HC Deb 21 January 1987 vol 108 cc908-46
Dr. Cunningham

I beg to move amendment No. 19, in page 2, line 26, at end insert— '(6A) The Secretary of State shall lay before Parliament an annual report on any specification made in respect of subsection (6) above.'.

The First Deputy Chairman

With this it will be convenient to take the following amendments: No. 20, in page 2, line 26, at end insert— '(6A) Specifications made under subsection (6) above must be contained in an Order under this Act which shall be subject to annulment in pursuance of a resolution of either House of Parliament.'. No. 21, in page 2, line 26, at end insert— '(6A) Specifications made under subsection (6) above must be contained in an Order under this Act and no Order under this subsection may be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.'. No. 48, in clause 2, page 3, line 14, at end insert `provided only that any such specification shall require an affirmative resolution of both Houses of Parliament.'. No. 51, in page 3, line 14, at end insert `Specifications made under this subsection must be contained in an Order under this Act, and no Order under this subsection may be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.'. No. 52, in page 3, line 14, at end insert `Specifications made under this subsection must be contained in an Order under this Act which shall be subject to annulment in pursuance of a resolution of either House of Parliament.'. No. 71, in clause 3, page 4, line 14, at end insert— '(7A) Specifications made under subsection (7) above must be contained in an Order under this Act which shall be subject to annulment in pursuance of a resolution of either House of Parliament.'. No. 72, in page 4, line 14, at end insert: `(7A) Specifications made under subsection (7) above must be contained in an Order under this Act and no Order under this subsection may be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.'. No. 154, in clause 9, page 7, line 44, at end add— '(7) The power may only be exercised provided that there shall have been an affirmative resolution of both Houses.'.

Dr. Cunningham

There remains, as we have just been demonstrating, considerable concern about the power of the Secretary of State in respect of the Bill. One concern is about the power of the Secretary of State to make specifications regarding local authority accounting practices for the purposes of clause 1. Amendment No. 19 makes the minimal requirement that, once specifications have been made in a given year, the Secretary of State should lay an annual report before Parliament setting out the details. That is not only a reasonable but a sensible requirement. It would give Parliament the opportunity to consider and review what had happened.

It would also provide a means for Parliament at least to be informed of the implementation of subsection (6) in practice. It would also provide an opportunity for local government accountants to examine the Government's intentions in the exercise of proper professionalism, which we presume this is all about. The accountants would no doubt want to ensure the Government's interventions were met with the most appropriate and uniform response in accordance with accountancy practice. As the Government talk about good and proper practices, presumably they intend also to try to seek uniformity. It is, I understand, at least in part the Government's case that lack of uniformity is one thing that they want to bring to an end.

Amendments Nos. 20 and 21 call for any specification made under subsection (6) in respect of local authority accounting to be made the subject of an order. Amendment No. 20 provides for a negative order and amendment No. 21 for an affirmative order subject to approval by both Houses. The alternative proposals spring in part from the difficulty of trying to find out the Government's intention and, therefore, the likely importance of any specifications to be made. The Government's attitude is obscure, to say the least. Some of the specifications are likely to be of considerable significance to local authority accounting practice and to the financial circumstances of the authorities concerned.

Other specifications may be trivial, but at least in the case of more important ones it is important to have some safeguards to allow for parliamentary scrutiny. If no such scrutiny is provided for, it seems clear that the Secretary of State could make changes which have a substantial impact on an authority in the forthcoming financial year without there being any recourse to Parliament. That seems unfair and a significant departure from previous practice.

The power to specify extends to naming additional accounts against which expenditure or income is to be disregarded for purposes of calculating block grant, and possibly even wider purposes. From the point of view of authorities that are under financial pressure, the power in respect of income definitions in particular could have major implications. If our guesswork is right, it is incumbent on the Minister for Local Government to be candid with the House and say what the implications are.

Other amendments, which we would have liked to have been selected, deal with related matters. Amendments Nos. 50 and 51 would require the affirmative and the negative resolution procedure respectively for orders. Amendment No. 50 would preserve the opportunity of Ministers to make specifications, but require a local authority to have regard to any specification only when determining what to count against its rate fund revenue account.

Amendments Nos. 71 and 72 would limit the power of the Secretary of State to specify adjustments upwards or downwards to calculations of authorities' total expenditure in any year from 1987–88. The power is a further example of the way in which the Bill goes beyond the simple technical requirement to clarify the law. Amendments Nos. 71 and 72 would require the making of a negative and affirmative order respectively before any such specification could be effective. They seek the kind of safeguards that I spoke of a little while ago.

I have been brief because, in spite of what the Secretary of State said earlier, it is not any part of our purpose to talk just for the sake of it or unnecessarily to delay the Bill. I hope that I have said enough to allow the Minister to take more time to reply in detail to our fears.

4.45 pm
Mr. Michael Meadowcroft (Leeds, West)

I wish to speak to amendments Nos. 48 and 154. I agree with the hon. Member for Copeland (Dr. Cunningham). I am not anxious to delay the Committee unduly.

Mr. Tony Banks

Drag it out.

Mr. Meadowcroft

The hon. Member can speak for himself.

Much of what we are discussing goes beyond simply rectifying the law. The Government are trying to take powers to determine what should go in what accounts. If the Government want to force through more centralising powers over local government, those powers must lie as far as possible with Parliament rather than with the Government or, still worse, the Secretary of State.

The alliance amendments are like those proposed by the hon. Member for Copeland. We say in amendment No. 48 that the items that the Government believe should be put in or deleted from a local authority rate fund revenue account should be considered by the House on the affirmative resolution procedure. We have proposed the same, with miscellaneous specifications, under clause 9.

The House should retain those powers because of the distinction that we would make between accounting techniques or systems employed by local authorities that are legitimate or illegitimate. It is perfectly legitimate for a local authority to do things which it believes are genuinely acceptable in terms of its fiduciary powers and which are what the Government of the day wish to do, and not to rely on a change of Government retrospectively to put money into its funds again.

A local authority which says that, bearing in mind its understanding of existing Government policy towards local government, it should be able to sort out its accounts to the best advantage of people in its area and pursue what it understands to be Government policy, is acting legitimately. If, however, it decides to do various things with its account in the hope that, before it goes bankrupt, a new Government will be returned and retrospectively put money back into the account, it is acting illegitimately.

It is important that Parliament should retain its powers of scrutiny and not allow a Government to overrule one course of action and allow the other. If we are to have such centralising powers, Parliament must have powers of scrutiny. I do not want to scrutinise such matters, but that is better than leaving it to the Government.

Mr. Peter Pike (Burnley)

I hope that amendments Nos. 20 and 21 are carried. In this group of amendments, we have given the Government a choice between them and a more moderate line. Amendment No. 19 is a much more modest version, and the Government should be prepared to accept it if they are at all reasonable.

I am anxious that we are increasingly taking powers from local government and limiting the powers of Members of Parliament to be aware of what the Secretary of State decides. The present Secretary of State is fond of introducing legislation which gives him powers. He did that with the Transport Act 1985. Here, in clause 1(6)(b), the right hon. Gentleman is empowering himself to change what is not concluded in schedule 1.

One can assume that, if the accounts already exist and the Government wish to specify them at some future date, they will be included in schedule 1. We have the right to debate schedule 1 and to decide whether we agree with what is included in it. Clause 1(6)(b) gives the Secretary of State power at any future date to add without reference to the House items of which he may now be aware. If he wishes he could name them at this stage.

I recognise that, because of the haste with which the Bill has had to be prepared and the wide diversity of local government, the Secretary of State may not be aware of everything that should be taken into account. Of course, circumstances change. A future Secretary of State, whether Conservative or Labour, may consider that certain matters should be included in the provision and may want to add to the list of items already included in schedule 1. Our principal point of difference concerns the way in which that is to be done, if we accept that it might be necessary.

My hon. Friends and I believe that it is totally wrong that the Secretary of State, without any reference to the House, may change a specified account and thereby change the way in which local authorities can administer their services and meet the needs of their communities. Government Members must remember that it may not be long before my hon. Friend the Member for Copeland (Dr. Cunningham) is the Secretary of State. If the Bill as it stands is passed, he may wish to take some action without reference to the House.

The amendments have been tabled in a reasonable manner. It is right that we should include those provisions. If amendments Nos. 20 and 21 are not agreed, amendment No. 19 is the absolute minimum that the Government should be prepared to accept. If Conservative Back Benchers respect their positions as hon. Members, if they believe that there is any point in being Members of Parliament and do not wish power to be continually eroded and given to Secretaries of State who will not have to answer for their decisions—this clause will give increased power to a Secretary of State—they should join Labour Members in the Division Lobby and vote for one or other of the amendments.

Mr. Peter Hardy (Wentworth)

I shall make basically the same point as was made by the hon. Member for Leeds, West (Mr. Meadowcroft) who considered that Parliament should be concerned about legitimacy. My hon. Friend the Member for Burnley (Mr. Pike) properly spoke about the need for Parliament to have an adequate opportunity to press important matters. This week, I received a letter from the Under-Secretary of State for Employment—the hon. Member for Rossendale and Darwen (Mr. Trippier)—which led me to make my brief contribution in support of amendments Nos. 19 to 21. Parliament must have an opportunity to challenge not only illegitimate but unreasonable Government actions. One of my constituents, who is developing a small business, wrote to me about problems that he encounters. He made a passing reference to rates. The Minister's reply, in part, states: The whole issue of business rates is of major concern to the Government and it is a matter which has to be tackled at the roots by encouraging value for money and discouraging excessive spending by individual authorities. The Government have already introduced a number of measures to ease the rates burden on business. The Under-Secretary's letter contains not one word about the fact that businesses must bear a £6 billion burden because of the Government's action in reducing central support and forcing local authorities to increase rates. Parliament will be put in a bad position if it is denied an opportunity to challenge the irresponsible and unreasonable comments by Ministers who write letters such as this to my constituents and disregard the truth, the reality and the record. The Minister must understand that the House of Commons needs an opportunity to challenge illegitimate and unreasonable Government actions.

I am not a lawyer and I do not have the expertise to determine which Government actions are illegitimate. But, as an ordinary citizen and an experienced Member of Parliament, I can say with absolute confidence that the Government's actions are entirely unreasonable and that Parliament will greatly be at fault if it does not take sufficient power to challenge irresponsible and unreasonable attitudes.

Mr. Tony Banks

During the speech of the hon. Member for Leeds, West (Mr. Meadowcroft) I intervened to the effect that I certainly wished to drag out the debate on the Bill for as long as I possibly could. I part company, perhaps, with my hon. Friends on the Front Bench in that respect. By nature, I am far more of a kamikaze Member of the House. I shall be quite clear about this matter. As long as I stay within order, if I can inflict some damage on the Government, if only by the boring nature of my speeches—if that is the only recourse that I have—that is what I shall do. Therefore, I make no apologies. Provided I always stay within order—I know that you, Mr. Armstrong, will guide me in this respect—I may delay the Committee to exact some form of retribution on the Government. Two hon. Members, who are not here at the moment but are standing by, fully armed and ready to rush in at a moment's notice—my hon. Friends the Members for Newham, North-East (Mr. Leighton) and for Newham, South (Mr. Spearing)—and I are so outraged at what the Government are doing to our borough that we shall do anything we can to deny the Government this legislation and to deny Conservative Members their sleep or dinners, always, of course, staying within order.

It has been said that amendment No. 19 is the minimum requirement. All that we ask of the Secretary of State is that he brings a report to Parliament giving details of what changes have been made in local authority accounting practices for the purposes of clause 1. That is a perfectly reasonable demand. Amendments Nos. 20 and 21 go slightly further, but in the same direction. They call for any specification made under section 1(6) in respect of local authority accounting to be made the subject of an order. Amendment No. 20 will provide for a negative order and amendment No. 21 will provide for one subject to the affirmative procedure, requiring approval by both Houses. With two forms of order, one can choose that which is most suited to the provision being introduced by the Government. That merely underlines how reasonable and flexible we are, and we invite the Government to join us.

Ministers cannot have it both ways. If Ministers insist on interfering in the day-to-day affairs of town halls and county halls, and insist on dragging unwilling Members of Parliament into the affairs of local authorities, making this the place in which decisions that previously were taken by democratically elected local councillors are now taken, we should have the right to interrogate them and to ask for reports from them in much the way that local councils do in respect of their leaders, chairs of committee and chief officers. If we are to turn this place into a mega town hall, we might as well import many of the practices followed in town halls and county halls. I do not welcome that development. It is deplorable that a local authority's decision-making responsibilities are constantly reduced by a Government who have repeatedly said since 1979 that they intend to take Whitehall off the backs of town halls.

5 pm

The effect of all the local government Bills since 1979 has been contrary to the Prime Minister's stated intention in 1979. Parliament is interfering in and deciding matters that used to be the day-to-day concern of democratically elected local councillors. That is to the disadvantage of local authorities and Parliament. Hon. Members are not really interested in getting so close to the detailed financial provisions of local authorities. In this part of the Bill we can see just how detailed we are becoming in our consideration of local authority matters. I can prove the point that Parliament—meaning its Members—is not happy about these activities by once again pointing at the deserted Conservative Benches. Conservative Members are simply not interested. We realise that these proposals are neither of interest nor of close concern to Conservative Members.

