Lords Sitting of 26 April 1984

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Lincoln.

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, before the commencement of business, I take the opportunity to inform the House that I have accepted an invitation from the presiding judges and the administrator of the Northern Circuit to be present to receive Her Majesty The Queen and his Royal Highness The Duke of Edinburgh at the royal opening of the Queen Elizabeth II Law Courts in Liverpool which will take place on Wednesday, 2nd May 1984. Accordingly, I trust that the House will agree to grant me leave of absence for Tuesday, 1st May and Wednesday, 2nd May.

Alternative Energy Sources
3.6 p.m.
Lord Ezra: 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 what funds they have made available for the development of alternative energy sources, compared with previous years; and which of these sources they consider offer the best prospects.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, my department spent about £11 million on renewable energy research and development in 1983–84 and expects to spend about £14 million in 1984–85. The renewable sources which offer the best prospects are wind energy, geothermal energy, and some aspects of biomass.
Lord Ezra: My Lords, in thanking the noble Earl for that reply, may I ask him whether he is aware that on an authoritative estimate it is considered that, starting in 1985, after the present programme has been completed, something of the order of £100 million to £200 million per annum should be spent on the development of alternative energy sources in order to achieve results which would justify previous expenditure? I should be very glad if he would comment on that estimate.
The Earl of Avon: My Lords, there are many estimates about what can be spent, but at the moment my right honourable friend the Secretary of State is advised by the Advisory Council on Research and Development for Fuel and Power. Should the research and development which we are now doing need promotion, I am sure more money would be available.
Lord Elwyn-Jones: My Lords, can the noble Earl enlighten us as to what is biomass?
The Earl of Avon:My Lords, indeed I can. In fact the noble Lord, Lord Ezra, is very interested in developing waste pellets in order to take the place of coal. There are also such things as straw-burning, which is a biofuel. Also, if the noble and learned Lord went to Brazil, he might find them burning some damp forest to make spirits.
Lord Ezra: My Lords, I should like to say to the noble Earl that I would never do anything that would take the place of coal. All that I would do would be to supplement coal.
The Earl of Avon: My Lords, I am grateful to the noble Lord.
Lord Collison: My Lords, I do not think that the noble Earl mentioned solar energy. Is he aware that a great number of householders have now installed solar panels to supplement their other heating for domestic purposes, and that these have proved quite successful? The noble Earl may be aware that I have spoken on this subject previously. Is he aware that I have installed a solar panel in my own house and it is showing me some considerable savings in terms of energy consumed in heating water?
The Earl of Avon: My Lords, Government policy is in support of passive solar energy; but at the moment we are not putting very much money towards active solar energy. I congratulate the noble Lord on raising the question on such a perfect day.
Baroness Seear: My Lords, may I ask the noble Earl whether he will not agree that, in view of the exceptional experience of the noble Lord, Lord Ezra, in this field, the difference between the estimated figure which he gives and the figure to which the Government are working is somewhat alarming and needs to be explored?
The Earl of Avon: My Lords, one of the factors about which I can have a word with the noble Lord afterwards is what he includes in alternative sources of energy. For instance, I did not include what is being done at the moment with coal—where there is an expenditure of £40 million. It is very much a matter of the way one uses the expression. I take the point raised by the noble Baroness and will try to clarify it.
Viscount Hanworth: My Lords, can the noble Earl say how much money is now being allocated to wave energy, bearing in mind that it does not look very hopeful from the economic point of view, but might be useful at some time?
The Earl of Avon: My Lord, on the advice of ACORD, (the advisory body that I have already spoken about), we have decided not to put any more money towards wave energy. Whereas some three years ago we were spending about £4 million on research, it is now half a million pounds.
Lord Stoddart of Swindon: My Lords, will the noble Earl confirm that our effort on research into methods involving alternative and renewable energy is well below that of other countries? For example, is it not true that on this kind of research the Federal Republic of Germany spends £50 million a year and France spends £25 million a year? Can he explain the discrep-ancy between the sums of £ 11 million last year and £14 million this year? Can he also say how much money the Government have allocated to the development of refuse-derived fuel, which is a very important new source which could help not only through supplementing and augmenting our fuel supplies but also in dealing with the problem of refuse disposal?
The Earl of Avon: My Lords, with regard to refuse fuel, which the noble Lord mentioned, at the moment we are looking at that matter through our energy demonstration projects scheme. There are a number of these schemes, all of which have different sums of money, but a number of projects are being considered at the moment. In regard to his earlier question about our spending as against that of other countries, energy supply problems and strategies to meet energy demand vary from country to country, but given our own access to indigenous fuel supplies, the Government believe that this country's expenditure on the development of renewable forms of energy is of the right order. I should also like to paraphrase that remark by saying that there is a difference between alternative forms as against renewable forms, which I mentioned to the noble Baroness.
Lord John-Mackie: My Lords, referring back to the question about solar energy asked by the noble Lord, Lord Collison, can the noble Earl confirm that there is a grant for insulating a house and thus saving heat? Would it not be a good thing to give a grant for producing heat by solar energy?
The Earl of Avon: My Lords, I am not absolutely sure that I follow the noble Lord. The grants given at the moment are for home insulation schemes. Is he suggesting that we go further than that?
Lord John-Mackie: Yes, my Lords.
The Earl of Avon: My Lords, I think that at the moment home insulation grants are enough.
Lord Whaddon: My Lords, bearing in mind the promising prospects for the use of hydrogen as a portable energy source in the future and reports in the press of work on catalytic decomposition of water for such a source, can the noble Earl say whether any work on catalytic decomposition of water is being done in the United Kingdom?
The Earl of Avon: My Lords, not that I am aware.
Lord Bowden: My Lords, several years ago there was a systematic inquiry into the possibility of a Severn barrage. Ever since then sums of money have been promised, or made available—or have not been made available—for the future development of this scheme,
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or an alternative version. Can the noble Earl tell us how much money is now being spent on further analysis of this extremely promising project?
The Earl of Avon: My Lords, at the moment the Government are matching a quarter of a million pounds with a quarter of a million pounds on a further study of the Severn barrage.

Disabled People: Employment Opportunities
3.16 p.m.
Lord Henderson of Brompton: 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 they intend to introduce legislation, as recommended by the Manpower Services Commission in 1981, to provide for a statutory general duty on employers to take reasonable steps to promote equality of employment opportunity for disabled people and for a code of practice.
Viscount Long: My Lords, in view of the mixed response to the Manpower Services Commission's proposals to promote equal employment opportunity, the Government decided to retain the existing legislation on the employment of disabled people for the time being. In addition, the Government asked the commission to examine the suggestions put forward by the Select Committee and others for improving the effectiveness of this legislation within the existing statutory framework and at the same time to press ahead with preparing a code of good practice on the employment of disabled people with a view to its being introduced on a voluntary basis. Work is in progress on both these developments and I understand a draft code is likely to be considered by the commission in June.
Lord Henderson of Brompton: My Lords, I thank the Minister for the information that a draft code is in hand. I have myself the MSC report of 1981 on the quota scheme. Would the Minister not agree that that report shows conclusively that the statutory quota scheme for the employment of registered disabled people is widely disregarded, cannot be enforced and is impossible to be implemented because the number of registered disabled people is less than the 3 per cent. quota? That being so, should not the Act of 1944 which brought in the quota be repealed and replaced as soon as possible by legislation on the lines recommended by the MSC in 1981? Further, if the Government do not wish to introduce such legislation themselves, will they consider giving drafting assistance and providing parliamentary time next Session for a private Member to do so?
Viscount Long: My Lords, I agree with certain of the remarks of the noble Lord, Lord Henderson of Brompton. As he says, it is not possible to enforce the present legislation as originally intended. Only registered disabled people count towards the satisfaction of a 3 per cent. quota. Since the 1950s the

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number of disabled people choosing to register has been declining. In fact, registered disabled people at present account for only 1.1 per cent. of the total workforce, and it is mathematically impossible for all employers who come within the scope of the existing legislation to satisfy their obligations. Whatever the level of quota, many unregistered disabled people are in employment but because they do not choose to register they are not reflected in the national levels of quota compliance.
In answer to the second part of the noble Lord's supplementary question, that is why the Government asked the Manpower Services Commission to investigate the problems, including the problem of legislation, in connection with invalids and disabled people. Their findings will come out in June. As to the latter part of the noble Lord's supplementary, I think he was asking about a Private Member's Bill in the future. I would say to your Lordships that when the commission has completed their investigation there will perhaps be ample opportunity to debate their findings.
Lord Renton: My Lords, is my noble friend aware that mentally handicapped people are in a different and more difficult employment situation compared with other disabled people? Rather than using any kind of legislative compulsion with regard to them, would it not be better to give the fullest support and encouragement to the Pathway Scheme of the Royal Society for the Mentally Handicapped?
Viscount Long: My Lords, various different institu-tions have been invited to join the commission to consider the best ways to legislate for invalids. Until their findings are known, I cannot refer to any one particular suggestion.
Lord Somers: My Lords, is it true, as I have been told, that only about two out of every 100 Private Members' Bills finally reach the statute book? If so, is that not rather a faint hope for my noble friend's suggestion?
Viscount Long: My Lords, I think that that is for the usual channels to debate and not me.
Lord Dean of Beswick: My Lords, is the noble Viscount the Minister aware that, for the Government to expect this very serious subject to be dealt with on a voluntary basis, is complete nonsense and that some of the good employers will respond while most of the others will not? Will the Minister agree that any exercise on behalf of the disabled, giving them increased employment opportunities, will be meaningless till the existing general rates of unemployment are reduced dramatically?
Viscount Long: My Lords, I do not really agree with the first part of the noble Lord's question, and I do not think that I need to answer the second part.
Lord Stallard: My Lords, will the noble Viscount accept that the 3 per cent. quota has been the subject of discussion ever since 1944 when it was first
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introduced, and that the replies from Government Benches of all kinds have been almost exactly the same as the reply that has been given today? Is he aware that there is a strong body of opinion in the country that the educative process, so called, has not produced the results it ought to have done or which we expected it to do? What is needed now is legislation to deal with the discrimination that exists against disabled people seeking employment.
Viscount Long: My Lords, I think that the Government have not found any of the discrimination which the noble Lord has talked about. But it will be up to the commission to present its findings and for the House to debate them. If there is discrimination, and if the noble Lord has heard of any, then I shall inform my right honourable friend of it.
Lord Boardman: My Lords, is not the problem, as my noble friend said, that employers cannot force disabled people who are employed by them to register, and that many employers who have well over 3 per cent. disabled will fall short of the statutory target of 3 per cent. registered disabled?
Viscount Long: My Lords, I quite agree with my noble friend. It is extremely difficult when many of the disabled do not even allow their names to go forward to be registered. The problem at the moment is that the legislation does not hold up at all.
Lord Ennals: My Lords, I wonder whether the noble Viscount will give further consideration to the question put by my noble friend concerning the level of unemployment among disabled people? Does he not accept that it is extremely high and very disturbing indeed? Bearing in mind that this House gave a Second Reading, Committee stage and Report stage to the Bill of my noble friend Lord Longford on the question of discrimination against disabled people, would it not be appropriate that that question should also be considered by the Manpower Services Commission and by the Government as well?
Viscount Long: My Lords, I have to go back to my original reply that we have to wait for the report from the commission itself. When that report comes through we shall all know exactly which way everybody is thinking. But at the moment it is very difficult to carry out the legislation.
Lord Henderson of Brompton: My Lords, in relation to the question of the noble Lord, Lord Somers, about Private Members' Bills, is the Minister aware that Private Members' Bills often have a very good chance of success if the Government are benevolent and provide drafting assistance and parliamentary time? Is this not a matter of urgency, in view of what we have heard about the serious state of unemployment among the disabled?
Viscount Long: My Lords, I am speaking to a noble Lord who is very experienced in how Bills are handled in this House. I admit to the noble Lord that the matter is urgent, but I also have to say that the report from the commission does not come through till June.

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As I said before, when that report comes through we shall have a chance of debating it and we shall know which way we are going.

Soviet Warheads: Deployment
3.25 p.m.
Viscount Mersey: 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 how many Soviet missile warheads were deployed against Western Europe in 1973 and in 1983 respectively.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, since 1977 the Soviet Union has deployed over 1,100 SS.20 warheads, about two-thirds of which are targeted on Western Europe. Although many of the older SS.4s and SS.5s previously deployed have been withdrawn, the deployment of the SS.20 represents a new order of capability. In addition to having three warheads, it is more accurate, has a longer range and shorter reaction time, and is mobile. There are also, of course, large numbers of nuclear capable shorter range missiles deployed in Eastern Europe, not to mention submarine and ground launched strategic ballistic missiles which could threaten Western Europe.
Viscount Mersey: My Lords, I thank my noble friend for that reply. I wonder whether he has read the two books by Victor Suvorov, Inside the Soviet Army and also The Liberators, and whether he agrees with the author that the Russians plan to lay down what they call a nuclear carpet at an early stage of a nuclear war aimed at knocking out our airports, our docks and our military headquarters. Also, does he agree that NATO's reasonably limited nuclear weapons are the best deterrent against this?
Lord Trefgarne: My Lords, we do not of course know with any degree of certainty what actions the Soviet Union would take in the event of a conflict between East and West, though no doubt Soviet military planning places a high value on the element of surprise and pre-emption. It therefore remains the absolute priority of NATO's defence policy to ensure that such a conflict does not take place.
On a personal note, may I say how saddened I was to hear of the untimely death of Lord Bishopston. He would no doubt have been intervening on this Question and he will be sadly missed by your Lordships and, of course, his family. I am sure that your Lordships will wish to join me in expressing our deep sympathy to Lady Bishopston and her children.
Noble Lords: Hear, hear!
Lord Cledwyn of Penrhos: My Lords, may I be allowed to say that my noble friends and I are deeply grateful to the noble Lord for his kind tribute to Lord Bishopston. The news of his death shocked and distressed all of us. Lord Bishopston made an important contribution to our proceedings. He was a kindly and generous man who acted from strong
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religious convictions. We shall miss him enormously, and join with the noble Lord in sending our sympathy to Lady Bishopston and her family.
The Lord Bishop of Rochester: My Lords, may I associate these Benches with what has been said? We had a great regard for Lord Bishopston, who served as Second Church Estates Commissioner. He was spokesman on the other side on ecclesiastical matters, speaking only recently in a debate. We should like to acknowledge his kindness and charity and the very real distinction which he brought to this House, and we, too, convey our sympathy to his widow and four daughters.
Baroness Seear: My Lords, we on these Benches wish to be associated with the message to be sent to Lady Bishopston. We very much appreciated the work that he did in this House. May I also say that some of us, at any rate, very much appreciated the fact that Lord Bishopston was an ardent supporter of women's equality when it was very difficult to find male supporters to give the kind of help that Lord Bishopston so unstintingly gave, influenced no doubt by the fact that he had four daughters. But we were extremely grateful for that.
Lord Paget of Northampton: My Lords, can the noble Lord tell us how many nuclear weapons the Government think the Russians would have over after they had destroyed their Western neighbours as effective powers, and how many would they have left over in the case of their Eastern neighbours? Would it be something well over 900?
Lord Trefgarne: My Lords, I have to say that that is a question to which I could not reply without giving some careful consideration to the answer. But, of course, it is certainly the case that they have many more missiles than they need for their declared defensive purposes.
Lord Paget of Northampton: My Lords, they need something less than 200.
Lord Jenkins of Putney: My Lords, in associating myself with what has been said about Lord Bishopston, I think that if he were here he might wish to ask the noble Lord whether it is not the case that, if a nuclear war starts, it is very likely to eliminate human life on earth. Therefore, the numbers question is perhaps secondary to that.
Lord Trefgarne: Yes, my Lords. That is why our policy is to ensure that no such war should start.
Lord Kennet: My Lords, it would have been interesting to see the Question answered exactly in the terms in which it was set out. Yet would the noble Lord agree that the answer is readily deducible from the annual military balance published by the IISS, which shows that in 1973 there were a great many such warheads and now there are even more? Would the noble Lord care to comment on the fact that nobody asked the Russians to enter into negotiations about the SS.20s until after the 1979 decision to deploy in the West? Would the noble Lord also care to comment on

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the fact that, even now, no negotiations have ever taken place about sea-launched Russian cruise missiles with nuclear warheads? Nor do the Government normally count them in any statement they make about the number of Soviet nuclear warheads.
Lord Trefgarne: My Lords, the noble Lord points to the desirability of further negotiations and discussions on this matter. I agree with the noble Lord. That is why I hope that the Russians will return to the negotiating table, which they left so unnecessarily a few months ago.
Viscount Trenchard: My Lords, would my noble friend agree, following the supplementary question of the noble Lord, Lord Kennet, that all independent studies, and the NATO study itself, have shown that during the 10 years concerned, which are mentioned in this Question, the balance of the intermediate range nuclear warheads has swung very heavily in favour of the Soviet Union?
Lord Trefgarne: My Lords, my noble friend is quite right. Before we started to deploy the cruise missiles and the Pershing II missiles, the Soviet Union had a monopoly of this kind of weapon.
Lord Graham of Edmonton: My Lords, the House recognises, I am sure, the enormity of the issues, and appreciates that the statistics are very important; but I want to ask the Minister to reassure the House that real care is taken in support of Secretary of State Shultz's assertion that what the West wants are militarily significant and verifiable agreements. Does the Minister agree that the greatest danger we now face is the risk of war through misunderstanding or miscalculation?
Lord Trefgarne: My Lords, I do not believe that the risks of war, to which the noble Lord has referred, are so great as some people imagine. Not so long ago we had a debate in your Lordships' House on this subject. The fact remains that there has been no war in Europe for nigh on 40 years. I believe that is the result of the policies that we have pursued during that time. It is also true that in recent times the Americans have begun withdrawal of about 2,400 warheads from Europe. That is something which some people often forget.
Lord Jenkins of Putney: My Lords, is the noble Lord aware that, for those interested in the numbers question, the total number of warheads targeted on the USSR is many times greater than the number of warheads targeted on the USA?
Lord Trefgarne: My Lords, we were talking about the intermediate range land-based systems. As the noble Lord will know, and as I said just now, until we started to deploy the cruise missiles and the Pershing II missiles, the Soviet Union had a monopoly of this kind of weapon in the form of the SS.20.
Lord Paget of Northampton: My Lords, does it really much matter whether they have 10 times or 11 times the number they could possibly use?
Lord Trefgarne: My Lords, that is a question which the noble Lord had better put to them.

Rates Bill: Second Reading Voting
3.33 p.m.
Lord Beswick: 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 they are satisfied that the number of Peers, customarily non-attendant, whose presence was ensured on 9th April for the purpose of voting against the amendment to the Motion for Second Reading of the Rates Bill, added to the recently enhanced reputation of the House of Lords.
Lord Denham: Yes, my Lords.
Lord Beswick: My Lords, while thanking the noble Lord for that Answer, may I ask him to accept that whatever I say later will be no reflection at all upon his professional skill at assembling Lobby fodder? May I ask the noble Lord to look again at the Question and to say whether he does not agree with that part of it which refers to the enhanced reputation of this House? Would he not agree that that enhancement sprang from the growing feeling in the country that here you could advance an argument and that it would be listened to in a more restrained and objective atmosphere than in the other place? But is it possible to reconcile that appreciation with the situation on 9th April when, thanks to the professional skill of the noble Lord, the Government had an overwhelming majority, made up, in part, by virtual strangers who take no part in the day-to-day responsibilities of this House?
Lord Denham: My Lords, a reasoned amendment to the Second Reading of a Government Bill is in itself a very rare event. When such an amendment is moved to a Bill which is a clear manifesto commitment in the first Session of a new Parliament, it is tantamount to asking for a vote of no confidence in the Government. In these circumstances, I believe that it is right that Government Peers, who can normally only attend rarely, should have made a special effort to do so in this case. In fairness, I should add that much the same criteria apply to the rare attenders on the Benches opposite who came to vote the other way.
Lord Hatch of Lusby: My Lords, is the noble Lord aware that one of his noble friends behind him told me on the night of 9th April that he had had to guide one of his colleagues into the Chamber, never having been here before, apparently, and then had had to guide him into the Government Division Lobby? Does the noble Lord the Chief Whip believe that this enhances the reputation of this House or detracts from it?
Lord Denham: My Lords, the noble Lord really must not believe every story that he hears in the Lobbies of this House. A number of noble Lords on both sides came who only come rarely, and on a matter of this importance I think it is right that they should do so.
Lord Renton: My Lords, is my noble friend aware that if the Socialist, the Alliance and the Cross-Bench Peers attend in sufficient numbers they can easily outnumber us?
Lord Denham: My Lords, I am grateful to my noble friend. However you calculate it, the Conservative Party has no overall majority in your Lordships' House. When it does not get Cross-Bench support or when some of my noble friends withhold their support, Her Majesty's Government are very much at risk.
Lord Beswick: My Lords, as this is an important Question, would the noble Lord be good enough to give the actual figures? By saying "Cross-Bench", does the noble Lord really mean entirely independent, non-Conservative Peers?
Lord Denham: My Lords, the figures are generally known. It is rather difficult to work out what the figures for the various parties and what the figures for the Cross-Benches are, whether it is the general figures on paper of those to whom the Whips go out or whether one takes it as being those noble Lords who attend more than 20 per cent. of the sittings. In almost every case and almost every way of looking at it, the Government do not have an overall majority in this House.
Lord Nugent of Guildford: My Lords, is my noble friend aware that the example given by the noble Lord, Lord Hatch of Lusby, shows how unreliable it was: that a Peer needed to be guided into the Lobby? Unless he had already been sworn in he could not have gone into the Lobby. Therefore the noble Lord's informa-tion was obviously at fault.
Lord Denham: My Lords, I am most grateful to my noble friend.
Lord Orr-Ewing: My Lords, could my noble friend say what would have happened to the vote if those Conservative Peers who attend less than 10 per cent. of our sittings, to which this Question refers, had not come at all? Secondly, if my noble friend had been the Chief Whip of the Labour Party, would he not have been a little disturbed that, whereas the Alliance Party voted 43, the whole of the Labour Party voted only 86 on this very special occasion?
Lord Denham: My Lords, I cannot give my noble friend the exact figures; but I can say that if only the votes of those Peers who attended one-fifth, or less, of the sittings in the 1982–83 Session had been excluded, the Government would still have won the Division on 9th April by a majority of 151 votes to 128. As regards my noble friend's remarks about the noble Lords on the various Benches opposite, I must say that it has been my experience that the gangway between the Labour Party and the Benches of the Alliance has recently been getting very narrow indeed.
Lord Beswick: My Lords, may I make it clear that I am not referring to Peers who attend for 10 per cent. of the time. Is the noble Lord aware that, of the number that the noble Lord assembled in his Lobby
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on 9th April, 26 attended twice, or less, during the whole of the last Session?
Lord Denham: My Lords, this may be true. I do not have the exact figures. I sent out a strong Whip because this was a very important occasion. I have absolutely no doubt at all that the strength of the words I used on my Whip, and the number of times I underlined them, were no more than were used by the noble Lord, Lord Ponsonby, on his Whip.
Viscount St. Davids: My Lords, does the noble Lord not suffer from a slight sense of daze when this Question is raised by a noble Lord who is a prominent member of a party some other prominent members of which wish to stuff this House with a thousand Peers totally ignorant of our proceedings for the deliberate purpose of getting business through?
Lord Denham: My Lords, quite a lot of the things that have been said this afternoon from the other side of the House are going to make interesting reading if we ever find ourselves on that side of the House.
Viscount Massereene and Ferrard: My Lords, does my noble friend not agree that, on average, some 250 Peers, and sometimes more, apply for leave of absence for a whole Session? The majority of them are Conservative; very few Labour Peers apply for leave of absence, and quite a few of those who do not apply hardly ever attend.
Lord Denham: My Lords, my noble friend may be right. The point is that one can play with numbers in any way one likes. The real point of this particular occasion was that this was a Bill for which the Government had a mandate more pronounced than at any other time. Let me just read to your Lordships what we said in our manifesto:
"We shall legislate to curb excessive and irresponsible rate increases by high spending councils and to provide a general scheme for limitation of rate increases for all local authorities to be used if necessary".
That specifically gives a mandate for not only part Part I of the Bill, but also Part II. This mandate was endorsed by the electorate, who sent my right honourable friend the Prime Minister back to Westminster with an overall majority in another place of 144.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that he compels me to rise to my feet to remind him that the mandate was supported by only 42 per cent. of the electorate of this country, and that therefore the Government cannot say that they have clear majority support? Is he further aware that he is referring to one of the most unpopular Bills of this century? It is opposed by not only the parties represented on this side of the House, but also several distinguished members of his own party. Is the noble Lord further aware that the fact is that his party does have a standing majority in this House, and that this Bill, at this stage, is the result of a combination of elected dictatorship and hereditary dictatorship?
Lord Denham: My Lords, it seemed to me at one moment as though the noble Lord, Lord Cledwyn, was

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calling for proportional representation; I do not think he really could have meant that. The fact is that we do not have an overall majority in this House. The noble Lord, Lord Cledwyn, must know that during the last Parliament the Government were defeated 45 times in your Lordships' House. They have been defeated nine times already in this Session.
Noble Lords: Not enough!
Lord Denham: It is possibly ungrateful of the noble Lord to forget those occasions. I wonder whether he would have used the same expressions about Peers who are rate attenders when he looked at the figures on the schools transport amendment and on the charity housing amendment.
Baroness Seear: My Lords, does not the noble Lord agree that the Labour Government were also elected time and again on a minority of votes and they referred without stopping to the importance of their manifesto and the mandate of their manifesto? Does not the noble Lord further agree that this underlines the width, and not the narrowness, of the gangway between us?
Lord Denham: My Lords, I am most grateful to the noble Baroness the Leader of the Liberal Party. When I referred to the narrowness of the gangway I was thinking of the very rare occasions when noble Lords on the Alliance Benches voted in a different Lobby from noble Lords opposite.
Lord Ross of Marnock: My Lords, while I agree with the noble Lord that this was a very important Bill on rate capping, may I ask whether he is aware that three days later an equally important Bill for Scotland came before your Lordships? It did not enhance the reputation of this House, which always seeks to deny devolution to Scotland, that there were never more than six people on the Government Benches on that day.
Lord Denham: My Lords, we are referring to a Second Reading debate on which a reasoned amendment was moved. I am happy to say that no reasoned amendment was moved on the Second Reading of the Scottish Bill.
The Earl of Halsbury: My Lords, are we not making rather heavy weather of the fact that the total turnout, albeit high, was 388, which compares quite unfavourably with the turnout on the vote for the Common Market, which was 509?
Lord Denham: My Lords, I am most grateful to the noble Earl.
The Duke of Norfolk: My Lords, is the noble Lord aware that the famous 10 per cent. which was mobilised on that occasion can also be mobilised to defeat the Government and put them right when they are in great error on certain matters—for instance, in the Bill on school transport?
Lord Denham: My Lords, I agree with the noble Duke on everything he said, except the word "error" in this context.
Lord Molloy: My Lords, since the Government have been defeated in this House more than 40 times, does this not mean that the majority of parties—including good support from the Conservative Party—have disagreed with, and demonstrated their total revulsion of, Government policy? Could not the party opposite therefore demonstrate their great belief in democracy and leave the other place by announcing their resignation this afternoon?
Lord Denham: My Lords, if one votes against one's party on a fairly minor issue, it does not mean that one shows total repulsion towards one's Government. This is the independence of this House, which this House always shows. If I may say so, it negates the whole concept of the Question of the noble Lord, Lord Beswick.
Lord Monson: My Lords, in view of allegations of arm twisting, would the noble Lord not agree that many, if by no means all, of the independents on these Benches, having carefully evaluated the arguments, decided of their own free will to support the Government both verbally and in the Division Lobby?
Lord Denham: My Lords, I am most grateful to the noble Lord and am happy to agree with him that rather more evaluated the matter on their own in favour of the Government than evaluated against the Government.
Lord Wallace of Coslany: My Lords, is the Leader of the House aware that his Chief Whip has grossly exceeded the time normally allowed for Questions?
The Lord President of the Council (Viscount Whitelaw): Yes, my Lords; as a keen student of whipping in another place, I am very interested to learn the many different facets of it in this House. It is very educational for me and, no doubt, for all your Lordships. I have no doubt that no one has done better in his education than my noble friend the Chief Whip, but I think that we should not perhaps ask him now to weary with overmuch well-doing.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. this afternoon my noble friend Lord Cockfield will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question in another place on the future of The Observer newspaper.
It may be for the convenience of the House if I announce that the Committee stage of the Rates Bill will be adjourned for dinner at approximately 7 p.m. for a short period, and that during the adjournment the Committee stages of three consolidation Bills will be taken; namely, the Dentists Bill, Registered Homes Bill, and Foster Children (Scotland) Bill. Those Committee stages will be followed by the Committee stage of the Anatomy Bill.

Anglian Water Authority (King's Lynn Tidal Defences) Bill
Read a second time, and committed to a Select Committee.
Leicestershire Bill [H.L.]
Read a second time, and committed to a Select Committee on Opposed Provisions.

"The Observer": Future
3.49 p.m.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, with the leave of the House, I shall now repeat the Answer which has been given to a Private Notice Question in another place. The Question is as follows:
"To ask the Secretary of State for Trade and Industry what steps he proposes to take regarding the future of The Observer newspaper".
The reply by my right honourable friend is as follows:
"None is required of me, unless a transfer of ownership falling within the scope of the Fair Trading Act 1973 is proposed. That Act provides that my consent is required to a transfer of a newspaper above a certain size to a newspaper proprietor. I may only give my consent after a reference to and report from the Monopolies and Mergers Commission, unless I am satisfied that the newspaper in question is uneconomic as a going concern, and either that the case is one of urgency or that it is not intended to continue it as a separate newspaper. I have received no application for any consent in relation to The Observer newspaper".
My Lords, that concludes the reply.
Lord Bruce of Donington: My Lords, is the noble Lord aware that that Answer is thoroughly unsatisfactory in that it does not deal with the principal part of the question, which relates to the preservation of the independence of The Observer newspaper? Is the noble Lord aware that there is a very widespread view that the unwillingness of the Government to take any steps to ensure the indepen-dence of this newspaper is because from their point of view it is unnecessary in that at least 12 of the 14 national dailies are owned and controlled by people who support their own party? Does he not agree that it would be a far more dignified posture for a Government in a democracy—albeit an elected dictatorship—and a much more honourable role to play, to take all possible steps to ensure that within this democracy there is real freedom of the press and that editors are not subjected to the whims and dictates of their owners and proprietors to the detriment of the impartiality of the news that they are supposed to publish?
Lord Harris of Greenwich: My Lords, is the noble Lord, Lord Cockfield, aware of the deep anxiety that I am sure is shared in all parts of the House about what is going on in relation to The Observer at the moment?
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May I ask two questions which arise directly from Mr. Biffen's assurances given on 9th July 1981? First, is the noble Lord aware of the critical importance of the position of the independent directors, two of whom were in fact proposed by Mr. Rowland himself? Is the noble Lord also aware of the concern (which, I repeat, I am sure is shared in all parts of the House) about what we have read in the last 48 hours, that Lonrho is now withdrawing its advertising from The Observer and applying stringent new financial targets with the obvious intention of making the position of the editor untenable? Is the noble Lord aware that this is wholly unacceptable, given the clear statement made by the newspaper's independent directors? In the light of that, what do the Government propose to do about it?
Lord Cockfield: My Lords, I start with the comments made by the noble Lord, Lord Bruce of Donington. I should have thought that if these events illustrated anything it was, in fact, the existence of real freedom of the press in this country, and that this is an issue which is right out in the public arena. Nothing is being suppressed. An editor has taken a very firm stand.
As regards my right honourable friend the Secretary of State for Trade and Industry, he can only act, of course, within the powers conferred on him by the Fair Trading Act 1973. That Act provides that the Secretary of State can act only if an application for a consent has been made or if a transfer, or purported transfer, takes place. At the moment none of these events has occurred, and there is therefore no ground on which my right honourable friend could intervene in the matter. The noble Lord also referred to the number of newspapers supporting the Government. This, of course, is a recognition by a free press of the merits of the policies which are pursued by the present Government, and that is why we support the continuation of a free press.
May I now take the very legitimate and important points raised by the noble Lord, Lord Harris of Greenwich? There were special conditions inserted in the articles of association as a result of the decision taken by the then Secretary of State for Trade. I agree with him about the crucial importance of the position of the independent directors. That is written into the articles of association, and, in fact, the articles are drawn up in such a way that the independent directors have a locus standi if they wish to apply to the courts. If there is any breach of the articles of association that is a course of action which they will need to consider. It is not a question for the Government: it is a matter for the independent directors who were put in to safeguard the editorial independence of the newspaper.
As regards the policy, stated in newpaper reports, to be pursued by Lonrho in withdrawing advertising support and imposing stringent financial guidelines on the operation of the business, it is essentially a matter for the proprietor to decide what money he makes available for the company.
Lord Ardwick: My Lords, is the noble Lord aware that the free press which supports this Government also supported with equal vigour the Government of Mr. Heath and the Government of Mr.

