HL Deb 06 November 1980 vol 414 cc1051-139

2.57 p.m.

Bill read 3a, with the amendments.

Clause 1 [Relaxation of Ministerial control of authorities]:

Baroness STEDMAN moved Amendment No. 1: Page 2, line 5, at end insert ("or police authority").

The noble Baroness said: My Lords, I should like, if I may, to speak to Amendments Nos. 1, 2, 52 and 65, which may help to shorten the proceedings. The controls for which the relaxations are sought by these amendments are over the appointments of the chief, the deputy chief and the assistant chief constables and the provision and maintenance of the buildings, structures and premises which are part of the day-to-day running service of the police.

The police authority, as Members will know, is required to secure the maintenance of an adequate and efficient police force, properly housed and equipped. The chief constable has his force placed explicitly under his control and direction. He has the powers of appointment, discipline and promotion up to the rank of chief superintendent. The Home Secretary has the duty to promote the efficiency of the police, both generally and through the provision of common police services. The result of these provisions, as embodied in the Police Act 1964, is that the control is in effect a threefold partnership between the Home Secretary, the police authority and the chief constable.

The local authority associations submitted a joint paper on the review of central Government control over local authorities in February 1979 in which they urged that as much as possible of the management of the local services should be left to the local authorities—that includes the police authorities—while the Government concentrated first on maintaining only that influence on the aggregate of local authorities' expenditure which is necessary for the macroeconomic control and, secondly, on the involvement of the broad national strategies within which local authorities and other bodies have the responsibility for operating.

The amendments fall into the two main classes. First, so far as the repeal of the relevant parts of Section 426(1) and Section 64 of the Police Act are concerned, we are concerned with the control over the appointments involved. Such controls are very difficult to justify in the light of the freedom which local authorities have to appoint, for example, their chief executives. The exercise of these controls by the Home Office has been known to create some local difficulties. It seems to some that the Home Office is becoming increasingly interested in being involved in the whole selection procedure in a way that perhaps goes beyond its proper remit.

On the other amendment, surely the appointment of the chief police officers is an essential part of the exercise of a police authority's statutory duty, and on the second area, on providing and maintaining buildings and premises, the noble Lord, Lord Belstead, at the last stage of this Bill announced that there were to be proposals for some relaxation of detailed project control on schemes costing up to £1 million. This is welcomed but it still leaves statutory powers of control outstanding. What we should like to know, if the noble Lord can tell us, is whether this concession which he announced at the last stage relaxes controls on other than financial grounds, and would it not also be consistent for the Home Office to relax controls on land acquisition and on property leases? These seem to us to go hand in hand with the dispensation announced at Committee stage. I beg to move.


My Lords, having spoken on similar amendments at a previous stage, I should like to say a few words. Whereas I support the latter part of the speech just made by the noble Baroness, dealing with property and maintenance and the amount of work which is still going to be put on local authorities in order to follow this new so-called relaxed procedure, I am not happy about the abolition of the Home Office control over the most senior appointments. In this country of ours we are lucky to be very free of corruption, but on the other hand there is always a chance that a local favourite before a selection committee gets priority because the local people just do not know the whole field. It is right and proper that in the interests of the police service the Home Office should retain that control. The police are all too anxious to see the ghost of the old watch committees arising amid this question of local freedom to make all appointments, and that would be disastrous.

Viscount RIDLEY

My Lords, before my noble friend replies I should like to add a word in support of what my noble friend Lord Inglewood has said. I moved these amendments almost word for word at Committee stage—which seems now to be a very long time ago—and I was "shot down" by the Committee on the appointment of chief constables. I think rightly so; I accept that decision of Parliament. But where we can relax the control over the buildings and minute details of buildings it really will be in the interests of good government. If these amendments are not acceptable, I hope that at least the principle will be acceptable to the House.


My Lords, I am grateful to my noble friends for their comments as regards the appointment of chief constables. In fact we have covered this ground before and I thought that your Lordships were content. Let us be quite clear that we are not here talking about the removal of some central controls over local authorities. The noble Baroness, Lady Stedman, seeks some relaxation of the controls over police authorities exercised by the Home Secretary. But police authorities are not local authorities; they are independent statutory bodies composed of two-thirds county councillors and one-third magistrates. Police authorities are dependent on the county council or, in the case of combined police authorities, the constituent councils for funding police expenditure. However, 50 per cent. of expenditure on the police is paid by central Government through a specific grant.

The effect of these amendments would not be simply to relax some central controls over police authorities; they would undermine the constitutional arrangements for the administration of the police as embodied in the Police Act 1964 which followed on the report of the Royal Commission in 1962. At Committee stage my noble friend Lord Belstead reminded the House that the Royal Commission set out the responsibilities on the three elements on which our policing arrangements are based, namely, chief constables, police authorities and the Home Secretary.

First, the Act places each force under the direction and control of the chief constable and in this way his operation of independence is clearly set out. I am grateful to my noble friend Lord Inglewood, who emphasised the importance which he attaches to this, as indeed did my noble friend Lord Ridley, and I suspect that the noble Baroness herself would not quarrel too much with that.

Secondly, the chief constable is appointed and his force is maintained by the police authority and it is to this authority that the chief constable is generally accountable. Thirdly, the Home Secretary has an essentially supervisory role summed up in his general duty to exercise his powers to promote the efficiency of the police.

Without going into a great deal of detail here, I should like to say generally that as my noble friend Lord Belstead said in Committee, the Home Secretary's role reflects his responsibility for the maintenance of the Queen's peace, which is one of the prime functions of central Government. This ultimately is the duty of the Home Secretary and therefore we think it essential that he should have, and should exercise, adequate powers to secure the efficiency of the police service.

The powers to approve the appointment of chief constables, deputy chief constables and assistant chief constables come within this category, as does the power to approve a deputy chief constable performing the duties of his chief officer for longer than three months, as do the powers to approve the number of police officers in a force and to approve the provision of buildings. These are only some of the many responsibilities placed on the Home Secretary by the Police Act, but the individual provisions cannot be divorced from the wider considerations of law and order.

I think that Parliament expects the Home Secretary, with the professional advice of Her Majesty's inspectors of constabulary, to be able to ensure that officers of the right calibre are appointed. Similarly a determination of the number and rank of officers needed in each force is crucial to the efficient policing of this country; and again Parliament expects the Home Secretary to be in a position, with the professional advice of the inspectorate, to influence these decisions.

This was a matter which we talked over at some length. In fact, when I was in another incarnation, so to speak, I argued the same case exactly from the opposite side, but I accepted for myself then that there was here a circumstance which did not come within the general category of the relaxation of controls.

I think here are factors which are very special, and I hope the noble Baroness will not want to press this point. As was said in Committee, there are sufficient arguments here to justify not relaxing this particular control, the relaxation of which I think would cause much concern to everyone in your Lordships' House. In these circumstances, perhaps the noble Baroness will feel able not to press at least this amendment.

Baroness STEDMAN

My Lords, I do not intend to press the amendment, but having read through the debates in the Committee stage, and reinforced by the comment of the noble Lord, Lord Inglewood, this afternoon, on the fact that we ought to keep the appointment of the chief constable in the hands of the Home Office, or under very strict supervision from the Home Office, because of corruption, I fail to see why a chief constable is any more likely to be corrupted than, say, a county planning officer, who is appointed by the county council.

However, I think this matter has had a very good airing. I had hoped that the noble Lord might be a little more forthcoming about the other relaxations on buildings and land, in view of the support I was given from his side of the House. Perhaps he would be willing to take that point back and look at it again with his colleagues in the Home Office. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Clause 4 [Power to direct other bodies to publish information]:

Lord BELLWIN moved Amendment No. 3: Page 7, line 4, leave out from ("the") to end of line 9 and insert ("descriptions of bodies mentioned in subsection (4)(e) and (g) above, in the application of those paragraphs to England; and

  1. (b) to the London Transport Executive,").

The noble Lord said: My Lords, this amendment is needed to correct an error which was made in Committee stage, without which the powers concerned would be conferred on the Minister of Transport in both England and Wales, and this would not reflect the present division of responsibilities for transport matters between the Minister of Transport and the Secretary of State for Wales. I beg to move.

On Question, amendment agreed to.

Clause 5 [Meaning of "works contract"]:

3.10 p.m.

Lord BRUCE of DONINGTON moved Amendment No. 4: Leave out Clause 5.

The noble Lord said: My Lords, it would perhaps be for the convenience of the House if I ask leave to deal with Amendments Nos. 4, 5, 6, 7, 10, 11, 12, 13, 14, 15, 16, 17, 19, 20, 22, 23, 24, 25 and 26 together. The reason I ask leave to take this course is, of course, that it is the only technical way in which I can draw the attention of the House to the disapproval of Part III of the Bill as a whole, of those who sit on this side of the House.

I do not intend to reiterate any of the detailed arguments that I was able to adduce to your Lordships at Committee and Report stages of the Bill. What I do want to say is that this part of the Bill could have been cast in a very different way from that in which it has been laid before your Lordships. It is a tremendously complex part full of accounting and technical details, and in order to turn it into a really workable form one would have had to rewrite the whole of Part III.

The first point that one notes about Part III, which deals with direct labour organisations, is that nowhere in the Bill is a direct labour organisation defined. This must be held to be a little remarkable, because if we turn to Clause 20 we find plenty of definitions, including that of an "appointed day", "construction or maintenance work", a definition of "development body", of a "DLO revenue account", of "functional work", Yea, even, my Lords, a definition of a "local authority". But nowhere in the Bill, as indeed my noble friend Lady Fisher of Rednal pointed out at Report stage, is there a direct labour organisation defined.

Your Lordships are aware that I am not a lawyer, but I am given to understand on reliable authority that an absence of definition can very often lead to difficulties. It is all very well to say, "Of course, everybody knows what a direct labour organisation is; there is no need to define it", but we have many immortal cases in the Queen's Bench Division of the High Court where one of the learned judges in the past has said, "What is a motor car?". These things are not unusual. I do not know whether the noble Lord when he comes to reply can provide some kind of rough and ready definition, but your Lordships may feel that, if you are going to devote a whole part of the Bill to direct labour organisations, what constitutes a direct labour organisation ought to be capable of reduction into the Queen's English; if it is something that is capable of definition and also of legal entity, then it should be possible to reduce it into words. I sincerely hope the noble Lord will be able to give that some thought.

Putting that aside, it was only when I came across, quite accidentally, the detailed report of the working party on direct labour organisations—its final report, which, unfortunately, was not in my possession either before Committee stage or Report stage—that I realised the real shortcomings of Part III of the Bill. This working party sat—if sitting be the correct word, because I presume it did a certain amount of travelling as well—for some 18 months. It commenced its sittings, I am informed, in October 1976 and the final report was put out in August 1978 by the noble Lord's own department. Modestly it has not claimed ownership of it or responsibility for it, and indeed, again somewhat modestly, the noble Lord did not refer to its contents in any very great detail when he was introducing this part of the Bill to your Lordships.

On going through it in detail, I am bound to say that I understand why. Here is a very responsible working party; its chairmen were provided by the Department of the Environment itself; it had numerous members. I will not weary your Lordships with all the names; it would take far too long; but they comprise responsible representatives from the Association of Municipal Authorities, the Association of District Councils, the Property Services Agency, the Association of County Councils, members from the noble Lord's District Auditors Department, and indeed members of quite a number of prominent local authorities themselves. It took evidence from a very wide section of those who might be considered as being legitimately interested in the whole question of direct labour organisations. It took written evidence from the Federation of Specialists and Subcontractors, from the Federation of Civil Engineering Contractors, from the Institute of Municipal Building Management, from the National Federation of Building Trades Employers, from the Royal Institution of Chartered Surveyors and from the TUC. So it cannot be said that it was in any way unrepresentative.

In the event it produced a very moderate report. It was a moderate report, I would assume, because those who were members of it arrived at a consensus of the most practical things to be done to improve the organisation of direct labour organisations, to tighten up their tendering procedures, to make them more comparable with those with whom they were alleged sometimes to be in competition. As I say, if the whole spirit of Part III of the Bill had followed out the very sensible recommendations of the working party, there would have been very little to divide the House about on its context.

Incidentally, your Lordships may be interested to learn that one matter that was revealed in the report was the fact that, as regards the GLC, when discussing its figures for the year 1975–1976, the figures supplied by the treasurer showed that it would have cost the GLC an additional £8 million per annum if its housing maintenance work, then done by direct labour, had been placed with term contractors at the lowest tender rate. That may be a fact which is not generally known as there is the broad, general, political allegation that DLOs were in some respects wasteful; they were responsible for the waste of public funds; they resulted in the waste of ratepayers' money and, indeed, perpetrated all other kinds of cardinal, financial and organisational sins. It is, therefore, very interesting that in the case of the largest authority in the United Kingdom—and this was not challenged in any way by the working party and indeed was accepted by it—there was a saving of £8 million.

Looking at paragraph 3.1 of the report we see that the committee revealed its opinion and said: In our view it is not surprising that all but 10 of the 549 local authorities in the United Kingdom have found it beneficial to have a construction workforce of some size or another, directly under their own control". Perhaps if extensive quotations had been made from this document, the attitude in some quarters of the House towards DLOs might have been considerably different. I can only speculate as to what happened when the final report of this working party came into the hands of the noble Lord's right honourable friend the Minister. I would assume that he read it. I would assume that he assimilated it. But, of course, it is the business of a Minister to make decisions. Quite clearly Ministers are not bound to adopt recommendations of working parties. They are free agents within the confines that are imposed upon them by their own colleagues in the Cabinet. They are free to make their own decisions. But certainly a decision in principle must have been made.

The Minister had two alternatives. If he wanted to produce a Bill or a part of a Bill covering this aspect of a local authority's work he could have decided to proceed on the broad, general lines laid down in the working party's final report—the general lines of consensus politics. He could have said to himself, "Well, perhaps there are a number of pet things that I would like to do myself but, by and large, since I am the Minister for the Environment and since I do wish to maintain the friendliest relationships with local authorities and desire to work harmoniously with them, I shall proceed on the basis of consensus and seek maximum agreement".

His alternative was to proceed with the policies of confrontation. We on this side of the House complain, so far as this part of the Bill is concerned, that the right honourable gentleman Mr. Heseltine decided to proceed on the policies of confrontation. This part of the Bill not only represents a direct challenge to the responsibility of local authorities, it does not only de-rate the degree of community between councillors and the electorate itself, but it endeavours to pursue the diktat. One finds in the 19 clauses comprising this part of the Bill that on no fewer than seven occasions does the Minister take power to issue regulations; on four occasions he takes power to make orders and on five occasions he takes direct power to give directions without any consultation with anybody at all. But nowhere is the desire to confront local authorities more obvious than when it comes to the Minister's power taken in this part of the Bill to direct that a local authority shall produce a report, and to direct at any time. In this part of the Bill he gives directions that in certain defined circumstances the authority shall cease direct labour operations either as a whole or, indeed, in whichever particular subdivision of its work may fall below the prescribed rate of return on capital which he from time to time—and which he alone—prescribes.

Nothing is in greater contrast with that than the very sensible observations brought out in the working party's report. I refer to Appendix K, paragraph 13, which does, to some extent, paraphrase the earlier and more detailed paragraph 9.6 of the report itself. It says: …any new legislation governing DLOs should provide for the application of profits and the defrayment of losses made by a DLO, and should impose a requirement on the parent authority that its DLO should not make an overall loss taking one year with another over a 5 year period". It then says, and these are the important words: Where this requirement is not met … the position should be specially reported to the elected members who would be required to conduct a comprehensive review of the DLO to determine whether it should continue to operate, and if so, whether its activities should be limited in any way; and to publish the results of the review". That particular finding of the working party may strike your Lordships as being eminently reasonable. It is quite clear that this working party—comprising members of the Department of the Environment as well as all the other authorities involved and those from whom it took evidence—took the view that DLOs should be responsible and should be required to work profitably, or at any rate without loss over a defined period, and that if that does not happen then there should be a detailed report to the elected members and the whole matter should be made public.

That strikes me as being an eminently reasonable proposal which does not in any way violate, but even enhances, the status of the local authority as an elected body, and leaves the locally-elected body to determine just what shall happen with its own direct labour organisation. That is in sharp contrast to the provisions of the Bill that has been inflicted upon us. There the Minister expresses himself in peremptory terms—after one year he can do this and after the one year he can direct the other. The whole essence of the matter is the establishment of the Marsham Street diktat over the discretion of the local authority. Nor is that all. From time to time during the passage of this Bill through your Lordships' House, especially in Committee, we have suggested to your Lordships certain amendments to Part III of the existing Bill, imperfect though Part III was in its total concept. Our object was to improve it, with all its structural defects and with all the defects that lie behind the purpose of its introduction.

Noble Lords will remember that amendments were introduced on this side of the House permitting DLOs to work outside their boundaries. We pointed out to the House particular circumstances where, owing to winding roads which would cross and in some cases recross individual local authority boundaries, it was obviously a matter of common sense that the DLO should have power—subject to the agreement of the other local authorities—to work in a sensible and practicable fashion. But that was refused us.

However, the working party report said: DLOs should be permitted to work outside their parent local authority boundaries for other local and public authorities as well as inside them on both new and repair and maintenance work; be able to second staff from one authority to another (as already happens between some authorities) and that the financial and accounting rules when they do so should be clearly stated".

Then there was a paragraph in the report of the working party which went even further; indeed, further than was suggested by some quarters on this side of the House. In paragraph 11, we find: Consideration should be given to extending the scope of powers available to DLOs to include work for private house-owners in certain circumstances, viz., where the dwelling is either a former council … or is one in the various areas of special treatment prescribed in the various Housing Acts.…". et cetera. But there is no mention of these in the Bill.

