Local Government Bill

HL Deb 21 May 1985 vol 464 cc242-83

House again in Committee.

Baroness Birk moved Amendment No. 136D: After Clause 55, insert the following new clause:

("Strategic plan by residuary body.

. The Secretary of State shall by order taking effect on the abolition date make provision for the London Residuary Body and each metropolitan county residuary body to have the function of preparing and from time to time reviewing a strategic plan for Greater London or the metropolitan county, as the case may be, which shall set out general policies for the use and development of land.").

The noble Baroness said: This amendment is concerned with planning. I told the Minister that my noble friend Lady Stedman and I would be moving this amendment and that it is more in the nature of a probing amendment. So, as a result, we are hoping to get a lot of information from the Government.

This is the second time that town planning has been debated in this Committee. However, the first debate came rather in the backwash of the amendment to set up new elected metropolitan authorities, and I think that the ensuing excitement and victory on the one hand, and the distress by four votes on the other, rather took the edge off the planning amendment and I do not think it received the attention it deserved from the Committee generally. Therefore we felt that the Government's intentions deserved much deeper exploration.

Despite everything that has been said, this is still a very confused subject. Let us look at this new system which is proposed for London and the metropolitan counties after 1986, which is the whole core of what we are trying to find out. The Bill does two things. First, it abolishes the metropolitan county planning authorities; and, secondly, it changes the planning system for almost 40 per cent. of the country's population. The present system has existed for 20 years in London and for over 11 years in the metropolitan counties. Over that time, it has been developed and refined, and although no one would claim that it is perfect—far from it—it is a system which is established and effective, and indeed it has been copied by many other countries in the world.

As recently as last year, after a long period of consultation, the Department of the Environment published its Circular 22/84 which advises local authorities how to draw up their structure and local plans. I had intended at this point to wave it at your Lordships, because it really is a thick document. I think that the Minister has a copy and perhaps he will wave it and show your Lordships how thick it is. It is a definitive and weighty document. Yet within two months of its publication in September 1984, the Government set about recasting the whole planning system in our larger cities.

So this is now the situation. Dorset, Cumbria and Norfolk, being shires, will still have a two-tier planning system as outlined in the circular, but we are still in the dark about the precise arrangements for London and our larger cities, which situation creates a lot of problems and a tremendous amount of uncertainty. There is considerable concern not only in this Committee, but also among professional bodies outside. Criticism of the Bill's plans for planning has been expressed on all sides of the Committee since the first day. The noble Lord, Lord Plummer, attacked the proposals vigorously; the noble Lord, Lord Broxbourne, and the noble Viscount, Lord Colville, had strong reservations and the noble Lord, Lord Sandford, transmitted the concern of the counties around London about the proposals in the Bill.

If, as I imagine he is, the noble Viscount, Lord Colville, is to speak on this matter tonight, I hope that he will be able to make the position clearer and plainer to people who are not so well versed in planning law as he is. I often find it so very difficult to follow him, so I assume that he must be right, but perhaps I am not always right about that. On one occasion, I think he said that the Government were two-thirds right, and I tried to fathom out which third they were wrong about.

Certainly the Government's confidence that the Bill's proposals for strategic planning are adequate is, I am afraid, shared by very few. When proposing major constitutional change, which is what this Bill is all about, it is incumbent upon the Government to ensure that the new system which they are setting up improves on the old and that we move forward. This must certainly apply in the field of planning, which is a very difficult and complicated one. However, what is proposed at the moment not only is not improving the system, but is making it very much worse. It will be a retrograde step for strategic planning, since it fragments the present arrangements and places undue powers in the hands of the Secretary of State.

The essential weakness of what is proposed lies in the absence of a single statutory plan for each metropolitan area. The amendment seeks to rectify this, by requiring the residuary body in each area to produce a strategic plan. I know the feelings of the Committee about the residuary bodies, and I am not suggesting that this is a catalyst, about which we had a great deal of discussion on the last amendment; but this is the only opportunity left to us at Committee stage to secure the retention of a strategic planning function. That is the important point. By whichever means it is achieved, that is really the objective.

The amendment would result first, in seven strategic plans instead of 69, which of course is counting the boroughs and the districts together. Secondly, the Secretary of State would not be required to produce strategic guidance—I shall return to that in a moment—thus saving his time and his involvement in local matters. The obverse is that it would save local communities having the central hand of the Secretary of State interfering in their affairs.

The bodies which will be involved in land use planning, the 69 district and borough councils, the new waste authorities, the new passenger transport authorities and the various existing and new quangos, will be better co-ordinated. There will also be continuity with the existing system, and the present work being undertaken on structure plan reviews will be carried forward into the new arrangements and not lost, as indeed they will be lost under the Bill as it stands at present.

Finally, the amendment would retain the essential expertise for planning research and data of the existing metropolitan authorities. We have just been discussing an amendment which took in research and I know that the Minister referred frequently to Amendment No. 140A. I shall not pre-empt discussion on that but I really do not think that it provides the necessary or adequate answers.

There are many unanswered questions about the arrangements for planning in this Bill. Chief among these is the mysterious animal called "strategic guidance", which makes only one brief appearance in Schedule 1. I believe that this is the first time it has ever appeared in legislation, although the phrase may have been used in a more informal manner; but there it is in this little paragraph in Schedule 1. Certainly it has been hiding its light under the weight of the Bill.

What this guidance consists of is, I am afraid, still the 64,000 dollar question which I am rather hoping the Minister will be able to answer tonight. What is clear, however, is that the strategic guidance, whatever it may turn out to be, will be the monoploy of the Secretary of State. The guidance may be brief, and I think I am right in saying that the noble Viscount rather hoped it would be—I believe he said so on a previous occasion; if I am wrong, he will no doubt tell me so—in which case I ask: will it be adequate?

The guidance may be detailed—and I think there is a certain amount of feeling against that—in which case, may I ask: are there the resources and skills available now in the Department of the Environment? I rather doubt it, due to the running down of the department and also of its regional offices, which seem strangely empty compared with how they were some years ago when I visited them. It may vary from place to place. Therefore, will this not expose the Minister, the Secretary of State, to charges of unevenness and unfairness? I am certainly not blaming the Minister here for any of this.

If the strategic guidance is to mean anything at all then there are certain criteria which it must fulfil. It must consider the transport network in each conurbation and how it will shape the whole urban area. It must allocate land for waste disposal in one district or borough in order to meet the needs of others. It must ensure a consistent approach for planning river valleys, moorland or similar areas which cross district or borough boundaries. It must make decisions about the fair distribution of shopping areas. It must provide for the correct areas of land for industry or offices. It must preserve a consistent approach to the green belt. It must direct resources to our inner cities. It must balance the needs for minerals against environmental problems. It must provide certainty for the private sector if we are to get the best use of the investment resources available. In other words, it seems to me that what we want are again structure plans. We do not want to see them go. They are what we need and want.

I would remind the Minister that the criteria which I have spelt out are all contentious issues on which people do express and will continue to express strong opinions. If all these issues and many others are to be dealt with adequately, then the guidance will have to be detailed, it will have to be specified and therefore likely to lead to controversy and debate between interested parties. This is perfectly proper and has always gone on. Indeed, the guidance would be of little use if it were not controversial, because the guidance would be asked for only if there were some dispute or something that could not be solved without going to the Secretary of State for his strategic guidance.

However, this in turn means that the Secretary of State will require a team of professionally qualified staff to collect and sift information, analyse options, consider views expressed by third parties and give advice on the form of strategic guidance. But as I have pointed out, the department does not have, and is unlikely to have, sufficient staff in terms of numbers, skills or experience to produce the kind of guidance which will be necessary. After all, we have been told that one of the purposes of the Bill is to cut down on expenditure and to cut down, presumably, on resources, including staff. I think that is set out at the end of the preamble to the Bill. Nor do the planning commission proposed for London or the planning conferences proposed elsewhere really meet the demands that will be put on them. In contrast, we must remember that these are precisely the resources which exist at the moment in the GLC and the metropolitan counties.

I am not arguing for a retention of the GLC as it is or of the metropolitan counties—there are no doubt many ways in which they could all be improved—but what I am very concerned about is that we are moving into a situation where what is proposed will all be very much more inadequate and very much less effective than the planning system is at the moment. It will create a great many problems, and I think it is our job in this Chamber to see how we can not only elucidate what it is that the Government have in mind, but try to improve it and solve some of these knotty problems which are present and just will not go away.

In conclusion, I come back to the need for a strategic plan. Strategic guidance tucked away in Schedule 1 is not sufficient. In truth, arrangements should be made for the other elements of the strategic planning service; but, as the noble Viscount, Lord Esher, said on an earlier amendment on the third day of the Committee stage. I am proposing this amendment as an exercise in damage limitation. I beg to move.

Baroness Stedman

I should like to support this amendment which has been moved so ably by the noble Baroness.

Lord Elton

I am left in some doubt by the noble Baroness, who had led me earlier to suppose that this was a probing amendment. She addressed it as a probing amendment to start with but, as she became wound up towards the end, it became clearer and clearer that she really thought that it was a great improvement on the Bill.

Baroness Birk

I do.

Lord Elton

Oh, the noble Baroness does. I should just like to know, that is all. I do not agree with the noble Baroness.

Baroness Birk

It is an improvement on the Bill. I am not misleading the Minister. I am not going to press it to a Division, but as I think that most things would be an improvement on the Bill, it would be awfully difficult for me to speak about the Bill without saying something improving.

Lord Elton

The noble Baroness took elegant advantage of the opportunity I gave her, but I understand what she means.

8.45 p.m.

Baroness Stedman

In supporting this amendment, perhaps I may also say that it is only a probing amendment at this stage and we do not propose to divide the House. With my noble friend Lord Esher, I put down a series of amendments to Clause 3 earlier in the Committee stage. We listened carefully to the Minister's reply before we withdrew them to decide what we would do on Report. This amendment is really designed to elicit more information from the Government to help us to make that decision. I hope the Minister will accept that we are genuinely worried about the planning situation after abolition.

I see a very real need for co-ordination between the various public bodies which are involved in the development and the use of land in London and in the metropolitan counties. As it now stands, the Bill allows the districts or borough councils, the passenger transport authorities, the waste disposal authorities and the Historic Buildings Commission all to make important decisions about the use of land. How will this be co-ordinated? Is this what the strategic guidance will attempt to do?

When the strategic planning authorities were set up following the earlier reorganisations, it was understood that one of their most important functions would be the co-ordination of land use and transport decisions, that they would try to ensure that roads would be planned to avoid wholesale upheaval of people in their homes and established communities, and that new buildings and areas would be located convenient to the local traffic and public transport routes and vice versa. What will happen in the future? Will it all be left to voluntary co-operation; or is the Minister thinking of some kind of adequate mechanism which will ensure that these relationships are kept in the future?

Is he satisfied that the district and the borough councils will readily agree voluntarily about the priorities for road building and that they will readily agree with the waste disposal authority about the need for and the location of waste disposal sites? Is the Minister quite sure that the good sense of local authorities will lead them to put aside their own often legitimate forms of local anxieties to achieve that sort of co-operation over the area as a whole? Or does it really mean that the Minister will be drawn more and more into local disputes which are outside his normal remit?

I believe that the Minister is in danger of being drawn into local disputes over the competing uses of land. If so, how will he reconcile his position as an independent arbiter on plans and planning appeals and as the person responsible for drawing up the strategic guidance on which the new planning system will be founded? At the moment, as I understand it, the Minister issues guidance either by nationwide circulars or on a regional basis. This guidance is of a general nature and is not pre-empting any of the policy decisions.

