Lords Sitting of 30 April 1984

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Gloucester.

Hip Replacements
Baroness Lane-Fox: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the rise in the number of hip replacements in the period 1979 to 1983.
Baroness Trumpington: My Lords, the estimated number of total and partial hip replacements in National Health Service hospitals in England and Wales in 1979 was 31,130. The lastest available figure is for 1981, when the total was 35,220—an increase over the period of 13 per cent.
Baroness Lane-Fox: My Lords, I appreciate the reply given by my noble friend. May I assume that the growing popularity of the operation stems from its high success rate?
Baroness Trumpington: Yes, my Lords. I am glad to agree with the assumption of my noble friend Lady Lane-Fox. I should say that both techniques and materials used have greatly improved over the years.
Lord Ennals: My Lords, will the noble Baroness accept that this operation is probably one of the most effective and pain-relieving that has been established in the last 25 years? But will she confirm that the increase over the years in question is simply part of a rise that has spread over the last 10 years? Will she also accept that the increase shown in the figures she gave was partly due to the planning that has gone on in advance into suitable medical teams and operating theatres? The planning was done in advance to ensure that the numbers showed a steady increase.
Baroness Trumpington: My Lords, in answer to the noble Lord, I agree with the first part of his supplementary question. With regard to the second part of his supplementary question, I imagine that all medical research and care is the result of forward planning.
Baroness Gaitskell: My Lords, may I ask the noble Baroness whether she agrees that the present situation as regards this operation is much healthier and much more desirable? It is not an operation that people should indulge in at a moment's notice, and I am very pleased to hear that some of the numbers have gone down.
Baroness Trumpington: My Lords, I entirely agree with the first part of the noble Baroness's question. As
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regards the second part, I said that the numbers had gone up.
Lord Paget of Northampton: My Lords, would the noble Baroness say that a lot of pain is caused by having to wait for this operation? There was a time when it would take up to 18 months to have the operation done under the National Health Service. What is happening now with regard to that?
Baroness Trumpington: My Lords, of course to anybody who is suffering pain any wait for an operation must seem a very long time. But the figures went up in 1982, following the National Health Service dispute. We are glad to say that the latest figures show some improvement, but it is perfectly true to say that there are quite a lot of people waiting.
Lord Dean of Beswick: My Lords, may I ask the Minister whether in the figures she gave—and an increase of that dimension is something of a success story—there is any variation in waiting times in the different regions of the country, bearing in mind that in Leeds people are being confined to wheel chairs while they wait for this operation? If there is a regional variation, will she look at it?
Baroness Trumpington: My Lords, health authorities are encouraged to notify general practitioners who make the initial referral of a patient to hospital about where the shortest waiting lists are likely to be. It is always open to a general practitioner to refer his patient to a consultant at any hospital where it is felt that earlier treatment may be available.
Lord Somers: My Lords, may I ask the noble Baroness whether she has heard of a case of which I know where the patient had her operation last year after waiting six years?
Baroness Trumpington: My Lords, I am not aware of the particular case to which the noble Lord refers.
Lord Hale: My Lords, may I ask the noble Baroness whether she is aware that my sister has twice undergone this operation, both times with maximum success, minimum pain, and admirable attention, very often from foreign nurses who have come into the health service to assist? Everything has been admirable throughout and my sister, who is 90 years of age, has had her life substantially prolonged.
Baroness Trumpington: My Lords, I thank the noble Lord for that very encouraging information. I should just add that the urgency with which a particular patient is treated is a matter for the clinical decision of the consultant concerned.
Baroness Lane-Fox: My Lords, may I ask my noble friend whether the most encouraging aspect of these rather tortuous delays is surely that so many more surgeons now perform these operations, which I believe are part of the training of orthopaedic surgeons?
Baroness Trumpington: My Lords, in answer to my noble friend Lady Lane-Fox, I would say that she is

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perfectly right. In the early stages there were a few highly specialised surgeons who pioneered this form of operation. Now it is a general part of every orthopaedic surgeon's training.
Lord Ennals: My Lords, bearing in mind that noble Lords and noble Baronesses have raised the disturbing question of the waiting period, will the noble Baroness confirm that the figures which were given to me last month by her noble friend Lord Glenarthur show that in fact general waiting lists are roughly 100,000 more than they were in 1978?
Baroness Trumpington: My Lords, I can give the noble Lord the exact figures. On 30th September 1983 there was an overall total of 142,113 waiting for in-patient treatment in the specialty of traumatic and orthopaedic surgery. I would add that there are additional problems. First, some of those who were operated on in earlier years may now require a revision of their operation because the replacement joint has worn out or become loose. Secondly, hip replacement is increasingly being used as treatment following the emergency admission of an elderly patient with a fractured femur. Thus, a significant proportion of the increased capacity of the National Health Service is not available for operations on waiting list patients.
Lord Ferrier: My Lords, while welcoming the figures which my noble friend has given, would she agree that the pressures which still exist on the orthopaedic side of the National Health Service could be relieved if there were more acceptance of complementary medicine which provides manipulative therapy, such as chiropractic therapy?
Baroness Trumpington: My Lords, I imagine that that is a question for the general practitioner of the patient involved.

Fast Breeder Reactor Programme
2.45 p.m.
Lord Ezra: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their policy towards the development of the fast breeder reactor, particularly with regard to the commercial demonstration phase.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, my right honourable friend the Secretary of State for Energy made a statement in another place on 16th January concerning the United Kingdom's participation in collaboration on fast reactors on a European basis. A memorandum of understanding has been signed by five countries, as an expression of Government intent to establish long-term co-operation on fast reactor development. It is envisaged that one or more commercial demonstration reactors will be built as part of the collaboration, but no decisions have yet been taken on the timing or siting.
Lord Ezra: My Lords, in thanking the noble Earl for that reply, may I ask him whether he considers, in the light of the European agreement to which he has referred, that there will be a beneficial impact on the development of our energy strategy by collaborating in this way with our European partners, as this will diminish the cost that we would otherwise be involved in if we were to go on our own, and increase our technological capability?
The Earl of Avon: My Lords, I agree with the noble Lord. One of the key principles is the harmonisation of research and development efforts, the sharing of relevant information and know-how and the promotion of industrial co-operation.
Lord Avebury: My Lords, does the noble Earl recall the recommendation of the Royal Commission on Environmental Pollution, that there should be no commitment to a large programme of nuclear fission power until it has been demonstrated beyond reasonable doubt that a method exists to ensure the safe containment of long-lived, highly radioactive waste for the indefinite future? Since we still have not solved this problem, will the noble Earl make certain that no firm commitment is given to fast breeder reactors or to any other major programme on a European scale until this problem has been solved?
The Earl of Avon: My Lords, if the noble Lord is quoting from the report from which I think he is quoting, that report also suggested that some movement towards nuclear power was not a bad idea. As to the fast reactor we are looking to the years past the year 2000.
Viscount Hanworth: My Lords, would I be correct in thinking that there is less trouble with the disposal of fission products with a fast breeder reactor than there is with our normal reactors?
The Earl of Avon: My Lords, as I accompanied the noble Viscount to Dounreay, I have pleasure in agreeing with him.
Lord Stoddart of Swindon: My Lords, could the noble Lord give me an assurance that as a result of our agreement with four other European countries there will be no delay in building a British commercial demonstration fast reactor?
The Earl of Avon: My Lords, the noble Lord will recall that in my original reply I said that no decisions have yet been taken on timing or siting, so his question is hypothetical. However, I certainly hope that there will be no delay.
The Earl of Winchilsea and Nottingham: My Lords, can the Minister say whether British Nuclear Fuels Limited are still using the leaky flasks which were identified as being the subject of a secret report 13 months ago, as detailed in the Sunday Times on 15th April 1984? Can the Minister also tell the House how much waste is stockpiled as a result of the National Union of Seamen's refusal to load it for sea dumping, an action which we on these Benches fully support? What do the Government plan to do with the waste?
The Earl of Avon: My Lords, the supplementary questions which the noble Earl has asked are very wide of the Question. However, I should be delighted to answer them, should the noble Earl care to put them down. The noble Earl mentioned the newspaper article about the flasks. My understanding is that my right honourable friend the Secretary of State for Transport announced last November that the regulatory approval certificates for all flasks of that particular design were cancelled at that time, and I am informed that none has been used since.

Nuclear Weapons in the UK: Control
2.49 p.m.
Lord Jenkins of Putney: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the appreciation expressed by the Earl of Avon on 24th February (col. 963) of Lord Jenkins of Putney's point that many people "will much more warmly welcome the American contribution when it becomes a non-nuclear contribution" indicates that the Government now share this view and, if so, what actions they are proposing to give effect to it.
The Earl of Avon: No, my Lords. Acknowledgment of an opinion is not the same as agreement with it. The Government's position has not changed.
Lord Jenkins of Putney: My Lords, is the noble Earl aware that I am bitterly disappointed by his Answer, although not perhaps so surprised as disappointed? Is the noble Earl aware that in the meanwhile the American Government do not agree with the Prime Minister that she has a veto over the firing of American cruise missiles on British soil? Is he aware that Paul Warnke said that—
A Noble Lord: Reading!
Lord Jenkins of Putney:—and I quote:
"The country that physically controls the weapon is going to make the decision"?
And again I quote,
"No piece of paper is the equivalent of a twin key system"?
Will not the Government look again at the situation, which now places the life and death of everyone in this country in the hands of a foreign power?
Noble Lords: Unquote!
The Earl of Avon: My Lords, I thought that the noble Lord's original remark might lead me to the Gilbertian expression,
"You're exceedingly polite and I think it only right to return the compliment".
To be more specific, I must reiterate what my right honourable friend the Prime Minister is on record as saying, on 12th May 1983:
"The effect of the understandings and the arrangements for implementing them is that no nuclear weapon would be fired or launched from British Territory without the agreement of the British Prime Minister".—[Official Report, Commons, 12/5/83; col. 433.]
Lord Jenkins of Putney: My Lords, is it not the case that if there is an agreement, both parties must agree on what the agreement is? If the Americans insist—as they do insist, continuously—that there is no veto, then, as Mr. Warnke has said, the situation is that the power which holds physical control will make the decision.
The Earl of Avon: My Lords, I have not had a large amount of dealings with the United States but I feel sure that if the President and our Prime Minister have come to this agreement, then that is good enough for us.

Falkland Islands: Negotiations
2.51. p.m.
Lord Dean of Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether any further progress has been made towards establishing meaningful discussions with the Argentinian Government regarding the Falkland Islands and surrounding areas.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, on 6th April the Swiss protection power delivered our response to the Argentine comments on the specific ideas we put forward on 26th January. We are ready for official talks on the normalisation of relations between our two countries. Such talks cannot include discussion of sovereignty over the Falkland Islands or the Falkland Islands dependencies.
Lord Dean of Beswick: My Lords, I thank the noble Baroness for that reply. Is she not aware of the growing concern about the slowness of real and meaningful negotiations starting? Can the noble Baroness tell the House whether the slowness of those negotiations getting off the ground is in any way retarding the Government's redevelopment programme for the islands?
Baroness Young: My Lords, the Government's redevelopment programme for the islands is continuing, and it has not been affected by any negotiations by the Swiss protecting power.
Lord Dean of Beswick: My Lords, is it not a fact that having the redevelopment programme take place in the present climate of disagreement is placing an intolerable burden on the taxpayers of this country? Is it not also a fact that the sooner negotiations start and some agreement is made the sooner this financial burden may be reduced?
Baroness Young: My Lords, as the noble Lord will be aware the financial cost of the rehabilitation of the Falkland Islands includes a £15 million grant for rehabilitation which has been fully committed, and expenditure will be completed by the end of the present financial year; £31 million for development

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over a five to six year programme, the phasing of which expenditure has not yet been agreed with the Falkland Islands Government; and the war damage compensation scheme, under which more than £3 million has been paid although some claims remain still to be finalised. This continues.
Lord Cledwyn of Penrhos: My Lords, can the noble Baroness tell the House what is the obstacle to the resumption of diplomatic relations at the present time? Is it the case that Her Majesty's Government are prepared to cancel the Exclusion Zone if diplomatic relations are resumed? Can she further say whether or not Her Majesty's Government are prepared to enter into unconditional negotiations with the new Government of the Argentine?
Baroness Young: My Lords, on the first point raised by the noble Lord, my right honourable friend the Prime Minister said in another place on 15th March that it would be difficult to restore diplomatic relations until Argentina had said that hostilities towards us have permanently ceased. But the absence of such a declaration need not rule out other intermediate steps. On the noble Lord's second point, as I indicated in my original Answer the Swiss delivered our response to the Argentine comments on our proposals, but we have made it quite clear that talks cannot include discussion of sovereignty.
Lord Monson: My Lords, does the noble Baroness not agree that meaningful discussions would be much easier to achieve if the Argentinians were to volunteer to clear up the unmarked minefields which they laid in the Falklands in contravention of the Geneva Convention, and which are still killing and maiming animals and, occasionally, human beings?
Baroness Young: My Lords, I believe we all agree that it would be much better if the minefields were cleared up. But great care has been taken by the Ministry of Defence—certainly in the areas I saw when I myself was in the islands—to try to fence off the minefields and open up parts of the area around Port Stanley for civilian use.
Lord Mayhew: My Lords, can the noble Baroness say what international support the Government are getting for their rather rigid line? Which of our friends and allies have announced their support for it?
Baroness Young: My Lords, we have of course made quite plain to our friends and allies our position about our relationship with Argentina. We have made it clear that we wish for more normal, bilateral relations, and we hope very much that we shall be able to achieve this position.
Lord Molloy: My Lords, while I acknowledge the Government's stand apropos negotiations with the Argentine, which we all hope will one day proceed, may I ask the noble Baroness whether she would not agree that there are a number of disturbing features
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which ought to be ironed out before real negotiations begin? For example, we are told that Falkland islanders who wish to borrow money from the Government to develop their farms are having them described in some instances as unsuitable, while on the other hand Lafonia, which is the largest block on the airfield site, owned by an absentee landlord named Coalite, is now in receipt of millions of pounds and quite a vast amount of compensation. These two factors together are causing anxiety and some bitterness among Falkland islanders.
Baroness Young: My Lords, the point about land distribution in the Falkland Islands is one that has been raised in your Lordships' House on many occasions in the past. We have indicated that the Government's policy is that there should be a gradual acquisition by tenants in the Falkland Islands of their own farms, and this is proceeding. On the point about land costs for the new airfield, this matter was gone into very thoroughly by my noble friend quite recently.
Lord Kennet: My Lords, can the Minister of State assure the House that the import into this country of books published in Argentina is once again permitted?
Baroness Young: My Lords, that is precisely the kind of issue which we hope will be dealt with when we have established more normal, bilateral relations with Argentina.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Rates Bill will be adjourned for a short period for dinner at approximately 7 p.m. During this adjournment the Second Reading of the Agriculture (Amendment) Bill will be taken.

Rating and Valuation (Amendment) (Scotland) Bill
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Rating and Valuation (Amendment) (Scotland) Bill has been committed that they consider the Bill in the following order:

Clauses 1 and 2,

Schedule 1,

Clauses 3–17,

Schedules 2 and 3, Clauses 18 and 19.

—(Lord Gray of Contin.)
On Question, Motion agreed to.

Rates Bill
2.59 p.m.
The Minister of State, Department of the Environment (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 again resolve itself into Committee.—(Lord Bellwin.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 3 [Expenditure levels]:
Lord Underhill Lord Underhill moved Amendment No. 35:
Page 3, line 21, after ("shall") insert ("in consultation with, and taking into account any representations received from, that authority").
The noble Lord said: I move Amendment No. 35 standing in the names of my noble friends Lady Birk and Lady Nicol. It will be recalled that on Thursday I put forward Amendment No. 27 which dealt with consultation on principles for the designation of local authorities for the selective scheme. The amendment that I now propose is also concerned with consultation but relates to Clause 3(1), where the Secretary of State shall determine a level of the total expenditure of a designated authority for the purpose of enabling him to prescribe the rate to be made. Obviously noble Lords will appreciate that this is most important; but the Bill places the sole responsibility for determining this on the Secretary of State.
The amendment provides that the Secretary of State shall make this determination in consultation with the authority concerned, and that he shall take into account any representations that that authority may make to him. I am certain that noble Lords will regard this as being fair, common-sense and very equitable. In fact, on Second Reading the Minister gave me the justification for proposing this amendment.
It will be recalled that on Second Reading I outlined the extent of deprivation and the problems facing the London Borough of Hackney. In column 1017 of Hansard for 9th April, the Minister gave what many noble Lords will have considered to be a blistering reply to the points that I made. I do not want Hackney to be debated here, but there are some points which I must make regarding what the Minister said to show why it is absolutely necessary for a local authority to be consulted before its expenditure level is fixed. I have the official reply to me from Hackney.
First, the Government compelled the council to take responsibility for 18,000 former GLC dwellings and to fulfil the duties associated with them—that is, maintenance and servicing—427 staff were transferred to the borough of Hackney. Remember, the Minister attacked Hackney because it has employed 993 additional staff in the past 21 months. In addition, another 100 staff were recruited to provide administrative support and services which were lacking in connection with the 18,000 houses. That is a total of 520. That is over half the figure which the Minister
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quoted. There are another 50 people in the highly successful Powell House training scheme, which is Government funded.
On Second Reading I stressed in my remarks that one-third of the people in Hackney are either black or from the ethnic communities and that previously the council had no race relations staff whatever. The council has recruited 32 people to deal with race and ethnic issues, and all of these, except three, receive a 75 per cent. grant from the Home Office; yet that authority is being criticised for engaging extra staff.
Then there is consumer protection. In 1982 Hackney was part of a consumer protection consortium with neighbouring boroughs. It now employs 16 staff direct. That is reorganisation, not growth. The Minister criticised Hackney for engaging architects, design staff and quantity surveyors. The reason is that the council decided not to go to consultants but to deal with these matters in-house. It costs nothing because, it is emphasised to me, salaries are paid out of capital projects on all those three items. I could go on. The information I am giving shows how vital it is that the authority must be consulted before total expenditure is determined.
It may be that the Minister will say that all this is nonsense, although it came from the leader of the council who discussed this with his staff. But surely it shows that in fairness, and if we are to do the job properly, it is absolutely essential that a local authority should be consulted before a decision on its total expenditure is made. That is a thorough justification of this amendment. I hope the Minister will recognise that in the light of his own criticisms on Second Reading and readily accept the amendment. I beg to move.
Lord Bellwin: As we have heard, this amendment seeks to extend the degree of formalised consultation with local authorities on rate limitation which the Bill requires of the Secretary of State. He would be obliged to consult individual designated authorities in determining their expenditure levels. I should like to make it clear that the Government are always willing to discuss with individual local authorities matters of concern including financial issues, and there are many important matters where consultation with local authorities through their associations would be both proper and helpful. But I do not think this is an appropriate matter for consultation with individual authorities. There are three reasons.
First, Clause 3 provides for expenditure levels to be determined on common principles. This gives all authorities fair and comparable treatment from the outset. Each will be asked to make similar savings—although allowance may be made for differences in the services provided by different classes of authority. It would be wrong to depart from the fairly applied principles in setting the expenditure levels.
Secondly, if there are special circumstances which make it very difficult for an authority to budget within the expenditure level first set, the Bill does allow them to seek a redetermination of that level from the Secretary of State. It is at that stage, not in first setting the level, that the Secretary of State will consider

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carefully and in depth any representations which the authority may make and decide whether to go outside the general principles to take account of specific local points.
The third point is that I am opposed to this amendment because it would inject delay into the process of selective rate limitation. I do not mean that this would be inconvenient for the Government; I am thinking of the designated authorities. The Secretary of State wants to give authorities the earliest possible notice of their expenditure levels so that they have enough time to plan for the necessary savings. The kind of consultation proposed here would eat into that time.
Those are my reasons why we cannot accept the amendment. I had not intended to debate Hackney, but as the noble Lord raised some points I am very glad to pick them up and make some other observations. There were many points that I did not make on Second Reading about Hackney that I could have made, had I wanted to do so. Although the noble Lord gives reasons why the authority felt able to take on some several hundred people, it does not explain, by any means, why an authority which claims to be—indeed is—so deprived in many ways can feel that there is a priority to take on 40 more people into their personnel department. The noble Lord did not touch on that. I did not mention on Second Reading the fact that the main committee chairmen in that authority all now have personal political advisers and research assistants. In my definition of local government I find that quite incredible. Your Lordships can see that my list is also long, and I could extend it.
It also does not explain why the borough feels a priority for spending—this so deprived borough, with which I do not quarrel—thousands and thousands of pounds on political campaigns and on litigation with Government; nor why it is not willing to look at the possible ways of providing services, as others are doing, by going out to tender—not necessarily to take on the tender but to see what other people can do. Why is the council not willing to look, as others are, at achieving the saving of hundreds of thousands—not to say millions—of pounds? Unless a council is prepared to see what else can be done—and if it is so bound with dogma that it is not willing even to look—how can it claim to be providing services at a comparable level with others? The noble Lord, Lord Underhill, and I have much common ground in that point at least; but they are not my reasons for rejecting this amendment. I have given the three reasons.
3.10p.m.
Lord Graham of Edmonton: The Minister has given us illustrations of other aspects upon which it might have been helpful to have a dialogue, for instance with Hackney, and it is quite clear that, as often as he gives them, a refutation of them can be found, whereupon the Minister will bring others. For instance, he has referred not only today but at other times to how surprised he is that other than Ministers of the Crown can find it useful to have political advisers and researchers. The Minister, in fact, ought to move on. He may be remembering his days as the leader of a large authority, when advisers and researchers may
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not have been required, and they certainly were not required in his day or mine when I was the leader of a comparably sized council. But the situation has changed and if in fact what the Minister is saying is that in 1984 the whole concept of political advisers is not required, where does one begin and where does one stop? These are judgments that are made by local people and they are answerable to local people for what they spend and also at the ballot box.
In my view, the Minister is hiding from the real issue here. He talks in terms of general principles. He talks in terms of consultation with the associations. What this amendment is talking about is representation from the individual authorities who are affected, and who better than those individual authorities to plead their case?
I, of course, with my noble friend, visited Hackney at the invitation of the Association of Municipal Authorities. It was only a fleeting visit, simply topping up the knowledge that he and I have about the conditions that exist there, but in the short response that my noble friend gave I believe he effectively demolished the very broad brush which the Minister gave at Second Reading, where he certainly rocked me back on my heels when he mentioned the totality of the figures. Yet my noble friend has pointed out that more than half of them can be seen not as a result of direct initiatives by Hackney but as a result of this Government's decisions which meant that Hackney had to pick up the tab in that particular way.
As far as we are concerned on this side of the Committee the whole matter of consultation has become a big question mark between this Government and local government. The Government have brought the meaning of consultation into disrepute. The Minister has only to speak to his own political colleagues to find just how much credence they give, not to the personal words of the Minister, but to the net outcome of consultation because the Minister may believe that consultation is, when he is driven to it, to sit round a table, to present a paper and to listen and, when he has listened, to say, "This is what we have decided", with no change whatsoever in the original proposals. That is what is happening in the negotiations between central government and local government these days. Quite frankly, consultation is not worth the candle. We happen to believe that the Minister is prepared to listen and not merely listen to representatives from a central organisation but representatives from the individual authorities concerned.
What in fact are we asking the Minister to do? First of all we are asking him to move marginally once, for the first time, on this very big issue. It is a big issue when we look at the individual authorities. I use the phrase, "life and death", which can certainly be ascribed to the consequences of rate-capping on some of these authorities. What we are saying to the Minister is that, when the authorities are designated, whether it is 12, 14 or 16, at the earliest possible moment—and certainly before the drastic action of making the budget that is going to be rate-capped—he should invite these people in for discussions.
The Minister says that consultations can take place and are taking place all the time. We believe that it

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would give confidence to local government and would certainly be no skin off the nose of the Minister if these words were written into the Bill. The Minister says there may not be time. The Minister says that consultations may be the cause of delay. If in actual fact 12 authorities were designated and a whole day was given to each of them to plead their case—I am talking about seven or eight hours, at the end of which meaningful consultations would have taken place—what are we talking about? Two or three weeks on whatever timescale the Minister has.
We genuinely believe that this is a fair and a reasonable amendment. It will provide for the Government to say that if local government really believes that consultation has been sidetracked, here is the opportunity, and, if the opportunity is taken and the Minister speaks very strongly, bluntly, forcefully, fairly and truthfully and so do the local people, they will then be able to go back and say, "We managed to put one or two things right". The Minister must know that the research given to him by civil servants, given to him by letters, cannot possibly be a substitute for facing the people from Hackney or Enfield or anywhere else and saying, "This is what I have been told", and the local people saying, "Minister, you have got it wrong, and here is how you have got it wrong". I think the Minister himself and his nostrums challenged at 2 Marsham Street might very well be improved and certainly from a local digestion point of view would be better received, because at the moment there is a very strong feeling that the Minister, the department, the Government, the party opposite, have made up their minds and are not prepared to listen.
The Minister talks about opportunities that will be taken. Last week on the first day of Committee we were looking at the extent to which Parliament is going to be consulted, and we on this side think that the Minister has paid scant regard to the authority of Parliament and certainly of both Houses. I would say to the Minister in all honesty that it is not Parliament that will be crucially affected by these matters. It is people in areas where their local councils have been at their wits' end not merely for this year, and not merely for the last four years, but certainly for a lot longer period than that.
I very much hope that the Minister will prove not only that he can listen but that he is prepared to listen. I admit that these few simple words written into the Bill will perhaps delay the final coup de grace by two or three weeks, but if at the end of that day the Minister can say, "We have denied no one any opportunity of presenting his case", I believe he will have more credibility in local and central Government relationships.
Baroness Gardner of Parkes: I cannot support this amendment and I should like to explain why. The noble Lords have spoken on this point. Lord Graham has just mentioned how the situation has changed in Hackney. The situation has certainly changed very dramatically in Hackney and very much for the worse due to the extravagance of the authority there. My surgery is in Islington. My catchment area of patients is Hackney. For years I have been treating very large numbers of people from Hackney; and most of my staff, too, come from Hackney. None of them is too
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thrilled about the deterioration that has been going on there. I can tell you that the housing manager appointed immediately post-war did much most effectively and cheaply really to provide housing for people there. The standard of maintenance and care of the housing is not value for money at the present time. The money is being thrown away on other things which the Minister referred to.
I think it is also slightly puzzling that the noble Lord, Lord Graham, has said how important it is that people should have this right to consult before a figure is determined, because, under the proposals in the Bill, it is quite clear that, after the determination is made—and I support the point of view of the Minister that it should be as soon as possible so that people know what sort of budget is being suggested—they immediately have the right under subsection (4) of Clause 3 to reapply for redetermination. Surely it is at that point that they can come foward with any points that they have and any further information and it is at that point that the Minister would consider it.
I did think that in the speech of the noble Lord, Lord Underhill, there was one highly relevant comment, and I think that this should be taken up under some other section, or I hope that the Minister may look at it himself. This was when he referred to the grant which was being funded 75 per cent. by the Home Office.
I think that there is a case for looking separately at, or putting aside, those issues such as urban aid, funding from the European Community, and possibly joint funding with the DHSS, but I am not sure exactly how that works. Where there are cases that have already been through one careful sieve in a Government department, it seems strange that they would be reconsidered and brought back into a total. I fear that we might lose those items and local authorities might not apply for them if they had to be taken into their total. But I do not think that this amendment is the place for that point to be considered, and I oppose it.
Lord Spens: I have listened very carefully to the two noble Lords who have spoken from the Opposition Front Bench, the noble Lords, Lord Underhill and Lord Graham. I do not think either has mentioned the body of ratepayers who have to pay more than 40 per cent. of the total rates; namely, the business ratepayers. They talked a lot about consultation, but there never has been consultation with the business community. Until that happens, I cannot see why we should support an amendment of this kind.
Lord Campbell of Alloway: May one for a brief moment leave Hackney aside and seek to come to grips with the principle of this amendment. There are two parts. There is the part which seeks to enjoin consultation, and the other part which seeks to enjoin the taking into account of representations. Surely there is a case for consultation. There is a case, as a matter of due and orderly administration, that there should be consultation and that this should be brought into the text of the Bill. With the greatest respect to my noble friend the Minister, the point that he takes on redetermination on Clause 4—I shall not trespass on your Lordships' time—perhaps when one looks at it

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does not quite meet the point on consultation, or the principle.
But I would submit that the other facet of the amendment is wholly unacceptable. It is difficult to understand what,
"taking into account any representations"
means, or could mean, in terms of any concept of legal enforcement. It would not be useful to seek to encumber a statute with mere words of exhortation.
Although for those brief reasons—I hope that they are brief—I oppose this amendment, I respectfully ask that the Government might perhaps think again on the important issue of consultation at the first stage.
3.23 p.m.
Lord Bellwin: We have a long, long way to go through this Committee stage. I do not want to make long speeches, if I can avoid them, or to keep coming back to an issue. One is tempted to talk of what really are Second Reading matters. I say only this to my noble friend Lord Campbell of Alloway about consultation. I think that this point will come up again and again. We should bear in mind just what we are talking about. We are talking about authorities in this range of possible selection which are spending far, far above any other comparable authority. No one can even begin to say that they have no idea that they might be concerned.
What level does one set for what is reasonable? Most authorities spend at or round about their GRE levels. Let us take that as one criterion. Are we talking about authorities that spend 5, 10, 15 or 20 per cent. above that level? Where do we draw the line? Do we go on to 30, 40, 50, 60, 70, 80 or 90 per cent. above? Yes, there are authorities which are that much above. Is it really suggested that they have no idea and that they must have special consultation because it is a surprise? They know very well, and have known for years, what has been going on and what it is all about.
I tell your Lordships' Committee that many Labour-controlled authorities around the country resent the fact that those authorities have brought about the present situation, and the whole of local government is now involved because of that. Let us not assume that we are talking about pure and innocent authorites which surprisingly find themselves in this area. If you come to equity, you come with clean hands. Here there are no clean hands.
There will be the opportunity for these authorities to make known their situation and to give reasons why they need special alleviation or allowance. I think that that is right, and I am all for it. That is what the legislation is all about. It is about 12 or 20 out of 430-odd authorities. That is the whole story. I could go on. I could talk more about Hackney. I have a lot of information in my head about Hackney and other authorities, but I do not think that it would add to this debate. I fear that I can go no further.
Lord Underhill: I am disappointed with the Minister's reply. He went beyond his normally generous language when he talked about coming with clean hands. I shall put that down to the heat at present. The Minister says that we are talking about
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only 12 to 20 authorities, yet he talks of considerable delay. If he was on one of the authorities, surely he would want to be consulted before the total expenditure figure was fixed.
The noble Lord the Minister talked about determination. We are not talking about designation. I lost on designation. We are not talking about the authorities to be designated. We are talking about fixing the total level of expenditure for authority X. I am asking that authority X should be brought into consultation before the figure is determined. The very fact of the difference of opinion on Hackney shows that that is necessary. Surely it is far better to have determination by joint consultation at the start, than to have to go through a redetermination later on. The Minister talks about delay, but redetermination would involve as much of a hold-up as would determination at the outset. Therefore that argument falls completely to the ground.
I, too, could take up other points on Hackney. I dealt with only one page. I have others. I dealt with it only to show this point. The reply on Second Reading seemed to be devastating, but when we get the other side of the picture we see that there is a case to put. I want the authority to have the chance to put that case. It has not had that chance.
As my noble friend, Lord Graham, made quite clear, this amendment is to try to get a sense of balance into the matter. We should not assume right at the start that a certain authority is a rogue authority. It has been designated. Now let us have a look at it, talk to the authority, and see just what should be its expenditure level. That seems to be fair and equitable. It would give confidence to the local authorities.
I do not think that it would be a good thing to divide the Committee on the first amendment, though a very important principle is involved. We shall beg leave to withdraw the amendment, and look carefully at what the Minister has said. I am certain that he must realise that there is justice in what we are putting forward. In the Minister's own words, we are talking about only 12 to 20 authorities. Let us consult them first, before we fix their total expenditure level. Strangely enough, Whitehall may be wrong. It may have its facts wrong, and consultation with the people in the area would help. But we shall look at what the Minister has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Stedman Baroness Stedman moved Amendment No. 36:
Page 3, line 21, after ("expenditure") insert ("excluding expenditure which by virtue of section 8(4) of the Local Government Finance Act 1982 is to be disregarded for the purpose of section 59(6)(cc) of the Local Government, Planning and Land Act 1980 and section 8(3)(c) of the said Act of 1982").
The noble Baroness said: This amendment, if accepted, would ensure that any expenditure for which the Secretary of State decides not to penalise a local authority under the targets and the penalties is also left out of account when determining the level of expenditure under rate limitation.
In the Local Government Finance Act 1982 Parliament recognised that it would not be fair to penalise a local authority for incurring certain

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expenditure such as that resulting from an emergency or a hard winter, or unavoidable expenditure which could not have been foreseen, such as large increases in police pay or expenditure on items like civil defence carried out at the behest of the Government. Under that Act the Secretary of State has power to "disregard", so that when he is calculating the total expenditure for comparison with target certain expenditure of the sort I have detailed is not taken into account—is disregarded.
The powers have not been readily used, and the disregards have only been granted for increases in police pay over and above the amount built into the RSG settlement; and increases in urban programme expenditure, but only on those projects which grant is still being paid. This causes problems for non-partnership authorities and for partnership authorities when schemes become time expired. The scheme then becomes reckonable for penalty. Increases in the joint finance schemes with the National Health Service are only disregarded when the National Health Service contributes; so when their funding ceases, then that scheme becomes liable for penalty.
In the present tight financial situation many authorities are becoming less and less eager to enter into either urban programme or joint financing commitments. Disregards have been requested for 1983-84 for many items of expenditure, and I have been given a list of some 45 requests. They all have some merit; but we are not trying to extend the categories for disregard, and this is not a wrecking amendment. What we are seeking to ensure is that there is some consistency in the Government's attitude to local government finance. All we are asking is that if the Secretary of State has exercised his discretion and has said that some items of expenditure should not count for penalties, then those same items of expenditure should not count for rate limitation. I beg to move.
Lord Broxbourne: I am sure that the Committee will have derived great aesthetic enjoyment from the little gem of English prose which this amendment characterises. I would think that it has also provoked a considerable use of the wet towel over the weekend by those of your Lordships who have found it necessary or expedient to understand the amendment and what it seeks to do. With respect to the noble Baroness, there is of course an error on the face of the amendment, which refers to Section 59(b)(cc). That should of course be Section 59(6)(cc); there is no (b)(cc).
If I may say so, there is another criticism of the form of the amendment and its language. It would be a classic case of legislation by reference if this were put on the statute book, and I think all right-thinking people, whatever their political persuasions, depreci-ate the use of legislation by reference. I fully concede to the noble Baroness that to some extent it is imposed upon her in this context by the interrelationship of the 1982 and 1980 Acts. I cannot think that Parliament can really claim much credit for having gone thus far in putting those two Acts in that language on the statute book.
As I understand the effect of the statute law which this is intended to amend, subsection (1) of Section 59
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of the 1980 Act gives the Secretary of State a power to vary the amount of block grant payable. But subsection (5)(b) of that section limits the exercise of that power to the purposes specified in subsection (6). There is further provision in regard to those purposes in Section 8 of the Local Government Finance Act 1982, both by way of a new paragraph (cc) for Section 59, referred to in the noble Baroness's amendment, and also Section 8(3)(c), which I am sure your Lordships have digested. Subsection (4) of Section 8 is the one on which the noble Baroness seeks to build her amendment. That is the subsection which provides for the possibility of disregards. It is that provision which Amendment No. 36 seeks to apply and enlarge.
But I want respectfully to query whether the language really is correct. The language of the amendment reads, "is to be disregarded"; but there is in fact no statutory prescription of disregard in the 1980 and 1982 Acts. What subsection (4) of Section 8 does is to give a discretionary power of disregard. I am glad to see my noble friend Lord Renton nod in assent; that reinforces me in my view on this difficult matter. That subsection gives a discretionary power of disregard to the Secretary of State if he is in receipt of representations as specified in that subsection. But that is all; there is no statutory provision for disregard, as would be thought by anybody reading and comprehending Amendment No. 36.
It would therefore seem to me—at first blush, at any rate—that the language of Amendment No. 36 is not appropriate and that it would not make a desirable addition to our statute book, quite apart from its complex terms and legislation by reference. Of course, I may well be wrong in this as in many other things, and perhaps more probably in this than in most things because, as Sherlock Holmes would have said,
"These are deep waters, my dear Watson",
and it is very easy to flounder in them. But that is as I see it, and that is as I put it to the Committee. I will await the explanations and judgment of my noble friend the Minister and be guided then by what he has to say.
Baroness Birk: I rise to support the amendment in the name of the noble Baroness, Lady Stedman. Although the noble Lord, Lord Broxboume, may be right on some of the points he has made, as far as the wording of the amendment is concerned I do not like legislation by reference any more than he does. We had a number of exchanges over that, in which the noble and learned Lord, Lord Simon of Glaisdale, took part, on the Housing Bill. Nevertheless, I think the aim of this amendment is of extreme importance. Following this amendment we have a series of amendments dealing with rather more specific disregards, covering voluntary organisations and statutory duties, health and so on. Further on there is one in the name of the noble Viscount, Lord Ridley, on law and order, on the police. This amendment, which sets the whole series up, is of very great importance.
I think we should look at it and at what it means and what it sets out to do, and not at this moment necessarily at the drafting and at the small corrections which the noble Lord made, which I am sure he would

