucratise the draconian powers taken by the Minister under clause 2. It enables the Secretary of State, his civil servants or his computer at the Department of the Environment at any time to alter the means by which rate capping is introduced. It enables the Secretary of State to alter the criteria in an arbitrary and unjust way, so that he can put chosen local authorities into the penalty box. That would affect only Labour-controlled local authorities. Based on the simple, party political argument, a Conservative Secretary of State could use the GRE, the target or the expenditure limit as he chose, or any combination, so that Labour-controlled local authorities, or those not controlled by the Conservative party, fell into the penalty box.
  The Bill is not simply that of the Secretary of State for the Environment. The truth came out when the Secretary of State, in Committee in the middle of the night, said that the general powers would not be used. We have been told that that infuriated the Chancellor of the Exchequer, and it certainly infuriated the Treasury. This legislation is as much that of the Treasury as it is of the Department of the Environment. If the public sector borrowing requirement begins to get out of hand and the burden of expenditure by local authorities is high, the Treasury might urge the Cabinet — not necessarily the Department of the Environment or the Secretary of State—to require that the general powers should be applied. If the general powers could not be applied, the GRE, the target figure and the expenditure limit might be used to bring many more local authorities into the penalty box in order to reduce public expenditure, which is what this legislation is about.
  In Committee, we challenged the Secretary of State to tell us in what circumstances the general powers would be used and how the Government could allay the anxieties of local authorities belonging to the Association of County Councils or the Association of District Councils and representatives of Conservative-controlled local authorities. The Secretary of State put forward two arguments. He said that the general powers would be used only in exceptional circumstances, if at all. He developed a scenario in which as many as 100 local authorities which were acting reasonably one day suddenly started to act unreasonably and to overspend.
  The Secretary of State was asked to say what circumstances would bring about such a change: whether the electorate would return councils of a different political persuasion or whether the local democratic process would be overridden by the Government's general rate-capping powers. The Secretary of State said that that would not happen, but he could envisage a moderate Labour leadership of a local authority suddenly being overthrown by a loony Left leadership, which happened at the GLC when Ken Livingstone took power. The Secretary of State speculated that that could happen in 100 local authorities all at once, as if there were 100 Ken Livingstones poised in the wings waiting to take over. The country and local authorities are not fortunate enough to be in that position. The Secretary of State's first argument was ludicrous. His second was that the power would not be used, but, once on the statute book, it would act as a deterrent—a sort of independent nuclear local authority deterrent—which would never be used but was needed, just in case, to deter

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  those who might be tempted to spend more than the Government wanted. That was one of the reasons for introducing the power.
  We challenged the Secretary of State to tell us what criteria would be used and how they would be applied, and to give detailed information about determining the authorities to be rate-capped. The Government produced lists and ideas. Based on differing criteria—using the GRE, the target and the expenditure limit—different local authorities fell into the penalty box, or "scored the lemons" as the hon. Member for Woolwich (Mr. Cartwright) said. The combination of criteria to be used would depend on which local authorities were in line for rate-capping. The criteria—the Government's intentions —are arbitrary and are not enshrined in legislation. The Government are merely handing on a plate to the Secretary of State for the Environment—or, as some Conservative Members have said, civil servants—the right to decide.
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  In Committee the Secretary of State said that he objected to Opposition Members claiming that civil servants in the Department of the Environment would take policy decisions. I am sure that the Secretary of State was sincere, believing that the situation is such that the decisions about penalties, clawback and holdback are taken by Ministers, not by civil servants. However, if the legislation goes on the statute book, it will be impossible for any Minister to determine the levels of services and expenditure for the purpose of assessing who should or should not be rate-capped without handing the job over to computers or the Civil Service, because it will be too big for any group of Ministers.
  I support the new clause. I hope that the Government will look at it favourably, as the right hon. Member for Daventry (Mr. Prentice) did. If they do, it will be the first time that any reasonable, logical or sensible amendment or new clause has been looked on favourably by the Government. In Committee, they would not accept one suggestion, amendment or new clause that came directly from the two Conservative local authority associations. They did not even accept amendments that required more consultation, more parliamentary scrutiny or the establishment of the principles on which rate capping will be based.
  We were trying to help. We said to the Government, "These are your Conservative councillors who are suggesting these amendments, which you need to accept to make the Bill acceptable to some of your own Back Benchers and people in the local authority association." The Government would not listen. They did not accept one amendment. I hope that they will accept the new clause. If they run true to form, that is unlikely. It is in the spirit of trying to assist the Government to improve their legislation, particularly in the eyes of their own supporters, that the new clause is moved.
  Mr. Beaumont-Dark: For about four years, in one piece of legislation after another, we have endeavoured to think that we can do the impossible. I said on 8 July 1980 that in a wretched package, which is what I called the Local Government, Planning and Land Bill,
  "We shall reap a bitter harvest, and we shall not get the cooperation that we desperately need between the great spenders of Whitehall and of town halls." —[Official Report, 8 July 1980; Vol. 988, c. 269–70.]
  That has proved to be true.
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  The way in which we decide what local authorities get is unjust. It is so easy for some and so difficult for others to comply with it that there is no sense of natural justice. Whether it is right or wrong, the Government have decided to switch from the rate support grant to the ratepayer a considerable burden of extra expenditure. If the system was bad all those years ago, which was the reason why we introduced new Bills, how much worse and more unfair it is today.
  On Saturday, at a certain party's central council, the Secretary of State once again put forward what in my view is the most misleading case and promise of all and accused those of us who disagree with him of being fractious. Why is it fractious to stick by principles that one has held and that one was told one's party held? A certain person has done terribly well since she rightly said on 28 August 1974 that
  "within the normal lifetime of a Parliament we shall abolish the domestic rating system and replace it by taxes more broadly based and related to people's ability to pay. Local authorities must continue to have some independent source of finance."
  As I said in Committee, I agreed with that then, and I agree with it today.
  In 1978 the present Secretary of State for Defence was concerned with local government. He said:
  "We are committed to a root and branch appraisal of the powers of Whitehall over local government. We shall in government department after department, reduce and eliminate many of the controls that currently tie Britain's cities to Whitehall departments. I believe that that will speed decisions, save money and restore a sense of competitive independence to local democracy."
  My right hon. Friend was right then, and he is right today.
  It is not those of us who oppose the Bill who have shifted our proper ground on changing to a fairer system. but other people have moved on. They have left the principle behind that one cannot expect the rating system to bear the burdens that it does. If the people of Italy. France, Germany, Switzerland and America have a better system, why do we have to lie back supinely and say that this country alone, with all its inventiveness and its lead in the world, cannot find a better way for local taxation to be raised? We are the only country—it grieves me that a Conservative Government should do it — that needs these draconian powers, yet we are the very cradle of democracy. Disraeli is one of the people whom our party likes to quote. I like to quote him because he was sound then and is sound today. He said that
  "Centralisation is the death blow of public freedom."
  Centralisation is the death blow of freedom. One good thing that came out of the Committee was the wonderful publicity that was given to the Under-Secretary's book on Leviathan and the future of the Conservative party. What he said in his book followed the drift of my view. I agree with what he wrote now that I have read his book. I hope that when we have got this squalid little Bill out of the way we shall not lie back and say that we cannot do what our continental friends and the Americans can do. That would pain any of us in the Conservative party who loyally believe in the principles on which we were elected. I agree with most of the things that we do. However, it is bad for the Conservative Government to throw in their hand as they have done in this problem. One cannot expect local authorities to play the game if we do not play the game with them.
  As has been said by more than one hon. Member, there is a kind of Russian roulette in local government finance, so that no local authority knows from year to year or week

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  to week on what real criteria it should base expenditure. To have a system where the needs of the old people of Bournemouth are judged the same as those of the old people of Aston, in the city of Birmingham, must lead to all the iniquities and the sense of unfairness that people hate.
  It sounds odd that we should depend on an undemocratic House to keep democratic rights for people. I hope that the Government will have the sense to think again. The basis of local accountability for local expenditure decisions will be destroyed if the Bill is passed; the basis of accountability will be with the Secretary of State. It is not the audience that one has to please, but the managers. The most important thing about local democracy, which is a thread through life in this country and is just as important as the rights and spirit of the House, is local accountability for local decisions on local needs.
  Every now and then we hear of ravings by idiot people in Liverpool and of some strange people in the GLC who support groups such as "Black Babies against the Bomb", peace groups, or "Troops out of Northern Ireland". The Government believe that because of some of those things one must destroy the basis of local government legislation and damage the name of Conservatism, which stands for freedom for all. In my view that is foolish, as is the Bill. It may be too late to make a change here, but I hope that the other place will restore the Conservative party to itself again.
  It grieves me genuinely that I have had to fight the Bill for some months, together with other people. We are not fractious or being just disagreeable. We are not the disappointed—whether we are in office, out of office or will never have office. We are elected to the Chamber to support the principles of Conservatism and what we said when we were in opposition when we had time to think.
  People will feel harried and under pressure. The Bill will not save expenditure. It will not even work, so it will be bad politically as well as constitutionally. People will believe anything if they believe Government statements at Conservative and other conferences that all will be well when the Bill is passed. If any Government have kept expenditure under control, it is this Government. They have done so against great odds and with great credit. Nevertheless, expenditure has rolled on, although at a lower level. We have set down that, in the next three years, local authorities will need to reduce expenditure in real terms to minus 7 per cent., minus 2 per cent. and then by minus 2 per cent. Therefore, Robin Pauley's figures in the Financial Times are likely to be proved true.
  The Conservative party will reap all the unpopularity that should rightly belong to local decision-makers. As Members of Parliament, we shall be harried and hounded about this Bill, which will not work.
  Mr. Allan Roberts: Will the hon. Gentleman give way?
  Mr. Beaumont-Dark: I shall just finish my speech. I hope that even at this late stage the Government will, even if they cannot concede the Bill, agree to stand by their 1974 principle. If other people can find a better way, so can we. Our Government must have the courage and tenacity to do that. That is why I support the new clause and will vote against the Bill.
  Mr. Chris Smith: The new clause goes straight to the heart of the absurdity and difficulty faced by Whitehall in attempting to set any target figure for expenditure and services in local authority areas. It seeks to highlight the inappropriateness of the present system of grant-related expenditure assessment figures, penalties and guidance figures. It seeks to highlight also the absurdity of expenditure limits, which the Government are seeking to impose in this Bill.
  My hon. Friend the Member for Copeland (Dr. Cunningham) amply demonstrated the absurdity of having three different target figures, all of them supposedly to be met by local authorities. I hope that the Government will give an interesting response about exactly which of the guidelines that the Government seek to impose on local authorities represent a genuine attempt to assess the needs and the services that should be provided in a particular area.
  The grant-related expenditure figures are especially absurd. To date, the Government have based their assessment of what will happen when the legislation becomes law on the GRE figures. We know that the Government are seriously considering using a guideline of GRE plus 20 per cent. as the base line for bringing in the selective powers. The GRE is to act as an objective measure of what should happen in local authorities. We need look only at how the GRE works in practice to recognise that that is far from the case.
  The GRE for social services is an example I used in Committee. It bears repetition because it is a graphic demonstration of where the GRE assessment figures go wrong. The GRE figures for social services in inner London show that each inner London borough, including Conservative and Labour-controlled and supposedly profligate and supposedly prudent authorities, is spending more than 16 per cent. above its GRE assessment figure for social services. I refuse to believe that each of those local authorities is wrong and the Department of the Environment is right. It is clear that the Department of the Environment has its figures wrong and that local authorities' figures more closely reflect the real needs of people in their areas.
  My borough, like the borough represented by the hon. Member for Woolwich (Mr. Cartwright), is one of only five authorities that can be hit under each of the 11 different criteria given by the Secretary of State. According to the Department of the Environment, my borough is spending 33 per cent. above its GRE figure on social services.
  5.15 pm
  I shall examine one example, because it demonstrates the validity of the new clause and the network of different figures and the penalty system introduced and established by the Government. One of the Government's laudable aims is to ensure that in future years care for the mentally ill and mentally handicapped will occur more in the community and less in institutions. As part of that aim, the Government seek to close the large-scale institutions which presently house large numbers of mentally handicapped people. The Friern Barnet hospital serves many boroughs in north London, and its closure, which is scheduled in five years' time, will mean that a number of people will be returning to the communities from which they originally came. About 500 people will probably return to the borough of Islington. They will depend on the

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  borough's social services provision for support. The local authority's cost of providing the services can conservatively be estimated at £2 million or £3 million in any one year.
  The block grant penalty on that extra expenditure—this operates for each £1 of new expenditure the borough seeks to provide—to cope with people coming from Friern Barnet hospital will amount probably to about £6 million. The increase in expenditure, which includes the original expenditure and the penalty incurred, will add between £8 million and £9 million to the borough's expenditure to accord with Government policy. Islington people will therefore face about an 18 per cent. increase in rates.
  That is a simple example of what happens under the present expenditure system. The operation of the GRE figures, which are totally inadequate, and the penalties imposed when expenditure rises about above the GRE figures mean that genuine services, which the Government say local authorities should provide, will be dangerously harmed or the ratepayers must foot an enormous bill. That demonstrates that the present system of targets and penalties is haywire. Given the different amounts that the Government say local authorities should be spending on people, who often are in desperate need, the least the Government can say, if and when the Bill becomes law, is that the highest of the figures should apply. The penalty system should not come into operation merely because the Government have imposed spending limits on local authorities. The least that we should ask the Government to accept is that some people desperately require geniune services provided by their local authority in areas such as the one that I represent.
  Mr. Cormack: We have heard some eloquent speeches this afternoon, in particular from my right hon. and learned Friend the Member for Hexham (Mr. Rippon), my right hon. Friend the Member for Daventry (Mr. Prentice) and my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). I do not always agree with my hon. Friend the Member for Selly Oak, but he was in sparkling form this afternoon. I am sad to have to agree with them, because it is not comfortable to find oneself at odds with one's party and Government. I know that my hon. Friend the Member for Selly Oak endorses that feeling entirely.
  Here we have a classic case of the old adage, "hard cases make bad law." This is bad law in the making, and I sincerely hope that it can be somewhat improved before it leaves the House, although that I doubt. I devoutly hope that their lordships will do something to tidy it up. Even then, we shall be left, almost whatever they do, with an undesirable and profoundly un-Conservative piece of legislation.
  With many of my right hon. and hon. Friends, I went this morning to the memorial service for Maurice Macmillan. It is not without tragic irony that the Second Reading of this Bill was the last occasion on which, I believe, he cast a vote in the House, and he voted against the Government. He was a man who, in every sense, was not just a true servant of the House, and a notable politician, but a Tory of impeccable credentials. It was because of people such as Maurice Macmillan and his father that many of my generation aspired to the House of Commons. We came here and embraced the Tory creed because we believed in certain simple items of Tory
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  philosophy. We did not believe that it was right for the Government to interfere in every minute particular of people's lives. Less government, not more, was the slogan under which I frequently campaigned. We came here because we did not believe in excessive centralisation. That was the way towards the Socialist state. Opposition Members, for the best and most honourable reasons, may wish to tread that path, but I do not wish to follow them and, most of all, I do not wish my Government to lead the people there.
  We came here, too, because we believed that some of the most misguided words ever uttered in post-war Britain were the infamous words of Sir Hartley Shawcross, as he then was:
  "The gentleman in Whitehall really does know better"
  Mr. Peter Hordern: It was Douglas Jay.
  Mr. Cormack: I stand corrected. Sir Hartley Shawcross said:
  "We are the masters at the moment."—[Official Report, 2 April 1946; Vol. 421, c. 1213]
  Those quotations could be hung around the necks of the Secretary of State and his colleagues.
  We also came here because we believed in another old Tory truism of trusting the people. Whichever of those items of philosophy or slogan one takes, this legislation flies directly in the face of Tory tradition and practice.
  It also seems to me that it is not without its sadness that the Minister, who has borne so much of the brunt of taking the legislation through the House, wrote a notable work, "The Binding of Leviathan". I had the honour to review that book when it was first published. I gave it a good review, because I thought that it was an excellent book. I thought that it was a fascinating outline of Tory philosophy. Yet, here he is, poor man, having to take through the House of Commons a Bill which, at that stage in his political development — he seems to have regressed—he would hardly have thought desirable.
  One of my most unhappy recent experiences was to talk to the elected councillors of south Staffordshire. They are Tories almost to a man and woman. The Tories and independents have an overwhelming majority. Some people may say that it is too large a majority, but I would not agree with that. South Staffordshire has a record of prudent housekeeping and of doing all the things that Conservative Members have advocated. We did not have to be coerced, cajoled or persuaded into selling council houses or balancing budgets. I have never seen those elected councillors more sadly united than they are at the moment against the Government and their approach to local government.
  Things have reached a pretty pass when one has elected representatives from all parties, including those who have in many cases given decades of service to the Conservative party and local communities, saying to the Government —if, with my hon. Friend the Member for Huntingdon (Mr. Major) on the Benches, one can slightly distort the words of Cromwell — conceive that you may be mistaken. The Government have not been prepared to concede that they are mistaken, but profoundly mistaken they are.
  There are two factions that could persuade my lion Friend the Member for Selly Oak and myself to support a measure like this one in times of difficulty and crisis. although, thanks to the skilful leadership of the Government in other spheres, I do not believe the crisis is

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  so great or the difficulties so many as they once were. The two matters that might persuade us to support such a measure are, first, whether we will make a sizeable cut in expenditure as a result of this measure. I do not believe that anyone has put the matter more eloquently or with more devastating logic than my right hon and learned Friend the Member for Hexham. He made it clear that, however one might deal with the figures and examine the books, there is no chance of our achieving more than the tiniest saving, and there is a danger that there will be an increase in expenditure. By that test, in common parlance, is the game worth the candle? The answer must be no.
  I would remind my right hon. Friend the Prime Minister of a fine and famous speech that she made about the arts — in which I am particularly interested, as hon. Members know. She talked about "candle-end economies". Before we were elected in 1979, she said:
  "We would never advocate candle-end economies."
  If this legislation is not the most high-falutin way of advocating candle-end economies, I do not know what is.
  There is another test, but it follows from the first. Are we delivering what the people expect? This is a classic case of exciting expectations that we cannot fulfil. People believe that we are doing something about the rates. In fact, we are fudging the central issue of rates. If my right hon. Friend and his colleagues had come to Parliament with a Bill that would transfer to central Government, and central control therefore, the cost of teachers' salaries and police pay, and had said to local authorities, "You deal with the rest," they would have come with a logical and coherent case that could have been debated on its merits. Some Conservative Members might not have liked it and some Opposition Members might have liked it because it is not a matter of ordinary party doctrine. The proposal would have been logical and coherent and there would have been a chance of doing something. This legislation is not doing anything about the rates. It is fudging the main issue.
  The Government must not be deluded by the size of their parliamentary majority. I came to the House 14 years ago and within a couple of years found myself in Committee considering the Local Government Bill 1972, which resulted in the changes of 1974. In retrospect, I wish that I had rebelled on one or two occasions during the Bill's passage. However, I did not, partly because I had been put on to the second Bench as a parliamentary private secretary—doubtless the highest form of parliamentary life to which I shall ever aspire. I was summarily acquiescent about that legislation because the pleas not to rock the boat and to support the side seemed to carry with them a degree of moral persuasion, especially when the manifesto was quoted. However, a manifesto is a broad, general statement of intent, to which no single hon. Member is bound in every particular. I do not consider myself bound to support this wretched piece of legislation simply because there was a reference to it, although not a detailed one, in the manifesto, and I wish that I had had the courage to rebel and reject one or two of the previous Bill's clauses.
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  The Government have a large parliamentary majority and, as in 1970, there are many new hon. Members, many of whom, for the best possible reasons, are reluctant to
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  vote against their own side and rock the boat. I hear a voice muttering "Ambition", but ambition should be made of sterner stuff. They should have the courage of their Tory convictions, of which they tell me in the Smoking Room and Tea Room, and demonstrate them on the Floor of the House.
  Unless the measure is significantly amended during the next two days, there will be no point in voting for it on Third Reading. Our hope is in the Lords.
  Mr. Beaumont-Dark: The Lord?
  Mr. Cormack: Our hope is always in the Lord.
  The Lords have recently shown themselves to be enlightened, progressive and robust. It would be wonderful if the most recent member of the hereditary peerage were able to make a maiden speech about the Bill in the Lords. He would doubtless be able to develop the views that prompted his son to vote against the Government on Second Reading.
  Any true Tory who considers himself to be a member of the party of Disraeli, which in an extraordinary way formed Joseph Chamberlain in the Midlands, is against centralisation and excessive Government interference and is in favour of the freedom of the individual and a balanced relationship between central and local government, must pause and ask himself whether this mass of technical nonsense—which will, at most, save only a tiny sum—is worth supporting or whether it should be consigned to the dustbin, where so much of the legislation which has occupied our time in recent years should have gone.
  The Under-Secretary of State for the Environment (Sir George Young): We have had a wide-ranging debate on new clause 6. I shall deal in passing with some of the broader points made during the debate, but it will be convenient to deal with them more comprehensively when we consider the new clauses and amendments.
  There is a fundamental conflict between the arguments of Conservative Members and those of the Opposition against the Bill. Some of my right hon. and hon. Friends do not think that the Bill will work. My hon. Friend the Member for Staffordshire, South (Mr. Cormack) said that the Bill would increase public expenditure. My hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) said that it would not save public expenditure. My right hon. and learned Friend the Member for Hexham (Mr. Rippon) also said that it would not save public expenditure. My right hon. Friend the Member for Daventry (Mr. Prentice) thought that savings would be marginal.
  The Opposition's case is that the Bill will work and that there will be a substantial saving in public expenditure as a result of which local authorities will have to cut their services. That has been the thrust of their arguments in Committee and of the speech made by the hon. Member for Copeland (Dr. Cunningham), who said that the Bill would enable the Secretary of State to reduce local government expenditure below the level which elected councillors would fix. There is a fundamental conflict between those two arguments against the Bill — both cannot be true. There is a conflict between my right hon. and hon. Friends and the Opposition about the impact of the Bill.
  The Opposition enjoy this new clause because they have introduced it several times. They have asked why it is necessary to have three separate expenditure figures. I

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  agree that life would be simpler if there were only one target or expenditure level, but for reasons which I shall explain that would not be fair. I shall outline briefly why it is necessary to have three different figures.
  First, grant-related expenditure is a yardstick for use in the distribution by the Government of the block grant. It is an assessment of the cost to an authority of providing in its area services to a typical standard in the light of its statutory functions and its objectively recorded circumsances. It is those attributes of GRE which, we have argued, make it suitable as a yardstick for high levels of spending in relation to local needs.
  We have always accepted that GREs are not expenditure targets. When it became necessary to introduce individual targets, it was on a different basis and we confirmed the new arrangements in a statute. As the Local Government Finance Act 1982 makes clear, the purpose of the targets is to achieve the reduction in the level of local authority expenditure which the Secretary of State thinks necessary, having regard to general economic conditions. As that is their purpose, it follows that targets must be based more on an authority's historic spending levels. In that sense they are different from the GREs, which are based on a notional assessment and are not affected by the authority's historic level of spending.
  The targets have been set by a formula, which has been changed over the years and has included a variety of constraints on authorities' year-on-year increases. Bigger increases have been implied by targets for low-spending authorities than for authorities which have exceeded the GREs and the targets in previous years. The targets are, in the Secretary of State's judgment, the amounts at which he could reasonably ask each authority to aim in order to meet the Government's overall expenditure plans.
  Authorities have the ability to overspend the target figure at the cost of grant holdback and, therefore, higher rate bills. The targets and GREs are two different figures. GREs are determined for the purpose of a fair distribution of block grant, and targets in an attempt to ensure that overall spending plans are achieved.
  The House should note that to substitute the higher of the two—the target or GRE—would have significant effects on the distribution of the block grant. That is the impact of new clause 6. If we were to accept it, it would significantly reduce the rates of authorities with targets most above their GREs by increasing their grant at the expense of other authorities. My hon. Friends who spoke in favour of the new clause should know that it would give more money to extravagant authorities and, as a consequence, less money to those which have been spendng more responsibly.
  The GREs and the targets therefore perform quite different functions, as do the targets and the expenditure levels set under the Bill for rate limitation purposes.
  Mr. Straw: The Minister may have misunderstood the purpose of the new clause. It is to ascertain the relationship not just between target and GRE but between target, GRE and the maximum expenditure levels that can be prescribed under both the selective and the general scheme. Will the Minister come on to that part of his brief if he has been briefed on that? In any event, will he say whether it is possible for the expenditure level on which the authority will be rate-capped to be less than its GRE or its target?
  Sir George Young: The hon. Member for Copeland asked those questions earlier and I was about to deal with them. I note, however, that the hon. Member for Blackburn (Mr. Straw) has not disagreed with what I have said so far.
  The expenditure levels set under the Bill, unlike the targets, feed straight into the rate limit so that effectively authorities cannot exceed them. Whereas the targets can at present be exceeded, albeit at the cost of higher rates, the expenditure levels set under the Bill cannot. Precisely because they cannot be exceeded, the Bill provides for a redetermination procedure allowing the Secretary of State to take account of particular local circumstances of individual authorities. In setting targets, however, he cannot do that but must calculate them on principles applicable to all authorities. Thus, a local authority's target must be based on a general principle and can be exceeded, but the expenditure level under the Bill may take account of particular circumstances and cannot be exceeded. Those important differences may well result in different targets and expenditure levels being set with good reason for a particular authority.
  The first specific question put to me was whether the total expenditure levels would be given in the Government public expenditure plan. The totals will be included in the total of relevant expenditure for the rate support grant settlements, which in turn will be included in the public expenditure White Papers.
  Secondly, I was asked whether the total of the expenditure levels set was likely to be higher than the total of the GREs or of the targets. I think that that was the point to which the hon. Member for Blackburn referred. It depends on how expenditure levels are eventually set under the Bill, after redetermination if necessary. If they are higher than the GREs or the targets — and there could be good reasons for that — the total published expenditure levels in the White Paper would also be higher. I remind the House, however, that the actual expenditure of the highest spenders will be reduced as a result of the Bill.
  Mr. Straw: Will the Minister give way?
  Sir George Young: Perhaps I may just deal with the last question that was put to me.
  I was asked what was the logic of penalising, expenditure above targets but below the expenditure levels set under the Bill. The answer is that it would be most unfair not to do so. The question presupposes the continuation of targets after the introduction of the general rate limitation scheme, but the scheme applies only to authorities whose expenditure is above target.
  If grant holdback is not applied to expenditure above target, albeit below the expenditure level set, the authority would be treated exceptionally favourably and would not suffer the penalties suffered by those not selected. As both the targets and the holdback must be calculated in accordance with general principles, it would be unreasonable to treat expenditure levels for rate-capping purposes under the Bill in a different way as the expenditure targets must be fixed on general principles and it would be wrong to exempt from holdback those authorities which were selected under the scheme.
  I have tried to deal in the time at my disposal with the rather technical questions that have been put to me. Given the consequences of the new clause for authorities which have budgeted responsibly, I ask the House to reject it.
  5.45 pm
  Mr. Straw: First, we do not accept that the new clause will have the consequences claimed by the Minister. It certainly does not lie in the Government's mouth to complain about the way in which the rate support grant system, GRE and target may capriciously affect individual authorities which have in no way overspent, because that is the fault of the present system. We do not intend to be damned by a system which we wholly reject and wish to see entirely reformed, as do many Conservative Members who are true to their manifesto.
  I hope that Conservative Members will weigh with care what the Minister has said, and also what he has not said. He has admitted today for the first time that it is possible for the Government, under part II of the Bill—the new clause affects the general power as much as the specific power—to set the maximum expenditure level for every authority in which the total expenditure level in aggregate is less than the target expenditure which the Government say the authority should spend and less than the GRE, which is the Government's assessment of what the authority actually needs.
  Mr. Waldegrave: He did not say that.
  Mr. Straw: With great respect, he did. He said that if the expenditure levels were higher than the GRE and target certain things would follow, but he refused to give a categorical guarantee that in every case the expenditure levels would in fact be higher than target or the GRE. If the hon. Gentleman wishes to intervene, I shall be delighted to give way.
  Sir George Young: I can only repeat what I said. They could indeed be higher. I never said anything about them being lower. The circumstances would have to be rather unusual for them to be lower.
  Mr. Straw: As we all understand the English language, I assume that if they could be higher they could also be lower. If the Minister is saying that there are no circumstances in which the expenditure levels would be lower than target or the GRE, I should be delighted to allow him the opportunity to correct the record. Until he does so, hon. Members on both sides must assume, as he has just admitted, that this could occur — albeit in unusual circumstances. We have heard the word "unusual" many times in the past four years. We were told only two years ago not just that it was unusual but that it would never happen that individual authorities' expenditure levels and rate levels would be cut—and yet here we are. My hon. Friend the Member for Copeland (Dr. Cunningham) reminds me that we were also told that the counties would not be penalised, but all the Tory counties as well as the Labour counties are now screaming.
  The right hon. and learned Member for Hexham (Mr. Rippon) discussed whether setting expenditure levels—in other words, rate-capping — for a handful of authorities would allow the Government to achieve the savings that they want. There is no divergence of view between us on that. We are certain that if 20 or so authorities are rate-capped their services will suffer very badly—no doubt Conservative Members in the main would agree with that — depending on the extent to which they were rate-capped. Conservative Members are saying that, despite all that suffering by the authorities concerned, the Government will not obtain the saving that
  174
  they wish. That is the key point. There is a confluence, not a divergence, of opinion between the two sides on that. We agree that the Bill will do great damage to at least 20 authorities but that if only 20 authorities are rate-capped the savings sought by the Government cannot be achieved.
  Mr. Waldegrave: Is the hon. Gentleman saying that if 20 authorities are capped and their expenditure is reduced total public expenditure will not fall?
  Mr. Straw: The key question in terms of the PSBR is what happens to the Government's grant. We can all do the arithmetic, and the Treasury has benefited from penalty and from target. It has made money out of these items. The Secretary of State admitted that if rate-capping operated there would be more rate support grant and therefore a lower rate increase than would otherwise be the case for the authorities that were rate-capped.
  Mr. Waldegrave: The hon. Gentleman makes my point for me. We would be delighted if the Treasury had to pay out more grant than it ends up paying each year, for that would mean that the total of public expenditure was met because there was no holdback.
  Mr. Straw: I am delighted to accept the hon. Gentleman's flattery, but I was making a different point. The central point that we are making, and which Conservative Members are making, is that only 20 authorities are rate-capped and that, accepting that they are not proposing to abolish all services in Islington, Manchester and Sheffield, the most by which even this Government could contemplate effective cuts in any one year would be about 5 per cent. There is no way in which the Government, by making cuts of that size for the hit-list authorities, could achieve the £1·5 billion reductions which the public expenditure White Paper postulates. If my arithmetic is wrong, I shall be happy to hear what the Under-Secretary has to say. He knows this to be the case. The Government cannot possibly achieve their savings, and the Secretary of State has accepted that.
  To reply to the right hon. and learned Member for Hexham, I asked the Secretary of State—and he was kind enough to acknowledge that I asked him on notice, so he had time to consider it—whether, in determining the operation of selective rate-capping, he would start from having been given a target for savings by the Treasury or from his own assessment of the individual authorities' level of spending. He said:
  "There is no question of criteria being chosen which would produce the right list of authorities, whether in political terms or in relation to a pre-determined requirement for savings. Those considerations would be irrelevant." — [Official Report, Standing Committee G, 21 February 1984; c. 591.]
  The Secretary of State himself is saying that the bottom line that the Treasury is demanding is irrelevant to how individual authorities are to be rate-capped. If that is the case—and I take the Secretary of State's words as he said them—again I say that there is no way in the world in which rate-capping 20 authorities will lead to the savings which the Secretary of State demands. It will be interesting, when we come to discuss amendment No. 25, which would limit rate-capping to 20 authorities, to see whether the Secretary of State accepts that amendment or whether, as in Committee, he is implacably opposed to any limit on the number of authorities to be rate-capped under the selective scheme.
  We have heard some eloquent and courageous speeches from Conservative Members who wish to be true to the

  175
  principles of Conservatism and to the deeper and older principles of Toryism. We have heard references to Disraeli and to the former Prime Minister, the late Earl Macmillan of Stockton. One hon. Gentleman quoted Disraeli's comments against the centralisation of power. That has been a continuum within the Conservative party. It was the present Leader of the House of Commons who, after the 1979 election, told a newspaper:
  "Once you centralise power, a bad decision becomes disastrous."
  There is no better way of illustrating the wisdom of the opposition of the present Leader of the House to the centralisation of power than by considering the interrelationship between the GRE, target and expenditure levels. Given the failure of the Under-Secretary to promise that expenditure levels will in every circumstance be above the GRE and target, it is conceivable that what we have had this year and last year, whereby good Conservative authorities, which by no measure have been overspending, have found that they have been penalised even though on target, even though their level of spending is below what the Government say they need under the GRE, will be compounded by circumstances in which the expenditure levels, the rate-capping levels, are themselves set below either or both the GRE — what the Government say those authorities need — and target — what the Government say they should spend. What a mess that would be.
  Mr. W. Benyon: It would be impossible to get the savings which have been postulated in statements by the Government if the expenditure level were not below those two levels.
  Mr. Straw: I am very glad that the hon. Gentleman has made that point. That is indeed the case, so even under a wider selective scheme many authorities which are by no stretch of the imagination overspending on the Government's own criteria will be penalised in order to achieve those savings.
  We have had some references to the Under-Secretary's excellent little work, "The Binding of Leviathan", in which he complained about Ministers brandishing the theory of the detailed mandate in the face of reasoned argument. The Under-Secretary is a prolific author and, of course, he also edited the pamphlet "Changing Gear", which began with a quotation from an address by the then right hon. Harold Macmillan to the Primrose League in 1981—on the anniversary of Disraeli's death. The right hon. Gentleman said:
  "People can be governed in only two ways, either by tyranny, autocracy (whether it be of a King or of a Communist regime), or they can be governed by persuasion, by appeal to their good sense, their nature, their tradition, their inherent patriotism".
  In an earlier speech on local government, which bears re-reading by every true Tory, the same speaker, addressing a Conservative party rally on 7 March 1961, said:
  "As Tories … we believe in vigorous and effective local institutions….
  For the Government, it means transferring and diffusing authority from the centre outwards."
  That is the true Tory principle. What the Bill does is to bring power from the periphery into the centre, to centralise power. Not only is it a bad principle, but it is bad Government, and I urge every right hon. and hon. Member to vote in favour of new clause 6.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 193, Noes 301.

  Division No. 205]

  [5.55 pm

  AYES

  Adams, Allen (Paisley N)

  George, Bruce

  Alton, David

  Gilmour, Rt Hon Sir Ian

  Anderson, Donald

  Godman, Dr Norman

  Archer, Rt Hon Peter

  Hardy, Peter

  Ashley, Rt Hon Jack

  Harman, Ms Harriet

  Atkinson, N. (Tottenham)

  Harrison, Rt Hon Walter

  Bagier, Gordon A. T.

  Hart, Rt Hon Dame Judith

  Banks, Tony (Newham NW)

  Haynes, Frank

  Barnett, Guy

  Healey, Rt Hon Denis

  Beaumont-Dark, Anthony

  Hogg, N. (C'nauld & Kilsyth)

  Beckett, Mrs Margaret

  Holland, Stuart (Vauxhall)

  Beith, A. J.

  Home Robertson, John

  Bell, Stuart

  Howells, Geraint

  Benn, Tony

  Hoyle, Douglas

  Bennett, A. (Dent'n & Red'sh)

  Hughes, Robert (Aberdeen N)

  Benyon, William

  Hughes, Roy (Newport East)

  Bidwell, Sydney

  Hughes, Sean (Knowsley S)

  Blair, Anthony

  Hughes, Simon (Southwark)

  Boothroyd, Miss Betty

  Jenkins, Rt Hon Roy (Hillh'd)

  Bray, Dr Jeremy

  John, Brynmor

  Brown, Gordon (D'f'mline E)

  Johnston, Russell

  Brown, Hugh D. (Provan)

  Jones, Barry (Alyn & Deeside)

  Brown, N. (N'c'tle-u-Tyne E)

  Kaufman, Rt Hon Gerald

  Brown, Ron (E'burgh, Leith)

  Kennedy, Charles

  Bruce, Malcolm

  Kirkwood, Archibald

  Buchan, Norman

  Lambie, David

  Callaghan, Jim (Heyw'd & M)

  Lamond, James

  Campbell-Savours, Dale

  Lewis, Ron (Carlisle)

  Canavan, Dennis

  Lewis, Terence (Worsley)

  Carlile, Alexander (Montg'y)

  Litherland, Robert

  Carter-Jones, Lewis

  Lloyd, Tony (Stretford)

  Cartwright, John

  Loyden, Edward

  Clark, Dr David (S Shields)

  McCartney, Hugh

  Clarke, Thomas

  McDonald, Dr Oonagh

  Clay, Robert

  McGuire, Michael

  Cocks, Rt Hon M. (Bristol S.)

  McKay, Allen (Penistone)

  Cohen, Harry

  McKelvey, William

  Coleman, Donald

  Mackenzie, Rt Hon Gregor

  Concannon, Rt Hon J. D.

  Maclennan, Robert

  Conlan, Bernard

  McNamara, Kevin

  Cook, Frank (Stockton North)

  McTaggart, Robert

  Cook, Robin F. (Livingston)

  McWilliam, John

  Corbett, Robin

  Madden, Max

  Corbyn, Jeremy

  Marek, Dr John

  Cormack, Patrick

  Marshall, David (Shettleston)

  Cowans, Harry

  Martin, Michael

  Crowther, Stan

  Mason, Rt Hon Roy

  Cunningham, Dr John

  Maxton, John

  Dalyell, Tam

  Maynard, Miss Joan

  Davies, Rt Hon Denzil (L'lli)

  Meadowcroft, Michael

  Davies, Ronald (Caerphilly)

  Meyer, Sir Anthony

  Davis, Terry (B'ham, H'ge H'l)

  Michie, William

  Deakins, Eric

  Mikardo, Ian

  Dewar, Donald

  Millan, Rt Hon Bruce

  Dixon, Donald

  Miller, Dr M. S. (E Kilbride)

  Dubs, Alfred

  Mitchell, Austin (G't Grimsby)

  Dunwoody, Hon Mrs G.

