Lords Sitting of 5 June 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 Chichester.
The Marquess of Exeter—Took the Oath.

NHS Hospitals: Nurses' Accommodation
Baroness Vickers: 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 consideration is being given to the selling of nurses' accommodation throughout the NHS hospitals.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, we are considering a Rayner scrutiny report which examined the way in which the NHS uses its large stock of accommodation for all types of staff. We plan to publish the report shortly and to consult upon it.
Baroness Vickers: My Lords, in thanking my noble friend for that reply, may I ask him whether he will be kind enough to consider turning some of these homes into flats which could be rented by nurses who want to live their individual lives after working their shifts? Also, such flats would be very convenient for them, since when they have to go home on dark nights they sometimes need protection, especially in certain areas in London.
Lord Glenarthur: My Lords, I share my noble friend's concern about people travelling home late at night in London, and especially young girls, but I think it is important to remember that only a relatively small proportion of nurses use health authority accommodation. I think that what my noble friend suggests is primarily a matter for the local health authorities, and I am sure they will note her views.
Lord Molloy: My Lords, does the Minister agree that it might be sensible and worthwhile to acquaint with the situation at regional level the Confederation of Health Service Employees, which looks after the interests of nurses, so that there can be a joint endeavour on what the noble Baroness has in mind, to everybody's advantage?
Lord Glenarthur: My Lords, that will all form part of the consultation process.
Lord Ennals: My Lords, is it not a fact that the Secretary of State has had this particular Rayner report before him now for several weeks? Why, therefore, has it not been published? I have asked the Minister questions such as this on similar occasions. When documents are prepared, why can they not be
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published so that the House, the public, and the professions themselves can discuss the issues? May I ask the noble Lord for three assurances on the subject itself? First, will students in training not be denied accommodation in nurses' homes? Secondly, will provision be made for temporary accommodation which may be required for nurses who need to move in because of an emergency? Thirdly, will the Minister's right honourable friend the Secretary of State not take a decision without consultation with all involved, unlike what happened with the Griffiths Report on management?
Lord Glenarthur: My Lords, I thought that I had answered most of those questions in the first place. The report will be published, probably later this month; it is for my right honourable friend to decide precisely when, and the noble Lord will be aware of that. So far as students in training and temporary accommodation are concerned, these are all matters that will be taken into account in the consultative process.
Lord Kilmarnock: My Lords, can the noble Lord give us an assurance that those nurses and trainee nurses who use this accommodation will not be forced onto the open market? Does he agree that at the present moment the cost of special accommodation for nurses is between £38 and £110 a week in central London, and that if they go onto the open market, they will have to pay upwards of £40 a week? Will the Government bear that in mind?
Lord Glenarthur: Yes, my Lords, there is no question of anybody being suddenly turned out onto the streets. We shall consult on what should be the health service's policy on accommodation for staff. If it is decided to reduce the existing stock, the reduction will of course be achieved over a period of years.
Baroness Masham of Ilton: My Lords, does the Minister agree with me that the need for nurses' accommodation differs very much indeed throughout the country? Is he aware that in some of our districts up in Yorkshire we rent accommodation for nurses from local authorities?
Lord Glenarthur: My Lords, I was not aware of what the noble Baroness says about Yorkshire, but certainly it is true that the needs differ throughout the country.

Gatwick Airport: Runway Facilities
2.41 p.m.
Lord Beswick: My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what estimates have been made of the cost to operators at Gatwick Airport incurred as a result of delays caused by the temporary non-availability of the single runway; whether they are satisfied that these costs will not be increased by the expected development of future traffic, and whether they will give an assurance that the facilities of the proposed

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emergency runway will be available to make the fullest contribution towards the reduction of delays and costs.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, information on the costs which arise from the temporary non-availability of the single runway at Gatwick Airport is not available. However, the majority of closures are for planned maintenance, and operators are given adequate notice in these cases to make alternative arrangements so as to minimise or avoid any extra costs. Under the terms of the planning consent for the emergency, runway, on which work has now commenced, it can be used only when the single runway is non-operational. The British Airports Authority intends to make maximum use of it at such times.
Lord Beswick: My Lords, in thanking the noble Lord for that Answer, may I ask him whether it would not be advisable to obtain a closer estimate of the cost involved? Is it not a fact that the enormous investment at Gatwick, by both the airports authority and the operators, will be absolutely stultified if that one runway is not available for periods of an hour or half an hour? In those circumstances, is it not preferable—indeed, essential—to make certain that that taxiway is developed into an alternative runway which can be more fully available?
Lord Trefgarne: My Lords, as I said in the original Answer, the planning consent, to which I referred, did not provide for the taxiway to be developed for use as a full runway as the noble Lord is asking. Indeed, I think that there would be considerable physical difficulties in doing that because, as the noble Lord will recall, the taxiway is quite close to the existing main runway, and in any event there are certain topographical difficulties in the area which I think would prevent a full runway being constructed for the purpose that the noble Lord has in mind.
Lord Beswick: My Lords, may I make it clear to the noble Lord that I am not asking for the taxiway to be a main alternative runway? I am asking for it to be more readily available, not simply in crude emergencies, but in order to supplement the main runway on occasions. May I ask the noble Lord whether he will look into the question of costs even more closely, because, as traffic develops, this one runway just will not be able to accommodate the 25 million passengers expected each year?
Lord Trefgarne: My Lords, the question of whether or not a single runway can accommodate 25 million passengers is one about which some of your Lordships have asked me on a number of occasions. The Government remain of the view that the single runway will be able to handle 25 million passengers a year by the time we reach the mid-1990s, because we expect that by then the average load of the aircraft using the runway will have significantly increased. So we remain of the view that our estimates in that particular area are appropriate. We also remain of the view that a second runway would cause very considerable
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difficulties of a kind that I have previously described. That is why we decided that we should not proceed on that basis.
Baroness Burton of Coventry: My Lords, reverting to what the noble Lord, Lord Beswick, said about the taxiway being more readily available, may I ask the Minister whether he is aware that an airline told me recently that in one year it had cost them half a million pounds for delayed landings when the main runway was in use? Secondly, may I ask him whether he recalls that on 23rd May he told the House that the taxiway—and mention is made of facilities in the Question—could not be used in adverse weather conditions, and neither could it take fully laden public transport? Therefore, does he understand that we are not impressed with the facilities that he talks about?
Lord Trefgarne: My Lords, I accept that the emergency runway which is now being constructed will not be available for use in the most adverse conditions. If the noble Baroness would like me to go into detail on that point perhaps it would be appropriate for me to write to her on it. However, the runway will be equipped with a range of lights so that it will be possible to use it at night, provided that the weather is not particularly adverse.
Lord Underhill: My Lords, the Minister said that under the terms of the planning consent the emergency runway can be used whenever the main runway is not operational. Are there any restrictions at all in that regard, are there any special procedures that must be gone through, or will it be automatic procedure?
Lord Trefgarne: My Lords, I understand that the emergency runway will come into use automatically if for any reason the main runway is not available.
Lord Beswick: My Lords, is the noble Lord aware that I greatly respect his aviation background? In the light of that background may I ask him to look again at the question of the increased size of aircraft which he says will be operating in the mid-1990s? Will he take into account the present sales of the 146, the 737/300, and the A.320, which will mean that the average size of aircraft will be nothing like the size that has been built into the calculation to which he referred?
Lord Trefgarne: My Lords, it is a question of not only the size of the aeroplane being used, but also the load factor and how many seats of a particular aeroplane are occupied. I should not wish to bore the House or the noble Lord with the detailed arithmetic involved, but perhaps I may write to the noble Lord with the particulars of the arithmetic.
Lord Bruce of Donington: My Lords, in regard to the first part of my noble friend's Question, is the noble Lord aware that there are available conventional accounting techniques which enable the figure asked for by my noble friend to be determined with a fair degree of approximation? Will the noble Lord have another look into this matter, with a view to providing the House with approximate information?
Lord Trefgarne: My Lords, as the noble Lord says, there are a number of accounting techniques which can be applied to these considerations, but they have to take into account, and make, a number of assumptions which may or may not be valid in five or 10 years' time. Therefore, I am not sure whether a broad brush calculation made now—no doubt it could be made—would be helpful to either the noble Lord or the House.
Baroness Seear: My Lords, would the noble Lord accept that the House would not be bored by the detail, since it is the detail which determines the substance of the answer?
Lord Trefgarne: My Lords, I hear what the noble Baroness says, but I must say that when I made those remarks I heard some appreciative groans from behind me.
Lord Avebury: My Lords, frequently information is proffered by Government Ministers in the form of a letter written to the noble Lord who has put the particular question. Since there may be a wider circle of noble Lords who are interested in the answer to the question may I ask the Minister whether he would consider it useful to have in this House a procedure whereby the information offered by a Minister could be circulated in the Official Report, rather than contained in a private document which is accessible to only one Member? Will the noble Lord undertake to see that that suggestion is considered through the usual channels?
Lord Trefgarne: My Lords, as the noble Lord suggests that is a matter for the usual channels. I normally undertake to write a letter in that way when I imagine that the information is of interest only to a particular noble Lord or noble Baroness. But if, for example, the noble Lord would like me to give the information in answer to a Question for Written Answer, I should be very happy to do so.
Lord Wells-Pestell: My Lords, will the noble Lord say whether, provided he obtains the permission of the two persons to whom he is to address his correspondence, there is any objection to a copy of each letter being placed in the Library?
Lord Trefgarne: My Lords, I am not sure whether that is the normal procedure, but if that is the wish of the House and of those who are to receive the letter, I should be very happy to do it.
Baroness Burton of Coventry: My Lords, as the Minister is being good enough to write to me further about the adverse weather conditions, would he be able to have inquiries made as to the costs and the delays which are occurring to airlines because there is only this one, single runway at Gatwick, or does he think that might be too dangerous a course to pursue?
Lord Trefgarne: My Lords, as I said to the noble Lord, Lord Bruce, it may be possible to produce some figures of that kind, but I am not sure whether they would be very reliable ones. The noble Baroness may
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be reassured to know that last year, apart from planned closures, the runway at Gatwick was not available for only 53 minutes.

Air Transport Licensing Policy
2.50 p.m.
Lord Beswick: My Lords, I beg leave to ask the second Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will give an assurance that the current process of consultation and decision-making with regard to the future regulation of civil air transport will not be finalised simply to enable an early marketing of the shares of British Airways, and whether they will consider the advantages of postponing the sale of these shares.
Lord Trefgarne: My Lords, the review currently being undertaken by the Civil Aviation Authority is a thorough study of the implications of privatising British Airways for competition and the sound development of the British airline industry. The Government expect changes, if any, in air transport licensing policy arising out of the review to be decided well in advance of privatisation and there should therefore be no need to delay it on that account.
Lord Beswick: My Lords, I thank the noble Lord for his Answer. Is he aware that I share the view that the present process of consultation is absolutely admirable? However, in view of the complexity of the issues involved, is it not essential that adequate time be given for the decision-making process? In particular, will he bear in mind that there is a growing feeling that the proposed sale of British Airways could well be delayed to give the potential investing public a better opportunity of assessing the significance of the recently announced quantum leap in profits?
Lord Trefgarne: My Lords, the investing public will of course have a full opportunity to consider the merits of the proposals that are put before them when the documents are issued in due course. It is, of course, important that potential investors are aware of the sort of competitive environment in which British Airways will be operating. That will be made clear to them at the same time.
Lord Underhill: My Lords, can the Minister give an assurance that before the privatisation of British Airways takes place, following the conclusion of the review, there will be a parliamentary debate on the issue and not just a Statement in either House?
Lord Trefgarne: My Lords, the question of debate on these matters would not be one for me. I feel sure, however, that what the noble Lord says will be heard by the usual channels who sit in your Lordships' House. It is perhaps worth saying that the proposal to privatise British Airways is one that has been well known to your Lordships for a long time. Indeed, it was I who had the honour some two years ago of

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taking through your Lordships' House the Bill that made provision for this step.
Lord Mackie of Benshie: My Lords, can the noble Lord say how channels sit?
Lord Trefgarne: My Lords, comfortably.
Lord Balfour of Inchrye: My Lords, would it not be to the great advantage of a large number of the staff of British Airways and also the conduct of foreign airline negotiations about British Airways if we could have the earliest possible privatisation?
Lord Trefgarne: My Lords, my noble friend will not be surprised to hear that I agree with the assertion that he makes. I believe that the privatisation of British Airways would be very much in the interests both of the staff and of the company itself.
Lord Bruce of Donington: My Lords, will the noble Lord when he studies this matter further, also consider telling the House and the country what benefits are supposed to flow to the British taxpayer as a result of this ridiculous transaction?
Lord Trefgarne: My Lords, I am not sure that now is the occasion to consider again the merits of privatisation of British Airways. They have been discussed at great length in your Lordships' House, not least during the passage of the Bill to which I have referred.
Lord Kaldor: My Lords, will the noble Lord say how many airlines of other countries which were in public ownership have been subsequently privatised?
Lord Trefgarne: My Lords, I am afraid that I have not got that figure in my head. But is fair to say, I think, that a large number of major world airlines are not in public hands.
Lord Molloy: My Lords, can the Minister say what degree of consultation takes place, and whether this will continue, with the staff associations, which are numerous, involved in British Airways?
Lord Trefgarne: My Lords, the staff of British Airways have, of course, been kept fully informed of the Government's plans as they have developed. It is perhaps worth adding that they will be given a chance to participate in the privatisation when the time comes.
Lord Beswick: My Lords, the noble Lord referred to the need to look at the published facts about the value of British Airways position. If it is a fact that a company makes special provision, writes down its assets by some 350 million in one year and then, in the following year, brings back some of those provisions and increases the value of some of its aircraft by no less than 100 million, does that not mean that there is bound to be an unfair reflection on the past efforts of the staff of British Airways as compared with the present administration?
Lord Trefgarne: My Lords. I think that the important factor to remember is that in recent months and years, British Airways has remarkably improved its position as a major airline. I think that, when the time comes to offer shares to the public, there will be a warm welcome for them.
Lord Molloy: My Lords, will the Minister agree that there cannot be anything special in allowing the staff of British Airways to participate? I would assume—the Minister will tell me if I am wrong—that anyone on this island can participate in the privatisation that is going on. There is nothing special about saying that the staff can. Or was it in the Government's mind that they should not be able to? Will the converse view be considered when those trade unions and staff associations are opposed to the privatisation of what they consider to be a national rather than a private asset?
Lord Trefgarne: My Lords, the noble Lord has. I think, misunderstood my earlier remark. The arrangements for the staff to which I referred will be advantageous, not just the ordinary ability to buy shares on the open market.
Lord Beswick: My Lords. is the noble Lord aware that many people will be especially pleased that he referred to the previous efforts of those responsible for British Airways, including people like Mr. Roy Watts, who has been displaced? Will he bear in mind that the figures recently published appear to accord more credit to the efforts of Saatchi and Saatchi and the accountants than the airline operators?
Lord Trefgarne: My Lords, I think that the noble Lord underestimates the very remarkable improvement that has occurred in the fortunes of British Airways as a result not only of the efforts of previous members of the staff but particularly of the new chairman, my noble friend Lord King.
Lord Mackie of Benshie: My Lords, in view of the fact that most major airlines are back in profit and have greatly improved their results, will the noble Lord say by how much British Airways has outperformed other major airlines in the same field?
Lord Trefgarne: My Lords, again, I have not got comparative figures at my fingertips. But the improvement that British Airways has achieved in recent years, as I have already said, has been quite remarkable. Off the top of my head, I would think that it has outstripped a good many other airlines.

The Homeless: Bed and Breakfast Accommodation
2.58 p.m.
Baroness Ewart-Biggs: 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 proposals they have to prevent the misuse of public funds by commercial landlords letting accommodation to homeless people.
Lord Glenarthur: My Lords, the role of the supplementary benefit scheme in supporting homeless people in board and lodging accommodation is to pay sufficient benefit to enable the claimant to meet the charge for the accommodation of his or her choice, subject to a locally determined limit which ensures that payment is restricted to a reasonable level for the area concerned.
Baroness Ewart-Biggs: My Lords, I am grateful to the Minister for that Answer. Does he not agree that the DHSS should give some guidance to its local offices on the standards that bed and breakfast accommodation should attain? Is there any prospect of this guidance being given? If so, will the DHSS review the results? Can the Minister also say whether there are any plans for producing a leaflet for claimants showing them what are their rights in respect of bed and breakfast accommodation? Have the DHSS any plans for not giving claimants vouchers for accommodation that they reckon to be substandard?
Lord Glenarthur: My Lords, as the noble Baroness will be aware, responsibilities in the matter are split between local authorities on the one hand and the Department of Health and Social Security on the other. Local authorities have wide powers under the Housing Acts to require improvements in standards of board and lodging accommodation. The Department of Health and Social Security plans to remind supplementary benefit staff that they should inform the local authority of any establishment that they visit where there seems to them to be cause for concern. I note the noble Baroness's point about leaflets; but so far as the issue of vouchers is concerned, it is for the benefit claimant to find his own accommodation. If the landlord insists on the issue of a voucher before he will accept him as a resident, then a voucher will be issued whatever the standard of the accommodation.
Baroness Faithfull: My Lords, may I ask my noble friend the Minister whether it is true to say that his right honourable friend the Secretary of State has done a survey into the whole position with regard to social security? Can this matter not he looked at with more care than has been shown in the past?
Lord Glenarthur: My Lords, I am sure that this particular matter will form part of my right honourable friend's survey.
Baroness Birk: My Lords, is the Minister aware that the costs of keeping people in bed and breakfast accommodation are far higher than the revenue cost of building new homes, which is really the only economic and humane way of reducing the enormous number of homeless people?
Lord Glenarthur: My Lords, I do not think that the picture is as black as the noble Baroness points out. This Government have a record of selling council houses to those who need them, which has been a highly popular move; the noble Baroness will be well aware of that. Local authorities are beginning to build, particularly sheltered houses. Furthermore, there are a great many joint schemes, in conjunction with the DHSS, which are also beginning.
Lord Dean of Beswick: My Lords, is the Minister not aware that, despite his answers, the prospects under this Government of adequate housing for the homeless are being reduced quite dramatically from the point of view of accommodation and also social security payments? When are the Government going to bring in measures to reverse this trend?
Lord Glenarthur: My Lords, I know that some landlords make excessively high charges and this is something which we must draw to the attention of the local authorities when these matters arise. But, as I said just now in answer to the noble Baroness on the Front Bench, this Government have done a great deal and are continuing to develop means of improving the housing situation throughout the country.
Lord Molloy: My Lords, is the Minister aware that he himself touched on the vital point, and it is right and proper that he did so? What annoys many people is this. Private organisations which own sub-standard housing accommodation and let it to the very poor in point of fact are drawing social security but getting very poor people to go and fetch it for them.
Lord Glenarthur: My Lords, I am not entirely sure what point the noble Lord makes; but, as I said, in the cases where excessive charges have been made by landlords every step that can be taken to bring it to the attention of the local authority is being taken.
Baroness Robson of Kiddington: My Lords, would the noble Lord agree that despite the responsibility which the local authorities have for inspecting the premises, it is only the DHSS, who hand out the vouchers, and the social security people who are capable of knowing if a house containing 20 rooms is housing 60 or 80 people?
Lord Glenarthur: My Lords, it does not apply just to the DHSS; it also applies to the local authorities. That is why, in answer to an earlier supplementary, I said that when the supplementary benefit officers go round and look at the accommodation they will draw to the attention of the authority standards which are not satisfactory.
Baroness Macleod of Borve: My Lords, may I ask my noble friend the Minister if he is aware that I have been informed that during the past two years a considerable amount has been done in helping the single homeless to find homes? Indeed, since Rowton Houses were closed many other much more suitable premises have been taken over and are now being used by local authorities and the DHSS. Is he aware of that?
Lord Glenarthur: My Lords, I am very grateful to my noble friend for her helpful supplementary question.
Baroness Ewart-Biggs: My Lords, would the Minister not agree that where unfurnished accommodation is available and the claimant has no furniture a single payment out of public funds for furniture is better than putting that claimant into furnished accommodation, which very often is bed and breakfast and is going to cost a great deal more than a single furniture payment?
Lord Glenarthur: My Lords, I am aware of the situation with single payments; but I can say to the noble Baroness that this is a question to be decided jointly between the local authorities, who provide the houses, and the supplementary benefit authorities.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend the Leader of the House, with the leave of the House, will repeat a Statement that is to be made in another place on the visit of the South African Prime Minister.
It may be for the convenience of the House if I announce that the Report stage of the Rates Bill will be adjourned for dinner at approximately 7.30 p.m. for approximately one hour, and that during this adjournment the Committee stage of the Cycle Tracks Bill will be taken.

Building Bill [H.L.]
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords. I beg to introduce a Bill to consolidate certain enactments concerning building and buildings and related matters. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question, Bill read a first time, and to be printed.

Road Traffic Regulation Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Betting, Gaming and Lotteries (Amendment) (No. 2) Bill
3.6 p.m.
Lord Crawshaw: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Crawshaw.)
On Question, Motion agreed to.

Urban Parishes Bill [H.L.]
Report received.
Dangerous Vessels Bill [H.L.]
Report received.

Rates Bill
3.9 p.m
Report received
Clause 2 [Designation of authorities]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 1:
Page 2, leave out lines 24 and 25 and insert ("before and approved by the House of Commons in the preceding financial year and on such report having been approved as aforesaid the Secretary of State shall serve").
The noble Lord said: My Lords, I think it would be helpful to the House if I indicated clearly what it is that we are seeking to delete and also the significance of the words that we intend to insert. Clause 2 deals with the designtion of authorities, and as the House is already aware from the happenings at the Committee stage, this is a very significant stage in the process. Clause 2(1) states:
"The authority or authorities in whose case a maximum is to be prescribed under section 1 above for any financial year shall be designated by the Secretary of State in a report laid".
Then we delete the next two lines:
"before the House of Commons in the preceding financial year; and on laying any such report the Secretary of State shall serve".
The significance is that what we seek to do here is to indicate not merely that the reports shall be laid before the House but that they shall also be approved. The House will be aware that in Committee the noble Lord, Lord Evans of Claughton, sought to persuade your Lordships that this was a sensible thing to do when he moved an amendment remarkably similar to this one. However, there is a significant difference, because in Committee we were proposing that the legislation should be laid and approved by both Houses of Parliament.
We took very much to heart the words of the Minister who on more than one occasion made reference to the other place. We took the view that one of the Minister's objections—and I do not know whether he is prepared to agree to this—was that the report had to be laid before and approved by' both Houses. What we are doing—and certainly this is considered reasonable by those outside the House—is probing to see whether we can make some progress in this respect. We bear in mind that there is a relationship between both Houses, and not for a moment do we want to take away any of the sovereignty of both Houses or the eminence of the other place in respect of primary legislation. We are seeking in this amendment to see whether we can make some progress in at least having the orders not merely laid, but approved by the House of Commons.
We are very concerned at our continued inability to secure from the Minister a more precise definition of the principles which are constantly being referred to. We shall be coming in later amendments to the importance of the principles, the application of the principles, the classes to which the principles can be applied and what we consider to be the remarkable flexibility which the Minister is showing at this stage as regards the extension of the use of principles in the designation order. We hope that the Minister will be

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able to tell us that he can see a glimmer of hope in adding some more authority to the ways in which the other place will be able to discharge its functions.
When we sought to do that in Committee, the Minister in rejecting our suggestion that the report should be approved in both places, said:
"This does not mean, of course—and here we are touching on the point debated in the last amendment—that we believe the Secretary of State should be immune from parliamentary scrutiny of his actions under the legislation. But parliamentary supervision is not exercised solely through the requirement to have all Executive decisions endorsed by way of subordinate legislation …I am referring to the parliamentary Question, to the adjournment debate, to the facility which the Opposition have to bring matters before the other place, and, more recently, to the detailed scrutiny possible through the mechanism of the Select Committees. These are not negligible devices".—[Official Report, 26/4/84; col. 222.]
We would agree with the noble Minister that the procedures which he outlined and which he pointed out were available in order to have these matters raised and discussed are not negligible devices. We are seeking to make the approval of the report which designates an authority, more than merely something which can be raised in an adjournment debate, or in a parliamentary Question or discussed in a Select Committee. We believe that there is stature and status outside the parliamentary arithmetic which will govern these matters at the end of the day. We believe that any authority which is the subject of a report and which in effect is going to be designated with all that that implies is worthy of being treated as a major piece of parliamentary business.
The Bill is full of important and vital triggers. The first trigger is designation. At present the Bill lays down a very limited number of matters which the Minister will take into account when he designates. First, the authority should be spending more than £10 million. Those which are spending below £10 million are excluded. Secondly, the authority should be spending above its GRE. Thirdly, the authority's expenditure should appear to the Secretary of State:
"to be excessive having regard to general economic conditions".
"Appear", "excessive", and "general economic conditions" are all judgments by the Secretary of State and only by the Secretary of State. According to the Bill, once he decides that an authority falls within those parameters he alone will decide that it shall be designated.
On the basis of criteria 1 and 2—that is, spending above 10 million and spending above the GRE—the Corporation of the City of London is a prime candidate for rate capping. In 1983–84 it planned to spend 229.72 per cent. above GRE. In 1984–85 it is planning to spend 246.95 per cent. above GRE compared with its neighbouring borough of Hackney which is planning to spend 79.16 per cent. When the Minister has repeatedly told us about the 80 per cent. and 90 per cent. overspenders, he never brought in the Corporation of the City of London. Islington, which has been mentioned, is planning to spend at the outrageously high level of 49.86 per cent.!
What we are saying to the Minister is that when he talks about "excessive" and about general principles, he must be very careful indeed. We believe that parliamentary scrutiny should be such that it ought to be possible to satisfy everyone outside that they have had a fair crack of the whip. We know that the
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Minister will have good arguments. In fact, I am prepared to believe that he had good grounds for initiating this legislative move in the first instance. We are not, in this amendment, arguing against the basis of the legislation. We are saying that once the Minister has decided that an authority by its own actions—and it will defend its own actions—has caused itself to be designated, then before that designation proceeds, the designation in the report ought to be subject to the approval of the House. I very much hope that the Minister will have something helpful to say to the handful of authorities that we are told are likely to be caught in the designation trap. I beg to move.
The Minister of State, Department of the Environment (Lord Bellwin): My Lords, the noble Lord has explained the reasoning behind the amendment in some detail. I agree with him that it is an important matter and I will try to respond in the same way. I certainly agree that the changes from the original amendment do make it a little better. But the problem, so far as we are concerned, is that they do not remove the fundamental objection to it. Let me try to explain why.
The amendment proposes what we think is an unnecessary and over-cumbersome procedure which would require Parliament to consider an affirmative order about detailed decisions every year, whether or not there was a desire in the other place for a debate. I am aware that there may have been some confusion about the procedures we are proposing for designating authorities under the selective scheme. That is why I think I ought properly to take a moment to make the position quite clear.
Where there is a significant difference of opinion between the Secretary of State and a selected authority about the level of its rate limit, Parliament must decide. We have provided in Clause 4 for an affirmative order procedure where the Minister and the authority cannot agree. We do not accept, however, that every step on the way to a final decision about rate levels should be subject to reference back and formal procedures in Parliament. The intervening judgments which lead up to the setting of rate limits and the various decisions which have to be taken are for the Secretary of State. Naturally, Parliament will hold him to account for what he does, as with any other legislation. But this can be done through the usual channels of accountability without requiring Parliament to take the decisions itself.
For that reason, we have not provided a formal parliamentary procedure for the approval of the designation of authorities under the selective scheme. We have thought very carefully about this one—particularly in view of the strong feelings which were expressed by your Lordships in Committee. However, after reconsidering all the issues, we have remained persuaded that the report setting out the principles for designation and the names of selected authorities should not be subject to a vote in the other place before they come into effect. Instead in Clause 2(1) we have proposed that a report be laid before the House of Commons.
We have also undertaken to send a copy of the report to every authority named in it. In this way the decisions of the Secretary of State and the basis on

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which the decisions have been taken will be set out publicly in a formal document. I have explained before why it is appropriate for the report to be placed only before the other place, which has responsibility for questions of public finance. However, the report will, of course, also be available to read and consider for such of your Lordships as follow these matters.
When it is published it will be for the House of Commons to consider the report and to take up matters in it with Ministers in whatever way they believe to be appropriate in the circumstances. There are many ways in which Ministers are held accountable in the other place, and it is by no means the case that a formal debate required by statute is the best way. For example, Members of that place may write or bring deputations from the authorities concerned to see Ministers to explain their case. They may ask Parliamentary Questions or use an Adjournment Debate. The noble Lord, Lord Graham, with his great experience of another place, is particularly knowledgeable in these matters.
If the feeling in the other place was that there was a need for a more general debate of the principles on which the Secretary of State had acted, then that House has procedures for ensuring that that is achieved. The Environment Select Committee could determine that it would investigate the report and call for Ministers and officials to give evidence. The Opposition can always ensure a debate in the Commons through the use of one of their Supply days, or by asking the Government to make time available. As I said in Committee, if there was a genuine desire for a debate in the Commons and there was a danger that this could not otherwise be arranged, no doubt the Government, operating through the usual channels, would consider sympathetically a request for assistance.
All these ways of holding the Secretary of State to account will be available when the report designating authorities is published. But they will also be available throughout the course of the rate limitation procedures whenever the Secretry of State has been given authority to make judgments and take decisions. Of course, the Secretary of State is also accountable in the courts for any unlawful exercise of his power. At various stages it has been suggested that the Bill should provide that the Secretary of State may only use his powers reasonably. We have made it clear that this is a principle enshrined in British justice and requires no specific reference in statute. It is a further safeguard on the selective scheme.
Finally, I should like to mention those additional provisions which have been written into the face of the Bill which enhance accountability. These provisions cover the special circumstances where detailed parliamentary scrutiny is appropriate. The first I have already mentioned. It is the requirement for rate limits to be approved by the other place in cases where the Secretary of State and the authority could not agree. Two other provisions relate to the fundamentals of the selective scheme rather than to detailed implementation. First, there is the requirement to put any increase in the £10 million exemption in an order before the Commons. Secondly, there is the power to
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provide for areas where the rate or precept is not levied as a uniform rate in the pound. The Secretary of State may only make arrangements for how maxima for rates and precepts are to be calculated in these areas by putting his proposals before the other place in a statutory instrument subject to negative resolution.
These three statutory procedures, and the requirement to lay a report designating authorities before the other place, provide strong checks on the use of the Secretary of State's powers. In addition, there are the many other avenues by which the Secretary of State can be held to account in the other place. When all these are considered together, I believe that we need have no fear about the ability of Parliament to scrutinise, and to ensure that rate limitation is operated fairly.
I believe that this amendment goes too far in burdening Parliament with the details of rate limitation. For this reason I cannot advise my noble friends to accept it.
Lord Graham of Edmonton: My Lords, I shall begin by acknowledging what the Minister has said today and at previous stages—that there is ample opportunity for an aggrieved authority to make its case by bringing deputations to the Minister or, at the derogation stage, by seeking to argue and thus convince the Minister. But in this amendment we are not concerned with seeking to convince the Minister. I am satisfied that if the Minister has taken a stand and has listened very carefully to the leaders and the chief executives of councils who come to London to argue their case, and if he still sticks to his brief (which he is entitled to do), a debate in the House will not change his mind.
The Minister may ask, "What is the point of having a debate which must be subject to the report being approved?" The purpose of the approval is to bring these matters into the drama, into the spotlight, into the centre. It may be that, from the point of view of disseminating to the public what happens here, we hold the parliamentary arena at a higher level than the Minister. Hundreds of thousands of people will be affected by this who will never hear the details of what happens in Marsham Street, who will never hear the details of what happens in Committee Room 19 or Committee Room 20 upstairs, but who will listen to a report of "Today in Parliament" or "The Week in Westminster" and who will hear their Members of Parliament and the Minister arguing about why their rates are higher or lower, or about what has caused them to be penalised or not, as the case may be.
The Minister referred to the burden on the parliamentary timetable. If the Minister seeks to relieve the parliamentary timetable of spending possibly 20 hours of parliamentary time on these suggested 12 or 15 designated authorities, that would be one way of lightening the burden. The Minister asked why we should write into the Bill the obligation that the report be approved. The Minister said that there may be no wish in the other place to take advantage of this, but that if it is written in, it must be done. I can tell the Minister that the representatives of any authority which is designated will not hesitate to use the opportunity if they are able to do so. The Minister will appreciate that, with the fluctuations in

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parliamentary fortunes and with the legislation drawn as it is—and we shall come to other amendments which have even greater significance—we are not talking about a permanent situation; we are talking about a situation in which, in political terms, the shoe can be on the other foot whenever there is a change of political control.
On this side of the House we are disappointed that, after all the arguments, the authorities will be sent a report in a formal way. That is a big deal! When the authorities realise the anguish that will flow from the decisions, they will want their people to understand not merely that they fought the case behind closed doors, but that their representatives fought the case to the best of their ability on the Floor of Parliament. We are very dissatisfied with the Minister's reply. We do not intend to withdraw the amendment. We propose to have it negatived, and have the opportunity of bringing it forward again.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that many people will be pleased that he is resisting this amendment, because Parliament has several functions? It is its function to produce good legislation in as much detail of the right sort as possible. But it also has the job of preserving the parliamentary system itself. I believe that, if the sort of extension suggested by the amendment is brought in, we shall overburden Parliament. Parliament will get to the point where it will not be able to do all the things statutorily put upon its shoulders. This is an example of where it is right that Members of Parliament in both Houses should do the job they were intended to do.
The noble Lord who has just expressed his disappointment about the fact that this amendment is not acceptable said that people in the various areas would like to know that these things had been examined. He rather suggested that it was more important that somebody should have a good report on "Today in Parliament" than that the Members of Parliament, whether behind closed doors or not, should be doing their job. Members of Parliament are the watchdogs who make certain that the points of view of their constituents are taken properly into account, and are not to give a good show on the radio report of what has gone on in Parliament. Because of the fact that it is on their heads to do it, they are more likely to do it effectively and at the same time not waste the time of Parliament by deliberately instigating debates which take up time merely to get a showing on the radio report of what has gone on in Parliament that day.
Those who have had some experience of the way that Parliament works know that, however eminent a Minister may be, if a Minister does something that is fundamentally wrong and ought to be criticised, it is criticised. There is the Adjournment Debate, and Question Time, and, as my noble friend said, in the last resort the courts themselves can be brought in under those sort of circumstances, and they are an adequate safeguard and a proper safeguard. But, if we make every application of every detail a statutory requirement, then the parliamentary system, as it is working today, will not be able to work.
We have to have some confidence in the people who reach the position of being Ministers of the Crown. If
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we work on the basis that every Minister of the Crown of whatever party he may represent is a potential rogue, or somebody who wants to cover up things that ought not to be covered up, then we are criticising the system under which we live. Generally speaking I think that, with the people who are elected to Parliament and who, because of their skill, eventually come into government, the fact that the Bill lays down that they have to make this disclosure is all the safeguard that is necessary, bearing in mind all the other ways open to Parliament to see that the searchlight is put upon the matter.
I support my noble friend in resisting this amendment. The damage it could do to the system as a whole by overburdening it in the jobs that it has to do is far greater than any danger that could accrue from a full disclosure not having been made through being approved eventually by the House every year.
Lord Graham of Edmonton: My Lords, may I merely explain that the amendment is not friendless? It is brought to this House by the Association of County Councils, the Association of District Councils, and the Association of Metropolitan Authorities. To the extent that this House will pay respect to the consultation procedure, those bodies have been consulted on what they would like to see happen. If Members on the other side reject the advice that they have been tendered, that is up to them.
So far as the use of "Today in Parliament" is concerned, I wanted to point out that, whereas we are well advised and informed on these matters and do not need to rely on such a device, there are millions of people who will understand better what happens in this place by virtue of the radio. We have had a good debate, and we shall be asking to withdraw the amendment.
Amendment, by leave, withdrawn.