In these amendments we are saying that, if the Secretary of State insists that Parliament should take over many of the responsibilities now exercised by local government, Parliament must have the right to examine all the Government's proposals in detail. I have pointed out more than once—I suspect that, if I am fortunate enough to catch your eye, Mr Armstrong, during the many hours that we shall no doubt consider the Bill, I shall do it again—that, if we are to interfere in the affairs of local authorities, we must have the power to ensure that we exercise those functions in the best possible and most efficient manner.

These amendments are reasonable. I am surprised that the Government are resisting them so strongly. I shall wait to hear the Minister and perhaps, if I can catch your eye, Mr. Armstrong, I may even speak again on this clause.

Mr. Stuart Holland (Vauxhall)

I support amendments Nos. 19, 20 and 21. The Committee will be aware that the vagaries of local government finance have been well known for many years to Secretaries of State of more than one party. Indeed, the black box of the rate support. grant system is such that I understand that at least one former Secretary of State held his head in his hands waiting for the result of the programme which showed the various weightings, allocations, cross-references of individual items, and so on.

This is a very complex business. It is hardly surprising that many people in our constituencies do not understand the vagaries of the rate support grant system or why they are being shot in the hip on the housing investment programme, and cannot follow all the arguments in detail. If there is anyone who should be following all the arguments in detail, it is the Secretary of State responsible for those matters. It is incumbent on him to make apparent and transparent to the House of Commons precisely what kind of expenditure and what kind of criteria are involved.

A major parliamentary principle is involved in these issues, and it concerns retrospective legislation. In the past, hon. Members have taken extra-parliamentary action to oppose the principle of retrospective legislation. It is crucial that the Secretary of State should be accountable in the manner recommended by amendment No. 19, which states: The Secretary of State shall lay before Parliament an annual report on any specification made in respect of subsection (6) above. Why is the Secretary of State not prepared to make an annual report? Is it the simple fact that he has got it wrong so often that he does not have the self-confidence to work out the figures accurately, even once a year, and present and defend them in the House of Commons? What are the rights of the House in relation to the scrutiny of public expenditure if it cannot get a statement from the Secretary of State concerned? This legislation combines with the measures that the Government have taken in depriving some 11 million people of the vote in the metropolitan authorities and in abolishing the metropolitan authorities. It takes further powers from the House, just as the Government have abolished the powers of elected government in metropolitan counties and the right of people through their elected representatives to see what is happening.

Mr. Tony Banks

I should like to correct my hon. Friend in one respect. The number of people who lost the vote through the abolition of the GLC and the metropolitan county councils was not 11 million but 18 million. I am sure that my hon. Friend would want to be corrected.

Mr. Holland

I am grateful to my hon. Friend for reminding me of that figure.

As for accounting procedures, the Government have maintained repeatedly from the Front Bench, with vociferous support from their Back Benches—fuller than they are today—that they wish commercial practices to be introduced into local authority finance; that they wish to see entrepreneurship flourish and would like to see the same in local authorities. The Government have claimed—one Conservative Back Bencher did so during Monday's debate—that local authorities are in some sense bureaucratic and hamstrung and cannot respond with initiative to problems as they arise. As it happens, last week several of the London boroughs responded to the very cold weather that we were facing in London. In Lambeth, meals on wheels were increased to more than 15,000 a day, emergency heating repairs were carried out—250 in one day—and provision was made for assisting the elderly who were faced with a crisis.

How will a local authority—whether Lambeth or Camden or one in Liverpool or any other part of the country—be able to be confident that it can fulfil its obligations to those in need during such a period under the emergency powers which at present in principle obtain to it if the Secretary of State rules retrospectively that these powers are out of order? What will the liability be, for example, in relation to surcharging? It is bad enough that councillors have to face the prospect of surcharging when Ministers certainly do not. For example, the Chancellor of the Exchequer has got his sums wrong by several thousand million pounds a year in every medium-term financial forecast. Perhaps it would be a good idea if he were personally liable for that surcharging.

It is intolerable that not only should elected councillors face the risk of surcharging for defending the interests of those who elected them, or even for fulfilling their statutory obligations, but that it should be open to the Secretary of State to revise the basis of what is or is not legitimate expenditure, and to do so without bringing the matter before the House of Commons.

The Government laud certain kinds of commercial practice. There has recently been a spate of takeover bids in the City of London. Many of the companies involved, such as BTR, are classic conglomerates. Their aim is to enlarge their sphere of profit rather than the sphere of public service. But they take over the headquarters of a building and then sell it off or lease it out or lease it back in much the same manner as has been done with certain town halls where local authorities are seeking to be able to match appropriate income to appropriate expenditure.

That is highly relevant to the matters that are before us, in as much as the circumstances of individual local authorities differ so much. We know very well that very few inner-city constituencies are represented by Conservative Members, very few Conservative Members do more than, for example, live in an inner-city constituency within easy reach of this House. Many of them pride themselves on the fact that they live in the borough of Lambeth, thinking that they somehow have expertise in the problems of that borough.

Mr. Heddle

Where does the hon. Gentleman live?

Mr. Holland

Let me identify the sort of problems that are relevant to the amendments.

Mr. Tony Banks

I do not know whether my hon. Friend heard the comment that has just been made by the hon. Member for Mid-Staffordshire (Mr. Heddle). I suggest that my hon. Friend asks that hon. Gentleman, who just wanders in and out as if this was a buffet meal rather than the House of Commons, to repeat the remark that he made. The hon. Member for Mid-Staffordshire asked my hon. friend what bourgeois suburb of London he lives in. Perhaps my hon. Friend would like to tell him.

Mr. Holland

Perhaps the hon. Member for Mid-Staffordshire (Mr. Heddle) would care to get to his feet on that matter. I do not happen to live in a bourgeois suburb. I live in my constituency. I do not know where the hon. Gentleman lives.

The reality is that many Conservative Members have walked into the debate as did the hon. Member for Eastbourne (Mr. Gow) on Monday, who got to this feet and started to talk about the Soviet borough of Lambeth, saying, apparently supporting his knowledge of the matter, that he lives there. It is not enough simply to live in a constituency to understand what its problems are.

In the London borough of Lambeth, for example, over half of the council housing is pre-1919. Now what does that mean in terms of the renewal expenditure undertaken by the council? It means not only that the expenditure per flat for modernisation is higher than other expenditure figures but quite simply that there comes a critical time in the life of housing stock when one cannot remedy a problem by replacing slates on the roof, or clearing the drains; one actually needs new roofs, new heating systems and new drains.

Therefore, there are indivisibilities in the expenditure that individual councils face. If they are to be able to fulfil their obligations to maintain a decent stock of housing, they will incur more expenditure when housing in that stock has come to the end of its natural life than those councils in other boroughs which have hardly any multistorey tenancies and where there is detached council housing. In that respect, it is really quite wrong for Ministers to set down general guidelines without reference to the special needs that are accounted for and represented by that particular character of housing stock.

The argument that, in principle, rate support grant takes account of that is simply not supported by the overall figures that come out of the black box in the Department. I see that an official is quite desperate to get a message to the Minister. Perhaps the Minister is interested in replying on that, or perhaps he is not. It would be very interesting if he was to get his briefing on it, since clearly he does not know how to reply on the matter himself.

The reality is that, for example, in the London borough of Lambeth, with very special housing needs because of the age of the housing stock, the actual cuts that have occurred in the rate support grant system since 1979 have been well in excess of a single year's total annual revenue, including rate support grant systems.

5.15 pm

I put it to the Minister: what private company—if one wants to apply commercial criteria to the funding of local authorities—could possibly survive if it were to be deprived over five, six or seven years of resources and investment resources equivalent to a year's total income? No such company would be able to do that. Many companies in recent years have been offsetting the relative squeeze on their profits by resorting to techniques such as creative accounting. They are able to get away with creative accounting without being challenged by Ministers, so why are councils challenged on their use of accounting to meet the expenditure needs which they must incur to fulfil their obligations?

By steamrollering the procedures of the House and by not being prepared to come forward with either an annual statement or a statutory instrument, affirmative or negative, the Government will be depriving the House of the right to debate these issues. However, there are also the social services obligations on local government. I will certainly admit that one thing is wrong in the borough of Lambeth—overcrowding. There is overcrowding in the borough and I not only admit but advertise to the House that the London borough of Lambeth is in breach of statutory obligations. It has a statutory obligation to ensure that teenage children of both sexes do not share the same bedroom. But it does not have the alternaive housing into which to put the children concerned.

The Government have compounded the problems with which we are faced by the abolition of the strategic housing role of the GLC. When I became the Member for my constituency we used to move between 1,500 and 2,000 families a year out of Lambeth. The door was slammed on that by what people now regard, quite rightly, as the farce of inter-borough nominations. The Government's population projections were for a falling inner-city population, but since the abolition of the GLC, which permitted that falling inner-city population, the demand for housing has been rising. Over the past few years, between 6,000 and 8,000 additional persons have been put on our books in Lambeth who otherwise would have been able to gain alternative housing outside the London borough of Lambeth and who therefore would not have been a claim on its charges.

In relation to the rate support grant system, how are we going to be able to raise such issues, of what is or is not a due expenditure by a local authority, if the Minister is not going to enable us, as provided in amendments Nos. 19, 20 and 21, to lay before Parliament an annual report or to ensure that the expenditure rules by which local authorities may spend their money are brought before this House?

Mr. Heddle

We have already heard that the hon. Gentleman lives in his constituency and has an intimate knowledge of his constituency. No doubt an examination of "Who's Who" and "Dod's Parliamentary Companion" will show whether he gives his address as the House of Commons, or as an address in his constituency, or the address where he resides at the weekend.

Because of the comprehensive knowledge that the hon. Gentleman has of his constituency, perhaps he would now tell the Committee how many houses in his constituency—he mentioned overcrowding in his constituency—have been vacant for three months in the London borough of Lambeth and how many have been vacant for six, nine or 12 months. Will the hon. Gentleman now admit to the Committee that over 1,378 houses in his constituency have been vacant for more than 12 months?

The First Deputy Chairman

Order. I have allowed the intervention because the hon. Gentleman was talking about overcrowding and so on, but we are getting away from the amendments, which concern parliamentary control.

Mr. Holland

I think I am grateful to you, Mr. Armstrong, for allowing an intervention and then deeming that it may be out of order.

Mr. Tony Banks

I do not want to spoil my hon. Friend's flow, but would he be interested to know that the intervention that he has just had to suffer was based not upon the intimate knowledge of Lambeth of the hon. Member for Mid-Staffordshire (Mr. Heddle), but on information from civil servants, via the Front Bench, via the gofer to the hon. Member for Mid-Staffordshire?

The First Deputy Chairman

The hon. Gentleman knows that that is not at all relevant to anything that we are discussing.

Mr. Holland

What surprises me about the intervention of the hon. Member for Mid-Staffordshire (Mr. Heddle) is that for some reason he actually suggested that I do not live in my constituency. He then claimed that the proof of whether I live in my constituency is not whether I am actually there, whether I pay any rates, or whether any of my constituents know that I am there, but whether it is published in "Dod's Parliamentary Companion" or in "Who's Who", the very mirror of "Spitting Image", the one entry which hon. Members—some of them admiring their own images so much—write for themselves. I am sure that the hon. Gentleman has pinned his "Who's Who" entry to his shaving mirror. I can tell the hon. Gentleman that I do live there. I am proud to live there and I enjoy living there. I do not know whether it is listed in "Dod's Parliamentary Companion" and I do not give a damn, because I do not spend all my time reading my own entries in "Who's Who" or Dod's.

The hon. Gentleman's second point was relevant and I am grateful to him for raising it. The reality is that Lambeth's record on lettings for an inner-city borough with a housing stock of the character I have described is no worse than any other pressured inner-city borough. We know what the Tory party is up to. We know that there is a target list of boroughs. We know the sort of sophisticated, scalpel-like and incisive parliamentary language Conservative Members use such as, "loony Labour borough lock-outs." If they can rise above that gutter language and address the issues, they will address the points that I have made.

When over half of one's public housing stock dates from the first world war, it is extremely difficult to pursue the necessary modernisation programmes. There is a great deal of housing stock in Lambeth that has not been re-let because the resources have been taken away by the cuts in the housing investment programme, so that the houses cannot be brought up to a decent standard. That is item one. The second item relates precisely to the point I made on the abolition of the strategic housing role of the GLC. If one takes away mobility and cannot take the pressure off inner-city boroughs, one does not have the mobility necessary to reallocate the appropriate housing. For example—

The First Deputy Chairman

Order. Before the hon. Gentleman gives his example, I must say that I am trying hard to relate what he is saying to the amendments before the Committee. He must direct his remarks to the amendments.

Mr. Holland

It would be useful to have an assurance from the Minister that what I am saying will not be relevant to the part of the Bill we are discussing and that it will be possible for any hon. Member to raise those issues on the Floor of the House regardless of what the Government deem to be an appropriate specification.

