Local Government Bill

HL Deb 18 June 1985 vol 465 cc225-56

8.58 p.m.

Consideration of amendments on Report resumed.

Lord Elwyn-Jones moved Amendment No. 81AZB: After Clause 48, insert the following new clause:

("Grants for Information and Advice Service.

.—(1) The Council of a London borough and of a district in metropolitan counties shall make such grants to appropriate voluntary organisations as are necessary to ensure that such organisations can provide citizens with information, advice and assistance with regard to the responsibilities and rights of those citizens.

(2) In this section "voluntary organisations" has the same meaning as in section 48(10) of this Act.

(3) The duty created by this section shall not be regarded as restricting the powers of section 48 of this Act.").

The noble and learned Lord said: My Lords, words of wisdom on the law often come from Scotland. There are one or two Scottish colleagues here who have the benefit of that compliment from a mere Welshman. The Royal Commission on Legal Services in Scotland, in its 1980 report, stated: It is pointless to say that all men are equal before the law if some cannot afford to use the law to protect their rights … We believe there is little merit in Parliament conferring rights and imposing duties on citizens (for example, by social welfare legislation) unless at the same time it provides an effective means of informing people of those rights and responsibilities".

The amendment which I propose to move seeks to oblige the councils of the London boroughs and of the districts in the metropolitan counties to: make such grants to appropriate voluntary organisations as are necessary to ensure that such organisations can provide citizens with information, advice and assistance with regard to the responsibilities and rights of those citizens".

Those running the relevant organisations fear—and nothing said so far during the progress of the Bill has dispelled their fears—that large numbers of information, advice and law centres will have to curtail their services seriously and some will have to close down altogether during the next four years unless changes are made in the financial provisions of the Bill. If that happens, the resulting damage to our society could well be very serious. In many ways those voluntary organisations up and down the country, and in particular in the areas with which we are concerned, are crucial in holding our society together at a time of increasing public confrontation and potential disorder.

Clause 48 of the Bill provides that a scheme may be set up—and we had an earlier argument as to whether that should be made mandatory—to enable grants to be made to voluntary organisations whose work spans more than one borough or district. Again as we learned earlier, such a scheme can be set up only if 51 per cent. of all the districts and boroughs in the area concerned agree to its introduction. Once the scheme has been set up a two-thirds majority of all the districts and boroughs in the area concerned is needed for any particular project to receive funds. The money that each borough or district will be expected to contribute towards any collective scheme will have to come from its own general funds. The Government are not giving a penny of additional money.

The Government will place a limit on the total expenditure to be incurred under the scheme, but have not yet finally decided what the limit will be. The future is bleakly uncertain. The transitional arrangements so far announced are still far from satisfactory. For all the voluntary organisations currently funded by the GLC and the metropolitan counties, the Government have offered £15 million in 1986–87 to replace the over £60 million now provided. The rest—the missing £45 million—will have to come from the boroughs and districts. Is that likely seriously to be forthcoming? As to the trust fund which was announced during the Committee stage of the Bill, in several years' time that may provide £1 million a year to be awarded to voluntary sector projects in London. That is of course welcome as supplementary funding, but it cannot constitute core funding to sustain the basic public services which are provided by the voluntary sector.

Most of the advice and information agencies or law centres are situated in areas which will be affected by abolition, rate capping, rate support grant penalties or a mixture of the three. Of the major advice and information networks which make up the Advice Services Alliance, it is estimated that over half will suffer severe financial cutbacks; yet, as the National Consumer Council has said, the demands placed upon the services of the Citizens' Advice Bureaux and the other advice and law centres have never been greater. It adds: We do not think in current and foreseeable financial circumstances that it is realistic for the Government to expect the lower tier authorities to pick up the tab for expenditure on advice services now attributable to the GLC and the metropolitan counties".

The complexity of our society is increasing, and there is a growing need for information and advice. This year the CABs will have nearly 6 million inquiries. It is unfortunate that because of duties elsewhere the noble Lord, Lord McGregor of Durris, who I think is the president of the CABs, is unable to be here, as I am sure that his name would have appeared over the amendment. The law centres are under very great pressure, and because of my special interest in them I hope that I shall be forgiven if I say a little about them.

When on May 8th I asked the Government what steps were being taken to protect law centres from closure, I received a very dusty answer, despite the fact that there is now general appreciation of the great value of the 55 law centres up and down the country to our society and to the administration of justice. In its report in 1979 the Royal Commission on Legal Services said: The impact of law centres has been out of all proportion to their size, to the number of lawyers who work in them and to the amount of work it is possible for them to undertake. The volume of work they have attracted has shown how deep is the need they are attempting to meet".

The report continues: The Lord Chancellor's Legal Advisory Committee summed up informed opinion thus in its evidence. '… We think that law centres are, and should be, here to stay and that they are making a vital contribution to legal services'".

Then the Lord Chancellor's Advisory Committee on Legal Aid pressed the Government, in its last report, to take immediate action to unify central support for legal services and ensure the survival of services threatened by changes in local government, in particular the law centres dependent upon the urban programme. So the danger and the risk was identified by those authoritative bodies. It then went on to say that law centres in particular should be treated as an essential part of the national network of legal services and the Lord Chancellor should take on responsibility for their core funding.

Alas, the Lord Chancellor has indicated that it is within neither his power nor his authority so to do. In a letter which I had the privilege of receiving from the Lord Chancellor on 21st March this year he said: decisions relating to the urban programme and to the funding of individual projects within it are matters for the Secretary of State for the Environment and not for me.

So then I looked towards the Secretary of State for the Environment. Surprise, surprise, his reponse was this. He wrote: It is, and always has been the case that projects are given urban programme support for a limited period only … It is then for the local authority to decide on main programme funding.

In a large number of cases that urban aid has been or is being terminated. Thus the two Ministers concerned simply pass the buck, if I may put it in that way, to those least able to sustain it; namely, the local authorities.

It is in the light of these unhappy developments that I move the amendment to require the London borough councils and the metropolitan county councils to make such grants as are necessary to voluntary organisations, to ensure that they can provide citizens with information, advice and assistance with regard to the responsibilities and rights of the citizen. It is the Government, by central funding, who should undertake the financial burden in this field. It is not right to pass it on to the local authorities. However, if the Government will not take this on then the unhappy local authorities must do so.

We must not turn a blind eye to this vital aspect in the provision of our social services, particularly for those most in need of advice and defence. If we are to make a reality of equal access to justice, something has to be done over and above the miserable proposals of the Government in this Bill and in its propositions. I accordingly move the amendment in my name.

Viscount Buckmaster

My Lords, it gives me great pleasure to support this amendment, so ably moved by the noble and learned Lord, Lord Elwyn-Jones. Perhaps he will agree with me that, although it is certainly a much more distinguished amendment, it is a first cousin to the one I moved yesterday evening, which would ensure the continuance of the information provided by the GLC in connection with claiming benefits, and so on.

Very briefly, without repeating what I said late last night, I would say that in this country there is an enormous need for information in those spheres. I think your Lordships will agree that it is particularly apparent among the deprived sections of the community. I am thinking, for example, of the elderly widowed who cannot go out and those who may not have television or may not have even a radio. Then of course there are the ethnic minorities, about whom, as many of your Lordships know, I am deeply concerned. Their problem in many cases stems from the fact that they do not speak English. Certainly many do, but many do not, particularly elderly Asian women such as Pakistanis and Bangladeshis.

Therefore I think it is absolutley essential that some provision be contained in this Bill for the provision of information, assistance and advice. I fully agree with the noble and learned Lord that the provisions in the Bill at the moment are totally inadequate in this context.

Baroness Masham of Ilton

My Lords, I have the honour to be president of an organisation called Dial UK. It has 76 local groups throughout the country that give information to disabled people. Many of the people who work for Dial are disabled themselves. Many of their problems are most complicated and difficult. One of the jobs that they do is to try to help disabled people understand the very complicated legislation that we in Parliament churn out. I hope very much that the Government will be able to accept the noble and learned Lord's amendment, which I have great pleasure in supporting.

9.15 p.m.

Lord Campbell of Alloway

My Lords, any professional worthy of his salt would have to support, irrespective of party, the spirit behind the amendment. The question is where the money is to come from. The other question is the proper organisation and control of the system under which such an advice service operates. It is plain that something must be done. I would hope that those more able than myself to think of sources of funds that are available would be able to provide the answer.

Baroness Faithfull

My Lords, I should like briefly to support two matters to which the noble and learned Lord referred. Those of us in the social work field recognise that without the Citizens' Advice Bureaux the statutory services would be overwhelmed with work which they are now saved from doing. Although I was a statutory worker in a social services department, I have to admit that the voluntary organisation in this area was very much better than the statutory service. Secondly, I support the noble and learned Lord where law centres are concerned. Here again, those who cannot afford fees for solicitors and who are not really au fait with the legal aid system depend on law centres. With regard to what my noble friend Lord Campbell of Alloway had to say about where the money is to come from, may I ask my noble friend the Minister whether this is the kind of thing with which the trust could help? Or am I off beam entirely?

