§ Mr. Graham Riddick (Colne Valley)I beg to move amendment No. 116, in page 53, line 17, at end insert—
'() This section shall cease to have effect upon such day as the Secretary of State may appoint by order made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.
Mr. Deputy SpeakerWith this it will be convenient to take amendment No. 117, in clause 149, page 86, line 28, at end insert—
'() This section shall cease to have effect upon such day as the Secretary of State may appoint by order made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.
§ Mr. RiddickHon. Members will not be surprised that I have tabled these two amendments, because I expressed some concern about clause 90 on Second Reading.
Clause 90 allows local authorities to carry out reinstatement work for the utility companies. I have discussed with some of my hon. Friends the desirability of dropping clause 90, but they pointed out that there would be certain practical difficulties with that and they felt that there should, at the very least, be a transitional period. I accept and hope that my amendments reflect those concerns. They would give the Secretaries of State for Transport and for Scotland the power to bring an order before Parliament ending the right of local authorities to carry out street works on behalf of the utility companies.
The Government are encouraging the trend that local authorities should be enabling rather than providing authorities. The Bill follows that pattern and effectively puts the onus on the utility companies to carry out reinstatement work, while turning the local highways department into enabling or, indeed, regulatory authorities. That is fine and I support that approach.
However, clause 90 then allows local authorities to tender for that same reinstatement work. A potential conflict of interest is immediately created. It is possible that less scrupulous local authorities will abuse that regulatory role, so as to encourage the utilities to give the work to their direct labour organisations. I smelt a rat on Second Reading when the hon. Member for West Bromwich, East (Mr. Snape) congratulated the Government on including clause 90 in the Bill. It is not really surprising that Labour supports it, as it believes in public rather than private enterprise and in maintaining the power and employment of the members of the National Union of Public Employees within DLOs.
Having seen how some local authorities have gone out of their way to undermine competitive tendering in a number of fields to keep those functions in house, I fear that some of those authorities will abuse their new powers and will perhaps distort costings to submit artificially low tenders for reinstatement work under these arrangements simply to keep their DLOs in existence, to the disadvantage of local charge payers. The proof of that is already there for people to see. My local council, Kirklees, like many others, insists that it should carry out permanent reinstatement work on street works, as it is allowed to do under the Public Utilities Street Works Act 1950, despite the fact that experience suggests that it is not wholly competent to do it. Potholes in Kirklees roads are proof of that, as is the fact that nearly £4 million remains unclaimed from the utilities for permanent reinstatement work, which the council should have carried out in the past four years but has failed to carry out.
By all means let the DLOs tender for reinstatement work, but let it be from the private sector, where they have to compete fairly and freely, without hidden subsidy.
I hope that my hon. Friends will accept my two amendments this evening and I suggest that it would be 1011 sensible to lay out a clear timetable for the transition to the new arrangements and to state that those powers will be exercised, perhaps around the end of 1992.
I know that we want to make rapid progress with the Bill, and so I shall end my comments there. I hope that the Government will accept the amendments and I urge all my hon. Friends to support them.
§ Ms. RuddockThe hon. Member for Colne Valley (Mr. Riddick) says that the House will not be surprised that he has tabled the amendments. I am extremely surprised. I remember the hon. Gentleman's Second Reading speech well, but, as he has consulted Ministers, it seems to me quite extraordinary that he should still table the amendments; they are quite unnecessary. It seems to me that he has tabled them simply to provide another opportunity to attack the local authority covering his constituency and the local authority workers.
I wonder whether the hon. Member for Colne Valley is aware of what he is saying when he suggests that Kirklees council is not entirely competent to do reinstatement work. When he spoke on Second Reading he called British Gas in support of his speech. He talked about the fact that British Gas had problems with Kirklees council. I have information to the effect that Kirklees council has recently agreed a trial with British Gas in which Kirklees council will do British Gas reinstatements. If that trial is successful, Kirk lees is likely to be asked to do that work on a permanent basis and that is in the light of this Bill's passage through the House.
§ Mr. RiddickI am interested to hear what the hon. Lady has to say. All I know is that British Gas has a large sum of money held in an account waiting to be paid to Kirklees council, because the council has failed to carry out permanent reinstatement work, which it insists that it should do. We are not talking about a small amount of money—it is more than £1 million. I have talked to British Gas and I would be absolutely amazed if it puts its reinstatement work in the hands of Kirklees council. I am not suggesting that the DLO workers in Kirklees are not competent to do the work. If the hon. Lady had listened to my speech she would have heard me say that if they want to tender for the work that is fine, but they should do so from the private sector, and then there would be truly free and fair competition.