Mr. Straw

Does my hon. Friend agree that clauses 1(6)(b), 2(4), 3(7), 3(8) and 9 give wide powers of specification in relation to the accounts of local authorities? For example, under clauses 3(7) and 3(8) the Secretary of State has powers to specify additions or subtractions from relevant expenditure. As the Bill is currently drafted, that can be done without parliamentary scrutiny. If such subtractions or additions are made, it might seriously affect the ability of a borough such as Lambeth to raise funds and to spend them.

Mr. Holland

I agree with my hon. Friend. One could look at areas with desperate social needs such as homelessness. The propaganda from the Conservative Benches about the number of inner-city boroughs that are providing bed-and-breakfast accommodation to their constituents directly relates to whether it is possible to provide decent alternative housing for them in the inner-city area. As my hon. Friend the Member for Blackburn (Mr. Straw) said, what happens if the Minister were to deem that it was inappropriate for any borough to spend more than X per cent. on bed-and-breakfast accommodation for more than a given period, without it being possible for us to debate such matters in the House? In Lambeth, homelessness and bed-and-breakfast accommodation went up by over 130 per cent. in 1986 at a time when Lambeth is not open to seek re-determination and when it cannot argue its specific needs to Ministers unless amendments Nos. 19, 20 and 21 can be accepted.

The European Community has precious few clear criteria in any area, but at least, on the use of public funds, articles 85 and 86 stress the importance of transparency. We are not getting from the Bill any transparency in the use of public funds or what may be deemed an authorised expenditure. We had a shambles of a performance from the Minister on Monday. Even when he was in the Committee it was difficult to extract appropriate answers from him. We certainly will not be in a position to extract such answers if we do not have the formula recommended in amendment No. 19 for an annual report to the House or if we cannot get the matters debated in the House through the use of statutory instruments.

I am sure that it will be enlightening for you, Mr. Armstrong, if I talk about the propaganda from the Conservative party in terms of the rates burden breaking the back of businesses. A written answer that I extracted from the Chancellor of the Exchequer shows that rates in this country are less than 1 per cent. of the total cost of industrial enterprise. Of course there is a rates burden. My hon. Friend the Member for Wentworth (Mr. Hardy) was right to say that rates revenue has had to rise to enable councils to offset the cuts in rate support grant and central expenditure. However, to argue that rates alone are penalising the inner city defies imagination when there is a decline in employment and therefore in the taxable base of pay-as-you-earn in the inner cities. More than a third of my constituents living in council housing are drawing supplementary benefit. Those people would be glad to work were it not for the fact that the centre of London has been de-industrialised, compounding the problems facing inner cities.

Mr. Tony Banks

Since my hon. Friend is talking specifically about financial and accountng practices of local authorities, will he say that it is probably true that local authorities have had to get themselves more involved in the special accounting methods so that in certain cases they can do something about rates of interest? Those interest rates are caused directly by Government policy. Surely, in terms of business, the consideration that weighs most heavily is not the rates but the rates of interest. That is entirely within the power to the Government to determine.

Mr. Holland

I am glad that my hon. Friend has raised that point. A definitive study about to be published by Croom Helm on the life and birth of small firms does not stress rates as a problem, but the imposition of interest rates and the high cost of bank lending. Private banks are making a claim on the assets of the enterprise and if a small private firm is in difficulties it could find itself in the hands of the liquidator. More small firms fail than succeed as a result of those policies. That is where the Government have got it wrong, and that is why it is vital that we should have a proper framework for debate of these issues on the Floor of the House.

I hope that the Government will reconsider. I hope that some Conservative Members will be prepared to think again before they make sweeping and uninformed criticisms of local councils such as my own. We can assure them, as they continue to do so, that they write off their support in inner-city areas. What is important is that they should not write off the inner city areas themselves. They cannot close the door on inner cities in such a way. By their high-handed and arrogant action of removing from the House a scrutiny of expenditure they are not only ignoring the problems and the right of elected representatives to address them, but are slamming the door on the inner cities.

There has been a strange change. Earlier today, I was in Birmingham town hall looking at a portrait of Joseph Chamberlain. He would have spun in his grave to see what the Conservative party is doing by undermining the right of local authorities to determine their own expenditure. It is one of the key rights in democratic procedure that those who are taxed have the right to representation. It should also be the case that those who have the right to representation should be able to determine their own level of local taxation. It is certainly the case that they should not be subject to retrospective legislation without any apparent principle. If there is any principle, the Minister should tell us what it is.

The Government get it wrong time and again. They never get it right. It is time they recognised as much and, with a little humility, offered themselves to further scrutiny by the House in the manner proposed by the amendments.

5.30 pm
Mr. David Clelland (Tyne Bridge)

The most worrying aspect of this part of the Bill is that it implies that further dictatorial powers will be conferred on the Secretary of State. Clause 1(6)(b) refers to any other account specified in respect of the year concerned by the Secretary of State. Such statements can be found throughout the Bill, and, indeed, this Government's history is riddled with such statements, giving more powers over local authorities to the Secretary of State for the Environment. The paragraph does not state what account the Secretary of State will specify and when he will do so. Will it be at the beginning of the financial year or halfway through it? Perhaps the Secretary of State will specify something that should be designated as a special account, and local authorities will have to look at their accounts in retrospect rather than for the following year. There is nothing in the Bill to say how the clause will operate in that respect.

The Bill has continued the Government's tradition of centralising powers and weakening local democracy, under which local people can develop their own services and priorities in the way that they think fit. That tendency is dangerous, and threatens the very basis of our democracy, local government. The system of local government was not imposed on the people by Parliament. It was not invented by Parliament. It developed through history out of necessity, although its structure has been altered from time to time by Parliament. The Bill is only the latest example of how Parliament interferes with local democracy. At no time in history has local government been interfered with more than during the term of office of this Government.

It is not often appreciated that local government is older than Parliament itself. Forms of local government can be traced back to the Anglo-Saxons. If one traces the history of local government, one sees that, in Anglo-Saxon times, a "tunscipe" was developed. That was a small community that governed its own affairs. Around that time the "burghs" also developed. Those have become familiar terms today, although the English language is now different. The "tunscipe" has become the "township", the "burgh" has become the "borough" and the robber baron has become the Secretary of State for the Environment. The desire of and need for local communities to develop their own services in their own way and meet local priorities can be traced back long before the history of the House. Thus it should be looked upon with a little more respect than that which the Government accord it. Different conditions in different parts of the country have emerged, so different priorities are perceived by local communities.

We saw how those differences have developed during yesterday's debate on the north-south divide. My constituency of Tyne Bridge has an unemployment rate of about 28 per cent., and the needs and priorities of such a community will be different from those in constituencies represented by Conservative Members.

Local communities must have a right to develop in their own way, but the clause assumes that the Secretary of State knows better than the local councillors who live among the people in the communities, who make demands of the councillors. The Secretary of State knows better than the local treasurers and finance officers, as well as the Chartered Institute of Public Finance and Accountancy, the local government treasurers' organisation. The Secretary of State and his civil servants are apparently the only people who understand the system. Opposition Members would certainly contest that. It has been evident from the statements made by the Secretary of State himself and his Ministers when discussing the Bill that the right hon. Gentleman and his Ministers, and, indeed, some of their civil servants, do not understand local government finance. Had they understood it, they would not have got into the trouble that they are in today, having to put the law right in retrospect.

The amendments at least give the House of Commons, this elected body, some power to see what the Secretary of State intends to do. They make him accountable to a democratically elected body rather than give him further dictatorial powers.

The Minister for Local Government (Dr. Rhodes Boyson)

We have had a fairly wide-ranging debate on the amendments. I am sorry that the hon. Member for Newham, North-West (Mr. Banks) is not here. He said that the empty Conservative Benches were symptomatic of possible disinterest. I think that it is a vote of confidence, in that my hon. Friends feel that they can visit their constituents knowing, with a sense of total satisfaction, that the Bill is going through the House so well. If they had all poured in and intervened, that would have been a sign that we were in trouble. From time to time it is nice to see people such as my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle), but it is nice to have that total vote of confidence. I am sure that the Opposition Front Bench would like to think the same from time to time, that there was nobody sitting behind them.

The hon. Member for Vauxhall (Mr. Holland) referred to Joseph Chamberlain in the great civic city of Birmingham, and to the history of that city. I do not think that Joseph Chamberlain would have involved himself in creative accountancy, passing bills on to the next generation. That is basically what it is—

Mr. Meadowcroft


Dr. Boyson

We shall now hear the authoritative statement from the hon. Gentleman. As with one chief constable, it may be direct from the other world.

Mr. Meadowcroft

It is only from the history books. The Minister must know that one of the things that was deliberately set up in Birmingham for that purpose was a municipal bank, to finance local authority expenditure and avoid the problem of having to go into the ordinary money market.

Dr. Boyson

I welcome the hon. Gentleman's intervention, which broadens the debate. I must be careful that I am not tempted to go too far to one side or the other, particularly the Left. There is a difference between selling something one that has and then paying for it over 20 years and banking something that one has and having the interest. There is no comparison. I take as an example the mutual funds of the 19th century—[Interruption.] I was linked with a co-operative society—I was a member of its management board before I came to London. That is totally different from selling the furniture. The dividend number was 1723. If anyone returns to that town and puts money into that number, I shall realise that I have the confidence not only of my hon. Friends but of Liberal Members.

I return to the amendment. I sometimes think that Opposition Members are reading into the Bill things that are not there. My right hon. Friend the Secretary of State had the same experience two days ago when we put a Bill together to deal, in a limited fashion, with a particular problem, at the same time as bringing it into line with the rest of the legislation. Wherever possible, we have kept the situation as it was before. As I said on Monday, as far as possible, local authority accounts will be kept in the way in which the majority of the local authorities have kept them instead of having to turn the system upside down.

The amendments seek to subject to some form of parliamentary control or scrutiny the exercise by my right hon. Friend of his powers to make specifications under clauses 1(6), 2(4), 3(5) and 3(7). Given the matters covered by the specifications, that could be contrary to all precedents under the Local Government, Planning and Land Act 1980, and would be an inappropriate use of parliamentary time. Specifications under clause 3(7) on total expenditure marry with the present powers of direction under section 56(8) of the Local Government, Planning and Land Act 1980, and specifications under clause 3(4) and (5) are broadly analogous to those on relevant expenditure under section 54(5) of the 1980 Act. Wherever possible, it is in parallel with the previous legislation.

As the Committee will be aware, we are seeking to amend clause 3, but we are proposing to maintain a power of specification on relevant expenditure. Similar specifications to those under clause 1(6) and clause 2(4) are indeed not to be found in the 1980 Act, as they relate to the rate fund revenue account which is a new concept in statute, but as they relate to detailed accounting matters it is entirely appropriate that they should be treated in the same way as the other specifications.

The reports will be laid before the House for approval. They will be supplementary reports, but we cannot deal with them until the Bill becomes an Act. I remind the Committee that before making any specifications my right hon. Friend must consult such local authority associations as appear to him to be concerned and with any local authority with which consultation appears to him to be desirable. It is true that for the rate support grant reports that are to be made immediately after the passing of the Bill we are seeking to have the consultation requirement waived, but we shall still be open to representations on all specifications. The Bill keeps the question of specifications and their laying before Parliament as before, apart from the fact that we have to hurry on this year because the local authorities need their money on 1 April. I am glad that we are making faster progress today than on Monday. Unless the Bill is passed, the local authorities will have no money for the rate support grant on 1 April. That would cause serious problems for local authorities. For this year, therefore, we have to make special arrangements. Consultation has taken place—

Mr. Straw

Will the hon. Gentleman give way?

Dr. Boyson

No, I shall not give way. I must finish my sentence or I may forget what it is and the Committee will be deprived for ever more of this particular thought. No Government have ever before consulted to such an extent before a rate support grant decision has been taken as have this Government. Two consultation documents have been sent out. Moreover, hon. Members have come to see me and other Ministers.

Mr. Straw

The Minister is suggesting that the powers of specification are relatively small. That may or may not be the case, but will he illustrate the kind of specifications that could be made under clause 9? The Minister has the power both to bring things into account and to take them out of account. What kind of things does the Secretary of State have in mind?

Dr. Boyson

I prefer not to deal with that point now. When we consider clause 9 I shall give illustrations of our intentions. I do not want to wander from one clause to another.

5.45 pm

Any exercise by my right hon. Friend of his power to make specifications will be subject to the requirements of the general and administrative law to act reasonably, and it will be reviewable by the courts. That applies equally to the specifications for future years and intermediate years that are made after the passing of the Bill. It applies also to any specifications in the reports and supplementary reports that we are planning to make immediately after the passing of the Bill. For those reasons, I urge the Committee to reject this set of amendments.

Mr. Straw

This has been an entertaining debate. My hon. Friend the Member for Vauxhall (Mr. Holland) referred to the damage that is being done to his borough by the Government's rate support grant policies, and in an intervention the hon. Member for Mid-Staffordshire (Mr. Heddle) referred to the residence of Members of Parliament. I am pleased to be able to tell my hon. Friends that the hon. Member for Mid-Staffordshire does not live in Lambeth. According to "Dod's Parliamentary Companion", the hon. Gentleman lives at flat 21, 73 St. James's street, London SW1.