Your Lordships will also remember that we on this side of the House introduced amendments concerning the provision of emergency services and also the accounting treatment of them. But these also were rejected by the noble Lord; whereas the working party report at paragraph 18 of Appendix K says: DLOs may also be required, because of their authority's statutory obligations, to provide emergency services at short notice. If this disrupts ongoing work and gives rise to measurable extra costs, it should be identified and charged to the cost of the emergency rather than the work in hand".

Then there were pleas from this side of the House that some account should be taken of the work performed by direct labour organisations, with the full authority of the directly elected council, to do certain works on social grounds. These were refused us; whereas the working party report says: Costs arising from decisions taken on social grounds, e.g. the employment of extra trainees as a contribution to employment for school leavers, should be identified and charged not to the DLO but to the central funds of the authority". There are many others. One cannot help but contrast the whole Government attitude as expressed in the strident terms of Part III of the Bill, with the eminently reasonable attitude that has been taken by the working party. Let there be no doubt that we, on this side of the House, welcome the fact that there should be better organisation in direct labour organisations; we welcome improved accounting systems; and we welcome cost accountability. All matters of that kind are welcome, with the proviso that in the first instance the prime people interested in these are the local authorities themselves; they are directly elected bodies; they are the people who are closest to those in the local authority area who derive benefit from or, in fact, use the services. It should be in their hands to determine their rules.

Therefore, on this side of the House we resent the endeavour by the Secretary of State to seek to enforce his will on local authorities rather than pursuing more moderate and consensus policies advocated in the working party report on direct labour organisations, and following the lines of open, friendly co-operation with local authorities, to the detriment of the status of neither. I beg to move.


My Lords, I should like to ask my noble friend the Deputy Leader of the House whether it is in order to make a long Second Reading speech on what is ostensibly an amendment on Third Reading. Whether or not it is in order, it is undoubtedly against the traditions of the House. I think that it is treating the House with contempt and that it is quite monstrous.

Viscount SIMON

My Lords, I do not intend to speak on that point, so perhaps we should hear what the noble Earl the Deputy Leader of the House has to say first.


My Lords, my noble friend puts me in a slight spot if he asks me to give a ruling on a speech which another noble Lord has made. Indeed, I should find it very difficult to do so. Of course, your Lordships are masters of your own procedure, and we must do what we think is right in the House.

There is a problem here and I am bound to say so. I realise that the noble Lord feels very strongly about this. The problem arises when a number of "Leave out" clauses are tabled at the Third Reading of the Bill. I would only address such remarks as I make to that principle. Of course, one can only be guided by Standing Orders over this. If one looks at the Companion to the Standing Orders one sees that with regard to the Report stage it says: An amendment to leave out a Clause or a Schedule is not desirable on Report if the purpose underlying the amendment is to initiate a general debate". Presumably such a stricture also refers to Third Reading. In so far as the amendments of the noble Lord, Lord Bruce, have in fact initiated a general debate I think that one might question whether this was the right procedure. If one looks at what the Companion to the Standing Orders says with regard to Third Reading, one sees that it says: It is considered undesirable that an issue which has been fully debated and decided upon a previous stage of a Bill should be re-opened on Third Reading". I would do no more than draw that to the attention of your Lordships' House. One is in a danger because the current trend over the past few years has been to make the Third Reading an extension of the Committee stage and the Report stage, and in so far as that is a trend your Lordships may think that it is an undesirable trend. But one, of course, works within the Companion to the Standing Orders.


My Lords, I would not be a party to defending anybody in your Lordships' House who opposed Standing Orders. I know that it is a matter for the House to decide. I would not defend my noble friend on this side of the House if I thought that he was wrong. But I do not think—and I believe the noble Earl the Deputy Leader has confirmed this—that he has offended the rules of the House. Something may not be desirable as a general rule, but it may be highly desirable in certain instances.

As the noble Earl knows, we feel very strongly about this Bill, as strongly as other noble Lords feel in favour of it. Noble Lords opposite have got down 34 amendments today at Third Reading. Among other things—I cannot count them—I understood there were 74 amendments. When I counted I found that we on this side are responsible for 40 and I think noble Lords opposite are responsible for 34. I think the noble Lord probably accepts my figure.

When speaking just now, I understand that my noble friend was speaking to something like 18 amendments. I accept that it is undesirable for certain things to happen at Third Reading, but if my noble friend has got down an amendment which has already been before your Lordships' House and has been decided upon, I do not think I shall have any difficulty in persuading him not to pursue it. But if there is such an amendment I am sure it is not more than one; or perhaps there are two. We ought to bear in mind that we are dealing with a Bill of some importance and that feelings are very strong on both sides of your Lordships' House. On reflection, while we want to deal with this matter as expeditiously as possible, I do not think it would be right to say that my noble friend is offending in any way. As I said at the beginning, what may be desirable as a general rule may not be desirable on certain occasions. In view of the importance and far-reaching effects of this Bill, this is one of the occasions when it should be discussed quite fully, but I am sure my noble friend will take into account what the noble Earl has said.

Lord HOME of the HIRSEL

My Lords, I think there is a point of some substance here and I wonder whether it would be a good thing if the Procedure Committee had a look at this once more and gave us some guidance. It might be a practical suggestion.


My Lords, I do not like this kind of debate at all. In the past I have not been used to Third Reading debates which deal with a large number of amendments; it does not happen in another place, but it does happen here. In its nature, a Third Reading debate is fairly general so it stands to reason that debates on amendments on Third Reading are likely to be fairly general as well; so I do not think that the complaint was terribly well founded. But the thing I really do not like about this kind of complaint is that it arose at the end of my noble friend's speech, which I found an extremely interesting one. If it turns out that my noble friend or any other Member of the House is in breach of the Standing Orders or any of the customs of the House, surely the time to challenge him is when he is in breach. He should be interrupted then and not at the end of his speech. To wait until the end of the speech and then raise the matter is really to trail a red herring across procedure and to utilise a kind of device. And I think utilising the device is as offensive to the House as the matter of the complaint might have been if the complaint were justified.


My Lords, I should like to say one word and I shall not prolong this debate. I find it unsatisfactory that any noble Lord should attempt to rule the House by insinuation, as the noble Lord opposite has attempted to do.

Several noble Lords



Yes, my Lords; I stand by that word. To stand up at the end of Lord Bruce's remarks and make reference to them as being undesirable in some way, as if that were to be the same thing as impermissible, is really not to direct the House in the proper way that it should be going. If, indeed, anything that the noble Lord, Lord Bruce, had done was impermissible under the Standing Orders, then the proper moment to have raised it was right at the beginning of the debate; or, if I may say so, it could have been done through the usual channels when the noble Lord's amendments first appeared on the Order Paper. If there was anything improper in putting down a large number of amendments, as the noble Lord has done, to leave out certain clauses, then that could have been taken up through the Opposition Whips and perhaps, if it was contrary to the procedure of the House, the noble Lord would have seen fit to withdraw them.

But the noble Lord himself has pointed out that things have changed in the last few years, that the procedures on Third Reading, which are so foreign to those of us like the noble Lord, Lord Howie, and myself who come from another place, where at Third Reading one can only stick rigidly to what is in the Bill and not what one would have liked to see in it if one had had one's way at Committee and on Report, are entirely different. They are clearly evolving, as the noble Lord himself underlined when he said that the practice had grown up in recent years of developing certain themes on Third Reading. If the noble Lord, Lord Bruce, has simply continued a practice which the Government consider to be undesirable then they have their remedy through taking it up with the Procedure Committee. But I hope they will not come along during the Third Reading and attempt, as I say, by insinuation to silence noble Lords opposite from doing what they consider to be perfectly proper.


My Lords, I wonder whether I can say just one other thing? I know that noble Lords feel very strongly about this but I think the noble Lord, Lord Avebury, is being less than fair if he says that any one of your Lordships is trying to rule by insinuation. I do not think my noble friend has sought to do that, nor do I think that any other Member of your Lordships' House would do so. The noble Lord, Lord Howie, said this was utilising a device. Again, on reflection I think that is a fairly strong description. I think that what was happening was that my noble friend was airing a view, which some people would have, that it is not the normally accepted procedure to list as a matter for Third Reading a whole series of clauses which should be left out. The principal purposes of amendments at Third Reading are to clear uncertainties or to get clarification on various issues which have been raised earlier, or for the Government to fulfil undertakings. That has been generally accepted to be the purpose of Third Reading amendments.

I agree with the noble Lord, Lord Avebury, that things change. Noble Lords will have noticed that this particular procedure on Third Reading has changed, but I should like to suggest that possibly the Lord Chairman, who at the moment is on the Woolsack, might take into account the words of my noble friend Lord Home. I think this is a matter which could be and properly should be considered by the Procedure Committee, as opposed to continuing any further at this moment. It would be a pity if any noble Lords were to feel that an intervention either soured Lord Bruce's speech or cut across the trend of his argument. We could go from here quite happily after that intervention because I think that my noble friend Lord Derwent was only trying to express a matter of concern.

Viscount SIMON

My Lords, I should like to make a small point on the amend- ment, which rightly or wrongly has been moved and is before the House. I want to ask the noble Lord, Lord Bellwin, to say when he comes to reply whether he has considered one point that has been worrying me. As the noble Lord, Lord Bruce, has said, there is no definition of a direct labour organisation.

On an amendment which I proposed, Clause 20(3) was included in the Bill. This makes it clear that there are excluded from the direct labour organisation provisions work done by a local authority in its capacity as a dock or harbour undertaking. It seems to me that, if that is specifically excluded, it might be held that because other similar operations by local authorities, such as operating an airport or perhaps operating a transport undertaking, are not excluded the labour employed in those activities was also included under the heading of direct labour organisations. I wonder whether the noble Lord, Lord Bellwin, when he replies could give some indication of what he thinks about that.

3.50 p.m.


My Lords, I think my noble friend on the Front Bench mentioned the query that I raised in the House, that there is no definition of the words "direct labour organization". I read carefully the point that the noble Lord, Lord Bellwin, made in answer when I used the example of the city that I know best, which has the equivalent of three direct labour organisations all under the control of different committees of that council and different officers. I used the example, for Members of your Lordships' House who were not at that previous debate, where the council had a direct labour organisation for its public works department, another direct labour organisation for its housing department, and another for another department which I have forgotten. The noble Lord, Lord Bellwin, most likely will remind me of it. However, we have three. I was concerned whether all those departments would be one direct labour organisation under the Bill. When I read his reply I really was not satisfied. I did not know whether he really did not understand my question because I put it so badly, or whether there could be an answer this afternoon.


My Lords, may I say how nice of the noble Baroness to make her last point in the way she did. I think we need not weigh too much on this point of definition. The phrase "direct labour organisation" is not used in the text of the Bill. It is used in the Title, but it is not used in the text of the Bill except in the phrase "DLO revenue account", which is defined. Therefore, strictly speaking, there is no need for a definition as such.

In any case, the crucial point is surely the nature of the work done. If any employee of the council carried out construction or maintenance work his activities are subject to Part III irrespective of the title the council chooses to give to his department. I hope that that would perhaps satisfy certainly the noble Viscount, Lord Simon. I recognise that this is only part of the various points that the noble Lord, Lord Bruce, was making. It certainly was not the one on which I understood him to base the thrust of his whole argument.

Apart from the reference to the report of the working party, which I think the noble Lord said was brought out in I978—and I recall that working party sitting—the noble Lord today told us nothing new at all. He has made clear again his strong dislike of this part of the Bill, but that is nothing new, if I may say so. I really do not feel that he strengthens his case by referring to "Marsham Street diktat", and the Secretary of State forcing his will, and such phrases. What we have to do here is to look at one or two basics.

There has long been disquiet about the working of direct labour organisations, and there is no secret about that. The previous Labour Government themselves came out with proposals for more tendering; for separate DLO accounts on a trading basis; for a rate of return to be calculated on a current cost accounting basis, and so on. Indeed, the main basis for much of this section of the Bill comes in fact from the report produced as long ago as 1975 by the Chartered Institute of Public Finance and Accountancy on direct labour accounting. As I recall, it was that report which touched off the working party to which the noble Lord referred.

I am not going to go into much detail as to what that working party said. One would want to look at its composition. I seem to recall that it was made up in the main of officers; people certainly with much responsibility. But then one would have to see what their interest was is analysing the 1975 report. When we talk about the GLC making or losing if it places out work to the private sector, again I think we would want to look carefully at exactly what those figures were based upon.

I could make a long speech which would set out precisely why I disagree fundamentally with the noble Lord, Lord Bruce, on this issue. But at the end of the day I would come back to a few basic facts. The fact is that there is a need for more accountability; there is a need for competitive tendering. No one can really make a case contra to that. I have said on so many occasions now that I should not have to repeat it again, that there are efficient DLOs, and there is a place for them to do certain work. It should not be necessary for me to have to say this again but I do so because the noble Lord, Lord Bruce, has intimated, at least, that the Government are—I forget the phrase he used today; he has used a number of phrases in the past—clobbering DLOs, or whatever. It just is not that at all.

If it is clobbering them to want to see accounts published, then that is clobbering. If it is clobbering them to want to see tendering in competition with everybody else, then that is clobbering. If it is clobbering to want to see them have to produce separate accounts on the basis that we have said, then that is clobbering. However, I do not think it is that at all. It is simply an attempt once and for all, long overdue, to give the good, the efficient organisations the chance to show just how good they are. Those who are not are the only ones who need to be concerned. If what is in this Bill makes them, one way or another, become more efficient, look to their workings, look to what they can do more competitively, then it is jolly well overdue for this requirement to come about.

Therefore, it will not be a surprise to the noble Lord, Lord Bruce, that I do not accept what he says in these amendments at all. I think in fact that the majority of local government people welcome these provisions because they give a chance to those who are doing a good job to show to all and sundry that they do.

3.58 p.m.


My Lords, I am sorry that the noble Lord, Lord Derwent, is not in his place. It is perhaps the case that the noble Lord, Lord Home of the Hirsel, was unaware that I got into touch with the Minister's office earlier this afternoon in order to inform them that I had no intention of moving the individual amendments that are down in my name; that I proposed to speak to them all on the first amendment, and that for the convenience of the House I did not propose to move the remainder, or at least did not propose to divide the House upon them. I was advised on the proper authority of the only technical way of being able to express our disapproval of Part III of the Bill.

I sincerely hope that the House will therefore acquit me of any intention to be discourteous to the House, or indeed to the Government, or in any way to violate any of the principles upon which it has worked successfully for so many years. It will always be my objective to conform not only to the rules of the House but also to the spirit with which the House seeks to have them carried out.

In reply to what the noble Lord has said, I shall not keep the House long save to say that of course I willingly accept that it is desirable to have all the various accounting, disclosure, and division and cost control procedures dealt with in the Bill. The issue between us does not concern those at all, although in my view technically some parts of them are going to be difficult and tortuous to carry out. My complaint is solely of the power to direct the local authority and order it about. This is what I object to in this section. I beg to move.

On Question, amendment negatived.

[Amendments Nos. 6 and 7 not moved.]

4 p.m.

Lord HENLEY moved Amendment Nos. 8 and 9: Page 11, line 35, leave out from beginning to ("submitted") and insert ("the price of each offer") Page 11, line 37, leave out from ("above") to end of line 38.

The noble Lord said: My Lords, I am afraid my noble friend Lord Morris cannot be here this afternoon, and so I will speak to Amendments Nos. 8 and 9 on his behalf. My Lords, these are both very simple drafting amendments, purely designed to clarify Clause 9(8), with regard to exactly what can be disclosed, needs to be disclosed, by the local authority. The wording is the result of fairly extensive consultations with the department, and I hope that the result—I believe it will—will meet with the approval of the Government. I beg to move.


I am grateful to my noble friend Lord Henley. My noble friend Lord Morris, in moving his amendment to this subsection in Committee, gave notice that he would be considering the matter further and I agreed that the drafting would repay closer examination. It is, as my noble friend Lord Henley says, a matter of drafting, and no one in this House or in another place has ever challenged the substance of this provision. There is happy unanimity on what is required; the publication of tender competition results without the breach of any commercial confidentiality between authority and contractor. The present amendment appears to have the merit of simplicity and certainly shortens the clause, and I accept it willingly.

On Question, amendment agreed to.

Lord HENLEY moved Amendment No. 9: Page 11, line 37, leave out from ("above") to end of line 38.


My Lords, I have already spoken to this on Amendment No. 8. I beg to move.

On Question, amendment agreed to.

The DEPUTY SPEAKER (Lord Maybray-King)

My Lords, I take it that Amendments Nos. 10 to 17 are not now moved.

[Amendments Nos. 10 to 17 not moved.]

Clause 17 [Rates of return: Powers of Secretary of State]:

Lord BELLWIN moved Amendment No. 18: Page 17, line 23, leave out ("the").

The noble Lord said: My Lords, this is a purely technical amendment. The definite article here is intrusive and has survived by mistake from earlier amendments. By removing it it will be made clear that failure to earn the required rate of return in any three consecutive years will mean that a report has to be prepared for the council to consider. This is what everyone has always taken the clause to mean and the amendment will merely make the drafting coincide with that understanding. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 19 and 20 not moved.]

Clause 19 [Application to joint committees]:

Lord BRUCE of DONINGTON had given notice of his intention to move Amendment No. 21: Page 23, line 18, at end insert— ("Provided that no such order in respect of the accounting and financing provisions shall specify a date prior to 1st April 1982.").

The noble Lord said: My Lords, I believe Amendment No. 21 would be more appropriately discussed after a later clause, after Amendment No. 25. There is an error on the face of the amendment itself.

The DEPUTY SPEAKER (Lord Maybray-King)

My Lords, Amendment No. 21 should be No. 25A and we will take it after Amendment No. 25.

[Amendments Nos. 22 to 25 not moved.]

Clause 23 [Part III—supplementary]:

4.4 p.m.

Lord BRUCE of DONINGTON moved Amendment No. 25A: Page 23, line 18, at end insert— ("Provided that no such order in respect of the accounting and financing provisions shall specify a date prior to 1st April 1982.").

