Lords Sitting of 25 March 1975

Preamble
The House met at half past two of the clock: The Lord Chancellor on the Woolsack.
Prayers—Read by the Lord Bishop of Birmingham.

REFERENDUM AND UK CITIZENS ABROAD
The Earl FERRERS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what arrangements will be made for enabling United Kingdom citizens who are resident abroad to take part in the Referendum on the Common Market.
The LORD PRIVY SEAL (Lord Shepherd): My Lords, the House will appreciate that I cannot anticipate the publication of Referendum Bill, which is expected shortly.
Earl FERRERS: My Lords, I am grateful for that reply. It will of course be disappointing, because does not the noble Lord realise that there are a great many residents abroad who have been seconded from the Civil Service and who are employed by the European Commission in Brussels, all of whom are concerned to have a vote in the Referendum and who, at the moment, do not know whether they will have such a vote? Can the noble Lord say why he is unable to give this information?
Lord SHEPHERD: Very simply, my Lords. It is because a decision has not yet been taken. This is a matter which we discussed very fully in the referendum debate and I undertook to look at all the points which were made, as well as those made in another place. As I have said to the noble Earl, a decision has not yet been taken, but, clearly, I was correct in saying in my reply that I could not anticipate what will be in the Referendum Bill, which I hope will be published very shortly.
Baroness TWEEDSMUIR of BELHELVIE: My Lords, if it is a fact that he is still taking into account certain considerations in relation to this matter, will the noble Lord the Leader of the House bear in mind that, in what the Government describe as the " unique" procedure of the referendum, Members of this House will be allowed to vote and will he take account of the strength of feeling that United Kingdom residents abroad should also be entitled to a proxy vote?
Lord SHEPHERD: Yes, my Lords. However, as the noble Baroness will be aware—for she has herself been involved in the election process—there are practical difficulties in this matter. These we are now considering. I hope that a decision will be taken very shortly.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, will the noble Lord bear in mind that the Americans have considerable experience of giving their residents abroad a vote, despite the practical difficulties, and will he, if necessary, take advice from them?
Lord SHEPHERD: My Lords, I do not see that there is any need for us to take advice from the United States. The fact is that we have had certain rules and regulations governing elections, but we recognise that the referendum is in a different class and have therefore been looking at these matters. However, I must stress again that there are severe practical difficulties to be overcome.
Lord SUDELEY: My Lords, may I ask the Minister whether he would agree that the point behind the Question is that we should think in terms of Britain first and that is why we should never have entered the Common Market?
Lord SHEPHERD: My Lords, I can only say to the noble Lord with the greatest friendliness that his question was completely irrelevant to the Question on the Order Paper.
Earl FERRERS: My Lords, in view of the fact that the decision has not yet been taken, can the noble Lord say whether the newspaper report which said that the Referendum Bill was about to be published is accurate?
Lord SHEPHERD: My Lords, I said that I hoped that the Bill would be published very shortly.
Lord POPPLEWELL: My Lords, if my noble friend is to reconsider that, can he also reconsider whether people who have decided to leave Britain and settle in the Channel Islands or elsewhere, in order to escape taxation, should be entitled to record a vote on this very important subject?
Lord SHEPHERD: My Lords, as no decision has yet been taken, it is not a question of reconsidering, but I note the view expressed by my noble friend.
Viscount ST. DAVIDS: My Lords, can the noble Lord the Leader of the House tell me whether there are any figures available as to how many people are involved in this Question, both as residents abroad and as people who will be on holiday at the time of the referendum?
Lord SHEPHERD: My Lords, one can make only a very rough estimate as to the number of those who might be entitled to take part in an election in this country who reside abroad or who are temporarily overseas. The only figure that I should like to indicate to the House is that for what is called the " Service vote " ; that is, soldiers serving overseas and their wives, those who serve in our Embassies and Consulates and those working for the British Council. I believe this figure to be about 400,000. I should not like to make a guess at the other figure.
Lord BLYTON: My Lords, will my noble friend ensure that no Peer receives a vote in this referendum because the preponderance of Members here are pro-Market?
Lord SHEPHERD: My Lords, I should not wish to deny the vote in the referendum which has already been given to my noble friend.
Lord CAMPBELL of CROY: My Lords, on this centenary date of the first performance of Gilbert and Sullivan, are we not witnessing a Gilbertian situation in which the Mikado is striving for,
"His object all sublime …
To make each Minister represent
A source of innocent merriment!"?
Lord SHEPHERD: My Lords, I congratulate the noble Lord on his comment. I hope that we can now proceed to the next Question.

TEA PLANTATIONS : WORKERS-CONDITIONS
2.42 p.m.
Lord BRUCE of DONINGTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows :
To ask Her Majesty's Government whether they are now prepared to institute an official inquiry into the wages and living conditions in India and Sri Lanka of the manual employees of British companies under their subsidiary or associated companies conducting tea planting operations in those two countries.
The PARLIAMENTARY UNDERSECRETARY of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord GoronwyRoberts): My Lords, the Governments of India and Sri Lanka are responsible for making regulations affecting employment conditions in their respective countries. As to the recent "World In Action" programme, my right honourable friend has asked for comments from the Ceylon Association in London, which represents British plantation interests in Sri Lanka. He has also invited his colleagues, who will be taking part in the International Parliamentary Union conference in Colombo, to look into the conditions on tea estates in Sri Lanka. He has also spoken to the Sri Lanka Deputy Minister of Agriculture, who is now visiting this country, about the general situation of tea estates in Sri Lanka.
Lord BRUCE of DONINGTON: My Lords, I thank my noble friend for his constructive reply. In view of the fact that British companies which I have approached in relation to the Question have agreed that they would like to participate in an inquiry, would not a Select Committee be the best medium of making a completely impartial inquiry? Would my noble friend agree that the "World In Action " programme and War on Want have done a singular public

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service in bringing to the attention of the public the appalling conditions that exist on the tea plantations in India and Ceylon?
Lord GORONWY-ROBERTS: My Lords, my noble friend has displayed fairmindedness in the way he has approached this Question by providing me—and I appreciate this very much—with both material critical of certain practices, and material reflecting some credit on certain companies. He is quite right in suggesting that well-balanced and factual documentaries, as produced by both television channels in this country, are a great help in enabling public opinion to come to a fair appraisal of a question. With regard to my noble friend's first point, he and the House will be aware that there is a proposal that a Parliamentary Select Committee should be set up to investigate this matter. It is of course for Parliament to decide, but I have no doubt that if such a Committee were set up and made a report my right honourable friend the Secretary of State for Trade would give its conclusions most careful consideration, as indeed he did, with some effect, in the recent analagous— though not quite identical— case of South Africa.
Lord GARDINER: My Lords, may I ask my noble friend whether he agrees that there are today children dying of starvation on these tea estates owned by British companies? If so, instead of sending Members of Parliament to see whatever the tea companies allow them to see, would it not be better to send food? Is there anything to stop the Government making a grant tomorrow to the Save the Children Fund or to War on Want, to which the public could also contribute, so that these children's lives may be saved?
Lord GORONWY-ROBERTS: My Lords, I certainly do not think that there is anything to prevent such action being taken. I am sure that the suggestion of my noble and learned friend should be considered. Beyond that I could not go at the moment.
Earl COWLEY: My Lords, before a Select Committee is appointed, can the noble Lord say whether the Government would be willing to bring to the attention of British companies, operating tea estates in Sri Lanka and India, the code of prac-
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tice and the principles of operation behind it which were set out by the Parliamentary Sub-Committee on British Companies in South Africa? Could not the noble Lord also have a secretary appointed to the High Commissioners in both these countries, to advise companies operating there on the code of practice?
Lord GORONWY-ROBERTS: My Lords, I think that the suggestions of the noble Earl deserve very careful and sympathetic consideration. It may well be that helpful action can be taken by referring to our experience in regard to South African conditions, so that the inevitably longish period which attends the setting up of a Select Committee and the issuing of its report may be anticipated to good result.
Lord BROCKWAY: My Lords, I thank the Minister for his reply. While independent Governments might resent a Government inquiry, may I ask him whether, when British companies and nationals are involved, it is not a duty, on the precedent of the Select Committee on South Africa, to have a Select Committee investigate these charges? I ask that question in view of the fact that South Africa justifiably described as hypocrisy the fact that we should inquire into conditions in South Africa, while leaving conditions in other British territories unexplored.
Lord GORONWY-ROBERTS: My Lords, I think I have indicated the readiness of Her Majesty's Government to entertain the proposal for the application of Select Committee procedures to this situation, as to the South African situation. I entirely agree that we have duties in this direction, and certainly we have humane duties of the kind described by my noble and learned friend Lord Gardiner.
Baroness GAITSKELL: My Lords, may I ask the Minister whether in this case he realises the extent of the bitterness of the people of Sri Lanka over this matter? Is it not true that they blame us for introducing the Tamils into Ceylon when we were there and giving them low wages, and that now they blame Brooke Bond, which is there, for the way that company is behaving?
Lord GORONWY-ROBERTS: My Lords, there may well be bitterness, but I

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hope there is not unfairness, because any discrimination that may have been caused by past practices does not justify the operation of wrongful practices in Ceylon now.
Lord BROCKWAY: My Lords, may I ask the Minister another question, which I hope may be constructive? Does he agree that while a Select Committee could begin with the conditions in Sri Lanka, it might proceed to discuss conditions in all plantation areas, and the whole longterm issue of the treatment of the indigenous people by British companies in those areas?
Lord GORONWY-ROBERTS: My Lords, it might indeed. I note that the all-Party meeting which was convened in this Palace yesterday envisaged some kind of inquiry into conditions in the Third World. It would include the kind of country and the kind of conditions to which my noble friend referred.

SMOKING: ICI EXPERIMENTS ON BEAGLES
2.50 p.m.
Lord HOUGHTON of SOWERBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government (i) how many certificates, and under which classifications, were granted to research staff of Imperial Chemical Industries under the Cruelty to Animals Act 1876 to conduct the recently publicised experiments on beagles to test the effects of smoking, (ii) when the certificates were granted, by whom, and for what period of time, and (iii) how many primates and other species, if any, are undergoing similar tests for a similar purpose, in the research laboratories of the same company.
Lord WELLS-PESTELL: My Lords, there are two Certificates, A and E. They were given by the President of the Royal College of Physicians of London and the Waynflete Professor of Physiology in the University of Oxford on 20th July 1971 and 28th July 1971. No period of time is specified in them. No other animals are being used for this purpose in the
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research laboratories of Imperial Chemical Industries.
Lord HOUGHTON of SOWERBY: My Lords, I am grateful to my noble friend for that reply, which contains a distinct element of reassurance on the extent of these experiments at ICI. Nevertheless, is my noble friend aware that these experiments, which are wholly related to the weakness of human beings for the drug nicotine in tobacco, are part of an increasing number of experiments being conducted in commercial laboratories for commercial purposes? Would he agree that this side of the whole field of experimentation on living animals requires close examination?
Lord WELLS-PESTELL: My Lords, the Government are aware of the strong feelings that have been aroused by the use of dogs in experiments to develop new smoking materials. I think it would be interesting to know that my right honourable friend has decided to refer this whole matter to the Advisory Committee on the Cruelty to Animals Act 1876 and to ask them to report on it as soon as possible. My right honourable friend is taking this opportunity to add to the membership of this Committee, which at present consists of ten persons who are qualified in human and veterinary medicine, under the chairmanship of the noble and learned Lord, Lord Cross of Chelsea, four independent lay persons, as was recommended, as your Lordships know, by the Littlewood Committee. The Advisory Committee are being asked to consider the question in consultation with the independent Scientific Committee on Smoking and Health set up in 1973 by the then-Secretary of State for Social Services under the chairmanship of Dr. Hunter. We are hoping that the Advisory Committee will be able to take these and other matters into account.
Lord PLATT: My Lords, while thanking the noble Lord for his reply to the Question and being extremely pleased to know that the Government, at last, after a ten-year delay by successive Governments, are going to implement one of the important recommendations of the Littlewood Report, may I ask him whether he agrees that this kind of intensive experimentation highlights the need for new legislation, in view of the fact

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that the Cruelty to Animals Act is nearly 100 years old? Have the Government any plans for a new Act to replace the Act of 1876?
Lord WELLS-PESTELL: My Lords, as the Government have decided to refer this matter to the Advisory Committee, I should think that any further action would presumably depend upon what the Advisory Committee recommend. I think it will not have escaped your Lordships' notice that my noble friend Lady Phillips has presented a Bill for your Lordships' consideration dealing solely with cruelty to animals; but, I think, with respect, that we shall have to await the outcome of the Advisory Committee's deliberations.
Baroness EMMET of AMBERLEY: My Lords, I note that the noble Lord said that four additional lay persons have been appointed. Can he say whether any of these lay persons, or other members of the Committee, are women?
Lord WELLS-PESTELL: My Lords, I understand that one of the existing members, that is, of the ten members who have medical or veterinary qualifications, is a woman. I understand that my right honourable friend is also thinking in terms of adding to that number when the four lay people are appointed.
Earl FERRERS: My Lords, in view of the third part of the Question which appeared originally on the Order Paper, can the noble Lord say how many "prelates" are involved and are undergoing such tests?
Lord AIREDALE: My Lords, can the noble Lord say when we may expect the Committee Report to be published?— because from the beagles' point of view this is rather an urgent matter.
Lord WELLS-PESTELL: My Lords, my right honourable friend is aware of the urgency. I cannot give a satisfactory reply to the noble Lord because the Committee have not as yet been asked to report within a specified time. I will see that my right honourable friend's attention is drawn to the noble Lord's supplementary question.

NATIONAL SAVINGS
Lord INGLEWOOD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the downturn in National Savings as shown on page 6 of the Annual Report of the Department of National Savings for 1973–74 has yet been reversed.
Lord JACQUES: My Lords, the brief answer is, yes, on either the wider definition (which includes the Trustee Savings Banks) or on the more narrow definition (which includes only the Department for National Savings). Receipts and accrued interest exceed repayments so far in 1974–75.
Lord INGLEWOOD: My Lords, I thank the noble Lord for that Answer, both in its substance and in the fact that he really answered it with one word— like the Referendum.
Lord HAWKE: My Lords, are Her Majesty's Government aware that if they had shown more zeal in combating inflation, these National Savings would increase even faster?

ASSASSINATION OF KING FAISAL
2.57 p.m.
Lord CARRINGTON: My Lords, I beg leave to ask a Question of which I have given Private Notice. The Question is as follows:
"To ask Her Majesty's Government whether they will make a Statement on the assassination on King Faisal."
Lord GORONWY-ROBERTS: My Lords, Her Majesty's Government have heard with a sense of stock and dismay the tragic news of the assassination of His Majesty King Faisal of Saudi Arabia. We do not yet know the motive for this crime. Nor can we yet foretell its consequences. But I am sure the House will join me in expressing our profound sorrow at the passing of this great Arab and Moslem leader and world statesman. The Arabs have lost one of their foremost sons at a time when wise and moderate counsels are so badly needed.

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Britain has lost a staunch and valued friend, and we— and, I am sure, the whole House— extend our deepest sympathy and concern to all our Saudi Arabian friends at this critical time.
Lord CARRINGTON: My Lords, I know that everybody on this side of the House would like to associate themselves with what the noble Lord has very properly said. King Faisal was a friend, though not an uncritical friend, of this country, and not only we but the Western World in general will greatly feel his death. We must hope that events in Saudi Arabia will provide a successor who is as wise an international statesman as was King Faisal.
Lord WADE: My Lords, this is a very great tragedy. I do not think it is an occasion when one can say anything of much value "off the cuff". King Faisal was a great leader; and I and my colleagues certainly join in the expressions of sympathy.
Lord HOME of the HIRSEL: My Lords, I wonder whether your Lordships would allow me, as I had many contacts with King Faisal and his family, to associate myself with the expressions of shock and dismay being voiced by my honourable friends and noble Lords? It is a tragedy that this man of authority, wisdom and foresight should be removed from the counsels of the Arab nations at this very critical time. I associate myself with everything that has been said.
Lord BLYTON: My Lords, I should like to associate myself with the sympathy that has been expressed on the death of King Faisal. I led a Parliamentary delegation to Saudi Arabia in 1966, when we made a big arms deal, supplying internal defences. When the previous King had been deposed he took the throne of Saudi Arabia. I always found him to be a good, genial man and, apart from all the Arab troubles, I am sure that he was a friend of Britain.