South African Prime Minister's Visit
3.34 p.m.
The Lord President of the Council (Viscount Whitelaw): My Lords, with the leave of the House, I shall repeat a Statement which is being made in another place by my right honourable friend the Prime Minister about the visit of the South African Prime Minister and the Foreign Minister on Saturday, 2nd June; The Statement is as follows:
"With permission, Mr. Speaker, I shall make a brief Statement about the visit of the South African Prime Minister and Foreign Minister on Saturday, 2nd June.
"We had over five hours of discussions. I was accompanied by my right honourable and learned friend the Foreign Secretary and my honourable friend the Minister of State. The meeting was a working one, and the discussions were comprehensive and candid. They covered the problems of Southern Africa as a whole, including Namibia. There was considerable discussion of the internal situation in South Africa. I made clear to Mr. Botha our desire to see peaceful solutions to all the region's problems.

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"On Namibia, we agreed that early independence for Namibia was desirable and should be achieved as soon as possible under peaceful conditions. We also agreed that all foreign forces should be withdrawn from the countries in Southern Africa so that their peoples can settle their destinies without outside interference. The withdrawal of South African forces from Angola is an important first step in this process.
"On the internal situation in South Africa, I expressed our strongly-held views on apartheid. I told Mr. Botha of my particular concern at the practice of forced removals and raised the question of the continued detention of Mr. Nelson Mandela. Mr. Botha gave me an account of his Government's recent constitutional measures and of the appointment of a Cabinet Committee to make proposals for the political future of the black population outside the homelands.
"I believe that the South African Prime Minister now understands much more clearly where Her Majesty's Government stand on all the major issues. My talks with Mr. Botha are part of the process through which we and other Western and African countries must continue to press for the sort of changes we all want to see in Southern Africa."
My Lords, that concludes the Statement.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Viscount for repeating the Statement. While we had doubts about the wisdom of this particular invitation, we are glad that the Prime Minister was able to raise most of the points which cause us acute concern in this country. May we assume that during the part of the discussion which dealt with the internal affairs of South Africa the Prime Minister stressed our unconditional opposition to apartheid?
We welcome what the Prime Minister has said about Namibia. Can the Leader of the House say whether any timetable has been agreed, and when free elections under United Nations' Resolution 435 will take place? The Prime Minister referred to South African troops but not. I note, to Cuban troops. Can the noble Viscount say whether the withdrawal of Cuban troops is still a sticking point?
We warmly support the Prime Minister's plea on behalf of Nelson Mandela, in regard to his long, and totally indefensible, detention. We noted what the Prime Minister has said about the homelands. Can the noble Viscount say whether the Prime Minister made representations regarding Mr. Botha's policy of uprooting black Africans from their villages, and in particular the case of the villagers who claim that their land was given to them by Kind Edward VII in 1904? As I understand it, this village is in the Eastern Transvaal. Is it not the case that the villagers have already petitioned Her Majesty the Queen and the Prime Minister? Can the noble Viscount say whether that specific case was discussed with other equally objectionable cases? Furthermore, and finally, can the noble Viscount confirm whether the Prime Minister made plain that the African National Congress headquarters will, in fact, remain in this country?
Baroness SeearLords, we on these Benches would also wish to thank the noble Viscount the Leader of the House for repeating the Statement made in another place. As I think the House is aware we, too, were not happy when this invitation was issued. We should like to know whether the Government feel that the publicity which Mr. Botha is already extracting from this visit is being sufficiently countered by international publicity covering the statements made by the Prime Minister, so that the impression is not given that in fact Mr. Botha was received with less criticism than appears to have been the case from the Statement that has been made. Surely this is a matter of international publicity of considerable importance.
We are glad, since this visit did take place, that it was handled in a relatively low-key way, and that there was no impression of feting Mr. Botha when he came to this country. I should like also to agree with the noble Lord, Lord Cledwyn, that we are glad that the Prime Minister raised forcefully the questions of apartheid, of Namibia, of forced removal, and of Mr. Nelson Mandela. One wonders, listening to the Statement, how much of a meeting of minds there was and what response came from Mr. Botha, or whether the Prime Minister's protests about apartheid were met with a completely blank response. One wonders whether any of the other issues that she raised appeared to extract any concessions whatsoever or any adjustment at all of Mr. Botha's point of view, particularly the question of Namibia. That is surely one of the most outstanding political questions of the time.
One is merely told that early independence is desirable and should be achieved as soon as possible under peaceful conditions; but is there any evidence that the speeding up of the solution to the question of Namibia is likely to take place or has been helped in any way by this visit? We would agree that the visit has been successful, if there is any evidence that any change is likely to take place as a result of it.
Viscount Whitelaw: My Lords, I am grateful to the noble Lord, Lord Cledwyn, and the noble Baroness, Lady Seear, for the questions they have raised. First, in answer to the noble Lord, Lord Cledwyn, the Prime Minister felt that it was important that she was able to raise the various points of criticism that this country had of the regime in South Africa; that she was able to explain in person to Mr. Botha our very strong opposition to apartheid. This she most certainly did in the strongest terms.
So far as Namibia is concerned, I have to tell the noble Lord that, as I understand it, there was no clear understanding about a timetable. My right honourable friend the Prime Minister made it very clear that she could not accept that a settlement in Namibia should be formally linked to the presence of Cuban troops in Angola, although she recognised the political necessity of dealing with this particular problem. I do not think there is any evidence that has been given to me that substantial progress was made on that matter.
I am grateful to the noble Lord, Lord Cledwyn, for what he said regarding Nelson Mandela. The Prime Minister pressed Mr. Botha very hard on this point and expressed the very great concern that there was in this country. She also said that his release would be an important gesture of national reconciliation, and I

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think that was something which should have been stressed. The Prime Minister raised the question of those people who claimed that they had their land from Edward VIIth in Kwa Ngema. She pressed that matter very strongly also.
To turn to the ANC, she made it very clear that as long as the ANC were acting within the law of this country and were pursuing their ways within the law, that was something which they were entitled to do in this country.
The noble Baroness, Lady Seear, also raised the question of the expressions of opinion on apartheid, and I am grateful for that. I believe that the way in which the visit was handled and the publicity attached to it—the really strong views this country had—should have got across both to Mr. Botha and indeed to a wide audience. I know there are those who do not take that view. The Government believed it was right that views should be put in a dialogue to Mr. Botha and be put strongly, as they were. The noble Baroness said she was glad it was done in a low-key manner. That was certainly the case. I think it will be seen to have been the case.
On the question of any response, I understand that Mr. Botha explained his constitutional proposals to the Prime Minister. As I understand it, she took note of those matters without accepting that they went as far as she or anyone in this country would necessarily wish; but she heard what he had to say on that particular point. Regarding speeding up the settlement of Namibia, clearly this was an important part of the efforts of all the different countries in Europe which Mr. Botha has visited. The Prime Minister did her best. We shall have to see what effect all that will have had on Mr. Botha in this particular process.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that there are many people in this country who welcome the fact that a discussion has taken place between our right honourable friend the Prime Minister and Mr. Botha, and believe that nothing but good can come from that? Is it not in general a good thing to have discussions at the highest level with the Head of Governments with whose policies one disagrees?
Viscount Whitelaw: My Lords, I am grateful to my noble friend. There is no doubt that the Government believe that a dialogue of this sort with people in the world with whom we disagree is right and is important. Those who seek to suggest that such a dialogue should not take place will find it very difficult when they choose between where a dialogue should take place and where it should not. That is a problem they have that we do not, because we believe such a dialogue is right. I do not think anyone in this country—or indeed in this House—would doubt that the Prime Minister would express her views with the utmost force. I understand she most certainly did, and if that is right I do not doubt (for many of us will have had a similar experience from time to time) that Mr. Botha was left in absolutely no doubt as to what she felt.
Lord Hatch of Lusby: My Lords, will the noble Viscount tell the House whether the Prime Minister made any representations to Mr. Botha regarding the
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release of Nelson Mandela, Walter Sisulu, and other political prisoners? Can he say whether the confidence expressed on his side of the House that everybody agrees that this was a good visit, would be endorsed by the millions of Africans in South Africa? Can he further say in a continuation of a question which I asked before the recess whether any discussion was held about the position of the African National Congress in this country and its right to pursue its championing of the African cause just as any other emigré organisation?
Viscount Whitelaw: My Lords, I am sure the House will understand if I repeat to the noble Lord what I think I have already answered to other noble Lords. As he did not hear it, it is perhaps important that I should do so. On the first point, the Prime Minister expressed considerable concern at Mr. Mandela's continued detention. As I replied to the noble Lord, Lord Cledwyn, she pointed out to Mr. Botha that Mr. Mandela's release would be an important gesture of national reconciliation, and I am sure the noble Lord would endorse that.
As to the question of the ANC, in answer to the noble Lord, Lord Cledwyn, I also made it perfectly clear that all the people in the United Kingdom are entitled to the protection of United Kingdom law. Members of the ANC are free to engage in political activities provided that they do not break the law. That position was made perfectly clear to Mr. Botha.
Lord Oram: My Lords, can the Leader of the House say whether before the invitation was issued to Mr. Botha the Government carried out consultations with our Commonwealth partners? If not, was there not a considerable risk of damaging our relations with those partners?
Viscount Whitelaw: My Lords, I am afraid that I cannot give information of the particular consultations that took place before this invitation was issued. It was given on the authority of the Prime Minister and the British Government, and it was on that basis that it proceeded. I believe that it will be seen in retrospect, despite the many doubts that were expressed beforehand, that a dialogue of this sort did on this occasion have value, and I hope it will be seen to have some effect, although we cannot yet see how much.

Rates Bill
3.49 p.m.
Consideration of amendments on Report resumed.
Lord Sandford Lord Sandford moved Amendment No. 2:
Page 2, lines 36, at end insert—
("( ) The Secretary of State shall, before the commencement of each financial year by an order made by statutory instrument increase the amount specified in subsection (2)(a) above by not less than the increase (or decrease the amount specified in subsection (2)(a) above by not more than the decrease) in the sum of total expenditure (as defined by section 56(8) of the Local Government, Planning and Land Act 1980) used as the basis of expenditure guidance to local authorities between the financial year in which authorities are to be designated and the sum of total expenditure used on the basis of expenditure guidance in the previous year, calculating the resulting figure to the nearest £00,000.").
The noble Lord said: My Lords, this amendment refers to that part of Clause 2 which one can describe as the £10 million threshold. It is very advantageous to the Association of District Councils—whose president I have the honour to be—in that it exempts some 320 of the total of 333 members from the operation of this part of the Act, and for that they are grateful.
When I moved a similar amendment on this point at Committee stage, my noble friend on the Front Bench chided me with behaving like Oliver in that, having been given an exemption of such value, I was coming back for more. But I was not doing that. In moving the previous amendment (at column 245 of the first day of the Committee stage) and now in moving this one I am seeking to ensure that what has been offered does not become less with the passage of time.
My noble friend went on—I was grateful for this—to accept the principle of the amendment that I then moved. He accepted the fact that, having established the threshold and measured it in terms of £ 10 million, that measure should be kept up to date from time to time to keep pace with changes in the value of money. However, he then went on to criticise my previous amendment for using as a measure the retail price index which he thought—I see with some justification—to be unsuitable for measuring the kind of finance with which we are concerned in the Bill. He also said that my amendment, as then drafted, introduced too great a precision for the purposes for which it was required.
In the light of all that I withdrew the amendment at the time. I am now returning with a further amendment which I hope is an improvement on my previous amendment, in that it uses a measure which is appropriate for the kind of finance we are talking about. As your Lordships will see, at the end the amendment makes clear that no excessive precision is sought.
I now hope that my noble friend will see that I am not behaving like Oliver and that he will feel that my amendment is appropriate in all circumstances and he will be able to accept it. My Lords, I beg to move.
Lord Bellwin: My Lords, I recognise that this amendment responds to the criticisms, which I made at the Committee stage, of the proposal routinely to increase the amount which authorities must spend in order to be eligible for selection by reference to the retail price index. We have not disguised the fact that the proposal to exclude small authorities has been based on the desire to avoid the considerable effort required to rate limit a large number of authorities whose spending does not significantly contribute to the problem of overspending. We have provided for the cut-off level to be increased and we have accepted that it would be necessary from time to time to uprate the £10 million figure.
I understand the concern which exists that there was, however, no guarantee that this uprating would take place. I am glad to say, therefore, that I can accept the principle set out in this amendment, because it provides an acceptable basis for uprating as well as reassurance for a very large number of small authorities. However, I am concerned that the drafting
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of the amendment is not without problems. First it assumes that we shall be setting expenditure guidance for local authorities in every year. That is not an assumption I should want to make. Indeed, we have said that we hope to move eventually to a position where it will be possible to do away with targets.
Secondly, as I understand the amendment, the timing is not right. Without going into the details too widely, I am glad to say that I can, and do, accept the principle of the amendment, but not the detailed drafting. If my noble friend would be prepared to withdraw his amendment, I would undertake to come back at Third Reading with an improved version for the House to consider. I hope that this will be acceptable.
Baroness Birk: My Lords, I had intended to speak immediately after the noble Lord, Lord Sandford, and support his amendment, and that would have been at slightly more length than I shall now speak. But wisely I waited to hear what the Minister had to say and since he is taking it back, he has the support of my noble friends and myself.
Lord Sandford: My Lords, I am most grateful to my noble friend and in view of his acceptance of the principle and his undertaking to produce yet a further amendment, though to be drafted by the Government, I am delighted to be able to withdraw my own amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 3:
Page 2, line 43, leave out from ("and") to ("those") in line 1 on page 3.
The noble Lord said: My Lords, with the permission of the House, I should like to speak also to Amendments Nos. 5 and 6.
Amendment No. 5: Page 3, line 2, leave out from ("authorities") to end of line.
Amendment No. 6: Page 3, line 3, leave out subsection (5).
Clause 2 provides the mechanism and the language used in designating authorities. These amendments seek to ensure that the principles used to designate authorities are the same for all authorities.
At the Committee stage on 26th April the Minister said, at col. 248:
"In other words, to meet technical differences between the different classes we might need to use different principles. Different principles would ensure the same, equal treatment. I believe that this is the only circumstance in which we could use different principles without facing challenge in the courts."
From previous debates we know that when we are talking about principles that can literally mean anything. We have had arguments about whether we are talking about criteria or bases, and really it depends upon who interprets the principles as to precisely what the effect of them will be.
So far the Government have used 11 different combinations of criteria to determine the principles that will be used. We must bear in mind the small number of authorities in some of these classes. I remind the House that in Clause 2(5) the classes referred to are:
"councils of metropolitan counties;…councils of non-metropolitan counties;…councils of metropolitan districts;…

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councils of non-metropolitan districts;…councils of inner London boroughs; and …councils of outer London boroughs."
There are only six metropolitan counties and only 12 inner London boroughs, excluding the City of London. The City of London, the GLC, and the ILEA are each in a class of one, and so special principles could apply to each individually.
We are strongly suspicious of the ability, not necessarily the intention, of a Minister, if he so wished, to use this terminology in order to be vindictive or punitive, or to treat unfairly authorities which, in our view, will already be in enough trouble with the problems they will have if they are to be subject to the procedures.
The object of the amendment is to ensure that all authorities are treated carefully. One only has to look at the principles for different classes which are needed to cope with the different mix of functions and the difference involving pay and price changes, in terms of economic conditions, to see the limitations which can apply. But there is a way out, because at col. 248 the Minister went on to say:
"There are precedents for providing for principles to apply separately to separate classes of authority. The multipliers set for block grant are a good example."
That is the example that the Minister chose to use. But the Local Government Finance Act 1982 provides that in issuing expenditure guidance targets the Secretary of State shall act in accordance with the principles applicable to all authorities. I want to put to the Minister and to the Government the point that the designation of authorities for rate limitation is of equal gravity to, or greater gravity than, the mechanisms which are used for determining the block grant. The precedent to be followed is that in the 1982 Act of principles applicable to all authorities, and not the criteria which the Minister is using. That is the purpose of the amendments. I beg to move.
4 p.m.
Lord Bellwin: My Lords, your Lordships will remember that these amendments were considered at the end of the first day in Committee, when the noble Lord, Lord Graham, withdrew them and promised to come back at a later stage—which he now does. Both he and the noble and learned Lord, Lord McCluskey, spoke forcibly on the amendments. However, if my reading of Hansard is right, it was the nature of the principles by which local authorities would be designated which most concerned them. Although it is at the heart of the amendment, the question of whether these principles should be common to all authorities or capable of application differently to different classes of authority was, I think, secondary. I will return to that later because I ought to say a little more about the principles themselves.
I should say first of all that the various phrases we have used—"the criteria for selection", "the principles", "the basis of designation"—all amount readily to the same thing. I know that Lord Graham was concerned that these different phrases could confuse our interpretation of the meaning behind them, and so I shall stick with the word "principles". One charge which was levelled was that the "principles" used to designate authorities for rate limitation could be concocted arbitrarily to suit the
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Secretary of State. The noble and learned Lord, Lord McClusky, in particular, suggested this. He did not say that it would be done but that it could be done; and has returned to the point in correspondence with me. In fact, the principles of designation cannot be plucked from the air; they must give flesh to the provision in Clause 2(2)(b) that the spending of designated authorities must,
"be excessive having regard to general economic conditions".
It is clear to me that the principles must be an expression in concrete terms of what excessive expenditure means.
My right honourable friend produced in another place a table exemplifying various principles which could have been applied to local authority expenditure in 1983–84. Each of these sets of principles included a comparison with an authority's grant-related expenditure assessment. We have said from the outset that GRE would be an important indicator. In the exemplification, the GRE principle was grouped with others—for example, percentage over target, percentage increase in current expenditure, percentage rate increase and so on. Until now we have not been able to be more specific about which principles we would use. Indeed, we have said that the principles might well vary from year to year depending on the economic circumstances against which excessive expenditure would be judged. But, as my right honourable friend has made clear in another place, we can say now that we expect comparisions and expenditure against GRE and against target to play a very important part in our selection decisions.
My Lords, I am anxious to help the House in this by explaining precisely what we mean by "principles". I hope I have dispelled the notion that the principles could be arbitrary—picking out authorities by political colour, the part of country, or whatever. But, in turning to the amendment which is before us, I should like to refer to the need for fairness in applying these principles. I thought that the noble Lord, Lord Graham, summed up this point well when he spoke in Committee of the need for "equal treatment before the law". It is certainly our intention that the expenditure of every authority should be judged fairly. Indeed, it is precisely because in some circumstances an across-the-board comparison of spending might be unfair to a particular class of authority, that we are taking the power which this amendment seeks to remove.
I do not believe that we shall need to make different comparisons between different classes of authority this year. However, it remains the case that different classes of authority perform a different mix of functions. Their costs may, in some circumstances, be affected to different extents by differences in the planned level of provision for different services. Equally, they could be affected differently by changes in pay and prices because of different ratios of manpower to running costs and different pay settlements.
There was, I think, some misunderstanding in Committee about these different pay and price indices. They are not principles by which we would designate authorities; they are facts which might justify rather higher expenditure by one type of authority than by another. As a result, it could conceivably be neccessary

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to vary the principles between classes in order to arrive at similar treatment overall of the different classes. In other words to meet technical differences between the different classes, we might need to use different principles. Different principles would then ensure equal treatment.
I also mentioned before 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. A change in the discount of rateable value allowed for the block grant of London authorities would affect rate poundages, so that comparisons of rate increases over a period of years could be distorted. It would be our intention to operate, so far as possible, on generally applicable criteria. But I still cannot agree that the Secretary of State should be restricted in that way.
My Lords, I have gone to some trouble to try to clarify this point. It sounds very complex when saying it, and I shall understand if there are noble Lords who perhaps feel that it is not all that clear. What we are seeking to do here is to make quite clear that the Bill allows for what we are seeking to achieve. I take the point that the noble Lord made—that "your intentions may be honourable, but perhaps some other Minister or set of Ministers might be able so to use it as to disadvantage a particular authority or authorities". That, I understand, is the main concern in this amendment. I really do not believe that that is so, for the reasons I have given and which I shall not repeat. It is important that the principles be understood. The intention for using them in the way suggested, I think, will lead us to the conclusions that are necessary for this to be an equitable basis which all will be able to understand at the end of the day.
Lord McCluskey: My Lords, I must confess that the noble Lord the Minister has not allayed my anxieties in this regard. I do not have a copy of the correspondence that we have exchanged, but, as I recall it, from the examples that he was able to give me from the courts I was able to instance the normal situation in which a mother says to her child, "James, don't do that!"; James replies, "Why not?"; and mother replies, "Because I say so". Then the "because I say so" in terms of the authority in the courts is a self-justifying proposition which qualifies the name of principle. That is what the Secretary of State means in this Bill by the word "principle"—"you will do it because I say so".
The noble Lord advances the highly illogical proposition which is that sometimes the same principles can produce different results so we will apply different principles and thus produce the same results. That is not a logical proposition and it is one of which the Minister ought to be ashamed. Furthermore, the words "having regard to" have been interpreted in the courts both in England and in Scotland as meaning simply this: that a Minister who has to have regard to something must have regard to it. My Lords, I shall shortly be travelling to Heathrow. I shall have regard to the bus timetables; but I shall travel by Tube.
Lord Graham of Edmonton: My Lords, this has been a useful exercise. The Minister persists in saying that we need to be quite clear as to what we mean by "principle" and what the principles are. What we are saying is that there is no better way of being quite clear than by writing them into the face of the Bill. The Minister persists in allowing himself, the Secretary of State, alone, to determine the principles. Clause 2(4) says:
"The power to designate an authority shall be exercised in accordance with principles determined by the Secretary of State …".
What we are saying is that, in a matter which is of such momentous import to the authorities concerned, we ought to expect there to be more on the face of the Bill than that. The Minister has pointed out that he certainly does not intend to be punitive or to be unfair.
The Minister will of course be aware that, with regard to the authorities which have received the greatest stricture, it is from his side of the House that there have come such adjectives as "Marxist", clearly indicating what noble Lords on the other side of the Chamber have in mind when they want to be quite pointed in a general criticism of, and attack on, authorities which they believe are ones that are going to be dealt with. It is quite unfair on authorities that the impact of the legislation, which will be so detrimental and devastating, will be in accordance with what the Minister determines to be excessive and in accordance with the general economic conditions and his interpretation of them.
I believe that we have gone as far as we can. Authorities and councillors outside will have to be content to await the event so as to see whether the way in which the Bill will work turns out to be as the Minister says or as they fear. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (Lord Aberdare): My Lords, Amendment No. 4. I have to point out that if this amendment is agreed to, I cannot call Amendment No. 5.
Lord Bellwin Lord Bellwin moved Amendment No. 4:
Page 3, line 2, leave out ("for all authorities falling within that class") and insert ("either for all authorities falling within that class or for all of them which respectively have and have not been designated under this section in the previous financial year.").
The noble Lord said: My Lords, in moving this amendment I should like to link it with Amendment No. 13.
Amendment No. 13: Clause 3, page 3, line 27, leave out ("for all authorities falling within that class") and insert ("either for all authorities falling within that class or for all of them which respectively have and have not been designated under section 2 above in the previous financial year.").
This amendment raises an identical point in relation to expenditure levels.
The purpose of Amendment No. 4 is to allow separate criteria to be applied to the selection of authorities for rate limitation if those authorities have been selected for limitation in the previous year. The necessity for this amendment arises from the way in which we have said we wish to make selections for rate limitation.
We have always said that the purpose of the scheme will be to identify those high spending authorities which are not responding to the calls which have been made for restraint in spending. We have therefore proposed to look at authorities' expenditure in relation to their grant related expenditure assessment as the best available basis for assessing expenditure which is excessive compared to other similar authorities.
We shall also be looking for some measure of how authorities are responding to the need for economies. In the first year at least, as I have indicated, we expect to have regard to performance against expenditure targets. We are not yet in a position to say precisely how we shall set out the criteria, but in the other place my right honourable friend gave some illustrative samples of selection criteria. One of those would have selected authorities spending more than 20 per cent. over GRE and more than 2 per cent. over their target.
For the purposes of explaining this amendment I should like to refer to this example. The problem which the amendment addresses is that in the second year of the selective limitation scheme authorities which were limited in the first year would have had their expenditure effectively limited by their rate or precept limit. In general, I would expect those authorities to be constrained to spend very close to their expenditure targets. So, if it was desired to use the same selection criteria in year two as in the first year, many of the authorities previously selected might escape selection because it appeared they had met the criteria of having shown restraint in their spending. A moment's thought shows how contrary to common sense that would be.
Those authorities may well remain high spenders compared with other authorities, on the GRE test, and be capable of making substantial further economies. The expenditure target, after all, is directed only at the expenditure of a single year; and since the performance in relation to target results directly from the rate limit, it reflects no credit on the authority and says nothing about their attitude to spending in the future. There would be no sensible grounds for not selecting authorities in those circumstances.
I anticipate, of course, the criticism that, as a result of the amendment, it might be possible to continue selecting authorities even if there was no longer any reason to do so when their situation is compared with that of other local authorities. I have to say that is not our approach. We shall want to release authorities from rate limitation as soon as it is appropriate to do so. One way in which we might reach such a view would be if the authority concerned had established a spending level which no longer put it among the high spenders.
Otherwise, we should look for evidence that there had been a fundamental change in the authorities' spending behaviour. That might mean establishing criteria for selection which required previously selected authorities to have reduced their rates to levels more typical of other authorities in their class, or to have made specified reductions in manpower which would be evidence of fairly long-term expenditure reductions.
The effect of authorities' rate limits would be to compel them to spend at, or about, the expenditure
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level set for them. We do not want to give authorities credit for that, but if authorities are able to go further and realise savings more quickly, that could be valid evidence of a change of attitude by them. In the example I used earlier, if authorities generally were to be selected for exceeding their target by 2 per cent. or more and expenditure levels would generally take selected authorities below that 2 per cent. figure, it might be appropriate to set the alternative criteria for those authorities that they should not have exceeded their targets at all.
I cannot be firm about this. We do not know how events will develop in the first year. One problem we must bear in mind is that it is often possible for authorities, by simple accounting devices, to make short-term improvements in their apparent expenditure performance. We should want to be sure that any alternative criteria did not give scope for manipulations of that kind. It may be that the evidence of more than one year might he required. But I can be firm about our intentions not to keep authorities in rate limitation longer than it is necessary so to do.
I now turn to Amendment No. 13, which is similar in origin to the previous one. It recognises that if an authority has already been selected for rate limitation, then for the purposes of further rate limitation action it is effectively in a different class from an authority which has not.
In this case we are concerned that authorities which are selected for rate limitation in more than one year will enter the later year with a history of already having made some economies. It may be that those authorities will find it more difficult to achieve further savings than will authorities selected for rate limitation for the first time. The search for economies may become harder—perhaps not immediately but later. We could of course rely on the redetermination procedures to respond to difficulties faced by authorities which have already had to make significant savings. But if this could be a more general problem, as we believe it could, it is sensible to make some provision for the matter to be dealt with so far as possible in the principles for the initial determination.
We have considered very carefully whether it would be possible to avoid making these amendments; we have concluded that we should not. The amendments provide for a genuine area of difficulty and it is proper that some provision should be made. On that basis I commend them to the House. I beg to move.
4.18 p.m.
Baroness Birk: My Lords, this is quite a complicated and very worrying amendment. The first point I must make is that it is very late in the day for the Government to have put down amendments of this nature to a Bill which has only 19 clauses. We saw it for the first time only yesterday and its Report stage is today. It is really very difficult to deal with it at such short notice.
The Government seem more and more to be approaching the Bill in the manner of somebody who, with one lock on a door, then puts a bolt on the door, then puts on another lock and another bolt, and then a screw lock in order to get double security. It really is

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an extension of the braces and belt principle. The substance of the amendment is extremely disturbing because, as the Bill is drafted at the moment, the Government can designate authorities only in accordance with principles. I do not think I can improve on what my noble and learned friend Lord McCluskey has said about the principles as incorporated in the Bill. But these principles, such as they are, must be the same for all authorities falling within the six classes specified in Clause 2(5). Therefore separate principles may apply to the GLC, the ILEA, the City of London, and the Isles of Scilly. Thus it is possible, as the Bill is presently drafted, without this amendment, for there to be 10 different sets of principles used in determining whether or not authorities should be designated. The principles themselves, as we are all by now well aware, are not defined on the face of the Bill, and experience with the rate support grant has shown that "principles" can be a term used to encompass almost anything.
As the Bill is presently drafted the Secretary of State has a very wide discretion in selecting authorities for rate limitation. But the Government appear now not to be satisfied with the wide discretion which the Bill presently gives, and are therefore asking Parliament to approve a doubling in the number of different sets of principles to be used in designating authorities by class. This amendment says that principles should be set by class, or within each class, by whether or not the authority has been designated in the previous year. Six sets of principles by class will therefore become twelve sets of principles by class and by whether or not the authority was previously designated. Adding to those 12 sets of principles the principles to be used for the GLC and so on, the result becomes 16 different sets of principles to be used for designation.
My Lords, the mind boggles. It is really almost impossible to see how this could be worked out, apart from the main—I was going to say "principle" but I feel that that is a word that we cannot use any more, like the word "gay" in the old sense.
The Government's main argument in favour of this amendment, as I understand it, is that it would not be fair for an authority to be excluded from designation by virtue only of the previous year's designation having brought about its expenditure reductions. Therefore, different principles will be needed for those authorities which have been designated in the previous year.
The Government's argument, I submit, is flawed in several respects. First, the criterion of whether or not an authority has been designed is not the one to adopt for this purpose. Designation is only the first step in the process. It might well be that an authority had convinced a Secretary of State of the merits of its case under the redetermination procedure, or it could be that expenditure reductions had been made voluntarily. Designation per se should not give the Secretary of State any right to treat the authority differently from other authorities in a future year.
Rate limitation, the only stage at which parliamentary approval is necessary for the Government to act, should be the criterion; and it is not. There would be a stronger case for saying that if
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the authority has reduced its expenditure by virtue of a rate limitation order then perhaps it should be subject to different principles to determine designation in the next year. Secondly, it does not seem to be a very strong argument to say that somehow a forced expenditure reduction does not count for the purposes of determination of good or bad behaviour. It still counts so far as reduced service levels are concerned.
Thirdly, one year's expenditure reductions are not likely to have changed an authority's expenditure so much that it is no longer, in the eyes of the Secretary of State—and I quote—
"excessive, having regard to general economic conditions.".
If one year's expenditure cuts can change an authority from being "excessive" to complying, then either very large expenditure reductions would have been imposed that would create massive damage upon local services or the Secretary of State would be using selective rate limitation against authorities which are only marginally overspending.
I think probably the most worrying aspect of this amendment is that it opens up the possibility of authorities being on a permanent hit-list. Designation in the first year could lead to them always being designated, no matter what their spending record, because the principles can now be set each year to ensure that that happens. I would add that it also adds to the confrontational aspect of this whole Bill.
If I may turn very briefly to Amendment No. 13, which is linked with this and, as the Minister said, is similar, in that it envisages special treatment for authorities which have been designated in the previous year, I should like to ask the Minister what factors the Government will take into account in fixing an expenditure limit. On 30th April last, at col. 338, he said this:
"Each [authority] will be asked to make similar savings—although allowances 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.".
On the same day, this time at col. 350, he said:
"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."
There seems nothing here to justify different reductions to previously designated authorities. The Minister dealt with an earlier amendment which was moved by the noble Lord, Lord Sandford, and he has taken that back and reconsidered it. I suggest, going by the timing when this was put down, that he should now think of taking back his own amendment and having another look at it. I am quite serious about this, because I really think the effects of this could be much wider and much more dangerous than perhaps the Minister himself realises.
Lord Kilmarnock: My Lords, I shall not go over the ground that the noble Baroness has so ably covered but we are really not at all happy with the Government's Amendments Nos. 4 and 13. This one, so far as I can see, would allow any authority which has been designated for ratecapping in one year to be ratecapped in the next year even though it had behaved as the Government would wish. The amendment would make it possible simply to

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redesignate all ratecapped authorities year after year without any effort.
When we turn to the question of principles, it seems to me we are entering the realm of total chaos. The numbers so far bandied about this afternoon have been 10, 11, 12—I think somebody mentioned 16. I submit that this kind of amendment shows that the Government still have not found a workable scheme of rate limitation and are simply weaving the mesh of an all-purpose net based on a multiplicity of principles which, by definition, are not principles at all but simply expedients.
I find it quite genuinely difficult to accept the noble Lord's explanations on the matter of principles. I heard fall from his lips the extraordinary statement that.
"different principles will ensure equal treatment."
That may be acceptable in politics but I cannot conceive that any philosopher would accept it. Would J. S. Mill have accepted it? Would Kant have accepted it? It is a most extraordinary statement to fall from the lips of a Government Minister on the Front Bench. Unless some better explanation is forthcoming, we on these Benches cannot accept this amendment.
Lord Bellwin: My Lords, I would advise the noble Lord to study carefully the whole of what I said when talking about principles, because whether he considers it an extraordinary statement or not, in the context of what I said it makes very good sense and perhaps he will have a better appreciation of that when he reads the whole of what I have said. I am the first to acknowledge that it is not easy to take on board: it is not easy, and I would say that to the noble Lord.
The noble Baroness makes fair comments in what she has said. I have to fall back, as I did before, on the fact that there are still matters as regards the selection criteria and so on—call them principles if you like—that as yet are not resolved, for the reasons which have been given. We said all along that that would be so. The example which I used for illustration was only an example. When I talked of 20 per cent., 2 per cent., targets, and so on, that was only an example to illustrate a particular point. But I understand the concern.
I cannot, nor do I want to, take back this amendment but what I will do is to study carefully all that the noble Baroness has said. It is, as she very fairly put it, something which has come to her and to the House at very short notice. I think it proper that perhaps another opportunity to look closely at it should be given. I am quite happy about that. Clearly I cannot say today that I will take back the amendment, but I do acknowledge what she has said and I confirm my willingness to look to make sure that we are completely satisfied. I cannot hold this up now and I want to see that the amendment goes forward, but I will give an assurance that if, as a result of what transpires, based on what the noble Baroness has said, we should be less than completely happy about this, then at the last stage I would want to look at it again. But for the time being I must ask your Lordships to accept the amendment as it is.
Baroness Birk: My Lords, by leave, I should like to welcome the Minister's statement that if he considers
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that an amendment is necessary he will bring one back at Third Reading. Before Third Reading, perhaps we shall be able to discuss the matter, so that if the Minister feels unable to do so I can put down an amendment.
On Question, amendment agreed to.
[Amendments Nos. 5, 6 and 7 not moved.]
Clause 3 [Expenditure levels]:
4.31 p.m.
Baroness Faithfull Baroness Faithfull moved Amendment No. 7:
Page 3, line 21, after ("expenditure") insert ("except any expenditure incurred by a designated authority on charities registered in accordance with the Charities Act 1960").
The noble Baroness said: My Lords, this amendment means that voluntary organisations registered with the Charity Commission would be outside local authority rate capping. In moving the amendment, I am only too well aware that it may appear to cut across the principles which underlie the Bill: the first is the wish of Her Majesty's Government to curtail local authority expenditure, thus bringing down the rates which are a heavy burden upon so many. Secondly, the Minister repeatedly said at Second Reading that local authorities should be responsible for the allocation of their resources. Thirdly, if there were more efficient and, in some cases, less extravagant management, the Government believe that more money would be available for essential services. I believe that the amendment complies in part with these principles.
First, perhaps I may deal with expenditure. At the Committee stage the noble Lord, Lord Seebohm, said that the work of the voluntary sector was cost-effective. Let me take some examples. In Birmingham, there are 250 volunteers, seven full-time staff and seven part-time staff running an outstanding citizens advice bureaux service. Between 1982 and 1983 the number of inquiries increased by 60 per cent. Any local authority which either withdrew its grant or tried to do that work would find itself in financial difficulties.
Let me take a different example. Leicester City Council is likely to be rate capped. In a report on the immediate effects of reducing the council's expenditure to the Government's grant related expenditure assessment, consideration is being given,
"To [abolishing] certain miscellaneous grants aimed at providing services to the community, law centres, citizens advice bureaux, community service volunteers, and reduction of grants provided for hostels [in the city] by 50 per cent.".
Let me take another authority which is also likely to be rate capped—Newcastle-upon-Tyne. The social services committee has a good track record of working with and funding local charities—some 60 in all. Substantial cuts have already been made. For example, there has been a 10 per cent. cut in the grant to the local council for the disabled, a 9.6 per cent. cut in the grant to the local NSPCC and a 9.4 per cent. cut in the grant to the local family service unit. Further cuts to these and other organisations will threaten their very existence.
Let me turn to the Greater London area. There are, for instance, 99 citizens advice bureaux, staffed by 300

