HL Deb 19 May 1949 vol 162 cc835-53

3.5 p.m.

Order of the Day read for consideration on Report.

LORD SHEPHERD

My Lords, in moving that the Report on this Bill be received it may be desirable that I should make a short factual statement. This is the first Bill to come before your Lordships' House under Section 6 of the Statutory Orders (Special Procedure) Act, 1945. Apart from the preamble to the Bill, it is indistinguishable from an ordinary Provisional Order Confirmation Bill. The Bill now comes before your Lordships' House on the Report stage—Second Reading and Committee stage having been dispensed with by reason of the fact that the Order which preceded the Bill went before a Joint Committee of the two Houses.

After the Order, which forms the Schedule of the Bill, had been drafted it was the subject of a local inquiry; and, subsequent to that inquiry, the Minister made the Order. Within the time allowed, there appeared a number of Petitions against the Order, and under the Statutory Orders (Special Procedure) Act, 1945, the Order had to be sent to the Joint Committee so that the petitioners might be heard, and the Joint Committee Could give consideration to the points put before them. After the evidence had been received and considered, the Joint Committee made a number of Amendments to the Order. Most of these Amendments have been accepted by the Minister, but two were not accepted by him, and because of that he felt it necessary that the matter should be brought before Parliament by including the Order in a Bill, and thus bringing the Bill in as a public instrument.

The Order provides for a joint water board in Mid-Northamptonshire, comprising eighteen authorities, including the Borough of Northampton. The Order authorises the water board to take out of the Riven Nene up to 20,000,000 gallons of water a day during the winter months; and it was left to the Minister to decide at other times, according to the level of the river, what amount of water should be taken. The Order also provided—and I mention this because it will be the subject of an Amendment later—that the accounts of the joint board should be subject to audit by the district auditor. The Committee considering the Order decided, on representations from the Nene Catchment Board, to take out the name of the Minister as the person to determine the rate of extraction in other than winter months and to substitute in the Order the name of the Nene Catchment Board. The Minister took exception to this, because he thought it was against public policy that power should be given to one local authority to issue a veto against another public authority without that public authority having an opportunity to appeal. Consequently, when this Bill came before another place, the Minister moved an Amendment to restore the position as it was in the original Order, with the result that he again became the person who would decide, when the river was low, the amount of water that had to be taken out of it.

On the other point, under Section 293 of the Local Government Act, 1933, the district audit is applied to joint boards where the joint boards consist of authorities which are themselves largely subject to joint audit. When this point came before the Joint Committee, representations were made by the professional auditors, as a result of which the Order was amended so as to give a choice to the joint boards of having either the district auditor or a professional auditor. Again, the Minister thought that this was a matter of very great principle, in view of the developments of recent years, and therefore he asked the House of Commons to put back the old conditions under which the audit should be carried out by the district auditor. The Bill has now come to this House amended, and although the first stages are not to be observed in your Lordships' House, the Bill, now being a public Bill, is open to amendment. Your Lordships will no doubt have seen that on the Order Paper there are a number of Amendments for your consideration. With that short statement, I beg to move that the Report be now received.

Moved, That the Report be now received.—(Lord Shepherd.)

3.14 p.m.

LORD BELSTEAD

My Lords, as a member of your Lordships' House who had the honour of being the Chairman of this Joint Committee, I should like to say a few words on the extremely fair opening statement which the noble Lord, Lord Shepherd, has made. I had intended to speak upon the second of the two Amendments, and I may yet wish to give your Lordships some information on that. But on the main issue I am hound to admit that under the Statutory Orders (Special Procedure) Act, 1945, the Minister has the right to take the action he has done if he does not approve of the Amendments made in his Order. Therefore, my objection is perhaps a matter of degree rather than of policy.

