Local Government Finance (No. 2) Bill

HL Deb 10 June 1982 vol 431 cc314-43

Report stage resumed, on Amendment No. 3.

4.38 p.m.

Baroness Birk

Returning to a more local matter, my Lords, I am speaking following the Minister's reply to my moving of Amendment No. 3, and I must at the outset apologise for omitting to say that it would he convenient to discuss at the same time Amendment No. 49 and Manuscript Amendment No. 8A. I do not think that omission on my part caused the Minister any difficulty because we have an agreed grouping of amendments. No. 49 seeks the deletion of Schedule 1 and the manuscript amendment is necessary because a small subsection which was overlooked must be deleted if Schedule 1 is to be removed.

I suspect that whatever I say in response to the Minister's comments will not make much difference to his view, so I shall not delay the House on the matter. Although Schedule 1 concerns Bedfordshire, it could be used against other authorities which, between now and Royal Assent, attempted to do something similar. Other amendments are down which deal specifically with the Bedfordshire problem, and so here I am dealing with the wider-ranging aspects of Schedule 1 and the reasons why it should be deleted in its entirety.

What I might call the "non-Bedfordshire" objections to the schedule centre on the concentration of powers being given to the Secretary of State, as in so many instances in the Bill. Paragraph 5 of Schedule 1 gives the Secretary of State sweeping powers to adjust a rate or precept to be made in substitution for one made illegal by the schedule. There does not seem to be any real reason why that should be done, except again the giving to and the retention by the Secretary of State of the powers. We do not know what criteria the Secretary of State will adopt in making the adjustment, and similarly paragraph 6(3) gives the Secretary of State powers to adjust the rates.

In answer to what the Minister said a little while ago —before we embarked upon the Statement—to the effect that all of this was not necessary in the past, I would say that the balances were more generous in the past and there was proportionately more money for local authorities to spend on social services, education and other services. The reason that we seek the deletion of the clause and the schedule is that they are really so bad that short of doing an enormous reparation job, which I cannot see the Government doing, it seems better to delete them entirely.

There is one small point that I wish to add. So far as Schedule 1 is concerned, it seems that the proof readers have rather thrown up their hands about it all. Part of line 18 on page 25 reads: "for a supplementary rate of precept", but I imagine that that is meant to read: supplementary rate or precept ". I should like to feel, though without a great deal of foundation, that whoever was reading it by then thought, "God! I can't read any more of this", and so the error crept in. Of course, that is no reason for deleting the whole clause. However, the purpose of the three amendments is the deletion of Clause 3, together with the deletion of Schedule 1, and I should like to test the feeling of your Lordships by dividing the House.

4.40 p.m.

On Question, Whether the said amendment (No. 3) shall he agreed to?

Their Lordships divided: Contents, 63; Not-Contents, 113.

DIVISION NO. 1
CONTENTS
Airedale, L.	Kilbracken, L.
Amulree, L.	Leatherland, L.
Balogh, L.	Listowel, E.
Barrington, V.	Llewelyn-Davis of Hastoe, B. [Teller.]
Beaumont of Whitley, L.
Beswick, L.	Lovell-Davis, L.
Birk, B.	MacLeod of Fuinary, L.
Bishopston, L.	Mayhew, L.
Blease, L.	Molloy, L.
Blyton, L.	Oram, L.
Boston of Faversham, L.	Peart, L.
Briginshaw, L.	Phillips, B.
Bruce of Donington, L.	Ponsonby of Shulbrede, L. [Teller]
Caradon, L.
Chitnis, L.	Rochester, L.
Collison, L.	Sainsbury, L.
Cooper of Stockton Heath, L.	Segal, L.
Davies of Leek, L.	Shinwell, L.
Davies of Penrhys, L.	Simon, V.
Donnet of Balgay, L.	Stedman, B.
Elwyn-Jones, L.	Stewart of Alvechurch, B.
Evans of Claughton, L.	Stewart of Fulham, L.
Gaitskell, B.	Stone, L.
Gladwyn, L.	Strabolgi, L.
Hampton, L.	Thurso, V.
Hanworth, V.	Underhill, L.
Houghton of Sowerby, L.	Wallace of Coslany, L.
Irving of Dartford, L.	Wells-Pastell, L.
Jacobson, L.	White, B.
Jacques, L.	Wilson of Langside, L.
Jeger, B.	Winstantly, L.
John-Mackie, L.	Wootton of Abinger, B.
Kennet, L.

NOT-CONTENTS
Airey of Abingdon, B.	Chelwood, L.
Alexander of Tunis, E.	Clitheroe, L.
Alport, L.	Cockfield, L.
Ampthill, L.	Colwyn, L.
Auckland L.	Cork and Orrery, E.
Avon, E.	Cottesloe, L.
Belhaven and Stenton, L.	Cromartie, E.
Bellwin, L.	Cullen of Ashbourne, L.
Beloff, L.	Daventry, V.
Belstead, L.	Davidson, V.
Bessborough, E.	Denham, L. [Teller.]
Boardman, L.	Dilhorne, V.
Boyd-Carpenter, L.	Drumalbyn, L.
Caccia, L.	Eccles, V.
Campbell of Alloway, L.	Elles, B.
Campbell of Croy, L.	Elliot of Harwood, B.

Elton, L.	Morris, L.
Faithfull, B.	Newall, L.
Ferrers, E.	Northchurch, B,
Fortescue, E.	Onslow, E.
Fraser of Kilmorack, L.	Orkney, E.
Gainford, L.	Pender, L.
Gainsborough, E.	Penrhyn, L.
Gardner of Parkes, B.	Platt of Writtle, B.
Garner, L.	Rankeillour, L.
Glanusk, L.	Renton, L.
Glenarthur, L.	Ridley, V.
Haig, E.	Robbins, L.
Hailsham of Saint Marylebone, L.	Rochdale, V.
	Rugby, L.
Hawke, L.	St. Aldwyn, E.
Henley, L.	St. Davids, V.
Hill of Luton, L.	St. John of Bletso, L.
Hornsby-Smith, B.	Saltoun, Ly.
Hylton-Foster, B.	Sandford, L.
Ilchester, E.	Sandys, L. [Teller.]
Inglewood, L.	Seebohm, L.
Ironside, L.	Selkirk, E.
Kemsley, V.	Sempill, Ly.
Killearn, L.	Skelmersdale, L.
Kinross, L.	Soames, L.
Kitchener, E.	Somers, L.
Lane-Fox, B.	Spens, L.
Lindsey and Abingdon, E.	Stradbroke, E.
Long, V.	Strathspey, L.
Lovat, L.	Suffield, L.
Lyell, L.	Terrington, L.
McFadzean, L.	Teviot, L.
Mackay of Clashfern, L.	Thorneycroft, L.
Macleod of Borve, B.	Trefgarne, L.
Mancroft, L.	Trenchard, V.
Massereene and Ferrard, V.	Vivian, L.
Merrivale, L.	Wakefield of Kendal, L.
Mersey, V.	Westbury, L.
Milverton, L.	Windlesham, L.
Monk Bretton, L.	Wise, L.
Montagu of Beaulieu, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 4 [Proceedings in respect of rates and precepts]:

4.50 p.m.

Lord Bellwin moved Amendment No. 4: Page 3, line 31, after (" rate ") insert (" on any of the grounds mentioned in subsection (2) above or in respect of a ").

The noble Lord said: My Lords, this is a minor drafting amendment to make absolutely clear the intention of subsection (3) of Clause 4. Clause 4, which your Lordships accepted at Committee stage of this Bill, provides that the validity of a rate or precept can only be challenged on certain grounds by application for judicial review—that is, in the High Court—and that where relief is granted the court shall quash the rate or precept entirely. Subsection (4) makes it clear that this does not in any way prejudice the making of an application for judicial review on other grounds, where the possibility of such a challenge already exists; for example, a challenge as to the validity of a rate in reference to a particular hereditament.

I should also like to take this opportunity to clear up a point made by the noble Lord, Lord Bruce of Donington, at Committee stage on 10th May (col. 48) about the effect of subsection (3), to which the amendment relates. The noble Lord suggested that the effect would be that: If the precept in any one, small, material particular can be declared…to be invalid, one is faced with the necessity for invalidating the whole precept, even though the amount involved might be quite trivial".

I should make it absolutely clear that Clause 4 does not alter the existing law that remedies on an application for judicial review are discretionary. Clause 4(3) only requires the rate or precept to be quashed, If on an application for judicial review the court decides to grant relief ".

As a matter of discretion the court would be unlikely to decide to grant relief in the circumstances mentioned by the noble Lord. Indeed, in the recent Kensington and Chelsea challenge to the GLC precept for 1982–83, to which the noble Lord alluded, the court indicated that, since the remedy of judicial review is discretionary, if an item of expenditure found to be unlawful is small in relation to the total precept, the court would not quash the precept. The noble Lord's fears about the clause are therefore not well founded.

However, there is a slight ambiguity of a quite different sort which we have discovered in the wording of subsection (3), and, although I am almost certain our intention could never be misinterpreted, I should like to take this opportunity to clarify the text beyond all doubt. Subsection (3) is intended to apply only in the case of a challenge to the validity of a rate on an application for judicial review if the application is made on one of the grounds mentioned in subsection (2), which are all general grounds for challenging the validity of a rate. It is just possible, however, that as it stands the subsection could be taken to mean that whatever the grounds for applying for judicial review the whole rate should be quashed if relief is granted, even if the application relates to the validity of the rate as it applies to a particular hereditament.