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staff and 675 volunteers. The total number of inquiries was 1,083—a 4 per cent. increase on the previous year. The majority of funding for local bureaux comes from local authorities. There is a very real anomaly here. Following an inquiry, it was recommended that a grant of £1 million should be made by the Government to the headquarters of the Citizens Advice Bureaux. If, therefore, local authorities were to cut their grants to local CAB offices while the Government were giving a grant to the central office, there would be a disparity of approach.
I turn to choice. I suggest that not only should local authorities have a choice as to what they should do. The community—that is, the clients—should also have a choice. To take one example, the London Borough of Merton withdrew its grant to the family service unit. Some vulnerable clients seek help from local authorities while others seek help from voluntary organisations. Of the families being supported and helped by the family service unit in Merton, 12 have not sought the help of the local social services department. These are vulnerable families. Should the families break up and the children come into care, the expenditure burden on the local authority would be heavy.
Various families are dealt with by a movement called the ATD. It supports very vulnerable families who would not go to a statutory body. It is a matter of style and ethics. Who are we to say that they should not have a choice when seeking help? In some areas where there is likely to be rate capping, consideration has been given to cutting the grant to the NSPCC.
What does the amendment mean? It means that voluntary organisations can be considered for grant over and above rate capping, but a grant would be made only to those charities which are registered with the Charity Commission. As your Lordships know, the Charity Commission do not register any charity which uses its funds for political ends. I have a list of grants made by the Greater London Council to voluntary organisations. Of the 140 organisations, only two are registered with the Charity Commission. It has been said that the amendment would cut out some good and valuable voluntary organisations. The answer is that such organisations should seek to be registered with the Charity Commission.
I am grateful to my noble friend the Minister, who generously gave much of his time to me last week. He listened to the arguments with sympathy and very real understanding. When he replies I believe that he may well be prepared to take back this amendment for reconsideration. If he does so, I shall not press the amendment—at any rate, not at this stage. When my noble friend the Minister replies I am sure he will show that he is appreciative of the spendid tradition in this country of the partnership between the statutory and the voluntary sector. I beg to move.
Lord Ennals: My Lords, first I most warmly congratulate the noble Baroness, Lady Faithfull, for the way in which she moved the amendment. It is an admirable refinement of an amendment which I moved in Committee. The amendment which I moved deserved to be defeated because it was drawn
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too wide. On 30th April, in winding up roughly an hour's debate on the subject, I said:
"I can give an assurance…that at Report stage…it will be possible to bring back an amendment which will make it absolutely clear what it is that we are talking about".—[Official Report, 30/4/84; col. 367.]
This is such an amendment. I said that because there were some doubts cast. I myself mentioned (in col. 355) organisations such as the Spastics Society and MENCAP, and I might also have cited the Royal Society for the Prevention of Cruelty to Children, Dr. Barnardo's, the National Children's Home, or the Children's Society. All are service providers doing jobs on behalf of not only their own members, but also often local authorities in the communities they serve.
The noble Baroness, Lady Gardner, with her usual perception, politely said about the amendment I moved at Committee stage:
"I find it is very dangerous because it has been presented in such a charming and eloquent way"—
and I want to thank her very much for those kind words. But she went on to say—
"yet it completely conceals the hidden pitfalls which really alarm me".—[Official Report, 30/4/84; col. 361.]
She went on to speak about the GLC and grants to anti-police bodies, extremist political groups, "gays" and lesbians. I can assure the noble Baroness and the whole House that I am not a lesbian and I am not "gay". I give no particular support to any of the organisations she listed. But it was perfectly clear—and the noble Lord, Lord Kilmarnock, repeated this point—that my amendment was drawn too wide. This is the great advantage of having a Committee stage and a Report stage. The present amendment is drawn as narrowly as it can be. It specifies registered charities, and as the noble Baroness, Lady Faithfull, said, it would exclude all those organisations which worried the noble Baroness, Lady Gardner. I hope, therefore, that we shall be able to satisfy her.
The case for this amendment is an overwhelming one. I hope that the noble Baroness, Lady Faithfull, is right, and that the Minister will look most sympathetically upon it. He must know that deep anxiety is felt not only among the voluntary organisations themselves—not those concerned with "gays" and lesbians, but the others to which I have referred—but also in the community and in the local authorities which help the voluntary organisations do their work.
I have received a stack of letters and I am sure that the Minister must have done so, too. I received the latest of them only this morning. It came from the London Churches Group. I have not before referred particularly to churches. The London Churches Group represents the Baptist Church, The Church Army, the Church of England, the Jewish community, the Methodist Church, the Roman Catholic Church, the Salvation Army, the Society of Friends, et cetera. They say how deeply worried they are by the effect that this legislation might have on the work they do. In particular they say:
"Borough councils on their own will be unable, even if they are willing, to shoulder important community responsibilities at the moment carried"—

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that is, in this case—
"by the GLC. Our experience has shown that the boroughs have a poor record of dealing with groups such as ethnic minorities and with those in particular and desperate need, such as the homeless".
This is a simple amendment. I believe it will appeal to noble Lords and noble Baronesses in all parts of the House. It would be appalling if this Parliament were to take action which significantly weakened the magnificent work done by charitable, service-providing organisations at a community level to meet the needs of the most deprived in the community. I warmly support the amendment.
Baroness Gardner of Parkes: My Lords, I should like to support this amendment for two reasons. The first is that the first amendment, as has been mentioned, was so widely drawn. It used the phrase, "non profit-making organisations". That has now been refined down to specific bodies registered with the Charities Commission, and that is a very good qualification.
It should be made clear also that this amendment would in no way inhibit the freedom of local authorities to make their own decisions as to those organisations to which they will give their money. I would caution the charities against thinking that this provision would immediately provide them with a large volume of additional funds, because there is no way of knowing whether that will be so. But the amendment will remove the discouragement that would otherwise exist in the Rates Bill and which would almost he enough to prevent any authority from giving to a charity because of the fear that it would lose the right to its own expenditure. It is a good amendment in that sense.
In response to the noble Lord, Lord Ennals, I would say that though he quoted me, I do not believe that I did refer to "gays" and lesbians as he has done, several times. I thought that in my comments I did not detail the type of organisation; and today the noble Baroness, Lady Faithfull, has explained how two bodies would have been registered charities.
Lord Ennals: My Lords, if the noble Baroness refers to column 362 of the Official Report for 30th April, she will find that I was quoting directly from her words.
Baroness Gardner of Parkes: In that case, my Lords, I apologise to the noble Lord. I must re-read the comments in question, but I thought that I had been less specific than that. In any event, I support this amendment as I believe it would give local authorities the option to support the charities and, through the use of charitable associations of the type which my noble friend has mentioned, to multiply the benefit of the money that is made available, in having work done by a great number of volunteers. This is in itself a very cost-effective way of operating, especially in the social services.
Lord Maude of Stratford-upon-Avon: My Lords, I, too, should like to support the principle of the amendment moved by my noble friend Lady Faithfull—and in my case, for one particular reason. The list of proposed and actual cuts made by local
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authorities to charitable grants had a very familiar ring. We have seen this whenever cuts have been mentioned for many years now. We have seen it on the part of departmental officials. We have seen it on the part of doctors and administrators in the health service. Above all, we have seen it from officials of local government bodies. Whenever there is any talk of cuts and any kind of squeeze is put on them, they invariably respond by recommending cuts in the most popular, sensitive and vulnerable services. As my noble friend has said, in this case they have invariably started with certain grants to charities which are performing useful work which local authorities would otherwise have to do themselves.
Because it has been so narrowly and skilfully drawn, this amendment, or something like it, could make it possible to prevent that kind of response. Otherwise, whenever any pressure is put on local authorities they will invariably, for propaganda and political purposes, go for the most sensitive and popular services, which in many cases involve charitable grants. This is perhaps the best of all reasons for protecting such grants by an amendment of this kind.
Baroness Elliot of Harwood: My Lords, having spent a large part of my life working with voluntary organisations, I should like to support this amendment very strongly. The amount of money saved by ratepayers through the work done by voluntary organisations must run into millions of pounds. It would be crazy for anyone to think that economies can be made by cutting down on the grants made to voluntary organisations, because the local authorities would then have to provide goodness knows how many more services to make up for the loss of those previously provided by voluntary organisations for nothing, or for very little money.
It would be most short-sighted and very unfortunate if we lost the good feeling we have in this country—more than in any other country in the world. The voluntary organisations play an enormous part in the community, in bringing people together, in making new friendships, and in creating new interests. It would be a thousand pities if that were to be interfered with, and I hope that the Minister will agree that this is one of the aspects we must stick to. It is most important that we do nothing to break down the co-operation between local authorities and voluntary organisations.
Lord Seebohm: My Lords, I shall not repeat the arguments that I put forward at Committee stage. The noble Baroness, Lady Faithfull, has enlarged on the most important of them and I only want to point out that this amendment would in no way restrain local authorities from looking at charities with an eagle eye and supporting those which are genuinely giving a service to the community and ensuring that they are still aided. I strongly recommend this amendment.
4.50 p.m.
Lord Marsh: My Lords, the degree of unanimity on this amendment is so unusual and so total that it is with great trepidation that I even ask the Minister questions. I clearly misunderstood the amendment in terms in the same way that the amendment of the

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noble Lord, Lord Ennals, was clearly misunderstood when we discussed this matter in Committee. I am puzzled. In the arguments which I hear the sincerity is beyond question. No one in this House or in most other places would question the good work done by most of these charities most of the time, some quite outstandingly so. But, while I can understand, and share in, the sincerity of approach to this matter and the concern, for the life of me I cannot understand the logic. This is where I should be grateful if the noble Lord the Minister would enlighten me so that I can join the unanimity and avoid even the faintest suspicion of a jarring note.
It seems to me that, if the purpose of the legislation is to control local authority expenditure, you cannot logically say that certain types of expenditure are sacrosanct. It is not impossible for charities to be profligate any more than it is impossible for anybody else to be profligate. As I thought I understood the legislation—and I stress again that I clearly do not understand it properly—the local authority is still entitled to make grants to charities if it so wishes. It can do so by cutting back in other areas of waste, which is the whole basic purpose of the legislation.
I can totally understand the argument against the legislation. It is very controversial legislation. The opposing arguments to that legislation are perfectly understandable and easily followed. But I cannot understand how one can accept the legislation and then argue this particular amendment. At the end of the day it is for local authorities to run their affairs within the legislation in such a way as to enable them to do that which is necessary by avoiding expenditure which is unnecessary. To suggest that there are certain areas which should be exempt, however good the purpose—because one comes back to the point which I made in Committee—and argue that everything which is desirable is affordable is economic nonsense. That is true of every housewife. She is perfectly aware that she cannot afford to do everything that is worth doing.
What I should like the noble Lord to do is to remove this sense of not belonging which I now suffer from in this gathering—well, I think that I have ceased belonging to part of this House for quite some time past—and to clear my mind of some of these misunderstandings so that I can be taken along the paths of righteousness and shown the truth. As I say, at the moment I understand the sincerity totally, but the logic bewilders me equally totally.
Lord Kilmarnock: My Lords, my name appears on the amendment and I want to say just one or two words. It is very good to know that the noble Baroness, Lady Gardner of Parkes, now gives the amendment her blessing. It is rather sad that the noble Lord, Lord Marsh, has not felt that he can join the rest of us. I do not know whether what I am going to say will help him to belong, but that is what I should like to do.
As I see it, the problem is as follows. The problem of registered charities providing valuable back-up to the social services will stem partly from this Bill and partly from the abolition of the GLC and the MCCs, because the two interact. After 1974, the then Government encouraged the voluntary services to
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organise on a county basis. The present Government have encouraged the expansion of the voluntary sector, too. But, given the cuts in public expenditure and the rate capping proposed in this Bill, it is most unlikely that district councils will be able to take over the funding of voluntary sector bodies. The effect of the Bill as it stands will be to restrict the capacity of metropolitan district councils, for example, to take up the demands which will be made on them when and if the MCCs are abolished. There are really only two answers to this in my submission. One is to make more central Government money available to charities, and the other is the one proposed in this amendment, which is to exempt local authority contributions to registered charities from rate capping.
It is interesting to note that at a recent voluntary sector organisation conference held in the Grand Committee Room of the House of Commons on 14th March it was a Conservative MP, Mr. Lawler, who said that it was quite wrong that a local authority should be penalised for expenditure on something which eventually saves central Government money—that is the point which I am trying to make to the noble Lord, Lord Marsh—for example, the taking over of the care of long-stay patients, thus enabling the closure of an old and uneconomic hospital. We all know that voluntary sector activities on behalf of local authorities in this field are of the greatest importance. There are of course many other activities which are important, too, but this is simply one instance that I give. The point that I am trying to make is that this type of expenditure, undertaken by local authorities through voluntary organisations, is very often directed at the long-term aim of saving central Government money in other departments; for example, the NHS. On those grounds and on many others, we on these Benches most certainly support this amendment.
Lord Somers: My Lords, I am sorry; I shall not keep the noble Lord, Lord Bellwin, for more than one moment. I am no financial expert, but surely is not the logic of the amendment just this? Local authorities will have to pay for the various services that the charitable organisations are providing. They will have to pay for most of them because most of them are essential to a civilised society, and they will have to pay a great deal more than they would be giving in the way of a grant. I think that that should surely settle the anxieties of my noble friend Lord Marsh as to the logic of the thing. If you are paying less than you would otherwise, then you are saving.
Lord Bellwin: My Lords, I, too, begin by saying that of course the Government support the work done by voluntary bodies. I think that we show that in a very practical way. We fund a large number of voluntary bodies to the extent of £ 150 million a year. There can be no question about it. The amount of Government funding has shown the great, not willingness, but wish that we have for them to continue to extend their activities. But it cannot in any logic be said that all voluntary organisations are equally worthy. We have to consider the kind of voluntary organisations that we are talking about. My noble friend Lady Faithfull talked of the registered charities. So far as this Bill is concerned I think that that is a category about which we have to think carefully.

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I very much want to deal with the point raised by the noble Lord, Lord Marsh. It is absolutely apposite to this legislation. But the fact is that I am not without sympathy for the amendment. I say right now that I would propose to take it away and consider what we might come up with at the final stage. The noble Lord is absolutely right. Either you believe that local authorities have the right to decide what they spend their money on or you do not believe that. By taking any particular item out in any way, you are deciding at a central point the priorities for authorities' spending.
My noble friend Lady Faithfull mentioned Leicester, which says that it will have to cut by 50 per cent. its aid to certain charities. It is a very good example. In fact Leicester spent 28 per cent. over GRE and 5 per cent. over its target, so it must be in the range of possible selectees. I do not say that it is, because the final criteria have not been set, but it is that kind of authority.
By definition, the fact that we are talking of high spending authorities shows they have scope to decide, as the noble Lord, Lord Marsh, so properly said, on what they spend. Why when making the great case which we all make—and I join in making it—on behalf of the charities and the voluntary bodies do we have to assume that the authorities will say that the first thing they will decide to reduce is not what it costs them to operate, they will not look at anything on that, but the first thing will be that they will reduce their spending on the voluntary sector? That is what is being said. Because I know the local authorities concerned, I do not happen to believe that when the chips are down that will be their decision. I do not think it will. But I fully understand why, at this stage, they say that this is what they might very well have to do and that is a reality of it.
I think my noble friend Lady Faithfull, as always, makes a powerful case. We discussed this together in some detail. I am concerned for her concerns. She makes a case as well as anybody ever does, especially on this subject. I wanted to say what I have just said because it applies not just to this amendment but to very many others that may well come before your Lordships' House in the next month or two. The fact is that the local authorities are themselves the ones who must decide on what they spend. The fact is if we are talking about high spenders, by definition they have the most room of all. There are other authorities providing the same support for the voluntary sectors, who are not high spenders, who do manage their affairs in certain ways. If we have to go over again the opportunities that exist for some of these authorities who will have to explain why they provide certain services at a cost one, two, three or four times that of like authorities, I must say again that this is where we should be looking when we are talking about the ability to provide services, whether in relation to voluntary bodies or any other.
Having said all that, I think my noble friend makes a good case in many ways. I accept the concern. I said that I would undertake to take this away to see if we could bring back an amendment that would perhaps go, if not all the way then at any rate perhaps some of the way. I cannot make a promise, and that is the way of it, as your Lordships know. But I am certainly sufficiently impressed and I want to look at some way
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of finding answers. However, as I sit down I say—perhaps for the third time, because at Report stage we do not stand up again and repeat ourselves—that the point I have been making about the opportunities for certain local authorities themselves is a very, very valid one indeed. I hope, if it does nothing else, it will at least have explained to some extent to the noble Lord, Lord Marsh, how come we are following the two paths which do seem to meet at one point.
Baroness Faithfull: My Lords, may I thank the Minister for his reply. We take note of what he says. Indeed, I think I referred to the principles behind the Bill when I introduced this amendment. May I turn to what I might term our rejected and deprived peer, the noble Lord, Lord Marsh, I am glad he has the Minister to support him because I fear he has nobody else to do so, and as an ex-Director of Social Services I really feel I ought to offer him care.
Lord Marsh: My Lords, if I might say so to the noble Baroness, I am grateful for her concern but after the first 20 years or so one gets used to it.
Baroness Faithfull: My Lords, yes, May I say to the noble Lord, Lord Marsh, that I am, as an ex-Director of Social Services and as a member of the Conservative Party, anxious to cut back and for local authorities to keep within a reasonable expenditure. But I would like to take up a point made by my noble friend Lady Elliot: it is cost-effective to support the voluntary organisations. I think this is the point that perhaps the noble Lord, Lord Marsh, has missed out. It is not only financially cost-effect. We are not a completely materialistic world and there are other qualities of life and living which voluntary organisations, in partnership with local authorities, can engender in our society. We would be a poorer country if we had not got the ethics and the ways of the voluntary organisations. Good as the local authorities are, voluntary organisations are able to do things of an innovatory nature which the local authorities cannot. Obviously the noble Lord, Lord Marsh, does not wish to be accepted into care, and therefore I withdraw the offer.
My noble friend the Minister has said that he will take this away and think about it. We will consider carefully what he has to say at the next stage. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.5 p.m.
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 8:
Page 3, line 21, after ("expenditure") insert ("excepting any expenditure incurred by a designated authority on the Urban Programme").
The noble Lord said: My Lords, after what the noble Lord, Lord Bellwin, has said about his reluctance that central Government should make any exemptions under this Bill, that it is really a matter for local authorities to decide on their own priorities, perhaps it might appear rather difficult for me to move this amendment at all compellingly, as it strives to make an exemption in favour of the Urban Programme. However, in extenuation of what I seek to do, I would

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like to point out to the House and to the noble Lord that there are, of course, various areas of local authority expenditure which are already, under existing legislation, exempted from penalty. I refer to police pay and to partnership authorities and in addition to these there are activities which are funded to a very large extent by central Government and therefore may be assumed to have the approval and firm support of central Government. In these cases, the central Government contribution is usually a great deal larger than the local authority contribution, but the local authority contribution is equally vital.
In the case of the Urban Programme, as I am sure your Lordships will all be aware, this is run by the Department of the Environment and it brings central and local government, private and voluntary organisations and local people together to combat social, environmental and economic deprivation in urban areas. In the case of this scheme, the DoE contribute 75 per cent. of the costs of the Urban Programme projects and the local authorities the other 25 per cent.
Many of the inner city authorities which are likely to have their rates capped are among those which the DoE have singled out as being particularly deprived and which have made imaginative and effective use of Urban Programme funding. As the Bill stands, projects at risk include Project Full Employ in Brixton and the Play and Learn project in Sheffield; both aim at ethnic minorities and were recently praised by the DoE in their recent publication, Tackling Racial Disadvantage. Project Full Employ helps young people prepare for and find employment, while Play and Learn draws in West Indian mothers who are deterred from sending their children to established pre-school play groups. Other projects in danger are the Brent Kids' Scrap Bank and North Tyneside's Key Enterprises Workshop, which provides therapeutic employment for mentally ill people, as well as many other projects which the Government have encouraged voluntary and statutory agencies to undertake. In addition, the Urban Programme has encouraged co-operation over inner city policy. This co-operation is unlikely to continue if rate capping blocks the authorities' power to contribute.
I do not think I will go into any more detail at this stage about the Urban Programme, but I think I must really reiterate the point with which I started, which is that if we are talking about exemptions from the rate-capping provisions under this Bill, surely the prime candidates for such exemptions must be those activities and programmes the value of which is clearly already recognised by central Government and which are very largely supported by them. I would like to ask the noble Lord, Lord Bellwin, if he would not agree that it would be a tragedy if some of these things which are really beginning to get off the ground and make some headway against the terrible problems confronted by inner cities should fall through lack of the local authority contribution. I beg to move.
Lord Ennals: My Lords, the noble Lord, Lord Kilmarnock, has made an excellent case. I shall be extremely brief because he has employed all the arguments that I would have used. This initiative was
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started nearly 20 years ago when I was deeply involved as a Minister at the Home Office. It has been supported by successive governments. If the local authority is unable to pay its 25 per cent., the project simply falls apart. As this is a project initiated by government, it would be a tragedy if that possibility was even contemplated. I therefore warmly support—my name is on the list—the amendment that has been moved.
Lord Beaumont of Whitley: My Lords, I should like to intervene at this moment. Obviously, the whole of this area impinges on the arguments put forward by the noble Lords, Lord Marsh and Lord Bellwin, on the last amendment. I must confess that I had some sympathy with the case that they put forward believing, as I do, wholeheartedly in the giving of as much freedom as possible to local authorities. However, on this amendment, it seems to me that the noble Lords, Lord Kilmarnock and Lord Ennals, have a strong case for putting forward the idea that there should be a special exemption from this general principle.
I repeat that I have sympathy with the principle that the Government are putting forward. It seems to me that there are moments when Parliament is entitled to say that there is a whole area of expenditure that is the province of local government, that it may not spend more than a certain amount but within that amount it has freedom to choose how the money is spent—or not necessarily complete freedom but very large freedom. That is the case, I take it, put forward by the noble Lords, Lord Bellwin and Lord Marsh. It seems to me, however, that Parliament also has the right to say that there are certain specific areas of activity which should not be liable to this, which fall outside the area that we hand over to local government and which we keep in an area that is joint local government-central government. It is therefore subject to a completely different set of rules.
I suggest that the immense priorities that are involved in the urban programme and the need to relieve the poverty and the growing deterioration of our inner cities fall into that category. If the noble Lord, Lord Bellwin, was intending—I do not imply that he necessarily was—to produce the same arguments for this amendment as for the last, I do not think that it will do. This is a different case and a much more powerful one. It is a case that the Government should accept.
Lord Bellwin: My Lords, I certainly agree that it is a different case. I do not agree that it is a more powerful one—quite the opposite. I happen to know a great deal about the urban programme. It is one of my departmental functions. I respectfully suggest that I have been more involved in the past five years with individual schemes of the voluntary sector than most people one might meet walking around the streets, if I may put it that way. I had anticipated that once I had indicated a willingness to consider further the concerns of my noble friend Lady Faithfull about support for registered charities that I should immediately be pressed to look at other cases. This is one of four areas due for discussion on amendments today. One we have dealt with. Another is MENCAP, which is an amendment to be moved by the noble Lord, Lord

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Ennals. There is the amendment now before the House dealing with the urban programme. Another refers to the probation service.
I say here and now, although not to pre-empt any discussion that might take place, that in the case of MENCAP, which is also a registered charity, I shall take exactly the same approach as I did to the amendment proposed by my noble friend Lady Faithfull. When the noble Lord, Lord Ennals, comes to the amendment, he will know that he does not have to press the case very hard because that is what I propose to do.
However, in the case of the urban programme, and also the amendment that pertains to the probation service, it is my intention, as the noble Lord, Lord Beaumont, rightly presumes, to fall back upon the arguments that I used previously. I consider that argument a very fundamental one. The noble Lord will have recognised I hope the fervour with which I made my case. I believe passionately that in all this the priority of spending must be the local authority priority especially in this case when, as the noble Lord, Lord Kilmarnock, fairly stated, we are talking of a 25 per cent. contribution. Government put up 75 per cent. of the cost; the local authority 25 per cent. only.
I simply do not believe that, having worked so closely over the past five years with almost every authority within the urban programme to which this percentage pertains, they will decide that this is not a priority for them and that they will say that they are unwilling. I remind your Lordships that it is only those authorities that come to be selected. It is not all authorities. It will not be the case that all the authorities that receive funds under the urban programme are those which will necessarily be selected. Far from it—very far from it, come to that.
At the end of the day, they have to decide what is their priority. They have to decide whether there are not ways in which they can find resources by doing things another way. Are we really saying, my Lords, that these authorities, the high spenders, have no possibility of doing what others can do, that they will be so wicked as to say, "We will show them by cutting the deserving voluntary bodies to whom we only pay 25 per cent. rather than that we will look to see why we cannot do things like other people". At least, that is the case for those affected by the amendment. It is a very sad reflection on the opinion that some may have of local authorities. It is not mine. I am still satisfied that, at the end of the day, they will do it that way.
However, it would defeat the whole object of the exercise and the whole object of what we are seeking to do if we were to specify a series of exemptions for local authorities. For us to decide here the priorities for them would be quite wrong. I cannot accept the amendment. I shall accept that put forward by the noble Lord, Lord Ennals, for the reason I have given, to the extent that I shall want to take it away and see what I can come back with, hoping that it will be satisfactory. For the others, it would be wrong. It breaks a fundamental lying behind the whole Bill. For that reason, I cannot accept the amendment.
5.18 p.m.
On Question, Whether the said amendment (No. 8) shall be agreed to?
Their Lordships divided: Contents, 107; Not-Contents, 128.

DIVISION NO. 1

CONTENTS

Airedale, L.

Jeger, B.

Allen of Fallowfield, L.

Jenkins of Putney, L.

Ardwick, L.

Kaldor, L.

Attlee, E.

Kennet, L.

Aylestone, L.

Kilmarnock, L. [Teller.]

Banks, L.

Kirkhill, L.

Beaumont of Whitley, L.

Kirkwood, L.

Bernstein, L.

Leatherland, L.

Beswick, L.

Listowel, E.

Birk, B.

Longford, E.

Blyton, L.

McCarthy, L.

Boston of Faversham, L.

McCluskey, L.

Briginshaw, L.

McIntosh of Haringey, L.

Brooks of Tremorfa, L.

Mackie of Benshie, L.

Bruce of Donington, L.

McNair, L.

Burton of Coventry, B.

Mayhew, L.

Caradon, L.

Milford, L.

Carmichael of Kelvingrove, L.

Molloy, L.

Chelmsford, Bp.

Nicol, B.

Chichester, Bp.

Northfield, L.

Chitnis, L.

Oram, L.

Cledwyn of Penrhos, L.

Phillips, B.

Collison, L.

Pitt of Hampstead, L.

Darling of Hillsborough, L.

Ponsonby of Shulbrede, L.

David, B.

Raglan, L.

Dean of Beswick, L.

Rathcreedan, L.

Diamond, L.

Rhodes, L.

Donaldson of Kingsbridge, L.

Robson of Kiddington, B.

Donnet of Balgay, L.

Rochester, Bp.

Elwyn-Jones, L.

Rochester, L.

Ennals, L. [Teller.]

Sainsbury, L.

Ewart-Biggs, B.

Seear, B.

Ezra, L.

Sefton of Garston, L.

Falkland, V.

Serota, B.

Fisher of Rednal, B.

Shackleton, L.

Fitt, L.

Stallard, L.

Foot, L.

Stamp, L.

Gallacher, L.

Stewart of Alvechurch, B.

George-Brown, L.

Stewart of Fulham, L.

Glenamara, L.

Stoddart of Swindon, L.

Graham of Edmonton, L.

Taylor of Blackburn, L.

Grey, E.

Taylor of Mansfield, L.

Grimond, L.

Tordoff, L.

Hale, L.

Underhill, L.

Hampton, L.

Wallace of Coslany, L.

Hanworth, V.

Walston, L.

Harris of Greenwich, L.

Wells-Pestell, L.

Hatch of Lusby, L.

White, B.

Houghton of Sowerby, L.

Wigoder, L.

Howie of Troon, L.

Willis, L.

Hughes, L.

Winchilsea and Nottingham, E.

Hunt, L.

Jacobson, L.

Winstanley, L.

Jacques, L.

Young of Dartington, L.

NOT-CONTENTS

Abercorn, D.

Chelwood, L.

Airey of Abingdon, B.

Cockfield, L.

Alexander of Tunis, E.

Coleraine, L.

Ampthill, L.

Constantine of Stanmore, L.

Avon, E.

Cork and Orrery, E.

Bathurst, E.

Cox, B.

Belhaven and Stenton, L.

Crawshaw, L.

Bellwin, L.

Cullen of Ashbourne, L.

Belstead, L.

Daventry, V.

Boyd-Carpenter, L.

Davidson, V.

Broxbourne, L.

De Freyne, L.

Bruce-Gardyne, L.

De La Warr, E.

Caccia, L.

Denham, L. [Teller.]

Caithness, E.

Digby, L.

Campbell of Croy, L.

Drumalbyn, L.

Carnegy of Lour, B.

Eccles, V.

Chelmer, L.

Elliot of Harwood, B.

531

Elton, L.

Morris, L.

Faithfull, B.

Mottistone, L.

Ferrers, E.

Mountgarret, V.

Ferrier, L

Mowbray and Stourton, L.

Fortescue, E.

Napier and Ettrick, L.

Fraser of Kilmorack, L.

Newall, L.

Gainford, L.

Nugent of Guildford, L.

Gardner of Parkes, B.

O'Brien of Lothbury, L.

Gisborough, L.

Orkney, E.

Glanusk, L.

Peyton of Yeovil, L.

Glenarthur, L.

Plummer of St. Marylebone, L.

Grantchester, L.

Gray of Contin, L.

Porritt, L.

Grey of Naunton, L.

Portland, D.

Gridley, L.

Radnor, E.

Hailsham of Saint Marylebone, L.

Rankeillour, L.

Renwick, L.

Halsbury, E.

Richardson, L.

Hanson, L.

Rochdale, V.

Hayter, L.

Rodney, L.

Hemphill, L.

Romney, E.

Henley, L.

St. Aldwyn, E.

Hertford, M.

Saint Brides, L.

Hives, L.

St. Davids, V.

Holderness, L.

Saint Oswald, L.

Hylton-Foster, B.

Saltoun, Ly.

Inglewood, L.

Sandford, L.

Ingrow, L.

Sandys, L.

Kinloss, Ly.

Sempill, Ly.

Kintore, E.

Skelmersdale, L.

Lane-Fox, B.

Somers, L.

Lauderdale, E.

Strathclyde, L.

Lawrence, L.

Strathspey, L.

Long, V.

Swinton, E. [Teller.]

Loudoun, C.

Terrington, L.

Lucas of Chilworth, L.

Teynham, L.

McAlpine of Moffat, L.

Thomas of Swynnerton, L.

McAlpine of West Green, L.

Tranmire, L.

MacLehose of Beoch, L.

Trefgarne, L.

Macleod of Borve, B.

Trenchard, V.

Mancroft, L.

Trumpington, B.

Margadale, L.

Vaizey, L.

Marsh, L.

Vaux of Harrowden, L.

Maude of Stratford-upon-Avon, L.

Vickers, B.

Waldegrave, E.

Merrivale, L.

Whitelaw, V.

Mersey, V.

Wise, L.

Milverton, L.

Wynford, L.

