LORDS AMENDMENT (Hansard, 6 May 1975)

§ Lord HUGHES
My Lords, I beg to move that this House doth not insist on their Amendment No. 1. The grounds which the Commons have given are that the Secretary of State should be empowered to exercise, in dealing with auditors' reports received by him after 1st September 1973 under the Local Government (Scotland) Act 1947, a discretion similar to that which is available to him in relation to reports which fall to be dealt with under the Local Government (Scotland) Act 1973.
My Lords, we have debated this issue at great length. There is nothing between the two sides of this House on the principle that the Secretary of State should have discretion in dealing with audit reports: this is written into the Local Government (Scotland) Act 1973 promoted by the noble Lord, Lord Campbell of Croy, and the relevant section, Section 104, is actually already in force—though, of course, only in relation to the new authorities. What is at issue is whether the Secretary of State should have discretion in dealing with auditors' reports received since September 1973 in relation to members of the old authorities. On these, the Opposition in your Lordships' House consider that he should deal with them according to the old law, which gives no discretion—it has to be all or nothing —and then bring before Parliament proposals for indemnity where a surcharge has been made.
This proposition has been considered in another place, and they have taken the view—which I confess I share—that it would be a roundabout and unsatisfactory way of arriving at the same result as Clause 19 seeks to secure. Indemnity is appropriate where penalties have been exacted and have to be remitted retrospectively. But no penalties have been exacted here, nor, if surcharges were made, would they be penalties in any case; they are more in the nature of debts. The problem is to achieve a sensible method of reaching decisions on auditors' reports, and Section 201 of the 1947 Act as it stands, in relation to the kind of reports we are considering, is decidely not a sensible method. The 200 Commons think that the right course is to make available to the Secretary of State, by way of Clause 19, the substance of the new powers conferred by 1973 Act, so that he can deal with the outstanding cases on that basis. I recommend to your Lordships that we should concur and not insist on the Amendment. My Lords, I beg to move.

Lord CAMPBELL of CROY
My Lords, my noble friends and I regret that the other place have not agreed to the omission of Clause 19. They had an opportunity of second thoughts about a clause quite unconnected with the rest of the Bill. The only purpose of the clause is to give the Secretary of State for Scotland discretion to deal with the consequences of actions taken in 1972 by certain councillors who decided not to put into effect the Scottish Housing Act. As the noble Lord said, the substance of the clause will come into effect anyway in 10 days' time, about the time when this Bill is likely to be enacted, when the new system of local government in Scotland begins. So this Clause 19 simply duplicates Clause 104 of the Local Government (Scotland) Act 1973. The only difference is in the effect, and that is a retrospective effect.
I would remind your Lordships' House that the protests against that Scottish Housing Act were misplaced at the time and had entirely the opposite effect to that intended, largely owing to misinformation circulated about the Act. Failure to implement it resulted in the less well-off tenants continuing to pay for some weeks higher rents than they would have paid under the Act if it had started, because of the rebate scheme which it introduced. The fear of steep increases for other tenants who were better off was without foundation, because there was a limit written into the Act, an average increase limit of £26 a year, which, when we tried to introduce it into the Housing Bill a few weeks ago, we were told was regarded as the equivalent of a rent freeze.
This paradox underlines the perversity of the refusal of certain councillors in 1972 to observe the Scottish Housing 201 Act, since their action harmed the very tenants whose interests they were supposed to be defending, besides damaging the interests of their ratepayers. While some councillors were delaying, although eventually they all implemented that Housing Act, there were some councillors South of the Border refusing to implement the English Act. The procedures governing such situations are entirely different North and South of the Border. For example, the Scottish councillors did not incur disqualification. But the councillors both North and South of the Border were offending in a similar way, refusing to put Housing Acts into effect.
This clause gives the Secretary of State wide discretion to deal with the consequences of these actions in Scotland at some time in the future, without consulting Parliament. For England and Wales, a Bill is going through another place proposing action of a definite kind. In the case of Scotland, this is an enabling clause. The Secretary of State can impose a full surcharge if he considers it appropriate, he can modify it, or he can let the councillors off completely. This House has no inkling of what the Secretary of State will do. This is unsatisfactory. But as there is no particular action proposed, I would not recommend my noble friends to insist on the deletion of this enabling clause. We dislike the retrospective element here, the only reason for duplicating a provision which is coming into force in 10 days' time. We dislike giving a blank cheque for dealing with refusal to carry out the Statutes of Parliament. We hope the Government will give Parliament the opportunity to discuss this matter again, when the time comes for the Secretary of State for Scotland to take decisions under this clause.

§ Lord HUGHES
My Lords, I do not feel it necessary to re-argue the merits of the 1972 Act, and I do not quarrel with the desire of the noble Lord, Lord Campbell of Croy, to make a final justification of it. With regard to Parliament's having an opportunity to discuss anything which the Secretary of State may do in exercise of the discretion which it would now appear he is to receive, it would be perfectly open, of course, for any Member, either in this House or in another place, to put down a Question 202 at any point when the Secretary of State had acted in follow-up of these powers.