HL Deb 24 February 1966 vol 273 cc338-45

3.14 p.m.

Order of the Day for the Second Reading read.


My Lords, this Bill would give to councillors in Scotland the benefit of the same slight relaxation of the law regarding pecuniary interest as was effected in England and Wales by the Local Government (Pecuniary Interests) Act 1964. The basic principles of the law are that a councillor should (a) declare any pecuniary interest in a subject before the council; (b) not vote on that subject, lest his vote should be influenced by his personal interest. Section 73 of the Local Government (Scotland) Act, 1947, which embodies these principles, also provides, however, that the Secretary of State may in particular cases authorise a councillor to speak or vote, in spite of a pecuniary interest, in any case where the conduct of business would otherwise be impeded, or for other good reasons. The decision whether a councillor has a pecuniary interest is, in the first instance, for himself. He may seek the advice of the town or county clerk, but the final decision rests with the courts. The Secretary of State has no locus in this matter.

The main reason for amending legislalation is the very wide definition of pecuniary interest established by court decisions. For example, in the English case of Rands v. Oldroyd a builder was held to have a pecuniary interest in a matter before the council—a discussion on the awarding of a building contract —notwithstanding the fact that his firm, as a matter of policy, did not tender for local authority contracts. The decision of the court was that the Statute had been contravened since the company were in a position to tender for building contracts if they wished. A Scottish case involving very similar circumstances arose in Jedburgh in 1963, although I may say that in this case the decision of the court went the other way.

The Bill is necessary because the existence of the English Act might mean that the courts in Scotland could take the view that, with different legislation having been enacted in England, the terms of Section 73 of the Local Government (Scotland) Act 1947 might be taken to imply that a remote or insignificant pecuniary interest in Scotland did not become, as in England, an interest which a councillor need not declare. The intention of the Bill is, therefore, to provide that a councillor shall not be regarded as having a pecuniary interest if it is so remote or insignificant that it cannot reasonably be regarded as likely to influence a councillor—that is, an average councillor in normal circumstances. The decision as to what is remote or insignificant will still rest with the courts, but examples of interest which the new provision would enable them to ignore could include the cases to which I have referred. On the other hand, they would probably not ignore changes in council house rents below a certain level, because of the difficulty of drawing the line.

Clause 1(5) gives the Secretary of State power to remove a councillor's disability to vote or speak by reason of a pecuniary interest, not only in particular cases as at present, but also in respect of any class of councillors and for any length of time. It will be clear to your Lordships that the connection in which this would be most likely to arise would be where councillors are tenants of council houses when rents are under review. There are various ways in which the power could be exercised. For example, besides the obvious alternatives of allowing councillor tenants (a) both to speak and vote, and (b) to speak but not vote, there is the possibility that the councillor tenants in a particular authority or authorities might be given permission to vote for a year at a time. In councils where the number of councillor tenants is so great that the business of the council would be impeded if they could not vote on council rents, permission to vote is given more or less automatically each time an application is made; giving standing permission to vote would avoid the need for correspondence. The Secretary of State has made no decision about how to operate this provision if the Bill becomes law. He will be glad to take note of any opinions which may be expressed on this matter before arriving at a decision. It is, however, desirable for the Secretary of State to have power to lift voting disabilities on something more than the present hand-to-mouth basis.

Those are the main provisions of the Bill, but it has a number of useful minor provisions. Under Section 73, a councillor is not regarded as having a pecuniary interest in a matter concerning a public body of which he is an employee, but the Act gives a definition of a public body which is not sufficiently wide. This is provided in Clause 1(2) of the Bill so as to include nationalised industries, universities, colleges and the National Trust for Scotland. The present law permits councillors to give standing notice that they are members or employees of a particular firm and they are then no longer required to declare their interest on each occasion. Clause 1(3) of the Bill would allow a councillor who is a tenant of a council house similarly to give standing notice of his tenancy. This would not affect his right to speak or vote, which is still subject to the normal rules. Clause 1(4) increases the maximum penalty on a councillor voting when he has a pecuniary interest from £50 to £200, to emphasise the seriousness of the offence, and because the trivial case will now no longer come before the courts, and also it takes account of the change in the value of money.

