LOCAL GOVERNMENT (SCOTLAND) BILL

HL Deb 18 July 1973 vol 344 cc1173-230

4.14 p.m.

House again in Committee.

THE CHAIRMAN OF COMMITTEES

Perhaps I should remind noble Lords that the Committee is still considering Amendment No. 56 by the noble Lord, Lord Burton, to Clause 29.

LORD DRUMALBYN

It might be convenient if I resume the discussion and reply to my noble friend. This is another matter which has been discussed at least twice within the last five years in Parliament. May I remind your Lordships that we are talking about the qualifications for nomination as a local government candidate, and, in particular, the qualification of occupying land or other premises in the area of the authority. My noble friend wishes to add after the words, "occupied as owner or tenant any land" the words, "with a value of not less than £10", and the paragraph will then go on "or other premises in the area of the authority". I think my noble friend appreciates that one of the difficulties here is setting a value to the property or other premises which must be occupied for this qualification to apply. Whatever figure is chosen is bound to be an arbitrary one. My noble friend is quite right in saying that the figure used to be £10, which I think was fixed way back in 1947.

During the passage of the 1971 Bill, the Government took the view that no value should be specified, because occupation of property is one of a number of considerations which might indicate a person's interest in an area. If the property concerned was of very little value, then, in a normal case, a person's interest in the area would be very slight and he would be unlikely to want to stand as a candidate. But if he wanted to stand, he would first have to be nominated and it would then be for the electors to decide whether he should be elected. So it still remains the Government's view that no value should be specified, and that we should adhere to what was decided in 1971.

LORD BURTON

I note what my noble friend has said, but it seems to me pointless to have these words in the Bill if we are talking only about a peppercorn value which can be rigged by anyone. But in view of what my noble friend has said, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 29 agreed to.

Clause 30 agreed to.

Clause 31 [Disqualifications for nomination, election and holding office as member of local authority]:

4.17 p.m.

THE EARL OF SELKIRK moved Amendment No. 57: Page 16, line 35, leave out ("or").

The noble Earl said: Amendments Nos. 57 and 58 should be taken together. Clause 31 states what is substantially the law as it is to-day, and according to that if within five years before nomination day anyone has been convicted and sentenced to three months' imprisonment without the option in the United Kingdom, the Channel Islands, the Isle of Man or the Irish Republic he will be disqualified from standing. As the noble Lord, Lord Drumalbyn, has said, a British subject includes anyone who is a citizen of the United Kingdom, but this disqualification should apply equally to anyone who has been convicted in a court within the Commonwealth. That seems to be a common sense interpretation. It may be argued that it might be difficult to identify the circumstances, but if the circumstances are not identifiable then clearly they will not be found out. But I believe that if somebody is convicted within the Commonwealth and is sentenced to three months' imprisonment or more without the option, he should be disqualified in the same way as another person would be because of a sentence imposed in this country. I beg to move.

LORD DRUMALBYN

I do not think we should be under any misapprehension. The phrase, "British subject" goes a good deal wider than a subject of the United Kingdom and Colonies. I was in some doubt as to my noble friend's purpose in moving this Amendment, but as I understand it he takes the view that if a person should be debarred from standing for election as a local authority candidate if he has been convicted in the United Kingdom of an offence for which a three months' sentence has been imposed without the option of a fine, then that disqualification should also apply in respect of convictions in those areas where there are similar jurisdictions; that is to say, in the Commonwealth.

A Government Amendment adding sentences passed in the Irish Republic as a ground for disqualification was carried at Report stage in another place as a result of an undertaking given in Committee there. This seemed reasonable because of the status of citizens of the Irish Republic as laid down in the Bill and also because of what is known as the sentencing policy in the Irish courts; but, all the same, it was a departure from the disqualification provisions of the Local Government Act 1972 affecting England and Wales. It would be more difficult to justify a further departure from the common code especially having regard to the relative numbers of Commonwealth citizens in the three countries. There is also the point that it is quite possible that all Commonwealth countries do not follow the same kind of sentencing practice as is followed in the United Kingdom. It is possible that a minor offence in the United Kingdom will be less harshly punished than in some of the Common- wealth countries, and it would be perhaps less than fair if an apparently severe penalty passed in a Commonwealth country led to disqualification from membership of a local authority whereas a lesser and more reasonable sentence passed in a United Kingdom court for a similar offence did not.

There is also the point that if we are disqualifying people in respect of offences that merit a certain punishment, why stop at the Commonwealth? If you are going to disqualify people for offences, then they ought to be disqualified wherever those offences are committed if it is the moral content that you are looking at. So the Government think it wiser to keep to the present system. We have already extended it to the Irish Republic, but we do not think we ought to extend it any further.

LORD HUGHES

I certainly would not welcome the prospect of its being extended to any part of the world because at the present time there are some parts of the world where they think being a British subject is worthy of imprisonment.

THE EARL OF SELKIRK

This may or may not be the case, but I think the noble Lord has missed the point entirely. If he turns back, he will see that any British subject in this country can stand for local election, and a British subject is a citizen of any member of the Commonwealth. What the noble Lord says is that if anyone is convicted of an offence in this country within five years—and three months' imprisonment is the minimum—he may not stand as a member of a local authority. What I am saying is that if someone from any part of the Commonwealth comes here with a heavy criminal sentence on his back, he should equally be disqualified. The noble Lord says, "Oh, well, we do not know, about Comonwealth courts; some of them are very second-class; they convict people of all sorts of silly things." This is not so; it really is not remotely so. If it is fair that a person in this country who has a criminal record should not stand for five years, I think it should be equally so in the case of people from Commonwealth countries.

I must say, with respect, that the noble Lord's argument is wholly illogical. As to the extension to Ireland, I did not know it had been made at that time. But anyone with a criminal record coming here from abroad who has the right to vote can stand. It is a peculiarity of this country—in this respect we are probably unique in the world—that anyone from any part of the Commonwealth can vote and stand if he is on the electoral register. It is a peculiarity of this country; it is quite different from most other countries. I should have thought that at least the same rule should apply to someone coming here as in fact applies to citizens of this country. I really must ask the noble Lord to be good enough to look at this again. I do not think his answer has met my point at all.

LORD KILMANY

Having listened to the debate for the last few minutes, I am bound to say that I feel there is a good deal of substance in what my noble friend Lord Selkirk has said, and I very much hope that my noble friend on the Front Bench will think again before he definitely says "No" to what he has been asked to attend to.

LORD DRUMALBYN

I am perfectly prepared to think about this again, but the difficulties are these. In the first place, do we want to have disqualifications in the case of Scotland that differ considerably from disqualifications in England and Wales?

THE EARL OF BALFOUR

I am sorry to interrupt my noble friend, but is it not the case that either we have disqualifications for Commonwealth citizens or else, because they may have been sentenced overseas, they can come here and go immediately into local government if they want to, or stand for election? The Bill as I read it does not cover anybody who has been sentenced in the Commonwealth, irrespective of the crime. I think that is the point, and I ask my noble friend to look at it again.

LORD DRUMALBYN

My noble friend may say that that is the point, but it is not the point I was talking about. I am saying that we have to consider the relativities of qualifications in Scotland and in England and Wales. My noble friend is of course quite right, in theory at any rate, that a person having been sentenced for something and having served his sentence in the past five years, immediately on being let out of prison might come over here to start a fresh life and might stand for election as a representative in a local government area. Of course he might; but we have I think to consider the realities of these things—the prospects of his getting nominated, and so on, in circumstances of that kind. May I also say that we are not thinking only of Commonwealth citizens: we are thinking of British citizens who may have been sentenced abroad and then come back to stand for election here. We have not so far thought fit to include this in the disqualifications, but it is, again, another difficulty. If a British citizen is to be debarred for a crime committed in the Commonwealth, why should he not also be debarred for a crime committed in another part of the world? I think we have to get some kind of logic into this. It is not as easy as it looks; there are difficulties. But we think that, having regard to the realities of the situation, it is not necessary to do this, least of all in Scotland because the number of Commonwealth citizens coming into Scotland are proportionately less than those coming into certain parts of England and Wales.

LORD SHEPHERD

Perhaps I could help the noble Lord. Would it not be a fact that if there was a Commonwealth immigrant with such a record the likelihood of his getting a permit to take up residence in this country would be extremely remote, certainly in Scotland?

LORD DRUMALBYN

I am obliged to the noble Lord, but I was taking the extreme case, where he had got away with it.

THE EARL OF SELKIRK

I must say that I find it very hard to understand why the noble Lord should not change this and simply say that anyone who has been convicted and sentenced anywhere to not less than three months' imprisonment should not be competent to stand for local government. If that is what he wants, why not put it in? I really think that we want a measure of logic about this matter. I am not thinking, of course, of people sentenced to three months: I am thinking of scoundrels. If a scoundrel comes here there should be an absolute bar which can be enforced. The argument that sentencing may be different in different countries is, with respect, quite illogical. If it is valid in this country, it should be valid over a wider sphere.

LORD DRUMALBYN

I note that there is some support for this proposal. My advice at the present time is that it would be difficult to do this, but in view of what the noble Earl has said I will take another look at it to see whether it would in fact be practicable. We have a little time before the next stage to do that, because obviously it is a rather complicated matter.

THE EARL OF SELKIRK

I am grateful to the noble Lord. I felt a sort of conservative obstinacy in the noble Lord's approach to this problem: that this is the law at present, and why should we change it? But now he changes to quite a different line and says it might be difficult. I said at the beginning that it might be difficult; and, of course, if it is not known, then it is not known. But where this is known then it can be effective. I am very happy to accept what the noble Lord has said, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 31 agreed to.

Clauses 32 and 33 agreed to.

THE EARL OF BALFOUR moved Amendment No. 59: After Clause 33, insert the following new clause:

Declaration by member elected by local authority

" .A person who is elected by a local authority as a member of the authority shall, before attending a meeting or otherwise acting as a member of the authority, sign a declaration that:—

1. (a) none of the disqualifications for office set out in section thirty one of this Act apply in his case:
2. (b) he is otherwise qualified for election in terms of section twenty nine of this Act:
3. (c) he accepts office as a member of the authority; and
4. (d) he will faithfully perform the duties of the office;

and any person attending a meeting or otherwise acting as a member of an authority before signing such declaration, or signing such a declaration knowing any statement therein to be false, shall be liable on summary conviction to a fine not exceeding fifty pounds."

The noble Earl said: Throughout my time as a member of a local authority I have always signed a declaration very much on the lines of this Amendment. I admit that the words, "by a local authority" in the first line of my Amendment are wrong. There will be no co-option, so those words would not apply; otherwise the new clause reads reasonably satisfactorily. I regret to say that I have not managed to find these words in the Bill. It happens that I have never had to fight an election, but I have always had to sign a declaration that I will perform my duties efficiently. I presume that this point must be covered somewhere. I beg to move.

LORD DRUMALBYN

My noble friend is quite right: it is contained in Clause 7(3). His Amendment says: A person who is elected by a local authority as a member of the authority shall … sign a declaration…. This relates only to co-option and is already covered in the Bill.

THE EARL OF BALFOUR

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clauses 34 to 36 agreed to.

Clause 37 [Filling of casual vacancies]:

4.31 p.m.