Molson, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.27 p.m.
Lord Hunt Lord Hunt moved Amendment No. 9:
Page 3, line 21, after ("expenditure") insert ("excepting any expenditure incurred by a designated authority on the Probation Service.").
The noble Lord said: My Lords, this amendment has the same general sense and purpose as the two previous amendments and it occurs at the same point in the Bill. Its purpose is to make an exception—I should like to have the attention of the Minister—to the general effect of rate capping on certain vital services. I propose to deploy the arguments in support of this amendment, notwithstanding the logical spanner handed to the Minister by the noble Lord, Lord Marsh, and wielded by the Minister with such passion that he went some way to pre-empt this amendment. If the Minister does not mind my saying so, I take mild exception to that. Under those circumstances it is difficult to press on. I can only say that I am grateful to my noble friend Lord Beaumont for producing what I thought was a very telling argument. The voting on the last amendment gives me some cause for encouragement.
Noble Lords will have noticed that this amendment is not only in my name;it has support and sponsorship from all quarters of your Lordships' House. It relates specifically to the vital role of the probation service in our criminal justice system and the provision of social services which are linked with, and essential to, its tasks within that system. It is our contention that its work must not be restricted by its being required to bear the penalty of rate capping imposed on the expenditure of a local authority designated under the terms of this Bill.
Perhaps I should explain to those of your Lordships who are not familiar with the funding of the probation service that the expenditure is met in two parts, with 20 per cent. being met by the local authority and the remaining 80 per cent. coming from central Government under the rate support grant settlement, with the exception of certain items which are funded 100 per cent. by central government. One example is the cost of seconded probation officers in our prisons, and another example is probation hostels.
If the probation service is not specifically excluded from the consequences of rate capping, it can be taken as virtually certain that their estimates will suffer a share of the cuts made in a designated local authority estimate—indeed, county treasurers will insist upon it—during the negotiations preceding approval by the local area committee. I have very good reason to be aware of the stringencies imposed upon several probation services at the present time, with which I make no quarrel. But the addition of rate capping could make the situation in those designated authorities very serious indeed.
The responsibilities of the probation service have been considerably increased following the Criminal Justice Act. The Home Secretary—and I should like to stress the part of the Home Secretary in this argument—has emphasised the importance of the service in avoiding resort to custodial measures wherever possible. He has recently defined the objectives and priorities for the service and announced a 3 per cent. growth in staffing during this financial year to meet these commitments which include supervision of very many more offenders in the community following his decision to lower the threshold for parole. Your Lordships will remember that we had a recent debate on that subject. My forecast is that it will be the resources to meet those commitments which will be denied or severely restricted by rate capping. I am referring to premises; to transport and fuel; to equipment of very many different kinds for day centers; to community service orders; to intermediate treatment schemes, and lastly—but perhaps not least—statutory support for volunteers engaged in supporting the probation service in carrying out its tasks.
It simply does not make sense to make it possible for a designated local authority to shortchange its probation service to the detriment of law and order, and all the less so because those areas upon which rate capping is likely to be imposed by designation are those very areas of greatest social need where the problems of delinquency and crime loom largest. They are the very areas where the work of the probation service is of the most vital importance, the very areas where volunteer support for the service and making

533
provision for the cost of that support is most needed for intermediate treatment schemes, for example, with which I have a great deal to do. That support would be the very first casualty of cuts in probation budgets in designated authority areas. That is just one example of the social harm that would be inflicted if this amendment were not agreed to.
It is worth remembering that this service is part of our law and order system. Unlike the police service, its finances are not safeguarded—those of the police service are safeguarded under the Police Act 1964 and the Local Government Finance Act 1982—and it is very important that they should be safeguarded. We must remember that the central government contribution is 80 per cent. in most cases and 100 per cent. in others and that should not be touched or affected in working out agreed local budgets by county treasurers and local finance and general purposes committees. I cannot help feeling that this amendment is of a different order—if my noble friend Lord Kilmarnock will forgive me for saying so—from even that which concerns the urban programme. Law and order is not a local matter; it is a matter of national concern, and for that reason I hope that the amendment will command support in all quarters of the House. I beg to move.
Baroness Faithfull: My Lords, I rise to support this amendment but in a slightly different way from that put forward by the noble Lord, Lord Hunt, Managerially, the funding of the probation service is, to put it mildly, a muddle. First, as the noble Lord, Lord Hunt, has said, the local authority pays 20 per cent. and the Home Office pays 80 per cent. Meanwhile, the local authority has no jurisdiction—and rightly so—over the probation service. In many areas there is a local authority representative on the magistrates' committee, which is the committee which controls, helps and guides the probation officers. Therefore, there is no sense of accountability from the point of view of the local authority to the probation service.
Like the noble Lord, Lord Hunt, I very much fear that, as there is no accountability and as managerially the local authority has no say in the way in which the probation service is run, it is possible that it may well cut that 20 per cent. It seems to me that it would be quite wrong for the probation service to be cut. But let us suppose for argument's sake that the local authority does cut by 20 per cent. What will the Home Office do? Will the Home Office agree—in fact it has no option but to agree—if the local authority cuts by 20 per cent.? What will the Home Office do if the probation service is not able to carry out the duties which were laid down and brought out by the Home Office only a very short time ago? Will not the Home Office be in a very serious dilemma?
I have spoken to the noble Lord, Lord Allen of Abbeydale, who we all respect and know as a former head of the Home Office. I know that were he here he would be speaking along the same lines as I am speaking, because he feels that managerially the probation service needs to be looked at, and looked at again. I would ask my noble friend the Minister whether it is not possible to take this opportunity to put the probation service on a proper footing such as that of the police, not necessarily by the 20 per cent.
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being paid by the local authority, but by the Home Office. I end by asking—as I did earlier—what would the Home Office do if the local authorities cut by 20 per cent. and the probation service was unable to meet its responsibilities as laid down in the paper which the Home Office has just issued?
Lord Boyd-Carpenter: My Lords, there is a common thread running through this and one or two previous amendments, and it is a rather curious thread in view of the general attitude of noble Lords opposite as defenders and supporters of local government. It is the clear implication of all these amendments that a local authority, if it is ratecapped, will immediately concentrate the reduction of its expenditure on these particularly worthwhile areas.
It may be that there are local authorities which, in a wholly cynical way, would decide to continue their many extravagances. Indeed, there is hardly a local authority in the country which does not have extravagances that it could well cut and should cut. But to the suggestion that these local authorities would prefer, as a matter of deliberate policy, to cut the worthy objects mentioned in these amendments, I can only say that if that view of local government mentality is right, it knocks a good deal of the glamour off the appeal to protect local democracy. I hope and believe it also means that local authorities who behave like that will be out on their neck after the next local government elections, because it would be outrageous behaviour and behaviour which I do not think the electors would be prepared to support.
Therefore, I suggest to your Lordships that if we move—and I think that we are bound to do so—under this Bill to control local government expenditure, then to take out of the area that is controlled various worthy causes in the fear (and it is no more than the fear) that local authorities, or some of them, will act so irresponsibly as to cause them to cut this rather than their other manifold expenditures, would seem to indicate that we are conveying from this House a very severe stricture and a very severe criticism on the whole operation of local government in this country. In other words, these amendments suggest a lack of confidence in local authorities and a lack of confidence in their desire to do the right thing. Noble Lords who take that view may turn out to be right, but I think we should allow this matter to be put to the test. I do not go along with my noble friend Lady Faithfull in the belief that every penny spent on the probation service is sacred. I am sure that there could be some economies there, too.
Lord Somers: My Lords, I sympathise with the attitude of the noble Lord, Lord Bellwin, that he does not want to interfere with local government decisions as to what they should spend their money on. The noble Lord, Lord Boyd-Carpenter, has just referred to several worthy objects. That may be so, but surely there is a difference here. The probation service represents the law of the land and surely that is something that overrides local borders altogether. I should have said that in this particular instance there is something that local government opinions or decisions should not be allowed to influence. I hope that the Government will decide to accept the amendment.
5.42 p.m.
Lord Wells-Pestell: My Lords, I hope that the noble Lord the Minister will make amends for making a decision in respect of this amendment before he had heard the arguments. I believe that the best way to do that—and I say this with great kindness—would be for him to take back this amendment, as he has taken back Amendment No. 7, and have another look at it. It is quite clear that anyone who supports this amendment to the point of saying that the probation service must suffer along with other organisations clearly does not know the structure of the probation service and the contribution that it is making to the people of this country.
We have a Home Secretary who, in his statement of priorities and objectives, has made it perfectly clear what he wants to see the probation service do. The noble Baroness knows that local authorities will be tempted; she said that as they had no authority, they could well cut their contribution to the probation service by the whole of the 20 per cent. that they give, and some of us know that there are local authorities which will do so. It is no good we, as a society, grumbling, moaning and complaining about the crimes being committed by young people in the community unless we provide this service to help them overcome their anti-social behaviour.
My noble friend Lord Hunt mentioned community service orders. If ever anything has been successful in the treatment of young delinquents it has been the community service order. These young delinquents could well suffer—and the noble Lord the Minister knows that this is right—if fewer community service orders are made. They are the one thing that stands out as a success. My noble friend Lord Hunt has said all that needs to be said, and I shall not take up any more time other than to ask the Minister to take back this amendment and see whether the Home Office would welcome this happening to the probation service. I do not think it would for one moment. The Home Office is much more likely to say that such expenditure ought to be exempt in view of the fact that local authorities contribute only 20 per cent. as it is.
Lord Bellwin: My Lords, first, I ought to put one or two matters straight; but before doing so, I certainly take the point made by the noble Lord, Lord Hunt, when he objected to my having referred to this amendment and enveloping it with the others. I certainly apologise. I think that everyone would agree that the four amendments cover the same general ground. My enthusiasm carried me away. Certainly, the noble Lord's point is valid and I accept it, and I apologise unreservedly to him.
However, here we are talking of a service, and there there is no question about its desirability. Until I came to your Lordships' House I was an active magistrate for 15 years, so I know better than most the value of the probation service. There is no question at all but that the Government are whole-heartedly in favour of the work that it does, and they understand what it does. There is no argument at all about that. In many ways, we have shown firm evidence of our support for the service, and we stand by that. But, as my noble friend Lady Faithfull reminded us, the Home Office
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provides 80 per cent. of the cost of running the probation service. So we are talking here of 20 per cent. which the local authority provides. All else apart, it means that for every ₣1 which a local authority would want to save, it would have to cut ₣5. If it decided that this service was such a low priority that it would do away with it rather than anything else, it would have to find ₣5 for every ₣1 that it wanted to save. However, it goes further than that.
Lord Ennals: My Lords, I should like to ask the Minister a very simple question. Let us suppose that a local authority decided that it would not pay the 20 per cent. Would the Home Office pay 100 per cent., or would it allow a local authority to do without the probation service altogether?
Lord Bellwin: My Lords, that is the very point to which I was about to come. This is a matter which is very much misunderstood. The fact is that in this case a local authority cannot unilaterally decide to cut the probation service budget. It cannot do that. The budget is a matter for the local authority to agree with the probation committee, which is a statutory committee of magistrates, and the authority may only appeal to the Home Secretary if it is then dissatisfied with the decision. This is one particular area that falls almost outside all that we are talking about. It is only inside it to the extent of 20 per cent.; but, as I have been reminded, it is a fact that a local authority cannot act unilaterally in that way, even as regards the 20 per cent. of spending. I wonder whether your Lordships know that that is so, because all else apart it is very relevant.
I return to my earlier point of the degree of central intervention that it is felt proper to make. It is in no way to do with the desirability of this service, which we wholeheartedly support. The fact is that central government do not want to be entangled even deeper in local affairs. We think that the results of rate limitation will not be the kind of cuts set out here, but the saving of the cost of operating by this small number of from 12 to 20 authorities throughout the whole of the country. I take the point made by the noble Lord, Lord Hunt, that they would tend to be those authorities where the probation service is most active; but it is a small number of authorities. I do not think that we need this amendment to protect the probation service—not least because of the points I have made, especially about the practical way in which it works and in which its function is directed through the magistrates' courts.
Baroness Fisher of Rednal: My Lords, briefly, I should like to ask the Minister seriously to consider this matter, bearing in mind the probation services which are being run by the metropolitan counties. I have great knowledge of the West Midlands, where the probation service is now a West Midlands county service. There is grave concern not only that rate capping will apply to the probation services but, with the abolition of the metropolitan counties, the services will have another serious concern. We cannot do anything about that through the ballot box, with all due respect to the noble Lord. Lord Boyd-Carpenter, because we know that we shall have a paving Bill soon

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which will do away with a vote regarding the metropolitan counties. If the Minister is not accepting the amendment, I would ask him to consider the serious concern that is felt in the metropolitan counties regarding the probation services.
Lord Bellwin: My Lords, by leave of the House—and we must remind ourselves that we are on Report stage—in fact that will not need to be a concern. We shall come to that when we debate the paving Bill, but the same funds and grants which would at present go to the metropolitan counties for the provisions of services at that time will go to the district authorities, who will then have the same ability to decide whether that is what they want to decide as a priority. But I would come back in the case of the probation service to the point I made a moment ago, that in this one particular function the authority is not entirely as free as some might think it ought to be.
Lord Jacques: My Lords, while the authority is not free, in practice it has a great deal of influence. When the local authority has to economise, it circulates the spending committees and tells them they have to economise. Since the probation committee is a spending committee it would come under that pressure. What we are trying to do is to take it away from that pressure for the reasons which have been given.
Lord Hunt: My Lords, we have had a useful debate on this amendment, and I am grateful to all those who have contributed. I should like to preface any brief remarks that I have to make by thanking the Minister for his fulsome apology, which I gratefully accept. It must have been that logical spanner which it must have been tempting to wield to bash amendments in all directions, past and present.
It is clear from the tenor of the interventions made that there is a lot of support for this amendment. I turn to the noble Lord, Lord Boyd-Carpenter. He includes, embraces, this amendment concerning the probation service with "other worthy causes". I think that that is the understatement of the century. This is an essential element in our law and order system in which the Home Secretary has a vitally responsible role to play, which he does by laying down the priorities and by contributing largely from the Home Office to the costs of that service; in some cases 100 per cent. I am grateful to the noble Lord, Lord Somers, for making that point for me, but I make it again.
I agree with my noble friend opposite—if I may call her so—Lady Faithfull, that the funding of the service is illogical and in that sense in a muddle. Of course it perhaps does not strictly affect this amendment. I should like to comment on the Minister's reference to the appeal that is open to the probation committee—composed, as he says, of magistrates, an independent committee—to the Home Secretary if they cannot get agreement on the budget drawn up between the committee and the finance committee of the local authority.
I should like the Minister to tell me, if he can, of any single instance within the span of this and the last Government where such an appeal has been upheld by the Home Secretary. I believe there to be no such
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instance. It is almost axiomatic that an appeal, in the circumstances of present financial stringency, for the probation committee's budget to be larger than the local finance committee wishes would undoubtedly be turned down by the Home Secretary. Therefore, I have no confidence in that.
The noble Lord, Lord Boyd-Carpenter, suggests that from this side there is lack of confidence in the discretionary good sense of local authorities. I would rather say that our concern in this amendment stems from our deep concern about law and order. That is the whole point of it.
Lord Boyd-Carpenter: My Lords, would the noble Lord allow me? If the noble Lord's concern stems from a deep concern about law and order, is he saying that he has no confidence that the local authorities concerned would have a similar concern?
Lord Hunt: My Lords, under severe pressure, as has been said for me, they may well make cuts which are detrimental to law and order in areas of great social need, which has to do with the background of the rate-capping designation. I think there is nothing more for me to do—and I have a duty to do it—except divide the House on this amendment.
5.56 p.m.
On Question, Whether the said amendment (No. 9) shall be agreed to?
Their Lordships divided: Contents, 110; Not-Contents, 117.

DIVISION NO. 2

CONTENTS

Airedale, L.

Fitt, L.

Allen of Abbeydale, L.

Foot, L.

Allen of Fallowfield, L.

Gallacher, L.

Ardwick, L.

Glenamara, L.

Attlee, E.

Graham of Edmonton, L.

Auckland, L.

Grey, E.

Aylestone, L.

Grey of Naunton, L.

Banks, L.

Grimond, L.

Beaumont of Whitley, L.

Hale, L.

Bernstein, L.

Hampton, L.

Beswick, L.

Hanworth, V.

Birk, B.

Harris of Greenwich, L.

Blyton, L.

Hatch of Lusby, L.

Briginshaw, L.

Henderson of Brompton, L.

Brooks of Tremorfa, L.

Hooson, L.

Bruce of Donington, L.

Houghton of Sowerby, L.

Burton of Coventry, B.

Howie of Troon, L.

Caradon, L.

Hughes, L.

Carmichael of Kelvingrove, L.

Hunt, L. [Teller.]

Chelmsford, Bp.

Jacobson, L.

Chichester, Bp.

Jacques, L.

Chitnis, L.

Jeger, B.

Cledwyn of Penrhos, L.

Jenkins of Putney, L.

Collison, L.

Kagan, L.

Darcy (de Knayth), B.

Kennet, L.

Darling of Hillsborough, L.

Kilmarnock, L.

David, B.

Kinross, Ly.

De Freyne, L.

Kirkhill, L.

Diamond, L.

Kirkwood, L.

Elwyn-Jones, L.

Leatherland, L.

Ennals, L. [Teller.]

Listowel, E.

Ewart-Biggs, B.

Loudoun, C.

Ezra, L.

McIntosh of Haringey, L.

Faithfull, B.

McNair, L.

Falkland, V.

Masham of Ilton, B.

Fisher of Rednal, B.

Mayhew, L.

539

Milford, L.

Stewart of Alvechurch, B.

Molloy, L.

Stewart of Fulham, L.

Morris, L.

Stoddart of Swindon, L.

Mulley, L.

Taylor of Blackburn, L.

Nicol, B.

Taylor of Gryfe, L.

Oram, L.

Taylor of Mansfield, L.

Phillips, B.

Tordoff, L.

Pitt of Hampstead, L.

Underhill, L.

Ponsonby of Shulbrede, L.

Wallace of Coslany, L.

Raglan, L.

Walston, L.

Rathcreedan, L.

Wells-Pestell, L.

Rhodes, L.

Whaddon, L.

Rochester, Bp.

White, B.

Rochester, L.

Wigoder, L.

Sainsbury, L.

Willis, L.

Saint Brides, L.

Winchilsea and Nottingham, E.

Seear, B.

Sefton of Garston, L.

Winstanley, L.

Serota, B.

Young of Dartington, L.

Stallard, L.

NOT-CONTENTS

Airey of Abingdon, B.

Lindsey and Abingdon, E.

Alexander of Tunis, E.

Long, V.

Avon, E.

Lucas of Chilworth, L.

Bathurst, E.

McAlpine of Moffat, L.

Belhaven and Stenton, L.

McAlpine of West Green, L.

Bellwin, L.

MacLehose of Beoch, L.

Bestead, L.

Mancroft, L.

Bolton, L.

Margadale, L.

Boyd-Carpenter, L.

Marsh, L.

Brabazon of Tara, L.

Massereene and Ferrard, V.

Brougham and Vaux, L.

Maude of Stratford-upon-Avon, L.

Broxbourne, L.

Caccia, L.

Merrivale, L.

Caithness, E.

Mersey, V.

Campbell of Croy, L.

Middleton, L.

Carnegy of Lour, B.

Milverton, L.

Chelmer, L.

Mottistone, L.

Chelwood, L.

Mowbray and Stourton, L.

Cockfield, L.

Napier and Ettrick, L.

Coleraine, L.

Nugent of Guildford, L.

Colwyn, L.

O'Brien of Lothbury, L.

Constantine of Stanmore, L.

Orkney, E.

Cork and Orrery, E.

Pender, L.

Cox, B.

Peyton of Yeovil, L.

Cullen of Ashbourne, L.

Platt of Writtle, B.

Daventry, V.

Portland, D.

Davidson, V.

Radnor, E.

De La Warr, E.

Rankeillour, L.

Denham, L. [Teller.]

Reay, L.

Dilhorne, V.

Renwick, L.

Drumalbyn, L.

Richardson, L.

Eccles, V.

Rochdale, V.

Elton, L.

Rodney, L.

Ferrier, L.

Romney, E.

Fortescue, E.

St. Aldwyn, E.

Fraser of Kilmorack, L.

St. Davids, V.

Gainford, L.

Saltoun, Ly.

Gardner of Parkes, B.

Sandford, L.

Gisborough, L.

Shannon, E.

Glanusk, L.

Skelmersdale, L.

Glenarthur, L.

Stamp, L.

Grantchester, L.

Strathclyde, L.

Gray of Contin, L.

Strathspey, L.

Gridley, L.

Swinton, E. [Teller.]

Hailsham of Saint Marylebone, L.

Terrington, L.

Teynham, L.

Halsbury, E.

Thomas of Swynnerton, L.

Hanson, L.

Tranmire, L.

Harmar-Nicholls, L.

Trefgarne, L.

Hemphill, L.

Trenchard, V.

Henley, L.

Trumpington, B.

Hives, L.

Vaizey, L.

Holderness, L.

Vaux of Harrowden, L.

Hylton-Foster, B.

Waldegrave, E.

Inglewood, L.

Westbury, L.

Ingrow, L.

Whitelaw, V.

Kintore, E.

Windlesham, 1.

Lane-Fox, B.

Wise, l.

Lauderdale, E.

Wynford, L.

Lawrence, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.5 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 10:
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 the House of Commons").
The noble Lord said: My Lords, Amendment No. 10 substantially returns to the issues we had earlier concerning the new attempt to obtain some kind of parliamentary approval in respect of the orders. At Committee stage the series of amendments were related to approval in both Houses. This is another attempt concerning approval which is being sought for only the House of Commons. The Minister has been at pains more than once, and in many of the debates, to indicate the principles that the Government have in mind, and yet has refused to have them written on the face of the Bill. We are still puzzled as to why the Minister, having used certain words about having confidence in local government, is unwilling to have that tested on the floor of the Commons whereby, quite clearly, with parliamentary arithmetic being what it is, there is little danger of the Government of the day having their will overturned: but there would be the opportunity of having these matters debated, if not at length because that is a question of negotiation. I very much hope that the Minister may have some kind words to say concerning this.
The Minister has more than once talked in terms of delay or the difficulty and the burdensome nature of these amendments in another place. I simply want to say to the Minister that it is much better to get it right than to get it quickly. Even if we are talking in terms of 10 or 12 authorities, a maximum of perhaps 20 hours of parliamentary time, we think that that is a small price in order to justify these matters outside the House. I beg to move.
Lord Bellwin: My Lords, this amendment is very similar to Amendment No. 42 which was negatived in Committee. The only change that has been made is that the amendment no longer requires the approval of this House to the principles on which expenditure levels are set but only the approval of the other place. It would have been objectionable to involve this House in matters which are the privilege of another place, but that was not the main ground on which I opposed the earlier amendment in Committee. There were other reasons. One was practical; the other a matter of principle.
I made a fairly long statement on an earlier amendment about the desirability of involving Parliament in the many decisions leading up to the final process of rate limitation, and I do not want to detain your Lordships with a repetition of that statement. The essence of it was that it is wrong to provide for detailed statutory scrutiny of these decisions. The Secretary of State must be held to account in the usual way for what he does.
I believe it would be particularly inappropriate to require the other place to become involved at this

541
stage. We are proposing that authorities should have their expenditure levels determined according to general principles. The principles will have been chosen on an objective basis, and in our view the right time for Parliament to be involved in the process is when there is disagreement over the rate limit proposed to be set.
What is more, the expenditure levels will not be the last word. The amendment asks for parliamentary endorsement of them. But the expenditure levels will be open to discussion with authorities through the derogation procedure. They could be changed by agreement between the Secretary of State and the local authority concerned. Only after this stage comes the calculation of a rate limit. If that is not agreed it will then have to come to Parliament. That is the right stage for the other place to consider an order.
If I may, I turn to practicality—and may I remind your Lordships of the severe timetable problem? Selection of authorities and thereafter the determination of expenditure levels will depend crucially on the budgets for the relevant rate limitation year. My department does not receive these till May, and they have to be checked. The selection process itself is bound to take a little time. But it is very important that authorities should know of their selection and proposed expenditure level before the holiday season if the derogation procedure is to have sufficient time to allow for it. To impose a need for a parliamentary debate would cause timing difficulties, giving the local authorities less time than we should like for them to make their case. I do not believe this amendment is justified and I hope that the noble Lord will feel able to withdraw it.
Lord Graham of Edmonton: My Lords, I am far from satisfied because the Minister again pleads shortage of time. The timetable is made by the Minister. He points out quite rightly that in the earlier part of the year there are certain deadlines to be met, but frankly I believe that the timetable is not one that cannot be adapted. The Minister also makes great play about the time-honoured way in which the Secretary of State has always had powers of this kind. There have previously been no powers of this kind. We are treading new ground in respect of the sovereignty of Parliament over local government. I am not arguing about the order or the hierarchy or, ultimately, who has the right to lay down that local government, if not an instrument of Parliament, is certainly inferior when the parliamentary process is superior in respect of many of these matters. When the Minister and the Government are breaking new ground they should be prepared to consider a new device. We are far from satisfied. We shall consult others outside, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ennals Lord Ennals moved Amendment No. 11:
Page 3, line 25, after ("State") insert ("which shall include a Statement exempting from calculation any expenditure on social services to those groups which the Secretary of State for Health and Social Services shall define from time to time as priority groups, but which shall include people with mental disorder, as defined in section 1 of the Mental Health Act 1983, and elderly people over 75").
The noble Lord said: My Lords, I believe it would be for the benefit of the House if I spoke also to Amendments Nos. 15 and 19:
Amendment No. 15: Page 4, line 10, after ("requirements") insert ("including the expenditure on priority groups as set out in subsection (9) below.").
Amendment No. 19: Page 4, line 22, at end insert—
(" (9) The Secretary of State shall exempt from calculations all expenditure by a local authority on social services to the priority groups, including services provided by registered charities as its agents. The local authority shall raise the rate as agreed with the Secretary of State under subsection (1) above and in addition a rate at the local authority's own discretion to cover its expenditure on the priority groups.").
These amendments go together. I am extremely grateful to the Minister for having said in advance that he would take this amendment away and see whether at Third Reading he could come up with something which embodied the principle, even though the words were different. Therefore, that means that I do not need to make a speech. I sense that if I were to make a speech it is always possible that I might say something with which he disagreed. Therefore, I shall say nothing with which he can disagree, except to make one simple request.
He has said that he will bring back something which deals with the problems of people with mental disorders and elderly people over the age of 75. If he were prepared to consult me, I should be delighted to have the opportunity of an exchange with him so that we do not need to have any argument when we reach Third Reading. I am most grateful to the noble Lord, I beg to move.
Lord Kilmarnock: My Lords, I was delighted to hear the news that the noble Lord, Lord Ennals, had to give us. On the same grounds I will say extremely little, although there is one point I should like to make seriously to the noble Lord, Lord Bellwin. Care in the community, which is the real objective of this series of amendments, is a policy which has been promoted by successive Governments, as we very well know, since 1959. The priority groups mentioned in this group of amendments are those chosen for this purpose and singled out in the Care in the Community document of 1981. They are the mentally handicapped, the mentally ill and the elderly. The document is well known. The objective is praiseworthy. I think we all agree with it and it was originally thought that there would be some overall savings. This was one of the objectives.
In the long run this is likely to be the case, but what is increasingly emerging in this transfer from the old long stay hospitals back to the community is that, in the short run and before the old hospitals can be fully closed and while new community facilities are being built or converted, in the world outside almost inevitably there will be an increase in cost. This is something that we have to face: to get this more humanitarian, more acceptable provision for these people off the ground and to make long-term savings in the old National Health Service stock there is bound to be some increase in costs in the intervening period. It is not only I who make that point but the National Association of Health Authorities has been into the matter carefully and has made it also.

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Joint finance has helped and that is why we proposed at Committee a string of amendments exempting joint finance arrangements. The Government did not like that, but in 1983 the health and social services and social security adjudications legislation eased the joint finance conditions by extending the tapers and by admitting voluntary organisations to the joint consultative committees. All that was fine; it was a progressive step in itself in that Act, but all this will be lost, it will be useless, if local authorities are reluctant to come forward for fear of rate capping when the tapering period is over. Voluntary organisations will be unable to come forward if they have to go out of business.
That is the essence of the case. The Government themselves have backed this policy which has support in all parts of the country and in all parts of your Lordships' House. It is simply a question of trying to reconcile two different arms or strands of the Govenment's policy. On the one hand, the Government want to go ahead with care in the community, and on the other hand certain byproducts of this Bill are likely to inhibit this development in a way which I am sure the Government do not want. This is the basis of our case in these amendments and I was delighted to hear a hint from the noble Lord, Lord Ennals, that the noble Lord. Lord Bellwin, may have some good news for us.
Lord Bellwin: Yes, my Lords, I said earlier what we proposed about this amendment and the one which my noble friend Lady Faithfull mentioned. In making the point that the noble Lord, Lord Kilmarnock, does, I have to say that it is not so much for this amendment as for the underlying theology of what we are talking about that I still believe firmly that the opportunities that will exist for authorities who will be selected by definition will be greater than for other authorities, to enable them not to have to say that they cannot afford to spend money on some of these so worthwile functions which in no way do I belittle. Quite the contrary; I help to work within them so I would hardly do that.
But they will have to make decisions about what they really want to do. If we succeed in that we shall have taken everyone a long way down the road and we do not have to lose good services or any part of them. Indeed, I want them to expand more if the need is more. That is the point that the noble Lord, Lord Kilmarnock, has just made.
I, too, feel that I have to restate the principles; but having said that, the noble Lord, Lord Ennals, like my noble friend Lady Faithfull, knows that I want to take this back to consider it and have some further thought. I cannot make a commitment for that is not how it works, but we are seriously willing to consider this for the registered charities. Your Lordships will have to see what we come back with. I will certainly talk to the noble Lord about it beforehand and to my noble friend as well. But a commitment I cannot make. We are certainly sympathetic and that is why we want to deal with it in the way we are suggesting.
Lord Broxbourne: My Lords, I wonder whether my noble friend would consider this possible suggestion in
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relation to this amendment? This is an amendment with two prongs: those suffering from mental disorder as statutorily defined, and elderly people over the age of 75. These two categories are very different in many respects. Mental disorder is something which makes those who suffer from it a uniquely vulnerable section of the community. If my noble friend is not able to give effect to the whole of a suggestion such as this, he might consider severing it and simply confining the directions which he is asked to give in respect of priority groups to those suffering from mental disorder. It would obviously have a very substantial financial effect in the way that my noble friend would wish and it would also limit the curtailment of local authority discretion to that extent. I simply throw this out as a consideration to which my noble friend may be good enough to give some thought.
Lord Bellwin: My Lords, by leave of the House, my difficulty with what my noble friend Lord Broxbourne has said is that I am thinking along rather different lines. I am thinking more to the principles concerned in this particular category of services. Registered charities is the area of which we are thinking. At the end of the day we still do not want to be in the business of deciding what specific services should or should not be favoured (if that is the right word, which I suspect it is not) but we want rather to look at it on a broader front. That is why if I am slightly hesitant my noble friend will bear with me. But I think that this is the proper way to do what we have in mind if it meets the bill and if I am able to do it—and I cannot guarantee that I am. But we shall try. I am sorry to be so vague on this. It is because we are in an area of some uncertainty.
Lord Kilmarnock: My Lords, when the noble Lord undertakes his deliberations will be bear in mind that this amendment specifies, in the case of the elderly, those over 75 and not those over 65? This, as he will be well aware, is the age at which the cost to the National Health Service escalates enormously; it goes up to about six times that for a young or middle-aged person. Will be bear that in mind?
Lord Ennals: My Lords, in view of the noble Lord's helpful remarks, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (The Earl of Listowel): My Lords, before I call the next amendment, I should point out to the House that if Amendment No. 12 is agreed to I cannot call Amendment No. 13.
6.23 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 12:
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 Lord said: My Lords, with respect, I think that the noble Earl the Deputy Speaker will be calling Amendment No. 13, because I do not think that No. 12 will be agreed to. Amendment No. 12 is comparable to the earlier Amendments Nos. 3, 5 and 6 and relates to the vexed question of the Minister and the Government being unwilling to be more precise

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concerning the principles that will be applied to authorities. We still maintain that there ought to be maximum safeguards for local authorities against excessive use of the Secretary of State's discretion—and I say this candidly—in a politically biased fashion, certainly excluding from that charge the Minister who is answering these debates.
Members of the Government Benches in debates have been quite clear in indicating their detestation of the manner in which some local authorities have carried out their duties and have tarred them—and they have used the word more than once—by calling them Marxist councils. In my view, this is a clear indication of the way in which some people might be thinking in terms of exercising what I should have thought was a bad discretion. We come back to the point that there is a need to apply the same principles to all authorities. As far as we are concerned, our amendment would seek to do that. I beg to move.
Lord Bellwin: My Lords, I do not want to say too much on this, although if the noble Lord, Lord Graham of Edmonton, wishes to go into it deeply I will have to do so. We have been over this argument several times before. It is our intention to operate so far as possible on generally applicable principles, but the Secretary of State, we believe, should not be restricted in that way and the fact is that we could need a power to operate on principles applying to classes of authorities so that we can treat all authorities fairly and equally. That is really what we are all about in this. I believe that the amendment is founded on a fear, which I believe is a misplaced fear, that we wish to treat some authorities unfairly. That just is not the case. What we wish to do is to be able to take account of all the factors involved—which I will elaborate upon if your Lordships feel I ought to do so—and it is for this reason that the noble Lord, Lord Graham, predicted when moving the amendment that we should be unable to accept it.
Lord Graham of Edmonton: My Lords, I intend to withdraw this amendment; but the Minister tempts me to point out that the history of the Government in attempting to refashion and redesign their legislation in the rates field over the past three to four years since the Local Government Planning and Land Act 1980 is studded with new formulae which appeared to meet the case and then, exceptions having been found, amendments were made to it.
I would say simply that if one Conservative authority was the sole representative of its class having been caught as an over-spender by some fluke or because of a change in political control, that authority could not be let off just because it was the only representative of its class among the designated authorities. Flukes have happened before and we have seen the way in which the Government have sought to get themselves off the hook with their own supporters by bringing forward to Parliament amendments which on the face of them were designed to be general but which collectively have not been beneficial politically. We are strongly suspicious that that sort of thing can happen again. With those words, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bellwin Lord Bellwin moved Amendment No. 13:
[Printed earlier: col. 512.]
The noble Lord said: My Lords, I have spoken to this, and beg to move.
On Question, amendment agreed to.
Baroness Nicol Baroness Nicol moved Amendment No. 14:
Page 4, line 2, leave out ("or smaller").
The noble Baroness said: My Lords, with the leave of the House and the support of others who have put their names to the amendment, I should like to move this Amendment No. 14 and to speak to Amendments Nos. 16 and 17.
Amendment No. 16: Page 4, line 18, at end insert—
("( ) Where pursuant to subsection (5) above the Secretary of State has re-determined a level at a greater amount the authority in question may elect that for the purposes of this Act the level originally determined shall be applicable and on its making such an election as aforesaid the provisions of subsections (6) and (7) of this section shall be deemed not to apply to that authority.").
Amendment No. 17: Page 4, line 20 at end insert ("together with (in the case of a decision to re-determine the level at a smaller amount) a statement as to the considerations leading to such decision and a statement as to whether, or the extent to which, such decision shall affect that authority's ability to fulfil its duties under any other Act or Acts (whether or not passed before the passing of this Act)").
In Committee the noble Lord, Lord Bellwin, drew attention to the possibility of an authority saying that it had nothing to lose by appealing for a redetermination if the right of Government to redetermine at a lower level were deleted. In a subsequent letter to me he said—and I should like at this stage to thank him for a very helpful letter—and I quote:
"We will not use this power to punish authorities nor is it our intention to discourage authorities with a genuine case to make. They need have no worry on that score. What we sought to avoid is simply providing a positive encouragement for authorities to pursue a frivolous application on the view that they had nothing to lose".
Very few authorities have the time or the manpower to undertake frivolous applications. The Minister constantly tells us that the majority of authorities are reasonable and willing to try to co-operate. Why can we not accept this as true, and proceed from that point? We are being asked to take on trust the good intentions of this Secretary of State—and I am sure that we do—but we are also having to take on trust at the same time the good intentions of future Secretaries of State. This is perhaps something which should give us pause for thought. The danger of leaving in the power to reduce the determination is that authorities in genuine difficulty will be deterred from making an application for a redetermination because of the implied threat of reduction and because by renegotiation of even a small amount they will lose whatever protection the, as yet, undefined principles may offer.
We have spent a long time this afternoon discussing principles and what they might be, and I took out my pen prepared to delete that paragraph but as time went on it appeared that, to say the least, the principles were still very flexible and so we do not know whether or not they will provide protection in these circumstances. As the redetermination process is now drafted, the local authority has nothing to gain and everything to lose by asking for a redetermination. The problem is though that if an authority were not to apply for a

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redetermination it could prejudice its chances of any action against the Secretary of State for acting unreasonably in the use of his rate limitation powers. Natural justice demands that a designated authority should not have to confront this double jeopardy.
I should like now to move on to Amendment No. 16. Another aspect of the redetermination process that gives local authorities cause for concern is that the Secretary of State could grant a small higher expenditure limit and then impose:
"such requirements relating to its"—
the authority's—
"expenditure or financial management as he thinks appropriate".
This is a very wide-ranging power and could cover almost any aspect of the local authority—for example, compulsory privatisation or asset stripping. The redetermination process is very biased towards the Secretary of State and local authorities could run great risks if they appealed to him. The amendment seeks to ensure that if an authority does not like the requirements imposed by the Secretary of State in return for a higher limit it can at least reject them and stick with the first figure determined in accordance with those general principles referred to earlier.
Amendment No. 17 is a further attempt, although slightly different from the previous ones, to remove some of the double jeopardy from the redetermination process. The Government have said that the power to redetermine expenditure of appellant authorities at a lower amount is necessary,
"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."—[Official Report, 30/4/84; col. 436.]
Those were the words of the Minister during the Committee stage of the Bill. It is unlikely that any authority in this situation could easily reduce expenditure, but all this amendment seeks to do is to ensure, if a lower limit is set, the effect of that lower limit is clearly apparent and does not affect that authority's ability to fulfil its statutory duties. I beg to move.
Lord Bellwin: My Lords, Amendment No. 14 seeks to remove the power to set a smaller expenditure level, if after considering the case made by an authority for a redetermination it seems possible to identify additional savings. This amendment was moved and withdrawn in Committee by the noble Baroness, Lady Nicol. Following our brief debate, I wrote to the noble Baroness and tried to explain in more detail why we could not accept it. It may help the House if I briefly set out the reasons I gave, which are still valid.
First, I pointed out that the right of every designated local authority to seek a redetermination of its expenditure level is an important one. It will ensure that where there are special local circumstances, an authority can put the facts before the Secretary of State. He will be able to depart from the general principles on which the authority's expenditure level was first determined, if he is persuaded that this is justified.
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An authority will not be compelled to put those circumstances before the Secretary of State. They will have the option of living within the original expenditure level. It will be set on general principles which—I say this not for the first time today—must be reasonable. What we are talking about is the situation where an authority has applied for a higher expenditure level and, when all the facts have been considered, it is clear that far from needing a higher level it could make greater savings than were first proposed on general principles. The ratepayers would be justifiably angry, if knowing that for a fact, it was impossible to bring about those savings.
I went on to assure the noble Baroness that we will not use this power in any punitive sense, nor is it our intention to discourage authorities with a genuine case to make—they need have no worry on that score. What we sought to avoid is simply providing a positive encouragement for authorities to pursue a frivolous application on the view that they' had nothing to lose. It is more important that they set about making the savings which are achievable. And, we all know that significant savings do need to be planned for. Amendment No. 16 is concerned with the circumstance where a redetermination is at a greater amount than the original expenditure level and the Secretary of State is able to impose requirements on the authority where it is appropriate. The amendment would enable an authority which obtained a derogation but had requirements placed on it under Clause 3(6) to opt instead for its original expenditure level and avoid the requirements. It seems unlikely that these circumstances would arise. for we would not expect to grant a more relaxed expenditure level unless the authority could satisfy us that it could not meet the level first proposed. Nor would we expect requirements to be excessively onerous or directed to detailed policies. We see requirements more as a method of ensuring that work is undertaken towards securing longer-term savings—for example, putting value-for money studies in hand—particularly where the case for a determination rests on the need for more time to make savings. It would be thoroughly inconsistent for the Secretary of State to accept that, where he had granted a redetermination on the grounds that some increase was essential, he should then accept that the authority could, after all, manage with the lower figure.
Finally, the purpose of Amendment No. 17 is to require that, where the Secretary of State has redetermined an expenditure level at a smaller amount, the notice required under Clause 3(8) includes a statement of his reasons for that lower level and also a statement of how his decision would affect the authority's ability to fulfil its statutory duties. I fear that I cannot accept this proposal either. We have said time and again that it is not our intention to tell selected authorities where savings should or should not be made; that is for the locally elected members to decide. The Secretary of State is concerned only with stipulating total expenditure levels. If as a result of an application for derogation it is clearly apparent to the Secretary of State that not only could the authority manage within the original expenditure but could bring about a bigger reduction in the rate, I believe it must be equally apparent to the authority. Indeed it

