HL Deb 04 July 1980 vol 411 cc736-63

11.10 a.m.

Read 3a.

Lord DRUMALBYN moved the amendment:

Leave out Clause 164.

The noble Lord said: My Lords, the amendment that I wish to move is to invite your Lordships to strike out Clause 164 of this Bill described in the rubric as: Arrangements as to construction of buildings or carrying out of works.

As not everyone of your Lordships will have in his hands a copy of the Bill, may I begin by reading the clause. Clause 164 (1) reads: Notwithstanding anything in section 101(10) of the Act of 1972, the Local Authorities (Goods and Services) Act 1970 or any other enactment, the Manchester council may enter into arrangements for the construction within the county of buildings, or the carrying out within the county of other works by them on behalf of an authority to which this section applies.

Subsection (2) says: This section applies to—

  1. (a) another local authority;
  2. (b) the water authority;
  3. (c) the police authority;
  4. (d) the Greater Manchester Passenger Transport Executive;
  5. (e) a Health Authority (within the meaning of section 128(1) of the National Health Service Act 1977) in the county."

"Local authority" is defined in Clause 1 as the county council; that is, the Greater Manchester metropolitan county council, or a district council. "District" is defined as a district in the county. The clause would thus give power to Manchester city to engage in major construction work all over the county, but only within the county. On the Second Reading, which took place on 19th February 1979, my noble friend Lord Cullen of Ashbourne moved during the proceedings that it be an Instruction to the Committee, to whom the Bill was committed, that they should give special consideration to Clause 196, arrangements as to construction of buildings or carrying out of works—that is now Clause 164—in order to satisfy themselves that it does not constitute an undesirable extension of the powers and functions of local authorities to operate in competition with private industry and interests in the same field.

My noble friend also said in the course of the short debate which took place in moving his Motion that the two federations concerned —that is, the National Federation of Building Trades Employers and the Federation of Civil Engineering Contractors— considered that the powers sought by Clause 196 should not be granted unless the promoters can show that extending the construction activities of the contracting authorities would constitute as efficient an application of the limited resources, manpower and materials available to the industry as would be achieved by private contractors.

The Bill was then committed to a Select Committee. The two federations presented a petition against the clause but later withdrew it—something which they tell me they have never done before. They withdrew it not because they were any less opposed to the clause—quite the contrary—but because they were convinced that the clause would not be allowed by Parliament to stand and so they did not consider it necessary to oppose it. The withdrawal, I need hardly add, took place after the change of Government in 1979, and the National Federation told me they considered that the clause was totally at variance with the policy of the new Government. As a result, the clause was unopposed and the Select Committee heard evidence on it given on behalf of the promoters only, though a representative of the Department of the Environment was allowed to state the views of the department after the evidence from the promoters had been heard. I may say that the evidence given on behalf of the promoters extends to 33 pages in the transcript of the proceedings, and the views of the department take up four pages.

The Select Committee reported in the following terms: The Committee were satisfied that the promoters had proved a need for the clause. The Committee were further satisfied that although the clause constitutes an extension of powers and functions of the Manchester City Council to operate in competition with private industry and interests, the operation of Part III of the current Local Government, Planning and Land (No. 2) Bill would secure that such competition was not unfair.

The Secretary of State had previously reported on the clause as follows, and the report is dated 14th July 1979: This clause seeks to extend the scope of the activities of direct labour organisations of the City of Manchester and the Wigan Borough Council"—

Wigan later withdrew— to allow them to carry out construction work for other councils and public authorities in the Greater Manchester area. The Secretary of State intends to bring before Parliament early legislation directed at all the direct labour organisations in the country which will aim to control their operations. The Secretary of State therefore recommends that the clause be disallowed.

The promoters sought to argue that the last sentence was a non sequitur, but it is only right to point out that, at the time, the legislation was in its early stages of preparation and it was impossible to foretell at that stage precisely what the legislation would contain. The legislation is of course the Local Government, Planning and Land (No. 2) Bill, which is expected shortly to come before this House.

I should like to make two points at the outset. The first is that the need for the clause must at least include the need of the recipients of the service for it. Indeed, I would say it is, and always is, the main element. In this case the recipients live outside the area of the promoters, who have no responsibility for them. Secondly, the power is new and unprecedented. Before such a power is granted, especially when it is a power to be exercised outside the promoters' area, it is surely desirable to take into account the effect of granting it on future applications from other local authorities for such a power.

The essential point about this clause is that the power contained in it to enable Manchester City to extend the area in which it is entitled to erect new works outside its own municipal area is wholly new and unprecedented. Let there be no confusion between the City of Manchester and the Greater Manchester Metropolitan County. In the Long Title of the Bill the two are referred to separately and indeed I understand that Clause 196 (now Clause 164) originally proposed that the powers should be conferred not only on the Borough of Manchester but on the Borough of Wigan.

The legislation—that is, the Local Government Planning and Land (No. 2) Bill—is expected shortly to come before this House. I do not intend to quote from the Bill, but as counsel for the promoters relied heavily in his arguments on the provisions in Part III—arguments which may very well have influenced the conclusions of the Select Committee—I would ask the indulgence of the House to refer to what was said.

The present powers of the Manchester Council to construct buildings are relevant here. What are they? They are to construct any building or construction needed for the discharge of their own statutory functions; powers which local authorities have long been deemed to possess and which were statutorily conferred on them by Section III of the Local Government Act 1972. Those are broad powers which, subject to any other enactment, empower local authorities, to do anything…which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions.

I suggest that the primary duty of local authorities is to look after their own electors. Any new proposal to extend those functions to cover the needs of electors of other districts has to be looked at with more than usual care. The promoters sought to argue that there is a kind of precedent for the powers proposed, in that local authorities are expressly permitted under the Local Authorities (Goods and Services) Act 1970 to carry out maintenance work for a range of public bodies listed in orders made under that Act.