  Morris, Rt Hon J. (Aberavon)

  Eadie, Alex

  Morrison, Hon C. (Devizes)

  Eastham, Ken

  Nellist, David

  Edwards, Bob (Wh'mpt'n SE)

  O'Neill, Martin

  Ellis, Raymond

  Orme, Rt Hon Stanley

  Evans, John (St. Helens N)

  Park, George

  Ewing, Harry

  Parry, Robert

  Fatchett, Derek

  Patchett, Terry

  Field, Frank (Birkenhead)

  Pavitt, Laurie

  Fields, T. (L'pool Broad Gn)

  Pendry, Tom

  Fisher, Mark

  Penhaligon, David

  Flannery, Martin

  Pike, Peter

  Foot, Rt Hon Michael

  Powell, Raymond (Ogmore)

  Forrester, John

  Prentice, Rt Hon Reg

  Foster, Derek

  Prescott, John

  Foulkes, George

  Radice, Giles

  Fraser, J. (Norwood)

  Randall, Stuart

  Freeson, Rt Hon Reginald

  Redmond, M.

  Freud, Clement

  Rees, Rt Hon M. (Leeds S)

  Garrett, W. E.

  Richardson, Ms Jo

  177

  Rippon, Rt Hon Geoffrey

  Stott, Roger

  Roberts, Allan (Bootle)

  Strang, Gavin

  Roberts, Ernest (Hackney N)

  Straw, Jack

  Robertson, George

  Thomas, Dafydd (Merioneth)

  Robinson, G. (Coventry NW)

  Thomas, Dr R. (Carmarthen)

  Rogers, Allan

  Thompson, J. (Wansbeck)

  Rooker, J. W.

  Thorne, Stan (Preston)

  Ross, Ernest (Dundee W)

  Tinn, James

  Rowlands, Ted

  Torney, Tom

  Ryman, John

  Wardell, Gareth (Gower)

  Sedgemore, Brian

  Wareing, Robert

  Sheerman, Barry

  Weetch, Ken

  Sheldon, Rt Hon R.

  Welsh, Michael

  Shore, Rt Hon Peter

  White, James

  Short, Ms Clare (Ladywood)

  Williams, Rt Hon A.

  Short, Mrs H.(W'hampt'n NE)

  Winnick, David

  Silkin, Rt Hon J.

  Woodall, Alec

  Skinner, Dennis

  Young, David (Bolton SE)

  Smith, C.(Isl'ton S & F'bury)

  Smith, Rt Hon J. (M'kl'ds E)

  Tellers for the Ayes:

  Soley, Clive

  Mr. James Hamilton and Mr. Lawrence Cunliffe.

  Spearing, Nigel

  Steel, Rt Hon David

  NOES

  Adley, Robert

  Corrie, John

  Aitken, Jonathan

  Couchman, James

  Alexander, Richard

  Cranborne, Viscount

  Alison, Rt Hon Michael

  Currie, Mrs Edwina

  Amery, Rt Hon Julian

  Dickens, Geoffrey

  Ancram, Michael

  Dicks, Terry

  Arnold, Tom

  Dorrell, Stephen

  Ashby, David

  Douglas-Hamilton, Lord J.

  Aspinwall, Jack

  Dover, Den

  Atkins, Robert (South Ribble)

  du Cann, Rt Hon Edward

  Atkinson, David (B'm'th E)

  Dunn, Robert

  Baker, Rt Hon K. (Mole Vall'y}

  i Durant, Tony

  Baker, Nicholas (N Dorset)

  Eggar, Tim

  Baldry, Anthony

  Emery, Sir Peter

  Banks, Robert (Harrogate)

  Evennett, David

  Bellingham, Henry

  Eyre, Sir Reginald

  Bendall, Vivian

  Fallon, Michael

  Bennett, Sir Frederic (T'bay)

  Farr, John

  Best, Keith

  Favell, Anthony

  Bevan, David Gilroy

  Fenner, Mrs Peggy

  Biffen, Rt Hon John

  Finsberg, Sir Geoffrey

  Biggs-Davison, Sir John

  Fletcher, Alexander

  Blaker, Rt Hon Sir Peter

  Fookes, Miss Janet

  Bonsor, Sir Nicholas

  Forman, Nigel

  Boscawen, Hon Robert

  Forsyth, Michael (Stirling)

  Bottomley, Peter

  Fowler, Rt Hon Norman

  Bowden, Gerald (Dulwich)

  Fox, Marcus

  Boyson, Dr Rhodes

  Fraser, Peter (Angus East)

  Braine, Sir Bernard

  Freeman, Roger

  Brandon-Bravo, Martin

  Fry, Peter

  Bright, Graham

  Gale, Roger

  Brittan, Rt Hon Leon

  Galley, Roy

  Brown, M. (Brigg & Cl'thpes)

  Gardiner, George (Reigate)

  Browne, John

  Gardner, Sir Edward (Fylde)

  Bruinvels, Peter

  Glyn, Dr Alan

  Bryan, Sir Paul

  Goodhart, Sir Philip

  Buck, Sir Antony

  Goodlad, Alastair

  Budgen, Nick

  Gorst, John

  Burt, Alistair

  Gow, Ian

  Butcher, John

  Gower, Sir Raymond

  Butterfill, John

  Grant, Sir Anthony

  Carlisle, John (N Luton)

  Greenway, Harry

  Cariisle, Kenneth (Lincoln)

  Gregory, Conal

  Carttiss, Michael

  Griffiths, E. (B'y St Edm'ds)

  Chalker, Mrs Lynda

  Griffiths, Peter (Portsm'th N)

  Chapman, Sydney

  Grist, Ian

  Chope, Christopher

  Ground, Patrick

  Churchill, W. S.

  Grylls, Michael

  Clark, Dr Michael (Rochford)

  Gummer, John Selwyn

  Clark, Sir W. (Croydon S)

  Hamilton, Neil (Tatton)

  Clarke, Rt Hon K. (Rushcliffe)

  Hampson, Dr Keith

  Clegg, Sir Walter

  Hanley, Jeremy

  Cockeram, Eric

  Hannam, John

  Colvin, Michael

  Harvey, Robert

  Cope, John

  Haselhurst, Alan

  178

  Havers, Rt Hon Sir Michael

  Moore, John

  Hawkins, Sir Paul (SW N'folk)

  Morris, M. (N'hampton, S)

  Hawksley, Warren

  Morrison, Hon P. (Chester)

  Hayes, J.

  Moynihan, Hon C.

  Hayhoe, Barney

  Mudd, David

  Hayward, Robert

  Murphy, Christopher

  Heathcoat-Amory, David

  Neale, Gerrard

  Heddle, John

  Nelson, Anthony

  Henderson, Barry

  Neubert, Michael

  Higgins, Rt Hon Terence L

  Newton, Tony

  Hill, James

  Nicholls, Patrick

  Hind, Kenneth

  Norris, Steven

  Hirst, Michael

  Onslow, Cranley

  Hogg, Hon Douglas (Gr'th'm)

  Oppenheim, Philip

  Holland, Sir Philip (Gedling)

  Oppenheim, Rt Hon Mrs S.

  Holt, Richard

  Ottaway, Richard

  Hooson, Tom

  Page, John (Harrow W)

  Hordern, Peter

  Page, Richard (Herts SW)

  Howard, Michael

  Parris, Matthew

  Howarth, Gerald (Cannock)

  Patten, John (Oxford)

  Howell, Rt Hon D. (G'ldford)

  Pattie, Geoffrey

  Howell, Ralph (N Norfolk)

  Pawsey, James

  Hubbard-Miles, Peter

  Peacock, Mrs Elizabeth

  Hunt, David (Wirral)

  Pink, R. Bonner

  Hunt, John (Ravensbourne)

  Pollock, Alexander

  Hunter, Andrew

  Porter, Barry

  Hurd, Rt Hon Douglas

  Powell, William (Corby)

  Irving, Charles

  Powley, John

  Jenkin, Rt Hon Patrick

  Price, Sir David

  Jessel, Toby

  Proctor, K. Harvey

  Johnson-Smith, Sir Geoffrey

  Rathbone, Tim

  Jones, Gwilym (Cardiff N)

  Rees, Rt Hon Peter (Dover)

  Jones, Robert (W Herts)

  Renton, Tim

  Kershaw, Sir Anthony

  Rhodes James, Robert

  King, Roger (B'ham N'field)

  Ridsdale, Sir Julian

  King, Rt Hon Tom

  Roberts, Wyn (Conwy)

  Knight, Gregory (Derby N)

  Robinson, Mark (N'port W)

  Knight, Mrs Jill (Edgbaston)

  Roe, Mrs Marion

  Knowles, Michael

  Rossi, Sir Hugh

  Lamont, Norman

  Rost, Peter

  Lang, Ian

  Rowe, Andrew

  Latham, Michael

  Rumbold, Mrs Angela

  Lawler, Geoffrey

  Ryder, Richard

  Lawrence, Ivan

  Sackville, Hon Thomas

  Lawson, Rt Hon Nigel

  Sainsbury, Hon Timothy

  Leigh, Edward (Gainsbor'gh)

  St. John-Stevas, Rt Hon N.

  Lennox-Boyd, Hon Mark

  Sayeed, Jonathan

  Lester, Jim

  Shaw, Sir Michael (Scarb')

  Lilley, Peter

  Shelton, William (Streatham)

  Lloyd, Ian (Havant)

  Shepherd, Colin (Hereford)

  Lloyd, Peter, (Fareham)

  Shepherd, Richard (Aldridge)

  Lord, Michael

  Silvester, Fred

  Lyell, Nicholas

  Sims, Roger

  McCrindle, Robert

  Skeet, T. H. H.

  McCurley, Mrs Anna

  Smith, Sir Dudley (Warwick)

  Macfarlane, Neil

  Smith, Tim (Beaconsfield)

  MacKay, Andrew (Berkshire)

  Soames, Hon Nicholas

  MacKay, John (Argyll & Bute)

  Spencer, Derek

  Maclean, David John.

  Spicer, Michael (S Worcs)

  McQuarrie, Albert

  Stanbrook, Ivor

  Major, John

  Stanley, John

  Malins, Humfrey

  Steen, Anthony

  Malone, Gerald

  Stern, Michael

  Maples, John

  Stevens, Lewis (Nuneaton)

  Marland, Paul

  Stevens, Martin (Fulham)

  Marlow, Antony

  Stewart, Allan (Eastwood)

  Maude, Hon Francis

  Stewart, Andrew (Sherwood)

  Mawhinney, Dr Brian

  Stewart, Ian (N Hertf'dshire)

  Maxwell-Hyslop, Robin

  Stokes, John

  Mayhew, Sir Patrick

  Stradling Thomas, J.

  Mellor, David

  Sumberg, David

  Merchant, Piers

  Tapsell, Peter

  Miller, Hal (B'grove)

  Taylor, Teddy (S'end E)

  Mills, lain (Meriden)

  Temple-Morris, Peter

  Mills, Sir Peter (West Devon)

  Terlezki, Stefan

  Miscampbell, Norman

  Thomas, Rt Hon Peter

  Mitchell, David (NW Hants)

  Thompson, Donald (Calder V)

  Moate, Roger

  Thompson, Patrick (N'ich N)

  Monro, Sir Hector

  Thornton, Malcolm

  Montgomery, Fergus

  Townend, John (Bridlington)

  179

  Townsend, Cyril D. (B'heath)

  Wells, Bowen (Hertford)

  Tracey, Richard

  Wells, John (Maidstone)

  Trotter, Neville

  Wheeler, John

  van Straubenzee, Sir W.

  Whitney, Raymond

  Vaughan, Sir Gerard

  Wilkinson, John

  Waddington, David

  Winterton, Mrs Ann

  Wakeham, Rt Hon John

  Winterton, Nicholas

  Waldegrave, Hon William

  Wolfson, Mark

  Walker, Bill (T'side N)

  Wood, Timothy

  Walker, Rt Hon P. (W'cester)

  Woodcock, Michael

  Waller, Gary

  Yeo, Tim

  Walters, Dennis

  Young, Sir George (Acton)

  Ward, John

  Younger, Rt Hon George

  Wardle, C. (Bexhill)

  Warren, Kenneth

  Tellers for the Noes:

  Watson, John

  Mr. Carol Mather and Mr. Tristan Garel-Jones.

  Watts, John

  Question accordingly negatived.

New Clause 10

  REPRESENTATIONS TO THE SECRETARY OF STATE
  `(1) A designated authority may at any time make representations to the Secretary of State in connection with expenditure levels which may be or may have been determined or any maximum rate or precept which may be or may have been prescribed by him for that authority under sections 3 or 4 of the Act and the Secretary of State shall reply in writing to such representations.
  (2) Representations made by a designated authority under this section may relate to services provided and charges levied by them and any reply to such representations by the Secretary of State shall include a statement of any services of the designated authority which may in his opinion be curtailed or any charges which may be increased.'.—[Mr. Straw.]
  Brought up, and read the First time.
  Motion made, and Question proposed, That the clause be read a Second time.—[Mr. Straw.]
  Mr. Allan Roberts: The new clause relates to consultation and the right of local authorities to make representations to the Secretary of State about expenditure and services that have been rate-capped during the year in which a local authority has been rate-capped. It requires the Secretary of State to listen to arguments from the local authority about the consequences of rate-capping and how the capping exercise is affecting the services and the people who live in the area.
  The new clause would improve the Bill by enabling the Government to demonstrate that their mind was not closed to representations from local authorities. In Committee, every amendment seeking more consultation or the right to make representations was rejected by the Government. In the light of the feeling in the House—the only speech that supported the Bill on the last new clause came from the Government Front Bench — and the weight of opinion in the Conservative party and in the country, in both Conservative-controlled and Labour-controlled areas, I hope that the Government will accept the new clause.
  The Government are getting themselves into difficulties with this legislation. I described the Bill earlier as a bunker. They are in the bunker of this rate-capping Bill — or, as it has been described by Conservative Members, this knee-capping Bill—and they are under siege from all quarters, including their own supporters and Conservative-controlled local authority associations. As they refuse to accept the reasonable amendments asking for consultation and discussion in a democratic manner, they get deeper and deeper into the bunker.
  180
  If the Government do not accept this new clause, they will be taking on power without responsibility. In this legislation, particularly in the general powers, they are virtually usurping local government democracy and the democratic functions of local authorities to determine their own expenditure, rates and services. If they take those draconian powers, they should at least have the safeguard of allowing local authorities, which know their own areas and the views of the people who live there about the cuts in services, to make representations. Unless the Government believe in power without responsibility, they will accept the new clause.
  With the rate-capping Bill now going through Parliament, the Government and the Conservative party are getting into a unique position. They are being blamed for the cuts in services and the rate increases that local authorities are having to impose. In the past, when the Government have imposed cuts or restrictions or reductions in rate support grant on local authorities, they have managed somehow to get many electors to blame their own local authorities for those increases and cuts. Now it is becoming clear who is responsible, and the Government have brought that on themselves.
  6.15 pm
  The hon. Member for Crosby (Mr. Thornton) appeared on a television programme with me and argued in favour of Liverpool city council making people redundant, cutting services and increasing rates. It was delightful to hear a Conservative Member arguing in favour of rate increases instead of allowing the rate increases that his Government are imposing on local authorities such as Liverpool to be passed on through the local authority in the hope that it will be blamed for them.
  Do the Government intend to tell local authorities the exact amount of services that should be provided in each area of concern? Do they intend to detail the cuts and closures that should be made, and the posts that should be made redundant? The rate-capping exercises require the local authority to do that, and the Government should be required to consult on the matter and say, as the new clause requests, exactly where and how the rate-capped local authorities should make the cuts. The Government will be imposing the cuts, not the local authorities, although those local authorities will be required to carry them out. Will the Government say to local authorities, "We think your priorities for this year should be cuts in social services instead of in education. Do not close the learner swimming pools that the Sefton metropolitan district council closed because of cuts in rate support grant"? Will the Government go into detail in that way? If they rate-cap a local authority, on assessments that they have carried out on the services that should be applicable to that area to meet the area's needs in social services, housing, education, and so on, they should surely spell out the details of what they require. If they are just and fair, the Government will have done detailed analyses before they impose expenditure limits on a local authority through the rate-capping procedure.
  The Government claim that by rate-capping a few limited overspenders—they claim that they are Labour overspenders — they will make significant savings in public expenditure. We and the Government Back Benchers do not believe that that is possible, as is borne out by what has happened up to now under other legislation introduced by the Government to control local

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  government expenditure. A local authority such as Sefton, parts of which I and the hon. Member for Crosby represent, and which is a paragon of underspending virtue, is to lose £1·9 million this year in rate support grant, although the leader of that council is a supporter of the Prime Minister and her Government and claims that rate-capping the profligate authorities will provide more rate support grant in future for Sefton. He does not understand the Government's public expenditure White Paper, or the fact that the Treasury is forcing the Department of the Environment to save £1·5 billion. He does not understand that this legislation will apply to the whole of local government.
  In the name of democracy, we ask that Labour-controlled and Conservative-controlled authorities alike, all of which I predict will be rate-capped in future under this Bill, may have the right to be heard and to go to the Secretary of State to bring home to him the consequences of his actions. In that way, he will know exactly what is happening, how the services are being destroyed or cut, and the harm that is being done by this draconian legislation.
  Mr. Waldegrave: The new clause seeks to provide additional procedures for consultation on aspects of the limitation process. It would seek to provide for a designated authority to make representations at any time to the Secretary of State. However, the authority would be free to do so anyway. If it made representations, it would be the normal practice, now and in the future, for the Secretary of State—or, if not the Secretary of State, one of his Ministers—to reply to those representations.
  The hon. Member for Bootle (Mr. Roberts) will agree —this was the structure of his speech—that the sting of the new clause is in its tail. In the latter part he and his hon. Friends are trying to tempt us on to the hook of taking control in detail of the decisions within local authorities. He rather weakened his argument about the dangers that we face by putting the case—it is true and I would not wish to disagree with it — that that is largely the situation now. It has been the case for some time, whenever there have been, under any Government, cuts in local authority spending.
  In the old days it was done more by a process of consensus. When Mr. Crosland and others asked for cuts, I have no doubt that the good Tory councils which cut back, because they thought it right in the national interest so to do, blamed Mr. Crosland roundly as they were doing that. I have noticed in my present job that there is a deal of that going on, and I have had representations from Labour authorities making the very point that the hon. Member for Bootle says the Bill will initiate.
  Mr. Allan Roberts: The point is not that Labour or Conservative local authorities blame the Government of the day for cuts that they impose on them. It is whether the electorate perceives that the Government, rather than the council, are responsible for those cuts and for the rent and rate increases. In the past, Conservative Governments hve been successful in having many of their actions blamed on Labour-controlled councils. The time has arrived when the electorate has seen through that.
  Mr. Waldegrave: I suppose that it is a question of the skill of the local authority in being able to transfer the
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  blame. I am accepting the hon. Gentleman's argument that there is no difference of principle in terms of what happens at present. We discussed the issue at length in Committee.
  Opposition Members have argued that rate limitation necessarily involves the most detailed scrutiny by the Secretary of State of all aspects of an authority's affairs. They have strenuously sought to make a reality of that prediction by trying to compel us to come out with detailed statements about how particular councils should run their affairs.
  The line that the Government have taken on this issue, in Committee and elsewhere, is the one to which I urge my hon. Friends to remain supportive. Rate limitation is about controlling the total of rate income and, indirectly, the total of net expenditure. It is not our business to interfere with local priorities or to dictate local policies in detail. That must remain for local decision-taking.
  I am happy to accept that it would be unrealistic and wrong to replace local decisions on the local resource allocation by resource allocation from Whitehall. The Bill is not about that but about giving more powers, on which the House has voted for many years, to make effective the capacity of the House to allocate resources to the state sector as a whole.
  As the House is, in terms of attendance, down almost to those who were so faithful to these discussions in Committee, I can mention my book, about which I was rightly teased in Committee. I accept that any hon. Member who writes a book should be teased. My hon. Friend the Member for Aldershot (Mr. Critchley) once said that it was unwise to be seen reading a book in the House and that to write one was the end of any hope of preferment. I am sure that the evidence of the Committee will go to confirm what he said.
  The point which I try to make time and again in the book — hon. Members seem to have missed that by teasing me about it—is that local authorities are part of the state. In so far as I wrote a book about the difficulties of controlling the expansion of the state, controlling that part of the leviathan which happens to fall, for historical reasons, to be controlled not by this House but by local authorities, is just as much part of the state as are those matters which are controlled directly from this House.
  Mr. Straw: Is that what the Minister had in mind in his book when, at page 149, he wrote:
  "Conservative governments must seek to bring back the role of the state within its proper limits and assist in every way the nurture of necessary communities in which alienated individuals can live."
  Mr. Waldegrave: Absolutely. I am tempted to go on at tedious length about this issue because the high spending local authorities which have knocked out the centres of cities by high local taxation are exactly the aspects that have done so much to destroy communities, not only with their planning policies and buildings, which people now hate to live in, but with their high taxation policies which drive employment away.
  It is important to remember that the Bill is not about involving us in the details of the local resource allocation but about giving some reality to overall decisions on what resources are to be taken by the state in the wider sense, including allocations to local authorities. The votes that have taken place for many years in the House about the levels of public expenditure have, in that respect, always been something of a sham, because that part of public

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  expenditure which falls to local authorities to control has always been to some extent a bluff. The control of that is what the Bill is about, not about the detailed allocation of resources or priorities within the services which fall to local authorities.
  We shall be asking for reasonable economies. It must be a matter for the local authority concerned to decide whether it wishes to make the necessary savings by greater efficiency or by bringing service spending to a more normal level because, by definition, in the selective scheme we are talking about authorities which are spending much more on services than are other authorities.
  Mr. Michael Meadowcroft: Is the Minister not contradicting himself? Earlier he said that it was not the object of the Bill to encourage detailed scrutiny by the Secretary of State of individual local authorities. Now he is saying that the selective scheme is designed to look at the overspending on services of local authorities. Which is it to be? Is it to be a general spending curtailment or a scrutiny of the services of individual authorities?
  Mr. Waldegrave: There has been no contradiction. The Secretary of State will select those authorities which, by broad indicators, are spending much more on services than are others so that the totals add up to much more than is spent elsewhere. But it is then up to local people to set the priorities within the limits that are set. In a sense, the fact that the new clause has been tabled — to try to involve us in local decision-taking—only reminds us that the key decisions on priorities will remain to be taken locally under the Bill as drafted.
  The expenditure reductions that we shall be seeking will themselves be reasonable. If they are not thought to be reasonable, the authority concerned will be able to make its case in as much detail as it wishes and, if he is convinced, the Secretary of State will be able to re-determine the expenditure level at a higher figure. While, therefore, I understand the political purpose of the new clause, I have little hesitation in urging the House to reject it.
  Question put and negatived.

New Clause 11

  RATE OF GROWTH IN LOCAL GOVERNMENT EXPENDITURE
  'This Act shall be inoperative in a financial year if, over the period of the previous five financial years, the rate of growth in the total of local authority spending has not exceeded the rate of inflation in local authority costs, or the rate of growth of total expenditure by Her Majesty's government, whichever is the greater.'.—[Mr. Straw.]
  Brought up, and read the First time.
  Mr. Straw: I beg to move, That the clause be read a Second time.
  In view of other debates which must take place before the guillotine falls at 8 o'clock, I shall be brief. The rhetoric of the Government and their supporters suggests that a large number of Labour authorities have been wholly, to use the hurrah word, "profligate" in their expenditure, and the Under-Secretary often adds the adjective "irresponsible".
  6.30 pm
  The London borough of Lewisham has been the subject of vulgar abuse from Conservative Members representing Lewisham constituencies, and from others. I am sorry that the hon. Member for Lewisham, West (Mr. Maples) is not
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  here, because I gave him notice that I intended to refer to him. I gave similar notice to the hon. Member for Derbyshire, South (Mrs. Currie).
  In the debate on 14 December 1983 the hon. Gentleman asked the Secretary of State whether he was aware that his authority—
  "One of the bad 16" — [Official Report, 14 December 1983; Vol. 50, c. 1015.]
  not only employed a borough artist but spent £130,000 a year on sexism awareness training. On 21 December 1983 the hon. Member for Derbyshire, South asked the Secretary of State to:
  "study the accounts of the London borough of Lewisham, which invested £100,000 of ratepayers' money in a commercial pantomime and then censored the text".—[Official Report, 21 December 1983; Vol. 51, c. 422.]
  In answer to those questions the Secretary of State described Lewisham as a loony Left council and as a high-spending authority such as those which had
  "been widely condemned by many, even by those who call themselves Labour supporters." — [Official Report, 14 December 1983; Vol. 50, c. 1015.]
  Mr. Chris Smith: On 1 March, in Standing Committee, the hon. Member for Lewisham, West (Mr. Maples) regaled us with tales of supposed overspending by the Inner London Education Authority on what he called a record-player. I checked on the matter and found that his facts were completely incorrect. His remarks were a gross slur on the authority.
  Mr. Straw: I believe that my hon. Friend is referring to the hon. Member for Lewisham, East (Mr. Moynihan). He is the smaller of the two hon. Gentlemen, but they share a common standard of vulgar abuse based on total untruths about the borough of Lewisham. The remarks of the hon. Member for Derbyshire, South are what one would expect.
  The assertions are without foundations. Lewisham did not invest £100,000 in a commercial pantomime. It put some money into a pantomime which, before taking its publicity costs into account, broke even. After those costs had been taken into account, the pantomime lost £8,000 — a very different figure from £100,000. The pantomime was enjoyed by 37,888 people, and there was no censorship of the script.
  I am glad that the Secretary of State for the Environment is here. It is simply untrue that £130,000 is spent on sexism awareness training. There is no budget for sexism awareness training in the London borough of Lewisham. Lewisham spends £20,000 on management training for women. That is a somewhat different figure and a totally different concept. The borough artist is not employed by the borough—he is self-employed. I hope that when he finally appears in the Chamber the hon. Member for Lewisham, West will withdraw his gross slurs on Lewisham council.
  Lewisham is not an overspender. It is an underspender. Since 1981–82, when the allegedly loony Left council took control, Lewisham's expenditure has risen only by 8·9 per cent. Local authority inflation has risen by 13·8 per cent. and the general retail price index by 13 per cent. The loony Left council, castigated as an overspender by the Secretary of State, has in fact underspent. It has cut its services.
  The Secretary of State for the Environment (Mr. Patrick Jenkin): Ask the ratepayers.
  Mr. Straw: The figures are in the tables. I hope that people will ask the ratepayers. The ratepayers know that if rates have gone up in Lewisham, they have gone up not because of any increase in expenditure in the past two years — in real terms, the Secretary of State's own figures show that expenditure has gone down — but because of the cuts in rate support grant imposed by the Secretary of State. We will ensure that the Secretary of State's remark goes through the letter-box of every household in Lewisham.
  The Secretary of State may have lost the Lilley table, but I looked it up today. As I have said, for 1981–82 to 1983–84 the figure is 8·91 per cent., compared with increases in pay and prices for all local authorities of 13 per cent. and an increase of 13·8 per cent. in the RPI.
  Mr. Patrick Jenkin: On the latest information available to us, Lewisham is now budgeting 7 per cent. ahead of its target and, not surprisingly, is to have a 32 per cent. rate increase. That is what the hapless ratepayers of Lewisham will have to face in the ensuing year. The hon. Gentleman may believe that that is a proper way to treat the ratepayers, but I differ from him.
  Mr. Straw: The improper way to treat ratepayers is to impose penalties on local authorities, including Conservative authorities, and targets which they cannot meet without savaging their services. The proof of whether an authority is overspending or underspending—as the Secretary of State himself has admitted in other debates —is not the level of its rate increases, which are very much dependent on changes in rate support grant, but the level of its expenditure increases. On the Secretary of State's own figures, Lewisham's expenditure has been reduced in the last two years in real terms.
  Lewisham has been castigated as a high spender, but, if its rates have gone up, that is a direct result of the cuts in the Government's rate support grant, which the Conservative-controlled ACC has said was wholly responsible for the excess of rate increases above the level of inflation.
  The expenditure of a whole range of authorities which are due for rate-capping is either less than the RPI over the past four years or less than the increase in central Government expenditure. We believe that, on the Government's own definition, those authorities which have spent less than the increase in central Government expenditure, or less than the increase in inflation, should not be subject to this vicious rate-capping.
  Sir George Young: The hon. Member for Blackburn (Mr. Straw) has used the new clause to settle some personal scores with two of my hon. Friends. I do not carry details about pantomimes in Lewisham in my head, and I do not therefore propose to comment on that matter. However, knowing my hon. Friends, I do not believe that they would have made those statements without carefully researching them.
  The hon. Gentleman spoke somewhat briefly to the new clause. It seeks to prevent the Bill from operating by setting up criteria which the authors of the new clause expect will not be met. I will not bore the House with the technical reasons why the new clause is unacceptable, but I should like to deal briefly with the issue of principle.
  It is not realistic to compare central Government expenditure with local government expenditure. A substantial proportion of Government spending is in the
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  form of transfer payments, the size of which is determined by the depth of the recession, by world markets, and by international interest rates. Their size is also determined by demographic factors, such as the ageing of the population. To some extent, elderly people also make demands on local services, but the most significant demand on local government is education. In that sphere numbers are falling quite substantially, and that presents a real opportunity for savings. Because responsibilities are different and are dictated by totally different factors, it is not realistic to put the two types of expenditure on a par and to say that they should both be increased at the same rate.
  Mr. Meadowcroft: Does the Under-Secretary accept that local authorities have a proper role in endeavouring to counter the effects of recession by, for instance, underpinning local industry, considering the local infrastructure and trying to attract new companies to the area? That perfectly proper expenditure will vary in exactly the same way as public money spent centrally.
  Sir George Young: The hon. Gentleman tempts me to a broader debate on the question whether local government has the power to take macro-economic decisions which conflict with those of central Government. My understanding is that they should not do that and that it is up to central Government to dictate the broad economic parameters which govern the country. It is not up to local councillors to introduce counter-inflationary or reflationary policies which conflict with the Government's economic policy.
  There is another reason why it is perfectly legitimate for central spending to rise faster than spending by local authorities. Central spending may be provided for in public expenditure plans. It may be devoted to policies which the Government outlined in their manifesto and on which they were returned to office.
  We made it clear that defence and the police were priorities. They are Government responsibilities. Defence is probably the case to take here. It is realistic for a Government to make it clear that they want higher spending in some areas and to provide for it. That is another reason why we cannot realistically compare the two.
  Mr. Peter Hardy: Will the Under-Secretary of State note that, in addition to the opportunities afforded to local government because of a reduction in school rolls, as a result of the effects of the recession to which he referred many parts of the country face the appalling problem of vast numbers of young people who are unemployed or will become unemployed later this year. The Minister's Department, with the Home Office, produced a circular earlier this year which suggested that local authorities should give much higher priority to provision for leisure to do all manner of things, such as diminish crime. While suggesting that local authorities do that, the Government have said that they should do it without increasing expenditure. The Government can take that unrealistic stance, but local authorities cannot. That should be considered now.
  Sir George Young: I understand the hon. Gentleman's point, but it reinforces my case as the cost of youth unemployment is borne principally by the DHSS or the Manpower Services Commission. They are Government

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  responsibilities. That explains why the spending of such bodies increased more quickly than that of local government, which did not have responsibilities to quite the same extent.
  I sense that the Opposition do not wish to press the new clause too hard. I have explained why it is unrealistic, and I hope that the House will reject it.
  Question put and negatived.

New Clause 12

  EFFECT ON PUBLIC SPENDING
  'The Secretary of State shall be required to bring before both Houses of Parliament in each financial year a report showing the effect on total public expenditure in the previous financial year of the operation of Parts I and II of this Act as appropriate. Such report shall include a statement of the overall saving, if any, in the previous financial year as a result of the Act'. — [Mr. Straw.]
  Brought up, and read the First time.
  Motion made, and Question proposed, That the clause be read a Second time.—[Mr. Straw.]
  Mr. Chris Smith: We have already touched on the issues that lie at the heart of new clause 12 as they relate to the Government's real purpose in bringing forward the Bill. The Government speak with a forked tongue. Sometimes they say that it is designed to curb the activities of only a handful of so-called profligate Labour-controlled authorities to introduce some efficiency and supposed sanity into their affairs, and at other times they say that it is designed to achieve reductions in public expenditure. We know that the second reason — admitted by the Under-Secretary of State today—is paramount.
  New clause 12 probes the issue a little further and challenges the Government to make the matter clear to both Houses of Parliament. Both Houses of Parliament are involved. The other place has an extremely important role to play in such constitutional matters and I hope that it will exercise it soon. New clause 12 requires the Government to bring before both Houses of Parliament a report on the overall level of savings that have been achieved by the operation of the measure. The Under-Secretary of State said that it will reduce the level of public expenditure. That is a self-evident and simplistic truth, but it ignores the balance between local expenditure that is raised through the rates and Government expenditure that is drawn on the public sector borrowing requirement. It ignores that crucial distinction that the Under-Secretary of State constantly ignored in questions that were put to him earlier. It does not reveal what the Government have consistently refused to reveal — the exact extent of reduced public expenditure that they envisage resulting from the Bill.
  The nearest guess that we had came from the Secretary of State in Committee. He constantly assures us all that he wants to rate-cap only 15 to 20 authorities. His best estimate is that, if those authorities are rate-capped, about £250 million will be saved in any one year. We should compare that £250 million with the reduced public expenditure that the Treasury envisages in local government spending in its most recent White Paper, the predictions in the Green Paper that was published on the same day as the Budget, and the extravagant claims made by some Conservative Members about the effect of the
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  Bill. If we make that comparison, we see clearly that the £250 million falls far short of the Treasury's expectation and claims of what the Bill will achieve.
  6.45 pm
  How much money do the Government expect to save? How much of that money will come from the 15 to 20 Labour-controlled authorities which, it is claimed, are the only ones that will be rate-capped? To what extent do the Government expect the general powers to be implemented to achieve the size of savings that they expect? Will the Government put before both Houses of Parliament each year a proper report on how effective or, more probably, ineffective the Bill will be in achieving anything like the savings that have been claimed? If the claimed savings were made, the consequences would be disastrous. I hope that the Government will be honest enough to accept new clause 12 and report to Parliament properly on the impact of the Bill.
  Mr. Patrick Jenkin: The hon. Member for Islington, South and Finsbury (Mr. Smith) has rehearsed well-traversed ground which was covered at length in Committee. I do not complain about that, as it appears that he and some others still labour under the misapprehension that has been assiduously fostered by some of our critics in the national and specialist press who have argued that part. I will not achieve savings. The Opposition have consistently argued that any savings will be small or nonexistent. I refute that.
  It is interesting that the hon. Gentleman, whose debating skills we came to admire in Committee — I hope that he will allow me to say that—has changed tack remarkably. The Opposition argued consistently 3,n Committee that there would not be any savings. I took down the hon. Gentleman's words as accurately as I could. He said that we claim that the overall level of public expenditure will be reduced and described that as a self-evident and simplistic truth. He is quite right. Not only is it self-evident and simplistic, but it will happen.
  Mr. Chris Smith: The right hon. Gentleman is right, but he has completely missed my point. The point that my right hon. and hon. Friends have consistently made—I support it—is that the level of expenditure required by the Exchequer will not necessarily be reduced by the Bill.
  Earlier the Under-Secretary referred to the overall level of spending by central and local government put together. That is a supposed definition of public spending, although in economic terms it is relatively meaningless. However, under that definition the right hon. Gentleman is correct, and no Labour Member has ever denied that. We have pointed to the expenditure of the Exchequer. That would not necessarily fall.
  Mr. Jenkin: I am extraordinarily grateful to the hon. Gentleman. I am only sorry that some of my hon. Friends, who earlier cast doubt on the proposition that we would make savings, are not here to listen to him. He has properly explained the definition of public expenditure —the sum of spending by central Government and local authorities, and the borrowing requirements of the nationalised industries. That, broadly, is the definition.
  The hon. Gentleman has now acknowledged —perhaps we do not need to dwell on it—that it will be reduced by the Bill. He will remember that on Second Reading and in Committee I put forward the proposition

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  that had there been rate capping in 1983–84, had no more than 18 authorities been chosen, and had we sought expenditure reductions of no more than 3 per cent., we would have saved up to £350 million below what it otherwise would have been.
  As the purpose of the Bill is to keep spending below what it would otherwise be, by capping the spending and rating figures of up to 20 or so local authorities, it seems to me that the hon. Member for Islington, South and Finsbury — who approaches these matters with a freshness and intelligence that we have come to admire — has now seen the light and recognised that it will achieve savings. He has therefore conceded our point.
  The hon. Gentleman went on to say that we had declined to reveal the exact amount. Inevitably, we are precluded from doing so. First, savings can be judged only against what would have been spent had there been no rate capping. That must always be a matter of hypothesis. Secondly, we are not yet in a position to say which authorities will be selected for limitation. We will not know that until we have their full budget figures. Thirdly, we are as yet unable to give the amount by which spending would be limited. Fourthly—this is most important—it is quite impossible to quantify the shadow effect. In fact, a number of other authorities will not be selected but will keep their spending down so that they will not be selected in a future year.
  I remind the House of one of the most revealing moments in Committee, when my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Merchant) made a bull point which no hon. Member sought to refute. He said:
  "Much has been said about the deterrent effect of the general powers. It is said that the power will be important, not in its implementation, but because it could be implemented in future."
  The hon. Member for Islington, South and Finsbury will remember that he then quoted
  "from the recent budget proposals of the Newcastle city council. Paragraph 20.5 says:
  'when considering financial adjustments and the general level of expenditure the Committee should bear in mind that the "ratecaping" legislation has been given its second reading in the House of Commons and is now in its Committee stage which the Government hopes will be completed by Easter. The Secretary of State for the Environment has produced illustrative criteria by which authorities might be chosen to be capped. On the basis of 1983–84 budgets this Council—
  the Newcastle city council—
  "'fails 7 of the 11 tests quoted'."
  My hon. Friend the Member for Newcastle upon Tyne, Central rightly went on to say:
  "That illustrates that councils are already aware of the deterrent effect of this part of the Bill. Even if it is not implemented, it forms a a vital part of the Bill."—[Official Report, Standing Committee G, 8 March 1984; c. 1029–30.]
  Mr. Cowans: I am blessed with having two councils in my constituency, one of which is Newcastle upon Tyne. The right hon. Gentleman defeats his own case, because later in Committee I answered the argument of the hon. Member for Newcastle upon Tyne, Central (Mr. Merchant). Because of the Local Government, Planning and Land Act 1980, exactly the same kind of terms were contained in the budget minutes of Newcastle city council at that time. How can the right hon. Gentleman claim that Newcastle is taking account of the Bill when even he
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  cannot say what criteria or principles he will use? Therefore, how can he claim that Newcastle city council knows what he does not know?
  Mr. Jenkin: The hon. Gentleman must clearly bear in mind that in the document referred to by my hon. Friend the Member for Newcastle upon Tyne, Central I produced the chart which I circulated to all members of the Committee and which was made available to the press. That listed the 33 or so authorities whose spending was 20 per cent. or thereabouts over GRE as well as a whole series of tests. Even though Newcastle city council did not know, the point was made that it failed seven of the 11 tests, and the city treasurer thought that that was a sufficiently important factor to bring to the notice of the finance committee when drawing up its budget and rate proposals. I have no wish to embarrass the leaders of that council, but, as is well documented in the press, it is making efforts to reduce its spending.
  As part of the savings that the Bill will produce we are, therefore, perfectly entitled to refer to the shadow effect which is likely to lead to a reduction in expenditure which the hon. Member for Islington, South and Finsbury has said is a self-evident and simplistic truth.
  That is what we will achieve. The question, therefore, is whether we need a special report—the subject of the new clause. From what I have said, I am sure that the House will recognise that it would be quite impossible to put a firm, precise or accurate figure on the savings that will be achieved. We cannot know what the level of expenditure would have been, and it is difficult to estimate the shadow effect.
  Each year the Government publish their public expenditure White Paper. That clearly shows the history of expenditure over five earlier years and gives planned figures for the future three years. The present White Paper records estimated outturn expenditure for years up to 1983–84, and the overspend represented by those figures can readily be seen when compared with earlier White Papers.
  Once rate limitation under part I has had a chance to bite, the expenditure of the highest overspending authorities will be brought under control, and that should lead to a noticeable reduction in the level of overspend reported in all the recent White Papers, or even perhaps the disappearance of that overspend altogether.
  Mr. Chris Smith: With respect, the right hon. Gentleman is trying to have his cake and eat it. On the one hand, he is saying that it is impossible to estimate the reduction in overall public expenditure which will be achieved by this legislation, and in the next breath he says that a considerable reduction in the expenditure of the high-spending authorities will be achieved. If he cannot report that each year to Parliament, as the new clause seeks to ensure, how can he confidently claim that there will be a considerable reduction?
  Mr. Jenkin: I do not think that there is very much between us. For the benefit of those of my hon. Friends who have only just come into the Chamber, I should point out that the hon. Gentleman said that the Bill would produce a reduction in the overall level of public expenditure and that that was a self-evident and simplistic truth. The Bill will reduce spending, but I cannot precisely estimate that, for the reasons that I have explained. What would otherwise happen cannot be defined and it is

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  difficult to quantify the shadow effect. For that reason, it is not sensible to impose on the Government an obligation to produce a precise figure, which we will have to say cannot be precise.
  However, the public expenditure White Paper will contain the figures that are the necessary raw material for people to form a judgment. Therefore, that will meet the only realistic purpose of the new clause — to enable people to form an estimate of what the savings are.
  This debate has served an admirable purpose in that we have now had from one of the most articulate Opposition spokesmen in Committee a clear recognition and acknowledgment that the Bill will produce public expenditure savings. The hon. Member for Blackburn (Mr. Straw), who was commendably brief in moving the new clause—he did so formally—has served a splendid purpose, and we are grateful to him. However, I fear that I cannot advise the House to accept the new clause.
  Question put and negatived.

