HL Deb 15 October 1973 vol 345 cc118-48

Further considered on Report.

Clause 47 [Allowances for attending conferences and meetings]:

LORD POLWARTH moved Amendment No. 47: Page 24, leave out lines 27 and 28.

The noble Lord said: My Lords, this Amendment covers the same subject as Amendments Nos. 48 and 49. They are of a fairly technical nature and ensure that Clause 47, which concerns allowances to members for attending conferences and meetings, will apply to the Central Scotland Water Development Board in the same way as they apply to the local authority. I should point out that although these Amendments apply to any water development board, there is at present only one—the Central Scotland Water Development Board—and we do not contemplate another at present. The purpose is merely to ensure that members of this body are eligible to receive the same allowances for attending conferences and meetings as members of local government bodies. I beg to move.

On Question, Amendment agreed to.

LORD POLWARTH

My Lords, I beg to move Amendment No. 48.

Amendment moved— Page 25, line 6, at end insert ("other than a water development board within the meaning of the Water (Scotland) Act 1967").—(Lord Polwarth.)

On Question, Amendment agreed to.

LORD POLWARTH

My Lords, I beg to move Amendment No. 49.

Amendment moved—

Page 25, line 8, at end insert— ("(5) In relation to any water development board as aforesaid, this section applies to a conference or meeting held inside or outside the United Kingdom and convened by any other person or body (other than a person or body convening it in the course of a trade or business or a body the objects of which are wholly or partly political) for the purpose of discussing matters which in the opinion of the board relate to their functions.")—(Lord Polwarth.)

On Question, Amendment agreed to.

Clause 53 [Amendment of schemes]:

8.35 p.m.

BARONESS ELLIOT OF HARWOOD moved Amendment No. 50:

Page 27, line 42, at end insert— ("(d) provisions concerning the procedures to be adopted by the Community Councils on the one hand and the local and statutory authorities with responsibilities in the areas of the Community Councils on the other whereby the Community Councils may obtain regular and sufficient information about the activities and proposals of the local and statutory authorities to enable them to carry out their functions described in section 51(2).')

The noble Baroness said: My Lords, this is a new subject, that of the community councils. The community councils which are referred to in Part IV, at page 27 of the Bill, are of great importance. I have read very carefully what took place at Committee stage in another place on April 10. A considerable debate was initiated and this particular Amendment which I have put down, though not exactly the same, is rather similar to that put down in another place. I put it down because with reorganisation of local government we shall have a fairly large gap, if I might put it like that, between the ordinary citizen living in a village, a rural community or a city, and the people who are governing. The regional government will be a very long way away from ordinary people living in rural or small urban communities. Perhaps they will not be so far away in the big cities, but after all Scotland has very large areas of rural communities, and it is those with which I am particularly concerned.

Obviously, the Government have to ensure that the community council shall be in close touch with the local community, whether it is district or regional, but there does not seem to me a close enough liaison between them and the community councils, which in a sense are going to be rather unofficial. I know that is the view of the Government: they do not want to make the community councils too stereotyped. On the other hand, we could have councils which are so un-stereotyped and so little a part of the local authority overall picture that they would really be of no use at ail. I think it is most important that the councils should be able to represent to the local authorities, whether they be district or regional, the views of the man in the street, the man in the field and the person in the community. Their views should be made known to those who need to take note of the overall picture and to know what is going on.

I think in fact there should be a two-way traffic of both ideas and means. I believe that the community councils ought to be recognised as bodies to be consulted when local needs are really involved. It will be very easy for districts or regions to say, We know all we want to know"; but often they do not. It would also be easy for them to do things without consulting the people who are most affected. For instance, if one of the nationalised industries—I am thinking particularly of the railways or electricity suppliers—wants either to close part of a railway or to alter electricity supplies or make some major alteration, they may well discuss this with regional representatives or even with the district council; but are they going to ask the local people for their views on matters concerning, for instance, the changing of a railway route or the moving of telephone kiosks and things of that sort? Are they really going to consult them or not? There will be many such instances, I believe—and I speak with some experience because I have been chairman of a district council, which is the nearest approach to what the community councils are going to be. I have also been chairman of a local advisory committee to the district council, which is even nearer, and I know that if you can get into really close touch with people you very often get extremely important and good opinions. This is most valuable when one is planning something on a large scale. So I believe it ought to be clearly laid down in the Bill that …the Community Councils may obtain regular and sufficient information about the activities and proposals of the local and statutory authorities to enable them to carry out their functions described in Section 51(2).

There was a great deal of discussion during the Committee stage in another place on the subject of finance. Here perhaps I may refer your Lordships to page 29, Clause 55, where there is described how assistance to community councils may be given. In the debate at Committee stage in another place I notice that it was said that much of the money acquired by community councils would come from voluntary funds. I question how, because most of us who are raising money in local communities are raising it for local charities, or whatever it may be, by whist drives, dances, jumble sales, et cetera. Those are the normal ways in which we raise money in villages and small towns to support local activities. Those activities are not likely to be diverted to raise money for community councils. Although it is in the Bill, I confess it is not a mandatory matter and therefore it is very likely that if the regions or districts do not set up community councils, consultation with local people will be of a very desultory character, if there is any at all. So it is necessary to have a clause in the Bill which says that information from a community council should be given to the people who are the elected representatives on either district or regional government, and that the statutory bodies should make it their job to see that the individual in the village and in the local authority area should be able to express his views.

It seems from the course of debate that some people are afraid that if they set up community councils they will be a nuisance, that they will be frustrating, or that there will be groups of people who will be simply grinding their own axes. That is erroneous. I have had experience of working at the grass roots with people in a rural area and in a district, and their views are most valuable when it comes to passing legislation in the county council which affects them very closely. I hope it will be possible to introduce into the Bill a statutory function or recommendation on the lines which I have put forward, lines that were discussed and to which the Ministers in another place were quite sympathetic, but which would bring about a proper link between the people in the rural areas in the small communities, even in the towns, and with those who are elected. In view of the much bigger regions that are being dealt with there will be a big gap between the voter on the ground and the person dealing with legislation. I beg to move.