I would ask your Lordships to note that that was an Act passed under a Labour Administration, an Act which clearly defined the limits to which Parliament was prepared to go. It is true that local authorities were given powers to construct new works in overspill areas, but counsel for the promoters recognised that the power in Clause 164 has nothing to do with overspill. There is neither parallel nor precedent at all there. Why then is Manchester Council seeking to extend its construction powers in this unprecedented way?

There appear to be three main reasons: first, because they say that they need to widen the base of the operations in order to provide training for building trade apprentices; secondly, because they say that they need a wider area in order to preserve their present establishment and occupy their resources; and, thirdly, because they believe that their department provides a good service which is capable of competing with private builders, to which I might add because they feel that the Local Government, Planning and Land (No. 2) Bill gives private builders sufficient protection against unfair competition from Manchester Council.

Let me deal with these arguments, one by one. The promoters claim that they have a superior system for the training of building trade apprentices which they wish to extend. This claim is repudiated by the private builders. They acknowledge that Manchester has a good record in this regard, but deny that it is any better than that of private constructing firms. They point out that the ratio of trainees to operatives in private contracting firms was 1 to 10, at a time when Manchester had a ratio of 1 to 9, but at the last count the ratio for Manchester was 1 to 11.7. Evidence was given that about 50 per cent. of Manchester's apprentices leave to join other organisations. It cannot be assumed from that that if Manchester trained fewer apprentices private contractors would suffer. It may well be that a similar proportion of apprentices trained in the private sector subsequently leave to work elsewhere. The number of opportunities for apprentices is related to the amount of work in hand.

Secondly, the promoters also argued that they needed to extend their area in order to preserve their present establishment. There is, of course, a decline in building construction in Manchester, as elsewhere, in present economic circumstances and private builders are also having to cut down their establishments. Why should Manchester be exempted from the effects of the recession at the expense of private builders? It is not enough to argue that Manchester has a policy of no redundancies. Surely Manchester should adapt itself to the real needs, as private employers have to do—

Lord ELWYN-JONES

My Lords, will the noble Lord give way? I am most grateful. I am not sure that all of us are following this exercise. As I understand it, the noble Lord is now reading out, at, if I may say so, considerable length a submission by one of the counsel, which was heard by the Committee which had to consider it. Are we now to have the treat of listening to the speech of counsel for the other side? What is the object of this exercise?

Lord DRUMALBYN

My Lords, I do not quite follow what the noble and learned Lord has said. I have pointed out at an earlier stage that there was no cross-examination of the witness, during the procedures on the Bill before the Select Committee. I have also said that I am not quoting from the report. I must examine the arguments put forward by the promoters, if I am to make a case that there are answers to the points that were made. Without that, I cannot see how I can possibly contest the standing of Clause 164. I hope, therefore, that noble Lords will continue the indulgence that they have shown me so far, since I pointed out that it was necessary to do this.

Lord SEFTON of GARSTON

My Lords, will the noble Lord give way? Would he not accept that, if he now goes on to put the case in favour of the opposition, then, inevitably, someone will want to put the other side of the case and that we shall finally finish the proceedings of this House in the situation of having heard both sides of the case that have already been put in Committee?

Lord DRUMALBYN

My Lords, the problem I have to face is that the case has been so fully put already. Noble Lords will probably have received a copy of the representations made by the Greater Manchester Council, or Manchester City, and of course they have been discussed in great detail before the Select Committee. I think it is only fair that I should attempt to rebut, to the extent that is necessary, what has been said. I do not see how we can proceed otherwise.

The promoters gave evidence that other boroughs in the area were willing to put Manchester on their list of builders who are invited to tender for major new construction, if the clause remains in the Bill. No doubt they would, but that does not, in itself, indicate dissatisfaction with the work done by private builders. Still less does it give any assurance that Manchester would win contracts, because contracts would of course have to follow on the basis of tenders.

Coming to the third point, it is not as if Manchester has a particularly good record in its building activities. The district auditor felt obliged to report adversely on its direct labour organisation in August 1976, in respect of the first period after the direct works department became subject to his audit. He then stated: It is estimated that the extent to which the council has not received value for money because of bonus abuses and over-generous bonus targeting is not less than £340,000 for each year"— presumably 1973–74 and 1974–75. From evidence given to the Select Committee, it seems that they did better in 1976–77 and that they are still endeavouring to put their house in order, with of course the Local Government, Planning and Land (No. 2) Bill in mind.

But the fact remains that their record is not so uniformly good as to justify the conferring of exceptional and unprecerented powers. Even if it had been, there really would, I submit, be no justification for extending Manchester's area of operation. As I have said, there is no precedent for such an action. To create a precedent now, would be to give an open invitation to other local authorities to seek similar powers.

I am aware that my putting down this amendment has been criticised. Naturally, if one appears to have won the game, one is never too pleased if one is told that the game is not yet over. There is an inherent right in Parliament, I submit, to review the findings of any of the Select Committees when they report to Parliament. Admittedly, it is very rare, but not unprecedented, for a Back-Bench Peer to put down an amendment on Third Reading. I did so, because it seemed to me necessary to challenge some of the evidence upon which three Members of the Select Committee had to base their conclusions, and to draw attention to the lack of expert cross-examination.

I mean no disrespect whatsoever to the Select Committee. I simply believe that they did not hear the whole story, and I have endeavoured to remedy the necessarily ex-parte nature of the evidence. But at the end of the day Parliament's decision should be based on principle. Each local authority has an inherent right to build in its own area in performance of its statutory functions. It has no inherent right to build outside its own boundaries. Only Parliament can confer such a right, not, I may say, Select Committees, which have to report back to Parliament. Direct labour organisations exist to serve the needs of their own authorities.

