AMENDMENT OF TRANSPORT (LONDON) ACT 1969

HL Deb 28 October 1980 vol 414 cc215-302

10. The following subsections shall be inserted after section 11(2) of the Transport (London) Act 1969 (which among other things requires the London Transport Executive to submit to the Greater London Council and obtain the Council's approval of any proposal for expenditure by the Executive or any subsidiary of theirs which involves a substantial outlay on capital account):— (2A) Any proposal by the Executive or any subsidiary of theirs to acquire—

1. (a) an interest in or right over land, other than a freehold interest, where the interest or right confers a right to occupy the land; or
2. (b) an interest in or right over goods other than the property in them,

shall be treated for the purposes of subsection (2)(c) above as being a proposal involving an outlay on capital account.

(2B) In subsection (2A) above "freehold interest" means the fee simple absolute in possession (subject to any existing rights other than rights under a mortgage or charge to secure the payment of money) and "property" (in relation to goods) means the general property in them and not merely a special property.".").

The noble Lord said: My Lords, may I draw attention to some printing errors in connection with this amendment, and in doing so may I thank my noble friend Lord Morris for alerting me to them? In paragraph 1 it should read: The provisions of Schedule 2 to the London Government Act 1963 …"; in paragraph 5(1C) it should read: The appropriate deduction is a deduction of the lesser of the following amounts …"; and paragraph 6 should read: The following paragraph shall be substituted for sub-paragraph (5)(a) of that paragraph".

My Lords, the purpose of these amendments is to ensure that the capital expenditure of the GLC is properly integrated within the controls of Part VIII of the Bill over prescribed expenditure, and also to secure that capital expenditure by the London Transport Executive will be treated as if it had been carried out by the GLC, and controlled accordingly. These new amendments introduce a new schedule to replace the present Schedule 12. The new version incorporates several technical amendments to its predecessor. These are intended to clarify the drafting of the schedule in so far as it relates to the way in which prescribed expenditure and lending by the GLC are to be controlled under the annual Money Bill procedure in future.

Apart from these drafting changes, the new schedule makes provision for capital expenditure by the London Transport Executive to be controlled in much the same way as expenditure by ally of the passenger transport executives will be controlled in future. The principle that we have followed in preparing these amendments is that arrangements for the control of expenditure by the GLC and the London Transport Executive should reflect as closely as possible the arrangements which will apply to expenditure by comparable authorities outside London by virtue of Part VIII and Schedule 11 to the Bill. I beg to move the amendment as printed with the minor amendments that I have mentioned.

Lord GAINFORD

My Lords, may I make a small comment? First, I must inform my noble friend the Minister that, in the event of this amendment being accepted, I shall not be moving Amendment No. 117B. Secondly, could he say a little more to the encouragement of the officers of the GLC, who, acknowledging the fact that everything had to be done rather hurriedly, have been rather alarmed about the lack of consultation and certain inadequacies and drafting inconsistencies which have been found, and whether they are being corrected?

Lord BELLWIN

My Lords, I thought I had spelt out that these were printing errors, and hence my having taken the first opportunity, and indeed the appropriate opportunity, to put them right. I do not know that I can add more for my noble friend's benefit on this point.

On Question, amendment agreed to.

Clause 68 [Expenditure which authorities may make]:

Lord MISHCON moved Amendment No. 99: Page 60, line 31, leave out ("for each year") and insert ("for a period of 3 years. The Minister may subsequently vary the allocations made for the second and third years by an amount but may not reduce the provisional allocations made for the second and third years by more than 20 per cent.").

The noble Lord said: My Lords, Members of this House may remember—those of them who were present at the Committee stage—that a plea was made by those very familiar with local government, and those not so familiar who could well understand the point, that now that the Government were fixing capital expenditure for local authorities it was completely inappropriate in regard to their programming that this should be done on the basis, as the Bill now says, of each year. The point was well made on all sides at the Committee stage that local authorities, especially in regard to substantial projects, have of necessity to plan at the very minimum over a period of three years, and that it is completely hopeless in regard to their provisions for manpower and for finance that there should be this lack of flexibility and lack of knowledge of what their capital resources will he. Therefore, we moved an amendment which was somewhat similar in terms to this one, but was more ambitious in the sense that a figure of 20 per cent. was mentioned instead of the 10 per cent.

At this Report stage I ask that this matter be carefully looked at; and I would hope that the noble Lord the Minister would find it appropriate, on the further consideration which I am sure he has given to this matter, to allow local authorities, in view of the provisions in regard to capital, to have this amount of certainty spread, as I have said it must be, over a minimum period of three years in regard to their capital projects.

I would add only this point. I remember that the noble Lord the Minister indicated last time that Cabinets are in the habit of fixing capital provision year by year, and that the Chancellor has this weighty task upon his shoulders. It may very well be that that is so, but your Lordships may feel that some exception must be made in regard to local authorities now that these new provisions are coming in and they are, as I say, being allocated these annual sums—not by way of a firmly fixed amount being put in the Chancellor's Budget, as it were, and being approved by the Cabinet on a fixed and certain basis; but at least so that an indication can be given to the local authorities that they will, within certain limits dependent upon national conditions, be able to make their arrangements based on capital provision over a minimum period of three years, as is suggested in this amendment. I beg to move.

Lord EVANS of CLAUGHTON

My Lords, very briefly, may I support the amendment moved by the noble Lord, Lord Mishcon? I understand that the department have indicated to local authorities that they are sympathetic to this concept that, while only one year can be guaranteed, there would be indications to the local authorities of minimum figures allocated to them in subsequent years. I hope that this general sympathy which I understand exists in the Government will not just be left hanging in the air as a general sympathy but might be translated into something along the lines of the amendment moved by the noble Lord, because I think it goes without saying, almost, that the planning of manpower and the financing of local government would thus be greatly improved and therefore a better use could be made of resources, which I would have thought would have been a desirable end that the Government would wish to see.

Lord BELLWIN

My Lords, as I said when we were discussing this in Committee—indeed, I believe it was almost an identical amendment that we had then, and that we decided the issue on a Division —I as well as anyone, I think, understand why it is important for local authorities to have some reassurance about the availability of expenditure. And, as I have said previously, we will go on giving as the noble Lords, Lord Mishcon and Lord Evans, have said—as much information and practical assistance as possible in that direction. But, as I also said in Committee, we cannot tie the Government to a statutorily fixed level of allocations. Any Government must be in a position to decide each year what the country can afford to spend. This would have to be reflected in allocations—which is not to say that we are not cognisant of the problem. I think both noble Lords who have spoken would accept that. We will do everything we can to be helpful in that direction because we recognise how important it is, but that does not mean that I can accept the amendment.

Lord HARMAR-NICHOLLS

My Lords, I do not want to discourage noble Lords from putting down amendments at any stage on any Bill, but when, on Committee, we have gone through the voting procedure and given a decision by vote, is it not rather unwise, when we have such an extensive Marshalled List, to repeat an amendment in this way? When it has been withdrawn or not put to a vote, so that a final formal decision has not been given, it is sensible to pursue it, but is it not a little time wasting to expect something that has been voted upon to be examined again in detail in the way this amendment would suggest?

Lord MISHCON

My Lords, I am grateful to the noble Lord who made that interjection and I noted with some amount of concentration the approval that was given on the Government Benches to his comments. I shall venture to remind the House, if none of my colleagues do so, that there are certain amendments on which a Division took place at Committee stage and which were approved. I have noticed on the Marshalled List that the Government have thought at Report stage to try to reinstate the position as though no such Division had taken place. I shall therefore remind them of and quote the noble Lord's comments when we reach that stage. At least, I had the tact to alter the terms of the amendment that I put before the House on this occasion by mentioning a different percentage from that which occurred on the last occasion.

I say no more on that than this. The noble Lord the Minister, with his great knowledge of local government, has appreciated the position that I tried to underline in this amendment, and the noble Lord, Lord Evans, was good enough to support that view. Because of his very firm indication that every assistance will be given to local authorities—and I know that he will not mind if I say that his remarks may be quoted hereafter—I think it would be sensible to ask the House for leave to withdraw my amendment.

Amendment, by leave, withdrawn.

3.14 p.m.

Lord DIGBY moved Amendment No. 100: Page 61, line 10, at end insert ("total").

The noble Lord said: My Lords, this is the first of a series of amendments designed to preserve the right of authorities to use capital receipts without fear of curtailment. It may be for the convenience of the House that I should speak to all the amendments in my name. They fall into three groups: first, Amendment No. 101, which is a simple amendment designed to remove the power of the Secretary of State to prescribe the proportion of capital receipts that councils may use. This amendment is concise, clear and achieves the objective of the Association of County Councils. However, the Government did not accept the point at Committee stage so I have also tabled Amendments Nos. 100, 102. 104, 108, 109, 110, 111, 114 and 115, which differentiate between capital receipts received before the commencement date (which might be subject to some control) and capital received afterwards, where we seek freedom of use. The third set of amendments, Amendments Nos. 112, 116 and 117, are consequential on the acceptance of either of my main series of amendments. I am sorry to speak to so many amendments at one time but I hope that as my argument develops your Lordships will understand my objectives.

I will start with Amendment No. 101 which is similar to one moved by my noble friend Lord Ridley at Committee. It is a simple one designed to remove the power of the Secretary of State to prescribe the proportion of capital receipts that councils may use freely. Clause 68(3)(d) allows an authority to use its net capital receipts but adds the rider or to such proportion of those receipts as may be prescribed". It is this rider that I wish to remove in order to ensure that the whole of an authority's capital receipts can be used without restriction to finance capital expenditure, in addition to the main central Government allocation. The unrestricted use of capital receipts in this way has been one of our objectives ever since the new capital control proposals were published. We believe that the Government accept the basis for this argument. Indeed, it is one of the main changes that the Government made in the original consultation document.

Yet the Bill as drafted would enable the Secretary of State to restrict severely the extent to which authorities may use capital receipts and even prevent them from making effective use of such receipts altogether. Freedom of use of receipts is essential if authorities are to have the maximum incentive to employ capital assets efficiently and to realise their value when surplus to requirements. The right parallel is the parable of the talents, which propounds that assets should be neither frozen nor dispersed but invested. If you believe, as I do, that the councils have a considerable amount of land and buildings surplus to requirements and not earning a good return, surely it is right to encourage them to sell these and to utilise the proceeds productively.

I appreciate that this amendment may not be acceptable to the Government. so I have tabled my second series of amendments starting with Amendment No. 100 and followed by Amendments Nos. 102, 104, 108, 109, 110, 111, 114 and 115, which differentiate between capital receipts received before the commencement date (and which might be subject to some control) and afterwards, where we seek freedom of use. During the Committee stage the argument of the noble Lord, Lord Bellwin, was that he must retain the power of restriction in order to safeguard against the possibility of the annual cash limit being broken. I cannot help feeling that this stems from a fear that the use made by authorities in any one year of capital receipts accumulated from previous years could far exceed the estimates made when the cash limit was fixed. I do not believe this to be very likely. These amendments would provide the Government with a safeguard by allowing the Secretary of State to restrict the use of capital receipts accumulated before the introduction of the new system but providing full freedom to employ capital receipts which accrue after that date.

I have studied the debate in Committee very carefully, and some of the points that we made have been accepted by the Government, for which we are grateful. But I felt that neither the House nor the noble Lord the Minister would want me to reiterate all the arguments which were covered on Committee. Therefore I have put down this series of amendments only because we judge this to be the most important freedom taken away from county councils by this Bill. In concentrating on this point, I hope that I can persuade the Government that these amendments are supporting their policies by providing not a stick to restrain the councils but a carrot to ensure that they use their assets to the best purposes. I beg to move.

Viscount RIDLEY

My Lords, before my noble friend the Minister replies, may I add a word of support in favour of Lord Digby's remarks? As I expected, he moved the amendment far better than I did at Committee stage and explained the effect much better than I was able to do. I confirm that in the view of the ACC this is the most important part of the Bill. I have repeatedly bored your Lordships in the past in saying that we regard this as extremely important. It is the only amendment that we are seeking at this moment at Report stage. The real crunch of the matter is this: if a local authority has a great deal of unused land and there is a lot of land lying idle, then we should all wish to see it brought back into productive use. We all wish to see these assets better deployed for the benefit of the community. The Secretary of State has repeatedly urged local authorities to sell and dispose of their unwanted holdings of land. This amendment would seek to give them the incentive to do so. I cannot stress too strongly that this would be in line with Government policy and helpful to all local authorities.

Lord BELLWIN

My Lords, we are not very far apart in this matter. I have for long been one of the staunchest advocates of the very policy of an authority using its resources to best advantage If it had some lying idle and doing nothing for years, then what better way to get funds than by accumulating capital receipts, selling those resources off and re-applying those receipts in the way that the authority felt it wanted, without the need to borrow or go to ratepayers for money. Clearly, as a philosophy it is something of which we approve wholeheartedly. That is why the Bill allows the authority to do that. If we are to talk about what is permitted in so far as presently accumulated receipts from the past are concerned, we should get into deeper water; but even there the Government take a very flexible approach to the matter.

The problem we have with this series of amendments is a very important one: the ability of Government to ensure that they can contain total capital expenditure by local authorities within a national cash limit. As my noble friend Lord Digby said, it is most unlikely that such a limit would be breached, because for every authority that wants to pursue such a policy there are others that do not. When one also takes into account the new alternatives that are going to be available to local authorities—the 10 per cent. carry over and the option to exchange allocations with any authority in the country, which is very far reaching—I should not have thought that what is in effect a prudent reserve power should inhibit authorities in any way from pursuing a vigorous policy of acquiring and accumulating capital receipts and putting them to whatever use they decide for them.

It is only because we feel that there must at the end of the day be a point beyond which Government cannot go—and that is something that can only be decided as they watch the progress of what happens in practice—that we cannot accept the amendments. It is for that very important reason. I repeat that we are close to my noble friends Lord Digby and Lord Ridley in what we are seeking to do. I acknowledge that it certainly is not a matter of semantics.

Without my referring to the copious notes that I have in front of me—and I appreciated my noble friend's not going over again all the points that we made in Committee; nor will I—I can say that the fears about what will happen in practice are not well founded. The very fact that since the Bill started on its route we have accepted that capital receipts should be added in this way indicates our great enthusiasm for the whole principle of using capital receipts to supplement allocations. I hope that my noble friends will be, if not completely satisfied, at least willing to accept what I say in the knowledge that we shall all watch this point very carefully. I know that through their association and as individual authorities they will do so. I assure them that so far as the Government are concerned we shall watch it carefully. I do not think that it is going to become a problem, but I hope that they will accept why I feel it is necessary at least to retain a reserve power within the Bill.

Lord DIGBY

My Lords, I am not entirely happy, but I thank the Minister for some of his words. I believe that there still is a danger. I will certainly keep a copy of his speech in Hansard available to quote at Ministers in future. In the present circumstances, I do not wish to divide the House. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment Nos. 101–105 not moved.]

3.27 p.m.

Lord MISHCON moved Amendment No. 106: Page 61, line 12, at end insert— ("; and

1. (e) any amount applied from funds established under s. 28 of the Local Government (Miscellaneous Provisions) Act 1976; and
2. (f) any amount received by way of grant or loan from the EIB, ERDF; and
3. (g) any amount applied to capital purposes from the proceeds of local lotteries.").

The noble Lord said: My Lords, I do not want to take up the time of the House in repeating what many members of this House will remember was the interesting discussion that took place on the amounts that should not be set against the capital receipts of a local authority. We went through it on the last occasion. Your Lordships will see examples of the matters that are set out here. They include grants that are made through EEC organisations for specifically approved projects of the local authority. As this is not going to cost the Government of this country anything, it is quite wrong to regard that as a capital receipt. Indeed, it does not act as very much of an encouragement to take the trouble to obtain these grants if it is counted as a capital receipt against the allocation for local authorities.

Then there is the obvious example of the receipts from the lottery which comes out of funds quite apart from anything normally collected by a local authority. They arise obviously out of money that is paid by ordinary citizens who are perfectly prepared to go in for those lotteries. If I remember correctly, the Minister listened with great patience to the discussion and indicated that he would give the matter further thought. I was asked why it was I had mentioned so many examples of exemptions from capital receipts. I said then—and I repeat it now, hoping that the Minister will hear me—that the main reason for putting clown these various classes was that my friends and I felt that if we failed completely it would be a dreadful matter; but if we succeeded at least in part it would have been worthwhile putting the amendment down. I gathered from the Minister's reply that he regarded lotteries as possibly being an exception. I hope he will feel the same in regard to other items, specifically those that derive from our membership of the EEC. I beg to move.

Lord BELLWIN

My Lords, in so far as lotteries are concerned, we have agreed with the local authority associations that such proceeds can be treated as capital receipts for the purpose of permitting increased capital expenditure. The noble Lord, Lord Mishcon, has been successful in that part as indeed he has in some other parts of the Bill, reluctant though lie may be to acknowledge it—well, perhaps not reluctant. I should not say "reluctant", my Lords. Beyond that, I fear the amendment is unacceptable, in that it does not seek to permit allocations to be supplemented. It does refer correctly to Section 28 of the Local Government (Miscellaneous Provisions) Act 1976, but basically the rest of it is still unacceptable, simply because it would weaken substantially the effect of the proposed controls. For that reason I fear we cannot accept it. Having made some progress, I hope the noble Lord will feel that he does not want to press the rest of it.

Lord MISHCON

My Lords, what the noble Lord the Minister is saying is, "Don't press your luck too hard". I appreciate the sense of what he is saying. I appreciate, as do my noble friends, the way in which at least one of these points has been conceded, and in those circumstances I ask the leave of the House to withdraw the amendment.

Amendment, by leave, withdrawn.

3.31 p.m.

