Commons Sitting of 26 January 1987

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  PLYMOUTH CITY COUNCIL BILL [Lords]
  Considered; to be read the Third time.
Oral Answers to Questions
  ENERGY

    Tidal Power
    Mr. Spellerasked the Secretary of State for Energy what major projects his Department is sponsoring on tidal power as an energy source; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): My Department is sponsoring a £5·5 million research programme into United Kingdom tidal resources. It includes £4·2 million of advanced investigations and site explorations on the Severn, jointly funded by the Central Electricity Generating Board and the Severn Tidal Power Group; a £400,000 contribution towards studies of a Mersey barrage; and a programme of supporting studies on environmental issues, construction techniques and the resource available from small sites.
    Mr. Speller: I welcome my hon. Friend's comments about what is being done. Is he aware that when I visited
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    Norway last month with a number of colleagues we observed the Norwegians using British inventions—in this case the oscillating water tower system, which produces extremely economic electricity—which we have rejected? Will the Minister assure the House that if a scheme that was initially overlooked or passed over appeared to be efficient and suitable for our waters he would reconsider it?
    Mr. Hunt: I welcome this opportunity to clarify the position. The Department of Energy's wave energy programme was closed because the unanimous advice of the Department's scientists was that that energy source was unlikely to make a large-scale economic contribution to the United Kingdom electricity supply. The Norwegian experiments do not affect that decision as they are aimed at small-scale supply to remote or isolated communities with favourable coastal conditions. Studies of a similar system have been carried out at Queen's university, Belfast, and further work may be carried out there if it appears to be technically and economically promising.
    Mr. Hayward: My hon. Friend referred to the Severn barrage project, which is currently under consideration, but he did not refer to the time scale. Can he tell us what the time scale is and whether he has had any initial information about the success of those studies?
    Mr. Hunt: There is no doubt that the Severn estuary is one of the largest and most favourable tidal energy sites in the world. Details of the Severn work programme, related studies and procedures for consultation are presently being discussed by the Central Electricity Generating Board, the Severn Tidal Power Group and my Department. I hope that details of those studies will be announced shortly. I have already made it clear that as soon as the programme of works has been clarified I shall place copies in the Library.

    Electricity Supplies (France)
    Mr. Holtasked the Secretary of State for Energy what arrangements have been made for electricity supplies to be provided from France over the next 10 years; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad): The Central Electricity Generating Board has negotiated arrangements with Electricité de France to provide for bulk imports of electricity from France until 26 March 1988. Arrangements beyond that will be subject to commercial negotiation by the two utilities.
    Mr. Holt: I thank my hon. Friend for that answer. Will he bear in mind the recent strikes in France and what contingency plans Her Majesty's Government might have if we relied upon the French for electricity supplies which were then cut off as a result of strikes? Is not the time now right to provide for another coal-fired power unit so that workers in this country will not be denied an electricity supply? Although we should in no way move away from nuclear power as the ultimate source of energy, perhaps in the short term the Government should give serious consideration to the placing of a new order for a coal-fired electricity unit.
    Mr. Goodlad: It is important that the generating board should be able to take advantage of economical methods of electricity generation. Imports through the link will help to keep down electricity supply costs and therefore electricity prices. The link with France is designed for flows in either direction. The generating board stated that its present arrangements provide for a two-year supply up to 25 per cent. cheaper than can be generated, on average, in the United Kingdom. On the other hand, the generating board does not regard the link as firm capacity in planning for its long-term requirements. I know that my hon. Friend has taken a close constituency interest in the possibility of new coal-fired capacity. Proposals for new power stations must come from the electricity supply industry. I understand that the board is considering the possibility of building new coal-fired power stations, but no applications to construct stations have been received, apart from that for Sizewell B.
    Mr. Redmond: Has the Minister considered the impact on the balance of payments deficit?
    Mr. Goodlad: The impact on the balance of payments deficit will obviously depend on how much we buy and how much we sell.
    Sir Trevor Skeet: As my hon. Friend has said that the costs are substantially in favour of France, will he consider laying a third cable across the Channel so that the consumer in the United Kingdom can receive that considerable benefit?
    Mr. Goodlad: I note what my hon. Friend says. Before any further links are considered, the utilities will wish to have further operating experience of the present link.
    Mr. O'Brien: Will the Minister comment upon the assistance given to maintain the supply link to the United Kingdom by the French Government? Will he assure the House that Her Majesty's Government will give the same assistance to protect jobs in the electricity supply industry in this country as well as the coal mining industry? Can we have the same protection here as the French workers?
    Mr. Goodlad: Obviously, the Government are deeply concerned to take every account of employment in both the coal and electricity supply industries.
    Dr. Michael Clark: Bearing in mind that this country was in the forefront of nuclear power development in the
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    late 1950s, will my hon. Friend comment on or perhaps even express disappointment at the fact that this country now produces less than 20 per cent. of its electricity from nuclear sources while France produces more than 60 per cent.? Is that not the reason why, with our more expensive and less plentiful electricity, we are having to import from France?
    Mr. Goodlad: I note my hon. Friend's view.
    Mr. Orme: Will the Minister tell the House what the foreign exchange costs of this venture have been to date? Is he aware that we totally oppose any extension of the Channel link because we believe that we should be able to produce our own generating capacity in Britain?
    Mr. Goodlad: I note the right hon. Gentleman's latter view and its likely impact on electricity consumers, both domestic and industrial, in this country. I shall let him know the exact foreign exchange costs.

    Vehicle Fuel
    Mr. Nicholas Bakerasked the Secretary of State for Energy if it remains Her Majesty's Government's policy to limit the amount of oil consumed as vehicle fuel in the United Kingdom.
    The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith): Our aim is to encourage energy efficiency measures that are cost-effective.
    Mr. Baker: If I am correct in assuming that my right hon. Friend has not made representations to the Home Office that the present speed limit on motorways should be enforced for the sake of oil conservation, will he join me in making representations to the Secretary of State for Transport that the speed limit on motorways should be raised?
    Mr. Buchanan-Smith: My hon. Friend is correct in saying that the matter is the responsibility of my right hon. Friend the Secretary of State for Transport. As I am sure my hon. Friend will acknowledge, many complex considerations and factors are involved. As I understand it, one of my right hon. Friend's main considerations at present is the very important question of road safety.
    Mr. Douglas: When the Minister considers oil consumption, will he give some advice to the consumer, who seems somewhat bemused by the fact that when oil prices fall the advantage is not passed on to him, but when oil prices rise the oil companies take immediate steps to raise prices at the pumps?
    Mr. Buchanan-Smith: As the hon. Gentleman knows, whatever the price, energy conservation measures are worth while. I hope that he pays tribute to the work done by the motor industry in already achieving much better performance of British cars.
    Mr. Chapman: I appreciate the need to encourage energy conservation, particularly in vehicles, but will my right hon. Friend confirm that it will not be at the expense of the Government's programme and commitment to introduce lead-free petrol, even if lead-free petrol is less efficient that leaded petrol in miles per gallon?
    Mr. Buchanan-Smith: The Government are committed to the introduction of lead-free petrol, and differential pricing and duty are a positive encouragement. My right

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    hon. Friend the Chancellor of the Exchequer has announced that he will be saying more about that in the next Budget. More than anything else, that policy underlines the Government's commitment to unleaded petrol.
    Mr. Rowlands: Is the Minister aware that other issues could play a vital part in the whole question of oil supplies? For example, what will happen if the Iranians reach Basra? The hon. Gentleman will know the impact of what happened in 1979. Have the Government considered meeting the Institute of Economic Affairs to discuss that nightmarish possibility, which could have a profound impact on oil supplies and prices?
    Mr. Buchanan-Smith: Thus far, the IEA has not requested any meeting to discuss the fuel efficiency of vehicles in Britain.

    Oil-Fired Power Stations (Conversion)
    5. Mr. Pikeasked the Secretary of State for Energy if, when he next meets the chairman of the Central Electricity Generating Board, he will discuss the conversion of existing oil-fired power stations to coal.
    Mr. Buchanan-Smith: I understand that the board has concluded that conversion of oil-fired power stations to coal would be uneconomic at present.
    Mr. Pike: Should not the Government be encouraging the CEGB to think again in the best energy interests of the nation? Does he appreciate the importance of conversions of power stations such as Padiham in my constituency?
    Mr. Buchanan-Smith: As I hope the hon. Gentleman, and, indeed, the whole House is aware, there has been a considerable narrowing of the differential between oil and coal prices in the past 18 months, which has considerably reinforced the case against conversion. I stress, however, that it is for the CEGB to take a decision on this.
    Mr. Forth: Does my hon. Friend recall that during the miners' strike the miners tried to deny supplies of coal to the power stations and thus electricity to our people, and that reliable, continuous sources of supply were provided by oil? Will he bear that in mind when considering the matter in the future?
    Mr. Buchanan-Smith: I shall, of course, bear that in mind, as any fair-minded citizen would, but the ultimate decision is for the CEGB.
    Mr. Jack Thompson: Bearing in mind the Minister's comments a few moments ago about the economics of conversion from oil to coal, is not one reason for that programme the lack of investment in research and development in new technology in coal-burning power stations?
    Mr. Buchanan-Smith: No, I do not think that that is so. The issue rests on the economic case. Unless we observe the economics of the situation, the consumer and industry suffer and industry, in particular, becomes uncompetitive. Ultimately, those are the considerations that matter.
    Mr. Watts: Will my right hon. Friend bear in mind especially the need to avoid any overdependence on coal and to maintain a diversity of sources of fuel for electricity generation. so that there is no risk of the country being held to ransom by Arthur Scargill and his friends on the Opposition Benches?
    Mr. Buchanan-Smith: Of all the industrial countries in western Europe, the United Kingdom is blessed with the greatest variety of fuel sources, and it is clearly right to take the best advantage that we can of that and avoid over-reliance on any one source.
    Mr. Wilson: Has the Minister seen the report in the Glasgow Herald today that the CEGB is playing ducks and drakes with the Scottish supply system, and that having taken 20 per cent. of Scottish output during the cold weather it has now apparently stopped the imports? Before any decision is made about conversion of power stations, will the Minister look into what is being done to provide for the economic supply and use of power?
    Mr. Buchanan-Smith: One of the benefits of being part of the United Kingdom is the mutual assistance that can be given from time to time on both sides of the Scottish border with England and Wales. The fact that assistance goes one way at one time and the other way at another time does not justify criticising what happens on just one occasion, as the hon. Gentleman often chooses to do.
    Mr. Eadie: Does the Minister agree that as Britain has more coal than oil there will still be coal when oil supplies have been exhausted, so that on economic grounds coal has the advantage? Secondly, as the power station construction industry is hungry for orders, is there not an economic case for giving it orders for conversion to coal because, on economic grounds, the nation and its people would benefit?
    Mr. Buchanan-Smith: The hon. Gentleman's arguments on economics, taken to their conclusion, would simply put up the price of electricity for the consumer. Having listened to some speeches from the Labour Benches in recent weeks, I am sure that Labour Members would not support that. It would also put up the price for industry, making our goods less competitive in the world. I should be interested to know whether that is what the hon. Gentleman is arguing for.

    Renewable Sources of Energy
    Mr. Dickensasked the Secretary of State for Energy what is his estimate of the amounts which his Department will spend in 1986–87 on research and development into renewable sources of energy; how this compares with 1978–79; and if he will make a statement.
    Mr. David Hunt: Expenditure on my Department's programme for research, development and demonstration into renewable sources of energy in 1986–87, including external contributions, is estimated to be £17·25 million compared with expenditure of £3·6 million in 1978–79.
    Mr. Dickens: I congratulate the Department of Energy on those excellent figures, which, to be fair, must represent something like a doubling of investment since the Government came to office. Is my right hon. Friend prepared to involve heavily the private sector in investment into wave, wind and solar power and subterranean heat so that we are sure that resources are put into those areas that are technically and economically sound?
    Mr. Hunt: Yes, my hon. Friend is right. We have sought to maximise contributions from external sources — in particular, the private sector—and over £3 million in the figures that I have announced for 1986–87 is expected to

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    come from such sources, compared with £800,000 last year. More than £100 million has been invested by the Government in renewables research and development since 1979. My hon. Friend is right to stress that no Government have done more than we have to develop the renewable technologies.

    Sizewell
    Mr. Sternasked the Secretary of State for Energy when he expects to announce his decision on the report of the inspector on the proposal by the Central Electricity Generating Board to construct a pressurised water reactor at Sizewell.
    Mr. Buchanan-Smith: In an answer pursuant to a question from my hon. Friend the hon. Member for Wells (Mr. Heathcoat-Amory) on Thursday 22 January, my right hon. Friend the Secretary of State said that he would publish the report today. He has done so and has placed copies both of the full report and of a summary in the Library and Vote Office. My right hon. Friend has asked my right hon. Friend the Leader of the House to arrange a debate before he makes any decision.
    Mr. Stern: I thank my right hon. Friend for his reply. Did he note that during the recent cold snap the CEGB transmitted more electricity than ever before, and that even ignoring that, the demand for electricity is approaching the higher end of the estimates given by the CEGB to the Sizewell inquiry? In view of that, will my right hon. Friend ask my right hon. Friend the Leader of the House to arrange the earliest possible date for the House to consider and accept the main conclusions of the Layfield inquiry?
    Mr. Buchanan-Smith: I note what my hon. Friend says. It is important that we should have a full debate in the House before a decision is taken, and that will be the position.
    Mr. Benn: Is the Minister aware that a decision to purchase an American reactor, which the Americans have not chosen to order for 10 years, is a major political act and the decision should be taken by Parliament and not by the Minister? Secondly, can the right hon. Gentleman give an assurance that there will be no advance spending authorising the PWR, simply because the Layfield report has now been published, pending a decision by Parliament and, preferably, by the electorate, because during the election this issue will be a central matter between the parties?
    Mr. Buchanan-Smith: I simply emphasise what I said a moment ago — that no decision will be taken until Parliament has debated this important issue and that important report.
    Mr. Patrick McNair-Wilson: Is not an early decision essential if we are to avoid large sections of the United Kingdom power construction industry going out of business altogether? In arriving at a decision, will my right hon. Friend bear in mind that Britain has had 30 years of building and working gas-cooled reactors, which are now in place and performing satisfactorily, but that while the PWR may be old technology we have little direct experience, except in military applications, of operating it in Britain, and the sums upon which Sizewell was originally based have now been turned completely upside
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    down? Therefore, will he assure the House that even if the go-ahead is given to Sizewell, he is not shutting the door on further AGR development in the future?
    Mr. Buchanan-Smith: I know that my right hon. Friend, as is his custom, will consider very carefully all the points that are made in the debate.
    Mr. Simon Hughes: Given that the report concludes that there has not yet been sufficient public and political consideration of the regulation of the safety of the nuclear industry, will the Government give two undertakings? First, will they undertake that no decision will be taken before the Nuclear Installations Inspectorate has published its report and the report has been given satisfactory consideration? Secondly, will they ensure that there is sufficient time for the political and public process of consultation to take place on that huge report, especially because on cost and needs grounds the prospect of Sizewell is far less likely to be justified now than ever before?
    Mr. Buchanan-Smith: Obviously, the hon. Gentleman has a number of points that he wishes to make. In those circumstances, I am sure that he welcomes the fact that there will be a full debate on the matter in the House.
    Mr. Campbell-Savours: Would the security arrangements for a pressurised water reactor be any different from those existing at present in Britain's nuclear power stations? Is it true that Mr. R. W. Marshall broke into the Trawsfynydd power station in Wales and that damage could have been done? If such an incident took place in the future, it might turn the British people against nuclear power and some of us do not want that to happen. Can we therefore have assurances about security at power stations?
    Mr. Buchanan-Smith: The hon. Gentleman's question relates to the Sizewell report. We shall have an opportunity to debate that matter and I take note of the hon. Gentleman's points.
    Sir Trevor Skeet: Is my right hon. Friend aware that less than 1 per cent. of average radiation comes from the nuclear industry and that chapter 2 of the Sizewell report provides ample justification for going ahead with the Sizewell PWR programme as the most suitable programme for the United Kingdom?
    Mr. Buchanan-Smith: I commend my hon. Friend for the speed with which he has managed to read what he regards as the relevant parts of the report since its publication. However, in all seriousness, it is important that the recommendations and conclusions are read in the context of the report as a whole. They must be considered together before any conclusions can be reached.
    Mr. Barron: Paragraph 12 of chapter 108 of the Sizewell report refers to safety and states:
    "The examination of safety was not exhausted."
    It continues:
    "many matters were examined only briefly if at all."
    It also states:
    "Furthermore, the design was incomplete and not yet susceptible of a final assessment of its safety."
    I understand the position if that is not the case. If that is the case, following the debate in the House, will it be left in the hands of the Nuclear Installations Inspectorate and

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    the CEGB to make the final decision on safety? Is the Minister satisfied with that, as both those bodies seem to operate in a cloud of secrecy most of the time?
    Mr. Buchanan-Smith: I am sorry that the hon. Gentleman did not take the advice that I gave earlier. I suggest that he takes that advice. Even knowing the assiduity of the hon. Gentleman, I cannot believe that he could have read the whole report in just one hour and 45 minutes.
    Mr. D. E. Thomas: Now that the planning process has reached publication, can the Minister tell the House the Department's intentions for the future CEGB proposals following on from Sizewell and other Magnox sites, including Trawsfynydd in my constituency?
    Mr. Buchanan-Smith: Let us deal with Sizewell first.
    Mr. Haynes: I should have thought that it would be more appropriate for the Secretary of the State to be present to answer such important questions. Bearing in mind that the report has been produced by an inspector by way of consultation, when will other people be consulted about nuclear power?
    Mr. Buchanan-Smith: I would have hoped that the hon. Gentleman would regard himself as one of the representatives of the people. He will have an opportunity to take part in the debate in the House. I am sorry that, from his own mouth, he has said that he feels that he is not able to represent the people properly. If that is his view, it may not be the proper one.
    Mr. Kennedy: Will the Minister and his departmental colleagues resist the temptation, which seems to be with him this afternoon, of suggesting that the acceptability of a balanced provision of energy resources, by nuclear or other means, necessitates acceptance of a report which points to the advisability of constructing a PWR? On the question asked by the right hon. Member for Chesterfield (Mr. Benn), relating to PWR, why does it appear that the Government wish to accept American technology which the Americans do not believe is safe enough for their people?
    Mr. Buchanan-Smith: The hon. Gentleman asks me not to yield to temptation. That is precisely what I have done this afternoon.
    Mr. Orme: May I press the Minister on the question of the debate? He and the House will agree that it is important to have a debate in the country as well as in the House. Can he give us some idea of the Government's thinking on the date for that debate?
    Mr. Buchanan-Smith: I understand fully what the right hon. Gentleman says. It is a matter for the business managers of the House, and I have no doubt that they will have noted what he said.

    District Heating (Basildon)
    Mr. Amessasked the Secretary of State for Energy if he will make a statement on the cost-effectiveness of the district heating systems in Felmores and Langdon Hills in Basildon.
    Mr. David Hunt: The Government recognise the important contribution made by district heating schemes where they are commercially viable. The operation of the
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    two schemes mentioned by my hon. Friend is, however, a matter for the Commission for the New Towns, which is answerable to my right hon. Friend the Secretary of State for the Environment.
    Mr. Amess: Is the Minister aware that many of my constituents in the Felmores and Langdon Hills area, of Basildon are completely dissatisfied with the district heating system, believing it to be expensive and inefficient? In the light of the great success enjoyed by Sid, will my hon. Friend do everything in his power to encourage the Commission for the New Towns to install individual gas-fired central heating?
    Mr. Hunt: I very much regret the problems experienced by my hon. Friend's constituents. I understand that the former New Town Development Corporation asked the Department of the Environment to consider agreeing in principle to the replacement of the Felmores estate district heating system with independent systems for each dwelling. Last summer the Department of the Environment invited the Commission for the New Towns to carry out an analysis of that option and of the alternative of retaining the district heating systems with improvements. That analysis is still awaited.

    Conservation
    Mr. Rowlandsasked the Secretary of State for Energy what proposals he has to expand energy conservation measures for the domestic consumer.
    Mr. David Hunt: As well as supporting the continuing expansion of community insulation projects, which have now insulated more than 300,000 homes, my Department continues actively to promote the cost-effective energy efficiency measures which all householders should take to benefit from reduced fuel bills.
    Mr. Rowlands: Is it not rather an odd way to celebrate Energy Efficiency Year by removing loft insulation grants from millions of householders? Is the Minister aware that more than half our households have inadequte loft insulation, even by current standards? Is he aware that 12·5 million households lack effective draught-proofing and that 10·5 million households lack cavity wall insulation? What new measures will the Government introduce to deal with the backlog?
    Mr. Hunt: The hon. Gentleman is distorting the position. He should be aware that on 19 December my hon. Friend the Minister for Housing, Urban Affairs and Construction announced that he would make available up to a further £1·5 million of resources, which is being distributed to councils in England which had exhausted their present allocations. But with nearly 90 per cent. of accessible roofs in England insulated, the Minister decided to concentrate the scheme's assistance on those who have most difficulty in affording the cost of loft insulation. Therefore, he announced that he would be introducing a new scheme, withdrawing the general grant of 66 per cent., but extending the availability of the more generous 90 per cent. grant to all householders who received housing benefit or supplementary benefit.
    I should have thought that the hon. Gentleman would realise that that change will assist greatly families with low incomes for whom it is most important to gain the maximum possible benefit from the money that they spend on heating their homes.
    Mr. Hannam: Although I congratulate my hon. Friend on the success of the recent neighbourhood energy action week, does he accept that there is anxiety about the delay in the anouncement by my right hon. Friend the Secretary of State for Social Services of a replacement for the single payments scheme? Will he exert pressure on the Secretary of State for the Environment to include draught-proofing in any future home insulation scheme, as that is the best way to help elderly people to overcome problems such as those they experienced in the recent cold spell?
    Mr. Hunt: I shall mention my hon. Friend's comments to my right hon. Friends the Secretaries of State, but the Government have given a clear undertaking to the House that adequate arrangements will be made to enable those important projects to continue after the social security reforms. Opposition Members should realise that the Government's programme of insulating low-income households dwarfs anything that existed when the Labour party was in power.
    Mr. Evans: Is the Minister aware that those involved in the industry regard with disbelief the statement that 90 per cent. of lofts in Britain have been insulated? Will he disclose the figures on which the Government have based that statement? May I add my voice to those who urge that any money that is proposed to be saved on the loft insulation programme should be used to draught-proof the homes of those on social security benefit?
    Mr. Hunt: I repeat what I said, that nearly 90 per cent. of accessible roofs in England are now insulated. It is right to concentrate resources on those who need the greatest help. They are getting the greatest help under this Government.
    Mr. Brandon-Bravo: I know that my hon. Friend is aware of the relative inefficiency of the insulation of most of our homes. To what extent is the Department of Energy co-operating in sharing a common budget with the Department of Employment, the housing department within the Department of the Environment and the Department of Industry, and not leaving the matter only to the poor old DHSS?
    Mr. Hunt: My hon. Friend is absolutely right to stress the fact that Government support for the community insulation project is coming from a range of Government Departments. That support is now worth £30 million a year. We shall continue to intensify it, with 360 of these groups already established, 180 more planned and with a target of more than 500 groups operating by the early part of next year.

    Leicester (Combined Heat and Power Consortium)
    Mr. Peter Bruinvelsasked the Secretary of State for Energy if he will report on the recent visit to Leicester by the Parliamentary Under-Secretary of State, the hon. Member for Wirral, West (Mr. Hunt), to view the presentation by the Leicester combined heat and power consortium.
    Mr. David Hunt: I visited Leicester on Wednesday 21 January. The CHP consortium is to be complimented on producing a very professional report. The key to further development lies in attracting private sector finance, which I know the Leicester consortium is very much aware of, and I hope that it will achieve the potential to take this important project forward.
    Mr. Bruinvels: Having accompanied my hon. Friend to view the combined heat and power consortium at Leicester, may I reinforce what he probably already knows namely, that it is ready and willing to get on with reducing the cost of heating in Leicester, but desperately needs additional help to meet the particularly high cost of rates of this project and any to cope with legislative burden? Not only are 400 jobs guaranteed if the construction goes ahead but there will be substantial savings for all my constituents and those of other hon. Members in Leicester.
    Mr. Hunt: My hon. Friend is right to highlight the fact that Leicester is in the lead. I congratulate him and my hon. and learned Friend the Member for Leicester, South (Mr. Spencer) on the strong support that they have given to the consortium. Following my meeting, I am urgently examining with my right hon. Friend the Secretary of State for the Environment the obstacles that the consortium has identified.
    Mr. Janner: Does the Minister accept that the plans of the consortium have the full support of the council, irrespective of party, and that the council is to be congratulated on the efforts that it has made to back it? Meanwhile, as this will take much time to reach fruition, will the Minister press for help for the people who are in need and suffering from cold, especially during the recent spell, such as the elderly, the pensioners, the disabled, the ill, all of whom are not being looked after by the Government and who will suffer until this plan comes into operation?
    Mr. Hunt: The hon. and learned Gentleman is absolutely right to pay tribute to those who support the consortium, such as my hon. Friends the hon. Member for Leicester, East, (Mr. Bruinvels) and my hon. and learned Friend the Member for Leicester, South, and the local authority. So far as Government help is concerned, it is a fact that this Government have provided record levels of support for the very target groups that the hon. and learned Gentleman mentioned.
    Mr. Spencer: Is my hon. Friend aware that in my constituency we welcome a new source of energy which would lead to a reduction in heating costs and further sharpen the keen competitive edge of Leicester's industry? Will he see that any scheme remains firmly in the sector of private enterprise?
    Mr. Hunt: I thank my hon. and learned Friend. I stress once again that this Government fully support CHP and agree that the key to future development must lie in projects which will attract private sector finance. I hope that Leicester has that potential.

    Geothermal Power
    Mr. Patrick Thompsonasked the Secretary of State for Energy what major projects his Department is sponsoring on geothermal power as an energy source; and if he will make a statement.
    Mr. Buchanan-Smith: My Department is funding a further £6·85 million of research into geothermal energy to determine the cost-effective contribution that hot dry rocks could make in the United Kingdom. This includes a £5·85 million extension to the programme of reservoir investigations by the Camborne school of mines and a further £1 million on supporting studies.
    Mr. Thompson: I thank my right hon. Friend for that renewed commitment by the Government to this alternative energy source. Does he agree that although we must continue to obtain energy from main fuels, including nuclear power, there should be an increasing commitment to alternative power sources, such as energy drawn from hot rocks beneath the earth's crust? Will he acknowledge that that is a good way of proceeding, and will he make further commitments in this direction?
    Mr. Buchanan-Smith: My hon. Friend knows that the Department of Energy has made a major contribution in this instance and has invested about £20 million so far. The quality of the work that is being carried out is establishing the United Kingdom as a world leader in this technology. We are delighted to be able to support it and to see it continue.

  THE ARTS

    Crafts Council
    Mr. Chapmanasked the Minister for the Arts if he will make a statement about the work of the Crafts Council and its funding.
    The Minister for the Arts (Mr. Richard Luce): I fully support the work of the Crafts Council in promoting the wider practice and appreciation of the crafts. I am maintaining its funding broadly in line with inflation.
    Mr. Chapman: Does my right hon. Friend welcome the priority that is given by the Crafts Council to the marketing and design of a wide range of craft products? Will he confirm that this has a beneficial spin-off for a wide range of industry, including exports? Will he bear that in mind sympathetically when he comes to review the continuation of a grant to the Crafts Council?
    Mr. Luce: I much endorse what my hon. Friend has said. The council is doing an excellent job under the leadership of its chairman, Sir Nevil Macready, whose chairmanship has now been renewed. In the increased grant that I gave I was glad to be able specifically to allocate £100,000 to regional development, especially for marketing work, to help craftsmen to market their crafts and objects of art more effectively and to export them more effectively.

    Works of Art (Loans)
    Mr. Heathcoat-Amoryasked the Minister for the Arts whether he plans to encourage lending by the national collections to provincial museums and galleries.
    Mr. Luce: Yes, Sir. Many loans already help to widen access to our national treasures, but I believe we could do more. The Museums and Galleries Commission plans to set up a modest touring exhibition scheme this year. I hope that it will help to stimulate yet further activity.
    Mr. Heathcoat-Amory: I thank my right hon. Friend for his reply. Will he direct his attention to specific national collections such as the Victoria and Albert and the British museums, both of which have large quantities of material in their basements that are seldom seen by the public? Will he persuade them to part with them, or loan them, to provincial museums and galleries? If security and insurance is a problem, perhaps central Government
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    funding should be directed to that area of expenditure rather than to acquiring further materials and pictures that will be seldom seen by the public?
    Mr. Luce: I agree with my hon. Friend that some of our national museums and galleries have a substantial proportion of their treasures in storage—not necessarily locked away—although it should be acknowledged that they rotate the objects of art that they display quite regularly. I believe that it is right to stress the need to encourage further loans of these objects of art to various parts of the country. It is with that in mind that the Government's indemnity scheme does a great deal to facilitate loans to be made to local museums, for example. It is to encourage this prospect that the Museums and Galleries Commission has now established the unit to which I have referred, which is designed to encourage exhibitions throughout the country.
    Mr. Robert Sheldon: I welcome what the Minister has said, but will he go a little further and undertake positively to make funds available to assist with the project that is designed to ensure that some of the basement articles are displayed throughout the country? There are many items in London that would be received with rapture in other parts of the country. Will he go further than he has gone so far?
    Mr. Luce: The commission has earmarked a modest sum especially for the purpose of encouraging that to happen and to link those who want to exhibit objects of art from our national museums and galleries. The right hon. Gentleman should not underestimate that which can be achieved through the Government's indemnity scheme. I am sure he knows that the expense of taking out commercial loans means that the cost of the premium is prohibitive. In my view, the Government's indemnity scheme plays the most prominent part.
    Mr. Freud: Will the Minister encourage the national museums to publish an inventory of what they have in their basements? Such an inventory could be sent to local and provincial galleries. Perhaps the Minister could ask national museums to give advice to the provincial museums in respect of storing and exhibitions.
    Mr. Luce: I shall certainly inquire whether it is possible for the national museums and galleries to provide an inventory. With the gradual introduction of computer services in those museums and galleries it may be possible to do that. I shall certainly let the hon. Gentleman know the results of my inquiries.
    Mr. Fisher: Surely, if the Minister chose, he could give much more determined support for this policy. Does he accept that people in the regions have a right to see, and want to see, the riches of our national collections? Will he consider initiating a national policy to bring together the Musuems Commission, the Arts Council, area museum councils and regional arts associations, which could be funded to co-operate to open the national collections to the whole of the country?
    Mr. Luce: May I first congratulate the hon. Gentleman on becoming Opposition spokesman for the arts. I hope that he finds the position as interesting as I do on this side of the Box. I think that we shall look forward, with interest, to discovering Labour party policy on the arts. I am very glad that he supports the general thrust of the discussion on the question of loans to galleries all over the

    15
    country. It is for the Museum and Galleries Commission to co-ordinate the task nationally, and I shall do whatever I can to support it. The commission is the right body to put forward a national policy, and that is precisely what has been achieved with this new unit.

    Museums and Galleries (Grants)
    Sir David Priceasked the Minister for the Arts if he will seek to ensure that grants made to museums and galleries for the acquisition of artefacts are treated as capital rather than current expenditure.
    Mr. Luce: Funds for national museums and galleries to acquire objects for their collections are voted annually as part of their grant-in-aid. These funds may, however, be carried forward from year to year if institutions wish to use them to accumulate a purchase fund.
    Sir David Price: Will my right hon. Friend accept that the acquisition of a great work of art by a public gallery or museum is not a matter of a one-off piece of expenditure? It is the acquisition by the nation of something that is not only a capital asset but of something which, I hope, adds to the glory of our nation. Will my right hon. Friend suggest to the Treasury that to treat such an acquisition as current expenditure is an act of Treasury frivolity? The purchase should be treated as a capital asset. The entire grant should be considered as a capital matter and not a matter of current cash flow. Will my right hon. Friend explain that to the Treasury?
    Mr. Luce: I appreciate the importance of the question that my hon. Friend has asked, but I must point out that it is possible for the national museums and galleries—indeed, it is possible to negotiate the same deal for the local authority museums and galleries — to accumulate a purchase fund for the acquisition of a work of art and to carry over 100 per cent. of that purchase fund to the following year. That is an important concession on the part of the Treasury.
    We should not lose sight of the fact that there are other ways, in addition to the purchase fund, of purchasing works of art, or indeed preserving those works of art for the nation. For example, we now have the National Heritage Memorial Fund, and this does an important job. There is also the acceptance in lieu scheme, wherein up to £12 million can be drawn upon to help preserve works of art for the nation. The important tax changes of the last Budget have also contributed to preserving works of art in this country.
    Mr. Banks: Perhaps the Minister would consider authorising a lease-back arrangement for the great national collections along the lines of some of the arrangements of local authorities. One can imagine the sort of revenue that that could generate. Has the Minister done anything to try to secure for the nation Van Gogh's painting of sunflowers that is due to come up for auction? Will the Minister make the money available to secure it for the nation? Indeed, will he start thinking about imposing some sort of levy on the obscenely high prices paid for paintings at auctions? Money could be taken from the price of those old masters and perhaps be dedicated to some of our young artists.
    Mr. Luce: There are already well-established good procedures for intervention where it is thought that certain works of art ought to be considered for preservation in this
    16
    country. Those procedures were set up by the Government in 1980 and the National Heritage Memorial Fund helps to fulfil that task. It is for it to make judgments about various works of art. As the hon. Gentleman knows, since the early 1950s there has been in existence the Export Review Committee, which has the job of recommending to me that certain works of art should be stopped from sale abroad until such time as we have tested whether this country is prepared to provide the funds for them.
    Mr. Cormack: Will my right hon. Friend take Treasury Ministers on a tour of some of our national museums and, if they fail to be excited by the beauty of the objects displayed, will he point out just how much money they represent to the country, both in capital value and in the tourist revenue that they generate?
    Mr. Luce: In fairness to my right hon. Friend the Chancellor of the Exchequer, I should point out that he recognised the importance of this when we were able to announce the new acceptance in lieu scheme, which, as I have said, provides an extra £10 million in contingency reserve, on which we can now draw. That is in itself an important acknowledgement by my right hon. Friend of the need to preserve our works of art.

  CIVIL SERVICE

    Secondment
    Dr. Twinnasked the Minister for the Civil Service if he will give the figures for secondment in and out of the Civil Service over the last three years.
    The Minister of State, Privy Council Office (Mr. Richard Luce): Outward secondments increased from 632 in 1983 to 679 in 1985, and inward secondments from 133 to 227. Figures for 1986 are expected to be available in April this year, but the Government are working for a continued expansion in secondments.
    Dr. Twinn: I thank my right hon. Friend for that information. Can he assure us that the Government will do everything that they can to expand the number of incoming secondments to the Civil Service, as the programme brings great benefit to the Civil Service and to industry? Could not the benefits to industry be more widely acknowledged by industry?
    Mr. Luce: I agree with my hon. Friend. As he has seen from the figures, there are fewer inward secondments than outward secondments, and I am anxious to persuade industry and other sectors to lend some of their people to the Civil Service for a period of, say, two years. It does good to the Civil Service and should help it. The more that we can persuade industry, the better, and I shall continue my efforts in that direction.
    Mr. Dickens: Does my right hon. Friend agree that politicians who enter this place having had experience in commerce and industry are perhaps more alert politicians? Is it not healthy that civil servants should be seconded into industry so that they know what the outside world is all about?
    Mr. Luce: I do not know whether my hon. Friend is volunteering for secondment, but I agree that there is great value in officials having experience of the outside world. That two-year period can bring enormous benefits when

    17
    they come back to the Civil Service. That is why I am increasing the target for the number of civil servants who should be seconded outside.

    CPSA (General Secretary)
    Mr. Peter Bruinvelsasked the Minister for the Civil Service when he expects to meet the new general secretary of the Civil and Public Services Association to discuss Civil Service pay and conditions; and if he will make a statement.
    Mr. Luce: I meet the leaders of the non-industrial Civil Service trade unions from time to time, but have no immediate plans to meet Mr. John Ellis. Civil Service pay, in any case, is a matter for my right hon. Friend the Chancellor of the Exchequer.
    Mr. Bruinvels: My right hon. Friend will no doubt join me in congratulating the CPSA and its new leader, John Ellis, on such a decisive election win. Is this not the way that democracy can be seen to be at work, and does it not show that, in true and fair elections, the right people can be elected? When my right hon. Friend next sees Mr. Ellis, will he advise him to pay a visit to the Leicester DHSS office, to ensure that the workers in that office, who are members of the CPSA, are putting my constituents first and putting aside their differences and their past support for Militant?
    Mr. Luce: I am sure that the vast majority of civil servants put service, not only to my hon. Friend's constituents but to the public as a whole, first. Let me endorse what he said. I should like to feel that the House will join me in congratulating the CPSA having conducted a fair and democratic election in which the majority of members participated. I welcome the fact that there was on this occasion a decisive result.
    Mr. Winnick: As the Minister meets leaders of non-industrial trade unions may I ask whether he has recently met the appropriate trade unions in the Civil Service about the fact that it is now three years since the shameful ban was imposed on GCHQ employees belonging to a trade union? As, in a few moments, the Home Secretary will be making as much political capital as he can out of events on Saturday, does not the ban on trade unionists at GCHQ demonstrate beyond any doubt that the Government are the enemy of trade unionism?
    Mr. Luce: The hon. Gentleman is talking absolute nonsense and he knows it. He also knows, and the House will have noted, that while this matter is principally for my right hon. the Foreign Secretary, by declaring this case inadmissible the European Commission on Human Rights has confirmed the Government's view that our actions were fully in accordance with our commitments to human rights.
    Mr. Favell: How successful has my right hon. Friend been in persuading the CPSA and other Civil Service unions to have clerical work done in the north? Banks manage to have typing, for example, done well away from branches because modern communications enable dictation to be carried out over a distance. Is there any point in paying an arm and a leg for a typist in London when the work can be done at half the cost and twice as well in the north?
    Mr. Luce: My hon. Friend has put his finger on an important point. It is perfectly true that it is much more
    18
    expensive to recruit people in the south-east than it is to recruit them in other parts of Britain. He may like to note that over the past seven years there has been a natural progression of 5.000 officials moving outside London because it is thought that it is operationally more efficient to move them to other regions.
    Dr. McDonald: Does the Minister not think that morale in the Civil Service would be much improved if the Government made it plain that they recognise the value of the Civil Service a ad if they sought to re-establish a settled pay system and improve equal opportunities throughout the service?
    Mr. Luce: The hon. Lady's assumption that the morale of the Civil Service is low is wrong. Of course certain parts of the Civil Service are going through particular difficulties, some of them in the scientific field. On Wednesday the Government will launch, for the first time ever, an annual report on the work of the Management and Personnel Office and on the Civil Service as a whole. The hon. Lady will find there a strong tribute to the Civil Service by my right hon. Friend the Prime Minister.
    Mr. Marlow: As the cost of living, the cost of housing, and wage rates, are totally different in different parts of the country, is it not daft that civil servants are paid the same wherever they happen to be outside London? As we have a strong Government, is it not time that some action was taken on this?
    Mr. Luce: Although Civil Service pay is principally a matter for my right hon. Friend the Chancellor of the Exchequer, my hon. Friend may like to note that there has been increased progression towards a more flexible pay system in the Civil Service and that we now have a system of pay additions for those parts of the Civil Service presenting recruitment and retention problems. That is a move in the direction about which my hon. Friend speaks.

  THE ARTS

    VAT
    Mr. Freudasked the Minister for the Arts what representations he has had regarding the effect of removing value added tax on the performing arts; and if he will make a statement.
    The Minister for the Arts (Mr. Richard Luce): I have received a number of representations. In particular, the Society of West End Theatres has advocated the removal of VAT from theatre tickets, and the report compiled last year by the National Campaign for the Arts argued for the zero rating of the arts for VAT purposes. As the House knows, these are primarily matters for my right hon. Friend the Chancellor of the Exchequer.
    Mr. Freud: Although it is the job of his right hon. Friend to look into these matters, will the right hon. Gentleman make it clear to his right hon. Friend that a vast amount of work is done for no purpose other than raising subsidy for the theatre, and that that subsidy is then given to the Exchequer? If he could make that clear to his right hon. Friend, a great amount of work would be saved and much finance could be generated for the live theatre.
    Mr. Luce: Of course I acknowledge that the theatre world and the arts world contribute VAT to the overall

    19
    revenue of the Government. The hon. Gentleman must accept that this policy on indirect taxation is part of the broad strategy of the Government. We want to put greater stress on indirect taxation and seek the reduction of income tax. Against that background one must seek the broadest base for indirect tax, and one must acknowledge that. The best way we can positively help the arts is by of the kinds of changes that we saw in the last Budget, which encouraged individuals and corporations to give more to the arts. This is the time for the arts world to generate support from those sectors.

    South Bank Complex
    Dr. Twinnasked the Minister for the Arts if he will make a statement on progress of revitalising the South Bank arts complex.
    Mr. Luce: The South Bank Board of the Arts Council has made great strides since it took over in April 1986. I
    20
    am confident that the imaginative plans of the board will be increasingly justified by events as they come to fruition in the years ahead.
    Dr. Twinn: Will my right hon. Friend accept the congratulations of Conservative Greater London Members of Parliament who have seen the energetic programme introduced by the committee at the South Bank Centre since it took over from the Greater London council, inheriting a mess when it did so?
    Mr. Luce: I agree with my hon. Friend. The board, under the leadership of Ronnie Grierson, has shown great imagination in planning the longer term future of the South Bank. If we look back to the gloomy prognosis given by so many Opposition members over a year ago, we find the situation is quite different and that the plans for the future of the South Bank are exciting.

Wapping (Disturbances)
3.30 pm
The Secretary of State for the Home Department (Mr. Douglas Hurd): With permission, Mr. Speaker, I will make a statement about the disorder at Wapping on Saturday evening.
I understand from the Commissioner of Police of the Metropolis that the disorder followed a march from central London marking the anniversary of the News International dispute. The police estimate that 12,500 people took part. When the march reached Wapping at 7.15 pm disorder broke out almost immediately. Cordons of police officers in ordinary uniform came under attack with missiles. At about 7.40 pm, a lorry being used by the demonstrators was overturned, and an attempt was made to set it on fire. Disorder then continued for some hours. Missiles were thrown at the police, including rocks, bottles, ball bearings, darts, railings, scaffolding poles and pieces of paving stone. The police used mounted officers, and foot officers in protective equipment, to restore order. I understand that calm was restored by about midnight.
In all, 162 police officers were injured. The injuries included a broken bone in the hand, injuries to the face and legs and concussion. Two officers were detained in hospital overnight. I am glad to say that they have now both been discharged. The police know of 40 members of the public who were injured; there will have been others whose injuries did not come to police attention. I understand that 67 people were arrested, of whom 65 have now been charged with public order and other offences. Fifteen of those 67 people arrested are print workers.
This is the latest in a series of disturbances connected with demonstrations at Wapping. Over the past year, including last Saturday, 572 police officers have been injured, 1,462 people have been arrested, and over 1·2 million police man-hours have been spent. The total additional policing cost up to the end of 1986 is estimated at £5·3 million.
It is clear that some of those attending Saturday's demonstration armed themselves with ferocious weapons intent on violent attacks against the police. No serious attempt was made to stop the lorries leaving the plant, and they were able to do so without significant difficulty.
It also seems clear that the organisers of these demonstrations are unable to prevent violence or to control the activities of all their supporters. They must now, in my view, find some other way of making their point without providing occasions for violence and disorder.
I have conveyed to the Commissioner my full support for the action taken by the Metropolitan police to deal with this disgraceful incident, and my sympathy for the police officers who have been injured. The vicious attack on Saturday evening had nothing to do with peaceful protest or the peaceful furtherance of a dispute within the law. I trust that it will be condemned unreservedly by both sides of the House.
Mr. Gerald Kaufman rose—
Hon. Members: Condemn it.
Mr. Kaufman: The House will want to voice its strongest possible condemnation of all the gratuitious violence at Wapping on Saturday night. The House will
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also wish to send its sympathy to all those who were injured during the ugly events at Wapping, to members of the Metropolitan police, local residents and all those who went to Wapping to avail themselves of their lawful and legitimate right — [Interruption.] — their lawful and legitimate right of peaceful demonstration. That peaceful non-violent demonstration was the objective of the overwhelming majority of those who were present at Wapping is shown by the fact that a highly active police presence found it necessary to arrest 67 people—only one half of 1 per cent. of the 12,500 people who took part.
Is the Home Secretary aware that the events at Wapping highlight three extremely serious problems?[Interruption.] The first is the problem for trade unionists pursuing a just and important grievance when outside elements not involved in the dispute batten on and exploit that grievance for their own sectarian purposes. It is no coincidence that most of those people who were arrested at Wapping on Saturday were neither print workers nor local residents. Brenda Dean of SOGAT '82 and Tony Dubbins of the National Graphical Association have today reiterated to me their absolute dissociation from those outside and alien to the democratic trade union Labour movement who fix themselves like leeches to a cause which they do not assist but actively discredit.
Secondly, there is the problem for the police, who have still not found it possible to work out tactics to deal with potential or actual disorder which protects both the police and innocent demonstrators and bystanders from danger and injury. In view of the seriousness of the situation and conflicting reports of exactly what took place at Wapping, it is essential that there be an urgent and independent public inquiry—
Hon. Members: No!
Mr. Speaker: Order. I warn the House that this is a day when we have a time problem. I must ask the House to hear the right hon. Gentleman in silence.
Mr. Kaufman: That was the party of order.
—that there should be an urgent and independent public inquiry into Saturday's events and the events leading up to Saturday, for which there should be made available all the video and sound recordings made at Wapping by the broadcasting authorities and other organisations, including the police.
Thirdly, we once again see clearly what happens under a Government who have a vested interest — [Hon. Members: "Oh."]—a vested interest in disorder. Any other Government, Conservative as well as Labour, would by now have tried to step in to assist in producing a solution to a dispute which has dragged on for so long.[Interruption.]
The present Government's policies actively foster confrontation. Any other Government would show concern at the serious and damaging way in which the massive and continuing police presence at Wapping is distracting the Metropolitan force from dealing with the 750,000 crimes which are being committed in London, a dilemma to which the Commissioner himself drew attention last Friday. The Prime Minister is perfectly content to mouth catchphrases about law and order—[HON. MEMBERS: "Disgraceful."]. No doubt this will be broadcast and people will hear how Conservative Members behave in what is supposed to be a free Parliament.
The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): We do not like the right hon. Gentleman supporting rioters.
Mr. Kaufman: The hon. Gentleman is so stupid that he is not worth answering.
Mr. Speaker: Order. The shadow Minister is supposed to be asking questions.
Mr. Kaufman: Is the Home Secretary aware that the Prime Minister is perfectly content to mouth catchphrases about law and order while London suffers from its worst ever crime wave and its lowest ever crime clear-up rate? That is the harsh reality that spotlights the difference between this Government's hypocritical slogans and the crime and disorder over which they complacently preside.
Mr. Hurd: I can tell from that that the right hon. Gentleman finds himself in some difficulty. He is right to the extent that several hundred people detached themselves from the much larger procession and were responsible for the violence, but the organisers of the event know perfectly well that violence and violent people would attach themselves to it. There is nothing new about that—t happened in May—so it was deeply unwise to hold and organise a demonstration at that place at that time.
As regards the right hon. Gentleman's request for an inquiry, I would simply say that the background to such events is well known. Some of the events of Saturday night will be investigated by the courts as a result of the charges that have been made. Parliament has laid down the procedures for investigating complaints against the police, including supervision by the independent Police Complaints Authority.
Contrary to what the right hon. Gentleman has said, I have often pointed out in the House over the past year the dangers and damage done to the policing of London because of the diversion of policemen to the Wapping dispute. I would expect that, after a year of ambiguity, the right hon. Gentleman would make it clear whether, in his view, the police are right to be present at Wapping upholding the freedom of those who work there or whether he believes, as do some of his hon. Friends, that they should withdraw and leave the field clear for the thugs whom we saw in action on Saturday night.
Mr. Cranley Onslow: Is my right hon. Friend aware that the whole House will await with interest the answer by the right hon. Member for Manchester, Gorton (Mr. Kaufman) to his challenge? Meanwhile, can my right hon. Friend confirm the press reports that some Opposition Members were present and spoke at that disgraceful riot, including the right hon. Member for Chesterfield (Mr. Benn) and the hon. Member for Bolsover (Mr. Skinner)—[Interruption.]
Mr. Brian Sedgemore: No.
Mr. Onslow: Can my right hon. Friend also confirm that, if those reports were correct, the words that were attributed to those speakers were more likely to inflame the mob than to restrain it?
Mr. Hurd: I believe I am correct in saying that the right hon. Member for Chesterfield (Mr. Benn) was present and that he addressed the meeting. I have no account of what he said or whether he attempted to restrain the violence of those attacking the police.
Dr. David Owen: Although condemnation of the violence should be total and unequivocal, the question has to be posed of what will be done. For a year now, we have seen not peaceful demonstrations in the defence of trade union rights, but a squalid public nuisance. Does the Home Secretary think that political demonstrations should continue to take place in Wapping highway, disrupting the residents' lives for over a year and putting them at risk? Indeed, a young boy recently lost his life on the highway because of this whole affair.
Is it not time that it was clearly stated that that is not in defence of reasonable trade unionism and that such demonstrations should take place in Trafalgar square?
Mr. Hurd: The right hon. Gentleman is elaborating a point that I made. It is not for me to get involved in the merits of the dispute; it is not for the police to get involved in the merits of the dispute. But it is perfectly reasonable that the Home Secretary should, as I have done often over the past months, say that it is wrong and unwise for those organising the dispute to conduct it in such a way that the consequences described by the right hon. Gentleman almost inevitably flow from it.
Sir Eldon Griffiths (Bury St. Edmunds): Since the stated purpose of some of those who went to that demonstration —not the print workers—was specifically to embroil the police in violence and so damage their standing with the public, will my right hon. Friend study some of the literature that is circulated by those people? Is he aware that one leaflet shows how to make a petrol bomb, under the legend: "Pigs today and bacon tomorrow," and that another piece of that literature says:
"We confront, we maim and we kill the police because we hate them. They are the class enemy."
Will not my right hon. Friend beseech Opposition Members who are doing their best to rid the Labour party of that sort of person—
Mr. Dave Nellist: Don't you accuse people—
Sir Eldon Griffiths: Will not my right hon. Friend beseech them to ask—
Mr. Nellist: Withdraw that.
Mr. Speaker: Order.
Mr. Nellist: Withdraw that or repeat it outside.
Mr. Hurd rose—
Sir Eldon Griffiths: Will my right hon. Friend, with the support of the Opposition Front Bench, not beseech local authorities that are financing that sort of literature to stop handing out the ratepayers' money for that purpose?
Mr. Nellist: Withdraw that or prove it outside.
Mr. Hurd: I am sure that my hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) will make available to the authorities any literature that he thinks ought to be investigated, in case it falls foul of the law, but he is right in saying that it is high time for those on the Opposition Benches who are seriously interested in the policing of London to bring to an end the ambiguity to which I have drawn attention.
Mr. Michael Foot: Since it is quite evident that, on this occasion and on previous occasions,

