HL Deb 09 June 1975 vol 361 cc42-63

Second Reading debate resumed.

4.27 p.m.


My Lords, after discussing for a few minutes the results of the referendum, which was very largely achieved by the co-operation of men and women of good will of all political Parties and of none, it is with ill-concealed distaste that I find I have to revert to the piece of legislation which is now before your Lordships' House, which is a divisive, shabby and evil little Bill. I describe it as evil, because there are two great conflicts closley intertwined which are threatening our democratic way of life. One is the conflict between the rule of law and the forces of anarchy. This Bill gives comfort to those who espouse the cause of anarchy. The other conflict is between the rule of Parliament and the domination of extra-Parliamentary pressure groups. This Bill gives encouragement to those who seek to bypass Parliament as the sovereign power in this country.

I look at this Bill from three aspects: first of all, to see who is to be helped; secondly, to find out how it is that they are to be helped; and, thirdly—and this is not the least significant feature—to find out who is doing the helping. The first feature—who is to be helped—we now know. It is about 400 councillors for whom it is necessary to legislate. As the noble and learned Lord, Lord Hailsham of Saint Marylebone, has made clear, that means 400 councillors who in the ordinary way would be surcharged as a result of negligence or misconduct, who would find it idle to appeal under Section 229 of the 1933 Act, and who would find it idle to apply for relief under Section 230 of that Act on the ground that they had acted reasonably or in the belief that their actions were authorised by law. In other words, it is abundantly clear that this piece of legislation concerns, and concerns only, 400 or so councillors who quite deliberately defied the law.

It is therefore wholly unnecessary to consider this afternoon any question of those councillors who may inadvertently have got into difficulties, those councillors who found the Newcastle Amendment somewhat complex, those councillors who were waiting in good faith for a housing commissioner to be put in. We are concerned only with those who deliberately broke the law, and, indeed, it emerged in the debates in the other place that already in some half a dozen cases district auditors had not imposed surcharges in cases where councillors had indicated that they were genuinely confused about some of the provisions of this Bill. It is those whom we are helping.

How are we helping them? The answer must be that we are helping them by a combination of firmness and fairness which appears to be characteristic at the moment of Her Majesty's Government. The firmness emerges in Clause 1, where it is clearly stated that all those who are about to be surcharged—and there appears to be a nasty attack of some unmentionable illness which has afflicted all the district auditors and has caused them to be unable to complete their audits at the present time—will be relieved of every single penny of the surcharge and relieved of every single day of the disqualification which they deserve.

The firmness appears in Clause 2, where it is decreed that the deficit which may result from the actions of those councillors may be imposed not merely as the noble and learned Lord, Lord Hailsham, indicated, upon the council tenants in that area but upon the council tenants in the whole new successor area who may have had nothing whatever to do with the election of the defaulting councillors and not gained one single half-penny from their activities. The fairness is continued in Clause 3, where it is said that the same or a similar burden may be placed not on council tenants but on ratepayers, again outside the area—if the council think it fit—which had any responsibility for the activities of the councillors. Indeed, one council in Derbyshire has already indicated that, if this Bill is passed, they propose to ensure that the deficit is met by the ratepayers in the new area which has no connection with the old area in which the defaults took place.

Then we come back to the firmness of Clause 4 where it has been decided that, in regard to the Clay Cross councillors, the surcharge having taken place for £7,000, nothing can probably be done about that except that the money will be raised by some fund, no doubt from some generous anonymous donor in the expectation of some reward. So far as the disqualification of the Clay Cross councillors is concerned, it is not of course possible to remove that retrospectively but it is to cease to run upon the passing of this Bill. The only provision missing from Clause 4 is that the Government have apparently failed to make any provision for compensation to the Clay Cross councillors for loss of Office.