PROCEDURE OF THE HOUSE
The CHAIRMAN of COMMITTEES (The Earl of Listowel): My Lords, in moving this Motion I should like to inform the House that if the Report is agreed to, the proposed new Standing Orders and the proposed amendments to Standing Orders Nos. 38 and 39 will be placed on the Order Paper for Thursday. My Lords, I beg to move.
Moved, That the Third Report from the Select Committee be agreed to.—(The Earl of Listowel.)
The Report was as follows :
1. Hybrid Instruments
Private Business Standing Order 216
The Committee have considered Private Business Standing Order 216 governing affirmative instruments which are hybrid. In doing so, they have taken into account the views expressed by the Joint Committee on Delegated Legislation. They recommend that the present Standing Order should be repealed and be replaced by a new Standing Order as set out in the Appendix.
Private Business Standing Order 216A
The Committee have also considered appropriate procedures for " expedited hybrid instruments " such as are provided for in section 1(7) of the Offshore Petroleum Development (Scotland) Act recently before Parliament. They recommend that the procedures contained in Private Business Standing Order 216 should be adapted to ensure that the proceedings on an "expedited hybrid instrument" are carried out as speedily as possible so as to be invariably completed within the prescribed period. They therefore recommend a new Private Business Standing Order 216A as set out in the Appendix.
Public Business Standing Order 67A
They further consider that the provision formerly contained in Private Business Standing Order 216 to prevent a Motion to approve an affirmative instrument being taken on the Floor of the House before the Statutory Instruments Committee have reported on it, should now be incorporated in a new Public Business Standing Order 67A. The Committee accordingly recommend that a new Standing Order be proposed to the House as set out in the Appendix.
2. Taking the Oath
The Committee have considered the terms of Standing Order 39(5) which states that the Oath of Allegiance may be taken "at any convenient time during a sitting ". The practice of the House is that the Oath may be taken only at the beginning of business after Prayers or at the end of business immediately before the adjournment of the House, but the terms of the Standing Order do not reflect this practice.
The Committee accordingly recommend that Standing Order 39(5) should be amended as follows:—
Leave out "but may be taken at any convenient time during a sitting" and insert " or at the end of business before the adjournment".
3. Standing Order 38— Arrangement of the Order Paper
The Committee have considered the terms of Standing Order 38 which governs the arrangement of the Order Paper. They consider that the effect of paragraph (4) of the Standing Order is not clear in its application to Prayers to annul negative instruments.
The Committee accordingly recemmend that paragraph (4) of the Standing Order should be repealed and be replaced by the following new paragraph: —
"(4) On all sitting days except Wednesdays, notices and orders relating to Public Bills, Measures and Affirmative Instruments shall have precedence over other notices and orders save the foregoing: and on such days the precedence of notices and orders relating to Public Bills, Measures and Affirmative Instruments may be varied if the convenience of the House so requires."
4.Companion to Standing Orders and Simple Guide
The Committee were informed by the Clerk of the Parliaments of the intention to revise the Companion to Standing Orders in the coming year and accordingly have appointed a Sub-Committee to supervise this revision.
The Committee were also informed that work was in hand on the Simple Guide which they had authorised. This too would be submitted to the SubCommittee.
5.Deputy Chairman of Committees
The Committee consider that the post of Deputy Chairman of Committees, presently occupied by the Baroness Tweedsmuir of Belhelvie, should be distinguishable from the Deputy Chairmen who are members of the panel of Deputy Chairmen, chosen by the Committee of Selection each Session.
The Committee accordingly recommend that this post should be known as Principal Deputy Chairman of Committees.

APPENDIX
Private Business Standing Order 216
Hybrid Instruments
(1) Where in the opinion of the Chairman of Committees an affirmative instrument as defined by Public Business Standing Order No. 67A is such that, apart from the provisions of the Act authorising it to be made, it would require to be enacted by a Private or Hybrid Bill he shall report his opinion to the House and to the Minister or other person responsible for the instrument. An instrument on which the Chairman of Committees has so reported is in these Standing Orders referred to as a "hybrid instrument":
Provided that an order under section 1 of the Manoeuvres Act 1958 shall not be the subject of a report under this paragraph.
(2) A petition to the House not to affirm a hybrid instrument shall be signed by the petitioner or his Agent and be deposited or sent so as to be received in the Office of the Clerk of the Parliaments within the fourteen days following the day on which the Chairman's report under paragraph (1) above is laid before the House.
(3) Where the last day allowed by paragraph (2) above for the deposit of a petition is during a period when Parliament is dissolved or prorogued or during a long adjournment, then, subject to paragraphs (4) and (5) below, the period during which the petition may be deposited is extended to, and includes, the first day on which the House sits for public business after the dissolution, prorogation or long adjournment.
(4) Where the last day allowed by this Standing Order (having regard where relevant to paragraph (3) above and paragraph (5) below) for the deposit of a petition falls during the ten days beginning with the 23rd December, Good Friday, the Friday before Whitsun or the first day of August, the period during which the petition may be deposited is extended to, and includes, the first day on which the House sits for public business after those ten days.
(5) For the purposes of paragraphs (3) and (4) above, where the House is recalled in pursuance of Public Business Standing Order No 16 or proclamation, any day on which the House sits pursuant to the recall shall be disregarded.
(6) If no petition is received in the Office of the Clerk of the Parliaments within the period allowed by paragraphs (2) to (5) above, the Chairman of Committees shall report that fact to the House.
(7) Any petition received in the Office of the Clerk of the Parliaments within that period shall, together with the instrument petitioned against, stand referred to a Committee appointed at the commencement of every Session and consisting of a Lord of Appeal as Chairman, the Chairman of Committees and such other Lords as the House shall name. The Committee shall be known as the "Hybrid Instruments Committee".
(8) (a) The Hybrid Instruments Committee shall, after considering any representations in writing by the parties to the proceedings, and after hearing, if they think fit, the parties in person or Counsel or Agents appearing for the parties, decide whether the petitioner has a locus standi; and shall decide that question as if the instrument were a Private Bill and the Committee were a Select Committee on the Bill.
(b) If the Committee decide that the petitioner has no locus standi they shall report their decision to the House; but if they decide that he has a locus standi they shall report to the House:—

(i) whether the petition discloses substantial grounds of complaint;

(ii) whether the matters complained of in the petition have been so dealt with that no further enquiry is necessary ;

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(iii) whether the petitioner failed to avail himself of opportunities of having the matters complained of properly enquired into ; and

(iv) whether or not, in the light of their findings on questions (i) to (iii) above, there ought to be a further enquiry by a Select Committee into all or any of the matters complained of.

(9) Where the Hybrid Instruments Committee have reported to the House that there ought to be such further enquiry into all or any of the matters complained of, the House may refer all or any of the matters on which the Committee have so reported to a Select Committee consisting of five Lords, named by the House on the proposal of the Committee of Selection; and the House shall specify the orders of reference of the Select Committee.
(10) For the purposes of Public Business Standing Order No. 67A the proceedings on a hybrid instrument shall be terminated when: —

(a) there has been laid before the House a report by the Chairman of Committees under paragraph (6) above that no petition against the instrument has been received in the Office of the Clerk of the Parliaments within the period allowed by paragraphs (2) to (5) above, or

(b) there has been laid before the House a report by the Hybrid Instruments Committee under paragraph (8) above that no petitioner has a locus standi or that none of the matters complained of in petitions against the instrument ought to be enquired into by a Select Committee, or

(c) the House has decided that none of those matters be referred to a Select Committee, or

(d) there has been laid before the House the report of the Select Committee to whom any matter has been referred under this Standing Order.

(11) Where proceedings under this Standing Order have not been completed in respect of a hybrid instrument which has expired or lapsed, a further affirmative instrument made or laid in draft to substantially the same effect may be substituted for the previous instrument for the purposes of those proceedings.
(12) This Standing Order shall not, except insofar as it defines a Hybrid Instrument, apply to an " expedited hybrid instrument" as defined in paragraph (1) of Standing Order 216A.
Private Business Standing Order 216A
Expedited Hybrid Instruments
(1) This order applies to a hybrid instrument, as defined in paragraph (1) of Standing Order 216, which, by virtue of the Act authorising it to be made, is, after the expiry of a period prescribed by that Act (in this Standing Order referred to as the "prescribed period") to proceed in Parliament as if its provisions would, apart from that Act, require to be enacted by a public Bill that is not hybrid ; and such a hybrid instrument is in this
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Standing Order referred to as an "expedited hybrid instrument".
(2) A petition to the House not to affirm an expedited hybrid instrument shall be signed by the petitioner or his Agent and be deposited or sent so as to be received in the Office of the Clerk of the Parliaments within ten days beginning with the day on which the instrument is laid before the House. The said period of ten days shall not be extended by any dissolution or prorogation of Parliament, or adjournment of the House.
(3) If no petition is received in the Office of the Clerk of the Parliaments within the said ten days, the Chairman of Committees shall report that fact to the House.
(4) Any petition received in the Office of the Clerk of the Parliaments within the said ten days shall, together with the instrument petitioned against, stand referred to the Hybrid Instruments Committee and shall be subject to enquiry by that Committee only.
(5)(a) The Hybrid Instruments Committee shall, after considering any representations in writing by the parties to the proceedings, and after hearing, if they think fit, the parties in person or Counsel or Agents appearing for the parties, decide whether the petitioner has a locus standi; and shall decide that question as if the instrument were a Private Bill and the Committee were a Select Committee on the Bill.
(b) If the Committee decide that the petitioner has no locus standi they shall report their decision to the House ; but if they decide that he has a locus standi they shall report to the House:—

(i) whether the petition discloses substantial grounds of complaint;

(ii) whether the matters complained of in the petition have been so dealt with that no further enquiry is necessary ;

(iii) whether the petitioner failed to avail himself of opportunities of having the matters complained of properly inquired into ; and

(iv) whether or not, in the light of their findings on questions (i) to (iii) above, they are proceeding with a further inquiry into all or any of the matters complained of.

(6) Where the Committee have decided that they are proceeding with such further enquiry, the parties shall be entitled to be heard in person or by Counsel or Agents and the Committee shall report on such further enquiry to the House before the end of the prescribed period.
(7) For the purposes of Public Business Standing Order No. 67A the proceedings on an expedited hybrid instrument shall be terminated when:—

(i) the Chairman of Committees has reported under paragraph (3) of this Standing Order that no petition against the instrument has been received in the Office of the Clerk of the Parliaments within the ten days allowed by paragraph (2) of this Standing Order; or

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(ii) the Hybrid Instruments Committee have reported under paragraph (5)(a) of this Standing Order that no petitioner has a locus standi; or

(iii) the Hybrid Instruments Committee have reported that they are not proceeding with a further enquiry into the matters complained of; or

(iv) the Hybrid Instruments Committee have reported on the further inquiry referred to in paragraph (6) above; or

(v) the prescribed period has expired.

(8) If a further instrument is made or laid in draft to substantially the same effect as the previous instrument, it may be substituted for the previous instrument for the purposes of proceedings under this Standing Order where such proceedings have not been completed before the prescribed period has expired.
(9) Any report required to be made to the House under this Standing Order shall, if the House is adjourned, be printed and shall be laid on the Table of the House at its next sitting.
Public Business Standing Order 67A
Affirmative Instruments
(1) No motion for a resolution of the House to approve an affirmative instrument shall be moved until:—

(a) there has been laid before the House the report thereon of the Joint Committee on Statutory Instruments ; and

(b) in the case of a hybrid instrument, the proceedings under Private Business Standing Order 216 or 216A have been terminated.

(2) In this Standing Order " affirmative instrument" means an Order in Council, departmental order, rules, regulations, scheme or other similar instrument presented to or laid or laid in draft before the House where an affirmative resolution is required before it, or any part of it, becomes effective, or is made, or is a condition of its continuance in operation; but the expression does not include a Measure laid before the House under the Church of England Assembly (Powers) Act 1919 nor regulations made under the Emergency Powers Act 1920.
(3) An Order in Council that may not be made except in response to an address by the House to Her Majesty is an affirmative instrument within the meaning of this Standing Order, and a motion for an address to Her Majesty praying that an order be made is a motion to approve the order.
(4) An order, rules, regulations, scheme or instrument laid in draft before the House for the purpose of being affirmed by resolution of the House is an affirmative instrument within the meaning of this Standing Order notwithstanding that, if the draft is not approved, that instrument is subject to annulment in pursuance of a resolution of either House.
On Question, Motion agreed to.

HOUSING RENTS AND SUBSIDIES (SCOTLAND) BILL
3.1 p.m.
Report received.
Clause 1 [New system of rents for public sector housing] :
Lord CAMPBELL Lord CAMPBELL of CROY moved Amendment No. 1:
Page 2, line 10, at end insert—
(" .( ) A local authority shall not increase the income receivable from the standard rents of all houses to which their housing revenue account relates so that the average rent increase for those houses is more than £26 in any period of 12 months.")
The noble Lord said: My Lords, before moving this Amendment I should like to draw your Lordships' attention to the five pages of Government Amendments among the others on the Marshalled List. I should like to say that because of the difficulties of distribution occurring before the weekend—and I am glad to see these have now ended—we have had some difficulty, as no doubt other noble Lords have, in being able to consult those concerned outside this House about the Amendments. Most of the Amendments represent new material and are not simply meeting points raised earlier. I realise that on the whole they are not contentious, but there are now two new clauses at Report stage and they follow 19 pages of Government Amendments a week ago at the Committee stage, which the noble Lord, Lord Hughes, thought might have been put in the Guinness Book of Records. As a result, when the Bill leaves your Lordships' House it is likely to be more than twice as long as when it arrived, and it will have two added purposes to the Title.
The noble Lord, Lord Hughes, kindly wrote to me over the weekend and did his best to explain the new Amendments and why they were being introduced at such a very late stage in the passage of the Bill through Parliament. But it has given us very little chance for detailed examination, and certainly no Committee stage is possible for the Amendments being considered today. Also, virtually no opportunity has been given to persons affected by the Amendments to learn of them out-side this House or to comment on them. Therefore, I thought that at the outset

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today I should make it clear that we shall be giving our first reaction and that it is impossible to have had consultations or to have received full representations from people likely to be affected.
I should like to suggest, in view of the consideration of these Amendments and of the necessary manuscript Amendments we have had to make today—because there is one completely new version of an Amendment on the Marshalled List today —that, perhaps, the Government might hold in reserve the Third Reading of this Bill which they may wish to proceed with today. In order to tidy up and make sure that all the consequential of amended Amendments can be considered before the Bill goes to the other place, if it is convenient to hold a Third Reading on some day other than today, I hope the Government will bear this in mind. Otherwise the Bill may go to the other place with defects, even though they may be only drafting defects; and I am sure your Lordships would not wish to do that.
I now beg to move Amendment No. 1. This Amendment is similar to one which was moved at the Committee stage, which ensures that a local authority can increase its average rent by gradual steps each year. It sets a limit to the annual step by which an average standard rent can be raised. This is the limit in the 1972 Act, which is now operating. Unless it is continued in this Bill, the limit of the increase a local authority can make to its average standard rent will be £39—a good deal more than the £26 in the 1972 Scottish Act—that is to say, 50p per week rather than 75p per week.
It appeared to the noble Lord, Lord Hughes, when we considered this at the Committee stage, to be an Amendment worthy of further consideration by his right honourable friend and the Scottish Office. The noble Lord suggested that the Amendment ought more appropriately to be in Clause 1 rather than in Clause 2, where we had put it at Committee stage. At that stage we suggested it should be in the same clause as the limit of £39 for each individual house, per year. Following the advice given, we are now suggesting it should be moved to Clause 1. This is a safeguard, so that the tenants may be assured not only that no individual house can have its standard rent
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increased by more than £39 a year but that a local authority is not expected to put up its average standard rent for all its houses by more than £26. That is the present position, and even under this position there was considerable alarm when the 1972 Act was first being brought into effect—an alarm which was not justified—that rents were to be steeply increased. The 1972 Act made quite sure that could not happen, and we believe this should be continued in order to give that reassurance of a safeguard to tenants in Scotland. I beg to move.
3.8 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Hughes): My Lords, I do not think the noble Lord, Lord Campbell of Croy, attributed correctly the remark that I would consider this Amendment. If I remember rightly, what I said was that the Amendment caused me a certain amount of difficulty, in that it appeared to be imposing a different kind of freeze. It is a temptation to accept the Amendment, but it is a temptation I shall resist, because it would be in conflict with the primary purpose of the Bill, which is to restore to local authorities the right to decide the level at which their rents are to be fixed, having regard to the circumstances in their area. Obviously, circumstances can vary enormously from one district to another. The situation will be more aggravated than it is at the present time, because, in the new districts, different housing authorities are to be gathered together, and, in some cases, there will be a combination of a number of housing authorities in a new district. The new authority will obviously have the task of trying— either immediately or through a staging process —to assimilate one group of rents into the other.
The effect of this Amendment is to bring us back to the 1972 Act situation, with one important difference. The 1972 Act compelled local authorities to increase their rents by an average figure of £26 per year, whereas this Amendment would prevent them increasing their rents by more than £26 a year on average. My objections to this are fundamental— although, as I said, I was tempted by it — because it is as much an interference with the right of a local authority to determine what is a proper level of rents to charge to say to them: "You must