Lord Elton

My Lords, I have listened with great interest to your Lordships' remarks about the amendment courteously and clearly recommended by the noble and learned Lord at the beginning of this post-dinner debate. I am well aware of the important and valuable work carried out by our voluntary advice services, both legal and other. Local authorities have traditionally been a major source of support for these organisations. It is the Government's intention that they shall continue to be so. I need hardly remind the House of the substantial support that the Government have given the National Association of Citizens' Advice Bureaux through the Department of Trade and Industry. Following the Lovelock Report, this grant-in-aid has been significantly increased and now stands at over £7 million. Some of this money is directed through local advice bureaux but most of their support is provided by local authorities, which also fund other sorts of advice, information and citizens' rights centres.

There is no question that local government has power to make these grants. I believe that the £10 million that local advice bureaux receive is evidence of its will to support these services. It is important to recognise this considerable commitment already shown by district and borough councillors for funding advice centres. The amendment seeks to require local authorities to provide these grants. The amendment is therefore quite different from Clause 48. The clause provides new powers that the boroughs and districts need in order to take on a role which the GLC and the MCCs presently perform. The effect of the amendment would be different. It would be to describe in statute the priorities which a local authority must have in making those grants.

I recall making this point with some force to your Lordships' Committee on the Bill. I did so because looking around at a rather better populated Chamber than we have at the moment I could see almost no one who was not deeply committed to one voluntary activity or another. There can hardly be a gathering anywhere else in the world of people who habitually gather together for other purposes and who individually play such diverse and important roles in the voluntary field. I asked your Lordships to consider for a moment what would be your individual reaction if a Peer or Peeress should write into the Bill a specific requirement to fund his or her favoured activity and not their own. Your Lordships at once perceived what would follow. The Marshalled List would be crammed to overflowing with similar amendments on an army of other activities.

The noble and learned Lord himself has proved that the temptation would be irresistible. The Committee stage amendment sought to put Citizens' Advice Bureaux alone on to this privileged list. That was in the name of the noble Lord, Lord McGregor of Durris, who had a strong CAB interest. Now the noble and learned Lord takes over the amendment. He has a strong legal interest. Lo and behold, law centres are to share this privileged niche.

In the end it must be best to leave these decisions with local councillors, who are in closest touch with the needs of their areas. We cannot determine their priorities for them. Of course, I understand that advice bureaux, like other voluntary bodies, seek the greatest possible certainty about their grants in 1986. The Government are already doing a great deal to ensure continuity by increasing central Government support over the transitional period and by adjusting the mechanisms of local government finance so that councils will have their resources to take on their new responsibilities.

With all respect, the noble and learned Lord, Lord Elwyn-Jones, spoke as though the local authorities in question would not have been relieved of a single penny of the very considerable precept burden which at present they are paying and which contributes in part to the very purpose to which he now wishes them to contribute and to which they will be better able to contribute as a result of not having to pay the precept.

I can confirm to my noble friend Lady Faithfull that in principle, if a voluntary organisation falls within the terms of Clause 48, it is eligible for support from the trust, when we have provided it. I think that that was the question she asked me.

I ask your Lordships to consider the record of support by district and borough councils to date and to think again about whether it is right for this House to require them to make grants of a particular sort without requiring them to make others, because it means that these favoured activities will receive the first cut, as it were, and the more we add to them, the less there will be left. I believe that it is a bad principle to single out one or, as it now is, two or, as it later might be, three, or perhaps after that five or 17 special activities as activities which must be carried out by statute. I hope that your Lordships will share my view that, although I have no feeling at all against what the noble and learned Lord wants—which is the continuation of this service—as guardians of the other services, which would also be funded from the same source, we ought not to pick these out by this amendment.

Lord Elwyn-Jones

My Lords, If I may say so. I find that reply highly disappointing. The necessity for legal aid and for services of the kind provided by the CABs is known and acknowledged everywhere to be vitally important. The Government have told us that neither the Lord Chancellor's Department nor the Secretary of State for the Environment will take responsibility for it. The whole responsibility is passed back to local authorities, which are now subject to fierce financial restriction, rate capping, and controls of various kinds. It is in that situation that this burden is passed back to them.

What will the priorities be? The legal services may well become one of the early non-priorities. What happens then? Are all these bodies to be wound up? The Government are nurturing a very dangerous future for themselves. This society is now under considerable harassment. Crime is on the increase. The risk of public disorder, as we have seen, is growing. Unless a network of legal means of securing redress is available to the citizen, those citizens who are deprived may take their own remedy and not reciprocate by their own observance of duties, which the rule of law requires. The risks are serious and I am sorry that they are so lightly undertaken and looked at by Her Majesty's Government.

On Question, amendment negatived.

Lord Bruce of Donington moved Amendment No. 81AZC: After Clause 48, insert the following new clause:

("Economic Development Authorities.

.—(1) On the abolition date there shall be established for Greater London and each of the metropolitan areas a body corporate which shall be known as the London Economic Development Authority, or by the name of the county with the words "Economic Development Authority" as the case may be, to which the Secretary of State shall transfer the functions to which this section applies.

(2) Each authority shall consist of members of the constituent councils appointed by them to be members of the Authority.

(3) The constituent councils in relation to a metropolitan economic development authority shall be the councils for the metropolitan districts comprised in the county, and for the London Economic Development Authority shall be the councils of the London boroughs.

(4) The functions of the Economic Development Authority in each area shall be—

1. (a) funding whether directly or through any body corporate whose object includes the assistance, promotion and encouragement of existing and new industrial or commercial enterprises in Greater London and the metropolitan county areas by way of grants, loans, guarantees or other financial assistance;
2. (b) the provision of research and information necessary to the development of programmes appropriate for the economic, industrial and employment development of the areas concerned:
3. (c) the provision of training projects, or funding of such projects whether directly or through any body corporate, appropriate to the employment needs of the areas concerned.

(5) An order under this section may contain such supplementary and transitional provisions as the Secretary of State thinks necessary or expedient, including provisions for the transfer of property, staff, rights and liabilities and provisions amending any enactment or any instrument made under any enactment.").

The noble Lord said: My Lords, I beg to move Amendment No. 81AZC, and with your Lordships' permission I propose to speak, albeit very lightly, to Amendments Nos. 81AZD and 81AZE. Amendment No. 8JAZD: After Clause 48, insert the following new clause:

("Joint committees for economic development.

.—(1) The councils of the districts in a metropolitan county or the boroughs in Greater London shall not later than the abolition date establish a joint committee of members of these councils to undertake the duty contained in subsection (2) below.

(2) It shall be the duty of a joint committee established under subsection (1) above to provide funds and make arrangements for the provision by them of funds for assistance to individuals and organisations wishing to establish, or maintain industrial, commercial or service activities which will provide or retain employment within the area of that metropolitan county or Greater London as appropriate.") Amendment No. 8JAZD: After Clause 48, insert the following new clause:

("Financial assistance for economic development.

.—(1) The constituent councils in a metropolitan county or Greater London shall not later than the abolition date establish a fund to provide financial assistance to industry in accordance with the provisions contained in this section and for the purposes set out in subsection (3) below.

(2) The constituent councils may provide assistance where at least two-thirds of them are of the opinion that—

1. (a) the financial assistance is likely to provide, maintain or safeguard employment in any part of the area of the metropolitan county or Greater London, and
2. (b) the undertaking for which the assistance is provided is or will be wholly or mainly in that area.

(3) The purposes mentioned in subsection (1) of this section are—

1. (a) to promote the development or modernisation of an industry,
2. (b) to promote the efficiency of an industry,
232
3. (c) to create, expand or sustain productive capacity in an industry, or in undertakings in an industry,
4. (d) to promote the reconstruction, reorganisation or conversion of an industry or of undertakings in an industry,
5. (e) to encourage the growth of or the proper distribution of undertakings in an industry.

(4) Financial assistance may be given on any terms or conditions and by any description of investment, lending or guarantee or by making grants.

(5) In this section "industry" unless the context otherwise requires, includes any description of commercial activity and reference to an industry includes references to any section of an industry.

(6) Financial assistance under this section shall be provided by one of the constituent councils designated for that purpose by the other constituent councils and that council shall manage the fund in accordance with arrangements which shall be agreed between the constituent councils.

(7) The constituent councils shall be required to contribute to any expenditure of the designated Council incurred under this section in proportion to the rateable values of their respective areas.

(8) The power conferred by this section shall not be regarded as restricting those conferred by section 137 of the Local Government Act 1972 (power to incur expenditure for the purposes not authorised by any other enactment) and accordingly the reference to any other enactment in subsection (1) of that section shall not include a reference to this section.").

These three amendments are concerned with the future of economic development in the areas covered by the GLC and by the metropolitan counties. Perhaps I should say at the outset that I do not expect to obtain a vote majority in your Lordships' House tonight. Comments have been made in various publications as to the composition of that majority, and I propose to make no further remarks on that. But with your Lordships' permission I shall use my best endeavours at any rate to win the argument. Ultimately in the public eye it is the argument and the cause which matter, notwithstanding the harsh arbitrament of arithmetic, which perhaps in somewhat artificial circumstances will militate against the acceptance of any one of the amendments that I am venturing to put forward tonight.

