Local Government Bill

HL Deb 04 February 1986 vol 470 cc1013-95

3.10 p.m.

The Minister of State, Department of the Environment (Lord Elton)

My Lords, I beg to move that this Bill be now read a second time.

The first thing I must tell your Lordships about this Bill is that it is designed to ensure the proper conduct of local authorities in three areas of their business. It is not designed to bring about any fundamental change in the established principles of local government at all. It merely restates, in statutory form, standards of conduct in those three areas which, until quite recently, most of us took for granted.

The first of these three areas is the setting of the rate. The rate, as your Lordships well know, is the means by which a local authority raises from its residents money with which to pay for functions that it discharges on their behalf. It will be important to remember from whom the money is taken and on whose behalf it is spent, when we come to the next area touched by the Bill. I shall return to that in a moment, but the area with which we are now concerned is the getting of the money, not the spending of it.

As your Lordships also know, the rates do not provide the whole of the resources that a local authority can spend. A great deal is provided by central government in the form of rate support grant, and the Government also provide rather smaller grants for specific purposes. Other transactions, such as fees and charges, aside, it is the ratepayers who make up the difference between these large amounts of money and what the local authority spends. Given that domestic and non-domestic ratepayers between them provide 28 per cent. of an average authority's expenditure, it is clear, however, that the rate must be decided—or "made", which is the proper term—not later than the start of the financial year. That is necessary for any vestige of good management, and it is also desirable for ratepayers, who want to know exactly what they will have to pay.

That the rate ought to be made in time for the start of the financial year which they will pay for must seem so patently obvious that your Lordships must wonder what has possibly happened to make us want to make it a duty in law that it should be done. To explain that, I must say more about the context of this Bill. As your Lordships well know, the level of total local authority expenditure, and the high level of some local authority rates, have both for some time been of great concern to central government. It is not necessary for me to go into the history of this, or to detail the complicated arrangements of penalties and ratecaps with which we have sought to protect the interests of both the national economy and the local ratepayer. All that it is necessary to know is that some councillors have seen this as an activity of central government that they wish to resist. That decision has been expressed in political terms, justified on political grounds, and acted upon as a political campaign.

Your Lordships will have noticed that I have just referred to councillors for the first time in this speech. Hitherto, I have referred only to authorities. The distinction is important. An authority is that part of local government that persists, without interruption, from one decade to the next for so long as the Constitution remains unchanged. As such it is a politically impartial machine. The councillors, on the other hand, are the ephemeral group that controls that machine between elections, which can change political colour overnight as a result of an election or indeed a by-election.

Some councillors are prepared to use their power over the machinery of local government for political purposes. One way in which a handful of councils last year sought to carry out their own party's campaign against central government's financial controls of local authorities was simply to delay setting a rate. There were in fact 13 of them in all out of a total of 413 local authorities.

We do not believe that any councillors ought to throw the budgetary process of their authority into chaos and its ability to carry out its functions into doubt for any reason, and certainly not merely as a facet of a long and expensive campaign against Westminster's stewardship of the national interest. The victims of such behaviour are not balance sheets and bank accounts. They are the employees of the council itself and the population that it was elected to serve.

Futile though the campaign of the 13 authorities eventually proved, we cannot afford to ignore it. It is for that reason that Part I of the Bill places a duty on every rating authority to make its rate by a certain date. The date for the rate is 1st April, which is the start of their financial year and the obvious date to choose. I should add that it is right to give the district auditor clear guidance about the precise nature of the responsibility of councillors in relation to rate-making and this will serve that purpose also.

There is no rash new departure in this. As your Lordships know, no rating authority can make its own rate until the authorities that precept on it have issued their precepts—and those authorities are already bound by statute to set their precepts by a given date. In Scotland all rating authorities are already bound in law to make their rates by specified dates. We merely intend to remove from English rating authorities their odd, and hitherto entirely unimportant exemption from this common and common-sense requirement.

I referred earlier to the presumed, and expected, political impartiality of a local authority. I also mentioned that local councils have become steadily more political in recent years. It is not my business to deplore that. It is politics that bring most people into public life and politics that sustain every government, including this one, in office. The desire to serve the community at any level is good and the questions of how best to do it and what goals to pursue do very rapidly become political questions. Politics are therefore the motive force both of how society is served and of how it evolves. It is the change, and the prospect of change, of political control of the machinery of government, local or national, that determine both the speed and the direction of progression. Without it our country would first become stagnant and then, no doubt, fall into disorder. Therefore, political argument and political commitment are a necessary part of local government. It is not our purpose to remove them, but it is our purpose to prevent their expression in a way that breaches the specifically British tradition of local government. That tradition rests upon a number of concepts and conventions.