The strategic decisions at county level are at the moment left to the county councils. In future, that guidance will have to be given for counties and perhaps for their immediate surroundings. That guidance will need to be much more locally orientated and to tackle the potentially controversial problems of where investment should be encouraged and where it should be restrained. This means, if the Secretary of State takes his new responsibilities seriously, he must be involved in local issues at the formative stage of policy making. How, then, can he sit in judgment over disagreements between the planning authorities themselves and among the planning authorities, the landowners and the developers? Having set the policies himself, how can he hope to be seen as an impartial judge able to settle the disputes?

I believe the Minister has a very important national role, and he should not become occupied with local matters. That is what I feel will happen when he has no county council, or its equivalent, to act as a capable intermediary between himself and the local planning authorities.

At an earlier stage the noble Lord, Lord Molson, raised the need to examine strategic guidance in a proper manner. If strategic guidance is to mean anything at all it must be open to challenge so that it can be tested and eventually accepted by those who have to follow it, or even by those who may be directly affected by it. Would it not be possible to subject the guidance for London and the metropolitan counties to some kind of inquiry, or examination, before it is finally issued to the local planning authorities? Am I right in thinking that it seems likely that the examination of guidance will have to await the preparation of Part I of the first unitary plan in each area?

Let us assume that the strategic guidance can be altered after the examination of an emerging unitary plan. What will happen if it remains unaltered after the examination of, perhaps, the first four unitary plans in an area but that it is still found wanting at the fifth examination? Let us assume that that guidance is then altered as a consequence. What is the consequence for the four earlier plans that were within the guidance? Will they have to be revised? In a similar manner, if the strategic guidance can be altered after examination, should the production of all the unitary plans in a county be halted whenever one of them is subject to examination in case the strategic context or guidance has to be changed again? That would surely be quite intolerable, and it strongly suggests to me that guidance ought to be produced and examined for the county as a whole in one process.

All in all, the situation will be a difficult one for the Minister. It is a situation which will introduce great complexity and confusion in the process. The sensible way to cut through all this would be to have a single authority in each county responsible for drawing up, issuing and reviewing a straightforward strategic plan. But will it be acceptable to landowners and to other interested bodies to have to wait for an examination in public into a unitary plan before they can challenge the Secretary of State's strategic guidance in an independent forum?

The strategic guidance that is to be issued by the Minister may suggest land release in very broad terms in a particularly sensitive area. Although interested bodies can make representations to the Minister, they are wholly dependent on the Minister's judgment of the rights and wrongs of the matter. There is no independent hearing for their case at this stage and there is no appeal against the Minister's decision. This must wait, we presume, until the examination of the local authority's unitary plan, which relies on that same ministerial guidance. Unless the Minister decides to call in Part I of that unitary plan for separate examination, anyone concerned could have to wait a very long time for the detailed preparation of the entire unitary plan before he could even start to challenge the underlying assumptions or guidance. This could mean waiting one or two years, and perhaps even longer, during which time the uncertainty over what is proposed will linger on, with all the debilitating effects of blight this can have on landowners and others.

That is the kind of delay and uncertainty which flows from the complexity of the proposed system. Surely it would be better to have the guidance properly examined as a whole at the time that it is to be issued. That would not only be fairer, but it would give some legitimacy to its content. It would also smooth the way for unitary plan production. We need answers and clarification on these points, and we need to be assured that the proposed planning arrangements will be an improvement on the present ones.

Baroness Vickers

I should like to say a few words on this subject, and in particular to deal with minerals. Minerals play a very important part in our national life. They are required for the erection of buildings and for new roads, and some for use in manufacturing industry. It is, therefore, essential that adequate supplies are made available to satisfy the national need.

Minerals can be worked only from where they exist in the ground. Therefore, it is essential that not only should there be proper planning of their development and of their use, but also that these factors should relate to those concerning the protection of the environment. Some years ago regional aggregates working parties were set up covering England and Wales. These working parties consist of representatives from the minerals industry and the county planning authorities. Their duties are to prepare overall regional guidelines as to the amount of land required for mineral extraction within their region, and for this information then to be broken down to the county level. The regional working parties reflect the national guidelines, which have been endorsed by the Secretary of State for the Environment.

This method of co-operation has been found to be successful so far as the minerals industry and the county planning authorities are concerned. It has been a successful story of co-ordination to ensure that adequate provision for future workings has been prescribed at the county level.

The proposals contained in the Bill are to fragment the minerals planning authorities, which are the county councils in the metropolitan areas, and in future minerals planning will be undertaken by borough or district councils in their areas. This will be unsatisfactory in that at this level of local government there will be an insufficient breadth of responsibility to take full account of strategic considerations in relation to the supply and demand of minerals. At the district level it is expected that the councils will see their role as protecting local interests. Political pressures are likely to weigh heavily on council members, who will be too close to the problems which arise in relation to minerals developments, and the chances of the overall approach to the regional guidelines on a county-wide cohesive plan will not follow.

The need for overall planning at county level is fundamental if the minerals industry is to be given a proper opportunity of developing to meet the needs of the country. Furthermore, technical expertise to deal with minerals planning is unlikely to be available, and the present county teams of experts which have been built up over a number of years will be broken up.

In the last decade the Government commissioned two reports to deal with minerals planning—Stevens and Verney. Both of these reports said that minerals planning should be carried out at the county level, and the Government, together with the previous Administration, agreed with the contents of those reports dealing with this matter. I should like to know what has changed. So far as the minerals industry is concerned it clearly wishes to see an overall view taken in respect of its activities; and from the planning authority's point of view it is only possible to achieve this in the long term if they are prepared on a wider basis than the district council areas and with the proper technical expertise.

9 p.m.

In the debate in the House of Commons on this Bill Sir George Young, speaking for the Government, said: I accept that it will be necessary for some authorities to operate within a wider overall framework depending on the minerals in their areas". It is essential that all authorities operate within a wider overall framework. This framework exists at the present time through the regional aggregates working parties and the present county councils which in the area of which I am speaking are seven in number and are the mineral planning authorities.

If there is to be continuing and satisfactory minerals planning in England and in the metropolitan areas in particular, it is essential that the work of deciding planning applications for minerals development, together with the planning of the release of future minerals resources, should take place at county level, and the proposals put forward by the three chartered institutes, the Royal Town Planning Institute, the Royal Institution of Chartered Surveyors and the Royal Institute of British Architects, should be supported. They have all supported what I am now saying, and I shall say no more about their documents, but I hope that the Minister will be able to give me a satisfactory answer.

Viscount Colville of Culross

I think that by her choice of the subject of mineral planning my noble friend Lady Vickers has perhaps illustrated rather well the way in which we should be looking at this question. Perhaps in order to simplify matters, I may confine myself to the question of sand and gravel aggregates, because this is perhaps a slightly easier subject and one which may be familiar to a number of Members of the Committee.

Perhaps I may come back to that in a moment and first address some of the rather more general points that the two noble Baronesses opposite have made. I would suspect—I do not know what my noble friend will say about this—that they have painted a very black picture and one which draws extensively upon the worst possible case. I think, moreover, with the greatest respect to them—and both noble Baronesses are very experienced in central and local government—that they have perhaps failed to appreciate what has been going on in the field of planning since effectively it was invented, or at any rate perhaps perfected, by the party opposite as a result of a good deal of homework by all parties and came to fruition in the 1947 Act.

The noble Baroness, Lady Stedman, must, I think, differentiate between the positive planning function of preparing development plans, to use a very broad word, and the negative function of implementing planning control within the confines of those plans afterwards. It is no use saying that it is impossible for the Secretary of State to be involved in the preparation of positive plans because he is going to have to act as the court of appeal on the negative planning issues on purely local matters at the stage when a planning application has been submitted and has been refused, called in or failed to be resolved. One must not confuse those two issues, because it has been inherent that there are those two functions ever since the beginning, and there has not been proved to be any discrepancy between the two roles that the Secretary of State has in that respect.

Let us therefore concentrate on what I think the amendment is directed to, which is the positive planning function. Let us take just a glimpse into history. When this was first introduced the development plans that were produced for the positive planning purposes were extremely elaborate Ordnance Survey-based documents, the inquiries into which took months and months and were enormously elaborate to the extent that every square inch of the countryside was looked at and ultimately decided upon in some particularly contentious areas. The party opposite in 1968 decided that that was so laborious a process that not only was it in itself unproductive but it had led to such colossal delays that the strategic side of it must be simplified and turned into what we now know as the structure plan.

Going back to the role of the Secretary of State, according to my recollection, when this process began, although it must have been apparent to the Ministry of Housing and Local Government that it had to do something to co-ordinate the various county or county borough development plans as they came forward, they came forward at a slow and inconsistent rate. I do not remember in the early days anything particular being issued by way of guidance for larger areas. It started to come in the shape of circulars such as the one on green belts in 1955 when the concept which obviously comprised an area much bigger than any of the individual planning authorities began to be put forward and eventually became implemented by virtue of amendments to development plans. But when it came to structure plans in the 1970s and more recently the whole idea developed very much more rapidly, and my noble friend Lord Sandford knows all about this.

It has been abundantly plain that, whether organised as a group of county boroughs—and the noble Baroness, Lady Fisher, can tell me how many county boroughs there were in the West Midlands County Council; I think probably 10 or 11 at the end of the day after Solihull had been added—or whether done in the form of the Greater London Council and the surrounding home counties, or in any other shape or form, there was a tier of strategic planning which exceeded the limits of any of the individual local authorities, and it is bound to be so.

The result of that was that when one looked—let us perhaps stay with the West Midlands for the moment—at either a group of county borough development plans in the West Midlands or the West Midlands metropolitan county council structure plan later on, there was no way in which one could avoid looking at what was going to happen in Warwickshire, Worcestershire, Staffordshire and any other immediately adjoining county—I cannot think of another one at the moment, but perhaps Shropshire can be added—which might be affected. Therefore at the stage of dealing with major issues of strategy—for instance, the green belt which inevitably goes outside the areas of urban authorities, whether they be county councils or any other sort of local authority—you got on to a scale which exceeded the areas of any one of those.

It is very true that the guidance which has been given by the Department of the Environment on regional planning, whether it is in the South-East, the West Midlands or anywhere else, has been very general in its concept. Nevertheless, it has set the pattern on exactly the sort of thing which the noble Baronesses opposite have mentioned; for instance, transport, the requirement for a sufficient stock of housing land, opportunities to bring in employment, the green belt and other matters of that sort which have been of a general regional nature. This has been prepared hitherto not by diktat of the department, as I understand it, but by a series of consultations in which all the local authorities concerned, and not just the metropolitan councils, the GLC or whatever it may be, have been involved. Indeed, in the South-East it has been formalised to some extent under SERPLAN, which is chaired by my noble friend Lord Sandford. However, that is a very much larger concept than just the GLC.

We then come to the point made by the noble Baroness, that if the Secretary of State is going to be involved in this supra-local-authority exercise which co-ordinates a policy for an entire region, he may find himself, at some stage or another, with a Part I of a unitary plan or, for all I know, a revision of a structure plan by a county council outside one of the metropolitan areas which does not necessarily conform to the propositions that he has put forward. Does that matter?

