§ '(1) The powers of this Act shall cease to have effect if the profit income to the City from the road race does not exceed the annual revenue and capital repayment costs by 1991.
§ (2) Separate accounts shall be published each year on the exercise of powers under this Ace.—[Ms. Clare Short.]
§ Brought up, and read the First time.
8.54 pm§ Ms. Clare ShortI beg to move, That the clause be read a Second time.
Mr. Deputy SpeakerWith this we may discuss the following amendments: No. 7, in clause 4, page 5, line 24, at end add—
'(3) The powers of this Section shall be exercised after the Council has arranged external financial sponsorship to cover its capital expenditure involved in providing motor races.'No. 16, in clause 9, page 8, line 39, at end insert—'(3) The powers of this section and section 4 shall not be exercised if the capital expenditure to be incurred in 1986 exceeds £1,700,000'.
§ Ms. Clare ShortThe purpose of the new clause is to hold the council to the financial projections that it continues to put before us to justify the road race. We are in a quandary because, whenever we ask how the finances will work, we are given a set of figures which show that £1.5 million capital expenditure will be involved initially, that £1.5 million revenue expenditure will be involved each year that the race is run and that the returns for the city will at best be £2.5 million and at worst will cover costs. Nothing in the Bill holds the city council to those projections. It will be possible for the council to spend considerably more and to receive considerably less, and never have to do anything about it.
As I said during the speech by the hon. Member for Birmingham, Hall Green (Sir R. Eyre), at a meeting recently with the leader of the city council, one of the officials argued that even if the road race were not profitable it might be desirable for the city because a road race might make Birmingham as famous as Indianapolis. That was an extraordinary comparison. I know nothing 711 about Indianapolis except its name. Birmingham is Britain's second city and the place where the industrial revolution began. It can already claim more fame and glory than Indianapolis.
§ Mr. Beaumont-DarkDoes not the hon. Lady think that there is something vaguely insulting in suggesting that the city of Birmingham—which manages to handle hundreds of millions of pounds of expenditure each year and look after, as is its duty, more than 1 million people—really needs this House to act as a nanny and tie down the city to a sum of money? Would it not be better for it to decide for itself? Does this House think that it can take Birmingham's place and do its job for it?
§ 9 pm
§ Ms. Clare ShortIt is extraordinary that the hon. Gentleman belonging to the Conservative party, has the cheek to stand up and say that. Since 1979 we have lived with his party constantly taking away financial powers from local authorities and tying them down in the way in which they can spend money.
§ Mr. Terry DavisI have visited Indianapolis and I would not want to live there.
§ Ms. Clare ShortI am grateful to my hon. Friend.
There are two views. It is not simply a matter of trying to tie down the city of Birmingham on how much it can spend on a road race. Underlying the amendment is a policy decision on whether it is worth while Birmingham having a road race that does not cover its costs.
The purpose of the new clause is to require the city to cover its costs, but to give it five years to do so. It should be acceptable to anyone other than those who, like that official, want to argue that the road race is worth while in any event. It is a fairly low level race. The number of international visitors who will go to Birmingham to attend the race has been exaggerated and will be nothing like the number that would be attracted to the grand prix that Birmingham thinks it will get but will not get. It is an entirely reasonable clause. Indeed, yesterday I received a letter from the leader of the city council intimating that it might be acceptable. I do not doubt that the hon. Member for Hall Green will give us a detailed account of the city council's attitude to it. I shall listen to him with considerable interest. As matters stand, I shall seek a vote on it.
The second part of the new clause seeks information for the people of Birmingham on the amount of money involved each year—the cost of the race and the money being returned—which will enable them to exercise their democratic rights through local elections and in discussions and to determine whether the road race is costing them money or bringing money to the city.
Amendment No. 16 is a different amendment with a similar purpose. It refers specifically to capital expenditure. In the estimates that we have been given, the city council says that there will be an initial capital expenditure of £1.5 million and thereafter £1.5 million revenue every time that the race is run. As my hon. Friends the Members for Birmingham, Perry Barr (Mr. Rooker) and for Birmingham, Hodge Hill (Mr. Davis) made clear, capital expenditure in Birmingham is very short because of the limitations that the Government have imposed on 712 the right of Birmingham to spend capital. Therefore, if expenditure of £1.5 million is made on the road race, that £1.5 million cannot be spent elsewhere. The amendment seeks to hold the council to its projections. If it believes in its figures, both of our proposals should be acceptable. The amendment would require the council to spend no more in initial capital than £1.7 million in 1986. Therefore, it cannot claim that inflation has speeded up—which it has—and that £1.5 million is no longer realistic.
I hope that both proposals will be acceptable to the promoter of the Bill. I make it clear that, unless undertakings are given. I intend to push both of them to a vote.