One of the most important concepts is that the political—and indeed the social—rights of a minority are in no way diminished because they are a minority. One of the most important conventions is the impartiality, which I have already mentioned, of the machinery of local government. That concept has hitherto always, I believe, been taken to extend to the resources of that machine, by which I mean the money at its disposal.

A very great deal of that money comes, after all, from the national taxpayer. He has no interest in the triumph of one party or another in any borough or district in the kingdom except his own. But even more important is the balance of that money. That does not come from the national taxpayer (and it is no inconsiderable sum). It comes from the ratepayers, both domestic and commercial, of the borough or the district in question. And in none of them—no matter which party is in power and no matter how big its majority—are all the rate-paying electors supporters of that majority party.

As I said earlier it is important to remember from whom the money is taken and on whose behalf it is spent. Ratepayers cannot refuse their rates simply because they disagree with the policies of the majority party in their council. It must therefore be utterly wrong for the majority party in a council to spend ratepayers' money in any campaign designed to drum up support for its party, and therefore against the minority parties, either locally or nationally. It cannot be right to use the force of law to extract money from any ratepayers and use it to advance the political campaign of a party to which they are opposed. And there is no party to which some ratepayers are not opposed. That must be an abuse, and it is the abuse that Part II of the Bill is designed to put an end to. Your Lordships will, I am certain, question in Committee whether it is drafted to achieve either more or less than that; I know that your Lordships will be well briefed, in part because I have seen a good deal of the briefing which your Lordships are receiving; but I trust that no single voice will be raised against the principle we are seeking to enforce—the principle that no man or woman shall have their money taken from them to pay for party political propaganda.

This was certainly the view taken by the Widdicombe Committee. Your Lordships will know that that committee is still at work on its main report but that it presented an interim report on local authority publicity in August of last year; the recommendations of that committee are the basis on which we have built the provisions of Part II of this Bill.

To achieve our purpose we must identify what is to be prohibited, and we also intend to clarify the definition of what is now permitted. We also believe that the time has come to re-establish well-recognised principles of good practice and proper conduct in this highly sensitive and potentially costly area of local government activity. There is clearly a need to deal with matters of tone and presentation which cannot be adequately embodied in primary legislation but which, nevertheless, are of great importance in local authorities' publicity decisions. A code of practice would set out broad guidelines on the content, style, distribution and cost of local authority publicity.

In many authorities such considerations would already be taken into account as a matter of good administrative practice, indeed as a matter of course. But a code of practice seems the most appropriate way of ensuring that all local authorities have regard to them.

I must emphasise that the code the Government are proposing could not as a matter of law supplement the definition of prohibited publicity in Clause 2. It is not an aid to the interpretation of that clause, and its subject matter may well go much wider than the question of what is party political. An authority would be required to have regard to the code, but it would not be forced to comply with it so long as it was satisfied that its decision was reasonable and not in breach of its fiduciary duty to its ratepayers.

I turn to the second area of our concern. It was, your Lordships will recall, the use of the machinery of local government, and more particularly the cash supplied to it by the ratepayer for party political purposes, that triggered our original concern in this matter. You will not be surprised therefore to find in the Bill a provision for money used for any publicity purposes to be separately accounted for. This will be of assistance in monitoring the observance of this legislation by local authorities. It will also make many of those authorities whom Widdicombe discovered do not even know how much they are spending on publicity more accountable to their electorate and better able to control their own affairs. Given that £20 million or more has recently been spent on controversial publicity campaigns, a requirement that authorities should have a separate entry in their accounts for publicity seems the very least that one could ask.

The third area in which we think it necessary to ask your Lordships to legislate to protect the standards of conduct of local authorities is that concerned with mortgage finance. I have already described to those of your Lordships who were not familiar with them (and I suspect that they were few), the outlines of the major differences between central government and some local authority councils. The controversy was almost entirely about finance and central government's right to set the limits on what was accceptable for local authorities to do. A handful of local authorities resorted to a range of stratagems to avoid this control or to defer its impact. Much of it was done in a blaze of publicity. Some of it will I regret become public again when pledges entered into it in haste fall due to be redeemed; the councillors who caused the pledges to be made will in many cases, I may add, not then be there. It will be their electors who have to redeem them. The transactions we are concerned with, however, attracted less publicity; but seem nonetheless to expose the public to risk. I refer to the sale of mortgages without the borrowers' consent and without a full transfer of the financial risk.