New clause 15

  CONSULTATION ON PRINCIPLES
  `Before the Secretary of State shall exercise the powers conferred upon him by section 2(4) and section 3(2) of this Act, he shall determine the principles specified in consultation with, and after taking into account any representations received from, such associations of local authorities as appear to him to be concerned and any local authority with whom consultation appears to him to be desirable; and such consultations shall have been undertaken not later than three months before the exercise of those powers.'.—[Mr. Straw.]
  Brought up, and read the First time.
  7 pm
  Motion made, and Question proposed, That the clause be read a Second time.—[Mr. Straw.]
  Mr. Cowans: I could not have had a better entry for this new clause than what the Secretary of State said earlier if I had planned it, because the essence of the new clause is consultation about the principle. In reply to my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), the Secretary of State gave the Newcastle city council something that it has never had before, under any Government—the ability to see into the future. He said that the council was already implementing the Bill, but he does not know what the Bill's principles are because he has not yet worked them out. It is true that he gave a list of 11 different principles and went through all 11 of them, but at the end of the day, unlike Santa Claus, he did not leave us a present and tell us which one would apply. The idea that Newcastle city council can take account of something that the Secretary of State does not himself know about goes a little beyond even his vivid imagination.
  The little lull that the Government had when we debated the previous two new clauses will abruptly cease on this one unless the Secretary of State does what he has so far not done and accepts a new clause. We must examine the draconian powers that are being given to the Secretary of State. We mention in the new clause the powers given to the Secretary of State by clause 2(4) of the Bill. The clause provides:
  "The power to designate an authority shall be exercised in accordance with principles determined by the Secretary of State".
  It also refers to clause 3(2), which says:
  192
  "The power to determine a level for the total expenditure of a designated authority shall be exercised in accordance with principles determined by the Secretary of State".
  The common denominator between the two subsections is the fact that the Secretary of State is the person who determines the principles. Both here and in part I there is no mention of any consultation, and the principles are purely at the whim of the Secretary of State.
  In Committee, many constructive amendments were moved by the Opposition and one or two, although not many, right hon. and hon. Conservative Members likened them to wrecking amendments. Although I should like to wreck this Bill, and I am sure that there are some Conservative Members who would join me in doing so, this new clause is not meant to be a wrecking one. It talks about a basic thing that should be welcomed by the Secretary of State. There should be consultation, given the fact that the House in its wisdom will pass a Bill that allows Secretaries of State to make orders and principles outside of it, and such consultation is therefore of vital importance.
  Unlike Conservative Members, and particularly those on the Government Front Bench, we believe in democracy, and we believe that those who have to apply these principles should at least be consulted at all stages and should examine what is being done. After all, when he makes these principles, the Secretary of State will apply them to local authorities. We go out of our way to talk about the local authority associations and/or the local authority. We do not restrict consultation to local authority associations, because some local authorities are not members of associations. As the right hon. and learned Member for Hexham (Mr. Rippon) said, one authority may be completely different from another. Therefore. the new clause allows any authority to join in the consultations.
  In particular, the new clause is relevant to part I, the selective scheme. It is not new because in other parts of the Bill the Government recognise that which we are seeking to move in this new clause. However, in the selective part of the scheme, in which we have heard that two or three, or 33 or 43, authorities will be caught, there is no provision for consultation. Even the House does nor get an opportunity to examine the principles until an order is placed before it. It is vital that local authorities should have the opportunity to be consulted by the Secretary of State, and that their views should be taken into account when he, and he alone, draws up the principles. This is a basic right which is built into the Bill at another stage and it should also be in it at this stage.
  The new clause will act as a safeguard not only for local authorities but for the Secretary of State, who will be able to build in a time scale. It says:
  "such consultations shall have been undertaken not later than three months before the exercise of those powers."
  That is not an unreasonable time scale. It means that a local authority cannot drag its feet, but nor can the Secretary of State.
  The consultation procedure is all the more important because at no stage did the Committee have an opportunity to discuss those proposals, or even what the Secretary of State has in mind. If—this is a big "if"—the Secretary of State really wants local authorities to abide by and implement the principles that he draws up, should he not welcome the opportunity that this new clause provides for him? He could consult local authorities, explain to them

  193
  the principles, take account of any reservations or alterations that they may have, and explain to them fully what he has in mind. It would cut a long story short if the Secretary of State, or the Under-Secretary of State, were to leap to his feet to accept that basic principle. However, as neither of them did so in Committee, I do not expect their approach to change now.
  When the Bill was considered in Committee — it spent a comparatively long time in Committee, and that consideration could have been shorter if Ministers had had the wisdom to accept the Opposition's amendments—many questions were asked about the proposed consultative procedure. Unfortunately, very few of them were answered. With respect to the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), I could not have bettered his contribution. He said:
  "My hon. Friend the Minister may be able to consider the amendment"—
  it was the amendment dealing with consultation—
  "quickly because it deals with something that is clearly unfair. I am sure that, awful though it is, the Bill is not intended to be any more unfair than necessary. Perhaps my hon. Friend the Minister will intervene"—
  that would have been a change—
  "to say that those about to die will at least be allowed to consult. If consultation is to be impossible anyway, we may as well all pack up and go home. If my hon. Friend can agree to the authorities being consulted, perhaps an amendment to the amendment can be hurried through and approved."
  It is clear that one Conservative Member appreciated the wisdom of the new clause. If he and the Under-Secretary of State were to move along their Benches towards each other, consultation could take place across the Gangway. If that were to happen, the new clause could meet with the Government's approval.
  Perhaps my hon. Friend the Member for Copeland (Dr. Cunningham) summed up the argument in a slightly better way than the hon. Member for Selly Oak, although I accept that he took a different approach. My hon. Friend said:
  "If the Government's intentions are not just political but intended to produce more efficient, responsive local administration, sensible discussions must take place. If they do not, and local authorities do not have that statutory safeguard, some may come to believe that the Government's real motives are not concerned with bringing about greater efficiency but simply constitute a naked attack on various authorities about which the Government are unhappy."
  It seems that the new clause gives the Secretary of State an opportunity to refute the comments of my hon. Friend the Member for Copeland, and this is an ideal opportunity to take up what the hon. Member for Selly Oak saw as an omission in the Bill, a view which was shared by my hon. Friend.
  After considerable probing the Under-Secretary of State said:
  "I have the authority of my right hon. Friend the Secretary of State to say that we shall consider, without commitment—I stress that phrase— whether we can build in a consultative provision on the principles with the associations, and whether that should be in the Bill". — [Official Report, Standing Committee G, 16 February 1984; c. 491–519.]
  After discussing for many hours what were described as wrecking amendments, even the Under-Secretary of State started to have doubts. He said that he would consider the matter. Unfortunately, there has been deafening silence
  194
  since that breakthrough. Having said in Committee that he would consider the matter, surely he should have told us on Report whether the answer was yes or no.
  7.15 pm
  The Under-Secretary of State knows that during our long debates in Committee I developed a great respect for him. However, I must remind him that he said that he would consider again the Government's approach to consultation. Since then there has been a deafening silence. I suppose that that is nothing strange because an attitude that is not directed one way or the other is very much in character with the Bill.
  Conservative Members may be thinking that a devilish plot has been dreamt up by the Labour party to undermine the principles in the Bill and the Government's proposed legislation. They may even think that they must resist the plot at all costs and take their troops through the Government Lobby to ensure that the Government vote massively against. Unfortunately, the Bill is riddled with instructions that are all one way. Local authorities are instructed to consult. In many instances the Bill seeks to enforce consultation upon authorities. In clause 13 every local authority is instructed to
  "consult persons or bodies appearing to it to be representative of industrial and commercial ratepayers in its areas about its proposals for expenditure and the financing of expenditure in the next financial year."
  That imposes consultation upon local authorities.
  In clause 9 the case of consultation is presented to us. I ask Conservative Members to put the new clause against clause 9(2). If they do so, they will find that there is not very much difference. Subsection (2) states:
  "Before making an order under this section the Secretary of State shall consult such associations of local authorities as appear to him to be concerned and any local authority with which consultation appears to him to be desirable."
  Conservative Members will find that the new clause contains identical words. The Secretary of State has said on many occasions that it will never be necessary to implement part II. In effect, he has told his right and hon. Friends "Do not worry about part II. Come into the Lobby with me and support the Bill. Part II has been included only because it may be necessary in the direst circumstances."
  Clause 11 reads:
  "Before determining levels of local expenditure under section 3 above for the authorities treated as designated by virtue of section 10 above"—
  that is the section that introduces part II—
  "the Secretary of State shall consult such associations of local authorities as appear to him to be concerned."
  If we glance at the new clause, we find that the words are identical. If the Secretary of State and those who drafted the Bill have seen fit to acknowledge a consultation procedure identical to that of the new clause, they should have a strong case for accepting the new clause. Is it sheer chance that the consultation power appears only in part II? Is part II the only part of the Bill that worries Conservative Members, as they said in today's debate? They are worried, rightly, because part II would sweep up almost all of the local authorities, including Conservative-controlled local authorities, that are caught by part I. Is it not passing strange that consultation, in the same form as new clause 15, will be necessary only when it sweeps up Conservative authorities? That is exactly what the Bill is about when it is read without the new clause. It is evident that, as soon as the Secretary of State implements the part

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  II that he promised never to implement to bring Conservative Members into the Lobby, consultation takes a different form. The only conclusion that I can draw is that consultation in the form that we request is good for Conservative authorities but not so good when applied to Labour authorities. In that case, too, the Secretary of State will need to put up a good case.
  How can any Government, even this one, be so blatantly biased in a Bill that is introducing legislation that might last for a long time? How can hon. Members on both sides of the House sit in the Chamber and, while not voting for the new clause, accept that consultation is good in part II but can be missed out of the remaining clauses? That is illogical, politically biased and blatant. The Secretary of State should be prepared to write the new clause into the Bill, as his case for opposing it is indefensible.
  I should like to set out one of the other reasons. Conservative Members have quoted from the Local Government, Planning and Land Act 1980. I accept that they should do so as it is a Conservative measure. I shall illustrate the difference between that Act and the nonsense being forced upon us tonight which will be forced upon local authorities later. Part I of the 1980 Act is headed:
  "Local Government Relaxation of Controls"
  The Conservative Government laid down the following words of wisdom, in section 1:
  "So much of the provisions mentioned in Schedule 1 of this Act — (a) as makes the exercise of any power of a local authority subject—(i) to a right of appeal to a Minister; or (ii) to the provisions of regulations made by a Minister; or (b) as confers upon a Minister any power to give a local authority directions or power to require a local authority to make byelaws; or (c) as requires a local authority to make any report or give any notice to a Minister, shall cease to have effect."
  That measure was introduced by the same Conservative party that is forcing this nonsensical Bill on hon. Members, which takes away their right to challenge the Government when the local authorities that they represent are given an order. The Bill is forced upon the public. All that has been done without providing an opportunity to be consulted on principles that are in the hands of one person —the Secretary of State for the Environment.
  How can any hon. Member sit here, straight-faced, and examine the case for a Bill that says that consultation is good and shall be mandatory in relation only to part II? I do not believe that Conservative Members can honestly hold their heads high and accept the principle that what is good in part II is not so good in part I, when Labour-controlled authorities will be selectively caught by it.
  After due reflection, bearing in mind his non-committal reply that he would examine the matter, the Secretary of State seemed to waver for the first time in about 30 Committee sittings. At last it seemed that the message had got through. I have two questions for the Secretary of State. First, will he tell us what happened to his promise to consider consultation, at our suggestion that it should form part of part I as well as part II? The Secretary of State could answer that question tonight and end a deafening silence. Secondly, how can the Secretary of State explain logically to the House and the public that consultation is good — and mandatory — in part II but completely ignored in part I? If he can do so, he is a better man than I thought he was. If we hear no explanation from the Secretary of State, I shall urge my right and hon. Friends to divide the House. My interpretation of the Bill and the Secretary of State's refusal to accept new clause 15 seem to be backed by my hon. Friend the Member for Copeland
  196
  (Dr. Cunningham), who argued clearly that any other course would be blatant political bias against Labour local authorities that were selectively caught by the Bill The Government have had quiet runs on the two previous new clauses, but unless the Secretary of State accepts new clause 15 we shall divide the House.
  Mr. Meadowcroft: One of the amazing things about the Bill is that after many hours spent considering it we have heard only vague assertions of the principles on which the Secretary of State bases rate-capping, either for the 12 to 20 authorities or under the general scheme. A detailed case on which local authorities could base their case against rate-capping has not been put forward.
  The debate on a previous new clause included a speech by the Secretary of State in which he said that the Government should not scrutinise local authorities in detail, as that was a job for the local authorities themselves. He said that the Government were trying to stop gross overspending on services. However, the Committee never went beyond the suggestion of what services would be singled out for gross overspending or whether a balance could be struck between different services on which local authorities should consider concentrating their resources.
  7.30 pm
  From the debate on which of the three limits would be paramount, we now know that the GRE limit will not be paramount. The target will not be paramount. A third limit will be set solely on the say-so of the Secretary of State, on principles determined entirely by him. The local authorities thus caught will not be able to determine how on earth they can avoid it, because there is no guidance within the principles that are laid down.
  One is forced inexorably to the conclusion that the Bill is not about rates; that it is simply a piece of spite against local authorities which do not happen to elect Conservative councillors. It is about the political balance between the Government and local authorities. It is not about the spending of local authorities.
  The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) referred to the legitimate fears of some Conservative councils and said that they were jittery about the Bill. However, my prediction is that their fears will prove to be unfounded. If ever the Bill seemed likely to catch a significant number of Tory councils, the principles determined by the Secretary of State would be changed. It is not the Bill's purpose to achieve that.
  Words such as "profligate", "irresponsible" and "extravagant" have been bandied about. We should be given examples of what the Minister means. It would help local authorities immensely to cope with the situation that will be forced upon them if they had some guidance on the principles on which the Secretary of State regards them as profligate, irresponsible or extravagant. The same things have been said today as were said in Committee.
  We have heard about the usual easy target of some of the more bizarre grants made by local authorities under section 137 of the Local Government Act 1972. Hon. Members on both sides of the House can challenge local election procedures and so on. However, none of those things put together represent anything like a substantial sum of money. They are nothing in the context of the billions of pounds of local government expenditure.
  The Secretary of State said how pleased he was to know that some local authorities were frightened by the possible

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  enactment of the Bill and were looking at their expenditure to see what action they could take. If the Secretary of State is concerned and sincerely wishes to influence, other local authorities so that they, too, go down that road, the best thing that he could do would be to give the detail of some of the principles that he will use to determine rate-capping. If the principles were set out in detail, we could enable local authorities to avoid the Secretary of State's use of the general powers.
  One such principle was suggested by the Under-Secretary of State, the hon. Member for Ealing, Acton (Sir G. Young), who pondered whether local authorities should try to combat recession in their own areas. He wondered whether that was a proper use of local government resources. A local authority might face economic problems in its area that were different from those faced by another local authority. It may be a local authority such as Bradford, with problems in the textile trade, which is dominant in that area. It would be a strange bunch of locally elected representatives who did not seek to do something particular in the area to combat the difficulty. However, If the Government say that the principle should be that local authorities should not combat recession or economic problems, so be it. Local authorities should know what the principle is.
  In Committee we were often on common ground with the hon. Member for Selly Oak. We agree that there is an infinite combination of circumstances for the Secretary of State to consider when he copes with rate-capping. One cannot consider them in a simplistic way and yet do justice to local authorities. For example, will the principles be based on demography? It would be ludicrous to base too much of the case for rate-capping on demography.
  Will the principles be based on economic resources or on the potential of the local authority to raise money? That is significant, but it is not the sole factor on which the principles should be based. Will they be based on the level of environmental dereliction in the area? That differs widely across the country, so it could not be the sole basis. Will it be the level of unemployment or the state of the housing stock or other buildings in the area? We had a debate the other day about industrial buildings. The Minister for Housing and Construction was sympathetic. He accepted that there might be a need to give particular consideration to that problem. Will that be the principle which the Secretary of State will use to determine whether a local authority should be capped?
  There is a great kaleidoscope of principles with which we might have to cope. Why will the Government not publish the principles? What embarrassment would it cause them? Do the Secretary of State and the Government not want to have the embarrassment of arguing the case on principles with local authorities which might challenge them?
  Hon. Members on both sides of the House say that if the Government are to overturn the historical relationship between locally elected representatives and Members of the House, at least they should do local government the courtesy of giving it some idea of the principles on which they will base the overturning of that relationship. They should not leave it to the whim and determination of one person alone, however important he is to the Government and the country.
  Mr. Ray Powell: I am glad to be called to speak on the new clause, because it is of great significance to Welsh local authorities.
  I attended most of the Committee sittings after the sad death of Joan Evans. I was surprised that no Welsh Minister was present in Committee. If one looks at the Committee proceedings, one sees that all the references to Wales were made either by loan Evans or by myself. There was no response whatsoever from the Government Front Bench about the impact of the Bill on Wales, particularly the impact of clauses 2 and 3.
  I was interested in the observations of my hon. Friend the Member for Tyne Bridge (Mr. Cowans) on this issue and on the fact that the Bill is so inflexible. The only flexibility is for the Minister when he makes certain decisions. There is no directive for local authorities. The Minister has decided that in no way will he allow local authorities any guidelines so that they can avoid being capped.
  In Committee I referred to my local authority, the Ogwr borough authority, which spends about £9·5 million. However, because of the forecast increase in spending in the next 12 months, that amount will go well over the £10 million figure and in all probability the authority will be capped in 1985–86. The Minister said that the general power would be taken only in absolutely essential and exceptional circumstances. We want to find out what are the exceptional and absolutely essential circumstances. Despite the deep and lengthy probing of my hon. Friend the Member for Tyne Bridge and others of my hon. Friends, little response has been forthcoming from the Minister. As my hon. Friend said, it is essential to force a Division on the new clause so that the House and local authorities throughout Britain, but especially in Wales, know of our decision.
  Mr. Waldegrave: The hon. Member for Tyne Bridge (Mr. Cowans) said that in Committee I appeared to be wavering on this matter. He was right. Hon. Members on both sides of the House have put forward strong arguments on this matter. The hon. Gentleman gave us credit for the fact that nothing in other parts of the legislation, or other local government legislation, stands against the principle of consultation. On the contrary, we try, wherever reasonable, to build in consultation. We start, therefore, with a presumption in favour of the new clause. That is why we said that we would look seriously at the proposal, and we have done so.
  There are powerful arguments against the new clause. I hope to convince the hon. Member for Tyne Bridge that those arguments are matters not of principle of the type to which he referred but are more to do with practicality. I accept that, as the new clause is drafted, consultation on the principles must be near to the process of designation. I presume that is the purpose of the three-month limitation on when consultations will be undertaken. There will not, therefore, be vacuous discussion early on. That is a fair point. Consultation should be as late as possible so that real discussion can occur.
  I assure the hon. Gentleman that reconsideration of this matter has not been a matter of form. One argument, which causes difficulty, is that the closer we get to designation of the authorities, the closer we get to discussion not about general principles but about which authorities are caught by different sets of principles. At that point, we are near to discussing individual authorities.

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  I am not sure that it is right to involve the local associations in those discussions. Normally, they are rightly chary of becoming involved in discussions about the relationship between the Government and a particular local authority. Their job is to represent the different classes of authorities generally.
  We are on the horns of a dilemma. It might not be proper to involve the local authorities in discussions about whether a particular authority is caught, so some weight must be attached to that argument.
  In Committee the Opposition rightly pressed another, more serious argument—not to introduce delays at the end of the process. The local authorities and their officers must be involved in a dialogue with central Government as early as possible so that they know where they are. They will wish to put together their case for derogation. It is essential that there are no delays. The room for delay becomes a problem when building in a statutory consultation procedure at the end of the process, where it will be meaningful. Even with the best will in the world, we have seen in the past few months that there is room for delay of one kind or another— for example, in legal challenges about whether the Association of London Authorities is to be properly consulted. Those delays are greatly against one of the other interests of local authorities, which hon. Members have rightly pressed—that local authorities should know where they are as soon as possible.
  I assure the hon. Gentleman in an unbiased way that we start with a presumption in favour of consultation. However, I have concluded that if we accept this measure, the authorities might be worse off.
  Mr. Cowans: I do not see the dilemma. The Under-Secretary of State might not want to involve the voluntary associations, but the new clause is worded so that he can have consultations with any local authority he wishes. When will the hon. Gentleman get round to defending the view that mandatory consultations are good in part II but should not exist in part I?
  7.45 pm
  Mr. Waldegrave: That is the second leg of my argument. I take it that the hon. Gentleman wishes to involve the associations. It is essential that there should be a real dialogue with individual authorities. Such discussions will not deal greatly with principles, which, I suspect, will influence the associations. The Secretary of State outlined to the Committee the list of alternative principles. Whichever set is used, a large number of the same authorities will be involved. The authorities will want to be involved in a dialogue about the specific position in which they find themselves, and I do not wish to delay that process.
  The hon. Member for Tyne Bridge said that we must be up to no good because we have built consultation into part II but not into part I. I hope that I can reassure the hon. Gentleman that the reason why we shall have consultation under part II is consistent with the argument I have just put forward for not having consultation under part I. In part I, the discussion will be about the position of individual authorities, where they are not properly involved. In part II, because authorities generally will be involved, it will be right for the local authority associations to have consultations. For that reason, the positions differ.
  Mr. Cowans indicated dissent.
  Mr. Waldegrave: I see that I have not convinced the hon. Gentleman. I am sorry about that. The Government have come down in favour of not accepting the new clause.
  Dr. Cunningham: The Labour party is unconvinced.by the argument of the Under-Secretary of State. It is amazing that a Government who say that they adhere to the principles of local democracy will give a statutory right of consultation to industry and commerce but not to local councils, either individually or collectively. It is astonishing that the Under-Secretary of State should say that it is important that this principle is embodied in part II, which the Secretary of State said the Government do not intend to use except in extremis and hope never to use, but cannot embody the principle in part I, which the Government intend to use as soon as possible. Is it not a classic example of standing logic on its head to say, "This is important in a case where it will never be used but unimportant in a case when we know it will be used"?
  That was the most unconvincing response that we could have heard from the Under-Secretary of State on the important issue of the right of local authorities, which are to have their democratic freedom taken away by the Government under the provisions of the Bill, to be consulted.
  Mr. Cowans: It is insulting.
  Dr. Cunningham: My hon. Friend says that it is insulting to local authorities, and I agree with him. We shall press the motion to a Division.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 184, Noes 291.

  Division No. 206]

  [7.50 p.m.

  AYES

  Adams, Allen (Paisley N)

  Cook, Frank (Stockton North)

  Alton, David

  Cook, Robin F. (Livingston)

  Anderson, Donald

  Corbett, Robin

  Archer, Rt Hon Peter

  Corbyn, Jeremy

  Ashdown, Paddy

  Cowans, Harry

  Ashley, Rt Hon Jack

  Craigen, J. M.

  Atkinson, N. (Tottenham)

  Crowther, Stan

  Bagier, Gordon A. T.

  Cunliffe, Lawrence

  Banks, Tony (Newham NW)

  Cunningham, Dr John

  Barnett, Guy

  Dalyell, Tam

  Barron, Kevin

  Davies, Rt Hon Denzil (L'lli)

  Beaumont-Dark, Anthony

  Davies, Ronald (Caerphilly)

  Beckett, Mrs Margaret

  Davis, Terry (B'ham, H'ge H't)

  Beith, A. J.

  Deakins, Eric

  Bennett, A. (Dent'n & Red'sh)

  Dixon, Donald

  Bermingham, Gerald

  Dobson, Frank

  Bidwell, Sydney

  Dubs, Alfred

  Blair, Anthony

  Dunwoody, Hon Mrs G.

  Boyes, Roland

  Eadie, Alex

  Bray, Dr Jeremy

  Eastham, Ken

  Brown, Gordon (D'f'mline E)

  Edwards, Bob (W'h'mpt'n SE)

  Brown, Hugh D. (Provan)

  Ellis, Raymond

  Brown, N. (N'c'tle-u-Tyne E)

  Evans, John (St. Helens N)

  Brown, Ron (E'burgh, Leith)

  Ewing, Harry

  Bruce, Malcolm

  Fatchett, Derek

  Buchan, Norman

  Faulds, Andrew

  Callaghan, Jim (Heyw'd & M)

  Field, Frank (Birkenhead)

  Campbell-Savours, Dale

  Fields, T. (L'pool Broad Gn)

  Canavan, Dennis

  Fisher, Mark

  Carlile, Alexander (Montg'y)

  Flannery, Martin

  Cartwright, John

  Foot, Rt Hon Michael

  Clark, Dr David (S Shields)

  Forrester, John

  Clarke, Thomas

  Foster, Derek

  Clay, Robert

  Foulkes, George

  Cocks, Rt Hon M. (Bristol S.)

  Fraser, J. (Norwood)

  Cohen, Harry

  Garrett, W. E.

  Coleman, Donald

  George, Bruce

  Concannon, Rt Hon J. D.

  Godman, Dr Norman

  Conlan, Bernard

  Gould, Bryan

  201

  Hardy, Peter

  O'Neill, Martin

  Harman, Ms Harriet

  Park, George

  Harrison, Rt Hon Walter

  Parry, Robert

  Hart, Rt Hon Dame Judith

  Patchett, Terry

  Haynes, Frank

  Pavitt, Laurie

  Healey, Rt Hon Denis

  Pendry, Tom

  Hogg, N. (C'nauld & Kilsyth)

  Penhaligon, David

  Holland, Stuart (Vauxhall)

  Pike, Peter

  Home Robertson, John

  Powell, Raymond (Ogmore)

  Howells, Geraint

  Prescott, John

  Hoyle, Douglas

  Radice, Giles

  Hughes, Dr. Mark (Durham)

  Randall, Stuart

  Hughes, Robert (Aberdeen N)

  Redmond, M.

  Hughes, Roy (Newport East)

  Richardson, Ms Jo

  Hughes, Sean (Knowsley S)

  Roberts, Allan (Bootle)

  Hughes, Simon (Southwark)

  Robertson, George

  Janner, Hon Greville

  Robinson, G. (Coventry NW)

  Jenkins, Rt Hon Roy (Hillh'd)

  Rooker, J. W.

  John, Brynmor

  Ross, Ernest (Dundee W)

  Johnston, Russell

  Rowlands, Ted

  Jones, Barry (Alyn & Deeside)

  Ryman, John

  Kaufman, Rt Hon Gerald

  Sedgemore, Brian

  Kennedy, Charles

  Sheerman, Barry

  Kirkwood, Archibald

  Shore, Rt Hon Peter

  Lambie, David

  Short, Ms Clare (Ladywood)

  Lamond, James

  Short, Mrs H.(W'hampt'n NE)

  Lewis, Ron (Carlisle)

  Silkin, Rt Hon J.

  Lewis, Terence (Worsley)

  Skinner, Dennis

  Litherland, Robert

  Smith, C.(Isl'ton S & F'bury)

  Lloyd, Tony (Stretford)

  Smith, Rt Hon J. (M'kl'ds E)

  Loyden, Edward

  Soley, Clive

  McCartney, Hugh

  Spearing, Nigel

  McDonald, Dr Oonagh

  Stott, Roger

  McKelvey, William

  Strang, Gavin

  Mackenzie, Rt Hon Gregor

  Straw, Jack

  Maclennan, Robert

  Thomas, Dafydd (Merioneth)

  McNamara, Kevin

  Thomas, Dr R. (Carmarthen)

  McTaggart, Robert

  Thompson, J. (Wansbeck)

  McWilliam, John

  Thorne, Stan (Preston)

  Madden, Max

  Tinn, James

  Marek, Dr John

  Torney, Tom

  Marshall, David (Shettleston)

  Wallace, James

  Martin, Michael

  Wardell, Gareth (Gower)

  Mason, Rt Hon Roy

  Wareing, Robert

  Maxton, John

  Weetch, Ken

  Maynard, Miss Joan

  Welsh, Michael

  Meadowcroft, Michael

  White, James

  Michie, William

  Williams, Rt Hon A.

  Mikardo, Ian

  Winnick, David

  Millan, Rt Hon Bruce

  Woodall, Alec

  Miller, Dr M. S. (E Kilbride)

  Young, David (Bolton SE)

  Mitchell, Austin (G't Grimsby)

  Morris, Rt Hon J. (Aberavon)

  Tellers for the Ayes:

  Morrison, Hon C. (Devizes)

  Mr. James Hamilton and Mr. Allen McKay.

  Nellist, David

  NOES

  Adley, Robert

  Braine, Sir Bernard

  Aitken, Jonathan

  Brandon-Bravo, Martin

  Alexander, Richard

  Bright, Graham

  Alison, Rt Hon Michael

  Brinton, Tim

  Amery, Rt Hon Julian

  Brittan, Rt Hon Leon

  Ancram, Michael

  Brown, M. (Brigg & Cl'thpes)

  Arnold, Tom

  Browne, John

  Ashby, David

  Bruinvels, Peter

  Atkins, Robert (South Ribble)

  Bryan, Sir Paul

  Atkinson, David (B'm'th E)

  Buck, Sir Antony

  Baker, Nicholas (N Dorset)

  Budgen, Nick

  Baldry, Anthony

  Burt, Alistair

  Banks, Robert (Harrogate)

  Butcher, John

  Bendali, Vivian

  Butterfiil, John

  Bennett, Sir Frederic (T'bay)

  Carlisle, John (N Luton)

  Best, Keith

  Carlisle, Kenneth (Lincoln)

  Bevan, David Gilroy

  Carttiss, Michael

  Biffen, Rt Hon John

  Chalker, Mrs Lynda

  Biggs-Davison, Sir John

  Chapman, Sydney

  Bonsor, Sir Nicholas

  Chope, Christopher

  Bottomley, Peter

  Churchill, W. S.

  Bowden, Gerald (Dulwich)

  Clark, Dr Michael (Rochford)

  Boyson, Dr Rhodes

  Clark, Sir W. (Croydon S)

  202

  Clarke, Rt Hon K. (Rushcliffe)

  Howell, Rt Hon D. (G'ldford)

  Clegg, Sir Walter

  Howell, Ralph (N Norfolk)

  Cockeram, Eric

  Hubbard-Miles, Peter

  Colvin, Michael

  Hunt, David (Wirral)

  Cope, John

  Hunt, John (Ravensbourne)

  Corrie, John

  Hunter, Andrew

  Couchman, James

  Hurd, Rt Hon Douglas

  Cranborne, Viscount

  Irving, Charles

  Currie, Mrs Edwina

  Jenkin, Rt Hon Patrick

  Dickens, Geoffrey

  Johnson-Smith, Sir Geoffrey

  Dicks, Terry

  Jones, Gwilym (Cardiff N)

  Dorrell, Stephen

  Jones, Robert (W Herts)

  Douglas-Hamilton, Lord J.

  Joseph, Rt Hon Sir Keith

  Dover, Den

  Kershaw, Sir Anthony

  du Cann, Rt Hon Edward

  King, Roger (B'ham N'field)

  Dunn, Robert

  King, Rt Hon Tom

  Durant, Tony

  Knight, Gregory (Derby N)

  Eggar, Tim

  Knight, Mrs Jill (Edgbaston)

  Emery, Sir Peter

  Knowles, Michael

  Evennett, David

  Lamont, Norman

  Eyre, Sir Reginald

  Lang, Ian

  Fallon, Michael

  Latham, Michael

  Farr, John

  Lawler, Geoffrey

  Favell, Anthony

  Lawrence, Ivan

  Fenner, Mrs Peggy

  Lawson, Rt Hon Nigel

  Finsberg, Sir Geoffrey

  Leigh, Edward (Gainsbor'gh)

  Fletcher, Alexander

  Lennox-Boyd, Hon Mark

  Fookes, Miss Janet

  Lester, Jim

  Forman, Nigel

  Lilley, Peter

  Forsyth, Michael (Stirling)

  Lloyd, Ian (Havant)

  Fowler, Rt Hon Norman

  Lloyd, Peter, (Fareham)

  Fox, Marcus

  Lyell, Nicholas

  Fraser, Peter (Angus East)

  McCrindle, Robert

  Freeman, Roger

  McCurley, Mrs Anna

  Fry, Peter

  Macfarlane, Neil

  Gale, Roger

  MacKay, Andrew (Berkshire)

  Galley, Roy

  MacKay, John (Argyll & Bute)

  Gardiner, George (Reigate)

  Maclean, David John.