Mr. Heddle

During the last six years I have grown to respect the hon. Member for Blackburn (Mr. Straw) for quoting in full anything that he may read out in this place. Will he now tell the Committee precisely what "Dod's Parliamentary Companion" says and not quote selectively from it? Will he read correctly the lines that appear in italics? He had the benefit of a public school education and he then went to a well-known university. He can read. Perhaps he will read those lines in full.

Mr. Straw

I am pleased to be able to tell the hon. Gentleman that I was taught to read some time before I reached the age of 11. I mean to do no injustice to the hon. Gentleman. Therefore, I shall read out the two and a half lines.

The First Deputy Chairman

Order. The Committee has access to "Dod's Parliamentary Companion", if it is interested. However, this exchange shows that my tolerance earlier in the debate was unwise. We ought to return to the amendments.

Mr. Heddle

On a point of order, Mr. Armstrong. The hon. Member for Blackburn (Mr. Straw) was seeking to answer an earlier intervention by me. May I ask you, Mr. Armstrong, to ask the hon. Member for Blackburn to confirm that "Dod's Parliamentary Companion" also says that my address is 14 The Close, Lichfield, which is in the heart of my Mid-Staffordshire constituency?

The First Deputy Chairman

That is now on the record. I think that we ought now to deal with the amendments.

Mr. Straw

The amendments relate to whether the decision of the Secretary of State on specifications should or should not be subject to parliamentary scrutiny. It is conceivable that the wide power under clause 3 might be used to exclude from account the rate income from 14 The Close, Lichfield, Staffordshire, or, indeed, from the Carlton club, which is also referred to in "Dod's Parliamentary Companion". Were that to be the case, the Committee would wish closely to scrutinise that decision.

This is a relatively narrow issue: whether the specifications made by the Secretary of State should be subject to scrutiny in this place. The Minister said that such scrutiny would be contrary to all precedents. I accept that it has not been the practice up to now for such specifications to be discussed in this place under the order-making procedure. However, the Minister accepted that there is no detailed definition of a rate fund revenue account in any previous statute, and the Bill is seeking to put into better order the structure of local government finance that was established in 1980. To some extent we are dealing with a future that had no past. This is a complex matter. The powers given by clause 3 in conjunction with clause 9 can be fairly wide. Clause 3(7) gives the Secretary of State power to specify additions to or subtractions from a council's total expenditure for any year. I shall be glad when we debate clause 3 stand part. I accept that the Minister has had no notice of my next point, but perhaps he could give us examples of where such power might be used.

The Minister asks us to take what he says at face value. However reasonable a Minister may seem to us, seven years' experience of ministerial decisions on local government finance do not lead us to believe that local authorities, especially Labour local authorities, are always treated fairly. Let me he blunt. We are suspicious about the way in which the power could be used and think that there ought to be proper provision for scrutiny by the House.

The Minister's last point was that it would be a wrong use of parliamentary time if the specifications were always subject to parliamentary scrutiny. The amendments provide two ways of scrutinising these matters in the House. The first is by the affirmative resolution procedure and the second by negative resolution. If the Minister had been willing to meet us on this we would have been willing to accept that the negative resolution procedure would be appropriate in most cases. I am sorry that he is not prepared to do that and regret that we must press the amendment to the vote.

Question put, That the amendment be made:—

The Committee divided: Ayes 191, Noes 243.

Division No. 63] [5.44 pm
Abse, Leo Brown, N. (N'c'tle-u-Tyne E)
Adams, Allen (Paisley N) Brown, R. (N'c'tle-u-Tyne N)
Alton, David Bruce, Malcolm
Archer, Rt Hon Peter Buchan, Norman
Ashdown, Paddy Caborn, Richard
Ashley, Rt Hon Jack Callaghan, Rt Hon J.
Ashton, Joe Callaghan, Jim (Heyw'd & M)
Atkinson, N. (Tottenham) Campbell, Ian
Bagier, Gordon A. T. Campbell-Savours, Dale
Banks, Tony (Newham NW) Carter-Jones, Lewis
Barron, Kevin Cartwright, John
Beckett, Mrs Margaret Clark, Dr David (S Shields)
Bell, Stuart Clarke, Thomas
Benn, Rt Hon Tony Clay, Robert
Bennett, A. (Dent'n & Red'sh) Clelland, David Gordon
Bidwell, Sydney Clwyd, Mrs Ann
Blair, Anthony Cocks, Rt Hon M. (Bristol S)
Boyes, Roland Coleman, Donald
Bray, Dr Jeremy Conlan, Bernard
Brown, Gordon (D'f'mline E) Cook, Frank (Stockton North)
Brown, Hugh D. (Provan) Cook, Robin F. (Livingston)
Corbett, Robin Marek, Dr John
Cox, Thomas (Tooting) Marshall, David (Shettleston)
Craigen, J. M. Martin, Michael
Crowther, Stan Mason, Rt Hon Roy
Cunningham, Dr John Maynard, Miss Joan
Dalyell, Tam Meacher, Michael
Davies, Ronald (Caerphilly) Meadowcroft, Michael
Davis, Terry (B'ham, H'ge H'l) Michie, William
Deakins, Eric Mikardo, Ian
Dewar, Donald Millan, Rt Hon Bruce
Dixon, Donald Morris, Rt Hon A. (W'shawe)
Dobson, Frank Morris, Rt Hon J. (Aberavon)
Dormand, Jack Oakes, Rt Hon Gordon
Douglas, Dick O'Brien, William
Dubs, Alfred O'Neill, Martin
Dunwoody, Hon Mrs G. Orme, Rt Hon Stanley
Eadie, Alex Park, George
Eastham, Ken Parry, Robert
Evans, John (St. Helens N) Patchett, Terry
Fatchett, Derek Pavitt, Laurie
Field, Frank (Birkenhead) Pendry, Tom
Fields, T. (L'pool Broad Gn) Pike, Peter
Fisher, Mark Powell, Raymond (Ogmore)
Flannery, Martin Prescott, John
Foot, Rt Hon Michael Radice, Giles
Forrester, John Randall, Stuart
Foster, Derek Raynsford, Nick
Foulkes, George Redmond, Martin
Fraser, J. (Norwood) Rees, Rt Hon M. (Leeds S)
Freeson, Rt Hon Reginald Richardson, Ms Jo
Freud, Clement Roberts, Allan (Bootle)
Garrett, W. E. Robertson, George
George, Bruce Rogers, Allan
Gilbert, Rt Hon Dr John Rooker, J. W.
Godman, Dr Norman Ross, Ernest (Dundee W)
Golding, Mrs Llin Ross, Stephen (Isle of Wight)
Gould, Bryan Rowlands, Ted
Gourlay, Harry Sedgemore, Brian
Hamilton, James (M'well N) Sheerman, Barry
Hardy, Peter Sheldon, Rt Hon R.
Harrison, Rt Hon Walter Shields, Mrs Elizabeth
Haynes, Frank Shore, Rt Hon Peter
Healey, Rt Hon Denis Short, Ms Clare (Ladywood)
Heffer, Eric S. Short, Mrs R.(W'hampt'n NE)
Hogg, N. (C'nauld & Kilsyth) Silkin, Rt Hon J.
Holland, Stuart (Vauxhall) Skinner, Dennis
Home Robertson, John Smith, C. (Isl'ton S & F'bury)
Howell, Rt Hon D. (S'heath) Smith, Rt Hon J. (M'ds E)
Howells, Geraint Soley, Clive
Hughes, Robert (Aberdeen N) Spearing, Nigel
Hughes, Roy (Newport East) Steel, Rt Hon David
Hughes, Sean (Knowsley S) Stewart, Rt Hon D. (W Isles)
Hughes, Simon (Southwark) Stott, Roger
Jenkins, Rt Hon Roy (Hillh'd) Straw, Jack
John, Brynmor Thomas, Dafydd (Merioneth)
Johnston, Sir Russell Thomas, Dr R. (Carmarthen)
Jones, Barry (Alyn & Deeside) Thompson, J. (Wansbeck)
Kaufman, Rt Hon Gerald Thorne, Stan (Preston)
Kennedy, Charles Wainwright, R.
Kinnock, Rt Hon Neil Wallace, James
Kirkwood, Archy Wardell, Gareth (Gower)
Lambie, David Wareing, Robert
Lamond, James Weetch, Ken
Leadbitter, Ted Welsh, Michael
Leighton, Ronald White, James
Lewis, Terence (Worsley) Wigley, Dafydd
Litherland, Robert Williams, Rt Hon A.
Livsey, Richard Wilson, Gordon
Lloyd, Tony (Stretford) Winnick, David
Lofthouse, Geoffrey Woodall, Alec
McCartney, Hugh Wrigglesworth, Ian
McDonald, Dr Oonagh Young, David (Bolton SE)
McGuire, Michael
McKay, Allen (Penistone) Tellers for the Ayes:
McNamara, Kevin Mr. Lawrence Cunliffe and
McTaggart, Robert Mr. John McWilliam.
Madden, Max
Adley, Robert Garel-Jones, Tristan
Aitken, Jonathan Glyn, Dr Alan
Alexander, Richard Goodhart, Sir Philip
Amess, David Goodlad, Alastair
Ancram, Michael Gow, Ian
Ashby, David Gower, Sir Raymond
Atkins, Rt Hon Sir H. Grant, Sir Anthony
Atkins, Robert (South Ribble) Greenway, Harry
Atkinson, David (B'm'th E) Griffiths, Sir Eldon
Baker, Nicholas (Dorset N) Griffiths, Peter (Portsm'th N)
Baldry, Tony Grist, Ian
Banks, Robert (Harrogate) Ground, Patrick
Batiste, Spencer Grylls, Michael
Bellingham, Henry Gummer, Rt Hon John S
Best, Keith Hamilton, Hon A. (Epsom)
Bevan, David Gilroy Hamilton, Neil (Tatton)
Biggs-Davison, Sir John Hampson, Dr Keith
Blackburn, John Hanley, Jeremy
Body, Sir Richard Hargreaves, Kenneth
Bonsor, Sir Nicholas Harris, David
Boscawen, Hon Robert Harvey, Robert
Bottomley, Peter Haselhurst, Alan
Bottomley, Mrs Virginia Havers, Rt Hon Sir Michael
Bowden, A. (Brighton K'to'n) Hawkins, C. (High Peak)
Bowden, Gerald (Dulwich) Hawkins, Sir Paul (N'folk SW)
Boyson, Dr Rhodes Hawksley, Warren
Brandon-Bravo, Martin Hayes, J.
Bright, Graham Hayhoe, Rt Hon Sir Barney
Brinton, Tim Hayward, Robert
Brittan, Rt Hon Leon Heathcoat-Amory, David
Brown, M. (Brigg & Cl'thpes) Heddle, John
Browne, John Henderson, Barry
Buchanan-Smith, Rt Hon A. Hicks, Robert
Buck, Sir Antony Higgins, Rt Hon Terence L.
Bulmer, Esmond Hill, James
Butler, Rt Hon Sir Adam Hind, Kenneth
Butterfill, John Hirst, Michael
Carlisle, John (Luton N) Holland, Sir Philip (Gedling)
Carlisle, Kenneth (Lincoln) Holt, Richard
Cash, William Hordern, Sir Peter
Channon, Rt Hon Paul Howard, Michael
Chope, Christopher Howarth, Gerald (Cannock)
Churchill, W. S. Howell, Rt Hon D. (G'ldford)
Clark, Dr Michael (Rochford) Hubbard-Miles, Peter
Clark, Sir W. (Croydon S) Hunt, John (Ravensbourne)
Clarke, Rt Hon K. (Rushcliffe) Irving, Charles
Cockeram, Eric Jessel, Toby
Colvin, Michael Johnson Smith, Sir Geoffrey
Conway, Derek Jones, Gwilym (Cardiff N)
Coombs, Simon Jones, Robert (Herts W)
Cope, John Jopling, Rt Hon Michael
Corrie, John Joseph, Rt Hon Sir Keith
Couchman, James Kershaw, Sir Anthony
Critchley, Julian King, Roger (B'ham N'field)
Crouch, David King, Rt Hon Tom
Dickens, Geoffrey Knight, Greg (Derby N)
Dicks, Terry Knowles, Michael
Douglas-Hamilton, Lord J. Latham, Michael
Dover, Den Lawrence, Ivan
Edwards, Rt Hon N. (P'broke) Lennox-Boyd, Hon Mark
Eggar, Tim Lester, Jim
Evennett, David Lightbown, David
Eyre, Sir Reginald Lilley, Peter
Fairbairn, Nicholas Lloyd, Sir Ian (Havant)
Fallon, Michael Lloyd, Peter (Fareham)
Farr, Sir John McCrindle, Robert
Favell, Anthony MacKay, Andrew (Berkshire)
Fenner, Dame Peggy MacKay, John (Argyll & Bute)
Fletcher, Sir Alexander Maclean, David John
Fookes, Miss Janet McNair-Wilson, M. (N'bury)
Forman, Nigel McQuarrie, Albert
Forsyth, Michael (Stirling) Malone, Gerald
Forth, Eric Marlow, Antony
Fox, Sir Marcus Mather, Sir Carol
Franks, Cecil Maude, Hon Francis
Fraser, Peter (Angus East) Mawhinney, Dr Brian
Galley, Roy Maxwell-Hyslop, Robin
Gardiner, George (Reigate) Meyer, Sir Anthony
Gardner, Sir Edward (Fylde) Monro, Sir Hector
Montgomery, Sir Fergus Stern, Michael
Moore, Rt Hon John Stevens, Lewis (Nuneaton)
Morris, M. (N'hampton S) Stewart, Allan (Eastwood)
Neale, Gerrard Stewart, Andrew (Sherwood)
Neubert, Michael Stewart, Ian (Hertf'dshire N)
Nicholls, Patrick Stokes, John
Ottaway, Richard Stradling Thomas, Sir John
Pawsey, James Sumberg, David
Peacock, Mrs Elizabeth Tapsell, Sir Peter
Pollock, Alexander Taylor, John (Solihull)
Portillo, Michael Temple-Morris, Peter
Powley, John Terlezki, Stefan
Prior, Rt Hon James Thomas, Rt Hon Peter
Proctor, K. Harvey Thompson, Donald (Calder V)
Raison, Rt Hon Timothy Thompson, Patrick (N'ich N)
Rhys Williams, Sir Brandon Thorne, Neil (Ilford S)
Ridley, Rt Hon Nicholas Thornton, Malcolm
Rifkind, Rt Hon Malcolm Townend, John (Bridlington)
Roberts, Wyn (Conwy) Townsend, Cyril D. (B'heath)
Roe, Mrs Marion Trotter, Neville
Rossi, Sir Hugh Twinn, Dr Ian
Rost, Peter van Straubenzee, Sir W.
Rowe, Andrew Viggers, Peter
Sackville, Hon Thomas Waddington, Rt Hon David
Sainsbury, Hon Timothy Waldegrave, Hon William
Sayeed, Jonathan Walker, Bill (T'side N)
Shaw, Giles (Pudsey) Waller, Gary
Shaw, Sir Michael (Scarb') Ward, John
Shelton, William (Streatham) Wardle, C. (Bexhill)
Shepherd, Richard (Aldridge) Watts, John
Shersby, Michael Wells, Bowen (Hertford)
Silvester, Fred Wells, Sir John (Maidstone)
Sims, Roger Whitfield, John
Skeet, Sir Trevor Wiggin, Jerry
Smith, Tim (Beaconsfield) Wolfson, Mark
Soames, Hon Nicholas Wood, Timothy
Speed, Keith Woodcock, Michael
Speller, Tony Yeo, Tim
Spencer, Derek Young, Sir George (Acton)
Spicer, Jim (Dorset W) Younger, Rt Hon George
Spicer, Michael (S Worcs)
Squire, Robin Tellers for the Noes:
Stanbrook, Ivor Mr. Tony Durant and
Steen, Anthony Mr. Richard Ryder.