Your Lordships will know that a great many councils provide mortgages for property in their areas. The buyers of the property are bound to make regular payments of interest and repayments of capital. The mortgages are therefore a form of security, and Liverpool in particular during the height of its self-induced financial crisis sold £30 million of its mortgages to a consortium led by a French bank as a quick way of getting cash to meet its commitments.

It did so without consulting the borrowers. We believe that the borrowers entered into the mortgages specifically with their local authority in the belief that they could depend upon it for reasonable conduct. They had no say in the change of mortgagee and there is no certainty that they yet know who their new mortgagee is. That seems to us a thoughtless and unfeeling way for a local authority to treat those who are, in a very real sense, dependent on it. We intend that in future no local authority shall sell any of its mortgages without both the knowledge and the written consent of each of the borrowers concerned.

I have now set out the main purposes of this Bill and the reaons why we think it necessary to ask your Lordships for the provisions which it contains. I have set them out in the order in which they are met in the Bill and I shall therefore be brief in the traditional capitulation of its clauses. They are as follows. Part I consists of a single clause which requires all rating authorities to make their rate by the beginning of each financial year—that is to say, 1st April.

Part II consists of four clauses. Of these, Clause 2 prohibits any local authority from publishing or causing or paying any other person to publish, material either designed to or likely to affect support for a political party. Clause 3 as a corollary tightens up the existing definitions of a local authority's powers and functions with regard to the handling of information.

Clause 4 provides for the Secretary of State, after the consultations required by Clause 4(5), to issue a code or codes of practice for the guidance of local authorities in dealing with publicity. Under Clause 4(4) a code so issued will not come into effect without the approval of another place. I should say here that we shall be bringing in an amendment to bring this House in on the act, so to speak. Your Lordships will notice that authorities will under Clause 4(6) have to have regard to such a code but it will not, as I have already explained, have statutory force of itself, nor can it be taken with Clause 2 to enhance the definitions therein. Clause 5 requires local authorities to keep separate accounts of their expenditure on publicity and, I should add, to give access to those accounts to the public. Clause 6 is the interpretation clause for this part of the Bill.

Part III of the Bill provides, in two clauses and a definitions clause, for the new requirements relating to mortgages. Clause 7(1) provides that a local authority must have the written consent of any of its borrowers before it transfers his or her mortgage to another mortgagee. Under Clause 7(5) the Secretary of State may make regulations saying what information must be given to a borrower before he gives his consent and in what form his consent shall be given.

Clause 8 sets out the circumstances in which a transaction of this sort does not give rise to capital receipts to the disposing authority. The definitions for Part III of the Bill are in Clause 9.

There remains only one item to which I have not so far referred. Clause 10 in Part IV of the Bill makes good our unfortunate failure, for which I apologise, to provide in last year's rather bigger Local Government Act for those giving their services to authorities set up by that Act to be able to claim attendance allowances. Your Lordships will sympathise with them.

The eleventh and final clause is the usual one dealing with the commencement and the Short Title of the Bill. There are, I am very happy to say, no schedules to the Bill. This is a short and useful piece of legislation and I look forward to hearing your Lordships' preliminary view of it this afternoon and to many interesting hours in Committee thereafter. I beg to move.

Moved, That the Bill be now read a second time.—(Lord Elton.)

3.31 p.m.

Baroness David

My Lords, we are grateful to the Minister for his explanation of the Bill. But there our gratitude ends. We do not like the Bill, nor do the Association of County Councils, the Association of Metropolitan Authorities, the Association of District Councils, the Council of Scottish Local Authorities or the National Association of Local Councils, representing over 11,000 parishes and town councils. Rarely can there have been such unanimity in opposition to a piece of government legislation. It is not surprising. This is the twelfth local government Bill that this Government have introduced since 1979, not to mention four housing Bills. Each has in some way taken away from the powers and freedom of local authorities to do as they think best for the people they serve. These Bills have generally been too hastily prepared and presented, with, as a result, poor drafting, as is all too evident in this Bill.