LORD HUGHES moved Amendment No. 59A: Page 19, line 39, after ("election") insert ("(a)")

The noble Lord said: This is a paving Amendment for No. 59B and deals with the question of co-option. The Bill changes the law in this respect in that at present there is a power, a very wide power, to co-opt members to a local authority as the authority may decide. In the Bill there is no provision for co-option in any circumstances. If a vacancy occurs more than six months before the end of the Council's term of office it will be filled by means of a by-election. But if the vacancy occurs in the six months before an ordinary election is due it will remain, unless there are so many vacancies that the council is reduced by one third. The second possibility is so remote that one wonders why it is in the Bill at all. I have never heard of a council where the vacancies were so numerous, whether from resignation, death or imprisonment, that one third of the council went from the scene.

What is very common is that a single vacancy occurs, and there are a number of authorities in the country which are run on Party lines. In my home town, in the last seven or eight years, neither side has ever had a majority of more than one, and for a period of three years or six years there was equality. Decisions rested entirely on the casting vote of the Lord Provost. I think that it might be bad for government if, during the last six months of a council's life, because a vacancy was created, the majority in the council changed. There could be a situation where for the last six months of the council's existence there was a complete futility, in that the new majority might spend a considerable part of the time electioneering in the way of undoing decisions taken in the previous period. That is not the sort of thing which leads to good government.

My Amendment would permit a local authority to co-opt a member, if a vacancy occurred during the last six months of the council's term of office. I emphasise that it is only during this period that the Government are not providing that there should be an election. But I think it is important that if a council wishes to co-opt in those circumstances it should be free to do so. If the control of a council were unaffected by a single vacancy, or even two vacancies, within the six months, probably the council would not bother to do anything about it. But I think it right that good government should be made possible for the whole four years. Or, if one looks at it from the political point of view, the minority might say that it would be equally effective that bad government should at least be continuous right up to the end of the term, and that the electors should decide whether what had been done was good or bad. But we ought not to create a sort of "lame duck" situation in the last six months of the council's period of office.

LORD BURTON

I am sure that we were interested to hear the noble Lord, Lord Hughes, expounding the disadvantages of having political councils.

LORD HUGHES

The noble Lord, Lord Burton, is not usually so misunderstanding as that.

LORD DRUMALBYN

Perhaps what my noble friend Lord Burton means is that the noble Lord, Lord Hughes, is looking at this as a matter of fact at present; irrespective of whether it is desirable or not. Is not that right? I am bound to tell the noble Lord, Lord Hughes, that his Amendment is defective because he has linked it with subsection (2): Where a casual vacancy in any such office occurs within six months before the date of the next election … There is then the remainder of subsection (2), which he does not seek to amend, after which he wishes to add a provision for co-option which does not fit in very well with the words: where an election under subsection (1) above is not held, the vacancy shall be filled at the next ordinary election. The drafting of the Amendment is defective, if I may say so, but I agree that there is a good deal in the noble Lord's argument. There are considerations both ways. There could always be extreme cases whatever we do, such as the case which the noble Lord mentioned. But if he will be good enough to withdraw the Amendment, we will look at the matter again before the next stage.

LORD HUGHES

I am quite happy to do so. Had I thought there was only a defect in the drafting that would affect the issue, I would have had the noble Earl, Lord Balfour, draft the Amendment for me. The noble Earl seems to be establishing a reputation as a draftsman—and perhaps a record for the number of Amendments withdrawn. But I will join him in that and ask leave to withdraw the Amendment, on the assurance that the Minister has given.

Amendment, by leave, withdrawn.

Clause 37 agreed to.

Clause 38 [Disability of members of authorities for voting on account of interest in contracts, etc.]:

4.39 p.m.

LORD HUGHES moved Amendment No. 60: Page 20, line 11, leave out ("fact") and insert ("nature of his interest").

The noble Lord said: This Amendment relates to a matter that is giving a great deal of concern at the present time in respect of the declaration of interest by members of a council. I had better say in advance that I do not claim to be a draftsman, and if I am told that the drafting is defective I will immediately accept that that is the case. What I am certain about is what the Bill is doing and what I want to do. The Bill deals with two types of people who have to declare an interest; one is the member and the other is the official. The Bill says that if a member of a council has a pecuniary interest, direct or indirect, and is present at a council meeting, he should declare the fact. What takes place at present is that if a member attends a meeting he stands up and says, "I beg to declare an interest". But he does not say what the interest is. He does not say whether he is employed at the works as a janitor, or whether he is a major shareholder, or whether he is interested in a contract, or whatever it may be. He merely says, "I beg to declare an interest". Then he takes no further part in the proceedings. That complies with the law. Instead of merely declaring an interest he should declare the nature of that interest. I want him to be more specific than he has to be at present. That is the object of Amendment No. 60.

It will save time if I may, with permission, speak also to Amendment No. 61. This deals with the other part of the matter, the part which is similar to that dealt with in Clause 68. The clause we are now discussing deals only with the declaration that has to be made if a member is present at a meeting when the matter is being considered. Let us assume that someone wishes to evade the law. Let us assume that he has something to conceal. He is not going to risk breaking the law by taking part and helping to get the business through; for by concealing his interest he is going to place himself in a difficult position. A man who wants to do something underhand will be careful, as things now are, to declare an interest and to arrange for someone else to do the work for him, or to absent himself from the meeting. If he absents himself from the meeting he is under no obligation to declare an interest.

Let me now, if I may, read Clause 28 of the Bill: If it comes to the knowledge of an officer employed, whether under this Act or any other enactment, by a local authority that a contract in which he has any pecuniary interest, whether direct or indirect (not being a contract to which he is himself a party), has been, or is proposed to be, entered into by the authority or any committee thereof, he shall, as soon as practicable, give notice in writing to the authority of the fact that he is interested therein. It goes on to apply the same conditions to that officer as apply to a member. My second Amendment takes care of the situation where a man has an interest in a matter but is not present at the meeting, either through accident or intention or because he is not a member of the committee concerned. My second Amendment would require in these circumstances that if a member becomes aware of the fact that such a matter is going to take place or has taken place he shall take exactly the same action as the officer of the local authority is required to take: that is, he should notify in writing the nature of his interest. I can see no reason why in a matter of this kind in which there is so much public interest at the present time there should be a stricter set of rules for officers of local authorities—who are much less likely to have an interest in contracts—than there is for members of the authority. I beg to move.

THE EARL OF CROMARTIE

I should like to support the noble Lord, Lord Hughes, on this Amendment. As he knows, we have recently had a vast increase in matters in which a great deal of money is concerned: I refer to oil and to consequent heavy interests in building. This problem has exercised our minds for some time as a county council and I would strongly support the noble Lord on this Amendment.

THE EARL OF SELKIRK

I referred to this issue in the course of the Second Reading. I have an Amendment down later which touches on this subject but which I think is greatly inferior to the one that the noble Lord. Lord Hughes, has put down. He has taken the case of anyone who is not a member of a particular committee—and that is very important—and of the need to state the nature of the interest. For a long time we have had close rules about contracts but we now have in relation to planning permission a far more difficult matter than in relation to contracts. As my noble friend Lord Cromartie knows, the values involved in planning permission can be colossal.

My approach to this problem is this. The great majority of people who go into local government are perfectly honest people. We have a duty to see that no temptation comes to them that would divert them from the standards they held before they went into local government. We should make it as difficult as possible for anyone to transgress. The second side, which is just as important, is that the public should know that members of local authorities would have the utmost difficuty in doing anything to their own advantage. I believe that the wording which Lord Hughes has used is good wording. I am not going to say that it cannot be improved—probably the Government can do something about that—but the lines are sound, and I hope the Government will accept the Amendment or undertake to produce something closely parallel to what is intended by it.

LORD BALERNO

I should like to support the Amendment moved by the noble Lord, Lord Hughes. So far as I recollect, I was the only speaker on the Second Reading of this Bill who drew attention to the state of affairs which is occurring in Scotland at the present time and which probably has been going on for a rather longer time than we suspect. I then particularly welcomed Clause 40 which I think meets a great many of the points raised in this debate. It is that a book should be kept in which members of authorities will record their own and their spouses' interest in any particular subject and that this book will be made available for examination by any local government elector. I welcome what the Government have done in this matter. I am sure that when it is appreciated that it exists, it will be very widely welcomed throughout the country. I am grateful to the Government for what they are doing—and to put a little extra polish on it, Lord Hughes' suggestion is a very good one.

THE EARL OF BALFOUR

I, too, would support this Amendment. I think that Lord Hughes has raised a vitally important point. So far as Amendment No. 60 is concerned, I feel that there may be either a declaration of the nature of the interest or possibly—and I should like Lord Hughes to consider this—that the member simply leaves the meeting. It might not be strong enough; but on one or two occasions I have been involved in such situations and whenever a matter has arisen in which I have an interest I have just left the meeting. I refused to discuss anything about it with anybody. It once happened over something which was then a little embarrassing (and is so to-day) and I should not have liked to resign from the council because of this one item. I backed right out of it; I had nothing to do with it. If that was possible, it would achieve a lot of points. A matter to which I have strong objection is that of a member who might be quite a senior employee with a building firm being present when a building contract comes up to be discussed. I feel that that person at that meeting could gain information that an outsider could not get. That is wrong. That person should not have attended the meeting. I must say I am grateful to the noble Lord, Lord Hughes, for putting down this Amendment. I am sure we all feel that the tighter we make these regulations the better.

LORD BURTON

I agree that this Amendment has much to commend it. I am a little worried, however, about the words, "If it comes to the knowledge of a member". It will not be very easy to know whether a member did or did not know about the matter in question. It could be said that he should have known about it if he had read all his papers. But he may not be on the committee. We all know that we shall have a great deal of paper work to read, and it may be that he did not know about the matter. I do not want to interfere with the Amendment, but I feel that the question of whether he did or did not know about it should be looked at.

LORD HUGHES

I was not too happy about these words, but I adopted them because they are the form of words in the Bill in relation to an officer. This seems to me, in one sense, to be quite satisfactory because a comparatively minor matter could arise which affected an individual—an indirect pecuniary interest—and he did not know it had taken place because it was so insignificant. In such circumstances, we must give a man the benefit. It would obviously be a defence to say: "I did not even know that it had come up." This is why I think in the case of an officer, and in the case of the member, the matter is conditional upon the words "If it comes to his knowledge". We are really concerned here to ensure that no councillor or official on a matter of substance enables something to be done for his benefit by concealing information which might change the position if the council were aware of it. That is what we want to prevent.

I cannot believe that any member or official of a committee, with something of that kind coming up, would not know about it. The noble Earl, Lord Cromartic, referred to large building contracts in the oil industry. Just imagine a contract running into some hundreds of thousands, if not millions, of pounds and a director of a company saying: "I did not say anything about it because I did not know about it." Some people might believe that; but if they did, they ought not to be members of local authorities—which brings in another point, whether a man is of sound mind if he believes that sort of thing.