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agree can all be altered later. But the main point, surely, is that the precedent has been set in legislation which is currently on the statute book. Therefore, all that is being asked in this amendment is that there should be some consistency. The Minister may well say that of course the Secretary of State will be consistent; but this piece of legislation is fraught with instances where we are being told that of course the Secretary of State will do things in a particular way and that of course the Secretary of State will take account of particular details, whereas surely the truth of the matter is that the Secretary of State has a totally free hand if the words of the legislation are considered. As I am sure the noble Lord, Lord Broxbourne, will agree, in the end it comes down to the fact that only the words on the face of the Bill, and not what has been discussed very reasonably, and recorded in Hansard, will count when any of these decisions have to come before a court. With respect, while promoting legislation Ministers have in the past given assurances that have either been quickly forgotten, or largely delayed when it has come to implementation. The more that we progress through the clauses of the Bill, the more discretion is accorded to the Secretary of State and the more demands are placed on local authorities. The amendment at least places some form of accountability and consistency upon the Secretary of State.
The noble Lord, Lord Broxbourne, drew attention to the local government Act to which reference is made in the amendment and the disregards that have been within discretionary power. Expenditure on which disregards have been requested for 1983–84 covers 45 items, including the urban programme and urban development grant spending, the residual costs of the housing benefit scheme, expenditure on joint finance schemes with health authorities, the cost of repairing storm and flood damage, the increased cost of the 1982 police pay award, all additional expenditure on MSC schemes, the cost of initiatives taken under the Race Relations Act, and expenditure on art gallery and library services. Those are just a handful of items on a list with which I shall not tire your Lordships' Committee.
The noble Baroness, in moving the amendment, was absolutely right when she stressed the point that it is designed to ensure that any expenditure for which the Secretary of State decides not to penalise a local authority under targets and penalties is also left out of account by the Secretary of State when determining the level of spending under a rate limitation regime. I cannot believe, as I am sure the noble Lord who objected to the amendment cannot believe, that it is not possible, or not within the capabilities of the parliamentary draftsmen, to draft an amendment that deals with the very point that we are considering, to make sure that the disregards are taken account of and spelt out.
Lord Renton: In speaking for the first time on this Bill, may I say plainly that I am fully in support of it. However, having said that, I have a good deal of sympathy with the case put by the noble Baroness, Lady Stedman. I have sympathy with her on two grounds. The first ground is that the method that she
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felt obliged to choose involved the most appalling legislation by reference, as my noble friend, Lord Broxbourne, has so lucidly pointed out. I do not think that the Government could or should conceivably accept the amendment as it stands.
I have broad sympathy with the noble Baroness on another ground, which arises from the fact that she and I are both ratepayers in the county of Cambridgeshire—a county that is increasing its population year by year, and has been doing so for some years, at a rate 10 times faster than the national average. That is not entirely due to a high local birth rate, although the birth rate is high. It is due mainly to the service to the nation that Cambridgeshire renders by accepting town development and bringing in people who live in more crowded conditions elsewhere, including people from the areas of authorities where the rates have been exceptionally high. Cambridgeshire is in a very difficult position. I hope that the Government will recognise this and do something about it. Clause 3 is the right place at which to discuss the matter. The amendment gives us a proper opportunity for doing so.
I should like briefly to explain the position that arises. Cambridgeshire spends less each year, and has done so for several years, than the Government's estimate of its needs. Its needs are largely based on the ever-increasing population. But, strangely enough, Cambridgeshire spends more than the Government target. It is therefore theoretically an overspender and becomes eligible to be clobbered by a very heavy penalty, running into millions of pounds.
I do not think it is right for the Government to ignore this situation. I hope that we shall hear from my noble friend Lord Bellwin that the situation is not ignored and that the Government will be able to give assurances that a county with such problems, which has behaved so well financially, will most certainly have its needs taken into consideration when the Secretary of State is exercising the very flexible power given to him, and to him alone, and without any trammel on the exercise of that power, under Clause 3(2). Therefore, though I support my noble friend Lord Bellwin in resisting the amendment on technical grounds, I hope that he will show sympathy towards its motives.
Lord Bellwin: As the noble Baroness, Lady Birk, said, this amendment is the first of a whole series of amendments, all of which seek to provide special arrangements within the rate limitation system for spending by a designated authority on particular types of services. Specifically, Amendment No. 36 seeks to carry forward into rate limitation the procedures for dealing with exceptional circumstances in the target and holdback system. Before dealing with the detailed topic within the amendment itself, because this is the first of a series of amendments and because I am anxious not to repeat the same thing each time, I think that it would be appropriate if I were to say a few words about the basic concept behind all these amendments providing that certain types of expenditure should be protected in some sense from rate limitation.
The key point is that rate limitation starts from the overall spending of an authority. The rate limit that

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will be set is calculated from that overall spending level. But, within that overall amount, it will remain the responsibility of the local authority, as is right and proper, to decide its own priorities. The rate support grant, so far as the authority is concerned, is unhypothecated revenue. It is most important that that principle should be undisturbed. But if certain types of spending, such as that on voluntary services, family services, or whatever, were to be excluded from consideration, that would simply mean that expenditure for that purpose was not being counted in setting the authority's rate limit. In fact, there would be no better way of preventing spending on precisely those services that we are anxious to protect. I have to say therefore that the whole concept behind this series of amendments is fundamentally misconceived.
The Government, like those moving the amendments, are most anxious to preserve the services provided in particular to the most vulnerable sections of the community. But the Government also believe strongly in the right of local authorities to make their own decisions on policy priorities. The posters and the advertisements that talk about "Whitehall deciding" and all that are really the big lie. The whole purpose of both an unhypothecated rate support grant and all the proposals that will continue within the Bill is that authorities will have to make their own decisions. But from the time that the Bill comes on to the statute book this selected number of authorities, 12 to 20 out of the 438 or so, will have to contain the totality of their spending in exactly the same way as the other 400-odd authorities now do; and most of them try very hard.
It has been argued that these authorities will cut services for the most vulnerable people in the community. When we were discussing the last amendment I illustrated the enormous extent to which, by comparison, these authorities are the highest of all the spenders. If we were looking into detail I would certainly want to give the noble Lord, Lord Underhill, many instances where nobody really concerned about deprivation, about the needs of the most needy in the community, could justify spending vast sums of money on those particular things, including the political advisers and the advertising. What kind of priority is that for people who really have need?
The fact is that at the same time these authorities have special and greater needs than many others; that is why the GREs allow for that. I explained in our last debate that the average personal social services GRE in Hackney—I do not know why we always seem to come back to Hackney—happens to be four times greater than the national average or the average even for similar authorities. It is right that it should be so; the need is there. But the GRE makes allowance for that and it is only when we get enormously, excessively above that that we suddenly find ourselves with the problem of an authority likely, although not certain, to be selected.
It is important to get right the setting for this whole series of amendments on this topic. The decision for specific spending will be that of the authority itself. I maintain that by definition these are the authorities who have the greatest scope to save great sums of money if they really wanted to do so. But the will has
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to be there and it involves being willing to look at what others can do and all the rest that goes with it. I am very grateful to my noble friend Lord Broxbourne, and I compliment him on having followed through the very difficult text of the 1980 and 1982 Acts. I accept the basic argument which he puts forward in criticising the amendment.
But this particular amendment, saving what my noble friend said, seeks to carry forward into rate limitation the procedures for dealing with exceptional circumstances in the target and hold-back system. In my view it is unnecessary to do so because rate limitation already incorporates its own arrangement —the derogation system which will allow expenditure levels to be redetermined after the council has made a case based on its own particular circumstances. As my noble friend Lord Broxbourne so cogently pointed out, the expenditure disregards provided for in the 1982 Act are more broad-brush and require to be based on principles applying to all authorities. Therefore, they cannot respond to the particular needs of an authority in the same way as will be available under Clause 3.
As I have said, it is also important that the expenditure level set should reflect fully the expenditure to be financed in the coming year because it will be a key ingredient in the determination of the rate limit. If the expenditure level is understated by an unknown amount for disregards this could mean that the council might run into financial difficulty at a later stage. Of course, expenditure disregards are settled fairly late in the year, usually with the RSG settlement in December, and even then the Secretary of State must keep his mind open on the subject until the final report. Therefore, there could be no certainty about the expenditure level until quite late, which would not help a council trying to make the necessary economies.
My noble friend Lord Renton talked about Cambridgeshire. He will know that the name is deeply engraved on my mind. I take the points he makes. Basically he was referring to their actual settlement under the RSG. There are some other shire counties in a similar position. My right honourable friend the Secretary of State said in another place that we have to find ways to take the problems into account, and intend so to do. I have no hesitation at all in giving that assurance to my noble friend. It is a repetition of what was said in another place.
It is true that an authority like that tries very hard. I have personally looked into the nuts and bolts of that, so I concede that point. Yet we said all along that rate limitation and all that flows with it will help that situation because the whole of the RSG settlement is about the distribution of a finite sum of money. When there are gainers there have to be losers, but it is a question of trying to distribute equitably some £12 billion or £13 billion among some 430-odd authorities so as to take account of their needs, and to equalise. It is not an easy task and it is one that requires, and will always require, constant revision to achieve equity.
I cannot accept the amendment. I say so not just on the grounds of its technical failures, as have been pointed out—I suspect the noble Baroness would not quarrel with that—but because of the underlying principles which flow from it.
3.56 p.m.
Lord Sandford: I should like to comment on what my noble friend has just said before the noble Baroness, Lady Stedman, decides how she wants to wind up this debate. I hope she will not press the amendment because I think it could be drafted better to achieve the purpose she has in mind. I agree with my noble friend Lord Broxbourne and my noble friend Lord Renton that the noble Baroness has a point of some substance and I am afraid 1 do not think my noble friend on the Front Bench has met it.
We are about to deal with a whole series of amendments concerned with various special factors which apply to one or more authorities and are disregarded when it comes to the assessment by reference to GREA or target and to the rate support grant. The argument for disregarding them again in this particular situation with which Clause 3 deals is a very strong one indeed. In so far as the Minister's right honourable friend in another place has already given an indication that he will look into some aspects of the kind of matter which concerns Cambridgeshire, Essex and other counties which find themselves well below GREA but a long way above target, I think the Minister ought to give an offer to the Committee to reconsider the same matter in this context as well. My noble friend speaks with some confidence as though he had to hand, in GREA and target, instruments, mechanisms of considerable precision with which he can distinguish—
Lord Graham of Edmonton: That is right.
Lord Sandford:—clearly and without any question the extravagant overspenders from all the rest. I beg leave to differ with him on that. If that were so, if that could be done, by now we should not be being told about 12 or 20 authorities who might or might not be designated; we should be told quite clearly who they are. We know they include the GLC, almost certainly Hackney, and possibly Basildon, but that is about as far as it goes. As to the rest, there is no great certainty as to which they are because these two instruments of GREA and target have been shown over and over again, ever since they were introduced, to be grossly imperfect. They were imperfect for the purposes for which they were introduced. They are now being used for quite different purposes, and they are even more imperfect.
The only way of getting them into any sort of shape for the purposes for which they are going to be needed is by the application of a whole range of disregards for quite new factors which are always coming up. One which my noble friend Lord Ridley is certain to mention in a moment is the cost of providing the constabulary to deal with the miners' pickets. That has got to be taken into account. GREA and target do not begin to take them into account. The same thing goes on all the time. There is no perfection whatever in either GREA or target.
I have here a list of a whole range of authorities, some of which are miles over GREA and on target while others are miles over target and on GREA. It simply will not do as a precise instrument by which this legislation can be implemented. I think that it
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would be better for my noble friend to say that he recognises their imperfections in this particular context, and that he will look at this matter in the same way as his right honourable friend has indicated that he will look at other situations of this kind.
Lord Bellwin: I should like to say a brief word about this point. My noble friend is very wrong. If he is right to talk about the imprecision of GREA by itself in relation to its assessment for the rate support grant settlement, then he has an argument with which personally I have expressed sympathy. But let us remember what we are talking about. We are not talking about a difference of 1 per cent. or 2 per cent. more or less as between one authority and another as regards its GREA. We are talking about authorities whose spending is so far above that of all the other authorities. When we talk of excessive spenders we are referring to 12 to 20 authorities. How imprecise, or how precise, does my noble friend want us to be? Five per cent. for these purposes I concede; 10 per cent. I concede; 15 per cent. I would concede. But how much more? We could have 20 per cent. We can go on and on. We could get into the region of 60 per cent., 70 per cent., 80 per cent. and 90 per cent. How precise do we need to be? Indeed, that applies only to the GREAs.
We have said that that is not the only factor that will apply here. In addition, we want to look at targets. What do we want to set as the "target percentage above"? Again we begin to talk about the handful of authorities that are so extreme. There is no need to talk about precision or imprecision in that context at all. Those authorities are far away from anybody else. The very authorities about which my noble friend Lord Renton is so concerned are the very authorities that are in need of protection from the effects of the actions of the few authorities that are streets away from everybody else. The whole purpose of this Rates Bill is to give protection to many of the authorities. That is why I am so sad about the misunderstanding that there is about the Bill.
One does not want to go on and on, because we have so many matters to debate, but I must say that I disagree. The disregards that are included here are a fundamental part of the proposals that the Government are putting forward in this particular legislation.
Lord Sandford: I should just like to round off this matter. We must not go on too long on this particular point. But if my noble friend feels as strongly as he does, would it not be very simple to spell out the principles by which we can determine these 12 or 20 authorities, and have their names, and then we should know where we stood? That is the way in which to justify the argument that my noble friend is putting forward.
Viscount Ridley: Did not my noble friend put forward the best argument yet—much better than I did last week—for capping only 20 authorities? He seemed to put the case rather well.
Lord Prys-Davies: Whether it is 10 per cent., 15 per cent., 80 per cent. or 90 per cent., we can become extremely emotional about the matter. We must have

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regard to the real needs of the communities. I agree very much with what has been said by the last two speakers on the other side of the Committee. Can a satisfactory total expenditure, within the meaning of this Bill, be calculated at all? That must depend upon whether objective criteria of need can be drawn up and whether, having regard to the words of my noble friend who moved the amendment, they retain a sufficient degree of flexibility to survive the short-term fluctuations. It seems to me that the Government have not demonstrated that these two requirements are met by the Bill.
It also seems to me, judging from the role played by the concept of need in the calculation of rate support grant, that the concept of need is not a very precise concept, whereas the Minister's reply appeared to assume that it is a precise concept. Indeed, according to the Department of the Environment in its evidence to the Layfield Committee,
"Assessments of need often involve subjective judgments; many aspects of need cannot be measured; indicators may sometimes be misleading and an average can conceal wide local variations. Variations in the quantity and quality of the available stock of social and environmental investment pose a particular problem".
Lord Bellwin: Will the noble Lord give way? Would he acknowledge that the Layfield Report came out in 1976 and that that was long before there was such a thing as block grant, which introduced 63 factors which are set out? In those days the criteria involved the multiple regression analysis. What applied in 1976 was certainly not the same as what applies under the block grant today.
Lord Prys-Davies: Of course one must accept that the Layfield Committee Report was in 1976. But the point I was trying to make was that the varying expenditure needs of individual authorities cannot all be identified objectively or measured precisely. It can never be shown that the maximum rates of each authority—to use the words of the Minister—"are completely equitable". Therefore, there is reason to believe that the determination of the maximum grant by the Secretary of State will be no less subjective than it was pre-1976.
Baroness Stedman: I have listened to the reply of the noble Lord the Minister and to other noble Lords who have spoken. I am delighted that the noble Lord, Lord Renton, has now joined us in the Cambridgeshire lobby to try to get a better deal for our county. But this amendment was not put forward as special pleading for Cambridgeshire. It was put forward in the hope that we could have some sense and some consistency in legislation, so that factors that are disregarded for one part of the rates should continue to be disregarded now that we are setting up this new procedure. That seems to me to be a fairly logical suggestion, even though perhaps I have not used quite the right wording—but that is something of which most of us on the Opposition Benches are guilty when we try to put down rather complicated amendments.
I am not asking for the "disregards" to be widened unreasonably. I am asking only that, on the grounds on which they have been received up to now, they shall at least be taken into account and shall be allowed. Where they are allowed for penalties and targets I am
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asking that they should be disregarded for those purposes as well. The Minister says that GRE allows for all these things within the financial make-up of a county. But again I must refer back to Cambridgeshire. If we had spent up to our GRE, it would have cost Cambridgeshire another £11 million. It is more than £1 million over target, having cut back as far as it can. There is nothing more to cut and it is now liable for rate capping. While we have these silly things called targets and GREs, which do not bear any real relationships, there is danger for the counties. We cannot accept what the noble Lord's colleague in another place has offered; namely, jam tomorrow—when we have got the rate capping right, we can give something out to the shire counties. That may, or may not, come about.
We shall later come to the question of redetermination and we shall want to know much more about the principles that will be at stake when redetermination is considered. At this stage I should like to withdraw the amendment because it is technically deficient and because of what has been said. Perhaps we could get together between now and the next stage, and perhaps the Minister could offer us some help through his officials, so that we can understand what he is seeking in order to help these counties and he can understand what we are seeking; then perhaps we, or he, can come forward with an amendment at the next stage. But for now I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.10p.m.
Lord Ennals Lord Ennals moved Amendment No. 37:
Page 3, line 21, after ("expenditure") insert ("excluding any expenditure which is, or is proposed to be, incurred by a designated authority in the making of grants or loans to charities and bodies whose activities are carried on otherwise than for profit, for purposes which, in the opinion of that authority, are calculated to facilitate, or be conducive or incidental to, the discharge of any of that authority's functions").
The noble Lord said: It was helpful of the noble Lord, Lord Bellwin, to have touched upon a number of the issues concerning exceptions, which we shall examine. I deeply regretted what he said because he makes my task more difficult, for I aim not only to persuade Members on both sides of the Committee but also to persuade the Minister himself. He has been unbending on many other issues, and I hope that that will not be the case here.
In this amendment we are talking about the role of voluntary organisations in relation to our local authority services. We are talking about voluntary organisations with which Members in all parts of your Lordships' Committee are themselves actually involved. Certainly I am involved in four voluntary organisations in the social services field. I believe that not only is there a feeling among many noble Lords present that the position of the voluntary organisations—and of course there are limitations—should be protected, but that the voluntary organisations should be protected in the interests of the people whom they serve, and that the widespread concern which now exists across the country by service-providing voluntary organisations

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should be ended, and could be ended if the noble Lord the Minister were to accept this amendment.
What kind of organisations are we talking about in this amendment? We have tried to draft the amendment very carefully. If the noble Lord says that it should be drafted in another way, I should be most interested to hear it. However, the amendment does not aim to exclude grants to all voluntary organisations; it aims to exclude grants to voluntary organisations which are made by local authorities in the discharge of any of the authorities' functions. We are talking about bodies such as the Spastics Society; MENCAP—the Royal Society for Mentally Handicapped Children and Adults—MIND; the National Association for Mental Health; Age Concern; the citizens advice bureaux; the Royal National Institute for the Blind; NACRO; volunteer bureaux of one sort or another; community service volunteers, and family service units. Those are organisations which are carrying out services partly for social service departments and partly in terms of other tasks for which a local authority has a responsibility.
I am certain that many noble Lords in all parts of this Committee have received representations on this issue. I know that the noble Lord, Lord Bellwin, referred to this matter in his Second Reading speech in a very short reference, which I did not think actually dealt with the problem at all. First, why are voluntary organisations worried about the effects of this Bill, and this part of the Bill, upon them? I want to give a number of reasons. Voluntary organisations fear that those local authorities which face rate limitation and consequent cuts in expenditure—and sometimes very substantial cuts—will give priority to their statutory obligations over their discretionary tasks. I do not want to enter into the argument as to whether or not they should do that. Of course statutory obligations have to be fulfilled. They fear that those local authorities which face rate limitations will give priority to their directly employed staff, to whom they have a legal and a moral obligation. One can understand that point of view.
Further, many of these voluntary organisations deploy individual volunteers, supported and organised by a very small number of paid workers. The citizens advice bureaux is a very good example of that, and so too is Age Concern. Voluntary organisations fear that even relatively small cuts in grants may undermine the necessary support for large numbers of volunteers working in the community among the most needy of the population.
As your Lordships will understand, many projects run by voluntary organisations are funded from a number of different sources, including local authorities. Voluntary organisations fear that, if the local authority contribution is withdrawn or reduced as a result of rate limitation, this will lead to a withdrawal of, or reduction in, other contributions. I have no doubt that that is right. Although, as the Minister has said, rate limitation may apply to a relatively small number of authorities, they are frequently in parts of the country that suffer the highest degree of deprivation. As a result, there is a concentration of services provided by voluntary
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organisations in those areas, and high-spending authorities often contribute very generously to those services provided for them by voluntary organisations. Perhaps I may give the example of Lambeth, which spends 47 per cent. of its urban programme allocation on voluntary projects, which is more than any other partnership or programme authority.
The final reason is as follows. There is a particular problem in the GLC and the metro-county areas, where voluntary organisations will be encouraged to look to the boroughs or districts for alternative funding after they are abolished, if that threatened legislation goes through another place and your Lordships' House. They will then look to the boroughs, and the boroughs will not be able to meet the needs if the legislation goes through without changes. One could think of many examples, and they are not just in the London area.
The Newcastle-upon-Tyne Social Services Committee currently pays to local voluntary organisations over £1·5 million a year. I have visited Newcastle and seen the way in which those voluntary organisations are magnificently serving the needs of the community more effectively than if the local authority did the work itself. One of the great arguments for voluntary organisations is that they are often able to perform a service in a more human, more understanding and more comprehensive way than can be provided by the statutory local authority itself. Grants from Newcastle include £112,000 to the Newcastle Council of Voluntary Service, with which I have had a great deal of contact in the handling of Vietnamese refugees in that part of the country; £55,000 to the citizens advice bureaux; £79,000 to the Newcastle family service unit; £48,000 to the Council for the Disabled; and £18,000 for workshops for the disabled. One could go through this list in extenso.
I want to say a few additional words about the citizens advice bureaux. I believe that they meet a very real need in our community. As a fairly recent former Member of Parliament, I know the tremendous value of the citizens bureau in Norwich, which is run largely by one full-time person and a whole team of volunteers. If one takes away the one full-time person, what can the volunteers do? The citizens advice bureau performs its task economically and efficiently.
The report of the Lovelock Review, which was published only a few months ago, said:
"The persistence of relatively high levels of unemployment and tight controls on public expenditure mean that the demand for the service will probably continue to grow".
Can anyone believe that that is not true?
"These demands are already going unmet in some parts of the country, and are being inadequately met in others".
The Lovelock Report continues:
"The main reason for these deficiencies… is the inadequate funding of the service at local level".
I believe that this is an argument of tremendous importance. If one looks further at the situation of the citizens advice bureaux, one sees that in 1983–84 the National Association of Citizens Advice Bureaux received £5.7 million from the Department of Trade and Industry—and all credit to them—to fund central and area support services for 900 citizens advice bureaux up and down the country. But local

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authorities are responsible for a great part of the funding of the citizens advice bureaux. If any noble Lords think that, even with the extra million for which the Lovelock Report asks, the citizens advice bureaux would somehow or other be protected, they really do not understand the situation.
One final quotation from the Lovelock Committee's report:
"We are in no doubt that the level of funding to bureaux needs to be raised. This is the level at which advice is delivered and where extra funds can most usefully be deployed".
The demands upon the bureaux all over the country, particularly in areas of greatest need, are steadily increasing. It would be a tragedy if the advice that they are able to give were in these designated areas to be reduced, because often they are the areas where the need is greatest.
At risk too are many local projects, or organisations, receiving funding from a variety of sources. For example, as was said by the noble Baroness, Lady Stedman, the urban programme projects are funded 25 per cent. by local government and 75 per cent. by the Department of the Environment. The DoE contribution, which amounts in England and Wales to £38.4 million, is contingent upon the local authority contribution. If the local authority contribution is not there the grant from the Department of the Environment does not come, and a whole list of vital projects for the elderly, for the mentally frail and mentally ill, and the workshops, falls to the ground.
I would submit in conclusion that this is an issue which strikes at the heart of our British society. Nowhere else in Europe have we a structure of voluntary organisations comparable with that in Britain rendering service, by contract with local authorities, to meet the needs that a local authority realises require to be met. Whether the other forms of expenditure are right or not, I am looking at the moment only at the money that is available to assist voluntary organisations, and if that is going to be limited then the whole philosophy of the Government opposite—and I happen to share the philosophy that we should be promoting in our society voluntary effort, promoting individual voluntary activity as well as voluntary organisations—would be undermined. An essential principle which I know the Government espouse, and which on this occasion I agreewith, would be undermined if the Minster were not to accept the amendment that I beg to move.
Lord Seebohm: The noble Lord the Minister has already made clear his attitude to all these disregards, and the noble Lord, Lord Ennals, has said enough in his speech to melt his stony heart, if that organ were in any way soluble, which I doubt. I should nevertheless like to make one or two comments in supporting this amendment which from my long experience in the voluntary sector I think are pertinent. The local authority which has to make considerable reductions in its expenditure will go for the easy targets, and this is obviously an easy target. It will not cause any unemployment among local authority employees. It seems to me that this is probably a great inducement for this to be one of the first things that they would tackle. On the other hand, it is important to realise that this particular expenditure made to the voluntary
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bodies is probably the most cost-effective of all expenditure made by local authorities.
It is also important to consider unemployment at the present time. The voluntary bodies are at the moment engaged in making plans—and in some cases have already made plans—to find some useful and important activity for the unemployed. This is something that is going to grow, and it can only be done by more finance. I hope that this will be given some serious consideration, because this is one of the sectors where we can make some impact, not in curing unemployment but in finding some useful and meaningful activity for those who are necessarily and unfortunately unemployed.
Naturally all local authorities, whether they are the good spenders or the bad spenders, will look carefully at the grants they make to voluntary bodies. But what I ask people to think about is that the amount that is given to the local bodies, the voluntary bodies, must be given on a rational assessment and not simply to support expenditure on irrational spending.
4.25 p.m.
Lord Beloff: In rising to oppose this amendment I hope that I shall not be thought to be wanting in sympathy for the various voluntary bodies, particu-larly the charities, to which the noble Lord, Lord Ennals, referred, in the admirable and indeed indispensable work which they are doing in our community. The trouble about this whole group of amendments is that it illustrates what has been a problem in dealing with the finance of local government in this Bill, as no doubt will be the case on other occasions, which is to say the degree of confusion that has arisen in recent years about the respective roles of national and local government.
To some extent it works both ways. Because of the organisation of our affairs national government occasionally impose upon local ratepayers burdens that arise wholly from the need to implement a national policy. The ratepayers of Thames Valley, of whom I am one, clearly feel somewhat aggrieved—and will go on feeling somewhat aggrieved—by the excessive police expenditure necessitated by the activities of the misguided ladies of Greenham Common.
There are other occasions—and I think that Amendment 40A obviously has these in mind—where it is pure chance that expenditure occasioned by a question of national policy happens to fall upon the ratepayers of a single local authority. But it is equally true—and this amendment illustrates this—that local government itself trespasses, in its view of what it may spend money upon, on matters which are wholly, and should be wholly, the province of central government. Otherwise I find it difficult to understand why the wording of this amendment does not confine itself to grants and loans to charities—perhaps that could be spelled out a little as to the kind of charities that would be relevant—but includes
"bodies whose activities are carried on otherwise than for profit, for purposes which, in the opinion of that authority, are calculated to facilitate, or be conducive or incidental to, the discharge of any of that authority's functions".
If one looks at some of the grants to voluntary bodies other than charities, made by the GLC or the

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Borough of Camden, one finds all sorts of purposes: changes in our defence policy; changes in our relations with the Irish Republic, or its supporters in the North; all sorts of areas which are not, in the eyes of most people, part of the responsibilities or duties of local government. Local government can do very little in the way of direct expenditure to deal with these matters, but it gives grants to bodies which, it argues, facilitate purposes which in its view are in the interests of the people whom it represents.
It is the breadth of this amendment which leads one to the reflection that, even if it were desirable to do something in order to ensure that these great charities can continue to fulfil their functions—and I believe that it may well be desirable—this is certainly not the way to bring that about.
Lord Renton: The noble Lord, Lord Ennals, in eloquently moving this amendment, referred to MENCAP, and I thought that your Lordships' Committee might be interested to know the true position with regard to that body. From the earlier days, when the noble Earl, Lord Longford, was chairman, right up to the time when I became chairman—which I was from 1978 to 1982—we spurned any kind of outside help. We did not receive help from central Government or from local authorities except that, as a charity, we were entitled to rate rebates; and in the context of this amendment your Lordships' Committee should not forget that all charities are entitled to a rebate of their rates. That is a relevant financial factor, and quite a large one, sometimes. Certainly, it would be a very large one in the case of our headquarters, which is in the northern part of the City of London. But when I became chairman in 1978, I found that inflation was our principal enemy, and so for the first time we started to see what help we might obtain from the central Government. At first we got none. The noble Lord, when he was Secretary of State, did not give a penny to MENCAP, but MENCAP last year received over £200,000 from the DHSS and—
Lord Ennals: Will the noble Lord give way? I am most grateful. He said, I think, that at the stage when I was Secretary of State he did not seek a national grant. I am referring in this amendment only to grants by local authorities.
Lord Renton: The noble Lord might be interested to know why we had to seek a national grant. It was because of the inflation that took place during the last part of the 1970s; otherwise, we could not have carried on. One of the reasons I am a keen supporter of this Bill is that I regard it as an essential part of the fight against inflation. Given the choice between the control of inflation and getting some marginal further help through local authorities—if that is the choice, and I am not claiming that it is quite such a stark choice as that, but we must consider that as a possibility—I say that, in order to help us as a major charity, with a turnover of £3 million a year, let us have control of inflation above everything else. Our grant from the DHSS was not the first grant we had had from them since this Government came to power in 1979. The
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rate rebates must also be considered in terms of the help given by local authorities—and we do not get help at. the centre in that way; our branches get some help, but the pattern varies very much. I say that control of inflation is what matters most.
But that is not the only factor that arises on this amendment. The noble Lord was good about saving time, and I do not want to take up too much time, either, but this amendment goes much further than help to charities. It would give help to bodies,
"whose activities are carried on otherwise than for profit, for purposes which, in the opinion of that authority, are calculated to facilitate, or be conducive or incidental to, the discharge of any of that authority's functions".
We know that there are some Left-wing local authorities which are already giving help to bodies which are non-profit-making and which are presuming to do so in the interests of their ratepayers because in their opinion it is right. The CND is one such body. This amendment, of course, would give carte blanche to any local authority to give money to the CND if, in the opinion of the local authority, that was thought to be right. Then, if a local authority thought that it ought to aid its own political party locally to help in the discharge of that authority's functions, help could be given under this amendment to political parties. I do not wish to stretch the imagination of your Lordships too far, but really this amendment is a very wide one indeed.
Baroness Faithfull: I rise to speak about this amendment and, with your Lordships' permission, I should like also to speak to Amendment No. 38, in order to save the time of the Committee. I agree with the spirit in which the noble Lord, Lord Ennals, has spoken, and also with the noble Lord, Lord Seebohm. But I question the wording of the amendment because for different reasons both the noble Lords, Lord Beloff and Lord Renton, have given different reasons as to how these words could be misinterpreted.
It seems to me one must ask oneself what exactly the words mean. Do they mean that one can give to a wide number of voluntary organisations, or are they trying to cut down the number of organisations? In one way it could be interpreted as meaning that they could give only to the voluntary organisations which are helping the local authority with its statutory duties. I am not quite sure what it is that the noble Lord, Lord Ennals, is trying to interpret. If it is to give to voluntary organisations in order to help the local authorities with their statutory duties, then on that argument there will be a number of voluntary organisations which are giving a great service to the community but which will not come under that umbrella. I mention the Samaritans, for instance.
I think that possibly Amendment No. 38, which tries to spell out exactly for which areas voluntary organisations could receive grants, is not as well worded as it might be. But while I support the spirit of the amendment, I cannot see that without further interpretation, it can be implemented.
I should like to make one or two comments. If some voluntary organisations are going to go out of business—and some may, if they are not helped by the local authority—as the noble Lord, Lord Seebohm, has said, we shall lose out in two ways. The local

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authorities will have to spend extra money doing the work that the voluntary organisations are not doing or, alternatively, we shall find ourselves losing an enormous number of people who do voluntary work, as volunteers, organised perhaps by one paid person. Therefore, as the noble Lord, Lord Seebohm, has said, that is cost-effective.
There are many other matters that I could go into. For instance, it does not come within the remit of local authorities' statutory duties to give advice on money, particularly in areas where there is redundancy and in areas where there is the need for money advice centres. That does not come under the statutory duties, but it gives enormous help to the community at very little cost.
I have mentioned the Samaritans, and I should also say that when the noble Lord, Lord Ennals, talks about money from local authorities for the citizens advice bureaux, I am not quite sure whether he is interpreting the clause, on a narrow basis, as fulfilling the statutory duties of the local authority. Under which statutory Act do the citizens advice bureaux fall? I am not quite sure; and therefore I am in some difficulty because, while I want to support Amendment No. 37, I cannot see the interpretation of it being clear to the local authorities one way or the other—either more, or less.
On the other hand, I admit that in Amendment No. 38 we have tried to be specific, and perhaps this has not always been acceptable. However, reverting to Amendment No. 37, while agreeing with the principle I do not agree with the wording of the amendment.
Lord Kilmarnock: The noble Lord, Lord Ennals, wrote to ask me if I would support this amendment. I was abroad at the time and I did not get his letter. I must say that, although I am in complete agreement with the spirit of the amendment (as are many other speakers this afternoon), he has put us in a slight difficulty in the very wide phrase that he uses at the end:
"the discharge of any of that authority's functions".
I am sure that Lord Ennals did not intend this to cover political activities, but as it reads perhaps it could do so. I should have thought that if the noble Lord, Lord Ennals, could give us the assurance that in fact he means the statutory functions and that perhaps this would be the phrase used at a later stage of the Bill, then we should be able to support it. I should have thought also that then the worries of the noble Baroness, Lady Faithfull, that certain bodies which are not covered by statutory obligations—and I think that she mentioned a number of them—would not be covered by this amendment, would be covered by a separate amendment along the lines of No. 38, to which she referred. Personally, I shall listen with the greatest interest to the noble Lord, Lord Ennals, when he comes to wind up to see whether he can clarify the wording.
4.42 p.m.
Baroness Gardner of Parkes: I find this to be one of the most dangerous amendments of any that are before us. I find it is very dangerous because it has been presented in such a charming and eloquent way, and yet it completely conceals the hidden pitfalls which
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really alarm me. I am worried when I read that this will cover any body the activities of which are carried out other than for profit, and when I recall that in the last 10 months the GLC has handed out £47 million mainly to such bodies and that these are not at all the type of voluntary organisations or charities which the noble Lord would have us believe are covered; and that in order to determine that these bodies are in accordance with the discharge of the authority's functions all that is required is a piece of paper handed out with each draft grant that is being offered and that that paper says that it is for the committee to decide if this is in the interests of Londoners. If this is considered by the majority party of that committee to be in the interests of Londoners, nothing else matters and it is accepted by the district auditor and the money is handed out.
We have so often in this Chamber heard of the type of organisation we have in mind: the very many anti-police bodies which have been set up, the extremist political groups, the "gay" groups and the lesbians. I will not go into the names further because we have been through this so many times. Each of those would be covered by this present suggestion. The statement was also made that people like to go to their local boroughs. At the present moment, when you go to your local authority and ask for money they say: "We do not want to lose any element of grant by giving you money, because you may or may not be someone we are entitled to give it to. Take your request to the Greater London Council". There is a management agreement and an agency agreement whereby many of the Labour London boroughs, to save their own skins, refer everything to the Greater London Council, which does the overall handout of money—literally millions of pounds. As I have said, it was £47 million in the last ten months.
The noble Lord, Lord Seebohm, said that a local authority may not choose to fund the voluntary sector. I am absolutely for the voluntary sector, but I think that one argument here is that where the voluntary sector is cost-effective, a reasonable local authority will opt for that funding—and, by that, I mean a voluntary organisation that does not request a 100 per cent. grant. If a local authority feels that, by giving funds to a genuine voluntary organisation, that voluntary organisation is going to multiply those funds and for every £ 1 received from the council they will produce a equal amount, then the output at the end of the work done by that voluntary organisation would be greater than if the work had been done by the council themselves, and I believe they will get the money.
Where it breaks down is where the voluntary organisation is not really voluntary at all. It asks for a 100 per cent. grant and then acts in one way whereas the council might prefer to have acted in another. The GLC, on the other hand, does not approve of true voluntary organisations of the type that I am talking about. Indeed, when there was an application for just £5 per session from the Free Schools Playgroup Association we were told that, as this was the first time, the grant would be made but that never again must anyone apply for so little. In future, grants would be considered only if all the people who worked in the playgroups were being paid full trade union rates. There were no rights for mothers who voluntarily

