HL Deb 10 May 1982 vol 430 cc8-61

2. 57 p.m.

Lord Bellwin

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Bellwin.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 1 [Limitation of rating powers.]:

Baroness Birk moved Amendment No. 1: Page 1, line 7, at beginning insert ("Except as provided in subsection (4) below").

The noble Baroness said: Before I move this amendment I think that there is something I must say by way of protest. The Government have tabled a number of very complicated amendments which we had sight of (those of us who managed to be here) only on Friday morning. During the Second Reading of the debate the Minister very clearly and frankly said at col. 627: Before I move on to Part II of the Bill, your Lordships may be aware of the commitment made by the Government during the course of the Bill's Committee stage in another place to bring forward amendments to clarify the position of rating and precepting authorities, and of ratepayers, in the light of the complicated rating issues which were raised by this House's ruling in the GLC/Bromley case. He went on to say: I will be tabling the necessary amendments in good time for our discussion in Committee of Part I of the Bill". I must put it to the Minister, although I do not think for a moment that it was his own personal fault, that it is extremely difficult, with Government amendments of this complexity and importance, to have them available only on Friday—while most of us have seen them only today.

Having said that, I now move the first amendment that stands in the name of my noble friend and the noble Lord, Lord Evans of Claughton. The purpose of this amendment is to try to deal with a situation which was raised—I remember raising it myself—on Second Reading where a local authority has to deal with emergencies of different kinds and would, as the Bill stands, be prohibited from doing so without either getting express permission and a grant from central Government, via the Secretary of State, or having the opportunity to borrow money, which is going to become more and more difficult for local authorities.

In moving this amendment, with the Committee's permission, I should like to speak to Amendment No. 12 as well. These amendments would give power to a local authority to make a supplementary rate or precept in cases where emergency expenditure is required or expected income is significantly reduced. This is extremely important for several reasons. First, in the past year alone we have witnessed a number of severe natural and also man-made disasters from flooding, snow and rioting. We are also going to see local authorities having to undertake a great deal of extra preventive and other expenditure if the Pope's proposed visit takes place to this country. The cost to local authorities is going to be very considerable in those places which the Pope will visit. In other years, we have seen on the coast that sea defences have been broken.

When exceptional expenditure has been incurred by local authorities affected by such events, they have had to go cap in hand to the appropriate Government department to seek financial assistance. Such assistance is by no means certain and depends on a number of variables which are not always relevant to the predicament in which the local authorities find themselves. Sometimes the extra assistance is not forthcoming at all. As a result of the Government's economic policies, local authorities—as we are well aware—are also experiencing significant reductions in anticipated income. Examples of losses of income in this category are as follows: reduced rateable values —for example, where steel mills and aluminium smelters are being closed and where other industrial projects have been discontinued; falls in the numbers of those able to afford school meal charges and a reduction of course, in the employees concerned; reductions in the numbers of bus passengers, causing a drop in fare income on buses; reduced income from trade waste. Leisure facilities have been affected. For example, some local authorities have found it difficult to use swimming pools. Where they had plans to build them, they have now found it impossible to do so.

Therefore, with expenditure rising, with cuts in public expenditure and with their disposable income being reduced, local authorities are being put in a far greater squeeze than ever before. The power to levy a supplementary rate in exceptional circumstances such as those I have outlined—but they are by no means definitive—would allow local authorities to react to local needs. Local authority members, I suggest, are in a much better poition to assess local needs than central Government and could react more sympathetically and more quickly, and, in the end, more economically to local circumstances.

This is not to say that local ratepayers should be called upon to meet all the cost of emergencies or loss of income in their own areas. Government grants will normally be forthcoming, one hopes, either through block grant or as special additional grants related to emergencies. However, this will not normally cover the full cost of the emergency, as we have seen happening on various occasions during the year, particularly in the aftermath of the riots in London and Liverpool. The power to levy a supplementary rate in these circumstances would be well understood and appreciated locally and would enable the local community to help itself in the way and to the extent that it thought best. I beg to move.

Lord Evans of Claughton

We entirely support the amendment which noble Baroness has so ably moved. It should be underlined that the levying of supplementary rates up to the point of this Bill has been perfectly legal and has been very rarely used. That ought to be underlined. It is not as though local authorities have been wildly creating supplementary rates year in and year out. It has been a very rare occurrence. I suggest that in the future it will remain such, particularly if the limited rights that the noble Baroness mentioned are granted.

One is very conscious of the type of problem to which she refers. We in Merseyside have been particularly the victims of disasters and have been required to spend unexpected sums of money as a result of rioting. There has been a loss of passenger transport users and we have been the subject of a great number of closures of factories and commercial premises. As a result, there has been a great loss of income. Merseyside, and many urban areas of that kind, are particularly exposed to the special difficulties that might arise with a problem of the nature that we are discussing.

In my opinion, the power would not be used irresponsibly, because, if it were, the ratepayers, quite properly, would react. It is very important that there should be this reserve power in the case of the extreme emergencies of the kind that the noble Baroness mentioned. No doubt it will be argued by the Government that if there are exceptional expenditures of this kind they will be met by grants from central resources. But we all know that when there are grants given after riots and that kind of occurrence, the grants are never sufficient to cover the full cost that they have occasioned. Consequently, if local authorities are to maintain their responsibility for local crises and local problems, this is a very important amendment which should be carried and which will improve the Bill.

3.8 p.m.

Lord Leatherland

I feel that the Bill is taking the wrong line. We read from day to day about wage rises. Usually they can be looked forward to but sometimes they are bigger than expected. We also have to bear in mind the possibility of rises in the rate of interest. The payment of interest on loans is a very, very big item in the budgets of local authorities. I feel that it would be a mistake to prohibit this supplementary rate. If the Bill's proposal is adopted it will mean that councils at their annual budget meetings will fix their local rates at a higher level than would otherwise be the case. If they are prohibited from introducing a supplementary rate during the year then they must budget for the very worst outlook that exists at the time of the budget.

If the accounts of the council result in a surplus, this cannot go back to the ratepayers. Any surplus on a year's revenue account of a local authority has to be transferred immediately to the capital account. So the immediate result to the ratepayers is that they are suffering. I feel therefore that it would be better to leave matters exactly as they are. I had to encounter consideration of this question in earlier times when I was finance committee chairman of one of the biggest county councils in the country. Therefore I feel I know what I am talking about on this occasion.

Lord Bellwin

I assumed that we would be speaking to a number of amendments because so many are very similar, but as the noble Baroness specifically stated she was covering Amendments Nos. 1 and 12 I will do the same and reserve my observations on others, because I think the points may come in a little later. In the main the noble Baroness spoke about her concern for emergencies that can arise. I understand the cause of the concern: for example, the bad weather last winter did much damage and authorities were put to considerable extra work, but as far as is known no local authority has ever levied a supplementary rate or a supplementary precept to finance expenditure dealing with an emergency caused by bad weather. Moreover, Scottish local authorities—and they are not without their share of climatic difficulties and the ensuing problems—have managed quite adequately without any power to levy supplementary rates.

Faced with the need to find money quickly for unforeseen items of expenditure within the year, local authorities normally rely on revenue balances or allowances they have made for contingencies in fixing the main rates, or they rely on temporary borrowing in anticipation of revenue due in the same financial year, or a combination of all these sources, all of which will continue to be available after the Bill comes into effect. In any case, if any local authority wished to borrow temporarily to finance unforeseen items of expenditure during the year they would be able to seek the Secretary of State's consent to do so. My right honourable friend the Secretary of State has made it clear that consent will be given in cases of genuine emergency, on condition that the money borrowed is repaid out of revenue income within the quarter of the following year.

For 1981–82, any authority forced to spend more than the product of a 1p inclusive rate on emergency work made necessary by adverse weather conditions can claim specific Government grant totalling up to 75 per cent. of the net additional expenditure. This scheme is similar to schemes operated under a Labour Administration in 1977–78 and 1978–79. Under those earlier schemes, claims were submitted by seven local authorities in 1977–78 and there were 16 in 1978–79. Special assistance was offered under a similar scheme in 1979–80 but no claims were submitted.

As regards the cost of riot damage last year, I appreciate this could not have been foreseen, but central Government is bearing 60 per cent. of the cost, some £16 million out of a total of some £26 million falling on local authorities. I do not know whether your Lordships are aware that my right honourable friend the Home Secretary is currently reviewing the Riot (Damages) Act of 1886 to see whether anything needs to be done about that.

Referring to unanticipated losses of income on which the noble Baroness touched, there are a number of reasons why a local authority might lose income it has expected to receive, but perhaps that is one of the parts of this debate in Part I that we might come across later. The noble Baroness specifically referred to authorities suffering a loss of income as a result of a sharp decline in rateable value, for example, presumably as a result of the closure of a factory or plant. Normally the grant system compensates for rateable value deficiencies but in England this does not flow through until the following year because the rateable value data used in the grant calculations, though revised annually, are frozen for the whole year. There is thus the potential for a sharp and uncompensated loss of income by an authority for part of the year until the new data come into effect.

The problem could be overcome by unfreezing the data, thus allowing mid-year revisions to an authority's rateable value and hence to its grant entitlement. Indeed, I understand this happens in Wales. The Government are quite prepared to consider this, but traditionally this is a matter on which they are guided by the views of local authority associations, and in England they favour keeping the data frozen because they provide greater certainty for local authorities' grant entitlements generally. This is a subject on which there is clearly a difference of opinion: it is a party political difference, I think.

The noble Baroness said that the amendment would allow local authorities to react to local needs. I would just pick up the point made by the noble Lord, Lord Evans, when he said how infrequently this power was used in the past. One can use that argument either in support of the amendment or against it. I would use it very strongly against it because, as I have said before to your Lordships, in all the years I was in local government I knew there was such a thing as a supplementary rate but we never ever contemplated it at all. It was just one of those things that one knew existed. But when you come to fix your rate at the beginning of the year it is quite true, as the noble Lord, Lord Leatherland, said, that you take into account likely movements in interest rates—they may well go up as well as down during the year—and you take into account the Government's suppositions about inflation on which they have given their grant. You come to your own conclusions and decide the rate, but it does not follow that you make it higher. You put into contingencies those elements which cover the kind of possibilities you fear may come about. That is what you do and that is how you do it. One does not say: "We had better rate higher than that because, if we do not, we may get caught out". The fact is that you may well get caught out the other way because interest rates can come down as well, and often do.

I can remember that, when first charged with budgeting on this very point, I tried to find out how accurate had been the forecasting by the officers in the past, so I took 10 years as a sample to see how accurate the various forecasts of interest rates and so on had been. I found that in nine years out of ten they had overestimated. They were prudent and thought they were being wise. But in the main that is where you put your allowances to cover what may happen, and certainly you never contemplate supplementary rates; so I do not think it needs to be a factor in any way as to how you fix the rates.

The noble Lord, Lord Evans, said that if there were this power it would not be used irresponsibly, but of course the whole reason why it is here in this Bill now is that the power has been used irresponsibly. It was never used for years, as I have said, but during the last year or two the fact is that a number of authorities have decided to use it, and to use it so as to increase their spending, against the Government's specific wishes. That is again something that brings into question the whole of the central and local government relationship. I am as sad as anyone that this should have to be so, but no Government are going to stand by and see this ignored in the way that has happened in the past.

Therefore, with only one more observation to make, I would say to the noble Baroness that the Government cannot accept these amendments. The one example I would give is that if this is going to cause the problems that she envisages, I would refer her to Scotland, where they have not had this power before and it has not led to problems of this kind there. So on all counts, as your Lordships will gather, the Government are strongly opposed to these amendments.

Lord Bruce of Donington

We on this side are a little disappointed with the noble Lord's response to the very reasoned arguments put forward by my noble friend and also by the noble Lord, Lord Evans of Claughton. The noble Lord addresses himself to this amendment with an air of almost injured innocence. He looks back nostalgically on the days when there was no such thing as a supplementary rate, and indeed, the noble Lord, Lord Evans, referred to this specifically.

What has been the change? The change has been the attitude of his right honourable friend the Secretary of State towards local authorities and, indeed, towards local authority spending. Under the auspices of his right honourable friends, grants to local authorities—central Government support—have been progressively cut down, at the same time as the demands on local services have been rising, partly as a result of the increase in the cost of the performance of their statutory obligations under conditions of inflation which, in spite of three years of the dubious blessings of Her Majesty's present Government, still remains at slightly above what it was when they took over. Moreover, owing to the industrial devastation which they have caused throughout the country, and in some of the big cities in particular, the rateable income from industrial properties has progressively declined. Therefore, local authorities have been faced with the job of performing their statutory and local responsibilities under conditions of ever-increasing stringency.

It is no answer to my noble friend to say that there have been a number of irresponsible local authorities. We on this side are just as much in favour as anybody else of proper economies and the elimination of waste in the provision of all local authority services. But we are bound to note that much of the reaction that has proceeded from certain local authorities, who have been grievously struck by the economic and monetary policies of the Government, has been against the harsh and uncompromising attitude of the noble Lord's right honourable friend the Secretary of State. In subsequent amendments, some references will be made from, I think, all sides of the Chamber to the growing tendency, particularly under this Government, of arbitrary restrictions being placed on the powers of local authorities, and since the argument will arise in its acute form then I shall refrain from enlarging upon it here.

But as the noble Lord, Lord Evans of Claughton, pointed out—and we might do well to remember it—if local authorities behave irresponsibly, then the electors of the authorities' areas have a right and an opportunity of changing the councils' policies by changing their political complexion, and this is what has happened in the case of various local authorities. Sometimes, local electors and some substantial ratepayers have chosen—and chosen quite deliberately—in spite of the insidious propaganda that all public expenditure is essentially evil, to elect back to office those whose deliberate policy, upon which the electorate has had a chance of voting, has been to increase public expenditure on services in the locality, at levels determined by the councils themselves, after consultation with all interested parties and, indeed, contact with the electorate.

At other times, it has gone the other way. Sometimes, localities have had the dubious pleasure of changing the policy the other way and it has been decided by a majority of the electorate to restrict and, in some cases, to cut back local expenditure. But in all cases the decision has been made by the electorate under conditions which, mainly owing to the climate of social opinion that is determined largely by the media, have been favourable to the arguments put forward by the party opposite.

All one is asking for here, and asking for reasonably, under the conditions that are laid down in Amendment No. 12, is for a local authority, without having to have recourse to borrowing at interest rates at the exorbitant levels that have been very largely determined by the party opposite, to be able to make proper revenue provisions. Indeed—and we shall return to the theme in more detail later, because it is not suitable for this amendment—the present policy seems to be to deny a local authority the exercise of its ordinary democratic right, and to substitute the centralised direction from the state which is so vehemently put forward by the noble Lord's right honourable friend. Therefore, we hope that this amendment, which has been put forward in good faith and with adequate explanation by my noble friend, will commend itself to noble Lords on all sides who believe in local democracy and in the exercise of powers through local authorities.

Lord Mottistone

If I may help my noble friend, it seems to me, despite the honeyed words of the noble Lord, Lord Bruce of Donington, and other spokesmen opposite, that, bluntly, this is a wrecking amendment. It is against the principle of the Bill, it does nothing at all about democracy and I do not think it commends itself to anybody. My noble friend made a very good case and that is where the matter should rest.

Lord Bellwin

Just very briefly, may I say in reply to what the noble Lord, Lord Bruce, said about the increased cost of statutory provisions, that I am sure he knows that the levels of statutory provisions are very flexible indeed. They are really for interpretation by individual authorities, and I assure the noble Lord that many authorities interpret them in very different ways. He said, not unfairly, that the local electorate can give a view on an authority's performance and, in theory, that is right. I should be much happier, so far as rates levels and services are concerned, if the people who pay 60 per cent. of the rates—industry and commerce—had a vote of some kind which was meaningful. Unhappily, they do not and therefore, to some extent, it diminishes the case for that.