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Macmillan—Governments which seem to be repudiated by the present generation of Conservatives? On a more serious point, this is a dangerous moment in the life of a great newspaper. My instincts are naturally with the editor of that paper, for which I once worked. In this situation we must all tread delicately. Is the Minister aware that this is a newspaper which is esteemed by all journalists and which is loved by its readers, who hope that everything will be done, including, if necessary, using the good offices of the Government, to see that The Observer is maintained with its traditional independence and its high journal-istic style?
Lord Cockfield: My Lords, I entirely appreciate the points which have been very validly and properly made by the noble Lord. In a very judicial fashion we do need to be very careful in what we say now. I think it is important to draw attention to the fact that it was my right honourable friend the previous Secretary of State for Trade who insisted that the conditions safeguarding the editorial independence of The Observer newspaper were inserted in the articles of association. There is no reason at present to believe that there has been any breach of those articles of association, but if there is a breach there is a disputes procedure provided in the articles and in the last resort it is always open to the independent directors to consider whether or not to take legal action. However, we have not yet reached that stage and one would hope very much that we do not. I entirely echo the noble Lord's sentiments that at this stage it is not very wise to speculate too much about events which have not yet happened.
Lord Morris: My Lords, does my noble friend not agree that the true independence and freedom of the press is very much a matter for the courage and integrity of the journalists themselves, as has been made most manifest in the circumstances of this particular case? We should rejoice in that fact.
Lord Cockfield: My Lords, I entirely agree with my noble friend.
Lord Bruce of Donington: My Lords, is the noble Lord aware that on this side of the House we greatly appreciate the noble Lord's sentiments about the necessity for the freedom of the press? In those circumstances, will the noble Lord answer on behalf of the Government whether it is perhaps the Government's intention, since this is a matter of some urgency, to introduce legislation either here or in another place to protect the editors of newspapers from any kind of undue and improper pressure by their proprietors?
Lord Cockfield: My Lords, the existing legislation regarding newspaper mergers is very detailed and does provide adequate safeguards in the present circumstances. This is illustrated by the action which was taken by my right honourable friend the previous Secretary of State for Trade.
Lord Molloy: My Lords, will the noble Lord not agree that the apprehensions expressed on all sides of
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the House, and to a degree the apprehensions he himself so very fairly submitted to the House, ought to be warning enough that there is grave concern at the present course of events? If he were to say loudly and clearly that there is an element of concern officially felt by the Government, that by itself might make a contribution towards resolving the problem that this great newspaper now faces.
Lord Cockfield: My Lords, I note what the noble Lord says, but I do not think it is right at this stage either for me or for the Government to intervene in this matter. The law makes provision for the matter to be dealt with in certain circumstances clearly specified in the law. I think we ought to allow it to rest at that for the moment.

Rates Bill
4 p.m.
The Minister of State, Department of the Environ-ment (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.]
Baroness Birk Baroness Birk moved Amendment No. 1:
Before Clause 1, page 1, line 4, at end insert—
("PART 1A
REFORM OF THE RATING SYSTEM
Reform of the rating system.
. The Secretary of State shall establish by 31st December 1984 a Committee composed of representatives of the local authority associations and other suitably qualified persons appointed by him to enquire urgently into reform of the rating system in England and Wales and make recommendations thereon.").
The noble Baroness said: During the Second Reading of this Bill there was a great deal of comment on the need for an investigation into local government finance. In fact, it was the tail end of the amendment that was moved at that time. But during that debate as many as 19 noble Lords referred in some way or another to either their dissatisfaction with the present system or their feeling that something should be done about local government finance, about rating and about the whole of this area. So much so that I would say that about 50 per cent. of those who spoke during the debate referred with considerable anxiety to this matter. And may I add that they were noble Lords from all parts of your Lordships' House? There were Cross-Benchers, and there were a number of noble Lords from the Government Benches, from these Benches and from the Alliance Benches as well. It was because of this feeling and the very real concern that was expressed that I felt that we should have an amendment moved in Committee so that perhaps in a rather different atmosphere we could discuss the necessity for something which I think we all feel is now overdue.
Although this amendment concerns the rating system, because that is within the compass of the Bill we are discussing, any inquiry would naturally have to take account of the whole system of local government finance since we cannot look at rates in isolation. I think that was generally accepted. The amendment is reasonable, and is a product of the disquiet expressed by almost everyone concerned with local government, not only in Parliament and in both Houses but by local authorities themselves, the local authority associations, academics concerned with local government, voluntary organisations and a host of bodies and individuals who were at some point involved with local government.
It is common ground between us, I think, that all is not well with the rating system. That much is generally accepted, as I say again, both inside and outside Parliament. It is also clear that the Government's proposals contained in this Bill do little, even in their own terms, to solve the fundamental problems. The Government have identified the problem as weakness in local accountability. So failing a solution to this, which again is something I think we would all agree upon, this unhappy Bill was felt necessary by the Government. Therefore, it seems to us that even the advocates of the Bill should support the amendment as a genuine attempt to make some real progress in this very difficult area.
In proposing an inquiry we are not trying to delay the Bill, we are not postponing the issue, it is not something that goes against the Government's own thinking. It need not be a lengthy investigation. I will not weary noble Lords, who are, I am sure, very well informed on this subject, with the number of inquiries, White and Green Papers and investigations that have taken place in the past. Layfield, the most recent one and the most authoritative, provided volumes of evidence for analysis. This still took only about 18 months, in spite of the work that was undertaken, and much of that would be a useful base for this new committee. We believe that, building on that base, the inquiry need take only something in the region of six to nine months, given the urgency felt by everyone concerned. That is the key point, the urgency.
The need for a review of local government finance has been recognised by both Labour and Conservative Governments for many years now, but in the past administrative difficulties in the way of reforming the rating system have blocked progress. One may well ask: why then should this inquiry succeed? I believe it will because the situation has deteriorated enormously. We have had seven systems of local government finance since 1979, and every time each stopgap experiment has, in turn, failed. Today there are greater complexities than ever before in society, in central government and in local government. The problems are such that they cannot be dealt with by way of this sort of stopgap situation.
I do not believe that the Government themselves can want to perpetuate the type of conflict and bad feeling going on now between local government and central government. This again cuts across the parties. The Secretary of State for the Environment said recently, and this was quoted by the noble Lord, Lord Bellwin, when he replied as Minister on 10th April (at
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column 1020 of Hansard):
"The Secretary of State said recently—and I hope your Lordships will note this carefully because it is important—it would be foolish in the extreme to rule out for all time the possibility of a more satisfactory local tax, just as it would be foolish to rule out for all time a more satisfactory relationship between central and local government. I and my Ministers are already hard at work seeing how we can cut a path through what has become an incredibly complicated rate support grant system".
It is quite clear that this is something about which at the moment it is impossible for the Government on their own to do anything, bearing in mind the timescale of the Government's other load of legislation and with what has been happening and with what is going on with the progress of this Bill. It needs both a cross-party and a cross-local authority/central government approach.
The problems of local government finance are no longer just urgent. They have always been called urgent in the past whenever a White Paper, Green Paper, or any report came out. But today they are critical and I think this is recognised. The very existence of this Bill which we are considering today is itself evidence of the critical state in which local government is today. This I believe is generally recognised, and that is why an inquiry is essential and why it can be made to work. However, all that is needed now is the political will and the political courage. I beg to move.
Lord Broxbourne: In moving the amendment with her characteristic persuasiveness and felicity of phrase, the noble Baroness referred to it as being a reasonable amendment. It is somewhat dichotomic, in my submission. In so far as the motive animating the amendment is concerned, I would concede that that no doubt is reasonable. In so far as it is animated by a desire to improve our rating system, that is something with which there would be general, and perhaps even universal, sympathy. It would indeed be an unusual and undiscriminating idolater who claimed anything in the nature of perfection for our present rating system. But I think that there would be less sympathy and less support for the means proposed by the amendment.
The amendment proposes to set up yet another committee in the pious, but unrealistic, hope that it would add to the knowledge already available from a succession of authoritative inquiries and studies into this matter, notably the one chaired by my erstwhile and formidable forensic opponent, and always highly regarded and admired friend, Sir Frank Layfield. The labours of the Layfield Committee, of the Environ-ment Committee of the House of Commons, and of Ministers in the preparation and promulgation of the Green Paper of 1981 and the White Paper of August 1983 have brought out sufficiently the basic facts and possibilities. What is now required, in my respectful submission, is not more committees or more inquiries, but decision and action.
Coming to the proposed composition of this committee, I should think that that again is neither clear nor reassuring. It will be composed apparently in part of representatives of local authority associations, themselves of course starting from a somewhat ex parte view. Then there will be "other suitably qualified persons". There is no indication of who these suitably qualified persons will be, wherein their suitability

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resides, or what qualities they are expected to possess. Perhaps they will be rating surveyors, treasurers of local authorities, accountants, economists, or even possibly Queen's Counsel; but on what basis are these people to be selected? Most important of all, how will the interest of the ratepayers be voiced? As to that, the amendment is conspicuously silent. I would submit that this is an imprecise and indefinite specification for such a committee. It reminds me of Philip Guedalla's definition of what constitutes the ideal committee in the view of government: three just men and a statutory woman.
The Government have already formulated proposals on the basis of all this data. Chapter 5 of the White Paper and the contents of the Bill show that Ministers have already digested the data abundantly available and put forward proposals for reform of the rating system. I shall deal very briefly with the three main matters in ascending order of importance.
The first is the position of precepts. This is referred to in paragraph 5.12 of the White Paper:
"Some of the evidence to the Environment Committee and some of the responses to the Green Paper suggested that it might be good for accountability to abolish precepting by the upper tier and replace it either with separate revenues for each tier or with separate billing and collection for each tier's rates. But abolishing precepting would be expensive".
It goes on in the next paragraph to say:
"However it is possible, without abolishing precepting, to make it easier for the ratepayer to understand fully who spends what. The Government therefore propose that all ratepayers should receive a separate notice of the poundage and amount being levied by the rating authority and by each major precepting authority".
As your Lordships know, that is now embodied in Clause 14 of the Bill. The results may indeed be of interest to ratepayers, but it will not give them any right of action, any remedy, or any safeguard. Therefore, I respectfully suggest to my noble friend the Minister that further consideration of this point is required.
Coming to the next matter—the position of the industrial and commercial hereditaments—I should say that this is of course anomalous and inequitable at present, as was stressed by many of your Lordships on the Second Reading of this Bill—quorum minima pars fui. In paragraph 5.15 of the White Paper the Government propose a statutory duty of consultation, and that has now been embodied in Clause 13 of the Bill.
The value of such consultation must, however, depend on the receptivity of the consulter. Therefore, I would ask my noble friend to indicate what Ministers have in mind respecting the guidance which is to be issued under Clause 13(3) of the Bill concerning the manner of consultation. As it stands, one might think that the right of consultation is perhaps not very adequate compensation for the continuing disfran-chisement of the commercial and industrial ratepayers. There is a further compensation suggested, I see, in the addition to the General Rate Act proposed by the noble Lord, Lord Mottistone, in Amendment No. 94A. Your Lordships will await the Minister's comments on that with interest.
I come then briefly to the last and most important of the three matters—valuation. Your Lordships are aware of the disparities of valuation under the present
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system and indeed of the fact that valuations tend to be out of date, the last general revaluation having taken place more than 10 years ago. The possible improvements are not of course included in the content of this Bill, but they are referred to in the White Paper. Paragraph 5.8 of the White Paper proposes a revaluation of non-domestic hereditaments on the basis of rental values. Incidentally, I see that it says:
"The Government do not propose to reopen the question of the rating of agricultural land and buildings, which are not at present liable for rates".
They were derated in, I think, 1929, at the same time as industrial hereditaments. The industrial hereditaments have subsequently been rerated. Of course the economic position of agriculture is very different in 1984 from what it was in 1929. But it would be, I think, politically unpopular and undesirable for the Government to come to any other conclusion than that expressed in the White Paper.
I would just ask my noble friend to explain the modus operandi of the last sentence of paragraph 5.9, which is not clear, at any rate to me. Paragraph 5.10 refers to domestic revaluation and the consultation document. Can my noble friend inform the House what is the news of this consultation document on what is obviously a vitally important and indeed, urgent matter?
I hope for progress on revaluation and the overhaul of the principles and procedures of valuation. In our system of valuation in this country we proceed on the basis of the hypothetical tenant. I remember Aneurin Bevan in the other place saying on one occasion that the hypothetical tenant was a very fugitive creature. I have spent a good many interesting, if not exactly hilarious, hours in the pursuit of this fugitive creature in my forensic capacity, but I am bound to say that they have hardly persuaded me of the perfection of the value of our methods and principles of valuation under the system that we operate today. I hope therefore that Ministers will press on urgently in quest of improvement and that they will feel able to do so without adding yet another committee, as suggested by the amendment.
4.20 p.m.
Viscount Ridley: I put my name to the amendment and I support the principle of it. I do so because I have often said in your Lordships' Chamber that successive governments have failed to grasp the nettle of properly reforming local government finance. The failure to undertake such a reform has resulted in the present increasingly complex system of local government finance, which is in itself undermining local account-ability. The result of this Bill will be to add to that complexity and further erode local accountability. I do not think anyone has denied that.
Surely nobody can be content with the proposals in this Bill as a long term solution to the problems that confront local government. And this, as I think the noble Baroness, Lady Birk, has said, was a clear message from the Second Reading debate which we had on the 9th April, wherever we ended up in the Lobbies.
I myself sat on the Layfield Committee, which was appointed by the late Anthony Crosland in August,

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1976. It was asked to report as soon as possible. It worked very hard for 18 months, and did its utmost to produce its report within that time. I remember having to sign my own copy in New Zealand, whence I had gone to escape from the labours; but so urgent was the need that it had to follow me out. I do not say it got things right but perhaps at least some of it is still relevant.
I cannot help noting that the report was presented to the Government at which the noble Baroness, Lady Birk, was such a distinguished component and it was immediately pigeonholed, where it has remained ever since. It is slightly ironic to find her now recommen-ding urgent action in this field. But, seriously, I think that the Government should give some indication of their future thinking in these matters. The noble Lord, Lord Thorneycroft, whose experience certainly is very valuable to us said in his important Second Reading speech that something of this kind was needed. I am sorry he is not with us today to say it again. He particu-larly said—and I think it is particularly important—that we should see that all political parties are represented on any such committee so that we can find out what is the common ground about local government between all the parties, including the associations and everyone with knowledge of it. I think this should be written into the amendment. I can see that this phrase which says, "other suitably qualified persons", as my noble friend who sits behind me says, it not necessarily the answer. It wants more thought. The amendment may in itself be defective. I therefore also feel that it is perhaps wrong to put a date into it. For that reason I hope the noble Baroness opposite will not take this to a Division because I think that the Government should be asked to think more seriously before we do that and I do not think it is a matter on which we should vote. However I think that we should explain that it is not meant to be a wrecking amendment to the Bill at all. In fact, if anything, it complements the Bill. It allows the Government to get ahead with their Bill—which they clearly have a mandate to do—while giving us some assurance, we hope, that the problem will be treated as a more serious one for the future, and that this Bill will not be the permanent answer—which it cannot possibly pretend to be. I therefore support the amendment.
Lord Sandford: I, too, welcome this amendment, not so much for the detailed proposal that it makes, but for the opportunity it has created for a debate on this matter before we embark on the Committee stage on the Bill's specific proposals. I very much agree with the noble Baroness when she says that this is a matter which concerned a very large number of those of us who took part in the Second Reading debate.
The Bill we have before us is the first Bill relating to local government finance that we have had since all the proposals and commitments—of which there have been many over recent years—for an abolition of some or all of the rates have been finally abandoned. We are now in a position of knowing that the rates are here to stay. I think there is total agreement about that. One result of all these exercises—many of them abortive—has been the recognition that whatever else might be done about local government finance, rates and the rating system provide the best basis and core of the whole subject. There is now therefore scope for
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making the improvements in the rating system to which my noble friend sitting behind me was alluding.
It is quite clear from the study of the great number of documents that have been available—and most recently the White Paper to which my noble friend has alluded—that there is general agreement about the number of things which should be done, and there is now no longer any excuse for not getting on with them.
My argument all along has been this. Your Lordships' House has now clearly decided that there is a need for this Bill and I am not disputing that. I think the Bill needs improvement in a number of respects, and the damage it will do needs to be limited in all sorts of ways. But the justification for this Bill has been established by the vote at Second Reading. That does not mean to say that there should not be all the improvements that can be made to the rating system in particular—and also to local government finance as a whole—but immediately and progressively to the rating system. So my proposal is of a rather more narrow, limited, preliminary kind to that enshrined in this amendment.
It is this: to ask my noble friend whether he would not agree that it would be useful now for all of us who are particularly concerned with the three local government associations, or any other group of people that he sees would be more convenient, to prepare a statement and to give it to the Chamber—because I think the Chamber deserves it—of exactly how matters stand with regard to the scope that there is for a reform of the rating system as we now have it and for giving effect to those improvements in the rating system about which there is already complete agreement. Your Lordships' House deserves to be told about that, and just exactly how it is going to be tackled and brought into effect.
I am not now talking about much more difficult and controversial things such as the likely introduction of local income tax—nothing like that. I am talking about those simple improvements to the rating system which have been deferred because there were proposals and commitments to abolish the rating system. I am referring to those improvements which are agreed, which are quite simple and which can be brought into effect—some of them possibly without legislation. I think the Chamber deserves to have what my noble friend can tell us about the Government's intentions in that respect. Speaking for my own association, the Association of District Councils, we would be very ready to participate with him in preparing a statement for this Chamber at the earliest possible stage in our consideration of this Bill. I should be particularly grateful for my noble friend's reaction to that suggestion. I am grateful to the noble Baroness for the opportunity that her amendment has given us for a debate on this point at this early stage of the Committee.
Baroness Stedman: We on these Benches would also like to give our support to the amendment. We accept that it has to be limited to the rating system at this point of time in order to get it into this Bill. But many speakers at Second Reading, and many speakers when we had the debate on the White Paper before that, urged for a proper review of the structure and the financing of local government, and an investigation

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into just what we expected local government to do and what its functions should be. This is one way of trying to get such an inquiry started. Like the noble Lord, Lord Sandford, and the noble Viscount, Lord Ridley, I hope that the noble Lord the Minister will take this matter back and look at it and see how far he can go to meet us on this. There is a real concern from all those involved in local government about the many and the hasty changes in local government financing. Until we can get the finance right, and until we can get the functions and the structure right, we are going to continue from time to time to have all this hassle about local government money.
We would support the amendment; but we hope, as well, that the noble Lord might indicate that he is prepared to take it back and look at it and give us more information about where the Government stand on the reform of local government finance and the rating system, before we go on to further stages of the Bill.
Lord Ellenborough: I should like to support the amendment because it is most unfortunate that there is no reference, let alone a commitment, in the Bill to an urgent reform of the rating system. This is a cross-party amendment that I would have thought should command widespread, if not universal, support. The noble Baroness, Lady Birk, in moving it, should it be accepted, will have done Her Majesty's Government a considerable service. I hope that my noble friend Lord Bellwin and his ministerial colleagues have perhaps got over their somewhat defeatist attitude towards the issue of rating reform. I hope also that my noble friend will be able to give some rather more positive indication of Government thinking. My noble friend has already been reminded that he quoted the Secretary of State who recently said that work was going on quite urgently behind the scenes. It certainly seems to be a case that if at first you don't succeed, then you must try, try and try again.
I shall briefly reiterate what I said on Second Reading. A great many domestic ratepayers have felt badly let down. Neither political party over the past 20 years has done at all well on this matter. The Conservative Party promised reform of the rates in 1974, a promise that it deferred in 1979 and which it has now more or less, rather more than less, abandoned in 1983–84. It would be tragic if the chance was totally lost by failing to make a start on the issue of rating reform while still in the first Session of a new Parliament. One has only to read the debates in another place to gauge the strength of feeling among many Government Back-Benchers.
The trouble is that the Bill does not do anything to alter the anomalies and unfairness of the present archaic rating system whereby some domestic ratepayers have to bear a disproportionate share of the total burden compared with neighbouring families living in houses of the same size but with many more salary or wage earners. Nor does the Bill do anything about the seven or eight million of the 24 million local government electors who do not make any effective contribution towards the local services that they use. The National Union of Ratepayers has put forward detailed proposals in the past. They are very complicated. I would not presume to go into them at
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this stage although I did try to do so in a debate initiated about two. years ago by my noble friend Lord Boyd-Carpenter.
I believe that ratepayers are far too much taken for granted. They are very law-abiding and docile citizens who will always pay up in the end. A great many feel much resentment. They are not, however, the sort of people who rant, rave and riot. They have no muscle power. That it why they expect a fair deal. They would be greatly heartened by the acceptance of this amendment.
Lord Thorneycroft: My noble friend Lord Bellwin will recognise that I would be the last person to urge the Government to precipitate action of any kind in the field of local government. Quite rightly, he may feel that he does not want, in the middle of the passage of the Bill, to commit himself to the appointment of a committee to examine the next stage. My noble friend may well feel that he wants to get this Bill under his belt before he advances to the next stage. That is not to say that this is not a very good amendment to have put down, enabling a very useful debate to take place. I would, however, say this to my noble friend. Although he may well refuse the amendment, there are many in this House who will be listening most anxiously to the tone of voice that he uses in turning down the amendment. We want to have some idea, without firm commitments from the Government, of how the Government see the further horizons in local government.
The Bill will be debated and discussed, but it will pass. It will not be all that different from the Bill as it came to us. I am perhaps rather prejudging the situation, but I doubt it. At the end of the day, the Government will have their Bill. If the Bill works, my noble friend will, I think, share my hope that the vast majority of local authorities would continue, as indeed the vast majority are doing today, to carry out their business and maintain their expenditure within the limits broadly approved by the Government, because the Government do not want to have to use all the powers in the Bill and they want to see local government continue in this country broadly on the lines on which the best local government has been conducted in the past. Therefore, the tone of voice that I hope to hear the Minister use will indicate that he intends to take all the steps possible to ensure that this situation comes about and that he will not allow a system of local government finance to rot and leave it without any hope of reform or emendation. I hope to hear that the Government will examine within their councils, closely and anxiously, every method that might be open to improve and polish the existing system of local government, and where local government associations have already reached agreement to hold out hope that that type of improvement could be brought about.
Without the Government accepting any amendment—I can see the difficulty about that and I am not here to press my noble friend to establish great forums of discussion and the rest—I should like to sense from the Minister's remarks an atmosphere of hopeful reform and confidence about maintaining local government in this country along the lines of the best that we have seen hitherto.
Baroness Fisher of Rednal: Following upon what has already been stated, I do not particularly wish to enter into the pros and cons of setting up the committee or to discuss those who will serve on it. More often than not, the composition of a Select Committee or any commission established by the Government is covered by the phrase "suitable persons". Nobody questions the composition until the names are known. Then one questions them, because one believes that some might be unsuitable in pursuing the cause that one wishes to propagate. Normally, however, we do not go into great detail in spelling out these matters.
I have been interested in the comments that give lip-service to something that all of us know to be entirely desirable. It has to be remembered that in discussing rates we are talking about local government expenditure. It is important to recognise that we are talking about services to people. A glance at the Mori polls, asking people how they want their rates spent, shows that they do not want to cut out services to the elderly. Nor do they want to cut out services for the handicapped. They want more money to be spent on roads. If one goes round the large cities one sees that the roads are in a deplorable state. These are the kind of issues that local government is all about.
Let us, however, consider what has already been said. The White Paper on public expenditure, Cmnd. 9143, shows that the Government are planning a 13 per cent. cut in local government expenditure over the next three years. That is in the White Paper. So when we are talking about local government expenditure we have to realise that the Government have already committed themselves to cutting that much over the next three years. A very substantial amount of money is being taken from local authorities. Therefore the decisions on the level of local government expenditure will no longer rest with the local authority. That will be gone under this Bill because central Government are determined that they will enforce their cuts by any means possible through the measures included in the Bill we are going to discuss.
The planned reduction of Government expenditure which, as I said, is in the White Paper—13 per cent. over the next three years—is automatic because of the rate-capping proposals that are in the Bill. It is no good the Government saying that the Bill is about curbing the high and irresponsible spenders. There is going to be an overall cut in local government expenditure, and whether or not we have a committee set up now to look at the subject we are committed for the next three years to a cutback in local government expenditure. We have to say that, because it will mean fewer services for the aged and for the handicapped. There will be a deterioration in the provision of local government, and whatever committee we have, we are committed to those cutbacks for the next three years.
Baroness Gardner of Parkes: I wish to oppose this amendment, and I think this is a particularly appropri-ate moment at which to do so in view of the contribution just made by the noble Baroness, Lady Fisher. This may appear an attractive amendment, but really it is nothing but a distraction from the main aim of this Bill which is to control the excess of expenditure which has been going on in local government. I am an
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elected member of a regional government. I am a great supporter of local authority services but I am very aware of the situation of the ratepayer, and he is the person we have to protect. Many of these people to whom the noble Baroness has referred, including the elderly, are people who have managed to save a little bit, and they have been very hard hit by the soaring rates in recent years. Those who have no money at all are affected less adversely because they get subsidies and other help, but those who have been thrifty and careful and worked hard and who wish to remain independent are the ones who are suffering.
This idea of a further committee to look at the rating situation is very attractive, but we have had a Green Paper and we have also had very extensive consultations and discussions. Following that, the subject was debated in your Lordships' House. It was quite clear that no generally acceptable solution could be found. Why, then, is the noble Baroness, Lady Birk, so confident that a nine-months' inquiry would come up with this answer? Why is the noble Viscount, Lord Ridley, so doubtful that it is the right date by which to set it up? It seems to me that many points have been raised which indicate that the amendment itself is not particularly suitable. But my argument against it is that it is inappropriate to put it in as a distraction in this Bill. At any time the Government can set up a committee to look further into the question of rating; but to put such a provision in the Bill would be nothing but a distraction. I support the rate-capping measures and I oppose the amendment.
4.45 p.m.
Lord Bellwin: Let me make one point clear straight away. The purpose of this Bill is to protect the ratepayer and it is urgent that we achieve that end. High-spending authorities are putting tremendous burdens on their ratepayers, and as a result both domestic and business ratepayers are crying out for protection. There must be no delay. All too often reviews turn out in practice to be excuses for delay. I would ask your Lordships to look very carefully at the review that is being proposed. It would be a very odd review. The proposed committee would be required to,
"enquire urgently into reform of the rating system".
On the face of it, that may seem a very reasonable proposal.
But what do the movers of the amendment think we have been doing for many years past? My noble friend Lord Thorneycroft knows as well as most. For a time he was involved with me in doing this very thing. The fact is that we have been looking very carefully and exhaustively at the rating system. Indeed, I respectfully submit that there can be few areas of public life more exhaustively reviewed in recent years. The first step in the review process, as we were reminded by my noble friend Lord Broxbourne, was when Layfield reported in 1976. I had meant to make the point myself but my noble friend Lord Ridley reminded us that the party who sit opposite did not take that any further forward. However, we came into office and undertook a major review of local taxation. We drew on much of the evidence and findings of Layfield when we published a Green Paper, to which my noble friend Lady Gardner has just referred.