LORD STRATHEDEN AND CAMPBELL

My Lords, I should like to support the noble Baroness in this Amendment. Since the earliest White Paper I have been a consistent supporter of the importance of what I described originally as the real parish pump of this legislation, the community councils. They are going to perform an important function in getting, as the noble Baroness described, to the real grass roots of the electorate and keeping them in touch with what is going on. Although it could be said that the words in paragraph (d), "such other information…" could cover anything, it needs some definite statement as to how these councils should be able to function, how they should get their information. I am sure that something on the lines of the Amendment of the noble Baroness is of considerable importance. I hope that the Government will be able to accept something on these lines.

THE EARL OF LAUDERDALE

My Lords, I should like to join my noble friend Lord Stratheden in supporting my noble friend Lady Elliot of Harwood. There is much more steam behind the project for community councils than people may yet realise. I have some close acquaintance with what goes on in the burgh of Lauder. There we have already formed a preparatory committee for getting our community council going when the time comes. There is a tremendous enthusiasm for this and people are already trying to get their teeth into the problem of the community council. But they are frustrated by the obscurity and nebulousness of the community council's functions. The community council certainly needs money, it certainly needs status, and this is the novalgic point on which my noble friend's Amendment touches. It touches the community council's rights to information. There may be a whole range of matters on which it is proper that they should be entitled to information. There may be a proposition for a firm, an industry, to move from Edinburgh, or wherever, down towards the Borders. If such an industry or factory is foot loose and looking for a site it is important that community councils should be entitled to know from the district council that such a thing is, as it were, coming along.

There are changes in roads; there are road developments there are all sorts of traffic problems ranging from pedestrian crossings to diversions. There are possibilities of changes in postal districts which arouse intense heat but on which it would be proper that the community council should be entitled to be informed. There are problems about signposting roads, putting up a notice outside a town or district to give it its proper name. There are matters relating to public events of all sorts on which it is proper and prudent that the community councils should have a right to be consulted and not merely the opportunity to be consulted if the district council so thinks. My noble friend's Amendment gives the Government a chance to give a lead in this matter. By accepting this Amendment, or something like it, they will be giving the lead that is wanted. I am glad to be able to support my noble friend Lady Elliot of Harwood.

THE EARL OF CROMARTIE

My Lords, I should like to support this Amendment, too. Having a considerable knowledge of local government over a great many years, I feel that we are going to lose our old district councils there is going to be nothing between what is going to be called a new district council and the old county council. The district council will not be there, and this is especially important because at the moment nobody knows what the community councils are they are floating about and referred to as being excellent but without any particular status or finance. It is important that there is something to take the place of the old district council. We are going to get so muddled with the words "counties" and "districts". I am trying to make it as clear as possible. The new district will be the county, in nine cases out of ten. It is vitally important that the community council should be given a definite place by the Government and recognised as being a body which is there to look after its district.

LORD BALERNO

My Lords, I, too, wish to support the Amendment proposed by my noble friend Lady Elliot of Harwood. If I remember aright, the conception of community councils crept into the original cogitations of what has become this Bill rather as an afterthought, rather as a realisation that there was a gap between the new district councils and the electors. The community councils (a vaguish term) were going to fill that gap and act as lubrication. That is why we get in Clause 51(2) the object of the community council expressed in this way: …the general purpose of a community council shall be to ascertain, co-ordinate and express to the local authorities for its area, and to public authorities, the views of the community which it represents. That I consider to be just a little bit of waffle, rather a pious hope, the kind of statement one gets in these things—"flannel", if you like. I think that by her Amendment my noble friend is making things more precise and putting an onus on the district council. In other words, it is not to be a one-way traffic of the community council defending the powers-that-be above, but for the powers-that-be above to communicate to the community council the things which they want communicated. My noble friend Lord Lauderdale has given so many excellent illustrations.

I should like Lady Elliot to go one step further. In Clause 55, on page 29, it is said: Regional, islands and district councils may make such contributions as they think fit towards the expenses of community councils… I should like to see that made mandatory and for it to be said: Regional, islands and district councils will make such contributions as they think fit towards the expenses of community councils… That puts more teeth into the existence of the community council. I am afraid it is rather late to think about moving that now and having a further Amendment tabled, but that is my very strong feeling which follows on the conclusion of the Amendment proposed by my noble friend Lady Elliot.

Lord INGLEWOOD

My Lords, one of the most important features about the establishment of the community councils I have not yet heard mentioned; that is, that they should have liaison with other community councils in the neighbouring areas. Otherwise, they are always at risk of being defeated one at a time by the officials, who in general do not like this kind of organisation because it causes them extra trouble and extra work. While we do not want them to exaggerate and hunt particular hares over and over again, or to waste a great deal of time, the fact remains that they must be given the opportunity to do their job properly, and that means they should have contact with the community councils of neighbouring authorities, and also have sufficient finance.

When it comes to the question of neighbouring authorities, the most important of all are those along the Border who should have liaison with similar organisations in England, because in the field of local government the position can be absurd. I do not know how often England is mentioned in this Bill, but those who draft Scottish Bills and those who draft similar English Bills always assume that there is a vast ocean between the two countries, instead of a simple land frontier. They seem to follow as a cardinal principle having organisations on both sides of the Border which, if possible, are different from one another so that liaison is difficult. This House surely ought to insist that these differences, without in fact detracting in any important principle, are reduced so that organisations, official and unofficial, on both sides of the Border work in the greatest harmony to the benefit of the people whom they are elected to serve.