Here we have a Bill which, if enacted, will mean totally different standards for local and central government. The major part of the Bill, Part II, is supposed to be based on the interim report of the Widdicombe inquiry. I hope to show, in discussing the clauses in some detail, that it goes far beyond it. I wish to make first a comment on Clause 1. We have no objection to a rate having to be made by 1st April but we hope that the Government will give some commitment to produce the necessary information on which a local authority's budget must be fixed by November of the previous year, so that there can be adequate time for proper planning and discussion. Can the Minister give that assurance?

I turn now to the controversial Part II. The Bill addresses five issues raised by Widdicombe. In four of these five the Government have ignored or gone well beyond the inquiry's findings; and in the fifth they have, by sloppy drafting, created an administrative nightmare. The first issue arises in Clause 2. This clause prohibits political publicity by local authorities and includes publicity issued under all or any power of local authorities. The Widdicombe inquiry was very aware of the advantages of local authority publicity. The chapter in the interim report on conclusions was prefaced thus: Local Government has an important and well-established voice on matters affecting its responsibilities. It is important at all times, but perhaps particularly in times of wide political differences, that our political system should accommodate the free expression of opposing views, and we have said that it is right for local authorities to be able to explain their views on controversial matters affecting them". That appears in paragraph 221.

The committee's recommendation was that, there should be an express statutory prohibition of local authority publicity of a party political nature"— that is, for a statutory declaration of the existing state of law. Widdicombe's argument was that this would highlight the current legal position and lend it greater force". This recommendation was made in the light of the fact that, the existing law already provides considerable limitations on advertising and information. Moreover, there is evidence that the process of cases coming before the Courts may result in the law becoming better understood". That was paragraph 171.

A particular recent development has been the stricter interpretation put upon Section 142 of the Local Government Act 1972 in two recent cases brought by Westminster City Council against ILEA and the GLC. These cases established that Section 142 cannot be used for publication of purely persuasive material although lawful information can have a persuasive effect. These decisions date from December 1984 and January 1985. Following them, many of the examples of allegedly political publicity mentioned by Conservative Members and government spokesmen would not be lawful under existing law. The Government view is, and always has been, that there is widespread abuse by local authorities, the underlying assumption being that the Government's local government policies are unpopular only because people have been duped by party political advertising.

A whole range of statements from the Government before the publication of the Bill have made it clear that they considered that the existing framework of law inadequately restrained political publicity. Yet at Second Reading in the House of Commons the Secretary of State said: The Widdicombe inquiry recognised that it was implicit in the present law that local authorities should not spend public money on party political matters, but it recommended that that implicit prohibition should be given statutory effect. The Government agree with that view"—[Official Report, Commons, 18/11/85; col. 42.] I believe that the Minister made a similar claim at the beginning of his speech today. This looks like an attempt to disguise the fact that the Government, far from agreeing with the inquiry's conclusions, are—the Bill makes this clear—going far beyond them and introducing new and far more stringent controls.

The Government have made an improvement to the Bill by proposing an amendment on Report in the Commons which deleted reference to a, body, cause or campaign identified with, or likely to be regarded as identified with, a political party". However, there is no change to the heart of the clause or of the Bill in Clause 2(1) itself. The crucial phrase is the one banning material which, can reasonably be regarded as likely to affect public support for a political party". This inflicts a test of such severity that it goes well beyond a statutory declaration of existing law. It provides that if a reasonable person could think that the publicity might be likely to affect public support for a political party, it is banned even if the balance of opinion of reasonable persons went the other way. This test will almost certainly prevent local authorities from issuing publicity about proposed government legislation provided that the legislation has been the subject of political disagreement between any two parties in the land. This kind of publicity was explicitly defended in the Widdicombe report as a proper use of public money. It almost looks as if the Government's motive in introducing the clause in this form was to reduce the danger of the public being fully informed.

However, the effects of the clause go well beyond even that. If, for instance, a council puts out information on proposed changes in the housing benefits system it is highly likely to affect the public support of those who rely on the system. It would thus be subject to prohibition not because it was inaccurate or untruthful, not because it was persuasive rather than informative, but purely because accurate and truthful information on this subject could be regarded as likely to affect support for the party in power.

Clause 2 would even make it difficult for councils to implement legitimate policies. A cheap fares policy needs publicity to ensure its success as a policy. It will not result in fewer cars on the roads and more passengers on public transport unless it is widely publicised. However, if the policy is opposed by the opposition on the council, or by any other political party, that publicity could also be regarded as likely to affect public support for the controlling group and therefore be open to challenge.