I look forward to hearing what the Minister has to say on this matter. I honestly believe that the Bill does not go far enough. I want to emphasise the fact that it is my opinion that the number of people in local government who are doing things that they ought not to do is a very small proportion of the total. Any tight piece of legislation of this kind will not affect or worry the great mass of individuals, because they are never going to be doing anything which might be an infringement of the law. Most of them will have no interest to conceal at any time; and most of them, if they have an interest, remote or otherwise, are only too ready to make it known. They do as the noble Earl, Lord Balfour, does—it is the commonest procedure: they say exactly what the interest is, and then go away. Nobody is then under any misunderstanding. That is not what we are concerned about. We are concerned about the individual who is trying to do the wrong thing, and we want to make it as difficult as possible for that individual to get away with it.

THE EARL OF PERTH

On that last point, raised by the noble Lord, Lord Hughes, and also by the noble Earl, Lord Balfour, I do not think the draft, as it stands, ensures that a man might have to go away. Clearly there are occasions when he ought to be asked by those present to go. I should hope that that would be taken into account in any drafting. The wording is merely that he should declare his interest, and not take part in the consideration, and so on. That is not enough. I should hope that we could so tighten up the draft that it would be open to the authority to say: "Please leave the room" rather than that he should sit and listen.

4.56 p.m.

LORD DRUMALBYN

The more I have listened to what has been said, the more I am convinced that everybody wants the same thing, but that it is a very complicated matter. I am quite certain that we all want to achieve what the noble Lord, Lord Hughes, has indicated. We want to see that not only the opportunities for somebody being able to use his position to bring decisions his way should be avoided, but also that people should not be allowed to use the council, so to speak, as a means of obtaining early information. There are those two aspects. I am not entirely in agreement with the noble Lord, Lord Hughes, in equating the position of the member with the officer of an authority, because the essential difference between them is that the officer has no opportunity to declare his interest, as he does not normally attend meetings unless he is the clerk, the adviser to a particular committee, or something of that kind.

As to the first point, that of declaring the nature instead of merely the fact of an interest, so far it has been considered sufficient to declare the fact and to remain silent, and not to leave the discussion. Declaring the nature gives rise to certain tricky little problems. Do you have to declare the full nature every time there is a discussion on the particular matter? With what degree of accuracy and detail must you declare it? There are difficult little points like that, and I am bound to mention them.

On the general point I think my noble friend Lord Balerno gave the reason; namely, that we have left it as the fact, so far, because we have introduced Clause 40, which provides optionally for the full disclosure of interests to be recorded and to be available for public inspection. So that not only will the clerk have notice in advance of any interests of members that they have disclosed, but so will the other members present. I have certainly found in another place that my fellow Members were quick to draw attention to any failure to disclose a known interest on the part of any Member of the House. It is more difficult to secure a disclosure of an interest that is not known. But here, of course, tied to subsection (1) is the sanction of a fine not exceeding £200, unless he did not know that the contract was the subject of consideration at the meeting. There is there the need to declare the fact, coupled with the fine. There is, furthermore, the register, which can act as a permanent notice to everybody of the interest in question.

I am not absolutely certain that we should be justified in making this change, or that if we did this would be the right way to go about it. I think I should draw to the attention of your Lordships the fact that the Prime Minister, speaking in another place on May 3 of this year, referred to the general question of a code of conduct in public life, and said that he was studying the part relating to local government. So the whole question of a code of conduct is under consideration. It may be that your Lordships, while sharing the views of everyone who has spoken to-day, may feel that in anticipation of this general consideration it would be a mistake to make a change at this time.

As I have said, I think we are all in sympathy with the general intention of the noble Lord, but I think it would be a mistake at the present time to make up our minds definitely. It may be that we shall be able to make further progress before the next stage, but my guess would be that it would take rather longer than that and that we should try to get simultaneous changes in England, Wales and Scotland.

LORD HUGHES

I can appreciate the point about the general view, and obviously it is desirable that the same sort of conditions should apply throughout the whole country. If that decision is known before we come to the next stage and if the code has been worked out, obviously the way will be clear for the Government to submit such Amendments to the Bill as will fit in with the code. Because I am quite certain that if a code of conduct for local authorities is produced and goes no further than this Bill, the Prime Minister can prevent a lot of time from being wasted by many people, because they need not look at it any further if that is all that is going to come out of it. But if something more effective is to take place, then obviously we ought not to wait for a change in the English legislation before we take the opportunity of doing something about it in Scotland. After all, it would not be the first time that Scottish legislation has set the pattern for what is subsequently done South of the Border—though in present circumstances we find that once the English decide to follow our example we then decide to go back to what we were doing before, as for instance we are doing with water.

If it is not possible to do some tightening up of procedure under the Bill, would the Minister consider with his right honourable friend the possibility of taking administrative action by circularising local authorities and giving guidance on the way they feel this should be done?—for instance, making it quite clear that just getting up and saying, "I beg to declare an interest", is not what the Government expect to be done, because such a statement is of no use whatever. If the Minister is willing to look at these points, then I shall be happy to ask leave to withdraw the Amendment.

THE EARL OF BALFOUR

I should like to say just one or two words. If a guide could be given to setting a first-class standard for local rules for a local authority—such as our own Standing Orders, for example—I think this would go a long way.

LORD DRUMALBYN

I am most grateful to the noble Lord for making two very valuable suggestions. I shall most certainly respond to what he has said to see whether between now and the next stage of the Bill these are practicable.

LORD TAYLOR OF GRYFE

I am sorry to delay your Lordships on this matter, but I wonder whether, following the suggestion of the noble Lord, Lord Hughes, that some administrative guidance might be given, in the declaration of interest we should define the nature of the interest. Shareholding is becoming rather dispersed, and it could be that people have a fairly remote interest in a particular matter. I think even the area of the Co-operative Society's involvement is one that might be covered by such administrative guidance.

LORD HUGHES

But is this not covered in the following clause. Clause 41(6), where the interest is in fact such a small one that it does not disqualify a person?

LORD DRUMALBYN

Yes. I think what the noble Lord, Lord Taylor of Gryfe, was referring to was a dispersal of an interest. If one has an interest in, say, a unit trust which again has a certain holding, it is difficult to determine exactly what that proportion is. The matter may perhaps not be as simple as that, but it illustrates the problem.

LORD HUGHES

This clause refers to cases where a holding does not exceed £1,000 or one-hundredth of the total nominal value of the issued share capital in a particular unit trust. There are not many people who own more than 1 per cent. in a particular trust. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD BURTON moved Amendment No. 63: Page 20, line 16, leave out ("£200") and insert ("£500 or 6 months in prison or both").

The noble Lord said: Here we have a derisory penalty of only £200 for corruption. We discussed this subject at our county council meeting last week and it was unanimously agreed that this was a ridiculous penalty. It is absolutely no deterrent and I feel it is very important that the punishment should be made to fit the crime. This question was also discussed in another place and a much larger penalty was suggested there than I have suggested. I would not be against that. The arguments given for not accepting it were that we should not be different from England. The noble Lord on the Front Bench has just had a reply on that point from the noble Earl, Lord Selkirk, and I was also glad to hear the noble Lord, Lord Hughes, rebutting it just now. There seems to be no reason why in Scotland we should not have something different from England, particularly if we are im- proving the Bill—and this would undoubtedly improve it.

The other reason that was given was that there was no demand for a higher penalty. During the course of the last year, since the English Bill went through, some extremely unsavoury cases have come to light. In particular, there is one in which a penalty of £200 would be absolutely ridiculous. Therefore I beg to move that the penalty should be increased to £500—and if any noble Lord wishes to propose more I should be only too happy—or six months in prison, or both.

LORD HUGHES

My noble friend, Lord Hoy, has given me a very good reason for making it more in Scotland than it is in England: if it is £500 in Scotland and £200 in England we may encourage all the corrupt people to go South of the Border.

LORD DRUMALBYN

I certainly would not rely on the argument in this case that we should not do anything different from England. I think the point of the argument, so far as people coming in from abroad or committing offences abroad are concerned, is rather different from the point we have here. There is a different quality about that argument. We should bear in mind that the offence here is not the offence of corruption but of failure to disclose an interest—which may be quite a different matter—or else the offence of taking part in a consideration or discussion of a contract as well. There are of course separate penalties under the Prevention of Corruption Act. The actual offence of corruption is governed by the Act, under which on conviction on indictment it is possible to get two years' imprisonment or a fine of £500, or, on a summary conviction, four months' imprisonment and a £200 fine. On that basis, I think that my noble friend would agree that it would be out of proportion to make it a £500 fine for simply failing to disclose an interest.

LORD BURTON

If my noble friend can assure us that if someone failed to disclose an interest when he obviously should have done and it would therefore come under this different Act which he has mentioned, then I cannot see any point in having this particular clause in the Bill. I should like to have an assurance that it would be possible to prosecute him under the other Act. If that is so, perhaps the noble Lord would consider withdrawing this clause.

LORD DRUMALBYN

We are talking of a totally different offence. One may fail to disclose an interest without actually doing it corruptly. If one is doing it corruptly, then it would be a matter for consideration by the authorities whether or not to prosecute for corruption. We are concerned only with the offence specified in subsection (1).

LORD BURTON

I thank my noble friend for that explanation, which I am sure will relieve the anxiety of a good many people. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 38 agreed to.

On Question, Whether Clause 39 shall stand part of the Bill?

5.10 p.m.

LORD HUGHES

I should like to ask some questions about Clause 39. Subsection (2) says: Subsection (1) … does not apply to membership of or employment under any public body, and a member of a company or other body shall not by reason only of his membership be treated as having an interest in any contract, proposed contract or other matter if he has no beneficial interest in any securities of that company or other body. I am foxed by what is meant by this. How can a person be a member of a company without having a beneficial interest in its security? I can think of one exception—a charitable body which is limited by guarantee, not having a share capital. I am a member of such a body, the Help the Aged Housing Association, in Scotland. That is a limited company not having a share capital. Is that what is meant by being a member of a company, but not having a beneficial interest in any of its securities?

The second point is in reference to paragraphs (a) and (b), which say:

1. "(a) he or any nominee of his is a member of a company or other body with which the contract was made or is proposed to be made or which has a direct pecuniary interest in the other matter under consideration; or
2. (b) he is a partner, or is in the employment, of a person with whom the contract was made or is proposed to be made or who has a 1194 direct pecuniary interest in the other matter under consideration."

Is a director of a company an employee in terms of Clause 39(b) and, in terms of that, does "a person" include a company or other body?

LORD DRUMALBYN

The answer to the second question certainly is, "Yes"; and I think the answer to the first question is also, "Yes". May I explain the situation, because this is a clause which starts with a wide provision in subsection (1) and then narrows it down in subsection (2). Subsection (1) covers, in effect, the case where the member, or any nominee of his, is a member of a company or other body which has a direct pecuniary interest in a contract or other matter, or the member is a partner or employee of a person with a direct pecuniary interest in the contract. These interests can arise where the member is a shareholder of a company (including a co-operative society), a trustee or a member of a society or club. Your Lordships can see how wide it is. The subsection also covers partnerships—for example, where members are in professional practice—and employment in a firm of any size. By virtue of the Interpretation Act 1889, an employee of a person includes an employee of any body of persons, corporate or incorporate.

Subsection (2) goes on to qualify subsection (1) by excluding membership of or employment under any public body and membership of a company or other body where the member has no beneficial interest in any securities of the company or body. "Public body" is defined by Clause 42—

LORD HUGHES

I am not concerned about a public body.