The noble Lord also asked why we do not accept that authorities should be allowed to make proper revenue provision. But there is nothing whatsoever in these proposals that in any way prevents them from making proper revenue provision. All we are suggesting is that they make provision in the right way, which is by contingencies, in the same manner as they always did in the past, until it was felt by some authorities that they wanted to overturn the previous administration's rates and come in on top and charge everybody more. We are very much concerned about the effects of that on the ratepayers; and, as my noble friend Lord Mottistone said, in the context of the ban on supplementary rates that we are proposing in this Bill, we could not accept these amendments, which would drive a coach and horses through the Government's efforts to combat inflation and to protect ratepayers from unexpected demands for supplementary rates part way through the year.

Baroness Birk

I am glad that the Minister thought his noble friend Lord Mottistone was such a help to him. It seemed to me that he was not. He called this a wrecking amendment. I do not think that the noble Lord can have read it very carefully because the amendment makes it quite clear that this is in order to raise revenue to meet expenditure incurred or to be incurred in the exercise of powers under Section 138 of the Local Government Act 1972 (measures with respect to emergencies or disasters) or under the Riot (Damages) Act 1886. I shall not read any more of the amendment because I am sure that the noble Lord will have great pleasure in reminding himself of it when he reads it.

The answer which the Minister gave is completely unconvincing. His argument was: because supplementary rates are levied so seldom, why not get rid of them? Surely the right way to look at it is the other way round: if they are there to be used but will, according to the amendment, be restricted in their use in this way, then why not leave them alone? The noble Lord talked about what happened in the past, but he was talking about a completely different local government ball game. Local authorities are being squeezed very hard. As we heard from all sides of the House on Second Reading, the Minister got very little, if any, support, for the Government's case. His noble friends were asking him to change the Bill all the way through. So there is a difference in the money which local authorities are receiving. There is a difference in their disposable income, some examples of which I pointed out. The Minister's answer was that the problem could be overcome by unfreezing the data. Perhaps we can look at that, but it is not the answer when we are in the middle of dealing with a Bill of this kind which relates to supplementary rates.

The important point is that local authorities are highly disenchanted—that is a great meiosis—with the Government's attitude towards them. They see it as another way of strangling the life out of them and of again bringing everything back to central Government. There is lack of understanding—not understanding, even, but appreciation or acceptance of this point. My noble friend Lord Bruce of Donington was absolutely right when he said that the Secretary of State is anxious not to let a single inch go. It is a complete obsession. We saw it in the case of the Housing Bill and in the case of every other Bill to do with local government. This is how authorities throughout the country, whether they are Labour, Conservative or Liberal authorities, feel. They feel that local authority life is being squeezed out of them. Since the Minister was unable to give a satisfactory answer and was not prepared to consider this amendment at all, I must ask the Committee to divide upon it.

Lord Bellwin

Before the noble Baroness sits down, she said that we are in a new ball game—that local government is now being squeezed. I should like to remind her of Circular 45/1976, under which the then Labour Government imposed upon local government the instructions of the International Monetary Fund: a cut in expenditure—an immediate cut—of 3 per cent. within that one year. If that was not being squeezed and if it was not the same ball game as the noble Baroness thinks we are in now, I do not know what is.

Baroness Birk

Of course it was a squeeze then, and it was tied to the national economy, as it is now. But since then we have had cuts on that cut. Local authorities today are very much worse off. If he can do so, let the Minister tell me where services have not been cut almost to the bare bone: the education services, the social services. Let him try to prove that they were worse off in those days than they are today. It is getting worse and worse. The noble Lord knows that as well as I do.

Lord Bellwin

The noble Baroness had better try to prove that they are better off as a result of the extra rates which are being charged.

Lord Harris of Greenwich

If the noble Lord, Lord Bellwin, and the noble Baroness, Lady Birk, will forgive me for intervening in this extremely interesting series of exchanges between them, may I raise one or two slightly broader questions and explain why my noble friends and I will be voting for this amendment, though without necessarily the same degree of enthusiasm as the official Opposition? Most of us recognise that there is a real problem.

First, the noble Lord, Lord Bellwin—who always speaks with great fairness in this House—rather overstated his case, as did his noble friend behind him, when it was suggested that there were going to be very substantial economic effects one way or the other if this amendment was or was not carried. The effect of this amendment, were it to be passed or rejected, would be fairly marginal, for the simple reason that the number of occasions upon which supplementary rates have been imposed in the past has been very limited in number.

Secondly, if the noble Lord, Lord Bellwin, will forgive me for saying so, I was surprised to hear him use the argument about the instructions of the International Monetary Fund in 1976. I have had the pleasure of listening to Mr. Wedgwood Benn using that argument and I find it mildly surprising to hear it coming from the Government Front Bench. Having had some dealings with the matter in the past, may I say that the International Monetary fund, as the noble Lord, Lord Thorneycroft, will probably confirm, does not give instructions to British Governments about the way in which they should handle local authority expenditure in the way that the noble Lord, Lord Bellwin, seems to imagine.

On the broader question, may I make two points: First, the noble Lord, Lord Bellwin, has for the argument he has put this afternoon one justification with which I agree. I believe that there is a very different type of local authority now existing in some areas of this country. These authorities are composed of people some of whom do not have a great deal of enthusiasm for parliamentary democracy and who are hankering for confrontation with central Government. Like the noble Lord, Lord Bellwin, in the past I, too, had the fortune of being a member of a local authority. When I was the leader of the Labour group on that authority, although we had major disagreements with the Conservative Government when they were in office the idea that we were going to spend the whole of our time trying to undermine the elected Government of this country would have been regarded with astonishment by the overwhelming majority of my colleagues on that authority

Unhappily, that situation now arises, as we all know perfectly well. There are examples which we can see in the Greater London Council, in Lambeth and in quite a few other authorities where people are being elected to those authorities who see this as a way of pursuing some form of pan-Marxist revolution. This is a real issue and it creates real problems for the Secretary of State, be he a Conservative or a Labour Secretary of State, or the Secretary of State of any other party. There is a new problem and we have to recognise it as such.

But where both the present Government and the present official Opposition are in total agreement in this debate—this matter has not yet been raised today, but it has been raised before in this House—is in maintaining a local authority voting system which encourages precisely what they profess to object to. If we look at the local authority election results in most of the London boroughs, with the very small exception of a few boroughs in the East End of London and one or two, I suspect, on the fringes of London in the opposite direction, the fact is that the overwhelming majority of the people who voted, voted against the party which is now in control of those boroughs.

If the noble Lord, Lord Bellwin, and his colleagues and other members of the Committee are disturbed by what is going on in local government, as I believe they have every right to be, I very much hope they will pay some attention to the voting system in local government which is just as objectionable—indeed, in some respects far more objectionable—as it is in central Government.

Baroness Fisher of Rednal

I think that the last speaker exaggerated what he said about local government. It is very easy to pick out two London boroughs and speak as though they are representative of local government throughout the country. As the noble Lord is fully aware, I come from the Birmingham local authority, with a great deal of experience in that city. Birmingham was one of those cities which decided to charge lower bus fares within the confines of the West Midlands public transport area. By no stretch of the imagination was that local authority Marxist or anything like that. For us to use such arguments to put over the power of changing the voting system is, with all due respect to the noble Lord, Lord Harris of Greenwich, a little unfair.

As my noble friend Lady Birk rightly said, this is a different ball game. In the inter-war years, it was very often local government which set the pace. Central Government took up local government ideas and helped them along with the finance, because it was local government ideas which were being brought forward more and more. It is quite understandable that local authorities now find that they are not in that position; that they cannot be the innovators any more, because they are curtailed by all kinds of financial limitations. This makes them have to think seriously—and I accept that local government have to work within the confines of the economy—because if local government want to introduce a new service or extend an existing service, they can only do so by cutting back services already in operation. Central Government are persistently asking local government to cut back their number of employees, but this can only be done to a certain level. One must have a certain number of people to look after elderly person in social services' homes; one must have people to teach the children; and one must have people to undertake other social services. There is, therefore, a limit to the number of people to which one can cut back in local authorities.

I do not know whether I heard the noble Lord, Lord Bellwin, correctly when he spoke of the cost to industrial ratepayers. I have in front of me the City of Birmingham's budget, 1982–83, which shows that 38 per cent. of the money which the Birmingham local authority gets comes out of the rates. Of this 38 per cent., domestic ratepayers are paying 16 per cent. and industrial ratepayers 6 per cent. I would not have thought that the deputy city treasurer and the chief executive officer of the Birmingham local authority would issue figures like that in a publication which goes to the press unless they were correct. I would not have thought that they would publish anything which is incorrect. I will pass this document to the noble Lord, Lord Bellwin, afterwards, if he thinks that I cannot read, but the budget states quite clearly that domestic ratepayers pay 16 per cent., commercial ratepayers 10 per cent., industrial ratepayers 6 per cent., other ratepayers 4 per cent., and nationalised industries 2 per cent. That makes a total of 38 per cent. of the 100 per cent. rates which the city obtains from various types of ratepayers.

More often than not, when the domestic ratepayer is being levied a higher charge, I do not believe there is as much grumbling about the increased rate or supplementary rate that might be raised as there is about services not being provided. If any of your Lordships stand in bus queues when there is a gap of three-quarters of an hour between each bus, you will know that there is always much more grumbling about that—or when a 20-minute service is cut to a 35-minute service. If local government must continue to provide those services with a cutback from central Government, it behoves us to let progressive local authorities have the power to levy a supplementary rate, if they need to do so.

3.45 p.m.

Lord Bellwin

I am absolutely certain that the noble Baroness, Lady Fisher of Rednall, is not wrong about the figures she has read out—but in her interpretation of them she is absolutely wrong. The fact is that industry and commerce pay an average percentage rate throughout the country of about 60 per cent. of all the rates which are paid. The noble Baroness has quoted a figure of 6 per cent., but she may be looking in the wrong column or on the wrong page.

Baroness Fisher of Rednal

It is shown on a big graph.

Lord Bellwin

I do not want to go on at length about that point, but we will go into it later on, I am quite sure. I do not want to go on at length about this amendment, because we are slowly moving into other areas which are completely off the subject. The subject of this amendment is really supplementary rates. I will make only one brief observation, which is to say why both my noble friend Lord Mottistone and I feel that this is indeed a wrecking amendment that does drive a coach and horses through the Bill—despite what was said by the noble Lord, Lord Harris of Greenwich. Paragraph (c) of the suggested new subsection (4) would allow local authorities to continue to raise a supplementary rate or precept, for any and I quote: "unanticipated loss of income". That is so wide that clearly it is impossible, in view of what has happened, not in years gone by, but in the last year or two. This is a safeguard that we are bringing about for ratepayers who cannot accept the unanticipated burden which could come upon them suddenly for whatever reason. That is why I strongly oppose the amendment.

3.47 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 60; Not-Contents, 98.

Amulree, L. John-Mackie, L.
Ardwick, L. Leatherland, L.
Bacon, B. Leonard, L.
Banks, L. Listowel, E.
Beaumont of Whitley, L. Llewelyn-Davies of Hastoe, B.
Birk, B. Lovell-Davis, L.
Bishopston, L. [Teller.] McCarthy, L.
Blyton, L. Mais, L.
Boston of Faversham, L. Mayhew, L.
Briginshaw, L, Noel-Baker, L.
Brockway, L. Oram, L.
Bruce of Donington, L. Paget of Northampton, L.
Burton of Coventry, B. Peart, L.
Byers, L. Phillips, B.
Caradon, L. Plant, L.
Collison, L. Ponsonby of Shulbrede, L. [Teller.]
Crowther-Hunt, L.
David, B. Sainsbury, L.
Davies of Leek, L. Stedman, B.
Denington, B. Stone, L.
Donnet of Balgay, L. Strabolgi, L.
Evans of Claughton, L. Strauss, L.
Fisher of Rednal, B. Taylor of Mansfield, L.
Foot, L. Underhill, L.
Gosford, E. Wallace of Coslany, L.
Hall, V. Wedderburn of Charlton, L.
Hampton, L. Wells-Pestell, L.
Harris of Greenwich, L. White, B.
Howie of Troon, L. Wigoder, L.
Jacques, L. Wootton of Abinger, B.
Jenkins of Putney, L.
Ailesbury, M. Alport, L.
Alexander of Tunis, E. Ampthill, L.
Allerton, L. Auckland, L.
Avon, E. Lucas of Chilworth, L.
Belhaven and Stenton, L. Luke, L.
Bellwin, L. Lyell, L.
Beloff, L. McFadzean, L.
Blake, L. Mackay of Clashfern, L.
Campbell of Alloway, L. Macleod of Borve, B.
Campbell of Croy, L. Mancroft, L.
Cathcart, E. Margadale, L.
Clwyd, L. Marley, L.
Constantine of Stanmore, L. Massereene and Ferrard, V.
Cottesloe, L. Mersey, V.
Craigton, L. Morris, L.
Cullen of Ashbourne, L. Mottistone, L.
Daventry, V. Mowbray and Stourton, L.
Davidson, V. Murton of Lindisfarne, L.
De Freyne, L. Norfolk, D.
Denham, L. [Teller.] Northchurch, B.
Derwent, L. Nugent of Guildford, L.
Dilhorne, V. Orr-Ewing, L.
Drumalbyn, L. Pender, L.
Dudley, B. Penrhyn, L.
Duncan-Sandys, L. Porritt, L.
Effingham, E. Rankeillour, L.
Ellenborough, L. Robbins, L.
Elles, B. Saltoun, Ly.
Ely, M. Sandford, L.
Enniskillen, E. Sandys, L. [Teller.]
Glenkinglas, L. Savile, L.
Gore-Booth, L. Sempill, Ly.
Gormanston, V. Skelmersdale, L.
Gridley, L. Somers, L.
Grimston of Westbury, L. Spens, L.
Hailsham of St. Marylebone, L. Stamp, L.
Strathcona and Mount Royal, L.
Halsbury, E.
Hastings, L. Strathspey, L.
Hill of Luton, L. Sudeley, L.
Home of the Hirsel, L. Terrington, L.
Hunter of Newington, L. Thomas of Swynnerton, L.
Hylton-Foster, B. Thorneycroft, L.
Ilchester, E. Trefgarne, L.
Kinloss, Ly. Vaux of Harrowden, L.
Kinnaird, L. Vivian, L.
Kinross, L. Wakefield of Kendal. L,
Lane-Fox, B. Ward of Witley, V.
Long, V. Willoughby de Broke, L.
Loudoun C. Windlesham, L.

Resolved in the negative, and amendment disagreed to accordingly.

3.55 p.m.

Lord Bruce of Donington moved Amendment No. 2: Page 1, line 7, at beginning insert ("Except as provided in subsection (5) below").

The noble Lord said: I beg to move Amendment No. 2 which, with the Committee's permission, I will take with Amendments Nos. 13 and 16, together with some consequential amendments to Schedule 4. The purpose of this amendment is to give a local authority the power to raise a supplementary rate, where the Government themselves reduce the amount of grant made available to the local authority, in order that it may meet what it considers to be the proper needs of the community; that is, the correct and reasonable balance between social and service needs and the interests of those who provide the money for the provision of those services. The noble Lord when he was speaking to the last amendment made some reference to the fact that the previous Administration made certain cuts in public expenditure, including that of local authorities, at a time when the balance of payments position of this country most certainly needed a tight rein back under all heads.

We are not talking under the same circumstances at all; we are talking in terms of a country which is enjoying one of the largest balance of payments surpluses that it has had in years, for which the Government claim some credit, at the same time, of course, inflicting on the country, quite unnecessarily, the burden of an extra 2 million unemployed. How can he compare this with those circumstances of a very substantial balance of payments deficit, before the benefits of North Sea oil mysteriously proceeded to weave their way into the economy shortly after, but not consequential upon, the Government of the noble Lord opposite coming into office in May? They have been blessed by the biggest bonus in monetary and economic terms the country has ever had. Despite that they have adopted an economic policy—by the exercise of a dogma that is now discredited in practically every academic and economic circle outside his right honourable friend the Chancellor, inevitably the noble Lord, Lord Cockfield, and one or two hangers-on—completely discredited, a monetarist theory completely discredited, which even the Government themselves no longer believe in at all; and yet they still proceed with this policy of constriction.