It seems very unfortunate that the Minister has acted in this way. All your Lordships will be aware, or at any rate will be easily reminded, that the Committees which sit upstairs are not easy to man. The Clerks and the Party Whips of both Parties are well aware of this. It is rather difficult to obtain the continuous attendance which is necessary. The Committee on this Bill took six days of very careful consideration. We had before us four learned counsel and five members of the Junior Bar. Some 2,339 questions were answered, and a large number of speeches were listened to and considered. It seems rather a pity, and not very encouraging to those who serve on these Committees, that, at the will of the Minister, however honestly applied and intended, it should be possible to reverse the decision of a Committee who have had every conceivable detail laid before them, cross-examined, re-examined and dealt with almost, I was going to say, ad nauseam.

There is one other aspect of the matter. It is decidedly hard on the parties, who are often put to considerable expenditure in coming up from a distance to London to attend the Joint Committee day after day, for six days, coming up again over the week-end and then finding afterwards that the whole thing can be reversed at the will of the Minister. I suggest that this is an unfortunate precedent. This is the first Bill under the new procedure, which, to a certain extent, takes the place of the old Private Bill procedure. I do not think it is a very fortunate omen for the examination of Orders under the new procedure. I have nothing more to say on this particular point, but on the second of the two Amendments, on the purely permissive choice of whether a professional or a district auditor should be employed by a corporate body, I should like to be allowed to address a few further remarks to your Lordships.

3.18 p.m.

THE MARQUESS OF READING

My Lords, may I say a word on the main point raised by the noble Lord—namely, the question of procedure? As one who has had some experience of presiding over Committees upstairs, and knows something of the difficulties and something of the responsibilities which fall on noble Lords who form part of these Committees, I think I may say that all those members of your Lordships' House who from time to time are selected to constitute these Committees bring to the deliberations a great deal of care, thought and industry, and that this is one of the more important, although one of the more unobstrusive, functions of your Lordships' House. If this kind of procedure is to be followed in future, it will not be likely that the members who constitute these Committees will either be so ready to give their time to them, or, having given their time, will be inspired to give the same attention to them, because they will feel—and this is the effect of what the Minister is doing—that they are put in nothing more than a sort of advisory capacity, to make recommendations to the Minister which the Minister can adopt or reject according to his will.

Of course, the House itself is always in the position of the overriding authority. When a Committee of the House report to the House they willingly accept the House's decision as to whether what they have decided is right or wrong. That is a very different situation, however, from having to accept an arbitrary decision of the Minister after a Committee of your Lordships' House have given close and detailed attention to an intricate matter. It is very much to be hoped that, if it is in accordance with the new procedure, it will not be a course frequently adopted by any Government Department.

3.21 p.m.

LORD GIFFORD

My Lords, I did not have the honour of sitting with the noble Lord, Lord Belstead, on this particular Committee under discussion, but I did sit with him for no fewer than eight days up till Tuesday last on the Staffordshire Potteries Water Board Bill Committee. I should like to pay tribute to the noble Lord's wisdom, and to his great knowledge of such affairs. Having tried to do my duty on Committees of that kind in your Lordships' House, I should like to say this. Nearly all these Committees are composed of members of all Parties, and I do not think I have ever known any difference of opinion on Party lines in any one of them. Although, with the wealth of detail and information put before one by counsel, it is perhaps difficult to come to a decision at first, at length the way becomes clear, and on every Committee on which I have sat the final view has been unanimous.

Surely the great feature of these Committees is that it enables all the local interests to put their views before Parliament. I understand that inquiries have been made of the Clerk of the Peace of Northamptonshire and the Town Clerk of Northampton in regard to the action of the Minister in this case, and they take a very grave view about it. They feel that if, after hearing fully the Petitions and evidence put forward, an arbitrary reversal is to take place on the instructions of the Minister, the considerable expense which they incur in putting forward their cases before these Committees is wasted. Most of us here are fully experienced in this sort of Committee work, and we feel that it is a good procedure. In this case there is even less ground for the reversal, because the Committee dealing with this Order was one of both Houses of Parliament, and not merely of the House of Lords. I feel that it is very unfortunate, to say the least, that this arbitrary reversal of the Committee's decision should be made by the Minister.

On Question, Motion agreed to.

