§ Dr. BoysonI beg to move amendment No. 58, in page 3, line 19, leave out from 'year' to end of line 20 and insert—
- '(a) reduced by the aggregate of the credit items of account for the year, and
- (b) adjusted by making such additions or subtractions (or both) as are specified in respect of the year concerned by the Secretary of State.'.
§ The Second Deputy Chairman of Ways and Means (Sir Paul Dean)With this amendment it will be convenient to discuss Government amendments Nos. 59 to 63, 65 to 67, 74, 89, 150 and 152.
§ Dr. BoysonThese are amendments to the power of my right hon. Friend to make specifications in relation to relevant expenditure. They bring this power into line with the power to make specifications on total expenditure in clause 3(7).
It may assist the Committee if I indicate how we intend to use this power of specification. First, my right hon. Friend intends to make specifications so that relevant expenditure in future will be in essence the same as it has been taken to be in the past. That is, relevant expenditure will be broadly the net expenditure of an authority, excluding certain items such as mandatory student grants which are financed by specific and supplementary grants, rate support grants, rate or precept income, and balances.
Secondly, we intend that specifications should provide that, when an item of account has been entered in the rate fund revenue account contrary to proper practice applicable to that account, it is excluded from relevant expenditure. The amendments are necessary to deal with that latter point.
These matters have not arisen with the existing statutory specification in the 1980 Act because the statute does not refer to accounts or accounting practices although, in practice, we have operated as if it did.
Under our current approach, if we considered that total expenditure, and hence relevant expenditure, which 972 authorities submitted to us improperly omitted an item of account, or improperly contained such an item, we would adjust the submitted figures after giving the authority an opportunity to comment on what we propose.
Thirdly, we intend to make specifications so that, if an authority includes in its rate fund revenue account transactions that involve putting more money into special funds, and if there is no specific liability against which the money is being provided—what we colloquially call deficit financing of special funds—the transactions will be excluded from relevant expenditure and hence total expenditure.
If we had not been advised that our general approach to total and relevant expenditure was incorrect in law, we would have sought to exclude such transactions from any figures of expenditure submitted by authorities, following our normal practice of dealing with figures which appear to my right hon. Friend to be improperly compiled.
Under the powers that we are now taking, we intend to deal with all such situations by means of specification. I should add that, before making specifications, my right hon. Friend will consider carefully all of the representations that he receives and consult when he is required to do so. To make specifications here, his powers will have to be exercised in accordance with principles that must be applied to all local authorities.
Any decision to make a specification must be exercised in accordance with general and administrative law principles, so the Secretary of State cannot make unreasonable decisions. His decisions will be answerable to the courts.
§ Mr. John FraserThe central objection to clause 3 is not that Parliament is seeking the power to regulate what should or should not go in or out of a local authority's account, as we have to concede that Parliament takes powers from time to time to regulate the contents of accounts. I have referred frequently to the Companies Acts. There is no disagreement in that regard. Our objection is that the power to determine what should be omitted from or included in a local authority's revenue account is to be specified by the Secretary of State. The Minister made no secret of that. However, he said two things which I welcome.
First, the Minister said that, when making specifications, he would consider representations made by the relevant authority. I take it that he will give us an assurance that, when he makes any general specification about what should be included in or omitted from a local authority's account, he will consider the representations of local authorities generally, as expressed by local authority associations. It would be helpful if the Minister was able to give an assurance that general representations will be received in addition to the representations that I believe he referred to.
The second assurance that the Minister has given is that the principles on which the specifications are applied will be general, and will not differentiate between local authorities. We understand that future decisions will be challengeable in the courts. I am sure that if the Minister chose to discriminate between one authority and another, the courts would not be slow to intervene under the principles of administrative law. It will be helpful—perhaps the Minister will reply constructively—if the Minister will accept an amendment on Report that would incorporate the obligation to consult to which the Minister 973 adverted. If he is willing to do that, it will go at least some way towards assuring local authorities that they will be consulted about these matters and will not be dealt with differentially.
§ Mr. DobsonI should be grateful if the Minister will answer some questions arising from the probing Opposition amendments. I should like clarification from the Minister, particularly in view of his earlier interest in education, of the status of payments made and income received by education authorities when they provide education for pupils from other areas. Will the Minister give us some information about the income that the Inner London education authority receives from, say, the London borough of Barnet, which is represented by the Prime Minister? In 1986, the parents of 780 children so recognised the superiority of the education provided by the Inner London education authority that they sent their children from Barnet to Inner London education authority schools. Even allowing for those who go the other way, there is a net inflow of 332 children from Barnet schools into ILEA schools. Is that income reckonable and does it fall within clause 3 as a credit item?