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wanted to look after their own children. In future, every grant application of this type must come in at the full rate; but that is a different thing.
I really think that this is quite worrying. I think it is set too widely. Every penny that I have seen thrown away in recent years on the Greater London Council would qualify precisely under this amendment. Indeed, if this amendment were accepted I think that the whole rate-capping procedure would be thwarted and the Bill would be a waste of time.
Lord Prys-Davies: I believe the noble Baroness goes too far in her criticism. I support the general thrust of the argument advanced by my noble friend Lord Ennals, but I am mindful also of the reservations which have been raised by the noble Lord, Lord Renton, and the noble Baroness, Lady Faithfull. Of course, it is difficult to determine what is the role of central government and what is the role of the local authorities. I would suggest that in a rough and ready sort of way central government have to determine what should be the minimum standards for groups of the kind for which they stand, as it were, in loco parentis. It seems to me that the local authorities who have evinced an interest in such groups are in a very good position to determine whether those standards are being maintained or increased in their localities.
What worries me is that the method of determining the maximum grant embodies the assumption that the present pattern of expenditure is an accurate reflection of need. In the words of a learned commentator—and many Members of your Lordships' Committee will recognise this—this equation applies sophisticated methods to dubious material because it does not take into account the fact that current expenditure patterns may well not reflect the current needs. Therefore, the formula—and the Minister will correct me if I am wrong—may have restrictive implications because it will imply that existing patterns should be maintained and not increased.
To go back to where I started, I would say that in my experience the voluntary bodies are in the best position to demonstrate that existing expenditure is not necessarily related to need. The local authorities should not be penalised under the terms of this Bill, if it is enacted, to the extent that they have given support to voluntary bodies which have flushed out—and it is a case of flushing out—and accommodated local needs. Therefore, I would go along very much with the thrust of the amendment proposed by my noble friend. But I should have thought that in the last two or three lines it ought to be amended to take account of what the noble Lord, Lord Renton, and the noble Baroness, Lady Faithfull, have said.
Lord Bellwin: May I say straight away—and the noble Lord, Lord Ennals, was fair enough in his presentation of this amendment to make the point himself—that the Government not only have the greatest sympathy with the work of the voluntary sector, but in a practical way have done and are doing much to enable it both to function and to grow in many ways. I am personally very much concerned with the urban programme. I see the programmes of many of the inner city authorities and I have big
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responsibility for adjudicating upon particular applications, so far as the voluntary sector is concerned.
I can assure the noble Lord—though I know from what he said that he does not need an assurance—and the Committee that we take a very relaxed view of this. There are those who would accuse us of taking too relaxed a view about it. There are many projects which some feel should not be supported. We try to be careful, because we have an obligation. Nevertheless, we really are willing to be helpful wherever we can in these areas. I ask your Lordships to remember that it is quite true that those are areas with the greatest needs in the general thrust of things and that we really do support.
The noble Lord was pushing against an open door when he talked about the merits of the organisations to which he referred, although I have to say that my noble friend Lady Gardner touched upon many others with which I would certainly not agree; and I suspect that the noble Lord, Lord Ennals, might not agree about some of those either. But certainly the role played by, and the cost-effectiveness of, the voluntary sector is beyond doubt. To me, the best of all—and the citizens advice bureaux come into this category—are where you bring out, for the involvement of a number of paid staff, those who are genuine volunteers in the sense that they are not paid. When you do that, you get the best of all that the voluntary sector does. So there is no argument as to that.
But there are two main reasons why I cannot accept the amendment. First, I do not believe that it could achieve the purpose which it seeks to achieve, as I explained when we discussed the previous group of amendments. If, in setting a rate or precept maximum, my right honourable friend were to have regard to the expenditure on grants and loans to voluntary bodies, the expenditure level set under Clause 3 would be lower and, as a direct consequence, the rate maximum under Clause 4 would also be lower, as would the rate income to the authority. In that sense, the amendment would make matters worse rather than better.
But the second and more fundamental point is the one that I touched on earlier. I say again that it is no part of this legislation in any way to interfere with the priorities of local authorities in deciding how to spend the money available to them. I have to say that an authority—and I am picking up the point made by the noble Lord, Lord Seebohm—which wished to meet its rate maximum by cutting expenditure on support to voluntary bodies, and to those who are often providing services to the most vulnerable in our community, would be free to do so under this Bill. But it is free now to do exactly that, if it so wishes. The argument goes: yes, but because they will have a limitation on the totality of their spending, as the noble Lord, Lord Seebohm, said, they will be inclined to go for what he called the easy target. Yes, that is a possibility and I shall not say other than that.
But I feel that we have to take this into consideration and, again, I come back to the earlier point. Who are we talking about? We are talking about the authorities who are, by definition, those who are spending the most. I referred earlier to their need to spend and why

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they receive the GREA, which gives them extra grant for that purpose. We should look carefully at these 12 or 20 authorities out of the 430-odd and see what they spend money on. My noble friend Lady Gardner touched on this and she was right, because you cannot say that all the purposes for which they give money are really deserving.
It is a matter of priority. What kind of priority is it, for instance, that says that you spend £3 million, £4 million or £5 million, as one authority is doing right now, on a political campaign? There are millions of pounds that could go to voluntary bodies—never mind the £47 million about which my noble friend reminded us. Some of those will be worthy and some will not. You cannot get away from the fact that millions of pounds are being spent on campaigning and on political broadsheets. But I do not want to base my whole case on that, because my case is much stronger than that.
Also, I am convinced that under rate limitation we shall see an awakening to reality. Some authorities are already doing that and many are saying "All right, rather than that we should have to forgo some things, let us look at what it is costing us to provide services. Why is so-and-so, 40 or 50 miles away, able to do this better and provide the same service at less cost?" That is the thrust of what we are seeking to do in this Bill.
My noble friend referred to his support for this Bill, because of its effect on inflation. That is part of the argument but it is not the whole thing. The Bill is about rates, about enabling the Government to keep their expenditure within overall limits which they feel the country can afford, and about inflation. But it is also about getting some of this handful of authorities to face the reality of what they spend money on. It will be for them to decide, in the end, whether to forgo some of the support which they give to certain voluntary bodies. 1 make no secret of that. But my view is that most of them, when it comes to this sector of the community, are not irresponsible though they are in the other things they do, and they will awaken to that fact.
The noble Lord, Lord Ennals, made my case very well when he talked about Lambeth's spending of 47 per cent. of its urban programme on voluntary bodies. The Government have to approve every item of that expenditure, so the Government are not against the spending of that particular authority on voluntary bodies. That shows we are concerned. The noble Lord does not have to say how worthy they are. We are with him on this and there is no difference, so far as that goes. The noble Lord, Lord Prys-Davies, said that the formula may have restrictions. I would only say to him that, at the end of the day, the local authority will itself decide, as it decides now. There is nothing new in that. All that will be new is that those few authorities will have a ceiling on the totality of their spending—
Lord Prys-Davies: If the words in line 5 of this amendment, "in the opinion of that authority", are deleted, is there not a great deal of common ground between the Minister and my noble friend Lord Ennals?
Lord Bellwin: If you narrow it down to that, yes, to a point. But not the whole thing. I would then have to
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fall back on my anxiety about the total effectiveness of the legislation. I have the concern, but I do not have the same fear as to what will be the impact. I do not think that I want to say anything else. There is not a great deal between us, certainly on what we all want to see. There is just a concern as to what will be the effect of the legislation. I do not have the concern, for the reasons I have given.
I shall not bore the Committee by going over it all again. There is great opportunity here for local authorities. I think that reality will make them face up to it and they will go on supporting the really worthwhile projects. There are some projects which should not be supported under the heading of the voluntary sector. Certainly, the citizens advice bureaux, which get so much money from the centres, have no need to worry. They get lots of help through the urban programmes. So I do not have the fear of the noble Lord, Lord Ennals, and that is why I cannot accept the amendment.
Lord Howie of Troon: Before the Minister sits down, may I say that I have great sympathy with what he has said. In the course of his reply he deplored certain expenditure upon what he called a political campaign. The Minister did not say what that campaign was, but it is quite possible that he was referring to the advertising campaign by the Greater London Council which is intended to continue that council's existence. We may or we may not approve entirely of the Greater London Council. We may all have doubts about it. But surely that would be a justifiable expense. If a great local authority is under open threat from the Government, it must be entitled to incur political expenditure of that kind. It is not the kind of political expenditure to which the noble Lord, Lord Renton, referred earlier. If that is the kind of expenditure which the Minister meant, surely it is justifiable. If it was indeed what he meant, surely he was hitting a little below the belt by referring to it.
Lord Bellwin: I do not usually hit below the belt, but I have to say to the noble Lord, Lord Howie of Troon, that that is part of it, because at the end of the day one has to ask what is reasonable. Everything has to be reasonable. How many millions of pounds of ratepayers' money is it reasonable to spend on this campaign? Not £10, £20, £30, £40 £100, £200, £300 or £400 are being spent upon this campaign, but millions of pounds. Everything has to be reasonable. I do not happen to consider that that is reasonable, but that is only part of the general campaign to which I have referred.
Lord Howie of Troon: The Minister and I often agree about what is reasonable. He must agree with me that to spend £1 million or £2 million against the threat of death must be, if not reasonable, not totally unreasonable.
Lord Ennals: I do not want to become involved in the argument about whether the GLC should spend money on arguing that it should be allowed to continue in existence. I want to welcome some of the points which have been made by the Minister. He said that there is not a great deal of difference between us

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and he paid tribute to the voluntary organisations. However, the Minister was a little awry when he implied that some of these authorities would be able, if their rates were cut, as has been suggested, to sustain the work of the voluntary organisations at a local level. In my view, they will be unable to afford to do so.
However the most fundamental issue which has been raised is absolutely proper: what kind of organisations are we referring to? I said that this was a carefully drafted amendment and I hope that we shall be able to improve it. I am not including grants paid by voluntary organisations to the Campaign for Nuclear Disarmament or to the Greenham Common ladies. I may sympathise with them but that is not what local authorities are there for. I cannot conceive, under the terms of an amendment which I should like this Committee to agree to, that we should approve of grants for political parties for political purposes.
I am concerned with the service providers. Your Lordships must accept the sincerity with which I listed the kind of organisations that I was thinking about. I am sure that the noble Lord would not seek to imply that I was listing those organisations which would arouse sympathy. What I meant were the nasty little grants which a number of noble Lords, and the press, have played up. I should not want my amendment to move in that direction. As I have already said, I am concerned with the service providers.
I am sure that at a later stage in the consideration of the Bill we could provide a better definition. It may be, to test my contention, that it should include those organisations which are affiliated to the National Council of Voluntary Organisations, or those which are affiliated to local councils of social service or volunteer bureaux. Those are the bodies which this debate is about. As the noble Lord the Minister has said that there is not much between us, I hope that he will say to us now that he will come back, with all the drafting skills which I know he has behind him, with an amendment to deal with the issues which I have raised and which the noble Lord, Lord Seebohm, and the noble Baroness, Lady Faithfull, have raised. I hope that the Minister will say, "Yes". If he says, "No", then it would be right to test the temperature of your Lordships' Committee on the question and the principle which I have presented—that it is the service-providing organisations with which I am dealing.
I can give an assurance, if the Minister does not give one, that at Report stage—with, I hope, his collaboration—it will be possible to bring back an amendment which will make it absolutely clear what it is that we are talking about. The task of this place as a legislative assembly is to. get the legislation right. If we know what we want to do and if we know what we wish to exclude, then it is the task of your Lordships—of those who sit on both sides of the House and of those who sit on the Cross-Benches—to find the right wording. I hope that the Minister will agree to come forward with an amendment. If he does not, I shall press this amendment to a Division, with the absolute commitment that we will come back at Report with something which has been carefully negotiated that will include what we want to include but will exclude what we do not want to include.
Lord Bellwin: The noble Lord speaks very fairly, but he misses the one difference between us. I said that we were close to one another in what we are seeking to achieve. In that we are not only close; we are at one. But the basic problem with an amendment of this kind, quite apart from the problems associated with its wording, is that it misses the underlying point which the Government are making. The Government have said expressly again and again that they cannot tell local authorities what they should spend their money on. The decision must be theirs. The posters about taking decisions away from local authorities and giving them to Whitehall, and all the rest of that nonsense, are dreadful. The fact is that local authorities must have the power to decide what they should spend their money on. We cannot direct them to spend it in a way they do not choose. That is the nub of the matter.
5.7 p.m.
On Question, Whether the said amendment (No. 37) shall be agreed to?
Their Lordships divided: Contents, 92; Not-Contents, 125.

DIVISION NO. 1

CONTENTS

Airedale, L.

Kilmarnock, L.

Amherst, E.

Leatherland, L.

Ardwick, L.

Listowel, E.

Attlee, E.

Llewelyn-Davies of Hastoe, B.

Aylestone, L.

Lloyd of Kilgerran, L.

Banks, L.

Longford, E.

Barnett, L.

Lovell-Davis, L.

Beaumont of Whitley, L.

Mayhew, L.

Birk, B.

Molloy, L.

Boston of Faversham, L.

Nicol, B.

Bottomely, L.

Ogmore, L.

Brockway, L.

Oram, L.

Bruce of Donington, L.

Phillips, B.

Caradon, L.

Pitt of Hampstead, L.

Carmichael of Kelvingrove, L.

Ponsonby of Shulbrede, L.

Cledwyn of Penrhos, L.

[Teller]

Collison, L.

Prys-Davies, L.

Cooper of Stockton Heath, L.

Robson of Kiddington, B.

Darcy (de Knayth), B.

Rochester, L.

Darling of Hillsborough, L.

Ross of Marnock, L.

David, B. [Teller]

Sainsbury, L.

Dean of Beswick, L.

Seear, B.

Denington, B.

Seebohm, L.

Diamond, L.

Sefton of Garston, L.

Ennals, L.

Serota, B.

Evans of Claughton, L.

Shackleton, L.

Ewart-Biggs, B.

Shepherd, L.

Ezra, L.

Simon, V.

Fisher of Rednal, B.

Stallard, L.

Fulton, L.

Stedman, B.

Gaitskell, B.

Stoddart of Swindon, L.

Gallacher, L.

Stone, L.

Gladwyn, L.

Strabolgi, L.

Graham of Edmonton, L.

Taylor of Blackburn, L.

Grey, E.

Taylor of Mansfield, L.

Hale, L.

Tordoff, L.

Hampton, L.

Underhill, L.

Hanworth, V.

Wallace of Coslany, L.

Harris of Greenwich, L.

Wells-Pestell, L.

Hatch of Lusby, L.

Whaddon, L.

Hooson, L.

White, B.

Howie of Troon, L.

Wilson of Rievaulx, L.

Hughes, L.

Winchilsea and Nottingham,

Irving of Dartford, L.

E.

Jacques, L.

Winterbottom, L.

John-Mackie, L.

Wootton of Abinger, B.

Kennet, L.

Young of Darlington, L.

369

NOT-CONTENTS

Airey of Abingdon, B.

McFadzean, L.

Alexander of Tunis, E.

Mackay of Clashfern, L.

Allerton, L.

Macleod of Borve, B.

Alport, L.

Mancroft, L.

Ampthill, L.

Margadale, L.

Auckland, L.

Marley, L.

Avon, E.

Marsh, L.

Belhaven and Stenton, L.

Massereene and Ferrard, V.

Bellwin, L.

Maude of Stratford-upon-

Beloff, L.

Avon, L.

Belstead, L.

Melville, V.

Bessborough, E.

Merrivale, L.

Booth by, L.

Mersey, V.

Broadbridge, L.

Molson, L.

Brookes, L.

Monk Bretton, L.

Broxboume, L.

Monson, L.

Bruce-Gardyne, L.

Mottistone, L.

Campbell of Alloway, L.

Mountevans, L.

Carnegy of Lour, B.

Murton of Lindisfarne, L.

Chelwood, L.

Norfolk, D.

Cockfield, L.

Northchurch, B.

Coleraine, L.

Nugent of Guildford, L.

Cottesloe, L.

Onslow, E.

Cox, B.

Orkney, E.

Craigavon, V.

Orr-Ewing, L.

Cullen of Ashbourne, L.

Pender, L.

Daventry, V.

Perth, E.

Davidson, V.

Peyton of Yeovil, L.

De Freyne, L.

Plummer of St Marylebone, L.

De La Warr, E.

Porritt, L.

Denham, L. [Teller]

Rankeillour, L.

Digby, L.

Renton, L.

Drumalbyn, L.

Ridley, V.

Ebbisham, L.

Rochdale, V.

Ellenborough, L.

Rodney, L.

Elliot of Harwood, B.

Romney, E.

Elton, L.

St. Davids, V.

Ferrier, L.

Sandford, L.

Fraser of Kilmorack, L.

Skelmersdale, L.

Gainford, L.

Soames, L.

Gainsborough, E.

Somers, L.

Gardner of Parkes, B.

Spens, L.

Geddes, L.

Stamp, L.

Gibson-Watt, L.

Strathalmond, L.

Glenarthur, L.

Strathcona and Mount Royal,

Glenkinglas, L.

L.

Grantchester, L.

Strathspey, L.

Gray of Contin, L.

Swinton, E. [Teller]

Gridley, L.

Terrington, L.

Hailsham of Saint

Teynham, L.

Marylebone, L.

Thorneycroft, L.

Harmar-Nichols, L.

Townshend, M.

Hood, V.

Tranmire, L.

Hylton-Foster, B.

Trefgarne, L.

Kaberry of Adel, L

Trenchard, V.

Kinloss, Ly.

Trumpington, B.

Lane-Fox, B.

Vaizey, L.

Lloyd of Hampstead, L.

Vaux of Harrowden, L.

Long, V.

Vickers, B.

Loudoun, C.

Waldegrave, E.

Lucas of Chilworth, L.

Ward of Witley, V.

Lyell, L.

Westbury, L.

McAlpine of Moffat, L.

Whitelaw, V.

McAlpine of West Green, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.16 p.m.
Baroness Faithfull Baroness Faithfull moved Amendment No. 38:
Page 3, line 22 at end insert—
("( ) In prescribing a maximum the Secretary of State shall exclude from consideration expenditure incurred on information and advice services, the physically and mentally handicapped, family services, children, the elderly, housing and the homeless and ethnic minorities.")
The noble Baroness said: We have just had a long debate on the previous amendment and therefore I will not keep noble Lords very long.
Lord Cledwyn of Penrhos: Hear hear!
Baroness Faithfull: Thank you for that support—I hope that you will support me in the rest of it! I must just take up two points which were made by my noble friend the Minister. The first concerns the fact that the local authorities must decide. As an ex-local government officer, I of course support what he says; but I am bound to comment to the Committee that I have had personal experience of local authorities who take the stance that there should not be a voluntary sector and that welfare services should be run entirely by the welfare state. They are therefore hoping to get rid of the voluntary organisations in their areas. I very much fear that this is something that might happen. When my noble friend the Minister says that local authorities are free to decide, I have to draw to the attention of your Lordships' Committee the possibility that local authorities could decide against the voluntary sector on political grounds.
The second point concerns the question of expenditure. I am bound to say that there are some things done in partnership between local authorities and voluntary organisations. That partnership is productive not only of money but also in terms of relationships and community responsibilities. If the local authorities find that they are short of money and may have to ask staff to declare themselves redundant it is possible and likely—and in fact very understandable—that the local authorities will feel they must support their own staff and not the voluntary sector. If the work has to be done, they will give that work to local authority officials and not to voluntary organisations.
I must say also, again, that the voluntary sector gives much more than money. It gives support and it gives a sense of responsibility. I may say also that the voluntary sector innovates. Often, under the statutory laws of a local authority there is no place for innovation, whereas the voluntary sector can carry out innovation which later the local authority may take over. I very much fear that unless we heartily and strongly support the voluntary sector, we shall lose that area of innovation which we have previously had. Therefore, I beg to move.
Baroness Elliot of Harwood: Perhaps I may add a few words because I feel strongly on this issue and I did not have the opportunity to speak in the last debate. There is no doubt at all that the contribution which the voluntary organisations make to local authority work cannot be overestimated. I spent 29 years of my life in local government and I know how much help one receives from voluntary organisations. It is a way of bringing the community into the work which is going on. It is invaluable not only in monetary terms and it does not cost anything like the amount that it costs to do everything using paid officials. I am not suggesting that there should not be paid officials, but obviously one can have tremendous assistance from voluntary organisations in all the areas which my noble friend Lady Faithfull has outlined.

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I listened with great interest to what the Minister said. Of course, he is right. We certainly do not want to dictate to local authorities. But if there is real support for the voluntary organisations from the department that, at least, will help to get the support which we want for them. I remember perfectly well, as my noble friend Lady Faithfull also mentioned, when local government did not support voluntary organisations. I can remember long before the war touring the country, when running the youth clubs, and getting local authorities to support the youth club movement, which was then only in its infancy, so to speak. It was extremely hard work and jolly difficult to do. But we got that help and support, and it would be a thousand pities if, now that this reorganisation is taking place, the Government do not realise that it is essential that they should support all that has been said by the noble Lord, Lord Ennals, and by my noble friend Lady Faithful on this matter. It is not a party political point. It is vital to the whole community spirit and to community work in this country. I very much hope that the Minister will think again and not leave what happens merely to chance.
Lord Marsh: I hesitate to interrupt the coming together, as it were, of all sides of the Committee on this amendment, but I find the amendment very easy to oppose, and to oppose totally. On originally reading the amendment I felt that it was easy to draw attention to the fact that, as drafted—and we well understand the problems a party in opposition has in drafting an amendment—at first sight it seemed to enable some of the bad practices, which have been castigated by all sides, to continue; for example, to exclude expenditure on information and advice services. A great deal of money is wasted on what are called information and advice services, which are frequently party political broadsheets produced at the taxpayers' expense. That would not be so bad if it was confined to the taxpayers who support the party concerned. The noble Lord, Lord Ennals, clarified the argument. It is not about that kind of expenditure at all. Therefore, I make no attempt to argue about the drafting of the amendment.
The debate we have heard is worrying in its implications because it goes right to the root of the whole problem which causes this Bill to be before us this evening; that is, the fact that, and the extent to which, local authority expenditure has become virtually uncontrolled and uncontrollable. The debate is about trying to get some kind of control. Noble Lords on both sides have drawn attention to the fact that some of these monies go to very worthy causes. As the noble Lord, Lord Ennals, said, we are concerned with these causes—we all know what they are—however one defines the amendment; they are the very good causes.
The argument is based on a frightening fallacy in modern society. It is based on the belief that everything that is desirable is affordable. Oh that it were so! Every noble Lord in this Committee could spend hundreds of millions of pounds on totally worthwhile good causes. Like many other noble Lords, currently I chair a charity which is seeking to raise £500,000 which is frequently described as "peanuts" in modern parlance. It is required to
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provide a blood pathology research unit at King's College Hospital because it cannot otherwise be afforded. We could spend money on the sick and the mentally handicapped and not a person in this Committee would oppose it. But why is that money not already being spent by the state in many cases? It is not being spent because, as every former Minister in this Committee knows, one sits around the Cabinet table agonising precisely because, in the real world, one has to deprive worthy and good causes of money.
We could all spend more money on investment in industry and on a whole range of things, but I shall not detain your Lordships Committee. I simply repeat my strong belief that it is extraordinarily dangerous and, if I may say so, virtually naive to believe that because something is desirable and defensible, it is necessarily affordable. The evidence in this country, with its social services declining in many areas, is that it has not been able to afford to maintain the standards which it ought to be able to afford. As the noble Lord, Lord Renton, said earlier, that has a great deal more to do with inflation than with this Bill.
Lord Broxbourne: I am glad for two reasons that I gave way to the noble Lord, Lord Marsh. First, he made such an interesting contribution and, secondly, as he may recall when we first met in 1951 he was trying to prevent my return to the House of Commons. Having frustrated him in that no doubt laudable undertaking, I can, at any rate, make this small recompense today.
I am not proposing to follow him on the wider theme of the dichotomy between the affordable and the desirable. It is obviously an important theme, which has been referred to from time to time in the debates on this Bill and, no doubt, will be again. I want to make only one short point, and the Committee will no doubt be relieved to know that I can make it in less technical terms than those in which I was constrained to make my earlier contribution on Amendment No. 36. Indeed, it is not technical at all and is, briefly, this. I can see, and the Committee can see, looking at this amendment, the enormous width of its range and its comprehensiveness. I can well envisage that the noble Lord the Minister in charge of the Bill might say that to adopt this amendment and to exclude this large range of services would place us in danger of putting a coach and horses through its objective, or making the maximum procedure prescribed by this clause something of a brutum fulmen.
Therefore, I respectfully ask him and the Committee to consider whether it is possible to select any particular item, or items, from this long catalogue as being especially deserving of consideration and which would not perhaps meet the objections which the adoption of the amendment would as a whole. The one which I particularly commend to him and to the Committee is that regarding the physically and mentally handicapped, which is included in this catalogue of services from which it is sought to exclude expenditure.
I do so for a number of reasons. My noble friend the Minister correctly referred twice, in his speech on Amendment No. 36, to what he called the most vulnerable people in our society; the most vulnerable sections of the community. I think there can be little

373
doubt that among the various sections which may be considered vulnerable none is more vulnerable than the physically and mentally handicapped. So, if only one of these categories can be included, adopting the criteria of my noble friend, this category is facile princeps in any selection for priority treatment. I have some interest in the matter, in particular in the mentally handicapped, as has my noble friend Lord Renton, and I should say the noble Earl, Lord Longford. I am, and for a long time have been, associated with the Royal Society for Mentally Handicapped Children and Adults (as it now is) though of course not with the distinction with which they are associated with it. My association with that Society and this subject started many years ago when I had the opportunity and the privilege of presenting to the House of Commons, and steering through Parliament to the statute book, what is now the Mental Health Act of 1959. There is now no doubt as my noble friend, Lord Renton, has testified in the debate on the earlier amendment as to the good work done in this regard by the Royal Society—MENCAP, as it is known for short—and other bodies.
It may be said that it is not appropriate to single out one category. I do so only in deference to the clear arguments of the noble Lord, Lord Marsh, that obviously it would be desirable to include them all; but if it is not affordable—and I would think it is not affordable to include them all without doing grave prejudice to the object which Ministers have in mind in prescribing a maximum under this clause—then this would be the most suitable one for seeking to exclude. It could not afford a precedent. It is easily identifiable. They are the most vulnerable section of the community, and in effect, they are sui generis, and considerations apply to them which would not apply to the others.
I should not like it to be thought that I am at all unsympathetic to these other categories. For example, as I said in my maiden speech in the House, I have a lifelong interest—and indeed a hereditary interest—in housing; and so far as the elderly are concerned I am poignantly reminded from day to day of my increasing and personal interest in this subject. But I submit that the handicapped stand in a special category, and I would respectfully invite my noble friend to give consideration between now and the Report stage whether he can have discussions with those who are promoting this amendment to see if that would be a realistic, narrower base on which to put it forward to the House at Report stage.
5.32 p.m.
Lord Kilmarnock: The noble Lord, Lord Bellwin, was complaining in his speech on Amendment No. 36 about all these attempts to exclude certain services. He should not be surprised that these claims are put forward, for in not permitting any statutory exclusions in this Bill the Government are putting into reverse their stated policy on care in the community, particularly in relation to the elderly and the mentally infirm and handicapped, to whom my noble Lord, Lord Broxbourne has referred. For this policy to work the Government need the local authorities' co-operation, and the local authorities also need the co-operation of those services which are provided by voluntary bodies.
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Whether now or at a later stage,—probably it will be at a later stage—we shall have to get something into this Bill along those lines.
There is only one specific point that I want to make, I raised it at Second Reading. It is the question of the probation service. I have been particularly asked by my noble friend, Lord Hunt, who is not able to be in the Committee this afternoon, to express the following twofold concern. The first is the possible effect of rate capping on local authorities' financial provision for their area probation services, which are funded by the Home Office at the rate of 80 per cent. and 20 per cent. by the local authority.
The second area of concern is that these cutbacks are likely to lead to a restriction in voluntary initiatives in this particular sphere such as community-based schemes involving young offenders and other juveniles who are at risk of getting into trouble.
The noble Lord, Lord Hunt, has written to me as follows:
"As chairman of the Government-financed intermediate treatment fund, I am greatly concerned lest its primary purpose, which is to encourage voluntary initiatives and support by volunteers for the statutory services dealing with deliquency and juvenile crime, may be thwarted by the lack of essential statutory financial support."
Finally, the noble Lord, Lord Bellwin, was kind enough to write to me on this point in response to my remarks at Second reading. If I may, I will quote what he says:
"Finally, you referred in the debate to the position of the probation service and the difficulty you believe they will experience in getting funding from rate-capped authorities for special projects. Even at a time when it is determined to contain public expenditure, the Government have shown firm evidence of their support for the Probation Service. That support continues. This is particularly true in the case of the development of non-custodial measures to deal with crime. Naturally, in operating selective rate limitation, we will be in the closest touch with the Home Office and the other departments of State responsible for the services financed by local authorities. The same would be true, if, as we hope will never happen, we were obliged to seek Parliament's approval to the implementation of Part II of the Bill.
The whole of Lord Bellwin's letter is written in the same terms of sweet reason, but I am afraid that the assurances that he gives are not adequate for the purposes that we seek to achieve, and the things that we seek to get protected under this Bill. So this is certainly a point that we shall come back to at a later stage of the Bill.
Viscount Ridley: I think we must all sympathise very deeply with the aims of the noble Baroness, Lady Faithfull, in trying to create what might be called a herd of sacred cows in the field of social services. We are all deeply involved in this one way or another, and we all support what she is trying to do. I think it could be very counter-productive to go ahead with this line. It means they will be exempt. That means the pressure of rate capping when it may come will fall on all the other services, and there will be resentment in other parts of the community. Even my noble friend Lord Broxbourne's suggestion that the mentally and physically handicapped should be exempt, whereas all the rest in the list should not be exempt, could create a possible dissention between the various persons affected and could be counter-productive to the aims.