25
the actions that have led to the violence have come not from just one quarter — [HON. MEMBERS: "Oh."] Evidence to that account has been presented to the Home Secretary on numerous occasions. Therefore, if the Home Secretary thinks that his case is so good, why is he so afraid of an independent inquiry, which is what the trade union leaders are asking for?
Mr. Hurd: Partly because, if one has an independent inquiry, one immediately cuts across the ordinary processes of law. I am anxious that those charged with offences on Saturday night or before should face those charges in the courts. I am anxious that any complaints against the police should be handled through the procedures that Parliament has laid down. Both those lines of action, which seem to me right and normal, would be to some extent complicated and frustrated if there was an inquiry—[HON. MEMBERS: "Scarman."] The Scarman inquiry dealt with the whole background. On this occasion it is very well known, though controversial.
The crucial point, which the right hon. Gentleman brought up, is that the conduct of the dispute on the trade union side has attracted around it a cluster of violent people. There is no dispute about that. I urge that those responsible for continuing the dispute find some way of doing so, if they feel that they must, while getting rid of the violent fringe that is causing all the trouble.
Mr. John Wheeler: Does my right hon. Friend not agree that the Labour party cannot have it both ways—that if it pretends to have an interest in crime prevention and good policing in London, it must use its influence to get its people off the streets and into the negotiating room so that our police may go back to policing the streets of London?
Mr. Hurd: I entirely agree with my hon. Friend.
Mr. Peter Shore (Bethnal Green and Stepney): As the Member of Parliament for the area that includes Wapping, may I convey to the Home Secretary my profound and unreserved condemnation of the attacks that were made on the police on Saturday night? But may I equally convey to him my profound concern about the attacks that were made by the police on a number of my constituents who were peacefully demonstrating in the area? I entirely agree with the Home Secretary that individual cases and those who were arrested should be brought to trial, and complaints against the police properly heard, but surely the scale of the events and the important issues that are involved—including the maintenance of law and order in Britain in the 1980s — deserve a full, independent public inquiry and I urge that on the right hon. Gentleman.
Mr. Hurd: What occurred on this occasion—as on previous occasions—is that a peaceful demonstration was transformed by attacks on the police from a minority of those present. Having endured that for some time, the police took action to restore order. Once that action has begun, all kinds of things happen and all kinds of people take all kinds of action. That is what I and the right hon. Gentleman mean when we say individual cases.
I cannot see any purpose in having a general inquiry, because the essence of the matter is not in dispute. The essence of the matter is that an industrial dispute, which has dragged on for month after month, with great harm to the policing of London, is complicated by the presence
26
of violent people. The answer lies in the hands of those who are organising the dispute to conduct the dispute if they have to do so, in a way that disposes of that fringe.
Sir Fergus Montgomery (Altrincham and Sale): Will my right hon. Friend ask the right hon. Member for Manchester, Gorton (Mr. Kaufman) to spell out how people can go on peaceful demonstrations when they are armed with stones, bricks and spears? Will he further say that the organisers of the demonstration, instead of weeping tears on television, should take their share of responsibility because they organised it? Can we have an investigation into what was being said behind the picket lines by people who, I believe, were inciting violence?
Mr. Hurd: If there is evidence of incitement, it has to be examined, but my hon. Friend's main point is entirely right. Several hundred people, a minority of the 12,500 people taking part—this has happened before—were responsible for what happened on Saturday night, and the onus falls on those responsible for these events to make sure they do not organise their affairs so that this happens again and again.
Mr. Ron Leighton: Although the Home Secretary is the one-man police authority for London, does he realise that he knows less about what happened on Saturday night than most people, because he was not there, and that he should listen to the constituency Members of Parliament who live in east London and who were there?
Will he accept it from me that the police behaved with excessive, unlawful, indiscriminate and quite sickening brutality and violence? Does he realise that if he allows the riot squad to continue in that way, they will soon kill somebody? Does he realise that those workers who are involved in an industrial dispute in this country have a perfect and proper right to demonstrate, and will continue to do so until there is a proper negotiated settlement? Finally, does he realise that, as his statement carried no credibility, the only thing that will satisfy the country is a proper independent inquiry to get at the truth?
Mr. Hurd: I have always listened with care to the hon. Gentleman because of his local knowledge, and to the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and other Members with constituency interests in this matter. However, nothing that he has now said will distract the House from the basic facts of what happened on this occasion. [HON. MEMBERS: "You don't know."] There is no direct connection with the industrial dispute, because no attempt was made to intervene with the lorries that were coming out of the plant. It was a demonstration with speeches—that is legitimate, though on this occasion unwise—and it was also an attempt by several hundred people, equipped with ferocious weapons, to attack the police. Justice should take its course against such people, and I hope that that will be as strongly endorsed by the House as I believe it will be by the country.
Mr. Neil Macfarlane (Sutton and Cheam): Does my right hon. Friend consider that the extra-parliamentary activity and winning the streets, which has been advocated by Opposition Members, has now well and truly begun?
Mr. Hurd: I read an account of something similar being said by an hon. Member. I could not really believe that an

27
hon. Member of this House, representing parliamentary democracy, would allow himself to make such a deeply undemocratic and anti-democratic remark.
Mr. Tony Benn (Chesterfield): Is the right hon. Gentleman aware that the many tens of thousands of men, women and children from all over the country who have been to Wapping over the past year will understand perfectly why the Home Secretary does not wish there to be an inquiry? It is because an inquiry would reveal what I and others who have been there could confirm from our own eyes—occasions when there have been savage and brutal baton charges by the police against those who were present, as last Saturday when the legal observer, John Bowden, had his face smashed in by a police baton, when a photographer of a national newspaper was trampled on by a horse, when one of the television units there had its lights smashed deliberately by the police and when the police broke the windows of the bus which has been used as a first-aid station since 3 May. Is the Home Secretary aware that those who were there understand perfectly that the Government need Rupert Murdoch and are giving him free police for the purpose of denying work to those who used to work for him?
Mr. Hurd: I repeat that neither the Home Secretary nor the police have, or should have, any part in deciding whether Mr. Murdoch is right or wrong, or whether SOGAT is right or wrong. That is not the business of the police. The right hon. Gentleman and his right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), have failed either to endorse or repudiate the concept that the police should withdraw from Wapping and allow the thugs to trample on those who are exercising their right to work there.
Mr. Benn: Public inquiry.
Mr. Hurd: The right hon. Gentleman is a former senior Minister and Privy Councillor. He knew perfectly well that violence had for a long time been attached to the dispute and that violent attacks have been made over and over again on the police, yet he went ahead and joined in a meeting—
Mr. Kaufman: Read it out.
Mr. Hurd:at that time and at that place on Saturday night, and that casts serious doubt on his judgment.
Mr. Jeremy Corbyn: Is the Home Secretary aware that I was one of those Members there on Saturday and I was able to observe police officers spraying members of the crowd with red paint in order to identify them for later arrest, that the police were using agents provocateurs in the crowd and that at 9.10 during the evening, when there was complete quiet throughout the crowd, a completely unprovoked dragoon-like charge was mounted by the police straight into that crowd, seriously injuring a number of people? Does not the right hon. Gentleman believe that he should go and witness the scale and ferocity of police violence against innocent, peaceful people protesting against the theft of their jobs by the Murdoch empire?
Mr. Hurd: I hope that the hon. Gentleman will let me have his evidence for the suggestion that the police used red dye.
Mr. Corbyn: Yes.
Mr. Hurd: I understand that a tin of red paint was thrown by a demonstrator.
I have looked carefully into the particular point about the use of mounted police. I do not think that there is any dispute that the trouble started when some of the demonstrators overturned a lorry which they had brought along and tried to set it on fire. That set off the first round of violence. As I understand it, and as I have been informed and believe, despite attempts to clear the area by officers on foot with shields, the police were continuing—this is just after 9 pm—to sustain a high level of injuries. That means that missiles of the kind that I have described were constantly being tossed at them. The efforts by foot police to deal with that, although they continued, were not successful. That is why the decision to use the mounted police was taken. Attempts were made to give a warning of that operation in advance. A loud hailer was used to that effect, but there was so much noise about that that warning did not have full effect. That is the background of continuing missile attacks on the police which led to the decision, which I believe was justifiable, to use the mounted police.
Sir John Biggs-Davison: Since this is not the first time—as my right hon. Friend has said—that violent and brutish outside elements have exploited the troubles at Wapping, will my right hon. Friend tell the House whether the organisers of the march consulted the Commissioner about the routing or the wisdom of the march? In the light of what has happened, will consideration be given to the use of the Public Order Act 1986 to ensure that such opportunities for anarchic violence are not given at Wapping in future?
Mr. Hurd: The police were consulted about the nature of the original procession and the arrangements that should be made. They were consulted by the organisers. The police had no power once the demonstration became static to impose conditions.
Mr. Kaufman: Hear, hear.
Mr. Hurd: I am glad that the right hon. Gentleman is urging me to use the powers that he so strongly opposed in the Public Order Act 1986. He will be glad to hear that preparations for introducing those powers are well advanced and I hope that they will be introduced within the next few weeks.
Mr. Simon Hughes: On behalf of many of my constituents who were at Wapping on Saturday night—[HoN. MEMBERS: "Why?"] Because they have lost their jobs. On behalf of my constituents, may I say that they unreservedly condemn the political activists on the fringe of the demonstration who caused untold and unjustified trouble? However, will the Home Secretary accept that there is a severe crisis of confidence in London over the police tactics? Will he tell the public, who want the police to have the right priorities in catching and dealing with criminals, that massive deployment of personnel at Wapping week after week prevents much of the work that the police would rather be doing—
Mr. Speaker: Briefly, please.
Mr. Simon Hughes: —and that the only way to ensure that that concern is met is through a public inquiry for which many hon. Members have asked. That would ensure that the facts are objectively known.
Mr. Hurd: I heard but found it hard to believe that the demonstration was intended in some way to be a family occasion. It is absolutely amazing that people brought their children on a cold January night to a scene where there had been violence in the past and where there was clearly a risk of violence on this occasion.
Of course the hon. Member for Southwark and Bermondsey (Mr. Hughes) is right: there were approximately 1,000 police officers at Wapping on Saturday night and about 12,500 demonstrators of whom only several hundred were involved in violence. If the hon. Gentleman is seriously suggesting that the police should produce at Wapping either nobody or inadequate numbers of police officers so that they are swamped, I cannot see—
Mr. Simon Hughes indicated dissent.
Mr. Hurd: Well, that is the implication of the hon. Gentleman's remarks and the implication of what the right hon. Member for Gorton has consistently said. That is entirely wrong. The Commissioner has to decide, in the light of the information available to him, how many men he should deploy at Wapping on each occasion. That is his operational decision. That is irrelevant to the question of an inquiry.
Several Hon. Members rose—
Mr. Speaker: Order. We are under a time constraint today. I will allow three more questions from either side of the House, then we must move on.
Mr. Jerry Hayes: Will my right hon. Friend congratulate and give credit where credit is due to the Leader of the Opposition for denouncing the violence on the picket lines and for denouncing the words of his hon. Friend the Member for Bolsover (Mr. Skinner)? Will he tell the Leader of the Opposition in no uncertain terms that, if he was a real leader, he would kick out the scum of his party who are turning the Labour party into a party of mob rule and not law and order?
Mr. Hurd: I certainly think it is time that the Opposition responded to the prompting from this side of the House to renounce and be rid of from their midst the anti-police borough leaders in London, because there is undoubtedly a connection between all these anti-police activities.
Mr. Merlyn Rees: Is the Home Secretary aware that all of us agree with him that the events that we saw on Saturday night and Sunday at Wapping were shameful? Will he also accept that I disagree with him that my right hon. Friend the Member for Chesterfield (Mr. Benn) should not have the right to go down to Wapping and speak—[Interruption.] He has the right to go down there and speak in favour of those who disagree with the actions taken by the newspaper proprietors.
The Home Secretary has said that he will not have an inquiry. Is he aware that there are three points of concern? The first is the allegation from the Home Secretary's hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) that local authorities use ratepayers' money—that was the allegation—to instigate what happened the other night. That should be investigated. Secondly, allegations have been made that it was not the trade unionists who caused the trouble, except perhaps marginally, but people from other organisations. Who are
30
these other organisations?[Interruption.] It is all very well for people to say who they think they are. The allegation has been made and the country should know who they are. Thirdly, an allegation has been made to me that at 9.30 pm something went wrong and a charge was made when it should not have been made. That ought to be investigated as well, and the Home Secretary could report to the House.
Mr. Hurd: Of course I am not challenging the legal right of the right hon. Member for Chesterfield (Mr. Benn). I was very careful not to do that. I was simply saying that his decision on that occasion cast some doubt on his judgment as a former senior Minister and Privy Councillor.
Mr. Benn: I saw it; you did not.
Mr. Hurd: I have dealt with the point raised by my hon. Friend the Member for Bury St. Edmunds and I have nothing to add. As to outsiders, I will simply repeat the only point that I have made in that respect—that, of the 67 people arrested, 15 are print workers.
Mr. Nellist: What unions were the others in?
Mr. Hurd: I have the professions of the others, and they vary widely. As for the rest, the right hon. Member for Chesterfield has not undermined the case that I have made for letting the ordinary processes of law obtain and continue in this case.
Mr. Nicholas Budgen: Does my right hon. Friend agree that if there was a public inquiry it would inevitably be a judicial inquiry and that that would have the grave disadvantage of involving the judiciary in politics and would also inhibit criminal proceedings? On the other hand, criminal proceedings will in the end by decided by juries which give no reasons and cannot become involved in the political debate.
Mr. Hurd: I entirely agree with my hon. Friend.
Mr. Tony Banks: I was at Wapping on Saturday and I am neither a liar nor blind. I can tell the Home Secretary that some stones were thrown at the police early on, and I condemn that. That is not only unlawful; it is very stupid when one is confronting thousands of police officers who are tooled up to the eyebrows. Did the Home Secretary see on television on Saturday night police officers indiscrimately beating with batons people whom they had already arrested? That is unlawful by any measure, and the Home Secretary must say what he will do about the undisciplined actions of those police officers.
Lastly, it is about time that the Government realised that they cannot continue washing their hands of this dispute. The dispute was caused by Rupert Murdoch, who sacked 5,000 workers. He is an American citizen. It is about time the Government intervened in the dispute.
Mr. Hurd: The sequence on Saturday night was familiar. First, the police attempted to contain disorder with ordinary police officers on foot using ordinary equipment. When the attacks on the police continued despite that, police armed with protective gear arid with riot equipment were used.
Mr. Tony Banks: That is not true, Home Secretary. You have been misled.
Mr. Speaker: Order.
Mr. Hurd: Then, after 9 o'clock, in the circumstances that I described in answer to earlier questions, events continued to be out of control because of missile attacks on the police and the decision was made to use the mounted police.
Mr. Benn: You were not there.
Mr. Hurd: On each occasion, I am satisfied that those decisions by the police were justified. If they had not been taken, those whom I have described as, and who the House will agree were, the thugs, would have prevailed. That would have been a bad day for the people of London.
Sir Ian Lloyd (Havant): The Home Secretary will have noticed, that, in her description of the crowd at Wapping, Miss Brenda Dean used the words, "ordinary, decent, normal families". Does he agree that a sad and regrettable gulf is opening between Miss Dean's definition of that term and the understanding of that term in 26 million homes across the length and breadth of the country? Does he agree that, in those 26 million homes, the contempt for the objectives is exceeded only by the contempt for the methods used at Wapping?
Mr. Hurd: My criticism of the trade union leaders is not that they are continuing the dispute, because that is a matter for them, nor that they instigated or took part in the disorder, because they did not. My criticism of them is that, despite the overwhelming weight of advice that they have received, they continue to organise their part in the dispute in such a way as to produce these results. In doing that, they assume a heavy responsibility. I hope that they have now changed their minds and will pursue the dispute, if they must do so, in a way that will remove violence from the scene.
Mr. Robert Litherland: I am sponsored by SOGAT '82, a member of that union and extremely proud of it, and I was at Wapping. I condemn the violence, but I ask the Home Secretary to go to Wapping to see that obscene razor wire curtain that is an affront to all working people. Does he realise that with this whitewash he is seen to support Rupert Murdoch's brutal and violent strategy of confrontation?
Mr. Hurd: The hon. Gentleman leaves out of account the fact that, to use his words, hundreds of decent working people work and wish to continue to work at Wapping. That puts the police in a wholly unenviable position. The right hon. Member for Gorton and his colleagues have not yet answered the point: do they expect the police to continue to protect the right to work of those who are engaged at Wapping or do they believe that those workers should be abandoned?
Mr. Nellist: On a point of order, Mr. Speaker. May I ask you to reflect later on the intervention during those
32
exchanges by the Conservative Member of Parliament for Bury St. Edmunds (Sir E. Griffiths)? After quoting leaflets which he alleged were calling for the death of police on the picket lines, he linked those leaflets to two sources. The first was those members of the Labour party who may or may not be under threat of expulsion—I have been named as part of that group more than once. The second source identified by him and his colleagues is Labour Members in this Chamber.
As the guardian of the rights of Back-Bench Members, Mr. Speaker, will you find out whether the hon. Gentleman should be required tomorrow to withdraw those statements or produce the evidence outside the Chamber?
Mr. Speaker: I am not responsible for what is said. If the hon. Member for Bury St. Edmunds (Sir E. Griffiths) had named an individual Member, that would have been entirely different.
Mr. Tony Favell: On a point of order, Mr. Speaker.
Mr. Speaker: I must warn the hon. Gentleman and the whole House that we have a time restraint today, which makes life difficult for us all, including the hon. Gentleman.
Mr. Favell: On a point of order, Mr. Speaker. Is it not usual for you to allow a Member such as the hon. Member for Bolsover (Mr. Skinner) to catch your eye when his name has been mentioned as often as his was this afternoon?
Mr. Speaker: The hon. Gentleman should not assume my prerogative in these matters. It is a difficult enough job as it is.
Mr. David Harris (St. Ives): Further to that point of order, Mr. Speaker. Does not the remedy lie with a personal statement from the hon. Member for Bolsover (Mr. Skinner)? After all, serious allegations have been made against—
Mr. Speaker: Order. This is a continuation of questions.
Mr. Dennis Skinner rose—
Hon. Members: Hear, hear.
Mr. Skinner: I have no intention of making a personal statement, Mr. Speaker, but I will say this to you: whether I am in Parliament or outside, I shall fight for the working class that sent me here, just as the Tories, including the Home Secretary, fight for their class day in and day out—including all those crooks in the City.

New Statesman and Mr.Duncan Campbell
4.15 pm
Mr. Chris Smith: I beg to ask leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"The searches by special branch at the premises of the New Statesman and the homes of Mr. Duncan Campbell and other journalists following a request by the Attorney-General for the instigation of inquiries."
On Saturday, special branch officers entered the offices of the New Statesman in my constituency and began a comprehensive search of all papers held in those offices. That search continued through Sunday and was added to by a search of the homes of Mr. Duncan Campbell and other journalists. It is continuing. I was present when the offices of the New Statesman were searched and when the home of M r. Duncan Campbell was searched. I hasten to say that I do not criticise the officers of special branch, who conducted their investigation with perfect courtesy and decorum. However, it is the first time that such a search has been mounted against an independent newspaper. It was instigated by a Government who are supposed to believe in the freedom of the press.
Major questions arise that should be discussed in the House. We must ask why the Government are trying to muzzle the press seven months after they first knew that the Zircon film was being made—a case of shutting the stable door months after the horse has bolted. We must ask why, as in the case two years ago of my constituent Clive Ponting, action is being taken under the discredited section 2 of the Official Secrets Act, which the Attorney-General himself has disowned. Why are the Government, far from being concerned about genuine national security considerations, engaged in a public operation to cover up their political embarrassment and interest? Above all, there are questions about the geed to end the absurd secrecy and the paranoia about secrecy which characterises the Government and which should be replaced once and for all by proper, full and thorough freedom of information legislation.
These are issues of immense public concern and interest. The House must debate them urgently.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"The searches by special branch at the premises of the New Statesman and the homes of Mr. Duncan Campbell and other journalists following a request by the Attorney-General for the instigation of inquiries."
I listened with great care to what the hon. Gentleman said, but I regret that I do not consider the matter to be appropriate for discussion under Standing Order No. 20. I cannot, therefore, submit his application to the House.

Personal Statement
4.20 pm
Mr. D. N. Campbell-Savours: I wish to make a personal statement, Mr. Speaker.
On Monday 12 January the hon. Member for Davyhulme (Mr. Churchill), during a point of order to you, Mr. Speaker, alleged that a
"highly regarded member of the Parliamentary press lobby"—
that is to say, Mr. Adam Raphael—
"informed me"—
that is the hon. Gentleman—
"that he had been told by the hon. Gentleman him self"—
that is the hon. Member for Workington—
"that Sir Stephen Hastings and I"—
that is, the hon. Member for Davyhulme—
"had been sent letters by the hon. Gentleman"—
that is myself—
"identifying us."
That was identification of the hon. Gentleman and Sir Stephen Hastings as persons who
"had engaged in a conspiracy with officers of MI5 to bring about the downfall of Her Majesty's Government by unconstitutional means"—[Official Report, 12 January 1987; Vol. 108, c. 34.]
If the allegation that I had disclosed this matter to the journalist was true, it would mean that I had broken a solemn undertaking given to the House on Monday 15 December when I said:
"I do not intend to name the Members of Parliament
involved."—[Official Report, 15 December 1986; Vol. 107, c. 7831.]
In the circumstances, I wish to inform the House what happened. On Saturday 13 December, Grania Forbes, a political journalist on the News of the World, acquired a copy of the first edition of The Observer. She has stated that, during the course of the evening, at about 8 o'clock, she was informed, on a confidential basis by a senior Conservative politician, that the hon. Member and the former hon. Member referred to could be the hon. Member for Davyhulme and Sir Stephen Hastings, and that she then telephoned the hon. Member and put the allegation to him. That was two days before I spoke in the debate in the House. The story was therefore already known in Fleet street before I spoke.
On 15 December, I gave the undertaking not to divulge the names of the Members concerned. On Thursday 18 December, three days after that debate, the attention of Mr. Adam Raphael was drawn to an article in Tribune which identified the two Conservative politicians, by name, as agreeing that they had received material concerning allegations of plots against the Wilson Government.
It should be said that Mr. Raphael had also spoken to Grania Forbes, who told him that she had spoken to the hon. Member for Davyhulme. Adam Raphael then approached the hon. Gentleman to ask him about the allegations and ascertain whether he had received a letter from me. The hon. Gentleman agreed that he had received a letter from me and showed him his reply to me.
I make this statement, Mr. Speaker, to demonstrate that I have kept the undertaking that I gave to the House on 15 December that I would not identify the Members concerned and, furthermore, have not disclosed the names of the hon. Member for Davyhulme or Sir Stephen Hastings to Adam Raphael.
Mr. Churchill: I recognise that I cannot in any way contest what the hon. Member for Workington (Mr. Campbell-Savours) says in a personal statement, and it would not be my wish so to do. I wish to say that I was misquoted from Hansard. I did not make mention of Mr. Adam Raphael: it was the hon. Gentleman who made that reference. I ask you, Mr. Speaker, whether it would be in order now for the hon. Gentleman to withdraw the false and malicious accusations that he made against Sir Stephen Hastings and myself on 15 December, for which he has produced not one shred of evidence.
Mr. Speaker: Order. The hon. Member for Workington (Mr. Campbell-Savours) has made a personal statement which has been cleared by me. I take note of what the hon. Member for Davyhulme (Mr. Churchill) has said.

Local Government Finance Bill (Allocation of Time)
4.24 pm
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,
That the following provisions shall apply to the remaining proceedings on the Bill:
Committee, Report and Third Reading
1.—(1) The remaining proceedings in Committee on the Bill and the proceedings on consideration and Third Reading of the Bill shall be completed in one allotted day and shall be brought to a conclusion at midnight on that day.
(2) Standing Order No. 80 (Business Committee) shall not apply to this Order.
Proceedings on going into Committee
2. When the Order of the Day is read for the House to resolve itself into a Committee on the Bill, Mr. Speaker shall leave the Chair without putting any Question, whether or not notice of an Instruction has been given.
Conclusion of proceedings in Committee
3. On the conclusion of the proceedings in Committee on the Bill the Chairman shall report the Bill to the House without putting any Question, and the House shall proceed to consider the Bill, as amended, without any Question being put.
Order of proceedings
4. No Motion shall be made to alter the order in which proceedings in Committee or on consideration of the Bill are taken.
Dilatory Motions
5. No dilatory Motion with respect to, or in the course of, proceedings on the Bill shall be made on the alloted day except by a member of the Government, and the Question on any such Motion shall be put forthwith.
Extra time
6. —(1) On the allotted day paragraph (1) of Standing Order No. 14 (Exempted business) shall apply to the proceedings on the Bill for two hours after Ten o'clock.
(2)Any period during which proceedings on the Bill may be proceeded with after Ten o'clock under paragraph (7) of Standing Order No. 20 (Adjournment on specific and important matter that should have urgent consideration) shall be in addition to the said period of two hours.
(3) If the allotted day is one to which a Motion for the Adjournment of the House under Standing Order No. 20 stands over from an earlier day, a period of time equal to the duration of the proceedings upon that Motion shall be added to the said period of two hours.
Private business
7. Any private business which has been set down for consideration at Seven o'clock on the allotted day shall, instead of being considered as provided by Standing Orders, he considered at the conclusion of the proceedings on the Bill on that day, and paragraph (1) of Standing Order No. 14 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the conclusion of those proceedings.
Conclusion of proceedings
8.—(1) For the purpose of bringing to a conclusion any proceedings which are to be brought to a conclusion at a time appointed by this Order and which have not previously been brought to a conclusion, the Chairman or Mr. Speaker shall forthwith put the following Questions (but no others):

(a) any Question already proposed from the Chair;

(b) any Question necessary to bring to a decision a Question so proposed (including in the case of a new Clause or new Schedule which has been read a second time, the Question that the Clause or Schedule be added to the Bill);

(c) the Question on any amendment or Motion standing on the Order Paper in the name of any Memberm, if that amendment or Motion is moved by a member of the Government;

(d) any other Question necessary for the disposal of the business to be concluded;

37
and on a Motion so made for a new Clause or a new Schedule, the Chairman or Mr. Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(2) Proceedings under sub-paragraph (1) above shall not he interrupted under any Standing Order relating to the sittings of the House.
(3) If the allotted day is one on which a Motion for the Adjournment of the House under Standing Order No. 20 (Adjournment on specific and important matter that should have urgent consideration) stands over to Seven o'clock, the bringing to a conclusion of any proceedings on the Bill which, under this Order, are to be brought to a conclusion after that time shall be postponed for a period equal to the duration of the proceedings on that Motion.
(4) If the allotted day is one to which a Motion for the Adjournment of the House under Standing Order No. 20 stands over from an earlier day, the bringing to a conclusion of any proceedings on the Bill which, under this Order, are to be brought to a conclusion on that day shall be postponed for a period equal to the duration of the proceedings on that Motion.
Supplemental orders
9. —(1) The proceedings on any Motion made in the House by a member of the Government for varying or supplementing the provisions of this Order shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced, and paragraph (1) of Standing Order No. 14 (Exempted business) shall apply to the proceedings.
(2) If on the alloted day the House is adjourned, or the sitting is suspended, before the time appointed by this Order for any proceedings on the Bill to be brought to a conclusion, no notice shall be required of a Motion made at the next sitting by a member of the Government for varying or supplementing the provisions of this Order.
Saving
10. Nothing in this Order shall—

(a) prevent any proceedings to which the Order applies from being taken or completed earlier than is required by the Order, or

(b) prevent any business from being proceeded with on the allotted day after the completion of all such proceedings on the Bill as are to be taken on that day.

Re-committal
11.—(1) References in this Order to proceedings on consideration or Third Reading include references to proceedings, at those stages respectively, for, on or in consequence of re-committal.
(2) On the allotted day no debate shall be permitted on any Motion to re-commit the Bill (whether as a whole or otherwise), and Mr. Speaker shall put forwith any Question necessary to dispose of the Motion, including the Question on any amendment moved to the Question.
Interpretation
12. In this Order—
"allotted day" means a day (other than a Friday) on which the Bill is put down as first Government Order of the Day provided that a Motion for allotting time to the proceedings on the Bill to be taken on that day either has been agreed on a previous day or is set down for consideration on that day;
"the Bill" means the Local Government Finance Bill.
As I move this timetable motion, Mr. Speaker, I am conscious that just a week ago we spent some time debating a dilatory motion affecting proceedings on the same Bill. Although the juxtaposition of the two debates may seem to have an element of perversity to it, notwithstanding the failure of that dilatory motion, the issues which we address today are wider and more important to the passage of the Bill than those in last week's debate. In addressing these issues I propose first to deal with the nature of the Bill and its urgency, and then with its passage so far. Finally, I intend to say a few words about its future consideration.
The House will recall that the reasons for this legislation were set out by my right hon. Friend the
38
Secretary of State for the Environment in his statement of 16 December. In that statement he explained that, following legal advice, it had been established that the treatment of expenditure in local government finance was incorrect in law. This being the case, all past decisions involving the concepts of total or relevant expenditure were put in doubt.
My right hon. Friend therefore introduced this legislation primarily to validate for England and Wales all past decisions involving the use of relevant or total expenditure and to allow decisions to be taken for the remainder of the present rate support grant system and for rate limitation in line with the practice which has been adopted until now.
It is clearly in the interests of everyone involved in local authority finance, not least the local authorities themselves, that this complex area is restored to a basis of certainty as soon as possible. Quite rightly, neither my right hon. Friend the Secretary of State for the Environment nor my right hon. Friend the Secretary of State for Wales thinks it proper to take further decisions on rate support grant matters or complete the rate limitation process until the law and the practice on this matter once more coincide. Thus, only after the Bill receives Royal Assent can Parliament approve the necessary rate support grant reports and local authorities be paid that grant for the coming financial year.
On the Government's part, the recognition of this urgency was shown by the introduction of the Bill immediately after my right hon. Friend's statement. Part I addresses the position in England and Wales, set ting up a new method of calculating relevant and total expenditure for rate support grant purposes in future. It makes arrangements also for a rate limitation process for 1987–88. In addition, it validates what has already been done for rate support grant purposes and for rate limitation purposes. Part II is less substantial and deals with minor difficulties which have come to light in the present Scottish practice which, of course, derives from separate legislation. I accept at once that these provisions are both difficult and technical, but this is the case with many issues which the House debates.
The Bill received its Second Reading on 12 January by 233 votes to 175, following a debate lasting just over 6½ hours. Its consideration by a Committee of the whole House began one week later on 19 January and continued on 21 January. During the course of those two days the Bill was debated for more than 14½ hours, and the Committee considered 13 groups of amendments. A further 25 amendments or groups of amendments remain to be considered: of these only eight involve Government amendments.
I shall seek, Mr. Speaker, to deal with two points on which the Government have been criticised in Committee. The first criticism is directed at the number and length of Government amendments. I realise that there are difficulties for the House when, particularly on a complex subject, Government amendments are not available early. I have to observe that my right hon. Friend has been ungenerously treated by his critics. On the one hand, he is criticised for having waited to inform the House until after he had confirmed that there was indeed a problem: on the other, it is objected that the Bill has been brought to the House of Commons at a stage when the Government believe that it can still be improved by

39
amendments, rather than being delayed until it is a polished and refined version. Both sets of criticisms cannot be fairly sustained, although in politics they usually are.
The second point which was raised by the hon. Member for Newham, North-West (Mr. Banks) was that the Bill should not have been committed to a Comittee of the whole House because of its technical and complicated nature. The hon. Gentleman is a fair person and will appreciate that the urgency with which the legislation is needed was one of the factors in deciding on this course. I can, however, assure him that, however urgent the Bill, we would not have taken this course had we felt that proper and detailed consideration of the Bill was beyond a Committee of the whole House. I would also point out to him that Members of another place conduct the Committee stage of legislation on the Floor of the Chamber, and apparently have no doubts about their ability to do so. Leaving that aside, progress in Committee has been slower than had been hoped. It has certainly been slower than is commensurate with the urgency of the Bill
Mr. Jack Straw (Blackburn): Will the Leader of the House explain why the Government are in such great haste and will not allow a separate day for a Report stage, given that the Bill was significantly amended by the Government in Committee and the fact that by this timetable motion—it could have been different—in practice the House is being denied a Report stage because of the impracticability of submitting, and having accepted, manuscript amendments?
Mr. Biffen: The main motivation and desire has been to get the Bill to another place where it will undoubtedly be very fully considered and then reported to this place. I accept all the arguments of time that turn upon the niceties of just one more day—but a day, day, a day and so on stretches out. In all charity we have to judge whether there might be a change in attitude towards the passage of this legislation, if that one more day was forthcoming. Our view of human nature is a little more generous than that of the hon. Gentleman.
The motion before us today would provide for one allotted day until midnight to complete the proceedings on the consideration of the Third Reading of the Bill. That allotted day, as the House will be aware, is today. While I accept that there is an almost infinite amount of time which we could spend on the intricacies of the local government finance system, I believe that the House will think it not unreasonable that we should regulate our consideration of this measure in this way. We will of course have an opportunity to examine it further when it has been considered in another place.
Mr. Allan Roberts (Bootle): Does the right hon. Gentleman accept that progress has not been as speedy as it might have been because of the Government's action in tabling a large number of amendments in an unprecedented manner? New schedules, new clauses and a virtual process of rewriting took place in Committee such as I have never experienced—and I have served on every local government Bill since 1979.
Mr. Biffen: I congratulate the hon. Gentleman on having survived that experience with such robustness. I have touched on the problems caused by tabling
40
amendments, but I still think that our reaction is reasonable in view of the time available and the speed with which this has had to be considered.
Mr. Terry Davis (Birmingham, Hodge Hill): Will the right hon. Gentleman clarify some details? To what extent were the Government's deliberations on the way to put forward this timetable motion influenced by the wish of the Secretary of State for the Environment to avoid any further embarrassment as a result of yet another court case between the Secretary of State for the Environment and the city of Birmingham for which leave was given last week?
Mr. Biffen: That thought, I am sure, was not either in the mind of my right hon. Friend the Secretary of State for the Environment or any one of us on the Treasury Bench when we calculated how best to present a timed debate on this measure.
I will end my remarks there, since the sooner we conclude our debate upon this motion, the sooner we may proceed to consider the Bill. There is still opportunity for constructive consideration of this Bill and I urge hon. Members to use it. I believe that there is general recognition of the need for the Bill's prime objective of restoring certainty to these aspects of local government finance and the recognition also that this needs to be achieved expeditiously. Among those seeking the early passage of the Bill must be the local authorities and their associations whose present approach to these matters will be validated by the Bill. This motion will help to ensure that we do not delay that validation unduly. I am inspired to that sentiment by the remarks of the hon. Member for Newham, North-West. He caught the mood of the Oppposition precisely and, for once, succinctly. On 21 January he exhorted the hon. Member for Leeds, West (Mr. Meadowcroft) who was speaking to amendments 48 and 154 to "Drag it out." Those three words pretty well say it all and have inspired my actions ever since. I commend the motion to the House.
4.35 pm
Mr. Alan Williams (Swansea, West): The number of times that the Leader of the House during his brief defence of this unacceptable motion used the word "complex" is a justification of the argument that this measure should never have been debated in Committee on the Floor of the House in the first place.
We object that this, the 31st guillotine motion tabled by the Government—the 22nd on the Floor of the House, and of which at least six have been attributable to the Department that has caused this guillotine—is in itself guillotined by the way in which it has been tabled because it has been incorporated within the timetable that is available for the entire Bill.
Therefore, in discussing the merits and demerits of the guillotine as we should, we reduce the time available for the even more important discussion of the Bill's contents. We further object because, as far as we can gather, there is in effect to be no Report stage because of the way in which the timetable motion is worded.
The motion allows no time for the tabling of amendments and their scrutiny by Mr. Speaker. Consequently, we are to be denied a Report stage. A preposterous proposition was made by the Leader of the House. We are asked to guillotine the Bill after a couple

41
of days of debate. The Committee stage is to be curtailed and the Report stage eliminated. Yet, what did the Leader of the House of Commons tell us, as elected Members of Parliament? He said that we needed to curtail our consideration of the Bill so that there should be full consideration of it in another place.
Is the right hon. Gentleman seriously suggesting that he, as Leader of the elected House of Commons, should come to the Chamber and tell us that we must cut short our discussions on a Bill to enable fuller discussion to take place in another place? All I can say to our colleagues in another place is that I hope that they take note of this abuse by the Leader of this House and I hope that they make him pay for it. I hope that they will take the opportunity that their procedures allow, with the absence of a guillotine system, to ensure that every minute detail of the Bill is examined.
Mr. Jeff Rooker: Does not my right hon. Friend agree that the example he has just given of the words of the Leader of the House gives a new twist to the words of the noble Lord Hailsham about the elective dictatorship of this place?
Mr. Williams: My hon. Friend makes the point very effectively.
Thankfully, after a miserable weekend, I come to the debate from outside the area of local government and local government finance legislation. It has been my 23-year good fortune not to have been involved in the detail of it before. Having tried to make sense of it during the past few days, my lasting impression is of the complexity and convolution of the subject we are supposed to be debating. The opportunities for misunderstanding seem to be enormous. My political early warning system cautions that experience has shown, with this subject, haste is a dangerous policy for the Government to pursue. Essentially this matter needs slow and deliberate contemplation—as we would normally have—with a proper Committee and Report stage.
The present Bill may do what the Secretary of State claims or what my hon. Friend the Member for Copeland (Dr. Cunningham) claims. I must admit that, having tried to read through the Bill in a few days, I do not pretend to know but, in the end. I had hoped that we would have the chance to know. Nothing that the Minister has said so far has convinced me that my hon. Friend is wrong. The Government have ignored our offer to give support to a simple Bill brought forward merely to rectify the problems of the past. In that way the Government would have got the Bill through the House.
Having read through the proceedings, certain things have become clearer to me. The first is that the Minister originally responsible for this Bill, the right hon. Member for Henley (Mr. Heseltine), and the present Secretary of State have agreed upon one thing—the magnitude of the problem. They have agreed about the £30 billion that may be involved in the fiasco that underlies this Bill. That alone suggests that the Bill deserves considerable discussion in the House. Secondly, it has taken six years to establish that the original legislation was wrong. That also suggests that we, if we showed any sense in these matters, should give priority to get the matter right this time.
The third thing that strikes me is that there have been so many banana skins. The Government have already had
42
to amend or seek to amend their rectifying Bill on 40 separate occasions. Fourthly, eminent lawyers, quoted by my hon. Friend the Member for Copeland the other day, expressed their clear views about the scope and breadth of the legal immunity that will be given to the Minister. That advice implied that that immunity is far wider than the Minister has so far admitted. I must draw the attention of the House to the comments made by the Secretary of State, under interrogation by my hon. Friend the Member for Blackburn (Mr. Straw) when he said:
"It is impossible to disentangle some parts of any conceivable court case from those parts that relate to total expenditure."—[Official Report, 12 January 1987; Vol. 108, c. 995.]
Those comments imply that our legal advice is right with regard to this Bill and that the legal protestations made by the Secretary of State are absolutely wrong. I hope that when the Secretary of State comes to make his speech he will address his remarks to that point—about the conflict of legal advice. That conflict is the nub of the difference between the two sides of the House.
Having read through the debate, the fifth point that strikes me is that we should always be careful when enacting retrospective legislation as there is always an implicit threat of a risk to the concept of the rule of law. We are fortunate, with regard to this Bill, in that we have, in the present Secretary of State, the greatest living exponent of retrospective legislation.
I have given five good reasons why I suggest that we need a thorough analysis of the Bill. However, so far we have spent only three parliamentary days discussing the Bill, and that includes Second Reading. Indeed, the Bill was published only one day before the Christmas recess. When a Bill has 17 clauses and four schedules I do not think the desire to discuss all that detail can be described as filibustering or causing undue delay. Yet we now face the guillotine.
The Secretary of State assures us that we can take his word that he has got it right this time. We would perhaps be more convinced of this had it not been for the fact that between the time that he gave us that assurance on Second Reading and the time when he next came to the House to discuss the Bill — an interval of three days — the Secretary of State had found it necessary to amend his Bill 40 times to get it right. The Secretary of State is so confused about what is right that he tabled amendments to two of the clauses and, having advanced those amendments, then withdrew them. Does this smack of a firm, determined knowledgeable Government? The right hon. Gentleman has impressed us!
If the Government have got it right this time, we are a little puzzled as to why, on Thursday 22 January, the Government tabled yet another Bill on the rate support grant system. All this must be viewed against a background — which is less than reassuring — of a Department overruled in the High Court on 15 April for illegally trying to rate-cap the city of Birmingham.
When the Secretary of State tells us that we must take his word he will understand that we have certain reservations. The right hon. Gentleman may come to the Dispatch Box and say that these amendments are proof of his determination to get everything right this time. Although I appreciate that some of us may have a cynical disposition, we might be inclined to think that those

43
measures show how far the Government have got it wrong this time. Yet the Secretary of State wants to rush over the cliff on this occasion with a guillotine motion.
It is not just a joke. When one considers the events that have led to this situation our doubts are compounded by suspicions. On 16 December, in the fourth RSG statement in five months, the Secretary of State said:
"The first intimation I had that the legal advice was as I have described it was towards the end of October."—[Official Report, 16 December 1986; Vol. 107, c. 1053].
That is clear enough, but on 12 January, in response to my hon. Friend the Member for Copeland, the Secretary of State said:
"I think I told the hon. Gentleman that I first became aware of the problem in September."—[Official Report, 12 January 1987; Vol. 108, c. 43].
The Secretary of State gave no apology, showed neither remorse nor contrition for the indication that he had misled the House in his statement by the use of the words:
"I think I told the hon. Gentleman."
That was another attempt to mislead the House about a matter upon which the House had already been misled. This man, this dissembling Minister, is asking the House to take his word in respect of those matters. He is not simply a man from whom one would not buy a second-hand car but a man to whom one would not sell a second-hand car.
One is bound to ask the Minister what on earth happened in the three months between September and 16 December. Why was there no mention in the Queen's Speech of the legal advice and the changes that would be needed? Why did the Minister not mention that legal advice and the changes that would be needed in his speech during the debate on the Queen's Speech? Why was there no explanation of the legal difficulties when the right hon. Gentleman failed to produce the statement on RSG in November? Why was there no mention of those problems when the right hon. Gentleman answered a private notice question on 3 December? Such were the opportunities to confide in the House of Commons but those opportunities were ignored.
Why should we trust someone who has misled the House and, not only that, has concealed facts of which he was well aware? The Secretary of State's description of events is, of course, somewhat imaginative. He said:
"credit should go to the Government for having identified a legal weakness and for having sought immediately and honourably to put it right."
Three months does not exactly conform with the dictionary definition of the word immediate. I must leave it to the House to decide whether Government action was immediate and honourable. I have my conclusions in that respect. I was intrigued by the judgment made by one of the Secretary of State's hon. Friends, the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). He asked:
"Does my right hon. Friend agree that he is the least guilty in a long line of guilty Ministers".
Note that the hon. Gentleman does not say that the Secretary of State is not guilty, but simply that there might be extenuating circumstances. What the right hon. Gentleman seems to be saying is, "Honest guy, I didn't do it. I only hid the body." I repeat his comment:
"It was the Government who spotted the error, so the credit should go to the Government for having identified a legal weakness".
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In other words, in a further submission for remission, he is saying, "Don't I get some time off for coming clean eventually?" Indeed, he even tried the most novel defence that I have come across. He tried to rewrite constitutional history. It turns out that my hon. Friend the Member for Copeland is really the guilty party. The Secretary of State said:
"It takes me to do not only my job but the Opposition's job in pointing out what Parliament failed to stop in 1980."
We now have a new definition of ministerial responsibility. When a Minister gets it wrong, the shadow Minister is expected to resign. It is imaginative and we have to give the Secretary of State credit where it is due.
I read with some bewilderment some of the comments made about the statement. The hon. Member for Eastbourne (Mr. Gow) said:
"my right hon. Friend who has a brain that is even finer than that of his four distinguished predecessors".
There he sits, the Government candidate for Brain of Britain. May the good Lord protect us. What on earth must the rest of them be like? When he came to the Dispatch Box, he said—please do not laugh at this because it is serious—
"I am the only person who is quite certain what the law is."
I looked at the official box and even the men in the white coats were laughing.
The matter becomes even more absurd the more one reads these comments, because the hon. Member for Eastbourne went on waxing eulogistic about the Secretary of State's policy. He said:
"Is my right hon. Friend aware that he has earned the admiration of the House for his courage?"—[Official Report, 16 December 1986; Vol. 107, c. 1053–7.]
That is an interesting proposition. Was it an act of courage, as suggested? The Secretary of State left it to the last possible minute. He left it so late that now we can discuss the Bill only under the threat of the guillotine. The Secretary of State came here only when he had no alternative but to come here because he could make no more statements that would progress the proceedings for next year's rate grant until he had cleared the position.
I must chastise my hon. Friend the Member for Blackburn. He is excessively kind to the Secretary of State. I am sure that I read somewhere—I apologise if he did not say this—that he had said that the Secretary of State had delayed coming to the House until another local government Bill had received Royal Assent. That is generous of my hon. Friend. The reality is that the Secretary of State came forward only when he could delay no more. I do not call that courage. He knew that his reputation and job were on the line if he did not come and make his confession. Eventually, he went over the top only after he had been shown the firing squad, and that is what the Conservative party is claiming as its courageous Minister.
All this is hardly surprising if one has followed the Secretary of State's career, which is colourful, to put it mildly. He came to the job with a track record even worse than that of the Department he was joining. When he was at the Department of Transport, the Court of Appeal overruled him because he had tried to stop the GLC lorry ban when that was outside his legal powers. It would have been a resignation matter for most Ministers—those with pride and integrity. The Secretary of State came from the Department of Transport after the High Court had overruled him because he had wrongly demanded £250

45
million from the GLC when that was outside his powers, outside his rights and outside the law. Again, that would have been a matter of resignation for any Minister with integrity.
What was the judge's description—not ours—of the Secretary of State and his actions? It was that they were:
"Unlawful, irrational and procedurally improper."
This is the Government's M ENSA candidate. What a brilliant prime ministerial appointment it was to take a man with his record and put him in a Department with that record. He came with only one qualification—a discount on barristers' briefs. He is part of the Government's economy campaign.
The Secretary of State has said that the issue is urgent. Ministers knew before we went away for the Christmas recess that the business was there, was urgent and was complex. Why did we not have a two-week Christmas recess, as we have done in the past, so that the Bill could be judged properly?
There has been no delay, and no long speeches from the Labour side of the House. From Ministers there has been a flood of amendments, amendments to amendments and now more amendments to go in in the other place. For the first time, the Government have decided that it is time to impose a guillotine not on us but on Ministers, because they do not know what is coming next. There is no justification for imposing the measure on us and for that reason I call on the House to reject the motion.
4.57 pm
Mr. William Shelton: Of the 20 minutes or so that the right hon. Member for Swansea, West (Mr. Williams) spent speaking. I noticed that, rather wisely, he spoke about the measure before us for only a few minutes. The rest of his speech was a good humoured but unnecessary and unpleasant attack on my right hon. Friend the Secretary of State for the Environment.
It is necessary that the Bill should be guillotined today and that the Bill should go through. I speak as a Member with a constituency interest in Lambeth, and ratepayers there need the protection of the Bill against the tactics of Lambeth council, which is a classic example of Labour in power. Let me explain why the Bill is important for my constituents. If the Bill goes through, Lambeth will get a rate support grant of some £85 million, which is—I hope that my constituents will be aware of this—an increase of £21 million on the rate support grant that Lambeth received last year. That increase is good news.
Even better news for my constituents is that under the Bill Lambeth will be rate capped, with a budget of around £152 million, which will give a rate of about 113p in the pound. Last year, the budget was £167 million and the rate 126p in the pound. Lambeth council will have a reduction in budget of £15 million, and my constituents a reduction in their rate of 13p in the pound. That is the first reason why the Bill is so important for ratepayers in my constituency.
I accept, as perhaps my right hon. Friend the Secretary of State is aware, that this will create a difficulty for the Lambeth councillors. At a policy and resources committee meeting of Lambeth council on 6 January, it was revealed by the officers, who bear no blame in the situation confronting Lambeth, that a preliminary budget forecast for this year showed a budget of £197 million, including £7 million carried forward unspent from last year on the salaries account, because the council cannot recruit
46
sufficiently. Therefore, there is a shortfall of £45 million. Perhaps my hon. Friend the Minister will tell me it' our right hon. Friend the Secretary of State has power to increase the amount of rate support grant or to change the rate capping once the Bill has gone through. If Lambeth's problems stemmed mainly or entirely from rate capping or a lack of finance, I would be the first in a delegation to persuade my right hon. Friend to make more money available for Lambeth, but that is not the case. As I have said, Lambeth is a true picture of Labour in power—the services are breaking down, the council is a shambles, and money is wasted because of mismanagement, loony schemes and underspending on staff as was the case last year.
Members of the Opposition or people in the constituency who do not believe me perhaps saw the leaked report of the auditors. That report is soon to be
published, but it was front page news in the Sunday Telegraph, I believe, the Sunday before last. The headline read: "Loony Left push London into Anarchy …". The auditor's report, which has not yet been published. concludes that social conditions and Government measures bear some of the responsibility, but most of the blame is directed at Left-wing Labour councillors and, of course, Lambeth is named. The report says that expenditure per person by councils since 1981 has fallen in real terms, except in inner London where it has risen by 20 per cent. in real terms. It also says that inner London has twice as many staff per capita as the
"most deprived metropolitan districts outside London …".
I understand that there are certain pressures to have that leaked report modified, but I hope that they will be resisted. I draw the attention of the House to the last auditor's report, published in September 1986. [Interruption.] It is relevant because if the Bill does not go through the typical Labour profligacy of Lambeth will not be checked. I shall read a few of the comments from the September report. The auditor says:
"Opportunities to reduce expenditure without reduction in standards have not been acted upon …
My audit has led me to question the efficiency and effectiveness of the way in which some of the Council's services are managed … whether there is too much talking about problems and too little action."
That is typical of Labour. The auditor goes on to make specific and damning criticisms:
"serious deficiencies in the accounting controls over domestic rents … shortcomings in the Council's accounting arrangements … clearly the situation cannot be allowed to continue".
Referring to the management of the council's fleet of 525 vehicles, the auditor states:
"financial control procedures and the quantity and quality of management were inadequate".
On refuse collections he says:
"costs for the current method of collection … around £180,000 (16%) above the optimum."
On collection of rents, rates and so on, he says:
"Large sums of money are owed to the Council … exceeding £34 million at the end of March."
He also refers to
"Inadequacies of collection procedures."
The report goes on like that, page after page.
Any hon. Member who does not believe the auditor should look at the memorandum sent by the chief executive of Lambeth, Mr. George, to the leader of the council, Miss Linda Bellos. That memorandum, too, found its way into the press. It was a confidential