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That Green Paper looked at the subject in detail. It was a most fascinating Green Paper. It considered every available alternative that had been put forward. It was very fair. It did not set out to influence. It compared the strengths and the weaknesses of the various systems with those of the rates. We encouraged the expression of public opinion and we received many submissions; I think the figure was some 1,500, and some of them were certainly novel. As I said on Second Reading, I wonder how many people had considered seriously a poll tax before the Green Paper. Certainly we were looking for a possible alternative to rates. If an alternative had emerged we would have had no hesitation in going for it. But there was no consensus and we did not proceed any further.
It was not only the Green Paper. The Select Committee on the Environment also decided in 1982 to carry out its own independent investigation of local taxation, based on the Green Paper. It came to much the same conclusion as the other commentators. It saw no clear way ahead. The only option where the committee saw any point in further work was a local income tax. But the administrative difficulties are enormous and certainly there could be no early solution to the problem of over-spending. That is the key point about reforming the rating system. Whatever one's view is of that possibility, it has to be said that it is not in itself a way of preventing the minority of over-spenders from carrying on in the future as they have done in the past. As I have already said, there is an urgent need to curb this over-spending.
The amendment proposes that the statute should lay down the composition of the committee. I do not think that would be wise. It is always a very delicate matter and it is not right to prescribe compositions on the face of the statute. I do not want to make a very long speech on this. Certainly I do not want to pick up the comments of the noble Baroness, Lady Fisher, who talked about public spending reviews inevitably meaning cuts, and so on. I suspect that we shall be getting into this area later on when we discuss other amendments. If and when we do, I shall want to answer her by referring, as I did on Second Reading, to what I called the third option. It is not always a question of putting up the rates or cutting the services. There is the option of doing things better and getting more for what one spends, and that is what is being achieved by many authorities today. I submit we will come to that later on.
In a moment I shall come to the other observations made by my noble friend Lord Thorneycroft. A review of the rating system at the present time is unnecessary. It would simply mean going over old ground which has already been gone over and examined very thoroughly. I am well aware that my noble friend is listening not just to what I say but to the tone in which I say it, and that puts on me a very great responsibility. I have to choose my words carefully, as I am sure he will appreciate. We need to ask what even a wide-ranging review might come up with it we are talking about increasing accountability. I have already explained the problems that we have encountered in looking for an alternative to the rating system. I do not want to speculate at this time about possibilities that
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would change the whole face of local government as we know it. There are no easy solutions to be found, and what is proposed in the amendment is not the way forward. It would lead to delay and we could not accept it as it is.
I am going to ask my noble friends, in particular my noble friends Lord Sandford and Lord Broxbourne, to bear with me if, in responding to this particular amendment, I do not take up the points which they raised, because points of consultation and so on are scheduled to arise in later amendments. I ask my noble friends to bear with me and allow me to deal with those points when we deal with the later amendments. I am pleased that the noble Baroness, Lady Birk, feels the same way. It will all come out and we shall probably be able to have better debates if we deal with those matters in that way.
However, before I deal with the point which my noble friend is waiting to hear me deal with, let me quickly say, in response to the observation of my noble friend Lord Ridley to the effect that no one will disagree that the Bill will adversely affect local accountability, that of course he knows I would disagree and so, I suspect, would those who feel as I do about the Bill.
The noble Baroness, Lady Birk, has said that there need not be a lengthy investigation; I think that she intimated nine months, or something of that length. To do what some people feel ought to be done—and this is the point with which my noble friend Lord Thorneycroft wants to hear me deal—cannot be "knocked off" in that way. This is something quite different. My right honourable friend the Secretary of State used the expression, "Never say never again". He said, and I say it again today, that at some point circumstances might well arise in which—and I choose my words carefully—a wide-ranging review of local government matters might, indeed, be a sensible step. I have said why that stage is not now. Legislation has to be in place and we would not want to see anything that would delay it. Certainly to do what the amendment suggests, and to limit any review to the reform of the rating system would, in my view, be totally inadequate. The fact is that that particular furrow has already been well and truly ploughed.
I hope that your Lordships get from me at least the sense of what I believe. There may well come a point when a review far wider than that mentioned in the amendment would be appropriate. The Government are not at all of a closed mind as to that. However, today I would prefer to say no more about it. My noble friend Lord Thorneycroft absolutely hit the nail on the head—even if I am not doing so—when he said that this Bill has to be on the statute book to do what those of us on this side of your Lordships' Committee, and many others, feel is essential. When that is in place and when the other local government legislation is in place, then it would not be right to say that nothing should be looked at again. That is what I say today, and I hope that your Lordships will accept it from me.
This should not be a matter for voting and dividing. I take the amendment in the spirit in which the noble Baroness put it forward, certainly in the spirit in which my noble friend Lord Sandford referred to it. I know the concerns. I ask the noble Baroness to accept from me that I appreciate those concerns; but as far as the amendment goes we really cannot accept it.
Lord Sandford: I wonder whether the Committee would allow me to intervene briefly once more before the noble Lord, Lord Underhill, responds to the Minister and decides what to do with the amendment in his name. My noble friend on the Front Bench very properly, and very much as expected, spent a great deal of time dealing directly with the amendment. I welcome the amendment, not so much to support it as to say how useful I think it is to have this type of debate at this stage of the Bill.
My noble friend asked me to be patient because he wanted to be able to tell me at some later stage, which he did not indicate, what he is prepared to say to the Committee about those simple and agreed improvements which can be made to the rating system. There is not any question of looking at alterna-tives to the rating system. I entirely agree with him that that is not something to be done now, because it has been done very thoroughly and very recently. But while all that was going on there were a number of agreed improvements to the rating system as we have it now, and as we have known it for a long time, which were deferred. Now that the rating system is agreed by all of us to be with us to stay, not only can those improvements be looked at but they can be acted upon. I think that the Government owe it to the Committee to give an indication of what they intend to do about those quite simple, narrow factors. I would very much welcome an assurance from the noble Lord that he will have some discussions with me and with the other associations as well before we get much further into this Bill, to see what can be said to the Committee about that much narrower, simpler and more straightforward point.
Lord Broxbourne: I wonder whether your Lordships would be good enough to allow me to intervene for one minute?
Baroness Birk: I think it is Lord Underhill's turn.
Lord Broxbourne: I am asking whether your Lordships would be good enough to extend to me for one minute only the same indulgence as has been kindly extended to my noble friend Lord Sandford. I want to say only this. My noble friend the Minister, in saying that he would not deal (and I perfectly understand his reasons) with the specific suggestions made by my noble friend Lord Sandford and me, gave as his reason that they would be more usefully dealt with when we come to specific amendments concern-ing them. As regards my point about the improvement of our valuation procedures and principles, I point out, with respect, that such a course is not possible, because, as I said at the time, the Bill does not deal with those matters. If my noble friend could have that point in mind, I would be more than grateful.
Lord Underhill: Let me make it quite clear that I am not replying to the debate; that will be done by my noble friend Lady Birk. But naturally I am disappointed with what the Minister has said so far; and I should like to emphasise to the Committee that we are not absolving any particular Government from any responsibility as regards not tackling the matter previously. We are dealing with the situation facing us
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in 1984, and that is the issue that I want to put before the Committee.
The amendment is not linked to any specific proposals in the Bill, and the Minister has said that there must be no delay. Paraphrasing what the noble Lord said on Second Reading, he said that a search for a better financial regime for local authorities is for the future; it must not be allowed to delay this Bill. I would ask any noble Lord to tell the Committee how the passage of this amendment will delay the Bill. It is not linked to the delay of the Bill. It is not linked in any way to any particular provision in the Bill. The noble Baroness, Lady Gardner of Parkes, said that it is a distraction from the purposes of the Bill. I am certain that the Minister would not be prepared to agree that this amendment is a distraction from the purposes of the Bill. It has no relation to that particular aspect.
The amendment will not in any way delay the Bill. What it says is that the review shall be established by 31 st December. I am sure that the Government expect or hope to get this Bill through before the Summer Recess. Therefore, what we are saying in the amendment is that the review shall be established before the end of this year. Any reference to any particular date as regards the presentation of the report is not contained in the amendment.
There have been criticisms, particularly from the noble Lord, Lord Broxbourne, about setting up a further committee. Speaking for myself, if there were a definite assurance from the Government that they will do something before the end of this year then that might be acceptable. But we have not had such an assurance, and I therefore hope that anyone who believes that there should be a review of local government finance as a matter of urgency, will support this amendment.
There has been criticism of the wording of the amendment, especially the words "suitably qualified persons". We are leaving the Secretary of State to decide who are the suitably qualified persons to be added to the representatives of the local authority associations. I am certain that if my noble friend, in her amendment, had attempted to go into detail as to who should be appointed, the amendment would have been criticised on those grounds.
The noble Lord, Lord Thomeycroft, said that the Minister may consider it unwise to proceed with this proposal in the middle of the Bill. We are not asking for this proposal to be proceeded with in the middle of the Bill. We are asking that a committee should be set up by the end of this year, which will be some months after this Bill has proceeded through Parliament.
Every noble Lord who has spoken has said that there is general concern throughout the Committee regarding the need for a review of local government finances. As I have said, we are not attacking any particular Government for not having faced this situation before. In their responses to the White Paper all three local authority associations urged that a review of local government finance should be undertaken. My two colleagues, the president of the County Councils' Association and the president of the district councils body, and I all know this. Some months ago in their responses to the Government's White Paper the three associations urged that this

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should be regarded as an essential matter to be dealt with fairly quickly. They regretted that the White Paper did not propose a fundamental review of local government finance.
The three local authorities' associations regard the reform of local government finance as another step towards accountability. Surely one of the strong criticisms that has been made regarding aspects of the Bill has been to do with accountability. We all want greater local accountability, but it must be agreed that only by tackling the whole basis of local government finance can that be fully achieved. I am certain that the Minister will not claim that this Bill solves all the problems. It does not. This afternoon the Minister has claimed that the Bill is for a specific purpose. Irrespective of the merits or demerits of the Bill, the amendment makes no reference at all to that, as did the reasoned amendment which we voted upon at Second Reading. The amendment says simply that this is such an urgent question that we should proceed with it as a matter of urgency and establish the review. Any criticisms of the actual wording of the amendment could be dealt with by the Minister saying that he accepts the principle and will ensure that something suitable is brought forward which will meet the actual purpose of the amendment, which is to extend local accountability, to strengthen the desire of all of us to improve the position of local government finance. That can be done by the whole Committee readily supporting the amendment before us.
Lord McCluskey: I rise to support the amendment. I found the Minister's reply to the debate surprising, disappointing, and entirely irrelevant to the debate and certainly to the amendment. I do not want to repeat the point which my noble friend Lord Underhill has just made about the delay. Nothing in the amendment would delay the implementation of the Government's scheme by a single minute.
The second point which the Minister made was that the statute should not dictate the membership of the committee. The provision does not do anything of the kind, and even if it did, it would have many friends in other statutes, because I know many which do precisely that. That is not an argument against it. I am surprised that it should be advanced as a serious argument.
The third point which was made by the Minister is entirely irrelevant. I support the view put forward by the noble Lord, Lord Sandford, and the noble Viscount, Lord Ridley. This amendment is not about the total reform of local government finance. I read the Layfield Report and was lost in admiration for the work that went into it. I read the Government's Green Paper. I found it a fairly convincing document about the difficulties of totally reforming local government finance.
However, in its terms, this amendment is concerned with reform of the rating system, and anyone who has any knowledge of it, whether in the field of local government or, like the noble Lord, Lord Broxbourne, or me, in the law, is well aware that the system, be it in England and Wales, or in Scotland, is shot through with anomalies. Lay people, who are not precisely concerned with the law, nor indeed, with local
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government itself, are well aware of these anomalies. Surely the modest argument put forward by the noble Lord, Lord Sandford, and the noble Viscount, Lord Ridley, is one which the Government ought to consider and reply to in relation to this amendment, and they ought to undertake to do what is required here and set up an inquiry into this limited matter of the reform of the rating system. That is all that the amendment calls for. I am sure the Government could give the noble Lord, Lord Thorneycroft, some satisfaction by making rather more sympathetic noises about that than the Minister has so far done.
Lord Bellwin: I should like to make just one response to the noble and learned Lord, Lord McCluskey. The very thrust of what I am saying is that a reform of the rating system is the one thing which has been carried out very extensively and very recently in more than one way, and by more than one body of people. Choosing my words carefully, I was trying to intimate that I do not think that that is enough. First, at this moment in time there is no point at all in doing that. But there may well be a moment in time when such a look ought to be undertaken, and perhaps included in wide-ranging matters. However, it is not for the short term; it is not a matter for a few months. It is a much broader matter. Layfield did not get us to where we want to be. The Select Committee agreed with that. The Green Paper was not forthcoming on this matter. With others, I spent many years on this matter. So to suggest that we might come forward with some answer in a few months, that we might say "Eureka! this is it", is not adequate. Indeed, I am trying to indicate that something much broader may well be needed. At the right moment in time the Government will not be unsympathetic to that.
I believe that that is what my noble friend Lord Thorneycroft wanted to hear me say. If he thinks otherwise, he will say so. Certainly, it is what I believe and what I know to be the right way in which to proceed. Therefore, if the noble and learned Lord considers that to be irrelevant, I am sorry. But it is certainly what I believe and it is why this amendment is not needed at this moment in time. The amendment is counter-productive and, as my noble friend Lady Gardner said, it is a distraction, despite the fact that it is not included in the Bill at the moment.
Lord Stallard: I, too, want to support the amendment. I have listened very carefully to the discussion, as I listened to the previous debates on this issue. I started by listening to both Second Reading debates here and in another place, and I read many papers about the issue. I began to get the impression that it would have been far better had the Bill been referred to a Select Committee at that stage and not steamrollered through the whole procedure. I have been strengthened in that view by the discussions that I have heard today. I have a great deal of sympathy with the views put forward by the noble Lord, Lord Sandford—and some time ago I would not have dreamt that this would be the case—that in the recent discussions that have taken place and in the recent papers that have been produced by all kinds of academic and parliamentary sources a number of constructive proposals have emerged about how the rating system could be improved.

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As the amendment refers only to the rating system, I agree with the noble Lord, Lord Sandford, that we might be out of order if we try to include all the other matters. However, a whole number of constructive proposals have emerged during the course of discussions which merit further discussion and investigation. Even with the Bill going through Parliament as it is, I should not have thought it would be impossible to set up a committee to look at the reforms that have been suggested by all kinds of organisations throughout the country. We are all very conscious of the fact that much of the most recent controversy and discussion about the whole issue of local government finance was sparked off by a previous manifesto commitment which said that:
"within the normal lifetime of a Parliament we shall abolish the domestic rating system and replace it by taxes more broadly based and related to people's ability to pay. Local authorities must continue to have some independent source of finance".
That was a previous manifesto commitment in 1974. In fact, it emerged from a committee chaired by the present Prime Minister and set up by the then Leader of the Opposition. So that was the starting point for this discussion. It ranged over a wide number of issues. It came back as one paragraph in the December 1981 Green Paper. That was not even considered by the environmental committee. A White Paper was produced after Parliament had risen for the Summer Recess. Then we get this Bill. That seems to me a bit scant, to say the least. It was not a very thorough investigation of all the discussion that had taken place—again to say the least.
This amendment would give the opportunity to many people—and if I had the time, I could give many examples and many arguments, which we hope will emerge in later amendments on this Bill—to refute the assertion that there is widespread public demand for this particular Bill. The contrary is true in every field. I could go through umpteen quotes, but perhaps I may give just one, which is:
"Businessmen themselves do not subscribe to the White Paper's view that 'local rates form a particularly heavy burden on business and commerce, comparatively much more so than national taxes'."
That is stated in paragraph 1.7 of the White Paper.
A recent survey taken by the London Chamber of Commerce showed that both the London and South-East samples of businessmen ranked rates seventh out of a list of seven business costs, and they were of lesser significance than labour costs, payroll taxes, bank charges, other taxes, rent, and transport. We could go through a number of other people who take a similar view of the Bill. We can prove later in the discussions that there is not widespread support anywhere within or outside local government for this legislation.
What there is support for is a thorough discussion of the proposals and the suggestions that emerged from previous discussions on all the Green Papers, White Papers, commissions, and committee reports which have been produced hitherto. As has been mentioned by my noble friends on the Front Bench, there is a new situation in the country at the moment. There is a new attitude to the question of local government finance, and rates in particular. There are new problems because of the different domestic circumstances of millions of our people. This has to be taken into consideration. It has not been considered before.
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Because of these new circumstances there have been new proposals. This amendment would give the opportunity for the country as a whole, and certainly for us, to look at these new proposals.
5.13 p.m.
Lord Bellwin: Perhaps I may make two quick points, and I promise then not to speak again on the debate on this issue. I ought to say to my noble friend Lord Sandford that within Part III of the Bill there are a number of proposals for reform. But if he and his association would like to come to discuss those proposals and any others, we should be delighted to talk about them, as we should with any of the associations, come to that. I hope that we would always do that.
May I say to the noble Lord, Lord Stallard, how wrong he is. Let him go and talk to the people who are queueing up to leave some of the cities because of the effect that rates have upon them. Let him talk to the people who are actually paying and tell them that rates do not matter. Let him talk to people who have lost their jobs because firms, having had their rates increased so much, have closed down. I shall give him names, if he wants them, until the cows come home. He is very wrong about that.
Lord Sandford: Before the noble Baroness winds up this debate I should like to respond with thanks to what my noble friend has just said. What I and my noble friend Lord Broxbourne have been asking for, and what the noble Lord, Lord Stallard, was just supporting, was the suggestion that we owed it to the House and to the Committee in debating this Bill to have a discussion with my noble friend before we get any further into it. The discussion could be on those simple, agreed, minor improvements to the rating system which can now be considered afresh, in view of the fact that all proposals and all commitments to abandon the rating system have now themselves been put to one side. That is the small change which makes it possible to have that useful discussion.
May I say to the noble Baroness, Lady Birk, that her amendment has served a useful purpose in having this debate now. May I make so bold as to suggest that if she would leave it there for the time being and come back and press it more vigorously, if she feels she must, at the Report stage, that would be the most useful thing to do. In view of what my noble friend has said in the way of assurances on discussions, particularly about improvements to the rating system, which can be considered immediately, I would hope that she would not feel it necessary to press this amendment at this stage.
Baroness Birk: I appreciate that this is a difficult situation. I moved an amendment which was reasonable in substance and I think reasonable in the way that it was moved, and kept it quite apart from the Bill with which it is connected. I think that the noble Lord, Lord Thorneycroft, was not in his place when I moved the amendment. May I repeat, for other noble Lords and for the noble Lord, Lord Thorneycroft, that during Second Reading 19 noble Lords—and these included himself—referred to the problems and anxieties about local government finance and the rating system at this time.

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The noble Viscount, Lord Ridley, when he supported the amendment, referred to this Bill as eroding local accountability and also causing a great deal of other trouble. I am afraid that I have not got his exact words written down, but it seems to me that this is the core of the argument. My noble friend Lord Underhill, and my noble and learned friend Lord McCluskey, have both answered many of the points that were made against the amendment, but I must come back to what the Minister said, which I found extremely disappointing.
He did not give out any real hope at all of anything happening on this subject. He said that circumstances might arise when a wide-ranging review would be needed. He repeated what the noble Baroness, Lady Gardner of Parkes, has said, that this was a distraction. I repeat again it is not a distraction. The Bill will continue on its way. In fact, I would put it to the Minister that this is a help to the Government. He is as aware as we are that it is not only the feeling in this House as expressed during Second Reading; it is not only the feeling of the minority—and including some of the Back-Bench Members of the Government party—in another place who feel so strongly about this Bill; it is not only Labour councils; it is many Conservative councils as well.
This Bill is an unpopular, unhappy Bill. This is the reason why the Government—and we had quite a lengthy exchange on this on which neither the Minister nor I took part at Question Time—had to call in all their hordes in order to make sure that the reasoned amendment that was moved on Second Reading was soundly defeated by the Government. The anxiety about the Bill is well known.
When the noble Lord, Lord Thorneycroft, wanted some statement—and he put it that perhaps the Minister might not be able to give anything more specific during the passage of the Bill—my feeling was that he was also hoping for something a little more solid than in fact has emerged. I shall not go over again the question of the composition of the committee because it was dealt with effectively by my noble friend. If we had listed numbers of people, or said that they should be from this profession or that profession, we would have been told that this was tying them down, but it is wide open for the Secretary of State.
It is true, as the noble Lord, Lord Sandford, himself said, that a great many constructive ideas have recently come from a great many studies. There is a difference between now and the other times when these papers have been put up, or the Layfield Report was completed. I acknowledge, as I did when I moved the amendment, that this is not one-sided where all the blame rests with Conservative governments. Labour governments have been negligent in this area as well, and we know it and admit it. I believe that one of the reasons why this has been so is because there has never been quite the urgency that there is today to do -something about this—although on a previous occasion the noble Lord, Lord Thorneycroft, had said that what we wanted was not so much more discussion about it, but action.
What we are suggesting is a kind of committee which would not take a great deal of time and would
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not be an enormously large committee. Its brief would be to come up with something which would then be able to be put into action or to be discussed so that it would then form part of something which would not only be done but be seen to be done about this very vexed question.
I should very much have liked to accept the plea or offer from the noble Lord, Lord Sandford, but I fear that the reply was so negative, so down-beat, that it gave us nothing to hold on to. The Minister was perfectly honest about it. He did not say: "Wait until the next stage when I might come with something"—for obviously, he is not going to come with anything. Because of that, I really feel that I must test the feeling of the Committee about it.
Viscount Ridley: Before the noble Baroness does that, has she considered the fact that if she tests the feeling of the Committee and loses, the Government will be unable to do anything about looking at this matter?
Baroness Birk: I had thought about it. The Government are then in a position, if this is lost, to bring forward something themselves. The Government can then put up their own amendment. They obviously do not like this one, anyway. Or any noble Lord can come forward with a different amendment. What I want to test is the feeling for the principle; because, however people vote, the feelings that have been expressed during this debate have really been such as to ask the Government to take some action and to show that they are going to take some action. If the Government do not do so, they are going right in the face of the Committee—and are depending on the vote of people who have not heard the debate at all.
5.22 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 108; Not-Contents, 134.

DIVISION NO. 1

CONTENTS

Ailesbury, M.

David, B.

Airedale, L.

Dean of Beswick, L.

Ardwick, L.

Delacourt-Smith of Alteryn, B.

Attlee, E.

Denington, B.

Aylestone, L.

Donaldson of Kingsbridge, L.

Banks, L.

Donnet of Balgay, L.

Beaumont of Whitley, L.

Ellenborough, L.

Beswick, L.

Elwyn-Jones, L.

Birk, B.

Ennals, L.

Blyton, L.

Evans of Claughton, L.

Boston of Faversham, L.

Ewart-Biggs, B.

Bottomley, L.

Fisher of Rednal, B.

Briggs, L.

Foot, L.

Briginshaw, L.

Gaitskell, B.

Brimelow, L.

Gallacher, L.

Brockway, L.

Gladwyn, L.

Brooks of Tremorfa, L.

Graham of Edmonton, L.

Bruce of Donington, L.

[Teller]

Caradon, L.

Grey, E.

Carmichael of Kelvingrove, L.

Hale, L.

Chitnis, L.

Hampton, L.

Cledwyn of Penrhos, L.

Hanworth, V.

Collison, L.

Harris of Greenwich, L.

Darling of Hilisborough, L.

Hatch of Lusby, L.

177

Henderson of Brompton, L.

Ponsonby of Shulbrede, L.

Heycock, L.

[Teller]

Houghton of Sowerby, L.

Prys-Davies, L.

Hunt, L.

Rhodes, L.

Irving of Dartford, L.

Roberthall, L.

Jacobson, L.

Rochester, L.

Jacques, L.

Ross of Marnock, L.

John-Mackie, L.

Sainsbury, L.

Kagan, L.

Scanlon, L.

Kennet, L.

Seear, B.

Kirkhill, L.

Serota, B.

Kirkwood, L.

Shackleton, L.

Lawrence, L.

Simon, V.

Leatherland, L.

Stallard, L.

Llewelyn-Davies of Hastoe, B.

Stedman, B.

Lloyd of Hampstead, L.

Stoddart of Swindon, L.

Lloyd of Kilgerran, L.

Stone, L.

Lockwood, B.

Strabolgi, L.

Longford, E.

Taylor of Blackburn, L.

Lovell-Davis, L.

Taylor of Mansfield, L.

McCluskey, L.

Tordoff, L.

Mayhew, L.

Underhill, L.

Mishcon, L.

Wallace of Coslany, L.

Molloy, L.

Walston, L.

Mulley, L.

Wells-Pestell, L.

Nicol, B.

Whaddon, L.

Ogmore, L.

White, B.

Oram, L.

Winchilsea and Nottingham,

Parry, L.

E.

Phillips, B.

Winstanley, L.

Pitt of Hampstead, L.

Wootton of Abinger, B.

NOT-CONTENTS

Abercorn, D.

Gridley, L.

Airey of Abingdon, B.

Grimthorpe, L.

Allerton, L.

Hailsham of Saint

Ampthill, L.

Marylebone, L.

Auckland, L.

Halsbury, E.

Avon, E.

Harris of High Cross, L.

Bauer, L.

Henley, L.

Belhaven and Stenton, L.

Hood, V.

Bellwin, L.

Hornsby-Smith, B.

Beloff, L.

Hunter of Newington, L.

Belstead, L.

Hylton-Foster, B.

Bessborough, E.

Ilchester, E.

Blake, L.

Kaberry of Adel, L.

Boardman, L.

Kemsley, V.

Boothby, L.

Kinloss, Ly.

Boyd-Carpenter, L.

Kitchener, E.

Broxbourne, L.

Lane-Fox, B.

Caccia, L.

Lauderdale, E.

Caithness, E.

Lloyd, L.

Campbell of Croy, L.

Long, V.

Cathcart, E.

Lonsdale, E.

Chelwood, L.

Loudoun, C.

Chorley, L.

Lucas of Chilworth, L.

Cockfield, L.

McAlpine of West Green, L.

Coleraine, L.

McFadzean, L.

Cork and Orrery, E.

Mackay of Clashfern, L.

Cottesloe, L.

Macleod of Borve, B.

Craigavon, V.

Mancroft, L.

Cullen of Ashbourne, L.

Margadale, L.

Daventry, V.

Marley, L.

Davidson, V.

Marsh, L.

De La Warr, E.

Marshall of Leeds, L.

Denham, L. [Teller]

Massereene and Ferrard, V.

Digby, L.

Merrivale, L.

Drumalbyn, L.

Mersey, V.

Eccles, V.

Middleton, L.

Elliot of Harwood, B.

Milne, L.

Elton, L.

Milverton, L.

Enniskillen, E.

Monk-Bretton, L.

Ferrier, L.

Morris, L.

Forester, L.

Mottistone, L.

Fraser of Kilmorack, L.

Murton of Lindisfarne, L.

Gardner of Parkes, B.

Norfolk, D.

Glenarthur, L.

Northchurch, B.

Gormanston, V.

Nugent of Guildford, L.

Gowrie, E.

O'Brien of Lothbury, L.

Grantchester, L.

Onslow, E.

Gray of Contin, L.

Orkney, E.

178

Orr-Ewing, L.

Swinfen, L.

Pender, L.

Swinton, E. [Teller]

Pennock, L.

Terrington, L.

Plummer of St. Marylebone, L.

Teviot, L.

Porritt, L.

Teynham, L.

Renton, L.

Thorneycroft, L.

Renwick, L.

Todd, L.

Romney, E.

Tranmire, L.

St. Aldwyn, E.

Trefgarne, L.

St. Davids, V.

Trenchard, V.

Saltoun, Ly.

Trumpington, B.

Selkirk, E.

Tryon, L.

Sempill, Ly.

Vaux of Harrowden, L.

Skelmersdale, L.

Ward of Witley, V.

Somers, L.

Westbury, L.

Spens, L.

Whitelaw, V.

Stamp, L.

Wise, L.

Stodart of Leaston, L.

Wolfenden, L.

Sudeley, L.

Young, B.

Suffield, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.30 p.m.
Baroness Stedman Baroness Stedman moved Amendment No. 2:
Page 1, line 9, leave out ("any") and insert ("the 1985/86").
The noble Baroness said: In moving Amendment No. 2 I refer back to Second Reading when we said from these Benches that we hoped to see this Bill leave this House with some sense of accountability and parliamentary scrutiny written into it. That is the common theme that runs through most of the amendments that my noble friend Lord Evans of Claughton and I have put down on this Bill. What we want to do is to tighten up on the councillors' account-ability to their electors and also to have proper parliamentary scrutiny of what is going on.
The Secretary of State's powers under this Bill are extremely wide-ranging and throughout the amendments which we have tabled we are trying to involve Parliament as much as possible in the process of designations, of re-determinations et cetera, and we are trying to tie the Secretary of State to using specific credible criteria and to remove the vague generalities which have given him what we think are such dangerously arbitrary powers.
There is no need to talk for a long time on this amendment. It is self-explanatory. In a sense it is a paving amendment to others which follow and it is moved in the light of the later amendments for annual renewal of these provisions. It is an effort to try to place some time limit on the Bill and the major constitutional changes that are involved in Part 1. I beg to move.
Lord Bellwin: Before I comment on the amendment I wonder whether the noble Baroness would agree that, as I understood it, with this amendment she was also dealing with Amendments Nos. 6 and 7.
Baroness Stedman: Amendments Nos. 6 and 7 were in the names of the noble Baroness, Lady Birk, and I thought she would probably be speaking to those two.
Lord Bellwin: Perhaps the noble Lord, Lord Graham of Edmonton, will be dealing with them.
Lord Graham of Edmonton: Perhaps it would be for the convenience of the Committee if I speak to the following amendments:
Amendment No. 6: Page 1, line 12, at end insert—
("( ) The provisions of this Part of this Act shall expire on 1st April 1986.")
Amendment No. 7: Page 1, line 14, leave out ("a") and insert ("the 1985/86") Page 1, line 14, leave out ("a") and insert ("the 1985/86")
These amendments complete the first part of the debate on this matter. Therefore, I shall speak to Amendments Nos. 6 and 7 standing in the name of my noble friend Lady Birk. As has already been seen by the advisers to the Minister, Amendments Nos. 2, 6 and 7 are all part of a piece. The purpose of them clearly is to ensure that in the proceedings, after the Bill becomes an Act, we are not simply left to a timescale which is frustrating and indeterminate.
Amendment No. 2 seeks to leave out the word "any" and without that word having been taken out the clause reads,
"issued for any financial year".
As the noble Baroness has pointed out, we are in the business in this debate of trying to ensure that at least once a year the Minister needs to come back to this House to explain, to report, to renew, to tell us what has happened over the previous time.
Amendment No. 6 adds at the end of line 12 after the words:
"in accordance with those provisions"—
the words:
"The provisions of this Part of the Act shall expire on 1 st April 1986".
Thus we are giving a life of one year—not to the whole Bill—to this particular provision. Then move down the page to line 14 where we delete the word "a" from the phrase,
"in respect of the making of a rate"
and we are seeking to insert "1985–86".
We need to justify the reasons why we on this side of the Committee feel that this is necessary. The recent history of local government which has been referred to more than once is a catalogue of disaster. I do not know whether it has been by design. I have served on a number of committees in another place and in my short period here, but I do not think that any Minister deliberately sets out either to court public anger or to produce something which he knows before he starts will not work. We start off with the premise that every time—including this legislation—the Minister tells the House and the Government tell the country that they believe they have the answer. If nobody else does, the Government must believe that this Bill is the answer to the problem. The problem has been mentioned time and time again—the noble Lord earlier today talked in terms of the manifesto commitments—and this is designed to deal with big spenders. But the great problem is designation; who designates and who is a big spender. There is a whole range of matters which has to be tested over a period of time.
Without the amendments one could limp along for a long time and finally the Government would say that they have it wrong again. Getting it wrong in local government is no new experience for this
180
Government. But nevertheless they do not like doing it. We are saying that they should give themselves a year. If they really believe that it is right and will work at the end of 12 months they will come back and will tell us, "There you are. We told you. We have got it right, as near right as we can, and with one or two adjustment or minor changes we think we have it right". But if the record of the Government is repeated in this legislation as with other local government legislation, we know that within 12 months they will be sorry that they did not take heed of the words of their noble friends sitting behind the Minister whose associations time after time, from the Local Government Act 1980 and on since, have pointed out the error of the ways of the Government in making this legislation, let alone the finished product.
The records are not secret or official secrets, but the record books and journals are studded with the protestations of the friends of the Minister who have said that although they are with him ideologically they believe from their experience throughout the country—this is not just one man or one woman talking—that the Government have it wrong again. That has been said more than once.
I am sorry that the noble Baroness, Lady Gardner of Parkes, is not with us now. I am sure she will be back because she is an assiduous attender of debates on local government matters. She was quick in a generalised statement to point out how much she favoured the rate capping Bill. She ought to know that I have a six-page letter from the town clerk of the London Borough of Enfield, in which Southgate that she represents on the GLC rests, which is full of bits and pieces. I shall give four or five examples in this debate because there are enough items for me to give four or five examples in each of the next four or five debates. This is the kind of response which is fairly general from loyal supporters of this Government, and supporters of the Minister, when one talks in terms of rate-capping.
Let me quote from this page which reads:
"The main reason why the domestic rate in Enfield increased by more than the RPI was the massive reduction in Government support".
One never hears the fact, which is true, that the prime reason why local authorities have been suffering so badly is not so much the overspending which the Minister says he will tackle, but the under-provision by the Government for a great many authorities like Enfield. The Enfield authority goes on:
"The council is concerned at the way in which the Government is seeking to do this, which will potentially involve central Government control over the budgets and therefore the policy of the majority of local authorities".
These are the views of the friends of the Minister and of the Government, and if it is revealed after the first year that what the Minister intends in this legislation is right, then, knowing the fair-minded majority group in Enfield, they will be the first to write to me and say, "We are sorry. We were wrong and the Minister was right." But if what happens in the first year is that which they have said, then I shall be happy to write into the record—
Lord Bellwin: Does the noble Lord believe everything they say?
Lord Graham of Edmonton: I certainly believe everything they say, and I say that even when I hear the Minister speaking from a sitting position. The situation is that in the London Borough of Enfield, as in many others, there is serious concern at the impact of this Bill on local authorities who are genuinely trying to find their way through this morass. The Minister knows that the Local Government, Planning and Land Act 1980 introduced the block grant. I recall that all three associations were unanimous in condemning the mechanisms—the triggers, the tapers, the various penalties' and so on—and what was said has come to pass. The working of that Act is detested. The effect may very well be to the Minister's satisfaction, but the working of it is detested by local government whether Labour controlled or others.
That was followed by the Local Government Finance Act 1982, which was wrapped up with the then blue-eyed boy of an idea—the referendum. It was said, "We will let local people decide by a referendum whether they are in favour of increasing the rates". That idea was very quickly dropped. The point I am making is that I do not wholly blame the Minister and his colleagues, but every year it is possible for the Minister and his advisers to reflect on whether they have got it right this time. What we are saying in this series of amendments is. "Let us have 12 months after it comes into action". We are not arguing that the Bill should not pass. We are arguing that after 12 months the Minister ought to be in a position where he can see how rate limitation has turned out in practice.
The practical difficulties which must be seen are readily understood, particularly in the age of computers and new technology. These are all matters which are in the gift of the Minister to be used. We support the amendment of our friends on the Alliance Benches. What we are saying is that we ought not to leave the Bill as it is at present, with an open-ended interminable commitment. We want to set a limit. I say it to the Conservative Members opposite, that if they are genuinely concerned about the dangers of centralisation, and about not being seen to grasp more power than is legitimate, they should at least accept the amendment which enables them to come back in a year to consider their legislation.
If the Minister says, "This is novel and unique. No legislation is passed for a year", what he will really be saying is, "I honestly believe that I have got it right this time. I did not get it right last time or the time before, but I am satisfied, despite the enormous anxiety of my supporters in the country, that I have got it right this time". We do not believe that he has got it right this time, and we believe that the problems we have been told about by the Minister's supporters will come to pass. We want to give the Minister an opportunity to come back here and report to the House after 12 months.
So we think that this is a reasonable amendment. It is put forward in a genuine spirit of trying to meet the Government half-way and trying to bring with us the supporters of the Government, who have expressed their doubts about the manner in which the legislation will work. There are arguments about over-spenders, big spenders, who they are, and so on; but in this amendment we are asking, "Why not set a time limit?" The Government know that there have been
182
seven attempts in the recent past to get local government right, and we very much hope that our amendment will secure the support of the Committee.
Lord Bellwin: The noble Lord is a devil for punishment. Can your Lordships imagine doing this all over again every 12 months?—and we have not even started yet. I cannot resist making a comment from a standing and not a sitting position. The noble Lord referred to Enfield, and I would only refer him to the leader of Enfield to whom I responded at great length—perhaps I ought to have sent a copy to the noble Lord—as a result of which we had words together. I suspect—and I put it no stronger than that—that he would not endorse those same sentiments today as were in the letter written by his chief executive. But that is perhaps a separate matter.
Lord Graham of Edmonton: I can give the Minister the date of the letter that I received.
Lord Bellwin: It is the same letter.
Lord Graham of Edmonton: If the noble Lord had the same letter as I did and he responded to the leader, then the leader has yet to report the noble Lord's observations back to the council.
Lord Bellwin: I cannot speak for the leader and his council in any way. I can only report that a letter was sent to me. I saw that the noble Lord had received a copy of the same letter. He knows that I am rather assiduous in writing on everything that I feel I ought to communicate. In fact, this was between other parties and I hope that the noble Lord will not feel I was out of order in not replying to him.
The noble Lord referred also to the block grant and referenda. All I can say is that if he would like to tell the Committee why the previous multiple regression analysis basis for deciding the distribution of grant, prior to the introduction of block grant in the 1980 Act, was better than block grant, he will be the first one with the temerity to stand up and do so; I should be fascinated to know exactly how he will put it and, in response, I should have to tell him from many years experience of working under that system, that it was so obscure that nobody understood it. At least with block grant you have the 63 factors open in front of you. You may not like what they produce, but you can debate every single one of them. Also, I can tell the noble Lord, from the many delegations that I receive in a year, that that is one aspect of block grant which everybody says is a very big improvement. So perfect it certainly is not, but better it certainly is.
As for referenda, there are some who might think that had there been referenda, had that legislation gone through, we might not—who knows?—be having the present legislation that we are debating today. But that is as may be. I can see no case for time limiting the duration of the Bill so that it expires on 1st April 1986.
I have some technical objections to make which I shall mention in a moment. First let me deal with the substantive arguments. It has been argued that there is no need for the Act to last longer than one year; that a one-year delay would allow for a review to be undertaken and fresh legislation to be produced. It is