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increase your rents by a certain amount" as it is to say:" You must not increase your rents by more than a certain amount."
It is true that in the Bill we limit the power of local authorities in one direction only; and that is to limit the increase which can be put on an individual house to £39 a year. As I said on Second Reading and at Committee stage, this provision is purely a counterinflationary measure. There is provision for the figure of £39 to be varied by order. There could be a situation when, if inflation were to continue, £39 might have to be replaced by a higher figure. There could, conversely, be circumstances where, inflation being brought into check, there was no need to have any such restriction at all. It is for that reason that there is an order-making power in relation to that. But the effect of the proposed Amendment would be that until and unless another Act of Parliament were put on the Statute Book to vary this figure no local authority could increase its average rent by more than £26.
If I am arguing for the freedom of local authorities to determine matters for themselves, I am willing to concede that that freedom should enable them to fix rents at an average of less than £26 or at an average of more than £26, if that is what is proper to the circumstances. The arguments against the 1972 Act, the arguments which so many authorities and so many individuals put forward, were not against the amount which was charged, because, as the noble Lord himself stated then, and as was stated in your Lordships' House in consideration of this Bill, that amount of course varied enormously from one individual to another, depending entirely on the incidence of rent rebates. The objection was to the principle of denying to the local authority the right to take decisions for themselves. If I were to accept this Amendment, I should be going back to the 1972 Act principles by saying to the local authority: "You are not to have the right to determine it". I should have preferred it if we could have had the Bill without the £39 individual limit included, but I am persuaded that in existing circumstances, having regard to the different steps that are being taken

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by the Government in many directions to help to mitigate some of the worst effects of inflation, this is a desirable restriction at the present time. But it is not intended to be a permanent restriction and can be altered by order. For these reasons I cannot advise your Lordships that this is an acceptable Amendment.
3.13 p.m.
Lord CAMPBELL of CROY: My Lords, to take up the points which the noble Lord has just made, I must make clear that this Amendment would not oblige local authorities to raise their rents by a certain amount, which of course the 1972 Act did. We have had our difference of opinion about that at the Committee stage. This Amendment is one which simply deals with the limit; it does not in any way detract from the right which is being given in this Bill to local authorities to decide on their own rent increases. It has a lower average annual limit—one that is also in operation now under the 1972 Act—than the one proposed in this Bill. So we are not at this stage arguing about making it obligatory for local authorities to put up standard rents. This question is simply" about the limit which an average rent should go up each year. It is by the reassurance of gradual rent increases that one can obtain the confidence of tenants in those authorities where the housing accounts are well below balancing. There are other authorities in Scotland where for some time those responsible have made sure that their housing accounts are almost in balance. Of course, they would not be affected.
The curious fact is that the maximum annual increase permissible under this Bill is considerably greater than the maximum written into the 1972 Act. That much maligned Act provided for an average increase of standard rents of not more than £26. As the noble Lord said, this did not affect questions of hardship because the rebate scheme introduced by the 1972 Act dealt with personal circumstances, and therefore cases of unemployment and hardship for other reasons are not affected by the standard rent. In an unguarded moment during the Committee stage the noble Lord, Lord Hughes, said, at col. 665

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of the Official Report, of 18th March that this
"comes close, not to imposing a rent freeze permanently, but to doing something of the same order."
I found that statement astonishing when he made it, and I do now, because it was this maximum of £26 which was the cause of many rebellions which occurred when the 1972 Act came into operation. The noble Lord is shaking his head, but I can assure him that it was brought to my attention, and I attended many meetings at which many people were speaking of the "iniquitous Tory Housing Act" as something that was going to put people's rents up through the ceiling and very steeply. Eventually we managed in various ways through the media to get over the fact that this was not the case. Many who thought that their rents were going to be put up steeply found that in fact their rents came down owing to the rebate scheme.
I wish that some of the councillors who refused to carry out at first the modest rent increase of £26 in 1972 had a week ago been present to hear the noble Lord saying that this maximum was tantamount to a rent freeze. I am sorry that the noble Lord feels unable to put this Amendment into his Bill. We think it would have been an improvement. But in view of what he has said I do not intend to press the Amendment and beg leave to withdraw it.
Amendment, by leave, withdrawn.
3.18 p.m.
Lord HUGHES Lord HUGHES moved Amendment No. 2:
After Clause 4 insert the following new clause:
Agreements for exercise by housing co-operatives of local authority housing functions
" .—(1) A local authority may make an agreement with a society, company or body of trustees for the time being approved by the Secretary of State for the purposes of this section (in this section called a " housing cooperative ")—

(a) for the exercise by the co-operative, on such terms as may be provided in the agreement, of any of the local authority's powers relating to land or any interest in land held by them for the purposes of Part VII of the Housing (Scotland) Act 1966, and the performance by the co-operative of any of the local authority's duties relating to such land or interest; or

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(b) for the exercise by the co-operative, in connection with any such land or interest, of any of the local authority's powers under section 140 or 141 of the said Act of 1966 (powers to provide furniture, board and laundry facilities).

(2) An agreement to which this section applies may only be made with the approval of the Secretary of State, and the terms of any such agreement shall be approved by him.
(3) The Secretary of State's approval to the making and to the terms of such an agreement may be given either generally or to any local authority or description of local authority or in any particular case, and may be given unconditionally or subject to any conditions.
(4) Without prejudice to any power to let land conferred on a local authority by any enactment, the terms of an agreement to which this section applies may include terms providing for the letting of land to the housing co-operative by the local authority for a period not exceeding 20 years.
(5) Houses on land included in an agreement to which this section applies shall continue to be included in the local authority's housing revenue account; and neither the fact that the authority have made the agreement nor any letting of land in pursuance of it shall be treated as a ground for the reduction, suspension or discontinuance of any Exchequer contribution or subsidy under section 58 of the Housing (Financial Provisions) (Scotland) Act 1968.
(6) A housing association which is registered under Part II of the Housing Act 1974 shall not be entitled to a grant under Part III of that Act in respect of land for the time being comprised in an agreement to which this section applies."
The noble Lord said: My Lords, I beg to move Amendment No. 2 and to associate with it as consequential Amendments, Amendments Nos. 10, 11 and 14. It is sometimes one of the difficulties facing a Scottish Minister that he lays himself open to the charge that he is just slavishly following something that has already been done by the English. I believe I could be so accused, but in following the initiative taken by the Minister for Housing and Construction in another place at the Report stage of the corresponding English Bill I believe we are seeking to follow a good example. These Amendments provide essentially enabling powers which will constitute a framework within which we can develop policies on housing co-operatives and co-operative management schemes to enable tenants to participate collectively in decisions affecting them.
At present the public authority tenant has little or no say in, or responsibility for, housing management decisions about

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his home and its environment. In Scotland now over 50 per cent. of all households are public authority. This contrasts very sharply—I think I would prefer to say "too sharply"—with the situation of owner occupiers, the next largest group at just over 30 per cent. We think that not only is it desirable in principle to allow tenants greater responsibility in the management of their house than they have now; it is necessary to involve people more in the solution of management problems, if we are to succeed in containing the growing burdens on housing managers who are being called upon to exercise their skills in an ever growing area of responsibility, and to show greater sensitivity to social issues, such as those which were high-lighted by the Morris Committee on Links Between Housing and Social Work.
The framework provided in the Bill is deliberately broad at the present formative stage. The Minister for Housing and Construction has received a Report from the Working Party under the chairmanship of Mr. Harold Campbell on ways in which the Government, local government, housing associations and other bodies could sponsor housing co-operatives and cooperative management schemes; and this is being discussed on a consultative basis with a number of national associations prior to a wider circulation and debate. In Scotland, too, we have commissioned a research project to be undertaken by staff of Edinburgh University. The twin objectives of this project are, first, to examine the scope for developing various schemes for securing tenant co-operation in the management of housing owned by public authorities in Scotland; and, secondly, to introduce experiments in these forms of co-operation in different areas, in collaboration with selected authorities. Although the full project will be spread over three years, preliminary work has already begun and will begin to yield useful material within a year. We expect that this work will stimulate experiments in tenant co-operatives in some form or another, and it therefore seems desirable now to remove possible financial obstacles to such experiments. This is the primary purpose of subsection (5) of the new clause, Amendment No. 2, which is the heart of these Amendments.
The new clause provides for housing co-operatives to be set up by means of agreements between a local authority and a society, company or body of trustees, subject to the approval of the Secretary of State; while the Amendments to Schedule 3 make consequential adjustments to existing legislation. The clause is drafted so as to ensure that the Secretary of State has an adequate range of controls over what will be essentially experimental activity; these may be relaxed when experience has been gained or a body of guidelines— perhaps model agreements—has been drawn up in the light of experience. The financial key to the new arrangements is that houses which are subject to an agreement between a local authority and a co-operative will remain on the local authority's housing revenue account and will continue to attract the normal Exchequer subsidies. In practice, this will mean that the rent charged for houses taken over by a co-operative can be kept broadly at the same level as those charged for similar local authority houses. No additional public expenditure will be involved.
Turning now to the consequential Amendments, the amendment to the Rent (Scotland) Act 1971 ensures that where the interest of the landlord under a tenancy belongs to a housing co-operative the tenant shall not be a protected tenant under the Rent Acts. It is intended to preserve for the tenants of a housing co-operative, through the terms of the agreement, a position broadly similar, in regard to security of tenure and rent, to that which is available to ordinary tenants of a local authority.
Amendment No. 11 deals with two points. Section 16 of the Housing (Financial Provisions) (Scotland) Act 1972 is amended so that the tenant of a co-operative shall—if he qualifies under the normal rules—be entitled to a rent allowance rather than to a rent rebate. It is impracticable for a body which is not the landlord—and therefore does not collect the rent—to operate a rent rebate scheme, of net rents, which involves collecting a smaller amount of rent. The obvious course, therefore, is for qualifying tenants of co-operatives to be granted rent allowances. Secondly, the adjustment to Section 78 of the Housing (Financial Provisions) (Scotland) Act 1972

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is simply a technicality. The number of houses on the housing revenue account is a factor in subsidy calculations. The Amendment ensures that the number used in these calculations includes those houses which are the subject of any agreement for the time being in force between a local authority and a housing co-operative. The final Amendment makes an adjustment to the Long Title of the Bill to take account of the new provisions.
My Lords, I have spoken at some length on these provisions. It may well be that the noble Lord, Lord Campbell of Croy, and others of your Lordships will wish to read, if printing permits, the Report of what I have said. For that reason, the suggestion of the noble Lord —namely, to defer the Third Reading of the Bill—is appropriate. If it is acceptable to your Lordships, we shall take the Third Reading on Thursday; it will be the last business on that day. I think it is important that we should dispose of the Bill this week. I hope the noble Lord will accept that this is at least a step towards co-operation, so as to enable him to consider more carefully what I am saying about co-operatives for tenants. My Lords, I beg to move.
3.28 p.m.
Lord CAMPBELL of CROY: My Lords, on the question of procedure, about which the noble Lord has spoken in response to my suggestion, I, for my part, would be glad to take the Third Reading on Thursday, even though it is the day of adjournment for the Recess. But I cannot, of course, answer for other noble Lords who may find that day inconvenient to them. I hope that it will be merely a tidying-up stage and that no further massive Amendments will then be moved by the Government. On the basis that it will be a useful tidying-up operation, I myself agree to what the noble Lord has suggested.
As regards Amendment No. 2 which the noble Lord has moved and the Amendments which are being discussed with it, I do not criticise the fact that a system which has been adopted in England should be suggested for application in Scotland, provided that it is a good one with which we can agree. I am all for looking at what others are trying or have proved by use in order to see

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whether their system can be applied in Scotland. However, I am surprised that we should have heard about this Amendment so late in the passage of this Bill. Similar provisions were added to the Bill for England and Wales; namely, the Housing Rents and Subsidies Bill, which passed through this House some weeks ago. Therefore, I am a little surprised that we have not seen this Amendment earlier.
Lord HUGHES: My Lords, I should have explained why this Amendment has been introduced so late in the passage of the Bill. Unfortunately, we have been badly handicapped because of the illness of the draftsman, which has delayed matters. As the noble Lord knows from his past experience, if there is one Department of the Scottish Office which is not overstaffed it is that of the draftsmen.
Lord CAMPBELL of CROY: My Lords, I am sympathetic. For all our sakes, I hope that the draftsman has a very quick recovery.
Lord HUGHES: My Lords, the draftsman is back.
Lord CAMPBELL of CROY: My Lords, I am glad to hear it. Certainly, very good Scottish draftsmen are scarce, and we need to look after them as well as we can; I know that if one is short of draftsmen it makes life difficult. However, that is why we are having to look at this Amendment so quickly. It was generally welcomed when it was introduced for England and Wales. I myself welcome tenant co-operative schemes, provided they are likely to work.
If I may ask a question about interpretation—because it is the wording covering the bodies to be brought in which raises questions—in line 2 of the Amendment it is an agreement with a "society, company or body of trustees". Presumably, a company is covered by company legislation, but what is a society for the purposes of this Bill? It is a society to be approved by the Secretary of State, and my question is: does it cover any body which calls itself a society? Is the interpretation of a "society" as denned in some overall legislation, or is it qualified as any body which calls itself a society of which the Secretary of State has approved, or "approves at the time", as the clause

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states? At the same time, can the noble Lord give some indication of the scope? He has given us a brief explanation, but it would be helpful if he could tell us a little more about the bodies which can come into these co-operatives. If the noble Lord cannot give us an answer now, then we might wait until a later stage. But I am prepared to give this new clause a welcome without having had very much chance to study its consequences.
Lord HUGHES: My Lords, speaking off the cuff, and therefore at the risk of being totally wrong, I suspect that "society" would, for instance, cover a housing association and it may well be that it is a term which is defined in other places in housing legislation. However, if it should turn out that a more detailed explanation is necessary, and if it does not emerge during the course of our proceedings, I will write or telephone to the noble Lord to ensure that he knows the answer before Thursday. With regard to the second point, I would wish to defer consideration of that until I have studied the matter. Incidentally, if the answer should emerge during later proceedings I do not suppose your Lordchips would mind very much if I were to put myself out of order by answering the right question at the wrong time.
On Question, Amendment agreed to.
Clause 6 [Phasing of rent increases where rent for dwelling-house under regulated tenancy is registered]:
3.32 p.m.
Lord HUGHES Lord HUGHES moved Amendment No. 3:
Page 3, line 35, at end insert (" and to section (annual limit on private sector rent increases) of this Act,").
The noble Lord said: My Lords, I beg to move Amendment No. 3 and to associate with it Amendments Nos. 4, 5 and 8. The main Amendment is Amendment No. 5—the new clause—and this Amendment, Amendment No. 4 and Amendment No. 8 are consequential Amendments.
The new clause contained in the main Amendment, No. 5, closes certain loophopes in the provisions preventing rent increases of more than £1·50 per week in any one year. These provisions in