47
memorandum and I do not know how it found its way there, but I have a copy and I shall quote some of the highlights. The chief executive writes:
"There is a grave danger that certain areas of service may have to be closed down and this may occur in areas of statutory responsibility with very serious consequences for the Council indeed … the Council is unable to recruit quickly or retain staff'.
The chief executive highlights the high profile of the trades unions in Lambeth's affairs and talks about:
"other detrimental consequences for the way in which the Council came to be run. In the absence of strong management the trades unions increasingly came to determine the nature and pace of introduction of organisational change and new procedures."
He also highlights the problem of political interference by Labour members so that
"the role of Chairs of committees and directors and the Chief Executive are blurred and confused".
That, again, is a damning indictment of mainstream Labour in power. It is not just mismanagement—it is a classic case of what happens when the Labour party runs something. For example, Lambeth is spending £44,000 for extra staff in the council's own police unit. The council boycotts the community police association, for which it was recently deeply criticised by Lord Scarman. It spent £760,000 on propaganda about the rates in 1985–86 and £40,000 to fight the proposed Channel tunnel terminal at Waterloo.
Mr. Stuart Holland rose—
Mr. Deputy Speaker (Sir Paul Dean): Order. I find it a little difficult to relate the hon. Gentleman's remarks to the allocation of time motion and the Bill which is the subject of the debate. I am sure that he will relate his remarks to the motion before the House.
Mr. Shelton: I am coming to the end of my speech. If the Bill does not go through, the antics that I have described will continue unchecked. There will be no rate capping and no reduction in the rates and instead of spending £500,000 on four new equality units catering for lesbians, gays, and so forth, the council will probably spend £1 million.
Mr. Holland: In the list that the hon. Gentleman has cited he has not drawn attention to the fact that Lambeth's housing investment grant has been cut from £56 million in 1979 to £33 million projected for the coming year. In current terms, that is a nominal cut of a third. Further, 40 per cent. of the residents in Lambeth claim housing benefit. Delays in those benefits, which affect the hon. Gentleman's point about slow payment of rent, have been affected because since 1982 the Government have brought in 36 statutory instruments that have affected housing benefit. Why does not the hon. Gentleman address himself to those real issues of cuts in housing expenditure and to the way in which the Government have fouled up the possible payment of housing benefit, which is of far more concern to the residents of Lambeth than the trivial points that he is raising?
Mr. Shelton: If what the hon. Gentleman says is true, how can responsible councillors spend £500,000 on equality units catering for lesbians, gays, ethnic minorities, the disabled and women? How can they spend £14,000 on a peace and nuclear affairs officer and £50,000 on a
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woman's day on 8 March? Of course the council has difficulties in its inner city area, but is it not irresponsible—
Mr. Holland: If the hon. Gentleman will give way, I will answer his points.
Mr. Deputy Speaker: Order. I realise that the hon. Member for Streatham (Mr. Shelton) was somewhat tempted by the Opposition but he must return to the motion.
Mr. Shelton: If the Bill does not go through the shambles in Lambeth will continue. While the council is spending that sort of money and spending at a rate above the rate at which the council will be capped, there are unprocessed claims for housing benefit, rent arrears, empty homes, squatters, staff shortages and, to use the words of the auditor's report, "a cycle of decay". The council is ignoring its responsibilities and seems to be capable only of ill spending money. It is typical of Labour in power and for the protection of my constituents I urge the House to support the Bill.
Mr. Holland: On a point of order, Mr. Deputy Speaker. The House has been aware of the fact that you attempted to bring the hon. Member for Streatham (Mr. Shelton) to order several times. He paid no attention to your ruling—
Mr. Deputy Speaker: Order. The hon. Member for Streatham (Mr. Shelton) has resumed his seat.
5.10 pm
Mr. Michael Meadowcroft: It is sad that the Leader of the House came before us today with this motion when we have a certain regard for protection of the rights of the House. It is not insignificant that he appeared to have little heart for what he was saying and, sadly, that he has left the Chamber so soon. It is a shame that he did not come forward with the motion in any spirit of humility by saying, "Here is something that has been caused by the Government and by errors in the past. It has been brought upon us by matters that we have found to he wrong, that we are seeking to put right." Instead of doing that, he tried to brazen it out. What is worse, he used the age old threat that we have heard throughout the proceedings on the Bill that unless it goes through quickly it will hold up the rate support grant settlement.
As I have said before, I do not believe that it is beyond the wit of those who wish to deal with rate support grant to find some way of making that possible in the interim with the active support of Opposition Members. It compounds the felony to use the problem about rate support grant settlement as a reason for guillotining the Bill. It flies in the face of the fact that, had the Bill been solely to validate the financial problems, it would have been through by now.
The Secretary of State for the Environment (Mr. Nicholas Ridley): If it is true, as I have been saying throughout the previous two days in Committee, that the Bill does precisely that, would it now be time for the hon. Gentleman to realise that he could deliver on his promise by not making his speech?
Mr. Meadowcroft: I do not know whether the Secretary of State misunderstands the Bill in its entirety or whether he now contradicts what he has said before. The Secretary of State has admitted in the Chamber during previous

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debates on the Bill that it goes further than validating the errors. If he has accepted that before, why is he now trying to say that, if all we want to do is secure the RSG settlement, we need not have the debate? The fact is that we oppose the Bill and many of its provisions because it goes way beyond validating the illegality that the Secretary of State discovered in his Department. It goes way beyond that in terms of codes of practice, in trying to define and in attempting to introduce retrospective legislation beyond what is necessary for the rate support grant settlements. That is why it does a disservice to the House to try to pretend that we have somehow brought about the need for a guillotine.
The Bill has been in Committee of the whole House for some 15 hours and we are roughly halfway through the amendments and new clauses. I do not believe that anybody could sustain the argument that there has been undue delay or excessive speeches by Opposition Members. It is not possible to say that there has been a filibuster. It showed the flimsy nature of the Leader of the House's argument that he had to pick up the comment of the hon. Member for Newham, North-West (Mr. Banks) who, when I said that I would not delay the House, said, "Drag it out, Michael." The Leader of the House did not point out that the hon. Member for Newham, North-West and I did not drag it out. The hon. Member for Newham, North-West could have dragged out the debate but he chose not to. To be fair to him, which is not always possible, he spoke little and often. He certainly did not delay the House unduly.
Many of the amendments selected for discussion, those we have dealt with and those to come, are Government amendments. There is a complex new schedule tabled by the Government. It was not tabled by my hon. Friends or by Labour Members. Therefore, it is a disservice to the House to propose this motion now.
A total of 66 amendments have been selected and of those 12 are Government amendments. There are no amendments piled up by the Opposition for the sake of it and there are no amendments which simply probe. A large proportion are Government amendments. One of the amendments selected for debate is in the name of two Conservative Members. I am sorry that the hon. Members for Batley and Spen (Mrs. Peacock) and for Halifax (Mr. Galley) arc not in the Chamber to defend their amendment against what will happen to it if the Bill is guillotined. It is a particularly important amendment. They have consistently argued that more resources are required for the fire and civil defence authority in west Yorkshire. Again, that is not something that Opposition Members have sought to set out to delay the Bill.
The right hon. Member for Swansea, West (Mr. Williams) mentioned the problems about Report stage. I raised that issue on a point of order on 20 January. I pointed out the problems that would occur if there were to be no gap between the Committee of the whole House and Report stage, especially when there are such complex Government amendments, new clauses and the new schedule, which presumably the Government will drag through. We will then be faced with manuscript amendments which we would be unable to relate to particular lines of the Bill, and there would be problems of debate. To be fair, the Leader of the House said on that day that the Government did not intend to drive the Bill through and that the debate would terminate at a reasonable hour. Therefore, the question put in my
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legitimate point of order would not arise. After that, which I thought was fair to the House, it is intolerable that today the same thing does not apply and that we will either have to move straight from the Committee of the whole House to the Report stage, attenuated no doubt, or the Report stage will be virtually non-existent and the only debate on that will be for another place.
I am surprised that Government Ministers would risk provoking Members of another place to amend the Bill We all know that our noble Friends are particularly concerned with their constitutional position and, to the chagrin of some Labour Members, they take their position so seriously that they do not push their views to a Division so often. I believe that the Government are risking an awful lot if, by attenuating the debate here, they provoke Members of another place to do their worst with the Bill. It may be that it will be counter-productive and do exactly what the Government do not want. Therefore, it is dangerous.
What is happening today may well validate the cash, but it will not validate the damage that is being done to local government. I hope that Conservative Members are on their knees night after night praying that there will never be a Labour Government who might try to use the powers that the Government are taking to themselves in this Bill, especially in view of the things that have been itemised by Conservative Members as happening in local government. If Labour Members were in government and they had the powers contained in this Bill and others being pushed through the House, Conservative Members would rue the day they ever put this Bill on the statute book, because the draconian centralising powers in the Bill could be used to devastating effect, directly opposite to that intended. It is important to recognise the danger.
Up and down the country there are Conservative members of local authorities who are not standing for re-election. There are some in my own city. They believe that the Government no longer see them as people of importance within the community. They believe that the powers they would want to enable them to operate within local government are being taken away.
It is significant that Conservative Members who have defended local government in the House were absent from previous debates on the Bill. They seem to have given up the struggle against their Government. The hon. Member for Hornchurch (Mr. Squire) was conspicuous by his absence, as was the right hon. and learned Member for Hexham (Mr. Rippon) and the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). They have all genuinely and bravely defended local government and it is significant that they seem to have given up the struggle.
The Conservative Government have broken the consensus about what should happen in the relationship with local government. They have been tempted, by what has happened in certain local authorities, to take powers to themselves which are not needed and which will ultimately prove to be counter-productive. Once that consensus is broken, I fear that they will have sown the wind and that they will therefore reap the whirlwind. Guillotining the Bill is callous in the extreme to local government and it adds insult to injury to the way in which the men and women who serve local authorities without fear or favour are treated by the Government. The Government will rue the day that they tabled the motion.
5.20 pm
Mr. Harry Greenway: If any group has broken the consensus in local government, it is the extreme Left, of which my hon. Friend the Member for Streatham (Mr. Shelton) gave an example. I could give another—Ealing.
I am surprised that the Labour party feels able to oppose any guillotine motion, as it was the Labour party which proposed no fewer than five guillotine motions in one day. Not one of those Bills had been considered in Committee on the Floor of the House, as has this one. The flimsiest of reasons was given for those motions. Indeed, they were anti-reasons for a draconian and, to my mind, anti-democratic action.
This Bill would validate a good deal of past expenditure and I am therefore surprised to hear the Labour Front Bench argue against it. The hon. Member for Newham, North-West (Mr. Banks) should know that the action of the Labour-controlled Greater London council, which imposed a rate increase of 100 per cent. and doubled bus and underground fares in 1981, would be invalid without the Bill. Many other actions which have to be permitted for democratic reasons, I suppose, would be validated. Among them is the expenditure by Ealing council of £140,000 for removing books from school and other libraries because they are considered racist and sexist. Without the motion, and therefore the Bill, such action is not legal, although it will in due course be rejected by the electorate. The £140,000 is intended to remove racist and sexist books such as "Robinson Crusoe" from Ealing schools. It is said to be racist because Man Friday has a subservient role and it is said to be sexist because there is no woman in it. That is an example of the absurd and wicked behaviour of some local authorities such as Ealing.
Mr. Tony Banks: On a point of order, Mr. Deputy Speaker. I apologise to the hon. Member for Ealing, North (Mr. Greenway) for interrupting his flow, but is this strictly relevant to the guillotine motion?
Mr. Deputy Speaker: The hon. Member is relating his speech to the allocation of time motion, and I am sure that he will continue to do so.
Mr. Greenway: I am trying to describe what will happen if the motion, and therefore the Bill, is not passed. The hon. Member for Newham, North-West is one of the great filibusterers of the House. Filibustering is a skill in which he excels and, without a guillotine motion, he could no doubt prolong the discussion of the Bill himself. We must bear that fact in mind.
Actions such as I have described could not be scrutinised properly if the guillotine motion and the Bill were not passed. Ealing council is spending £5·25 per line advertising teachers' jobs in The Guardian rather than £2·25 advertising them in The Times Educational Supplement and Higher Education Supplement, which are a much more relevant recruiting ground. Such an abuse of expenditure and so much else will, by a great irony, be the better exposed if the Bill is passed.
Some £3·1 million is to be spent each year on a grand new office block for over-grand councillors. A substantial sum of money has been spent on bogus consultations of residents in the process of taking their allotments away from them so that they can be built on. Such behaviour could be better scrutinised if the Bill were enacted.
52
I should mention one such action in a little more detail so that the House understands what I mean by bogus consultations. There are a few plots of land in part of Greenford which are all taken up by residents. Ealing council proposes to confiscate the land and build council houses on it. It is surrounded by houses. A lady of 76, Mrs. Skillman, heard at a public meeting that her house would be acquired compulsorily—the first intimation she had of it.
Mr. Straw: On a point of order, Mr. Deputy Speaker. I hesitate to raise this point again, and I realise that the debate may range widely, but the hon. Gentleman appears to be making a constituency speech with no reference to the motion's title—
"Local Government Finance Bill (Allocation of Time)".
Mr. Deputy Speaker: I am sure that the hon. Member for Ealing, North will relate his speech to the motion.
Mr. Greenway: I most certainly will, Sir. We all know that the Labour party does not like to hear the truth about its colleagues in local government and the evil behaviour of Brent, Ealing, Haringey and the rest. It defends such councils, but I do not know how it can. This 76-year-old constituent, who has worked for 20 years with a sick husband to buy her house, needs the protection that the Bill, and therefore the motion, will afford. She has been victimised by a callous, wicked Labour council. I hope that Labour Members will see the meanness of their ways in encouraging them.
5.26 pm
Mr. Terry Davis: I would have more respect for the time-wasting remarks of the hon. Member for Ealing, North (Mr. Greenway) if he had spent more time in the Chamber during our consideration of the Bill.
The arguments employed by the Leader of the House will not wash. It is not true that there has been a filibuster during the Bill's Committee stage. If there had been, my collegues from Birmingham and I would have—
Mr. Tony Marlow: On a point of order, Mr. Deputy Speaker. The hon. Member for Leeds, West (Mr. Meadowcroft) made a very rude remark about my right hon. Friend the Leader of the House when he left, but the hon. Gentleman sat down only two minutes ago and has himself rushed off. [HON. MEMBERS: "He is there."] He is going out of the door. I wonder whether it is in order to ask the hon. Gentleman to apologise to my right hon. Friend.
Mr. Deputy Speaker: Order. Let us get on with the debate.
Mr. Davis: It is not true that there has been a filibuster. If there had been, I and my right hon. and hon. Friends who represent Birmingham would have taken part because we oppose the Bill to the greatest possible extent. Instead, we have waited patiently for amendments that affect the city of Birmingham to be considered. Even with the guillotine motion we will still debate those amendments, but there has been no time-wasting in the meantime.
It is especially inappropriate for the Leader of the House to move a timetable motion on this Bill because it was this Secretary of State who said on 16 December that the need for the Bill arose from inadequate scrutiny of previous legislation. The Government are now moving a

53
timetable motion which will curtail scrutiny of the Bill. I only hope that, some time in the future, the Secretary of State's successor will not tell the House that it must consider yet another Bill because there is a loophole in this legislation as a direct result of our not being able to give it proper scrutiny—because of the Government's draconian decision to move a timetable motion.
It would have been possible for the Government to provide adequate time. We could have come back earlier from the Christmas recess, we could have sat later in our two previous sittings, or the Government could have made more time available by providing more days. Instead, they are determined to bulldoze the Bill through, just as they have bulldozed through other local government legislation. This is a regrettable and deplorable decision and yet anoter example of the shabby way in which the Government treat local government.
5.30 pm
Mr. Tony Marlow: I congratulate the right hon. Member for Swansea, West (Mr. Williams), who opened the debate for the Opposition, on trying to prove to the House—unsuccessfully, I am afraid—that there is life after death. Having heard Labour Members' reactions to today's statement, I can assure the House that the Labour party is in terminal decline.
I should like to make a lesser and a greater point, and ask my right hon. Friend the Secretary of State to say whether he intends to include them in the Bill at a later stage.
My first point is about the voting rights of co-opted members of education committees. It is quite sensible and understandable that the great majority of co-opted members, being very much in favour of education, would wish to see more money spent on education, because that is largely what they are there for. Co-opted members can sometimes sway decisions in favour of spending more money on education, and can sway those decisions against the majority on the local authority. Once that decision on the local education committee has been swayed it is sometimes very difficult, for quite understandable political reasons, for the majority party on the county council or local authority to reinstate the original situation. That sometimes leads to greater expenditure than would otherwise have been the will of the elected majority. Taxation without being representative is wrong, and something should be done about it.
My second and greater point concerns creative accounting. The Audit Commission has said that certain local authorities have creatively accounted and have sold assets on lease, and so on and so forth, to the extent of about £700 million. One of today's newspapers said that that figure could be a massive £5,000 million. We want to know what will happen because these are largely poor areas. Will the ratepayers of those areas have to pick up the tab at some stage, or will the general taxpayer have to pick up the tab? We ought to know.
There was once a noble bishop who, when confronted with a problem of great theological complexity, looked it straight in the eye and then passed by. I should like to think that the Government will not pass by this problem.
5.32 pm
Mr. Tony Banks: I was surprised and somewhat gratified to figure so prominently
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in the speech of the Leader of the House. Alas, lie greatly overrates my influence on Opposition Front Bench tactics, because, alas, my advice was ignored, as, I regret to say, it so often is.
I was brought into the justification for the motion. which is absurd. When I said to the hon. Member for Leeds, West (Mr. Meadowcroft) that he should "drag it out", I was not referring to the Secretary of State, nor was I inviting him to dress up in women's clothing, handsome though he might look. All I was trying to do was to make it clear to Conservative Members—not that there were many of them here then, nor are there many here now—that they should not, in any way, underestimate our intention to make a great fight of this.
The record has shown that far more responsible advice was taken on the Opposition Front Bench, and we have made a very good fist of the Bill. We have done so responsibly, and we have in no way done it by crying to prolong discussion.
The Minister knows, because he is handed briefs that he probably has not seen until a few minutes before, that it is a highly technical Bill. None of us can say that we fully understand it. I am absolutely convinced—the Minister would probably agree with me if he could get up and say so—mistakes have been made as the Bill has gone through the House in the amendments that have been moved by the Government and the amendments that have been refused by the Government, which we have tried to make. No one can be 100 per cent. sure, and there is a great case to be made out for going slowly and surely on the Bill. One of the reasons why the Government took such a leisurely pace was that amendments were coming hot off the press while Ministers were considering it.
I hope that the attitude that we have taken has always been consistent with our view that the Bill is profoundly misguided in certain fundamental respects. Great mistakes have undoubtedly been made. We believe that the Government have been trying to hurry the Bill through to frustrate legal challenge, but in hurrying it through in the way that they have they will lay the Bill open to further legal challenge at a later date. That is why I shall oppose the motion.
5.34 pm
Dr. John Cunningham: I say at the outset that not only could there have been agreement about a short Bill with the aims and objectives of clarifying the law, but there could have been agreement on the timetable of such a Bill, as the Secretary of State well knows.
I emphasise that the Government cannot shelter any longer behind the excuse of shortness of time, when Ministers have known about that state of affairs since September. Such is the confusion and incompetence in the Government's affairs that even as recently as Friday yet another Bill was published, the Rate Support Grants Bill, in the explanatory and financial memorandum to which there is again our old friend of an excuse: the Bill is designed to remove uncertainty in the law. Within months of one Bill receiving Royal Assent, the House is considering a second Bill and yet a third one appears necessary to clarify the law.
If that was not sufficient reason for us to object to the Bill being railroaded through, I received a letter from the Secretary of State for the Environment this afternoon—I thank him for this courtesy. He is trying to re-establish previous normal working relations by writing to me. It

55
would be instructive to tell the House what the right hon. Gentleman had to say. In his letter he makes it clear that the Government will again have to amend the Bill. He wrote:
"the amendment will relate to the information about total expenditure and rateable values to be used in making reports … it will be, as is the whole schedule highly technical and I am afraid rather long … It is very much in the local authority's interests that we get this schedule absolutely right and that is what my amendment will aim to do."
Incompetence, bordering on farce, has been a feature of our considerations of these matters. However, yet again we have a confession from the right hon. Gentleman, within days of previous denials, that major revision of the Government's legislation is again necessary before we have completed the Committee stage. That, of course, proves our point that this highly technical, highly complex legal and financial Bill has no place on the Floor of the House. As we argued from the outset, it should have been properly, carefully and slowly considered in Committee, before a proper Report stage.
What has happened now, in the way in which the timetable motion has been engineered and in the rather lame way in which it was moved by the Leader of the House—I am grateful that he is in his place—demonstrates the inadequacy of the procedures of the House when a Government are determined to railroad a Bill through, regardless of the consequences. As I have emphasised, we already have a further Bill, but we have not yet cleared up, nor do we appear able to, the major legal row about the Bill.
The point still at issue is that clause 4 contains a sweeping catch-all immunity for the Secretary of State from legal challenge in the courts, which is unprecedented, so far as we can tell, in modern legislation. [Interruption.] I emphasise that we share the widespread concern—the Secretary of State again murmurs that we are wrong—that he has failed adequately to define the immunities that he is seeking in the Bill. His inability to be clear about that was apparent in his somewhat contradictory remarks and in his uncertainty in response to questions by my hon. Friend the Member for Blackburn (Mr. Straw) on Wednesday 21 January at column 995 of the Official Report.
Obviously, many provisions of part VI of the Local Government, Planning and Land Act, 1980 are not dependent on total or relevant expenditure definitions, as we have constantly argued. Examples are the Secretary of State's duty to consult local authority associations; determination of the aggregate amount of domestic rate relief grant; calculation of block grant to each authority—deduction from total expenditure of the product of grant-related poundage multiplied by gross rateable value; the principles to be specified in the rate support grant report; the power of the Secretary of State to apply multipliers to the product of GRP multiplied by GRV; and the duty to frame guidance by reference to principles applicable to all authorities. None of those things is dependent upon definitions of total or relevant expenditure, and all of them are affected by the sweeping provisions for immunity that the Secretary of State is seeking.
We make no apology for saying that it is the duty of the House rigorously to examine those matters and to be satisfied about them before we can allow the Bill to pass.
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Why should the Secretary of State's decisions on all those issues be immune from legal challenge? Why are clause 4(1) and (2) not much more carefully qualified than at present? We have similar major reservations about the provisions with respect to rates limitation in clause 6.
If the Government were seeking simply to validate retrospectively past decisions for the reasons claimed—that is, reasons of the definition of total or relevant expenditure—decisions taken for the financial year 1987–88 would have been included in clause 6(2). Those decisions would then have been for the purpose of part I of the Rates Act 1984.
We have had no answer on this point, either. It seems clear that decisions on the 1987–88 rate limitations are, in clause 6(3), for a particular reason. Under the clause, decisions are
"For the purposes of section 7 below and Schedule 2 to this Act".
They are not for the purposes of part I of the 1984 Act. In other words, it appears that at some point in the process of determining rate limitation for the coming financial year, but before the introduction of the Bill, the Secretary of State deliberately stopped taking decisions that he had a duty to take. He stopped taking those decisions in the context of the Rates Act 1984 and instead he began to act, presumably under the guidance of decisions in the context of the forthcoming legislation—the Bill—which was yet to be introduced to the House. That is an extraordinary state of affairs for a Secretary of State to find himself in, I agree, but it is an unsatisfactory way for him to act. I should like at some time, either now or later, some confirmation that that is the case.
The Secretary of State could well be forgiven for reflecting on the words of John Gay:
"I know you lawyers can, with ease.
Twist words and meanings as you please."
The right hon. Gentleman, seems to have been doing a little of that himself while the Committee has considered the implications of the legislation.
We cannot accept the timetable motion. It is unreasonable, in the circumstances in which the House finds itself, to suggest that a timetable motion is necessary at all. I have no doubt that we shall discover that in another place their Lordships will have some searching questions to ask, not only about the provisions of the Bill but about the reason why they were not more carefully scrutinised and why more time was not allowed in the House before the Bill went to another place.
For those reasons I shall ask my right hon. and hon. Friends to reject the motion.
5.45 pm
The Secretary of State for the Environment (Mr. Nicholas Ridley): I should like to deal first with two extraneous points. My hon. Friend the Member for Northampton, North (Mr. Marlow) asked whether the Bill would prevent the co-option of non-elected people to education committees. It does not have that effect.
Mr. Marlow: I was suggesting that those people should not have voting rights, not that they should not be co-opted.
Mr. Ridley: Indeed, but the Bill does not affect that. The matter would have to be the subject of a separate piece of legislation.
The other matter that was irrelevant to the Bill was raised by the hon. Member for Copeland (Dr.

57
Cunningham), who mentioned the Rate Support Grants Bill, about which he was warned in July, September and December. He appears to have forgotten that the Government have always said that they would abolish grant recycling. For the hon. Gentleman to try to draw that into this discussion is ridiculous. It shows how right the Government are to introduce the timetable motion.
I shall not rehearse the urgent reasons for which the Bill is required because the House know them very well. I think that Opposition Members will find that local authorities will be keen to see the Bill on the statute book so that they know where they are.
There have been extraordinary examples of filibuster, particularly this afternoon. The right hon. Member for Swansea, West (Mr. Williams) came to the debate from the cold, not having the faintest idea what the Bill or our discussions were all about. He talked for 20 minutes. Your patience, Mr. Deputy Speaker, was remarkable. I congratulate you upon it, letting that drivel from the right hon. Gentleman run on. I am sure that once the motion is passed, as it will be, the right hon. Gentleman will go away from the Committee and never be seen again. He was right when he said that he knew nothing about the rate support grant. I think that he said that he has been in the House for 26 years—
Mr. Williams: It is 23 years.
Mr. Ridley: Twenty three years. The right hon. Gentleman admitted that he knew nothing about the rate support grant. That was absolutely right. He would be wiser to absent himself from all matters connected with local government after his pathetic filibuster this afternoon.
The right hon. Gentleman accused me of misleading the House. That is a serious charge, and it is not true. I nearly asked him to withdraw it, because I have been absolutely frank with the House throughout the Bill. If the right hon. Gentleman had been present at our discussions and taken the slightest bit of notice, he would not have dared to make that charge, so I invite him to withdraw that remark.
Mr. Williams: I do not withdraw that remark, and invite the Secretary of State to look at his own comments, as quoted from Hansard, in which he gave one date on one occasion and another date on the other. He made no attempt to apologise. It is not for me to withdraw; it is for the right hon. Gentleman to apologise.
Mr. Ridley: The right hon. Gentleman has compounded his error. He has not read Hansard properly. He will know perfectly well that I told the House that, at the end of September, I received from my officials advice that the total expenditure definition was doubtful. I therefore told the House that I sought legal advice from my right hon. and learned Friend the Attorney-General, which was received on 21 October—I am sorry; at the end of October. The right hon. Gentleman must now realise that what I said was absolutely right. I did not know that there was a problem that had to be legislated upon until I received that advice. Therefore, I should be grateful if the right hon. Gentleman would now withdraw that accusation.
Dr. Cunningham rose—
Mr. Ridley: I am not giving way to the hon. Gentleman. I was talking to the right hon. Member for Swansea, West.
Dr. Cunningham: I thank the right hon. Gentleman for giving way.
Mr. Ridley: I have not given way.
Dr. Cunningham rose—
Mr. Deputy Speaker: I understood the Secretary of State to say that he had not given way.
Mr. Ridley: I was giving way to the right hon. Member for Swansea, West.
Mr. Williams: The hon. Gentleman must look at the Official Report for 16 December, when the Secretary of State said:
"The first intimation I had that the legal advice was as I have described it was towards the end of October and this was confirmed in a second opinion".—[Official Report, 16 December 1986; Vol. 107, c.1053.]
On Second Reading the Secretary of State announced that he knew in September. The conclusion that one is left with is that it is not good enough simply to listen to what the right hon. Gentleman says; one has to see whether his eyes are rolling as he says it.
Mr. Ridley: The right hon. Gentleman has not done his homework, and would not understand even if he had. I bitterly resent what he is saying because it is an unfair and untrue charge, and I shall ask him to withdraw it. On Second Reading I said perfectly clearly that I was told that there was doubt about the definition of total expenditure at the end of September. I then received legal advice, and it was not until then that it was known that it was necessary to legislate. That is what I have said throughout, and it is no good the right hon. Gentleman sitting there shaking his head. He has made a mess of his speech this afternoon and he should withdraw from the debate if he does not understand it.
Dr. Cunningham: The Secretary of State is struggling in a quagmire of his own making. On 16 December I asked:
"For how long has the Secretary of State known of this situation? When did he first receive the legal advice to which he referred?"
The Secretary of State replied:
"The first intimation I had that the legal advice was as I have described it was towards the end of October, and this was confirmed in a second opinion."—[Official Report, 16 December 1986; Vol. 1401, c. 1052–53.]
We now know that the Secretary of State had known about it since September. He has caused the confusion, and he has been less than candid with the House.
Mr. Ridley: Will the hon. Gentleman get this point straight, please? Officials told me that there was a problem and legal advice was needed to resolve it. That was at the end of September. The legal advice was recieved at the end of October, and that is what I referred to when answering his question. I said that the first time that I received legal advice was at the end of October. I would now be grateful if the right hon. Member for Swansea, West would please withdraw his offensive remarks. He cannot come into a debate, make an accusation of that sort and expect to get away with it.
Mr. Williams: I value my integrity in the House as much as the right hon. Gentleman values his. I have never maligned an hon. Member, and if I have ever done anything in the House that I felt was wrong I have been willing to withdraw it. In this case I am absolutely correct; the circumstances are as reported in Hansard, and as I have described them in my speech.
Mr. Ridley: The House will know that the hon. Gentleman cannot be relied upon to do the decent thing in a situation such as this.
We have already had 14 hours 50 minutes of debate in Committee, two and a half hours of which was spent on procedural motions and points of order. During those two long days only 17 groups of amendments were considered and 25 groups of amendments remain provisionally selected by the Chairman. At this rate we shall need three more days in Committee alone.
Mr. Tony Banks: So what?
Mr. Ridley: Authorities might not receive any grant. The Opposition have had a bad time recently on everything from defence to their extraordinary attempt to counter the sort of points that my hon. Friends forEaling, North (Mr. Greenway) and for Streatham (Mr. Shelton) were so rightly emphasising in the debate this afternoon. This is a pathetic attempt to accuse decent, efficient Tory councils of meanness. They dropped that pretty quickly. Then we had the extraordinary visit to Bishop's Stortford, when the Opposition announced that a financial collapse was imminent. The stock exchange went up 19·5 points on the day and 65 points on the week, having digested the economic policies of the Labour party.
The hon. Member for Copeland thought that the Bill would be different. He thought that he would be able to make his reputation without slipping on a banana skin. He thought that there was potential for him to put right the appalling blunders of the Labour party on the Bill.
Mr. Allan Roberts: Will the Secretary of State reflect on the fact that I have served on all 12 local government Bills introduced since 1979? The major difference between this Bill and the others has been the conduct of the Government, the Secretary of State and other Ministers. The Secretary of State has treated the House, the Opposition and local government with more contempt than any of his predecessors and he should be ashamed of himself.
Mr. Ridley: The major difference is that the Opposition have not understood the Bill. The hon. Member for Copeland certainly has not understood the Bill. To coin a phrase, the hon. Gentleman has been making bricks without straw. He invented the first scare that I was putting myself above the law in some way, and the other scare that the Bill contained draconian, centralising powers, as the hon. Member for Leeds, West (Mr. Meadowcroft) called them.
It is odd that the hon. Member for Copeland sought to make the point on a point of order on Wednesday afternoon when it was not remotely a point of order and when he knew that the debate of substance would not be reached until late that night. He knew that I could not reply on the point of order; he knew that he was talking rubbish, and he hoped that it would be picked up by the press because he made it at 3.30 pm when he hoped that the press would be there. I thought that was a shabby trick. The hon. Gentleman knows what a point of order is, and he knew that what he was saying was not a point of order. The hon. Gentleman did not bother to raise the matter in the clause 4 stand part debate; he left it to the hon. Member for Blackburn (Mr. Straw), who accepted the Government's case on that matter entirely, and when he received my letter today he realised how wrong he was.
Mr. Straw: Will the right hon. Gentleman give way?
Mr. Ridley: Sit down. I will give way when I feel like it. The hon. Member for Copeland is trying to make accusations about the Bill which will stick in prime time because he knows, as all my hon. Friends know, that what the Bill does is validate the past in the way that I always said it did.
Mr. Straw: I would have accused the Secretary of State of seeking to mislead the House in suggesting that I had accepted the Government's case had I not thought that it was a joke. The Secretary of State was present during the debates on 19 January about the effect of clause 4(6). Would he like to quote one single word or sentence where I intimated that I had accepted the Government's case?
Mr. Ridley: I was accusing the hon. Member for Copeland of making bricks without straw. If he had straw with him, I am happy to admit that the hon. Gentleman is wrong, as well as his hon. Friend. I was trying to pay him a compliment by saying that he was the only Member on the Opposition Benches who knows what the Bill does.
The Bill simply validates all that was done because of the definition of the law not being as everybody thought it was. I admit that it is more complicated than we would all like, but the great mistake that the Opposition have made is to think that it puts me above the law or gives me excessive centralising draconian powers. There is not a single word of truth in that at all. It is right we should debate the Bill for the rest of the day and put it on the statute book as quickly as we can.
5.59 pm
Mr. Michael Hancock: If ever there was a reason why we should not rush to vote on the guillotine motion, we have just heard it. It must surely have reinforced the doubt that every hon. Member must feel that the Secretary of State is the only person here who understands the Bill because he is so vague about its concept and ambitions.
On 21 January the Minister for Local Government said:
"I shall have to be careful with the words because all these words mean something and have to be interpreted … I try to interpret them for myself at the same time as I interpret them for the Committee and five minutes later I wonder if I have. I should prefer to write to the hon. Member"—
that is me—
"about this".—[Official Report, 21 January 1987; Vol. 108, c. 981.]
If a Minister in the Department promoting the Bill has doubts about the interpretation of the words in it—much of what has gone on before is about the way in which those words will be interpreted and the way in which local authorities will have to respond—the Secretary of State must surely see the merits of allowing the House to go into a proper Committee stage to try to draw from him and his colleagues the real meaning and implication of their words.
The Minister of State is dead right—words mean something and they must be interpreted correctly. Much of what has happened in the 15 hours in which we have discussed the Bill will lead to a gross misinterpretation of what the Bill is about and will undoubtedly mean that many local authorities will be drawn into expensive legal battles with the Government. The hon. Member for Streatham (Mr. Shelton) talked about the shambles that had occurred in many Labour authorities in London. I want to draw the Secretary of State's attention to the

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shambles that will occur if he adopts the powers that the Bill would give him. In answer to me last week in the House he said that Hampshire county council could levy a rate not in excess of 1·5 per cent. His Department told Hampshire county council that it would be happy if that rate increase was 4 per cent. greater than that—some 5·8 per cent. A real shambles would occur if Hampshire adopted that policy. It would mean that about £20 million worth of cuts would have to be made. It would mean fewer policemen, firemen and social workers. It would mean cuts in education. It would mean a really regressive and nasty turn for services in Hampshire. The council would have to make £20 million worth of cuts if it took the Secretary of State's advice.
The Secretary of State tried to score a cheap and silly political point in answering my question. Unfortunately, the substance of the Bill is a silly political point. Surely we have a responsibility to expose that and to try to get the Secretary of State to come to the House with the integrity and honesty that is needed to spell out what is meant by some of the terms in the Bill. Many of the amendments that will be before us later this evening are probing amendments—they have to be, by the very complexity of the subject before us. They hope to probe and bring out the reasons behind the Bill, to discover who will be affected by it and what powers the Secretary of State will have. The shambles is here for all to see—we do not have to quote chapter and verse from our own experiences in local authorities.
To do our job properly we must devote time and energy, and the Government must provide that time, to examining the Bill properly. That will not be possible with the timetable motion before us. I fully understand the embarrassment felt by the Leader of the House at having to present such a motion because he, above all, must realise that it is not giving the local authorities a fair chance and certainly not giving the House a fair chance to examine a complex and far-reaching piece of legislation.
Question put:—
The House divided: Ayes 247, Noes 173.

Division No. 70]

[6.05 pm

AYES

Adley, Robert

Brooke, Hon Peter

Alexander, Richard

Brown, M. (Brigg & Cl'thpes)

Amess, David

Browne, John

Ancram, Michael

Bruinvels, Peter

Arnold, Tom

Buchanan-Smith, Rt Hon A.

Atkins, Rt Hon Sir H.

Buck, Sir Antony

Atkinson, David (B'm'th E)

Budgen, Nick

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

Burt, Alistair

Baker, Nicholas (Dorset N)

Butcher, John

Batiste, Spencer

Butterfill, John

Beaumont-Dark, Anthony

Carlisle, John (Luton N)

Bellingham, Henry

Cash, William

Bendall, Vivian

Chapman, Sydney

Benyon, William

Chope, Christopher

Biffen, Rt Hon John

Churchill, W. S.

Biggs-Davison, Sir John

Clark, Hon A. (Plym'th S'n)

Blackburn, John

Clark, Dr Michael (Rochford)

Bonsor, Sir Nicholas

Clark, Sir W. (Croydon S)

Boscawen, Hon Robert

Clarke, Rt Hon K. (Rushcliffe)

Bottomley, Peter

Cockeram, Eric

Bowden, A. (Brighton K'to'n)

Colvin, Michael

Bowden, Gerald (Dulwich)

Conway, Derek

Boyson, Dr Rhodes

Coombs, Simon

Braine, Rt Hon Sir Bernard

Cope, John

Brandon-Bravo, Martin

Couchman, James

Bright, Graham

Cranborne, Viscount

Brinton, Tim

Critchley, Julian

Brittan, Rt Hon Leon

Crouch, David

62

Currie, Mrs Edwina

Marshall, Michael (Arundel)

Dickens, Geoffrey

Mates, Michael

Dicks, Terry

Mather, Sir Carol

Dorrell, Stephen

Maude, Hon Francis

Douglas-Hamilton, Lord J.

Maxwell-Hyslop, Robin

Dover, Den

Mayhew, Sir Patrick

du Cann, Rt Hon Sir Edward

Mellor, David

Dunn, Robert

Merchant, Piers

Durant, Tony

Meyer, Sir Anthony

Dykes, Hugh

Miller, Hal (B'grove)

Edwards, Rt Hon N. (P'broke)

Mills, Iain (Meriden)

Eggar, Tim

Mills, Sir Peter (West Devon)

Evennett, David

Mitchell, David (Hants NW)

Eyre, Sir Reginald

Moate, Roger

Farr, Sir John

Monro, Sir Hector

Favell, Anthony

Montgomery, Sir Fergus

Fenner, Dame Peggy

Moore, Rt Hon John

Fletcher, Sir Alexander

Morrison, Hon C. (Devizes)

Fookes, Miss Janet

Moynihan, Hon C.

Forman, Nigel

Mudd, David

Forsyth, Michael (Stirling)

Neale, Gerrard

Forth, Eric

Nelson, Anthony

Galley, Roy

Neubert, Michael

Garel-Jones, Tristan

Newton, Tony

Glyn, Dr Alan

Nicholls, Patrick

Goodhart, Sir Philip

Onslow, Cranley

Gow, Ian

Oppenheim, Phillip

Gower, Sir Raymond

Ottaway, Richard

Greenway, Harry

Page, Richard (Herts SW)

Griffiths, Sir Eldon

Patten, J. (Oxf W & Abgdn)

Hamilton, Hon A. (Epsom)

Pattie, Rt Hon Geoffrey

Hamilton, Neil (Tatton)

Pawsey, James

Hannam, John

Percival, Rt Hon Sir Ian

Harris, David

Pollock, Alexander

Hayes, J.

Powell, William (Corby)

Heathcoat-Amory, David

Powley, John

Heddle, John

Price, Sir David

Hicks, Robert

Proctor, K. Harvey

Higgins, Rt Hon Terence L.

Raffan, Keith

Hind, Kenneth

Rathbone, Tim

Hirst, Michael

Renton, Tim

Holt, Richard

Rhodes James, Robert

Howard, Michael

Rhys Williams, Sir Brandon

Howarth, Alan (Stratf'd-on-A)

Ridley, Rt Hon Nicholas

Howarth, Gerald (Cannock)

Ridsdale, Sir Julian

Howell, Ralph (Norfolk, N)

Roberts, Wyn (Conwy)

Jackson, Robert

Robinson, Mark (N'port W)

Joseph, Rt Hon Sir Keith

Roe, Mrs Marion

Kershaw, Sir Anthony

Rossi, Sir Hugh

Key, Robert

Rost, Peter

King, Roger (B'ham N'field)

Rowe, Andrew

Knowles, Michael

Sackville, Hon Thomas

Knox, David

Sainsbury, Hon Timothy

Lang, Ian

Sayeed, Jonathan

Latham, Michael

Shaw, Giles (Pudsey)

Lawrence, Ivan

Shaw, Sir Michael (Scarb')

Lennox-Boyd, Hon Mark

Shelton, William (Streatham)

Lester, Jim

Shepherd, Richard (Aldridge)

Lewis, Sir Kenneth (Stamf'd)

Shersby, Michael

Lightbown, David

Silvester, Fred

Lilley, Peter

Sims, Roger

Lloyd, Sir Ian (Havant)

Skeet, Sir Trevor

Lloyd, Peter (Fareham)

Speed, Keith

Lord, Michael

Speller, Tony

Luce, Rt Hon Richard

Spencer, Derek

Lyell, Nicholas

Spicer, Michael (S Worcs)

McCrindle, Robert

Stanbrook, Ivor

Macfarlane, Neil

Stanley, Rt Hon John

MacKay, Andrew (Berkshire)

Steen, Anthony

MacKay, John (Argyll & Bute)

Stern, Michael

Maclean, David John

Stevens, Lewis (Nuneaton)

McLoughlin, Patrick

Stewart, Allan (Eastwood)

McNair-Wilson, P. (New F'st)

Stewart, Andrew (Sherwood)

McQuarrie, Albert

Stradling Thomas, Sir John

Madel, David

Tapsell, Sir Peter

Major, John

Taylor, John (Solihull)

Malins, Humfrey

Taylor, Teddy (S'end E)

Malone, Gerald

Tebbit, Rt Hon Norman

Marland, Paul

Temple-Morris, Peter

Marlow, Antony

Terlezki, Stefan

63

Thomas, Rt Hon Peter

Warren, Kenneth

Thompson, Donald (Calder V)

Watts, John

Thorne, Neil (llford S)

Wells, Sir John (Maidstone)

Thornton, Malcolm

Wheeler, John

Thurnham, Peter

Whitfield, John

Townend, John (Bridlington)

Whitney, Raymond

Townsend, Cyril D. (B'heath)

Wiggin, Jerry

Tracey, Richard

Wolfson, Mark

Trippier, David

Wood, Timothy

Twinn, Dr Ian

Woodcock, Michael

van Straubenzee, Sir W.

Yeo, Tim

Vaughan, Sir Gerard

Young, Sir George (Acton)

Waddington, Rt Hon David

Younger, Rt Hon George

Wakeham, Rt Hon John

Waldegrave, Hon William

Tellers for the Ayes:

Walters, Dennis

Mr. Richard Ryder and

Ward, John

Mr. Michael Portillo.

Wardle, C. (Bexhill)

NOES

Abse, Leo

Foulkes, George

Adams, Allen (Paisley N)

Fraser, J. (Norwood)

Alton, David

Freud, Clement

Anderson, Donald

George, Bruce

Archer, Rt Hon Peter

Gilbert, Rt Hon Dr John

Ashley, Rt Hon Jack

Godman, Dr Norman

Atkinson, N. (Tottenham)

Golding, Mrs Llin

Bagier, Gordon A. T.

Gould, Bryan

Banks, Tony (Newham NW)

Gourlay, Harry

Barron, Kevin

Hamilton, James (M'well N)

Beckett, Mrs Margaret

Hamilton, W. W. (Fife Central)

Bell, Stuart

Hancock, Michael

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

Harrison, Rt Hon Walter

Bermingham, Gerald

Hattersley, Rt Hon Roy

Bidwell, Sydney

Heffer, Eric S.

Blair, Anthony

Hogg, N. (C'nauld & Kilsyth)

Boyes, Roland

Holland, Stuart (Vauxhall)

Bray, Dr Jeremy

Home Robertson, John

Brown, Gordon (D'f'mline E)

Howarth, George (Knowsley, N)

Brown, Hugh D. (Provan)

Hoyle, Douglas

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

Hughes, Robert (Aberdeen N)

Brown, Ron (E'burgh, Leith)

Hughes, Roy (Newport East)

Buchan, Norman

Hughes, Sean (Knowsley S)

Caborn, Richard

Hughes, Simon (Southwark)

Callaghan, Rt Hon J.

Janner, Hon Greville

Callaghan, Jim (Heyw'd & M)

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)

Lambie, David

Clarke, Thomas

Lamond, James

Clay, Robert

Leadbitter, Ted

Clelland, David Gordon

Leighton, Ronald

Clwyd, Mrs Ann

Lewis, Terence (Worsley)

Cocks, Rt Hon M. (Bristol S)

Litherland, Robert

Conlan, Bernard

Lloyd, Tony (Stretford)

Cook, Frank (Stockton North)

Lofthouse, Geoffrey

Corbett, Robin

Loyden, Edward

Corbyn, Jeremy

McCartney, Hugh

Crowther, Stan

McDonald, Dr Oonagh

Cunliffe, Lawrence

McKay, Allen (Penistone)

Cunningham, Dr John

Maclennan, Robert

Davies, Ronald (Caerphilly)

McNamara, Kevin

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

McTaggart, Robert

Deakins, Eric

McWilliam, John

Dixon, Donald

Madden, Max

Dormand, Jack

Marshall, David (Shettleston)

Douglas, Dick

Martin, Michael

Dubs, Alfred

Mason, Rt Hon Roy

Eadie, Alex

Maxton, John

Eastham, Ken

Maynard, Miss Joan

Evans, John (St. Helens N)

Meacher, Michael

Fatchett, Derek

Meadowcroft, Michael

Field, Frank (Birkenhead)

Michie, William

Fields, T. (L'pool Broad Gn)

Mikardo, Ian

Fisher, Mark

Mitchell, Austin (G't Grimsby)

Flannery, Martin

Morris, Rt Hon A. (W'shawe)

Foot, Rt Hon Michael

Morris, Rt Hon J. (Aberavon)

Forrester, John

Nellist, David

Foster, Derek

Oakes, Rt Hon Gordon

64

O'Brien, William

Skinner, Dennis

O'Neill, Martin

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

Orme, Rt Hon Stanley

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

Park, George

Snape, Peter

Patchett, Terry

Soley, Clive

Pavitt, Laurie

Spearing, Nigel

Pendry, Tom

Stewart, Rt Hon D. (W Isles)

Pike, Peter

Stott, Roger

Prescott, John

Straw, Jack

Radice, Giles

Thomas, Dafydd (Merioneth)

Randall, Stuart

Thomas, Dr R. (Carmarthen)

Raynsford, Nick

Thompson, J. (Wansbeck)

Redmond, Martin

Thorne, Stan (Preston)

Rees, Rt Hon M. (Leeds S)

Tinn, James

Richardson, Ms Jo

Torney, Tom

Roberts, Allan (Bootle)

Wainwright, R.

Roberts, Ernest (Hackney N)

Warden, Gareth (Gower)

Robertson, George

Wareing, Robert

Rogers, Allan

Welsh, Michael

Rooker, J. W.

White, James

Ross, Ernest (Dundee W)

Williams, Rt Hon A.

Rowlands, Ted

Wilson, Gordon

Sedgemore, Brian

Winnick, David

Sheerman, Barry

Young, David (Bolton SE)

Sheldon, Rt Hon R.

Shore, Rt Hon Peter

Tellers for the Noes:

Short, Ms Clare (Ladywood)

Mr. Frank Haynes and

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

Mr. Ray Powell.

Silkin, Rt Hon J.

Question accordingly agreed to.
Resolved,
That the following provisions shall apply to the remaining proceedings on the Bill:
Committee, Report and Third Reading
1 .—(1) The remaining proceedings in Committee on the Bill and the proceedings on consideration and Third Reading of the Bill shall be completed in one allotted day and shall be brought to a conclusion at midnight on that day.
(2) Standing Order No. 80 (Business Committee) shall not apply to this Order.
Proceedings on going into Committee
2. When the Order of the Day is read for the House to resolve itself into a Committee on the Bill, Mr. Speaker shall leave the Chair without putting any Question, whether or not notice of an Instruction has been given.
Conclusion of proceedings in Committee
3. On the conclusion of the proceedings in Committee on the Bill the Chairman shall report the Bill to the House without putting any Question, and the House shall proceed to consider the Bill, as amended, without any Question being put.
Order of proceedings
4. No Motion shall be made to alter the order in which proceedings in Committee or on consideration of the Bill are taken.
Dilatory Motions
5. No dilatory Motion with respect to, or in the course of, proceedings on the Bill shall be made on the alloted day except by a member of the Government, and the Question on any such Motion shall be put forthwith.
Extra time
6.—(1) On the allotted day paragraph (1) of Standing Order No. 14 (Exempted business) shall apply to the proceedings on the Bill for two hours after Ten o'clock.
(2) Any period during which proceedings on the Bill may be proceeded with after Ten o'clock under paragraph (7) of Standing Order No. 20 (Adjournment on specific and important matter that should have urgent consideration) shall be in addition to the said period of two hours.
(3) If the allotted day is one to which a Motion for the Adjournment of the House under Standing Order No. 20 stands over from an earlier day, a period of time equal to the duration of the proceedings upon that Motion shall be added to the said period of two hours.
Private business
7. Any private business which has been set down for consideration at Seven o'clock on the allotted day shall, instead of being considered as provided by Standing Orders,

65
be considered at the conclusion of the proceedings on the Bill on that day, and paragraph (1) of Standing Order No. 14 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the conclusion of those proceedings.
Conclusion of proceedings
8.—(1) For the purpose of bringing to a conclusion any proceedings which are to be brought to a conclusion at a time appointed by this Order and which have not previously been brought to a conclusion, the Chairman or Mr. Speaker shall forthwith put the following Questions (but no others):

(a) any Question already proposed from the Chair;

(b) any Question necessary to bring to a decision a Question so proposed (including in the case of a new Clause or new Schedule which has been read a second time, the Question that the Clause or Schedule be added to the Bill);

(c) the Question on any amendment or Motion standing on the Order Paper in the name of any Memberm, if that amendment or Motion is moved by a member of the Government;

(d) any other Question necessary for the disposal of the business to be concluded;

and on a Motion so made for a new Clause or a new Schedule, the Chairman or Mr. Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(2) Proceedings under sub-paragraph (1) above shall not be interrupted under any Standing Order relating to the sittings of the House.
(3) If the allotted day is one on which a Motion for the Adjournment of the House under Standing Order No. 20 (Adjournment on specific and important matter that should have urgent consideration) stands over to Seven o'clock, the bringing to a conclusion of any proceedings on the Bill which, under this Order, are to be brought to a conclusion after that time shall be postponed for a period equal to the duration of the proceedings on that Motion.
(4) If the allotted day is one to which a Motion for the Adjournment of the House under Standing Order No. 20 stands over from an earlier day, the bringing to a conclusion of any proceedings on the Bill which, under this Order, are
66
to be brought to a conclusion on that day shall be postponed for a period equal to the duration of the proceedings on that. Motion.
Supplemental orders
9.— (1) The proceedings on any Motion made in the House by a member of the Government for varying or supplementing the provisions of this Order shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced, and paragraph (1) of Standing Order No. 14 (Exempted business) shall apply to the proceedings.
(2) If on the alloted day the House is adjourned, or the sitting is suspended, before the time appointed by this Order for any proceedings on the Bill to be brought to a conclusion, no notice shall be required of a Motion made at the next sitting by a member of the Government for varying or supplementing the provisions of this Order.
Saving
10. Nothing in this Order shall—

(a) prevent any proceedings to which the Order applies from being taken or completed earlier than is required by the Order, or

(b) prevent any business from being proceeded with on the allotted day after the completion of all such proceedings on the Bill as are to be taken on that day.

Re-committal
11. —(1) References in this Order to proceedings on consideration or Third Reading include references to proceedings, at those stages respectively, for, on or in consequence of re-committal.
(2) On the allotted day no debate shall he permitted on any Motion to re-commit the Bill (whether as a whole or otherwise), and Mr. Speaker shall put forwith any Question necessary to dispose of the Motion, including the Question on any amendment moved to the Question.
Interpretation
12. In this Order—
"allotted day" means a day (other than a Friday) on which the Bill is put down as first Government Order of the Day provided that a Motion for allotting time to the proceedings on the Bill to be taken on that day either has been agreed on a previous day or is set down for consideration on that day;
"the Bill" means the Local Government Finance Bill.

Orders of the Day

  Local Government Finance Bill
  Committee [Progress 21 January]
  [SIR PAUL DEAN in the Chair.]