LORD DRUMALBYN

I am trying to put the matter in perspective. A public body, as defined by Clause 42, includes nationalised industries and undertakings, and governing bodies of universities and similar institutions.

A member may have both a direct interest under Clause 39(1) and an indirect interest under Clause 40 in the same matter. An employee may have an interest in a proposed contract because it is with his firm (that is an indirect interest) and also, because it would mean overtime for him, a direct interest. If he has a direct interest he will be caught by Clause 39 because of the great width of subsection (1). Subsection (3) brings in a third class of interest through another person. This is the main burden of the provisions here. It is a matter of fact in any particular case whether there is a direct or indirect interest, and it is not always easy to distinguish it at first sight. I am speaking without being briefed on this matter, but I imagine that this is one of the difficulties in disclosing the nature of an interest, because the mere nature of an interest itself might not fully disclose the reality of interest in the particular case.

LORD HUGHES

The Minister has answered all but one of my questions. He has not told me what is meant by a member of a company who does not have a beneficial interest in any securities of that company. I may be wrong, but I thought that a "member of a company" and a "shareholder of a company" were interchangeable terms.

LORD DRUMALBYN

"Securities" is a wide term; it covers any kind of debenture, ordinary or preference shares, or anything else.

LORD HUGHES

How can a person be a member of a company if he does not have a beneficial interest in any of its securities? A director is not a member; a man can be a director of a company without having any shares. He is not a shareholder, therefore presumably he is not a member of that company. That is what I want to get at.

LORD DRUMALBYN

He might be not merely a shareholder, but a trustee as well. I understand that this is the situation. I do not think membership of a company is used, in the widest sense, to include employees. I think it relates to a member of a company in the technical Companies Act sense.

LORD HUGHES

I am sorry, but I am still not getting an answer. I am being told what he may not be; but I want to know what he is. Can the Minister of State help? He is an accountant and ought to know from his own professional experience rather than his Ministerial knowledge.

LORD POLWARTH

Certainly one category coming under this description would be a person holding shares for another person's beneficial interest, for instance as a trustee or nominee. That is a common state of affairs. So far as I know, that is the main category covered by this Amendment.

THE DUKE OF ATHOLL

Did I understand my noble friend to say (I think I must have misunderstood him) that because of Clause 39(2) someone would not be caught by Clause 39(1) if he had no beneficial interest in the company? He might well be a director of a company, but not hold any shares in it; in which case I should have thought technically he had no beneficial interest, particularly if he was an unpaid director.

LORD DRUMALBYN

He is either an employee—and some directors I believe could be employees—or he is a member as a director.

THE DUKE OF ATHOLL

I thought that subsection (2) over-rode subsection (1); that is what worries me. But I do not think we can argue the matter now.

LORD DRUMALBYN

I do not think subsection (2) over-rides subsection (1). It is simply a clarification of it.

Clause 39 agreed to.

Clauses 40 to 43 agreed to.

Schedule 7 [Meetings and Proceedings of Local Authorities]:

THE EARL OF SELKIRK moved Amendment No. 66:

Page 165, line 39, at end insert— ("Such standing orders will make provision whereby members of the council will be informed on request of any matter for which the Council has responsibility or on which funds have been suspended.")

The noble Earl said: I beg to move this Amendment to ask a question. The local authorities write their own rules of procedure: I think they generally get a model which the Government show to them. May I ask what assurance councillors have that they are informed on questions which they ask? I certainly know of one case where this is a matter of discretion of what is sometimes called "the Establishment". I am wondering whether it is desirable to make some provision in the Bill that councillors themselves are entitled to information on matters with which the local authorities are concerned and on which they spend money. In some ways this is more important than Clause 44, which deals with the Press, and I should like to know whether the Government can give any assurance that councillors or members of a council or any local authority can be given such assurance or such rights.

LORD DRUMALBYN

As I am sure my noble friend will be aware, it is not the case that a councillor has a right to demand information which is or ought to remain confidential. So there is already that exception. So far as we know, there is no great or continuing difficulty arising out of this matter, although there may be the odd difficulty that arises every now and again. But it would be difficult to lay down by Statute a general right without impairing the right to preserve information which ought to remain confidential. If my noble friend could bring to my notice any wide range of cases where there has been a failure to provide information, then I think there would be a case to argue here, but at the moment it is difficult for me to see how we could justify Parliament's intervening in a matter which is essentially a matter for standing orders, as my noble friend has said. If he has information it might be, as he said, possible to deal with it by circular in so far as it has not already been dealt with in that way.

THE EARL OF SELKIRK

I accept what the noble Lord says. This is really the point. If there were a case like this, what could the noble Lord do? So far as I know, the Scottish Office could do nothing. I am only saying that, unless something is put into the Bill, they will have no power to interfere at all with the procedures which are drawn up by the local authority. This is the point I am making. The noble Lord refers to a circular, but I do not think that would be of any use. If the noble Lord does not want it, I will not press him; I am only asking him to think about it. I think it is a fundamental right of councillors to be informed, and I was wondering whether some words to that effect should not be included in the Bill itself. However, in view of the noble Lord's answer I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule 7 agreed to.

Clause 44 [Admission of public and press to local authority meetings]:

On Question, Whether Clause 44 shall stand part of the Bill?

5.24 p.m.

THE EARL of SELKIRK

I am moving the exclusion of this clause to see whether I can persuade the Government to write a clause that is comprehensible. I have done my best to understand this clause and I have read the Act of 1960; but I am not very much wiser. It is extremely obscure. The 1960 Act deals with a number of other authorities—health authorities, water authorities and others—which are not wholly connected with this. I should have thought that local authorities were entitled to a clear clause on how they stand in relation to the Press. I myself am not clear on how they stand at the present time. I think that any meeting of a local authority, whether it be the full authority or one of the major committees, must allow the Press to come in and must inform the Press, unless a resolution is passed—I am not clear by whom; whether it is by the committee or whether it be by the local authority itself. Nor, may I say, am I wholly clear about an extraordinary provision—Section 1(1)(c)—in the 1960 Act, which changes the rule if there is a public telephone on the premises not belonging to the local authority. Why the existence of a public telephone should make any difference, I cannot state. But the point I am trying to make is this. Can we not have a clause clearly stating how the matter stands? This is not unimportant, and this clause is very difficult to understand as it is at present drafted.

BARONESS ELLIOT OF HARWOOD

As the person who took the 1960 Act through the House of Lords (it was a Private Member's Bill, started in the House of Commons by the present Minister of Education, Mrs. Thatcher, and I was asked to take it through the House of Lords in 1960: it is the only Act taken through both Houses by ladies), I wish to defend it and also the particular paragraph. It is perfectly clear to me that that provision was passed in order that there should be no dubiety about meetings being open to the public and to the Press. Before that, there were meetings of county councils and committees, and so on, from which the Press were excluded. This caused a considerable amount of anxiety, and I think bad blood on occasions at these meetings. This Bill went through both Houses and the Act has now been working since 1960. I have seen it working very successfully in the councils on which I sit. The Press are of course admitted; the public are admitted. If there are times when one has to debate something in private someone can move that the Press be excluded. It is obviously reasonable to have a private debate on an individual person or an individual salary or on something the members do not want the Press to know about. In such a case the Press can be kept out. Otherwise they are present. I hope very much that this principle of allowing the Press and the public to come to meetings of councils will not be altered. I am bound to say that I do not agree with my noble friend Lord Selkirk that this provision is obscure, since it operates very well as part of the 1960 Act.

THE EARL OF MANSFIELD

I do not share the anxieties of my noble friend Lord Selkirk over this clause. It repeats almost word for word what became Section 100 of the English Local Government Act, and that itself was the subject of a fairly long and interesting debate in your Lordships' House. The actual clause was spewed out in the other place in the middle of night on Report. It was originally the product of the very last gasp of a Standing Committee—the very last Amendment which the other place made to that particular Act, as it now is.

The general principle, as I understand it (and I am sure that my noble friend on the Front Bench needs no help from me), is that the Press will be admitted to all deliberations of a local authority down to sub-committee level; that is to say, all meetings of the council or the authority, and all committees, but not sub-committees. I do not suppose there are many of your Lordships who would dissent from this principle. Previously, meetings of committees were held in private. But where a number of us were extremely concerned over this particular section—Section 100, as it became—was in regard to committees to whose deliberations, by the very virtue of their constitution or the type of matters they discuss, it is undesirable that the public or the Press should ever be admitted. I am thinking now of a committee which deals perhaps with staff appeals. I am not going to weary the Committee with a long list of other examples, but any of your Lordships who are in local government will readily appreciate them. There is no possibility of a staff appeals committee's ever admitting the Press or the public in their deliberations.

There were two subsections which were deleted in Committee from the English Local Government Act in your Lordships' House and which rendered it within the powers of a committee, acting properly and according to the laid down procedure, to exclude the public and the Press for a period of twelve months from all its deliberations. Unfortunately, the debate in your Lordships' House really centred on whether the Press and the public should ever be admitted to all meetings. Be that as it may, my noble friend Lord Sandford, who on that occasion conducted matters on behalf of the Government, undertook to continue thinking about the matter—I think that is the way to describe it. What I should now like to ask my noble friend is whether, to his knowledge, in England there have been further thoughts and whether those further thoughts have produced anything. In this particular instance, it is not so much a matter of principle because I think all of us are agreed that the maximum publicity, where proper, must be given to everything that a local authority does. It is a matter of procedure, to tie up, as it were, the procedures which should be adopted where a committee is never going to discuss matters that should be ventilated through the normal media of publicity.

LORD DRUMALBYN

I am afraid that I am not in a position to tell my noble friend Lord Mansfield exactly what progress has been made in the consideration of this matter in England and Wales. I am sorry if my noble friend Lord Selkirk finds it difficult to understand this particular clause. I wonder whether it would help him if he knew what it meant to start with, because sometimes when you know what it means to start with you can understand it better afterwards. So if I may tell my noble friend what it is intended to mean, it may help him. But let me say first that the purport of the 1960 Act is that, in general, meetings of the local authorities and certain similar bodies—that is to say, the list of bodies given in the Schedule to the Act—are to be open to the public; and the exception to this general rule is that if the authority resolve, for reasons of confidentiality or other special reasons, to exclude the public they may do so, but they are obliged to live reasons for the exclusion.

The object of Clause 44 is mainly to extend the scope of the 1960 Act to all committees of the authority as well as the council itself. My noble friend Lord Mansfield is quite right there. It also forestalls a device which has been used to evade the spirit of the 1960 Act so far as the council is concerned; namely, that of dropping one member of the council from the meeting and to declare the meeting to be a committee, which, not then being a full council, does not fulfil the conditions of the Act. Clause 44 brings all committees, however constituted, within the ambit of the Act, so that in every case if it is desired to exclude the public, which also means the Press, they may do so, but they are obliged to give reasons for the exclusion.

As to the question of telephones, as the Press need to communicate immediately the contents of their notes, and so on, to their papers, it is thought reasonable that they should have acccess to telephones on the premises for the purpose, and where there are joint committees, or where the premises belong to the local authority or one or more local authorities appointed to the committee, they shall be treated as belonging to the committee. So the purpose of this is to extend the whole thing to the committee for the purposes of the Act and put the access to committees on exactly the same basis as access to councils at present.

