Rates Bill

HL Deb 26 April 1984 vol 451 cc156-99

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 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 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 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 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, 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 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 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 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 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.

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 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 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 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 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.

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. 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.

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 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.

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.

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 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 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 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 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 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 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 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- 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 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 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 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. 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 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 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 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 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.

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 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.

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 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.

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.