§ Mr. RuddockI fear that there is not an ounce of logic in what the hon. Gentleman has said. Clearly, British Gas—a private company—has experience of local government workers' reinstating holes, and it seems to have confidence in them. The hon. Gentleman should take the matter up with British Gas. Discussions appear to be in progress about using a local authority to do the work in the way envisaged in clause 90.
§ Mr. RiddickWhen I tried to intervene on the hon. Lady on Second Reading she would not give way, although her speech ended two minutes before it need have done. Let me now ask the question that I wanted to ask then: will she urge the Kirklees councillors who oppose the Bill to accept its provisions?
§ Ms. RuddockThe hon. Gentleman is straying very far from the point. The Bill is making progress; there is consensus between Opposition and Government. As I have said, we understand that Kirklees council is negotiating the possibility of carrying out such works as 1012 are envisaged in clause 90. The hon. Gentleman seems to have some ideological problem with the concept of public sector workers tendering for work. If he wants more public sector workers in his constituency to be unemployed, he should address that problem; certainly his electors will do so in due course.
Clause 90 was introduced by the Government in another place. It was amended slightly on Report: its scope was extended to cover district councils as well as street authorities. We understand that the Government intended to clarify the position of local authorities in regard to the undertaking of work for utilities. As such, that was an extremely modest amendment whose aim was simply to make it clear that there was no legal impediment to a utility's inviting an authority to tender for a contract to carry out work on behalf of that utility. How could such moderation cause such offence?
Clause 90 does not give local authorities the right to demand the ability to carry out a utility's work; it does not give them the right to demand to be included on that utility's tender list. In fact, it gives local authorities no new powers at all. It simply makes it clear that, if a utility wishes to employ a local authority to undertake work for it, it may do so.
The Horne report, on which this part of the Bill is based, identified weaknesses and poor performance on the part of both highway authorities and utilities. There is no dispute about that. The Bill and the consensus surrounding it are directed towards a dramatic improvement in street works nationwide.
A utility that was dissatisfied with a local authority's past performance would surely be highly unlikely to invite that authority to tender for its necessary works. The standard to be met will be exactly the same whether the work force is that of the utility, the local authority or any other contractor, private or public. No privilege will accrue to local authorities as a consequence of clause 90.
The amendment would enable the Secretary of State to set a date, by order, after which clause 90 would not apply. It is difficult to see the reasoning behind it. The clause will be relevant only for such time as utilities consider it helpful to them to be able to arrange for work to be undertaken by a local authority. If no utility makes such an arrangement, the clause will be irrelevant.
Surely it is best left to individual utilities, rather than the Secretary of State, to determine whether arrangements should be made with local authorities. Why should the Secretary of State seek to block such arrangements if utilities find that they represent an efficient, economic and effective means of meeting their responsibilities under the Bill?
It is important to bear in mind the extent to which this part of the Bill represents a package, with pluses and minuses for both local authorities and the utilities. Both sides have accepted that package as a whole, and are obviously keen to see its early implementation. For the local authority associations, clause 90 represents an integral part of the package. Its amendment in the way proposed would seriously undermine highway authorities' confidence in the package, at a time when their commitment is essential. The legislation provides the bones of a new system, but the flesh will be provided by co-operation between the utilities, the highway authorities and the Department. The Minister for Public Transport has played a central role in holding those three groups 1013 together during the passage of the Bill. Trust and confidence are vital ingredients, which I believe the amendment would wholly destroy.
We hope that the Minister will resist the amendment, which is opposed not only by us but by the local authority associations and the utilities. It is entirely unnecessary and its acceptance would send an unhelpful signal to highway authorities at a time when their commitment to the new street works regime is essential to the securing of its speedy and successful implementation. I hope that, at this late stage, the Minister will not accept such a destructive amendment.
§ Mr. Simon CoombsI support the amendment, but not for the reasons advanced by my hon. Friend the Member for Colne Valley (Mr. Riddick)—or, indeed, for the reasons attributed to him by the hon. Member for Lewisham, Deptford (Ms. Ruddock).