I have to remind noble Lords and noble Baronesses opposite that there are other issues of this kind where the Government put forward a proposition on their own account, and where they are ultimately the confirming authority and where they have to take part in public inquiries and where nowadays, fortunately, they have to come along and make their case pretty strongly in the form of evidence by a senior official of the department. I think I need mention only two examples. One is a centre line order for a major trunk road, or a special road such as a motorway, where the whole matter is prepared and ultimately confirmed by the Department of Transport. These are well-known forms of inquiry. They have been refined very greatly. Nevertheless, the basic proposition is that it is the department which initiates the matter, the department which ultimately confirms it and the department which is there at the inquiry, trying to justify what it has said is its preferred choice.

An even more stark example occurs. It has not occurred very recently but I remember a number of such examples. It is when the Department of the Environment, as it now is, designates an area for a new town. That is wholly a matter for the Secretary of State. It is for him to confirm or not to confirm, as he thinks fit. Nevertheless, the statutory procedure, which dates back to the legislation of the party opposite and has not really been altered very much since, has been made to work perfectly well. What happens is that, at the inquiry into the draft designation order, a senior official of the department has to go to the public inquiry and justify his case. He is asked a number of questions. He may have rather a rough time. Sometimes the result of it all is that for one reason or another the designation order is not confirmed and there is either no new town or no extension to the new town.

There is nothing new about this. This has all been going on perfectly well since the war. It may be a delicate British balance. It may be a constitutional oddity for the rest of the world. However, in central and local government in this country we are very familiar with it.

I think that is all that is being put forward in this Bill, perhaps with one exception. I said that we needed to look at history. Very well; we reached the stage of the structure plans. However, now, except I think in West Yorkshire, there are confirmed, and in some cases I think reviewed, structure plans for all the metropolitan counties. I hear utterings that suggest not all. At any rate there are a very large number of them. It is most unlikely that regional policies will be such as to require major upheavals in those structure plans when they come to be reviewed.

The new unitary plan authorities which appear under this Bill will take over the broad and confirmed structure, so far as it relates to their area, of the previous structure plan. All they will have to do is to review it. There may be issues which are new and which require a good deal of consultation. However, I do not see that they will be so fantastically difficult or novel that they should frustrate the entire process of a review of the plan within the broad boundaries of what has previously been decided upon in the confirmed structure plan that exists.

If there are new issues that come along, then, as I believe the situation to be, there will be wide consultation at a stage before the strategic guidance is prepared. The Department of the Environment will not suddenly emerge from a cloud with a tablet upon which is written the strategic guidance. It will have had a great number of consultations with all the local authorities before that stage is reached. For all I know—and I believe this happens now—there will be an opportunity for anybody who so wishes to comment upon drafts of it. Thus, when it appears, it will not be wholly unaltered from the original ideas because it will have been the recipient of a good deal of consultation and possibly change as a result.

Thus I do not understand why it is that this is all going to be difficult. There may be technical problems about the co-ordination of Part I of the unitary plan. I take the point of the noble Baroness, Lady Stedman, on that. But it will be possible, I believe, for this to be foreseen from afar because the consultations must have thrown up some indication that there is going to be a difficulty in a particular area. If there is a Part I of a unitary development plan where the local authority decides that it will go in the teeth of the strategic guidance, I do not necessarily see any harm arising. It will be an occasion when the department has to justify what it has agreed with everyone else. It may, or may not, succeed in doing so at the examination in public. This issue, no doubt, is one that will be chosen for examination in public.

I believe, however, that having got to where we are, with a system evolving in the way that it has, and with the whole concept of strategic guidance already firmly built into it, we can take this in and incorporate it into the unitary plan concept and into the methods of preparing it in a way that will not only not be slower but, I strongly suspect, will be quicker than it has been done hitherto.

My noble friend will correct me to the extent that I am wrong, if I have got anything right at all, but I hope that this time I have succeeded in explaining the matter as I, at least, see it to those who did not understand me last time. I also hope that I have explained why I envisage that it will work.

9.15 p.m.

Lord Campbell of Alloway

I should like to make two short points. All noble Lords must be grateful to the noble Baroness, Lady Birk, and also to the noble Baroness, Lady Stedman, who have raised some important questions. These will no doubt require considerable consideration before definitive answers can be given to many of them. The substance of the amendment—I realise that it is a probing amendment and I raise this purely in a irenic spirit—is open to objection because the argument in support assumes a permanent retention of the residuary bodies. Secondly, the mandatory duty to set out general policies for use and development of land is inconsistent with only giving guidance if asked, which was the way the argument was put by the noble Baroness, Lady Birk. It transcends what is requisite for co-ordination and is therefore an unnecessary interference with the devolved power.

The aspect of co-ordination, to which the noble Baroness, Lady Stedman, spoke, is common ground. On any showing this warrants serious attention. As I understand it—I am open to correction if I am wrong—my noble friend Lord Elton specifically undertook, in relation to Amendment No. 19, to give serious consideration to this aspect of the matter, saying in terms that it could be pursued with some profit.

Lord Sandford

I can perhaps mention in that connection that my noble friend on the Front Bench and I are meeting tomorrow to pursue Amendment No. 19. As soon as we have done so, I have it in mind to send a letter to those Members of the Committee who have been taking an interest in strategic planning with a copy of the draft regional guidance that has been prepared by SERPLAN and now out for consultation among the member authorities. This means, I hope, that when we reach Report stage all of us will have had a look at a sample of the kind of thing we are talking about.

I should like to confirm what my noble friend Lord Colville has said. When Members of the Committee see the document and know that the 12 home counties, which are the structure plan authorities outside London, and the 98 district councils in the home counties, which are the development plan authorities, can participate quite conveniently in working out this document, I do not see that there will be any great difficulty in regard to the 32 London boroughs which are becoming structure plan authorities and which are already development plan authorities being able to participate in much the same sort of way. I shall be in touch with noble Lords on that point after our meeting tomorrow.

Lord Elton

It is not often that a Minister at the Dispatch Box has the agreeable feeling that, thanks to the support of members of his party behind him, his presence is really superfluous. I shall therefore not detain your Lordships very long, though I am slightly wounded by the pleasure with which that statement is received.

Lord Graham of Edmonton

Not intended.

Lord Elton

The noble Baroness will be relieved to learn that what I am holding is not the document that she has in mind. What I have is a blank pad on which I send urgent messages asking for answers to the difficult questions that she puts to me. I am sorry that she felt at the beginning of this evening that she was still in the dark because I think that we covered most of this ground carefully at an earlier Committee sitting. However, I am grateful to the noble Baroness for being in the dark because she spurred my noble friend Lord Colville to elucidate much more clearly than I could—and, in almost every respect, absolutely accurately—what is contained in the Bill.

I shall therefore pick out just a few points. First, I shall deal with the matters raised by the noble Baroness, who was concerned about the memorandum, Circular 22/84, and that so soon after it was sent out—and it was a great thick document which I do not have in my hand any more than the noble Baroness does—we began dismantling those parts of it which apply to the abolition areas. We issued the memorandum in order to establish proper procedures throughout the country. The reason we are now rejigging those parts which deal with the abolition areas is that we are restructuring local government. It would have been wrong to delay the one in order to allow the completion of the other.

There will be a parallel memorandum for the procedures in Greater London and the metropolitan areas, but Circular 22/84 will continue to apply without change in the shire counties. Even in Greater London and the metropolitan county council areas, sections 1, 4 and 5 of the existing memorandum will continue to apply. The difference is that the procedures described in section 2, which deals with structure plans, and in section 3, which deals with local plans, will be telescoped. We believe that this is a very important improvement for those areas. It is one-stop planning for one-tier local planning authorities and, as my noble friend has said, that will be quicker than what we have at present.

Part 2 of a UDP will include all the local plans. The strategic guidance is not a substitute for structure plans. As I have tried to explain previously, Part 1 of the UDP performs that function. The guidance will certainly cover matters like the future provision needed for housing. However, the essence of the Government's approach is that the guidance will be worked up from the bottom in consultation with the boroughs and the districts. The Secretary of State will work with the boroughs and the districts, and it is not anticipated that many staff will be needed.

I planned to say quite a lot about the lack of conflict between the concept of the Secretary of State being involved early, as the noble Baroness, Lady Stedman, would have it, and not getting into a situation where he had tainted his judgment on appeal, as the noble Baroness, Lady Birk, thought he might have done. However, my noble friend Lord Colville dealt with that matter with great lucidity and pointed out that it is really all exactly the same, and will be the same under the Bill, as it was when both noble Baronesses were in office operating the system. That must be the most reasssuring comment that I can make to them.

My noble friend Lady Vickers asked about the future of regional aggregates working parties. The Government intend—I was going to say the "RAWPs"—the R-A-W-Ps to continue with borough and district representation, but I can reassure her that we do not intend that representation to swamp the existing membership. Wider minerals planning issues will be covered in the strategic guidance of which I have spoken, and that will provide the overview for which my noble friend asked.

I have with me a rather workmanlike speech about how all this will work. However, I honestly think that, if your Lordships read Hansard, you would be better advised to read what is already in it rather than what I might be tempted to add.

Baroness Birk

There were a number of points that I wanted to take up, but they were mainly points that were raised by the noble Viscount. He talked about how the Secretary of State had issued guidance for areas when he was in the territory of my noble friend who sits behind me—the area of the West Midlands. When he spoke about the Secretary of State's guidance, a great deal of what he was saying was really being done by the West Midlands County Council and the forum of county councils. However, that is by the way.

Viscount Colville of Culross

I am sorry, it is not. I have the document. It was specifically issued to all the local authorities in the West Midlands by the Secretary of State and it dealt with the sort of things I mentioned. It was not a West Midlands County Council document; it was a regional planning guidance document.

Baroness Birk

The work in the past had been done by the West Midlands County Council, unless we are talking about two different areas of work. Perhaps we should sort that matter out afterwards. I do not think that strategic guidance is firmly built into the present system, but structure plans are built in. I thank the Minister for his reply. We have given the subject another airing. I do not think that we have had a great meeting of minds on it, but in view of the time and the number of amendments still to follow on, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 56 agreed to.

Clause 57 [Redundancies and compensation payments]:

Lord Elton moved Amendment No. 136E: Page 40, line 14, at end insert— ("( ) 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.").

The noble Lord said: This rather technically worded amendment disguises a proposal intended to improve the job prospects of GLC and MCC employees. We recognise that there could be scope for a voluntary early retirement—or VER—scheme in connection with abolition. There is support for such a scheme outside this House. The staff commission has indicated that such a scheme could be helpful in reducing the number of GLC or MCC employees who would otherwise be left without a new job to go to at abolition, and my right honourable friend the Minister for Local Government and I have also been much influenced by the ideas on this front put to us by the representatives of the West Midlands branch of NALGO.

The Government have accepted the case put to them by the commission and the West Midlands NALGO representatives. We agree that it would be in everybody's interest if a VER scheme were set up. It would help those who so wished to stop working, and by enabling those younger than themselves to remain in employment it would minimise the number of redundancies. Such a scheme needs careful prepara-tion, and even more it needs the support and commitment of the parties to it.

We shall therefore be writing shortly to both unions and employers inviting views on our proposals, and that is why what we propose at this stage is an enabling power. It will allow the Secretary of State to make a scheme for a residuary body which has been saved the expense of redundancy compensation to make a contribution to the costs of the authority allowing the related early retirement.

The authorities already have the power to let staff go early and to recruit the replacement staff they need. This amendment would provide the one missing piece in the powers available; it is the fruit of trade union members who have been prepared to talk to the Government, and it will benefit their colleague. I beg to move.