The question to which I invite your Lordships to address yourselves is whether unemployment is a serious problem. The very subject of unemployment gives rise to all kinds of sentimental observations as to its undesirability, mainly by those who have never experienced its scourge or known its degradations. It is germane to the argument that I venture to put before your Lordships this evening that any endeavour that is made in modern society right across the board by whatever body—whether it be private, whether it be local authority, whether it be public board, or whether it be by co-operation between all three—and the Government is in itself the correct, honourable and moral thing to do at this time in our country.

It is not possible—and we all know this—to make a really significant impact upon unemployment within a short period of time. The damage done in the last five years has been so deep that it will take a long time to recover from it. But whether it be 40,000 or 50,000—which are insignificant enough figures in terms of the condition of this country at this time—added to the employed list from the unemployed list, it means that there is less suffering, less anguish, and less despair among 50,000 or so families. This at any rate is something.

The significance of this is well appreciated by Her Majesty's Government. Even the Minister of State, Mr. Norman Lamont, in commenting on the advantages of inward investment in the United Kingdom on 23rd May last, said that it was creating more than 28,000 jobs and preserving nearly 18,000 others. He produced that as a justification for inward investment. We on this side of the House would be the last people to deny that or to deprive the Government of what vicarious pleasure they may gain from it. Are efforts to relieve unemployment, even on this scale, worthwhile?

9.30 p.m.

The noble Lord, Lord Elton, himself, at Question Time yesterday, was commenting favourably on the work done by the Docklands Development Corporation, aided by the Government and in collaboration with the local authorities. He said that 4,000 jobs were important. For our part, we could not agree more. The various bodies that exist at present under the existing legislation—the Greater London Enterprise Board, supported by the GLC and the metropolitan counties themselves—are, as they stand now, contributing almost exactly that figure, between 50,000 and 55,000 jobs a year.

Then, Her Majesty's Government, when considering the activities of the GLC and the metropolitan counties—which, oddly enough, were dominated by the Labour Party, but that presumably is a political coincidence—suddenly decided that these bodies should be abolished. The savings, we would add, were estimated at one time to be £100,000, because it was supposed to be a cost-effective exercise, but we now find out through Coopers and Lybrand (who are a very eminent firm of consultants employed frequently by Her Majesty's Government and by local authorities) that the abolition costs are likely to range between £122 million and £167 million. Therefore the Government must consider whether the maintenance of the economic arms of the GLC and the metropolitan counties are cost effective.

The present position is that this has been proved conclusively. Time unfortunately prohibits my documenting it in any great detail even though I assure the noble Lord that I have the full particulars here and am prepared to answer any questions on them. It is quite clear that the Greater London Enterprise Board has been providing jobs to the tune of some 4,000 at an expense far lower than that borne by the state in the payment of unemployment pay and the resultant total burden on the Exchequer by shortfalls in taxation and otherwise: or, as the Select Committee of your Lordships' House put it, £5,000 per annum, at that time, per job. Both the GLC, through the Greater London Enterprise Board, and the metropolitan counties in their own different ways, have been responsible for the creation of new jobs or the preservation of old ones at far less cost.

I should have thought that that would immediately have aroused the support of the Government for continuation. Cost-effectiveness is cost-effectiveness. It has been enshrined in various items of Government legislation in the past three years. I remember well the Local Government (Financial Provisions) (No. 2) Act 1982, as I think it was, in which it was spelled out in some detail. In the event, the GLC have provided some £60 million in London in collaboration with private funding to the tune of £40 million. By any standards I would have thought that that would have been regarded by quite impartial people, people who did not have to obey the party whip, people who did not confuse conventional chivalry with intellectual cowardice, as a very admirable thing that should be supported. GLEB, the Greater London Enterprise Board, has been a highly successful operation in London. To do anything other than to encourage its activities is really a gross insult to the nation as a whole.

As far as the metropolitan counties are concerned, they operate in a slightly different way. The enterprise boards, the corporate bodies, occupy a much less important proportion of their aid spectrum to industry and to their regional economies. They make loans and grants; they have been responsible for wage subsidy schemes; they have supported co-operative development agencies—the agencies to which such eloquent support came from the Government Benches during the passing of the Bill relating to co-operative development agencies, to various enterprise boards and also to land and property development.

As I say, so far as the metropolitan counties are concerned, the savings in jobs may be classified as follows. I have the individual figures for individual authorities if Her Majesty's Government wish to prolong the argument unduly. I shall merely summarise them. In respect of loans and grants, some 18,243 jobs have been created or saved in the years 1979–80 to 1983–84. In the case of wage subsidy schemes, some 6,665 jobs have been created or saved. So far as the aid given to co-operative development agencies is concerned—so beloved, we were told, when debating the recent Bill of Her Majesty's Government —some 826 jobs have been created or saved. So far as the development boards are concerned—and they occupy a much smaller proportion of the spectrum than in the case of the Greater London Council—some 4,882 jobs have been saved; and a further 14,400 jobs have been saved in the course of land and property development, giving a total of some 45,000 jobs.

If the Government were to come to the House or were to go to the country—and it need not be specially emphasised for the purposes of the Brecon and Radnor by-election—and were to say, "For reasons that we have already given and which we hope we have explained adequately to you, we prefer to abolish two-tier government, the GLC and the metropolitan counties; nevertheless, we intend to support with every means in our power the efforts that have been made in the past by the metropolitan authorities and by the GLC", the country would then tend to regard their arguments as reasonable. But there has been no enthusiasm whatsoever for the efforts of the GLC, through the Greater London Enterprise Board, and the metropolitan counties through the various agencies that I have described.

There has been nothing but acid poured on the efforts that they have made. Perhaps there has been a polite pat on the back here and there—perhaps the conventional politeness that passes for reasonableness on the Government Benches. But the country knows quite well the difference between wholehearted enthusiasm and people who, for party political reasons, are dragging their feet.

I have given the classifications under which these bodies have worked but I should like your Lordships to bear in mind what we will call, from the accounting point of view, the technical aspects. I do not use the term narrowly, but in the accounting sense. It is so easy to be impersonal, when one is debating an Act of Parliament, when referring to public boards, the Greater London Enterprise Board, or special bodies that are helped by the metropolitan counties. It is so very easy to take them in the abstract and to have no knowledge of, no regard for and no sympathy with the people who are there doing the job of trying to create and preserve jobs—the jobs to which the Government ought to have dedicated themselves years ago.

It should therefore be remembered that these organisations to which I have referred have a number of qualities implicit in the capabilities of the skilled and dedicated staff who have up to now performed their functions. The technical aspect is this. They are able to supply management assistance to enterprises; they are able to assist in personnel assessment; and I believe, from reading some of the Government papers on this matter, that there is a growing appreciation of the need for personnel assessment. That is not to be confused with party nepotism.

There are the technical people, the engineers, the people skilled in electronics, the people skilled in construction and in the various other professional aptitudes. They incorporate among their number people who are skilled investment appraisers. There are accountants, there are inevitably lawyers—because presumably we are still a law-abiding country—production engineers, those engaged on research and development, those engaged in administration, and those engaged and skilled in business training. These are the skills that have been accumulated over the years by these bodies, by the metropolitan counties and by the Greater London Enterprise Board: skills spread over a wide area and which even the noble Lord will not be able to convince either me or the House are within the resources of individual district councils covering a small area.

9.45 p.m.

If the noble Lord cares to pay attention to Paper No. 127, which is the report of your Lordships' Select Committee on Science and Technology, which considered this question, he will find that it states: In conclusion the Committee repeat their conviction that the administration of local government in Greater London and the metropolitan counties depends for its effectiveness on preserving the integrity of many of the specialist services built up by the GLC and the county councils. These authorities have demonstrated their ability to respond positively to the challenges of scientific and technical development. Further challenges lie ahead. The great conurbations require specialist staff and facilities to meet them. Economic, efficient and forward-looking services demand excellence, integration and continuity. The existing services should be improved, not by being dismembered but by being encouraged to progress. Centres of excellence are slow to develop but easy to destroy"— and especially, if I may add, within your Lordships' House by majorities who may not always, despite the arithmetic, be able to devote the time to study matters in the same degree and to the same extent as a Select Committee of your Lordships' House.

That is not the only opinion. There is also the opinion of a very renowned firm, well known to the Confederation of British Industry, to the Association of British Chambers of Commerce and to some of the principal private companies up and down the United Kingdom which use its services. This is what it has to say on this matter: The strategic and conurbation-wide view co-ordinating role of the metropolitan county councils will be lost. This will lead to a decline in service in the following respects. The metropolitan areas will find themselves at a disadvantage in competing for mobile investment. The present intense and often wasteful competition will inevitably increase. The smaller metropolitan districts will lose out to the major cities and the metropolitan county areas as a whole will lose out relative to the rest of the country whereas the shire counties will still have an important promotional role".

It goes on to say: The representation lobbying role of the county councils will disappear, again leaving the metropolitan areas at a disadvantage. This role is important not only in attracting inward investment but also in making representations to the Government and the EEC on matters affecting major industrial sectors and the economy of the conurbation".

It continues: The proven expertise of the MCCs in obtaining grant-aid from the EEC and other sources will be lost".