Tendering for contracts in other areas constitutes a risky and indeed an expensive business. The promoters ask: "Why should not Manchester Council be given the opportunity to tender for contracts outside the area for which they are responsible?" They answer their own question by saying that this would tend to bring down the general level of tenders. Perhaps it would; perhaps it would not. But one thing is sure. If the Manchester Council set out to undercut tenders from the private sector they would soon find themselves in the position of not meeting the rate of return on capital in real terms that is to be prescribed under the Local Government Planning and Land (No. 2) Bill and so being ordered to discontinue or modify their major construction operation not only in the Greater Manchester area but in the City of Manchester itself.

Lord DAVIES of LEEK

My Lords, will the noble Lord give way? This is a fascinating argument and I should be grateful if he would give way for about half a minute. Is the noble Lord aware that, under the EEC, local authorities cannot refuse contracts from within the Common Market and there is nothing to say that they could refuse contracts from within the Common Market where direct labour was employed in some of the cities that are members of the Common Market? In other words, he is taking the whole of this House into deep, deep water and I advise the House not to take the slightest notice of the attempt.

Lord DRUMALBYN

My Lords, I do not think that was a matter that came into evidence before the Select Committee, but it is true that there are these powers. I think I am right in saying that local authorities do not have to issue tenders to other members of the Common Market, nor, indeed, wider than that. It is only the national Government and the agencies of national Government that have to do so.

The new Bill, like any other law, will deter, but it cannot prevent bad practice. It should, however, ensure that the malpractices ultimately are discontinued on the direction of the Secretary of State, but serious damage could be done to the private sector in the meantime. I think this is something that has not been taken into consideration. The proper answers to the question, "Why should not Manchester Council be given the opportunity to compete outside their own area?" are surely these: because it is outside the area for which they are responsible; secondly, because it is not right for them to take risks with their ratepayers' money in competition with the private sector; and thirdly, because no other local authority enjoys this privilege. It is just not fair. If Parliament ever decides to allow local authorities to extend their construction areas, let Parliament legislate to give such an opportunity, as it has already done for maintenance, to be available to all cities and large boroughs if they want it.

I submit that it is not right to confer these powers on Manchester alone merely because they ask for it. In my view, and I believe in the view of the vast majority of my noble friends on this side of the House, it is simply not right in principle to allow local authorities to risk their ratepayers' money in commercial ventures, albeit in the public sector alone, where there is already a fully developed private sector whose function it is to take risks. I hope very much that my noble friend, Lord Bellwin, will confirm that it is not the policy of Her Majesty's Government to permit public commercial enterprise to be extended at the expense of private enterprise, and I hope your Lordships will accept his advice. I beg to move.

11.35 a.m.

Lord WALLACE of COSLANY

My Lords, before I get down to my arguments, I want to make it perfectly plain that I speak as a Member of this House, from this Front Bench, but representing a large number of Members of the House. In other words, I speak as a House of Lords man and certainly in no narrow, party political sense whatever. I want the House to understand that clearly, whatever else it may decide.

We are dealing with a very serious issue. If the noble Lord's amendment is carried, we shall be creating a precedent which will have serious repercussions on our Private Bill procedure, because it is a fact that no Government have yet opposed or challenged the decision of a Select Committee. It might be argued that a Back-Bench Member is moving this amendment, but in point of fact it is well known that the Government have given evidence to the Committee of their opposition to the Bill and to the clause. And therefore it is right to assume that although the noble Lord, Lord Drumalbyn, is moving the amendment, it has considerable support within the Government. Your Lordships' House is giving the Bill its Second Reading and it passed an Instruction to the Committee to give special consideration to the clause which is the subject of the proposed amendment to satisfy themselves that there was no undesirable extension of powers to operate with private industry and interests in the same field.

An additional reason for the Committee to exercise the closest scrutiny and consideration was the adverse report of the Secretary of State for the Environment, based mainly on the Government's intention to introduce legislation which, amongst other things, was aimed at controlling direct labour organisations. True, the Government have introduced the Local Government Planning and Land (No. 2) Bill, which provides means of ensuring that direct works organisations operate efficiently and fairly vis-à-vis the private sector. As we know, the Bill is in another place at the moment and has yet to reach this House. To submit an amendment to delete Clause 164, based as it obviously is on legislation which has yet to reach the statute book and which has not even been considered by your Lordships' House—legislation which, I may add, could face possible amendment—is high-handed and questionable.

Lord DRUMALBYN

My Lords, will the noble Lord allow me? I thought I made it clear that that was not the ground at all on which I was opposing the legislation. Indeed, it is the ground on which the promoters gained support for it in the Select Committee.

Lord WALLACE of COSLANY

My Lords, it was included in the Select Committee Report, and in point of fact it was taken into account. The Select Committee did take it into account, although it is not yet law and on the statue book. That is the point I am making.

In my opinion the amendment also constitutes a vote of no confidence in the Committee, who have taken all factors into account, including the Government's proposed legislation and policy. In addition, the petition against the clause by the National Federation of Building Trade Employers and the Federation of Civil Engineering Contractors was eventually withdrawn on the grounds, as the noble Lord, Lord Drumalbyn, now says, that the clause would not be allowed by Parliament because of the policy of the new Government. And there we have it.

Lord DRUMALBYN

I did not say that, my Lords. I said that this was the opinion of the opponents of the clause.