The noble Lord said: My Lords, I beg leave to move the amendment standing in my name. This seeks to ensure that the accounting and financing provisions shall not come into operation on 1st April 1981 but on 1st April 1982. I hope that the noble Lord, Lord Bellwin, will accept it from me that there is nothing at all perverse in the moving of this amendment. I am not in any way trying to wreck or postpone the Bill. It is simply that there are practical implications involved. I have already drawn your Lordships' attention to the fact that there are some minor instances in which regulations can be issued, some four occasions where orders are going to be issued and some five instances where directions can be made. In addition, on the Committee stage of the Bill the Minister himself stated that after the passage of this Bill he would continue to listen to any further arguments the local authorities want to put on timing and We shall see how things go, but we shall need a good deal of hard evidence if we are to move away from the target set out for this part of the Bill".

Speaking for the moment as a practical accountant, I can envisage very many difficulties indeed, particularly in the re-devising or the re-programming of computers that are in use in many local authorities. Your Lordships will, I am quite sure, appreciate when reading through the very complicated accounting section of the Bill, that this does mark a very radical change in the whole of the accounting and cost procedures of local authorities. Moreover, the institute concerned, which is the Chartered Institute of Public Finance and Accountancy, is itself going to produce a code of guidance to enable those who are employed in an accounting capacity in local authorities to be able to bring these measures into operation. I believe that that code is well advanced, although it is not yet in its final form. It is going to take some time to produce; it is going to take some time to circulate and, if I may say so, as one who has spent a considerable amount of his time in studying technical publications of one kind or another, particularly those relating to accounting and finance, it will take some time to assimilate.

I am therefore asking the noble Lord to think again on this. Very few months now remain before 1st April 1981. If this part of the Bill, Part III, is to come into operation, in spite of what we consider on this side of the House to be defects, then I think we are all agreed that it should come into operation effectively, efficiently and smoothly, and for this I think 1st April 1981 gives much too short a time. I therefore beg the noble Lord, in all seriousness, to think again about this, because it is my view, which is, I must tell the noble Lord, widely shared by those with experience in these matters, that it will be very difficult indeed to get this into operation by the end of next August, let alone 1st April. I hope that in the friendliest possible spirit, bearing in mind the terms of the servant in which I have felt bound to address him from time to time, the noble Lord will give very careful consideration to this matter. I beg to move.


My Lords, very briefly, may I say that on this amendment I agree very strongly indeed with the views expressed by the noble Lord, Lord Bruce of Donington. I understand from telephone calls I have received just before your Lordships' House met today that local authorities throughout the whole spectrum—and I am sure that the noble Viscount, Lord Ridley, and the noble Lord, Lord Sandford, can speak for the ADC and the ACC, but as far as the AMA is concerned, and I understand the other two associations—are very concerned and very worried, and certainly the local authorities with which I personally am connected are very concerned and worried that the Government is setting an impossible task if this matter is not put off, as suggested at the moment. We do hope the Government will look upon this favourably.


My Lords, I say at once that I entirely and unreservedly accept the intentions of the noble Lord, Lord Bruce of Donington, in moving the amendment and I am not unaware of the concern to which he referred. I know that many local authorities are anxious about their ability to get to where the Bill calls on them to be within the time stipulated. However, the amendment presents problems because, as noble Lords will know, we are anxious that the earliest possible start should be made, and therefore this is a problem of striking a balance.

We believe that authorities have had time. It was in August of last year that we made clear what was being proposed, and I hope that most authorities have been moving in the right direction and that implementation in the time is still possible. We have tried to help in this respect. We have made some concessions to ease the burden of starting the new system, easier tendering requirements, particularly the freeing of all maintenance work below £10,000 for highway authorities, winter maintenance programmes, compulsory tendering and the de minimis exemption for the smallest authorities. To contemplate a further relaxation now, even acknowledging the problems that some have, is not something we would willingly want to do.

It has been suggested that perhaps we might have further consultations with the local authorities on this point. In fact, we have had a great number already on this as on all other matters concerning this part of the Bill, and officials are constantly in touch. Nevertheless, in an attempt to be helpful and to show that we are not dogmatic about it, if the local authorities wish to come back and make some formal representations on this point, we shall be willing to receive them. While I would not want to give the wrong impression by indicating that we will accept this—I could not say that at all; in fact, to the contrary is my brief—I can say that we would be willing to hear again what they may wish to say about it and have a further discussion with them if they care to approach us. I assure the House that we will certainly listen.


My Lords, I am sorry the Minister has not seen fit to give way on this. The views I have expressed are broadly those of a large number of local authorities who are sorely beset by the problems raised by the technicalities of the Bill. I should have thought it would be in the interests of good relations between the local authorities and central Government for the wishes of the local authorities to be accepted in this respect. I repeat, I am sure they will with complete loyalty carry out as expeditiously as possible the provisions of the Bill and, with some difficulty, the provisions of this part of the measure.

In the careful and accommodating remarks the Minister made he indicated that of course if he had conversations with local authorities, that must not be taken in any way as implying that the Government could be persuaded to give way. I cannot feel that if the local authorities visited the noble Lord's office they could provide any reasons other than those I have already given, except perhaps to elaborate them to suit the circumstances of their particular cases. I am in a very non-contentious mood this afternoon, but

on sheer grounds of practice and out of regard for the fortunes of the local authorities and the difficulties with which they are faced, I am afraid I must divide the House.

4.15 p.m.

On Question, Whether the said amendment (No. 25A) shall be agreed to?

Their Lordships divided: Contents, 85; Not-Contents, 135.

Airedale, L. Greenwood of Rossendale, L. Ponsonby of Shulbrede, L. [Teller.]
Amherst, E. Hale, L.
Amulree, L. Hall, V. Raglan, L.
Avebury, L. Hampton, L. Ritchie-Calder, L.
Balogh, L. Hatch of Lusby, L. Rochester, L.
Banks, L. Henderson, L. Ross of Marnock, L.
Beswick, L. Hooson, L. Sainsbury, L.
Birk, B. Houghton of Sowerby, L. Segal, L.
Blease, L. Howie of Troon, L. Shackleton, L.
Blyton, L. Irving of Dartford, L. Shinwell, L.
Boston of Faversham, L. Jacques, L. Simon, V.
Briginshaw, L. Janner, L. Stedman, B.
Brock way, L. Jeger, B. Stewart of Alvechurch, B.
Brooks of Tremorfa, L. Kaldor, L. Stewart of Fulham, L.
Bruce of Donington, L. Kirkhill, L. Stone, L.
Chitnis, L. Leatherland, L. Strabolgi, L.
Collison, L. Lee of Newton, L. Strauss, L.
Cooper of Stockton Heath, L. Llewelyn-Davies of Hastoe, B. Taylor of Blackburn, L.
David, B. [Teller.] Lloyd of Hampstead, L. Taylor of Mansfield, L.
Davies of Penrhys, L. Mackie of Benshie, L. Underhill, L.
Denington, B. McNair, L. Wade, L.
Donaldson of Kingsbridge, L. Maelor, L. Wall, L.
Elwyn-Jones, L. Milford, L. Wallace of Coslany, L.
Evans of Claughton, L. Mishcon, L. Walston, L.
Fisher of Rednal, B. Oram, L. Wells-Pestell, L.
Gaitskell, B. Pargiter, L. Whaddon, L.
Galpern, L. Peart, L. White, B.
Gladwyn, L. Phillips, B. Wigoder, L.
Gordon-Walker, L. Winterbottom, L.
Adeane, L. Cathcart, E. Ferrers, E.
Airey of Abingdon, B. Charteris of Amisfield, L. Ferrier, L.
Alexander of Tunis, E. Chelwood, L. Fortescue, E.
Alport, L. Clancarty, E. Fraser of Kilmorack, L.
Ampthill, L. Clifford of Chudleigh, L. Gage, V.
Auckland, L. Clwyd, L. Gainford, L.
Avon, E. [Teller.] Cockfield, L. Gisborough, L.
Bathurst, E. Cottesloe, L. Glenkinglas, L.
Bellwin, L. Craigton, L. Gowrie, E.
Belstead, L. Cullen of Ashbourne, L. Greenway, L.
Berkeley, B. De Freyne, L. Gridley, L.
Bessborough, E. Denham, L. Hailsham of Saint Marylebone, L. (L. Chancellor.)
Boardman, L. Drumalbyn, L.
Boothby, L. Dundee, E. Halifax, E.
Boyd-Carpenter, L. Eccles, V. Harvington, L.
Bradford, E. Effingham, E. Henley, L.
Bridgeman, V. Ellenborough, L. Hill of Luton, L.
Caccia, L. Elliot of Harwood, B. Home of the Hirsel, L.
Cairns, E. Energlyn, L. Hornsby-Smith, B.
Caithness, E. Evans of Hungershall, L. Ilchester, E.
Campbell of Croy, L. Exeter, M. Inglewood, L.
Carrington, L. (A Principal Secretary of State.) Faithfull, B. Killearn, L.
Falkland, V. Kilmany, L.
Kimberley, E. Mottistone, L. Sempill, Ly.
Kinloss, Ly. Mountgarret, V. Sharples, B.
Kinnaird, L. Murton of Lindisfarne, L. Skelmersdale, L.
Lauderdale, E. Netherthorpe, L. Soames, L. (L. President.)
Lindsey and Abingdon, E. Newall, L. Somers, L.
Linlithgow, M. Northchurch, B. Spens, L.
Long, V. Nugent of Guildford, L. Stamp, L.
Loudoun, C. O'Brien of Lothbury, L. Stanley of Alderley, L.
Lucas of Chilworth, L. Onslow, E. Strathclyde, L.
Luke, L. Orkney, E. Strathcona and Mount Royal, L.
Lyell, L. Orr-Ewing, L. Swansea, L.
McAlpine of Moffat, L. Peterborough, Bp. Swinfen, L.
Mackay of Clashfern, L. Redmayne, L. Teviot, L.
Macleod of Borve, B. Renton, L. Trefgarne, L.
Mancroft, L. Robbins, L. Trenchard, V.
Mansfield, E. Roberthall, L. Vaux of Harrowden, L.
Margadale, L. Rochdale, V. Vickers, B.
Marley, L. St. Aldwyn, E. Vivian, L.
Middleton, L. St. Davids, V. Westbury, L.
Monckton of Brenchley, V. St. Germans, E. Willoughby de Broke, L.
Monk Bretton, L. Sandys, L. [Teller.] Wynford, L.
Monson, L. Savile, L. Young, B.
Montgomery of Alamein, V. Selkirk, E.

On Question, amendment agreed to.

[Amendments Nos. 22 to 26 not moved.]

Clause 31 [Rating exemption for fish farms]:

4.24 p.m.

The Earl of AVON moved Amendment No. 27: Page 31, line 27, leave out ("concerned") and insert ("engaged").

The noble Earl said: My Lords, this is one of two technical amendments to the clause which was accepted by the Government at Report stage. It seeks to specify that the occupier of any dwelling-house on, or adjacent to, a fish farm and, therefore, eligible to be assessed for rating purposes as though it were tied to its use in connection with that fish farm, must be "engaged in" rather than merely "concerned in" fish farming operations. The use of the word "concerned" could provide a loophole by which the provisions of this clause would have a wider application than is our intention. I am thinking of a situation in which a person was financially concerned in fish farming, but could not be said to be engaged in it in any other way. The use of the word "engaged" is therefore preferable, and is consistent with the corresponding agricultural provision in the General Rate Act 1967, Section 26(2)(a). I beg to move.

The Earl of AVON moved Amendment No. 28: Page 31, line 39, leave out ("aforesaid") and insert ("mentioned in this subsection or in section 26(2) of this Act").

The noble Earl said: My Lords, this is the second of the two technical amendments to this clause. At present subsection (2) provides for the rateable value of fish farm dwellings to be estimated on the assumption that, for rental purposes, the house could not be occupied or used otherwise than in connection with fish farming. I am advised that this restriction is too narrow. It would be more realistic to assume that dwellings at fish farms could be occupied by people engaged either in fish farming or in other branches of agriculture. This amendment provides that the purposes for which such dwellings should be deemed to be occupied or used shall include agricultural as well as fish farming operations. The result would be that dwellings would be valued on the same, generally favourable, assumptions as other agricultural dwellings. Without this amendment the valuer would have to assure a very restricted clientele, which would be unreasonably favourable to the occupiers at fish farms in comparison with the occupiers at other farms, or in any other dwelling. I beg to move.

4.26 p.m.

Lord MOTTISTONE moved Amendment No. 29: After Clause 33, insert the following new clause:

(" Rating relief for industry and commerce . There shall be added after subsection 40 of the 1967 Act the following new section:—

  1. "40A.—(1) The Secretary of State may by Order make a scheme for the purpose of giving relief from rates, in such a manner, in such cases and subject to such conditions as may be prescribed in the Order, to persons liable to rates in respect of hereditaments (not being domestic hereditaments) and such a scheme may make different provision for different cases and different rate periods.
  2. (2) An Order under subsection (1) above shall only be made in response to requests from trade organisations or organisations representing employers.
  3. (3) Before making an Order under subsection (1) above, the Secretary of State shall consult with such associations of local authorities and with such other bodies of persons with whom consultations appear to him to be desirable.
  4. (4) The power to make an Order in subsection (1) above shall be exercisable by statutory instrument, which shall be subject to annulment in pursuance of a resolution of either House of Parliament.".").

The noble Lord said: My Lords, at the Report stage I moved Amendment No. 60, which was a rather limited amendment, to allow for "mothballing" to be a permitted way in which productive industry might be excused rates so that it could maintain equipment in being during these extremely hard times from a business point of view. The equipment would still be available when times get better and industry is able to take on more employees. Industry could then quickly re-establish its machinery and other equipment, which would in the meantime have been subject to reduced rating, thus making available extra financial resources to keep going in these, I repeat, extremely hard times.

Unfortunately we did not quite make it on Report, but there was great support from all sides of the House, and that encouraged me to think that on the whole your Lordships agreed not so much with the detail of the amendment, but with the principle of giving an opportunity to wealth-creating industry to be tided over during the difficult period and be fully ready to expand when the moment came. The President of the CBI wrote to my right honourable friend the Secretary of State for the Environment pressing that point and inviting him to accept an amendment that would try to deal with what one might call the wider issue; and the present amendment seeks to do just that. It seeks to give power to the Secretary of State, when approached by the repre- sentatives of productive industry, to make an order to enable rate relief to be given, possibly on a temporary basis, to deal with a temporary and strict situation. It has that intention; and the proposed new clause makes full provision for the representatives of local authorities to be consulted so that the Minister would not in the end make the order without both sides having their full say; but he is given this flexibility to be able to deal with the extremely difficult situation which prevails at the moment.

By the way, to make the point, I spent this morning sitting on a joint industrial council seeking to agree a wage settlement for the biscuit industry, with which I am associated, as your Lordships I think know. We could not reach agreement. The reason was that the poeple with whom we were discussing could not appreciate—and perhaps many of your Lordships do not appreciate—just exactly how difficult life is for productive industry today. It really is extremely tough. Hopefully, this is temporary; hopefully, this situation will be surmounted. But it can be surmounted only if productive industry is allowed to have all possible flexibility to maintain itself and its equipment, and, indeed, as far as possible, its employees, to take it over this difficult time.

So, my Lords, this amendment seeks to give the Government the sort of power they want. Unfortunately, because we have been so pressed for time I fully recognise that the wording of the amendment is not perfect, as it should be. I had rather hoped—indeed, I wrote to my noble friend Lord Bellwin asking him about it—that perhaps the Government themselves would think of an amendment which would be better worded and would meet the same objective. Unfortunately, I do not see that on the Marshalled List, but I am hopeful that perhaps this might mean that the Government will accept mine, with all its imperfections. I beg to move.


My Lords, I think the House will have listened with considerable sympathy, as it always does, to the words of the noble Lord, Lord Mottistone, when he speaks, as he is entitled to do, on behalf of trade and industry. The worrying aspect to some of us is, I think, this. The previous amendment which the noble Lord moved at another stage of the Bill, as he frankly told the House on this occasion, limited to certain circumstances the relief of rates to trade and industry. This amendment seems to give an overall discretion to the Minister in any circumstances at all, after he has consulted the local authority associations and trade associations, as he sees fit, to make an order which would relieve industry and trade of rates.

I cannot imagine that any noble Lord would want to prevent the relief of trade and industry if they knew that there were certain other matters protected, but I think that some of your Lordships may be worried, as my noble friends and I are worried, that where you have capital and expenditure of local authoritities limited by Act of Parliament and regulation then, apart from a few sources (and even they have to be taken into account in regard to their allotment, as it were, of capital and expenditure) the only way in which local authorities can raise their money is through rates on the domestic occupier and on the occupiers of business premises.

In those circumstances, if it is not the local authority that has the power but the Minister, it seems that the local authorities and the domestic ratepayers can be very badly hit; because, as I have said, central Government having limited the amount of expenditure for local authorities, if they then exempted certain businesses and trades from their proper rating assessments and liabilities they would in fact be imposing an extra burden upon domestic occupiers, who I am sure the noble Lord, Lord Mottistone, would admit are as hard hit as anybody in these times. This is the worrying thought that I believe some of us have who might otherwise be so anxious to support him.

4.34 p.m.

The LORD ADVOCATE (Lord Mackay of Clashfern)

My Lords, I think your Lordships will appreciate the work which has been put into the various editions of this clause with which we have been concerned at the various stages of this Bill. I referred to the difficulties on previous occasions, and on this occasion my noble friend has, in a way, got out of those difficulties by creating what is an extremely flexible framework for the Executive. Some of your Lordships might possibly feel that the proposed powers are rather too wide for the Executive to have in this particular area.