That is how these councillors are to be helped. Let me turn, if I may, to the question of who is doing the helping. It is not in dispute that these councillors are members of the Labour Party. A Member of Parliament who was the chairman of the Tribune group went on record as saying: Labour councillors are right to ignore the Rent Bill". There was a Labour Party Conference held at the time when the law was still being defied by many of these councillors which passed a Resolution which said: Conference further agrees that upon the election of a Labour Government all penalties, financial or otherwise, should be removed retrospectively from councillors who have courageously refused to implement the Housing Finance Act 1972. It was Mr. Edward Short who said at that Conference, after saying that of course he would not encourage anybody to break the law: Clay Cross is something rather special. It really is. I think everybody in Britain, in the Labour movement and outside, were full of admiration and sympathy for the stand that the councillors have taken. My Lords, if one looks at who is being relieved, how the relief is to be offered and who is doing the relieving, it is simply that we have here a situation in which a Labour Government are bailing out their own political friends and associates, in circumstances in which they promised that they would do so, while the law was deliberately being broken by those people. One appreciates of course what the noble Lord the Lord Privy Seal has said about tempering justice with mercy, though I find it difficult to see how suspended sentences or the parole board really come into this discussion. Of course it would be proper to extend leniency in an appropriate case, but I would venture to suggest two considerations: one is that some grounds must be given for extended leniency, and so far none has been given; and, secondly, the leniency must be seen to be extended by an independent tribunal. If I may say so, I think I know what the noble and learned Lord on the Woolsack would say if we had an unhappy situation in which some High Court judge having a brother who was charged with fraud, insisted on having the case put in his own list and then, as he would be entitled to do, recording a verdict of Not Guilty before the jury had even been sworn in.

If leniency is to be shown, as it may well properly be shown to these councillors, in order that there can be any confidence in our Parliament and any confidence in the Administration abroad, it must be shown not by their own political associates but by an independent tribunal, and in this case this means by referring the matter to the courts. The noble Lord the Lord Privy Seal added that there was some precedence for the course that is now taken. I venture to doubt whether precedents are of any great value. We are not sitting in our judicial capacity, interpreting a difficult point of law; even if we were we would not be hound by what any other judge decided about the same point of law.

We are asked today to take a political decision about a political problem in the circumstances of 1975. It was suggested by the noble Lord the Leader of the House that the Poplar case in 1927 had provided a precedent. I venture to doubt that, for the reasons so well expressed by the noble and learned Lord, Lord Hailsham; although if he will forgive me I would add that I think that at a very late stage in the deliberations on that Bill there was an Amendment introduced by Mr. Neville Chamberlain which in fact did remit the surcharge for the Poplar councillors, not only for the long period up to the date of the House of Lords' decision which made the law clear, but for the comparatively short period afterwards, when they must have known that what they were doing was wrong. But Mr. Neville Chamberlain wound up the Second Reading of the Bill which he introduced in 1927 by saying: The only people at whom this Bill is aimed are those people, if there be any such, who wish to go further than the law allows them and who wish to set up a counter authority to the action of Parliament. He wound up his speech on the Third Reading by saying: Those who cannot show that their action was reasonable or that they thought they were acting in a justifiable manner, that is those who must admit that they were deliberately and intentionally acting in defiance of the law, cannot be fairly excused from the surcharge and ought to be taken out of the local administration of this country. I doubt whether the noble Lord the Leader of the House could work any of those expressions into his final observations when he comes to reply to the debate on the Second Reading of this Bill. I must add that I find it an enchanting thought that there may be in the near future a subscription list got up by the Tribune group so that there may be erected in the market place at Clay Cross a statue of Mr. Neville Chamberlain. If we are to talk about precedent, the real precedent for which we seek today—and I doubt if there will be any answer forthcoming—is a precedent for a political Party that becomes the Government quite deliberately removing all the penalties from its own supporters who have flagrantly broken the law while that Party was in Opposition, and to whom that Party had pledged its support at the time they were breaking the law. If we talk about precedents, I suspect that it is this Bill which is in danger of becoming a precedent in the future.

My Lords, the noble and learned Lord, Lord Hailsham of Saint Marylebone, indicated the possibility that the ratepayers of Derbyshire might be deeply aggrieved by the fact that there was to be inflicted upon them responsibility for this deficit, although they did not even come from the area involved. Supposing that the ratepayers, with the active encouragement of their local Conservative Associations were to refuse to pay those increased rates. Do the Government not realise that they would have to remain silent as the Conservative Party Conference this autumn passed a resolution espousing the cause of those ratepayers, thus defying the law? Do the Government not realise that they would be unable to say a word as the Conservative equivalent of Mr. Edward Short—a formidable concept!—went on record, while the law was being broken, as saying, "This was a very special case"?

Do the Government not realise that their lips would be sealed as a Conservative Attorney General advised that although, of course, it would not be proper to remit the rate increases where they had already been levied, the situation was totally different where the rate increases were about to he levied, and it could be entirely proper for Parliament to act in that way? Do the Government not realise, indeed, that they would be unable to take any action or make any protest if the Conservative Party were returned to power, and then passed a Bill which decreed that not only were the ratepayers of a particular area not to pay the increased rates, but that the whole of the deficit would be visited on the council house tenants of Wapping? Do the Government not realise, in a word, that by this Bill they are taking several substantial strides along the road to lawlessness?