LORD BURTON

My Lords, when the Minister replies, I wonder whether he could tell us whether the councils for social service will be abolished and replaced by these local community councils. Otherwise there will be duplication. The councils for social service already seem to be superfluous in many respects and I hope that the community councils will replace them.

8.55 p.m.

LORD POLWARTH

My Lords, I am glad of what appears to be the warm welcome accorded from all quarters of the House to the proposition for community councils put forward. This is encouraging. I would agree entirely with the objectives which all speakers have put forward, which we should like to see. May I assure my noble friend Lord Inglewood that there is nothing whatever in the Bill to prevent the closest possible degree of liaison between community councils and their neighbours. I had nice visions of the noble Lord and the noble Baroness, Lady Elliot, embracing somewhere warmly on the borderline—I am not sure exactly where. But I can see no reason why there should not be the closest possible liaison between them. This is why we are deliberately not writing a great many details into the provisions about these councils. We want them to have the greatest possible liberty.

I would however suggest that there are dangers in trying to write into a Statute words of this kind regarding the provision of information to these bodies to enable them to do their duty. We take their role extremely seriously and believe they must have a proper supply of information from the local authorities about what they are thinking of doing. But to give a community council a prescriptive right to this kind of information is not the right way to set about it. For a start, I think it is quite impossible to draft a requirement in such a way as to make it really bite. The noble Baroness's Amendment refers to "regular and sufficient information about the activities" of the public authorities. Who is going to judge what is "regular" and what is "sufficient" and indeed what is covered by "activities"? We should be chary of writing into Statutes provisions which are incapable—and some are incapable —of accurate interpretation. I do not think it is part of Statute law to introduce vague requirements that cannot in fact be enforced.

More than that, I do not think that what the noble Baroness would want would be merely details of the formal decisions of district or other councils. What are much more important are details of what they are thinking about before they have reached their decisions. I believe an Amendment in another place went so far as to include the words "at the formative stage". Again, to introduce a statutory requirement about giving information of thinking at the formative stage could mean authorities having to divulge to community councils plans which, for genuine reasons, ought to remain confidential at that stage, and once divulged to a community council there could be no assurance of further confidentiality. I ask the noble Baroness to think very seriously whether writing words into the Bill is the right way to ensure what she is seeking and what I think all of us want—certainly we on the Government side want it.

We feel that this question of information must be a matter more of good will than of legal prescription. As I think I said in another context earlier this afternoon when the question of requirement about consultation was raised, I do not believe that vague attempts to enforce consultation or good neighbourly behaviour by Statute have ever proved very effective; they have rather tended to be the opposite. If one includes requirements of this kind, it tends to put the authority on their mettle as to just how much they need divulge in accordance with the Statute. That surely is not what we want. What we want is something informal and forthcoming, and that is much more likely to be achieved without a statutory requirement. There may well be, I understand, perhaps in the formative stages, misunderstandings and frustrations between the statutory authorities and community councils. I would hope they would be the minimum possible, but the important thing is to get these bodies established to see a build up of good will between them and the local authorities. I believe that can be based only on mutual confidence, and not on legislation. Let us keep away from legislative requirements.

One noble Lord who spoke thought the Government should give a lead in this matter. I entirely agree, but suggest that the right course is not to write words into the Bill, but, as there will undoubtedly be circulars and other information going round to those concerned with the formation of these councils, to give a lead through these channels. With those suggestions, I earnestly hope that the noble Baroness will not feel inclined to press this Amendment.

THE EARL OF SELKIRK

My Lords, I am not one who believes profoundly in the community councils, but I think that in certain isolated areas they are really of extreme importance. I have in mind in particular, the upper ward of Lanarkshire where certain isolated communities would not normally be in communication. There they look a lot to community councils and therefore I think they are important. The noble Lord has pinned his faith on good will. What happens when there is no good will? What authority have the community councils to do anything if there is no good will? Good will may exist on both sides, or on one side and not on the other. Has not the noble Lord some kind of suggestion that the community council is entitled to certain information? Information in regard to trunk roads is an obvious example, and there may be all sorts of other things. As this clause stands, there is no authority for any kind of information at all.

This Amendment may not be perfect; it is somewhat vague and it does not commit one to very much. But surely the community councils ought to be entitled to something. I should be happy if modified words were perhaps used, but I think that the community councils ought to be able to say, "We must be informed of those things that are important". Can the noble Lord look at this point again, to see whether words could be put in which would give a little standing to the community council? Even if these words are not perfect, surely something could be put in. Otherwise, it seems to me that we shall leave ourselves wide open to gossip. One will go into the local pub and say, "What have you heard?" The answer will be, "Oh, I have heard that the Lanarkshire district are going to do this", and there will be no reason to contradict it. Surely the information might just as well be properly circulated, instead of one's being dependent on circulars from time to time.

LORD BALERNO

My Lords, before the noble Earl sits down, may I ask whether he would agree to substitute for the word "regular" in the Amendment the words "timeous" or "timely"?

LORD POLWARTH

My Lords, the noble Earl, with his great skill in advocacy, is trying to lead me into saying that I will look to see whether another form of words can be found. All I can say at this stage of the Bill is that if he, with all his legal skill and qualifications, can produce a form of words that is satisfactory and will mean something, and will not be vague and uncertain, then I shall be happy to ask my right honourable friend to consider it.

BARONESS ELLIOT OF HARWOOD

My Lords, I am disappointed in the reply given by the noble Lord, because that is exactly what was said in the House of Commons. The Government said they would consider it, they thought it was important, but everything should be quite unofficial. Those of us who have been working on these jobs all our lives know that vagueness is an excuse for doing nothing. One really has to have something definite to go on. I think the noble Earl, Lord Selkirk, and the other noble Lords who supported me, are perfectly right. We are anxious to support the Government, but they are anxious to do as little as possible and to make it as ineffective as possible.

