HL Deb 02 June 1981 vol 420 cc1132-69

4.17 p.m.

Report stage resumed, on Clause 2.

Lord Ross of Marnock moved Amendment No. 3: Page 3, leave out lines 9 to 21.

The noble Lord said: My Lords, I beg to move Amendment No. 3 which deals yet again with another power which the Secretary of State takes in respect of valuation and in respect of the power to exclude certain lands and heritages. One only has to read the words to see why I object to them. The words I propose to leave out include: (6D) The Secretary of State may by order under this subsection— (a) repeal or amend any enactment (including this Act) in so far as that enactment relates to the valuation of lands and heritages and such valuation is affected by an order under sub-paragraph (i) of the proviso to subsection (3)(a), or under subsection (6A), above". This is a very wide power to give to any Secretary of State. It gives him the power to amend any enactment, including this one which we are asked to hurry up with. That this enactment itself amends an Act which this House passed about nine months ago shows how speedily a change of heart and mind can take place on the part of this Government. To give to a Secretary of State the power to repeal or amend any enactment, and to do so not by new legislation but by just an order, is asking for far too much and to my mind smacks of tyranny. I could not help but hear about the discussions which the English have had on their trials and tribulations regarding local government. They talked about parameters which are agreed, accepted and laid down happily. Here is one of the parameters: the exercise of a power by a Secretary of State to do anything he likes in respect of amendment or repeal. I am sure that with his usual flexibility the Minister of State will justify this in terms of democracy. I beg to move.

The Earl of Mansfield

My Lords, the new subsection (6D), which is what Amendment No. 3 seeks to delete (and Amendment No. 4 which is consequential to it, I dare say), is an enabling provision—nay, more than that—which will allow the Secretary of State by order to repeal or amend enactments relating to valuation where that valuation is affected by orders made under Clause 2 and also to apply, restrict or modify enactments relating to appeals.

The purpose of the provision is to allow a modest measure of flexibility in preparing for a partial revaluation to allow the adjustment of relevant Acts, by order, should this be found necessary. It would be difficult to say at this stage with complete assurance that every statutory reference to revaluation has been checked and found to be compatible with a partial revaluation as proposed by Clause 2; it would be unfortunate if some small impediment were found at a later date which held up the process, or if as an unforeseen consequence of a partial revaluation a ratepayer were inequitably treated. It is to help overcome such obstacles that we have sought the inclusion of subsection (6D) in the Bill.

Not only has the subsection no sinister implications but so far as its provenance is concerned—if that is the right word—it is remarkably similar to Section 6(5) of the Local Government (Scotland) Act 1975 (as amended by Section 1 of the Local Government (Scotland) Act 1978 enacted by the previous Administration) which relates to orders providing for the valuation by formula of certain lands and heritages occupied by public undertakings. The effect of that provision is to empower the Secretary of State to repeal or amend any enactment in so far as it relates to valuation and rating matters in respect of lands and heritages valued by formula.

I should point out that an order under this new subsection 6(D), which is in any case strictly limited in its application, would be subject to the affirmative resolution procedure of both Houses of Parliament, which, I suggest, would allow adequate scrutiny of any repeals or amendments which prove to be necessary.

On that basis, I hope that on reflection the noble Lord, Lord Ross, will see that the subsection perhaps does not have the somewhat sweeping powers which he alleged when he moved the amendment.

Lord Ross of Marnock

My Lords, like it or not, the sweeping powers are there. They remain. It may be that the intention of the Government is not to use them in a sweeping way—that I can understand—but, unfortunately, these words are there and nothing could be more sweeping than, repeal or amend any enactment (including this Act)". The Minister pleads in aid that this same thing was done in relation to the method of valuation for certain public undertakings. I shall not go into that now, but the change of formula by order is a very different thing from amending legislation. If the formula is actually in legislation then one is quite wise and right to do it. I do not know that there is anyone in this House who could get up at this moment and tell me how the valuation process works in relation to, say, the Hydro-Electricity Board or British Rail and the other public undertakings. That was certainly one formula that I always reckoned only one Member of Parliament could understand; that was Tom Steele, and he is dead now. So we have a considerable loss in respect of what our civil servants in the Scottish Office think is an adequate formula in relation to the valuation of these particular public undertakings.

I do not think it is good enough, but the real answer came from the Minister. There might, in this Bill, be a change being made, and we have not had time to go through all the other pieces of legislation to put it right, or, in other words, to amend now as one usually does in a schedule, listing a whole series of changes which have to be made in consequence of what one is now doing. That is the real reason. So not only are the Government being tyrannical, they are being negligent and they are covering their negligence by saying "That is all right. If we discover that there is something we have missed, we will pass an order"—and more parliamentary time goes by the board. That is what it means and, if the Minister of State is prepared to accept that and to claim to the world that that is what they are doing, who am I to stop them?

I have no intention of taking this amendment to a Division, but I should like people in Scotland to know just what kind of Government they have and indeed what kind of House of Lords—one which is prepared to accept this kind of thing. We say that we perform a useful function here because we catch up on the mistakes of another place. We shall be agreeing to the mistakes of another place if we allow this to go through and allow a negligent Government to cover their negligence by a sweeping power which goes far beyond negligence. Irrespective of what their aim is or what they say their virtuous purpose is, it gives the Secretary of State the power to repeal or amend any enactment, and that is far too wide a power to give to anyone. However I am prepared not to press the amendment, having declared what I consider to be the true weakness of this particular subsection. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.28 p.m.

Lord Ross of Marnock had given notice of his intention to move Amendment No. 4: Page 3, line 24, leave out ("or under subsection (6D), above").

The noble Lord said: My Lords, this amendment is connected with the previous amendment, so I do not propose to move it.

Lord Ross of Marnock moved Amendment No. 5: After Clause 11, insert the following new clause:

("Information to be furnished by assessors

. In section 12 of the 1956 Act (Information to be furnished by parties to appeal or complaint) such information as it is the duty of the assessor to furnish in sub-paragraph (a)(i) and (ii) shall be made available timeously on written respect to a ratepayer who is considering appeal or complaint.").

The noble Lord said: My Lords, this amendment deals with the information that is furnished by assessors in respect of a person who, like the noble Lord, Lord Strathclyde, is worried about his rates and his valuation—very often he has not got available readily to hand the information he requires on which to base his appeal or his complaint. At the moment only when he actually appeals or complains is he entitled to get information from the assessor.

This amendment is a fairly simple one. It is to enable the person who is considering an appeal or a complaint to get from the assessor the information on which he can make up his mind whether it is worth while to appeal. It may well be that the assessor will say, "We are dealing with you on the same basis as we have dealt with so and so" That may well be satisfactory.

However, at the moment all the cards are on the side of the assessor. He lays down the figure on which he bases the assessment; he gives no information about it and he is not required by law to do so. It is a purely subjective judgment, but when you are appealing, when you are actually entering your appeal, you have to tell him the basis of your appeal and it is only later that you have that information from him that I suggest should be given to the would-be appellant or possible complainant. It is a simple and fair amendment and I hope that the Minister will be prepared to accept it. I beg to move.

The Earl of Mansfield

My Lords, I have some sympathy with the objectives and motivation on the part of the noble Lord, Lord Ross, underlying his proposed new clause. Valuation is a complex subject, and I accept entirely that the ratepayer who decides to take issue with his local assessor about the values which have been fixed has a difficult task in front of him if he is to pursue his appeal or complaint effectively. This applies particularly to the domestic ratepayer, who is unlikely to have the professional services of a rating surveyor or a lawyer.

However, I cannot agree to the addition of this new clause. First, it is technically imperfect because Section 12 of the Valuation and Rating (Scotland) Act 1956, to which the clause refers, has been repealed, and provision for the exchange of information between ratepayer and assessor is now contained in Regulation 6 of the Appeals and Valuation Appeal Committee Procedure (Scotland) Regulations 1978, so that if one did want to achieve what the noble Lord is setting out to achieve, one would not need to indulge in primary legislation; all that would be required would be to amend the 1978 regulations.

Taking the clause on its merits, Regulation 6 of the 1978 appeal regulations requires the appellant ratepayer to provide the assessor with a statement of his grounds of appeal, and the assessor must then respond with a note of the basis of his valuation. Provision is also made for the exchange of lists of comparable properties at the instance of either party. The clause seeks to extend this principle by requiring the assessor to provide information to a ratepayer who is considering whether to lodge an appeal or complaint. I doubt whether this extension would have the intended beneficial effect for the ratepayer. A ratepayer will not appear before a local valuation appeal committee until he has discussed his case with the assessor, and during the course of these discussions both parties will learn a great deal about each others arguments. It may be argued that there is no harm in seeking to formalise an existing informal practice, but I am sure that formal written statements given to the ratepayer by the assessor would, if they were going to be really helpful, have to be supplemented by informal discussions of the sort which already take place. In short, then, the ratepayer would be no better off than he is at present, and assessors departments would have an additional and burdensome, yet unnecessary, task imposed on them. This would be particularly undesirable after a revaluation when inevitably they are under great pressure.

I should like to make clear that these informal discussion can and do take place before a ratepayer has formally lodged an appeal or complaint. There is no prescribed way of appealing. Though some may lodge an appeal as a first step and then withdraw it after discussion, or, as the case may be, pursue it before an appeal committee, others may start with an informal inquiry of the assessor and then lodge a formal appeal only if they do not receive a satisfactory answer.

As I have said, I have sympathy with the objectives of the new clause, and I would like to be positive in the matter. The Scottish Valuation Advisory Council has already started a review of the 1978 revaluation and this review also covers the associated appeal arrangements. So I will ask my right honourable friend the Secretary of State to put to the council the points raised by the noble Lord and they can be considered as part of this review, and any recommendations which the council makes will, of course, be given the most careful consideration. I hope, for all these reasons, the noble Lord will feel able to withdraw his amendment.

Lord Ross of Marnock

My Lords, I am no lawyer, but when the Minister of State suggests that this is all very well, quite unnecessary, that it is all covered by regulations, and all we need to do is change the regulations, all I can suggest to him is that he reads Section 12: Where an appeal or complaint is taken to a valuation appeal committee the regulations are hinged on that— it shall be the duty of the assessor if written request is made to him by the appellant or complainant at the time of lodging such appeal or complaint …".

The Earl of Mansfield

My Lords, I tried to say to the noble Lord that that has now been repealed.

Lord Ross of Marnock

The section has been repealed?

The Earl of Mansfield


Lord Ross of Marnock

My Lords, I will certainly have a look at it before we come to the next stage of the Bill. I know what I am talking about in relation to this question of the informal discussions. I had two informal discussions, with two separate people who came to me, who were anxious that I should not proceed with an appeal. The noble Lord probably knows—or the Scottish Valuation Advisory Council will know—that they were probably deluged by appeals from the part of the town I lived in because of what was considered very considerable unfairness in terms of valuation. I am still to be supplied with a list of relevant properties on which the valuation was based.