My Lords, in those circumstances, my noble friends on these Benches have had to consider what would be the appropriate course to suggest to your Lordships' House on this Bill. I would suggest that there are ample grounds for rejecting this Bill in its entirety this afternoon. It is well within the constitutional position that this House should take up matters where issues of such fundamental importance are involved. What causes us to hesitate is simply that rejecting this Bill still leaves a problem which requires solution. It would still leave some 400 councillors about to be surcharged with sums which, to them, are no doubt quite astronomical. It would still leave therefore a deficit that would have to be raised from some source or another.

In those circumstances it seems to my noble friends and myself that the best course is to wait until the Committee stage of this Bill and then proceed drastically to seek to amend it, in the first place, in such a way that those who have deliberately broken the law, those who, in the words of the noble and learned Lord, Lord Denning, flagrantly defied the law and deserve to be disqualified, should be disqualified; to amend the Bill, secondly, so that the question of the extent of the surcharge, if any, which each councillor should pay should be assessed by the courts and not by the Government, and should be assessed in a manner which will be fair and equitable, not oppressive. Thirdly, it is best to amend the Bill so that the deficit that inevitably must arise is visited upon those specific areas and those specific people who profited from the failure of the councillors to implement the law, and not upon people who were totally removed from its operation. I say at once that it will be a very different Bill, I hope, that we will send back to the other place in due course. It will be a totally different Bill because instead of destroying the foundations of our democratic society, it will seek to strengthen and to support them.

4.45 p.m.

The Lord Bishop of DERBY

My Lords, I speak as the Bishop of Clay Cross, and as having a responsibility not only for the people of that parish, with its so-called rebel councillors, their supporters and their opponents, but also for those people who live in the area of the new North-East Derbyshire District Council. I am concerned with the ordinary people of this area, and a number of them have asked me to speak against this Bill.

I believe, like them, that this Bill imposes financial penalties on people who have done nothing to deserve them, and that it lifts penalties from others who equally clearly deserve them. Most people who live in the area believe that the injustices that the Bill perpetrates are wrong in themselves and could have serious consequences for our national way of life in the future. It is difficult to convey the sense of moral outrage on the part of members of all political Parties, and of none. I can assure your Lordships that the people of the area of North-East Derbyshire are deeply aggrieved at what is proposed.

I appreciate the way in which the noble Lord, Lord Shepherd, introduced the Second Reading of the Bill, but it seems to me that he ignored a number of essential considerations. I do not approach this matter as a member, or even as a supporter, of a political Party. I should be opposed to this Bill, or to any other Bill containing similar provisions, if it had been introduced by a Government of any other political colour. I should be opposed to it no matter the nature of the legislation that the Clay Cross councillors and others had defied. My basic convictions are those of a local justice of the peace who found himself conscientiously bound to resign when he knew that this legislation was being introduced. That man is a general practitioner in Clay Cross, a good physician, and a member of local government, until a few years ago his position was made intolerable.

When I drive to the Chesterfield area, as I do frequently, I join the main road from Derby a few miles South of Clay Cross. I remember vividly the first time, five and a half years ago, that I first set eyes on the town, and the impression of dereliction that it made on me. It could do with a few pieces of sculpture, as well as a great deal more improvement. By coincidence, it was the first parish in the diocese in which I spent an entire day meeting people and trying to learn something about the life of the community. Also by coincidence, my day began with a visit to the council offices, where I met the officers who were later so tyrannously—and I use the word advisedly—prevented from doing their duty. From my knowledge of the town I well understand the councillors wanting to improve its housing, to increase wages, to bring a number of unemployed people back to work. Like all of us they acted from mixed motives, but some of their motives were very good. I do not forget that one of those councillors, now disqualified, still suffers the effects of a mining accident and has been unemployed for three years.

It should be recognised wholeheartedly that the councillors concerned have never at any time sought any financial or other reward for themselves. They have striven for no personal advantage except the possession and exercise of power. What the ordinary person who is not a follower of theirs cannot understand, however, is why, if he contracts individual or corporate debts, he is both punished and has to repay them. These councillors are let off with something near complete remission. An argument can be produced in favour of remission along the lines that the councillors were misguided; that they did wrong in defying the authority of Parliament; that they dealt unwisely with the ratepayers' money; that they and Her Majesty's Government regret all this, and therefore it is right to show compassion, forgiveness or mercy, or wipe the slate clean. That is a legitimate argument. It is, however, muddled beyond any coherence and persuasiveness when remission is urged, as it now is, for offences which are reckoned to be not only permissible but meritorious.