If the Minister thinks that I singled out the borough that the Prime Minister claims to represent, where parents overwhelmingly voted with their children's feet to get a better education from the Inner London education authority, he might prefer to look at the example of the London borough of Brent, part of which he claims to represent. Before any of the Minister's more ignorant hon. Friends suggest that the London borough of Brent was Labour-controlled, I remind the Minister that, in 1985, when the London borough of Brent was Tory-controlled, no fewer than 1,924 children from the London borough of Brent were sent by their parents to Inner London education authority schools because they recognised the superiority of the service that the Inner London education authority was able to offer at that time.
I shall be grateful if the Minister will tell us exactly what will happen to the income that will accrue to the Inner London education authority in those circumstances. I hope that he will persuade one or two of his colleagues, should any actually turn up for the debate, to recognise that parents, particularly those in the outer London boroughs and the overwhelming majority living on the borders, recognise the superiority of the service provided by the Inner London education authority, despite the adverse publicity that he, his hon. Friend, the London Evening Standard and other obnoxious journals constantly pump forth.
§ Mr. HancockI should like the Minister to clarify the point raised by the hon. Member for Holborn and St. Pancras (Mr. Dobson) on Government amendment No. 58. This set of Government amendments gives the Secretary of State enormous powers. I believe that local government is worried about the proposed change. The Bill as it stands allows the Secretary of State to exempt items from the expenditure of a local authority, if he wishes. These provisions allow him to add items, if he wishes.
Many local authorities, for various reasons, run reserve funds which come within the categories covered by schedule 1. It could be a vehicle reserve fund, in which the local authority saves money to buy new vehicles, or a 974 general reserve fund. My local authority of Portsmouth has a reserve fund. It would be worried if a Secretary of State had the discretion in one year to add its reserve fund to or exempt it from the general way in which its expenditure is reckoned for rate support grant in a subsequent year.
Will local authorities be treated differently? Many hon. Members and I fully accept the Government's fear of the creative accounting that has taken place. Many people believe that this will lead to problems when local authorities are finally brought to book and made to account in real terms. Many local authorities are afraid that items over which they have little control will be added to or exempted from their accounts. They may have great difficulty, therefore, in operating their budget for the coming year. Will the Secretary of State have the discretion to pick on a particular local authority and put it in this category?
I should be afraid if the Committee supported the Government's amendments. Many questions arise as to what can and what cannot be covered. I am concerned about the discretionary power being wheeled in, somewhat like a guillotine, whenever it suits the political climate. If I read the legislation correctly, it could lead to the Secretary of State inflicting a mini-budget on a local authority half-way through the year and suddenly adding an item that had not previously been included. That must send shivers down the spines of many local treasurers, if not local councillors. The legislation gives enormous powers to the Secretary of State and we are entitled to a full explanation of how it will operate and exactly what it will cover.
§ Dr. BoysonI shall try to deal as adequately as I can with the important questions that have been raised on this technical matter. If I cannot deal with all the questions, I shall write to the hon. Members concerned.
On the point raised by the hon. Member for Norwood (Mr. Fraser), I give the commitment that the local authority associations will be seen. Further, I can say that decisions will be challengeable in the courts. I therefore give affirmative answers on those two points.
If I could have the attention of the hon. Member for Holborn and St. Pancras (Mr. Dobson), I shall answer his points.
§ Mr. DobsonI hang on the hon. Gentleman's every word.
§ Dr. BoysonI am grateful to the hon. Gentleman. I trust that he is still doing so when I have finished speaking about the matter which he raised.
There is much movement of children between one authority area and another in London. I do not want to make a party point, but I must say that the movement of children out of Brent has increased greatly. For two and a half years the Conservative party had control over Brent with the Liberal party. But the movement out of Brent had occurred before then. Next week, I shall find out the movement from ILEA to Brent and Barnet. I trust I hat I shall be able to get the figures to send them to the hon. Member for Holborn and St. Pancras. I know that he is a seeker after truth.
§ Mr. DobsonOn the assumption that the hon. Doctor is a seeker after the truth, why did only 1,783 come into 975 ILEA schools in 1982 and why did the number increase to 1,924 after the Conservatives and the alliance had been in charge in Brent for two years?
§ Dr. BoysonAs I said to the hon. Gentleman, I shall look at the figures. I have not the slightest doubt that those figures are correct. However, I shall consider them.
The hon. Gentleman must remember that ILEA schools were built up to a high standard. I served as a headmaster in ILEA schools for 14 years. Therefore, I can see both sides of the issue. However, the hon. Gentleman would probably not have appointed me had I applied when he was the chairman of the governors. My school was the most over-subscribed in London, and still has the longest waiting list in London. Therefore, I am aware of the movement between schools.
I do not doubt the hon. Gentleman's word when he speaks about education, but I shall consider the figures and pass them on to him because I know that he would like to have them, and so would I.