As it works at the moment, all the power is in the hands of, and all the balance is for, the assessor. It is not every occupier, ratepayer, who has the time, the knowledge or anything else to go chasing round all the valuation rolls seeking out all the properties he would like to cite as favouring his particular appeal. Certainly by the time I deal with Scottish legislation in this place, I have very little time left, and I have not got the Scottish Office behind me to do all the work for me; I can assure the Minister that there are many people who would like to appeal. The information they have to supply, rather than the information they receive, is inimical to them. I am very glad, however, that the noble Earl is prepared to refer this aspect of it to the Scottish Valuation Advisory Council. On the understanding that that will be done and eventually we will get a report on this particular point, I am very happy to withdraw this amendment.

Amendment, by leave, withdrawn.

Clause 14 [Reduction of rate support grant where local authority's estimated expenditure excessive and unreasonable]:

4.40 p.m.

Lord Ross of Marnock moved Amendment No. 6:

Page 6, line 38, at end insert— ("( ) in paragraph (a) for the word "or" where it last occurs, there shall be substituted the word "and".").

The noble Lord said: My Lords, now we come to the really important parts of the Bill. This amendment relates to Clause 14. We come to something that may have a familiar ring to English ears who listened through the statement that was made, because here, in Clause 14, we have the Government's proposals in relation to dealing with what they consider excessive and unreasonable expenditure in Scotland.

It was always cited that of course this power was always there, readily there; it was in Clause 8 of the 1966 Act, and this had been brought forward from times past to give the power to the Secretary of State to reduce rate support grant in case of default. There were two justifications for it. The main concern originally in respect of this default was that a local authority that was bound by statute to provide services was not providing reasonable services. Some of them were not providing the services at all, but they were rating for those services that were unprovided, and to that extent their rates were unreasonable and excessive. So the power was continued in the 1966 Act to allow the Secretary of State to deal with this question of regard being had to the standards maintained by other authorities and boards … that the expenditure of any local authority … had been excessive and unreasonable, regard being had to the financial and other relevant circumstances of the area … concerned.".

To remove any doubt, my first amendment—I think we could probably deal with that one as one of the main aspects of this particular clause: the other two, Nos. 7 and 8, are not linked with this at all—is to link the two things together. When one is considering whether rates are unreasonable and excessive one must take into account whether the standards of service provided are unreasonable and excessive.

At this point I should like to pass on an apology from the noble Earl, Lord Minto, that he is not here today to battle away for Scottish local authorities. I think that he is the one noble Lord in this House who has experience of over six years of regional government, and this particular clause absolutely incenses him. However, he hopes to be here on Third Reading and to have an opportunity of saying, with even more emphasis than he has hitherto, what he feels about this matter.

I think that I have probably more experience of rate support grant than any other Member in this House—certainly in Scotland. I conducted meetings with the local authorities as regards this matter for eight years. Prior to that I was familiar with the Exchequer equalisation grant, and prior to that I was familiar with what I think was called the "general grant". For 33 years I have seen the whole thing develop. There once was a lovely time in Scotland when all one did was divide by 80 and multiply by 11. It was called the "Goschen formula". Whatever the expenditure on education was in England, Scotland received 11/80ths. As Scotland was much more enlightened as regards education long, long before England and took in the Roman Catholic schools and the Church of England schools and made them virtually local authority schools—that was 60 years ago—the pressures of events in relation to fairness to these schools in England and Wales meant that sooner or later, if we stuck to the 11/80ths, Scotland's flow-back from the increased expenditure in England would be considerably to Scotland's advantage. That, I am afraid, was wiped out by a Conservative Government, of course, at a time when it was becoming extremely suitable for Scotland.

However, what was said by a noble Lord during the discussions on the English rate support grant is correct. When it comes to the rate support grant one sits down with the local authorities and determines what is all the reckonable local government expenditure. It is not always agreed and has not been agreed in the past two years, but the Government decide that that is the sum. Then there is another chain, another decision to be made by the Government; namely, the extent to which they will support the rate support grant. In Scotland this year I think that it is between 64 per cent. and 65 per cent.

The Government have now warned the local authorities that no matter what happens they will only meet additional expenditure in relation to inflation of, I think, 11 per cent.—I think that that is written in—and 6 per cent. for wages, and the local authorities must meet the rest. There will be no change beyond that. What have this same Government agreed with the teachers?—over 7 per cent. What have they agreed with the police?—over 7 per cent. What have they agreed with the local authority workers?—over 7 per cent. How will it be met? It can only be met out of rates. This is not a failure of local government. This is why reckonable expenditure, despite what the noble Lord, Lord Boyd-Carpenter, says in respect of England anyway, is unrealistic. It is not facing the facts.

I do not know whether the noble Lord has seen the figures properly quoted in relation certainly to Scotland. As regards local government and central Government expenditure for 1975–76 as compared with 1981–82 at 1976 prices, the current expenditure of local government, taking 100 as the base figure, is now 97.1 in Scotland—that is a reduction. Central Government's expenditure has increased from 100 to 114. Local government have reduced their expenditure: central Government have increased their expenditure. The same is true of capital expenditure. Therefore, the record of local government is far, far better than that of central Government which themselves set the task. It is not local government, but central Government, which is out of control. It is quite wrong to come here and give the impression that somehow or other local authorities, be they in Scotland or England, have been failing the nation.

I remember what the Minister said on Second Reading. Indeed, this point strikes the noble Earl, Lord Minto, very sorely and he has given me the advantage of his notes in respect of this matter. The Minister of State on Second Reading—and he implied it again in Committee—said that as regards local government it was relevant to take the changes in expenditure from, I think it was, 1971–72 as compared with 1975–76. But he did not tell us what happened between 1971 and 1975. I remember being at a Scottish Labour Party Conference and being informed by telephone that the Government had decided to raise the school leaving age. I think that it was early 1970. It may well be that the noble Lord, Lord Home of the Hirsel, will remember that decision—it was before the election, of course. But what were the implications for expenditure? The expenditure implications as regards local authorities were very much increased expenditure in relation to schools, secondary schools, further education as well as teachers. Now we have a Government of the same complexion coming along and telling us that they should not have spent that money and using it in an unfair comparison.

I was the Secretary of State who introduced the Social Work Act in relation to Scotland. It was, and is still, much more comprehensive than the Act in England and Wales, because we took over the aftercare service in relation to people leaving prison and supervisory services of that nature. That took place in late 1967. It took a year or two to go ahead. But by 1971 completely new expenditure was building up. We must remember that the periods that were quoted by the Minister of State were times when there was a Tory Government, when there was a great increase in local government expenditure—for example, health and personal social services; environmental services such as swimming pools. I can remember every Tory Member in the House of Commons demanding more. So it is pretty unfair to make comparisons with that situation—to meet the obligation of Acts passed by this House—and for the Government to come along now and say that that was then things got out of control. It is absolute nonsense.

Local government has been bearing a disproportionate share of the cuts that the Government deem necessary. It is unfair when the Government are increasing expenditure as they are, to blame local authorities, when all that they are doing is trying—many of them at a minimal stage now—to meet the obligations placed upon them. After local government reform the subsidies to transport in the rural areas, which county councils never had to bear, fell upon the new regional authorities. The subsidies for rural transport, at the demands of this House, are now used against local authorities as being unreasonable expenditure. Beyond the point of fixing reckonable expenditure, the Government decide what proportion of that expenditure they will bear. Having fixed an unreasonably low level, in the past two years they have been reducing the proportion paid by them. So it is easy to understand why our rates have gone up. If we ignore the services and look only at the rates, and talk only about one authority as compared with another instead of how the authorities have managed this without looking at how the Government have done, that would give a very unfair picture altogether.

I have plenty of examples of how people have desperately tried to meet guidelines. The rates in Strathclyde have increased by about 37½ per cent.—28p in the pound. If they had met the guidelines that the Government laid down, instead of going up by 37½ per cent. they would have gone up by 30 per cent. That is the Government's acceptance of reasonable expenditure, but not a reasonable rates rise. So the Government take action such as this to compel any local authority to rethink the matter, denying the authority the right to determine its own expenditure, but telling it that it must think again and that if it does not, they will take away part of its rate support grant.

The Government have not mentioned one authority yet. I do not know what authorities they mean. Do they mean the Borders or the Highlands and Islands? Of the 65 Scottish local authorities, 59 are above these guidelines. Seven regions, one Highlands and Islands authority and 10 district authorities exceeded the guidelines by up to 10 per cent.; between 10 per cent. and 20 per cent. 12 district authorities exceeded them; and one region, two islands authorities, and 26 district authorities—29 in all—were over 20 per cent. above the guidelines. Against which local authorities will the Government take action? I think that we are entitled to know. Will they ensure that the services provided are adequate and reasonable, or will they concentrate purely and simply on the question of the actual rate burden?

The Government can determine the rate burden, fix a low reckonable expenditure and fix a low percentage to be met by the authorities, and it must be met by the rates. Now they say that the rates must come down or they will reduce the rate support grant. The authority may say that it is an independent authority, that these are the services which it thinks are right and that it will meet the deficit by borrowing. But the Government say that it cannot borrow.

We have reached the point where there will virtually be no independent local government in Scotland. Those are not my words. The Scotsman, Scotland's national newspaper, in an article published on 27th May 1981, said: … Mr. George Younger will have the power to undermine the independence of local councils, making them mere puppets dancing to his instructions. No other conclusion can be drawn from the provision in the Bill which will allow him to cut the rate support grant to those councils, the estimated expenditure of which he considers to be 'excessive and unreasonable'. The bill also prevents an offending authority from borrowing to make good the shortfall, as they have the entitlement at the present time. I am trying hard to save the Government from an abyss into which they are racing headlong. I do not know what kind of Statement we shall have which will be equivalent to the English one that we have had today. What more can we do for Scottish local authorities?—or has someone had a brainwave?

By accepting this amendment and inserting an "and" instead of an "or", and linking the actual reasonable standard of services with the actual rates burden, we might get a different attitude from the Government. But I believe that it may well be too late even for that; that they cannot withdraw from the abyss.

During the past week I have done some reading and have read the White Paper entitled Reform of Local Government, February 1971. It says: The Government intend to seize the opportunity of reorganisation to secure for local government a new and improved status … If local authorities are to exercise more independent control over local affairs their relationship with central government must be recast. This involves a fresh look at the financing of local government". That was a Tory White Paper. What is the result of their fresh look? They are hammering local authorities into the ground. I do not know what the noble Viscount, Lord Massereene and Ferrard, thinks about this; I hope that we shall have one of his inimitable speeches. He had better be careful or I shall quote him the exact position in the Highlands. When we deal with all this we must take the kind of authorities that are faced with this situation and which cannot meet the guidelines. I hope that the Government will think again. This is the first of many amendments that I shall move in relation to this matter. I hope to hear some noble Lords on the Conservative side saying a few words about it.