Lord HILL of LUTON moved Amendment No. 107: Page 61, line 12, at end insert— (" and

1. (e) an amount for the year equal to the Authority's entitlement of profits of a trading undertaking owned by that Authority individually or as a member of a Joint Committee of Local Authorities.
2. (f) in sub-paragraph (3)(e) above trading undertakings include—
1. (i) any railway, light railway, tramway, road transport, water transport, canal, inland navigation, ferry, dock, harbour or pier undertaking;
2. (ii) any telephone undertaking;
3. (iii) any aerodrome;
4. (iv) any market undertaking;
5. (v) any undertaking for the provision of entertainments under section 145 of the Local Government Act 1972 or any local enactment;
6. (vi) any undertaking for the supply of district heating; or
7. (vii) any civic catering undertaking,")

The noble Lord said: My Lords, at the Committee stage I moved a similar amendment to this one. In doing so argued the basic point of principle that where a local authority undertaking makes a profit the local authority should be permitted to deal with that profit as it thinks best in relation to the needs of its community. In moving the amendment now, I base it on that same principal. It is the principle that is applied by Government in their pressure on nationalised industries: that from their profits they should find the capital for their development. It is the same principle as is employed in the attitude to the British Airports Authority: that the capital development should be found from profits; and it is the same principle as inspires the successful private company: that it should find the cash for its developments from its profits. Why should not a local authority undertaking be in the same position? Why should it not be free to utilise those profits without the consent of Whitehall?

I illustrated this principle—it was only an illustration—by reference to a local authority airport, Luton. Some 2 million passengers pass through it a year. Last year it made over £2 million profit. It is in need of rebuilding the terminal building; it is in need of other developments; and it wants to devote the profits that it is making on the airport to a reserve fund from which to pay for that enlargement, that development. I urged that it should be free to do so without supervision or control from Marsham Street. The noble Lord, Lord Bellwin, with that customary courtesy that he has shown throughout, said that careful consideration would be given to what I had said and—this was in a brighter mood of optimism—that he was sure I would be satisfied with the outcome. But I know a little more now, because the Department of Trade, no doubt awaiting the passage of this Bill, has already communicated with airport authorities as to the attitude it is likely to take on capital development.

It has made it clear in a circular that if a capital allocation is made to an airport for this purpose it must not be used for the enlargement of a car park; it must not be used for the reduction of noise, something that Luton needs: steps on noise insulation. In fact, it is perfectly clear that the department's consent will be needed before we spend money on a new fire tender; they cost up to £100,000. Luton will need larger hangars to accommodate the newer and quieter planes; all that will be subject to consent. But the capital allocation, to use the jargon, is not capital; it is our capital, Luton Airport's capital that is to be used. Through this system of allocation there are to be substantial controls as to what shall be done at the airport. I am bound to say to the noble Lord that I am not as satisfied as he assumed that I would be when I heard the outcome.

I come back to the general principle of this thing, of which Luton was an illustration. Why should not a local authority deal with the profit on its undertakings in any way it may desire without central supervision or control? There are no party politics in this; there is no increase in local authority borrowing; there is no increase in local authority expenditure. I suppose it would be all right if the profit went into the rate fund to reduce the rates and then a little later Luton sought consent to borrow money for that development. There seems to be no anti-inflationary policy. There is no local government expenditure involved in this. It seems to me to be an unnecessary limitation on local authority freedom, something which is undesirable in terms of local authority freedom and which will discourage local authority undertakings from making a profit. One is bound to ask whether the Government believe in the principle of making profits and ploughing them back. I must go very gently here; it is some 17 years since I was a Minister in a Conservative Government and maybe I have forgotten the policy developments in the meantime. But it surprises me that this Government, of all Governments, should discourage the practice in local authority undertakings of making profits and ploughing them back.

To return to the illustration of Luton, when one comes to the detailed matter of the development it is absurd to suggest that civil servants at the centre know better than those who are running the airport what form of improvement should take place. I am not one of those who criticise civil servants. One cannot work as a Minister for 10 years, as I did, without having a very high opinion of the standing of civil servants. Why impose on them at the centre a task which is based essentially on local knowledge? I would say to your Lordships that this is a point that the Government, who have got away with so much in the course of the debates on this Bill, should yield. Again and again the noble Lord, Lord Bellwin, has spoken of his belief in the strength and autonomy and, where possible, the freedom of local authorities. I suggest this is an illustration of the point and I hope that noble Lords on all sides of the House will attach themselves to this principle of local authority freedom in this respect and support this amendment in the Lobbies. My Lords, I beg to move.

3.40 p.m.

Lord MISLICON moved, as amendments to Amendment No. 107, Amendments Nos. 107A and 107B: In paragraph (f)(vi), in line 2, leave out ("or") Paragraph (f)(vii) at end insert— (";or (viii) any exhibition hall or complex").

The noble Lord said: My Lords, my memory got carried back, and I believe that many Members of this House will share the same recollection, when I heard once again the voice of the noble Lord, Lord Hill. My memory was carried back to those war years when that voice came over the radio in such an attractive form, doing so much for the morale of the country at that time. I should like to say that I think that voice has come over again to deal with a certain sense of morale in local authorities and in the various undertakings mentioned in this resolution.

During the Committee stage, on behalf of my noble friends and myself, I ventured to move an amendment in terms as moved by the noble Lord, Lord Hill, but with the addition of a reference to an exhibition centre, and I do not suppose that the noble Lord will have any objection to that amendment and the addition of that item.

After I had moved the amendment, the noble Lord the Minister said this, at col. 766 of the Official Report during the Committee stage on 10th October—and I am so anxious that he should remember his words because it may perhaps determine his reply on this occasion. I quote: Trying to be helpful, may I say that the whole principle of using profits, as my noble friend has just said, is an absolutely acceptable one on its own, and, although I cannot accept the amendment and can give no commitment, I think this is another of these areas where I should like to talk about it further with colleague. Therefore, I would give that assurance but without any commitment, as I know would be understood. If that is of any help at all, that really covers the point of the amendment set down in the name of my noble friend Lord Ridley, too". Indeed, the noble Viscount, Lord Ridley, had put down an amendment with the same principle, but had used a greater economy of language than I had employed in my amendment, and I was grateful to him for it.

The noble Lord, Lord Hill, was so right, in my view, when he said there was not a scrap of party politics in this. There is not, and I am appealing to all sections of the House, as I know he did, not only to adopt the principle as he has put it but I wonder whether your Lordships would permit me to remind you of the consistent discussion we had in regard to direct labour organisations. The discussion from the Government Benches—and one understands the logic of it, even if one does not always agree with the principle, as some of my noble friends and I do not agree—really seemed to be intended to discourage local authorities who were making losses at the expense of the ratepayer and the taxpayer. That was the whole reasoning behind many of the provisions of this Bill which deal with direct labour organisations.

Is not the other side of the coin to be looked at? Is there to be no encouragement for those local authorities who, by their initiative, enterprise and care, do manage to make profits in regard to some of their undertakings? Is it not sensible that if they do, instead of saying to them—and it seems to be such an unworthy reply to those efforts— "You have made those profits and now they are going to be counted against your allocation", would it not be appropriate that within the year in which they are made there should be an ability to plough back those profits into the enterprise itself and not take them into account in regard to the allocation which is made?

It always seems to me that if you have a good case it is sensible not to overplay it, and not to talk too much. Therefore, I shall cease my address to your Lordships, if I may, with this statement: that the noble Lord the Minister on the last occasion said that he would confer with his colleagues and that he had some sympathy with the spirit of this amendment, but gave no undertaking as to what the outcome of those discussions would be. I only hope that his colleagues, with whom he discussed this, are as sensible as we know the Minister himself to be. I beg to move.

Lord EVANS of CLAUGHTON

My Lords, I assume from the way in which the noble Lord, Lord Mishcon, moved the amendment to Amendment No. 107 that we are in fact taking Amendments Nos. 107, 107A and 107B together. On that assumption, I should like to say from these Benches that I very warmly support the amendment moved by the noble Lord, Lord Hill, with his habitual eloquence. The problem is that the Government insist on treating investments in local authority trading undertakings as being included as prescribed expenditure. It seems to me that it is an artificial distinction that the Government choose to treat surpluses on municipal trading as revenue receipts which cannot then be used to supplement capital expenditure allocation.

The Government have recently conceded in negotiations with airport authorities that the allocation they have in mind for the next three years is, on their own admission, totally inadequate for airport expansion and improvement, and airports have been told that a rationing of resources will take place. Nevertheless, if the Government do not accept this amendment, or some similar form of it, it appears that they are taking from airport authorities which make a profit the freedom to use such profits, surpluses or reserve funds.

It seems odd that, although Speke Airport at Liverpool makes substantial losses and therefore would not be a beneficiary if this amendment were passed, the chairman of the Airports Committee on the Merseyside County Council, in trying to squeeze some money out of a reluctant Government, was told by the noble Lord the Minister's honourable friend Mr. Norman Tebitt that the only way they could hope to make any money to carry out the substantial improvements to Liverpool airport that were needed would be to go into partnership with private enterprise, and thereby turn the deficit into profit which could then be used to expand the airport. That seems, on the face of it, to contradict the Government's present policy.

The situation in Greater Manchester regarding Ringway Airport is entirely different. They are in a very similar position to that of Luton, where they have very heavy traffic and want to carry out very important improvements to the airport. As a Merseysider, it hurts me to say this, but Manchester is the principal airport in the North-West and one of the few enterprises that is expanding and succeeding, making profits and employing a large number of people in that part of the world. They are very concerned, as some of your Lordships may have heard on the wireless recently, in Manchester that this Bill, if not amended in the way suggested by the noble Lord, Lord Hill, will do them a very grave disservice in trying to expand what is a very important service in reviving industry in the North-West.

At the end of the day, all that is sought by this amendment is parity with the nationalised industries, including, in particular, the British Airports Authority, who have been told to use what revenue profits they have to finance capital expenditure and to avoid borrowing. It seems to me that, if they are being encouraged by the Government to do that, then surely municipal enterprises that make profits of the kind referred to in the amendment, and in the amendment to the amendment, should be treated in the same way and encouraged to this end. Therefore, I very much support the amendment moved by the noble Lord, Lord Hill, and the amendment to that amendment moved by the noble Lord, Lord Mishcon.

3.51 p.m.

Lord BELLWIN

My Lords, I think we should first get clear the difference. If we are talking about airports, and indeed we are very much doing so in the sense that they touched off this debate, I should make it clear that the Government have said—and I have tried to indicate this to the noble Lord, Lord Hill—that we take a very positive view of the expansion of airports. We consider that to be a matter of regional and, to some extent, national importance, and any projects that are subjects of regional and national importance are eligible for specific grants on top of allocations. Therefore, we have looked closely at Luton Airport and, while I cannot give any undertakings here, nor would noble Lords expect me to do so, I have indicated to the noble Lord, Lord Hill, that, hopefully, there will be a very favourable look—and very shortly, too, I hope—at specific allocations for them on top of the other allocations.

The noble Lord said that they wanted to spend the money on car parks, sound proofing and so on. One of the beauties of the new form of capital expenditure controls is that once an allocation is made, it can be used for whatever purpose the authority itself decides is its priority. If Luton should decide that the priority for them would be to use some resources for this type of project. then there is no reason why they should not do it—

Lord HILL of LUTON

My Lords, will the noble Lord allow me to intervene? The circular of the Department of Trade, which was issued to airport authorities between two and three weeks ago, expressly stated that none of the allocation could be used for increased car parking or for sound insulation.

Lord BELLWIN

My Lords, the point I was making was not that the allocation that comes from the Department of Trade, but the capital allocation that goes to the authority as part of its general capital allocation can be used for whatever it decides regardless of how it may be made up in the various blocks. That is one of the features of the whole new system that will be coming out. The allocation is made up of various blocks that we would expect the authority might spend. But, at the end of the day, they are all channelled into one and it will be for the authority to decide whether or not it wishes to use the allocation in the way we have suggested—we being Government. I have said it so many times before. This is, at last, a great new freedom for an authority to decide where its priorities lie. So, to that extent, the noble Lord is right and I am right, too—

Lord MISHCON

All is right as right can be.

Lord BELLWIN

Whatever is allocated to Luton by the Department of Trade, as a specific allocation on top, will be used for the purposes that the department specify. But, additionally, Luton will have the other allocation for which they can decide the priority. That can be used for some of the other purposes that are not specifically set out in the allocation from the Department of Trade.

If I may come to the thrust of the debate, may I say this? The Government consider it absolutely vital that the totality of local authorities' capital expenditure must be contained within an overall cash limit. I shall come to the other points in a moment. But somewhere down the line there has to come a moment in time when we accept that there is only so much money to be spent. It is not the same as the money which the noble Lord, Lord Evans, indicated the private sector might put in. That is not public expenditure money. In terms of public money, there is only so much and it is essential that we do not exceed that, because, if we go on doing so, then we cannot get anywhere in the direction that the Government and everybody in the country want. So we will be able to allocate in the form of expenditure approval only such sums as we think will enable the cash limit to be spent, but not to be overspent.

But this amendment proposes that an authority shall be able to use profits from trading undertakings and it gives a very formidable list. I am sure that the noble Lord, if pushed to it, could even have added some more to it. But I want to use this list in the amendment, and I hope that noble Lords will look at it, because it gives an intimation of where it could go in terms of the totality of spending, if, hopefully, profits are made.

I was chairman of an airport that made profits, and there is a certain monopoly connotation in an authority having an airport. It is clearly an achievement for Liverpool to lose money. One has to wonder how they did it, unless, in fairness to them—and I had better qualify that statement immediately—there are special circumstances about which I do not know. But most airports make profits, because they have a special situation. It is a service that is not likely to lead to competition. There are not likely to be other airports opening up. Therefore, that is special. But leaving them, and possibly market undertakings, aside, local authority trading enterprises tend, in the main, not to make profits and they are a cause of concern.

However, we are talking about the principles, so may I come back to them? The great point here is that on top of the capital receipts issue, which we talked about earlier and which is a tremendous opportunity for authorities—and one which I practised extensively in my former incarnation—there is that opportunity to top up their allocations. There is the opportunity of the 10 per cent. in and out in a year. There is the opportunity of going to other authorities who will not spend all their allocations. There is a whole area of opportunity here for authorities to increase their total capital opportunities to spend, within the totality of what the Government believe we can afford.

I am aware, also, of the argument that this will reduce the incentive to authorities to run profitable undertakings. Heaven forbid that we should want to do that. Of course, we want to encourage them to run profitable undertakings. But this debate is not about that. This debate is about what to do with the money if you make it. I should have thought that one of the very best ways of using such money —and no Government can tell you that you should or should not—was stated by the noble Lord, Lord Hill, to which I would attach greater importance than he did; that is, by taking the opportunity to use it in aid of the rates.

My goodness me, where does the money for the airports come from in the first place? It comes from ratepayers. Initially, it often comes from taxpayers. Is it wrong that some of that money should be returned when a profit is made to aid what are, in many cases, very hard-pressed ratepayers? We are talking all the time about helping them. What a noble and worthwhile undertaking it is if something can be given back to them. They keep on putting up the money every year. The other day I called it risk capital, not given freely. Therefore, I hope that profits of that kind could go towards helping the rate fund. As I said, it needs it.

I recognise the great power of the argument of the noble Lord, Lord Hill, and the noble Lord, Lord Mishcon, quite rightly and properly quoted me as saying—I wrote it down as he said it—that the use of profits is acceptable on its own. Those are the words that I used and I stick by them all the way down the line. The use of profits is acceptable on its own. But you cannot divorce this from the total context of the whole subject that we are talking about. There are two main features in the capital expenditure control proposals. One is that you give the kind of freedom to decide its own priorities that we maintain local government has wanted for all these years. The second is that there is a total overall amount which the country can afford. Only the Government can decide what that is.

So we say to local government: Stay within the totality of that but within it do as you wish. I have to come back to this and to say, with this list, with the open-ended nature of the proposal, which by itself is right yet within the context of the national scene is not right, that even if at this moment the noble Lord, Lord Hill of Luton, feels there is at least merit in my argument I hope he will feel able not to press his amendment.

Lord DAVIES of LEEK

My Lords, I apologise for coming in late. We are slipping through vital parts of the Bill so rapidly, because of the time factor, that we are not studying in depth some of the problems. I arrived a little late because I was trying to check a point, but I cannot let this go without saying a word. There is no doubt that we have introduced into our system something which is completely new. This part of the Bill and its framework, as local councils and others have said, has introduced a new system of central control without flexibility. I will not expand upon that point because other speakers have done so, but I want to make an appeal. We are always talking about profit. We have been given a threnody. That is what it is: the death dirge of the old system of financing local government. We have been told that the rates should be helped by effort. But this idea is 50, 60, 70 or 80 years old. Many local authorities have run different types of schemes to subsidise the rates. There is nothing new about that. They do not want a lesson about that from the ideocracy in Whitehall.

I am interested in the development of local culture and I was delighted that the noble Lord, Lord Hill of Luton, put in paragraph (v): any undertaking for the provision of entertainments under section 145 of the Local Government Act 1972 or any local enactment". I note that the development of local cultural life could be dominated by the Government with their excessive veneration of the saints of monetarism. This is practically destroying social life. Fanatically, we are following this path and it is damaging Britain's existence, its work, its wealth and its happiness. I guarantee that it will take a dozen years, whatever Government come to power, to get anywhere near to stability.

Amendment No. 107 standing in the names of the noble Lord, Lord Hill of Luton, and the noble Lord, Lord Mishcon, is of particular importance—remarkably so if the Government accept some part of the list of trading undertakings which include the sentence following paragraph (v) which I have just mentioned: Any undertaking for the provision of entertainment under Section 145 of the Local Government Act 1972 or any local enactment". I note that the word "entertainment" is intended to include musical, theatrical and other performances and amusements, but I am pleading that this country, which is noted for its theatre and which has one of the greatest of all dramatists in Shakespeare, should help to keep alive, as we have through' the centuries, the theatre. I am pleading that the theatrical side should be left in. Britain's theatre is the best in the world. For centuries British local authorities have had theatre of all types. From the morality plays of medieval times up to today they have given a fillip to keeping alive our cultural activities. We are damping this down. Particularly is this true of the county which at the moment I reside in and part of which I had the honour to represent; namely, Staffordshire and the City of Stoke-on-Trent which subsidises its quite famous Victoria Theatre.