Lord Rochester

Perhaps I may say a word about this new clause, for it is the clause to which the noble Earl, Lord Gowrie, referred briefly last night when my noble friend Lord Winstanley put forward an amendment, seeing the need for early retirement schemes and enhanced pension benefit. My noble friend was sufficiently impressed then with what the noble Earl had to say to feel that when he had been able to read Hansard—an exercise which has not yet been possible, for these exchanges took place at about midnight last night—he would be in a better position to determine whether or not he would wish to return to the subject at a later stage. He will now have the benefit of being able to read also what the noble Lord, Lord Elton, has had to say. My initial reaction, for what it is worth, is that this is a helpful clause. For the moment therefore I am happy to receive it with a tentative welcome.

On Question, amendment agreed to.

Clause 57, as amended, agreed to.

Clauses 58 to 60 agreed to.

[Amendments Nos. 137 and 137A not moved.]

Clauses 61 to 65 agreed to.

9.30 p.m.

The Deputy Chairman of Committees (Earl Cathcart)

Before calling Amendment No. 137AA, I should inform your Lordships that if it is agreed I cannot call Amendments Nos. 137B, 137134 and 137BB.

Clause 66 [Precepts]:

Lord Barnett moved Amendment No. 137AA: Page 47, line 14, leave out subsections (4) to (6).

The noble Lord said: The purpose of this amendment is to exclude the proposed joint authority from the rate-capping provisions of the Rates Act 1984. Before I go any further, I should like to make it clear at the outset that I very much agree with the need to control local government expenditure. The more that is spent on local authorities the less there is for other public expenditure, regardless of whatever the total may be; that is to say, within any given total, the Government, regardless of the figure, must be concerned that the total should not be uncontrolled because it could leave less for public expenditure that any government may consider to have a much higher priority both socially and economically. For example a government may wish to spend more, as it should at the present time, on the National Health Service or capital expenditure in terms of public investment, but these are bound to be restrained if local authority expenditure, no matter how good, has already pre-empted that level of public expenditure.

The Earl of Gowrie

Hear, hear!

Lord Barnett

I hope the noble Earl will say "hear, hear" from now on, because that is rather different from what he said the other day—in my absence, unfortunately. In col. 166 of Hansard on 30th April, he quoted from my book Inside the Treasury—I am grateful to him—where he said: The intellectual basis to the policy"— that is, the policy of the Government— is argued brilliantly and cogently on page 90 of the book, Inside the Treasury, written by the Chief Secretary to the Treasury in the previous Labour Government".

Lord Boyd Carpenter

Hear, hear!

Lord Barnett

I am obliged to the noble Lord for saying "Hear, hear", but the noble Earl got it wrong on two counts. For that public statement he has written a personal apology to me for getting the page wrong, but he got more than the page wrong, as I have already suggested. He was referring to page 76 of the book.

I am not ungrateful to him for his constant references to my book—published by Andre Deutsch, price £9.95—and for the fact that he told me that the Prime Minister keeps it by her bedside I am equally grateful. But he got it completely wrong because he was attempting, in reply to my noble friend Lord Stewart, to argue that what I said on that page gave intellectual support—intellectual support, if you do not mind—to the arguments that he was putting forward on rate capping. The noble Earl will correct me if I am wrong, but that is what he was arguing. There is no where on page 76 or anywhere else in that chapter that said anything whatsoever in support of the need to have rate capping or anything that is in this Bill or any other Bill that this Government have introduced.

The Earl of Gowrie

I am grateful to the noble Lord. Neither of us I think has the text of the sacred work in front of us. Nevetheless, the phrase that I was referring to was in the sentence where, just after a description of a particularly difficult set of Cabinet meetings on local government expenditure, the then Chief Secretary said: "We were always looking for ways of exercising control".

Lord Barnett

The noble Earl really must not misquote. I am sorry he has not got my book there. What I was saying in that paragraph to which he is referring was that I certainly was in favour of using measures like squeezing local authority expenditure by reducing the rate support grant; but nowhere at all in that chapter of my book or in anything that I have ever said—and I hope that the noble Earl will agree, because I do not wish to pursue this at too great a length at this hour of the night—would there be support for the idea of compulsion from Whitehall, where officials cannot be aware of the detailed needs of local authorities.

Rate capping is a clumsy and ineffective way of achieving the objectives of central Government—which I support—to have control of total public expenditure, as the noble Earl knows. I do not resile from anything I have ever said, whether as Chief Secretary or since, and he knows that; but I have never at any time argued for compulsion or the case for central Government to intervene and to tell individual local authorities what should be their detailed expenditure. I hope that the noble Earl will accept that from me, because that is certainly the case.

But that is not to say, as I have repeated again tonight, that once you allow totally uncontrolled expenditure in one area of government, whether it be local or central, that it must then pre-empt other areas of public expenditure—and I am glad to see the noble Lord, a predecessor of mine at the Treasury, nodding in agreement. But that is an entirely different matter from anything that I argued at that time or thereafter in my book. What I was arguing then was about a squeeze through rate support grant allied to an advisory, voluntary consultative committee whereby one got the maximum co—operation from local authorities of all parties. In that way—and I said this in the book as well—we achieved a greater degree of success than anything that has yet been achieved by this Government with their rate-capping proposal.

In fact, this amendment seeks to remove from the Bill what the Government are proposing here because the Government do not just want discretionary power to rate-cap; they want an automatic power to rate-cap—because that is what Clause 66(4), (5) and (6) provide: for the new authorities, that is to say, to be automatically rate capped as from 1st April 1986 for three years. The use of Rates Act 1984 powers in this way is contrary to the Government's own legislation, contrary to Section 2(2) of that Act which requires that designation shall occur only because of expenditure: likely to be excessive having regard to general economic conditions". The abuse of Rates Act powers can be highlighted by quoting from the noble Lord, Lord Bellwin, who said during the passage of that Bill: The Bill provides that authorities can only be selected for rate limitation if they are excessive spenders". I refer to Hansard, volume 450, No. 106, col. 903 on 9th April 1984. But the current criteria for rate-capping involves a comparison of an authority's expenditure with its Department-of-the-Environment-defined Grant Related Expenditure Assessment—and I hope that your Lordships will forgive me; it is a terrible phrase: it is GREA—and the target. But the Secretary of State is not in a position to make a reasonable estimate of the likely relationship between expenditure GREA and target for a joint authority before the authority has been set up and has established itself. Confirmation is in fact to be found in a Government interdepartmental working party minute, to this effect: The Home Office said that … although they had sufficient knowledge for criticising budgets"— Who has not?— they did not have the expertise to formulate them. Of course, we all know that to be the situation. All of us could find means of criticising almost anything that any government or any local authority does, but to ask Marsham Street or the Home Office to formulate detailed proposals is an entirely different matter, as they themselves concede.

Here we have a government department in possession of the most detailed information about fire and police services, yet it is unable to formulate budgets for the proposed joint authorities. So what special expertise can the Secretary of State for the Environment bring to bear on the problem in order to supply the required figures? The Departments of State responsible for the three major joint authority functions—there is the Home Office and the Department of Transport—presentaly provide advice and guidance on policy initiatives and expenditure levels to be applied at the local level. While doubtless close links between the decision-makers at the local levels and these Departments of State will remain after the 30th March 1986, a new set of relationships between local decision-makers and the Department of the Environment is to take precedence.

Does this imply a lack of confidence on the part of the Department of the Environment in the influence that the other Departments of State are likely to have over local decision-makers? Perhaps the noble Lord will tell us when he comes to reply. But the dangers inherent in giving the Secretary of State for the Environment powers that allow the detailed control of budgets have been revealed in the outcome of a court action between not a Labour local authority but the Conservative controlled London borough of Hammersmith and Fulham and the Department of the Environment. After a four-year legal tussle over wrongly set expenditure targets, won by the London borough earlier this month, a precedent has been set for local authorities throughout the country, … to sue the Environment Secretary over and over again on individual items of expenditure". This is what the Guardian had to say on the 16th May. An increase in the number of legal actions would be no more or no less than a response to detailed meddling in local affairs by remote bureaucracy, the Department of the Environment. Frankly, if this were being done by any other government than this one, I have no doubt whatsoever that there would be many noble Lords on the opposite side of the Committee who would be complaining bitterly about interference and meddling from a government in Whitehall, and about the shambles that is being created by this Bill. All I am seeking to do now is just to put a little of it right. It surely must be better to exclude joint authorities from rate capping for the reasons I have given. I therefore beg to move.

Lord Elton

I will not join issue with the noble Lord on the merits of his admirable work on the workings of the Treasury, nor on the page references that my noble friend quoted. The quotation was correct, the page was wrong. I will address myself simply to the amendments on the Marshalled List.

The first of the amendments, Amendment No. 137AA, would exempt the new authorities both from automatic control of their precepts for the first three financial years after abolition and entirely from the provisions of the Rates Act, 1984, on the selective limitation of rates and precepts. The amendment, in the name, I think, of the noble Baroness, Lady David, which is less radical, deals only with the new ILEA, and I take it that we are to address them together. Am I wrong? I merely need guidance.

Baroness David

I think in fact it is just a slightly different issue from the main issue, so it was preferred that they were taken separately.

Lord Elton

If I referred to it inadvisedly from time to time, it is because I see it as a problem within a problem rather than as a problem beside a problem—if I make myself clear. That would exempt the authority from automatic precept control for the three-year transitional period.

9.45 p.m.

When we were preparing this Bill we did so in the light of experience—our experience of the considerable inflation in bureaucracy and administrative costs which followed the two major reorganisations of local government in 1965 and 1974. We were also having the experience of the considerable and damaging overspends then being indulged in by a number of local authorities. The joint authorities seem to us to be at risk of developing into overspenders both because all of them will be new authorities, just as the authorities we set up in 1965 and 1974 were new authorities, and because some of them, though not, of course, all will be inheriting a tradition of overspending from their predecessors.

Your Lordships—not even the noble Lord, Lord Barnett—would not have forgiven us had we simply let administrative inflation rampage out of hand a third time; nor would the ratepayers. We therefore resolved to bring in a means of firm restraint for the first formative three years, and for those years only. We made this clear in the White Paper.

It has been suggested that the controls in Clause 66 will result in the services being run by Whitehall. That will not be the case. If they are not satisfied with them, the new authorities will be free to apply to the appropriate Secretary of State for a derogation from their initially determined permitted expenditure levels and will be free to negotiate with him over those same levels.

It will also be entirely for the new authorities themselves to determine their own priorities for expenditure within the total resources available to them. This is not a Whitehall takeover. It is a sensible provision to see that brand new authorities are watched over and guided by those with overall responsibility for overall local government expenditure during their first few formative years. I was heartened to hear the noble Lord, Lord Barnett, say that that was a central Government responsibility.

Those were generalities; but I ought to say something about the effects on each of the services for which new authorities will be responsible after abolition. First, I shall refer to the police and fire authorities. These authorities have a safety net of statutory duties below which they must not and cannot fall. In the case of the fire service there are nationally recommended standards of fire cover. My right honourable friend the Home Secretary has made it clear on more than one occasion that he will entertain no applications from fire authorities to close fire stations or to remove appliances where the operation of the recommended standards of fire cover would be affected. We have heard a great deal of misleading and mischievous propaganda on this point, particularly in London, and I hope that those responsible for such propaganda will reflect on the effect of their statements on public confidence in and on the morale of the fire service. That service stands in very high esteem in all parts of your Lordships' Chamber.