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would no doubt have been an integral part of the negotiations leading to the redeterminations. A formal statement of the reasons for the lower expenditure level would therefore be unnecessary. Furthermore if the Secretary of State were to identify where he thought savings could be made, it could be construed as requiring savings to be made in that area.
That is not what we are about. Local authorities are the ones who will have to decide. But of course any decision that the Secretary of State makes on expenditure levels, whether originally or following an application for a redetermination, must be reasonable. If he acts unreasonably, that decision could be open to legal challenge in the courts. On the question of the effect on the authority's ability to fulfil its statutory duties, it is my view that such a statement is unnecessary. Statutory duties have to be fulfilled and expenditure levels will have to be sufficient to allow for that. In any case, selected authorities will all be high spenders. I cannot see any danger of their being brought by rate limitation into any risk of not carrying out their statutory duties.
The objects of the 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 circumstances of authorities can be taken into account. We have heard a lot of criticism of the procedures for seeking a redetermination, but we must not lose sight of the fact that this part of the Bill will assist authorities with genuine problems to discuss. 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. I hope that the noble Baroness will give careful thought to what I have said, and even if we cannot agree entirely, I hope that she will at least feel able to withdraw the amendment.
Baroness Nicol: My Lords, it is not my intention to press the amendment, but I must say that the Minister puts a very plausible case. However, it does not accord with the wording of the Bill. The Secretary of State will have the power, once the redetermination is made, to impose such requirements as he wishes, and we are being asked to take on trust that he will not intervene to too great an extent in local authority affairs. That is asking rather a lot, in view of the history over the past two years or so in relation to local government. However, at this stage, I shall not press the amendment, and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
[Amendments Nos. 15 to 17 not moved.]
6.41 p.m.
Baroness Nicol Baroness Nicol moved Amendment No. 18:
Page 4, line 22, at end insert—
("( ) Any decision of the Secretary of State under subsection (5) above, together with a statement of the considerations leading thereto and particulars of any requirements imposed by him pursuant to subsection (6) above, shall be set out by him in a report laid before the House of Commons within three months of such decision and any such report may relate to two or more authorities.").
The noble Baroness said: My Lords, this amendment seeks to make the Secretary of State more accountable to Parliament in the use of his discretion
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in redetermining the expenditure limits for individual authorities departing from general principles and imposing requirements on local authorities as to their expenditure or financial management. That is a phrase which could encompass almost any aspect of a local authority's work. We have been over very similar ground to this on a number of occasions, and basically I shall put forward the amendment without a great deal of hope. However, put it forward I shall.
In his letter, which was referred to earlier, and from which he kindly quoted, while he admitted that the Secretary of State would not have to give reasons for redetermining limits, whether up or down, the noble Lord the Minister went on to say that the local authority will be aware of the points of agreement and disagreement on this matter with the Secretary of State, as it,
"will have been engaged in detailed discussions with the Secretary of State over a long period".
But it cannot be right, in terms of natural justice, that the Secretary of State does not have to give reasons to the local authority for any redetermination, and it should not be accepted that just because detailed discussions have been taking place the local authority will be aware of what was in the mind of the Secretary of State when he took the decision. Parliament should wish to see the reasons for a local authority being given a higher or lower limit, to prevent the Secretary of State using his discretion in a biased way by giving some authorities a higher limit if they happen to have been caught by selective limitation, with that higher limit being given for no reason other than that the authority had found favour with him, for whatever reason. Departure from the general principles of expenditure determination, for whatever reason, is not just a matter for the Secretary of State and the authority concerned; there is a wider interest.
This amendment deals with one other aspect of the redetermination. As has been said, the Secretary of State can grant a higher limit and then impose undertakings upon the local authority. The Bill provides that the undertaking shall relate to the authority's expenditure or financial management; that is to say, almost anything could be imposed upon a local authority.
In the White Paper the Government said that such undertakings could involve value-for-money audits; but the Audit Commission was not informed of this at the time the White Paper was published. Privatisation, sales of assets, and so on, have already been mentioned. This amendment seeks to ensure that these undertakings are placed before Parliament. It does not require Parliament to approve them. It does not delay the process, as the report can be after the imposition of undertakings, and it allows the courts to deal with more than one authority. Therefore it would not involve a cumbersome process. The amendment attempts only to make the process more open to scrutiny and I beg to move.
Lord Bellwin: My Lords, as the noble Baroness so rightly said, we are going over ground that we have covered before. The main point of this amendment once again is parliamentary involvement in the rate limitation procedures, and we certainly talked about it in Committee. However, I remain of the view that the

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setting of expenditure levels is a matter between the authority concerned and the Secretary of State. The derogation application and its outcome will be matters for long discussion. There will be negotiations, come to that, and Parliament need not be concerned at that stage. Expenditure levels in fact are but a steppingstone to rate limits.
I have said before, in regard to other amendments, that the proper time for Parliament to become involved is when it comes to the question of the rate limit. The debate on the rate limit order will give a suitable opportunity for the expenditure levels to be discussed. So, all else apart, I cannot see any advantage in the amendment. Without elaborating on what I have said, if the noble Baroness will so agree, that is the Government's position and it is one that I would try to develop in discussion with her, in written form, and whatever. I am sorry that I cannot accept the amendment.
Baroness Nicol: My Lords, I think that we are talking about a different stage in the process. I was talking about after the redetermination had been made. The Secretary of State should then publicise his reasons for the redetermination, which is a different aspect of it. Does the noble Minister wish to comment on that, or was he aware of that aspect when I spoke?
Lord Bellwin: My Lords, I did not cover that point when I responded. Of course I shall consider what the noble Baroness has said. I doubt very much whether it basically changes anything, but of course I would want to consider this. I did not cover it when I responded.
Baroness Nicol: My Lords, I thank the noble Lord, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 19 not moved.]
Clause 4 [Determination of maximum rate on precept]:
Lord Beaumont of Whitley Lord Beaumont of Whitley moved Amendment No. 20:
Page 4, line 38, at end insert—
("(d) the annual rate of inflation").
The noble Lord said: My Lords, this amendment relates to the annual rate of inflation. It asks the Secretary of State, in determining the rate limit to be placed on a local authority, to have regard to the annual rate of inflation, seeing that that may have changed since the local authority's expenditure limit was first designated.
In a way, I think that this is a very modest amendment because it simply states that it is the annual rate of inflation which should be taken into account, and not the annual rate of local authority inflation. We all know that the costs incurred by local authorities are inevitably and frequently higher and that they rise at a faster rate than does the average retail price index. For example, over the past 15 years the rise in wage levels has consistently outstripped the rise in pure price inflation. That has been at a considerably greater rate, and of course a larger
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proportion of the local authority's costs is in its wage bill. As a result, the impact of inflation on a local authority tends to be greater than the impact of inflation as recorded in the RPI. Because local authorities spend so much of their overall budgets on the levels of salaries and wages, the level of wages in local authorities' costs will almost inevitably be higher than the retail price inflation. Some local authorities are frequently affected by increases in interest rates, which have fluctuated over the years and which, in spite of the Prime Minister's statement over the last couple of days, look as though they may well be going up in the near future. Local authorities' costs may be influenced by factors outside the normal inflation rate which affects most household domestic budgets and which therefore govern the RPI.
I would hope that the Government might accept this modest amendment, because Clause 2 says that the Secretary of State should take account of the general economic conditions that appertain at the time. Surely one of those indicators would be the level of inflation. But let us suppose that the level of inflation changes between the time of designation and the time of rate limitation. If when he designates the Secretary of State takes into account a rise in inflation, surely he should take any change into account when he sets a limit on an authority's rate. The logic of this sensible argument will, I hope, appeal to the Government. It seems only right and fair that the level of inflation should be taken into account if it changes significantly between the first and last steps of the process. I beg to move.
Lord Bellwin: My Lords, this is indeed a narrow and modest amendment. We touched upon it during the Committee stage. I shall explain why we feel that it is not necessary. For all authorities, the rate or precept income which they require is determined by their total expenditure for the year, less any block grant payable, and is 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 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 the present expenditure targets, that will be a cash figure covering the whole of the financial year and 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 of course be necessary to build in some assumptions about the rate of local authority price increases. That will be done. Therefore the necessary inflation factor will already have been built into the calculations and it will not be necessary also to specify it in the legislation. I am wondering whether the noble Lord, Lord Beaumont of Whitley, is aware that this is so. If he agrees with me, perhaps the noble Lord will be prepared to withdraw his amendment.
Lord Beaumont of Whitley: But what happens, my Lords, if the basis of the assumption has changed in the interim? The figures are worked out for the whole year on a basic assumption, but by the second stage that basis may have changed, particularly in view of

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the fast increase in the rate of inflation which has occurred at certain periods during the past few years—not least during certain periods of the present Government's rule. The rate of inflation does change. The basis, therefore, changes. Surely, therefore, the remedy which the Government are producing should also change. I do not know whether the noble Lord would care, by leave of the House, to comment on what I believe to be a perfectly valid point.
Lord Bellwin: With the leave of the House, yes, my Lords. The noble Lord is of course right that the rate of inflation can change. It can go down as well as go up. I have served in situations where settlements have been made on one basis—I hope in good faith—and the rate of inflation has gone up. But recently we have, happily, been in a situation where the rate of inflation has gone down. However, the Government have not turned round and said that they want something back because the position has improved. I understand what the noble Lord has said. It would be astonishing if the rate of inflation were not to change at all. However, that does not alter the basic point that a reasonable figure has to be struck. As long as that is done, I believe that it works.
Baroness Birk: My Lords, before the noble Lord sits down, may I ask him a question? The noble Lord, Lord Beaumont of Whitley, quite rightly agreed that inflation can go down as well as go up. In that situation, there is even less reason, it seems to me, not to accept the amendment because, as the noble Lord has agreed, it works both ways. The amendment does not refer only to a rise in the rate of inflation. It would deal with a situation where the rate of inflation went either down or up. I should have thought that the Minister ought to consider having another look at this, for it is a small, harmless but very practical amendment.
Lord Lloyd of Kilgerran: My Lords, I intervene to point out that the Minister opened his remarks by saying that my noble friend's amendment was unnecessary. The Minister then gave as his reasons a recital of subsection (2)(a), (b) and (c) of Clause 4. He said that the Secretary of State will determine that maximum by reference to a number of variables which are set out in that subsection. The Minister paraphrased those variables. Is the Minister saying, in effect, that when paragraphs (a), (b) and (c) of subsection (2) are under consideration the Government will be taking into account the annual increase or decrease in the rate of inflation? If he is not saying that, his argument in support of the Government's position seems to be a complete non sequitur. I would ask the Minister at least to take back the amendment and reconsider the position.
Lord Bellwin: My Lords, we have to recognise that we are speaking here of cash planning. We are setting out in cash terms what the country can afford. It cannot be adjusted for subsequent inflation. It is the same basis as that on which we operate targets when we are dealing with that aspect of local government finance. The noble Baroness, Lady Birk, is right when she says that it is a very narrow point. I shall read
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carefully what has been said, in case something has been missed. I do not believe that we have missed anything, but if we have we shall look at it.
Lord Beaumont of Whitley: My Lords, may I, with the leave of the House, say that I believe we have won the basic logical argument on this point? However, the cash argument which the noble Lord the Minister produced—the difference made because of the fact that we are talking about cash limits—is one which I should like to study. The Minister has said that he, too, will look at the arguments. Therefore at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 21 not moved.]
6.58 p.m.
Baroness Birk Baroness Birk moved Amendment No. 22:
Page 5, line 17, leave out ("may relate to two or more authorities") and insert ("shall apply to one authority only").
The noble Baroness said: My Lords, in this clause we are dealing with the final stage of selective rate limitation. It is imperative to give to Parliament maximum control over rate limitation so as to ensure that parliamentary rather than executive discretion will replace local discretion. Yet this final step in rate limitation is the first time that the Government are obliged to seek explicit parliamentary approval for their actions.
In the earlier stages of rate limitation—we have been through this in various ways in Committee—there has been the occasional requirement for Parliament to receive a report. Those reports must contain the principles upon which local authorities have been designated. But those reports need not be debated. As we are now well aware in this context, principles can mean almost anything. I shall not labour that point, because it has been raised by many other people.
Today the Government have amended the Bill to give them even greater discretion in the use of principles. None of this can possibly be described as any check upon the actions of the executive. The Bill, as drafted, gives to the Government even more discretion in the redetermination process. An authority might be tempted to appeal to the Secretary of State for a higher expenditure limit. It is possible that a higher expenditure limit could be granted, but it is also possible that a lower limit would be imposed or that demands might be made on an authority regarding its future policies. This appeals system is loaded against any applicant authority and it would indeed be surprising if any authority did apply to the Secretary of State. Its fear would be rather like that of the person appealing in some cases to a court of criminal appeal, who is frightened that his sentence will be increased rather than lessened.
The point is that the provision for redetermination is in the Bill and it is not subject to parliamentary check. Nor is it a substitute for parliamentary control of the rate-fixing of individual authorities. It is what the Bill says that counts—not, with great respect, what the Minister or anyone else says may be the intentions of the Secretary of State or of any other person.
Currently, the Bill clearly gives Parliament only minimal control of the whole process. It is only at this
final stage that those parliamentary checks begin to have more teeth—although they are more in the nature of milk teeth at the moment than the second growth of teeth. The Government have said that control of this final stage of rate-capping is sufficient. Yet even if we were to agree with that proposition—which we do not—the control provided in that last part of the process is grossly insufficient. As matters stand, the Government will be able to wrap up all the rate-capped authorities in one report. We do not know how many there will be.
At an earlier stage, when we were discussing Part I of the Bill in Committee, the Government mentioned a figure of 12 to 20 authorities. But the Bill does not provide for these or any other limits, and all attempts to smoke the Government out were of no avail. The number of rate-capped authorities appearing in one report coming before Parliament could be 50 or 100. The House of Commons would have to approve or reject the report in its entirety. The individual circumstances of individual authorities would not be permitted to influence that decision.
The whole report would be voted through on a Whip and local democracy would be overturned in batches. This is not the way for the only elected tier of domestic government outside Parliament to be treated. Nor is it proper to attempt to treat Parliament like a rubber stamp. Parliament should be given the power to make decisions about individual authorities, and those individual authorities should be given the right to put their case via their Members of Parliament. It is only by having separate reports from each authority that this process will have any meaning.
In response to earlier doubts expressed in Committee, but in respect of a differently-drafted amendment, the Minister attempted to reassure me. He stated in a letter that he wrote to me:
"The House of Commons and not the Executive should finally determine the level of local tax in any local authority area where that is in dispute".
It is only where the level is in dispute that there will be a report. If the Minister believes that the House of Commons should finally determine the level of tax in any local authority area, that could be read as supporting the proposal I am making now; that there should be a report for every individual authority. When I received the Minister's letter I was reassured; he can reassure me even more tonight by accepting this amendment.
This amendment will provide for the rate in any one area to be fixed by the House of Commons. The Bill does not do that. The Bill makes mention of parliamentary sovereignty—or at least the Minister has done so. I am sometimes quite confused by what we are told by the Minister compared with what one finds in the Bill, because they are often quite different. The Bill requires Parliament to approve a list of rates in an indeterminate number of areas. It seems to us that this amendment would achieve what the Minister, erroneously in my view, assumed the Bill would achieve. We hope to see his acceptance of it.
Perhaps I should add that this is not a party political point. It is one that has the support of all the local authority associations. It is important to both local
556
democracy and parliamentary democracy. This legislation is extremely controversial and is the subject of views strongly held and expressed. I put it to the Government that they should be bending over backwards to make the Bill as democratic as it can be and enable Parliament—and, in this case, the House of Commons—both to be seen to be doing and actually to do what is correct, in order that each authority will have the right to have its report discussed—instead of having all the reports bundled up in one.
We are surely all aware that if that happens, proper attention will not be paid to the reports. It is no use saying that MPs can ask questions. If nobody wishes to question a report and it is acceptable, then it will be in order for it to be approved. But among all the different local authorities, there must be many different reasons why they have taken the actions they have. They must have different needs and different demands. It is only right that Members of Parliament should feel that they have had a fair crack at the legislative whip. I beg to move.
Lord Bellwin: My Lords, this amendment would specifically limit an order to one authority only. I recognise the argument that the disagreed rate limit order is the point in the procedure at which Parliament will have their principal opportunity to scruitinise the Government's proposals. But I believe that this can be done adequately within a composite order procedure. Although the Secretary of State will be looking at authorities' individual circumstances in considering applications for derogations, he will nevertheless have to take all his decisions on a basis that is generally consistent for all authorities. If two authorities had the same individual circumstances in some particular respect, the Secretary of State could hardly allow for that circumstance in different ways.
I am sure that Parliament will be concerned especially with scrutinising this aspect of the handling of the procedures. The other place will want to ensure that there has been fair and balanced treatment between authorities. It seems to me that this is the proper supervisory role of the other place, rather than the substitution of their individual judgments for those of the Secretary of State.
If I understood the noble Baroness correctly, she suggested it might be possible to have a single order but with perhaps even voting permitted separately on the constituent parts of the order—but the procedures of the other place do not provide for that. Orders must be approved or negated as a whole.
Baroness Birk: My Lords, if the Minister will allow me to intervene, I did not mean on the constituent parts of the order. Every report would be the subject of one particular order.
Lord Bellwin: In that case, my Lords, the noble Baroness was not making the point I suggested—I accept that. In any case, I am not convinced that a composite order procedure under Clause 4 would prevent proper discussion. That is certainly not the experience with the rate support grant report debates in another place. They cover a far larger number of authorities than the 12 to 20 authorities which could at most be involved under the selective scheme. And

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yet their individual views come through very clearly indeed. Often, debate is concerned with general principles as illustrated by the cases of particular authorities, rather than with the detailed circumstances of those authorities.
I should like to reassure all those who are worried about these orders being pushed through another place late or only after a short debate. If we face the situation of having 15 or 20 local authorities rate capped, and their rate limits coming before another place for approval, then there will be no intention by the Government to compress debate. I am sure that that does not arise at all.
I understand the fears of the noble Baroness and her great concern. Equally, I think that we are entitled to point to the real example of what happens with rate support grant settlement report debates and how they enable an individual authority's case to be made quite clearly and to be debated. I do not have the fears that the noble Baroness has. As she rightly says, this is not so much a party point as a point which we should all be concerned to get right. I think that what we propose does get it right, even if the end objectives may not be acceptable to everyone.
7.10 p.m.
Lord Kilmarnock: My Lords, may I suggest to the noble Lord, Lord Bellwin, that the Government are now in a logical difficulty on this point? On the one hand, throughout the passage of the Bill, they have told us that only a few authorities are likely to be designated. That is certainly an argument in favour of separate reports, so that the particular circumstances of particular authorities can be separately considered by Parliament. I think that the Government play into our hands, or into the arguments of the noble Baroness, under that heading.
The noble Lord then goes on to say that, if there are two authorities with similar problems, there is no reason why they should not be discussed together. That also flies in the face of his earlier contention that there should be a multiplicity of criteria available for the Government in order that they can take each local authority's special circumstances into account. That is the second logical fallacy in the Government's position.
The third logical fallacy in the Government's position is the following. The noble Lord is perfectly correct in saying that if you have several authorities on one report they can be discussed separately: those who are interested in one authority can talk of that authority, and those who are interested in another can talk of that other authority. But the important point to be borne in mind is that the vote on that particular report will be taken as a whole. Therefore, these shades of difference cannot be taken into account in the vote. As I hope I have made clear, there are three logical fallacies in the Government's case.
Lord Boyd-Carpenter: My Lords, I think that there is a certain lack of logic in the argument of the noble Lord, Lord Kilmarnock. After all, if we are envisaging debate in another place on these orders, there will really be only two points for debate—first, the general policy of rate capping, on which probably by then both
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Houses will have exhausted every conceivable argument, and, secondly, and perhaps more relevantly, the argument as to whether a particular local authority has been treated fairly in comparison with other local authorities.
If you have each one in a separate order, then in the case of the first order the figures for the others may not even be available. There will be no basis of comparison. It will not be possible to say, for example, that the GLC has been badly treated compared with South Yorkshire, or whatever example one may give, because one will not have the South Yorkshire figures for comparison. Indeed, looked at from the point of view of another place, where their rules of procedure are strict, I suppose if one were dealing with an individual order put down on an individual night, one might be ruled out of order for referring to a decision on another order because that order would not be before the House at the time.
Therefore, if one is to have an effective debate on whether the Secretary of State has treated particular authorities fairly within the ambit of the legislation—whether he has acted fairly, given the structure of the thing—surely one would want to have as many decisions as possible before one at the same time so that one could ask him, "Why on earth have you treated Little Puddleton so badly whereas Puddleton Parva has been treated more generously?" The Secretary of State would be able, if he had an answer, to give an answer.
If one is really concerned, as I know noble Lords opposite are—I think we all are—that when these cases come to another place they should be fairly and effectively debated, there is surely almost everything to be said for all of them, or at any rate a lot of them, being in the same order.
Lord Diamond: My Lords, it is so obvious to all of us here that the simple answer to the difficulties which have just been put before us is for the Government to arrange that all the statutory orders are before the respective Houses at one and the same time.
Baroness Birk: My Lords, I really do not find that the Minister's reply has been satisfactory at all. He compares rate capping to a discussion on the rate support grant. They are not at all the same thing. The rate support grant is something that the Government decide they will do out of their own public expenditure and from the way that they see things. Rate-capping is a strongly penal process which we have not seen before. That is why I am moving the amendment. It is even more important that on this the Government should be seen to be bending over to give the widest possible opportunity for each authority's report to be discussed individually. It is surely important not only that Members of Parliament should feel that, but that the individual authority should again feel that it has had a fair hearing. It cannot if there is to be this cluster of authorities. We do not even know how many there will be. A later amendment mentions the figure 50, but we do not know. We have not been told. The Government do not know. I do not think they are hiding a figure from us. But, as that is the case, each authority should be dealt with individually.

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The noble Lord, Lord Boyd-Carpenter, said that there would be no basis for comparison. With great respect, that is not really the point. First of all, the authorities will be known, because it will only be the authorities that are in dispute with the Government. If the authorities accept their rate-capping quietly, presumably everybody will be happy.
The point surely is that it is on what is done within a particular authority that the decision will be made as to whether that authority should be rate-capped. There is no advantage, and in fact great disadvantage, in being one of an enormous bunch, batch or whatever, rather than being discussed separately. This seems to me to be the way to start out. If it is found in the future that that is not necessary, it does not work properly or the authorities can be bunched together, that is a different thing, but we are embarking into what is partly the unknown. It is a matter about which authorities understandably have many fears. The Association of County Councils, the Association of District Councils and the Association of Metropolitan Authorities are all concerned and have joined together in their support for this amendment, and the Government should pay attention. The amendment does not fundamentally alter anything. It does not affect rate capping. It gives proper parliamentary control and sovereignty, instead of merely paying lip service. Therefore, I intend to press this amendment to a Division.
7.18 p.m.
On Question, Whether the said amendment (No. 22) shall be agreed to?
Their Lordships divided: Contents, 84; Not-Contents 90.

DIVISION NO. 3

CONTENTS

Ardwick, L.

Gallacher, L.

Attlee, E.

Graham of Edmonton, L. [Teller.]

Aylestone, L.

Beaumont of Whitley, L.

Grey, E.

Bernstein, L.

Grimond, L.

Beswick, L.

Hampton, L.

Birk, B.

Hanworth, V.

Boston of Faversham, L.

Harris of Greenwich, L.

Briginshaw, L.

Hatch of Lusby, L.

Brooks of Tremorfa, L.

Hooson, L.

Bruce of Donington, L.

Howie of Troon, L.

Caradon, L.

Irving of Dartford, L.

Carmichael of Kelvingrove, L.

Jacobson, L.

Chitnis, L.

Jacques, L.

Cledwyn of Penrhos, L.

Jeger, B.

Collison, L.

Jenkins of Putney, L.

David, B.

John-Mackie, L.

Dean of Beswick, L.

Kagan, L.

Diamond, L.

Kaldor, L.

Donaldson of Kingsbridge, L.

Kilmarnock, L.

Donnet of Balgay, L.

Kirkhill, L.

Elwyn-Jones, L.

Kirkwood, L.

Ennals, L.

Lloyd of Kilgerran, L.

Falkender, B.

Longford, E.

Falkland, V.

McIntosh of Haringey, L.

Fisher of Rednal, B.

McNair, L.

Fitt, L.

Meston, L.

Foot, L.

Molloy, L.

Gainsborough, E.

Mulley, L.

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Nicol, B.

Stone, L.

Oram, L.

Taylor of Blackburn, L.

Phillips, B.

Thurso, V.

Pitt of Hampstead, L.

Tordoff, L.

Ponsonby of Shulbrede, L.[Teller.]

Underhill, L.

Wallace of Coslany, L.

Raglan, L.

Wells-Pestell, L.

Rhodes, L.

Whaddon, L.

Rochester, L.

White, B.

Serota, B.

Wigoder, L.

Shackleton, L.

Winchilsea and Nottingham, E.

Stallard, L.

Stewart of Alvechurch, B.

Winstanley, L.

Stewart of Fulham, L.

Young of Dartington, L.

Stoddart of Swindon. L.

NOT-CONTENTS

Airey of Abingdon, B.

Hylton-Foster, B.

Auckland, L.

Inglewood, L.

Avon, E.

Ingrow, L.

Bathurst, E.

Kintore, E.

Belhaven and Stenton, L.

Kitchener, E.

Bellwin, L.

Lane-Fox, B.

Beloff, L.

Lindsey and Abingdon, E.

Belstead, L.

Long, V.

Bolton, L.

Loudoun, C.

Boston, L.

Lucas of Chilworth, L.

Boyd-Carpenter, L.

McAlpine of Moffat, L.

Brabazon of Tara, L.

McAlpine of West Green, L.

Brougham and Vaux, L.

Macleod of Borve, B.

Bruce-Gardyne, L.

Margadale, L.

Caccia, L.

Masham of Ilton, B.

Caithness, E.

Massereene and Ferrard, V.

Campbell of Croy, L.

Maude of Stratford-upon-Avon, L.

Carnegy of Lour, B.

Coleraine, L.

Middleton, L.

Colville of Culross, V.

Monson, L.

Colwyn, L.

Morris, L.

Constantine of Stanmore, L.

Mottistone, L.

Cork and Orrery, E.

Orkney, E.

Cox, B.

Peyton of Yeovil, L.

Cullen of Ashbourne, L.

Platt of Writtle, B.

Davidson, V.

Rankeillour, L.

Denham, L. [Teller.]

Reay, L.

Digby, L.

Renton, L.

Drumalbyn, L.

Rochdale, V.

Elton, L.

Rodney, L.

Faithfull, B.

Romney, E.

Ferrier, L.

Rugby, L.

Fortescue, E.

St. Davids, V.

Gisborough, L.

Saltoun, Ly.

Glanusk, L.

Skelmersdale, L.

Glenarthur, L.

Stamp, L.

Gowrie, E.

Swinfen, L.

Grantchester, L.

Swinton, E. [Teller.]

Gray of Contin, L.

Trenchard, V.

Gridley, L.

Trumpington, B.

Hailsham of Saint Marylebone, L.

Vaizey, L.

Vaux of Harrowden, L.

Hanson, L.

Waldegrave, E.

Henley, L.

Windlesham, L.

Hives, L.

Wise, L.

Holderness, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
7.27 p.m.
Lord Denham: My Lords, I think this is probably a convenient moment to break for the adjournment business. I beg to move that further consideration on Report be now adjourned until 8.30 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Co-operative Development Agency and Industrial Development Bill
Brought from the Commons; read a first time, and to be printed.

Cycle Tracks Bill
7.29 p.m.
Lord Henley: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Henley.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AYLESTONE in the Chair.]
Clause 2 [Prohibition of driving or parking on cycle tracks]:
Lord Gisborough Lord Gisborough moved Amendment No. 1:
Page 2, line 35, after ("any") insert ("land or").
The noble Lord said: Perhaps it would be right for me to take Amendments Nos. 1 and 2 together.
Amendment No. 2: Page 2, line 36, after ("being") insert ("land or").
Many of the footpaths across the country are also vehicle tracks, even though public access is only made available as a footpath. In these cases under this Bill these footpaths turned into cycleways will only be open to emergency in the fire service, the highway authority and statutory undertakings. There appears to be no provision for the owner of the land, the farmer or whatever, who already will use these tracks, to continue using them unless he is visiting premises. The word "premises" implies a building or a particular part of land. These tracks which are and will be used for management, keepering, forestry inspection, general land management, and so on, lead to no particular premises or particular part of any land, but to land in general. I feel therefore that to the word "premises" should be added the word "land", so that there can be no doubt that those who have work in the countryside, their employees, and also such people as ADAS representatives and people who, for some reason or other, have to go into the countryside along these tracks, and who have done so in the past, are able to continue to do so.
Lord Henley: I do not think that the amendment is necessary. Clause 8(2) of the Bill, dealing with interpretation, provides that:
"Except where the context otherwise requires any expression used in this Act which is also used in the 1980 Act"
that is the 1980 Highways Act
"has the same meaning as in that Act".
Section 329 of the Highways Act defines "premises" as including land and buildings. Therefore the point of my noble friend's amendment is already covered. I hope that in the light of this explanation he will be prepared to withdraw the amendment.
Lord Gisborough: On that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
Lord Gisborough Lord Gisborough moved Amendment No. 3:
Page 2, line 36, after second ("part") insert ("to which he has legal right of access and").
The noble Lord said: This amendment refers to subsection (4). It allows as a defence for someone going on to the land the fact that he is going to a certain place. This need not be an owner or a farmer. It may not even be a visitor. It may be someone driving on a cycle track in order to go somewhere to admire the view. The intention of the subsection is surely that the track should be restricted to bona fide vehicles, that is to say, those used by the owner of the premises, the farmer or someone involved in the management of the land. It could even he a caller, a salesman or anyone else who is a genuine visitor. I do not believe, however, that it is intended to give access, as it is written, to anyone who simply says that he wants to get from A to B without any reason and with no legal authority. The amendment is intended to ensure that someone who wants to use a cycle track has to have some legal right of access as a visitor or whatever. I beg to move.
Lord Henley: My noble friend's amendment has caused us to look again at the defence contained in Clause 2(4). I am grateful to him for making us look again at the drafting. Our examination has shown that the subsection could be improved. Any vehicular use of a cycle track to gain access to property must be based on a clear legal authority so to use the cycle track. To use a cycle track to gain access to property, even if it is the sole reasonable means of vehicular access, may involve unlawful use of the cycle track. Clearly, it would be wrong to condone, as the present drafting of the subsection appears to do, such unlawful use.
In addition, if a person had lawful authority at present to use the cycle track but had another means of vehicular access, the clause as drafted would take away that right without compensation. This would obviously be wrong. My noble friend's amendment, I am afraid, does not adequately cover these points, and I propose to bring forward a suitable amendment at Report stage. In the light of this, I hope that my noble friend will perhaps reconsider the need for his amendment.
Viscount Long: I should like to intervene for a moment. I agree with my noble friend Lord Henley, who is dealing so admirably with the Bill, that we must ensure that the basis for vehicular use of a cycle track rests on there being clear, lawful authority for that use. We shall therefore assist, if I may say so, my noble friend in the drafting of his amendment.
Lord Gisborough: I am grateful to my noble friend, and on that basis, ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3 [Conversion offootpaths into cycle tracks]:
Lord Gisborough Lord Gisborough moved Amendment No. 4:
Page 3, line 8, after ("footpath") insert (",whether fenced or unfenced.").
The noble Lord said: With the leave of the Committee, I would also like to discuss Amendment No. 6.
Amendment No. 6: Page 3, line 8, after ("land") insert ("or which leads only to such land").
These amendments, which are somewhat similar, concern the position where there is land farmed and where there is a fenced track running along agricultural land. That land may be owned or farmed by the same person on both sides, or maybe by different people. It is absolutely necessary that just as a farmer can stop a track being made into a cycle track going across his field, so he should have control over a track running between two hedges or fences through his land. This is particularly the case in Amendment No. 6 where the fenced track leads to a dead end. It could well happen that the track could come off a road and continue for a long way perhaps to a farmhouse, and that it could be a public footpath as well as a private road. The footpath could then well go off into open land, moorland or perhaps rough grazing.
While one would hope that the farmer would have control of the footpath over the rough grazing, he would have no control over the making of the footpath in the lane between two hedges. This is a slightly dangerous position. I therefore consider that something along the lines of the amendment to include the words "whether fenced or unfenced" is necessary and that the Bill should also underline the case where a fenced track leads to open land. I beg to move.
Lord Henley: This amendment and Amendment No. 6 deal with Clause 3(2). The clause was inserted in another place following discussions between my honourable friend Mr. Cecil Franks and both the NFU and the CLA. It is intended to provide protection for agricultural activities when footpaths cross agricultural land. The term "agricultural land" is defined. My noble friend talks about the case where a footpath goes adjacent to a field between two hedges. That would not be covered by agricultural land and would therefore be dealt with under the ordinary procedure; in other words, the landowner himself would not have the total veto that he has if it crosses right across the middle of agricultural land. But he would have exactly the same power as anyone else to object and the matter could then be dealt with at a public inquiry. In view of that, I think it will be found that the owner of that agricultural land will be perfectly well protected—in fact, probably better protected than he is at the moment.
I hope that when the Secretary of State comes to make regulations under subsection (4) of this clause he will insist that owners of land and owners of adjacent land will be notified of any proposed cycle track. In view of this, I hope my noble friend will be prepared to withdraw these two amendments.
Lord Gisborough: I am grateful to my noble friend for that explanation. I do not think I am very satisfied, but equally I do not think there is a case for pressing the amendment. Therefore, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
7.41 p.m.
Lord Gisborough Lord Gisborough moved Amendment No. 5:
Page 3, line 8, after ("agricultural") insert (", forestry or moor").
The noble Lord said: This is a much more important amendment. The farmer or landowner has considerable control over the putting in of a cycle track on a path over agricultural land; obviously that is practical and necessary. But apparently this does not apply to forestry or moorland. There are many who feel that once one gets into moorland, one gets into the wild areas that people usually think are public property and are looked after totally by God. In fact, both forestry and moorland are looked after by managers. Forestry requires an enormous amount of capital and work throughout the life of the forest, and moorland requires an enormous amount of keepering and burning and general management for the sheep and the grouse.
Without that management, the game and other wildlife would disappear. The heather would cease to flower because it would become too big. The management of moorland and the amount of work needed on it are very considerable. Because technically it is not agricultural land, there would be less control by the owner on the conversion of a footpath to a cycle track. This goes back to the previous amendment where one has the fenced road perhaps going up to a national park and then a footpath going across the open land which could be made into a cycle track.
This needs more control. Most cyclists are respectable and responsible people, like everybody else, but it only needs a small percentage to be irresponsible. These are the chaps who will always be a problem. In some cases it would be unacceptable for the managers of moorland and forestry not to have the same amount of control as the farmer over the conversion of the footpaths to cycle tracks. I beg to move this amendment.
Lord Underhill: I am a little worried about this amendment. As I am sure all noble Lords know there is a vast number of footpaths going through forestry land and also over moorlands. According to subsection (2), a highway authority cannot make an order if a person who has got a legal interest in the land has not given consent in writing. I wonder how far this will start to infringe on the Bill dealing with access to the countryside and access to the mountains. Many moorlands are mountains.
Therefore, I am rather worried, unless there is something in the Bill—I cannot see it—whereby if a person who has a legal interest does not give consent there should be opportunity to appeal beyond that. Later in the Bill there is provision for an iquiry to be held where a person seeks to object to an order. Surely there ought to be some opportunity for appeal if a person with a legal interest in the land refuses to agree to the conversion of a footpath to a cycle track. That will become more of a problem if it is extended to forestry land and to moorland.
Lord Henley: I think the noble Lord is worrying too much. It is only the owner of agricultural land who has a right to object to the conversion of a footpath to a cycle track. It can still continue to be a footpath.