Lord WALLACE of COSLANY

That is the point. I do not disagree with the noble Lord. That is virtually what he said. They withdrew on the grounds which we now know from the noble Lord, Lord Drumalbyn. Considerable time was taken in hearing the evidence, including the evidence against by representatives of the Secretary of State for the Environment, and the committee reached a conclusion, after extremely careful consideration, which should be supported by this House on whose behalf the committee acted.

I am very concerned about the way in which this matter has been handled in the House. Bearing in mind that the Secretary of State submitted an adverse report and recommended that the clause should be disallowed and that his representatives gave evidence against it, it is very evident that the Government are against the clause and, either directly or indirectly, are determined to defeat it. Although the noble Lord, Lord Drumalbyn, has explained this, there is a question about a Back-Bench Member moving here an amendment which is against Government policy and to which the Government are determinedly opposed. This may be a back door method of getting it, but this is an assumption and we could argue about that.

We are dealing, in the main, with proposed legislation, part of which has been considered in another place, and we have yet to deal with it. The three noble Lords who formed the Select Committee are of high repute and are highly respected in this House. I say quite emphatically that the committee has discharged its duties to my satisfaction and to the satisfaction of a large number of Members of this House and deserves the confidence of the House.

I am seriously concerned about the amendment and the way it is being handled, but what is the position on a Private Bill? This is something which we should clear up for ourselves. I quote Hansard, cols. 778 and 779 of 14th July 1955 on the Kent Water Bill. The Lord President of the Council, the Marquess of Salisbury, speaking for the Government, said: My Lords, this seems to be a point upon which the Leader of the House should give some guidance. I am sorry that did not hear the earlier part of the discussion, but the point raised by the noble Lord, Lord Teviot, is a prefectly simple one; namely, has the House any interest—discretion is probably the right word—in this Bill once the Select Committee has reported? The answer is that the Select Committee is a Select Committee of the House, and the House is, as it were, the sovereign body in the matter. At the same time, if a Select Committee has reported, having given so many days of time to the most careful consideration of every point raised on this or any other Bill, then I should have thought there would have to be new and special considerations before the House decided to reverse a recommendation of that Committee. Otherwise, it seems to me it would knock a great hole in the whole system. The time of the whole House cannot be fully occupied with matters of this kind, and the House appoints a Committee to give special consideration to a Bill of this type. Once it has considered it, and reports to the House, if there are some special or new considerations it would, of course, be open to the House to take whatever action it thinks proper; but it would have to think most carefully before it reversed the recommendation of the Committee". I submit in all sincerity that there is no new or special consideration to be given to this Bill. The committee, appointed by this House and responsible to it, had before it for consideration the Secretary of State's report and the evidence of his representatives. It also took into account the provisions of Government legislation; namely, the Local Government, Planning and Land (No. 2) Bill, yet to be discussed by this House and yet to become law. It has been held that the Bill conflicts with Government policy. This was the basis of the Instruction moved by the noble Lord, Lord Cullen of Ashbourne, in February 1980.

There is no new or special consideration. If it is a fact—I am not arguing about this—that the Government wish to create a precedent, they should do so openly. Bearing in mind what the noble Marquess said and bearing also in mind that the Select Committee, which has the confidence of the House, has heard all the evidence and has made a report, I suggest to the House that it should reject the amendment.

11.46 a.m.

Lord SEFTON of GARSTON

My Lords, I am mindful of the fact that your Lordships' House has a very heavy programme. It is essential that we should get through the Housing Bill, and I do not want to take up too much time in saying what I feel should be said. First, let me join my noble friend Lord Wallace of Coslany in complaining, and expressing my point of view as a younger Member of the House, that this matter should have been dealt with in this way. I have been here long enough to know that this House is very jealous of its reputation outside. At this very moment we are in grave danger of destroying that reputation. Fundamentally, that reputation means that when anyone approaches this House he expects fair play. Fair play means that he should be given an opportunity to express his view upon any particular matter coming in front of the House. The way in which we decide that that should be done is through a Select Committee.

When this matter came before your Lordships' House last time I opposed the concept of giving an Instruction to the Select Committee because I believed that beneath that Instruction, which appeared to be harmless on the face of it, was a political desire to destroy the intentions of the greater Manchester Bill. I said that if we sought to give Instructions, it might be interpreted as giving a bias to the Committee's viewpoint. That was hotly disputed. The noble Lord, Lord Harmar-Nicholls, implied in his speech, which is on the record, that no such intention was in their minds and that all they wanted to do was to ensure that the Select Committee had all the facts in front of it so that it could consider the relevant issues. I am glad that the noble Lord, Lord Drumalbyn, agrees with me.

Now what has happened? It is now revealed that all the while there was an intention to destroy the purpose of the Bill. I have no objection to that, provided that the case for and the case against are fairly put and provided also that both sides are entitled to a hearing. I pointed out that it was wrong to have a debate on the principles of the Bill when the promoters and the petitioners against were not present. That was accepted. It was also accepted that they should both appear in front of a Select Committee. I do not know, of course, but it seems to me that what we have been hearing this morning from the noble Lord, Lord Drumalbyn, is merely a restatement of the petitioners' point of view. If the petitioners wanted to do that, they could have done it in the Select Committee. It may be that the petitioners feared to put it in front of the Select Committee on the ground that their case would be destroyed. I do not intend to argue the merits or the demerits—

Lord STANLEY of ALDERLEY

My Lords, does the noble Lord think that the petitioners could possibly have thought about their purse? I have had experience of this. It is a very, very expensive thing to petition in this House.

Lord SEFTON of GARSTON

My Lords, of course it is very expensive. If local authorities have to go through the expense of appearing in front of this House, so does the private sector. Nobody should suggest to me, in view of the money wasted in the private sector, that they have not got the money to make the necessary representations in front of this House.