Your Lordships will appreciate how absurd that would be, and this is why I feel sure that the risk of such an interpretation by a court is small. However, our purpose here is to ensure that the legislation we pass on to another place is as good and as clear as we can possibly make it, and I therefore seek your Lordships' agreement to the drafting amendment standing in my name, which puts the meaning of Clause 4(3) beyond doubt. I beg to move.

Lord Bruce of Donington

My Lords, as the noble Lord has indicated, this matter was discussed in Committee and the noble Lord gave some explanation of the position then. We are most grateful for the further explanation he has given today, and for his additional clarification. We feel that the amendment he has made adds to clarity. We are most grateful to him for it, and we on this side of the House will support the amendment.

On Question, amendment agreed to.

4.56 p.m.

Lord Bellwin moved Amendment No. 5: After Clause 5, insert the following new clause:

(" Rate relief in enterprise zones. 1980 c. 65.

.—(1) At the end of paragraph 27(1) of Schedule 32 to the Local Government, Planning and Land Act 1980 (exemption from rates of certain hereditaments situated in areas designated as enterprise zones) there shall be added the words "or in respect of any part of an exempt hereditament as regards any period during which the area in which that part is situated is so designated."

(2) In paragraph 28 of the said Schedule 32 (mixed hereditaments)—

1. (a) in sub-paragraph (2) (mixed hereditament to be rated as a dwelling of the appropriate rateable value), for the word "dwelling" there shall be substituted the word "dwelling-house"; and
2. (b) for sub-paragraph (3)(b) (extension of power to make regulations about appeals) there shall be substituted—

(b) the reference to the occupier or person treated as occupier of the hereditament being dissatisfied by the view taken by the rating authority included a reference to the occupier, the person aforesaid or the rating authority being dissatisfied by the view taken by the valuation officer; and ".

(3) After the said paragraph 28 there shall be inserted—

" Hereditaments partially, within enterprise zones

28A.—(1) As regards any period during which part only of an exempt hereditament (within the meaning of paragraph 27 above) is situated in an area designated as an enterprise zone, the valuation officer shall determine the portion of the rateable value of the hereditament attributable to the part of the hereditament situated outside the enterprise zone.

(2) Where a determination in respect of a hereditament has been made under sub-paragraph (1) above, the amount of any rates payable in respect of the hereditament shall (subject to sub-paragraph (3)(b) below) he the amount which would be payable in respect of it if its rateable value were equal to the portion of the rateable value which was determined under sub-paragraph (1) above.

(3) Where the hereditament in respect of which a determination has been so made is a mixed hereditament—

1. (a) the valuation officer shall also determine the portion of the rateable value of the hereditament attributable to any part of it which is used for the purposes of a private dwelling or private dwellings and is situated within the enterprise zone; and
2. (b) if such a determination is made, the amount of any rates payable in respect of the hereditament shall he the aggregate of the following amounts, namely—
1. (i) the amount payable under sub-paragraph (2) above, and
2. (ii) the amount which would be payable in respect of it if it were a dwelling-house of a rateable value equal to the portion of the rateable value determined under paragraph (a) above.

(4) Section 48(6) of the 1967 Act shall, with modifications corresponding to those contained in paragraph 28(3) above, apply also in relation to questions as to the portions mentioned in sub-paragraphs (I) and (3)(a) above." ").

The noble Lord said: My Lords, in speaking to this amendment I speak also to Amendments Nos. 6 and 53. These amendments expand the provisions for exemption from rates for certain hereditaments in enterprise zones which are contained in Part IV of Schedule 32 to the Local Government, Planning and Land Act 1980 in order to deal with an anomaly in those provisions. Paragraph 27 of that schedule provides for the exemption from rates of, essentially, non-domestic properties situated inside enterprise zones. It should logically be the case, and was the intention, that where a property straddled the boundary of an enterprise zone rates should be payable only on that part which lay outside the zone. However, the Act does not make provision for this.

Following representations from local authority associations, the CBI and business organisations, these amendments remedy the omission in the existing legislation with effect from the current financial year. They provide a procedure whereby the valuation officer will be empowered to determine what part of the rateable value is attributable to the part of the hereditament outside the zone. This is the portion on which rates will be payable. An additional determination will be made in the case of a mixed hereditament, so that rates are also payable on any part inside the zone used as a private dwelling. There is also a power to make regulations about appeals from the valuation officer's determination where the ratepayer or the rating authority objects to the apportionment.

For 1981–82, when it has not been possible to grant partial rate relief to straddling hereditaments extra-statutory payments are being made through the agency of rating authorities. These arrangements were announced by my right honourable friend the Secretary of State in another place on 21st April.

The amendments also include a technical improvement to paragraph 28 of the schedule and correct an omission to afford the rating authority, as well as the occupier, the opportunity of appealing against the valuation officer's determination in respect of a mixed hereditament. These amendments have been foreshadowed in another place, and I hope noble Lords will agree that they provide a necessary and useful extension of the existing provisions which give rate relief to businesses located in enterprise zones. I beg to move.

Baroness Birk

My Lords, I think there is a certain amount of merit in this amendment because, as the Minister pointed out, there has been a problem in some enterprise zones where factories have straddled boundaries. Reaching agreement on the amount of relief, if any, for these straddling hereditaments has, it is true, become a problem, albeit a minor problem, and this amendment, I think quite sensibly, leaves it to the judgment of the valuation officer. This seems to make more sense.

But, of course, it still does not alter the basic fact about enterprise zones and the argument that still continues about them. It is more and more felt that they are probably a misguided experiment—and this is not thought only on party political grounds—and I should like to ask the Minister to tell us when he replies whether he knows what has been the impact on rent levels in enterprise zones of the fact that there are no rates. They should, practically speaking, not be any higher, or be lower, because there are no rates; but economic theory (and, I understand, some of the practice) suggests that they rise to offset any advantage to industrialists—in other words, the rent will fill up the vacuum that is caused by the reduction of rates—and this seems to negate what has been considered to be the inducement to people to set up in enterprise zones.

Nevertheless, these amendments tidy up the administrative problems that have occurred in the granting of rate relief; but if the Minister has any knowledge on that (I am sorry; this is something that occurred to me while he was speaking, so I could not give him any prior notice of it) I would be very interested to know.

Lord Bellwin

My Lords, with the leave of the House, I could say that there is some evidence of what the noble Baroness says: that, in some instances, rents in some zones have tended in some cases to be higher than one might have expected or one might have anticipated. We shall have to watch this. It is all part of the monitoring that we consider so vital in everything to do with enterprise zones. The noble Baroness will know that we have expressly set up people to do just that and as soon as they are able to report, I am sure that the particular point that she mentioned will be included in the monitoring and report.

On Question, amendment agreed to.

Clause 6 [Interpretation and commencement of Part I]:

Lord Bellwin moved Amendment No. 6: Page 4, line 42, after (" 3 ") insert (" and (Rate relief in enterprise zones) (1) and (3) ").

The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

5.3 p.m.

Baroness Birk moved Amendment No. 7: Page 4, line 42, leave out ("relation to").

The noble Baroness said: My Lords, in moving Amendment No. 7, I should like to speak also to Amendment No. 45, since they go together. The first of these amendments makes Sections 1 to 3 (dealing with the prohibition of supplementary rates and precepts, et cetera) applicable only in any year after 1st April 1982. Therefore, the supplementary precept made by Bedfordshire before 1st April 1982—on 9th March—in relation to 1982–83 does not fall. The second amendment makes Schedule 1 apply only to supplementary rates and precepts made after the 1st April 1982.

The reason we are seeking these is because, after procedural problems, Bedfordshire County Council passed on 9th March a supplementary precept to enable their budget to be implemented at the level which was the wish of the current ruling coalition of Labour and Liberal groups on the county council. The advice received from legal counsel was that such a supplementary precept made for the whole year and made before 1st April 1982 would not have fallen foul of the Local Government Finance (No.2) Bill as then drafted. On 25th March, Mr. King, the Minister of Local Government, made a statement to the committee in another place dealing with the Bill that the legal advice that he had received was to the contrary. He said: I should like to confirm the legal advice that I have received, namely, that the Bill will invalidate retrospectively any supplementary rates or precepts made in respect of 1982–83, that this includes those made before 1st April and that Bedfordshire County Council's supplementary precepts will therefore fall on Royal Assent ".

At this stage, it was a legal struggle between the Minister's and Bedfordshire's counsel respectively. The Government, clearly, on, presumably, their counsel's advice, had second thoughts, for at Committee stage the Minister in this House tabled what is now Schedule 1 to the Bill, which relates clearly to Bedfordshire. Paragraph 1, when he is talking about whether before or after the 1st April 1982 and the supplementary precept in respect of a period beginning on or after that date, can only be about Bedfordshire. It will be interesting to know from the Minister how many other county councils have ever issued a supplementary precept in respect of a whole financial year before the start of the year—that is, how many have done as Bedfordshire did.

The purpose of banning supplementary rates and precepts is, as the Minister has told us often enough, to enable ratepayers to know where they stand before the start of the financial year. That criterion is met in the case of Bedfordshire's supplementary precept. The ratepayers would have known where they stood had it not been for Mr. King saying that the precept would fall on Royal Assent of this Bill. Even now, the people do not know and, as we shall see later, Amendment No. 8 in the name of the noble Lord, Lord Hill of Luton, is directed at making the situation absolutely clear, so that evidently he and those who agree with him do not feel that it is clear as it is drafted at the present time.