Clause 2 goes further still. The prohibition applies to material affecting support for any particular party. A local authority which publicised anti-racist material could find itself taken to court by the National Front. Material that would promote race relations could be reasonably regarded as likely to affect support for racist political parties. Widdicombe warned against new controls on the detailed discharge of local authority functions unless the case was a clear and strong one. That appears in paragraph 177.

The inquiry clearly thought that there was not a clear and strong case for new restrictions. The Government have ignored that conclusion. This major objection to the Bill would be removed if the words, or can reasonably be regarded as likely to affect were removed. This would leave the text as, appears to be designed to affect public support for a political party". This would be a declaration of the existing state of the law with which Widdicombe and the Labour Party are perfectly content.

The second issue is in Clause 3. Subsection (1) of Clause 3 narrows the scope of Section 142. At present this section allows authorities to publicise "matters relating to local government". The Bill would narrow this to, information relating to the functions of the authority". Section 142 was introduced into the 1972 Act—a Tory Act—partly to consolidate previous powers but also to give local authorities wider and more general powers than hitherto, in recognition of the fact that the role of local government goes wider than a mere agency for the provision of services. At that time it was widely felt that local government should be enabled to fulfil a role as the voice of its community.

This was a view that the Widdicombe Committee accepted. Local democracy (I quote from paragraph 134), goes further than the simple delivery of specific statutory services". Widdicombe concluded: We propose that Section 142 should be left unchanged. It provides an acceptable and long established definition of the proper scope of local government publicity powers". The Government have chosen to ignore this recommendation and the reasons for it.

Campaigns and other forms of publicity, even the putting out of press releases against government policy on important issues of great concern to particular local authorities and to the welfare of their inhabitants, would be prevented by Clause 3(1). An example is Dover District Council's recent decision to campaign against the proposed fixed-link Channel crossing. Such a campaign would clearly not be information directly relating to the functions of the authority even if it escaped the prohibition of political publicity under Clause 2. Yet it is of vital interest to the area of the local authority and its inhabitants.

At present many local authorities use Section 142 to give grants to voluntary organisations for information or publicity purposes. Any restriction on local authorities' own use of this power would similarly limit voluntary organisations. Apart from the fact that a serious loss of funds can be expected the clause would create an administrative nightmare for voluntary organisations, who would have to ensure that a local authority which they were approaching had appropriate powers to "justify" a grant for publicity purposes under Section 142 and ensure that funds from one tier were not used on an activity "justified" by a function of another.

Clause 3(1) should be deleted in toto to bring the Bill into line with the Widdicombe inquiry's recommendation.

The third issue is Clause 3(2). As part of its proposals for tidying up the legal powers under which councils can issue publicity the committee recommended that Section 137 should be amended to prevent authorities using it to finance publicity expenditure. This is an area of uncertainty in the existing law. As part of his recommendation Widdicombe said that, The exclusion of Section 137 … would need to be framed so as to prohibit not only publicity issued directly by a local authority but also publicity issued on its behalf by a proxy body funded under that section". The report goes on to make an explicit warning that, any such change should not prevent the funding under Section 137 of voluntary bodies who issue publicity for their own aims and objectives". That is paragraph 190.

Clause 3(2) as presently drafted falls into that trap. It bans all expenditure on publicity under Section 137 except by way of a grant to a voluntary organisation where the publicity is incidental to the main purpose of the grant. It will be impossible for a council to give a grant to any voluntary organisation if publicity is the main purpose of the grant.

Voluntary organisations are not just passive service-delivery agencies. They promote the interests of their clients in many ways, and this often includes giving out information and running campaigns. This clause would severely restrict the ability of many voluntary organisations to do their job. Local authorities would not be able to fund an anti-drugs campaign, for instance, or the publication of information on social security charges. Many voluntary organisations exist specifically to disseminate information. If Clause 3(1) were removed, as suggested above, Clause 3(2) would be largely unobjectionable.

The fourth issue is Clause 4, which should never have been introduced. The Widdicombe Committee was worried about some aspects of what it termed tone and presentation of local authority publicity. But it expressed a strong preference for a self-regulatory structure. Clause 4 rejects self-regulation in favour of regulation by the Secretary of State.

The report discusses the usefulness of a code of practice. I quote from paragraph 211: While it might be possible to develop such a code over time we do not think this would be a simple task". The report goes on to illustrate the difficulties and dismisses the central government conventions as a basis for a code of practice. Clearly a code of practice was not seen by Widdicombe as the answer.