183
also suggested that the Bill ought to be treated as an emergency matter which ought therefore to have a short life. I cannot accept any of those arguments. The facts about the extent of overspending by the highest spenders demonstrate quite clearly that there is no possibility of bringing some of those authorities down to acceptable spending levels within the period envisaged by the amendments. Equally, if a new inquiry were to be set up today it is inconceivable that it could report in time for there to be proper consultation on its conclusions and for legislation to be pressed through Parliament before the end of 1985–86. The evidence of previous inquiries gives no grounds for optimism about the speed at which the reports of inquiries can be delivered and processed —not, that is, if it is to be a serious and meaningful inquiry.
I cannot see how the proposal for selective and general rate limitation which appeared so recently in our election manifesto can be characterised as emergency legislation, which is sometimes given a limited life, possibly with provision for an annual extension. This is not the Prevention of Terrorism Act, which has to be renewed in that way. It is a mainstream legislative commitment of the Government, and it should be treated like all other legislation and continue in force until its job is done. Even if local spending is brought back under control as a result of the Bill, there must be a case for keeping these powers on the statute book in case they should be needed, in much the same way as the equivalent Scottish powers have been on the statute book since the 1920s.
I mentioned a moment ago that there are technical objections to the amendments. They do not recognise the way in which Part I of the Bill relates to Part II, and they would introduce a contradiction into the drafting of the Bill. Nor does the drafting properly take into account the two-year cycle of rate limitation. There is no recognition that designations are made in one year in preparation for rate limits in the next. This would produce differential effects as between upper and lower tier authorities. It would be possible under the amendments to force the precepting authorities into a second year's rate limit, because they would have to declare their 1986–87 precepts before April 1986. However, rating authorities could wait until slightly after the start of the financial year before making their rates, so avoiding any attempt to set a rate limit for them.
I do not know whether the noble Baroness and the noble Lord, whose amendments these are, have considered those aspects of the matter. If I may use the term "the theology of a year's duration", we simply have to differ and disagree about this, for the reasons I have given. But there are the other problems, too, which I suspect, on reading it, the movers of these amendments may well feel they have to agree with; but that will be for them to decide.
Baroness Stedman: I am grateful to the noble Lord for his reply. I understand his problems about technical difficulties. Later in the Bill we might arrive at the same destination by other means. At this stage, therefore, with the leave of the Committee, I beg leave to withdraw the amendment.
Lord Graham of Edmonton: I take it that it is Amendment No. 2 which is being withdrawn?
Baroness Stedman: Yes.
Lord Graham of Edmonton: At this stage I am not withdrawing Amendments Nos. 6 and 7.
Amendment, by leave, withdrawn.
5.54 p.m.
Viscount Ridley Viscount Ridley moved Amendent No. 3:
Page 1, line 12, at end insert—
(" ( ) For the purpose of this Part of this Act, the Secretary of State shall not designate more than 20 authorities in any financial year.").
The noble Viscount said: The rates White Paper which preceded the Bill and which is the basis for it categorically states:
"The selective scheme is intended to apply to only a small number of local authorities".
This was amplified by the Secretary of State in another place in his speech on Second Reading, when he said:
"We envisage that between 12 and 20 of the highest spending authorities will be selected".
And, again, later:
"Under the selective scheme we are going for only between 12 and 20 councils".
Amendment No. 3 is intended to incorporate more clearly and definitely into the Bill the Government's own intentions and to prevent the selective scheme becoming, in effect, another general scheme by default.
Experience with the initial introduction of targets—another jargon word in this vocabulary—is relevant. The 1980–81 Rate Support Grant Order recorded that:
"It is intended that the power to set targets should be exercised, if at all, in such a way as to affect only a very small minority of authorities".
What actually happened was that in 1983–84 over 160 authorities suffered grant penalties for exceeding their targets. I believe that there may be even more than that number in 1984–85. It is a matter of judgment whether the targets were in the wrong place or whether all those authorities were naughty boys.
It is important to realise that the selective provisions of the Bill must be clearly and visibly limited if something of the same kind as happened to targets is not to happen to rate capping. I freely accept that the figure of 20, which is mentioned in the amendment, may be wrong. As I said at Second Reading, the seven threatened metropolitan counties might well be automatically included in that figure. I believe that it would be better to cap them rather than to abolish their local elections, but that is a matter for another Bill. Therefore, 27 might be a better figure than 20, if that would be more acceptable to the Government.
The point is that some ceiling should be set on the authority of rate capping under this part of the Bill. A list of designated authorities will be presented to Parliament. That is right. We shall come to that point in due course. However, it was pointed out at the Report stage in another place that the customary parliamentary time available for this type of matter in another place is likely to be less than two hours. Therefore, a large number of authorities which are

185
selected under this power will have no chance to have their affairs discussed in such a short period of time by the other place. I do not believe that this is the way to deal with matters of such grave importance.
In his Second Reading speech the noble Lord, Lord Thorneycroft—I apologise for quoting him for what, I hope, may be the last time—said that he regarded this Bill as a damage limitation Bill. I hope that the Committee will regard this as a damage limitation amendment which is intended to keep the Government to their own stated intention of only capping not more than 20 authorities. I beg to move Amendment No. 3.
Lord Sandford: I support my noble friend in the amendment which he has moved on our behalf. May I stress immediately that I am not doing so as president of the Association of District Councils. Various "hit lists" of various lengths have been mentioned. Not only the numbers 12 to 20 but individual local authorities have been cited, but not in a single case, I believe, has a member of the Association of District Councils been cited. We are not high spending authorities, and to a very large extent we would be exempted by the £ 10 million criterion which is to be found later in the Bill.
I am making such remarks as I am making from a parliamentary point of view. It is not right for Parliament to give powers to the Secretary of State without setting some limits to them. No assurance that he has given, either in the White Paper or in the course of the passage of this Bill through another place, that the Government have in mind only a small number— something between 12 and 20—will really do. My noble friend quoted the example of what happened with targets. There is nothing whatever in the Bill to stop the same thing happening again in this case. There is justification for this Bill in respect of a number of high spending, defiant, extravagant Left-wing authorities which have, by any criteria at all, spent far more money than was appropriate in the present circumstances. I do not want to stand in the way of a Bill which is designed to deal with them. If that is the purpose of the Government, it must be stated emphatically in the Bill. It may be that 25, 30, 35 or 40 might be the appropriate number, but there must be some set number or otherwise the powers conferred upon the Secretary of State by Parliament in this Bill are open to abuse. It is quite wrong for Parliament to give powers of that wide range without setting any limit to them.
If I may say so to my noble friend, I do not feel that it is necessary to press this matter to a Division at this stage because what we want is to have a debate and hear what the Government's intentions are about applying some limit to themselves. That would be a much more appropriate way of dealing with this matter. I am sure the Committee must agree that it is necessary to have a limit of some kind on the face of the Bill.
Lord Evans of Claughton: In supporting this amendment—with two cheers, possibly, rather than with three—it is on the basis that the amendment is, as the noble Viscount has said, a damage limitation measure. One would expect the Association of County
186
Councils and the Association of District Councils to be more enthusiastic about a limit of 20 than those of us who live in areas associated with the Association of Metropolitan Authorities, because the high-spending authorities are very largely in those areas. That is not entirely because they are painted in quite the blood-curdling way in which the noble Lord, Lord Sandford, described them just now but because they have areas of very high deprivation with which they are obliged to deal. But there are some such as he describes. There is one not a paddle across the Mersey from where I live that comes under the heading that he mentioned, except that I would categorise his remarks as being altogether too equitable in tone to describe some of the activities of the controlling Labour group on Liverpool City Council. But they are the exception and not the rule.
I should not like it to be thought that by supporting this amendment—which is similar to an amendment in my name, Amendment No. 34, which is on page 5 of the Marshalled List—we feel that this is a complete answer to the problems brought about by this legislation. We believe that this legislation approaches the matter wrongly. We went into this aspect at great length at Second Reading and I do not need to rehearse those arguments again. I support this amendment on the basis that it is a damage limitation measure and it is wrong that a Government who talk of 12 to 20 authorities might not in fact be willing to limit themselves. In other words, they are not willing to put into legislative form what Ministers say in your Lordships' House.
Bearing in mind—and I want to underline this—that the problems of the inner city areas are much greater than those normally experienced in areas covered by the Association of County Councils and the Association of District Councils, and on the basis that this amendment has been very reasonably moved by the noble Viscount and by the noble Lord, Lord Sandford, I should like to give this amendment broad support in the hope that it goes some way to limiting what one fears might become extravagant rate-capping—not by the noble Lord the Minister but by some later associate of his in the future.
Lord Bellwin: My I say again that it is our firm intention—and I state it again now, gladly—that the number of authorities under the selective part of these proposals will be limited to some 12 to 20 in number. We are concerned to curb the spending and rating of the small minority of councils who have ignored all our efforts over the past four years at influence and persuasion. The criteria for selection which we eventually choose in the light of the 1984–85 budgets will be designed to that end. I believe that it would be wrong to be categorically rigid about the number of designated authorities.
There are a number of safeguards in the Bill. To be selected an authority must be spending excessively. I am sure we will come later, in many amendments, to talk about spending excessively. I am sure we will also come to talk—to take up a point which the noble Lord, Lord Evans, has just made—about the need to spend. I look forward very much indeed to debating that aspect. But the fact is that no authority spending below GRE could be selected; we have stated that categori-

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cally. Nor can an authority spending below £10 million be selected—and that figure can be increased by order. So as my noble friend Lord Sandford said, the vast majority of authorites have no need to worry about selective rate limitation.
However, we have never been rigid in talking about 12 to 20 authorities. I understand the point that was made about targets but this is really a different scenario. The concern expressed by my noble friend Lord Ridley when he spoke about possibly a two-hour debate is not relevant to this kind of matter. The very existence of the range of from 12 to 20 authorities indicates—and this has to be said—that we cannot be precise about the number which will in the event be selected. I could not tell the Committee now with certainty that in a particular year there will not be a clear need, using criteria appropriate at that time, to select possibly a little more than 20 authorities.
Let me give an example. I am sure that my noble friends Lord Sandford and Lord Ridley would not wish the Secretary of State to be in the position of drawing lines between authorities spending, say 22.7 per cent. over GRE and those spending 22.8 per cent. over GRE simply in order to limit the total to 20 authorities. I recognise that there is real concern here. In turn I ask my noble friends to accept (although it is not the same by any means as being on the face of the Bill—and I know it, because that point has been made many times to me over the past five years) that it is not the Government's intention to go beyond this general area.
I repeat that there are—and these are far more important than anything I might say—safeguards written into the Bill. Although I will think hard about this, I am satisfied that there is really no need to make this so inflexible that one would create all kinds of problems which, if one thinks about this carefully, one can anticipate. For that reason, I hope my noble friends will not press this amendment.
Lord Beaumont of Whitley: I want to pick up one point made by the noble Lord the Minister when he spoke about it being unlikely that the proponents of this amendment would want him to draw a line between 22.7 and 22.8. I cannot speak for them, but as a supporter of this amendment I thoroughly support the notion that a line should be drawn at some point like that.
Any attempt to place a limit on the powers of the Executive—which it is the business of Parliament to do—involves drawing a line. It is possible always for the Executive to take up that line and to point out how absurd it is to draw a line at that particular point. A line has to be drawn somewhere if the powers of the Executive are to be curbed. Maybe this is the wrong place, and perhaps 20 is the wrong limit—I do not know. But I feel that a limit should be placed somewhere, and that the principle that a limit should be placed somewhere ought to be accepted.
Baroness Gardner of Parkes: Is it not a fact that under the provisions of this Bill it would be more or less self-limiting and therefore there will be no need to have a designated number?
Lord Chelwood: Right at the end of his remarks, my noble friend Lord Bellwin said that while he did not like this amendment as drafted he would think hard about it. May I ask my noble friend, how long he expects to take to think hard? Will he let us know the outcome of his thinking before the end of the Committee stage, when a later amendment is discussed, or during Report stage? I believe that ought to be made clear to all noble Lords.
Lord Bellwin: I cannot give any undertaking to my noble friend. I respect the point that he makes and why he makes it. In the course of many thousands of debates which I have had in the past few years in these circumstances (seemingly, all too often in these circumstances), when I have said that I would give a point consideration I have always stressed that that does not mean a commitment; it could not mean such if put that way. On the other hand, I think that your Lordships, on all sides, would perhaps concur with me that I have never failed to do that and to communicate with the people concerned. I am bound to say that in this matter I have no remit at all in any way to go beyond what I have said. What I said was a personal observation made in good faith and I certainly would not want it to be interpreted as more than that.
Viscount Ridley: I am grateful to those noble Lords who have supported me. I am interested in the silence opposite, but never mind that; they will have their turn later. In reply to the noble Lord, Lord Evans, I would say that it is, of course, an incomplete answer to the problem, and I do not pretend that it is the right solution. It is the "half a loaf argument, which I think has caused a good debate. We shall, I hope, come to more effective safeguards against the power of the Executive as we move through this part of the Bill. I am deeply grateful that my noble friend Lord Bellwin will think hard and I hope that he will think very hard, whatever the difference may be—
Lord Bellwin: I always think very hard.
Viscount Ridley: I am sure my noble friend always thinks very hard. May I just remind him that the GREA was, he said, a safeguard because a council would not be clobbered unless it was substantially above the GREA. As I said on Second Reading, the GREA is very movable in this context, and therefore it is not so much of a safeguard as he might have us believe. At this stage of our Committee proceedings it would be quite wrong to press the amendment, and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
6.11 p.m.
Baroness Stedman Baroness Stedman moved Amendment No. 4:
Page 1, line 12, at end insert—
("( ) The provisions of this Act shall be renewed annually by resolution of each House of Parliament").
The noble Baroness said: Amendments Nos. 4 and 5 have the same wording. Amendment No. 5 stands in the name of the noble Baroness, Lady Birk, and no doubt she will be speaking to it. I shall be brief because we are following the same line of thought as on earlier amendments. We are being asked to give a blank

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cheque to the Secretary of State to continue with these provisions indefinitely. All the associations have said that they want a time limit if the restrictions are to be imposed. It would be much better if the Secretary of State had to come to both Houses to get the provisions renewed. I think we are placing too much power in the hands of any Secretary of State. There is a need for the built-in safeguard of parliamentary scrutiny which would follow the acceptance of this amendment. I beg to move.
Lord Graham of Edmonton: May I speak to Amendment No. 5?
Amendment No. 5: Page 1, line 12, at end insert—
("( ) The provisions of this Part of this Act shall be renewed annually by resolution of each House of Parliament.").
Amendment No. 5 might appear to be the same as Amendment No. 4, but the Minister and his advisers will have noticed what we think is an important difference. Amendment No. 4 refers to the "provisions of this Act", whereas Amendment No. 5 talks about the "provisions of this Part of this Act". So we are talking in terms of the first part of the Bill and not the whole of it.
Certainly the arguments so ably put forward by the noble Baroness, Lady Stedman, are absolutely sound. In our view they are irrefutable. The case rests quite simply on the basis that in our form of government Parliament is supreme. If there are doubts, if in the history of Governments—I do not mean just this Government—in trying to get it right there is sufficient concern, and if the Government are so supremely confident that they have it right this time, they should welcome the opportunity in 12 months' time of coming back to this House and saying, "There you are, we told you. We have got it right".
On the other hand, if the reservations of, for example, the London Borough of Enfield—which has given advice to myself and to others who will no doubt wish to use the material, as I do—are considered, that borough would certainly want much more convincing than it has had from White Papers or proceedings in another place and here. The borough tells me that it is particularly concerned about,
"the limiting of local choice within criteria and priorities determined by central government … The rate capping proposals will not achieve any significant change in the burden of rates borne by industry and commerce—this could only be done by a redistribution of the incident of rates.".
No doubt when we are talking about the classification in regard to domestic rates a powerful argument, certainly from the Benches opposite, has been the impost on industry and rates. The London Borough of Enfield does not see that at all. The borough states:
"The Council believes that the rate capping powers now being sought are likely eventually to lead to direct central government control over the expenditure and rating decisions of the whole of local government.".
I support my Conservative friends at the London Borough of Enfield. There is a great deal more:
"The Council fears that this will give the Secretary of State virtually unlimited powers with local authorities not knowing what are the 'ground rules'.".
In such circumstances the supporters of the Minister are expressing doubts. The Minister has been kind
190
enough to say that he has replied to that letter. He will be aware that by one means or another I shall have a copy of that reply; no doubt he will let me have a copy. Nevertheless I can assure him from my personal contact with councillors on all sides of the council at Enfield that they are deeply unhappy at the burden they are having to carry in defence of this piece of Government legislation.
What, in fact, are we asking the Minister to do? In effect, we are asking him after a number of failures to get it right in respect of local government, particularly in finance, to come back and justify his stewardship over a Bill which undoubtedly is going to receive Royal Assent and which might appear to be popular. We are not talking about the popular myth of "who wants to pay lower rates and who wants to keep down taxes?" We are talking about the practitioners at the sharp end; that is, the councillors in the London Borough of Enfield, and in a thousand other places, who are seeing the reality.
We are not even talking in extravagant language about overspenders, waste, or injustice, and so on. We are talking about the very real problems of a technical nature which have been raised. They have been raised by eminent authorities: Mr. Hepworth, who the Minister knows very well, from his writings, and respects because he is knowledgeable and sensible, and Mr. Pauley of the Financial Times—and I get a "thumbs down" from the Minister when I mention that name. But the Minister cannot win them all when I selectively quote those authorities I have seen writing on this matter.
We are certainly arguing that the Minister would lose very little, other than perhaps a night or two's sleep in the year that he has in which to wonder whether he has it right. If he has the confidence in his own judgment that I believe he has, and if he has the confidence that I believe he has in the Bill's acceptance by the general ratepayers and the councils that, whether they like it or not, once it becomes the law it will work, and if the overwhelming response is that it will turn out right after 12 months, why does not the Minister accept this? Some words have been so readily accepted by some of the Minister's noble friends sitting behind him, and he has used a few words that have not been quite as inflexible as others. So can he not say that at some time in the future he can look at the matter again without any promises?
I am looking for an opportunity whereby we can say that we are prepared to wait until the next stage of the Bill before we press this issue. If the Minister is unable to give those assurances, whatever the noble Baroness, Lady Stedman, may feel about Amendment No. 4, we would certainly want to press Amendment No. 5 in order to test the will of the Committee and to do justice to our friends outside.
Lord Bellwin: I am glad that we are back at Enfield again. I shall certainly send the noble Lord a copy of my letter, if only to save time in the ensuing debate which we shall have.
Lord Graham of Edmonton: We will not save time.
Lord Bellwin: It will save a little time, and every little counts, believe me. Personally I am very satisfied.

191
What I would ask the noble Lord to do in return is to have a word with the leader of the council to see whether he still feels the same as he did when he wrote the letter.
Lord Graham of Edmonton: It is still the same leader.
Lord Bellwin: Yes, so far as I am aware it is still the same leader.
I do not want to go into a repetition of what I said on earlier amendments—and this is virtually the same thing—except to make one point which I think is the key one in this matter and which sounds so reasonable; namely, why not come back in a year and have another look at it? I shall not make the case of the parliamentary burden that this would impose because, although others make the point to me, frankly that should not be the first measure of it.
What really matters is this, and it is the key point: the extent of the over-spending of the authorities we are talking about is so great—and this has been so misunderstood again and again—we just do not expect that they can come back on side; if you like, that they can get all their spending in one year to the levels we expect. To do that would clearly have an impact on the services and the like beyond what would be acceptable. I am sure the noble Lord would welcome that statement from me. We do not expect them to come down, in Camden's case, for the sake of argument, from 86 above GREA in one year. The fact that it is 86 per cent. above is astonishing as a figure but that is what it is and we do not expect them in one year to come down, or to say what would be the best way. How would you then decide if they were achieving what they ought to be achieving? One year is just a non-starter; it cannot be so. It would not be fair to the authorities, let alone what the Government are proposing. I am sure that this is a point that the noble Lord, Lord Graham, must accept.
In turn I accept from Lord Graham very much the reasonable way in which he makes this case; he makes it very fairly and it is all the more powerful for that. But in turn I ask him to accept from me the validity of what I say, never mind the points my civil servants give to me about the impact on parliamentary time; I am not interested in that. I am interested in what will happen in practice. We shall not be unreasonable when looking at these things. We cannot in practice expect that these authorities can in one year be back on side, despite the argument that they should never have been where they are in the first place. Never mind that for the moment; we will come to it later, no doubt. That is really the main reason why a year by year suggestion is not appropriate.
Baroness Gaitskell: Would the Minister be kind enough to give us the names of the few authorities who are such big spenders? It is very difficult to find out the big spenders when we try.
Lord Bellwin: We shall come to this stage later when discussing the criteria and so on. I am anxious not to duplicate, but I would like to say to the noble Baroness, Lady Gaitskell, that she may have her own opinion as to what is excessive spending, what is a high
192
spender. No matter what kind of basis you may wish to apply, whether it be targets, GREAs, permutations of both or any other factors, how can you possibly justify spending 86 per cent. above the grant-related expenditure assessment, when all other authorities— and this is the key point—or the majority, in fact manage: I am talking about 80 per cent. or so of like authorities?
I say like authorities, but when we come to talk about need I welcome that today as much as any other debate that will take place on this Bill. To me it is a key part, the need to spend. I do not want someone to ask me to justify it; I shall do so at much greater length when we come to that part of the Bill, if the noble Baroness will accept that limitation and my response to her at this moment.
Baroness Gaitskell: Could the Minister tell me why I keep on getting letters from various women begging me to do something about the education spending that is going on?
Lord Bellwin: I am not sure if the letters are for the noble Baroness, Lady Gaitskell, to do something to curb it or to increase it.
Lord Somers: I find the noble Lord's remarks absolutely convincing, but for information would he tell me if he would consider an amendment which provided for a three year standing of the Bill, thereafter coming back once a year?
Lord Bellwin: I could not do that—not because it would not be moving towards the point I am making; it clearly would. In legislation of this kind the noble Lord may be much more experienced than I in these matters. I just wonder whether or not it would be practical in all ways. I have given a reason which I think is unanswerable in terms of the year. On the three years I suspect it would not be dissimilar, but I shall think about what the noble Lord said. If he could mention it again and raise it at some stage, I shall try to give him a more detailed response on the particular point of how long the time will be.
Baroness Gardner of Parkes: The discussion is getting warmer but I had to leave the Chamber because it was so cold, and most other lady Members found the same. I apologise for not being here when the noble Lord, Lord Graham, was originally discussing Enfield; I understand he mentioned me.
I must reply briefly to a couple of points he raised, because I think they give the wrong impression. When he says that Enfield is not at all concerned about the effect of the business rate there, I do not think that would be a fair statement. But I do think that the point must not be overlooked that Enfield, being an outer London borough, has had the benefit of receiving industry over recent years, industry which has been forced out of inner London by the very high rates precepts of both the GLC and the Inner London Education Authority. For that reason, Enfield has been a net beneficiary of industry moving in.
The future situation without this rate-capping Bill could well be very different, because the M.25 is changing the whole situation so far as outer London is

193
concerned. If the rates outside the Greater London Area become much cheaper in areas such as that which my noble friend Lord Broxbourne represented and which are no distance in terms of convenience and access, if they therefore become much more favourable areas in which to have your business, then certainly Enfield will be losing a large part of its business rate base which it cannot afford.
So we cannot look at this in a shortsighted way. I think Enfield is a well run council and I believe it will not be affected by this rate-capping Bill. But it is certainly, like all other authorities, having to watch its expenditure and the effect of its rates on both the domestic and the business ratepayers, or it will find very rapidly that people will move away to avoid that rate burden.
Lord Graham of Edmonton: Could I be helpful to the noble Baroness, Lady Gardner? I simply read what the town clerk had sent to me, which is what his councillors had instructed him to send. This is what I read:
"The rate capping proposals will not achieve any significant change in the burden of rates borne by industry and commerce—this could only be done by a redistribution of the incident of rates".
Not for a moment would I say the councillors of Enfield are not minded of the burden of rates on industry. What they are simply saying is that the rate-capping proposals, whatever they are designed to do, in the view of Enfield will not do anything to reduce the incidence or the size of rates.
Another point that Lady Gardner made, I think it fair to point out, is her assumption that the rate-capping Bill would not affect the London Borough of Enfield. This is what I was told:
"The Treasurer tells me that the level of the Council's excess over Government targets and GRE assessments is within the area currently being considered for possible rate capping controls".
He might have it wrong. The Minister shakes his head. Then:
"Hence the fears expressed in this letter may become all too real for Enfield in the near future. This is notwithstanding the fact that the Council over the years has sought to work within Government guidelines (irrespective of which Government) and continues to look for and make savings whenever these are realistically achievable".
These fears may be unfounded and it may be that the Minister was able to tell Alan Young—who is a personal friend of mine who served on the council at the same time as I did, and for whom I have a high regard as the leader of the council which I had the privilege and honour of leading for a period myself. All I am saying is that if it is possible for councils like Enfield, not one of the high spenders, to be caught in their view by the way in which they have understood the legislation, then those are the fears. I do not have any responsibility for representing their views here, but because of my association and because of the argument which suits my case, I am certainly very happy to present them here—and there is more to come, by the way.
Lord Pitt of Hampstead: It is my view that what the Minister has said strengthens the case for an annual review. For example, he mentioned Camden, of which I know something. The Camden council thinks that if it is to cope with the level at which it will be rate-capped it will have to cut services. I have received a
194
memorandum to that effect. A review in 12 months' time will show us to what extent the rate-capping of Camden has forced services to be cut and to what extent it has enabled a smooth reduction in the rate burden to take place. As I see it, that is a very sound reason for looking at this matter every year. There is also this. Most of the observations that I have seen suggest that the London boroughs are the ones that are likely to be capped. In all the assessments that I have seen at the head have been four or five London boroughs. That suggests to me that the grant-related expenditure assessment may be what is wrong.
The Minister will remember when we were discussing the Local Government, Planning and Land Act 1980 I asked that we should look at the criteria for the grant-related expenditure assessment. We have not done that. It seems to me that if we look at this Bill every year we shall be able to get into all that. During the course of this debate we shall probably look at the cirteria for grant-related assessment; but if in another 12 months we look at the matter again we may see to what extent we have been wrong in what we have accepted, or of course we may be able to pride ourselves on having been right.
My view is that the arguments that the Minister has put forward, far from removing the need for an annual review, have strengthened it. If there are authorities which have to be reduced from 86 per cent. above the grant-related expenditure assessment to something closer to it, the way in which it is done is of the utmost importance. We could see in the first year, and each year, how in fact it is being done and what effect it is really having. I hope that, instead of rejecting the amendment, the Committee will accept it.
Lord Bellwin: I make one brief point on the last observation of the noble Lord, Lord Pitt. The grant-related expenditure assessments take into account the various needs. I give one figure only to illustrate that. The average GREA for inner London authorities is £286.10 per head. The GREA for Camden is £360.17. That is not far short of £100 more per head. The system may be imprecise in many ways. I am the first to concede that. I always want to see an improvement, and there is opportunity for improvement. But the fact is that the GREA works in the sense that it takes into account the various needs. I shall give a lot more figures in later stages, but I do not want to detain the Committee any longer. The GREAs do in fact take into account the extra needs. When I say that Camden is 86 per cent. over GREA, it is 86 per cent. over the higher amount assessed.
Baroness Stedman: At this stage, with the leave of the Committee, I should like to withdraw my Amendment No. 4; it goes rather further than Amendment No. 5. At this stage perhaps we should prefer to test the water with Amendment No. 5. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 5:
[Printed early: col. 189.]
The noble Lord said: I formally move the amendment in order to put it to the vote. I beg to move.
6.35 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 96; Not-Contents, 119.