This year, 25.6 per cent. of children in Brent are going to independent schools or to county schools elsewhere in London. That is a very large figure and it is four times the average for London.
The hon. Gentleman asked me about the status of the recoupment passing from one authority to another. I must advise the hon. Member that in 1980 I took a Bill through its Committee stage which gave parents more choice of schools and gave them the right to cross boundaries. Therefore, the hon. Gentleman should worship at my shrine. The ingratitude of the hon. Gentleman is like a charcoal biscuit—it is very difficult to absorb. I do not expect the hon. Gentleman to join my party immediately although, obviously, he should be influenced by that fact.
The expenditure on recoupment payments between Brent and ILEA, or between ILEA and any of the London education authorities, would come from the rates fund revenue account for Brent and it would be income for ILEA. That is the way in which the payments would move between the two bodies. The expenditure would come out of the rate fund revenue account for Brent and would be counted as income for ILEA. As I have said, there is much movement in London between one authority and another.
A moment ago I knew the answer to question raised by the hon. Member for Portsmouth, South (Mr. Hancock), but it has just slipped my memory for the moment. I shall include it in one of my later answers to the hon. Gentleman.
§ Mr. HancockThe question referred to the reserve funds operated by many local authorities, and whether those funds could and would be brought in and out at the Minister's discretion, and how those reserve funds would be allowed to operate in those local authorities in years to come and whether that discretion would be reflected across the board or whether individual local authorities would be picked out.
§ Dr. BoysonI presume that that would apply to all authorities and it would actually count as a special fund. Obviously, we have had to legislate identically for all authorities. The legislation is difficult enough now without discriminating between one local authority and another.
§ Mr. HancockThe way in which the provision is worded at present, especially with amendment No. 74, 976 gives, if I am reading it correctly, the Minister of State the ability, if he so desires, to say, for example, to Portsmouth city council, "You must include, in this year's reckonable expenditure any reserve fund that you are holding." However, at the same time, if I am reading the legislation and the amendment correctly, he could not, if he so chose, push that same commitment on other local authorities. We must watch that ability to choose and we should also consider whether it covers, for example, the reserve funds that many local authorities operate.
§ Dr. BoysonThe reserve funds will count as special funds. I shall check and write to the hon. Member so that I can give him a full reply on the question whether they are universal. That is a serious question that affects all authorities throughout the country.
§ Mr. John FraserThe Minister gave an assurance that there would be general consultation with authorities, as well as with individual authorities, and I am grateful for that. However, it is by no means unusual to have an obligation for the Government to consult included in the statute.
Apart from our fundamental objections to the Bill, my hon. Friends and I believe that the power to specify is one over which Parliament should have some control and that therefore it is a matter that, at least, should be dealt with by statutory instrument so that when the Minister comes forward with a set of specifications he will have to seek the consent of the House of Commons and the other place. We shall table an amendment that will deal with that. At the very least, will the Minister accept on Report an amendment to place a statutory obligation on the Government at least to consult before making a specification? May we have an assurance that such an amendment, if tabled, would be accepted?
§ Dr. BoysonAs I said to the hon. Gentleman earlier, the Secretary of State will consult local associations and the specification is answerable to the courts. I cannot give a commitment to the hon. Gentleman that we will accept any amendment. We shall look at all the amendments on Report, as we are doing now. I can say no more than that at this stage.
§ Mr. FraserWe were invited to divide on every amendment when the Minister spoke earlier. We will not divide on every amendment and I do not propose to advise the Committee to divide on this. However, that does not mean that we are simply allowing this matter to pass. We want to make some progress. I hope that, with your permission, Sir Paul, we will have a debate on clause stand part and we shall express our dissatisfaction in the appropriate way when we reach that point.
§ Question put, That the amendment be made:—
§ The Committee divided: Ayes 234, Noes 171.