Then it says: Many valuable local economic initiatives can only sensibly be justified on a scale larger than that of smaller districts. The close relationship between economic development and other strategic services, especially land use, planning for major industrial developments and highway planning on a more than local scale will be fragmented and in many cases lost".

Furthermore: The loss of the county-wide level of economic development activity will have its most serious effects in the smaller districts and in those places—for example, Merseyside—where specialisation by agreement is further advanced. In the longer term the overall capability of local government to promote and assist the economy of conurbations is likely to be seriously weakened".

It concludes with the observation, which I trust the Government will note, that it is almost inconceivable that the Government should, at a time of such high unemployment, seek to abolish the one local, democratic organisation with the resources and powers to protect its areas effectively on a regional, national and international scale. These observations do not come from the publicity department of the Labour Party headquarters at Walworth Road. They come from people who are far more skilled in their own particular sphere than many Ministers are in their own sections of Government.

But, to top it up, there are the observations which were made in a report published under the auspices of the Department of the Environment and the Department of Trade and Industry themselves. This report was published in December last and is called Urban Industrial Change. This is what the Government's own commissioned report said: To minimise the fragmentation of agencies responsible for urban economic development, all the policies proposed are probably best implemented by local authorities who are closely in touch with the problem. Within the metropolitan counties implementation should be the responsibility of the county councils and the GLC in London. The county councils are the appropriate bodies because of their experience in promoting industrial development and because of the need to adopt co-ordinated policies within the conurbation.

Those are the observations that have been made.

I have no doubt that when the noble Lord comes to reply he will, with his usual felicity, be able to say, "Well, of course, all we have really done in doing this is to pass the responsibility to the district councils", and, as he said in reply to my noble and learned friend Lord Elwyn-Jones, he does not want to interfere with the priorities. The noble Lord knows just as well as the House that all this is very hollow. The noble Lord knows perfectly well, and the noble Earl, Lord Gowrie, also knows quite well, that, when it comes down to the "muttons" of it, the Government, by rate capping and by the fixing of cash limits, can in fact ultimately extinguish every activity of which they themselves do not approve. He knows that quite well.

The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie)

No, I do not.

Lord Bruce of Donington

My Lords, the noble Earl will have his time to explain, and he should be able to do it. That is the observation I have to make on the first amendment. But, like the noble Lord, Lord Elton, I have a certain flexibility of mind, and the next amendment, No. 81AZD, which we regard as an inferior solution, nevertheless comprises and takes into account the need for a county-wide economic development service as set out in this amendment. It may not be as good as the amendment I have just moved, but, at any rate, it is a step on the way.

Similar observations apply to Amendment No. 81AZE, which, once again, is less desirable than the first one that I proposed and even less so than Amendment No. 81 AZD. I commend it to the noble Lord as being a fall-back position, with which, even at this late hour, he might be constrained to agree. I should be only too happy to withdraw my amendments if the House as a whole were convinced that the Government really meant business in giving every kind of encouragement to these bodies that have served the nation and their localities so well over the last four years. We shall not be satisfied with weasel words, and I am quite sure that, with that in mind, the noble Lord will address himself with his usual fluency to trying to persuade us that the Government are wholeheartedly behind the purposes of these amendments. I beg to move.

Viscount Massereene and Ferrard

My Lords, I should like to remind the noble Lord who has just sat down that 20 years ago—I agree that he was not in this House then—the Socialist Opposition kept this House up until breakfast every morning under the leadership of Lord Morrison, as he then became, fighting the formation of the GLC. The noble Lord hinted that we are playing party politics, but who was playing party politics then? We need not have had this Bill at all if the GLC had behaved financially responsibly, but, as we all know, it has not. It has spent hundreds of millions. It has a budget far larger than that of some European countries. Mr Livingstone himself spent over £12 million of the ratepayers' money to get himself back into power as head of the GLC. So with due respect to the noble Lord, he is rather exaggerating the facts of financial life today.

We all regret unemployment, but I rather doubt whether the abolition of the GLC will cause any unemployment. However, as the noble Lord's party were all for the LCC, and now we are going back to more or less that same system, it is surprising that he is so very adamantly against the Bill.

Viscount Buckmaster

My Lords, this amendment brings us back to the well-worn theme of the need for an overall authority. I have the greatest respect for noble Lords on the Front Bench and many other noble Lords in your Lordships' House who know infinitely more about the problems of London and the metropolitan counties and the intricacies of this Bill than I do. But I must confess that I remain largely unconvinced by the arguments so frequently deployed that the London boroughs and the district councils can cope adequately, in areas covered by this amendment and others, with the problems that will face them after abolition.

I do not wish at all to denigrate the boroughs or the district councils; on the contrary, I have great admiration for much of what they do. But the fact is—and I think this is indisputable—that there is an enormous range of difference between their performance. Some perform very well; some perform much less well. There are all sorts of differences. There are differences of aims, differences of methods, differences of motivation and, above all, differences of financial resources. So I feel very strongly that, as envisaged in this amendment and in several other amendments which have been lost in your Lordships' House, we need an overall co-ordinating body.

If I may be permitted to repeat a phrase that I used when speaking to an earlier amendment, we need an overall body with an advisory role, a co-ordinating role and a watchdog role. But after abolition who is to provide the advice? Who is to provide the coordination? Where is the watchdog? I must return to the amendment.

The noble Lord, Lord Bruce, has spoken in some detail about the Greater London Enterprise Board and the splendid work it does. The noble Lord might also have mentioned the London Co-operative Enterprise Board, another splendid organisation, which was established in 1984 with a fund of £1 million and provides small loans of up to £25,000. A quarter of a million pounds has already been lent to no fewer than 22 co-operatives, and one-third of a million pounds has been set aside to help ethnic minorities, which I think is tremendously important. 10 p.m.

The Greater London Enterprise Board—I do not think the noble Lord mentioned this—has been supporting many small business enterprises, again with particular emphasis on those businesses which are run partly or wholly by disadvantaged people and the ethnic minorities. It is encouraging to learn that £1 million has been invested since June 1983 in 25 projects designed to help the ethnic minorities. I should like to make an important point in this regard. Some of these businesses straddle the boroughs' boundaries.

Perhaps I may refer particularly to the clothing and furniture industries which are centred in the most deprived part of London, formerly known as the East End, although I do not think we use that term any more. These industries are found in the three London boroughs of Tower Hamlets, Hackney and Islington. All three of these boroughs are rate-capped, so how can one envisage the continuance of this splendid activity unless there is some co-ordinating body? How indeed can such activities be maintained, let alone expanded? So much for the GLC.

As for the metropolitan counties, about which, admittedly, I know much less, they too are convinced that a county-wide economic development service is essential in the metropolitan areas. The metropolitan counties have grave misgivings in various areas. They are concerned, for example, at the loss of the lobbying and representative role of the county councils. They are concerned also at the loss of the proven expertise of the councils in so many fields, particularly in the sphere of obtaining grant aid from the EEC and from other sources. They are concerned of course at the loss of the county-wide level of economic development activity. These are very real and very reasonable concerns. I feel that this amendment before us goes some way towards solving the problem.

Finally, what is to happen to all the expertise so carefully accumulated by the GLC and by the metropolitan counties in this and in other spheres over so many years? I hope that the noble Earl can give us an encouraging answer.

Lord Northfield

My Lords, I hope to deal in particular for a few moments with what was said at the Committee stage about this matter and perhaps to push the Government a little further along the road that they seemed to be half willing to travel when a reply was made to the debate at that time. But before I do so perhaps I should say that I have a double interest here.

First of all, for some years I was president of the Federation of Industrial Development Authorities, the group of local authorities which are particularly concerned to cherish and extend their role in helping industry. Secondly, as the chairman of a particularly difficult new town—one which was a decaying urban area—I know the effort, the resources and the manpower which have to be put into urban renewal and the rebuilding of an industrial economy. That is the background against which I view what the Government, in effect, are now proposing to do in the Bill.

The noble Earl who is to reply, may not realise that we have been dealing with this matter for six years in debate after debate in this House about the legitimate role of local government in industrial development. When the Government came to power in 1979 it was thought by them that all the activities of local authorities were superfluous, that private enterprise would do everything, and that efforts by local authorities could be abandoned and steadily closed down. We kept quiet at the time—that is, the Federation of Industrial Development Authorities—but then lots of things began to happen.

The Coopers and Lybrand report of that time—not the report to which my noble friend was referring—pointed out that in many cases public investment was needed in small enterprises, in providing small business premises and so on, and that the Government could not rely on private enterprise to do that. Then there was an internal group within the Department of the Environment under Sir Wilfred Burns, the then deputy secretary. That group looked into the use of the powers of Section 137 of the Local Government Act under which local authorities can spend up to a 2p rate on such activities. The group did not uncover any particular abuses by local authorities. Its final words were: Local authorities should be able to plan for employment as a positive activity, working alongside the private sector and central government". That was the department's own internal working party.