I understand perfectly the intention of the new clause, and it would certainly at first sight appear to give the Secretary of State scope for quite a number of different forms of relief. The only express limitations on the power are, first, the requirement that the Secretary of State cannot make an order unless first requested to do so by trade organisations or organisations of employers, and then there is the provision that there must be consultation. The first of these limitations is somewhat unusual in legislation, and would perhaps elevate trade and employers' organisations to a rather unusual prominence. Although, as I have said, the intention is wide-ranging. I must tell your Lordships that we are advised that as drafted it will in fact be a good deal narrower than my noble friend had in mind. In particular, the advice we have been given is that the word "relief" in subsection (1) of his new clause, when construed in the light of the general rating legislation into which it would be placed, could be interpreted only as 100 per cent. relief in respect of hereditaments. Therefore, although apparently rather flexible, it would not, as drafted, exactly achieve the aim that my noble friend had in mind.

We are of course very conscious of the problem to which my noble friend has referred, and perhaps I need not weary your Lordships by going over the difficulties in giving effect to these, which I summarised on previous occasions. However, I should like to conclude by saying to your Lordships that the Government have themselves approached the problem of business ratepayers with concern and understanding, and my right honourable friends with responsibility in this area have given very serious consideration to this particular clause—and that consideration continued right up until what might be regarded as almost after the last minute.

It is relevant to point out what we have done already in this matter. The new provisions in this Bill on empty property rating are significant, and after Royal Assent we shall be bringing forward an order under Clause 42 to impose a ceiling of 50 per cent. on empty rates in the non-domestic sector. This will bring a great deal of benefit to very many firms; and, I might add, it will bring relief in many of the cases that are sometimes put forward in arguments for mothballing relief. Moreover, the Government will be able to review the new ceiling on empty rates in a year or so, and make further reductions if this is desirable.

May I also say, my Lords, that we have not irrevocably ruled out rate relief for premises only partly used. I recognise the depth of feeling with which my noble friend and, on earlier occasions, other noble Lords have spoken on this matter, and may I say in recognition of that that we shall keep this proposal in mind. I expect there will also be opportunities to discuss it further with the CBI in the coming months. I should also like to remind your Lordships and those concerned that there is a possibility of empty property relief in cases where it is possible to set aside an area with separate access and other requirements of a separate occupancy, so there is scope for an examination of that in particular cases. Having said that, may I advise your Lordships not to accept this new clause, and I hope that in the light of these explanations my noble friend may perhaps feel able to withdraw it.


My Lords, I am indeed grateful to my noble and learned friend Lord Mackay. I fully understand the difficulties of implementing this proposed clause as it is phrased. I am most heartened by his remarks about bearing in mind for the future the various factors which he enumerated. I am hoping that as time goes on he will be able to find his way through to giving purpose to those intentions. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 42 [Rating of unoccupied property]:

4.41 p.m.

Baroness STEDMAN moved Amendment No. 30: Page 41, leave out lines 14 to 29 and insert— (" (2A) The owner of a relevant hereditament shall not be exempt from being rated under this Schedule in respect of that hereditament on the ground that the provisions of section 32, 33 or 34 of this Act would exempt the hereditament from being liable to be rated or to be included in any valuation list or in any rate, unless it appears that the relevant provisions will so exempt it when it is next occupied.").

The noble Baroness said: My Lords, we return to an amendment which we put forward at Committee when, as was the noble Lord, Lord Mottistone, on the previous amendment, I was encouraged by a slightly sympathetic reception. I hope I shall receive a still more sympathetic reception this afternoon. The amendment is put forward in slightly different wording. This clause is intended to close the loophole in the 1967 General Rate Act whereby the gas corporation and electricity boards can escape liability to rates on their empty showrooms. There have been difficulties with other properties—notably, offices—and this amendment would tidy up the law so that public corporations were not exempt from rates on empty offices, showrooms and dwellings. I hope that the Minister will give me a shock, even at this late stage, by accepting the amendment.

The Earl of AVON

My Lords, this amendment is a revision of one which the noble Baroness, Lady Stedman, moved at Report stage. In the Bill as drafted, paragraph (4), subparagraphs (2A) and (2B) of Schedule I of the 1967 Act, as amended by Clause 42, are intended to close a small loophole in the present statutory provisions on empty property rating whereby unoccupied electricity and gas showrooms are able to avoid paying empty property rates. The loophole came to light in a court case concerning Tower Hamlets London Borough Council and it was thought that the clause would close it. The noble Baroness's amendment at Report stage, which the Government agreed to consider, led to investigations into the need to ensure that empty offices as well as showrooms of electricity and gas boards should be liable to rates. There have been discussions between officers of the Association of Metropolitan Authorities and the department about this matter.

This amendment now goes further in that it covers all empty electricity and gas board premises (that is showrooms, offices and dwellings) which, when occupied, are subject to normal rating provisions. It also extends to analogous premises on railway board land. It removes any doubt that, when unoccupied, such premises should be liable to empty property rating in the same way as premises owned by any other person or organisation. This amendment clarifies the purpose behind the original legislation and I recommend to your Lordships that it be accepted.

Baroness STEDMAN

My Lords, I am delighted at this late stage that we have had one of our amendments accepted.

4.44 p.m.

Baroness ELLIOT of HARWOOD moved Amendment No. 31: After Clause 46, insert the following new clause:

(" Agricultural premises: Scotland .—(1) In section 7 of the Valuation and Rating (Scotland) Act 1956 (provisions relating to agricultural lands and heritages and dwelling-houses occupied therewith) in subsection (2) in the definition of "agricultural lands and heritages" after the words "market gardens" there shall be inserted the words "nursery grounds". (2) In the definition of "agricultural buildings" in that subsection after the words "market garden" there shall be inserted the words "or nursery grounds".").

The noble Baroness said: My Lords, this is an amendment which I bring forward at the request of the Scottish Farmers' Union and which should have been put down on Report stage but I did not get it early enough. It is an absolutely new amendment which has not been discussed during any period of our discussion of the Bill. I apologise to the noble Earl, Lord Mansfield, for bringing it up like this, but it is worth considering because it brings forward rather an important matter.

This amendment refers to a definition of agricultural land called nursery ground. Market gardens are already derated while nursery ground is derated in England and Wales but not in Scotland. Nursery ground covers 792.6 hectares of ground and on this ground is grown a variety of things none of which requires to be under glass. On it grow fruit stock, ornamental shrubs used considerably by local authorities for improving the environment, roses, rose stock, ornamental trees, bulbs, flowers, outdoor growth for hardy annuals and fruit stock. The value of the trees and shrubs grown is quite considerable. In 1978 it was £8.3 million, in 1979 it was £8.4 million and in 1980 it will be approximately the same although maybe a little down. The total value of stock grown on the ground is £40 million. The Scottish NFU have in their membership between 50 and 60 members who are engaged in this form of agriculture but outside NFU membership hundreds of men and women are employed in this kind of agriculture.

It is in order to bring this section of agricultural and horticultural development into the same category as in England that this amendment is moved. It is nothing new; it is exactly what has been done in other parts of the United Kingdom. I hope the Government will see their way to accepting it. The reason that it was brought to my notice was that in a recent case the Strathclyde regional local valuation panel said that open growing areas planted almost wholly with the kind of fruit trees and shrubs that I have described were not devoted to agricultural usage a market garden and therefore were not entitled to have nursery ground benefits from agricultural derating. Considering that it is done in England and Wales, I think that this is a most unfair definition and I hope the Minister will see his way to accepting this amendment to be sure that in the matter of derating we have the same treatment in Scotland as obtains in England and Wales. I beg to move.

The Earl of PERTH

My Lords, I should like to support the noble Baroness on this. We all know how valuable are many of the things in this category which are grown in Scotland. Think of the roses, for example, which are famous. It seems to me that in this case we should be in line with the practice in England. This is not so in every case but here, in regard to the situation that we have heard described, it seems right and appropriate that we should be in line and have nursery grounds in the same category as market gardens in general.


My Lords, from these Benches I should like to support the new clause moved by the noble Baroness. It is a growing industry, and a valuable one with considerable export potential, and it should be treated in the same way as many other aspects of agriculture. I trust that in this case the noble Earl will be able to achieve parity with England for the Scottish nurserymen. It gives me enormous pleasure to support the noble Baroness. I do it because she ordered me to do so—and it is a wonderful thing for a politician to be able to have as his reasons affection, conviction, and fear.


My Lords, I should like to say from the Cross-Benches that I support strongly the amendment moved by the noble Baroness, and I hope the Minister will see his way to accepting it. It will be good for Scotland as it is already good for England. What England deserves Scotland also deserves.


My Lords, I dare not be here and not support this amendment, such is the power of the noble Baroness. But, honestly, it is only fair and right that in this particular section we should have justice and equity for Scotland and for the nursery people. It gives me great pleasure to support this amendment.

4.50 p.m.

The MINISTER of STATE, SCOTTISH OFFICE (The Earl of Mansfield)

My Lords, my noble friend was good enough to tell me before the weekend of her intention to move this amendment. Therefore, I am glad to say that I have not been taken by surprise. I should like to say to her and to all of the noble Lords who have gallantly rushed to her aid from all parts of the House that Scottish nurserymen are not at a disadvantage, and there is no need for this amendment. The reason I say that is this. Her new clause in effect seeks to add the term "nursery grounds" to the definitions of agricultural lands and heritages and agricultural buildings in Section 7(2) of the Valuation and Rating (Scotland) Act 1956 in order to ensure that nursery grounds and their related buildings benefit from agricultural derating. The justification for the change regarding agricultural lands and heritages is that in England and Wales the definition of agricultural land in Section 26(3) of the General Rate Act 1967 already includes the term "nursery grounds".

The term "nursery" can cover both the growing of young plants for transplantation at a later stage and, more loosely, the stocking of young plants which are brought in for retail. In the former sense, "nursery grounds" are already entitled to agricultural derating in Scotland because assessors do not distinguish between land on which plants are grown for harvesting and land on which young plants are cultivated for onward growing elsewhere. The latter kind of nursery where plants are stored prior to their sale (sometimes called a "garden centre") is not entitled to derating.

The definition of "agricultural lands and heritages" in Section 7(2) of the Valuation and Rating (Scotland) Act 1956 does not include "nursery grounds" unlike the corresponding provisions in the General Rate Act 1967. But I want to reassure my noble friend that this difference is not to the disadvantage of Scottish growers because, as I said, local assessors do not distinguish between the growing of young plants in nursery beds and the growing of mature plants in, for example, fields or orchards. Nursery grounds already benefit from agricultural derating in Scotland and it is in those circumstances that the amendment is unnecessary.

As my noble friend has said, the original inspiration of the amendment was a recent appeal in Strathclyde in which a firm of landscape gardening contractors (describing itself as a nursery) was denied derating. In that case, the valuation appeal committee noted that the open ground on the contractor's premises was used, not to grow young plants, but to store young plants which had been bought in from other growers, until they were required for use in connection with the business.

That is the only case which has appeared on this subject. It is a very recent one, and one can well understand why it has caused anxiety in the minds of the National Farmers' Union of Scotland. Nevertheless, I hope my noble friend will agree in the circumstances that nursery grounds in the proper sense of the term and associated buildings already benefit from agricultural derating in Scotland. The lands and heritages which appear to be excluded and not in any strict sense nursery grounds are in a different category. I hope therefore that the House will accept this assurance that there is no inequity either as between Scottish and English practice or as between Scottish and English nurserymen.


My Lords, I am very grateful to the noble Earl for explaining the situation. As long as it is well known and appreciated by rating authorities that nursery grounds are included, among other things, then I am satisfied and will withdraw the amendment. If there is any doubt, I trust that the Scottish Office will issue a circular of some description to give the information that this is ground which passes the test of being a market garden ground, derated ground, and there should be no doubt in the minds of rating authorities, and they cannot descend on market gardeners or other gardeners and change the rates. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 47 [Commencement and extent]:

Lord BELLWIN moved Amendment No. 32: Page 46, line 15, after ("6(2)") insert ("and (3)").

The noble Lord said: My Lords, this is an essential, but minor, drafting correction to the commencement provisions for Part V of the Bill. As drafted, the Bill wrongly provides for two related provisions to come into effect at different times. These can be found in Schedule 31, paragraph 6. Under the commencement clause, sub-paragraph (2) is to come into effect only after a general rating revaluation, which is correct. Sub-paragraph (3) however would have effect on Royal Assent, which is wrong. The amendment provides that both shall commence only after a revaluation. I beg to move.

Clause 56 [The block grant]:

Lord BELLWIN moved Amendment No. 33: Page 55, line 17, at end insert (", other than any amount payable under subsection (3) above,").

The noble Lord said: My Lords, this is a technical amendment designed to ensure that Clause 56(7), which specifies that the block grant payable to an authority should not exceed its total expenditure and should not apply to any payments of grant made under Clause 56(3). Clause 56(3) allows for the possibility (should the authorities concerned request it and the Secretary of State agree) of the grant which would otherwise be payable to a county council, the GLC or ILEA to be paid instead to the districts or boroughs on which they precept. In this particular case it would be legitimate for grant paid to exceed the expenditure of the district or borough, because the precepting authorities simply receive their grant indirectly through the precept. I beg to move.

Baroness STEDMAN moved Amendment No. 34: Page 55, leave out lines 30 to 32.

The noble Baroness said: My Lords, while we remain totally opposed to the block grant, we accept that it is probably going to be a fact of life after we have finished with this Bill in this House tonight. Therefore we thought that it would be slightly better if we could get it based on the method of equalisation known as percentage equalisation rather than that known as per capita equalisation.

I accept that this matter is very complicated to explain; I also confess that I had it explained to me by means of graphs which I could understand; but it is very difficult to show graphs across the Table of the House. The issues are: first of all, does a variation in expenditure measured in pounds per head or percentage terms give a better indication of variations in standard of service? Secondly, which of the methods is more readily understood—if either of them is?

It can be argued that the per head measures do not properly reflect the variations in need, and those who understand this principle far more clearly than I do will pose the question: Given that, because of differences in conditions between the areas, local authority A needs to spend, say, £300 a head to provide the same standard of service that could be provided by an adjacent local authority, B, for some £200 a head, could the £10 extra per head spent in authority A provide as much extra service as £10 extra per head in authority B?

If the answer is considered to be "Yes", then per head equalisation would be a fair choice. Both authorities would be able to raise the extra rate to pay for the extra £10 per head. If the answer was considered to be "No", authority A then needs to spend an extra £30 a head to provide as much extra service as authority B can provide for an extra £20 a head. Then percentage equalisation would be a fairer choice.

Authority A would only have to levy the same extra rate to pay the £30 a head extra spending as Authority B would have to raise to pay the £20 a head extra spending. The same cash increase in spending would have a different effect on the rates of the two authorities. This amendment, if acceptable, would remove the option in the Bill to choose a per capita equalisation. I hope that my perhaps inadequate explanation may convert the Minister into accepting that percentage equalisation would be the fairer way of doing it. I beg to move.


My Lords, as I hope everyone in your Lordships' House will know by now quite clearly—I am sure they do—the purpose of the rate support grant system is to enable authorities to provide a comparable standard of service for a similar rate in the £; in other words, it is an equalising grant. This amendment is about whether the poundage cost to authorities of equal increments in expenditure should be equalised, as the noble Baroness suggested, on a per capita basis—that is, so many pounds per head (which is the present system): or on a percentage basis—that is, an increase in expenditure of X per cent.

There are arguments for and against both bases of equalisation and it is important to note that the legislation provides for both possibilities. The noble Baroness, whose amendment is designed to rule out the possibility of per capita equalisation, advanced the arguments in favour of percentage equalisation and those against per capita equalisation. I respect her point of view. But I have to say that there are arguments which can just as easily be mounted in favour of per capita equalisation—which is the established method—and against percentage equalisation.

Unless pressed, I do not propose to go into these now, because this is one of the issues on which the Government will shortly have to reach a decision in the context of the forthcoming rate support grant settlement for 1981–82 and they have not yet reached a final view. For this very reason, it surely would be wrong to rule out in the legislation one of the bases of equalisation. Therefore I hope that the noble Baroness will consider the explanation to be a fair one and that she will understand that we do not want to accept the amendment.

Baroness STEDMAN

My Lords, I take the noble Lord's point that these are two of the options that may be open to the Secretary of State when he is considering the rate support grant and something about which he will no doubt have to consult with the local authority associations. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 59 [Adjustments block grant]:

5.3 p.m.

Baroness STEDMAN moved Amendment No. 35: Page 58, line 25, leave out from ("Temples") to end of line 27.

The noble Baroness said: My Lords, again this refers to the block grant. There has been a long debate about the use of multipliers in block grant and considerable concern has been expressed about the extent to which a Secretary of State might use multipliers to produce grant penalities or advantages for certain authorities or classes of authorities. In Clause 59(6) we set out the prescripton of the purposes for which the multipliers may be used, and then Clause 59(6)(d) removes all the good work that goes before by giving the Secretary of State power to use multipliers for any purposes he chooses. We think that is too wide and that some of the misgivings at present about multipliers might disappear if the Government could accept this amendment. I beg to move.


My Lords, while I appreciate the point the noble Baroness is making, I do not accept that there is cause to be alarmed about the clause in its present form. We discussed this particular issue at Committee stage. I said then that the three specific purposes for which multipliers may be used listed in paragraphs (a) (b) and (c) of Clause 59(6) are the main purposes for which multipliers are in practice likely to be used. This remains the case. But as I also said then, any other purpose not listed is by definition excluded. It surely would be imprudent on grounds simply of good administration of the new system to rule out paragraph (d), which does provide for the possibility of other uses, and that is why I cannot accept the amendment.