  Gardner, Sir Edward (Fylde)

  McQuarrie, Albert

  Garel-Jones, Tristan

  Major, John

  Gilmour, Rt Hon Sir Ian

  Malins, Humfrey

  Glyn, Dr Alan

  Malone, Gerald

  Goodlad, Alastair

  Marland, Paul

  Gorst, John

  Marlow, Antony

  Gow, Ian

  Maude, Hon Francis

  Gower, Sir Raymond

  Mawhinney, Dr Brian

  Grant, Sir Anthony

  Maxwell-Hyslop, Robin

  Greenway, Harry

  Mayhew, Sir Patrick

  Gregory, Conal

  Mellor, David

  Griffiths, E. (B'y St Edm'ds)

  Merchant, Piers

  Griffiths, Peter (Portsm'th N)

  Miller, Hal (B'grove)

  Grist, Ian

  Mills, Iain (Meriden)

  Ground, Patrick

  Mills, Sir Peter (West Devon)

  Grylis, Michael

  Miscampbell, Norman

  Gummer, John Selwyn

  Moate, Roger

  Hamilton, Neil (Tatton)

  Monro, Sir Hector

  Hampson, Dr Keith

  Montgomery, Fergus

  Hanley, Jeremy

  Morrison, Hon P. (Chester)

  Hannam,John

  Mudd, David

  Harvey, Robert

  Murphy, Christopher

  Haselhurst, Alan

  Neale, Gerrard

  Havers, Rt Hon Sir Michael

  Nelson, Anthony

  Hawkins, Sir Paul (SW N'folk)

  Neubert, Michael

  Hawksley, Warren

  Newton, Tony

  Hayhoe, Barney

  Nicholls, Patrick

  Hayward, Robert

  Norris, Steven

  Heathcoat-Amory, David

  Onslow, Cranley

  Heddle, John

  Oppenheim, Philip

  Henderson, Barry

  Oppenheim, Rt Hon Mrs S.

  Hickmet, Richard

  Osborn, Sir John

  Higgins, Rt Hon Terence L.

  Ottaway, Richard

  Hill, James

  Page, John (Harrow W)

  Hind, Kenneth

  Page, Richard (Herts SW)

  Hirst, Michael

  Parris, Matthew

  Holland, Sir Philip (Gedling)

  Patten, John (Oxford)

  Holt, Richard

  Pattie, Geoffrey

  Hooson, Tom

  Pawsey, James

  Hordern, Peter

  Peacock, Mrs Elizabeth

  Howard, Michael

  Pink, R. Bonner

  Howarth, Gerald (Cannock)

  Pollock, Alexander

  203

  Porter, Barry

  Tapsell, Peter

  Powell, William (Corby)

  Taylor, Teddy (S'end E)

  Powley, John

  Temple-Morris, Peter

  Price, Sir David

  Terlezki, Stefan

  Proctor, K. Harvey

  Thatcher, Rt Hon Mrs M.

  Rathbone, Tim

  Thomas, Rt Hon Peter

  Rees, Rt Hon Peter (Dover)

  Thompson, Donald (Calder V)

  Renton, Tim

  Thompson, Patrick (N'ich N)

  Rhodes James, Robert

  Thornton, Malcolm

  Ridley, Rt Hon Nicholas

  Thurnham, Peter

  Ridsdale, Sir Julian

  Townend, John (Bridlington)

  Roberts, Wyn (Conwy)

  Townsend, Cyril D. (B'heath)

  Robinson, Mark (N'port W)

  Tracey, Richard

  Roe, Mrs Marion

  Trotter, Neville

  Rossi, Sir Hugh

  van Straubenzee, Sir W.

  Rost, Peter

  Vaughan, Sir Gerard

  Rumbold, Mrs Angela

  Waddington, David

  Ryder, Richard

  Wakeham, Rt Hon John

  Sackville, Hon Thomas

  Waldegrave, Hon William

  Sainsbury, Hon Timothy

  Walker, Bill (T'side N)

  St. John-Stevas, Rt Hon N.

  Waller, Gary

  Sayeed, Jonathan

  Walters, Dennis

  Shaw, Sir Michael (Scarb')

  Ward, John

  Shelton, William (Streatham)

  Wardle, C. (Bexhill)

  Shepherd, Colin (Hereford)

  Warren, Kenneth

  Shepherd, Richard (Aldhdge)

  Watson, John

  Silvester, Fred

  Watts, John

  Sims, Roger

  Wells, Bowen (Hertford)

  Skeet, T. H. H.

  Wells, John (Maidstone)

  Smith, Sir Dudley (Warwick)

  Wheeler, John

  Smith, Tim (Beaconsfield)

  Whitfield, John

  Soames, Hon Nicholas

  Whitney, Raymond

  Spencer, Derek

  Wilkinson, John

  Spicer, Michael (S Worcs)

  Winterton, Mrs Ann

  Stanbrook, Ivor

  Winterton, Nicholas

  Steen, Anthony

  Wolfson, Mark

  Stern, Michael

  Wood, Timothy

  Stevens, Lewis (Nuneaton)

  Woodcock, Michael

  Stevens, Martin (Fulham)

  Young, Sir George (Acton)

  Stewart, Allan (Eastwood)

  Younger, Rt Hon George

  Stewart, Andrew (Sherwood)

  Stewart, Ian (N Hertf'dshire)

  Tellers for the Noes:

  Stokes, John

  Mr. Carol Mather and Mr. Robert Boscawen.

  Stradling Thomas, J.

  Sumberg, David

  Question accordingly negatived.

Clause 1

  POWER TO PRESCRIBE MAXIMUM RATES AND PRECEPTS
  Mr. Charles Morrison: I beg to move amendment No. 25, in page 1, line 12, at end insert—
  '(lA) For the purpose of this part of this Act, the Secretary of State shall not designate more than twenty authorities in any financial year.'
  I did not speak on Second Reading, much as I should have liked to do so, because I was not fortunate enough to catch the eye of the Chair. Nor did I serve on the Committee and, therefore, this is the first occasion on which I shall make a speech about the Bill.
  By way of introduction to the amendment I shall make my attitude to the Bill entirely clear: I am totally opposed to it. It centralises power. That is normally contrary to Tory philosophy, which believes in the diffusion of power. By centralising power, the Bill undermines the balance between central Government and local government, which, let it not be forgotten, has stood the Tory party in good stead, especially when it has been in opposition and has had to rely on Tory-controlled local authorities to stand out against the excesses of Socialism.
  The Bill infers that the man in Whitehall knows best. That has never been a Tory principle and is damaging to
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  local democracy. The Bill gives almost unlimited power to the Secretary of State over all local authorities and, conversely, whenever those powers are exercised, central Government will take the blame for inadequate services. Thus, the electoral consequences are obvious.
  If, on the other hand, the Government do not use their powers under the Bill, should it be enacted, they will be blamed for the rate demand, be it high or low, responsible or irresponsible. None of us should forget that there is not much selectivity by those who complain about rates; many are simply against them. That being so, many will be totally disappointed by the Bill.
  Unless the general powers are used—my right hon. Friend the Secretary of State said that that was unlikely —most rate powers will remain totally unaffected by the Bill. Therefore, the Bill raises political expectations which it will never achieve. That is dangerous, and the scope for a political backlash is considerable.
  Be that as it may, the House gave the Bill a Second Reading, and we are now trying to improve it. Part I provides for the selective limitation of rates. The Bill should live up to its intentions more precisely; hence my amendment. The amendment states that no more than 20 local authorities should be designated in any one year. On Second Reading the Secretary of State said that he would designate between 12 and 20 local authorities in any one year. Thus, the amendment specifies his upper limit and incorporates the Government's stated intention.
  In addition, it is worth remembering that the Secretary of State said that 75 per cent. of the overspend in 1983–84 could be laid at the door of 16 extravagant local authorities. He may say that the amendment is unnecessary as he will not go above 20 local authorities, and that is doubtless his intention, but his successors may feel less inhibited by his verbal undertaking.
  Furthermore, in the past powers have tended to be used way beyond what was originally envisaged — for example, the experience following the introduction of targets. With regard to targets the 1980–81 rate support grant order records:
  "It is intended that the power should be exercised—if at all —in such a way as to affect only a very small minority of authorities."
  By 1983–84 more than 160 authorities suffered grant penalties for exceeding their targets. The number may be even higher in 1984–85. It is important that the selective provisions in the Bill are clearly limited and visibly written into the Bill if the escalation seen in the past is not to be repeated.
  Amendment No. 25 is a paving amendment and precedes amendment No. 31, which we shall reach tomorrow afternoon. It aims to remove the powers of general limitations of rates. Whatever hon. Members may think in support of the selective powers—I appreciate that a number of my right hon. and hon. Friends have sympathy for them—many hon. Members are opposed to the general powers. If the general power clauses, clauses 9 to 12, were removed from the Bill, nothing would prevent clause 1 from being applied as though it provided a general power. It is called selective, but in practice it could be, used generally. Thus, clause 1 must be limited in its scope. That is what amendment No. 25 seeks to do.
  Mr. Straw: I support the amendment. As the hon. Member for Devizes (Mr. Morrison) so eloquently explained, for all hon. Members concerned about the

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  general powers it is an important probing amendment to discover the Government's real intentions with regard to the specific powers.
  As the Bill is drafted, it would be open to the Secretary of State to use the selective powers to rate-cap almost every authority which exceeds the £10 million floor of grant-related expenditure. If he wanted a fig-leaf of selectivity, he could use various formulae to ensure that 10 authorities or so escape. None the less, under part I a selective scheme could lawfully rate-cap all the metropolitan district authorities, most of the London boroughs and most of the shire counties, including a large number of Conservative-controlled shire counties and metropolitan boroughs, as well as a few shire districts, leaving only the smaller shire districts excluded by clause 2(2)(a) and certain authorities, probably all Conservative-controlled, with expenditure so low that even the capricious and accidental effects of the Government's proposals would be unlikely to catch them. Experience shows, however, that a number of the 160 authorities to which the hon. Member for Devizes referred have been low spenders on any basis. Indeed, that is the basis of their complaints.
  The amendment is unusual in that a similar proposal was the subject of extensive discussion in Committee. We are grateful to the Chair for recognising that its importance is such that it should be reconsidered on the Floor of the House. An extensive debate took place on 21 February on an amendment couched in similar terms. We sought to pin the Secretary of State down on two related questions. First, putting it crudely, was he prepared to put his signature where his mouth was and commit himself in law in a binding fashion to the undertakings that he gave to the House that he intended that only between 12 and 20 authorities should be subject to rate capping?
  That is important, not because we do not believe the Secretary of State, or indeed any Minister speaking from the Dispatch Box—the right hon. Gentleman is a man of honour and we have come to recognise his many qualities in Committee—but because he is Secretary of State only for the time being. Even if the Government continue for their full term, it is highly unlikely that he will be Secretary of State for the Environment in 1987 or 1988. There are undoubtedly higher things in store for him. Given the cock-up that will occur when this measure comes into operation, I advise him to get out from under in double quick time and to find a nice safe haven, having served his term at the coal face as he surely has during the past year.
  Previous Secretaries of State have made worthy and well-intentioned commitments which have then been stood on their heads by the subsequent actions of other Ministers. Conservative Members should weigh carefully the words of the present Secretary of State for Employment, formerly the Minister for Local Government and Environmental Services, the right hon. Member for Bridgwater (Mr. King) in March and April 1980 when he recommended the system of grant-related expenditure assessments. Referring to the needs assessment, he said:
  "It is not suggested that it prescribes a specific level to which an authority ought to spend." — [Official Report, Standing Committee D, 1 April 1980; c. 941.]
  On 27 March 1980 the right hon. Gentleman used the words which are now becoming notorious but which bear
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  repeating because it is important that political parties as well as individual politicians should be consistent. He said:
  "My Department will not be in the business of saying how much each authority should spend, where it should or should not make cuts or on what it should spend money. I have tried to make clear that that is a matter for local authorities…We have specifically rejected that approach. We have said that our concern is the distribution of public money."
  That is an interesting use of the phrase "public money", as it clearly refers not to the totality of locally raised expenditure and central Government expenditure, but solely to the latter.
  The right hon. Gentleman continued:
  "Beyond that I am powerless to do anything about fixing the level of rates. I have made certain comments on my view, as I did in the House yesterday. Local authorities are autonomous. They fix their rate systems. I can comment and urge the need for economy. I have some influence over the distribution of public funds"—
  the term is again used to denote central Government expenditure only—
  "but the ultimate decision on rating and on the volume of expenditure of local authorities is a matter for the councillors themselves" — [Official Report, Standing Committee D, 27 March 1980; c. 840–41.]
  Mr. Beaumont-Dark: A very good speech.
  Mr. Straw: Yes, it was, and if the Government had been consistent in that approach they would not be in the present mess and they would not be open to the charge from Conservative Members, to whom I must defer in this respect, of producing a Bill that is contrary to the principles of Toryism and takes the Government and the country down an alien, authoritarian road which the Government and their party will come greatly to regret.
  8.15 pm
  Those statements by the former Minister have been turned on their head because the GREA has become a specific level to which an authority ought to spend. Even worse, although the Under-Secretary of State, the hon. Member for Bristol, West (Mr. Waldegrave), claimed on Second Reading that GREAs would be just one of the criteria used by the Secretary of State to determine the rate-capping principles, the Secretary of State himself said subsequently in Committee that it was "the central criterion". Solemn undertakings given to the House by one Minister have been turned on their heads by another Minister in the same Government of the same party who simply happens to have a different body.
  Mr. Beaumont-Dark: Or a different brief.
  Mr. Straw: Or a different edict or instruction. In a revealing slip of the tongue, if such it was, at Prime Minister's Question Time today the Prime Minister said that the Foreign Secretary had been "instructed" by her—not, I suspect, for the first time or indeed for the last time—to get a certain deal and that if he failed to do so——
  Mr. Tony Banks: Off with his head!
  Mr. Straw: Yes, and it will no doubt happen at one of those 3 am meetings at No. 10. We are told that the prime Minister and the Foreign Secretary do not sleep before 4 am.
  Mr. Banks: And preferably not together.
  Mr. Straw: I am sure that they do not sleep together. [HON. MEMBERS Order!"] The suggestion came from the Conservative side. [HON. MEMBERS No."]
  Mr. Banks: I threw my voice.
  Mr. Straw: I apologise. I am totally deaf in one ear, so I sometimes get the direction of comments wrong—[Interruption.] If the Secretary of State wishes to pursue a private argument with my hon. Friend the Member for Newham, North-West (Mr. Banks) I shall not interfere.
  As the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) said, probably as a result of an instruction or a change in the brief, solemn commitments given to the House in 1980 have been turned on their heads. Had the then Minister said in 1980 that GREAs were not just a method of distributing the rate support grant but were to be used in the future as a benchmark to determine the overall expenditure level for every authority, the mood of the House at that time would have been to reject the Bill as utterly unacceptable. That is the importance of the commitment given by the then Minister.
  In Committee the Secretary of State said:
  "I am happy to reiterate that we aim at a figure of between 12 and 20 authorities for capping. That is an order of magnitude figure. It would be foolish in the extreme to accept an amendment which precluded us from adopting perfectly sensible, straightforward and coherent principles if we needed to cap 21 or 22 authorities."—[Official Report, Standing Committee G, 21 February 1984; c. 575.]
  That is understandable, but there has to be a limit somewhere, otherwise we end up by turning the selective scheme into a general scheme. This is the amendment of the hon. Member for Devizes and I hope that I am not putting words into his mouth if I say that he might find it acceptable if the Secretary of State said, not 20, but 25, because that is an order of magnitude, and then the Secretary of State has some leeway.
  Mr. John Fraser: That would include Lambeth.
  Mr. Straw: I am a ratepayer in Lambeth and I happily pay my rates. I know that a growing number of Conservative Members pay their rates in Lambeth. The number moving into that fine borough increases every day.
  Mr. Powley: Will the hon. Gentleman accept that there are some people who have recently moved into Lambeth, as I have, who deplore the level of rates that we have to pay?
  Mr. Straw: The hon. Gentleman must live in a very large house indeed. This is not the time to ask why he does not live in Lord North street, or elsewhere in Westminster, but I suspect that the level of rates may have something to do with it.
  That is the first point, and it is a question of orders of magnitude. If this is a selective scheme, and if the Secretary of State is to be true to his word that it should be limited to between 12 and 20, let us call it 25, or 24, then we will know that this is a selective scheme. However much we may object to it, its purpose will be clear.
  The second question which arises, and which we also debated at some length in Committee, is, as it were, the joker and the twist in the Secretary of State's argument. If this scheme is to be limited to 20 authorities, what are the savings to be? I repeat, because it is a central point and is worth repeating, that, try as we did in Committee to discover from the Secretary of State how he expected to
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  make the savings he was being told by the Treasury to make within the context of a selective scheme, we were unable to arrive at an agreement on the figures.
  The Secretary of State told us that the gross savings that he would be looking for under a selective scheme would be about £300 million. That may be the case, but that is gross and it is way below the figure which the Chancellor of the Exchequer is looking for by way of savings. I find it impossible to imagine that the Secretary of State would be able to achieve the rest of the savings simply by further manipulating the rate support grant proportion downwards and making the target ever harsher. If he does that, he and his hon. Friend the Member for Bristol, West will have to renege on another promise made in connection with the rate support grant —the categorical assurance that the shire counties, which have been so badly done by this year, would be helped next year. It is simply not possible to square these circles. To use another analogy, if we push one end, something else pops out of the other.
  The figure of £300 million is a gross saving. By the time we have taken account, first, of the short-term loss of tax —since that amount will in the main be spent on wages and salaries of local government employees and if they are made redundant or there is natural wastage there will be less throw-back by way of income tax and indirect taxes to the Treasury—and, secondly, of the fact that if the Government succeed in cutting down the expenditure of individual authorities their entitlement to rate support grant will go up, the £300 million will certainly be down to £200 million, and maybe even less.
  We had an example of this last Tuesday during the debate on the second supplementary report on the rate support grant for 1983–84, when we discussed the Government's failure to bring forward the report for 1982–83. As a result of the Greater London council spending less by £150 million than it anticipated, it is to receive a very substantial increase in its rate support grant. Furthermore, a large number of both Labour and Conservative authorities, including Labour Lancashire and, no doubt, Conservative Wiltshire, are to lose part of their rate support grant. Nothing illustrates better the way in which these mechanisms will operate. In that way and in other ways the Secretary of State's gross figure will be reduced to a net figure of not much more than £200 million, and probably a good deal less.
  This will be even more inevitable if the Secretary of State remains true to the undertaking that he gave to the Committee and does not start with a bottom-line figure This, as I explained in the debate earlier today, follows what he said in Committee at column 591—that there is no question of criteria being chosen in relation to a predetermined requirement for savings. I do riot understand how the Secretary of State came to make that statement. given that time and again he and his colleague, the Under-Secretary, say that the whole purpose of the Bill is to secure public expenditure savings.
  I wonder, too, what the Treasury thinks about it, because I am sure that the Treasury already has a very clear pre-determined idea of the amount that it expects the Secretary of State to save, and it will be handing him a chitty with the amount, which I dare say will say not £200 million, but about £1,500 million, and he will be required to produce it, unless the balance of forces within the Cabinet is not what we have been led to believe and the Secretary of State, not the Prime Minister and the

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  Chancellor, really has all the votes. If that is true, I take my hat off to the Secretary of State, but what is the purpose of the Bill, except as a charade?
  Mr. Tony Banks: Will my hon. Friend accept that, of this often-quoted £177 million variance in the GLC's budgeting for 1982–83, about two thirds comes from higher-than-expected receipts both from income which the council derives and from Government grants?
  Mr. Straw: I would, of course, accept that, and I think it is also important to point out that the decision of the Greater London council to budget at a level higher than its expenditure was the result not of irresponsibility, as the Secretary of State would claim, but of the GLC's being unable to anticipate the outturn because of all kinds of uncertainties—most of which have been placed in their way by the Government — the anticipation of higher interest rates, the level of fare subsidies, and so on. It was not anticipated that fare subsidies would produce such a high economic return as they did. The GLC would have been criticised even more if it had budgeted for less than it eventually spent.
  This is a crucial amendment which tests the good faith not of the Secretary of State—we do not challenge that —but of the Government and their readiness to back what they say with legislation. It is a principle of the rule of law that what the Secretary of State says in the House cannot be tested in the courts and cannot even be adduced in evidence. Since the Secretary of State claims to subscribe so faithfully to the rule of law, we want his notions, his principles, to be translated into law. If this is a selective scheme, let it be a selective scheme. We give our support to the amendment.
  Mr. Powley: I wish to urge my right hon. Friend the Minister to reject this amendment, for reasons which I hope to put forward in the next few moments, but also for many more reasons of which I am sure he will think.
  With respect, I say to my hon. Friend the Member for Devizes (Mr. Morrison), who moved the amendment, that I suspect that I might have agreed with it if it had been moved in similar circumstances some 20 years ago, when the situation in local government was rather different from what it is today. It is because of those different circumstances that I oppose the amendment.
  I have had experience of working through three decades of local government during the 1960s, 1970s and 1980s. A great many Labour local authority members come from a different breed now. I know that looking back is easy and that past events look better when viewed in retrospect, but I am taking that into account. During the 1960s and 1970s, Conservative members of local councils had a great deal of respect for some of the distinguished Labour members with whom we had the honour to serve. We had political differences, but those Labour members approached local government with a different attitude from that now taken. Many Labour members on the council on which I served actually had the guts to tell those who wanted to spend more and more—their own supporters—that they could not afford to do that. They said that the rate level should be kept in moderation, and they earned a great deal of respect for that attitude.
  Mr. Nicholas Brown: I strongly agree with the hon. Gentleman's remarks about
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  the great deal of respect for Labour members of local authorities. But his argument about the new breed of Labour councillors is hardly an argument against their election. If they are the choice of the electors, surely that is what matters.
  Mr. Powley: Had the hon. Gentleman allowed me to continue with my speech, his intervention would not have been necessary. I hope that he will appreciate the answer——
  Mr. Piers Merchant: I hope that when my hon. Friend answers the hon. Member for Newcastle upon Tyne, East (Mr. Brown) he will remember that the Labour group on the Newcastle city council has recently expelled four of its members.
  Mr. Powley: Indeed, my hon. Friend's comments form part of the argument, and I am grateful to him.
  Labour members in the 1960s and 1970s told their supporters that they could not have certain things, even though it was not pleasant to do so. But since reorganisation in 1974, those elder statesmen have been replaced by a different type of councillor. I concede that they have been elected, but conditions have changed. They appear to have the idea that they were elected only to spend as much money as possible. Committee chairmen vie with each other——
  Mr. Jack Thompson: The hon. Gentleman is falling into the trap of talking only about authorities in his area. My county is currently Labour-controlled, but 15 years ago it was Conservative-controlled. The difference between the two groups is minimal. The council consists of responsible councillors of all political shades—including a Liberal influence. That council certainly does not bear out the remarks of the hon. Gentleman and his hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Merchant).
  Mr. Powley: The hon. Gentleman is entitled to his opinion, and I am sure that he respects our opinions as people who have served in local government.
  There is a new breed of Labour councillors, and a substantial number of them are prepared to defy the Government. It appears to be the usual practice that when there is a Labour Government there is an upsurge in Conservative councillors, and vice versa. The previous Labour Government got the country into severe financial difficulties. The Conservative-controlled councils —some of them were Conservative-controlled for the first time in many years—realised the general decline in the country's economic position, and their management reflected that. When the Labour Government said that there had to be economies and cuts in housing, education and the National Health Service, Conservative councils generally went along with that. They accepted their responsibility, tried to contain their expenditure—many of my hon. Friends were leaders of local councils at that time—and actually reduced the rate levels. I am talking about a real reduction that did not take inflation into account. Certainly in Cambridgeshire we managed to achieve a reduction in the rate level from 14p to 13p and then to 12p—despite 20 per cent. inflation. We found it possible to make those economies.
  Mr. Cormack: I appreciate my hon. Friend's comments, but they are not entirely relevant to the Bill.

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  One of the most vehement critics of the Bill is our right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym).
  Mr. Powley: Our right hon. Friend is entitled to his view.
  Where we once had a Labour Government but a majority of Conservative-controlled councils, we now have a Conservative Government with a significant number of Labour-controlled councils. Britain still has economic problems and needs to be put on a sound economic footing. But the Labour-controlled councils are prepared to defy the Government and fly in the face of economic reality. They will not take any notice of Britain's economic problems, which we inherited from the Labour Government, or the Conservative Government's remedies for them.
  Mr. Nicholas Brown: The Bill goes well beyond the expenditure argument. The hon. Gentleman referred to Labour councillors who were prepared to defy the Government. I remind him that many members of the Conservative party—many of them in the House—are prepared to defy the Government on this Bill.
  Mr. Powley: A vote in the House tonight or tomorrow is entirely different from defying the law of the land when a Bill has become law. I am sure that the hon. Gentleman accepts that. We have this new breed, and those people are prepared to defy the Government's exhortations. During the past four years, the Government have tried by persuasion to get local authorities to accept the realities of life, to cut their expenditure and to make economies. It is clear that a substantial number of Labour-controlled local authorities would deliberately gang up on the Government. With an amendment to restrict the number of local authorities to 20—the Secretary of State issued a list of 33 for this financial year — a substantial number of other local authorities would blatantly ignore the financial realities of life and go on spending without any regard for the cost of what they do. Liverpool is a prime example, but there are many others. If there were a limitation of 20, a substantial number would follow those 20 and exercise no restrictions.
  I hand it to Labour-controlled local authorities that they know how to get together. I wish the Conservatives did as well. The Conservative group on the Norwich city council and the Norfolk county council support the Rates Bill. My two local authorities have seen the wisdom of what the Government are doing, and I am pleased to have their support.
  The point is that Labour-controlled authorities get together. It is no coincidence that we have umpteen nuclear-free zones. I am sure that the instruction went out from Walworth road saying, "You are all to become nuclear-free zones", and they all passed resolutions to become nuclear-free zones. It was well organised.
  Mr. Nicholas Brown rose——
  Mr. Powley: No, I have given way on a number of occasions, and I really must get on.
  Those authorities had their instructions. I imagine that a number of Labour local authorities passed resolutions deploring the cuts in the National Health Service. Certainly I received a resolution from Norwich city council to that effect, and I am sure that a number of other
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  Labour local authorities passed the same resolution, probably word for word. They are well organised. I have no doubt that if there were a limitation of 20 authorities to be rate capped, their organisation, to which I again pay credit, would so engineer the situation that umpteen other Labour-controlled local authorities would exceed their expenditure, and the Government would then be in a far worse position.
  I hope that the Bill will bring home to local authorities the fact that they have to accept financial responsibilities. It has been demonstrated that some local authorities have accepted their responsibilities and can work within the financial guidelines. If so, the necessity for this legislation disappears out of the window. We shall not have 20 local authorities to which it will apply; we shall have none at all. The country will be in a far better position if the Bill achieves that result in local government.
  Mr. Tony Banks: I am grateful to the hon. Member for Norwich, South, (Mr. Powley) for explaining the reasoning of an important section of his party. Perhaps he would classify me as one of the new breed of councillors. I am a member of the Greater London council, and I should point out to him, in case he is classifying me as one of the new breed, that I have served continuously on a local authority for the past 14 years. I do not know whether that fits his interpretation of "new", but I am perhaps not as new in local government as he might suggest.
  8.45 pm
  The hon. Gentleman spelt out something that his right hon. Friend the Member for Chingford (Mr. Tebbit) also spelt out clearly in a speech that he made at Caxton hall the other evening. It went on to the broader issue of the restructuring of local government. Perhaps I may quote what the right hon. Gentleman said:
  "the Labour Party is the Party of division. In its present form it represents a threat to the democratic values and institutions on which our parliamentary system is based. The Greater London Council is typical of this new modern, divisive version of socialism. It must be defeated. So we shall abolish the Greater London Council."
  That is what the right hon. Member for Chingford said, and I have no reason to disbelieve him. The GLC is being abolished because it is controlled by a party with which Conservative Members fundamentally disagree. The hon. Member for Norwich, South says that because certain people, of whom he does not approve, have been elected —I remind him that, new breed or not, they were all elected through the ballot box—and he does not agree with them, therefore this draconian measure is being introduced. It is a baby-out-with-the-bathwater form of legislation, and it is clearly unacceptable to both sides of the House in important respects.
  Mr. Chope: Why was it, when the new GLC was elected, that one of the first things it did was to reduce the proportion of Conservatives on the committees to well below the pro-rata representation of a minority party, which had existed before the Left-wing Labour GLC took over? Was not that an example of the new Socialist so-called democracy in practice?
  Mr. Banks: That was hardly a question. It was more a statement of the hon. Gentleman's bigotry. It is normal practice for any administration to wish to secure its own business, and it will take steps to ensure that its business is properly administered and carried out. So what the Labour GLC did was nothing out of the ordinary, bearing

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  in mind the fact that it has been done by Conservative and Labour administrations for many years. There was nothing extraordinary about that.
  The hon. Member for Norwich, South went on to say that not only were these local authorities controlled by this new breed, but that they were daring to defy the Government. One reason why our democracy, despite the attacks made on it, manages to hold up reasonably well is that there are checks and balances between local government and central Government. The hon. Gentleman came out with the psephological fact that there is an inverse correlation between the party that is elected at a local election and the party of the Government in power. That has always been so, and long may it remain so. At local elections, people tend to see the Government of the day and vote the opposite way. One has only to look at recent elections to see that that inverse correlation holds true. So I do not see why local authorities should obey the wishes of central Government, because as soon as that happens—it will happen now, as a result of this Bill—there will be a form of centralisation that is bad for democracy and, in my view, bad for local government.
  I am glad that the amendment has a certain amount of cross-Chamber support. There has always been conflict between central and local government and, as I said earlier, that is a mainstay of the democratic process. I am sure that the hon. Member for Norwich, South would approve of Herbert Morrison, that well known former Labour Member who took a very muscular approach towards central government.
  There would have been no Festival of Britain, which everyone acclaims, if it had not been for Morrison deciding to defy the Government of the day. There would have been no new Waterloo bridge if it had not been for him. I am sure that the hon. Member for Norwich, South would regard Herbert Morrison as the archetypal Labour Member. In fact, if the hon. Member had been around at the time, Herbert Morrison would have been denounced by him as someone who spat in the face of Government.
  Mr. Beaumont-Dark: Herbert Morrison was, at the time of which the hon. Gentleman is speaking, Home Secretary in the then Labour Government and was certainly not leading the then LCC. Is he suggesting that, whenever somebody leaves local government, that person is still in local government? What is the logic of his argument?
  Mr. Banks: As the hon. Member for Norwich, South had been keen to speak of former Labour local government people, I was demonstrating that there had always been conflict between central and local government, and certainly that was the case between the old LCC and central Government. Herbert Morrison was able to straddle both places with the aplomb that few hon. Members could reveal today.
  If the Secretary of State wants us to take him at his word, he should accept the amendment. We have had experience in Committee and elsewhere of Secretaries of State saying, "Take my word that these powers will never be used." Bad legislation is based on the good intent of the Secretary of State of the day. The GLC—returning to that favourite creature of us all—ran foul of the Law Lords over the interpretation of the Transport (London) Act 1969. A reading of Hansard at the time of the passage
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  of that measure would have made it clear that the then Minister of Transport believed that the GLC had the powers that the Law Lords said it did not have. However, as we know, the Law Lords are not allowed to read Hansard in reaching a conclusion, and rightly so, I suppose.
  One can see the basic weakness in having the views and opinions of a Secretary of State subsumed in a piece of legislation. When that Secretary of State passes on to the great parliament in the sky or to another place, there is no one to read into the legislation what he thought when the legislation was going through.
  Therefore, all the assurances of the present Secretary of State, genuine and sincere though no doubt they are, are not worth the air that he uses to voice them nor the paper on which they are written. The right hon. Gentleman must convince us, and if the Bill will not affect more than 12 to 20 councils that should be written into the Bill. I doubt whether the right hon. Gentleman will accede to that cross-Chamber request because, returning to the question of the continual conflict between local and central Government, whichever party has been in control at the centre, it has always tried to curtail the powers of local government, and that goes as much for Labour as for Conservative Administrations. The Secretary of State is doing what Many Ministers in his position have wanted to do, which is strictly to curb the powers of local government, and the right hon. Gentleman has been able to use the advantage of what he regards as one or two high-spending local authorities to curb all local authorities.
  The right hon. Gentleman would be seen in a better
  light if he specified the local authorities he wishes to curb. Let him name, for example, the GLC, the ILEA, Islington council and a few others. I appreciate that it would be unusual to write their names into legislation, but at least the right hon. Gentleman should specify the numbers that he has in mind, because it should not be all local authorities.
  The right hon. Gentleman is sheltering behind what he sees as the high-spending record of the GLC and the ILEA to do what many Secretaries of State before him have only dreamt of doing, and that is to curb local government and to bring in a degree of centralisation which is anathema to democracy in Britain.
  Mr. Rippon: It is a sad fact of life that it is much easier to support a Government Bill and go through the Lobby if one does not know what Bill one is supporting. It is even easier if one has not listened to the arguments.
  Further to the remarks of my successor and hon. Friend the Member for Norwich, South (Mr. Powley), it may be that there is a new breed of Socialists. Perhaps there is a new breed of Conservatives also. In the days of Alderman Sir Arthur South, Norwich had a moderate and reasonable Socialist council. It had excellent relations with the Conservatives and it shared the various chairmanships, including that of lord mayor from time to time. It was all most amicable.
  It may be a little easier for a Conservative Member of Parliament to be elected there now. At any rate, there were not enough — boundary changes have made some difference — Conservative supporters in my time to secure my continuance as the hon. Member for Norwich, South, which I would have liked to have done. However, I am glad that my hon. Friend who now represents that