The noble Lord, Lord Mottistone, put forward his usual, very understandable and very reasonable, plea for industry, pointing out how industry is not represented in local authority affairs. Well, I suppose it is the right honourable gentleman the Minister himself who compensates so weightily on his side to try to redress the electoral balance which he alleges exists. Local enterprise and commerce, after all, still need very good roads maintained, they still need refuse collected, they still need the provision of the police, they still need the provision of the fire services, they still need street lighting, and a whole series of other services provided by the local authority. Of course, unlike the domestic ratepayer who pays his or her rates out of taxed income, industry and commerce are allowed to deduct their rate contributions for tax purposes—a substantial relief that is not available to the domestic ratepayer.

Surely it must now be acknowledged by the Government—and I appeal to them to allow the rays of enlightenment to penetrate the prejudices under which they have so long laid—that their monetary and economic policies are as dead as a dodo and have no relevance any more? What is required is a resurgence in this country, not an ungoverned resurgence and not an ungovernable resurgence, no exercise of wild excess of slinging one's hat into the air and yelling "Alleluia" although I suspect that on the demise of the Government there would be expressions of pleasure that bordered upon those signs of exuberance. No, we do not require that. What surely is required, and what surely should be restored to the local authorities, is the means. If for any reason central Government decide that the contribution of the taxpayer in general to local authority revenues should be cut, and that should not be done by reasons of dogma but only by a careful consideration of the balance of where taxes should be borne, then surely in those circumstances a responsible local authority in close contact with its electorate ought to be able to do just exactly that. If it does it wrongly it will incur the opprobrium of its electorate and will in due course be slung out. If it does it reasonably it will be sustained.

On the performance over the last two or the three years I think that it is abundantly clear that there are quite a large number of ratepayers in the United Kingdom—and they are not all confined to the wealthy, the very rich, or the industrial commercial companies—who see it as a matter of common, social necessity for the benefit of the community in which they live that certain expenditures should be increased in certain sections of the local authorities' activities. They should be the final arbiters in this matter.

I know that the noble Lord will describe this as a wrecking amendment. Of course, any Government do not like to have their own will challenged politically. I confess to admitting that I think that a reasonable person is a person who agrees with me, and I think that the noble Lord thinks likewise. The time has come for us to behave like reasonable and sensible people, without showing any vindictiveness to anybody, and to adopt common sense solutions and to restore to the local authorities the powers which they had and with them that degree of tranquillity in past local government affairs to which the noble Lord referred so nostalgically in his speech on the last amendment. I beg to move.

Lord Mottistone

I hope that the noble Lord, Lord Bruce of Donington, will not mind if I defer following him on the parts of his comments which referred to business rates until I come to my own amendments a little later on to which they are totally relevant. All I would say now is that the noble Lord was quite right when he said that this was a wrecking amendment, because, of course, it is. I had a better simile—namely, that he had harnessed a new set of horses to his coach to drive through the Bill and I think that they are much more dangerous horses. I really cannot understand how he thinks for one minute that the Government will accept the amendment and perhaps the sooner we get over this amendment, and get it out of the way, the better.

Lord Evans of Claughton

It seems to me from discussing this Bill with borough treasurers, directors of finance or whatever they are now called, that they regard—and they are of course non-political, publicly anyway—the proposal enshrined in the amendment as being one of some importance because if local authorities can be subject to decisions to reduce the amount of grant after a local authority has fixed its rates, it puts the director of finance, quite apart from the council, in a very considerable difficulty. I know that the right honourable gentleman the Secretary of State, when the Bill was going through another place, did away with differential super holdback at that time. But is it not correct that differential holdback is still possible? Is it not right that non-differential super holdback is still possible? I hate this jargon but they are the words that are bandied about the corridors of town halls with a frisson of fear at the moment.

If those penalties can be imposed it would seem to me that, unless the amendment is passed, local authorities have no certainty at all about what their grant will be or how much money they will be given by the Government in any one year. If a local authority is not in any certainty, if a local authority is to have penalties imposed upon it retrospectively, it seems to me that it is very unfair and very difficult for local authorities to organise their affairs and they should, under those circumstances, be allowed to raise supplementary rates to cover those kind of circumstances.

I shall no doubt have the opportunity later on to express my views about the amendments of the noble Lord, Lord Mottistone. I do not regard this as a wrecking amendment; I regard it as a useful implement with which a responsible local authority will be able to make predictions about the kind of money that will be available to it in any one year from Government resources. I agree entirely that for local authorities to be much less dependent on grants, and for local government to be allowed to raise money from other sources, would be the healthiest thing of all. I hope that soon the Government will be putting forward proposals for changing the rating system completely. In the meantime, while local authorities are so dependent on grants, it seems to me that they must have some protection against the great uncertainties of this legislation; and this amendment seems to me a useful way of creating some certainty in these uncertain conditions.

Lord Bellwin

Before I respond to the amendment, I should like to say a few words in reply to the point that the noble Baroness made prior to introducing Amendment No. 1, when she referred to the problems of herself and her colleagues as regards the amount of time they had to look at amendments. Let me say at once that I very much regret that. As she knows, one tries very hard to ensure that all information, Notes on Clauses and anything else that noble Lords opposite feel they would need to enable them properly to study, to comment on and to criticise and to move amendments to the Bill, is made readily available. When amendments come in late, I am as sorry about it as anyone else, but the fact is that on this occasion it was not least at the behest of her colleagues in another place that, first, there should be amendments; secondly, specifically that they should be very carefully considered and gone into in detail; and, thirdly, that there should be as much consultation with the associations as possible. I assure the noble Baroness that that has, in fact, been done, but it has taken time—admittedly, longer than one would have hoped. I can only apologise to the noble Baroness and her colleagues on that.

I know she will not mind my saying that sometimes we on this side have also to deal with amendments at short notice, even manuscript amendments. But in no way is that an attempt to do other than to say that I regret the lateness of the tabling of some amendments. The noble Baroness will know from her own experience that that was ever thus. I think she will probably acknowledge that that is so; but that does not mean that it is right, and I agree with that.

Baroness Birk

Before the Minister replies to the debate, I should like to thank him for that very generous apology. I know that he always does all he can to help. But, of course, as he perhaps appreciates, when you are in Opposition and amendments go down late, you do not have at your disposal the resources of a great department that you would have when in Government. Looking to the future of the Bill, I was concerned that, as we understand, amendments will be tabled on, for instance, Clause 4, and perhaps on later clauses in the Bill, and it was in order to ensure that they are tabled that I raised the matter. As regards new clauses, will Notes on Clauses be made available? However, they will not be of much use unless the notes take in the new clauses that are being put down now.

Lord Bellwin

I am happy to say that so far in your Lordships' House I have never been in Opposition, and I hope it will be a long time before that unhappy state of affairs comes about. Nevertheless, I hope that I can comply with the noble Baroness's request. I confess that I have some doubts about amendments being tabled late. Certainly, for what they are worth, Notes on Clauses will be available at all times. If the noble Baroness would like clarification and explanation, I shall readily make that available through the department, because we are all concerned to get as good a Bill as possible. This is not about scoring points. If it means that we get meaningful debate, then I am absolutely content as to that.

Would that I could be as relaxed on the points which the noble Lord, Lord Bruce, made as I am on this latter point. I do not want to enter into a general economic debate with the noble Lord. I had to smile when he said that the country was enjoying one of the largest balance of payments surpluses that we have had for years, but he hastened to say that it was because of the good fortune of North Sea oil. I suppose that that is fair comment; it is a political game. I wonder what he would say if I reminded him that since the Government came to office, certainly within the first year, oil prices rose 100 per cent. I understand that they trebled at one stage. How does one cope with that? May I also remind him—and this is all that I had better say on this, otherwise we shall be digressing—that in 1976 the then Government had been in office for some 2½ years, and it was then that they were in the pickle in which they found themselves from policies which they had been pursuing. But I shall not pursue this as it is somewhat off the subject.

Lord Jacques

Perhaps the noble Lord would give way on two points before he leaves that matter. First, the increase in the price of oil increased the balance of payments surplus. It was something that occurred, which the Government did not expect. Secondly, would the noble Lord bear in mind that when we were in office, instead of having the benefits of exporting oil, we had to import the capital equipment which was necessary to produce the oil?

Lord Bellwin

I said that I would not enter into a debate and nor shall I, but I should like to comment on the first point which the noble Lord made. The noble Lord, Lord Bruce, made the point that it was the result of the economic situation—he was picking up something I said on the earlier amendment—that led to the whole problem of shortage of funds and economic difficulty. In fact he referred—and I wrote it down, as he knows I always do—to economic policies as dead as a dodo, and so on. I shall say only this, and this will be my last word on the subject. One observes the near panic with which those in the City and elsewhere contemplate even the possibility of an Administration other than a Conservative Administration being in power. So those are the discredited policies to which the noble Lord referred.

However, let us return to the point of the amendments. I would simply say—and this is very important—that a survey carried out not very long ago here in London of 500 firms by, I think, the London Chamber of Commerce, showed that as many as threequarters of those 500 firms said that they had either had to close plants or branches, had moved out of the area or had reduced staff solely because of the impact upon them of rates. I do not think that anyone would want to belittle that because it is an important factor in what happens to industry and commerce.

I thought that the noble Lord, Lord Evans, got to the point of the grant entitlements, which I understand is the first of these particular amendments. But the mid-year changes in grant are not new at all. Under the previous rate support grant system it was always necessary to adjust or to close-end grant entitlements in order to match them to the total of grant available for distribution. Authorities were able to plan for that contingency. As we have said before, there was no widespread recourse to supplementary rates. The new grant system retains this feature of the old, except that it now permits a fairer method of close-ending by adjusting the poundage schedule rather than by making the percentage reductions which were so unfair on those authorities which had low rateable values and which are so dependent on grant aid.

There will continue to be the need to adjust grant claims to match the grant available; but especially now, after a year's experience of the new grant system, I believe that local authorities will be able to anticipate the likely extent of such adjustments and provide for this in their initial rate demands, as they have always done in the past. I shall not resort to my long speaking note on this, because I am sure that the Committee would not want me to; it becomes a technical subject. But I have to go back to my own experience, and I hope that the noble Lord, Lord Bruce, will not deny me that.

One of the great grievances we had was the fact that what was then the resources element of the multiple regression analysis of the basis of the rate support grant settlement—the resources element—was always subject to clawback and you never knew what it would be. One could make one's rate and all of a sudden find that for no reason that affected you, but simply because another authority, or series of authorities, had decided to increase their rates, there had to be a deduction from your allocation of the resources element. That was unfair, yet we just did not know. Again, if we are not careful, we shall go into a great deal of complexity that is not necessary.

Whether or not this is a wrecking amendment, whether or not it drives a coach and horses through the Bill, whether or not they are the kind of horses which one of your Lordships thinks is more appropriate than another, I do not know. But what I do know is that the Government very strongly cannot accept the amendments.

Baroness Birk

The temperature goes down enormously directly you return to differential super holdbacks and things like that. It is very much more interesting to talk in a wider cosmos of events than on this, but this is what the amendment is about. It is true that the Secretary of State went back on the differential super holdback because he conceded that local authorities should have some certainty about grants, especially if they lost the power to levy supplementary rates. When we spoke about the past, clawbacks and so on, it was always in the context of authorities being able to levy supplementary rates if they wished to do so. The fact that very often they did not do so is quite another matter. To know that you have an opportunity is one thing, but not to have it at all is entirely different. Even now, without the super holdback, it still legalises a differential holdback by way of a system of expenditure targets and grant penalties. But the rules must be known before the start of the year so that the local authority can rate accordingly.

However, in spite of this, the Secretary of State can still make a change during the year. He can reduce everyone's grant across the board. This is the non-differential super hold, without reference to spending targets. He can also make the adjustment to authorities' grant claims to bring total claims in line with the national total in a penalising way. So there is a differential clawback.

To put it in a nutshell, the position is then that a local authority does not have certainty about its grant for any year and it has no fallback by way of being able to levy a supplementary rate at all. The Secretary of State certainly retains considerable powers to reduce grant, and we come back again to the same point of these amendments, and these powers need to be balanced by local revenue raising powers if programmes for spending on essential services are not to be at the whim of the Secretary of State. Therefore, we come back once again to the nub of the problem that in these various fairly extraordinary circumstances local authorities should still be able to have the power to levy supplementary rates.

I was impressed by what the noble Lord, Lord Evans, had to say about this. He has long and direct experience of this and he generally takes a relaxed and liberal—with a capital "L" and a small "1"—line on these matters and speaks both as a local authority man as well as a legislator in this House. I think that the arguments he put on this from his experience on the ground, so to speak, were entirely convincing.

4.21 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 65; Not-Contents, 99.

Airedale, L. Banks, L.
Amherst, E. Birk, B.
Amulree, L. Bishopston, L.—[Teller.]
Ardwick, L. Boston of Faversham, L.
Bacon, B. Briginshaw, L.
Balogh, L. Brockway, L.
Brooks of Tremorfa, L. Lovell-Davis, L.
Bruce of Donington, L. McCarthy, L.
Byers, L. Mais, L.
Collison, L. Mayhew, L.
David, B. Molloy, L.
Davies of Leek, L. Noel-Baker, L.
Denington, B. Oram, L.
Donaldson of Kingsbridge, L. Paget of Northampton, L.
Peart, L.
Elwyn-Jones, L. Phillips, B.
Evans of Claughton, L. Plant, L.
Fisher of Rednal, B. Ponsonby of Shulbrede, L.
Foot, L. Ross of Marnock, L.
Gosford, E. Sainsbury, L.
Hall, V. Seear, B.
Hampton, L. Stedman, B.
Hanworth, V. Stone, L.
Harris of Greenwich, L. Strabolgi, L.
Hooson, L. Strauss, L.
Houghton of Sowerby, L. Taylor of Mansfield, L.
Howie of Troon, L. Underhill, L.
Jacques, L. Wallace of Coslany, L.
Jeger, B. Wells-Pestell, L.
Jenkins of Putney, L. White, B.
John-Mackie, L. Wigoder, L.
Leatherland, L. Wootton of Abinger, B.
Listowel, E.
Llewelyn-Davies of Hastoe, B.—[Teller.]
Airey of Abingdon, B. Lucas of Chilworth, L.
Alexander of Tunis, E. Luke, L.
Allen of Abbeydale, L. Lyell, L.
Allerton, L. McFadzean, L.
Ampthill, L. Mackay of Clashfern, L.
Auckland, L. Mancroft, L.
Avon, E. Margadale, L.
Belhaven and Stenton, L. Marley, L.
Bellwin, L. Massereene and Ferrard, V.
Beloff, L. Merrivale, L.
Blake, L. Mersey, V.
Campbell of Alloway, L. Mills, V.
Campbell of Croy, L. Morris, L.
Cathcart, E. Mottistone, L.
Clwyd, L. Mowbray and Stourton, L.
Constantine of Stanmore, L.
Murton of Lindisfarne, L.
Cottesloe, L. Norfolk, D.
Craigton, L. Northchurch, B.
Cullen of Ashbourne, L. Nugent of Guildford, L.
Daventry, V. Orkney, E.
Davidson, V. Orr-Ewing, L.
Denham, L.—[Teller.] Pender, L.
Dilhorne, V. Penrhyn, L.
Drumalbyn, L. Plummer of St. Marylebone, L.
Ellenborough, L.
Elles, B. Porritt, L.
Ely, M. Rankeillour, L.
Enniskillen, E. Redcliffe-Maud, L.
Glenkinglas, L. St. Davids, V.
Gormanston, V. Saltoun, Ly.
Gridley, L. Sandford, L.
Grimston of Westbury, L. Sandys, L.—[Teller.]
Hailsham of Saint Marylebone, L. Savile, L.
Sempill, Ly.
Halsbury, E. Skelmersdale, L.
Hastings, L. Somers, L.
Hayter, L. Spens, L.
Hill of Luton, L. Stamp, L.
Holderness, L. Strathcona and Mount Royal, L.
Home of the Hirsel, L.
Hunter of Newington, L. Strathspey, L.
Hylton-Foster, B. Sudeley, L.
Kinloss, Ly. Swinfen, L.
Kinnaird, L. Terrington, L.
Kinross, L. Teviot, L.
Lane-Fox, B. Thorneycroft, L.
Long, V. Trefgarne, L.
Loudoun, C. Vaux of Harrowden, L.
Vivian, L. Westbury, L.
Wakefield of Kendal, L. Willoughby de Broke, L.
Ward of Witley, V. Windlesham, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.29 p.m.