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I hope very much that the amendment can be at least more carefully drawn if it does have to come back.
The Earl of Onslow: I sincerely hope my noble friend will resist this.
Noble Lords: Order!
Baroness Serota: The noble Viscount, Lord Ridley, has spoken the first words during our discussion on this Bill that I have disagreed with. So far, I had found myself in total agreement with all that he said. As one of those who put their name to this amendment I am sure the noble Baroness, Lady Faithfull, with her great record in both statutory and voluntary social services, will agree with me that this amendment does not seek to give special privilege to the services that are named in the amendment. On the contrary, I think that our anxiety stems, and those of the voluntary organisation stem, from the need to give special help to all those in the community who need the help of these particular services. Certainly, in my experience in both the statutory and the voluntary sector, that has never been resented by the other services in local government.
The difficulty that I think all of us are in in accepting the arguments which the noble Lord, Lord Bellwin, attempted to put forward, both at the winding-up of the Second Reading debate and again here on the previous amendment, No. 37, was that rate limitation should not affect what he, I believe, called a sensible level of spending on voluntary organisations. But the issues here are what is sensible and who is to decide. All my life in local government I have been brought up to believe that members were elected to exercise their value judgments and were accountable to the electorate for those value judgments.
Lord Graham of Edmonton: Not any more.
Baroness Serota: But if the Government are determined—and so it seems through the passage of this Bill—to limit the overall amount that local authorities spend, as every housewife knows, if you bake a smaller cake the slices will be smaller and you may not be able to give one to everybody. That is why I fear for the future of the voluntary organisations in local areas.
As many noble Lords have already said today, local authorities are bound to have regard to their statutory duties. When I was the Commissioner for Local Administration I looked at allegations of maladministration. I should have found a prima facie case of maladministration if a local authority had failed to fulfil a statutory duty. That is the difficulty.
If the noble Lord, Lord Bellwin, is right, perhaps he can tell me why the voluntary organisations are so concerned that the services they give to what we all agree are the most vulnerable groups in the community will be at risk in the areas subject to rate limitation. That is the question he has not answered today. I support this amendment, with all the inadequancies of its wording and all the difficulties that noble Lords on all sides of the Committee have pointed out. I support it in principle. When the noble Lord comes to reply to it, I hope he will answer that
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argument, because it is the one that concerns many hundreds of people up and down the country and not merely in the inner city areas.
The Earl of Onslow: If this amendment is passed, it will basically drive a coach and horses through the whole Bill. I do not think that the Government are saying that local authorities may not spend money on voluntary services. Of course they are not. As I understand it, they are saying that there is only a finite pot of money that can be found, as the noble Lord, Lord Marsh, said. We cannot then go on to exclude housing, which is an enormous expenditure, and services for the physically and mentally handicapped. If those items are excluded from the limits, we might as well all pack up, send the Bill back and not have this legislation at all. It would make the Bill valueless. We cannot have exceptions to run-of-the-mill expenditure, even for the mentally and physically handicapped. In run-of-the-mill expenditure we have to make value judgments the whole time—difficult and harsh value judgments. But perhaps special expenditure, such as that during the miners' strike, is different. That is special and extra expenditure produced by something totally outside the control of local authorities.
The Government are not being uncaring. They have spent more money on the health services. Those budgets are tuned as finely as they possibly can be. All that one is asking is that local authorities take the same—and very good—care of their expenditure and do not deliberately go outside it to cause embarrassment to central government.
The amendment mentions ethnic minorities. We have heard the remarks about gay lesbian leprechauns, or whatever group Ken Livingstone has been giving money to. That is the sort of expenditure that will be covered by this amendment, and that certainly should not be allowed. I sincerly hope that my noble friend will resist the amendment.
Lord Wells-Pestell: I am stirred into action by the vehemence of the noble Lord, Lord Marsh, when he talked about the information that the various organisations give. We have known each other for a good many years, and I hope that he will not take this amiss. But it suggests that he really does not know what is going on in the community. If he did, he would not have made that statement that he made.
There is probably only one other person in your Lordships' House—though I may be wrong about this—who has served for 40 years as a professional, fully trained social worker in various fields. I am referring to the noble Baroness, Lady Faithfull. I think that we both spent about 40 years as professionally trained social workers in different fields of social work, and then on retirement gave a good deal of time to voluntary social work.
If people only knew how many in the community were ill-informed, uninformed and misinformed to the extent that at present I do not think that any benefit is being taken up 100 per cent! Thousands of people are not aware that they are entitled to them. We have to rely upon the social services advice centres to tell people that they should be able to get so and so. Had it not been for the advice centres and the voluntary

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organisations spending a considerable sum every year setting out the benefits that people are entitled to over a very wide field, there would be a vast army of men and women today who were financially worse off.
Lord Marsh: I totally take the point that the noble Lord makes about the valuable work done by a lot of the advice bureaux, but will he address himself to the point that I was trying to make? It was not opposed to those services, but how can one justify a situation where there are cut-backs in national expenditure on the social services but at the same time unlimited social expenditure through local authorities? That seems a palpable absurdity.
Lord Wells-Pestell: Perhaps the short answer is that it is unfortunate that the noble Lord dealt with and referred to the written and printed information that certain groups give to people in the community. We should be very worried about the ordinary person who is living below the poverty line and, by virtue of the fact that he or she does not know what he or she is entitled to, is not getting the benefits. The noble Lord included that section and the leaflets and information made available by advice services and other organisations. I feel that we have to have a kind of priority. I ask the Minister to acknowledge that and not give us, so to speak, a few well chosen words, paying lip service and saying, "We still cannot do it". If he does not mind my saying so, there are certain things which must take priority. Informing the people in the community who are in need is much much more important than are perhaps some other forms of social service.
Baroness Phillips: I should like to support the amendment. I recognise that it is not perhaps as explicit as it should be. The noble Baroness who introduced it made the point that she was speaking particularly of the voluntary services. I, too, have had the privilege of being a worker in the voluntary services for a large part of my life. The important factor which we will miss, as the noble Baroness said, is that you can have pioneer services in the voluntary sector which you would never have in the state sector. We should not have had pre-school playgroups had the voluntary sector not first gone into that. Many of us tried for years to get the state to move on that and it did not do so. That is to name but one aspect.
If the voluntary services are not allowed to carry out their role because they do not have the backing, more people will be thrust on the statutory services. As the noble Baroness said, the voluntary services are always cheaper. None of them is asking for the whole grant. I do not know of any voluntary movement that gets all its money either from local government or from the state. They merely want the basic grant which will give them the feeling of stability that they can go on to do other work.
Like my noble friend, I must say I was shocked by the utterances of the noble Lord, Lord Marsh, who said that what is desirable is not always affordable. What kind of society are we living in? If we are going to use that kind of measuring stick, some of us would suggest that perhaps we are affording too great a sum in armaments, and is that desirable? If you are really
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going to widen the argument that far, I would say that of course the test of a Christian civilised society is the way they care for the groups who are vulnerable in this society. It would be quite shameful if, as a result of the rate capping, any of these groups lost out.
5.50 p.m.
Lord Stallard: I will not detain the Committee for too long but I move to support my noble friend Lord Wells-Pestell when, in reply to Lord Marsh, he mentions information and advice. While the noble Lord, Lord Marsh, was speaking, I was thinking about the excellent work carried on by an organisation like Age Concern, who have produced a first-class pamphlet of information that lists all the available services, or most of them, to pensioners. I was thinking of the excellent publication by the National Federation of Old-Aged Pensioners, which does something similar but goes even further; the specialist booklets and leaflets published by the organisations for the deaf, for the blind, for epileptics, and a whole long list that would take another half an hour to mention, who are not covered by anybody else other than the voluntary organisations.
I know exactly what the noble Lord, Lord Marsh, was hinting at; I know what he was getting at. He has the whole thing totally out of perspective when he is aiming at the one or two local newspapers which are pushed through the door free. This is probably his major criticism. But to lump all these other excellent publications, advice services and information services into the same pot is not doing justice to the amendment or to the mover, the noble Baroness, Lady Faithfull.
As I have said, I am only too well aware, as a member of a number of voluntary organisations —including those covering mental health, the disabled, and many others—of the excellent work that is done. I have at this moment a Question down on the Order Paper drawing attention to the lack of information being put out by the Government on certain services for pensioners. I know that some of the information is given by voluntary organisations. I am asking for the Government to do it. They are saying, "We have not got the money; Let voluntary organisations do it". Now we are saying, "Do not let the voluntary organisations do it because we are not going to allow them any money to do it with". So I say the opposition to this amendment is really barking up the wrong tree. They are getting the whole issue totally out of perspective in chasing these hares that have been started by a number of people.
I therefore hope that the amendment will be accepted, not only because of the voluntary organisations that I have mentioned. I could also mention CHAR. The amendment mentions housing and the homeless. God knows! there is a job to be done among the homeless. I could put in special pleading—as the noble Lord, Lord Broxbourne, did—for the mentally handicapped. I could put another specially pleaded case for the homeless because we all know the terrible problems that exist among the homeless, particularly in the inner city conurbations. We have spoken about that many, many times in both Houses. All governments have

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pledged their sympathy and support and have said that local authorities ought to be spending more money in this direction. They have no said, "We will give them more money". They have said, "We support it and they ought to be spending it". Now it would seem that the opponents of this amendment do not think we ought to be spending even that or doing that kind of service.
I say this is a particularly reasonable amendment for those of us who have continued to support the voluntary organisations. I hope that the Minister will take very much the point that the noble Baroness, Lady Faithfull, made in her opening remarks: that this may well strengthen those people who have always opposed the voluntary movement. There are many on both sides of the Chamber who think, for a number of reasons, that voluntary organisations ought not to exist at all. The kind of opposition that we have heard today strengthens those people in their views, and I hope the Minister will not listen to it.
Lord Pitt of Hampstead: May I just ask the Minister whether he has had any representations from the Commission for Racial Equality? As I listened to this debate my mind went back to the days when we were establishing the community relations councils, and the Committee will know I had a major hand in that. We had a lot of trouble getting the local authorities to play their part, and to make the contributions that they should make. In fact to this day, the contribution varies considerably: from my borough of Camden—which is the one being criticised so regularly—which makes a good contribution regularly, to boroughs that make no contribution at all and some that give as little as £ 100 a year.
The reason for making this point is this. If we pass an amendment like this, we will be able to encourage the boroughs that are recalcitrant to do what they ought to be doing in this field. On the other hand, if we have rejected an amendment like this, I have no doubt that some of the boroughs that are at the moment borderline, will use it as an excuse for not making a contribution.
Lord Prys-Davies: May I make a very quick point? I am sure that the Minister wants to get on with the proceedings. There is one point which I think ought to be made. If the Minister feels that he is unable to accept this amendment, I would invite him, once again, to consider those client groups which are listed in this amendment to which the state stands in loco parentis. They are minority groups. Often their requirements are overlooked by the majority on the local authorities. I would have thought that because of their weakness, the state has a special responsibility for the mentally handicapped, for the mentally ill—possibly for the elderly—and the state ought to ensure that their minimum requirements are observed. The Minister may shake his head, but they have no power to fight for themselves and the legislator therefore has a duty to ensure that their minimum standards are observed.
Baroness Fisher of Rednal: My contribution will be—
Noble Lords: Oh!
Baroness Fisher of Rednal: We are in Committee and my contribution will be brief. I think the point that is being made by the noble Baroness, Lady Faithfull, and others that have spoken is that there is this need for information. Who can give it, except those people that are volunteers in the field, who are taking up specialisms? I speak primarily, in the few minutes that I will be taking—and I will be very brief—regarding the blind, the blind handicapped, the blind physically handicapped and the blind mentally handicapped. These categories of people can only speak for themselves. The people that are working inside those particular voluntary bodies will be the ones that will be speaking up.
In Birmingham I know that there is a very good co-ordination between the Birmingham Royal Institution for the Blind (of which I am the president) and the local authority. But that is not true up and down the country. The needs of the blind handicapped are very, very neglected by local authorities in many parts of the country. The provision of accommodation for them is sadly lacking. It is true to say, though, that we have care in the community and people are now moving out of mental hospitals, but there are no figures available of anybody who is blind and mentally handicapped that has been moved from a mental hospital into a local authority or only into the charitable places for them.
So my words would be that if these organisations that are specialist in the field are not able to give that advice, either by pamphlets, by meetings, or anything else, those needs will be very, very badly neglected, and that will be tragic for those less fortunate in the community.
6 p.m.
Lord Bellwin: May I say at the outset that the Government need no strictures at all on their role in connection with, or support for voluntary organisations. The Government's record over the last five years stands so far ahead of anything done previously for voluntary organisations—I make that statement categorically—that in no way do I feel the need to be defensive: quite the opposite. I understand when your Lordships stand up, one by one, in connection with a specific organisation with which you may individually be concerned. That is quite in order. I suspect that one could take every single voluntary service in the country and find someone in this Committee, or more than one person, willing and wanting to speak and say something about the good work that it performs. There is no argument about this. Nor was there any argument when the noble Lord, Lord Ennals, and myself were discussing an earlier amendment. Certainly there is no argument with my noble friend Lady Faithfull.
I should like to comment on some individual observations that have been made before coming to the general point. The noble Lord, Lord Kilmarnock, who I believe is not now in his place, talked about cutbacks. I wish he would not talk about cutbacks. This is not about cutbacks. I see now that the noble Lord has returned. The noble Lord talked earlier about cutbacks. I wish that he had not done so. I am repeating what I have said for his benefit. This is not about cutbacks at all. This is about restricting the

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ability of a small number of authorities to spend in total beyond a certain amount. At present they are spending in total so much more than any other comparable authority that it is affecting the people who pay the rates in those areas and affecting the overall economic strategy. We are talking of some £850 million this year. This needs to be said to remind your Lordships of what is involved.
Although the noble Lord, Lord Wells-Pestell—I should like to comment in a moment on something else that he said—took to task the noble Lord, Lord Marsh, he was not right to do so. What the noble Lord, Lord Marsh said was absolutely right. It is true that "desirable" and "affordable" have to go together. We do not live in a Utopian world. Indeed, I go further. It is because, in the past, we did not allow "affordable" and "desirable" to go together that we were in the mess that arose in 1979 and why we are now having to do some of the things that we do not necessarily want to do but cannot avoid doing.
The noble Lord, Lord Kilmarnock, talked about the probation service and said that I had written to him with sweet reason but that my assurances were inadequate. I wish I had the letter to read out to your Lordships, or the time to do so. I do not think that it was inadequate. I try always to respond to anything that your Lordships say at any stage of the Bill. I did so to all those who raised a point at Second Reading. I try to do the best I can. If it does not always satisfy your Lordships—
Lord Kilmarnock: Will the noble Lord give way?
Lord Bellwin: If the noble Lord will allow me, I have sat here for three-quarters of an hour and listened to everyone. Perhaps I might be permitted to finish, or perhaps I can give way just before I sit down.
Lord Kilmarnock: I wish only to assure the noble Lord of something. I merely wish to say that I cast no doubt on the good intentions of the noble Lord, or on his sweet reasonableness. However, it will not necessarily always be sweetly reasonable and well intentioned people who will hold his office.
Lord Bellwin: I am grateful to the noble Lord. It
only shows that one should be careful to allow everyone to speak all the time.
My noble friend Lord Broxbourne talked about MENCAP. I have personally had dealings with MENCAP. The dilemma is simply that it is not possible for me to achieve protection for particular services. At the end of the day, it is for the authority to decide on its expenditure priorities. Even if it were possible to arrange a more generous rate limit for authorities specifically in respect of service for the disabled, there would be no way to ensure that those services were, at the end of the day, protected. We are talking about a very fundamental thing, the right of an authority to decide. As the noble Baroness, Lady Serota, said, what is a sensible level? Why are the voluntary organisations concerned? They are concerned because they see in every publication on this subject that they are going to be disadvantaged, and that they will have to suffer this, that or the other.
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I stated frankly in debating the matter with the noble Lord, Lord Ennals, that it could be so. I cannot deny that an authority might decide that its priority was not to help the mentally handicapped and the disabled but that its priority, if you like, was to maintain its attitude to the provision of services in such a way as to disregard anything that might give them more funds to help the mentally handicapped and the disabled. But it would be a funny kind of authority which, at the end of the day, decided that this was not much of a cause to support; that is all that I can say. We are talking of the 12 to 20. If that was their idea of priorities, I hope that the people whom they represent would take good notice of it.
The noble Lord, Lord Wells-Pestell, used the word "priorities"—and he is right; this is a matter of priorities. The whole of what we do is about priorities. But look how, again and again in this series of debates, I have to make the point that we are not in a position, and we are not willing or able to tell the authorities what should be their priorities. I happen to have confidence even in some of the weirdest authorities, with which I certainly do not agree and which certainly do not agree with me. However, when we are talking about the blind, the mentally handicapped and the really vulnerable, I happen to believe that most people do have a feeling for them. There is the opportunity, without it being at the expense of cutting into statutory services and without it meaning that you have to put up the rates.
I come back to what I call, all the time, the third option. That option is to do it better. And there are those who are doing it better. Is it not significant that none of those doing it better is anywhere within light years of rate capping?
I should like to take this chance, because I was hoping that there would be a moment, to reply to the noble Baroness, Lady Stedman, who actually talked about Cambridgeshire possibly being rate capped. I have checked since she spoke. Cambridgeshire does not even spend up to GREA. It is below GREA in expenditure. So when I talk of who-knows-what percentage, let me give her the assurance that I am sure she will be glad to have and which the good folk of Cambridgeshire will be even more glad to have: that it is not within light years of being rate capped.
Baroness Stedman: It is below GREA. I said that. But it was £1·5 million above its target. If it is going to be rate capped on target, it will be rate capped. What is it being rate capped on? That is what we do not know yet.
Lord Bellwin: I give the noble Baroness the message for Cambridgeshire—I say it again that it is not anywhere within striking distance or even for consideration on the figures that it is itself producing.
I am grateful to all who have spoken on this amendment. It is clearly an emotive issue. I am grateful most of all, of course, to my noble friend Lady Faithfull, who introduced the amendment. I have talked to her about the whole subject. My noble friend, like the noble Baroness, Lady Serota, and all who have spoken, is concerned to ensure that this legislation will not disadvantage the voluntary sector. I say again,

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slowly and carefully, that it does not have in any way to do so. The funds that come from the centre will not in any way be diminished. The fact is that the GLC will not receive its money for the voluntary sector, but that same money—no less money, but that which would have gone to it—will go to the boroughs. And, yes, the boroughs will have to decide. How often am I preached to in your Lordships' House (not that I need it) that local people are best equipped to decide? I am told they are locally elected; they have to answer to local people. That is exactly what they will be doing when they decide this matter. The handful who are spending so much will have the greatest opportunity to do the most because they can most afford to do it if they will only get down to running their authorities as others are running theirs.
Baroness Faithfull: In the terms of Gilbert and Sullivan, I speak to your Lordships' House as a good little Conservative. I would say to the noble Lord, Lord Marsh, and to the noble Earl, Lord Onslow, that we cannot afford not to afford and not to support voluntary services. We must be careful not to throw away a resource. The voluntary sector is an enormous resource, financial and in every other way.
I am conscious of the fact that personal experiences take a long time to relate. I shall therefore be brief. As a local authority director of social services, I was told by my authority that I could have no more money and that I must keep within a certain budget, which meant that I could not have staff. What did I do? I enlisted volunteers to carry out the work that the local authority could not do. Finally, the work was done, but in the voluntary sector. Had there not been the voluntary sector to apply to, I should have had to ask for more staff and overspend my budget.
I am very conscious of the fact that, as many noble Lords have said, the amendment is not worded as well as it might be. I am also very conscious that there are certain feelings in the Committee about certain sectors that need help among the vulnerable in society. Therefore at this stage I think I will withdraw the amendment with a view to bringing it up at the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.11 p.m.
Lord Ennals Lord Ennals moved Amendment No. 39:
Page 3, line 22, at end insert—
(" ( ) In prescribing a maximum the Secretary of State shall exclude from consideration any expenditure undertaken by a local authority under joint-financing arrangements with the Health Authority, regardless of whether that Health Authority's contributions have come to an end or not.")
The noble Lord said: It has been extremely helpful and salutary that there has been as long a debate as there has on the problems of the most disabled and the most deprived in our society, together with the role of the voluntary organisations working with the local authorities to try to bring help to them. It may very well be that with all the wisdom we have heard—there was great support from all sides of the Committee for the amendment moved by the noble Baroness, Lady Faithfull—there may be a coming together of the
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amendment that she has withdrawn and the amendment which I pressed to a vote, because it may be that her definition or her version of it is what the Committee wants; and it is the will of the Committee that prevails.
My task at the moment is to move very briefly Amendment No. 39, which tackles a small proportion of local government expenditure, initially financed very largely from the National Health Service funds, for projects approved jointly by health authorities and local authorities. What makes it special is that these have been decisions taken jointly by a health authority and a local authority. If one looks at many of the projects that have been jointly sponsored, one sees that enormous amounts of good work would not have been done and some projects that were going ahead would have fallen apart if it had not been for the introduction of joint financing.
I had the honour of introducing the scheme of joint financing, and it has been sustained by the Conservative Government in power; there is no party issue here. I will not go into details, but in joint financing we are dealing with schemes for the elderly, home helps, home help co-ordinators, good neighbour schemes, disabled people, mentally handicapped, care attendants. All these are projects which fall within this category of jointly financed schemes.
We are dealing with two issues here. First, we are dealing with those schemes that are still jointly financed partly by the health authority, partly by the local authority. I must say to the Minister that he seems to fail totally to understand the point made by the noble Baroness, Lady Faithfull, that the problem for the local authorities is often going to be that because of their statutory duties they will not be able to fulfil the things that he says he hopes they will do in all good faith. I believe that if in joint finance schemes local authorities were unable to fulfil their share, then the schemes would fall apart.
Secondly, there are those schemes that are now being financed fully by local authorities and in which there ceases to be any National Health Service money going in at all. Apart from the value of the projects in helping the most needy in our society I believe that it would be wrong to stop projects that have been financed after capital expenditure by the National Health Service. Therefore it is these special schemes that must be protected. In the course of this year Government expenditure on them amounts to about £44 million. The bulk of the money is being paid by health authorities, not by local authorities. I beg to move.
Lord Bellwin: I know that the Government's initiatives in community care are supported by all sides. It is right that we should encourage local authorities to take on responsibility for caring for people whose needs are not best met in the institutions of the health service. Those institutions provide a valuable and important service but do not suit all needs. Many people are best cared for out in the community and that is what the initiative "Care in the Community" seeks to achieve.
The Government stand by that initiative and we have encouraged its success by exempting from the

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effects of grant holdback increases in expenditure on jointly financed schemes; that is, as the noble Lord said, the schemes run jointly by the local authorities and the National Health Service during the transfer of a function to the local authority. I know that we have received representations to go further and extend this disregard to cover projects which had been jointly financed but which are 100 per cent. local authority-funded in 1984–85. We are considering these representations and we will announce our decision before implementing grant holdback for 1984-85 in the summer.
This amendment is trying to take forward into rate limitation the idea of a disregard for jointly financed schemes between local authorities and health authorities. I have sympathy with the intention, but I have to oppose this amendment for much the same reasons which made Amendment No. 36 unacceptable. First, disregards for targets work by exempting from penalty certain types of expenditure when the budgets of local authorities have been properly verified. The adjustment is made after the budgeting process and is brought up to date subsequently as the actual pattern of spending becomes clearer. We have to set expenditure levels before the authorities set their budgets, well before a financial year begins. Not even the authority knows where it will spend its money until it is much too late for rate limitation to take account of it.
As I have said, because a particular service is desirable it does not mean that there are not efficient and inefficient ways of providing the service. We all believe in providing proper care for children, care in the community, but this must be done in the most cost-effective way. I am not suggesting that this is an area in which the major search for economies must be made. But I cannot accept that absolutely every aspect of care in the community should be exempted from the search for economies.
Unfortunately the earlier amendments could not achieve the effect which those who moved them seek to achieve. The reason is simple. If in setting an expenditure level my right honourable friend were to have no regard to expenditure on community care the expenditure level set under Clause 3 would be lower than it would have been otherwise. And, as a direct consequence, the rate maximum under Clause 4 would also be correspondingly lower since the expenditure level is to be directly translated into the rate or precept limit having regard to the factors set out in the clause.
We do provide in Clause 3 for authorities to make representations to the Secretary of State for a larger expenditure level, and it would be possible for authorities which felt themselves to be in real difficulty in jointly financing community care to seek a relaxation of their expenditure level. Surely that is the key to the whole thing. As I said when we were discussing the earlier clauses of the Bill, it will always be up to the authority to make its representations. There will be no shortage of opportunities for it to do so. The Secretary of State will be reasonable—he will have to be reasonable—and therefore I have not the fears that are in the minds of the movers of the amendment, which we do not want to accept.
Baroness Robson of Kiddington: I should like to ask the Minister whether this amendment is not quite different from a lot of the others. It has been said in the Committee that all these amendments are dealing with the same thing—trying to exempt a particular group or a particular service. This amendment is different from the others because here is a situation where in actual fact the Government fund the joint financing as part of the National Health Service expenditure. They give the National Health Service money for the joint financing of projects between the local authority and the National Health Service.
I should like to make three points. There is enormous danger that that money will not be used unless that particular part of local authority expenditure is excluded from the rate limitation that is being proposed. We could then fund ourselves with money which the National Health Service itself could not spend, although it was needed. If I were a local authority and I was being squeezed as regards the amount of money that I was allowed to spend, I would look at what the National Health Service was at present doing for people who should be cared for in the community and I would say to myself, "Well, they are in an institution; they do not have to come into the community, and so that is something on which I can save money". All of us in this Committee have subscribed to Care in the Community, and unless we allow the exemption asked for in the amendment we are saying that we do not believe in Care in the Community.
Baroness Faithfull: I rise briefly to support the amendment on the ground that it is cost-effective. I speak particularly about the friends of various hospitals who have made it possible, together with the joint financing, to get patients out of hospitals and to keep them in the community. In that way accommodation has been made available in hospitals, particularly the long-stay hospitals—the mental hospitals—where patients have been helped to leave those hopsitals by the voluntary sector, thus cutting the costs of the hospitals. However, I am sure that the noble Lord, Lord Ennals, will understand me when I suggest that, as we have taken back the previous amendment, he should consider taking back this amendment also, so that the two can be considered together.
Lord Kilmarnock: It is not often that I disagree with the noble Baroness, Lady Faithfull, but I would not give the same counsel to the noble Lord, Lord Ennals, as the noble Baroness has just given. As the noble Lord himself pointed out, he introduced the joint financing arrangements, and in fact they were renewed and extended by the present Government by the Health and Social Services and Social Security Adjudications Act 1983.
I want to refer to the same letter of sweet reasonableness to which I have already referred and which the noble Lord was kind enough to write to me. He said:
"You should know that we have received a number of representations for the scope of this disregard to be extended to cover projects which had been jointly financed but which are 100 per cent. local authority funded in 1984–85. We shall be considering these suggestions carefully before implementing grant holdback for 1984–85 in the summer".

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No doubt what the noble Lord says is very true. He has said that the Government will take reasonable decisions. The point that I made to him when he was winding up on the last debate remains valid. The noble Lord might take reasonable decisions, his immediate successor might take reasonable decisions, but we do not know who his successor will be, and that is why we want these things on the face of the Bill and that is why we are pressing the noble Lord on this point.
The noble Baroness, Lady Robson, made a very good point indeed. This is a specific point; it is not a great widening to include a vast number of services. It could not in any sense be described as driving a coach and horses through the Bill. In fact, to some extent it will help the Government to implement some of their own legislation concerning joint funding. I hope that the noble Lord, Lord Ennals, will decide to press this amendment. It seems to me that we need just this particular assurance on the face of the Bill. I hope that the noble Lord will press it.
Lord Ennals: I thought at one stage I was going to achieve what I had set out to achieve when the noble Lord, Lord Bellwin, began to reply. He said at one stage that the Government would be considering these suggestions carefully before implementing grant holdback for 1984-85 in the summer. If the noble Lord had said that these matters were being considered and that before the Report stage he would come back with the type of assurances that have been asked for, then I would have felt disposed to beg leave to withdraw the amendment.
I must say to the noble Baroness, Lady Faithfull, that I respect the view that she holds, because she gave great support to this amendment. I should like to congratulate the noble Baroness, Lady Robson, who also spoke from her own experience. We have heard from a former health authority regional chairman and a former director of social services. Who better—except a former Secretary of State for Social Services—could know whether or not it is right that this should be protected? Even though I may not have made the most powerful case to be made, I believe that it has been made by others, and I think I should press the matter to a vote. If the Minister will now say that he will alter his words and that he will consider these suggestions carefully before the Report stage then, of course, I will withdraw the amendment, sit down and take his word for it. Would the noble Lord be prepared to do that?
Lord Bellwin: No, I will certainly not do that. I simply want to say—and I think that this ought to be said before the Division takes place—that the Government have announced that they will exempt jointly financed schemes from the effects of grant holdback increases in expenditure. There have also been requests that this disregard be extended to cover projects which had been jointly financed previously but which are 100 per cent. local authority funded in 1984–85. Those representations are being considered at the present time.
Lord Ennals: I am sorry that the noble Lord did not feel that he could make the concession that I asked of
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him. In all my experience—and I say this with some depth of feeling, having spent many years as a Minister—I have not known a Committee stage in which a Minister has not been prepared to give way on one single issue that has been raised, from whatever side of the Committee it comes. Thus I feel, that of course, I should press the matter to a Division.
Lord Bellwin: Before the noble Lord sits down, I must point out that we have now been nearly three and a half hours on this Bill, and this is our fifth amendment. We have quite a way to go yet.
6.27 p.m.
On Question Whether the said amendment (No. 39) shall be agreed to?
Their, Lordships divided: Contents, 89; Not-Contents 117.

DIVISION NO. 2

CONTENTS

Airedale, L.

Houghton of Sowerby, L.

Amherst, E.

Howie of Troon, L.

Ardwick, L.

Hughes, L.

Attlee E.

Jacques, L.

Auckland, L.

John-Mackie, L.

Aylestone, L.

Kilmamock, L. [Teller]

Banks, L.

Llewelyn-Davies of Hastoe, B.

Barnett, L.

Lloyd of Kilgerran, L.

Beaumont of Whitley, L.

Lovell-Davis, L.

Birk, B.

McCarthy, L.

Boston of Faversham, L.

McIntosh of Haringey, L.

Bottomley, L.

Mayhew, L.

Briggs, L.

Molloy, L.

Brockway, L.

Nicol, B.

Bruce of Donington, L.

Ogmore, L.

Caradon, L.

Oram, L.

Carmichael of Kelvingrove. L.

Pitt of Hampstead, L.

Cledwyn of Penrhos, L.

Ponsonby of Shulbrede, L.

Collison. L.

[Teller.]

Craigavon V.

Prys-Davies, L.

Darcy (de Knayth), B.

Robson of Kiddington, B.

Darling of Hillsborough, L.

Rochester, L.

David. B.

ROSS of Marnock, L.

Denington, B.

Sainsbury, L.

Diamond, L.

Seear, B.

Donnet of Balgay, L.

Sefton of Garston, L.

Ennals, L.

Serota, B.

Evans of Claughton, L.

Shackleton, L.

Ewart-Biggs, B.

Simon, V.

Faithfull, B.

Stallard, L.

Fisher of Rednal, B.

Stedman, B.

Fitt, L.

Stoddart of Swindon, L.

Fulton, L.

Stone, L.

Gaitskell, B.

Taylor of Blackburn, L.

Gallacher, L.

Taylor of Mansfield, L.

Gladwyn, L.

Tordoff, L.

Graham of Edmonton, L.

Underhill, L.

Grey, E.

Wallace of Coslany, L.

Grimond, L.

Wedderburn of Charlton, L.

Hale, L.

Wells-Pestell, L.

Hampton, L.

Whaddon, L.

Hanworth, V.

White, B.

Harris of Greenwich, L.

Winchilsea and Nottingham, E.

Hatch of, Lusby, L.

Young of Darlington, L.

Hooson, L.

NOT-CONTENTS

Airey of Abingdon, B.

Beloff, L.

Alexander of Tunis, E.

Belstead, L.

Allerton, L.

Bessborough, E.

Avon, E.

Boothby, L.

Belhaven and Stenton, L.

Brabazon of Tara, L.

Bellwin, L.

Bridgeman, V.

389

Brookes, L.

McFadzean, L.

Brougham and Vaux, L.

Mackay of Clashfern, L.

Broxbourne, L.

Macleod of Borve B.

Bruce Gardyne, L.

Mancroft, L.

Campbell of Alloway, L.

Margadale, L.

Carnegy of, Lour, B.

Marley, L.

Chelwood, L.

Marsh, L.

Cockfield, L.

Massereene and Ferrard, V.

Coleraine, L.

Maude of

Colwyn, L.

Stratford-upon-Avon, L.

Cox, B.

Merrivale, L.

Cullen of Ashbourne, L.

Mersey, V.

Daventry, V.

Monk Bretton, L.

Davidson, V.

Mottistone, L.

De, La Warr, E.

Murton of, Lindisfarne, L.

Denham, L. [Teller.]

Newall, L.

Digby, L.

Nugent of Guildford, L.

Drumalbyn, L.

Onslow, E.

Elles, B.

Orr-Ewing, L.

Elliot of Harwood, B.

Pender, L.

Elton, L.

Peyton of Yeovil, L.

Erroll, E.

Plummer of

Fairfax of Cameron, L.

St. Marylebone, L.

Ferrier, L.

Quinton, L.

Fraser of Kilmorack, L.

Rankeillour, L.

Gainsborough, E.

Renton, L.

Gardner of Parkes, B.

Rochdale, V.

Geddes, L.

Rodney, L.

Gibson-Watt, L.

Romney, E.

Glenarthur, L.

St. Davids, V.

Gowrie, E.

Sandford, L.

Grantchester, L.

Skelmersdale, L.

Gray of Contin, L.

Somers, L.

Gridley, L.

Spens, L.

Hailsham of

Stamp, L.

Saint Marylebone, L.

Strathalmond, L.

Halsbury, E.

Swansea, L.

Harmar-Nicholls, L.

Swinfen, L.

Hood, V.

Swinton, E. [Teller.]

Hornsby-Smith, B.

Teynham, L.

Hylton-Foster, B.

Thomas of Swynnerton, L.

Ingrow, L.

Thorneycroft, L.

Kaberry of Adel, L.

Townshend, M.

Killearn, L.

Tranmire, L.

Kinloss, Ly.

Trefgarne, L.

Lane-Fox, B.

Trenchard, V.

Lawrence, L.

Trumpington, B.

Lindsey and Abingdon, E.

Vaizey, L.

Long, V.

Vaux of Harrowden, L.

Loudoun, C.

Vickers, B.

Lucas of Chilworth, L.

Waldegrave E.

Lyell, L.

Ward of Witley, V.

McAlpine of Moffat, L.

Whitelaw, V.

McAlpine of West Green, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
6.35 p.m.
Baroness Seear Baroness Seear moved Amendment No. 40:
Page 3, line 22, at end insert—
("( ) In prescribing a maximum the Secretary of State shall exclude from consideration expenditure incurred on adult education.").
The noble Baroness said: In moving this amendment, I must declare an interest as I am Chairman of Morley College which is one of the oldest and, I think I can say, one of the most respected colleges of adult education. I know precisely what the Minister will say in reply to what I am about to say. He will tell me that this is a matter for the local authority and that one cannot make an exception for one particular service, such as adult education. After all, I have heard him say this a good many times this afternoon; I am sure that he is very tired of saying it, which leads me to believe that he will say it again, and that we shall hear him say it once more, or perhaps more than once.
However, I believe that there is a very special case in regard to adult education about which the Committee should be informed and of which people as a whole are probably not very well aware. As we all know, education comprises a very large part of the expenditure of local authorities. But adult education has no statutory backing. Unlike all other aspects of education—with the exception of certain parts of nursery education, which they are obliged to provide—there is no statutory obligation on a local authority to provide adult education. It is obvious that if there is one part of a service for which there is no statutory obligation and other very expensive services for which there is a statutory obligation, that service which has no statutory backing is liable to be very severely squeezed indeed.
It is particularly for that reason that we ask that an exemption should be made with regard to adult education. Not only is adult education likely to suffer very severely, but at the present time the kinds of services which adult education offers the community are quite peculiarly important. In times of unemployment and in times of very rapid industrial and social change, adult education can make a quite unique contribution. For example, the adult colleges have been providing special courses earmarked for local needs for severely disadvantaged groups of one kind and another. They have played a very great part in the literacy campaign. They have played a very great part in "second chance" courses for people who, for one reason or another, have not got off to a good start in the first career on which they embarked.
Of course, at a time of unemployment among all sections of and types within the community, the adult colleges provide the opportunity for something that gives life a meaning when one has lost one's job and sees precious little opportunity of getting another. It may be in the field of the arts or of music; it may be in a study which people have not taken up before, or in a language. Right across the whole spectrum of society there are people who are taking the opportunities that adult education offers, which are filling the tremendous gap in their lives that has been caused by unemployment.
Therefore, although at all times adult education is an exceptionally important service, today the contribution that it is making is peculiarly relevant to the needs of the society in which we live. Therefore, I beg the Minister not to turn down this amendment, which urges that adult education should be excluded. I beg to move.
Lord Henderson of Brompton: As my name is down to this amendment, perhaps I may speak before the Minister replies. I very much wish to support the noble Baroness, Lady Seear, in what she has said. I know the Minister has said that the good local authorities are not within light years of rate capping. But the trouble is, unfortunately, that the local authorities which provide adult education are not just those outside light years, but those within months, of being rate capped. Unfortunately, they are the very ones. On that ground alone there is a case for singling out adult education from other areas.
Then as the noble Baroness, Lady Seear, said, adult education is non-statutory education. This service,

391
provided essentially by the inner-city areas, fills in the interstices of the educational and social services which are not otherwise reached. So because it is non-statutory, it definitely needs singling out for that reason, as well.
It is also non-voluntary. It may have started as a voluntary service, but it is sustained by the local authorities. Therefore, when the rate capping starts the local authorities will have to maintain their statutory services; they may well be deterred from attacking the voluntary organisations through the highly organised organisations at both national and local level and, as the Minister said, they may not wish to face the unpopularity of doing so. But when it comes to adult education, I fear that there is no such lobby which will come to their rescue, and adult education may well be the first casualty of rate capping. Put briefly, and without going into the merits of what they do, which has been so well covered by the noble Baroness, I wish, for those three reasons, to support this amendment.
Lord Bellwin: Albeit briefly, I have to say that I think the case is very powerfully made. I for one am a staunch advocate of adult education, not least for the reasons that the noble Baroness, Lady Seear, mentioned; and especially at this moment in time. As she rightly assumed, the problem is—and this is not an attempt to be difficult or intransigent—that because this service is desirable, how does one equate it with some of the other worthy causes, albeit voluntary, which were mentioned earlier? It is like saying, how does one equate the need to invest in space travel with investing in medical research? It is difficult to do. It cannot be said that one object is worthy and the other is not; one is needed, and one is not needed. That is the difficulty.
Adult education happens to be a particular service which is significantly supported by income, as the noble Lord, Lord Henderson, and the noble Baroness, Lady Seear, will know. It is interesting that on average about a quarter of the costs of this service are funded from fees from students—students in the sense of the people who attend. One can be a student at any age, so far as I am aware. But there is great variation. I understand that in ILEA only some 9 per cent. of the costs are recovered from fees. Obviously there is much discretion here for each authority as to how it handles the situation.
The problem is like the earlier ones. It is not a problem of being unsympathetic, or of not accepting the need for the service. The problem is that we really do not feel that we can tell the authority that this is a section of the service that we shall take from it in terms of the right to decide on the spending. That really is it at the end of the day.
Lord Henderson of Brompton: I do not quite follow the noble Lord when he says that if you exempt adult education from rate capping, you are telling the local authorities what to do.
Lord Bellwin: But, in effect, you are because you are deciding on the priority for them. They may well decide that it is not a priority at all for them.
There is another aspect of this question. The actual cost of provision varies greatly. I have been talking
392
about just one aspect of it, but the cost of provision is also a factor; and that means the net cost of the provision, whether it be from charges, or how it is done. I know from my own experience that those costs vary.
We are anxious because in particular those authorities about whom this part of the Bill is concerned are those which most need to look at the cost of provision. If the Bill is as effective as we hope it will be, one outcome will lie in that very factor. It does not mean that you will have to do away with the service. If I were challenged in that way—I would hope that I should never be in that position in the first place—that would be my first test. I would say to my fellow elected members, "Let us sit down and look at all our costs and see whether we want to retain the adult education service just as it is now, or even expand it. It is going to cost so much. It does cost so much. What can we do to improve our efficiency so as to earn that amount of money?" If the Bill has that effect, it will be successful. If it does not, then I accept that you will have a situation where the decision will be between reducing, or lowering, a level of service, or increasing rates. If there is a limit on the rate, the authority will not be able to do that. So it would have the effect that we have said, but I do not believe that it has to be so.
Baroness Seear: When the Minister says that they will increase their efficiency and earn that amount of money, does he realise that in the case of Morley College, for instance, over 30 per cent. of the people are on special-aided fees because they are unemployed, or suffer in some other way which qualifies them for very much reduced payment? This is why it is of such great importance at the present time that these colleges should be kept open. You are not going to increase their income from the people who are already being paid for, because they are in such great need that they are being paid for out of public funds.
Lord Bellwin: It is not only a question of the cost of running Morley College, about which clearly I do not know. I am not suggesting that Morley College does not run its affairs efficiently; I do not know. If the noble Baroness says that it does, I accept that unhesitatingly; but I presume it comes within an authority. Is it ILEA?
Baroness Seear: ILEA.
6.48 p.m.
Lord Bellwin: Game, set and match. It comes within ILEA. Need I say more? If there is not an authority which manages its rates affairs better than does ILEA, then if I had a hat—though I do not have one—I should eat it. There is clearly massive scope for ILEA to look after that section if it decides that that is its priority.
Baroness David: My name should have been attached to this amendment, but instead it was put on the next amendment, Amendment No. 40A. I should like to support the noble Baroness, Lady Seear, and the noble Lord, Lord Henderson, on this amendment. It seems to me that the Minister does not know quite so much about adult education as he does about other parts of local government. He seems to me to have made some extraordinary statements. I should also

