CONTROL OF LIABILITIES AFFECTING SUCCESSOR AUTHORITIES

HC Deb 27 March 1985 vol 76 cc496-529

1. '(1) This section applies to any agreement or arrangements entered into after 21st March 1985 under which the Greater London Council or a metropolitan county council assumes liabilities not falling to be wholly discharged before the abolition date other than—
1. (a) an agreement or arrangements requiring the consent of the Secretary of State under section 89 above;
2. (b) any transaction requiring his consent under sections 7 to 9 of the Local Government (Interim Provisions) Act 1984 or which would require his consent under section 9 of that Act if the consideration exceeded the limit applying under that section;
3. (c) a contract of employment or a contract for the borrowing of money by the council.
2. (2) Except with the consent of the Secretary of State neither the Greater London Council nor a metropolitan county council shall after the passing of this Act enter into any agreement or arrangements to which this section applies; and if at any time since 21st March 1985 and before the passing of this Act any of those councils has done anything that would have been a contravention of the foregoing provisions if they had then been in force the same consequences shall follow as if those provisions had been contravened by that council.
3. (3) Any consent for the purposes of subsection (2) above may be given either in respect of any particular agreement or arrangements or in respect of agreements or arrangements of any class or description and either unconditionally or subject to conditions.
4. (4) No agreement or arrangements entered into in contravention of this section shall be enforceable against a successor authority.
5. (5) If, on an application made by a constituent council, by a local government elector for the area of a constituent council or by a successor authority other than a constituent council, it appears to the High Court that the Greater London Council or a metropolitan county council has entered into any agreement or arrangements in contravention of this section, the court may order any person responsible for authorising the agreement or arrangements who is, or was at the time of the conduct in question, a member of the council—
1. (a) to be disqualified for being a member of that council and to be disqualified for a specified period for being a member of any other local authority; and
2. (b) to pay to that council (or, in the case of an order made on or after the abolition date, to the appropriate residuary body) a sum not exceeding the cost of discharging such of the liabilities assumed by the council under the agreement or arrangements as have not been, or in the opinion of the court are likely not to be, discharged by that council before that date.
6. (6) No order shall be made in respect of any person under subsection (5) above if the court is satisfied that he acted in the belief that the agreement or arrangements had the consent of the Secretary of State and that any conditions attached to the consent had been complied with.
7. (7) In paragraph (a) of subsection (5) above "local authority" includes the Common Council and the Council of the Isles of Scilly; and in sections 80(1)(e), 86(b) and 87(1)(d) of the principal Act references to Part III of the Local Government Finance Act 1982 shall include references to that subsection.
8. (8) In this section "a constituent council" means—
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   1. (a) in relation to the Greater London Council, a London borough council or the Common Council;
   2. (b) in relation to a metropolitan county council, the council of any district comprised in the county;
   and "a successor authority" means, in relation to the Greater London Council or a metropolitan county council, any body or person who by virtue of any provision made by or under this Act will succeed or has succeeded to any liability of that council.
9. (9) Any statement by or on behalf of the Secretary of State before the passing of this Act that he will after the passing of this Act give his consent, or give his consent subject to specified conditions, in respect of any agreement or arrangements to which this section applies shall be treated for the purposes of subsection (2) above as a consent, or a consent subject to those conditions, given under this section.'.—[Mr. Kenneth Baker.]

Brought up, and read the First time.

4.35 pm

The Minister for Local Government (Mr. Kenneth Baker)

I beg to move, That the clause be read a Second time.

Mr. Speaker

It will be convenient to discuss at the same time the following: Amendment (a) to new clause 10, in subsection (1), leave out '21st March 1985' and insert 'the passing of this Act'. Amendment (b) to new clause 10, in subsection (2), leave out from 'applies' to the end of line 19.

Amendment (c) to new clause 10, leave out subsection (9).

New clause 9—Control of disposals and contracts—

1. '(1) Any disposal made after 21st March 1985 in contravention of section 8 of the Local Government (Interim Provisions) Act 1984 shall be void; and section 128(2) of the principal Act (protection of purchases etc.) shall not have effect in relation to the consent required by the said section 8 for any disposal made after that date.
2. (2) As respects any contract entered into after that date subsection (1) of section 9 of the said Act of 1984 shall have effect with the substitution for the reference to £250,000 and for each reference to £100,000 of a reference to £15,000.
3. (3) No contract entered into after the said 21st March in contravention of the said section 9 shall be enforceable against a successor authority; and accordingly subsection (5) of that section shall not apply to any contract entered into after that date.
4. (4) An application under section 10 of the said Act of 1984 (disqualification for membership of local authority) may be made by a successor authority and in that section "local authority" shall include the Common Council and the Council of the Isles of Scilly.
5. (5) Where by reason of a disposal or contract made after the said 21st March in contravention of section 8 or 9 of the said Act of 1984 the High Court has power to make an order under section 10 of that Act in respect of any person it shall also have power to order him to pay to the Greater London Council or, as the case may be, to the metropolitan county council (or, in the case of an order made on or after the abolition date, to the appropriate residuary body) a sum not exceeding—
1. (a) in the case of a disposal in contravention of section 8, an amount equal to the amount or value of the consideration for the disposal or, if there is no consideration or it is less than the market value of what is disposed of, an amount equal to that market value;
2. (b) in the case of a contract in contravention of section 9, an amount equal to the amount or value of the consideration in respect of the matters by virtue of which the contract is subject to that section.
6. (6) No order shall be made in respect of any person under the said section 10 or subsection (5) above if the court is satisfied that he acted in the belief that the disposal or contract had the consent of the Secretary of State and that any conditions attached to the consent had been complied with.
7. (7) In this section "successor authority" has the same meaning as in section (Control of liabilities affecting successor authorities) above.'.

Amendment (a) to new clause 9, in subsection (1), leave out '21st March 1985' and insert 'the passing of this Act'. Amendment (b) to new clause 9, in subsection (3), leave out '21st March 1985' and insert 'the passing of this Act'. Amendment (c) to new clause 9, in subsection (5), leave out '21st March 1985' and insert 'the passing of this Act'.

Mr. Baker

It is with some regret, but also with determination, that I have to seek the agreement today of the House to the introduction of these new temporary controls over the activities of the GLC and the metropolitan county councils.

Before I explain the nature of the limited new steps that we are proposing to take, I should point out that it might be helpful if hon. Members could bear in mind one or two key features of the situation with which we are now faced.

First, it has been an established principle of all reorganisations of local government hitherto that continuity of activity should be preserved, and the Bill perpetuates that tradition by ensuring that virtually all rights and liabilities of the outgoing authorities will pass to successor authorities. The cardinal principle of our proposals is that decisions as to whether to perpetuate the policies of the GLC and the metropolitan counties will then be taken not by the GLC and the metropolitan counties but by the boroughs and districts at the genuinely local level. Therefore, these measures, together with those that are already in the Bill, will avoid any pre-emption in policy by the metropolitan counties and the GLC.

The new factors in the current reorganisation are not merely the refusal of the outgoing authorities to accept, even at this advanced stage, that abolition will take place, but, beyond that, their expressed determination to frustrate the objective. I see the chairman-elect of the GLC, the hon. Member for Newham, North-West (Mr. Banks), nodding his approval of that course of action. It is to be hoped, in the interests of ratepayers and those whom they purport to serve, that reason will prevail, but the threats of action which are designed to frustrate, even after Royal Assent, the will of Parliament continue unabated. Such threats are not restricted to abolition, but that is not what we are debating today.

Secondly, I must remind hon. Members that when the Government's proposals in the paving Bill to establish interim councils, which would have secured the smooth transition which we are seeking, were rejected in another place, their Lordships nevertheless accepted that in consequence of their rejection certain broad precautionary controls would be desirable. Those broad precautionary controls were over land disposals, major contracts and, in the last year of the council's office, the section 137 "2p rate" expenditure. However, even in the few days between the announcement of those provisions in 1984 and Royal Assent it became clear that the controls might not be sufficient. The unprecedented avalanche of business undertaken in county hall and elsewhere in that period demonstrated starkly the cynicism and opportunism of the councillors concerned towards Parliament's wishes.

Our objective in proposing these new provisions is accordingly quite simple. It is to ensure, so far as we can in the face of obstruction and lack of co-operation, that abolition takes place smoothly on 1 April 1986, with as much continuity as possible. These new and strengthened controls do not even begin to approach a takeover by Whitehall of the outgoing authorities' functions or decisions in their last year in office. In recognition of their Lordships' wishes, the Greater London council and the metropolitan county councils will remain in most respects entirely free to determine how much they should spend, and on what, in their last year in office and to continue with their existing policies until they are abolished, however much the Government and my hon. Friends may disagree with those policies. To the extent that my right hon. Friend will exercise control over specific activities of authorities, he will in effect do so on behalf of the successor authorities—that is, the London boroughs and the district councils outside London.

The House may ask what kind of activities are potentially so damaging to successor authorities and their ratepayers. The paving Act controls already in existence and those in clause 89 of the Bill will be strengthened and extended by these amendments with a view to preventing, where necessary, three broad kinds of obstruction: first, "life after death" arrangements, whereby the GLC and the metropolitan county councils will exploit the provisions in the Bill which will ensure continuity by creating long-term liabilities which the successor authorities will be obliged to meet.

Mr. Tony Marlow (Northampton, North)

On the "life after death" arrangements, will my right hon. Friend confirm that the Greater London Enterprise Board will not have life after death?

Mr. Baker

The Greater London Enterprise Board has asked my right hon. Friend for a grant, under section 137, of about £21 million. There are certain contractual obligations towards the GLEB which the GLC has to meet. This led my right hon. Friend to agree a sum—I draw it from memory — of about £4.9 million, and the Government have approved that expenditure. This of course will be expenditure by the GLC, but we have made it clear that we shall want to monitor how the money is spent. We shall not be prepared to consider further requests from the GLEB, or from the GLC on behalf of the GLEB, unless it is specific about the future of the GLEB after the abolition of the GLC.

Mr. Marlow

Will my right hon. Friend confirm that if the Government permit the expenditure of £4.9 million and other moneys by the GLEB there will be a condition that there is to be no enforced trade union membership in any of the organisations which receive the money?

Mr. Baker

I shall have to look into that question. I am not entirely sure what obligations there may be under certain contracts with the Greater London Enterprise Board. However, the GLEB is a private company, limited by guarantee. A great deal of money has been switched to it by the GLC. It has built up a substantial property portfolio as well as giving support to various commercial and industrial undertakings in the Greater London area. Because it is a company limited by guarantee, it cannot be covered by the provisions of the Bill. However, it is absolutely clear that the flow of money to the GLEB from the GLC' will cease on 31 March 1986. We have said that additional money will not be forthcoming until we know exactly what the proposals are for the GLEB's operations after 31 March 1986.

4.45 pm

Mr. Jack Straw (Blackburn)

I should be grateful if the right hon. Gentleman would clarify the confusion that exists in my mind. He said that the purpose of these amendments was to implement the Government's general policy of preventing "life after death" arrangements being made by the Greater London council, among others. In those circumstances, how can the GLC make any sensible comments about what is to happen to the Greater London Enterprise Board after the GLC has ceased to exist?

Mr. Baker

I can clarify that matter quite precisely. At a meeting with Mr. Livingstone, I asked him precisely what the proposals were and he said that he was considering them. All I have said is that I should like to know what his proposals are. No doubt they will emerge during the course of the next few weeks and months.