Then came a consultative paper by the Government. All the time we were pushing quietly for the Government at last to recognise the legitimate role of local authorities in this matter. The Government's own consultative paper stated: The Government agrees with the Burns group conclusion that local authorities also have a positive role to play in sustaining and fostering local economies and employment. How best they can do so will differ between one area and another". The Government finally moved from a position of utter hostility just three years before to accepting and beginning to applaud the role of local authorities, particularly in helping small businesses, in the way that their department's researchers had shown. At the same time there were surveys by the Association of District Councils which showed exactly how local authorities were spending their 2p rate. None of that spending was cause for blame or could be criticised in the vast majority of local authorities. Very responsible use was made of the 2p rate, mainly by helping small businesses. In the end we had even the CBI acknowledging that it, too, accepted that such was a legitimate role for local authorities, particularly with regard to helping small businesses.

The Government then tried to reduce the 2p rate to a ½p rate. We had in this House a battle in which, I believe, we can claim we had a victory. We persuaded the noble Lord, Lord Bellwin, to leave the 2p rate alone and not reduce it to a ½p rate. I say that to show how the Government's thinking has evolved over the years. I hope that we are now at a stage where the Government are reasonably sympathetic to what local government has been doing and do not have many areas in which they will find fault.

But what the Bill is now to do is this. It will reduce spending in the most decaying urban areas—the metropolitan counties; for example, my area of the West Midlands—from a 4p to a 2p rate. In other words, the district councils or boroughs which will inherit the powers will continue with their 2p rate spending power but the 2p additional spending power of the metropolitan councils will disappear. That seems to me foolhardy, short-sighted and, if I may say so, rather stupid.

The justification given by the noble Lord, Lord Elton, at Committee stage was, first of all, that some local authorities in those areas are spending under the 2p limit; they can begin to spend up to the 2p limit and that will make up for what is lost by the disappearance of the "met" counties. That would be all right if it was, so to speak, big enough money. But if he takes the West Midlands, for example, he will see that two of the areas, Wolverhampton and Sandwell, which are pretty badly blighted and need promotion to restore their industry, are already up to the 2p rate which is mainly spent on industrial promotion. There is no room for them to start spending more to make up for the disappearance of the "met" counties.

The noble Lord then acknowledged—and I come to the more important point—that on 5th October his right honourable friend in another place said that he was prepared to consider an increase in the 2p limit for the smaller authorities if present funds proved inadequate. That was forced out of the noble Lord in a winding-up speech. How much more proof does he want? Some of the authorities in the most hard pressed and decaying areas are already up to the 2p limit. That can be established simply by looking at their spending pattern.

The noble Lord went on to say that in any case the Government would wait for the Widdicombe Report. That report is not about this part of the 2p rate spending. As I understand it, the investigation is into the possible abuse by local authorities in using their 2p rate to spend on propaganda. It is not about whether they are spending it on industrial development.

Where have we arrived? Do the Government really mean that if the need is proved they will increase the 2p rate to make up for the disappearance of the "met" counties? If so, what more proof do they want? Why after Sir Wilfred Burns' inquiry, their own consultative paper which I mentioned at the beginning, and the investigation by the Association of District Councils do we need yet more investigation as to whether local authorities are behaving responsibly in spending money on industrial development and promotion? It is a case which is already established, as far as I can see. We do not need to wait in any case and certainly not for Widdicombe which is to report on something quite different, as I undestand it. That is the main case. I hope that we can push the Government slightly further than the noble Lord, Lord Elton, went at Committee stage.

I end with one observation to support what two noble Lords have said already. In the end many of these bodies will not be of the necessary size with the appropriate authority and wide remit to undertake the industrial promotion that is needed in order to revive some of the decaying areas. Again we mentioned this at Question Time yesterday. I ventured the observation that in my view many of them will never be revived until they have a development corporation, because their problems are so acute. At least the metropolitan counties were half way, if one likes, to a development corporation in the sense that they could spend reasonable amounts of money on promotion and development. I hope that on all these counts the Government will take a step slightly further forward than they did at Committee stage.

The Countess of Mar

My Lords, during Question Time on 21st May 1985 the noble Lord, Lord Bruce of Donington, asked the noble Lord, Lord Brabazon of Tara, whether he was aware of the training services provided by the Greater London Enterprise Board to assist small businesses. The noble Lord replied, at col. 161 of the Official Report: My Lords, that may well be so, in which case I should say that this was an example of duplication, and another reason to abolish the GLC and the metropolitan counties". The proposition that existing economic development, training and research projects carried out by the GLC and the metropolitan county councils are merely a duplication of Goverment activities in this field, and are therefore an example of the wastefulness of these bodies, is totally spurious. The local authority enterprise boards do not duplicate but complement the work of Government. It is sufficient for me to say that I am very doubtful that the local enterprise and training boards would have been set up if the work they did was already covered by Government agencies.

As the noble Lord, Lord Bruce, said, unemployment is the concern of every one of us. Any action taken to alleviate the problems it causes, particularly that which results in the creation of real jobs, must surely be accepted gratefully.

The GLC has set up teams of researchers to investigate the problems of industry and employment in the London area. They are closely involved with the implementation of their proposals, and consult with all those immediately concerned in the locality; for example, employers, trade unions and community interest groups. There is no other source of such systematic research, and the papers produced by the research teams are used by many organisations apart from the GLC. Stress is laid upon the link between research and current policy problems, and, unlike the research undertaken by academics, it is carried out on a short timescale and is closely associated with urgent policy issues.

The GLC has 40 research experts who work in teams in specified areas, such as private and public sector employment, the labour market, the property market and general economic policies which affect London. This type of research could not seriously be undertaken by boroughs, and long-term research, especially, is likely to be neglected in the face of financial stringency.

It is vitally important, at a time when employment is of such great concern, that we should support organisations which positively provide jobs. The continuity of the existing enterprise and training boards must be assured. We can do this by supporting this amendment.

10.15 p.m.

Lord Taylor of Gryfe

My Lords, I apologise for delaying your Lordships at this late hour on this matter. I can only make the plea that I have not spoken so far in the lengthy deliberations on the abolition of the GLC. I am not knowledgeable of all the intricacies of that organisation. However, I am deeply concerned about this particular issue. I should hope that we can divorce it from the general debate as to whether or not it is a good thing to abolish the GLC.

The question before us is whether we shall diminish what is an instrument for employment creation. I think that to diminish an instrument for employment creation in the present situation is certainly undesirable. There is no doubt that the distribution of power to the boroughs is desirable in certain instances. However, in the case of employment creation and attraction of inward investment, and the stimulation of the domestic economy, these are duties and responsibilities that can be adequately discharged only by a strong, powerful and well-managed team.

I say that with some feeling because, like the noble Lord, Lord Northfield, I have had experience in the whole area of attracting inward investment. I acted in this field with the Ministers of a previous Conservative Government. I found that, in their anxiety to attract inward investment, many bodies, many new towns, many organisations concerned with local problems, sent off delegations, printed literature and duplicated their efforts in no uncertain way to prove to their ratepayers that they were concerned about the state of unemployment in their areas. As a result, we had a dissipation of effort which diminished the whole intention of attracting inward investment.

Attracting inward investment is a highly sophisticated business requiring expertise, a great deal of knowledge and research and first-class presentation. It cannot be done by small bodies, small local authorities, each pursuing its own particular interest. Consequently I feel that we should look at this matter quite objectively. I may not be very knowledgeable about the experience of the London Enterprise Board, but I am prepared to accept what has been said in the House tonight: that it does a reasonable job on advice to management, consultancy to new businesses and assessment of viability. So many small industries make false decisions because they do not have the professional advice that is necessary to make them effective. It has also conducted interesting experiments in diversity of enterprise, including co-operative enterprise as well as normal private companies. For these reasons, I believe that it would be a mistake if the London Enterprise Board were to cease to exist in the new provisions.

I say this with some feeling because if there is one thing that we have enjoyed in Scotland it has been the Scottish Development Agency. This is a powerful instrument for employment creation in areas of high unemployment in Scotland. It is powerful because it has co-ordinated the entire effort under one strong authority. The achievements of the SDA would never have been realised if it had been broken up into a lot of small and ineffective bodies. It is because of that success—I pay tribute to the Government for having recognised its effectiveness—that the Government have supported it substantially.

It was initiated by the Labour Government and supported on the basis of its record of achievements by subsequent Conservative Governments. With that experience in mind it would be a mistake to diminish or to reduce in any way the effectiveness of one central authority. After all, the SDA operates for a country of 5 million. We are talking here about a body that would be responsible for some 10 to 12 million people in the Greater London area. For these reasons, unless I can be convinced otherwise, I would feel inclined from these Benches to support the amendment.

The Earl of Gowrie

My Lords, I felt for a moment that we were straying into the area of a Wednesday debate on the economy and on employment rather than being on the Report stage of a Bill. I felt a little confused by that because until, I think, September last year I usually replied to Wednesday debates on employment and unemployment in your Lordships' House. It is always a very severe temptation for me to do so all over again. Were I to yield to temptation, I think I would stick to perhaps two or three themes. They would certainly include a feeling that we have talked for an hour or so about employment issues without much mention of products, customers, the cost of labour or the cost of local or national taxes to employers.

I would further be tempted to say that where these rules of the market are observed, employment becomes generated quite quickly. It has indeed been rising in certain sectors of this economy and we now have substantially more people at work in this economy than do our French or German allies and competitors. We have about the same level of employment in this country as the United States of America. That is not bad going.