565
whatever his objections. At the moment this does not affect moorlands. I would rather not have this amendment.
Lord Underhill: My reading of the amendment is that it refers to a footpath which crosses any agricultural land, forestry or moorland. So it will affect moorland if the amendment is carried.
Lord Henley: If the amendment is carried. I hope it will not be. My noble friend's amendment seeks to extend to forestry and moorland this protection which, as I said, at the moment is only for agricultural land. We feel this is a very significant extension of that protection. I think it is very unlikely that there will be many cases of footpath conversions on forestry or moorland. If there are, the introduction of cyclists will be unlikely to cause any significant extra disruption in the uses of footpaths. It may also be rather difficult to establish exactly what consititutes forestry and moorland. The subsection defines agricultural land, which is fairly easy to define.
If proposals are made to convert footpaths which cross forestry or moorlands—or, for that matter, any other footpath—objections can be made in the usual way. These will be considered by the Secretary of State and there will be the usual inquiry procedure. So, as always, there are the same safeguards. It is felt that agricultural land ought to have special protection. I might add on a technical point that in any event my noble friend's amendment cannot be accepted in its present form as it defines the term "agricultural land", which is defined later in the subsection. Therefore, the whole thing would have to be redrafted.
7.48 p.m.
Viscount Long: I should like to come in at this point because there is some difficulty about who is going over whose land and what path it is. The subsection as drafted seeks to give an additional protection where a footpath crosses agricultural land, that is, crosses farmers' fields and could disrupt agricultural activites. If one finds a path going from left to right across a field and one deals with it that way, one will find that it is disruptive to a farmer. Therefore, the Government fully accept that the additional protection is needed for agricultural activities.
There are many rural footpaths which do not cross agricultural land. There may be circumstances where in the interests of safety a local highway authority wishes to convert such footpaths to cycle tracks. We consider that the authority should be able to do this, subject, of course, to a clear right of objection when an order is made. However, we do not consider that the protection given by subsection (2) should be extended to forestry and moorland. There are problems of definition which may not easily be overcome. If I may say so, the activities undertaken on such land tend to be more robust and less sensitive to disruption than do many agricultural activities. Again, the right to object to any conversion remains and, having considered all the circumstances, we agree with my noble friend that this protection is adequate.
Nor do we consider that there is a need to provide specific protection for footpaths leading only to agricultural land. Therefore, we cannot envisage that
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such footpaths will be candidates for conversion. The right to object to conversions should suffice in the unlikely event that any particular case arises.
My noble friend is quite right in saying that the drafting is not quite adequate at the moment. I would ask my noble kinsman to have another look at this matter. We would willingly help him in strengthening the Bill in this way, if he so wishes.
Lord Gisborough: I am grateful to my noble friends. Obviously I must withdraw this particular amendment, but I should like to consider it further and see whether I should come back with it at a later stage. On that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
Lord Gisborough Lord Gisborough moved Amendment No. 7:
Page 4, line 29, at end insert ("and order such works or advertisements to be made as it thinks fit to inform cyclists of the quashing of the order.").
The noble Lord said: This amendment relates to the situation where an authority announces, as it may well do, that a certain track is to be made into a cycle track. One can visualise that immediately thereafter cyclists will start to use it. Then there may be an objection and the court may suspend the order. In that case the cyclists will have become used to using the track and although the court may have suspended the order, and although the local authority may have ceased to claim it to be a cycle track, nevertheless it will be extremely difficult to stop cyclists using that track or to inform them all that the track is no longer a cycle track.
Therefore, the amendment is designed so that when such an order is made the court may, if it thinks fit, order that the council undertakes such advertisements and works as may be thought fit to ensure that all cyclists are aware that they can no longer use the track. I beg to move.
Lord Henley: My noble friend's seventh amendment proposes to amend Clause 3(7). It is novel in that it seeks to give to the High Court powers to specify advertisements and works to be undertaken to give effect to its quashing of an order. I know of no other circumstances in which such powers are given to the court. If the court quashes an order, the footpath concerned will remain a footpath, and it is the local highway authority 's duty to ensure that the rights of those using the footpath are protected. It would be an exceptional move to give the High Court power to take action, either by insisting on advertisements or on the undertaking of specified works, to enforce one of its own decisions.
Responsibility for the protection of footpaths rests, and should remain with the local highway authority. If that authority fails in that, it could be held to be in breach of its statutory duty under Section 130 of the Highways Act 1980. I should also say that it may reasonably be expected that challenges in the High Court will receive a certain amount of local publicity and therefore people should get to know that the original order has been quashed. In the light of what I have said, I would ask my noble friend to withdraw his amendment.
Lord Brougham and Vaux: I should like to ask my noble friend a question. My noble friend says that it is the responsibility of the local highway authority. Do I take it, therefore, that the cycle tracks will have little discs stating that cycling is permitted, and that if such tracks are no longer permitted to be used by cyclists, those discs will be removed in the same way as they are in the parks in London?
Lord Henley: Yes, obviously there will be some sign indicating that every cycle track is a cycle track. If it ceases to be a cycle track, there will no longer be any signs stating that it is a cycle track, and it will revert to being a footpath.
Lord Brougham and Vaux: In those circumstances I think that my noble friend Lord Gisborough should withdraw his amendment.
Lord Gisborough: My noble friend has talked about the court taking action. However, that was not part of the amendment. The idea was that the court should order the local authority to take action. Whether or not it will work remains to be seen, but I should be very surprised if it did. However, there is the resort to Section 130 and I think that one will just have to hope that that works. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Clause 4 [Provision of barriers in cycle tracks, etc.]:
7.56 p.m.
Lord Beaumont of Whitley Lord Beaumont of Whitley moved Amendment No. 8:
Page 5, line 17, leave out from ("authority") to ("necessary") in line 19 and insert ("shall, in the case of any cycle track which is adjacent to a footpath or foot way, provide and maintain such barriers as are").
The noble Lord said: It may be for the convenience of your Lordships' Committee to consider Amendments No. 8 and 9 together, Amendment No. 9 being, to a certain extent, consequential upon Amendment No. 8.
Amendment No. 9: Page 5, line 22, leave out subsection (3).
We now turn to the point which I raised on Second Reading about the protection of the blind and the visually handicapped. Clause 4, which we are considering concerns the protection of various classes of people, beginning with subsection (1) which deals with the safeguarding of the people actually using the cycle track. Subsection (2), which these amendments seek to alter, deals with the protection of others with whom they may be brought into contact.
The various societies and authorities which represent the blind and the visually handicapped are considerably perturbed about this Bill as it stands at present. There have, indeed, been conversations with the Government about the necessary steps which should be taken and the necessary precautions which should be introduced for the safeguarding of the visually handicapped. The Government are being extremely helpful in this matter and are trying to do their best.
But we think that the precautions in this Bill should be reinforced. In that respect I address myself equally to the proponents of the Bill—the noble Lord, Lord Henley, and those others who have put this forward—and to the Government themselves. Therefore, these amendments have the following effect. Where the original Bill says that:
"A highway authority may…provide and maintain such works as they think necessary for the purpose of separating, in the interests of safety, persons using the cycle track from those using the footpath or footway"
the amendments state "shall" instead of "may", and,
"such barriers as are necessary"
instead of,
"such works as they think necessary".
Therefore, the amendments make it a matter of quite definite fact and obligation on the part of the local authorities to provide for the safety of pedestrians, in particular those who are in any way handicapped.
It does not seem to me that there is any reason at all—I may be wrong about this—why those who are putting forward this Bill should object to these particular amendments. But I think it is a matter for the Government to consider because we have a problem at the moment where, due to the general state of the economy, the local authorities are under very considerable financial pressure as to what they may or may not do. In fact, we have been discussing that throughout the afternoon and no doubt we shall be discussing it for the rest of the evening. In this situation there is a very real danger that if this is merely permissive, the precautions which are taken may not be sufficient.
For instance, at various stages in discussing this Bill there has been talk of the painting in of white lines to separate cycle paths from pedestrian paths. White lines are a perfectly good way of alerting cyclists to the area to which they must keep; they are not nearly such a good way of alerting the blind to the area to which they should keep. It is absolutely necessary to ensure that there are physical barriers of one kind or another—perhaps the textured barriers which are now being tried in various parts of the country, including, for instance, the textured surfaces by the pedestrian crossing not far from your Lordships' House.
All sorts of experiments are taking place, and I am not saying that we can lay down in any detail what particular form these barriers should take. But that there should be barriers, that they should definitely be there and that they should conform to a standard which not only the local authorities think is adequate but which any reasonable person thinks is adequate, is a step which is urgently necessary. I beg to move.
Lord Brougham and Vaux: I have a great deal of sympathy with what the noble Lord, Lord Beaumont of Whitley, has said. He has said everything that has been going through my mind as a cyclist, so I await the comments of my noble friend on the arguments put forward by the noble Lord.
Lord Henley: In the drafting and consideration of this Bill the concerns of groups representing the blind and the partially sighted have received our closest consideration. My honourable friend Mr. Cecil Franks

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discussed the provisions in the Bill with the Royal National Institute for the Blind, and my honourable friend the Minister of State for Transport has discussed the Bill's provisions with the Joint Committee on the Mobility of Blind and Partially Sighted People. Noble Lords will be aware that her department has undertaken a comprehensive review of the advice that it issues to highway authorities on cyclists' use of pedestrian-only facilities, and my noble friend on the Front Bench might possibly want to comment on that.
The Bill seeks to improve the safety and convenience of cyclists, but not at the expense of others. Throughout the Bill we have sought to ensure that it is balanced. Indeed, we consider that in many important respects the Bill improves the position of blind and partially sighted people. If they or any other persons object to a footpath conversion, under Clause 3 the decision on that conversion must be made by the Secretary of State following the usual public inquiry procedure.
In drafting Clause 4 we have also sought to improve the position for blind and partially sighted people and other pedestrians by giving powers to highway authorities to construct any works that they consider necessary to separate a cycle track from an adjacent footpath or footway. We all accept that the best way of improving conditions for and the safety of cyclists is on the road itself. But this may not always be possible and it may be necessary to consider allowing cyclists to use facilities previously reserved for pedestrians. A wide variety of circumstances may arise where this may need to be considered, and it must always be for sound safety reasons, and must always increase the safety of cyclists.
But in every case it will be necessary to balance the safety benefit to cyclists against the risk of endangering or, for that matter, inconveniencing pedestrians. Each proposed conversion will be different. We can establish guidelines but we cannot and should not seek to establish absolutes. The particular requirements of each location must be determined following careful survey and consultation, and highway authorities must, therefore, be able to respond flexibly to a range of different circumstances and different requirements as the situation demands.
To require them to provide barriers, as this amendment would do, and never to alter or remove them whatever the circumstances, eliminates flexibility. It may also eliminate from consideration many locations where a positive safety benefit can be made for cyclists without putting the safety or security of others at risk.
These amendments seem to strike at the very balance that we have sought to provide in the Bill. They impose inflexibility when the Bill seeks to provide a balanced and cautious response to the safety problems and risks which cyclists face daily on our roads. I fully understand the concern of the noble Lord, Lord Beaumont, but I cannot agree to accept his amendments.
Viscount Long: Perhaps I could try to help the noble Lord, Lord Beaumont. The Government are very serious about this Bill as it affects the safety of cyclists, the blind and the partially sighted. We are trying to
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bring a very serious piece of legislation together as soon as possible. I do not say that we are riding roughshod over the Bill, but we want to get it through Parliament in order to help the local authorities which are in need of help, the landowners and the owners of adjacent land. Therefore, we are working to an end, and that is to get the Bill properly through Parliament.
The amendments of the noble Lord, Lord Beaumont, have been requested and drafted by the National Federation of the Blind. From what I have to say to the noble Lord in the next few moments, he will realise that the Government have not worked alone on this subject, and nor could they. They have had to take the best possible advice. My noble friend Lord Henley has worked very hard trying to help this legislation through Parliament, as has also my noble kinsman.
The amendment seeks to place a duty on highway authorities to erect (and this is the amendment to subsection (2)) and maintain in perpetuity (which is the amendment to subsection (3)) barriers whenever a cycle track is alongside a footpath or footway. The amendment to subsection (3) would also mean that harriers provided on any cycle track under subsection (1), whether or not it is adjacent to a footpath, could not be altered or removed by the highway authority. The amendments conflict with the existing statutory framework, which is aimed at providing highway authorities with discretion. I failed to tell the noble Lord just now that the highway authorities are very much involved in this through the 1980 Act, and so on.
The amendment's requirement for separation by barrier runs contrary to the advice that the department proposes to issue on shared pedestrian-cycle facilities. The department considers that while segregation by barrier or kerb or other physical means would be best, white-line separation and unsegregated sharing as safety measures of last resort must remain available to highway authorities. White-line separation has operated satisfactorily in practice.
With the support of the Joint Committee on the Mobility of Blind and Partially Sighted People, on which the National Federation of the Blind are represented—and the noble Lord knows this well—the Transport and Road Research Laboratory is currently undertaking research on forms of tactile surfaces which might assist blind and partially sighted people using shared facilities. I think I can refer to the fact that not far away in Westminster there is a tactile surface. I mention to the noble Lord at this moment the Road Research Laboratory. That is where the expertise is to come from as to what is to be the best and safest measure for the blind and the partially blind.
The department's proposed advice that shared pedestrian and cycle facilities should be considered when there is no other way of overcoming the problems that cyclists face on the carriageway, together with the right to object to footpath conversions, and for such objections to be considered by the Secretary of State, should give adequate protection against ill-conceived footpath conversions, which I think the noble Lord, as well as other noble Lords, are worried about. Highway authorities must, in any event, be allowed to retain flexibility in the

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types of protection they can provide based on their assessment, following careful survey and consultation, of what is needed at any particular location. One geographical area is obviously going to be different from another in terms of the safety area.
The Government are aware of the concern about certain forms of shared pedestrian and cycle use felt by blind and partially sighted people. It was because of that concern that the Department of Transport undertook a comprehensive review of its advice on shared use. Indeed, perhaps I may tell the noble Lord—I know that he said he has not yet had his supper, and nor have I, but I like to give him a carrot to eat on—that tomorrow the department, with the National Federation of the Blind, is organising a seminar for Pavement Day to discuss the problems faced by visually handicapped people on pavements.
The department's review included issue of a consultation paper and meetings with members of the Joint Committee on the Mobility of Blind and Partially Sighted People. Almost all those who responded to the consultation paper accepted that, in appropriate circumstances and on a limited basis, shared use could make a valuable contribution to the safety of cyclists. My honourable friend the Minister of State for Transport has now agreed the revised advice that will shortly be issued by her department.
There is no intention of allowing cyclists general use of footpaths or footways. The advice starts from the basis that shared pedestrian and cycle use is a cycle safety measure of last resort to be considered only when there is no other way of overcoming the problems cyclists face on the road—and they are increasing. Cyclists face dangers on our roads. Unfortunately and tragically, the number of accidents involving cyclists shows a steady increase. The honourable lady's department is examining ways of helping cyclists on roads through its programme of innovatory cycle schemes and cycle route research. The department's safety campaigns seek to improve cyclists' safety generally. There will, however, always be circumstances where shared use will need to be considered. Shared use should be proposed only after full survey and consultation.
The department's advice will place particular emphasis on the need for highway authorities to obtain the views of blind and partially sighted people, as well as other likely users of the facility. The department's advice will clearly state that where cycle tracks run adjacent to footpaths or footways, segregation by barrier or kerb is best. Where barriers or kerbs cannot be provided and there is a clear cycle safety problem to be overcome, then white line separation or unsegregated sharing may need to be considered.
Lord Gisborough: Do I understand from what my noble friend is saying that cycle ways are to be used strictly for cyclists to get from A to B and not to get them into the countryside on recreational cycle tracks? Does my noble friend mean that categorically?
Viscount Long: I think that my noble kinsman has it two ways. First, there are already tracks that go into what he knows as the forest, for recreation, and there
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are those tracks, which I am trying to define at the moment, which are for safety, for helping cyclists to get off the main roads for more safety.
The advice will also clearly state that white line or unsegregated sharing will often be unacceptable if the route is used by elderly—and this is another point that has to be looked into—blind, partially sighted, or physically handicapped people. White line separation has been carefully monitored and found to work satisfactorily. However, we recognise that white line separation offers no guidance to blind and partially sighted people, and with the support of the Joint Committee on the Mobility of Blind and Partially Sighted People the Transport and Road Research Laboratory is undertaking research on the use of tactile surfaces and central markings or humps to assist blind people using shared facilities. This work is at an early stage and full site testing will be needed to assess effectiveness. Subsection (2) of this clause, as currently drafted, is intended to give highway authorities powers to install such tactile surfaces or humps.
We consider it essential that highway authorities should be able to have flexibility in the way they separate cycle tracks from adjacent footways and footpaths. We do not consider that it is right to insist that barriers be provided whatever the circumstances. Other forms of physical separation may be equally effective. The form separation can take can be decided only after full consideration of local circumstances and after consultation with interested parties.
Another essential when former pedestrian-only facilities are made available for use by cyclists is that they should be closely monitored. If problems emerge with any form of separation, highway authorities should have the ability to alter it. Subsection (3) is essential.
I have outlined in general terms our policy objections to these amendments. May I now look at the effect of the amendments in more detail. I apologise for my long brief, but it is essential that we try to get it right for all those concerned. The provision of a complete length of barrier may operate against the effectiveness of the cycle track, footpath or footway in that it would bar all access across the adjacent way. The pedestrian, including the blind or disabled pedestrian, could not cross the cycle track from a footway in order to cross the carriageway. He may not cross the adjacent footpath to gain access to premises. The cyclist could not dismount and cross the adjacent footway to reach the shops. All these examples show that the amendment is too restrictive and inflexible. I see that the noble Lord shakes his head, but he is not giving enough flexibility to it.
Lord Beaumont of Whitley: Both the noble Viscount and the noble Lord, Lord Henley, seem to have missed the point. If these amendments are carried, it does not mean that local authorities must put in a barrier.
Lord Henley: Yes, it does.
Lord Beaumont of Whitley: No, it does not. It means that they should put in a barrier if it is necessary for safety. That is what it says, and that is what it means. It does not mean that they have to put in a

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barrier. Both the noble Lord, Lord Henley, and the noble Viscount the Minister have been arguing as though the amendment made it compulsory for the highway authorities to put in a barrier whether or not it is necessary.
Viscount Long: What we are trying to do is to give strength to the elbow of the local authority, whether they want to do it or not. At the moment they cannot do it, or if they can do it, they have not the exact power to do it. Therefore, I think that we must go on as we are in this particular instance. I do not think we have lost the point. I think it is essential that we look at the Highway Code as well.
The mendment also removes the power for highway authorities to provide works to segregate a cycle track from an adjacent footpath or footway if they are works of a kind that fall short of being a barrier. It therefore takes away the power to implement the results of the work being undertaken by the Transport and Road Research Laboratory; and they are the ones who at this very moment are seeking to find the best ways of helping the blind and the partially blind. We must not restrict them in any way at all.
The amendment will also add considerably to the costs incurred by local authorities by imposing an obligation to put up barriers where none now exist even if existing arrangements can be shown to have been working effectively. The amendments conflict with the existing safety provisions in Section 66 of the Highways Act 1980, where highway authorities exercise their own judgment in the use of discretionary powers for the provision of guard rails and so on.
My noble friend Lord Henley has referred to the balance in the Bill. He pointed to additional protection given to those who are worried about the principle and practice of shared use by the right of objection given when footpaths are proposed for conversion.
The needs of blind and partially sighted people have been borne in mind in the drafting of this Bill. In the Bill as it stands we consider that we have struck the right balance—and my noble friend said this a moment ago—between seeking to increase the safety and convenience of cyclists and protecting the interests of others. I therefore ask that the noble Lord, Lord Beaumont, withdraws his amendment, because either I do not see that he has allowed himself enough flexibility in his amendment to allow others such as the research laboratories to carry out the research, or he is tying down the local authority too much.
Lord Beaumont of Whitley: My Lords, the noble Lord the Minister has produced a very detailed explanation of what is being done and what is planned, and for that I thank him very much. I asked for it and I wanted it and it is something which I will go away and study. There were points in what he said that gave me some comfort. I am particularly interested and will go away and study what he was saying about the rights of appeal. But the main arguments which he produced, and which the noble Lord, Lord Henley, produced, were based, as I said in my intervention, on a complete misunderstanding of the amendments and went on for a long time dealing with a non-existent bogey. If my amendments were agreed to, subsection (2) would read:
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"A highway authority shall, in the case of any cycle track which is adjacent to a footpath or footway, provide and maintain Lich barriers as are necessary for the purpose of separating, in the interests of safety, persons using the cycletrack from those using the footpath or footway".
There is no question about raising barriers if they are not necessary. Quite clearly they do not. There is no question of having to put up barriers which run for miles and miles and stop the poor blind moving across the cycleway to get to the road. There is nothing about that at all. It is merely to make the question as to whether it is safe a matter which is judicable, which is juridical, which is not just dependent upon what the local authorities happen to think when they are tempted—as they must be, poor things—by the desire to save money. The local authorities will have most of the freedoms except for the freedom to disregard the rules of safety.
I do not think that most of what I heard, and certainly the arguments which the noble Lord, Lord Henley, put forward in relation to these amendments were satisfactory, though I pay tribute to him for bringing forth this Bill, which I think is a very good Bill, and I congratulate him. There may be sufficient embedded among the misunderstanding of the case produced by the Government to satisfy me, but of that I am not at all sure. I will go away and study it, and I will consult. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 9 not moved.]
Clause 4 agreed to.
Clause 5 [Compensation]:
On Question, Whether Clause 5 shall stand part of the Bill?
Baroness Nicol: My Lords, very briefly, I have two queries on the compensation suggested in Clause 5. I appreciate that I have not given notice of this and I am quite prepared to wait for the answer, but I feel that I must put the questions now.
In subsection (1) there are the words, "where any person suffers damage". May I be told whether that damage refers to material damage or physical damage, or whether it would refer, for example, in an urban situation, to a case where a trader has a cycle path going past his delivery entrance and the vans will, now according to the rest of the Bill, have to park elsewhere while being unloaded? Could the trader in those circumstances claim damages for delay or inconvenience? In other words, I should like clarification of the word "damage" in that case. In subsection (2) there are the words,
"Where…any person suffers damage by the depreciation in value of any interest in land".
If, perhaps owing to a situation on the edge of town where the land in question was of little value at the time when the cycle track was first put in, the land gained in value as a result of housing or other development along the edge of it, would the owner be entitled to claim damages retrospectively for depreciation; or will there be a time limit on the point at which he can claim damages?

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Those are my two questions. I shall understand if the answers are not forthcoming but, if they are not available, I wonder whether I may have them before the next stage of the Bill so that an amendment may be produced.
Lord Henley: My Lords, as I understand it, "damage" under clause 5(1) concerns damage by reason of the execution of the works. In other words, it is the actual creation of the works. I presume— I am open to be corrected and will inform the noble Baroness when I know— that that would cover any financial loss that one could put against the execution of the works.
With regard to her query about damage under subsection (2), I am not sure if I can help the noble Baroness at the moment. May I get in touch with her later before the next stage?
Viscount Long: I did hear the noble Baroness's speech at Second Reading. It is considered at this stage of the Bill that it is unlikely there will be many claims under the new procedures or that substantial sums will be involved. Under the clause as drafted, disputes go to the Land Tribunal, and Section 307 of the Highways Act 1980 is applied. None of the sections of the Highways Act to which Section 307 is applied place time limits, which is what I think the noble Baroness was asking about in relation to the submission of compensation claims, and it would be considered appropriate to err in favour of a possible claim rather than specify a time limit in respect of claims made under Clause 5. We have been advised there would be no great difficulty in assessing compensation in case of retrospective claims. I wonder whether that helps the noble Baroness.
Baroness Nicol: Yes; I thank the noble Viscount. It is not a complete answer, but it goes some way and I will investigate a little more before the next stage.
Clause 5 agreed to.
Remaining clauses agreed to.
House resumed: Bill reported without amendment.

Rates Bill
8.32 p.m.
Consideration of amendments on Report resumed.
[Amendment No. 23 not moved.]
Clause 9 [Power to introduce general control]:
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 24:
Page 8, line 14, at end insert—
("the date to be specified under subsection (1) above shall not be less than three years from the date of operation of an Order laid by the Secretary of State pursuant to section 2(1) of this Act").
The noble Lord said: My Lords, I move this amendment on behalf of my noble friend, Lord Evans of Claughton, who is unable to be here tonight. This is similar to an amendment which was moved at Committee stage by the noble Lord, Lord Sandford. It
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must be a compliment to him that my noble friends have chosen to take it up and to run it again at stage of the Bill.
The important point is that here we move on to Part II of the Bill. The object of the amendment is clear. It is to provide what one might call a cooling-off period of three years preceding the bringing into force of the general powers after the selective provisions of Part I have been introduced. This would give the Government the opportunity to discover whether the selective scheme, on which they have staked so much, would work.
The Secretary of State has himself agreed that during the past three years the cumulative effect of the reduction of a proportion of the RSG and the introduction of targets and penalties have brought local authority spending more into line with Government and public spending guidelines. He has argued that such reductions could not be achieved overnight: therefore it would be unrealistic for the Secretary of State to expect the provisions of Part I to operate to secure the reductions required by him in. say, one year. Indeed, the statements by Ministers have made it clear that they would not seek to reduce the spending of any one authority by more than 5 per cent. in any one year, and that is reflected in the target methodology which no one authority is expected to reduce its spending by more than about 6 per cent. in one year.
In short this amendment gives Part I, the selective scheme, time to operate. It will be a matter of time before we see whether it works as the Government intend. As I have said we also hope that this amendment will provide a cooling-off period so that the Government can contemplate and assess the results that they have achieved as a consequence of Part I.
One other point is that there still remains no definition in the Bill—we have discussed this under earlier amendments this evening— or in the notes on clauses or in ministerial statements on the criteria which will be used to decide when it will be necessary to introduce general powers. On all these grounds we feel that a delay in their introduction is desirable. and I beg to move.
Viscount Ridley: My Lords, I should like to support the amendment, to which I have added my name on behalf of the Association of County Councils. My noble kinsman Lord Kilmarnock has said everything that needs to be said; and, indeed, it was brought up at Committee stage before your Lordships. But I should like to crave your Lordships' indulgence by referring briefly to the debate which we had on Clause 9 at Committee stage because this is the first opportunity to do so at this stage of the Bill. During the debate on Clause 9 stand part, my noble friend Lord Chelwood— who, unfortunately, owing to family problems, is not able to be here tonight—referred in his speech to many things in opposing the Bill. When he was answered by my noble friend Lord Bellwin the impression was given that the Association of County Councils had refused offers of consultation on certain aspects of the Bill before it came before this House. I should have intervened at that stage to deny this

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allegation as the president of the association. Indeed, I should have liked to do so, but I was not sure of my facts; I was not likely to have been involved in any such consultations, and I do not think quickly enough when I am here.
However, subsequent research and a good deal of correspondence among all concerned leads me to think that there has been a genuine and very simple misunderstanding which I think should be put right on the record and the impression should be corrected. The Association of County Councils has always been ready to consult on local government matters, and always will be. No offer to do so was refused or ever will be in the future. I want to make this quite clear beyond all doubt.
I am very well aware that my noble friend Lord Bellwin was in fact referring to an invitation to discuss technical matters at officer level, which all three associations refused as being inappropriate on the date suggested last September. This is a quite different matter. I am also quite certain that my noble friend Lord Bellwin would agree that this is a misunderstanding which can be laid to rest here and now. I know that were my noble friend Lord Chelwood here he would not wish to pursue the matter any further. His statement was in effect largely, if not entirely, accurate and I think we owe it to him to put this right.
I know that my noble friend Lord Bellwin in dealing with all these matters is extremely courteous and diligent and all his responses to all these problems are greatly valued by all involved. I know he would not refuse any consultation which was necessary, nor has he ever done so over five long years of very hard work in the interests of local government and of this House, nor would the ACC ever wish it to be said that they had refused to talk to him.
This may be the last word I shall say on this matter, I would only add that if when all such legislation came before us it were possible for more talks to be held between the Government and their genuine friends it is possible that not so much legislation would be put before us. I hope that we can put this matter straight. I wish to support the amendment.
Lord Bellwin: My Lords, if I may, I begin by responding to my noble friend Lord Ridley on the latter point that he makes. I am glad to have the opportunity of saying exactly what happened over the question of consultation. The Government have always been extremely anxious to proceed in respect of its local government policies in consultation with local government and with the local authority associations. That is usually what that means. To that end, I wrote to each of the associations on 12th September, 1983, offering a meeting at official level to discuss without commitment the practical operational implications of our policy proposals on rate limitations. This offer, of course, was against the background that at that time we were in the middle of a large consultation exercise on our Rates White Paper and we were awaiting the comments of the association on the basic policy.
The response to the offer of working level discussions was immediate but negative. However, I think it fair to say—and this is a point that I did not
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mention at the Committee stage— that the ACC response included the sentence:
"I imagine that we will be having further discussions with you and your colleagues after you have considered our response to the White Paper proposals".
It is against that background that, when the noble Lord, Lord Chelwood, suggested that there had been no consultation with the ACC, I responded by saying that the opportunity for consultation had been offered but had been turned down.
May I say that I appreciate very much the way in which my noble friend Lord Ridley brings up his point tonight. I say unhesitatingly that in the times of debate when one is first in consultation and when there is a broad area of discussion and not discussion— if I can put it that way— it is very difficult to say what has happened and what has not happened. But certainly no wrong implication was intended. If the ACC feel that they are unhappy about it, I would not want that to be the case, so I would readily concede the point to them in the hope that they, too, would understand how this matter came about in the way that it did. I hope that my noble friend Lord Ridley will feel that that covers the point properly. He is right that the record ought to be put straight.
So far as this amendment goes, it was moved during Committee. It was said then to be a probing amendment, and it produced a very full debate during which I gave a brief description of the sort of circumstances which might give rise to our need to invoke the general powers. I said then, and I make no apology for saying again, that it is our sincere hope that these powers never have to be used. One of the reasons I am optimistic on this score is because of the deterrent effect that the very existence of the general power will have on local authorities. But that deterrent effect will be lost for three years if this amendment is accepted. For that reason, I cannot accept this amendment. As I said during Committee, the selective and general schemes are complementary, and it could be dangerous if one of them were unavailable for a fixed period.
Furthermore, although I regard it as highly unlikely, I could not accept the situation where we should be unable to respond to a significant breakdown in the pattern of largely responsible behaviour in financial matters by local government before the financial year 1988–89. It may well be that we shall want to see how the selective scheme works before the question of any wider measures arises. But local government could pre-empt us if we deprived ourselves of the situation of a deterrent. I feel that in practical terms this is just not a starter. I could not accept it during Committee and I still do not feel that there is any case at all of our accepting it now. I am sorry that that is so. I respect the manner in which it was moved and the support that I know it has, but I feel that as the noble Lord, Lord Kilmarnock, said in his opening remarks and as it was said earlier on today, we have to see the legislation in place and working. The Government are optimistic about its effects. Only when we actually see what it produces will we have a better ability to judge its effectiveness.
Baroness Birk: My Lords, it is quite extraordinary that we were told all the time on the discussion of Part

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I of this Bill that there would be just a handful of authorities (between 12 and 20) and we have never got beyond this rather mythical approach to it. Then, when it came to Part II, we were assured on so many occasions that the Government did not expect ever to have to invoke the general powers but just wanted them, as I understood it, in reserve. I think I am right about that. If that is so, it seems to me quite extraordinary that they cannot accept an amendment of a pause (if you like) of three years. What do they expect to happen? Either they are expecting a complete avalanche of authorities to be ratecapped under the scheme or they are expecting to vote for the general powers much more readily than they have let on so far. Either way, it does not seem to me that the case against this is at all convincing.
Lord Bellwin: My Lords, I do not find it contradictory in any way. What we have said we have believed and we still believe. The general scheme is a deterrent, it is a reserve power. We do not expect that we would have to invoke it. The very fact that it is there, in place, is, as we believe, a deterrent. We are talking of between 12 to 20 authorities for selection. As I said when we were discussing this matter in Committee, what we cannot preclude is that there are things happening today in local government that have not happened before. There are people running authorities on an ever-growing scale and we just do not know what the position will be. We firmly believe that the legislation as we are now putting it in place will get us and the authorities concerned and the ratepayers where everyone needs to be. That is the hope and, we believe, the effect. Without having the deterrent there, we feel that it would not be as effective and, in the long run, therefore, would be a disadvantage to local authorities as a whole. That is why we cannot accept it.
Lord Kilmarnock: My Lords, what the noble Lord has said does not seem to me satisfactory. As the noble Baroness, Lady Birk, has pointed out, and as I did earlier, the Government are getting into logical difficulties again and again in this Bill. On the one hand, they say that there are only 12 to 20 authorities likely to suffer under the Bill, and then in the next breath they go on to say that all the other authorities, who hitherto had been presumed to be good, need to be deterred. I should have thought it a fairly simple matter that you do not need to deter the good; but only the bad. I did not follow that line of argument. If we leave Part II of the Bill as it stands, all that is happening is that a vast number of local authorities are going to enter a minefield in the dark without maps. I do not think this is good enough for a Bill which is going through your Lordships' House. I think that I should test the opinion of the House.
8.48 p.m.
On Question, Whether the said amendment (No. 24) shall be agreed to?
Their Lordships divided: Contents, 37; Not-Contents, 75.

DIVISION NO. 4

CONTENTS

Airedale, L.

Nicol, B.

Attlee, E.

Northfield, L.

Birk, B.

Phillips, B.

Brookes of Tremorfa, L.

Pitt of Hampstead, L.

Carmichael of Kelvingrove, L.

Ponsonby of Shulbrede, L.

David, B.

Robson of Kiddington, B.

Dean of Beswick, L.

Seear, B.

Elwyn-Jones, L.

Sefton of Garston, L.

Falkender, B.

Stallard, L.

Graham of Edmonton, L.

Stoddart of Swindon, L.

Hanworth, V.

Stone, L.

Harris of Greenwich, L.

Taylor of Blackburn, L.

Henderson of Brompton, L.

Tordoff, L. [Teller.]

Hooson, L.

Underhill, L.

Houghton of Sowerby, L.

Wells-Pestell, L.

Kagan, L.

Whaddon, L.

Kilmarnock, L. [Teller.]

White, B.

McCarthy, L.

Winstanley, L.

McNair, L.

NOT-CONTENTS

Airey of Abingdon, B.

Henley, L.

Avon, L.

Hives, L.

Bathurst, E.

Inglewood, L.

Bellwin, L.

Ingrow, L.

Belstead, L.

Lindsey and Abingdon, E.

Bolton, L.

Long, V.

Boston, L.

Lucas of Chilworth, L.

Boyd-Carpenter, L.

Macleod of Borve, B.

Brabazon of Tara, L.

Margadale, L.

Broadbridge, L.

Marshall of Leeds, L.

Brougham and Vaux, L.

Massereene and Ferrard, V.

Broxbourne, L.

Maude of Stratford-upon-Avon, L.

Caithness, E.

Campbell of Croy, L.

Middleton, L.

Carnegy of Lour, B.

Morris, L.

Coleraine, L.

Napier and Ettrick, L.

Colwyn, L.

Orkney, E.

Cork and Orrery, E.

Portland, D.

Cox, B.

Rankeillour, L.

Craigmyle, L.

Renton, L.

Cranbrook, E.

Rochdale, V.

Cullen of Ashbourne, L.

Rodney, L.

Davidson, V.

Rugby, L.

De Freyne, L.

Saltoun, Ly.

Denham, L. [Teller.]

Skelmersdale, L.

Digby, L.

Stamp, L.

Drumalbyn, L.

Swansea, L.

Elton, L.

Swinton, E. [Teller.]

Faithfull, B.

Thomas of Swynnerton, L.

Ferrier, L.

Trenchard, V.

Fortescue, E.

Trumpington, B.

Gibson-Watt, L.

Vaizey, L.

Gisborough, L.

Vaux of Harrowden, L.

Glanusk, L.

Waldegrave, E.

Grantchester, L.

Westbury, L.

Gray of Contin, L.

Windlesham, L.

Gridley, L.

Wise, L.