The effect of the Government's actions in relation to Bedfordshire is to make retrospectively unlawful an act by a single local authority which, first, the Government admitted was lawful at the time it happened and, secondly, the Government now tacitly admit would not necessarily have been made unlawful under the original draft of the Bill, which was all that was available when the supplementary precept was made by the county council. Thirdly, the Government admit that they never envisaged this, as Mr. Tom King said in the Planning Committee on 16th March and, fourthly, the original Bill was not designed to invalidate this.

This represents a fundamental breach of principle and of trust. The administration of Bedfordshire has been thrown into confusion by the Government. The least they can do is to permit the Bedfordshire County Council to rate at the level that the majority of its councillors wish. This can be achieved by making these amendments. These are not wrecking amendments. They are not only to clarify but to make quite sure that the prohibition which the Government can exercise under this Bill is at least limited in the way that the amendments set out. It also will enable ratepayers to know exactly where they are, which, under the Bill as it now is, they will not necessarily be able to do.. I beg to move.

Lord Evans of Claughton

My Lords, from these Benches, I support the amendments moved by the noble Baroness. I think she indicated the position that democratically the majority of the council in Bedfordshire wanted a certain kind of rate to be levied. By an unfortunate accident at an earlier meeting of the council, because of the absence of certain members for curious reasons, the Conservative minority managed to carry a rate which did not represent the views of the majority of the councillors, namely, the Labour and the Liberal councillors. What they did was to restore what was the view of the minority. Therefore, I think it would be inappropriate and contrary to democratic practices, which I am sure the noble Lord the Minister himself supports, if the majority of the councillors are not allowed to have the rate that they require. This would ensure that this happened and, therefore, this amendment in all equity, fairness and democratic practice should be carried so that the wishes of the majority of the elected members of Bedfordshire should carry the day.

Lord Bellwin

My Lords, the first amendment that we dealt with today, the one by the noble Lord, Lord Hill of Luton, touched on this area. I then made the Government position clear and I think I indicated our attitude to this Bedfordshire situation by the decision we took to accept that amendment. Amendments Nos. 7 and 45 are designed to ensure that the anomalous situation—and that is what it is—in Bedfordshire persists after Royal Assent. As the House is aware, the county council issued this supplementary precept in March for 1982–83. As the Bill stands, it will be invalidated on Royal Assent and the rating authorities and the Bedfordshire ratepayers will get their money back. Under the amendments, it will remain valid and the rating authorities and the ratepayers will be unable to get their money back. At least, I am pleased to see that noble Lords opposite have at last acknowledged that these words that they wish to delete (and which I must say have been in the Bill from the beginning, although originally part of Clauses 1 and 2) make it clear that the Bill applies to any actions taken in relation to the financial year 1982–83 whether or not they took place before 1st April 1982. That must be right.

We made it clear that our policy is to ban supplementary rates and precepts for 1982–83 and subsequent financial years. This means what it says. This is what the Bill does. There can be no question of exceptions. We believe that Amendments Nos. 7 and 45 are inconsistent with our policy objective and that is why they are not acceptable. The noble Baroness referred to Amendment No. 8. I am not sure whether the noble Lord, Lord Hill of Luton, wishes to deal separately with that. I hope I am not treading on his territory if I may refer to that now. The noble Baroness touched on the point and it is fundamental to the argument put forward. No doubt the noble Lord will tell me—

Lord Hill of Luton

My Lords, the noble Lord is giving the explanation which I sought in my amendment. In due course, at the appropriate time, I propose to withdraw my amendment.

Lord Bellwin

My Lords, I am most grateful to the noble Lord. I thought that was so; but perhaps I should say a word on the point now because the noble Baroness raised it and the noble Lord, Lord Evans, also touched on the principles. We have made it clear on a number of occasions that Clauses 1 and 2 will retrospectively invalidate any supplementary rates and precepts made for 1982–83, whether before or after 1st April, and therefore Bedfordshire's supplementary precept will fall on Royal Assent.

I can also confirm that Clause 3 and Schedule 1 will apply to all actions taken in relation to 1982–83. In view of what has transpired, I know the noble Lord will not want to proceed. He has given us that intimation. I know precisely what noble Lords opposite are concerned about. The noble Baroness wonders whether I can tell her how many county councils have issued supplementary precepts before the start of the year. I do not know whether any others have done so. It is clearly unusual. It arises from unusual circumstances that the noble Lord, Lord Evans, reminded us took place. I have known situations of that kind to happen, with other matters, not specifically to do with rates, in those kinds of circumstances.

It is true that usually—but not always—the authority in question takes the first available opportunity to put it right. Here we are talking about something which is a fundamental concept of what the Government believe has to be done; that is, to ban the making of supplementary rates. Therefore, whether there were others who have done it before does not bascially alter our position in the matter. That is why we cannot accept the amendment.

Baroness Birk

My Lords, the Minister started off by saying on Amendment No. 1 that the Government had made the postion quite clear. It was not clear. There were a number of points that I, the noble Viscount, Lord Ridley, and my noble friend Lord Bruce raised. It was put to the Minister that it would be better to come back on Third Reading. What we meant was that the amendment would not be accepted but would be brought forward in a clearer form on Third Reading. He grasped that branch and said he would like to explain it on Third Reading. That itself was not good enough.

Now to say that the position was made quite clear on Amendment No. 1 is not right. It was not made clear. The noble Lord, Lord Hill of Luton, thanked the department for the help in drafting Amendment No. 1. That was grasped with gratitude by the Government. We find the Minister's reply to the amendments moved by myself and my friends, joined by the noble Lord, Lord Evans, extremely unsatisfactory. I shall not rehearse the arguments.

We discussed this in Committee, and I have put forward the case again now. In Committee, my noble friend Lady David put forward an extremely detailed and well-argued case. She did not get much of a convincing reply, either. We seem to have taken this argument and discussion as far as we can go. Therefore, the only course left now is for us to divide the House on this amendment.

5.15 p.m.

On Question, Whether the said amendment (No. 7) shall be agreed to?

Their Lordships divided: Contents, 58; Not Contents, 106.

DIVISION NO. 2
CONTENTS
Airedale, L.	Elwyn-Jones, L.
Amulree, L.	Evans of Claughton, L.
Beaumont of Whitley, L.	Gaitskell, B.
Bernstein, L.	Gladwyn, L.
Birk, B.	Gregson, L.
Bishopston, L.	Hampton, L.
Blease, L.	Houghton of Sowerby, L.
Blyton, L.	Irving of Dartford, L.
Boston of Faversham, L.	Jacobson, L.
Briginshaw, L.	Jacques, L.
Bruce of Donington, L.	Jeger, B.
Collison, L.	John-Mackie, L.
Cooper of Stockton Heath, L.	Kilbracken, L.
David, B.	Leatherland, L.
Davies of Leek, L.	Listowel, E.
Davies of Penrhys, L.	Llewelyn-Davies of Hastoe, B.
Donnet of Balgay, L.	Lovell-Davis, L.

MacLeod of Fuinary, L.	Stewart of Fulham, L.
Mishcon, L.	Stone, L.
Molloy, L.	Strabolgi, L.
Oram, L.	Tordoff, L.
Peart, L.	Underhill, L.
Phillips, B.	Wallace of Coslany, L. [Teller.]
Ponsonby of Shulbrede, L. [Teller.]
	White, B.
Rochester, L.	Wigoder, L.
Sefton of Garston, L.	Wilson of Langside, L.
Shinwell, L.	Winstanley, L.
Simon, V.	Wootton of Abinger, B.
Stewart of Alvechurch, B.	Wynne-Jones, L.

NOT-CONTENTS
Abercorn, D.	Kinross, L.
Airey of Abingdon, B.	Kintore, E.
Alexander of Tunis, E.	Kitchener, E.
Ampthill, L.	Lane-Fox, B.
Avon, E.	Lindsey and Abingdon, E.
Balfour of Inchrye, L.	Long, V.
Belhaven and Stenton, L.	Lucas of Chilworth, L.
Bellwin, L.	Lyell, L.
Beloff, L.	McFadzean, L.
Belstead, L.	Mackay of Clashfern, L.
Bessborough, E.	Macleod of Borve, B.
Boardman, L.	Mancroft, L.
Boyd-Carpenter, L.	Massereene and Ferrard, V.
Caccia, L.	Merrivale, L.
Campbell of Alloway, L.	Mersey, V.
Chelwood, L.	Milverton, L.
Clitheroe, L.	Monk Bretton, L.
Cockfield, L.	Morris, L.
Colwyn, L.	Newall, L.
Cork and Orrery, E.	Northchurch, B.
Cottesloe, L.	Onslow, E.
Cullen of Ashbourne, L.	Orkney, E.
Daventry, V.	Pender, L.
Davidson, V.	Penrhyn, L.
Denham, L. [Teller.]	Peterborough, Bp.
Dilhorne, V.	Platt of Writtle, B.
Drumalbyn, L.	Portland, D.
Eccles, V.	Rankeillour, L.
Elles, B.	Ridley, V.
Elliot of Harwood, B.	Rochdale, V.
Elton, L.	St. Davids, V.
Faithfull, B.	St. John of Bletso, L.
Ferrers, E.	Saltoun, Ly.
Fortescue, E.	Sandford, L.
Fraser of Kilmorack, L.	Sandys, L. [Teller.]
Gainford, L.	Selkirk, E.
Gainsborough, E.	Sempill, Ly.
Gardner of Parkes, B.	Skelmersdale, L.
Garner, L.	Spens, L.
Glanusk, L.	Stradbroke, E.
Glenarthur, L.	Strathspey, L.
Haig, E.	Suffield, L.
Hailsham of Saint Marylebone, L.	Swinfen, L.
	Thorneycroft, L.
Harmar-Nicholls, L.	Trefgarne, L.
Hawke, L.	Trumpington, B.
Henley, L.	Vaizey, L.
Hill of Luton, L.	Vivian, L.
Hornsby-Smith, B.	Wakefield of Kendal, L.
Hylton-Foster, B.	Westbury, L.
Ilchester, E.	Windlesham, L.
Inglewood, L.	Wise, L.
Kemsley, V.	Young, B.
Killearn, L.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 7 [Adjustments of distribution of block grant]:

[Amendments Nos. 8, 8A, 9, 10, 11, 12, 13 and 14 not moved.]