Police authorities receive a 50 per cent. specific grant on the basis that they maintain an efficient and effective force. Their establishment is subject to the approval of my right honourable friend the Home Secretary. Again, there is no way that standards of policing are going to be affected by the substitution of joint authorities for the metropolitan county council police committees in the metropolitan areas. But that does not mean that there may not be efficiency savings to be made in these services. In relation to the fire service in particular, my right honourable friend has made clear on a number of occasions the scope for such savings. Precept control under Clause 66 is one means by which the achievement of such efficiency savings can be encouraged.

The bulk of expenditure by passenger transport authorities is, and will continue to be, on revenue support to public transport in their areas. We have long believed that revenue support in the metropolitan counties is too high. The application of the protected expenditure level mechanism under the Transport Act 1983 reflected our policy of reducing that expenditure towards the provision in successive public expenditure White Papers.

In their 1984–85 revenue grant determinations four out of the six metropolitan counties demonstrated their willingness to co-operate with this policy. Our application of precept control will also clearly take account of that policy. In the letter of advice issued to passenger transport executives last year, for their preparation of plans for 1985–86 to 1987–88, we advised them to plan on the assumption that the level of revenue support over the three years of the planning period might be reduced by around 25 to 30 per cent. in cash terms below the PEL set for 1984–85. The provisional expenditure levels set for 1985–86 are consistent with that advice and are 10 per cent. below those set for 1984–85. I should perhaps not touch on ILEA since the noble Baroness has reserved it.

I turn therefore to Amendment No. 137BB, which I take it is on the table in front of us. Amendment No. 137BB Page 47, line 33, leave out from ("years") to end of line 42. This amendment would remove the discretion of my right honourable friends to determine expenditure levels for each of the new authorities on criteria appropriate to those authorities individually and would require them instead to act according to general principles applicable to all the authorities responsible for the same services.

This amendment, too, misconceives the purpose of the transitional controls. It also ignores the significantly different responsibilities which are proposed for the PTAs. Merseyside and Tyne and Wear PTAs will assume responsibility for the Mersey and Tyne tunnels. Some, but not all, PTAs may assume the MCC's interests in airports.

The transitional precept controls must take account of those different responsibilities. They must also take account of the fact that, unlike councils subject to selective limitation, not all the MCCs are currently excessive overspenders; nor is the pattern between the services for which the new authorities will become responsible consistent. Some MCCs spend very highly on some—but not necessarily the same—services, and not on others.

The amendment would require my right honourable friends to operate precept control as a blunt instrument, demanding across-the-board savings from all new authorities because a few of them will inherit excessive spending levels. The amendment, incidentally, would also delete the purely technical provision in Clause 66(6)(b) to deal with the situation if, during the transitional period, the Government found it necessary—as we sincerely hope they will not—to introduce general rate limitation under Section 10 of the Rates Act.

It makes it clear that the new authorities would remain subject to precept control under this Act. Without the provision, both sets of procedures would apply with slight, but important, technical differences. I do not think that that would be sensible, nor do I think it was intended.

I hope that I have said enough to allay what I appreciate are real concerns about the controls proposed in this clause. I address myself particularly to the new joint authorities because I believe that that is where the anxiety is greatest. I have not referred to ILEA because I understand that we are to have that pleasure later.

Lord Barnett

I do not think the noble Lord will be too surprised if I tell him that I do not find his reply at all satisfactory. Indeed, his reply seems to indicate to me, and I should have thought to most noble Lords, a lack of confidence in the legislation itself because it is a fact, as we all know, that single-function authorities are more likely to turn out to be pressure groups for particular items of expenditure; whereas it would have been much better if one had multi-function authorities county-wide. But the Government had decided by a simple sentence in the manifesto to abolish those without having thought through what they will put in their place. But they did not abolish the functions—may I finish the sentence?

Lord Elton

The noble Lord is traducing—

Lord Barnett

I shall give way in a second; but if I may finish, having decided to abolish authorities but to keep functions, the Government have not known precisely what to do with those functions. That is why they are in the shambles that they are in at the present time.

Lord Elton

I do not know whether the noble Lord wants to expedite proceedings or to delay them; nor do I know whether he was present at the Second Reading or at most of the Committee stage days. But we have disposed of the myth or canard that this is an ad hoc policy dreamed up in a few minutes before the election programme and imposed upon the party by a single sentence in the manifesto. I will dispose of it now, because it simply is not true, and if the noble Lord wants to go back to the Second Reading and have a furious political debate about that, I am perfectly happy to do so. But if he does not, he should not raise the matter and should get on with the subject in hand.

Lord Barnett

The noble Lord is in danger of getting as angry as his noble friend Lord Gowrie. He should not get too upset about these things. He must be prepared to accept that not everybody agrees with what, by bringing in a few hundred Members, he was able to persuade the House to vote for; that he is not able to persuade everybody else of the truth of what he says. The plain fact is that I do not accept that argument, and neither does anybody who has really studied the matter. The plain fact is that the Government are retaining functions and do not know where to put them. That is why they have residuary authorities; that is why they have joint bodies, and all the problems that we are now discussing. The noble Lord knows the situation, and he must not get too excited about it.

That is a fact, and the reason why I raise it now is not that I particularly want to stay up through the night, though I am used to that. I must tell the noble Lord that his colleagues in the other place, including the present Chancellor, used to keep me up on Tuesdays, Wednesdays and Thursdays from four o'clock in the afternoon to eight o'clock the following morning week after week. If he likes, we shall be happy to oblige him. That is not my intention, but if he keeps getting angry and annoyed about these matters I am bound to continue. He must not get too angry. He must understand that there are different views about what he said.

Lord Elton

I accept that there are different views about what I said before, and I shall get as angry as I please according to what the noble Lord says. But as to the length of the proceedings, I only want to put it on record that when the noble Lord says, as he has said several times already, that I must accept something, or, "It is the case that …", your Lordships must not take the silence which I display in order to expedite matters this evening as being in any way assent to anything he says.

Lord Barnett

I do not expect the noble Lord to accept what I say. We are debating matters about which we disagree, and he must therefore accept that there are many others who do not agree with what he has said for the last three weeks. The fact that he has been able to persuade some of his colleagues to vote for matters that he has moved in this Chamber does not mean that we on this side of the Chamber, or those on the other side, either, or those outside, have to agree with him. I am sorry that he is annoyed about it, but that is the way I feel about it. I am bound to tell your Lordships that.

Having said that, and having upset the noble Lord—and I apologise for upsetting him; I hope that he still sleeps all right—he said earlier (and I hope he will consider it in order if I reply to him) that I would not forgive him if the Government did anything to add to the inflationary spiral. I have not done anything to add to the inflationary spiral. Anything I say here tonight will not do a thing. It is what the Government have been doing that will add to the inflationary spiral, and not what I am doing.

The plain fact—and the noble Lord has not replied to this straight point in relation to this amendment: it is no use his getting angry about it, he has not replied to it—is that there is no basis for the judgment that these newly-created authorities will be high spenders. What grounds has the noble Lord? He has not said anything at all. He has no comparison to make, as I said was necessary in order to have the discretionary power to rate-cap, let alone to rate-cap automatically. So why do the Government want to have this automatic power?

I thought that the Government were supposedly abolishing what they had described as, and which the noble Lord tells us was accepted by a majority as, a wasteful and unnecessary tier of Government. I quote the noble Lord. Presumably the Government must think that the new authorities will, by contrast, be efficient and necessary. Yet having decided that, they now decide that they want an automatic power to rate-cap. How has the noble Lord replied to that argument? He has not replied at all. The Government apparently have such little faith in their own proposals that they feel it necessary to subject the new authorities, not merely to the possibility, not merely to a discretionary power, of rate limitation like other authorities, but to automatic rate limitations for the first three years of their existence. In effect, the Government are presuming the new authorities guilty before they have even had the chance to prove themselves innocent. I should have thought, even at this late stage, that your Lordships would accept that the noble Lord the Minister has not replied to the arguments.

On Question, amendment negatived.

10 p.m.

Lord Renton moved Amendment No. 137B: Page 47, line 28, after ("fire") insert ("and civil defence")

The noble Lord said: With this amendment goes Amendment No. 137C. Amendment No. 137C: Clause 67, page 48, line 34, after ("fire") insert ("and civil defence"). Both these amendments are consequential upon amendments that were agreed to on Clause 25 a week ago. I beg to move.

Lord Skelmersdale

Since it has been some Committee days since this subject was referred to, I should say that, of course, I totally agree with my noble friend.

On Question, amendment agreed to.

Baroness David moved Amendment No. 137BA: Page 47, line 30, after ("authority") insert ("other than the Authority established by Part III of this Act".).

The noble Baroness said: The reason that I wish to take this amendment separately from Amendment No. 137AA in the name of my noble friend is that the position of ILEA is slightly different from the position of the joint boards in that ILEA is to be a directly elected authority. I totally agree with everything my noble friend has said, but it seems to me that from the point of view of ILEA it is even more important that it should be left to get on with its own business for its first three years as a newly elected authority and should, even more than the joint boards, have the right to make up its own mind and not be handicapped by this ogre standing over it for the first three years of its existence. I beg to move.

The Earl of Gowrie

I do not know whether it falls to me to be wheeled on as the ogre, as the noble Baroness has said, but we consider it essential to include ILEA within the coverage of this clause. ILEA is clearly over-spending. That its provision is generous to say the least can clearly be seen by looking at its pupil-teacher ratios, its numbers of non-teaching staff, its expenditure on books and equipment and the like.

The precept maximum of 77.25 pence for 1985–86 approved by the House on 6th February was consistent with the expenditure level of £900 million announced last July by my right honourable friend the Secretary of State. That expenditure level required only a small reduction in cash from ILEA's likely out-turn for 1984–85. Over the past few years some 20 authorities have cut their spending on education by 5 per cent. or more in real terms in one year. The expenditure level for ILEA was more than 60 per cent. above its GREA. In practice, therefore, ILEA will be spending a great deal more in 1985–86 by using reserves.

Whatever reductions the body may eventually make in 1985–86, it is inevitable that on abolition the new ILEA will inherit a level of expenditure well in excess of its GREA. The public expenditure White Paper published on 22nd January made clear that the Government will be making special efforts to curb over-spending, particularly by ILEA, in order to bring expenditure on education within the planned totals. The use of precept controls over the new ILEA for its first three financial years is obviously one of the means we shall use to achieve that aim. The amount of any reduction which we shall require in any one year clearly cannot yet be determined, but there is no reason to suppose that it will be any more harsh than the small cash reduction which was implied by the expenditure limit for 1985–86.

The noble Baroness has argued that we should rely on the existing provisions of the Rates Act 1984 for selective precept limitation of ILEA, and that it should not be subject to automatic precept limitation for the three-year transitional period. But this is to ignore the central purpose of these transitional controls as I have already explained them. I put it to the noble Baroness that it may help the new ILEA in responsible forward planning and in negotiations with my right honourable friend the Secretary of State for Education and Science to know right from the outset just where it is and within what controls it will be required to operate. I should have thought that the noble Baroness would welcome that and that therefore she could withdraw her amendment.

Lord Kilmarnock

Before the noble Baroness decides whether or not to withdraw her amendment, can the noble Earl say whether any special arrange-ments will be made for the removal of asbestos from school buildings? Will a special fund which will not be subject to rate capping be made available for that purpose? The removal of asbestos from school buildings could be a very expensive job.

The Earl of Gowrie

I shall look into that and let the noble Lord know.