Question accordingly negatived.

Mr. John Fraser (Norwood)

I beg to move amendment No. 22, in page 2, line 27, leave out subsection (7).

The First Deputy Chairman

With this it will be convenient to discuss the following amendments: No. 23, in page 2, line 28, leave out 'does not' and insert 'shall'.

No. 24, in page 2, line 32, leave out subsection (8).

No. 25, in page 2, line 33, leave out 'does not' and insert 'shall'.

No. 26, in page 2, line 33, leave out 'unless' and insert 'whether or not'.

6 pm

Mr. Fraser

This set of amendments omits the special provisions which are made for the City of London in the Bill. I am not sure why they are there. I understand that the City of London does not receive any block grant. It is affluent enough to look after itself, as well as other parts of London.

Although it may not be of any practical importance to the City of London, the amendments raise matters of principle that we should explore. They relate to the different views that the Government take about public expenditure. For instance, if a firm spends £25 million upon the professional fees involving a takeover, it is not a matter of concern for the Government because that is private expenditure, with which they do not interfere. However, if a smaller amount of money is spent by a local authority on the provision of blankets or heating for the poor during the inclement weather they do need to interfere. In the same way, the Government are unconcerned that people come and go at salaries which were reported in the paper this morning of between £200,000 and £300,000 per annum. That is of no consequence to the Government because that is private expenditure, but the Government sit heavily on local authorities that employ people to look after those who are poor, deprived and need the assistance of their local authority. That difference of opinion between public and private expenditure illustrates and underlines the difference between the Opposition and the Government.

However, there is an even more bizarre example of that difference of opinion in clause 1. The Government are saying that if any local authority, apart from the City of London, uses special funds the expenditure that is saved by the income from those special funds going into the general rate account should be left out of the account altogether, but that that should not apply to the City of London.

I understand the reason that lies behind that. The City of London is enormously rich because it has accumulated funds over hundreds of years for various special purposes. Once a year, the City of London is good enough to invite Members of Parliament to discuss the way that the City of London is run as a local government unit. The City of London explains to us—I make no complaint about this—that the City's great celebrations and displays of pomp and circumstance do not cost the taxpayer or the ratepayer a penny because of the accumulated funds. The City of London must have approached the Government and asked that their special funds be treated differently from those of any other local authority. The Minister will not disagree that the result of the Bill is that the City of London is treated differently from any other local authority.

How does that work in practice? It means that if the City of London uses special funds—as I believe it does—to have a banquet at the Mansion house or to entertain the Chancellor of the Exchequer, the Prime Minister, a foreign statesman, or a foreign dictator at the Guildhall, as it does by tradition, and if it serves the traditional boeuf en croute or smoked salmon mousse, those matters are not of concern to the Government or matters that should be restrained by any local government legislation, and the City of London should be able to continue with that kind of expenditure untrammelled.

However, if a local authority does not want to provide banquets for foreign statesmen—least of all for the Chancellor of the Exchequer—but does, as its main priority, want to provide a meals on wheels service for the indigent people of its borough, the Government take a different attitude and say that any kind of device that a local authority employs, or any kind of creativity within its accounts, is to be dealt with by the draconian provisions of the Bill.

In the City of London there is a hands-off attitude to expenditure on boeuf en croute or smoked salmon mousse, but meals on wheels for the poor is a different matter. I have heard criticism of the use of race relations advice in Lambeth over the meals-on-wheels service to ensure that moslem constituents are not offended by being sent roast pork in their meals on wheels. That is just as ridiculous an expenditure as providing a seven-course meal for Dr. Hastings Banda.

Let us have another example. The City of London has a bridge fund. The Government do not want to interfere in the expenditure of that bridge fund. Its purpose is to replace London bridge. That expenditure on the rates has, I think, led the City of London to have an expenditure above its target and GREA. It is always top of the league—my hon. Friend the Member for Blackburn (Mr. Straw) says 300 per cent.—in overspending. The Government want to ignore that. But once the bridge is built and people are sleeping beneath the arches of the bridge in winter, if Southwark, on the south side of the river, wants to assist with blankets those people beneath the bridge which was built with City funds, its expenditure will be penalised under the rating system, yet it is only caring for the poor and disadvantaged of the borough.

Another example is expenditure on the Barbican. I enjoy going to the Barbican, when I can find it. I enjoy its theatre and music. I understand that much of that is also provided by special City funds. I make no complaint about the City's contribution to Britain's arts. It subsidises the Royal Shakespeare theatre and Shakespeare said that music soothes the savage breast. But there are a good many savage breasts in other parts of Britain—people who are unemployed, people who have suffered grave discrimination and people who have little chance of getting on in life. Some local authorities want to provide art at a different level for such people. They want to provide music, instruments and tuition for such people. That is lumped on to their general expenditure and can incur the penalties which are visited upon people by the rate support grant system, and that is to be treated entirely differently. One could go on.

My complaint is not about the City of London's expenditure—some of us may be a little envious of its funds—but that the Government do not judge according to need but according to affluence. They say that because the City of London has accumulated moneys, whatever the nature of its expenditure, no matter how flamboyant or extravagant it might appear to the outside world, it is not to be constrained or dealt with in any way at all under Government legislation relating to local government finance. But if, on the other hand, a borough is less affluent than the City of London, if a local government district has great deprivation, poverty and need within its boundaries but it is not an affluent borough, the Government say that borough should be dealt with in an entirely different way.

Therefore, I move the amendment not in any sense of envy or complaint about the City of London's expenditure under these circumstances, but to underline what we regard as a discriminatory attitude between one local authority and another. It is to underline that point of principle that I move the amendment today.

Mr. Tony Banks

I support amendments Nos. 22 to 26 in respect of the City of London.

The City of London already enjoys too many privileges and rights which are not extended to other authorities. I do not see why the City should be treated as an exception yet again in this legislation. I assume that the reasons are as stated by my hon. Friend the Member for Norwood (Mr. Fraser)—that the City has special cash funds and resources that place it in a different position from other local authorities and the Bill therefore seeks to allow the City to continue to enjoy those additional and unique funds and does not want to tax them. That is wrong."/> If the City wants to remain part of Britain's local government structure, it must suffer the same problems and burdens as the rest of local government in terms of interference by the Government. The City should share the misery that all other local authorities now have to suffer as a result of Government legislation.

I have a great deal of respect for the City of London as an institution. I do not want my remarks to be misunderstood or misinterpreted. While I was chairman of the Greater London council I enjoyed a great deal of the hospitality of the City corporation, particularly the Lord Mayor and the sheriffs. It was an amiable period. One tried to reciprocate as best one could, but one could never hope to emulate the City's hospitality. Indeed, no local authority would even attempt to do so because it would be rightly castigated by its ratepayers and the press for a great waste of money. However, it is difficult when one receives the hospitality of the City to know how to respond. One perhaps should not respond by continually attacking it, but when I do, I do so as someone who believes that the City of London has no place within the democratic structure of London's local government and, indeed, local government nationally, although it has a role and a history that one must respect.

6.15 pm
Mr. Allan Roberts

Is it not the case that when a Labour-controlled local authority provides hospitality it is vilified by the media for wasting ratepayers' money, and when a radical Labour local authority gets rid of such things it is attacked for destroying the customs and traditions of the area?

Mr. Banks

What my hon. Friend is adequately demonstrating is that Labour local authorities cannot win. Whatever they do, they will be attacked and vilified by the press, egged on by the Conservative party. We understand the point. That is what offends. In many cases the press and the Conservative party are one and the same thing. However, it still offends what little sense of natural justice a Member of Parliament can maintain after three years in this place.

Effectively, the City of London exists today as an unreformed ancient municipality. It was granted privileges by King John in 1215 and until 1948 it returned its own Member of Parliament. To demonstrate the way in which it is treated as an exception in London—the Bill wants to continue to treat it as an exception—the City retains its own police force. It has its Lord Mayor and a bench of aldermen. Aldermen were abolished elsewhere in local government some years ago, I think by the legislation of 1972. That would not be so bad, but it goes much further than that. Those aldermen—there is a bench of 25—are elected for life. How can the City postulate in any credible fashion that it is a democratic structure when it still has aldermen in it who are elected for life.

It is from the aldermanic bench that the Lord Mayor is elected. Until quite recently, that bench made sure that no women were elected. Although Edwina Coven—a name remarkably like that of a Conservative Member—won elections she could not take her seat because the sexist rules of the City prevented her from doing so. That has now passed, but it took until recent years for that particular rule to be broken down.

I am seeking to demonstrate that the City is continually treated differently from every other local authority in terms of its structure, practices and procedures and now its financial accounting. I really cannot see that this is a defensible position within the context of Government policy towards local government generally or in terms of the specific requirements of the Bill.

The matter has best been summed up by the Herbert commission which sat between 1957 and 1960 and studied the structure of London local government. Indeed, it was the Herbert report which was used as the basis of the London Government Act 1963 which set up the GLC. These words will keep coming back because they are amazing. When the Herbert commission looked at the structure of London local government it said: If we were to be strictly logical we should recommend the amalgamation of the City and Westminster. But logic has its limits and the City lies outside them. That was a Royal Commission saying, in effect, that the City was too powerful and was served by too many vested interests.

That is an amazing statement on the way in which the City has always resisted the logical restructuring of local government and any changes in the way in which the electoral processes of local government are administered.

When we refer to the City of London many foreigners and people from outside London assume that we mean just the greater London area. So that hon. Members are clear about it, I must say that it relates only to the square mile.

In the 19th century a number of Prime Ministers, especially Gladstone, tried to get the City of London to assume responsibility for the whole of the wider London area, but it steadfastly refused to do that. I realise and respect the fact that many Londoners like the City's traditions, especially the Lord Mayor's show. Therefore, it would be unwise of a Labour Government to confront the City head on and say, "Let us abolish the City of London." After all, we have just fought many battles over abolition. That word does not commend itself to Labour Members in respect of local government, and it will not commend itself to us when we are in power.