However, this is not a debate on employment. It is a debate on these amendments which seek to establish statutory county-wide authorities or financial arrangements controlled by boroughs or districts. Their purpose will be to promote economic development in one form or another in Greater London and each of the metropolitan counties either by providing support for an enterprise board, a training board, or other forms of financial assistance direct to industrial and commercial undertakings.

The noble Lord, Lord Bruce of Donington, spoke at some length about the valuable work that he mentioned had been carried out by the GLC and metropolitan counties and their enterprise and training boards. As my noble friend Lord Elton said at the Committee stage in response to a very similar amendment, there is no reason whatever why this work should not go on if the successor authorities judge it to be worthwhile. That is why I consider that the amendments are unnecessary, and I am rather surprised that they have been put forward again today.

I shall repeat just briefly the principal points that my noble friend made. As many of your Lordships will be aware, the borough and district authorities are already supporting many valuable and impressive schemes which will help their local economy and provide additional jobs. They are active in the provision of sites and premises for industrial and commercial uses. They are active in the conversion of redundant buildings and the declaration of industrial improvement areas in which infrastructure and the environment are improved.

By far the majority of economic projects under the urban programme and approved by the department of my right honourable friend the Secretary of State are at present brought forward by the boroughs and districts rather than the metropolitan counties and the GLC. These urban programme allocations to the metropolitan areas will not be reduced as a consequence of abolishing this tier of local government—an abolition which will reduce local taxation in aggregate fairly considerably. Most of the critics of the Government consider themselves disciples of Maynard Keynes and I, therefore, imagine that they believe in Keynes' correlation between levels of taxation and levels of demand, as I certainly do.

These urban programme allocations therefore will not be reduced, and the boroughs and districts will be well placed to increase their efforts in these areas and will have both the powers and, if anything, slightly greater resources as a result of the loss of precept, to do so. The successor authorities will also be able to take control of the enterprise boards which already exist, and, therefore, ensure that the projects which they have been supporting will continue. However, the transfer of control is not something which in our judgment directly involves or should involve Government. The proper transfer of democratic control of these boards is a matter for the GLC and the metropolitan counties and the successor authorities.

The successor authorities need to be convinced that the boards are effective and are pursuing sensible policies and that it would be in the interests of their ratepayers for them to receive continued support. The Government are concerned that these enterprise boards remain accountable to the ratepayers as far as possible, and that is one of the reasons that the controls under Section 7 of the Local Government (Interim Provisions) Act were introduced.

The noble Lord, Lord Bruce of Donington, kept trying to draw from me something other than support—I think "cynical" was the curious word he used—for the work being undertaken by these enterprise boards. I should like to dwell on this for just a few moments. My right honourable friend for the Government in another place has already given our view on the value of enterprise boards. He said: We are not opposed to them in principle. Their semi-independent role means that they can help pick out those viable projects which have a good long-term future. It also allows them to encourage the development of joint projects within the private sector". The noble Lord, Lord Bruce, seemed to be suggesting that his amendments were the way of safeguarding specialist teams, for example, of the existing councils. But of course that is not so. As my noble friend said earlier this afternoon, this is a matter to be discussed when we look at the amendments tabled by my noble friend to enhance the positive role of the residuary body. I do not think that we should at this point be sidetracked on to that. 10.30 p.m.

Reverting to the Government's views on the enterprise boards, my right honourable friend the Secretary of State also pointed out the dangers which can be created, the need to safeguard ratepayers' money and to avoid an excessive scale of expenditure, and the imposition, as sometimes regrettably occurs, of political conditions in return for financial assistance. Some of these dangers are just as occasionally apparent in relation to the operations of the Greater London Enterprise Board.

Nor would I accept that enterprise boards have created quite so many jobs at quite so low a cost as the noble Lord, Lord Bruce of Donington, claimed. I believe that just a little creative accounting may have gone into the production of the figures. The GLEB's own publicity alleges a cost per job of £4,000 a year, but some GLC members—not the Government—have alleged that the cost is instead £17,000 per job a year, and there is quite a margin for disagreement over that figure.

I have knowledge, as has my right honourable friend, that enterprise boards have pursued some worthwhile schemes, and I am therefore glad to say that successor bodies are in a postion to ensure that they can continue beyond abolition if they are convinced that that is a sensible use of ratepayers' money.

I should say a word to some of the points made by the noble Viscount, Lord Buckmaster. He suggested that we need a body like the GLC because some of the boroughs are rate capped. But it was the GLC also which was rate capped, and expenditure limits on successor authorities will of course take account now of their inherited responsibilities. As to his question as to who is to provide co-ordination after abolition—and that was also echoed by the noble Lord, Lord Northfield, and the noble Countess. Lady Mar—the Government have just set up city action teams to co-ordinate government policies in the main urban areas. These will work with districts through the urban programmes, and so we shall have a central Government and local government partnership working to solve the problems of the inner cities. I hope that that gives some assurance to speakers in the debate like the noble Lord, Lord Taylor, who wanted to edge us on a bit further.

Local authorities of course have an important role to play in local economic development. The provisions of these amendments which would set up statutory county-wide organisations over and above such local authorities, and over and above the Government's national and regional priorities, would create tension without creativity. Jobs would indeed be created thereby but they would be bureaucratic jobs rather than wealth-creating ones. I have to say, therefore, that the Government strongly oppose these amendments.

Lord Northfield

My Lords, is the noble Earl not intending to say a word about the Section 137 power? This is the nub of the debate which we have raised. I took down his words. He said that the local district authorities will have the resources as well as the power. They will not have the resources if they are already spending a 2p rate on this matter. They cannot make up for the reduction in spending by the disappearance of the metropolitan councils. This was the nub of the issue raised at Committee stage. I have raised it again now and the noble Earl has not said a word about it.

The Earl of Gowrie

My Lords, I understand that the next amendment is on funding. Common sense suggests to me that the reduction in the precept liberates resources for whatever purposes the districts and the authorities may decide are desirable.

Lord Northfield

My Lords, the noble Earl does not know his local government legislation. The fact is that the councils are limited to a 2p rate by Section 137 of the 1936 Act. All funding has to come out of that. If a precept is reduced they do not have more than that 2p rate if they are spending it already. I suggest that the noble Earl looks this up and gives us a more satisfactory answer.

The Earl of Gowrie

My Lords, the noble Lord cannot get away from the fact that local authorities have considerable discretion on spending overall and they must allocate priorities within that.

Lord Bruce of Donington

My Lords, the noble Earl has not replied to any of the arguments that have been advanced from this Box, and therefore there is no point in detaining the House further. I am quite content to allow the matter to rest on the record in the hope that tomorrow, if this matter is of some interest, your Lordships may read the speech of the noble Earl, my speech and those of my noble friends.

The Deputy Speaker (Lord Aberdare)

My Lords, is the noble Lord withdrawing the amendment?

On Question, amendment negatived.

[Amendments Nos. 81AZD, 81AZE, 81AZF and 81AZG not moved.]

Clause 49 [Functions of staff commission]:

Lord McCarthy moved Amendment No. 81AZH:

Page 32, line 18, at end insert ("; and (d) to advise the Secretary of State on the introduction of a scheme to permit and encourage employees of any relevant authority to retire early from their present employment, such a scheme to include provision for enhanced pension benefits and other compensation to be funded by the appropriate residuary body.").

The noble Lord said: My Lords, we now move to Part VI of the Bill, dealing with staff issues. The first amendment, which stands in the name of myself and the noble Lord, Lord Dean of Beswick, deals with the functions of the staff commission. We are suggesting by this amendment that the staff commission should be given power to enable it to advise on early retirement schemes and to recommend to the Secretary of State schemes for early retirement with enhanced pension benefits and other compensation.

It may be said (and if it is said, it is said correctly), that this is similar to an amendment which was moved by the noble Lord, Lord Winstanley, at the Committee stage. That is true. At that stage the noble Earl, Lord Gowrie, replying to that amendment, said, at col. 141 of the Official Report for 20th May, that he welcomed the spirit of the amendment—that is to say, this amendment today, which is substantially that put foward by the noble Lord, Lord Winstanley—and that he had himself put down an amendment to Clause 57 which provided for such powers. On that understanding and on that undertaking the noble Lord, Lord Winstanley, withdrew his amendment.

We have put this amendment down again because when we examined, in the time available, the amendment to Clause 57 which was put down and was moved by the noble Lord, Lord Elton, we found that it was not what was required. Thus we return with this amendment on Report. The amendment which was embodied in the Bill at Committee stage was to add at page 40, line 14, the following new paragraph: With a view to reducing the cases in which redundancy payments will fall to be made to such persons as are mentioned in subsection (1) above the Secretary of State may make a scheme for the making of payments by the residuary bodies to employers offering such persons employment which, by virtue of sections 84, 94 and 95 of the said Act of 1978, will preclude their becoming entitled to redundancy payments."—[Official Report, 21/5/85; col. 257.]

It was admitted by the Government spokesman that day, quite rightly, that this amendment was somewhat delphic. We were told by the Minister on that occasion: This rather technically worded amendment disguises"—

I would say that it disguises it so effectively that I cannot find it— a proposal intended to improve the job prospects of GLC and MCC employees".