THE EARL OF SELKIRK

I was in Singapore when the noble Baroness piloted the Bill about which she spoke, and I apologise if I was not aware of the fact that she was the sponsor. I think I did not know what it meant in the first place, but I am bound to say that, although it may be easy for the noble Earl, Lord Mansfield, to understand, I do not think it is easy for other people who are immediately concerned with it. My whole point in raising it was to try to persuade the Government to write into the Bill what I understood to be the position. If they do not want to do it I do not mind very much.

LORD DRUMALBYN

I think my noble friend has made a point here at which we should look, because if it is not clear to him perhaps we should look at the clause to see whether it can be made more clear.

THE EARL OF SELKIRK

I thank my noble friend.

Clause 44 agreed to.

Clause 45 [Attendance allowance and financial loss allowance]:

LORD STRATHCLYDE had given Notice of his intention to move Amendment No. 67:

Page 23, leave out line 25 and insert:— ("(1) Members of regional councils shall be paid a salary. Members of other councils").

The noble Lord said: As there are other Amendments on the Marshalled List with the same object in view, I do not now intend to move this Amendment.

5.35 p.m.

THE EARL OF CROMARTIE moved Amendment No. 68: Page 23, line 25, at end insert ("other than a councillor for a region").

The noble Earl said: With your Lordships' permission, as this Amendment leads on into my Amendment No. 70 I shall take the two together. This is a difficult position. I realise this because I have spent a good many years thinking about it and have only recently come up with what I believe to be my final decision. It is a matter for the consideration of your Lordships and also it is in the interests of that much abused word "democracy". I fear that in the great area of the Highland region, where lack of transport facilities and sometimes climatic conditions are quite dissimilar from the smaller Southern regions, the less affluent would-be candidates might be discouraged from standing. As I mentioned during the Second Reading debate, there could be a danger of regional members, who in any case will be occupied on local government business for many days in the month, holding unnecessary meetings at the expense of the ratepayer. I do not say that this would necessarily happen, but it could happen. In the change of local government, conditions in which we have served for many years are radically altered and I, with others, have come to the conclusion that the answer is that regional and not district councillors should be paid. I beg to move.

LORD POLWARTH

Before other noble Lords intervene, I think I should be right in saying that as there are several subsequent Amendments dealing closely with the same subject with only small variations we might be in order if those noble Lords interested in them took the opportunity to debate the subject in general on this first Amendment.

LORD TAYLOR OF GRYFE

I am delighted to acept the suggestion of the noble Lord, Lord Polwarth, that these matters might be discussed together, because they raise a very important principle in connection with the future of local government. The issue that is at stake here is very clear; namely, whether we should pay members of local authorities or whether they should be provided for by means of attendance allowances. I suspect that if this enactment were passed, the Secretary of State for Scotland, whose duty it would be to decide on the rate of the salaries to be paid, would look at the situation so far as the responsibilities are concerned. The noble Earl, Lord Cromartie, has indicated his concern for the Highland region. I am also concerned with the fact that the Strathclyde region will be responsible for 2 million people and the responsibilities of a regional councillor in Strathclyde are very considerable. In fact, my Amendment would permit the Secretary of State for Scotland to extend the principle to other members of local authorities. If we take the Glasgow district council prior to its reduction in size as from yesterday's date, if the council was responsible for more than a population of 1 million it may be that in discharging his responsibilities the Secretary of State would look at the whole field of service in local government and make decisions appropriate to the responsibilities of regions and districts.

The Amendment does not state any sum and I think this is appropriate, for the reason I have just suggested. It is a fundamental principle of democracy that all men and women who wish to give public service should be available to give public service without penalty. I suggest that the arrangements whereby they are given the expenses and allowances, plus the day-to-day allowances mentioned in the Bill, are less attractive than being paid a straight salary. It may be said that people will be available for this service who are already in receipt of substantial salaries from other duties. In that event, the salaries would attract a tax liability and so the State would recover a substantial amount of the additional salary paid to people in that position.

I have had some experience of local government in the city of Glasgow. I was a fellow-councillor with the noble Lord, Lord Strathclyde, for a number of years. The problem of people claiming on local authorities for expenses and so on has always been a very difficult one. In this particular case we are getting away from the old loss of earnings claim, and I am glad that this is so. I think to receive a salary for the job carries with it much greater status than to receive so much per attendance. As the noble Earl, Lord Cromartie, has said, there is a tendency, perhaps a human weakness, that if you are paid so much per day or per attendance it is quite easy, particularly if so much of your time is taken up in local government, to make it almost a full-time job and to have six meetings where perhaps two might have served. That is a danger if an attendance allowance is paid—and it is a very real danger.

Therefore, I suggest that it would be much more in keeping with the status of the job, and it would make for better government, if we were to pay a straight salary. I know that at present there are people who are serving in local authorities, who have to get time off to do so and whose salaries are reduced accordingly because they are of little value to their employer. I know from cases in the organisation with which I was associated that this is so. There is a further penalty on people, because their superannuation and pension expectancy is based on a much reduced salary. If we paid a straight salary it might be better. We are initiating new government here and we want it to be better government. I suggest that this principle might be a contribution to better government.

LORD STRATHCLYDE

I rise to support the Amendment just moved. If I may say so as a preamble, it seems to me that if we are to obtain the highest possible level of efficiency in local government it is surely necessary that we should encourage and succeed in attracting to serve as councillors capable men and women from social and financial backgrounds who can give service of the highest quality. I think it is now generally accepted that councillors should receive payment for their services and that they should be able to recover in addition inescapable out-of-pocket expenses. The Bill proposes that payment should be in the form of attendance allowances and financial loss allowances. I strongly support this Amendment as against the suggestion in the Bill.

I want to point out the differences which arise and what should happen. The Amendment states that payment should be by way of salary, and for this reason it seems to me that prospective candidates should be quite aware of how their finances are going to be affected on their becoming councillors. If they are partners in a professional firm, or in some form of business, their partners will wish to know to what extent the finances of the firm will be affected before giving permission to their partner to undertake this public service. Where the payment is by salary no difficulty is likely to arise, for most partnership agreements stipulate that all the earnings of the partners are paid into the firm. On the other hand, where payment is by attendance allowance there is a temptation—I put it no higher than that—to prolong business and to multiply meetings and the number of attendances available. Where salary is paid there is no such temptation. Business will be expedited; everyone will want it to be dealt with in a businesslike way and as speedily as possible, and meetings will be kept to the minimum number necessary for the proper and efficient conduct of affairs.

It is only in these circumstances that active men and women, busy and usefully employed elsewhere, will be attracted to serve as councillors.

Let me say that there is another advantage in the payment of a salary. It is that by expediting business it will allow highly paid officials to spend more time in their offices dealing with council business instead of interminably attending meetings. As this is a matter of great importance, I believe, in getting the proper people to serve as councillors, I hope that the House will support the Amendment which has been spoken to by the noble Lord opposite, and that my noble friend on the Front Bench will find himself able to accept it.

LORD STRATHEDEN AND CAMPBELL

This is an extremely difficult problem. When I first gave evidence to the Wheatley Commission, some seven or eight years ago, I opted for an attendance allowance, but at that time the whole matter was very much in the air; there had never been any question of paying county councillors or local government councillors at all. Having considered it further, after a great deal of thought I am now in favour of the Amendment proposed by the noble Lord, Lord Taylor of Gryfe, with one condition, which I think makes it extremely difficult to accept: that there must be a different salary paid to the councillor for the Strathclyde region from that which is paid to the councillor for the Borders region. There is no comparison at all in the amount of work which will be involved in those two jobs. I do not know why that cannot be done. It is perfectly competent, I should have thought, for the Secretary of State, who will have to lay down the amount of salary anyway, to lay down the amount of salary either on a per capita basis or in some such way so as to make it a fair and reasonable salary for each of the different regions. I support the Amendment of the noble Lord.

5.49 p.m.

THE EARL OF BALFOUR

I should like to say a few words in opposition to the payment of a salary. First and foremost, we have an excellent example in this your Lordships' House: that is, that democracy will work only if the ordinary man is prepared to give up his own free time to make it work. If he has not got that free time, he should not stand as a councillor anyway. Furthermore, let us consider what has really happened.

LORD TAYLOR OF GRYFE

I am sorry to interrupt the noble Earl, but is not the point that he can then make free time if he is paid a salary, whereas if he is not paid a salary, if he is in employment from nine to five, he cannot have the free time necessary to discharge this duty?

THE EARL OF BALFOUR

In reply to the noble Lord, Lord Taylor of Gryfe, if a person does suffer loss of earnings there are special provisions in this Bill, as there were in the 1947 Act, that the employer must give him time off to attend to council duties; also, as an employee, he gets the loss of income allowance, which I must admit is not nearly generous enough. But there are such provisions, and so far as I know they work quite well. To the best of my knowledge, even in the big cities the position of Lord Provost is not considered as a full-time appointment. He is not expected to be on duty every day of the week. In future, the cities will become second tier authorities with less work to do. Equally, we shall be in the position of having the whole of local authority functions divided in half, roughly half going to the region and half to the district; so that in many ways, certainly at district level, there will be less work to do as a councilor than there is at the present moment. Now a local authority councillor deals with all the functions—education, roads, planning, and so on.

I should like my noble friend to consider a generous allowance on a daily basis, paid roughly in the same way as that in your Lordships' House is paid, and not something for the forenoon and something for the afternoon or on an hourly basis, which will not work. Those people who have a lot of travel and work to do, such as chairman of the education committee, or Provost, should be provided, out of the expenses of a local authority, with a car which they can virtually call their own for as long as they hold the job, together with a full allowance for telephone and other expenses which I feel should be covered. I am quite certain that if we pay councillors we shall attract the wrong type of people into local government. I am certain that England came to the right conclusion when they rejected payment of councillors, and I am certain that an attendance allowance on a generous footing is what we need.

Finally, if we decide that there should be a salary, is it going to be the same salary for every regional councillor, whether he is the convener, chairman or an ordinary councillor, whatever his duties may be? If that is so, we shall get into serious difficulties. The moment the word "salary" is mentioned we come up against income tax, and the councillor may end up poorer than he is now. Do let us remember that any ordinary attendance allowance is not subject to the filling in of income tax forms or anything else; it is classed as out of pocket expenses.

THE EARL OF CROMARTIE

Before the noble Lord sits down, he did suggest giving cars to councillors? I know he lives in a rather more confined space than I do. Does he suggest that those councillors to the Islands authorities should be given a yacht?

LORD STRATHEDEN AND CAMPBELL

Again, before the noble Lord sits down, can he enlighten me further? He says that this attendance allowance is not liable to income tax. I understood that it is and that it is treated as ordinary income.

THE EARL OF BALFOUR

Not to my knowledge.

THE EARL OF MANSFIELD

I am bound to say that I find the purpose of this debate most difficult to follow. As I understand it, the Government are committed to providing some sort of remuneration for those who are engaged in local government. Also, as I understand it, the remuneration is to be on the basis of money received for part-time work, and it is to be taxed. This is no loss of profit allowance which is not subject to tax. As I understand it, certainly the English Local Government Act is on that basis. Therefore I find it difficult to understand why noble Lords are so passionate in regard to a salary which is taxed rather than allowances which are also taxed. Equally, my noble friend Lord Cromartie might care to reflect on whether it is better for the taxpayer to have councillors who are straining to have more meetings in order to get more allowances, or to have persons elected to the council who take their salaries without turning up to any meetings. It seems to me that there are points in favour of both those views.