However, I should also point out that the power in paragraph (d), if it were used, would have to be in accordance with principles applied either to all authorities or all authorities in a class—there would be no question of picking off individual authorities. I might also point out that paragraph (d) in itself provides a safeguard against misuse of the power to use multipliers to adjust authorities' grant entitlements: it makes it clear that if the Secretary of State wants to use multipliers for any purpose other than those listed in paragraphs (a) to (c) he must spell it out—because it is a formal "determination" in his annual report to Parliament, which must be subject to a vote in another place before it can take effect. There is therefore considerable value in setting out on the face of the Bill both specific uses for multipliers and a general power. I therefore believe that there are adequate safeguards in this clause as it stands, and I wonder whether the noble Baroness would accept my views on this, because it is a very complex matter and, as I know only too well, it is sometimes very hard to absorb all these points simply cross the Table in debate

At the end of the day, that is a view one has to take. I think that the explanation given is a fair one. It is based on the Bill as it is—hopefully, the Act, as it will become—and as regards the fears that have been expressed before, I believe they are taken care of by what I have said about covering classes of authorities. That is the intention. That is the way it works, and I hope the noble Baroness may feel able at least to accept the spirit of what I am saying.

Viscount RIDLEY

My Lords, before the noble Baroness replies, may I just thank the Minister for defending what is in effect the amendment which I moved at Committee stage and which the Committee accepted. We do want to support the Minister on this because, as he has already said, nothing can be done without the approval of Parliament; and I think that is right.

Baroness STEDMAN

My Lords, we certainly accept all the safeguards and I am grateful to the noble Lord for his patience in spelling these out again to us. The trouble is that you cannot write safeguards into an Act of Parliament, and we have to accept them on face value. We do accept what the noble Lord said is the intention, but it is again giving very wide powers to the Secretary of State, even though he has to come to Parliament for them. There are misgivings, and I thought it only fair to raise this matter today. However, in view of what the noble Lord has said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord BELLWIN moved Amendment No. 36: Page 59, line 10, leave out from ("In") to end of line 15 and insert ("their application to block grant payable to a local authority for the commencing year subsections (3) and (6)(a) above shall have effect as if references to an amount determined by the Secretary of State were substituted for the references to the amount of block grant payable to the authority for the previous year").

The noble Lord said: My Lords, this is a technical amendment designed to extend Clause 59(12) so that it relates to the reference to the previous year in Clause 59(6)(a) which was incorporated at Report stage. That clause provides that multipliers may be used to limit changes in the amount of block grant payable to an authority as compared with the amount payable in the previous year. In the first year of block grant, the previous year must be subject to the special definition in Clause 59(12), which already applies to another such reference in Clause 59(3). I beg to move.

Clause 60 [The Rate Support Grant Report]:

Lord BELLWIN moved Amendment No. 37: Page 59, line 35, after ("determinations") insert ("relating to the relevant grants which are").

The noble Lord said: My Lords, this amendment is necessary to make it clear that the Rate Support Grant Report need only specify the determinations relating to the relevant grants. I beg to move.

Clause 68 [Rate support grant—supplementau]:

Lord BELLWIN moved Amendment No. 38: Page 64, line 26, leave out ("(5)") and insert ("(6)").

The noble Lord said: My Lords, this is a purely technical amendment which is necessary as a result of Amendment No. 120 at Committee Stage, which added a new subsection to the clause concerned with Section 31(7) of the Education Act 1980. I beg to move.

Clause 72 [Expenditure which authorities may make]:

5.10 p.m.

Lord BELLWIN moved Amendment No. 39: Page 66, line 36, leave out from beginning to ("(3)(e)") and insert ("and such payments may be made, subject to section 73 below, for such purposes as the Authority think fit. (4) In subsection").

The noble Lord said: My Lords, may I, in moving this amendment, speak also to Amendment No. 41? These two amendments are purely technical. As it stands, Clause 72(3) provides that an authority may make in any year capital payments equal to or less than the aggregate of the amounts listed in paragraphs (a) to (f). But paragraph (f) does not give an amount; it sets out various enterprises which are included in the term "trading undertakings". These amendments will remove paragraph (f) from subsection (3) and make it into a new subsection (4). My Lords, I beg to move.


My Lords, I should like to say a word of warm appreciation to the Minister for the amendment that he has moved, which will give very considerable satisfaction to many local authorities. I think I am right in saying that concealed in this amendment is an acceptance of the point made in a debate in this House. If I am correct, may I say to him that to the very high parliamentary reputation that he has built up can be added a capacity for persuading his colleagues of the wisdom of a sound argument, widely supported in this House? We very much appreciate his attitude and its accomplishment in that direction.


My Lords, I thank the noble Lord, Lord Hill, for what he has just said. In fact, I think it is the next amendment which covers the point. Nevertheless, the sentiments are most appreciated and I am very grateful.

5.12 p.m.

Lord BRUCE of DONINGTON moved Amendment No. 40: Page 67, line 8, at end insert— ("(ix) any direct labour organisation.").

The noble Lord said: My Lords, I hope that, after the discussion on this amendment, I shall be able to offer the noble Lord similar felicitations to those just offered by the noble Lord, Lord Hill of Luton. On the assumption that the efforts of local authorities will bring their direct labour organisations into that degree of efficiency which they themselves desire, and upon which the Secretary of State will insist by imposing certain obligations to yield a percentage return on capital, it is quite clear that they will make a profit. One way of encouraging or rewarding good management would be to allow local authorities to use DLO profits to supplement capital expenditure allocations. This would enable DLOs to be better equipped, and presumably, would improve their performance.

I am quite sure that the noble Lord, Lord Bellwin, joins me in desiring to encourage direct labour organisations to be profitable in some or all of the divisions of work. This amendment would enable them to do that. I sincerely hope, in the light of the noble Lord's exceptional geniality this afternoon, that he will find himself able to accept the amendment without any violation of his conscience, and without incurring the extreme displeasure of his right honourable friend the Secretary of State. My Lords, I beg to move.


My Lords, I was not aware that I was being unusually genial, if "genial" is the right word. If that is so it can only be because of the approaching end of some of our labours. But I think we had better just hang on a little, because there are still some amendments to come yet—and, who knows? Nevertheless, I appreciate the spirit of what the noble Lord said. Would that I was able to be so helpful. I hope noble Lords will have noticed the fact that it was my noble friend Lord Avon who accepted the noble Baroness's amendment, so perhaps it is to him that the words should be directed on another occasion.

It is correct, as the noble Lord, Lord Hill, said, that the clause which he moved so successfully is being accepted by the Government. In fact this is, I suppose, the first occasion that we have formally said so and there will be no attempt to put it back in another place. So I think that that is the good news which the noble Lord, Lord Hill, was wanting to hear.

This amendment would add direct labour organisations to the list of trading undertakings, but one would have to say straight away that direct labour organisations are quite different in character from all the other trading undertakings listed in Clause 72. Noble Lords will see that those undertakings all perform the function of providing services for persons outside the local authority. This is obvious from the list—airports, markets, transport undertakings, places of entertainment and so on. Direct labour organisations are different. The reason for their existence is that they perform a service for their own authority. Work which they may do for some other body, as mentioned in Part III of the Bill, is ancillary and subsidiary to this basic reason for their existence.

This difference is reflected in the notion of profits of the undertaking. It will not be a simple matter to establish the profits of most of the trading undertakings concerned, but, at least, the concept of making profits out of services provided, at a charge, to other people is readily understandable. With direct labour organisations, the position is much less clear. Clearly, a direct labour organisation must charge its own authority's services account with the true cost of its work and should show a rate of return on capital employed. But that will not amount to making a profit out of the DLO's own authority.

The difficulty—and scope for confusion—of establishing what might be profit for an undertaking such as a direct labour organisation, which does most of its work for its own authority, would be enormous. In view of this and, as I said earlier, because the fundamental difference between a direct labour organisation and trading undertakings as such is so great, we could not accept this amendment. I understand the thrust behind what the noble Lord said. He asked: if it applies to one, why should it not apply to the other? I am saying, in effect, that if they were both equal and on all fours, that would be an unarguable case. While I am sorry to disappoint the noble Lord, who has presented cases on which he feels very deeply, and has presented them with great restraint—and I respect that—unfortunately, I see this enormous difference between the two. For that reason, I cannot accept the amendment.


My Lords, I am very mystified to understand just what the noble Lord is driving at. He seemed to imply that the direct labour organisations would not make a profit at all. But they must. He has himself laid down in the Bill the form in which the accounts shall he drawn up. He has himself laid down in the Bill that a rate of return on capital shall be employed. A rate of return on capital cannot, in fact, be accomplished without a profit being made.

This is the whole reason for the preparation of a revenue and expenditure account, the preparation of a balance sheet and the preparation of a statement showing the source and application of funds. It is the whole purpose of the use, after certain adjustments, of the whole system of current cost accounting, to which the noble Lord has now become addicted. But if there is no profit, his whole accounting concept collapses.

A profit is made, because of the determination of the difference between the cost to the local authority of the work that it is carrying out, and the amount that has, on his own insistence, been inserted into the books of the direct labour organisation as the substitute for the invoiced selling price. He has all the matters under his control. He has made provision as to what happens when there are deficits.

Now we are asking him to make provision as to what happens to the surpluses which, if his policies are carried through, are bound to arise. It is not as though one is asking the Government to assent to the squandering of the profits that have been made. The suggestion is not that those profits should be spent outside on wild and riotous living but that they should be allowed, as a matter of accounting, to take them into account for the purposes of their capital expenditure. In other words, the more profits they make on their DLO, the more they are allowed within their capital expenditure allocation. What is unreasonable about that? I should have thought that it stood out a mile that some encouragement should be given to local authorities to utilise the returns on their capital in this way. I should be very loth to accuse the noble Lord of pedantry or anything of that kind, but may I suggest he is sticking too close to the briefs which those of us who have seen "Yes, Minister" know quite well are provided to Ministers, and that he should exercise a little common sense.


My Lords, I do not see why one should assume in the first instance that briefs are necessarily not common sense. I could be accused, perhaps more than most, of not sticking closely to mine. Indeed, I assure the noble Lord that the complaint I get is that I depart too often from the briefs and do not stick to them.

Like most things, it is a matter of judgment. The nub of this argument is that the profits which the direct labour organisations will be making, as opposed to those which trading undertakings outside are making, come from supplying services to their own functional departments within their own authorities. The profits come from within; they make no external profits. They make the surplus from giving the service to the functional department within their own authority which places the order. Yes, indeed, a profit it is, hopefully, in accounting terms, and indeed a profit it needs to be—and will be, we hope. But I do not see how that can be compared with the profit which a trading undertaking outside makes by selling its goods or providing its services on the open market to anyone.

On Question, amendment negatived.

5.23 p.m.

Lord BELLWIN moved Amendment No. 41: Page 67, leave out lines 9 and 10.

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 39. I beg to move.


My Lords, this is the last occasion, possibly, that we shall be able to refer to Clause 72 of the Bill. I am so sorry that the noble Lord, Lord Hill of Luton, is not in his place, because I should have liked to associate myself in his hearing with what he said regarding the amendment which has been accepted. As the House will know, my noble friends and I put down an amendment in precisely the same terms as that of the noble Lord, Lord Hill of Luton, except that we added an exhibition centre. The noble Lord was good enough to say that he approved of the addition. It was not subtlety which led us to defer to the noble Lord, Lord Hill of Luton, and leave him to speak to his amendment from the Cross-Benches. It was merely an appreciation that his oratory would most likely be far more successful than anything which I could put over. That was a matter which was put to me by my noble friends in no uncertain terms. It was in that spirit that the House received the speech of the noble Lord, Lord Hill of Luton, and gave its encouragement to the noble Lord the Minister to agree to the amendment.

We on our side would also like to thank the Minister for the understanding he has shown regarding this amendment, which originally was resisted. I share the admiration of the noble Lord, Lord Hill of Luton, for the way in which his conviction has now presumably been imparted to others, with the result that we now learn that this clause, as amended, will stand part of the Bill.


My Lords, as one who spoke with unusual vehemence against my noble friend when we debated the amendment of the noble Lord, Lord Hill of Luton—Amendment No. 107, as I recall it, at the last stage—I should like to add my thanks to the Government, if it is not premature to do so, for their acceptance of this amendment and for their intention to retain it, or to do their best to retain it, when it reaches another place. This is a considerable improvement of the Bill. Although I incurred the wrath of my Chief Whip in getting the amendment in at an earlier stage, I am glad that now it is going to stick.

Clause 74 [Withdrawal of specification]:

Lord MISHCON moved Amendment No. 42: Page 68, line 22, at end insert— ("(3) The same principles shall be applied to every withdrawal of specification under this section for any year. (4) Withdrawal of specification under this section shall not have effect until approved by resolution of the House of Commons.").

The noble Lord said: My Lords, since we are going very rapidly, and helpfully so, through this Bill at Third Reading, I wonder whether your Lordships will bear with me for one moment while I refer to the basis upon which this amendment is put forward. At Clause 72(1) on page 66 of the Bill as it now stands, the Minister is empowered—indeed, it is stated to be his duty—to specify in relation to any authority an amount of prescribed expenditure for each year. If noble Lords will now turn to Clause 74(1), the Minister can withdraw a specification so far as it relates to payments which the authority have not made before it is withdrawn. That is subject to a point in subsection (2), which says that he cannot withdraw a specification if the local authority has already entered into a binding contract to spend the money, although it has not already been spent.

The purpose of the amendment is to see to it that the same principle regarding the policy of withdrawal shall apply to all local authorities and that favour will not be shown to any authority as against what may happen to others. That is the spirit, noble Lords will remember, which we discussed—indeed, the Minister emphasised it—when we looked at the block grant provisions in Clause 59. Clause 59(5)(a) says that the power may only be exercised—

  1. (i) in accordance with principles to be applied to all local authorities; or
  2. (ii) in accordance with principles to be applied to all local authorities belonging to the appropriate class".
All that this amendment therefore seeks to do is to carry through this principle in regard to the withdrawal of payments which are included in the Minister's specification so that a general and similar policy is invoked in regard to all local authorities. The purpose of the second part of the amendment is purely to see that the other place has the right to look at these matters when there is such an order for withdrawal.

Let me say at once that if the noble Lord the Minister were inclined to accept the first part of this amendment and not the second, or the second part and not the first, obviously I should be more content than if I were to hear him say that he does not accept anything at all. If the House would like to hear my own personal preference, for what it is worth—and I put it forward humbly—it would be that, if he were to dissect the amendment, the first part should prevail over the second; namely, that there should be clearly written into the Bill the spirit of fairness which is already written into the block grant provisions. I beg to move.


My Lords, as the noble Lord, Lord Mishcon, has said, the amendment is in two parts, and I must say at once that the intention behind the first part is not at all clear to me. It could mean either that where the Minister withdraws an expenditure allocation he must follow the principles set out in subsections (1) and (2) of Clause 74, or it could mean that the Minister must not apply different principles to the withdrawal of different expenditure allocations made for the same year; but in either case the first part of the amendment seems to be confusing.

If "the same principles" is meant to refer to the principles set out in subsection (1) and (2), then I would say that the Minister is already bound to apply those principles, and the amendment would do nothing to strengthen or weaken that obligation in any way. If on the other hand the amendment is meant to provide that the Minister may apply whatever principles he likes to the withdrawal of expenditure allocations in any year, on condition that these principles should not vary from one place to another, then this seems to me like a reduction in flexibility in the way the system will work; and, may I say, rather an arbitrary loss of flexibility at that.

While the second part of the amendment certainly has the virtue of clarity, I would argue that it is no more desirable than the first. I can quite understand—and indeed I sympathise with—the thinking behind the second part, which is that the Government should not be able to withdraw expenditure allocations so suddenly as to cause destruction in a local authority's capital programming. As I said at Report stage, we recognise the possibility of such destruction if the Minister ever found it necessary to take back an expenditure allocation once he had made it. The amendment would oblige the Minister to seek approval by a resolution of the House of Commons before the withdrawal of an allocation could be effective. This would mean that the Minister would not be able to withdraw an allocation without making it known, some considerable time before the event, that he intended to withdraw it.

Clause 74(2) provides that the Minister cannot withdraw an expenditure allocation in so far as it relates to payments which an authority is contractually bound to make. That is to ensure that no authority can be put in the position of having to break contractual obligations through the withdrawal of an allocation. But if the Minister had to give a substantial period of warning that he intended to withdraw an allocation there would be nothing to prevent the authority concerned from entering into contractual commitments that could make it impossible for the withdrawal to take effect. In other words, the amendment could mean that the Minister's power to withdraw allocations would be useless in practice.

I am convinced that that would not be in the national interest and, as I said in several earlier debates, it is the national interest which is of paramount importance. The situation could arise, although we all hope very much that it will not, where the only way in which a Government could prevent a national overspend would to be to withdraw all unspent and uncommitted allocations with immediate effect. The amendment would jeopardise our ability to take that remedial action. For that reason and for the reasons I gave earlier—and I think that the second reason is a particularly powerful one—I fear that we cannot accept the amendment.


My Lords, if the noble Lord would be kind enough to bear with me a moment, I should like to raise one point, although I am not absolutely certain that it is exactly on this amendment. There are large numbers of authorities who have contractual obligations in terms of capital projects at the moment, and if the specification were to be withdrawn and the money which is available at the moment, either in terms of capital receipts or in terms of balances, were not available, this would create a critical situation. I wonder whether the noble Lord can give me an assurance that, as a transitional measure, the Minister will see those projects through to an end.


My Lords, there is no need, because we have made it clear that, where a contractual obligation is undertaken, that simply stands. There is no question that it can be interfered with in any way.


My Lords, I should like to ask the Minister for some further elucidation. Where there is a contractual arrangement where, for example, a building has been put out to contract in its entirely, that is quite clear—and I understand the point that has been made, but if, for example, there is a management contract where there may be, as part of the total project, 30 or 40 contracts, some not yet let but essential to the total construction of the building, would his point cover that situation as well?


My Lords, that is a very interesting point and offhand I would say that it would not be covered. In other words, in such an event the authority would not be able to enter into the further commitment to finish off —or whatever it may be. I recognise the significance of what I am saying, but I hope we are talking about rare situations, and it would only be if the national interest was felt to be in jeopardy that such action would take place. I have said all along that this is a reserved kind or situation. The noble Lord, Lord Mishcon, puts it extremely well and has done many times throughout the whole of the discussions on these matters, but that is the position at the end of the day.