Part VII of the Bill sets out the framework for a system of local authorities which replaces the old flexible system. I believe that the Government will have too much direct control. They are not encouraging men and women who over the years have given a lifetime, in many cases, to local government. They may not be flippant of the tongue. They may not have the literacy of noble Lords opposite. They may not have had their educational opportunities. And they may come from many different parties. However, a bonhomie exists among all sides of local government and a pride in their area. I warn the Government opposite that it is taking the initiative away from its own people, its own political party. There is an upsurge of feeling about trespassing upon an area which is at the heart of British democracy.

Consequently, I hope that greater priority will be given to allowing freedom to local authorities which know the idiosyncracies of their areas better than the ideocracy of Whitehall. They live in the regions, with their intonation, their accents and their special interests, and they should be allowed to manage the money which they themselves raise without direction. It is a shame that this is being pressed upon this noble House in such a flippant manner.

Viscount RIDLEY

My Lords, I should like to add a word in support of the noble Lord, Lord Hill of Luton, whose amendment we are debating. Like other noble Lords, I have always enjoyed enormously listening to the noble Lord and, like the noble Lord, Lord Mishcon, I remember his days as the Radio Doctor. I remember him making his broadcast about that black coated worker, the prune, which had a great effect on me then, even if it does not have the same effect now. The noble Lord is on to a point which he must press and I hope that he will lead us into the Lobbies.

The local authorities have made great efforts not only over airports but in other directions to try to make profits. Where they do so they must be allowed to use those profits for the benefit of their inhabitants and ratepayers. I will not weary noble Lords with details of what my own authority is trying to do, but I have experience of Newcastle Airport which after many years has succeeded, I think, in making a profit and which has made a tremendous contribution to the life of North-East England. As an act of faith many years ago when the airport was started, local authorities joined together to finance and to run it and they deserve the proceeds of their endeavours in order to expand the airport for the benefit of their region.

All the arguments have been trotted out and I shall not waste time upon them. The only thing which surprised me was that my noble friend the Minister, a Conservative Minister, so lightly dismissed in one sense the profit motive. He said that incentive was all right but that it did not go so far. I think that from this Government we should expect greater faith in the incentive and the profit motive generally, which I personally support. The incentive for local authorities is very real and I trust that this will allow your Lordships to support the noble Lord, Lord Hill of Luton, in his amendment.

4.9 p.m.

Lord SANDFORD

My Lords, I rise to support the noble Lord, Lord Hill of Luton, as I did when he moved his earlier amendment in Committee. The whole House will be full of admiration for my noble friend on the Front Bench in the way that he has handled the Bill, but every now and again he gets it wrong. I have to say that he has here got it more wrong than anywhere else in the Bill. Of course it is important that the expenditure of local authorities has to be kept within the totality of the agreed demand on the Exchequer, but here we are talking about the use which authorities make of the wealth which they themselves have created without making any demand on the Exchequer. If I may say so, that is a totally different point.

When my noble friend says that it would be quite wrong to isolate the use of this money from the control system which is being created in the Bill I would reply that it is not wrong but that it is necessary and right that it should be so isolated. This is money which has been created by profitable undertakings, albeit run by public bodies, and I should not have thought that we had all that many public bodies which do make profits. They should be left free to use them as they see fit. They have been democratically elected to take those sort of decisions and they are quite capable of taking them, so they should be left to get on with it.

The debate has concentrated upon airports, and quite a few of them are profitable. The Association of District Councils, over which I have the honour to preside, has a number of them in its membership. But they are not the only profitable public local undertakings. The City of Nottingham runs an industrial estate and in the last financial year that made a surplus of £1,100,000. I submit to the House that the City of Nottingham are the people to decide how to use that money: whether to apply it for the relief of the rates, whether to invest it then and there in sonic extension of their undertaking or whether to plough it back into capital reserves. Other authorities certainly require to go cap in hand to Whitehall for capital allocations and specific grants and so forth. If they do, they have to argue their case with the regional office of the DoE and the regional office of the Department of Industry, the Department of Trade or the Ministry of Transport—and very tedious and time-consuming and expensive in manpower it all is. Surely to goodness if a city can make a surplus of £1,100,000 on its own trading estate it should be allowed to get on and use that money at its own discretion without having to involve the decisions of any other civil servants anywhere. If they can make a profit they ought to be left completely free to apply that profit as they see fit.

Take the Borough of Southend. That is one of the relatively rare boroughs which runs three profitable undertakings: it runs an airport which makes a profit, it runs a transport undertaking which makes a profit and it runs a trading estate which makes a profit. Why in heaven's name should they have to come to any department in Whitehall to help them decide what to do with that money? In point of fact they will have an expensive business of clearing away obstructions so that they can carry different types of aircraft on their airport runway. That will cost about £600,000. There is little prospect of their being able to get that money out of any allocation that they might get from central Government. They would be subjected to all sorts of considerations about priorities between Castle Donington, Luton and this, that and the other airport. If they have £500,000 which they have made by their own prudence and good management, for heaven's sake why should they not use it?—and the same goes for other undertakings.

Only a few days ago I was visiting another of our member authorities in Boston, Lincs. They run a small east coast port. It is another profitable undertaking. Their operating surplus over the past four years has been £350,000. They have applied £190,000 of that to their capital reserves, they have invested some in structural repairs and in buying cranes. They have been buying second-hand cranes from Grimsby and Tilbury (and I should think there is a fairly wide choice). Can one see that kind of trading activity being conducted by a department in Whitehall, with its civil servants going round picking up second-hand cranes? That is the way profits are made and if they can make a profit surely they need encouragement to go on making a profit and to apply it in whatever way they see fit, to improving the profitability of their enterprise, to relieving their rates, to building up reserves or to doing any of that in combination.

I am sorry to say that the noble Lord, Lord Mishcon, has pinched most of the rest of my argument here, but he had a good point and I will repeat it. Yesterday, as he said, we were very properly talking about direct labour organisations, which probably have more friends on that side of the House than on this side, but, as the noble Lord, Lord Mishcon, was saying, there are cases of incompetent, uneconomic organisations, wasteful organisations, extravagant organisations or even, as my noble friend mentioned, corrupt organisations. When public money is being misspent in such ways, of course it is appropriate for the Secretary of State to take powers by which he can control them, curb them, penalise them or even, if necessary, chop their heads oil. But if there are organisations which can and do make a profit, do achieve financial success, have created some wealth and, above all, have created and are creating jobs, for heaven's sake let us let them get on with it.

Lord DERWENT

My Lords, I hope the House will not think me impertinent but we have heard the arguments very fully on both sides and should we not now like to hear the position taken by the noble Lord, Lord Hill, and then come to a decision?

Lord HILL of LUTON

My Lords, perhaps with leave I may make three points—

Several noble Lords

No, on the amendments.

Lord HILL of LUTON

My Lords, am I not allowed to make three quick points?

Lord MISHCON

My Lords, may I make it absolutely clear that if the noble Lord, Lord Hill, is speaking instead of me it will be for the pleasure of the House that he does so?

Lord MORRIS

My Lords, before the noble Lord, Lord Hill, makes his points, I think it only right and proper for me to say that I am extremely sad that I find myself in total disagreement with noble friends who have spoken for the amendment on my side of the House. However, I do draw immense comfort from the knowledge that I shall be supporting my noble friend Lord Bellwin. What my noble friends who have supported the amendment have not understood and thought about is the basic role and the function of government. The only function of government, be it central government or local government, is to govern, not to be in business. It is for that very reason that the people of this country are fed up with too much government. They want less government and it was for that reason that they put this party into power at the last election.

The DEPUTY SPEAKER (Lord Aberdare)

My Lords, perhaps I should remind the House that the Question before the House is that Amendment No. 107A be agreed to and that we have to dispose of Amendments Nos. 107A and 106B before we come to the main Question on Amendment No. 107.

Lord MISHCON

My Lords, it may facilitate the business of the House if I now formally support Amendments Nos. 107A and 107B, with which I believe the noble Lord, Lord Hill, indicated his agreement.

Lord HILL of LUTON

My Lords, perhaps I may now make those three points. The noble Lord, Lord Bellwin, was at his best today, arguing an impossible case. It was one that he knew was impossible and which drew out of him all his persuasive powers. But noble Lords will recall that he said that when profits were made the proper place for those was the rates. Luton is well aware of that. In the current year Luton is making £2.2 million; it is giving £1 million to the rates—and that involves a 3p reduction—and £1.2 million to the reserve fund for the building of the airport. So in that respect we have done even better than the noble Lord, Lord Bellwin, expected.

Then of course he referred to the list, as though there were a momentous, theoretical possible addition to national capital expenditure. As he knows perfectly well, very few of those public undertakings are making a profit and the plea here is for those which are making a profit. So I would say to him that allocations and special allocations, promises, hopes are irrelevant to the basic issue that local authorities making profits in their undertakings should be free to deal with those profits as they may decide, without intervention from Whitehall. I think it right that we should in fact vote on that central issue, as one of freedom for local authorities in an important respect.

Lord BELLWIN

My Lords, by leave of the House, for the sake of procedure can we be quite clear that the noble Lord, Lord Hill's amendment is Amendment No. 107? On that he has spoken and it is on that, presumably, that we shall divide in a moment. That is not the same as Amendments Nos. 107A and 107B. Can we be quite clear on that?

Lord PONSONBY of SHULBREDE

My Lords, surely Amendments Nos. 107A and 107B have been moved by my noble friend Lord Mishcon and maybe we could vote formally on those first, if that is

accepted by the noble Lord, Lord Hill. Once they have been accepted, we can then have the Division on Amendment No. 107.

On Question, Amendments Nos. 107A and 107B agreed to en bloc.

4.20 p.m.

On Question, Whether the said amendment (No. 107) as amended, shall be agreed to?

Their Lordships divided: Contents, 131; Not-Contents, 92.

CONTENTS
Adeane, L.	Evans of Hungershall, L.	Mottistone, L.
Ailesbury, M.	Foot, L.	Nunburnholme, L.
Airedale, L.	Gainford, L.	Oram, L.
Amherst, E.	Gainsborough, E.	Peart, L.
Ampthill, L.	Gaitskell, B.	Pitt of Hampstead, L.
Amulree, L.	Gladwyn, L.	Ponsonby of Shulbrede, L. [Teller.]
Ardwick, L.	Glenamara, L.
Atholl, D.	Gordon-Walker, L.	Porrit, L.
Auckland, L.	Gosford, E.	Reilly, L.
Aylestone, L.	Granville of Eye, L.	Rhodes, L.
Bacon, B.	Greenwood of Rossendale, L.	Richardson, L.
Baker, L.	Hale, L.	Ridley, V.
Balogh, L.	Hampton, L.	Rochester, L.
Banks, L.	Hatch of Lusby, L.	Ross of Marnock, L.
Beaumont of Whitley, L.	Henderson, L.	Saint Brides, L.
Belhaven and Stenton, L.	Heycock, L.	Sandford, L.
Beswick, L.	Hill of Luton, L. [Teller.]	Scanlon, L.
Birdwood, L.	Houghton of Sowerby, L.	Seebohm, L.
Birk, B.	Hylton-Foster, B.	Segal, L.
Blease, L.	Irving of Dartford, L.	Shinwell, L.
Blyton, L.	Jacques, L.	Stamp, L.
Boston of Faversham, L.	Jeger, B.	Stanley of Alderley, L.
Bowden, L.	Kaldor, L.	Stedman, B.
Brentford, V.	Kilbracken, L.	Stewart of Alvechurch, B.
Bridgeman, V.	Kilmarnock, L.	Stewart of Fulham, L.
Brockway, L.	Kinloss, Ly.	Stone, L.
Burton of Coventry, B.	Kintore, E.	Strabolgi, L.
Byers, L.	Leatherland, L.	Strauss, L.
Caccia, L.	Lee of Newton, L.	Taylor of Gryfe, L.
Chitnis, L.	Lindsey and Abingdon, E.	Taylor of Mansfield, L.
Clancarty, E.	Listowel, E.	Underhill, L.
Clifford of Chudleigh, L.	Llewelyn-Davies of Hastoe, B.	Vaux of Harrowden, L.
Collison, L.	Longford, E.	Vernon, L.
Cooper of Stockton Heath, L.	Loudoun, C.	Wade, L.
Dacre of Glanton, L.	Lovell-Davis, L.	Walston, L.
David, B.	McCarthy, L.	Wells-Pestell, L.
Davies of Leek, L.	McNair, L.	Whaddon, L.
Davies of Penrhys, L.	Maelor, L.	Wigoder, L.
Derwent, L.	Masham of Ilton, B.	Wilson of Radcliffe, L.
Digby, L.	Massereene and Ferrard, V.	Winstanley, L.
Donaldson of Kingsbridge, L.	Milverton, L.	Wise, L.
Elliot of Harwood, B.	Minto, E.	Wootton of Abinger, B.
Elwyn-Jones, L.	Mishcon, L.	Wynford, L.
Evans of Claughton, L.	Monckton of Brenchley, V.	Wynne-Jones, L.
NOT-CONTENTS
Abercorn, D.	Berkeley, B.	Chelwood, L.
Airey of Abingdon, B.	Bessborough, E.	Clwyd, L.
Alexander of Tunis, E.	Braye, L.	Cockfield, L.
Allerton, L.	Caithness, E.	Cork and Orrery, E.
Avon, E.	Camoys, L.	Cottesloe, L.
Bellwin, L.	Campbell of Croy, L.	Crathorne, L.
Belstead, L.	Cathcart, E.	Cullen of Ashbourne, L.
Davidson, V.	Hatherton, L.	Nugent of Guildford, L.
de Clifford, L.	Henley, L.	Onslow, E.
De Freyne, L.	Hillingdon, L.	Orkney, E.
De La Warr, E.	Hornsby-Smith, B.	Orr-Ewing, L.
Denham, L. [Teller.]	Inglewood, L.	Redmayne, L.
Drumalbyn, L.	Ironside, L.	Renton, L.
Duncan-Sandys, L.	Jeffreys, L.	Romney, E.
Ebbisham, L.	Kemsley, V.	St. Aldwyn, E.
Eccles, V.	Kimberley, E.	St. Davids, V.
Ellenborough, L.	Kinnaird, L.	Sandys, L. [Teller.]
Elton, L.	Kinross, L.	Savile, L.
Exeter, M.	Long, V.	Soames, L. (L. President.)
Ferrers, E.	Lucas of Chilworth, L.	Spens, L.
Fortescue, E.	Lyell, L.	Strathspey, L.
Fraser of Kilmorack, L.	McFadzean, L.	Swansea, L.
Gisborough, L.	Mackay of Clashfern, L.	Swinfen, L.
Glenkinglas, L.	Mansfield, E.	Torphichen, L.
Gormanston, V.	Margadale, L.	Trefgarne, L.
Haig, E.	Marley, L.	Trenchard, V.
Hailsham of Saint Marylebone, L. (L. Chancellor.)	Monk Bretton, L.	Ullswater, V.
	Morris, L.	Vickers, B.
Hanworth, V.	Mowbray and Stourton, L.	Vivian, L.
Harmar-Nicholls, L.	Murton of Lindisfarne, L.	Willoughby de Broke, L.
Harvington, L.	Northchurch, B.

On Question, amendment agreed to.

Resolved in the affirmative, and amendment as amended, agreed to accordingly.

[Amendments Nos. 108 to 110 not moved.]

4.30 p.m.

Lord SANDFORD moved Amendment No. 110A: Page 61, line 44, at end insert— ("(9) Notwithstanding the provisions of subsection (3) above, if an authority acquires an interest in land, with the intention of disposing of an interest in the same land to another person for industrial use, to the extent that the authority have not so disposed of the interest by the end of the financial year in which the original interest was acquired, the amount that would otherwise have been counted as a payment in respect of prescribed expenditure in that financial year shall not so count until the following financial year.").

The noble Lord said: My Lords, I beg to move amendment No. 110A. This amendment takes us back to a debate which we had at Committee stage, initiated, I recall, by the noble Lord, Lord Northfield. It deals with the difficulty that arises in the case of local authorities—and I hope that there will be an increasing number of them—who are seeking to develop land for the use of new businesses and industry. Local authorities will develop land in year one and not be able to let, for instance, factory units, completed upon it, until year two. That is particularly the case when one recognises that as regards land that is purchased for that purpose the first thing that has to be done is to have it serviced with sewerage, telephones, water supplies, roads, et cetera. That puts pressure on the year—one allocation. If that were all there was to it, it could lead to a reduction in industrial development. I submit that this is the last thing that we want at this stage. We want industrial development, new small businesses, new wealth creation and new job creation.

In order to get round the problem, as the Bill stands at present authorities may rush into disposing of some units, if they can, at lower rentals than they would be able to get if they had time to consider all the options that would be open to them. I put it to the House that that again is not, I hope, the Government's intention. My noble friend Lord Bellwin would not accept the amendment on the grounds that it would seriously weaken the Government's ability to ensure that authorities' total capital expenditure, capital spending, in a particular year remained within the overall limits for that year—the argument which he is using most of the time, quite properly, throughout the course of the Bill, although not in the case which we have just dealt with and not, I think, in this case.

It seems to me that total local capital expenditure on industrial estates in 1978–79—the last year for which figures are available—was about £20 million. That is a very small fraction of total local authority capital spending. If this amendment were accepted and this flexibility made available to local authorities, I do not think that we could say that the overall control of public expenditure by local authorities would be in any serious jeopardy. The Association of District Councils, whose President I am, believe that this type of industrial development is one of the most important things they are doing at present. It is their highest priority and it would greatly assist the work in which they are all engaged in this field if the amendment were accepted. I beg to move.

Lord BELLWIN

My Lords, this amendment is similar to one moved in Committee by the noble Lord, Lord Davies of Leek. I was not able to accept that amendment, but I was aware of the valuable work that many local authorities did and do in assisting local industry. I therefore offered, without any commitment to have a look at the matter again. I have looked further into it, but I am still not able to accept the proposal, either in the previous form moved by the noble Lord, Lord Davies of Leek, or in the form of the present amendment. The immediate reason is quite simple. In either case it could involve the acquisition of assets by an authority in one year being recorded as having been acquired in the next. That sort of manipulation of accounts would be unacceptable in any sphere of activity. It is certainly unacceptable where public bodies such as local authorities are concerned.