979| Division No. 66] | [9.30 pm |
| AYES | |
| Aitken, Jonathan | Batiste, Spencer |
| Alexander, Richard | Bellingham, Henry |
| Alison, Rt Hon Michael | Bendall, Vivian |
| Amess, David | Benyon, William |
| Ancram, Michael | Best, Keith |
| Ashby, David | Bevan, David Gilroy |
| Aspinwall, Jack | Blackburn, John |
| Atkins, Robert (South Ribble) | Body, Sir Richard |
| Atkinson, David (B'm'th E) | Bonsor, Sir Nicholas |
| Baker, Rt Hon K. (Mole Vall'y) | Boscawen, Hon Robert |
| Baker, Nicholas (Dorset N) | Bottomley, Peter |
| Banks, Robert (Harrogate) | Bottomley, Mrs Virginia |
| Bowden, Gerald (Dulwich) | Harris, David |
| Boyson, Dr Rhodes | Harvey, Robert |
| Brandon-Bravo, Martin | Haselhurst, Alan |
| Bright, Graham | Hawkins, C. (High Peak) |
| Brinton, Tim | Hawkins, Sir Paul (N'folk SW) |
| Brittan, Rt Hon Leon | Hawksley, Warren |
| Brooke, Hon Peter | Hayes, J. |
| Brown, M. (Brigg & Cl'thpes) | Hayhoe, Rt Hon Sir Barney |
| Browne, John | Hayward, Robert |
| Bruinvels, Peter | Heathcoat-Amory, David |
| Bryan, Sir Paul | Heddle, John |
| Buchanan-Smith, Rt Hon A. | Henderson, Barry |
| Buck, Sir Antony | Hickmet, Richard |
| Budgen, Nick | Hind, Kenneth |
| Bulmer, Esmond | Hirst, Michael |
| Burt, Alistair | Hogg, Hon Douglas (Gr'th'm) |
| Butcher, John | Holland, Sir Philip (Gedling) |
| Butterfill, John | Holt, Richard |
| Carlisle, John (Luton N) | Hordern, Sir Peter |
| Carlisle, Kenneth (Lincoln) | Howard, Michael |
| Cash, William | Howarth, Alan (Stratf'd-on-A) |
| Chapman, Sydney | Howarth, Gerald (Cannock) |
| Chope, Christopher | Howell, Ralph (Norfolk, N) |
| Churchill, W. S. | Hubbard-Miles, Peter |
| Clark, Dr Michael (Rochford) | Hunt, David (Wirral W) |
| Clark, Sir W (Croydon S) | Hunt, John (Ravensbourne) |
| Clarke, Rt Hon K. (Rushcliffe) | Hunter, Andrew |
| Colvin, Michael | Irving, Charles |
| Conway, Derek | Jackson, Robert |
| Cope, John | Johnson Smith, Sir Geoffrey |
| Corrie, John | Jones, Gwilym (Cardiff N) |
| Couchman, James | Jones, Robert (Herts W) |
| Crouch, David | Jopling, Rt Hon Michael |
| Currie, Mrs Edwina | Joseph, Rt Hon Sir Keith |
| Dicks, Terry | King, Roger (B'ham N'field) |
| Dorrell, Stephen | Knight, Greg (Derby N) |
| Douglas-Hamilton, Lord J. | Knight, Dame Jill (Edgbaston) |
| Dover, Den | Latham, Michael |
| Dunn, Robert | Lennox-Boyd, Hon Mark |
| Durant, Tony | Lester, Jim |
| Edwards, Rt Hon N. (P'broke) | Lightbown, David |
| Eggar, Tim | Lilley, Peter |
| Evennett, David | Lloyd, Sir Ian (Havant) |
| Eyre, Sir Reginald | Lloyd, Peter (Fareham) |
| Fairbairn, Nicholas | Lord, Michael |
| Fallon, Michael | MacKay, John (Argyll & Bute) |
| Farr, Sir John | Maclean, David John |
| Favell, Anthony | McQuarrie, Albert |
| Fenner, Dame Peggy | Major, John |
| Fletcher, Sir Alexander | Mather, Sir Carol |
| Fookes, Miss Janet | Maude, Hon Francis |
| Forman, Nigel | Mawhinney, Dr Brian |
| Forsyth, Michael (Stirling) | Monro, Sir Hector |
| Forth, Eric | Moore, Rt Hon John |
| Franks, Cecil | Morris, M. (N'hampton S) |
| Fraser, Peter (Angus East) | Moynihan, Hon C. |
| Freeman, Roger | Neubert, Michael |
| Gale, Roger | Newton, Tony |
| Galley, Roy | Nicholls, Patrick |
| Gardiner, George (Reigate) | Norris, Steven |
| Gardner, Sir Edward (Fylde) | Peacock, Mrs Elizabeth |
| Garel-Jones, Tristan | Pollock, Alexander |
| Glyn, Dr Alan | Powley, John |
| Goodhart, Sir Philip | Raison, Rt Hon Timothy |
| Goodlad, Alastair | Rathbone, Tim |
| Gower, Sir Raymond | Rhys Williams, Sir Brandon |
| Grant, Sir Anthony | Ridley, Rt Hon Nicholas |
| Greenway, Harry | Rifkind, Rt Hon Malcolm |
| Gregory, Conal | Rippon, Rt Hon Geoffrey |
| Griffiths, Sir Eldon | Roberts, Wyn (Conwy) |