Baroness David

Clearly, there are many problems which have to be resolved. The noble Earl has given a long reply—

The Earl of Gowrie

Not very long.

Baroness David

Long compared with my speech in moving the amendment. I shall read what the noble Earl has to say. I am not convinced by his arguments. A new authority should have a chance to be treated responsibly and be allowed to make its own plans. After that time, if it has behaved, as the noble Earl put it, irresponsibly, then something should happen. However, it should be given a chance during its first three years to be trusted and to have a real opportunity to prove itself. However, for the moment I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 137BB not moved.]

Clause 66, as amended, agreed to.

Clause 67 [Block grant]:

Lord Renton moved Amendment No. 137C:

[Printed 21/5/85; col. 267.]

On Question, amendment agreed to.

Clause 67, as amended, agreed to.

Clauses 68 to 71 agreed to.

Clause 72 [Levies]:

[Amendment No. 137D not moved.]

Clause 72 agreed to.

Clauses 73 to 76 agreed to.

Clause 77 [Audit]:

[Amendment No. 137E not moved.]

Clause 77 agreed to.

Clause 78 [Transitional provisions relating to block grant and expenditure levels]:

The Deputy Chairman of Committees

In calling Amendment No. 137F I should say that if it is agreed I cannot call Amendment No. 138.

Lord Barnett moved Amendment No. 137F: Page 54, line 10 leave out subsections (2) and (3).

The noble Lord said: I move this amendment standing in my name and that of my noble friend Lord Stoddart of Swindon and also of the noble Lord, Lord Diamond. The purpose of the amendment is to ensure that the same principles are applied in determining block grant entitlements and total expenditure levels for the proposed joint authorities as are applied for other local authorities; which seems a perfectly reasonable objective, as I hope your Lordships and the Minister will agree. I see him smiling in assent, so perhaps he will.

Clause 78, as amended on Report in the other place, provides for the Secretary of State to determine notional 1985–86 grant entitlements and to set 1986–87 grant-related expenditure assessments—GREAs—and expenditure targets. In subsections (2) and (3) the Secretary of State seeks the power to depart from the general principles presently applied when settling GREAs and expenditure targets for relevant authorities; that is, for the successor bodies to the metropolitan counties and the GLC.

In introducing the amendment to insert subsection (3) at the Report stage in another place the Minister for Local Government, Kenneth Baker, said, and it is worth quoting: Without this amendment, we could face the situation where it was obvious that one selected authority needed to spend more than another on transferred functions, but we could not allow for this because there would be no general principle to describe it. I should stress that we shall still have to apply principles to each authority, which will have to be reasonable. We shall have to justify the reasonableness; we cannot pluck figures out of the air."—[Official Report, Commons, 28/3/85; col. 728.] It is an innovation for Ministers, I must say, not to pluck figures out of the air. Ministers have been doing it for a very long time. I confess to having done a bit myself and I am sure that the noble Lord, Lord Boyd-Carpenter, did. Now we are expected to accept that they will never ever do such a thing again: all Ministers in future will be very reasonable. But if they intend to be reasonable—and let us assume for the moment that they will be reasonable—why on earth will they not adhere to the common principles?

Is the reluctance to adhere to those common principles a vote of no confidence in the GREAs and the target system designed, redesigned and detailed by successive Conservative Secretaries of State? The departure from common principles allows scope for the exercise of bias against or in favour of individual authorities which has been known to happen over the years under successive Governments.

It is disturbing in the context of subsections (2) and (3) to read a letter from the Secretary of State for the Environment to the leader of Sefton Council, Ronald Watson, dated 22nd January 1985. He declares: As to the future, I am well aware of the view that the y ear when the abolition of the metropolitan counties takes place should be seen to coincide with a nil increase or ideally a reduction in the ratepayers' bill. This is certainly something I shall have in mind". That is a perfectly understandable statement of objectives. In Clause 78 the Secretary of State is seeking to take powers to secure that objective regardless of what rate rises might or might not be imposed on shire counties; that is to say, as a result of cuts in rate support grant, regardless of the implications of a nil increase or a reduction in rates in metropolitan areas on the standard and level of locally provided services.

At the House of Commons Report stage Kenneth Baker, the Minister, said that he would examine the practicality of publishing details of the principles applied to individual authorities where subsection (2) and (3) powers are invoked. While deletion of subsections (2) and (3) would be the best protection, in my view, against bias in Government dealings with individual authorities—not just the present Government but any future Government—publication of details of the principles applied to individual authorities under subsection (2) and (3) powers would at least be a second best safeguard. But there has so far been no indication from the Government as to whether they propose to publish that information. Perhaps tonight the Minister will give us the details that I have indicated we are entitled to expect. I beg to move.

Lord Elton

The purpose of the subsections which this amendment would delete is to enable the Government to take account of the actual distribution of the cost of transferred functions in setting expenditure guidance, or "targets", for successor authorities and expenditure levels for those successor authorities selected for rate limitation. Clause 78(2) concerns targets, and Clause 78(3) concerns expenditure levels. Both provisions are transitional and apply to the first year after abolition only.

I should first say that the Government have repeatedly made it clear that we do not want to retain the system of targets and grant holdback any longer than necessary; But I am not yet able to say whether targets will be set for 1986–7. However, if they are retained, Clause 78(2) will be essential, as I shall explain. Although we have taken no decisions on selection for rate limitation in 1986–7, I can say with confidence that some of the successor districts are likely to be selected, and Clause 78(3) is certain to be required.

Our object in adjusting targets and expenditure levels for the consequences of abolition will be to take account as accurately as possible of the actual incidence of the costs of transferred functions. Precisely how we will do that will depend in part on the quality of the information we get from the GLC and metropolitan counties. Without these provisions we should have to set targets on the basis of general principles applying to all authorities and expenditure levels on the basis of principles applying to all authorities in a class.

10.15 p.m.

Concern has been expressed about the magnitude of the discretion these provisions give the Secretary of State, but he will still have to act reasonably and in accordance with principles under the common law. Moreover, we made it clear, and I can repeat, that the discretion will be used only to make adjustments between authorities for differences in the costs of tranferred functions. It will not be used to require bigger savings from successor authorities on their inherited spending, by way of targets or rate limitation, than we would have required from the appropriate metropolitan authority if it had survived.

I detect that the noble Lord's anxiety is that we shall use the availability of differences between the authorities to penalise those that we do not like. However, what I am saying to the noble Lord is that we shall use it merely to carry forward existing policy in a uniform manner.

The provisions at issue are thus both technical and transitional. Without them, some successor authorities would have difficulty meeting the costs of transferred functions while others would have more than they needed. I know that this is not a result that the Committee wishes to achieve, and I do not think the noble Lord does either. The noble Lord asked me about publication. I can tell him that the Secretary of State will explain how he has made the adjustments to targets and, where appropriate, for successor authorities.

Lord Barnett

The noble Lord, Lord Elton, will not be surprised to hear that I do not find his reply at all satisfactory. However, not wishing to upset him again at this hour of the night, I will not press this amendment. I beg leave to withdraw it.

Amendment, by leave, withdrawn.

Lord Kilmarnock moved Amendment No. 138: Page 54, line 14, at end insert ("and any principles used for any authority shall have explicit regard to the need to ensure continued funding of voluntary organisations comparable with that which obtained before the abolition date.").

The noble Lord said: I beg to move Amendment No. 138. I think it will be for the convenience of the Committee if I speak also to Amendments Nos. 139 and 140.

Amendment No. 139: Page 54, line 20, at end insert— (" ( ) In setting any expenditure level under section 3 of the Rates Act 1984 or any maximum rate under section 4 of the Rates Act 1984 in authorities in the Greater London and metropolitan county areas, the Secretary of State shall have explicit regard in the three years beginning with the abolition date to the need to ensure continued funding of voluntary organisations comparable with that which obtained before the abolition date."). Amendment No. 140: Clause 81, page 55, line 41, at end insert— (" ( ) Any arrangements for operating a London Rates Equalisation Scheme under section 66 of the Local Government Act 1963 shall have explicit regard to the need to ensure a distribution of rate burdens and grants within the Greater London area which allows continued funding of voluntary organisations comparable with that which obtained before the abolition date.").

We have all heard the Government's arguments on a number of occasions that the boroughs and districts will be free to levy rates equivalent to the precepts of the GLC and the metropolitan counties and the Government will divide up the grant-related expenditure of the upper-tier authorities among the boroughs and districts.

These assurances are not at present, in my view, explicit and specific enough. This batch of amendments enjoins the Secretary of State to have explicit regard to the need to ensure a broadly comparable overall flow of funding to the voluntary sector when he is calculating the level at which expenditure targets and rate caps should be set and when arrangements are made for operating the London rates equalisation scheme. This will give an appropriate weighting to the expenditure on voluntary projects, when available to the boroughs and districts, without affecting their freedom to choose to disburse those resources as they may decide. In passing, perhaps I may say that I am assured that the computer in the Department of the Environment is quite capable of adding this explicit consideration, this kind of weighting, to its deliberations.

This evening I want to use these amendments to seek a little further clarification of some undertakings that the noble Lord, Lord Elton, gave yesterday If he is able to give me the assurances I seek, these amendments may be superfluous, or partly superfluous. At col. 22 of Hansard yesterday, the noble Lord said: My third undertaking, therefore, this afternoon is that both RSG and targets, if we still have them, will be adjusted to take account of their…responsibilities"— that is, the expenditure of the authorities— for this expenditure". I stress the word "this", because I am uncertain whether it refers only to transitional funding or to the collective scheme under Clause 47 as well.

At col. 88 the noble Lord spoke of the effects of the Government's undertakings (and I quote again), in respect of the amount of money which the Secretary of State allowed to be expended through GRE … or rate capping". He went on to say: We will adjust the GRE and if they continue, reduce the targets in order to see that expenditure by the local authorities of these sums of money does not militate against them". Again, I am not quite sure of the value or weight that should be attached to the word "these". I seek definition of "these sums".

At col. 91 the noble Lord mentioned, in addition to GREs and targets, rate capping assessment, and said that: the expenditure which I have encouraged local authorities to make with the hacking of Government money will not bring them into that sort of penally".

As with the previous quotations, it is important to know whether the broader or the narrower interpretation of expenditure is correct; that is to say, whether we are talking only of transitional funding or whether we are talking of all the collective borough and district expenditure under Clause 47; whether that will receive the same treatment, too.

The amendments on the Marshalled List refer to all voluntary sector grant expenditure inherited by boroughs or districts from the GLC or the MCCs. If the noble Lord's undertakings are to be interpreted in a narrower sense than that, we may want to return to the amendments at the next stage of the Bill. For the moment I am simply seeking clarification from the noble Lord, so that I may know how to proceed.

Lord Elton

To save time, may I ask the noble Lord whether his real concern is with clarification of the undertakings, or does he wish me also to address the amendments themselves?

Lord Kilmarnock

The noble Lord has addressed me with commendable directness. I shall reply in the same spirit. At this stage I am simply seeking clarification. I have no intention of pressing the amendments.

Lord Elton

I think, then, that I should be able to dispel the fears that have been voiced. In recent years the great majority of GLC spending has been financed from the rates through the GLC's precept on the boroughs. On abolition, the GLC's precept will, of course, cease. In its place the successor boroughs and districts will start to levy their own rates and successor joint authorities to levy their own precepts to finance the services that they take on. The fire board will levy a precept but by far the greater volume will be raised by the boroughs for their own use. There is absolutely no question about the boroughs' access to the major source of GLC resources because it is their own ratepayers.