However, I do recognise the concern behind this amendment. That was why I offered to look at it again. But I think that in any case the problem is exaggerated. We have gone a long way towards helping authorities which acquire industrial premises or let them, by providing that the lettings by the authority should be treated as generating capital receipts which would cancel out the effect of the original acquisition. The problem now is said to be that an authority may acquire an industrial estate in one year and not be able to let it in that year. Consequently any capital receipts would not be available to cancel out the cost of the acquisition in the year it occurred. In their own interest an authority should try to arrange and time their dealings prudently, and authorities should be very careful before acquiring industrial estates for which there may be insufficient effective demand.

But what if an authority are unable to let industrial premises? It is important here not to look too narrowly at this matter. This sort of activity is usually a small part of an authority's annual capital expenditure and there is no need for each individual transaction—acquisition and on-letting—to balance out each year. Authorities will be able to switch allocations between blocks; to use capital receipts; to switch allocations between years; and even to seek switches of allocation from authorities anywhere else in the county. All these ways are open to an authority to cover the acquisitions until capital receipts are available on the disposal of interests in the land. Thereafter, of course, the capital receipts on the disposal would be available to repay any switches of allocation into this activity or to cover further acquisitions.

Local authorities must learn to use the wide freedoms which are available under the new system to meet this sort of problem. I, for one, have no doubts at all that they will do exactly that. They certainly do not lack ingenuity or resource, in my experience, and I am quite sure that they will find the best way to use the new system. I am wholeheartedly in favour of that. So far as this amendment goes, I fear that we cannot go beyond that and I wonder whether, in view of my explanation, my noble friend will feel able not to press this amendment.

Lord SANDFORD

My Lords. I am grateful to my noble friend. I shall read his further response to this matter with great care. I read very thoroughly the exchange which he had with the noble Lord, Lord Northfield—whose experience in this field is so extensive—and I must confess that I was not entirely satisfied with it and therefore felt disposed to move this amendment again. I hope that my noble friend is right, because the creation of new estates and the starting up of all the help that we can give to new businesses is an important area and it would be maddening if the work which so many authorities want to do in this field was frustrated by our not having got this right. But, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 111 to 117 not moved.]

Clause 72 [Specification of expenditure—supplementary]:

4.38 p.m.

Baroness STEDMAN moved Amendment No. 117A: Page 63, line 41, at end insert— ("(3A) Once notification of the particulars of a specification under subsection (1) above in respect of any year has been given to an authority by the appropriate Minister, the amount of prescribed expenditure so specified shall not subsequently be reduced.").

The noble Baroness said: My Lords, I beg to move Amendment No. 117A. Local authorities need to have the assurance that, having been notified of their capital spending allocation, it will not be subsequently cut. Any such reduction places authorities in a very difficult position vis-à-vis existing contractual commitments and it completely wrecks the authorities' ability to plan their capital programme even one year in advance, which is why we feel that an instant moratorium, such as the one we had last week, should not be possible.

On capital expenditure, it is the DoE and the Treasury who fire the shots; on current expenditure perhaps they have a rather more remote and unpredictable impact through the RSG. Yet it is current expenditure, broadly speaking, that represents the local authorities' own manpower costs, whereas capital expenditure represents other people's manpower and their jobs. So when a moratorium like last week's is declared, it is private enterprise in the construction industry that is the worst hit. For some reason, thankfully, new towns and housing associations are not yet affected. But if this freeze is to remain, the construction industry will bear the brunt of the battle against inflation and those desperately needing houses will suffer even more.

There is no record of overspending on capital expenditure by local authorities on housing on its total in past years. We believe thst there is no suggestion strong enough to justify such an assumption for this year. Housing expenditure by local government has been reduced dramatically. The level for this year has been reduced by nearly half since 1974–75, from £7,154 million down to £4,700 million. The housing investment programme has been slashed over the last 12 months. In 1979–80, that allocation was £3,291 million, repriced, allowing for a 15 per cent. inflation. This was cut further still in August 1979 to £2,926 million and again in February 1980 to £2,199 million, a total cut of £1,092 million.

Large capital schemes cannot just be switched on and off like a tap. The authorities ate doing their very best to reduce their capital expenditure, but it is just not possible to stop a scheme when the authority has contractual commitments. By April something like 17 out of the 28 metropolitan authorities had already frozen capital schemes, and there had been a similar reaction by the London boroughs. When such tremendous cuts are made as late in the day as this year, it is not surprising that the authorities will incur a substantial proportion of their expenditure in the early months of the year.

If there is an overspend of £180 million this year, as the Secretary of State alleges there may be, this would not be due to over-programming by local authorities, but to the effects of the Government's economic and monetary policies on the building industry. These are the higher levels of inflation on building costs, an acceleration of building contracts due to desperate shortage of work and an increasing pressure on local authorities for prompt payment by contractors who are running very short of finance.

The disruption caused by the moratorium will be enormous. Over 75 per cent. of the Government's total cuts in public expenditure are falling on housing. The Government's actions are quite inconsistent with their promise to local government. They have said that local authorities would have freedom within the announced expenditure programme, and yet the moment one quarter's figures for merely one block of expenditure within the total are produced the Government have gone back on their promise. In the late Tony Crosland's time at the Department of the Environment we, in local government, were told "The party's over". Today, to quote the Daily Telegraph of last Friday, "The party may be over, but the waiters linger on", and there must be a better way out than that. I beg to move.

Lord BELLWIN

My Lords, at first I had some difficulty in recognising the amendment at all, but I understand that the noble Baroness—I think very fairly—took the opportunity to raise this particular point. I have no complaint as to that, except that in return I am sure she will not have any complaint if I make a few observations on her remarks. The noble Baroness referred to the housing investment programme being slashed. I would simply tell her that we still have a long way to go before, if ever, we reach the point of slashing it—if that is the right word—as much as the Labour Government slashed it during their term of office; but perhaps the less said about that the better.

I should say that, in fact, we have cut nothing at all; we have simply said that there is an indication of a likely substantial overspend—and I consider £180 million to be substantial—and that until we have been able to verify that one way or another, we have imposed a moratorium on the situation. When all the figures are in, if it proves not to be so then we shall, of course, resume as we were. But there is no intention at all to cut back from the £2.2 billion that was allocated in the first place.

Finally, on this point, may I remind the noble Baroness—slightly painful though it may be—that in 1976 local government was charged by the then Labour Government with making an immediate cut of 5 per cent. in its capital programmes, which was an enormous amount. As one who was charged in my then own authority with carrying it out, I know exactly what it entailed, and it was no mean task. However, I accept that the point has been made.

I sympathise with the thinking behind this amendment because local authorities must know what is the minimum that they will be able to spend in any year if they are to carry out their capital programme for that year with any confidence. I am not sure if it is realised that the amendment is incompatible with Clause 70 of the Bill as it now stands. This clause empowers the Minister to withdraw an allocation to the extent that it relates to payments which the authority has not already made and is not under a binding contract to make.

We recognise that reductions in capital spending in the course of a year may be difficult to achieve without disruption of capital programmes. But on the point that the noble Baroness made I must repeat that we are not talking about cuts in a programme; we are only talking about ensuring that the authority does not overspend—there is no question of a cutback at all. We also appreciate that an authority must not be put in the position of being unable to make payments which it is contractually bound to make. Therefore, Clause 70 contains safeguards for authorities in this respect. The power to withdraw expenditure allocations once they have been announced is obviously one which the Government would be most reluctant to exercise. But it is essential—no less than the Government in 1976 apparently felt it was essential—that there should be a power to put the brakes on swiftly and effectively if the national interest requires.

As I said in the last debate, so far as I am concerned at the end of the day the national interest must be overriding. I bow to no one in my wish that local government should have its right to operate and function as it seeks to do. But at the end of the day the national interest must be overriding. For that reason, I fear that I cannot accept the amendment.

Baroness STEDMAN

My Lords, I am sorry that the noble Lord has taken that attitude. I, too, have the national interest at heart. I am concerned about the hundreds of thousands of people who are unemployed at the moment. I am concerned about the construction firms and those associated with them who are going bankrupt and having to get out of business. Although it may not be a cutback with the moratorium we have had, industry and local government cannot proceed with these series of stops and goes. They must have a programme which they can carry out and know that they will be able to carry out.

When the Government intervene with a moratorium, for however short or long a time it may last, there is disruption within the local authority services. There is heartbreak for people who thought they would get accommodation and now have all their fears roused that they will not. If it can happen with housing, it can happen in all the other areas of local government. By this amendment we wanted to highlight the dangers of a Secretary of State being able to insist on moratoriums and perhaps even cutbacks at any stage in the year he wanted, with the ultimate bad feeling between local authorities and the Government and the tremendous distress that it causes, not only to people who cannot get jobs but also to people who are waiting for houses.

I am sorry that the noble Lord does not feel able to accept the amendment. I shall not press it, but I hope that we have made our point, that we do not like this way of the Government interfering in the spending policies of local authorities. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 12 [Expenditure of Greater London Council]:

[Amendment No. 117B not moved.]

Lord BELLWIN moved Amendment No. 117C: Leave out Schedule 12.

The noble Lord said: My Lords, I spoke to this amendment when I dealt with Amendment No. 98B. I beg to move.

Clause 82 [Distribution of planning functions between planning authorities]:

4.50 p.m.

Baroness STEDMAN moved Amendment No. 118: Page 72, line 28, at end insert— (". If, following the consultation provided for in subparagraph (1) above, the district planning authority proposes to grant planning permission contrary to the views expressed by the county planning authority, they shall notify the Secretary of State of their intention and shall not determine the application until, either—

1. (a) the Secretary of State has notified them that he does not intend to use his powers of direction under section 35 of the Town and Country Planning Act 1971; or
2. (b) 21 days have elapsed;

whichever is the earlier.").

The noble Baroness said: My Lords, we return to a point on which we had considerable discusion at Committee stage where we had some support for the amendment as we then framed it from the noble Viscount, Lord Ridley, and the noble Lord, Lord Sandford, and others who felt that we were perhaps strengthening the amendment before us by the noble Viscount, Lord Ridley, but they were not prepared at that time to come into the Lobbies with us. We have put forward another amendment, not quite so tough but we still think strengthening the one that the noble Viscount, Lord Ridley, had put forward, and would perhaps meet the wishes of him and his noble friends and perhaps even get some support from the Minister.

What we are trying to do is to ensure that the strategic planning policies are adequately protected during the day-to-day exercise of the districts' development control functions. Most of the counties think that this would be best done by them having reserve powers to determine applications where districts intend to breach the strategic planning policies. However, an amendment designed to give the counties the power to call in was tabled and it was defeated at Committee stage. This, while it is a second best, goes a little further than what we have in the Bill at the moment.

We think it is building on the amendment which the noble Viscount, Lord Ridley, successfully moved in Committee setting out the types of planning applications on which districts would have to consult counties. It provides that, where following this consultation the county advise the district that planning permission should not be granted and the district take the contrary view, there is a period of enforced delay of not more than 21 days to give the Secretary of State time to consider whether he should call in the case for his own determination. This would ensure that, in all the cases where there was a clash between county and district views, the district could not determine the application until the Secretary of State could have an opportunity to consider both sides of the case.

Perhaps the existing procedures under which the Secretary of State is notified of any substantial departures from the development plans are expected to continue, and perhaps the Government think that might be sufficient to meet the point. But we think that the cases that are covered by these procedures are only a small proportion of those which in the counties have a legitimate interest and will be consulted under the provision of Lord Ridley's amendment. There may be objections to the delay in the new procedure of the 21 days, but disagreements between counties and districts should be comparatively rare, and when they occur some delay is surely a reasonable price to pay for the safeguard which the Secretary of State's involvement would provide.

It does not necessarily mean any additional work for the Civil Service, although some may be unavoidable if the Secretary of State holds to his view that only central Government should be given the power to intervene in district decisions that appear to be going wrong when seen in a wider context. If this is not acceptable, and if the noble Lord perhaps thinks that the principle behind it might be, and if we have not drafted it right, then perhaps we might consider at the next stage of the Bill, if necessary, perhaps amending it yet further. I will not say watering it down yet further, but certainly amending it yet further to give the Secretary of State power to make regulations to give effect to the substance of this amendment. If that would be more acceptable to the noble Lord opposite, then we will be happy to withdraw this one and come forward with that one at Third Reading. I beg to move.

Lord BELLWIN

My Lords, I have heard of a step-by-step rearguard action, but this is ridiculous!

Baroness STEDMAN

We do not give up.

Lord BELLWIN

Before I indicate our view of this amendment may I clarify the existing arrangements for notifying the Secretary of State, and also what we are proposing to do under the arrangements to be introduced by Clause 82. Under the existing definition of county matters, counties deal with all applications which would conflict with or prejudice the implementation of fundamental provisions of the structure plan. In other words, counties deal with cases which are major departures from the plan leaving districts to deal with minor ones. The Town and Country Planning Development Plans Direction Act 1975 requires planning authorities to go through certain safeguarding procedures when they intend to allow a departure. Very briefly, districts are required to advertise those cases with which they are dealing, and that is the application for minor departures, while counties are required to notify the Secretary of State of this—that is, the major departure applications—and he has 21 days in which to decide whether to call in a case for his own decision.

But under the provisions of Clause 82 the fact that a development would depart from a fundamental provision of the structure plan will no longer be a reason for it to be a county matter. However, we intend to preserve the substance of the departure procedure and we shall be revising the development plans directions accordingly. We shall provide that any application for which a district or county wants to grant permission, and which departs from a structure plan in any significant way, must be notified to the Secretary of State who will have 21 days within which to call the case in.

We shall also be providing that, if there is a case which the district is deciding, the district must enclose with its notification any observations it has received from the county as a result of the consultations which Clause 82 requires. Given that undertaking, I hope that the noble Baroness, Lady Stedman, will agree that a provision in the Bill would add nothing to the safeguards. The development plans directions made under the GDO and the Town and Country Planning Act have precisely the same binding force as the Act itself.

The only further effect of this amendment seems to be an unfortunate one. It would extend the number of applications to be notified to the Secretary of State to include even those which conform to the structure plan. If a county had objected, the Secretary of State would then need to be notified, for example, of any development that might be effected by a mineral working; or of a development on land which the county wished to develop themselves; or any development on land proposed for a waste disposal site. I cannot accept that such disputes as these cannot be settled at local level. They do not affect the structure plan, and they are certainly not the sort of cases which civil servants should be checking through, nor should central Government be taking decisions on them.

This is one of a number of such matters in general where noble Lords opposite and indeed my noble friends are naturally anxious to ensure that there be no departures from what the Act lays down, and that we make things work as smoothly and effectively as possible. I recognise that. The last thing this is: Is that political in any way? It is an attempt to make it work better. I accept and recognise that. I hope in return that the noble Baroness will feel in this case that what I have said also has some merit. While I cannot go along with the amendment, may I say again that I very much respect what she and others are trying to do in dealing with this part of the Bill in this way.

Viscount RIDLEY

My Lords, as the noble Baroness, Lady Stedman, referred to me in moving this amendment might I say that I would in principle support what she is trying to do. I think we are all trying to do the same thing. It is for her to say whether or not she wishes to pursue this matter, but we would feel that she is very much to be supported in this. Perhaps the Minister has answered it adequately. My only worry is whether any Ministry can ever answer anything in 21 days. I have never known that happen yet. Maybe there is a new wind blowing through Whitehall.

Lord STANLEY of ALDERLEY

My Lords, I should like to support this amendment not because I have any particular desire to cause any more trouble between the district and county councils but because so far, despite the words that my noble friend has said, he has put nothing into the Bill to protect the structure plans and prevent the needless waste of agricultural land. All we have had so far, I am sorry to say, are comforting words, and to me and I think a large number of people those words are not good enough. Something at some stage must be written into this Bill to protect the structure plan and agricultural land from being needlessly lost.

I hope, therefore, that my noble friend Lord Bellwin when he decides what to do will be able to give me some concrete evidence of the Government's wish to prevent needless land take. If he does not, I am afraid that I too will have to feel obliged to follow the noble Baronesses into their Lobby.

Lord SANDFORD

My Lords, I hope that the noble Baroness will accept the advice of my noble friend and now be content to leave well alone. It has taken a long time to get the division of planning functions properly balanced and established, and I think the amendments moved by my noble friend Lord Ridley at the Committee stage, and accepted by the Government, did achieve this. I am sure there are contained now within the Town and Country Planning Act 1971 coupled with this Bill sufficient provisions to safeguard the position about which the noble Baroness is worried. I do not think anything that could be put into any legislation will ever entirely satisfy farmers about the take of agricultural land, but so long as my noble friend goes on making the point, the district councils will bear it in mind and do their best.

Baroness STEDMAN

My Lords, I am grateful for the support I have received from the Benches opposite. I have conflicting advice, whether to take noble Lords into the Division Lobby or accept what the Minister said, but I think I owe it to the counties, which are still concerned about the matter, to test the feeling of the House. I assure the Minister that, if I do so, I shall not return with regulations on Third Reading. Some of the counties and their planning departments are still extremely worried that while the amendment of the noble Viscount, Lord Ridley, made things better than they were, it did not do all the things that some of the counties wanted, and I therefore believe I should be letting down my colleagues in local government if I did not ask the House to divide on this issue.

Lord BELLWIN

My Lords, with the leave of the House I will make a few more comments, not least in view of what my noble friend said about going into the Lobby against us, and a few additional observations may influence the noble Baroness, Lady Stedman, even at this last gasp stage. I should point out that the inescapable consequence of the amendment, all else apart, would be a greater flow of paper; applications that would not otherwise need to be notified would have to be notified, meaning more man hours, more paper passing, more delay and more involvement by central Government in local government affairs—in short, more bureaucracy—and I wonder whether that cost is justified.