The Schedule:

7.—

(3) The authorised quantity for the purposes of the said section 10 shall be—

  1. (a) in the case of the said Work No. 1, twenty million gallons in a day of twenty-four hours;
  2. (b) in the case of the 1944 works, four million three hundred thousand gallons in such a day as aforesaid:

Provided that if at any time in the opinion of the Minister and the Minister of Agriculture and Fisheries it shall be necessary having regard to the state of the river to reduce the authorised quantity specified in paragraph (a) of this subsection and the said Minister give notice to the Corporation requiring them not to take by means of the said Work No. 1 any greater quantity of water than the quantity, not being less than sixteen million gallons in such a day as aforesaid, specified in the notice, the Corporation on the receipt of the notice and until in the opinion of the said Ministers it is no longer necessary to maintain a reduction in the authorised quantity shall not take water by means of the said Work No. 1 otherwise than in accordance with the notice.

33.—(1) The accounts of the Board shall at all reasonable times be open to inspection and transcription without payment by any member of a constituent council or the county council, or by any officer of any such council authorised by that council for that purpose and shall be subject to audit by a district auditor.

LORD SHEPHERD

My Lords, one, at any rate, of the Amendments down on the Order Paper to-day will be put into the Bill. That being the case, the Bill will have to go back to the other place, and that will entail a further delay. In order to meet that I have to move this Amendment to substitute July 1 for June 1 as the appointed day. I beg to move.

Amendment moved— Page 4, line 5, leave out ("June") and insert ("July").—(Lord Shepherd.)

EARL DE LA WARR

My Lords, I have no desire to object to this Amendment, but I do not think it would be out of place if I pointed out to your Lordships that the only reason why it is needed is because of the procedure the Ministry of Health have insisted upon adopting. The original date was April 1. That date could have been adhered to if your Lordships had been presented with an Order arising out of the Report of the Joint Committee of both Houses, presided over by the noble Lord, Lord Belstead, instead of having these Amendments forced upon us.

On Question, Amendment agreed to.

3.25 p.m.

EARL DE LA WARR moved to omit the proviso in sub-paragraph (3) of paragraph 7 and to insert: Provided that if, having regard to the state of the river the Catchment Board and the Corporation agree, or in case of dispute it is determined by the Minister and the Minister of Agriculture and Fisheries, that a smaller quantity than that specified in paragraph (a) of this subsection, being a quantity not less than sixteen million gallons, should be substituted for that specified in that paragraph, that smaller quantity shall be so substituted during such period as may be so agreed or in case of dispute so determined.

The noble Earl said: My Lords, the noble Lord, Lord Shepherd, has already assisted your Lordships a great deal by a full and, as the noble Lord, Lord Belstead, has said, very fair statement of what has happened. As your Lordships have been informed, this Order was submitted and it was approved by the Minister. As a result of objections it was referred to a Joint Committee of both Houses of Parliament. As the noble Lord has already said, certain Amendments were inserted, and I think I am right in saying that every one of those Amendments proved subsequently to be satisfactory, not only to the Nene Catchment Board, in whose favour, on the whole, they were (I refer to the first point on the Order Paper), but to all parties concerned. In spite of that, the Minister objected to these two Amendments, and on the Report stage in another place the proposals of the Joint Committee were removed.

It has been made clear from what has already been said that it is generally agreed that the overruling of a Report of a Committee of either House or both Houses of Parliament is an exceedingly grave matter. That is always so, but in this case, which deals with what was originally an Order arising out of the Water Act, 1945, it is made doubly grave by the statement that Mr. Arthur Greenwood made in another place in 1945 on behalf of His Majesty's Government. With your Lordships' permission, I will read part of what he said: I cannot speak for any future Government, least of all for a Government drawn from the opposite Benches, but I can speak for His Majesty's present Government. I do not want to mince my words at all, and I give the most specific assurance that we do not regard this Bill as a weapon with which to beat down opposition or to carry proposals through without due regard to all the interests who ought to be considered. Mr. Greenwood went on to say that he hoped this procedure would be used in such a way as to ensure that only matters that deal with the root of the matter (that is to say, the gravest matters of policy) should be dealt with on the floor of the House, and he further used these words: … whore national policy is involved, or is likely to be imperilled or embarrassed. … Mr. Greenwood used those words in the discussion on the Statutory Orders (Special Procedure) Bill, 1945, in another place, on November l4, 1945. In spite of those words, the Minister has seen fit to make the Amendments.

