HL Deb 06 May 1983 vol 442 cc276-8

11.22 a.m.

Lord Harris of Greenwich

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether, in view of the decision by the Council of the Campaign for Nuclear Disarmament to intensify the campaign against Tarmac Ltd., and other Government contractors at Greenham Common, they will indicate what legal and other measures they propose to take to prevent local authorities from following the example of the London borough of Southwark, in blacklisting the contractors concerned.

Lord Skelmersdale

My Lords, local authorities should be very careful as to their attitude to this campaign. It is quite wrong that political considerations of this kind should affect decisions on contracts. Authorities taking such a course would lay themselves open to action in the courts for acting unreasonably by taking into account irrelevant or improper considerations. The Government will keep in view the question whether the remedies available to firms that are discriminated against are adequate.

Lord Harris of Greenwich

My Lords, I thank the noble Lord for that Answer. Would he not agree that what is represented in the action of Southwark and other local authorities, is an abuse of power on a truly deplorable level? First, in the debate that we had on this matter in January, the noble Lord, Lord Bellwin, indicated that there was going to be a reference to the Office of Fair Trading. Has that taken place and, if so, with what result? Secondly, would the noble Lord not agree that the Government have a duty to protect their own contractors and, what is even more important, the employees of those contractors, from arbitrary action by local authorities on the lines advocated now by the Campaign for Nuclear Disarmament? Finally, does he not agree that there is a need to protect the interests of the ratepayers in local authority areas where local councils behave in this intolerable fashion? Is it not wholly wrong that, even if a tender is the lowest, it should be rejected by a local authority simply on the ground that the councillors who form the majority party in that local authority dislike the fact that the company concerned has won a contract at Greenham Common?

Lord Skelmersdale

My Lords, that was rather a mouthful of supplementary questions. Perhaps I can best answer three of them by saying that in my view it is clearly wrong that local authorities should spend money on propaganda exercises which have nothing to do with the proper functions of local government. Local councillors should remember that they are elected to serve all the residents and ratepayers in their area, and they have a responsibility to them for the proper stewardship of ratepayers' money.

As regards the reference to the Director General of Fair Trading, I understand that the Director General does not propose to make the Southwark resolution the subject of formal investigation. My own feeling is that action by the Monopolies and Mergers Corn mission does not seem entirely appropriate to deal with the manipulation of selective tendering arrangements by local authorities to support political attitudes.

Lord Campbell of Alloway

My Lords, would my noble friend the Minister not agree that the existing common law if invoked would be adequate to deal with this situation? Would he not agree that it is open to a blacklisted contractor to apply to the High Court for a declaration that that resolution is invalid, is an unreasonable restraint of trade and is contrary to public policy? Would he also not agree that that contractor could also claim damages against the council and its members in conspiracy to injure him in his way of business without lawful justification or excuse or even perhaps—

Noble Lords

Order! Reading!

Lord Skelmersdale

My Lords, with the greatest respect to my noble friend, I am not myself a court of law. However, I can confirm that court action could be taken by a firm affected by the decision or by a ratepayer or a councillor for the area, if that were deemed to be appropriate.

Lord Avebury

My Lords, could not the contractor, if he submitted the lowest tender and it was rejected for whatever reason, be it political or otherwise, complain to the district auditor and could not then the councillors who rejected that lowest tender and preferred the higher one, be surcharged with the difference?

Lord Skelmersdale

Yes, my Lords, but that goes very much wider than the general terms of the Question on the Order Paper.

Lord Harris of Greenwich

My Lords, the noble Lord has indicated this morning the anxieties of the Government as regards this matter. First, is he going to draw the attention of the local authority associations to the answers that have been given today? Secondly, do the Government not recognise that they have a direct responsibility to their own contractors and those who work for them? Is it not necessary for the Government to demonstrate that they are going to protect the interests of employees of companies of this kind who are going to be treated in this wholly unreasonable fashion by local authorities as a result of pressure from the Campaign for Nuclear Disarmament?

Lord Skelmersdale

My Lords, I most readily undertake to inform the associations of local authorities as to the exchanges in your Lordships' House this morning, but I must make the point that it would be quite inappropriate for the Government to legislate because of a particular case. It would be wrong also to rush into new legislation without evidence that the existing remedies failed to work.