The question I ask your Lordships to consider is who would benefit from the amendment. The district councils would certainly not benefit; they would have to copy more papers to the DoE. I do not see how the county councils would benefit; if they believe the Secretary of State should call in an application they can make representations themselves. The DoE would not benefit; it would have a greater burden of cases to look at. The applicant would suffer because an additional delay would have been introduced in some cases. In that this seems to be a marginal matter so far as the noble Baroness is concerned, these last remarks may have swung the

balance and she may now not find it necessary to divide the House; otherwise your Lordships will have to come to a decision on it.

Baroness STEDMAN

With the leave of the House, my Lords, the noble Lord is trying his blandishments on me, but I shall remain firm. This is a long-stop position, not something that will happen every day. A little more paper in and out of Marsham Street will not make all that much difference so far as I can see and therefore, while the Minister has made a valiant attempt, I must ask the House to divide on this issue.

5.3 p.m.

On Question, Whether the said amendment (No. 118) shall be agreed to?

Their Lordships divided: Contents, 103; Not-Contents, 108.

CONTENTS
Airedale, L.	Gordon-Walker, L.	Peart, L.
Amherst, E.	Gosford, E.	Phillips, B.
Ardwick, L.	Greenwood of Rossendale, L.	Pitt of Hampstead, L.
Auckland, L.	Hale, L.	Ponsonby of Shulbrede, L. [Teller.]
Aylestone, L.	Hampton, L.
Bacon, B.	Hanworth, V.	Rhodes, L.
Balogh, L.	Hatch of Lusby, L.	Ridley, V.
Banks, L.	Henderson, L.	Rochester, L.
Beaumont of Whitley, L.	Houghton of Sowerby, L.	Ross of Marnock, L.
Beswick, L.	Hughes, L.	Salisbury, M.
Birk, B.	Hutchinson of Lullington, L.	Scanlon, L.
Blease, L.	Jacques, L.	Segal, L.
Blyton, L.	Jeger, B.	Shinwell, L.
Boston of Faversham, L.	Kaldor, L.	Stamp, L.
Bowden, L.	Kilbracken, L.	Stanley of Alderley, L.
Brockway, L.	Kinloss, Ly.	Stedman, B.
Bruce of Donington, L.	Leatherland, L.	Stewart of Alvechurch, B.
Byers, L.	Lee of Newton, L.	Stewart of Fulham, L.
Caithness, E.	Listowel, E.	Stone, L.
Chelwood, L.	Llewelyn-Davies of Hastoe, B. [Teller.]	Strabolgi, L.
Chitnis, L.		Strathspey, L.
Cooper of Stockton Heath, L.	Lloyd of Kilgerran, L.	Strauss, L.
David, B.	Longford, E.	Taylor of Mansfield, L.
Davidson, V.	Loudoun, C.	Underhill, L.
Davies of Leek, L.	Lovell-Davis, L.	Wade, L.
Davies of Penrhys, L.	McNair, L.	Walston, L.
Donaldson of Kingsbridge, L.	Maelor, L.	Wells-Pestell, L.
Elwyn-Jones, L.	Masham of Ilton, B.	Whaddon, L.
Evans of Claughton, L.	Meston, L.	Wigoder, L.
Foot, L.	Milverton, L.	Wilson of Radcliffe, L.
Gage, V.	Mishcon, L.	Winstanley, L.
Gainford, L.	Monckton of Brenchley, V.	Wise, L.
Gaitskell, B.	Morris, L.	Wootton of Abinger, B.
Gisborough, L.	Nunburnholme, L.	Wynford, L.
Glenamara, L.	Oram, L.	Wynne-Jones, L.
NOT-CONTENTS
Ailesbury, M.	Allerton, L.	Avon, E.
Airey of Abingdon, B.	Ampthill, L.	Bathurst, E.
Alexander of Tunis, E.	Atholl, D.	Bellwin, L.
Belslead, L.	Glenkinglas, L.	Minto, E.
Berkeley, B.	Gormanston, V.	Mottistone, L.
Bessborouth, E.	Haig, E.	Mowbray and Stourton, L.
Braye, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Murton of Lindisfarne, L.
Brentford, V.		Newall, L.
Buxton of Alsa, L.	Halsbury, E.	Northchurch, B.
Caccia, L.	Harmar-Nicholls, L.	Nigent of Guildford, L.
Camoys, L.	Harvington, L.	Onslow, E.
Campbell of Croy, L.	Hatherton, L.	Orkney, E.
Cathcart, E.	Henley, L.	Orr-Ewing, L.
Cockfield, L.	Hillingdon, L.	Rawlinson of Ewell L.
Cork and Orrery, E.	Holderness, L.	Redmayne, L.
Cottesloe, L.	Hornsby-Smith, B.	Renton, L.
Crathorne, L.	Inglewood, L.	Romney, E.
Croft, L.	Ironside, L.	St. Aldwyn, E.
Cullen of Ashbourne, L.	Jeffreys, L.	St. Davids, V.
Dacre of Glanton, L.	Kemsley, V.	Sandford, L.
de Clifford, L.	Kilmarnock, L.	Sandys, L. [Teller.]
De Freyne, L.	Kimberley, E.	Savile, L.
De La Warr, E.	Kinnaird, L.	Sempill, L.
Denham, L. [Teller.]	Kintore, E.	Spens, L.
Digby, L.	Knutsford, V.	Sudeley, L.
Duncan-Sandys, L.	Lindsey and Abingdon, E.	Swansea, L.
Ebbisham, L.	Long, V.	Swinfen, L.
Eccles, V.	Lyell, L.	Torphichen, L.
Ellenborough, L.	McFadzean, L.	Trefgarne, L.
Elliot of Harwood, B.	Mackay of Clashfern, L.	Trenchard, V.
Elton, L.	Macleod of Borve, B.	Ullswater, V.
Evans of Hungershall, L.	Mancroft, L.	Vaizey, L.
Exter, M.	Mansfield, E.	Vaux of Harrowden, L.
Ferrers, E.	Margadale, L.	Vickers, B.
Fortescue, E.	Marley, L.	Vivian, L.
Fraser of Kilmorack, L.	Massereene and Ferrard, V.	Willoughby de Broke. L.
Gainsborough, E.

Resolved in the negative, and amendment disagreed to accordingly.

5.13 p.m.

Lord MOTTISTONE moved Amendment No. 118A: Page 74, line 3, at end insert— (ce) the erection of any building, plant or machinery which it is proposed to use for the manufacture of bricks or clay roofing or floor tiles.").

The noble Lord said: My Lords, at the Committee stage there was a series of amendments under the broad heading of clarifying those planning matters which come under the county and those which come under the district in the general area with which Amendment No. 118A is concerned. The Government very generously accepted the majority of those amendments, but an amendment similar to, though not exactly the same as, the one that I am now asking your Lordships to consider, relating to brickworks, was turned down by the Government. At column 911 my noble friend Lord Sandys, speaking for the Government, said, among other things, that steelworks and chemical works would be a good example of plants that could be compared with brickworks, where minerals might be mined separately from the works.

To take that matter first, I suggest to your Lordships that there is not a great similarity among steelworks, chemical works and brickworks. First, the chemicals are rarely, if ever, mined on site, whereas brickworks usually are sited by their clay pits. Steel is made of many minerals the mining of which is inevitably spread over many areas, and bricks and clay tiles, to which this amendment refers, are almost always made from only one mineral, clay. Steel production is also different in that it is much more labour-intensive than brick and clay tile making, and a steelworks is therefore much more akin to a factory, which indeed is another point that my noble friend Lord Sandys made when giving an example of why brickworks should not receive similar treatment to other matters with which the Government agree.

Having said that in answer to the Government's points made in Committee, I would go further and say that, thanks to the acceptance by the Government of an amendment which has led to what is now Clause 82(4)(a) in this Bill, the vast majority of brick and clay tile works will be county planning matters anyhow. What we have to consider are the few exceptions to this rule, and I suggest to your Lordships that these few exceptions need to be treated similarly for consistency. I should like to make one other point and then give your Lordships a couple of examples in support of my suggestion that the amendment is a sensible one. The first point that I should like to make and to bring to the Government's attention is that the amendment does not relate to refractory products, other than bricks. May I say by way of example, that to avoid dealing with two planning authorities a person building a new brickworks might put it close to its clay pit rather than on a site which might otherwise be generally acknowledged as being more practical and more environmentally suitable. For example, such action might be taken to avoid crossing a public highway, or even a green lane, or public footpath, so as not to risk an unnecessary complication of change of planning authority.

Another example which might arise concerns the point that a brickworks sited near its clay pit will already be a county matter for planning purposes. As its first pit becomes worked out, a new pit that is outside the specifications covered by Clause 82(4)(a) may be discovered. So long as the old pit can continue to be worked, the brickworks remains a county planning matter, even though the bulk of its clay may be coming from the new pit. As the Government will know, it is always hard to tell when a pit is fully worked out. Thus the moment at which a brickworks would have to be transferred to being a district planning matter will be uncertain, and the effect of this, if my proposed amendment is not accepted, will be that questions of economic and environmental importance such as whether to build a new brickworks adjacent to the new pit will be strongly affected by the administrative uncertainty created by the Bill as it stands at the moment. In conclusion, I understand that the Association of District Councils has no specific objection to this amendment, and I hope very much that the Government will accept it. I beg to move.

Lord BELLWIN

My Lords, I do not wish to enter into an argument as to whether a brickworks is more like a cement works or a chemical works. Clearly, there are many manufacturing processes which operate using one or more minerals as their main raw material. Just as clearly, we do not want to make elaborate divisions into categories of manufacturing in order to decide whether something is a county matter or a district matter.

Clause 82 has already been amended to give counties responsibility for manufacturing which takes place on a mineral extraction site or somewhere that has a pipeline or similar transport link to the mineral extraction site. That is clearly desirable if the whole complex process on one site is to be dealt with by one authority. Many brickworks will be covered by these provisions, but, where a brickworks is completely divorced from its source of raw material, I do not see in planning terms why the county's special planning expertise in mineral matters needs to be brought to hear. If the district decides the case, it can, and no doubt will, call on the county's expertise for advice when it needs it.

This is yet another instance where finely balanced judgments are required. There is certainly a case for saying that one should accept the amendment, but on the other hand I think that the weight of judgment just comes down against doing so. In saying that, I hope my noble friend will appreciate the sympathy I have for what is a fairly finely drawn matter; but I feel that, on balance, we are not able to accept it, and I wonder whether he may feel equally able, therefore, not to press it.

Lord MOTTISTONE

I slightly feel that my noble friend might think differently when he reads in the Official Report what I had to say, because I rather think that what I said in fact answered what he said to me before he said it. I think that the balance of the argument—of course, perhaps I have a special interest in this—leans towards me rather than towards him. This is not of vital importance in one sense only, and that is that the number of brickworks affected is relatively few; but I think that in not accepting it my noble friend will have created the very disadvantageous situations which I quoted to him. However, having said all that I do not think it is worth pressing it at this stage, and I therefore beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

Clause 83 [Fees for planning applications etc.]:

The DEPUTY SPEAKER (Baroness Wootton of Abinger)

My Lords, I have to point out to your Lordships that if Amendment No. 120 is agreed to I shall not be able to call any of the succeeding amendments down to and including Amendment No. 120H.

5.22 p.m.

Lord MORRIS moved Amendment No. 120: Page 76, line 10, leave out subsection (1).

The noble Lord said: My Lords, as your Lordships are no doubt all aware, this amendment is fundamentally a wrecking amendment, and it is in effect to emasculate the pernicious Clause 83. That is precisely the same intention, of course, as that of Amendment No. 127, down in the name of the noble Lords. Lord Evans of Claughton and Lord Mishcon, which reads: Leave out Clause 83". In moving this amendment I believe it would be wrong to go through the many arguments that were gone through at Committee stage. However, as we are talking of a matter of fundamental principle I believe it is important to refresh one's mind that what this is all about cannot be seen or understood unless one concedes the purpose of planning, which, in the words of the noble Lord, Lord Bellwin, is— to reconcile, ideally if possible and by compromise if not, conflicting demands on and policies affecting land use in a small crowded island which needs to protect its countryside and wild life, promote its agriculture, improve its housing and social and leisure facilities and regenerate its industrial base".

In so saying, it is apparent to all that those who benefit from planning make up the country as a whole. Yet this Government have tried to establish the fact that they are not charging a fee, or making a charge, to the developer. But in the same breath they say that they are charging a fee to offset part of the cost of processing a planning application. This must be wrong in principle, despite the very neat analogy drawn by my noble friend Lord Bellwin in Committee (which I must say was a lovely one and which floored me at the time) of the driving test. He stated: … a driving test is a public service. The applicant does not sit it to assure himself of his own ability. It is not optional".—[Official Report, 13/10/80; col. 936.] All analogies are dangerous, but I think this one is particularly specious because the driving test is concerned with two fundamental things, one of which is safety and the other of which is health. I would definitely accept that analogy as far as the building regulations are concerned, under which certain applications are of course chargeable; but planning has nothing whatever to do with the health or safety of the individual, except very indirectly.

There is another point which came up and which I believe is of fundamental importance. It was raised by my noble friend Lord Boyd-Carpenter, who unfortunately could not be here today. That was when he asked the most trenchant question of my noble friend Lord Bellwin. It went like this: Although he"— that is, Lord Bellwin— has given the Committee the figures of charges now contemplated, should the clause become law the Secretary of State could by regulation increase it almost indefinitely". Lord Bellwin answered: That is absolutely right. I was going to say that the final charge will be fixed by regulation. Yes, of course it can. Conversely, it could also be reduced if it was felt that was the thing to do". [col. 938.] I ask your Lordships to consider that very carefully indeed, and to think: When was the last time any fee was charged for any application; or, for that matter, when was the last time that any direct taxation or impost (call it what you will) was imposed?

As I have said, this matter was argued at very great length in Committee and I do not want to say more as I happen to know that there are many noble Lords who wish to contribute to this particular debate. I beg to move.

Lord GISBOROUGH

My Lords, I should like to support this amendment briefly. Planning already is a great cost to developers. It involves considerable delay—very often, most protracted delay—and this often involves the very high cost of servicing what may be an outlay on buildings or whatever. A big risk is involved, which is of not getting permission for something which a developer may wish to do; and there is exposure to political whim, which whether one likes it or not is there regardless. Then, one is in fact buying something which one does not even want. With a driving licence, one wishes to drive so one is prepared to pay for driving instruction, and so on. But nobody wants to have planning permission; it is a statutory necessity. Apart from having to have it, you do not want to buy; that is the last thing you want to do. I think it is a most iniquitous concept, that you have to buy something which you do not even want in the end.

The Earl of CAITHNESS

My Lords, I must apologise to the House in the first instance if, on this amendment, I speak for rather longer than I would normally, but it is a most important subject and I was thwarted by prior commitment from speaking on Second Reading and on the appropriate day of the Committee stage. On the question of principle, other noble Lords have argued this case in Committee far better than I could. Of course it is wrong, and I believe it is the thin end of the wedge for further charges to be made. Many noble Lords will be aware that the farming and land-occupying community is gravely concerned at the moment about present and proposed legislation, and in particular whether there appears to be an increasing role for the Department of the Environment at the expense of the Ministry of Agriculture, Fisheries and Food. We are told not to worry, and that it is the Government and not the individual departments that matter, as there are regular inter-departmental meetings and liaison.

Accordingly, I would refer my noble friend Lord Bellwin to col. 1444 of Hansard of Wednesday the 15th of this month, and to the words spoken by his ministerial colleague, Lord Belstead. I quote: I think it will be found there is probably not agreement, and if th re is not agreement at local level I suspect that the Department of the Environment would not wish to carry the matter any further". Will my noble friend give me a simple "Yes" or "No" as to whether he supports that statement? If he does, his conscience is clear to agree this amendment, as those primarily involved at local level—among others, the Royal Institution of Chartered Surveyors, the CBI, the Housebuilders' Federation, the Royal Institute of British Architects and the Royal Town Planning Institute, together with many small businesses who have no united representative—are against this clause. If he does not support and agree the remarks of the noble Lord, Lord Belstead, then Government's co-responsibility could be seriously questioned.

I turn to the effect of this clause and I must declare an interest as a chartered surveyor. Most of my work concerns developments and I act, among others, for developers in pension funds concerned with this matter. I have some experience and this leads me to the conclusion that the Government do not understand development except in local authority terms. Under the proposed charges, commercial properties will all be charged on the same scale per square foot; yet there is a vast difference in the cost of building a 20,000 sq. ft. factory, a 20,000 sq. ft. shop or a 20,000 sq. ft. office block. The office block could cost five times as much to build as the factory. This is totally inequitable and prejudicial against the factory development which this country badly needs.

Although my noble friend will say that this is a detailed matter, it does show the absurdity of having charges at all. The Government argue that in relation to the overall costs of development the proposed charges are small. I would contest that. But obviously it has not occurred to the Government that some developments do not make the profits that they suppose. I know of many that have made losses owing to a variety of factors, and of instances where development companies have gone into liquidation. This tax on planning applications is indiscriminate and bears no relation to the profitability, or otherwise, of any scheme. In these circumstances to say that the fees will not add to the cost of the development is wrong. It will make development more difficult in the marginal and assisted areas of the country which are usually those which are most in need of new development.

The next point is the claim that in view of the time spent by local authorities on planning applications, some of the cost must be recouped. Who obtains the benefit of any development? A developer may or may not make a surplus on cost. He employs builders, solicitors, architects, quantity surveyors and engineers; and some of these jobs now will be put in jeopardy. The local authority gain from levying rates on development and furthermore it could solve local employment and social difficulties. I know of a number of developments that did just that. Is it fair to have charges for planning applications as well when the local authority and the community already benefit and when the statutory undertakers receive benefit from the increased use of their services?

