§ 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 1148 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 1149 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- 1150 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 1151 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 1152 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 1154 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 1155 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- 1156 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 1157 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. 1158 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 1159 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.
§ 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 1160 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 1161 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- 1162 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 1163 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 1164 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 1165 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 1166 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.