Before the intervention of my hon. Friend the Member for Northampton, North (Mr. Marlow), I was giving examples of the activities which we are trying to prevent by means of the measures with which I am dealing. The first example is "life after death" arrangements. The second is "scorched earth" policies, designed to remove from the successor authorities, often at great expense to ratepayers, the property necessary for the proper exercise of functions—that is, asset stripping. The third example is "local government in exile"—arrangements whereby the GLC or the metropolitan county councils could fund sympathetic external bodies to act as agents of the authorities long after abolition. I find it intriguing that Mr. Livingstone should talk of "life after death", thus assuming that death will actually take place and that the abolition Bill will find its way on to the statute book.

There is clear evidence that, while the current leaders of the GLC may be disunited in their tactics over rate capping, they are totally united in their determination to asset — strip the GLC. In a broadcast on 11 March, following the meeting of the GLC which was disastrous for his leadership, Mr. Livingstone said: We will now try and deliver the party's second policy … that you go for a deficit budget. The question of course arises: how does one finance this? A council which has 12 months to go could find all sorts of ways to finance overspending, and because it knows that on 31 March 1986 it will come to an end it could do this in a completely irresponsible way.

Secondly, in the very long apologia published fairly extensively last Friday in the New Statesman following his defeat in the GLC, Mr. Livingstone referred to the letter which he had received on 1 October 1984 from Mr. John McDonnell, his deputy, who is the chairman of the finance committee, in which Mr. McDonnell discusses tactics over rate capping. In his letter he says: In the meantime I want to push as much money out of the building as possible. You should note that this also inevitably ups the stakes on compliance or non-compliance in terms of the level of cuts demanded by the Government. Mr. McDonnell has certainly lived up to his expressed intention of wanting to push as much money as possible out of the building. Three weeks ago there was a great spending spree at county hall, in which an extra expenditure of £17 million was agreed in a matter of a few hours. There can be no doubt, from what both Mr. Livingstone and Mr. McDonnell have said, that the GLC is determined to spend as much as it possibly can during the course of its last year.

The GLC is not alone in that determination. The hon. Member for Newham, North-West is on record as saying in the House: I assure the Secretary of State that I shall do everything that I can to frustrate what he is doing." —[Official Report, 22 May 1984; Vol. 60, c. 920.] The hon. Gentleman pursued that policy in Committee and I am sure that he will continue to do so during the last 12 months of the life of the GLC.

In November 1984 there were reports in the Evening Standard, The Guardian and The Times of a meeting which Mr. Livingstone addressed at which he set out plan A, which was to defeat the abolition Bill—that plan will not succeed—and Plan B, which was to set up "a Government in exile" to represent the GLC until such time as a Labour Government were elected, pledged to restore it in full. Like many Governments in exile, it will have to wait a very long time to do that. When asked where the money would come from, Mr. Livingstone said that my right hon. Friend was not able to keep an eye on spending projects of less than £100,000, and that funding would have to come out of next year's budget. We must take these measures to ensure that that does not happen.

Mr. Allan Roberts (Bootle)

We are aware of the Government's paranoia about the GLC and Mr. Livingstone, but there are six metropolitan counties as well as the GLC. What justification is there for taking such draconian powers over the spending policies of the metropolitan counties when there is no evidence that they intend to take any of the actions which the Minister accuses the GLC of wanting to take? The powers that he is taking over capital expenditure on Merseyside will damage not only the county council but the whole of the private sector and the construction industry.

Mr. Baker

I shall deal later with whether the proposals will damage the private sector. I do not think that they will damage bona fide projects, but I am glad that the hon. Member for Bootle (Mr. Roberts) accepts my arguments about the GLC.

Several metropolitan authorities do not have obstruction in mind, but the West Yorkshire county council, when the press notice was issued on Thursday, immediately agreed a set of measures to move substantial funds to a trust. I have no doubt that the council had already prepared to take that action, since it had only to approve the minutes of a meeting to agree that move.

Mr. Tony Banks (Newham, North-West)

The Minister must be grateful to the GLC for its openness in explaining future plans. It is a pity that the Government were not so open with the House about the 2,000 submissions which they received on "Streamlining the Cities". If the Government were half as open as the GLC, the GLC would be twice as honest.

Mr. Baker

The GLC's openness extends almost to vacuity. I have benefited enormously from the frank statements by Mr. Livingstone, Mr. McDonnell and the hon. Member for Newham, North-West. They do not agree with the legislation, but they do not disguise their intentions. They have said that they will take all measures available to oppose and obstruct the legislation and to create financial obligations extending beyond the time when the GLC is abolished.

I have described the main activities which the existing and proposed consent provisions are designed to prevent. These provisions do not in any sense amount to a takeover by Whitehall of the entirety of the authorities' functions. They require the Secretary of State's consent to be obtained to the following: first, the disposal of any interest in land, as already contained in section 8 of the paving Act; and, secondly, major contracts for the purposes specified in section 9 of the paving Act. By virtue of this proposed amendment, consent will be required after 21 March 1985 to any such contracts in excess of £15,000 in value. The paving Act control was £100,000 in value.

We have heard about a surprising number of contracts involving £95,000 or £99,000. One such contract concerned a scandalous advertising campaign. The GLC took whole pages in five or six major national newspapers to advertise a television debate between Mr. Livingstone and myself. I was glad that the GLC found the audience, because it was able to see the devastating defeat of Mr. Livingstone in that debate. I am all in favour of audiences being drummed up for my performances, but £99,000 for a political advertisement is a scandalous waste of ratepayers' money.

The creation, after 21 March 1985, of any liability which is capable of surviving abolition under an agreement or arrangement as set out in the new clause must have the Secretary of State's consent. In all such cases our amendments now provide a sanction of disqualification and surcharge for a failure to obtain consent after 21 March 1985. In addition, from that date disposals of land will be void, and contracts and other liabilities will not be enforceable against a successor authority contrary to its wishes unless such contracts and arrangements have had the approval of the Secretary of State.

We recognise that the Inner London education authority is in a different position from other abolition authorities in relation to our proposals for successor arrangements. Accordingly, we are considering the issue of fairly broad general consents for activities undertaken by the GLC acting as ILEA, subject to our being satisfied that such activity is not obstructive and that no scope is created for the misuse of consents. I have already said that such consents might include commitments to voluntary schools and grants to individual students. We have invited comments on that from ILEA and others. We look forward to receiving their view.

Mr. Marlow

May we have an idea of the scale of money involved and the scale of risk? Can my right hon. Friend remind the House of what the cost of the GLC was in its last Conservative year and what it is now? What is the difference in real terms, and what money is at risk? Will my right hon. Friend give an undertaking that he will not prevent the GLC spending money on conducting another public opinion poll on whether the citizens of London want to abolish the GLC, because I think that the result would be positive?

Mr. Baker

We are all waiting for the findings of the latest round of opinion polls. Perhaps the chairman-elect of the GLC will tell us the result later. In Committee we managed to tease out of the chairman-elect the fact that opinion polls taken some months ago showed that "74 per cent. say No" was a lie. We were told that the opinion polls had been interrupted by the Westminster council's action against the GLC to stop it spending money on advertising.

The opinion polls which were stifled by the GLC show that between 55 and 65 per cent. are against abolition. Then we heard that the GLC intended to conduct another opinion poll. That contract has been let, so it cannot he affected by these proposals.

The scale of money involved is enormous. In the last three years Mr. Livingstone has increased the GLC's spend from between £450 million and £500 million to nearly £1,000 million. That is an enormous increase. He has doubled the GLC's spend over three years—and doubled the rate precept.

Many of our measures are directed to ensure that the GLC's considerable property assets are not stripped from the GLC and handed to bodies which favour Mr. Livingstone and his friends and their political views. We want to ensure that such assets are transferred to the residuary body on 31 March 1986. If they are disposed of, the proceeds will be returned to the ratepayers, who paid for them originally.

Mr. Tony Banks

The Minister should not continue to use the phrase "asset stripping". There is an enormous difference between the GLC redistributing wealth round existing local authorities and his hon. Friends who go in for asset stripping on a big scale and transfer their money to offshore funds.

5 pm

Mr. Baker

That is a rather raw nerve. The hon. Gentleman is quite happy to use the words "asset stripping" against my hon. Friends, but assets might well be disposed of in an irregular way, and I could quote various phrases from Mr. Livingstone, who has said that he has it in mind to do so. That is asset stripping. I want to act to protect the interests of the successor authorities and of the ratepayers in London.

I should like to refer to the administrative arrangements. We shall seek to reduce the effects of the new provisions on all concerned by the issue of broad general consents, provided that by doing so no scope is created for activity that is prejudicial to abolition or to successor authorities and their ratepayers. Indeed, I think that many of the metropolitan county councils do not have the motivation that is evident in the GLC, and much of the activities and work of a capital nature which they undertake will be covered by such broad general consents.

Our record in exercising the broader paving Act controls to date is exemplary and, indeed, has been acknowledged as such by some of the authorities concerned. We were told when the measures were introduced that we would be overwhelmed by a mass of administrative detail. In fact, while we have not been willing to issue consents to some proposals pending further justification, by judicious use of general consents we have kept the administrative burdens to manageable levels. Over 4,000 applications have been considered by the Department using a very small nucleus of staff, and of them over 95 per cent. have been dealt with within four weeks, with many urgent requests cleared within 24 hours. We have not yet heard of any case in which the requirement to obtain consent has been demonstrated clearly to have prejudiced innocent third parties.

There are clear reasons and evidence on the record to show why we have had to act in this way. Experience with the paving Bill controls which were announced on 12 July to take effect on Royal Assent clearly demonstrated that we could not afford to make that same mistake again. In the intervening period between the announcement and the Act coming into effect authorities disposed of land and let contracts worth millions of pounds at enormous expense to ratepayers. However, I wish to make it clear to the House that the new and extended provisions will have no effect on anything done before the date of announcement. That would be quite wrong. We have taken steps to ensure that the authorities were aware of the new proposals on the day that they were announced.

Mr. Chris Smith (Islington, South and Finsbury)

I refer to the new limit of £15,000 which the new clause enshrines, and general consents, to which the right hon. Gentleman referred. Is he prepared to give a general consent to ILEA over the purchase of basic education equipment, because the £15,000 limit will catch virtually every single order of supply for pens, pencils, furniture, blackboards and so on which ILEA undertakes? Obviously it would be nonsense for the right hon. Gentleman to have every such contract under his scrutiny.

Mr. Baker

I do not know whether the hon. Gentleman was in the House when I mentioned ILEA, but I said that we would envisage giving broad general consents to ILEA, or the GLC acting on behalf of ILEA, because that is a continuing authority. It is not the intention to impose such control over the continuing function of a body providing education to inner London.

I was referring to the announcement last Thursday. In normal circumstances it might have been preferable to bring the new provisions into effect on Royal Assent. However, these are not normal circumstances. Despite increasing misgivings, we stayed our hand until the Bill had been accepted on Second Reading and considered in Committee. Now that the House has accepted the reality and the principle of abolition, we can no longer do so. It would be irresponsible to delay further, and to postpone the effect of the provisions until Royal Assent would have led—this is the thrust of the amendments—without any shred of doubt to a final bout of asset stripping the like of which has never been seen before. The successor authorities' cupboard would have been bare and ratepayers would have had to foot the bill. For those reasons we have been forced to seek Parliament's approval to the new provisions taking effect on the day following my announcement to the House on Thursday last. For the same reasons, we cannot accept the Oppositions's amendments.