| Griffiths, Peter (Portsm'th N) | Roe, Mrs Marion |
| Grist, Ian | Rossi, Sir Hugh |
| Ground, Patrick | Rost, Peter |
| Grylls, Michael | Rowe, Andrew |
| Gummer, Rt Hon John S | Ryder, Richard |
| Hamilton, Hon A. (Epsom) | Sackville, Hon Thomas |
| Hamilton, Neil (Tatton) | Sainsbury, Hon Timothy |
| Hanley, Jeremy | Sayeed, Jonathan |
| Hannam, John | Shaw, Giles (Pudsey) |
| Hargreaves, Kenneth | Shaw, Sir Michael (Scarb') |
| Shelton, William (Streatham) | Thompson, Patrick (N'ich N) |
| Shepherd, Richard (Aldridge) | Thorne, Neil (Ilford S) |
| Silvester, Fred | Thornton, Malcolm |
| Sims, Roger | Thurnham, Peter |
| Skeet, Sir Trevor | Twinn, Dr Ian |
| Smith, Tim (Beaconsfield) | van Straubenzee, Sir W. |
| Soames, Hon Nicholas | Viggers, Peter |
| Speller, Tony | Waddington, Rt Hon David |
| Spencer, Derek | Walker, Bill (T'side N) |
| Spicer, Jim (Dorset W) | Waller, Gary |
| Spicer, Michael (S Worcs) | Wardle, C. (Bexhill) |
| Stanbrook, Ivor | Warren, Kenneth |
| Steen, Anthony | Watts, John |
| Stern, Michael | Wells, Bowen (Hertford) |
| Stevens, Lewis (Nuneaton) | Wells, Sir John (Maidstone) |
| Stewart, Allan (Eastwood) | Wheeler, John |
| Stewart, Andrew (Sherwood) | Whitfield, John |
| Stokes, John | Whitney, Raymond |
| Stradling Thomas, Sir John | Wolfson, Mark |
| Sumberg, David | Wood, Timothy |
| Taylor, John (Solihull) | Woodcock, Michael |
| Taylor, Teddy (S'end E) | Yeo, Tim |
| Tebbit, Rt Hon Norman | Young, Sir George (Acton) |
| Temple-Morris, Peter | |
| Terlezki, Stefan | Tellers for the Ayes: |
| Thomas, Rt Hon Peter | Mr. Gerald Malone and |
| Thompson, Donald (Calder V) | Mr. Michael Portillo. |
| NOES | |
| Abse, Leo | Dormand, Jack |
| Adams, Allen (Paisley N) | Dubs, Alfred |
| Alton, David | Dunwoody, Hon Mrs G. |
| Anderson, Donald | Eadie, Alex |
| Archer, Rt Hon Peter | Eastham, Ken |
| Ashley, Rt Hon Jack | Evans, John (St. Helens N) |
| Atkinson, N. (Tottenham) | Fatchett, Derek |
| Bagier, Gordon A. T. | Field, Frank (Birkenhead) |
| Barron, Kevin | Fields, T. (L'pool Broad Gn) |
| Beckett, Mrs Margaret | Fisher, Mark |
| Bell, Stuart | Flannery, Martin |
| Benn, Rt Hon Tony | Foot, Rt Hon Michael |
| Bermingham, Gerald | Forrester, John |
| Bidwell, Sydney | Foster, Derek |
| Blair, Anthony | Foulkes, George |
| Boyes, Roland | Fraser, J. (Norwood) |
| Bray, Dr Jeremy | Freeson, Rt Hon Reginald |
| Brown, Gordon (D'f'mline E) | Garrett, W. E. |
| Brown, Hugh D. (Proven) | George, Bruce |
| Brown, N. (N'c'tle-u-Tyne E) | Gilbert, Rt Hon Dr John |
| Brown, R. (N'c'tle-u-Tyne N) | Godman, Dr Norman |
| Bruce, Malcolm | Golding, Mrs Llin |
| Buchan, Norman | Gourlay, Harry |
| Callaghan, Jim (Heyw'd & M) | Hamilton, James (M'well N) |
| Campbell, Ian | Hancock, Michael |
| Campbell-Savours, Dale | Hardy, Peter |
| Carlile, Alexander (Montg'y) | Haynes, Frank |
| Carter-Jones, Lewis | Heffer, Eric S. |
| Clark, Dr David (S Shields) | Hogg, N. (C'nauld & Kilsyth) |
| Clarke, Thomas | Home Robertson, John |
| Clay, Robert | Howell, Rt Hon D. (S'heath) |
| Clelland, David Gordon | Howells, Geraint |
| Clwyd, Mrs Ann | Hoyle, Douglas |
| Cocks, Rt Hon M. (Bristol S) | Hughes, Robert (Aberdeen N) |
| Cohen, Harry | Hughes, Roy (Newport East) |
| Coleman, Donald | Hughes, Sean (Knowsley S) |
| Conlan, Bernard | Janner, Hon Greville |
| Cook, Frank (Stockton North) | John, Brynmor |
| Corbett, Robin | Jones, Barry (Alyn & Deeside) |
| Cox, Thomas (Tooting) | Kaufman, Rt Hon Gerald |
| Craigen, J. M. | Kirkwood, Archy |
| Crowther, Stan | Lambie, David |
| Cunliffe, Lawrence | Lamond, James |
| Cunningham, Dr John | Leadbitter, Ted |
| Dalyell, Tam | Leighton, Ronald |
| Davies, Ronald (Caerphilly) | Lewis, Terence (Worsley) |