During the Committee stage from the Conservative side of the House there was not one amendment—I do not know whether there were any more than two speeches, although we had a very outspoken speech from one noble Lord who is not present so I shall not mention his name today, but at least he had the courage to get up and state what he thought—to this Bill, which opens up the whole field of local government, and I am asked to take this place seriously! There was lack of interest. In relation to this I think it was the noble Viscount, Lord Massereene, who had tabled some Questions complaining about local government; he could have dealt with that in this Bill by tabling dozens of amendments and new clauses on any subject with which local authorities deal. That is the scope of this Bill.

The Government desperately want this Bill; they have even fixed the Third Reading for next week—the provisional date given to me was 9th June. But, of course, the Minister of State has let down everyone in the Scottish office. He could stand up to the political lobby, but he could not stand up to the disabled lobby and he is accepting amendments, so the Bill has to go back to another place, and the Government's timetable is seriously discommoded.

The Scotsman suggested that this was a questionable Bill. There is no question about the clause that I seek to amend. It is one of the worst clauses that I have ever seen. I sincerely hope that even at the last minute the Government will change their mind and pull away from this disaster of confrontation. I beg to move.

Viscount Massereene and Ferrard

My Lords, as the noble Lord has referred to me, I should just like to state that in the last three years—I am in Strathclyde, in the Isle of Mull—

Lord Ross of Marnock

You are very lucky.

Viscount Massereene and Ferrard

I am very unlucky, because our rates have increased three times and we have no extra service except garbage collection. But nobody wants garbage collection because we have always disposed of our own garbage. There appears to be no excuse for this exorbitant rise. Of course the reason is that it goes towards supporting council housing in Glasgow. It is my misfortune to be geographically in a Highland area—

Lord Ross of Marnock

My Lords, would the noble Viscount allow me? The one thing the region does not do, has no control over, pays nothing at all towards, is housing. That is a district function.

Viscount Masseereene and Ferrard

My Lords, that may be so, but at any rate the point is that the rates have gone up, so far as f am concerned, three times. True enough they have doubled the staff in Tobermory, but that could not account for all the rise in rates. I am personally behind the Government in this Bill.

5.1 p.m.

The Earl of Mansfield

My Lords, I think that one matter on which there is agreement is that this is probably the clause which is at the heart of this part of the Bill and is of the utmost importance. As the noble Lord, Lord Ross, knows only too well, the major aim of the Bill's provisions, and in particular this clause, and those provisions which the noble Lord's amendment would vitiate—and I notice he had very little to say about his amendment in 21 minutes of earnest endeavour—is to give the Secretary of State power to act effectively against overspending by an individual local authority.

"What local authorities will be proceeded against?" asked the noble Lord. "We are entitled to know", I wrote down. Of course this was a question which the noble Lord, Lord Hughes, addressed to me, in effect, at an earlier stage of the Bill. I think that this would be the correct time in your Lordships' deliberations to respond. What I said on the last occasion—and at any rate in my submission I was right in saying it—was that it would not be proper if the Secretary of State were to act as if the Bill had already been passed, but certain preliminary administrative steps are necessary which will in no way presume passage of the Bill.

My right honourable friend thinks it highly desirable, as a matter of sound financial administration, that authorities who might suffer grant reduction should be made aware as far in advance as possible of that contingency, and of the basis upon which he had reached a preliminary view that their estimated expenses were excessive and unreasonable. Accordingly, therefore, my right honourable friend proposes soon to issue preliminary notice to certain local authorities in Scotland that the expenditure which they are planning to incur in 1981–82 appears to him to be excessive and unreasonable within the terms specified in the Bill which we are now discussing, and he will also inform them of his reasons for coming to that view. The cases would concern the most serious and urgent instances of expenditure which, prima facie, appear to the Secretary of State to be excessive and unreasonable. Such preliminary notice and the response to it would also assist my right honourable friend to establish as soon as possible the scale of any grant reductions which he may require to make, and in particular to ensure that any over-payment of grant to any authority with the need for subsequent clawback is avoided.

The procedure to be followed subsequently involves the laying of a report by the Secretary of State which specifies the amount of, and reasons for, the proposed reduction and sets out the local authorities' representations, and the resolution of another place, including the report, is required before any reduction in grant can be made. This is of course without prejudice to his formal reconsideration of the circumstances of each case if the powers are in fact granted to him. It should be appreciated by other authorities, whose planned expenditure does not appear to be at this stage of such a magnitude as would warrant preliminary notice, that the Secretary of State may subsequently decide that he is obliged to exercise his powers in their cases in respect of the current financial year.

It is in those terms that we have to consider the nature of the noble Lord's amendment. Under the 1966 Act the powers presently available to the Secretary of State allow him, with the approval of the House of Commons, to reduce grant only after an excessive and unreasonable expenditure has been incurred. The retrospective nature of the existing power means that the authority concerned has no opportunity to reduce expenditure, and any action which the Secretary of State might take under his existing powers would follow the fact of overspending and could only be punitive in nature.

The effect of the noble Lord's amendment, as I suspect he very well knows, would make a nonsense of the provisions in the Bill—and I see him nodding—because it would have the effect that the power to act on planned expenditure could only be exercised, together with the power to act on actual expenditure, in terms of the existing provision in the 1966 Act. Therefore, the proposals in the Bill are, as I have tried to illustrate, considerably different in their application and effect, if not in principle, from the existing powers, and to be effective the power requires to be available to the Secretary of State without its use being con- ditional on the availability of the existing power in the 1966 Act.

I am not going into a clause stand part debate although, and I do not say this in a sense of too much criticism, I thought that that was what the noble Lord, Lord Ross, was arguing. He, among other things, complained that the level of expenditure fixed for local authorities was too low. I say to him that the level of expenditure relevant for rate support grant taken into account for 1981–82 is more in real terms than actual expenditure in 1977–78, so that the expenditure targets are in no sense of the word unrealistic so far as 1981–82 is concerned.

Our proposals and our policy on public expenditure, which have been exemplified by a lot of Bills coming before this House, are vital to the wellbeing of the nation as a whole. These proposals in this Bill are an important part of the means of bringing that policy to fruition. So at the risk of raising the noble Lord's ire, and I think of an occasion last summer when I described one of his amendments as being wrecking in nature, I have to repeat that allegation today and advise the House that the Government cannot accept it. I hope that to save time, if nothing else, the noble Lord might see fit to withdraw it.

Viscount Thurso

My Lords, having listened to this argument and having heard the noble Lord, Lord Ross of Marnock, freely admit that the amendment is solely designed to wreck, I feel it would be difficult for me to follow him in this particular amendment. I dislike Clause 14 and I do not really like the Bill at all so far as it goes, but having got this far to this stage of discussion and examination, I am not sure that it is our duty to wreck the Bill completely. These are, after all, provisions which would wreck not only this Bill but would be critical of a Bill which was indeed passed by a previous Government for the control of local authority behaviour and expenditure, and so forth. I feel it would be difficult in this particular amendment to follow the noble Lord, Lord Ross of Marnock, much as I dislike the principle embodied in Clause 14.

Lord Hughes

My Lords, I suppose the noble Earl, Lord Mansfield, can take a modicum of comfort from that qualified degree of support from the Liberal Benches. I am sorry that I cannot follow the noble Viscount, Lord Thurso, along that line. Indeed, I did not intend to take part in this discussion until the Minister referred to what I had said about the clause at a previous stage.

We must remember that the greatest part of expenditure carried out by local authorities is in pursuance of duties and obligations laid on them by successive governments. Governments tell local authorities, "You must provide such and such a service" or "You must undertake such and such a duty", and successive governments of both parties, Labour and Conservative, as my noble friend Lord Ross pointed out, have placed such responsibilities on local authorities. If the present Government consider that in carrying out those responsibilities a local authority is spending too much money, they should say in what way they are overspending, because they cannot say they are undertaking services for which they have no legal right or obligation placed on them.

If, therefore, in the carrying out of those responsibilities—as the noble Earl, Lord Minto, said at the last stage and my noble friend Lord Ross repeated today—59 out of 65 local authorities are unable to comply with the Government's guidelines, then we are reminded of the well-known Scottish saying, "They are all out of step except our Jock". It would appear that the Government are wrong in their guidelines because a majority of the 59 local authorities which are not complying with them are not Labour authorities; they include Labour authorities but they also include Independents and Conservatives, and they have been unable to comply.

When referring to what might be done, the Minister said action might be taken against certain authorities, and of course he did not specify which they might be. He might have been more helpful—I can understand him at this stage not wanting to name particular authorities—by indicating whether action is to be taken against all those authorities which are failing to keep within the Government's guidelines. Are all 59 at risk, or such number of the 59 as are unable to bring themselves within the guidelines? Or are we to understand that there will be a point at which failure to abide by the guidelines will be forgiven on the one hand and punished on the other?

It will be interesting in due course to discover at what point an inability to comply with the Government's guidelines will be regarded as a sin which will not be forgiven, or as a minor transgression which will be allowed to pass. It is obvious that if, at the end of the day, the great majority of Scottish local authorities are unable to comply with the guidelines, the Government will be unable to exercise the powers in such a way as to punish all of them. The conclusion which, I believe, will be drawn by local authorities is that it is the guidelines which are wrong.

If, therefore, the Government wish to reduce the expenditure which local authorities can properly undertake, they should be withdrawing the duties and telling local authorities, "You should not be doing such and such a thing and therefore we shall alter the law. We will withdraw your responsibilities for social work, education" or whatever the case may be; but the Government cannot leave those responsibilities as they are at present and then punish local authorities for carrying them out. It seems from the way the Government are acting that local government in Scotland is on a hiding to nothing.

Lord Wilson of Langside

My Lords, I am certain that nothing I am likely to say on this matter will bring comfort to the noble Earl, Lord Mansfield. I find myself broadly in agreement with what the noble Viscount, Lord Thurso, said about Clause 14. I do so particularly in the context of the provisions of Section 5 of the Local Government (Scotland) Act 1966, a measure promoted by a Government of which the noble Lord, Lord Ross, and myself, for our sins or otherwise according to the view one takes of the matter, were members. Section 5, and in particular Section 5(2), empowers the Secretary of State to take action by making regulations for prescribing standards and general requirements in relation to any function of a local authority in Scotland. That colours my judgment in trying to assess the force of the arguments that have been presented against Clause 14 which, like the noble Viscount, Lord Thurso, I do not much like. However, I do not feel that we, who were responsible for the provisions of Section 5 of the 1966 Act, can direct very serious argument against it.

5.18 p.m.