§ Sir Reginald EyreI am grateful to the hon. Member for Birmingham, Ladywood (Ms. Short) for the forthright way in which she moved the amendments. I appreciate the underlying principle that both she and the hon. Members for Birmingham, Hodge Hill (Mr. Davis) and for Birmingham, Perry Barr (Mr. Rooker) have advanced in asking for detailed study and consideration of the point encompassed in both amendments.
In principle, a requirement that the race would not continue—that is, that the powers to operate the race would cease—if the event could not be staged without incurring annual losses, is accepted. The city council would not want to continue running the race if it had to require support from the ratepayers each year.
However, the wording of the appropriate legislation needs to be carefully considered to achieve that objective. I can illustrate the drafting difficulty by pointing out that the words "profit income" do not represent a precise accounting phrase. The intention is to introduce an amendment in another place to deal fully with the principle of the new clause.
The hon. Member for Birmingham, Perry Barr (Mr. Rooker) asked whether we could make any necessary amendments in this House. I understand that it is not procedurally possible at this stage to do that. In any case, it is necessary to arrive at the precise form of words to meet the principle of the amendment. On that basis, I ask Opposition Members to accept my assurance that a suitable amendment will be introduced in another place.
§ Mr. Terry DavisClearly, the hon. Gentleman is making great efforts to meet the arguments that my hon. Friends and I have adduced. Why is it not procedurally possible to amend the Bill in this House?
§ Sir Reginald EyreI am not fully acquainted with all the mysteries of the procedural difficulties that apply in Parliament. I understand that if we were to seek to make the change now, a manuscript amendment would be necessary and that there would not be time to incorporate the points made by the hon. Member for Ladywood in a suitable form of words. I am giving an undertaking of equivalent value in that such an amendment will be introduced in another place. I give that undertaking on behalf of the city council.
§ Mr. RookerI am grateful to the hon. Gentleman for the undertaking that he has given. However, the promoters are, in charge of the Bill. It is their measure and they are paying for it. Indeed, they have probably paid the legal profession a fortune to get it this far. The promoters are therefore entitled to promote any amendment that they 713 wish and to do so at any stage of the Bill. I feel sure that if those with the expensive and expert advice necessary to frame such an amendment were to do that and present to the hon. Member for Birmingham, Hall Green (Sir R. Eyre) a manuscript amendment, and he sought approval to put it before the House, the matter could be settled here and now.
§ Sir Reginald EyreI appreciate the hon. Gentleman's impatience to settle the matter promptly. He will know that I am not in charge of the detailed professional handling of the Bill. I am faced with the technical fact that while I am able to accept the principle of the amendment, consideration must be given to it so that a suitable form of words, from the accounting and legal point of view, may be devised. I cannot introduce such an amendment at this stage. It is with complete honesty that I am trying to ensure that the amendment is achieved in a correct form. I ask the hon. Member for Ladywood and her hon. Friends to accept my assurance.
§ Ms. Clare ShortI accept the hon. Gentleman's assurances and I am grateful for them. It would be generous if he were to agree not to oppose the new clause and, if it needs correction, to correct it when it goes to another place.
§ Sir Reginald EyreI have had much experience of piloting legislation through the House. I have given an undertaking without reservation on behalf of Birmingham city council. I hope that the hon. Lady and her hon. Friends will be kind enough to accept it. I assure her that no damage will be done to her argument and that the result will be exactly the one that she wants to secure.
Amendment No. 16 raises more difficult issues. It is directed to the proposed limit on initial capital expenditure. The new clause seeks to introduce a requirement that the race should be conducted for a specified period—five years—without loss and amendment No. 16 seeks to provide a more limited time. Birmingham city council is not able to accept the amendment. The city is confident that the costs can be kept within a proper ceiling but there could be an unforeseen additional cost. For example, road surfaces could be displaced and urgent expenditure would be required to put the road in a satisfactory condition within the required time. Such an unforeseen additional cost would mean that the race could not proceed. The amendment includes a certain figure and the item of unforeseen expenditure could take the city only slightly over that limit. If the need for such expenditure were to arise at the last minute and to cause the capital limit to be breached, the race would have to be cancelled and the city could incur huge compensation payments that would be far in excess of the additional capital spending required.
After earnest discussion, and with a great desire to meet the arguments that are being raised by the hon. Member for Ladywood and her hon. Friends, Birmingham city council cannot commit itself to cancel the race if there were to be some slight extra expenditure beyond its control which would affect annual expenditure. The council has no reason to believe that costs will escalate and, indeed, it is sure that they can be contained.
The hon. Member for Ladywood has referred to annual accounts. As I said on Second Reading, the annual accounts must make clear exactly what the position is in respect of the race. The hon. Lady's argument will be met 714 by the provisions that turn on five-yearly expenditure and by annual accounting. For the reasons that I have offered, the council cannot accept a limitation on expenditure each year. However, it believes that it will be able to ensure that it keeps within its planned expenditure.