Those who are proposing to purchase an interest in land from the GLC or metropolitan counties, or to rely on a contract or other enforceable arrangement that extends beyond abolition—that is the important point—must be aware of the impending abolition of the authorities. It is wrong that where consent is not obtained successor authorities and ratepayers should be legally obliged to foot the bill for the misdemeanours of irresponsible councillors. For that reason, and because we consider that disqualification may not prove to be an effective deterrent to unlawful actions in the face of the continuing threats that are being made, we are proposing not only that councillors should face a penalty of surcharge, but that those who collude with them in such actions should not profit by their activities. Accordingly, where the consent of my right hon. Friend the Secretary of State is not obtained, the disposal of land will be invalid and the contract or other arrangement will not be enforceable against successor authorities.

I recognise that there remains a risk that some third or fourth party will be prejudiced. That is why we are taking steps to publicise the effects of the new provisions widely among the professional and specialist groups concerned with property transfer and contracts. The granting of consent to, for example, a long-term contract will minimise the risk that a successor authority might attempt to renege on the arrangement on the ground that it was contrary to its policies. These proposals will therefore help to create certainty for contractors and others in a climate of increasing uncertainty created by the attitude of outgoing authorities.

Mr. John Fraser (Norwood)

Will the right hon. Gentleman give way?

Mr. Baker

If the hon. Gentleman will forgive me, I shall not give way again as I have already given way a great deal. No doubt I shall have to reply towards the end of the debate.

I have given the House examples of the obstruction that we are facing. Only last week readers of the Labour Herald were urged to set up an alternative council to organise and propagate the struggle. Setting up an alternative council now, according to the paper, will help to make it clear that only the involvement of the working class and the whole community can achieve a victory.

The action that we are taking today is fully justified in view of the expressed intentions of the leading Labour members of the GLC to subvert the purposes and effects of abolition. They speak of a GLC in exile, of life after death, and of pushing as much money outside the building as possible. All that could involve asset stripping on a huge scale. We are simply not prepared just to sit idly by and let that happen. We have a responsibility to the ratepayers in London and the London boroughs. We shall not let the GLC go on a spree and leave the bill either for the Government or for the London boroughs to pick up from the overturned table.

Mr. Straw

The two new clauses are a constitutional disgrace. They involve retrospective legislation. They give further centralised power over county halls to Marsham street and Whitehall with no justification whatsoever. They are a further illustration of the arrogance and contempt for democracy that has characterised so many of the Government's actions in respect of local authorities and in many other policies.

The Minister of State talked about the need to preserve the continuity of activity by the successor authorities. Of course we have always believed in that as a principle of local government reorganisation, but when the Government set out on the path of reorganisation they made no attempt to build the foundations upon which that continuity could be maintained. There can be no continuity of government without a basic consensus and agreement on the need for reorganisation. This is the only local government reorganisation this century in which the case for reorganisation has been wholly disputed and a matter of partisan disagreement, in which there was no proper public discussion and no inquiry before it became a manifesto commitment, and in which the so-called consultation that was allowed after the manifesto commitment was announced has been treated with utter disdain. Virtually none of the 2,000 bodies making representations to the Government have had their views taken into account.

At other times the Minister of State has claimed to be a member of the real Conservative party—the moderate Conservative party; the Conservative party that has not been hijacked by Right wingers. He should be ashamed of himself for putting his name to the measures. He says that the new clauses do not begin to amount to a takeover. He knows that that is utter humbug because he then read out a list of activities that would be subject to control by the Government. The disposal of land, major contracts — indeed, any contract in excess of £15,000—and many other matters will be the subject of consent by the Secretary of State. The Minister revealed himself when he said that the whole purpose was to prevent authorities from being obstructive. I must explain to the Minister that democracy involves giving rights not to those with whom one agrees but to those with whom one does not agree. There can be no democracy without that.

What the Minister may interpret as obstruction is, in almost every case, an entirely legitimate action of opposition. The Bill to abolish the metropolitan counties and the GLC is not yet law. The Minister—like the Prime Minister—may nurse the idea of dispensing with tedious procedures when the views and consent of Members of Parliament have to be taken into account before something becomes law, and instead want a position — which now operates within the Cabinet —whereby the Prime Minister's edict is the rule.

However, under the present constitution, laws are not laws until they are passed by both Houses of Parliament. It is entirely reasonable for hon. Members on both sides of the House and for institutions outside the House to say that they will act according to the present law. It is not for anyone to anticipate the possible outcome of the Bill. After all, this time last year we were told that there was no question but that the GLC and the metropolitan counties would be abolished from 31 March 1985. The Minister may not remember this because he was not then the Secretary of State's minder, but we all remember how utterly confident the Government were that the paving Bill would go through Parliament unamended. After all, they had majorities in both this House and another place. But they were wrong. Whatever arrogant bluster the Minister displays—and I congratulate him on the way in which he has sought to argue the unarguable during the past six months—the reality is that as the debates proceeded in Committee, the majorities there dropped—in no small part thanks to the Minister's advocacy. The Government, with an overall Committee majority of 11, on one occasion could manage only a majority of three on a key matter of principle.

Last December the Government's majority of 140 over all other parties fell to 23 in what was a devastating moral defeat for them. Who knows what will happen in another place? I believe that it will not be happy with the fact that the Bill was guillotined, although the Minister had accepted that there was no filibustering in Committee. The Government will not be happy until London becomes the only capital city in the free world without a proper voice. Nor will they be happy about the fact that because, in a wholly doctrinaire way, the Government have decided to force their views through in an exercise of elective dictatorship there will be enormous disruptions of major services in the metropolitan counties.

Mr. John Maples (Lewisham, West)

The hon. Gentleman said that the new clauses were an attempt to prevent the GLC and other authorities from performing reasonable and democratic functions. Would it be a reasonable exercise of its power if the GLC pre-financed a GLC in exile?

5.15 pm

Mr. Straw

I have seen no proposals for that. When we were discussing placing within the Local Government (Interim Provisions) Bill a proposal that the Secretary of State should be required to act reasonably in the exercise of his functions, he said that that was wholly unnecessary because the requirement to exercise statutory powers reasonably is already a well-established principle of the law. There is no need to spell that out in the Bill. That action would only invite spurious legal challenge."—[Official Report, 30 July 1984; Vol. 65, c. 163.] The requirement reasonably to exercise statutory powers falls on local authorities just as much as it falls on the Secretary of State. Local authorities are entirely the creatures of statute. The courts have rightly been careful about how local authorities should exercise their powers. Were any local authority—even the GLC—to attempt to set up some institution in exile, which is plainly fanciful and would be outside the spirit and letter of its powers, that would be the subject of challenge in the divisional court, and I have no doubt that that court would find against such a proposal.

Mr. Tony Banks

I could not agree with my hon. Friend more. I suggest that the Minister stops reading the Labour Herald; it is not doing a great deal for his blood pressure. He has read a series of articles about future thinking as being the reality of decisions made in the GLC. Does my hon. Friend not agree that at county hall everything must be pushed through with a majority of four —not 140—and that there is no question of the GLC, either now or in future, acting illegally? It cannot do so.

Mr. Straw

I am grateful to my hon. Friend. The GLC's track record on observing the law is exemplary, and a great deal better than that of the Secretary of State who has two previous convictions. One was for breaking the law on the Greater London development plan and the other was for acting unlawfully in respect of Lambeth and Lewisham area health authority. We do not need any lectures from the Secretary of State about the need to observe the law.

Mr. Tony Lloyd (Stretford)

Will my hon. Friend address himself to the question posed by my hon. Friend the Member for Bootle (Mr. Roberts), which was not answered by the Minister, although he promised him an answer? My hon. Friend has concentrated on answering charges levelled against the GLC, and that is right and proper. He has said nothing about the metropolitan county councils because no charges have been made against them. Does he agree that it is a gross contempt for the Minister to include the Greater Manchester council and others in the new clause without any attempt to justify that action?

Mr. Straw

There is not a shred of justification for including the metropolitan counties in this move. It is possible that one or two people on the GLC said things in their anger that they knew would be translated into action. Indeed, that is the Minister's prima facie evidence. But that does not apply to the metropolitan counties, so there is no justification for the Minister attempting to include them in the proposals.

Mr. Allan Roberts

Does my hon. Friend agree that the new clause is an attempt to circumvent the decisions of another place when it voted out proposals in the paving Bill? The Government are trying to reintroduce paving Bill proposals that the other place rejected and to take complete control of the metropolitan counties and the GLC before the abolition Bill is on the statute book.

Mr. Straw

As usual, my hon. Friend steals my best line. That was exactly what I had written in my notes and what I was about to say. It is a good point. The Secretary of State, much to his chagrin, last year suffered a major reverse in another place. While the Government have had to put up with that defeat, they have never accepted the principle of it. The Minister was uncharacteristically ungenerous when he spoke of that defeat. He said that the other place had rejected the proposals for interim councils to provide for a smooth transition to the new councils. The Government have never accepted the principle and, having failed to take control and change the political control of these authorities by the front door, they are now attempting to take control by the back door.

When I began I said that what Ministers fail to appreciate is that democracy is about giving rights to people with whom one profoundly disagrees. The Government now show little or no respect for the will of local electorates. These councils still have a mandate to act. They were democratically elected. We wished their mandate to be renewed this May. The Government have denied them that mandate, but they continue to have the consent of the people who elected them to act reasonably, subject to the law and supervision of the courts. The Government are denying them that right to speak on behalf of their electorate. We understand why they are doing that.

The Secretary of State revealed himself about a year ago when he was asked why he did not have faith in the local electorates to hold their local councils in check. "Ah", he said, "we've tried that, but it's not working very well". It was working pretty badly this time last year but, by God, the local democratic process is working even worse now because throughout the country the Conservative party is suffering the most significant political defeats that it has suffered for 10 years. The Conservatives have been running centralised control of local government in Scotland for four years. The result is that there is utter chaos in local government, so much so that the Prime Minister is calling a panic meeting this Sunday to which she has summoned the English Minister with responsibility for local government to try to sort out the mess. Perhaps the Minister would like to tell us how it will go down in Scotland when a Sassenach has to move in to sort out its rates mess. So much chaos has been caused there that the Conservatives have even lost a seat in Troon. Troon is golfing country, solid Conservative country, and the Conservatives lost the seat to Labour.

I am afraid to say that the disease of democracy has come south because in the last 23 council by-elections, held in February, in which there were three-cornered contests—and I will happily give the results of the two-cornered contests, because they were even worse for the Conservatives—the Conservative vote has completely slumped. I will give the results: Conservative, 25.1 per cent., alliance, 32.9 per cent. and Labour 40.4 per cent. In those contests where there were two two-cornered fights, the results were even worse: Conservative, 23.2 per cent., Liberal/SDP, 30 per cent. and Labour 42.4 per cent. With every turn of the centralised screw, the Government lose support not only in our areas but also in theirs.

When the Minister of State replies to the debate, will he say why he decided upon this ludicrously small sum of £15,000? Last year the Secretary of State, in what was an unexceptionable statement as far as it went, said: The level at which to pitch the threshold … must be a matter of judgment. We want it to be sufficiently high to eliminate the need to refer many small contracts to the Government."—[Official Report, 30 July 1984; Vol. 65, c. 167.] We did not agree with what he was saying, but at least the £100,000 figure was relatively high. What is the case for including contracts of £15,000? The Minister has to spell out why such a tiny sum was seized upon.

The last point that I wish to raise concerns retrospection. The two new clauses are retrospective in effect. They cannot become law at least until June or July, but they take effect as from two weeks ago. We do not say, and nobody says, that all retrospective legislation is bad.