Baroness Birk moved Amendment No. 15: Page 6, line 1, leave out subsection (4).

The noble Baroness said: I beg to move Amendment No. 15 and I hope that the Minister and the House will hear with me if I speak also to Amendments Nos. 16, 17 and 18, or at least speak round them. I have tried to keep to the groupings, but it is rather difficult because there is such a difficult link between these, and so I have tried to save time and avoid repetition. The reason I have not moved Amendments Nos. 9 and 12 and why I probably shall not move No. 22 is because they all lead up to the main Amendment No. 15, which is linked with Amendments Nos. 16, 17 and 18. Actually, I hope the noble Viscount, Lord Ridley, will excuse my mentioning Amendment No. 17, which is actually in his name, but it is one of the amendments in the group, so I hope he will not think I have taken over that amendment if I touch upon it. As I say, they are all linked together.

Clause 7(4) allows the Secretary of State to disregard expenditure of any description or amount for the purposes of determining compliance with his expenditure targets. This is a very broad power, subject only to the safeguard that the ideas for disregard must come from the local authority side. For 1981–82 the Secretary of State has announced his intention to disregard for penalty purposes expenditure below grant related expenditure, urban programme expenditure, expenditure incurred in connection with last summer's riots and winter emergency expenditure. For 1982–82 he has so far announced only the GRE exemption. If we are to have a penalty system, then these disregards—what an awful word that is—and especially the urban programme and riot exemptions are welcomed; but the fear that local authorities have over this subsection is the power it appears to give—I do not think it just appears to give—to the Secretary of State to manipulate the grant system. An amendment which is in the name of the noble Lord, Lord Evans, while not itself restricting this power, makes the Secretary of State accountable to Parliament for his decisions in this area.

Although they find abhorrent the powers of the Secretary of State to manipulate the grant system, what local authorities object to even more is uncertainty about their grant; and wherever there is an element of uncertainty it makes life very difficult for the finances and for the programming of the local authority. The worry is that the Secretary of State would change the rules on grant distribution after the start of the financial year. He can do this by way of a supplementary report in a discriminatory fashion. Clause 7(4) seems to give him that power—a power which he was seeking earlier in earlier drafts of the Bill but was forced to drop. That was known as the differential super holdback—another absolutely elegant phrase. This power, together with the prohibition of supplementary rates and precepts, could result in the Secretary of State determining the expenditure levels for individual local authorities. By allowing disregards to be specified only in the main rate support grant report—that is, before the start of the year—the amendment of the noble Viscount, Lord Ridley, seeks to restore local authority grants, and for that reason is very much welcomed. However, it would enable only some disregards to be legalised in future years—the type that can be foreseen, such as the GRE exemption or urban programme expenditure.

It would not allow the Secretary of State to disregard and thus protect from penalty the type of expenditure which affected many urban areas last year: riots or the natural emergencies of last winter which affected many rural areas. This is why the amendment in the names of myself and my noble friend Lord Bruce differs from the others and from that of the noble Viscount. It goes rather further. Our concern is to give local authorities some certainty, to restrict the actions of the Secretary of State and at the same time to permit exemptions that would be useful to local authorities. By restricting supplementary report disregards to emergency or disaster expenditure—this is under Section 138 of the 1972 Act—the amendment would then seem to achieve that objective.

The other problem with the noble Viscount's amendment is that it would not allow the Secretary of State to legalise the exemptions which he has already promised for 1981–82 and 1982–83, as the main rate support grant reports have already been made for those years. But perhaps this would be the Government's problem rather than the noble Viscount's. I am afraid that I have gone into detail over some of the other amendments, because we believe that none of them gives the safeguards which we think should be incorporated in the Bill. It is for that reason that we believe that the best thing to do is to leave out subsection (4) entirely. My Lords, I beg to move.

The Deputy Speaker (Lord Ampthill)

My Lords, I should point out to your Lordships that, if this amendment is agreed to, I cannot call Amendments Nos. 16, 17 and 18.

Lord Bellwin

My Lords, of course, I welcome the grouping together in this way, although I think that Amendment No. 17, of my noble friend Lord Ridley is slightly different. Therefore, the noble Baroness will understand if I do not touch on that, but reserve my remarks on it until my noble friend moves it. While I will gladly comment upon Amendments Nos. 15, 16 and 18 together, I suppose it ought fairly to be said that, in a way, the amendments are alternatives, as I am sure the noble Baroness appreciates.

The Government have already made it clear that without subsection (4) it will be impossible to give any exemptions from holdback—including the GRE exemption. I cannot believe that this is what your Lordships—or, indeed, the local authorities themselves—actually want. I have said before that there is no question of the Government's going back on their intention to implement holdback. The question is whether or not we can grant the exemptions which the authorities themselves have asked us to make. Anyone who voted in favour of this amendment would horrify a great many authorities who stood to benefit from the exemptions which we have already announced.

Your Lordships will not imagine that without this subsection the Government will abandon their holdback proposals. It will still be necessary for the Government to act, in face of the undeniable failure of local government to comply with our public expenditure guidelines. We cannot ignore or minimise the amounts involved. I repeat that the total over spend in 1982–83 is about £1½ billion; the Government cannot continue to support overspending on this scale with the taxpayer's money. The Government certainly hope that the effects of any overall reduction in grant will be distributed in as fair a manner as possible; and subsection (4), by ensuring that the Government can respond to representations about holdback, provides one way in which that can be achieved.

Deleting the subsection might appear, at first sight, as an attractive political gesture, but it would have disastrous consequences for many authorities, and I hope that noble Lords will consider very carefully the consequences of that. If the Government are prevented from responding to the representations about holdback, and if the necessary grant reductions have, in consequence, to be made in a comparatively undiscriminating way, then it will be clear where the responsibility lies.

Amendments Nos. 16 and 18 are interesting ones. As the noble Baroness, Lady Birk, said, they would restrict the power of the Government to respond in the future to representations about holdback. Admittedly they would take effect only from the year 1983–84, and so would not prevent the Government from giving the exemptions which we have already announced for 1981–82 and 1982–83. But for 1983–84 and future years they would prevent the Government from exempting any expenditure, other than that incurred as a result of emergencies or disasters involving destruction of or danger to life or property.

This is a very narrow discretion. It would prevent us from giving a GRE exemption, or an exemption for some urban programme expenditure, as we have agreed to do in respect of 1981–82. There are many similar exemptions that have been urged upon us, which we have been able to consider, even though, in the end, we have felt unable to accept them. But these amendments would rule them out altogether.

The most important consequence would be the end of the GRE exemption. This was first announced in September, 1981, as a response to the argument, strongly expressed by many authorities, that it was unfair to treat authorities, which, on objective criteria, had comparatively low levels of expenditure, in the same way as those which, on the same criteria, appeared as overspenders. This argument commended itself to the Government, and the GRE exemption for 1981–82 was the result. The Government have since proposed extending the same principle to 1982–83, and in the current year as many as 141 authorities may gain partial or complete exemption from holdback as a result.

I can see no good reason for preventing the Government from granting such exemptions in the future. Subsection (4) of the clause makes it clear that the power to respond to representations can be used only to disregard expenditure; in other words, it can be used only to the benefit of authorities. Subsection (6) ensures that holdback will have to be done in accordance with principles to be applied to all local authorities; in other words a Government would not be able to single out a particular authority for special treatment. Subsection (8) of the clause ensures that the principles on which any differential holdback scheme would operate will have to be spelled out in the rate support grant report for the year in question. So there is no question of differential holdbacks being increased mid-year, when it is too late for an authority to reflect it in its rates. That is a point which the noble Baroness, Lady Birk, touched upon, when we were talking originally about super-holdback and so on. But we have taken care of that.

So in that context —when the discretion of the Government is already severely limited—I do not think that the power to respond to representations is drawn too widely, or that it can be said to give the Government too broad a discretion. Noble Lords opposite are worrying too much about this. Subsection (4) cannot be used to impose additional differential holdback. It is simply a power to give exemptions in response to representations. We have already shown how—in respect to 1981–82 and 1982–83—this power can be used in a reasonable way to the benefit of a considerable number of authorities. These amendments would prevent it from being used in the same way in the future. That is why we cannot accept the amendments.

Lord Evans of Claughton

My Lords, I have listened with great interest to what the noble Lord the Minister has said, and, while we do not approve of the penalty system, if there is a penalty system one must welcome the exclusion of rioting and so on. But what concerns people in local government is the uncertainty about what will be exempted in the future when they are making their arrangements. They will be totally uncertain, because, as I understand it, the Secretary of State has given no indication of what his proposals will be for the present year. He has indicated—and it is very acceptable—what he will be exempting or disregarding in the last year. It is the uncertainty which concerns us. The Minister has gone some way towards reassuring me, but there is a fear in local government, of which the Minister is probably aware, that this clause will be used to manipulate the grant system in a way which might at some point be used—not by the noble Lord the Minister or, indeed, by his right honourable friends but by some future Government—in an irresponsible, divisive and selective way. It is those two points—first, the uncertainty and, secondly, the fear of manipulation—which concerns many of us about the effect of this clause.