I will not press this Amendment to a Division to-night, because the noble Lord, Lord Polwarth, has said that lie will consider it if we will reconsider it. I will certainly consult my noble friend Lord Selkirk about it, but I really think that this is a very weak point taken by the Government, because the Amendment has been discussed. The same things were said by Mr. Younger and other Ministers, and they all said, "Yes, of course, we want everything in the garden to be lovely", but they are not prepared to do anything to make it lovely. I hope that at the Third Reading, if we can put down any variation which will make the Amendment more acceptable, we shall do so. Otherwise, the success of these community councils will be considerably jeopardised by the fact that the Scottish Office is so vague as to what they really want when they speak of "good will". It is when there is no good will that one wants to be able to make people cooperate. We will consult about this point and, if we think fit, we will put down another Amendment for the next stage of the Bill and, if necessary, press it to a Division. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.6 p.m.

LORD HUGHES

My Lords, I have spoken to this Amendment and to the following Amendment. It is consequential. I beg to move.

Amendment moved—

Page 32, line 5, at end insert— ("(11) In accordance with such directions as the Secretary of State may give, the regional councils of Greater Glasgow, Lanarkshire, Argyll and Clyde and Ayrshire and Arran, shall combine or have joint consultations in regard to the discharge of any of their functions.")—(Lord Hughes.)

On Question, Amendment agreed to.

LORD HUGHES

My Lords, I beg to move Amendment No. 52.

Amendment moved— Page 32, leave out lines 6 to 23.—(Lord Hughes.)

On Question, Amendment agreed to.

LORD BURTON

My Lords, I beg to move manuscript Amendment No. 52A, and I must first apologise for the fact that it is a manuscript Amendment. In fact, I posted it at the main Post Office in Edinburgh before half-past nine on Saturday and I really thought the Post Office would have delivered it before two o'clock to-day in your Lordships' House.

LORD DRUMALBYN

My Lords, would the noble Lord read the Amendment, because I am afraid there are no copies of it.

LORD BURTON

My Lords, this Amendment is to Clause 56. It reads: (16) The business of any local authority or committee or sub-committee thereof shall be conducted in English.

THE EARL OF BALFOUR

My Lords, I thought my noble friend was moving Amendment No. 42A.

LORD BURTON

My Lords, I am in fact moving Amendment No. 52A, the manuscript Amendment. The position is that a district council has already decided to conduct its business in Gaelic, and has thus disenfranchised some of the councillors. Only yesterday I saw in the Press that one of the new Welsh Councils has had to appoint an interpreter. This appears to be an unnecessary expense to put on the shoulders of the ratepayers, when it is quite simple for the business to be conducted in English. To suggest that some of the business should be conducted in this House in Gaelic would be contrary to Standing Orders. Therefore I do not see why it should not be contrary to orders in district and local authority councils. Therefore I suggest that these words be written into the Bill, and I move accordingly.

LORD POLWARTH

My Lords, having had about one minute's notice of this Amendment for causes outwith my control I am in some difficulty; nevertheless I think the noble Lord who moved the Amendment is perhaps being unduly concerned about the possibilities. Surely this is a matter we should leave to the common sense of the authorities concerned. I do not think we should put a prohibition on the use of another language. It is at their discretion. If there are problems, let us face them in due course. I personally do not see any objection that a subcommittee of a Gaelic-speaking local authority should decide for their convenience to discuss their affairs in Gaelic. I do not think it would matter terribly. This is something we should rot lay down but should leave to the common sense of the new authorities.

LORD KILMANY

My Lords, like the noble Lord, Lord Polwarth, I have had only one minute to consider this question, but I do not think it should be ignored. It seems to me intolerable that a perfectly good English-speaking Scotsman who does not happen to have the Gaelic, and who wants to attend a council to which he has been elected, should be at risk of finding himself on a sub-committee to whose deliberations, because he has not got the Gaelic, he is unable to make a proper contribution, and be unable to represent the views of those who have sent him to the council. Therefore, I support my noble friend and express with all deference great disappointment that the Minister does not take that point of view.

THE EARL OF BALFOUR

My Lords, is this not something that could be written into the standing orders of the local authority concerned, that their business shall be conducted in English, or Gaelic, or Welsh? If it is in their standing orders, which I feel they are perfectly at liberty to make themselves, I would think that the right place for it to go would be into their own by-laws and not necessarily as part of our legislation issued from Westminster.

LORD HUGHES

My Lords, if the Minister is reluctant to see this going into the Bill, I can see that point of view. Is it the sort of thing on which the Scottish Office would be prepared to issue administrative guidance to local authorities particularly in those areas where there might be both English and Gaelic speakers, to make certain that the proceedings are at least recorded in a language understood by all members of the council and not just by some? From this I think it would follow, if there happened to be on the district council, or perhaps an Islands council, someone who spoke only Gaelic, that for his benefit the proceedings could be recorded in Gaelic as well as in English so that he could understand what was going on. This could be done administratively in a way to suit the convenience of local authorities without anything being in the Bill at all. But the noble Lord obviously is on to a proper point; no one should be in the position of going to meetings of a sub-committee consisting entirely of Gaelic-speaking members and then getting the minutes in a language he does not understand. He might just as well stay at home.

LORD POLWARTH

My Lords, I am grateful to the noble Lord, Lord Hughes, for his suggestion. This is the right way to tackle the problem rather than writing it into a Statute which will only create feeling and irritation in some quarters. I will certainly look at what we should do here by means of a Circular or otherwise. I am sure, together with standing orders, that this is the right way of dealing with the matter.

LORD BURTON

My Lords, with that assurance from the Minister I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.13 p.m.