Lord Ross of Marnock

The 1966 Act, I think we will discover, was a consolidation measure, and the noble and learned Lord, Lord Wilson of Langside, who until recently I called "my noble friend", will find that the power to which he referred has been in existence for a very long time, and certainly was there prior to the Labour Government of which he spoke. I can also tell him that that power was never used because local authorities pretty well accepted the role and spirit of the understandings that existed between central and local government. That has been true until this very time, and the more this Government have been shouting for the past couple of years about how they were going to do something about it, the more they made confrontation with some authorities absolutely inevitable.

Be that as it may, we return to the point made by my noble friend Lord Hughes, namely that there are 65 local authorities and that the guidelines laid down by the Government are such that 59 of them—including Conservative, Independent (a lot of local government in Scotland is Independent) as well as Labour authorities—have not been able to meet them. I cannot understand those who try to ride away on the argument that while they do not like Clause 14, they are not prepared to vote against it. I would remind them that there is a Bill without Clause 14; there is a measure in relation to valuation, to getting rid of certain quangos and there are references to housing. We are dealing with only one clause of Part II of the Bill. But, having tasted the water and found it was unpleasant, they are not prepared to throw it out; they are going to drink it, and that surprises me. Well, I am disappointed—I am not surprised—at the reactions of the Liberal Party and the other party which sits up there: the Shirley/David playgroup. I had hoped that there would be something better than that from them in relation to their opposition to what to my mind is to be a very dangerous measure.

I am sorry that the noble Viscount who seemed to think that Strathclyde dealt with housing has left the Chamber. Housing is one of the things with which it does not deal, but evidently the noble Viscount did not appreciate even that the rate support grant does not include anything about housing, unless it is something in relation to interest rates. It is on this basis of ignorance that we are passing legislation and supporting a Government who themselves admit their own negligence. I am sorry about this from the point of view of Scotland and the good government of Scotland. There is no doubt that this particular clause is the heart of the matter.

I do not disagree with the wide sweep that the Minister of State took. Bearing in mind that this is the Report stage and that I am on my feet only once, apart from replying, I thought that I had better make the best of it and the most of it. I am sorry that we are approaching six o'clock and that some Scottish parliamentarians will not be on Horse Guards to see Beating Retreat.

The Minister told us about the report, the information from the local authorities, the response, the including of that within a report, and it coming to Parliament. All of that is in the Bill and has nothing to do with this particular amendment. I do not disagree with him there. But what we wanted to know—we shall be asking the question again—is which of the 59 local authorities are to be dealt with, even from a preliminary point of view. He now tells us that the Government have made up their mind about it. Which authorities are to be taken to task? I am perfectly sure that we shall get no more information on that from the Minister.

I regard this as being probably the most important part of the Bill from a local authority point of view. I tried, quite rightly, to change the principle of it and to get back more towards the 1966 Act. It was not intended to take away all the powers from the Government—far from it. They still have power. We are concerned about the retrospective powers that they are taking here and are applying to 1981–82—a period which has already started. We shall come later to the question of the actual timing, how long it is all going to take, and the extent to which your Lordships are to agree to give retrospective power to a Government. I shall not withdraw the amendment, but rather I shall proceed to a Division, and I shall do so fairly quickly—

Lord Wilson of Langside

My Lords, before the noble Lord sits down, and with the leave of the House, may I ask him on what basis he asserts that the Local Government (Scotland) Act 1966 was a consolidation statute? If in fact it was, what relevance does that have?

Lord Ross of Marnock

My Lords, the point was that it was bringing forward into a Bill powers that were already there. There is a Joint Committee—I was once a member of it—of this House and the other House appointed to deal with consolidation, and the one thing that one cannot do with consolidation is to amend. It might well be that our names were connected with it because we happened to be there at the time, and to that extent we are culpable. But the Government had a consolidation measure last year, and now they are amending a part of that statute in this Bill. One could not do that in a consolidation Bill; one can do it only through new legislation. That was my interpretation of the situation. It might well be that as a whole it was not a consolidation Bill, but the matter that we are now considering was certainly included. The Government have admitted that the power in the 1966 Act has been there since the 1940s. Your Lordships can take it from me that it was there before 1945.

5.25 p.m.

On Question, Whether the said amendment (No. 6) shall be agreed to?

Their Lordships divided: Contents, 43; Not-Contents, 112.

Bishopston, L. Brockway, L.
Blease, L. Cledwyn of Penrhos, L.
Blyton, L. Collison, L.
David, B. [Teller.] Maelor, L.
Davies of Leek, L. Peart, L.
Elwyn-Jones, L. Ritchie-Calder, L.
Gaitskell, B. Ross of Marnock, L.
Glenamara, L. Sefton of Garston, L.
Gosford, E. Segal, L.
Hale, L. Shinwell, L.
Houghton of Sowerby, L. Stewart of Alvechurch, B.
Hughes, L. Stewart of Fulham, L.
John-Mackie, L. Stone, L.
Janner, L. Strabolgi, L.
Jeger, B. Taylor of Mansfield, L.
Jenkins of Putney, L. Underhill, L.
Kaldor, L. Wallace of Coslany, L.
Kirkhill, L. Wells-Pestell, L.
Leatherland, L. Whaddon, L.
Lee of Newton, L. White, B.
Listowel, E. Wootton of Abinger, B.
Llewelyn-Davies of Hastoe, B. [Teller.]
Abinger, L. Kilmany, L.
Airey of Abingdon, B. Kimberley, E.
Ampthill, L. Kinloss, Ly.
Avon, E. Kinnaird, L.
Bellwin, L. Kinnoull, E.
Belstead, L. Lauderdale, E.
Berkeley, B. Lawrence, L.
Bessborough, E. Long, V.
Blake, L. Loudoun, C.
Boardman, L. Lucas of Chilworth, L.
Bradford, E. Luke, L.
Bridgeman, V. Lyell, L.
Campbell of Croy, L. McFadzean, L.
Cockfield, L. Mackay of Clashfern, L.
Cork and Orrery, E. Macleod of Borve, B.
Cottesloe, L. Mancroft, L.
Craigmyle, L. Mansfield, E.
Cranbrook, E. Margadale, L.
Crawshaw, L. Marshall of Leeds, L.
Cullen of Ashbourne, L. Massereene and Ferrard, V.
Daventry, V. Milverton, L.
Davidson, V. Monk Bretton, L.
de Clifford, L. Newall, L.
De L'Isle, V. Northchurch, B.
Denham, L. [Teller.] Nugent of Guildford, L.
Dilhorne, V. Onslow, E.
Drumalbyn, L. Pender, L.
Duncan-Sandys, L. Penrhyn, L.
Dundee, E. Perth, E.
Elgin and Kincardine, E. Portland, D.
Ellenborough, L. Renton, L.
Exeter, M. Renwick, L.
Falkland, V. Rochdale, V.
Ferrers, E. Romney, E.
Foley, L. St. Aldwyn, E.
Fortescue, E. St. Davids, V.
Fraser of Kilmorack, L. Sandford, L.
Gainford, L. Sandys, L. [Teller.]
Garner, L. Savile, L.
Gisborough, L. Selkirk, E.
Glenarthur, L. Sharples, B.
Glenkinglas, L. Skelmersdale, L.
Grantchester, L. Spens, L.
Gridley, L. Stamp, L.
Grimston of Westbury, L. Stradbroke, E.
Hailsham of Saint Marylebone, L. Strathcarron, L.
Strathclyde, L.
Henley, L. Strathcona and Mount Royal, L.
Hill of Luton, L.
Hillingdon, L. Swinfen, L.
Home of the Hirsel, L. Swinton, E.
Hylton-Foster, B. Tollemache, L.
Ilchester, E. Trefgarne, L.
Inglewood, L. Trenchard, V.
Ironside, L. Trumpington, B.
Kemsley, V. Vaux of Harrowden, L.
Killearn, L. Vivian, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.34 p.m.

Lord Ross of Marnock moved Amendment No. 7:

Page 7, line 14, at end insert— ("(iv) after the words "local or" there shall be inserted the words "as the case may be"; and").

The noble Lord said: My Lords, I do not think anyone will be able to understand this amendment unless they have with them a copy of the Local Government (Scotland) Act 1966, because so much of this Bill is legislation by reference and is sheer gobbledegook. But in the interests of uniform drafting I thought we had better make this particular amendment: after the words 'local or' there shall be inserted the words 'as the case may be'; and I beg to move.

The Earl of Mansfield

My Lords, the amendment proposed by the noble Lord has the apparently admirable purpose of improving the drafting, not only of the Bill but of the 1966 Act. But the effect of the amendment would be to add unnecessary words to existing statute. The existing reference in statute which the amendment would modify is: to the local or constituent authority [of a joint board] in question". The amendment would make the reference read: to the local or as the case may be constituent authority in question". So the amendment, for all its admirable intention, would not I think in fact improve the clarity of the existing statute, and it is on that basis that I ask the noble Lord to withdraw it.

Lord Ross of Marnock

My Lords, nothing that I would insert in relation to drafting could make the Bill any worse than it is at the present time, particularly in relation to the amendments which are proposed to this clause. But far be it from me to cause any more troubled half-hours to draftsmen. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Ross of Marnock moved Amendment No. 8:

Page 7, line 14, at end insert— ("(v) after the words "opportunity of" there shall be inserted the words "and reasonable time for"; and").

The noble Lord said: My Lords, this, too, is a fairly simple amendment, and I hope it will meet the desire of the Government to be helpful to local authorities. Under the original Act the Government, who are concerned about excessive or unreasonable expenditure, afford to the local or constituent authority in question (having missed out my words "as the case may be") an opportunity to make representations. What I am suggesting is that not only should we give them an opportunity to make representations but that we should give them a reasonable time in which to do it. That is the effect of the amendment: to ensure that where by statute they already have to afford an opportunity to the local authority to make representations, they give them a reasonable time in which to make those representations.

Your Lordships should remember that in a later part of this Bill, when the Government want information from the local authorities, they use, I thought quite gratuitously, the word "timeously". I thought of perhaps inserting a word like that, but then I thought, "Let us say what we mean, and that is to give them a reasonable time to make their representations". That is the purpose of the amendment. There is nothing wrecking about it, so the noble Viscount can rest assured that on this occasion he will be quite safe in voting for this. It is a reasonable amendment to give local authorities a reasonable amount of time to make their representations on something as serious as this—the possibility of loss of a considerable part of their rate support grant. I beg to move.

The Earl of Mansfield

My Lords, I am all for statute being clear and understandable to the reader, and equally that it should convey quite clearly to the Executive what the intentions of Parliament were in placing the provision on the statute book. But I have to say to the noble Lord that his proposed words would in fact have the effect of adding unnecessary surplusage to existing statute.