| Davis, Terry (B'ham, H'ge H'l) | Litherland, Robert |
| Deakins, Eric | Livsey, Richard |
| Dewar, Donald | Lloyd, Tony (Stretford) |
| Dixon, Donald | Lofthouse, Geoffrey |
| Dobson, Frank | McCartney, Hugh |
| McDonald, Dr Oonagh | Rogers, Allan |
| McGuire, Michael | Rooker, J. W. |
| McKay, Allen (Penistone) | Ross, Ernest (Dundee W) |
| McTaggart, Robert | Ross, Stephen (Isle of Wight) |
| McWilliam, John | Rowlands, Ted |
| Madden, Max | Sedgemore, Brian |
| Marek, Dr John | Sheldon, Rt Hon R. |
| Marshall, David (Shettleston) | Shields, Mrs Elizabeth |
| Martin, Michael | Shore, Rt Hon Peter |
| Maxton, John | Short, Ms Clare (Ladywood) |
| Maynard, Miss Joan | Short, Mrs R.(W'hampt'n NE) |
| Meacher, Michael | Silkin, Rt Hon J. |
| Meadowcroft, Michael | Skinner, Dennis |
| Michie, William | Smith, C.(Isl'ton S & F'bury) |
| Mikardo, Ian | Soley, Clive |
| Millan, Rt Hon Bruce | Spearing, Nigel |
| Mitchell, Austin (G't Grimsby) | Steel, Rt Hon David |
| Morris, Rt Hon A. (W'shawe) | Stewart, Rt Hon D. (W Isles) |
| Morris, Rt Hon J. (Aberavon) | Stott, Roger |
| Nellist, David | Strang, Gavin |
| Oakes, Rt Hon Gordon | Straw, Jack |
| O'Brien, William | Thompson, J. (Wansbeck) |
| O'Neill, Martin | Thorne, Stan (Preston) |
| Park, George | Torney, Tom |
| Parry, Robert | Wardell, Gareth (Gower) |
| Patchett, Terry | Wareing, Robert |
| Pendry, Tom | Welsh, Michael |
| Pike, Peter | White, James |
| Powell, Raymond (Ogmore) | Wigley, Dafydd |
| Prescott, John | Wilson, Gordon |
| Randall, Stuart | Winnick, David |
| Raynsford, Nick | Woodall, Alec |
| Redmond, Martin | |
| Rees, Rt Hon M. (Leeds S) | Tellers for the Noes: |
| Richardson, Ms Jo | Mr. Walter Harrison and |
| Roberts, Allan (Bootle) | Mr. Tony Banks. |
| Roberts, Ernest (Hackney N) |
§ Question accordingly agreed to.
§ Amendments made: No. 59, in page 3, line 23, leave out `or parts of items'.
§ No. 60, in page 3, line 27, leave out 'or parts of items'.
§ No. 61, in page 3, line 30, leave out or parts of items'.
§ No. 62, in page 3, line 33, at end insert 'and'.
§ No. 63, in page 3, line 36, leave out from 'courses)' to end of line 38.
§ No. 65, in page 3, line 40, leave out 'or parts of items'.
§ No. 66, in page 3, line 41, at end insert 'and'.
§ No. 67, in page 3, line 43, leave out from 'authority' to end of line 46.—[Dr. Boyson.]
§ Mr. Roland Boyes (Houghton and Washington)I beg to move amendment No. 68, in page 4, line 1, leave out subsection (6).
The amendment seeks to delete subsection (6). It appears to be another example of the Secretary of State building legal safeguards and judge-proofing into the Bill. It is surprising that the Secretary of State has found it necessary to include this catch-all subsection. He has had at least three months in which to draft the legislation.
Clause 3 defines what is meant by local authorities' expenditure for the purpose of part VI of the 1980 Act's support grant. It is acceptable to us, so far as it goes, subject to the safeguards that we are trying to build into clause 3. However, clause 3(6) says:
Subsection (1)…shall have effect subject to any enactment (whenever passed)".Will the Minister explain what this phrase means and tell the Committee what was the Government's intention in including this phrase? Is it retrospective?Will the Minister also list the Acts to which the phrase refers? The Committee is being asked to give a blank cheque to the Secretary of State. How are hon. Members 980 to know whether the redefinition of "relevant expenditure" is appropriate in the context of other enactments? Does the Secretary of State know what they are? If so, will he list them, or is this a manifestation of legal paranoia?