  Local Government Finance Bill
    Clause 5

      FURTHER PROVISION AS TO FUTURE
      6.17 pm
      Mr. Terry Davis: I beg to move amendment No. 87, in page 5, line 9, after 'years', insert
      'unless the accounts for the intermediate year were certified by the auditors for the local authority before 16th December 1986'.
      Before we can consider amendment No. 87, we need to consider clause 5 because this is the first debate that we have had on this clause. But before we consider clause 5, we must look back at clause 3, which we have already considered. Clause 3 provides for the definition of relevant and total expenditure for the year 1987–88 and for subsequent years. As a result of clause 5, the same definition is to apply, after the passing of the Bill for the years 1983–84 to 1986–87. These past years are described as the "intermediate years".
      The amendment would benefit the city of Birmingham council. To the best of my knowledge, it would benefit only the city of Birmingham. It is designed to benefit Birmingham specifically in respect of expenditure for 1984–85, for which the accounts have already been audited and certified by the auditors. On Second Reading, the Secretary of State referred to what I would describe as the Birmingham problem. In response to my intervention, he said:
      "Birmingham council moved a sum of money which it did not have into a special fund, and at a later stage it moved that money back into the rate fund, thereby claiming grant."—[Official Report, 12 January 1987; Vol. 108, c. 45.]
      Later, in response to my hon. Friend the Member for Blackburn (Mr. Straw), the Secretary of State went on to say, again in relation to Birmingham:
      "But if there were no funds and the funds that were shifted did not exist, then I am sure that the hon. Gentleman would be the first to agree with me that that was a fiddle."—[Official Report, 12 January 1987; Vol. 108, c. 104.]
      It was clear that the Secretary of State believed that Birmingham had made a paper transaction involving money that did not exist. I was especially concerned by his reference to "a fiddle" and discussed the matter with the city treasurer immediately after Second Reading and on several other occasions. The present city treasurer was not the treasurer in Birmingham at the time of the transaction in 1984–85, but he assures me that there is no question of the council cheating. Indeed, he has authorised me to say on his behalf that he will give a categoric assurance that nothing untoward or underhand was done by the city of Birmingham in 1984–85 in its handling of its accounts.
      On 15 January, the city treasurer, Mr. Farrar, wrote to the under-secretary in charge of local government finance
      68
      policy in the Department of the Environment, Mr. Brearley, to make similar comments to him, and through him to the Secretary of State. Mr. Farrar said:
      "Comments made by the Secretary of State during the course of the second reading debate on the Bill, however, indicate that he is under a basic misconception as to Birmingham's position … It is not right to suggest as the Secretary of State seems to do … that Birmingham's fund contribution in 1984–85 equal to the rate fund deficit 'did not exist'."
      As the city treasurer explained to Mr. Brearley, the city council operates, like all local government, on the basis of receipts and payments during a financial year. Unlike central Government, year end accounts are drawn up on an income and expenditure basis, including accruals for debtors and creditors. It follows that a year end deficit does not automatically mean a cash deficit. I repeat that there was no question of the city transferring money that it did not have. The money was in its account. But as we can see from reports from the former city treasurer—Mr. Sabin, who has left to become chief executive of Kent county council—the city of Birmingham was under-spending considerably compared with its budgeted expenditure for 1984–85, so he suggested to the council that a sum equivalent to the underspend should be transferred to a special fund to be called the supply of goods and services fund.
      There was some correspondence about the transfer while the city's accounts were being audited—[Interruption.] The Secretary of State is making noises from a sedentary position. No doubt he is agreeing that there was some correspondence, of which he has copies. There was nothing underhand about the way in which the city treasurer and the council, with the agreement of Conservative and Labour councillors, behaved in this matter. They have hidden nothing from the Government. It is the Government who are behaving deplorably and deserve to be criticised.
      There was some correspondence between the Audit Commission and the city's auditors, Price Waterhouse. I have a copy of a letter, which has also been provided to the Secretary of State, dated 31 January 1986 from Mr. I. M. Pickwell of the Audit Commission to Mr. J. Layton of Price Waterhouse. Mr. Pickwell said that he had some doubts whether the transfer could be regarded as legitimate expenditure. He said:
      "Underlying these thoughts of course is my own view that a local authority has a basic duty to fix a balanced budget for the year and to seek to conduct its business so that it remains 'in balance'."
      The city's solicitor wrote to Price Waterhouse with regard to this point and explained that there was no question of the city council being unable to finance its end of year deficit without recourse to borrowing. It did not need to borrow money because it had cash. He explained that the city had underspent and that it had transferred an equivalent sum to a special fund. The same practice had occurred the previous year.
      On the basis of that correspondence, Price Waterhouse wrote to Mr. Pickwell of the Audit Commission saying:
      "In certain circumstances you may judge a transfer to a fund to be unreasonable when, for example, a transfer should only be financed by way of unauthorised borrowing, but we have no evidence to justify these comments in connection with the City's position."
      In his letter, the city's solicitor also examined the suggestion that the year end deficit had occurred as a result of the transfer. He told Price Waterhouse:

      69
      "It is wrong to assume a causal link between the decision to make the fund contribution and the end of year deficit. The City Treasurer reported to the Finance and Management Committee on 10th April 1985 that the deficit arose not from overspending the 1984–85 budget but from a combination of factors, the most significant being block grant and rate proceed losses in 1984–85 and previous years."
      The deficit arose because of accounting adjustments, not because of the way in which the council had conducted its affairs.
      After examining this matter and the books, Price Waterhouse wrote again to the Audit Commission on 21 March, saying:
      "We have examined the legislation and whilst tenable arguments exist for your reservations, on balance, we tend to favour the views put forward by the City. We take this view since it seems to us that the City's discretion to create funds is unfettered."
      That was on 21 March—six months before the Secretary of State said that he began to have doubts about the legality of the way in which he proposed to treat council expenditure. On 16 May 1986, Mr. Layton of Price Waterhouse told the Department of the Environment:
      "We have considered this issue in some detail and have concluded that the contribution is a lawful charge on the City's accounts and its effect has been properly shown on the face of the grant claim."
      That correspondence shows that Birmingham council acted honourably and above board in these matters. The transfer to a special fund had occurred previously. In 1983–84, the then Conservative-controlled city council had transferred an even larger amount to a special fund described as the special projects repairs and renewals fund. It follows that this practice was not abnormal. It was not invented for the 1984–85 budget and, in the face of the auditor's certificate for that year, the Secretary of State is wrong to try to revise the amount and to insist on removing £8 million from the city of Birmingham.
      This is not just a case of accounting practice. On Second Reading, the Under-Secretary of State for Scotland mentioned the point. He said:
      "On examining our Scottish practices in the light of the problems which have emerged in England and Wales, we discovered that we have counted as expenditure transfers between the general rate fund and special funds in assessing authorities' expenditure for the purpose of imposing grant penalties. According to the system we operate"—
      that is, the system in Scotland—
      "we would also have been prepared to count such transfers as expenditure had they occurred in the accounts of authorities for whom we were proposing a rate reduction."—[Official Report, 12 January 1987; Vol. 108, c. 109.]
      We therefore have evidence from the auditors and from the Government that the council's actions were not abnormal, were not an underhanded method of cheating and were not, as the Secretary of State claimed on Second Reading, "a fiddle". They were above board, honest and open, and the accounts were certified by the auditors.
      We have restricted our amendment to Birmingham because the city's accounts were audited and certified before the Secretary of State's announcement in the House on 16 December. We are not trying to open a loophole that other councils could exploit or that Birmingham could exploit in the future. We are concentrating entirely on 1984–85, which is an important year because the Secretary of State's decision, as contained in the Bill and which he communicated to the city council, will mean that the city will lose £8 million, despite the fact that it made the decision above board and with the agreement of the Conservative and Labour parties on the council.
      70
      In our view, the entire Bill is unjustified, but this aspect of the Secretary of State's behaviour is totally unjustified. I urge him, even at this late stage, to accept the amendment and to restore the £8 million to the city of Birmingham.
      6.30 pm
      The Secretary of State for the Environment (Mr. Nicholas Ridley): I am grateful to the hon. Member for Birmingham, Hodge Hill (Mr. Davis) for setting out the case clearly. The matter is complicated, so I am sure that the Committee will bear with me if I give a fairly long. careful and detailed answer. I hope to convince the House that no injustice is being done and that everything is as it should be.
      First, I shall say a few words about the amendment, not in any sense to rest on my case that it is defective, which it is, but just to dispose of that point before we come to the substance of the Birmingham matter.
      The amendment relates to the years 1983–84 to 1986–87 in England and 1984–85 to 1986–87 in Wales. These are the years in respect of which we intend to make further supplementary reports. At the outset I should make one point clear. All authorities have known that for these years further supplementary reports are intended and they have therefore been aware that the amounts of block grant payable for those years is likely to change.
      The amendment would have the effect that the definition of relevant and total expenditure in clause 5 would not apply to authorities whose accounts for any one of the intermediate years had been certified by their auditors before 16 December 1986 for that year. This would mean that in practice it would be impossible to make another supplementary report for any year for which one authority had had its accounts certified by the auditors. This is simply not sensible and I recommend that the amendment be not made. I shall not rest further on that other than to say that that is not the way to achieve what the hon. Member for Hodge Hill seeks to achieve.
      The amendment is misconceived also as a device to help Birmingham and the 12 other authorities that may have engaged in what is known as deficit financing. Auditors are responsible for certifying that the accounts are correct. I have a totally different responsibility. I have a responsibility to the House of Commons and to the other authorities because block grant is close ended. My responsibility is to administer the rate support grant equitably and in accordance with current legislation, principally our old friend the 1980 Act. Those two responsibilities are quite different. Birmingham and the other local authorities appear to have—I have not reached any final view about this because we are still trying to get full details—
      Mr. Robin Corbett: Is the Secretary of State saying that auditors, whether Price Waterhouse or anyone else, act under no legal constraints? Is he saying that they simply have to say "These are correct"? That surely cannot be the position.
      Mr. Ridley: Auditors have one clearly defined function and they have their own body of law which governs what they should do. I operate in a totally different area. Under the 1980 Act, I am responsible to Parliament for administering the rate support grant system. If I administer it wrongly or unfairly I can be challenged in court by the other authorities that will suffer. Just because

      71
      an auditor approves or disapproves of something, it does not follow that I pay or do not pay grant as a result. I must pay grant according to the rate support grant law, not according to what the auditor says.
      In 1984–85, Birmingham created its supply of goods and services fund, which the hon. Member for Hodge Hill mentioned, and contributed £15,545,000 from its general rate fund to the new fund. By making this contribution, its rate fund revenue account ended the year with a £7,450,980 deficit; that is, about half the money was there, but the other half was not.
      Had Birmingham contributed only half of its general rate fund, that is about £7·5 million, to this fund, we estimate that it would not have incurred a deficit and that its total expenditure would have been nearly £8 million lower. Such a transaction would not cause concern for rate support grant purposes.
      In 1984–85, Birmingham was on a positive marginal rate of grant, so the higher its total expenditure the more block grant it received. Contributions to special funds add to total expenditure and an extra £8 million would result in a gain to the city of about £0·4 million of block grant for that year.
      In 1985–86, Birmingham was on a negative marginal rate of grant. By reducing total expenditure by £8 million, it would gain about £17·3 million in block grant. Taking the two years together, therefore, these transactions imply a block grant gain of about £17·7 million, largely representing reduced holdback and therefore at the expense of the Exchequer.
      The question for me is, should I pay this grant? First, I must make it clear that I am not in a position to take a final view on the matter today, statutorily or otherwise. The city council may wish to make further representations. I wish to consider what other councils in a similar position say to me. In short, I retain an open mind. However, I can give an indication of my preliminary view in the light of the papers that Birmingham has sent to me. Those papers make the following matters clear.
      First, the council took a decision to put a certain sum into a special fund knowing that that would create a deficit on the general rate fund. It did that to gain an increased entitlement to block grant.
      Secondly, the Audit Commission, when asked about the proposed action, expressed considerable reservations, as the hon. Member for Hodge Hill will know, having seen the correspondence, and suggested that the city council's auditors draw it to the attention of my Department.
      Thirdly, although the auditors took the view that the transaction was lawful, they agreed to draw it to the attention of my Department to consider the rate support grant implications. They did that in the letter of 16 May 1986.
      The issue this practice raises is whether it is right and equitable that I, as Secretary of State, should agree to pay grant on figures for total expenditure affected by this practice. Deficit financing is a game that any authority can play. It requires no money. Are the Opposition really suggesting that the distribution of grant should be at the whim of authorities which choose to adopt this practice to any extent they please?
      If Birmingham had run up as a deficit not £8 million but £80 million or even £800 million, the consequences in the grant that it would have attracted would have been
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      infinitely greater. Hon. Members will agree that it cannot be right that grant should be obtained simply by this method.
      Ms. Clare Short: The Secretary of State said that the question was whether it was right or equitable for Birmingham and other authorities to have done that. That is not the question. The question tonight is whether it is right for him to take powers to change the law retrospectively. The debate is not about what we all think is moral, right and fair in terms of local government finance. It is about retrospection in legislation.
      Mr. Ridley: I am coming to that point. If the hon. Member for Birmingham, Ladywood (Ms. Short) will listen, I will answer that point fully. Some hon. Members suggested, as she did, that I might be taking action against Birmingham by sheltering behind powers in this Local Government Finance Bill which I did not previously have. That is not the case. I do not wish to traduce her, but there seemed to be an acceptance in what the hon. Member for Ladywood said that there was perhaps some justification for me to look at this practice with considerable concern.
      Any hon. Member may intervene if he thinks that I have not convinced him that to run up a deficit on one account to put it in and out of a special account might be an unfair way of getting block grant at the expense of other authorities.
      Ms. Clare Short: I wish to put it on record that it is my view, having considered all the details, that there was nothing dishonourable or wrong in what Birmingham did. It is the duty of Birmingham to maximise the sum that it can obtain from central Government to provide for the needs and the services of Birmingham. The Secretary of State must not introduce any suggestion of fiddling. There was no such inference to be drawn from my previous remarks.
      Mr. Ridley: I merely implied that I do not think that the Committee would consider that I should pay grant in the circumstances that I have outlined. I think that the circumstances are as I have described them, but I shall not be sure of that until all the facts are before me.
      Mr. Terry Davis: The right hon. Gentleman is being fair in the way in which he is approaching the comments of my hon. Friends. He is putting an emphasis on motivation and suggesting that the city council decided to maximise grant and obtained money that would not otherwise have been made available to it. Has he read the report of the city treasurer to the finance and management committee of 28 January 1985, which sets out the reasons for the city treasurer's recommendation that a special fund should be created?
      Mr. Ridley: Without checking, I am not sure whether I have read that letter. I have read all the correspondence that was sent to me. I cannot check the date of the letter—
      Mr. Terry Davis: It is a report, not a letter.
      Mr. Ridley: I have read everything that was sent to me. If the report was sent to me, I have read it. Obviously I cannot remember the date of every letter and report. It appeared from the correspondence that the city council acted deliberately. It realised that it would gain more block

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      grant by acting in that way. There is nothing wrong in that and I am not saying that the council was wrong. The Committee has to consider whether it would be right—
      Mr. Corbett: Is the right hon. Gentleman saying that it acted illegally?
      Mr. Ridley: It was not an illegal act. The Committee has to decide whether it would be right for me to pay block grant on the transaction. Birmingham can try every tactic that it likes but I have to accept only that which other authorities and the law would regard as reasonable.
      The position, on what I am advised is the proper interpretation of existing statutes, is this. Before the Bill is enacted, the law provides that no transfers from the general rate fund to special funds would count as relevant expenditure, whether creating a deficit or not. If we had proceeded to court to resolve this matter prior to the Bill becoming an Act, there would have been no question of Birmingham receiving any money. The reason for the Bill is to make the law such that transactions between the rate fund and the special fund will attract grant. With the present state of the law, it would not attract grant.
      On the basis of current practice, I would have taken steps to ensure that authorities could not gain grant unfairly by deficit financing once I had discovered that deficit financing was taking place. The way in which I have operated the system is to have paid block grant on the basis of the best information available to me about authorities' total expenditures. If an authority submitted a figure of total expenditure which I considered was not a fair statement of its expenditure, I would seek to replace that figure with one which was a fair statement of total expenditure, on the ground that the replacement figure represented the best available information. Before using this figure, I would give the authority involved the opportunity to comment. If all had been well with my powers, I would have continued to act in that way to prevent authorities from gaining unfair advantage through deficit financing once it had come to light that it was happening.
      Mr. Michael Meadowcroft: I have listened carefully to the Secretary of State's remarks about deficit financing. Does he agree that there is a factor to which he has not referred which further confuses the issue, which is the argument over what is deficit financing? Leeds city council's representations to the Department of the Environment include the claim that it did not put the account in deficit in the way that he suggests. There is a series of complicated figures and it is suggested that putting together the transport grant and everything else produces an artificial figure of the sort that is set out in the right hon. Gentleman's allegations about the actions of Leeds city council. The city council argues that the Department has taken an incorrect approach. I should like to know what is being done to resolve this arithmetical problem, which does not involve moral, legal or retrospective considerations.
      6.45 pm
      Mr. Ridley: I have not mentioned Leeds, but I have said that we want to get at the facts, which will show what every authority has done in the group that we are considering. We want to analyse what has happened and then to talk to the authorities before coming to a firm conclusion whether grant should be paid. We can resolve the issue of
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      what Leeds city council has done by the council coming to my Department and giving it the full details. We shall form a view in the light of what we learn. As I have explained, the deficit financing issue first came to light in a letter from the Birmingham auditors of 16 May. That is when we started to examine our powers, and we concluded that the practice followed in calculating the relevant and total expenditure was incorrect in law. That in turn led to the advice which I received from my officials at the end of September, which was that I should take legal advice on whether the definition was wrong and whether we should legislate in the way that the Bill seeks to do.
      The Bill enables total expenditure to be calculated in line with the practice that we have adopted. It will provide that transfers to special funds count within relevant, and therefore total, expenditure. It will provide also that I may specify adjustments to relevant expenditure that would enable certain sorts of transfer, such as deficit financing of special funds, to be excluded. These specifications will, of course, be subject to the scrutiny of the court in the normal way, as were directions on total expenditure under the 1980 Act. Any decision that I would have taken if it had not been necessary to introduce the Bill, or that I may take despite the fact that we have the Bill, will be subject to judicial review if any authority decides that it would like to take that course.
      There are two classes of authority which might feel that they wish to take legal action. One group consists of the Birmingham and Leeds type of authority which has been engaging in deficit financing, and the other of all the authorities which have not been, which might feel that they would lose grant as a result of the grant paid to deficit financers.
      To sum up, my current belief, subject to any further evidence that I may receive, is that it would be inequitable to pay grant that reflects deficit financing of special funds, either now or under the Bill. On the basis of the present statutes, deficit financing could not count for grant purposes. I am sure that local authorities would not want me to take account of deficit financing when paying grants. Under the Bill it will be open to me to make specifications that will exclude deficit financing from relevant and total expenditure. Those specifications will be subject to the scrutiny of the court in the normal way.
      I must advise the Committee to reject the amendment. It would not achieve that which the hon. Member for Hodge Hill wishes. Great interest has been shown in the subject and I hope that the full account that I have given the Committee will enable the hon. Gentleman to feel that he should not press the amendment to a Division.
      Mr. Jeff Rooker: There is an important issue to be raised but we shall discuss it as briefly as possible. The Secretary of State has helped matters slightly by the approach that he has taken and is taking. However, there is a need for us to probe even further.
      The right hon. Gentleman has said that he has to pay grant on the basis of rate support grant law and not on the basis of what the auditor says. Surely it must follow that if an audutior says in respect of a certificate that there has been a fiddle and something unlawful has taken place, the Secretary of State will not pay any grant. The auditors said that Birmingham's expenditure was a lawful charge on the city's account, so surely that cannot be dismissed by the

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      Secretary of State as a fiddle. I believe that that was one of his descriptions of the action of Birmingham city council.
      I agree that it would be an abuse if local authorities sought to create extra grant from the Government—the right hon. Gentleman mentioned the sum of £80 million. Birmingham council did not set out to create a grant deficit—artificial or otherwise—in order to maximise grant. It discovered only in January 1985 that there had been an underspend. That was the difficulty faced by Birmingham. It did not set out to create the deficit. It was an accident.
      That was made clear in the correspondence, especially the letter from the city solicitor, dated 25 February 1986, which contained four propositions. One of those propositions made it quite clear that:
      "The General Rate Act 1967 Section 2 specifically anticipates that an authority may go into deficit in any one year by requiring the rate to meet expenditure in previous rating periods."
      That is not what lay behind what the city sought to do. The letter went on:
      "The decision to establish the Supply of Goods and Services Fund was made at the meeting of the Finance and Management Committee on 28 January 1985."
      That report is one that we would like the Secretary of State to read—if he has not already done so. The letter continues:
      "In making that decision the Committee were aware of a prospective deficit for the year of £8·4 million and of a financial advantage to the council of making the fund contribution."
      The facts are that the council was aware of the prospective deficit and it was the prospective underspend. One cannot claim that Birmingham city council, having come under Labour control in May 1984, went hell for leather to overspend. In January 1985, the council was aware that it had underspent and was seeking to protect its position. Both the Audit Commission and the city auditors—
      Mr. Ridley: Will the hon. Gentleman also read out the fourth paragraph which states:
      "The fund contribution has increased the amount of block grant payable to the Council and is therefore to the Council's financial advantage."
      Mr. Rooker: I had intended to read out paragraph 4 and I also missed out the first point made in the letter.
      The decision that Birmingham took in January was the result of knowing that there would be an underspend which it could not help. It did not deliberately create a situation on an artificial deficit grant in order to maximise the grant it received.
      In January 1985 it became apparent that there would be an underspend and it would have been stupid for the officers of the city council not to advise the council of the most advantageous way out of a difficult situation. One of the officers at that time was Mr. Paul Sabim, who is now chief executive of Kent and probably one of the highest paid local government officers in the country, earning a salary approaching £60,000. The city would have been stupid not to take such advice. That advice was sought after circumstances discovered in the January. It is important to understand that the council did not deliberately seek the situation.
      I asked the Secretary of State to consider the reasons given by Birmingham council and he did say he had an open mind. The underspend caused the problem, not
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      because the council had gone into deficit financing per se; nor did it use artificial figures or money that was not available. Despite the Secretary of State's apparent sweetness, what sticks in the craw of the right hon. Gentleman is the fact that in May 1984 Labour took control of Birmingham, at the will of the electorate, after two consecutive years of reduction in rates under Tory administration. The fact is that Birmingham people woke up and discovered the effect of those rate cuts. I will not go over the background as it would be out of order and everyone is aware of the facts. The fact is that there was a threatened wholesale sacking of dinner ladies and a reduction in all services because of the cut in rates. The people of Birmimgham decided to change the policy and change the council. It is that which sticks in the craw of the Secretary of State. My hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) has already said that the decision to set up the fund for 1983–84 and 1984–85 was taken on an all-party basis. Birmingham council had operated on that basis.
      Since the change of council, year after year, without exception the Government have forced, by fixation and manipulation of rate support grant legislation, Birmingham council, under Labour control, to put up the rates. That is what happened. It is a case of "Ridley's revenge for Bosworth's blunder" in losing control of the jewel in the crown.
      The conduct of those Conservative Members who represent Birmingham has been absolutely disgraceful. They have put party before the city and they deserve the undying contempt of their constituents. As a direct result of the action in the Bill and the decisions the Secretary of State will take later on, the rates paid by Birmingham's ratepayers will go up when they should not. The council will be faced with this for five years without the possibility of knowing whether the council has rated correctly. How can local government operate on this basis? How can a Labour-controlled, Tory-controlled or hung authority operate in such a manner? Where there is majority control, how can it be that local government will not know for five years after the event whether it is able to fix a rate?
      The Secretary of State has a lot of ground to make up before he can convince the people of Birmingham that he is not exacting revenge upon them.
      Ms. Clare Short: It is remarkable that the Secretary of State has been calm, reasonable and not at all rude in answering the contribution of my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis). I have not had the pleasure or displeasure of being on a Committee where the Secretary of State has led for the Government, but in my time in this House I have not met another member of the Government who is so unnecessarily arrogant and rude in putting forward his case.
      What was notable about the Birmingham issue was the change in the Secretary of State's whole demeanour. Suddenly the right hon. Gentleman says that he has an open mind and that he will reconsider everything. That is welcome, of course. Our basic job is to defend Birmingham from the cuts and poverty that it currently faces. Nevertheless, the Secretary of State's attitude was undoubtedly different from normal.
      I refer to a letter that I have mentioned previously in the Committee. It is a letter dated 16 December to the chief executive of Birmingham, Mr. Tom Caulcott, from the Department of the Environment. The letter refers to the

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      Bill and states that it gives the Secretary of State power to look back at what Birmingham did in 1984–85 in setting up the special fund and that the Department will look into the details under the new powers in the Bill and then decide what to do. The Secretary of State tried to imply that Birmingham would have been in trouble whether or not the legislation was introduced, but that letter indicates otherwise. It is because of the Bill that the Secretary of State can act in this way.
      At previous sittings of the Committee I attempted to refer to Birmingham's case and that of other authorities affected by this provision of clause 5 because it represents an unacceptable element of retrospection in the Bill. Until now, the Secretary of State has brushed aside all such references. He says that he wants to come to Birmingham to discuss the case, but when he says that he is merely restating the law to be as everyone had thought it was previously that is clearly not true in this instance. The legal officers in Birmingham, two different city treasurers and Price Waterhouse, the auditors, crawled over the law and decided that what Birmingham was doing was absolutely lawful, but the powers in this Bill and in clause 5 would bring into question the legality of what Birmingham did. That is pure, absolute retrospection. It is changing the law after the action has been taken. The Secretary of State is giving himself powers to take away from the city of Birmingham £8 million that it thought it had. At least I thought that it was £8 million, as that is what the brief from Birmingham said. The Secretary of State, however, in the course of his calm and reasonable remarks, quietly referred to £17·1 million. That is terrifying—perhaps we are talking about more than £8 million.
      7 pm
      In 1984–85, with all-party support, Birmingham took a decision which was authorised by the auditors with clear legal advice from the city treasurer that what it was doing was legal. The Secretary of State is now seeking to change the law. My hon. Friend the Member for Hodge Hill said that he thought that the provision affected only Birmingham, but, as the Secretary of State made clear, it goes wider than Birmingham and 12 other authorities are affected. Probably none has a considerable sum at stake, but the majority of them are Labour controlled. It may be worth listing them briefly. They are Cambridgeshire and Warwickshire, both hung authorities, Liverpool, St. Helens, Wigan, Leeds, Birmingham, Hammersmith and Fulham, Lewisham, Newham and Ealing—all Labour controlled—Oadby and Wigston, and West Wiltshire, which are Tory controlled.
      I understand that the figures involved in those cases are fairly limited.
      Mr. Ridley: I point out, for the sake of accuracy, that Warwickshire is not doing the same thing as deficit financing. It is a separate case. Anyone who wants to raise that case can do so, but it has nothing to do with this group.
      Ms. Short: I am grateful for that information. The list was provided by the city of Birmingham. I am sure that the neighbouring county of Warwickshire will be relieved.
      What the Secretary of State is doing is truly arrogant. When he refers to what Birmingham did and talks about whether it was right or equitable, he is substituting his judgment of what is right and of how local authorities should behave for what the law said when the council took
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      its action. He is not entitled to do that. He has to bring forward law that applies to local government, and local government then has to act under the provision of that law. If he is unhappy with the actions that it then takes, as the Government constantly have been, he must bring in new legislation to change future behaviour rather than refer back to previous behaviour.
      It is no secret that the people of Birmingham are deeply disgruntled about the way in which they have been treated by the Government. Birmingham is a peculiarly low-spending authority in Labour hands, and all sorts of games have been played with Birmingham finances as the Government have changed the nature of local government finance to prevent high-spending Labour authorities from protecting jobs and services while allowing low-spending Tory authorities to increase spending when they wished. When the Secretary of State found that that entitled Birmingham to an increase of about £61 million in rate support grant over the past couple of years, he indulged in all sorts of manoeuvres and fiddles to take considerable sums of money away from Birmingham. This £8 million —Heaven help us if it is £17·1 million—is more of the same treatment. I hope that the Secretary of State will not be as punitive as he says that he can be under the Bill.
      The principle of retrospective legislation is deeply objectionable. The Secretary of State's justification is that his action is necessary because everyone misunderstood the law, but that does not apply in this instance. He is going beyond that justification to take away from cities such as Birmingham considerable sums of money that they desperately need.
      Mr. Corbett: The Government's case for the Bill is set out in the Secretary of State's misleading claim when he announced the Bill. He said:
      "We are merely validating the past and putting right for the future the position that the whole House thought obtained."—[Official Report, 16 December 1986; Vol. 107, c. 1054.]
      In other words, the Bill was to end the uncertainty. That qualifies for a Goebbels' award for distortion.
      At the heart of this amendment is the city of Birmingham. Not content with stealing £39 million from the rate support grant, the Secretary of State now proposes, in the name of certainty, to fine us £8 million. Was the supply of goods and services fund set up by the city of Birmingham in 1984–85 legal? Yes, says the city of Birmingham, on an all-party basis. Yes, says Price Waterhouse, its professional auditors and the Audit Commission, so loved by the Secretary of State. Then, years later, along comes the Secretary of State to say no, retrospectively. Moreover it is a Secretary of State who was not merely convicted but actually pleaded guilty when the city of Birmingham took him to court last year for another £7 million robbery. He then came down here and changed the law. In effect, the Secretary of State is accusing the city of Birmingham of something of akin to fraud, Price Waterhouse of something akin to professional incompetence and the Audit Commission of being a willing partner in those actions. Those are extremely serious charges, touching on the commercial reputation of Price Waterhouse, the integrity of the Audit Commission and the integrity and professionalism of officers of the city of Birmingham council.
      The Secretary of State says that he has an open mind about the amendment, but I fear that at the back of that open mind is an empty head. He has given no sign that he

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      is prepared to think again about what the amendment seeks to achieve. It gives him the opportunity to acknowledge and admit his false charges against the city of Birmingham. My hon. Friends have shown that those charges are false. The amendment enables him to accept, without damage to the stated intention of the Bill or any other local authority, that what the city of Birmingham did was legal when it did it. It was told that it was legal when it set up that special fund. Therefore, it should remain legal, as attested to by the independent auditors and the Audit Commission. If the Secretary of State meant what he said earlier about a no-change policy, he has only one honourable course. His integrity is at stake in this debate.
      The loss of £8 million is equivalent to 5p on the rates or an extra £12·75 for a family in a typical post-war three-bedroomed semi with a garage. The honourable course for the Secretary of State is to ensure that his stated no-change policy will apply under the Bill. If he is not willing to do that and prefers dogma to decency, he will perpetrate a gross misjudgment and an abuse of his powers. His honour and integrity are at stake in his worthless allegation about connivance and fiddling by the city of Birmingham, its auditors and the Audit Commission. If he insists that he is right—he has all but done so tonight—he will be shown to be weak in both judgment and prudence.
      Mr. Meadowcroft: I shall be brief, because we want to get on to major amendments. However, lest this should be solely a Birmingham argument, I make two brief points about the city of Leeds, which is caught in the same trap.
      The Secretary of State said earlier that if Leeds had a case that the accounting situation was not as alleged by his Department, it should make its case to him. It has done so and on 17 December it responded in detail to the case put by officials from the Department of the Environment. I hope that the Secretary of State's undertaking will be taken on board and the case will be considered carefully. I am certainly no advocate of many of the policies carried out by the Labour-controlled council in Leeds. I have expressed my opposition to them in the Chamber on numerous occasions.
      I endeavour to be fair about what is done in relation to local government. The city council decided on certain procedures which at that time were legal and the council could not be questioned about their legality by the Department of the Environment. It is wrong for the Government later to say that they dislike and challenge the morality of what was done and will penalise the council. Whether the expenditure, or the use of the special fund or whatever it was, was expenditure that I and my Liberal colleagues on the council would have supported, I support the argument in the House that the council should not now be penalised retrospectively for something that it did in good faith and within the law as it stood. I support the amendment.
      Mr. John Fraser: The Secretary of State says that this Bill is to regularise payments made by way of rate support grant in good faith to local authorities which had incurred expenditure or which had accrued income. It is difficult to quarrel with his proposition that it is right to try to regularise acts carried out in good faith, especially in cases where the problem has arisen as a result of the intricate controls that the Department of the Environment has sought to impose on local authorities. It
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      is quite understandable that once the Department interferes in such detail with the judgment of local authorities about their expenditure, trouble is bound to result.
      We give the Secretary of State the benefit of the doubt on the main proposition. Where local authorities and he acted in good faith there is a case for saying let byegones be byegones and for allowing the Secretary of State to make an exception to the general rule of law, even though that exception is retrospective. My next point about retrospection has been pressed upon me many times because I represent the London borough of Lambeth, where the councillors have been surcharged. The argument about retrospection runs in two ways. I have never objected to retrospective legislation that forgives and forgets and which makes lawful that which was previously unlawful. My objection to retrospective legislation is when it makes unlawful that which was lawful. That is at the centre of the debate about Birmingham.
      For the sake of argument we allow the Secretary of State to make an exception to a rule of law, but in the case of Birmingham he proposes to make an exception to the exception and to say that some things done in good faith by local authorities should be an exception to his general rule and should, if he so decides, be disallowed. If Birmingham had deliberately engaged in deficit financing or in a dishonest or illegal transaction, neither I nor any of my hon. Friends would support the Birmingham case. That is not the argument advanced by the Secretary of State. His argument is simply one of convenience.
      If one wants to find a comparison in other forms of law, one can find it in the distinction between tax evasion and tax avoidance. Tax evasion is illegal and a criminal offence where it involves falsifying accounts in order to gain advantage from the Inland Revenue. Tax avoidance is what a judge has described as perfectly lawful. It means putting one's affairs in such order as to minimise tax liability. It is not only lawful for local authorities to do that in the field of rate support grant but, as I understand it from events in my own local authority, it is the duty of a local council to maximise its income. One of the reasons why my councillors were surcharged was that it was alleged by the district auditor that they failed to maximise their income. If a local authority acts within the law it may well be its duty, like Birmingham, to maximise its income —provided it acts in good faith and in a lawful way.
      The facts which have emerged from this debate are, firstly, that Birmingham acted in good faith. There is no evidence against that proposition. Secondly, I understand that it is strongly disputed by those who urged the Birmingham case—Labour and Tory alike—that the deficit, if there was one, was the consequence of the transaction that the Secretary of State seeks to impugn. Thirdly, the transaction was open and above board, had all-party support and was precedented in previous years. Fourthly, the transaction was sanctioned and authorised by a firm of accountants and auditors which is beyond reproach.
      For those reasons the matter was entered into lawfully and in good faith. That is why we object to a retrospective change in the law which would disallow that which was believed to be lawful, and was lawful at the time. It is written in the Rubaiyat of Omar Khayyam:

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      "The Moving Finger writes; and, having writ,
      Moves on: nor all thy Piety nor Wit
      Shall lure it back to cancel half a Line,
      Nor all thy Tears wash out a Word of it."
      We do not believe that the piety or the wit or even the tears of the Secretary of State should retrospectively change Birmingham's accounts.
      7.15 pm
      Mr. Terry Davis: I am not sure whether the Secretary of State wishes to intervene again, but if he does I shall be happy to give way to him. Perhaps having listened to my arguments and to the arguments of my hon. Friends, he is about to give us some good news.
      Mr. Ridley: It would be courteous of me to respond to speeches made after my earlier one. One or two things have been said and I should like to comment on them. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) rightly said that Birmingham had an underspend for the year in question. In that case, how did it end up with a deficit? That point was not quite appreciated by some Opposition hon. Members. Birmingham had an underspend of about £7·5 million but transferred to the special fund about £15 million—far more than the underspend. Therefore, it was short of £7·5 million and that transaction caused some doubt in the minds of the Audit Commission and the auditor.
      The hon. Member for Perry Barr cannot and should not seek to maintain that this is in any sense revenge by the Government against Birmingham. Birmingham has the best rate support grant settlement for next year of any local authority. It has £31 million more than it got this year. Birmingham has the best figure in the country for both the percentage and the volume of increase, and for that reason the hon. Gentleman should drop his thesis.
      Ms. Clare Short: That all sounds very good, but the Secretary of State must also say that, according to EEC figures, Birmingham has the biggest area of poverty in western Europe and is well below its grant-related expenditure. Yes, it is to have an increase, but that increase will come nowhere near to meeting its need to provide services at the level at which the Government judges local authorities should provide them.
      Mr. Ridley: The Labour party's definition of a cut is that when an authority wants £60 million more it gets £30 million more and that is described as a cut of £30 million. In truth, it is an increase of £30 million. We have that trend in all Labour figures about cuts, but Labour is talking about cuts from what local government wants, but they are usually increases on what the authorities had last year. Let me put the hon. Member for Birmingham, Ladywood (Ms. Short) right again.
      Mr. Jack Straw (Blackburn): Will the right hon. Gentleman give way?
      Mr. Ridley: No, I must get on. I am taking up Opposition time. I can tell the hon. Lady and the hon. Member for Birmingham, Erdington (Mr. Corbett) that the Bill is not designed to deal with Birmingham and the other authorities. The power existed under the old 1980 Act, and if we had come to the conclusion that we should deal with deficit financing we could have done so in two ways. First, we could have asked Birmingham to replace the figure of total expenditure with a figure that we thought was a fairer statement of what it had spent. Alternatively, under the 1980 Act I could have made a
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      direction before this Bill was ever conceived. Therefore, there were two ways in which I could have dealt with it if I had wished to. I would have employed one of those methods if I had decided that it was necessary. There is no retrospection.
      The hon. Member for Norwood (Mr. Fraser) said that there is either tax avoidance or tax evasion. With respect, it is neither of those things. Year after year local authorities up and down the land try all sorts of things to see whether they can get a little more rate support grant. I do not blame them. It has been acknowledged in the debate that that is a perfectly proper thing to do. They do not necessarily succeed. We have to see whether what they are trying is fair and right and we have to obey the law. Grant is never determined until we have the full details of all those things.
      Birmingham is well enough advised to tell hon. Members that we are not taking powers retrospectively in the Bill. The powers were there before and will be there in the future if the Bill is passed and in most cases they would have been subject to judicial review. Therefore, the case of the hon. Member for Ladywood does not stand up.
      Mr. Terry Davis: I want to correct some of the points made by the Secretary of State.
      Birmingham Members are not complaining about the cut in the amount of money we want. We are talking about a cut in the amount of money that we need— not the amount that we want. In his original proposals the Secretary of State was planning to give Birmingham a much larger amount than he is now proposing. My hon. Friends and I would want much more because we live with the problems of poverty in Birmingham. The reduction about which we are complaining is the Secretary of State's reduction in the amount that he was planning to give compared with the amount that he is now planning to give. When I talk about the reduction in the amount that we need, I mean need—according to the Secretary of State's criteria—that is, grant-related expenditure.
      The right hon. Gentleman told the House that there was an underspend of £7·5 million. That is not correct. I have looked at the reports. The underspend was twice that amount. The Secretary of State is confused. He is talking about Birmingham's expenditure being less than the money it took in receipts. We are talking about an underspend compared with budget. The underspend compared with budget was twice the figure mentioned by the right hon. Gentleman. The right hon. Gentleman claimed that the deficit was the result of the transfer to a special fund, but that is not correct. I remind him that he or his officials have received correspondence from the city treasurer and other officers in Birmingham explaining that the deficit was not the result of a transfer to a special fund. I do not know whether the Secretary of State is indicating that he agrees or disagrees. My hon. Friends will tell him that I am well known in Birmingham for not accepting lightly what the city officers tell us. However, one exception to my criticism of the city officers is the present city treasurer. He has assured me that there was nothing untoward or underhand in the way in which Birmingham treated its accounts in 1984–85, and I believe him.
      The Secretary of State said tonight from the Dispatch Box that the transfer was to obtain extra grant. I have had the advantage of going through the reports that were considered by the committees of the city council and by all parties on the council. I cannot find any suggestion in the

      83
      reports that there should be a transfer to obtain extra grant. On the contrary, the transfer was recommended by the then city treasurer because the council was going to have a windfall gain as a result of reductions in interest rates. The budget was based on one level of interest rates and when the interest rates went down the council found that it was not going to spend as much as expected. The city treasurer advised the city councillors to transfer that amount of money to a special fund in case there was a windfall loss on the succeeding year as a result of interest rates rising again, The report says that they should do it not to obtain extra grant but to avoid grant penalty in succeeding years because the council would then be able to charge some items of expenditure to the special fund and thus avoid penalty.
      The right hon. Gentleman said that he approaches the matter with an open mind. If I have been correctly informed by city officers, that is not what he has said to the leader of the city council and the city officers in Birmingham. They do not think that he has an open mind. He said that there are some defects in the wording of our amendment. I make no apology for that. It is usual for the wording in Back Benchers' amendments to be defective. However, it is usual in those circumstances for a Secretary of State who is sympathetic to accept the principle of an amendment and to ask for it to be withdrawn so that he can table a suitable amendment in another place. The Secretary of State has not done that. Therefore, I ask my hon. Friends representing Birmingham constituencies and those from the rest of the United Kingdom to support me in the Division Lobby.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 168, Noes 242.

      Division No. 71]

      [7.25 pm

      AYES

      Abse, Leo

      Conlan, Bernard

      Adams, Allen (Paisley N)

      Cook, Frank (Stockton North)

      Alton, David

      Cook, Robin F. (Livingston)

      Anderson, Donald

      Corbett, Robin

      Archer, Rt Hon Peter

      Corbyn, Jeremy

      Ashley, Rt Hon Jack

      Crowther, Stan

      Atkinsop, N. (Tottenham)

      Cunliffe, Lawrence

      Bagier, Gordon A. T.

      Cunningham, Dr John

      Banks, Tony (Newham NW)

      Davies, Ronald (Caerphilly)

      Barron, Kevin

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

      Beckett, Mrs Margaret

      Deakins, Eric

      Bell, Stuart

      Dobson, Frank

      Benn, Rt Hon Tony

      Dormand, Jack

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

      Dubs, Alfred

      Bermingham, Gerald

      Dunwoody, Hon Mrs G.

      Bidwell, Sydney

      Eadie, Alex

      Blair, Anthony

      Eastham, Ken

      Boyes, Roland

      Evans, John (St. Helens N)

      Bray, Dr Jeremy

      Fatchett, Derek

      Brown, Gordon (D'f'mline E)

      Field, Frank (Birkenhead)

      Brown, Hugh D. (Provan)

      Fields, T. (L'pool Broad Gn)

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

      Fisher, Mark

      Buchan, Norman

      Flannery, Martin

      Caborn, Richard

      Foot, Rt Hon Michael

      Callaghan, Rt Hon J.

      Forrester, John

      Callaghan, Jim (Heyw'd & M)

      Foster, Derek

      Campbell-Savours, Dale

      Foulkes, George

      Carter-Jones, Lewis

      Fraser, J. (Norwood)

      Cartwright, John

      Freud, Clement

      Clark, Dr David (S Shields)

      George, Bruce

      Clay, Robert

      Gilbert, Rt Hon Dr John

      Clelland, David Gordon

      Golding, Mrs Llin

      Clwyd, Mrs Ann

      Gould, Bryan

      Cocks, Rt Hon M. (Bristol S)

      Gourlay, Harry

      Cohen, Harry

      Hamilton, W. W. (Fife Central)

      84

      Hancock, Michael

      Pavitt, Laurie

      Harrison, Rt Hon Walter

      Pendry, Tom

      Haynes, Frank

      Pike, Peter

      Heffer, Eric S.

      Powell, Raymond (Ogmore)

      Hogg, N. (C'nauld & Kilsyth)

      Prescott, John

      Holland, Stuart (Vauxhall)

      Radice, Giles

      Home Robertson, John

      Randall, Stuart

      Howarth, George (Knowsley, N)

      Raynsford, Nick

      Hoyle, Douglas

      Redmond, Martin

      Hughes, Robert (Aberdeen N)

      Rees, Rt Hon M. (Leeds S)

      Hughes, Roy (Newport East)

      Richardson, Ms Jo

      Hughes, Sean (Knowsley S)

      Roberts, Allan (Bootle)

      Hughes, Simon (Southwark)

      Roberts, Ernest (Hackney N)

      Janner, Hon Greville

      Rogers, Allan

      Jones, Barry (Alyn & Deeside)

      Rooker, J. W.

      Kaufman, Rt Hon Gerald

      Ross, Ernest (Dundee W)

      Kennedy, Charles

      Rowlands, Ted

      Kinnock, Rt Hon Neil

      Sheerman, Barry

      Lambie, David

      Sheldon, Rt Hon R.

      Lamond, James

      Shore, Rt Hon Peter

      Leadbitter, Ted

      Short, Ms Clare (Ladywood)

      Leighton, Ronald

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

      Lewis, Terence (Worsley)

      Silkin, Rt Hon J.

      Litherland, Robert

      Skinner, Dennis

      Lloyd, Tony (Stretford)

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

      Lofthouse, Geoffrey

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

      Loyden, Edward

      Snape, Peter

      McCartney, Hugh

      Soley, Clive

      McDonald, Dr Oonagh

      Spearing, Nigel

      McKay, Allen (Penistone)

      Stott, Roger

      McNamara, Kevin

      Straw, Jack

      McTaggart, Robert

      Thomas, Dafydd (Merioneth)

      McWilliam, John

      Thomas, Dr R. (Carmarthen)

      Madden, Max

      Thompson, J. (Wansbeck)

      Marshall, David (Shettleston)

      Thome, Stan (Preston)

      Martin, Michael

      Tinn, James

      Mason, Rt Hon Roy

      Torney, Tom

      Maxton, John

      Wainwright, R.

      Maynard, Miss Joan

      Wardell, Gareth (Gower)

      Meacher, Michael

      Wareing, Robert

      Meadowcroft, Michael

      Weetch, Ken

      Michie, William

      Welsh, Michael

      Millan, Rt Hon Bruce

      White, James

      Mitchell, Austin (G't Grimsby)

      Williams, Rt Hon A.

      Morris, Rt Hon A. (W'shawe)

      Wilson, Gordon

      Nellist, David

      Winnick, David

      Oakes, Rt Hon Gordon

      Young, David (Bolton SE)

      O'Brien, William

      O'Neill, Martin

      Tellers for the Ayes:

      Park, George

      Mr. James Hamilton and

      Patchett, Terry

      Mr. Don Dixon.

      NOES

      Adley, Robert

      Brittan, Rt Hon Leon

      Aitken, Jonathan

      Brooke, Hon Peter

      Alexander, Richard

      Brown, M. (Brigg & Cl'thpes)

      Amess, David

      Browne, John

      Ancram, Michael

      Bruinvels, Peter

      Arnold, Tom

      Buchanan-Smith, Rt Hon A.

      Ashby, David

      Budgen, Nick

      Atkins, Rt Hon Sir H.

      Burt, Alistair

      Atkinson, David (B'm'th E)

      Butcher, John

      Baker, Nicholas (Dorset N)

      Butterfill, John

      Batiste, Spencer

      Carlisle, John (Luton N)

      Bellingham, Henry

      Carttiss, Michael

      Bendall, Vivian

      Cash, William

      Benyon, William

      Chapman, Sydney

      Biffen, Rt Hon John

      Chope, Christopher

      Biggs-Davison, Sir John

      Churchill, W. S.

      Blackburn, John

      Clark, Hon A. (Plym'th S'n)

      Body, Sir Richard

      Clark, Dr Michael (Rochford)

      Bonsor, Sir Nicholas

      Clark, Sir W. (Croydon S)

      Bottomley, Peter

      Clarke, Rt Hon K. (Rushcliffe)

      Bottomley, Mrs Virginia

      Cockeram, Eric

      Bowden, A. (Brighton K'to'n)

      Conway, Derek

      Bowden, Gerald (Dulwich)

      Coombs, Simon

      Boyson, Dr Rhodes

      Cope, John

      Brandon-Bravo, Martin

      Couchman, James

      Bright, Graham

      Cranborne, Viscount

      Brinton, Tim

      Dickens, Geoffrey

      85

      Dicks, Terry

      Meyer, Sir Anthony

      Dorrell, Stephen

      Miller, Hal (B'grove)

      Douglas-Hamilton, Lord J.

      Mills, lain (Meriden)

      Dover, Den

      Mills, Sir Peter (West Devon)

      du Cann, Rt Hon Sir Edward

      Miscampbell, Norman

      Dunn, Robert

      Mitchell, David (Hants NW)

      Durant, Tony

      Moate, Roger

      Dykes, Hugh

      Monro, Sir Hector

      Eggar, Tim

      Montgomery, Sir Fergus

      Evennett, David

      Morrison, Hon C. (Devizes)

      Eyre, Sir Reginald

      Moynihan, Hon C.

      Farr, Sir John

      Mudd, David

      Favell, Anthony

      Neale, Gerrard

      Fenner, Dame Peggy

      Needham, Richard

      Fletcher, Sir Alexander

      Nelson, Anthony

      Forman, Nigel

      Newton, Tony

      Forth, Eric

      Nicholls, Patrick

      Fox, Sir Marcus

      Onslow, Cranley

      Galley, Roy

      Oppenheim, Phillip

      Garel-Jones, Tristan

      Ottaway, Richard

      Glyn, Dr Alan

      Page, Richard (Herts SW)

      Goodhart, Sir Philip

      Patten, Christopher (Bath)

      Gow, lan

      Patten, J. (Oxf W & Abgdn)

      Gower, Sir Raymond

      Pawsey, James

      Griffiths, Sir Eldon

      Peacock, Mrs Elizabeth

      Hamilton, Neil (Tatton)

      Percival, Rt Hon Sir lan

      Hannam, John

      Pollock, Alexander

      Harris, David

      Powell, William (Corby)

      Hayes, J.

      Powley, John

      Hicks, Robert

      Price, Sir David

      Higgins, Rt Hon Terence L.

      Proctor, K. Harvey

      Hirst, Michael

      Raffan, Keith

      Holland, Sir Philip (Gedling)

      Raison, Rt Hon Timothy

      Howarth, Alan (Stratf'd-on-A)

      Rathbone, Tim

      Howarth, Gerald (Cannock)

      Rhodes James, Robert

      Howell, Ralph (Norfolk, N)

      Rhys Williams, Sir Brandon

      Jackson, Robert

      Ridley, Rt Hon Nicholas

      Joseph, Rt Hon Sir Keith

      Ridsdale, Sir Jullan

      Key, Robert

      Roberts, Wyn (Conwy)

      Knowles, Michael

      Robinson, Mark (N'port W)

      Knox, David

      Roe, Mrs Marion

      Lamont, Rt Hon Norman

      Rost, Peter

      Lang, lan

      Rowe, Andrew

      Latham, Michael

      Rumbold, Mrs Angela

      Lawler, Geoffrey

      Sackville, Hon Thomas

      Lawrence, Ivan

      Sainsbury, Hon Timothy

      Leigh, Edward (Gainsbor'gh)

      Sayeed, Jonathan

      Lennox-Boyd, Hon Mark

      Shaw, Giles (Pudsey)

      Lester, Jim

      Shaw, Sir Michael (Scarb')

      Lewis, Sir Kenneth (Stamf'd)

      Shelton, William (Streatham)

      Lightbown, David

      Shepherd, Colin (Hereford)

      Lilley, Peter

      Shepherd, Richard (Aldridge)

      Lloyd, Sir lan (Havant)

      Shersby, Michael

      Lloyd, Peter (Fareham)

      Silvester, Fred

      Lord, Michael

      Skeet, Sir Trevor

      Luce, Rt Hon Richard

      Smith, Tim (Beaconsfield)

      Lyell, Nicholas

      Speed, Keith

      McCrindle, Robert

      Speller, Tony

      McCurley, Mrs Anna

      Spencer, Derek

      Macfarlane, Neil

      Spicer, Jim (Dorset W)

      MacKay, Andrew (Berkshire)

      Spicer, Michael (S Worcs)

      MacKay, John (Argyll & Bute)

      Squire, Robin

      Maclean, David John

      Stanbrook, Ivor

      McLoughlin, Patrick

      Stanley, Rt Hon John

      McNair-Wilson, P. (New F'st)

      Steen, Anthony

      McQuarrie, Albert

      Stern, Michael

      Madel, David

      Stevens, Lewis (Nuneaton)

      Major, John

      Stewart, Allan (Eastwood)

      Malins, Humfrey

      Stewart, Andrew (Sherwood)

      Malone, Gerald

      Stewart, lan (Hertf'dshire N)

      Maples, John

      Stradling Thomas, Sir John

      Marland, Paul

      Tapsell, Sir Peter

      Marlow, Antony

      Taylor, John (Solihull)

      Marshall, Michael (Arundel)

      Taylor, Teddy (S'end E)

      Mates, Michael

      Temple-Morris, Peter

      Mather, Sir Carol

      Terlezki, Stefan

      Maude, Hon Francis

      Thomas, Rt Hon Peter

      Maxwell-Hyslop, Robin

      Thompson, Donald (Calder V)

      Mayhew, Sir Patrick

      Thornton, Malcolm

      Merchant, Piers

      Thurnham, Peter

      86

      Townend, John (Bridlington)

      Watts, John

      Townsend, Cyril D. (B'heath)

      Wells, Sir John (Maidstone)

      Trippier, David

      Wheeler, John

      Trotter, Neville

      Whitfield, John

      Twinn, Dr lan

      Whitney, Raymond

      van Straubenzee, Sir W.