We must ensure that we are consistent. We have said that we shall look at local government structures and be objective in our assessment. When we are in government we must not abolish the City but incorporate it so that the Court of Common Council could become in effect the equivalent of the Greater London council. Each member on it could stand as an elected member for each of the London parliamentary constituencies. They would then all be democratically elected for a four-year term. The bench of aldermen in the City of London would be abolished, along with a number of other practices.

The Court of Common Council would be made up of the elected representatives from the 92 London constituencies who would elect the Mayor. We would retain the Lord Mayor's show, but he would be the Lord Mayor of Greater London and could speak as the number one citizen of Greater London. That would ultimately fulfill the historic role that Gladstone offered the City in the 19th century.

I remind hon. Members that, although at present the City only covers one square mile, it is the richest of all the local authorities in London. It contributes a massive amount to the other London boroughs and to the equalisation system. We accept that fact. The City of London has benefited disproportionately from the abolition of the Greater London council, especially where new schemes have been set up which are based on a contribution on a per capita basis because it has a farcically low number of electors. The most recent register of electors that I have comprises an electorate of 4,811. There is massive wealth in the hands effectively of an electorate of 4,811.

The City of London's ward lists record an electorate of 14,189 for the 25 wards, of which 4,760 are resident voters and 9,439 non-residents. Those lists are used when electing aldermen and members of the Common Council. The resident electorate is small. Therefore, its demands on the City's services in terms of social services, education or housing are, indeed, minute, hence the fact that the City must contribute so much to the other parts of London. We must bear in mind the fact that the City of London is surrounded by some of the poorest boroughs in London, such as Tower Hamlets and Hackney, to name but two. Hackney is the most deprived local authority area in the whole of England and Tower Hamlets comes third.

Mr. Gerrard Neale (Cornwall, North)

Does the hon. Gentleman accept that, to a large extent, those councils have been the victims of their own problems in that they have been most obstructive to any attempts made to try to improve the rateable values of those areas? The Government have brought forward such areas as the docklands and helped many of the London boroughs to obtain better rateable value in the future.

Mr. Banks

The hon. Gentleman's point leads on to a whole area of argument on the impact on the east end of the docklands area and, especially, its impact on Tower Hamlets. I am delighted to enter that argument if I can stay within order. Whatever additional benefit may come to Tower Hamlets or to Newham through activity by the London Docklands development corporation area, the impact on property prices has been so dramatic as to remove that area from its residents. The traditional residents, the east enders, are effectively being forced out of the east end.

Mr. Allan Roberts

It is true that the Tower Hamlets council, which is now under Liberal control, but even previously when it was Labour controlled, adopted a policy of selling estates to the private sector and encouraged—some Labour Members thought wrongly—the City to move into Tower Hamlets. The council even kept the rates down to encourage that. Tower Hamlets is one of the lowest rated London boroughs. I, as a resident there, am aware of those matters. I do not necessarily agree with those policies, but the council did that, contrary to what the hon. Member for Cornwall, North (Mr. Neale) said.

The First Deputy Chairman of Ways and Means (Sir Paul Dean)

I hope that the hon. Gentleman will not be tempted to stray from the Common Council, which is what the amendment is about.

Mr. Banks

Whenever an hon. Member gets involved in a discussion about the City of London such matters tend to arise. The City of London is a speck of enormous affluence in a great sea of poverty in the east end. It will cause a great deal of controversy as long as it continues to exist, in terms of its peculiar position in relation to local government democracy and the inordinate concentration of wealth that it has at its disposal. The City has for many years resisted attempts to reform it by powerful politicians in this place. They do not come much more powerful than W. E. Gladstone. The City even resisted his attempts to reform its structure and its system. The City can still draw enormous power from within the Conservative party.

I know that the City is proud of saying, "We are totally democratic. We have elections and, after all, we are nonparty political." That is absolute nonsense. The City is the ultimate Tory authority. It has reached a point where the Conservative party so controls everything in the City that it can declare itself to be non-political. The City has effectively made it impossible for anyone other than someone of Conservative politics to gain control in the City.

Before Conservative Members jump up and remind me, I know that there are Labour party Members on the Court of Common Council. But no one who is honest enough to declare himself as a Labour party candidate can get elected. We are discussing the most undemocratic local government institution in the country bar none. The day of the City is fast approaching. A Labour Government will adopt a solution for the City, perhaps broadly along the lines that I described a little earlier.

6.30 pm
Mr. Meadowcroft

If the hon. Gentleman is relying on a future Labour Government, the City is fairly safe.

Mr. Banks

It was not worth giving way to the hon. Gentleman to allow him to make that intervention.

An interesting report was published by the London Labour party in 1974 following the setting up of a working party. It makes extremely interesting reading and the hon. Gentleman might care to exchange notes with his Social Democratic party colleague, the hon. Member for Woolwich (Mr. Cartwright), about some of the things that he was saying at that time about the City, with which I agreed entirely. I hope that he still holds those views, but I do not know what the alliance's policy is on the City of London. I hope that the hon. Member for Woolwich is as forthright today as he was in 1974.

There is no such thing as a free lunch, although this place would believe that it has found the source of all free lunches. Someone has to pay in the end. There is no such thing as a free lunch in the City. Although the City can say that the great civic events that it provides—for example, the Lord Mayor's show and many other services—are paid for out of City cash, the moneys came from somewhere. The moneys are the product of someone's efforts, or were filched from a group of industrious workers in the City of London or thereabouts. The moneys still belong to the public. They cannot be private moneys, and no local authority can say that it has access to private moneys. All local authority resources and finance are public money by definition.

Although the City of London may be able to pay for magnificant banquets at the Mansion house and the Guildhall out of City cash, it is still using public money. If the Government are opposing the amendments because of the existence of City cash, they are wrong to do so. I shall listen with great interest to what the Minister says about the amendments I am supporting.

Dr. Boyson

I was delighted two days ago to see that the hon. Member for Newham, North-West (Mr. Banks) had in his possession a copy of the Sunday Telegraph.

Mr. Tony Banks

I still have it.

Dr. Boyson

A vintage copy. I would not agree necessarily with the line that the hon. Gentleman has advanced. Indeed, I am sure that he would be disappointed if I did. He has referred to the famous free market doctrine that there is no such thing as a free lunch. Day by day I see the improvement of the hon. Gentleman, who is a regular attender of our debates. Milton Friedman's book is on my shelf, and I am sure that by now it is on the hon. Gentleman's shelf. This shows what time in the House of Commons, or advanced age as we approach it, does to us all. The hon. Gentleman has dined at the Guildhall, and I did so last night. I did not realise yesterday that I would be replying to the debate that has taken place on the amendment. I am sure that huge sums would have been paid to enable individuals to hear the speech which I delivered last night. It would seem that I have shared City hospitality with the hon. Gentleman.

I was interested in the remarks of the hon. Member for Bootle (Mr. Roberts) about local authorities maintaining tradition or destroying it. I like tradition. I would never attack a local authority or any other authority for maintaining it. I never agreed—this shows how reactionary I must be—with the destruction of the alderman tradition. Many aldermen carried out useful functions and served in that capacity for a long time. Some authorities, thank goodness, retained aldermen.

I shall not take up all the remarks which have been made about the City. It should be remembered that it brings about £7.5 billion a year into the balance of payments. That is a sum that any Labour Government would be glad of, never mind a Conservative Government. Certainly, any Chancellor of the Exchequer would be glad to have it. About 1 million are employed in the financial services sector, it being the sector that has expanded the most.

It has been accepted that the Common Council of the City of London has a number of unusual funds for historic reasons. It does not act like a normal local authority and it has taken on responsibilities that go wider than those which local authorities normally assume. The purpose of subsections (7) and (8) is to ensure that the revenue expenditure and income do not have to be shown in the rate fund revenue account. If the expenditure and income were shown there, it would have to be taken into account in calculating the Common Council's relevant and total expenditure for rate support grant purposes although it receives no RSG. In existing legislation "relevant expenditure" is defined as all expenditure falling to be defrayed out of the rate fund, and the rate fund is defined in relation to the Common Council in section 54 of the Local Government, Planning and Land Act 1980 as a general rate. Thus under existing legislation only expenditure and income that is defrayed out of the general rate is taken into account for relevant and total expenditure purposes. Subsections (7) and (8) of clause 1 preserve the present position and Opposition Members know that amendments Nos. 22 to 26 would change it. I ask my hon. Friends to resist the amendment and allow the position to be left as it is.

Amendment negatived.

Mr. John Fraser

I beg to move amendment No. 27, in page 2, line 36, leave out `in relation to future years' and add 'only in relation to the financial year 1977–78'.

The Second Deputy Chairman

With this it will be convenient to take the following amendments: No. 28, in page 2, line 36, leave out 'future years' and add 'the year beginning in 1988 and subsequent years'. No. 57, in clause 3, page 3, line 18, leave out 'any future year' and insert 'the year beginning in 1988 and subsequent years'. No. 76, in page 4, line 19, leave out 'any future year' and insert 'the year beginning in 1988 and subsequent years'. No. 186, in schedule 4, page 15, line 39, leave out from 'Schedule' to end of line 45 and insert 'shall have effect in relation to the financial year beginning in 1988 and subsequent financial years'. There is a misprint in amendment No. 27. The financial year should be 1987–88.

Mr. Fraser

I move amendment No. 27 for the purpose of introducing a discussion on the amendments that are grouped with it. I realise that amendment No. 27 contains a misprint.

We are dealing with emergency legislation to deal with a situation which has come to the attention of the Secretary of State relatively recently, and he must act quickly before local authorities make decisions about rating next year. Our initial reaction was to apply a restriction to 1987–88 but not thereafter. When we gave the matter further thought, we came to the conclusion that the clause should be amended with a provision that should apply to 1988 and future years, and I shall tell the Committee why we took that view.

Clause 1 attempts to make considerable alterations in the way in which the rate fund is calculated and there is no disagreement across the Floor of the Chamber about that. The Government wish to control the rate fund much more diligently, including those items that are to be debited and those that are to be credited to the rate fund account. We shall debate this issue at greater length when we come to the Birmingham case and other cases. We know that the Government's proposals fly in the face of the advice that local authorities have received from private auditors, including some of the largest firms of auditors and accountants in the world. They fly in the face of the advice that has been given to Birmingham, for example. We know that the Government are seeking to change the practices which have been authorised, perfectly properly, by district auditors as well as by private accountants. They propose making such fundamental changes in the way in which the rate fund account is calculated that we believe that it is wrong that they should proceed without consultation with those concerned.

I do not think many people would quarrel with the proposition that there is a good deal of probity and integrity among those who deal with local accounts whether they prepare them as part of the staff of the finance department of a local authority, or those who audit those accounts. However, I am not saying that such people should have exclusive wisdom on such matters. The public have a right to know how such accounts are kept.

One should defer the operation of this part of the Bill until 1988. That would allow for a year of consultation between the Government, accountants, auditors and those in local government on how matters should proceed. No doubt there is a measure of agreement about the changes that should be made to the calculation of accounts. If this amendment were passed, there would be about 12 months available to consult the various parties about the changes.

We are not proposing any different practice from that which would be followed if one proposed changing the format of company accounts, corporation tax or any similar fiscal measure. Why should local authorities be treated in this peremptory fashion when those in commerce and industry would be treated with much more consideration? There would also be more consultation with those parties than is proposed with local authorities.

I ask for this amendment to be carried so that there can be adequate consultation. Such consultation would mean that the Government could reach a decision about the proper way in which to conduct local government accounts.

Mr. Meadowcroft

I support the proposal to postpone the introduction of these rules for one financial year.

I sometimes wonder what knowledge Conservative Ministers have about local government processes. It is assumed that the proposed changes can be introduced rapidly. However, local government budgeting processes for the next financial year are well under way. That budgeting commenced in late autumn. The various spending departments have put forward their proposals and they have been considered by the finance and policy committees. The final decisions on budget will be reached shortly. Therefore, it is a devastating thing to suggest that the accounting basis on which a local authority prepares the future year's spending should be changed at this stage.

I hope that Ministers recognise that local government does not cover some small parish council but vast cities and huge counties with complex financial arrangements. It would be very difficult for local government to institute proper budgetary plans if it faced the prospect of the Government altering, in detail, its accounting processes. Any changes would abide in the next financial year. Therefore, it is perfectly logical and reasonable to suggest to the Government that, if they wish to carry the Bill in its present form, they should be sensitive to the needs of local government and avoid imposing new plans at short notice.

Dr. Boyson

The Bill is necessary because the total expenditure definition contained in the Local Government, Planning and Land Act 1980 that we presumed meant one thing turned out to mean no such thing. That is why action had to be taken and quickly. That mistake had put at risk the whole settlement.

The 1980 Act was based upon the recommendations made by the local authority associations but I do not blame those associations. Certain advice came from ministerial advisers within the Department and from the local authorities, but the local authorities were mistaken about the definition.

The purpose of the Bill is to put back the definition exactly to what was presumably meant in 1980 and had been recommended by the associations. If there had not been any doubt about the definitions, this Bill would not he before the House and we would not have the pleasure of one another's company today and on Monday.