Lord Bellwin

My Lords, may I, with the leave of the House, say that I understand absolutely what the noble Lord, Lord Evans of Claughton, has said. In an attempt to try to get the kind of certainty to which he refers, I submit that one would have to give up the flexibility to manoeuvre which would be of benefit to local authorities. What the noble Lord has said is true: it could be abused. I believe, however, that it is vitally important that the flexibility should be retained. The examples of the exemptions which have been given illustrate what would happen if we were to specify only those things. There may even be changes to those exemptions, which I agree adds to the uncertainty. Nevertheless, so long as local government knows the position before it starts its rate-making procedure—my right honourable friend in another place conceded this point, and that is why we made the changes which we did—I feel that there is no need to be concerned. The converse is the point which I have already made: that to forgo the right to make exemptions would be far too much to give up. As I see it, this would he to the disadvantage of local government.

Baroness Birk

My Lords, out of this group of amendments to which I spoke originally and to which the Minister has replied, by far the most important is the amendment which I moved; namely, Amendment No. 15. At the end of the Committee stage we had a very general discussion on what was the old Clause 4. Clause 4 was dealt with separately because it appeared so late. The answers given then were very unsatisfactory. There was a great deal of disquiet about the exemptions which were proposed by the Government to alter Clause 4. Much as we disliked Clause 4 originally, we disliked even more the amendments put forward by the Government.

We feel that the only way to deal with the matter is to dig out the core, which is embodied in Amendment No. 15. If Amendment No. 15 were to be accepted by the House, some of the other amendments which for the moment I have not moved but which lead up to it—to insert again the other pieces—and the amendments which follow would not be so necessary, because the central point, which was argued so well just now by the noble Lord, Lord Evans of Claughton, would be covered. The Government's reply is unequivocal. There is nothing ambiguous in what the Minister has said. He quite firmly turned it down. Therefore, I shall have to ask the House to divide on the amendment.

5.45 p.m.

On Question, Whether the said amendment (No. 15) shall be agreed to?

Their Lordships divided: Contents, 60; Not-Contents, 93.

DIVISION NO. 3
CONTENTS
Airedale, L.	Listowel, E.
Beaumont of Whitley, L.	Llewelyn-Davies of Hastoe, B.
Bernstein, L.	Lovell-Davis, L.
Birk, B.	MacLeod of Fuinary, L.
Bishopston, L.	Mayhew, L.
Blease,L.	Mishcon, L.
Blyton, L.	Oram, L.
Boston of Faversham, L.	Peart, L.
Briginshaw, L.	Phillips, B.
Bruce of Donington, L.	Ponsonby of Shulbrede, L.
Collison, L.	Rochester, L.
Cooper of Stockton Heath, L.	Sefton of Garston, L.
David, B. [Teller.]	Shinwell.L.
Davies of Leek, L.	Simon, V.
Davies of Penrhys, L.	Stamp, L.
Elwyn-Jones, L.	Stedman, B.
Evans of Claughton, L.	Stewart of Alvechurch,B.
Gaitskell, B.	Stewart of Fulham, L.
Gregson, L.	Stone, L.
Hampton, L.	Tordoff, L.
Harris of Greenwich, L.	Underhill, L.
Hooson, L.	Wallace of Coslany, L. [Teller.]
Houghton of Sowerby, L.
Howie of Troon, L.	Wedderburn of Charlton, L.
Irving of Dartford, L.	White, B.
Jacques, L.	Wigoder, L.
John-Mackie, L.	Wilson of Langside, L.
Kennet, L.	Winstanley, L.
Kilbracken, L.	Wootton of Abinger, B.
Kirkhill, L.	Wynne-Jones, L.
Leatherland, L.

NOT-CONTENTS
Abercorn, D.	Kemsley, V.
Alexander of Tunis, E.	Killearn, L.
Ampthill, L.	Kinross, L.
Avon, E.	Kitchener, E.
Balfour of Inchrye, L.	Lane-Fox, B.
Belhaven and Stenton, L.	Lauderdale, E.
Bellwin, L.	Lindsey and Abingdon, E.
Beloff, L.	Long, V.
Belstead, L.	Lucas of Chilworth, L.
Bessborough, E.	Lyell, L.
Boardman, L.	McFadzean, L.
Brougham and Vaux, L.	Mackay of Clashfern, L.
Caccia, L.	Macleod of Borve, B.
Campbell of Alloway, L.	Mancroft, L.
Chelwood, L.	Massereene and Ferrard, V.
Cockfield, L.	Merrivale, L.
Colvilieof Culross, V.	Mersey, V.
Colwyn, L.	Monk Bretton, L.
Cork and Orrery, E.	Morris, L.
Cottesloe, L.	Northchurch, B.
Craigavon, V.	Onslow, E.
Crathorne, L.	Orkney, E.
Daventry, V.	Pender, L.
Davidson, V.	Peterborough, Bp.
Denham, L. [Teller.]	Platt of Writtle, B.
Dilhorne, V.	Portland, D.
Drumalbyn, L.	Rankeillour, L.
Eccles, V.	Renton, L.
Elles, B.	Rochdale, V.
Elliot of Harwood, B.	St. Aldwyn, E.
Elton, L.	St. Davids, V.
Faithfull, B.	Sandys, L. [Teller.]
Ferrers, E.	Skelmersdale, L.
Fortescue, E.	Spens, L.
Fraser of Kilmorack, L.	Stradbroke, E.
Gainford, L.	Strathspey, L.
Gainsborough, E.	Suffield, L.
Gardner of Parkes, B.	Thorneycroft, L.
Glanusk, L.	Trefgarne, L.
Glenarthur, L.	Trumpington, B.
Haigh, E.	Vaizey, L.
Hailsham of Saint Marylebone, L.	Vivian, L.
	Wakefield of Kendal, L.
Hawke, L.	Westbury, L.
Henley, L.	Windlesham, L.
Hornsby-Smith, B.	Wise, L.
Hylton-Foster, B.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.52 p.m.

The Deputy Speaker

My Lords, before calling Amendment No. 16 I should point out that, if it is agreed to, I cannot call Amendment No. 17.

[Amendment No. 16 not moved.]

Viscount Ridley moved Amendment No. 17: Page 6, line 5, leave out from (" 1980 ") to end of line 7.

The noble Viscount said: My Lords, I have no intention of going through the immensely complicated struggles over what was Clause 4, because at Committee stage I recognised that I was defeated by the Government in this matter and I do not want to raise the issue again. The point I am trying to raise in Amendment No. 17 is slightly different. I believe it is a much more reasonable point and I cannot see why the Government could not accept it. It seems to me totally sensible and I will try to explain it as briefly as I can.

If we accept subsection (4), as we have done now, I believe we have to look very carefully at subsection (4)(b) which really says that the Government can take these powers to hold back the grant and so forth, in a supplementary report made for any year under section 61 of that Act ".

This means that the Government can come back after the authority has fixed its rates, and after the rate support grant has been announced in a special supplementary report, and tinker with the whole operation all over again. Part 1 of the Bill makes it quite clear—it is perfectly clear to me anyway—that the supplementary rate was something that had to go and that authorities had to decide at the beginning of the year what money they wanted and make a rate accordingly. At the same time, under this nasty little subsection, the Secretary of State can take the power himself to fiddle about with the thing half way through the year and upset the whole apple-cart all over again. I think this is totally wrong.

The authorities must know where they stand when they fix their rate. They must know what their grant will be. Although there are some advantages in the hold-back provisions, I know, having read the debates at Committee stage, that it is certainly not acceptable to the associations. They feel that to allow a supplementary report to come in later is opening all kinds of possible doors, fiddling about with the thing, and tinkering with the main rate support grant. I believe this would be quite wrong and I hope that the House will agree to remove that little piece.

It may be said that there should be provision for emergency situations such as riots or snow—especially heavy snowfalls—and that the Government should have powers to compensate authorities for something unforeseen of this nature. 1 would say that that is a tine theory hut the Government could use these powers for matters which are not emergencies. Who is to define what is an emergency and one that requires such tremendous interference with the system? Any local authority with any financial prudence at all has a contingency fund and balances for just this very purpose of meeting unforeseen emergencies. The Government should be able to put the matter right, if they so wish in their wisdom or otherwise, and to compensate these authorities the following year under the main rate support grant order, and so correct the things that went wrong under the emergency.

The other argument which I see my noble friend Lord Bellwin preparing against me—I shall try to destroy his missiles before they reach me—is that the Government have promised to make exemptions to all this in the current financial year, which is now two months old. That may be so, and if I am successful the Government may have to go back on that, but again I believe the Government could put that right in the 1983–84 rate support grant, under the main order. Secondly, I believe it is wrong to legislate on this sort of matter for one particular year. This is a matter of great importance to local authorities and, to my mind, legislation should not be geared to what may or may not be done in one particular year. I am talking about the future and not about the current year; that there should not be provision in the future for the Government to mess about with the system. The Government should take their decisions once and for all on the rate support grant, which they have every right to do, and having taken those decisions they should stick to them. I beg to move.

Baroness Platt of Writtle

My Lords, I should like to support my noble friend Lord Ridley. I do not think that I need to add any words to what he has said, except to underline his remarks with considerable sincerity.