      Wiggin, Jerry

      Vaughan, Sir Gerard

      Wolfson, Mark

      Viggers, Peter

      Wood, Timothy

      Waldegrave, Hon William

      Woodcock, Michael

      Walden, George

      Yeo, Tim

      Walker, Bill (T'side N)

      Young, Sir George (Acton)

      Waller, Gary

      Younger, Rt Hon George

      Walters, Dennis

      Ward, John

      Tellers for the Noes:

      Wardle, C. (Bexhill)

      Mr. Richard Ryder and

      Warren, Kenneth

      Mr. Michael Portillo.

      Question accordingly negatived.
      Amendments made: No. 89, in page 5, line 13, leave out `and (7)' and insert , (7) and (8)'.
      No. 90, in page 5, line 27, at end insert—
      '(4A) In the application (by virtue of subsection (3) above) of sections 1 and 2 above in relation to an intermediate year beginning in 1983, 1984 and 1985, section 1 shall have effect as if for "a joint authority" in subsection (1)(c) there were substituted "the Greater London Council.".'—[Dr. Boyson.]
      Clause 5, as amended, ordered to stand part of the Bill.

      Clause 6

        VALIDATION OF PAST ACTS
        Question proposed, That the clause stand part of the Bill.
        Mr. Straw: I should first explain that we decided not to move the group of amendments beginning with amendment No. 93 and also that beginning with amendment No. 96 solely because of the shortage of time now available to the Committee to deal with some extremely important issues before the guillotine comes down at 12 o'clock.
        I wish to make some brief points about clause 6 before we move on to a major debate on the rate-capping procedures in the Bill which come up in two groups of amendments, that beginning with amendment No. 106 and that beginning with amendment No. 107. I hope that it will be for the convenience of the Committee if I take them together to expedite the debate.
        We do not intend to press clause 6 to a vote. Again, that is solely because of the time constraints. The fact that we shall not push the matter to a Division should not in any sense be taken as evidence that we accept part of the purpose and force of clause 6.
        We have previously had extensive debates on the operation of clause 4(6), which has become known as the judge-proofing subsection in so far as decisions taken before the passing of the Act relate to part VI of the Local Government, Planning and Land Act 1980. We have a similar objection to the operation of clause 6(4) that relates to the rate-capping powers of the Secretary of State. Under clause 6, any orders made under section 2(3) of the Rates Act 1984 are deemed to have been estimated in compliance with part VI of the 1980 Act. That is understandable within the scheme of the Bill. The clause then goes on to state:
        "Anything done by the Secretary of State before the passing of this Act for the purposes of Part I of the 1984 Act"—

        87
        which relates to selective rate capping in the years beginning 1985 or 1986 shall also—
        "be deemed to have been done in compliance with the provisions of that Part".
        Again, we comprehend why that is being included in the Bill, even if we disagree with it. However, subsection (3) states:
        "For the purpose of section 7 below and Schedule 2 to this Act"
        which are the clauses and the schedule which substitute formula rate capping for the procedure under the 1984 Act, any designation of an authority in relation to this forthcoming financial year and any determination and notification of an authority's total expenditure,
        "shall, if made before the passing of this Act, be deemed to have been made in compliance with the provisions of Part I".
        Subsection (4) of the Bill states:
        "This section shall have effect notwithstanding any decision of a court (whether before or after the passing of this Act) purporting to have a contrary effect."
        Therefore, I should like to ask the Minister why it is necessary to have such a judge-proofing provision within the clause. Already, decisions that the Secretary of State has made, or could make, up to the passing of the Act are deemed to have been made in compliance with either the 1980 Act or the 1984 Act. If that matter went to court and some issue were made about the Secretary of State's powers to make decisions once the Act had been passed, the court could read subsections (1), (2) and (3)— the courts would be perfectly capable of understanding what they mean—and apply them. Assuming that they had been applied properly, the deeming provisions would protect the Secretary of State.
        7.45 pm
        Therefore, why is it necessary, given the way in which subsections (1) to (3) will operate, for there to be the omnibus subsection (4), which prevents the court from making any decisions in circumstances in which they would otherwise be able to make them?
        I should like to give the Minister an example. Later we may hear from my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) about the fact that, in Islington's view, the borough fell just below the trigger point for rate capping, which, as I recall, was 12·5 per cent. over grant-related expenditure assessment. In a sense, that is a matter of fact, and an application of the rules. As the law stood before the Bill, Islington would have been able to go to court, if the Secretary of State had disagreed with it, and argued that point. That is right because it is exactly what the courts exist for—to determine and arbitrate on an issue such as that. However, under the Bill, Islington is denied that opportunity.
        What purpose is served by preventing a borough—I know that there are political objections to Islington, but I do not think the Minister will take up that point—from going to court and arguing a point like that?
        We believe that judge-proofing provisions like those in clause 4(6) go way beyond anything that is necessary simply to put the law in good order, as was the ostensible purpose of the Bill. For that reason, we thoroughly oppose clause 6 and especially subsection (4).
        The Minister for Local Government (Dr. Rhodes Boyson): I am grateful to the hon. Member for Blackburn (Mr. Straw) for letting the Committee know that he will
        88
        not seek to divide it on clause 6, but will be raising queries about cerain points about it. The clause is vitally important to the Bill. As the hon. Member for Blackburn said, it is about the validation of past acts in relation to rates limitation.
        There are three matters that need validating and which the clause covers. First, the clause validates any orders made under section 2(3) of the Rates Act 1984 before the passing of the Bill. These orders have the effect of exempting local authorities from being selected for rate limitation if their total expenditure is less than the specified figure. That level is now £11·1 million for English authorities and has been increased by two successive orders from the figure of £10 million, originally specified in the Rates Act.
        Secondly, the clause validates anything done by my right hon. Friends before the passage of the Bill for the purpose of part I of the 1984 Act in relation to the years 1985–86 and 1986–87. It validates rates limitations for those years.
        My third point is that made by the hon. Member for Blackburn. The clause validates any designation of an authority for rate limitation for 1987–88 and any determination and notification of an expenditure level for 1987–88, before the passing of the Bill.
        As the hon. Member for Blackburn said, the clause provides that validation will have effect notwithstanding any decision of a court whether before or after the passing of the Bill purporting to have contrary effect. The clause thus provides the validation necessary if there is to be certainty as to how the law stands in relation to these decisions. The clause plays a key role in enabling us to maintain the status quo. That is why we consider that that is an essential part of the Bill.
        The reason for clause 6 is exactly the same as that for clause 4(6), mentioned by the hon. Member for Blackburn —to make it absolutely clear that the past decisions described in clause 6(1) to (3) are valid even if a court, having heard a case before enactment of the Bill, declares the decision to be invalid on the basis of existing law. At the late stage at which we are now, when authorities have to make their decisions and determine the rate on 1 April, it is absolutely essential that we pass the Bill with full validation and without being at risk of returning to the present position, with the problem over definition.
        Mr. Straw: The Minister says that the clause has been drafted to provide certainty and that that has to be balanced against the need for justice. Clause 6(1), for example, relates to orders laid before the passing of the Act. The minute the Act comes into force, that deeming provision will come into force. If that was the only point of issue in a court, it would find in favour of the Secretary of State. Why is it then necessary to exclude any possibility of court action, including circumstances in which, procedurally the Secretary of State may have erred?
        Dr. Boyson: As I have already said to the hon. Gentleman, I understand and appreciate why he is putting that point. We must be certain that the validation stands up without threat so that rate-capped authorities know what the situation is.[Interruption.] The hon. Member for Newham, North-West (Mr. Banks) may intervene if he wants to. I know the strength of his feelings on almost every issue that comes up in Committee.
        Rate capping this year is a one-year matter. For the authorities that were rate-capped last year and those that

        89
        will be rate-capped for the first time this year, we have made special arrangements for this year only. The following year we shall revert to the normal procedure of individual decisions on individual boroughs. But this year we must act so that the authorities know where they are and so that there can be no more doubt on the level of rates that will be allowed or on the level of expenditure.
        Mr. Straw: I regard the Minister's explanation about the need for subsection (4) as tautologous and wholly unsatisfactory. As I explained, we oppose the clause, and hope to come back to it when the other place has considered the matter.
        Question put and agreed to.
        Clause 6 ordered to stand part of the Bill.

      Clause 7

        RESTRICTIONS ON RATING AND PRECEPTING
        Mr. Straw: I beg to move amendment No. 106, in page 6, line 15, at end insert—
        '3(A) Subsection (2) above shall not apply to designated authorities referred to in section 2(6)(g), (h) and (i) of the Rates Act 1984.'.
        I hope that you will accept, Mr. Armstrong, that it would be for the convenience of the Committee, and will allow a proper debate on the rate-capping procedures in the Bill, to discuss amendment No. 107 and the amendments grouped with it, as well as those grouped with No. 106.
        The First Deputy Chairman of Ways and Means (Mr. Ernest Armstrong): If that is for the convenience of the Committee, we shall discuss at the same time the following amendments: No. 107, in page 6, line 17, leave out from 'determined' to end of line 18, and insert—

        '(i) The preliminary maximum limit shall be determined in accordance with Schedule 2 to this Act.

        (ii) As soon as practicable after carrying out his duty under subsection (5) below, notifying in writing and consult each designated authority in respect of the preliminary maximum limit applicable to it under sub-paragraph (i).

        (iii) If the preliminary maximum limit notified to a designated authority by the Secretary of State is accepted by the authority within seven days, the Secretary of State shall serve a notice upon it specifying that limit as the maximum limit.

        (iv) If the designated authority and the Secretary of State agree on a different maximum, the Secretary of State shall serve a notice upon it specifying the agreed limit as the maximum limit.

        (v) In any other case, the Secretary of State shall, as soon as resonably practicable after consultation under sub-paragraph (i) above has concluded, prescribe a maximum limit, by specifying by Order a maximum equal to or greater than the preliminary maximum limit, and shall serve a notice upon the designated authority specifying the maximum limit prescribed for it under such Order.

        (vi) The power to make an Order under sub-paragraph (v) above shall be exercisable by Statutory Instrument and no such order shall be made until a draft of it has been laid before and approved by a resolution of each House of Parliament.'.

        No. 108, in page 6, line 17, leave out
        'with Schedule 2 to this Act'
        and insert
        'with the procedures for redetermination set out in Part I of the 1984 Act and in accordance with the decisions of a court.'.
        No. 112, in page 6, leave out lines 23 and 24.
        No. 113, in page 6, line 26, after second 'the', insert 'preliminary'.
        90
        Government amendment No. 114.
        No. 115, in page 6, line 29, after second 'the', insert 'preliminary'.
        No. 117, in page 6, line 30, at end add—
        '(d) a period of notice, which shall be not less than two weeks, within which the Authority may apply for the application of the formula to be reconsidered; and the results of any such reconsideration may be brought into effect by the Secretary of State by Order in substitution of the relevant formula in Schedule 2 to the extent that it applies to that authority, or any other designated authority as the Secretary of State sees fit.'.
        No. 118, in schedule 2, page 11, line 33, after 'the', insert 'preliminary'.
        No. 120, in schedule 2, page 11, line 35, leave out sub-paragraph (1).
        No. 119, in schedule 2, page 11, line 35, after 'of', insert 'the Inner London Education authority and'.
        No. 122, in schedule 2, page 11, line 43, leave out from 'is' in line 43 to end of line 44.
        No. 129, in schedule 2, page 12, leave out lines 1 to 13.
        No. 126, in schedule 2, page 12, line 8, leave out '1·025' and insert '1·05'.
        No. 189, in schedule 2, page 12, line 8, leave out '1·025' and insert '1·04'.
        No. 127, in schedule 2, page 12, line 12, leave out '1·02' and insert '1·14'.
        No. 130, in schedule 2, page 12, line 14, leave out subparagraph (6).
        No. 138, in schedule 2, page 13, line 3, at beginning insert—
        'In the case of the Inner London Education Authority B is the amount which before 19th December 1986 the Authority submitted under section 65 of the 1980 Act (Information) as the amount the Authority estimates as its total expenditure for the financial year beginning in 1986 (taking, if more than one such amount was submitted before that date, the latest to be so submitted). In the case of other authorities.'.
        No. 141, in schedule 2, page 13, line 14, after 'the' insert 'preliminary'.
        Mr. Straw: I shall be as brief as I can, Mr. Armstrong, and I hope to catch your eye at the end of the debate as well, if it is necessary.
        Three years ago, the Rates Bill was just beginning its Committee stage. On the Floor of the House and in Committee, the Labour Opposition objected to the principle of rate capping, to the idea that it was right and sensible for the Government to seek—
        Dr. Boyson: I am sorry to interrupt the hon. Gentleman. I want to be clear about the basis of our discussions. Are we on amendment No. 106 and amendment No. 116—
        Mr. Straw: No. We are on amendments Nos. 106 and 107 and their groups.
        Dr. Boyson: I see. I am now clear what amendments we are on.
        Mr. Straw: As I said, we are seeking to use the two groups of amendments as an opportunity to debate the effects on local authorities of rate-capping procedures in the Bill.
        We objected to the principle of rate capping because we thought it was wrong and not sensible for the Government to seek to impose and substitute their judgment about the level of expenditure and the rates that should obtain in an individual area for the judgment of councillors and their

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        electors. That objection still stands, which is why the Labour party is committed to the repeal of the Rates Act and, pending that repeal, to refusing to use its powers.
        In the House and in Committee the then Secretary of State, the right hon. Member for Wanstead and Woodford (Mr. Jenkin), sought to assuage the concerns not only of Labour Members but of many Conservative Members about the constitutional change that was to be made by rate capping, in the relationship between the Government and local authorities. The then Secretary of State spent many hours, as I clearly recall, spelling out a careful procedure for rate capping, which he claimed would be fair to local authorities. He said that the fairness was encapsulted in two sets of operations—first, in applying so-called principles of rate capping, which would act on all authorities equally so that an individual authority could not be picked out unfairly simply by the whim of the Secretary of State.
        Secondly, authorities having been brought into the rate-capped net by an application of general principles, they would be given careful individual consideration, on their merits, with regard to the Secretary of State's decision about their expenditure levels, by way of an appeal procedure known as redetermination. After a hesitant start in the first year, caused by the suspicions of many of the rate-capped authorities about the way in which redetermination would work and the fact that it could trigger powers of the Secretary of State to impose even lower expenditure limits than previously, I will not say that the redetermination procedure worked satisfactorily, but at least it enabled the authorities, when they felt that they were badly done by, to make their case to the Secretary of State, so that he made a decision on the individual merits of the case that they put forward.
        Now we find that all the undertakings that the then Secretary of State gave the House and the Committee about the way in which the individual merits of the authorities' expenditure would be taken into account are to be swept aside by the Bill. In place of individual redetermination and individual determination of limits, we find in schedule 2 lengthy algebraic calculations by which authorities' rate limits are to be determined by formula. I know that my hon. Friend the Member for Newham, North-West (Mr. Banks) is one of the House's algebraic experts, and he knows this formula by heart:
        "(EL-(BG + E)) x 100/RV)+T"
        That formula is now to be applied without exception and without individual consideration to a large number of authorities that happened to be rate-capped last year. The same formula is applied to newly rate-capped authorities. They thought that they would get a 1 per cent. increase in their original expenditure limit but they now find, when they read the correction sheet that has been handed around, that they get a 2 per cent. correction. But in every case except one, to which I shall refer, the individual merits of the authority are not considered. The only case in which the individual merits are considered is the Inner London education authority. My hon. Friend the hon. Member for Holborn and St. Pancras (Mr. Dobson) will discuss its plight at greater length.
        I declare an interest not only as a former member of ILEA but as a parent of children in ILEA schools. On any examination, the way in which ILEA has been treated by
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        the Bill and the Secretary of State is absolutely outrageous. It is to have an uplift in its expenditure limit of 0·6 per cent. No other consideration will be given to it in respect of the teachers' pay settlement. All the other education authorities will receive what is known as the T factor to pay for the teachers' settlement, over the previously accepted rate of inflation, but ILEA will receive an increase of 0·6 per cent. I am fed up with the ignorant attacks that are made on the ILEA, especially by those who have personal knowledge of the work of that authority.
        Mr. Tony Banks: They take advantage.
        8 pm
        Mr. Straw: I gave the hon. Member for Northampton, North (Mr. Marlow) notice that I intended to say this. On many occasions in the House he has made outrageous attacks on ILEA and its profligacy, yet the hon. Gentleman has close personal knowledge of at least one ILEA primary school, and he has not offered any criticism of the standard of provision in that school, a standard of provision which may be adversely affected if this kind of expenditure limit goes through.
        I shall briefly set out how the principal amendments would operate. The Secretary of State is claiming that there is no time to operate the proper redetermination procedure. Our amendments translate the formulae in schedule 2 into preliminary maximum limits rather than final ones, and prescribe a further procedure to be followed by the Secretary of State closely based on the rate-capping model. The purpose of those amendments is to re-establish the redetermination procedure abandoned for 1987–88 in the Bill. The amendments recognise the legal difficulty over past definitions, but demonstrate that there is no necessary reason why the Secretary of State cannot follow a proper procedure which recognises individual needs, rather than a blanket set of formulae in primary legislation.
        The main amendment, No. 107, sets out a tight procedure which may be followed by the Secretary of State for the modified redetermination. The formulae in schedule 2 would be preliminary and for discussion purposes. The Secretary of State would then be required to inform authorities and consult them as soon as practicable. An authority could accept the limit within seven days, whereupon a notice would be issued to that effect. Likewise, a notice would be issued in a case where a different maximum was agreed. In the case of a disagreement, the Secretary of State would impose a maximum by order subject to affirmative resolution by both Houses, and after consultation an order could be made as soon as reasonably practicable. I will come back to the importance of the order-making procedure.
        The whole procedure could be over in a matter of weeks, and gives the lie to the urgency claimed by the Government. If they will agree these procedures and delete the other contentious and unnecessary areas of the Bill, it will achieve its objectives more quickly than seems possible at present. Designated authorities would, however, as previously, have the opportunity to argue for a redetermined limit.
        I shall now deal with amendments Nos. 108 and 117, and I shall say a word about the need for votes on affirmative resolutions. Amendment No. 108 would restore the previous redetermination process intact—

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        that is an alternative to amendment No. 107. Amendment No. 117 would allow a period of two weeks for local authorities to apply for redetermination and for a subsequent order to vary the application of the relevant formulae in respect of one or more authorities. Taken together, those two amendments act as an alternative to No. 107.
        I now return to the matter of orders. Not only are the individual authorities being denied proper consideration of their expenditure circumstances under the Bill, but so too is the House. We were told time and again by the Secretary of State that his decisions on expenditure limits and rate limits would be subject to proper legitimation by the House. For the last two years, there have been full-day debates on the rate-capping orders. Those debates were essential, because, since the passing of the abolition Act over 40 authorities—almost all the authorities within inner London, and many of the major joint boards outside inner London—are now subject to rate capping. Under this procedure there will be no opportunity for the House or the other place to discuss the effect of rate-capping orders upon individual authorities, save for this debate. We probably have no more than two hours for the debate, which is wholly unacceptable when we consider the consequences for many authorities and many people within those authorities of these rate-capping decisions.
        I hope, even at this late stage, that the Secretary of State and the Minister in his stead will accept the sense of what we are proposing.
        Mr. Roy Galley: May I briefly refer to amendment No. 189 standing in the name of my hon. Friend the Member for Batley and Spen (Mrs. Peacock) and myself? It is a point which relates to fire authorities, and more particularly to the west Yorkshire fire and civil defence authority. It is similar to many of the amendments in the section, and it is in the form of special pleading. Our motivation is concern about the financial position of the west Yorkshire fire and civil defence authority in 1987.
        There has been considerable progress on a detailed process of redetermination on the expenditure limit for that authority. The initial bid was for a total redetermination of £3·7 million. That was based on a 1985 report about fire cover throughout the whole of west Yorkshire, which attempted to improve arrangements in certain parts of the county and made a number of other desirable additions to the current provision. Such a bid for resources had to be seen in the light of a report by Her Majesty's inspector of fire services in 1986, who expressed the view that
        "The present deployment of men"—
        in west Yorkshire—
        "is insufficient to maintain appliance manning to the accepted standards."
        One has to look at the £3·7 million redetermination bid in a wider context. One has to strike a balance between what is essential and what is desirable; what the ratepayer can afford and the appropriateness of efficiency improvements. The more important figure is not so much the total redetermination of £3·7 million as the £1·7 million that will be required in 1987–1988 to maintain current levels of fire cover and general service provision in west Yorkshire. That £1·7 million, over and above the initial expenditure limit given, is the minimum amount required to provide current levels of service. My hon. Friend may say that that is greater than the rate of inflation and therefore we cannot contemplate it. But 85 per cent. of the
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        costs of the west Yorkshire fire authority are manpower; other overheads are only 15 per cent. and there is little that can be done to influence that 15 per cent. Eighty-five per cent. of the figure is manpower costs, and pay is determined, as my hon. Friend knows, on the basis of the national formula, which is automatically agreed. I understand that most firemen this year received an increase of 7·2 per cent., so it is necessary to build that into any calculations of the finances of that fire and civil defence authority.
        West Yorkshire fire authority seems to be quite an efficient authority which, over the last couple of years, has sought a considerable number of efficiency improvements. It has reduced the number of special and pumping appliances, taken new initiatives in regard to training arrangements, improved organisation of transport, improved property management and improved the use of non-uniformed staff. The fire authority is competent and bears comparison with that of any other metropolitan area in the country.
        The motivation behind the initial bid for redetermination was not simply to improve the provision for the fire authority but to obtain a better deal for west Yorkshire. If one compares that with other metropolitan areas it seems to do quite badly. We are treated unfairly in our part of the world and we seek to be treated more fairly.
        Mr. Tony Lloyd: The hon. Gentleman is dealing with an important amendment, which is similar to one that I tabled. I support his case for west Yorkshire. Greater Manchester also feels unfairly treated, but it is generally recognised that west Yorkshire is probably the least advantaged of all fire authorities. As I have a vested interest, I would be delighted if the hon. Gentleman would say whether he intends to put this to a vote.
        Mr. Galley: It is rather too early in the proceedings to answer that question. I shall see what my hon. Friend the Minister has to say before I decide, and I shall also have to consult my hon. Friend the Member for Batley and Spen.
        Mr. Allen McKay: I am a little disappointed in the hon. Gentleman's reply. Labour Members were contacted continually last week by members of the Fire Brigades Union in west Yorkshire, asking us to support the hon. Gentleman's amendment. We have decided full-bloodedly to support the hon. Gentleman's amendment in the Lobby tonight.
        Mr. Galley: I find it rather odd that members of the Fire Brigades Union in west Yorkshire should have contacted a Member from south Yorkshire but not me on this matter. I am seeking to put the case for west Yorkshire, and I shall continue to do so as well as I can and to seek to obtain the best deal possible.
        Mr. Allen Roberts: Will the hon. Gentleman give way?
        Mr. Galley: No, I shall not. Allow me to proceed with my next major point about the fire and civil defence authority for west Yorkshire, which is the matter which I am concerned with. We seem to fare badly compared to other metropolitan areas. The most poignant point that can be made is that west Yorkshire has the highest rate per pound and next to the lowest level of total grant percentage.

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        It is obviously not possible in the Bill to deal specifically with individual fire authorities and others. Therefore, my amendment seeks a revision of the formula slightly to increase the expenditure level for all fire authorities. The formula in the Bill would reduce the shortfall required for current service levels to be maintained—I emphasise that—to about £800,000. Instead of the previous shortfall of £1·7 million, the 2·5 per cent. uplift formula in the schedule would reduce that shortfall to £800,000. Amendment No. 189 would add £500,000 to the expenditure level. Therefore, it would be somewhat less than the total that we sought for west Yorkshire, but it seemed to be a reasonable compromise and would come near to the £1·7 million figure that we seek. If it were accepted, it would ease the operational problems in the course of the next financial year. It would mean an increase in the precept of 4 per cent., slightly more than the rate of inflation. The total addition to public expenditure would, if my hon. Friend were to accept the amendment, be small across all metropolitan fire authorities.
        I assure my hon. Friend that I would not be proposing such an amendment if it did not relate to a vital service, about which the general public in west Yorkshire are rightly concerned, and if the fire authority was not efficient. Therefore, I hope that it will be possible for my hon. Friend to make some moves in my direction to give some sympathetic consideration to this modest amendment. If he is unable to do anything this year, I hope that he will at least say that we shall have a fair redetermination in subsequent years.
        Mr. Bill Michie: I want to speak to the amendments relating to rate capping and redetermination as they affect Sheffield, and, in particular, paragraph 22 of schedule 22. The effect of rate capping and the failure to get redetermination on local authorities such as Sheffield has already been described as serious by many of my colleagues. The effect upon education, housing, transport and the south Yorkshire fire service has been explained time and time again with little effect. I am assured that my colleagues from south Yorkshire will be discussing those issues later, particularly that of the fire service, as will my colleagues from west Yorkshire.
        8.15 pm
        I want to concentrate for a short while on a report that I received at the weekend from the family and community services in Sheffield on the implications of the Department of Health and Social Services inspection of elderly people's homes in Sheffield. Obviously there has always been great concern about the standard of accommodation and services for elderly people. In August 1986, the DHSS inspected those homes and the final results have now been made known to us. Frankly, they are worrying, to say the least.
        The recommendations have considerable implications for revenue funding. Bearing in mind that Sheffield is rate capped and has no chance of redetermination, the local authority is in a catch 22 situation. The recommendations talk about the action that should be taken to maintain the fabric of buildings and the necessity for the repair and maintenance of building stock to be carried out quickly. Due to the significant building programme in the early
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        1970s many residential units now need considerable maintenance and redevelopment, which is obviously costly.
        The current levels of revenue expenditure available for repairs and maintenance mean that only essential and emergency repairs can be carried out. Over the years, those have been carried out, but as Sheffield was rate-capped not last year but the year before and again this year, some of those programmes have, slowly but surely, been coming out of "synch", as we call it, because of financial problems. The deterioration of existing services and maintenance will continue unless an additional £145,000 per annum is found. That will be difficult given the financial restrictions of legislation on the council.
        Maintenance programmes already identified by the DHSS include £3,000 for the maintenance of hoists in bathrooms in the homes of elderly people. That is a small item but since, as I have said many times in the House, Sheffield is top of the league in its number of old age pensioners, certainly those over 70 and 80 years of age, that is a serious problem that must be resolved. With present financial constraints, that seems almost impossible.
        The report states that funding needs to be made available for improving the environment. That includes decoration and carpeting, which may seem something of a luxury these days, but the DHSS believes that we should provide such an environment, and the Sheffield city council agrees. But the cost of that cannot be plucked out of thin air. It must be put into revenue and capital programmes, but that cannot now be carried out.
        The report also talks about three particular capital expenditure areas which have revenue consequences— the fabric of the buildings, the improvement of air and water temperatures, the provision of better storage space and toilet facilities, and so on. There is an immediate need to carry out external work to approximately 25 of the adult residential units. That would incur an additional capital expenditure of approximately £1·7 million. These projects have already been identified in the report.
        Unfortunately, due to the increasing restrictions on the social services budget over the past two or three years, delays have occurred in the regular maintenance of buildings. Strangely, my next point ties in nicely with the debate about fire service restrictions; fire precaution upgradings have not been carried out, because of the financial restrictions in the past year. It must be frightening for all right hon. and hon. Members to realise that local authorities are so severely restricted financially that they cannot carry out the upgrading of fire precautions in the homes of the elderly.
        I will leave my hon. Friends to discuss other items affecting Sheffield and south Yorkshire. However, unless we have additional input of revenue and capital there is no way that we can carry out what I believe to be our moral as well as statutory duties. There is little point in the DHSS inspecting homes and making recommendations if other Departments are severely financially restricted. I hope that the Minister and the Secretary of State will take my points on board and I hope that at least some help will be given to alleviate the suffering and pressure on councils today.
        Mr. Allen McKay: I want to refer to a point made by the hon. Member for Halifax (Mr. Galley) when he moved the amendment. The hon. Gentleman wanted to know why the Fire Brigades Union from west Yorkshire should get

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        in touch with me. The answer is obvious. As the amendment was tabled by the Conservatives, the union wanted to ensure that Labour Members would support that good amendment. That is why I was approached. The union wanted me to forget my differences. It considered the amendment to be so important that it wanted me to support it. When and if the amendment is put to the vote, Labour Members will not be found wanting in support of the amendment.
        I want to consider the fire brigade's position in south Yorkshire. The position in south Yorkshire is very similar to that in west Yorkshire, although there is a slightly different and difficult problem following Her Majesty's inspector's report and the Secretary of State's imposed reduction in the authorised establishment of existing fire service personnel. The service was inspected by the Home Office inspector. That report determined what the manpower levels in south Yorkshire should be. It authorised an establishment for the Yorkshire county fire service of 1,114 whole-time and 196 part-time posts. Those are the Home Office figures of what is considered to be adequate to cover the south Yorkshire area.
        The inspector arrived at the figures by comparing the manpower level in south Yorkshire with that in other areas and by applying a standard formula. The fire service in south Yorkshire is already below the establishment determined by the inspector, the Secretary of State and the Home Office. Rather than reduce the figures, manpower should be increased to the Home Office standard. However, the Bill will further reduce the already inadequate manpower.
        On the one hand, the Home Secretary says that we must increase the number of firemen on the books to comply with the statutory requirements. On the other hand, the Secretary of State for the Environment claims that we must reduce the number which the Home Office claims is inadequate for fire cover. That is ridiculous.
        As the hon. Member for Halifax said, 80 per cent. of fire service expenditure in any area is accounted for by manpower. The Bill is intended to save money, but there is no way that money can be saved other than by reducing the already inadequate level of manpower. The fire chief is already worried about the service, and he is now even more concerned after seeing the figures. He realises that he will not be able to meet his statutory obligations on fire cover.
        As I said in the previous debate, I was a retained fireman for 14 years in the south Yorkshire fire service. We prided ourselves on every turn-out that we could reach a fire within the time stipulated by the Home Office because of the speed and efficiency of the service. We were able to provide a back-up to every station within our locality so that, as in a puzzle or a game of chess, one mobile moved in to cover another mobile when that went out. We maintained that standard of operation, which could be achieved only by having the proper appliances, the right number of men and efficient training. We provided a fire cover on which people could depend, and the people praised us when we turned out.
        What will happen now? The Secretary of State has laid down certain objectives for the fire service. He stipulates the level of cover that must be provided. He states that efficient and sufficient machines and efficient and sufficient men must he provided. He specifies a time for the turn-out and the time to reach fires, large and small. The fire chief of south Yorkshire fire service is now worried
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        that fire cover will begin to deteriorate and that the turn-out time will lengthen. In an attempt to meet the requirements laid down by the Secretary of State for the Environment, the fire chief will have to stop training because he needs sufficient men to cover for fires. He will have to use the trainers to man the service.
        The south Yorkshire fire service has not had a new fire applicance for the past two years because of the need to make savings. Rather than providing a replacement for a mobile, mobiles will have to be in the garage for longer periods, they will have to be maintained more and the cost of maintenance will rise. That is a queer way to save money.
        There is also a strong possibility that redundancies will take place in what is already an inadequate level of manpower. Indeed, the new training establishment will not open. There will be no training establishment to keep up with the Home Office requirements, In addition, the superannuation scheme will have to be curtailed. That will not help the firemen's morale, as they have looked forward to that scheme and accepted it willingly.
        All these factors will lead to a loss of confidence within the fire service. Is it right for the Home Office to create a figure which is already below the stated manpower level for adequate fire cover and for the Secretary of State for the Environment to claim that he will not provide the money to supply the number of firemen and appliances which the inspector says is adequate to provide an efficient fire cover in the service? The Secretary of State must answer that question tonight.
        Can the Secretary of State explain how the south Yorkshire authority can fulfil its statutory duties when the Bill implies that there will be a reduction in essential training? Can he explain how the fire chief will be responsible for the inadequacy of his service, not because of him, his plans or his men, but simply because the Secretary of State for the Environment will not meet the financial requirements of the Home Office'?
        8.30 pm
        If the Secretary of State has read the Yorkshire Post recently, he will know why I am seeking his views on the assessment of the fire service. The Yorkshire Post has highlighted the fact that, because of the way in which home furniture is built, the rate of death by fire is increasing dramatically. We must look not only to the fire service but to legislation to prevent that from happening. To prevent such deaths, the fire service must make more inspections, but, if the money is not provided, it will make fewer inspections and the position will become worse. In south Yorkshire, during the past 10 years, the death rate from fire has doubled. We should be asking why and what we can do about it instead of cutting a service that is already not good enough. We should be examining those matters, not ways of saving money. It could—I do not say "would"—result in the loss of human life and property, the saving of which is the prime duty of any fire service. As my old fire chief used to say to me, I would sacrifice a £24,000 appliance to save one life. The Secretary of State should consider that.
        I also wish to highlight the way in which expenditure is calculated and relate it to Barnsley. At present, Barnsley has about 22 per cent. unemployment, largely because of the rundown of the main industries in the area. I have always been taught that where manpower is available,

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        where there are good communications and where land and factory space are available, industry would come in. That has not happened in Barnsley.
        The authority wondered why it was being treated differently from other authorities in relation to expenditure and grants, so it decided to examine what was happening in Barnsley. It discovered that it was being penalised because the grant was determined on figures based on the 1981 census. Since events have moved so quickly in the area, the 1981 census is giving the Secretary of State an inaccurate picture of Barnsley and district. With the factor in the formula, there is room to take those matters into account.
        Since April 1981, the number of people out of work in Barnsley has increased by 72 per cent., compared with 32 per cent. generally in the United Kingdom. Between January 1985 and April 1986, of the travel-to-work areas, Barnsley had by far the highest percentage increase of unemployment—22 per cent. Between April 1984 and April 1986, the number of people who had been out of work for more than a year increased by 29 per cent., compared with an average of 11 per cent.
        Recently the Minister of State said that there was a shift towards service employment. But Barnsley has less service employment than any other local authority area. It has the fourth highest percentage of people aged over 75 who are supported by the local authority. It has the twelfth highest percentage in the metropolitan districts of children aged under 18 in local authority care. Between 1979 and 1986, the number of people receiving supplementary benefit doubled. The formula does not take those matters into consideration. It must be reconsidered and altered because its application to the authorities is wrong.
        To return to my argument on the fire service and transport, the Secretary of State promised that some of the matters that I have highlighted would be taken into consideration in the redetermination. The Bill has stopped that redetermination, so his promise means nothing, unless he will meet representatives of the fire service and transport and redetermine their expenditure.
        Mr. Meadowcroft: I support the general case set out in amendment No. 106 for a fairer and more equitable way of determining rate levels under the Bill. I commend the hon. Members for Halifax (Mr. Galley) and for Batley and Spen (Mrs. Peacock) for tabling amendment No. 189. I am well aware that the Minister is in a difficult position. He is not a Home Office Minister and he must defend the measure, but it seems that something has gone wrong with the Government's calculations. I suspect that there has been a simple arithmetical error which no one is prepared to admit. I cannot believe that the Government would be prepared to continue along the road where the nationally agreed standard of service cannot be met within the budget allowed. It is ludicrous for the Home Office to apply standards and then for the Department of the Environment to say, "You cannot have the cash to meet them." Unfortunately, that is the present position of the west Yorkshire fire service.
        The other crucial point, which is demonstrated by the fact that the amendment is in the names of two Conservative Members, is that there has been complete unanimity of approach among members of the west Yorkshire fire authority. They have formed three-party
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        delegations to meet the Minister and other hon. Members, and the recommendation to hon. Members came from all three political groups on the fire authority. Rarely in our debates, or, indeed, in local government, can we secure unanimity on one issue and sustain it for some time. I beg the Minister to take into account the fact that no one in west Yorkshire is endeavouring to make political capital from this. No one has said, "If you do not get this, we shall knock you over the head in the press." There has been genuine anxiety about an emergency service.
        I appreciate the way in which the hon. Member for Barnsley, West and Penistone (Mr. McKay) spoke from the heart and with experience—and at some length. If we are to work constructively, as is so often commended to us by Mr. Speaker and others, this is exactly the sort of amendment that the House should support. We are not raising great scares about what might happen, but simply accepting the agreed position of all the parties in west Yorkshire and of the fire service officers that they will be unable to recruit the staff that they need. Indeed, they will have to stop recruitment to the fire service if they cannot secure a change in the legislation. I hope that the Minister of State will not think that this debate merits the good natured banter that we often have across the Chamber, welcome though that is. It is a matter that must be treated seriously. When the Committee divides on the amendment, it will be interesting to see whether we can secure the same unanimity in the House as we have in west Yorkshire.
        Mr. Allan Roberts: I rise briefly to mention the direct effect that this clause, if unamended, will have on the Yorkshire fire service, the Merseyside fire service and the police authority.
        The hon. Member for Halifax (Mr. Galley) should not be surprised that Yorkshire Labour Members have been contacted by the Fire Brigades Union. The effect of his amendment has been significant in that all hon. Members of all parties have been contacted about it. I was not contacted by anyone from Yorkshire, but by the Merseyside county fire brigade chief officer, Mr. Wilmot, who sent me a telegram that he received from the west Yorkshire fire authority urging me to support the amendment and pointing out that the effect of the limitation is to leave that authority with insufficient resources to maintain existing standards of service which, it says, we should be aware, from previous material supplied, falls below nationally recommended levels.
        That telegram was sent to me and other hon. Members who represent Merseyside constituencies partly because Merseyside is in the same predicament with regard to this legislation. When the committee of the Merseyside fire and civil defence authority met on 26 September its members considered a report submitted by the treasurer, who advised that the potential expenditure for 1987–88 would be £2·161 million in excess of the £29·284 million expenditure level determined by the Secretary of State.
        A request was made by the elected members of the committee for a redetermination of expenditure to £31·455 million. That was a sensible thing to do, especially as the legislation allowed for an application for redetermination. A meeting took place between members and officers of the authority and Home Office representatives, who are not here to answer. That meeting took place on 19 November

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        1986. Further information in support of the authority's bid for redetermination was submitted, but this legislation abolishes the right of appeal for redetermination.
        The standard formula applied to the Merseyside fire and civil defence authority and to all authorities for determining the maximum precept uses the expenditure limit as originally determined at £29·284 million, plus 2·5 per cent., which still produces a totally inadequate expenditure level of just over £30 million. That is a fait accompli. If the Bill, unamended, becomes an Act all the efforts that they thought were legal to seek redetermination and to get a level of expenditure that would enable them to provide effective and efficient fire and civil defence services on Merseyside will he for nothing.
        On 26 September 1986 the treasurer advised that the expenditure to which the authority would be committed in 1987–88 totalled £30.345 million. If one looks at the position as a result of the general blanket redetermination in this clause, one sees a shortfall of £1,745,000. The command, control and vehicle replacement programme cannot go ahead and manpower cannot be increased to fulfil the authority's full obligations for dealing with fire and the other disasters and hazards that the fire brigade has to deal with. As my hon. Friends have already said, this is a matter of life and death. The treasurer's report includes the figure of 1,593 full-time fire officers for which the authority wants money. The additional cost of maintaining that establishment, compared with the present establishment of 1,505 plus recruits, which was approved by the Home Office, is £445,000.
        In 1986, the Merseyside authority followed a detailed assessment of potential expenditure for 1987–88 and submitted an application for redetermination of that expenditure limit to the sum of £31·445 million. That application has been effectively rejected, not by a redetermination process, not after representations to a Minister who considered the whole thing in a balanced way, but by this blanket piece of legislation and this clause that is before us now.
        It is scandalous that the Merseyside fire services should be so dealt with and given such scant attention by the Minister. I am not surprised that the authority placed on record its grave concern that once again the Government have shown a callous disregard for the safety of the people of Merseyside by taking steps to provide insufficient capital resources to enable the authority to maintain the adequate fire cover in the region.
        8.45 pm
        The position is even worse for the Merseyside police authority. Since 1979 there has been a 40 per cent. increase in crime on Merseyside. This Bill takes £6 million from the police authority. In the previous rate support grant settlement—one of the first of the three arranged by the Secretary of State—that police authority suffered a £6 million cut.
        In my constituency young people are easy prey to the hard drug pushers. Five years ago there was no heroin problem. A phenomenon of the Thatcher years is high youth unemployment and heroin coming in through the port and the airport, partly as a result of the cuts in Inland Revenue and Customs and Excise staff. Those people, who see no hope for the future because they have no job and no prospects, are being led astray by drug pushers in a way that previously did not happen. There has been a massive increase in crime on Merseyside. It is a major problem, yet
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        the party of law and order takes £6 million from the local authority in this redetermination. That is a scandal. I have received many representations, not just from the Merseyside police authority, its officers and elected representatives, but from the community, voluntary groups and policemen who have the difficult job of policing my constituency to ask for the replacement of this £6 million.
        If the Conservative Government were serious about law and order, they would not cut £6 million off the budget of a police authority covering an area like Merseyside with its problems and with a crime wave that has been stoked up by the industrial, economic and unemployment policies of the Government.
        Mr. Frank Dobson (Holborn and St. Pancras): I am sorry to have to speak on this matter because, since 1979, on innumerable occasions I have pleaded with the Government to adopt a sensible, sane and reasonably generous policy towards the Inner London education authority. On all occasions my efforts have failed.
        I should declare an interest. One of my children went through ILEA schools, came out at the other end and went to university. I am grateful to all the people who taught and encouraged her in all the difficult circumstances they faced—not from her, but from the Government—during the period when she was at school.
        Similarly, my eldest son is at that secondary school and our youngest son is at the primary school. They are the nearest primary and mixed comprehensive secondary schools to where we live.
        Neither of the Secretaries of State who are involved in this matter would need to declare an interest. The old Etonian Secretary of State for the Environment and the Secretary of State for Education and Science—I do not know which school he attended but it was certainly a public school—would not need to declare an interest about sending their children to Inner London education authority secondary schools. It is fair to say that the present Secretary of State for Education and Science, who has had much influence on deciding what happens on the education aspects of the Bill, has pursued a squalid, vindictive vendetta against ILEA, certainly as long as I have been a Member.
        First, he crept on to the Front Bench by launching a squalid and misleading attack on ILEA, thus endearing himself to the Prime Minister and getting himself a junior ministerial office. Since then he has pushed his way on to the Front Bench and continues his vindictive efforts to damage the authority.
        Mr. Richard Caborn: Is my hon. Friend giving the right hon. Gentleman a character reference?
        Mr. Dobson: The truth will out.
        The propositions which are set out in the Bill would lead to ILEA having to face cuts amounting to £125 million. There would be cuts of £19 million, because the Government are so incompetent that they cannot estimate accurately the existing level of ILEA's costs. There would be cuts of £40 million because no provision has been made for pay and price increases that are taking place and are likely to take place in future. There would then be a further £71 million of cuts, which would affect every institution in ILEA. They would mean substantial cuts in every form of provision that is now being made by the authority.

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        If there were any Conservative Members in their places who represent inner London constituencies, I have no doubt that they would claim that ILEA spends too much money. I note that there is not one Conservative Member who represents an inner London constituency in his place this evening, yet we are debating cuts amounting to £125 million in the provision that is made for the children of those whom they falsely claim to represent. As I have said, if they were here, some would say that ILEA spends too much money.
        It is a fact that ILEA spends an average of £1,265 per annum per pupil in its primary schools. On the same basis, it spends £1,940 per pupil in its secondary schools. That is a lot of money. But how much do Conservative Members spend on their children's education? Those who send their children to Eton pay £4,950 a year. The fees at Harrow are £5,850 and £5,760 at Winchester. If it is argued by Conservative Members that those sums include boarding fees, let us take account of St. Paul's which was attended by the Secretary of State for Education and Science when he was a lad. The fees for a day boy at St. Paul's are £2,925. For a day boy at Westminster school, the fees are £3,075. It is said that ILEA is a spendthrift authority, but it is spending at least £1,000 less on those who attend its secondary schools than the fees that are paid by some Conservative Members who send their children to schools in the private sector. Yet they tell us that ILEA should reduce its spending without any consideration of the problems that are faced by ILEA.
        I am not uncritical of ILEA. I recognise that there are wrongs within it and faults in all its schools. There are faults with many of its institutions and arrangements. I agree that improvements should be made, but unfortunately the authority has never had the time to turn its attention to effecting improvements since 1979. From that time onwards it has been able to do virtually nothing, apart from defend itself against squalid attacks, which have usually been led by he who is now the Secretary of State for Education and Science.
        I shall illustrate what would have to be done to bring about cuts of £71 million that even the Government have acknowledged they want. It is estimated that there will be slightly more than 1,000 vacancies in ILEA primary schools, and 677 of them would remain unfilled as a contribution to achieving a saving of £71 million. The Minister for Local Government introduced a Bill that addressed itself to special education. If he was serious when he introduced it, he should understand that 102 posts in special education in ILEA would not be filled as a result of the proposed cuts. Massive savings would have to be achieved in the support staff sector. They may be financial savings, but the schools will suffer.
        I regard school meals as one of the finest services that is provided. If anyone wants to help poor children, there is not a more clear, direct or cheaper way of doing so than ensuring that grub passes down their throats. Unfortunately, the service has suffered great damage under this Government. ILEA provides a holiday meals service for its children, but that will have to go if the proposed cuts are implemented. That means that for six or seven weeks during the summer some of the poorest children in the land will not get the meals that they have been receiving from the holiday meals service.
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        There would have to be massive cuts in the catering staff, which would do great damage to the incomes of some of the poorest families. It is usually women who work in the catering section and they perform as useful a task as anyone in the land, and certainly a more useful one than anyone who has occupied the Treasury Bench this evening.
        I accept that ILEA spends more money than many other education authorities. For example, it provides clothing vouchers for children aged over 15 years so that they are rather better dressed when they go to school. It provides education maintenance grants to enable children who are aged between 16 and 19 years to stay on at school. I thought that we were trying to encourage children to do that. The proposed cuts would entail a reduction of £189,000 in the provision of education maintenance grants. These are examples of what we are being asked to accept if the Bill is approved this evening.
        Mr. Tony Lloyd: It is unfortunate that there are no Conservative Members in their places who can speak about ILEA. I am sure that my hon. Friend will recall the recent reports of the Sub-Committee on Race Relations and Immigration of the Select Committee on Home Affairs, an all-party Sub-Committee, which was complimentary about the role that ILEA has played in the education of Bangladeshi children. That is precisely because of the imaginative approach that ILEA has adopted in an important area of education. No fair parallel could be found in any other education authority.
        Mr. Dobson: My hon. Friend has raised an important issue. Before the Secretary of State for Education and Science did a bunk from London and began to represent Mole Valley—one of the most prosperous areas in the country with the lowest level of unemployment of any English constituency—he represented Marylebone. That constituency is now represented predominantly by the hon. Member for Westminster, North (Mr. Wheeler), who chaired the Sub-Committee to which my hon. Friend has referred. It is a pity that he is not in the Chamber this evening to advocate that a greater effort should be made to implement its recommendations. The Sub-Committee drew attention in its report to the many Bangladeshi children in certain parts of London, including the area that I represent, and paid tribute to the efforts that ILEA was making to teach them English and to help them become literate in their mother tongue. Both aspects of that teaching are extremely valuable if these children are to become full and more valuable members of our society.
        About half of the intake of the secondary school that my children have attended are children of Bangladeshi parents. They are not a liability. They are our children. It is our duty to look after them, to bring out the best in them and help them to become the enormous asset that they can be to our country. We can only do our duty by them and the people who try to teach, encourage and help them if they have the resources.
        In the formulae of this ridiculous measure there is a key provision that would provide more money to help education authorities to pay for the forthcoming teachers' pay increase. Everybody recognises that ILEA has problems—indeed, I have outlined some of the cuts that it faces—but in this measure it is proposed that ILEA will not get a cent towards paying for the teachers' pay increase.