He went on: We recognise that there could be scope for a voluntary early retirement—or VER—scheme in connection with abolition".

Well, there could be; but I would suggest to the House that no provision is made in this amendment that there should be.

Indeed, if we look at this delphic, this disguised amendment, this strange amendment, we see that the remarkable thing about it is that it makes no reference to early retirement at all. If you examine the words of the amendment, it appears to me as though it is one more attempt on the part of the Government to save money, because the objective of the amendment is to reduce the cases in which redundancy payments will fall to be made; not to encourage early retirement, not, indeed, directly to encourage jobs, but to reduce the cases in which redundancy payments will fall to be made.

So our first objection to the amendment is that, as far as we understand it, it is based on the principle of saving money by avoiding both payments out of the redundancy fund and the effect upon that fund. But, secondly, it does not—as Lord Winstanley's amendment did—make any provision for, as he put it, "enhanced pension benefits" on early retirement. There is no reference to early retirement. It is admitted by the Minister who moved it that any implied reference there might be is fully disguised. And in so far as it has any effect at all, of course, it does not deal with early retirement; it deals with employment. In so far as it has any effect at all, it is providing a bonus, a payment to employers which, it is hoped, will encourage them to take on people who they would otherwise not take on. That may be advisable, it may be a good thing, it may happen, it may not. But I submit to the House that it has absolutely nothing to do with early retirement.

Moreover, there is nothing in the amendment which guarantees to the worker who is taken on and given a job as a result of it, anything at all. There is no guarantee here that he has any particular set of conditions. He could be taken on on conditions which are significantly worse than the conditions on which he is engaged at the moment. He could be taken on for six months. He could be sacked at the end of that six months. Indeed, he could be offered a job at significantly lower rates of pay and poorer conditions than he has at the moment. If he refuses to accept such an offer he would—and I quote from the amendment —be precluded from "becoming entitled to redundancy payments".

So, as a result of this amendment, the unfortunate worker might be caught on what I might call Gowrie's fork. On the one hand he accepts a job which is significantly worse, at significantly worse pay—that is one end of the fork. The other end of the fork is that if he does not do that, he forfeits his redundancy payment. And this is the amendment which is put forward as a substitute for a perfectly straightforward amendment which was put forward at the Committee stage by the noble Lord, Lord Winstanley, which was dealing with a totally different subject—the provision of early retirement schemes and encouraging and advising the Secretary of State along those lines. In fact, it was a disingenuous answer to tell us that the spirit was welcome. It was a disingenuous suggestion to say that the amendment put down to Clause 57 provides for these powers. It does not provide for the powers at all. Therefore, if the Government truly welcome the spirit, they should welcome the amendment. I beg to move.

10.45 p.m.

The Earl of Gowrie

My Lords, I am speaking to Amendments Nos. 81AZJ and 81AZK as well as to Amendment No. 81AZH. Amendment No. 81AZJ: Page 32, line 18, at end insert— ("( ) If either generally or in relation to any successor authority the commission forms the view that the interests of the staff or any class or description of staff or individual) members of staff of the Greater London Council or a metropolitan county council are not being adequately safeguarded as regards either recruitment by successor authorities of the arrangements for any transfer of staff to successor authorities, they shall recommend and the Secretary of State shall on receipt of such recommendation designate such staff or category of staff or individual members of staff under section 51 below to such successor authority as recommended by the commission.") Amendment No. 81AZK: Page 32, line 29, at end insert— ("( ) For the purposes of this section "successor authority" has the same meaning as in section 51(6) below.") These amendments are similar to others, as the noble Lord, Lord McCarthy, acknowledged, which your Lordships considered at Committee stage. I hope therefore that the House will forgive me if I do not repeat everything that I said then.

I am pleased, however, to be able to say that we welcome the spirit and purpose of the first of these amendments, Amendment No. 81AZH, which is designed to encourage early retirements among the staff of the authorities who will be affected by this reorganisation. Indeed, we proposed, and 'the House approved at Committee stage, an addition to Clause 58—subsection (3)—which provides the powers to set up a scheme 'which will go a long way to meet the objectives of this amendment. Its scope will, however, be different. It will be designed specifically to encourage all local authorities to take on GLC or metropolitan county council workers under 50 to take the places of existing staff who take early retirement. The potential scope of this scheme will extend to all local authorities, not just successor authorities within the meaning of Clause 51(6). We shall be issuing detailed proposals shortly for consultation with the unions and local authority associations.

I hope, therefore, that the noble Lord, Lord McCarthy, will agree that from his point of View as well as ours this is a step in the right direction, and that his amendment is unnecessary, the more so since we were persuaded to propose what is now Clause 58(3) by representations from the staff commission, among others.

The second of these amendments, Amendment No. 81AZJ, is designed to provide a safety net by giving the staff commission a power to direct the Secretary of State to exercise his powers to designate for statutory transfer to successor authorities under Clause 51 those GLC and MCC employees who for one reason or another have not succeeded in finding a replacement job in the new structure.

Such a power would be something of a constitutional novelty. This aside, as I explained when your Lordships considered a similar amendment at Committee stage, the principle underlying this amendment is at variance with the approach which we are necessarily following ourselves in devising arrangements for the staff who will be displaced by next year's reorganisation. This will not be a simple re-run of what happened in 1965 or 1974 under our previous reorganisations, when in general authorities were combined into larger units. On 1st April next year seven authorities will cease to exist and their functions will be dispersed and devolved.

I do not wish to labour the point at this stage—I shall return to it in responding to later amendments—but against this kind of background, the background of this reorganisation, statutory transfer is practicable only for staff engaged on a minority of functions. We have given firm assurances that such staff will be transferred by order. The groups concerned—for example, firemen and employees of the police forces who are accountable to the chief constable—were set out clearly in paragraph 10 of our November staff paper. Together these various groups represent a majority of the 120,000 or so (full-time equivalents) employed by the GLC and the MCCs. We have also indicated that other groups of staff may be similarly transferred if the successor employers request it. But the decision must be one for each successor to make for itself, subject to the staff commission's guidance. Where functions are being devolved and divided among up to 33 successors, as in London, the arrangements envisaged in this amendment would be in our judgment wholly impracticable.

This reorganisation will, as even the GLC's own management consultants have acknowledged, lead to a reduction in the number of posts in local government. That is partly its purpose. We cannot therefore guarantee—especially so long as the authorities concerned maintain their present stance—that there will be no involuntary redundancies. This amendment would pretend otherwise. It would benefit only those GLC and MCC employees whom the successor authorities do not require or want. It will not persuade those authorities to change their minds but merely transfer to them, possibly arbitrarily, the costs of making those staff redundant after abolition or of keeping them on without there necessarily being a job for them to do.

Of course, we are very well aware of the difficulties and of the real and unsettling uncertanties which the GLC and MCC employees are facing now. It is an unfortunate consequence of all change, however desirable, that it brings some uncertainty in its wake and takes time to settle down. We therefore appreciate the sentiments underlying this amendment. But it is unrealistic, and I hope the noble Lord will not press it.

Lord Winstanley

My Lords, the noble Earl has replied to all three of these amendments, and it seems to me that they are not wholly related or wholly identical. I should like to deal just briefly with the first of them. We seem doomed to dealing with these staff matters in the middle of the night, and, frankly, I am not at my best in the middle of the night. I must confess I am not all that good in the early morning, either, but that is another matter. However, since we are dealing with these very important staff matters at this hour, I think we really do have to try to deal with them properly. I do not think anybody in your Lordships' House would want it to be thought that noble Lords, wherever they sit in the House, are not very much aware of the anxieties from which employees in the relevant authorities now suffer, and that we were not all anxious by some means to allay those anxieties.

The noble Lord, Lord McCarthy, in moving this amendment, said it was very similar to my own, moved in Committee. It is of course identical, and I make no complaint about that, save to say that now it would appear that if there is any defect in the wording of this amendment all noble Lords on this side of the House are jointly responsible and will take equal responsibility.

I listened most carefully to what the noble Earl said in reply, but it seemed to me that he did not answer the point that was made very clearly by the noble Lord, Lord McCarthy. Of course, I did withdraw my amendment at Committee stage on the assurance given at the time by the noble Lord, Lord Elton, that the point would be dealt with; and I take the point made by the noble Lord, Lord McCarthy, about the amendment made to what was then Clause 57 and is now Clause 58. As the noble Lord, Lord McCarthy, said, it seems to me that it deals with rather a different problem. I am not saying that it does not deal with a problem that ought to be dealt with—no doubt it does—but it does not deal with sufficient clarity, it seems to me, with this very important matter of early retirement.

At this hour I do not want to elaborate on the point: we debated it before in Committee. But I am bound to say that it is my view that in the fullness of time the Government will discover that it is very much cheaper to assist people to retire early voluntarily than it will prove to be to compel people to leave—which would be the consequence of not providing adequately for early retirement. I am bound to say, despite what the noble Earl has just said to us, that it seems to me that the amendment which was set down in response to my original amendment does not deal with early retirement. I think that we have to make proper provision for early retirement if we are to have all the benefits—and the benefits could be many.