If I may quote again the resolution of the Labour Party Conference, it said: Conference agrees that upon the election of a Labour Government all penalties, financial or otherwise, should be removed retrospectively from councillors who have courageously refused to implement the Housing Finance Act 1972. That resolution was passed in 1973. We have had to wait a long time for the expression of the Government's dissent from that, if indeed such dissent is implied by some of the words of the noble Lord, Lord Shepherd. When unprivileged people, as most people are, defy the law for conscience sake they cannot escape the penalties of their actions, nor do they expect to do so. This Bill introduces the idea that if you break a law because you hold a particular set of political opinions you must be exempted from the usual consequences of moral courage. This seems to me and to the ordinary people I meet to be destructive of our whole concept of a system of laws which saves people from exploitation by this or that powerful group. We have seen in Clay Cross sustained aggressive action by a group of people claiming to be above the law. To imply, as this Bill does, that such action was legitimate is to take a dangerous step towards the acceptance of dictatorship by whatever group of people may happen to gain political power.

Not only are the councillors to be honoured and freed from financial penalty for defying an Act of Parliament, but a host of innocent people, as has already been suggested, are to pay the penalty for them. The financial loss, it is argued, cannot be borne by the taxpayer, but it must be borne by the ratepayers or council tenants. I should make clear that the new area on which these exactions could be imposed is very much larger than the old Clay Cross area. I am sorry to have to say this, knowing that it may be unfair to some individuals, but many people in North-East Derbyshire regard this Bill as sheer political expediency. It is a sad thing that a Party which plainly stands for social justice should decide to act with such palpable injustice towards groups of people who are almost completely defenceless against its present governmental power.

It is a persistent fact of evil, of course, that individuals of complete personal integrity will, as members of a group, do things that they would never countenance in their personal dealings with others. But in this instance, rather than penalise innocent people, Her Majesty's Government should have taken action to secure that those who encouraged councillors in the breaking of the law accepted the consequences of doing so. To follow the different policy of this Bill is the kind of thing which makes ordinary people disillusioned and cynical about politics and politicians. They seem to have a morality which suits themselves; this has been said to me in recent times.

Ordinary people have to suffer for their own foolishness as well as for their wrong doing. Besides refusing to implement the Housing Finance Act the Clay Cross councillors made some very foolish mistakes in their handling of other people's money. This Bill proposes that they should have restored to them the right to be elected to further office in local government before they have gained any greater wisdom. They, however, are not to be blamed entirely, or even chiefly, for all the sorry wickedness and foolishness. They were aided and abetted in it by senior political figures who should have known better and ought rather to have dissuaded them. It is encouraging to be told by the noble Lord the Leader of the House that the Government are opposed to any breaking of the law. This is a reassurance, but it will need to be said much more generally by all the members of Her Majesty's Government before people generally believe it.

There are certainly a great many people, in Derbyshire at least, who believe that this Bill is chiefly intended to get some politicians out of the difficult situation into which they have put themselves by their support of the rebel councillors. It is only politicians with a majority who can make things safe for themselves. If Her Majesty's Government want to preserve Parliamentary democracy they ought not to do any such thing. I believe, and so do those for whom I speak, that morality and law are in this Bill being made subservient to Party political scheming and advantage. Laws can be unjust and may need repeal or reform, but it is both wrong and perilous to try to change them by aggressive wrongdoing and then remove the consequences of the wrongdoing by injustice. I believe that this Bill is wrong in principle and is likely to be morally and politically damaging in its effects on the whole life of the nation.

4.58 p.m.


My Lords, when I used to sit on the Front Bench in this House and noble Lords said that they had come to a debate not having made up their minds, and were waiting until they heard it, I never believed them. Now that I am sitting on the Bench Benches, I find that one does this from time to time, and today is a time when I have done it. I thought, if I may say so, that my noble friend the Leader of the House made an extremely good case for this Bill. I thought it was much better than I believed possible. I have not had time to read all the Commons' Hansards, but I have read many of them. My noble friend's case was then attacked on constitutional grounds from the Conservative Opposition Front Bench, in a speech which I found almost equally persuasive, except for the endorsement of some intemperate extra-Parliamentary words. It was attacked again with ingenious venom from the Liberal Benches, and lastly with a kind of insidious thunder from the episcopal Benches. I say insidious not because of the content of the sound, but because of the quietness with which the indictment was delivered.