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        At present, young people in the capital city are facing the lowest and worst job prospects in its history. We face all sorts of villainy and crime outside our schools, as well as record levels of heroin addiction and all the problems that come with that. The people who work in the schools are doing their best to give our children a decent start. They are denied the necessary additional resources, and this measure would further reduce those resources.
        If the Government claim to be the Government of law and order and would like London to be a decent, orderly and civilised place in the future, they had better find more money to look after all those children because if they do not they will rue the day.
        9 pm
        Mr. Roger Stott ': I am grateful to you, Sir Paul, for allowing me to intervene.
        My hon. Friend the Member for Blackburn (Mr. Straw), moved the amendments as they were selected by Mr. Speaker. However, in this group of amendments there are a number which are related to specific issues. Certainly the debate has been wide-ranging and interesting. Unfortunately, it is rather distressing that so few Conservative Members are present for this debate—[Interruption.] Before the hon. Member for Nottingham, South (Mr. Brandon-Bravo) becomes too agitated I shall confirm his presence on the record. I recognise that he has been present throughout the whole of the debate. I see another Member on the Conservative Benches whose constituency I do not know—and I am sure he will enjoy the debate.
        When the hon. Member for Halifax (Mr. Galley) spoke to one of the amendments I had hoped that he would be supported by his hon. Friend the Member for Batley and Spen (Mrs. Peacock) but we have not had the pleasure of her company this evening. Perhaps the hon. Lady considers that the amendment she has put her name to is insignificant. That is entirely up to her.
        Mr. Meadow croft rose—
        Mr. Stott: I shall give way in a moment.
        I have listened to the contributions of my hon. Friends and the one Conservative Member on a number of issues that are concerned not just with local government. My hon. Friends the Members for Blackburn and Bootle (Mr. Roberts) spelt out the consequences of this legislation for local government. My hon. Friends the Members for Barnsley, West and Penistone (Mr. McKay) and Holborn and St. Pancras (Mr. Dobson) spelt out the consequences for education. No doubt my hon. Friend the Member for Stretford (Mr. Lloyd), if he catches your eye, Sir Paul, will elaborate on the difficulties of the fire services.
        The legislation impinges upon very important issues in terms of education, the fire services, local government and transport—which I shall speak about in a moment. I believe that it is a disservice to this Committee to see the Minister for Local Government in his place without the presence of a Minister from the Home Office or the Department of Transport. They should be here to listen to what my hon. Friends have had to say about the way in which the legislation will impinge upon those services.
        Mr. Meadowcroft: The hon. Gentleman has referred to the absence of the hon. Member for Batley and Spen (Mrs. Peacock). I believe that his comments were unfair because when amendments are tabled—this happens on the
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        Labour Benches—a number of names are put to those amendments but not all Members are necessarily present when they are debated. It is normal practice for names to be put down from particular groups of people in support of those amendments. Surely the crucial thing is whether the hon. Lady, together with her hon. Friends, is in the Division Lobby. That is what matters at the end of the day.
        Mr. Stott: I regret that I gave way to the lion. Gentleman for that somewhat pedantic point. Whether one is here or not may not be important to him, but it is to me. The name of the hon. Member for Batley and Spen was on the Amendment Paper in support of the amendment tabled by the hon. Member for Halifax. We shall be interested to see whether the hon. Lady goes into the Lobby with us when the amendments are put to the test.
        I wish to talk about amendment No. 127, which concerns transport. It is designed to safeguard the financial interests of the Greater Manchester passenger transport authority by introducing into the formula a factor that will ensure the determination of a maximum precept consistent with the authority's application for redetermination. The debate is about redetermination, whether we are talking about the fire service or the transport service. These services had been endeavouring to redetermine their budgets with the various Secretaries of State, when all of a sudden the Secretary of State for the Environment came along and moved the goalpoits 15 yards further on and left everybody in limbo.
        The Secretary of State has said that the standard uplift is designed to take account of the individual circumstances of PTAs and the information presented to Ministers in the now discontinued exercise of redetermination. My authority, and I suspect others, following the advice of counsel whom it employed, wrote to the Department of Transport asking how this could be achieved by a standard uplift. As far as I am aware, no answer to this specific point has been obtained, unless the letter from the Minister responsible for public transport that I received this evening is a letter to that point.
        The original pronouncements from the Departments that the formula would reflect the requirement of individual authorities have now been replaced by a statement that Ministers are confident that the formula included in the Bill is appropriate in the light of their policies. This was a statement in a letter to the clerk of the Greater Manchester PTA from the Department, written on 14 January.
        Mr. Alfred Morris: My hon. Friend is on a very important point. Is he aware that in the recent letter, the Secretary of State for Transport said he expected the Government's proposals—to inflict a shortfall of £11·4 million on the Greater Manchester PTA—to be subjected to close parliamentary scrutiny in these proceedings? What possible opportunity is there for close scrutiny? As my hon. Friend knows, not only bus services but the concessionary support scheme will be very badly damaged. In view of the Secretary of State's letter, are not these proceedings a parliamentary outrage?
        Mr. Stott: My right hon. Friend is right. As he and other hon. Members—not just Manchester Members but others such as my hon. Friend the Member for Sheffield, Central (Mr. Caborn), and Members from

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        Yorkshire—know, we have been endeavouring to draw this to the attention of the Secretary of State for Transport who, I suspect, like the Home Secretary on the fire service, has been caught out by the Bill. We were almost there in the redetermination of those budgets. Incidentally, the Secretary of State for the Environment was a former Secretary of State for Transport who was taken to court on more occasions than the Kray brothers, and he has introduced a Bill to make the whole procedure judge-proof.
        My right hon. Friend is right. Those negotiations were taking place in a climate of understanding, in which a redetermination was possible. Now, the Secretary of State for the Environment is moving the goalposts and disallowing all that went on before. He is leaving not just the transport services but the fire services far short of the budget requirements that they need to perform their duties. I am just about to come to the figure of £11·4 million to which my right hon. Friend referred.
        It is an outrage that we are not able to discuss this matter properly. Here we are, on a guillotined Bill that is being railroaded through, determining the levels of expenditure for PTAs and fire services in a debate lasting an hour and a half. What is more, Ministers from neither the Home Office nor the Department of Transport have come to the Chamber to listen to our recommendations, speeches or amendments.
        The total expenditure level notified by the Department last year to Greater Manchester was £74·1 million. The authority requested a redetermination of £84·6 million. Under the arrangements proposed in schedule 2, paragraph 2(5) of the Bill, the authority will receive only £75·16 million. Additional costs recently identified increase this shortfall in resources to £11·4 million, as my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) has already said.
        Therefore, three options are open to the Greater Manchester passenger transport authority and I suspect that those options are open to other authorities. Let us look at those options. How can that money be saved, how can the Greater Manchester passenger transport authority ensure that the £11·40 million is forthcoming either from balances or from savings? I am the first to agree that scope always exists to effect relatively small savings in organisational expenditure plans. A reduction of over 13 per cent. in less than a few months leaves only a few options open, and these do not extend to rail support. Rail support in Greater Manchester is £19·2 million, one of the highest levels of rate support in the United Kingdom.
        Under section 20 of the Transport Act 1968 the Greater Manchester transport authority has to give at least 12 months' notice before it can withdraw any support from British Rail. Therefore, that is not an option at this time. That leaves two other areas in which savings could be made. One is of £12 million in the subsidised network and the other is in the concessionary fare agreements. The subsidised network tendering process is extremely difficult because of deregulation. The authority has little room to manoeuvre or to make significant savings in that direction. I am a resident of Greater Manchester and represent the people in the area and I do not want to see the authority undermining the current network. It is worse than it was before deregulation.
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        If any savings are to be made, I submit to the Minister of State that they ought not to come from the subsidised network. The only other option open to my local transport authority, and, I suspect, to other transport authorities, is the subsidised network. That network is the one which provides transport for old-age pensioners. When the deregulation Bill was passing through the House the Minister accused me of frightening old ladies when I told him that the legislation we were discussing and which we finally enacted was bound to have an effect upon the subsidy which passenger transport authorities paid for subsidised fares for schoolchildren and old-age pensioners. I told the Minister at the time that I was not being alarmist, that it was his Government and the legislation that we were dealing with which were causing the problem.
        If Greater Manchester is to make the savings required to make up the shortfall of £11 million and if those savings cannot come from the networks subsidised under the current legislation, they can only come from concessionary fares. Are the Government saying that, in order to make up the shortfall which passenger transport authorities have not been able to make up because they cannot have a redetermination of their budgets, they will have to make it up out of the concessionary fare scheme? If that is not the case, the only thing that the Minister of State can do is to accept the amendment that we have tabled. If he does not, we have little or no room to manoeuvre.
        If the Minister were to concede the amendment, it would put us back to our redetermination position. If he does not concede—it is a shame that the Minister's colleagues from the Department of Transport are not sitting beside him—where are we going to find the £11·4 million for which there is a genuine, understandable and a recognised shortfall in my authority and in others? Are we to get the money from the subsidised network or from the concessionary fare schemes? Are we to say to the pensioners of Greater Manchester, "You now enjoy a concessionary fare scheme where you can travel throughout the county for 12p. However, because the miserable Government have introduced deregulation and because the crazy Secretary of State for the Environment has introduced a Bill that seeks to undermine the redetermination proposals, we shall have to increase old-age pensioner bus passes because we cannot find the money to run our transport system as we would like"? Those are stark questions and the stark realities we are facing.
        9.15 pm
        The Minister will no doubt receive advice from his officials as to how the amendment would impinge on the legislation that he is seeking to defend. I hope that his officials will advise him wisely because if he does not accept the amendment, I say in all candour, he must accept the responsibility that flows from not accepting it.
        Mr. Tony Banks: Amendment No. 107 translates the formula in schedule 2 into preliminary maximum limits rather than the final ones and prescribes a further procedure to be followed by the Secretary of State based closely on the rate-capping model. The purpose, as my hon. Friend the Member for Blackburn (Mr. Straw) has said, is to re-establish the redetermination procedure that was abandoned for 1987–88.
        I remind the House that during the passage of the original Rates Act 1984 Ministers made great play of the

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        redetermination machinery within it and encouraged all rate-capped authorities in the first year to talk to the Secretary of State to apply for redetermination. I do not recollect any of them going to the Secretary of State. I do not think that anybody went, because there was a genuine fear among Labour authorities that if they went, rather than make concessions, the Minister would just make things worse by imposing further penalties. When it was discussed in the subsequent year, the then Secretary of State—I do not remember which one because there have been so many—said that if people talked to him—he was obviously feeling lonely—he would not make things worse. He said that he might make things better. After that, some local authorities did go and speak to him.
        Our local authority—my hon. Friend the Member for Newham, South (Mr. Spearing) is in the Chamber—went to see the Secretary of State in order to apply for a limited redetermination as it was notified on 22 July that it was designated for selective rate limitation in 1987–88. Newham was notified that the expenditure level for 1987–88 on which the maximum rate would be set was £154·353 million. The expenditure level was based on the 1985–86 original budget plus 6 per cent. However, the original budget for 1985–86 is an unrealistic basis for any expenditure target or comparison unless it is adjusted for special accounting measures. We have raised that matter before. Newham applied for redetermination of its expenditure level to £175·540 million on the basis that, due to special accounting measures, the economies implied by the expenditure level determined by the Secretary of State were unachievable.
        We met the Minister of State on 27 November 1986 and emphasised that Newham was not necessarily seeking an ability to increase rates but rather to have an equitable share of resources, and recognition of the borough's special needs. We have all agreed that the meeting was cordial. I should like to run through the justification for our plea, because I want it to be on the record. I hope that, that when the Bill goes through unamended by the Opposition, perhaps a sympathetic peer will cast an eye over this part of our proceedings.
        Newham has the second highest level of urban deprivation in the country, according to the Department of the Environment's statistics. We have serious educational problems and, according to the Department of Education and Science, we have the highest level of social deprivation of the 96 local education authorities in England. We have a deepening housing crisis. We have the highest number of unsatisfactory dwellings which are unfit or lacking basic amenities and in need of substantial repair in the 32 London boroughs. We have acute housing stress and the fastest increasing homelessness in London. It has risen from 972 applicants in 1981 to an expected 1,900 this year. We have asked for extra resources to deal with the enormous homelessness problem, but our pleas have fallen on deaf ears.
        Newham has a significant level of population growth—the second highest projected increase in the 32 London boroughs between 1986 and 1991. We have the third highest number of births of the 32 London boroughs and substantial increases in the number of under-fives. We have a projected 21 per cent. increase in the number of people aged over 85 between 1986 and 1991. We have a large and diverse ethnic minorities population and the fourth highest percentage in England and Wales of residents of new Commonwealth origin.
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        We have the third highest rate of children born to mothers of new Commonwealth origin in London and, like many other parts of the country, high unemployment—17·5 per cent. We have a male unemployment rate of 21·3 per cent.—the sixth highest in London. We have had a major reduction in local employment recently, due to the closure in 1980 of the royal docks and the decline of associated industries. We have the fourth highest number of unemployed 16-to-19-year olds.
        According to the map, Newham is an outer-London borough, but it has inner-London characteristics. The severity of its problems, which require local expenditure, is greater than is found in many inner-London boroughs. Newham's expenditure per head is considerably lower than in inner-London boroughs and resources available from the Government are also considerably smaller.
        We have often pleaded with Ministers here and in meetings for partnership status for the borough. The case is unanswerable, but we have not been able to convince the Government—in spite of the fact that they accept that we are not exaggerating the problems—that we need more resources rather than less. There can be no doubt about the strength of Newham's case. It appears to have been accepted by Ministers and their departmental officers.
        Mr. Nigel Spearing: My hon. Friend knows that, if time permits, I hope to put forward a formula which would ameliorate the problems to which he has referred.
        Will my hon. Friend confirm that, at the meeting when all this information was presented to the Minister, the Minister said that the arguments were put fairly, temperately and properly? As far as we know, none of the facts to which my hon. Friend has referred has been questioned by the Minister or anybody else.
        Mr. Banks: I entirely agree with my hon. Friend. That is what makes this so frustrating for all three hon. Members who represent Newham. It is not as if we have been accused of exaggerating or as if Ministers have said that we are telling lies. We have always been told that our case is good. I know that there are other equally deserving cases in other parts of the country. We have never argued that Newham should get something that has been taken away from another deprived area of London. God knows, there are enough deprived areas in the east end of London and other inner cities.
        All that we are saying is that the Tories do not seem to understand the depth of the problems in an area such as Newham. I realise, of course, that if one was being totally cynical, one could say that they look at a borough such as Newham, and realise that the Tories do not stand a snowball's chance in hell of winning an election there. Under those circumstances, what has the Tory Government got to gain, in terms of votes, by giving anything to Newham? That is being very cynical, but perhaps we have been refused because the Government realise that in cynical terms there is nothing for them from the ballot box. If that is the case, it is disgraceful.
        As the leader of Newham borough council, councillor Jones, a very moderate man in his views and no wild extremist by anybody's definition, has made clear time and again, if we do not get the resources in Newham that we believe our case merits and justifies, the consequences will be appalling, primarily for the people of Newham but in the end for the Government as well.
        Mr. Caborn: It is apt that I should follow my hon. Friend the Member for Newham, North-West (Mr. Banks) because the problems that we have in the city of Sheffield and in south Yorkshire are mirrored probably to an even greater extent than my hon. Friend suggested.
        Probably one of the most despicable parts of redetermination rested on Sheffield's shoulders when we came down to meet the Minister on 17 December 1986. We sat at the Ministry and put the case for Sheffield because it was proposed to slash £41 million off the budget of Sheffield county council. We put the case to the Minister for redetermination, as did one of his hon. Friends, the Member for Sheffield, Hallam (Sir J. Osborn). We were told that he would take all the points on board that we were making about the serious situation of the inner-city seat, with a decline in its industrial base of steel and engineering. When we came back to the House of Commons the following day, we found that the Bill was going to be presented and put on the statute book and that the exercise that we had run through with the Minister was irrelevant because redetermination was not allowed.
        Prior to that, for the first time in its history, the Sheffield chamber of commerce and the hon. Member for Hallam made representations about the state of Sheffield's finances after it had been taken into consultation with the local authority, and clearly stated to central Government that it was impossible to run the city of Sheffield on the expenditure levels that were being proposed by the Department of the Environment. The city council also made representations. That was because the city of Sheffield is suffering one of the worst industrial declines in its history, yet we are penalised by that reduction in expenditure levels.
        On top of that, as several of my hon. Friends from south Yorkshire have said, the fire and civil defence budget has been reduced by £1 million and the transport budget has been reduced by about £12 million. The transport authority has also made representations for redetermination. Although my hon. Friend the Member for Wigan (Mr. Stott) has been talking about the problems of Greater Manchester, if one compares them with what has been happening in south Yorkshire, with all due respect to my hon. Friend, they pale into insignificance, because as bad as the cuts in Greater Manchester are, they are 9 per cent., while south Yorkshire's support is being slashed by 21 per cent.
        On local radio in Sheffield earlier today, the depth of the problems that some people are experiencing was clearly stated. One of the callers to the phone-in programme this morning on Radio Sheffield explained her plight. Her family has moved out to one of the outer reaches of Sheffield, to a new housing estate. That was partly because there is quite nice housing in the outskirts of Sheffield but also because there was a reasonable, sound, efficient and effective system of transport in operation. Unfortunately, her husband has had both legs removed. The couple have a youngster who is at technical college. It is now very difficult for the wife and the child to get around because of the reduction in the wages going into that household.
        9.30 pm
        In the past 18 months, we have suffered from increases in fares of over 225 per cent. There have been reductions in the transport infrastructure of about 10 per cent. The number of passengers carried has fallen by about 30 to 35
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        per cent., and that was before deregulation. Now, in addition, we have a further 6 per cent. increase in fares. We have lost thousands of jobs in transport, and there will be a further 800 redundancies because of the Government's expenditure levels.
        Let us look at the Government's credibility. They are giving promises to people who think that they are sincere and honest when they are dealing with them. Again, for the financial year 1987–88, the south Yorkshire PTE will have to meet extra costs totalling £3·68 million arising from the scheme of transfer. That was a major point on redetermination raised by the south Yorkshire PTE and brought about by the Local Government Act 1985. The Secretary of State for Transport said that that would be seriously taken on board. It is £3·68 million out of total expenditure of £46·6 million. Clear indications were given that that would be included in the redetermination level. It was not. Like my hon. Friend the Member for Wigan, south Yorkshire PTE is saying: where does the money come from? Does it come out of the concessionary fares, which have been affected already? Where do we get the money from? It is an impossible task.
        The whole of the city of Sheffield, including business, industry, commerce, the trade unions and the local papers, is saying that the Government are now putting constraints upon a fairly deprived area, the industrial base of which has been decimated by the lack of Government industrial policies. All the organisations that have made representations are saying, "You are giving us an impossible task. It cannot be done." Further deprivation and social unrest is inevitable. Then people such as the chairman of the Tory party will come to the Front Bench and castigate Sheffield for at least trying to protect those who can least protect themselves. What the Government have done is dishonourable, in view of the many representations by people in south Yorkshire.
        Mr. Tony Lloyd: I should continue in the same vein, and refer to transport in our metropolitan areas. My hon. Friend the Member for Wigan (Mr. Stott) spoke a little about Greater Manchester. I do not intend to go over the the same ground, but I should like to put a couple of points to the Minister.
        The Minister has not been directly involved in the negotiations between Greater Manchester and the Department of Transport. It grieves us greatly that, having suffered in some ways more than other authorities—I take the point made by my hon. Friend the Member for Sheffield, Central (Mr. Caborn) about south Yorkshire—Greater Manchester has unique problems because of the restructuring that it had to undertake. That was recognised by the Transport Ministers, who, at one stage, described its proposals as "sensible". It sticks considerably in our throats when we hear those same Transport Ministers telling us that in Greater Manchester it is our own fault that services are being decimated while, even by the Government's own account, we read that Greater Manchester has suffered more loss of mileage and routes than any other metropolitan area in the process of deregulation.
        On Friday I visited a scheme funded by the passenger transport authority and the Manpower Services Commission, which is close to the Government's heart, or at least close to the Government's rhetoric. It is a dial-a-ride scheme for the most vulnerable and those who have the greatest transport difficulties.

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        That is something that the Department of Transport claims that it wants to promote. It parallels the claims made by my hon. Friend the Member for Sheffield, Central about the difficulties experienced by people who have specific physical disabilities and who are unable to use the public transport system. The possibility of an extension of those schemes in Greater Manchester into an area such as my own—which has some of the poorest and most vulnerable people in the whole of the Greater Manchester area—is non-existent.
        Far from Greater Manchester passenger transport authority being able to extend that scheme, we are likely to see it cutting back on existing provision, and we are likely to see the concessionary fares go unless the Minister tells us tonight that he intends to accept the amendment or come up with another solution dealing with debt.
        In Greater Manchester we went through the whole process of redetermination because we believed that the Government were sincere when they said that they accepted that each local authority would be able to argue its own individual case for redetermination. In terms of the transport and fire authorities, Greater Manchester went through the motions and spent many hours of officers' and authority members' time in beating a path down to London. That is no pleasant day out for people from the north-west; it is something that they do on behalf of the community they represent. However, we found that that process was a farce and that it had been ripped up by the Bill, which takes no account whatever of local circumstances.
        The fire authority feels particularly bitter. It had a constructive meeting with Lord Caithness, who is responsible for fire services, and brought down an all-party delegation. It felt that it had managed to explain the peculiar circumstances of Greater Manchester, and left Whitehall feeling that its unique circumstances would be considered. It came as a slap in the face when Greater Manchester's fire authority found that it would be treated in exactly the same way as every other fire authority in the metropolitan areas.
        I do not want to fight a case for, and even less against, fire authorities, but it is well recognised that Greater Manchester has done badly in this settlement. I congratulate the hon. Member for Halifax (Mr. Galley) whose authority, West Yorkshire, has been treated worse than any other. He has absented himself now but my hon. Friends will accept that he was the only Conservative Member who took the trouble to speak, not only about fire authorities and transport, but across the whole range of the debate. The rest of the Tory party has been silent on these particular issues.
        Mr. Meadowcroft: I wonder whether the hon. Gentleman will contemplate the possibility that the hon. Member for Halifax (Mr. Galley) is outside trying to drum up support for his amendment amongst his colleagues.
        Mr. Lloyd: I did not seek to criticise the hon. Member for Halifax, but the rest of his colleagues in the Conservative party, who cannot be bothered to take up the important issues affecting west Yorkshire, Greater Manchester, south Yorkshire, the west midlands and so on.
        The fire authority in Greater Manchester faces a cut of £1 million unless the Bill is amended. The Government were certain, when they put forward the expenditure limits
        114
        last July, that they had got things right, but conceded that they had got things wrong by considering the redetermination process. They conceded how wrong they were by allowing a 2·5 per cent. uplift, yet when representatives of Greater Manchester's fire authority spoke to the civil servants they were told, "We have only given you 2·.5 per cent., but there may be £800,000 in additional clawback." Whitehall clearly accepts that Greater Manchester's fire authority needs the money that it requested. Whitehall is saying, in effect, that it will match exactly what Greater Manchester asked for. barring the odd £100,000 because it will be giving—on a nod and a wink—the extra money. Unfortunately, we in Greater Manchester are not gullible. The reality is that we do not know whether we shall get this extra money through additional clawback. But even if we lid, the difficulty is that, while that might fund one year, t would not carry over to future years given the present structure of local government finance. That leaves Greater Manchester vulnerable. We have already had standstills in recruitment. Last year we lost a number of serving fire officers in the training pool. That is bad for those who must carry out essential emergency work in a large metropolitan area. Whatever happens, we shall lose even more money again this year.
        Greater Manchester already has a high death rate from fires. There were 124 deaths in 1985. The Home Office recognises that Greater Manchester is probably the most efficient of the metropolitan authorities. That can be proved by statistics. If we reduce financial provision even further we shall effectively be undermining and sabotaging the job done by firemen out on the tenders and by the fire authority in general. Ultimately, we shall be doing that at the expense of the lives and property of the people of Greater Manchester. If that is what the Government intend, so be it. The public will make up their own mind. But if the Government want to wriggle out of that. let the Minister stand up and say how they intend to make up that financial shortfall.
        Mr. Walter Harrison: It has taken me two or three weeks and quite a few days sitting in this Chamber to draw someone's attention to the fact that I wanted to have a little word about my concern over local government finance. I have put on all sorts of little demonstrations. When I look round the Chamber, as a simple rural lad, the first place that I look is the Press Gallery. The Lobby members usually ask where the Members of Parliament are, but where are they? Not a single one is present to take any interest in this business, which concerns one of the biggest problems that we have ever had to face. They check us and now we are checking them. We have two Hansard writers. The public are interested. Seven members of the public are present and here we are fighting a dynamic battle about local government finance.
        How many Conservative Back-Benchers are present? There are three in the proper positions, one Cross Bencher, and one lounging. There are more Members on the Opposition Front Bench.
        I do not know how long I have got, but I have been trying to speak for a long time. When I started in local government — my father was a local government councillor before me — we had to account for every dustbin lid. We had to account for everything, whether for wooden rafters or rolled steel girders. We had to account for boundary fences. We had to go to the regional

        115
        committee to see whether we could spend over £15. We were accountable. I am worried about the accountability of the Government, local government and everything else.
        I come to the crunch. Hon. Members know that at present I have a little bit of a running battle with one of the Ministers in the Department of the Environment. That is nothing new.
        Mr. Geoffrey Lofthouse: Who is that?
        Mr. Harrison: I reckon that my hon. Friends are looking at him, so I shall not name him.
        I started out asking questions about accountability and I approached my hon. Friends on the Front Bench, who will be Ministers at the next election, and asked them which was the best point for me to talk about residuary bodies. They told me that such and such a point would be best. My hon. Friend, who I will not name because I cannot remember his constituency, told me that such and such a place would be best. He told me that when the guillotine fell I would be cut short. Therefore, I thought that it would be advisable for me to speak now. I thought that if I was to be chopped by the guillotine, it would be best, whether I was in order or out of order, to chance my luck now.
        9.45 pm
        I want to make a point about the accountability of local government finance. I started out as an urban district councillor and became a non-county borough councillor. I became a county councillor and then I came here. What a success! I had more success as an urban district councillor than I have had here. I could receive more answers in those days.
        When I asked the town clerk or anyone else a question, he was accountable and he answered me. He did not give me distortions or fancy words, because he knew that I would see him again the next day.
        I began to ask questions about what belonged to me as a ratepayer, as a constituent, and what belonged to my father before me. I found out that there was no accountability. When the Tory Government abolished the county councils, we discovered that there was no accountability. The Government did not elect the body to replace the councils; they selected it. I told one bloke, "You have got some real ones there. From the names that I have seen, the members of that residuary body would sell their grandmothers." The Secretary of State said to me, "Why do you think that we selected them?"
        I am bothered about my property in Yorkshire. I do not have much property, just a little house with about three quarters of an acre, but I have a lot of vested interests.
        Mr. Caborn: Castle Howard.
        Mr. Harrison: No, it is not Castle Howard.
        I am bothered about county hall and what my predecessors and my father paid into. I am worried about accountability and I am concerned about the residuary bodies which are non-elected and non-accountable. The residuary body was selected for its attitude. I notice that there is one more person in the Press Gallery. Welcome to the fold.
        With all my vested interest through being a ratepayer, I wanted to see what accountability was available.
        Mr. Allen McKay: Two minutes left.
        Mr. Harrison: I have been told that I have only two minutes left. I have not spoken for 12 months. All I have done is to make interventions. I will finish in a few minutes, but I have a bit more to say yet.
        I am concerned about the accountability of local government finance. Way back, I could account each year through the local authority. Now, however, no one can account for what is happening because councillors are not in charge. The Secretary of State is in charge, but he is not accountable.
        Mr. Tony Banks: My right hon. Friend will be talking about the residuary bodies in some detail. Is he aware that the unelected chairman of the London residuary body receives more than £51,000 for dismantling London while the former leader of the Greater London council, Ken Livingstone, received only council expenses to a grand total of about £6,000?
        Mr. Harrison: I asked those questions, but the Government could not tell me. I asked the Government what the chairmen of the residuary bodies receive annually, what emoluments they receive and what other jobs they do. That is a carve-up.
        I am worried about west Yorkshire county hall. Look at the stack of questions I have asked—it is beautiful. Now the Government answer my questions in triplicate. They give the same answers to three questions because they are fed up. I asked the Secretary of State,
        "what was the estimated value of the West Yorkshire metropolitan county council…complex in Wood Street, Wakefield, West Yorkshire, at the time of the abolition."—[Official Report, 19 June 1986; Vol. 99, c. 635.]
        Did the Minister know? No; he told me to ask the residuary body.
        I also asked the Secretary of State for the Environment, "what were the total capital assets of the West Yorkshire metropolitan county council on 31 March at the time of the abolition of that county council."
        He replied:
        "Local authorities are not required to maintain a balance sheet."—[Official Report, 23 June 1986; Vol. 100, c. 9.]
        I asked the Secretary of State for the Environment about the number of vacant properties formerly owned by the county council and their annual rental values.
        The Minister replied:
        "I have no information on this matter".— [Official Report, 19 December 1986; Vol. 107, c. 753.]
        He said that it was a matter for the residuary body.
        I asked the Secretary of State for the Environment whether he had given guidance to the residuary body on the disposal of properties, but he had no information. Then comes the triplicate one. I asked the Secretary of State about the individual units of property and land, whether he would make a statement on the percentage increase of rented properties and whether he would make a statement on the total receipts from the disposal and sale of property and land. The Minister replied:
        "I have no information on these matters."—'[Official Report, 18 December 1986; Vol. 107, c. 679.]
        What marvellous accountability!
        The accountability for local government finance has been removed from local councillors. It has gone to the Government, who are not accountable because they refer all matters to the residuary bodies.
        That was a short version of what I wanted to say because my hon. Friends were barracking me. But I shall return to the subject and I hope that many of my hon. Friends will take it up. The only response that I get from

        117
        the Department of the Environment is that the residuary body has the information. Its members are not elected; they were selected because they would sell their grandmothers.
        Dr. Boyson: When I came into the House, I received a letter from a noted librarian called Ivy Hill. She said that she had served under seven chairmen of library committees. One of them was my father, who was an alderman in Haslingden. Another was the right hon. Member for Wakefield (Mr. Harrison). She paid tribute to them as the two best chairmen under whom she had served in local government. It gives me pleasure to put that on the record tonight.
        It is said that most people deplore the end of consensus in local government. However, one reason for the end of that is excessive spending by certain boroughs. The introduction of rate capping was the Government's response to the huge increase of expenditure—
        Mr. Tony Banks rose
        —
        Dr. Boyson: I shall give way in a minute; I have hardly started my speech. We shall be continuing the debate after the 10 o'clock motion.
        We believe that if rates are too high they drive out residents and businesses, with the consequent risk of creating residential and industrial deserts.
        Although I shall ask the House to reject the Opposition amendments, I must point out that one amendment being discussed in this group—No. 114—is, in fact, a Government amendment, and I shall be asking the House to accept it.
        Under redetermination, authorities were able to request a meeting with the appropriate Minister and a reassessment was then made. Until the necessity for this Bill was shown, there was every intention that redetermination should be available for the 1987–88 rating period from 1 April this year.
        Mr. Caborn rose—
        Dr. Boyson: There is a queue, and the hon. Member for Newham, North-West (Mr. Banks) is first in it. I shall give way in a moment.
        Half of the authorities that were rate-capped this year asked for redetermination. However, the Government decided not to give individual redetermination, but to draft the Bill in two blocks—those authorities that were rate-capped last year and those that have been rate-capped for the first time this year. With the authorities that applied for redetermination, we did what we could by bringing in the formula alongside what we would have previously given—
        Mr. Tony Banks: I do not under-estimate the significance of rates at the margin, but the Minister must accept that rates are one of the least important cost factors facing industry. Of far greater significance are interest rates, and the Government determine those. He cannot continue to attack local authorities and claim that high spending is all their fault — he knows that the Government's contribution to rate support grant has gone down from 61 per cent. in 1979 to 46 per cent. this year. That is a massive switch of taxation from central to local government. The Minister cannot pretend that that has not been a major factor in the spending policies of Labour and other local authorities.
        Dr. Boyson: The level of interest rates applies equally throughout the country, so the geographical location of businesses is not affected by them. However, the level of rates varies between authorities. For a business that requires a great deal of space and many buildings, the level of rates in a particular area is a major determinant in whether it stays in that area or moves elsewere, or even in whether it can stay in business at all. I have visited businesses in the Wembley trading estate which within the past two years have moved elsewhere because of the level of rates in Brent. Rates are important. There is no need for Micawberism to accept that success or failure comes on the margin. It is on the margin that we all make our decisions.
        10 pm
        Mr. Caborn: The Minister has given a short explanation of why the Government introduced rate capping. The South Yorkshire fire and civil defence authority is the subject of minimum standards that should be met for the well-being of the people of south Yorkshire, yet the Department of the Environment is £1 million short of capital to meet the minimum standards that have been spent. If we are spending so much money in south Yorkshire that it is necessary to rate-cap the authority, how is it that the fire service is falling short of the minimum standards that have been set for it and a Government Department is saying that those standards should be achieved?
        Dr. Boyson: I shall deal with the hon. Gentleman's question later. I have stopped using my prepared notes so that I can respond to all those who have participated in the debate so far. If I start to respond to interventions. I shall forget to reply to some of those who have spoken in the debate.
        Mr. Tony Banks: Answer the question.
        Dr. Boyson: This happens to be my speech and I shall proceed with it in my way.
        Mr. Allan Rogers: Will the Minister give way?
        Dr. Boyson: Yes, I shall give way to the hon. Gentleman.
        Mr. Rogers: When the Minister responded to a question posed by my hon. Friend the Member for Newham, North-West (Mr. Banks) he suggested that rates are an important factor in the location of industry. In the area that I represent, companies have the benefit of a substantial part of their rates bill being mitigated for perhaps the first five years, yet they still do not stay in the area and they do not come into the area in sufficient numbers to relieve unemployment. If the non-levying of rates is a factor, surely my area and others like it should be attracting more companies.
        Dr. Boyson: Presumably rates were considered to be an important factor by a sufficient number, or the five-year provision would not have been introduced.
        Several Hon. Members rose—
        Dr. Boyson: I must get on, because there are many hon. Members who want to move on to Third Reading. Many amendments remain undiscussed and there are certain ones—
        Mr. Straw: It was the Government who imposed a guillotine.
        Dr. Boyson: We did so to ensure that local authorities would have their money on 1 April. If they do not have their money on that date because the Bill has not been enacted, no one will thank those who delayed its passage through the House of Commons.
        My hon. Friend the Member for Halifax (Mr. Galley) and the hon. Members for Stretford (Mr. Lloyd) and for Barnsley, West and Penistone (Mr. McKay) referred to the south Yorkshire fire service—
        Mr. Kevin Barron: Halifax is in west Yorkshire.
        Dr. Boyson: Questions have been asked especially about south Yorkshire and I shall respond to them.
        Effectively, spending this year will amount to an increase of 6·9 per cent. on last year's budget. My right hon. Friend the Secretary of State for the Home Department is satisfied on present information that the expenditure level is adequate to maintain the existing level of service. He is of the view that it will enable the authority to maintain minimum standards of fire cover, but he has asked Her Majesty's Chief Inspector of Fire Services to report urgently on the operational implications of the intended pre-set limit. I can assure the Committee that my right hon. Friend will consider the chief inspector's report extremely carefully. I have heard that my noble Friend the Minister of State, Home Office has agreed to meet the authority to discuss the concerns which it has brought to our notice.
        Mr. Tony Lloyd: The Minister has told us that the Minister of State, Home Office, the Earl of Caithness, will meet the fire authority, but what difference will that make when the Bill has passed through the House of Commons? At that stage everything will be cut and dried.
        Dr. Boyson: That is obviously a valid point. On the other hand, help can be given to local authorities in many ways. The very fact that the agreement has been made for the Minister to meet that authority shows the concern that is felt by the Government on this matter.
        Mr. Straw: The Minister said that help can be given in many ways. Will he spell out those ways? Will he accept, as my hon. Friend the Member for Stretford (Mr. Lloyd) has made clear, that once the Bill becomes an Act, the expenditure limits and rate limits are set in concrete and there is nothing that even the Secretary of State can do about them? He is putting into the Bill great inflexibility and forcing rate limits on authorities, even if he accepts the merits of their case.
        Dr. Boyson: I cannot comment on what my hon. Friend the Minister will say when he meets the authority. I have just informed the House that he is prepared to meet the authority and discuss the situation.
        The hon. Member for Bootle (Mr. Roberts) mentioned the Merseyside police authority. The increase for that is over 7 per cent. Reference has been made to the transport authorities in two areas. I have the figures here. In 1987–88 there will be a £3 million increase for the Greater Manchester area, so the argument is not over cuts but over the level of increased expenditure. All of us would like more money if we could have it. We are dealing not with cuts but with arguments as to whether the percentages that I have given are enough.
        Mr. Stott rose—
        Dr. Boyson: I shall not give way because we must move on. I know that some hon. Members have been here all the time, while others have only just come in.
        The hon. Member for Holborn and St. Pancras (Mr. Dobson) mentioned inner London and made a strong case on the need for further money for ILEA. However, I bring to the attention of the Committee the huge expenditure of ILEA. It is spending twice as much per pupil in its schools as the average for the whole country. The rest of the country can manage on that average with good results, while those of ILEA are not the best. I do not have the results with me, but I have seen reports. ILEA is the highest spending authority relative to GRE. It has budgeted to spend 78 per cent. more than GRE on education this year, and the next highest, Haringey, will spend only 31 per cent. more.
        Similarly, ILEA employs twice as many non-teaching staff in schools relative to pupil numbers than the average authority. Its costs of administration per pupil are more than twice the average, even allowing for London weighting. Its refusal to manage its teacher force properly has led to overstaffing and very generous pupil teacher ratios. Last year, there were 500 supernumerary teachers without proper jobs in its schools, while there were shortages in many other authorities, even those in London. Even allowing for London weighting, ILEA spends 30 per cent. more per pupil than the inner city authorities of Manchester, Liverpool and Newcastle, and almost 60 per cent. more than Birmingham. ILEA educates 4 per cent. of the children in the country but spends 8 per cent. of the money available. How anybody can ask for more money for ILEA with such a background, I do not know.
        Mr. Dobson: Does the Minister recall that I pointed out that in secondary schools, ILEA spends about £1,900 per pupil, but Conservative Members, who say that ILEA should spend less, spend £3,000, £4,000 or £5,000 a year sending their children to public school? They do not represent London seats, but they come here to set aside the decisions of the democratically elected ILEA to spend what it thinks is needed to provide a decent education for the children of inner London.
        Dr. Boyson: I would like the hon. Member for Holborn and St. Pancras (Mr. Dobson) to listen most carefully. With regard to school spending in London a conclusion was reached by ILEA last week—presumably because of financial pressure this year—regarding its boarding school, Wolverstone Hall, which costs £8,350 per pupil, or 50 per cent. more than Eton. If the hon. Gentleman is talking about saving money, he should recall that the most expensive boarding school is run by ILEA. Thank goodness that ILEA only runs one boarding school, or it would be spending six times as much per head of the population. If that is the hon. Gentleman's best case for ILEA, I do not see anything wrong in sharing out the money across the length and breadth of the country.
        I should also like to make reference to the existing rate-capped boroughs. The hon. Member for Sheffield" Heeley (Mr. Michie) mentioned Sheffield, but the fact is that that council spent 20 per cent. more over allocated GRE. In April 1986, 953 properties owned by Sheffield council have been vacant for over a year. Let us consider the money that could have been brought in had they been let.
        The hon. Member for Newham, North-West (Mr. Banks) spoke with his usual fire and enthusiasm—he

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        enlivens the House with his speeches. Newham is spending 80 per cent. over GRE and the local rate is 66 per cent. above the class average. Rates have risen by 50 per cent. since 1982–83. Since 1983, rents have been down by 8p per house, which means that Newham has forgone an annual income of £3 million because of that reduction. The rates in Newham for 1986–87 were the highest in London. Some have objected to the fact that that borough will be rate-capped; one wonders whether rates would have to reach the height of Snowdonia or the Himalayas before someone would not object to the rate-capping of that borough.
        I shall not say any more, because I do not wish to disturb Opposition Members. I know that they are keen to vote upon that issue. I would be astonished if there was a vote, considering the figures I have given. However, one cannot account for human nature.
        The Government have sought to rate-cap to ensure that people are not driven out of boroughs and businesses do not go bankrupt. To protect those people we need the clauses in their entirety and on behalf of the Government I ask my right hon. and hon. Friends to oppose all the amendments, bar amendment No. 114—it is an amendment produced on the home side and I recommend it—and to go into the Lobby to vote for the retention of the clauses.
        Question put, That the amendment be made:—
        The House divided: Ayes 177, Noes 252.

        Division No. 72]

        [10.15 pm

        AYES

        Abse, Leo

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

        Adams, Allen (Paisley N)

        Deakins, Eric

        Alton, David

        Dewar, Donald

        Anderson, Donald

        Dixon, Donald

        Archer, Rt Hon Peter

        Dobson, Frank

        Ashley, Rt Hon Jack

        Dormand, Jack

        Atkinson, N. (Tottenham)

        Dubs, Alfred

        Bagier, Gordon A. T.

        Dunwoody, Hon Mrs G.

        Banks, Tony (Newham NW)

        Eadie, Alex

        Barron, Kevin

        Eastham, Ken

        Beckett, Mrs Margaret

        Evans, John (St. Helens N)

        Bell, Stuart

        Fatchett, Derek

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

        Faulds, Andrew

        Bermingham, Gerald

        Field, Frank (Birkenhead)

        Bidwell, Sydney

        Fields, T. (L'pool Broad Gn)

        Blair, Anthony

        Fisher, Mark

        Boyes, Roland

        Flannery, Martin

        Bray, Dr Jeremy

        Foot, Rt Hon Michael

        Brown, Gordon (D'f'mline E)

        Forrester, John

        Brown, Hugh D. (Provan)

        Foster, Derek

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

        Foulkes, George

        Brown, Ron (E'burgh, Leith)

        Fraser, J. (Norwood)

        Buchan, Norman

        Freud, Clement

        Caborn, Richard

        George, Bruce

        Callaghan, Rt Hon J.

        Gilbert, Rt Hon Dr John

        Callaghan, Jim (Heyw'd & M)

        Golding, Mrs Llin

        Campbell-Savours, Dale

        Gould, Bryan

        Canavan, Dennis

        Gourlay, Harry

        Carter-Jones, Lewis

        Hamilton, James (M'well N)

        Clark, Dr David (S Shields)

        Hamilton, W. W. (Fife Central)

        Clay, Robert

        Hancock, Michael

        Clelland, David Gordon

        Harrison, Rt Hon Walter

        Clwyd, Mrs Ann

        Haynes, Frank

        Cocks, Rt Hon M. (Bristol S)

        Heffer, Eric S.

        Cohen, Harry

        Hogg, N. (C'nauld & Kilsyth)

        Conlan, Bernard

        Holland, Stuart (Vauxhall)

        Cook, Frank (Stockton North)

        Home Robertson, John

        Cook, Robin F. (Livingston)

        Howarth, George (Knowsley, N)

        Corbett, Robin

        Hoyle, Douglas

        Corbyn, Jeremy

        Hughes, Robert (Aberdeen N)

        Craigen, J. M.

        Hughes, Roy (Newport East)

        Crowther, Stan

        Hughes, Sean (Knowsley S)

        Cunliffe, Lawrence

        Hughes, Simon (Southwark)

        Cunningham, Dr John

        Janner, Hon Greville

        122

        Jenkins, Rt Hon Roy (Hillh'd)

        Redmond, Martin

        John, Brynmor

        Rees, Rt Hon M. (Leeds S)

        Jones, Barry (Alyn & Deeside)

        Richardson, Ms Jo

        Kaufman, Rt Hon Gerald

        Roberts, Allan (Bootle)

        Lambie, David

        Roberts, Ernest (Hackney N)

        Lamond, James

        Rogers, Allan

        Leadbitter, Ted

        Rooker, J. W.

        Leighton, Ronald

        Ross, Ernest (Dundee W)

        Lewis, Terence (Worsley)

        Rowlands, Ted

        Litherland, Robert

        Sedgemore, Brian

        Lloyd, Tony (Stretford)

        Sheerman, Barry

        Lofthouse, Geoffrey

        Sheldon, Rt Hon R.

        Loyden, Edward

        Shore, Rt Hon Peter

        McCartney, Hugh

        Short, Ms Clare (Ladywood)

        McDonald, Dr Oonagh

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

        McKay, Allen (Penistone)

        Silkin, Rt Hon J.

        Maclennan, Robert

        Skinner, Dennis

        McNamara, Kevin

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

        McTaggart, Robert

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

        Madden, Max

        Snape, Peter

        Marshall, David (Shettleston)

        Soley, Clive

        Martin, Michael

        Spearing, Nigel

        Mason, Rt Hon Roy

        Stewart, Rt Hon D. (W Isles)

        Maxton, John

        Stott, Roger

        Maynard, Miss Joan

        Straw, Jack

        Meacher, Michael

        Thomas, Dafydd (Merioneth)

        Meadowcroft, Michael

        Thomas, Dr R. (Carmarthen)

        Michie, William

        Thompson, J. (Wansbeck)

        Millan, Rt Hon Bruce

        Thorne, Stan (Preston)

        Mitchell, Austin (G't Grimsby)

        Tinn, James

        Morris, Rt Hon A. (W'shawe)

        Torney, Tom

        Morris, Rt Hon J. (Aberavon)

        Wainwright, R.

        Nellist, David

        Warden, Gareth (Gower)

        Oakes, Rt Hon Gordon

        Wareing, Robert

        O'Brien, William

        Weetch, Ken

        O'Neill, Martin

        Welsh, Michael

        Owen, Rt Hon Dr David

        White, James

        Park, George

        Williams, Rt Hon A.

        Patchett, Terry

        Wilson, Gordon

        Pavitt, Laurie

        Winnick, David

        Pendry, Tom

        Wrigglesworth, Ian

        Pike, Peter

        Young, David (Bolton SE)

        Powell, Raymond (Ogmore)

        Prescott, John

        Tellers for the Ayes:

        Radice, Giles

        Mr. Ron Davies and

        Randall, Stuart

        Mr. John McWilliam.

        Raynsford, Nick

        NOES

        Aitken, Jonathan

        Brown, M. (Brigg & Cl'thpes)

        Alexander, Richard

        Browne, John

        Alison, Rt Hon Michael

        Bruinvels, Peter

        Amess, David

        Buchanan-Smith, Rt Hon A.

        Ancram, Michael

        Buck, Sir Antony

        Arnold, Tom

        Budgen, Nick

        Ashby, David

        Bulmer, Esmond

        Atkinson, David (B'm'th E)

        Burt, Alistair

        Baker, Nicholas (Dorset N)

        Butcher, John

        Batiste, Spencer

        Butterfill, John

        Bellingham, Henry

        Carlisle, John (Luton N)

        Bendall, Vivian

        Carttiss, Michael

        Benyon, William

        Cash, William

        Best, Keith

        Chapman, Sydney

        Biffen, Rt Hon John

        Chope, Christopher

        Biggs-Davison, Sir John

        Churchill, W. S.

        Blackburn, John

        Clark, Dr Michael (Rochford)

        Body, Sir Richard

        Clark, Sir W. (Croydon S)

        Bonsor, Sir Nicholas

        Clarke, Rt Hon K. (Rushcliffe)

        Boscawen, Hon Robert

        Cockeram, Eric

        Bottom ley, Peter

        Colvin, Michael

        Bottomley, Mrs Virginia

        Conway, Derek

        Bowden, A. (Brighton K'to'n)

        Coombs, Simon

        Bowden, Gerald (Dulwich)

        Cope, John

        Boyson, Dr Rhodes

        Couchman, James

        Braine, Rt Hon Sir Bernard

        Cranborne, Viscount

        Brandon-Bravo, Martin

        Critchley, Julian

        Bright, Graham

        Crouch, David

        Brinton, Tim

        Currie, Mrs Edwina

        Brittan, Rt Hon Leon

        Dickens, Geoffrey

        Brooke, Hon Peter

        Dicks, Terry

        123

        Dorrell, Stephen

        Lilley, Peter

        Dover, Den

        Lloyd, Sir Ian (Havant)

        du Cann, Rt Hon Sir Edward

        Lord, Michael

        Dunn, Robert

        Luce, Rt Hon Richard

        Durant, Tony

        Lyell, Nicholas

        Dykes, Hugh

        McCrindle, Robert

        Eggar, Tim

        McCurley, Mrs Anna

        Evennett, David

        Macfarlane, Neil

        Eyre, Sir Reginald

        MacKay, Andrew (Berkshire)

        Favell, Anthony

        MacKay, John (Argyll & Bute)

        Forman, Nigel

        Maclean, David John

        Forsyth, Michael (Stirling)

        McLoughlin, Patrick

        Forth, Eric

        McNair-Wilson, P. (New F'st)

        Fox, Sir Marcus

        McQuarrie, Albert

        Gale, Roger

        Madel, David

        Galley, Roy

        Major, John

        Gardiner, George (Reigate)

        Malins, Humfrey

        Garel-Jones, Tristan

        Malone, Gerald

        Glyn, Dr Alan

        Maples, John

        Goodhart, Sir Philip

        Marland, Paul

        Gow, Ian

        Marlow, Antony

        Gower, Sir Raymond

        Marshall, Michael (Arundel)

        Greenway, Harry

        Mates, Michael

        Griffiths, Sir Eldon

        Mather, Sir Carol

        Gummer, Rt Hon John S

        Maude, Hon Francis

        Hamilton, Neil (Tatton)

        Maxwell-Hyslop, Robin

        Hannam, John

        Mayhew, Sir Patrick

        Harris, David

        Merchant, Piers

        Hayes, J.

        Meyer, Sir Anthony

        Heathcoat-Amory, David

        Miller, Hal (B'grove)

        Hicks, Robert

        Mills, lain (Meriden)

        Higgins, Rt Hon Terence L.

        Mills, Sir Peter (West Devon)

        Holland, Sir Philip (Gedling)

        Miscampbell, Norman

        Howarth, Alan (Stratf'd-on-A)

        Mitchell, David (Hants NW)

        Howarth, Gerald (Cannock)

        Moate, Roger

        Howell, Ralph (Norfolk, N)

        Monro, Sir Hector

        Jackson, Robert

        Montgomery, Sir Fergus

        Jopling, Rt Hon Michael

        Morrison, Hon C. (Devizes)

        Joseph, Rt Hon Sir Keith

        Moynihan, Hon C.

        King, Roger (B'ham N'field)

        Mudd, David

        Knowles, Michael

        Neale, Gerrard

        Knox, David

        Nelson, Anthony

        Lamont, Rt Hon Norman

        Neubert, Michael

        Latham, Michael

        Newton, Tony

        Lawler, Geoffrey

        Nicholls, Patrick

        Lawrence, Ivan

        Onslow, Cranley

        Leigh, Edward (Gainsbor'gh)

        Oppenheim, Phillip

        Lennox-Boyd, Hon Mark

        Ottaway, Richard

        Lester, Jim

        Page, Richard (Herts SW)

        Lewis, Sir Kenneth (Stamf'd)

        Patten, Christopher (Bath)

        124

        Patten, J. (Oxf W & Abgdn)

        Stevens, Lewis (Nuneaton)

        Pawsey, James

        Stewart, Allan (Eastwood)

        Peacock, Mrs Elizabeth

        Stewart, Andrew (Sherwood)

        Percival, Rt Hon Sir Ian

        Stewart, Ian (Hertf'dshire N)

        Pollock, Alexander

        Tapsell, Sir Peter

        Portillo, Michael

        Taylor, John (Solihull)

        Powell, William (Corby)

        Taylor, Teddy (S'end E)

        Powley, John

        Temple-Morris, Peter

        Price, Sir David

        Terlezki, Stefan

        Proctor, K. Harvey

        Thatcher, Rt Hon Mrs M.

        Rattan, Keith

        Thomas, Rt Hon Peter

        Raison, Rt Hon Timothy

        Thompson, Donald (Calder V)

        Rathbone, Tim

        Thornton, Malcolm

        Rhodes James, Robert

        Thurnham, Peter

        Rhys Williams, Sir Brandon

        Townend, John (Bridlington)

        Ridley, Rt Hon Nicholas

        Trippier, David

        Ridsdale, Sir Julian

        Trotter, Neville

        Roberts, Wyn (Conwy)

        Twinn, Dr Ian

        Robinson, Mark (N'port W)

        van Straubenzee, Sir W.

        Roe, Mrs Marion

        Vaughan, Sir Gerard

        Rost, Peter

        Viggers, Peter

        Rowe, Andrew

        Wakeham, Rt Hon John

        Rumbold, Mrs Angela

        Waldegrave, Hon William

        Ryder, Richard

        Walden, George

        Sackville, Hon Thomas

        Walker, Bill (Tside N)

        Sainsbury, Hon Timothy

        Waller, Gary

        Sayeed, Jonathan

        Ward, John

        Shaw, Giles (Pudsey)

        Wardle, C. (Bexhill)

        Shaw, Sir Michael (Scarb)

        Warren, Kenneth

        Shelton, William (Streatham)

        Watson, John

        Shepherd, Colin (Hereford)

        Watts, John

        Shepherd, Richard (Aldridge)

        Wells, Bowen (Hertford)

        Shersby, Michael

        Wells, Sir John (Maidstone)

        Silvester, Fred

        Wheeler, John

        Sims, Roger

        Whitfield, John

        Skeet, Sir Trevor

        Whitney, Raymond

        Smith, Tim (Beaconsfield)

        Wiggin, Jerry

        Speed, Keith

        Wolfson, Mark

        Speller, Tony

        Wood, Timothy

        Spencer, Derek

        Woodcock, Michael

        Spicer, Jim (Dorset W)

        Yeo, Tim

        Spicer, Michael (S Worcs)

        Young, Sir George (Acton)

        Squire, Robin

        Younger, Rt Hon George

        Stanbrook, Ivor

        Stanley, Rt Hon John

        Tellers for the Noes:

        Steen, Anthony

        Mr. Peter Lloyd and

        Stern, Michael

        Mr. David Lightbown.

        Question accordingly negatived.
        Mr. David Clelland: I beg to move amendment No. 193, in page 6, line 16, leave out subsection (4) and insert—
        '(4) For the purposes of section 8 below the maximum limit in relation to a designated authority shall be such amount in the pound, expressed in pence, the effect of which shall be that the authority's relevant expenditure (as defined in section 3(1) of this Act) for the financial year beginning in 1987 shall not be less than the authority's relevant expenditure (as so defined) for the financial year beginning in 1986 as adjusted to take account of any increase in the Index of Retail Prices which may have occurred since the beginning of that financial year.'.
        The Second Deputy Chairman of Ways and Means (Sir Paul Dean): With this it will be convenient to take the following amendments: No. 190, in page 6, line 17, leave out
        `determined in accordance with Schedule 2 to this Act' an insert—

        '(a) the limit determined in accordance with Schedule 2 to this Act, or

        (b) an amount in the pound equal to the actual rate made (exclusive of any excluded part) or precept issued by the authority for the financial year beginning in 1986 whichever shall be the higher.'.