My last point concerns the small, new, one-off developer. I have already raised this point with the Minister and I hope that he appreciates the gravity of the problem. When one starts a new business one often works for some months or even years without remuneration until the business can afford to reward one for one's efforts. In development, it can take many months or years to put a site together and to work up a viable scheme; and often one does not receive any payment until the particular development is completed. I ask your Lordships to take this true case where the developer was a small and new business with no cash flow. A proposition was put forward and it was agreed that the development would be viable. The directors of the firm accordingly gave their time free of charge in trying to take the matter further. Quantity surveyors, architects, engineers and even a solicitor speculated their time, on the understanding that they would receive payment only if the scheme went ahead. The first payment they received was 3½ years after the proposition was first put to them. If there had been a charge for the planning application the scheme could not have been considered. The hank had lent money to the company to start, but they confirmed to me subsequently that they would not have funded a planning application because there was no guarantee that it would be approved.

That is not an isolated case. I know of many similar cases. One reads in the Press only of the large public-company developers but seldom, if ever, of the small man who is essential in carrying out the small schemes that the large companies will not undertake. These are the very people who supported this Government; these are the people that this Government wish to encourage; yet these are the people to whom this particular clause will ring like a death knell. This Government cannot treat small businesses and individuals so shabbily. I hope that noble Lords who have listened to this argument and the other arguments put forward will support my noble friend and rid the country of the effect of this pestilent clause.

5.34 p.m.

Lord EVANS of CLAUGHTON

My Lords, may f speak in support of the amendment moved by the noble Lord, Lord Morris. I agree with his amendment which was supported by other noble Lords and I agree with a lot that the noble Earl, Lord Caithness, said, except that I did not like the dismissive way—and I should declare an interest here since I am a solicitor—in which he said, "even a solicitor" was willing to speculate. That went to the heart! But, in addition to some of the eminent bodies mentioned by the noble Earl, the Law Society itself is opposed to the imposition of planning charges. This may seem to some a good reason to vote against the amendment. Nevertheless there is a formidable array of people who are deeply involved in the planning process who are universally condemnatory of the proposals included in the Bill.

At this stage I deal with the principle; because if this amendment is not carried there is a large number of other amendments dealing with the detail, including one in my name dealing with the small developer. To me and, I think, to most of your Lordships, the point is one of principle: that, basically, people who own land or have an interest in land should be allowed to use it in the way they want. The planning laws in a complex, civilised society are a limitation, but we accept them as necessary. To take this further and to say: "You are entitled to use your land as you want provided you will accept the planning laws so as to protect other people; but for the privilege of doing something to limit your own right to use your own land in the way you want, you have to pay" seems outrageously contrary to the whole practice and use of the management of land in this country over very many years.

Lord Bellwin said in his speech in Committee that this is a small imposition on the average developer, considering that it is only a small part of the whole of his development, but I would mention that, in addition, the developer will have to pay for by-law consent. As a matter of principle, this is quite proper, because by-law consent protects the individual who occupies the dwelling from bad workmanship and personal danger; it is not to protect society. But the developer has to pay for that, for supervision of Highways Act legislation, for connecting charges, for gas and electricity and so on; and it seems to me that if the argument is put forward, as was put forward previously by Lord Bellwin, that this is a small thing, to many people it would be the straw that would break the camel's back, there being one imposition after another and this being the latest. As the noble Lord, Lord Morris, has said, there is no protection and no indication (as was mentioned also by the noble Lord, Lord Boyd-Carpenter) that this charge would be kept within a reasonable limit. There would be opportunities for the price to go up and up.

The basic point of this amendment, as opposed to the points of detail which may be discussed later, is that if one limits people's rights to use their land in order to protect society as a whole, it is very wicked that society as a whole should then impose a charge on those people for limiting their rights. On that ground, I support the amendment.

Lord PONSONBY of SHULBREDE

My Lords, may I first congratulate the noble Lord, Lord Morris, on putting down the amendment again at Report stage. I have been happy to associate myself with him. I have found this a most unsatisfactory clause all along, partially because it is not stated, and never has been fully stated, on what basis it is proposed to charge the fees. One should remember that local authorities often welcome increased development in their areas because of the advantages which development will bring them, whether it is the advantage of an increased rate poundage which many areas feel they profit from or whether it is some specific civic advantage which can be obtained from the development.

I am particularly reminded that in London the development of the river walkway on the southern bank of the Thames has very largely come about because the developers have been prepared to seed and build sections of the walkway as they have developed particular sections of the South Bank. Again, one thinks of developers agreeing, without cost to the local authority, to set back their developments for the purpose of road improvements. Those are all benefits which could be given a cash equivalent if anybody cared to work it out. Here we are proposing to charge developers considerable sums of money for making the development in the first place. Therefore it may well be that these particular civic advantages which accrue in one form or another, as I have outlined, would not accrue in the future if these charges were forced on them.

Another aspect is that planning authorities very much welcome the situation where a developer will submit a dozen or so outline applications for a particular site. He can then discuss with the planning authority the most suitable treatment of the site to meet the needs of the area. This sometimes gets developers into trouble. We had a discussion earlier in the session on the "Green Giant" development near Vauxhall Bridge. Those of us who looked into this development knew that this was a non-starter. That was one of 11 or 12 applications which were submitted for that site. The number of applications a developer puts in will be restricted by this clause. The planning authority will be restricted in choice and a decrease in civic advantages will follow. The clause is most unsatisfactory as it now stands. I have pleasure in supporting the noble Lord, Lord Morris.

Viscount RIDLEY

My Lords, may I say a word in support of the noble Lord? I spoke in his support in Committee stage and nothing has happened to change my mind. May I say as briefly as possible that the user of a service should pay some small percentage of the costs that he incurs. I raised a point which has not yet been answered: the proposals are that private applications for planning permission should carry a charge but the Government should exempt themselves and the nationalised industries from such a charge. My noble friend has been kind enough to write to me on this subject but he has not convinced me. My support is wavering because we are in danger of "clobbering" the private sector in favour of the public sector. If this clause is to be accepted by the other House, then we should make it clear—and I have not an amendment down, but I may put one down for Third Reading—that everybody should bear the burden alike, whether nationalised industry, the National Coal Board or the Minister himself. It is not fair that the costs should fall just on the private sector.

5.44 p.m.

Lord BELLWIN

My Lords, I assume that it is for the convenience of the House that I should speak also to Amendments Nos. 120A to 120G and 127. In Committee we debated at considerable length the general principle of charging for planning applications. I set out extensively the Government's reasoning on it. I do not think that your Lordships will expect me to repeat at length all that I said then. I have gone into the matter very closely since that time in correspondence with my noble friend Lord Boyd-Carpenter and in discussions with my noble friend Lord Caithness and others, and have thought and discussed this matter extensively.

Let me say at once—and it ought to be made clear—that public services are never free. Somebody always pays. When we pay our rates and taxes it is not easy to see exactly what we are buying. We are nevertheless paying for public services. Those of us who are involved with property, development and planning must not forget the wider public paying its rates and taxes who are already footing the whole bill for the planning system. The effect of much of the argument that we have heard is for higher public expenditure. I accept that these charges are unwelcome to many, and I understand that. Nevertheless, in these times we cannot afford to ignore an opportunity to offset public expenditure by £30 million. How lightly we dismiss the £30 million that we are talking about! I hope that noble Lords will not ignore the wider economic issues that lie behind this discussion. Sometimes I am rather surprised at even some of my noble friends who apparently find it so easy to disregard this basic, fundamental point.

I accept wholeheartedly that we need to be satisfied that the effect in practice does not transfer an unreasonable burden on to the individual. Noble Lords will be familiar with the proposals on which we have consulted. Other amendments take up the question of the owner-occupier and the disabled. As to the burden of the charges on the development industry, they are, in any way we look at it—and as I gave instances in the Committee stage I will not give many today—at the worst very modest. I said then—and perhaps I may give just one or two examples—that for an application for detailed permission for a housing estate of 20 houses worth £500,000 or more, the charge we have proposed will be £800. For a house extension the charge will be £30. May I remind your Lordships that that is extending the house from 10 per cent. to 15 per cent., which is a very significant increase. After that, an extension which still requires planning permission will almost always then be a substantial one with a value of some thousands of pounds. About £8 billion worth of development passes through the development control system each year and we are talking of recovering about £30 million a year from charges—that is, about three-eighths of 1 per cent. of the value of the development. Let us keep the whole issue in perspective. Is the kind of imposition about which we have been hearing so unreasonable?

It has been suggested that our proposals would be more acceptable if we were to charge only for permissions and not for applications which result in a refusal. On the face of it that seems a fair argument in itself; but it is not consistent with the aim of charging. What we are seeking is not another tax on development. I almost always agree and only occasionally disagree with my noble friend Lord Morris. Knowing that he is sitting behind me is always a great source of comfort to me. However, on this particular issue we seem not to agree; but he may yet have second thoughts. What we are seeking is not another tax on development but a fee to offset part of the cost of processing the application. Costs are incurred in processing a planning application. Whether it is granted or refused it still costs money.

May I refer to the point raised by the noble Lord, Lord Ponsonby? He said that sometimes developers put in 12 applications and the authority welcomes them. They may well welcome them. The fact is that it costs good money to sift through and look closely at 12 applications. Who is paying for it? Somebody is paying for it. Is it unreasonable to expect the developer in those circumstances to go along beforehand and try to ascertain what the position will be? Then at the end of the day there need not be 12 applications but one that has a certain measure of agreement; or the developer will know that the application will not be agreed. I should have thought that was not an unreasonable point to make. If a developer wishes to make 12 applications, then he may do so; but he should at least make some contribution towards the cost of their consideration. I do not think that that is unreasonable. Certainly we want to avoid asking people to pay large sums of money for something that is uncertain in its result; that is why the scale of charges we have proposed is a modest one. Within this scale we have a much lower level of charges for outline applications—broadly speaking, about £160 an acre—where there is a higher risk of refusal. But a much greater proportion of the yield comes from detailed applications where the principle of development has already been settled.

Set against the low risks of a refusal, the risks of charging only for approval seem to me to be greater. There is the risk that these will come to be seen as a tax and, indeed, as I have said, it has been suggested that that is what it is. But I do not see it that way at all. I believe there could be much more serious implications for developers within a scale of fees. There is another point. If we were to charge only for permissions there would be a risk of inducement and bias. To offer the local authority a financial incentive to grant permission would be sowing in the minds of those who might be affected by the development a doubt about the impartiality of the local planning authority taking the decision.

I am not going to speak about this at great length because I did so before. But I think I ought to remind your Lordships that we have put down seven amendments—120A to 12OG—which seek to exempt from charges one category or another of application. In particular, these are—I should mention them—applications under Section 53 of the Town and Country Planning Act 1971 for determinations of whether planning permission is required; applications required because a building is listed; applications required as a result of a Tree Preservation Order: applications required only because the land or buildings are in a conservation area; applications for approval of the design and external appearance of agricultural buildings in national parks under the Landscape Areas Special Development Order 1950; applications required by an Article 4 direction removing permitted developments rights; and applications to adapt or extend houses for disabled persons.

It may help your Lordships who are in doubt about Clause 83 if I indicate that the Government concede the principle of every one of these amendments which will not seek to impose charges for any of these types of applications. When the time comes, I hope that my noble friend Lord Morris will bear this in mind when making his decision as to whether or not to press the amendment.

The noble Lord, Lord Evans, said that people want to be able to use as they wish land that they own. The very fact that we are increasing by 50 per cent. the GDO permission to allow people to do what they want with their houses surely indicates that we fully accept this. I wish that my noble friend Lord Caithness had not put his case in quite such an emotive way. He spoke about ringing a death knell, about treating small businesses shabbily, about this pestilent clause. The fact is that, whether we like it or not, almost invariably there are two sides to every argument. I am trying to present the modesty of the proposals that are here and the really minor impact they will have on individuals, while yet covering a total of £30 million, which I just do not feel in conscience we can so lightly turn away at this moment in time. I hope my noble friend will feel that perhaps he has pushed the boat out a little bit, not in what he said but maybe in the way he said it. Sometimes I am guilty of that myself, as I readily acknowledge.

I should like to comment on the point my noble friend Lord Ridley made, because most certainly I should not want to lose his support in this. The charges will apply to all planning applications made by the public sector bodies, and that covers many developments by nationalised industries. As to whether this principle of charges should be extended to other public sector developments which do not require planning permissions, I have indicated that we would not rule this out for all time, but I should not want to accept that we should do so now before we have established even the mechanism of charging for applications.

There it is. I really do have great sympathy and I hope that showed through in what I said in Committee and again today. I know the real concern that has been expressed, but I beg my noble friends who have spoken on this matter to say, "All right. Look at the total context of what we are talking about. We cannot lightly ignore the total position of what things cost". That is what we are talking about. It costs somebody, and to try to recoup some £30 million at such a modest impost on individuals is not unreasonable. I hope my noble friend will say, "On balance, I won't press the amendment".

5.55 p.m.

The Earl of CAITHNESS

My Lords, before my noble friend sits down, will he please reply to my point about whether he supports what his noble friend Lord Belstead said?

Lord BELLWIN

My Lords, by leave of the House, I should like to say that I did not particularly pick up this point. I will do so at my noble friend's special request. His point concerned Lord Belstead's statement about responsibility for magistrates' courts. My noble friend Lord Belstead, in responding to the arguments in favour of restoring responsibility for magistrates' courts to large non-metropolitan districts, was not enunciating a general principle. He was surmising what might happen if discussions between the local authority associations broke down. Of course, we should consider what to do if that were to happen and I should not by any means rule out further discussions if that should be the case.

Lord GISBOROUGH

My Lords, before the noble Lord sits down, can he say a little more on two matters which he mentioned? One was the principle for paying for services. Can he explain why this does not apply to the fire service, education, health, and so on? Secondly, he mentioned the cost—I think he said it was £106 per acre—for development. Can he say whether this would apply to an area development such as a playing field, a motor-cycle track or something which was not going to be a profitable development but simply a change of use and where the acreage might be quite large?

Lord BELLWIN

My Lords, I should want some notice of the second of the points made. I should think it may very well not apply, but I should not want to say that categorically without having it confirmed; that is my feeling about the point. I think the other point is not valid. One can take every service, and it has always been open to debate: when does one charge specifically and when does one not charge specifically? In that case I think I should have to say one should never charge for boating on lakes; one should never charge for the many things for which local authorities charge if one is against the principle of charging as such. The point I am trying to make here is that here is a service which costs some £50 million a year to run. It is for the benefit, not of all the people; surely this is the asnwer. The services to which my noble friend refers are available to everyone at any time whether or not they wish to use them. One decides on one's own whether or not to make an application for planning permission. I think there is a considerable difference. Just before I sit down, may I say that I have been handed a note which says that the point about the playing field is a fair one and there may well have to be concessions on that; so my first instincts on it were not too far away from fact.

Lord ROSS of MARNOCK

My Lords, before the Minister sits down I should like to say that today I heard him answering a question about enterprise zones and saying how anxious he was for developers within enterprise zones to get ahead. Will these fees apply to proposed developments in enterprise zones and, if they do, will he give that aspect some further thought?

Lord BELLWIN

My Lords, by leave of the House; this is Report stage and I have stood up four or five times now, so I am very much out of order, but I will try to cover the point the noble Lord makes. To the best of my knowledge, the position in the enterprise zones is that the whole of the planning regimes, the planning structures, subject to health and safety factors, do not apply. Therefore, I assume that the same goes for planning applications. But I had better state straight away, because I am well aware of the fact that I speak for Government on this, that I will have to confirm it. I am virtually certain that is so and I will confirm it both for the noble Lord and any other of your Lordships who wish me so to do.

Lord MISHCON

My Lords, I think I understand correctly the rules of this House and may I assure the Minister that in no way has he been breaching any rule on Report stage because we managed to catch him before he reached a sitting position. I believe I also have caught him, in spite of the way in which he appears to be seated at the moment, suspended in mid-air while I ask him this question. I ask it only because I think it might clarify the matter for the House as a whole and indeed may save the House and your Lordships from possibly listening to some six speeches from me and also perhaps one from the noble Baroness, Lady David. Did I understand him to say that the Government would concede all the amendments from 120A to 120G, on the basis that the charging of fees was permitted under this Bill? If he does say that, then it may very well be—I am saying no more than this—that Members of this House would want to know that before they voted on this occasion.

Lord BELLWIN

My Lords, yet again, by leave of the House, yes, I am happy to confirm that the Government have conceded all those cases. I was very careful to read them out slowly to make sure that they were on the record. We do accept that is so, and that they will not be subject to the charges.

Baroness PHILLIPS

My Lords, the noble Minister will be pleased to hear that I do not want to put a point to him but only to offer a little fortuitous advice, which he may not want. There is already a common idea abroad that people taking driving tests are turned down the first time because the authority will collect more money if several tests are taken. I am sure that is quite wrong, but it is a common idea. It just occurs to me that if the planning application has to carry a fee the idea will rapidly arise abroad that if it is turned down several times the fee will have to be paid each time. Of course, I am sure that is not in the mind of any local authority or of the Government, but you cannot stop people thinking such things. Also, the Minister said that one had an option. But surely you have no option: if you want to do a certain piece of work you have to apply to the planning authority. I do not quite see where the option comes in. The option is to break the law, put up the garage or whatever it is, and then watch while it is pulled down. You will not change what human nature will make of this, once it is on the statute book.

Lord BELLWIN

My Lords, again by leave of the House, and I hope for the last time, with regard to the point made by the noble Baroness I would say that there is still an option. First, please do not let us talk about the garage because if the garage does not come within the 15 per cent. I, for one, would be very surprised indeed; so no application will be required. But you will still have the option of considering what the total cost is likely to be and if it is thousands of pounds and we are talking about £30, you would have to decide whether or not it was worth it. That would be your decision.

May I say to the noble Lord, Lord Mishcon, on the point of the amendments, that in fact I may not have got it absolutely right but what I was saying was that in fact we accept entirely that these should not be included and that they should be exempt. The proposal is that we will incorporate the substance of them in regulations, and I give an absolute undertaking as to that.

Lord MORRIS

My Lords, I am most grateful to my noble friend for the considerable attention he has given to answering this particular point yet again. I should like to make it absolutely clear that there is no noble Lord on this side of the House who does not entirely agree with the principle that public spending be brought down. The only argument, as my noble friend himself said on Committee stage, is: Who is to pay? The only analogy I can think of which is apt is for the Inland Revenue to charge people submitting their income tax returns for the cost of processing them. It is really precisely the same. I shall not change my view because I think this situation is extremely unjust.