Hailsham of Saint Marylebone, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
8.58 p.m.
Lord Underhill Lord Underhill moved Amendment No. 25:
Page 8, line 14, at end insert—
("( ) On the making of an order under this section, sections 10 and 11 below shall remain in force for the period of twelve months from the date specified in such order and shall thereafter cease to be in force but without prejudice to the Secretary of State's power to make a further order or orders with like to which the provisions of subsections (2) and (3) below shall apply.").
The noble Lord said: My Lords, in Committee the noble Lord, Lord Bellwin, was unable to accept an

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amendment which was similar to this one in so far as its purpose was to restrict the life of a general rate limitation order for one year. Your Lordships may recall that that particular amendment was technically deficient and was withdrawn. Naturally, I hope that the amendment now before the House, Amendment No. 25, is in order.
Unless some time limitation is placed on such an order, it will remain active until there is further legislation to repeal it. The issue with which we are faced is whether a general rate limitation order should have a life of only one year at a time. I would emphasise that, although the order would expire at the end of 12 months, new primary legislation will not be necessary, for the amendment, it will be noted, includes the provision that the time limitation is without prejudice to the power of the Secretary of State to make a further order or orders; that is, he may renew that particular order.
When this matter was dealt with in Committee the noble Lord, Lord Bellwin, made three particular points. These are set out in column 822 of the Official Report for 8th May. I shall refer to these three points because, apart from the amendment's technical deficiency, it was because of these points that the noble Lord said he could not accept it. First, he said that the suggested annual renewal of powers is,
"more appropriate to emergency legislation which might be expected to lapse quickly or to be replaced by more permanent provisions."
Obviously my first question is: in what category of permanency do the Government regard this particular provision in the Bill? The second question is: are the Government really saying that the Rates Bill will not be replaced by more permanent powers which could set up a more healthy and more accountable system of local government finance? If so, that must be a very gloomy prospect for any noble Lords who thought that this Rates Bill, though undesirable, was a necessary expedient.
Secondly, the noble Lord the Minister said that the general powers under Part II of the Bill would be sought only where,
"substantial numbers of authorities are ignoring the spending guidelines of the Government.".
He added:
"It would surely be unreasonable then to expect that matters could be put back to rights in so short a period as one year.".
That particular point can be dispensed with quite easily because if the Minister would accept the principle that there should be a time limit on any order under this reserve scheme, and if he considers that a year is too short, I ask him (as I asked him at Committee stage and got no answer): do the Government accept that another period would be acceptable to them? If so, I hope that they will accept this amendment and they can adjust the time limit— providing it is a reasonable time limit— at the Third Reading stage.
The third point made by the noble Lord, Lord Bellwin, was that the order would be introduced only after proper scrutiny by both Houses of Parliament. I am sure that the Minister will appreciate, first of all, that no order can be amended by either House: they accept or reject. The Government have made much of
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the need for both Houses to approve this particular order, but no doubt the noble Lord the Minister will recall a Question on this very matter, which was asked by his noble friend Lord Chelwood as recently as the 14th May. The Lord President of the Council on that occasion replied (at col. 1268):
"There is a well-established convention that the House of Lords does not vote against the Second Reading of a mandated Government Bill … it might be regarded as inconsistent … to reject an affirmative instrument to implement Part II of the Rates Bill".
So on the question of parliamentary scrutiny, even the Lord President told the House that really this was against the conventions and could not be done in this House. Therefore, the safeguard of scrutiny to which reference was made at the Committee stage does not really hold good, and unless a time limitation is placed on a general rate order it will be there permanently. I am certain that is not what the House would wish to be allowed.
Lord Sandford: My Lords, I should like, if I may, to intervene on this amendment, not so much to support the amendment itself as the idea behind it. I should like to start by thanking my noble friend for sending me a copy of the letter which he wrote to the noble Lord, Lord Northfield, after the debate which we had on the 8th May during the Committee stage where we were discussing this matter.
I think it would be true to say— and I believe the House would agree with me— that nobody is particularly glad to see this Bill. The Government themselves have introduced it with reluctance and Parliament is passing it with reluctance in order to deal with a situation in which the conventions which have hitherto governed local government finance have broken down. We hope that situation is temporary. I think there is recognition that permanent remedies lie in the improvement and fundamental reform of local government finance; and our hope and expectation is that when this Bill is on the staute book the Government will buckle down to the reform of local government finance. To the extent that that succeeds—and it must succeed— the need for these general powers will in due course lapse. I therefore think it would be undesirable to have them permanently on the statute book.
On the other hand, if the situation deteriorates from that existing now, when only the selective powers are thought to be necessary, to the point where general powers are needed, then I cannot see that it will be appropriate for this part of the Bill to lapse after so short a period as a year. Therefore, I would like to commend to my noble friend a formula roughly along these lines:
"This part of the Act shall continue in force until the end of the period of X years"—
and we can discuss how long X should be but it should be longer than one year—
"beginning with the passing of this Act. It should then expire, but at anytime before the expiry of this part Her Majesty may, by order in council, direct that it shall continue in force for another period of one year, provided that Her Majesty shall not be recommended to make an order under this section until a draft of this order has been approved by resolution of each House of Parliament".
This phrasing is precedented in a number of other pieces of legislation of this character. It is something more permanent than purely emergency legislation,

583
but not so permanent as to remain on the statute book after it has ceased to be necessary. I think the whole House believes that Part II of this Bill should not remain on the statute book for longer than is necessary. Therefore, my question to my noble friend is this: would he be prepared to consider something along the lines that I have indicated in substitution for what is being moved at the moment, and be prepared to discuss what length of time X should be?
Lord Bellwin: My Lords, perhaps I may first respond to my noble friend Lord Sandford. Of course I will, as always, read carefully what he has said. However, I am bound to say that the reasons which I shall give for being unable to accept this amendment will apply to what he has proposed.
The amendment takes into account what was debated in connection with a similar amendment in Committee. This amendment seeks to time-limit an order introducing general rate limitations, and, unlike the amendment we discussed in Committee, the order would relate to Clauses 10 and 11. However, the purpose is basically the same: to require the Secretary of State to seek annual renewal of the powers in both Houses of Parliament.
I still cannot accept this amendment. My reasons are exactly the same as those given when we discussed Amendment No. 79 in Committee: namely, that the annual renewal of powers is more appropriate to emergency legislation such as the Prevention of Terrorism Act. I just cannot accept that general rate limitation powers are in any sense similar to such emergency legislation. However much noble Lords opposite, and indeed my noble friends, are worried about this and however much they may not like it. the fact is that the powers have been specifically endorsed before in our election manifesto and the legislation is being subjected to proper scrutiny by both Houses of Parliament. Furthermore, the decision to seek to activate Part II will have arisen only in circumstances where the previous convention on local government spending has clearly broken down. Should that situation ever arise—and I say again and again that I sincerely hope and believe it will not— it would be quite unreasonable to expect matters to be put right in one year.
Nor could I accept a biennial renewal of powers. nor triennial, nor, for that matter, any other fixed period of time. At this time it is simply not possible to say how long it might take to put matters right. If, however, after a period of time it is felt that circumstances have changed so that the form of the general limitation powers, or the need for them, is brought into question, I see no difference between this legislation and, frankly, most of the other legislation considered by this House. That is why I believe that there is no basis on which to accept the time limiting of these powers, whether on annual renewal or any other fixed period.
As to the point which was made by the noble Lord, Lord Underhill, about affirmative procedures in the House, I agree that it would, indeed, be exceptional for the House to reject an affirmative resolution order, particularly where it related to a specific manifesto commitment of the Government. We are all familiar with the controversy which surrounded the rejection in
584
1968 of the order relating to the Rhodesian sanctions, but it is certainly not unknown for the House to divide on contentious pieces of subordinate legislation. I am informed that since 1968 there have been a score of occasions on which opposition to Government orders has been pressed to Division, on a Motion to approve the order, or on an amendment to the Motion, or on a related procedural Motion. This record shows that the House has always been cautious in the use of its powers, but it also shows that the powers exist.
I regret that we are not getting any further, because I know your Lordships believe that, with a time limit, it would not be open-ended. If the circumstances come about—as I sincerely hope they will—then, just as with other legislation, there will be no difficulty. That is why I have to say that I cannot accept the amendment.
Lord Underhill: My Lords, needless to say. I am disappointed with the Minister's reply. We took the three reasons why the Minister could not accept the amendment at the Committee stage and incorporated them in an amendment which is no longer technically deficient; at least, we believe that it is no longer technically deficient. The Minister has indicated that he believes it is in order. Having therefore, dealt with those points, we hoped that the Minister would either accept the amendment or make a reasonable suggestion about how to amend it.
I am grateful for what was said by the noble Lord. Lord Sandford. I do not understand why the Government cannot impose a time limit of some kind on the order, bearing in mind that our amendment provides an opportunity for renewal by affirmative resolution, whenever the Minister wishes. The view of local government—this view is. I am sure, shared by my two fellow presidents of the associations—is that central control of local government will become a permanent fixture. That is what local government now believe and they will continue to believe it. That belief can be removed not only by consultation, but by the Government fixing a period.
The Government say that the period of one year contained in the amendment is insufficient. However, they could fix a not unreasonable period, bearing in mind that there will still be the power to renew by order, if they so wish, at the end of that period. The Minister has said exactly what he said at the Committee stage, even though I have attempted to answer the points which he made then. However, I do not think that it would be right to divide the House at this stage. We ought to look very carefully at what the Minister has said and also at what the noble Lord, Lord Sandford, has said, bearing in mind that there will be a further stage of the Bill when something can be done to restore the confidence of outlook which is missing in local government at the moment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.13 p.m.
Viscount Ridley Viscount Ridley moved Amendment No. 26:
Page 8, line 14, at end insert—
("( ) No order shall be made under this section unless at least 50 authorities have been designated under Part I of this Act in relation to the financial year immediately preceding the date on which such order is made.").
The noble Viscount said: My Lords, I admit that this amendment ought properly to have been moved at the Committee stage and that it is being raised a little late in the day. I hope, however, that that will not prevent a short consideration of the point which I wish to make. Earlier in our proceedings today Part II of the Bill was likened to the nuclear deterrent—to be used only when conventional weapons have failed. The question is, when would such a situation be triggered off and what would trigger it off when the conventional Part I of the Bill failed? Nobody wants to pull the nuclear trigger in this Bill, or in any other sphere. However, the Government have frequently said that they will introduce a general scheme only when all the specific weapons at their disposal have failed to bring about the desired result. But they have been diffident in saying how and when they would define that situation as having arisen, despite the pressure in another place and here to do so.
The Government have said also— and my noble friend Lord Bellwin himself has said— that Part II will be introduced only if 60, 80, or 100 authorities are spending excessively. In the amendment, I have chosen the much more modest figure of 50 local authorities, so I hope that the House will not regard this as wrecking the Bill but as helping the Bill. I hope it will require the Government to be a little more specific about the conditions in which the general powers will be invoked. It will only be effective, as I have said, when Part I has failed.
This provision would mean that adherence to Part II on the horizon can be seen to be coming forward by all concerned and that the country will realise that Part I has not been a success. Therefore, for all I know, Part II may well be justified in the future. This amendment will not stop the Government's purpose, nor hinder what the Government are doing. I believe it would be helpful to define the position where, as my noble friend Lord Bellwin said in respect of the previous amendment, the situation "has clearly broken down". I hope that this amendment will be given sympathetic consideration.
Should the figure of 50 local authorities be wrong, I shall be quite happy not to stick to it; I shall be willing to accept a figure of 49 or 51. The point I wish to make is that there has to be a minimum number of local authorities attacked under Part I before Part II should be brought into being. I beg to move.
Lord Bellwin: My Lords, may I say, first, that at present we do not envisage a situation in which 50 local authorities might qualify for selective action. Although I seem to have failed to convince noble Lords opposite that that is so, I want to repeat that point. When we keep speaking of from 12 to 20 local authorities, that is exactly what we mean. It will not be too long before we are able to show that that is so.
I have listened carefully to what has been said by my noble friend in support of the amendment. I believe there is still some confusion as to the Government's position. Throughout, we have said that the general rate limitation scheme is not applicable in present circumstances and that it does not apply at the present time. At present, we have a small minority—I say again. a small minority—of grossly overspending
586
councils which account for the great proportion of total overspending.
In these circumstances, we have argued that selective rate limitation is adequate since the large majority of authorities are spending at or close to their expenditure targets. We have gone on to ask, "What if the picture changes? What if, despite capping the rates of the present minority of irresponsible authorities, we continue to experience significant overspending because a large number of local authorities spend well above their expenditure targets?". That would be a different situation and one that could occur without a large number of authorities actually spending so much that, individually, they would qualify for selective action. We have said that in those circumstances, the different approach of general rate limitation might be appropriate.
I have consistently resisted— I acknowledge—all attempts to impose artificial constraints on the introduction of a general rate limitation scheme. I have done so for two reasons. First, we believe that such constraints will only weaken the deterrent effect of the powers. If authorities know that there are procedural hurdles in the way to a general limitation, they will be less concerned about the possibility of its introduction.
Secondly, I cannot accept that it is sensible to try to restrict the scope for action in the case of powers, which, if they are used at all, would only come into effect at an uncertain point in the future. However sensible or realistic a constraint may seem to be now, there can be no certainty that it will look the same when and if the time ever came to apply it.
We have provided already for a very important restraint on the Secretary of State's freedom of action, by requiring the approval of both Houses to an order to bring Part II into effect. The important point is that if and when the time ever came, the Government would have to make their case in Parliament. I am sorry because I know that this does not satisfy my noble friend; it is not without reluctance that I cannot accept this amendment, but I hope he will feel able to withdraw it.
Baroness Birk: My Lords, before the noble Viscount replies, I fear that I must intervene. If it were not so serious, this Bill would be absolutely hilarious. It is incomprehensible. As my noble and learned friend observed, it is full of gobbledegook. The drafting is absolutely appalling. Its intentions are not known. The motivations are all mixed up. We see this all the way through the Bill. The Minister is doing the best that he can with, honestly, almost the worst possible piece of legislation that he could have had thrust on him. In that way I feel very sorry for him about it all.
It is not now really a question of whether the noble Lord accepts this particular amendment which has been moved by the noble Viscount. It is a question of the whole see-saw. I repeat this once again; we are all having to repeat the same things, and that applies also to the Minister. On the one hand, we are told that the Government do not expect to invoke the general power. We, therefore, argue that they could at least give this lapse of three years. We are told, no, they cannot do that because something dreadful may happen and we have to be ready for it. The noble

587
Viscount then suggests that we give a number of authorities. The Government say, no, they cannot do that, because we do not know the number. We are talking, of course, of a handful, say, 12 to 20. When we ask whether it is a big or a little handful, we get no answer at all. As I say, the whole thing is absolutely ludicrous. It is like being Alice in Wonderland. It is absolutely appalling. The more we go on, and the Government bring forward more and more amendments—Amendment No. 4 was, unfortunately, an oustanding example—the more completely incomprehensible, intricate, introverted and tied up the whole thing becomes. It is an insult to both Houses of Parliament that we should have been presented with this Bill.
Viscount Ridley: My Lords, I have no intention of pushing this amendment. I am sorry that the Government cannot see the logic of my argument that it is better to have Part II defined than not defined. As the noble Baroness, Lady Birk, said with great eloquence, the Government have refused all efforts to define matters when they were bringing in Part II. I have said before, and I say again, that I think they will live to regret that attitude, but I shall not press the amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 10 [Authorities subject to general control]:
The Deputy Speaker (Lord Renton): My Lords, if Amendment No. 27 is agreed to, I cannot call Amendments Nos. 28 to 31 inclusive.
[Amendment No. 27 not moved.]
Viscount Ridley Viscount Ridley moved Amendment No. 28:
Page 8, line 31, leave out ("each of the three") and insert ("the").
The noble Viscount said: My Lords, I hope that it will be convenient for the House to take with this amendment, Amendments Nos. 29, 30 and 31, as they all refer to the same point.
Amendment No. 29: Page 8, line 31, leave out ("years") and insert ("year").
Amendment No. 30: Page 8, line 34, leave out ("each of the three") and insert ("the").
Amendment No. 31: Page 8, line 34, leave out ("years") and insert ("year").
We were presented at Committee stage with a considerable concession by the Government in that certain authorities were to be exempt from Part II of the Bill if they fulfilled certain conditions. I think that the House, and I am sure local authority associations, welcomed that very important concession—provided of course that the authorities concerned have proved their good behaviour for a certain period of time. I think we had a debate on that on that occasion. The trouble is that in order to qualify for that exemption an authority has to get over two hurdles. First, it has to be below its GREA, and, secondly, it has to be below its target. As we said at the time, both are movable hurdles which can be shifted at any period. Therefore, to avoid what is, in effect, jumping twice through two hoops on four occasions can be quite a process; so perhaps, on closer thought, the concession is a little less generous than we might have expected.
In order to qualify for the concession an authority has to obey the conditions for not less than four years—that is to say, the three years preceding and the year for which it has budgeted. If the concession is to mean anything, it should be reduced in period. The amendments seek to say, in effect, that an authority has to prove its fulfilment of the conditions for the first year—that is, the year just ended— and to be budgeting below the targets and the GREA for the second year. The authority could then say to its ratepayers, "We are no longer in fear of rate capping and we can go ahead and do what we promised to do".
I believe that the amendment is a modest improvement which would make the Government's concession more realistic and more acceptable and, hopefully, would come into life before this Government disappear and perhaps the Government after them. Otherwise, the legislation will be with us for so long that the concession will be meaningless. It may be wrong that it should be a total of two years, rather than four. It could be a compromise, which is not difficult to see, to cover three years; that is to say, to be good boys for two years and to promise to be good boys for a third year. But I believe that the concession the Government gave would not be seriously weakened by this group of amendments.
I think there was a considerable attempt among Conservative Members of Parliament in another place to move in this direction, but of course they did not have this amendment because it did not come before them. If I remember rightly, it appeared, or saw the light of day, only a very short while before our Committee stage and I do not think we had enough time to consider it, though, as I said on that occasion, and as I am sure we all agree, it is a considerable and generous concession to a process which nobody really enjoys. In that light I hope that the Government will consider it most seriously. I beg to move.
Lord Bellwin: My Lords, it is certainly not the Government's intention that prudent authorities with a consistent record of good management in compliance with our spending guidelines should be set a rate limit were a general power of rate limitation ever needed. Indeed, our purpose in amending Clause 10 in Committee was to provide for the exclusion from the operation of a general rate limitation scheme authorities with an established record of responsible self-restraint. We recognise the strength of feeling on this issue both in this House and in another place. We have now provided that should general rate limitation ever prove necessary, rate limits will not be set for authorities which have not exceeded their GRE in each of the previous three years and which are so budgeting again in the year in which the question of exemption falls to be determined, or which have budgeted similarly in relation to their expenditure target.
The amendment before us seeks to cut down the period during which an authority must demonstrate its self-restraint to just one year, and the year in question. I cannot accept that an authority could demonstrate consistency over such a short period of time. It would be perfectly possible for an authority to manipulate its budgeted total expenditure by the use of special funds, to give an impression of prudence which would allow

589
it to avoid a rate limitation. Two years is too short a period to judge whether an authority is really complying with the guidelines. It is only if we are sure of that, that we can justify giving an authority the special treatment provided for in Clause 10, as amended. If we were not sure, the consequences for ratepayers in these areas would be serious. An authority which had manipulated its budget to secure exemption could be expected to make a particularly heavy demand on its ratepayers during a year when it had an unrestricted rate to refinance its balances.
I gather from what my noble friend Lord Ridley said that in some ways we have weakened; we have not gone as far as was proposed in another place by the honourable Member for Honiton and others. While what was talked of there did suggest that expenditure should be considered only over a two-year period, it is also true that it would have provided only for the exemption of authorities which had met their targets consistently. So long as targets continued there would have been no GRE exemption.
I think your Lordships will accept that we have gone slightly further in one important respect because we have provided for authorities which have consistently spent below GRE to be excluded, even if they have exceeded target. As I said in Committee, we certainly do not condone any spending over target but it is very unfair to suggest that our amendment was less satisfactory for the authority which has truly exercised self-restraint.
I should like to take the opportunity, during debating this amendment, to revise the statement I made in Committee about the amendment which we then agreed to on Clause 10. I said that, using the pattern of local government expenditure over the past three years and budgets for the current one, 208 English authorities might have been exempted if that question fell to be decided now. In fact, it appears that the correct number would be 220. I apologise for not having that figure right before, but I think the difference does not significantly alter the situation. Certainly, it does not worsen it.
Of course, we must continue to be wary of reading too much into the evidence of past years. We have made and we meant to make a significant concession to the reasonable concerns of the prudent authorities. What we are being asked to do in the amendment now before us is to take a chance with the protection that we are offering the ratepayers in higher spending areas. I fear that this is something that we cannot do.
I feel that this is an attempt to meet some of the concerns expressed although I do not have any of the fears to which the noble Baroness in particular referred when we were discussing the last amendment. I have much more confidence than that. Having said that, I hope that my noble friend will understand why I am not able to accept the amendments.
Viscount Ridley: My Lords, I am grateful to my noble friend, and I certainly shall not push the amendments. However, I should like, by leave, to make two points. I should have said of course that four years is the life of a council. If you have to be good boys for four years, someone else will reap the reward of your good behaviour or otherwise because there will
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then be an election and someone else may take over. In two years, you can show results that you could not otherwise do. My noble friend's defence was not as strong as that which he normally deploys, and I am sorry that he has lapsed from his high standards. He said that if you were very good boys for two years, you could then be very naughty after escaping the Bill and get it all back in the third. That, applied after four years, means that you can get even more back in the fifth. I do not accept the force of my noble friend's argument, but I am wasting time and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 29, to 31 not moved.]
9.33 p.m.
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 32:
Page 9, line 4, at end insert—
("( ) The Secretary of State shall by notice in writing served on an authority exempt it from the operation of subsection (1) above in relation to the next financial year if he is satisfied that, in relation to that authority, one or more of the following conditions apply, namely—

(a) that the authority has exercised its best endeavours with a view to ensuring—

(i) that its expenditure in the previous financial year has not exceeded the grant related expenditure (as defined in section 56(8) of the Local Government, Planning and Land Act 1980) of that authority, and

(ii) that its expenditure in the previous financial year has complied with any guidance issued by the Secretary of State under section 59(6)(cc) of the said Act of 1980;

(b) that the authority is a designated authority for the purposes of the Inner Urban Areas Act 1978;

(c) that the authority has entered into arrangements with the Secretary of State or Ministers pursuant to section 7 of the said Act of 1978;

(d) that all or any part of the authority's area has been designated a special area pursuant to section 8 of the said Act of 1978;

(e) that any increase in the total expenditure of that authority or in any rate levied or precept issued by it, as between the last but one financial year and the financial year immediately following that financial year has been less than the increase in the Index of Retail Prices in the same period.")

The noble Lord said: My Lords, this rather bulky-looking amendment which I move on behalf of my noble friend Lord Evans of Claughton, seeks to pin down the Government to give a definition of how a local authority wishing to conform in every way with the Bill could achieve exemption from subsection (1). If an authority is to avoid the sin of overspending, it would help if we had a definition of what this sin in reality is, or, alternatively, of what virtue is. The amendment would protect local authorities by making sure that a local authority would not be penalised if it complied with the Government's 1980 Act and if it is a designated authority for the purposes of the Inner Urban Areas Act 1978. If the area in question already has special problems, what is the point of giving with one hand and taking away with the other? The amendment would simply let local authorities know where they stand by giving guidelines for the criteria of designation or exemption from designation.
Looking at the amendment in detail, paragraph (e) provides for exemption if the total expenditure of the authority in preceding years has been less than the increase in the retail price index. This would make it supremely virtuous. As we have already heard from the noble Lord, Lord Beaumont of Whitley, local

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authority expenditure is almost inevitably normally above the RPI rate of increase.
The amendment, in essence, asks the Government to define a virtuous authority rather than leaving everyone in the dark. The noble Lord I think on a number of occasions during the Committee stage and possibly today, has referred to reasonable expenditure. The question really is, "What is reasonable expenditure?" At present, we have no definition of this at all. It is like asking the Government how long is a ball of string and getting no answer. This is a probing amendment. We want some clarification from the Government of what a virtuous authority is, and what reasonable expenditure can be expected to be. I beg to move.
Lord Bellwin: My Lords, this amendment, too, is exactly the same as one tabled during Committee stage and seeks to introduce further exemptions from the operation of the general scheme. Obviously, the statement I made during the Committee stage has not satisfied noble Lords opposite. The first part of the amendment again seeks to exempt authorities which have tried to meet GRE and target in the previous financial year. However, as your Lordships know, the Government have already amended the Bill to exempt authorities with a proven record of responsible spending. This is now incorporated in subsections (2), (3) and (4) of Clause 10.
In my view, the Government's amendment, with the specific criteria that we have adopted, will be much easier to operate than what is advocated in the first part of this amendment. I cannot see how it would be possible to establish that an authority had used its best endeavours to reduce its spending. How can one measure a best endeavour? In my view the Government's approach is much preferable and I could not support the first part of the amendment.
The next three exemptions in the amendment, dealing with partnership and programme authorities, overlap substantially since all partnership and programme authorities must also be designated authorities for the purposes of the Inner Urban Areas Act 1978 and a special area cannot be defined except for a partnership or programme authority. We have heard once more how inner city authorities ought to be exempt from rate limitation because of their special problems, but, for the reasons we debated at great length in earlier stages, I cannot accept that view. We know that inner city areas do have special problems and that is reflected in their GRE assessments. I have before me a lot of figures to illustrate that.
I have already explained in Committee that the Government willingly support programmes of action through the partnership and programme authority machinery. I said earlier today that for five years I myself have been deeply involved in that work, so I know that that is so. But that does not give them carte blanche to spend money. The arguments which I advanced then still hold good now. I do not propose to detain your Lordships by repeating them again. Suffice it to say that we already have in mind the special needs of inner city areas. But inner city status is not inconsistent with responsible control over expenditure and—I
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repeat this and say it carefully—the search for economies.
The final exemption in this amendment would exclude any authority which between one year and another increased its total expenditure or its rates by less than the rate of inflation. Again, I explained in Committee why I could not accept this. Nothing has been said in the meantime to make me change my mind. Such an exemption would still be open to considerable manipulation by those willing to exploit it. Furthermore, it would require us to exclude any authority which was standing still in volume terms. The purpose of this Bill is to secure real reductions in spending, particularly from the high spenders. None of the proposed exemptions in this amendment is acceptable to the Government, and in those circumstances I hope the noble Lord will be able to withdraw it.
Lord Kilmarnock: I am grateful to the noble Lord, Lord Bellwin, for covering all the specific points in the amendment. Tomorrow I shall read with great care what he has said. He has indicated that the Government are alive to inner city problems, although I must say that in my opinion they do not seem to be going about dealing with them in quite the right way.
I am slightly confused by his claim that the RPI or the matter referred to in the last subsection could be manipulated. I was not quite clear what he meant by that. As for standing still, I should have thought that if in some areas expenditure could stand still while needs and problems were increasing—demographic problems and social problems of various types—those authorities would be doing very well indeed. I will read carefully what the noble Lord has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sandford Lord Sandford moved Amendment No. 33:
Page 9, line 13, leave out from ("exceed") to ("by") in line 15 and insert ("£10 million, he shall").
The noble Lord said: I move this amendment for the same good reasons that the Government have introduced into Part I of the Bill a threshold of £10 million: that is to say, to avoid a lot of bureaucratic investigation, calculation, review and negotiation over amounts of public money which are not material when compared with the budgets of those authorities who are spending sums several times in excess of this amount. I move it for the additional reason that the authorities to whom this threshold applies—namely, the 333 members of the Association of District Councils—have, in aggregate, been within the Government's targets not only last year but also this year, and show no signs of going outside them. Therefore, there really is no need for this part of the Bill, any more than the previous part, to bear upon these authorities and to cause all the extra work that would be involved.
I should also like to speak to Amendment No. 34:
Amendment No. 34:
Page 9, line 17, at end insert—
("( ) The Secretary of State shall before the commencement of each financial year by an order made by him increase the amount specified in subsection (5) above by not less than the increase in the retail price index for the preceding calendar year.").

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I certainly do not want to press either of these amendments now, and particularly not Amendment No. 34 because we have already agreed in the course of dealing with Amendment No. 2 that there is a better formula for indexing the threshold than the one now proposed in this amendment. So what I am moving is an amendment along the lines of Amendment No. 33 to introduce the threshold into this part of the Bill for the reasons that I have just given, and to attach to it a further amendment along the lines of that which I proposed and which the Government accepted in principle when I moved Amendment No. 2 earlier this afternoon. I beg to move Amendment No. 33.
Lord Bellwin: My Lords, as I seem to have said time and time again in discussing this Bill, the circumstances which would lead to an introduction of a general limitation scheme would have to be substantially different from those pertaining today. Whereas we regard the £10 million exemption limit as appropriate for the purposes of the selective scheme, we simply cannot possibly know at this time what might be appropriate as an exemption limit for a general scheme. Indeed, it might not be appropriate to have any exemption along these lines, especially since we have already included in subsections (2), (3) and (4) of Clause 10 specific exemptions for authorities with a proven record of responsible spending.
The Bill as presently drafted allows us some flexibility over the operation of the general scheme. Not only will it allow us to exclude authorities in a similar fashion to the selective scheme, but it would also permit us to exempt authorities spending less than amounts which could be related to GRE or targets. But that flexibility would be lost if these amendments were accepted. I wonder whether my noble friend quite takes that point on board. Furthermore, £10 million
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might be too low a figure if at any stage in the future we had to introduce these powers. And under this amendment we would have no way of increasing the figure save by annual inflation increases, but those could not start to apply until Part II is brought into effect.
For all those reasons I believe that the subsection as presently drafted would allow us the right degree of flexibility to operate a general scheme in a way appropriate if at any time it became necessary. I have difficulty with the amendments, and in accepting them, because to do so would, in my view, deny us that flexibility of approach. I wonder whether my noble friend, on reflection, would not be inclined to agree with me.
Viscount Ridley: My Lords, before my noble friend sits down, may I say what enormous pleasure it gives me to agree with him for once in the arguments which he has just advanced. I referred a few minutes ago to Part II as a nuclear deterrent. I cannot see that district councils can claim exemption from nuclear deterrents; it is like the GLC calling itself a nuclear-free zone—such a thing does not exist. I hope that this amendment will not proceed any further.
Lord Sandford: My Lords, I think that it is an excellent amendment and it does nothing at all to upset the flexibility which my noble friend requires. But unless I manage to collect some support from either the AMA or the ACC I shall obviously not have any luck. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 34 not moved.]
9.45 p.m.
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 35:
After Clause 11 insert the following new clause:
("Guidance under s. 59(6)(cc) of 1980 Act.
Where the Secretary of State has—

(a) issued guidance to a local authority pursuant to section 59(6)(cc) of the Local Government and Planning Act 1980 (in this section referred to as the 1980 Act); and

(b) determined a maximum expenditure level for an authority pursuant to this Act,

then notwithstanding the provisions of the 1980 Act for the purpose of the issuing of guidance to an authority and the determination of an authority's maximum expenditure as aforesaid, the higher of the figures shall be used for both purposes.")
The noble Lord said: My Lords, this amendment is similar to one that was put down by my noble friend Lady Stedman during the Committee stage. The difficulty that it seeks to reduce is the apparent contradiction of issuing rate-capped authorities with a spending limit which is different from the two benchmark figures which are currently used in the block grant.
At present— that is, in 1984–85—each authority has a "grant-related expenditure assessment" and a "target". These are different figures calculated in different ways. In fact, at various stages in the Bill we have heard about these extraordinary discrepancies. If rate-capping is introduced under this Bill each authority whose rate is to be limited will also have a third, and a different, spending norm.
Authorities cannot possibly be expected to understand which of three spending benchmarks they should, in fact, be spending near. It would be likely that an authority spending at its rate-cap spending limit would be penalised for overspending its target, and this is obviously ridiculous.
This amendment would oblige the Government to use the higher of each authority's "target" and "rate-cap expenditure limit" for both purposes. That is, if an authority had a "target"of £50 million and a rate-cap expenditure limit of £60 million, then £60 million would also be used as the target. Surely it is desirable to reduce the elements of doubt in the shifting sands of this Bill.
This could be accommodated within the existing law for target-setting. It could be a principle used in setting the target that it could not be lower than the rate-cap spending limit. The effect of the amendment should be to reduce confusion and contradiction, and to introduce much-needed simplicity into a deplorably complex system, while not challenging the Government's objectives. I beg to move.
Lord Bellwin: My Lords I do not accept that expenditure levels and targets should necessarily be set at the same level. They have different purposes and there could be good reasons for determining them in different ways. It would not be surprising therefore if the numbers differed in the end. I explained these differences in Committee when we considered a similar amendment. Perhaps it would help your Lordships if I set out our thinking again in the light of this modified amendment.
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Looking at targets first, they are set by formula and, subject to that important limitation, they reflect the Secretary of State's judgment of the amounts he could reasonably ask each authority to aim at in order that the Government's overall expenditure plans should be met. But they are not individually tailored figures, and authorities have the ability to overspend the target figure—at the cost of grant holdback and therefore higher rate bills. Unlike targets, expenditure levels feed straight into the rate limit, which means that, effectively, authorities cannot exceed them. So, whereas targets can be exceeded, albeit at the cost of higher rates, expenditure levels cannot.
Secondly, precisely because these levels cannot be exceeded, we have provided in the Bill for a redetermination procedure which allows the Secretary of State to take account of particular local circumstances of individual authorities. In setting targets, by contrast, he cannot do that: he is statutorily obliged to calculate targets on principles applicable to all authorities.
So an authority's target must be based on general principles and can anyway be exceeded. Its expenditure level under the Bill can take account of its particular circumstances and cannot be exceeded. Those important differences may well result in different target and expenditure level figures for an authority, and with good reason.
It has been suggested that it would be illogical to provide for authorities spending at the expenditure level set by the Secretary of State to face the possibility of grant holdback if that level happens to be higher than its target. I disagree. As I have explained, the expenditure targets and expenditure levels serve two purposes and are derived in different ways. The expenditure level will not be an approved minimum expenditure level but a statement of the maximum spending level to be taken into account in setting a rate limit. There is no reason why an authority spending at that level should not decide to make the extra effort to get down to its target and avoid holdback. And it would be quite unfair to ratepayers in authorities which are not selected if they had to bear the cost of lost grant in the event of overspending, if authorities which had worse spending records were to be exempted.
The new clause ignores the two essential differences between targets and expenditure levels, and that is why we cannot accept it.
Lord Kilmarnock: My Lords, I am grateful to the noble Lord for that extremely ingenious explanation. I am not sure that I am able to accept it, but for ingenuity it was almost matchless. The fact still remains that the general principles of the Government's public expenditure objectives which are embodied in the targets may take no account whatsoever of the expenditure levels which the Government agree are needed by certain local authorities to maintain their services. I must have a simple mind because I find that surprising.
When there is the further complication of the rate-capping limit and there are these three possible figures juggling around in the air, it seems to me that confusion is worse confounded. It is strange the