I have had certain experience of this by virtue of my membership here and of the European Parliament, and I would come down on the side of allowances. I am bound to say that we argue about almost everything in six languages, but I have never yet heard anybody suggest that we have more meetings in order that our £22 should be increased. On a more serious note, I hope that members of local authorities would really not be so low as to occupy themselves with that aspect. I should have thought that if the Secretary of State, and indeed the local authorities working together, combined to make a scale of attendance allowances—which is not merely like that of your Lordships' £8.50—which is reasonably generous to take into account the work which councillors will have to do through their constituencies, not just the cost of attending meetings and the cost of missing their work on that day or whatever happens to be the case: a fairly generous attendance allowance, but not a full-time salary—it would then, I think, be up to the individual councillor to attend meetings as often as he can and he will duly claim the money in relation to each meeting he has attended.

5.57 p.m.

LORD HUGHES

I find difficulty in knowing what I want to do on this proposal in the absence of any information from the Government as to what the attendance allowance is going to be. Circumstances could arise where obviously a councillor would feel that, if the attendance allowance was sufficiently generous, he could give all the service that was needed without in any way having to arrange extra meetings in order to get more money. The noble Earl made reference to the £22 for members of the European Parliament. One wonders whether they are not out of pocket every time they attend, whether it is sufficient to give them a profit, whether they might want to spin it out there, too. The argument in relation to councillors is that if the allowance was generous, and therefore was profitable, there might be needless meetings. I rather agree, but I do not think that this is likely to be a serious factor.

There is a difficulty about salaries—and I must say that I start off with a preference for salaries rather than allowances—but the Amendment which my noble friend Lord Taylor of Gryfe has moved tries to take account of this particular difficulty, namely that the nature of the duty will vary enormously from one authority to another. Some of the very small districts in the Highlands which have had to be created because of the great distances involved may have many fewer meetings than, for instance, a district of Glasgow. My noble friend's proposal would make it possible for the Secretary of State to fix different salaries for different councillors in different regions. While this would be possible, I certainly should not like to be in the shoes of the Secretary of State if he were to say that a regional councillor in region A would get £3,000, whereas a person in region F (and I am carefully not naming them, in case it should be thought I am attributing value to their services) would get £1,500, in district B £2,000 or in district X £500. He would be inundated with protests. This is where I presume the Government see the attraction of the daily allowance. It will be governed by the volume of work to be undertaken. In the bigger authority, presumably the people will have more work to do and will legitimately be involved more often. I do not know whether that is how it will work.

We all have our ideas about what an appropriate salary would be. Figures have been mentioned: £2,000, £2,500 or £3,000 for regions; £1,000 or £1,500 at district council level. All we have in relation to allowances is the supposed leak that the Secretary of State or Secretaries of State were considering an attendance allowance, taxable, of somewhere between £12 and £16 a day, plus, in particular cases, the subsistence and travelling allowances, which of course would be non-taxable. If the allowances were sufficiently generous, then I might be attracted to them rather than salaries. But of course, if the Government's idea of a generous allowance was something like £5, £6 or £7 a day—or even £8.50, I should not agree, and in those circumstances the argument for salaries would be overpowering.

I should like the Minister to make some statement about what the range of allowances might be, but I do not expect that he will be able to do so. If he were in a position to do so, it would be much easier for all concerned to say whether they favour attendance allowances or salaries. I do not expect that we shall reach a decision on this point to-day, but if it were to come to Report stage and the Government had not made up their mind about attendance allowances, then I suspect the House would almost certainly be forced into the position of putting a stated salary in the Bill. The Minister said on Second Reading that the local authorities are not to be elected until May next year, so that there is plenty of time for the Government to arrive at a decision. I want to disabuse the Minister of that idea. One of the difficulties which the Parties or associations are already having is to find out on which authority people are willing to be nominated. The membership of a regional body, certainly of a larger region, is going to be virtually a full-time job.

I spoke to a very able councillor in my own part of the world the other day, and said to him, "I suppose you will be going for the region". He said, "Well, at the moment I think not". I asked him why. He replied, "I have a very good job, but if I am going to hang on to my job I must give a reasonable amount of service to my employer. If I go on a regional authority, and I am going to be engaged three or four days a week, I would not expect my employer to continue my employment, because I should not be able to give him the sort of service he needs. If that were to be the case, I would have to decide what the alternative was." If it were a totally inadequate allowance, the answer of that man would be, "I will go on the district authority, where I shall be perfectly able to do my job and attend the meetings, because in that particular area it is almost certain that the new authority will meet in the evenings, so that the work will not interfere with my employment." But I am quite certain that in many cases regional councils will not be able to arrange for evening meetings. So that position is much more urgent than being related to the date of the election. The decision ought to come in time for people to make up their minds where best they can give their service, at regional or district level. I think it would be wrong if large numbers of people opted for the district because they did not think they could afford to be members of the regional authority.

6.5 p.m.

THE EARL OF SELKIRK

May I say one word on this subject, as I have an Amendment down? I think that if the Government want to get a new spirit in local authorities they will have to pay something that looks very like a salary. I honestly do not believe that they will get the nature of the change which we all believe is fundamental unless something like this is done. I think the noble Lord, Lord Taylor, put his finger right on it when he said there is a dignity in the office which comes from payment of a salary which I do not think would come from daily attendance allowances. I am not sure that this House is a good example, or the European Parliament. There are already stories going around about the European Parliament—not, if I may say so, about our members, but about other members. I am not going to say whether they are right or wrong, but there are stories going round. I wonder whether it matters if we do have different salaries. When a man goes to a job he knows exactly what he is going to get; he knows that before he goes into it.

May I add one other point? I suppose that we in Scotland must be tied to England. Is this really the position we are in; that we dare not make any decision, whatever our requirements are, unless they fall in with those of our neighbours? If that is so, I should have thought it is not much use continuing the discussion very much longer.

LORD STRATHCLYDE

May I intervene for one further moment? I am afraid I did not succeed in making clear that one of the particular attractions of the salary system is that it will enlarge the area from which candidates will come and to a very considerable extent. I know this from experience. For many years I was responsible for getting candidates for the City of Glasgow Council, and I found time and time again that the partners in businesses would not allow their younger partners to come and serve because they did not know what it meant to their firms. If in fact they know that they are going to be paid a salary, of whatever sum it may be, they know that that money is not being lost to the firm, as it would be otherwise. Under a salary scheme you will get quite a number of excellent candidates whom you would not get under the allowances provisions.

LORD BURTON

I am very much in agreement with the noble Lord, Lord Hughes, on this point. It is an extremely complicated issue. I came in with a completely open mind. Having listened to the debate, I am rather inclined to come down on the side of allowances. There is a tremendous variation, not only from region to region and from district to district, but even with individual councillors within those districts. Take, for instance, our own Highland district: a councillor coming from Skye or Caithness would find it very much more onerous than one living just outside Inverness, if he is doing the same amount of committee work. He will have to spend so much time travelling to and from his work. I find it very difficult to know how anyone is going to fix a salary which will be reasonable and commensurate to the amount of work the individual is doing. Some councillors may well be committee chairmen or vice-chairmen. Are they going to get different salaries from the ordinary members? It seems to me that allowances would be fairer.

If I might make one further observation, I hope the Government will look at the question of loss of earnings. I think it is very difficult for a self-employed person to establish what loss of earnings he has. If you are a farmer, and perhaps employing no one else, I do not know how you work out your allowance for coming to a regional council or district council. It is quite easy for someone on a £10,000 salary to apportion the time, but for a self-employed person it is not easy to calculate loss of earnings.

LORD HOY

It is a very difficult subject. As I said not long ago, if I had had to vote that day I should have voted for salaries rather than allowances. When the noble Lord, Lord Burton, says he is inclined to come down on the side of allowances, all I would say is, do not come down too quickly or too heavily. This is a very difficult issue, and the real trouble is that the Government have put us into this difficulty. I do not say that spitefully or in any other way, but we are faced with the position that we do not know what the Government are going to do, or what they want to do. If we had the opportunity of making a choice between a salary that is going to be specified or an allowance, we could more readily make up our minds which to choose.

I know some young people who at the present time are members of the council in the city of Edinburgh. Whether one agrees or disagrees with their political views, they are of absolutely first-class calibre. What has become quite apparent is that they will certainly not go to regional councils; the time that would be demanded from them would be much too great. Some who are employees of certain associations and firms, and perhaps some in business for themselves, could not afford to give up the time that the regional council is going to demand unless they knew that all the loss in attending was not going to fall on them.

It seems to me that until such time as the Government tell us what they intend to do, we shall continue to be in this predicament. I heard the noble Earl, Lord Mansfield, say, "Do you think that councillors are going to create meetings?" The noble Earl must realise that councillors are just as human as other folk. I am not going to say that they will create meetings, but indeed they are not going to continue—as we sometimes do—until 10 or 11 o'clock at night, when they can adjourn at 5 and come back the next day and finish the business at a reasonable hour. You have all these views to take into account when you are considering a question of this kind. I do not think that the noble Lord, Lord Polwarth, is going to tell us what the Government's decision is. Indeed, he kindly sent some of us a letter—I do not know how many—after the last debate, and made it perfectly clear that the Government were giving it "due consideration". That is not a very new answer so far as Governments are concerned. We are in this position, and it is a difficult one, because in England, where the Bill has already become an Act and been put into operation, the Government have not yet decided what they are going to pay people who are working at the present moment.

LORD BURTON

Does the noble Lord insinuate that no one is going to stand for a council until he knows what he is going to get out of it?

LORD HOY

No. If the noble Lord had been listening he would have heard me say that there are hundreds, thousands of councillors in England operating the present Act and they do not know whether they are going to get a penny out of it. They do it because they want to do it. If Parliament is going to make a change and call for greater demands on councillors so that it makes it impossible for them to earn their livelihood in the ordinary way, Parliament has no right to make those demands without paying compensation in one form or another.

That is the position that we are at, whether it is going to be a salary or allowances. We could be taken out of this difficulty if we knew what the Government proposed to do. It is not noble Lords on either side who have introduced this Bill; this is Government legislation, but the Government cannot make up their mind how they are going to pay for it. Until we get that information I do not think that we can make a decision. I should like to put on record once more that unless we get something much more constructive, or much more informative, then I remain of the opinion that I had some time ago, that a salary would be a better solution than allowances.

6.13 p.m.

LORD TAYLOR OF GRYFE

May I delay the Committee a moment or two to discuss one or two points that have been raised. The major problem is the differential in rates for different authorities. This is a serious problem, but it is not unknown in business to-day to employ people on job evaluation to assess the relative responsibilities of particular jobs. It is even done by one organisation of other organisations. I suggest that there are techniques of job analysis and job evaluation that could quite readily establish the amount of time that people have to serve in a fairly independent way, and take the responsibility off the shoulders of the Secretary of State for Scotland—though to some extent the ultimate decision will be his.