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Clause 7 and Schedule 2 impose the restriction of £1·50 per week on increases in the normal situation where a rent agreement or a registered rent is in force in a particular year. They do not, however, cover the situation where a new registration or rent agreement replaces an existing registration or rent agreement. It would therefore be possible for one large increase to be made under the old registration or rent agreement and, less than a year later, for a second large increase to be made under the new registration or rent agreement. The two increases together might well be more than the equivalent of one increase of £1·50 per week over a period of a year. The new clause relates only to such cases where two increases take place within a year. In those cases it provides that the second increase shall be limited, if necessary, to an amount lower than Clause 6 or Clause 7 would otherwise permit. The second increase is not to be more than the amount which will bring the total increase in rent for the year in which the two increases take place to £78, which is the equivalent of one increase of £1·50 per week over the whole year.
The effect of this is that the transition from the old registered rent or rent agreement to the new registered rent or rent agreement will take place more smoothly. It is estimated—and inevitably this cannot be other than a broad estimate —that this might affect between 2,000 and 3,000 tenancies. It is provided that the figure of £78 shall be variable by order to keep it in line with any change in the maximum weekly increase of £1·50 per week in Clause 7 and Schedule 2. The remaining Amendments are minor consequential Amendments inserting references to the new clause in Section 31 of the 1971 Act, which will allow the tenant to recover any rent paid in excess of the amount allowed by the new clause and by Clauses 6 and 7 of the Bill. I beg to move Amendment No. 3.
Lord CAMPBELL of CROY: My Lords, I think it is at this stage that I should speak to the manuscript Amendments to Amendment No. 5. My reasons for having to produce manuscript Amendments, which I understand have been circulated, are those that I gave at the beginning; namely, the very short

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amount of time in which we have to consider Amendment No. 5 and receive any representations about it, owing to the combination of the distribution difficulties up to the weekend and the length of these Amendments. What I want to do in due course is to move, as an Amendment to Amendment No. 5, in subsection (2) of the proposed new clause, in the second line of paragraph (c) to leave out "in force before or" and insert "entered into".
I think it might be for convenience if I were to read out the Amendments at this stage because although they have been circulated not every noble Lord may have a copy. In subsection (2)(c), in the fifth line of the proposed new clause, to leave out the words "(before or after such commencement)".
I understand that the Government have been trying to remove anomalies, but as drafted Amendment No. 5 would produce an anomoly. I have been able to receive this advice only within the last three hours but I will try to explain the anomaly to the noble Lord. Subsection (1) states that the rent in the relevant period shall not be increased by more than £78 over the rent payable in the preceding rental period. Subsection (2)(c) defines "relevant period under rent agreements" as the period of 12 months beginning with the date when the last increase took effect under that agreement. These two parts of the clause can have a serious unforeseen effect; namely, where under a controlled rent in 1973 the rents are put up, the rents could then go up in the first year by £100, in the second year by £170 and in the third year by £240— those are the amounts of rent paid by the tenant—producing a total over three years of £510; but where a landlord offered an agreement for three years the amount paid could amount to considerably less—£465; the agreement would be approved by the rent officer, and the tenant would no doubt receive advice from elsewhere that the agreement with the company owning the houses would be beneficial to him. From the figures I have just given, that would be good advice.
Because of the provisions that I have just read out this agreement could be beneficial to the tenant and if the increase had been phased no one increase

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would have exceeded £78 a year; but because it was not phased this Amendment would make the situation worse for the tenant who had signed an agreement. For this reason, and to eliminate this anomaly, we suggest that this redrafting should be carried out as set out in this manuscript Amendment. I thought it was more convenient, even at this short notice, to produce it in writing, and I ask for the understanding of your Lordships' House. I would certainly not have done this if it had not been for the shortage of time. We believe that if the wording were changed in this way the anomaly which I have described would not occur. If the Government find it difficult to consider this Amendment now on Report, I hope that it will be considered again on Thursday on Third Reading.
Lord HUGHES: My Lords, I certainly could not undertake at this stage to accept these Amendments to the new clause. On the basis of the information which has come to me so far, this is another variant on Amendments 7 and 7A, both of which are alternative ways of dealing with the Western Heritable situation. I am informed that there is no anomaly created by these Amendments. That paragraph of the subsection relates to the total allowable limit of £78 over one year to the date of the last increase under a rent agreement. It does not affect any past rent increases. While I have said that it is related to the Western Heritable situation, I would not wish to complicate matters by referring now to what I want to say when Amendment No. 7 comes to be moved.
The effect of these Amendments would be to except Western Heritable from this limitation of £78 for a period of 12 months. It would be to allow these cases to have rents registered and thereafter to be increased by £78 within 12 months of the previous increase under the rent agreement. Obviously this runs counter to the intention of the Bill which includes a counter-inflationary safeguard. On the first Amendment the noble Lord, Lord Campbell of Croy, was anxious to protect the tenants of council houses from an average rent increase of more than £26 a year, excepting that no individual tenant would pay an increase of more than £39 a year. But the effect of these Amendments would be to subject the tenants of this particular company—and

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it is not confined to that company—to a possible increase in excess of more than twice the amount which he himself subjected to some criticism in the local authority field.
Lord CAMPBELL of CROY: My Lords, I have never tried to compare what was done by Conservative and Labour Governments in the private sector in Scotland to the situation in the public sector. It was the last Labour Government who started the system—and we continued it—under which the private sector rents which had been controlled, or in some cases stayed at a certain level because of subsidy received, have then been allowed to go up to a fair rent over a period of three years. My point is that what the tenant minds is how much he pays over the three year period. If in total he pays less in three years, he does not particularly mind whether there is a bigger increase in one year or another. If he knows that at the end of three years he is going to pay less under one system than the other, he is more interested in the one where he pays less than whether there is a higher increase in one year than another.
Lord HUGHES: My Lords, I am certain that the noble Lord, Lord Campbell of Gray, is not attempting to blind me with science, but I can assure your Lordships that he has succeeded in doing so. If I accept the Amendments it will be possible for the tenants to have an increase within 12 months, not of £78 but perhaps of twice as much as that. That is not something which I could lightly accept. I should like to look at the noble Lord's argument and take advice on whether this makes it possible for the rent over the period to be less in total. I am not at present able either to concur or to disagree with what he is saying. At this stage I would much prefer that my Amendments should remain in the form in which I tabled them and I hope your Lordships will agree to that.
Lord CAMPBELL of CROY: My Lords, I do not expect the noble Lord to have been able to follow all the figures I gave when I was describing these two Amendments, but I can assure him that I was drawing attention to the anomaly of the tenant being asked to

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pay more rent in total under this Amendment in the three years while the rent was going up than he would otherwise pay under the agreement which he has signed. That is the important point which I was making. I am sorry that I did not make it clear enough for the noble Lord to recognise this on the first round. I can only say that I understand that his position is rather similar to my own—we are coming to this at very short notice. I am grateful that he is prepared to look at this. Certainly that is the burden of my message. It is in those cases where the tenant will find himself paying more than he otherwise would that this anomaly can arise. I hope that before the next stage the noble Lord will be able to examine this with that in mind.
Lord HUGHES: My Lords, there is one further point. In a period of inflation the tenant would be paying the bigger amount in good pounds and getting the benefit perhaps later on in pounds of less value, because even the most optimistic on either this or the other side of the House do not expect inflation to be eliminated in the present year. Perhaps the way is now clear for us to decide whether we are to accept the first of these Amendments, the new clause as it stands.
On Question, Amendment agreed to.
Clause 7 [Limitation of rent increases under rent agreement where no rent is registered for dwelling-house under regulated tenancy]:
Lord HUGHES: My Lords, I beg to move Amendment No. 4.
Amendment moved—
Page 4, line 32, at beginning insert (" Without prejudice to section (annual limit on private sector rent increases) of this Act,").—(Lord Hughes.)
On Question, Amendment agreed to.
Lord HUGHES: My Lords, I beg to move Amendment No. 5.
Amendment moved—
After Clause 7 insert the following new clause:
Annual limit on private sector rent increases
.—(1) Notwithstanding any registration of a rent, or any rent agreement, which (in either case) permits the rent of a dwelling-house to be increased above the existing amount payable under a registration or rent agreement,

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nothing in section 6 or 7 of this Act or in Schedule 2 thereto shall enable the rent to be increased in a relevant period by more than £78 above the amount which was payable for the last rental period beginning before the relevant period.
(2) In this section, "relevant period" means—

(a) in a case where the rent previously payable as aforesaid was in respect of a rent registered on or before the commencement of this Act, the period of 12 months beginning with such commencement, or any subsequent period of 12 months beginning with the anniversary of such commencement ;

(b) in a case where the rent previously payable as aforesaid was in respect of a rent registered after such commencement, the period of 12 months beginning with the date of such registration, or any subsequent period of 12 months beginning with the anniversary of that date;

(c) in a case where the rent previously payable as aforesaid was payable under a rent agreement in force before or after the commencement of this Act, the period of 12 months beginning with the date when the last increase (before or after such commencement) took effect under that agreement, or any subsequent period of 12 months beginning with the anniversary of that date.

(3)This section shall not affect any increase in respect of a service element within the meaning of Schedule 2 to this Act.
(4) The Secretary of State may by order substitute, for the sum of £78 mentioned in subsection (1) above, a sum other than that sum.
(5) An order under subsection (4) above shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament, and may be varied or revoked by a subsequent order made under that subsection.
(6) Any notice of increase under section 21(2)(b) of the 1971 Act or any rent agreement which purports to increase the rent payable at any time above that permitted at that time in terms of this section shall have effect to increase the rent to the extent so permitted but no further.
(7) Section 7(9) of this Act shall apply for the interpretation of this section as it applies for the interpretation of that section.—(Lord Hughes.)
On Question, Amendment agreed to.
Clause 11 [Continuation of right to recover excess rent, etc., under CounterInflation Orders]:
Lord HUGHES Lord HUGHES moved Amendment No. 6:
Page 8, leave out lines 29 to 32 and insert—
(" (3) Section 38(2) of the Interpretation Act 1889 (effect of repeals) shall apply in relation to the said Orders, as continued in effect by

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virtue of this section, as it applies in relation to an enactment which is repealed by another Act.")
The noble Lord said: My Lords, this is a purely drafting Amendment. The purpose of this subsection is to provide that the CounterInflation (Residential Rents—Private Sector) (Scotland) Orders 1974 shall remain effective for the purposes of any proceedings to recover excess rents which are before the court when these Orders (as extended by Clause 11) expire. It is doubtful whether the wording as presently drafted achieves that purpose. I beg to move.
On Question, Amendment agreed to.
Schedule 2 [Phasing of rent increases where rent for dwelling-house under regulated tenancy is registered]:
3.50 p.m.
Lord LYELL Lord LYELL moved Amendment No. 7:
Page 12, line 22, at end insert (" or, in the case of a rent registered before the date of commencement of this Act and where the rent payable has remained the same or less for all rental periods between 25th July 1969 and such date of commencement, then the previous rent limit may be calculated by reference to the following formula:
R+l/5 (RR-R)
where R is the rent payable during the year ending at such date of commencement
and RR is the registered rent;
the previous rent limit calculated by reference to this formula may then be substituted for PRL in Paragraph 3 of this Schedule.")
The noble Lord said: My Lords, the main purpose of this Amendment follows on that of Amendment No. 5A, the manuscript Amendment which my noble friend Lord Campbell of Croy was discussing. This Amendment may appear to attempt to dazzle the noble Lord, Lord Hughes, with science—it began to dazzle me—but I think it is relatively simple, and I hope your Lordships will bear with me while I try to guide the House on it.
We have already agreed that £78 is the maximum annual rent increase which can be asked for in any one year. We have heard the very eloquent words of the noble Lord, Lord Hughes, as to why this should be so. But as I am sure the noble Lord is still aware, there remain some anomalies concerning the private housing sector. We are considering here not merely where increases start from very

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low rents, but where they start from somewhat ridiculous, and absurdly low rents. If we take the case of several houses in Glasgow and elsewhere in Scotland, we find an interesting example. There exists a controlled rent of £30 per annum, which is a controlled rent agreed more than five years ago, prior to 1969. Recently, a registered rent has been agreed—and the rent officer may or may not have been concerned in fixing it— and both the landlord and the tenant seem to be in agreement that this is a fair rent. By this Amendment we hope to raise this base figure from what we regard as an absurdly low rent to what we hope is a low rent. It is a start in raising the base figure.
The formula, which we see as R+⅕ (RR—R), takes me back a little to elementary algebra. But the way in which it works is that where the controlled rent appears to have been £30, and this has been the rent for more than five or perhaps six years, we are allowed to increase the base figure by one-fifth of the difference between the new registered rent and the old controlled rent. In several cases that we have considered, we found an average registered rent which has been agreed between the landlord and tenant, with or without the concurrence of the rent officer.
To take an example of about £270, this is a fair step up from £30, yet both parties seemed to be in agreement. This mathematical formula is not merely something with which to dazzle lawyers, or anybody else. Given this formula, we hope to achieve this reasonable starting point. Taking a controlled rent of £30, and the new registered rent of £270, the formula allows one-fifth of the difference, which is £240, between these two figures. If we divide by five we get £48, which is the figure allowed to be added to the £30 controlled rent. Thus we get a combined total of £78. This is the starting point for the new rent increases which can be charged in any one year.
Let us remember that both the landlord and the tenant have agreed that the new and reasonable rent should be £270 per annum. Yet under the legislation we are now discussing, the maximum rent that can be charged in this first year, 1975–76, would be of the order of £156, because the starting point for the increase

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is £78 and the maximum for which any tenant can be asked is £78. So that in the first year he has to pay only £156, and not until just into the third year will the tenant be paying anything like the agreed registered rent. This we believe to be unfair on landlords who, for the last five or six years, for various reasons, have voluntarily kept their rents at a low level, possibly because they have not been able to carry out repairs in order to bring the property into the state of repair and order which they would wish.
Nevertheless, having been fair and having carried out such repairs and alterations as they deemed fit, and having agreed what the tenant considers to be a fair rent, they are now precluded from being allowed to charge the fair rent to recompense them for their outlay. They will be near to the figure in three years' time.
We have heard from the noble Lord that it might be wishful thinking to expect to eliminate inflation on its present scale in three years. However, let us hope that in three years' time the rate of inflation will be less than now. But this is the crux of the matter. Even with this mild Amendment we will achieve a starting point which is marginally higher than it would have been. It seeks to alleviate some of the hardship, if one can call it that, some of the financial loss which will accrue to landlords, who, over the last five or six years, have been reasonably generous and have voluntarily acted on a fair basis towards their tenants. My Lords, I beg to move.
Lord HUGHES: My Lords, may I first correct the noble Lord, Lord Lyell, in what he said with regard to my remarks about inflation. I did not say that it was optimistic to expect that inflation would be reduced from its present level within three years. I said that no one would expect that inflation will be eliminated this year, but that I hope that long before three years from now inflation will be reduced very much below its present level. I do not think any of us in this House would contemplate with any degree of equanimity the present state of affairs continuing for another three years.
My Lords, I must congratulate the noble Lord, Lord Lyell, on the way in which he presented the Amendment. At

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least, one can now understand it more readily, now he has given an example, rather than having to look at the formula R + 1/5 (RR—R). The Amendment would apply almost exclusively to rents registered during the standstill, and to that extent would apply to the group of tenancies where it has been said an anomaly exists. Although I am sure it is not the intention, this Amendment would run very much wider than Western Heritable's 50 or 60 tenants, who are the ones intended to be affected. The obvious category of tenancies affected by this Amendment—although by no means the only one—is controlled tenancies converted by the 1972 Act. No fewer than 13,500 of these have so far had rents registered during the freeze and this Amendment would apply to all of them.
I can appreciate the desire of the noble Lord, expressed on more than one occasion, to relate rents payable by the small minority of 60 or so tenants of Western Heritable to what is paid by the great majority. But to put at risk 13,440 other tenancies in order to do this for these 60, is certainly not a price that the 13,000-odd would consider worth paying. In addition, there are other rents which have not changed since 25th July 1969 for one reason or another, although it is difficult to estimate their number. The numbers affected are out of all proportion to the main purpose of the Amendment. The Amendment would, however, affect more than 14,000 tenants, for the sake of 50 or 60 tenants of that single company, or, rather, for the sake of the company which has those 50 or 60 tenants. So much for the scope of the Amendment.
There are, however, three main reasons why I must resist it. One of the main purposes of the private rents provision in the Bill is to allow rent increases in the post-freeze period to be increased— where they have to be increased—evenly and progressively. The effect of this Amendment, as the noble Lord indicated, is really to drive a horse and cart through that. After all, according to the example that he gives, the Bill would permit the rent to go up from £30 to £108. He is proposing that it should go up to £156, an increase in the first year of £126, and in any proposal which has counter-inflationary effects that cannot be