Lord Bruce of Donington moved Amendment No. 3: Page 1, line 7, at end insert ("except as provided in subsection (6) below").

The noble Lord said: I beg to move Amendment No. 3, and with the permission of the Committee should like to take Amendment No. 14 with it. Amendment No. 14 is the substantive amendment with which the other is associated, and it reads: ("(6) A local authority shall have the power to levy a supplementary rate where it appears to the local authority that the level of prices, costs and remuneration payable by that authority and any future variation in that level that to that authority appears to be likely are in excess of the determination made by the Secretary of State in setting the level of grants under sub-section (4)(d) of section 54 of the Local Government Planning and Land Act 1980").

The Local Government Planning and Land Act 1980 requires the Secretary of State to take into account levels of inflation when setting the total of the rate support grant. The way in which, or the effect of the way in which, the levels of inflation have been taken into account by the Secretary of State has been diminished by three factors. The first is the tendency for the state to set cash limits on pay as a preface to the national pay round negotiations; the Government state a figure (it has been 4 per cent. in the present pay round) which tends to be treated as the minimum by negotiators. The Government know that to be the case and set a low figure to take account of it. Secondly, the Government tend to mask intended cuts in volume behind inadequate cash limits and build those into cash planning, thus shifting the blame for public expenditure reductions on to pay negotiators. The third factor is the move towards cash planning generally, which in many cases cuts completely across the whole trend of inflation.

If the Government had been able to live up to their electoral promises—not always incorporated in their manifesto but certainly well set out in speeches at election time—progressively to bring down, or even stabilise, the rate of inflation, the necessity for this amendment probably would not have arisen. But as everybody knows, only a short time after they returned to office they deliberately put up the rate of inflation by a series of measures, until ultimately it reached a peak of 22 per cent., and even today it is not down to the level at which it stood when they took over. I do not seek to make a political argument about that, because I have addressed your Lordships on a number of occasions when debating the question with the noble Lord, Lord Cockfield, and it would be inappropriate to rehearse those arguments now. But undoubtedly it has had an uncovenanted effect on the finances of local government. The rates of inflation which they have had to take into account have varied considerably, compared with the cash constraints to which they have been restricted, and the total effect has been to injure local government finances.

The amendment would give local authorities the right to protect their services from inflation caused, first, by the general mismanagement of the economy—to which I have referred and which I do not want to labour because the noble Lord, Lord Bellwin, is well conscious of it—and, secondly, by the Government themselves being a party to special case pay awards, such as to the police and firemen. We on this side are second to none in stating emphatically that the police and firemen—and, I would add in parenthesis, the nurses—are entitled to reasonable pay awards. But the Governments have been party to special pay award which local authorities had not taken into account in advance but which they must satisfy by complying with the statutory obligations placed on them. As the Minister knows, and as the Home Secretary, reminds us, there is increased recruitment in to the various police forces, which tend to become more costly following the events in Toxteth and elsewhere, and there must be increases in equipment and so on.

The amendment would also protect local authorities further against the effects of generally inadequate cash limits set to 18 months before the end of the financial year to which they relate. Your Lordships will recall that the 4 per cent. policy was first announced in September 1981 by the Chancellor of the Exchequer to cover the year to 31st March 1981, six months later. That cannot be satisfactory. While to a minority on the Benches opposite this may appear to be a wrecking amendment, it is in fact put forward with all the reasonableness which the noble Lord, Lord Bellwin, would express if he were in my place. We therefore hope that noble Lords in all parts of the Committee will agree that it is a reasonable amendment, and I trust that Lord Bellwin will not recommend his noble friends to vote against it. I beg to move.

Lord Mottistone

It is interesting to hear the noble Lord, Lord Bruce, using Section 54(4)(d) in almost exactly the reverse way to that which I shall use when I move a later amendment; he is seeking to use it to allow local authorities to spend as much as they wish, while I shall seek to use it to restrict the amount of expenditure they can make. The noble Lord's blandishments are excellent; he is talking very well today and one might almost get carried away, even fooled, by him. As it happens, I am afraid the amendment is another wrecker, and I hope my noble friend Lord Bellwin agrees with me on that.

Lord Evans of Claughton

I have pleasure in disagreeing with the noble Lord, Lord Mottistone; I do not think this is a wrecking amendment. The problem Lord Mottistone has—I suspect it is a problem, to which we shall come later, which he and the CBI have—is that the rating system should be changed. However, at present we are not changing the rating system but trying to do something to make it a little more possible for local authorities to carry out the instructions given to them by Government. The present Government have agreed a formula by which the police and firemen get an increase in salaries on a regular basis. I am not quarrelling with that, certainly not so far as the police are concerned.

If the noble Lord asks any county treasurer, he will be told that this is the most difficult part of the situation. There are imposed regular increases for the police and fire service, in order to meet inflation. The county treasurer is not allowed to take any steps to cover expected increases of that kind or unexpected increases imposed through a wage settlement, which might come at any time. God knows that the amount already put in by a county for contingencies is large enough, but I suppose that it will have to put in a much larger sum. When I was on Merseyside County Council I spent a lot of time suggesting that we lop £7 million or £8 million off contingencies. It now seems that county councils will have contingencies of much larger amounts, though I should not think that that would be the Government's wish.

The point that I am trying to make is that the Government impose on local authorities duties regarding wage settlements and then take away the means by which the authorities can carry out the duties. I hope that the amendment will receive the support of the Committee, though I have a nasty feeling that my hope will not be fulfilled.

Lord Bellwin

I really must smile at the noble Lord, Lord Bruce of Donington, who today seems to be beginning his speech on each amendment with an all-out attack on the Government's economic policies. He then slowly swings to the subject of the amendment, which I entirely agree he puts in the most reasonable of terms. Would that the content of his remarks was as reasonable as the way he makes them! That would make me much happier, but perhaps it is too much for which to hope.

The noble Lord knows that of course I would not agree with him in the view that the Government deliberately put up the rate of inflation. He would expect me to say, as I certainly do say, that it was the previous Administration who carefully sowed the seeds whereby, when we took over, the inflation rate was inevitably bound to go up, as it did. But now, when it comes down, it will stay down, and it will go lower than it has ever gone before. However we shall come to that point as we proceed.

I really cannot accept that supplementary rates or precepts should be permitted where an authority budgets in line with Government assumptions on pay and price increases, as embodied in the RSG settlement, but which then turn out in practice to be lower than the actual level of inflation. The pay and price increases assumed in the rate support grant settlements, including those made by the previous Administration, are as much a discipline and a guideline for local authorities as they are a forecast.

That must be so, since a large element in the assumption is pay, where the matter lies in the hands of the authorities themselves. Indeed, the Labour Government's last settlement, as I well remember, and as the noble Lord will no doubt recall, included a provision for pay increases of 5 per cent. and an 8 per cent. provision for prices, which was strictly in line with their pay policy. Members of that Government—most prominently the then Prime Minister and Chancellor—made it plain that pay increases in excess of the Government's guidelines would have to be met by cuts in services and jobs. Although authorities at that time had the power to levy supplementaries, it cannot have been within the contemplation of the then Government that they should use those powers to make good any squeeze that may have arisen if the guidelines proved too tight.

No one whom I ever knew, of any political colour, in local government, ever talked of supplementary rates. We used to laugh at the then Government's suppositions and assumptions of what pay and prices would be. We simply listened, we went away, and we did what had to be done regarding our contingencies and balances. I would say that the realities of the actual out-turns are now very much nearer than they used to be in those times, and I forecast that they will become so near that they will be pretty much on the nail, certainly so far as inflation goes, and I am hoping that the same, or, if not exactly the same, something very near to it, will apply in regard to prices.

For the same reason, the present Government, in the context of the ban on supplementaries proposed in the Bill, cannot accept the amendments. I shall not any more talk about coaches and horses, but quite clearly the amendments are against what we are trying to do in the whole of this Part of the Bill, and it is for that reason that I cannot accept them.

Lord Bruce of Donington

I am very sorry that the noble Lord cannot accept the amendment that I have moved. In the course of his remarks he referred to the disciplines and said that if we had supplementary estimates, we could not possibly keep the disciplines. Example would be a very fine thing, if the noble Lord's Administration showed some signs of keeping to the disciplines that they are seeking to impose upon local authorities. I have here the supplementary estimates of Her Majesty's Government for 1981–82, which propose an increase of £1,459 million, or 2 per cent., on the total estimates previously made. This does not sound like frightfully good discipline for the moment, does it?

It is only an increase of 2 per cent., but if, for the moment I may anticipate the noble Lord, I would say that it goes to show that in government, whether national or local, there is no such thing as certainty. One is blown off the course. The estimates of central Government for the year may be, and I have no doubt are, made in perfectly good faith, after taking into account all the known factors; but as the year progresses things have to be changed, people are blown off course, all kinds of catastrophes occur. I sincerely trust that situations such as that in the Falklands will not recur many times, but it will have an impact on estimates.

So in suggesting that a local authority should have the powers that are proposed all one is really saying is that, subject to local democratic control, the authority should be entitled to just that kind of latitude that central Governments take to themselves, sure in the knowledge that they are sustained by a party majority for at least four years in the normal way.

Lord Bellwin

I must say that, coincidentally, the amount which I think the noble Lord referred to as an overspending equates almost exactly to the amount by which local government as a whole has overspent its budgets. We are talking of about £1.5 billion, which is a horrific figure. We used to talk of £50,000, £100,000, or £200,000. They were enormous amounts at one time, but here we are faced with an overspend by local government of £1½ billion. No Government can stand by and do nothing about that.

As the noble Lord knows, I am as concerned as anyone that local government should not be hampered more than it need be. I shall not now go into that debate, but I could give many examples of how I consider that it is not hampered, despite what might be said. Nevertheless, there is a problem here. We are talking about something that never used to apply. In the past there was never an inhibition or a restriction on local government; it never even came into the reckoning. But all of a sudden the matter is assuming proportions as though it were of great moment, as though it concerned local democracy and the rights and freedoms of local government. I must say that there is being made here a case that is not so. It is not the use of the powers, but the abuse of the powers that has led to the present situation. That is why there is concern; that is why there is the necessity for this Part of the Bill, and that is why we cannot accept the amendment.

4.49 p.m.

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

Their Lordships divided: Contents, 64; Not-Contents, 98.

Airedale, L. Jenkins of Putney, L.
Amherst, E. John-Mackie, L.
Amulree, L. Kaldor, L.
Ardwick, L. Leatherland, L.
Bacon, B. Listowel, E.
Balogh, L. Llewelyn-Davies of Hastoe, B.
Banks, L.
Beaumont of Whitley, L. Longford, E.
Birk, B. Lovell-Davis, L.
Bishopston, L—[Teller.] McCarthy, L.
Boston of Faversham, L. Mayhew, L.
Briginshaw, L. Molloy, L.
Brooks of Tremorfa, L. Northfield, L.
Bruce of Donington, L. Oram, L.
Byers, L. Peart, L.
Caradon, L. Phillips, B.
Collison, L. Plant, L.
David, B. Ponsonby of Shulbrede, L.—[Teller.]
Davies of Leek, L.
Denington, B. Ross of Marnock, L.
Donaldson of Kingsbridge, L. Seear, B.
Stedman, B.
Elwyn-Jones, L. Stone, L.
Evans of Claughton, L. Strabolgi, L.
Ewart-Biggs, B. Strauss, L.
Fisher of Rednal, B. Taylor of Mansfield, L.
Foot, L. Underhill, L.
Gosford, E. Wallace of Coslany, L.
Hall, V. Wells-Pestell, L.
Hampton, L. White, B.
Hooson, L. Wigoder, L.
Howie of Troon, L. Wootton of Abinger, B.
Jacques, L. Young of Dartington, L.
Jeger, B.
Airey of Abingdon, B. Belhaven and Stenton, L.
Alexander of Tunis, E. Bellwin, L.
Allen of Abbeydale, L. Beloff, L.
Allerton, L. Bessborough, E.
Ampthill, L. Blake, L.
Avon, E. Campbell of Alloway, L.
Balerno, L. Campbell of Croy, L.
Cathcart, E. Merrivale, L.
Colwyn, L. Mersey, V.
Constantine of Stanmore, L. Mills, V.
Morris, L.
Cottesloe, L. Mottistone, L.
Craigton, L. Mowbray and Stourton, L.
Cullen of Ashbourne, L. Murton of Lindisfarne, L.
Daventry, V. Norfolk, D.
Davidson, V. Northchurch, B.
Denhatn, L.—[Teller.] Nugent of Guildford, L.
Dilhorne, V. O'Neill of the Maine, L.
Drumalbyn, L. Orkney, E.
Ellenborough, L. Orr-Ewing, L.
Enniskillen, E. Pender, L.
Glenkinglas, L. Penrhyn, L.
Gormanston, V. Plummer of St. Marylebone, L.
Gridley, L.
Hailsham of Saint Marylebone, L. Rankeillour, L.
St. Davids, V.
Halsbury, E. Saltoun, Ly.
Hastings, L. Sandford, L.
Hayter, L. Sandys, L.[Teller.]
Hill of Luton, L. Savile, L.
Holderness, L. Sempill, Ly.
Home of the Hirsel, L. Sherfield, L.
Hunter of Newington, L. Skelmersdale, L.
Hylton-Foster, B. Somers, L.
Kilmany, L. Spens, L.
Kinloss, Ly. Strathcona and Mount Royal, L.
Kinnaird, L.
Kinross, L. Strathspey, L.
Lane-Fox, B. Sudeley, L.
Long, V. Swinfen, L.
Loudoun, C. Terrington, L.
Lucas of Chilworth, L. Teviot, L.
Luke, L. Thorneycroft, L.
Lyell, L. Trefgarne, L.
McFadzean, L. Vaux of Harrowden, L.
Mackay of Clashfern, L. Vivian, L.
Macleod of Borve, B. Wakefield of Kendal, L.
Mancroft, L. Ward of Witley, V.
Margadale, L. Westbury, L.
Marley, L. Willoughby de Broke, L.
Massereene and Ferrard, V. Windlesham, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.57 p.m.

Baroness David moved Amendment No. 4: Page 1, leave out line 8.

The noble Baroness said: In speaking to this amendment I shall also be speaking to Amendments Nos. 17 and 20. The purpose of Clause 1, according to paragraph 1 of the Notes on Clauses, is to require rating authorities to make a single rate to cover their estimated spending needs for a whole financial year without further recourse to their ratepayers during the year once their rates have been set. The Government's policy objective is declared to be that authorities may make only one rate for the year and shall contain their expenditure to the level that can be financed by that rate without further recourse to the ratepayer; and in order to achieve that objective (I am quoting from paragraph 5 of the Notes on Clauses): it is necessary to provide that not more than one rate shall be made for each financial year. Authorities will therefore no longer have discretion as to the length of the rate period; it will in all cases be 12 months". There is no definition of "supplementary rate" in Clause 1, although the clause prohibits the making of a supplementary rate.

Clause 2 is exactly parallel with Clause 1 in dealing with precepts. However, in Clause 2 "supplementary precept" is defined. The reason given for this in paragraph 6 of the notes on Clause 2 is that some of the precepting powers do not refer to supplementary precepts. Reference is made to paragraph 4 of the notes, and paragraph 4 states:

  1. (a) parish and community councils do not have power to issue supplementary precepts;
  2. (b) the Receiver of the Metropolitan Police and Joint Boards under the 1936 Public Health Act do not have express powers to issue supplementary precepts, but there is nothing to stop them issuing successive precepts in a financial year;
  3. (c) water authorities may issue supplementary precepts during the course of a financial year".