The other important point which he made is tied up closely with the important point made by the noble Baroness, Lady Phillips; namely, frivolous applications. The noble Minister's own figures on this point are interesting. His own department said that the overall success rate of applications—I give an average throughout the country—goes up to 92 per cent. for one major part of the country down to 83 per cent. or round about 86 per cent., which is extremely high. It will be very interesting to see in the future whether that figure comes down. With planning application fees gained, it will be very apparent indeed and I suspect that it might well happen. Notwithstanding that, I think it would be quite wrong to divide the House on this issue, bearing in mind the very generous offer made by my noble friend in regard to the amendments following this one. However, if noble Lords feel these amendments do not go far enough they always have the option to divide on the amendment of the noble Lords, Lord Mishcon and Lord Evans of Claughton, No. 127, which asks to leave out this clause altogether. With that said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.6 p.m.

Lord MISHCON moved Amendment No. 120A: Page 76, line 15, at end insert— ("Provided that no such fee shall be payable for application under section 53 of the Town and Country Planning Act 1971.").

The noble Lord said: My Lords, the noble Minister said quite clearly that Amendments Nos. 120A to 120G would be conceded in the sense that these exceptions would be in regulations. He gave an undertaking to that effect. I have only one brief comment to make and I am sure that the House will be pleased to have been spared a most learned brief that was prepared for me on each of those items. I want only to make the comment that it is such a pity that this House is continually hearing, as they are in another place, about legislation by regulation instead of by Act of Parliament. It is not just a question of a difference in very slight degree: it is a difference in effect. The citizen, especially on a matter of this kind, ought to be able to look at an Act of Parliament and see what his rights, his duties and his disabilities may be. It is not clear legislation and it is not straightforward legislation to put in provisions which enable a Government to make regulations and to leave the citizen to seek out those regulations if he can, hopefully thinking that he has seen the only regulations which are being made and which are pertinent to the matter about which he is seeking information.

I wonder whether the Minister would not concede that in a Bill which may now have a prescription for fees to be charged, the person looking at that Act in the future shall clearly see what the exceptions are. Therefore, I ask him to consider, if he would, the desirability of incorporating the amendments that it is my privilege to move in the Bill itself.

Lord BELLWIN

My Lords, I cannot give the undertaking that the noble Lord asks for. I can only tell him that I will talk to colleagues about this. I am not sure myself quite what the implications are. I am sure the noble Lord has much greater knowledge than I of that, but I have heard what he says and I assure him that we will think about it. Of course, he knows I can give no commitment but I will talk to colleagues about it. I can go no further than that.

Lord RENTON

My Lords, I wonder whether I may give my noble friend some moral support in this matter. I have sometimes made the plea that things should be written into a Bill rather than put into regulations, but, of course, one must face the fact that that means adding to the detail of the Bill, and sometimes to a Bill which is already too detailed in the minds of some people. It is a convention of draftsmanship that when you have detail which is likely to require alteration from time to time, that detail is better set out in regulations, because regulations are more easily altered than are Acts of Parliament. It seems to me that the matters covered by the amendments to which the noble Lord, Lord Mishcon, has referred—having tabled them along with some of his noble friends—are regulations some of which might be of permanent application, but others might very well have to be varied from time to time. Therefore, although one always welcomes the care with which my noble friend looks at things which he has offered to look at again, it would not surprise me personally if he found himself unable to concede to this request.

Lord MOTTISTONE

My Lords, I should also like to give my noble friend some comfort. It just so happens that in order to satisfy myself about regulations and, indeed, about Acts of Parliament, I asked the Library the other day to give me particulars of the numbers of Acts of Parliament and the numbers of regulations which were passed in 1938, being the last year before the war. I thought that I should be able to prove that we now have far more legislation than we had then; but, in point of fact, the numbers of Acts of Parliament are very consistent. One almost thinks that, rather as Parkinson said, the numbers of Acts of Parliament are built to fill the number of days in which Parliament is available to debate them.

There were something over 1,100 regulations in 1938, and this year there were only about a quarter as many again. Of course, there may be some more as a result of this Bill, when it becomes an Act before the end of the year. But the point of what I am trying to say is that this business of having regulations to supplement Acts of Parliament in the way that my noble friend Lord Renton says, for very good practical reasons has been going on for a very long time. So it is pushing the point a lot to say that everything ought to go into the Bill, when, as I suggest and as my noble friend suggested, it is more suitable in this case for it to be in regulations.

Lord MISHCON

My Lords, by leave of the House—although it is my amendment and I think that I am entitled to reply— may I say that I have heard two noble Lords giving comfort to the Minister. I wish I could hear one whisper to give some comfort to me. But it would be churlish of me to pursue this matter, in view of the Minister's very kind undertaking to take it away and think about it. I welcome what he has said and it may very well be that the result is, as the noble Lords, Lord Renton and Lord Mottistone, forecast. However, the noble Lord has been kind enough to say that he will at least consider my point. I am grateful to him. I do not move the amendments for which I am responsible—Nos. 120A to 120F. I think that my noble friend Lady David is responsible for Amendment No. 120G.

Baroness DAVID moved Amendment No. 120G: Page 76, line 15, at end insert— ("Provided that no such fee shall be payable for an application made to adapt or extend a dwelling-house for a disabled person.").

The noble Baroness said: My Lords, I, too, am pleased to hear that there has been some concession. I hope that the Minister will be able to tell us something before Third Reading and that we shall know what is to happen, so that we can decide what to do at Third Reading. Will it be possible, for instance, to see the regulation which he is thinking of, if he decides not to put the exceptions into the Bill? My Lords, I beg to move.

Lord BELLWIN

My Lords, I doubt very much whether it will be possible to see the regulation beforehand. But I certainly undertake to tell both the noble Lord, Lord Mishcon, and the noble Baroness, Lady David, what we may or may not be able to do. I doubt very much whether the regulation—if that is what it proves to be—would be available in time.

Baroness DAVID

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord MISHCON moved Amendment No. 120H: Page 76, line 15, at end insert— Provided that such authorities shall have power at their discretion to remit or refund a prescribed fee in whole or in part in cases where it appears to the authority that payment would constitute a hardship to the applicant or that it would for other reason be just and equitable to do so.").

The noble Lord said: My Lords if your Lordships will be good enough to look at page 76, in the condition in which the Bill now is as it left the Committee, you will see what appears to me—and your Lordships may agree with me—to be a mistake in subsection (3). I wanted to bring this to your Lordships' attention at once, because it affects slightly the wording of my amendment and another one which follows. Your Lordships will see that subsection (3) of Clause 83 reads as follows: Regulations under subsection (1) or (3) above may provide for the remission or refunding of a prescribed fee (in whole or in part) in prescribed circumstances I rather imagine that the "(3)" in that subsection, and indeed in the succeeding subsection, should be "(2)".

If I may now address myself to my own amendment, we have heard from time to time about the rights which should be given to local authorities and about the independence which they should have in regard to some of the judgments that they make. The clause that we are now looking at deals with the right to remit or refund—in Committee we were taught the subtle distinction between those two words—fees that otherwise will be chargeable on planning applications. It is suggested in the Bill that remission and refunding will be dealt with by regulations, so local authorities are specifically told where they may refund and where they may remit. This amendment is simply saying: "please, let the local authorities decide in each case where it is applicable, whether, on grounds of hardship or because it is just and equitable, there should be a remission made or a refund allowed". The point is as simple as that and I believe it to be a sensible one. I hope that it will so commend itself to your Lordships. My Lords, I beg to move.

6.18 p.m.

Lord BELLWIN

My Lords, let me say at once that I am also speaking here to Amendment No. 121ZA. I am sympathetic to the argument that says that the scale of charges may throw up hardships or anomalies which would justify a refund. That is precisely why we have resisted amendments which would have removed from the Bill the power to provide for refunds. What motivated those earlier amendments was our proposal, in our consultation paper on charges for planning applications, that local planning authorities should have a discretion to refund a fee in much more limited circumstances than Amendment No. 120H proposes. The local authorities could see that with such a provision they would be subject to continuous pressure and argument to exempt this or that application, and every exercise of their discretion, being quite rightly under the scrutiny of the local ombudsman, would need to be taken with care and with proper knowledge of the facts.

How much more would that be the case with the far wider discretion that is now proposed? It would be an invitation to every applicant to apply, also, for a remission of his fee. The cost to the local planning authority of considering applications would be very great and would certainly defeat our intention of having a simple scheme with a certain yield which would not cost a great deal to administer. I hope that the noble Lord, Lord Mishcon, will see why I must resist the amendment. Nevertheless, let me say to him at once that if he wishes to propose specific categories of cases which we should exempt in the regulations, I gladly undertake to consider them.

Lord RENTON

My Lords, I wonder whether I may refer to the rather strange little point of numeration to which the noble Lord, Lord Mishcon, refers. Not only is the Bill wrong in referring, in line 29, to (3), but my noble friend's attempt to put it right is also wrong because, instead of reading (2A) it should read (2)(a).

Lord BELLWIN

My Lords, with the leave of the House, on this point of renumbering, is it not a fact that the point is met by Government Amendments Nos. 121, 121A, 125 and 126?

Lord RENTON

My Lords, yes.

Lord MISHCON

My Lords, that may well be so. Whenever I see my noble friend Lord Renton nod his head I know that I must be right in agreeing with him. I am trying very hard, if I may say this with the utmost moderation, to keep a sense of perspective in regard to this Bill and to local authorities and how the ordinary citizen behaves. We have been hearing about developers. It is, in the main, the developers who will be paying these planning fees. So it is a little odd to think in terms of the applicant who is a developer claiming on grounds of hardship, or that it would be just and equitable for some part of the fee to be refunded or remitted in some way. Obviously, there is a limited number of cases in which any person could put forward such a plea if it were to be seriously taken and seriously meant. It seems to me, with respect, that instead of leaving to regulating local authorities the confines within which they would have the power to remit or to refund it would be so much more sensible and so much more respectful to local authorities to give this discretion to them.

The only argument that I can see against myself is one that was not advanced by the noble Lord the Minister, but I think that in fairness and honesty I ought to advance it, if only to deal with it. There could in fact be a difference between local authorities in the discretion that they exercise. Therefore, in local authority "A" the ground of hardship might not be conceded, whereas on precisely the same facts it may be conceded in local authority "B". I take the point on to my back, as it were, in order to try to remove it immediately by saying that on this sort of point it is not necessary for any part of my argument to fall. Discretion is vested in local authorities to make grants to people. Some of them exercise it one way and others

another way, whether in the realm of education or otherwise, and, where it is left with discretion, this is never thought to be a matter which entitles one to restrict, by sheer regulation, what a local authority should do.

I am sorry that the Minister has driven me to this position. I feel that upon this matter the House ought to express a view. I say it because again a principle is involved: are we by regulation to direct local authorities that this is the only way in which they can remit or refund, or are we to say, "If you think it just and equitable to do so, or if you think there is a ground of hardship you are entitled to remit or to refund"? In those circumstances, unless the Minister can concede this amendment—and I hope he will be able to do so as a last gesture—I feel that the opinion of the House ought to be tested.

Lord BELLWIN

My Lords, by leave of the House, I admire the way in which the noble Lord, Lord Mishcon, sets up his own point and then so very well knocks it down again. I fear that I cannot help him, as I think he suspected. Therefore the decision must be his as to pressing the amendment.

6.26 p.m.

On Question, Whether the said amendment (No. 120H) shall be agreed to?

Their Lordships divided: Contents, 71; Not-Contents, 104.

CONTENTS
Airedale, L.	Elwyn-Jones, L.	Milner of Leeds, L.
Amherst, E.	Evans of Claughton, L.	Mishcon, L.
Ardwick, L.	Foot, L.	Monson, L.
Avebury, L.	Gaitskell, B.	Ogmore, L.
Bacon, B.	Glenamara, L.	Oram, L.
Balogh, L.	Gosford, E.	Peart, L.
Banks, L.	Greenwood of Rossendale, L.	Phillips, B.
Beaumont of Whitley, L.	Hale, L.	Pitt of Hampstead, L.
Beswick, L.	Halsbury, E.	Ponsonby of Shulbrede, L.
Birk, B.	Hughes, L.	Rhodes, L.
Blease, L.	Jacques, L.	Roberthall, L.
Blyton, L.	Jeger, B.	Rochester, L.
Boston of Faversham, L.	Kaldor, L.	Ross of Marnock, L.
Brockway, L.	Kilmarnock, L.	Segal, L.
Bruce of Donington, L.	Lee of Newton, L.	Shinwell, L.
Caithness, E.	Llewelyn-Davies of Hastoe, B. [Teller.]	Spens, L.
Craigavon, V.		Stedman, B.
David, B.[Teller.]	Loudoun, C.	Stewart of Alvechurch, B.
Davies of Leek, L.	Lovell-Davis, L.	Stewart of Fulham, L.
Davies of Penrhys, L.	McCarthy, L.	Stone, L.
de Clifford, L.	Maelor, L.	Strabolgi, L.
Taylor of Mansfield, L.	Wells-Pestell, L.	Winstanley, L.
Underhill, L.	Wigoder, L.	Winterbottom, L.
Wade, L.	Wilson of Radcliffe, L.	Wootton of Abinger, B.
NOT-CONTENTS
Airey of Abingdon, B.	Glenkinglas, L.	Onslow, E.
Alexander of Tunis, E.	Gowrie, E.	Orkney, E.
Allerton, L.	Greenway, L.	Orr-Ewing, L.
Ampthill, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Pender, L.
Auckland, L.		Rawlinson of Ewell, L.
Avon, E.	Hampden, V.	Redesdale, L.
Baker, L.	Harmar-Nicholls, L.	Redmayne, L.
Bathurst, E.	Hatherton, L.	Renton, L.
Bellwin, L.	Hemphill, L.	Ridley, V.
Belstead, L.	Hill of Luton, L.	Romney, E.
Brabazon of Tara, L.	Hornsby-Smith, B.	St. Aldwyn, E.
Brougham and Vaux, L.	Kemsley, V.	St. Davids, V.
Buxton of Alsa, L.	Killearn, L.	Sandford, L.
Cathcart, E.	Kimberley, E.	Sandys, L. [Teller.]
Chelwood, L.	Kinnaird, L.	Savile, L.
Cockfield, L.	Kinnoull, E.	Sempill, Ly.
Colville of Culross, V.	Knutsford, V.	Slim, V.
Cork and Orrery, E.	Lindsey and Abingdon, E.	Soames, L. (L. President.)
Crawshaw, L.	Long, V.	Stanley of Alderley, L.
Croft, L.	Lucas of Chilworth, L.	Strathclyde, L.
Cullen of Ashbourne, L.	Lyell, L.	Sudeley, L.
Davidson, V.	McFadzean, L.	Swansea, L.
De Freyne, L.	Mackay of Clashfern, L.	Swinfen, L.
Denham, L. [Teller.]	Macleod of Borve, B.	Torphichen, L.
Drumalbyn, L.	Mancroft, L.	Tranmire, L.
Duncan-Sandys, L.	Mansfield, E.	Trefgarne, L.
Ebbisham, L.	Margadale, L.	Trenchard, V.
Eccles, V.	Marley, L.	Ullswater, V.
Ellenborough, L.	Massereene and Ferrard, V.	Vaux of Harrowden, L.
Elton, L.	Mills, V.	Vickers, B.
Ferrers, E.	Monk Bretton, L.	Vivian, L.
Fortescue, E.	Mottistone, L.	Westbury, L.
Gainford, L.	Northchurch, B.	Wise, L.
Gibson-Watt, L.	Nugent of Guildford, L.	Wynford, L.
Gisborough, L.	Nunburnholme, L.	Young, B.

On Question, amendment agreed to.

6.35 p.m.

Lord BELLWIN moved Amendment No. 121: Page 76, line 28, at end insert— ("(2A) The Secretary of State may by regulations make such provision as he thinks fit for the payment to him of a fee of the prescribed amount in respect of an application for planning permission which is deemed to be made to him under the planning enactments.").

The noble Lord said: My Lords, with this amendment I should like to speak also to Amendment No. 121A, 125 and 126. I announced when we were considering Clause 76 (as it then was) of the Bill, in Committee, that the Government had decided not to proceed with the intention to charge for planning appeals. In consequence, subsection (3) of that clause was left out of the Bill. But there are two special circumstances in which a planning application is in effect made to

the Secretary of State in the context of an appeal. These two special circumstances are when there is an enforcement appeal, under Section 88 of the Town and Country Planning Act, 1971, or an established use certificate appeal, under Section 95 of that Act. In each case the 1971 Act makes provision for a "deemed" application to the Secretary of State for planning permission, and for any planning permission granted by the Secretary of State to be treated as if it has been granted on the deemed application. There is thus a possibility that someone who carries out development without planning permission, in order to avoid having to pay the appropriate planning application fee, might succeed in obtaining the permission he needs by the alternative route of an appeal to the Secretary of State against an enforcement notice, or against the local planning authority's refusal to grant an established use certificate.

If this situation were not remedied, it would clearly be unfair to the great majority who, I am sure, will not carry out development unlawfully in order to avoid payment of the planning application fee. This Government amendment therefore deals with that situation by enabling the Secretary of State to charge a specified fee for any deemed application for planning permission which he has to consider on a planning appeal. In fact, this will in practice happen only in the two special circumstances I have described. The amendment also makes three minor consequential amendments by renumbering references to the former subsection (3) of Clause 76—which is now deleted—as references to this new subsection (2A) of Clause 83. I beg to move.

Lord SANDFORD

My Lords, I agree with my noble friend that this is a very desirable amendment. It is certainly logical to have it in if we are having planning fees for applications, and I am glad that the Government have moved it.

The Earl of CAITHNESS

My Lords, this is a small technical point. As I understand it, an appeal can be made against this procedure under a planning enforcement notice where the applicant claims that the planning permission was not needed in the first instance. However, by the time that appeal has gone through he has paid to the Secretary of State the fee as prescribed by the Secretary of State. When the appeal is upheld will the Secretary of State refund the fee to the applicant, and, if so, will he refund it with interest at the appropriate rate?