If we go back to Section 5(1) of the Local Government (Scotland) Act 1966 as it stands, we find that the Secretary of State is under an obligation to afford to a local authority or to a constituent authority of the joint board an opportunity of making representations before he proceeds to take steps to seek approval of the House of Commons to a proposed reduction in rate support grant. The words "opportunity of making representation" in the existing statute imply that a reasonable time must be allowed by the Secretary of State for representations to be made, the word "opportunity" embracing not only a reasonable time factor but also other reasonable factors which may be relevant to the making of representations in a particular case. I can assure the House that if and when the Bill is enacted and the procedures relevant to exercising the proposed powers to reduce grant by reference to planned expenditure are available, the authority concerned will have sufficient opportunity to put their case, in effect before the House of Commons, in the form of representation provided by the 1966 Act as it stands already.

The preliminary notices to which I made reference when speaking to Amendment No. 6 will, I suggest, assist in this matter; they will give full details of the case which the local authority will have to answer in their representations, and so far as this year is concerned it would extend the period which would otherwise be available for making them. In these circumstances the words in the amendment would neither tighten up the obligations imposed upon the Secretary of State by statute nor would they make the statute any clearer or more understandable. In those circumstances, I cannot recommend this amendment to the House for acceptance.

Lord Hughes

My Lords, I am quite certain that my noble friend will feel that tabling this amendment has been justified because it has extracted from the noble Lord the Minister the statement he has just made. One knows that any assurance given by the Minister will not form part of the Act and that if it came to a court decision the courts would not take any account of what the Minister said but only of what was in the Act. In this context, however, I believe that local authorities will note that the Minister has made clear that, so far as the Government are concerned, they intend that giving an opportunity carries with it a reasonable time in which to take advantage of that opportunity. From that point of view, what my noble friend has done was justified, and in extracting that statement from the noble Lord, the Minister, I believe that it will prove to have been worth while.

Lord Ross of Marnock

My Lords, as my noble friend Lord Hughes said, it is true the word is not in the Bill, and to that extent I prefer words which are actually in the statute rather than words which are only implied. The Act only makes reference to "an opportunity of making representations". The noble Lord went on to say that local authorities would be able to make a report before the House of Commons, but it is not the local authorities who report to the House of Commons; it is the Government who do that. The Government are commanded by statute because the 1966 Act states: and setting any representation made by the authority with respect to the proposed reduction …". It is the Government who carry forward the representation of the local authority. It is for that reason, and knowing that local authorities will want to have some care as to what they want included in that report, that I felt it would be right to have in the statute that local authorities should be given reasonable time.

Tempers will become fairly frayed when this comes to be implemented on whatever local authorities might be affected. I know the Government may be thinking that I only put in this amendment in order to further delay matters. In actual fact the phrase "reasonable time" could be and has been construed before as being nothing to be afraid of; we have virtually a statement from the Government that they are going to afford reasonable time. To that extent and on the basis of other information we have received from the Secretary of State I am reasonably happy. But I want to impress upon the Minister of State the importance of the timing aspect, bearing in mind that the local authority do not deal directly in making a report to the House of Commons. Their representations are made to the Secretary of State and it is the Secretary of State who reports to the House of Commons and who includes within that report the local authority's representations. In the light of that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.45 p.m.

Lord Ross of Marnock moved Amendment No. 9: Page 7, line 27, leave out from ("which") to ("the") in line 30 and insert ("are in the opinion of the Secretary of State of a similar type to").

The noble Lord said: My Lords, in relation to putting a local authority in the dock, the Secretary of State stacks up all the cards in his favour and against the local authority. The criteria he has to use in determining that the expenditure of any local authority or joint board has been excessive and unreasonable are listed here. The Bill states that the Secretary of State: (a) may (in addition to the matters to which in terms of that paragraph regard must be had) have regard … (iii) to such other financial, economic, demographic, geographical and like criteria as he considers appropriate". That wording is already in the Bill and will remain in the Bill. The subsection also states that the Secretary of State may have regard: (i) to expenditure or estimated expenses, in that or any preceding year, of other local authorities which the Secretary of State is satisfied are closely comparable (or as closely comparable as is practicable) with the local authority concerned". I do not know how any Government could cover themselves, or how any Secretary of State could cover himself, so clearly with powers which could not be challenged, with wording such as, closely comparable (or as closely comparable as is practicable)". I have asked for a definition of what that means but I do not think anyone could give me one. This is a case of over-cautiousness on the part of the Government in making a statute that contains words which are quite meaningless. From that point of view I think the Government have demonstrated their own fears in respect of the powers they are taking.

I hope the Government will think again about this. I do not believe it would affect the actual carrying out of the statute or the Government's intentions, but it would give an indication that the Government are prepared to be a little more reasonable rather than cover themselves with all these caveats, such as closely comparable (or as closely comparable as is practicable)". If ever any judge had to define this—and I do not know whether there are any judges left in the Chamber—I wonder what he would make of it. I wonder what any judge would make of these two phrases. So I say, out with them. That is what I suggest. I trust that on this occasion the Government will see that my advice could be followed, and I beg to move.

5.49 p.m.

The Earl of Mansfield

My Lords, this amendment proposes that, in being satisfied that a local authority's estimated expenses are excessive and unreasonable, the Secretary of State be afforded discretion to have regard to other authorities of a similar type in place of the discretion presently in the Bill, to have regard to closely comparable authorities.

The amendment, it will be observed, does not do away with the need for making comparisons. These will still be needed to establish whether or not another authority was of a similar type. The object of giving the Secretary of State discretion to make comparisons is that any assessment he makes that estimated expenses are excessive and unreasonable should be as fair as possible. The clause directs his attention to other authorities which are as closely comparable as possible so that no valid comparison could be made which was not with an authority of a similar type to the authority planning to incur excessive and unreasonable estimates of expenses.

That is why the Bill requires the Secretary of State in having regard to other authorities to have regard to those other authorities closely comparable with the authority concerned; in other words, authorities which are sufficiently akin in as many respects as possible. The Bill therefore safeguards the authority in this respect while the proposed amendment would expose the authority to much wider and potentially less favourable comparisons. In other words, the amendment, if accepted, would lay a less onerous duty on the Secretary of State than does the existing provision in the Bill and it would or could be unfair to a local authority.

Lord Hughes

My Lords, may I ask the noble Earl to give examples? There are very wide differences between local authorities in Scotland. Which authority, for instance, would be closely comparable to Strathclyde? Which authority would be closely comparable to the district council of Glasgow? These are two authorities which by the size of their populations are very different from any other. I wonder what the comparison would be.

The Earl of Mansfield

My Lords, the noble Lord has produced two examples which are incomparable. There is no other region like Strathclyde and no local authority of any sort, let alone a district, which is like Glasgow. What this provision does not do is to force the Secretary of State to do the impossible, to make comparisons where it is not possible or justified; but it enjoins him to seek to draw the fairest possible comparison that he can and then to make his judgment. I anticipate that it will far more frequently apply to district councils than to a region.

Lord Hughes

My Lords, I am grateful to the Minister for his reply, the effect of which must be that there will be a substantial number of local authorities in Scotland who by the nature of either their area—perhaps some of the enormous territorial ones with little population—or by the nature of their population, stand on their own, and where this provision will not be available to the Secretary of State because he would not be able to compare like with like.

Lord Ross of Marnock

My Lords, I am fascinated by the tender regard that the Minister of State has for the local authorities that he does not want me to put in words which might make it easier for the Secretary of State and involve the local authorities in much greater difficulties. The trouble is that the words are already there. I wonder whether the noble Earl would look at the paragraph we are amending. The original words which were spoken about in Section 5 of the 1966 Act were: If the Secretary of State is satisfied— that a local authority or a joint board have failed to achieve or maintain a reasonable standard in the discharge of any of their functions, regard being had to the standards maintained by other authorities and boards which are, in the opinion of the Secretary of State, of a similar type"— These are the words I want to put in— to the local authority or, as the case may be, joint board concerned …". So the noble Earl had better get busy on Third Reading, for I will have an amendment down incorporating the words that he said are irreplaceable and fair to the local authorities. We should require, in the interests of uniformity, to have them in that section as well.

I know, if I can exercise my powers of telepathy, that the two sections of the clause are different. One deals with standards. But if it is good enough for default in that that comparison should be made with other local authorities of a similar type then surely it is right that we should have it later on when we are dealing with default in respect of unreasonable and excessive rates. Let us bear in mind that the Secretary of State could have regard to them without coming to any conclusion. It would not determine or wipe out his power to act that if you cannot compare Glasgow with Edinburgh or with anywhere else that renders nugatory any action that he would like to take. That is only one thing that he will have to have regard to.

The trouble with this particular power being inserted in Clause 5 is that the draftsmen have been clever to do it this way; but it has defects. One of the defects is the fact that already there are things they have to have regard to; and here is another long list which duplicates and, in this particular case of similar types (and then there are the new words that the Government propose to put in) which conflict to a certain extent.

We are dealing with the 1966 Act and your Lordships have not got it before you. We are dealing once again in legislation by reference, amending by reference. I am sure that most of your Lordships do not know what we are doing. But noble Lords can take my assurance that the words I propose to put into the Bill are already there in the 1966 Act—so that they cannot have all these defects that the Minister of State ascribed to them.

I do not suppose that at this stage of the Bill a fine point like that will worry the Government very much. I do not know that it will worry the local authorities very much; but it amuses me as a person who has taken an interest in drafting Scottish legislation over the past 35 years and I have always been fascinated by the kind of excuse that is used to turn down amendments. The noble Earl need not worry about drafting amendments. He could accept them. They will go through another place easily. Now the noble Lord, Lord Campbell of Croy, has made sure that the Bill will go back to another place, provided that we accept the amendments that at his instance the Minister of State has put down on the Marshalled List. But, as far as this amendment is concerned, I think there is excessive caution on the part of the Minister. Perhaps I should withdraw the amendment and let us go on to something more important.

Amendment by leave withdrawn.

6 p.m.

Lord Ross of Marnock moved Amendment No. 10

Page 7, line 38, at end insert— ("( ) In the report to be laid before Parliament as mentioned in 5(1)(b) above the Secretary of State shall detail and explain the criteria which he applied and the categories of estimated expenses he thought fit to leave out of account.").

The noble Lord said: My Lords, in the report laid before Parliament as mentioned in Section 5(1)(b) that we have already heard about from the Minister of State, I think that the Secretary of State should detail and explain the criteria which he has applied and the categories of estimated expenses that he thought fit to leave out of account. I think this is out of fairness to the local authorities and out of fairness to the House of Commons who come to judge whether or not the Secretary of State was right in seeking to reduce the rate support grant of some particular authority.