Lord Bruce of Donington

My Lords, we on this side of the House would like to support the amendment moved by the noble Viscount, Lord Ridley. Throughout the whole passage of this Bill, the noble Lord the Minister has in the most reasonable and reasoned terms repeatedly assured the House that what the Government really want to do in their benign fashion is to bring an element of certainty into local government affairs. He uses his arguments most persuasively—sometimes, almost with an air of injured innocence, which completely belies any intention to injure any local authority at all or to operate anything to the detriment of local authorities. In fact, the noble Lord has almost appeared to be injured at any suggestion that the thought should be in his mind that there should be any uncertainties so far as local authorities are concerned. If the noble Lord really means this, he must surely agree with the amendment that has been put forward by his noble friend Lord Ridley.

In this Bill the Government have taken almost unprecedented powers to intervene in the affairs of local authorities, in ways which local authorities would not have imagined 15 years ago—those nostalgic years to which the noble Lord himself has referred. So far as local authorities are concerned, this Government are a thoroughly interventionist Government; intervening in every conceivable matter of detail that they can. This must undoubtedly reflect the basic philosophy of his right honourable friend that local authorities really cannot be trusted to do anything at all. Hence the insertion of this offensive subsection (4)(b) in this particular clause. As if all the powers he has taken unto himself in the Bill are not enough, the noble Lord's right honourable friend must still have some reserve powers. He must still have the right to think again if things do not seem to be going quite his way. This really will not do. I am quite sure—almost to adopt the manner of the noble Lord opposite—in his own mind, as a local government man, the noble Lord must himself be inwardly repelled by all the implications of subsection (4)(b). Therefore, I beg of him—as if the powers he is taking in other sections of the Bill, and even other parts of this particular part, are not enough—to say to himself, "Well, this argument has been put forward with authority by the noble Viscount, Lord Ridley, and by some of his friends and by the associations, I will on this occasion give way to it"—because this is completely unnecessary. I hope, therefore, that the noble Lord will see fit to accept the amendment of his noble friend. If his noble friend cares to take the matter to the Division Lobby, which I sincerely hope he will in following his own principle to the utmost, we shall have no hesitation in supporting him.

Lord Evans of Claughton

My Lords, may I briefly lend such support as I can to the noble Viscount's amendment. I think the noble Lord the Minister must be having a frisson of doubt, if not fear; the noble Viscount, Lord Ridley, represents the Association of County Councils, which you could not say was an organisation dominated by the extreme Left, by a crowd of Reds, which no doubt he believes the AMA is. If this objection is coming from the true blue Association of County Councils surely he must be saying to himself that there must be something in this. I hope, therefore, that he will take this amendment very seriously and perhaps accept it in some form, or give the reassurances the noble Viscount is looking for.

6.2 p.m.

Lord Bellwin

Well, my Lords, talk about coming under pressure from all sides—but not for the first time on these matters. May I say, first, that I appreciate the way in which my noble friend Lord Ridley put his amendment, just as I would have expected of him. Indeed,for that matter, although I want to comment on one or two of the specific points the noble Lord, Lord Bruce, made, he, too, put it from where he sees it fairly enough.

The fact is that we cannot accept these amendments. Let me explain why. I hope your Lordships will listen very carefully, because I am absolutely convinced that the real implications of what this means are not understood. The first effect of the amendment would be to rule out any exemption in respect of 1981–82 and 1982–83, since none was spelled out in the main rate support grant reports for either year. This means that there would be no urban programme exemption, no exemption for expenditure incurred as result of last summer's riots, no exemption for expenditure incurred as a result of the winter's bad weather, and, above all, no exemption for authorities spending below their GRE. Let there be no misundertsnding about this. The whole question of the control of public expenditure is far too important for it to be any kind of game. The Government are wholly committed to their policy. We simply cannot allow local government, we cannot afford to allow local government, to disregard the overall expenditure guidelines with impunity. This is the nub of this particular amendment. If this amendment is carried, first of all the Government will not quietly disregard and abandon the holdback proposals. The aggregate amount of rate support grant will still have to be reduced; we cannot ask taxpayers to go on subsidising overspending of the order we have seen in the past two years.

If there is a Division and if this amendment is carried, it will simply mean that for 1981–82 and 1982–83 the Government will not be able to allow any exemptions from holdback. The loss of the GRE exemption alone means—I hope my noble friend notes this carefully, and also my noble friend Lady Platt—that 23 shire counties would find themselves liable for holdback in respect of 1981–82 and at least 26 shire counties in respect of 1982–83. I simply cannot believe that that is what they or my noble friend want. My noble friend Lord Ridley says, "Well, the Government can put it right next year", but he knows, with his vast experience, how accounts work on a year-to-year basis, how rates are made on a year-to-year basis, and you cannot just put it right in that way, especially as the amounts of money concerned, depending on the size of the authority, can be very considerable.

The noble Lord, Lord Bruce, says that if I had the interests of local government at heart, I would accept this amendment. How could I equate having the interests of local goverment at heart with being willing to see 23 or 26 authorities having to forego holdback? I see a lot of those who come to make representations for exemptions of one kind or another. When we made the original exemptions on the basis of GRE I can tell your Lordships we were flooded with letters of gratitude and relief, because the concern had been so great. I am here asked to contemplate a measure which means going back on that. I fear very much when I am assailed on all sides of your Lordships' House, but frankly I would fear much more if I had to go back and see 26 individual deputations saying, "What on earth are you doing; how come you are going back on what you said?"

The other effect of my noble friend's amendment would be to rule out in future years any exemptions that were not announced in advance in the rate support grant report for the year in question. This in a way touches on the point that the noble Lord, Lord Evans, made, when I was saying to him how important it is to retain flexibility, to retain the right to benefit— and that is the point; it is only to benefit, and not to disadvantage a local authority. How can you give up that right, that opportunity, to benefit them? I just do not understand how anyone can put it the way that they do. It would not only make it difficult but probably impossible to disregard the unpredictable and unpredicted items of expenditure that on the face of it have the strongest case for being disregarded in calculating a holdback. If expenditure is foreseen, it can be taken into account by an authority in making its budget and setting its rate. It is those uncovenanted items of expenditure that come too late for offsetting savings to be made elsewhere that on the face of it have a good claim to be considered for exemption from holdback, and it is just those items which would in practice be ruled out by my noble friend's amendment.

The noble Lord, Lord Bruce, referred to what he called a thoroughly interventionist Government; that by what we do we say that local authorities cannot he trusted to do anything at all. Those are the very words he used. All I would say, as I have said many times before, and it makes me sad to say it, is that through all the years, when local government always worked within the parameters set down, there was no such need. But when you are faced with an over-spending of £l½ billion, and it is more than in the previous year, no Government can run their financial affairs without doing something at least to try to bring local authorities to have some control. When you look more closely at the make-up of this £1½ billion you find that there are some 260 or 270 local authorities who do work within the guidelines, who do say, "All right, whether or not we like what you are laying down, we accept that the Government must govern". Therefore are we to say to those authorities, "You may have no exemptions. We will take away from ourselves the power to give you exemptions "?

It is not a starter and we cannot accept it. It is not a question of tinkering with grant entitlements to the disadvantage of the authority. I hope that my noble friend will not feel obliged to divide, because I hope he will be persuaded by what I have said. As a last word before I sit down, let me say that these changes that can be made under subsection (4) during the year can only be to the benefit—and I hope this is noted carefully—and cannot be to the disadvantage of any local authority; and that, frankly, is game, set and match.

Viscount Ridley

My Lords, before my noble friend sits down I wonder whether he would answer one question. Would he speak differently if the amendment were so worded that it did not come into effect until, say, 1st April 1984? By this means the promises that were made in the current and last financial years can be honoured—because I accept his argument in that respect. I was talking about the future, not the past. I wonder if he would accept a Third Reading amendment dealing with the future only.

Lord Bellwin

My Lords, clearly the point I made about the present is absolutely critical but I thought that the philosophy of what I was saying applied in general. What we need and what we get from this subsection is the right to be able to give exemptions when the unforeseen, the unpredictable, comes about. That is all it is. That is why, frankly, I am astonished that the ACC powers-that-be are unwilling to see that that is what it means. We are at one stage from the last stage of this Bill and I hope that my noble friend will perhaps again at least read what I say and again discuss with his colleagues whether we are right or wrong. If he can convince us that we are wrong, then of course we will listen; but I assure him that we have thought deeply about this because we had a Division on it last time, and we do not take those things lightly. We feel that the principle of the right to be able to give these benefits should the need arise is fundamental at any time.

Viscount Ridley

My Lords, I have one crumb of comfort. It would be wrong to divide the House, but I may well return to this on Third Reading. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 18 not moved.]

Lord Evans of Claughton moved Amendment No. 19: Page 6, line 13, at end insert— (" ( ) The Secretary of State shall publish in a supplementary report for the relevant year under section 61 of that Act his detailed reasons for acceptance or rejection of any representations made to him under this subsection; and any association of local authorities or any local authority may appeal to the Secretary of State if, in their view, his response to their representations made to him under this subsection, does not take full account of their statutory duties under existing legislation.").

The noble Lord said: My Lords, this amendment seeks to persuade or require the Government to give reasons and explanations for the actions which they have taken, which we debated earlier today. It seems to me a very reasonable amendment, given that the Government are quite adamant, as is the noble Lord the Minister himself, about the retention of the holdback provision. It merely seeks to require the Government to publish in great detail their reasons for exempting any item of expenditure, and indeed for not ex empting any item which a local authority may have asked to be left out in calculating the hold-back.