LORD POLWARTH moved Amendment No. 53:

Page 35, line 43, at end insert— ("(b) section 6(3) of the Representation of the People Act 1949 (registration officers);")

The noble Lord said: My Lords, the object of this Amendment is to remove any possible cause for doubt. Under the Representation of the People Act, 1949, there is a requirement for the appointment of an officer known as the registration officer. We have in the Bill reduced to the minimum possible the requirements with regard to designated officers of local authorities. It has come to our notice that in so doing we might have made it impossible for an officer to be designated officially as the electoral registration officer. The object of this Amendment is to make sure that it should be possible so to designate a person. I beg to move.

On Question, Amendment agreed to.

Clause 91 [Social, cultural and recreational activities]:

9.15 p.m.

LORD HUGHES moved Amendment No. 54: Page 48, line 32, leave out subsection (6).

The noble Lord said: My Lords, this is the subsection which prohibits the granting of a licence for the sale of excisable liquor in premises provided by a local authority under Clause 91; that is, premises for social, cultural and recreational activities. When this matter was discussed in another place, the Government were not totally unsympathetic to the idea that changing attitudes over the years have perhaps made it less necessary to stop local authorities from having licensed premises of their own, but as a Committee had been appointed to look into the licensing laws of Scotland at that particular time, the Government thought it would be unwise to do anything of that kind before the Clayson Committee had reported. I understand that in the Report of the Clayson Committee, which has now been made available, they recommend in paragraph 100 that this restriction on premises of local authorities can properly be done away with. One of the things which emerged in the discussion in another place was the ridiculous situation that if you had premises belonging to the local authority and the local authority were holding activities in them they could not be licensed, but if they were let to a club for the same thing, a bowling club for instance, they could have the premises licensed.

I can understand the temptation that might face the Government for them to say, "Let us wait until we hear all the views of all the people who are being consulted about the Clayson Committee's recommendations and then the Government will make up their mind on what legislation may he forthcoming". But as the experience in Scotland, in particular, is that there are more votes to be lost than gained by alterations in the licensing laws, I doubt very much whether this Government, in this Parliament or in the next Parliament, will be in any great hurry to bring forward legislation arising from the Committee's Report. I may be wrong in that, but in any event I can see no reason why in the Local Government Bill we ought not to be remedying this situation now. It has no impact at all on any other part of the licensing laws in Scotland so far as I can see. With the change in the character of the licensing courts being brought about, there is less objection than there would have been in the past to the granting of licences when the licence was granted in the magistrates' court; the argument was that the local authority was granting a licence to itself. Obviously that argument does not now have the same validity. I do not intend to take up time on this. I hope the Government, having seen paragraph 100 of Clayson, may be disposed to go a little further than they were in the Commons. If they are not, I shall be disappointed but not astonished. I beg to move.

LORD BALERNO

My Lords, may I support this Amendment. I think it is very timely one. I speak having been member of the Guest Committee on the licensing laws which was the Committee which preceded the present one which has just reported, the Clayson Committee. This matter was closely debated there, as it was felt that there was a material injustice regarding the licensing of premises owned particularly by a city council. I was also on a Parliamentary Committee dealing with private legislation where we had to enforce the principle of declining to give permission to the Corporation of Edinburgh to sell liquor on its own premises; that was on the legal principle that no person shall be a judge in his own cause. The matter was debated in the Clayson Committee, and so far as I can recollect this is more or less the answer that they have come to. I think it would be only a matter of justice for the local authorities concerned to have it made clear that they can now for these purposes permit the drinking of alcoholic liquor on the premises as indicated in the Amendment.

THE EARL OF BALFOUR

My Lords, Clause 91 of the Bill has been taken pretty closely from Section 132 of the Local Government Act 1948. Almost all the provisions that are really required are already in this clause, and to restrict a local authority to the extent that exists in subsection (6) seems to me to be quite unnecessary. Every security is covered in the rest of this clause. Therefore I should also like to support the noble Lord, Lord Hughes, in saying that this subsection (6) is no longer required.

LORD POLWARTH

My Lords, the noble Lord, Lord Hughes, has tempted me greatly. We have had a lot of talk about temptation. Of course we are not opposed in any way to the purpose behind this Amendment. I should like to make two points. First of all, it is not the purpose of this Bill to review the functions of local authorities in general. This is a Bill to reform local authorities and how local authority functions are carried out, and to ensure that their predecessors' powers are suitably passed and rearranged to fit into the new framework of local government. It is not the purpose of the Bill to make radical changes in any of those powers, any more than it is the purpose of a subsequent clause of the Bill to change the nature of local authority powers; for instance, to license cinemas. If we had done that, the scope of the Bill would have been limitless.

The second reason is a compelling one. The noble Lord said that it would be a temptation to us to say that we must consult everybody on the recommendations of the Clayson Report which, as he so rightly said, recommended that this restriction on local authorities in the sale of liquor should be removed. I do not think it is quite as simple as that. The Clayson Report was very recently published, and we gave an undertaking that any interested parties might make representations regarding the recommendations in the Clayson Report. As we have all agreed, the question of liquor is a delicate one in Scotland and one on which widely differing views are held. I think it is right that we should give time for representations on the Clayson recommendations. We have widely circulated the Report and we have asked all those concerned, and the general public, to send any views they may have to the Secretary of State by November 30. In those circumstances, I think that we have a moral obligation to leave the situation open at least until that closing date, because we have said that we will receive views on the recommendations. However tempting it might be to say, "This is an obvious one; let us slip it into this Bill", I think that we should be wrong to do it now. The right time is when we look at the Clayson recommendations in the light of the representations that are put forward on it. I would therefore earnestly hope that this Amendment is not pressed.