As the noble Lord, Lord Belstead, has already said, the fact that this is the first Bill arising out of a new form of procedure makes it doubly unfortunate, because, whatever noble Lords speaking on behalf of the Government like to say, a precedent is a precedent, and it is bound to make its lasting mark. It is not going too far to say that this type of procedure defeats the whole intention of what has been laid before Parliament as the appropriate method of dealing with matters of policy such as this. Therefore in my view it would be exceedingly difficult to justify what has been done, even if on balance the merits of a particular question—and for the moment I deal purely with the generalities of the subject—were slightly in favour of a Minister and against the Report of a Committee of either House of Parliament.

What are the merits of this particular case? In the Bill as it stands before your Lordships, it is proposed to give power to the Joint Water Board or, in a particular instance, the Nottingham Corporation, to take 20,000,000 gallons a day from the river Nene. The Nene Catchment Board, as I think your Lordships know, have for many years been considered amongst the best-administered of all catchment boards in this country, presided over by one who is universally respected, certainly throughout the whole agricultural industry, and who, indeed, in his time has been Chairman of the Trades Union Congress. The Nene Catchment Board's objection is that they are responsible for the maintenance of the river, and that there may well be times when to extract so much water from the river may be extremely harmful, both to the river itself and to those interests connected with food production who are dependent upon water for maintaining their livestock and other agricultural activities. Therefore, the Board claim—and they were supported in this claim after very long consideration, as the noble Lord, Lord Belstead, has already told us, by the Joint Committee of both Houses—that the Corporation should be given only the absolute right to extract up to 16,000,000 gallons per day, and that with regard to the 4,000,000 difference between the 16,000,000 and the 20,000,000 gallons now proposed in this Bill, the Catchment Board should have the right of veto on extraction.

Now, as the Bill stands, it is left to two Ministers, the Minister of Agriculture and the Minister of Health, to decide whether that extra 4,000,000 gallons may or may not be extracted from the river. It is all very well to talk about the public interest, and to say that this matter must be left, or can be entrusted only to the wisdom of Ministers acting in Whitehall. Any of us who has had anything at all to do with the administration of drainage of these rivers—and particularly as we are discussing a river which is most difficult, tricky and chancy in its flow—knows that decisions of what can or cannot be extracted are taken in accordance with not only daily but almost hourly readings of a great number of gauges along the river; and nobody but the engineer to the catchment board is really in a position to say what quantity of water can be extracted. If the procedure proposed in the Bill is accepted, it will mean that the matter has to go back to London for consideration, not only by one Minister but by two Ministers. Those of us who have tried to get the most petty licences out of even one Government Department, know how long it can sometimes take, but when two Ministers and two Departments have to agree, then I think it is very difficult to feel that in rejecting the Amendments proposed by the Joint Committee of both Houses the Minister of Health had in mind the reality of the position.

I am fully aware that everything I have said leads logically to the fact that we as a House should reinstate word for word the Amendment proposed by the Joint Committee of both Houses. But I do not think that in this House we always proceed entirely by logic. We should very much prefer to make it easy for a settlement of what is now in fact a difficult position to be reached. Therefore I have put down an Amendment which does not go so far as that proposed by the Joint Committee. I have put down an Amendment to the effect that the Corporation and the Catchment Board should be left to agree on whether the river can or cannot afford to have the extra 4,000,000 gallons extracted from it, and that only in the event of disagreement between these two bodies shall the matter be referred to the Minister in London. I think the noble Lord opposite will realise that my Amendment represents a considerable concession to his point of view. I do not think my Amendment entirely meets the position, but it is at least an advance towards sanity. I beg to move.

Amendment moved— Page 7, leave out lines 32 to 43 and insert the said new proviso.—(Earl De La Warr.)