393
like to support the noble Lord, Lord Henderson, when he says that you are not telling the local authorities what to spend the money on if you are exempting the expenditure of adult education from rate capping. That seems to me to be two different things.
Adult education has had a fairly good hammering ever since, I would say, 1976, because, as the noble Baroness said, adult education is not a statutory service, and so it is really the first thing to be cut. It is not only the 12 or 20 authorities which are the particu-larly bad ones, according to the Minister, but it is many other local authorities—Conservative-controlled authorities—which have been cutting adult education for some years. It is not only at the hands of local authorities that adult education has suffered. We have heard recently that the WEA is to lose 8·3 per cent. of its grant over the next three years; and the extramural departments of the universities are to lose 14·3 per cent. of their grant over the next few years; and both of these very much deal with adults. There is no effective lobby for adult education. There was perhaps one rather small lobby. The Educational Centres Association is to have its grant removed altogether. It is a small grant of £ 18,000 but it was very important. They were just a small lobby for it. I have had a number of letters about this association having its grant taken away and I quote just briefly from one:
"The Educational Centres Association has been an important and often the only voice for adult education at both national and international levels."
As I said, adult education desperately needs a voice to speak for it. The National Federation of Voluntary Literary Schemes have written to me as well and they give a lot of help with basic education for adults, but they rely on support from the local education authorities. The national organiser of that association wrote to me asking for help. He said:
"It seems certain that if the Rates Bill becomes law not only this development work"—
that is basic education—
"but also in many cases the core provision will be seriously threatened. Our particular concern is with the voluntary sector. The voluntary organisations play a vital role in basic education, offering the informal settings and the flexibility which is often essential to that kind of work. One of their notable strengths is in working with members of the local community to meet locally-expressed needs. Because of the importance of this work LEAs have up to now done their best to maintain their support for these bodies".
I have had countless letters expressing fear and distress from those attending adult classes. They are literally terrified that these are to end or that the charges will be put up so that they cannot afford it. They know that the local authorities, if rate capping happens, may well have to put up the charges and then the charges may well be beyond their means, and that concessions may not be given to the unemployed or to pensioners. Many pensioners have written to me. I do not agree with the Parliamentary Under-Secretary, Mr. Peter Brooke, who had the temerity, as I see it, to tell LEAs to charge more next year. He said that evening classes were not being valued enough because they were too cheap. I thought that showed both remarkable ignorance and a complete and extraordinary lack of understanding.
I should like to quote just a very few sentences from the many letters I have received on the subject:
394
"So far we have lived through a world war, rationing, deprivation, high taxation, inflation and redundancy. Now our occupational therapy in the form of adult education is threatened. Why? When adult education is more important than at any other time for unemployed school-leavers, redundant men and women and OAPs, who are mentally and physically alert. Why should they be deprived of their lifeline?"
Here is another:
"I am sick with worry about the Government cut-backs in adult education. I am writing this letter because I feel very strongly about adult education. It is very important to me because I like reading and to be able to write my own letters without asking other people to do it for me. Without adult education I would not be able to do this."
No doubt that was somebody who had been having help from the Basic Literary Society. The secretary of the Federation of London Adult Students also wrote to me and he summed up the whole case for adult education:
"It serves a community with an age range of 18 to 88 years and provides educational service suitable both for beginners and those wishing to study at university level. It has special care for disadvan-taged groups and includes through its outreach departments the sick, the physically and mentally handicapped and the prisons. It also gives a second educational chance to those who for various reasons missed out when they were children. The need for adult education in our present economic, employment and enforced retirement situation is greater than it has ever been in the past 100 years of its history. We feel that the proposed legislation on rate capping and streamlining will endanger our being squeezed between the training programme and the Manpower Services Commission on the one hand and the university meritocrats on the other. It is for these reasons that we ask your help for our adult education service".
I do hope the Minister this time will show some understanding about the very special needs of adult education and will lend a more sympathetic ear than he has done so far today.
Lord Bellwin: The fact is that it is not possible to exempt from rate limitation any specific element of spending. The rate limit must cover all the authorities' spending otherwise there would not be enough rate income to cover the costs. Some of your Lordships seem to think that the authorities will have two elements to the rates: the limited part and the unlimited part. It is fundamental to the Bill that there will be only one overall rate limit, and the priorities for spending within that limit will be for the authority to decide. I have said this again and again. As regards the person who writes expressing great anxiety: "sick to death with Government cut-backs", and so on—I do not know what cut-backs he or she is referring to at all. If the authority feel that this is something they should support then they will support it.
I said at the beginning to the noble Baroness, Lady Seear, that I know a little about this subject although I am sure that the noble Baroness knows a great deal more about it than I do. But for some years I was on the education committee and I was attached to that side of it. Therefore I know something about the matter and I am an enthusiast for it, especially at this particular moment in time. I am all for it, but I just do not understand the fears expressed. The noble Baroness, Lady Serota, asked why local voluntary sector people are concerned. The same question could be asked: "Why are these people concerned?" It has to be said that ILEA, for example, has been putting out all sorts of alarmist material. Every poster one sees has some more dramatised proposals or threats; and that

395
makes people alarmed and concerned. But they do not have to be so alarmed and concerned. As it happens, ILEA spends six times more per head of the population than any other education authority in the country. If it could be said that ILEA achieves six times or even twice as much as any other education authority I should be very glad to hear of it, but it is not true.
I am sorry that I cannot help any more with this, because it happens to be a service that I feel strongly about. But in all honesty I have to say that I felt equally strongly about the mentally handicapped point mentioned earlier by my noble friend Lord Broxbourne.
Lord Briggs: May I say that I fully sympathise with the Minister in dealing with this bundle of amendments, which are all concerned with different services. Some of us feel that a debate of this kind at this stage gives a chance to talk about the relative values of services, which is a little difficult to do in the ordinary course. Leaving on one side the merits of these different kinds of services, one against the other, I think it is true to say that the different services have different degrees of vulnerability in relation to this particular service that worries me most. I have been very much involved in adult education for the whole of my life and I know that even in the best of times it is a service that suffers a great deal. In the worst of times it can be cut out altogether. I also believe that adult education, as a set of services, has been particularly important over the past 50 or 60 years in raising the quality of local government itself. Many people who have gone through adult education classes have thereby become far more effective councillors and members of local authorities, concerned with every kind of service. So I was very glad indeed to see that this particular amendment had been put down.
Leaving on one side the question of people's complaints, I have had a large number of letters from adult education students expressing a great deal of worry. Leaving that on one side, discussion on these amendments not only focuses on the value of the services—and I was very much in favour of the amendment of the noble Baroness, Lady Faithfull, also—but it gives us a chance of talking about degrees of vulnerability. And in relation to a non-statutory service, the vulnerability I think is very great indeed.
Looking to the problems of the next 50 or 60 years, and not to the record of the past, if in this society we get rid of our adult education services, or trim them beyond a certain point, we are going to find many other aspects of society will suffer in consequence. For that reason, I feel very strongly about this particular amendment.
Baroness Seear: I am sorry the Minister cannot move on this. It is different from the others for the reason that the noble Lord, Lord Briggs, has given and which I tried to give when I initially spoke to the amendment. It is its vulnerability, because it is a non-statutory service. Unless we protect it in some special way, in many parts of the country adult education will virtually disappear at a time at which it ought to be
396
expanding. So important is it that I fear that even at this late hour—and I think I am not allowed to call 7 o'clock a late hour—I intend to divide the Committee.
7 p.m.
On Question, Whether the said amendment (No. 40) shall be agreed to?
Their Lordships divided: Contents, 80; Not-Contents, 112.

DIVISION NO. 3

CONTENTS

Airedale, L.

Kilmarnock, L.

Amherst, E.

Kirkhill, L.

Ardwick, L.

Kissin, L.

Attlee, E.

Llewelyn-Davies of Hastoe, B.

Aylestone, L.

Lloyd of Kilgerran, L.

Barnett, L.

Lovell-Davis, L.

Birk, B.

McCarthy, L.

Bottomley, L.

McIntosh of Haringey, L.

Briggs, L.

Mishcon, L.

Brockway, L.

Nicol, B.

Bruce of Donington, L.

Ogmore, L.

Caradon, L.

Oram, L.

Carmichael of Kelvingrove, L.

Pitt of Hampstead, L.

Cledwyn of Penrhos, L.

Ponsonby of Shulbrede, L.

Collison, L.

Prys-Davies, L.

Darcy (de Knayth), B.

Robson of Kiddington, B.

David, B.

Rochester, L.

Dean of Beswick, L.

Ross of Marnock, L.

Denington, B.

Sainsbury, L.

Diamond, L.

Seear. B. [Teller.]

Evans of Claughton, L.

Segal, L.

Ewart-Biggs, B.

Serota, B.

Faithfull, B.

Shackleton, L.

Fisher of Rednal, B.

Simon, V.

Fulton, L.

Stallard, L.

Gainsborough, E.

Stedman, B.

Gallacher, L.

Stoddart of Swindon, L.

Gladwyn, L.

Stone, L.

Graham of Edmonton, L.

Taylor of Blackburn, L.

Grey, E.

Taylor of Mansfield, L.

Grimond, L.

Tordoff, L.

Hampton, L.

Underhill, L.

Hanworth, V.

Wallace of Coslany, L.

Harris of Greenwich, L.

Walston, L.

Henderson of Brompton, L.

Wedderburn of Charlton, L.

[Teller.]

Wells-Pestell, L.

Hooson, L.

Whaddon, L.

Hughes, L.

White, B.

Jacques, L.

Winchilsea and Nottingham,

Jeger, B.

E.

John-Mackie, L.

Young of Dartington, L.

NOT-CONTENTS

Airey of Abingdon, B.

Colwyn, L.

Allerton, L.

Cox, B.

Auckland, L.

Craigavon, V.

Avon, E.

Cullen of Ashbourne, L.

Belhaven and Stenton, L.

Davidson, V.

Bellwin, L.

De La Warr, E.

Beloff, L.

Denham, L. [Teller.]

Belstead, L.

Digby, L.

Bessborough, E.

Dilhorne, V.

Birdwood, L.

Drumalbyn, L.

Boardman, L.

Eden of Winton, L.

Bolton, L.

Elles, B.

Boothby, L.

Elton, L.

Brabazon of Tara, L.

Fairfax of Cameron, L.

Bridgeman, V.

Fanshawe of Richmond, L.

Brookes, L.

Ferrier, L.

Brougham and Vaux, L.

Fraser of Kilmorack, L.

Broxbourne, L.

Gardner of Parkes, B.

Campbell of Alloway, L.

Geddes, L.

Carnegy of Lour, B.

Gibson-Watt, L.

Chelwood, L.

Glenarthur, L.

Cockfield, L.

Grantchester, L.

Coleraine, L.

Gray of Contin, L.

397

Greenway, L.

Murton of Lindisfarne, L.

Hailsham of Saint

Napier and Ettrick, L.

Marylebone, L.

Nugent of Guildford, L.

Halsbury, E.

Onslow, E.

Harmar-Nicholls, L.

Orkney, E.

Hood, V.

Pender, L.

Hornsby-Smith, B.

Peyton of Yeovil, L.

Hylton-Foster, B.

Plummer of St. Marylebone,

Inglewood, L.

L.

Ingrow, L.

Portland, D.

Kaberry of Adel, L.

Rankeillour, L.

Kinloss, Ly.

Renton, L.

Kitchener, E.

Rochdale, V.

Lane-Fox, B.

Rodney, L.

Lawrence, L.

Romney, E.

Lindsey and Abingdon, E.

St. Davids, V.

Long, V.

Sandford, L.

Loudoun, C.

Sharpies, B.

Lucas of Chilworth, L.

Skelmersdale, L.

Lyell, L.

Stamp, L.

McAlpine of Moffat, L.

Swansea, L.

McAlpine of West Green, L.

Swinfen, L.

McFadzean, L.

Swinton, E. [Teller.]

Mackay of Clashfern, L.

Thomas of Swynnerton, L.

Macleod of Borve, B.

Thorneycroft, L.

Marley, L.

Townshend, M.

Marsh, L.

Tranmire, L.

Massereene and Ferrard, V.

Trefgarne, L.

Maude of Stratford-upon-

Trenchard, V.

Avon, L.

Trumpington, B.

Merrivale, L.

Vaux of Harrowden, L.

Mersey, V.

Ward of Witley, V.

Monk Bretton, L.

Whitelaw, V.

Monson, L.

Young, B.

Mottistone, L.

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

Lord Denham: In moving that the House do now resume, I think it would be fair to tell the Members of the Committee that we shall not resume the Committee stage of this Bill before 8 p.m. I beg to move that the House do now resume.
House resumed.

Agriculture (Amendment) Bill
7.10 p.m.
Lord Renton: My Lords, I beg to move that this Bill be now read a second time. It is a great pleasure for me to attempt to pilot through your Lordships' House a Bill which has been successfully piloted through the House of Commons by my honourable friend Mr. Edward Leigh, the new Member for Gainsborough. I need not take up much of your Lordships' time on this Bill. It simply amends existing legislation in two minor ways which I will try to explain.
Clause 1 extends the scope of Section 64 of the Agriculture Act 1967. That section allows grants to be paid by the Minister of Agriculture, if the Agricultural Credit Corporation has to meet guarantees given as security for bank loans to farm businesses; and farm businesses in this context include co-operative marketing businesses. To be eligible for a guarantee, a co-operative association must consist of members directly engaged in agricultural or horticultural production.
But, since the original legislation was passed, co-operative marketing businesses have developed a more
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complex structure. There are now some whose members are themselves co-operatives or which are a mixture of co-operatives and individual farmers who are not members of a co-operative—a sort of hybrid affair. They have acquired the name "federal", although as a modest student of constitutions I do not really know why. But one can understand more easily another expression used to describe them. They are called "second-tier co-operative societies". Strangely enough, I am told that there may be third- or even fourth-tier organisations, but I must confess that my imagination boggles at that possibility.
A number of newly formed first-tier co-operatives under the original legislation have benefited from the provisions of the Act, and have been able to obtain bank loans because of the guarantee arrangements when they could not have done so without them, because they did not have sufficient collateral security to offer. The Bill would, of course, extend those operations to those other co-operatives that I mentioned; and it goes without saying that those other co-operatives might also find themselves in the similar difficulty of obtaining the requisite collateral for a bank guarantee. The change in the law in Clause 1 would enable the Agricultural Credit Corporation guarantees to be given on loans to them in exactly the same way as at present for first-tier co-operatives.
Your Lordships will naturally wish to know whether this Bill will increase Government expendiutre, although your Lordships have no control over Government expenditure directly. But I can assure you that any costs which arise from extending the scope of the loan guarantees will be contained within the present financial ceilings set for the scheme, which have not been fully used and have not been extended—it is rather remarkable—for the past 17 years since 1967. Similarly, the costs of administration will be contained within existing levels; in other words, the present method of administrating this will take this small extension in its stride. So much for Clause 1.
Clause 2 is quite different. It deals with agricultural statistics and makes two small but important changes to the current arrangements for the collection of statistics relating to farming. As to subsection (1) of Clause 2, I should tell your Lordships that the committee presided over by the noble Lord, Lord Northfield, examined trends in agricultural land acquisition and occupancy as they affect the structure of the agricultural industry and they published their report as long ago as July 1979. That report stated that the information collected about land ownership and occupancy was not adequate and more information was needed to be made available.
I wonder whether I may interpolate here a personal reminiscence which will perhaps refresh the memory of the noble Lord, Lord Walston. In the Fens, which formed about a third of my previous constituency of Huntingdonshire, one found that it was an awful nuisance not to be able to find out who owned the privately owned smallholdings, of which there are a great many in the Fens. Because of the difficulty of finding out who the owners were, although the occupiers were generally known, it became difficult to obtain contributions from owners who had an obligation to provide them for improving the Fen droves, and sometimes major drains in the Fens, also.

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It was simply this lack of information which was an inhibition.
The present law prevents that information from being obtained, because the Minister's powers are limited to obtaining data relating to the names and addresses of the owners and the occupiers of land. I must confess that it would seem from one's experience that even the present law is not proving effective to provide the information.
What is proposed in Clause 2(1) of the Bill is to extend Section 1(1) of the Agricultural Statistics Act 1979 in a way that would enable more information to be sought about the owners and occupiers of agricultural land, and—this is important in relation to the Agricultural Holdings Bill, which is now going through the House and about which we had such controversial discussions to which my noble friend Lord Belstead, who I am glad to see on the Front Bench, valiantly replied—would enable the terms on which the land is occupied to be ascertained through the statistics. I really think that there are great advantages, therefore, in subsection (1) of Clause 2.
The next proposal in this area is that subsection (2) of Clause 2 should repeal Section 1(5) of the Agricultural Statistics Act 1979. That gave powers of entry by officials to agricultural businesses to check on statistical information. At first sight, when I realised that that is what it did, I had some doubts about it. I wondered how the statistics were to be effectively checked and verified unless there was a power of entry. But a review of all the statutory powers to enter business premises has been undertaken, and this is one of the pieces of legislation which that review indicated should be repealed. Naturally, one goes along with anything which preserves the sanctity of people's premises. If those in power feel that this is something which we can do without, so be it. It is not, therefore, for me, as the promoter of the Bill, to protest. Indeed, I go along with it and submit it to your Lordships. Having said, I hope, all that is needed to give this modest Bill a Second Reading, I beg to move.
Moved, That the Bill be now read a second time.—(Lord Renton.)
7.21 p.m.
Lord John-Mackie: My Lords, we are indebted to the noble Lord, Lord Renton, for putting the Bill before us. A few days ago I met him in the corridor and said to him how important the Bill was. He said "It's a fiddling little thing and will go through in a minute or two". The noble Lord has taken rather more time than the one or two minutes which he suggested to me! I am pleased to look again at the Agriculture Act 1967. I spent many hours in Committee helping to pilot that Act through the other place.
I see the necessity in Clause 1 of making sure that one-tier, two-tier or three-tier co-operatives are able to use the collateral that they have. The noble Lord said that there are co-operatives within co-operatives and that there are farmers in the co-operatives who are not members of the co-operatives. This clause will give them the right to provide the collateral in order to take up money which, I was surprised to hear the noble Lord say, has not been taken up since 1967. It is not like the farming community to miss anything of that
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nature. Therefore we give Clause 1 of the Bill our blessing. The noble Lord said that the cost of administration will not create difficulties.
Turning to Clause 2, it is interesting to note that the promoter of the Bill is interested in the information which we have about land ownership and land tenure in general. We all know that the Northfield Committee suggested that this information should be obtained if there is to be any help, as the noble Lord so well put it, under the Agricultural Holdings Bill which, I presume, will come back to this House soon. It is interesting that the promoter of the Bill wants to amend that part of the Agricultural Statistics Act 1979 which relates to access in order to check statistics. The noble Lord asked, who was he to quarrel with this point?
How will statistics be checked? Last year I was in the United States of America and examined the payment-in-kind programme which they are carrying out. I was invited by a federal agent and a county agent to look at the system. It was a simple, not an elaborate system. They had plans of all the farms. Those plans were beautifully filed. They also had maps. They can fly over the ground in a helicopter and take infra-red photographs. If any photograph shows that there is a crop where none should exist it is checked as easily as that. This scheme is operated in a big county in Minnesota and a large staff is not required. Anything which helps us to obtain information about land tenure and land ownership will be of great help. We give this small Bill our blessing.
7.24 p.m.
Lord Walston: My Lords, I had not intended to detain your Lordships by speaking on this Bill, but I cannot resist the temptation to speak on an agricultural Bill where I find myself in agreement not only with the noble Lord, Lord John-Mackie, but also with all noble Lords opposite—all three of them. This is a good Bill. It is not a big Bill, but it is a useful one. Anything which can be done to encourage co-operation of any kind among farmers is good. Many attempts have been made by many governments. None of them has had the success which it deserved. If this Bill will encourage more co-operation, particularly in marketing, which is one of the most important aspects, it deserves all our support.
Turning to the statistics, when the noble Lord, Lord Renton, referred to me in his speech I thought that he was going to say that it was very important to get hold of the owners of the land in the Fens in order to obtain contributions for, I thought he was going to say, his party in the general election of 1945, in which he roundly defeated me. However, the noble Lord told us that the contributions are to be made for a much more laudable purpose than that. We in this country are very backward over the collection of statistics, not regarding cultivation of the land but regarding land ownership. The Bill will make the gathering of that information more effective and will give us more information. For that reason alone the Bill should be supported.
I do not feel very strongly one way or the other about the checking of statistics. I do not believe that there is any need to check this type of statistic. Not many people will lay claim to a larger amount of land than

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they own because they might find themselves having to pay drainage rates, or some other unpleasant impost. Nor do I believe that any landowner would deliberately pretend that he owned less land than he did, because then he might receive less rent for it than would otherwise be the case. So there is a self-checking mechanism. If the responsible authorities do not require any kind of check, well and good. I would not press for them to retain the powers they already have but do not use. Therefore I join the noble Lord, Lord John-Mackie, in supporting this Bill, and I am grateful to the noble Lord, Lord Renton, for introducing it in such a knowledgeable, simple and relatively brief way.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, during my noble friend Lord Renton's speech in introducing this Bill my noble friend explained that the Minister, with the approval of the Treasury, is empowered to make grants towards the cost of fulfilling bank loan guarantees to agricultural and horticultural businesses. My noble friend went on to explain how Clause 1 will enable grants to be made to a wider range of co-operative marketing businesses. For the purpose of this scheme the Minister recognises the Agricultural Credit Corporation as an appropriate body to provide guarantees.
There is just one point which arises at this moment from the speech of the noble Lord, Lord John-Mackie. He said that he was surprised that the farming community, who can always recognise a good thing when they see it, had not had to take up very large sums of money. My noble friend Lord Renton will put me right, if need be, when he closes our debate but, as I understand it, it is not that the farming community have forgone these amounts of money but that, owing to the very good administration of the scheme, the guarantee has practically never had to come into play. My figures show me that since 1967 the loan guarantee scheme has guaranteed £16 million to the farming community. Therefore the noble Lord is absolutely right in his thesis about the business acumen of the farming community. However, out of that amount, only £500,000 has had to be paid over the years by way of grant on all the loans guaranteed by the Agricultural Credit Corporation. It was that to which my noble friend in introducing the Bill was referring.
On behalf of the Government I should like to pay tribute to the work of the Agricultural Credit Corporation and its staff. Its chairman is my noble friend Lord Stodart of Leaston. The corporation has a small team of highly professional and committed staff. They have worked closely over the years with the farming industry, the banks and the ministry to ensure that assistance is made available in suitable cases. The figures I have just given show that this scheme is professionally and very well run, with great skill and care.
The other main part of the Bill is concerned with the monitoring of the effectiveness of the Agricultural Holdings Bill; that is really what Clause 2 comes to. We now have the Bill; which is before another place, and, as my noble friend explained in his opening speech, we do not have very effective statistics. My noble friend explained in a very clear way, from his
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personal experience, how those statistics need to be improved. If I may again, in a sense, anwer a question put by the noble Lord, Lord John-Mackie, my information is that it has never appeared to the Government that the power of entry and inspection for the purposes of collecting statistics is needed. It is a power that has never been used. If this Bill passes into law, I do not believe that we shall start to add to the census a lot of questions about statistics.
I believe that we are more likely—although this has still to be decided—possibly to add one or two simple questions to the census. But types of ownership and occupancy are detailed matters which will call for more detailed studies, which have to be directed to occupiers, to owners, and to their agents where necessary. I believe that we shall therefore need some rather more in-depth survey questions. I repeat that we have no cause to believe—possibly for the reasons put forward by the noble Lord, Lord Walston—that we need the power of entry. We are very glad that it would be removed by this Bill.
On behalf of the Government, perhaps I may say that this is a very useful Bill. It will provide guaranteed finance for marketing agricultural and horticultural produce on a wider basis than before. It will also enable us to monitor the details of land ownership in the way that we have been discussing.
I will add only one other point that has not been mentioned in this short debate. The provision in Clause 1 for additional support for more complex forms of co-operatives is a particularly welcome step at the present time, for the reasons which the noble Lord, Lord Walston, gave in his speech. The Government feel very deeply about this. We have set up the organisation Food from Britain, and one of its particular objectives is to support co-operation in marketing. I have great pleasure in joining other noble Lords who have spoken on this Bill in giving it a very warm welcome, and perhaps I may express the hope that it will pass rapidly through your Lordships' House.
Lord John-Mackie: My Lords, before the noble Lord sits down, I have a question concerning who makes the statistical return in June. Is a tenant to be asked who is his landlord? If he is dealing through an agent, the tenant may not know this. Will a landlord have to make a return? How will it work?
Lord Belstead: My Lords, this has still to be decided. What I was venturing to say in my remarks was that in putting Clause 2 into effect I do not believe it will be good enough simply to add a question or two extra to the June census. To put the real intention of Clause 2 into effect—and I have not discussed this with my noble friend Lord Renton—I believe that we shall need to have rather more detailed studies and questions put to owners, to occupiers, and to their agents where necessary. I repeat that the Government do not foresee that that will in any way need the power of entry, and I repeat that I am glad that it is being done away with.
7.34 p.m.
Lord Renton: My Lords, on the last point raised by the noble Lord, Lord John-Mackie, perhaps I may be allowed to add that the Bill as it stands makes it quite

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clear that either the owner or the occupier may be asked for this statistic. It may be that, on that, it will be enough to leave the Bill as it stands. Indeed, I myself rather hope so, because I believe there is a case for flexibility here. I believe that that, together with what my noble friend Lord Belstead has said, is the answer to the noble Lord, Lord John-Mackie.
I am most grateful to the noble Lords, Lord John-Mackie and Lord Walston, for their support of this Bill and for the interesting remarks they have made. I am sure all of us are grateful to my noble friend Lord Belstead for the things he has told us, which are of course of great significance in relation to this Bill. I think it is right, for the sake of clarity, that one should emphasise that it is only when there has been a default in repayment of the loan that the guarantee arrange-ments have to come into force. Perhaps I should have made that more clear in presenting the Bill.
It comes to this, really. Under the 1967 Act Parliament provided that the Minister might pay up to £300,000 in any one year in support of guarantees—that is, where there is default. To that could be added money unspent in previous years up to a maximum of £600,000. That would have meant a very large sum—£300,000 a year over 17 years—but, as my noble friend Lord Belstead has pointed out, it is very remarkable and highly creditable to all concerned that in those 17 years defaults have amounted to only £500,000 in relation to grants on guarantees amounting altogether to £ 16 million. So there is a very full justification for confidence on this financial aspect of the matter.
I was very interested in the description by the noble Lord, Lord John-Mackie, of the man with the helicopter amplifying the statistics and information he was asked to give. It tempts one to remind the Government that everyone hopes that, one day, there will be complete land registration of all land and buildings in this country. We proceed very slowly and cautiously in this matter, and it may be that such is a long time ahead. But by making that point the noble Lord, Lord John-Mackie, at least enabled us to understand its feasibility. That is all that I need say, except to repeat my thanks.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
The Earl of Swinton: My Lords, I beg to move that the House do now adjourn during pleasure until 8 o'clock.
[The Sitting was suspended from 7.38 until 8 p.m.]

Rates Bill
House again in Committee on Clause 3.
The Deputy Chairman of Committees (Lord Wells-Pestell): In calling Amendment No. 40A, I should inform the Committee that the name of the noble Baroness, Lady David, was printed in error in respect of this amendment.
Viscount Ridley Viscount Ridley moved Amendment No. 40A:
Paged 3, line 22, at end insert—
("( ) In prescribing a maximum the Secretary of State shall exclude from consideration exceptional expenditure incurred on the enforcement of law and order.")
The noble Lord said: I am sorry that the noble Baroness, Lady David, has deserted me and so, apparently, has everyone else. I was a little surprised to see her name underneath mine and I understand that her other interests are paramount. This is the last English sacred cow to be paraded before the Committee tonight, although there may be a Welsh one to follow. It is in the nature of a probing amendment.
Your Lordships will doubtless be aware that outside London police expenditure is subject to a 50 per cent. grant from the rate support grant fund. Your Lordships will also be well aware that expenditure of the rate support grant is a finite sum of money. However, the operations which the police are required to carry out are not in any sense under the control of the local authority which pays half the bill. In my opinion, that is perfectly right and it is not a matter of dispute at the moment. However, it does mean that there is possibly a very large bill for exceptional and unforeseen expenditure on police forces generally which could not have been foreseen by a local authority. Therefore, that is quite unlike all the other amendments in the group which we have been discussing, where all the various expenditures are matters within the discretion of the local authority to support, or not to support, as it may wish. Authorities have no option but to pay for a share of the police bill as the Home Office may decide.
In discussing Amendment No. 36 my noble friend Lord Bellwin said that the decision for specific spending will be that of the authority itself and no one else. This does not apply to police force spending, and, as I have said, by its very nature it is likely to come after the GRE has been decided and, therefore, the rate capping possibilities have also been decided, or so we are led to believe. It may even come after the local authority has fixed its rate for the year.
I give only one example. Again, let us not be drawn into a dispute which has nothing to do with this Bill. The county of Nottingham—much in the news at the moment—publicly stated last week that its bill for excess police costs up till tonight, 30th April, was expected to be £ 15 million, which it had not budgeted for. Of that, 50 per cent. is likely to come from the Government as a 50 per cent. grant out of the finite rate support grant fund. The other will have to be found—or so I assume, and the council assumes; and it is very worried—from the rates. It might be said that this sum will be saved by the other police forces which have sent men, at the request of the Home Office, to Nottingham or elsewhere. But that is not entirely the case because in the other counties the policemen who remain are running up a substantial bill for overtime in order to carry out normal duties. Therefore, there is still a large bill to be met for them.
It is probably true to say, when we talk about targets, that the Government will "disregard"—another word that I dislike—excess police expenditure for the purpose of grant penalties under the 1982 Act. They will not be penalised. However, we are talking about

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the Bill now before us and not the 1982 Act. What will happen if Nottingham, or any other authority, is faced with unexpected and substantial expenditure and receives a bill of this kind for extra police activities for which it had not budgeted? If it is on the verge of being rate capped for other reasons would this put it over the brink, so to speak, so that it is capped and everything else suffers? What are the Government prepared to do about this, bearing in mind that I must again say that expenditure incurred is totally outside or, as the Scots would say, outwith the control of the local authority? I hope that the Government can reassure us that they will take special steps to help.
I should like to see at some stage, somewhere, special provision for such expenditure written into the Bill. There may well be—I hope there never will be—a possibility of a future Government who are less sympathetic to police activities of this kind and would not exclude a council which had to pay such a bill. All sorts of possibilities arise. It is worthy of consideration that we should try to find some way in which expenditure of this nature could be exempted from all possibility of penalties under this Bill. I beg to move.
Baroness Birk: If for no other reason—although there are reasons—I rise to support the amendment so that the noble Viscount does not feel totally deserted. In the final analysis he is absolutely right that law and order must be a national responsibility. In spite of there being local police powers, of which we are all well aware, law and order is nationally defined. As a priority of the present Government I should have thought that this is one area where the Government would accept an amendment. The amendment is entirely different, as the noble Viscount explained, from the other amendments which we have discussed and which, unfortunately, received rather a shabby reception from the Government.
As matters stand at the moment, we have seen many instances where exceptional expenditure has had to be provided for policing, and it is absolutely wrong that the local authorities should be landed with this expense. In this instance it seems to me that it is not possible to say "Well, the authorities have a choice", as the Minister said concerning the other services which we have suggested should be excluded from the expenditure constraints. There is no choice in this case. These are occasions when the police are called out and moved from one place to another and where considerable expenditure can be incurred which falls on the local authority. Therefore, we on these Benches certainly support the noble Viscount on this amendment.
8.10 p.m.
Lord Harris of Greenwich: I say right at the outset, and the Minister may be about to say this for all I know, that this is not a new issue. Local authorities have felt for a long time that when issues of this sort arise in their areas and the chief constable decides that he must bring in a substantial number of policemen from other forces that it is quite unreasonable that that local authority should have to pick up the bill.
I remember dealing with just such an issue in the North of England when a very long trial took place which required very heavy policing because of the
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character of the charges facing the people who were standing trial. I remember that I then received very strong representations from the local authority concerned, saying it was quite unreasonable that their ratepayers should pick up the bill, particularly in view of the character of the charges which the people concerned were facing. I had to resist it for what I then regarded as good and sufficient reasons.
But what is involved in this Bill raises wholly different issues. Of course, what we are facing here is the possibility that a local authority could find itself rate capped as a result of something over which, as the noble Viscount pointed out, they would have no control. Let me give two or three examples—two of which have indeed already been touched on today. Applications have already been made made to the Home Secretary concerning the expenditure of the Thames Valley Police. I know there was some contact involving the Thames Valley Police Authority and I believe some undertakings were given by the Department of the Environment. But the fact of the matter is that the Thames Valley Authority, by definition, is not a local authority; it is a police authority. It simply passes on the bill to the shire counties which are constituent parts of that force's area. In the light of such a situation it seems to me that there could be created an entirely intolerable situation in which, as a result, the local authorities concerned could find themselves rate capped under other provisions of the Bill.
The noble Viscount has touched on the case of Nottinghamshire. Nottinghamshire, of course, is not by any means alone. The same problem is going to arise in Derbyshire; and it is going to arise so far as a number of other police authorities are concerned, too. Perhaps I may just put this point to the Minister. It is not even for the police authority, in the final analysis, to make these decisions. It is entirely a matter for the chief officer of police. Indeed, it is essential that it is a matter exclusively for the chief officer of police; otherwise one can imagine arising an extremely dangerous situation where a police authority—which in one or two cases could be a committee of a county council, with the appropriate numbers of magistrates—could attempt to give instructions to the chief officer on how he should, in fact, carry out his policing responsibilities. I hope that the Minister will be sympathetic to the case put by the noble Viscount. I very much hope that, if this amendment is not phrased in appropriate language, at a later stage the Government will come forward and deal with this question because it raises anxieties involving not only the local authorities, but many chief constables, too.
The Earl of Onslow: I should like very much to support my noble friend Lord Ridley on this matter. I think the reasons are three-fold. First, as has already been said, the use of the word "exceptional" in the amendment takes it outside the scope of the other amendments which we have been discussing, which basically, were concerned with whether a normal ongoing situation should be exempt from expenditure controls.
I heard on the wireless on Saturday, driving wherever I was driving, a discussion about the Nottinghamshire police. They have had to cancel all