§ Mr. Terry DavisThe hon. Gentleman may be confusing new clause 1 and amendment No. 16. In his earlier response, he referred to the annual expenditure and the problems that might be created if there were a limit on the annual expenditure. At that point he was referring to amendment No. 16. The amendment is concerned only with capital expenditure, which is by definition once-for-all-expenditure. I think there was confusion there in the hon. Gentleman's mind.
My hon. Friend the Member for Birmingham, Ladywood (Ms. Short) would not wish to be so inflexible as not to provide for the possibility of some unforeseen capital item taking the cost above the limit which she has suggested, but the limit that my hon. Friend has suggested seems to be the council's own estimate of £1.5 million, adjusted for inflation. Is the hon. Gentleman saying that there is nothing in that estimate for contingencies?
§ Sir Reginald EyreI am grateful to the hon. Member for Hodge Hill, who has clarified a possible misunderstanding arising from what I said earlier. He is right in saying that amendment No. 16 relates to the initial capital expenditure, which, as we know, has been said to be £750,000 a year for two years, totalling £1.5 million.
I suppose that it would be difficult to ask any councillor or any public body to say that it had taken complete account of the possible inflationary consequences in any transaction over the period in question, but the council believes that it can ensure that the costs are contained. I think we would all want to say that some account must be taken of inflation. The latest estimates are that the rate of inflation will be falling again towards the end of this year. We all know the difficulties where inflation is governed by world trading and financial circumstances. Therefore, although I understand the hon. Gentleman's point, I do not think that the council can commit itself to meet his point completely.
I am trying to emphasise to the hon. Gentleman and to the hon. Lady that, with regard to the initial capital expenditure spread over two years, the council can ensure that it will be kept within the limit estimated. It accepts the point that the hon. Lady has emphasised about the importance of annual accounting, which we all accept. Furthermore, I am delighted to emphasise that the council is able to accept fully the principle set out in new clause 1. I am putting that total package to the hon. Lady, because the council has done as much as it can in capital terms to accept her amendment.
§ Dame Jill Knight (Birmingham, Edgbaston)Will my hon. Friend agree that Birmingham city council has taken immense trouble over a long period? There were many doubters at the outset. Am I right in saying that the financial conclusions were not reached without the burning of much midnight oil?
§ Sir Reginald EyreMy hon. Friend is right to make that point. The sceptical view taken by some people, in a quite healthy way, has caused much care to be taken in the preparation of the Bill, and the degree of care has increased as time has passed.
§ Sir Reginald EyrePerhaps my hon. Friend will excuse me for just a moment. I was describing the preparation to Opposition Members. My hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) is right—none of us believe that the city of Birmingham would be anything other than responsible when calculating such expenditure. The issues of sensitivity which the hon. Member for Hodge Hill mentioned are well understood because there is a desire to use the money in other ways which it is believed would be advantageous to the city.
§ Ms. Clare ShortI have listened carefully to everything that the hon. Gentleman has said. The trouble with acceptance of new clause 1 but rejection of amendment No. 16 is that it would be possible to spend massively over the capital projection, to find within five years that the whole thing is losing money and close it down. It is surprising that the city council is not prepared to accept the amendment, or something like it, if it has any confidence in its cost projections. A document prepared for the city council on the financial implications of a motor race in Birmingham told us that a contingency of 35 per cent. to allow for inflation and unforeseen difficulties had already been included in the capital figure. We are now told that the capital will be spent over two years, but that a limit of £1.7 million in one year is not acceptable. That seems quite extraordinary.
§ Sir Reginald EyreI am not saying that capital expenditure of £1.7 million is not acceptable. I am saying that the strict terms of amendment No. 16 would be difficult for any responsible body to accept. As I have explained, the job will be phased over two years, during which time there might be some unforeseen event. It might cost only £300,000, but if that sum took the total over the limit, the city council would be in far greater difficulties than any of us would like. That is the difficulty with specifying a figure. The reason is a business reason.
The council is being terribly responsible in responding to the amendment. It has given full reasons why it cannot accept the amendment in strict detail, but it has declared that it will do everything possible to ensure that planned expenditure is not exceeded and that the job is done in two years so that it can conduct the business effectively. In view of that attitude, acceptance of new clause 1 and acceptance of annual accounting, I hope that the hon. Lady will be able to accept this as a reasonable package.
§ Mr. AshbyHas my hon. Friend considered what I said about payments of compensation and damages? Has he insisted that the Bill provide that such claims be settled in 12 months? How would they affect the profit income?
§ Sir Reginald EyreI believe that, in regard to compensation and the involvement of the Lands Tribunal, my hon. Friend does not accept a principle that has been established in much legislation in which power is given to a public authority to carry out major works.
The Lands Tribunal has always been accepted as the eventual appeal body for calculations of compensatory damages. The matter was carefully considered in Committee and an obligation was placed on the city council in regard to the acceptance of liability. The rights of anyone who may have a claim will be much improved; he will not have to go through the usual process of law, but it follows that a claim will have to be initiated within 716 a shorter period. I ask my hon. Friend to consider the balancing legal points. They secure the interests of individuals and put a severe responsibility on the city council.