My Lords, will the noble Lord bear in mind that these may be expensive buildings, five, six or seven-eighths completed, but totally unable to be used and an expensive waste of money, whichever way they are looked at.


My Lords, I have no doubt that the noble Lord the Minister will consider the last statement made by my noble friend, and we will deal with it after he has given consideration to it, possibly through another medium.

I have had occasion to say to this House more than once that local authorities resent some of the powers given in this Bill, because they are being treated like children. When I heard my noble friend a moment ago answer the amendment which I had ventured to table for the consideration of your Lordships, I felt that I had to turn my phrase into "being treated like naughty children." Your Lordships have been invited to consider the proposition that when a Minister intimates that he is about to withdraw a specification because money has not been spent by a local authority, that local authority will immediately—if the Minister cannot carry out his intimation immediately and make it effective—enter into a contract in order to see that the money is spent or contracted for, and therefore the Minister will be done out of his direction or withdrawal. As I said before, this is really going too far. It will lead to such a resentment among local authorities as in my judgment—and I say this most humbly—will lead to a deterioration of the relationship between central Government and local authorities to an extreme degree.

I am not going to weary your Lordships with a long speech, but I did not hear the noble Lord the Minister say why it was that in Clause 59 of this Bill it is possible for a power which dealt with the determination of different multipliers for different authorities to be limited, by a statement that that power can only be exercised in accordance with principles to be applied to all local authorities and why it is possible to do that in regard to multipliers and it is not possible to do that in regard to the principle of withdrawals. All I am seeking to do by this amendment is to see that the same principles are adopted by the Minister so that the question of equity and fairness can be made abundantly clear.

I appreciate what the noble Lord the Minister has said in regard to the approval of another place, and I shall not weary your Lordships with any further discussion of that topic; but I hope that on consideration the Minister—even if he wants to alter the wording—will at least agree that it is right that, when you withdraw from a local authority a specification you have given them for expenditure, because they have not yet spent it, the same principles will have to apply with regard to that policy to all local authorities, without, of course, any preference one against the other. It is that principle that I tried to enunciate and I hope that at the last minute, even if he wants to alter the wording, the noble Lord the Minister can concede that it is a principle worth agreeing to.


My Lords, I do not know that I can add much to what I said before. I think we may be on slightly different ground here; I suspect we probably are. To me the great strength of the argument that I was putting was the one where the noble Lord asked, "Would authorities behave like naughty children?" That is not the term I would use, but I would have to say that in my experience it is not unknown for authorities, either anticipating or knowing that certain directions will take place, to take steps to, if you like, nip in beforehand. I think in some instances this is not an unreasonable thing to do.


My Lords, do they in Leeds?


Well, my Lords, I am not going to say. Certainly it is the kind of matter that one has thought about. I think it would be unrealistic not to assume at all that it could happen, and that is really what I am saying.

On Question, amendment negatived.

Clause 86 [Distribution of planning functions between planning authorities]:

Lord BELLWIN moved Amendment No. 43: Page 78, line 37, leave out ("that Schedule") and insert ("Schedule 16 to the Local Government Act 1972").

The noble Lord said: My Lords, this is a pure technicality which is necessary, after the insertion of subsection (3) into Clause 86 in Committee, to clarify what the succeeding subsections refer to. I beg to move.

Clause 87 [Fees for planning applications, etc.]:

5.42 p.m.

Viscount RIDLEY moved Amendment No. 44: Page 82, line 15, at end insert— ("(b) to a County Planning Authority in England or Wales in respect of any application by a body referred to in paragraphs 1(d) (h) and (i) of Schedule 19 for an authorisation which, if granted, would result in a deemed planning consent.").

The noble Viscount said: My Lords, I should like, if I may, to speak to Amendments Nos. 44 and 45 together, as they hang together, and, before I move them, to correct a small misprint in Amendment No. 44. The third line should read paragraphs 1(d), (h) and (j) , not (i) of Schedule 19". This is a misprint which I hope can be seen if one refers to the schedule.

I should explain, in view of what has been said this afternoon, why I am raising this subject on Third Reading. I put down these amendments on Committee but they got muddled up with the debate on the Question that the clause stand part, and in the interests of supper, if I remember rightly, I was very popular with your Lordships when I withdrew them so that they would be debated at a later stage. I should, of course, have put them down on Report, but for two reasons I did not. One was that I had not by then received what I regard as a less than satisfactory reply from my noble friend Lord Bellwin, which I subsequently did receive, and, secondly, I was not sure that I could be here on that day. However, the matter was briefly touched on at Report stage, and my noble friend said, without quoting him at length, that he did not rule out what I am trying to do. So I did warn of this amendment at Third Reading, and hope that with that explanation your Lordships will allow me to proceed.

We are talking here about the question of payment for applications for planning permission. I am well aware that this is very unpopular in many parts of your Lordships' House, but we have made the decision, rightly or wrongly, that such payments will be introduced for such applications and we must stand by the decision. It was very thoroughly debated, and I for one supported it. What I am saying here is that if we accept that principle, as we must do, we must support the principle that no one should be exempt from these charges, that the Government cannot exempt itself or the nationalised industries, which, under the planning Acts, are deemed to have planning permission and do not technically require it from the planning authority. I believe it is quite wrong that the Government should exempt itself. I think it does itself great damage by trying in effect to excuse itself from its own laws and what will be an unpopular process. It will be resented, however desirable I may think it is, and it will be seen as clobbering the private sector at the expense of the public sector, and that is not what this Government should be doing.

I want to quote from advice which was given by the Government itself, by the Department of the Environment. I am sure my noble friend is well aware of the advice. Circular 7/77 reads: Advice to county councils with regard to development by bodies entitled to Crown exemption under the provisions of the Town and Country Planning Acts: the Department of the Environment urge that Government development proposals should be processed in the same way as if they were a planning application, that similar publicity should be given to such proposals as would have been given to a planning application, and that the views of the county planning authority upon such proposals should be made known within the same timescale as that which applies to a planning application". So the Government itself is treating such applications as though they were planning applications. Therefore, I submit that the cause of charging for these is a very real one and should be supported.

Moreover, of course such proposals are normally on a scale which far transcends that of normal development. I gave examples of this at Committee stage and I shall not repeat them. They very much tend to be the larger planning applications, which cause a great deal of work and worry to all planning authorities. My amendment gives the Secretary of State power to make such charges generally if he thinks fit, and I am not suggesting what they should be. Of course, I suppose that, if they so wish, the Government can always reimburse the nationalised industries for such charges as may be levied. Perhaps it will be said that such charges will be relatively minute in comparison with the amount of money which most of our nationalised industries manage to lose in any one year, but that is not the subject of the debate. Some of them are very profitable and could well afford to pay the charges that should be levied. It may be said also that this is only public money circulating from one pocket to another. But in the context we have at the moment, with local authorities so often being accused of extravagance, I think that the true costs of such applications should lie where they fall, and I submit that this means that deemed consents should be treated in the same way as if they were applications for planning permission.

The second amendment is necessary because otherwise the opencast coal division of the National Coal Board, which has its own special Act of 1958, could be exempt from the net in which I wish to include it. The Secretary of State for Energy in this case gives himself planning permission after such consultations. These consultations are quite different from the normal form, and I leave it to your Lordships' imagination to picture the violent reactions to such opencast operations now and in the past. I have suffered perhaps more than most from this in my own case and I know a great deal about it. Lest it be thought that I am declaring a special interest, it might be of interest to your Lordships to know that next week the Warwickshire County Council will be considering, and I believe is recommended to oppose, a proposal that some 90 hectares of land in a built up area should be opencast mined for coal. So your Lordships can see the seriousness of this. Even if it is a profitable operation for the country as a whole, the point is that the opencast coal operations should bear the same charge for planning applications as if they needed planning permission under the planning Acts.

It cannot be right that there should be one law for the private sector and another for the public sector. The public sector cannot opt out of charges. As I have said, we have accepted the principle of charges. I am not against nationalised industries and I am not against procedures where planning permission is deemed to be given by the State. I merely wish to be fair between both sectors and I wish to push this amendment as hard as I can. I beg to move.


My Lords, the amendment proposed is to insert the words on the Marshalled List, subject to the letter (j) being substituted for the letter (i) in the third line.


My Lords, I must rise to support my noble friend Lord Ridley in pressing this amendment most vigorously upon my noble friend, and I hope my noble friend will accept it. The House did hear the argument he raised against it at the earlier stage and will be in a position to judge what weight it had. I think, if I may say so, it was a respectable argument, but it has to be set against the much wider considerations of public fairness; my noble friend has already elaborated this and I do not need to say much more in support of it.

The situation we face is that the Government are seeking to introduce planning fees—and they are controversial enough, though I support them—in order to reduce public expenditure. Without this amendment we shall introduce planning fees in order to reduce public expenditure and then exempt all the public authorities from having to pay them. That really is an absurd situation, and the resentment that it will cause when planning fees are introduced generally in the private sector of industry and among individuals certainly cannot be contemplated. We shall have individual householders going along to obtain a planning permission for some extension or alteration to their own property and having to pay a fee for that. We shall have the National Coal Board or the Atomic Energy Authority or the Public Services Agency going along and making application for planning permission which will involve the local authority concerned in a public local inquiry perhaps lasting for three months, and being exempted from paying any fees at all. That is a perfectly intolerable situation and I cannot conceive that this Government would want to support it for one moment.


My Lords, as my noble friend Lord Ridley knows, I have differed from him and from my noble friend Lord Bellwin throughout on this question of introducing charges for planning applications. I still think that they are wrong in principle and harmful in practice. But, your Lordships have decided otherwise and we must, as my noble friend Lord Ridley has said, therefore, accept them. I wholly join with him, on that basis, in being very critical of the Government's attempt to exempt themselves and the nationalised industries from this imposition.

If these charges are right then surely they must be right for everybody. Surely this Government, of all governments, should not be seen to discriminate against private enterprises and in favour of public bodies. I think that my noble friend Lord Ridley is logical and right in moving this amendment and I shall listen with great interest to my noble friend Lord Bellwin's attempt to justify what the Government propose. I know that he can justify most things—he has shown that throughout the progress of this Bill—but he will have to be rather on his mettle as regards this matter.


My Lords, I am so glad that I gave way to the noble Lord, Lord Boyd-Carpenter, because for the very first time, as a newcomer to this House—but as one who has so much enjoyed participating with your Lordships' courtesy in its debates—I am able to agree with what the noble Lord has said.


My Lords, I must be wrong!


My Lords, I shall wait to see, if the House divides, where the noble Lord casts his vote. I do not want to repeat what the noble Lord has said in much more eloquent and clear terms than I could employ. But, it so happened that from these Benches I too opposed the whole idea of planning fees and I was able on behalf of my noble friends to move an amendment at least to exempt certain classes of planning fees from being charged and the Government were good enough to accept that amendment.

We, on this side of the House, would not wish in any way at all to claim that it was either equitable or fair that once the idea of planning fees is accepted—as it would appear to be accepted by this House and will now be written into the Act—nationalised industries should be exempt. I hope that that is an exhibition of the fairness and equity with which all my noble friends are clothed. It will be interesting, as the noble Lord, Lord Boyd-Carpenter, has said, to listen to a Conservative Minister oppose an Opposition Front Bench on the issue of nationalised industries being exempt, when the Opposition Front Bench is saying that, in its view, they should not be.


My Lords, I should like to say from these Benches that we very much support the amendment moved by the noble Viscount, Lord Ridley. We do not mind on these Benches—perhaps because we have fairly few friends—where we find our friends, whether they be the noble Lord, Lord Boyd-Carpenter or the noble Lord, Lord Mishcon.

I must say, as other noble Lords have said, that I am very strongly opposed in principle to the application of charges for planning consents. But, having said that—and we have debated the matter at length and I have divided your Lordships' House on part of it myself—once we have reluctantly accepted the principle, it seems to me absolutely wrong that the nationalised industries and deemed planning consents should be excepted.

There is already a great deal of resentment about local authorities giving themselves planning consents. It causes and has caused over the years a very great deal of resentment in all local authority areas where the private developer has to put in a detailed planning application and the matter is debated and discussed, and the local authority very often puts through a whole estate of houses without having any discussion or debate on the deemed basis. If we now extend this and exempt them from charges in addition, I think that it will cause, rightfully, as several noble Lords have said, a great cleat of cynicism and a great deal of resentment.

Put very simply, what is sauce for the goose should be sauce for the gander. I hope, if the noble Lord the Minister is not willing immediately to accept this amendment—and I hope he will—that the matter will be taken to a Division, because I think that your Lordships feel, in a majority, very strongly against this exemption.


My Lords, I should like to ask one question. I am entirely in favour of every word that my noble friend Lord Boyd-Carpenter has said. I was against the proposal to charge for planning authority. However, in this amendment, I note that my noble friend Lord Ridley talks about England and Wales. Do I take it that we in Scotland are in the happy position of escaping from this, or are the nationalised industries to get away scot-free in Scotland, as they are in England and Wales? If so, I am dead against it. Unfortunately the clause about charging for planning has been accepted and is in the Bill, but I entirely agree with my noble friend Lord Ridley that the nationalised industries should be included. So, I should like to know whether this amendment and the whole principle apply to Scotland as well as to England and Wales. If that is so, it only makes me feel more against it than I was previously.


My Lords, the noble Lord, Lord Bellwin, drew the distinction in Committee between consultations and the power of deciding planning applications. I should like to point out that in this case there would be a power of deciding if the applicant was not a Government body. Therefore, this is not consultations in the true sense; it is an alternative to the planning application.


My Lords, it seems as if I really need to emulate Houdini; but I think that I can do just that. Let me say at once that I really do not know what this is all about. I do not know why there is all this major concern. Let me make it absolutely clear—and I sincerely hope that this will assuage the major concern of my noble friends, and indeed of noble Lords opposite—that, in fact, with three exceptions to which I shall refer in a moment, all nationalised industries make planning applications and will pay charges for so doing. That surely is the matter which is causing most concern.

The three that do not are the following: first, the opencast coalmines, which are dealt with under special legislation—I do not have the details of it, but no doubt I could get it fairly quickly—and the other two are the CEGB transmission lines and power stations which, under Section 40 of the Town and Country Planning Act 1971, which I have here, have a special release entirely outside this Bill. Furthermore, the amendment would not bring Crown development within charges, because Crown development is already outside planning legislation as a whole. I shall in a moment give the other reasons why we take this view, but I must say that I admire my noble friend's persistence in pressing this matter.

The one point which seems to be troubling most of your Lordships is the question of fairness. I say at once that I absolutely concur in this. How could I say otherwise? The noble Lord, Lord Mishcon, is quite right. How could I say otherwise than that, of course it would, in my opinion, be unjust. But I am happy to say that the nationalised industries do come within this sphere, with the three exceptions which I have mentioned, all of which have special circumstances and situations. They cannot in any way be considered in the generality of nationalised industries.

The amendments propose a widening of the scope of charging beyond the area of planning applications and related approvals, and into certain consultations undertaken as part of the process of obtaining approval for developments by statutory undertakers. I have just mentioned what those are. It has been argued that from the local authorities' point of view, dealing with consultations about "deemed consents" is a task which is equivalent to considering and determining a planning application. From that it is argued that it should be possible to recover some of the administrative cost from charges. Nevertheless, I think that we should preserve the distinction here between consultations and the power of deciding planning applications. There is a wide range of matters on which local authorities are consulted in one way or another, even in the field of planning. For example, we are setting up new arrangements for districts to consult counties about planning applications under the provisions of Clause 86. To charge for consultations raises a new principle which goes beyond the proposal that we have put forward in Clause 87.

I notice in particular that the amendment provides only for fees to be paid to counties. But, by the extension of that principle, I would have expected fees to be paid to districts where they, too, were consulted in these cases. Where local authorities consult other bodies—if you like, water authorities or parish councils—should they not also receive a proportion of the fee? It becomes apparent very quickly that if we are to move far in this direction we shall lose sight of the purpose of these charges, which is to offset the public expenditure involved in development control and to shift some of the burden of financing it away from the ratepayer and taxpayer.

Therefore, in charging for consultations we risk creating an expensive and complex bureaucratic procedure for passing payments, or proportions of payments between bodies inside the public sector. I would not wish it to appear that the Government are unsympathetic to the thought behind this amendment. I said so, I think at Committee stage or Report stage—it all seems so long ago. For who would not be sympathetic towards the simplistic argument of the equity of charges applying as much to nationalised bodies as to everybody else? I go with that 100 per cent. But I hope that I have been able to show that it applies to all the nationalised industries, with the three specific exceptions which I have mentioned, and that we are not now seeking to exclude them in the Bill but that, for whatever reasons were decided in the past, they are already excluded by virtue of other legislation. I hope that my noble friend will be willing to accept that explanation and perhaps not press his amendment.


My Lords, before the noble Lord the Minister sits down, would he be good enough to inform the House of the clause in the Bill which exempts the three classes to which he refers?


My Lords, I would refer to Section 40 at page 37 of the Town and Country Planning Act 1971. That applies to transmission lines and power stations. The opencast coal mines have special legislation and I shall get that information in a few moments. If I could read the writing before me I would give it to noble Lords now.


My Lords, I am sure that the noble Lord will be as helpful as he always is. If I may be very frank with him, the difficulty I find myself in—and other Members of your Lordships' House may be in the same difficulty—is that we are dealing with a provision which enacts that planning fees may be charged by order of the Minister, and we went into that very fully in a previous debate in your Lordships' House. What I cannot find in this enabling, empowering clause is any exception which relates back to the Town and Country Planning Act, or anything else. I am sure that it is my fault, and I merely rise to seek clarification and not because I am trying to make a clever point.