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accepted. I would remind the noble Lord, Lord Lyell, that his noble friend Lord Campbell of Croy, in speaking to the first Amendment, spoke about the advantages of having modest increases that people could accustom themselves to. Even if one accepts that the rent is at an unreasonably low figure, one cannot accept that an increase of that order could be regarded as a modest one, when £39 on the local authority side was considered as being a high one.
The tenants affected will mostly be paying very low rents, as the noble Lord, Lord Lyell, has said. It may be valid to argue in principle that they are too low and should be increased, and I am not prepared to argue to the contrary. In fact, the Bill is permitting a level of increase in this field very much higher than is permitted in the public sector, and part of this is to take account of the fact that rents have in many cases been exceptionally low in the private sector. But we must allow tenants to adjust gradually to what may be, whatever the rights and wrongs of history, a substantial change in their budgeting for family expenditure. This is the tenor of much recent legislation on rents. In the Bill we are trying to achieve a gradual and even movement to fair rent levels.
The effect of this Amendment is to replace phasing in three progressive stages, each of one year, by stages of seven fifthteenths, four fifthteenths and four fifthteenths. I am quite certain that the effect of that initial very big jump would be to make the tenants' attitude to the increases much more hostile than it would be if they were being made in three equal stages. It is in the interests of the landlords to reach their objective in three years, in the way suggested by the Bill, rather than, perhaps, imperil the whole process of a reasonable approach by the tenants by attempting to get too much at this first bite.
My second reason for resisting is that the Amendment would also result in large increases in rent at the worst time, immediately after the freeze. In the case of tenants who have had very large total increases, the Amendment would result in increases of almost £3 a week. Even where the total increases are more modest this Amendment would result in increases of more than the maximum £1·50 a week

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permitted by the Bill in well over 2,000 cases.
Thirdly, this Amendment makes an arbitrary division which would result in this large group of cases being treated differently from other rents registered during the freeze, as well as rents registered before and after the freeze. This different treatment may be presented as an initial jump which is trying to remedy a situation of very low rents, and that in fact is how the noble Lord presented it. It is, however, really a disguised change in the pattern of phasing, and as such is an anomaly which will persist for all of two years after the commencement of the Bill. To have one registered rent treated differently from another is contrary to our whole attempt to achieve a reasonable consistency in the complex field of private rents.
I think it is important to remind ourselves that we are not dealing with any hypothetical situation where it is academic whether or not we say that the previous rent is higher than it is; we are dealing with people whose rents are certainly going up. There is no doubt about that. We want the rents to go up evenly. We think that we have gone very far towards being fair to landlords in allowing them to increase rents by £78 a year.
This Amendment makes a very sudden leap and a big leap in the first year. The Amendment, which I think is intended— I am being fair to the noble Lord—to deal with a very small number of cases, unwittingly undermines much that the Bill tries to do. It goes against the principle to which the noble Lord, Lord Campbell of Croy, and the noble Lord. Lord Lyell, have both subscribed; the desirability of reaching a reasonable objective by acceptable steps. It makes it even worse because it is creating special categories which are foreign to this principle. I hope, therefore, the noble Lord, Lord Lyell, will find it possible to withdraw this Amendment.
4.8 p.m.
Lord LYELL: My Lords, I should like to thank the noble Lord for the courteous way in which he received what I was trying to put over; this mathematical formula. He did mention 13,440, and, I think, a total of 14,000 other cases, which he said would be put at risk. I should be interested to know about those,

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because we have no knowledge that there are so many cases to be affected. If the noble Lord believes that this Amendment is to affect such a large category, I think he may be reading a little more into it than we did. But, nevertheless, this is legal interpretation, and we should probably accept it.
The noble Lord has been stressing the point that my noble friend Lord Campbell and myself were pressing in the first Amendment, which was that we felt that rent increases should not be more than £26 in any one year, but I am sure the noble Lord is aware that this is for public sector housing. This brings many other factors into the discussion. If we come back to the private sector, which is what I am discussing at the moment and the House is concerning itself with, there are rent officers. In all these cases, certainly all the 60 or so the noble Lord mentioned, and I would hope in the 14,000 others he said would be put at risk, the rent officers are available, for both landlords and tenants, to see that the rents are not unreasonable. In the anomalies I have been pointing out, between the absurdly low rent and the new registered rent, the registered rent has been agreed by both the landlord and tenant and if there is a dispute on either side the rent officer is available to act as final arbiter. I wonder therefore whether the noble Lord is not making too much out of this.
As for the three points on which the noble Lord resisted the Amendment, per-haps I did not express myself sufficiently clearly. If I did not, I trust that he will forgive me, remembering that he has pointed out before that I am a member of a professional body which should concern itself with the clear and precise presentation of the facts. As I have understood the position, the rent would go up in the first year from £30 by the maximum of £78, which would bring it to £108 and not £156, which I agree would be a fair leap; but this is only an extra £48 over the permitted increase under the Bill and would not be £126, the figure which I think the noble Lord had in mind.
Lord HUGHES: My Lords, I may not have understood the noble Lord. I understood that under the Bill as drafted the rent could go up from £30 by an extra £78, but that his Amendment would

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assume that the starting rent was £78 to which £78 would be added. Thus, it would in the first year go up to £156, so that the increase would be £126 rather than £78. In other words, it would be £78 plus the £48 which would be added by his formula.
Lord LYELL: My Lords, that is what I had in mind, but I was thinking that that would be in year two and not in year one; but possibly, I skipped a year and, if I did, I apologise.
Lord HUGHES: Rather an important skip!
Lord LYELL: I concur with the noble Lord. The noble Lord pointed out that these are fairly large increases in rents straight after the freeze, that these rents were registered during the freeze and that there were various anomalies. I stress again that in all these cases there are rent officers who attempt to act as final arbiters if anomalies arise. Where there are virtually the same houses in which some tenants have accepted agreements for registered rents, with the rent officers' concurrence, the Amendment at least tries to bring in the tenants who have not agreed the register rents and seeks to bring these tenants, a mere 60 of them, on to the same basis as the tenants who have signed the agreement. However, we would not wish to pursue the matter at this stage and I will, with the leave of the House, withdraw the Amendment.
Amendment, by leave, withdrawn.
Schedule 2 [Phasing of rent increases where rent for dwelling-house under regulated tenancy is registered]:
4.13 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 7A:
Page 14, line 6, at beginning insert—
("In the case of rents registered after the commencement of this Act,").
The noble Lord said: My Lords, this Amendment, although circulated last week, was omitted from the Marshalled List today but I understand that copies have been distributed separately. The Amendment has been encouraged by the noble Lord, Lord Hughes, who, when this point was discussed in Committee a week

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ago, suggested that I reserve my position and raise it again. It deals with an anomaly and perhaps I may say, arising from the debate we had on the previous Amendment, that of course we agree with the noble Lord that what we are aiming for, where rents are having to be increased, is to put them up by even and equal stages if that is possible. But as the noble Lord said when we first discussed this part of the Bill some time ago in this House, it is difficult to deal with all the anomalies that arise. Many of the Amendments which the noble Lord has moved in this sector of the measure are designed to eliminate anomalies that have been spotted, and the difficulty is to find a way of dealing with this one because it is clear from what the Government have said that they would like to see this anomaly disappear, although it seems to be difficult to do it without raising others.
My noble friend Lord Lyell has an advantage over many of us in being a chartered accountant and he in the last Amendment was dealing with a formula and hoped that that might help the Government to deal with the anomaly. The noble Lord, Lord Hughes, said that this would upset the situation for many thousands of tenants and of course if we can we want to avoid any effects of that kind. I must therefore ask the Government whether they have been able to find a way of dealing with the situation, because I presume that they encourage agreements between tenants and land-lords or, as in the case we have in mind, a company; and in this case the company's 3,000 tenants in virtually identical houses all, except 57, signed an agreement and were encouraged to sign it by the rent officers and advisers. The 57 who, for one reason or another, did not get round to signing the agreement were then treated differently by the accident of the timing of the freeze and, contrary to all previous belief, foresight and pre-diction, find themselves in a better situation than the nearly 3,000 who signed the agreement.
That is the anomaly, and it means that at the end of the three-year period there will be less enthusiasm for signing agreements. Indeed, we may find many fewer prepared to sign, not because they were badly advised—they were well advised— but because of this anomaly that has

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occurred. That cannot be something which the Government would wish to happen, and I should be glad if the noble Lord would confirm this because it simply means the imposition of a huge burden on the rent assessment system. Many thousands who may not wish to go to rent officers and appeal committees may be doing so in the next two or three years because they distrust the agreement, although at the time the agreement seemed the best course for them, and they were so advised.
I do not think that in principle there is any difference between the two sides of the House. In Committee the noble Lord said at col. 692 of the Official Report that his Department was working at that that moment on an Amendment which might replace this one and he invited us to wait for it and in the meantime reserve our position. That is what I have done, but we have not seen on the Order Paper an Amendment which we could identify as the alternative, and I can only assume that the noble Lord has found it impossible so far to produce an alternative to eliminate this anomaly. We are not concerned simply with 57 cases. In itself, the amount of money is negligible. It is the principle with which we are concerned and the fact that the whole system of agreements could be undermined and distrusted by tenants, wrongly and un-justifiably, if this kind of anomaly which has occurred by chance is allowed to continue the arguments adduced so far by the Government concern the difficulty that other anomalies would be created. I know it is a difficult situation, but I hope that the Government will go on pursuing this matter to see whether they can solve this problem without creating others. I beg to move.
Lord STRATHCLYDE: My Lords, may I ask at this juncture in our proceedings what is the reason for rushing this Bill through the House in the way it is being rushed? It is perfectly obvious from the fact that only three noble Lords have taken part in the debate so far that many others who normally one would expect to take part simply do not know about and have not seen the Amendments which are being debated, and it seems to me that we are rapidly approaching the position of absolute farce. Would the noble Lord tell us the reason for rush-

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ing the Bill through the House in what is, so far as I am concerned, this quite unjustifiable way?
4.20 p.m.
Lord HUGHES: My Lords, this Bill was a major part of the Government's commitments at the General Election and is part of a programme of legislation which it is essential to get through in the present Session. If noble Lords wish to be so involved that we take our time, we shall be sitting until the middle of August or the first week of September. Of course, we can carry on in a leisurely fashion, but the Bill as it stands has not been rushed. What has happened is that, at the last stage, there were an enormous number of Government Amendments, including one of extraordinary length, which gave the impression of totally changing the character of the Bill. However, they did not in fact do so. It was accepted then and, in the interval which has since elapsed, it has been confirmed that the Amendments in question did not change the character of the Bill at all. Your Lordships should remember that we are dealing with a situation in which the rent freeze comes to an end on 15th May next, so that time is important in this matter.
My Lords, the timetable of the Bill is not something which I arranged, though it is something to which I assented. To use a hallowed phrase, it was arranged "through the usual channels". It has been complicated by printing difficulties and the other difficulties under which we have been working, but I have done my best. The noble Lord, Lord Campbell of Croy, expressed a perfectly reasonable point of view in relation to Amendments and asked that we should not conclude the Bill today. I accordingly put back the Third Reading for two days. I do not think that I can be accused of acting unreasonably in relation to the Bill, but it is important for the Bill to be put on to the Statute Book in time for the new authorities, which will be taking up their duties on 16th May, to know where they are.
My Lords, I do not know that that will make the noble Lord, Lord Strathclyde, any more happy about the content of the Bill, but perhaps he will acquit me of being unreasonable in relation to the timetable.
Lord STRATHCLYDE: My Lords, if I may interrupt for one moment, I should never accuse the noble Lord of being utterly unreasonable, but the fact is that the proceedings on the Bill are being carried on in a very unreasonable way. I do not suppose that that is the fault of the noble Lord at all but, on the other hand, ought we really to be going ahead and discussing Amendments which many of us have never seen and which, cer tainly, most of us have had no time to consider?
Lord HUGHES: My Lords, the noble Lord has made his protest and I have answered it to the best of my ability. I shall therefore proceed now to reply to the remarks made in moving the Amend ment by the noble Lord, Lord Campbell of Croy. I found Amendment No. 7 unacceptable for the reason that it put at risk some 14,000 people for the possible advantage of one company and of some 60 tenancies. This Amendment is similar to the last one, but it is simpler. It is another way of dealing with the anomaly of the small minority of the Western Heritable Company's tenants. However, again, it has wider effects. I said at the Committee stage that it was not only that company's tenants who would be affected by a general counter-inflation safeguard. It is possible to argue about the precise numbers, and I can assure your Lordships that I did not acquire the knowledge of the number of tenants by going to Scotland and personally counting them. The information came to me from my advisers and from the records which are available to them, and I am satisfied that the figure is as accurate as can be. It is conceivable that it might fall short by, say, a thousand. If anything, my advisers will have erred in a possible understatement of the numbers rather than the other way round.
The noble Lord referred to what I said at Committee stage about an Amendment but, if he would read a little further on in my remarks, he will see that I said that I knew that the Government were working on an Amendment in this direction but that I did not know whether, from his point of view, it would make the position better or worse. In fact, no Government Amendment on the Marshalled List has affected the situation with which the third of these Amendments deals. I think

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it is simply because we have come to the conclusion that it is impossible to produce an Amendment which would affect these 50 to 60 people without adversely affecting the interests of an even greater number. The last Amendment affected many thousands. The present Amendment does not, but it does affect some hundreds of people—that is, substantially more than the number for whom the relief is intended. Any tenants with rents registered in 1972, 1973, 19T4 and the first four months of this year could be affected by the Amendment. We know definitely that the number of rent registrations in 1974 which will be affected is 157. That suggests, therefore, a total for the three years of something approaching 500, which is eight to ten times the number of affected tenants in the Western Heritable Company. It is a big difference from 14,000, but we should still be accepting an Amendment which would affect around 500 people.
My Lords, I must emphasise that any disadvantage to the tenants who signed rent agreements is the result of various circumstances. The noble Lord, Lord Campbell of Croy, referred to the advice which was given to these people to sign rent agreements—advice which seemed good at the time. As it turned out, as a result of the rent freeze, the minority who did not sign found themselves in a better position than those who signed. We must accept that, in the ordinary course of events, the justification for signing a rent agreement is because the people who sign can be persuaded—as were the great part of the 3,000 Western Heritable tenants—that it is to their advantage to have an agreement rather than a registered rent. The noble Lord, Lord Campbell of Croy, expressed the fear that, if we did not do something about the 60 tenants, we should put the future of rent agreements at risk and place a much greater burden on rent officers. I do not think that that fear is justified because of the fact that this anomaly arises from one particular circumstance and there is no guarantee that it will ever be repeated. It arose because of the rent freeze imposed last year.
It is well known—and I shall not attempt to conceal the fact—that the rent freeze was intended to affect all these tenants. However, because the Western Heritable Company went to court and got

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a decision in its favour that the way in which the rent agreement was drawn up would enable them to avoid the effects of the freeze, their rents went up by £140 a year during the freeze when the Government thought that the effect of the Order would be to stop rent increases taking place during that period. What we are being asked to say is that the company— and I freely admit that they were within their rights because they won their case in the courts—having gone to the court, and frustrated the Government's intention of imposing a rent freeze on the rents of 3,000 tenants should be permitted to increase the rents of the other tenants. What is being said and the effect of these three Amendments is that the way to establish fairness is to permit an increase of rents to the 60 tenants who did not sign rent agreements and managed to get the benefits of the rent freeze so that their rents can come up at this stage.
My Lords, I could suggest that if the company had been really generously minded it did not need to go to the court. It could have accepted the intention of the Government and frozen the rents of all 3,000 of its tenants. I am quite certain that that would have been accepted as a very commendable move by the tenants. But the company thought —as it turned out, rightly—that it could get its rents increased, notwithstanding the effects of the order of March of last year. I cannot therefore think that there is any justification, having failed to do what we intended to do for the majority, for saying to the minority, "We will make everybody equal. We will treat you as if we had failed in respect of you also." We did not fail in respect of the 60. I do not see any reason why, at this stage, we should attempt to undo that, simply because we failed in our objective of doing it for the great majority.
My Lords, in effect, the Amendment asks the Government to reverse their own intention in imposing the rent freeze by allowing the rents of the tenants who exercised their choice to have a registered rent increased more steeply. Whether it was because of deliberate intention, because they were dilatory, or because they waited too long to do it, I do not know. But the effect would be to permit their rents to be increased by up to £4·50 a week, at one step in some cases.