If clause 90 is not amended, I believe that a problem may arise for local authorities—not, perhaps, a legal problem, but a practical one none the less. Let us suppose that an undertaking sub-contracted works of reinstatement or repair to a direct labour organisation within the local authority. If that authority were at the same time the street authority, it might find itself having to take action against the undertaking for non-performance of the contract that it had sub-contracted to its own direct labour organisation.
That strikes me as an extremely unfortunate position; indeed, an almost impossible position, notwithstanding the provision in clause 90(3) that
Nothing in this section shall be construed as derogating from any powers exercisable by the authority or council apart from this section.The local authority would, of course, be expected to act properly in every respect, but it would be asking a great deal of any authority to expect it, when its own DLO had failed to deliver on a sub-contract, to embark on action that would inevitably involve the possibility of that DLO's being harshly punished.Surely it would be better for all the parties concerned—especially, dare I say, the road user—for us to pass the amendments, and thereby avoid the risk that I have described. I hope that, if my hon. Friend the Minister shares my fear, he will accept them.
§ Mr. ChopeMy hon. Friend the Member for Colne Valley (Mr. Riddick) referred to the clause on Second Reading, and I said then that I expected to be able to return to the subject in Committee. I recognised that clause 90 was effectively an exemption in regard to the principle contained in the local authority goods and services legislation, and emphasised that there was therefore a strong onus on its supporters to show that it was necessary.
Having considered clause 90 further, I think that it is necessary in order to facilitate an orderly transition from a regime in which local authority direct services organisations carry out almost all reinstatement work to a regime in which they will not do any. The power for local authorities to carry out private sector work should not be necessary beyond a point of transition.
My hon. Friend the Member for Colne Valley has cleverly drafted an amendment that will enable the Government, after necessary consultation with the utilities 1014 and the local authorities, to say "We are now bringing this regime to an end and we shall carry on with the normal principles that apply", which, as the hon. Member for Lewisham, Deptford (Ms. Ruddock) knows, are that local authorities do not tender or carry out work for the private sector.
8.30 pm
Things have moved on much since the Home report, because now all utilities are in the private sector. The principle is whether it is right that local authority DSOs should carry out work for private sector organisations, or whether it should more properly be done in the private sector.
I very much agree with my hon. Friend the Member for Colne Valley about the principle that local authorities should be enablers rather than direct providers of service. That is even more important when local authorities are adopting a regulatory role—a point that was made cogently by my hon. Friend the Member for Swindon (Mr. Coombs).
I hope that the House will accept the amendments, which will make the Bill more flexible. They will enable the Government to introduce regulations to end the right of local authority DSOs to carry out private sector work. For the reasons that I gave, it would not be right to exclude clause 90 from the Bill, which is what my hon. Friend the Member for Colne Valley urged on Second Reading.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 130. Noes 38.
1015| Division No. 152] | [8.31 pm |
| AYES | |
| Adley, Robert | Fishburn, John Dudley |
| Amess, David | Forsyth, Michael (Stirling) |