However, at the moment the Bill does not apply to water rates. It appears, therefore, that a definition of "supplementary precept" is included only to clarify the position in regard to authorities other than the main precepting ones.

It is difficult to understand the inclusion of a ban on both the making of a supplementary rate or precept and the levying of a rate or precept for a period other than a financial year. There would appear to be two cases with which the Bill is intended to deal. First, the levying of rates or precepts for periods of less than a year—that is, for example, for two half-years—or, second, the levying of a supplementary rate or precept during the course of a year. But as by definition the second case is for a period of less than a full financial year, it is difficult to understand why it needs to be dealt with separately. Both cases appear to be dealt with by prohibition (b), so that the Government's stated objective seems to be accomplished fully and simply by that prohibition.

The only reason given for the inclusion of the definition of a supplementary precept is a rather obscure technical one and appears to be adequately covered by the general prohibition in (b). One is driven to the conclusion that prohibition (a) in Clauses 1 and 2 is superfluous for reasons of economy and clarity and should be dropped. If (a) in Clause 2 is dropped (as Amendment No. 7 suggests) there is no need for the definition in the last three lines of subsection (2); and that makes up Amendment No. 20. I beg to move.

Lord Bellwin

It has to be said that these amendments would wreck Part I of the Bill. As we now know, the object of Part I is to ban supplementary rates and precepts, and all other aspects of Part I follow from that and exist to ensure that it will be satisfactorily achieved. If these amendments were to be accepted, there would be nothing to stop local authorities from making a supplementary rate or precept. There would be little point in proceeding with the rest of Clauses 1 and 2, since this would simply ensure that any supplementary rate or precept would have to be made, like the original rate or precept, for the whole year. The value of Clause 3 would be undermined and there would be no purpose in extending, for example, the Greater London Council's power to borrow with the Secretary of State's approval.

I made it clear at Second Reading why we propose to ban supplementary rate and precept. We have talked about it for a long time today—for two hours—and I am sure that I should not be thanked for repeating all the arguments. I would say that we are not prepared to see a repetition of some of the problems which led to this whole situation in the past, that have put and are putting an intolerable burden on hard-pressed rate payers, domestic and non-domestic, many of whom can ill afford further, heavy, unexpected—and that is the operative word—demands for supplementary rates. Therefore, we cannot accept the amendment.

Baroness David

May I ask the Minister why the situation is not covered by (b)?

Lord Bellwin

I am not quite sure what the noble Baroness means by "covered by (b)".

Baroness David

I do not understand the necessity to have (a) because (b) says the rating authority shall not have power to make a rate for any period other than a financial year. Does that not cover the whole thing?

Lord Bellwin

A supplementary rate would always be for less than a whole year.

Baroness David

But (b) says that you cannot have a rate for any period other than a financial year. I should have thought that that covered the situation.

Lord Bellwin

I think not. As always, I will look into the point that the noble Baroness makes and, should it be otherwise, I will come back to her. My interpretation is that there is not this problem at the point she makes. I will undertake to look at it.

Baroness David

If the noble Lord says that he will look at it, then I shall be happy to withdraw the amendment.

Amendment, by leave, withdrawn.

5.5 p.m.

Baroness Birk moved Amendment No. 5: Page 1, line 9, leave out second ("a") and insert ("the").

The noble Baroness said: In moving Amendment No. 5, it may help the Committee and the Minister if I speak to Amendments No. 7, 8, 9, 10, 18, 21 and 22. They are all concerned with the question of the duration of this piece of legislation if it unfortunately gets on to the statute book. Incidentally, the Minister said (and he was right) that he was always anxious to be helpful. I would say that he could be a little more helpful if he accepted some amendments—not every one, but the odd one. This may be a good place to start because this is something that has been mentioned by the Government: the question of the duration of this legislation.

Notwithstanding the general opposition to the constitutional changes in this Bill, what we feel is that the restriction on supplementary rates and precepts should be expressed to be of a temporary nature only and limited to one year. I think that, if that were so, my noble friend Baroness David would feel happier if she and many of us knew that this was going to be of a temporary nature. The Association of Metropolitan Authorities and, I think, the other local authority associations are concerned about the length of time for which this legislation may be in force. The AMA does not accept the need for restriction at all but, even if a need for some restraint on local revenue-raising powers of local authorities can be shown to be justified—and I do not think that anybody believes on any side of the Committee that local authorities should be encouraged or allowed to go haywire in financial matters—the measures in this Bill are of such magnitude as to be out of all proportion to the problem which is said to exist. The Government have stated that on many occasions. Every time we move an amendment to let things remain as they are and allow the local authorities to have their right to levy supplementary rates, the Government say that this is seldom done. This large hammer is being used in a very crashing manner.

Also, it involves major constitutional changes in the role of local government and therefore the point of these amendments is that, if they are to be introduced at all, they must be temporary in nature so that their effects can be judged after a period of trial. As the Government imply from time to time that this is to get over a particular economic hill, then it should not be necessary to have permanence for this Bill. A trial period is essential because of the haste with which the changes are being introduced and because of their fundamental nature.

We know there were certain changes in the other place and then, as the Minister explained this afternoon in answer to my complaint about the late arrival of the amendments here, a great deal of work had to go into that and it was difficult to be able to produce the changes here before last Friday. The problems encountered by Lothian in Scotland, for example, in not being able to raise additional revenue while faced with massive grant cuts are an example of the problems which will be forced upon many local authorities in England and Wales and the effect of these problems must be reassessed before making the restriction permanent.

Another reason for arguing for the restrictions to be temporary is the Government's own intention with regard to review of the rating system in total. The Green Paper, Alternatives to Domestic Rates, was presented by the Secretary of State in December. The paper concludes that the Government, wishes to move ahead as quickly as possible". The intention is therefore that a new system for financing local government be introduced as soon as possible, and this may involve the abolition of the rating system in total. We do not yet know what the Government have in mind. Even if they were going to leave the situation as it is, they still have to go into these matters and examine them and realise what has happened in the process of consultation.

Therefore what is the point in creating problems and constitutional changes involved in the proposed restrictions that are now before us if the whole system is conceivably going to be altered very shortly in any event? If the restrictions are to come into effect, then they should be clearly limited so that they do not hinder the consideration of alternative financing arrangements, and also so that they clearly come to an end when the new financing arrangements come in.

The Secretary of State has certainly made it clear that he considers the restrictions to be of a temporary nature only. During the debate on 12th November 1981 on the Opposition Motion on encroachments on local government autonomy, the Secretary of State stated that he regarded the original Bill as an interim measure, related only to the short term. In fact, he further indicated that a limitation on the powers to three years would be, a sensible amendment to consider". If he thinks that, why should not the temporary nature be explicit in the legislation? In fact, it is essential that it be written into the legislation itself. I also understand that the Secretary of State considers that the use of the restrictions in existing powers for one year would bring local government spending into line with the Government's wishes for the foreseeable future. Again, if this is his view, and he feels that he has confidence in the Government dealing with the economy and that what is being done here will do the trick that he wants done so far as local authorities are concerned, then it would be quite wrong not to limit the restriction to one year instead of creating major problems for local government and the constitution of the country for all time.

There are many precedents where controversial or constitutional legislation has been subject to renewal every year or is given a life of only one year. My friends and I believe that three years is too long for a piece of legislation of this type. The provisions in it are highly sensitive to and responsive to what is happening in the economic and social fields at any time. They should respond to the temperature of what is going on. The only way that can be done is by restricting the legislation to one year. When the Government are in power with a majority they can always introduce it again. It gives an opportunity and also acts as an incentive that the Government would want to use rather than always returning to the use of a blunderbuss which upsets more people than it cures, knocks more heads down and makes more people unconscious in this manner than encourages them to do what the Government want.

If I may give the Minister some examples so that this is not something taken out of the blue, the prices and incomes legislation was renewed every year; sanctions imposed on Rhodesia were renewed every year; and the Prevention of Terrorism Act comes up every year. Although it may be in a different category, this would seem a particularly good and right candidate for treatment of this sort. I do not believe for one moment that the Minister could answer that this is a wrecking amendment. It is not.

We have had now three divisions to try to get some "give" in the legislation on the levying of supplementary rates, and if the Government do not give on that, and we do not manage to get any further on that, then at least they can and should do—and it would be following the intentions, as we understand it, of the Secretary of State—is to make the legislation viable and valid for only one year and then review it and reassess the position again. I should have thought that this was not only sensible and reasonable but a beneficial addition to a piece of legislation of this sort. I beg to move.

Lord Evans of Claughton

From these Benches we support the amendment moved by the noble Baroness. It seems to me a pity to create a huge upheaval in local government and its relationship with central Government and to emasculate it in the way that has been proposed. It is said that this is for reasons of financial control at a time when the Government propose in the Green Paper to proceed speedily with the introduction of new systems of local government finance. To destroy the independence of local government or make incursions or restrictions on that independence at a time when the root cause is the raising of the money and the level of public expenditure involved is a great pity. This is particularly so when creating this huge machine to do this at a time when, if the Government are telling the truth and if their intentions are accurately expressed, that they intend to amend the system to bring in new types of means of financing local government, local income tax, whatever causes they have to do this.

So if they are on the point of introducing legislation—perhaps the noble Lord the Minister can reassure us on this—to change the nature of local government finance, then surely it is good that this kind of legislation should be of a temporary nature. I would have thought that the noble Lord and his right honourable friend the Secretary of State would welcome this amendment because it is along the lines that his right honourable friend has been talking about for some months. I hope that the Government will on this occasion save us the inconvenience of trooping through the Division Lobbies again.

5.18 p.m.

Lord Bellwin

I think that the exercise is not doing any harm. Maybe I shall have to have some more of it because I fear that I cannot accept this amendment. The noble Baroness said—as has been said a few times today—that the supplementary rate is seldom used. The point is that the supplementary rate was seldom used. Unhappily, it is because in the last year or so it has not been seldom used that we are dealing with this whole matter today in the way that we are. I do not see the problem to which the noble Baroness refers. If it were so, then what has been going on in Scotland all these years? They have not had all this trauma and drama that we hear about.

When the noble Baroness refers to the observations of my right honourable friend, I would in turn have to quote back to her that he also said on 16th December: I do not believe that we should take a decision on the limitation of time on banning the supplementary rate. It was a commitment that I gave very much in the context of the referendum provisions. The case is different when one comes to judge supplementary rates". The fact is that ratepayers must not lose protection from fear of heavy and unexpected supplementary rate demands and risk destruction of their budget after 31st March 1983. Confining operation of Clauses 1 and 2 to 1982–83 would mean that after only a year's brief but well earned respite for ratepayers they would again be at risk from this minority of authorities who levy supplementary rates to increase spending apparently—it has to be said—regardless of the burden on domestic ratepayers, industry and commerce.

In any event, the ban on supplementary rates and precepts is not intended to be a temporary measure. We have made it clear that in the non-domestic sector, where rates will remain for the foreseeable future, the ban will continue. The ban could, however, be an interim measure in the domestic sector pending the proposals for the reform of the domestic rating system, to which we remain committed. It is too soon to say exactly when this will be. The timing of reform must depend upon the outcome of the consultations on the Green Paper and on the decisions on which options should be adopted; but I can and do assure the Committee that we want real reform just as quickly as circumstances allow and we are very seized of the importance of the time factor.

I am sorry I cannot be more precise. The noble Lord knows I would like to be more precise but I cannot be today. However, we are very much seized of the importance of the matter. All in all, I cannot accept that operation of Part I of the Bill should be limited as proposed by the amendment. I recognise the way in which noble Lords opposite are at least trying to get some mitigation of the underlying purpose of Part I but we feel very firmly that this is really important and we cannot shift on it. Whether or not we can do so on later amendments, we shall have to see as we go along.

Lord Bruce of Donington

I hope the noble Lord will assure himself that what we are really trying to do is to see that he himself does not stand in the way of his own creativity. We are trying to do him a favour. The noble Lord knows perfectly well, as indeed do noble Lords in all parts of the Chamber, that the Conservative Party were committed in their manifesto, which has a degree of importance, I would suppose, to people who profess themselves to be bound by it and who wave it on every conceivable opportunity as a justification of their actions. But the noble Lord ought to be proceeding with this review of the way in which local authorities can be financed.

He has correctly referred to the Green Paper, but the Green Paper has been about for a long time and the noble Lord knows perfectly well that phrases such as: "We are leaving no stone unturned"; "We are keeping the matter under close and continuous review"; "We intend to give it the utmost priority"; "We are deep in thought about the matter" and so on, have been made very popular indeed by the recent television series, "Yes, Minister". We know the jargon. All it really means is that you really have not the remotest intention of doing anything about it and are explaining why.

If the noble Lord set himself a target by which he had to do something then I am quite sure his ingenuity, his influence within his department and the deep arguments and conversations with his Minister would produce a solution on the basis of the alternatives, not only in the Green Paper but also in the Layfield Report. If he sets himself a target, I have the utmost confidence in the noble Lord that he would do it and proposals would be laid before us setting out different suggestions for financing. I implore him to set himself a target and to challenge himself; and there is no better way of doing it than by making this part of the Bill really temporary and lasting only for one year.

I am quite sure his department would be galvanised into action if he accepted this amendment, because they would know that time was ticking on and they would have to produce proposals of a constructive kind for a complete reorganisation of the way in which local authorities get their money. I implore the noble Lord to look to his own reputation and the magnificent achievement he would ensure if only he made it possible and gave his department and everybody else the incentive to work to a time. We invite your Lordships to support us on this amendment.

Lord Bellwin

Before the House decides to do so, perhaps I should just say that, first, I hope the noble Lord knows that the consultation date finished at the end of March. There was the most extensive consultation on the Green Paper, although there were those who said they needed longer—but there would always be those who said that. The noble Lord could be surprised on this, whether pleasantly or not will depend upon the form it takes, and I am not going to be drawn today, however much I am tempted—and I am tempted—to put a time on it. The noble Lord knows it does not work like that. The fact is that we are now analysing the results of the consultation. We are seized, as I said before to the noble Lord, Lord Evans, of the importance of this. He is quite right: there is a commitment in the party manifesto. We are well aware of that and we understand the importance of it. More I will not say today, despite the great temptation to do so, because if it were that easy, it would have been done years ago.

The Layfield Report was published years ago and the debate has continued for as long as I can remember. I look round in the Committee today and see many people who have had years in local government: some of them are nodding their heads, because they know that "it ain't that easy", otherwise it would have been done. There needs to be change—that is beyond question—but what it should be is another matter, and one has to be very careful about how one goes about it.

If it in any way comforts the noble Lord, Lord Bruce, I tell him again that we are very alert to the need for some urgency in this matter, and that is what it is receiving. He said that we have not the remotest intention of doing anything about it. I trust he will make a careful note of today's date in his diary, and that when something is done he will refer to what was said today. I have said why we cannot accept this amendment. It may be that as we go along, to pick up a point made by the noble Baroness, there may be ways in which we shall be able to move—who knows? One always tries to do the best one can. We want the best Bill we can get, but I fear this amendment would not help to that end.

Baroness Birk

The noble Minister has concentrated on the question of when, where and how the Government will come to some conclusion on the domestic or general rating system, on its abolition or whatever. But this is not the whole point of the amendment. We can go back to what the noble Lord's right honourable friend said—it is true it was then in the context of a referendum, but he knows as well as I do that the whole thing was to deal with the question of authorities raising supplementary rates, either through a referendum or in any other way. That is what this Bill is about. Therefore, the question of reassessment is a different factor from that of what is going to happen in future to the rating system. It is on that point, which should carry equal weight, that I have been pressing the Minister as well as on the question of the Government making up their mind. And I agree that is very difficult, because I do not deny that the previous Administration also found it a difficult and complex measure.