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  constituency is here. It may be that the electors of that constituency voted for him because they did not much like the new breed of Socialists.
  These are the sorts of decision that must be taken by local people. We cannot say, "The people we like shall be free but the people we do not like shall not be free." We cannot pick and choose freedoms. Local people must have the opportunity to make up their own minds.
  One can think of what happened in the 19th century at the time of local government reform. Professor Maitland said, in effect, "These new local authorities must be free, free if necessary to make mistakes on quite a big scale. In any event, they will normally be less serious than the mistakes which Governments make from time to time."
  It is nice to hear someone speak in favour of the Government. My hon. Friend spoke sincerely and well, but he must understand that nobody is saying that the Government should be defied. We do not have a system under which local authorities can do what they like unless it is expressly forbidden but a system under which local authorities can act only if they have the statutory power, and frequently a statutory duty goes with that statutory power. If a local authority abused its powers and defied the Government in the sense that it defied the statutes that the House has passed, most of us would have no sympathy with it. However, we have said time and again—I have said it as a Minister and as a Conservative Opposition spokeman on local government affairs — that local authorities are not bound by exhortation or circulars that do not have the force of law.
  Mr. Benyon: Will my right hon. and learned Friend make it clear that those of us who have grave reservations about the Bill are in no way condoning local councils breaking the law?
  9 pm
  Mr. Rippon: I entirely agree with my hon. Friend. I see no difficulty in supporting the principle of rate capping provided that the criteria are clear, we know what we are doing and we do not give unfettered discretion to the Secretary of State to pick and choose.
  It is possible to make out a case for selective rate capping. The Government have been extremely careful to make it clear from the quotations which have been given from the White Paper and the Secretary of State's speeches that they have in mind only a selective scheme that is intended to apply only to a small number of local authorities. The Secretary of State said in Committee that that number would be 12 to 20. It is a little premature for my hon. Friend to assume that the Secretary of State will not welcome an amendment such as this. I see no reason why he should not welcome it. I said 12 or 20, but it might be wise to go to 25.
  I see no reason why, if further powers are needed, the Secretary of State should not introduce fresh legislation. This is a rather draconian power. It means that when the Secretary of State rate caps a local authority he is going close to putting in commissioners. He has got to the point at which he will have to bear responsibility for any failure of the services that a local authority might have provided. If, for example, there were pollution of a river and the local authority had to go to court to face an injunction, its defence would be, "We cannot help it. It is the Secretary of State who has prevented us from carrying out our statutory duty." When the Secretary of State rate caps an
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  authority, he puts himself into the local authority's shoes and supersedes the decisions of a duly elected local authority.
  Mr. Cormack: Does my right hon. and learned Friend agree that some of the most unpleasant events on picket lines illustrate how necessary it is for local authorities to have flexibility in the amount of money that they spend on the police?
  Mr. Rippon: It has always been understood that local authorities must have discretion to determine local needs. It is for that that they raise rates, and for that they are responsible to the ratepalyers. We have had many arguments about the need to reform the structure of local government finance to make it fairer and to reduce the burden of rates. I should like such legislation. However, we are now discussing a draconian power of the Secretary of State to interfere in the discretion that is normally provided by statute for elected local authorities. It must be used carefully, with discretion and rarely.
  I think that 20 is not unreasonable and sufficient for the Secretary of State's purposes. If he says that he would accept 25, so be it. It would be wrong to provide a power that could be extended almost to the point of being a general power. There is no cause for complacency when we know that, during discussion on the Local Government Finance Act 1982, the same argument was advanced—only a few authorities were to be affected by targets. What was at first a handful has now increased to 160 or possibly even more.
  In those circumstances, I hope that the Secretary of State will be inclined seriously to consider accepting an amendment such as this or another in a similar form.
  Mr. Patrick Jenkin: I am tempted to be beguiled by the charms of my right hon. and learned Friend the Member for Hexham (Mr. Rippon) and of my hon. Friend the Member for Devizes (Mr. Morrison), but I have to say that I shall not be able to advise the House to accept the amendment. My right hon. and learned Friend the Member for Hexham said that no one is saying that the Government should be defied.
  Listening to the protestations of democratic probity that came from the hon. Member for Newham, North-West (Mr. Banks), I was reminded of the brief and sharp exchange that he and I had at the end of Question Time on 8 February. I said:
  "The House might be more impressed if, instead of asking that rather pointless question…the hon. Gentleman stood up and told us whether he supports Mr. Livingstone's demand that the Labour party should defy the law on rate-capping. Will he or will he not?
  Mr. Banks: Yes." —[0fficial Report, 8 February 1984; Vol. 53, c. 879.]
  The whole House heard him. My right hon. and learned Friend has said that no one is suggesting that the Government should be defied. I fear that he is sadly mistaken, because the hon. Member for Newham, North-West made his intentions perfectly clear.
  Mr. Rippon: With respect to my right hon. Friend, I was not suggesting that no one would ever defy the Government. I was merely saying that Conservative Members, who are deeply and bitterly opposed to the principles underlying the Bill, are not saying that if it became law it should be defied. We are saying that it should not become law.
  Mr. Jenkin: I understand my right hon. and learned Friend's view. I thought that at one point he was wavering in his opposition. He said that possibly a power of selective rate capping would be appropriate if the criteria and limitations were clear. I am grateful for that.
  Mr. Tony Banks rose——
  Mr. Jenkin: Does the hon. Gentleman wish to intervene?
  Mr. Banks: I am waiting for the right hon. Gentleman to finish his sentence.
  Mr. Jenkin: I have moved on from the hon. Gentleman, but I shall give way.
  Mr. Banks: I had deferred to older and more senior Members. I am grateful to the Secretary of State for allowing me to underline what I said in answer to his question. It was strange to have a Secretary of State ask a Back Bencher to reply to a question. I believe that bad laws should be defied. There is a long and honourable tradition of bad laws being defied. Had that not been the case, there would not have been votes for women or trade union rights, by which everyone now swears. Therefore, there is nothing strange in any hon. Member saying that he or she is prepared to defy a law and take the consequences.
  Mr. Jenkin: I am glad that I gave way to the hon. Gentleman. Having that put so clearly on the record by a Member of this legislature marks the hon. Gentleman's contribution to the debate. The hon. Gentleman will not be allowed to forget those words. He is elected to this House to help to make laws. To stand up in the House and demand that laws should be defied is to betray the very democratic principles about which he was speaking earlier.
  Mr. Straw: The right hon. Gentleman's criticism of my hon. Friend should not be allowed to pass, because this is an important point. How is what my hon. Friend said different from the Prime Minister's proposition that the laws to which we are bound by treaty under the European Communities Act should be defied by the Government?
  Mr. Jenkin: My right hon. Friend has made no such proposition. It is perfectly clear, at least to Conservative Members, that if any such proposition were ever to be made—and this is entirely hypothetical—it would be made in the entirely constitutional way of changing the law in this House. But perhaps we are straying from the amendment.
  Mr. Martin Flannery: Double standards.
  Mr. Jenkin: There is no question of double standards. I was somewhat surprised at the logic of the argument of my hon. Friend the Member for Devizes. He suggested that amendment No. 25 was a paving amendment for No. 31. Amendment No. 31, which I hope we shall discuss tomorrow, will, if carried, remove part II.
  At the same time, my hon. Friend argued that the danger of part I was that, although we have debated it on the assumption — perfectly properly, as it is the Government's policy — that it is a selective capping power, part H is a general power. If there were no part II, I have to ask my hon. Friends whether there would not then be every possible temptation on the Government to seek
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  to extend the use of part I, because there would be no alternative other than to come back to the House. If we have part II, which is the general scheme and which has properly built into it certain provisions—this has been acknowledged by hon. Members in Committee and on Report — and if part H is hedged about with parliamentary and other safeguards, that is the proper and democratic way to do this.
  Therefore, if the circumstances ever did arise—I do not want to anticipate tomorrow's debates—and a more general capping power would be needed, there is the procedure, and the opportunity is open to the Government to come back to the House of Commons and the House of Lords and explain the reasons and seek the necessary powers under clause 9.
  Mr. Cormack: Will my right hon. Friend accept that if his thesis has any validity it is better to limit the number to 20 or 25, as has been suggested? If it does not work, my right hon. Friend has a case for coming back to the House for a new Bill. Why tag on these general powers and have an open-ended number without any restrictions?
  Mr. Jenkin: I was perhaps led astray by the argument of my hon. Friend the Member for Devizes and was anticipating tomorrow's debate. I shall be happy to answer the question asked by my hon. Friend the Member for Staffordshire, South (Mr. Cormack) if we get there. Suffice it to say that we are debating part I on this amendment, No. 25, which would limit the numbers. If there were no part II there would be a stronger case for putting a limit on, because the pressures on the Government would be to seek to achieve what must be a Government's perfectly proper objectives of containment of public expenditure and the protection of ratepayers by going further under part I than it is our intention to do. That part of my hon. Friend's argument does not stand up.
  Mr. Benyon: My right hon. Friend's speech anticipates the questions that I would have asked him if I had caught Mr. Speaker's eye. Is it really true, as is stated in the brief that has been prepared for us by three local authority associations, that there is no limit whatever to the number of authorities to be designated? If it were to be 50 or 100, what would happen on the Floor of the House?
  Mr. Jenkin: My hon. Friend anticipates my arguments, because I am going on to explain to the House how part I limits the power. It is not just open discretion. I made it clear on Second Reading and at considerable length in Committee, when we debated the matter on a number of different amendments, and I am prepared to make it clear again now. Under part I we are concerned to curb the spending and rating of the small minority of councils which have ignored all our efforts over the past four years at influence and persuasion. The Bill provides for the selection of those authorities according to general principles and we shall eventually choose the criteria for those principles in the light of the most up-to-date information. Again that is provided for in the Bill, and it will be in the 1984–85 budgets of local authorities. As that information becomes available, so we shall be able to devise our principles.
  9.15 pm
  The Bill contains a number of safeguards. If an authority is selected, it will be one which is spending excessively. We have said that in present circumstances

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  we consider that the number of authorities which would fall within that description would be between 12 and 20. There are the exemptions that no authority spending below GRE and no authority spending below £10 million a year, a figure which can be increased by order, could be selected. The majority of authorities need have no worry about selective limitation.
  My hon. Friend the Member for Milton Keynes (Mr. Benyon) was not a member of the Standing Committee, but he will be aware of the debates which took place on the table which I made available to hon. Members and the press in which were set out the sorts of criteria which are in our minds to use when we come to make the selection. I spelt out in the table about 11 circumstances, or combinations of circumstances, which might be used. I shall not read them all out, but I shall give one or two examples. One example is an authority whose total expenditure is 20 per cent. over GRE and 2 per cent. over its target. An authority in another group would be one with total expenditure that is 20 per cent. above GRE and whose current expenditure has increased by more than 80 per cent. since 1978–79. A third example is an authority whose total expenditure is 20 per cent. above GRE and which has added 20 per cent. to its rates since 1981–82. There is a range of criteria, and every example shows that we are proposing to deal with only a few extremely high-spending and high-rating authorities.
  Mr. Rippon: Does my right hon. Friend realise that that is what worries most of us? He has said that we shall in due course choose the principles in the light of the most up-to-date circumstances. In other words, the list is by no means exhaustive. The principles could be changed at any time, either by him or his successor. Though the list might well be used, it might not he. There is a real danger that a future Secretary of State might say to his Department, "If those are the principles, let fresh principles be found."
  Mr. Jenkin: My right hon. and learned Friend will forgive me for saying that these are paths that we trod in Committee. He will know that the Bill provides that the principles shall be laid before the House. It was argued that there should be a statutory opportunity to debate the principles. When my hon. Friend the Under-Secretary of State replied to the debate in which that argument had been advanced, he undertook to consider whether there was some weight in that argument. I feel that there is something in the argument.
  One of the strengths of our case is that the orders that will be the end of the capping process will have to be debated in the House. That is an entirely appropriate requirement. We are considering whether it would be right to provide a statutory opportunity for a debate on the principles. I think that that would go a long way, if that were so—I am speaking without commitment at this stage—to meet the problem of arbitrariness of which my right hon. and learned Friend is complaining. I am conscious of that argument and, indeed, I made it clear that one of the reasons for the Bill being drafted in its present form is that it would not necessarily be appropriate to have a constant set of principles year after year. Provided that the principles used are clear at the beginning of the process, because the Government would need the support of the House, that is a proper and appropriate way to deal with the matter.
  The amendment asks for a fixed limit of 20 designated authorities. I must make it clear that the Government have
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  never been rigid about the number of authorities. We have referred to 12 to 20 authorities to give some idea of the number involved. The very existence of a range shows that we cannot be precise about the number selected.
  I cannot tell the House with certainty that it would not be necessary in any year, based on clearly established principles appropriate at the time, to select one or two more than 20 authorities. If a consistent set of coherent principles were drawn up with, say, 23 authorities clearly separated from the rest, it would not make sense if the only way in which the Government could reduce that list to 20 would be to use two or three decimal places of expenditure above GRE, or some other limit set over time.
  As I have shown, the list that was discussed in Committee — I was grateful for its welcome by Committee members, as the Government try to be as open as possible in explanation— was remarkably robust in the criteria and mixes of criteria that might be used, but the total came to 20 again and again. Some combinations would bring about a total of 16 authorities, and others as many as 22 or 23 authorities.
  A coherent and clear set of principles could be devised and laid before the House to produce a figure marginally above 20 authorities. If so, a maximum of 20 would be unnecessarily restrictive. A Secretary of State should be entitled to do that, even though the number was more than 20, rather than have to twist and distort the principles to reach a maximum figure of 20. That is why I ask the House to reject the amendment.
  Mr. Straw: May I pick up the right hon. Gentleman's comment that he would not wish to be unduly restrictive?
  We understand that we may extend the number of authorities by one or two over 20, and it was suggested that 25 should be acceptable. I do not understand why that limit is not acceptable if the Secretary of State is confident that his good intentions, which we do not challenge, will be translated into Government policy when he is in office and in later years. When will the Secretary of State return to the frequent suggestion that the real reason why he does not wish to be unduly restrictive is that the White Paper requires local authorities to cut their expenditure totals by £1·5 billion by 1986 to 1987? That cannot be achieved by selective schemes.
  Mr. Jenkin: I had intended to deal with that point before sitting down, as the hon. Gentleman referred to it earlier. I seek the modest flexibility described to the House for the reasons stated and not in relation to the expenditure figures. I remind the House that the White Paper figures for public spending over the past few years have had to be raised each year to take into account the changing spending pattern.
  Local government is now spending £2·5 billion above what was planned in 1980. That is a measure of how far adrift we have been. As a result, the public expenditure White Paper figures were raised by £1,000 million in 1982–83, by £1,100 million in 1983–84 and by more than £500 million in the current year. It would not altogether surprise me or, I suspect, my right hon. and learned Friend the Chief Secretary to the Treasury if we had to come back to the House to recognise the reality of the spending pattern of local authorities.
  However, with the greatest respect, that is only part of what the Bill is about. Under part I, the only part which we hope we ever have to implement, for the first time we

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  shall be able to put an effective upper limit on the spending and rating of the few authorities which have contributed the overwhelming proportion of overspending over the year. Other Ministers and I have been grateful for this. Some of my hon. Friends said that they recognise the need for that and support the legislation. Nobody welcomes the Government having to take such powers. As I have said again and again, I hope that we shall reach the position where no capping——
  Mr. Cowans: While the Secretary of State cannot argue how many local authorities he can trap under part I, because he cannot put a ceiling on it, can he explain why he needs to put part II into the legislation at all?
  Mr. Jenkin: Perhaps the hon. Gentleman was not in the House when we mentioned that matter. We shall come to it tomorrow, when other amendments will be discussed and when I hope to catch your eye, Mr. Deputy Speaker, so that I can answer such questions.
  I can go one stage further, as these matters are related to the problems of the low-spending authorities. If under the Bill we can begin to cap the spending of the irresponsible high spenders we shall be able to help the lower spenders. Of course, we are subject to overall spending constraints, but we shall increase the total provision for local authorities' current expenditure as new information on budgets becomes available, as we have done in recent years. It is our firm intention to stick to our overall plans for future years so that if yet again we have to increase the planning figures for local government current expenditure we shall have to achieve that within the overall planning totals in the White Paper published on 16 February.
  I have constantly reaffirmed—the Government will live up to it—the undertaking that my hon. Friend the Under-Secretary and I gave in the rate support grant debate that, as the capping begins to take effect, we shall be able to take greater account of the efforts of low-spending authorities to keep their spending within the guidelines laid down by Parliament. If we are to do that effectively, we must have reasonable flexibility in interpreting part I.
  I hope that I have explained to the satisfaction of my hon. Friends that it would unduly tie the Government's hands if we were pinned down to a figure such as 20, suggested in the amendment moved by my hon. Friend the Member for Devizes. Therefore, I hope that the House will reject the amendment.
  Mr. Benyon: I rise with trepidation, first, because I realise that the amendment moved by my hon. Friend the Member for Devizes (Mr. Morrison), which I support, is dependent upon other amendments that will be moved subsequently, and, secondly, because I was not a member of the Committee.
  The explanation of my right hon. Friend the Secretary of State was difficult to understand. Why jib at not accepting 25, if he does not like 20? It is rather like Lot's wife, and saying, "Peradventure there is one person does not offend".
  I am concerned about the brief that we received from the three local authority associations. At present under the powers there is a limit to the number of local authorities to be designated. However, my hon. Friends must take on
  222
  board another fact. I direct my remarks particularly to my hon. Friend the Member for Norwich, South (Mr. Powley).
  9.30 pm
  There is no limit to the number of authorities included in any order made under the procedure. For the sake of argument, let us say that there are not 20 authorities but 30. On one night in the future, 30 authorities, perhaps including Norwich because its composition has changed in a local election, will be considered in a one-and-a-half hour debate on an order. My hon. Friend will be lucky if he gets three minutes to speak. The authorities will have been approached and will have been asked whether they wish to make any appeal against the order. Their views will have come back, and will have been rejected. My hon. Friend will need to stand up in the House——
  Mr. Cormack: If he gets in.
  Mr. Benyon: If he gets in—and make the case for Norwich to have so much money for education, dustbins, and so on.
  Mr. Powley: My hon. Friend might take note of the fact that I have already advised my local authority, Norwich city council, that it is likely to be rate capped, according to the examples given by my right hon. Friend the Secretary of State. In my opinion, humble though it might be, the council could engineer its finances so that it would not be rate capped and the measure was unnecessary.
  Mr. Benyon: I return to the charge that any number of local authorities might not be so well advised as my hon. Friend. What happens in those circumstances on the Floor of the House? I cannot believe that this is how a democratic system should work. I hope that, especially when my hon. Friends vote on this subject, they will imagine themselves—as I do as the representative of Milton Keynes—arguing in a one-and-a-half hour debate on an order into which their authority, for better or worse, has got itself.
  Mr. Charles Morrison: My hon. Friend the Member for Milton Keynes (Mr. Benyon) has stated the argument with his usual good sense. The hon. Member for Newham, North-West (Mr. Banks) suggested that the Secretary of State — I think that I am almost quoting the hon. Gentleman—was doing what many of his predecessors wanted to do. That may or may not have been true. If it is true, it demonstrates one of the great differences between members of the Government and Members of Parliament. Members of the Government are concerned with the exercise of power, and, not surprisingly, therefore wish to take the greatest amount of power unto themselves. Members of Parliament are concerned with ensuring that there is an adequate check on that power. Never before in recent times have any Government had a majority the size of the present Government's. If the hon. Gentleman was correct, it has been known by successive Governments in post-war days that they could not carry a measure such as this one against not only the Opposition but some of their own members. I hope that that is not the position that my right hon. Friend is proposing in the Bill. If it is, it is shameful.
  In this amendment, we are trying, as my right hon. and learned Friend the Member for Hexham (Mr. Rippon) said, to control the draconian power to interfere held by

  223
  the Secretary of State for the Environment. Nothing that my right hon. Friend the Secretary of State said militates against the inclusion of a limit on the number of local authorities that can be caught under the selective scheme. Very much the opposite is true. My right hon. Friend has confirmed my worst fears. He did not accept the amendment, and went on to confirm what I said when I moved the amendment—that, if there was no part II, the Government would use part I. I emphasise the point made by my hon. Friend the Member for Milton Keynes. My right hon. Friend should look not only at the amendment dealing with the removal of the general powers but at other amendments dealing with clause 2.
  My right hon. Friend referred also to the safeguards in clause 2(2)(b). That refers to the Government's opinion on whether a local authority appears to have proposed total xpenditure that is
  "excessive having regard to general economic conditions."
  That is a general point. I do not believe that the inclusion of such a broad control is adequate to meet the point that I have made. I feel strongly that my right hon. Friend should have been prepared to accept the amendment. As he is not prepared to do so, I hope that the House will divide on it.
  Question put, That the amendment be made:—
  The House divided: Ayes 196, Noes 288.

  Division No. 207]

  [9.36 pm

  AYES

  Adams, Allen (Paisley N)

  Corbett, Robin

  Alton, David

  Corbyn, Jeremy

  Anderson, Donald

  Cowans, Harry

  Archer, Rt Hon Peter

  Craigen, J. M.

  Ashdown, Paddy

  Crowther, Stan

  Ashley, Rt Hon Jack

  Cunliffe, Lawrence

  Atkinson, N. (Tottenham)

  Dalyell, Tam

  Bagier, Gordon A. T.

  Davies, Rt Hon Denzil (L'lli)

  Banks, Tony (Newham NW)

  Davies, Ronald (Caerphilly)

  Barnett, Guy

  Davis, Terry (B'ham, H'ge H'l)

  Barron, Kevin

  Deakins, Eric

  Beaumont-Dark, Anthony

  Dixon, Donald

  Beckett, Mrs Margaret

  Dobson, Frank

  Beggs, Roy

  Dubs, Alfred

  Beith, A. J.

  Dunwoody, Hon Mrs G.

  Bennett, A. (Dent'n & Red'sh)

  Eadie, Alex

  Benyon, William

  Eastham, Ken

  Bermingham, Gerald

  Edwards, Bob (W'h'mpt'n SE)

  Bidwell, Sydney

  Ellis, Raymond

  Blair, Anthony

  Evans, John (St. Helens N)

  Boothroyd, Miss Betty

  Ewing, Harry

  Boyes, Roland

  Fatchett, Derek

  Bray, Dr Jeremy

  Faulds, Andrew

  Brown, Gordon (D'f'mline E)

  Field, Frank (Birkenhead)

  Brown, Hugh D. (Provan)

  Fields, T. (L'pool Broad Gn)

  Brown, N. (N'c'tle-u-Tyne E)

  Fisher, Mark

  Brown, Ron (E'burgh, Leith)

  Flannery, Martin

  Bruce, Malcolm

  Forrester, John

  Buchan, Norman

  Forsythe, Clifford (S Antrim)

  Callaghan, Jim (Heyw'd & M)

  Foster, Derek

  Campbell-Savours, Dale

  Foulkes, George

  Canavan, Dennis

  Fraser, J. (Norwood)

  Carlile, Alexander (Montg'y)

  Freud, Clement

  Carter-Jones, Lewis

  Garrett, W. E.

  Cartwright, John

  George, Bruce

  Clark, Dr David (S Shields)

  Gilmour, Rt Hon Sir Ian

  Clarke, Thomas

  Godman, Dr Norman

  Clay, Robert

  Gould, Bryan

  Cocks, Rt Hon M. (Bristol S.)

  Hamilton, James (M'well N)

  Cohen, Harry

  Hardy, Peter

  Coleman, Donald

  Harman, Ms Harriet

  Concannon, Rt Hon J. D.

  Harrison, Rt Hon Walter

  Conlan, Bernard

  Hart, Rt Hon Dame Judith

  Cook, Frank (Stockton North)

  Haynes, Frank

  Cook, Robin F. (Livingston)

  Heffer, Eric S.

  Hogg, N. (C'nauld & Kilsyth)

  Pendry, Tom

  Holland, Stuart (Vauxhall)

  Penhaligon, David

  Home Robertson, John

  Pike, Peter

  Howells, Geraint

  Powell, Rt Hon J. E. (S Down)

  Hoyle, Douglas

  Powell, Raymond (Ogmore)

  Hughes, Dr. Mark (Durham)

  Prentice, Rt Hon Reg

  Hughes, Robert (Aberdeen N)

  Prescott, John

  Hughes, Roy (Newport East)

  Radice, Giles

  Hughes, Sean (Knowsley S)

  Randall, Stuart

  Hughes, Simon (Southwark)

  Redmond, M.

  Janner, Hon Greville

  Richardson, Ms Jo

  John, Brynmor

  Rippon, Rt Hon Geoffrey

  Johnston, Russell

  Roberts, Allan (Bootle)

  Jones, Barry (Alyn & Deeside)

  Roberts, Ernest (Hackney N)

  Kaufman, Rt Hon Gerald

  Robertson, George

  Kennedy, Charles

  Robinson, G. (Coventry NW)

  Kirkwood, Archibald

  Rogers, Allan

  Knox, David

  Ross, Ernest (Dundee W)

  Lambie, David

  Ross, Wm. (Londonderry)

  Lamond, James

  Rowlands, Ted

  Lewis, Ron (Carlisle)

  Sedgemore, Brian

  Lewis, Terence (Worsley)

  Sheerman, Barry

  Litherland, Robert

  Shore, Rt Hon Peter

  Lloyd, Tony (Stretford)

  Short, Ms Clare (Ladywood)

  McCartney, Hugh

  Short, Mrs H.(W'hampt'n NE)

  McDonald, Dr Oonagh

  Silkin, Rt Hon J.

  McGuire, Michael

  Skinner, Dennis

  McKay, Allen (Penistone)

  Smith, C.(Isl'ton S & F'buiy)

  McKelvey, William

  Smith, Rt Hon J. (M'kl'ds E)

  McNamara, Kevin

  Smyth, Rev W. M. (Belfast S)

  McTaggart, Robert

  Soley, Clive

  McWilliam, John

  Spearing, Nigel

  Madden, Max

  Strang, Gavin

  Marek, Dr John

  Straw, Jack

  Marshall, David (Shettleston)

  Thomas, Dafydd (Merioneth)

  Martin, Michael

  Thomas, Dr R. (Carmarthen)

  Mason, Rt Hon Roy

  Thompson, J. (Wansbeck)

  Maxton, John

  Thorne, Stan (Preston)

  Maynard, Miss Joan

  Tinn, James

  Meadowcroft, Michael

  Torney, Tom

  Meyer, Sir Anthony

  Wallace, James

  Michie, William

  Wardell, Gareth (Gower)

  Mikardo, Ian

  Wareing, Robert

  Millan, Rt Hon Bruce

  Weetch, Ken

  Miller, Dr M. S. (E Kilbride)

  Welsh, Michael

  Mitchell, Austin (G't Grimsby)

  White, James

  Molyneaux, Rt Hon James

  Williams, Rt Hon A.

  Morris, Rt Hon J. (Aberavon)

  Winnick, David

  Nellist, David

  Winterton, Nicholas

  O'Neill, Martin

  Woodall, Alec

  Owen, Rt Hon Dr David

  Young, David (Bolton SE)

  Park, George

  Parry, Robert

  Tellers for the Ayes:

  Patchett, Terry

  Mr. Patrick Cormack and Mr. Charles Morrison.

  Pavitt, Laurie

  Colvin, Michael

  Hunter, Andrew

  Cope, John

  Hurd, Rt Hon Douglas

  Corrie, John

  Irving, Charles

  Couchman, James

  Jenkin, Rt Hon Patrick

  Cranborne, Viscount

  Jessel, Toby

  Currie, Mrs Edwina

  Johnson-Smith, Sir Geoffrey

  Dicks, Terry

  Jones, Gwilym (Cardiff N)

  Dorrell, Stephen

  Jones, Robert (W Herts)

  Douglas-Hamilton, Lord J.

  Joseph, Rt Hon Sir Keith

  Dover, Den

  Kershaw, Sir Anthony

  du Cann, Rt Hon Edward

  King, Roger (B'ham N'field)

  Dunn, Robert

  King, Rt Hon Tom

  Durant, Tony

  Knight, Gregory (Derby N)

  Eggar, Tim

  Knight, Mrs Jill (Edgbaston)

  Emery, Sir Peter

  Knowles, Michael

  Evennett, David

  Lamont, Norman

  Eyre, Sir Reginald

  Lang, Ian

  Fallon, Michael

  Latham, Michael

  Farr, John

  Lawler, Geoffrey

  Favell, Anthony

  Lawrence, Ivan

  Fenner, Mrs Peggy.

  Lawson, Rt Hon Nigel

  Finsberg, Sir Geoffrey

  Lennox-Boyd, Hon Mark

  Fletcher, Alexander

  Lilley, Peter

  Fookes, Miss Janet

  Lloyd, Ian (Havant)

  Forman, Nigel

  Lloyd, Peter, (Fareham)

  Forsyth, Michael (Stirling)

  Lord, Michael

  Fowler, Rt Hon Norman

  Lyell, Nicholas

  Fox, Marcus

  McCrindle, Robert

  Fraser, Peter (Angus East)

  McCurley, Mrs Anna

  Freeman, Roger

  Macfarlane, Neil

  Fry, Peter

  MacKay, Andrew (Berkshire)

  Gale, Roger

  MacKay, John (Argyll & Bute)

  Galley, Roy

  Maclean, David John

  Gardiner, George (Reigate)

  McQuarrie, Albert

  Gardner, Sir Edward (Fylde)

  Major, John

  Garel-Jones, Tristan

  Malins, Humfrey

  Glyn, Dr Alan

  Malone, Gerald

  Goodlad, Alastair

  Marland, Paul

  Gorst, John

  Marlow, Antony

  Gow, Ian

  Mather, Carol

  Gower, Sir Raymond

  Maude, Hon Francis

  Grant, Sir Anthony

  Mawhinney, Dr Brian

  Greenway, Harry

  Maxwell-Hyslop, Robin

  Gregory, Conal

  Mayhew, Sir Patrick

  Griffiths, E. (B'y St Edm'ds)

  Mellor, David

  Griffiths, Peter (Portsm'th N)

  Merchant, Piers

  Grist, Ian

  Miller, Hal (B'grove)

  Ground, Patrick

  Mills, Iain (Meriden)

  Grylls, Michael

  Mills, Sir Peter (West Devon)

  Gummer, John Selwyn

  Miscampbell, Norman

  Hamilton, Neil (Tatton)

  Moate, Roger

  Hampson, Dr Keith

  Monro, Sir Hector

  Hanley, Jeremy

  Montgomery, Fergus

  Hannam, John

  Morrison, Hon P. (Chester)

  Harvey, Robert

  Moynihan, Hon C.

  Haselhurst, Alan

  Mudd, David

  Havers, Rt Hon Sir Michael

  Murphy, Christopher

  Hawkins, Sir Paul (SW N'folk)

  Neale, Gerrard

  Hawksley, Warren

  Nelson, Anthony

  Hayes, J.

  Neubert, Michael

  Hayhoe, Barney

  Newton, Tony

  Hayward, Robert

  Nicholls, Patrick

  Heathcoat-Amory, David

  Norris, Steven

  Heddle, John

  Onslow, Cranley

  Henderson, Barry

  Oppenheim, Philip

  Hickmet, Richard

  Oppenheim, Rt Hon Mrs S.

  Higgins, Rt Hon Terence L.

  Osborn, Sir John

  Hill, James

  Ottaway, Richard

  Hind, Kenneth

  Page, John (Harrow W)

  Hirst, Michael

  Page, Richard (Herts SW)

  Holland, Sir Philip (Gedling)

  Parris, Matthew

  Holt, Richard

  Patten, John (Oxford)

  Hooson, Tom

  Pattie, Geoffrey

  Hordern, Peter

  Pawsey, James

  Howard, Michael

  Peacock, Mrs Elizabeth

  Howarth, Gerald (Cannock)

  Percival, Rt Hon Sir Ian

  Howell, Ralph (N Norfolk)

  Pink, R. Bonner

  Hubbard-Miles, Peter

  Pollock, Alexander

  Hunt, David (Wirral)

  Porter, Barry

  Hunt, John (Ravensbourne)

  Powell, William (Corby)

  Powley, John

  Tapsell, Peter

  Price, Sir David

  Taylor, Teddy (S'end E)

  Proctor, K. Harvey

  Temple-Morris, Peter

  Rathbone, Tim

  Terlezki, Stefan

  Rees, Rt Hon Peter (Dover)

  Thomas, Rt Hon Peter

  Renton, Tim

  Thompson, Donald (Calder V)

  Rhodes James, Robert

  Thompson, Patrick (N'ich N)

  Ridley, Rt Hon Nicholas

  Thornton, Malcolm

  Ridsdale, Sir Julian

  Thurnham, Peter

  Roberts, Wyn (Conwy)

  Townend, John (Bridlington)

  Robinson, Mark (N'port W)

  Townsend, Cyril D. (B'heath)

  Roe, Mrs Marion

  Tracey, Richard

  Rossi, Sir Hugh

  Trotter, Neville

  Rost, Peter

  Twinn, Dr Ian

  Rowe, Andrew

  van Straubenzee, Sir W.

  Rumbold, Mrs Angela

  Vaughan, Sir Gerard

  Ryder, Richard

  Waddington, David

  Sackville, Hon Thomas

  Wakeham, Rt Hon John

  St. John-Stevas, Rt Hon N.

  Waldegrave, Hon William

  Sayeed, Jonathan

  Walker, Bill (T'side N)

  Shaw, Sir Michael (Scarb')

  Waller, Gary

  Shelton, William (Streatham)

  Walters, Dennis

  Shepherd, Colin (Hereford)

  Ward, John

  Shepherd, Richard (Aldridge)

  Wardle, C. (Bexhill)

  Silvester, Fred

  Warren, Kenneth

  Sims, Roger

  Watson, John

  Skeet, T. H. H.

  Watts, John

  Smith, Sir Dudley (Warwick)

  Wells, Bowen (Hertford)

  Smith, Tim (Beaconsfield)

  Wells, John (Maidstone)

  Soames, Hon Nicholas

  Wheeler, John

  Spencer, Derek

  Whitfield, John

  Spicer, Michael (S Worcs)

  Whitney, Raymond

  Stanbrook, Ivor

  Wilkinson, John

  Steen, Anthony

  Wolfson, Mark

  Stern, Michael

  Wood, Timothy

  Stevens, Lewis (Nuneaton)

  Woodcock, Michael

  Stevens, Martin (Fulham)

  Yeo, Tim

  Stewart, Allan (Eastwood)

  Young, Sir George (Acton)

  Stewart, Andrew (Sherwood)

  Younger, Rt Hon George

  Stewart, Ian (N Hertf'dshire)

  Stokes, John

  Tellers for the Noes:

  Stradling Thomas, J.

  Mr. Robert Boscawen and Mr. Timothy Sainsbuiy.

  Sumberg, David

  Question accordingly negatived.

Clause 2

  DESIGNATION OF AUTHORITIES
  Mr. Charles Morrison: I beg to move amendment No. 26, in page 2, line 23, after 'report', insert 'or reports'.
  Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take the following amendments:
  No. 27, in page 2, line 26, leave out
  'or, as the case may be, each of the authorities'.
  No. 6, in page 3, line 12, leave out `or authorities'.
  No. 7, in page 3, line 12, leave out 'have' and insert `has'.
  No. 29, in page 3, line 12, at end insert—
  `(6A) No report made by the Secretary of State under subsection (1) above shall come into effect unless a draft thereof in the form of a Statutory Instrument has been laid before and approved by a resolution of each House of Parliament.'.
  No. 8, in page 3, line 13, leave out subsection (7).
  No. 30, in clause 3, page 3, line 22, at end insert—
  '(lA) The determination of the Secretary of State in accordance with subsection (1) above shall not come into force unless a draft thereof in the form of a Statutory Instrument has been laid before and approved by a resolution of each House of Parliament.'
  No. 12, in clause 4, page 5, line 10, leave out from `unless' to end of line 11 and insert
  'it has been approved by a resolution of each House of Parliament'.
  No. 35, in clause 4, page 5, line 12, leave out
  'may relate to two or more authorities'
  and insert
  `shall relate only to one authority.'.
  No. 14, in clause 4, page 5, line 12, leave out
  'relate to two or more authorities'
  and insert
  `only relate to one authority'.
  No. 28, in clause 4, page 5, line 12, leave out 'two or more authorities' and insert 'only one authority'.
  Mr. Morrison: As we know, and as indeed the Secretary of State has conceded, the Bill involves a major shift in power from local government to the centre. The aim of this group of amendments—Nos. 26, 27, 6 and 7 are the ones which are in my name and the names of my hon. Friends—is to ensure that, if there is to be such a movement of power to the centre, at least that power will be under the supervision of Parliament rather than within the virtually unfettered control of Whitehall.
  I use the word "Whitehall" purposely for, make no mistake about it, what the Bill involves in practice is a movement from democratically elected local representatives to civil servants in the Department of the Environment. The Secretary of State will do little more than rubber-stamp their decisions, and I do not exaggerate. Ministers, after all, are extremely busy people who have a very heavy workload, day in and day out.
  Let us say that the Secretary of State initially makes a decision to examine the budgets of a considerable number of local authorities. Let us say that he considers it correct to examine the budgets of 30 to 40 local authorities on the basis that he thinks that that number of authorities may be spending excessively. Let us say that out of those 30 to 40 he might finally designate 16. Does anyone really believe that Ministers in the Department of the Environment will have the time to pore over 30 budgets and consider the arguments for them and for the expenditure that they include? Of course they will not.
  Mr. John Page: Does it occur to my hon. Friend in these days of the magic of modern science that all that the Secretary of State has to do is press one tiny button and all these things will come up on the computer telling him exactly what is going on?
  Mr. Morrison: On the logic of my hon. Friend, it surely follows that the Chancellor of the Exchequer could each year press one tiny button and out would jump the whole of his Budget. I do not think that my hon. Friend would assume that that was so, but what is the difference between the Budget of my right hon. Friend the Chancellor on the one hand and the budgets of several hundred local authorities on the other? Both, as we know full well, are subjected to the most detailed examination, recommendations by committees, scrutiny by officials, either at local level or in Whitehall, and ultimately decisions by, in the case of the Government, the Chancellor and, in the case of a local authority, perhaps the chairman of the finance committee, who makes recommendations to his committee. Therefore, I cannot see that the situation is quite as simple as my hon. Friend suggests, much as I wish it were, because then huge savings could be made. But I do not think that it is very realistic to assume that they can be.
  In my view, given the picture that I have indicated, which might well come about, it will be civil servants
  228
  rather than Ministers who will undertake the detailed examination of the budgets of those local authorities which are thought to be overspending.
  It is therefore very important that Parliament should have the power to consider each local authority proposed for designation. After all, local government is local. That should be stating the obvious, but it seems to me that often it is forgotten. It seems to be only too often forgotten that every local authority area has different problems, and every group of locally elected councillors has different views as to what the priorities for action and expenditure may be. It is no use lumping local authorities together and pretending that one standard can be appied to all for all expenditure. To do so would be unrealistic. Every budget should be considered in detail and the various considerations taken into account by the House.
  Dr. Keith Hampson: I have sympathy with some of my hon. Friend's points, but I find it hard to follow his logic. If local government is local, why should this House consider in detail local authorities' budgets? If we give power to my right hon. Friend the Secretary of State to have discretion over a broad area, he should be allowed to exercise it.
  Mr. Morrison: The last thing I want is for my right hon. Friend the Secretary of State or the House to have the power to look at local authorities' budgets. However, if power is to be centralised by the Bill, the scrutiny and consideration of each authority's budget should be carried out individually by the House rather than collectively by my right hon. Friend using dictatorial powers.
  I am sure that my hon. Friend is well aware of the contents of the Bill. Part I provides that a designation order can cover a number of authorities. That would hinder parliamentary consideration of whether the circumstances of each authority had been considered before the authority was designated for rate capping. Indeed, it would preclude parliamentary control of the whole capping process.
  It might be argued that one authority per report, which is the purpose of the amendment, would be a cumbersome process for Parliament. My reply is that, if the Government are putting forward such legislation, they must live with the consequences of parliamentary control. As my right hon. Friend the Secretary of State has constantly reiterated, if selective limitation is to apply to only a few authorities, the process proposed in the amendments would not be too cumbersome for the House.
  Parliament should decide how much time it devotes to each report. It need not give detailed or lengthy consideration to every authority. Some authorities obviously spend way in excess of what is reasonable, and the House could deal with them swiftly. The House should have the opportunity to examine each local authority, and it will have that opportunity only if the amendments are accepted, as I hope they will be.
  10 pm
  Mr. Simon Hughes: When I made my maiden speech here, I was followed by the hon. Member for Devizes (Mr. Morrison). Little did I think then that a year later we would find ourselves on the same side on a matter as important as—if not more important than—the Budget, which was the matter that we were debating a year ago. I welcome his temporary removal to the side of the more numerous on this issue,

  229
  and I only wish that the numbers here reflected the numbers outside. Probably never in the history of legislation have so many elected people taken a similar view against that of so few elected people.
  We all received a briefing from the Association of County Councils, the Association of District Councils and the Association of Metropolitan Authorities, representing many different parts of the country, united in the principle that they want to be allowed to make their own decisions or, at least, to be considered on their own, and not lumped together. The arguments adduced a moment ago by the hon. Member for Devizes struck a chord and are fully supported by those of us on the Liberal and Social Democratic Benches, those on the Labour Benches, many sitting on the Government Back Benches and, until recently—if we read the writings of certain people—even by some on the Government Front Benches.
  This group of amendments includes amendments Nos. 12 and 14, standing in the names of my right hon. and hon. Friends, which succinctly put our case. They propose that if the Secretary of State is to designate an authority he should do so only when both Houses of Parliament have considered the circumstances of that authority. The hon. Member for Leeds, North West (Dr. Hampson) suggested that his local community, a part of that fine city of Leeds, would be happy for the Secretary of State to take the power, and happier — if we are to believe what he represents—than if we were to look at the Secretary of State's actions and those of his officials. I do not believe that. I do not believe that the citizens of west Leeds are any different from the citizens of north-west Leeds.
  Mr. Straw: More perceptive.
  Mr. Hughes: More perceptive they may be, but I am sure that they all believe that Leeds should be looked at separately and considered on its own. If they cannot have the guarantee that any representative of that city in this place can have a say in decisions about the financing of their authority, they would be even more deprived than they already are in other ways as a result of this Government's actions.
  Dr. Hampson: I was making the point that in many areas of legislation, and this is no exception, we in this House grant discretionary powers to Secretaries of State. There is no better example of that than education, because in 1944 the House granted a free and easy set of powers to the Secretary of State, who runs the education system, in a broad manner, through regulations. I do not understand why Labour Members believe that the detailed provisions of a local authority budget should be debated on the Floor of the House.
  Mr. Hughes: There is a point of principle. If local authorities are losing powers to central Government, it is better for elected people at least to have a say than to leave it to one elected person supported by officials. The number of times when the Secretary of State has used the powers that have been given to him in the context of education are extremely limited, because he is aware of the danger of doing so, but that is not true of the Secretary of State for the Environment, who has declared his intention of capping local authority rates. He goes into this area of
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  potential absolute power determined to do something in a totally different context, and one that does not follow the precedent in the Education Act 1944.
  We take the view that both Houses of Parliament should be consulted, because we believe that there should be two Houses of Parliament. We should like to reform the other House considerably, but even in an unreformed state, it may not do too bad a job on this legislation. Certainly we should be thankful that it is there. I remind the House that there are some hon. Members who believe that there should be only one Chamber. One Chamber, an authoritarian Secretary of State and rate capping bodies bodes far more ill than two Chambers, and that is why the legislation should go to two Chambers for consideration, if it must exist. [HON. MEMBERS: "Hear, hear."] It is clear that there are supporters for that proposition on both sides of the House. One is sometimes surprised from where support comes.
  I have three questions for the Minister. First, what are the criteria that the Government will use for rate-capping and for designating authorities? During the passage of what is now the Local Government, Planning and Land Act 1980, the criteria which the Secretary of State said would be included among the various criteria to be established under that measure were the speeches made by the leaders of the local councils. I suggest that even the hon. Member for Harrow, West (Mr. Page) would find difficulty in putting in his computer a print-out of the speeches of the leaders of the local authorities, tabulating them in such a way as to establish proper criteria.
  Mr. John Page: The leader of Harrow council is one of the leading computer experts in the country. Within a moment of any statement being made by the Secretary of State, or anybody else, he is able to feed it into the computer and, within seconds, to receive an answer. I beg the hon. Gentleman to choose someone other than myself or the leader of Harrow council.
  Mr. Hughes: I am glad to know that there is some remaining expertise, other than in the hon. Member for Harrow, West, in Harrow, although I gather that the opposition on that authority is catching up fast. The criteria for GREAs—the criteria that will determine all of these decisions—should be known to us at this stage and should not be left to decisions about which we shall not even be told as the measure proceeds through Report and Third Reading.
  The second complaint is that by lumping together lock, stock and barrel local authorities with 100 council houses, and councils, such as Liverpool and Birmingham, with 60,000 and 70,000 council houses, along with local authorities representing small rural areas or large rural areas containing small populations and local authorities representing inner city areas, it is impossible for those who work in Marsham street, diligent though they may be, properly to understand, reflect and legislate — that is what they will be doing — for the people in those different communities.
  How is it possible for the Secretary of State to contemplate—he may say that he would not be willing to do so — with one sweep of his legislative pen in Marsham street, putting Hereford and Hackney, Leeds and Liverpool, Bodmin and Bermondsey in the same order and saying, "They must all receive the same group treatment", herded through with the same deficient and inadequate resources at the end of the day?