I do not want to debate the merits or demerits of private enterprise as against public enterprise, but the Government are not saying that public enterprise should not be given a fair crack of the whip. If they are saying that, let them say it frankly and let them put it in the Local Government Planning and Land Bill. They do not intend to do that. This is merely a back-door method of achieving the aims of certain people who are supporters of most of the people on the benches opposite.

Let me deal with the case presented by the noble Lord, Lord Drumalbyn, on two points only, because I think it would be counter-productive for me to answer all the points that would remain. We would then in effect have achieved a rehearing of the Select Committee and that I am opposed to. First, he mentioned the fact that at a certain period of time Manchester City Council would run into difficulties to the extent of £300,000. He completely glossed over the statement given to the Select Committee that in another period of time Manchester City Council saved £400,000 on the basis of the second highest tender.

Lord DRUMALBYN

My Lords, if I may interrupt the noble Lord, I hope he will not pursue that line because I specifically said that they had done better lately.

Lord SEFTON of GARSTON

My Lords, all I am saying is that the case in that regard was presented in detail with figures mentioned in the other, but in the other it was glossed over. Let me deal with the D of E's evidence to the Select Committee. It reads: …were Manchester direct works to undertake these building jobs, would be expenditure within the public sector, and it is the Government's policy to transfer and shift resources from that sector if at all possible; and the alternative would be to have the work done in the private sector. The case for the D of E did not even represent that the transfer of resources from the public to private sector depends on who pays for the job and Manchester City Council is not intending to go out into the broad fields and compete for private jobs. It is seeking the opportunity to do work for other local authorities and if you prevent the Manchester City Council from doing that and give the work to private enterprise it is still within the public sector.

The two points that I have mentioned to your Lordships are merely two points in what could be a long history, because if we are to re-hear the case we must at least hear 36 pages of closely-typed evidence given to the Select Committee, and I should like to conclude on this note. I had some doubts as to whether or not the role of your Lordships' House had been weakened and I believe that the role of your Lordships' House is absolutely vital in the sense that it is a second chamber that keeps a check on the executive; namely, the other place. I believe that is absolutely essential and a major political battle facing this country is whether or not we can bring that point of view home to the people outside this House. If we do, we shall preserve a democracy that has proved itself for over 300 or 400 years; if we do not, then the consequences for this Government are fairly grim in view of the economic situation we face and an attempt to upset a Select Committee like this not only destroys the procedure of this House, but it destroys the faith of the people who have come along in good faith and prepared their case, who go to the Select Committee and expect to be given a fair deal in the name of justice. We should reject this amendment and I suggest to the noble Lord, Lord Drumalbyn, that if he thinks of the consequences as to the fate of this House he should do the decent thing and withdraw it.

Lord SWINFEN

My Lords, before the noble Lord sits down, I wonder whether he can explain why only one of the local authorities in the Greater Manchester County requires this power and none of the other local authorities seem to want it?

Lord SEFTON of GARSTON

My Lords, I suspect that that comes from a person who is not very much involved in local government. One of the major problems of local government is that the last reorganisation of local government was not a sensible one.

Several noble Lords: Oh!

Lord SEFTON of GARSTON

I do not know why that should cause amusement. It was not a sensible one because it did not take into recognition the economic factors that should be taken into recognition when one decides the areas of a particular source of government. The reason why we need one authority in an economically integrated area to do this kind of work is quite plain to me and to most people inside local government. It would be foolish to have a public sector works enterprise in the Greater Manchester area under the control of all the local authorities. I should like to say this about local authorities. This is not a party political issue because I have received a letter from the Merseyside County Council, which is dominated by Conservative Party members and evidently intending to carry out Conservative policy and that letter asks me to support the defeat of this amendment.

11.55 a.m.

Lord AYLESTONE

My Lords, I hope to be very brief—in fact I shall be, but I had the privilege of being a Member of the Committee under the noble Lord the Lord Chairman of Committees. In dealing with Bills of this sort, I would remind the House that we are thinking now in terms of one clause. We can set up perhaps four Bills a year, most of them with 200 to 300 clauses, over a great period of time. In this particular case of this one clause we spent five hours and we felt that it was no part of our job (and we discussed this) to take into consideration what one might term political ideologies. In this case whether one is in favour of direct labour or whether one is against it. We felt that was no part of our job. In considering this particular clause we had to consider, as we do in all cases, whether in fact there is a need for it, and we came to the conclusion, having taken into consideration the instruction from this House, that there was in fact a need.

I will not go into the details of the whole of the discussion that took place during those five hours when we heard counsel for the promoters; we heard one witness put in by the promoters; we heard quite a long speech on behalf of the Secretary of State and his department's view. I hope I am not misquoting the noble Lord, Lord Drumalbyn, but I think I heard him say that there was no cross-examination. In fact the noble Lord the Chairman of Committees, my other colleague and myself questioned not only the counsel but the witness and in fact the representative of the department.

Lord DRUMALBYN

My Lords, I was careful to put in the word—without any disrespect to the Select Committee—"no expert cross-examination". There was counsel on one side alone and the evidence was not subject to cross-examination because there was no other counsel there.

Lord AYLESTONE

My Lords, if it was a criticism of the Chairman of Committees and myself and my other colleagues that we are not experts, then I accept the criticism. We are not; we are put there by the House to do a job and we do the best we can with it. The question has been raised as to whether or not there were petitioners against the Bill promoted. In fact, there were two, as the noble Lord, Lord Drumalbyn, said, but they were withdrawn. He has suggested they were withdrawn—and again I hope I am not misquoting him but I think he implied at least, if he did not say it, that they were withdrawn by the National Federation of Building Trades Employers and the Federation of Civil Engineers, for the simple reason that we have a Conservative Government and they hoped that the Bill which is now at Report stage in another place will eventually become law. It may well do, although it will take time, but this was not a matter which concerned us. It would not have come to us at all had there been petitioners against the Bill. It was an unopposed Bill and an unopposed clause.