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their capital expenditure, unless they get their money paid. They have had to cancel orders for pieces of equipment for which they are very pushed. That is something which really should not arise because of an industrial dispute or any law and order situation.
There have been strains on the police budget for Greenham Common. It is a very happy situation for the Surrey police, who do not have an American nuclear base or any coal mines in their area. They are less likely to have those sorts of exceptional circumstances. So why should the ratepayers of the Thames Valley area, or Nottinghamshire, be penalised because of what are quintessentially national problems? That is the first point.
The second point is this. If my noble friend the Minister says, "Ah, but we will make a special grant," and if we allow discretion in this matter, there is liable to be an element of financial control over the actual deployment of the police. It is possible to think of a case where a massive police presence is needed because of what the law says. There may be a need for a change in the law, or the Government may be in sympathy with the people who are pressing for it; and I am specifically avoiding saying one party or another, because that would be unfair.
But if we allow this particular amendment to go through—and I hope that it does—or something very like it, we shall take away an element of political choice from the deployment of the police; and this is so important. It makes it much easier for people to take decisions. We should always remove any temptation to apply political control to the police; it is too dangerous a concept in this country.
Lord Hooson: I want to speak very briefly in support of this amendment because it seems to me that unless this amendment, or something like it, is passed, with the present pressures upon our society we shall get that much closer to a national police force, which I think would be highly regrettable. One of the unperceived achievements of Mr. Arthur Scargill is that he has almost built a national police force single handed in our country, which is one of the things I do not think he had in mind when he began his present action. But one can see that unless the local authorities know where they are in relation to the kind of pressures and the kind of demands that are undoubtedly made, we shall have the alternative demand, which is for a national police force. For a variety of reasons, which I do not have to go into now, I think that would be a highly regrettable step.
Lord Bellwin: There is no question about the Government being sympathetic to what is being said here; they are very much so. May I say at once that we shall always be prepared to look carefully at any case put to us for special treatment for exceptional items of expenditure on law and order. For example, my right honourable friend the Secretary of State has announced that additional expenditure on the costs of policing the current industrial action in the coalfields which actually fell in 1983–84, will be exempted from grant holdback, and that he is now considering further representations from the local authorities that such expenditure in 1984–85 should also be exempted; and
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he will reach a decision on that before implementing holdback for this year.
The Government have also had representations about the cost of policing Greenham Common. There we have decided it would be appropriate to pay the police authority £1½ million from the contingency reserve, since it was not possible to give that expenditure, which is occurring in just one area, the exemption from grant penalties which must be on generally applicable principles. In short, our view is that the case for providing assistance for any particular circumstance, and, if there is a case, the type of assistance, should be looked at on its merits. But the problem arises in trying to provide a general exemption of the kind which the amendment envisages for exceptional events which, by their nature, could take any number of unpredictable forms. As it happens, Clause 3 does provide for individual circumstances to be taken into account in considering applications for a redetermination of an expenditure level, and in our view that is the way forward in these circumstances.
May I just put the record straight. It cannot be right to say that an authority may be rate capped because of unforeseen expenditure on policing. Decisions on rate capping will be made on the evidence of budgets, and by common consent the expenditure concerned here is not budgeted for. Therefore, I cannot see that a problem arises specifically in relation to rate capping. I acknowledge, as I have just said, a problem in relation to targets I have said—or, if I have not, I am saying it now—that we are in fact considering the representations which we have received on that matter. As my noble friend Lord Ridley rightly says, there is a point here, and it is not in the same area as the earlier ones. We think at the moment that Clause 3 does take care of it, for the reasons I have given, and certainly it is not a reason for rate capping. Authorities which have that fear do not need to have it.
It might also be said that the police authorities, too, have to be concerned about looking for efficiencies. For example, the Audit Commission showed the possibility of civilians doing certain routine jobs, which could save individual police authorities quite substantial sums. That is in general terms. The important points are, first, that the situation cannot lead to rate capping for the reasons that I have given; and, secondly, of course we would always look at the special circumstances which no one can foresee. The records show that we look at such cases with great sympathy and understanding, as we do not want to impose a burden on an authority for events which are outside its control, as has rightly been said.
I hope with that assurance my noble friend will feel reasonably satisfied. If he would like to take the matter further in discussions, I shall be pleased so to do.
Viscount Ridley: I am grateful to those who have spoken in this brief debate. I wish personally to emphasise what has been said by my noble friend Lord Onslow and by the noble Lord, Lord Hooson. Whatever we do, let us not move any closer than we must to the national police force. That really is a thing that we all wish to avoid.
As I said, this is a probing amendment. I should like to take up my noble friend's offer of further

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discussions. I am sure that he and his Government would be utterly reasonable. What we are worried about is a future Government. That is why a safeguard seems to us to be necessary. My noble friend spoke about rate capping on the evidence of budget. We accept that. But the next year the budget will be increased in order to provide for that which has been lost. As my noble friend said, Nottingham has failed to do whatever it could not do and therefore it will recoup next year, and that will bring it into the orbit of rate capping. I am not totally happy, but I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.21 p.m.
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 40B:
Page 3, line 22, at end insert—
("( ) In prescribing a maximum the Secretary of State, having regard to the special needs of Wales in respect of bi-lingual education in its schools, shall exclude within the Principality of Wales expenditure incurred in this connection.")
The noble Lord said: I believe that I am the last in the line in this batch of amendments, so I hope that the noble Lord the Minister can see his way clear to meet the principle embodied in this amendment without others coming along and citing it as a precedent.
It is not clear to many of us in Wales why this Bill should apply to the Principality. According to the latest Public Expenditure White Paper, local authority expenditure in Wales has conformed more closely to the Government's targets than have the English and Scottish authorities' expenditure. The Welsh local authorities have behaved very well financially. But the Secretary of State for Wales made it clear in the other place that Wales is not to be exempt from the provisions of the Bill. The reasoning for that decision is not at all clear.
Be that as it may, this amendment calls attention to a particular Welsh interest. It is a problem different from the problems facing any other part of the United Kingdom, apart possibly from the Highlands and Islands of Scotland. We are dealing with a national asset in this amendment—not simply with a client group or with another service but with a national asset. I think that the Welsh Office is fully aware that the cost of maintaining the Welsh language and supporting education through the medium of the Welsh language is not reflected in the rate support grant. I want a recognition of this problem to be brought to bear in this Bill.
There is a strong body of opinion in Wales which considers that additional expenditure necessarily incurred in implementing education through the medium of the Welsh language in Wales should not be taken into account in arriving at the local authority's maximum expenditure.. Governments over the past quarter of a century have accepted that they have a national duty to legislate for and to support the Welsh language. That is not simply an ideal but it has been for the past 25 years an aim of policy. I would accept that this Government, up to a point, have not been unsympathetic to the claims of the Welsh language.
To weigh up the pros and cons of this amendment, it is essential to get an idea of the background against which any judgment must be made. All the official
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documents and surveys relating to the Welsh language published during the past 84 years show that it is facing a crisis not of confidence but of existence. Will this supreme asset—we in Wales regard it as a supreme asset and I am sure that there are many in the United Kingdom who do, too—survive or wither away? Legislation over the centuries, up to about the past 25 years, and the economic factors of this century have all, in one way or another, had an adverse effect on the Welsh language. But, nevertheless, there are some grounds for thinking that we may in Wales be arresting the decline of centuries.
A limited renaissance may be under way, but it has to be fully supported in the schools of Wales. That renaissance could be weakened substantially, or possibly even crippled, if the rigid provisions of this Bill as they stand were to be implemented against any one or more of the Welsh local authorities. As I said, there are many people in Wales who see this Bill as a substantial threat to the Welsh language. A week ago the president of the National Union of Welsh Teachers was reported in the Western Mail as saying:
"Cuts in the education services, including those threatened by the Government's rate-capping plans, will curtail the amount of Welsh taught in schools".
He feared in particular that the local authorities would be tempted to implement cuts in school transport and staffing levels in particular, and these would have particularly adverse effects on the teaching of the Welsh language, as many of the schools, particularly the secondary schools, are centralised. If this situation were to come about, the effects of this Bill would have fallen disproportionately heavily on Wales. It would build up a crop of problems for the Home Secretary and the Secretary of State for Wales which would not be underestimated. Certainly this amendment is calling for a separate and a different treatment; but then we call for that treatment to deal with a genuine Welsh interest. If the Government were to accept the principle, or to assure us that the principle accepted in this Bill is taken into account, that would not be establishing a precedent. The recognition of specific Welsh interest has emerged in a number of Acts of Parliament during the past 25 years and it emerges very clearly in at least half a dozen provisions in the Local Government, Planning and Land Act, 1980. Again, if the principle in this amendment were to be accepted, the total expenditure would be modest and it would not affect in any way the macro-economic management of the economy.
I hope that I have done justice to this amendment. There is no one to desert me but there are a number of local Peers here to support me. I hope that I have given expression to a deep anxiety that is felt in many parts of Wales, particularly in those parts where the Welsh language is still at its most polished. I beg to move.
8.32 p.m.
Lord Hooson: The noble Lord, Lord Prys-Davies, has done a service to Wales by raising this particular problem in this Committee in relation to this Bill because the maintenance of minority culture at a time of modern mass communications is a very, very difficult one, as we have known in Wales for centuries. The English are now experiencing it in relation to Americanism in their own lives. But in fact one of the

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remarkable features of Welsh society where you have this determination, quite rightly, to maintain Welsh culture and the Welsh language on which it is based, is that it has gone on for so many years with so little dissention. As a matter of fact, the scope for dissention in Wales on this subject has been enormous. It is to the credit of the present Government—and I do not often pay them compliments—that one of the better aspects of their policies has been the way it has assisted in the Welsh language, on television, radio and in the publication of Welsh books. Its efforts there compare very favourably with any previous Government.
Having said that, it would obviously leave possibilities of dissention within local government, if special provision is not made for the considerable additional expenditure which bilingual education involves. It would be a very short sighted government indeed which would allow that to happen. I think the noble Lord, Lord Prys-Davies, has, in a very short space of time, adumbrated the reasoning that is behind his thinking on this amendment. I entirely support it. The Government would be very wise to take on board what he has said today and to make special arrangements for this particular problem in Wales.
Baroness White: I think I should also add a word briefly in support of my noble friend Lord Prys-Davies because as he and the noble Lord, Lord Hooson, have made quite clear this is a particular problem of the Principality. It affects no other part of the United Kingdom. As my noble friend Lord Cledwyn of Penrhos knows very well indeed—he having been a Secretary of State for Wales—the two languages have equal validity in the Principality, and official documents are all produced in both languages. It is part of the recognised education system that Welsh should be taught at the primary level, even in areas like the County of Gwent, for example, where there is a very small minority of Welsh speakers and where it is recognised that children there should also have an opportunity of learning the language.
My one hesitation about the amendment proposed by my noble friend Lord Prys-Davies is that it is too narrow because it refers specifically only to education in schools, whereas if the education in schools is to be thoroughly successful then there has to be a measure of education in the Welsh language also for adults. By happy coincidence it so happens that this very morning there is a very lengthy review in the South Wales newspaper, the Western Mail,of the report of the Welsh Office plainly just issued in time for this brief debate of ours. It is a report on the teaching of Welsh as a second language to adults. Most people who have studied the progress of Welsh language education in the Principality will recognise that, while a great deal of time and effort is put into teaching at primary level, unless there is some support in the home background, it is very difficult for children to maintain the proficiency which they have achieved in the early stages.
Therefore, as the report on teaching Welsh to adults stresses, it is of considerable value in buttressing the formal education in the schools if adult education, adult classes, are provided for patents. There is an increasing demand, particularly, I am interested to
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notice, among women, who outnumber the men on these courses. I am sure that it is because mothers in particular are aware that their children will not maintain adequately what they have learnt in school unless they can have some understanding and support in the home. I speak with experience. My father was Welsh speaking; my mother was not, and when you are small it is your mother who counts. Had she been Welsh speaking—had it been the other way round—I am quite sure my proficiency in Welsh would be greater than it is. But there is no doubt at all that this is a special additional expense for Welsh education authorities—and, I repeat, not only in the schools but in teaching Welsh to adults as well.
I therefore hope that the Minister will appreciate that we need reassurances on this matter and that the additional expenditure falling at both school and further education on the local education authorities should be regarded as an additional expenditure in any comparisons which are made with the English local education authorities.
Lord Cledwyn of Penrhos: The noble Lord's attitude to this group of amendments, which argue for exclusion and exemption, has so far been negative. My noble friends, in very persuasive speeches, have explained to him why on this occasion he should accept one of these amendments. The reason is not that this amendment is necessarily better than the others but that it is different. My noble friend's speeches have covered the ground admirably. I will therefore summarise very briefly what I think they said.
First, this amendment is different because it relates to a country and not to a county. It does not relate only to a local authority area. In Welsh terms, as the noble Lord, Lord Hooson, said, its implications are national. As has been said, its implications are profound. Secondly, the Government's obligation to the Welsh language is laid down by statute, by the Welsh Language Act of 1967, which I had the privilege of steering through the other place when I was a Minister in the administration of my noble friend Lord Wilson of Rievaulx. The struggle to sustain the language has been long and hard. May I read to the House very briefly what the Act of 1536 said:
"henceforth no person or persons that use the Welsh speech or language shall have or enjoy any manner of office or fees within this realm of England, Wales or other of the King's Dominions upon pain of forfeiting the same offices or fees unless he or they use and exercise the speech or language of English."
But the Welsh language has survived despite such legislation. That it still shows vigour over four centuries later is a fact upon which to ponder.
The third point was well made by my noble friend Lord Prys-Davies in moving the amendment so ably, when he said that Welsh authorities have been efficient and responsible. There can be no possible justification for penalising them or for preventing them from helping their native language. Lastly, the amount of money involved would be small compared with other expenditure. But the consequences of cutting on Welsh education at this time would, in my view, be serious. On these grounds, I appeal to the noble Lord to consider the amendment very carefully, for the implications of failing to respond to its importance could be very serious.
8.40 p.m.
Lord Bellwin: Faced with such an array of eloquence, my task is not easy. The noble Lords Lord Hooson, was kind enough to say that the Government have been very supportive. Certainly we feel this to be the case, and I am personally a very strong advocate of a language which, if I may be allowed to say so, happens to be a particularly beautiful language. We have no wish to do or see anything that would have any adverse impact on the teaching of it. I make that point unreservedly. Noble Lords, who have presented this argument very fairly, will, I hope, equally fairly, allow me to make the points that I wish, and will then come to their own conclusions on the actual issue. I am sure that your Lordships will do that with equal fairness, and will understand the reasons for the line that I take. I shall take a few moments extra to put my argument because I think that I should.
I start with the basic premise. We are talking in this part of the Bill of the selective rate limitation scheme, which aims at a small number, 12 or 20, of high spending authorities. I wish to say immediately—this puts the amendment in perspective—that out of 45 Welsh authorities, 40 are automatically excluded from this part of the Bill anyhow because their spending is under £10 million a year. Let us get that in perspective. In the fair way that noble Lords put their case, I think that they will be equally fair in accepting from me that this is a fact. So there are only five authorities even on the team sheet, if I may so express it, before I go any further.
Secondly, there is no mechanism in the Bill to direct certain money to be spent on certain projects, however worthwhile. As I have stated repeatedly, the choice of priorities remains with the local authorities concerned. In saying this, I am not implying that bilingual education or any other service should not be supported by local authorities. I am simply saying that it would be wrong in principle and inhibiting in practice to make exceptions for particular items. Even if it was thought desirable in principle to discount expenditure on bilingual education, it simply would not be possible to do so since the costs of bilingual education are not separately identified by either the Government or authorities. I am sure that the noble Lord, Lord Prys-Davies, would be the first to accept the severe conceptual difficulties facing anyone attempting to do so. For this reason, public expenditure provision for education in Wales, with one exception on which I shall touch in a moment, does not distinguish between expenditure on bilingualism and expenditure on education generally. I think personally that that is a good thing. I do not see why it should be so singled out, except for one reason which I shall mention in a moment.
Similarly, in the distribution of rate support grant to authorities, the GRE assessments include no direct or indirect factors relating specifically to bilingual education. If any of your Lordships think that this is because of a Government decision, I can assure you that it is not so. GRE assessment formulae used for the distribution of RSG in the Principality have been endorsed by the two Welsh local authority associations every year since the inception of the separate Welsh rate support grant system in 1981. The Secretary of State has always been able to accept in their entirety
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the GREA formulae proposed by the Welsh associations. I think it is fair to say that if the Welsh counties had wanted to include some special factor for bilingual education it would already have been present in the counties' GREA formulae.
That is not to say, of course, that there is no special support for bilingual education in the Principality. Under the provisions of the 1980 Education Act, the Secretary of State for Wales can make payments to local education authorities and other persons or bodies of grants in respect of expenditure incurred with the teaching of the Welsh language or the teaching in that language of any other subject. These specific grants were introduced for the first time—I suspect that this is what the noble Lord, Lord Hooson, had in mind, if he will allow me to put one or two numbers to it—in 1980–81, when the total stood at £515,000. They have been increased annually ever since, amounting to about £940,000 in the current year, of which an estimated £622,000 will go to the local education authorities.
My other point, which is very significant, is that the rate of grant is very substantial. It is 75 per cent. of expenditure and can in some circumstances be an even higher rate. Thirdly, and somewhat paradoxically since it meets at least part of the objective of the amendment, some account is already taken since expenditure on Welsh language teaching is substantially grant aided at the rate of 75 per cent, and it is only the remaining 25 per cent. that will count against the expenditure level. This is entirely consistent, since it is only that 25 per cent. which falls to be met by ratepayers.
If, therefore, I fall back on pleading fair acceptance of the case I make, I am, in effect, saying that we are at the most dealing with a handful of authorities. In this case, it is literally a handful. I cannot go beyond that because I have not looked at their individual figures. But that is all we are talking about. Secondly, we are talking about a total of 25 per cent. of the cost of those authorities for this function, if that is the right term, which it probably is not. I am as sure of this as of anything that I have said today: that there really cannot be said to be an adverse impact on the teaching of the language as a result of anything that this Bill does. If your Lordships feel that this is not a fair presentation of the case, you will tell me. I rather hope that you will not.
Viscount Ridley: Before my noble friend sits down, would he not agree that there are, in fact, eight Welsh counties, all of them education authorities and all of them not exempt under Clause 2? All spend more than £10 million, not £5 million, as the noble Lord said.
Lord Bellwin: My information is that there are 45 Welsh authorities and that 40 will be excluded. As my noble friend raises that question I shall, of course, check it out carefully. I am not in the business of giving wrong information, willingly or unwillingly. It might well be the districts that this applies to.
Lord Lloyd of Kilgerran: May I follow my noble friend Lord Hooson in saying how grateful we as Welshmen are for the attitude that the Conservative Government have taken towards these problems of

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language in Wales. Nevertheless, may I be the first to express my deep disappointment over the very Anglicised theme developed by the Minister in his concluding remarks to deal with this national problem.
Some time ago, when the Labour Government were in power, I found myself in some difficulty with the then Front Bench. If the noble Lord, Lord Wells-Pestell, will not mind me reminding him, I was able to get some sympathy from him as a distinguished Minister at the time by reminding him that as he had so many double Ls in his name he would surely have sympathy with Welsh problems. I am not in so strong a position vis-à-vis the Minister on this occasion, but he has firmly resting in the middle of his name a double L, and a double L is a characteristic of so many great Welsh names.
However, I am disappointed that once again the Government, whatever their hue (if that is the correct word to describe a Government), have misunderstood and failed to realise the significance of a very important phrase in the amendment. I refer to the phrase:
"having regard to the special needs of Wales".
In dealing with many social, economic and cultural matters, the special needs of the nation of Wales are often overlooked. I have said before that many Members of this Committee know far more about Spain or other European countries than they know about Wales. It is the reference to the special needs of the nation of Wales that differentiates this amendment from the previous amendments and, as I said, from the somewhat Anglicised theme of the conclusion of the Minister.
The noble Lord, Lord Cledwyn, commenced to develop a theme by pressing the significance of the special needs of Wales. The Minister referred to generalisations in regard to the various counties and districts in Wales and said that many of them would not be subjected to any rate capping because of the way in which they conduct their business. As an example, I will mention the county of Gwent. It would be putting Gwent into a very difficult position to decide on a minority situation to make representations for money to be applied for the small minority in that area who are speaking Welsh.
I do not want to take up the Committee's time on this matter, but I want to say that we are now dealing not with the special needs of adult education—a matter we are concerned with generally in this country—but with the special needs of a nation, as the noble Lord, Lord Cledwyn, emphasised. It is that aspect of the matter that is important. I am not going to develop any argument based on statutes or anything like that. I am basing my argument on the general theme that the special needs of Wales as a nation should evoke the sympathy of this Government at least sufficiently for them to take away this amendment and think about it again.
In its totality it is different from the previous amendments to which the noble Lord's speech has been applied so eloquently. He has forgotten the significance of the fact that we are now dealing with the special needs of a country. I do not want to interrupt
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the conversation that is going on between the Minister and the Chief Whip, but to Welsh people this is a very significant matter and, to quote what my noble friend, Lord Hooson, said, it would be very short-sighted of the Government merely to dismiss this amendment, as of course they can. They should take it back and consider it once again at a later stage. I should be very much obliged if the noble Lord could see his way to make that little gesture to the great nation of Wales.
Lord Bellwin: In the intervening moments I have checked and found that I was correct. As I think your Lordships know, the exclusion is either £10 million or the below-GRE exemption. It is on that basis that 40 out of the 45 authorities are excluded automatically.
At the beginning I appealed to your Lordships' fairness on this amendment; not least did I appeal to the noble Lord, Lord Lloyd. At one time we used to cross swords quite frequently, although recently it has not happened often. He said that I should take special note of the special need of the nation of Wales. Let us put this in perspective. We are talking about five authorities. I have not got the figures for each of them. If the noble Lord wants me to do so, I will take that away to look at those five authorities remaining. The 25 per cent, is all that we are talking about, and it is not even the whole of the contribution of those local authorities. And this is the special need of the nation of Wales!
The eloquence of noble Lords who have spoken about this has no bounds for me; I have already paid tribute to it. It is not without some temerity that I respond in this way. I will have a look at this matter, as I have been asked to do, and I will do it on the grounds of looking at those five authorities. I may well then come back and, if the matter is raised again, make the point; or I will do it in correspondence with noble Lords. I will look into it further if that is what noble Lords wish me to do, but it will be on the basis I have explained.
Lord Hooson: I hesitate to interrupt again but I want to say that I am almost certain the Minister will find that on their expenditure those five authorities cover the majority of the population of Wales. Therefore we are talking about a matter that is very important to the country. If I understand him correctly, the mover of the amendment has it in mind to avoid the kind of competition that would occur in local authorities between those who are pressing for money to be expended on the Welsh language education and those who want to improve the education generally. In the county in which the noble Lord, Lord Gibson-Watt and I live, a relatively small minority are Welsh speaking, and most of them are in my areas of the county rather than in his. The Powis County Council would be faced with an impossible competition and it is that which the mover of the amendment is seeking to avoid.
Lord Gibson-Watt: The noble Lord referred to Powis County Council. That is one of the councils the Minister has mentioned which would be under £10 million.
Lord Prys-Davies: I am grateful to noble Lords who have spoken in support of this amendment. I am also

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grateful to the Minister for his comprehensive response. I am sure that many people in Wales who read carefully the Minister's response will be interested to learn—perhaps they will be surprised—that expenditure on education through the Welsh language is not identifiable in the expenditure and in the rate support grant. I am sure that many people in Wales will be interested in the implications of that statement.
I am greatly relieved that the Minister seems to have assured the Committee that for 40 of the local authorities in Wales there is no risk of expenditure on the Welsh language having to be curtailed. I am not sure whether he goes beyond that and gives an undertaking that in those 40 authorities, which as yet have not been named, expenditure on Welsh language education will not be at risk. If I have not got an undertaking it seems to me that certainly I have got an assurance. In the light of the Minister's response, I beg leave of the Committee to withdraw the amendment.
Amendment, by leave, withdrawn.
8.58 p.m.
Lord Underhill Lord Underhill moved Amendment No. 41:
Page 3, line 25, after ("State") insert ("in consultation with, and after taking into account any representations received from such associations of local authorities as appear to him to be concerned and any local authority with whom consultation appears to him to be desirable").
The noble Lord said: We have considered previous amendments related to the question of consultation, but those dealt with the designation of the authorities to be in the selected scheme or determining the level of expenditure. In the course of those debates and in other debates, numerous references have been made to principles. The amendment which I am now moving relates to subsection (2), which places on the Secretary of State the sole responsibility for determination of the principles for deciding the total expenditure of a designated authority.
Earlier, the Minister said that he was sad if there were misunderstandings. I believe this amendment can help to remove misunderstandings, if there are any. It is essential that the Secretary of State should consult as to what these principles should be. The local authority associations could play a major role in this consideration. They could help to ensure that local authorities are treated fairly and that account is taken of their differing circumstances. What is even more important is that they feel that they are being fairly treated. That is an important point.
As noble Lords will know, there is already consultation with the local authority associations over a very wide range of local government finance. For example, there is consultation on the rate support grant and on local authority expenditure in general. There is consultation through a series of working groups, steering groups and sub-groups. But those consultations are prior to the Government taking their decisions on these matters. Why on this particular matter do the Government consider that the issue of principles for determining the expenditure of authorities is one as regards which they know best? Why did they not use all the experience that exists in the local authority associations? In saying that I am referring not to myself as the figurehead president of
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the associations, but to all the experience that exists in the associations and in their associates.
The Bill as drafted does very little to allay the fears of local government that individual local authorities will be at the mercy of the Secretary of State, who will have at his elbow pressure from the Treasury. Nothing put forward by the Government so far will remove those fears. The Minister has said time and time again that Part I is aimed at only a handful of authorities. There is nothing in the Bill that says that. The determination of the principles may help to resolve the matter. Therefore, the question of principles is of the utmost importance.
In previous debates references have been made to the inability of civil servants to assess the detailed requirements for the expenditure of individual authorities. In saying that I am not being critical of civil servants; they have been asked to do a task which is beyond them. The noble Lord, Lord Sandford, in an earlier speech drew attention to the problems that exist and that have been shown to exist with regard to GREA. In debates in another place example after example was given of the contradictions between authorities when they lay their expenditure solely on the basis of the grant-related expenditure assessments.
The amendment has no sinister intention. It has only one purpose: the Secretary of State is being given the sole responsibility for determining these principles. Noble Lord after noble Lord has asked: What are the principles? What we are trying to do is to give the Secretary of State assistance by making it essential that he shall consult with the local authority associations in drawing up these principles. I hope that the Government will realise that as regards this issue it is sensible that they should accept the amendment. There is expertise waiting to be used and I hope that the Government will insert this into the Bill. I beg to move.
Lord Mottistone: I should like briefly to intervene. It seems to me that this clause, and in particular this subsection, is referring to total expenditure; they are not referring to detailed expenditure. Surely the principles upon which total expenditure is decided are ones which really ought to be determined by the Secretary of State in consultation with those who are concerned with total expenditure. To widen the provision so as to require him to consult statutorily with the local authorities is surely not correct in regard to total expenditure. If we were talking about detailed expenditure it would be a different matter altogether. But here we are talking about maximum sums. This must be a matter of basic policy for the Government—and the Secretary of State is the person concerned in this respect—and it seems to me that the argument that the noble Lord Lord Underhill has just put forward talks about not total expenditure but detailed expenditure, which is a different matter altogether.
I should have thought that it was perfectly proper for the Secretary of State to determine these principles. The question of whether or not other people should put their views to him is another matter, but I do not think that it should be part of the statute.
Lord Underhill: I should like briefly to intervene again because I have both the Bill and the Notes on Clauses in front of me. I ask the noble Lord, Lord Mottistone to look at Clause 3(1), which says:
"For the purpose of enabling the Secretary of State to prescribe a maximum under section 1 above for the rate made or precept issued by a designated authority the Secretary of State shall determine a level for its total expenditure".
Therefore, I was referring to the total expenditure of "a" local authority that is designated; it says "its total expenditure". That is also what the Notes on Clauses say.
Lord Bellwin: Amendment No. 41 seeks to extend the degree of consultation with the local authority associations. It would require the Secretary of State to consult the associations before determining the principles upon which their expenditure level will be set. This amendment is very similar to Amendment No. 35, which proposed consultation with individual authorities, but it also raises other objections.
There are important matters where consultation with the local authority associations would be both proper and helpful. But I do not think that this is an appropriate matter for consultation. It would require, as I have said, the Secretary of State to consult with the associations about the principles according to which he will determine the expenditure levels of designated authorities. But it would be inappropriate for the associations to become embroiled in decisions about what will be a very small and particular group of member authorities. Where this consultation would be appropriate is in deciding the principles for setting expenditure levels under the general scheme of rate limitation, if that ever were to come about, and we have provided for full consultation in that connection, should it ever be necessary.
As I said earlier, local authorities will have ample opportunity to discuss their special local circumstances if they apply to have their expenditure levels redetermined. That is the appropriate form of statutory discussion where it is necessary under the selective scheme, and it is already provided for. To build in a new consultation procedure with local authority associations would simply delay the setting of the original level. We must give the local authorities concerned the earliest possible notice so that they can plan for expenditure savings and/or make a case for redetermination. This measure would eat into the time allowed for this.
Let me make it absolutely clear that, by not wishing to accept this amendment, we do not, of course, restrict the ability of any association or any authority to make representations to the Secretary of State about the principles for setting expenditure levels. But we think that a binding requirement to consult would be unnecessary and inappropriate as an insertion at this point in the rate limitation process.
I am sorry that we have had an argument about this, because for some time I was one of those making the representations for one of the local authority associations—the one with which the noble Lord, Lord Underhill, is concerned—and I appreciate the importance of this. But what we are talking about here is fair. There will be no lack of opportunity to make the representations, but I readily accept that that is
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different from the requirement being written into the Bill in this way.
Lord Pitt of Hampstead: When all is said and done, this amendment provides the Government with an opportunity to have the co-operation of the local authority associations in determining the principles on which the expenditure of individual local authorities will, in fact, be determined. Unless the Government believe that they must dictate and that nobody else must interfere, I find it difficult to understand why the Minister is not prepared to accept this particular amendment, which will allow for co-operation. When local authorities have been consulted, the principles on which action is to be taken about the expenditure of any individual authority will have been determined not only by central government but by central government in agreement with local government. Therefore I find the attitude of the Government difficult to understand.
Lord Bellwin: I do not think that I can help on this at all. As I have said, it is a question of decision. As I said many times when we discussed earlier amendments, there are no secrets about the criteria generally. My right honourable friend in another place spelt out at considerable length the types of factors that will be taken into account in determining the principles. We have spoken about it again today. What we have now to be resolved are the final determinations based upon the 1984–85 Budget. Once those are made, I am quite sure that not only will the authorities themselves wish to make observations, but the associations will probably also want to comment. As I have emphasised as strongly as I can, the door is most certainly open at any time for individuals or associations to come and talk to the Secretary of State.
Lord Underhill: I am certain that I have not succeeded in removing any misunderstandings to which the Minister referred in an earlier address. Perhaps that is due to my inability to explain the position. The noble Lord, Lord Bellwin, referred to there being no consultations before designation. We are not worried about designation. That was dealt with in a previous amendment. We are not asking for consultation about designation to go on the selective list. We are not asking about consultation as regards the level of expenditure of any particular authority. That amendment was not accepted. We are talking about the principles on which these decisions will be taken. At one moment the Minister refers to principles and at the next to criteria. They are the same, although I believe that one noble Lord argued that there was a great difference between them. We are trying to ascertain the principles, the criteria, on which the Government will determine the levels of expenditure for the different authorities.
I believe that the noble Lord, Lord Sandford, referred to various lists and said that on one list there was one group of authorities, on another list, another group of authorities, and that all told there could be some 11 or 12 different lists. Therefore, we are arguing about the principles. For the life of me I cannot understand why the Government do not say to the associations "Yes, you are welcome to come and talk

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about the principles". We are not arguing about the ability of an authority to come in afterwards and discuss whether the level of expenditure fixed for that authority is right or wrong. It is the principles that we wish to have discussed first.
The Minister has suggested that the local authorities can make known their views at any time. Surely it would be far better if it were regarded as a duty on the Secretary of State not merely to rely upon his own information, not merely to rely upon Civil Service knowledge, but to obtain information from people in the field who work in local government every day, and to discuss with them what should be the principles on which this particular clause should be based. The Minister has rejected that. He has rejected every suggestion that I have made for consultation.
I think I must do the same as with the other amendments; read carefully what the noble Lord has said and possibly come back at Report in the hope that the Minister will understand that we are not trying to throw anything at the Bill in this matter but trying to be helpful. If the Minister wants this done, let him discuss with the associations, let him work out the principles, and, while that may not satisfy everybody people will at least have been consulted in advance as to what should be the criteria or principles in this matter. Under the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.15 p.m.
Baroness Stedman Baroness Stedman moved Amendment No. 42:
Page 3, line 25, after ("State") insert ("and embodied in an Order made by statutory instrument and no such Order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament").
The noble Baroness said: This is an important amendment. In this amendment we return to the question of parliamentary judgment and scrutiny. Having designated the authorities in accordance with the principles determined by himself, the Secretary of State then determines the maximum levels, again in accordance with principles that he, the Secretary of State, will determine. The principles, or the criteria, are not written into any part of the Bill and presumably are not to be discussed by Parliament.
The Bill gives to the Secretary of State the power not only to apply the principles, but also to determine those principles themselves. Therefore, this Bill makes a mockery of Parliament and of parliamentary scrutiny. The principles are not there for Parliament to determine, or even for it to see. Merely at some later stage, long after the authorities have been designated, the expenditure levels set, and the principles determined by the Secretary of State, will Parliament in effect be asked to give retrospective approval to some arbitrary ministerial decisions.
The designation will probably be made in July. The elected local authorities will be subject to budget preparations and to the results of the Secretary of State's determination of principles and criteria, and with luck some six months later the other place will have a report laid before it. Our amendment seeks to stop the excessive discretion which this Bill gives to the Secretary of State and to avoid the inadequate
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parliamentary scrutiny and approval, by including the words we have proposed. I beg to move.
Lord Graham of Edmonton: I very much hope that the Minister will agree with the Committee that number 10 is the lucky number tonight. This is the tenth amendment. When we got to the fifth amendment the Minister said that the night was young. Although he had resisted every amendment up to the fifth, we had not exhausted the opportunities. We have now reached the tenth amendment. The Minister has batted with a very straight bat. Not only is it the tenth amendment tonight; it is also about the fortieth amendment since we started.
I am prepared to reflect—and I am giving no assurances—that at some time in the future it will be possible to think that what we are really after tonight is some big gesture by the Minister. The big gesture is to treat this Committee seriously. If the Minister and the Government are to be fair to the parliamentary procedures, then they ought to acknowledge that it is making a farce of parliamentary procedures if noble Lords behind the Minister act in a certain way. We understand the nature of party support; blind loyalty in this particular instance—
Noble Lords: No!
Lord Graham of Edmonton: The loyalty may not be so blind. If we look at the merits of the argument, we see that what the Minister is inviting his colleagues behind him to do is, first, to give powers to the Secretary of State, and for the House to rubber-stamp the decisions of the Minister on serious matters. My noble friend Lord Underhill, in the previous amendment, and the noble Baroness, Lady Stedman, have carefully tried to point out what this Committee will be allowing if it fails to approve the amendment.
One needs to read Clause 3(2) with care. It states:
"The power to determine a level for the total expenditure of a designated authority shall be exercised in accordance with principles determined by the Secretary of State".
We are not for a moment arguing that those principles shall not be determined by the Secretary of State. Last week the Minister was frank enough to point out that they had not yet determined what will be those principles. They are still in the process of codifying them. Once they have been agreed, we want them to be brought before both Houses, so that an opportunity can be given for discussion. If noble Lords behind the Minister are saying, "We are not prepared in this Chamber or in the other place to provide ourselves with the opportunity of saying 'yea' or 'nay' to the principles", then that is a retrograde step.
More than once the Minister has told us that there is a timescale and that we are eating into the time that is allowed for this. What time, I would ask, are we allowing for proper parliamentary scrutiny? What the Minister is talking about is the Government's timescale in respect of achieving a financial and economic imperative. If Members opposite are prepared to set that aside because they are not prepared in fact to do what I consider to be the proper job of a revising Chamber, then I think this is a very sad day indeed. "Unnecessary" and "inappropriate" are words that have been used in the past ten minutes