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  They have different problems, they face different issues, they have different concerns and they are of different political complexions. The people who will stand in those places for election—most of them will still have elections after next year; some may not, but most will —will be most in tune with their local electorates and their needs.
  Thirdly, is it still the Government's contention that they want by these provisions—by grouping together local authorities and determining the rates in Westminster for the rest of the country—to keep down the high spending councils which they allege have made this legislation necessary? Or is it that they want to do something else? If they are thinking about the control of public expenditure, why is the Treasury not introducing and piloting this legislation through?
  The answer may be that the Department of the Environment is doing it because it believes that local government should be run from Whitehall. If the
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  Department believes that it can group together authorities in the north and the south, wherever they may be, it must be clear that those authorities will not receive the same level of consideration. Instead, they will have a sledge hammer attack from the Government and will not have the safeguards which they have enjoyed for decades and, in some cases, for hundreds of years.
  The newspapers have been full of complaints— we have heard about the Financial Times and many others — that there is no evidence that the Bill will reduce local government expenditure. If that is true—we are considering the wisdom of experts, not of politicians—this is not a Rates Bill, but a local government removal Bill. It will be improved if this group of amendments is passed. It should be improved, even at this late stage, before the other place tells us how badly we have got it wrong. After all, it is we who are supposed to he the elected representatives.
  Mr. Straw: This is an ecumenical selection of amendments as it includes Opposition amendments nos. 29, 30 and 35 as well as those tabled by Conservative and alliance Members. I congratulate the hon. Member for Southwark and Bermondsey (Mr. Hughes) on a fine Second Reading speech. As the hon. Member for Devizes (Mr. Morrison) said, this group of amendments concerns the crucial issue of parliamentary scrutiny of legislation which has greater constitutional implications than any other wholly domestic legislation that has been passed since the second world war. I naturally exclude the Common Market legislation of 1972. I remind Conservative Members who are tempted to support the Bill, certainly not because they have been convinced by reasoned argument, but perhaps because of the prospect of preferment or loyalty, that it is Conservative Members who have described the Bill as draconian and have said that it will lead to elective dictatorship. They have condemned it in rounder terms than any Opposition Members.
  I am not sure of the name of the leader of Harrow borough council who runs a computer, but we should not forget that computers run on the basis of trash in, trash out. However, a Conservative councillor from Harrow called Mr. Ron Grant bitterly criticised this Bill at the recent Conservative local government conference. He said:
  "If cuts are not to bite too deeply, they must be phased in over a few years. We were not elected to make big cuts in service, and we risk being not elected."
  Mr. Grant was absolutely right.
  Mr. John Page: He is not from Harrow, West.
  Mr. Straw: He will be interested to hear that, but I am sure that he is a Conservative councillor from Harrow.
  Mr. Meadowcroft: It was obviously the rate support grant.
  Mr. Straw: It is a joke. I thought that I was being slow, but I now realise that that was a Liberal joke.
  Mr. Meadowcroft: It was "Harrowing".
  Mr. Straw: One of the issues to which the amendments address themselves is what scrutiny there should be of clause 2 by which the Secretary of State designates authorities by reference to principles that he lays down. Under clause 2(1), the Secretary of State must lay a report itemising the principles and the authorities so designated, but there is no provision for that report to be debated by the House. We believe that that major defect in the Bill will lead to a major loss of parliamentary scrutiny at a critical point in the development of rate-capping policies.
  It is from the determination of the principles that the original list of authorities that are likely to be rate-capped is drawn up. Conservative authorities might well be caught, especially if more than 25 authorities are rate-capped. If the principles are wrong, unfair or harsh, Parliament will have no opportunity to debate them or have them changed before they are set in tablets of stone. The whole machine will then roll on, finally to produce authorities that are the subject of designation.
  10.15 pm
  When this was debated on Second Reading, my hon. Friend the Member for Copeland (Dr. Cunningham) said:
  "The Secretary of State will exercise his powers to discipline authorities in accordance with principles that he will determine. Those principles do not appear in the Bill, and no restriction is placed upon the Secretary of State's freedom to use them."
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  The Secretary of State intervened and said:
  "Purely as a matter of accuracy, I hope that the hon. Gentleman recognises that the statement of principles has to be laid before the House and that, unless the spending limit is agreed, it is only with the authority of the House that the capping process can take effect. It is not true that it is a matter for the Secretary of State alone."
  My hon. Friend continued:
  "We shall examine the matter in some detail in Committee. The Secretary of State's interpretation of the Bill is different from my own."—[Official Report, 17 January 1984; Vol 52, c. 180.]
  We examined the matter in Committee, and after a somewhat esoteric discussion we understood what the Secretary of State was saying. He was not trying to imply, as we had inferred, that there would be full scrutiny of the report laid before the House but that that scrutiny would arise only under clause 4 when the expenditure limits were made.
  The Secretary of State referred earlier to a recognition of the case for proper scrutiny at this stage of the principles that are laid down, and we look forward to hearing from him again. To save him an argument, I should point out that we recognise that some of the amendments to clause 2 propose a debate on the individual authorities at that stage. As the central part of any debate on the report laid under clause 2 will be the principles rather than the authorities, we appreciate that it may well be appropriate to have one debate on the principles. Therefore, we would not push the argument for separate debates on separate authorities at that stage, although I hope that the Secretary of State will acknowledge that if he or his successor establishes principles or classes of authority which differ to any considerable extent they should be debated separately.
  I remind my hon. Friends that clause 2(5) identifies six separate classes and that on top both the ILEA and the GLC are classes by themselves. It would be a matter of regret and, indeed, objectionable if there were separate classes although, as we debated in Committee, the Bill provides for that possibility.
  The second issue raised by the amendments is the scrutiny of the reports under clause 4. At present the Secretary of State determines a maximum level of expenditure for each authority to which he has not given a derogation and then includes every authority to be rate capped within a single report. Although we have had undertakings—which I hope Ministers and the Whips will keep to — that there will be a full day's debate rather than one lasting an hour and a half, even a full day's debate would be wholly inadequate to deal with the designation of 20, 25 or even a dozen individual authorities.
  Let it be made clear at this stage of the process that the determination of the maximum expenditure levels is tailored to individual authorities and the Secretary of State has taken into account individual authorities' expenditure levels and circumstances in deciding whether or not they will be subjected to derogation, what requirements they will be subjected to if there is a derogation and, if not, whether they should be included in the final list under clause 4.
  I ask Conservative Members, and in particular the hon. Member for Milton Keynes (Mr. Benyon), what will happen if a local authority——
  Sir William Clark: Buckingham.
  Mr. Straw: I think that I have the constituency correct. The hon. Member for Croydon, South (Sir W. Clark) has a defective memory. He is thinking of the position before the 1983 election.
  The hon. Member for Milton Keynes asked what any of us would think if our authorities were to be subjected to rate capping. They would be faced with a traumatic future because they would be forced not only against their will but against their better judgment, and by definition against the better judgment of their electors—outside London there are regular elections each year and local authorities have a fresh local mandate — to cut expenditure by 5 or 10 per cent. We have discussed these percentages as if they are relatively small, but a 5 per cent. cut in home help services is a 100 per cent. cut to those who lose those services. This is something that we forget time and again, when arguments about services to individuals are reduced to arithmetic, and particularly the arithmetic of percentages.
  For example, if Hertfordshire loses its school meals service, that may be only 3 or 4 per cent. of its total expenditure, but it is a 100 per cent. loss of school meals to children that are vital to their health and welfare. These are crucial issues.
  Moreover, in many cases the authority will feel that it has been unfairly treated and the Secretary of State has not taken full account of the arguments that are advanced at the time of the derogation. It will wish to put its views through Members on the Floor of the House. I have no doubt that the Minister will wish to offer an explanation showing why he has come to his view. It is not possible properly to scrutinise the effects of these decisions on each authority within the context of a single day's debate. It makes a mockery of the Secretary of State's undertaking that this would be the subject of proper parliamentary scrutiny to try to deal with it in a single day.
  My last point concerns whether a negative or affirmative procedure should be used. We believe that it is a self-evident truth that because of the importance of this Bill and of the procedures in it, wherever parliamentary scrutiny is required by the Bill, that can be effective only if the affirmative resolution procedure is followed.
  These amendments improve and increase the chance of Parliament fulfilling a proper role of scrutinising the great power that the Executive will take under the Bill, and I commend them to the House.
  Mr. John Fraser: In the Mikado it is a tailor who is the executioner. You, Mr. Speaker, are the tailor, but the executioner is the Secretary of State. I rise to say something about Lambeth council and the ILEA, which are two of my authorities. It is wrong that the Secretary of State should seek to put a council such as Lambeth, or any other council, such as Liverpool, into a group of councils and seek to dictate from Whitehall the level of expenditure.
  Three years ago, in Lambeth in 1981, we had extensive riots that set a pattern for riots throughout the country, frightened the Prime Minister and the Government and brought about some changes in policy. They certainly brought about a change in the policy towards the police.
  One of the consequences of the riots was that the Government recognised the need to have better relations between the police and the general public. They began employing more policemen. More policemen were put on the beat and police expenditure was increased. A direct
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  consequence of the riots in Brixton and Lambeth was the inquiry which was presided over by Lord Scarman, which made a number of excellent recommendations concerning the police, the general public and policing. The recommendations made the police in practice, if not in law, more accountable to the community in which they served. The Scarman report stated that one of the causes of the riots and social upheaval in Brixton was the general state of unemployment, bad housing and other social conditions with which any local authority is entirely concerned.
  Since 1981, when the Scarman inquiry took place into conditions in Lambeth and Brixton, almost everything has become worse. The level of rate support grant has decreased since the Brixton riots from about £52 million in 1981 to £49 million in the forthcoming year. If inflation is taken into account, the reduction in Government support for Lambeth has decreased more markedly since the riots of 1981.
  Another social condition which Lord Scarman observed was unemployment. It was about 15,000 in Lambeth in 1981 and it is now 23,000. This means that one man in every four is out of a job in the borough within my constituency. Unemployment has become worse since 1981. Another measure of deprivation is that of homeless families. The quarterly receptions for those who are accepted as homeless has increased since 1981. Almost every measure of poverty and deprivation in Lambeth has become worse since 1981, usually as a direct result of the Government's monetary policies. Unemployment has reached the level when 50 people are chasing every vacancy on the local employment register.
  The Minister is suggesting that we override all the recommendations of the Scarman report. He is seeking from Whitehall to direct expenditure levels and the policy decisions of a locally elected council. The Lambeth council is trying to implement many of the recommendations in the Scarman report and to cure many of the social evils that were highlighted in it.
  Mr. John Heddle (Mid-Staffordshire): Does the hon. Gentleman accept that it is possible that the blind ignorance of the local authority for years and years created the conditions that brought about the conditions that caused the Scarman inquiry to take place after the 1981 riots?
  Mr. Fraser: One of the main causes of the riots was the blind ignorance for many years of the metropolitan police force, which was unaccountable to the general public and the community. It was that lack of unaccountability which led to rebellion on the streets.
  One of the lessons to be learnt is that if we bypass democracy and remove accountability, which is what the Government are doing by attacking local authorities as a class, the people find another means by which to protest. I hope that we shall have no further social unrest, but the chances of increasing social unrest are much greater when the Government can act unaccountably and treat local authorities generically instead of at least examining the conditions which give rise to the Goverimint's judgment of the level of expenditure of a particular authority.
  Lambeth has been willing to submit to some form of arbitration between the local authority and central Government. It has suggested to the Secretary of State and the Prime Minister that there should be a sequel to the

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  Scarman inquiry whereby someone, who can be appointed by the Government, such as Lord Scarman or some other judicial figure of his standing, would examine the current social conditions, which are very much worse than those which prevailed three years ago. He would listen to evidence from the Government, from the local authority and from voluntary and local organisations and then make a judgment on the proper level of expenditure to be undertaken by the borough and the proper level of Government support.
  We would be willing to abide by such arbitration for a local authority in dispute with the Government. However, the Minister is denying any sort of dialogue between the local authority and the Government. There will be no real dialogue if the Secretary of State treats local authorities as a class.
  10.30 pm
  It is important to have an individual inquiry and debate into the Secretary of State's judgment in relation to the Inner London Education Authority. Of course, the Government say that the ILEA spends a great deal of money. That is not in dispute. The electors of London choose to spend more money on and put a great priority on the education of their children than the Secretary of State for Education and Science or the Secretary of State for the Environment.
  Like many London Members, I have been to several meetings at schools during the current campaign. The largest meetings are packed with people in the middle of the political spectrum. I have always said to them that they have a choice of whether they spend some of their money on rates for the education of their children, the provision of nursery education, further education and scholarships, or they can vote out of power a Labour ILEA and choose instead to spend their money on private consumption.
  The overwhelming opinion, not from people on the Left, or extremists, but from the central core of parents and ratepayers in my constituency, is that they prefer to spend their money on their children than to spend it on themselves. If that is the judgment that they make at the ballot boxes, which can be exercised by the ILEA without taking a single penny from Government funds, that is their prerogative. There is no case for the Government treating the ILEA in that way and seeking to interfere with its democratic mandate. The least that the Government could do, if they choose to interfere with the democratic process, would be to allow a report and a debate on that gross interference with local authority discretion.
  Dr. Hampson: I am tempted to take up the final point made by the hon. Member for Norwood (Mr. Fraser). It had a certain poignancy or irony about it. Suddenly supporters of the Labour party are in favour of parents having the right to spend on the education of their children rather than on themselves. That argument has often come from Conservative Members. Opposition Members constantly oppose the idea that parents should have the right to spend on the education of their children. If the hon. Gentleman is going to use that argument, I hope that he will be consistent. When we talk about the assisted places scheme and the right of parents to obtain private education for their children, I hope that he will use the same argument.
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  I accept the hon. Gentleman's argument that places such as Lambeth and Liverpool have deep-seated problems. Conservative Members are just as concerned about them as the hon. Gentleman and his colleagues. However, that is not the debate in this part of the Bill. The hon. Gentleman is arguing that, because Lambeth has particular problems, it should be entitled to a debate on the Floor of the House; it should not be regarded as part of a class of authorities. I shall address myself to that point first. It goes against the entire tradition of what has been done in local government by all parties and all Governments, including the Government of whom the hon. Gentleman was a member. Rightly, it has always been a basic principle in local government finance that no Government single out one authority as against another. How can we legitimise the argument put forward by the hon. Gentleman that the local authorities should be treated specifically on expenditure reductions when we deliberately do not single them out when we pay grants?
  Mr. Cowans: I listened carefully to the hon. Gentleman. He said that the Government do not single out local authorities. I agree with him. That is true, up to now. What exactly does the selective scheme do?
  Dr. Hampson: In the principle about which I am talking, there is no difference between what is happening under the new formula of block grant and what happened before. All Secretaries of State have had certain levers or multipliers — that is the fashionable word — at their disposal. The hon. Member for Blackburn (Mr. Straw), who is not in the Chamber at present, has constantly made fun of the present scheme. He listed all the multipliers. Multipliers existed under the old scheme, with multiple regression analysis, which, I suggest, was more confusing than the present scheme.
  It has never been the case that any Secretary of State could vary the amount of grant to a specific authority. He could vary only the way the grant bore on authorities by class—whether district or county councils. It is perverse to say that, although we say that we stick to that principle —that is right because we do not want the Secretary of State when paying grants to discriminate for personal or political reasons in favour of a particular authority—it flies out of the window when considering the purposes of the Bill.
  Authorities should be treated as a class by the Secretary of State for the purpose of levying penalties. It is an important principle that we should not treat this matter on the basis suggested by the Opposition and that the rate support grant formula is applicable by class of authority.
  The hon. Member for Southwark and Bermondsey (Mr. Hughes) riposted to me that education was in a different category from the subject we are discussing. My analogy was appropriate. The powers we give to the Secretary of State for Education and Science are broader than those we give to any other Secretary of State. Virtually everything that has happened in British education practice has been done under broad powers and regulations governed by the Secretary of State. Hardly any of the regulations on British education have been debated on the Floor of the House.
  We could argue that they should have been so debated, but there is a tradition of giving broad discretion to members of the Executive. The Secretary of State has, for example, launched a series of major initiatives into the curriculum, which develop the work done by his

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  predecessors, including Mrs. Shirley Williams, who is now part of the alliance. She began the great debate with the former Labour Prime Minister on the curriculum. There is no statutory requirement for that to be done. It has not been debated by the House as a change in the law. That action is covered within the broad terms of legislation passed 39 years ago.
  It is legitimate that at times we give Secretaries of State broad powers, and they can thereby operate the minutiae of the system.
  Mr. Chris Smith rose——
  Mr. Simon Hughes: The difference is, as I recall from reading—not from memory because 1944 was before I was born—that the local authorities were happy that the Secretary of State should have the power to ensure equality between local education authorities. This legislation is totally opposed by the local authorities which envisage the Secretary of State removing rather than giving them certain benefits.
  Dr. Hampson: The hon. Gentleman is not a historian. There were fearsome rows about the proposals in the 1944 Act from all kinds of vested interests. A notable one was the Church interest. It proves that vested interests that have something at stake will always fight tooth and claw to preserve their privileged position. That happened when we debated the 1944 Act, and it happens now, Local authorities have a position to defend and they will use every means at their disposal in defending it. They will oppose what is being proposed by the Government. That does not necessarily prove the argument in terms of constitutional propriety.
  It seems odd, given the track record of the House and the principles upon which we have always operated, that on this occasion we are suddenly saying that we, as a legislature, should crawl over the budgets and details of 10, 12, 15 or 50 local authorities. Are we a legislature or an administrative department of state? The job of this House is to pass broad powers, not to scrutinise in detail the budgets or practices of individual local authorities.
  To add a further point about the practical operation of the proposal for local authorities, I had the privilege of being tangentially attached to the Department of the Environment, and I do not know of one year during the four years that I was there when local authorities did not plead passionately on their knees for better particulars of what they were obliged to do. "Where do we stand?" is almost the catch phrase of local authorities. They have belaboured the Government and complained that the rules of the game change year by year and that they do not know where they stand. I say to those right hon. and hon. Members putting forward these proposals that, whatever their feelings about the Bill, what they are saying about this clause is nonsense, from the point of view not just of the House but of local authorities.
  The idea that the House should debate in detail the affairs of 10, 12, 20 or 50 authorities is nonsense. Where would they stand? Months would go by, not just days. I suggest that in terms of principle and practicality——
  Mr. Charles Morrison: My hon. Friend should not forget that my right hon. Friend referred to 16 to 20 local authorities and not 50. If my hon. Friend talks in terms of 50, he is confirming our worst fears. Is he saying that he
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  is happy for the Secretary of State to be personally responsible for determining the budgets of 50 or more local authorities?
  Dr. Hampson: I shall recap what I was saying. I believe that there is an issue of principle as to what this place is about. It is a legislature to give broad powers to Secretaries of State to do various things. I have cited the analogy of education. My hon. Friend is plainly against giving the Secretary of State the powers, and that is a legitimate argument. It is what the House must decide. If the House believes that a Secretary of State should have certain powers, it should leave it to him to operate the minutiae.
  I return to the practice as it affects local authorities. My hon. Friend the Member for Devizes (Mr. Morrison) mentioned 50. If my right hon. Friend and his predecessors are correct, these powers will be like a sword of Damocles over the system. That is the whole point of them. My right hon. Friend has said several times recently, and he is right, that the threat of this legislation has tamed local authority budgeting and rate demands to an extraordinary extent.
  It is possible to have some discipline in local authority finance. If the powers in the Bill, direct and implied exercise discipline over local authority finance, it will be a good thing. We are talking of only a handful of local authorities. If we are to have, as Opposition Members hope, a landslide in their favour and Liverpool councils writ large or even small throughout the land, and anything verging on the attitudes we see in Liverpool, many local authorities will deliberately flout the Government, even if it is their own Labour Government. We know what Liverpool has said to the Labour leader. So we could end up with 50 authorities involved.
  We are debating the principle and putting into statute something that must apply in any situation. Frankly, to use Haigspeak, it boggles the mind to think of the affairs of a couple of dozen to 50 authorities being debated on the Floor of the House.
  10.45 pm
  Mr. Chris Smith: The hon. Member for Leeds, North-West (Dr. Hampson) said that the House should not engage in detailed consideration of local authority budgets. In an ideal world, if there was no suggestion of the Secretary of State taking upon himself the powers enshrined in the Bill, I should entirely agree. However, the Secretary of State is taking power not just to cap the rates of local authorities but, in so doing, to abrogate all the detailed discussions that authorities now undertake regarding the nature of their budgets, their expenditure and the services provided to their local communities. If he does that, he must of necessity undertake close scrutiny of the detailed expenditure of the authorities concerned, and as it is the duty of Parliament to scrutinise the activities of the Executive, the House must give the same detailed consideration to these matters.
  We are talking not just about an exercise based on an arbitrary set of figures with percentages whistled up to catch the number of authorities that the Secretary of State wishes, but about the effect on the people in the areas affected in terms of redundancies, lost services and inability to make desperately needed improvements in services. That will be the detailed impact of the legislation. Any Secretary of State seeking to cap the rates of an authority or a series of authorities must undertake the

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  most careful consideration of those factors and the consequences of his proposed action. If he does not do that, he will be abrogating the responsibilities that he seeks to exercise as Secretary of State.
  The legislation effectively takes the power of local authority budgeting and consideration of services away from the local authority, so that the Secretary of State will make decisions which should properly be made by the authority. Because the Secretary of State will be making those decisions, this Chamber — the democratic and accountable forum to which he is answerable — must itself undertake the same detailed consideration.
  It is not the same as the Secretary of State simply being given a general power and a general responsibility and being told to go away and exercise it, as happens to a certain extent under the present education legislation. The Secretary of State is taking upon himself powers which at the moment belong to democratically elected authorities, and it is because he is seizing these powers under this legislation that the House, which is supposed to be the safeguard of democracy, must itself exercise the most careful scrutiny.
  This measure is not the same as the education legislation. It is very different, and I hope that the Secretary of State will not tell the House that he is simply going to parade a list of local authorities, a list of percentage rate increases and a list of percentages above grant-related expenditure, and that will be it.
  The impact of the legislation on each of the individual local authorities affected will be different in every case. The right hon. Gentleman must take that into consideration in his scrutiny and in what he is doing, and the House must take it into consideration in its scrutiny of what is being done.
  Mr. Cowans: This debate is the result of what happens when Governments put guillotines on. Here we have 11 amendments together. It is worse than the amendments we are talking about, because we are talking about individual authorities in this democratic place. I quarrel with my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) on one point. This used to be the place where democracy was and could be debated. After this Bill, that will be a thing of the past.
  I have never in all my life heard a more naive speech than that made by the hon. Member for Leeds, North-West. It was as if Governments of any colour did not in fact examine local authority budgets now. Has he never heard of targets, clawbacks, holdbacks, permitted expenditure levels? Could I welcome him to the real world, because it is going on now?
  Mr. Hampson rose——
  Mr. Cowans: I have not finished with you yet.
  Mr. Deputy Speaker: I hope that the hon. Gentleman does not mean that he has not finished with me.
  Mr. Cowans: I would never finish with you, Mr. Deputy Speaker. I have not finished yet with the hon. Member for Leeds, North-West. I hope that that clarifies the situation.
  The hon. Gentleman spoke as if the two things we are asking for in this amendment did not happen already. He intervened in the speech of his hon. Friend the Member for
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  Devises (Mr. Morrison) and proved conclusively that he did not know what the hon. Gentleman was talking about and did not even understand what his hon. Friend was trying to move.
  Dr. Hampson: I understand very well that we have holdback, targets and, before that, clawback, of which we still have a variation. Under the old situation before block grant we used to claw back from local authorities mid-year to pay the extra, because it was pro-rata: the more they spent the more that they got. My point was that it was not debated on the Floor of the House. Why should the hon. Gentleman believe that the details should not be debated on the Floor of the House?
  Mr. Cowans: The right hon. Gentleman said that we used to have. I will bring him back into the real world. We still have all these things and they are over and above this. Why did they not get debated on the Floor of the House? Because that was the Government exercising their right over the amount of money they gave to local authorities, and that was quite in order. All Governments did it. The difference now is that local authorities are not going to be allowed to raise the wherewithal from the local community. Why should it not be debated on the Floor of the House? The right hon. Gentleman said it would be too cumbersome, there would be too many authorities, and he put figures on it. But I have sat in the Committee for a long time and the Secretary of State has not addressed me. He has turned to the legions behind him and told them not to worry because he will never have to exercise part 2. He said—and that is on record—that there would be only about 10 authorities. Then halfway through the Committee stage he changed it to 20 and at the end of the Committee we got to 33.
  I submit that it is not beyond the powers of the House to debate 33 local authorities. Who places the local authorities in different categories? It is the same man who does everything else under the Bill—The Secretary of State. The fact that Nelson slept in a hammock does not make it right for us to sleep in bunks. We should move forward.
  We should deprecate legislation pushed through the House that takes away power from locally-elected representatives. The Secretary of State should not make orders ad nauseam without the principles being debated.
  The hon. Member for Southwark and Bermondsey (Mr. Hughes) should communicate with his hon. Friends who served on the Committee. What he advocated in 20 minutes, we advocated for 25 weeks. We tried to persuade the Government to outline the criteria, but they did not do so because they do not know what they are. That is another reason why each authority should be debated by the House.
  Hon. Members, including Conservative Members, have been sent here by the people to look after their interests. We should not pass legislation that does not spell out the principles and the criteria. The hon. Member for Leeds, North-West is quite happy that those should not appear in the legislation, but be left to the Secretary of State. He may be happy, but I am not and nor are those who sent me here. We want to argue the principles and take decisions in a democracy. The hon. Member for Leeds, North-West is advocating the taking away of democracy.
  I cannot look in a crystal ball and see what the Secretary of State will decide. Will the right hon. Gentleman tell us

  243
  whether a local authority that, on the Government's criteria, is part of a partnership because it is a deprived area, will be put in the same category as a local authority that does not qualify for partnerhsip? There are not many special development areas left because of the Government's policies, but will those remaining be put in the same category as a local authority that does not qualify for that status?
  The Government are being remarkably foolish. They recognise through partnership and special development status that certain areas are special cases. Yet when such a local authority if fined for overspending its GRE, the Government give it money from another pocket because it holds a special status as a deprived area. Would it not make more sense if the Government recognised that it was a special case and allowed it to spend what the community wanted it to spend? That is the difference between myself and the hon. Member for Leeds, North-West.
  I warn every right hon. and hon. Member in the Chamber — and those who are not — that the trend throughout this Parliament is to give to the Executive more and more power that we should be exercising. that is what the amendment is about. Wherever we read that the Secretary of State will make an order, we should rephrase it to read, "Whitehall civil servants will make the order". No Secretary of State worth his salt, with all his onerous duties, can do all that himself. The Secretary of State is shaking his head. Of course, I accept that he will oversee the process and be responsible for it. Right hon. and hon. Members are giving away their right to challenge the Executive at the point of first contact.
  If the amendment is not carried, the House will be faced —if it is lucky—with a one and a half hour debate that might encompass 33 diverse local authorities. One does not have to be a Bachelor of Science to work out that if there are 33 local authorities and at least 33 Members of Parliament who want to debate that issue, 33 into one and a half hours does not go. Again, we are passing to the Executive the rights that people put us here to use.
  Even if right hon. and hon. Members do not totally agree with this amendment, they should remember that they are giving their rights away. If we now have a good Secretary of State—and I am sure that we have; I said that without being solicited to do so—what about the next one, or the one after that, or the one in 100 years' time. Right hon. and hon. Members should not give this power away, and they should agree to this amendment.
  11 pm
  Mr. Patrick Jenkin: I must take up a point that was made by the hon. Member for Tyne Bridge (Mr. Cowans) and a number of hon. Members, including my hon. Friend the Member for Devizes (Mr. Morrison), saying that the decisions taken under the Bill would be taken by civil servants, and that Ministers would only be rubberstammps. I refute that strongly. In the Department of the Environment we have to deal with many local authorities. In the course of a year, I and my hon. Friends probably receive hundreds of delegations from local authorities all over the country. We concern ourselves in considerable detail with the cases put by local authorities about why they consider that the targets are unfair, or that the rate support grant distribution has not worked, or that the housing investment programme has not been appropriate. These matters are considered in great detail by Ministers.
  244
  I want to pay tribute to the junior Ministers in my Department, who carry so much of the burden of that work.
  It is not fair to civil servants to say that they carry the responsibility. Of course, their advice and the detailed work that they do is invaluable to Ministers. We could not carry out our functions without them. However, I want to put it firmly on the record that the major decisions—and, undoubtedly, major decisions will be taken under this part of the Bill—will be taken by Ministers, with as full an appreciation of the facts and the arguments as we can make. I hope that right hon. and hon. Members on both sides of the House will accept that.
  A number of hon. Members have made Second Reading speeches. I do not say that in an unkind sense. Sometimes a Report debate is none the worse for that. I shall resist the temptation to read out to the hon. Member for Norwood (Mr. Fraser) the list of absurd excesses in the expenditure of the Lambeth borough council, to which I pay my rates. We all understand that an area such as Lambeth has social problems. We are well aware of that, and that is why Lambeth is one of only two partnership authorities in London. However, one would go into that partnership with considerably more enthusiasm if one did not see the local authority squandering money as if it were water on any manner of nonsense—peace officers, creches, and so on. It has established two separate crèches—one for the children of Labour councillors, and the other for the one Tory child. It is quite absurd.
  Mr. John Fraser rose——
  Mr. Jenkin: No, I shall not give way. I want to come to the amendments.
  Mr. Fraser: Some Conservative Members think that a creche is an accident in Knightsbridge. Why will not the right hon. Gentleman defer to the judgment of the voters of Lambeth, who last week put the Tory party very much at the bottom of the poll in the council by-election?
  Mr. Jenkin: I had not heard the one about the accident in Knightsbridge. However, I was brought up to believe, like the people of Morningside, that sex was what one carried coal in.
  We have been debating an important group of amendments which provide for the Secretary of State's decisions at each stage of the rate limitation process to be set out separately for each authority and for each decision to be subject to more rigorous parliamentary procedures. I understand the motivation that prompts these amendments and, as there are four groups of amendments, I will deal with each in turn.
  The first four amendments seek to provide for separate reports to the House on the principles used in designating each authority selected for rate limitation. As clause 2 is drafted, it requires the reports laid before the House to set out the authorities designated in the report and a statement of the principles in accordance with which the designations have been made.
  Here I take up a point made by the hon. Member for Southwark and Bermondsey (Mr. Hughes). Incidentally, I was not aware that Bermondsey was a local authority —I may be a little out of date; perhaps UDI has been declared—because I thought that it was Southwark. He said that we would lump together all the local authorities, and he mentioned Bodmin and Bermondsey.

  245
  If he studies the Bill he will recognise that the principles used must be common to all authorities of the same class, and by "class" — I might tell my hon. Friend the Member for Teignbridge (Mr. Nicholls)— I mean the classes set out in clause 2(5), metropolitan counties, non-metropolitan counties and so on. There would not, of course, be a separate class of partnership or programme authorities; that would not be appropriate. We would expect the principles usually to be the same for all authorities, or at least the same for the same class. It is difficult to see what could be put into separate reports that could not as easily be put into one report. This group of amendments is over-egging the pudding considerably.
  Mr. Simon Hughes rose——
  Mr. Jenkin: I will not give way because I want to develop the argument.
  It is clear that the purpose of the clause as drafted is to require the Secretary of State to set out formally the principles that he has used in exercising his statutory discretion. He is, of course, accountable for the decisions that he takes. The information given in the report will provide the basis on which, even though the report is not subject to a formal procedure, it can be questioned. That can be done by way of parliamentary question, by an investigation of the relevant Select Committee or by the other procedures that are open to Members of the House.
  In exercising his discretion, the Secretary of State is required to act "reasonably" in the legal sense, and he could be taken to court if he failed to do so. I was recently taken to court by the London borough of Hackney, and the court decided in my favour. [Interruption.] The GLC has lost a case against the London borough of Bromley. I cannot see how separate reports would in any way facilitate matters.
  Mr. Straw indicated assent.
  Mr. Jenkin: I get the impression that the hon. Member for Blackburn (Mr. Straw) is conceding that point from a sedentary position.
  Mr. Straw: If the right hon. Gentleman had been listening to my earlier speech he would have heard me concede it from the Dispatch Box. We shall be voting on amendment 6 only because, for procedural reasons connected with the guillotine, we cannot vote on the amendment on which we wanted to vote.
  Mr. Jenkin: I understand that. I do not believe that separate reports based on the designation report would be right.
  Amendment 8 stands on its own. By deleting subsection (7), it would make it impossible to have separate reports for authorities in England and Wales, and I do not believe that hon. Members who represent Welsh constituencies would welcome that; if the Opposition vote on that, I trust that those hon. Members will be with us in the Lobby.
  The next sub-group seeks to require that at each stage —designation, and the setting of expenditure levels and rate limits — the Secretary of State's decisions are subject to approval by an affirmative resolution in both Houses of Parliament. We have never doubted the importance of involving Parliament appropriately in the procedures under the Bill, but we are talking about a matter of taxation, and in the past it has not been
  246
  considered appropriate for details of local rating to be brought before the other place. Confirmation of that view may be found in the fact that the rate support grant reports, which dispose of very large Exchequer sums to local authorities, do not go to the other place, and are subject only to approval by this House. It would seem very inappropriate to require the specific matters in clause 2 to go to the other place.
  Amendment No. 30 seeks to have the expenditure levels set under clause 3 subject to this detailed approval. It does not seem to us appropriate to seek the approval of the House at that stage for those numbers. It is open to the authorities to come back to seek redeterminations of expenditure levels in the light of their particular circumstances. In a sense the first setting of an expenditure level might be seen as an opening bid. It may be perfectly acceptable to the authority, which might rest there. On the other hand, it is more likely to want to come back and seek a derogation. It would be otiose to involve Parliament in a discussion at that stage when the details may all be changed during the course of negotiation. Of course, the final order setting the rate limit must come before the House of Commons, and that is already in the Bill.
  Furthermore, a requirement for parliamentary debate raises substantial practical problems of timetabling. That point applies equally to amendment No. 29 and the designation of authorities for selective rate limitation. The hon. Member for Blackburn acknowledged that in the last debate I said that I saw some advantage in making provision for some form of involvement of the House as regards the selection principles. I had to be cautious, as I am sure that the hon. Gentleman recognises, because I was concerned about the practical implications of any such procedure. In a normal year there will be a very tight timetable between May and July in setting and publishing the selections. The budgets for the year in which selection takes place and expenditure levels are set are not usually available to the Department of the Environment in their final form until May. The designation and expenditure level decisions will need careful consideration. Yet everyone — and this point has been made frequently today—has stressed the need for giving authorities early warning of what is required of them. My hon. Friend the Member for Leeds, North-West (Dr. Hampson) made that point very strongly from his experience with the Department.
  That is certainly the Government's view. We would want to make our views and decisions known well before the summer holidays, if that is at all practicable. If we are to achieve that, the addition of a statutory parliamentary debate could make the programme very difficult. I really wonder whether that would be a feasible procedure. It certainly would not work this year, when the whole process will have to start later, as the Bill will not reach the statute book until well into the summer.
  Amendment No. 29, as it stands, is not technically adequate. It would also include the other place in the procedure and that, I think, would be wrong. I have already said that it would not be appropriate for the other place to discuss rating matters, as the RSG is not discussed there. I am also doubtful as to whether the affirmative resolution procedure would be right, as that too would add to the difficulties of the timetable. However, I hope that my hon. Friends and the hon. Member for Blackburn will accept that I should like to look further at the possibilities,

  247
  without commitment, to see whether some solution that would involve the House with the designation of the principles, can be found. I say that in good faith.
  Amendments Nos. 14, 28 and 35 would restrict the rate limit setting orders under clause 4 to only one authority. I am well aware of the interest in the coverage of reports and orders under the Bill and the fears that there might be inadequate discussion if the composite reports and orders were taken as we envisaged. We had much discussion of this matter in Committee. We took the view that the Opposition have never been averse to the use of such composite powers in legislation for which they were responsible. My hon. Friend the Under-Secretary of State mentioned the Housing Rents and Subsidies Act 1975 and the Community Land Act 1975. Some of us remember the remarkable proposal made by Lord Glenamara, who suggested that all of our legislation should be done under general enabling Acts. The fact that that proposal was made by a former Labour Leader of the House casts some doubt on Labour's commitment to the concept of parliamentary debate.
  The rate support grant orders and the various supplementary reports which cover the full range of local authorities have traditionally been debated together in one order in a debate that lasts the whole day. I repeat the assurance that there will be adequate time for debate. I find it difficult to envisage circumstances in which it would not be appropriate for an order that covers designation and rate limiting to have a full day, but that must be a matter for discussion through the usual channels. There is no question of the Government trying to rush such a debate in one and a half hours up to 11.30 pm. Of course we shall examine authorities' individual circumstances when considering applications for redetermination, but we must take those decisions on a basis that is consistent for all authorities.
  It is important that the House ensures that there is consistency between local authorities and the levels that take account of their circumstances. It would be perfectly proper for the House to exercise its supervisory role over Ministers rather than try to substitute judgments for those of Ministers and those who advise us. I do not believe that a composite order would prevent proper discussion. That has not been my limited experience of rate support grant orders. My recollection is that we had an effective debate last January. The same would be the case for a rate setting order under the Bill.
  The fears that my hon. Friends and other have expressed are misplaced. The procedures, with the undertaking that I have given to look, without commitment, at the possibility of some form of procedure involving the House in the designation of principles will, I hope, enable the House to feel able to reject the amendment.
  Mr. Charles Morrison: I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendment proposed, No. 6, in page 2, line 23, after `report', insert 'or reports'.—[Mr. Straw.]
  Question put, That the amendment be made:—
  The House divided: Ayes 193, Noes 300.