Mr. Patrick Cormack (Staffordshire, South)

Most of it is.

Mr. Straw

Indeed, most of it is, and that was my next line. We accept that tax changes have to come into effect on the day on which they are announced. We also accept, as the House accepts, that there is no objection to retrospective legislation which makes lawful that which has previously been unlawful—in other words, improves the rights of the citizens whom we represent. But the House has always, and rightly, thoroughly opposed legislation which is retrospective in effect and which makes unlawful that which was previously lawful.

Indeed, it is now enshrined in the European Convention on Human Rights that No-one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence, under national or international law, at the time when it was committed. We are not making criminal law, but, by God, the clauses that the Minister of State is proposing are criminal in their effect. Indeed, the power to fine and to penalise councillors and former councillors is unlimited: it is as great as that possessed by any criminal court, and as dire in its effects.

I quote not only the European Convention on Human Rights on the effects of retrospective legislation, but a former Back Bencher speaking in the debate on the War Damage Bill. He said: I feel proud to be able to take part in this debate, as I feel that this is the House of Commons at its best, challenging the power of the Executive, which has for long been our traditional role. That is what we are here for, and one could not have a better battleground than this Bill. I regard this as a very nasty little Bill … It was conceived, if I may say so, in dishonour and it ought to have been strangled at birth. I hope that this evening we will strangle it. He continued: I think that it was Disraeli who said that nothing that is morally wrong can be politically right. If we throw out this Bill tonight I can imagine that wily old Jew looking out of his window in Heaven with pleasure and with approval in his eyes, smiling down on us and saying 'Well done'."—[Official Report, 3 February 1965; Vol. 705, c. 1178–84.] He finished his set of speeches on the offence of retrospective legislation which made unlawful that which was previously lawful by saying: If it is still legitimate to quote Virgil in this House, facilis descensus Averni which can be roughly, but inaccurately, translated as 'Retrospective legislation is a damned slippery slope'. Let the House dig its heels in and say that it will have no more of it."—[Official Report, 2 March 1965: Vol. 707, c. 1264.] Those were the fine words of the then hon. Member for Wanstead and Woodford, now the Secretary of State for the Environment. He was right then. We are right now. I urge the House to throw out the clauses.

Mr. Marlow

The hon. Member for Blackburn, (Mr. Straw) sought to draw the attention of the other place to the majorities that the Bill was attracting in its passage through the House. I think that he sought to draw the attention of the other place to the majorities that we had earlier in Committee of the whole House and then later in Standing Committee. The hon. Gentleman I am sure will agree with me that, as time goes on and as the arguments are rehearsed and lobbyists and outside interests get involved, so hon. Members become more aware of the real issues involved in the Bill.

I am sure that I will get his agreement when I suggest that he takes account of the majority that the Government will secure for their amendments today and tomorrow, rushes up to the other end of the building, goes to see all his friends in the other place and tells them precisely what has happened here today and what will happen here tomorrow because I have no doubt that they will be very interested.

Mr. Tony Banks

They can read.

5.30 pm

Mr. Marlow

Yes, I know that they can read, and I am sure that the hon. Member for Blackburn knows that. Nevertheless, he has sought to draw this point to their attention. I am sure that he will be only too pleased to draw the additional point that I am making to their attention as well.

The hon. Gentleman brought before the House the novel Labour party contention that democracy is about giving power to those with whom one profoundly disagrees. I do not recall the hon. Gentleman fighting his way to the Dispatch Box and television screen during the coal dispute to say that there should be a ballot. Nor do I recall him fighting his way to the Dispatch Box to make strong and persistent speeches against the violence that was being applied by one section of Mr. Scargill's supporters against those miners who wished to work. That is a novel creed and I am sure that we all welcome it.

Mr. Cormack

Is it not an old and honourable creed that the Conservative party is the true guardian of the constitution? Why allow the hon. Member for Blackburn, with the shabby record to which my hon. Friend has just referred, to steal the clothes of the Tory party?

Mr. Marlow

The hon. Member for Blackburn has not stolen the clothes of the Conservative party; he has walked past a hook and put them on and as he walks out of the door he will hang them up again.

The hon. Gentleman asked what was the case for the reorganisation in which we are now involved. Part of the case for the reorganisation is that it was in our manifesto. The hon. Gentleman referred to that. He is concerned about many of the things being done at the moment and he says that the authorities should be allowed to continue those policies because they were in their manifestos.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. The hon. Gentleman should discuss the new clause that is before the House and not make a speech such as he would make on Second Reading.

Mr. Marlow

I apologise if I was out of order, but I was only replying to the hon. Gentleman's points.

Mr. Allan Roberts

Where, in the Conservative manifesto, was there a commitment to take control of existing democratically elected councils to the extent of requiring the Secretary of State's approval for any contract over £15,000 in advance of abolition?

Mr. Marlow

I shall come to that later. If the hon. Gentleman will be patient, I shall be happy to answer that point and I intend to do so.

The hon. Member for Blackburn asked why we are concerned to introduce the new clause. He will be aware that there has been a sea of change in local government. There was a time when local authorities were there to provide services for the people who elected them. From time to time the political control of local authorities would change, but there was a basic consensus about the provision of services. There might have been a slight difference between a Labour and Conservative local authority, but there was a consensus about the provision of services. Recently, sadly, there has been a great, grave and damaging change.

Some local authorities and some parties in local authority areas have looked upon victory in local government as an opportunity for political posturing, for using ratepayers' money to provide jobs for their own people, political groupings and activists, and for providing organisations with funds for minority interests, which the vast majority of people who voted in the local election were not in favour of.

My right hon. Friend the Minister said that the GLC is likely to spend £900 million this year. Three years ago it spent some £450 million. Allow for inflation an increased cost each year of £50 million, and against the £450 million that London spent three years ago, perhaps, in exceptional circumstances, one could justify an expenditure of £600 million for the provision of adequate services. But no, the GLC seeks to spend £900 million. That leaves £300 million of ratepayers' money available for expenditure on mean, obscure and extravagant little schemes, of which the Labour party in London seems to be so much in favour.

Of course my right hon. Friend must bring the Bill before the House—[Interruption.] I think that I heard the hon. Member for Bootle (Mr. Roberts) say that there has been an election. I come back to his earlier point.

Mr. Allan Roberts

Will the hon. Gentleman give way? He has got it wrong.

Mr. Marlow

If the hon. Gentleman will allow me to answer his first point, I might have a chance to listen to his second point.

The hon. Gentleman's first point was about democracy. He asked whether it was in the Conservative party's manifesto that we intended to control these relatively small amounts of money. At the time of the manifesto some of the appalling consequences of the extravagance of the GLC, even in our wildest nightmares, could not have been thought of. The need is there and action must be taken.

I think that the hon. Gentleman used the words "manifesto", "democracy" and "mandate". The GLC's mandate ends in a month's time. Therefore, is it right that it should continue to spend money in such a political way?

Mr. Allan Roberts

Surely the whole point is that if the Government had not intervened there would have been an election in May and the so-called hard-pressed ratepayers, the electorates of Greater London, Merseyside and elsewhere, could have had their democratic say about the issues that the hon. Gentleman is now raising. The Government have cancelled the elections because the views that the hon. Gentleman expressed about the GLC's expenditure would not have been shared by the electorate and Labour would have won the election.

Mr. Marlow

As the hon. Gentleman well knows, since the Government came to power it has been the intention to abolish one layer of local government to bring local government closer to the people and to cut the cost of it to the people. It has taken just over three years to do so—

Mr. Tony Banks

rose—

Mr. Marlow

If I keep giving way, the hon. Gentleman will not have time to speak.

There is obviously a transition period. During that time, is there any sense in allowing those whose mandate has expired to continue, given Mr. Livingstone's commitment and that of the Lord Mayor elect to spend money in ways which I am sure the House would not support?

Mr. Tony Banks

If the Bill is about getting rid of one tier of local government and taking it closer to the people, why not abolish the shire counties?

Mr. Marlow

The hon. Gentleman knows that the nature of the shire counties and the districts within them is completely different from the metropolitan authorities. He will also be aware that the shire counties have a much longer history and are much more a part of our national life.

Mr. Hugh Dykes (Harrow, East)

On a point of order, Mr. Deputy Speaker. My hon. Friend is once again reverting to a Second Reading speech and is not referring to the new clause. I appreciate that my hon. Friend is late in coming into the debate and has not been involved before. I know that he has been a member of the Committee, but he has not been substantially involved in earlier discussions. Therefore, would it be in order to remind my hon. Friend that he should stick to the new clause or conclude his speech?

Mr. Deputy Speaker

Order. I am sure that no hon. Gentleman needs to be reminded to stick to the new clause.

Mr. Marlow

As far as I can remember, over the last four or five minutes I have been responding to interventions from Opposition Members. I am sure that the interventions were in order and that my replies have therefore also been in order.

My right hon. Friend is embarking upon a vital and valid task. If I may give him one piece of advice, I hope that he will not be unduly modest in his application of the new clause.

Mr. John Cartwright (Woolwich)

In view of the appalling pressure of time, I propose to concentrate on the issues involved in the new clauses. I endorse everything said by the hon. Member for Blackburn (Mr. Straw) about the unattractive nature of these measures. They are another example of something of which we have had far too much in recent years—enabling legislation for the Secretary of State. The new clauses enable the Secretary of State to forbid spending and to prohibit transactions which are in themselves perfectly legal but of which he may disapprove on a variety of grounds.

The Minister for Local Government may be able to justify to himself what is being done on the ground of what he regards as a special problem, but he will find it difficult to justify the measures on a wider basis.

As the hon. Member for Blackburn said, the timing of the coming into effect of the new clauses assumes that the Bill will go through Parliament in its present form and that the remaining stages of the parliamentary process will be a rubber stamp operation. I find that assumption unappealing.

How effective will such financial control be? Subsection (2) of the new clause 9 reduces to £15,000 the limit on the size of the contracts that the GLC or the metropolitan councils may enter into without the Secretary of State's permission. That is an incredibly small figure. The subsection represents a considerable strengthening of the stranglehold created by the Local Government (Interim Provisions) Act.

Will such control be effective? Under section 137 of the paving Act the Secretary of State was given responsibility for approving all grants by the GLC. In the event, the Secretary of State has been forced to give a blanket general approval to all grants under the sum of £15,000. Interestingly, among those grants are many to which Ministers and Conservative Members have taken considerable exception.

The grants approved by the Secretary of State under his blanket approach include, for example, a grant to Chile Democratico GB, which will receive £6,473 in the coming financial year. Gay Legal Advice will receive about £3,300. The Abyssinian Society — apparently a West Indian social club—receives £9,156, with the Secretary of State's approval.

What is perhaps most surprising is that the present Secretary of State should have given approval to the Jewish Socialist Group, which is to receive £8,050 in the coming year. The London Gay Campaign Group is to receive £10,576. Hall Carpenter Memorial Archives Ltd —apparently a collection of records about lesbians and gay men—is to receive almost £15,000.

Mr. Tony Banks

rose—

Mr. Cartwright

We are told that the draconian measures in the new clauses are necessary to stop the spending that right hon. and hon. Gentlemen on the Tory Benches regard as irresponsible, unreasonable and against the ratepayers' interests. In fact, however, much of the spending to which hon. Gentlemen object is receiving the approval of the Secretary of State because of the ineffectiveness of such bureaucratic control.