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Such large increases, coming immediately after the freeze, are a problem which the Bill specifically seeks to avoid. I agree that there is an anomaly, but the noble Lord, Lord Campbell of Croy, has very fairly indicated that it is not the 50 to 60 people he is concerned about, but rather the possible future effects. A situation of this kind could arise again only if there was a rent freeze at some future time. If another freeze were to be imposed—and there is no such intention—your Lordships can take it for granted that the next order would not suffer from the defects of the last one.
Lord CAMPBELL of CROY: My Lords, from what the noble Lord has just said, we are all aware of the haphazard complications that can arise when a freeze is announced suddenly. The noble Lord was speaking earlier about the rate of inflation being such that the amount of rent between one year and the immediately following year could be greatly affected simply by that one factor. But I sincerely hope that we shall not find inflation becoming even worse than it is at present, thus necessitating more freezes.
With regard to what happened in the interpretation of the Government's order, this is one of the complications of the matter. The Government clearly intended one thing, so far as the 3,000 houses were concerned, but—following what the noble Lord said—the court interpreted the Government's Order in a different way. But surely the purpose of the courts is to establish what the law is, whatever the intention may have been. I am sure that the noble Lord cannot criticise citizens or bodies, when there is ambiguity, for seeking an interpretation by the courts of Government orders or of Statutes of Parliament. What the noble Lord narrated was of interest, but once the interpretation by the courts of a Government order is established that is surely the end of the argument. We then have to try to deal with any anomaly that arises from that part of the freeze.
As the noble Lord accepted, it is the future of thousands of tenancies with which I am concerned. The noble Lord did not answer me directly on the question of the burden on the rent assessment system in Scotland. He simply expressed the hope that there would not be a burden as a result of this, and he

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said that tenants would realise that there was one special reason for this anomaly. But I do not think that people can follow all the particulars of cases like this. They will know merely that about 3,000 tenants, who were persuaded for good reasons to sign an agreement, ended up by wishing they had not done so. That, I fear, will be bad for the future of agreements in Scotland, but that is the way these things happen; and it would be a pity if agreements were not used in future in the way they have been success-fully used in the past. I am sure that this Government were glad when agreements were reached, because it saved the whole machinery of the rent assessment system and rent officers from having to deal with thousands—perhaps tens of thousands—of cases.
I fear that if the Government cannot produce an Amendment to deal with this anomaly, it must be a confession of failure, not only from the Government but also from us on this side of the House, who have been doing our best with two or three Amendments to try to meet the situation, but we have been shown that they do not completely cover the case. I inquired whether the Amendment which the noble Lord said was being prepared a week ago could be identified, but from his reply it sounds as though it has not appeared on the Marshalled List at all. Therefore, we have not been able to see the alternative Amendment which he told us the Government were trying to draft a week ago. I was sorry to detect, as I thought I did in the noble Lord's last intervention, a note on the lines that as the company concerned had taken its case to court the Government were not particularly concerned about trying to resolve this anomaly. I am sorry that the noble Lord should have appeared to adopt that attitude, because the court's decision was something over which none of us had any control, and the anomaly was created by an accident of the timing when the freeze occurred. None the less, I hope that the Government will try to find a formula by Thursday—because that is what it amounts to. Both sides admit that there is an anomaly here. If by Thursday we can find a formula which will deal with this anomaly without creating others, I hope that we can have a Third Reading Amendment which

1142
might put the matter right. In the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord HUGHES: My Lords, I beg to move Amendment No. 8, to which I spoke when Amendment No. 3 was dealt with.
Amendment moved—
Page 16, line 43, leave out (" 6 and 7 ") and insert (" 6, 7 and (annual limit on private sector rent increases) ").—(Lord Hughes.)
On Question, Amendment agreed to.
Schedule 3 [Miscellaneous and consequential amendments]:
4.36 p.m.
Lord HUGHES Lord HUGHES moved Amendment No. 9:
Page 18, line 15, at end insert—
("The Housing (Scotland) Act 1969
In section 62 (increase of rents of houses belonging to certain authorities without notice of removal)—
(1) For existing subsections (1) and (2) there shall be substituted the following subsections—
"(1) Subject to subsections (2) and (3) of this section, where a house belonging to an authority to which this section applies is let for any period, it shall be an implied term of the tenancy that the rent payable to the authority under the tenancy may, without the tenancy being terminated, be increased with effect from any day of the tenancy by a written notice of increase given by the authority to the tenant not less than four weeks before that day.
(2) Where an authority to which this section applies gives under subsection (1) of this section a notice of increase which is to be operative as from any day and the tenancy continues beyond that day, it shall be an implied term of the tenancy that the notice shall nevertheless not have effect if the tenancy is terminated by a notice of removal given by the tenant, and—

(a) the notice of removal is given before the end of the period of two weeks following the date on which the notice of increase is given, or such longer period as may be allowed by the notice of increase; and

(b) the date on which the tenancy is made to terminate is not later than 4 weeks after the date on which the notice of removal is given;

and the tenant shall be entitled to give a notice of removal in conformity with paragraphs (a) and (b) above notwithstanding the provisions express or implied of the tenancy.".
(2) In subsection (6), for the words "section 379(1) of the Local Government (Scotland) Act 1947" there shall be substituted the words "section 235(1) of the Local Government (Scotland) Act 1973.".")
The noble Lord said: My Lords, I must begin with an apology to your Lordships for tabling the starred Amendment which is in place of the Amendment I tabled earlier. In particular I apologise to the noble Lord, Lord Campbell of Croy, to whom I had given notice of the earlier Amendment. But I hasten to assure him and your Lordships that the revised version is designed to tackle precisely the same point—but more correctly and more succinctly. Section 62 of the Housing (Scotland) Act 1969 enables local authorities, the SSHA, and New Towns to increase the rents of their houses by sending their tenants a notice of increase without having also to terminate the tenancy by a notice of removal. Noble Lords may recollect that until that was done there was unnecessary fear and alarm created when the local authorities and others, in order to alter rents, had to issue to their tenants notices to quit, and then follow those notices up by the proposed new rents. That procedure was eliminated by what was done in this section. Representations have been made to the Secretary of State that the provisions do not operate satisfactorily in relation to long-term tenancies, that is, where authorities have adopted a policy of granting a lease of their houses for a period of 12 months or more. In such cases authorities can be prevented from obtaining an increase until the end of the period of the tenancy.
The intention of the provision was to enable local authorities (and the other bodies concerned) to increase rent from the beginning of any rental period by giving four weeks' written notice of increase before the beginning of the rental period in respect of which the increased rent is to be paid and for the tenants to be able to terminate their tenancy by a similar period of notice. This works perfectly well in the more usual cases of weekly or monthly lets. There are, however, two sets of circumstances which these Amendments have been designed to cover. First, where the tenancy is for a year or more and the rental period is the same; and, secondly, where the tenancy is for a year or more and the rental period is one of four weeks. The

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Amendment as originally drafted covered the former but not the latter. The new Amendment has therefore been drawn in terms which comprehend all the various situations which can arise and are in substitution for the original subsections (1) and (2) of Section 62.
New subsection (1) ensures that it shall be an implied term of the tenancy that the rent payable under it may be increased with effect from any date by four weeks written notice of increase. New subsection (2) provides for the tenant in such cases the same right to serve a counter notice of removal. Finally, the Amendment also updates the reference in Section 62(6) of the 1969 Act to Section 379(1) of the Local Government (Scotland) Act 1947. This has been superseded by Section 235(1) of the Local Government (Scotland) Act 1973. The need for this Amendment was drawn to our notice by the corporation of one of the New Towns and the Amendment which was first tabled was to give effect to the points to which the development corporation had drawn to the attention of my Department. But hardly had we tabled the Amendment, when they wrote another letter dealing with the second point; so that, in fact, having accepted that they had drawn our attention to a situation which required to be remedied, we felt under an obligation to complete the remedy—which was the reason for the second starred Amendment which I am now moving.
I hope that at least noble Lords opposite will not suspect any devious motive in our producing this at the last stage. As the noble Lord, Lord Campbell of Croy, will know, one of the disadvantages of the process by which we work—that of consulting the people concerned in every case in legislation of this kind—is that, having consulted the people concerned, when they produce a valid point we are under an obligation to do something about it. It does not often require us to produce two separate Amendments in as many days. I beg to move.
Lord CAMPBELL of CROY: My Lords, this, as the noble Lord, Lord Hughes, said has reached us in its latest form only today, but there appears to be no change in the substance. I sympathise with the remarks made earlier today by my noble friend Lord

1145
Strathclyde about the difficulties of noble Lords in being able to keep abreast of the Amendments, some of them very long, which have only become available today and yesterday. I made a statement about this myself at the beginning of the Report stage and, in case noble Lords were not here, I was glad that the noble Lord, Lord Hughes, agreed to my suggestion that the Third Reading be postponed until Thursday. It has been difficult even to get copies of some of these Amendments; far less being able to consult with outside bodies or persons about them. This proposal seems reasonable and sensible. I know the problems about notice to quit which the noble Lord mentioned. I see this as a very reasonable improvement which I would support.
Lord WALLACE of CAMPSIE: My Lords, as chairman of the East Kilbride New Town I would respectfully associate myself with the Minister's words and endorse what he has said to your Lordships.
On Question, Amendment agreed to.
Lord HUGHES: My Lords, I have already spoken to this Amendment, No. 10, when dealing with Amendment No. 2. I beg to move.
Amendment moved—
Page 18, line 16, at end insert—
(" .In section 5 (cases excluded from protected or statutory tenancies), after subsection (5) the following subsection shall be inserted: —
"(5A) A tenancy shall not be a protected tenancy at any time when the interest of the landlord under the tenancy belongs to a housing co-operative, as defined in section (agreements for exercise by housing co-operatives of local authority housing functions) of the Housing Rents and Subsidies (Scotland) Act 1975 (agreements for exercise by housing co-operatives of local authority housing functions) and the dwelling-house is comprised in an agreement to which that section applies or in a similar agreement between the co-operative and the Scottish Special Housing Association.".")—(Lord Hughes.)
On Question, Amendment agreed to.
Lord HUGHES: My Lords, Amendment No. 11 is also consequential upon Amendment No. 2. I beg to move.
Amendment moved—
Page 18, line 20, at end insert—
(" .In section 16 (rent allowances), after subsection (5) the following subsection shall be inserted: —

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"(5A) A person is also a private tenant if he occupies a house let to him by a housing co-operative, as defined in section (agreements for exercise by housing co-operatives of local authority housing functions) of the Housing Rents and Subsidies (Scotland) Act 1975 (agreements for exercise by housing co-operatives of local authority housing functions) and his tenancy would be a protected tenancy but for section 5(5A) of the Rent (Scotland) Act 1971.".
.In section 78(3) (houses to which the housing revenue account relates), after the word "accommodation" there shall be inserted the words "(including houses subject to an agreement between a local authority and a housing co-operative under section (agreements for exercise by housing co-operatives of local authority housing functions) of the Housing Rents and Subsidies (Scotland) Act 1975)".").— (Lord Hughes.)
On Question, Amendment agreed to.
Lord HUGHES Lord HUGHES moved Amendment No. 12:
Page 20, line 6, at end insert—
("(2) This section shall come into operation on 16th May 1975.").
The noble Lord said: My Lords, the intention is that the provisions in the new Schedule 10A should come into force on 16th May 1975, when the rest of the Bill is intended to come into force. Since, however, the new Schedule is being inserted in the Housing Act 1974 specific action is needed to achieve this. That is accomplished by this drafting Amendment. I beg to move.
On Question, Amendment agreed to.
Lord HUGHES Lord HUGHES moved Amendment No. 13:
Page 32, leave out lines 24 to 29 and insert—
("(10) In this paragraph, "prescribed" means prescribed under section 197 of the Housing (Scotland) Act 1966, and the references to that Act in that section shall include references to this paragraph.").
The noble Lord said: My Lords, as the Bill stands, it will be necessary to make two statutory Instruments—regulations under paragraph 13(2) and an order under paragraph 14(10)—to prescribe the forms required. This Amendment will enable all the formes to be prescribed in one Instrument.
On Question, Amendment agreed to.
Lord HUGHES: My Lords, I beg to move Amendment No. 14. I spoke to

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this Amendment when dealing with Amendment No. 2.
Amendment moved—
Line 5, after ("1974;" insert ("to provide for agreements for the exercise by housing co-operatives of local authority housing functions ;")—(Lord Hughes.)
On Question, Amendment agreed to.

LOCAL GOVERNMENT (SCOTLAND) BILL
4.49 p.m.
Lord HUGHES: My Lords, I beg to move that this Bill be now read a second time. It may be asked at the outset why we are needing yet another Local Government (Scotland) Bill since the 1973 Act reorganised local government and as it had a substantial financial element in Part VII. The answer is that the Bill makes improvements in valuation and rating, in grant arrangements, in borrowing and lending and in providing a new system for investigating complaints by the public. None of these reforms is indispensable, though some are very nearly so ; but there was little dispute in another place about the desirability of making the most of the provisions of this Bill.
Two kinds of objection could be made. One is that the Bill tries to do too much; the other that it tries to do too little. On the former, it has been argued that with the prospect of a Scottish Assembly and, even more immediately, with the Layfield Committee expected before the end of this year, we should not now be adjusting the system of financing local government. However, I do not think that objection can be sustained. First of all, the Assembly does not, of course, negate the need for local government, and this Bill does no more than presuppose that regions and districts will continue. As for Layfield, the Government are anxious to receive its findings but the present system of financing, involving an annual expenditure of over £1,000 million of public money in Scotland, cannot be changed overnight, so improvements brought in now will not be cast aside before they have had a chance to operate.
On the other side, I am asked: why does not the Bill introduce this or that reform, which are clearly desirable? The answer is that the Bill is not intended to do more than launch the new local

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government system on a sound financial footing, and it is desirable that local government, under strain through reorganisation, should not have to adjust itself to too many changes, no matter how desirable they might be.
The changes which will take effect in seven weeks' time represent the biggest single reorganisation ever to take place in local government in Scotland. This Government, although in favour of reform, were not too keen on every aspect of the 1973 Act, as noble Lords will recall from the debates which took place at that time. Strong pressure was brought to bear, when this Government took Office just over a year ago, that we should defer introduction of these measures. We took the view—I think correctly—that things had proceeded much too far to make any such deferment possible. I was critical at that time of the Strathclyde region. I should like to say now that in the meetings I have been having with the new regional and district authorities—I have now met a substantial number of them and met another regional authority yesterday afternoon—I have been much impressed by the degree of co-operation taking place between the regions and districts. This applies as much to the Strathclyde region as to any other.
I expressed the view, when the legislation was going through, that I hoped I should be wrong about Strathclyde being too big, because one did not want to see legislation failing just because one thought it would. I am quite satisfied, from the way in which all the districts comprising the Strathclyde Authority are operating, that they can do no other than make a success of the operation. I should like to commend the authorities very highly indeed for the way they are tackling their job. Therefore there is an obligation on us to put through this measure, which will be helpful to all the new authorities in a number of ways.
Turning to an analysis of the Bill, Part I is headed "Finance" and breaks down into four divisions: Valuation, Rating Grants and Miscellaneous. One reform, which seems specially important in view of the mounting costs of providing local services, is to make instalments the normal method of paying rates rather than by a single annual demand. Another reform is to change the pattern of the rating year. Local authorities should be able