3.39 p.m.

LORD SHEPHERD

My Lords, apart from the Bill before us, perhaps I ought to say that we stand by the speech or Mr. Greenwood, quoted by the noble Lord. We do not look upon the new procedure as a means of keeping down all opposition. We stand by every word of my right honourable friend's speech. Unfortunately for the noble Lord, the speech was made on a subject other than the one we are now discussing, although during the same debate. As a member of a Joint Committee of both Houses, I would like Committees of which I am a member to have their Reports properly received, and on the whole I think that Committees and Joint Committees have no complaint about the reception of their Reports in either House. I hope that that condition will continue. At the same time, I do not think any noble Lord will be prepared to say that whatever a Committee or a Joint Committee propose, Parliament must, willy-nilly, accept. Parliament does not give up its rights in legislation after it has referred particular measures to Joint Committees for a special function.

I am in the very happy position to-day of being able to inform the noble Earl, and noble Lords generally, that the Government are prepared to accept this Amendment. The Amendment is not new to noble Lords on this side, and we are glad to give it our support. Moreover, there are two undertakings that I would add. First, we give an undertaking that should a matter ever be referred to the Ministers, after disagreement locally, expedition will be shown in dealing with it. Perhaps I ought to add that in relation to rivers there is a practice in operation in the Ministry of Health which in cases of emergency permits of a decision being taken at twenty-four hours' notice. We will try to do our best in that respect. The second undertaking is this: that immediately this Bill becomes law, the two Ministers will meet representatives of the Joint Board and of the Catchment Board, in order to see whether a sliding scale can be adopted for the river, so that instead of being faced with the issue of a drop of between 20,000,000 and 16,000,000 gallons per day at one fell swoop, the, rise and fall of the extraction of water will be dependent on the level of the river from time to time. If we can get such a sliding scale—and I think it possible—it should meet the case.

EARL DE LA WARR

I should like to thank the noble Lord for accepting this Amendment, and also for adding to his acceptance those two assurances. We know, of course, that ministerial assurances have some value on these matters, though in the end we have to get down to the interpretation of Acts of Parliament. However, I think that what the noble Lord has said is very helpful.

On Question, Amendment agreed to.

EARL DE LA WARR moved, in subparagraph (1) of paragraph (33) to omit "and shall be subject to audit by a district auditor" and insert:

  1. "(a) The accounts of the Board shall be audited annually;
  2. (b) The Board shall by a resolution passed not later than two months after the appointed day (hereinafter in this section referred to as "the initial resolution") adopt either the system of district audit or the system of professional audit;
    3. 846
  3. (c) The provisions of Part X of the Local Government Act, 1933 other than those of sections 237 and 238) shall mutatis mutandis and with all necessary modifications extend and apply to the Board as if the Board were the council of a borough:

Provided that—

  1. (i) neither the requirement as to a two-thirds majority prescribed by paragraph (a) of subsection (4) of section 239 of the said Act of 1933 nor the provisions of paragraph (b) of the said subsection shall apply to the initial resolution: and
  2. (ii) paragraph (b) of subsection (3) of the said section 239 shall have effect as if the Institute of Chartered Accountants in Ireland were one of the bodies specified in the said paragraph and as if at the end of that paragraph there were inserted "or any other body of accountants established in the United Kingdom and for the time being recognised by the Board of Trade for the purposes of the provisions of section 161 of the Companies Act, 1948 relating to the qualification for appointment as auditor of a company other than an exempt private company."
( ) It shall be lawful for the Board subject to the consent of the Minister at any time and from time to time after they have passed the initial resolution by means of a subsequent resolution passed and confirmed in accordance with subsection (4) of the said section 239 to adopt the other of the two systems which are referred to in the said section 239.