I seem to be the only Government Back-Bencher speaking on this Seconid Reading. I want to come on to the reasons for that, and that makes me go very carefully. First, I do not think it right to say that these people have been breaking the law; that they have been defiantly breaking the law and that therefore there is 116 problem. There clearly is a problem. It was explained very well by the Leader of the House. What happened was that a Conservative Government passed the Housing Finance Act, and it was of a nature that would inevitably become a political football. It was said earlier that at one stage it was a glint in the eye of Selsdon Man. I can remember the days when it was one of seven alternative glints in the eyes of the Ministry of Housing and Local Government. We looked at it in those days and said, "Well, at any rate we cannot do that one". So one was astonished when it was done, it being so obviously an object of acute political contention. In fact it became an object of acute political dissension, and it was immediately repealed by the incoming Labour Government.

The Act was repealed at a moment, as the Leader of the House explained, when some people would already be incurring disadvantages and penalties for having broken it, and others would not. The decision had to be taken: what about the others? It would have been very difficult indeed to provide that these audits, and possibly prosecutions and bankruptcies, should go rolling on for ever and ever in punishment of people who have broken a law since repealed. Then we are left with the problem of what to do about the Clay Cross councillors, and left with the present answer.

I should like to take up one or two minor points in the debate. First, many speakers have dwelled on the intrinsic injustice of the new larger local authority charging all the council tenants, or all the ratepayers, in order to recoup this loss. I would certainly find it an intrinsic injustice if it fell on me, but of course the Bill does not force them to do that. The Bill gives them three alternatives: council tenants in one area, or council tenants throughout their area, or ratepayers throughout their area. If they go for the one most likely to be politically inflammatory, then we might leave it to the operations of local democracy to sort their fate out for them. They have another choice.

I cannot stop in my mind relating the two things that we have been discussing this afternoon: the referendum and the Clay Cross Bill, to give it its real short title. I hope that the House will grant me its usual tolerance if I stray from the subject of the Bill for no more than one minute and 30 seconds. In the referendum 22 per cent. of the British electorate took the trouble to walk down to the polling stations and say, No. I believe on grounds of intrinsic likelihood that two-thirds of that 22 per cent. or, shall we say, 15 per cent. of the electorate, were Labour Party people broadly defined. I believe, again on grounds of general experience and intrinsic likelihood, that of that 15 per cent. probably at least one-third voted against the Market on what I would call grounds of Conservative nationalism. They voted against it on the same sort of grounds as some Tory voters voted against it. It is probably true then that we are left with only 10 per cent. of the electorate who voted the way they did on what one would call Left Wing doctrinaire, extremist, militant grounds. If I am right about this 10 per cent. in that matter, it is likely to be In per cent. in other matters, too.

I think that in this Bill the Government—Governments have to do it all the time—have made a deviation from the highest standards of legality, of constitutionality. It is a pity that such a deviation had to be made by the Party of the poor, because any precedent that has been set—and I hope it will not be—may be used by the other Party to greater effect than it could ever be used by the Party of the poor. If it was a deviation, I would say to the Government that I would have voted, if there had been a Division, for the Second Reading of this Bill. I hope to take part in the debates on the Amendments, but may I express the hope that this will he the last time that the Government will find it necessary to make any deviation for the benefit of what we now know to be only about 10 per cent. of the electors.

5.5 p.m.

Viscount RIDLEY

My Lords, I did not come here this afternoon to enter into the legal and constitutional arguments on this Bill, because I knew that that would be done by my noble and learned friend Lord Hailsham. He did it in a brilliant and devastating speech, which could have left very little for anybody else to say. Nor did I expect to come here and hear about Neville Chamberlain, but this House is full of interesting surprises. I want to speak about this Bill from my experience of working in local government. If I may quote the noble Lord the Lord Privy Seal, may I say to him that this Bill has already created a very strong sense of outrage in local government. First, I fear that this Bill will set a terrible precedent; indeed, it has already done so. So many things happen that local government does not like, and references are already being made to "taking up Clay Cross attitudes" on this, that or the other piece of legislation, or to circulars which Governments send out. I should add that the Government of which the noble and learned Lord, Lord Hailsham, was such a distinguished member, sent out some equally unpopular circulars in their time as well. There is no doubt that local government has already discovered that it can break the law, and in some circumstances can get away with it.