DIVISION NO. 2

CONTENTS

Airedale, L.

Kirkwood, L.

Ardwick, L.

Leatherland, L.

Attlee, E.

Llewelyn-Davies of Hastoe, B.

Aylestone, L.

Lloyd of Kilgerran, L.

Beaumont of Whitley, L.

Lockwood, B.

Beswick, L.

Lovell-Davis, L.

Birk B.

McCluskey, L.

Blyton, L.

McIntosh of Haringey, L.

Boston of Faversham, L.

Mayhew, L.

Bottomley, L.

Mishcon, L.

Briggs, L.

Molloy, L.

Brimelow, L.

Nicol, B.

Broadbridge, L.

Ogmore, L.

Brooks of Tremorfa, L.

Oram, L.

Bruce of Donington, L.

Parry, L.

Caradon L.

Phillips, B.

Carmichael of Kelvingrove, L.

Pitt of Hampstead, L.

Cledwyn of Penrhos L.

Ponsonby of Shulbrede, L.

Collison, L.

Prys-Davies, L.

Darling of Hillsborough, L.

Rea L.

David, B.

Rhodes, L.

Dean of Beswick, L.

Roberthall, L.

Dalacourt-Smith of Alteryn, B.

Rochester, L.

Denington, B.

Ross of Marnock, L.

Donaldson of Kingsbridge, L.

Sainsbury, L.

Donnet of Balgay, L.

Scanlon, L.

Elwyn-Jones, L.

Seear, B.

Ennals, L.

Segal, L.

Evans of Claughton, L.

Serota. B,

Ewart-Biggs, B.

Shackleton, L.

Fisher of Rednal, B.

Simon, V.

Foot, L.

Stallard, L.

Gaitskell, B.

Stedman, B.

Gallacher, L.

Stoddart of Swindon, L.

Gladwyn, L.

Stone, L,

Graham of Edmonton, L.

Strabolgi, L.

[ Teller.]

Taylor of Blackburn, L.

Grey, E

Taylor of Mansfield, L.

Hampton, L.

Tordoff, L. [Teller.]

Hatch of Lusby, L.

Underhill, L.

Heycock, L.

Wallace of Coslany, L.

Houghton of Sowerby, L.

Walston, L.

Hunt, L.

Wells-Pestell, L.

Irving of Dartford, L.

Whaddon, L.

Jacobson, L.

White, B.

Jacques, L.

Wilson of Rievaulx, L.

Jenkins of Putney, L

Winchilsea and

John-Mackie L.

Nottingham, E.

Kirkhill, L,

Winstanley, L.

NOT-CONTENTS

Allerton, L.

Brougham and Vaux, L.

Avon, E.

Broxbourne, L.

Bauer, L.

Buxton of Alsa L.

Belhaven and Stenton, L.

Caccia, L.

Bellwin, L.

Caithness, E.

Beloff, L.

Campbell of Croy, L.

Belstead, L.

Cathcart, E.

Bessborough, E.

Chelwood, L.

Birdwood, L.

Cockfield, L.

Boothby, L.

Coleraine, L.

Boyd-Carpenter, L.

Colville of Culross, V.

Brabazon of Tara, L.

Colwyn, L.

196

Cottesloe, L.

Marshall of Leeds, L.

Craigavon, V.

Massereene and Ferrard, V.

Cullen of Ashbourne, L.

Merrivale, L.

Daventry, V.

Middleton, L.

De La Warr, E.

Milne L.

Denham, L. [Teller.]

Milverton, L.

Digby, L.

Molson, L.

Drumalbyn, L.

Monk Bretton, L.

Eccles, V.

Monson, L.

Elliot of Harwood, B.

Morris, L.

Elton, L.

Mottistone, L.

Enniskillen E.

Murton of Lindisfarne, L.

Faithfull, B.

Napier and Ettrick, L.

Fender, L.

Norfolk, D.

Gardner of Parkes, B.

Nugent of Guildford, L.

Glenarthur, L.

Pender, L.

Gormanston, V.

Penrhyn, L.

Gowrie, E.

Plummer of

Grantchester, L.

St. Marylebone L.

Gray of Contin, L.

Redesdale, L.

Gridley, L.

Renton, L.

Hailsham of

Romney, E.

Saint Marylebone, L.

St. Davids, V.

Hankey, L.

Saltoun, Ly.

Henley, L.

Seebohm, L.

Hertford, M.

Sempill, Ly.

Hood, V.

Shannon, E.

Hornsby-Smith, B.

Skelmersdale, L.

Hylton-Foster, B.

Somers, L.

Kaberry of Adel, L.

Spens, L.

Kemsley, V.

Stamp, L.

Killearn, L.

Stodart of Leaston, L.

Kinloss, Ly.

Sudeley, L.

Kitchener, E.

Suffield, L.

Lane-Fox, B.

Swinfen, L.

Lauderdale, E.

Swinton, E. [Teller.]

Lindsey and Abingdon, E.

Terrington, L.

Long, V.

Thomas of Swynnerton, L.

Lonsdale, E.

Tranmire, L.

Loudoun, C.

Trefgarne L.

Lucas of Chilworth, L.

Trenchard, V.

McAlpine of West Green, L.

Trumpington, B.

Tryon, L.

McFadzean, L.

Vaux of Harrowden, L.

Mackay of Clashfern, L.

Ward of Witley, V.

Macleod of Borve, B.

Westbury, L.

Mancroft, L.

Whitelaw, V.

Margadale, L.

Wise, L.

Marley, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendments Nos. 6 and 7 not moved. ]
6.44 p.m.
Baroness Nicol Baroness Nicol moved Amendment No. 8:
Page 1, line 14, leave out ("its") and insert ("the Secretary of State shall have regard to that authority's").
The noble Baroness said: In moving Amendment No. 8, I wish at the same time to speak to Amendments Nos. 9 and 10.
Amendment No. 9: Page 1, line 14, after ("duties") insert ("under any other Acts").
Amendment No. 10: Page 1, line 15, leave out from ("year") to end of subsection (2) and insert ("and in respect of any other statutory duties which may have an impact on the level of said rate or precept and shall act reasonably.").
The purpose of these amendments is to require the Secretary of State to take account of statutory powers and duties and the extent of their effect on spending within a particular authority. In the Bill as drafted there is no obligation on the Secretary of State to do more than consult on each year's RSG. There is nothing to compel him to make adequate provision for statutory responsibilities.
In a situation where compulsory rate capping is applied, a local authority could find itself incapable of raising sufficient funds to carry out its statutory duties and consequently legally liable for its failure to do so. What would happen in the courts if ratepayers took action? A situation could arise where rate capping was used as a defence. Indeed, what recourse would a local authority have against the Secretary of State following a successful court action by a ratepayer? Exactly whose responsibility would it be? Will the Secretary of State take the responsibility? Rate capping will not just curtail general expenditure but could have far-reaching effects on statutory responsibilities, which these amendments seek to protect. I beg to move.
Lord Bellwin: It may assist if I very briefly give an outline of the purpose of Clause 1(2). It provides simply that a designated authority's powers and duties in respect of the making of a rate or issuing of a precept, such as derived from the General Rate Act 1967, are to have effect subject to the provisions of the Bill. That means that the selected authority cannot rate or precept in excess of the maximum determined by the Secretary of State, and if it does the rate or precept is invalid. The amendments seek to ensure that the Secretary of State acts in the legal sense reasonably and does not determine a maximum rate which compels an authority to default on its statutory duties.
I assure your Lordships that the Secretary of State is fully aware of his legal responsibilities. He knows that if he were to set a maximum rate limit which left an authority with no option but to default on its statutory duties his decision would be open to challenge in the courts. If further reassurance is required, your Lordships need look no further than Clauses 3, 4 and 5. Those provisions specifically enable an authority to seek a redetermination of the expenditure level proposed for it, and enable the Secretary of State to have regard to the particular circumstances of an individual authority, including its statutory duties. In applying for a redetermination, an authority could provide the Secretary of State with additional informa-tion relating to those matters. If the Secretary of State made a redetermination, one reason for that might be that he had had regard to the authority's individual circumstances.
The traditional rights are not in any way undermined by the Bill, which is designed to control the expenditure of a few excessive and high spending authorities. Within the expenditure limit—the maximum rate determined for an authority—it will still be open to that authority to settle its priorities in such a way that it complies with its statutory duties. Those authorities selected for a rate limitation will, by definition, be spending so far above what other comparable authorities spend that I find it inconceivable that any rate limit imposed on them by the Secretary of State could possibly bring them into conflict with their statutory duties. Indeed, in discussing the previous amendment you may have heard the feeling with which I made the point that one could not expect an authority spending, for argument's sake, 86 per cent. above its GRE to be down to its GRE limit within a year. You could not expect that, and nor would we. It has to be reasonable, it has to be unchallengeable, and it is.
198
I think the purpose of Clause 1 (2) is simply to ensure that the rate limits set are adhered to; it is also to ensure that the Secretary of State must, in accordance with the well established doctrine, act reasonably when he exercises the discretionary powers conferred upon him by this Bill. Thirdly, there is every safeguard for an authority that genuinely believes it cannot meet the expenditure level proposed for it. It can apply for a redetermination of that level, and my right honourable friend the Secretary of State would of course fully consider its application. I therefore hope the noble Baroness will agree with me that it is not so much a question of not accepting these amendments as that they really are not necessary in the context of the Bill.
Viscount Ridley: My noble friend says they are not necessary. I should like to give him very briefly one example to illustrate why I think they are necessary, and why I support them. It refers to the county of Cleveland, which was mentioned by my noble friend Lord Gisborough at Second Reading. Cleveland has a peculiar fire risk through the petro-chemical industry. I think it has a Class A fire risk for almost the whole county. It therefore has a special need to have a highly expensive fire brigade. They inform me (and I believe they may have informed my noble friend also) that for all the arguments which they have put forward over the years, the GREA takes no adequate account of this particular, peculiar fire risk, which is almost unique in the country. Therefore, they fear that rate capping would descend upon Cleveland, because the same arguments which have not been listened to, or at least have not been effective, in the GREA situation would not be effective under Clause 3 of this Bill. It is for that reason that I think it would do no harm if this very modest amendment could be included in the Bill.
Lord Bellwin: Clearly, I do not know the percentage of its GREA overall that the fire brigade requirement of Cleveland takes. I am not sure what percentage it is. I would have thought that if Cleveland was to be a selected authority, and I do not know if that is so or not—I have not the faintest idea at the moment and that is the truth of it—then it would be up to them to come along with a derogation and point this out to the Secretary of State. There is a vast difference, I would have thought, in deciding that this was an argument that carried weight in terms, if you like, of re-determining a new rate level and having the fire brigade assessed in terms of GREA solely for that one authority. As my noble friend knows, these calculations are made in the grants working group of the local authority associations where the cases are argued out by the associations themselves. It is often they who have to be convinced. They know very well that concessions made to one mean something less for another. That is not the same thing at all. I am not adjudicating in any way upon Cleveland's fire brigade, or the need for it or not. I feel, however, that we are not talking about the same matter.
Baroness Nicol: I do not believe that we should be diverted by one particular example into belittling this whole issue. What we are trying to do is to determine what is reasonable when the Minister makes his decision. At the moment, it is left entirely to his

199
discretion. We want a sensible formula and a sensible list of items that must be taken into account when the Minister makes his decision about whether an authority's expenditure is reasonable.
Statutory powers seem such an essential part of local government and so important to the lives of everyone within each authority that not to include them in the formula does not make sense. I fail to see why the Minister feels that this cannot go into the Bill. It seems to me entirely sensible. There are one or two other matters of like nature to which we shall come later. Surely, however, statutory powers above all must be recognised as essential. The Secretary of State should be told right from the start that these have to be considered and allowed for. I do not consider that the Minister's answer to date has been acceptable. I wonder whether he wishes to speak again. If not, I shall seek to divide the Committee. The Minister does not wish to come back?
Lord Bellwin: It is not because I do not wish to respond to the noble Baroness, but I feel that there is nothing that I can add. I believe very much that there is great power in the argument that I made. Well, I would, would I not? The fact is that I just know that the Secretary of State could not impose a duty that could clearly be shown in any court to be impossible to achieve. For that reason, I think that it is not necessary.
6.54 p.m.
On Question, Whether the said amendment (No. 8) shall be agreed to?
Their Lordships divided: Contents, 84; Not-Contents, 95.

DIVISION NO. 3

CONTENTS

Airedale, L.

Hampton, L.

Ardwick, L.

Hatch of Lusby, L.

Attlee, E.

Heycock, L.

Aylestone, L.

Houghton of Sowerby, L.

Beaumont of Whitley, L.

Irving of Dartford, L.

Beswick, L.

Jacques, L.

Birk, B.

Jenkins of Putney, L.

Blyton, L.

John-Mackie, L.

Boston of Faversham, L.

Kirkhill, L.

Bottomley, L.

Kirkwood, L.

Briggs, L.

Lloyd of Kilgerran, L.

Brimelow, L.

Lockwood, B.

Brooks of Tremorfa, L.

Lovell-Davis, L.

Bruce of Donington, L.

McCluskey, L.

Carmichael of Kelvingrove, L.

McIntosh of Haringey, L.

Chitnis, L.

Mayhew, L.

Cledwyn of Penrhos, L.

Mishcon, L.

Collison, L.

Molloy, L.

Darling of Hillsborough, L.

Nicol, B.

David, B. [Teller.]

Ogmore, L.

Dean of Beswick, L.

Oram, L.

Denington, B.

Parry, L.

Ennals, L.

Philips, B.

Evans of Claughton, L.

Pitt of Hampstead, I.

Ewart Biggs, B.

Ponsonby of Shulbrede, L.

Fisher of Rednal, B.

[Teller.]

Gainsborough, E.

Prys-Davies, L.

Gallacher, L.

Rea, L.

Gladwyn, L.

Rhodes, L.

Graham of Edmonton, L.

Ridley, V.

Grey, E.

Rochester, L.

200

Ross of Marnock, L.

Taylor of Blackburn, L.

Sainsbury, L.

Taylor of Mansfield, L.

Scanlon, L.

Tordoff, L.

Seear, B.

Underhill, L.

Serota, B.

Wallace of Coslany, L.

Shackleton, L.

Wells-Pestell, L.

Simon, V.

Whaddon, L.

Stallard, L.

White, B.

Stedman, B.

Wilson of Rievaulx, L.

Stoddart of Swindon, L.

Winchilsea and Nottingham,

Stone, L.

E.

Strabolgi, L.

Winstanley, L.

NOT-CONTENTS

Avon, E.

Lane-Fox, B.

Bauer, L.

Lindsey and Abingdon, E.

Belhaven and Stenton, L.

Long, V.

Bellwin, L.

Lonsdale, E.

Beloff, L.

Loudoun, C.

Belstead, L.

Lucas of Chilworth, L.

Boothby, L.

McAlpine of West Green, L.

Boyd-Carpenter, L.

McFadzean, L.

Brabazon of Tara, L.

Mackay of Clashfern, L.

Brougham and Vaux, L.

Macleod of Borve, B.

Buxton of Alsa, L.

Margadale, L.

Caccia, L.

Marley, L.

Caithness, E.

Massereene and Ferrard, V.

Campbell of Croy, L.

Merrivale, L.

Cathcart, E.

Middleton, L.

Chelwood, L.

Monk Bretton, L.

Cockfield, L.

Monson, L.

Coleraine, L.

Morris, L.

Colville of Culross, V.

Mottistone, L.

Colwyn, L.

Murton of Lindisfarne, L.

Cork and Orrery, E.

Napier and Ettrick, L.

Cottesloe, L.

Norfolk, D.

Darcy (de Knayth), B.

Penrhyn, L.

Davidson, V.

Redesdale, L.

De La Warr, E.

Renton, L.

Denham, L. [Teller.]

Romney, E.

Digby, L.

St. Davids, V.

Drumalbyn, L.

Saltoun, Ly.

Eccles, V.

Seebohm, L.

Eden of Winton, L.

Sempill, Ly.

Elliot of Harwood, B.

Skelmersdale, L.

Elton, L.

Stamp, L.

Enniskillen, E.

Stodart of Leaston, L.

Gardner of Parkes, B.

Sudeley, L.

Glenarthur, L.

Suffield, L.

Grantchester, L.

Swinfen, L.

Gray of Contin, L.

Swinton, E. [Teller.]

Gridley, L.

Teviot, L.

Hailsham of Saint

Tranmire, L.

Marylebone, L.

Trefgarne, L.

Hankey, L.

Trenchard, V.

Henley, L.

Trumpington, B.

Hertford, M.

Vaux of Harrowden, L.

Hood, V.

Ward of Witley, V.

Hornsby-Smith, B.

Westbury, L.

Hylton-Foster, B.

Whitelaw, V.

Kemsley, V.

Wise, L.

Kinloss, Ly.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
7.1 p.m.
[Amendments Nos. 9 and 10 not moved.]
Clause 1 agreed to.
Lord Denham: Before I move that the House do now resume I think it would be useful to say that we will not resume the Committee stage of this particular Bill before 8 o'clock. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Trade Union Bill
Brought from the Commons; read a first time, and to be printed.

Dentists Bill [H.L.]
7.3 p.m.
The Lord Chancellor: My Lords, I beg to move that the House do now resolve itself into Committee on Re-commitment on this Bill.
Moved, That the House do now resolve itself into Committee on Recommitment.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee (on Recommitment) accordingly.
[The LORD AYLESTONE in the Chair.] Clauses 1 to 54 agreed to.
Clause 55 [Commencement, transitional provisions and savings]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 1:
Page 34, line 32, leave out ("subsection (2) below,") and insert ("subsections (1A) and (2) below, the foregoing provisions of)
The noble and learned Lord said: I should like to speak to Amendments Nos. 1 and 2 together.
Amendment No. 2: Page 34, line 35, at end insert—
("(1A) The following provisions of this Act, namely—

(a) section 49, and

(b) section 54(2) and Part I of Schedule 6 so far as they repeal section 29 of the Dentists Act 1983,

shall come into force at the end of the period of one month beginning with the day on which this Act is passed.")
All these amendments have the approval of my noble and learned friend the Chairman of the Consolidation Bills Joint Committee. The two amendments to which I am now speaking are basically commencement provisions and I shall explain them very shortly. Clause 49 of the Bill enables an Order in Council to be made repealing or amending provisions of the Bill in consequence of, or in connection with, the termination of the 1927 Agreement with the Republic of Ireland with respect to the registration and control of dentists; and at present the clause is due to come into force on 1st October this year.
The purpose of these amendments is to allow Clause 49 to come into force one month after Royal Assent so that an Order in Council can, if necessary, be made under the clause before 1st October, coming into force shortly thereafter. A further effect of the first amendment is to bring ancillary provisions contained in Clauses 55 and 56 and Schedule 7 into force on Royal Assent. As I told the Committee, these two amendments have the approval of the Chairman of the Joint Committee.
On Question, amendment agreed to.
The Lord Chancellor: I beg to move Amendment No. 2.
[Printed above. ]
On Question, amendment agreed to.
Clause 55, as amended agreed to.
Clause 56 agreed to.
Schedules 1 to 6 agreed to.
Schedule 7. [Transitional provisions and savings]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 3:
Page 53, leave out lines 14 to 18 and insert—
("3.—(1) Nothing in the repeals made by this Act shall affect the continued registration in the register of any person who was duly registered in it immediately before the commencement of this Act; and where any such person was so registered under, or in pursuance of a direction under, any provision of the Dentists Act 1957 his registration shall have effect as if effected under, or in pursuance of a direction under, the corresponding provision of the Act.
(2) Without prejudice to sub-paragraph (1) above, in section 35 of this Act—

(a) subsection (3) extends to a person who was registered under section 2A of that Act when he was subject to a disqualifying decision within the meaning of section 35, and

(b) subsection (5) extends to a person whose registration was effected under the said section 2A.").

The noble and learned Lord said: This amendment also has the approval of the Chairman of the Joint Committee. It is a transitional and savings provision. The amendment replaces the existing savings provision contained in paragraph 3 of Schedule 7 to the Bill, which relates to existing registrations in the dentists' register. The paragraph is at present too narrowly drawn. Furthermore, a difficulty arises in connection with the Bill's reliance at present on the general law, in the form of Section 17(2)(b), of the Interpretation Act 1978. Sub-paragraph (1) of the new paragraph 3, which is framed as a comprehensive transitional and savings provision relating to existing registrations in the dentists' register, is designed to deal with both these difficulties.
The purpose of sub-paragraph (2) of the new paragraph 3 is to make it clear that the references in subsections (3) and (5) of Clause 35 to a person registered under Clause 15(1)(b)—qualification in another member state—are to operate in relation to a person whose registration was originally effected under the corresponding provision of the 1957 Act; namely, Section 2A. I beg to move.
Baroness Gardner of Parkes: I rise to support this amendment, not because I have any doubt about its acceptability to the Committee but because this seems to be the appropriate moment to record on behalf of the dental profession how pleased we are that this Consolidation Bill is making such rapid progress and how great a help it will be both to the General Dental Council, which at present is working under the two previous Acts and finding that a very complex and arduous job, and also to the members of the profession who will themselves be able to understand this new Act.
In supporting the amendment I must say that had not the noble and learned Lord the Lord Chancellor explained it so clearly I would not have understood the technical difference between it and the clause which it is replacing. But having listened to his explanation I am suitably impressed and I formally support the amendment.
On Question, amendment agreed to.
The Lord Chancellor The Lord Chancellor moved Amendment No. 4:
Page 54, line 9, at end insert—
("Rules of procedure
Any rules made by the Council before the commencement of this Act under section 27 of the Dentists Act 1957 and expressed

203
to come into force at or after that commencement shall have effect as if made under paragraph 2 of Schedule 3 to this Act, and sub-paragraph (4) of that paragraph shall apply to any such rules accordingly.").
The noble and learned Lord said: This provision is also transitional. As a result of the various changes made by the Dentists Act 1983 in relation to disciplinary proceedings affecting registered dentists, new rules of procedure will be required to be in force on 1st October when these changes take effect under the Bill. Under paragraph 2 of Schedule 3 to the Bill, the procedure involved in bringing such rules into operation is both complex and time-consuming, and the time available between Royal Assent and 1st October would not be sufficient for this procedure to be carried out in its entirety under the provisions of the Bill. The purpose of the transitional provision inserted by this amendment is to make clear that this procedure can be initiated under the existing law and then continued after Royal Assent under paragraph 2 of Schedule 3 to the Bill. I beg to move.
On Question, amendment agreed to.
Schedule 7, as amended, agreed to.
House resumed: Bill reported with the amendments.

Registered Homes Bill [H.L.]
The Lord Chancellor: My Lords, I understand that no amendment has been put down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of recommitment be discharged.
Moved, That the order of recommitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.

Foster Children (Scotland) Bill [H.L.]
7.12 p.m.
The Lord Advocate (Lord Mackay of Clashfern): My Lords, I beg to move that the House do now resolve itself into Committee (on Recommitment) on this Bill.
Moved, That the House do now resolve itself into Committee (on Recommitment).—(Lord Mackay of Clashfern.)
On Question, Motion agreed to.
House in Committee (on Recommitment) accordingly.
[The LORD AYLESTONE in the Chair.]
Clause 1 agreed to.
Clause 2 [Exceptions to section 1]:
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 1:
Page 1, line 21, leave out from ("establishment") to the end of paragraph (b).
The noble and learned Lord said: I beg to move Amendment No. 1, and at the same time I should like to speak to Amendment No. 3.
Amendment No. 3: Page 11, line 25, leave out ("this Act") and insert ("the Social Work (Scotland) Act 1968").
Clause 2(2)(b) derives from Section 2(3)(b) of the Children Act 1958 as amended by Schedule 8 to the Social Work (Scotland) Act 1968. Clause 21(1) of the Bill defines "residential establishment". This definition in fact derives from the definition of "residential establishment" in Section 94(1) of the 1968 Act. and is in the same terms. It is accordingly not necessary to refer expressly to the 1968 Act in Clause 2(2)(b). The amendment gives effect to this, and Amendment No. 3 is consequential.
I may perhaps say to your Lordships that this amendment and Amendment No. 3—indeed, all the other amendments that I shall move this evening—have been approved by the noble and learned Lord, Lord Brightman, as the chairman of the Joint Committee on Consolidation Bills. I beg to move.
On Question, amendment agreed to.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 2:
Page 2, line 27, leave out from ("Act") to end of subsection (4) and insert ("1984")
The noble and learned Lord said: I beg to move Amendment No. 2, and at the same time I should like to speak to Amendment No. 5.
Amendment No. 5: Page 14, line 23, at end insert—
(" Reference to Mental Health (Scotland) Act 1984
8. If at the commencment of this Act the Mental Health (Scotland) Act 1984 is not in force, then, until that Act is in force, section 2(4) shall have effect as if for the reference to "1984" there were substituted a reference to "1960".")
Clause 2(4) derives from Section 2(4) of the Children Act 1958 as amended by Schedule 4 to the Mental Health (Scotland) Act 1960. The words,
"residential home for persons suffering from mental disorder"
were defined in Section 19(2) of the 1960 Act. This section was repealed by Schedule 9 to the Social Work (Scotland) Act 1968. This repeal impliedly repealed the amendment made by the 1960 Act in Section 2(4) of the 1958 Act. It follows that the words inserted in that section by the amendment can now be omitted. The proposed amendment to Clause 2(4) of the Bill gives effect to this.
The amendment also substitutes for a reference to the 1960 Act a reference to the 1984 Act. This is a reference to the current consolidation. In the event of this Bill coming into force before the mental health consolidation, Amendment No. 5 makes an appropri-ate transitional provision. I beg to move.
Lord McCluskey: I should like to make a few comments on Amendment No. 5, which is being taken along with Amendment No. 2. I wonder whether it is really necessary to do it in this fashion. This is a consolidation Bill, and, therefore, one would hope that when it becomes a statute one can look at the statute and find all the law as it then is on the day of the enactment. But the curious provision in Schedule 1 that:
"If at the commencement of this Act the Mental Health (Scotland) Act 1984 is not in force, then,"
et cetera, means that one simply cannot tell by looking at the provision whether or not it is in force. I wonder

205
whether it is not possible so to run the two Bills together that one does not have to have this kind of provision and one just has a reference to the 1984 Act. Surely one ought to be able to arrange them in the parliamentary timetable so that one does not have the kind of "if provision that this Bill contains.
Lord Mackay of Clashfern: Unfortunately, it is not easy to be certain how the parliamentary timetable will operate. In order to be strictly accurate about it, I fear that this amendment is necessary. Indeed, there is a convention, of which the noble and learned Lord, Lord McCluskey, will be aware, that it is not normal to refer in a Bill of this kind to a Bill which has not yet had its Second Reading in the second House. But if consolidations are to operate reasonably accurately and effectively, I think it is necessary in this case to make this provision. As I have said, all of these amendments have been approved by the noble and learned Lord. Lord Brightman, as chairman of the Joint Committee, and as far as I can see it is necessary for strict accuracy to do that. As matters stand at the moment, the Mental Health (Scotland) Act 1984 is not yet in force.
On Question, amendment agreed to.
Clause 2, as amended, agreed to.
Clauses 3 to 20 agreed to.
Clause 21 [Interpretation]:
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 3:
[Printed above.]
The noble and learned Lord said: I have sought to explain this amendment already. I beg to move.
On Question, amendment agreed to.
Clause 21, as amended, agreed to.
Clause 22 agreed to.
Clause 23 [Citation etc.]:
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 4:
Page 12, line 24, leave out ("6") and insert ("8")
The noble and learned Lord said: This is a purely drafting amendment to correct a typographical error. I beg to move.
On Question, amendment agreed to.
Clause 23, as amended, agreed to.
Schedule 1 [Transitional provisions]:
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 5:
[Printed earlier.]
The noble and learned Lord said: I have already sought to explain this amendment. I beg to move.
On Question, amendment agreed to.
Schedule 1, as amended, agreed to.
Remaining schedules agreed to.
House resumed: Bill reported with the amendments.

Anatomy Bill
7.22 p.m.
Lord Rea: 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 Rea.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AYLESTONE in the Chair.]
Clauses 1 to 3 agreed to.
Clause 4 [Lawful examinations]:
Lord Winstanley Lord Winstanley moved the amendment:
Page 4, line 7, leave out from ("that") to ("relative") and insert ("the next of kin").
The noble Lord said: I regret to disturb the relative tranquillity of our proceedings during this dinner hour by tabling this solitary amendment to this Bill, but I assure your Lordships' Committee that the amendment is not particularly controversial, and, in the main, it seeks to obtain further information. I am sorry that I have not had an opportunity to discuss it previously with the noble Lord, Lord Rea.
Perhaps I may briefly explain the amendment. Certain restrictions are contained in the Bill under which the person in charge of a body may allow that body to be used for anatomical study and for dissection in universities and medical schools, as provided for under the Bill. Very properly, the Bill lays down an absolute bar that if the deceased person had at any time indicated a wish contrary to that, then of course the body could not be so used, and it would be entirely wrong that it should be so used.
However, Clause 4(3) says that the person,
"having made such reasonable inquiry as may be practicable, he has no reason to believe …
(b) that the surviving spouse or any surviving relative of the deceased objects to the body being so used".
The words,
"or any surviving relative of the deceased objects"
seem to me to be extremely wide. We all have many relatives, many of whom no doubt survive, but there is no definition whatever here of the nature of the relationship, or how close it should be. It would appear from the precise wording of the Bill as it now stands that any remote cousin in Australia, or miles away, could merely lodge an objection, saying, "I am not having this done", and then it cannot be done. I wonder whether those words were included for some special reason.
My amendment merely takes out the words,
"the surviving spouse or any surviving relative"
and substitutes the phrase, "the next of kin". Clearly, if the next of kin objects, that would be an absolute bar. I am rather puzzled as to why the Bill should have included this very wide provision that any relative, anywhere—it lays down no specification as to the degree of relationship—could lodge an objection and that that objection would be an absolute bar to the deceased's body being used for these very desirable purposes. I beg to move.
Baroness Trumpington: On behalf of the Government, I am sorry but I must oppose the amendment because I think that it is unnecessary. During the Second Reading debate the noble Lord, Lord Winstanley, asked why this Bill had not been combined with the Human Tissue Act, and I said at the time that the Government were not aware that that Act needed to be changed. This subsection uses the same words as are in the Human Tissue Act, and we feel that it is right for the same conditions to apply whether a body is being donated for anatomical examination, or a part or parts of a body are being donated for therapeutic purposes.
I am sure your Lordships' Committee would agree that the feelings of spouses and relatives in both kinds of circumstances ought to be considered. In many situations the difficulties which the noble Lord envisages will be avoided if, during their lifetime, people make clear their intentions under the provisions of the Bill; for example, by making their wishes known in a witnessed document.
Lord Rea: I strongly sympathise with amendments which attempt to simplify legislation. On the face of it, here is a three-word definition which is more succinct than the present eight words. But, in fact, the amendment would restrict the right of relatives, other than the one person who could be considered the immediate next of kin, to object to the donation. It could be that a spouse—for instance, the next of kin—might want to donate her husband's body, or his wife's body, and a brother or sister of the deceased might object. Under the present wording those objections are respected. In fact, if any relative objects, the donation is refused.
There is no shortage of bodies being donated at the moment. Only about one in three of those offered are actually accepted. If there were a shortage, I should be more inclined to accept the amendment. As it is, the arguments of the noble Baroness, Lady Trumpington, as well as those which I have advanced, incline me to oppose the amendment for the reasons which I hope are now clear to the Committee. I hope that the noble Lord, Lord Winstanley, will see fit to withdraw the amendment.
Lord Winstanley: I have not the remotest intention of impeding the further progress of this very desirable little Bill and, therefore, I assure the noble Baroness and the noble Lord that I accept what they have said. However, the overwhelming argument is the one which the noble Lord, Lord Rea, has just advanced—that here we are dealing with bodies which are being donated for anatomical dissection and for study purposes, and that in that particular area at the moment there is no shortage. Indeed, the supply somewhat greatly exceeds the demand.
The other matter to which the noble Baroness referred was that of the donation of human organs for transplantation. This is a very different situation indeed. However, as the noble Lord, Lord Rea, has said, in this particular matter supply exceeds demand and, therefore, I do not think that much is lost if this wholly unnecessary little provision is allowed to remain. It would have been tidier had it been taken out, but I am content with the explanation that has
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been given, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Remaining clauses agreed to.
House resumed: Bill reported without amendment: Report received.
Baroness Trumpington: My Lords, I beg to move that the House do now adjourn during pleasure until 8 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.30 until 8 p.m.]