| Arbuthnot, James | Forth, Eric |
| Ashby, David | Fox, Sir Marcus |
| Baker, Nicholas (Dorset N) | Freeman, Roger |
| Beaumont-Dark, Anthony | Gale, Roger |
| Bellingham, Henry | Garel-Jones, Tristan |
| Bennett, Nicholas (Pembroke) | Goodlad, Alastair |
| Biffen, Rt Hon John | Gorst, John |
| Blackburn, Dr John G. | Greenway, Harry (Ealing N) |
| Blaker, Rt Hon Sir Peter | Greenway, John (Ryedale) |
| Boscawen, Hon Robert | Gregory, Conal |
| Bowden, A. (Brighton K'pto'n) | Hague, William |
| Bowden, Gerald (Dulwich) | Hamilton, Neil (Tatton) |
| Bowis, John | Hannam, John |
| Brandon-Bravo, Martin | Haselhurst, Alan |
| Brazier, Julian | Hawkins, Christopher |
| Brown, Michael (Brigg & Cl't's) | Hayhoe, Rt Hon Sir Barney |
| Bruce, Ian (Dorset South) | Hayward, Robert |
| Buck, Sir Antony | Howarth, G. (Cannock & B'wd) |
| Butterfill, John | Howe, Rt Hon Sir Geoffrey |
| Carrington, Matthew | Howell, Ralph (North Norfolk) |
| Cash, William | Hughes, Robert G. (Harrow W) |
| Chapman, Sydney | Hunt, Sir John (Ravensbourne) |
| Chope, Christopher | Hunter, Andrew |
| Clark, Dr Michael (Rochford) | Irvine, Michael |
| Colvin, Michael | Jack, Michael |
| Conway, Derek | Jackson, Robert |
| Coombs, Simon (Swindon) | Jessel, Toby |
| Cope, Rt Hon John | Jones, Robert B (Herts W) |
| Cran, James | King, Roger (B'ham N'thfield) |
| Currie, Mrs Edwina | King, Rt Hon Tom (Bridgwater) |
| Davies, Q. (Stamf'd & Spald'g) | Kirkhope, Timothy |
| Davis, David (Boothferry) | Knapman, Roger |
| Dorrell, Stephen | Knight, Greg (Derby North) |
| Douglas-Hamilton, Lord James | Knowles, Michael |
| Dover, Den | Knox, David |
| Dykes, Hugh | Lester, Jim (Broxtowe) |
| Fallon, Michael | Lord, Michael |
| Favell, Tony | MacGregor, Rt Hon John |
| Fenner, Dame Peggy | MacKay, Andrew (E Berkshire) |
| Maclean, David | Shaw, David (Dover) |
| Madel, David | Shaw, Sir Giles (Pudsey) |
| Mans, Keith | Shelton, Sir William |
| Marshall, John (Hendon S) | Shephard, Mrs G. (Norfolk SW) |
| Marshall, Sir Michael (Arundel) | Skeet, Sir Trevor |
| Meyer, Sir Anthony | Smith, Tim (Beaconsfield) |
| Miscampbell, Norman | Soames, Hon Nicholas |
| Mitchell, Andrew (Gedling) | Speed, Keith |
| Moss, Malcolm | Stern, Michael |
| Nicholls, Patrick | Stevens, Lewis |
| Nicholson, David (Taunton) | Stewart, Allan (Eastwood) |
| Onslow, Rt Hon Cranley | Stewart, Andy (Sherwood) |
| Oppenheim, Phillip | Summerson, Hugo |
| Page, Richard | Taylor, Ian (Esher) |
| Paice, James | Taylor, John M (Solihull) |
| Portillo, Michael | Thompson, Patrick (Norwich N) |
| Powell, William (Corby) | Trippier, David |
| Price, Sir David | Twinn, Dr Ian |
| Redwood, John | Viggers, Peter |
| Riddick, Graham | Wells, Bowen |
| Ridsdale, Sir Julian | Widdecombe, Ann |
| Rifkind, Rt Hon Malcolm | Winterton, Nicholas |
| Roberts, Sir Wyn (Conwy) | |
| Roe, Mrs Marion | Tellers for the Ayes: |
| Ryder, Rt Hon Richard | Mr. Tim Boswell and Mr. Timothy Wood. |
| Sackville, Hon Tom |
| NOES | |
| Archer, Rt Hon Peter | Meale, Alan |
| Barnes, Harry (Derbyshire NE) | Michie, Bill (Sheffield Heeley) |
| Campbell-Savours, D. N. | Morris, Rt Hon A. (W'shawe) |
| Carlile, Alex (Mont'g) | Mullin, Chris |
| Carr, Michael | Nellist, Dave |
| Clwyd, Mrs Ann | Orme, Rt Hon Stanley |
| Cox, Tom | Quin, Ms Joyce |
| Cryer, Bob | Ruddock, Joan |
| Dalyell, Tam | Sheerman, Barry |
| Dixon, Don | Skinner, Dennis |
| Duffy, A. E. P. | Smyth, Rev Martin (Belfast S) |
| Faulds, Andrew | Spearing, Nigel |
| Fearn, Ronald | Wallace, James |
| Godman, Dr Norman A. | Walley, Joan |
| Hughes, John (Coventry NE) | Wareing, Robert N. |
| Hughes, Roy (Newport E) | Wise, Mrs Audrey |
| Lewis, Terry | Young, David (Bolton SE) |
| Lloyd, Tony (Stretford) | |
| McCartney, Ian | Tellers for the Noes: |
| McKay, Allen (Barnsley West) | Mr. Frank Haynes and |
| McMaster, Gordon | Thomas McAvoy. |
§ Question accordingly agreed to.