§ Mr. SpeakerOrder. Before we proceed too far down this line, may I draw the hon. Gentleman's attention to the fact that I think this matter would be more correctly discussed under amendment No. 12, which deals with compensation.
§ Mr. RookerI did not realise that the hon. Member for Birmingham, Hall Green (Sir R. Eyre) had finished. He has completely ignored amendment No. 7, which is obviously a non-runner. The thought of getting the necessary capital expenditure from a source other than the repair bills of my constituents obviously never crossed the minds of those who wrote the hon. Gentleman's brief.
Amendment No. 7 is an alternative to amendment No. 16, which is also unacceptable to the city council. The hon. Member for Hall Green made a telling observation when he said that the city council was beginning to think about the problems as time runs out. Even at this late stage, I cannot see why the council cannot seek some external financing sponsorship for the capital expenditure involved. A total of £1.5 million at 1984 prices—most of the calculations were put together in 1984 — is chickenfeed to big business.
On Second Reading, the hon. Member for Hall Green told us about the influential organisations that supported the Bill. He read out a list of home-grown and foreign-based multinationals in the motor industry in and around Birmingham. The list included Austin Rover—I would not include that company as a top profit-maker; Shell UK Oil—as far as I am aware, that company is making no losses; Cadbury Schweppes, a home-grown multinational, based, for all practical purposes, in Birmingham; IMI, a massive multinational which, to its credit, retains its headquarters in the inner city of Birmingham and puts its money into industrial units; GKN, one of the most profitable companies in the land, with its headquarters and many plants in the west midlands; and Davenports, the local brewers — I do not know much about their financial position, but I do not think that they are making a loss. The Holiday Inn kept writing to hon. Members asking them to support the Bill. It will make money for the hotel and create an occasional job for an apprentice.
Why cannot those big companies put their hands in their pockets? I suggest that £200,000 apiece would do the trick. They could lose such a sum in adding up the third column of figures beyond the decimal point. It would be that small. The scaffolding, crash barriers, new lamp standards and seating could be adorned with their names, and rightly so. What is wrong with that? At this late stage, why cannot the city council try to obtain the initial capital expenditure from elsewhere? The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) wants the ratepayers to put their hands in their pockets to provide the spin-off for all the companies to which I have just referred. I believe, however, that they ought to make a contribution to the city, and it is not too late for them to do so.
9.30 pm
We accept the sincerity of the hon. Member for Hall Green. Nobody disputes his integrity. However, we cannot control what happens in the other place. The hon. Gentleman said that he has experience of legislating. I 717 acknowledge that he has been a Member of Parliament longer than I, and he has also served as a Minister. However, I have been a Member of Parliament sufficiently long to know that not every statement made in this House is translated into legislation in the way that was originally envisaged.
I should prefer new clause 1 and amendments Nos. 16 or 7, which are alternative amendments, to be included in the Bill without a Division. If the figures are wrong, I should be prepared to allow indexation in the case of amendment No. 16. We are endeavouring to insert the intention behind the background briefings that were provided by the city council. We do not want runaway spending—
§ Ms. Clare ShortAnother Concorde.
§ Mr. RookerThat is right; we do not want another Concorde.
The city council says that the project will cost only £1.5 million in 1984 prices, or £1.7 million in 1986. The council has built into its calculations massive variations of the money that it will get from television rights. They amount to as much as 35 per cent. The financial department of the city council runs a fairly tight budget and ship under Councillor Dick Knowles, so I am confident that if it says that the price will be £1.5 million in 1984 prices, it can be accepted. I shall keep the council to it.
Financial discipline must be imposed not upon the city council but upon the people with whom it does business. Contract after contract will be let to the private sector. I want extra jobs to be created, but the private sector must be told that this is not a gravy train. It must not be led to believe that no financial ceilings will be imposed, just because this new tourist venture has been sanctioned by Parliament, and that it must be got on the road at all costs because the council does not want to lose face and therefore an extra 5 per cent. on this or an extra 10 per cent. on that, or an overrun on something else, will be met by the city council. If the private sector realises that a financial ceiling is set upon the city council's expenditure, it will be forced to keep within financial limits.
§ Ms. Clare ShortThe feasibility study which has been circulated to hon. Members by the RAC demonstrates that considerable road works will take place. There will be road widening and the removal of roundabouts. The RAC also says that further discussions will take place and that further requiremens may be imposed. Does my hon. Friend agree that it might help if the city council said that there was a limit upon the amount of capital that it could spend and that the road race project could go ahead only within those financial limits?