§ Dr. BoysonI am grateful to the hon. Member for Houghton and Washington (Mr. Boyes) for his comments. This is a technical matter and I shall answer as best I can about what this amendment would do and why we are resisting it. The amendment would mean that the definition of relevant expenditure in the Bill would exclude certain items that we do not want excluded. It would delete clause 3(6) which provides that the definition of relevant expenditure is
subject to any enactment (whenever passed) having the effect that anything is or is not to be treated…as relevant expenditure".An example of such an enactment is the Social Security and Housing Benefit Act 1982, which provides that if an order is made—and one has been made—certain contributions to the housing revenue account are not to be treated as relevant expenditure. It is on this basis that our current practices on rate support grant have been operated. The effect of the amendment would be that in any rate support grant reports and supplementary reports made after the passing of the Bill those contributions would no longer be excluded from relevant expenditure.It is right that the provisions which provide that certain items are not part of relevant expenditure should continue to have effect. I need hardly remind the Committee again that the purpose of the Bill is to enable us to continue current practice and, as far as possible, clause 3 and the rest of the Bill will ensure a continuance of current practice. I hope that the Opposition will not press the amendment to a vote, because it would undermine part or all of clause 3.
§ Mr. HancockThis amendment is a challenge to the Minister because he must tell the Committee what it means. Let me put myself in the position of a local government treasurer reading this legislation and being asked by his members to explain what it means. What does this cover and what does it not cover? It is not good enough for us glibly to push aside an amendment which is not only a probing amendment but one which means something. It means that in future the Government will have to spell out exactly what they mean by it. It is not good enough for us to be told time and time again that these matters will be open to challenge in the courts. That is not a fair basis upon which local government should have to work in the next 12 months after the Bill receives Royal Assent.
We need specific answers to those points. I am sure that with the best will in the world the Minister will say that in time he can give those answers. I look forward to that time and to the correspondence. This debate is sparsely attended, but there is a wider audience outside which has some enthusiasm for local government expenditure. Such enthusiasm is hard to engender in the Committee, but in the months ahead many people will have a difficult time if we do not get some clarification of exactly what is meant by the Minister's statements.
I am sure that Hansard will be read by those treasurers and councillors who care about what is happening to local government finance. They will wonder what the Minister meant in his reply to the hon. Member for Houghton and 981 Washington (Mr. Boyes), who moved the amendment. The Minister must spell out what is covered and what is not. What areas of expenditure does he want to see included but which are not specifically mentioned in the Bill? May we please have answers to those questions?
§ Dr. BoysonI shall reply briefly to the questions asked by the hon. Member for Portsmouth, South (Mr. Hancock). I shall have to be careful with the words because all these words mean something and have to be interpreted. [Interruption.] I try to interpret them for myself at the same time as I interpret them for the Committee and five minutes later I wonder if I have. I should prefer to write to the hon. Member about this, because I do not want to be tied to what I say is the interpretation. For example, I have written down for my own reference the definitions for net expenditure and total expenditure. I have written that net expenditure is, first, from the rate support grant, secondly, from the rate and precept income, thirdly, from balances and, fourthly, from specific and supplementary grants. Total expenditure, which one would expect to be more, is all these without specific and supplementary grants. Having understood that, I think that I had better be careful on the other definitions.
§ Amendment negatived.
The Second Deputy ChairmanWith this amendment it will be convenient also to take amendment No. 70, in page 4, line 12, leave out from 'by' to end of line and insert
the addition or subtraction of such descriptions of expenditure or receipts.
§ Mr. BoyesClause 3(7) allows the Secretary of State to adjust the definition of total expenditure given in the Bill by adding or subtracting items in any future year. The definitions of relevant and total expenditure form the basis of the legal difficulty currently facing the Government in their rate support grant and Rates Act policy. That power will give the Secretary of State a substantial measure of control in the future to affect the basis of local authority spending policies.
In his statement to the House on 16 December 1986, the Secretary of State said:
The Bill is designed to make no changes in policy, but as far as possible to apply existing policy within a tight timetable."—[Official Report, 16 December 1986; Vol. 107, col. 1051.]In fact, the Minister is taking several opportunities in the Bill to augment his powers, as in this case. Clause 3(7)(b) contains unspecific and sweeping powers for the Secretary of State to reduce or increase an authority's total expenditure, which is used to calculate its entitlement to grant. There is no sign of how the power will be used or by what criteria that use will be governed. Given that it may be used arbitrarily to deprive local authorities of millions of pounds, it is essential that Parliament retains an ability to scrutinise the use of the power rather than leaving such general powers in the hands of the Executive. Our amendment will delete paragraph (b), which includes these extra powers.