LORD HUGHES

My Lords, I said that I should not be astonished if the noble Lord said something like that. It would have been untrue had I said otherwise, because it is exactly the same as he said to me this morning. I do not think that that is necessarily a good reason for it, but there is a certain validity in the point that this would in fact be altering the functions of local authorities, and that is not the prime purpose, or even a major purpose, of the Bill. I must say that I am disappointed, but I am content to let the matter rest, having aired it. However, I hope that one of the consequences of what the noble Lord, Lord Polwarth, has said about hearing the views of the local authority before November 30 will be that I shall be proved wrong and that the Government will attach some urgency to legislation on this point. But if, having got the views of the local authority on these matters, they then put the matter on the shelf and three or four years from now we are still waiting for legislation, I shall be entitled to feel that we have departed from the subject. We have been talking about temptation. I was tempted to divide, because of the way this Amendment was received, and I might have carried it. The real temptation is in the fact that if the Government lose enough Amendments on this Bill we might encourage another place into thinking that the time is ripe for a reform of the House of Lords, which many of us want, anyway. However, with these remarks I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.27 p.m.

LORD DRUMALBYN moved Amendment No. 55: Page 50, line 24, leave out from first ("or") to second ("are") and insert ("which, being of a capital nature,")

The noble Lord said: My Lords, subsection (2) of Clause 94 defines "capital expenses" for the purposes of subsection (1). In Committee, the noble Lord, Lord Hughes, moved to leave out the words which this Amendment would leave out, because the words, any expenses which are to be…met from a reserve fund would involve all expenditure out of a reserve fund being treated as capital expenses requiring the Secretary of State's consent, even though some of this expenditure was not of a capital nature. We have considered this matter further and we accept that his point is a valid one. The Amendment deletes the reference to reserve funds and provides that, apart from expenses charged to capital or borrowing accounts, 'capital expenses' means any expenses which, being of a capital nature, are to be met otherwise than out of current revenue.

My Lords, I hope that this meets his wishes, while at the same time ensuring that reserve funds are not amassed unnecessarily.

LORD HUGHES

I am grateful to the Minister for this Amendment. He will recollect that at the last stage I had Amendments to this clause and also to Clause 108. I am sorry that during the latter part of his remarks one of my colleagues spoke to me and I did not gather all that he said, so, if I am asking a question the answer to which he has already made apparent, he will forgive me for not paying as much attention to him as I ought to have done. Clause 94, with this Amendment, is now perfectly satisfactory, but noble Lords will recollect that in Committee stage I said that I wished to come back to this point after consulting with local authorities and with the chamberlains in the cities. I spoke, first of all, as it was easiest, with the City Chamberlain in Dundee and he arranged to consult his colleagues, and they assured me they had never believed, they had never been informed, that there was any intention to restrict reserves to purposes of a capital nature, and that they did not believe that what was stated in Clause I08—that they would be prevented from carrying to reserve balances at the end of a financial year—was the position which the Government had been seeking to maintain.

As I understand it, while the noble Lord finished by saying that it would not be desirable for local authorities to amass enormous sums in reserve, I think in these days there is very little chance of that taking place. But am I right in assuming that it is quite clear that if a local authority finishes its year with a surplus on rating account it will be permissible for it, as some of them have done regularly in the past, to carry it to a reserve fund, and then, in framing their estimates for the ensuing year, to decide whether or not they wish to use any of the reserve fund in order to keep the rate down? I believe that within the Scottish Office that is what the position is intended to be, and that there is nothing in the Bill which changes the practice in relation to rate equalisation reserves. If that is the case, then I am content that the points which I raised in the last stage of the Bill have been fully met. May I have that assurance?

LORD DRUMALBYN

Yes, my Lords, I can give that assurance. If expenditure is to be covered one has to err on the side of a little over-estimating rather than under-estimating of expenditure. That means that you will probably have something in hand at the end of the year. Obviously, you can either carry that forward as a balance on the rating account itself, or it can be transferred to a separate account such as an equalisation fund, or whatever. But, as I said, all that we are concerned with here is not that the present practice should be changed, but that there should not be a habit of building up a non-statutory reserve fund to undue proportions.

LORD HUGHES

My Lords, if that could be interpreted as the noble Lord having interrupted me to enable my question to be answered, I will now finish my speech by saying that I am very satisfied with the whole matter and support the Amendment.

On Question, Amendment agreed to.

Clause 96 [Accounts and audit]:

9.31 p.m.

LORD STRATHCLYDE moved Amendment No. 56: Page 51, line 5, after ("audited") insert ("by a Professional Accountant, who is either an Officer of the Commission for Local Authority Accounts or is an approved Auditor appointed by the Commission")

The noble Lord said: My Lords, it may well be that it will be for the convenience of the House and of my noble friend the Minister if, with this Amendment, I were to take the two following Amendments and were to speak to them all together. Apart from the heading, "Accounts and audit", it is in line 5 on page 51 that the word "audit" is first mentioned. That is in subsection (4), which reads as follows: The accounts of every local authority in respect of any financial year shall be audited…

It seems to me that at that point it would be reasonable and logical, and also helpful, if the Bill stated the types and the qualifications of the persons who were to conduct these audits. Accordingly, my Amendment starts by stating that the first essential is that the audit should be conducted by a professional accountant; that is, a man fully qualified in accountancy. Then, to keep in line as much as possible with the Bill, my Amendment continues, …who is either an Officer of the Commission …or is an approved Auditor", both of them being appointed by the Commission. That, my Lords, is my first Amendment.

Let me now move on to my second Amendment, which is to Clause 97, page 52, line 19. It is to delete the words "any other person" and to insert in their place, Officers of the Commission, being Professional Accountants, and approved Audi tors"— and then the words which follow are already in the Bill— appointed by the Commission for conducting audits or, as the case may be, a particular audit under this Part of the Act".

To that, my Amendment adds the words: Approved Auditor means an Auditor who is qualified under new subsection (7) below".