§ Mr. RookerYes, that is right. If there were problems of unforeseen expenditure and of expenditure going out of control, the city council could say that Parliament had limited the expenditure. It would be open to the city council to obtain money from elsewhere if there were an overrun for some reason. Big, profitable businesses based in Birmingham, living off the motor industry and its component suppliers, such as hotels, would put their hands into their pockets if they believed the venture to be viable. It is in the interests of the city council and of its contractors to see that there is no bottomless pit and that a limit is built into the capital expenditure allocation.
Is there any limit that the city council will accept? Will it accept a limit of £2 million, for example? That figure 718 is way above its original estimate. Does the council say that to have any limit in the Bill would be unacceptable, for the reasons that the hon. Member for Hall Green gave? If the council is not prepared to accept a limit, that throws into doubt all the calculations that have been made.
I do not know whether that matter was covered in the opinion polls and the report sprung on us at the last moment by my hon. Friend the Member for West Bromwich, East (Mr. Snape). None of us had seen a copy of the report. He seems to be the only person to have a copy. I do not know whether money was mentioned in the opinion poll or whether questions about capital expenditure were included. I do not know whether my hon. Friend asked for the report or whether it was offered to him. I should like to know whether the financial side of the race is dealt with in the report.
§ Mr. Terry DavisDoes my hon. Friend agree that the cost of the report, which has been quoted by my hon. Friend the Member for West Bromwich, East (Mr. Snipe), should be included in the costs of the motor race?
§ Mr. RookerOpinion poll companies do not work for nothing. Even those that work for the Labour party do not work for nothing. Someone has to pay for their work. The city council must be paying the bill.
We are talking about £1.5 million of capital expenditure. Like my hon. Friend, I question the city council's priorities. I do not believe that the race is a suitable priority. I intervened during the speech of my hon. Friend the Member for West Bromwich, East only to make the narrow point of whether we need the Bill. The need for a Bill gives us an opportunity to question the city council's priorities. Normally I should not consider doing that. I disagree a great deal with the city council's priorities, whichever party is in control. It is not within my competence, however, to tell the city council that its priorities are wrong and that it should do what I say. In this case, however, it requires the approval of the House of Commons. I am prepared to say that the city council's priorities are wrong. I have the opportunity to do that, and, what is more, I have the opportunity to influence its priorities. It is an opportunity that I do not normally have.
Birmingham does not spend all its capital receipts from housing on housing. This is a highly technical subject, and I do not claim to understand the ins and outs of it all. We could spend all those capital receipts on housing. There is nothing in the legislation to stop us from doing that. Indeed, we should be doing that. That was one of the manifesto commitments upon which the Labour party won the last city council election. We are not doing that. Therefore, I question the expenditure of £1.5 million that could be spent on maintenance and remedying defects in some of the worst housing conditions in Birmingham.
A distinction is drawn along party lines. It is not too late to ask the private sector to put its hands in its pockets. It does so for the greater good of Birmingham and for the benefit of its companies, and I believe that the House should ask it to do so this time. The city council should not be given carte blanche—in effect, an open cheque—by a refusal to accept amendment No. 16. I would not argue with the idea that the other place can include an indexation provision in the Bill, but I should like this House to insert such a proposal.
I accept what the hon. Member for Hall Green said about new clause 1. I accept his integrity. There is no 719 reason why we cannot include new clause 1 and let the other place mess about with the wording and change it. We all agree. The promoters say, "We accept the thrust of the new clause." What is there between us? If things go wrong in the other place, there will not be the opportunity that the House needs to put this right. I am not prepared to leave this provision to the other place. Some Members of the other place are root and branch opposed to the Bill, whatever concessions are given. Others favour the legislation. Who is to say how the votes will be carried?
If we agree on the thrust of the new clause, we should include it in the Bill and make progress with the other amendments. I hope that this will be done with the same friendliness as has been shown so far in the debate.
§ Mr. CorbettPresumably, my hon. Friend received a letter from the leader of the city council, Councillor Dick Knowles, in which he gave an undertaking that
the race shall not take place if an operating loss is still made in the fifth year of the event.That gives added importance to the question that my hon. Friend has just posed to the hon. Member for Birmingham, Hall Green (Sir R. Eyre): what are we arguing about?
§ Mr. RookerWe are arguing about very little. We are arguing about whether to include the provision now or to do so later. I believe that it should be included now. The city council has woken up to some of the points that my colleagues have been making for months. The council has left it until the last minute to seek a meeting of minds. If Conservative Members had taken the same view, either before or just after Second Reading, instead of giving a blank cheque with respect to financial provisions, we would probably not be in this position now. Members of Parliament representing Birmingham and elsewhere agree that there is nothing between us on the point of principle. Therefore, there is nothing to stop us doing the deed and having the technicalities corrected in the other place. After all, the House of Commons is really the upper House, whatever the terminology used by the press to describe the two Houses.
§ Mr. Terry DavisI support the new clause and the amendments.