There has been concern about the distribution of these resources. It has been pointed out that there are rich boroughs and poor boroughs and that the GLC's precept redistributes these resources within London. The noble Lord will forgive me if I reassure others than those he has spoken for. We have made clear from the start that we intend this redistribution to continue after abolition. The main mechanism will be an extended London rate equalisation scheme under which the very rich central boroughs will continue to contribute towards the cost of these services elsewhere in London. Together with the redistributive effect of the block grant system, this will ensure that the poorer boroughs are not worse off than those with higher resources. We have also given an assurance about the overall level of block grant for these services after abolition.

In recent years the GLC's high spending has meant that it has got very little grant. In 1983–84 and 1984–85 it got none at all. Nevertheless, had its spending been lower, it could have earned a substantial amount of grant. We have made it clear that the London authorities can expect to get the same level of grant for any given level of spending as the GLC would have received if it had remained in being and spent at the same level. This safeguards London's overall grant position from the effects of abolition.

Within the block grant system we have also given the boroughs assurances that we will adjust the various figures—GREs, expenditure levels and targets, if these are retained—to take account of their new responsibilities. The GLC's GRE will be split between the successor bodies on the basis of the national formulae that apply throughout the country. If targets are retained, successor bodies' targets will be adjusted in a way that takes account of the geographical distribution of GLC spending. We will also allow for additional functions being taken on from the GLC by the boroughs when we set the expenditure levels for any of these boroughs which we select for rate capping in 1986–87.

I hope that what I have said will allay the very real concern that has been expressed during earlier discussion in the Committee. Provided that the GLC's successor bodies take responsible decisions about the services they take on, the resources will be there to finance them. I have spoken specifically about London because that is where the situation is most complex. However, with the exception of the London rate equalisation scheme which is necessary in London because of the very high resources of the central boroughs, the assurances which I have given apply also in the metropolitan areas.

I have stated our commitment. If its effect is exactly to match the case of each successor authority, we must have the information on which to base our calculations. Successor bodies that wish to use our commitment in order to protect themselves, must give us that information, and I also ask them to impress on the abolition authorites the need to do the same.

What I have just outlined is the general position that applies to all the services being taken over by successors. Let me answer particular questions about how this applies to support for the voluntary sector. Under our proposals for transitional aid on projects taken over from the GLC and the MCCs, the boroughs and districts will bear a proportion of the cost. I can confirm that both that expenditure and the contribution each borough or district makes under the collective scheme for its area will be taken into account in the way in which I have described.

In fairness, I must make it clear that the resources available to boroughs and districts are not ring-fenced by the system for them to spend on voluntary bodies alone. Just as the GLC and the MCCs have been able to set their priorities within their overall budget so, too, will the boroughs and districts. However, I hope the message will be clear to authorities that resources are released by abolition and that the voluntary sector has a claim to some of those resources.

Lord Kilmarnock

I am most grateful to the noble Lord. I think that what he said was music to my ears, but I shall obviously need to read what he said with close attention tomorrow. I understood the noble Lord to say that in fact both the transitional funding and the collective expenditure under Clause 47 would be considered in setting these levels. If that is so, I am glad of it.

I assure the noble Lord that we are not asking for earmarking, but simply seeking to set the targets in such a way that no authority can say that it is having to cut back on voluntary service provision because its target was hopelessly inadequate. I think that I have said enough on that matter. It is too late to go into the complexities of the London rate equalisation scheme. I shall read very carefully tomorrow what the noble Lord has said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 139 not moved.]

Clause 78 agreed to.

Clauses 79 and 80 agreed to.

Clause 81 [London rate equalisation schemes]:

[Amendment No. 140 not moved.]

On Question, Whether Clause 81 shall stand part of the Bill?

Lord Barnett

This is a very important clause and I hope that your Lordships will not mind if I say a few words about it. In the consultation paper The Disappearance of the GLC Precept, the Secretary of State affirmed his intention: to ensure that the disappearance of the GLC precept does not result in an inequitable shift of burden either between ratepayers within London or between London ratepayers and those in the rest of the country". London equalisation is an esoteric and complex subject; therefore, I shall briefly explain the background to Clause 81. Noble Lords will be aware that the GLC precept serves an equalising purpose over the Greater London area. That is to say that the GLC's net expenditure is financed by means of a broadly equal rate poundage across the whole of London. One effect of this is that the richer boroughs, such as Westminster and the City of London, which are high in rateable resources—and I suppose I should declare an interest—pay more than the poorer boroughs, such as Hackney and Lewisham.

When the GLC is abolished, the distribution of its service responsibilities—and therefore its financial responsibilities—will inevitably be uneven and will have no regard whatever to the resources available to individual boroughs. A borough which has low rateable resources, but heavy transferred responsibilities, could therefore be severely disadvantaged by the abolition of the GLC, whereas a more fortunate area would have a windfall gain. These are facts which are generally recognised, and I know that the Government recognise them. It is this problem which the Government are attempting to address with their commitment to ensure that "no inequitable shift of burden" takes place, either within London or between London and the rest of the country, as a result of abolition.

10.30 p.m.

The key to achieving this lies in the proposal to extend the existing London equalisation scheme whereby the City of London and the City of Westminster make a contribution to all the other inner London boroughs. The proposal, as I understand it, is to remove the windfall gains from Westminster, the City of London, Camden, and Kensington and Chelsea and to distribute the proceeds to all the other boroughs, outer London as well as inner London. The effect would be at the end of the day that services transferred from the GLC would continue to be funded by London as a whole rather than by the individual boroughs receiving the responsibilities. In other words, this would be a kind of life after death for the GLC precept.

Doubts have been voiced as to the logic of this idea. If boroughs are to take on these services, it has been argued, then surely they should take on the financial responsibility for these services in exactly the same way as they bear the financial responsibility for the services they have now. The taxing of one borough for the benefit of other boroughs breaks the nexus between expenditure decisions and taxation consequences, and therefore weakens accountability, at a time when I would hope your Lordships would agree that accountability should be increased. This issue of accountability and the way it is to be effected by the extension of the London equalisation scheme is an important and controversial issue in itself, but it is not the issue which concerns me here.

The issue which concerns me is that the Secretary of State has given an undertaking, which of course I accept, but that there is unfortunately nothing in the Bill to ensure that the undertaking is fulfilled either by this or, even more importantly, by any future Secretary of State. I must emphasise that there is a conspicuous absence of any provision in the Bill to give authority to the undertaking that the Secretary of State has given. It therefore creates great uncertainty for all boroughs, rich and poor alike. The poorer boroughs could be deprived by an unsympathetic Secretary of State of the resources essential to carry out their new responsibilities. Another Secretary of State might be unable to resist the temptation to soak the ratepayers of the City of London and Westminster for the benefit of other areas. There is no guarantee for any borough.

Even the experts do not seem to know how borough rates will be affected. The London Working Party—a group of officials from the DoE and the London boroughs—has produced a report which attempts to illustrate the effects of abolition on individual London borough rates. Yet paragraph 3 of the report tells us to take no notice of the figures. Probably that is good advice. It says: the new figures appear at first sight to indicate that there might be an overall reduction in average rates in London as a result of abolition quite apart from the effects of any cut in spending levels. This is misleading, and no such conclusion should be drawn". The report goes on to record the view of the London Boroughs Association representatives that the range of variation in rate poundage changes faced by the London boroughs on the basis of the scheme as developed thus far would be "unacceptable". It would seem, therefore, that there is still great uncertainty even in the minds of the expert statisticians and accountants of the DoE and the London boroughs as to the effect on borough rates.

The uncertainty is further illustrated by the remarkable turn-around in the prognostications of the City of Westminster. A year ago they were predicting a saving of £369 million from abolition of the GLC, equal to a rate of about 19p in the pound. Now they say it could actually result in rate increases. The fact is that as yet no one knows what the financial effects would be, and no one knows how to deal with them. There is even uncertainty as to which boroughs will fund the scheme and which will receive.

One appreciates that there are formidable technical problems in the way of ensuring that the Secretary of State's promises and undertakings are carried out. Yet if they are not overcome the financial effects on ratepayers in some parts of London could, as will be clear, be very serious indeed.

There must be added to all these problems which I have outlined the impenetrable complications of the block grant system. I should be the first to concede that all systems relating to equalisation and anything to do with allocation of local authority grants from local government are somewhat complex, to say the least. As I understand it, there was only one official in the Department of the Environment who understood it, and he has left. We have the impenetrable complications of the block grant system and the labyrinthine network of joint financing schemes, inter-borough charging and lead borough cost recoveries so that the end result, inevitably, is likely to be a financial shambles, incomprehensible even to the DoE and the local authorities, let alone to ratepayers, electors or anyone else.

The Bill gives little comfort to the very ratepayers who are supposed to be helped by abolition. They have been told that abolition will not disadvantage them in any way. After the traumas of this Bill that is not an enormous offer and so I hope that the Minister will now spell out just how even this minimum assurance can be made effective in practice.

Lord Elton

The noble Lord is showing all the sparkling form that my right honourable and honourable friends in another place endowed him with in the long training that they gave him in staying up until four in the morning, about which he spoke earlier. I congratulate him on the incisiveness of his appraisal of this part of the Bill, though I cannot say that I entirely share his analysis.

The clause relates to the future arrangements for the London rates equalisation scheme: the scheme made annually by my right honourable friend under Section 66 of the Local Government Act 1963 to reduce disparities in rates levied in different areas of Greater London. The LRES in its present form dates from the introduction of the block grant system in the financial year 1981–82. I am happy to tell the noble Lord that we have since recruited several people who understand the system; otherwise I doubt I should have had the courage to stand here.

To a great extent the more sophisticated arrangements for equalising resources under the new system make it possible to take account of different rateable values in London without a special rate equalisation scheme for London. The exception is for authorities in London which receive no block grant because of unusually high rateable values, principally the City and Westminster. The present LRES is designed simply to ensure that these two boroughs make some contribution towards the costs of providing services in the rest of inner London. This is taken into account in determining the block grant entitlements of inner boroughs through the rateable value discount given to them. The LRES for future years is to be extended to take account of the loss of the GLC precept which currently plays an important role in the equalisation of resources in London. It will ensure that ratepayers in all the high resource boroughs, including Camden and possibly Kensington and Chelsea, do not make windfall gains as a result of abolition. Such gains would be at the expense of ratepayers elsewhere, I swiftly say so that those who are encouraged by the thought rapidly discard any encouragement.

We are already well into consultation with the boroughs. It is clear that they have every expectation of our fulfilling our undertaking and it is essential that the detailed mechanics of these arrangements, complex and changing year by year, should not be fixed once and for all in primary legislation. That is another way of saying that the exact undertaking that the noble Lord should like to see engraved on the face of the Bill cannot be there because the ground to which it refers changes too quickly.

Clause 81 agreed to.

Clause 82 agreed to.

[Amendments Nos. 140ZA and 140 ZB not moved.]

Schedule 14 agreed to.

Clause 83 [Exercise of functions by new authorities in initial period]:

Baroness David moved Amendment No. 140ZC: Page 56, line 25, after ("authority") insert ("other than the Authority established by Part III of this Act")

The noble Baroness said: In moving this amendment I should like to say that the aim is very similar to that of Amendment No. 137BA, which I moved earlier and which is that the new ILEA, the elected authority, should stand on its own feet and be treated as a responsibile elected authority like any other local authority. The purpose of this particular amendment is to remove ILEA from Clause 83; that is, from control by the Secretary of State for the first three years of staffing, provision of services and administration. The Bill proposes in Clause 83 to provide the Secretary of State with power to require the new authority to submit schemes for his approval concerning, first, the number of persons employed; second, arrangements for obtaining services, supplies and facilities; and, third, for the authority's organisation and its arrangements for managing its affairs.