As far as legislation is concerned, all Governments legislate far too much. We get lumbered with legislation which becomes almost as obsolescent as yesterday's washing machine when you try to get it repaired, and repairing legislation is extremely difficult. It would be a good thing if, very much more often, legislation was contained for a year and then had to be reassessed to decide whether it should continue. This is an extraordinarily good vehicle in which to do that. It is for those reasons, as well as the question of the Government coming forward with their proposals on rating, that we should give very serious consideration in this Bill to the question. I shall not repeat all the points I raised in moving the amendment.

The amendment is not saying that it should only last for a year and that would be the end of it: that would be a definite date with a time limit. What the amendments are saying is that after a year there should be a reassessment and a monitoring during that year, and the Government would then have the opportunity to decide whether it is necessary to continue with something which after all has created great antagonism among local authorities. If it is not absolutely necessary, it need not be restored for another year. If it is made permanent, as it is in the Bill at the moment, it is very much more difficult to get a change, which the Minister knows as well as I do. You then have to bring in new legislation; and why should the Government, Parliament and everybody else be put through that hoop? We know that they will not, and that the legislation will go on and on, however unnecessary it is.

It is for those reasons that, in spite of what the Minister has said, I ask him quite seriously whether he will take this back, have a look at it and discuss it with his right honourable friends to see whether he can find some way of giving on this point. The arguments that have been put forward from this side, as well as by the noble Lord, Lord Evans, have not really been answered in a convincing way by the Government, and I still think that there is room for more thought and manoeuvre on this point.

Lord Bellwin

The noble Baroness knows that I should like to help and that I should like to say, "Yes, we will have a look at it." But I must be honest about it and say that, although I will talk—I always do in any case about matters that are raised where there seems to be some concern on a matter which is not absolutely cut and dried—when I contemplate what it would mean to have it for a year, with all the difficulties that would impose, I do not think we can do anything. What would be the situation if we said that we would have it for a year and then, if there were no problems, no supplementary rates and so on, we said that we would therefore no longer insist on this? Those who had been doing these things would say "Now it is all right and we can come back again." We should be back to square one. That is why, in truth, I do not think we can do anything. But we will talk about it and, if I have anything helpful to suggest, I will do so. But I must be frank and say that I doubt very much whether we can get to where the noble Baroness wants to be.

Baroness Birk

Before I decide, may I say that I appreciate that the Minister is trying to be helpful and is always ready to talk. But I must get this really clear because I do not want to do him an injustice, nor do I or my noble frineds want to assume something which is misleading. If he is saying that he will be happy to continue just talking to me about it in a rather philosophical way, that is one thing. But if he is saying that the Government are still prepared to think about a limitation of a year that is another. If he cannot say that there is really room for consideration of this matter, then I really must divide the Committee. I do not want to do it, but I must have a little more than what he has just said, although he said it with his usual courtesy and in a very pleasant way. But this is a very important and practical point.

Lord Bellwin

I understand what the noble Baroness has said. I cannot give her the absolute assurance that she wants, much as I understand the point that she is making. Therefore, I cannot go any further.

5.34 p.m.

On Question, Whether the said amendment (No. 5) shall be agreed to?

Their Lordships divided: Contents, 59; Not-Contents, 91.

Airedale, L. Jenkins of Putney, L.
Amherst, E. John-Mackie, L.
Amulree, L. Kaldor, L.
Ardwick, L. Leatherland, L.
Bacon, B. Llewelyn-Davies of Hastoe, B.
Balogh, L.
Banks, L. Longford, E.
Beaumont of Whitley, L. Lovell-Davis, L.
Birk, B. McCarthy, L.
Bishopston, L —[Teller.] Mayhew, L.
Boston of Faversham, L. Molloy, L.
Brooks of Tremorfa, L. Northfield, L.
Bruce of Donington, L. Ogmore, L.
Byers, L. Oram, L.
Caradon, L. Peart, L.
Collison, L. Perry of Walton, L.
David, B. Phillips, B.
Davies of Leek, L. Ponsonby of Shulbrede, L.
Donaldson of Kingsbridge, L. Ross of Marnock, L.
Stedman, B.
Elwyn-Jones, L. Stone, L.
Evans of Claughton, L. Tanlaw, L.
Fisher of Rednal, B. Taylor of Mansfield, L.
Gosford, E. Underhill, L.
Hampton, L. Wallace of Coslany, L.—[Teller.]
Hanworth, V.
Hooson, L. Wells-Pestell, L.
Houghton of Sowerby, L. White, B.
Howie of Troon, L. Wigoder, L.
Jacques, L. Wootton of Abinger, B.
Jeger, B. Young of Dartington, L.
Airey of Abingdon, B. Mackay of Clashfern, L.
Alexander of Tunis, E. Macleod of Borve, B.
Allen of Abbeydale, L. Mancroft, L.
Allerton, L. Mansfield, E.
Auckland, L. Margadale, L.
Avon, E. Marley, L.
Balerno, L. Massereene and Ferrard, V
Belhaven and Stenton, L. Merrivale, L.
Bellwin, L. Mersey, V.
Blake, L. Morris, L.
Boardman, L. Mottistone, L.
Campbell of Croy, L. Murton of Lindisfarne, L.
Cathcart, E. Norfolk, D.
Colwyn, L. Nugent of Guildford, L.
Constantine of Stanmore, L. Orkney, E.
Orr-Ewing, L.
Craigton, L. Pender, L.
Cullen of Ashbourne, L. Penrhyn, L.
Daventry, V. Plummer of St. Marylebone, L.
Denham, L — [Teller.]
Eccles, V. Rankeillour, L.
Fortescue, E. Ridley, V.
Fraser of Kilmorack, L. St. Davids, V.
Gainford, L. Sandford, L.
Glenkinglas, L. Sandys, L.—[Teller.]
Gormanston, V. Savile, L.
Greenway, L. Seebohm, L.
Gridley, L. Sempill, Ly.
Hailsham of Saint Marylebone, L. Skelmersdale, L.
Soames, L.
Harmar-Nicholls, L. Somers, L.
Hastings, L. Spens, L.
Hayter, L. Strathspey, L.
Hill of Luton, L. Sudeley, L.
Holderness, L. Swinfen, L.
Hylton-Foster, B. Terrington, L.
Ironside, L. Thorneycroft, L.
Kinloss, Ly. Trefgarne, L.
Kinnaird, L. Trumpington, B.
Kinnoull, E. Vaux of Harrowden, L.
Kinross, L. Vivian, L.
Long, V. Wakefield of Kendal, L.
Loudoun, C. Ward of Witley, V.
Lucas of Chilworth, L. Westbury, L.
Luke, L. Willoughby de Broke, L.
Lyell, L. Windlesham, L.
McFadzean, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

The Deputy Chairman of Committees (Baroness Wootton of Abinger)

I have to point out that if Amendment No. 6 is agreed to I shall not be able to call Amendments Nos. 7 to 11 inclusive.

5.42 p.m.

Lord Bellwin moved Amendment No. 6: Page 2, line 1, leave out from beginning to end of line 13.

The noble Lord said: I beg to move Amendment No. 6 and with it I wish to speak to Amendments Nos. 9, 25, 26, 29, 71, 85 and 87. These amendments are a package, designed to clarify the position of rating and precepting authorities and of ratepayers, particularly where a precept or rate has been found to be unlawful. Your Lordships will, I am sure, be aware of the questions which arose out of their Lordships' decision in the GLC v. Bromley case that the GLC supplementary precept, levied last year, was invalid. Questions were raised relating to the powers of local authorities to reduce a partly invalid rate and their ability to refund ratepayers who had already made payments to meet the invalid precept.

These amendments seek to make a new statutory provision to deal with the complicated rating issues which arose. But your Lordships are aware that the Bill has always made invalid supplementary rates or precepts relating to 1982–83 and all future financial years, regardless of the date on which those rates or precepts were made or issued.

The Bedfordshire County Council, as I know your Lordships are also aware, issued a supplementary precept for 1982–83 in the mistaken belief that this would stand after the Bill becomes law. However, as we have made clear many times, it will fall on Royal Assent. As a result of this misunderstanding about the effect of the Bill, the authorities and ratepayers of Bedfordshire have been in some confusion as to their obligations and duties before and after the passing of this Bill. We have therefore ensured that these new statutory provisions provide authorities with the power to substitute for rates and precepts and a duty to make refunds to ratepayers, where appropriate, will apply equally to the ratepayers of Bedfordshire.

Since my right honourable friend announced in another place the Government's intention to table these amendments we have had useful discussions with the local authority associations on both the principles and the details of the amendments. It might be helpful if I outlined for the Committee what these amendments are designed to achieve.

New Clause 25 gives rating and precepting authorities the power to substitute rates and precepts for those previously made for the year, whether valid or invalid. This would, for example, enable an authority whose rate has been quashed by the courts to make a new one or, indeed, to substitute its rate in anticipation of it being quashed. The new rate or precept must not of course be higher than the one for which it is substituted, since this would defeat the object of the ban on supplementary rates and precepts. The new clause also provides that ratepayers and rating authorities who have paid sums to the rating and precepting authorities are entitled to get back their excess payments if they want them. Otherwise it is left to the discretion of the authorities whether to repay or credit the excess.

New Clause 26 provides, in the light of the GLC v. Bromley case and a number of other recent cases, that the validity of a rate or precept can, on the grounds specified, be challenged only in the High Court, and that where relief is granted the court shall quash the rate or precept entirely. This latter is necessary for the operation of the substituted rate procedure which I have just described. By providing that appeals against a rate in its general application to ratepayers should go to the High Court, we are again trying to clarify matters. Doubts have arisen recently as to whether the Crown court has jurisdiction to decide such appeals. We think that the High Court is the appropriate forum, leaving the Crown court with jurisdiction to decide appeals against the rate as it affects individual ratepayers.

New Schedule 71 comprises transitional provisions to deal with any supplementary rate or precept, or a rate or precept made for a period other than a year, made before the Bill is enacted, and whether before or after 1st April 1982, in respect of a period beginning on or after that date. These would in any case fall on Royal Assent, and the schedule covers the repayment of sums paid in respect of supplementary rates and precepts. It also provides that a rating authority whose main rate is partly to meet a supplementary precept shall make a new rate, lower by the amount of the supplementary precept. In that event, the provisions of new Clause 25 ensure that sums paid in respect of the supplementary precept can be repaid. The schedule also provides that if a rate or precept is made for other than a financial year, a new one must be substituted for the complete financial year.

Finally, new Clause 29 consolidates all the provisions relating to the interpretation and commencement of Part I. The amendments to the title, Clauses 1 and 2 and to Schedule 4 are consequentials. These amendments are designed to clarify a complex area of rating law and I commend them to your Lordships. I beg to move.

Lord Bruce of Donington

The Committee will be indebted to the noble Lord for having explained the new clauses to which Amendment No. 6 is a lead-in—which we have not had very much opportunity to consider, for reasons which the noble Lord has given an indication that he immediately recognises.

These are very important amendments, which arose originally from the famous case of the Bedfordshire county council who made what I shall describe for the moment as an initial precept, prior to 1st April, at a lower level than the majority party at that time, which was the Labour Party, wanted. There was then another meeting of the full council at which a supplementary precept was made in order to bring it up to the level at which the majority party had made the political decision that the rate should be set. Both of these events took place before the strategic date of 1st April. As a consequence, two district councils to whom precepts were sent at the old rate proceeded to sit on theirs. And when the supplementary precept went out, two others decided to raise a levy on their ratepayers. So we have a situation where two district councils have not passed on the precept to their ratepayers and two district councils have done so. That has produced the situation of which the noble Lord complains.

But Amendment No. 25 has nothing to do with the validity of the precept. I will come back to that point presently, because it has been implied—although I am sure that the noble Lord did it quite unwittingly—that Amendment No. 25, which deals with the substitution of one precept for another, was somehow connected with the validity of the precept which it replaced. It is, of course, nothing of the kind. Amendment 25, whether or not the validity of any precept is being challenged, gives the power to an incoming council, newly elected at an election after 1st April, which wants to reduce the rate set out in the budget, and indeed the rates of its predecessor, to reduce the rate, if it so wishes. One might have the circumstance in which a Conservative authority makes its appropriate rate and issues its appropriate precepts on 1st April and an election takes place after then, in May. A Conservative council may thereupon be elected and this amendment, Amendment No. 25, gives the incoming council the authority to substitute a new precept and a new rate budget altogether.

On the other hand, it applies only in that way. If, for example, there was a Conservative council up until the election in May which had already made its budget—one would assume on a basis friendly to the diktats of the noble Lord's right honourable friend, the Minister of the Environment—and then a Labour authority was elected in May which wanted to increase the rate or precept, it would not have the power to do so. This is all that the clause really means. It is a way of ensuring almost on a ratchet basis that the rate can always be driven down on a change of political authority but can never be raised.

A political party that goes to the electorate may for perfectly good reasons say that, in view of the circumstances of the population, which it knows quite well; in view of the social circumstances of many of its aged inhabitants; and in view of circumstances relating to housing, roads and other things, it thinks that more should be spent during the forthcoming year. It tells the electorate that that is what it proposes to do because it believes that expenditure within the borough will serve a very useful purpose to the benefit of the majority of the population of that borough. If the party goes to the polls on that sort of programme—having explained it quite clearly, concisely and reasonably—and wins the election, then it will be inhibited by this clause from carrying out the mandate for which it was elected.

I do not call that democracy. The noble Lord, Lord Bellwin, can call it what he likes—but it is a complete violation of local democracy. The noble Lord himself made use of the mandate when his party was returned to power in May. He said that his party had a mandate to do things, and therefore, they could do them; they promised to do them, they were elected to do them, and were going to do them. Is that not so? Why then, if any Labour, Liberal or Alliance party goes to the polls and explains its policies, and succeeds in convincing the electorate that its proposals are more reasonable, wider and better for the locality than those of the Conservative party, will it under this particular clause be inhibited from carrying out what it said it was going to do?

If this clause is carried all the way through, local councils might as well pack up, because there is no further function for them to perform. They are inhibited from obtaining a mandate from the electorate because they know perfectly well that they cannot carry it out. I am quite sure the noble Lord is not really that kind of man. Perhaps owing to the way in which this work was done—to the consultations which had to be held and the legal opinions which were required to be assessed—this clause as set out in its present legal form does not meet the true wishes of the noble Lord. Maybe the noble Lord will wish time for reflection and will be able to say to us, "Now look, my civil servants cannot take me this far. This is really a bit too much. We will come back to it on Report". The noble Lord will readily have seen the manifest way in which a legal diktat can be used to gag the electorate and to gag a political party with which the noble Lord's party happens to disagree.

I pass to Amendment No. 26, which has been dealt with by the noble Lord. There are two ways of dealing with an alleged validity of a particular precept that has been made. The way that has hitherto been used is for an application to be made to the courts and then for the courts to decide, as in a recent case, that perhaps part of the precept was invalid. If it is a comparatively small amount the court might decide to declare that part invalid—but in such a way that it did not need the setting-up of a completely new precept, but merely carried over the balance for adjustment in the next period. That seems to be a very sensible way of dealing with it. Now we have a really heavy one. If the precept in any one, small, material particular can be declared upon application to the High Court to be invalid, one is faced with the necessity for invalidating the whole precept, even though the amount involved might be quite trivial.

Consider what that is going to mean for a local authority. It means that it will have to send out a corrective precept. It means that those who act upon that precept and proceed to levy rates on their individual citizens and business enterprises will have to send out an amended precept to each, involving repayment or otherwise of money, and so on. This will be an enormous administrative problem. On balance, I would have thought it was far better to leave the position as it was.

But then, of course, the noble Lord had the Bedford Council position to deal with, and perhaps this was the only way he could conceive of dealing with it, in spite of the fact that his right honourable friend in another place thought that the clause as it stood before was quite capable of dealing with the Bedford situation. Evidently it was not. I do not see why the House should be impaled because of the legal difficulties in which the noble Lord and his department have found themselves. These two amendments—and they are consequential amendments—are not acceptable to us on this side of the Committee. We shall certainly seek to obtain the support of all democrats for the particular repudiation of Amendment No. 25, but we shall of course vote against the others because, as the noble Lord has described them, they are all part of a package—rotten though that package may be.