Rates Bill
Committee stage resumed.
Clause 2 [Designation of authorities]:
Baroness Stedman Baroness Stedman moved Amendment No. 11:
Page 2, line 23, after ("report") insert ("or reports").
The noble Baroness said: I beg to move Amendment No. 11 and also to speak to Amendments Nos. 15 and 33 at the same time.
Amendment No. 15: Page 2, line 26, leave out ("or, as the case may be, each of the authorities").
Amendment No. 33: Page 3, line 12, leave out ("or authorities").
The first stage of the rate limitation process that we are discussing requires the designation in year one of authorities whose rates could be capped in year two, and we hope that this group of amendments will ensure that there will be a separate report to Parliament on such designation for each of the authorities that are being designated.
Fears have already been expressed in the course of this Committee stage that proper consideration of the rate-capped authorities will not be possible if they are all put together in one order. Really the process of rate limitation is a constitutional one, and if Parliament chooses to enact this Bill then it will be a case of Parliament putting its sovereignty over the elected bodies. In that case Parliament must ensure that it is parliamentary sovereignty which is replacing the local electorate. The danger with so much of rate limitation in practice is that the local electoral wishes will be supplanted by the Executive and not by parliamentary sovereignty.
It is an inevitable consequence of rate capping that Parliament cannot give due consideration to the decisions required once it has decided to exercise the power over the local councils. Therefore, Parliament should pause and think whether it really does want to replace local electoral power with the will of the Executive. That is what this group of amendments is all about; it is to explore what is happening.
It would be a reflection of the gravity of the rate limitation process if each authority being designated under the selective scheme had the right for its case to be properly considered by Parliament, but the present provisions of Clause 2 do not permit that proper

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consideration. The Government can wrap up as many authorities as they wish in a designation order and Parliament will not be given the opportunity to consider the affairs of the individual authorities, such as the reasons for the apparent overspending, and why it is that GREs do not reflect that authority's spending needs, and so on.
They do not have a chance to discuss the part that the Government grant reductions might have played (in leading to what appears to be an excessive rate increase) in the local labour market, unemployment, and the different services they have had to apply. We believe that if the principles of this group of amendments were accepted then a further development would be to give Parliament the opportunity to accept, or reject, the designation of the individual authorities. We believe that that power should rest with Parliament and that the authorities should be satisfied that they are going to have a fair deal. I beg to move.
Lord Bellwin: At present Clause 2 requires the reports laid before the other place to set out the authorities designated by the report and a statement of the principles in accordance with which the designa-tions have been made. The principles used must be common, at least, to all authorities in the same class and we have said that we would expect the principles usually to be the same for all authorities. In those circumstances it is difficult to see what could be put into separate reports which could not be as easily put into one report.
Clause 2 as drafted requires the Secretary of State to set out formally the principles he has used in exercising his statutory discretion. He should, of course, be accountable for the decisions he takes. The informa-tion given in the report will provide the basis on which he can be questioned. There are in the other place procedures which allow the Secretary of State to be held accountable for his decisions, by Parliamentary Question, by an investigation of the relevant Select Committee or by the other procedures open to Members of that place.
Separate reports would not assist in that process. They would give the false impression that what was at issue was the merit of designating each of the particu-lar authorities rather than the principles on which designation is based. The requirement in Clause 2 for selections to be made on principles applying to all authorities in the same class is a safeguard for local authorities. It is intended to prevent a Secretary of State from selecting authorities on arbitrary or inappropriate criteria.
There is no difficulty with the rate support grant settlement annual debate of the circumstances and the case of each individual authority being taken out and debated at whatever length is needed. Certainly from all that I have read in the Hansards of the other place there have been no inhibitions on the part of the representatives of those areas from making their cases for their local areas powerfully where they feel they have cause for concern. I think that the same would apply here.
However, the real reason why we would not want to accept the amendments is the one I have given; namely, that it is the principles that we should be
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dealing with in Clause 2. As long as there has to be—and I accept the noble Baroness's point on this—opportunity for authorities to make represent-ations, and as long as one is satisfied about that, then I think there is no cause for concern. I feel that as we have it now the safeguards are in place for that. I would be concerned if it were not so, but I believe that that is the position at the present.
Lord Graham of Edmonton: My noble friend Lady Birk will speak more fully on a certain point, but may I ask the Minister to help us? What concerns Members on this side of the Committee is the time that Parliament would give. The Minister points out that there is a comparable procedure with, for instance, the rate support grant orders. These encompass everything, and all boroughs, all affected authorities, are able to make representations, and negotiations take place and not merely on whether the vote shall not take place at 10 o'clock.
The order-making procedures which will flow from this legislation will encompass an, as yet, undefined number of authorities who are deeply affected. The Minister will be aware that every authority that is affected will want to explore the order very fully and deploy their arguments. Can the Minister now, or later in this debate, tell us that he would envisage that as much time as is reasonable will be given for each of the authorities to deploy their case?
I can think of at least an hour being needed for a case to be deployed on the effects or consequences of the legislation on each separate authority, whether it be 12, 14, or 15. Is the Minister saying that it would be possible, without anyone taking advantage, for timescales of that kind to be envisaged for the case to be made?
Lord Bellwin: I hear what the noble Baroness says. It is a proper point. My answer is that there has to be opportunity for authorities' view to be made known. Whether that particular route is the best or the only one, I do not know. Let us assume a situation where an authority is designated. Its first move, I would have thought, is to consider whether or not it wishes to make a derogation, whether it wishes to have its figures redetermined. I think that later we have some amendments down which touch on that, where we will debate the pluses and the minuses of that. On the assumption that the authority does want so to do, then it will have the chance when this is debated in Parliament. First, it will have the opportunity as an individual authority to come to the Secretary of State and make its views known at first hand, its thoughts and its reasons. That it will have in depth, however long it takes in each case.
Additionally, in Parliament, the proposal here is that it should be done singly as opposed to the composite way. I will think about what the noble Lord has said but I have not heard, read or thought of any reason to doubt that there will be proper opportunity for it to be said in another place what are the concerns and anxieties of that individual authority. I do not think that it will present the problem that noble Lords may fear.
Baroness Birk: I think that in this whole Bill we are dealing with territory which is comparatively new in many respects and also highly dangerous. At least, that is what many of us feel. I think that the Minister acknowledged that there will be a lot of concern on behalf of the authorities themselves. I feel that the main point about this is that the Executive will take over the functions of Parliament. We all know that this is not a practicality. No Secretary of State can sit down and read every word in every report about every individual authority. This has to be done by departmental officials, who no doubt do their best but are very busy and often with very heavily-loaded jobs. We are supporting this series of amendments because we want every check and balance that we can have when dealing with this. The Minister should keep in mind that this is very difficult territory. Whatever one's party political views are, it is still something which affects the whole of our democracy and the concern between central and local government. I am not concerned at this moment whether it is a Labour authority, a Conservative authority or a Liberal authority. I do not think that this is the point at issue. The point is that the authority should have the opportunity of explaining what it is doing. This is why packaging it up in one report seems to me to be highly dangerous.
Lord Bellwin: I can only say this. Would I share the concern of the noble Baroness if, as I said a moment ago, I felt that there would not be opportunity for an authority to make its views known and even to go beyond that, if it so desires, and make detailed representations. The noble Baroness knows very well how it all works. It is true that often it is the officials who prepare the analyses and so on, but the responsbility for reading, studying and acting upon them is very much that of Ministers. Then the opportunity is given in another plce for that to be questioned and discussed. I understand the concern. It is a very proper one. I just do not think there will be the problem that noble Lords fear.
Viscount Ridley: I put my name to this amendment. It is more important than it looks at first sight. As was mentioned very often at Second Reading, it is a question of Parliament making the decisions as to which authority is going to get caught and not, with great respect, leaving it to the civil servants or to the Minister. This is a method whereby each authority in danger of being capped has an opportunity to have its case debated in Parliament. I think it is very important. I do not think that it is the same thing as a rate support grant debate, to which my noble friend referred. That is taken late at night and deals with the level of grants which the Government propose. That is entirely within the Government's discretion. This is much more serious and, as the noble Baroness, Lady Birk, has very wisely said, is totally unknown territory.
I hope that the Government will look very carefully at this very modest amendment. Parliament, it may be said, has enough to do without debating 20 authorities in detail each year. It is up to Parliament itself whether it decides to do it. It does not have to debate them. It is the opportunity which we are seeking. I ask the Committee to realise how much, I think, all the local authority associations feel that this is an amendment of crucial importance.
Lord Graham of Edmonton: I want to press the Minister. I fully understand that the Minister believes that, given the opportunity—and shall we say there are 15 authorities designated—they would first of all quite properly, as he would hope, come and argue their case. There would be not as much time in the world, but we are talking in terms of meetings which might take hours of explanation and refutation and so on. But at the end of the day we are envisaging the possibility that each authority will not only feel that they have been aggrieved by the very nature of the action but that they have demonstrated to their ratepayers and others outside that they have done as much as they can publicly. There are matters that take place at No. 2 Marsham Street—and we respect confidence and also the ability to talk off the cuff. But if I had anything to do with any authority, I would be one of those who expect their MPs, regardless of party, to use the opportunity. There will be alliances, not political alliances but geographical alliances, which we want to argue.
What we are worried about is this. It is possible that the report could take an hour and a half, or it could be a shorter period, to discuss. If we are talking about a day of parliamentary time, that is almost open-ended. The Minister envisages that it is possible for each authority to be dealt with properly within a timescale. The affected authorities will need adequate time to vent their feelings—and they are not going to get very much; for they have had the earlier process of meeting the Minister and they know the score. I can see some possibility of reflection. That is why we are asking for separate reports so that each of them has the dignity of having its case argued separately.
I take the Minister's point. They are all, as it were, in a class of their own. They have all been designated for the same crime—their unwillingness to comply with the Minister and the law. To that extent they are all the same. But each of them, of a certainty, will have a separate case to argue. Without getting down to the nitty gritty of words on a piece of paper, is the Minister telling us that he believes that it is the desire of Parliament to provide the opportunity for each of the affected authorities to be given adequate time to argue its case? He envisages the procedures of the other place allowing adequate time for each of those individual cases to be argued fairly.
Lord Bellwin: I think the point to bear in mind here is that the principles involved are principles which are common to all the authorities. We are slightly missing that. That takes out a lot of the time. I envisage that there will be enough time for each authority to have its representatives in another place speak and say what is to be said. I do not mean this being done in the form of a two-hour debate. I do not see it like that. On the other hand, the noble Lord, Lord Graham, is far more knowledgeable than I am about the proceedings in another place. He will know some of the inhibitions of parliamentary time. I pay all the more attention to what he says about it.
When we saw the amendment, we discussed it, as always. I believe in starting from the base point of the common principles that will be involved and the fact that the authorities certainly will not be denied the opportunity really to go in depth into the nuts and

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bolts of it. I think that the amount of time that Parliament could make available should be more than sufficient for each authority to have its case referred to. The argument on time can only be as to the depth of such a debate in another place. It is a matter of the view that one has to take. Then I fall back upon my point about the common principles and the fact that details will have been gone into, anyway. For that reason I feel that there is no need for the concern that has been expressed.
8.20 p.m.
Baroness Stedman: The Minister referred to the fact that this question would all be adjudged by common principles, but those principles are not written into the Bill. We do not know what those principles will be, and indeed various Ministers have said that they will vary according to the situation at the time that a decision is taken. Will Parliament have a chance, will another place have a chance, to discuss those principles before they are put into operation? Otherwise, it will mean that the authorities will come cap in hand to the Secretary of State in Marsham Street, not knowing what are the principles, and not having any chance to argue about them with anyone else, except when the order is considered on the Floor of the House.
Lord Bellwin: When the selections are made, clearly the basis of the criteria will have to be spelt out. Of course it will be; it must be. Then an authority will know exactly on what basis it falls into those categories. 1 suspect that the majority of authorities have a good idea now, but we do not genuinely know until the final analysis of the 1984–85 figures is available. I notice that later we are due to debate the matter of the criteria and the extent to which they should be spelt out; we shall be coming to that shortly. There is no doubt; there can be no question but that when designations are made an authority will have to know why it comes within those categories, and then it will have an opportunity to question it.
Baroness Stedman: Will Parliament know what are those principles being applied to the authorities?
Lord Bellwin: Of course, this is something on which there will be no secret; it is something which everyone will have to know. That is the basis on which the selections will be made.
Baroness Fisher of Rednal: Will the noble Lord the Minister tell us how we will get to know?
Lord Bellwin: When the decisions are made about the authorities which will come within the designation list—some people call it the hit list—it will be spelt out why the authorities are so designated. There will then be plenty of opportunity for discussion, and we shall come to this in more detail in later amendments.
Lord Walston: I do not quite understand what the noble Lord is saying. It seems to me that he is saying that Parliament will be informed of these criteria in exactly the same way that everybody else will be. It will be a fact that they will be graciously told about.
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However, from what he said, there does not appear to be any opportunity for Parliament to discuss the criteria either in general or as they apply to particular areas which Members of Parliament represent or in which they have special interest. Am I right in saying that it will be simply an edict which comes down from the Government and which will be announced to Parliament, or will there be an opportunity for Parliament to discuss the criteria before a decision is taken?
Lord Bellwin: The procedure will be straight-forward, and the proposals for the basis of selection and the powers regarding the basis are contained in the Bill. That is the point. The noble Lord says that an edict will be sent down. Any time that a statute gives powers to the Secretary of State and he makes an adjudication, judgment, or whatever, one can call it an edict or whatever one wishes, but that is what it will be. If the noble Lord refers to Clause 2(1) and (6), he will see that under those subsections Parliament will know of the situation, but the extent to which it is subject to debate will I am sure be for Parliament to decide.
Lord Graham of Edmonton: We must continue to have this debate. In another response the Minister said that the principles were not yet fully clarified or codified in the Minister's mind. But the objective was quite clear. The objective is to curb the high spenders. The principles upon which that will be done have to evolve. The Minister is telling the House that what Parliament is being asked to do is to agree to an objective. The method by which the objective will be carried into effect—that is, the basis—is yet to be determined in the ministry. When it is, Parliament will not have a chance of approving it, but will be told at the same time that the hit list authorities are told that this is the reason they fall within it.
That of course is a way of proceeding, and a Minister can justify it on the grounds that many other pieces of legislation have followed in the same way. But I beg the Minister to realise that for the authorities affected this certainly could be a matter of political life and death, and it could have other connotations, too.
I take the Minister's point that what we are doing is discussing the reason for principles being spelt out in later amendments. On the other hand, the problem with all debates is that sometimes one is told later that we should have raised the matter earlier. The Committee wants to be flexible and the Minister is playing his part in that. What worries us is that if there is every intention that all designated authority representatives will have the chance fully to justify and defend their cases, what is wrong with doing that neatly by accepting the amendment, so that each has a separate report which then takes its share of an enlarged debate?
I mentioned a period of an hour. If it were Islington or Camden, I am quite certain that each of the Members of Parliament would want fully to deploy their arguments. Whether an hour is right or wrong, the Minister thinks that a good period of time will be given, and in terms of 12 authorities that could mean a 12-hour debate. The Minister says it could be a 12-hour debate on one report, with each of the 12 reports debated within it. We are saying, "Why not

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make it simple?" We are not talking about acceptance or rejection, because we know the reality of parliamentary arithmetic. If they are put to a vote, they will all be treated the same way, but it is a question of the dignity of giving each authority affected the opportunity to say, "This is our little bit of parliamentary time". But the noble Viscount, Lord Ridley, made the point that whether or not the time is given, will be up to Parliament. We are not insisting. We are saying simply that the legislation should provide for the opportunity for Parliament to allow the time and even lay down the timescale. I think the Minister could win some friends outside the Chamber as well as inside if he would accept the principle of the amendment.
Lord Bellwin: I am always willing to win some new friends; we need all the friends we can get. There is some misunderstanding here. Clause 2(1) requires a report to be laid before the House. Clause 2(6) requires that report to set out the selection principles. When that is set out the formal debating procedure that follows is, I presume, part of the normal business of another place. I am sure the usual methods will be used to query the reports. That surely is when the opportunity arises for debate of both the principles and, at the same time, the individual circumstances of the authority.
I am sorry I cannot help the Committee more than that. We are talking about a procedural matter. I understand the original point, and I take the point the noble Lord makes when he talks about the impact upon the authority concerned, though I am sure he would take it from me that it will not be a great surprise to many of the authorities concerned because the game has been talked about for long enough and they know the general area of these matters. I accept that the opportunity must always be there for discussion by Parliament and by the authorities concerned in all appropriate places where representations can be made.
Lord Sandford: If my noble friend is right—and I am sure that he must be—in indicating to the Committee how these reports will be received and dealt with in each House under Clause 2(6), then there is surely no difficulty in his accepting one or other of Amendments Nos. 28 and 29. If he will say to the Committee now that he is minded to accept one or the other —preferably No. 29—I think we shall find it easier to proceed. Amendment No. 29 only puts in statutory form what he has just indicated.
Lord Bellwin: I cannot at this stage indicate a likelihood to accept those at all. We should want to debate them in depth as we come to them.
Lord Tordoff: To pick up the point that the noble Lord, Lord Sandford, made, as the Bill stands at the moment it is only in one House of Parliament and not in both Houses unless and until those later amendments are accepted by this House. The clause refers, as the Bill stands at the moment, to the House of Commons only. This House would have no say at all.
Lord Sandford: No, but my noble friend was indicating in reply to the noble Lord, Lord Graham, that these reports would be open to discussion in each House of Parliament and that is what we expected him to say. We were glad to hear it from him. If that is so, then there is no difficulty—
Lord Bellwin: I did not say that at all. This is yet another amendment which we are due to debate as we go along. I assure your Lordships that very little has been missed. Everything is down for discussion but it has been decided—and I do not question it—that they should be individually discussed as amendments on their own. That is why we have a slight difficulty in separating one from the other. But I have no objection at all to the debates running over into each other.
Lord Stallard: I wonder whether the noble Lord would clear up a point for me. I am becoming a little confused about the way in which the discussion is going on. I understood—maybe wrongly—that the initial report would be presented to the House. Following that, there would be discussions between the Secretary of State, the local authorities, and so on, and the reports would flow from those discussions. They would be the subject for debate. I am under the impression that the initial report will not be the subject of any debate at all in either House. That is not debatable. What will be debatable is the result of the discussions. Somebody will say that there is no point in having a debate until after the discussions have taken place.
So there will be no discussion or debate on the initial report; but there will be a debate at the end of this long process of discussion during which it is possible for pressure to be exerted on local authorities to do deals because of worse things that might happen if they do not agree to this or that. It is those reports, as I understand it—and there is nothing laid down—that might be debated and we are not clear what form the debate will take; whether on a negative order or an affirmative one. I wonder whether that could be clarified. There will be no point in having a debate on the initial report; but debates might take place after discussions with the local authorities.
Lord Bellwin: As I understand it, when the report is laid before another place it will set out the principles which have been specified and the criteria on which selection will be taking place at that time. When it is so laid, there will then be an opportunity for debate. When that takes place, authorities will know whether they come within it. I do not know what the wording of the report will be, but I presume it will set out that by applying those principles certain authorities will be part of it. Whether or not the report is subject to any formal debating procedure in the Commons—which is really the point of the question of the noble Lord, Lord Stallard—is something that one needs to go into more closely. I am not in a position at this moment to give as much detail as I might like. But I certainly undertake between now and the next stage to go into that closely, to notify all your Lordships who are concerned on the point, and if necessary we can talk about it again.
Lord Underhill: May I intervene on this matter? Whereas there is provision in certain parts of the Bill for procedure to be followed—either by the affirmative procedure or by annulment—the Notes on Clauses, which are what I go by, state quite clearly:
"The report is to be laid before the House of Commons".
It is not stated that this shall be accepted by the House of Commons. There is nothing at all. One would have thought, if that was the intention, that it should not only be put in the Notes on Clauses but be written into the Bill.
Lord Bellwin: I say again that I ought to get more information for your Lordships about the details of the form in which a debate will take place. At this stage of the proceedings, there is ample time for me to do that and I undertake so to do.
Lord Sandford: That is a most helpful suggestion from my noble friend, because the Notes on Clauses are quite specific, as the noble Lord, Lord Underhill, said. If my noble friend is now prepared to consider what provision should be made to ensure that there is a proper debate in each House of Parliament when this report is laid, that is a considerable advance and I think we should be grateful to him for that.
Lord Bellwin: I thank my noble friend for his kind words, but I would not wish to mislead him or the Committee in any way at all. What I am saying is that I feel obliged to give greater clarification on this matter than I am able to give at the present time and that I gladly undertake to do. But I cannot promise that I shall be moved in any way at all beyond what the Bill says at the present time. Nevertheless, this will be open to be brought back again when I have clarified in more detail the formalities, the procedures, and so on, which I feel I ought to do.
Baroness Fisher of Rednal: I have the Notes on Clauses with me and I was trying to follow what my noble friend Lord Underhill said, in support of what my noble friend Lord Stallard said. They state quite clearly:
"The names of designated authorities, and the principles on which the designation has been made, are to be set out in a report to be laid before the House of Commons."
That is what my noble friend Lord Stallard said. The Notes continue:
"On laying the report a notice stating that the authority has been designated is to be served on each authority which has been designated. Separate reports and Orders may be made in relation to England and Wales."
So at that stage Parliament will not be discussing anything at all. Laying the report is different from what we know in parliamentary language as having a long debate upon it. But on laying the report the Secretary of State is to serve notice on an authority which has been designated. So it is only on laying the report; but, as my noble friend said, what matters is when it comes back. When a penalty has been imposed upon a local authority and it is to be executed, the local Members of Parliament can stand up and try to defend it from the death sentence. That is what it amounts to and that is not what we are accepting.
Lord Bellwin: Whether the noble Baroness is or is not accepting, the fact is that I am trying to clarify something which has been called for and I have undertaken so to do. But that will in no way affect what the Bill set out to do. I say again that most of the authorities—certainly not all—have a jolly good idea, and have long had a jolly good idea, as to whether or not they are likely to fall within the criteria. So it will be no great surprise to them when the time comes.
Lord Broxbourne: Surely the question as to whether a report laid in the other place is debated is a matter within the jurisdiction and decision of that other place. It is not a matter which we should be debating here at all.
Baroness Stedman: I still have some fears about taking away local powers at local level and usurping them by sovereignty. I would have fewer fears if it were parliamentary sovereignty and not the sovereignty of the executive. But I think that the Minister has tried to be helpful tonight and the best thing we can do is try to be co-operative as well. Perhaps we can have some talks between now and the next stage, and at this time I shall withdraw the amendment in the hope that we can get the agreement of everyone before the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.40 p.m.
Lord Evans of Claughton Lord Evans of Claughton moved Amendment No. 12:
Page 2, leave out lines 24 and 25 and insert ("before and approved by a resolution of each House of Parliament in the preceding financial year and on such report, having been approved as aforesaid the Secretary of State shall serve").
The noble Lord said: I must confess that I am slightly bemused by what precisely people mean by various statements. Your Lordships will be relieved to hear that at this stage I do not intend to do very much more than formally move this amendment, with which are associated Amendments Nos. 13, 28 and 29, which were referred to in the previous debate. I had intended to make a number of points, but having heard what the Minister had to say about this matter, may I say that on this occasion my concern is not to move a wrecking amendment. Despite what the noble Lord, Lord Broxbourne, said at Second Reading, it is a great constitutional issue if one elected authority overturns the will of another elected authority.
Many people believe that if the decisions of elected authorities can be overborne by the decisions of Parliament this should be possible only after very careful examination of those issues by both Houses of Parliament. The proposal clearly is that this should be done only by the House of Commons. Because of the record of your Lordships' House over the past few years, I should have thought that a very important safeguard would be that any such proposals should be approved and carried only after consideration by the House of Lords because of the quasi-constitutional nature of the matter and the fact that your Lordships have the opportunity to give more consideration to matters of this kind than is possible in the hurly-burly of another place. I believe that Parliament must be very careful about scrutinising every stage of what is a

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totally novel change in the relationship between two elected levels of government.
In that context and having heard what the noble Lord the Minister said in the last debate, in moving this amendment I wonder aloud what proposals the Government have in mind and why they seem to be reluctant to have them considered by both Houses of Parliament. I suspect that the Minister will say that normally decisions about rate support grant and matters of that nature are made by resolution of the House of Commons alone. However, this is a more substantial and a more constitutionally important matter. Therefore I believe that both Houses of Parliament should have a say about a decision of this nature. I beg to move.
Lord Graham of Edmonton: I rise to support the case which has been made by the noble Lord, Lord Evans of Claughton. This debate runs on from our earlier debate. The Minister sought to give reassurances on two themes: first, that adequate time would be provided, in whatever form, in another place for the case to be made; and, secondly, that the case would be capable of being made in this place. To be fair to the Minister, he resisted having words put into his mouth. He did not use precisely those words, but he must know that that is what we are after.
We have made a good case for what we are after. We are conscious of the fact that it is no good screaming after the decision has been made. Once the principles have been evolved, published, argued about and ratified, the Minister is entitled to say that the Government have a mandate and that they intend to go ahead; there is not much point therefore in coming to two Houses when one House will do, particularly when the other place has a majority of 150 over all other parties. When these matters come to be voted on it is clear that they will be voted on along party lines.
The argument relating to this amendment concerns the dignity and sovereignty of the House of Lords as part of our parliamentary procedure. When matters are argued in this place it is fair to say that few fresh arguments are produced. Most of the arguments have been debated in the other place. We rely on the other place for the substance of the arguments and we are the recipients of information and briefs which were sent a few weeks earlier to the other place. But that is not the point. Unless we want to be looked upon as a rubber stamp, we ought to assert ourselves.
I was surprised when the Minister said that he was unaware that people are worried about adequate time being made available in another place for each of the authorities which will be affected to have their case made for them. These are not procrastinating or delaying tactics. If Liverpool or Merseyside are affected, all those who are affected, regardless or party, will say to their Member of Parliament that they want him to make sure that their point of view is heard in the House of Lords—and certainly in another place.
Therefore I hope that the Minister, having moderately successfuly avoided a vote on the earlier string of amendments, will make a much stronger case as to why we ought not to press one of these amendments to a division. The integrity of the
220
Minister is beyond question. The fact that he wins a vote will not prevent him from continuing to worry about the issues. There are later stages at which we can return to this matter. But these issues are important. How much importance is attached to them will be shown if we are prepared to press the amendments to a vote. I shall join others in pressing this matter to a vote unless the Minister can be a little more forthcoming. I appreciate that he is not 100 per cent. sure of the procedure; but if he cannot give us an assurance that the House of Lords will be able to look at these matters and debate them effectively we shall want to press them to a division.
Lord Boyd-Carpenter: Before my noble friend gives what will no doubt be his usual effective reply, I should like to make one observation to your Lordships. I found it very refreshing and cheering to hear from that Dispatch Box the representative of a party which a year ago went to the people on a programme which involved the abolition of this House now urging that this House should extend its powers in this not unimportant matter. It is curious—there need be no cynical reflections—that noble Lords opposite, when it appears to suit their tactics on a particular measure, are quite prepared to throw overboard the whole apparently considered policy of their party and suggest, because it now suits them, that your Lordships' House should take steps to increase its powers. People outside might perhaps suspect a touch of cynicism. I, of course, am too simple a soul to do that.
Baroness Birk: The noble Lord is a very simple soul! He can say that again! While there are two Houses of Parliament, and while there is a House of Lords, then it must play its part in the working of our parliamentary duties and as part of our constitution. That is the situation now; that is what we are dealing with; and that is what we should concentrate on.
Lord Boyd-Carpenter: The noble Baroness cannot get away with that. To advocate at one time the abolition of your Lordships' House and then to come forward shortly afterwards and advocate that it takes steps to increase its powers is utterly inconsistent. The noble Baroness knows that as well as I do.
Baroness Birk: If the noble Lord will accept this as entirely confidential between himself and myself, I would say that I do not think the party is 100 per cent. in favour of the abolition of the House of Lords, any more than his party is 100 per cent. in favour of a great many proposals they had in their manifesto.
Lord Boyd-Carpenter: I shall always respect the noble Baroness's confidences; indeed I shall always be flattered to receive them. But I would hope that a certain amount of publicity might be given to this rather odd way of announcing a major reversal in the policy of Her Majesty's Opposition.
Lord Briggs: Could it be claimed that this particular amendment in fact represents any increase in the power of the House of Lords? I would have thought that it does not. This particular amendment raises constitutional questions about the power of