As noble Lords will see from my amendment, there is then an opportunity for the local authority, or local authority association, to appeal if they are not satisfied with the reasons which the Secretary of State has published for refusing exemption of the item of expenditure. I think the noble Lord the Minister has made very clear to even the most stubborn of us that he will insist on retaining this right to act, but it does not prevent the Government from retaining this power which they seem so anxious to have. It ensures only that the Government will have to explain the reasons for their action: and when Government has to explain reasons for their action it might possibly persuade him to move with more care and circumspection than if there was no requirement to give a full account of the reasons for their decision.

It seems to me, in all fairness and all reasonableness, that local authorities are entitled to a full, clear and specific explanation as to why things have been done and why exemptions have or have not been made. It seems to me, therefore, that this is a perfectly reasonable and, I would have hoped, acceptable amendment slightly to mitigate the pains and uncertainties local authorities will have under this new legislation. I beg to move.

Lord Bellwin

My Lords, the Government have some sympathy with the objective here, and I myself am absolutely committed to openness, accountability, to explanation and so on, at all levels of Government. I believe we cannot have too much of it. Many of the measures which we passed in the 1980 Act were directed in that way and much of what we are talking about through the Audit Commission and so on, and much of the requirement now for the greater presentation in accounts, is all in that direction and I am in favour of it. Therefore, in terms of the philosophy behind this amendment I am not against that, but there are problems here.

We have considered all the representations that have been put to us about hold-back and we have borne them carefully in mind in making this proposal. It is no secret that the hold-back exemptions we have already announced have been framed in response to representations. Similarly it is no secret that there were other representations we were unable to accept. But the Government cannot bind themselves to be obliged to publish all the reasoning in each instance and if the noble Lord will consider carefully I believe he would accept that in practical terms this is not a starter.

If I may adapt an old adage, where there are 400 authorities there will be 400 different opinions, and to publish a reasonable account of all the hundreds of different options that have been presented would really be an impossible task; but even then, if that were the end of the story, there could be an argument but it would also be an unnecessary task because any exemption which the Government agree to accept will have to be spelled out in a rate support grant report or supplementary report, and the principles on which they will operate will have to be set out there in detail.

It is true, of course, that the report will not have to list all those suggestions that it has not proved possible for us to accept but individual authorities will know how we responded to their individual cases. Whenever we meet deputations from authorities—and I speak from experience of seeing very many of them—we have a chance to discuss the points that they put to us. We and they welcome the opportunity to discuss the points that they put to us, and I believe I may fairly say we are equally responsive to written representations; but to record all these discussions at length in the report would mean that we would never finish the job. I suspect that the noble Lord, Lord Evans, who understands these things, realises that very well and if he will reflect I suspect that he will not be unsympathetic to what I am saying on this. What is superficially a very reasonable amendment can have some fairly devastating effects, and I suspect we shall be more than wrapped up in red tape; but on the substantive point I can reassure noble Lords that the Government will not act in an unprincipled or unreasonable way.

The clause as it stands already, I submit, contains sufficient safeguards to ensure that. Nor will we fail to act in the face of convincing argument that action is needed. Frankly, that is a political imperative, not a legal one, and we do not need any red tape to bind us to that. I hope that from what I have said the noble Lord will feel that there is at least a reasonable argument in what I have put forward, and perhaps will not want to press the amendment.

Lord Bruce of Donington

My Lords, the noble Lord has made very heavy weather of the amendment that has been moved by the noble Lord, Lord Evans of Claughton. All that the noble Lord's amendment asks for is the publication—that is all. The work has already been done. The actual work of determining and the reasoning has all been done. Of course, if the Ministry is functioning properly, minutes will have been kept and memoranda will have been written explaining and arguing the various reasons and the various matters that have been taken into account. All that work has to be done in any event if the Ministry is doing its work properly. Certainly it must be done, Various matters that were discussed at a meeting with representatives or at staff meetings that the Minister holds are not all left to vague memory. It is very carefully minuted.

The Minister will have in his possession all the detail that has been requested by the noble Lord, Lord Evans of Claughton. All that the noble Lord is asking for is publication. This is not a vast matter requiring any very detailed work at all. All the detailed work has been done. All the noble Lord, Lord Evans, is asking for is that what the Minister has done and the reasoning behind it shall be made public. That is all.

Lord Evans of Claughton

My Lords, I must say that I understand the reservations of the noble Lord the Minister and I can understand that, from a ministerial point of view, he has to say that this proposal would cause a great deal of bureaucracy and red tape. I am greatly obliged to the noble Lord, Lord Bruce of Donington, for the points that he made because, as the noble Lord said, the work has been done. The point I make is that if you are taking draconian measures to control local authorities and interfering with their freedom, then you ought to be prepared to be accountable to them and to explain your reasons, and be willing to have them examined and re-examined and listen to appeals.

In my opinion, the Government are taking an extremely serious measure restrictive of local government freedoms as the noble Lord the Minister has heard me and other noble Lords say several times, and therefore I shall not repeat them with even greater emotion on this occasion. I believe that with these restrictions the Government are left with the holdback provisions, the exemptions and such things and with the kind of powers that, if not openly used, could be extremely dangerous and could be abused.

I seek to prevent abuse, to try to ensure that there is accountability, and to give local authorities the opportunity to explain—if the type of things that the Government do to them regarding their grant are explained—that they need the money because they cannot otherwise carry out their statutory duties and obligations. Quite frankly, I feel that the Minister has his power in spite of our objections, and I think that the Government are being a little small-minded and rather petty in now refusing local authorities the right—not the privilege—to have a clear and precise examination of the reasons behind the Government's decision. I feel sufficiently strongly about this to test the opinion of the House.

6.23 p.m.

On Question, Whether the said Amendment (No. 19) shall be agreed to?

Their Lordships divided: Contents, 55; Not-Contents, 83.

DIVISION NO. 4
CONTENTS
Airdale, L.	Kirkhill, L.
Banks, L.	Llewelyn-Davies of Hastoe, B.
Barrington, V.	Lloyd of Kilgerran, L.
Beaumont of Whitley, L.	Lovell-Davis, L.
Bernstein, L.	MacLeod of Fuinary, L.
Birk, B.	Mayhew, L.
Bishpston, L.	Mishcon, L.
Blease, L.	Oram, L.
Blyton, L.	Peart, L.
Boston of Faversham, L.	Ponsonby of Shulbrede, L. [Teller.]
Bruce of Donington, L.
Collison, L.	Rochester, L.
David, B.	Sefton of Garston, L.
Davies of Leek, L.	Shinwell, L.
Davies of Penrhys, L.	Simon, V.
Eiwyn-Jones, L.	Stamp, L.
Evans of Claughton, L.	Stewart of Alvechurch, B.
Gaitskell, B.	Stewart of Fulham, L.
George-Brown Hampton, L.	Stone, L.
	Tordoff, L.
Hooson, L.	Underhill, L.
Houghton of Sowerby, L.	Wallace of Coslany, L.
Irving of Dartford, L.	Wedderburn of Charlton, L.
Jacques, L.	White, B.
Jeger, B.	Wigoder, L. [Teller.]
John-Mackie, L.	Winstanley, L.
Kilbracken, L.	Wootton of Abinger, B.
Kilmarnock, L.	Wynne-Jones, L.

NOT-CONTENTS
Abercon	Lindsey and Abingdon, E.
Avon, E.	Long, V.
Balfour of Inchrye, L	Lucas of Chilworth, L.
Bellwin, L.	Lyell, L.
Beloff, L.	McFadzean, L.
Belstead, L.	Mackay of Clashfern, L.
Bessborough, E.	Macleod of Borve, B.
Boardman, L.	Mancroft, L.
Broadbridge, L.	Massereene and Ferrard, V.
Brougham and Vaux, L.	Merrivale, L.
Caccia, L.	Mersey, V.
Campbell of Alloway, L.	Monk Bretton, L.
Chelwood, L.	Morris, L.
Cockfield, L.	Moyola, L.
Colville of Culross, V.	Northchurch, B.
Colwyn, L.	O'Neill of the Maine, L.
Cork and Orrery, E.	Onslow, E.
Cottesloe, L.	Orkney, E.
Craigavon, V.	Pender, L.
Crathorne, L.	Peterborough, Bp.
Daventry, V.	Platt of Writtle, B.
Davidson, V.	Portland, D.
Denham, L. [Teller.]	Rankeillour, L.
Drumalbyn, L.	Ridley, V.
Eccles, V.	Rochdale, V.
Elliot of Harwood, B.	St. Aldwyn, E.
Elton, L.	St. Davids, V.
Ferrers, E.	St. John of Bletso, L.
Fortescue, E.	Sandys, L. [Teller.]
Gainford, L.	Shannon, E.
Gainsborough, E.	Skelmersdale, L.
Gardner of Parkes, B.	Spens, L.
Glanusk, E.	Stradbroke, E.
Glenarthur, L.	Strathspey, L.
Haig, E.	Suffield, L.
Harmar-Nicholls, L.	Trefgarne, L.
Hornsby-Smith, B.	Trumpington, B.
Hylton-Foster, B.	Vivian, L.
Kemsley, V.	Wakefield of Kendal, L.
Kinross, L.	Wise, L.
Kitchener, E.	Young, B.
Lane-Fox, B.

Resolved in the negative, and amendment disagreed to accordingly.

6.31 p.m.

Lord Evans of Claughton moved Amendment No. 20: Page 6, line 39, at end insert (" and any grant thus removed from any local authority shall be redistributed to all other authorities ").