The powers asked for are fairly minimal and perhaps I may try to elaborate what the powers are as they exist at the moment: to do maintenance work anywhere within the county (which they do); to erect new buildings within what one might call the boundaries of the old City of Manchester (which they do) and the powers they seek are not in order to do work outside the area—that is within the county—but to tender for such work against any other contractor who wishes to apply. This we felt was not unfair, and we felt also that if it was thought to be unfair when the new Local Government Planning and Land Bill (No. 2) becomes law and the requisite orders are made, then at that time the Secretary of State will have terrific powers under Part III of that Bill even to close down the direct labour department if he so wishes. So there, too, is a full stop.

My Lords, we sit in a semi-judicial capacity; that is our function; and it was taking that view that we considered every possible aspect, including the Instruction that came when the Bill was before this House on Second Reading. We are of the opinion that if the Secretary of State, who was well represented before us during that long sitting, wishes to act at a later stage when the Bill now before the other place becomes law, of course there is no reason whatever why he should not do it.

But I am concerned about another aspect of this subject, nothing whatever to do with Manchester, and, although I say it, as to whether this minimal power is extended to Manchester or not does not concern me very much personally. If they are going to have to compete with tenders they will only get the job if their tender is worth while. But I am concerned, if I may be a little modest, about the constitutional issue. As noble Lords may be aware, I have had some experience in this field, as Chief Whip in another place for something like 15 years, Leader of the House for two years, Chairman of the Privileges Committee and so on. In another place, at least, if there is even an implied criticism of Mr. Speaker or of the Chairman of Ways and Means it is taken extremely seriously, as it would be in this House if there were any criticism of the noble and learned Lord the Lord Chancellor, or in this particular case implied criticism of the Lord Chairman of Committees. This is what really worries me, and I would appeal to noble Lords who may feel we were wrong, that we made a mistake, if there is a Division not to go into the Lobby against their own Lord Chairman.

12.2 p.m.

Lord HALE

My Lords, in view of the very powerful plea made, in spite of the fact that I had written promising to take part in this debate, and of the fact that I have torn up about eight or nine speeches in the course of the last fortnight without delivering any, I propose to scrap my speech entirely and to make a single observation which I do not think has been made. That is that the noble Lord, Lord Drumalbyn—who knows I have perfect respect for him and would not wish to put forward any discourteous or unfair arguments—started off by saying that the two powerful organisations who have been mentioned, who were going to object, did not in fact object because they thought that this Government would not pass this clause or possibly some other parts of the Bill. If he will forgive my saying it—he may be surprised if he goes to Hansard to check; I am always in difficulty because I hear with difficulty—I understood him to go on to say, "I have seen them since and they have told me" this, that and the other. I was tempted to intervene at the moment I heard it, and perhaps it would have been wiser in all the circumstances.

But surely, this really will not do. If we are acting in a semi-judicial capacity, as we are, then evidence cannot be given post facto and by proxy by a single Member speaking from the Back Benches of the House, as I do, exposing evidence that was not given and endeavouring to draw some additional motivating power from what he thinks they would have said or from what they have told him they would have said. That is not easy to criticise, and certainly it is not subject to either expert or inexpert cross-examination. So it seems to me, in the circumstances, that I have never before heard so overwhelming a case put in three such excellent speeches, clear, detailed and wholly unprovocative, and I would join in the appeal to the noble Lord to say, "In the circumstances, and in view of the arguments, I should like to withdraw this amendment".

12.5 p.m.

The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin)

My Lords, may I say, first of all, and very briefly, that I am not in a position to argue or join in the debate on the constitutional aspects. There are those far better qualified, not least my noble friend Lord Drumalbyn and others, than I to do that. I would only say on that point that, listening very carefully, as even more of a newcomer than the noble Lord, Lord Sefton, if the thesis is that the conclusions of a Select Committee thereby irrevocably bind your Lordships' House, if that is the case, then I make no other comment than that I am rather surprised. But clearly that is not for me to comment upon further at this moment.

My Lords, may I take, I hope literally, two minutes to state the Government's view on this clause? I can do it very quickly. Our attitude has already been made clear in my right honourable friend's report. We think Clause 164, formerly 196, of this Bill is both unnecessary and undesirable. Our argument is based on general principles and there is nothing in the particular circumstances of Greater Manchester which detracts in any way from the force of those principles. Indeed, although I do not want to get into a discussion of the details of Manchester's case, I think the difficulties facing the works department there, and described by its manager to the Select Committee (Minutes of Evidence, p.28, paras. 6, 7 and 8) point rather the other way and suggest that an extension of powers is particularly undesirable in Manchester.

What Manchester City Council are asking for is in essence a power to use their direct costs department as a general building contractor to all the other public bodies within the county. There is no doubt, as your Lordships' Select Committee concluded, that the Government's own legislation now being considered in another place offers a good prospect of ensuring that all works departments will in future have to achieve a reasonable standard of efficiency in any work they undertake. Nevertheless, that does not alter our fundamental objection to the clause.

The Government do not believe that it is in any way appropriate for a local authority to use its ratepayers' money—money raised by compulsory levy from, dare I say, unwilling contributors—as risk capital in commercial ventures outside its own boundaries, in competition with private enterprise. One wonders what Manchester imagine they are doing, going into this highly competitive business at a time when the market is hardly favourable to expansion, at a time when, from all we hear and know, Manchester have problems enough of their own already. The whole thing is wrong in principle and in practice, and we are convinced that Manchester should not have this power.