The noble Earl said: My Lords, after what happened on the last Amendment, I rise to move this Amendment with a sense of considerable encouragement. It is always pleasant to meet a Minister on the other side who is obviously anxious to meet us in our ideas. The main burden of my complaint I have already expressed on the first part of the last Amendment, and I will not repeat what I said then. I would say only that this Bill as it now stands is another direct reversal of the proposal of the Joint Committee of both houses. I am in some difficulty here to find a compromise. On the last Amendment it seemed to me to be possible to put down something that was rather different from what had already been discussed in another place; and here we always prefer, if we send something back to another place, to make some concession to their view. The trouble in this case is that the Joint Committee went so far in the direction of compromise that I do not see how we can go further.

The point at issue is an exceedingly simple one. The Water Board wanted to be permitted to have their accounts audited by the means commonly spoken of as professional audit; that is to say, by a professional auditor. The Minister said that the audit must be carried out by the district auditor. Now, the Joint Committee made what I should have thought would appeal to all of us as the most reasonable compromise—namely, that the decision should be left in the hands of the Water Board, and that they should be given the choice of audit either by district auditor or by a professional auditor. Not that that is a novel proposal, as I think the noble Lord Belstead will agree, because in fact it is a proposal that is based on the Local Government Act, 1933, Section 239, whereby all borough councils and county councils are given that choice. While it is not my purpose to-day to argue which is the best form of audit, I am arguing only in favour of a choice being given.

It is not without interest that no fewer than 134 boroughs have made the choice in favour of a professional auditor, as against 109 in favour of the district auditor. Of the county boroughs, 73 out of 83 have declared for the professional auditor. As we all know, owing to changes in public opinion—which some of us may think fortunate and some unfortunate—which have been demonstrated in the last month or so, the vast majority of these county boroughs were in fact being administered by a Labour majority. In addition, it has been laid down in the recent nationalisation Acts put before your Lordships by Ministers who are now sitting opposite that all nationalised industries should have their accounts audited by professional auditors.

How, then, the Minister of Health finds it possible to argue that here is a grave matter of public policy and principle in which he must lay down a definite law, a sufficiently grave matter of principle to override the proposals of a Joint Committee of both Houses of Parliament, I find it hard to understand. I repeat that I see no point in arguing the respective merits of these two forms of audit, but I do ask the noble Lord why no choice can be allowed to the Water Board as to the method of audit that they adopt; and further, how he can contend that it is so important to refuse them a choice that the Report of a Joint Committee of both Houses has to be overridden. That is all I wish to say on this question at the moment. I beg to move.

Amendment moved— Page 19, line 24, leave out ("and shall be subject to audit by a district auditor") and insert the said new words.—(Earl De La Warr.)

3.50 p.m.

LORD BELSTEAD

My Lords, I should like to make a few remarks, if I may, for the benefit of those noble Lords who did not hear all the arguments and questions upstairs. Whether they are to be congratulated or commiserated with on that account I am not sure, but the fact remains that they did not hear them. It must be remembered that Clause 33 (1), which the Minister has felt himself impelled to alter, is purely permissive. It is entirely a question of giving the Water Board the choice of having their accounts made up and audited either by the district auditor or by a professional auditor. As the noble Earl, Lord De La Warr, has said, the borough councils and the county borough councils practically all now employ professional auditors. I think that amongst the great cities and towns of the country there are now five exceptions that have a district auditor.

Heaven forbid that I should say anything against district auditors or the district audit! District auditors are civil servants. They get their professional training after they are civil servants, during their service. They are not like the members of the Institute of Chartered Accountants or the Society of Incorporated Accountants, who have had a long professional training, ending in a series of examinations. No doubt, they are most suitable for what they were intended—that is, to audit the accounts on rate funds and to surcharge and disallow discrepancies in the accounts of small bodies, but for something which is really a trading concern, I submit, and the Committee felt, that the professional auditor is far more suitable. The field for the district auditor has been very much narrowed in view of some of the recent nationalisation measures, under most of which the Minister is empowered to choose who shall be an auditor, and he has in fact chosen a professional auditor in case after case.