5.45 pm

Mr. Tony Banks

I disagree with the hon. Gentleman. Those grants have been passed not because of the ineffectiveness of the controls operated by the Department of the Environment, but because they are for perfectly laudable and admirable organisations. When the Secretary of State sees where the grants are going, he entirely agrees with the GLC and approves them. We should not inflame the prejudice and bigotry of the hon. Member for Northampton, North (Mr. Marlow).

Mr. Cartwright

I know that it is nearly Easter, but if the hon. Member for Newham, North-West (Mr. Banks) believes that, he must believe in the Easter bunny and the tooth fairy, too.

As the chairman-elect of the GLC knows, grants of less than £15,000 are given blanket approval because the civil servants are so bogged down with plodding through miles and miles of perfectly reasonable and praiseworthy larger contracts that they do not have time to scrutinise the smaller ones, which include many of the grants to which the Conservatives object.

Mr. Allan Roberts

The hon. Gentleman points out the irony of the situation. When the Secretary of State took powers to approve or disapprove of grants, he undertook to disapprove not of who was to receive the grants, but only whether they were illegal. He did so despite the prejudiced protestations of his hon. Friends, such as the hon. Member for Northampton, North (Mr. Marlow). I congratulate the Secretary of State on sticking to his undertaking, giving grants to many worthy organisations and refusing to accept the prejudiced views of his hon. Friends.

Mr. Cartwright

An interesting coalition is being formed on this issue.

The controls that would operate under the new clauses would not affect spending of the type to which Conservative Members are so violently opposed. They are a constitutional absurdity and a bureaucratic nightmare. I suggest, on the basis of the examples that I have given, that they will be ineffective, too. We shall certainly vote against them today.

Mr. Cormack

When the hon. Member for Woolwich (Mr. Cartwright) read out his somewhat bizarre list, I was tempted to quote another Latin tag—de gustibus non est disputandum. There is certainly no accounting for the taste of my right hon. Friend if he has indulged in such extraordinary beneficence.

We are currently debating a very important and central principle. This seems to be the latest chapter in a sorry saga. I have become increasingly depressed as I have watched the Government fall deeper and deeper into the morass during the passage of the Bill. It gives me no pleasure to say that. I have always had the highest regard for my right hon. Friends the Minister for Local Government and the Secretary of State, but they have done the Tory party no service by championing this measure.

I fully understand the sense of annoyance, aggravation and anger provoked by some of the stranger activities of councils throughout the land. However, as the hon. Member for Blackburn (Mr. Straw) reminded us, those councils were democratically elected. Uncomfortable, inconvenient and thoroughly objectionable as we may find some of their more profligate decisions, we must accept the fact that they were democratically elected.

I do not like the measures that we are discussing now any more than I like the general premise on which the Bill is built. I have made my opposition to the Bill reasonably plain on a number of occasions.

Mr. Dykes

My hon. Friend has correctly described the constitutional slippery slope on which the Government have recklessly embarked in bringing forward the Bill. Does my hon. Friend agree that what makes the situation even worse is the fact that the objectionable spending—the central point of the original initiative—amounts at most to 5 per cent. of the total GLC budget, or the same proportion as when the GLC was under Conservative control?

Mr. Cormack

That is a good point. I am worried because I can foresee the Bill becoming the Tory party's devolution, and I do not want that to happen. I agree that only a small percentage of expenditure is involved. This is a classic case of a constitutional sledgehammer being used to crack a few nuts.

My objection to new clause 10, like my objection to the Bill, is based on what I consider to be several impeccable Tory grounds. The Conservative party has always, and with full justice, been able to demonstrate that it is a champion of the constitution. The constitution is in need of championing at the moment because, although they might not be in the Chamber, there are many on the militant Left of the Labour party who would bring down the whole edifice that sustains our freedom to achieve their political objectives. To steal even the smallest paragraph from the smallest page of that book is an extremely dangerous thing for the Conservative party to do.

The Conservative party has always eschewed centralism and repudiated, when possible, the doctrine immortalised in the words that the gentleman in Whitehall knows best. However, time and again in this Parliament and in the previous one, Ministers have endorsed that gentleman in Whitehall knows best doctrine. I have found it exceptionally painful to listen to that endorsement as it smacks of an arrogant attitude towards power, which is not in the true Tory tradition. When in power, even with a substantial majority, and especially when elected with a minority vote in the country, we must behave with humility and understanding such as is not always present in doctrines enunciated from the Dispatch Box.

As to new clause 10, I ask my robust and hon. Friend the Member for Northampton, North (Mr. Marlow) to ponder longer than perhaps he has hitherto, as it is an anticipation of the will of Parliament. We have a bicameral legislature and the Bill has not even left the Commons. Nevertheless, the new clause anticipates that Parliament will pass the Bill without amendment. Perhaps it will. I hope that it will not and that the Lords will exercise their discretion firmly and properly, as they did with the paving legislation. If they do, my hon. Friend will feel a little dismayed. He can avoid that feeling by not supporting new clause 10. It makes me exceptionally sad that a man of his taste, discernment and understanding of the Tory philosophy should allow himself to be party to a measure that is inimical to true Toryism as I understand it and as I thought he understood it.

Mr. Marlow

I am grateful to my hon. Friend, who we all know is a great constitutionalist, for giving way. He said that the authorities with which we might have disagreements have a mandate and are therefore entitled —indeed, are duty bound — to carry through their mandate although it is about to expire. My hon. Friend will know that this matter was a central part of the Conservative party manifesto on which we fought the 1983 general election. As my hon. Friend is an hon. Friend, perhaps he would like to take this opportunity to tell the House that he told the electorate that he opposed such a proposal during the election campaign, because I am sure—

Mr. Deputy Speaker

Order. If the hon. Gentleman pursues that intervention he will be getting away from the new clause under consideration.

Mr. Cormack

Perhaps you will allow me to respond briefly to my hon. Friend's intervention, Mr. Deputy Speaker. I have made it plain, as I did just before Christmas, that my election address did not mention this wretched business at all. I believe that we are elected individually by our constituents. When questioned at election meetings I made my views quite plain. I said that there was a need for reform in London but there was also a need for an elected body to oversee the affairs of this great capital city. I am much more in sympathy with the Government's views about the metropolitan county councils.

When, more than ever in its history, the constitution needs a true and doughty guardian, it is extremely dangerous for a party which can truly claim to be its guardian to be tempted by the deviationist tactics of reprehensible local authorities into endorsing a principle that is utterly unconservative, non-Tory and unconstitutional.

Mr. Derek Fatchett (Leeds, Central)

As is usual, the evidence presented by the Minister today was insubstantial and prejudiced. Yet again, his argument related almost entirely to the GLC.

The hon. Member for Staffordshire, South (Mr. Cormack) said that he made his stance on the GLC quite clear in his election campaign. I accept what he says, but he said that he did not make much of an argument about the metropolitan counties. I suspect that the metropolitan counties have got caught up in the coat tails of the GLC and the prejudice in some sections of the Conservative party against the GLC, especially a Labour-controlled GLC. Time and again in Committee the Government have had an opportunity to make a case against the metropolitan counties, but none has been made, because there is none. New clause 10 is another sign that the Government do not have a case to make against them.

The new clause implies criticism of how councillors will behave, so it is incumbent upon the Minister to make clear his accusations against the metropolitan councils. If he has none, he should make that clear, and make it clear that he is not criticising councils or councillors.

The hon. Member for Woolwich (Mr. Cartwright) read out a list of organisations and continued, as it is a populist thing to do, to draw certain conclusions and say that the Secretary of State had approved of those organisations and allowed grants to be made to them. The real issue is not whether the Secretary of State approves of those organisations, but whether he should have the power to make a judgment about them. Surely that power should reside not in Whitehall or in the Department of the Environment, but with elected councillors, who are sensitive to local needs.

The hon. Member for Northampton, North (Mr. Marlow) displayed his prejudices with great vigour in Committee, and he did so again today, although it was not one of his most prejudiced performances. He should think quietly about the principles that he is supporting. He may not agree with certain organisations, and he may want the Secretary of State to say, "No grants or payments to those organisations." However, as the hon. Member for Staffordshire, South has pointed out, there is a real danger in that view, because there could well be a change in political power, as a result of which a different Secretary of State might take a totally different decision.

6 pm

The essence of the argument against this legislation is that it makes a judgment in anticipation of what this Chamber and the other Chamber will do. That is a dangerous position for this or any subsequent Government to find themselves in in their relations with local government as well as in a general political sense.

Conservative Members should take a step back and think about the more general arguments rather than their own positions of prejudice in relation to particular policies. This is an important new clause, not for what it does, but for what it stands for. Those hon. Members who vote against it will support the constitution and the basic principles which have been essential to democratic politics.

Dr. Ian Twinn (Edmonton)

I understand the stance which the Opposition have adopted, because they want to retain their empire after the abolition of the GLC and the metropolitan counties. They also want to have their interests protected. I fully understand their argument that they should be able to transfer large sums of money from democratically elected bodies to bodies which are answerable to no one except the Labour party and its supporters.

Conservative Members want to see abolition. It is worth pointing out that at the last general election Conservative Members in London were specifically elected on a manifesto which proposed the abolition of the GLC. A majority of Conservative Members in London were elected on that manifesto. In my own constituency, it has been proved that that is what my constituents want.

The House has already debated the paving Act. This Bill has received a Second Reading and has gone through Standing Committee. The views of the House are clear, and I hope that the other place takes careful note of those views and of the fact that the Bill was not substantially changed in Committee.

These new clauses are necessary. It is necessary that the Secretary of State should have sanctions over these contracts if we are to avoid the problem of asset stripping in London and the metropolitan counties. It may be that the GLC and the metropolitan counties will behave according to the will of Parliament and recognise that it would be wrong to act prematurely when Parliament's will is already known. However, we have every reason to believe that these councils will not hold fire and that they will try to pre-empt what the House intends.

The GLC is particularly opposed to the Bill. That is its right. The Labour party is in control at county hall and believes that it has a mandate to oppose the legislation. No Conservative Member would question the Labour party's right to do that, although we may question its reasons for doing so. However, obstructing the will of Parliament is another matter.

Mr. Dykes

How does my hon. Friend feel about the fact that only two Conservatives at county hall agree with this proposal, whereas the rest are dead against it?

Mr. Terry Dicks (Hayes and Harlington)

The rest are incompetent.

Dr. Twinn

I shall not be tempted by the comments of my hon. Friend the Member for Hayes and Harlington (Mr. Dicks), who suggests that my colleagues at county hall are incompetent. I would merely point out that at the general election this was a major issue in London, and it received wide support both in London and the metropolitan counties. My Conservative colleagues on the GLC should consider what the electors have said since they were elected.

We have every reason to believe that the GLC will obstruct Parliament. It is already obstructing the will of Parliament by not responding to requests for information under the paving Act. My own authority in Enfield has requested information on various functions, including waste disposal, which I am sure we shall discuss later. That information has been denied. The London borough of Enfield is unable to discover details of a function which it wishes to take over after abolition.

Far from being sinister, the new clauses are necessary if ratepayers are to be protected. We must act now and make provision to protect the ratepayers of the London area.

The GLC is keen to spend a lot of money. Its rates proposals for this year were very high indeed, and would have been higher had the Labour party not been split. Had Labour's budget proposals gone through, the ratepayers of London would have paid through the nose. As it is, they are already paying substantial sums for the new rate precept.

Mr. Tony Banks

The hon. Gentleman must surely know that the maximum precept which could have been made at county hall was the legal one set by the Secretary of State, and no other.