        No. 191, in clause 8, page 7, line 18, after 'section', insert 'and of section 7 above.'.
        I gather that it is also for the convenience of the Committee to consider amendment No. 192, in clause 8, page 6, line 40, at end insert—
        '(2A) If a designated authority makes a rate, or issues a precept, whether before or after the passing of this Act but before a notice has been served on it and the amount in the pound of the rate (exclusive of any excluded part) or of the precept is lower than the maximum limit, the authority may, if it thinks fit, make a substituted rate or issue a substituted precept before the expiry of the permitted period.'.
        Mr. Clelland: The Government want to control the national and the local contribution to local government finance. That has been their declared policy since they were elected, although I do not recall it being talked about too much before they were elected, and the Bill reaffirms that policy.
        Whereas previously the concept of rate capping was assumed by most people to be a method of limiting rate rises, we find that in some cases it also means that the Secretary of State can force a rate reduction without also assuming responsibility for deciding whether and how services can be maintained at the same level on a lower income or, if not, which should suffer.
        It is predictable that there are some people who welcome rate capping as a relief to ratepayers. They pay scant regard to the possible consequences of such remote control of local government affairs. I propose to use one local authority as an example, but there are many others which face similar problems to differing degrees.
        The council which I intend to highlight is Gateshead metropolitan borough council, for which the Bill would mean a massive 9 per cent. reduction in rates, which translates into a £12·5 million reduction on what is needed to maintain services at current levels. I ask those people who welcome the prospect—local newspapers and the local business community in particular—to consider what their reaction would be if some politician or civil servant devised a formula which dictated that they must reduce their charges by 9 per cent., that they had three months' notice in which to do it, yet the reduction should have little or no effect on their services. I doubt very much
        126
        whether they would be glad to hear such news, especially from people who are not directly affected by the consequences of such a reduction and who have little or no knowledge of the circumstances of the business concerned.
        That, however, is what is being done to Gateshead. For what offence? Is Gateshead a high spending authority, whatever that means? The definition of high or overspending is at the discretion of the Secretary of State. On any method of comparison with relevant authorities, Gateshead cannot be described as a high spender.
        Do the people of Gateshead suffer disproportionately high rate payments? If we compare average rate payments in Gateshead with those in other authorities, we find that that is not the case either. Of 107 comparable authorities—the metropolitan districts, shire counties and London boroughs—Gateshead comes 64th in the league table for rate payments; it comes 27th out of the 36 metropolitan districts; and it has the lowest average weekly rates among rate-capped authorities.
        Gateshead has lower average weekly rates than every Conservative-controlled metropolitan district council, none of which, of course, is rate capped. The average rates in Gateshead are also lower than those in Buckinghamshire, Surrey, Berkshire, Westminster, Barnet, Kensington and Chelsea, Harrow, Hillingdon, Enfield, Sutton, Kingston-upon-Thames, Havering, Croydon, Merton, Bromley and Redbridge, all of which are Conservative-controlled and none of which is rate capped. There is no reason, based on any definition of justice, why Gateshead should be so badly treated.
        10.30 pm
        The treatment meted out under the Bill and by the Secretary of State is in sharp contrast to the other measures that recognise the council as having special needs and requiring special grant assistance, such as inner area partnership. The nonsense is that the £12·5 million reduction in the council's budget implied in the Bill is double the total annual Government grant through inner area partnership. How can the Secretary of State explain the ludicrous situation in which £6 million is given with one hand and £12 million is taken away with the other?
        It is not as though any of that comes as a surprise to the Minister. On 24 November 1986, he met my hon. Friends the Members for Gateshead, East (Mr. Conlan) and for Blaydon (Mr. McWilliam), and myself, along with the leader, deputy leader, chief executive and director of finance from Gateshead. We pointed out to the Secretary of State that Gateshead had been rate-capped not because of any sudden lurch in spending on the part of the council, but purely because he had chosen, for no explained reason, to reduce the excess of expenditure over GRE from 20 per cent. to 12·5 per cent.
        We explained that 81 per cent. of the current year's GRE was related to population and that, in contrast with an increase in population of 0·6 per cent. in England and Wales between 1976 and 1984, Gateshead's population fell by 6 per cent. Therefore, the distribution of resources on a pounds per head basis, implying that an authority can shed its costs in direct proportion to the fall in population, is grossly disadvantageous to Gateshead and is further aggravated by the comparatively rural nature of much of the borough. Hence, the council has lost about £8 million on GRE at current prices between 1981 and 1986, and it is estimated that that will increase to £11 million by 1990.

        127
        Like many authorities, the council has endeavoured to minimise the effects of grant penalties on the ratepayers by the use of special accounting arrangements and funds to the best advantage. However, it is likely that such funds will be exhausted in the current year, further aggravating the comparison of expenditure to GRE.
        Again, it was a change in practice by the Secretary of State, not by the authority, that put the council in a so-called overspending position. While, for instance, expenditure over GRE on the council's 1984–85 outturn amounted to to 9 per cent., expenditure over target, which was also set by Ministers and was used as a measurement of expenditure until 1985–86, was only 1 per cent. Surely, it is grossly unfair that the council should now be accused of being a high spender under one set of criteria, while under the other criteria, it would not have been.
        All of that comes at a time when the Government are encouraging the council to spend money in certain directions. The Government initiated an enterprise zone, for example, the initial success of which has been in no small part due to the co-operation and participation of the council. There is also the inner area partnership that I mentioned earlier, which not only costs the council over £2 million per year, but adds to the strain on its finances as the projects reach the end of their period of Government support and have to be fully funded by the authority. The 1990 national garden festival, which will be held in the borough and which the Government approved will add further financial burdens, as the Secretary of State is well aware. There is also inflation at 6 per cent., which was allowed on 1985–86 budgets, not current budgets, so the adjusted figure represents a mere 3 per cent.
        The considerable improvements in services, environment and status in the borough have been widely acknowledged. Various Audit Commission reports have demonstrated that Gateshead is an efficient authority. Indeed, at this very time, the council's plans for a review of the provision of secondary education in the light of falling school rolls is in the hands of the Secretary of State for Education and Science. Unfortunately, that is being delayed because of a judicial review of the council's consultation process by a group of parents pursuing what I believe to be a misguided and parochial motive. However, in the meantime, the council is subject to considerable grant penalty, as a result of the effects on GRE of falling school rolls, and the prospect of a much improved education system for Gateshead's young people is, of course, postponed.
        As the council said to the Secretary of State for the Environment, the current regime of local government finance militates against effective long-term planning and takes no account of the many complexities inherent in local government service provision. That statement is true of the current system and will remain true if the Bill is passed.
        At our meeting with the Secretary of State, we explained that the proposed expenditure level of £96 million implied cuts in the council's 1987–88 budget of £15 million, which would have had a horrendous effect on the budget. However, because of the criteria involved in the redetermination applications, the council applied for an increase in the proposed expenditure level of £10·5 million. We explained that the proposed expenditure limit had been underestimated by over £9 million because proper
        128
        account had not been taken of the special accounting arrangements adopted by the late Tyne and Wear county council in its 1985–86 budget. All that, and more, was submitted in evidence of the council's just and proper case for a redetermined expenditure level.
        Mr. Bernard Conlan: At that meeting with the Secretary of State, there was a great deal of hypocrisy. Although we put the council's case, it had already been decided that there was no validity in it because the introduction of the Bill had been predetermined.
        Mr. Clelland: I could not agree more with my hon. Friend. The representations that we made to the Secretary of State on 24 November fell on deaf ears, because the right hon. Gentleman was aware when he spoke to us that the Bill was being prepared, and our representations came to naught.
        Now that the Bill is before us, we find that all the newly rate-capped authorities—regardless of whether they applied for redetermination, the arguments and explanations, the individual circumstances, needs, demands and developments of the different areas—have been subjected to the same formula and given the same treatment. As a result, Gateshead's expenditure level, as proposed in the Bill, will be £98 million, leaving the council still £12·5 million short of its budget and £8 million short of its redetermination application.
        Gateshead's position has now been compromised, not on the merits of its case, but because the Secretary of State had to avoid his Bill becoming hybrid. The only way that he could do that was to treat all the rate-capped authorities in the same way, regardless of their merits. That means that Gateshead, with the lowest average weekly rates of rate-capped authorities, excluding the non-metropolitan districts, has to reduce its rates while other authorities with far higher average rates are allowed to increase rates. What nonsense that is.
        Let me take an example, in which there is by no means any implied criticism of the authority concerned. Indeed, I am well aware that the Bill has serious implications for that council also. Just to show how barmy the system proposed is, let me compare North Tyneside metropolitan borough council with Gateshead metropolitan borough council. At the moment North Tyneside's rates are within about 5p in the pound of Gateshead's. Gateshead's current rates are 251·25p in the pound and North Tyneside's are about 247p. Yet, under the Bill, North Tyneside will be allowed to increase its rates to around 266p in the pound and Gateshead will have to reduce its rates to about 228p in the pound. Thus, instead of Gateshead being 5p more than North Tyneside, the latter's rates will be 28p ahead of Gatehead's. Where is the sense or reason in a Bill that creates such a situation?
        The purpose of amendment No. 193 is in some measure to retrieve the situation, but by no means to the total of the £12·5 million that Gateshead is set to lose. I recognise that the Secretary of State would be unlikely to accede to that. If the prime intention of the rate-capping legislation is to prevent large increases in rates, that is one thing. The amendment takes account of that and recognises that the Government will not be moved from that position. But what it does is to prevent the nonsensical forcing of reductions in rates on councils that are by no means profligate and it at least protects their rate income in real

        129
        terms. I hope that the Secretary of State will concede the arguments that I have advanced on Gateshead's behalf and accept the amendment.
        Dr. Boyson: As I have said on previous amendments, rate capping applies to the authorities that have the highest GRE in order to bring them under control. The fact that we have had to do it in the Bill this year has meant that they have had to be put into two groups—those that have been rate-capped before and those that are rate-capped for the first time.
        We cannot accept the amendments. Gateshead is spending 14 per cent. over GRE, and total expenditure has increased by 11 per cent. since 1985–86. The local rates in Gateshead are now 27 per cent. higher than they were in 1985–86, and no attempt has been made, by competitive tendering or in any other way, to reduce the cost of those services.
        Mr. Clelland: Is the Minister saying that every authority in Britain whose expenditure has increased by 11 per cent. over that period has been rate-capped?
        Dr. Boyson: No. My right hon. Friend was not saying that; he was illustrating the increase in expenditure. The hon. Gentleman put forward an articulate argument as to what consideration should be given to Gateshead; I was quoting the figures as they exist. The question related to the level of expenditure over GRE, on which the decision was made. If expenditure is 14 per cent. over GRE and local rates are up by 27 per cent. since 1985, I do not think that the country will bleed in sympathy when the borough of Gateshead is rate-capped.
        The Government cannot accept the amendment. I suggest to my right hon. and hon. Friends that we should vote against the amendment if it is pressed to a Division.
        Amendment negatived.
        Amendment made: No. 114, in page 6, line 28, after lists', insert
        ', and the other information relating to hereditaments and rateable values.'.—[Dr. Boyson.]
        Mr. Roland Boyes: I beg to move amendment No. 116, in page 6, line 30, at end add—
        '(d) the amount of the variable X for that authority (another component of the maximum limit)'.
        The Second Deputy Chairman: With this it will be convenient to take the following amendments: No. 121, in schedule 2, page 11, line 39, at end insert—' + X'.
        No. 123, in schedule 2, page 11, line 45, at end insert—'+ X'
        No. 124, in schedule 2, page 12, line 3, at end insert '+ X'
        No. 125, in schedule 2, page 12, line 7, at end insert—'+ X'
        No. 128, in schedule 2, page 12, line 12, at end insert—'+ X'
        No. 131, in schedule 2, page 12, line 16, at end insert—'+ X'
        No. 136, in schedule 2, page 12, line 45, at end insert—
        '(6A) "X" is the variable amount for each authority (which shall be not less than zero) which the Secretary of State shall determine for that authority having regard to its individual circumstances.
        (6B) A determination under this sub-paragraph shall have regard to any factor relating to the expenditure of a local authority or its financing which is drawn to the attention of the Secretary of State by the local authority or its statutory consultees.
        130
        (6C) A determination under this sub-paragraph may be revised upwards not downwards.
        Mr. Boyes: With permission, I should also like to discuss amendment No. 132, in schedule 2, page 12, leave out lines 19 to 21 and insert—
        '(1) EL is:—
        (a) In the case of an authority whose maximum limit is determined by reference to paragraph 2(2) above, the higher of

        (i) The level for the authority's total expenditure in the relevant financial year which before the passing of this Act was determined and notified to the authority under section 3(1) and (3) of the 1984 Act.

        or

        (ii) its GRE for the financial year 1987–88 plus 10 per cent.

        Where GRE is the amount shown as the grant related expenditure in relation to the authority in the Rate Support Grant Report for England for the financial year beginning in 1987.
        (b) In the case of all other designated authorities the level for the authority's total expenditure in the relevant financial year which before the passing of this Act was determined and notified to the authority under Section 3(1) and (3) of the 1984 Act,
        Due to my mathematical and statistical background I shall be happier discussing the algebraic formulae in schedule 2 than some of the highly technical legal implications of the Bill. I shall make a few remarks on the formulae.
        Anyone who has worked regularly with mathematical formulae will have recognised the flaw, or perhaps the deliberate omission of an important variable in the formulae in schedule 2. As the formulae stand, with the variable X which we propose, any reader would assume that the environments to which the formulae were being applied were all the same. Clearly they are not, and therefore variable X must be added. The addition of this variable does not make the situation satisfactory, but it is a big advance on the present formulae. One wishes to keep the algebra to a minimum. However, to take the many differences between the authorities into consideration, a much more advanced model is needed.
        10.45 pm
        We define the variable X in amendment No. 136. Basically, it is the amount, which is different for each authority, which has to be added to their formulae in schedule 2. The additional figure shall be determined by the Secretary of State either by agreement with local authorities or in an order subject to the approval of both Houses, but shall only be so determined after consideration of any relevant matter brought to his attention by the authority concerned.
        The formulae in the Bill would, therefore, serve as a working basis for discussion and further consideration, The amendments would operate within the overall framework of the Bill but have the following features. First, they would prevent the blanket application of formulae regardless of local need. Secondly, they would substitute a proper opportunity for Parliament to reach a decision on the limits to be applied after the full details of a particular case are known, not before. Thirdly, they would give a proper right to be heard to statutory consultees, such as local ratepayers and businesses. Fourthly, they would allow authorities to make proper representations on the effects of the formulae on balances and proper financing arrangements. There is no reason why that procedure should be a lengthy one.

        131
        The amendments provide in particular that regard should be had by the Secretary of State to any representations from statutory consultees and to representations on, first, the practicality of meeting his proposed spending restrictions within the very short time scale before the beginning of the new financial year, and, secondly, the need for proper and prudent local authority financing in the maintenance of balances, contingencies, and so on.
        The point on restricted time scale is of particular relevance to those boroughs and districts which are education authorities, such as the one of which my constituency is a part, Sunderland borough, and to the ILEA. The September-July basis of a school year means that the opportunity to change spending levels is not available for a full financial year. I have discussed that matter with the treasurer of the Sunderland borough council and that matter concerns him greatly.
        Decisions relating to the period 1987–88 up to September have in many cases already been taken. Only two thirds of the year is available to such authorities to match their plans to spending restrictions, and those authorities may wish to make representations in that regard.
        I want to illustrate the consequences of applying the formulae in schedule 2 to the Tyne and Wear passenger transport authority without the addition of the variable X. The members of the passenger transport authority are extremely concerned about the Bill's implications and the formulae in particular. In a letter to Members of Parliament, Mr. G. N. Cook, the clerk to the passenger transport authority, argues that the use of the standard formulae for the assessment of maximum precepts for classes of authorities means that the particular merits of any individual authority's redetermination bid has been given little consideration.
        For example, the 2 per cent. standard uplift for the expenditure limits of passenger transport authorities is significantly lower than the redetermination bids of the five passenger transport authorities that made the redetermination bids. Those vary between 10 per cent. and 22 per cent.
        The Tyne and Wear passenger transport authority expresses particular concern about the expected loss of its right of appeal against the maximum precept set of 1987–88 which currently exists under the terms of the Rates Act 1984. Further, the Government's use of rateable value in the formulae rather than the penny rate product for calculating the maximum precept for 1987–88 means that the Tyne and Wear passenger transport authority will be faced with a significant shortfall of some £389,000 between the uplifted expenditure limit and the resources of block grant and income based on the maximum precept.
        It is for all those reasons that Opposition Members, and, in general, those who have to administer its consequences, are against the Bill.
        Mr. Spearing: I am grateful to you, Sir Paul, for calling me, because amendment No. 132 applies in particular to the needs of the London borough of Newham. I use the word "needs" specifically because, under the previous formula—"means and needs"—there was more equity in respect of formulae. The formula in schedule 2 particularly hits the London borough of Newham.
        132
        The needs of Newham are very great. On a national level, Newham is the second most deprived urban borough in the country. Among 96 education authorities, it is the top of the list of the most deprived according to the Government's figures. As everyone knows, education accounts for half of local authority expenditure. Newham is fourth in respect of the proportion of population with a new Commonwealth background. There is 17·5 per cent. unemployment and 21 per cent. male unemployment in Newham and that is the sixth highest level in London.
        The borough applied for partnership status and was recognised as being statistically well inside the required margin, but for a number of years it has been refused that status. Although the borough has been given programme status, I understand from the council that that has meant that we have received less support than we would have received had we not been a programmed borough.
        In respect of housing, no fewer than 46,000 houses in Newham are in an unsatisfactory state of repair. Newham has the highest number of statutory unfit houses among the London boroughs. Homeless cases increased from 1,000 in 1981 to an estimated 1,900 in 1987, and that figure is rising. There are 1,000 empty dwellings in tower blocks, including the now dismantled Ronan Point, which have caused the housing lists applications and the number of homeless cases to rise. The results of the scientific tests on the eight blocks that remain will not be known for some time.
        Newham has one third of its area under the domain of the London Docklands Development Corporation although 94 per cent. of the population live outside that area. However, the criterion for regeneration adopted by the LDDC is not that of regenerating the borough as a whole. It is a process of regeneration along the lines of the LDDC and we therefore do not get any succour in that direction. Indeed, there is more expenditure in the borough on the services to cater for the number of people coming into that new area.
        There is a legitimate argument therefore over how much is to be spent. There were exchanges earlier between the Minister and my hon. Friend the Member for Newham, North-West (Mr. Banks) about what would be an appropriate figure to spend. The Minister takes exception to the £167 million in the current Newham revenue account. The Government said that Newham should only spend £149 million in relation to its needs. We were therefore short of £18 million. However, as the Minister knows, but as many people in London do not, that meant that in order to get the £18 million Newham would have to raise about £36 million because of the clawback.
        When the Minister says that the rates are too high, he must acknowledge that part of the reason is that to get that money in, the borough is, in effect, paying a tax on rates. By my calculations and those of the borough, the tax on rates in the current year is no less than £18 million. Ratepayers are paying £18 million more than they need because of the clawback provision. That amounts to about 20 per cent. of the rate itself. When the Minister says that Newham is spending too much on the rates, part of the reason for that lies in the clawback provision—the taxation on rates—which is part of the Government's present proposals.
        I do not wish to be too controversial about what is coming next. Although I detest what the Minister did until that point, I wish to discuss the position after the

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        publication of the Bill. We came to see him on 27 November and put forward a clear, cool and compelling case. I hope that the rest of my speech will be in a similar vein. We did the same with the Under-Secretary of State when he saw him the day after the Bill was published. We did not talk about the Bill on that occasion; we talked about Newham's needs and how the Government would meet them.
        Mr. Tony Banks: It did not get us anywhere.
        Mr. Spearing: The problem with the schedule 2 formula is that it is unfair. Like all formalae, it has a fixed base. This formula is based upon expenditure in 1985–86, which we claim was not typical. It is unfair to use it because it distorts the calculations. Full details have been supplied by the officers of Newham to the Department of the Environment, and it is generally accepted—it was in the conversations that I mentioned—that the formula distorts the result.
        Mr. Ron Leighton: Does my hon. Friend agree that the common formula which was cobbled together in haste to rescue the Government from a legal fiasco is freakishly harsh on Newham and has led to grotesque consequences? Normally, we would have the right of appeal and the right to redetermination, which we attempted to exercise with the Minister of State. But because of the Government's haste, we shall not be allowed to appeal or have a redetermination. Indeed, we cannot even have a proper debate tonight. It will be truncated by the guillotine, and Newham's needs will not be properly considered. Does my hon. Friend agree that this is another reason for their Lordships giving careful consideration to the borough of Newham?
        Mr. Spearing: I am grateful to my hon. Friend. I hope that what the Minister says in reply will give us some inkling that there might be further discussion on the facts that I shall put before him. My hon. Friend mentioned the importance of judicial retrospective action. As I understand it, the Bill locks everything up in the words "taking into account". We must accept that the Minister has taken something into account if he says so, and no court can challenge it. In contrast with redetermination, once the Minister says that he has taken something into account, that is that. Once he sends a letter to the court saying that, the court can do nothing. Until now, there has been at least some flexibility.
        Another thing that is agreed is the table that was produced by the London borough of Newham and presented to the Minister during the Second Reading debate, on which he kindly replied in a letter to me on 19 January. In the table, we showed in order, from the most advantageous position in Basildon to the most disadvantageous in Newham, the limits of expenditure over GRE. Taking into account the plus 2 per cent., but not the teachers' uplift, which we are all discounting, we showed that Newham's expenditure limit was only 3·6 per cent. above GRE. That was pretty ludicrous considering that our expenditure in the current year is 18 per cent. above GRE. Yet Basildon, which is not far away from Newham, has an expenditure limit of 70 per cent. over GRE. Tower Hamlets stands at 19·3 per cent. and Haringey stands at 17 per cent.
        The Minister in his letter, for which I thank him for his courtesy, said:
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        "You asked whether the table of figures given to Nicholas Ridley on Monday showing expenditure levels in relation to grant related expenditure for each of the 20 rate limited authorities is broadly correct. It is, but the extent to which the expenditure level for 1987–88 exceeds GRE is related to the starting position in 1986–87."
        Of course it is correct, because that is part of the formula. When people use the word "but" it sounds as if it is a restricting or qualifying phrase but, in this case, the skill of the Sir Humphreys in the Department have added something which is an uncontrovertible fact, so it is not as heady as it sounds.
        11 pm
        The formula has hit Newham hard for reasons that the Minister knows and I suggest that, in justice and even to fulfil his own objectives, there should be some adjustment in the formula to enable hard cases like ours to increase our GRE to somewhere around—I put this in the amendment—10 per cent. That would only bring us up to about 14th in this pecking order of one to 20. It would not fulfil Newham's concerns because, on our calculation, we will need about another £33 million in the coming year to make up the gap.
        I said in a letter to the Minister that, on the borough's calculations, we would have a deficit or an unfillable gap of £33 million in the financial year 1987–88 or 15 per cent. of the borough's current expenditure. The Minister says that is not the case. He says that it will not be as big a gap as that. He says that it will be only a 5·8 per cent. reduction of the current 1986–87 expenditure.
        I put it to the Minister that a 5·8 per cent. reduction next year on this year's expenditure—bearing in mind first of all inflation and secondly greater needs, not least in respect of the homeless and other difficulties—means that there will be a considerable gap next year.
        We may argue whether it is £33 million, as I and the borough think, or whether it is rather less, as the Minister thinks, but I put it to him that, in terms of actual cash expenditure, it cannot be much less than £20 million. If that is the case—I am coming down a long way from £33 million to £20 million—that means that the pro rata reduction in expenditure on each service within the borough will be great indeed. Education, as I said, takes up half the revenue, so there will be a cut of roughly £6 million from somewhere in that—£2·5 million for housing, perhaps £2 million for social services. These are not hard figures; they are pro rata to existing expenditure. Of course that is only illustrative, but it is illustrative of the almost sheer impossibility of achieving these figures. The Minister knows only too well, especially in respect of education, that one cannot do that if one tries it mathematically with redundancy payments and all i he rest of it.
        What about the voluntary services which Conservative Members praise and laud? We do a lot for voluntary services in Newham. It is not much in terms of expenditure in proportion to the total; nor indeed are the activities to which Conservative Members may take some exception. They are minor in terms of the global total, but if one must cut money and there is no way out, then of course it is those very important things, the oil in the social structure, which can be cut and which come first and cause the sort of social damage that the Minister knows will occur in our multiracial community.
        Mr. Tony Banks: My hon. Friend well knows that the figure that Newham spends in terms of the voluntary

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        sector is about £5 million. The impact of the services and the community of Newham of wiping out the voluntary sector in one go, which will have to be done because that is the only obvious area to go to immediately, would be absolutely dire. Would my hon. Friend care to comment on that?
        Mr. Spearing: I am grateful to my hon. Friend for that figure, because it illustrates the problem of boroughs like Newham. If there is a legal straitjacket, a procrustean formula into which the borough is forced without any legal redress or any redress in justice whatsoever, and we go to the court, the court may say that there is no contractual relationship for those culpable things. There may be no liability for redundancy: there may be no redundancy agreements or whatever because the voluntary organisations are the last sort of organisations to be able to carry those. Where do they get the money anyway? There must be some flexibility in the formula in schedule 2.
        I and my hon. Friends have tabled a flexible formula in the form of amendment No. 132. It stands almost in its own right—I am glad to see the Minister nodding—although it may not be a perfect legal formula. Some consequential adjustment may be required to the definition of block grant. As block grant is related to expenditure limits, if we change those limits in the formula, some adjustment must be made to block grant.
        The amendment had to be tabled some time ago, which is an example of the difficulties being caused by the time scale of the Bill. Therefore, we are not saying that this, holus bolus, is the formula that we want. We have drafted an alternative formula that would, at least, give a GREA for the financial year 1987–88 plus 10 per cent.
        The table that the Minister kindly said was broadly correct would move Newham from GREA plus 3·7 per cent. to GREA plus 10 per cent. That is a modest request, although the Minister might not think so and may wish to substitute another figure. However, in principle there is an unassailable case for amendment No. 132. It does not move away from the formula; all it does—to use a phrase common in ministerial circles—is to state "whichever is the greater". One can follow one formula or another, but whichever is the greater and the more just is the one that is accepted. That is the basis of the structure of this rather complex amendment.
        The Minister may want to think about that suggestion. He has not had a great deal of time to consider the amendments, because of all the other things that have happened. I ask you, Mr. Armstrong, to give us the opportunity to agree or negative the amendment should that be necessary. However, I hope that the Minister will agree to consider the matter and, at a later stage in another place, give his thoughts to others who will take up this theme. If he agreed to that, we might not then need to press the amendment.
        Mr. Bowen Wells: I congratulate the hon. Member for Newham, South (Mr. Spearing) on the way in which he so eloquently put his case for an increase in GREA. No one in my constituency denies the very real needs they perceive in Newham. However, I suggest that they are not related to the GREA. If they are, it means that Hertfordshire has to pay to Newham the additional money that Newham believes it needs. The rate support grant system is a total grant that
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        is distributed according to GREA, or however it is distorted by whatever means Ministers find convenient to hand -when they are considering it.
        Mr. Stuart Holland: Surely there is a limited premise here—the assumption that increased expenditure in one borough must come from another borough. Why does not the hon. Gentleman press the Government Front Bench to do something about effective corporation tax and actually get some tax into the Exchequer from companies that are making thousands of millions pounds, or put a tax on the speculative profits made in the City of London? Then we would get that recycled into housing, health, education and social services, which the country desperately needs. The hon. Gentleman should be attacking the Government Front Bench and not seeking to restrain expenditure in other boroughs.
        Mr. Wells: The hon. Gentleman is advancing arguments that I shall not take up, if he will excuse me. I want to make a limited contribution on GREA and the unfairness that the system inflicts on Newham, Vauxhall and Hertfordshire.
        Hertfordshire has had a continuous reduction in its rate support grant settlement. That is because the system equates rateable value with low needs or high needs, whatever the case may be. Hertfordshire has seen a series of new towns and other developments, and these have come mainly since 1945. Thus it has a high rateable value and is assumed to have low needs. The system is so distorted that, although Hertfordshire is considered to have low needs—its income over the national average is only 13 per cent. —the way in which the RSG system and GREA work mean that it is considered to have an income that is 45 per cent. over the national needs calculation.
        In this year's settlement my right hon. Friend the Secretary of State and my hon. Friend the Minister of State inserted certain safeguards such as rate caps and safety nets. My right hon. Friend and my hon. Friend did not want to do that, but they did so because they recognised the unfairness that was being inflicted upon Hertfordshire, which was reflected in the services given to Hertfordshire people.
        Like my hon. Friend the Member for Hertfordshire, South-West (Mr. Page), who made his plea on Second Reading, as I did, I have urged that an end should be brought to the current argument, which if not interrupted will continue indefinitely, as the hon. Member for Newham, South has illustrated. Let us freeze the present system so that it is not changed next year or the year after that, until we inyroduce a new system that will not have the serious implications that the GREA formula has for Newham, South and the new town of Basildon, for example. The hon. Member for Newham, South will know that the new towns have a particular problem when it comes to GREA because they are more expensive to run than other towns. For example, Stevenage has no rate support grant because of the way in which it impacts upon that town and Hertfordshire generally. Basildon is a similar example.
        The GREA and the entire system of calculating RSG is thoroughly unfair to Newham, South and Hertfordshire. Having arrived at a settlement this year, my hon. Friend the Minister of State has striven over this issue and I am deeply grateful to him for taking into account my

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        complaints and those of others, courteously, if not productively, including those of the hon. Member for Newham, South. I ask him for an assurance that he will leave the system alone. Let us freeze it with the rate caps and the safety nets that have been introduced this year. That means that it will be equally unfair next year as this to Newham, South and Hertfordshire, but at least we shall not have the appalling arguments and tensions that we have had this year and for the past 15 years. We have argued picayune points about the way in which the system impacts upon various factors in the RSG formula.
        I earnestly ask my hon. Friend the Minister to give serious consideration to my plea. Let us leave the grant in Hertfordshire as it is so that people can predict what will happen. We may have a system that is unfair, but let us make it clear that that system will not change and that people must live with it until we introduce something better. If things continue to change Hertfordshire will probably not receive any RSG assistance, especially if the Minister listens to the arguments advanced by the hon. Member for Newham, South.
        11.15 pm
        Mr. Stuart Holland: I support this group of amendments and 1 draw particular attention to amendment No. 136 in schedule 2, page 12, line 45, at end insert—
        '(6A) "X" is the variable amount for each authority (which shall be not less than zero) which the Secretary of State shall determine for that authority having regard to its individual circumstances'.
        I also wish to echo the views of my hon. Friends and to draw attention to the problems and deprivations in Lambeth. In a key range of indicators only one other authority in the country, Hackney, has a higher incidence of deprivation than Lambeth. In five of the eight indicators used by the Department of Environment Lambeth comes in the top dozen authorities. With regard to the indicators that directly relate to housing deprivation, Lambeth ranks ninth in the indicator on overcrowded households and eleventh in the indicator of households that lack the exclusive use of amenities. It ranks second highest for the proportion of one-parent families and is sixth in the indicator relating to the proportion of the ethnic population in local authorities.
        The widespread nature of urban deprivation in Lambeth causes great concern. The council needs to adopt a wider base of programmes and policies even to begin to alleviate its problems. The ending of the strategic housing role of the Greater London council has meant slamming the door on inner boroughs such as Lambeth. Families cannot now be moved out of the borough. Thus it is increasingly difficult for the council to deal with the housing crisis.
        There has been much criticism about housing benefit from the Conservative Benches. The hon. Member for Streatham (Mr. Shelton) made certain allegations about the difficulties that Lambeth has in collecting rents, earlier in the debate but has now decided to quit the Chamber.
        It is extremely difficult for a borough such as Lambeth to collect rents from certain categories of people who are on the margins of survival. For example a recent survey carried out in Lambeth in 1986 showed that over 40 per cent. of the residents have an income of less than £5,200 a year and two thirds of those people were in council housing. When such families face delays in payments in
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        security benefits—there is a backlog of some 13,000 unrelated claims in at last two social security offices in my constituency—they are literally faced with having to decide whether to feed their children or pay their rent.
        The Government have failed to put resources into social services and they have also cut the housing investment programme for Lambeth in the manner that I illustrated earlier today. When 40 per cent. of council tenants are in receipt of housing benefit and therefore supplementary benefit it represents a major problem for the borough. It is compounded by the fact—I do not believe that it has been stressed in the debate so far—that 36 statutory instruments have been introduced by the Government that affect the payment of housing benefit. There were nine in 1982, eight in 1983, 10 in 1984, six in 1985 and three in 1986.
        It is virtually impossible for any local authority to undertake computerisation or other programmes to ensure an effective payment of housing benefit when there are so many changes in regulations introduced by the Government. Housing benefit has been thrown on to councils. Previously rent rebates were paid by the social security offices. But with the soaring rate of unemployment, now averaging 25 per cent. In my constituency, the Government have shifted the responsibility for those payments from the DHSS to the local boroughs. They cannot cope with the complexities.
        I have one further reservation. The X formula is excellent in principle, but I am not sure how it will be applied in practice under the Government. I suspect that they will think of a number, divide it by two, subtract X and still impose cuts on Labour boroughs. But we could make X an effective calculation I therefore support the amendments.
        Mr. John Fraser: I represent a Lambeth seat, and Lambeth is a rate-capped borough. The one small measure of mercy for us is the ability to have our expenditure limit redetermined, and rightly so. In December 1985, as a result of the borough taking legal proceedings against the Department of the Environment, an approach was made by the Department to Lambeth, and eventually there was an agreed redetermination, to avoid a court case. which came to almost exactly the same figure as the expenditure limits suggested by the borough for that financial year. In the current financial year, the Department threw out some pretty broad hints that if Lambeth applied for a limited redetermination, it would be given a redefined expenditure limit. The consequence of the Bill is that the opportunity for the Department to admit that it was wrong in setting the limit will be thrown away.
        Redetermination means an admission that the limit was set too low. I wish that we could find a more simple vocabulary for local government expressions. I used to sit in on the finance consultative council and listen to it talk about things such as regression annalysis, which I translated as repeating in the future the mistakes that had been made in the past. There was exemplification, which was a method of showing how a national disaster was translated into a local disaster. Now there is redetermination, which is a method of admitting that the initial calculation was wrong.
        There must be the opportunity to go back, which the Bill denies, and take into account local and special factors. One or two of these factors need to be accounted for. The first is the growth in equalising. A recent survey carried out

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        by an independent body, the Centre for Environmental Studies, shows that between 1979 and 1984, the average income of families in Lambeth decreased by 5 per cent., whereas in the country as a whole incomes rose by 4 per cent. before tax and about 1 per cent. after tax.
        However, the survey also shows something that is at the root of social tensions—that the average is not shared by all people. It found that since 1979, the poorest 25 per cent. of households experienced a 10 per cent. decline in their income before tax. The group with the largest drop in income—single parent family households—experienced a drop in income both before and after tax of between 17 and 18 per cent. One cannot make judgments about the extent of need in such communities on the basis of a desiccated calculating machine in Marsham street. I know that Visa used to advertise that it took the waiting out of wanting. The Department of the Environment, with its computer and formulae and algebra in schedule 2, is taking the caring out of calculating. We want the X factor, which puts it back in again.
        A second example of what needs to be taken into account is the level of unemployment. Today, Lambeth has provided me with figures that show that on the official statistics there is almost 26 per cent male unemployment, and over 13 per cent. female unemployment. Those are the statistics from the Department of Employment. However, the unofficial, and probably more reliable, statistics provided by Lambeth show male unemployment at 30 per cent. and female unemployment at 17 per cent. In the riot epicentre of Brixton unemployment is 32 per cent. The formulae fail to take into account the social strains that result from that degree of deprivation.
        My hon. Friend the Member for Vauxhall (Mr. Holland) and I are lucky enough to be so close to our constituencies that we can visit them during the course of debates. I was able to attend the opening of a social centre by Lord Scarman. That centre was opened partly as a result of Lord Scarman's 1981 inquiry report. The Scarman report was about what happens when a Government ignore the needs of ordinary people. On two occasions in Brixton we have seen the consequences of ignoring the needs and demands of ordinary working people. I hope that the Government will accept factor X, because it can put caring back into calculating.
        Mr. George Park: The introduction of an X factor into the formula would allow the different situations of the various transport authorities to be taken into account. Put briefly, in the west midlands there is a shortfall of £4·5 million. That poses for the public transport authorities some unpalatable choices. One of them is to reconsider the concessionary fare scheme, and that would be highly unpopular as well as unjust.
        Section 93 of the Transport Act 1985 allows district councils to fund a concessionary travel scheme. Responsibility could be shifted from the public transport authority to the district councils. Unfortunately, every district in the west midlands will be in a penalty situation in 1987–88 with a negative marginal rate for grant ranging from minus 54p in Coventry to minus 96p in Birmingham for spending below threshold. Therefore, unless there is a degree of flexibility, which the application of an X factor would allow, some of our forebodings about schemes, such
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        as concessionary fares, are likely to come true. For that reason, the amendment should be supported by all hon. Members.
        Mr. Lofthouse: I shall be brief. The formula laid down for the rate support grant will have devastating effects on many local authorities. Looking at the amount allowed for assistance to local government to cover claims under the Housing Defects Act 1984—the miserly sum of £50 million this financial year and £14 million next financial year—we see that the formula is tight. Many local authorities will not attract grant. Many authorities like the Wakefield metropolitan council in my area, will find themselves unable to meet their statutory obligations. On the one hand, the Governent produce an Act to cover people in defective houses and, on the other hand, do not provide the money to enable local authorities to meet their statutory obligations.
        Tenants on the Townville estate in Castleford, owned by British Coal, are in defective houses. An improvement scheme has been accepted by the Secretary of State, but the local authority cannot find the money to meet that obligation. The owners cannot purchase the houses in accordance with the Act, nor can they get them improved. The houses are completely blighted and unsaleable. What will the Minister do to assist local authorities in situations like that? The Government have produced the Act, but they cannot possibly expect local government to fulfil its statutory obligations if they do not assist with grants. The only course open to the owners is to go the courts and take on the local authorities, but the local authorities are not guilty.
        11.30 pm
        Mr. Tony Banks: I should like to speak in support of amendment No. 132 in the name of the three Newham Members.
        In an earlier debate the Minister talked about the level of rates in Newham. As a Newham ratepayer, I can assure the Minster that I do not like paying such heavy rates. However, I know why I have to pay those rates even though I do not particularly welcome them.
        The Minster mentioned the problems attached to rent arrears and the fact that rents have not gone up as fast as he felt they should in the borough of Newham. I should remind the Minister of a recent survey of residents in the borough which showed that in 1985 only 13 per cent. of Newham's residents had gross household incomes in excess of £13,000. In terms of our council housing 63 per cent. of all households receive housing benefit. In the private sector, 29 per cent. of all households receive housing benefit. That is the scale of the poverty in the London borough of Newham. It is not surprising that people get themselves into problems with rent arrears. That is why it is ludicrous for us to continue pushing up the rents in Newham when we know that the people in the borough will not be able to afford them. The problems will shift to another area because more and more will be claiming housing benefit.
        Newham is being told that in 1987–88 it can spend £157·4 million. That is £37 million less than we need and £10 million less than the borough is spending during the current year. It is impossible for the London borough of Newham to make cuts of the order of £10 million. I cannot believe that the Government seriously expect the borough to make such cuts knowing the problems and poverty

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        there. If they are expecting us to do that, they have no heart, no compassion and no decency. That is a telling indictment of the Government.
        The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): Before I answer the points that have been made on this group of amendments I should say something in response to a matter raised earlier by the right hon. Member for Wakefield (Mr. Harrison) about the residuary bodies and on the point he raised at an earlier stage in the proceedings of the Committee when I suggested that the Opposition were reluctant to divide on their amendments for fear that they did not have all their troops in place. The Division that followed that suggestion proved that is always wise not to underestimate the ability of the Opposition Whips to rally their forces in such circumstances. Although we have had the better of the Opposition in the Divisions, and I have no doubt that we have won the arguments, if I did cast a slur on the determination of the Opposition and their Whips I did not intend to do so and I am happy to confirm that I withdraw any slur that the right hon. Member for Wakefield thought that I had cast.
        Mr. Harrison: I thank the Minister for giving way. I have had to wait a long time, five days, and four hours, but it has been worth it. I was dismayed at the time because, as an ex-Chief Whip—I was given that acknowledgement by the Minister—I knew that our troops were around. I knew that our amendments were worthy of consideration and I knew that we were doing what we have always done, which is follow a code of conduct that exists in this place because of this type of Bill, with all its problems. Our Front Bench spokesmen were marvellous as were our Whips. I did not like it, but they consulted the Government Whips and the Bill was proceeding beautiful. The Minister gummed it up. I am pleased that he has had the guts to come to the Dispatch Box and, although they are belated, I accept his apologies.
        Shall I tell the Committee something about the Whips? am the guy who can. I shall not be long, Mr. Armstrong. Just a little indulgence. You know that I do not do it much. Our Whips whipped against me better than they whipped against the Government. Quite unsolicited, I had 171 who supported me. That was without consulting anyone. It was great; I had done the right thing. When the Wapping picket took place on our Lobby, however, only 10 came through. 1 was told that it was better than Wapping. Our Whips whipped better for the Government than they whipped for me. I had only 10.
        I appreciate the Minister coming to the Dispatch Box. It is a little lesson that we can all learn. I am very pleased that the Minister has had the guts to do it, although it has taken a little time. I thank him very much.
        Mr. Chope: I am grateful to the right hon. Gentleman. I have a lot to learn about the whipping system, compared with the right hon. Gentleman.
        The residuary bodies have an administrative task. If the right hon. Gentleman wants to write to the chairman of a residuary body, I am sure that he can expect a speedy answer.
        Mr. Harrison: I have done all that.
        Mr. Chope: The hon. Members for Newham, South (Mr. Spearing) and for Newham, North-West (Mr. Banks), who are strong advocates of their borough, argued
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        in favour of amendment No. 132. I have listened to the arguments, but I am not persuaded that we should accept the amendment. I shall not explain again the process by which the formulae were derived as it is now well known. Representations that the hon. Gentlemen and local representatives made when they met my hon. Friend the Minister for Local Government were not ignored. They may not like the result of our consideration, but we considered all that they had to say.
        It is true that Newham gets less grant than if it spends at a lower level, but it is wrong to see that as a tax on rates. It is the direct consequence of the council's decision to spend up. We have constructed the settlements in this way to keep pressure on high spending authorities. My hon. Friend the Member for Hertford and Stortford (Mr. Wells) put his finger on the point. We could make further concessions to high-spending authorities only at the expense, under the present grant distribution system, of authorities such as Hertfordshire. Newham is spending 18 per cent. above its GRE while Hertfordshire is spending only 2·2 per cent. above its GRE this year.
        Mr. Spearing: I am grateful to the Minister for giving way. Will he say now, or later if he does not have time now, which of the facts that I presented are incorrect or, if they are correct, where he departs from their logic so as to enable him not to accept the amendment? He said that we are spending 18 per cent. above GRE, but does he think that that justifies a cut to 3·7 per cent above GRE, especially when his penalising clauses of clawback operate only when we get to 10 per cent.?
        Mr. Chope: I do not think that I have time to go into all of the facts about Newham. I am far from satisfied, however, that it is doing all that it can to help itself. A £1·5 million Manpower Services Commission scheme for the borough's long-term unemployed was turned down as cheap labour, according to the Newham Recorder in October 1986, although it would have provided 300 places. We hear from Labour Members about Newham, but it shows that the people and the council in Newham are not doing all that they can to help themselves. When one hears of a firm in Newham with a turnover of £3 million that is paying £500,000 a year in rates, one realises that there is a strong case for some system of rate capping.
        I should like to refer briefly to the comments made by the hon. Members representing seats in Lambeth—the hon. Members for Vauxhall (Mr. Holland) and for Norwood (Mr. Fraser). Lambeth is a vastly overspending authority. I am amazed that those hon. Members come to the Committee and pronounce an apologia for what has been happening in Lambeth. Later this week I hope that they will be among the first to go out and purchase copies of the Audit Commission report on what has been happening in our inner boroughs. Perhaps they will be able to get them free. I hope that they will read and inwardly digest what is said in those documents, because then they might be able to make more constructive comments about the problems of Lambeth and how the borough could do something to help itself.
        The hon. Member for Vauxhall made considerable play about the housing benefit arrangements. However, I remind him of what the researcher from the Shelter Housing Aid Centre stated in June last year. Lambeth has an enormous housing benefits backlog of 64,000 unprocessed claims, 932 of which are three years old. The researcher stated:

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        "it's not the scheme which is at fault. Three years into the scheme you can't say that. The problem is much more to do with managerial and administrative methods".
        The problem in Lambeth is a wilfulness to try to become as irresponsible and badly managed as possible.
        I know that time is running short so, in the limited time available, I should like to mention the point made by the hon. Member for Coventry, North-East (Mr. Park), who spoke about the very real problems of defective housing. I am well aware of those problems because there are large numbers of defective houses in my constituency. However, I am bound to say that the Government have been extremely generous in bringing forward schemes for housing repairs. If a local authority can make a case for additional funds, it only has to put that case to my hon. Friend the Minister for Housing, Urban Affairs and Construction, and that will be considered. However, one of the tests will again be to what extent that local authority has done everything to help itself, from its own resources. That is one of the issues between the two sides of the Committee. I hope that it will reject the amendment.
        Amendment negatived.
        Clause 7, as amended, ordered to stand part of the Bill.

        Schedule 2

          RATES: MAXIMUM LIMIT
          Amendment proposed: No. 189, in page 12, line 8, leave out '1·025' and insert '1·04.'.—[Mr. Galley.]
          Question put, That the amendment be made:—
          The Committee divided: Ayes 166, Noes 232.

          Division No. 73]

          [11.45 pm

          AYES

          Abse, Leo

          Corbett, Robin

          Adams, Allen (Paisley N)

          Corbyn, Jeremy

          Alton, David

          Craigen, J. M.

          Anderson, Donald

          Crowther, Stan

          Archer, Rt Hon Peter

          Cunlitfe, Lawrence

          Ashley, Rt Hon Jack

          Cunningham, Dr John

          Atkinson, N. (Tottenham)

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

          Bagier, Gordon A. T.

          Deakins, Eric

          Banks, Tony (Newham NW)

          Dewar, Donald

          Barron, Kevin

          Dixon, Donald

          Beckett, Mrs Margaret

          Dobson, Frank

          Bell, Stuart

          Dormand, Jack

          Benn, Rt Hon Tony

          Dubs, Alfred

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

          Dunwoody, Hon Mrs G.

          Bermingham, Gerald

          Eadie, Alex

          Bidwell, Sydney

          Eastham, Ken

          Blair, Anthony

          Evans, John (St. Helens N)

          Boyes, Roland

          Faulds, Andrew

          Bray, Dr Jeremy

          Field, Frank (Birkenhead)

          Brown, Gordon (D'f'mline E)

          Fields, T. (L'pool Broad Gn)

          Brown, Hugh D. (Provan)

          Fisher, Mark

          Buchan, Norman

          Flannery, Martin

          Caborn, Richard

          Foot, Rt Hon Michael

          Callaghan, Jim (Heyw'd & M)

          Forrester, John

          Campbell-Savours, Dale

          Foster, Derek

          Canavan, Dennis

          Foulkes, George

          Carter-Jones, Lewis

          Fraser, J. (Norwood)

          Clark, Dr David (S Shields)

          Freud, Clement

          Clarke, Thomas

          George, Bruce

          Clay, Robert

          Gilbert, Rt Hon Dr John

          Clelland, David Gordon

          Godman, Dr Norman

          Clwyd, Mrs Ann

          Golding, Mrs Llin

          Cocks, Rt Hon M. (Bristol S)

          Gould, Bryan

          Cohen, Harry

          Hamilton, James (M'well N)

          Conlan, Bernard

          Hamilton, W. W. (Fife Central)

          Cook, Frank (Stockton North)

          Hancock, Michael

          Cook, Robin F. (Livingston)

          Harrison, Rt Hon Walter

          144

          Haynes, Frank

          Pendry, Tom

          Heffer, Eric S.

          Pike, Peter

          Hogg, N. (C'nauld & Kilsyth)

          Powell, Raymond (Ogmore)

          Holland, Stuart (Vauxhall)

          Prescott, John

          Home Robertson, John

          Radice, Giles

          Howarth, George (Knowsley, N)

          Randall, Stuart

          Hoyle, Douglas

          Raynsford, Nick

          Hughes, Robert (Aberdeen N)

          Redmond, Martin

          Hughes, Roy (Newport East)

          Rees, Rt Hon M. (Leeds S)

          Hughes, Sean (Knowsley S)

          Richardson, Ms Jo

          Hughes, Simon (Southwark)

          Roberts, Allan (Bootle)

          Janner, Hon Greville

          Roberts, Ernest (Hackney N)

          John, Brynmor

          Robertson, George

          Jones, Barry (Alyn & Deeside)

          Rooker, J. W.

          Kaufman, Rt Hon Gerald

          Ross, Ernest (Dundee W)

          Lambie, David

          Rowlands, Ted

          Lamond, James

          Sedgemore, Brian

          Leadbitter, Ted

          Sheerman, Barry

          Leighton, Ronald

          Sheldon, Rt Hon R.

          Lewis, Terence (Worsley)

          Shore, Rt Hon Peter

          Litherland, Robert

          Short, Ms Clare (Ladywood)

          Lloyd, Tony (Stretford)

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

          Lofthouse, Geoffrey

          Silkin, Rt Hon J.

          Loyden, Edward

          Skinner, Dennis

          McCartney, Hugh

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

          McDonald, Dr Oonagh

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

          McKay, Allen (Penistone)

          Snape, Peter

          McNamara, Kevin

          Soley, Clive

          McTaggart, Robert

          Spearing, Nigel

          McWilliam, John

          Stott, Roger

          Madden, Max

          Straw, Jack

          Marshall, David (Shettleston)

          Thomas, Dafydd (Merioneth)

          Martin, Michael

          Thomas, Dr R. (Carmarthen)

          Maxton, John

          Thompson, J. (Wansbeck)

          Maynard, Miss Joan

          Thorne, Stan (Preston)

          Meacher, Michael

          Tinn, James

          Meadowcroft, Michael

          Warden, Gareth (Gower)

          Michie, William

          Wareing, Robert

          Millan, Rt Hon Bruce

          Weetch, Ken

          Mitchell, Austin (G't Grimsby)

          Welsh, Michael

          Morris, Rt Hon A. (W'shawe)

          White, James

          Morris, Rt Hon J. (Aberavon)

          Williams, Rt Hon A.

          Nellist, David

          Winnick, David

          Oakes, Rt Hon Gordon

          Young, David (Bolton SE)

          O'Brien, William

          O'Neill, Martin

          Tellers for the Ayes:

          Park, George

          Mr. Ron Davies and

          Patchett, Terry

          Mr. Derek Fatchett.

          NOES

          Alexander, Richard

          Browne, John

          Alison, Rt Hon Michael

          Bruinvels, Peter

          Amess, David

          Buck, Sir Antony

          Ancram, Michael

          Budgen, Nick

          Arnold, Tom

          Bulmer, Esmond

          Ashby, David

          Burt, Alistair

          Atkinson, David (B'm'th E)

          Butcher, John

          Baker, Nicholas (Dorset N)

          Butterfill, John

          Batiste, Spencer

          Carlisle, John (Luton N)

          Bellingham, Henry

          Carttiss, Michael

          Bendall, Vivian

          Cash, William

          Benyon, William

          Chapman, Sydney

          Best, Keith

          Chope, Christopher

          Biffen, Rt Hon John

          Churchill, W. S.

          Biggs-Davison, Sir John

          Clark, Dr Michael (Rochford)

          Blackburn, John

          Clark, Sir W. (Croydon S)

          Body, Sir Richard

          Clarke, Rt Hon K. (Rushcliffe)

          Bonsor, Sir Nicholas

          Cockeram, Eric

          Boscawen, Hon Robert

          Colvin, Michael

          Bottomley, Peter

          Conway, Derek

          Bottomley, Mrs Virginia

          Coombs, Simon

          Bowden, A. (Brighton K'to'n)

          Cope, John

          Bowden, Gerald (Dulwich)

          Couchman, James

          Boyson, Dr Rhodes

          Cranborne, Viscount

          Brandon-Bravo, Martin

          Crouch, David

          Bright, Graham

          Currie, Mrs Edwina

          Brinton, Tim

          Dickens, Geoffrey

          Brittan, Rt Hon Leon

          Dicks, Terry

          Brooke, Hon Peter

          Dorrell, Stephen

          Brown, M. (Brigg & Cl'thpes)

          Douglas-Hamilton, Lord J.