One of the important things about this is the timing. Neither House of Parliament is very keen on retrospective legislation, but here we have the classic case. We heard the noble Lord, Lord Bellwin, earlier today telling us he was not going to do something this year although some of his information is in relation to expenses this year. It is going to be next year to penalise the local authorities. Here we have the position where the Government are going to penalise the local authorities as from the start of this financial year, and in Scotland that financial year has already started. He has not the power to deal with it yet. Today is 2nd June. I do not know when he is going to get this Bill through. We have to have another stage in this House and then the Bill has to go, if amended, to the Commons. This is why the Government have set their face against any amendment hitherto until the power of the disablement lobby has got at them—I am very glad of it and I support them. If the Bill is amended, it will need to go to the Commons. From the Commons it will need to come back here.

Of course this takes us on. The Government then have to inform a local authority of their intention and give that local authority an opportunity—a reasonable time—to reply to this allegation of carelessness in the use of local government expenditure. That is going to take time. Then the order has to go to the House of Commons. Time has to be found in the House of Commons for it. I know that the Scottish Office are very careful because they have been rapped once or twice. They will make absolutely certain that that order is in keeping with the statute. It will be scrutinised by a committee and eventually debated because it will be an affirmative order.

How long is all this going to take? It is going to be the month of July at least. They had better hurry up because if its goes to the end of July they will have to wait till the end of October for they cannot use their power until after the House of Commons has had their say—so. What a mess they are going to be in then. Goodness gracious! the local authorities will be getting their estimates ready for the next year.

If the Minister of State goes to his department and finds out from that department the whole time-tabling of events in relation to rate support grant, he will find exactly how difficult the whole thing is going to be, from a time-tabling point of view. He will look twice and think twice before he institutes these proceedings. I see him getting into an unholy mess and the Government will only have themselves to blame. I want to see in this report full details of the use that the Government have made of these powers and the restriction placed upon them by Parliament in relation to the criteria that they have to use and in relation to the categories of estimated expenditure that the Minister thought fit to leave out of account. These words, of course, come from the clause because this is the last of the power given to the Secretary of State; he leaves out of account such category of expenses as he thinks fit.

We know quite well that he could leave out categories of expenses and he would make the sins of the local authority look even greater. You could leave out some categories of expenses and indeed the local authority could be very virtuous indeed. From that point of view, we have not got a proper definition. Our discussions have been very cursory on participation certainly. On the other side of the House they have been absolutely nil in respect of this Bill. They are prepared to shut their eyes and give what powers they like to the local authority. We have not a definition of the estimated expenses that he is going to leave out of account.

Bear in mind that the Secretary of State at Second Reading in another place said that he was not interested in individual category expenses; he was concerned only about the aggregate. With due respect, he has changed his mind about that. If he sees fit, he can leave out a certain category of expenditure which must of course be related to the rates. It is for that reason, because I think it would be fair to the House, the Members of the House of Commons and to the local authorities concerned, that I think we should lay down what should be detailed within the report that is laid before Parliament. I beg to move.

The Earl of Mansfield

My Lords, the noble Lord's amendment refers to "Section 5(1)(b) above" and as such is, if I may say so, inept because that part of the Act does not refer to "the report to be laid before Parliament". That is really a trifling objection to the amendment compared with the argument on the merits. Going back to Section 5 of the 1966 Act, the reports which the Secretary of State must lay before Parliament and which must be approved by resolution in another place before a proposed reduction in rate support grant can be made must state the amount of and the reasons for the proposed reduction and set out any representations made by the authority concerned with respect to the proposed reduction.

In other words, the report must set out in detail the case which the authority will have to answer and it would in any event have to do this by reference to the criteria laid down so far as is applicable to the particular case. It is quite unnecessary to spell out in the Bill, as proposed by the noble Lord's amendment, matters which could not be omitted from the report because they constitute some of the reasons for making it. The authorities have already been notified by a circular of the excluded categories of expenditure for 1981–82, such as capital expenditure, housing expenditure, loan charges and so on.

If the House of Commons is not satisfied with the reasons for a proposed reduction, approval to the reduction may well be withheld. Appropriate reasons could well go beyond the criteria to which the Secretary of State is allowed to have regard by the provisions of the Bill.

Practical operation of the provisions in the Bill would also mean that the categories of estimated expenses the Secretary of State thought fit to leave out of account in assessing excessive and unreasonable expenses would have to be made public long before any report in respect of a grant reduction were laid before Parliament. If the provisions in the Bill are to be effective, it is important that local authorities are informed in advance of finalising budgets the expenditure base on which the Secretary of State will assess whether or not expenditure is excessive and unreasonable. Such public indication has already been given in respect of the current financial year, which was one of the matters which the noble Lord, Lord Ross, complained about. On 4th March this year in the Scottish Office Finance Circular No. 7/1981 the Secretary of State intimated to local authorities the categories of estimated expenses which, if the Bill were enacted, he would exclude from consideration in any assessment that he might make under the provisions in the Bill. In this connection, I can assure the House that prior notice of this intimation was made in another place when the Bill was then being considered in Committee.

The amendment would do nothing to safeguard the position of a local authority who might be the subject of action under the provisions in the Bill; the provisions in the amendment are no substitute for the vigilance of the local authority concerned and of the other place in seeing that the Secretary of State presents all the information which existing statute at present requires him to present when proposing a grant reduction. Moreover, the amendment implies making public the basis on which excessive and unreasonable expenditure will be assessed at a stage in the proceedings when such intimation would have lost much of its value. In other words, it would be far too late. The amendment therefore would not in fact give the advantages which the noble Lord claims for it and I must ask him to withdraw it.

Lord Ross of Marnock

I do not agree with everything that the noble Earl has said and I do not understand this point of it being far too late. The report has to be made anyway. He cannot get the order without the report and the report must contain this information. Why does the noble Earl suggest it is far too late at that time? I do not think it makes sense what he has been saying about that. It has to be made public at that time. I have been trying to ensure that the things which are said are actually included in the report. Remember that the report is not in this statute that we are considering, but it was in the original statute. This is one of the difficulties about trying to mould a statute that is already there and to import new powers, and then take it for granted that certain things will follow.

I am reasonably happy about the answer from the point of view of the content of the report, but I want to make sure that we know at that time and that Parliament will know at that time just exactly that the Government have followed through. And of course some people will be vigilant and others will not be vigilant. Governments get away with an awful lot. The Minister need not shake his head. It has been discovered more than a year after a certain order has gone through the House that it was ultra vires, and I could list one or two statutes in respect of that. It may well be that the noble Earl, Lord Mansfield, just happened to be preoccupied at the time so that this thing was allowed to happen and it would not be the first time that I have had to apologise to the House for this kind of thing having been done by the Scottish Office. It is important that we get everything as it should be. However, I shall not press this to a Division. I am satisfied with the answer, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.12 p.m.

Lord Ross of Marnock moved Amendment No. 11: After Clause 14, insert the following new clause:

"Local referendum

. Before making an order under section 5 of the 1966 Act as amended by this Act, the Secretary of State shall cause to be held in the area concerned a local referendum of those electors entitled to vote at local authority elections to seek their approval of his determination; and the result of that shall be included in his report to Parliament if he decides to proceed with the order.".

The noble Lord said: My Lords, I beg to move a new clause the effect of which would be that before the Secretary of State took this drastic action of overthrowing the authority of a local authority in Scotland he should cause to be held an advisory local referendum so that local electors would be able to tell him exactly what they thought about the local authority and the Government and their proceedings.

Noble Lords who were here will remember I suggested that the only people who had the right to question the wisdom or otherwise of a locally elected assembly such as a district or regional council, an islands authority or the like, were the people who elected them. I suggested that one of the mistakes made in local government reform was that it meant one could only have an election every four years, whereas traditionally in the Scottish burghs each ward had three members, and one member—a third of the council—went out every year; so each year a local population could give effect to its feelings about the particular people or the particular balance within the council at that time.

I said I would try to look at this and see whether we could bring back some of that opportunity of getting an annual point of view from the council; but it is not quite so easy because nowadays within any ward there is only one representative. It was always so on the county council anyway, that the area only had the one. But that left me with the choice of perhaps having annual elections. I do not think anyone would welcome that. From an administrative point of view it would have been far too burdensome. The other possibility would be to have the term of office of a local councillor made into two years instead of four years. That is also worth considering. It may well be that in all our reconsideration of local government that is something we should bear in mind, because the only people who have the right properly to discipline their local representatives are the local electors.

Then I felt that there is one other way which has been used before; and that is to have a local referendum. Referenda are not new to Scotland. We used to have a referendum on whether or not any particular area should become a "dry" area. If so many electors indicated they were dissatisfied with the position, they could force what was virtually a local referendum on the subject of "no licence, no change". There were many such elections held at one time. I would hasten to add that I drew up the Bill that wiped that out: I was not Secretary of State when it was passed but I felt that the time had expired for that procedure on such a narrow point.

However, in relation to something as important as interfering with the whole financial arrangements and the services provided by a local authority, it could be justifiable to have a speedy local referendum on the subject. I hope the Government will not say, as they did with the last one: "Ah, but it is imperfect in the drafting". I do not think that the last one was all that imperfect in the drafting. I think I included a "b", and also if I had said "of this Act" instead of "above" I should have been right. But this one I know lacks considerably in follow-through in respect of creating a schedule and a scheme, and the rest of it, but I wanted to get the feelings of the Government and of Members of the House on the principle. I do think that as regards something which has never been done before—taking away the authority of a local authority in its most important aspect of rates and the spending of money—we should think of being able to resort to a local referendum of the electors. Let them give the answer.

We heard something about this earlier on about local elections in England and what the Government were proposing to do in the Statement which was repeated in this House by the noble Lord, Lord Bellwin. Here is something which the electors have already elected—though of course the Scottish electors did not elect a Tory Government. There are 71 Members of Parliament for Scotland. There are 44 Labour Members and in respect of the Government there are 22; so they have no mandate for what they are doing. But the people who have a mandate are the local councillors.

It may well be that the local councillors have changed their minds and think that the Government are right. But the only quick way to find out without waiting for the next two or three years to pass, is to institute a system of a local referendum. I think it would be a form of discipline upon local councillors and also upon the Government because they would require to get the support of the local people. I believe I say in the amendment that the result of that poll should be included in the report to Parliament if the Government decide to proceed with the order. It is a simple way out of the dilemma we are in because of the changes that took place in local government reorganisation.

I tend to think that four years is far too long for a term for a local council. This is one fairly speedy way in which we could sound out the opinions of the people, and if the local electors agreed with the Government they would have no hesitation at all and everyone should be able to rest satisfied that they have had their say. But for a Government to come in and handle local councils in this way is tantamount to making a mockery of local democracy. This is one of the great dangers. The independence of local government is going with this Bill, the whole tradition of local democracy is being put at risk and, of course, so far as electors are concerned, this will lead to a very dangerous rise in scepticism about the whole business of politics and local government. So as a way out, I beg to move.