My Lords, my noble and learned friend Lord Mackay, who so often comes to my help, assures me that you do not have to apply for planning consent. I have before me a piece of paper which says that, in fact, Section 2 of the Opencast Coal Act 1958 covers the point about opencast coal mining. The point I make is that, with the three exceptions that I have mentioned, for the specific reason I have given, nothing in what we propose in the Bill sets out to exclude any nationalised bodies. They all fall within this Bill; they will all have to make applications and pay charges.

Viscount RIDLEY

My Lords, I seem to have caused a positive flurry of pieces of paper from behind my noble friend, and for that I apologise; I have never seen so much paper change hands in such a short time. I am afraid that I cannot reply to my noble friend Lady Elliot of Harwood about Scotland; I would never dare to speak in her presence about Scotland. I am talking about England and Wales, and I have no doubt that, as always, Scotland will follow where we lead.

I do not accept the Minister's argument. No doubt he is much better acquainted with some of the details of the Bill than I am, but my amendment would make it clear beyond doubt that all nationalised industries would be included. I refer your Lordships to Schedule 19 where it refers to Government departments in

paragraph (d), nationalised industries, roughly speaking, in paragraph (h), and statutory undertakers in paragraph (j). We are talking about: … authorisation which, if granted, would result in a deemed planning consent". I believe that the amendment is unacceptable to the Government. I believe that it is right that I should press it, for the reasons that have been advanced by so many noble Lords on all sides of the House, and I ask your Lordships to accept it.

6.7 p.m.

On Question, Whether the said amendment (No. 44) shall be agreed to?

Their Lordships divided: Contents, 89; Not-Contents, 96.

Alport, L. Gainsborough, E. Phillips, B.
Amherst, E. Galpern, L. Pitt of Hampstead, L.
Ardwick, L. Gladwyn, L. Ponsonby of Shulbrede, L.
Balogh, L. Glenamara, L. Raglan, L.
Banks, L. Gordon-Walker, L. Ridley, V. [Teller.]
Beswick, L. Greenwood of Rossendale, L. Rochester, L.
Birk, B. Hale, L. Ross of Marnock, L.
Blease, L. Hampton, L. Sandford, L.
Bledisloe, V. Henley, L. Savile, L.
Blyton, L. Hill of Luton, L. Sempill, Ly.
Boston of Faversham, L. Houghton of Sowerby, L. Shannon, E.
Bradford, E. Hughes, L. Simon, V.
Bridgeman, V. Irving of Dartford, L. Stamp, L.
Brooks of Tremorfa, L. Jeger, B. Stanley of Alderley, L.
Bruce of Donington, L. Kaldor, L. Stedman, B.
Caithness, E. Kilbracken, L. Stewart of Alvechurch, B.
Chitnis, L. Kilmarnock, L. Stewart of Fulham, L.
Clifford of Chudleigh, L. Kirkhill, L. Stone, L.
Collison, L. Lloyd of Hampstead, L. Strabolgi, L.
Cooper of Stockton Heath, L. Lloyd of Kilgerran, L. Strauss, L.
Crowther-Hunt, L. McCluskey, L. Swinfen, L.
David, B. [Teller.] Mackie of Benshie, L. Taylor of Blackburn, L.
Davidson, V. McNair, L. Taylor of Mansfield, L.
Davies of Penrhys, L. Maelor, L. Underhill, L.
Denington, B. Melchett, L. Wade, L.
Diamond, L. Mishcon, L. Wallace of Coslany, L.
Digby, L. Monson, L. Wells-Pestell, L.
Elliot of Harwood, B. O'Brien of Lothbury, L. Whaddon, L.
Evans of Claughton, L. Paget of Northampton, L. Wigoder, L.
Fortescue, E. Peart, L.
Airey of Abingdon, B. Cockfield, L. Falkland, V.
Alexander of Tunis, E. Colwyn, L. Ferrers, E.
Avon, E. Craigton, L. Ferrier, L.
Bellwin, L. Croft, L. Fraser of Kilmorack, L.
Belstead, L. Cullen of Ashbourne, L. Gainford, L.
Bessborough, E. De Freyne, L. Gisborough, L.
Birdwood, L. Denham, L. [Teller.] Glenkinglas, L.
Boardman, L. Drumalbyn, L. Greenway, L.
Boyd-Carpenter, L. Dudley, E. Hailsham of Saint Marylebone L. (L. Chancellor.)
Brabazon of Tara, L. Dundee, E.
Brougham and Vaux, L. Eccles, V. Halifax, E.
Cairns, E. Elibank, L. Hanworth, V.
Campbell of Croy, L. Ellenborough, L. Harvington, L.
Cathcart, E. Elphinstone, L. Home of the Hirsel, L.
Chelwood, L. Faithfull, B. Hornsby-Smith, B.
Ilchester, E. Marley, L. Sandys, L.[Teller.]
Ironside, L. Middleton, L. Selkirk, E.
Kemsley, V. Monckton of Brenchley, V. Selsdon, L.
Kilmany, L. Monk Bretton, L. Skelmersdale, L.
Kimberley, E. Mottistone, L. Soames, L. (L. President.)
Kinnaird, L. Murton of Lindisfarne, L. Strathclyde, L.
Lauderdale, E. Northchurch, B. Strathcona and Mount Royal, L.
Lindsey and Abingdon, E. Nugent of Guildford, L. Strathspey, L.
Linlithgow, M. Nunburnholme, L. Swansea, L.
Liverpool, E. Onslow, E. Trefgarne, L.
Long, V. Orkney, E. Trenchard, V.
Lucas of Chilworth, L. Orr-Ewing, L. Trumpington, B.
Lyell, L. Pender, L. Vaux of Harrowden, L.
McAlpine of Moffat, L. Peterborough, Bp. Vickers, B.
Mackay of Clashfern, L. Rawlinson of Ewell, L. Vivian, L.
Macleod of Borve, B. St. Davids, V. Wynford, L.
Mansfield, E. St. Germans, E. Young, B.
Margadale, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.15 p.m.

Viscount RIDLEY had given notice of his intention to move Amendment No. 45: Page 82, line 15, at end insert—

  1. ("(b) to a County Planning Authority in England or Wales in respect of a consultation relating to an application made to the Secretary of State for Energy under the Opencast Coal Act 1958.").

The noble Viscount said: My Lords, I have already debated this. My noble friend said it was one of the few exemptions. In the circumstances I will not force a Division, but I hope very much that the points I have made will be taken into account in due course when planning authorities come into being.

Lord MISHCON moved Amendment No. 46: After Clause 87, insert the following new clause:

("Planning permission . The grant or refusal of planning permission shall be in writing signed on behalf of the appropriate local planning officer and any document purporting to grant or refuse planning permission which is so signed shall be conclusive evidence that such permission has been lawfully granted or referred as the case may be by the appropriate local planning authority.").

The noble Lord said: My Lords, your Lordships may remember that at Report stage on this Bill I moved the two amendments which are identical with those before your Lordships today, but I withdrew them in certain circumstances. With your Lordships' permission, I propose to carry on with the speed with which the Third Reading is being conducted by speaking to Amendments Nos. 46 and 47, if your Lordships will approve this, and then possibly taking them separately if in his reply the Minister finds that that is necessary. This is purely for the purpose of clarifying the law as it stands, first of all in regard to the validity of a planning permission and, secondly, the time from which the planning permission should run. At the moment the law is far from clear and it is the opportunity, which we ought not to miss, to see that the law is clarified and made certain in this Bill.

It can be appreciated that anyone receiving a planning permission, unless the matter of validity were made completely clear, would have to inquire whether before the permission was granted the authority that gave it had carried out the necessary consultations which are set out in this Bill; because it might be held subsequently that if those consultations had not been carried out the planning permission was invalid. That is an unhappy situation which your Lordships obviously would not wish to see; so Amendment No. 46 sets out clearly, I hope, the position of the validity of a planning permission and the fact that if it is signed in the appropriate way there is conclusive evidence that it has been granted properly. It has just been pointed out to me that there is a mis-type in the last line but one of Amendment No. 46; the word "referred" obviously should be "refused". I hope your Lordships will permit me so to amend the amendment.

When this was dealt with at the Report stage the Minister said, at column 318 of the Official Report of 28th October 1980: The Government appreciate the desirability of clarifying exactly what constitutes a decision on a planning application. The existing legisla- tion and decisions of the courts leave the position unclear. Our own proposals for clarifying the position had to be excluded from the Local Government, Planning and Land (No. 2) Bill for lack of space. The noble Lord "— which was a kindly reference to me— has put forward his own proposals, on lines different from the Government's, and I am grateful to him for his efforts in tackling this problem". Later, at column 319, the Minister said: … I accept that there are differences of opinion as to how the existing legislation should be clarified. I wonder whether, in view of what I have said, the noble Lord will feel able to withdraw these amendments so that all concerned can give more thought to the matter and bring forward some considered proposals on another occasion. I must tell him that I am not certain what I mean by 'on another occasion', in the sense whether or not we are referring to the last stage of the Bill or if it will be later. I suspect that it will be later. I hope that I have said enough to indicate that this is very much a technical matter, as we see it".

Then my last quotation is from what I said just before I withdrew the amendment, and the noble Minister did not dissent. This is at column 320: I should be the last person in the world to try to press these amendments on your Lordships if the Minister has said, as I understand he has said, that he realises the problem and that something has got to be done in the Bill itself to make these positions perfectly clear. In view of the elementary nature of the problem, if I may say so, I hope that this can be done by Third Reading. It does not seem to me to present so many difficulties. I can merely ask the Minister to do his best to do it by Third Reading; in any event, I am sure he will do it before the Bill leaves this House. In those circumstances I ask leave to withdraw this amendment…".

I referred then to the same situation applying to the next amendment, and that amendment is now Amendment No. 47. That deals with the effective date of a planning permission being indeed the date when the resolution is passed by the local authority, or under subordinate powers dealt with by the planning officer who has the delegated power to do it. The question, of course, as to whether appeal times and so on should date from the time of the making of the resolution to grant the permission, or indeed to refuse it, is a separate matter, and I imagine that the noble Minister may want to repeat what he said before, with which I do not quarrel at all: that time in respect of appeals and matters of that kind should indeed run from the date of the receipt of the planning permission by the applicant and not, obviously, from the date when the resolution is passed.

I apologise for bringing these matters again before the House, but the Government have recognised that the law is unclear on both these matters and have recognised the need for clarification. The clarification should be in this Bill, and as this is the last opportunity I may have of referring to the matter, I thought your Lordships would think it proper for me to bring the amendment back again, especially in view of the assuranceses given by the noble Minister at Report stage. I beg to move.

6.23 p.m.


My Lords, before my noble friend replies, may I put to the noble Lord, Lord Mishcon, a problem on both Amendment No. 46 and Amendment No. 47? On Amendment No. 46, I know of four cases where the question, "What and when was the planning permission" has been before the courts. In two of them the courts have held that the document which was purporting to grant the planning permission was completely invalid and void: in the one case because the officer had written exactly the opposite of what the committee had decided and had granted planning permission when they had refused it; and in the second case, which was the famous supermarket in South Wales, where the clerk of the district council purported to grant a planning permission when he had neither the authority of his district council nor of the county planning authority which actually ought to have been seized of the matter in the first place. In both events the courts overruled the apparent effect of the document, but they would not be able to do, I think, without great difficulty if the document was conclusive evidence.

The two other cases did not raise quite these matters but they would have been equally difficult, because in one which was in fact settled there was never a document which granted planning permission at all. There was a resolution of the committee which was followed by the issue of a refusal notice, and eventually the local authority decided that they would agree that planning permission had been granted, but for reasons that I have never understood they still refused to issue a document to that effect, and the planning permission is enshrined in the consent order in the High Court.

I do not know how the noble Lord, Lord Mishcon, thinks those situations fit into the concept of conclusive evidence because I, with respect, do not. On Amendment No. 47 the question I would briefly ask him under paragraph (b) is, what document is there in the world which rescinds a decision to grant, or indeed rescinds a decision to withdraw a planning permission? I know of no such thing within the Town and Country Planning Act—certainly not one that can be done by an officer under Section 101. I simply wonder what on earth the noble Lord is referring to.


My Lords, what an interesting and erudite intervention I have to deal with. I shall do my best knowing that something of what I say ought to make sense in view of the fact that the very specialist committee of the Law Society which sat on this matter, and indeed dealt with the provisions of this Bill, has put forward the very amendments which I have ventured to put before the House, as I told the House at Report stage. Having, therefore, endeavoured to shift any blame that there may be in a most cowardly fashion, may I endeavour to deal with both the points made by the noble Viscount.

In regard to the first point, I should have thought that the answer was that this merely refers to the validity of a permission in respect of the lawful granting of it. In other words, if indeed a local authority has granted it, and there is a permission, then it shall be deemed to have been lawfully granted without the recipient of this permission having to inquire whether the necessary consultations, for example, have taken place.

In the interesting and intriguing example which the noble Viscount gave the House where the authority had not granted it in fact and an officer had made a mistake, I would respectfully say, especially when you look at the second amendment, that the permission had in fact never been granted at all, and that the whole substratum of the case brought before the court was to the effect that the permission had never in fact been granted. I should have thought that that was the answer to that one, and that it was indeed dealt with by the use of the words "lawfully granted". As I said in the other case, it would not have been granted at all.

In answer to the point raised by the noble Viscount on Amendment No. 47, I am led to believe-I am not by any means coming before your Lordship as an expert in planning matters—that where there is in fact a rescision of a decision to grant, or withdraw, planning permission, this is in fact notified to the person who is interested by a document. All that this says is that if there is such a document then the date of it, or the effective date of it, is as set out in this amendment. I should have thought that there was not very much harm in the wording here, if indeed that is not so, because if there is no such document then the clause will not have that effect. I am sure that the noble Viscount will be able to sleep tonight on that assurance.


My Lords, your Lordships have listened to two very interesting amendments, and as they have been put forward with much skill by the noble Lord, Lord Mishcon, on two occasions now, and behind them stands the Law Society, I feel that they would be a matter of great interest to your Lordships. The noble Lord had just said that not much harm is to be attached to the words of the second amendment, but as we are going to deal with both amendments together perhaps I may be permitted to tackle them in like manner to the noble Lord, Lord Mishcon.

The noble Lord sets forward his case with the very laudable intent of clarifying the law. But for the intervention of my noble friend Lord Colville of Culross who would have thought that his case was anything other than highly satisfactory on the face of it? But, my Lords, we have very sound reason to doubt it. These amendments deal with the validity of planning decisions and their effective date, and during the debate on precisely similar amendments which were tabled by the noble Lord, Lord Mishcon, at Report stage, my noble friend Lord Bellwin pointed out that the Government accepted the need for clarification of what constitutes a decision on a planning application, and indeed that our own proposals on this particular matter were only excluded from this Bill because of lack of space.

During that debate my noble friend also pointed out, however, some of the problems we see coming from these amendments. The debate on that occasion was a rather technical legal one and I would not wish to take up your Lordships' time now in going through these difficulties to any great extent. On that occasion my noble friend Lord Bell-win asked the noble Lord, Lord Mishcon, whether he would withdraw his amendment to enable all concerned to give further thought to the matter so that proposals could be brought forward on another occasion, and the noble Lord quoted Hansard. But what he did not quote was the very last sentence of my noble friend's statement, and perhaps I may quote it here. It is once again, as he rightly said, from column 319 of the Official Report for Tuesday, 28th October. My noble friend's closing words were: I hope that I have said enough to indicate that this is very much at technical matter, as we see it.


I am sure the noble Minister will allow me to intervene, if only so that I shall be shown never to have tried to mislead the House. Indeed I quoted that sentence very clearly and read right to the end of that quotation, as he will see in tomorrow's Hansard if he looks at it.


My Lords, I must apologise both to the noble Lord, Lord Mishcon, and to the House. I did not hear that, and I must not have been listening. I believe that this amendment and its successor are both very much more technical in nature and very much more substantial in nature than your Lordships have perhaps been led to believe. This is not something that can be done within the timescale of this Bill. The Government's own proposals have had to be dropped because of lack of space, as I have said already, and because this subject bears only a peripheral relation to the provisions of this Bill. There are other interested parties, outside Government who should be given an opportunity to give their views. My Lords, the Government's own proposals have evoked considerable differences of opinion and I would ask the noble Lord, Lord Mishcon, therefore, to accept my assurances that we will look further into this matter in the light both of his proposals and of our different proposals, and would ask him to withdraw his amendment.


My Lords, I did receive an assurance at Report stage that this would have the immediate consideration, or the fairly immediate consideration, of the Government. That assurance has now been repeated. Although I would have hoped that something could have been done in the intervening period, I think it would be singularly ungracious of me not to withdraw the amendment in the circumstances; but I would plead with the Government that this is a very important matter, that it is essential that the law should be clear on these vital aspects of planning, and that I hope that all the consultations will therefore take place with the usual urgency which the Government attach to most matters.


My Lords, before the noble Lord withdraws his amendment, I should like to make one point clear. As we see it, we believe the first amendment goes much too far in making all documents valid on planning decisions, no matter what misdemeanour has taken place. My noble friend Lord Colville of Culross has indicated so clearly to your Lordships a misdemeanour which happened in a particular instance, and a second one. This lead to the decision; and also it conflicts with other provisions which courts would have to sort out. My Lords, I think there is a severe and much more serious matter to be considered here.


My Lords, the noble Minister has said nothing which leads me to alter what I previously said to your Lordships.

Amendment, by leave, withdrawn.

[Amendment No. 47 not moved.]

Clause 126 [Sums to be paid to the Secretary of State]:

6.34 p.m.

Lord MISHCON moved Amendment No. 48: Page 115, line 3, at end insert ("and shall have regard to the programme of planned development of the town.").

The noble Lord said: My Lords, may I refer your Lordships to Clause 126, again, because we move very fast and we are now dealing with the question of new towns and your Lordships will recall the quite fervent debate which took place both at Committee and Report stages on the powers that are given to the Minister to direct that payments shall be made by new towns, and the only limitation which is put upon that power is one that he shall consult. Your Lordships will remember that there were amendments brought forward to limit that power. They were brought forward at Committee stage, and it is rather essential that I remind your Lordships of what happened on that occasion.