As my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) has explained, there is little difference between us on the new clause. According to its wording, it will be incumbent upon the city council to stop holding a motor race if it is not making a profit after five years. The hon. Member for Birmingham, Hall Green (Sir R. Eyre) says that he accepts the spirit of the new clause. He knows that the city council is anxious to accept it. As my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) has mentioned, we have received a letter to that effect from Councillor Dick Knowles. There is no disagreement on that point.
There is also no disagreement on the need for separate accounts. Separate accounts are essential if we are to know whether the race is making a profit during those five years. A few months ago, the chairman of the general purposes committee gave us an assurance that accounts would be kept. I am not clear whether accounts have already been kept and whether we can see 1984–85 accounts on the expenditure that has already been incurred, for example, on entertainment of Members of Parliament. I hope that 720 cost is included in the accounts as well as a contribution towards the cost of the survey conducted by some organisation of behalf of the city council. Apparently, the survey's findings have been communicated only to my hon. Friend the Member for West Bromwich, East (Mr. Snape).
§ Mr. DavisAll right, I shall give way to my hon. Friend because he seems so upset. Obviously he has more information than hon. Members representing Birmingham.
§ Mr. SnapeI should like to make two points. First, I have no idea what has been spent on entertaining hon. Members on either side of the House with regard to the Bill. I hope that my hon. Friend will accept that not a penny has been spent on entertaining me, and that that is not the reason behind the attitude that I have taken. Secondly, I have only just noticed that, although the survey was conducted in May, the date on the document is June. I can assume only that it has been published today or recently.
§ Mr. DavisI accept my hon. Friend's assurances. I had already guessed that he went to the council house for a briefing this morning, and obtained the document during that meeting.
§ Mr. SnapeI have to ask my hon. Friend to accept that I did not go to the council house for a briefing this morning. I met somebody from Birmingham city council after a meeting of the west midlands Trades Union Congress that I had attended. It was only because I happened to be in Birmingham this morning that the document became available to me.
§ Mr. DavisI knew that my hon. Friend was in Birmingham this morning because he told us how he drove through the constituency of Ladywood. But let that point rest. The important matter is the new clause.
I also leave on one side the need for annual accounts, which is a serious point because the expenditure that has already been incurred should be accounted and set against the income from the motor race.
I agree strongly with the argument advanced by my hon. Friend the Member for Perry Barr. The hon. Member for Hall Green has assured us that the city council will seek to amend the Bill in the other place. But it is not within the power of the city council to amend the Bill. That responsibility rests with the other place. Therefore, it is important for the hon. Gentleman to accept the new clause. If he does not, it will be possible for the new clause drafted by the promoter of the Bill to be rejected by the other place. If it is rejected, the issue will not come back to the House of Commons. The only way in which the House of Commons can be sure of our joint wishes being put into effect is by accepting the new clause, so that, if a different view prevails in the other place, the matter must come back to the House of Commons because the Bill will have been amended since it left the House of Commons.
In no way am I casting aspersions on the integrity of the hon. Member for Hall Green or his assurances. Nevertheless, I cannot understand why the hon. 721 Gentleman cannot accept the new clause. Then it can be amended in another place to give effect to the accounting expression that he described as being slightly different from the wording that has been used by my hon. Friend. If we accepted the new clause, we could make the progress that hon. Members on both sides would like.
Amendment No. 16 would restrict the city council to a capital expenditure of £1.7 million in 1986.
I should like to deal first with a detailed point because the hon. Member for Hall Green said that the city council told us that it wishes to incur its expenditure over a period of two financial years. That point was not relevant because the expenditure would be in the calendar year 1986 to which the amendment refers. I recognise that the expenditure would fall into the financial years 1985–86 and 1986–87, but it would almost certainly be in the calendar year of 1986. We shall not quibble if some items of capital expenditure are incurred before the end of the calendar year.
An important principle has been advanced by my hon. Friends concerning the confidence that we can have in the figures that have been advanced. I must correct my hon. Friend the Member for Perry Barr, who referred to the estimate of £1.5 million as being at 1984 prices. In fact, that estimate is not given at 1984 prices. It is clear from the information that we have been given that the city council estimated the capital expenditure at August 1984 prices and added 35 per cent. to cover the contingencies and inflation between 1984 and 1986. Therefore, one quarter of the capital estimate of £1.5 million is to cover contingencies and inflation. My hon. Friend the Member for Ladywood is generously adding a further £200,000 to that estimate.
I wonder how much leeway the city council requires. I accept the point of my hon. Friend the Member for Perry Barr, when he asked whether the council would accept a limit of £2 million. What figures does the council have confidence in? There must be a figure which the city council is not prepared to pay for a motor race. I am prepared to accept whatever figure it gives, unless it says £20 million, which is not realistic. It may set the figure at £2 million, £1.7 million or £2.5 million, but there should be a limit.