Finally, my Lords, Manchester do not, in our view, need any additional powers to help them perform any of their statutory functions. There is absolutely no evidence whatsoever to suggest that the private building industry in the Greater Mancheser area is not well enough developed to satisfy the needs of any of the authorities in the county for building services. There is thus no justification in terms of existing statutory obligations for the extension of powers this clause is seeking. I would hope, therefore, that your Lordships will feel able to support the amendment to leave out this clause, which my noble friend Lord Drumalbyn has so eloquently moved.

12.9 p.m.

Lord ELWYN-JONES

My Lords, I feel the House will be somewhat shocked by that. Here is a crucial constitutional question, and I am sorry the Leader of the House, who for good reasons has not been able to be here before, was not here to give us the sort of guidance that was given by the Leader of the House the Marquess of Salisbury on a not dissimilar situation. The Minister has now intervened in this situation on behalf of the Government, and the exercise that we are engaged upon becomes more transparent as the debate continues. Here is a Select Committee of three most distinguished Members of your Lordships' House. The Chairman of Committees, with his great experience, presided and two distinguished Privy Counsellors constituted the rest of the Committee. They heard the arguments that are now put forward by the Government and, in the circumstances of the whole case, they decided unanimously to reject it. That was on their part, as my noble friend Lord Aylestone, has said, a quasi-judicial decision. The Marquess of Salisbury, in a similar situation, made the comment: It seems to me it would knock a great hole in the whole system and that, of course is true. Secondly, there is this undermining of the authority of the Chairman of Committees, the undermining of the authority of a Select Committee itself.

It is very interesting, looking at the Hansard of the debate on the Kent Water Bill, to see the support that the proposition of the Marquess of Salisbury had on that occasion: the noble and learned Lord, the Lord Chancellor; the noble Lords, Lord Kilmuir, Lord Lansdowne, Lord Reading, Lord Alexander of Tunis, Lord De La Warr and Lord Jowitt—the most powerful support that could be conceived of in the consideration of a constitutional principle.

In the light of that and the clear guidance that has been given when the House has appointed a committee to give special consideration to a Bill of this type, unless there are new and special considerations which arise—and as far as I can understand none are suggested here because all these matters were canvassed before the Select Committee—I hope that when he gives thought to the matter the noble Lord, Lord Drumalbyn, with his considerable experience in parliamentary affairs, will think it decent to withdraw his amendment.

12.12 p.m.

Lord NUGENT of GUILDFORD

My Lords, before this debate reaches a conclusion I feel that, as the noble Lord, Lord Aylestone, has said a word as regards his position, it is necessary for me to say a word, not on the merits of the amendment or indeed the Bill, but of explanation of my personal position. That touches on the constitutional aspect which has also been mentioned. I confess to finding myself in some difficulty in considering the promoters' case on this particular clause in the light of the evidence given to us by the Department of the Environment representative, and I was conscious that my own personal conviction, politically, was in favour of the statement that was given to us. On the other hand, in the context of our function as a Select Committee dealing with an unopposed Bill—in other words, there was no petitition against this clause—I felt that the proper thing to do was, within the context of that Select Committee and despite my own personal reluctance, to agree to the promoters' clause.

However, the constitutional point of which I am conscious is that it is not for Select Committees to take the ultimate decision on these matters; it is for this House to take a decision where a major political issue is concerned. That, in my judgment, is what we are concerned with here. I felt that that was not an issue which should influence me to go against my colleagues in our deliberations on the Select Committee, but I feel that today, the House sitting as a House and having received the report, is in a position, if it so wishes, to take a decision on the major political issue which is concerned and on which we were so advised by the Department of the Environment.

I entirely take the point made by the noble and learned Lord opposite and by the noble Lord, Lord Wallace of Coslany. It is most unusual to go against the report of a Select Committee, but I am just making my position clear, as a member of that Select Committee, as to why I took the responsibility of agreeing to the report and why I feel myself free to take whatever decision I think is right to today.

The CHAIRMAN of COMMITTEES (Lord Aberdare)

My Lords, I think that at the end of this debate I should just say a few words. I do not wish to enter into the merits of the case. The arguments on both sides have been heard adequately this morning and I do not think that it is up to me to enter into that matter. But I should like to echo what has been said by my two colleagues on the Select Committee as regards the way in which we proceeded. This was an unopposed Bill and therefore there were no peti tioners. We heard counsel for the promoters, we heard evidence from the promoters and we heard the representative of the Secretary of State for the Environment. We did not find this an easy decision to make. We took a great deal of time and had a long discussion of the issues involved before we made the decision. But we were guided, as the noble Lord, Lord Aylestone, has correctly said, by the normal principles of Private Bill procedure and we judged the issue on whether or not the promoters had justified the need for this particular provision. As your Lordships know, we took the view that they had done so.

Of course, the nub of the matter—and this is the point of major concern on ail sides—is the question of competing with the private sector and whether we were extending the powers of the direct works organisation of Manchester City Council too far. There were two matters that influenced us in that regard. The first, which has already been referred to, is the fact that the two petitioners—the National Federation of Building Trades Employers and the Federation of Civil Engineering Contractors—had withdrawn their petitions. I must say that I was astonished to hear the noble Lord, Lord Drumalbyn, give us the reason for that withdrawal of their petitions, because that certainly was not brought out to us on the committee. We could only assume that they had withdrawn their petitions because they no longer objected to what was being proposed in the Bill.

The second factor which influenced us was the fact that in the Local Government, Planning and Land (No. 2) Bill, which is now before Parliament, there are specific powers for the controlling of direct labour organisations in order to ensure fair competition with the private sector. It was our view, as we expressed it in our report to the House, that these controls, when enacted, would ensure that competition was not unfair.