Secondly, I fear a threat to the freedom of local government, to which most of us pay lip service. I feel, as one who works in local government, that we should have more freedom where possible. But I also realise that there has to be the ultimate sanction of law behind everything we do. This country cannot afford total freedom on all the issues facing it, and this matter of housing finance is the most obvious example. I fear that the experience of this Clay Cross incident will inevitably result in central Government's increased mistrust of local government, and will gravely damage the relationships between the two arms of government. Thirdly, I believe that many senior members of the Labour Party are totally unhappy at much that is in this Bill. I hope that your Lordships will effectively change this disqualification clause in Committee, on the lines which my noble and learned friend has already indicated. I further think it is utterly preposterous that we should suggest that the ratepayers of a different area should be charged in order to pay the bill for the Clay Cross councillor's defects.

If we amend this Bill everybody in local government will support us and will be grateful to this House for carrying out its traditional role, not in any vindictive sense but constructively so that councillors will never again feel that they can do a "Clay Cross" and get away with it. I might give as an example the Tory authorities which are tempted to defy the present Government's attitude to certain aspects of education; for instance, over direct grant schools or comprehensive schools. This Bill has given them, rightly or wrongly, considerable encouragement, and I think the Government must realise that the Tory councils dis- like these aspects of legislation just as much as Labour councils disliked the Tory Housing Finance Act.

I do not think there can be any such thing as a monopoly of righteous indignation on either side of the political spectrum. These councillors defied the 1965 Labour Government long before the Tory Housing Act. If they were allowed to do so, if they were in a position to do so today, I am sure that they would defy the present Secretary of State for the Environment on his recent statement that council house rents must be allowed to rise. This is the Tory Finance Act rewritten in different words, but this is a subject that we shall not go into tonight.

These people have broken the law, and I hope that this will never be forgotten. The most disquieting aspect is the assumption by the Labour Party that they may defy Tory laws, the feeling that Socialists are so different in all things, that they are almost a separate species within the human race, and a superior one at that. Perhaps I should quote one of the Councillor Skinners—I think these people are all called "Skinner"—who said in a letter to Tribune about a year ago: To those who accuse us of breaking the law, we reply that 'We are keeping the only law accepted by this movement, the principles standing for the interests of the working class'. I wonder whether these are the sort of people we wish to condone.

I do not share the Lord Privy Seal's feeling that this Bill is characteristic of the British approach. It is far from it. It is a shabby Bill. I do not believe that this slate can ever be wiped completely clean. While we are not wishing in any sense to increase the martyrdom of these councillors on the cross of the unlikely material they have chosen, I beg this House not to condone those who put law and order at risk in the name of liberty.

5.10 p.m.


My Lords, I had not intended to intervene in this debate, but it seems to me that we have had too much moral indignation and too little understanding of the circumstances and of the indignation from which these transactions occurred. Society is of its very nature a balance. It is a balance between the power of the Crown, the power of the Government and the rights of the subject. Standing between them is the law, which is in part the product of both, but I would say that that law is not sacred. It is something that moves from time to time and is acceptable and tolerable only in so far as it moves with the moral climate of the times and keeps in step with the strong sensations of the people. The heroes of our Constitution, of the American Constitution and of many other great issues have been people who defied the law because they found it unjust.

Still less is the Judiciary sacred. I feel that a great deal of nonsense has been talked about how one is defying, the rule of law if one alters the sentence passed by a judge. The prerogative of mercy has always belonged to the Crown. If we go back a century or two we see the circumstances in which something like four-fifths of the sentences passed by the Judiciary were altered by the Crown, and if the Crown had not intervened when those laws were cruel the law would have become unacceptable and intolerable to any moral opinion. It was kept in line precisely because the prerogative of mercy was kept and exercised by the Crown and I believe that there has been a loss of nerve by Government and the Crown in not interfering with sentences passed by judges who are seldom in the least expert in the subject.

Legislation is not merely a matter of the court. It is also a matter of Parliament, and if Parliament does not keep the law in line with strongly held opinions then it invites defiance. I do not believe that democracy is the rule of the majority; the majority can be a dictatorship often as bad as any other and sometimes worse. Democracy is the recognition of the rights of minorities. Democracy is a very strong will not to interfere with those rights even though they may be small religious groups, whatever they may be—with a group that feels intensely that to pass such a law would put that group outside the law. We were reaching a state like this when the Housing Finance Act—I will not debate its details—took the authority from the local government which was elected and which had held the authority to fix rents and put it elsewhere, with non-elected bodies. When noble Lords opposite do something so repulsive to a minority, they cannot complain after- wards if that law is put into disrespect, and that is precisely what they did.