The Government have said where they stand in this matter; all they have not filled in is the amount of the attendance allowance, but the Bill has said that it will be an attendance allowance and not a salary. We are seeking to secure the best form of local government and attract the best people to local government service, and the question we have to ask is whether payment of an attendance allowance or a salary is more likely to achieve these ends. I must say that if you are asking people to give public service of this kind you must give them some idea of what they are involved in in terms of expectancy of reward. To say that they will get an attendance allowance does not give anyone any information on which they can decide whether to give up their job in order to serve, and this is what many people will have to decide before they will undertake this public service. It does not tell them what adjustments they will require to make in their personal budget. If you state that the salary for this service is x amount, at least an individual who makes a decision to be a candidate for public office knows where he stands.

I would say to the noble Earl, Lord Mansfield, and to the noble Earl, Lord Balfour, that what is practised in this House is not a very good precedent. We do not get an attendance allowance; we get a figure to cover our expenses bill and our hotel expenses, and this is provided for in the Act under "expenses". We do not get an attendance allowance because we attend; we have to produce certificates that we have spent £8.10, if we claim that amount, or £5 or whatever it may be. It is not a good practice. May I say to the noble Earl, Lord Balfour, that this House is probably the poorest example of an organisation which permits a broad opportunity for people to enter it. What we are talking about is calling on the whole resources of our community for public service, and to make it easier and not penalise them for offering themselves for public service. I suggest that to provide a salary makes it possible for people to plan, makes it possible for them to arrange their domestic circumstances to give this service, and by the technique of job evaluation some of the political conflicts that are visualised in the differentials between the various authorities can be avoided.

LORD BALERNO

When the Bill was first published I was strongly in favour and there has been opportunity for study of the discussions in Committee in another place, and after hearing the debate to-day, especially the arguments of my noble friend Lord Strathclyde, I want to give my support to Lord Cromartie's Amendment that the regional councillors should be paid a salary.

THE EARL OF PERTH

May I ask the noble Lord, Lord Taylor of Gryfe, about one point in his argument which I did not fully understand. He said that if you paid a salary it would enable a man to decide whether he should give up his other job. If I understand that aright, I find it a dangerous principle, because it may lead to a professional class who are working on this job only as salaried functionaries, and who would give up their other interests. I do not think we want that type of person all the way through. I wonder whether I was right in understanding that the noble Lord is advocating a salary so that there shall be a professional class doing this work and nothing else.

LORD TAYLOR OF GRYFE

I am sorry to intervene again, but a question has been directed to me. All I am saying is that in many areas there are working class people—not professional classes—who would require to make a decision about whether to give up their employment, because it is not easy in many forms of employment to operate part-time in this way and to give four or five hours' service to the public and three hours' service to an employer. I had to resign from my public service because I could not afford to take time off in my former employment in order to give public service. All I am saying is that for many people it will be that type of decision, and it could be better made by people knowing what is the expectancy of salary in such cases. I think it would broaden the area of selection of candidates.

LORD HUGHES

There is another way of looking at this question. I cannot say that I agreed with the noble Earl, Lord Perth, about a fixed salary bringing in a professional man. If a man is so interested in the work of, say, a regional council, and it involves so much time that he is prepared to give up his present method of earning a living, with the risk attached that he can be discharged at the end of four years' employment without any redundancy pay, superannuation or pension, simply because he has not satisfied the electors, he will not necessarily be a bad councillor because of it. The argument can be advanced that when he has put himself at risk to this extent, he will make every endeavour to be so good a councillor that his chances of re-election are greater than other people's. After all, we do not have to look any further than the other end of this building to find that that is what many Members of Parliament have had to do. They have had to give up their employment in order to be able to do a satisfactory job as Members of Parliament, and I doubt very much whether anyone would argue nowadays that those who are able to combine another job with the job of a Member of Parliament are better than those who have had to give up their outside employment and who give their whole time to being Members of Parliament.

We have not yet reached the situation, even in regional government, where we can say that being a councillor is a full-time job, but undoubtedly the feeling for salaries is almost overwhelming in the case of regional councillors, because in so many cases, even if it will not be a full-time job, it will certainly be very near it and will restrict very much the type of other work that a man is able to undertake with satisfaction, either to his own business or to his own employer, if he is to do a satisfactory job as a regional councillor. I have not the slightest doubt that that is what influenced quite a number of your Lordships to change from the general idea of allowances to the strong possibility of salaries for regional councillors.

6.24 p.m.

LORD POLWARTH

We have had an extremely interesting discussion about a subject on which, while there was a predominance of views in favour of salaries, there was equally quite a strong lesser element in favour of the opposite, while some noble Lords indicated that at present they are in doubt. It may be helpful to explain the Government's thinking on the question of the payment of councillors and how it has developed. We start with the present system of a financial loss allowance, which any councillor can claim up to a maximum of £5.50 a day, free of tax, but only if he can prove that he has actually suffered loss of income of the amount that is claimed. I think we are all agreed that this is not a satisfactory system and it should not be perpetuated. Certain classes of people have found it difficult to establish loss; the rate of take-up of the allowance is low; and there is no doubt that an unknown number are deterred from seeking office because of the inadequacy of the loss allowance.

The Maud Committee on Management of Local Government in England and Wales—and I have deliberately refrained from commenting on our neighbours to the South, because we are discussing a Scottish Bill—reporting in 1967, recommended that the financial loss allowance should be replaced by a sort of flat rate expense allowance, to be fixed by local authorities themselves and claimable by individual members in whole or in part. Then we had the Wheatley Commission which went further and came out in favour of an outright salary for all members, as a reflection of the value of the service which a councillor gave to the community. Although this salary was not to presume that the ordinary councillor was serving full-time, it was to be substantial and it was to be augmented at the discretion of the council to the extent of up to 100 per cent. in the case of those councillors who had special responsibilities, such as chairmen of committees. It was accepted that such a salary would be taxable.

The Government have no quarrel with the basic objectives of the Wheatley recommendations on this matter. We certainly want to get away entirely from the idea of financial loss allowance, with its overtones of hardship payment and the need to prove every penny spent. We want to see a simple and effective system which will be taken up by a much higher proportion of people, and we do not shy against the idea of regarding payment as a form of remuneration. However, while the payment of a salary is one way of achieving these objectives, it is not the only way and we are not convinced that it is necessarily the best way.

A number of noble Lords have made very valid points. It could be that the offering of a salary might be an inducement to people—I hope not too often—to go into local government, when they do not necessarily intend to give their maximum effort and time to the job. There is the much more real problem of how we settle the level of salary in relation to the different duties falling on those in chairmanships and ordinary councillors. There is the difficulty of deciding the level as between different regions and districts, some of which would need to have far more meetings with a greater demand on people's time. How would one come to a conclusion about who should be eligible for special responsibility payments? One can envisage acrimonious discussions internally, if this were left to each authority to thresh out. This is a very considerable draw-back to a flat rate salary, and it would be a very invidious job for a Secretary of State, or indeed for any independent body to attempt to assess the values of the services demanded as between different regions and districts.

We have therefore proposed a system which differs from the ideas of both the Maud Committee and the Wheatley Commission and which seems to us to have advantages over both. I shall not follow the analogy of your Lordships' sessional allowance, because that analogy is limited, although to some extent it will operate in the same way. But the system we propose has the advantage of simplicity; it will be easily known who is entitled to what; it will be widely taken up, because it will be payable as of right to any councillor regardless of his own income and employment; it will apply equally to regional, district and island councillors; it will deal satisfactorily—I do not mean necessarily equal in amount, but in the same way to different bodies—with chairmen of committees and "back-benchers", and the fact that chairmen of committees will be doing more work will be reflected in the amount to which they are entitled.

I should like to correct the noble Earl, Lord Balfour. These allowances will be taxable. They are allowances: they are not the reimbursement of expenses. Of course, certain travelling and subsistence expenses will be reclaimable, as at present. They will be taxable, but that is inevitable under our tax laws if we are to have a tax system which offers remuneration, as this is, just the same as it would be in the event of a salary. The amount of the allowance, I can assure your Lordships, will be fixed so as to take account of the fact that it is to be taxable.

The question of proliferation of meetings has been raised by a number of noble Lords. I know this is often alleged with regard to local government in Scotland, but to what extent it is a fact I do not know. In the first place, there will be no danger of prolonging meetings to increase the allowance because the allowance will be fixed on a maximum daily basis, and there should therefore be an incentive to finish off the day's business as expeditiously as possible.

LORD STRATHCLYDE

May I interrupt the noble Lord for a moment? He says that it will not lead to the carrying over of business. But will it not? Will they not be able to say, "We will not finish the business to-day; we will have another meeting to-morrow", and in that way get in two days?

LORD POLWARTH

With great respect, I was coming to that. I had not said that: I had said that there would be no danger of stretching out a day's meeting in order to get more. As to the question of carrying over, of proliferating meetings, I think we must have some faith in the members of these new authorities; and I am sure that the public, with their rights of admission, and the Press, with their rights of attendance, will be fairly quick to spot this kind of practice if it is developing and will bring it to the attention of local electors.

I come finally to the very tempting bait which the noble Lord, Lord Hughes, once again dangled in front of me regarding announcing the rate of allowances in order, as he told us, to enable him to make up his mind as to which horse he will back.

LORD HUGHES

I would hope not just me. Do not do it just for me: I think others will be interested also.

LORD POLWARTH

It was the noble Lord, I think, who originally raised the matter at a previous stage. I think there is a genuine difficulty here, and, as my right honourable friend the Secretary of State said in another place on July 5, we are not ready to announce this yet. We still have to consult local authority associations; we have had other more press- ing matters to consult them on in the meanwhile; and we must—and I submit to your Lordships that this is a matter of importance—have regard to the particular stage at which the Government's counter-inflation programme stands. We are also, after all, considering fixing a figure that will not commence to be payable until May of 1975. That is the better part of two years ahead. I should have thought that there were advantages in waiting till as reasonably near the first elections as possible to fix this amount, because of the distance ahead when it should first become operative.

I appreciate the wish of those standing, or intending to consider standing, to have knowledge of the figure. I doubt whether it is really quite so pressing as the noble Lord made out, as to need it at this time in relation to elections next May. I would only repeat my previous assurance that an announcement will be made in good time for the first elections in May. There is another point here. If it were a salary that we were proposing at this moment, we should find ourselves in exactly the same difficulty about announcing the amount of the salary. Having said that, and realising that there are arguments on both sides, the Government are very definitely of the view that the balance of advantage is in favour of the system we are recommending, and I would ask your Lordships to support that view.

On Question, Amendment negatived.

LORD TAYLOR OF GRYPE

I beg to move Amendment No. 69.

Amendment moved— Page 23, line 25, leave out from ("councillor") to end of line 4 in page 24, and insert ("shall be paid such salary as the Secretary of State may by order made by statutory instrument determine.").—(Lord Taylor of Gryfe.)

On Question, Amendment negatived.

THE EARL OF CROMARTIE had given Notice of his intention to move Amendment No. 70:

Page 23, line 30, at end insert— ("( ) A councillor for a region shall be paid such salary as the Secretary of State may by order made by statutory instrument determine.").