Clause 2 simply does for officers of a local authority what Clause 1 does for members, for the sake of logic and completeness. I suggest to your Lordships that the Bill may be commended to the House as a useful measure reducing the strains on councillors, who perform such valuable services to the community in their areas.

Moved, That the Bill be now read 2ª. —(Lord Hughes.)

3.20 p.m.


My Lords, I should like to thank the noble Lord for introducing this small Bill so clearly to your Lordships. I do not think there can be any disagreement in the House about the principle of this Bill, and we hope that it will soon pass into law. The Secretary of State of course already has wide powers of dispensation in this respect and possibly some of us felt that these were sufficient, but I think there can be no objection at all to making certain about this matter and removing any difficulties which still exist, as the noble Lord has pointed out.

I would mention one small point in connection with Clause 1(5). I do not quite see why the Secretary of State should be able to give dispensation, to quote the Bill, "indefinitely or for any period". I feel myself that perhaps that is a little too sweeping. There must be cases from time to time—for example, I can think of a councillor who may move out of a council house into his own home—when a pecuniary interest disappears. He may have been given dispensation indefinitely by the Secretary of State. I do not think this is a terribly important point, but I should have thought it might be better to have some time limit—a year or possibly the period of office between elections—which would give the Secretary of State a little more control over the situation.

Finally, I would like to echo the tributes the noble Lord has paid to councillors and officials. They do a difficult job and, as a rule, get a great many brickbats in return. This Bill should make their lives a little easier in the future. I hope the House will give it a Second Reading.

3.23 p.m.


My Lords, I am sure that every noble Lord will agree that a Bill like this is needed to deal with the very minor pecuniary interest that one may have and have to declare, for which one then has to get exemption from the Secretary of State in order to be able to speak about a subject, although one may have great knowledge of it and be the best person in the council to speak about it.

I would ask the noble Lord, Lord Hughes, about one or two small points. As to Clause 1(3), if you are a councillor and give standing notice that you are a council house tenant, what are the mechanics behind this and what are the mechanics for informing new officers or councillors that standing notice has been given? I know that in this House we declare our interest before a speech so that everyone who is taking an interest in that particular subject at least knows we have an interest to declare. If you just give standing notice, I suspect it may be buried in some book no one bothers to look up, and while this may be all right for two or three years while the council remains of more or less the same composition, I should have thought that in about fifteen years' time, if you are re-elected that long, there is a danger that your standing notice may have been forgotten or lost. Possibly the noble Lord could clear up that point.

The other point about which I wish to say something is in reference to Clause 1(5). In England the percentage of houses which are owned by the local authorities in the English conurbations varies from 36 per cent. in the West Midlands conurbation down to 18 per cent. in the Greater London conurbation, The Merseyside conurbation is 25 per cent., South-East Lancashire 22 per cent., West Yorkshire 24 per cent., Tyneside 33 per cent. Those are the figures according to the 1961 Census. But in the Glasgow conurbation the percentage of council house tenants is 46 per cent., or 10 per cent. more than in any of the English ones; 247,066 dwelling-houses, out of a total of 541,276, are in fact rented from a local authority. I believe chat in certain cases, including the City of Glasgow (although I must admit I was not able to check this figure), the number of council house tenants is over 50 per cent. or the number of council houses is over 50 per cent. of the dwellings. I therefore think this leads to a slight danger under Clause 1(5) which does not exist in England, in that over half the electorate and possibly, in many cases probably, over half the county councillors concerned are in fact tenants of the local authority whose rents they are discussing. I feel, therefore, that although Clause 1(5) may do no harm in most of the local authorities in Scotland where the number of council house tenants is fairly low, in the city of Glasgow itself it is just possible that it might lead to difficulties. I should like to know from the noble Lord whether an eye will be kept on this dispensation to see whether it does cause difficulties in the City of Glasgow due to the fact that such a large percentage of the dwelling-houses in that City are owned by the local authority. With those two observations, I would say that I think the rest of the Bill will do nothing but ease the lot of county councillors and city councillors.