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by the Minister. I fail to see what is unnecessary or inappropriate in this Chamber and another place having the opportunity to look at the principles that are going to determine what are, I repeat, matters of life and death so far as some authorities are concerned.
So I would say to the Minister: let us hope that number 10 is the lucky number here tonight. He is doing nothing except to agree to the request by the local authority associations. They are asking for this, so that ought to commend itself to the Minister. He is saying to your Lordships and to another place: "Not only do I respect and trust you to listen to what I have determined"—that is, the principles—"but also I am sufficiently confident, having done that, that I can persuade you to support me in carrying this by a vote".
What is there of such enormous stature in that request that we are making to the Minister that—and I listened to the Minister very carefully—he appears to be saying, "I am sorry; once I have the power I will determine the principles and I will not bring them to the House so that the House can discuss them before they are put into effect"? I believe that in this amendment the Minister has the opportunity to assist a great many people outside this Chamber to have more confidence in his impartiality.
Lord Bellwin: I wish the noble Lord, had not talked about blind loyalty. When I think over the 5,000-plus amendments to which I have spoken in the last five years—it is five years next week—and I think of the occasions on which noble Lords opposite have trooped into the Division Lobbies against me, and when I compare that to how many times some of my noble friends behind me have deserted me on many occasions, I am bound to say that I really do not think we can talk of "blind loyalty". Loyalty, certainly, but blind, certainly not. That, I am sure, is as it should be. The noble Lord also asked me to treat this Chamber seriously. I always treat this Chamber seriously, and I do not think anyone would say otherwise.
The purpose of this amendment is to require that the order containing the principles upon which the Secretary of State will determine expenditure levels for designated authorities should be laid before Parliament and debated in both Houses of Parliament. Let me remind your Lordships of the purpose of expenditure levels. Once an authority is designated, the Secretary of State will propose an overall expenditure level to cover all of its spending. That expenditure level must be determined according to general principles, but the expenditure level proposed at that stage is only the beginning.
First, it is open to the authority to come back to the Secretary of State and apply for a derogation from that expenditure level on whatever grounds it has available to justify the need for a different expenditure level; and, in considering that application, which is bound to refer to the specific circumstances of the authority, the Secretary of State is specifically permitted to depart from general principles. Secondly, the expenditure level is only a stepping stone in the legislation process because, when agreed, it will form the basis of the calculation of the rate limit and it is that rate limit which will have statutory force and will indicate to
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ratepayers whether or not the rate being levied from them is legally valid. The expenditure level in itself is not an end, but simply a means to an end.
Therefore, if Parliament were to debate the initial expenditure levels and the principles upon which they are based, it might well be debating levels which would not be in force for more than a few months and which would not be the levels on the basis of which the rate limits would be calculated. The derogation procedure and the fact that the final rate limits can be debated by the House of Commons if they are not agreed by the authority are major and very genuine safeguards for the authority concerned and a more appropriate framework of parliamentary answerability by the Secretary of State.
Amendment No. 42 also suggests that this House as well as another place should be involved in discussions. I have already explained why I do not think there is a need for a discussion of expenditure levels by Parliament at this very early stage in the procedure. Also, I do not think that the detailed question of levels at which local authorities spend is the kind of issue on which your Lordships' House normally holds debates. That is the kind of issue of local taxation which, it is generally recognised, falls within the privileges of another place; and that is another reason why we cannot support this amendment.
I might mention that a requirement to debate the expenditure levels could well act against the best interests of authorities by introducing a delay into the rate-limitation procedure. It is very important that authorities should know of their selection and proposed expenditure levels before the holiday season if the derogation procedure is to have sufficient time allowed for it. To introduce a need for a parliamentary debate at that stage could delay matters in such a way as to hamper local authorities in their preparation of applications for derogation. This is the tenth amendment and after some six or seven hours of proceedings. I am sorry that this cannot be the one which rings the bell—or rings the Bellwin, if you like. But for the reason which I have explained, I feel that we cannot go further with this one.
Lord Broxbourne: Before we pass from this amendment, may I be allowed for a brief moment to put a question to the noble Lord, Lord Graham? I put it, as he knows, as somebody who over the years has been an enthusiast for parliamentary control, which is the objective of his amendment. Can he tell the Committee what was the practice of the Governments of which he was a distinguished ornament in this regard during their period of office? If the noble Lord, Lord Graham, should be at all diffident in answering this question and looks for somebody with higher authority to respond to my request, we are indeed fortunate and privileged this evening to have among us the noble Lord below the Gangway who, as he knows, I hold in the highest regard and respect and have always done so. Nobody could speak with greater authority on this than he; so perhaps he could vouchsafe that information to the Committee.
Lord Graham of Edmonton: We are, in fact, making fresh legislation. I am not competent to go back over every piece of legislation in which I had a part, ornamental or otherwise. So far as I am concerned, there are very serious constitutional implications in this Bill. What I am saying to the Committee is that, in these circumstances, what the Committee is invited to do is either to leave this to the Secretary of State and give more and more power to the centre or to take the opportunity—which it can; for nobody is arguing that the amendments are out of order or unconstitutional—to accept or reject the amendments. If the drift of the noble Lord, Lord Broxbourne, is that if this amendment were to be passed it would be breaking new ground, then I say, "So be it."
Viscount Hanworth: Some of us, even on these Benches, feel that this Bill may be necessary. But we are extremely concerned that the Government are taking what we would consider draconian powers, and that apparently every amendment which seeks to give Parliament some control over this is negatived for reasons which I think are wholly inadequate. This is being put to the country by a Government who have far too large a majority for really getting a useful parliamentary feeling on matters, and they are simply saying that the Secretary of State will decide. If noble Lords on the Government side want this Bill to get a certain measure of approval by the country, they will be wise to consider amendments of this sort.
The Deputy Chairman of Committees (Lord Renton): The Question is, That this amendment be agreed to. As many as—
Baroness Stedman: I should like to thank the noble Lord for his answer to the case we have made. I do not accept it. I think that the time has come for much more parliamentary scrutiny. I think that this Bill would be a much better Bill if we were satisfied when it left this House that we and the local authorities were going to know just what were the principles, the criteria or whatever you like to call them, against which they are to be judged. Until we have that sort of thing written into legislation, I am afraid that we shall have to continue to keep putting down this kind of amendment. I regret that I cannot withdraw it and I must ask the Committee to express a view on it.
9.32 p.m.
On Question, Whether the said amendment (No. 42) shall be agreed to?
Their Lordships divided: Contents, 57; Not-Contents, 80.

DIVISION NO. 4

CONTENTS

Airedale, L.

Briggs, L.

Attlee, E.

Carmichael of Kelvingrove, L.

Aylestone,L.

Chandos, V.

Birk, B.

Cledwyn of Penrhos, L.

426

Collison, L.

Ogmore, L.

David, B.

Pitt of Hampstead, L.

Dean of Beswick, L.

Ponsonby of Shulbrede, L.

Denington, B.

Prys-Davies, L.

Diamond, L.

Rhodes, L.

Ennals, L.

Ridley, V.

Evans of Claughton, L.

Robson of Kiddington, B.

Fisher of Rednal, B.

Ross of Marnock, L.

Fitt, L.

Seear, B.

Fulton, L.

Sefton of Garston, L.

Graham of Edmonton, L.

Serota, B.

[Teller.]

Shannon, E.

Hanworth, V.

Simon, V.

Harris of Greenwich, L.

Stallard, L.

Irving of Dartford, L.

Stedman, B. [Teller.]

John-Mackie, L.

Stoddart of Swindon, L.

Kilmarnock, L.

Stone, L.

Kinloss, Ly.

Tordoff, L.

Llewelyn-Davies of Hastoe, B.

Underhill, L.

Lloyd of Kilgerran, L.

Walston, L.

Loudoun, C.

White, B.

McCarthy, L.

Wilson of Rievaulx, L.

McNair, L.

Winchilsea and Nottingham,

Massereene and Ferrard, V.

E.

Meston, L.

Winstanley, L.

Nicol, B.

NOT-CONTENTS

Airey of Abingdon, B.

Hornsby-Smith, B.

Avon, E.

Inchcape, E.

Belhaven and Stenton, L.

Ingrow, L.

Bellwin, L.

Kaberry of Adel, L.

Beloff, L.

Kitchener, E.

Belstead, L.

Lindsey and Abingdon, E.

Boardman, L.

Long, V.

Bolton, L.

Lucas of Chilworth, L.

Brabazon of Tara, L.

Lyell, L.

Brookes, L.

McAlpine of West Green, L.

Brougham and Vaux, L.

Mackay of Clashfern, L.

Broxbourne, L.

Macleod of Borve, B.

Bruce-Gardyne, L.

Margadale, L.

Campbell of Alloway, L.

Marsh, L.

Carnegy of Lour, B.

Maude of Stratford-upon-

Cathcart, E.

Avon, L.

Cockfield, L.

Merrivale, L.

Coleraine, L.

Mersey, V.

Cullen of Ashbourne, L.

Monk Bretton, L.

Davidson, V.

Mottistone, L.

De La Warr, E.

Murton of Lindisfarne, L.

Denham, L. [Teller.]

Peyton of Yeovil, L.

Digby, L.

Portland, D.

Drumalbyn, L.

Rankeillour, L.

Eden of Winton, L.

Renton, L.

Elles, B.

Rochdale, V.

Elliot of Harwood, B.

Rodney, L.

Elton, L.

Romney, E.

Ferrier, L.

Sharpies, B.

Gardner of Parkes, B.

Skelmersdale, L.

Gibson-Watt, L.

Swinton, E. [Teller.]

Glenarthur, L.

Townshend, M.

Gowrie, E.

Tranmire, L.

Grantchester, L.

Trenchard, V.

Gray of Contin, L.

Trumpington, B.

Greenway, L.

Vaux of Harrowden, L.

Gridley, L.

Vickers, B.

Hailsham of Saint

Waldegrave, E.

Marylebone, L.

Whitelaw, V.

Halsbury, E.

Windlesham, L.

Hood, V.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
9.39 p.m.
Baroness Fisher of Rednal Baroness Fisher of Rednal moved Amendment No. 43:
Page 3, line 25, leave out from ("and") to end of subsection (2) and insert ("those principles shall be the same for all authorities.")
The noble Baroness said: In moving this amendment I would draw the attention of the Committee to the fact that in it the principles are once again being discussed. We are trying to ensure that those principles shall be the same for all local authorities. As the Bill stands, two authorities with the same expenditure performance against target and GRE, for example, could be set entirely different expenditure limits because they are different classes of authority. This is an unfairness that we cannot accept.
The discrimination is all the more likely because only a few authorities—and the Minister used his hands to indicate a handful of authorities—will be designated, and so subject to this clause. It makes it that there will be no principles involved in some of the decisions. At the previous stage of the Committee I used the GLC to show that a set of principles was set up specifically to catch just that one local authority. This point concerns us: that one can bend the principles according to the wishes of the Secretary of State. In other words, no principles will be used and the Secretary of State will be able to set an authority's expenditure limits at any level he wants.
We on these Benches believe that the principles should be the same for all local authorities, so that no unfairness is created. This afternoon we heard from the Minister when the subject of Cambridge was raised. After about ten minutes' debate we found that Cambridge is not to be a rate-capping authority—or might not be. It so happens that the Secretary of State for the Environment visited Birmingham on Friday. He spelt out quite clearly that the West Midlands County Council will most likely join the Government's "hit list" for rate-capping. That is what he said when he got to Birmingham, so he must have set some kind of principles. No doubt the principles set on the way to Cambridge are different from the principles set on the way to the West Midlands.
If only the Minister would say, "These are the principles we are going to adopt and carry out", then we should know quite clearly what the difficulties will be between various local authorities. What concerns us more is that there is nothing in the Bill which requires the Secretary of State to have the principles approved by Parliament. In the Select Committee in another place, a table was provided which illustrated the Government's approach to preventing high spending authorities by reference to their grant-related expenditure in combination with some other indicators. It showed the extent to which authorities would have to try to restrain their spending. That table showed 11 different formulae which could be used, and 33 authorities were exemplified. The number of authorities selected on the principles there varied between 12 and 28. This illustrates the scope of the Secretary of State selectively to choose the principles he wants, to achieve any desired result.
We feel that the general principles should be applicable to all authorities, to prevent the Secretary of
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State (could I use the phrase?) "picking off" individual authorities. I beg to move.
Lord Bellwin: There is no question of the Secretary of State picking off anyone at all. There is no great secret about this matter. My right honourable friend the Secretary of State referred time and again, when these debates were held in another place, that the kind of criteria will be the spending against GRE and spending against target permutations on these things yet finally to be decided in the light of 1984–85 budget. There is no great mystery.
Amendment No. 43 is concerned with the principles which will underly the setting of expenditure levels for rate limitation. The issue is whether those principles should be common to all authorities or, as I believe, it should be possible to apply different principles to authorities in different classes. That is totally different from picking off an authority. It has to be authorities in different classes. The arguments are the same as those we encountered when discussing a group of similar amendments in relation to the designation of authorities, but I should remind the Committee of what those arguments are.
First, I made it clear that there are precedents for providing for principles to apply separately to separate classes of authority. The multipliers set for block grant are the main example. I said that, ideally, we should prefer to use the same principles for all authorities and we shall do so as far as possible; but that does not recognise the differences which affect the different classes of authority. They perform a different mix of functions. Their costs may, in some circumstances, be affected to different extents by changes in pay and prices because of different ratios of manpower to running costs and different pay settlements.
As I made clear earlier, expenditure changes are also affected by differences in the planned level of provision for different services. Between 1982–83 and 1984–85 we have seen, for example, relatively large increases in the planned expenditure on the police as a result of our commitment to improved law and order services; and a slightly larger increase in the provision for personal social services in response to our ageing population. On the other hand, provision for education has increased much more slowly to recognise the savings from falling school rolls. It is possible to see that in some circumstances the balance of service provision could be sufficiently weighted towards some classes of authority that it would be appropriate to take account of that in setting the expenditure levels from which rate limits are to be calculated.
It would be our intention to operate, so far as possible, on genarally applicable principles. But I could not agree that the Secretary of State should be restricted in that way. Indeed, it is so that we can treat authorities in a comparable manner—fairly and equally—that we need a power to operate on principles applying to classes of authorities. In other words, to meet technical differences between the different classes we might need to vary the principles to arrive at similar treatment overall. I believe that this is the only circumstance in which we could use different principles without facing challenge in the courts. That is always something to be considered. It has to be on

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a basis recognised as being to concern classes. One cannot, as the noble Baroness suggested, pick out individual authorities. I cannot accept the amendment for the reasons stated.
Baroness Fisher of Rednal: I have listened to the noble Lord, but there are very serious differences. If one looks at the various tables provided and at the needs assessments, they lead to very serious inconsistencies between authorities. Perhaps I can give an example of one local authority, which the Minister will know very well indeed, and another which I know very well indeed. A comparison of the social and economic factors affecting the populations of Sheffield, which the Minister must know well, and of Solihull, which I know very well, shows that Sheffield has much more serious problems than Solihull, but Sheffield's GRE per head of population for 1983–84 is only £318.64 compared with that for Solihull of £331.10. You have only to get out of the station to see the difference between Solihull and Sheffield. If we can raise Sheffield's up to Solihull we shall be doing something. It is these kinds of inadequacies which need to be ironed out. I am not suggesting that Solihull gets some preferential treatment. Far be it from me. I should not have thought that Sheffield gets any. But I was interested because when I mentioned the way people are picked off I was hoping, to be quite truthful, that the Minister would tell me that the West Midlands county council had not been picked off. A Minister of Her Majesty's Government, the Secretary of State for the Environment, tells them that almost as soon as he stands on the platform. They might not be in existence next year to be rate-capped; I do not know what happens then but no doubt the Government will make all those things clear. But it is I think unfair, particularly between those in metropolitan districts and those in non-metropolitan districts. I think it is there where we find the unfairness. I have listened to what the noble Minister has said. I know very well that he is not going to give way on any of the amendments and in this case I shall not be pressing for a Division.
The Deputy Chairman of Committees: Does the noble Baroness withdraw the amendment?
Baroness Fisher of Rednal: I do withdraw it.
Amendment, by leave, withdrawn.
Baroness Stedman Baroness Stedman moved Amendment No. 44:
Page 3, line 28, at end insert ("and shall include consideration of the demographic, economic and social conditions in the area of a designated Authority and to the requirements for that authority to discharge its statutory duties.")
The noble Baroness said: This rather follows on the theme of the previous amendment by the noble Baroness, Lady Fisher, because this is the clause which enables the Secretary of State to determine the maximum expenditure level for an authority which is to be rate-capped. As it stands at present, there is not a requirement for the Secretary of State to make this level reasonable, to take into account not only the needs of the authority's area, but also its statutory
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duties. What we are trying to do here is to ensure that the Secretary of State takes accounts of these factors when he makes his judgment and that he can be challenged in the courts if he fails to do so. Account should be taken of the population changes and of the variation of the mix of ages within a population. The pensioner services have to be protected. The meals-on -wheels, the lunch club, the day centres, the transport and the needs of the housebound must have proper consideration in fixing the maximum level of rate. The economic situation can also affect and create a real necessity for local services. There are much greater demands for social services and recreational facilities in times of recession and there is a need to use more public transport to travel to work, or, if you are unfortunate, to get out and look for work. The social conditions of the area have a very significant implication for the local authorities' level of services. If they have bad housing conditions, if there is a large ethnic population, if there are low socio-economic groupings in expanding areas of new towns, all these factors affect the services that an authority has to provide.
We know that the Secretary of State consults the local authority's consultative committee before implementing the rate support grant measures, but there is no compulsion on him to ensure that any particular authority has adequate provision to perform its statutory duties. This is hardly tolerable now, where, penalties notwithstanding, the targets at least are not compulsory. But, if rate-capping is implemented, then this compulsory action could leave the local authorities quite incapable of raising sufficient funds to fulfil their statutory duties. We are trying to ensure that the Secretary of State must take account of the cost of meeting the needs of the authority's area and its statutory duties before he sets the expenditure level of any rate-capped authority. I beg to move.
Lord Bellwin: The first part of the amendment is inconsistent with the purpose of this subsection because it tries to bring local circumstances into the reckoning when the Bill provides for all designated authorities to be treated similarly. If there are special local circumstances which mean that an authority is not able to meet an expenditure level derived from principles which are reasonable in the case of comparable authorities, then the Bill provides for the special procedure for a redetermination of its expenditure level.
Clause 3 not only provides for expenditure levels to be set on general principles; it also provides a procedure for an authority to apply for a higher expenditure figure if it believes the general principles should not apply in its circumstances. Of course authorities are entitled to expect some safeguards. The first, and most obvious, is that the Secretary of State will be able to depart from the general principles only if he is invited to do so by the authority itself.
Secondly, although freed from the requirement to observe the general principles applying to other selected authorities, the Secretary of State will not be empowered to act arbitrarily. He will have to act reasonably, or face legal challenge. That means

431
behaving consistently in his treatment of the applications of different authorities where similar circumstances affect more than one council.
On Question, amendment negatived.
9.57 p.m.
Baroness Fisher of Rednal Baroness Fisher of Rednal moved Amendment No. 45:
Page 3, line 28, at end insert—
("( ) The principles referred to in subsection (2) of this section shall not be so framed as to have the effect of causing the determination of a level of expenditure which, after allowing for any actual or expected variations in the level of prices, costs and remuneration, would have the result that, if an authority's total expenditure in the immediately preceding financial year was equal to or lower than such level as aforesaid, that authority would not have been designated for the purposes of this part of this Act.")
The noble Baroness said: On this amendment we come again to principles. A problem could easily arise. A designated authority could be forced to reduce expenditure below the level at which it is designated. It would clearly be inequitable if an authority were designated and forced to keep its expenditure below the level of other authorities which have not been designated. It is a little complicated. An authority may be forced to spend below its previous expenditure because it has been designated and may find that other authorities which are not designated and are in the same category can spend more. That would be most unfortunate.
This is a probing amendment. We wish to know whether the Minister has taken the point on board. We want to be assured that the Secretary of State will not set the limit regardless. We move this amendment to make sure that there is a safeguard for the designated authorities, so that their expenditure is not below that of other authorities which are not designated just because the Secretary of State has taken that decision. I beg to move.
Lord Bellwin: I should like, briefly, to remind the Committee of the purpose of Clause 3(2), to which this amendment relates. It provides that the power to determine a level for total expenditure (from which a rate limit will later be calculated) must be exercised according to principles determined by the Secretary of State. In the case of an authority falling within one of the classes which are set out in Clause 2(5), those principles are to be the same for all authorities falling within their class.
Amendment No. 45 is intended to prevent expenditure levels being set at a point below that at which the authority became within the general principle leading to its designation. A major purpose of the Bill is to protect ratepayers from excessive spending and rates. We shall be selecting, as has been said many times, in the first instance only from 12 to 20 of the highest spending authorities. If one of those authorities is capable of making economies such that it takes itself out of that group of the highest spenders, I see no reason why it should not do so, and I see no reason to impose such a constraint on the operation of the scheme.
I accept of course that once the authority has taken itself out of the small group of the highest spenders, it
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should expect not to be selected subsequently, providing it remains a lower spender. But that is not the object of this amendment, and that is why I cannot support it.
Baroness Fisher of Rednal: I did not follow the Minister's argument. No doubt I did not make my point clear enough when I was putting my point of view. I do not understand the answer he gave me. Perhaps that is my fault because I did not put the question properly; but it would mean a difficulty. Perhaps this is the point: it would mean that authorities who are designated could be forced to make expenditure reductions below the level of authorities who have not been designated, even in their own group. That was the cause of concern. I will read what the Minister has said, and at this stage I beg leave to withdraw.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 46:
Page 3, line 33, after ("notice") insert ("(which shall not be less than three months)")
The noble Lord said: This is a simple amendment. I am sure that in the context in which the Minister has more than once said that he wants to be fair to local authorities, he must agree with what it is that we are after. With respect, if I could take the House through the face of the Bill, Clause 3(4) reads:
"Any authority on which a notice is served under subsection (3) above may, within the period specified in the notice,"
there is no time specified and we are saying,
"(which shall not be less than three months)".
The reason why we want a period of time is that the Minister time after time has said, "How the local authority manages its money is a matter for local decision. Once these determinations and designations have been made then it is up to the local authority; the Government will not interfere".
But from the Minister's experience he must know that it is an agonising period and process in any council when, from whatever source, someone says, "You have to make priorities and choices". The Minister knows from his experience what those choices are likely to be: "Shall we decide to close the swimming pool which we have been managing to keep open for the past two or three years?" Someone says, "No, I think we ought to close the old people's home." Someone else says, "Well, that is not fair. We ought to consider whether the meals-on-wheels service should go." Perhaps someone says, "What about the libraries?"
The Minister says that the choices are endless; it is up to the local authority. I accept the Minister's third alternative, that there is a better way of doing it: you do not have to chop off anything; you can just do it cheaper or more efficiently—which really means cheaper.
There will be some authorities that can perhaps take lessons from others; but I am prepared to say that since this Government came into power there have been a number of initiatives and a number of pieces of legislation, statutory obligations. There can be very

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few authorities that have not combed, time after time, the range of things that they have. I can only speak for my authority in Enfield, for my Labour colleagues who come back from various meetings and tell us what they have gone through. This process has been going on. What we are saying is: is it not right and reasonable? Three months may be the wrong period, but there should be a period.
The Minister might tell us that when we are talking about "specified in the notice", he has in mind a period of time that will be allowed during which the authority can act because the local authority has to be able to deal with a number of aspects. It has to react properly to an expenditure limitation notice and not merely panic and make the wrong decision. It has to decide whether it is going to risk having a lower limit set. It has also to work out what cuts need to be made.
The Minister has more than once told us that it is not his intention to save any money disbursed to the boroughs—money, for instance, which is spent by the GLC. I should like to give the Minister the illustration of the Lea Valley regional park. I am delighted to see the noble Baroness, Lady Gardner, in her place. The Lea Valley regional park, which the noble Baroness knows well, is something which I feel absolutely certain it is the intention of the Minister and the Goverment to continue moneywise. This means that the same money is to be made available, but that it will be given to the various authorities. The Minister has to be kidding if he believes that when the Enfield council receives its part of the GLC money for the Lea Valley it will say, "We have no other priority for that money. It will go towards continuing to fund the Lea Valley regional park". Enfield, like every other authority, will say, "How can we best use this money?" It will want to continue the Lea Valley regional park. It will want to continue meals on wheels, and everything else. But this Government, more than any other, are forcing councils to reappraise almost every month how they will use their money. The council will say that it is sorry, that it should like to put its £100,000 which it may now be spending through the GLC into a new Lea Valley authority, but it has to make decisions.
We are therefore asking the Minister to examine a timescale that will allow the authority to act properly. I am not too optimistic. The Minister, in reply to an earlier amendment, did not use the word "procrastination", but that would be a fair description of what we have been talking about. The Minister said that it would be eating into the time allowed. This is, of course, against the imperative of the designation sometime in July and the timescale thereafter. If three months is the wrong period, I should like the Minister to address himself to what he has in mind when talking about any time at all for the authority to do its job properly.
Lord Evans of Claughton: I know that the noble Lord the Minister is amazed that I have not said a word all evening. I should like briefly to say that I strongly support the noble Lord, Lord Graham of Edmonton, in the moderate way that he has moved the amendment, partly because we want his support
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for Amendment No. 70 when that is reached. That amendment is very similar to his. I support the noble Lord mainly on the basis that it seems natural justice that local authorities should have fixed a date and a time during which they have to work out their response to the Government initiative. It seems natural justice that any document should always state a time limit during which an authority has to deal with the matter. The Government have often said—it may be rhetoric, I do not know—that it is part of their philosophy to get central Government off the backs of people. This is one of the ways in which the local authorities might be given at least three months to know how long they have before the Government jump on their backs. I think that, in all natural justice, a time limit, whether of three months, as the noble Lord, Lord Graham, said, or some shorter or longer period, should be set and that this matter should not be left entirely to the whim of the Minister. I strongly support the amendment.
Lord Bellwin: We accept that authorities need a reasonable amount of time to prepare an application for a redetermination. We shall see that they are given good time to do this if they think that an application is necessary. But the Committee will, I think, realise that authorities will need adequate time to present and discuss their case with the Secretary of State. The statutory three-month minimum proposed by the amendment is, I think, too long a period as a minimum. We expect that we would normally notify expenditure levels around the end of July, at much the same time as provisional expenditure targets for the coming year are announced. The annual RSG settlement normally takes place in mid-December, as the noble Lords will know. We would want to have discussions on expenditure levels largely settled by then. Between those two events there is a gap of four and a half months in which discussions can take place. It seems over-balanced to allow two-thirds of the available time to elapse before authorities must even declare their intention to apply.
I recognise that authorities will want to consider very seriously the case they make in support of their application. But I do not see why that should prevent them from indicating much earlier that they will be making an application. My view is that it will be in everyone's interests to get the process under way and preferably resolved as quickly as possible. But an earlier application need not prevent an authority from submitting supplementary material and, of course, that would have to be considered before my right honourable friend could exercise his statutory discretion.
This is not one of the matters of great moment: it is a question of thinking it through in a practical way. Although I stand on what I have said, if the noble Lord will promise not to be too astonished by what I am about to say I can tell him that certainly I will think about whether or not the time is right. It seems to me to be right but, as is often said to me, I will read what the noble Lord has said and I will think carefully about it. I cannot accept the amendment, but certainly I want to read what he has said. If we think that we are cutting it fine we will want to take note of that.
Lord Graham of Edmonton: I am grateful to the Minister. I want to be quite clear that I understand what he has said. He accepts the premise on which our case is made: that there ought to be some time which it is understood is allowed for the authority to react to the determination, the designation, and to decide its next steps. The Minister has said clearly that three months is too long and has given us a global timescale. If three months is too long, perhaps the Minister will specify, either in the Bill or otherwise, a shorter period of four weeks, six weeks or eight weeks. On the basis that we will hear further from the Minister on this matter, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.12 p.m.
Baroness Nicol Baroness Nicol moved Amendment No. 46A:
Page 4, line 2, leave out ("or smaller").
The noble Baroness said: I hope it is my good fortune to find the Minister in a mellow mood, since he almost gave way on the previous amendment. This amendment affects a situation where an authority has been designated and has undergone the scrutiny of the Secretary of State, who has made a determination. It is a situation, therefore, where the authority has already incurred the displeasure of Whitehall.
The authority decides that it cannot manage within the limit, and so it makes an application for a redetermination, furnishing,
"such information in such form as the Secretary of State may require".
The determination has been made on a set of principles not yet established and based on,
"the best information available to him",
though we are not permitted to establish any guidelines on reasonableness. By its application the authority in question forfeits its right to be protected by these undefined principles and places itself in the unfettered hands of an already disapproving Secretary of State.
However, if the Secretary of State decides that the authority's case is good and redetermines at a higher level, how is the authority to raise the difference without the power to levy a supplementary rate? Will the Minister please answer that in his reply? On the other hand, if the Secretary of State decides to punish the authority for questioning his decision, what is to prevent him? The Bill as drafted requires the Secretary of State to give reasons for redetermining a greater amount, but not a smaller amount. Is there not a real danger that he may decide to discourage other applications by a punitive use of this power?
It is unlikely that an authority which was unable to keep within its original determination could actually be found to need even less. This power is open to abuse and should be removed. I have not heard or read any arguments for the retention of the words "or smaller" and I should be interested to hear the Minister's reply. I beg to move.
Lord Bellwin: I would invite your Lordships to take a careful look at this proposition. We are setting up a procedure in Clause 3 to allow us to take account of the particular circumstances of a local authority—if, and only if, the authority chooses to put those
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circumstances before the Secretary of State. They are not compelled to do so. Authorities will have the option of living within the original expenditure levels. These will be set on general principles which must be reasonable.
If there were no power to reduce an expenditure level in the light of an application, what would be the reaction of each designated authority? They would say, "Let us apply. We have nothing to lose". They would then divert their energies into mounting a detailed case for a higher expenditure figure rather than into the far more beneficial outlet of searching out the economies which would allow them to achieve the expenditure level and reduce the rates.
Consider also what would happen if, in the course of considering an application from an authority, it became clearly apparent that not only could the authority easily manage the original expenditure level, but could go further and bring about a bigger reduction in the rate. The ratepayers would be justifiably enraged if, knowing that for a fact, it was impossible to bring about those savings.
The objects of this Bill are to bring local government expenditure under control and to bring some relief to hard-pressed ratepayers. We are providing a procedure to ensure that the special circumstances of authorities can be taken into account. It is up to the authority to decide whether to initiate the procedure. But once it has decided so to do we cannot overlook the main purposes of the legislation.
The noble Baroness has asked me: what would be the position if the expenditure level were set at a higher level? The fact is that as a result the rate limit would be correspondingly higher and, therefore, there would be no need for a supplementary rate. A supplement would not apply because all of the procedure is settled before the final determination of the level. But I hope that it will not surprise the noble Baroness too much if I also say that I want to read what she has said about this particular point, because in view of our earlier considerations I think that there may be one or two points here that we may want to look at again. I cannot accept the amendment, and I know that the noble Baroness understands that. But I do want to say—as in the last amendment—that I shall certainly want to read carefully what the noble Baroness has said.
Baroness Nicol: I am grateful for the Minister's reply. It would meet many of the difficulties if, when he is considering the situation, he could be persuaded that it might be necessary for the Secretary of State to give reasons for fixing a smaller determination as well as a larger one. That to me was the sinister aspect of the matter—the Secretary of State is required to give reasons for determining a higher sum, but not a lower one. That course would overcome the difficulties. However, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Stedman Baroness Stedman moved Amendment No. 47:
Page 4, line 4, at end insert—
(" ( ) Where pursuant to subsection (5) above the Secretary of State re-determines a level at a greater amount he shall, as soon as it is practicable thereafter, lay before Parliament a Report stating his reasons for such re-determination.")
The noble Baroness said: Again we are back to trying to ensure proper parliamentary control over the process of rate capping, including the extent to which the Secretary of State exercises his power of derogation. As the Bill stands at present, the Secretary of State can designate authorities according to principles as yet not stated, and is required to report to Parliament. He then goes on to determine, according to the same unknown and unapproved, as yet, principles, the expenditure limitations for the designated authority. But at that stage Parliament has no role in the determination. Nor has Parliament any role in a possible redetermination of expenditure limit on appeal to the Secretary of State, who can depart from the principles that he has already used. Finally, the imposed expenditure limit can be translated into a maximum rate, and at that stage an affirmative resolution of the House of Commons is necessary.
We should like to see more parliamentary oversight at all stages, but redetermination in its present form allows the Secretary of State to act in a covert and secretive manner; and to excuse an authority once it has been designated is just as much an exercise of his discretion as is the initial designation. Yet there is no reference to Parliament having to approve, or even to receive, a report on this part of the exercise.
We want the Secretary of State to be explicitly accountable to Parliament for his action. Not only is the original determination made in accordance with principles decided by the Secretary of State, but, when he comes to redetermination, he can vary those principles and can depart from those which he originally used. The Secretary of State has this great arbitrary power not only to devise the principles, but also to decide whether or not to abide by them in redetermination. Any sense of justice goes out of the window when that sort of thing is allowed to happen. I beg to move.
Lord Bellwin: This amendment would require the Secretary of State, when redetermining an expenditure level at a higher level, to lay a report before Parliament stating his reasons. A determination at a higher level is of course in the authority's favour, and has followed discussion with the authority. The finally determined level is, however, only a stepping stone. It will be translated into a rate limit following the RSG settlement, and that limit, if it is not agreed to by the authority, will be submitted for debate and approval by the other place. So under the Bill as drafted, there is an opportunity for the House to discuss, in effect, the redetermined expenditure level.
If the expenditure level, and subsequently the rate limit, are agreed by the authority, of course, there will be no need for parliamentary debate. So it is a matter for the authority if it wishes to enter an agreement. Conversely, if it wishes to ensure that the matter is debated, it has only to indicate dissent with the rate limit.
The amendment does not propose any parliamentary debate of the proposed derogation report. If there were debate at that stage, there would be serious consequences for the overall rate limitation timetable. I hope that that explanation is satisfactory to the noble Baroness. This, again, is one of the procedural safeguards which I think concerns her.
Lord Underhill: Before the noble Baroness replies, I should say from these Benches that we support this amendment. Has the Minister considered that, in all the discussion we have had on principles (where we have been rejected) Parliament might wish to know what might have been wrong with the principles which caused the Secretary of State to give a greater amount of expenditure? Surely that is a matter which Parliament ought to be able to discuss and arrive at the answer. If we left it at the procedure which the Minister has outlined, that would not be done. It is this failure to have proper consultation on principles that makes this amendment really important.
Baroness Stedman: I am grateful to the Minister. I was hoping that the conciliatory attitude of the last two or three amendments might have carried on for just a little longer. Perhaps the noble Lord the Minister will still consider what the noble Lord, Lord Underhill, and I have said in support of this amendment. For our part, I am sure that we shall read what he said in reply. At this stage I should like to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): The next amendment is Amendment No. 48. I should inform your Lordships that if this amendment is agreed to, I shall not be able to call Amendment No. 49.
10.25 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 48:
Page 4, line 5, leave out subsections (6) and (7).
The noble Lord said: The reason for this amendment is, it says here, that it seeks only to limit in the following year the undertakings the Secretary of State can extract from a local authority in return for a higher expenditure limit. As presently drafted the Bill gives the Secretary of State power to impose a higher expenditure limit on an appellant authority and then make almost any imposition on that authority without time limits. We are concerned with what is reasonable.
The amendment refers to subsections (6) and (7) of Clause 3. These two subsections relate to the powers to be afforded to the Secretary of State in the event that, following an application for redetermination by a local authority, he redetermines the expenditure limit at a higher level. As the Bill is presently drafted the Secretary of State may, in determining at a higher level, impose on the authority such requirements as he thinks appropriate in relation to its expenditure or financial management.
One first needs to ask the question why the Secretary of State should require such powers, and indeed whether the Secretary of State is in a better position to take decisions as to the financial management of the local authority than the members of that authority. Perhaps the Minister will be able to tell the Committee in what circumstances the Secretary of State would require to use such powers, and, secondly, the Secretary of State's justification for thinking that he can be more effective in local financial management than the local authority.
The Committee knows that Clause 3 is concerned with the determination of a maximum level of expenditure prior to setting a maximum for the rate or precept. The important feature is the setting of a reasonable expenditure level. It is not a matter of whether the correct level is set at the first, second, or even the tenth or twentieth attempt. If the Secretary of State assesses the wrong level at the outset—and this Minister is no different from many others; he is guided by ordinary mortals who are looking at measuring rods which are called GREAs, and we know that that is an imperfect tool, criticised all round the Committee—and, after he has determined it in that way and after listening to the representations of the local authority, he then agrees to increase the level, why should the powers under subsections (6) and (7) be necessary?
If it is going to be revised, it will have been the Secretary of State who made the wrong initial assessment, not the local authority, and yet, in correcting his error, the Secretary of State will impose requirements on a local authority which has, under the terms of Clause 3, been guilty of no more than appealing for justice to be done. We ask the Minister, in the light of our interpretation—and not only our interpretation but that of authorities and associations outside the House, and their understanding of what subsections (6) and (7) mean—to take this opportunity either to say that we are wrong, as is quite likely, or to explain to us what it is that the authorities have got wrong in their interpretation of subsections (6) and (7). I beg to move.
Lord Bellwin: This subsection provides for cases where an authority, in seeking a redetermination of its expenditure level, produces evidence of local circumstances which prevented it making quickly enough, all the necessary economies to meet the level. The Secretary of State, if he was satisfied by the arguments, could then decide to redetermine the authority's expenditure level at a higher amount. Subsection 3(6) allows him in doing so to impose requirements on the authority and call for reports on the extent to which the authority has complied with them.
Subsection 3(7) provides the remedy should an authority, having taken the benefits of a redetermination expenditure level, fail to meet the requirements imposed on it. The Secretary of State may enforce the requirement in the courts, or alternatively he may select an authority in a subsequent financial year though it might not quite meet the usual criteria for selection.
Essentially our purpose in including the power to impose requirements is to ensure that a means will exist to remove obstacles in the way of savings being made. Without this power the same arguments could be presented repeatedly by an authority which remains selected as reasons why it could not make the necessary expenditure savings. I accept that until the requirement is discharged the authority will remain at risk of selection, but there is no duty to designate an authority for failing to fulfil a requirement; only a power to do so. I can say that we should not want to enforce this where the authority had failed for reasons
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beyond its control but only where it has made insufficient efforts to achieve what had been asked of it.
I could talk at some length about remedies in the courts, of power to reselect and so on, but I doubt whether this is what noble Lords will wish to hear from me at this moment. If it is felt that this is a cause for concern and that greater explanation is required, I shall be happy to write to the noble Lord in a way that he can then show and discuss with others who might be similarly interested.
Lord Graham of Edmonton: I am grateful to the Minister. The Minister used the phrase: "the authority had made insufficient efforts". As I understand it, what that means is reducing the expenditure levels; in other words it has to produce savings which would satisfy the Minister that it has done its best. If that is the interpretation, we are not arguing about the wider principles of the whole raison d'être of the Bill; but if in fact, when the appeal is made, the Minister agrees that the levels are inappropriate in the light of the representations and the authority then goes through everything with a small toothcomb and produces a satisfactory figure so that the Minister can say in all good faith, if he is satisfied that the authority has done its best, that he is prepared to make the necessary adjustments, that seems to me to be a reasonable way to proceed.
I accept the Minister's offer. When Hansard is read in a day or two, the matter will be looked at; we shall get what I expect to be a two-page letter of explanation; I will consult with colleagues and come back at the next stage if need be. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 49, 50 and 51 not moved.]
Baroness Gardner of Parkes Baroness Gardner of Parkes moved Amendment No. 51A:
Page 4, line 18, at end insert—
("( ) The Secretary of State's decision under subsection (5) and any requirements imposed by him under subsection (6) above shall be stated in a notice served by him on the authority concerned.")
The noble Baroness said: I rise to move this simple amendment to Clause 3 in order to fulfil what seems to me to be an obvious gap in its provisions. At present the Secretary of State will be required in the first instance to notify in writing each selected authority of the expenditure level which he has set; but there is no comparable obligation on the Secretary of State to renotify the authority in the event of his agreeing to redetermine the expenditure level as a result of an application made by that authority to the Secretary of State under Clause 3(4).
The Bill also provides in Clause 3(6) that where the Secretary of State has redetermined the expenditure level at a greater amount, he can place on the authority such requirements as he thinks appropriate in relation to their expenditure or financial management. That point has just been mentioned by a noble Lord opposite. Sanctions are provided where those require-ments are not observed. But the Bill does not provide for the authority concerned to be notified of the