At Committee stage, and after a very full debate from all parts of your Lordships' House, there was a very definite expression of concern about this unlimited power of the Minister, and as a result an amendment was put to your Lordships in Committee that there should be added to the words "before giving a direction "—I am quoting from the Bill:— Before giving a direction under this section the Secretary of State shall consult the corporation or, as the case may be, the Commission …". Your Lordships divided on this matter and the Division was carried against the Government—and thre were noble Lords participating in that vote in favour of this amendment, I repeat, from all parts of the House. This was the amendment: … and shall satisfy himself that such payment does not undermine the programme of planned development of the town and is consistent with the principles of sound financial management of his assets".

That amendment having been carried against the Government at Report stage, the Government sought to remove the amendment, and there was an expression of opinion—I think I am correctly paraphrasing some of the speeches that were made, again from all parts of the House—and some concern that, on consideration, perhaps the power of the Minister was being limited too much and too vaguely if one considered the fact that he had to take into account the principles of sound financial management of his assets. I can remember speeches being made from the Benches opposite, I believe I am right in saying from the Cross-Benches, too, which intimated that if only there had been a watering-down of this limitation, then there would be very much in the minds of your Lordships the view that there should be a limitation, but that this was too wide, this was too strong, this was too general, this was too vague.

So I come back, if I may, appealing to all sections of the House, and saying very deliberately that there is not a scrap of politics in this at all. I say that because the politics, if you like, was in the point that the Minister should not be able to direct new towns in this way. But once you concede, as one has to concede because of the vote of the House, that the Minister should be able to direct, would your Lordships really think that the functions of this House as a revising Chamber, a thoughtful Chamber, were being carried out if there was no limitation at all, even in the sense that the Minister had to take into account what were the plans of the new towns for the future?

This is really what this amendment means: the present plans and the future plans, must he take them into account? It does not mean to say that if the new towns put forward a case he has got to accept it. It merely says he has got to take it into account, but he cannot be ruthless in his demand that the new town pays a certain sum of money. Having cut in two the amendment that was first passed in Committee and having removed the vague element, and therefore the argument that was against it on Report, I hope your Lordships will consider it right that the amendment as it stands should be carried.


My Lords, as the noble Lord, Lord Mishcon, made clear, the amendment returns to ground which we debated exhaustively both in Committee and on Report and on which we divided. Throughout the debates the noble Lord has expressed fears about the lack of a direct precedent for the wording of this clause. He has wanted to see the powers of the Secretary of State limited in some way by the wording of the clause. I think his latest attempt is an improvement on the previous one, since it would make the decisions of the Secretary of State less susceptible to delay through challenge in the courts. However, I still cannot advise the House to accept the amendment, and I will explain why.

When we last debated this point I explained that we could not look at the powers which the clause would confer in isolation. Whatever the Bill says, the application of the powers will have to take account of the many factors applying in the real world. As I said on Report, in the real world any Secretary of State would have to take into account the two factors that were mentioned in the previous amendment to the clause. These were the planned development of the town and the principles of sound financial management. The noble Lord's amendment is therefore unnecessary since the Secretary of State will be bound, in the nature of things, to have regard to the planned development. But those are not the only factors that would have to be taken into account. Quite apart from any factors of national policy, the needs of the planned development of other new towns into which the assets realised might be ploughed back would be very relevant.

The amendment therefore seems to me to single out one of the many factors to be taken into account and enshrine it in the Bill, thus giving it undue prominence. If it is a question of comparing the need of a nearly completed new town for some desirable, but not essential, element to round off its development with the need of a third-generation new town still in the full flood of development for some essential element of infrastructure, I know to which factor I would want to give more weight. Yet with the noble Lord's amendment it would be the needs of the nearly-completed town to which the statute would direct the Secretary of State to pay attention.

Furthermore—and I make this point in no sense as a carping criticism—the amendment is not clear. It would direct the Secretary of State to pay attention to the "planned development of the town". But the Commission for the New Towns is already responsible for seven towns. The Bill would leave it to the commission to decide in which of its seven towns it should realise any assets, subject of course to any direction by the Secretary of State, should be in some rare case see it necessary to give one. This would make it difficult to see how the Secretary of State should go about complying with the literal wording of the amendment.

I revert to the basic question here. Massive public resources, over £3,250 million are tied up in the new towns. We believe there is a case for redirecting some of these resources from the towns which have completed all or part of their development to other parts of the country where public investment is needed. As I have explained, in this year and the last, this is to the other new towns—some £700 million—and the needs of the other new towns are a factor to which any Government must pay attention. But doing so, we enable investment to continue without new public borrowing. We thus simultaneously provide the resources for the new towns programme and keep down the public sector borrowing requirement. To do that requires judgments to be made. Those judgments are inevitably for central Government who have to take into account a wide range of factors. We do not think we should single out just one of these factors to be written into the Bill. I admire, as I always do, the assiduity and clarity with which the noble Lord presents his case, but within the context of the overall responsibility which falls to Government, we cannot accept the amendment.


My Lords, on Report I referred to Clause 99, dealing with the disposal of the land by public bodies, and I referred to the fact that the Secretary of State must be satisfied that the land can be disposed of without serious detriment to the performance of their functions or the carrying on of their undertakings. However, when I look at Schedule 16, which lists the public bodies concerned, I find that the New Towns Commission is included as is the corporation of a new town. Why, therefore, are qualifications laid down as to conditions which the Minister must take into consideration under Part X dealing with the disposal of public land, yet the Government resist laying down a condition in this clause relating to new towns themselves?


My Lords, I wish to give the strongest support possible to the amendment, which I am sure would be extremely helpful to the Secretary of State as well as to the New Towns Commission. It would mean the Minister having regard to these matters in his consultations, and I must say how much I welcome the fact that there are to be consultations because, whereas I understand that to date in Scotland and Wales there have been consultations, to the best of my knowledge in England the Secretary of State has not, directly through his department, had direct consultation with the new towns, and that is why some of the present damage has been occurring. I hope the words "planned development" do not just mean the physical development; they must also mean the financial planning of the town, because the two go hand in hand. It is surely impossible to do the physical planning without considering the financial aspects of it.

New town corporations have been very conscious that the nation has invested the millions of pounds to which the Minister referred. It is therefore vital that they should have regard to the financial implications of all they do so that in the end, when the towns are complete, they are a sound investment for the nation. Indeed, I assure the House that if they are allowed to go on without damage, they will prove not only socially wonderful investments for Britain but sound and profitable ones. But, as I say, that will happen only if they are not damaged in the meantime, and they are in great danger of being damaged now by being required to dispose of assets which are not ready for disposal. They will be undersold when, if they could be held for perhaps three of four years—for various reasons and each project and asset one considers has different reasons for selling now or delaying a year or longer—they would be profitable. After all, these are business transactions and the nation and the Government should be looking at them, as the corporations and the commission would wish to look at them, with a view to getting the best possible return.

Therefore, I am exceedingly glad that there are to be consultations. I take it that that means that there will be direct consultations with the corporations when the corporations could put to the Secretary of State all the facts regarding such points as perhaps not finding quite so much money one year and doing better for the nation and for the Government by having a postponement for a year; and so on. In those circumstances, the whole financial outcome, in which the Government are interested—and properly interested—would be very much better. The words of the amendment would, I believe, strengthen the Bill, and I would beg the House to give them very earnest consideration and indeed support them.


My Lords, I should like to have a very quick word, since I recall that the noble Baroness. Lady Denington, was not present when we discussed this matter at Report stage. I know the noble Baroness's interest in this matter and so I should like very briefly to say again something that I said at that time, and which I strongly believe. I said that I felt that this particular case was as strong as most, if not all, cases about which I had spoken in your Lordships' House. It is about how we deal with national resources. There must be a point in time when a Government putting hundreds of millions of pounds a year into any sector—and here we are talking about new towns, which we support—must ask, can we afford to do this, and if we must do it, where do we get the money from? If there is a possibility of taking assets from those new towns that have been there for some time putting the assets into liquid form and then redeploying them to the benefit of new towns—as has been the case in the last two years—I see nothing wrong in doing that. Furthermore, I think it absolutely vital that sooner or later we accept the reality that there is only so much money available. Redeploying money in this way puts it to the best use without forever printing new money. I believe passionately in the case for what we are doing, and I am sure that, if we divide on this issue, my noble friends will fully support me.

Baroness STEDMAN

My Lords, once or twice from the Dispatch Box opposite the noble Lord has reiterated his personal commitment to new towns, and we do not question that at all. He has also reminded us of the hundreds of millions of pounds that have been ploughed into new towns. We take that point as well, and we also look on the other side and see the benefits that the country has had from the new towns. I accept that the noble Lord would like to see new towns continued, and I also accept that he would like to see some, perhaps a major part, of the money that is coming from the sale of new town assets ploughed back into the Mark 2 and Mark 3 new towns, so that we can have early completion of them and so, as my noble friend Lady Denington has said, we can have a reasonable portfolio of assets that will be worth considerably more as the years go by and the assets mature.

But we have never ever had more than assurances that some money will go in. What we really want to know is that the Government are firm in their intention, that the money derived from the sale of new town assets, or even only a large proportion of it, will be ploughed back into other new towns so that they can be completed and can reap the harvest that they have sown.

This is the wrong time to ask new towns to put a large proportion of their commercial and industrial assets on to the market. The new towns know that they will have to sell; those people who want to buy will know that they have to sell, and therefore the new towns will not realise a proper sum for the assets that they are selling. They will not raise as much money as the Secretary of State had hoped for, or had demanded that they should raise. These assets ought to be left alone to mature. As the years go by they will continue to be worth considerably more.

New towns, in particular Mark 2 and Mark 3 new towns, cannot meet the arbitrary demands of the Secretary of State and at the same time maintain not only their solvency, but also their means of reinvesting and completing. In the other place one of the noble Lord's colleagues said that the money could be used for kidney machines and other things; we have to sort out our priorities. Those of us who are concerned with new towns have new towns and their completion as our priority. We accept in good faith what the noble Lord says—that he would like to see the money ploughed back into early completion of the new towns—but that is not what the Bill says. That is not what was ever said in the other place by any of his colleagues. The amendment would provide a small insurance, as it were, so that the Secretary of State would have some regard to the programme of planned development of the new town before asking it to dispose of some of its assets. That is all we are asking for at this time.


My Lords, may I say very quickly that this question still comes back to the basic principle. The Government have shown their intentions in that in the last two years they have ploughed £700 million into the new towns. I think that that is great evidence of intent. But if one says let the assets mature in the existing new towns—and that is what the noble Baroness said—where is the money to come from in the future? There is not a bottomless pit. When we are talking of this kind of money it is clear that someone will have to make a decision somewhere down the line as to where the money comes from. We cannot go on forever simply saying that we shall find it somewhere. This is my very point: those who are most keen to see the development of the new generation of new towns ought to be encouraged by the fact that the Government have said, "Let's raise money this way". Of course I cannot guarantee what will happen to all the money. Clearly no Government could say what they will do with all the amounts of money in the years to come. Who knows what the priorities will be. But that our intentions are honourable (if I may put it that way), in that we have a commitment to the new generation of new towns is, I believe, unquestioned. In so far as we can afford, one hopes, to use all the money, I am assuming that we shall probably want to, but no one can give guarantees. To that extent I cannot help further than I have done.

6.57 p.m.


My Lords, I make a last appeal for my amendment. I do so by trying to bring back the House not to the speeches made in the Chamber, but to the actual wording of the Bill. It is a pedestrian remark not really worthy of your Lordships' intelligence to say that this Bill is to be an Act of Parliament that will be binding not only on a Conservative Government, with their present Ministers but also on any Government until the Act is either amended or repealed. I say with all due deference that unless speeches about the intentions, policies and priorities of a Minister are translated into an Act, your Lordships will not have carried out your duties as legislators.

It so happens, as we all know, that the present Secretary of State for the Environment is a very quiet, studious, introspective individual. But who knows? One day there might be a Secretary of State for the Environment who is flamboyant, who likes getting his own way, who has very definite ideas of his own as to where he can gather money from local government and put it into the general exchequer. I know that at present your Lordships cannot conceive of there being such a complete contrast with the present Secretary of State for the Environment, whom we all so much adore.

It is for that reason that I bring your Lordships back to the wording of the Bill as it now stands. I repeat that this Bill is to become an Act that will be binding on any Government. It provides that without having to come back to Parliament at all, the Secretary of State can direct a new town to pay up an unspecified, unlimited sum. I shall not again go into the whole question of why it is wrong for this power to be so unlimited, so unqualified. I have been into it before and your Lordships will be bored with me even more than usual if I repeat my arguments. All we are saying in the amendment is that when the Secretary of State exercises what some of your Lordships might regard as this dictatorial power, then at least, after he has consulted, he should have regard to the planned development of the town from which he is exacting the money. That is all that is asked. He has not got to be convinced; he has got to "have regard" to it.

When the noble Lord the Minister says, "Ah!, yes, but there are other things, no doubt, that he would have

regard to", I have no doubt your Lordships will agree with him. Of course there will be other considerations. They cannot all be put into the Bill; but you can put into the Bill the very minimum consideration that he ought to have—and I underline the word "consideration"—namely, that before exacting a payment which must be made he has regard to the planned development of the town from which he is taking it, and will have regard to the fact that this may destroy something which is very good and something for which people have worked and aspired. If he decides to destroy it, so be it; that is his right. But at least let him have regard to this programme.

I may be disappointed in the Division which results, but I cannot conceive of anyone who has a proper constitutional belief in the limitation of the power of a Minister, and certainly I cannot conceive anybody who has the interests of new towns really at heart, voting against this amendment. I may prove to be disappointed—it will not be the first time—but I live in hopes.

7.1 p.m.

On Question, Whether the said amendment (No. 48) shall be agreed to?

Their Lordships divided: Contents, 58; Not-Contents, 104.

Alport, L. Greenwood of Rossendale, L. Phillips, B.
Amherst, E. Hale, L. Pitt of Hampstead, L.
Ardwick, L. Hampton, L. Ponsonby of Shulbrede, L. [Teller.]
Balogh, L. Hanworth, V.
Bernstein, L. Hatch of Lusby, L. Rochester, L.
Beswick, L. Houghton of Sowerby, L. Ross of Marnock, L.
Blease, L. Irving of Dartford, L. Segal, L.
Brooks of Tremorfa, L. Jeger, B. Simon, V.
Bruce of Donington, L. Kaldor, L. Stedman, B.
Byers, L. Kilmarnock, L. Stewart of Alvechurch, B.
Chitnis, L. Kirkhill, L. Stewart of Fulham, L.
Collison, L. Lee of Newton, L. Stone, L.
David, B. Llewelyn-Davies of Hastoe, B. Strabolgi, L.
Denington, B. Lloyd of Kilgerran, L. Strauss, L.
Diamond, L. Lockwood, B. Taylor of Mansfield, L.
Evans of Claughton, L. McNair, L. Underhill, L.
Fisher of Rednal, B. Maelor, L. Wallace of Coslany, L. [Teller].
Fulton, L. Mishcon, L. Wells-Pestell, L.
Galpern, L. Noel-Baker, L. Whaddon, L.
Gosford, E' Peart, L.
Airey of Abingdon, B. Belstead, L. Bradford, E.
Alexander of Tunis, E. Bessborough, E. Bridgeman, V.
Auckland, L. Boardman, L. Brougham and Vaux, L.
Avon, E. Boyd-Carpenter, L. Cairns, E.
Bellwin, L. Brabazon of Tara, L. Caithness, E.
Cathcart, E. Harvington, L. Nunburnholme, L.
Chelwood, L. Henley, L. O'Neill of the Maine, L.
Clifford of Chudleigh, L. Hornsby-Smith, B. Onslow, E.
Colwyn, L. Hylton-Foster, B. Orkney, E.
Craigavon, V. Ironside, L. Pender, L.
Croft, L. Kemsley, V. Rawlinson of Ewell, L.
Cullen of Ashbourne, L. Killearn, L. Ridley, V.
De Freyne, L. Kilmany, L. St. Germans, E.
Denham, L. Kimberley, E. Sandford, L.
Digby, L. Kinnaird, L. Sandys, L. [Teller.]
Drumalbyn, L. Lauderdale, E. Savile, L.
Dundee, E. Lindsey and Abingdon, E. Selkirk, E.
Elibank, L. Linlithgow, M. Selsdon, L.
Ellenborough, L. Liverpool, E. Sempill, Ly.
Elliot of Harwood, B. Long, V. Soames, L. (L. President.)
Elphinstone, L. Lucas of Chilworth, L. Stamp, L.
Faithfull, B. Lyell, L. Stanley of Alderley, L.
Falkland, V. Mackay of Clashfern, L. Strathclyde, L.
Ferrers, E. Macleod of Borve, B. Strathcona and Mount Royal, L.
Ferrier, L. Mansfield, E. Swansea, L.
Fortescue, E. Margadale, L. Swinfen, L.
Fraser of Kilmorack, L. Marley, L. Trefgarne, L. [Teller.]
Gainford, L. Marshall of Leeds, L. Trenchard, V.
Gainsborough, E. Middleton, L. Trumpington, B.
Gisborough, L. Monckton of Brenchley, V. Vaux of Harrowden, L.
Glenkinglas, L. Monk Bretton, L. Vickers, B.
Gowrie, E. Mottistone, L. Vivian, L.
Greenway, L. Murton of Lindisfarne, L. Wynford, L.
Grimthorpe, L. Northchurch, B. Young, B.
Hailsham of Saint Marylebone, L. (L. Chancellor.) Nugent of Guildford, L.

On Question, amendment agreed to.


My Lords, I think this is probably the right moment at which we should adjourn for a certain time. I beg to move that the House do now adjourn during pleasure until 8 o'clock.

[The Sitting was suspended from 7.10 to 8 p.m.]

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