§ Dr. BoysonSection 56 (8) of the 1980 Act provides that total expenditure is relevant expenditure reduced by the amount of specific and supplementary grants, and adjusted by the addition or subtraction of such 982 descriptions of expenditure or receipt that the Secretary of State may direct. Directions were made under this power for each of the years 1983–84 to 1986–87. It is intended to make specifications under clause 3(7)(b) which broadly will reflect the directions made in the past.
The effect of amendment No. 69 is that total expenditure will be relevant expenditure reduced by the amount of specific and supplementary grants. Total expenditure will not therefore be the same as in the past. The basis of the Bill is to put in definitions that will stand up that we presumed from 1980 to 1986 were the definitions on which so much local government financing went ahead.
Amendment No. 70 will replace the power to make specifications in clause 3(7)(b) with a power in the same terms as the present power in section 56(8) of the 1980 Act. The purpose of the amendment is to find out why the terms of the power have been changed. The reasons are that the existing power allows adjustment to be made only in respect of expenditure—that is, expenditure incurred in respect of third parties—and receipts which are, income from third parties.
Some of the adjustments made in the past were not, or might not, be expenditure or receipts. I am sure that the Committee is following this very carefully. Clearly, the hon. Member for Houghton and Washington (Mr. Boyes) is. For example, directions were made so that discounts for prompt payments of rates should be added—something that has been discontinued in most parts of Britain, but we used to have discounts for rates if they were paid by a certain time.
It is only arguable that that is expenditure. Directions were also made that certain reductions in block grant as a result of regulations under schedule 10 of the 1980 Act—that is, the Act on educational pooling—should be added. But those reductions in block grant were neither expenditure nor receipts. Unless the power is in the terms of that in clause 3(7)(b), it will not be possible to reproduce what has been the practice for 1983–84 to 1986–87 in the future. One will realise what a disaster that would be for the country.
§ Mr. PikeBy his comments the Minister showed that there might be a case for not pressing the amendment. However, rather than giving one example, he needed to give more details about why it was essential that the clause should not be amended.
On amendments Nos. 69 and 70 the Minister said that the Government's intention is, as far as possible, to try to maintain the status quo in all respects. However, we would argue that that is not the case. Burnley borough council, on which I used to serve, still gives 2.5 per cent. discount for the prompt payment of rates. That is highly successful, although whether it is worthwhile is considered every year by the council when it fixes the annual rate. The council must calculate how much discount it will give and provide extra income to cover that. The prompt payment of rates means that it can save on interest payments and gain income from investing money for a short period.
However, I doubt whether clause 3(7)(b) means exactly what the Minister says it does. If it really does mean what the Minister is saying, I could accept the logic of leaving it as it is, although, obviously, we do not like many of the provisions in the Bill.
I would argue that the clause gives the Secretary of State scope beyond what the Minister was saying and that 983 is the danger. If the Minister is sincere in what he has just said, and if the Secretary of State is also sincere—he is in the Chamber—they should tell the House tonight that they are prepared to amend the clause on Report in order to clarify it because it can be interpreted in a different way.
I strongly believe that it is not what a Minister says, whether in Committee upstairs or on the Floor of the House, that makes the law; it is the Bill as it is written which will have to be interpreted in the courts. Even if we are prepared to be generous to the present Secretary of State, another Secretary of State could use this in a different way at a later stage.
In all seriousness, if the Minister really believes what he said to us, let him prove his good faith by saying that the Government are prepared to look at this again and return on Report with something which will make it clear that what he said is what the clause actually means. At the moment, I believe that it can be interpreted in a different way and others will also believe that. If that is the case, it is not acceptable. I hope that the Minister will be prepared to look at the clause in that spirit and say that the Government are prepared to think again.
§ Dr. BoysonI am grateful for the speech of the hon. Member for Burnley (Mr. Pike). I am glad to know that the 2.5 per cent. discount is still paid in the hon. Gentleman's constituency. I come from the next valley, the Rossendale valley, and a 2.5 per cent. discount was always paid there. I never understand why authorities in London do not have discounts to get their money in more quickly. If there is a north-south divide, it seems to be that discounts are paid in the north but not in the south.
This week we in the Government have been blamed for the number of amendments that we have put down because of the speed with which we have had to bring this Bill before the House. If we started putting down more amendments on the suggestion of the hon. Member for Burnely, honest as I am sure he is in the desire for further clarification, we would have to be careful what we did.
We shall consider what the hon. Gentleman said and what is contained in the clause. If it is then our conviction that the amendments can be expressed more clearly and will stand up in the courts—
§ It being Ten o'clock, THE CHAIRMAN left the Chair to report Progress. and ask leave to sit again.
§ Committee report Progress