My Lords, it is surely quite unacceptable to set forth in an Act of Parliament that "'auditor' includes…any other person…" Left like that, it would empower the Commission to appoint anyone at all to audit the accounts of a local authority. I have no doubt that my noble friend will say that the Commission would never do anything so ridiculous. That may be the reasonable expectation, but it is certainly not a certainty; and in relation to the serious and important duties of an auditor, the qualifications of the persons to carry out these duties should be strictly defined. These qualifications are set out in my next Amendment; that is, after subsection (6) to insert subsection (7), which is as follows: A person is qualified under subsection (6) above if, and only if, he is a member of a firm, all the persons wherein are members of one or more of the following bodies—that is to say: The Institute of Chartered Accountants of Scotland. The Institute of Chartered Accountants in England and Wales. The Association of Certified Accountants. The Institute of Municipal Treasurers and Accountants. The Institute of Chartered Accountants in Ireland. Any other body of Accountants established in the United Kingdom for the time being approved by the Secretary of State.

I think that gives plenty of scope from which to find an approved auditor.

I sent to the Secretary of State on October 2 a letter to which I attached a copy of the Amendments I proposed to put down on Report stage and I asked that a copy of that letter be sent to the Minister of State which went on the same day. With his usual courtesy, my noble friend sent me a detailed reply a copy of which reached me on the following day; that was last Saturday. The original letter is still seemingly in the post. It may be that when my noble friend comes to reply he will mention some of the points he makes in that letter, and perhaps if I deal with them now it would save the time of the House later on.

While, the consultations between the Scottish Office and the representative of the Institute of Chartered Accountants of Scotland, and the Local Government Auditors (Scotland) Association were conducted throughout in the most friendly and agreeable manner, the accountants made it abundantly clear from the very start that they did not consider that adequate reasons had been put forward to justify the setting up a new whole-time audit department. They stated that they had never heard of an auditor's certificate being thrown back by the Department or of any complaint of lack of knowledge on the part of local government auditors. Later, however, following our discussions, assurances having been given on various matters and further consideration, representatives of the accountants agreed that the proposal to establish a Commission with the responsibility for the supervising of audits in Scotland of local authorities was acceptable to them.

The one outstanding matter remaining was the auditing of local authority accounts by a member of the commission staff. The representatives of the accountants held from the start that this is highly controversial, that it is not necessary nor, indeed, that it is right in principle. These opinions they still adhere to. It is to help towards clarifying this situation that my Amendments are directed.

On Second Reading I asked why the Bill should be so coy about the qualifications of persons to be approved by the Commission for the purpose of conducting audits. I said that in consequence there was a submission that this exercise; that is, the setting up of the Commission and the appointments by it of auditors, was for the purpose of introducing district auditing into Scotland— matter which in England caused much ill-feeling between the accounting profession, district auditors and the Government Department concerned; a situation which has been relieved by the greater scope given to the accounting profession in England by the new English Local Government Act 1972. My noble friend the Minister, in replying to the debate, assured me that this was not a subtle plot: but I must say that as matters have developed I find those matters which the English accountants most disliked are becoming evident in this Bill. I have, for instance, received letters commenting on the strangeness of the Scottish accountancy profession being shackled in a manner from which the English profession has after many years succeded in freeing itself—at least to a considerable degree.

In his letter my noble friend said that we ought to be able to trust the Commission to be exacting about the qualifications and experience when making appointments, whether as full-time employers or agents. In that connection the use of the word "agents" has never been explained. Perhaps the Minister will be so kind as to explain when he replies who are these agents, what they do, what are their qualifications and how they are selected.

My noble friend again in his letter said that specifying membership of the professional institutions would be undesirable by implying that nothing else matters. When one is considering applications for important appointments, surely one does not merely take account of the initials following the name of the applicant but also of his personal qualities. That apart, membership of the institutions I have mentioned is proof that the applicant has gone through one of the most rigorous courses of training over a period of some six or seven years. Apart possibly from that of medicine it is the most rigorous of all qualifications for entry into any profession. Let me add that the Scottish chartered accountant is recognised throughout the world, and particularly in Canada and the United States of America, as being highly trained, hard-working and of the highest possible integrity.

My Lords, I get the feeling that these qualities are being undermined in this Bill. I personally feel that these matters concerned with auditing in a way cast a reflection on the profession, that great profession, particularly the Scottish profession. I hope, however, that the Amendments to which I have spoken may be found to be helpful and necessary to obtaining higher standards of audit.

THE EARL OF BALFOUR

My Lords, I certainly took this matter up by letter when it was going through the Committee stage of another place. It is an interesting point and one which I think possibly I should very briefly explain. The information that we had at the time was that Her Majesty's Government did not feel that accounting qualifications should necessarily be specified for local authority officials and that it was their intention that they should not interfere in this way and it was something they did not want to introduce. This Bill removes a number of requirements that local authority officers should have particular qualifications. It seems invidious to legislate that the auditors, be they local authority or Commission auditors, should have certain defined qualifications. Under Section 197 of the Local Government (Scotland) Act 1947 appointed auditors have not been required to show particular qualifications but are to be "fit persons"— requirement which has in practice been interpreted as meaning that they should be qualified accountants. This is an effective continuation of the current practice and the Government considered it unnecessary to introduce new statutory requirements. I felt that this was a satisfactory answer. I do not think that we need to lay this down in legislation.

LORD POLWARTH

My Lords, nobody would agree with the noble Lord, Lord Strathclyde, more readily than I in what he said regarding the accountancy profession. It would indeed be surprising if I did not as I am a member of it myself and a member of the same Institute as the noble Lord. By saying that, I consider that I have declared my interest. I feel that despite the concern expressed by the noble Lord, Lord Strathclyde, about the new provisions for audit, he has no grounds for fear. There has been much discussion on this matter with the professional bodies. I agree that they have expressed reservations about audit work being carried out by the staff of the proposed new Commission. Certainly in recent months we have had no approaches whatever and we understand that, with the reservation expressed but not persisted in, the proposals have the acceptance of the professional bodies and of the Local Government Auditors' Association.