Amendment No.27 should refer to 1987–88; there is a misprint in its reference to 1977–78. The amendment would mean that, in the years after 1987–88, we would have no means of calculating relevant or total expenditure and the rate support grant system could not be operated for those years.

The House is aware that we have had to rush through this Bill so that we can validate the methods of distribution of rate support grant to enable local authorities to receive the money from the 1 April without a challenge being put down that could stand in the courts against the basis of that distribution.

6.45 pm

Opposition Members who have been present for the debate will be aware that my—right hon. Friends and I have no love for the present system of local government finance—[Interruption.] We are proposing a Green Paper on the subject. Therefore, will we have the support of the Opposition?

Mr. Straw

Ministers are now saying that they have no love for the present system, as if that system had nothing to do with them. I am glad they have no love for it because it is a mess, but will Ministers have the humility to recognise that they set it up?

Dr. Boyson

Lucky is the man who has never made a mistake in his life. There have been clashes within the Labour party when some consider it has made a wrong decision.

There is a general feeling within the Conservative party that the present system of local government finance is unsatisfactory. That is why we have suggested the move to the community charge, which has met with Labour party opposition, and the centralisation of the business rate. Both suggestions are in the Green Paper. We already have a Bill going through regarding finance in Scotland and a commitment that we shall introduce a similar Bill affecting the English and Welsh rate support grant and how it is distributed. That Bill will be introduced in the near future.

Mr. John Fraser

Next week?

Dr. Boyson

No, not next week but it will be introduced, at the latest, in the first Session of the next Parliament.

Mr. Allan Roberts

Will the Minister undertake that the Government will not abolish rates in Scotland and then seek to introduce the poll tax after the general election? Will they have the full system working before the general election so that people can decide at the ballot box whether they prefer what has been introduced or what the Government have abolished?

Dr. Boyson

If the hon. Gentleman is suggesting—it is an interesting proposition—that we delay the general election for five years to enable us to vote on the working of the poll tax he may well have my support.

Mr. Allan Roberts

The Bill before Parliament will, in theory, abolish the rating system in Scotland and it should be passed before the general election. However, if the general election is called within a certain length of time after the Bill has been passed, the rating system will be abolished but no one will yet have been required to pay the poll tax or community charge. Will the Government delay the general election or speed up the introduction of the payment of the poll tax to apply a true test of which method the electorate prefer?

Dr. Boyson

Given a choice, I would choose to delay the election. That is much more attractive.

Mr. Fraser

I believe that the Minister misunderstood my question. I wanted to know whether we would have another local government finance Bill next week on grant recycling and whether it will run in tandem with this Bill.

Dr. Boyson

I am aware that there is another Bill coming forward. We shall all meet again, of that I am certain, in the House and in Committee upstairs. We can look forward to the same cast and we shall have many performances—not necessarily as many as the Windmill. I cannot pre-empt the Leader of the House or the usual channels to say when that Bill will come forward. I know that there is great zeal on the Labour Benches for that Bill to be introduced, but I must not be distracted any more by interventions from Labour Members.

It is impossible for the systems that we prefer—centralised business rate and community charge—to be brought in before the next general election. That is why we have to introduce this measure, which will validate existing practice. That is what we are doing throughout. Amendments Nos. 25, 57, 76 and 186 would mean that the new provisions will not apply to 1987–88. Amendment No. 27 would mean that we could not make any reports and supplementary reports for 1987–88 using current practices on total and relevant expenditure. The result would be chaos for local government, so I urge hon. Members to reject the amendment.

Amendment negatived.

Question proposed,That the clause, as amended, stand part of the Bill.

Several hon. Members


The Second Deputy Chairman of Ways and Means

I will call hon. Members who are rising. Perhaps I should remind the Committee that it is not in order to cover ground that has already been covered in the debate on the amendments.

Mr. Nigel Spearing (Newham, South)

If I trespass on that ruling, Sir Paul, I am sure you will tell me. I want to refer to exchanges between myself and the Secretary of State in the debate on Monday on the first group of amendments in relation to the powers of the Secretary of State over the courts. I submit, Sir Paul, that any matter covered in that debate which was not satisfactorily concluded because of differences of opinion must, under the rules of the Committee, be in order now. In particular, I draw your attention to the exclusion of clause 6(4) which was considered with the first group of amendments.

On Monday the Secretary of State intervened in my speech and said; I do not know whether the hon. Gentleman was here when I spoke to the amendment, but, even if he was, he does not seem to have heard me. I think that, if he had listened, he would agree that he has the wrong brief."—[Official Report, 19 January 1987; Vol. 108, c. 657.] I went on to make some remarks to which the Secretary of State obviously took exception. I have read the debate several times and I wish to respond to what the Secretary of State said. What I wish to say may overlap some of the points of order that were raised earlier today. I apologise to the Committee for not being here but I was upstairs at the time chairing a Select Committee.

There are three strands to the Bill, as is recognised by everybody—validation of previous practice into statute, further measures in respect of rate limitation, and restriction of court jurisdiction. I have sent a letter to the Secretary of State setting out the points that I am now bringing to the attention of the Committee. The Secretary of State must reply to those points at the end of the debate, at a future date or by letter. I am glad to see the Minister assenting to that.

On the first point, the validation of previous practice in statute, we all agree that that is necessary. In his statement to the House on 16 December, the Secretary of State made it clear that that was what the Bill would be about. He said that it would validate for England and Wales all past decisions involving the use of relevant or total expenditure and allow decisions to be properly taken for the remainder of the present rate support grant system, in line with the practice that has hitherto been adopted."—[Official Report, 16 December 1986; Vol. 107, c. 1051.] I emphasise the last words.

When we came to it, the Secretary of State himself admitted in the debate on Monday that there was an addition to that. He said: I plead guilty, if guilt is involved, in that the Bill goes further than pure validation in regard to rate limitation."—[Official Report, 19 January 1987; Vol. 108, c. 640.] So we have a second element in the Bill which does not just restore the status quo ante but sweeps away the whole area of negotiation and determination which has been embarked on with several local authorities.

The third element, the one where I differ most strongly with the Secretary of State, is on restrictions on court jurisdiction. The Secretary of State says that because court cases are still to be concluded on the basis of the law as it stands, but not after the Bill gets Royal Assent, he thinks that it is necessary, in respect of the measures covered by the validation procedure, to ensure that the determination of the court will be consistent with the law as it will be after the Bill becomes an Act, rather than with the law as it stood when the case was being heard. He seeks to make that change by clause 4(6). That provision needs to be prospective, as well as retrospective, since it will be possible for a judgment to be made before or after Royal Assent. However, it has further consequences. First, it reduces the effective power of the courts over matters that would have been justiciable even if no fault had been found in the legislation. Secondly, it applies to a range of matters in the additional provisions of the Bill. It is the retrospective aspects that are unacceptable.

In respect of the matters to whose addition the Secretary of State pleaded guilty we have prospective jurisdiction as well. I accused the Secretary of State of court-capping in that he was covering not only the cases where hearings are completed but in which no judgment has been made, but future cases. Clause 6(4) applies to clause 7 and to schedule 2 which covers the designated authorities for which complicated formulae are set out. That stems from the additional powers that the Secretary of State requires. Of course, there could be litigation in respect of those.

Determination and notification are very important. In clause 6(4) the Secretary of State rules out anything which will have a contrary effect on such notification and determination. By putting clause 6(4) into the Bill he is saying that his executive power will be without the jurisdiction of the court because the words "contrary effect" do not have an obverse effect but an effect different from the notification and determination by order or by whatever executive means the Secretary of State wishes to use.

The Secretary of State clearly thought that I was wrong in what I said on Monday. I am justifying and showing the Committee where I think he is wrong. In the closing part of that debate a remarkable exchange took place between the Secretary of State and my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith). The Secretary of State had talked about retrospective powers for the courts. I interrupted to remind him that it was to be a matter of prospective executive limitation of the courts as well. In reply he said: Therefore, any concept that there can be a challenge to decisions in the courts is a challenge to Parliament because Parliament will have enacted the legislation and these will be the provisions. My hon. Friend the Member for Islington, South and Finsbury rose immediately and said: Any subsequent challenge to the designation or rate capping of a specific authority would be a challenge not to Parliament but to the exercise by the Secretary of State of general powers that are given to him by this statute and, in part, included in schedule 2, which does not specify individual authorities, except in a number of specific cases. It does not specify actual figures but it specifies formulae that will be subject to a report or an order to be tabled by the Secretary of State giving his administrative decision."—[Official Report, 19 January 1987; Vol. 108, c. 671.] It is therefore clear that the Secretary of State is indeed taking unprecedented executive powers by virtue of clauses 4(6) and 6(4). The Secretary of State does not know what is in his own Bill or he does not know the British constitution or, conceivably, he knows neither.

7 pm

As I understand it—it has not been challenged—the liberty of the subject in this realm depends partly on the separation of the powers of the Executive, the legislature and the judiciary. Once the Executive begins to encroach on powers of judicial determination which are properly those of the judiciary, it is taking the judiciary's powers as well as its own.

I have telescoped somewhat the terms of the letter that I have written to the Secretary of State, but I think that I have incorporated all of its essentials. I hope that the Minister for Local Government will feel able to reply. The Secretary of State is wrong in terms of the constitution. He is wrong to take powers which he must not and should not have if the liberty of the individual and corporate subject is to be protected.

Mr. Meadowcroft

Although it is quite true that the more objectionable clauses which insert wholly new matter into local government finance come later, there are aspects of clause 1 which make it unacceptable. If we were simply making the law what we thought it was, we would accept clause 1, but subsection 6(b) goes way beyond what is required to validate the existing law. It is a catch-all subsection and makes the clause unattractive.

The Government are saying that they made a mistake and that they are determined to get the law right. In so doing, however, they have inserted subsection (6) which means that it will not be possible for local authorities to conduct their business legitimately and properly in terms of their powers and their constitution as corporate bodies.

We object to other aspects of the Bill, but on those grounds we would not want clause 1 to be incorporated into the Bill.

Dr. Boyson

I shall be brief because we have spoken at length on the amendments.

I have listened to the hon. Member for Newham, South (Mr. Spearing). His letter was delivered today, I believe, and I have a copy of it with me. I believe that a reply, which will be with the hon. Member shortly, is being prepared. What he has said is fairly technical, but clause 4 is substantially involved.

Clause 1 requires local authorities to keep for the financial year 1987–88, and in all subsequent financial years, a rate fund revenue account. It provides for certain items of account which must be included in the rate fund revenue account and provides that expenditure and income debited or credited to the accounts that are listed in schedule 1, or to any other account specified by the Secretary of State, should not be debited or credited to the rate fund revenue account.

The rate fund revenue accounts that we are requiring will be similar to, if not the same as, the traditional non-statutory rate fund revenue accounts which authorities have kept until now. As I have said, we shall keep the present system as far as possible.

The rate fund revenue account is fundamental to the method of calculating total and relevant expenditure as laid down in clause 1. I hope that the Committee will accept the clause.

Mr. Straw

My hon. Friend, the Member for Newham, North-East—

Mr. Spearing

Newham, South.

Mr. Frank Dobson (Holborn and St. Pancras)

Keir Hardie's old seat.

Mr. Straw

And also the area where my mother was the headmistress of a school, so I ought to remember it. My hon. Friend the Member for Newham, South (Mr. Spearing) and the hon. Member for Leeds, West (Mr. Meadowcroft) have made our objections to clause 1, and we shall divide the Committee.

Mr. Kenneth Hind (Lancashire, West)

Some of us feel that clause 1 must be part of the Bill. I fully support what my hon. Friend the Minister said.

I referred on Monday to the Audit Commission report on the London boroughs. It speaks of had management and poor industrial relations. There is a need for proper accounting procedures in many Labour-controlled authorities, especially those which have been criticised often in the House, which cover 5.8 million people.

The problems were described in the Evening Standard of 2 December under the heading, "London is going bankrupt." The article said: London is heading for bankruptcy, the head of the local government finance watchdog warned today".

Mr. Tony Banks

Will the hon. Gentleman give way?

Mr. Hind

Poor management and bad control over expenditure are at the root of those comments. The vast majority of local authorities do not need the clear guidelines that are laid down in clause 1.

Mr. Tony Banks

Will the hon. Gentleman give way?

Mr. Hind

Many Labour-controlled authorities need it spelling out. People who expect local authorities to collect and spend money responsibly will respect that point of view.

Housing has been mentioned. Some authorities are not collecting money from their tenants. Liverpool has arrears of £7.5 million.

The Second Deputy Chairman

Order. I am finding it difficult to relate what the hon. Gentleman is saying to clause 1. He must speak to clause 1.

Mr. Hind

I apologise if I have drifted. The structure that clause 1 lays down is badly needed in many local authorities because of their failure simply to collect the rent. In June last year, Southwark had arrears of £24 million.

Mr. Dobson

On a point of order, Sir Paul. The clause does not relate to housing accounts. The hon. Gentleman referred to housing accounts.

The Second Deputy Chairman

Order. I shall give the hon. Member an opportunity to relate his remarks to the clause. I am sure that he will do so.