In Clause 4 the Government have ignored both Widdicombe's strong preference for self-regulation and the Committee's reservations about codes of practice. Even more significantly, Widdicombe decided that more work was needed on this subject. The Committee announced its intention to consider this particular aspect further with the local authority associations". The Government have ignored this clear and explicit statement. In doing so they have clearly acted to preempt and prejudice the main report.

During Committee stage the Government circulated an outline of a draft code of practice. This demonstrates the level of detail that the Secretary of State intends to go into in these codes. Of particular concern is the first paragraph, which draws a distinction between paid publicity—advertising, exhibitions—and unpaid publicity, both of which would be covered by the Bill. The category of unpaid publicity includes, council and committee reports, consultation documents, press releases, press conference statements, media interviews, etc". Apart from the fact that this paragraph constitutes an illegitimate use of power by the Secretary of State it shows how far the Government are prepared to stifle debate. The last item presumably means that a local politician cannot make statements about the views of the council if they could, reasonably be regarded as likely to affect support for a political party". The Government's action in introducing this clause appears to have achieved the objective of precluding the Widdicombe Committee's further deliberations. The secretary to the committee has recently written to the local authority associations to say that in view of the provisions of the Bill they did not now intend to return to examining the possibilities of self-regulation in the context of their study of the general framework of regulation of local authorities' activities for their main report.

The fifth issue is Clause 5. Separate accounting is not of itself objectionable. It is the only part of the Bill which follows Widdicombe reasonably faithfully. However, "publicity" is defined so broadly in the Bill that the clause could prove unworkable. "Publicity", according to Clause 6(3) of the Bill, means, any communication, in whatever form, addressed to the public at large or to a section of the public". As with much else in the Bill, it is unclear exactly how wide this definition goes.

It is clear, however, that it includes very much more than the kind of paid advertising that Widdicombe and, ostensibly, the Government are worried about. It would apply not only to all the uncontroversial forms of publicity, such as statutory notices and job advertisements, but also a whole range of other communication. If, for instance, a housing manager writes a letter to a certain number of council tenants—how many is an open question; how do a number of individuals become a section of the public?—the costs of that communication will have to be accounted for. The costs of posting the letter would need accounting for, as would a proportion of the manager's salary, typist's salary, office and accommodation costs, etc. There could be complications too for local education authorities in their communications with parents.

This clause makes the Bill a godsend for accountants as well as for lawyers. The clause in itself is unobjectionable but the definition of publicity in Clause 6(3), which makes Clause 5 unworkable, should be restricted at least so as to apply only to paid publicity.

I must say again, in summing up, that this Bill is a direct attack on local authorities' freedoms. It comes close to censorship. The real problem that the Government ought to be considering is how best local government can be organised to provide the services it is its duty to provide, services which affect the lives of everyone, every hour of the day, at a time when so many new methods of management, etc. are available. The debate on science and technology in local government last week highlighted that.

As it is, with this piecemeal and steady biting at their powers, local councils and their councillors are demoralised. It is significant how many excellent officers are volunteering for early retirement. If councils are to become mere agents for carrying out government policies, good and dedicated councillors will not be willing to stand for election. Central government must decide whether they will trust local government and give it a proper democratic role to perform, or whether they will go further down the road to central control with mere agencies around the country to deliver and monitor the services.

The noble and learned Lord the Lord Chancellor in his book The Dilemma of Democracy distinguishes between two theories about the nature of democracy and the nature and function of government: the theory of centralised democracy, called by him elective dictatorship, and the theory of limited government or freedom under the law. The noble and learned Lord himself preferred the second. However, this Government appear to have scorned his advice and gone all out for elective dictatorship. We on this side of the House are for freedom under the law.

3.51 p.m.

Lord Kilmarnock

My Lords, the most substantial and controversial part of this Bill is undoubtedly contained in Part II; but before getting to grips with it I should like to make some brief comments and ask one or two questions on Parts I, III and IV. As regards the obligation to set a rate by 1st April, we do not oppose that; but, as the noble Lord referred to the existing obligation on precepting authorities to meet a deadline, can he say whether they too will be covered by Clause 1(3) and, if not, should they not be so covered?