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Parliament as a whole. The Bill is really designed in various ways to change what has been the accepted relationship between local government and the powers of Parliament. If that is the basis of the Bill, it is perfectly legitimate that both Houses of Parliament should be concerned in any new procedures which follow after what is a fundamental change in the relationship between local government and national government.
Lord Boyd-Carpenter: I do not think the noble Lord has understood the amendment. The proposal of the amendment is that a power which the Bill proposes should be vested solely in the House of Commons should also be vested in this place. If the noble Lord cannot see that that will have the effect of increasing the powers of this place, then it is very difficult to explain anything to him.
Viscount Massereene and Ferrard: Surely this is not a Money Bill, and surely it would not be for the Speaker in another place to classify it as a Money Bill? Therefore, I cannot understand why my noble friend Lord Boyd-Carpenter thinks that this amendment will increase the powers of the House of Lords. It is surely within the power of the House of Lords, and perfectly correct constitutionally, for the House of Lords to take a decision on this amendment.
Lord Bellwin: First, on the point concerning the constitution, it was the noble Lord, Lord Evans, in introducing this amendment, who referred to that aspect. Before I make any further comment, I hope noble Lords opposite agree that in addition to Amendment No. 12 we are speaking to Amendments Nos. 13, 28 and 29—I was assured they were part of the grouping. As to the constitutional point, the noble Lord spoke of one elected authority overturning the decisions of another elected authority. Are we to have the whole of the Second Reading debate again? That is probably what we should need for me to answer that point, because I simply do not consider it to be a constitutional point at all.
The noble Lord, Lord Briggs, referred to the change in the central and local relationship. I say again now, as I said at Second Reading, that the change in that relationship would come about if the general scheme in Part II of the Bill was to be brought into effect. The Bill specifies that, then, there would be proper debate in both Houses. I think that probably covers the noble Lord's point. Whether or not there is a change in the relationship caused by Part I is a matter of one's point of view, and I believe that the noble Lord would know my stance on that. Certainly I do not consider that Part I of the Bill is in any way constitutional—nor Part II, though I do accept that there would be a change in relationship if the general scheme was ever to come about. But that is another matter.
We are discussing four amendments which seek to extend the degree of parliamentary involvement in the process of designating authorities for rate limitation. The amendments seek to bring the designations before both Houses of Parliament and to make the report subject to approval there. The third element in the amendments is to require that the designation report should be approved before the commencement of the
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financial year preceding the one in which the designa-tion is to take effect. I have to say that I cannot advise your Lordships to support any of the elements of the amendments.
Why do I say that? First, I do not believe that it would be right to bring a report of this sort before both Houses. The supervision of local taxation powers is a matter which the other place has long claimed within its own privileges. We accept that the orders which would be necessary under Clause 9 to introduce the general rate limitation scheme should, as I just said to the noble Lord, Lord Briggs, appropriately be brought before both Houses since they affect the relationship between central and local government, if ever that was to be put into effect. But I believe that the detailed supervision of the Secretary of State's determinations under this Bill is appropriate for the other place alone.
Secondly, there is the question of whether a report to the other place should be subject to approval. In debating this issue in the other place on Report, my right honourable friend undertook to consider whether there might not be some way of providing an opportunity for the principles underlying the designa-tions to be debated. We have now reconsidered all the issues but have concluded that it would not be right to propose an amendment to the Bill. The Bill already provides for the affirmative approval of the other place to the ultimate determinations of the Secretary of State in relation to the rate or precept maxima set under Clause 4. We believe that is right, but it does not seem to us essential to provide for similar details at the intervening stages of the process which will take place under Clause 2 and Clause 3, which deal with designa-tion and the setting of expenditure levels respectively.
This does not mean, of course—and here we are touching on the point debated in the last amendment —that we believe the Secretary of State should be immune from parliamentary scrutiny of his actions under the legislation. But parliamentary supervision is not exercised solely through the requirement to have all Executive decisions endorsed by way of subordi-nate legislation. Indeed, the normal means of supervision of the Executive is not through that route but through the other well tried and traditional procedures of Parliament. I am referring to the parliamentary Question, to the adjournment debate, to the facility which the Opposition have to bring matters before the other place, and, more recently, to the detailed scrutiny possible through the mechanism of the Select Committees. These are not negligible devices.
The presentation of the report will ensure that the Secretary of State must place in the public domain the principles upon which he has acted. There are ways to ensure that, if it is the will of the other place, these matters can be debated. If there were a danger that this could not otherwise be arranged when there was a general desire that it should be, no doubt the Government, through the usual channels, would consider sympathetically a request for assistance.
So I do not think it is right to write into the Bill a specific procedure. I would certainly not be able to support the proposition for a further affirmative order procedure, which would require a debate every year whether or not there was a desire for one in the other place. I have to tell the Committee that there would be

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real practical difficulties in providing for any parliamentary approvals procedure in the course of this year when, depending upon the timing of Royal Assent, it may be that there will be insufficient time to provide for a procedure in the summer before Parliament goes into recess.
Finally, I turn to the question of the timing of the designation report. Our intention is that the designation report should be made annually, as soon as possible after local authority budgets are received at the start of the financial year. It would not be possible to make a designation report before the start of the financial year during which the rate limitation procedures are to operate because we will not have the necessary information to do so.
The effect of the proposed amendment, therefore, would be to delay by one year the first rate limits, since a report made during the 1984–85 financial year would allow the Secretary of State to treat selected authorities as designated during the 1985–86 financial year leading to limits on the rates in respect of 1986–87. The problem of high spending in the areas about which we are most concerned is too acute to allow such a delay. The ratepayers in those areas are already clamouring for our protection. They would not, I think, be impressed by the arguments we have heard today in support of such a delay. For this and perhaps the equally important reasons I have given—the decision on what to do about the amendment will be up to noble Lords who are supporting it—I cannot accept the amendment.
9.2 p.m.
Lord Evans of Claughton: I am very disappointed with what the Minister said. He appears to have gone back on what he said on the previous debate. As far as I can ascertain the position, it is true that the amendment does have the effect of delaying matters a year. Designation will be in year one and implementation in year three instead of designation in the year one and implementation in the year two. I should have thought, as one who has had long experience in local government and with the buffeting it has received from various governments over the years, that if the expenditure of local authorities is to be controlled and reduced in some areas in the draconian way proposed it should be done efficiently, with the minimum of damage to services and after very full and detailed consideration by local authorities and by Parliament and of the way in which the priorities of the local authority which is being "capped", as it were, will have to be re-ordered.
It is a very dangerous situation as things stand at present in that teachers employed from September to August will, if the legislation goes through in this way, have to be—I do not mince words—sacked in the middle of a financial year. Surely if they have to be sacked—and no one wants anyone to be sacked—it should be at the end of an academic year. Surely the whole of local government needs to have time to redeploy its activities in an ordered way. I should have thought that the point the Minister made in defence of the present scheme is totally contrary to the whole benefit of local government, the whole way of running local government and the whole interests of people
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affected by local government services in many ways. If local authorities know that they have a year to adjust to cuts and limitations they might be more willing to accept the very painful medicine that the Government are at present imposing on them.
I am very comforted by the support I received from the noble Lord, Lord Graham of Edmonton, I was even more comforted to note that he did not mention the borough of Enfield at all on this occasion. I was going to say that if he ever mentions it again I would never vote again for anything he proposed, thereby extending the gulf between the respective Benches. I am very comforted by his support. I feel very strongly that the position outlined by the Minister in his reply is unsatisfactory. I am also comforted very much by the support of the noble Lord, Lord Briggs. I read his social history on going to bed every evening and I get a very good night's sleep. I am very comforted by having the great authority of his support and his realisation, as I think many Members on the Cross Benches and academics realise that this is a fundamental change in the relationship between one level of elected authority and another. However stupid, short-sighted, extravagant and irresponsible local electors may be to elect an extreme Left-wing or high spending authority, that is a decision the electors have made. However much we say, "Well, it is because of the macro-economic needs or the general objection by commercial, industrial and domestic ratepayers", the fact is that this vote has taken place in what we regard on these Benches as an imperfect democratic system—although noble Lords on other Benches seem to think it is the greatest thing ever invented.
Therefore, the Government are saying that one group of people, democratically elected, are to be overborne by Parliament. I do not dispute that Parliament is entitled to do that, but if Parliament is to do that then it should be done under the most close and deep safeguards. It is on this that your Lordships have a particular constitutional right. I am glad that the noble Lord, Lord Boyd-Carpenter, did not have the temerity to attack these Benches. We did emasculate the House of Lords many years ago, when the noble Lord was no doubt a young man, but we still believe that the House of Lords in its present form, or a reformed version has a very important constitutional role and many other amending functions.
We are now considering an amendment of deep importance to anyone who cares about governement, particularly local government. Therefore, I intend to test the view of the noble Lord the Chief Whip that this House often does have an overall Tory majority. Therefore, I intend to divide the House.
Lord Bellwin: Before the noble Lord sits down I should like to make one observation. The noble Lord, Lord Evans, persists in bringing in Second Reading points about the underlying theology of the whole Bill. If he persists in doing so I cannot let go by some of his observations about the overriding of local autonomy, the validity of the local mandate and the breakdown of the constitutional points. He must not be allowed to get away with that.
Lord Evans of Claughton: It is true.
Lord Bellwin: It is not true. I did not interrupt the noble Lord and I hope he will not interrupt me from a sedentary position. I shall give way if the noble Lord wishes to interrupt from a standing position.
The point is there has been a breakdown of the conventions by a small minority of authorities, conventions which for years and years have lasted and which were respected, regardless of political parties, regardless of the party in power at Westminster. The noble Lord, Lord Evans, knows that as well as anybody in this Committee.
It is only the breakdown of those conventions that has led to the present situation and I know many, many people in local government who are as resentful of that minority of authorities on all sides because of the steps they have taken which have led to all this taking place. A government cannot disregard what is happening, it cannot refuse to protect the people who are so adversely affected, it cannot allow its economic strategy to be put at risk by these people.
When we now come to decide the procedures and the supervising and the scrutiny of the various procedures, which is what this debate is about, then we have indeed to be very careful how we do it. That is why I went to some pains to spell out in greater detail than perhaps I did on the earlier amendments exactly what the situation is as we see it today. If the noble Lord feels that that is not a satisfactory conclusion then it is up to him to decide what to do. But I really must say that if in all the debates we are having on these various amendments we keep returning to this point, then we shall have more Second Reading points to make. Maybe that is not a bad thing.
Lord Sandford: I wonder if I might intervene briefly before the noble Lord, Lord Evans, does what I think he is going to do and presses this to a Division. We are debating four amendments, Nos. 12, 13, 28 and 29, and I think it might be for the convenience of the Committee if we did not have to go over the ground again when we get to Amendments 28 and 29. My noble friend a moment ago was speaking, I thought, in a helpful and constructive way in response to the debate we were having on Amendment No. 11.
Baroness Birk: I am sorry to interrupt, but I would like some guidance. I thought that we had got to the point where the noble Lord, Lord Evans of Claughton, had said that he was going to divide the House on this amendment. How much longer the debate now taking place will go on after that I do not know, but I would have thought, with great respect, that it is out of order now. He has indicated his wish and the question should have been put there.
Lord Denham: I think it is quite in order to make points before the noble Lord, Lord Evans, sits down. This is of course the Committee stage and there is very much more freedom on the Committee stage than on others. Perhaps my noble friend could be very short. I do not think I am being partisan in supporting him because I rather suspect he may be speaking against the Government on this particular issue.
Lord Sandford: I shall try to be helpful to the Committee and save time, which I am sure the Chief
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Whip will approve of. We are debating four amendments in one block, as the Minister reminded me. We have not, strictly, spoken; I have not spoken at all on one of the amendments which is in my name. The only point I wanted to make is that I am sure that, when he reads Hansard tomorrow, my noble friend will see that what he has been reading from his prepared brief in answer to the points raised by Amendments 12, 13, 28 and 29 is not consistent with what he was telling us just before that when we were dealing with Amendment 11.
Each group of amendments deals with the way in which this report is to be handled in each House of Parliament. On the former occasion he was assuring us that he supposed that as each report was laid before each House of Parliament there would be an opportunity for debate. He had given us an assurance that he would consider what more could be done to make sure that those debates were satisfactorily provided for. On those grounds, I was urging the Committee to accept that as something which he had expressed to us in good faith, and which he would of course do. That is not consistent with what he has just been saying.
Lord Bellwin: On the point of inconsistency, what I said on the previous amendment was that I would undertake, as I still intend to do, to give clarification. That was the term I used and I use it again: I shall give clarification as to the procedures as I understand them. It would then be open to your Lordships to decide what you would wish to do about it at a later stage if that was not satisfactory. What I have done in the last debate is perhaps to spell out in more detail some of that but I see no reason why I should not elaborate on it still in communicating with your Lordships later on. That I undertake still to do.
Lord Evans of Claughton: This must be the longest period for which I have been standing when I have been sitting in my career. The noble Lord should not mention theology to a Welshman; we enjoy it very much. I say with great sincerity that I do not challenge what he says about high spending authorities. For many years I was a member of a very low spending Labour authority and the convention worked. I am not disputing that. I am saying that if we are taking this draconian step because of this attitude, then we must do it with very great care and parliamentary supervision at every level. That is the reason that I seek to divide the Committee.
9.13 p.m.
On Question, Whether the said amendment (No. 12) shall be agreed to?
Their Lordships divided: Contents, 64; Not-Contents, 73.

DIVISION NO. 4

CONTENTS

Airedale, L.

Carmichael of Kelvingrove, L.

Attlee, E.

Chandos, V.

Banks, L.

Cledwyn of Penrhos, L.

Beaumont of Whitley, L.

Collison, L.

Birk, B.

David, B.

Bottomley, L.

Dean of Beswick, L.

Briggs, L.

Denington, B.

Brooks of Tremorfa, L.

Elwyn-Jones, L.

227

Ennals, L.

Nicol, B.

Evans of Claughton, L.

Ogmore, L.

Ewart-Biggs, B.

Phillips, B.

Faithfull, B.

Pitt of Hampstead, L.

Fisher of Rednal, B.

Ponsonby of Shulbrede, L.

Gladwyn, L.

Ridley, V.

Graham of Edmonton, L.

Rochester, L.

[Teller.]

Ross of Marnock, L.

Grey, E.

Sandford, L.

Hampton, L.

Seear B.

Hanworth, V.

Serota, B.

Harris of Greenwich, L.

Simon, V.

Hatch of Lusby, L.

Stallard, L.

Houghton of Sowerby, L.

Stedman, B.

Hunt, L.

Stoddart of Swindon, L.

Irving of Dartford, L.

Stone, L.

John-Mackie, L.

Taylor of Blackburn, L.

Llewelyn-Davies of Hastoe, B.

Tordoff, L. [Teller.]

Lovell-Davis, L.

Underhill, L.

McCluskey, L.

Walston, L.

McIntosh of Haringey, L.

Wedderbum of Charlton, L.

Massereene and Ferrard, V.

Whaddon, L.

Mayhew, L.

White, B.

Meston, L.

Winchilsea and

Molloy, L.

Nottingham, E.

NOT-CONTENTS

Avon, E.

Kinloss, Ly.

Bauer, L.

Lindsey and Abingdon, E.

Bellwin, L.

Long, V.

Beloff, L.

Loudoun, C.

Belstead, L.

McAlpine of

Boardman, L.

West Green, L.

Boyd-Carpenter, L.

Mackay of Clashfern, L.

Brabazon of Tara, L.

Macleod of Borve, B.

Brougham and Vaux, L.

Margadale, L.

Broxbourne, L.

Marley, L.

Bruce-Gardyne, L.

Marshall of Leeds, L.

Caithness, E.

Middleton, L.

Campbell of Croy, L.

Monk Bretton, L.

Cathcart, E.

Morris, L.

Cockfield, L.

Mottistone, L.

Coleraine, L.

Murton of Lindisfarne, L.

Cork and Orrery, E.

Napier and Ettrick, L.

Crathorne, L.

Onslow, E.

Davidson, V.

Orr-Ewing, L.

De La Warr, E.

Polwarth, L.

Denham, L. [Teller.]

Redesdale, L.

Digby, L.

Renton, L.

Drumalbyn, L.

Saltoun, Ly.

Elliot of Harwood, B.

Seebohm, L.

Elton, L.

Skelmersdale, L.

Enniskillen, E.

Stodart of Leaston, L.

Ferrier, L.

Swinton, E. [Teller.]

Gardner of Parkes, B.

Tranmire, L.

Glenarthur, L.

Trefgarne, L.

Gowrie, E.

Trenchard, V.

Grantchester, L.

Trumpington, B.

Gray of Contin, L.

Vaux of Harrowden, L.

Gridley, L.

Ward of Witley, V.

Hood, V.

Westbury, L.

Hornsby-Smith, B.

Whitelaw, V.

Hylton-Foster, B.

Wise, L.

Kemsley, V.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendments Nos. 13, 14 and 15, not moved.]
9.20 p.m.
Lord Evans of Claughton Lord Evans of Claughton moved Amendment No. 16:
Page 2, line 28, at end insert ("and such notice shall provide each of the Authorities with details of the basis upon which they have been designated.").
The noble Lord said: We put this amendment down because we take the view, as I think we have done consistently throughout the course of the discussions about rate capping, that authorities who are confronted with the decision that the rates they can levy are going to be reduced, and therefore the services they can offer are going to be affected, should have, so far as possible, objective criteria. As things stand at present, it is purely subjectively a decision of the Secretary of State. This is a simple amendment requiring that when authorities receive the notice for their designation, they should be given clear and precise details about why they have been so designated.
I do not say the noble Lord the Minister has been evasive—I would not say that for one second; I would say a lot of other things about him. But he has been reluctant to indicate during the course of the debate with the noble Baroness, Lady Gaitskell, the basis of designating authorities. I think that, however irresponsibly an authority has behaved and however obviously it has gone over the top financially, because of the novel position with which they are confronted they should be served with details, presumably in writing, of the basis upon which the designation has been made, and not just the subjective decision of the Minister. I beg to move.
Lord Graham of Edmonton: I rise to support this amendment. I think the Minister has taken fairly seriously the importance of the principles that are going to be the base upon which the designation rests, but at the end of the day what people want are the details. What we are arguing here is that any authority which finds that it is rate-capped wants not merely to be told in the abstract, which is what principles are, but in practice. We then come down to the very vexed question that clearly what they will be accused of is overspending.
I heard a noble Lord earlier say that they were spending in excess of what was appropriate in the present circumstances. That begs the question because what one noble Lord or what one councillor or what one Minister thinks is appropriate will be different from what another one thinks. Your Lordships can rest assured that the people at the sharp end, who are faced with the problems of the shortages, the pressures, the tensions and the anxieties will take a different view from that which we might take in this place experienced as we are, as to what is going to be determined.
The amendment asks not merely that the authority should be told that it is rate capped, that it is designated and that the principles that have brought it to this position are A, B and C, but also that it should be given the details. When the details are revealed, the Committee can rest assured that arguments will prevail. They are all subjective judgments. The councillors, who will broadly understand the Government's policies, will be able to say that even though they know that by spending money they will risk rate capping, they nevertheless believe that they will have to do it. They will want the opportunity to argue. They may be defiant. They may be objectionable. They may not be very nice people to

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know at that time. Nevertheless, they will want to be given as much detail as possible.
Although the principles are clear, there is need for detail. The Minister referred to the application of GREA when he pointed out earlier that the totals for some individuals in some parts of London exceeded those of others. I believe that the noble Lord mentioned Camden, where £100 per person was allowed as the GREA total. That might look fine except to the Camden people, who could argue that what was appropriate was £120 more than somewhere else. I am not saying that they are right, but they will want to be involved in an argument. For that argument to be meaningful and not frustrated, they need to have the detail.
I hope, therefore, that the Minister will say that he is prepared to tell his colleagues that it would be helpful—and it would certainly cut the ground from under our feet if he was prepared to say it—that not only the principles but also the details that help to make up the reason for the application of the principles will be provided.
Lord Bellwin: This is really a debate that has already taken place today. I hope that the amendment can be met by a firm undertaking to the Committee from the Government. We will certainly want authorities to know on what basis they have been designated. I assure the Committee that when we notify authorities that they have been designated we will include a copy of the report made by the Secretary of State and laid before the House of Commons. Subsection (6) requires that the report contains a statement of the principles on which designations are made.
The noble Lord, Lord Graham, said that these are subjective judgments. But the principles are not subjective at all. There can be nothing arbitrary in these decisions. The noble Lord said that authorities will want the opportunity to argue. Absolutely so; that is exactly what they will have. There will be every
230
opportunity if they so desire. I say again that no authority at the moment is under any illusion about what is happening. I have mentioned one authority. I could mention many more. If we wanted to start right now debating this whole matter of the need to spend, which is a key point, although I suspect that we shall come to it soon, we can do it now. However, I happen to believe that we should keep our overall debate in some sort of procedural order. I do not believe that noble Lords will object to that approach. I prefer, therefore, to hold back.
Of course, an authority must and will have the opportunity to come along and to debate, to argue and to apply for derogations and to apply for a redetermination. If it makes its case, it will get it. We have stated all the time that we are not in the business of being unreasonable and of expecting authorities to move from a position such as I mentioned in Camden, with 86 per cent., down to nothing in one year. It could not be done in one year. If we want to talk about opportunities that are available, we have to talk about many more matters than have been discussed hitherto. Authorities will know that if they come along they have to be prepared to discuss all aspects of what they are doing as well as all aspects on which they are spending.
I cannot say much more. I do not believe that we need build into the legislation what is requested in the amendment. It would be unnecessary padding. The important point is that the Secretary of State should be required to state the basis for designation. This is met by the provisions in subsection (6). The amendment seeks something on which I am happy to give a firm undertaking on the practice that we shall adopt. With that, I hope that the amendment might be withdrawn.
Lord Evans of Claughton: After what the Minister has said, I am very willing to withdraw the amendment, with your Lordships' consent.
Amendment, by leave, withdrawn.
9.30 p.m.
The Chairman of Committees (Lord Aberdare): I have to point out that if Amendment No. 17 is agreed to I cannot call Amendments Nos. 19 nor 20.
Baroness Fisher of Rednal Baroness Fisher of Rednal moved Amendment No. 17:
Page 2, line 31, leave out from ("unless") to ("its") in line 32.
The noble Baroness said: In moving this amendment we are trying to make quite sure that the Secretary of State takes an objective, and not a subjective, decision. The words we propose to delete from the clause are:
"unless it appears to him from the best information available".
We are concerned about how he will use that informa-tion, whether he will take due regard of it, or, if he is not given sufficient information, whether he will seek it to make quite sure that his decision is objective. If the local authority is not asked for the information, will he prompt it so that his decision becomes objective? We feel that as printed the clause is very loosely drafted and the weight that can be given to it is necessarily a matter of judgment.
This is all about the selection of the authorities. The selection is to be controlled by reference to a figure which reflects a judgment of the Secretary of State. We feel that is not clear. The uncertainty arises whether or not we accept that the Secretary of State is going to be objective. We have heard from the noble Lord that the people who will be included in this group already know they will be designated. Without any criteria, without any discussion, the Minister has said they know quite well now that they are included in that grouping. Therefore the Secretary of State has already made a subjective ruling without going into the criteria at all. The Minister stated quite clearly this afternoon that those who will be designated already know about it. The Minister laughs, but I shall check up in Hansard; I feel sure he said that.
We feel that nothing would be lost by leaving this amendment. It is important for the Government to understand that local authorities might feel they are not getting a fair deal from the Government and might decide to take action in the courts. Obviously if a judicial challenge is made, the court will have to interpret the words:
"it appears to him from the best information available".
The court will therefore be deciding in a judicial capacity whether or not the Secretary of State acted on the best possible information.
The Minister has told us about the formula that goes to draw up the GREA. We are also aware that it is built upon 65 different items and a variety of statistical techniques. The noble Lord said how simple it all was. But with all due respect to him, to be quite truthful, I find it mind-bending in its complexity. It is described as an objective measure of spending need. The weight given to the statistics involves, as I have said, subjective judgments by the Secretary of State. We on these Benches fear that that is a dangerous power to be given to the Secretary of State because there is no guarantee that it will not be used in an arbitrary way.
The problem of local government finance is not about 20 authorities which each have a view of their area's need that is different from that taken by Whitehall; it is much more important than that. The whole issue of local government should be taken much more seriously than trying to penalise just 20 local authorities. I beg to move.
Lord Bellwin: I do not need any reminding about the seriousness of the financial matters pertaining to local authorities. I certainly did not say how simple is the block grant procedure or the GRE basis of assessment. I said that the multiple regression analysis formula, which preceded this, was so obscure as to be virtually totally incomprehensible to most people in the business; whereas GREs are at least something which can be laid out and their basis can be questioned in a way which was never possible previously. All the practitioners in local government who come to see me—and there are very many—all concede that that is so. However, that is not the point that we are discussing.
These amendments probe the provision in Clause 2(2) that the Secretary of State should not make designations unless,
"it appears to him from the best information available"
that certain conditions are satisfied.
It may be helpful to your Lordships if I explain why the clause is drafted as it is. We expect to make selections primarily on the latest information about a local authority's level of expenditure. There is a practical problem. The final statements about the actual spending of all authorities do not become available for at least a year after the end of the financial year. The noble Baroness, Lady Fisher, knows that that is so. The actual outturn compared with the probable, is always something that one waits to find out each year.
We now have a complete set of returns in respect of 1981–82 and an incomplete set of the returns for 1982–83. In a fast changing world, that is quite elderly information to be using to make selections for rate limitation in 1984–85. It could be quite misleading as to the current position of individual authorities. We prefer to make use of the latest information about authorities' intentions. That is usually the information in their budget items to the department.
But the budget is only a statement of intention. We cannot know from the budget whether any authority will actually exceed its GRE for the year or £10 million. We certainly could not prove that outturn expenditure would be at any particular level. The Secretary of State thus has to decide whether it "appears to him" that the expenditure is "likely" to attain a particular level. That is the significance of those terms. Taken out of context they can have other implications and meanings. But taken in context that is why those words are used here.
The next point is that the Secretary of State must have regard to the best information available. As I explained, that will normally be its budget return to the department, but it need not necessarily be so. I

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should not want an authority to be able to frustrate the purpose of the Bill by simply refusing to submit a budget or by sending a clearly false return. In the absence of information or in the event of serious doubt about the validity of information, the Secretary of State should need to be able to have regard to other sources of information such as the public committee papers of the council. This expression is of course well precedented. Section 66 of the Local Government, Planning and Land Act 1980 bases the calculation of block grant on "the best information available" to the Secretary of State.
So there is nothing sinister in this at all. We are making a practical and sensible point. The noble Baroness herself with her long experience in a major authority—and I make that point purposely—knows that this is the way in practice in which it works. When I was in my other incarnation we often wondered what the actual outcome at the end of the day would be. We were always anxious to know, and it was many months until we did; but until we did we were working on best estimates. That is why we are taking the line that we are taking in this Bill.
Baroness Fisher of Rednal: I thank the noble Lord for that reply and I accept what he says about the Government and their best estimates. But their best estimates were wildly out when they brought forward the housing benefits scheme. They were wildly out—many millions of pounds out. It is that which causes us great concern.
When local authorities were asked to take on the burden of the housing benefits scheme, Parliament was told that it would cost only £20 million in administration. Local authorities have already asked for more than that amount from the Treasury. When estimates go wildly wrong it reflects upon the local authority. Housing benefits' estimates have been many millions of pounds out. I shall not go into all the figures that I have regarding the estimates on housing benefits, but all local authorities have had the greatest difficulty with housing benefits. The administration costs, which the Government said would be practically negligible, have placed quite a burden upon the local authorities which are putting those benefits into operation—that is, the very large local authorities where 50 per cent. of the people who are living in council properties are receiving housing benefits. It is on those grounds that we are concerned. I accept what the Minister has said. I have listened to what he has said and at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Fisher of Rednal Baroness Fisher of Rednal had given notice of her intention to move Amendment No. 18:
Page 2, line 31, after ("unless") insert ("its rate levy or precept exceeds by more than 10 per cent. the rate levy or precept for the preceding financial year and").
The noble Baroness said: This amendment is to remove the criterion:
"excessive having regard to general economic conditions".
We believe that the word "excessive" needs to be defined, and furthermore that the present concept of:
"excessive having regard to general economic conditions".
is a controversial theory.
Lord Broxbourne: The noble Baroness is speaking to the wrong amendment.
Baroness Fisher of Rednal: I am in a quandary because noble Lords have said that I am speaking to the wrong amendment. Does the noble Lord the Minister think that I am speaking to the wrong amendment?
Lord Bellwin: If it would help the noble Baroness, in an attempt to be helpful only I would gladly reply to the debate which she would have initiated.
Noble Lords: "Not moved"!
Baroness Fisher of Rednal: I shall not move the amendment.
[Amendment No. 18 not moved.]
[Amendment No. 19 not moved.]
Lord Evans of Claughton Lord Evans of Claughton moved Amendment No. 20:
Page 2, line 31, leave out ("the best information available to him") and insert ("a comprehensive assessment of the expenditure history of the authority made in the light of the need to provide services by reference to economic and social conditions in the area")
The noble Lord said: This may conceivably be the amendment about which we nearly had a discussion a couple of seconds ago! This amendment covers the same areas as the other amendments which we have been discussing. In order to be consistent with what I have said to your Lordships' Committee, I believe that the nature of the problems and the expenditure that is needed to deal with the deprived in the inner city areas are very different criteria from those that perhaps affect more rural districts and areas which are better provided for financially and generally in terms of services.
We know that the welfare services, education, and a vast number of other matters are less well provided for in some parts of our inner city areas. I am sure that the Minister will argue that the use of the words "the best information available to him" will cover this, but we feel that there should be a more precise basis for guidance. That is why we suggest that it should be based on:
"a comprehensive assessment of the expenditure history of the authority made in the light of the need to provide services by reference to economic and social conditions in the area".
If one can show a pattern where a local authority, of whatever political complexion, has had to confront over many years a serious level of social deprivation, then the Minister must be compelled to show that he has considered those special needs and special problems in coming to his decision. The words "the best information available to him" are too broadly based, and do not tie down sufficiently the Secretary of State in those areas of the kind that I have been trying

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briefly to describe. The purpose of the amendment is that if an area is to be rate capped the authority should be satisfied that all the problems of that authority have been taken into consideration in reaching the decision about designating it as an area to be capped. I beg to move.
9.47 p.m.
Lord Bellwin: I find this amendment rather partial in what it wants the Secretary of State to have to regard. There is no suggestion that he might also look at spending on different services relative to those of comparable authorities. Why, for example, on the 1983–84 figures does Sheffield spend £10·30 per head on refuse collection when Doncaster can do it for £8·50 and Birmingham for £7 per head? These are important questions and they arise through this amendment.
If the noble Lord is saying that one has to measure and assess need—I remember that I said earlier that I should want to come to this point—it raises a whole host of questions. In assessing need the first thing one has to do is to look and see what it actually cost the authority compared to what it cost other authorities of like kind. For example, I said earlier that Camden spends £396 per head on its services, while Wandsworth spends £202 per head.
One could spend a long time listing such comparisons, and to have proper explanations we should have to delve into the budgets and question detailed spending in depth. We should have to question how reasonable it is to include, for example, need. I give some instances now. How much need is there for some of these authorities, as they do, to employ political advisers, and to each committee chairman research assistants, and some of the other people they bring in? These are the high spending authorities with the highest deprivation as proved by their GREs, and yet they spend money in ways like this.
In the Second Reading debate I referred to Hackney. Why do they have to take on nearly a thousand more people in the last 21 months? What do they all do? I mentioned the 40 extra people in the personnel department. If we are saying that the Secretary of State should have to have regard to all that they need and their deprivation, I do not quarrel with that at all. All I say is that an authority so coming forward and making its representation must expect to answer that kind of question. I know that the noble Lord, Lord Evans, would not seek to justify some of the things that I have just mentioned, and many more that I could if the hour was not as late as it is.
The thrust of the amendments is that in deciding whether an authority's expenditure is excessive we should take account of their spending needs. I am saying that there is absolutely no question of that. At a time when an application for derogation or redetermination is called for, that is in order and that is what will be done. As I say, I have a great deal of material on this subject because I happen to feel that this is one of the great keys to this whole philosophical argument. Unless pressed, I will not go into it now in view of the hour. But, if pressed, I would want to spend a lot of time on listing a lot of things and I wonder how
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many people in this Committee and in your Lordships' House would be very happy to defend spending against the kind of deprivation that they can show in some of the authorities concerned.
Lord Underhill: I wish to support the amendment put forward by the noble Lord, Lord Evans, despite what the Minister has said. The Minister said in dealing with the previous amendment that there will be every opportunity for the local authority concerned to argue. But all that we are going to have is the best information available to the Minister. Nothing of what the Minister has said in his recent remarks is laid down. It is what he believes the Minister will give on the best information available to him; whereas the amendment which Lord Evans proposed definitely puts forward some actual points which the Minister must take into consideration.
When one looks at these, one sees that it is not what the local authority is going to tell him; it is what the Secretary of State will have as a comprehensive assessment of the expenditure history. The Secretary of State will compile that information. Surely, it must be considered in the light of the needs of that area. As we have debated on other matters, that is what people vote for at the local election—what are the needs of our area? What do we want done? Are we doing it in the best possible way? That is the sort of information on which the criteria should be assessed. The whole point of this information is whether or not the authority satisfies the criteria. It is not taking away from the Secretary of State the power he wants; it is laying down quite clearly the points which he must take into consideration and should be included in his information.
Lord Broxbourne: With respect, I must say that the position as put by noble Lords opposite and by the noble Lord, Lord Evans of Claughton, is wrong. He has fallen into the trap which all drafters of statutes and statutory instruments seek to avoid; that is to say, to specify too precisely. There is, as he will know, a legal maxim of construction: expressio unius est exclusio alterius. I see his nod of assent which confirms me in my view of his omniscience on this and other subjects. By expressing a particular criterion, as he does in this amendment, he thereby excludes all those important economic and financial con-siderations to which my noble friend the Minister has rightly averted. The clause as drafted is perfectly clear. It is general but it is none the worse for that. It enables all relevant matters to be taken into consideration. I hope that that being so, the noble Lord will accept the position and not press this amendment.
Lord Graham of Edmonton: I think we are arguing about whether the Minister should be satisfied or whether the Minister should be satisfied. The wording in the Bill is:
"The Secretary of State shall not in a report laid under subsection (1) in any financial year designate an authority unless it appears to him from the best information available to him …".
In other words, the Minister has to satisfy himself that the action he wants to take is in accordance with the best information available to him—which may not be the best information. He then decides to designate.