Mr. Hind

I shall follow your ruling on this matter, Sir Paul. Deferred payments have enabled local authorities to get around the structures of the previous legislation. Again, this needs to be sorted out. We do not wish to saddle our children with burdens caused by the inefficient, poor management of Labour authorities who borrow money today. Money should be properly collected. Lambeth Council has 64,000 unprocessed housing benefit claims, and 923 are more than three years old.

The Second Deputy Chairman

Order. I am sorry to interrupt the hon. Member again. This is not a general debate; it is a clause stand part debate. The hon. Member's remarks must relate directly to clause 1.

Mr. Hind

Proper accounting practices are required. Many local authorities do not follow proper accounting practices. It is necessary to impose them upon them. For that reason, I welcome this clause.

Question put, That the clause, as amended, stand part of the Bill:—

The Committee divided: Ayes 224, Noes 190.

Division No. 64] [7.10 pm
Aitken, Jonathan Brandon-Bravo, Martin
Alexander, Richard Bright, Graham
Amess, David Brinton, Tim
Ancram, Michael Brittan, Rt Hon Leon
Ashby, David Brooke, Hon Peter
Aspinwall, Jack Brown, M. (Brigg & Cl'thpes)
Atkins, Rt Hon Sir H. Browne, John
Atkins, Robert (South Ribble) Bruinvels, Peter
Atkinson, David (B'm'th E) Bryan, Sir Paul
Baker, Rt Hon K. (Mole Vall'y) Buchanan-Smith, Rt Hon A.
Baker, Nicholas (Dorset N) Buck, Sir Antony
Baldry, Tony Budgen, Nick
Banks, Robert (Harrogate) Burt, Alistair
Batiste, Spencer Butcher, John
Bellingham, Henry Butler, Rt Hon Sir Adam
Bendall, Vivian Butterfill, John
Best, Keith Carlisle, John (Luton N)
Bevan, David Gilroy Carlisle, Kenneth (Lincoln)
Biffen, Rt Hon John Cash, William
Blackburn, John Chope, Christopher
Body, Sir Richard Churchill, W. S.
Bonsor, Sir Nicholas Clark, Dr Michael (Rochford)
Boscawen, Hon Robert Colvin, Michael
Bottomley, Peter Coombs, Simon
Bottomley, Mrs Virginia Cope, John
Boyson, Dr Rhodes Corrie, John
Couchman, James Kershaw, Sir Anthony
Critchley, Julian King, Roger (B'ham N'field)
Crouch, David Knight, Greg (Derby N)
Dickens, Geoffrey Knight, Dame Jill (Edgbaston)
Dicks, Terry Latham, Michael
Douglas-Hamilton, Lord J. Lawrence, Ivan
Dover, Den Lester, Jim
du Cann, Rt Hon Sir Edward Lewis, Sir Kenneth (Stamf'd)
Dunn, Robert Lightbown, David
Durant, Tony Lloyd, Sir Ian (Havant)
Edwards, Rt Hon N. (P'broke) Lloyd, Peter (Fareham)
Evennett, David MacKay, Andrew (Berkshire)
Eyre, Sir Reginald Maclean, David John
Fallon, Michael McNair-Wilson, M. (N'bury)
Farr, Sir John McQuarrie, Albert
Favell, Anthony Malone, Gerald
Fenner, Dame Peggy Mates, Michael
Fletcher, Sir Alexander Mather, Sir Carol
Fookes, Miss Janet Maude, Hon Francis
Forman, Nigel Mawhinney, Dr Brian
Forsyth, Michael (Stirling) Meyer, Sir Anthony
Forth, Eric Moore, Rt Hon John
Fox, Sir Marcus Morris, M. (N'hampton S)
Franks, Cecil Norris, Steven
Fraser, Peter (Angus East) Peacock, Mrs Elizabeth
Freeman, Roger Pollock, Alexander
Gale, Roger Portillo, Michael
Galley, Roy Powley, John
Gardiner, George (Reigate) Rifkind, Rt Hon Malcolm
Gardner, Sir Edward (Fylde) Rippon, Rt Hon Geoffrey
Garel-Jones, Tristan Roberts, Wyn (Conwy)
Glyn, Dr Alan Roe, Mrs Marion
Goodhart, Sir Philip Rossi, Sir Hugh
Goodlad, Alastair Rost, Peter
Gow, Ian Sackville, Hon Thomas
Gower, Sir Raymond Sainsbury, Hon Timothy
Grant, Sir Anthony Sayeed, Jonathan
Gregory, Conal Shaw, Giles (Pudsey)
Griffiths, Sir Eldon Shaw, Sir Michael (Scarb')
Griffiths, Peter (Portsm'th N) Shelton, William (Streatham)
Grist, Ian Shepherd, Richard (Aldridge)
Gummer, Rt Hon John S Silvester, Fred
Hamilton, Hon A. (Epsom) Sims, Roger
Hamilton, Neil (Tatton) Skeet, Sir Trevor
Hampson, Dr Keith Smith, Tim (Beaconsfield)
Hanley, Jeremy Soames, Hon Nicholas
Hannam, John Speed, Keith
Hargreaves, Kenneth Speller, Tony
Harris, David Spencer, Derek
Harvey, Robert Spicer, Jim (Dorset W)
Haselhurst, Alan Spicer, Michael (S Worcs)
Havers, Rt Hon Sir Michael Squire, Robin
Hawkins, C. (High Peak) Stanbrook, Ivor
Hawksley, Warren Steen, Anthony
Hayes, J. Stern, Michael
Hayhoe, Rt Hon Sir Barney Stevens, Lewis (Nuneaton)
Hayward, Robert Stewart, Allan (Eastwood)
Heathcoat-Amory, David Stewart, Andrew (Sherwood)
Heddle, John Stewart, Ian (Hertf'dshire N)
Henderson, Barry Stokes, John
Hickmet, Richard Stradling Thomas, Sir John
Hill, James Sumberg, David
Hind, Kenneth Taylor, John (Solihull)
Hirst, Michael Temple-Morris, Peter
Holt, Richard Terlezki, Stefan
Hordern, Sir Peter Thomas, Rt Hon Peter
Howard, Michael Thompson, Donald (Calder V)
Howarth, Alan (Stratf'd-on-A) Thompson, Patrick (N'ich N)
Howarth, Gerald (Cannock) Thorne, Neil (Ilford S)
Howell, Ralph (Norfolk, N) Thornton, Malcolm
Hubbard-Miles, Peter Thurnham, Peter
Hunt, David (Wirral W) Townsend, Cyril D. (B'heath)
Hunt, John (Ravensbourne) Trotter, Neville
Irving, Charles Twinn, Dr Ian
Jessel, Toby van Straubenzee, Sir W.
Johnson Smith, Sir Geoffrey Viggers, Peter
Jones, Gwilym (Cardiff N) Waddington, Rt Hon David
Jones, Robert (Herts W) Wakeham, Rt Hon John
Jopling, Rt Hon Michael Waldegrave, Hon William
Joseph, Rt Hon Sir Keith Walker, Bill (T'side N)
Waller, Gary Yeo, Tim
Ward, John Young, Sir George (Acton)
Wardle, C. (Bexhill) Younger, Rt Hon George
Watts, John
Wells, Bowen (Hertford) Tellers for the Ayes:
Wells, Sir John (Maidstone) Mr. Mark Lennox-Boyd and
Whitfield, John Mr. Richard Ryder.
Woodcock, Michael
Abse, Leo Freeson, Rt Hon Reginald
Adams, Allen (Paisley N) Garrett, W. E.
Alton, David George, Bruce
Anderson, Donald Gilbert, Rt Hon Dr John
Archer, Rt Hon Peter Godman, Dr Norman
Ashdown, Paddy Golding, Mrs Llin
Ashley, Rt Hon Jack Gould, Bryan
Atkinson, N. (Tottenham) Gourlay, Harry
Bagier, Gordon A. T. Hamilton, James (M'well N)
Banks, Tony (Newham NW) Hardy, Peter
Barron, Kevin Harrison, Rt Hon Walter
Beckett, Mrs Margaret Haynes, Frank
Bell, Stuart Healey, Rt Hon Denis
Bennett, A. (Dent'n & Red'sh) Hogg, N. (C'nauld & Kilsyth)
Bidwell, Sydney Holland, Stuart (Vauxhall)
Blair, Anthony Home Robertson, John
Boyes, Roland Howell, Rt Hon D. (S'heath)
Bray, Dr Jeremy Howells, Geraint
Brooke, Hon Peter Hoyle, Douglas
Brown, Gordon (D'f'mline E) Hughes, Robert (Aberdeen N)
Brown, Hugh D. (Provan) Hughes, Roy (Newport East)
Brown, N. (N'c'tle-u-Tyne E) Hughes, Sean (Knowsley S)
Brown, R. (N'c'tle-u-Tyne N) Hughes, Simon (Southwark)
Brown, Ron (E'burgh, Leith) Janner, Hon Greville
Bruce, Malcolm Jenkins, Rt Hon Roy (Hillh'd)
Caborn, Richard John, Brynmor
Callaghan, Jim (Heyw'd & M) Johnston, Sir Russell
Campbell, Ian Jones, Barry (Alyn & Deeside)
Campbell-Savours, Dale Kaufman, Rt Hon Gerald
Carter-Jones, Lewis Kennedy, Charles
Cartwright, John Kinnock, Rt Hon Neil
Clark, Dr David (S Shields) Kirkwood, Archy
Clarke, Thomas Lambie, David
Clay, Robert Lamond, James
Clelland, David Gordon Leadbitter, Ted
Clwyd, Mrs Ann Leighton, Ronald
Cocks, Rt Hon M. (Bristol S) Lewis, Terence (Worsley)
Coleman, Donald Litherland, Robert
Conlan, Bernard Livsey, Richard
Cook, Frank (Stockton North) Lloyd, Tony (Stretford)
Cook, Robin F. (Livingston) Lofthouse, Geoffrey
Corbett, Robin McCartney, Hugh
Cox, Thomas (Tooting) McDonald, Dr Oonagh
Craigen, J M. McGuire, Michael
Crowther, Stan McKay, Allen (Penistone)
Cunningham, Dr John McNamara, Kevin
Dalyell, Tam McTaggart, Robert
Davies, Ronald (Caerphilly) Madden, Max
Davis, Terry (B'ham, H'ge H'l) Mallon, Seamus
Deakins, Eric Marek, Dr John
Dewar, Donald Marshall, David (Shettleston)
Dixon, Donald Martin, Michael
Dobson, Frank Mason, Rt Hon Roy
Dormand, Jack Maynard, Miss Joan
Douglas, Dick Meacher, Michael
Dubs, Alfred Meadowcroft, Michael
Dunwoody, Hon Mrs G. Michie, William
Eadie, Alex Mikardo, Ian
Eastham, Ken Millan, Rt Hon Bruce
Evans, John (St. Helens N) Morris, Rt Hon A. (W'shawe)
Fatchett, Derek Morris, Rt Hon J. (Aberavon)
Field, Frank (Birkenhead) Nellist, David
Fields, T. (L'pool Broad Gn) Oakes, Rt Hon Gordon
Fisher, Mark O'Brien, William
Flannery, Martin O'Neill, Martin
Foot, Rt Hon Michael Orme, Rt Hon Stanley
Forrester, John Park, George
Foster, Derek Parry, Robert
Foulkes, George Patchett, Terry
Fraser, J. (Norwood) Pavitt, Laurie
Pendry, Tom Soley, Clive
Pike, Peter Spearing, Nigel
Powell, Raymond (Ogmore) Steel, Rt Hon David
Prescott, John Stott, Roger
Radice, Giles Strang, Gavin
Randall, Stuart Straw, Jack
Raynsford, Nick Thomas, Dafydd (Merioneth)
Redmond, Martin Thomas, Dr R. (Carmarthen)
Rees, Rt Hon M. (Leeds S) Thompson, J. (Wansbeck)
Richardson, Ms Jo Thorne, Stan (Preston)
Roberts, Allan (Bootle) Torney, Tom
Roberts, Ernest (Hackney N) Wallace, James
Robertson, George Wardell, Gareth (Gower)
Rogers, Allan Wareing, Robert
Rooker, J. W. Weetch, Ken
Ross, Ernest (Dundee W) Welsh, Michael
Rowlands, Ted White, James
Sedgemore, Brian Wigley, Dafydd
Sheerman, Barry Williams, Rt Hon A.
Sheldon, Rt Hon R. Wilson, Gordon
Shields, Mrs Elizabeth Winnick, David
Shore, Rt Hon Peter Woodall, Alec
Short, Ms Clare (Ladywood) Young, David (Bolton SE)
Short, Mrs R. (W'hampt'n NE)
Silkin, Rt Hon J. Tellers for the Noes:
Skinner, Dennis Mr. Lawrence Cunliffe and
Smith, C.(Isl'ton S & F'bury) Mr. John McWilliam.
Smith, Rt Hon J. (M'ds E)

Question accordingly agreed to.

Clause 1, as amended, ordered to stand part of the Bill.

Schedule 1 agreed to.

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