The right reverend Prelate talked about "this wickedness". These were men doing what they profoundly believed to be right, with no self-interest of their own. That is not wickedness. We are not concerned with wickedness here. We are concerned with judgment. Then we are told that this is a case of political expediency. Of course it is. It is the duty of Government to be expedient, expedient in getting out of a mess created by their predecessors. The previous Conservative Government created an intolerable situation and the present Government, I believe moderately and sensibly, have found the easiest way out of it, even though it is not a perfect or ideal way out. If there is an Amendment, I should like to see the sum paid by the taxpayers as a whole, by the whole nation. This very bad law should have its consequences paid for by the nation as a whole rather than by the ratepayers of a particular county. Short of that, I believe that here we have had an honest endeavour by honest men who felt they were doing their duty and I congratulate the Government on what they have done.

5.16 p.m.


My Lords, I did not expect an easy ride on the Second Reading of this Bill and clearly, from what the noble and learned Lord, Lord Hailsham of Saint Marylebone, and the noble Lord, Lord Wigoder, have said, I cannot expect an easy ride in Committee. However, I tell them both that I will look carefully at what they said to see the extent to which their suggestions are worthy of consideration and meeting.

It is fair to say that the debate has fallen mainly on the question of Clay Cross. The right reverend Prelate spoke of his own experience from within his area of responsibility, and he perhaps more than any other can speak of the general social and housing situation in that part of the country—of the very great pressures that lie there and some of the political steps that are taken because of those circumstances. My noble friend Lord Paget spoke of those who have broken the law in the past, and as he spoke I could not help but reflect on one who was esteemed in your Lordships' House for many years, the noble Lord, Lord Pethwick-Lawrence. Nobody would ever say of him that he was a man of discredit, but, along with his wife, he went to prison for breaking the law. I know of others who have either been in prison or have been very close to prison for breaking the law. The one thing that could be said of them is that they went to prison for something in which they believed and for which they did not themselves, or any of those connected with them, receive personal gain.

Thus, when one talks of corruption, which I believe was mentioned at the beginning of the debate, one must try to understand the misdemeanour of those at Clay Cross. I would not condone in any way at all what these councillors did under the Housing Finance Act or under other legislation which has got them into difficulty with the district auditor. To the noble and learned Lord, Lord Hailsham, I say that we had no knowledge at all of what the district auditor had in mind, this £50,000 surcharge, when the Bill was being introduced in another place. Nor do we know what in the end will be the full amount of a district auditor's surcharge on these particular councillors even in regard to the Housing Finance Act because the audit has not yet been completed.

To the noble Lord, Lord Wigoder—who I think meant it as an amusing aside when he referred to a strange disease and said that district auditors did not seem to be producing their reports—I say that my understanding is that in most cases the district auditors have completed their book-keeping operation, which I think is the phrase to use, and are now ready to hear evidence; but they have taken the view, on their own initiative, that it would be wrong to impose unnecessary costs on those who may be involved, local authorities and others, until a decision has been taken on this Bill. But the noble Lord, Lord Wigoder, will know that district auditors are independent officers, and that the Government have no say whatsoever as to the way in which they conduct their duties. If the Government were to interfere, I have not the slightest doubt about the independence of the auditors or about how they would react.

The Clay Cross councillors will not, as the right reverend Prelate suggested, be free of their commitment as a consequence of their refusal to comply with the law. The surcharge of £7,000 will remain, irrespective of what happens to Clause 4 and even if there were no other surcharge. That £7,000 remains to be collected from them. In my speech on Second Reading, I put forward three proposals to the House as to how this matter could be dealt with, and I did so in the light of what the right reverend Prelate said; namely, that there is understandable ill feeling and strong feelings in the locality that the Bill will mean that persons who were not involved will now have to pay the price of the activities of these councillors and will have to bear the cost of the fact that some of the tenants were not required to pay the due rate. I ask the right reverend Prelate to look at my speech for I have to say to him that the sums which are surcharged—that is the shortfall between what should have been collected and what was collected, and which was the subject not of malpractice but of inefficiency—would, without the present Bill, fall immediately and directly on the rates and eventually upon the taxpayer. So there is a political problem, as the noble Lord, Lord Wigoder has said. If we left the situation as it is, the full £50,000 surcharge, instead of being paid for—as it can be—by those in the locality which created the problem, would have to come from the much larger area because the legislation now so provides.