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decisions taken under this power either. That seems to me to be extremely odd—so odd that I cannot believe any Secretary of State would want to do other than notify an authority of his decisions as soon as he has taken them. This omission in the Bill must surely be unintentional. An authority which has applied to the Secretary of State for an increase in the expenditure level surely must be entitled to know when the Secretary of State has considered its application and what the outcome is. Unless they are told that, they cannot get on with the important business planning their budgets and deciding on what economies or changes must be made. Unless the end of the Secretary of State's consideration is formally marked, there will be continuing uncertainty in the mind of the authority about the status of its application. Similarly, if the authority is to have requirements placed upon it, it cannot possibly conform to them unless their nature is clearly stated in writing, so allowing any necessary work to be put in hand.
The simplest way to deal with both these points is to provide in the Bill for the decisions of the Secretary of State to be notified in writing to the authorities concerned in the same way as his initial determination under Clause 3(3) is to be notified to them. This amendment provides for that. It does not in any way, as I see it, go against the principles of the Bill but seeks merely to promote greater certainty. I hope that my noble friend will consider the point that I have made and that he may be prepared to accept this practical amendment.
Lord Bellwin: There is something of a gap in the provision of the Bill at this point. I think that my noble friend accepts that it would be the Government's intention to inform an authority of the outcome of an application for a redetermination and of any require-ments imposed on it if its expenditure level were increased. I must say that this has a ring of common sense about it. It is right that we should remove any uncertainty on this point by placing a duty on the Secretary of State to inform an authority formally of his decisions. The amendment will establish a clear end point to the procedure by which an authority may apply and have its expenditure level redetermined. It will also ensure that where an authority is to have a requirement placed on it, it will receive a clear, written notice of what is required. This is a useful amendment and I gladly accept it on behalf of the Government.
Baroness Gardner of Parkes: I thank the Minister. I am delighted.
On Question, amendment agreed to.
10.38 p.m.
On Question, Whether Clause 3, as amended, shall stand part of the Bill?
Lord Sandford: Before we leave this clause, I feel obliged to ask the Committee to reflect on two very undesirable features which the debate on this clause has revealed. First of all, we spent the early part of this Sitting on the Bill discussing a number of proposals by different noble Lords to give special emphasis to a
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number of such factors as support for charities, adult education, bilingual education in Welsh schools, and so on. These are the kind of things that are bound to happen if we have legislation of this kind when such issues, which are supremely a matter for local decisions, get debated here in the national Parliament and in ways in which, if any of those amendments had been carried, would have seriously distorted and impaired the power of the local authorities who are elected to take decisions on those matters. I was glad to support the Government for the reasons given by my noble friend Lord Ridley in resisting those.
On the other hand, we are no further forward in getting from the Government any indication of the kind of criteria, principles or guidelines by which the national decisions for the selection of the authority in its determination of expenditure levels are to be arrived at. All that we have is this schedule, which many noble Lords have seen, of the 11 possible criteria which, the Secretary of State indicated to the Committee in the Commons, might be used in order to get 28, 24, 27, 17, 15 or 12—a variable number of authorities—by 11 different possible combinations of criteria. We are no wiser as to which of these will be adopted, and that, too, is undesirable. After all this debate on this clause, we are no wiser in that respect. We have spent a lot of time discussing things which ought to be discussed locally, and we have spent a lot of time discussing—and getting nowhere—matters which ought to be determined nationally before this Bill proceeds any further.
Clause 3, as amended, agreed to.
Clause 4 [Determination of maximum rate or precept]:
Lord Stallard Lord Stallard moved Amendment No. 52:
Page 4, line 29, after ("any") insert ("as adjusted pursuant to the provisions of section 62 of the Local Government Planning and Land Act 1980.")
The noble Lord said: Clause 4, to which this amendment refers, gives the Secretary of State yet more power. Under this clause he is empowered to set a rate maximum for selected local authorities based upon the appropriate expenditure level and any block grant entitlement and equalisation contribution. The clause enables him, in so doing, to take into account any financial resources that the local authority may have. Those are very sweeping powers, yet there is no parliamentary procedure specified in the clause. He merely serves notice on the local authority of the proposed maximum rate or precept limit as soon as possible after the rate support grant report.
In previous debates today noble Lords have mentioned this absence of parliamentary procedure on what are, in our opinion—certainly in my opinion—fundamental changes affecting the relationship between central and local government. We saw in a previous debate on Clause 2 that a report has simply to be laid before the House of Commons, and the Minister was as unclear as the rest of us on the precise details of that procedure. That is no criticism of the Minister; it is simply that the matter is complicated and no details were available.
Under Clause 3(2), principles determine whether the Secretary of State is to set expenditure limits, and

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there is no parliamentary procedure specified; under subsection (1) of Clause 4 there is no parliamentary procedure specified; under subsection (3)—again, dealing with the agreed rate maximum—there is no parliamentary procedure specified; and there are other examples later in the Bill. This amendment is, therefore, an attempt to seek further information about how the Government will estimate the block grant for the purposes of rate limitation. The amendment is based on Section 62 of the 1980 Act, and I know that I do not have to remind the Minister and noble Lords who were here at the time of the long and tortuous progress of that Bill through both Houses of some of the arguments put forward then. Noble Lords are, I am sure, all too familiar with the Act, and the hour is late.
But now, as I understand it, when translating an expenditure limit into a rate limit, the Government will take into account the amount of block grant, if any, that an authority is likely to receive. But how can the Secretary of State estimate, with the accuracy required for rate limitation, an authority's block grant entitlement until every authority—not just the designated ones—has made its spending decision? Is it not a fact that the block grant is fixed in aggregate, but that each authority's block grant depends on its level of spending? Is it not also a fact that the process of reaching these spending decisions is long and complex, entailing a great deal of consultation among the various local authorities, through the authority treasurers' network, and that the information gathered and considered as a result of this process could not possibly be available to the Government at the time when the rate limitation process is decided?
In the past, the Government have estimated block grants on two assumptions; namely, a target or a GRE or a target plus some percentage suggested by the local authority side. But as earlier debates this afternoon have shown, neither of those assumptions will be good enough for the purpose of a legally imposed maximum rate where there is no room for error. From studies and reports that I have read so far, it would appear that the main criteria to be used in setting the block grant will be the GREA but, as the Society of Metropolitan Treasurers and others have pointed out, GREAs are not so objective as they ought to be, since the factors in the unit costs used to calculate GREAs are at best approximations of local needs. Examples have been given. I could give many more.
The inaccuracies, the discrepancies, and the likely errors which could arise have also been mentioned by the association; so much so that the then Secretary of State for the Environment was moved to say, on 8th July 1980, in the debate during the passage of the Local Government Planning and Land Bill:
"It makes clear that this"—
that is, the grant-related expenditure—
is in no sense a prescriptive definition by central Government of what the local authorities should spend, but is a basis on which grant will be distributed".
Out of a long list I could give three other short points about the inadequacies of the GREs. The noble Lord, Lord Sandford, mentioned earlier today a great number of others. My recollection, too, is that these GREs do not take account of legal and moral
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commitments such as debt charges—an important consideration. Nor do they take account of past Governments' selective encouragement of services in particular areas. I know that the Minister will share with me the memories of frustration that this kind of Government procedure can cause to local authorities where they select certain areas for attention, but fail to supply the resources. That has always been a difficulty. GREs do not take account of that, nor of the differences in the economic viability of service provision in urban and rural areas. It may be that it was right that they should not, given the original purpose of the GREs, but surely that goes to support the arguments which have been put forward by noble Lords on the previous clauses. Therefore I submit that we are entitled to know a little more about how the Secretary of State will adjust the block grant with the degree of accuracy required in the time limit set by the clauses in this Bill.
Before I sit down, I should like to have the comments of the Minister on another problem. The Government have said that a designated authority could have three spending norms. It could have the GREA, it could have a target, or it could have an expenditure limit. This means in practice, judging from discussions I have had with a number of people in local government, that a designated authority, spending at its limit, could still possibly incur grant penalties. If the Government fix the maximum expenditure for a designated authority above its target, assuming the system is the same as before, grant penalty would be incurred. In other words, penalties could be incurred for spending at a Government-imposed level. That is a possibility, and I would ask the noble Lord the Minister to confirm my interpretation. It would be open to the Government to change the system yet again. Earlier this afternoon there was an announcement about a minor change in relation to Cambridgeshire's future. The Government could change the system again so that designated authorities did not have targets and therefore did not suffer grant penalties for spending at the prescribed levels.
I have rushed through this because of the time, but this does not mean that the subject is any the less important. When he makes his comments I hope that the Minister will be able to enlighten us and, in view of the fact that no parliamentary process is specified, give us further information about how the Secretary of State intends to make the adjustment to the block grant to which I have referred. I beg to move.
Lord Evans of Claughton: In order to save time at this hour of the night, may I briefly speak in support not so much of the amendment moved by the noble Lord, Lord Stallard, but rather of the following amendment, Amendment No. 53, which is grouped with Amendment No. 52.
Amendment No. 53: Page 4, line 34, at end insert—("; and (d) the annual rate of inflation.")
In supporting what the noble Lord has said, I would remind him that in another place there was not quite the sweetness and light that subsists in your Lordships' Committee between the Social Democrats and the Labour Party, who fought in rather an unseemly way over which of them was fathering which of these

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amendments. In this particular case we are working together and confirming the worst suspicions of the noble Lord, Lord Denham.
We are concerned—I believe quite rightly—about the way in which these rate limits are going to be settled after designation. We are moving Amendment No. 53 in a spirit of co-operation and enlightenment because we believe that what should be taken into account is the annual rate of inflation and not the rate of inflation of local government, in determining what may happen between designation and the setting of rate limits.
Your Lordships will be aware that the rate at which local government inflation increases is usually greater—through no fault of local government—than that of national inflation because of the fact that wage settlements are made on a national basis, with the approbation of Her Majesty's Government, and many local government employees are people who are low wage earners. It is a widely-accepted philosophy in all parts of all political parties that the lower paid workers should receive greater wage increases than people in other parts of the economy.
We are suggesting that the rate of inflation taken into account should not be based on the inflation of wages in local government but upon the general rate of inflation affecting the whole of society. At the moment it would not be a problem, in the sense that the rate of inflation is being reasonably well-controlled. But it could be quite an important factor at some time in the future, when the rate of inflation may increase markedly between designation and the fixing of limits.
We believe very strongly that the annual rate of inflation should be one of the factors taken into account in coming to a settlement on rate limits. In supporting the amendment moved by the noble Lord, Lord Stallard, I believe that it would be wise and to the benefit of the business of this Committee if we considered also Amendment No. 53, which is based on the same principle.
10.53 p.m.
Lord Bellwin: It may help if I briefly explain the way in which we envisage that Clause 4 will operate. For all authorities, the rate or precept income they require is determined by their total expenditure for the year less any block grant payable, and adjusted by net contributions to or from internal funds. In addition, authorities in London may have to provide for payments into or out of the London rate equalisation scheme. In setting a maximum, we shall have to follow the logic of that relationship.
The level of expenditure to take into account will be the expenditure level determined or redetermined under Clause 3. As with present expenditure targets, that will be a cash figure covering the whole of the financial year, and it will include all items of expenditure falling to be met from the rate fund or from block grant. Because the figure will relate to the whole of the relevant year, it will be necessary to build in some assumption about the rate of local authority price increases—and this will be done. It will be quite unnecessary to allow for it separately at the stage of calculating the rate limit, as Amendment No. 53 proposes.
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The second item is the estimate of the amount of grant payable in the year. Here, the Secretary of State will be in a similar position to the local authority treasurer in having to make an estimate of how grant will vary during the course of the year. Amendment No. 52 proposes that the grant estimate should take account of grant close ending. But it would be impossible to do that in any exact way. Close ending adjustments are determined by authorities' expenditure decisions collectively. We cannot know what those will be in December-January, when the rate assessing calculations will be done. The facts will not be known until March-April.
Grant may also vary in respect of supplementary reports from earlier years; for example, when there are adjustments to hold-back in the light of out-turn expenditure. The estimate of grant payable will, therefore, have to take account of many factors. But these are the judgments local authority treasurers routinely make every year.
Typically, treasurers would look to see whether they could cover the extent of grant uncertainty from their internal balances. If they cannot they would make extra provision for it in the rate. In determining rate or precept maxima, therefore, the Secretary of State would make a similar judgment. I accept that those judgments will be difficult ones, and for that reason we would provide for a period in which authorities could make representations about the proposed rate limit.
The noble Lord, Lord Stallard, has given a dissertation on the reasons why he believes the grant calculations are not an accurate reflection of what authorities ought to receive. They were telling me that when we were introducing the 1980 Bill. They were comparing it with the multiple regression analysis basis. As I have said in your Lordships' House and in Committee many times, I would give way to any noble Lord who could explain exactly how the multiple regression analysis basis worked for the calculation and distribution of grants. There were no takers. That is because it truly was so obscure that no one could understand it. As noble Lords have heard me say before in the House and in Committee, there are now some 63 factors which can all be debated and agreed or disagreed. Precise and exact it is not; being refined continually every year it is. Better it will become, and certainly better it is than what we had before.
For the purpose we are debating now it is not necessary for us to be satisfied that the grant allocation for any authority is right in an ideal sense; only that it is correctly calculated on the rules which are set in the annual rate support grant settlement. The question is whether we are able to assess accurately enough the likely grant entitlement of a designated authority. I believe that we can do that within the usual degree of certainty accepted by council treasurers.
This is a complicated and somewhat technical area. If the noble Lord feels that he would like to discuss it further with me outside the Committee, I shall be pleased to do so.
Lord Stallard: I am grateful to the Minister for his reply and for his offer to discuss it. I will certainly consider taking up that offer. Meantime, I do not think that he has gone as far as I should have liked him to go.

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He has given as much information as I expected to get, but not as much as I wanted. I will study his reply and, hopefully, come back at a later stage in our Committee proceedings. In the meantime, I do not intend to push this amendment to a Division.
Amendment, by leave, withdrawn.
[Amendment No. 53 not moved.]
The Deputy Chairman of Committees: Perhaps I should mention that if Amendment No. 54 were to be agreed to I would not be able to call Amendment No. 55.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 54:
Page 4, leave out lines 35 and 36.
The noble Lord said: With respect, I take the point that has just been made; the three amendments are somewhat related to each other. Clause 4(2) provides that the Secretary of State may, in determining a maximum rate for a selected authority, take into account any financial reserves available to the authority. The Bill itself does not define "financial reserves", nor is there any definition of this term contained in existing statute. There are two major objections to this provision. First, as it stands the clause is imprecise and is bound to give rise to uncertainly over what is meant by the term. More importantly, the prospect of a central judgment being made over the level of financial reserves in individual local authorities carries grave risks for the efficient financial management of those authorities.
At present the judgment about the levels of rate income and reserves rests upon the recommendation of the chief financial officer. In making this overall judgment a whole range of factors must be taken into account. The approved expenditure for the year is only the starting point. A view must be arrived at on the levels of interest rates, volume of demand-led services, capital expenditure programmes, pay awards, price changes, block grant close-ending adjustments, and levels of fee income over the whole range of local authorities. What all these factors have in common is that none of them is wholly within the control of the local authority.
Arriving at the budget judgment therefore relies heavily on the skill and experience of the local authority treasurer. The Secretary of State, assisted by senior civil servants, could not hope to match the quality of the local decision. It would be far safer from the point of view of sound financial management if the Secretary of State was not permitted to "second guess" from afar local authority treasurers. These amendments seek to bring about that constraint. I beg to move.
Lord Evans of Claughton: Since the noble Lord, Lord Graham, said that these three amendments (Nos. 55 and 56) are really on the same theme, it might be better if I were to speak briefly to Amendment No. in which by changing the word "may" to the words "shall not" we seek to prohibit the Secretary of State
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from taking account of balances and reserves in making his decision.
Amendment No. 55: Page 4, line 35, leave out ("may") and insert ("shall not").
We all know that there are at least two basic reasons for building up reserves and balances; one reprehensible, and the other perfectly supportable. The reprehensible one is when you get into office and see that you have two, three or fours years ahead of you, you build up enormous balances and at the end of the third year you use all the balances to reduce the rate. This has been done consistently by Labour-controlled and Conservative-controlled authorities; not by the Liberal-controlled authorities. I am sure that we would have done it if we could have done. That is the reason involved here. There is no question about that. I think everyone recognised that that has been done.
The defendable reason is that, of course, any sensible treasurer, or director of finance, as he is now called, would want to advise his finance committee that it is important to have some reserves to meet accountable crises or problems, and that no sensible housekeeper would ever leave the cupboard entirely bare of reserves or balances for an eventuality which cannot be immediately calculated. Therefore, I should have thought that it is wrong that reaching his decision the Secretary of State should take any account at all of the balances. That is why we seek to change the word "may" into the very clear and positive phrase "shall not" when it comes to taking balances into account in reaching his determination. Therefore, whether or not I beg to move the amendment, I am certainly speaking to it.
Lord Bellwin: The scenario the noble Lord describes pertains only where you have elections every four years. If one worked in a climate where one had elections every year, there would be no such thing as building up balances. One would be on parade every single year and there would be great merit in that.
There is another important point about reserve funds. These funds are not the authorities' money at all. It is money which is taken from ratepayers, and that is how you build up the reserves. I never believed, nor do I now believe, it is right to maintain great reserves of money at the ratepayers' expense, simply to have a nice comfortable ride. I think that is quite wrong. I have accepted that authorities need reasonable balances to cover themselves from uncertainties, but unusually large balances mean merely that the council is holding on to ratepayers' money, as I say, unnecessarily. The whole purpose of this Bill is to reduce unreasonable burdens on ratepayers. We cannot therefore, when setting rate limits, ignore the money which authorities have in reserve.
There are two basic reasons for rejecting these amendments. The first is to ensure the good financial standing of the authority in view of the uncertainties which all authorities face. The second is to ensure that, where large balances are held at the ratepayers' expense, excessive rate limits are not set so that ratepayers do not see the full benefit of the intervention. This could then be used to maintain an even higher level of spending. This is why I ask the Committee not to accept the amendments.
Lord Evans of Claughton: I was a member of an authority which had annual elections. I have also been a member of authorities which had four-yearly elections. Every year when I was a member of the county council I moved that we should dispose of our balances and was always treated with the most appalling derision by either the controlling Conservative or Labour interest who said that I was doing so for electoral purposes and those funds were there so that the county council had a reserve. I used to say what the noble Lord the Minister is now saying—those reserves belong to the people. I used to be treated with appalling derision. I am sorry that the noble Lord is now using my arguments against me and I am using their arguments against noble Lords on that side of the Committee.
I see the point, but, quite honestly, I feel that there is a serious point about not interfering too much with the balances in coming to a determination. Every authority needs some balances, as the Minister has admitted.
On Question, amendment negatived.
[Amendments Nos. 55 to 58 not moved.]
The Deputy Chairman of Committees: Amendments Nos. 59, 60 and 61 are, I understand, alternatives and presumably can be debated together if your Lordships so wish and then one or two of them not moved or withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 59:
Page 5, line 12, leave out ("may relate to two or more authorities") and insert ("shall apply to one authority only").
The noble Lord said: I appreciate the guidance that the Deputy Chairman has given the Committee. The purpose of Amendment No. 59 and the others in the group is to make sure that only one authority is contained in each report to Parliament on rate limitation. The Minister will be aware of the arguments and of the fairly generous time that we took in arguing these matters at an earlier stage. Therefore I do not intend to proceed with the matter further, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 60 and 61 not moved.]
Clause 4 agreed to.
Clause 5 [Interim maximum]:
11.8 p.m.
Baroness Stedman Baroness Stedman moved Amendment No. 62:
Page 5, line 18, at end insert ("and set out in a Report laid before both Houses of Parliament").
The noble Baroness said: Now we have come to this clause, the procedure on which the Secretary of State makes his decision has become very complex. There is no guarantee that it can be completed by the time the local authority has to approve its budget and set its rate. Therefore, the Secretary of State is to be allowed to set by direction an interim maximum which does not require the direct approval of Parliament but nonetheless will limit the level of rate which can be set by the local authority in its normal budget.
If at a later date Parliament approves a higher final maximum expenditure level, in effect, a supplementary rate will have to be levied. Eighteen months ago supplementary rates were abolished by Parliament, yet, because the Secretary of State presumably accepts that he cannot guarantee to reach a conclusion by the time the local authority has to complete its budgetary process, supplementary rates will presumably once more become legal.
Another danger of the Secretary of State setting an interim maximum is that he can then delay the necessity for parliamentary approval, since that is required only when he sets the final maximum. There is no limit to the time that may elapse before the final maximum is set and before the order is laid before Parliament. However, at this stage this is only a probing amendment in order to find out the views of the Government on whether supplementary rates are now legal, and how they propose to deal with them. I beg to move.
The Earl of Avon: May I just remind the Committee, to start with, of the purpose of Clause 5(1) to which this amendment relates, and try and make clear to the Committee the effect that this amendment would have. Clause 5(1) is essentially a technical provision, as the noble Baroness has hinted. It provides for the most difficult cases; for example, where an authority has made an application for a redetermination of its expenditure level under Clause 3 and, despite its best endeavours, it has been unable to agree a maximum for the rate or precept of the authority and the Secretary of State may have decided he is not yet able to prescribe one by order.
The position could then be that the authority's power to levy a rate would be subject by virtue of Clause 1 to a maximum, but no maximum would have been set. Clearly the authority could not be left with its power to levy a rate of precept in suspension, and a stop-gap would have to be provided. Clause 5(1) provides that stop-gap—an interim maximum which allows an authority to levy a rate while negotiations continue. It is because this interim is a stop-gap—it might be in place for only a few weeks—that I believe the noble Baroness's amendment is unnecessary.
The Secretary of State will be required by Clause 5(3) to replace any interim maximum with a final maximum as soon as reasonably practical. It is not appropriate for the Secretary of State to have to make a report to the House of Commons on interim maxima, which would soon be superseded either by a rate limit specified simply in a direction in writing, where the Secretary of State and the authority are in agreement, or, alternatively, by an order subject to a full scrutiny of that House where the two cannot agree.
I shall have something to say on the supplementary propositions of the noble Baroness in the debate on the amendment after next, if I may leave them until then. But I hope that with this clarification I have removed some of her doubts and she might be prepared to withdraw her amendment.
Baroness Stedman: I am grateful to the noble Earl. At this time of the night I will withdraw the amendment, with the leave of the Committee, and read what the noble Earl has said. Perhaps it will be

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clearer to me when I see it in writing in the morning, in the clear light of day, than it is at this time of night. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Nicol Baroness Nicol moved Amendment No. 63:
Page 5, line 22, leave out paragraphs (a) and (b) and insert ("1st December").
The noble Baroness said: This is a perfectly straight-forward amendment and it is hoped one that the Minister will feel minded to accept. The date specified in Clause 5(2) by which either a maximum or interim maximum must be specified is too late. It arises in a situation where relationships between the authority and the Secretary of State are likely to be a little strained. It makes it unlikely that acceptance or agreement to the proposed maximum will be readily or speedily forthcoming. In these circumstances, it is vitally important that the strict timetable for the issue of rate demands is not threatened by the need to allow time for proper discussion and exchange of information concerning the appropriate rate or precept level.
This amendment seeks to allow a more realistic time-scale for such decisions. I remind the Committee that the amendment is simply to substitute "1st December" for the dates given in the Bill. I beg to move.
The Earl of Avon: Clause 5 provides a power to prescribe interim maxima for rates and precepts in the most difficult cases. As I have said, interim maxima are a stop-gap to ensure that no authority is left unable to raise a rate because of delay in setting a rate limit for it. They would be prescribed only if time was running short and the beginning of the rating year was approaching. That is why we have provided in the Bill as presently drafted that interim maxima should be set, if it proves necessary, by 1st March, in the case of a rate, and 15th February, in the case of a precept.
Precepting authorities have to issue their precepts to the rating authorities which will levy them 21 days before the beginning of the rating year; that is to say, 10th March. We propose that interim maxima should be set well before this. Rating authorities would get either a final or an interim maximum a month before they had to make a rate. I believe the dates already provided in the Bill therefore strike a good balance between giving the authority adequate notice of the maximum while avoiding setting an interim maximum unless it is really necessary to do so.
If the noble Baroness's amendment were carried, interim maxima would have to be prescribed on 1st December in the year before a rate limit was to take effect. This would change completely the nature of interim maxima. In practice, they would be set for every designated authority as a matter of course, because we should never be in a position to propose maximum rates by 1st December.
We hope that the dates provided in the Bill as drafted will give authorities adequate time in which to fix their rates if it has not proved possible to fix a maximum before the financial year begins. It ensures that no authority will have to do without rate income at the start of the year. I hope that on this rather complicated clause this explanation will have assisted
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the noble Baroness and that she will not feel it necessary to press the amendment.
Baroness Nicol: I understand the answer that I have been given, but it does not really meet the point. All three local authority associations have come to the same conclusion: that the time suggested is too late. However, I should like to think that the Minister would at least consider whether, if 1st December is too early, there might not be some time in between that would allow a little more flexibility. At this stage I do not propose to press the amendment, but I should like further time to think about it.
Amendment, by leave, withdrawn.
Baroness Stedman Baroness Stedman moved Amendment No. 64:
Page 6, line 4, at end insert—
("( ) If by the relevant date (as defined in subsection (2) above) the Secretary of State fails to prescribe either an interim or a final maximum for a financial year he shall cease to have the power to prescribe a maximum rate or precept for that authority in that financial year.
( ) If an authority makes a substituted rate or precept pursuant to subsection (4) of this section, the Secretary of State shall pay to that authority its expenses incurred in making and collecting such substituted rate or precept.").
The noble Baroness said: This amendment is designed to make clear what happens if the Secretary of State is unable to meet the timetable for the rate limitation as set out in Clause 5. It means that in such an event the authority is removed from rate capping. The Bill says that the Secretary of State must issue a final or interim maximum rate. But it is unclear from the Bill so far what procedure is to be adopted if the Secretary of State fails to do so. The authority would have been designated, would have had an expenditure limit prescribed but would have had no rate prescribed. The precepting authority has to levy its rate 21 days before the beginning of the financial year. So what is the position if the Secretary of State does not issue a maximum statement to a precepting authority, thus putting the authority in breach of its statutory duty to levy its rate 21 days before the beginning of the financial year?
The first part of the amendment avoids any uncertainty and litigation by giving the Secretary of State a clear incentive over and above his statutory duty to issue the maximum rate on time. The second part of the amendment deals with the situation where the Secretary of State has finally decided on the maximum rate or precept which a rate-capped authority may levy and he is allowed to specify an interim maximum and change his mind subsequently. The rate-capped authority will have to act on the interim maximum and levy a rate accordingly. But when the final or revised maximum is issued, then the rate-capped authority may well wish to revise the rate or precept which it has already issued.
Having acted on the first ruling and issued rate demand notes, it may then have to issue a revised rate demand. In that way, it will incur additional costs in collecting the rates which will be significantly additional. The rating authority, we feel, should be reimbursed by the Secretary of State for this additional expenditure. There is a precedent for this in the Local Government Finance Act 1982 under Section 3(4)(b), where a rating authority is entitled to recover from the

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precepting authority the administrative and rate collection expenses where a precepting authority issues a substituted rate under that section. What we should like to see is the same facility written into this Bill. I beg to move.
11.20 p.m.
The Earl of Avon: I believe the noble Baroness's amendment could be based on a misunderstanding of what the interim limits are about, and if I may I shall try to explain. Interim limits are a complication which we should much prefer to avoid in practice. But we think it necessary to provide for them in order to safeguard the position of the authority which, for whatever reason, has not had a final maximum set by the due date. As I said, those dates have been carefully chosen to strike a reasonable balance between allowing the maximum time for discussion and giving the authority sufficient time to take account of the limit set in determining its rate or precept.
The authority will already of course be generally aware of what will be expected of it under rate limitation because of the expenditure limit which the Secretary of State will have proposed for it. Therefore it is not the case that the final or interim rate or precept limit will be an essential piece of information for the authority in deciding on its spending policies. But they are essential in the technical process of setting rate or precept levels. We hope that in most cases it will be possible to move straight to final limits. Interim limits would only be set as a last resort, and only if it became clear that a final limit could not be set in time so that an authority, without an interim limit, would be unable to fix its rate or precept. That is why the wording of Clause 5(1) is permissive:
"may prescribe an interim maximum".
We believe that the interests of authorities will be best served by knowing clearly where they stand. Interim limits will only be set if all other efforts to set a final limit have failed. The amendment, by bringing forward the date by which an interim maximum would have to be set, would operate against that basic objective—an objective which seems to me to be helpful to authorities rather than the reverse.
I turn now to the second part of the amendment, and what has been portrayed as the unfair costs which could be imposed on ratepayers if an authority were to issue a substitute precept or make a substitute rate under subsection (4). One thing we can be sure of is that any costs incurred by it will be small indeed when compared with the spending.
The noble Baroness talked earlier about substitute rates, and perhaps at this stage I may say a few words about that. I should like to dispel any suggestion that substitute rates and precepts are in any way a resurrection of the old power to raise a supplementary rate, which was done away with under the Local Government Finance Act 1982. Supplementary rates were a hangover from the way the rating system used to work, with periodic issuing of a rate as and when it suited an authority.
As modern methods of accounting and financial planning developed, the annual cycle of budgeting and rating became accepted as the best way to manage an authority's financial affairs. Authorities still retained,
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however, the power to make a rate at any time. This enabled some authorities to break out of the constraints of a properly managed annual budget by issuing supplementary rates to make a mid-year boost in their spending. In our first term of office we put a stop to that.
In contrast, substitute rates at a higher level will be permitted only in exceptional circumstances, when the Secretary of State has agreed to a higher figure and not at the sole discretion of the authority. There will be an adjustment to take account, if necessary, of the final settling of negotiations between an authority and the Secretary of State on the maximum prescribed for its rate or precept. We can assume that any substitute rate or precept will be a good deal lower than what would have been set had rate limitation not been introduced.
I am conscious that the noble Baroness gave a very lucid description when she moved her amendment. I have spoken at some length in reply to her, and perhaps we can both look at what has been said. If she wishes to come back to it, of course she is at liberty to do so.
Baroness Stedman: I am grateful to the noble Earl, Lord Avon. I should like to read what he said; it is a little complicated. I still think that if we have a substitute rate it is perhaps a supplementary rate by another name. I should have liked a little more satisfaction about the reimbursement of the cost if a second rate has to be sent out. Even though it may be small, it may be a lot to an authority which is being rate capped. I shall look at what the noble Earl has said and if necessary will come back to it at a later stage. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 agreed to.
Clause 7 [Certificates of compliance]:
[Amendments Nos. 65 to 68 not moved.]
Clause 7 agreed to.
Clause 8 [Information]:
[Amendments Nos. 69, 70 and 71 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 71A:
Page 7, line 34, at end insert—
("( ) For the purpose of enabling him to prescribe a maximum for a precept under this Part of this Act the Secretary of State may require each rating authority to which the precept can be issued to furnish him with an estimate of the amount, calculated in the manner prescribed under the General Rate Act 1967, which would be produced in the year in question by a rate of a new penny in the pound levied in its area or any part of it; and if any such estimate is not furnished within such time as the Secretary of State may require he may himself make the estimate for that purpose.")
The noble Lord said: This is a technical amendment concerned with the calculation of precept limits of designated precepting authorities. I think it would assist the Committee if I described briefly the context in which the amendment is set.
Clause 8 is not itself concerned with the calculation of rate or precept limits, but one of its purposes is to

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ensure that the Secretary of State can require all the necessary information to be supplied to him so that he can determine a maximum. The clause as drafted requires any designated authority to supply the Secretary of State with information he may require for the purpose of exercising his powers under Part I of the Bill.
However, on closer examination it has become clear that the powers in Clause 8 may not in certain circumstances be quite adequate. This amendment seeks to extend the powers to require information.
Clause 6, over which we have just rapidly passed, provides for the way in which a maximum precept will be presented. A maximum precept will be expressed as:
"a limit on the amount in the pound of the precept".
That is the figure which appears on our rate bills and when multiplied by the rateable value of our property tells us how much we must pay to the county council or whoever. The figure is calculated by dividing the county's precept by an estimate of the amount raised by a rate of one new penny across the county in every district.
However, the basis of the amendment is that it will not be sufficient for the Secretary of State to have information only on a designated authority; he will also need it for all authorities where it is a precepting authority itself which is to be designated. I beg to move.
On Question, amendment agreed to.
Clause 8, as amended, agreed to.
Lord Denham: I think that we have now reached the stage at which it is generally agreed that we should resume the House again. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to. House resumed.
House adjourned at twenty-nine minutes past eleven o'clock.