During the debate at Committee stage in another place the Minister reiterated what the Secretary of State for Education and Science had stated in a Written Answer on 5th February: that an administrative structure already existed for ILEA and that ILEA would be facing the prospect of rate limitation under current proposals. However, the Government said that they did not then, and do not at present, propose to make regulations under Clause 80 in respect of the new ILEA.

The Minister then continued to say: However, I must make it quite clear to the Committee, and to people outside that if there are signs that the new ILEA intends to take decisions which will have implications for manpower considerations that are not in accordance with the objectives of economy, efficiency and effectiveness, it might be necessary to seek that regulations are made under the provisions". That was in Hansard on 5th March, 1985.

These arrangements, if implemented, would result in the Secretary of State becoming involved in the detailed administration of the new directly-elected authority; and that must be seen to be intolerable for responsible officers trying to run the new ILEA. The third of the areas listed above (that is, the authority's organisation and its arrangements for managing its affairs) seems capable of wide interpretation; but on the face of it would enable the Secretary of State to intervene in almost any aspect of the authority's work, In light of the decision made last week in this Committee when we agreed to the amendment preventing the abolition or reconstruction of the new ILEA, it is evident that there is strong support for stability to be maintained within the education service. Therefore, such intervention by the Secretary of State as proposed in the Bill would have a contrary effect and would lead to disruption and instability. I beg to move.

The Earl of Gowrie

I have a long, splendid brief, including a paragraph 13 which has the immortal heading: "If pressed on Guardian leak". But I feel that I have not been pressed on the Guardian leak, so I shall cut this out.

It may help the Committee if I describe our intended use of the controls in Clause 83 in relation to each of the new authorities, and how we expect that the obligations which it places on those authorities will work in practice. The clear intention behind these controls was expressed in the White Paper. The Government are determined (and I am quoting) that the creation of the new authority shall not be used as an opportunity to set up extravagent and expensive new organisations. The Secretaries of State will wish to be satisfied that the new authority's administrative structures will result in the economical operation of the services and that, where appropriate, arrangements will be made for the sharing of administrative and other staff and the contracting out of specialist services". The controls in Clause 83, together with the controls over the new authority's precepts in Clause 66, which the Committee has already debated, of course, are the means by which we propose to achieve these aims.

10.45 p.m.

Now the noble Baroness's amendment would exempt the new ILEA from the provisions of Clause 83. I do not think that would be right. As my right honourable friend made clear in another place on 5th February, however, the administrative structure is already in existence in the case of ILEA; nor will ILEA be facing the prospect of rate limitation for the first time as regards 1986–87. In the circumstances, therefore, the Government do not at present propose to make regulations under the clause, Clause 83, in the case of the new ILEA. This, I hope, will help reassure the noble Baroness and the Committee.

It should, I think, though, be clearly understood that, as my right honourable friend also said, if there are indications that decisions taken by ILEA will have implications for manpower that are not in accordance with the objectives of economy, efficiency and effectiveness, regulations under this clause will be made. The content of any such regulations would depend on the circumstances that they were intended to meet. So I do not think the Government are doing anything but giving the new ILEA a chance to operate with the independence and freedom that the noble Baroness seeks, and I hope therefore that she will not insist on excluding the new ILEA from the scope of the transitional controls under this clause.

Baroness David

I think the noble Lord must have reduced his brief very cleverly if it really was a very long one. It does seem maybe that there is a better chance being given to the new ILEA than I had thought. I should not like to commit myself on that until I have had a chance to read what he has said tomorrow in Hansard; but for the present I shall be pleased to say that I will study his reply and reserve my right to come back at the next stage. For the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 83 shall stand part of the Bill?

Baroness Birk

It is very late, but really I cannot let Clause 83 pass without making as brief a comment as I can. I do not intend to oppose the Question but I must make some comment on it, as the noble Baroness, Lady Stedman, who has joined me on this, has had to go.

What the clause does is make provision for the Secretary of State to make schemes, the effect of which would be to allow him to intervene in the affairs of a new authority. This will be in regard to staff numbers, the buying in of external services, and the authority's internal organisation and management arrangements. The power is available for a three-year period from abolition date. The clause will also, in subsection (4), enable unlimited supplementary provisions to be contained in any regulations laid down. The Secretary of State will be able to change his mind and he will be able to vary schemes already approved. He will be able to draw up such transitional arrangements as he thinks necessary to effect an end to the period for which these controls are to be applied under present proposals.

If accepted, this clause will mean a significant transfer of power from local to central Government in respect of those functions to be taken over by the new authorities. In other words, there will be an even further move from the local authorities towards centralisation. This has been commented on not only in the newspapers but also by Government departments and other Ministers as well. I am cutting this down at this stage in order to speed up the time factor.

If this clause is adopted unchanged and the powers are applied the result will be further confusion of accountability. Who ultimately will be responsible for the police civilian dealing with staffing matters? The police come very much into this division of powers. Will it be the Secretary of State or will it be, as it should be, the elected representatives of the community served by that new authority?

When accountabilities are confused, what is it that suffers? It is ultimately the economy, efficiency and effectiveness of the service. I am aware that that is a truncated account of an extremely important clause, but I did not feel that the Committee stage should go by, even at this time of night, without making some comment. I intend to return to it on Report, with amendments.

Lord Harmar-Nicholls

Has the noble Baroness made the situation unnecessarily terrifying? Would such regulations as she envisages be so terrible? Would they not have to come before both Houses? Therefore she is not objecting to the powers given to the Minister; she is objecting to Parliament having the final say on things—and the other place is an elected assembly, and so they would be representative of the people. Is it not, when one recognises that the regulations have to be approved, unnecessarily terrifying for the noble Baroness to put the position as she did?

Baroness Birk

I did not say it was terrifying; it was the noble Lord who said it was terrifying. What I said was that it was very bad. It does not have to go to the councils because if the Secretary of State makes the decision and intervenes, that is where the matter rests. It is the Secretary of State's power against which I am arguing, which removes from the local council—whether it be district or borough—the power to make decisions in its own right. I am sorry that, probably through having condensed by intervention so much, it may not have been as clear as it should have been. But the noble Lord need not fear; I shall return to it.

Clause 83 agreed to.

Clauses 84 and 85 agreed to.

Lord Elton moved Amendment No. 140A:

[Printed 21/5/85; col. 222.]

The noble Lord said: This amendment is one to which I have already spoken. It is intended to replace the present Clause 86 provisions for research and data collection in the metropolitan areas. Its purpose is to strengthen the arrangements whereby London boroughs and metropolitan district councils will be able to undertake research and to collect and have access to information on a consistent London or county-wide basis.

I shall be very brief, but I think the minimum that I must say to your Lordships is that the new clause does go further than the existing provisions in providing a mechanism for the borough and district councils to designate a single council to act as the focal point for research and for the collection, analysis and dissemination of information. This mechanism is similar to that in Clause 47, dealing with arrangements for collective funding of voluntary bodies.

The new clause provides for a simple majority of boroughs and districts to make a scheme, designating a lead council to undertake research and intelligence functions, with expenditure under the scheme subject to the approval of a two-thirds majority. It also provides a mechanism for the apportionment of a designated council's costs.

Thus, the new clause which I have tabled in this amendment retains the essential features of the existing Clause 86 and adds some valuable new ones. Boroughs and districts will be able to use the provisions in this new clause to make arrangements so that they may continue to collect and have access to information on a consistent London or county-wide basis. It will be for them to take a view of the type of information which they consider valuable. It may be that existing computer facilities and data bases will need to be transferred to the residuary bodies while appropriate longer-term arrangements for these services are being worked out.

I am happy to table this amendment. I have already read out in full a letter welcoming its provisions from the London Boroughs Association and I hope that your Lordships will welcome it in the same spirit. I beg to move.

Baroness Birk

I am sorry, but certainly I cannot possibly welcome this new clause. One reason why I am speaking to it now—and I shall do so briefly—is because the Minister brought it in aid when we were discussing the scientific and technological amendments, but it did not seem right at that point to go into the ins and outs of this question because we were in fact discussing those amendments. I think I am right in saying that the Minister did not actually move it or speak to it: he just referred to it in passing. He did not say he was going to speak to it. Exactly the same sort of thing occurred on Clause 47, bringing in the two-thirds majority and so on. I only wish that we could stimulate as much interest in this, to help make it successful in a Division, so that it may receive an "endowment fund", but there are not enough of us present tonight to be able to promote that point.

To be serious, I shall not quote at this stage from the Select Committee proceedings because that matter was gone through fairly thoroughly previously. What I am concerned about is that under this clause the collection of information and the retention of research at the proper county level will be at best ineffective and, at the very least, potentially damaging. This, like Clause 47 in a different context, is relying on district co-operation despite the fact that boroughs and districts have different policies and priorities. I think that that provides an even greater argument against because the districts have very little knowledge or experience of the more sophisticated data and research requirements, for example, of modern highways and all sorts of other functions and services which need to be retained at county level.

As we heard in the debate on the other amendments, the uncertainty over the specialist services is causing expert staff to leave both the GLC and the metropolitan county areas for jobs elsewhere. To rely on this new clause in order to back up the alleged Government support for the other amendments is entirely wrong. Report stage will certainly be the time to move an amendment or amendments on this clause because at the moment this proposal is just not good enough.

Lord Elton

I must say that even at this late hour I am very disappointed in the noble Baroness's reaction to this amendment because it is entirely negative and entirely pessimistic. The noble Baroness should bear with me for a moment, and look at this matter in the light of recent events. This is a scheme which can be made mandatory by the voluntary agreement of a majority of the boroughs; and the majority of the boroughs have already written to us to say that they want to set up the scheme. So why the noble Baroness thinks it will not happen I do not know. The only other disappointment she can have is in believing that the people concerned are incapable of running the scheme when they have it. That seems to me to ignore the scale of operation of the London boroughs as we know them, and the availability of the expertise which we discussed at some length earlier this afternoon to be put into this sort of organisation.

We spent a great deal of time saying how good and valuable it is. We now have a place where it could potentially go. We have an assurance that it will go there. There is not a lot more that the noble Baroness can be given, I am afraid. I shall be interested to see her amendments at Report stage, but I am glad that she is prepared to allow the amendment to go into the Bill in its present form at this stage.

Baroness Birk

I cannot do anything else about that. It is beyond my control. It is not because I want it to go in. But I am absolutely certain that when it was referred to earlier in Committee many Members of the Committee were then concentrating on the other amendments and probably had not read this one very thoroughly. It is not a good enough alternative. To put the specialist services into a residuary body for the time being is one thing; but I think the Minister will find that I shall not be alone in my opposition to putting them into something like this. I shall not repeat myself all over again because I think everyone is getting very tired.

On Question, amendment agreed to.

Clause 86 [Research and collection of information.]:

On Question, Whether Clause 86 shall stand part of the Bill?

Lord Elton

Clause 86 has now been replaced, with however little benefit of the approval of the noble Baroness opposite, by the amendment that we have just accepted. So I ask your Lordships that this clause should not stand part of the Bill.

Clause 86 negatived.

Lord Denham

I think that this is the place to which we hoped to get tonight. I beg to move that the House do now resume.

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

House resumed.