6.20 p.m.

Viscount Thurso

My Lords, when the noble Lord, Lord Ross of Marnock, hinted in the Committee stage that he was going to bring forward an amendment of this kind on Report, I was most intrigued, because for many years I sat on Thurso Town Council which, being a small burgh, was elected on the principle that one sat for three years and a proportion of the council stood for election every year.

It had a most salutary effect. It gave a certain stability to the council, because there were always some people who had not stood for election, who knew what had happened before, who were well acquainted with the commitments entered into by the council and so on. It also meant that a fairly large proportion of the council had to report again to the electorate, had to stand for election and had to justify the actions of that council of which they had formed part over the preceding period. I found it a very satisfactory system under which to serve, and I think that the people of the small burghs found it a very satisfactory way of appointing people to serve them on their councils.

I must say that I regret the passing of the system in the local government reorganisation. We have now lost the system and the noble Lord, Lord Ross of Marnock, has thought hard and long and has not felt it right to suggest that that system should be brought back in any way. He has instead suggested a system of referenda. I am not at all sure that I am happy about that, because, if you are asking an electorate to elect people, that is something which they can assess and can understand. They can look at the performance of people, watch them in action and read about their deeds and sayings in the local press and so on. They have as much of the information as it is possible to have upon which to form their judgment.

But if you suddenly spring upon them a referendum, then you must give them all the information about the subject which is being referred, and I am not at all sure that that is possible. I am not at all sure that it is even desirable that you should, in effect, be asking the electorate to be doing the governing. The point is that they should be satisfied with the level of service that they are getting from their councillors and, if that is what one is after, then the quickest route to achieving the kind of satisfaction which used to be obtained by the electorates of small burghs would be to institute a system of proportional representation, a single transferable vote system or something of that kind, as a method of electing councillors.

In that way, you would see that all shades of opinion were properly allowed for at election time, and would have a chance to reward those who served the community faithfully and well by giving them a good chance of re-election on merit and not on a sheer psephological swing. I do not think I can go along with the noble Lord, Lord Ross, on referenda, and I think it would be a very dangerous precedent to set by including them in this Bill.

6.25 p.m.

The Earl of Mansfield

My Lords, I was interested in what the noble Viscount, Lord Thurso, with his long experience of local government, had to say on this matter. I suggest that the apparent locus which this amendment would impart to local referendums would be quite unacceptable, though not because it refers to local referendums. I do not at all dissent from the notion of local referendums, if they are held on purely local matters and when it is desired to measure local opinion. They can frequently be organised by local bodies of various kinds and there is much to commend them. But to impose a local referendum backed by the authority of statute would need very careful consideration by Parliament as to the extent of the referendum, the circumstances in which it might take place and the matters upon which it might express a view. The whole matter should, I suggest, be subjected to a rather more thorough inquiry and debate than is possible at the Report stage of this Bill. Such thorough scrutiny would be appropriate for proposals for referendums on questions connected with local government. At the very least, one would have to consider very carefully in detail the locus of referendums within the present system of locally elected councils providing local services and levying local rates, and I question whether this Bill is the proper place in which to introduce statutory referendums.

What the noble Lord, Lord Ross, is trying to do, with a certain ingeniousness, is to give a veneer or gloss of democratic decision-making to the process in Section 5 of the 1966 Act. One has to consider that the people who would express their opinion, on whether the expenditure of their own local authority had been excessive and unreasonable, would, in many cases, be electors who were not ratepayers, and in many other cases the people who did pay rates, such as local businesses, would have no vote at all. That is why I am led to condemn the proposal as a democratic gloss.

But there is a more important objection to the proposed new clause. In the existing legislation in the 1966 Act and in the provisions in the Bill, Parliament has laid, and is laying, a duty upon the Secretary of State to be satisfied that a local authority's expenditure, or planned expenditure, is excessive and unreasonable and it is for that reason that he may be of the opinion that grant should be reduced. Before a reduction in grant can be made the House of Commons must approve a report stating the amount of, and reasons for, the proposed reductions and setting out any representations by the authority concerned. This procedure is a fitting part of a system in which the House of Commons approves in a rate support grant order a total amount of money and how it is to be distributed, and subsequently votes the requisite funds.

Local authorities have a place in that system in that they are consulted before a rate support grant order is made and laid before the House of Commons. Local authorities are also afforded a place in the procedures for reduction of grant in Section 5 of the 1966 Act which also apply to the provisions in Clause 14 of this Bill; they must be afforded the opportunity to make representations and these representations, if any, must be reported to the House of Commons. But the proposed new clause attempts, in effect, to impart to a local referendum the apparent "privilege" of "approval" of any approach by the Secretary of State to the House of Commons, regarding his stewardship of monies voted to him.

I suggest that a local referendum cannot enjoy such a privilege. It cannot have any locus by way of approval of voted moneys. It is for these constitutional reasons that I ask the noble Lord to reconsider his arguments and, indeed, his amendment. There is also a drafting deficiency, in that the amendment refers to an order under Section 5 of the 1966 Act. There are no order- making powers of that nature in Section 5. However, I do not rely upon that argument. I rely, as I have said, on the constitutional and the general merits of the case.

Lord Ross of Marnock

My Lords, I am not surprised; I am astounded by some of the reasoning. Let me take the last reason: that local government has a part to play in the procedure of rate support grant, that they are asked how they feel about it and that their response is included in the report that is laid before Parliament. The noble Earl said that local ratepayers should not have a statutory power in relation to voted money. But we are not dealing only with the question of voted money. We are dealing with the power which is given to the Secretary of State to refuse local authorities their traditional right to raise monies to pay for their services. Not only have they had that right; the Government used to insist that they put money into those services. For about 40 years a housing subsidy could not be obtained unless the local ratepayers also paid a certain sum. It was part of the bargain. You got a subsidy from the Government only if you provided money levied from the local ratepayers.

Not only are the Government taking away part of the rate support grant that they have given; they are following it up by refusing permission to local authorities to raise from their own rates moneys to make up that loss. This has got nothing to do with voted money. It has got everything to do with the rights of local authorities. This is why we say that local authorities are losing their independence. The Government are taking away from local authorities an independent right which they have always enjoyed. It is one of the justifications for my amendment. I started on this road only because I promised the House that I would think about it and see whether or not I could find some way of bringing back that power for local electors as quickly as possible.

The noble Earl referred to who could vote and to the fact that some local ratepayers are denied that right at local elections. We have known about this for a long time and we have to accept this as a fact. This would have been one way of dealing with the problem. I do wish that the Government had come clean. The real reason why they will not do it is that it would take so long. Polling stations, ballot boxes, papers would have to be organised and prepared. It would frustrate the desire of the Government to hammer the local authorities and to hammer them quickly. I am perfectly sure that the thought has crossed the mind of the Minister of State, or some of his advisers, "This is Ross at it again, trying to frustrate the will of Parliament. He is putting in another hurdle". It did cross my mind that it would have the effect of slowing down the process. I seek to slow it down in order to give the Government time to think and, indeed, to think again. There is no harm in the Government thinking again, especially in relation to the nature of the step they are going to take.

I shall not divide the House. I am disappointed in the Government's reaction. Do they not see how desirable it would be to bring in the local electors? This is one of the weaknesses of the Bill. At the time of local government reorganisation the term of office was three years. In the burghs there was a changeover of one-third of the council every year. This was excellent, though in some cases this almost resulted in heart failure because there could be a complete swing in the balance of power on the council. It was suggested that because there was a loss of interest in local elections people were not voting, so it was decided to have elections every four years. It was thought that this would make the councils more independent, attract a better type of councillor and generate more interest in local elections. This has not proved to be the case. None of the prognostications about the future of local government after reorganisation was well founded.

I hope that the Government will think again about the term of office, about reorganisation into wards and about the number of people represented in those wards. We should return to elections at least every three years. At one time I had in mind elections every two years. This is a way of reaching the local ratepayers. The only people who have the right to discipline are the people who gave the mandate, and they should have the right to take it back. It is quite wrong for the Government, especially for a Government in the position in which this one is, having no mandate from Scotland, to handle people who have a direct mandate in this particular way. Sadly, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 [Redetermination and lowering of regional, district or general rate]:

6.39 p.m.

Lord Ross of Marnock moved Amendment No. 12: Page 8, leave out lines 16 to 22.

The noble Lord said: My Lords, here we are dealing with the powers of a local authority to determine new regional, district or general rates. Once again, having determined the change he is going to insist upon, the Secretary of State can come along and may, by order under subsection (3), repeal or amend any enactment (including this Act) in so far as that enactment relates to the determination, levy or payment of a regional, general or district rate and such determination, levy or payment is affected by a determination under subsection (1) above". Again I object to this. The Government are covering themselves against mistakes which they have made and against negligence. The Minister of State will of course get up and murmur again the word "flexibility". It is an appalling state of affairs if a Government can come along and in almost two consecutive clauses can say, "We may not have covered everything, but don't worry. If we discover that there is a mistake—that we have left out something that we should have put in or that something we put in should not be there at all—we'll change it, by order". That is not the way in which the Houses of Parliament used to work. In those days if you produced a statute you produced a statute amending it; you did not do it the easy way by order. I want to get yet another explanation from the Minister of State as to why these words are there. The same kind of answer that he gave us before will do for him, but it will not do for me. I beg to move.

The Earl of Mansfield

My Lords, what Clause 15 does in effect is to give local authorities which budget for excessive and unreasonable expenditure a way of avoiding the reduction in grant which might otherwise follow. Effectively, by enabling authorities facing the possibility of a cut in grant to reduce their rate poundage in the course of a financial year, it gives them the choice of either giving the money back to their own local ratepayers, or returning it to the Exchequer. The Government hope that authorities will have regard to the interests of their ratepayers and will follow the former course, and we aim to remove as far as possible any difficulties which statutes might place in the path of an authority which decides to redetermine its rate.

That is why Clause 15(3)—which this amendment seeks to remove—is included in the Bill. I am surprised that the noble Lord, Lord Ross, wishes to remove that subsection. It empowers the Secretary of State, by order subject to the positive resolution procedure of both Houses of Parliament, to repeal or amend enactments relating to the determination, levy or collection of a redetermined rate. The intention is to use the order-making power after full consultation with local authorities, to modify enactments which might hinder the smooth administration of a redetermined rate. The order-making power will be used to aid local authorities and so to press this amendment would be in no one's interest, least of all the local authorities.