          145

          Dover, Den

          Newton, Tony

          du Cann, Rt Hon Sir Edward

          Nicholls, Patrick

          Dunn, Robert

          Onslow, Cranley

          Durant, Tony

          Oppenheim, Phillip

          Dykes, Hugh

          Ottaway, Richard

          Eggar, Tim

          Page, Richard (Herts SW)

          Evennett, David

          Patten, Christopher (Bath)

          Eyre, Sir Reginald

          Patten, J. (Oxf W & Abgdn)

          Favell, Anthony

          Pawsey, James

          Forman, Nigel

          Pollock, Alexander

          Forsyth, Michael (Stirling)

          Powell, William (Corby)

          Forth, Eric

          Powley, John

          Fox, Sir Marcus

          Price, Sir David

          Franks, Cecil

          Proctor, K. Harvey

          Garel-Jones, Tristan

          Raffan, Keith

          Glyn, Dr Alan

          Raison, Rt Hon Timothy

          Gow, Ian

          Rathbone, Tim

          Gower, Sir Raymond

          Rhodes James, Robert

          Griffiths, Sir Eldon

          Rhys Williams, Sir Brandon

          Hamilton, Neil (Tatton)

          Ridley, Rt Hon Nicholas

          Hannam, John

          Ridsdale, Sir Julian

          Harris, David

          Roberts, Wyn (Conwy)

          Heathcoat-Amory, David

          Robinson, Mark (N'port W)

          Higgins, Rt Hon Terence L.

          Roe, Mrs Marion

          Holland, Sir Philip (Gedling)

          Rost, Peter

          Howarth, Alan (Stratf'd-on-A)

          Rowe, Andrew

          Howarth, Gerald (Cannock)

          Rumbold, Mrs Angela

          Howell, Ralph (Norfolk, N)

          Ryder, Richard

          Jackson, Robert

          Sackville, Hon Thomas

          Knowles, Michael

          Sainsbury, Hon Timothy

          Knox, David

          Sayeed, Jonathan

          Lamont, Rt Hon Norman

          Shaw, Giles (Pudsey)

          Latham, Michael

          Shaw, Sir Michael (Scarb')

          Lawler, Geoffrey

          Shelton, William (Streatham)

          Lawrence, Ivan

          Shepherd, Colin (Hereford)

          Leigh, Edward (Gainsbor'gh)

          Shepherd, Richard (Aldridge)

          Lennox-Boyd, Hon Mark

          Shersby, Michael

          Lester, Jim

          Silvester, Fred

          Lightbown, David

          Skeet, Sir Trevor

          Lilley, Peter

          Smith, Tim (Beaconsfield)

          Lloyd, Sir Ian (Havant)

          Speed, Keith

          Lord, Michael

          Speller, Tony

          Luce, Rt Hon Richard

          Spencer, Derek

          Lyell, Nicholas

          Spicer, Jim (Dorset W)

          McCrindle, Robert

          Spicer, Michael (S Worcs)

          McCurley, Mrs Anna

          Squire, Robin

          Macfarlane, Neil

          Stanbrook, Ivor

          MacKay, Andrew (Berkshire)

          Stanley, Rt Hon John

          MacKay, John (Argyll & Bute)

          Steen, Anthony

          Maclennan, Robert

          Stern, Michael

          McLoughlin, Patrick

          Stevens, Lewis (Nuneaton)

          McNair-Wilson, P. (New F'st)

          Stewart, Allan (Eastwood)

          McQuarrie, Albert

          Stewart, Andrew (Sherwood)

          Madel, David

          Stewart, Ian (Hertf'dshire N)

          Major, John

          Stradling Thomas, Sir John

          Malins, Humfrey

          Taylor, John (Solihull)

          Malone, Gerald

          Taylor, Teddy (S'end E)

          Maples, John

          Temple-Morris, Peter

          Marland, Paul

          Terlezki, Stefan

          Marlow, Antony

          Thatcher, Rt Hon Mrs M.

          Marshall, Michael (Arundel)

          Thomas, Rt Hon Peter

          Mates, Michael

          Thompson, Donald (Calder V)

          Mather, Sir Carol

          Thornton, Malcolm

          Maude, Hon Francis

          Thurnham, Peter

          Maxwell-Hyslop, Robin

          Townend, John (Bridlington)

          Mayhew, Sir Patrick

          Trippier, David

          Merchant, Piers

          Trotter, Neville

          Meyer, Sir Anthony

          Twinn, Dr Ian

          Miller, Hal (B'grove)

          van Straubenzee, Sir W.

          Mills, lain (Meriden)

          Vaughan, Sir Gerard

          Miscampbell, Norman

          Viggers, Peter

          Mitchell, David (Hants NW)

          Wakeham, Rt Hon John

          Moate, Roger

          Waldegrave, Hon William

          Monro, Sir Hector

          Walden, George

          Montgomery, Sir Fergus

          Walker, Bill (T'side N)

          Morrison, Hon C. (Devizes)

          Waller, Gary

          Moynihan, Hon C.

          Ward, John

          Neale, Gerrard

          Wardle, C. (Bexhill)

          Nelson, Anthony

          Warren, Kenneth

          Neubert, Michael

          Watson, John

          146

          Watts, John

          Wood, Timothy

          Wells, Bowen (Hertford)

          Woodcock, Michael

          Wells, Sir John (Maidstone)

          Yeo, Tim

          Wheeler, John

          Young, Sir George (Acton)

          Whitfield, John

          Whitney, Raymond

          Tellers for the Noes:

          Wiggin, Jerry

          Mr. Peter Lloyd and

          Wolfson, Mark

          Mr. Michael Portillo

          Question accordingly negatived.
          Amendment proposed: No. 135, in page 12, line 42, leave out '19th' and insert `20th'.—[Dr. Boyson.]
          Mr. John Fraser: We would like some explanation as to why a Sunday has been substituted for a Saturday. The suspicion is that the Bill was published on 18 December and that one or two Tory authorities may have been helped by switching the date for the notification of information from a Saturday to a Sunday. We would be interested to know about those authorities which can manage to get some information to an unmanned Marsham street on a Sunday rather than a Saturday.
          Dr. Boyson: We felt that the Bill was so important that we should give it the holiness of a Sunday being built into it. The better the day, the better the deed. The basis of the Bill is that local authorities should know what rates they will have to fix for 1 April. If the Bill were not enacted, we could not give rate support grant to local authorities for 1 April and that would cause uproar the length and breadth of Britain, including all Labour authorities. The rate-capped authorities now know that there can be no change. Similarly, other authorities will know what their grant should be so that they can fix their rate. Just as the good Lord rested on a Sunday, we too shall rest having done this for the good of local government through the length and breadth of Britain.
          Mr. Fraser: We thought that it was only the chief constable of Manchester who had a message from the good Lord. We now realise that such is the state of the Department of the Environment that it has to rely upon not just temporal but divine inspiration to put together its legislation. But we do not regard that explanation as adequate. We want to know which authorities would be disadvantaged as a result of having Saturday 19 December in the Bill rather than Sunday 20 December. It is not enough simply to tell us that a kind of religious quality is now being imparted into local government legislation. That is too flippant an explanation. We want to know who gains by having Sunday instead of Saturday.
          Dr. Boyson: When a tram first brought me to the House in 1961 there were three or four postal deliveries on a Saturday. I remember my amazement when, returning home with my children to Chingford in Essex, the area to which I had moved at that time, having been boating with them, I found that at five o'clock that afternoon there was a postal delivery. Now, if I get my post at some time on a Saturday morning I have to be grateful for it. The postmen are very nice when they come, but the deliveries are not reliable.
          However, I can put the mind of the House and of the hon. Gentleman at rest, because one thing that we do know is that there is no postal delivery on a Sunday and, as far as I know, neither the Secretary of State nor I was in the Department of the Environment on that day. Nobody communicated with us on that day. If the hon.

          147
          Gentleman thinks that there was some subterranean advantage in doing this, it just shows how suspicious he is.
          The message that we must get to the country is that just as the date is a Sunday, not a Saturday, the guillotine will fall on a Monday at 12 pm and a cheer will go up the length and breadth of the country. As we pass the Bill to another place, local authorities will know where they stand on their rates and rate capping for this year with all certainty.
          Mr. Fraser: That load of blather will not do. The Minister was asked why there was a change from a Saturday to a Sunday. We simply do not believe that kind of explanation. There must be some reason, some authority, perhaps some little favourite of the Department or the Welsh Office—
          It being Twelve O'clock, THE FIRST DEPUTY CHAIRMAN proceeded, pursuant to the Order this day, to put forthwith the Question already proposed from the Chair.
          Amendment agreed to.
          THE FIRST DEPUTY CHAIRMAN then proceeded successively to put forthwith the Questions necessary to bring the proceedings in Committee to a conclusion.
          Amendments made: No. 137, in page 12, line 47, leave out '19th' and insert '20th'.
          No. 139, in page 13, line 9, leave out second 'the' and insert 'an'
          No. 140, in page 13, line 10, after 'charges', insert
          ', or by way of provision for pay and price changes, or on school meals and milk,'.—[Mr. Neubert.]
          Schedule 2, as amended, agreed to.

        Clause 8

          SANCTIONS
          Amendment made: No. 147, in page 7, line 26, at end add—
          '(11) This section applies only in relation to rates for, and precepts in respect of, the financial year beginning in 1987.'.—[Mr. Neubert.]
          Clause 8, as amended, ordered to stand part of the Bill.

        Clause 9

          POWER OF SPECIFYING: GENERAL
          Amendments made: No. 150, in page 7, line 29, leave out '(4), (5)' and insert '(1)'.
          No. 152, in page 7, line 40, leave out '(4), (5)' and insert '(1)'.
          No. 153, in page 7, line 41, leave out from 'principles' to 'all' in line 42 and insert `to be applied to'.—[Mr. Neubert.]
          Clause 9, as amended, ordered to stand part of the Bill.
          Clause 10 and 11 disagreed to.
          Clauses 12 ordered to stand part of the Bill.

        Schedule 3

          AMENDMENTS
          Amendments made: No. 174, in page 13, line 40, at end insert—
          '1A. In section 56(6) and (7) of the 1980 Act for "the total expenditure to be incurred by them during" there shall be substituted "their total expenditure in relation to".'.
          148
          No. 175, in page 13, leave out from beginning of line 41 to end of line 12 on page 14 and insert—
          "Information
          '2. The following shall be substituted for section 65 of the 1980 Act—
          65.—(1) Each local authority shall submit to the Secretary of State in respect of each year, in such form and by such date as he may specify, such of the information mentioned in subsection (2) below as he may from time to time require for the purposes of this Part of this Act, section 8 of the Local Government Finance Act 1982, section 2 of the Rate Support Grants Act 1986 and sections 1 and 2 of the Local Government Finance Act 1987.
          (2) The information is information as to the following matters—

          (a) the expenditure incurred, or to be incurred, by the authority during the year,

          (b) their relevant expenditure in relation to the year,

          (c) their total expenditure in relation to the year, and

          (d) their accounts for the year.

          (3) The information required under subsection (1) above may include any of the following—

          (a) what the authority calculate as the amount of expenditure incurred, or likely to be incurred, by them during the year,

          (b) what the authority calculate as the amount, or likely amount, of their relevant expenditure in relation to the year,

          (c) what the authority calculate as the amount, or likely amount, of their total expenditure in relation to the year,

          (d) what the authority calculate as the amount of any addition or subtraction to be made in relation to the year by virtue of any specification under section 3(1) or (7) of the Local Government Finance Act 1987, and

          (e) information about the items of account which are likely to be (as well as those which have been) debited or credited to the authority's accounts for the year.

          (4) Where no or no sufficient information as to the matters mentioned in subsection (2) above has been submitted to the Secretary of State in respect of a year, whether under subsection (1) above or otherwise, he may for the purpose of making a supplementary report, an adjustment under section 62 above or an estimate under section 66(1) below make such assumptions as to those matters as he thinks appropriate.
          (5) Where any information as to any of the matters mentioned in subsection (2) above is submitted to the Secretary of State under subsection (1) above after the date specified by him, or otherwise than under that subsection, he may for any of the purposes mentioned in subsection (4) above disregard it if he considers that it is not reasonably practicable to take it into account for that purpose.'.—[Mr. Neubert.]
          Schedule 3, as amended, agreed to.

        Schedule 4

          REPEALS
          Amendments made: No. 182, in page 15, column 3, leave out line 34 and insert—
          'In section 9, subsections (2) and (3)
          In Schedule 2, paragraphs 3 and 9'.
          No. 183, in page 15, line 38, at end insert—

          '1986 c. 54.

          Rate Support Grants Act 1986.

          In Schedule 1, paragraph 13'.

          Schedule 4, as amended, agreed to.

        Clause 13

          INTERPRETATION
          Amendment made: No. 187, in page 9, line 25, at end insert—
          '(2A) In relation to an intermediate year beginning in 1983, 1984 or 1985, "local authority" in this Part of this Act also includes the Greater London Council but does not include a joint authority.'.—[Mr. Neubert]
          Clause 13, as amended, ordered to stand part of the Bill.
          Clauses 14 to 17 ordered to stand part of the Bill.

        New Clause 4

          SPECIAL PROVISIONS AS TO RATE SUPPORT GRANT
          'Schedule (Rate support grant: special provisions) to this Act (which contains special provisions as to rate support grant) shall have effect.'—[Mr. Neubert]
          Brought up, read the First and Second time, and added
          to the Bill.

        New Schedule

          RATE SUPPORT GRANT: SPECIAL PROVISIONS
          Consultation
          1.—(1) Sub-paragraphs (2) and (3) below apply as regards the Rate Support Grant Report for England for the year beginning in 1987 and the Rate Support Grant Report for Wales for that year.
          (2) If the Secretary of State proposes to include in such a Report any specification under section 1(6), 2(4) or 3(1), (7) or (8) of this Act in respect of that year, section 60(5) of the 1980 Act shall not require consultation to be made (as regards that Report) as to any matter relating to such a specification.
          (3) The requirements of section 60(5) of the 1980 Act may be satisfied (as regards such a Report) by consultation before the passing of this Act.
          (4) Sub-paragraphs (5) and (6) below apply as regards—

          (a) the first supplementary report proposed to be made after the passing of this Act for England for the year beginning in 1985,

          (b) the first supplementary report proposed to be so made for England for the year beginning in 1986, and

          (c) the first supplementary report proposed to be made for Wales for the year beginning in 1986.

          (5) If the Secretary of State proposes to include in such a report any specification under section 1(6), 2(4) or 3(1), (7) or (8) of this Act in respect of the year concerned, section 60(5) of the 1980 Act (as applied by section 61(2)) shall not require consultation to be made (as regards that report) as to any matter relating to such a specification.
          (6) The requirements of section 60(5) of the 1980 Act (as applied by section 61(2)) may be satisfied (as regards such a report) by consultation before the passing of this Act.
          (7) Sub-paragraphs (2) and (3) above also apply as regards any Report proposed to be made in substitution (directly or indirectly) for any Report mentioned in sub-paragraph (1) above.
          Sub-paragraphs (5) and (6) above also apply as regards any report proposed to be made in substitution (directly or indirectly) for—

          (a) the first supplementary report made after the passing of this Act for England for the year beginning in 1985,

          (b) the first supplementary report so made for England for the year beginning in 1986, or

          (c) the first supplementary report so made for Wales for the year beginning in 1986.

          (9) In a case where sub-paragraph (2) or (5) above applies, section 9(4) of this Act shall not apply in relation to the exercise of the power to specify.
          Certain matters to he disregarded
          2.—(1) In making any determination or doing any other thing (other than making an excepted specification) after the
          150
          passing of this Act for the purposes of any relevant report, the Secretary of State shall leave out of account information and representations received by him on or after the relevant date.
          (2) Part VI of the 1980 Act shall have effect subject to this paragraph.
          (3) In this paragraph "relevant report" means any report as regards which paragraph 1(2) and (3) above or 1(5) and (6) above apply.
          (4) In this paragraph "the relevant date" means 20th December 1986 in the case of

          (a) the Rate Support Grant Report for England for the year beginning in 1987.

          (b) any Report proposed to be made in substitution (directly or indirectly) for the Report mentioned in paragraph (a) above.

          (c) the report mentioned in paragraph 1(4)(b) above, or

          (d) any report proposed to be made in substitution (directly or indirectly) for the report mentioned in paragraph 1(8)(b) above.

          (5) In this paragraph "the relevant date" means 11th December 1986 in the case of—
          (a) the report mentioned in paragraph 1(4)(b) above, or
          (b) any report proposed to be made in substitution (directly or indirectly) for the report mentioned in paragraph 1(8)(a) above.
          (6) In this paragraph "the relevant date" means 4th December 1986 in the case of—

          (a) the Rate Support Grant Report for Wales for the year beginning in 1987,

          (b) any Report proposed to be made in substitution (directly or indirectly) for the Report mentioned in paragraph (a) above,

          (c) the report mentioned in paragraph 1(4)(c) above, or

          (d) any report proposed to be made in substitution (directly or indirectly) for the report mentioned in paragraph 1(8)(c) above.

          (7) In this paragraph "an excepted specification" means a specification made under section 1(6), 2(4) or 3(1), (7) or (8) of this Act.
          Submissions as to total expenditure
          3.—(1) Sub-paragraph (2) below applies where before the relevant date a local authority submitted to the Secretary of State an amount which it estimates as its total expenditure in relation to any relevant year.
          (2) In doing any of the acts mentioned in sub-paragraph (3) below the Secretary of State shall treat the a mount submitted as the amount of the authority's total expenditure in relation to the year.
          (3) The acts are—

          (a) making any determination or doing any other thing after the passing of this Act for the pruposes of any relevant report, and

          (b) making under section 66(1) of the 1980 Act the first estimate and notification to be made after the passing of this Act as regards the authority concerned for the year for which the amount was submitted.

          (4) Part VI of the 1980 Act shall have effect subject to this paragraph.
          (5) For the purposes of sub-paragraph (2) above—

          (a) if the authority and the Secretary of State agreed before the relevant date an amount to replace any amount submitted, the amount submitted shall he taken to be the amount agreed, and

          (b) subject to paragraph (a) above, if more than one amount was submitted before the relevant date, the amount submitted shall be taken to be the latest to be so submitted.

          (6) For the purposes of this paragraph years beginning in 1985 and 1986 are relevant years as regards England, and the year beginning in 1986 is a relevant year as regards Wales.
          (7) In this paragraph "relevant report" means any report as regards which paragraph 1(5) and (6) above apply.
          (8) In this paragraph "the relevant date" means—

          (a) 20th December 1986, in the case of an amount submitted by an English authority for the year beginning in 1986,

          151

          (b) 11th December 1986, in the case of an amount submitted by an English authority for the year beginning in 1985, or

          (c) 4th December 1986, in the case of an amount submitted by a Welsh authority for the year beginning in 1986.

          Teachers' remuneration
          4.—(1) In making any determination or doing any other thing after the passing of this Act for the purposes of any Report as regards which paragraph 1(2) and (3) above apply, the Secretary of State shall leave out of account the matters mentioned in sub-paragraph (2) below.
          (2) The matters are scales and allowances which relate to the remuneration of school teachers and provide for remuneration greater than the aggregate of—

          (a) the remuneration in payment on 19th December 1986, and

          (b)3·75 per cent. of the remuneration mentioned in paragraph (a) above (3·75 per cent. being the approximate increase in the GDP deflator for 1987–88, as predicted in the Autumn Statement 1986 presented to Parliament by the Chancellor of the Exchequer in November 1986).

          (3) In making any determination or doing any other thing after the passing of this Act for the purposes of—

          (a) the report mentioned in paragraph 1(4)(b) above or that mentioned in paragraph 1(4)(c) above, or

          (b) any report proposed to be made in substitution (directly or indirectly) for the report mentioned in paragraph 1(8)(b) above or that mentioned in paragraph 1(8)(c) above,

          the Secretary of State shall leave out of account the matters mentioned in sub-paragraph (4) below.
          (4) The matters are scales and allowances which relate to the remuneration of school-teachers and provide for remuneration greater than the remuneration in payment on 19th December 1986.
          (5) Part VI of the 1980 Act and paragraph 3 above shall have effect subject to this paragraph.
          (6) In this paragraph "school-teacher" means—

          (a) a teacher in a primary or secondary school maintained by a local education authority, or

          (b) a person employed by a local education authority as a teacher in the provision of primary or secondary education, other than a person employed as a teacher in an establishment maintained by a local authority in the exercise of a social services.'.—[Neubert]

          Brought up, read the First and Second time, and added to the Bill.
          Bill reported, with amendments; as amended, considered.
          Question proposed, That the Bill be now read the Third time:—
          12.3 am
          Mr. Allan Roberts: On a point of order, Mr. Deputy Speaker. In Committee, amendment No. 189 was moved and put to a vote. Both the movers of the amendment probably either voted against the amendment or abstained. That kind of precedent is unusual and would have been debated on Report. However, we have been denied a Report stage. Will it be possible to ensure that the other place debates that amendment and the significance of hon. Members tabling amendments and then voting against them, so that Halifax and Batley and Spen can know what is happening?
          Mr. Deputy Speaker (Mr. Ernest Armstrong): There was nothing out of order in the proceedings.
          Question put:—
          The House divided: Ayes 233, Noes 165.

          Division No. 74]

          [12.05 am

          AYES

          Aitken, Jonathan

          Hamilton, Neil (Tatton)

          Alexander, Richard

          Hannam,John

          Alison, Rt Hon Michael

          Harris, David

          Amess, David

          Hayes, J.

          Ancram, Michael

          Heathcoat-Amory, David

          Arnold, Tom

          Hicks, Robert

          Ashby, David

          Higgins, Rt Hon Terence L.

          Atkinson, David (B'm'th E)

          Holland, Sir Philip (Gedling)

          Baker, Nicholas (Dorset N)

          Howarth, Alan (Stratf'd-on-A)

          Batiste, Spencer

          Howarth, Gerald (Cannock)

          Bellingham, Henry

          Howell, Ralph (Norfolk, N)

          Bendall, Vivian

          Jackson, Robert

          Benyon, William

          Knowles, Michael

          Best, Keith

          Knox, David

          Biffen, Rt Hon John

          Lamont, Rt Hon Norman

          Biggs-Davison, Sir John

          Latham, Michael

          Blackburn, John

          Lawler, Geoffrey

          Body, Sir Richard

          Lawrence, Ivan

          Bonsor, Sir Nicholas

          Leigh, Edward (Gainsbor'gh)

          Boscawen, Hon Robert

          Lennox-Boyd, Hon Mark

          Bottom ley, Peter

          Lester, Jim

          Bottomley, Mrs Virginia

          Lilley, Peter

          Bowden, A. (Brighton K'to'n)

          Lloyd, Sir Ian (Havant)

          Bowden, Gerald (Dulwich)

          Lloyd, Peter (Fareham)

          Boyson, Dr Rhodes

          Lord, Michael

          Brandon-Bravo, Martin

          Luce, Rt Hon Richard

          Bright, Graham

          Lyell, Nicholas

          Brinton, Tim

          McCrindle, Robert

          Brittan, Rt Hon Leon

          McCurley, Mrs Anna

          Brooke, Hon Peter

          Macfarlane, Neil

          Brown, M. (Brigg & Cl'thpes)

          MacKay, Andrew (Berkshire)

          Browne, John

          MacKay, John (Argyll & Bute)

          Bruinvels, Peter

          Maclean, David John

          Buck, Sir Antony

          McLoughlin, Patrick

          Budgen, Nick

          McNair-Wilson, P. (New F'st)

          Bulmer, Esmond

          McQuarrie, Albert

          Burt, Alistair

          Madel, David

          Butcher, John

          Major, John

          Butterfill, John

          Malins, Humfrey

          Carlisle, John (Luton N)

          Malone, Gerald

          Carttiss, Michael

          Maples, John

          Cash, William

          Marland, Paul

          Chapman, Sydney

          Marlow, Antony

          Chope, Christopher

          Marshall, Michael (Arundel)

          Churchill, W. S.

          Mates, Michael

          Clark, Dr Michael (Rochford)

          Mather, Sir Carol

          Clark, Sir W. (Croydon S)

          Maxwell-Hyslop, Robin

          Clarke, Rt Hon K. (Rushclifie)

          Mayhew, Sir Patrick

          Cockeram, Eric

          Merchant, Piers

          Colvin, Michael

          Meyer, Sir Anthony

          Conway, Derek

          Miller, Hal (B'grove)

          Coombs, Simon

          Mills, lain (Meriden)

          Cope, John

          Miscampbell, Norman

          Couchman, James

          Mitchell, David (Hants NW)

          Cranborne, Viscount

          Moate, Roger

          Crouch, David

          Monro, Sir Hector

          Currie, Mrs Edwina

          Montgomery, Sir Fergus

          Dickens, Geoffrey

          Morrison, Hon C. (Devizes)

          Dicks, Terry

          Moynihan, Hon C.

          Dorrell, Stephen

          Neale, Gerrard

          Douglas-Hamilton, Lord J.

          Nelson, Anthony

          Dover, Den

          Neubert, Michael

          du Cann, Rt Hon Sir Edward

          Newton, Tony

          Dunn, Robert

          Nicholls, Patrick

          Durant, Tony

          Onslow, Cranley

          Dykes, Hugh

          Oppenheim, Phillip

          Eggar, Tim

          Ottaway, Richard

          Evennett, David

          Page, Richard (Herts SW)

          Forman, Nigel

          Patten, Christopher (Bath)

          Forsyth, Michael (Stirling)

          Patten, J. (Oxf W & Abgdn)

          Forth, Eric

          Pawsey, James

          Fox, Sir Marcus

          Pollock, Alexander

          Franks, Cecil

          Portillo, Michael

          Garel-Jones, Tristan

          Powell, William (Corby)

          Glyn, Dr Alan

          Powley, John

          Gow, Ian

          Price, Sir David

          Gower, Sir Raymond

          Proctor, K. Harvey

          Griffiths, Sir Eldon

          Raffan, Keith

          153

          Raison, Rt Hon Timothy

          Taylor, Teddy (S'end E)

          Rathbone, Tim

          Temple-Morris, Peter

          Rhodes James, Robert

          Terlezki, Stefan

          Rhys Williams, Sir Brandon

          Thatcher, Rt Hon Mrs M.

          Ridley, Rt Hon Nicholas

          Thomas, Rt Hon Peter

          Ridsdale, Sir Julian

          Thompson, Donald (Calder V)

          Roberts, Wyn (Conwy)

          Thornton, Malcolm

          Robinson, Mark (N'port W)

          Thurnham, Peter

          Roe, Mrs Marion

          Townend, John (Bridlington)

          Rost, Peter

          Trippier, David

          Rowe, Andrew

          Trotter, Neville

          Rumbold, Mrs Angela

          Twinn, Dr lan

          Ryder, Richard

          van Straubenzee, Sir W.

          Sackville, Hon Thomas

          Vaughan, Sir Gerard

          Sainsbury, Hon Timothy

          Viggers, Peter

          Sayeed, Jonathan

          Wakeham, Rt Hon John

          Shaw, Giles (Pudsey)

          Waldegrave, Hon William

          Shaw, Sir Michael (Scarb')

          Walden, George

          Shelton, William (Streatham)

          Walker, Bill (T'side N)

          Shepherd, Colin (Hereford)

          Waller, Gary

          Shepherd, Richard (Aldridge)

          Ward, John

          Shersby, Michael

          Wardle, C. (Bexhill)

          Silvester, Fred

          Warren, Kenneth

          Skeet, Sir Trevor

          Watson, John

          Smith, Tim (Beaconsfield)

          Watts, John

          Speed, Keith

          Wells, Bowen (Hertford)

          Speller, Tony

          Wells, Sir John (Maidstone)

          Spencer, Derek

          Wheeler, John

          Spicer, Jim (Dorset W)

          Whitfield, John

          Spicer, Michael (S Worcs)

          Whitney, Raymond

          Squire, Robin

          Wiggin, Jerry

          Stanbrook, Ivor

          Wolfson, Mark

          Stanley, Rt Hon John

          Wood, Timothy

          Steen, Anthony

          Woodcock, Michael

          Stern, Michael

          Yeo, Tim

          Stevens, Lewis (Nuneaton)

          Young, Sir George (Acton)

          Stewart, Allan (Eastwood)

          Stewart, Andrew (Sherwood)

          Tellers for the Ayes:

          Stewart, Ian (Hertf'dshire N)

          Mr. Francis Maude and

          Stradling Thomas, Sir John

          Mr. David Lightbown.

          Taylor, John (Solihull)

          NOES

          Adams, Allen (Paisley N)

          Corbett, Robin

          Alton, David

          Corbyn, Jeremy

          Anderson, Donald

          Craigen, J. M.

          Archer, Rt Hon Peter

          Crowther, Stan

          Ashley, Rt Hon Jack

          Cunliffe, Lawrence

          Atkinson, N. (Tottenham)

          Cunningham, Dr John

          Bagier, Gordon A. T.

          Davies, Ronald (Caerphilly)

          Banks, Tony (Newham NW)

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

          Barron, Kevin

          Deakins, Eric

          Beckett, Mrs Margaret

          Dewar, Donald

          Bell, Stuart

          Oixon, Donald

          Benn, Rt Hon Tony

          Dobson, Frank

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

          Dormand, Jack

          Bermingham, Gerald

          Dubs, Alfred

          Bidwell, Sydney

          Dunwoody, Hon Mrs G.

          Blair, Anthony

          Eadie, Alex

          Boyes, Roland

          Eastham, Ken

          Bray, Dr Jeremy

          Evans, John (St. Helens N)

          Brown, Gordon (D'f'mline E)

          Fatchett, Derek

          Brown, Hugh D. (Provan)

          Faulds, Andrew

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

          Field, Frank (Birkenhead)

          Buchan, Norman

          Fields, T. (L'pool Broad Gn)

          Caborn, Richard

          Fisher, Mark

          Callaghan, Jim (Heyw'd & M)

          Flannery, Martin

          Campbell-Savours, Dale

          Foot, Rt Hon Michael

          Canavan, Dennis

          Forrester, John

          Carter-Jones, Lewis

          Foster, Derek

          Clark, Dr David (S Shields)

          Foulkes, George

          Clarke, Thomas

          Fraser, J. (Norwood)

          Clay, Robert

          Freud, Clement

          Clelland, David Gordon

          George, Bruce

          Clwyd, Mrs Ann

          Gilbert, Rt Hon Dr John

          Cocks, Rt Hon M. (Bristol S)

          Godman, Dr Norman

          Cohen, Harry

          Golding, Mrs Llin

          Conlan, Bernard

          Gould, Bryan

          Cook, Frank (Stockton North)

          Hamilton, James (M'well N)

          Cook, Robin F. (Livingston)

          Hamilton, W. W. (Fife Central)

          154

          Hancock, Michael

          Pendry, Tom

          Harrison, Rt Hon Walter

          Pike, Peter

          Heffer, Eric S.

          Prescott, John

          Hogg, N. (C'nauld & Kilsyth)

          Radice, Giles

          Holland, Stuart (Vauxhall)

          Randall, Stuart

          Home Robertson, John

          Raynsford, Nick

          Howarth, George (Knowsley, N)

          Redmond, Martin

          Hoyle, Douglas

          Rees, Rt Hon M. (Leeds S)

          Hughes, Robert (Aberdeen N)

          Richardson, Ms Jo

          Hughes, Roy (Newport East)

          Roberts, Allan (Bootle)

          Hughes, Sean (Knowsley S)

          Roberts, Ernest (Hackney N)

          Hughes, Simon (Southwark)

          Robertson, George

          Janner, Hon Greville

          Rooker, J. W.

          John, Brynmor

          Ross, Ernest (Dundee W)

          Jones, Barry (Alyn & Deeside)

          Rowlands, Ted

          Kaufman, Rt Hon Gerald

          Sedgemore, Brian

          Lambie, David

          Sheerman, Barry

          Lamond, James

          Sheldon, Rt Hon R.

          Leadbitter, Ted

          Shore, Rt Hon Peter

          Leighton, Ronald

          Short, Ms Clare (Ladywood)

          Lewis, Terence (Worsley)

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

          Litherland, Robert

          Silkin, Rt Hon J.

          Lloyd, Tony (Stretford)

          Skinner, Dennis

          Lofthouse, Geoffrey

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

          Loyden, Edward

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

          McCartney, Hugh

          Snape, Peter

          McDonald, Dr Oonagh

          Soley, Clive

          McKay, Allen (Penistone)

          Spearing, Nigel

          McNamara, Kevin

          Stott, Roger

          McWilliam, John

          Straw, Jack

          Madden, Max

          Thomas, Dafydd (Merioneth)

          Marshall, David (Shettleston)

          Thomas, Dr R. (Carmarthen)

          Martin, Michael

          Thompson, J. (Wansbeck)

          Maxton, John

          Thorne, Stan (Preston)

          Maynard, Miss Joan

          Tinn, James

          Meacher, Michael

          Warden, Gareth (Gower)

          Meadowcroft, Michael

          Wareing, Robert

          Michie, William

          Weetch, Ken

          Millan, Rt Hon Bruce

          Welsh, Michael

          Mitchell, Austin (G't Grimsby)

          White, James

          Morris, Rt Hon A. (W'shawe)

          Williams, Rt Hon A.

          Morris, Rt Hon J. (Aberavon)

          Winnick, David

          Nellist, David

          Young, David (Bolton SE)

          Oakes, Rt Hon Gordon

          O'Brien, William

          Tellers for the Noes:

          O'Neill, Martin

          Mr. Frank Haynes and

          Park, George

          Mr. Ray Powell.

          Patchett, Terry

          Question accordingly agreed to.
          Bill read the Third time, and passed.

          BUSINESS OF THE HOUSE
          Motion made, and Question proposed,
          That, at the sitting on Tuesday 27th January, Mr. Speaker shall put any Questions necessary to dispose of the Motion in the name of the Prime Minister relating to Mr. Speaker's decision of 22nd January and of any Amendments thereto which have been selected by him and which may then be moved at Seven o'clock, or not later than three hours after the Motion has been entered upon, whichever is the later.—[Mr. Neubert.]
          Hon. Members: Object.
          Mr. Deputy Speaker (Mr. Ernest Armstrong): Objection taken.

        STATUTORY INSTRUMENTS, &c.
        Motion made, and Question put forthwith, pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments &c.)
        URBAN DEVELOPMENT
        That the Trafford Park Development Corporation (Area and Constitution) Order 1986, dated 8th December 1986, a copy of which was laid before this House on 15th December, be approved.

        TOWN AND COUNTRY PLANNING
        That the draft Town and Country Planning (Fees for Applications and Deemed Applications) (Amendment) Regulations 1986, which were laid before this House on 10th December, be approved.—[Mr. Neubert.]
        Question agreed to.

Forestry (Scotland)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
12.16 am
Mr. Michael Forsyth: I am grateful for the opportunity to raise the question of afforestation in Scotland. Some 90 per cent. of forestry activity in the whole of the United Kingdom takes place in Scotland, and an increasingly rapid scale. During the past 10 years alone, an additional 750 sq miles of trees have been planted in Scotland, of which almost 99 per cent. have consisted of sitka spruce and lodgepole pine, which are conifers not native to Scotland. Indeed, in some parts of Scotland, such as the world famous—I hesitate to say this, but it is true —flow country, more than one third is under forestry ownership.
In Scotland, unlike in England, there is no protection of environmental interests arising from the national parks. The environmental damage has been pointed out by the Nature Conservancy Council, the Royal Society for the Protection of Birds and the Countryside Commission, all of which have expressed concern at blanket afforestation.
There is also widespread concern among the fishing interests—for example, about the damage to salmon beds, which may interest my hon. Friend the Minister, and the damage caused through the increased acidification of ground water.
However, the nub of the argument is that ecologically important wild land is being destroyed. If the environmental argument was all that it was necessary to consider, that would be sufficient in itself. However, the National Audit Office studied the issue and has produced a report, which was presented to the House on 4 December.
Mr. John Home Robertson: It is a very good report.
Mr. Forsyth: I agree with the hon. Gentleman. The NAO commissioned Peider to consider the economic effects of forestry and to review the impact of afforestation —the first major review for some time. It made some startling conclusions. First, it strongly questioned the value of planting trees on poor land. It also questioned the value of planting trees for externalities—the social costs, whether there is a benefit to rural employment, whether there is a balance of payments argument, whether there is a strategic benefit, and so on. I should be surprised if my hon. Friend the Minister rehearsed any of those arguments in the light of the conclusions in the report.
The report also concludes that afforestation would be of greater worth to the nation if it were carried out on better land. That is hardly surprising, and it is worth explaining exactly what is happening in Scotland. Land is bought at £100 an acre by a private forestry company on behalf of an individual who is paying tax at 60 per cent. He pays the company fees of about £400 a year to cover the management for the first six years. He receives a grant of £100 an acre. The £300 net is set against tax, which means a net cost to the investor of £120. After 10 years the crop is sold to the institutions, which now own half of the forestry land in Scotland. Capital gains tax has to be paid only on the land, not on the trees. Taxable income has been converted into untaxed capital. In the flow country, the cost of afforestation is about £1,100 per hectare. A

157
grant of £240 per hectare is available, and 60 per cent. of the remaining costs are covered by schedule D. In the flow country alone, the public subsidy has been 68 per cent. of the total sum invested, amounting to £12·2 million.
Mountain forestry has about 40 staff. The employment losses in other activities are not known, but the cost to public funds is about £305,000 per job. My hon. Friend the Minister will doubtless argue that the jobs will last for a period. If we are to be charitable and say that they will last for five years, that is still a cost of £61,000 per job. On the figures of the Highland board, which is hardly the most frugal of spenders, the costs are £2,000 to £6,000 per job. That means that we are talking of a cost per job that is 10 times that which applies to the most costly jobs to be created by the Highland board. Even with the next generation of bulk tree planting, there will be a further subsidy paid by the taxpayer of £11,000 per job. It is hardly surprising that the National Audit Offices report concluded that it was unclear whether the Exchequer costs of tax incentives estimated at £10 million a year in grants to private forestry
"were matched by commensurate economic benefits in national economic terms."
If the system were merely wasteful and did not damage the environment, it might be worthy of consideration, but, because tax relief is given regardless of where the trees are planted, investors look for cheap land. That is the only part of the transaction on which they do not have a tax shelter. This means that they look for the most environmentally sensitive, most remote and wildest country in Scotland, and the least productive in terms of tree planting. There are few farmers, certainly in my constituency, who pay tax at 60 per cent., yet the subsidy to encourage the planting of trees is available only to higher rate taxpayers. The effect is to exclude farmers and local people from the business of planting trees and to bring in a new generation and class of absentee landlords, consisting of pop stars, snooker players and others who are anxious to convert high marginal tax income into a tax-free capital gain.
The scheme means that the forestry companies, which make their money on the management charges in the first six years, are interested only in the first few years of the plantation's life. They are not interested in long-term management because the plantations are sold off to the institutions. Permission to plant merely involves agreement to provide a grant. Tax relief is given for planting whether or not it has been approved by the Forestry Commission. Investors can plant in areas against the wishes of the community and with the strong disapproval of the commission, and all they sacrifice is the planting grant. They still get the tax relief. That is why a number of owners have gone ahead, to considerable public consternation.
The grant of £100 per acre is payable regardless of the size of the plantation. This creates an enormous incentive to produce blanket afforestation. The fact that the tax device depends on the institutions buying after 10 years or so from the initial investor means that there is a tendency to produce large plantations, because the institutions wish to deal in large parcels with a value of about £250,000. There is an urgent need for control of this activity and some sort of strategy to ensure that the right trees are planted in the right places. It is wholly disingenuous for the forestry companies and others who have strong interests in these matters to try to represent those of us
158
who are concerned about what is happening as being anti trees. On the contrary, we want trees to be planted where they will do best. We do not believe that the system should be operated in the interests of a tax shelter.
The regional advisory committees, responsible for making recommendations, should consist of wider interests. At the moment they are dominated by the forestry interests. The tax relief that is available should be conditional on approval. The Minister should review whether tax relief is an appropriate mechanism by which to subsidise tree planting and that when tax subsidies are provided they are justified. The National Audit Office report suggests otherwise.
No doubt the Minister will have considered the arguments about job creation advanced by the forestry companies. As regards job creation, one should consider tourism, which is the major creator of employment in Scotland at the present time. The Forestry Commission employs almost the same number of employees as it did in 1935—3,000 square miles of plantation later. My hon. Friend the Minister and his colleagues in the Scottish Office scored a notable victory this week with the news that a new paper mill is to be established at Irvine.
The import substitution argument has a long way to go. Private forestry companies tell us that we are importing £4 billion worth of timber and that we need to grow our own to avoid such imports. They do not tell us that two thirds of those imports are in finished products—chipboard and paper. They do not tell us that the tropical growth rate of trees is five times quicker than it is in Scotland. They do not tell us about the impact of imports from the developing countries.
The Minister may grumble, but perhaps I should read these words:
"It is by no means clear that import saving has any special merit. Participation in international trade gives the opportunity for a country to achieve an overall higher level of economic welfare by allowing production resources to he concentrated in activities to which the country is best suited. The resulting output can then be traded for goods which can be produced more cheaply in other countries."
Is that a quotation from Adam Smith or some Right-wing economist? It is a quotation from the Forestry Commission published in "Wood Production Outlook 1977." I agree with the Forestry Commission, but it is strange that it does not heed its own advice.
One of my constituents announced to the local press that hill farming had had its day and that trees were the answer to the problems of the rural areas. If this present system is allowed to continue, hill farming will have had its day. Hill farmers will be forced out of business. They will sell out because of the inflated land values that result from the capitalised benefit of the subsidies.
When the Minister replies, I hope he will give some figures. What is the difference in cost to the taxpayer between traditional hill farming and forestry? I understand —no doubt my hon. Friend the Member for Dumfries (Sir H. Monro) will correct me if I am wrong—that land that would support 200 ewes over six years would get a total subsidy of £14,400. I understand that that is broadly equivalent to 500 acres of the type of land used for forestry, and that same ground would receive a public subsidy of £140,000 over six years—10 tiimes as much. I know that there are problems of overproduction, but they are greatest in the lowlands, in the more fertile areas. If we

159
are concerned about that, we should be planting trees there, saving far more, and leaving the hill farmers and the traditional patterns of Scotland as they are.
Mr. Home Robertson: Surprisingly, I agree with practically everything that the hon. Gentleman is saying, and it applies in my constituency. I strongly agree that there is a case for reviewing the tax incentives that are being used. Is there not a case for some kind of planning controls to prevent undesirable planting, such as that about which he has been talking.
Mr. Forsyth: I am grateful to the hon. Gentleman for his support. I am concerned about what is happening in my constituency, and that must be evident from the fact of this debate. I find it difficult to imagine that Stirling district council coming on the scene would improve matters, and I am not certain that the planning process is the right way to deal with this matter. It does not cope with the nub of the problem—the system of subsidies and grants, which is driving planting and production into the wrong areas. The matter needs a far more radical overlook than the hon. Gentleman has suggested.
Each generation is simply the trustee for the next. We in Scotland have a comparative advantage in our uplands in one thing—the marvellous native scenery, with its opportunities for tourism and sporting and leisure activities. It would be perverse for this Government, of all Governments, aided by our financial institutions, to subsidise their destruction.
12.31 am
Sir Hector Monro: I am glad that my hon. Friend the Member for Stirling (Mr. Forsyth) has had the chance to raise the subject of forestry in this short debate, because, despite the need for one, we have not had a major debate on forestry for a long time. This need is made more apparent by the many excellent reports that we have had in the past 12 months, from the Forestry Industry Committee of Great Britain, the National Audit Office, the Nature Conservancy Council, the Countryside Commission, the Foresty Commission, the new Verney report for the Country Landowners Association and that from the Royal Society for the Protection of Birds. All are asking important questions, and all are worthy of a major debate. I hope that we shall have one soon. They all want to know where we are going in forestry.
My hon. Friend has raised the issue of import saving and we need to ask whether it is more economic. Are we producing more jobs through the Forestry Commission or through private forestry? In my part of the world, the most afforested region in Britain, I doubt whether we have as many jobs in the forests as we used to have when the same ground was in agriculture. Would the cash flow from the new idea of substitution of agriculture by planting trees be effective in the long run were a tax incentive not an important point to the average farmer?
I wish to highlight the point made by my hon. Friend about the environment. I am a member of the NCC and we are concerned about the planting of sites of special scientific interest. The examples of the Caithness flows, and of Islay, which my hon. Friend mentioned, are important. Can we afford the management agreements that are necessary to conserve these sensitive areas from afforestation? I support what my hon. Friend said about
160
tourism and the scenic beauty of Scotland. The more that I drive about Scotland, the more infuriated I get at seeing some of our more beautiful areas becoming a blanket of foresty. This will be to the detriment of the tourist trade that we require in the years ahead.
I support the many private forests that have been planted on existing estates. I am more concerned about the major planting by private forestry groups that my hon. Friend mentioned. Unless we look carefully at where planting should take place, my hon. Friend will be only too right about the problems that will occur now that the controls that we used to have through grants are a failure, and the private forestry groups can go ahead without grants and still receive sufficient income through tax relief. Clearly we must look at that in future if we are to get the right planting of the right trees in the right place. We need broadleaf planting as well as the conifers that are presently being planted. I share the view of my hon. Friend the Member for Stirling that we should have a major debate on forestry to enable us to look at all these issues. I hope that the Minister will tell us that he will pass our views to the Leader of the House.
12.35 am
The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): I have listened with interest to my hon. Friends the Members for Stirling (Mr. Forsyth) and for Dumfries (Sir H. Monro). It will come as no surprise to my hon. Friend the Member for Stirling when I say that I do not entirely agree with everything that he said. I find it difficult to reconcile some of my hon. Friend's comments and his pessimistic assessment of the worth of forestry, with the stimulating news that came only days ago that the internationally renowned Kymmene-Stromberg corporation of Finland, better known at Kaukas, has decided to go ahead with the building of a new pulp and paper mill at Irvine in Ayrshire.
That mill is a £200 million-plus project. It is a major addition to Scotland's industrial base and to the nation's forest products industry. Indeed, it is the largest ever single inward investment to Scotland. In full production, the mill will use 200,000 tonnes per year of Scottish timber. That timber will come from trees planted many years ago by people who had faith in forestry and in the jobs which would one day be realised. The timber may be spruce. I know that some people criticise spruce and, if I have time, I will come back to that. As hon. Members know, that species is grown extensively precisely because it meets the need of the market.
About 1,000 jobs will be created or protected by this development in Irvine, many of them in areas suffering at present from high unemployment. The jobs will not just be in Irvine but, I suspect, in constituencies like those of my hon. Friends and certainly in constituencies like mine where I expect to see jobs in the forests and in the haulage industry as a result of this project coming to Irvine.
This mill is part of an ever-increasing payoff of the policy of forest expansion, a policy that has consistently been supported by successive Governments, but with notable success by the present Government. The decision to invest in the mill was taken by hard-headed business men who looked in depth at the forest industry in Britain. I compliment the Forestry Commission on the work that it has done to get this project to Scotland. The leading parts were played by my right hon. and learned Friend the

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Secretary of State for Scotland, the Parliamentary Under-Secretary of State for Scotland, my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Lang), and my hon. Friend the Member for Eastwood (Mr. Stewart) when he was Industry Minister at the Scottish Office.
Mr. Forsyth: Does my hon. Friend agree that if the timber was planted in the lowlands rather than in the uplands the quality available to the pulp mill would be considerably better?
Mr. MacKay: I shall deal with that in a moment. My hon. Friend the Member for Stirling tended to suggest in his speech and has just said in his intervention that afforestation is taking place on the wrong land. I heard criticism that the timber is of the wrong species, that the planting is being carried out by the wrong people and, in any case, it is a waste of public money.
To a certain extent much of the campaign against forestry has come about in recent months because of problems in an area known as the flow country in the north of Scotland. My hon. Friend the Member for Dumfries spoke about that. This controversy arises from a fear that much of this extraordinarily large area is about to disapper under a blanket of conifers planted in a totally uncontrolled way. No planting there has taken place without being carefully considered and cleared through the consultation procedures of the Forestry Commission. Only about 17 per cent. of the area has been planted or has been given approval for planting. On the other hand, large parts of the area have already been designated as sites of special scientific interest with more designations to come, and, with much of the land unsuitable or unavailable for forestry, the scope for further planting is limited. There is, therefore, no question of most of this area being covered by forests.
Because of the concern expressed by conservation interests, my right hon. and learned Friend the Secretary of State for Scotland has set up a working group, including the Nature Conservancy Council to look at future land use patterns in this area with the aim of identifying a reasonable balance between forestry, conservation and other land uses. Conservation interests need to define their requirements and develop with other land use interests the best strategy to meet conservation and social and economic needs. This process will be greatly assisted by a major research project being undertaken by the Royal Society for the Protection of Birds into the effect of existing plantations on bird habitats. This project is being funded by the Forestry Commission and Fountain forestry, the company that is carrying out much of the planting in the area. I read with interest that the hon. Member for Caithness and Sutherland (Mr. Maclennan) opened the local office of Fountain Forestry in Laid at the end of last week.
I understand the need for forestry planting to think not just about the birds and the butterflies but about the view. Nobody appreciates the value of tourism more than I do, representing as 1 do an area that accounts for one tenth of the total bed nights passed in Scotland. The tourists like the forests. They provide nice walks and a nice habitat. As the forests mature they will improve. For a variety of reasons we are seeing forests that are very much all one age. If one goes to some of the continental countries and looks at forests such as those in Finland and the Black
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forest in Germany, not that I have ever been there but I am sure it is similar, one sees a range of things. I am amazed that the conservationists are all in favour of the Black forest in Germany but do not seem keen that we should create forests of a similar type in Britain.
The Forestry Commission has a statutory duty to seek a reasonable balance between the needs of forestry and the environment. It has updated its conservation policy to stress the need to increase the environmental value of its whole estate. It has drawn up conservation plans for each of its forests, set up local consultative panels involving the voluntary bodies to seek advice on the environmental aspects of managing those forests and shown its willingness to make conservation a major feature of its management.
The private sector has not been slow to respond. In November 1985 Timber Growers United Kingdom published its booklet, "Forestry and Woodland Code", designed to encourage the highest standards—including environmental standards—in forest design and management.
Part of my hon. Friend the Member for Stirling's case against forestry is the assertion that much of the poor quality and insensitive forestry is a direct result of the present forestry tax relief. The fiscal arrangements for private sector planting do not determine the type of planting that takes place. That is influenced by practical forestry considerations such as the availability of land and its price and the future needs of the market place. The deicions reached on planting proposals under the commission's consultation procedure are not affected by the financial standing or the tax position of the owner of the land.
As my hon. Friend pointed out, there have been two cases where planting has gone on when the commission refused to give grants. As I have said many times from the Dispatch Box, we do not like that but it is only two cases among innumerable cases of forestry planting applications over the years. We should not be so obsessed with those two cases that we try to devise an enormous system to prevent such things happening. If the incidence was to increase, as I have always made clear, we would then look at it. However, two cases against the number of forestry grant applications we have had over the years, does not justify setting up considerable procedures other than those already in operation.
My hon. Friend referred to the National Audit Office report. He will not be surprised when I say that taxation matters are primarily the concern of my right hon. Friend the Chancellor of the Exchequer, and the NAO report will be considered by the Public Accounts Committee of the House. The House will appreciate therefore, that I am not in a position to offer a specific response to the points raised in the report, but tax reliefs for forestry have a very long history, and have been seen by successive Governments as a legitimate and effective means of encouraging investment in forestry. Anyone investing in forestry has a long time to wait to get his return, and that investment will simply not take place without the right incentives.
What the report has to say about the low economic returns from investing in the planting of poorer land is not new. That has always been recognised. But forestry has been deliberately confined, by successive Government policies, to the relatively poor and inhospitable sites in the uplands, because of the overriding priorities accorded to food production and by reason of the contribution that

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forestry can make to socially fragile areas. As my hon. Friend said the situation is changing as a result of the problem of agricultural surpluses. The establishment of forestry on better quality land will provide a promising alternative use, and the NAO report indicates that on better land there are opportunities for achieving financial rates of return significantly higher than 5 per cent. The argument for sitka spruce will still be there because it grows well in our climate and it is what the market wants. That is what the new plant at Irvine will want. It does not want any other species.
In return for the public investment in forestry we have a productive estate of about 2 million hectares that
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provides enough timber to meet 12 per cent. of our needs and which will meet 20 per cent. by the turn of the century. That is significant. Downstream, we have seen about £500 million of private investment going into the timber-using industries since 1980. We have created a modern timber industry that currently provides or supports some 40,000 jobs in Britain and more than 12,000 jobs in Scotland. That is important for the rural areas and it is important for the places that the timber using industries set up.
The Question having been proposed after Ten o'clock on Monday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at fourteen minutes to One o'clock.