I am bound to admit that of the forty-seven water boards in the country, thirty-seven have a district audit; but that is not half such a convincing argument as it sounds, because some of them, like the Metropolitan Water Board, have had a district audit from the time when the professional audit was practically unknown; and in other cases they are small bodies who have chosen the district audit because their constituent members have a district audit. In fact, of recent precedents—the only two since the war—in the case of the Mid- and South-East Cheshire Board the Minister sought to have a district audit imposed upon the Board, and he was unsuccessful. In the other case—that of the North Cumberland Water Board—a district audit was imposed by the Act, but each of the very small constituent bodies that made up that Board themselves had a district audit, and therefore they did not oppose it.

There is one other, as I think, rather cogent argument, and it is this: that in cases where district audit is adopted, the audit is not opened or commenced until after the end of the financial year. It is rather late when the public body in question receives the audit; therefore it is not always easy to find out discrepancies, overtake them, put them right or do them salutary justice. In the case of a professional audit, it is what is called a continual audit, which goes on all the time, and the facts as they come out are available to the public bodies. I do not wish to weary your Lordships with this argument. I do, however, wish to revert to the point I started with: that this is really a permissive clause. Therefore, in all the circumstances, I hope that your Lordships will uphold the decision of your Committee.

LORD SHEPHERD

My Lords, it is quite true to say that the chief trend today on the subject of audit amongst local authorities is towards the district audit and not the professional audit. As the noble Lord, Lord Belstead, has said, it is also quite true that a greater proportion of the municipal corporations have a professional audit, but it would be equally true to say that they have taken their professional audit subsequent to finding their elected auditors of other days unsuited for their purpose. But even today a number of municipal boroughs are adopting the district audit instead of the professional audit. The noble Lord has mentioned one or two facts, and in a short statement that I want to make, I hope your Lordships will permit me to mention a few facts also. Thirty-seven out of forty-seven wafer boards in the country, including the Metropolitan Water Board, are subject to district audit. Therefore, we suggest that district auditors in the matter of auditing accounts of water boards are infinitely more experienced than the professional auditors. The second point I would like to mention is that the district audit is more independent than the professional audit, in that the auditor is not appointed by the body whose accounts are coming under review.

VISCOUNT SWINTON

Really, does the noble Lord suggest that a member of the Institute of Chartered Accountants will not be completely independent in his audit?

LORD SHEPHERD

I have not suggested that, and I should be very sorry indeed if what I have said conveys that impression.

LORD BELSTEAD

It does.

LORD SHEPHERD

What I said was that the district audit is more independent. I did not question the honour or integrity of the professional auditor. I do not cast any reflection at all in that direction. The district auditor also has powers of calling for documents, summoning people to interviews and making surcharges, which facilities are not available to the professional auditor. The district auditor alone has the powers which enable an auditor to get to the bottom of things. In the case of this particular Water Board, out of fifteen constituent members of the Board, thirteen are subject to public audit; and, that being the case, we suggest to your Lordships that it would be eminently suitable that the co-ordinating body should come under public audit as well. It would make for unity which in turn, I think, would make for progress. As I have already said, the modern tendency is towards district audit and not towards professional audit. The noble Lord, Lord Belsteed, conveyed a little too much in what he said about the attitude of the Water Board in this case. I understood hint to say that they had made proposals that they should be given powers to adopt a public audit—I am sorry if I am misquoting him.

LORD BELSTEAD

I said that the whole clause is permissive. You are paraphrasing it.

LORD SHEPHERD

The point I want to make is that, so far as we know, no protest has been made by this Board (or what will be this Board) in respect of this proposal at all; we do not understand that there is any resistance to it whatever. There are two points about the Amendment. First, there is a proposal in the Amendment that in order to enable the professional audit to be carried through, this Water Board should be presumed to be the council of a borough. I think that is rather stretching words too far. Certainly by no stretch of the imagination could such a composite body, consisting of all kinds of authorities, be likened unto the council of a borough. Then there is one other curious feature about the Amendment. At the start, in order to decide whether there should be a district audit or a professional audit, a majority vote of one will carry the day. But if afterwards the authority desires to change from the professional to the public, or vice versa, then a two-thirds majority would be required. We feel that on this point the Government are in the right; that it is in the line of progress and development; and we sincerely trust that noble Lords will not press the Amendment upon us.