Dr. Twinn

That is correct, but the hon. Gentleman will appreciate that there was considerable discussion among the Labour group on the GLC about whether it would set a higher precept or none at all. That would have left the authority with no money, and it would have become illegal. Although the hon. Gentleman's point is correct, behind it is hidden a devious approach to rate setting by the GLC.

We had to step in to protect London's ratepayers from paying even more. We must protect their assets. After all, ratepayers' money was responsible for the accumulation of assets in the first place, and it is wrong that these assets should now be transferred to other bodies which are not accountable to the ratepayers. I welcome the new clauses and hope that the whole House will support them.

Mr. Tony Banks

It is quite clear that the GLC still has the power to frighten the Government to death. The Prime Minister sits in her bunker reading copies of the Daily Mail and foaming at the mouth, and the Minister for Local Government reads an article by Ken Livingstone in Labour Herald, rushes to the House and tables a new clause.

New clauses 9 and 10 are retrospective in their intent and draconian in their aims. Why should the GLC co-operate with a measure based on party political spite which has not yet reached the statute book? At no stage has the GLC acted illegally. It has been dragged through the courts more times than I care to recollect. The courts are open to any Conservative Member or ratepayer to challenge any action by the GLC, yet not one Conservative Member can claim that the GLC has acted illegally.

The Minister has introduced a new clause based on a series of articles and political statements by members of the GLC, but not on any declared policy of the GLC. I agree that the metropolitan county councils have been dragged into this because of the paranoia of the Prime Minister and various Conservative Members over the GLC and activities at county hall.

It is amazing that Conservative Members who prate about democracy and freedom can support this sort of retrospective legislation, which is what new clauses 9 and 10 are all about.

We have got used to Ministers coming to the House to legalise their own illegalities. No one at county hall or in the metropolitan councils has broken the law, but with the health authority cuts the Secretary of State for the Environment broke his own law and had to bring in retrospective legislation. The Secretary of State for Transport was caught with his fingers in the till and was found by a high court judge to have acted improperly, so he used this place to legalise his illegality. We do not need lectures from Conservatives about obeying the law when we see so many law breakers looking at us across the Dispatch Box. Ministers have the great advantage that with the elected tyranny that they operate they can push through whatever laws they need to legalise their actions.

Mr. Marlow

Will the hon. Gentleman give way?

Mr. Banks

No, the hon. Gentleman has had a good crack of the whip. I have only a couple of minutes.

Mr. Marlow

I am grateful to the hon. Gentleman for giving way—

Mr. Speaker

Order. I do not think that the hon. Gentleman has given way.

Mr. Marlow

I am pleased to see that the hon. Gentleman has now given way. I ask him to make rather improbable use of his imagination. If he were a Minister in a Labour Government and a Conservative authority had a vast amount of money in a slush fund which it intended to apply for the perpetuation of Conservative interests, what action would he take?

Mr. Banks

I have never regarded the hon. Gentleman as one of the more imaginative Members of the House. The most improbable aspect of his flight of fancy is not the prospect of a Labour Government but the idea of my being a Minister. I find that unimaginable. However, I am sure that if those circumstances arose recourse could be had to the courts. That is precisely my point. If the GLC or any authority is acting illegally, the courts can be used. But the GLC and the metropolitan authorities have never acted illegally, nor could they do so, so the new clause is unnecessary.

I wish to put some specific questions to the Minister. Why is the figure £15,000? Does the Minister think that that will stop the GLC's advertising campaign? If so, I have some bad news for him. It is too late. That has already been assured. All that he will achieve is to overload his already overworked Department. Perhaps he will tell us how many additional civil servants he will need to deal with all these matters.

Mr. Kenneth Baker

rose—

Mr. Banks

I have one more question and then the Minister can come in. Does he know how many transactions the GLC is involved in with contracts of £15,000 or more?

Mr. Baker

The hon. Gentleman said that he had good news for the House—

Mr. Banks

No, it is bad news for the Government.

Mr. Baker

It is bad news for the ratepayers of London. He said that the GLC had already approved its expenditure on propaganda in anticipation of these moves. Will the hon. Gentleman tell us how much expenditure has been approved?

Mr. Banks

Yes. I believe that something over £1 million is to be spent in the next 12 months informing Londoners of the undemocratic nature of the Government's proposals. That is not propaganda. It is information. We cannot get information out of the Government and we certainly shall not get it from the Tory newspapers. It is therefore incumbent on the GLC, which is democratically elected and accountable to the ratepayers of London, to explain to Londoners why local democracy and services are under so much threat from the Government's actions.

I have a couple more questions for the Minister. I hope that he will tell us how many civil servants he will need to take on and how many contracts above £15,000 he thinks that the GLC is involved in. In addition, perhaps he will tell us when and how the GLC was informed about the proposed clause. Was a messenger sent over from the Department of the Environment with a letter stuck in a twig? The clause became operable at midnight on Thursday, but the GLC did not know about it until late on Friday. In an organisation the size of the GLC and ILEA, with an annual turnover of about £3,000 million, it is highly likely that contracts of more than £15,000 were agreed. That is the invidious nature of the new clause.

6.15 pm

The Government's proposals will make it impossible for the GLC to conduct its business properly. The purpose of new clauses 9 and 10 is to get around the amendments passed by the House of Lords. The aim is to get around the existing legislation. Once again, it is clear that the Government have no great respect for the law or for Parliament, which they use and manipulate to serve their own party political interests. That is what it is all about, and that is what new clauses 9 and 10 are all about.

Mr. Maples

The powers sought by the Government are undoubtedly unusual, but we are dealing with very unusual circumstances. The subject of abuse of democracy and democratic rights has been much paraded in the debate, but the GLC itself is responsible for considerable abuses. We have just heard of one from the hon. Member for Newham, North-West (Mr. Banks), who said that a contract had been let to beat the deadline. My hon. Friend the Member for Harrow, East (Mr. Dykes) and others make much of the constitutional aspect, but much depends on people behaving reasonably. The GLC does not behave reasonably—

Mr. Dykes

rose—

Mr. Maples

Perhaps my hon. Friend will allow me to get a little further. Some of my hon. Friends seem not to realise what we are up against. The GLC has no regard for constitutional niceties. There have been appalling misuses of public money. Sometimes I think that those of my hon. Friends who oppose the Government's proposals simply do not appreciate what we are dealing with.

I should like to refer to just a few of the organisations which have received money from the GLC. I do not intend to tell horror stories about gay amusement centres and the like. I am referring to activities with constitutional implications. A great many of the GLC's activities are overtly party political, and public money is overtly used to finance party political activities.

The Local Government Campaign Unit—a euphemism for an organisation whose sole purpose is to put out anti-Government propaganda about local government legislation—has a staff of 10 and is funded partly by the GLC. The GLC has spent £50,000 on that. It is a Labour party political organisation paid for, among others, by the ratepayers of London. Another organisation, Capital, is run by a former Labour Member of Parliament and funded by the GLC. Its sole activity is to tell lies about London Regional Transport. That, too, is an overtly party political activity. Yet another organisation, Traffic, is funded largely by the GLC—to the tune of about £260,000 in the past few months. That organisation is paid to tell lies about the proposals for London's roads. As the south circular runs through my constituency, I have to deal with those lies almost every day.

The hon. Member for Newham, North-West cannot, even in his wildest, most fantastical moments, believe that a £10 million advertising campaign is really informing the ratepayers of London. That is certainly not what the court concluded in the case of ILEA, which involved much the same kind of propaganda. A total of £10 million is a sizeable sum of money. The hon. Member talks about £1 million as though it were small change. That is how the GLC regards London ratepayers' money. That is not respect for constitutional niceties.

I take just one more example. The proposed nuclear power plant at Sizewell has nothing whatever to do with London, but one of the groups opposing it was funded largely by the GLC. Is that a constitutional use of London ratepayers' money?

One of the activities which the GLC got up to in its opposition to the Bill was to encourage its suppliers to write to their Members of Parliament, almost threatening to withdraw their contracts if they did not support the GLC line. [Interruption.] We have seen the letters that went round.

Many of my hon. Friends who oppose the Government do not understand what we are up against. They think that we are dealing with an old style Labour council which respects the same constitutional conventions and niceties as we do. It does not. The ruling group on the GLC is interested, not in the government of London, but in political power. Chaos and propaganda are political tools in their political armoury.

Mr. Dykes

rose—

Mr. Maples

I shall give way in one moment. It is not reasonable to ask my right hon. Friend to fight this battle with one hand tied behind his back.

Mr. Dykes

Conservative Members are specially worried about the wrong use of money by the present leaders of the GLC. Even £1 million is only 0.1 per cent. of its total budget. That is not a reason for the Government recklessly to embark on a proposal to abolish the GLC. It is an argument to take additional powers in local government legislation. We established the GLC 20 years ago to curb those excessive spending activities. Why does my hon. Friend not give a correct and balanced picture?

Mr. Maples

I was not dealing with the general abolition argument. That has been debated at length. The clauses are designed for a specific circumstance — to protect the lengthy series of abuses which have occurred, but perhaps my hon. Friend is not interested in that. He should reflect on the fact that chaos and propaganda are simply political tools in the GLC's armoury. To ask my right hon. Friend and his colleagues to see this element of Government policy through without these clauses is asking them to fight with one hand tied behind their back. It is like going into the boxing ring wearing gloves and saying, "This is a Queensberry rules fight," when the other fellow is wearing knuckledusters and has a couple of thugs round the back of his opponent's corner.

The GLC could strip, and has stripped, assets. It has sold assets at substantial discounts to friendly local borough authorities in London. It would do so on a massive scale, and would almost certainly fund itself in exile. It will almost certainly set up a GLC in exile. If it could, it would finance the future of its propaganda battle and create as much chaos as possible in London. That is its objective in this whole sorry saga. If anything is unconstitutional, that is.

Mr. Simon Hughes (Southwark and Bermondsey)

The hon. Member for Lewisham, West (Mr. Maples) seems to wish to apply one set of rules to local government and another to central Government. They are both, by their nature, about the exercise of power and both can be governed by rules. As interventions during his speech made clear, the place for setting down general rules for local government is not at this stage in the Bill.

The two new clauses are evidence of the Government's muddle. When we began this series of pieces of legislation, with the famous line in the general election manifesto that the authorities would be abolished, we were given a Local Government (Interim Provisions) Bill. There were no clauses like these clauses in that Bill. The Bill went to the other place, returned, and in July last year, at short notice, two clauses like these clauses were inserted into that measure. The Secretary of State was asked to raise the limits for contracts to £1,000,000 or £500,000. The right hon. Gentleman said that the selected figures were not plucked from the air, that the Government fixed those levels as a matter of judgment, and that they wanted them to be sufficiently high to eliminate the need to refer small contracts to the Government, but not so high that many substantial contracts were passed.

At that time the Government could, if they had wished, have dealt with small contracts. They knew with whom they were dealing and what the evidence was, but they did not take any action. They did not do that then, nor when this Bill was introduced. Some clauses in the Bill deal with matters such as those with which we are dealing today. Clause 89 is an obvious example. However, the Government did not choose to intervene. At the last moment, in the last days of a curtailed debate—perhaps the shortest Report stage of any Local Government Bill which has passed through the House this century—the Government tabled two new clauses. They could have foreseen that all the time. They seek to insert these two new clauses now because of their rush and misjudgment in the first place.