Alternatively, the city council could accept amendment No. 7 because it goes to the heart of our objections, which relate to the use of the capital allocation by the city council for a motor race. Personally, I would not press amendment No. 7 because the city council has moved a long way towards meeting us. Indeed, it has moved much further towards our position compared with its previous position. It has virtually accepted 90 per cent. of our argument about the need to ensure that £1.5 million will remain available for all the priorities which I share with my hon. Friends the Members for Ladywood and for Perry Barr. Therefore, I urge my hon. Friend the Member for Perry Barr to withdraw amendment No. 7. Although I agree with his original intention to tell the city council to look for external money for capital expenditure, the objective was to meet our objection to the Bill. It was a good idea, but now the city council has gone past that point in its offer to us this afternoon.
On amendment No. 16, I cannot understand why the city council will not accept a limit. I recognise the force of the argument of the hon. Member for Hall Green about unforeseen contingencies and that in the normal course of events it would be unwise to limit the city council in this 722 way. Nevertheless, it shows a remarkable lack of confidence in the council's figures that the council can conceive that the expenditure will be so much more than the estimate. The council must have estimated that the cost would be about £1.2 million. It increased the figure to £1.5 million, and we are adding £200,000. In other words, we are providing a 50 per cent. contingency and inflation fund. How much more inaccurate can the estimates be? If they are more inaccurate than that, I do not think much of the figures, and I would be surprised if the city treasurer thought that he had produced such loose estimates.
I ask the hon. Member for Hall Green, who has been most accommodating in his approach to our amendments, to reconsider the possibility of accepting them.
§ Sir Reginald EyreI wish to reply to the points raised by Opposition Members. I begin by apologising to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) for not having referred to amendment No. 7. I did not hear it called and did not think that it was grouped with the amendments; otherwise I would certainly have spoken to it.
The hon. Member for Birmingham, Hodge Hill (Mr. Davis) showed a degree of reservation about the amendment. It would require the city to raise the initial capital cost externally from sponsorship. It is extremely difficult for the city to accept the amendment because it would prove difficult to raise such funding in advance of the facilities being available to run the race. Sponsorship is much more likely to be related to special events at specific times when such matters as television coverage, timing and races are arranged. A large part of the initial capital cost would not relate to expenditure with which sponsors could identify easily. Sponsorship and advertising income would help to ensure that the race is run at a profit each year, after allowing for the financing of the initial capital cost.
The aims are agreed in the city council's proposal. The initial cost will effectively be funded over a period from race proceeds. I assure the hon. Gentleman that the principle of his amendment is fully accepted. The intention is to recoup the cost of setting up the event from the income that it generates. I ask the hon. Gentleman to accept that it is simply a matter of timing. He is keen to take this money from a sponsor or industry, and I believe that it will be possible to recoup the cost, but it is a matter of timing. The city council believes that it cannot raise that funding in advance of the scheme proceeding and sponsorship beginning to operate.
I should tell the hon. Member for Hodge Hill that amendment No. 4, which is to correct a drafting error, is accepted. The hon. Gentleman says that we must accept amendment No. 16 although we know that it is inaccurate.
§ Mr. Terry DavisI am urging the hon. Gentleman to accept a new clause 1 despite the fact that it is inaccurate.
§ Sir Reginald EyreThe hon. Gentleman is saying that we should accept new clause 1 and amend it in another place. I am sorry, but I believe that that procedure would be without precedent. It would reflect badly on the House, especially when one considers that there is a difficulty in using the terms of the definition. However, I have given an undertaking on behalf of the city council. I believe that we have settled the matter. I ask him and the hon. Member for Ladywood to accept my undertaking that the matter will be dealt with properly in another place.
§ Ms. Clare ShortI believe that we should vote on new clause 1 and on amendment No. 16. I accept the hon. Gentleman's integrity and commitment, but undertakings have been given in the House before by Governments, not by Back-Bench Members, which have not been fulfilled. That is why I wish the House to vote on the new clause and the amendment, but I make it clear that I accept the hon. Gentleman's integrity and commitment to accepting the amendments.
§ Sir Reginald EyreI understand the hon. Lady's point, although I am sorry that she wishes to press the matter to a vote.
There is not much more for me to say, except to explain my reasons for rejecting amendment No. 16. The hon. Member for Perry Barr (Mr. Rooker) wants the amendment to be accepted. The difficulty in answering his point, at my present stage of instructions and present responsibility, is the unforeseen incident which might push up the figure. Opposition Members have won substantial concessions, including yearly accountability, a two-year limitation agreed, although not inserted in detail, and five-yearly full accountability. I have done my best to construe those matters in terms that are acceptable to the Opposition, and in view of what the hon. Lady said, I can go no further.
§ Question put, That the clause be read a Second time:—
§ The House divided: Ayes 20, Noes 127.