The noble Earl said: I am quite prepared not to move this Amendment on one straightforward understanding. Unless we get a clearer view of what is going to happen, I shall put this Amendment down again at the next stage of this Bill. Meanwhile, I do not move this Amendment.

6.36 p.m.

THE EARL OF BALFOUR moved Amendment No. 72:

Page 24, line 4, at end insert— ("(5) Allowances may be paid by regional island or district councils in respect of expenses reasonably incurred by their members in connection with the installation or use of telephones for the purpose of the performance of their official duties.")

The noble Earl said: Clause 45 of this Bill was taken from Section 119 of the Local Government Act 1948, Chapter 26. The subsection which I am seeking to insert into the Bill is worded in almost exactly the same way as an amendment to Section 119 by Section 36 of the Local Government (Scotland) Act 1966, Chapter 51—which, by the way, is being repealed by Schedule 28 to this Bill. I beg to move.

LORD POLWARTH

While I am grateful to the noble Earl for drawing our attention to this point, I would submit to your Lordships that the Amendment is not necessary. The new power given to local authorities in Clause 69 of the Bill enables them to do any thing (whether or not involving the expenditure, borrowing or lending of money …) which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions ". This is sufficiently wide to cover the payment to councillors of expenses connected with their telephones; and I have no doubt that the use of a telephone and the costs connected with it are very necessary expenses, and will be considered so by councils. The noble Earl quoted a section with which I do not think I am familiar, but it could be that he is thinking of Section 36(4) of the Local Government (Scotland) Act 1966, which amended part of the Local Government Act 1948, enabling local authorities to pay for the provision of telephones for their members. This specific power is no longer required because of the general powers conferred under Clause 69 of this Bill.

THE EARL OF BALFOUR

May I ask my noble friend one further question? Would this cover having a car? Would Clause 69 of this Bill cover, say, a Provost being provided with a car?

LORD POLWARTH

Presumably it would be a question of what expenses the authority considered reasonable for the carrying out of the office.

LORD HUGHES

Presumably there is some such power at the present time; otherwise, there are an awful lot of Provosts and Lords Provost going about illegally in cars.

THE EARL OF BALFOUR

With that assurance I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 45 agreed to.

Clauses 46 and 47 agreed to.

Clause 48 [Payment of expenses of official and courtesy visits, etc.]:

On Question, Whether Clause 48 shall stand part of the Bill?

6.40 p.m.

LORD HUGHES

I have a small query on Clause 48. Paragraph (a) refers to defraying expenses incurred in making "official and courtesy visits", and paragraph (b) refers to defraying expenses incurred in entertainment by way of "official courtesy". Is there a difference? In the first instance does "official and courtesy" mean an official visit or a courtesy visit, or a visit which must be both official and courteous? The second one I am clear on. "Official courtesy" would cover a conference coming to town, distinguished visitors and so on. What I am doubtful about is why there should be the use of this phrase "official and courtesy visits".

LORD POLWARTH

I would assume that one could easily differentiate between two kinds of visit. There could be a visit to study, say, some particular new type of sewage plant and so on which was official in that the visit was for official purposes. When we come to courtesy, one example would be the admirable practice of twining towns between this country and the Continent. These are examples of courtesy visits which within reason would be encouraged. These two examples occur to me. A visit purely for goodwill purposes to a twin town would not necessarily be classed as an official visit.

LORD HUGHES

I would not agree for a moment. Unless a council authorises a courtesy visit to a twin town and agrees to pay the expenses, it cannot take place; therefore it is an official visit. It may be an official visit for the purposes of courtesy. I have been on visits to Orleans and before I went the council decided which members of the council were to go. If a member who was not on the list travelled—on one occasion one did—he would find himself having to pay his own expenses.

LORD POLWARTH

We appear to find some difficulty in distinguishing between what is official and what is not official. I can assure the noble Lord that I will look into this and communicate with him as to the specific meaning of "courtesy" as distinct from "official".

LORD HUGHES

I think that all that is needed is the phrase "official visits".

Clause 48 agreed to.

Clauses 49 and 50 agreed to.

Clause 51 [Establishment and general purpose of community councils]:

THE EARL or BALFOUR

This Amendment is clear in its wording. We have a lot of business to-night. I should be happy to move it formally. I would answer any questions noble Lords may care to put. I beg to move.

Amendment moved—

Page 27, line 11, at end insert— ("(1A) A community council shall be established for one or more electoral divisions or wards as described in Section 5 of this Act; (1B) The Boundaries of a community council shall be the same and conform to the boundaries of the electoral division or divisions or ward or wards, as the case may be; (1C) An electoral division or ward other than a regional division shall not be divided between two or more community councils.").—(The Earl of Balfour.)

LORD POLWARTH

As I see it, the noble Earl's Amendment seeks to have two effects. First he says that community councils have to be established for one or more electoral divisions or wards. I take that to mean that this would make the establishment of community councils compulsory—

THE EARL OF BALFOUR

I thought they were complsory; that we were supposed to start them under the Bill.

LORD POLWARTH

We give every encouragement, as will be seen further on, when we come to the establishment of community councils. We are not laying down that they must be established for every community. We are saying that every district must put forward to the Secretary of State for Scotland a scheme for the establishment of community councils within its districts. There may be reasons why one particular part of the district should not require one. It is not correct to say that the establishment of community councils is compulsory. It will be encouraged, and actively so.

The main point of the noble Earl's Amendment is to tie boundaries of community council areas rigidly to those of electoral divisions or wards. I think that this is against the tenor of the idea of the community councils. It is the essence of our thinking that these bodies should be set up if and where local communities ask for them. District councils are required to prepare these schemes, but once a scheme is confirmed it is for the local people to make up their minds and say how they want it set up, its rules, its purposes, and also its area. It could be that the logical area for a community council would overlap the boundaries of electoral divisions or wards which are established for quite different purposes. We feel that his Amendment would restrict unduly the freedom of action of all parties in connection with community councils, which are not statutory local government bodies but a totally new form of organisation that we are introducing in this Bill. Therefore we feel that such a proposal as the noble Earl suggests would be unduly restrictive.

THE EARL OF BALFOUR

In that case, may I beg leave to withdraw the Amendment?

Amendment, by leave, withdrawn.

6.48 p.m.

On Question, Whether Clause 51 shall stand part of the Bill?

LORD HUGHES

There was considerable discussion about community councils on Second Reading. I think that the Minister said at that time that one of the reasons why community councils were in the form of not being another tier of the local authority was because they are to have the maximum amount of freedom. It was not to be laid down what they might do or might not do. First of all, I should like to ask a question. On the answer to it depends where I go. Clause 51(2) says: … and to take such action in the interest of that community as appears to it to be expedient and practicable. Does the fact that what the community council may do or may not do is not defined mean they have complete freedom to do anything that appears to them to be expedient and practicable in the interest of that community?—because that would appear to be what flows from what was said on Second Reading. Would the noble Lord, Lord Polwarth, be good enough to answer that simple question? On the answer to it depends my next question.

LORD POLWARTH

As I understand it, the freedom will be complete within what is considered expedient and practicable for that council.

LORD HUGHES

The freedom will be complete. In that case I cannot understand the answer that the noble Lord gave to the noble Lord, Lord Tanlaw, when he asked whether a community council would be free to give free milk to children in their area. The answer was that they would not. If they can do anything they consider expedient in the interest of their community—and obviously it is perfectly reasonable for them to say that it is expedient to give free milk to the school children of the area of the community council and it is a simple matter to arrange its distribution, so it is obviously a practicable proposition—on what ground did the Minister answer Lord Tanlaw that it would not be permissible for them to do that? That is the second question.

LORD POLWARTH

I will see whether I can do better on this one. Have freedom of action, yes!—but not so as to usurp any function reserved for some other body. Certainly, my first reaction on that question of Lord Tanlaw was that this was a function statutorily laid down, as I understand it, and therefore it should be reserved to those bodies. I suppose that theoretically it would in this case be possible, if they had sufficient funds; and, of course, they have to acquire the funds. I suppose in theory they could produce a scheme for the distribution of free milk if they could raise enough money, but I doubt whether they would get the funds out of the district council or the regional council.

LORD GARNSWORTHY

Why not?

LORD POLWARTH

Because those bodies would probably feel that that was a function covered in other ways.

LORD HUGHES

By no means. After all, the country is full of local authorities which wanted to continue to give free milk. They were prevented from doing so by the Government. The councils stopped doing it, but not because they wanted to, and they have tried various means to get round the Government's decision with limited success for limited periods. There is nothing in the Bill which says that the community council cannot do things which are within the power of the district council or the regional council to do. It is anything which appears to be "expedient and practicable". The Minister says, "Yes, it would be theoretically possible for them to give free milk, if they could get the money." If you have a district council which wants to give free milk it will be only too ready, if that is the only way to make it possible, to put these funds at the disposal of the community council.

I am not raising this point in order that on Report the Minister may introduce restrictive powers on community councils. But I think it right to point out that either they have freedom, as the Minister has said, to do anything they like, and for which they can raise the money, or they are restricted in some way. Undoubtedly it is the case that the Government have, over a period, interfered with the functions which local authorities may undertake, in the sense of saying that local authorities may not do certain things which hitherto they have been able to do. In this the Government may be giving the opportunity to these councils to do the thing at second hand. I am not raising this because I want to stop the possibility, but I am pointing out that this would be the wrong way to do it and that the Government may be making it a perfectly legal way to do it. I can think of at least half a dozen district councils in Scotland who would be delighted to take the opportunity of making funds available for the distribution of free milk to any community council which wished to do the job.

LORD POLWARTH

I can only say that the noble Lord, Lord Hughes, has opened up a fascinating new field of possibilities. I would need to inquire further into this matter about the exact limitations and communicate with him. I cannot say precisely what limitations could be imposed.

LORD HUGHES

I did not intervene in respect of the community councils because I have no great enthusiasm for community councils. I doubt very much whether they will be able to do the sort of job that people think they may do. They may be no more than glorified tenants' associations. But if they are capable of doing the job it will be because the Government are giving them real powers and putting real money at their disposal from the district and regional councils. Either the Government want them to be bodies with power to do these things, or they must re-think the matter. My real objection to community councils as they are in the Bill is that I do not think the idea has been thought out at all. They are a kind of unknown kind of animal which has not appeared in local government life before, and if it were left in this way they might turn out to be the most powerful bodies of them all, provided that the district and regional councils were prepared to find the money, because it is the nearest approach to general power given to a local authority which appears in the Bill.

THE EARL OF SELKIRK

I am wondering whether the noble Lord, Lord Hughes, is not greatly overstating the case. Suppose a community council wanted to run a brothel. Is the noble Lord saying that there would be no objection to rates being raised in order to put money at the disposal of a community council to run a brothel, or a gambling hall, or anything else? Surely, there would be an objection to that. It is carrying the thing too far.

LORD HUGHES

No. Running a brothel, so far as I know, is against the law. I have never tried it.

THE EARL OF SELKIRK

Giving free milk is against the law.

LORD HUGHES

It is not against the law. It is illegal for town and county councils to give free milk. There is nothing in the present legislation to say that a community council cannot give free milk. The embargo is on existing local authorities.

THE EARL OF SELKIRK

Therefore it is raising money for an improper purpose.

Clause 51 agreed to.

House resumed.