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The amendment says, "Prove it!" That is what the amendment says. I do not think I am talking to the wrong amendment: this amendment is the one that we are talking to. Whatever the Latin tag was I say, "Touché".
The Minister read out, quite fairly, great disparities between authorities. Although he said the hour was late, as far as we are concerned the night is young. If the Minister feels that he could help the debate by giving us information that we may not be privy to (that is always possible) as to some of the extravagances and excesses which he and his colleagues feel merit this kind of treatment, by all means let him read that into the record. It may be that the most powerful case he can make is to point out to one authority that the reason it is being designated is the position of a comparable authority. One is on dangerous ground in comparing what appears to be like with like based upon geography, social mix, industrial mix or whatever it might be, but that could help to prove to the authority that is being rate capped that it is being fairly treated.
We are saying that the Minister ought to have to prove it. The Minister is well seized of the crucial importance of these actions to the various councils. The Minister has already decided in a number of areas whether the ratepayers, who apparently are under stress, will have the opportunity of passing their opinion. They are determined during the current Session to stop this other opportunity of voting. All right, the point was made by the noble Lord, Lord Evans of Claughton, in an earlier debate. Whether one believes in the political complexion of the council or not that is the will of the people. We might have an argument now whether the people were right or wrong on 9th June last year, but they took a decision. Whether we like it or not, that is the mandate.
We are asking the Government to take a little more time and care. They are determined to tackle what they consider to be a major problem. We are saying that, even if it means more work and even if at the end of the day the authority says, "You have not proved it to our satisfaction", on the face of the Bill the words should be written that the Minister has to go through the process of proving it. If the Minister has the ammunition that he tells us that he has, he should make the case at least to his satisfaction if not to that of the authorities.
Baroness Gardner of Parkes: I am puzzled by the comments of the noble Lord, Lord Graham of Edmonton. For example, he said that the Minister might not have the best information available to him on which to make a decision. Surely it is up to the authority to see that the Minister does have the best information available. I find it incredible that there should be the suggestion that information would be kept from him if it was in the authority's interests to prove its case. I cannot go along with the amendment at all.
We must be very careful not to be led into the trap about the economic and social conditions because in the inner cities, which I know well and have worked in all these years, the social deprivations have fed upon themselves. As time has gone by, there has been a great
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polarisation between the deprived and the very rich. All the middle class people have moved out because they cannot afford to pay the rates. In the city of Westminster we have a very small number of middle class people remaining, people who have owned their homes for a long time and perhaps can afford to remain there. But there is a great proliferation of people at the lower end of the scale, the socially deprived, whose lot is not improved because the rates keep going up and up and the general fund cannot give the help needed.
We are finding a great influx of foreigners, extremely wealthy people, who are able to pay the rates no matter how high they are, and it is not in the interests of the community to perpetuate the present rating system. It is affecting the middle class people by forcing them out because they are the ones having to pay the rates. On those two points I could not support the amendment.
10 p.m.
Lord Evans of Claughton: I was aware that I was unduly restricting the basis of assessment, as the noble Lord, Lord Broxbourne, rightly pointed out. So far as the Latin quotation is concerned, I shall paraphrase something by Sergeant Sullivan, "We talk of nothing else important". But the fact of the matter is that the only way I could see of trying to extract from the Government an assurance that a comprehensive assessment of the expenditure, the history, the economic problems and the social needs was taken into account, was to move an amendment of this nature. If I get an assurance of that kind from the Minister, I shall be reasonably, though not completely, happy with the outcome.
I agree with the noble Lord the Minister, as he suspected, that I have no time at all for authorities, of whatever nature, which do not find the cheapest and the most efficient service. It is quite extraordinary, as the Minister said, how some authorities, which are continually complaining about the Government's interference, are so reluctant to use the services provided by local government itself to find cheaper and better means. We had a few examples of this in the Second Reading debate.
Of course, it does not always work. I criticised the noble Lord, Lord Graham, for mentioning his local authority at Enfield. I shall mention mine, Wirral Borough Council, which never gives me any briefing at all on anything, and which, no doubt in accordance with the best principles of private enterprise, has given out the refuse collection and the street cleaning to private firms. The result is that we have not had our bins cleared for four weeks and the streets have not been swept for the same length of time.
A noble Lord: Rubbish!
Lord Evans of Claughton: It is rubbish. But we believe that in order to get such contracts some of the private enterprise firms tender at such a low price that they cannot really meet their obligations. There is such a keen level of tendering, and there is that danger which local authorities have to watch.

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To deal very briefly with another point which the Minister made—and I tried to move my amendment briefly, because of the lateness of the hour—I must say that I find reprehensible the use of ratepayers' money to appoint political advisers to council leaders, but it will happen in all political parties. Many of us thought in the past few years that it was politically reprehensible that Her Majesty's Ministers from time to time appointed political advisers from outside the Civil Service, but over the last 10 years that practice seems to have become accepted. The point is that if council chairmen are to have political advisers, it should be done openly and the ratepayers should be made aware that they are being appointed purely and simply to give political advice.
But what disturbs me continuously, as has been said a number of times, is that, in spite of the very best evidence of the hopeless way in which some authorities are conducting their affairs, the electorate still vote for them. I am sure the Minister will say that it is not because they support what they are doing, but because they are making a comment on the national scene.
It will hardly come as a surprise to your Lordships to hear that we think there is something to be said for an experiment in proportional representation. Many noble Lords on the Minister's side take the same view—that local authorities might be more responsive to the needs of their electors if electors voted by a different electoral system. I shall not go further into that this evening, because at this time we do not want a long debate on what I regard as a very important subject.
But at this stage, and on the assumption, as well as in the hope and the belief that the noble Lord the Minister has been listening to what I and other noble Lords have said, and provided that the special needs of inner urban and deprived areas will be taken into account in coming to a determination on the best information available, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chairman of Committees: I have to point out that if Amendment No. 21 is agreed to, I cannot call Amendment No. 22.
Baroness Fisher of Rednal Baroness Fisher of Rednal moved Amendment No. 21:
Page 2, line 33, leave out ("or £10 million, whichever is the greater")
The noble Baroness said: The purpose of this amendment is to delete the £10 million expenditure limit below which authorities will not be liable for selective rate limitation. According to the logic of the Government, I believe that this amendment improves the Bill. The rates White Paper states that the selective rate limitation policy has two main thrusts: first, to constrain the total of local spending; and, secondly, to protect ratepayers in particular areas. One would have thought that ratepayers in all areas need to be protected; it is strange that the Government want to protect certain ratepayers. However, each of these objectives is highly contentious. Nevertheless, the £10 million exemption that is contained in the Bill
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jeopardises both of those objectives which the Government have published in their White Paper.
First, in terms of total public expenditure there is no difference between 10 exempt authorities overspending by £1 million and one authority overspending by £10 million. There is no logic in it. I do not accept that only large local authorities indulge in what can be described as "loony" actions. It is possible that "loony" actions are committed by smaller local authorities. However, their local press coverage does not hit the headlines as does the press coverage of the large local authorities. Their press coverage is much greater than that to be found in a local weekly "rag".
Furthermore, as has been said on many occasions during our debate today, the level of rate-borne expenditure is a function of population, of the needs of the area and of the services which the authority provides—in other words, what the electors have decided they want their elected representatives to put into operation. If, however, we look closely at the £10 million exemption, we see that it affects only non-metropolitan district councils. Some 275 of the 333 district councils would be exempt under the £10 million exemption. One could argue that that is a party political ploy. I do not criticise the power that these local authorities have over their rate-borne expenditure account. It includes refuse collection, environmental health, recreation, markets and cemeteries; but they do not face the big expenditure which has to be borne by the major local authorities. Their expenditure on education, the personal social services, the police, the fire authority or highways is not great.
The major authorities obviously get into greater difficulties as greater burdens are placed upon them because of the Government asking them to take over various functions. Because of the siege in St. James's Square, a heavy cost will be involved for the police authority, and it will have to be paid for by somebody. Whether or not the Government will take that responsibility away from the metropolitan authorities will have to be considered. However, the police authorities, the fire authorities, and so on, are the responsibility of the large local authorities which are being penalised for the sake of those—again this is a political judgment—who are involved in the Government's policy. It seems a peculiar sense of priorities in the provision of public services that we shall be able to spend unlimited amounts on refuse collection but we tightly constrain the amount of money that can be spent on education. With rate capping, one is concerned at the way in which education will suffer tremendously as the biggest spender in large local authorities.
We ask the question: why £10 million? Why was it not £15 million, or £20 million? Is this just a crude attempt by the Government to neutralise political opposition from the large number of small councils, which are in the main Conservative controlled? Or is it that the Governments' bureaucracy does not want to interfere in the large number of authorities affected if they lessened the amount? This is an important amendment, and I beg to move.
Viscount Ridley: As Amendment No. 22, which is in my name, is similar to Amendment No. 21, it might be helpful if I speak to my amendment now, and I promise to be very brief.
Amendment No. 22: Page 2, line 34, leave out ("£10 million") and insert ("£1 million")
I really put down Amendment No. 22 to annoy the Asociation of District Councils (and my noble friend Lord Sandford), which association is largely escaping the effects of this Bill. As the noble Baroness said, 275 out of 330 district councils will be thinking that they are totally ignored by the whole Bill and can spend as much money as they like, up to £10 million. That itself could create a serious problem. Quite a number of district councils will say, "We can go to £10 million. Even though we had aimed to spend only £9 million, if we can go to £10 million without anything awful happening why don't we have a go?" This point should be looked at, because it may cost quite a lot of money which we may not have saved by other means.
This is a probing amendment. I want to ask the Government what made them think that a figure of £10 million was so magic. Was it just a round number that looked nice on paper, or was there a logical reason why the figure of £10 million was chosen and not some other figure that might have been more effective in catching all local authorities?
Lord Bellwin: If I may respond first to my noble friend Lord Ridley's latter point, Amendment No. 22 would remove the benefit of this restriction from all authorities spending more than £1 million. Effectively this is the same thing, because from the latest budget information for 1984–85 there are no authorities which will spend less than £ 1 million.
Viscount Ridley: Parish councils?
Lord Bellwin: Well, authorities. If, as the noble Baroness, Lady Fisher, said, the £10 million cut-off was employed to secure the support of the ADC, it has been singularly unsuccessful! The opposition from that quarter has been as vociferous as that from any other area, and we have not finished with it yet, I suspect. That puts this matter in perspective.
We made it clear in the White Paper that we intended to provide an exemption from rate limitation for authorities with a relatively low level of expenditure. The expenditure of such authorities can have only a small effect on the total of local government spending. It is far more important that our relatively limited resources should be devoted to controlling the spending of big, high spending authorities which have a major effect on overall expenditure patterns.
There is no particular magic in the figure of £10 million that we have settled on since the publication of the White Paper, except that it broadly achieves our aim. As has been said, of the 296 non-metropolitan districts in England, whose spending as a whole accounts for only about 7 per cent. of total local government expenditure, the £10 million figure would at present remove 276 from consideration on the basis of preliminary 1984–85 budgets. The expenditure of these authorities will of course continue to be subject to the general discipline of the block grant system.
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Meanwhile, we shall be left free to concentrate on the worst offenders—worst in the sense of the effect on the ratepayers and in the significance of their effect upon other general spending patterns. I do not think I can add any more to that. We clearly cannot accept the amendment, and I hope that the noble Baroness will not feel that she wishes to pursue it.
Baroness Fisher of Rednal: I listened carefully to the noble Lord. He said that there is no magic figure, but one must feel that there is a party political decision being made. The Government, in setting targets for local authorities for 1983–84, set two basic sets of targets but they also devised a third, intended to catch only the GLC. This they did because their original target, the 20 per cent. above, caught Corby and Milton Keynes. Therefore, they set another target, or another figure, the £10 million, to exclude those two, and so set a particular target for the GLC. What we are saying is that that £10 million was a target fixed explicitly by the Government to protect what are quite clearly their friends. Whether or not the Minister likes it, that is the opinion. As the noble Viscount, Lord Ridley, said when he moved his amendment, he was doing it only to get a dig at the district councils, which up to now had got off scot free. There is no magic figure; it is a figure which suits the Government's party politics. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 22 and 23 not moved.]
10.18 p.m.
Baroness Nicol Baroness Nicol moved Amendment No. 24:
Page 2, line 35, leave out paragraph (b) and insert—
(" (b) to be grossly excessive having regard to demographic, economic and social conditions in the United Kingdom in general and to demographic, economic and social conditions in the area of that local authority in particular".)
The noble Baroness said: I rise with a feeling almost of despair. We went over this ground on Amendment No. 20 and there seems to be a tangible barrier across the Floor which prevents each from apparently understanding what the other is saying. However, we shall have one more go. The wording of this amendment is slightly different from that of Amendment No. 20 in that it has more specific requirements, so I shall proceed as if Amendment No. 20 had not happened.
This amendment alters the test by which an authority is measured to gain exemption from selection. It requires the Secretary of State to consider not only national demographic, economic and social conditions, but also those particular conditions in the authority in question. As we have already heard, fluctuations of conditions in authorities must affect their needs: fluctuations in the mix of age range, which has happened in some of the older "new towns", where they have had serious age imbalances due to the fact that they filled up with younger people who then all became old. The difficulties of the local authorities are very real. Unusual surges in population, such as we enjoy in Cambridgeshire, which has the largest population growth of any county in the country; changes in local employment opportunities; and large ethnic populations, or an unbalanced social mix, all

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have effects which need to be considered when deciding the reasonableness of an authority's spending.
We understand that the Secretary of State requires the right to examine an authority's spending to see whether it is reasonable according to his lights. What we are trying to say, in many different ways, is that before he embarks upon that exercise he must recognise that there are certain basic needs, all of which can be quantified and can even be evaluated, which will vary from authority to authority and which must be part of the formula that he takes into account before he decides whether or not their spending has been reasonable. He can then go on to evaluate how much they pay for emptying their dustbins and all the other services they provide.
He must, however, take account of local conditions. It would be quite unjust for him to take decisions without weighing these local factors as well as the prevailing national conditions. Amendment No. 24 identifies the basic factors which we feel should be included, and requires him to take account of them. It would also give some form or substance to "the best information available to him", referred to in line 31.
I will now speak to Amendment No. 25.
Amendment No. 25: Page 2, line 35, leave out paragraph (b) and insert—
(" (b) to exceed its grant related expenditure for that year plus 25 per cent. and its expenditure guidance for that year plus 10 per cent.")
This is slightly different ground which I do not think we have covered before. The purpose of Amendment No. 25 is again to write in criteria for selective rate limitation, but on a slightly different line. The amendment is to leave out paragraph (b) and insert
"(b) to exceed its grant related expenditure for that year plus 25 per cent. and its expenditure guidance for that year plus 10 per cent."
GREs are based on doubtful statistics. They make broad assumptions about equal demand for services and are admitted by the Government to be not perfect, which is why the block grant outside targets and penalties is not reduced until GRE plus 10 per cent. A wide margin is clearly necessary and this needs to be spelled out in the Bill.
In the second half, the targets plus 10 per cent., the Secretary of State already has wide discretion in the setting of targets or ceilings; the rules for their construction change year by year. Targets are not reliable enough for them to be taken as a measure of overspending, and this part of the amendment provides for a margin of error. I beg to move.
Lord Bellwin: The noble Baroness in this argument misses the whole point: that the basis for selection will be on criteria that take into account the GREs. The GREs already themselves are specifically designed to take into account local need. For example, the borough of Hackney has a GRE for personal social services of £121 and some pence per head. That compares with a national average of £44 and some pence per head, almost three times the national average. That is the whole object, the whole purpose of having GREs, grant-related expenditure assessment,
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that is what it is about, in determining the grant. Therefore when deciding on what the spending is, we are not looking here at authorities that spend 2 or 3 per cent., and I assure you that a number have come to see me and have expressed concern because of the advertising and campaigns about rate capping. There are those spending 2 and 3 per cent. over the GREs and often below their targets.
We are talking here of an authority, as I mentioned before, spending 86 per cent. over the GRE, over the already assessed need, allowing for their local circumstances. Additionally, we are talking about Amendment No. 25 which seeks to restrict spending to more than 25 per cent. above GRE and more than 10 per cent. above the expenditure target.
On the basis of 1984–85 budgets, there are only nine authorities which meet these very lax criteria and are spending more than £10 million. Very few authorities have been willing to put their ratepayers to that kind of distress, trying to meet bills associated with such excessive spending. Indeed, it is significant that of the nine—and this is the other point—only five are in a state of block grant and are therefore open to the pressures of the grant system. There is no question of accepting this specific amendment. However, having said that, I recognise that the amendment seeks to draw me to say where the line will be. As I have indicated, I am not yet in a position to say this. I have said that our intention is to select no more than 12 to 20 or so authorities; but until we have seen their budgets for 1984–85, we cannot decide on the precise criteria.
I have spoken at some length on this a number of times today. I think it was right that I should do so, because I recognise the concern. But in this whole matter we are not talking of authorities who are very similar to other authorities. We are talking of a handful of authorities—12, or 20 or so, out of 430 odd. That is all. They are far above any reasonable basis, no matter what criterion one applies. They are far ahead of anything that any reasonable authority can possibly justify.
If you look at what they spend their money on, there is the explanation. If you look at the fact that they refuse to provide services at a level comparable with the others, you see that part of the answer is there. These are political policy decisions. It is up to them to take them if they wish. We can talk about the nexus between voting and paying and all that, if we want to do so. The fact is that there are reasons why these authorities are in this position. They are not delicately balanced reasons. These authorities are streets and streets ahead of everybody else. Something has to be done. That is the whole purpose behind the Bill, and that is why we cannot accept these amendments.
Baroness Nicol: It is obvious that we have reached deadlock on this point. I can only once more reflect that if the Minister knows so well which authorities are involved, if he is so sure of these authorities, and if they are such streets and streets ahead of everybody else and in a class of their own, it seems a little odd that we have to have this general legislation to deal with them. I simply do not see why they could not have been dealt with either individually or in separate legislation,

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instead of having to take general powers to deal with them. However, for the present I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 25 not moved.]
Lord Sandford Lord Sandford moved Amendment No. 26:
Page 2, line 37, leave out subsection (3) and insert—
("(3) The Secretary of State shall, before the commencement of each financial year by an order made by statutory instrument increase the amount specified in subsection (2)(a) above by not less than the increase in the Retail Price Index for the previous calendar year.")
The noble Lord said: The Committee will have noticed that the ADC remained unmoved and unprovoked by the gibes from the AMA, the taunts from the ACC, or even the compliments from my noble friend on the Front Bench. Now I take pleasure in introducing Amendment No. 26, which I judge to be the easiest on the whole Marshalled List for my noble friend to accept.
It is an amendment which does not question the good sense and wisdom of establishing a figure of £10 million. It does not say anything about any possibility that that might be arbitrary as between one group of authorities and another, or unfair as between the county councils and the district councils. It raises no questions of that kind at all. It thinks that the clause as drafted is almost perfect. But it is anxious to ensure that it remains perfect. It does so by ensuring, or suggesting, that the Government's judgment should be kept up to date from year to year by application of the retail price index. With great hope, I beg to move.
Lord Bellwin: I am sorry that I have to disappoint my noble friend. At least I am being consistent. Your Lordships will have to concede that. I accept that from time to time it may very well be necessary to increase the value of the cut-off in the light of changing circumstances. We have said this. But I cannot accept this specific proposal for two reasons. First, I cannot accept that the RPI is the appropriate index by which to revalue figures. It is no more than an index of the movement in costs experienced by an average family. That seems quite inappropriate to local authorities which experience different rates of increase in their costs. They are at present broadly in line with the increase in the RPI, but that is not always so.
The second reason that I cannot accept the amendment is that it specifies a precise procedure for operating the £10 million figure. It does not require a mathematician to realise that the procedure specified in the amendment would very soon lead us to specify a cut-off level by order to a number of decimal places. That would not fit in with the concept of a cut-off level, broadly expressed, at which the expenditure of an authority can be said to make a significant contribution to the global expenditure of local government.
Without going on at length, I ask my noble friend to accept that we cannot accept this amendment. In fact we have been criticised within the past few minutes for being unduly lenient towards the position of the members of his association. Now, like Oliver, my noble friend comes with a request for a little more. I do
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not think that it is appropriate in all the circumstances. I hope he will let it go at that.
Lord Sandford: I am enormously encouraged by that reply. The principle has been fully accepted. I beg leave to withdraw the amendment, to seek a more appropriate and acceptable formula for giving effect to it.
Amendment, by leave, withdrawn.
Lord Underhill Lord Underhill moved Amendment No. 27:
Page 2, line 43, after ("State") insert ("in consultation with, and after taking into account any representations received from such association of local authorities as appear to him to be concerned and any local authority with whom consultation appears to him to be desirable")
The noble Lord said: There has been considerable discussion on other amendments of the question of the principles for the designation of a local authority. I would remind your Lordships that subsection 4 of this clause makes it absolutely clear that the designation shall—I quote:
"be exercised in accordance with principles determined by the Secretary of State".
There are no criteria laid down, no principles laid down, though we do see that in the Notes on Clauses it is stated that the criteria mentioned in Paragraph 3.6 of the White Paper are the kind of thing that might be used. But that is not making law; that is merely Notes on Clauses referring to something in the White Paper.
What the amendment is seeking to do is to assist the Secretary of State. He ought to be very grateful for that because too much responsibility is being placed upon him. He will determine the principles. What we are asking in this amendment is that those bodies which can be of assistance and have got the information and the know-how should assist the Secretary of State. We are asking that he should take account of any representations which are made by the Association of Local Authorities and also any other local authority which he considers to be desirable. This seems to be the most innocuous amendment, one which the Minister ought to be able to accept, and I hope that he will do so.
Lord Bellwin: In that the noble Lord is anxious to help the Secretary of State, may I point out why I am equally anxious to help the local authority associations and my concern for their position in this matter. Amendment 27 requires the Secretary of State to consult with the associations about which of their members should be selected for rate limitation. I would have thought that that was an invidious position into which to put the associations. I am clear that those issues about which authorities should be selected should be matters for the Secretary for State and he should be answerable for those decisions and not be able to shelter behind the statutory involvement of the associations in his decisions. I shall fairly point out that in relation to the general scheme under Part II, where we would be dealing with the whole of local government, we do provide for consultation with the associations, both on the introduction of a scheme and on the setting of expenditure levels.
By rejecting this amendment we do not, of course, restrict the ability of any association or any authority to make representations to the Secretary of State about

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the way in which selections are made and the principles for setting expenditure levels are determined. But I do not think it advisable to bind him to consultation in this way, and I hope that the noble Lord will not want to press the amendment.
Lord Underhill: I am certain that the Minister has misinterpreted what I have said. We are not asking that the local authority associations should consider a particular authority to be designated. What the amendment is seeking is that the principles, the principles which the Secretary of State is given complete responsibility to determine, shall be done in consultation with the local authority associations and other authorities that he may consider desirable.
I would mention that it is written into the Bill later on that commercial and industrial concerns shall be consulted before certain local authorities fix the rate. If that can be written into the Bill, then surely the three important local authority associations ought to be given the same opportunity for consultation on principles. But what I will do, because of the late hour, is to read very carefully what the Minister has said and possibly come back at Report stage because there is a vital principle here. But in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 28 and 29 not moved.] 10.35 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 30:
Page 2, line 43, leave out from ("and") to ("those") in line 1 on page 3.
The noble Lord said: With this amendment, I should like to speak also to Amendments Nos. 31 and 32.
Amendment No. 31: Page 3, line 2, leave out from ("authorities") to end of line.
Amendment No. 32: Page 3, line 3, leave out subsection (5).
These amendments make the principles used to designate authorities apply to all authorities and prevent the use of different principles for different classes of authorities. The Minister is well aware that the principle of designating classes of authorities is well established in previous legislation. We are concerned here that the principles to designate authorities should apply to all of them and there should not be the differentiation that clearly can happen at present under the Bill.
The Bill does not at the moment state what will be the rules for applying the principles. We have had some interesting debates this evening. I am tempted to use the word "arbitrary" because the Minister has, I believe, stubbornly refused to assist the Committee in understanding the nature of the principles that might be applied. The noble Lord has certainly resisted the opportunity that we provided for reading into the face of the Bill not merely the principles but also some of the details. We are much concerned that the nature of the Bill at present is far from satisfactory.
We are dealing with a great range of different authorities. The Minister is right in that when he finally gets round to the designation game there will be a common pattern clearly identified as overspenders,
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but there will also be some common elements. We are concerned here about the fear that will be engendered among a number of authorities on the edge of possibly being caught. The Bill as drafted breaches a fundamental principle of common law and natural justice. That is equal treatment before the law. The power to designate can be operated on one set of principles for, say, metropolitan counties or inner London boroughs and on entirely different principles for shire counties. If we are wrong and there will not be different sets of principles for different sets of authorities, the Minister can perhaps tell us. However, if the Minister is going to create different sets of principles for different sets of authorities, we say that this is managing and bending the situation to suit the whim of the Minister at any particular time. That is the basis upon which I move the amendment.
Lord Bellwin: The issue here is whether the principles underlying designation should be common to all authorities or whether it should be possible, as I believe, to apply different principles to authorities in different classes. Ideally, we should prefer to use the same principles for all authorities and we shall do so as far as possible; but that does not recognise the differences which affect the different classes of authority. They perform a different mix of functions. Their costs may, in some circumstances, be affected to different extents by changes in pay and prices because of different ratios of manpower to running costs and different pay settlements. It could conceivably be necessary to vary the principles between classes in order to arrive at similar treatment overall of the different classes.
In other words, to meet technical differences between the different classes we might need to use different principles. Different principles would ensure the same, equal treatment. I believe that this is the only circumstance in which we could use different principles without facing challenge in the courts.
There are precedents for providing for principles to apply separately to separate classes of authority. The multipliers set for block grant are a good example. A change in the discount of rateable value allowed for the block grant of London authorities would affect rate poundages so that comparison of rate increases over a period of years could be distorted. It would be our intention to operate, so far as possible, on generally applicable criteria, but we could not agree that the Secretary of State should be restricted in that way. I hope the noble Lord will accept from me that that is the intention. It is in terms of the practical application in dealing with this matter.
Lord McCluskey: I wonder whether the Minister would tell me what he means by "principles". I have listened to the debates on different amendments. I noticed in particular that the Minister declined to accept Amendment No. 16, which used the word "details". Now, in describing principles, he talks about pay, he talks about prices. A few minutes ago he was talking about the appointment of political advisers. I am afraid that as a lawyer—ultimately it is the courts which will determine what these words in the statute mean—I do not understand the word "principles" as it comes from the mouth of this Minister, or as it is in this Bill.

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May I ask him, for the enlightenment of the Committee—so that we may consider where we stand when we come to vote on the Question that the Clause Stand Part—whether he will explain the difference between a detail and a principle, and why the concept of rates of pay and the concept of prices can be described as principles and not as details? In short, can he tell us what is meant by "principles" in this clause?
Lord Bellwin: I was trying to move ahead, but perhaps I will give a little more detail. Between 1982–83 and 1984–85, for example, we have seen relatively large increases in the planned expenditure on police—16·1 per cent.—as a result of our commitment to improve law and order services, and a slightly larger increase in the provision for personal social services in response to our ageing population.
On the other hand, provision for education has increased much more slowly in order to recognise the savings from falling school rolls and it is possible to see that in some circumstances the balance of service provision could be so weighted towards some classes of authority that it would be appropriate to take account of that in looking at expenditure performance. If not, some authorities could be selected because of these factors, and not because their spending within their area of responsibility was inherently more excessive than that of other types of authority with different services to provide. What we are seeking to say—I stressed it before—is that ideally we should prefer that the same principles should be used for all authorities. I stressed that we shall do that as far as possible; that is the intention.
Lord McCluskey: I am sorry for intervening, but I am afraid I have expressed myself extremely badly. What I was endeavouring to discover from the Minister is what he means by the concept of principle, as distinct from the concept of detail. The kind of gobbledegook that he is pouring out at this late hour of the night is not helping me to understand that concept. I should like to know what he means by a principle. Can he tell us?
Lord Bellwin: I am sorry that the noble and learned Lord feels it necessary to talk about gobbledegook. If he does not follow the points that I am making, he should—as he is doing—ask me to clarify them, and I shall try to do so. I find difficulty in understanding some of the questions that the noble and learned Lord puts to me. He himself suggested that might be the case. We are seeking here to ensure that authorities know the principles or the basis on which they have been designated. That is what we are talking about—the basis on which they have been designated; the criteria, if one likes, that will apply.
We said earlier that the criteria will relate to the totality of spending, not the detail on what they spend but how much they spend and how it relates to GREAs, targets or combinations of both. This has yet to be resolved and decided. That is what we mean when we talk about general principles. When we talk about details it brings in the point noble Lords opposite were making earlier when they said we will
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then consider the needs and all the other factors that are involved in a local authority's spending. That is really what we are trying to say here. When I talk of principles it is that kind of principle to which I am referring.
Lord Graham of Edmonton: I am prepared to withdraw the amendment; but the Minister, who always does his best to help the Committee, has quite clearly indicated the ease with which it is possible, if not to be confused at least to be faced with a number of interpretations of what is meant by a phrase. In describing "principles" he used the phrase "general criteria", and then he referred to "the basis", and so on. Clearly the legislation will lend itself to a number of cross periods as between councils and the Government, perhaps not on matters of substance but on matters of interpretation. In withdrawing the amendment let me say that we certainly intend to come back to this matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 31, 32, 33 and 34 not moved.]
Clause 2 agreed to.
Lord Denham: I think we have reached a satisfactory stage of the Bill at which to give up for the evening. I am most grateful for the progress that we have made. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at thirteen minutes before eleven o'clock.