Lord Bellwin

If I were to use the same kind of emotive language throughout this whole Committee stage, I am sure we would not get as far as we ought to get. I can use words like "rotten package" and all the rest. I do not think it really advances the noble Lord's case, and I do not intend to do that kind of thing. So far as my experience goes, it was always understood that whether you won or lost—I come from an authority where control changed very often—if you gained control when the Opposition had made the rates you stuck with that rate. There are always balances; there are always contingencies; there are always things you can do during the year. That is what all reasonable authorities do, regardless of how far control changes. That is the practicality of it. It is quite wrong to say that, after coming in with a mandate, having said you would spend more on this or that service, you are then prohibited from so doing. The fact is that there is great scope within local authority finance, to shuffle around from one vote head to another; there is freedom to spend more or less on education, housing, social services or whatever you like to do, despite what you might have committed yourself to spending at any moment in time. So there is no case for the emotive argument which the noble Lord makes implying that this is some great new suppression of local authority freedom. It is nothing of the kind. It is really a red herring.

What we are really trying to do with these amendments, especially Amendment No. 25, is to clarify the position, which clearly has to be clarified because there is uncertainty and concern. The noble Lord, Lord Bruce, knows that is one of the objects of this particular exercise. The amendments are not intended specifically for Bedfordshire County Council. Many of your Lordships will know that my right honourable friends made a commitment to make these amendments before Bedfordshire took their decision to levy a supplementary rate; the commitment was made during Committee stage of this Bill in another place. They were inspired by the position which arose from their Lordships' decisions in the GLC—Bromley case.

It would clearly be inconsistent with the ban on supplementary rates and precepts if it allowed an authority to make a substituted rate or precept higher than the previous one. It is as simple as that. It is an attempt to make clear what is the position as regards people and companies who have paid a rate in good faith and then find that there is a changed situation; how do they restore the position? That is the point of the clarification. I close on the point I have made; if I were as concerned as the noble Lord, Lord Bruce, is—and I know his concern is very genuine; I appreciate that and he knows that I understand that—but I would really say to him that in practice the real practical possibilities are that all reasonable authorities who are not committed to go from one extreme to another will live with the rates of their predecessors. It was always thus and many in your Lordships' House will surely confirm that this was so. If it was not so, how on earth have they managed in Scotland in the past when there have been changes of control there? How is it that we are only talking about supplementary rates here for the first time; we are told it has been seldom used. So what happened before when control changed hands? It was never such a catastrophic situation before, and it will not be again.

Lord Hill of Luton

If I may help to bring the discussion down to earth, at Second Reading I urged upon the Minister that he should make absolutely clear whether the relevant clauses in this matter were retrospective or not. As your Lordships would expect, he has carried out that undertaking to the full. This is clearly, like it or not, retrospective.

There is just one mercenary element in this that I must mention. If I quote the case of Luton, noble Lords will understand. They have got to return money to the ratepayers, having secured the return of money from the county council raised on its supplementary precept. It is a very difficult problem. There are, of course, those who have paid in full; they are relatively easy. There are those who have begun to pay in instalments; there are those who have not paid at all; there are those who are paying as part of a total weekly payment for a council house. Indeed, there are those who began the year in Luton, during which they paid an instalment or indeed the full rates, and have now moved somewhere else. And there are those who come in during the rating year. It is a very difficult matter, but it has got to be done. Money has been taken from them which by this retrospective decision is now illegal.

But it is going to cost a lot of money. I understand Luton expects it to cost £50,000 to ascertain who are the potential recipients and what they are entitled to. It is a very expensive business. Who is going to pay? I am not going to destroy the peace that prevails by suggesting where the payment should be made, but it should not be made by Luton ratepayers. Why should they lose £50,000 by this sequence of events? It really is not good enough. If they have no balances they have to cut some services, or borrow, with the consent of the Minister.

I really think that where an authority has in no way misbehaved, has in no way done less than or more than it should have done, it should not be fined to the tune of £50,000. It is not for me to say who should pay, except that there is no decent or respectable case for the ratepayers of Luton to pay this extra money, probably £50,000. So while thanking the Minister warmly for establishing, one way or the other, the retrospective principle, and so clearing away a lot of doubt, I would ask him to give his mind between now and the next stage as to who should pay the additional cost of returning this money, instead of leaving it, as the Bill seems to leave it, for the ratepayers of Luton, who have done nothing naughty, broken no law. Rather than leave it to them I think the burden should be placed elsewhere.

Lord Bellwin

The noble Lord raises a very interesting point and I would like to look into it carefully. I understand that in Brent, for example, only about 300 of the 80,000 ratepayers in the borough asked for a refund of sums paid in connection with the GLC precept. If it should be that Luton and Bedfordshire have a special situation that is a problem for them which involves costs of the kind the noble Lord mentions, I would want to have a look at it and see what the implications are. I do not know what one could do or how to do it, but I certainly accept the point and would want to see exactly what it is. I assure the noble Lord, Lord Hill, that I will do that and see what one is able to report as we go along.

Baroness Fisher of Rednal

I have a great deal of sympathy with what the noble Lord, Lord Hill, has just said. That is aggravated in those local authorities that also had the county precept to repay. They will have to repay the county precept as well as the rate increase that they levied, which places a double burden on those local authorities.

If I could follow on what my noble friend Lord Bruce said, I do not want to get into a long political discussion about it, but does the noble Lord see problems because political parties have different philosophies? I use the example of privatisation, which is the nice word that we use now. Many local authorities say that they will save, for example, £½ million on privatising refuse collection and another £¼ million on privatising something else. An election address that came through my letterbox said that there would be a saving of about £1¼ million on privatisation. Does the Minister see that as a problem? If a local authority goes in for extensive privatisation and saves all the money which we are led to understand it will save, but it then loses at the next election, what it has decided its rate will be will obviously take into consideration a lesser amount because of privatisation.

Let us suppose that the Labour Party took control, or it might even be the Alliance, and decided that it did not want to privatise refuse collection—I take that as an example: it might find itself short of £¼ million or £½ million. Does the noble Lord see that as a problem? This follows on from what my noble friend has just been saying. I see it as a serious problem. As the noble Lord has said, Leeds is no different from Birmingham; it swaps and changes like the weather and next year there might be a complete change of party with a different political philosophy.

Lord Bellwin

If it should be that an authority does privatise its refuse collection (to use the example which the noble Baroness gives) and saves £1 million or £¼million—I have heard the figure for Birmingham talked of as £4 million, but I do not know what it is—and if it should be that it provides a satisfactory level of service and saves its ratepayers some millions of pounds, can the noble Baroness really envisage a situation where a party would come back to power and say, "We do not want to make that saving. We want to pay more"? With respect, I cannot see where that would ever be likely to arise.

If the noble Baroness had said that the authority had said that it would privatise and that it would save £X million or whatever, but had not achieved that, then it would be another matter. But if it does achieve it—and although I would love to go into that debate now, in view of the time I do not think that I ought to do so—then I assure the noble Baroness that there would be no problem, because I cannot see how any party could then say, "Well, it is true that we are now saving all this amount of money, but we do not think that we should save it and, therefore, we shall go back to the other system". I do not think that that would be the problem.

Baroness Fisher of Rednal

Perhaps I did not put the case as clearly as I ought to have done. As the noble Lord said, if the services that were being provided were equal, then I would support the noble Lord's case. But more often than not the new service will be a lesser service. I use the example of local governments that have decentralised their housing repairs. They have very good housing repair depots on all their large council housing estates. The tenants are in direct contact with the man who sits in a little shed and the work is carried out. Therefore, there is an excellent service. I was saying that if that excellent service were taken away and privatised, and there is a worse service, there would be difficulty in getting the original service back. I go along with what the noble Lord says in the case where a better service is provided, but I doubt whether that would be so.

Lord Bellwin

I did say that I did not want to go into a whole debate on this matter. However, if I did do so then I would want to say one thing; namely, the that record so far shows in the main that where the kind of service that the noble Baroness mentioned is done by the private sector, the standard of service—I shall say no more—is every bit as good as it was. I shall not make the claims for it that others do. But certainly it is as good, so I do not think that we shall have that problem.

But if in the hypothetical case which the noble Baroness put forward there was a diminished service, a worse service—and I think that is the only situation in which her point comes forward—then it would be for the party taking over to say, "Look what our service was before; look what it is now". Therefore, on the merits of the case they would have a very powerful argument. They would then do what I have said has always pertained in the past: they would say, "We will now find ways of doing things within our estimates"—and there are all the balances, the contingencies, the right to vire, the opportunities to manoeuvre. I am sure that they would find a way if they really wanted to do so, but, by Jove!, it would be a very bold authority which was saving money and was prepared to say, "We do not want to save this money"—unless the case was as the noble Baroness said.

Viscount Ridley

Would my noble friend care to speculate whether the promise of privatisation in Birmingham resulted in that city becoming Tory controlled last week?

Lord Bellwin

No, I would not want to speculate because I know somewhere where the promise was made and it did not result in the same thing—would that it had!—but it did result in some gains, for what it is worth.

Baroness David

I should like to go back to the main purpose of these clauses. I believe that the main purpose is to get at Bedfordshire and to deal with the Bedfordshire problem. I do not think that we would have had all these clauses if it had not been that the Government wished to right that situation. They have shown an extraordinary lack of confidence in their own Bill. I read through the Committee sittings in the Commons—the 20th and 21st—which dealt with the Bedfordshire situation. The Minister said with confidence on a number of occasions that the Bill as drafted would deal with the situation. Clearly the Government have decided that it does not do so if they have to bring in these new clauses to cover it. Admittedly they do a few other things as well, but I believe that this is the main thing they do.

There is real danger in having retrospective legislation. The noble Lord, Lord Hill of Luton, has made some of my points for me. There is the complication of claiming back the rates and the trouble that it makes for the rating authority. I am told that all the London treasurers are tearing their hair because of all the time they have to spend on getting the money back because of the judges' decision on the GLC transport case. It is so very difficult practically, and it takes up a great deal of officers' time. Retrospective legislation is a great mistake. The cost of the collection, as the noble Lord, Lord Hill, said, is the district's affair and has nothing to do with the county which is the precepting authority.

Again, this is another change. We have had so many changes. A number of officers have said to me that it is the constant changes which are wearing them out. So many local authority officers are now retiring early or at the first possible opportunity because the job is no longer the pleasure that it used to be. They are having to cope with these evermore numerous changes which are very difficult for them. The noble Lord, Lord Hill, has mentioned the difficulties about the many ways in which rates can be collected—instalments, annually, biannually and so on. In my view, these clauses are very bad indeed and I shall have very great pleasure in voting against them.

Lord Hill of Luton

Is the noble Baroness suggesting that the money that has been legally extracted from the pockets of the ratepayers of Luton should not go back to them?

Baroness David

This Bill is not law as yet and there has been a dispute as to whether the Bill as it originally stood would make Bedford's extra rate illegal. It certainly is not illegal at this moment.

Lord Bellwin

I want to repeat what I said before. These amendments are not specifically intended for Bedfordshire County Council. Your Lordships should bear well in mind that my right honourable friend gave a commitment to make these amendments before Bedfordshire made its decision to levy a supplementary rate. To me that is very significant. I shall say no more.

Baroness Birk

We seem to be coming to the end of a long debate on this subject. The outstanding matters that concern us on this side of the Committee are the question of what I would call the one-way democracy—that rates can be lowered but cannot be increased even if a party has a manifesto to do so; the question of the retrospective attitude in respect not only of Bedfordshire but of anywhere else, if the noble Lord so wishes; and the whole question of appeals—that it would now have to go to the High Court, and what was found was pointed out by my noble friend Lord Bruce over the Kensington and Chelsea case.

All this seems to be a mixture of a very illiberal and undemocratic approach. It certainly increases bureaucracy, although I should not have thought that that was the Government's intention. The whole thing appears to have been worked out in an extremely awkward but certainly painstaking way. I can now quite understand why it took so long to get these wretched amendments before us at all. It took a lot of doing and I think that the officials should be congratulated on so doing, although what they did is an unhappy thing. Nevertheless, it is done, and it is there. But it combines a whole package of more bureaucracy, fewer liheral attitudes and an extraordinary attitude towards the courts. This is all in aid of trying to strengthen the Bill. At least we are seeing this in its virgin state and, on this side of the Committee, I do not think that we like it very much at all.

6.22 p.m.

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

Their Lordships divided: Contents, 83; Not-Contents, 52.

Airey of Abingdon, B. Ampthill, L.
Alexander of Tunis, E. Auckland, L.
Allerton, L. Avon, E.
Balerno, L. McFadzean, L.
Belhaven and Stenton, L. Mackay of Clashfern, L.
Bellwin, L. Macleod of Borve, B.
Bessborough, E. Mansfield, E.
Blake, L. Margadale, L.
Boardman, L. Marley, L.
Caithness, E. Merrivale, L.
Campbell of Croy, L. Mersey, V.
Cathcart, E. Morris, L.
Cockfield, L. Mottistone, L.
Constantine of Stanmore, L. Murton of Lindisfarne, L.
Nugent of Guildford, L.
Craigavon, V. O'Neill of the Maine, L.
Cullen of Ashbourne, L. Orkney, E.
Denham, L—[Teller.] Pender, L.
Ebbisham, L. Penrhyn, L.
Eccles, V. Plummer of St. Marylebone, L.
Elton, L.
Enniskillen, E. Rankeillour, L.
Fortescue, E. Ridley, V.
Fraser of Kilmorack, L. St. Davids, V.
Gainford, L. Sandford, L.
Gormanston, V. Sandys, L.—[Teller.]
Greenway, L. Savile, L.
Gridley, L. Seebohm, L.
Harmar-Nicholls, L. Skelmersdale, L.
Hastings, L. Spens, L.
Hill of Luton, L. Strathspey, L.
Holderness, L. Sudeley, L.
Hylton-Foster, B. Swinfen, L.
Kinloss, Ly. Terrington, L.
Kinross, L. Trefgarne, L.
Lane-Fox, B. Trumpington, B.
Lauderdale, E. Vaux of Harrowden, L.
Lindsey and Abingdon, E. Wakefield of Kendal, L.
Long, V. Ward of Witley, V.
Lothian, M. Willoughby de Broke, L.
Loudoun, C. Windlesham, L.
Lucas of Chilworth, L. Young, B.
Lyell, L.
Airedale, L. Kaldor, L.
Ardwick, L. Kilmarnock, L.
Aylestone, L. Llewelyn-Davies of Hastoe, B.
Bacon, B.
Balogh, L. McCarthy, L.
Banks, L. Mishcon, L.
Beaumont of Whitley, L. Molloy, L.
Bernstein, L. Northfield, L.
Birk,B. Ogmore, L.
Bishopston, L.—[Teller.] Oram, L.
Boston of Faversham, L. Peart, L.
Brooks of Tremorfa, L. Perry of Walton, L.
Bruce of Donington, L. Phillips, B.
Chitnis, L. Ponsonby of Shulbrede, L.
Collison, L. Ross of Marnock, L.
David, B. Stedman, B.
Davies of Leek, L. Stone, L.
Elwyn-Jones, L. Strabolgi, L.
Evans of Claughton, L. Taylor of Mansfield, L.
Fisher of Rednal, B. Underhill, L.
Hampton, L. Wallace of Coslany, L.—[Teller.]
Harris of Greenwich, L.
Houghton of Sowerby, L. Wells-Pestell, L.
Jacques, L. Whaddon, L.
Jeger, B. White, B.
Jenkins of Putney, L. Winterbottom, L.
John-Mackie, L. Wootton of Abinger, B.

Resolved in the affirmative, and amendment agreed to accordingly.

[Amendments Nos. 7 to 14 not moved.]