THE MARQUESS OF SALISBURY

My Lords, perhaps I may say one word in a further appeal to the Government on this question. We are grateful for the assistance they have given in regard to the other Amendment. We do not mean to be obstructive in regard to this question, but we regard it as a matter of some considerable importance. I will not make any reference to the differentiation made by the noble Lord, Lord Shepherd, between the independence of district auditors and that of professional auditors, because although it appeared to cast a rather unfortunate reflection upon the professional auditors, I am sure he did not mean to do that; therefore the less said about it the better. But with regard to his other points, there are things which should be said.

First, as I understood, he said that there was a trend to-day amongst local bodies towards district audit, as against professional audit. That, of course, is a matter of opinion, but I think my noble friend Lord De La Warr quoted the fact that seventy-three out of a total of eighty-three county boroughs, including Manchester and Liverpool, have adopted professional audit. That does not seem to bear out the statement made by the noble Lord opposite. I would also add that in the case of these constituent bodies, more than half at present have professional audit—I am told I am wrong in that; I should have said that over 50 per cent. of the Board's revenue is derived from such bodies. That is relevant.

LORD SHEPHERD

Will the noble Marquess forgive me? The difference in the revenue is accounted for by the large borough. The figures which I have given comprise the whole of the bodies in the area, and thirteen out of the fifteen are subject to district audit.

THE MARQUESS OF SALISBURY

The borough bodies have a district audit, but the fact remains that by far the larger proportion of the revenue comes from bodies which now have professional auditors. The point I ask the Government to look at is this—I want to put it in the most uncontroversial way I can. All we ask is that they should have second thoughts. We are not asking for more. The noble Lord, Lord Shepherd, has more knowledge of these matters than I have, and if he is right in saying that there is a trend in the direction of district audit, there is nothing whatever to prevent the Board having a district auditor. If they follow the fashion, if they are in the movement they can say "By all means let us have a district auditor." But on the other hand, if they think that on the balance of consideration they would prefer to have a professional auditor, I do not see why the Government should deny them a right which, as I understand it, is enjoyed by every borough council in the country.

There is one other point. If the Government look forward, as I hope they do, they will observe that all the great nationalised industries have professional auditors. I rather gathered that if the Government are returned to power after the next General Election they propose to nationalise water; and in that case they would be placed in the extremely embarrassing position of having to undo all the work they have done on this occasion. For all these many reasons—short-term and long-term reasons—I think the Government might give us this permissive Amendment; for it is no more. If they are right in thinking that the trend is towards district audit, they can put it to the test, and it is always open to the Water Board to adopt that course.

I am sure that the Government do not wish to delay the passage of this Bill; neither do we. Obviously, it is important for the locality that it should be passed as soon as possible. What I would suggest is that the Government might consider the matter further before Third Reading. We in this House are in the happy position of being able to move Amendments on Third Reading, a course which is not open to members of another place, so long as we move a properly considered Amendment and not a manuscript Amendment. Will the noble Lord not consider the possibility of approaching the Ministry of Health again in order that they may consider whether they can meet us? We are not going to insist upon a professional audit. All we want to do is to give the local people the type of audit they want. That is a very moderate proposal. If the Goverment would consider this point again between now and Third Reading we could have discussions with them; and if we can come to an agreement upon it, a proper Amendment can be put down at that stage.

LORD SHEPHERD

My Lords, as usual, the noble Marquess is most persuasive, and on these Benches it is difficult to resist his influence. While not promising undue commitment in the matter—I know he will understand that we cannot do that—we are perfectly willing to agree to the suggestion that he has made, to consider the matter again between now and Third Reading.

THE MARQUESS OF SALISBURY

I am grateful to the noble Lord. We shall look forward to hearing the result.

EARL DE LA WARR

I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

LORD SHEPHERD

My Lords, the purpose of this Amendment is to defer the date of the first meeting from July 1 to August 1. I beg to move.

Amendment moved— Page 22, line 5, leave out ("July") and insert ("August").—(Lord Shepherd.)

On Question, Amendment agreed to.

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