In effect the noble Lord accuses the Government, and my department in particular, of negligence; in other words he asks why all these repeals and amendments which could be the subject of an order are not included substantively in the Bill. The answer to that is approximately the one that I gave on the previous occasion; namely, that comprehensive provision could not be made because of the difficulty in identifying all the statutory provisions requiring amendment in advance of detailed consideration by local authority and Government officials. As the noble Lord, Lord Ross, will know, the matters here are extremely technical and the need for amendment is only being identified after detailed consultation and examination and I suggest that these are matters which are appropriate for an order which can be made under subsection (3) rather than for primary legislation. Subsection (3) is really to help rather than to hinder the process and I hope that the noble Lord, Lord Ross, will come to see it in that light.

Lord Ross of Marnock

My Lords, I am afraid that I do not see it in that light because I read subsection (1) and it is that which gives the power in relation to the reassessment of the lower rate, not subsection (3). At the present time in Scotland once the rate is fixed one cannot declare a supplementary rate to get further money or declare a new rate which is lower and give money back. That is not "on" in Scotland. I gather that in England and Wales a supplementary rate can be declared and so more monies can be obtained from the people.

Subsection (3) is a different thing altogether; it means changes in relation to other statutes. The Government have been in such a rush to get this thing done and already they are out of time and it becomes retrospective legislation, so they put in this portfolio clause giving them power to repeal or amend any enactment (including this Act) in so far as"— it relates to this. It is not the kind of power that Parliament is used to giving to Ministers and Parliament should not do it. If they feel they want to do something in respect of which they require additional powers they should comb through the statutes and make the changes in this statute. That is the way it is normally done and there is no justification for putting this in once again. This is not the first time because we have had it in the previous clause as well.

I am not really disappointed because I do not expect very much from the Minister of State, but I am disappointed in the draftsmen in the Scottish Office because I know from my own experience that they are very thorough and very dependable in what they do. It was decided that there was not time to search through all the statutes so they have covered themselves with this kind of subsection. This is not the matter of principle that was suggested by the noble Earl. It is once again a high-handed attitude in relation to legislation and it is one to which I take the strongest objection. I shall not withdraw this amendment, but I will allow it to be defeated without a Division.

Viscount Massereene and Ferrard

My Lords, before the noble Lord sits down, would he not agree that if some local councils and councillors had been more responsible in their management of the financial affairs of councils this Bill would not have been necessary? It has been the great extravagance of some councils and the extreme extravagance with ratepayers' money and borrowing a great deal of money which basically has been the cause of this Bill.

Lord Ross of Marnock

My Lords, in no way do I approve of unnecessary, undesirable and extravagant expenditure, but it is this House that has placed the local authorities in the position they are in—apart from the other place—by wishing upon them a tremendous number of duties and insisting that they maintain certain standards. That cannot be done without spending money. Because of the national aspect the Government have supported them up to a point but this Government have manipulated the formula in respect of rate support grant, in the calculation of the expenditure that they have to make, which they have kept deliberately low and then they have even more deliberately reduced their share of that expenditure. The result is that there must be an increase in rates, but the responsibility for that is not that of the local authorities; it is the responsibility of the people who manipulated the formula and that is the Government themselves. I am sorry that the noble Viscount was not present earlier to hear about what was included and what was not included in respect of categories of expenditure and he will be sad to know that one category of expenditure which is not to be taken into account is housing.

On Question, amendment negatived.

Clause 16 [Local authority's estimated expenditure relevant factor in calculating amount of resources element payable to them]:

6.49 p.m.

Lord Ross of Marnock moved Amendment No. 13: Page 9, line 6, leave out ("the year 1981–82 or for any year thereafter") and insert ("any year after 1981–82.").

The noble Lord said: My Lords, this is an important amendment because it introduces the whole question of the Government doing this and then applying it in the year 1981–82. The year 1981–82 has already started. Every Scotsman who is an occupier of property in Scotland has already received from his local authority the assessment of his rates. It has already been fixed and if any change is necessary it should apply not this year but next year and the Government then would be on fairly safe ground. I have listed the nature of the programme before us. The Bill is not law yet and we are well into the financial year 1981–82. Before he can act at all the Secretary of State has to make up his mind about which local authority he is going to deal with; having made up his mind about that he has to get in touch with them; he has to have all his arguments formulated and let them know what they have done and what he is going to do about it. They have to consider that, and the Minister of State has said that they will have a reasonable amount of time. The local authority have to reply and the Secretary of State has to consider the reply. Then he has to draw up a report and that report goes to the House of Commons.

The House of Commons is not sitting waiting for an order coming from the Scottish Office; it may be some while before it finds time to deal with this in the House because it will be a controversial matter; it is not the kind of thing that will go through on the nod. This takes us way beyond the month of June. We are into July. If the Government do not manage to get it finished before a certain event towards the end of July, when it is hoped Parliament will not be sitting, it means it will be the month of October, and probably towards the end of October, before they can do anything about this. This is to deal with the year 1981–82, when local authorities already according to their timetable are being hammered by the Government in relation to their estimates for next year.

This is one of the most dangerous things the Government are doing. They are going to run themselves into the ground in relation to timetables. Indeed, I have already heard some local authorities with whom I have been in touch suggesting that the whole time-tabling of all the things that are laid down for local authorities to do, and to do in co-operation with the Scottish Office, has gone sadly awry and changes will need to be made there. So I plead with the Government.

The noble Lord, Lord Bellwin, in his Statement said that they were going to take action in relation to England and Wales, but the action which is going to be taken is not this year but next year, and that is the proper way to do it. Have your legislation and then apply your legislation to the next financial year, not to a financial year already well worn. It is not good enough to say, "We gave warnings of what we were going to do to the local authorities". What matters in relation to legislation is the date of the passing of the Act and the date of the taking of the powers after the Act has been passed. I plead with the Government; this is a serious and very important amendment. I beg to move.

The Earl of Mansfield

My Lords, the noble Lord, Lord Ross, moved and spoke to an amendment in Committee which was similar to if not identical with this amendment. I have listened for any new argument that the noble Lord might deploy to titillate the House to take a fresh view of the matter, but I did not hear any, and I am certainly not going to weary your Lordships by rehearsing all the arguments that I deployed on the last occasion. The ground has been well covered already.

The Government take the view that it is essential that the powers for which provision is made in Clauses 14, 15 and 16 of this Bill should be available in 1981–82. The Secretary of State has made it clear that he would not have thought it necessary to introduce these provisions at all if in recent years all local authorities had shown moderation and regard to the national interest in framing their expenditure plans, and to that extent I agree with my noble friend Lord Massereene. Unfortunately, it has not been the case. Unhappily, there are authorities which are planning to incur expenditure levels in 1981–82 grossly out of line with the national economic interest and the interests of ratepayers. As is well known, and has been well known for a long time, the Government firmly intend to take action under these provisions, and we say that the sooner they are able to do so the better.

I do not think I can help the House very much further. The noble Lord implied that these provisions were retrospective, but when I addressed the House in Committee I gave details of the notice that was given both to the House of Commons and to the local authorities on a number of occasions, and specifically in Finance Circular 16/1980, which was issued on 22nd December. The local authorities have been forewarned of what was in the Government's mind. We have been scrupulous in telling them what would happen in effect if they did not mend their ways. In the circumstances I am afraid there is absolutely nothing as between the Government and the Opposition on this matter, and I can only urge the noble Lord, in relation to the Division which we had on the last occasion, to withdraw his amendment on this matter.

Lord Ross of Marnock

No, my Lords, I think the country and Scotland are entitled to know exactly how determined the Government are to get this vicious legislation, and Scotland should have the right to know who votes for it and who does not. I have no intention of withdrawing it.

6.57 p.m.

On Question, Whether the said amendment (No. 13) shall be agreed to?

Their Lordships divided: Contents, 52; Not-Contents, 76.

Airedale, L. Longford, E.
Ardwick, L. McGregor of Durris, L.
Banks, L. McNair, L.
Blease, L. Maelor, L.
Boston of Faversham, L. Mishcon, L.
Brockway, L. Peart, L.
Bruce of Donington, L. Ponsonby of Shulbrede, L. [Teller.]
Cledwyn of Penrhos, L.
Collison, L. Ritchie-Calder, L.
David, B. Rochester, L.
Davies of Leek, L. Ross of Marnock, L.
Elwyn-Jones, L. Stedman, B.
Evans of Claughton, L. Stewart of Alvechurch, B.
Foot, L. Stewart of Fulham, L.
Glenamara, L. Strabolgi, L.
Gosford, E. Taylor of Mansfield, L.
Hale, L. Thurso, V.
Hooson, L. Tordoff, L.
Hughes, L. Underhill, L.
Janner, L. Wallace of Coslany, L. [Teller.]
Jeger, B.
John-Mackie, L. Wedderburn of Charlton, L.
Kaldor, L. Wells-Pestell, L.
Kilmarnock, L. Whaddon, L.
Kirkhill, L. White, B.
Lee of Newton, L. Wigoder, L.
Llewelyn-Davies of Hastoe, B. Winstanley, L.
Abinger, L. Lucas of Chilworth, L.
Airey of Abingdon, B. Lyell, L.
Alexander of Tunis, E. McFadzean, L.
Avon, E. Macleod of Borve, B.
Bellwin, L. Mansfield, E.
Belstead, L. Margadale, L.
Boardman, L. Marshall of Leeds, L.
Brougham and Vaux, L. Massereene and Ferrard, V.
Campbell of Croy, L. Mottistone, L.
Clifford of Chudleigh, L. Napier and Ettrick, L.
Colville of Culross, V. Newall, L.
Cork and Orrery, E. Northchurch, B.
Cottesloe, L. Nugent of Guildford, L.
Craigmyle, L. Orkney, E.
Cullen of Ashbourne, L. Orr-Ewing, L.
Davidson, V. Pender, L.
de Clifford, L. Renton, L.
De Freyne, L. Rochdale, V.
De La Warr, E. Romney, E.
Denham, L. [Teller.] Sandys, L. [Teller.]
Elgin and Kincardine, E. Savile, L.
Faithfull, B. Selkirk, E.
Falkland, V. Sharples, B.
Ferrers, E. Skelmersdale, L.
Fortescue, E. Spens, L.
Fraser of Kilmorack, L. Stamp, L.
Gainford, L. Stradbroke, E.
Gisborough, L. Strathclyde, L.
Glenarthur, L. Strathcona and Mount Royal, L.
Greenway, L.
Gridley, L. Swinfen, L.
Henley, L. Swinton, E.
Hylton-Foster, B. Trefgarne, L.
Kemsley, V. Trenchard, V.
Kimberley, E. Trumpington, B.
Lauderdale, E. Vaux of Harrowden, L.
Lindsey and Abingdon, E. Vickers, B.
Long, V. Vivian, L.
Loudoun, C.

Resolved in the negative, and amendment disagreed to accordingly.

7.5 p.m.

Lord Denham

My Lords, I think that this is probably the moment when we might adjourn the Report stage for the dinner adjournment until 7.50 p.m. Therefore, I beg to move that further consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.