My Lords, I suppose I should declare an interest as a Scottish county councillor. I should like to support my noble friend the Duke of Atholl, in particular over Clause 1(3), and I would suggest to the noble Lord, Lord Hughes, that any dispensation which is allowed should only run for the period of a county council, the triennial period, and that it should be renewed each time the county council is re-elected. That would mean that new members who come on to a county council at the triennial period will be aware of what dispensations have been given.

3.27 p.m.


My Lords, I am most grateful for the welcome given to this Bill and for the points which have been raised. If I might take them in the order in which they have been raised, the first point is that of the noble Marquess: why under Clause 1(5) was this indefinite dispensation given rather than a specific one? It may be that there are certain cases where it would be better to have it indefinite rather than for a definite period, so that it would cover a subject which was under discussion, perhaps over a period, where there could not be a certainty that it would be disposed of in a particular time. But I would emphasise—and this applies to some of the other points—that the Secretary of State is anxious, before arriving at decisions as to how he will act on dispensation, to take into account any points of view expressed.

The noble Duke raised two points; first of all, what is the machinery for informing councillors or officials of a standing notice of dispensation? There is at present a requirement, which will continue, that a register must be kept in which standing notice must be recorded. But having said that, I would emphasise that it is for each individual council to adopt its own methods. And speaking as one who was for many years a member of a local authority, I would assure your Lordships that the first thing that happened in my local authority was that the town clerk informed any new councillor of any matters of that kind, and I have no reason to believe that what was done in Dundee is any different from what is done in other town councils or county councils.

The percentages of local authority owned houses in Scotland as compared with England are rather interesting. It is, of course, a reflection of the fact that, generally speaking, housing conditions in Scotland were worse than they were in England, and that the local authorities in Scotland have played a bigger part than is the case South of the Border in solving, or getting on the way to a solution of, this problem. I should say, however, that it does not affect the situation to any extent, because it is common knowledge—but it will not do any harm repeating it again—that the position which has existed, I think since 1956, is that where one-third or more of the members of a local authority were council tenants, each Secretary of State has automatically granted this dispensation. The second condition was where a town clerk or a county clerk notified the Secretary of State, that the absence of dispensation would change the position which otherwise would be acceptable to a majority of the council, even though it was less than one-third, dispensation has similarly been granted automatically on request.


My Lords, if I may just interrupt the noble Lord for one moment, I was not aware of when actually this started, but I was aware that it is the practice now. If there is a glaring example of a council misusing its powers, presumably the Secretary of State could refuse to renew the dispensation to the councillors who live in council houses. But will he have the power under Clause 1(5) to revoke dispensation once it has been granted, presuming it has been granted for a long period or indefinitely?

3.32 p.m.


My Lords, the Secretary of State does have power to revoke. In fact, this was a point which emerged at a fairly late stage in the proceedings in another place, when it was discovered thta the terms in which the proposal had been drawn did not in fact permit the Secretary of State to revoke once it had been granted. The clause was amended by the insertion of a provision to enable the Secretary of State to vary or cancel such dispensation.

I think the final point to which I should refer is the one raised by the noble Earl, Lord Mar and Kellie. I am particularly interested in this one because of what he said about the Secretary of State being interested in suggestions as to how dispensation for a period may be operated. In view of the fact that, in the past, one of the governing considerations has been the number of members so involved in relation to the total membership of the council, or the effect that it might have in invalidating what a majority would wish to do, the election, as with a county council, of a completely new council each three years obviously would create a new situation. I can assure the noble Earl that this is a point to which I am certain the Secretary of State will be happy to give particular attention.

I do not think that there is anything else to which I should make reference. As all noble Lords who have spoken have said, this, I think, will make things easier for a body, both councillors and individuals, who, as was said by the noble Marquess, more frequently receive brickbats than bouquets. If they should so abuse their position, as the noble Duke rather feared, they are subject to the ultimate brickbat that they are not reelected.

On Question, Bill read 2ª, and committed to a Committee of the Whole House.