The noble Lord said: My Lords, as I think is perfectly clear from its wording, this amendment seeks to ensure that if any authority or authorities have suffered a loss of grant because of holdback or for whatever reason, instead of the money being returned to the Government's coffers it should be redistributed to all the other authorities, thereby encouraging authorities that keep within the rules and regulations to do so because they would benefit in the long run by obtaining grant withheld from other authorities. In other words, I am suggesting that once grant has been allocated, it should remain within the local authority pool and not be extracted and returned to Government coffers. I beg to move.

Lord Bellwin

My Lords, I, too, shall not say too much about this because, as I am sure the noble Lord recognises, the amendment strikes not only at the heart of the holdback proposals but at the Government's duty under Section 54 of the 1980 Act to determine the aggregate amount of rate support grants. As I said a few moments ago on another amendment, this is one area where there can be no doubt about the Government's overriding responsibility, for it is here that the potential conflict of interest between ratepayers and taxpayers is most obvious and where, as I said before, no responsible Government could abandon their duty to fix and, if necessary, to redetermine the overall level of grant support.

At first glance the amendment looks not unattractive; that is, for the grant withheld from overspending authorities to be redistributed as, if you like, a welcome windfall to the majority who have gained protection from holdback. But there is another side to the coin; the fact is that holdback is necessary because the country cannot afford to subsidise excessive levels of total expenditure. Therefore, it starts from the need to reduce the aggregate amount of grant.

The amendment would make it impossible to use Clause 7 in the one circumstance which it is designed to meet—when it can be used to make sure that as far as possible those responsible for the excessive levels of spending suffer the consequences of an overall reduction in the grant aggregate. I am surprised if that is what the noble Lord, Lord Evans, really wants here. I did say—did I not?—a few moments ago that, by and large, some 260 or more authorities do their best to work within the guidelines. It is only a few—some of the balance of the authorities do not go very far over—who go excessively over. Why on earth the others should, if you like, have to bear the brunt of all that, I just do not know.

Perhaps more important in the context of this particular amendment is the point that the Government simply set out what they say, and do this whole thing because they believe that this is all the country can afford. That is what holdback is about. There is the differential point, but this amendment directs itself to the principle of the totality of the spending, and that is why we are unable to accept this amendment.

Lord Evans of Claughton

My Lords, I must say that that does not come as an entire surprise to me. I felt that I was probably tilting at a windmill, but I still think that the money that has been allocated to local government expenditure should be used in local government. I understand the Minister's point, and I shall not detain your Lordships' House any longer, because I suspect that there is still quite a large number of more controversial amendments to come. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.36 p.m.

Lord Evans of Claughton moved Amendment No. 21: Page 7, line 5, leave out (" 1981 ") and insert (" 1983 ").

The noble Lord said: My Lords, dealing with a very important principle, I believe that this is a very much more serious and important amendment than the previous amendment that I moved, because its purpose is to delay the possible use of holdback from 1st April 1981 to 1st April 1983. It is to prevent the use of retrospective legislation, about which many of your Lordships feel very strongly, which my party has a record of opposing going back very many years, and which to most people in a democratic society is an abhorrent, discriminatory and unfair kind of legislation. In my belief it is calculated to undermine the forward planning of local authorities and their financial management. So think that the present legislation is particularly abhorrent in that it introduces this element of "retrospectivity" and uncertainty to local authorities.

It is also particularly important as all block grant for the year 1981–82 has already been paid to local authorities; they have actually received it. So if holdback is to be used for that year, then the grant penalties for the year 1981–82 will, as I see it, have to be deducted from the local authorities' 1982–83 block grant entitlement. In addition to any holdback for 1982–83—the financial year in which we arc now, and in respect of which local authorities will have already set their budgets and sent out their rate demands—it seems that in 1981–82 and 1982–83 they will be open to the imposition of penalties for which they will not have the protection of the procedures set out in subsections (2) and (7) of the clause, which will have to be gone through in subsequent years. So for 1981–82 the money has already been distributed; for 1982–83 the budget has been set and the rate demands have gone out. In those two years the very detailed and complex procedures, from which local authorities will benefit in subsequent years in subsections (2) and (7), will not he available to local authorities for those years.

In all fairness, I should have thought that this amendment would get rid of "retrospectivity" (if there is such a word, and I think there is) and would also enable local authorities to deal with their forward planning with more certainty; their financial management would not be subject to the tremendous uncertainty in which the legislation for those two years will leave them, without the protection given for subsequent years. Therefore, it seems to me that this is a reasonable amendment. I beg to move.

Baroness Birk

My Lords, I should like to support the amendment which has just been moved by the noble Lord, Lord Evans. It is this wretched retrospection which is again involved, and very clearly so. By accepting this amendment retrospection would be taken out of Part II. At present we have it running through Part I and Part II. This is all that the amendment seeks to do. I would add my plea to that of the noble Lord, Lord Evans, that the Government give this amendment a favourable hearing.

Lord Bellwin

My Lords, this amendment too, on the face of it, is very straightforward and it would mean, as the noble Lord, Lord Evans, said, that holdback could not be implemented for 1981–82 or 1982–83. May I preface the relatively few remarks I want to make on this by saying yet again that the Government's position is clear. We cannot turn away from the overspending in those two years, 1981–82 and 1982–83: the amounts in question are just too great. Furthermore, as I have been saying on the last two or three amendments, without the powers to implement differential holdback provided by Clause 7 the Government would be forced by the general economic situation and the action of some authorities to implement an across-the-board holdback scheme. This would affect all authorities regardless of their individual performance. I say again that I cannot believe that this is what most authorities want.

So far as 1981–82 and 1982–83 are concerned, may I only say that although the Bill has not yet been enacted we have always abided by the spirit of the limitations which Clause 7 will impose. There has been full consultation with authorities. All the exemptions proposed for 1981–82, including the GRE exemption, were introduced following representations from local authorities. On this matter of retrospection, although there was no statutory requirement to publish details of holdback in the rate support grant report, my right honourable friend the Secretary of State for the Environment warned authorities before —and this is the point—they set their rates for 1981–82 that there might have to be a holdback scheme if they over-budgeted. He spelt out in detail what that might mean for individual authorities when he called for revised budgets in June 1981. For 1982–83 he published in December 1981, at the same time as the settlement, full details of the differential holdback scheme he proposes to implement in England.

There is no reason why we should not accept the proposals that have been made for 1981–82 and 1982–83. They are fair. They have been developed in the light of representations which have been made to us, and they have been spelt out in sufficient time to allow their effect to be taken into account by authorities when determining their budgets and settling their rates. This is why we are not able to accept the amendment. I hope that the noble Lord, Lord Evans, will accept that from me, and perhaps not wish to press this amendment.

Lord Evans of Claughton

My Lords, my heart sinks whenever I hear the noble Lord the Minister say, "I have some sympathy for the amendment that the noble Lord is moving ", because then 1 know that it is all up. I should like to thank the noble Baroness, Lady Birk, for reminding me that the correct word for retrospectivity is "retrospection", and not this new word that I invented in my speech just now, but I am so overcome by emotion about this that I occasionally lose the mot juste.

I should like to think about what the noble Lord the Minister has said. I appreciate that local authorities have had warnings. I accept that. I think that the noble Lord probably appreciates the abhorrence which I, and I am sure many other noble Lords, have for the concept of retrospective legislation, but I should like to think about this matter again. I do not wish to divide the House, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 22 not moved.]

Baroness Birk moved Amendment No. 23: Page 7, line 9, leave out (" or 1st April 1982 ").

The noble Baroness said: My Lords, this amendment refers to subsection (11) of Clause 7. This plumbs new depths of retrospection, which is the point we are on. I would not have thought that one could do that. It is trying to find some other phrase for dealing with this awful spectre of retrospection that runs through this Bill.

The guidance on expenditure for the purposes of this Bill appears to include anything that the Secretary of State might have said even before the Bill was drafted.

We have had a lot of discussion about the years, and we recognise that the year 1981–82 has now ended, and we also accept that it would be churlish to make the Secretary of State go around consulting local government and issuing fresh guidance. Our amendment does not affect 1981–82; it is 1982–83, and that is a different matter. The year is just over two months old. It is certainly not too late for the Secretary of State to hear representations about what authorities feel, if they do so feel, is the unreasonableness of the 1982–83 targets. All this amendment seeks to do is to make him go through that process for the year 1982–83. I beg to move.

Lord Bellwin

My Lords, I am sorry that the noble Lord, Lord Evans, is not in his place, because I should like him to have heard me say that this is one amendment for which I do not have sympathy, and which does not appeal to mc. Yet again I feel I have to remind your Lordships that the Government amendment was a correction of a drafting error, or, more accurately, an error that arose as a result of the passage of time since the clause was first drafted. Subsection (11) of the clause provides that references to guidance are to include references to guidance issued before the passage of the Act. The Government amendment agreed by the Committee extended this provision to include the guidance issued in relation to 1982–83, which was actually issued last February. The amendment now before us would take us back to the position whereby references to guidance issued before the passage of the Act referred only to that issued in respect of 1981–82.

I am happy to see that the noble Lord, Lord Evans, is now in his place, and therefore to be able to tell him that although I cannot accept this amendment I do so without sympathy for it, and I am sure that the noble Baroness fully understands that.

Baroness Birk

My Lords, in view of the time and the Chief Whip's beady eye on me, and so that I can look at it again, I beg leave to withdraw this amendment in order to have a chance to think about it and perhaps take it further on Third Reading.

Amendment, by leave, withdrawn.

Lord Denham

My Lords, I think that this is the time that we agreed that we should go on temporarily to the next business. Although we have other business in the dinner adjournment, it is probably useful if I say that we will not recall the House to this particular Bill before 8 o'clock. I beg to move that further consideration on Report be now adjourned.

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