I shall say only a very few words on the constitutional position as I understand it. If the noble Lord, Lord Drumalbyn, with the full support, evidently, of the Government, wishes to overturn the Committee's decision, then he is certainly entitled to seek to do so by this amendment at Third Reading. However, I must point out that to reverse the decision of a Select Committee on a clause in a Private Bill is without precedent. The noble Lord, Lord Wallace of Coslany, quoted the noble Marquess, Lord Salisbury, in 1955. I would only quote one of my predecessors, the noble Earl, Lord Onslow who correctly stated in 1933 the position as I understand that it is now. He said: I do not think there has been a Bill rejected, or substantially amended, on Third Reading after its consideration by a Select Committee. But of course it is open to the House, if it wishes, to do so.

12.20 p.m.

Lord DENHAM

My Lords, if I may intervene at this point, it does seem that your Lordships have expressed very strong views on this—perhaps stronger than could have been foreseen. I think, it I may suggest it, that, in view of the things that have been said, it would be useful if we could have a look at those on paper and without a great deal of hurry behind it. If I may suggest it to my noble friend, perhaps we could adjourn the discussion on his amendment—

Several noble Lords: No.

Lord DENHAM

—and give it further thought outside. If your Lordships prefer to do it now in the Division Lobby perhaps that would be—

Lord ELWYN-JONES

My Lords, we have had a debate for an hour and 20 minutes on this matter. The issues have been fully canvassed. What purpose is served by an adjournment? Of course it is a matter entirely for your Lordships, but I should have thought that enough has been said to call for a decision by the House.

Lord DRUMALBYN

My Lords, I need say very little. I think it would be wrong for me to withdraw my Motion. The fact that this is without precedent is

only one factor that has to be taken into consideration. I think the views have been fairly strongly expressed, and my noble friend Lord Aberdare, as Chairman of Committees, has confirmed that the House could, if it wished, overrule the Select Committee. That is not in any way derogatory to the Select Committee; not in the slightest. We are an assembly which is literally a confrontation assembly, and if different views persist when it comes to the House, it must be the House that has the last word here.

I need not go over any of the arguments again, but I should like to say once again that when a new clause giving totally unprecedented powers comes before us, this really goes beyond the competence of a Select Committee. The Select Committee has guidance; it has reached its view and its recommendation, but to say that in all circumstances the view of the Committee must prevail whatever the merits of the case seems to me to go against our parliamentary constitution here.

Matters are remitted to the Select Committee and the Select Committee report back and make their recommendation. I cannot see how, under our constitution, it can be held that the House is in any way bound to accept their recommendation any more than it invariably accepts recommendations in this House and any other from its Committees. If it is the wish of the House that we should go to a Division—and my noble friend the Chief Whip has suggested that we might first consider it further, but he withdrew that—I think that the only thing we can do is to test the opinion of the House. Therefore, I beg to move.

12.25 p.m.

On Question, Whether the said amendment shall be agreed to?

Their Lordships divided: Contents, 40; Not-Contents; 72.

CONTENTS
Airey of Abingdon, B. Elton, L. Ironside, L.
Bellwin, L. Faithfull, B. Kinnaird, L.
Bessborough, E. Ferrers, E. Long, V.
Cockfield, L. Gowrie, E. Lyell, L.
Cullen of Ashbourne, L. Grimthorpe, L. Mancroft, L.
Denham, L. Hailsham of Saint Marylebone, L. (L. Chancellor.) Marley, L.
Drumalbyn, L. [Teller.] Merrivale, L.
Effingham, E. Holderness, L. Monson, L.
Ellenborough, L. Hornsby-Smith, B. Morris, L.
Mountgarret, V. Sandford, L. Swinfen, L.
Mewbray and Stourton, L. Sandys, L. Trefgarne, L.
Mugent of Guildford, L. Soames, L. (L. President.) Trumpington, B.
Renton, L. Spens, L. Vaux of Harrowden, L.
Ridley, V. Stanley of Alderley, L. [Teller.]
NOT-CONTENTS
Abinger, L. Fisher of Rednal, B. Milverton, L.
Ampthill, L. Fraser of Kilmorack, L. Oram, L.
Amulree, L. Gainford, L. Peart, L.
Ardwick, L. Gaitskell, B. Phillips, B.
Auckland, L. Gordon-Walker, L. Ponsonby of Shulbrede, L.[Teller.]
Aylestone, L. Goronwy-Roberts, L.
Banks, L. Hale, L. Porritt, L.
Beaumont of Whitley, L. Hanworth, V. Redmayne, L.
Beswick, L. Hatch of Lusby, L. Richardson, L.
Birk, B. Henderson, L. Robbins, L.
Boothby, L. Heycock, L. Rochester, L.
Boston of Faversham, L. Hood, V. Romney, E.
Brock, L. Houghton of Sowerby, L. Ross of Marnock, L.
Brockway, L. Ilchester, E. Sainsbury, L.
Brooks of Tremorfa, L. Irving of Dartford, L. Sefton of Garston, L.
Bruce of Donington, L. Janner, L. Segal, L.
Caccia, L. Jeger, B. Shannon, E.
Clancarty, E. Kaldor, L. Stamp, L.
Collison, L. Kennet, L. Strabolgi, L.
David, B. [Teller.] Kinnoull, E. Swansea, L.
Davidson, V. Listowel, E. Underhill, L.
Davies of Leek, L. Llewelyn-Davies of Hastoe, B. Vivian, L.
Denington, B. McCarthy, L. Wallace of Coslany, L.
Elwyn-Jones, L. Macleod of Borve, B. Wynne-Jones, L.
Evans of Clauehton, L.

On Question, amendment agreed to.

Bill passed, and sent to the Commons.

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