My second objection is that through the new clauses the Government seek to control what is handed on to successor authorities. There are two constitutional objections to that. The first is that many of the successor authorities are far less democratic than the authorities which they are intent on curbing — elected councils. Second, and more important, it is a novel proposition of constitutional government that one should be able to intervene in the right of successors to do what they like. Every day Governments provide for things that will affect their successors. The Budget is an example of that. To suggest that one should not be able to plan ahead is ludicrous.

My third objection is that the Government assume that no one has heard of their proposal to abolish the GLC. They are laying down laws that will govern the contracts that are entered into, when anyone in his right mind, negotiating with the GLC, is aware of the legal position and can take advice on how to deal with the situation. If the Government think that their proposals have not been noticed they are deceiving themselves, and it contradicts all that they have said in the past.

My fourth objection is over the delay. Although it may be relatively small, every time a contrdct, proposed sale or liability is entered into, right down to the ludicrously low level of £15,000, it must be vetted by a Government Department. That will produce further delay before action can happen, and a further element of uncertainty. That is not in the interests of efficient government, but is a consequence of the Government trying to intervene more and more.

The fifth, most ludicrous and unacceptable proposition, about which Conservative Back-Bench Members are also unhappy, is that the legislation introduces retrospective law. Although the Bill may not succeed in getting on to the statute book for months to come, irrespective of what may happen in the law-making process—we know what happened last year in the other place—this legislation will apply from the first day of spring this year.

The Government must be worried. I read in today's newspaper that the Prime Minister is contemplating making more peers in a week or two. That happened during the first part of this century. To ensure the passage of legislation, a substantial number of additional peers were created. Hon. Members who have read the article will know that not even a balanced number of peers are to be created. The Government will ensure that their already large majority is increased by a relatively disproportionate number of Conservative peers. Perhaps it is because the Government are even more worried this year that the other place, which does not have guillotines and does not have to do what the Government say, may give them an even harder time than it did 12 months ago.

Mr. Cormack

If the hon. Gentleman considers himself to be the defender of Asquith and Lloyd George, he is on dangerous ground.

Mr. Hughes

I am aware of the historical precedent, but, as the hon. Gentleman would also argue, just because something has been done by somebody in the past, it does not make righteous and holy someone doing the same thing at a later date.

The metropolitan counties have every reason to feel that the Government are being unfair to them. The only examples cited have affected London. That shows the folly of rushing into this sort of legislation, generalising powers, and seeking to say that the same rules should apply to Newcastle upon Tyne as to Lambeth, and to Merseyside as to Southwark. It is a ludicrous way to legislate, and yet another example of how the Government, at the last moment, seek to persuade the House to act.

Many people are unhappy, not only about the constitutional principles, but about the implications of the measure. Can the Minister assure the House that if this proposal and these new clauses are passed, whatever else may happen, no voluntary body or grants to voluntary bodies will be covered by the definitions of contracts or agreements in either of these new clauses? They must be sure that they will not be affected by the provisions.

I hope that the House will reject the new clauses. They are unconstitutional and dishonourable. If they are a problem to the House, they are a problem of the Government's making.

6.30 pm

Mr. Kenneth Baker

I am aware that the House wishes to move quickly to the next new clause, so I shall reply briefly to the debate.

The hon. Member for Southwark and Bermondsey (Mr. Hughes) mentioned voluntary bodies. The fact is that the £15,000 level required for consent under section 137, for which we were chided by the hon. Member for Woolwich (Mr. Cartwright), covers the bulk of grants to voluntary bodies. I was asked about the £15,000 level generally. In view of the record of apparent avoidance of the £100,000 level in the existing legislation, clearly we had to decide upon a significantly lower figure. As £15,000 was the figure mentioned in section 137, we believed it to be appropriate.

However, I emphasise that we shall be issuing general consents to ensure that many normal transactions can go through. It is not our intention to interfere with those normal transactions. We have introduced these measures because we fear abnormal arrangements and contracts. We had good evidence of that when I intervened in the speech of the hon. Member for Newham, North-West (Mr. Banks), who said that the GLC had already taken some action to approve contracts for propaganda worth £1 million. That is probably on the verge of illegality, because the authorities are supposed to come to us with contracts of £100,000. The district auditor may decide to take the GLC to court on that issue.

My hon. Friend the Member for Staffordshire, South (Mr. Cormack) said that he wished to protect the constitution. He is not alone in that regard on the Government side. I hope that we all wish to protect the constitution. Let me give him some examples of the ways in which we have tried to protect the constitutions of some successor authorities. My hon. Friend rightly recognised the activities of the militant Left, and he would no more support them than would any Conservative Member, but it is a little naive for him to wring his hands after the event and say, "I deplore the activities of the militant Left in spending money in this way," when by sensible and rational anticipatory action some of those consequences can be avoided. When I was asked for examples, I gave the example from West Yorkshire of action taken last Thursday afternoon. Incidentally, the director general of the GLC had a letter delivered to him by hand on Thursday afternoon, as did the chief executives of the county councils—

Mr. Tony Banks

I have a copy of a letter which the director general sent to The Times, which makes it clear that he was not advised until 9.20 am on Friday.

Mr. Baker

That may be due to the internal arrangements of the GLC. I assure the hon. Gentleman that letters were taken by hand not only to the director general's office but to the offices of the chief executives of all the metropolitan county councils on Thursday afternoon.

The successor authorities of Greater Manchester—at least the Conservative boroughs—have made it clear to the Government that they are alarmed about the plans of Greater Manchester county council, first, to exhaust reserves; secondly, to make contracts for pet development projects which the districts will be obliged to fulfil after abolition; and, thirdly, to agree major contracts in the weeks before abolition. The successor authorities ask me, "What will you do about our constitutional position?" They say, "The county councils should consult us, because after 1 April 1986 we shall have to pay the bills." I must protect their constitutional position. There are two sides to the matter

Mr. Cormack

I accept that completely, as my right hon. Friend will know, but he also knows that, like the Irishman, I would not have started from this point. I would have left this matter to the ballot box and the will of the electorate. Far from being a folk hero, Mr. Livingstone would have been seen into oblivion by the electorate if we had attacked him on these matters as we should have done.

Mr. Baker

That may or may not be the case. I appreciate my hon. Friend's position on the abolition legislation, but I must act to protect the interests of the successor authorities and their ratepayers. Enormous obligations could have been undertaken by the GLC and the metropolitan counties between now and abolition, which would have imposed enormous financial burdens on the metropolitan districts and the London boroughs. If I did nothing about that, I should be failing in my duty.

As my hon. Friend the Member for Lewisham, West (Mr. Maples) said, in this battle it is no good fighting with one hand tied behind one's back. But that would be the result if we did not take these measures. There is clear evidence from statements by Mr. Livingstone and other members of the GLC that they wish to create an opportunity for life after death, a GLC in exile, or, as my hon. Friend the Member for Edmonton (Dr. Twinn) said, empires preserved after abolition. That is clearly not the intention of the House, which gave a Second Reading to the Bill. It would subvert the will of Parliament and might impose enormous financial obligations on successor authorities.

Mr. Vivian Bendall (Ilford, North)

Can my right hon. Friend confirm that the cases that he has mentioned of asset stripping and agreeing large contracts will not be challengeable in the courts by the successor authorities?

Mr. Baker

Almost all actions of the Secretary of State or of local authorities are subject to judicial review in one way or another, but in many cases it would be difficult to prove that the contract should not have been made.

The tradition of local government is one of consent and reasonableness, which many militant councils are not prepared to accept. Local government is changing, as I have said repeatedly. I introduce these measures with much regret, but I believe that they will protect the interests of the ratepayers in the metropolitan areas and in Greater London, and the financial interests of the successor councils. I hope that the clauses will be added to the Bill.

Question put, That the clause be read a Second time:—

The House divided: Ayes 324, Noes 189.

Division No. 167]	[6.38 pm
AYES
Alison, Rt Hon Michael	Colvin, Michael
Amery, Rt Hon Julian	Coombs, Simon
Amess, David	Cope, John
Ancram, Michael	Couchman, James
Arnold, Tom	Cranborne, Viscount
Ashby, David	Crouch, David
Aspinwall, Jack	Currie, Mrs Edwina
Atkins, Robert (South Ribble)	Dickens, Geoffrey
Atkinson, David (B'm'th E)	Dicks, Terry
Baker, Rt Hon K. (Mole Vall'y)	Dorrell, Stephen
Baker, Nicholas (N Dorset)	Douglas-Hamilton, Lord J.
Baldry, Tony	Dover, Den
Banks, Robert (Harrogate)	du Cann, Rt Hon Sir Edward
Batiste, Spencer	Dunn, Robert
Beaumont-Dark, Anthony	Durant, Tony
Beggs, Roy	Edwards, Rt Hon N. (P'broke)
Bellingham, Henry	Eggar, Tim
Bendall, Vivian	Emery, Sir Peter
Benyon, William	Evennett, David
Best, Keith	Eyre, Sir Reginald
Bevan, David Gilroy	Fairbairn, Nicholas
Biffen, Rt Hon John	Fallon, Michael
Biggs-Davison, Sir John	Farr, Sir John
Blackburn, John	Favell, Anthony
Blaker, Rt Hon Sir Peter	Finsberg, Sir Geoffrey
Body, Richard	Fletcher, Alexander
Bonsor, Sir Nicholas	Fookes, Miss Janet
Bottomley, Peter	Forman, Nigel
Bottomley, Mrs Virginia	Forsyth, Michael (Stirling)
Bowden, A. (Brighton K'to'n)	Forsythe, Clifford (S Antrim)
Bowden, Gerald (Dulwich)	Forth, Eric
Boyson, Dr Rhodes	Fowler, Rt Hon Norman
Brandon-Bravo, Martin	Fox, Marcus
Bright, Graham	Franks, Cecil
Brinton, Tim	Fraser, Peter (Angus East)
Brooke, Hon Peter	Freeman, Roger
Brown, M. (Brigg & Cl'thpes)	Fry, Peter
Browne, John	Gale, Roger
Bruinvels, Peter	Galley, Roy
Bryan, Sir Paul	Gardiner, George (Reigate)
Buchanan-Smith, Rt Hon A.	Gardner, Sir Edward (Fylde)
Buck, Sir Antony	Garel-Jones, Tristan
Budgen, Nick	Glyn, Dr Alan
Burt, Alistair	Goodhart, Sir Philip
Butler, Hon Adam	Gow, Ian
Butterfill, John	Gower, Sir Raymond
Carlisle, John (N Luton)	Grant, Sir Anthony
Carttiss, Michael	Greenway, Harry
Cash, William	Griffiths, E. (By St Edm'ds)
Chalker, Mrs Lynda	Griffiths, Peter (Portsm'th N)
Channon, Rt Hon Paul	Grist, Ian
Chapman, Sydney	Ground, Patrick
Chope, Christopher	Grylls, Michael
Clark, Hon A. (Plym'th S'n)	Gummer, John Selwyn
Clark, Dr Michael (Rochford)	Hamilton, Hon A. (Epsom)
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