  Divlsion No. 208]

  [11.20 pm

  AYES

  Adams, Allen (Paisley N)

  Anderson, Donald

  Alton, David

  Archer, Rt Hon Peter

  Ashdown, Paddy

  Harrison, Rt Hon Walter

  Ashley, Rt Hon Jack

  Hart, Rt Hon Dame Judith

  Atkinson, N. (Tottenham)

  Heffer, Eric S.

  Bagier, Gordon A. T.

  Hogg, N. (Cnauld & Kilsyth)

  Banks, Tony (Newham NW)

  Holland, Stuart (Vauxhall)

  Barnett, Guy

  Home Robertson, John

  Barron, Kevin

  Howells, Geraint

  Beckett, Mrs Margaret

  Hoyle, Douglas

  Beggs, Roy

  Hughes, Dr. Mark (Durham)

  Beith, A. J.

  Hughes, Robert (Aberdeen N)

  Bell, Stuart

  Hughes, Roy (Newport East)

  Benn, Tony

  Hughes, Sean (Knowsley S)

  Bennett, A. (Dent'n & Red'sh)

  Hughes, Simon (Southwark)

  Bermingham, Gerald

  Janner, Hon Greville

  Blair, Anthony

  Jenkins, Rt Hon Roy (Hillh'd)

  Boothroyd, Miss Betty

  John, Brynmor

  Boyes, Roland

  Johnston, Russell

  Bray, Dr Jeremy

  Jones, Barry (Alyn & Deeside)

  Brown, Gordon (D'f'mline E)

  Kaufman, Rt Hon Gerald

  Brown, Hugh D. (Provan)

  Kennedy, Charles

  Brown, N. (N'c'tle-u-Tyne E)

  Kirkwood, Archibald

  Brown, Ron (E'burgh, Leith)

  Lambie, David

  Bruce, Malcolm

  Lamond, James

  Callaghan, Jim (Heyw'd & M)

  Lewis, Ron (Carlisle)

  Campbell-Savours, Dale

  Lewis, Terence (Worsley)

  Canavan, Dennis

  Litherland, Robert

  Carlile, Alexander (Montg'y)

  Lloyd, Tony (Stretford)

  Carter-Jones, Lewis

  McCartney, Hugh

  Cartwright, John

  McDonald, Dr Oonagh

  Clark, Dr David (S Shields)

  McGuire, Michael

  Clarke, Thomas

  McKay, Allen (Penistone)

  Clay, Robert

  McKelvey, William

  Cocks, Rt Hon M. (Bristol S.)

  Mackenzie, Rt Hon Gregor

  Cohen, Harry

  McNamara, Kevin

  Coleman, Donald

  McTaggart, Robert

  Concannon, Rt Hon J. D.

  McWilliam, John

  Conlan, Bernard

  Madden, Max

  Cook, Frank (Stockton North)

  Marek, Dr John

  Cook, Robin F. (Livingston)

  Marshall, David (Shettleston)

  Corbett, Robin

  Martin, Michael

  Corbyn, Jeremy

  Mason, Rt Hon Roy

  Cowans, Harry

  Maxton, John

  Craigen, J. M.

  Maynard, Miss Joan

  Crowther, Stan

  Meadowcroft, Michael

  Cunliffe, Lawrence

  Michie, William

  Cunningham, Dr John

  Mikardo, Ian

  Dalyell, Tam

  Millan, Rt Hon Bruce

  Davies, Rt Hon Denzil (L'lli)

  Miller, Dr M. S. (E Kilbride)

  Davies, Ronald (Caerphiliy)

  Mitchell, Austin (G't Grimsby)

  Davis, Terry (B'ham, H'ge H'l)

  Morris, Rt Hon J. (Aberavon)

  Deakins, Eric

  Nellist, David

  Dobson, Frank

  O'Neill, Martin

  Dubs, Alfred

  Owen, Rt Hon Dr David

  Dunwoody, Hon Mrs G.

  Park, George

  Eadie, Alex

  Parry, Robert

  Eastham, Ken

  Patchett, Terry

  Ellis, Raymond

  Pavitt, Laurie

  Evans, John (St. Helens N)

  Pendry, Tom

  Ewing, Harry

  Penhaligon, David

  Fatchett, Derek

  Pike, Peter

  Faulds, Andrew

  Powell, Rt Hon J. E. (S Down)

  Field, Frank (Birkenhead)

  Powell, Raymond (Ogmore)

  Fields, T. (L'pool Broad Gn)

  Prescott, John

  Fisher, Mark

  Radice, Giles

  Flannery, Martin

  Randall, Stuart

  Foot, Rt Hon Michael

  Redmond, M.

  Forrester, John

  Richardson, Ms Jo

  Forsythe, Clifford (S Antrim)

  Roberts, Allan (Bootle)

  Foster, Derek

  Roberts, Ernest (Hackney N)

  Foulkes, George

  Robertson, George

  Fraser, J. (Norwood)

  Robinson, G. (Coventry NW)

  Freeson, Rt Hon Reginald

  Rogers, Allan

  Freud, Clement

  Ross, Ernest (Dundee W)

  Garrett, W. E.

  Ross, Wm. (Londonderry)

  George, Bruce

  Rowlands, Ted

  Godman, Dr Norman

  Ryman, John

  Gould, Bryan

  Sedgemore, Brian

  Hamilton, James (M'well N)

  Sheerman, Barry

  Hardy, Peter

  Shore, Rt Hon Peter

  Harman, Ms Harriet

  Short, Ms Clare (Ladywood)

  Short, Mrs R.(W'hampfn NE)

  Tinn, James

  Silkin, Rt Hon J.

  Torney, Tom

  Skinner, Dennis

  Wallace, James

  Smith, C.(Isl'ton S & F'bury)

  Wardell, Gareth (Gower)

  Smith, Rt Hon J. (M'kl'ds E)

  Wareing, Robert

  Smyth, Rev W. M. (Belfast S)

  Weetch, Ken

  Snape, Peter

  Welsh, Michael

  Soley, Clive

  White, James

  Spearing, Nigel

  Williams, Rt Hon A.

  Steel, Rt Hon David

  Winnick, David

  Stott, Roger

  Woodall, Alec

  Strang, Gavin

  Young, David (Bolton SE)

  Straw, Jack

  Thomas, Dafydd (Merioneth)

  Tellers for the Ayes:

  Thomas, Dr R. (Carmarthen)

  Mr. Frank Haynes and Mr. Don Dixon.

  Thompson, J. (Wansbeck)

  Thorne, Stan (Preston)

  Division No. 207]

  [9.36 pm

  AYES

  Adams, Allen (Paisley N)

  Corbett, Robin

  Alton, David

  Corbyn, Jeremy

  Anderson, Donald

  Cowans, Harry

  Archer, Rt Hon Peter

  Craigen, J. M.

  Ashdown, Paddy

  Crowther, Stan

  Ashley, Rt Hon Jack

  Cunliffe, Lawrence

  Atkinson, N. (Tottenham)

  Dalyell, Tam

  Bagier, Gordon A. T.

  Davies, Rt Hon Denzil (L'lli)

  Banks, Tony (Newham NW)

  Davies, Ronald (Caerphilly)

  Barnett, Guy

  Davis, Terry (B'ham, H'ge H'l)

  Barron, Kevin

  Deakins, Eric

  Beaumont-Dark, Anthony

  Dixon, Donald

  Beckett, Mrs Margaret

  Dobson, Frank

  Beggs, Roy

  Dubs, Alfred

  Beith, A. J.

  Dunwoody, Hon Mrs G.

  Bennett, A. (Dent'n & Red'sh)

  Eadie, Alex

  Benyon, William

  Eastham, Ken

  Bermingham, Gerald

  Edwards, Bob (W'h'mpt'n SE)

  Bidwell, Sydney

  Ellis, Raymond

  Blair, Anthony

  Evans, John (St. Helens N)

  Boothroyd, Miss Betty

  Ewing, Harry

  Boyes, Roland

  Fatchett, Derek

  Bray, Dr Jeremy

  Faulds, Andrew

  Brown, Gordon (D'f'mline E)

  Field, Frank (Birkenhead)

  Brown, Hugh D. (Provan)

  Fields, T. (L'pool Broad Gn)

  Brown, N. (N'c'tle-u-Tyne E)

  Fisher, Mark

  Brown, Ron (E'burgh, Leith)

  Flannery, Martin

  Bruce, Malcolm

  Forrester, John

  Buchan, Norman

  Forsythe, Clifford (S Antrim)

  Callaghan, Jim (Heyw'd & M)

  Foster, Derek

  Campbell-Savours, Dale

  Foulkes, George

  Canavan, Dennis

  Fraser, J. (Norwood)

  Carlile, Alexander (Montg'y)

  Freud, Clement

  Carter-Jones, Lewis

  Garrett, W. E.

  Cartwright, John

  George, Bruce

  Clark, Dr David (S Shields)

  Gilmour, Rt Hon Sir Ian

  Clarke, Thomas

  Godman, Dr Norman

  Clay, Robert

  Gould, Bryan

  Cocks, Rt Hon M. (Bristol S.)

  Hamilton, James (M'well N)

  Cohen, Harry

  Hardy, Peter

  Coleman, Donald

  Harman, Ms Harriet

  Concannon, Rt Hon J. D.

  Harrison, Rt Hon Walter

  Conlan, Bernard

  Hart, Rt Hon Dame Judith

  Cook, Frank (Stockton North)

  Haynes, Frank

  Cook, Robin F. (Livingston)

  Heffer, Eric S.

  NOES

  Adley, Robert

  Brandon-Bravo, Martin

  Aitken, Jonathan

  Bright, Graham

  Alexander, Richard

  Brinton, Tim

  Ancram, Michael

  Brittan, Rt Hon Leon

  Arnold, Tom

  Brown, M. (Brigg & Cl'thpes)

  Ashby, David

  Bruinvels, Peter

  Aspinwall, Jack

  Bryan, Sir Paul

  Atkins, Robert (South Ribble)

  Buck, Sir Antony

  Atkinson, David (B'm'th E)

  Budgen, Nick

  Baker, Nicholas (N Dorset)

  Butcher, John

  Baldry, Anthony

  Butterfill, John

  Banks, Robert (Harrogate)

  Carlisle, John (N Luton)

  Bellingham, Henry

  Carlisle, Kenneth (Lincoln)

  Bendall, Vivian

  Carttiss, Michael

  Best, Keith

  Chalker, Mrs Lynda

  Bevan, David Gilroy

  Chapman, Sydney

  Biffen, Rt Hon John

  Chope, Christopher

  Biggs-Davison, Sir John

  Churchill, W. S.

  Bonsor, Sir Nicholas

  Clark, Dr Michael (Rochford)

  Bottomley, Peter

  Clark, Sir W. (Croydon S)

  Bowden, Gerald (Dulwich)

  Clarke, Rt Hon K. (Rushcliffe)

  Boyson, Dr Rhodes

  Clegg, SirWalter

  Braine, Sir Bernard

  Cockeram, Eric

  NOES

  Adley, Robert

  Dunn, Robert

  Aitken, Jonathan

  Durant, Tony

  Alexander, Richard

  Eggar, Tim

  Alison, Rt Hon Michael

  Emery, Sir Peter

  Amery, Rt Hon Julian

  Evennett, David

  Ancram, Michael

  Eyre, Sir Reginald

  Arnold, Tom

  Fallon, Michael

  Ashby, David

  Farr, John

  Aspinwall, Jack

  Favell, Anthony

  Atkins, Robert (South Ribble)

  Fenner, Mrs Peggy

  Atkinson, David (B'm'th E)

  Finsberg, Sir Geoffrey

  Baker, Nicholas (N Dorset)

  Fletcher, Alexander

  Baldry, Anthony

  Fookes, Miss Janet

  Banks, Robert (Harrogate)

  Forman, Nigel

  Bellingham, Henry

  Forsyth, Michael (Stirling)

  Bendall, Vivian

  Fowler, Rt Hon Norman

  Bennett, Sir Frederic (T'bay)

  Fox, Marcus

  Best, Keith

  Fraser, Peter (Angus East)

  Bevan, David Gilroy

  Freeman, Roger

  Biffen, Rt Hon John

  Fry, Peter

  Biggs-Davison, Sir John

  Gale, Roger

  Bonsor, Sir Nicholas

  Galley, Roy

  Bottomley, Peter

  Gardiner, George (Reigate)

  Bowden, Gerald (Dulwich)

  Gardner, Sir Edward (Fylde)

  Boyson, Dr Rhodes

  Garel-Jones, Tristan

  Braine, Sir Bernard

  Glyn, Dr Alan

  Brandon-Bravo, Martin

  Goodhart, Sir Philip

  Bright, Graham

  Goodlad, Alastair

  Brinton, Tim

  Gorst, John

  Brittan, Rt Hon Leon

  Gow, Ian

  Brown, M. (Brigg & Cl'thpes)

  Gower, Sir Raymond

  Browne, John

  Grant, Sir Anthony

  Bruinvels, Peter

  Greenway, Harry

  Bryan, Sir Paul

  Gregory, Conal

  Buck, Sir Antony

  Griffiths, E. (B'y St Edm'ds)

  Budgen, Nick

  Griffiths, Peter (Portsm'th N)

  Burt, Alistair

  Grist, Ian

  Butcher, John

  Ground, Patrick

  Butterfill, John

  Grylls, Michael

  Carlisle, Kenneth (Lincoln)

  Gummer, John Selwyn

  Carttiss, Michael

  Hamilton, Neil (Tatton)

  Chalker, Mrs Lynda

  Hampson, Dr Keith

  Chapman, Sydney

  Hanley, Jeremy

  Chope, Christopher

  Hannam, John

  Churchill, W. S.

  Harvey, Robert

  Clark, Dr Michael (Rochford)

  Haselhurst, Alan

  Clark, Sir W. (Croydon S)

  Havers, Rt Hon Sir Michael

  Clarke, Rt Hon K. (Rushcliffe)

  Hawkins, Sir Paul (SW N'folk)

  Clegg, Sir Walter

  Hawksley, Warren

  Cockeram, Eric

  Hayes, J.

  Colvin, Michael

  Hayhoe, Barney

  Cope, John

  Hayward, Robert

  Corrie, John

  Heathcoat-Amory, David

  Couchman, James

  Heddle, John

  Cranborne, Viscount

  Henderson, Barry

  Currie, Mrs Edwina

  Hickmet, Richard

  Dicks, Terry

  Higgins, Rt Hon Terence L.

  Dorrell, Stephen

  Hill, James

  Douglas-Hamilton, Lord J.

  Hind, Kenneth

  Dover, Den

  Hirst, Michael

  du Cann, Rt Hon Edward

  Holland, Sir Philip (Gedling)

  Holt, Richard

  Osborn, Sir John

  Hooson, Tom

  Ottaway, Richard

  Hordern, Peter

  Page, John (Harrow W)

  Howard, Michael

  Page, Richard (Herts SW)

  Howarth, Gerald (Cannock)

  Parris, Matthew

  Howell, Rt Hon D. (G'ldford)

  Patten, John (Oxford)

  Howell, Ralph (N Norfolk)

  Pattie, Geoffrey

  Hubbard-Miles, Peter

  Pawsey, James

  Hunt, David (Wirral)

  Peacock, Mrs Elizabeth

  Hunt, John (Ravensbourne)

  Pink, R. Bonner

  Hunter, Andrew

  Pollock, Alexander

  Hurd, Rt Hon Douglas

  Porter, Barry

  Irving, Charles

  Powell, William (Corby)

  Jenkin, Rt Hon Patrick

  Powley, John

  Jessel, Toby

  Proctor, K. Harvey

  Johnson-Smith, Sir Geoffrey

  Rathbone, Tim

  Jones, Gwilym (Cardiff N)

  Rees, Rt Hon Peter (Dover)

  Jones, Robert (W Herts)

  Renton, Tim

  Joseph, Rt Hon Sir Keith

  Rhodes James, Robert

  Kershaw, Sir Anthony

  Ridley, Rt Hon Nicholas

  King, Roger (B'ham N'field)

  Ridsdale, Sir Julian

  King, Rt Hon Tom

  Rifkind, Malcolm

  Knight, Gregory (Derby N)

  Roberts, Wyn (Conwy)

  Knight, Mrs Jill (Edgbaston)

  Robinson, Mark (N'port W)

  Knowles, Michael

  Roe, Mrs Marion

  Lamont, Norman

  Rossi, Sir Hugh

  Lang, Ian

  Rost, Peter

  Latham, Michael

  Rowe, Andrew

  Lawler, Geoffrey

  Rumbold, Mrs Angela

  Lawrence, Ivan

  Ryder, Richard

  Lawson, Rt Hon Nigel

  Sackville, Hon Thomas

  Leigh, Edward (Gainsbor'gh)

  Sainsbury, Hon Timothy

  Lennox-Boyd, Hon Mark

  St. John-Stevas, Rt Hon N.

  Lester, Jim

  Sayeed, Jonathan

  Lilley, Peter

  Shaw, Sir Michael (Scarb')

  Lloyd, Ian (Havant)

  Shelton, William (Streatham)

  Lloyd, Peter, (Fareham)

  Shepherd, Colin (Hereford)

  Lord, Michael

  Shepherd, Richard (Aldridge)

  Lyell, Nicholas

  Silvester, Fred

  McCrindle, Robert

  Sims, Roger

  McCurley, Mrs Anna

  Skeet, T. H. H.

  Macfarlane, Neil

  Smith, Sir Dudley (Warwick)

  MacKay, Andrew (Berkshire)

  Smith, Tim (Beaconsfield)

  MacKay, John (Argyll & Bute)

  Soames, Hon Nicholas

  Maclean, David John

  Spencer, Derek

  McQuarrie, Albert

  Spicer, Michael (S Worcs)

  Major, John

  Stanbrook, Ivor

  Malins, Humfrey

  Stanley, John

  Malone, Gerald

  Steen, Anthony

  Maples, John

  Stern, Michael

  Marland, Paul

  Stevens, Lewis (Nuneaton)

  Marlow, Antony

  Stevens, Martin (Fulham)

  Maude, Hon Francis

  Stewart, Allan (Eastwood)

  Mawhinney, Dr Brian

  Stewart, Andrew (Sherwood)

  Maxwell-Hyslop, Robin

  Stewart, lan (N Hertf'dshire)

  Mayhew, Sir Patrick

  Stokes, John

  Mellor, David

  Stradling Thomas, J.

  Merchant, Piers

  Sumberg, David

  Miller, Hal (B'grove)

  Tapsell, Peter

  Mills, Iain (Meriden)

  Taylor, Teddy (S'end E)

  Mills, Sir Peter (West Devon)

  Tebbit, Rt Hon Norman

  Miscampbell, Norman

  Temple-Morris, Peter

  Mitchell, David (NW Hants)

  Terlezki, Stefan

  Moate, Roger

  Thomas, Rt Hon Peter

  Monro, Sir Hector

  Thompson, Patrick (N'ich N)

  Montgomery, Fergus

  Thornton, Malcolm

  Moore, John

  Thurnham, Peter

  Morrison, Hon P. (Chester)

  Townend, John (Bridlington)

  Moynihan, Hon C.

  Townsend, Cyril D. (B'heath)

  Mudd, David

  Tracey, Richard

  Murphy, Christopher

  Trotter, Neville

  Neale, Gerrard

  Twinn, Dr Ian

  Nelson, Anthony

  van Straubenzee, Sir W.

  Neubert, Michael

  Vaughan, Sir Gerard

  Newton, Tony

  Waddington, David

  Nicholls, Patrick

  Wakeham, Rt Hon John

  Norris, Steven

  Waldegrave, Hon William

  Onslow, Cranley

  Walker, Bill (T'side N)

  Oppenheim, Philip

  Walker, Rt Hon P. (W'cester)

  Oppenheim, Rt Hon Mrs S.

  Waller, Gary

  Walters, Dennis

  Wilkinson, John

  Ward, John

  Wolfson, Mark

  Wardle, C. (Bexhill)

  Wood, Timothy

  Warren, Kenneth

  Woodcock, Michael

  Watson, John

  Yeo, Tim

  Watts, John

  Young, Sir George (Acton)

  Wells, Bowen (Hertford)

  Younger, Rt Hon George

  Wells, John (Maidstone)

  Wheeler, John

  Tellers for the Noes:

  Whitfield, John

  Mr. Carol Mather and Mr. Robert Boscawen.

  Whitney, Raymond

  Question accordingly negatived.

Clause 4

  DETERMINATION OF MAXIMUM RATE OF PRECEPT
  11.30 pm
  Mr. Cartwright: I beg to move amendment No. 11, in page 4, leave out lines 35 and 36.
  The amendment is tabled to draw attention to the extremely detailed powers of interference which the Secretary of State will have if the Bill is carried in its present form. Clause 4(2) provides that when the Secretary of State is determining the maximum rate or precept to be fixed by a designated authority he
  "may take into account any financial reserves available to the authority."
  Nowhere in the Bill is there any definition of what "financial reserves" may be. In Committee the Under-Secretary was frank enough to say that the provision had been drawn in a vague way to enable the Government to draw into their net as many of those little pots of gold tucked away in squirrel holes in town halls as the Secretary of State could find. It is clear that many detailed reserves will be caught up in this provision if it is left in its present form.
  There is, for example, the general rate fund balance. I was brought up in local government to refer to that as the working balance. It tends to be built up and to be raided to raise or lower the level of the rate, a skill which anyone in local government has to learn before becoming chairman of a finance committee. The balance must have sufficient funds in it to meet emergencies and other unforeseen demands. Maintaining that balance calls for an element of judgment based on experience of local circumstances.
  Secondly, there is the housing revenue account, which is used to deal with the income and expenditure of a local authority's council housing. One needs the balance to be maintained at a sensible level to deal with the problems of management and maintenance of local authority housing and the capacity to meet unexpected problems in that housing. Again, that needs an element of judgment based on a knowledge of local circumstances.
  Thirdly, there is the repair and renewals fund, which is established to meet the costs of planned maintenance of buildings and the repair and replacement of vehicles, plant and machinery. The fund is established as a sensible and prudent piece of housekeeping. The balance of the fund depends on a judgment of the condition and serviceability of buildings, plant and similar assets.
  Lastly, there is the capital fund, which is sometimes built up by contributions from revenue and sometimes from the sale of capital assets. It is used to reduce interest
  252
  charges on existing loans or to fund capital schemes, and once again that flows from a level of local knowledge and experience.
  My objection to the provision is that the Secretary of State, without local experience, will have power to determine what is a proper and sensible level.
  The setting of prudent balances is a matter for political judgment. Some may say that it is a matter of political manipulation and others that it involves the fine tuning of the local budget. I do not believe that it is right or proper for the Secretary of State to be sucked into such extremely detailed local decisions.
  The Government said on the last amendment that it was wrong for civil servants to take all the decisions. It is difficult to believe that the Secretary of State will sit up late one night with his cup of cocoa and 25 sets of local authority accounts trying to sort out a sensible level of housing repair and maintenance in the London borough of Lambeth, for example.
  Mr. Powley: I must press the hon. Gentleman on the argument that he is developing. Perhaps he can give the House the benefit of his wisdom. What does he consider to be a prudent balance in local authority expenditure on the housing revenue account or the general rate fund account?
  Mr. Cartwright: That intervention misses my point. Only on the basis of local knowledge and experience can such a judgment be made. Even those who seek to make that judgment locally can get it wrong. When they get it wrong, the electors exert retribution. If the Secretary of State gets it wrong, he will not be subject to the will of local electors or ratepayers. We are talking about exercising a political judgment based on local knowledge and experience. I cannot believe that such a judgment can be exercised by the Secretary of State. Frankly, I do not believe that it will be exercised by the Secretary of State, although I heard what he said earlier this evening.
  In the real world, civil servants in the Department will do the job. It is unfair that civil servants should be exposed to making such difficult and sensitive decisions about proper and sensible levels of reserves in the various and detailed accounts. I cannot believe that it is good for local government for central Government to become involved in this way. This is a classic case of Whitehall getting its fingers into detailed local authority tills. That is a great mistake, and I commend the amendment to the House.
  Mr. Michael Stern: I should first declare an interest in the subject of the debate as a chartered accountant and a partner in the firm of Halpern and Woolf, chartered accountants.
  I shall address myself to the subject matter to which the amendment is related in the context that, unlike the proponent of the amendment, if anything I would castigate the Government for not going nearly far enough in the powers that they seek to take under the clause in looking at the areas of financial accounting of local authorities that are capable of what is called "creative accounting" nowadays.
  In the Bill there is no definition of the term "expenditure" that the Minister will look at in deciding on the authorities to be made the subject of action under the clause. I accept that there are difficulties in defining "expenditure", when the accounting bodies have been unable to agree on a satisfactory definition, and the

  253
  Minister would be reluctant to impose a definition on them. Because there is no definition, it is essential and inevitable that the Secretary of State should take powers to look at areas that are essential for a study of the expenditure of a particular authority.
  If the amendment were passed, it would render the Secretary of State powerless in deciding on the appropriate level of expenditure for a particular authority and whether that level of expenditure as declared by the authority bore any relation whatsoever to reality.
  I shall describe one or two of the areas where it would be possible for an authority, with or without appropriate advice, so to fudge its expenditure for the year in which it suspects it is being considered for action under the Bill that it could manipulate the figures legally to justify its dropping out from consideration by the Secretary of State. It would be able to look again at its definition of the difference between capital and revenue expenditure. That definition is extremely woolly. To do so, it could use its balances to aid it in this exercise.
  The local authority would be able to redefine the areas of expenditure that it decides to apply to areas covered by specific grant in a way that it has not done in the past. There is nothing in the Bill to stop the local authority doing so. It would be able to redefine the date on which it takes creditors into account, and doing so, legally, would have a major impact on its expenditure for the year in which it suspects it is subject to potential action. It would be able to run down its stocks of such items as stationery and consumables without any effect other than as brought in by the balances, which the amendment seeks to withdraw from consideration. It would be able to take a slightly rosier view than in the past of the value of its debtors—again, without there being any control under the Bill. Finally, it would be able to ignore, under the strict wording of the Bill, any audit qualifications that are imposed on it either by the district auditor or by the Audit Commission.
  The powers given to the Secretary of State under the clause as it stands are weak enough. The amendment would make them totally nugatory. I should like to hear from the Minister when he sums up that he considers that he has sufficient powers, under the general powers in the Bill, to be able to take action against authorities that are tempted to consider the action that I mentioned. I hope that we shall hear from the Minister that, far from accepting the amendment, he will move in the opposite direction and warn local authorities that if there is any attempt to use creative accounting, whether through the use of balances or any other means I mentioned, the Secretary of State will be able to negate that use of accounting by which local authorities might escape from the effects of the Bill.
  Mr. Cowans: I welcome the hon. Member for Bristol, North-West (Mr. Stern) to the debate. He did not attend debates on the other controversial, constitutional issues, but at least he is here for this debate.
  The Bill refers to "financial reserves". Nowhere does it define what "financial reserves" are. The hon. Gentleman portrayed all local government as a bunch of twisters. I do not believe that for one moment. It would have been better if the hon. Gentleman had said that the Government should define clearly what "financial reserves" are. I have news for him. There is no definition of "financial reserves" in any other statute introduced by
  254
  the Conservative Government or the Labour Government. Local authorities are not a bunch of twisters. They work very hard and do not seek to twist the books, contrary to what the hon. Member for Bristol, North-West said. They are very prudent.
  11.45 pm
  It is prudent that a local authority should build up a reserve of many items. A local authority, led by its financial officer, looks ahead and builds up a reserve to cover, for example, pay awards and the cost of inflation, which, like the Oxford boat crew, goes up and down. If the local authorities have a financial reserve, they may not be caught by inflation.
  The Bill is supposed to be about incentives. Conservative Members have frequently talked about "prudent", "safeguarding" authorities which are "looking after the ratepayers' interests" and are "not profligate spenders". Those local authorities are, however, penalised as soon as they seek to look after their reserves to take account of what happens in the real world. If Conservative Members are honest in their intentions, what is the incentive for any local authority to be prudent? A prudent local authority will build up a financial reserve against a rainy day. After the Bill is passed, all days will be rainy, so there will be a greater need for a financial reserve.
  Many of the elements necessary to achieve a good financial reserve, such as interest rates—Conservative Members should know all about that—do not lie within the control of local authorities. Why penalise a local authority, which over the years has garnered, prudently obtained value for money, husbanded its money and built up a financial reserve? What big business, which Conservative Members are supposed to represent, does not have a financial reserve, look towards the future and put something by for a rainy day? Is big business penalised for doing that? According to the Conservatives' own rules, why penalise a local authority for doing what is all right for the barons of industry?
  The Under-Secretary of State should clearly define financial reserves and tell local authorities, "It is good management and housekeeping if you save for a rainy day, and we shall not penalise you," or reject completely the argument that financial reserves will be penalised. Perhaps next year there will be a Bill to penalise all the businesses that are prudent, build up financial reserves and save for a rainy day. There may be some justice in the hon. Gentleman doing that. If he does not do it, there will be no justice.
  Mr. Waldegrave: The speech of the hon. Member for Tyne Bridge (Mr. Cowans) reminded us of many happy hours in Committee. I can explain why my hon. Friend the Member for Bristol, North-West (Mr. Stern) is so sensitive about these matters. His reason is the same as mine. He has avidly been studying what has been happening in the county of Avon. He may share, for slightly different reasons, the embarrassment of some council officers at the crowing by some of the politicians in the Avon Labour group over their cleverness with the reserves. Of course, they have not been very clever. In the end they will be caught out. They have merely put off the evil hour. That is what caused my hon. Friend's worries, and I sympathise with him.
  It also enables me to make a point to some of my hon. Friends who dislike the Bill that there are pressures from some members of the Conservative party who say that the

  255
  powers that we are giving ourselves are only just enough to deal with the abuses that we face. They want to be sure that we are giving ourselves sufficient powers.
  One reason why we need powers over reserves is that a number of my right hon. and hon. Friends wrote to my right hon. Friend and myself when we introduced the Bill and told us to watch out because local authorities would rate up in the year before the Bill was enacted and would then use their reserves to avoid the Bill's impact. I am glad to say that the message has got across and I do not think that that has happened, because we have seen low rate increases this year.
  Mr. Richard Holt: Some of the local authorities that my hon. Friend has mentioned have taken note, but Cleveland county council has increased its precept this year by 20 per cent.
  Mr. Waldegrave: I am sorry to hear that. My hon. Friend the Member for Bristol, North-West is right. The powers in the Bill are necessary to make a real linkage between the expenditure level and the rate. If there were no such powers, all manner of weaknesses would be introduced into the linkage.
  I hope that I can console the hon. Member for Tyne Bridge. I spent many hours trying to do so in Committee, but not always with complete success. One of the other reasons for having the powers over the reserves is to meet the point that he makes. We do not wish to preclude the authorities that may be rate-capped from being in the position of those admirable barons of industry to whom the hon. Member referred. That might be a reference to the owner of Oxford United football club or someone of that kind. The local authorities must have proper reserves, and it is essential that the Secretary of State, when setting the expenditure limit for a rate-capped authority, should be able to make provision for proper reserves. He would not be able to do that without the proposed powers over reserves.
  The matter works both ways. The Secretary of State must ensure that there is no what the hon. Member for Tyne Bridge toughly referred to as "twisting" and also that there is a prudent level of reserves.
  Mr. Cowans: I see that, but the proper person to take that decision is the financial officer of the local authority.The Government are superseding that financial officer and taking over. The Minister has just said that he does not believe that he has sufficient powers. Are we already seeing the draft of the 1985 Bill?
  Mr. Waldegrave: I was hoping to persuade my hon. Friend the Member for Bristol, North West that we have sufficient powers. I cannot deny that the Bill takes powers over local authorities. The hon. Member for Tyne Bridge discussed that matter for some hours, and I am not going to try to deny it now. It is an essential part of the Bill. We must argue that it is plainly necessary——
  Sir Geoffrey Finsberg: May I ask my hon. Friend not to agree too much with the hon. Member for Tyne Bridge (Mr. Cowans), because I thought that the oldest maxim in local government was to let the ratepayers' money fructify in their pockets and not in local authorities' large and ever-increasing prudent balances?
  Mr. Waldegrave: My hon. Friend is entirely right. I think that the number of occasions when he will find that
  256
  the reserves in a rate-capping authority are too low will be outnumbered by the number of occasions when it can return to the ratepayers money that should rightfully be back in their pockets.
  We talk all the time as though they were local authority reserves. They are no such thing. Ratepayers' money which should be returned to them is sitting in bank balances.
  It is essential to have the powers. The attempt to knock them out, which I thought was one of the weaker amendments to which the Committee had to listen, remains one of the weaker amendments when it comes before the House. I have no hesitation in asking my right hon. and hon. Friends to reject the amendment.
  Dr. Cunningham: I listened with some amusement to the contribution of the hon. Member for Bristol, North-West (Mr. Stern), who described himself as an accountant. If it has taken the introduction of the Bill to make him aware of the various facets of creative accountancy in the City and elsewhere as well as in local government, do not know what he has been doing in his profession in the past few years.
  The hon. Member made a sanctimonious speech about the situation in local government, but I do not believe for a moment that Conservative Members believe that it is better for local authority balances to be controlled by the Secretary of State or his officials in Whitehall than by the authority's finance committee and director of finance., because in most, if not all, cases the Secretary of State and his officials will have no real knowledge or understanding of the situation in that authority.
  Far from this part of the Bill being a safeguard for ratepayers and local authority services, it is the reverse. It shows that there are no lengths to which the Government will not go to take absolute control over the budgets of local government even down to the balances and reserves and to remove flexibility and room for manoeuvre from the attempts of local councils and their directors of finance to mitigate the worst aspects of the cuts in rate support grant and the other financial penalties imposed on them by the Government.
  It is monstrous for the Under-Secretary of State, the author of a famous book about the powers of Ministers accruing more and more to the centre of Government and Whitehall, to say that even in the marginal case of local government balances and reserves Ministers should have the last word and the power to dictate the fate and use of those balances. We reject his arguments not just as doctrinaire and contrary to his own views but as fatuous and impracticable. We shall therefore support the amendment moved by the hon. Member for Woolwich (Mr. Cartwright).
  Question put, That the amendment be made:—
  The House divided: Ayes 180, Noes 297.

  Division No. 209]

  [11.57 p.m.

  AYES

  Adams, Allen (Paisley N)

  Barron, Kevin

  Alton, David

  Beckett, Mrs Margaret

  Anderson, Donald

  Beith, A. J.

  Archer, Rt Hon Peter

  Bell, Stuart

  Ashdown, Paddy

  Bennett, A. (Dent'n & Red'sh)

  Ashton, Joe

  Bermingham, Gerald

  Atkinson, N. (Tottenham)

  Blair, Anthony

  Bagier, Gordon A. T.