Lord BELLWIN

My Lords, I should think the answer must be "No" and "No". I cannot think of any circumstances in which it might be any permutation of "Yes" and "No" or "No" and "Yes". I am sorry not to be more helpful to my noble friend but I feel that would be the answer—my Lords, you might not believe it but I have had a note handed to me which says "Yes and No". Therefore, the permutation in fact was one that could have come about. So I say formally now, to set the record straight, that the answer is "Yes" and "No".

The DEPUTY SPEAKER (Lord Jacques)

My Lords, if Amendment No. 121ZA is agreed to I shall not be able to call Amendments 121A, 122 or 124.

Lord MISHCON had given notice of his intention to move Amendment No. 121ZA: Page 76, line 29, leave out subsection (3).

The noble Lord said: My Lords, I have already spoken to this amendment, which is a question of leaving out subsection (3) which enables regulations to be made for the remission and refunding of fees. I do not think I can usefully add to what I said then, and therefore I do not propose to move the amendment.

Lord BELLWIN moved Amendment No. 121A: Page 76, line 29, leave out ("(3)") and insert ("(2A)").

The noble Lord said: My Lords, I spoke to this with Amendment No. 121. I beg to move.

Lord EVANS of CLAUGHTON moved Amendment No. 122: Page 76, line 31, at end insert ("and shall provide for the remission of the prescribed fee in cases where the applicant not being a body corporate is the owner and occupier of the dwelling-house to which the application relates".)

The noble Lord said: My Lords, in the earlier debate on the amendment moved by the noble Lord, Lord Morris, I said that I was against charges for planning consents in any form as a matter of principle. I also said then that in my opinion that debate was one for talking about the principle, and I still think the principle of charging is wrong. I shall always think so. But, our having accepted the enormity of the behaviour of Her Majesty's Government, we have somehow to try to mitigate that enormity by excluding some applications from the depredations of Her Majesty's Government, and that is the purpose of this amendment. It is not the same amendment as we moved in Committee, so I shall not be caught in any flak from the noble Lord. Lord Harmar-Nicholls; it is an improved and modernised version of that amendment which we moved in Committee and in respect of which we got certain—I would not say undertakings or assurances—but understandings from the noble Lord the Minister that he would have a careful look at this question of excluding smaller planning applications. Nevertheless, it is a similar kind of amendment to that one, since it seeks to exclude owner-occupiers from the necessity of having to pay for a planning application.

In spite of it applying to such a limited section of applicants this is in fact the area in which most planning applications are made to local authorities throughout the country. It is estimated that more than 50 per cent. of applications come in this particular field. Therefore, although the amendment may apparently deal with small exceptions it is the exceptions that apply to the average man in the street very much more than to the very big planning applications for 20 or 30 or 200 or 5,000 buildings. There is no question here of it being a licence to print money for the applicants, because it would be dealing with small applications for improvements, extensions and so on to houses. I think it is estimated that planning consents in this area will cost the applicant something between £30 and £40, though of course, no figure has been fixed and we have heard in discussions earlier in your Lordships' House that it is proposed that the figure can be changed at very regular—and, I suspect, frequent—intervals. As we know, for a person with a £25,000 house by-law consents already cost about £200.

What will happen, and it is already happening without having to pay for planning applications, is that people wanting to carry out what they, as opposed to society or the planning authorities, regard as a comparatively small, uncontroversial or unimportant alteration or improvement will not bother to apply for permission. As I think any of your Lordships who have been members of planning committees or engaged in planning will know, throughout the country enforcement procedure against people who make alterations or improvements or additions to buildings without planning consent is extremely slow. Most local authorities—quite rightly, I think we would probably agree—have a small enforcement staff in order to save salaries and wages. I suggest that, if there is this charge for planning consents within the area that my amendment deals with, the number of people who proceed to carry out the improvements without planning consent, will increase very considerably and either we shall have a situation where the law is not observed and is ignored, or a whole new staff of enforcement officers will have to be appointed by district councils.

It is not just the processing of applications that occupies the time and trouble of local authority officials; it is the time given by senior planning officials in pre-submission conferences, and, where people are paying for planning consent, there will be far more of these pre-submission conferences and far more inquiries made by people who want to get their £30 worth. It has been estimated by the Birmingham City Council that at least 25 per cent. of the fees that will be collected under the new Act will go into the employment of extra staff. It is estimated that throughout the country as a whole extra staff purely and simply for processing planning applications and charging for planning applications will mean an average of three new members of staff for every district council.

I know the noble Lord will say that many of the applications I am talking about and which account for 50 per cent. of applications will disappear under the extension of the GDO; I think, that is estimated at 10 to 15 per cent. How many applications that means will cease to have to be made I am not sure, but I do not think it will be very significant; it will be of some significance but not sufficient to take the whole area of applications referred to in my amendment out of the necessity to apply for planning consent.

It does seem to me, having said first that I am opposed on principle to charges for planning applications, and the noble Lord, Lord Morris, not having to the disappointment of many of us, tested the views of the House on this, I am now trying to mitigate what I regard as bad legislation by trying to except from it the smaller applicant, the person who does not have a whole army of architects, surveyors, solicitors, et cetera, to back him and support him; I am talking about the average small man and I am trying to except and exclude him from the area that will have to pay. Because the noble Lord has not been able to help me by putting down an amendment or trying to reassure me by kind words or well-worded letters, I am forced to put this amendment forward, but I do put it forward with great seriousness because I think it is a matter of the greatest importance to the vast majority of ordinary planning applicants. I beg to move.

Lord MONSON

My Lords, I think this may be the right moment for me to intervene in view of the compromise Amendment No. 124 which I have tabled and which follows immediately upon the one that we are discussing now. As I have made clear at earlier stages, I take a midway position on this whole issue between the view of the Government and the view of the noble Lord, Lord Evans, the noble Lord, Lord Morris, and other noble Lords in various quarters of the House. On the one hand, I do recognise the need to make economies in Government and local government expenditure, and furthermore, despite protestations from various quarters, I do agree with the Government that these charges are for the most part minuscule in comparison with the capital gains, or appreciation in capital values, than can result in consequence of the granting of planning permission.

On the other hand, I do agree with the Government's critics to this extent. I think it is extremely unfair that individuals who are refused planning permission should have to pay, certainly on the scales envisaged. Hence my adaptation of Lord Evan's amendment which would provide for a refund of one-half of the charge to an owner-occupier where planning permission is refused. I have limited the refund to one-half because obviously some expenditure will have been incurred by the local authority in considering the application. I think my compromise amendment may be somewhat more acceptable to the Government, or if not to the Government then to the House, in the event of a close division of opinion on the matter. I hope the Government will see fit to accept this, but, if by some misfortune they cannot and should the noble Lord, Lord Evans, fail in his amendment, I hope he may be able to support me on the principle that a quarter of a loaf is better than none.

Lord SANDFORD

My Lords, I hope my noble friend will resist both these amendments. If we are to have planning fees—and I have no objection to their introduction—it surely makes nonsense of it to start by exempting half the planning applicants. If we are to have planning fees the whole business of paying them in and accounting for them and so on must be kept simple. We did consider the case of refunds or no refunds at the Committee stage, and I should have thought the opinion of the Committee was very clearly against their introduction.

Lord BELLWIN

My Lords, I did undertake on Committee to take this point away and think seriously about it. I am rather surprised to learn from the noble Lord, Lord Evans, that this is a subject on which I did not write to him or give him words of solace in one way or another. I can see very clearly the force of the argument that when it comes to meeting charges the owner-occupier is in a different position from the big organisation or company. Nevertheless, I finally cannot accept the argument that the owner-occupier, whatever his circumstances, should meet none of the cost of the development control system.

Of course the planning system needs to be sympathetic to the circumstance of the individual. What we are trying to do—as the noble Lord quite rightly assumed I would say, and as I do say—is to remove the burden of the planning system altogether from the owner-occupier by extending the general permissions contained in the GDO, whenever we can. In our view, if an alteration to an owner-occupier's house or, indeed, to anyone else's house is not of a size or a type which would affect the public interest, he should not need to make a planning application, let alone pay for it. But, if what he proposes is significant for the planning system, it is difficult to accept that he should not meet any part of the cost of processing his application or to accept the inevitable consequence that the householder's share of the cost should be borne by industry and house-builders. Certainly, the charge to be imposed must be reasonable in comparison with the value of the development, and that is why we propose a flat rate of £30 for all householder developments.

Bearing in mind the cost of a house extension—perhaps £5,000 just for a roof extension—I fail to see that what we propose would be excessive. Noble Lords contemplating a house extension might wish to visit their local builders' merchant to find out what £30 will buy. The answer will be so small a proportion of the materials that they need as to be negligible. Nevertheless, I recognise the argument that this is not the only charge that the owner-occupier will have to meet and undertake, and we shall do all we can to keep the charge for householders to a reasonable minimum.

Amendment No. 124, in contrast to Amendment No. 122, seeks not a complete exemption but, as the noble Lord, Lord Monson, said, a partial refund if permission is refused. In many ways, I am sorry not to be able to accept this amendment because from the householder's point of view at least, it has obvious attractions. However, I do not think in practice that it would provide a very fair distribution of the impact of fees. Someone who persistently repeated his application to the annoyance and concern of his neighbours every time it was refused would pay a reduced charge.

What is more, we have been wary of introducing the principle of charging for successful applications rather than for all applications, on the grounds that we should very understandably raise fears, among people who might be affected by a development that the local authority deciding the case would not be totally unbiased because it had a financial interest in the result. I am sorry that I cannot meet the noble Lord, Lord Mon-son's, point, but it may comfort him to know that 92 per cent. of all applications for house extensions and alterations are in fact granted.

The noble Lord may also wish to consider the scale of charges that we have proposed, in that over 50 per cent. of all planning applications are householder developments, but we are proposing to raise only 20 per cent. of the income from charges from that source.

I should like quickly to say a few comments in response to the noble Lord, Lord Evans of Claughton, as regards Amendment No. 122. He made the point that there would be more evasion, and that enforcement would be needed as a result of the charges. In fact, I think that it is fair to say that the fees are so modest that we do not believe that they will tempt people to develop unlawfully. A greater enforcement effort will not arise nor will the scheme of charges result in the employment of more staff. It will be particularly economical to administer and, for myself, I cannot conceive that an authority would have to add three additional staff for every district council.

So, though I particularly have sympathy for the point that the noble Lord, Lord Monson, makes, and I have interest, too, in the point—as I think I indicated by what I said in Committee—made by the noble Lord. Lord Evans, but I fear that I am not able to accept the amendments.

Lord EVANS of CLAUGHTON

My Lords, at the risk of repeating myself, I must say that I am very much opposed in principle to the whole concept of charging for planning, and I was really quite shocked by the noble Viscount, Lord Ridley—who unfortunately is not in his place at the moment—when he said that there is nothing wrong with charging for a service. The precise point is that this is not a service: we are paying, for having our rights limited. It is wrong to pay to have one's rights limited in this way.

I have much sympathy with the amendment of the noble Lord, Lord Monson, to which he referred. One has the sort of image in one's mind of the solicitor or architect saying, "Mr. Jones, you are in luck, your planning application has been turned down, so you can get your thirty quid back." However, I see the point that where the application has been unsuccessful, it seems a little unfair that, in addition to that misfortune, the applicant should have to pay £30. Of course, if in fact my amendment is carried, he will not have to outlay the £30 in any event.

It seems to me that the successful applicant, in addition to paying the fee of £30, or whatever it is, will have other charges to meet. Indeed, I repeat that the £30 can be changed from time to time, and frequently, by any Government which choose to change it, to a huge amount to make it a real tax. I shall not remind your Lordships of the discussion that took place in Committee when income tax was introduced by Pitt as a temporary tax— "temporary" is a very long time and the amount charged has increased greatly. It could be used, not by the noble Lord, Lord Bellwin, but by some unscrupulous Government, as a form of taxation on the private individual. For the successful applicant there is already a tax that he must pay; namely, development land tax. Moreover, he will also have to pay increased rates on an increased rateable value. So, in addition, the poor chap will have to pay £30 for the privilege of limiting his own rights to enjoy the privilege of his own property.

The noble Lord, Lord Sandford, said that there was no justification for this particular amendment and that if one believed in planning charges, then it was right that such a person should be charged. But there is a difference. I can see a case—although I do not support it—for a person who develops a large estate of houses, at considerable inconvenience to the local authority and its officers (taking up senior planning officials, time and so on, and selling the houses

CONTENTS
Airedale, L.	Ferrier, L.	Peart, L.
Ardwick, L.	Gaitskell, B.	Phillips, B.
Auckland, L.	Gisborough, L.	Pitt of Hampstead, L.
Avebury, L.	Glenamara, L.	Ponsonby of Shulbrede, L.
Bacon, B.	Greenwood of Rossendale, L.	Ross of Marnock, L.
Balogh, L.	Hale, L.	Savile, L.
Beaumont of Whitley, L. [Teller.]	Hatch of Lusby, L.	Segal, L.
	Henley, L.	Spens, L.
Beswick, L.	Hughes, L.	Stanley of Alderley, L.
Birk, B.	Jacques, L.	Stedman, B.
Blease, L.	Jeger, B.	Stewart of Alvechurch, B.
Boston of Faversham, L.	Kaldor, L.	Stewart of Fulham, L.
Brockway, L.	Kilmarnock, L.	Strabolgi, L.
Bruce of Donington, L.	Lee of Newton, L.	Swinfen, L.
Caithness, E.	Llewelyn-Davies of Hastoe, B.	Taylor of Mansfield, L.
Chitnis, L.	Loudoun, C.	Underhill, L.
Collison, L.	Lovell-Davis, L.	Wells-Pestell, L.
Colwyn, L.	McCarthy, L.	Whaddon, L.
Craigavon, V.	Maelor, L.	Wigoder, L. [Teller.]
David, B.	Milner of Leeds, L.	Winstanley, L.
Davidson, V.	Mishcon, L.	Winterbottom, L.
Davies of Leek, L.	Monson, L.	Wise, L.
Elwyn-Jones, L.	Morris, L.	Wootton of Abinger, B.
Evans of Claughton, L.	Oram, L.

NOT-CONTENTS
Allerton, L.	Cockfield, L.	Eccles, V.
Ampthill, L.	Colville of Culross, V.	Ellenborough, L.
Avon, E.	Crawshaw, L.	Elton, L.
Baker, L.	Croft, L.	Fortescue, E.
Bathurst, E.	Cullen of Ashbourne, L.	Gainford, L.
Bellwin, L.	de Clifford, L.	Gainsborough, E.
Belstead, L.	De Freyne, L.	Gibson-Watt, L.
Brabazon of Tara, L.	Denham, L. [Teller.]	Gormanston, V.
Brougham and Vaux, L.	Drumalbyn, L.	Gowrie, E.
Cathcart, E.	Duncan-Sandys, L.	Greenway, L.
Chelwood, L.	Ebbisham, L.

and making a profit), paying the local authority. But I cannot see any case for charging a person who just wishes to improve and extend his house with no intention, in general, of making a profit—he only wishes to increase the enjoyment of his property from his own point of view.

I must say that I am not happy. In fact, I feel that this part of the Bill—after the block grants, which were discussed so late at night, and perhaps not as seriously as we should have discussed them—is, in many a sense, the most important part to the average man in the street. I feel strongly that, while planning applications should not be charged at all, if they are to be charged there should be an exemption in this case, and I shall test the feeling of the House.

6.59 p.m.

On Question, Whether the said amendment (No. 122) shall be agreed to?

Their Lordships divided: Contents, 70; Not-Con ents, 86.

Hailsham of Saint Marylebone, L. (L. Chancellor.)	Mancroft, L.	Sandford, L.
	Mansfield, E.	Sandys, L. [Teller.]
Harmar-Nicholls, L.	Margadale, L.	Selsdon, L.
Hatherton, L.	Marley, L.	Sempill, Ly.
Hemphill, L.	Massereene and Ferrard, V.	Soames, L. (L. President.)
Hornsby-Smith, B.	Mottistone, L.	Strathclyde, L.
Kemsley, V.	Northchurch, B.	Sudeley, L.
Killearn, L.	Nigent of Guildford, L.	Swansea, L.
Kimberley, E.	Nunburnholme, L.	Torphichen, L.
Kinnaird, L.	Onslow, E.	Trefgarne, L.
Kinnoull, E.	Orkney, E.	Trenchard, V.
Knutsford, V.	Pender, L.	Ullswater, V.
Lindsey and Abingdon, E.	Rawlinson of Ewell, L.	Vaux of Harrowden, L.
Long, V.	Redmayne, L.	Vickers, B.
Lucas of Chilworth, L.	Renton, L.	Vivian, L.
Lyell, L.	Rochdale, V.	Westbury, L.
McFadzean, L.	Romney, E.	Wynford, L.
Mackay of Clashfern, L.	St. Aldwyn, E.	Young, B.
Macleod of Borve, B.

7.7 p.m.

Lord MONSON moved Amendment No. 124: Page 76, line 31, at end insert ("and shall provide for the refund of 50 per cent. of the prescribed fee in cases where the application is refused and where the applicant not being a body corporate is the owner and occupier of the dwelling-house to which the application related.").

The noble Lord said: My Lords, I beg to move Amendment No. 124.

Lord DENHAM

My Lords, I do not know whether this amendment has already been spoken to, but if there is a point to be raised on it, perhaps we could adjourn first.

Lord MONSON

My Lords, I have spoken to it.

Lord DENHAM

My Lords, perhaps the noble Lord could help the House because the agreement was to adjourn fairly near to seven o'clock. If the noble Lord is going to be very short we can take the amendment now; if not, perhaps we can take it afterwards.

Lord MONSON

My Lords, I intend to be fairly short. The amendment has been spoken to, but I wish to speak briefly to it again.

Lord DENHAM

My Lords, in that case I think it would be best if we adjourn further consideration on Report, the Report stage to be resumed at eight o'clock.

My Lords, I beg to move that further consideration on Report be now adjourned.