Hargreaves, Kenneth	Merchant, Piers
Harris, David	Miller, Hal (B'grove)
Harvey, Robert	Mills, Iain (Meriden)
Havers, Rt Hon Sir Michael	Mills, Sir Peter (West Devon)
Hawkins, C. (High Peak)	Mitchell, David (NW Hants)
Hawkins, Sir Paul (SW N'folk)	Molyneaux, Rt Hon James
Hawksley, Warren	Monro, Sir Hector
Hayes, J.	Montgomery, Sir Fergus
Hayhoe. Barney	Moore, John
Hayward, Robert	Morris, M. (N'hampton, S)
Heath, Rt Hon Edward	Morrison, Hon P. (Chester)
Heathcoat-Amory, David	Moynihan, Hon C.
Heddle, John	Murphy, Christopher
Henderson, Barry	Neale, Gerrard
Heseltine, Rt Hon Michael	Needham, Richard
Hickmel, Richard	Nelson, Anthony
Higgins. Rt Hon Terence L.	Neubert, Michael
Hill, James	Newton, Tony
Hirst, Michael	Nicholls, Patrick
Hogg, Hon Douglas (Gr'th'm)	Nicholson, J.
Holland. Sir Philip (Gedling)	Norris, Steven
Holt, Richard	Onslow, Cranley
Hordern, Peter	Oppenheim, Phillip
Howard, Michael	Osborn, Sir John
Howarth, Alan (Stratf'd-on-A)	Ottaway, Richard
Howarth, Gerald (Cannock)	Page, Richard (Herts SW)
Howell, Rt Hon D. (G'ldford)	Parris, Matthew
Howell, Ralph (N Norfolk)	Patten, Christopher (Bath)
Hubbard-Miles, Peter	Patten, J. (Oxf W & Abdgn)
Hunt, John (Ravensbourne)	Pattie, Geoffrey
Hunter, Andrew	Pawsey, James
Jackson, Robert	Peacock, Mrs Elizabeth
Jenkin, Rt Hon Patrick	Pollock, Alexander
Jessel, Toby	Portillo, Michael
Johnson Smith, Sir Geoffrey	Powell, William (Corby)
Jones, Gwilym (Cardiff N)	Powley, John
Jones, Robert (W Herts)	Proctor, K. Harvey
Jopling, Rt Hon Michael	Raffan, Keith
Joseph, Rt Hon Sir Keith	Raison, Rt Hon Timothy
Kellett-Bowman, Mrs Elaine	Rathbone, Tim
Kershaw, Sir Anthony	Rees, Rt Hon Peter (Dover)
Key, Robert	Renton, Tim
King, Roger (B'ham N'field)	Rhodes James, Robert
Knight, Gregory (Derby N)	Ridley, Rt Hon Nicholas
Knight, Mrs Jill (Edgbaston)	Rifkind, Malcolm
Knowles, Michael	Roberts, Wyn (Convey)
Lamont, Norman	Robinson, Mark (N'port W)
Lang, Ian	Roe, Mrs Marion
Latham, Michael	Rossi, Sir Hugh
Lawler, Geoffrey	Rost, Peter
Lawrence, Ivan	Rowe, Andrew
Lawson, Rt Hon Nigel	Rumbold, Mrs Angela
Lee, John (Pendle)	Ryder, Richard
Lennox-Boyd, Hon Mark	Sackville, Hon Thomas
Lilley, Peter	Sainsbury, Hon Timothy
Lloyd, Ian (Havant)	St. John-Stevas, Rt Hon N.
Lloyd, Peter, (Fareham)	Sayeed, Jonathan
Lord, Michael	Shaw, Giles (Pudsey)
Luce, Richard	Shelton, William (Streatham)
McCrindle, Robert	Shepherd, Colin (Hereford)
McCurley, Mrs Anna	Shersby, Michael
McCusker, Harold	Silvester, Fred
Macfarlane, Neil	Sims, Roger
MacGregor, John	Skeet, T. H. H.
MacKay, Andrew (Berkshire)	Smith, Sir Dudley (Warwick)
MacKay, John (Argyll & Bute)	Smith, Tim (Beaconsfield)
Maclean, David John	Smyth, Rev W. M. (Belfast S)
McQuarrie, Albert	Soames, Hon Nicholas
Madel, David	Speller, Tony
Major, John	Spence, John
Malins, Humfrey	Spencer, Derek
Malone, Gerald	Spicer, Jim (W Dorset)
Maples, John	Spicer, Michael (S Worcs)
Marland, Paul	Squire, Robin
Marlow, Antony	Stanbrook, Ivor
Maude, Hon Francis	Steen, Anthony
Mawhinney, Dr Brian	Stern, Michael
Maxwell-Hyslop, Robin	Stevens, Lewis (Nuneaton)
Mayhew, Sir Patrick	Stevens, Martin (Fulham)
Mellor, David	Stewart, Allan (Eastwood)

Stewart, Andrew (Sherwood)	Waldegrave, Hon William
Stewart, Ian (N Hertf'dshire)	Walden, George
Stokes, John	Walker, Cecil (Belfast N)
Stradling Thomas, J.	Walker, Bill (T'side N)
Sumberg, David	Waller, Gary
Taylor, Rt Hon John David	Ward, John
Taylor, Teddy (S'end E)	Wardle, C. (Bexhill)
Tebbit, Rt Hon Norman	Warren, Kenneth
Temple-Morris, Peter	Watson, John
Terlezki, Stefan	Watts, John
Thomas, Rt Hon Peter	Wells, Sir John (Maidstone)
Thompson, Donald (Calder V)	Wheeler, John
Thompson, Patrick (N'ich N)	Whitney, Raymond
Thornton, Malcolm	Wilkinson, John
Thurnham, Peter	Winterton, Mrs Ann
Townend, John (Bridlington)	Winterton, Nicholas
Tracey, Richard	WoIfson, Mark
Trippier, David	Wood, Timothy
Trotter, Neville	Yeo, Tim
Twinn, Dr Ian	Young, Sir George (Acton)
van Straubenzee, Sir W.	Younger, Rt Hon George
Vaughan, Sir Gerard
Viggers, Peter	Tellers for the Ayes:
Waddington, David	Mr. Carol Mather and
Wakeham, Rt Hon John	Mr. Robert Boscawen.
NOES
Abse, Leo	Davis, Terry (B'ham, H'ge H'l)
Alton, David	Deakins, Eric
Anderson, Donald	Dewar, Donald
Archer, Rt Hon Peter	Dixon, Donald
Ashdown, Paddy	Dobson, Frank
Ashley, Rt Hon Jack	Dormand, Jack
Ashton, Joe	Dubs, Alfred
Atkinson, N. (Tottenham)	Duffy, A. E. P.
Bagier, Gordon A. T.	Dunwoody, Hon Mrs G.
Banks, Tony (Newham NW)	Dykes, Hugh
Barnett, Guy	Eastham, Ken
Barron, Kevin	Edwards, Bob (W'h'mpt'n SE)
Beckett, Mrs Margaret	Ellis, Raymond
Beith, A. J.	Evans, John (St. Helens N)
Bell, Stuart	Ewing, Harry
Benn, Tony	Fatchett, Derek
Bennett, A. (Dent'n & Red'sh)	Field, Frank (Birkenhead)
Bermingham, Gerald	Fields, T. (L'pool Broad Gn)
Bidwell, Sydney	Fisher, Mark
Blair, Anthony	Flannery, Martin
Boothroyd, Miss Betty	Foot, Rt Hon Michael
Bray, Dr Jeremy	Forrester, John
Brown, Gordon (D'f'mline E)	Foster, Derek
Brown, Hugh D. (Proven)	Fraser, J. (Norwood)
Brown, N. (N'c'tle-u-Tyne E)	Freeson, Rt Hon Reginald
Brown, Ron (E'burgh, Leith)	Freud, Clement
Bruce, Malcolm	Garrett, W. E.
Buchan, Norman	Godman, Dr Norman
Caborn, Richard	Golding, John
Callaghan, Rt Hon J.	Gould, Bryan
Callaghan, Jim (Heyw'd & M)	Gourlay, Harry
Campbell, Ian	Hamilton, James (M'well N)
Campbell-Savours, Dale	Hamilton, W. W. (Central Fife)
Carlile, Alexander (Montg'y)	Harrison, Rt Hon Walter
Carter-Jones, Lewis	Hattersley, Rt Hon Roy
Cartwright, John	Haynes, Frank
Clay, Robert	Heffer, Eric S.
Clwyd, Mrs Ann	Hogg, N. (C'nauld & Kilsyth)
Cocks, Rt Hon M. (Bristol S.)	Holland, Stuart (Vauxhall)
Cohen, Harry	Home Robertson, John
Coleman, Donald	Howell, Rt Hon D. (S'heath)
Concannon, Rt Hon J. D.	Hoyle, Douglas
Conlan, Bernard	Hughes, Dr. Mark (Durham)
Cook, Frank (Stockton North)	Hughes, Robert (Aberdeen N)
Cook, Robin F. (Livingston)	Hughes, Roy (Newport East)
Cormack, Patrick	Hughes, Sean (Knowsley S)
Cowans, Harry	Hughes, Simon (Southwark)
Craigen, J. M.	Hume, John
Crowther, Stan	Janner, Hon Greville
Cunliffe, Lawrence	Jenkins, Rt Hon Roy (Hillh'd)
Cunningham, Dr John	John, Brynmor
Davies, Rt Hon Denzil (L'lli)	Jones, Barry (Alyn & Deeside)
Davies, Ronald (Caerphilly)	Kaufman, Rt Hon Gerald

Kennedy, Charles	Redmond, M.
Kilroy-Silk, Robert	Rees, Rt Hon M. (Leeds S)
Kinnock, Rt Hon Neil	Richardson, Ms Jo
Kirkwood, Archy	Roberts, Allan (Bootle)
Lamond, James	Roberts, Ernest (Hackney N)
Leighton, Ronald	Robertson, George
Lewis, Ron (Carlisle)	Robinson, G. (Coventry NW)
Lewis, Terence (Worsley)	Rooker, J. W.
Litherland, Robert	Ross, Stephen (Isle of Wight)
Lloyd, Tony (Stretford)	Rowlands, Ted
Loyden, Edward	Ryman, John
McDonald, Dr Oonagh	Sheerman, Barry
McKelvey, William	Sheldon, Rt Hon R.
Mackenzie, Rt Hon Gregor	Shore, Rt Hon Peter
McNamara, Kevin	Short, Ms Clare (Ladywood)
McTaggart, Robert	Skinner, Dennis
McWilliam, John	Smith, C.(Isl'ton S & F'bury)
Madden, Max	Smith, Rt Hon J. (M'kl'ds E)
Marek, Dr John	Snape, Peter
Marlow, Antony	Soley, Clive
Marshall, David (Shettleston)	Spearing, Nigel
Martin, Michael	Steel, Rt Hon David
Mason, Rt Hon Roy	Stott, Roger
Maxton, John	Straw, Jack
Maynard, Miss Joan	Thomas, Dr R. (Carmarthen)
Meacher, Michael	Thompson, J. (Wansbeck)
Meadowcroft, Michael	Thorne, Stan (Preston)
Michie, William	Tinn, James
Mikardo, Ian	Torney, Tom
Mitchell, Austin (G't Grimsby)	Wainwright, R.
Morris, Rt Hon A. (W'shawe)	Wallace, James
Morris, Rt Hon J. (Aberavon)	Wardell, Gareth (Gower)
Nellist, David	Wareing, Robert
Oakes, Rt Hon Gordon	Weetch, Ken
O'Brien, William	White, James
O'Neill, Martin	Williams, Rt Hon A.
Orme, Rt Hon Stanley	Winnick, David
Owen, Rt Hon Dr David	Woodall, Alec
Park, George	Wrigglesworth, Ian
Pendry, Tom	Young, David (Bolton SE)
Penhaligon, David
Powell, Raymond (Ogmore)	Tellers for the Noes:
Prescott, John	Mr. Allen McKay and
Radice, Giles	Mr. Robin Corbett.

Question accordingly agreed to.

Clause read a Second time, and added to the Bill.