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analogies that come to one's mind in this Bill. I think I used "minefield" when movng the last amendment. This time I used the words "shifting sands". They are all appropriate. They underline the imperfections and unsatisfactory nature of this Bill. I shall read with my usual care what the noble Lord has said, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 36 not moved.]
Clause 18 [Commencement]:
Baroness Birk Baroness Birk moved Amendment No. 37:
Page 12, line 30, at end insert—
("( ) Part I of this Act shall not come into force unless and until the principles referred to in subsection (4) of section 2 have been approved by each House of Parliament.")
The noble Baroness said: My Lords, the Government are asking Parliament to give them a blank cheque with this Bill, as has been pointed out before. Selective rate limitation is a major accretion of power to the centre, yet the amount of parliamentary control over rate limitation is minimal. Soon after this Bill is enacted the Government will announce their first hit list. The first batch of authorities will be designated for selective rate limitation; but despite probing in this House and also in the other place we do not know on what basis those authorities will be designated. We know only that they will be designated in accordance with principles; that there is scope in the Bill for 16 different sets of principles to be drawn up to ensnare local authorities; and that more principles will be the subject of a report to Parliament. That is all we know for certain, because that is all the Bill says.
During the Bill's passage the Government have attempted to assuage Parliament's fears about this aspect of the Rates Bill by publishing a putative hit list based on 1983– 84 data. Ministers have used this to illustrate two points. First, they claim that whatever the criteria the same authorities appeared on the hit list. Secondly, they used it to illustrate the sort of criteria—a word the Government use interchangeably with principle, and incidentally define neither—that might be used to designate authorites, but we were not reassured by the Government's illustrative hit list.
The Government's statisticians used 11 different combinations of 11 different factors to produce a hit list of 33 authorities. Each of the combinations caught between 12 and 28 authorities. Only five authorities appeared on every one of the 11 combinations of criteria. For other authorities their inclusion on the hit list, their designation as an overspender, depended critically on the criteria, or principle, chosen. The City of London, for example, managed to appear as an overspender on three of the 11 combinations of criteria.
One of the worrying aspects—the whole thing is a nightmare—has thus been illustrated by the Government's own statements. Just what principles are used will be crucial in determining the fate of individual authorities. We cannot give Government such unbridled powers. It would be quite wrong and quite contrary to our Parliamentary democracy.
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Parliament should see the principles for clarifying overspenders before the Government use this Bill's powers. Hence the purpose of Amendment No. 37 which makes sure that the principles have been approved by each House of Parliament. In approving the principles somebody will then have to get down to defining them so that we shall at least start at the beginning once again. I beg to move.
Lord Bellwin: My Lords, this amendment seems to re-open the debate which we had earlier on Amendment 12 in Committee, about the provision for parliamentary scrutiny of the process of selection for rate limitation. The amendment seeks to prevent Part I of the Bill coming into effect until the principles on which selections will be made have been approved by both Houses of Parliament. I hope that, following certain correspendence I have been having, and my earlier remarks, your Lordships are now clear about what we mean by "principles" in this context. I should like to repeat some of the facts for the record.
We are proposing no formal procedure for the approval of the report mentioned in Clause 2(1), which will set out the names of the authorities designated and the principles on which designation would take place as provided in Clause 2(6). That report will be laid before the other place and we have undertaken that a copy of it will be sent to each authority named. The Secretary of State's decisions and the basis on which they have been taken will therefore be set out formally and in the public domain.
As I have said before, members of the other place may pursue the interests of their own constituencies by correspondence, or by bringing deputations from the authorities concerned to see Ministers to explain their case. They may also pursue the matter by parliamentary Question or adjournment debate. If the feeling in the other place was that there was a need for more general debate of the principles on which the Secretary of State had acted then there are procedures for achieving this. The Environment Select Committee could determine that it would investigate the report and call for Ministers and officials to give evidence.
There are additionally other opportunities available and Governments can always make time available. I have always said that if there were a general desire for debate and there was a danger that it could not otherwise be arranged, no doubt the Government would consider sympathetically a request for assistance through the usual channels. I am convinced that there will be adequate opportunities for consideration of the Secretary of State's determinations in Parliament without the necessity for the statutory procedure envisaged by this amendment.
We have discussed the idea that the designation report should require the approval of both Houses. We have rejected that notion in Committee by voting against Amendment 12. This amendment differs only in proposing that an approval should be given once only to a set of principles before Part I comes into effect. That seems to me rather odd since there is no provision in the Bill for the principles to remain the same each year. And I am advised that it is technically

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defective to require the approval of the principles before Part I can come into effect when those principles cannot statutorily exist until Part I comes into effect. For all the reasons given, I cannot support the amendment.
Lord Beaumont of Whitley: My Lords, are we to understand the Minister to be saying in the last part of that reply that the principles referred to in Clause 2(4) are likely to change from time to time, because if that is what he is saying it becomes even more of the nightmare—as my noble friend Lord Kilmarnock was trying to put together—of the two ideas of shifting sands and the minefield. If you can think of anything more of a nightmare than a minefield and shifting sands, I cannot. I think that this Bill is that.
It seems to me that this is an extremely good amendment. The noble Lord the Minister produced all sorts of other ways in which its ends could be achieved, but none as simple and as effective, it seems to me, as this particular single method, whereby, as is only right, Parliament should approve what this Bill is about before it comes into force. Unless it has the opportunity to examine those principles and to vote on them it will be voting on a Bill based on principles about which it does not know and which will change, it is now informed, from time to time. I cannot think of anything more unsatisfactory than that.
Perhaps this time of night is not the moment to try to force this amendment to a Division. Nevetheless, I do not think this amendment should be abandoned because it seems to me to go to the heart of the matter.
Lord Bellwin: My Lords, with leave of the House, I should like the noble Lord, Lord Beaumont of Whitley, to read carefully Hansard for the debate which we had on Amendment No. 3. That debate went to some length and went round the whole of the matter. Although tempted, I feel it would not be appropriate for me to go over that again now, but that explains more clearly than may have come out in the debate on this amendment the matter of the principles, how and what they are and how they would operate.
Baroness Birk: My Lords, I thank the noble Lord, Lord Beaumont of Whitley, for his stalwart support. He is quite right, as my noble friend Lord Graham of Edmonton was when he moved Amendment No. 3 earlier this afternoon. Since principles in this Bill are such a movable feast I do not see why the Minister should be so exercised about whether one set is referred to in one lot or in different lots. As the noble Lord, Lord Beaumont, pointed out, there is little point in pressing this to a Division tonight, and we shall have to find another way of approaching it, perhaps in the last stages of the Bill. Nevertheless, the only way we can get any solace from all this is that when the Government find, unfortunately, that they get into the muddle which we have all foreseen they will have on record the much stronger straws at which they can clutch than those with which they are building the Bill at the moment. i beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Birk Baroness Birk moved Amendment No. 38:
Page 12, line 30, at end insert—
("( ) Parts I and II of this Act shall continue in force for the period of three years beginning with the date of the passing of this Act and shall then expire.")
The noble Baroness said: My Lords, this amendment is an attempt to limit the life of rate limitation to only three years. There was much feeling about this both on Second Reading and in Committee. This is now another version which is trying to obtain the same objective.
We have heard again and again during the Bill's passage that the system of local government finance is riddled with anomalies, inequities and complexities. The present Government have legislated in an attempt to solve the problem of local government finance three times in the last five years. They have also withdrawn two Bills on the same subject. I must, in all fairness, say that the previous Government also found difficulty in dealing with local government finance. That is not the monopoly of one party: I say that right away.
However, the Government have created a nightmare now for those elected councillors and officials who have to try to deliver services against the background of shifting targets, changing rules and nine different grant sytems in five years.
On top of this wholly unintelligible mess, the Government have superimposed rate capping, which we are engrossed in tonight. In one blow they have added to the complexity of local government finance and, worse, confused the already tenuous accountability of local councils to their electorates. The Government had two chances; one on Second Reading in a reasoned amendment and one again at Committee stage, to try to do something to sort out this financial muddle in local government, but they turned it down on both occasions. Nobody, not even the Government, I am sure, will say that the system of local government finance we shall have when the Bill is enacted will be anything other than a tremendous mess. In fact the Government have now superimposed one big mess on an already enormous mess. We cannot countenance this system continuing in this way unamended. Local government would atrophy and gradually be taken over by the DoE in the same way that the DHSS runs the Health Service. I really think that the DoE is changing from the days when I was there, and I hate to think what that machine is like now.
Lord Beaumont of Whitley: Hear, hear!
Baroness Birk: My Lords, the noble Lord may well say "Hear, hear!" I am sorry for all those who work in that building and who also have to look at it. The Government will try again to liquidate their way out of the chaos. I would guess that in about 18 months' time we shall see again further local government legislation. But this need not be the case. Why do the Government not say now that enough is enough? They now have their manifesto commitment to "protect the ratepayers". though one must ask at what cost in terms of the damage to local democracy. One must also ask whether, when it comes out in the wash, it will, in fact, protect the ratepayers.

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Why do the Government now not concede that the Rates Bill is not a long-term solution and recognise—though I do not expect them to do so—its naked expediencies and say that the search will continue in a vigorous manner for a better way of financing local services, encouraging local participation in Government, and letting local committees have a proper say in the levels of services that they would want to see? That can be done by putting a time limit on Parts I and II which would encourage that to take place. Rate capping is not the answer. If the Government were to see it—as, at times, they keep saying that they see it—as only a stop gap, then, by accepting this amendment, they would be coming part of that way and would be giving themselves a chance to rethink and to reknit the whole thing, which is what they will have to do in the future. I beg to move.
Lord Bellwin: My Lords, I listened with interest to the noble Baroness's dissertation and her cri de c œur as regards the state of local government finances— the same thing that I have been hearing for about 20 years. The tune is slightly different each year, but the song underneath is pretty much the same. There is no doubt that whenever you seek to have a system which tries, on the one hand, to distribute several billion pounds' worth of grants among some 450 authorities on the principle of equalisation, you are bound to have problems and difficulties, for wherever there are winners so there are losers; that some get more means that some others get less. In the past we had a convention that everyone more or less followed and worked within Government outline parameters for spending; and that seemed to work more or less all right.
What the noble Baroness was fair enough to remark upon—and I remember it so well, for I was making representations from the other side of the table at the time—what a complexity it always has been; and, I suspect, always will be. I do not think that the amendments to this particular part of the Bill get us much further forward. For the time being the urgent problem is to carry on dealing with the problem of excessive spending and rating which, happily, so far is confined to a relatively small number of authorities. If that problem can be dealt with and the traditional relationship between local government spending and central Government's responsibilities for economic policy can be re-established, then I believe that we shall have gone a long way to improving the climate of relations between central and local government.
That is something to which I hope we shall be moving. I am still convinced that the bottle is half full and not half empty and that there is opportunity. I know that there is cynicism and I know of the concern expressed, but I feel that we cannot accept these amendments. I do not think that time-limiting is the answer. It may be, as I said at Second Reading, that the time will come for something else. In all truth, it never seems to stop being something else; but when that time comes is a matter for further debate.
Lord Henderson of Brompton: My Lords, I wonder whether I may say something at this stage. I have not
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so far spoken on this Bill. In a way this amendment is a modification of the amendment in Committee of the noble Lord, Lord Chelwood. He moved to leave out Clause 9, I think it was—the first of the clauses in Part II. That was defeated in Committee. This is a lesser amendment in that it seeks to limit both Parts I and II to a life of three years, which I do not think the House as a whole would support. But I wonder whether the noble Baroness would consider at a later stage moving an amendment to limit the life of Part II to three years. With regard to Part I, I think the majority of the House feels it is necessary, although I do not expect that the Opposition would agree to that. But Part II is contingent and involves reserve powers and perhaps there are certain dangers, so there is something to be said for limiting the powers of Part II to a specific period of time. That suggestion might find favour with the noble Baroness at a later stage.
Viscount Ridley: My Lords, I hope that the Government will give serious consideration to the suggestion that has just been made. I am sure that this is a compromise which could well find considerable acceptance in the country.
Lord Bellwin: My Lords, I was lost in fascination listening to the noble Lord, Lord Henderson of Brompton. It really is a delight to hear him speak. I cannot answer clearly as to what one might do. I suspect that, having come all this way, we could not now decide to put a time limit on the general scheme. I am well aware of the concern, and the Government have spoken again and again—and I have done so too—of the great reluctance with which we have this in the Bill at all. But either it is a deterrent or it is not. Only time will tell how effective is Part I of the Bill. I believe that it will be effective and successful; time will tell. As to whether or not one does anything else with Part II, I am bound to say that, although I sympathise very much with the motivations of the noble Lord, Lord Henderson of Brompton, I must question that. But I shall think about what he says.
Baroness Birk: I listened with great interest to what the noble Lord, Lord Henderson of Brompton, said and I shall want to give it some thought. I am grateful to him for his suggestion. In the meantime, I beg leave to withdraw Amendment No. 38.
Amendment, by leave, withdrawn.
Clause 19 [Short title, interpretation and extent]:
10.12 p.m.
Lord Monson Lord Monson moved Amendment No. 39:
Page 13, line 3, after ("Rates") insert ("(Protection of Ratepayers)").
The noble Lord said: My Lords, may I first of all explain that because of a misprint somewhere along the line the name of the noble Lord, Lord Harris of Greenwich, has been erroneously included on the Marshalled List in support of this amendment. The name that should have appeared is of course that of my noble friend Lord Harris of High Cross.
The purpose of the amendment is to alter the Short Title of the Bill so that it would read: "Rates (Protection of Ratepayers) Bill".
"The purpose of this Bill is to protect the ratepayer".

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Those are not my words but those of none other than the noble Lord, Lord Bellwin, speaking on the 26th April at col. 166 of the Official Report. Identical assertions were made at various times by many other Ministers and other senior Conservatives both in this House and in another place. Even a noted Conservative opponent of the Bill, Mr. Geoffrey Rippon, speaking on the "World at One" on 28th March conceded that the Bill would "protect most ratepayers." He then went on to attack the general powers in Part II of the Bill which he particularly disliked. The Secretary of State for the Environment, Mr. Patrick Jenkin, defending the Bill in the Observer of 29th April explained:
"Where the system allows ratepayers to be exploited, the Government must step in to protect them. Nobody else can."
That was backed up in greater detail a week later by the chairman of the Ratepayers' Action Group for the Lothian Region, writing in the Daily Telegraph on 4th May. He explained that without the effective form of rate capping which applies in Scotland. the regional rate would be more like 200 pence in the pound than the 96 pence in the pound that applied as a result of the de facto rate capping.
Despite all this, the Bill is strangely unpopular with the general public, as a number of quite separate public opinion polls have revealed. This unpopularity would seem to stem from what most people, and most outside commentators, agree to be poor presentation on the part of the Government, and ineffective public relations. A bland and uninformative Short Title is symptomatic of the poor presentation, in my submission. It is no business of mine, speaking from these Benches, to boost the Government's image. On the other hand, I do not want to see a government of a different political persuasion coming to power, as is bound to happen one day, and rates soaring astronomically, way above the rate of inflation, simply because the public have not been won over to the undoubted overall merits of this Bill, despite a number of imperfections. I also believe that accuracy and precision in a Short Title are desirable in themselves. I therefore beg to move.
Lord Bellwin: My Lords, one can begin to respond to that by asking, what's in a name? I am bound to say that I am not without some sympathy for what the noble Lord, Lord Monson, says about this. He says the public have not yet been won over. I think it would take more than a name to do that. What matters is not the name, but the outcome and how effective the legislation is. That is what will decide at the end of the day whether or not the Bill is successful and whether the public are really won over. I believe in fact that the Bill is very much welcomed by those who actually pay the rates, and I have no reason to think otherwise.
I am afraid that I cannot accept the change in the Title of the Bill, though I thank the noble Lord for his motivation in proposing it, which I know is very supportive. But as well as protecting ratepayers, there are many other substantial provisions in the Bill which would not be covered by this proposed Title. Your Lordships will have noted that these provisions make up more than half the Bill, in terms of pages of text. So although the Bill certainly does protect ratepayers, that
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is not all that it does. That is why I think we have to stick with the Title "Rates Bill", and for me it will have to be a case of a rose by any other name smelling as sweet.
Viscount Ridley: My Lords, is it not true that there is a further danger in accepting this proposal, in that if the Title were to be changed, every ratepayer in the land would think that his rates would be protected? Ratepayers would think that it was about rate capping, and therefore if the rates were to go up at all, they would blame the Government for allowing them to do so and for not capping them; and the Bill would not work. We are told that only between 12 and 20 authorities are affected. What would happen to the other 429 who are not affected if it were to be called the Protection of Ratepayers Bill? They would think that their rates would not be protected, by the Government's own admission. Therefore I think it would be very unwise for the Government to accept this proposal. however desirable it may be.
Lord Bellwin: My Lords, by leave of the House, the point is that 80 per cent. or more of authorities try very hard to keep their rates down to reasonable levels—and likewise their spending. That is why the thrust of the Bill is with the minority of high spenders. That is where the emphasis has to lie.
Lord Henderson of Brompton: My Lords, I should like to support the Minister in resisting the amendment. There is a touch of frivolity behind the seriousness with which the amendment has been moved. I recall that the late Lord Conesford moved a similar amendment to a Bill which was entitled the Park Lane Improvement Bill. A dual carriageway was made and part of Hyde Park was taken for the purpose. Lord Conesford's amendment to the Short Title was to substitute "Hyde Park Diminution Bill". That amendment was resisted on the grounds of frivolity.
Lord Monson: My Lords, I am afraid that I am not entirely convinced by the arguments that I have heard against the amendment. Some of the Government's support has been of a rather barbed nature; but if they do not wish to accept a helping hand, who am I to press it upon them? I can only beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 [Miscellaneous amendments and repeals]:
10.22 p.m.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon)The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon) moved Amendment No. 40:
Page 14, line 30, at end insert—
(" Part of hereditaments temporarily unoccupied
3A.—(l) In subsection (1) of section 25 of the principal Act for the words from "until" to "subsection" there shall be substituted the words "until whichever of the events specified in subsection (1 A) of this section first occurs".
(2) After that subsection there shall be inserted—
"(1A) The events mentioned in subsection (1) of this section are—

(a) the reoccupation of any of the unoccupied part;

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(b) the ending of the rate period in which the request was made;

(c) a further apportionment of the value of the hereditament taking effect under that subsection.

(1B) Where an apportionment of the value of a hereditament under subsection (1) of this section has taken effect in a rate period and, in that or a subsequent rate period, it appears to the rating authority that the part of the hereditament which was unoccupied at the date of the apportionment has continued to be unoccupied but will remain so for a short time only, the rating authority may give further effect to the apportionment by making a determination under this subsection in relation to a specified rate period.
(1C) From the commencement of the rate period to which a determination under subsection (1B) of this section relates until whichever of the events specified in subsection (1D) of this section first occurs the value apportioned to the occupied part shall be treated for rating purposes as if it were the value ascribed to the hereditament in the valuation list.
(1D) The events mentioned in subsection (1C) of this section are—

(a) the reoccupation of any of the unoccupied part;

(b) the ending of the rate period to which the determination relates;

(c) a further apportionment of the value of the hereditament taking effect under subsection (1) of this section."

(3) In subsection (2) of that section for the word "subsection" there shall be substituted the word "subsections".
(4) This paragraph shall have effect for any rate period beginning on or after 1st April 1984; and any apportionment which has taken effect under subsection (1) of section 25 of the principal Act before this paragraph comes into force shall cease to have effect on 31st March 1985, unless it has previously ceased to have effect under that subsection or it is the subject of a determination made by virtue of this paragraph in relation to a rate period beginning after that date.")
The noble Earl said: My Lords, this amendment relates to Section 25 of the General Rate Act 1967. It enables rating authorities to provide at their discretion rate relief on parts of premises which are temporarily out of use. The amendment we are proposing would make the provision more workable by setting a time limit on the relief. I hope your Lordships will agree that it is a sensible amendment. I beg to move.
On Question, amendment agreed to.
The Earl of Avon The Earl of Avon moved Amendment No. 41:
Page 15, line 20, after ("hotel") insert (",shop, museum")
The noble Earl said: My Lords, paragraphs 4 and 5 of Schedule 1 provide powers for the Secretary of State to bring operational land and properties of the British Railways Board, London Transport Executive and the British Waterways Board—the transport boards—into the rating system by means of statutory formulae. At present these premises are excluded from rating by Section 32 of the General Rate Act 1967, and instead the boards pay contributions in lieu of rates set down in statutory formulae. Non-operational property, such as hotels, offices, places of public refreshment and premises let out by the boards are, however, rated normally.
The provisions in the Bill include powers to vary the coverage of the formulae by order. Should any further refinements, additions or deletions be necessary in the light of consultations with the organisations which will take place before any use is made of these powers, we could redefine the coverage, as required. I commend this amendment to your Lordships' House.
On Question, amendment agreed to.
The Earl of Avon The Earl of Avon moved Amendment No. 42:
Page 19, line 14, at end insert—
("Non-domestic hereditaments not in active use
7A.—(1) After section 46 of the principal Act there shall be inserted—
"Relief for non-domestic hereditaments not in active use
46A.—(1) For the purposes of this Act a hereditament to which this section applies shall be treated as unoccupied if, apart from this section, it would fall to be treated as occupied by reason only of there being kept in or on the hereditament plant, machinery or equipment—

(a) which was used in or on the hereditament when it was last in use; or

(b) which is intended for use in or on the hereditament.

(2) This section applies to a hereditament which is not a dwelling-house, a private garage or private storage premises; and in this subsection—

(a) "private garage" means a building having a floor area not exceeding 25 square metres which is used wholly or mainly for the accommodation of a motor vehicle; and

(b) "private storage premises" means hereditament which is used wholly in connection with a dwelling-house or dwelling-houses and wholly or mainly for the storage of articles of domestic use (including bicycles and similar vehicles) belonging to persons residing there.

(3) For the purposes of subsection (2) of this section a hereditament that is not in use shall nevertheless be treated as a dwelling-house, a private garage or private storage premises if it appears that, when next in use, it will be a hereditament of that description."
(2) This paragraph shall have effect for any rate period beginning on or after 1st April 1985.")
The noble Earl said: My Lords, my noble friend Lord Mottistone tabled an amendment at the Committee stage which would have provided what is commonly referred to as mothballing relief for parts of premises which were unused. We were unable to accept his amendment, but I believe that this amendment, together with Amendment No. 40 to which I have already spoken, should go some way towards the same objective of helping businesses which are suffering from the recession. I hope that the House will welcome this amendment, as well as Amendment No. 40, as a valuable package for industry and commerce. I beg to move.
Lord Graham of Edmonton: My Lords, can the noble Earl tell the House whether any estimate has been made of the rates which would be forgone by local authorities in the event of this amendment being implemented?
The Earl of Avon: My Lords, the limits already imposed by the Government on the level of empty property rates which can be levied by rating authorities mean that after the three-month rate-free period such unused industrial premises would receive 100 per cent. rate relief, and that any other non-domestic premises would receive 50 per cent. rate relief. The amendment will help businesses which have to close down but which do not wish to strip out plant and machinery. I cannot give the noble Lord a figure such as that for which he asks, but if I can have one discovered I shall let him have it.
Lord Graham of Edmonton: My Lords, I am grateful but when it is suggested to the House that this will be

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of considerable help to industry, although that may very well be so, it must be because someone in the Ministry has taken that view. If the extent of that help turns out to be minuscule, then we shall want to draw that fact to the attention of the wider public. On the other hand, if a reasonable figure can be found, then, as far as I am concerned, it is certainly acceptable.
On Question, amendment agreed to.
10.26 p.m.
Lord Stallard Lord Stallard moved Amendment No. 43:
Page 23, line 48, at end insert— ("( ) At the end of sub-paragraph (1)(c) of paragraph 2 of Schedule 13 to the principal Act there shall be added:—
"(d) occupied by persons as their homes in respect of which they are liable to make payments by way of rates (whether to rating authorities or to other persons);" ".)
The noble Lord said: My Lords, I beg leave to move the amendment standing on the Marshalled List in the name of my noble friend Lady Birk. This amendment seeks to draw attention to an anomaly in the rating system which affects tenants in some multi-occupied properties and non-self contained homes. Since this amendment comes right at the end of the Marshalled List and is sandwiched between a number of amendments which seem to be automatically accepted, I suppose there is not much danger that this amendment will not be accepted as well—so I shall be brief.
Amendment No. 43 refers to Schedule 13 to the 1967 Act, which deals with the use of premises as private dwellings and lists a number of exceptions to the hereditaments being used as private dwellings. Our amendment seeks to add yet another exception to deal with these particular tenants.
At present, the rating authorities are required to levy the non-domestic rate poundage on such properties; that is, before deducting domestic rate relief grant. As I recall it, local authorities, borough treasurers and directors of finance throughout the country are usually guided by the description of property put out by the valuation officer at the time of revaluation or when some other procedure has to be gone through. We all know that that is not a very regular occurrence. The last revaluation was in 1973, or about then, and so the descriptions are not necessarily always accurate or up to date. This situation creates the anomaly to which the amendment refers.
The effect of the anomaly is a considerable cost to tenants in such homes. I understand that from information compiled by the Westminster City Council rent officer—which must be fairly impartial—it is possible to ascertain the effect of this inequity upon individuals. The total commercial rate payable on one such house in multiple occupation in the W.2 district of London for 1983– 84 was £2,472.16. In this property, there were 20 non-self contained bedsitters, making an average rate payable per bedsitter off 123.60. If the domestic rate poundage were payable in respect of that property, each tenant would pay only £103.19, thus saving £20.41. That is quite a saving for people in those circumstances.
Such tenants are very often the most vulnerable members of the community. They often do not qualify for points under the various points scheme and so they
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have no chance of securing a permanent council dwelling. Very often, they are people who cannot afford to purchase in the market. They are vulnerable to that extent. There are people, I imagine, living in parts of Westminster who are affected by the Rachman exposé of a few years ago. They are certainly people who are not very often protected by the rent Acts. They are in a category which requires special attention. It is true that they may qualify for housing benefit, but they may not. Even if they do, that does not detract from this failure to treat all domestic ratepayers alike.
As I speak, I am reminded of, I think, the 1980 Act, where we decided to apply the domestic rate poundage to private garages. I know that that is not perhaps exactly relevant, but if in that context it can be applied to private garages, I think that now we should apply it to these very vulnerable people living in such circumstances. I hope, therefore, that the noble Earl will see fit to accept the amendment. I beg to move.
The Earl of Avon: My Lords, I am grateful to the noble Lord for moving this amendment because it gives me the opportunity to explain to the House why the existing legislation concerning the provision of domestic rate relief is framed in the way it is. Section 48 of the General Rate Act 1967 requires rating authorities to provide domestic rate relief of 181/2 pence in the pound on domestic hereditaments which include dwelling-houses as defined by Schedule 13 to the Act, which the noble Lord mentioned. Schedule 13 specifically states that where the whole, or substantially the whole, of the available accommodation is used for the letting of rooms singly for residential purposes then, except in certain special circumstances, the hereditament shall be deemed not to be used for the purposes of private dwelling or private dwellings. Effectively this means that domestic rate relief is not available for hotels, guest houses or houses in multiple occupation.
This amendment is intended to ensure that houses in multiple occupation, such as hostels and buildings divided into bedsits, are covered by the definition of a dwelling-house and are hence eligible for domestic rate relief. I must say at once that it is not clear that the amendment would do this in all cases, because it would seem to be necessary for any agreement between the tenant or licensee and the landlord to include specific provision in respect of payment of rates. That is not the point.
The reason why such types of property are excluded from the definition of "private dwelling" is that they are normally let out on a commercial basis. The courts have taken the view in various contexts that eligibility for domestic rate relief should be related to the use made of the hereditament by the rateable occupier. In the case of hostels and buildings divided into bedsits, as well as hotels and guest houses, that rateable occupier is likely to be the owner or landlord rather than the tenant or licensee. In these circumstances, it is the landlord who will receive the benefit of any domestic rate relief, and there is nothing in this amendment that would require him to pass this benefit on to his tenants. I am sure that this is not what the House would wish.

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The only way of ensuring that tenants do benefit from domestic rate relief is to make it available to them directly, and this can be done only where the building is divided up in such a way that separate rateable hereditaments can be defined and individually assessed. In these circumstances the tenants can be rated separately, and they will then receive domestic rate relief. But in many houses in multiple occupation this is not a practical proposition, particularly when certain facilities are shared. Perhaps more importantly, in many cases it is likely that assessment of the house as a whole will give a lower rateable value than if it were assessed in parts. This will often more than compensate for the loss of domestic rate relief.
I have gone into some detail in response to the noble Lord. I hope that he will agree that these are good reasons for not extending domestic rate relief to such accommodation and for leaving the law as it now stands. I hope that my explanation has helped and that the noble Lord will be able to withdraw his amendment.
Lord Stallard: My Lords, I am grateful to the noble Earl for his lengthy reply. I must confess that I am not convinced that his replies meet the up-to-date situation as we know it in local authorities at this moment. In boroughs like my own—certainly in Camden and many other inner London boroughs—many properties fall into the category that I described. They have not been reassessed or revalued for many years. If they were revalued in the way that I have suggested, they could be covered by the amendment.
In many ways I expected some of the responses that the noble Earl made. I expected him to say that there would be difficulties in assessment because of shared facilities, and so on. It is precisely because of those difficulties that our amendment seeks to rerate the whole house—in other words, to apply domestic rating to the whole house. That would take care of that point. I expected that the noble Lord would say that this would have an effect on the revenue. I can only say that that is conjecture. The noble Lord did not give any statistics about how much it would affect it and so on, and we could probably argue as good a case the other way.
I thought that the noble Lord might well deal at length with the position of hostels and guesthouses, which he did. Of course, we accept that and we did not include those in the amendment. So I feel that, while his reply may have been relevant some years ago, it is no longer relevant given the amount of development and redevelopment that has gone on inside houses, and the number of changes that have taken place that have not been funnelled through the local authorities, their treasurers, and so on. So although I expect and understand that he is not going to accept the amendment, I am disappointed with his reply. Nevertheless, I beg to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Avon The Earl of Avon moved Amendment No. 44:
Page 25, line 27, at end insert—
("Substituted rates and precepts
.—(1) After subsection (8) of section 3 of the Local Government Finance Act 1982 there shall be inserted—
"(9) Where the original rate or precept has been quashed because it is insufficient to meet the expenditure required to be taken into account under section 2 or 11 of the said Act of 1967, subsection (2) above shall not prevent a substituted rate or precept being made or issued which is sufficient to meet that expenditure.
(10) Where, whether by virtue of this section or otherwise, a precept is issued to a rating authority after it has made a rate for the financial year to which the precept relates, subsection (2) above shall not prevent a substituted rate being made by the authority for giving effect to the precept; and a rating authority which makes a substituted rate by virtue of this subsection shall be entitled to recover from the precepting authority in question any increase in its administrative or rate collection expenses which is attributable to that rate."
(2) This paragraph shall have effect in relation to any financial year beginning on or after 1st April 1984.")
The noble Earl said: My Lords, this amendment stems from a commitment given in another place. The new subsection (10) of Section 3 of the 1982 Act is to a large extent in response to a commitment given by Ministers in a Commons Committee when Amendment 100, which was tabled by the Opposition, was withdrawn on an indication being given that the matter would be considered. This amendment is a result of that consideration, and I very much hope that the House will approve it.
On Question, amendment agreed to
Schedule 2 [Rating of moorings]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 45:
Page 25, line 29, at end insert—
("PART I
EXEMPTION OF CERTAIN MOORINGS
.—(1) No mooring to which this paragraph applies shall be liable to be rated or to be included in any valuation list or in any rate.
(2) This paragraph applies to any mooring—

(a) used or intended to be used by a boat or ship; and

(b) equipped only with a buoy attached to an anchor, weight or other device—

(i) which rests on or in the bed of the sea or any river or other waters when in use; and

(ii) which is designed to be raised from that bed from time to time.

(3) This paragraph shall have effect for any rate period beginning on or after 1st April 1985.
PART II
RATING OF MULTIPLE MOORINGS")
The noble Lord said: My Lords, this amendment ensures that certain types of mooring, commonly referred to as swinging moorings, are not liable to be assessed for rates. This is something that was asked for in another place and has been generally welcomed, both inside and outside Parliament. I beg to move.
Lord Graham of Edmonton: My Lords, is the Minister prepared to elaborate the definition of a swinging mooring?
Lord Skelmersdale: Yes, my Lords, most certainly. Swinging moorings are those moorings which are unattached to land and which can be temporarily removed for servicing. Generally speaking, they are those to which the boat or vessel is attached. The boat or vessel is attached by a buoy to the mooring at the bottom of the seabed. The weight to which the buoy is attached is attached by a line to the shore, otherwise it would float away. Therefore, the moorings being temporary, it was thought desirable that they should no longer be liable to be used for rating purposes.
Lord Graham of Edmonton: My Lords, I appreciate the explanation, but I do not think it is good enough simply to advise the House that this is in pursuance of an undertaking given in another place. I think this House is entitled to have an explanation given to it as to the merits of the amendment.
Lord Skelmersdale: My Lords, with the leave of the House, perhaps I should explain that Schedule 2 deals with the rating of moorings and has been the subject of a very large number of representations, mainly from yacht clubs and owners. Among these there is widespread and, I have to say, mistaken belief that the schedule places a new tax on yachting. Let me say quite clearly that the schedule as it currently stands in no way affects the basic rateability of moorings, which has existed for a very long time. In practice, however, many moorings have escaped rating because of the difficulty of identifying occupiers, while others have had to pay rates. This is clearly unfair. Schedule 2 therefore ensures that that liability can be better enforced by providing valuation officers with discretion to assess a group of moorings in separate occupation as a single hereditament in the occupation of the owner.
I quite understand the concern of the yachting community that this may lead to additional financial burden for some of them. Much of that concern is focused on whether it is proper to rate one particular type of mooring, commonly known as a swinging mooring, which, as I sought to explain earlier, consists of a buoy attached to an anchor or weight which lies on the seabed and is designed to be raised from time to time—for example, in the winter or for maintenance. There is some doubt about the rateability of such moorings, many of which may not be sufficiently permanently fixed to the seabed to satisfy the basic criteria for rateability. We therefore agreed in another place to bring forward an amendment to remove any such doubt by making clear that this type of mooring is not liable to be assessed for rates. The amendment that we are now considering does just this. I hope that your Lordships will agree that this is both sensible and pragmatic.
It is sensible from the point of view of the yachtsman because his position is now made entirely clear. It is sensible from the point of view of the rating authority because it will now know exactly on which moorings it can realistically collect rates, whereas up to now the situation has been at the very least indistinct. I do not think that it is appropriate at this time of night to go into details of the way in which the amendment is drafted. We have consulted the main interested parties on its terms, including the Royal Yachting Association, which, I understand, is content with it. Again, I referred to this earlier. The remainder of Schedule 2 is not altered and will apply to all moorings that are not exempted from rates by this amendment.
I hope that it will be thought appropriate for the House to accept this amendment. If not, I shall be happy to answer any further questions which your Lordships may feel, within the bounds of order of the Report stage, should be addressed to me. In the meantime, I beg to move.
Baroness Birk: My Lords, I thank the noble Lord for that absolutely fascinating and very detailed
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explanation. As one who has spent a certain amount of time on boats but who has never got to mooring them and who has also had the experience, on going through a lock, of being unable to jump from the boat to the shore, whereupon my husband fell in due to my efforts (that was the end of our going through locks!), I found the noble Lord's remarks extremely interesting and extremely educative.
Can the noble Lord say whether this applies not just to swinging moorings but to the very smart fixed moorings that one sees around—those with telephones attached, electric light and fresh water that can be connected? If so, is there an exemption for them? Or is this just an exemption for these particular moorings? Can be also say whether the yachting clubs are completely happy about this, and what representations the Government have received? I accept that it is a compromise, and what I would consider a reasonable compromise, but it would be interesting to know how it affects those people who actually use the moorings. I wonder if the Minister would be kind enough to prolong his contribution by giving those answers.
Lord Skelmersdale: My Lords, with the leave of the House, as one who spent a great portion of the Easter Recess sailing and, when I was not sailing, attaching the boat to a swinging mooring, I shall be delighted to answer the noble Baroness's intriguing questions. My honourable friend the Under-Secretary of State has received more than 100 letters in the department on the subject of this amendment or rather, should I say, on the subject of a concern which I suspect the noble Baroness and the noble Lord, Lord Graham, well understand. As a result of answering those letters, I should say that he has been able to convince those members of yachting associations and private boating associations of the justice of the measure that the Government are seeking to bring forward in Schedule 2 to the Bill.
I have never met a swinging mooring that has a telephone or electricity attached to it. If I were to meet such a thing, I would immediately invoke the wrath of the local environmental health officer because it would be a great danger to the public.
Baroness Platt of Writtle: Hear, hear!
Lord Skelmersdale: My Lords, it was the wrong noble Baroness behind me who happened to say, "Hear, hear" at that moment, because I would have expected my noble friend Lady Vickers, who in this House and outside it is a great champion of the environmental health officers, to respond to the remark that I have just made.
I hope that with those few remarks I will have satisfied the concerns of the noble Baroness and the noble Lord opposite. I think for the third time this evening on this particular amendment, I beg to move.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 46:
Page 28, line 12, after ("this") insert ("Part of this").
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 47:
Page 28, line 23, after ("this") insert ("Part of this").
The noble Lord said: My Lords, I spoke to this amendment also with Amendment No. 45. I beg to move.
On Question, amendment agreed to.

British Railways (No. 2) Bill
Brought from the Commons. read a first time, and referred to the Examiners.
House adjourned at thirteen minutes before eleven o'clock.