In brief, I think that if we did have a scheme of early retirement it would mean that the whole problem would become less one of making people redundant than one of matching people to posts. Early retirement will free posts, and that would be an advantage to the Government in that it would be a cheaper option than the option which otherwise would be open to them. I also think it would be of great benefit to the staff.

I am disappointed with the reply we have had, and I am grateful, if I may say so, to the noble Lord, Lord McCarthy, for moving again my amendment and for pointing out the solution to it, on the basis of which I withdrew it at Committee stage. It is not entirely satisfactory, and I am bound to say to the noble Earl that I remain of that opinion.

Lord Campbell of Alloway

My Lords, before the noble Lord sits down, may I ask him, on the question of early retirement, whether in fact the principle of early retirement has to be recognised in this day and age and, in that context, does one also have to recognise enhanced retirement benefit? Does not Clause 58(3) in terms recognise this? That is the first question.

The second question I want to ask my noble friend is this: surely those recruited to new jobs qualify for detriment compensation? Furthermore there are provisions for diminution of emolument under Clause 58(3) for those who do not secure replacement jobs. Therefore does this not all go a very long way to meeting the substance of the proposals contained in the amendment?

The Earl of Gowrie

My Lords, in general my noble friend is quite right. I can give a short answer in the affirmative to his first question. The points raised by his second question, where broadly he is right, I shall be dealing with in some detail in an amendment shortly after this one.

Baroness Gardner of Parkes

My Lords, I should like to ask the Minister, before he sits down, to clarify for me the position as regards those people who would be irreplaceable. Throughout the debate that we have had on the GLC we have been told that there are certain qualifications held by people that are unique, and that these very people will be wanted wherever they will later find their place. I just wonder whether this amendment is so general that, when we are so busily encouraging everyone to retire early, we might lose those people. I think it is important that the scheme should be developed in such a way that the services of those people whom one really wanted to continue until they had finished their normal working period would be covered.

The Earl of Gowrie

My Lords, I think that if my noble friend reads what I have said she will receive considerable reassurance. It is most unlikely that irreplaceable people will be replaced.

Lord McCarthy

My Lords, I am in a little difficulty. The noble Earl has put these three amendments together and I had understood that we had agreed, through the usual channels, that these amendments should remain apart. Nevertheless I will put them together one at a time, if I may, since he has put them together in the first place. On the first one, Amendment No. 81AZH, which is—the noble Lord. Lord Winstanley is absolutely right—in fact his identical amendment, may I appeal to the noble Earl? It is really quite simple, and indeed he said himself in his reply, in defining what was the purpose of the amendment which was moved by the Government at Committee stage, that the purpose of that amendment—I am quoting from him, though I wrote it down as he said it and I may have got it slightly wrong—was to encourage employers to take on workers under 50, as a result of losing those who had taken early retirement. In other words, the purpose of the amendment is to encourage employers to fill the gap of people who have taken early retirement with workers under 50, and for that purpose the amendment will provide them with some kind of bonus. But the bonus is designed to encourage the employer to take on further workers to replace workers who have taken early retirement. It has nothing to do with early retirement.

The amendment that we want—the amendment that the noble Lord, Lord Winstanley, put clown, and the amendment that we put down tonight—is not concerned with providing a bonus to firms to replace people who take early retirement. It is concerned with the prior position. It is concerned with encouraging early retirement. There are various ways of doing that, and the amendment does not specify them. You can do it by giving employers a bonus if they encourage people to take early retirement; you can do it as, in a sense, the noble Lord, Lord Winstanley, suggested in his original amendment, by saying that there will be enhanced pension benefits if you take early retirement—and of course it would all be voluntary. Nevertheless, the Government have said twice that they welcome the spirit of this amendment, which is about early retirement. It is not about what happens afterwards.

I urge the noble Earl, even at this late stage, to tell us that he will go away and think and try to take this point on board. I urge him to do something about the fact that the Government have twice said that they welcome the spirit of this very simple amendment, and to do something not about people who take the place of those who get early retirement, but about people who get early retirement, and encourage people to volunteer for early retirement. 11 p.m.

I must now pass on to the other two amendments, because the noble Earl has introduced them. Amendment No. 81AZJ is the substantive amendment and Amendment No. 81AZK is simply a follow-through. It is perfectly true, as the noble Earl said, that the aim of these amendments is to give the staff commission the right to act, if it thinks that an individual or a group has not been adequately safeguarded as a result of either recruitment or transferral. But we cannot agree, I am afraid, that the arguments which were put forward to a similar amendment at Committee stage—the noble Earl is quite right about that—nor the same arguments which he has rehearsed again this evening answer the point.

What we are saying in regard to this amendment, and no doubt others, is this. The Government have departed from the Crombie principles for the second time since the war. They have not yet told the staff which of them will be needed, which they would have been told if the Crombie principles had applied. They have not yet guaranteed the staff a series of compensation payments—resettlement, retirement or long-term compensation—of the kind that the staff have been guaranteed in one job organisation after another since the war. We are saying that because there is an absence of these understandings, undertakings and guarantees, there is very widespread concern among staff.

With respect, it is no answer for the noble Earl to say that he does not intend to dismiss a large number of people, that the great majority of people will get jobs in the end. It is also no answer to say that this is a very special kind of reorganisation, in which the kind of undertakings which were given when the Crombie principles were applied cannot be given now, because we live in a period of uncertainty and, as he says, uncertainty is the hand maiden of change.

The fact is that the Crombie principles, or something like them—and this amendment does not go as far as those principles—were not rigid. They were applied in different ways to each reorganisation and similar sorts of principles could have been applied to this reorganisation. It is no answer to say that it is an uncertain world in which we live; quite the contrary. If it is an uncertain world, because there is no intention to maintain the level of employment in the public sector, because there is no guarantee of maintaining the level of employment, because there is much more unemployment than there was when the Crumble principles were used in the first instance and were subsequently employed, this is more reason for the Government to put into their legislation institutions which safeguard, or which can take action if they themselves do not safeguard, the interests of employees. The uncertainty of the economic environment is not an argument against this amendment; it is an argument in favour of this amendment.

It is not fair either to say that the Government cannot do this, because this is a decentralising form of reorganisation. There have been previous decentralising forms of reorganisation. The GLC housing reorganisation in 1980, when the functions of the GLC in regard to housing went down to the boroughs, was a decentralising reorganisation. Nevertheless, it was possible in that reorganisation to give much better undertakings and guarantees to the staff than any that are being offered to them in this reorganisation. Therefore, it is perfectly reasonable to ask the Government once again to submit themselves to the kind of overview which an overall responsibility given to their own staff commission would provide: the staff commission could take action and make recommendations if, in its opinion, adequate safeguards were not given for the staff.

The Earl of Gowrie

My Lords, I am obviously disappointed because I thought that the noble Lord, Lord McCarthy, would be rather pleased with me. He is not, but I have to rest on what I said earlier.

On Question, amendment negatived.

[Amendments Nos. 81AZJ and 81AZK not moved.]

Lord Denham

My Lords, I wonder whether I may say a brief word at this point. It has been agreed through the usual channels that we should finish at eleven o'clock. I did say, under pressure, that we could keep the House until half-past eleven. If we can get this amendment through by half-past eleven—

Noble Lords

No!

Lord Denham

Then, my Lords, I am afraid we must adjourn the House now.

Lord Rochester

My Lords, as the potential mover of the next amendment, I do not think I can condense what I have to say into a short period of time. If, therefore, there is a debate to follow what I have to say, I think I must inform the Chief Whip, with respect, that in my judgment we cannot finish by half-past eleven.

Lord Denham

My Lords, I am grateful to the noble Lord, Lord Rochester. I beg to move that further consideration on Report be now adjourned.

Moved, That further consideration on Report be now adjourned.—(Lord Denham.,)

Lord Dean of Beswick

My Lords, before the Chief Whip sits down, perhaps I may say that the whole of this Bill is about people. This particular part of the Bill is about the people who service people. Bearing in mind that during this Session of Parliament we have proceeded on many occasions well past eleven o'clock when it suited the Government, I think it is a little churlish for the Government Chief Whip to apply his own guillotine at this point in time. I think it is totally unnecessary.

Lord Denham

My Lords, if the noble Lord is speaking as a Whip, I have been doing my business with the Chief Whip.

Lord Dean of Beswick

My Lords, that may be so, but I think I retain the right as an individual Member of your Lordships' House. I was always under the impression that nobody in this Chamber has the power to apply the guillotine. It would appear that the Government Chief Whip thinks that he has that power to apply whenever he thinks it necessary.

Lord Denham

My Lords, I am sorry, but I am not going to argue with the noble Lord. I do business through the usual channels. It was an agreement through the usual channels. We have now reached a stage where further consideration on Report must be adjourned, and I have moved to that effect.

The Deputy Speaker

My Lords, the Question is, That further consideration on Report be now adjourned. As many as are of that opinion will say, Content?

Noble Lords

Content.

The Deputy Speaker

To the contrary, Not-Content?

Lord Dean of Beswick

Not-Content.

The Deputy Speaker

I think the Contents have it.

Motion agreed to.