6.30 p.m.

On Question, Whether Clause 1, as amended, shall stand part of the Bill?

Lord Sandford

I do not think I can let Clause 1 go by without making one or two observations on the matters we have been discussing. I think it is true to say that most local authorities have accepted that central government have the right to impose financial constraints on public expenditure, and the great majority of them have succeeded in bringing their expenditure within those constraints. The situation last summer was that the great majority had achieved that, but by the autumn the efforts of the great majority had been completely set at nought by the irresponsibility of a few authorities led by the notorious Greater London Council. It is for that reason that we are having to deal with this sort of legislation, and it really is hypocrisy for the party opposite to pretend otherwise.

I look forward, as we all do, to the introduction of radical and fundamental changes to the financing of local government, and we have just had a good example of the absolute necessity to do away with precepting altogether. That is one of the features. But, in addition to that, it will be necessary before local Government can be made to work again properly for the irresponsible element that were responsible for what happened in the GLC, and have just been responsible for what has just happened in the Bedfordshire County Council where a combination of Liberal and Social councillors overturned the decision of the main budget meeting of the council a fortnight later, to be stopped by the political parties. We shall never get any progress until that kind of thing is stopped.

Lord Bruce of Donington

I really think I have to respond to the noble Lord who has just spoken on clause stand part. It is all very well for members of any political party to declare that the actions of their opponents, or any section of their opponents, are irresponsible. I will not go into the merits of the GLC case for the moment, save to point out that the mandate that the GLC obtained for what it did was quite decisive and perfectly open.

Furthermore, members of the legal profession, who tend to be in profusion, and deservedly so, in your Lordships' House, gave conflicting advice on this. It is not as though the GLC were not advised with the best quality legal advice that could be obtained as to the legality of what they did. I must tell the noble Lord that at any rate among the legal circles with whom I have the privilege of associating from time to time there is some dubiety as to where the law really stands anyway following the particular judgment to which he refers. Therefore, I do not think that we ought to talk in those terms.

The whole series of amendments that we on this side of the Committee have endeavoured to persuade your Lordships to agree with has been put forward with one aim only, and that is to endeavour to restore responsibility to local authorities, comprising the elected representatives of the people—the responsibility for carrying out the policies on which they were elected and for raising the funds for that purpose. Sometimes I think that all of us—I include myself in this—tend to take a hostile attitude towards rates. I had a rate demand dropped in my letter box a while back the contents and amount of which frankly appalled me. Therefore, as a person who has to pay out of his own pocket a rate demand—and I perhaps ought to inform your Lordships that I have a personal interest in this in that I pay rates within the Royal Borough of Kensington and Chelsea, and that from what I can gather I am paying at about roughly double the rate of the average for Kensington and Chelsea—my immediate response to it was to say, "Well, hang it, this is a wee bit high".

Then I endeavoured to analyse the services that we all, as ratepayers, get from our local authorities. I believe the average weekly rate payment in Chelsea is some £13, which means that the lowest must be somewhere in the region of about £6 or £7, and the higher ones, including regrettably myself, pay roughly double the average, or possibly even more. But on looking through the services provided by the local authority—and the Royal Borough of Kensington and Chelsea were kind enough to send me a copy of how they spent their money and what proportion they spent on the police, magistrates, probation and after-care—I said to myself, "Well, after all, is the police service in London, and in my own particular borough, satisfactory? I am bound to say it is, and I am bound to say that I derive some personal benefit from it".

I am talking only on my own account, but I can go all the way through and say that possibly the better-off people in London, or elsewhere in the boroughs, are probably spending less a week on their rates than they pay for a perhaps once a week visit to a restaurant for a dinner at current prices, and yet they complain. We have no business to complain. The benefits that the ordinary ratepayer gets from his local authority—and I speak without reference to any party in particular—are pretty good value for money anyway.

I know we are coming at a later stage in Part III of the Bill to those clauses that deal with audit, and checking for waste and so on. So be it. We all desire to see that. But sometimes when we are discussing rates I think that we ought to remember that all of us, at whatever income level we are and whatever rates we pay, are in any event getting very good value for money indeed. It is high time that the snide attacks, the press attacks—from editors who probably get twice as much on their expenses allowances as they even pay on rates—on all public expenditure, as being essentially something that is bad and anti-social, stopped.

It would be far better if, instead of regarding rates as some kind of despicable burden which everybody pays with reluctance—and of course nobody likes shelling out money of any kind, wherever one goes—one kept the matter in proportion regardless of the inequalities and inequities that exist within the existing rating system. As I say, the value as a whole is good. Our regret is that the liberty of local authorities and their councillors to react to the moods, wishes, desires and needs of their citizens as they see them are being eroded by the Bill, in particular by this clause. We very much regret that and assure the Minister that we shall return to the matter again.

Viscount Ridley

I have not been able to take part in the debates on this part of the Bill but I feel strongly that the Government are right to abolish the supplementary rate and I am glad that Clause 1 does so. I equally strongly support my noble friend Lord Sandford in that the time has come to end the system of precepting. It is responsible for the troubles of Luton and many other places and it must be the Government's aim now to move as soon as possible to some system whereby each tier has its own source of finance.

Baroness Stedman

The debates today have ranged wide and over many subjects, but I feel that we cannot let this part of the Bill pass without reminding noble Lords opposite that there is still considerable disquiet among local authorities and their members about the effects of the Bill and the fact that although very few of them have used the supplementary rate, there has always been that safety net there. I and my colleagues in the SDP and the Alliance want to see local authorities budget carefully and prudently. but Governments do not always interpret what they see in the crystal ball in the right way. They do not always get their answers right about what will be the level of inflation, what will be the possible salary and wage rises or what will be the material costs in which local authorities must deal, and until now the local authorities have had the safety net of the supplementary rate, albeit very few of them have had to use it. The Bill as drafted allows the Government to get their sums wrong, but if the local authorities also get them wrong through following the Government's advice, they no longer have the guaranteed safety net of a possible supplementary rate under them to get them out of difficulty. I believe there is still a case for the availability of the supplementary rate to be retained.

Clauses 1 and 2 should be deferred until 1983, and I am still unhappy about the new clauses which the Government have just carried in a Division because the retrospective element of legislation is still in the Bill. We should not let the Bill go as it is; we should make our protest, although it will make no difference to the Bill and this part will, no doubt, go through. The alternative which the Government are suggesting—of special borrowing powers—goes against the established principle in local government that the relevant finance should be in the same operation as the determination of the expenditure. If that is no longer to be allowed, it involves central Government's interference in local affairs, and that is regrettable.

Lord Bellwin

I do not want to go yet again round the track we seem to have been circling for the last few hours. Perhaps I should comment, on the general philosophical points, that as the Committee will be aware, I by no means see the bogies that concern noble Lords opposite. There is no shortage of precedent; the Scottish situation does not throw up the kind of concerns that have been expressed today. The supplementary rate, as has been said, was hitherto almost unknown, used only in the last year or so. It was never even contemplated before and there was no need for it, despite the fact that there have for years been situations where pay and prices have been quite different from what successive Governments forecast they would be. Despite all of that, authorities did not have to resort to a supplementary rate, nor in my view was it necessary.

It becomes necessary not as part of something you did not expect or foresee but when you are determined and massively to increase your expenditure; as I say, not because events have overtaken you but because that is your positive decision. That is how we have, for the first time—or in practical terms for the first time—come into this whole area, which has become such a burden to so many people. It cannot be wrong, in my view, to protect people from it, not least businesses, and it is at our peril that we simply shrug off business and commerce as being of little consequence. If we are genuinely concerned about employment and jobs, as we all say we are, we cannot turn away from the fact that in a survey of 500 companies in London, three-quarters of them said they reduced, closed down, or moved out because they could not afford the rates. How many retail people are saying the same? That represents jobs too; people work in shops just as they work in other places. We must therefore be concerned about what happens to rates, and simply to impose a supplementary rate on people who are not anticipating it can be devastating in its impact, and unhappily the number of jobs lost for that reason is there to be seen if one wants to analyse the figures.

As I said at the outset, we have been round this track a few times already today. Clearly there is a a difference of view. I do not see the sinister aspects of what we are proposing. On the contrary, it is protective of people and need not be the problem of which noble Lords have spoken. What my noble friend Lord Ridley said about precepting is all part of the debate in relation to local government. Some would say the debate is only just beginning. That is for another day, and I urge support for the clause.

Clause 1, as amended, agreed to.

Baroness Stedman moved Amendment No. 15: After Clause 1, insert the following new clause:

"Duration of Part I of this Act

.—(1) The provisions of Part I of this Act shall cease to have effect at the expiration of one year from the date on which it comes into force unless extended by order of the Secretary of State made by statutory instrument.

(2) No statutory instrument containing such an order shall take effect until it has been approved by resolution of the House of Commons."

The noble Baroness said: I shall be brief because we have not got far with the Bill yet, though we have been at it a long time. The amendment is straightforward. It simply asks that the duration of Part I shall be for 12 months from the time the legislation comes into force, and it gives the Government, as the noble Baroness, Lady Birk, was asking earlier, the opportunity to renew Part I and look at it to see if it is really working, and that can be done by statutory instrument subject to the affirmative procedure.

The Secretary of State and his Ministers have said in another place that it is an interim measure. Local authorities and their associations do not like the Bill, but they might be a little happier about it if it were treated as legislation lasting for only one year, and would then be reconsidered. It would also enable the Government to decide what action they are proposing to take on the rating system and for those proposals also to be considered by Parliament as a whole. Many of us feel that the legislation would be better introduced as an interim measure and not as primary legislation for all time. Parliament would then have an opportunity to review these major changes annually, and the amendment would allow for just that. I beg to move.

Lord Bellwin

We debated an amendment similar to this on Report and I am not sure I can add a great deal to what I said then, except to repeat that this is in no way a temporary expedient. Nor is it intended to avoid the need for the fundamental reform of the domestic rating system to which, I repeat, we are committed. The ban on supplementary rates and precepts could indeed, therefore, be an interim measure in the domestic sector, pending our proposals for reform. But as regards the commercial and industrial sector, where rates will remain for the foreseeable future, the ban will continue.

I hope it is clearly understood that authorities remain free to plan their expenditure and initial rate levies as they think fit. The effect of the ban on suplementaries is simply and solely to oblige them to live within their means once they have set the rate or precept for the year. That is what it is about. It is not in any way as onerous as noble Lords opposite feel, and I therefore hope the noble Baroness, Lady Stedman, who knows so much about the whole scene, will, at least in time if not now, say, "It really was not as bad as we thought".

Baroness Birk

I should like to support the noble Baroness, Lady Stedman, in what she said on both the amendment and Clause 1 stand part. The Minister is uite right in saying that we had a debate on the earlier amendment that I moved, but the present amendment involves a slightly different approach to the matter, and perhaps the Minister will consider that it has a greater attraction for him and for the Government, since it would involve a statutory instrument, rather than legislation having to be renewed each year. The amendment makes a very specific suggestion. It lays down a way of dealing with the matter. It makes it quite clear that the statutory instrument would have to be approved by resolution of the House of Commons. It proposes the use of the statutory instrument, which is a much less cumbersome way of doing things than having to bring in new legislation in order to change, or get away from, old legislation.

I must reiterate what the noble Baroness said about a safety net. This is the point that we have been trying to get across, but unfortunately it does not seem to have made any impact at all. It is so important that authorities should know that there is this safety net for use where needed. It need not be used all the time; it has not been used all the time in the past. But there is a feeling among local authorities that their safety net is being taken away, that they are being stripped to the bone, and that they are not being trusted at all. As so many of us have said during the many long hours spent on amendments this afternoon, this feeling is causing so much anguish among local authorities.

It is not good enough merely to point out that some authorities behave irresponsibly. The noble Lord who said that is not in his place at the moment, but I would say that I suppose there are authorities that behave irresponsibly, there are individuals who behave irresponsibly, there are businesses which behave irresponsibly, and there are Government departments which sometimes behave irresponsibly; but because of that there is not imposed an overwhelming rule, thus making it impossible for anybody to have any breathing space. We have seen all the way through the Bill what amounts virtually to a complete shutdown, and that is what we all find so objectionable. We have tried to make the point by many different means and proposals, some of which I should have thought the Government would have been able to consider. We have now reached the stage after the first clause of the Bill and have got nowhere; it is very sad.

Baroness Stedman

I have listened to what the Minister has said, and I am grateful to the noble Baroness, Lady Birk, for her support. I really consider that I must test the feeling of the Committee on this amendment. Members on the other side of the Committee know of the disquiet that there is on this side about the effects of the Bill and the clause. Surely it is not too much to ask that the Government come back in a year's time with a statutory instrument, and I should be delighted if I were able to be the first to say to them, "It has worked, we were wrong, and you were right". I now say please, let us have one more chance, let the Committee agree that the Government should come back with a statutory instrument for affirmative resolution in both Houses. Then we can be quite sure that we have got it right. I am sorry, but I must ask the Committee to vote.

6.54 p.m.

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

Their Lordships divided: Contents, 46; Not-Contents, 67.

Airedale, L. Jenkins of Putney, L.
Aylestone, L. John-Mackie, L.
Bacon, B. Kaldor, L.
Banks, L. Kilmarnock, L.
Beaumont of Whitley, L. [Teller.] Llewelyn-Davies of Hastoe, B.
Bernstein, L. Lloyd of Kilgerran, L.
Birk, B. Oram, L.
Bishopston, L. Perry of Walton, L.
Boston of Faversham, L. Phillips, B.
Brooks of Tremorfa, L. Pitt of Hampstead, L.
Bruce of Donington, L. Ponsonby of Shulbrede, L.
Chitnis, L. Reilly, L.
Collison, L. Ross of Marnock, L.
David, B. Stedman, B. [Teller.]
Davies of Leek, L. Stone, L.
Elwyn-Jones, L. Strabolgi, L.
Evans of Claughton, L. Taylor of Mansfield, L.
Fisher of Rednal, B. Underhill, L.
Hampton, L. Wallace of Coslany, L.
Harris of Greenwich, L. Wells-Pestell, L.
Houghton of Sowerby, L. White, B.
Jacques, L. Winterbottom, L.
Jeger, B. Wootton of Abinger, B.
Airey of Abingdon, B. Avon, E.
Alexander of Tunis, E. Balerno, L.
Allerton, L. Belhaven and Stenton, L.
Ampthill, L. Bellwin, L.
Birdwood, L. Lindsey and Abingdon, E.
Blake, L. Long, V.
Boardman, L. Loudoun, C.
Caithness, E. Lyell, L.
Campbell of Croy, L. McFadzean, L.
Cathcart, E. Mackay of Clashfern, L.
Cockfield, L. Mansfield, E.
Constantine of Stanmore, L. Margadale, L.
Marley, L.
Craigavon, V. Mersey, V.
Cullen of Ashbourne, L. Morris, L.
Denham, L. [Teller.] Mottistone, L.
Eccles, V. Murton of Lindisfarne, L.
Elton, L. Orkney, E.
Enniskillen, E. Pender, L.
Fortescue, E. Penrhyn, L.
Fraser of Kilmorack, L. Plummer of St. Marylebone, L.
Gainford, L.
Gormanston, V. Rankeillour, L.
Greenway, L. Ridley, V.
Gridley, L. St. Davids, V.
Hailsham of Saint Marylebone, L. Sandford, L.
Sandys, L. [Teller.]
Harmar-Nicholls, L. Savile, L.
Hastings, L. Shannon, E.
Hill of Luton, L. Skelmersdale, L.
Holderness, L. Somers, L.
Hylton-Foster, B. Trefgarne, L.
Kinloss, Ly. Vaux of Harrowden, L.
Kinross, L. Ward of Witley, V.
Lane-Fox, B. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

Lord Denham

I think this is probably a suitable moment at which to break off this Committee stage before going on to the next one. For the convenience of your Lordships, perhaps I could suggest that we should not come back to this particular Committee stage before eight o'clock. I beg to move the House do now resume.

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

House resumed.