Part III, on the sale of local authority mortgages, appears to be merely a device to limit the means by which an authority can raise immediate cash. Why therefore introduce this cumbersome system of consulting all the mortgagors concerned? Their interests are not affected either way—indeed a French bank might be a better mortgagee than the City of Liverpool—and they are simply being used to discourage local authorities from raising cash by this means. That being so, would not some more direct prohibition have the merit of honestly revealing the Government's intention? We would have opposed it because we are against the restrictions on capital spending from local authority sales. But to do it in this way seems tortuous and less than frank as to the Government's real intentions.

As regards Part IV, I am glad to say that we are able to welcome the correction of the omission from the big brother of this Bill, so that councillors attending meetings of successor bodies, such as joint boards and the reconstituted ILEA, may now claim allowances for their duties. This is obviously necessary and right. However, I think I heard the noble Lord suggest that we would be sympathetic to this because of our own allowances. Perhaps he would correct this, because your Lordships have no allowances, only expenses, and it would be unfortunate to give the wrong impression.

I now turn to the meat of the Bill which is contained in Part II. I believe that it is very widely accepted that there have been grave and some would say gross abuses of local authority powers. Islington has provided some of the most glaring instances. Can it be right blatantly to publish a political free community newspaper which then goes bankrupt to the tune of £100,000? Despite this experience, I understand that a monthly successor is being planned in the run-up to the borough elections. Of course there are other well known sinners. We are talking of perhaps 20 to 30 authorities in all.

We on these Benches want to set local government free to ensure that it has greater freedom from central interference. However, frankly, this aspiration has not been helped by Islington, Greenwich, Liverpool or Leeds. Therefore reluctantly we have to agree with Mr. Widdicombe's Committee that: some of what has been done by certain local authorities goes beyond what should properly be done out of public funds", and with its general conclusion that: there is a problem that needs to be dealt with". Our preferred remedy for these excesses is, as the House by now knows and as we shall not desist from reiterating, the introduction of a system of proportional representation for local government elections, so that the likelihood of any single and unscrupulous party, whether of the Left or Right, gaining control of the local government machine and manipulating it for extraneous purposes would be much diminished; and agreement to publicise one or another party's national political views at ratepayers' expense would not be easily obtained.

As the House will recall, my noble friend Lord Harris of Greenwich, introduced a Bill to this effect; and a similar Bill, which was promoted from the Conservative Benches by the noble Lord, Lord Blake, went through all its stages in your Lordships' House without amendment. That is something which the Government should have taken up themselves and ensured a safe passsage for in another place. They did not see fit to do so and I believe that they will live to regret it.

Therefore, we have the present Bill before us. The Alliance supported the Second Reading in another place in the hope of improving the Bill during its passage so as to make it less restrictive where this was not necessary and to reduce the "overkill" of which they were accused by one Conservative Member at the Report stage on 22nd January. ("Overkill" was his word, my Lords.) It was also our aim there, as it will be here, to mitigate unintended side effects, if unintended they are. There are serious difficulties of interpretation of the main Clause 2(1). As the National Union of Journalists asks: Does it mean for example that no authority can publicise environmental improvements for fear that this might be regarded as likely to affect support for the Ecology Party?". Will publicity produced by the community relations councils be banned on the grounds that it would be likely to affect support for the National Front?

When we come to Clause 3, which reduces the present permission to publish information on: matters relating to local government to the much more restrictive: information relating to the functions of the authority", how would this affect Dover Borough Council's objections to the Channel Tunnel scheme, which was mentioned by the noble Baroness, Lady David? Would they not become illegal if this Bill is enacted as it stands?

There is another area of concern relating to the quite usual and proper circulars issued, for example, by parish councils to rally local opinion against some move such as the closure of a railway station, a bus route or a sub-post office. Would that be held to be overtly political on the ground that the proposed closure stemmed from the policies of the party in power nationally?

As has already been mentioned, these uncertainties extend to voluntary bodies whose dismay and alarm will I am sure be ably expounded by the noble Lord, Lord Hayter, when he speaks, so I shall not dwell on their problems at this stage. However, they are already considerable as a result of the abolition Bill and are likely to be made much greater by the Bill now before us, even as amended. I believe that everyone will agree with the need to eliminate bogus or front organisations set up to engage in party political activities at the expense of the ratepayer. Yet the original Bill would have caused great difficulties for legitimate voluntary bodies which have traditionally relied for some of their financial support on grants from local government.

After discussion with the NCVO and others, the Government agreed to change the wording of Clause 2(1)(b) and then eliminated it altogether. However, I understand that there is still continuing and growing concern over the effects of Clause 2(3) which brings within the full scope of Clause 2 any voluntary body funded in any way by a local authority.