My Lords, I hesitate to interrupt the noble Lord by intervening, but surely the situation is that, as far as Clay Cross is concerned, the Housing Finance surcharge is of the order of £106,000. The £50,000 surcharge which is over and above that has to do with matters wholly unconnected with the Housing Finance Act. If that is not so, I have misunderstood the situation.


That is quite true. I did say about the £106,000 that there is no certainty, as far as I know, whether the auditor himself will—


My Lords, I wonder whether the noble Lord will allow me to correct this, because I have read the district auditor's account and, although there may be some detail which is wrong, I feel sure that I read in the second interim report that, as regards the Housing Finance Act, the net figure—that is, after certain allowances had been made—was of the order of £106,000. When we are talking of the £50,000, I believe that I read in the second report that that was unconnected with the Housing Finance Act.


My Lords, that is correct. They arise from two different acts by the authority. I am only doubtful, in regard to the £106,000, whether that is the final figure. However, I shall look at that and deal with it in Committee. But the fact is that, if the Bill were not passed, all this would have to be borne not through rents—if the council decided to do it by rents—over the whole new authority or just the part of the new authority that was represented by Clay Cross; the whole amount would have to be collected from the rates. So I believe that the noble Lord, Lord Wigoder, was very correct when he said that this is a political Bill, in that there is a basic problem which has to be dealt with in our legislation.

The noble Lords, Lord Hailsham and Lord Wigoder, gave an indication of what they had in mind for the Committee stage. I think that that was very much what was fully discussed in another place, so we know roughly the ground which we need to cover. I would not say that the Government are absolutely intransigent on this matter. I think it would be hard to move them on any of the recommendations which were made in another place, but I will certainly see what we can do in Committee.

I want to make only one last point here. It relates to political integrity, whether in Government, in Parliament or in the local authorities. From time to time, there are those who fall from the very high standards which we demand today. Anyone who reads history will see that the demands of public service today are infinitely and dramatically higher than the demands made at the turn of the century. We are judging men and women in public life by standards which are very different even from those of relatively few years ago. There are odd cases in which individuals fall from the highest of those standards. I do not believe that any member of the Government is happy about the present measure, but we have been discussing this solely in relation to Clay Cross. Very few speakers have drawn attention in the course of their speeches to the other 400 councillors who may be involved. None of us knows whether or not they will be, because this is in the hands of the district auditor and depends on the way he finds it right to act.

The noble Lord, Lord Hailsham, thought that we should wait to know who is concerned, what the amount may be and what may he the circumstances, and that we should let some outside organisation like a court decide what should be done. There are attractions in that course, if I may say so. No Government—no Party—likes to bring in measures of this sort which are solely concerned with people who happen to he members of the Party in question, but I ask the House to contemplate the alternative. Over three, four or even more years, there would be cases in the courts involving men and women who have voluntarily given long service to their community but who because they took an unwise decision are now confronted with surcharge and disqualification, and with proceedings through the courts—first the lower court, and then, perhaps, a Court of Appeal. There is also the cost of representing oneself to consider. One councillor may be able to do this under the Government's free legal aid system, while another councillor, because he may happen to be a professional, may have to bear the cost of the case himself. After that, supposing the case goes against him and he is disqualified. Consider all the bitterness that will have been engendered and developed within that local authority.

Could anyone really believe, in the difficult days which undoubtedly confront local authorities—let alone the nation as a whole—that such an atmosphere would be conducive to good order and government? Therefore, my Lords, we have taken the view that we should seek to deal with these 400 and that we should also, on grounds of consistency, take the position in terms of Clay Cross. As I said in my opening speech, on the question of Clause 4 there is a new situation.

This is a matter upon which I am in immediate contact with colleagues. I had hoped to be in a position to say something concrete, but because of the activities with the European referendum have not been able to complete my inquiries and discussions. But we shall be able to deal with this matter at Committee stage, when I hope to be in a position to express the view of Her Majesty's Government. Perhaps we could then proceed with the other matters which other noble Lords on all sides of the House have referred to and which give them disquiet.

My Lords, this is a difficult Bill. Harsh words have been said, and I suspect that they will appear harsher in print than they did to one's own ear in your Lordships' House. But whatever may be said, I believe that this Bill would have been necessary. I believe it really is a question of opinion as to the right balance, one way or another. But these are matters which we could consider very fully in Committee. My Lords, I hope that the House will now give this Bill a Second Reading.

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