May I explain the purpose of this Commission, as I think that this is part of the difficulty? The present arrangements for local government audit in Scotland involve the appointment of auditors by the Secretary of State. I will not go so far as to say that my right honourable friend is the least suitable person to undertake such a selection. But I am sure your Lordships would agree that it is not a very easy function for a Government Department or a Minister to carry out. It is an invidious task. It cannot be carried out by the local authorities. The appointment must he independent because the audit is on behalf of the ratepayers and not the local authority. This is where we feel that the Commission is an important new instrument. It will be an independent body carefully selected. The profession will be represented on it as well as local authorities and other independent persons. It seems to us best to put the choice of appointing auditors for local authorities into the hands of this new independent body which will be seen to be independent. If we do this we feel it important that members of the staff of that Commission, in order that they may know fully what they are dealing with and the problems involved, should be able to have experience of auditing local government accounts. This is why the profession is placed in the Bill. They will thereby become fitted to discharge their functions.

There is nothing sinister in the word "agent". In this context "agent" means a firm of accountants or individual accountants who are given audit appointments by the Commission. They are the people my noble friend wishes to see carrying out these orders. To specify narrowly the institutions to which the auditors should belong would, I think, be a mistake. After all, there are few other concerns I can think of from which proper persons could be found. To specify these people would be to indicate that unqualified accountants in one of these institutions would be fit and proper persons to do this work. Heaven help the local authority which had me let loose on it to audit its accounts! That is a specialised business. Comparatively few firms are anxious to undertake it, and in the past we have found that a number of firms have been involved in local authority audit who perhaps have not had the resources or skill to deal with the problems that will be involved, certainly with the new larger authorities.

Throughout this Bill we are trying to get away from restriction and to accord greater freedom. I think the right thing to do is to appoint an independent body and leave to them the discretion to appoint proper people to carry out the audit whether from the profession or, on occasion, from their own staff, in order that they may understand all the intracicies of local government audit. So despite the very proper enthusiasm of the noble Lord, Lord Strathclyde, for the honour and qualifications of the profession to which we both belong, I hope that he will not insist on his Amendment.

THE EARL OF SELKIRK

My Lords, before my noble friend sits down, could he say what is the point of the words "any other person"? He is asking me to approve this. Could he define it more closely?

LORD POLWARTH

My Lords, surely we cannot have any latitude unless we have a description of this kind. After all, there will be many people engaged on audits who are not qualified. The person in charge may be well qualified, but do not let us assume that an audit is carried out by the senior partner of the firm, or, indeed, entirely by a partner. There certainly was a stage when the Scottish banks insisted that the only person allowed to carry out their audit was the partner appointed. The result was, as I recollect, that the partner spent a great deal of time doing fiddling work which ought to have been discharged by a junior clerk. As I understand it, the object is to ensure that people under supervision may be brought in to do the work, and they do not all have to be qualified.

LORD STRATHCLYDE

My Lords, I want to make it plain, in case it is not clearly understood by all your Lordships, that hitherto no auditor of a local authority in Scotland has been other than a professional accountant and a member of one of the great institutes of which I have spoken. My point is that now

any unqualified people, as my noble friend has said, may well be—nd indeed it is intended that they should be—appointed to audit accounts. The difficulty of that, to my mind, is that they will not have a broad experience of auditing. They will be in a prescribed area. They will tend more and more to follow a routine audit. They will not have the experience which comes from years of practising auditing all kinds of commercial accounts and looking for points to discover if anything is wrong. It seems to me that this whole idea is a deterioration of the audit.

My Lords, there is another point that I would bring to your Lordships' attention; that is, that every new body that is set up tends to grow. I have seen them in the service to which I belong, in private life and in government. They have grown and grown. It seems to me that what may well happen here is that the Commission will grow, its staff will grow, and in consequence they will be more and more inclined to put their own staff on to this work of auditing, until in a few years' time there will be no professional accountants in the business. It is all very fine for the Minister to talk about trusting this and that. These things should be laid down in the Bill. That is my belief, and I should not be surprised to hear that it is the belief of my noble friend Lord Selkirk. I am not satisfied with the explanation. I think the idea is wholly wrong and misleading, and in the circumstances I propose to press my Amendment.

9.54 p.m.

On Question, Whether the said Amendment (No. 56) shall be agreed to?

Their Lordships divided: Contents, 24: Not-Contents, 22.

CONTENTS
Balerno, L. Gray, L. Selkirk, E. [Teller.]
Burton, L. Greenwood of Rossendale, L. Sempill, Ly.
Cork and Orrery, E. Hughes, L. Shackleton, L.
Cromartie, E. Kilmany, L. Shepherd, L.
Davies of Leek, L. Lauderdale, E. Stonehaven, V.
Dundee, E. Llewelyn-Davies of Hastoe, B. Strange, L.
Elliot of Harwood, B. Margadale, L. Strathclyde, L. [Teller.]
Ferrier, L. Molson, L. Tanlaw, L.
NOT-CONTENTS
Atholl, D. Denham, L. [Teller.] Ferrers, E.
Balfour, E. Drumalbyn, L. Gowrie, E.
Colville of Culross, V. Eccles, V. Hewlett, L.
Kilmarnock, L. Redesdale, L. Strathcona and Mount Royal, L.
Mowbray and Stourton, L. St. Aldwyn, E. [Teller.]
Pender, L. St. Just, L. Stratheden and Campbell, L.
Polwarth, L. Sandford, L. Tweedsmuir, L.
Rankeillour, L. Sharples, B.

Moved accordingly, and, on Question, Motion agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.

EARL ST. ALDWYN

My Lords, I feel this may be an opportune moment to move that the Report stage of the Local Government (Scotland) Bill be now adjourned.

House adjourned at two minutes past ten o'clock.