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to decide their budgets before the start of the financial year instead of well into the year, as at present. This is a step towards better financial management and an essential concomitant to the changeover to instalment payments: otherwise the amount of instalment remains provisional until the rate is struck, and then has to be adjusted. If the rating year is to be altered, quite a few changes are required not only to the law affecting rating but also to the valuation roll on which rates are levied. It is desirable that the roll should cease to be annually updated in the course of the year and that updating should become a continuous operation so that the rate can be fixed early on with accuracy and confidence. Finally, there is advantage in bringing the local authority financial year—which is at present mid-May to mid-May—into line with the Government year, starting on 1st April.
These are the main structural changes in Part I, effected in Clauses 1, 2, 8 and 18. The remaining valuation and rating provisions are either consequential on them or make incidental improvements which can be introduced without much disturbance to the rating system. These include the restructuring of valuation appeal committees (Clause 4); changes in arrangements for valuation of public and nationalised undertakings (Clauses 5 and 6); and arrangements for housing bodies to collect rates on behalf of rating authorities (Clause 10).
A block of clauses (Nos. 12 to 15) and Schedule 2 deal with Government grants. There are no major changes here, but the Schedule offers a more flexible way of calculating expenditure forming the basis of grant. Provision is made for special assistance in areas with exceptional expenditure because of oil-related development, and this does not prejudice the needs of other areas. Clauses 14 and 15 provide for the replacement of existing specific grants for transport and other purposes by a rate support grant.
Under the "Miscellaneous" heading, Clause 16 introduces the third Schedule, a code for local authority borrowing and lending which is much simplified in relation to the existing provisions. Clause 17 amends the 1973 Act to allow payment of remuneration to members of the Com-

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mission for Local Authority Accounts in Scotland. Clause 19 deals with a matter which was debated at some length in the other place. Section 201 of the Local Government (Scotland) Act 1947 provides for the recovery from councillors, officials and other persons responsible for sums paid contrary to law or lost through neglect or misconduct, after they have been brought to attention by the auditor. The previous Government, recognising this provision to be inflexible and a potential cause of hardship, included in the new code in the 1973 Act, Section 104(2), which requires the Secretary of State to consider all the circumstances of the case and also the means of the persons concerned before deciding how much, if anything, should be recovered from them.
What seems to me remarkable is that for so many years there has been no provision for reducing the amount to be recovered in Scotland, although there has been in England and Wales. I suspect the reason is that on some occasions previous Secretaries of State have stretched to the limit the proviso to Section 201 of the 1947 Act, under which no recovery is made if the Secretary of State is satisfied that the person concerned acted reasonably, or in the belief that his action was lawful, or in circumstances which made it fair and equitable to make no recovery.
The reports by auditors on housing default cases might have been handled in this way, but the present Government consider it preferable to deal with them realistically. I should like to emphasise that. If provision of this kind were not made to enable the Secretary of State to consider the merits of each case, he has only two alternatives before him. He has to surcharge the individual councillor for the amount, no matter how large or how unlikely the possibility of ever recovering even a fraction of the amount involved, or else he makes no surcharge at all. As I have said, in a number of cases in the past where obviously a surcharge was a theoretical possibility—to put it no stronger—no surcharge was, in fact, made. But if we were to adopt that policy of stretching Section 201, I do not think it would have been as satisfactory as what is proposed in this clause. Clause 19 therefore applies the 1973 Act provision to existing authorities, and it seems to be

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a sensible and straightforward procedure for dealing with outstanding reports.
May I draw your Lordships' attention to a rather surprising feature of the present situation. The Secretary of State has no opportunity or duty to act in cases of this kind, unless the auditor makes an interim report to him. In some of the cases of housing default under the 1972 Act auditors made such interim reports, and the amount of potential rent loss in the case of the authorities on whom such interim reports were made amounted to approximately £l½ million—I believe, actually £1·4 million. But there were a considerable number of other cases where, for reasons which I have no doubt seemed perfectly sound to the auditor, no such interim report was made; and the Secretary of State has neither obligation nor right to do anything about the loss incurred, or which might have been incurred, in these authorities.
We have the anomalous position that in the cases in which no such report was made the potential loss in rental was £2,600,000. In one of the cases in which no such report was made, the amount involved was greater than in any of the cases in which a report was made. In six other cases the amount involved ran into six figures. So we have the position that the Secretary of State's situation under the present Act is totally anomalous. If a report is made to him he must either surcharge for the whole amount or do nothing at all, and if no report is made to him, no matter how gross the case may be, no matter how similar it may be to cases in which another auditor has acted, he can do nothing about it.
It seems to me that I, possibly like other noble Lords, was neglectful when we were considering the 1973 Act. We were so much concerned with the size of Regions and districts, the number of Regions and districts and the names of authorities that a whole host of points regarding the machinery of the Bill escaped our notice. With the benefit of hindsight, which of course is always much easier to have than foresight, I would say that if at that time I had detected the machinery which was being applied, in the context that disputes over rents in Scotland under the 1972 Act were already with us at that time, I should have at
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least tabled an Amendment to the 1973 Bill to make the new procedure—the much more acceptable procedure which the previous Government devised—apply from that time on, rather than not being applicable until 16th May 1975.
We have the position that if after 1975 the kind of situation which took place under the 1972 Act arises, in which an authority is reported—it is a different procedure of course; it is to a Commission rather than to the Secretary of State —and the question of surcharge arises, it will be possible to take into account all these circumstances and to decide whether the amount involved per councillor is £50,000 or 50p—what is a reasonable sum to require him to pay if he is to be surcharged. It might vary, of course, from one councillor to another depending on the circumstances. It will be possible, as under Section 201, to impose no surcharge at all. One of the arguments in another place against this clause was its retrospective effect. I submit it does not have a retrospective effect, because the purport of Clause 19 is to enable the Secretary of State to take a decision which has not yet been taken, so retrospection does not apply to the decision. We have put this clause into the Bill to give to the Secretary of State the opportunity to act in a fair way.
Part II provides for a Commissioner to be appointed to investigate complaints of maladministration against local authorities. Like the Parliamentary Commissioner for Administration and the Health Service Commissioner, full powers to obtain evidence, examine witnesses and establish facts behind a complaint will be given to the Commissioner. Broadly, a uniform system of independent scrutiny for all major fields of public administration in the country will be provided. The Commissioner will have general power to look into complaints of "maladministration". The Bill, like the Parliamentary Commissioner Act, does not define this term; it is for the Commissioner to establish his own criteria.
He will have power to look into the whole range of local administration with only a few defined exceptions; for example, cases where the complaint could have been dealt with by a court or by appeal or by reference to a Minister or tribunal; matters concerning criminal

1153
investigation; commercial and contractual activities of local authorities; internal staffing of local authorities and certain questions relating to education. The list of exceptions can be reduced by the Crown, thus increasing the Commissioner's field of action, but it cannot be extended. So if in the course of operation it should prove that some of the matters which are excluded from the field of attention of the Commissioner are undesirably excluded, there is procedure for bringing them within his scope.
There are two main requirements about the making of complaints. A complaint must be made within 12 months of the incident's coming to the complainant's notice, and it must be submitted to a member of the authority concerned, thus giving him a chance to raise the matter with his authority to see whether it can be put right without involving the Commissioner. But the Commissioner can, if he thinks fit, accept any complaint, even if it is made out of time or if a councillor has declined to pass it on to him. The Commissioner's main weapon to enforce findings will be publicity. When he completes his investigation he will need to report his findings. The authority concerned must make this information available to the public and advertise that it is available.
Where the Commissioner decides that there has been maladministration, he must satisfy himself that the authority are taking proper steps to put the matter right. If not, he will make a further report, which the local authority will again have to publish. I am certain that in cases of this kind publicity is the right answer to ensure that justice will be done. The Bill provides for the Secretary of State to designate a body which will service the Commissioner and his office, will pay the salary and expenses of the Commissioner and his staff, provide them with accommodation, and publish the Commissioner's annual report. The designated body will recover its costs from local authorities.
Part III deals with formal matters and commencement provisions and introduces Schedules 6 and 7 concerning minor and consequential amendments and repeals. In the preparation of the Bill the Government have had full co-operation from
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local authorities and professional bodies, and have been able to take account of many suggestions which have been made. I am confident that its provisions will assist the citizen and will also assist the new local authorities which will shortly come into operation. I accordingly commend the Bill to your Lordships and, at the risk of incurring the displeasure of the noble Lord, Lord Strathelyde, hope that it can be enacted before 16th May. My Lords, I beg to move.
Moved, That the Bill be now read 2a. —(Lord Hughes.)
5.10 p.m.
Lord CAMPBELL of CROY: My Lords, I am sure that we are all grateful to the noble Lord, Lord Hughes, for explaining broadly what is in the Bill and the reasons for it. I will concentrate on three or four matters arising from the Bill. It is certainly needed to carry out some of the supplementary rearrangements required by the reorganisation in May of local government in Scotland. Also, it introduces a regime for the local government Ombudsman whom we have been keen to see installed. We shall pursue certain points in the Bill at later stages—points which have not yet been adequately explained, although there was a very full examination of the Bill in the other place.
However, I must make it clear now that there is one clause to which we take strong exception. The noble Lord will not be surprised to learn that it is Clause 19. In this otherwise routine and innocuous Bill there is this thoroughly obnoxious clause. It can best be described as the "Caledonian Clay Cross clause." It seeks retrospectively to alter the law governing the consequences of actions taken by certain councillors who at first decided not to carry out the Scottish Housing Act of 1972. Only two weeks ago, after this Bill had left the other place, the equivalent proposal for England and Wales was made public when the Government published their Housing Finance (Special Provisions) Bill. That Bill proposes that the disqualification should be removed from the Clay Cross councillors. In other words, the Government are suggesting that they should receive a pardon.
Disqualification is not a penalty which arises in Scotland, but it is now clear

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that the Government would use Clause 19 similarly to reprieve councillors who had been found to have trangressed; for example, by letting them off paying any of the £20,000 fine which was imposed by a court on councillors of Clydebank. Your Lordships will remember that all local authorities in Scotland eventually carried out the Scottish Housing Act. Therefore, the Government could scarcely treat Clydebank more harshly than Clay Cross.
The Clydebank mini-rebellion was about rent increases, despite the generous rebate scheme which was introduced by the 1972 Act. As was mentioned during the debate on the Housing Rents and Subsidies (Scotland) Bill earlier this afternoon, the maximum average annual rent increase in the 1972 Act was £26—in contrast to the scare stories which were being mischievously circulated in Scotland at the time. It is ironic that when we proposed in this House a week ago that the same limit should be retained in the new Housing Bill, the noble Lord, Lord Hughes, spoke of it as tantamount to a rent freeze. That is what the Clydebank trouble was about. In Scotland, the principle of balancing housing accounts and not going beyond the balancing of housing accounts to surpluses was a principle which the present Government accepted in the Housing Bill which is now before this House. Therefore, it is perfectly clear that there is nothing—and that there was nothing—in the 1972 Act to justify breaking the law. Hardship and unemployment did not feature, because the rebate scheme of the 1972 Act met those problems comprehensively for the first time. After that Act came into force, no family in Scotland needed to pay more rent than it could afford. None the less, an issue was built up by certain people who spread alarm by falsely painting the Act as about to increase rents steeply.
I accept that Clause 19 is an enabling clause; but it is retrospective, and this is where I differ from what has been said by the noble Lord. Because of the terms of the Bill for England and Wales, which was published very recently, it is now clear that the Government's intention is to use this clause to change the consequences which councillors faced when they decided not to carry out the law of the land in 1972 and delayed its imple-
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mentation. By those decisions, offending councillors caused harm both to their tenants who were eligible for rebates, because the rebates did not start until later than they should have, and also to their ratepayers who had to bear an additional burden for some months—a burden which they ought not to have borne.
I should like to learn the views of the Lord Advocate, who is the equivalent in Scotland of the Attorney General. We know that when the Attorney General was in Opposition he gave a clear opinion. Before the right honourable and learned gentleman became Lord Advocate did he also furnish an opinion concerning the situation in Scotland on the propriety of changing the law restrospectively; and, if he did, what were his views? The noble Lord, Lord Hughes, has said that he does not think that Clause 19 is retrospective, because no decisions have yet been taken by the Secretary of State. But that is not the point. The clear intention is to change the law under which decisions on certain conduct two years ago are to be taken, decisions which would appear to exonerate and temper, perhaps eliminate, the penalties.
As regards the wording of the clause, it gives the Secretary of State wider discretion than the local government Act of 1947. I am referring to the Scottish Act of 1947 which was passed during a Labour Government's term of office and is now in force. Part of the wording of Clause 19 is similar to the wording of Section 104, as the noble Lord has also pointed out, of the Local Government Reorganisation Act 1973. However, that is not due to come into effect until 15th May this year. It will then apply to the new authorities in Scotland, not to the former authorities. When that Act received the Royal Assent in the second part of 1973, the erring councillors in Scotland had already taken the actions for which some of them were fined, and which caused reports to be made by auditors. Therefore, it cannot be said that this is not a measure of retrospection simply because the decisions have not yet been taken by Ministers.
In the reorganisation of local government in 1973, the opportunity was taken to alter the provisions of the 1947 Act and to introduce more flexibility. I believe that that greater flexibility will

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make it easier for the Secretary of State for Scotland after May 1975, when dealing with the new local authorities in Scotland, to take what are often very difficult decisions concerning surcharges when they come to him. Of course, as the person who initiated the 1973 Act's provision I consider that it is an improvement. Everybody concerned recognises that surcharges which are to be decided under the 1947 Act might, so far as the Housing Act 1972 is concerned, be so great as to ruin—if they were imposed—certain councillors and that it would be impossible to get payment. However, as The Times pointed out yesterday, it is at that stage that Parliament should be asked to consider the remission of part, or all, of the surcharges, in the light of any anomalies of the kind mentioned by the noble Lord, Lord Hughes, about differences between the areas of various authorities. That is no reason for giving carte blanche retrospectively to the Government to exonerate councillors. It is undermining the rule of law and would be a dangerous example for other groups in the future, who might feel strongly opposed to a particular enactment which had been passed by Parliament.
If I may deal with the other parts, most of the Bill is necessary and was to be expected. There are provisions concerning the valuation system and the maintenance of assessments. We shall be raising certain points on that part of the Bill, which still need further consideration. I will not pursue those matters further now. I give a qualified welcome to Clause 12 and Schedule 2, which provide for special additional rate support grant payments for areas where there are extraordinary expenses. Although it is not mentioned anywhere in the clause or the Schedule, it is clear that the "extraordinary expenses" at present are considered to be those related to the new offshore oil industry. It has been clear for some months, because of the rapid growth of this industry in certain parts of Scotland —very often parts where there is not much population—that the local authorities who are responsible for those areas are being expected to produce roads, houses and other services very quickly, and in much greater quantities than they would normally be expected to provide.
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Most of this is because of new communities virtually arising, or existing communities being greatly expanded because of the offshore oil industry's requirements on land. I believe that the special provisions are intended also to be available in case there are other developments in other fields in the future which might cause similar situations. But we should be glad if the noble Lord could confirm that it is the oil industry which is in mind at present, and that these could apply to other industries should similar situations arise.
I would also draw attention to Clause 14, because this is intended to bring certain grants for transport to an end. At a time when, in parts of Scotland, transport costs have risen for local communities much more than elsewhere in Britain, owing to the effects of the increased costs of diesel fuel and petrol on rural areas, and particularly remote areas in Scotland, the effect can be grave on the communities. At a time when these difficulties are being experienced in the ordinary life of people living in rural areas, I hope the Government will be quite sure that they are not making a step in the wrong direction and that there will be other means adequate to meet the situation.
I come now to the Ombudsman and the provisions for a new Commissioner. I believe that these should be given time to operate. The Central Government Commissioner has set a good pattern for the way in which the Ombudsman can operate in our democratic system. When the Central Government Ombudsman was first introduced, the reaction in the country as a whole, which was certainly felt by me as a Member in the other place at the time—and I think by others—was that something like three-quarters of the complaints that came to us with a request that they should go to the Ombudsman dealt with areas for which he was not responsible. Many of them were in local government, nationalised industries and departments from which the Central Government Ombudsman had been specifically kept away. The gaps are now being filled. The Health Service has an Ombudsman, and now we hope that another area where previously many citizens have thought, incorrectly, that they could bring in the Ombudsman will