  Boothroyd, Miss Betty

  Banks, Tony (Newham NW)

  Boyes, Roland

  Barnett, Guy

  Bray, Dr Jeremy

  NOES

  Adley, Robert

  Forsyth, Michael (Stirling)

  Aitken, Jonathan

  Fowler, Rt Hon Norman

  Alexander, Richard

  Fox, Marcus

  Alison, Rt Hon Michael

  Fraser, Peter (Angus East)

  Amery, Rt Hon Julian

  Freeman, Roger

  Ancram, Michael

  Fry, Peter

  Arnold, Tom

  Gale, Roger

  Ashby, David

  Galley, Roy

  Aspinwall, Jack

  Gardiner, George (Reigate)

  Atkins, Robert (South Ribble)

  Gardner, Sir Edward (Fylde)

  Atkinson, David (B'm'th E)

  Garel-Jones, Tristan

  Baker, Nicholas (N Dorset)

  Glyn, Dr Alan

  Baldry, Anthony

  Goodhart, Sir Philip

  Banks, Robert (Harrogate)

  Goodlad, Alastair

  Bellingham, Henry

  Gorst, John

  Bendall, Vivian

  Gow, Ian

  Best, Keith

  Gower, Sir Raymond

  Bevan, David Gilroy

  Grant, Sir Anthony

  Biffen, Rt Hon John

  Greenway, Harry

  Biggs-Davison, Sir John

  Gregory, Conal

  Blaker, Rt Hon Sir Peter

  Griffiths, E. (B'y St Edm'ds)

  Bonsor, Sir Nicholas

  Griffiths, Peter (Portsm'th N)

  Bottomley, Peter

  Grist, Ian

  Bowden, Gerald (Dulwich)

  Ground, Patrick

  Boyson, Dr Rhodes

  Grylls, Michael

  Braine, Sir Bernard

  Gummer, John Selwyn

  Brandon-Bravo, Martin

  Hamilton, Neil (Tatton)

  Bright, Graham

  Hampson, Dr Keith

  Brinton, Tim

  Hanley, Jeremy

  Brittan, Rt Hon Leon

  Hannam, John

  Brown, M. (Brigg & Cl'thpes)

  Harvey, Robert

  Browne, John

  Haselhurst, Alan

  Bruinvels, Peter

  Havers, Rt Hon Sir Michael

  Bryan, Sir Paul

  Hawkins, Sir Paul (SW N'folk)

  Buck, Sir Antony

  Hawksley, Warren

  Budgen, Nick

  Hayes, J.

  Burt, Alistair

  Hayhoe, Barney

  Butcher, John

  Hayward, Robert

  Butterfill, John

  Heathcoat-Amory, David

  Carlisle, John (N Luton)

  Heddle, John

  Carlisle, Kenneth (Lincoln)

  Henderson, Barry

  Carttiss, Michael

  Hickmet, Richard

  Chalker, Mrs Lynda

  Higgins, Rt Hon Terence L.

  Chapman, Sydney

  Hill, James

  Chope, Christopher

  Hind, Kenneth

  Churchill, W. S.

  Hirst, Michael

  Clark, Dr Michael (Rochford)

  Holland, Sir Philip (Gedling)

  Clark, Sir W. (Croydon S)

  Holt, Richard

  Clarke, Rt Hon K. (Rushcliffe)

  Hooson, Tom

  Cockeram, Eric

  Hordern, Peter

  Colvin, Michael

  Howard, Michael

  Cope, John

  Howarth, Gerald (Cannock)

  Corrie, John

  Howell, Rt Hon D. (G'ldford)

  Couchman, James

  Howell, Ralph (N Norfolk)

  Cranborne, Viscount

  Hubbard-Miles, Peter

  Currie, Mrs Edwina

  Hunt, David (Wirral)

  Dicks, Terry

  Hunt, John (Ravensbourne)

  Dorrell, Stephen

  Hunter, Andrew

  Douglas-Hamilton, Lord J.

  Hurd, Rt Hon Douglas

  Dover, Den

  Irving, Charles

  du Cann, Rt Hon Edward

  Jenkin, Rt Hon Patrick

  Dunn, Robert

  Jessel, Toby

  Durant, Tony

  Johnson-Smith, Sir Geoffrey

  Eggar, Tim

  Jones, Gwilym (Cardiff N)

  Emery, Sir Peter

  Jones, Robert (W Herts)

  Evennett, David

  Joseph, Rt Hon Sir Keith

  Eyre, Sir Reginald

  Kershaw, Sir Anthony

  Fallon, Michael

  King, Roger (B'ham N'field)

  Farr, John

  King, Rt Hon Tom

  Favell, Anthony

  Knight, Gregory (Derby N)

  Fenner, Mrs Peggy

  Knight, Mrs Jill (Edgbaston)

  Finsberg, Sir Geoffrey

  Knowles, Michael

  Fletcher, Alexander

  Lamont, Norman

  Fookes, Miss Janet

  Lang, Ian

  Forman, Nigel

  Latham, Michael

  Brown, Gordon (D'f'mline E)

  Kirkwood, Archibald

  Brown, Hugh D. (Provan)

  Lambie, David

  Brown, N. (N'c'tle-u-Tyne E)

  Lamond, James

  Brown, Ron (E'burgh, Leith)

  Lewis, Ron (Carlisle)

  Bruce, Malcolm

  Lewis, Terence (Worsley)

  Callaghan, Jim (Heyw'd & M)

  Litherland, Robert

  Campbell-Savours, Dale

  Lloyd, Tony (Stretford)

  Canavan, Dennis

  McDonald, Dr Oonagh

  Carlile, Alexander (Montg'y)

  McGuire, Michael

  Carter-Jones, Lewis

  McKay, Allen (Penistone)

  Clark, Dr David (S Shields)

  McKelvey, William

  Clarke, Thomas

  Mackenzie, Rt Hon Gregor

  Clay, Robert

  McNamara, Kevin

  Cocks, Rt Hon M. (Bristol S.)

  McTaggart, Robert

  Cohen, Harry

  McWilliam, John

  Coleman, Donald

  Madden, Max

  Concannon, Rt Hon J. D.

  Marek, Dr John

  Conlan, Bernard

  Marshall, David (Shettleston)

  Cook, Frank (Stockton North)

  Martin, Michael

  Cook, Robin F. (Livingston)

  Maxton, John

  Corbett, Robin

  Maynard, Miss Joan

  Corbyn, Jeremy

  Meacher, Michael

  Cowans, Harry

  Michie, William

  Craigen, J. M.

  Mikardo, Ian

  Crowther, Stan

  Millan, Rt Hon Bruce

  Cunliffe, Lawrence

  Miller, Dr M. S. (E Kilbride)

  Cunningham, Dr John

  Mitchell, Austin (G't Grimsby)

  Davies, Rt Hon Denzil (L'lli)

  Morris, Rt Hon J. (Aberavon)

  Davies, Ronald (Caerphilly)

  Nellist, David

  Davis, Terry (B'ham, H'ge H'l)

  O'Neill, Martin

  Deakins, Eric

  Park, George

  Dixon, Donald

  Parry, Robert

  Dobson, Frank

  Patchett, Terry

  Dubs, Alfred

  Pavitt, Laurie

  Dunwoody, Hon Mrs G.

  Pendry, Tom

  Eadie, Alex

  Penhaligon, David

  Eastham, Ken

  Pike, Peter

  Evans, John (St. Helens N)

  Powell, Raymond (Ogmore)

  Ewing, Harry

  Prescott, John

  Fatchett, Derek

  Radice, Giles

  Faulds, Andrew

  Randall, Stuart

  Field, Frank (Birkenhead)

  Redmond, M.

  Fields, T. (L'pool Broad Gn)

  Richardson, Ms Jo

  Fisher, Mark

  Roberts, Allan (Bootle)

  Flannery, Martin

  Roberts, Ernest (Hackney N)

  Foot, Rt Hon Michael

  Robertson, George

  Forrester, John

  Robinson, G. (Coventry NW)

  Foster, Derek

  Ross, Ernest (Dundee W)

  Foulkes, George

  Rowlands, Ted

  Fraser, J. (Norwood)

  Ryman, John

  Freeson, Rt Hon Reginald

  Sedgemore, Brian

  Freud, Clement

  Sheerman, Barry

  Garrett, W. E.

  Sheldon, Rt Hon R.

  George, Bruce

  Shore, Rt Hon Peter

  Godman, Dr Norman

  Short, Ms Clare (Ladywood)

  Gould, Bryan

  Silkin, Rt Hon J.

  Hamilton, James (M'well N)

  Skinner, Dennis

  Hardy, Peter

  Smith, C.(Isl'ton S & F'bury)

  Harman, Ms Harriet

  Smith, Rt Hon J. (M'kl'ds E)

  Harrison, Rt Hon Walter

  Snape, Peter

  Hart, Rt Hon Dame Judith

  Soley, Clive

  Haynes, Frank

  Steel, Rt Hon David

  Hogg, N. (C'nauld & Kilsyth)

  Stott, Roger

  Holland, Stuart (Vauxhall)

  Strang, Gavin

  Home Robertson, John

  Straw, Jack

  Howells, Geraint

  Thomas, Dafydd (Merioneth)

  Hoyle, Douglas

  Thomas, Dr R. (Carmarthen)

  Hughes, Dr. Mark (Durham)

  Thompson, J. (Wansbeck)

  Hughes, Robert (Aberdeen N)

  Thorne, Stan (Preston)

  Hughes, Roy (Newport East)

  Tinn, James

  Hughes, Sean (Knowsley S)

  Torney, Tom

  Hughes, Simon (Southwark)

  Wallace, James

  Janner, Hon Greville

  Wardell, Gareth (Gower)

  Jenkins, Rt Hon Roy (Hillh'd)

  Wareing, Robert

  John, Brynmor

  Weetch, Ken

  Johnston, Russell

  Welsh, Michael

  Jones, Barry (Alyn & Deeside)

  White, James

  Kaufman, Rt Hon Gerald

  Williams, Rt Hon A.

  Kennedy, Charles

  Winnick, David

  Woodall, Alec

  Tellers for the Ayes:

  Young, David (Bolton SE)

  Mr. John Cartwright and Mr. Michael Meadowcroft

  Lawler, Geoffrey

  Murphy, Christopher

  Lawrence, Ivan

  Neale, Gerrard

  Lawson, Rt Hon Nigel

  Nelson, Anthony

  Leigh, Edward (Gainsbor'gh)

  Neubert, Michael

  Lennox-Boyd, Hon Mark

  Newton, Tony

  Lester, Jim

  Norris, Steven

  Lilley, Peter

  Onslow, Cranley

  Lloyd, lan (Havant)

  Oppenheim, Philip

  Lloyd, Peter, (Fareham)

  Oppenheim, Rt Hon Mrs S.

  Lord, Michael

  Osborn, Sir John

  Lyell, Nicholas

  Ottaway, Richard

  McCrindle, Robert

  Page, John (Harrow W)

  McCurley, Mrs Anna

  Page, Richard (Herts SW)

  Macfarlane, Neil

  Parris, Matthew

  MacKay, Andrew (Berkshire)

  Patten, John (Oxford)

  MacKay, John (Argyll & Bute)

  Pattie, Geoffrey

  Maclean, David John

  Pawsey, James

  McQuarrie, Albert

  Peacock, Mrs Elizabeth

  Major, John

  Pink, R. Bonner

  Malins, Humfrey

  Pollock, Alexander

  Malone, Gerald

  Porter, Barry

  Maples, John

  Powell, William (Corby)

  Marland, Paul

  Powley, John

  Marlow, Antony

  Proctor, K. Harvey

  Maude, Hon Francis

  Rathbone, Tim

  Mawhinney, Dr Brian

  Rees, Rt Hon Peter (Dover)

  Maxwell-Hyslop, Robin

  Renton, Tim

  Mayhew, Sir Patrick

  Rhodes James, Robert

  Mellor, David

  Ridley, Rt Hon Nicholas

  Merchant, Piers

  Ridsdale, Sir Julian

  Miller, Hal (B'grove)

  Rifkind, Malcolm

  Mills, lain (Meriden)

  Roberts, Wyn (Conwy)

  Mills, Sir Peter (West Devon)

  Robinson, Mark (N'port W)

  Miscampbell, Norman

  Roe, Mrs Marion

  Mitchell, David (NW Hants)

  Rossi, Sir Hugh

  Moate, Roger

  Rost, Peter

  Monro, Sir Hector

  Rowe, Andrew

  Montgomery, Fergus

  Rumbold, Mrs Angela

  Moore, John

  Ryder, Richard

  Morrison, Hon P. (Chester)

  Sackville, Hon Thomas

  Moynihan, Hon C.

  Sainsbury, Hon Timothy

  Mudd, David

  St. John-Stevas, Rt Hon N.

  Sayeed, Jonathan

  Townsend, Cyril D. (B'heath)

  Shaw, Sir Michael (Scarb')

  Tracey, Richard

  Shelton, William (Streatham)

  Trotter, Neville

  Shepherd, Colin (Hereford)

  Twinn, Dr Ian

  Shepherd, Richard (Aldridge)

  van Straubenzee, Sir W.

  Silvester, Fred

  Vaughan, Sir Gerard

  Sims, Roger

  Waddington, David

  Skeet, T. H. H.

  Wakeham, Rt Hon John

  Smith, Sir Dudley (Warwick)

  Waldegrave, Hon William

  Smith, Tim (Beaconsfield)

  Walker, Bill (T'side N)

  Soames, Hon Nicholas

  Waller, Gary

  Spencer, Derek

  Walters, Dennis

  Spicer, Michael (S Worcs)

  Ward, John

  Stanbrook, Ivor

  Wardle, C. (Bexhill)

  Stanley, John

  Warren, Kenneth

  Stern, Michael

  Watson, John

  Stevens, Lewis (Nuneaton)

  Watts, John

  Stevens, Martin (Fulham)

  Wells, Bowen (Hertford)

  Stewart, Allan (Eastwood)

  Wells, John (Maidstone)

  Stewart, Andrew (Sherwood)

  Wheeler, John

  Stewart, Ian (N Hertf'dshire)

  Whitfield, John

  Stokes, John

  Whitney, Raymond

  Stradling Thomas, J.

  Wilkinson, John

  Sumberg, David

  Wolfson, Mark

  Tapsell, Peter

  Wood, Timothy

  Taylor, Teddy (S'end E)

  Woodcock, Michael

  Tebbit, Rt Hon Norman

  Yeo, Tim

  Temple-Morris, Peter

  Young, Sir George (Acton)

  Terlezki, Stefan

  Younger, Rt Hon George

  Thomas, Rt Hon Peter

  Thompson, Patrick (N'ich N)

  Tellers for the Noes:

  Thornton, Malcolm

  Mr. Carol Mather and Mr. Robert Boscawen.

  Thurnham, Peter

  Townend, John (Bridlington)

  Question accordingly negatived.
  It being after Twelve o'clock, further consideration of the Bill adjourned, pursuant to order [29 February].
  Bill, as amended (in the Standing Committee), to be further considered this day.

  Public Records (Commission for the New Towns)
  Motion made and Question proposed,
  That the draft Public Records (Commission for the New Towns) Order 1984, which was laid before this House on 5th March, be approved.—[The Solicitor-General.]
  12.9 am
  Mr. Christopher Murphy: I rise briefly to support this order, because I believe it to be both right and desirable that new town records should be placed in the public domain. Clearly such documents have intrinsic value for research into the growth of the new towns themselves, and their social and economic impact on the surrounding areas provides insight into town planning methods and traces the evolution of post-war approaches to such urban problems as congestion and overcrowding.
  The new towns movement has ever been the source of controversy. For some, they remain the idealism to achieve social planning; for others, they have become the reality for a better life style.
  My constituency has two such new towns, Welwyn Garden City and Hatfield, and the release of these records will do much to show the successes or otherwise of these examples of the new town concept. Indeed, my constituents in a number of cases came from the very opposite environment, that of urban decay in areas such as the east end of London, and in Bethnal Green and Bow in the two 1974 general elections I had the opportunity to meet many of them before seeing them again in Hertfordshire.
  The purpose of Hatfield was to serve the nearby aircraft industry, diversifying employment and taking "overspill" from London. The purpose of Welwyn Garden City was also to provide such overspill facilities, but this time it was attached to the existing private enterprise creation of Ebenezer Howard. Both have been brought together under one local government authority, as have the surrounding villages and countryside, to provide a mixed urban and rural community in mid-Hertfordshire.
  By invoking the Public Records, Act with regard to these documents, many of the aspects of these two new towns will be permitted fresh analysis. Such information will do much to ensure that future developments can learn from the lessons of the past.
  There can be little doubt that new towns such as Welwyn Garden City and Hatfield have given a far better quality of life to many families, albeit at the expense of the countryside and to the detriment of inner cities. However, the overriding concerns must be for the welfare and benefit of those people who have come to live in the district. The records will help to explain the imbalance in facilities for differing age groups—an emphasis on the young and their education, and a neglect for the ageing population. Now there are the agonies of adjusting the provision of schools to falling rolls and the difficulties of finding sufficient accommodation for the elderly sick.
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  The records will help to explain the imbalance in the housing stock between rented and private accommodation and in terms of commercial buildings and shops. Now the right to buy is a welcome step in overcoming the serious shortage of homes to purchase, as is the sale of commission assets to increase local ownership and generate redevelopment.
  The records will help to explain the imbalance in travel opportunities for commuters and local workers alike. Now the need to improve the A l(M), to provide the train system to and from London with better services and station accommodation, and to restructure the bus timetable have all become necessities but with the seemingly inevitable accompanying difficulties.
  The records will also point to the attraction of new technology industries, of pharmaceutical companies, and spin-off enterprise from aerospace, providing increased and enhanced employment opportunities. The records will also point to good leisure facilities and an appreciation of the importance of the green belt. They will also point to a recognition of the need for modern health service and further education centres, of churches and the preservation of the good buildings of the past.
  As Frank Schaffer said in his book "The New Town Story", of which I am sure hon. Gentlemen here gathered are well aware:
  "A new town does not exist in a vacuum. It can be studied as an individual project, it can be pronounced a success or failure according to a critic's view of the planning, design, rate of building or social content. But in the national context the achievement of the new towns must be judged by the collective contribution they have made to the problems of overcrowding, the progress they have brought in the science of 'building for living', and the lessons they point for the future."
  That judgment can be the more accurately made if the Commission for the New Towns documents are made public, as the order envisages, and that judgment will be the more significant in its value, as the many hon. Members assembled here tonight clearly recognise, with the increasing realisation that our old towns must be the new towns of the future.
  12.15 am
  The Solicitor-General (Sir Patrick Mayhew): My hon. Friend has eloquently and ingeniously illustrated some of the merits of the order, which I hope the House will now approve.
  Question put and agreed to.
  Resolved,
  That the draft Public Records (Commission for the New Towns) Order 1984, which was laid before this House on 5th March, be approved.

  HOUSE OF COMMONS (SERVICES)
  Ordered,
  That Standing Order No. 103 (Select Committee on House of Commons (Services)) be amended, in line 7, by leaving out the word 'nineteen' and inserting the word 'twenty'.
  Ordered,
  That Mr. Carol Mather be added to the Select Committee on House of Commons (Services).—[Mr. David Hunt.]

  Trafford Park
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. David Hunt.]
  12.16 am
  Mr. Tony Lloyd: I am grateful for the opportunity tonight to raise the problems and talk about the future of Trafford park. The many hon. Members who have remained to hear this debate will appreciate that the problems of an area such as Trafford park represent not just a local constituency matter but are problems which threaten the whole conurbation of the Greater Manchester area and are central to the future of that area.
  I trust that the Minister will take on board the simple fact that the knock-on effect of the decline of Trafford park has not only affected my constituency and those areas bounding it but has had a dramatic and traumatic effect across the whole of Greater Manchester.
  I shall be referring later to the inner city partnership, but at this stage I should point out that of the jobs still existing in Trafford park, about 20 per cent. are filled by people who live in the Manchester and Salford inner city partnership areas, and that is significant in terms of the relationship between those areas and the problems of Trafford park.
  More widely, the travel-to-work area within which Trafford park currently operates is huge, much bigger than probably any comparable industrial estate in Britain. Trafford park is not just any industrial estate. It is the heart that, historically and to this day, pumps the lifeblood into the Greater Manchester area, into the city and into the commercial heart of the area and of the region.
  The Government's response tonight and in the future to the problems that I am outlining will be critical in deciding not simply whether the industrial estate per se has a future but whether the whole of that area has a future, including the social consequences if the Government decide not to grant it that future. There is an overwhelming case—one that is supported across party political lines and across industrial lines; trade unionists and industrialists support it — for saying that Trafford park should receive assistance from the Government in the very near future.
  I am proud of having been born and raised in the area. I am justifiably proud of Trafford park, not only because it was once the largest industrial estate in the world, not only because for the bulk of the 20th century it has been the heart that has driven British industry, but because from one generation to the next it has been the mechanism by which the skills on which Manchester thrived were passed on and one generation after another learnt that tolerance and comradeship and the dignity of labour of which the Labour movement in particular is proud.
  Sadly, the area began to decline in the post-war years. It declined simply because of the decline in general of manufacturing industry, and particularly of the heavy engineering base on which Trafford park was built. That decline has been central to the problems not only locally but throughout the conurbation. It is not remotely unfair to say that Mancunians feel extremely bitter at the indifference of Whitehall — not just of the present Government but of Governments in general — to the plight and decline of that industrial base.
  Perhaps I can bore the House slightly with some statistics that accurately measure the pace of that decline. About 170,000 people had to leave the north-west between
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  1965 and 1981 simply because work was not available. Those people had the traditional skills on which the northwest was based. It is estimated that a further 250,000 people will leave during the 1980s. In 1965, less than 20 years ago, Trafford park employed about 52,000 people. By 1975, that figure had dropped to a little under 38,000. I hope that Conservative Members will bear in mind that that decline was arrested under the previous Labour Government—although not reversed—when employment dropped to a little under 37,000. But since then the pace of decline has been spectacular and disastrous in every sense of the word.
  Mr. Churchill: Will the hon. Gentleman allow me?
  Mr. Lloyd: I am not sure whether it is worthwhile giving way, but I shall do so.
  Mr. Churchill: I am obliged to the hon. Gentleman for giving way. Until a few moments ago I was in complete agreement with him. There is complete agreement among the three hon. Members who represent the Trafford district that Trafford park should be included within the partnership area as it has many problems in common with Salford and Manchester. However, the hon. Gentleman sought to bring in party politics by suggesting that the decline accelerated at a particular moment, and by doing so he trod on very dangerous territory. He should not forget that in the late 1960s, under a Labour Government, 8,000 out of 16,000 workers were made redundant at GEC alone in Trafford park. At that time no help was forthcoming from the Labour Government, who were very strictly controlling industrial development certificates to ensure that even those firms that wished to expand in Trafford park were not allowed to do so. That has been a problem——
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. An Adjournment debate is very short and the hon. Member for Davyhulme (Mr. Churchill) has already made a long intervention.
  Mr. Lloyd: I am sorry that I wasted the time of the House by allowing the hon. Gentleman to intervene. However, those of us who were born in the area need no lessons from anyone about the history of Trafford park or the Stretford area. I have far better credentials than some hon. Members to speak about the area from the heart.
  As recently as 1980 only one in 25 of jobs lost: in Greater Manchester were in Trafford. By 1982, that ratio had increased to one in seven, mainly as a result of the decline of Trafford park. The list of companies that have left Trafford park reads like a roll of honour of international companies: Kraft, Spillers, Ingersoll Rand, NEI, Schreiber, and ICI. I should add that CPC has suffered massive redundancies but has not closed.
  Leading international companies have made massive redundancies. I mention in particular—as did the hon. Member for Davyhulme (Mr. Churchill) — GEC. That company is still one of the most eminent and efficient in Britain. But without Government assistance it faces collapse, because there has been a collapse of the power engineering industry. I hope that the Minister will pass on that message to his colleagues in the Department of Trade and Industry.
  The reason for the collapse is not hard to find. Trafford park depends on manufacturing industry. In 1978, 77 per

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  cent. of the jobs in Trafford park were in manufacturing. Regardless of whether the hon. Member for Davyhulme likes it, there is a political point to make, because under this Government we have seen the collapse of manufacturing industry. There has been a 15 per cent. decline in manufacturing output, which has inevitably meant a very sad toll for Trafford park. Where the nation has been hammered Trafford park has quite literally been crucified. That is an indictment of this Government and their policies. They do not understand what happens when manufacturing industry is allowed to go into almost terminal decline.
  Mr. Terry Lewis: I also have good credentials when it comes to speaking about Trafford park. I spent 30 years of my working life there, including CPC. That firm has not closed and is thriving, although many good jobs have been lost. I think that my hon. Friend will agree that GEC has always been at the hub of Trafford park. It is within the Government's power to save that firm there and thereby to go some way towards saving the whole of Trafford park, including CPC.
  Mr. Lloyd: My hon. Friend is right. GEC now represents about one fifth of all jobs in Trafford park and, if it is allowed to fold, the impact will be disastrous. We should consider the impact of the collapse of manufacturing industry. Clifford ward in the borough of Trafford, which I still represent, has adult unemployment of above 30 per cent. and youth unemployment is in excess of 40 per cent. The figures are even worse in Moss Side, which is in the inner-city partnership. It would be incredibly naive for the Minister or anyone else to argue that there is any prospect of re-employing Old Trafford or Moss Side without the revitalisation of Trafford park.
  We have an inheritance of dereliction, obsolete buildings, derelict land, poor services, roads which are literally clapped out and docks which are effectively dead. The size of Trafford park compounds those problems. I emphasise that it is no simple industrial estate but a huge estate of some 2,000 acres. Its boundaries, put in terms of London so that the civil servants and the Minister can understand, would stretch from Horseguards parade to Notting Hill gate and from Sloane square to Westway. It has 21 million sq. ft. of floor space, of which some 2 million is vacant. Local industrialists are adamant that the poor environment militates strongly against any possibility of revival because it militates against investment.
  The problems are compounded by the indifference of Governments. We have witnessed the taking away of intermediate area status. That was a serious blow to Trafford park. There has been complete lack of recognition in the home county-dominated Government of the real scale of the problem. We have also witnessed the illogicality of the partnership scheme boundary. I hope that the hon. Member for Davyhulme agrees with me on that. It is obvious that neither the private sector nor the local authority can cope with the scale of the problem. We must insist that Government assistance is made available to overcome it. The borough of Trafford and Trafford park cannot compete with the special development areas and the new towns which have massive resources for advertising and attracting inward investment. However unpalatable it
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  is to the Government who are determined not to spend money, however worthy the cause, resources are the name of the game and the only possible solution.
  I do not doubt that the Minister will cite assistance that has been given to Trafford park such as derelict land grant and urban development grant. They have minimal impact and are irrelevant to the scale of the problem. We have an enterprise zone, about which I still have mixed feelings, that has created 1,100 jobs. We are grateful to everyone, but compared with the scale of the problem it is irrelevant. We need assistance on a realistic scale that will cope with the legacy that Trafford park has inherited. We need resources to ensure that existing firms can improve their facilities and expand and so that vacant and derelict sites can be developed. We also need resources to enable the local authority to undertake wholesale environmental improvements.
  We need the powers afforded by the inner-city partnership—rent relief, interest relief grants, industrial improvement grants and grants for improving properties and the environment. They can only come from the inner-city partnership scheme but we are denied them simply because of the bureaucratic rules that are drawn up by people who do not understand how local economies work. They think that it is possible simply to draw a line through local authority boundaries and that, because Manchester and Salford are average and afford a poor standard of living for their inhabitants, parts of Trafford should be ruled out because, on average, it is more affluent. I would be the last person to deny that Trafford is a relatively affluent borough. I have often complained in the council about its meanness in other areas, but Trafford council cannot cope with its problems and certainly not Trafford park. We need the powers that I have outlined because people in Salford and Manchester depend just as much as people in the borough of Trafford on Trafford park. I say that with no edge because my constituency straddles the inner-city partnership area of Manchester and parts of the borough of Trafford.
  We are facing the collapse of an entire conurbation, not just one industrial estate. We are not asking for anything unreasonable—it is simply not possible to do the job without Government assistance. We are paying the price of our legacies but the cost of the Government's indifference will be socially cataclysmic. That is why Manchester is rightly demanding that some action be taken to assist Trafford park.
  12.30 am
  The Under-Secretary of State for the Environment (Sir George Young): I am grateful to the hon. Member for Stretford (Mr. Lloyd) for drawing the attention of the House to the problems of Trafford park, an area about which he spoke with pride and concern. Those problems are not unfamiliar to the Government. My right hon. Friend the Secretary of State and other colleagues have visited the area, and not so long ago I spent the day in the borough. My officials recently met the chief executive of Trafford to discuss the borough's excellently produced "Case for Action", which I have read with great interest. My hon. Friends the Members for Davyhulme (Mr. Churchill) and Altrincham and Sale (Mr. Montgomery) have both written to my right hon. Friend pressing the case for special status for the borough.
  Mr. Fergus Montgomery: I am glad that my hon. Friend mentioned that point. In fact, the

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  representations cross party lines, and there has been a joint effort by the council and the chamber of commerce and trade. There is a united front from people who are determined to try to do something for Trafford park. It is ironic that, where Trafford touches Salford, one side of the local government boundary should get so much help whereas our side, with exactly the same problems, should get nothing at all.
  Sir George Young: I have been very impressed by the representations. Many firms in the area have also written in support of Trafford's case. I shall refer in a moment to the problems of the boundary.
  The problems are all the more familiar through being mirrored in other areas in which traditional industries have declined. This decline is all the more difficult to reverse because, as the hon. Member for Stretford said in his analysis, it has taken place over a long time and on a large scale. The buildings and land occupied by the older industries are often totally unsuited to the more modern technologically based industries.
  In the area, many buildings occupy tens of thousands of square feet and are hopelessly uneconomic to maintain. Much of the land is encumbered by obsolete infrastructure or has been spoilt by industrial processes. Roads and other communications in the area have become inadequate and can be replaced or uprated only at great expense.
  These problems are such that they cannot be solved simply by redrawing a partnership boundary here or pumping in public money there. They cannot be tackled without a substantial commitment from everyone concerned—central and local government, industry and local people. The hon. Member for Stretford seemed to think that there were some instant solutions. Frankly, there are not. There is a role for the Government to play, and I am optimistic about the future of the area. The Government believe that those public resources that are available should be used to encourage investment back into the areas.
  We are prepared to take the lead, but we cannot stay in the lead for ever. We wish to build up the impetus and momentum to get the area back on to a recovery route. Once recovery in an area such as this is under way, the Government would like to withdraw and let the private sector take over. I hope to say in a moment how we are now trying to provide that impetus in Trafford park, but let me first deal with the Manchester-Salford partnership and the incorporation of Trafford park. This raises an important issue regarding our approach to the regeneration of the inner cities.
  As the House will know, in two areas in England we have concluded that the scale and intensity of the problem are such that it was beyond the power of existing authorities to reverse the decline. In those areas —London and Liverpool docklands—we created the urban development corporations. Elsewhere it has been fundamental to our approach that we operate within the existing framework of local government, because the local authorities have the most detailed knowledge of the needs of their areas.
  We must, therefore, allocate the resources in accordance with the needs of each authority. As the hon. Member for Stretford knows, the Government carried out a full review of the list of designated districts, including
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  the partnership authorities, last year in the light of the detailed information on deprivation derived from the 1981 census.
  We made a number of changes, and some difficult decisions had to be taken. It was not possible, given the limited resources of the urban programme, to bring all areas with pockets of deprivation within its scope This means that in isolated cases a main road or canal can divide a derelict strip of land between one district which is designated and another which is not. That has happened in the case of Salford and Trafford because the designation must take account of the scale and intensity of deprivation in the district as a whole. There are a number of even stronger contenders than Trafford. This was recognised by the previous Labour Administration, which did not extend this status to Trafford.
  As the hon. Member for Stretford said, much of Trafford is attractive and prosperous, and there is no disagreement between us on that. There are a good many other districts spread around the country that border on deprived areas and where the deprivation does not respect the local authority boundary. Some, like Trafford, are good housekeepers and do not spend public money lightly. I do not underestimate the difficulties faced by local authorities in keeping their expenditure down to the levels that are necessary for our national economic strategy, but the special resources of the urban programme have to be concentrated on the authorities whose total needs in aggregate are the greatest.
  We are not indifferent to the needs of Trafford park, and we recognise the real problems of dereliction. The hon. Gentleman mentioned that Trafford park lies within the enterprise zone. The largest part of the zone is in Trafford park, and this can bring substantial benefit. In particular, it brings the important benefit of access to the urban development grant, which is a major new development within the urban programme. It does not present a total solution to such problems, but it has a role to play.
  The broad principle behind the urban development grant is to attract private sector investment back into inner cities by injecting a sufficient public sector contribution to cover the gap between the costs of the projects, including a reasonable allowance for developer's profit, and the expected return. It is for the local authority and the developer together to work out proposals. If they are approved, the Government pay 75 per cent. grant-aid on the local authority contribution.
  Since we launched the scheme, 125 projects have been approved, representing capital investment of over £300 million. Many of the projects are in areas just like Trafford park, where there has been precious little private development of any kind for many years. Although only a handful of such schemes have been completed, there am pointers to the type of scheme that could successfully be undertaken in Trafford park. Projects need not take place on municipally-owned land—in Dudley, for example, a firm has been helped by the council to expand its operation and more than double its work force with the aid of UDG.
  I am anxious, following the representations that have been made by all parties, to take further initiatives, and later on today I shall be writing to the Manchester chamber of commerce, the Trafford park industrial council and large firms in the area to draw their attention again to the

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  benefits of UDG. So far the local authority has put forward only three proposals for UDG, and there is scope for many more.
  The hon. Gentleman mentioned the enterprise zone, which brings real benefits, such as exemption from rates on industrial property, exemption from development land taxes, a greatly simplified planning regime, 100 per cent. tax allowances on industrial and commercial buildings, and various other incentives to economic activity.
  Some 68 firms have settled in the Trafford zone, representing investment of about £5 million and about 1,100 jobs. The firms include Lucas CAV, Mobil Oil, Don International, Reed Windows, Photoplus Processing—in other words a wide range of manufacturing, service and warehousing operations representing a stable base on which the future prosperity of the zone and of the area as a whole can be built.
  There is a lot of scope for further development in the Trafford park area of the zone. Recent monitoring carried out for my Department by consultants shows that progress has been held up by the relatively slow release of privately owned unused land on to the market. This is also a problem in other parts of Trafford park. In some cases land values may be pitched unrealistically high, in others a lack of infrastructure provision may be hampering development, and, in others, firms may be holding on to land in the expectation of future expansion.
  Mr. Terry Lewis: I am interested in the Minister's statement that land values might have been put rather too high in the Trafford park area. I suspect, and I should like the Minister to comment on this, that the land values have risen in direct proportion to the enterprise zone, and this is a criticism of some of the activity that is taking place there. Will the Minister address himself to my intervention in the speech of my hon. Friend the Member for Stretford (Mr. Lloyd), and concentrate some of his comments on the problems of GEC and what help the Government are likely to give, or can be persuaded to give, to that company?
  Sir George Young: The particular problem of GEC was not raised by the hon. Member for Stretford and it does not feature in the title of the debate. The Government recognise fully the contribution which the turbine division of GEC has made. It is one of the largest employers in Trafford park and one of the largest land holders. I shall write to it again in terms which I shall outline to try to make some further progress over the issue of the land. The need to put land to good use rather than hold it for a rainy day was part of the thinking behind the Government's introduction of land registers, which identified publicly owned land which could be released at realistic prices and developed. It might benefit some private companies with large unused land holdings to adopt a similar approach. As a further initiative in response to the representations which have been made by local Members, I shall be writing today
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  to the Manchester chamber of commerce, the Trafford Park Industrial Council and large firms in the area, including GEC urging them to explore what might be done to improve the availability of land for redevelopment. From my understanding of the area, there is real scope to release on the right terms land which could be developed to provide jobs for those who live in the area and goods and services which the country needs.
  There are two other, relatively modest, ways in which development can be encouraged in Trafford park with direct help from central Government. There is the derelict land grant and the traditional urban programme, which are bid for competitively by local authorities. They do not represent a comprehensive answer to an area's dereliction but can provide the initial impetus to improvement. As with other initiatives, there is a strong element of trade following the flag; once one site is developed, additional investment can be attracted to adjoining ones. Trafford council has not applied for traditional urban programme support for any commercially or industrially oriented schemes in recent years.
  I should also mention the question of Trafford park's status under regional industrial policy. Last December the Government published a White Paper, Cmnd. 9111, about regional industrial development, inviting comments on a proposed new framework for regional development grant. The closing date for comments is 31 May 1984, and I know that the hon. Gentleman and Trafford council itself have put forward Trafford's case.
  Trafford park represents almost a case study of an industrial area in decline, but it is an area with a great deal to offer. It has much infrastructure already in place. It has the resources of many firms which the hon. Gentleman mentioned which are household names and well established. But, above all, it has the human resources of a large skilled work force.
  The Government are very willing to do what they can to help within the resources available to us and the priorities set by the needs of different areas. Officers of the borough council are in touch with my Department's regional office and the UDG appraisal team.
  I am making contact with local businesses and I know that my hon. Friends the Members for Davyhulme and Altrincham and Sale as well as the hon. Gentleman will do what they can to support the Government's initiatives to encourage local businesses to come forward with UDG schemes and to consider again the derelict land which they do not need directly. If we can develop these initiatives and pull together the energies of all those who want to see Trafford park revived, we have the potential to arrest and then reverse the decline which the hon. Gentleman has mentioned. I look forward to substantial progress in Trafford park over the next few years.
  Question put and agreed to.
  Adjourned accordingly at seventeen minutes to One o' clock.