724| Division No. 245] | [9.59 pm |
| AYES | |
| Boyes, Roland | Pavitt, Laurie |
| Callaghan, Jim (Heyw'd & M) | Pike, Peter |
| Clwyd, Mrs Ann | Powell, Raymond (Ogmore) |
| Cocks, Rt Hon M. (Bristol S.) | Rooker, J. W. |
| Cook, Robin F. (Livingston) | Skinner, Dennis |
| Davis, Terry (B'ham, H'ge H'l) | Smith, C. (Isl'ton S & F'bury) |
| Eastham, Ken | Thompson, J. (Wansbeck) |
| Evans, John (St. Helens N) | Weetch, Ken |
| Fatchett, Derek | |
| Holland, Stuart (Vauxhall) | Tellers for the Ayes: |
| Lloyd, Tony (Stretford) | Ms. Clare Short and |
| McDonald, Dr Oonagh | Mr. Robin Corbett. |
| NOES | |
| Alexander, Richard | Bottomley, Peter |
| Aspinwall, Jack | Bottomley, Mrs Virginia |
| Atkins, Robert (South Ribble) | Brandon-Bravo, Martin |
| Baker, Nicholas (N Dorset) | Brinton, Tim |
| Batiste, Spencer | Brooke, Hon Peter |
| Beaumont-Dark, Anthony | Bruce, Malcolm |
| Beith, A. J. | Bruinvels, Peter |
| Best, Keith | Buck, Sir Antony |
| Blackburn, John | Budgen, Nick |
| Boscawen, Hon Robert | Burt, Alistair |
| Butcher, John | Maude, Hon Francis |
| Butler, Hon Adam | Maxwell-Hyslop, Robin |
| Butterfill, John | Mitchell, David (NW Hants) |
| Carlisle, Rt Hon M. (W'ton S) | Monro, Sir Hector |
| Cash, William | Montgomery, Sir Fergus |
| Chalker, Mrs Lynda | Neale, Gerrard |
| Chapman, Sydney | Neubert, Michael |
| Coombs, Simon | Pollock, Alexander |
| Cope, John | Powley, John |
| Currie, Mrs Edwina | Proctor, K. Harvey |
| Dorrell, Stephen | Roberts, Wyn (Conwy) |
| Douglas-Hamilton, Lord J. | Robinson, Mark (N'port W) |
| Durant, Tony | Roe, Mrs Marion |
| Fenner, Mrs Peggy | Rowe, Andrew |
| Fookes, Miss Janet | Sainsbury, Hon Timothy |
| Forman, Nigel | St. John-Stevas, Rt Hon N. |
| Forth, Eric | Sayeed, Jonathan |
| Fox, Marcus | Shaw, Giles (Pudsey) |
| Franks, Cecil | Shepherd, Colin (Hereford) |
| Freeman, Roger | Sims, Roger |
| Gale, Roger | Skeet, T. H. H. |
| Garel-Jones, Tristan | Smith, Tim (Beaconsfield) |
| Golding, John | Snape, Peter |
| Gorst, John | Soames, Hon Nicholas |
| Gower, Sir Raymond | Speller, Tony |
| Greenway, Harry | Steen, Anthony |
| Gregory, Conal | Stern, Michael |
| Ground, Patrick | Stevens, Lewis (Nuneaton) |
| Hamilton, Hon A. (Epsom) | Stevens, Martin (Fulham) |
| Hargreaves, Kenneth | Stewart, Allan (Eastwood) |
| Harris, David | Stradling Thomas, J. |
| Haselhurst, Alan | Taylor, Rt Hon John David |
| Hawkins, Sir Paul (SW N'folk) | Taylor, John (Solihull) |
| Heathcoat-Amory, David | Temple-Morris, Peter |
| Heddle, John | Terlezki, Stefan |
| Henderson, Barry | Thomas, Rt Hon Peter |
| Hicks, Robert | Thompson, Donald (Calder V) |
| Howarth, Gerald (Cannock) | Thornton, Malcolm |
| Jackson, Robert | Thurnham, Peter |
| Johnston, Sir Russell | Waddington, David |
| Jopling, Rt Hon Michael | Wakeham, Rt Hon John |
| Key, Robert | Walker, Bill (T'side N) |
| Knight, Dame Jill (Edgbaston) | Wall, Sir Patrick |
| Knox, David | Wallace, James |
| Lang, Ian | Wardle, C. (Bexhill) |
| Lawrence, Ivan | Watts, John |
| Lee, John (Pendle) | Wells, Bowen (Hertford) |
| Lightbown, David | Wiggin, Jerry |
| Lloyd, Ian (Havant) | Winterton, Mrs Ann |
| Lloyd, Peter, (Fareham) | Winterton, Nicholas |
| McCurley, Mrs Anna | Wood, Timothy |
| MacKay, John (Argyll & Bute) | |
| Maclean, David John | Tellers for the Noes: |
| Madel, David | Sir Reginald Eyre and |
| Major, John | Mr. Gregory Knight. |
| Mather, Carol |
§ Question accordingly negatived
§ It being after Ten o'clock, further consideration of the Bill stood adjourned.
§ To be further considered on Thursday.