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be receiving attention from a Commissioner
The main purposes of the Bill are ones from which we do not dissent, but I repeat that Clause 19 of the Bill we believe to be entirely misplaced. We also think that it is wrong in its retrospection, and because its intention has now been made clear from the Bill introduced in the other place—its intention is to be a Scottish equivalent of the Clay Cross Bill.
5.24 p.m.
Baroness ELLIOT of HARWOOD: My Lords, I have been listening with great interest to what has amounted to almost a duet between two holders of the office of Secretary of State for Scotland: the present one, the noble Lord, Lord Hughes, whose knowledge and experience is very great indeed and the previous one, the noble Lord, Lord Campbell of Croy, who has been backing up most nobly on both this Bill and the last Bill, which was infinitely more difficult to understand.
Lord HUGHES: My Lords, I very much welcome the promotion which the noble Baroness has given me, but I am afraid it would not commend itself to the Members of another place!
Baroness ELLIOT of HARWOOD: My Lords, all I can say about the present Administration is that were the noble Lord, Lord Hughes, not where he is, I do not think the Administration would be nearly as good as it is today.
Lord CAMPBELL of CROY: Hear, hear!
Baroness ELLIOT of HARWOOD: My Lords, I hope my intervention will not be considered out of place. This is the Bill that we were waiting for when, some years ago, along with many other local authority people in Scotland, I gave evidence to the Kilbrandon Commission. At the time when we gave evidence we were told that there would be a big revolution in the carrying out of the finances of local government under the new regional and district councils. The revolution has not come. I do not know whether that is a good thing or a bad thing, but the system is the same as it has always been. However, I welcome the points made by the noble Lord, Lord Hughes, about the change in the pattern
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of the financial year. I think that is a good idea. It is also a good idea that people should be allowed to pay rates by instalments.
I was one of the people who was exceedingly critical of the organisation of the Strathclyde Region. I am not happy about it now, but I am a little reassured by what the noble Lord, Lord Hughes, has said, since he also shared the same doubts when the announcement was first made. I am glad to hear that he considers the good will between the districts and the regions is better than he had anticipated it would be. I am glad that they have made a good start. In the area in the Borders which I represented in local government for nearly thirty years, we have also made a good start; there the co-operation between the district and the region is very good. However, I am a little alarmed at the tremendous increase in the number of officials and, in consequence, in expenditure through this new local government reform. If I remember rightly, when the Kilbrandon Commission were sitting and we were all discussing this subject at great length, we were assured that we were to have larger regions and fewer officials, since they would cover more ground; and since transport and communications would be so much easier it would not be necessary to have—as in my own area in the Borders—four directors of education, four county clerks, four architects' departments, and so on. While it is quite true that we have not got four—we have only the region and the districts—we have an enormous increase both in salaries and in the number of people employed, and this will make the local government reorganisation much more expensive than we had hoped it would be.
I take no exception to the present Bill except for the clause spoken to by the noble Lord, Lord Campbell of Croy. With the exception of Clause 19 I think, on the whole, what is being suggested is quite satisfactory. I should like to ask the noble Lord, Lord Hughes, about the Ombudsman. I am glad that we are to have an Ombudsman in Scotland, because I think the appointment has worked well in England. I should, however, like to be told something about the designated body. I have been trying to understand what are to be the details of this body, but they are not very clear. How will it be

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appointed? How will it be constituted? Will there be at least one, or possibly two women? I hope it will not be the preservation of a body of men only. Apparently it is to be in close touch with the Ombudsman, who should obtain advice from both men and women, the best people whom it is possible to collect together in Scotland. I do not know whether the noble Lord, Lord Hughes, can give me any information about that. I have read the Bill, though not with all the care that I should; like all these things it came at the last minute. It is a long and complicated Bill and does not say exactly how the designated body will work and be appointed.
Except for those points, and what has been said on Clause 19 by the noble Lord, Lord Campbell of Croy, I welcome this Bill. It has points which will be helpful in the reorganisation, and I hope it will be of value in what, as the noble Lord, Lord Hughes, has said, is the biggest reorganisation in local government that has ever taken place. I can remember the reorganisation in 1929, which was bitterly opposed, and that was considered to be the best organisation of local government that we have had. We now have a new one. I have supported the reorganisation under the Kilbrandon Report and the reorganisation in the Regions and districts, except on the subject of Strathclyde. I hope, therefore, that this reorganisation will be successful and will bring good administration to Scotland.
5.31 p.m.
Lord HUGHES: My Lords, I am very grateful for the way in which the noble Lord, Lord Campbell of Croy, and the noble Baroness, Lady Elliot of Harwood, have received the provisions of the Bill. The noble Lord, Lord Campbell, was correct when he assumed that I would anticipate that he would not receive Clause 19 with great enthusiasm, but I think his fears in this regard are not completely justified. In the first place, the Secretary of State has not taken any decision and if he had to act on the basis that this clause was not there he would then have to rely on Section 201. I do not know that it would necessarily commend itself any more to your Lordships if he exercised his responsibilities under Section 201 in the same way as the Secre-
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tary of State in 1971 exercised his responsibilities in the case of four authorities who were reported to him, on interim reports from the auditor, for having failed to exercise their responsibilities in connection with school milk.
There were four cases in which there were substantial deficiencies, and in each case the Secretary of State decided that a surcharge would not be made. I understand that one of the grounds for the surcharge not being made was that the authorities subsequently carried out the provisions of the Act. If the Secretary of State had been inclined, in dealing with rents in 1975, to follow the example set on school milk in 1971, he could take as a precedent the fact that in those cases where the authorities had subsequently decided to carry out their responsibilities there was no need for him to impose the full measure of surcharge. As the only alternative available to him if he were not to surcharge fully was to make no surcharge at all, then he would do what was done in 1971.
The noble Lord, Lord Campbell of Croy, has assumed that if Clause 19 becomes part of legislation and the powers are available to the Secretary of State he will absolve all the authorities from penalty. I have pointed out that if that is what the Secretary of State was minded to do he could do that under Section 201 of the 1947 Act. If on consideration of the individual circumstances which Clause 19 would cover he feels that something between all or nothing is the appropriate penalty, he will be able to impose that. I do not know how the Secretary of State would act if Clause 19 becomes law. I am certain that it would not be his intention to attempt to recover the full amount, because so far as I know, in the case of a considerable number of councillors, the only consequence of attempting to do that would be to make them bankrupt, with a very minimal amount of money, if any, being recovered. That could be accomplished by imposing a modified penalty under the provisions of Clause 19.
Lord CAMPBELL of CROY: My Lords, I am grateful to the noble Lord for giving way. To avoid any misunderstanding, might I say that he is simply describing two different clauses, as I did. But I asked him to address himself to

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the suggestion in The Times yesterday, which applies to England and Wales as well as to Scotland, that the course of the law as it was in 1972 should be continued, recognising that some of the councillors might not be able to pay their contribution to the surcharge which might be made. That is the time to come to Parliament and to put forward the necessary remissions. What he is saying now is not dealing with the point.
Lord HUGHES: My Lords, I do not think The Times in suggesting a similar remedy for the English and Scottish situations, was on the mark. The positions are quite different. As the noble Lord, Lord Campbell of Croy, said, there is no automatic surcharge in Scotland. In England, as I understand it, there is no automatic disqualification. There is disqualification for a period of five years, provided the amount exceeds £2,000. In Scotland, disqualification would follow only as a consequence of bankruptcy. The Secretary of State could therefore be put in a position where if one of the councillors concerned was sufficiently well-off to be able to pay the amount of his surcharge, he would not be disqualified. But if he was sufficiently poor to be rendered bankrupt by the surcharge, he would be disqualified also as a consequence of bankruptcy.
We are not comparing like with like. What is being considered in another place at the present time in relation to this side of the Border is nothing at all to do with the situation in Scotland, which is totally different in its consequences for the people concerned. I would be using too much of your Lordships' time if I were to go on, because I suspect that this is another of the cases of the noble Baroness, Lady Elliot of Harwood, where the noble Lord, Lord Campbell of Croy, and I could carry on the duet for long enough and, like parallel lines, we would never meet. I will leave it at that point in the expectation that we will hear more about it later on.
The noble Lord, Lord Campbell of Croy, raised a number of points. He said he gave a qualified welcome to the clause relating to the extraordinary expenses, and that although the word "oil" was not mentioned everybody took it for granted that that was what is intended. I confirm that what is being
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spoken of at the present time is related to the oil situation. As noble Lords know, the Government have already given substantial help running into many millions of pounds to the areas concerned in the provision of housing through the Scottish Special Housing Association. We accept that the oil situation is involving authorities in the North-East in expenditure far ahead of any ultimate revenue that they might get when developments are further advanced. But there is a strong case for giving them special support, and not at the expense of others. It is additional Government money. I would confirm that it is for oil at the present moment, but it was thought desirable to draw up the provision in such terms that, if any other situation arose where there was a case for giving support to the local authorities, we should be able to use this provision. But no such other contingency is known at the present time.
My Lords, the noble Lord then referred to Clause 14 which concerns transport grants. The new regional authorities will have very much wider responsibilities in relation to transport in all its aspects and powers than did their predecessors. The obligation is laid on them to look at all aspects of rating, public transport, support for other transport operators, and so on, in the whole context. It was felt desirable—and this was done by agreement with the then local authority associations —to do away with the specific grants in certain directions, and bring them all within the ambit of the expenditure which could attract rate support grant. I remind your Lordships that this year the percentage of rate support grant has been increased to the all-time high figure of 75 per cent., an increase from 68 per cent. in the previous year. The local authorities are generally happy about that provision.
My Lords, the noble Baroness, Lady Elliot of Harwood, referred to the expected revolution in finance. I think the current version of Waiting for Godot is "Waiting for Layfield"! I shall not try to predict what will come out of that. What I do say, however, is that everybody is very dissatisfied with the rating system. So far nobody has been able to produce a satisfactory alternative to it, or supplement for it. Perhaps on this occasion we may be more fortunate. I am sure we

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are all looking forward to what the Layfield Committee has to say in due course.
The noble Baroness referred, also, to Strathclyde and was glad of what I said about the way in which it was operating. An example of the responsible way in which Strathclyde and Glasgow are looking at the difficulties which face them because of the enormous size of the authorities, is the way they are responding to provision for community councils. Obviously, the bigger the authority, the more its area is widespread; therefore, the more its centre is remote from some of its people, the greater the need for community councils to be an effective part of the machinery. I understand that proposals are being considered by both Strathclyde Region and Glasgow District in order to make certain community council machinery will not suffer from lack of finance. They are going out of their way to keep in touch with opinion.
My Lords, the noble Baroness, Lady Elliot of Harwood, referred, also, to what has been done in the Borders Region. It will, perhaps, be of interest to the noble Baroness that my next two visits to regional councils will be to Galloway a week on Thursday and to the Borders a week on Friday—so go two all-important days of the comparatively short Recess! The noble Baroness also spoke about the Ombudsman and the designated body. It is hoped to appoint an existing body; it might be the new Convention of Local Authorities, or it might be the Commission of Local Authority Accounts. This has not been decided. We are not creating something new. I suspect that now there is to be one association for all local authorities in Scotland, it might well be the appropriate body for doing this, particularly as it is the local authorities who have to pay the bills at the end of the day. But the Secretary of State has not taken a final decision on this.
Baroness ELLIOT of HARWOOD: My Lords, I hope the noble Lord will remember my point about having some women on the Committee.
Lord HUGHES: My Lords, it is becoming increasingly obvious that if the Secretary of State appoints a body and
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does not include more than the statutory woman, he will be subject to considerable difficulties. It is perhaps a little disconcerting that I do not have to look for this kind of thing only from my noble friend Lady Summerskill behind me, but also from noble Baronesses on the opposite Benches. Perhaps noble Baronesses from both sides are forming a coalition on this matter. If in fact it should be decided that it should be the Convention of Local Authorities and a woman is not appointed, then the noble Baroness will know that she must not blame the Secretary of State, but must get after the Convention of Local Authorities instead.
My Lords, with the exception of Clause 19, the Bill has been welcomed. It has been welcomed by the local authorities, and not surprisingly, because it is a combination of important and, with the exception of Clause 19, noncontroversial matters, and we have endeavoured to confine legislation for improving the sphere in which the new authorities will work to those things which the local authorities wanted, and to forms which they found acceptable. I think in every case we have succeeded. Therefore, I do not anticipate that over the whole sphere of the Bill I will have undue difficulty at the next stage. However, as was said by someone before me, we will wait and see.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

RATING (WATER HEREDITAMENTS) ORDER 1975
5.47 p.m.
Lord MELCHETT Lord MELCHETT rose to move, That the Rating (Water Hereditaments) Order 1975, laid before the House on 12th March, be approved. The noble Lord said. My Lords, the Order before your Lordships' House is a simple one. It may appear very complicated, but I can assure your Lordships that it achieves a simple purpose. To make it simpler, I intend to use the word "installation" instead of "hereditament", which I find impossible to pronounce. I also intend to use the word "total" instead of the word " cumulo", which sounds more meteorological than having something to do with rating.
My right honourable friend the Secretary of State for the Environment was given powers in the Local Government Act 1974 to make provisions for the rating of certain public utilities—gas, electricity, transport boards and others, including statutory water undertakings. Provisions already exist for rating these industries, and these provisions have had to be reviewed, in consultation with all the interested parties, before any change can be made. My right honourable friend the Secretary of State will make a Statement about these matters in another place in due course. The rating of statutory water undertakings is still being considered but a special problem has arisen that demands an immediate solution.
The existing provisions for determining the rateable value of the rateable installations of statutory water undertakings are contained in Section 31 and Schedule 4 to the General Rate Act 1974. These provisions lay down a method for determining a total rateable value, called a cumulo value, for each statutory water undertaking. This total is then apportioned to rating districts and the apportioned amounts become the rateable values of the undertakings' installations in each district. If an undertaking is changed by acquisition, merger or division, there are provisions for reapportioning its total value. As my right honourable friend has recently indicated in the Report he laid before Parliament, the formula has worked well up to now. But difficulties would arise if the formula were applied without amendment to the situation created by the wholesale mergers of undertakings which have recently taken place.
Under the formula these mergers would require in 1975–76 extensive reapportionments to rating districts of the total values of the present undertakings. The task would be enormous, and all the time and effort would be useful for only a year if the whole basis of rating these undertakings were changed as a result of the review of the rating of public utilities, of which I spoke earlier. The purpose of this Order then is to avoid these complicated reapportionments. This is achieved in Article 4(3) of the Order. The effect of Article 4(3) is to require the total value of each undertaking to be appor-
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tioned from 1975–76 on, pro rata with the apportionments of the total of that undertaking or the former undertakings on 31st March 1975.
This does not mean that the apportionment of rateable value to each rating district will necessarily remain unchanged. There are provisions in the 1967 Act whereby the total rateable value of an undertaking can be increased because its throughput has increased by more than 10 per cent. over a specified period of five years. These provisions are to continue. This means that where the total rateable value is increased in 1975–76 each district's apportionment will be increased proportionally. Local authorities as a whole will, therefore, get the increase in rateable value due under the existing formula. Noble Lords can rest assured that local authority interests have not been forgotten. Indeed the local authority associations have been consulted fully on this Order.
The other main provisions of this Order, in Article 4(1) and (2), simply recognise that the Commissioners of the Inland Revenue and the valuation officers will not be able to comply with certain time limits laid down in the 1967 Act, in relation to adjustments under this Order. My right honourable friend the Secretary of State has consulted all those affected and they in no way object to what is proposed. I therefore commend this Order to your Lordships' House, and beg to move.
Moved, That the Rating (Water Hereditaments) Order 1975, laid before the House on 12th March, be approved. —(Lord Melchett.)
Lord MOWBRAY and STOURTON: My Lords, we must all be grateful to the noble Lord, Lord Melchett, for the way he has explained what appeared on paper to be an extremely complicated Order, and for the simple explanation of "hereditaments", which I, in my rather great ignorance, thought belonged exclusively to the Kingdom North of the Border and I now find has a good English home down here in the Civil Service. I was also very grateful for the explanation that "cumulo value" means total value. Although one had come to that conclusion, it makes an enormous difference

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having it explained so well in your Lordships' House.
This is an Order which I think any Party in power would have to bring in to implement the changes in local government that have taken place. I can only thank the noble Lord and say that we give the Order our blessing.
On Question, Motion agreed to.

COMMONWEALTH PORTLAND CEMENT COMPANY, LIMITED BILL [H.L.]
Reported without amendment.
DISTRICT COURTS (SCOTLAND) BILL [H.L.]
Returned from the Commons agreed to with Amendments; the said Amendments to be printed.