As the clause is currently written, it would appear that a charity concerned with, for example, homelessness, receiving a local authority grant would be unable to stimulate public concern over a problem which we all know is widespread in London on the grounds that it would be "likely to affect public support" for the party in government, whose policies might well be seen as conducive to homelessness. There must be many other instances. I have just received a letter from the Royal National Institute for the Blind from which I should like to quote. It expresses its concern as follows: For example: if a disability organisation published material about disabled people and put a case for improved benefits, such as an allowance for blind people, and if a political party accepted this case and included it in its election platform, then it is hard to see how the material could escape being liable to be regarded as having to do with affecting political support for that party. But that would not have been the intention and it would not be reasonable for such material, published in pursuit of the organisation's non-party political objectives, to fall foul of the law against local authority funding for party propaganda. That is the view of the organisation for the blind and I think that attention should be paid to it.

The Government have said that they seek to legislate on the basis of the Widdicombe Report. However, in some respects they go well beyond Widdicombe and even directly contrary to Widdicombe. In his interim report—for that is what it is; the main report is still to come—Widdicombe recommended that Section 137 of the Local Government Act 1972 should expressly exclude advertising of any nature whatsoever. But it went on to say that this should not prevent bodies receiving grants under Section 137 from issuing publicity for their own aims and objectives, so long as they were not acting as proxies for the local authority in unauthorised advertising.

Widdicombe also proposed that Section 142 of the Act should be left unchanged. Now that is not the effect of the Bill. It is thus hardly surprising that the local authority associations, all of them regardless of political hue, are extremely worried. They agree with Widdicombe's paragraph 244(a): that there should be an express statutory prohibition of local authority publicity of a party political nature". They do not dispute this, but they believe that as at present drafted the Bill not only fetters the legitimate information process but is so confusing as to be inoperable and will give rise to a spate of expensive and time-consuming litigation.

I do not want to stray too far into Committee stage territory but it seems to me that this Bill will attract a lot of amendments and I would therefore like to signal our main areas of concern and to indicate where we shall be seeking clarification and improvement. Clause 2 is clearly the nub of this part of the Bill. The Society of Local Authority Chief Executives, on 16th January, sent to Mr. Waldegrave an alternative version which seems to us to have some considerable merits. I shall not go into the arguments advanced that the main test should be the material itself rather than the "intention" or "effect", but an amendment on these lines, if not in the same words, would certainly not be wrecking, beginning, as it does: a local authority shall not publish any material that is of a party political nature". I shall reserve the rest of our thoughts on that until a later stage of the Bill.

Next, on Clause 3 we shall want to pursue the question of the narrowing of Section 142 merely to "functions", against Widdicombe's advice. At col. 378 on 22nd January in another place Mrs. Rumbold said: we would not wish to impose unreasonable restrictions on a local authority's information process. There is a case for considering the scope of Section 142 to see whether something should be done to accommodate the fears expressed…". I should like to ask the noble Lord, Lord Elton, this afternoon whether the Government have had any further thoughts in that direction? Also Mr. Waldegrave, at col. 384 on the same day, acknowledged the legitimacy of the worries expressed about what parish councils can do or say in relation to the services of other local authorities. He spoke of the possibility of an amendment in this House, and I wonder whether the noble Lord, Lord Elton, can tell us of the progress of Government thinking on that too.

We are also concerned about the likelihood of a clash between the Bill before us and the Local Government (Access to Information) Act 1985, introduced, I believe, by the Conservative Member, Mr. Squire. What is to happen to the minutes of local authority meetings if they incorporate expressions of dissatisfaction with the government of the day on, say, the rate support grant or rate-capping? Will they simply be blue pencilled out by a censor, or left as asterisks, before the record of the meeting can become public? We would welcome Lord Elton's thoughts on this.

I come finally to Clause 4, which contains the provision for a code, or codes, of practice. The draft placed in the Library goes to ludicrous lengths which would embrace press releases (as the noble Baroness has already mentioned), recruitment publicity and unpaid publicity of various kinds such as council and committee reports, which might well, as I have just suggested, bring it into conflict with the access to information Act.

I had assumed that this was merely a draft. I do not know whether I heard rightly the noble Lord, Lord Elton, say that the Government are preparing to introduce this code. I should be interested to know whether the Government are committed to this version. In fact, it is all quite unnecessary. If the Bill is properly drafted, Its broad principles, as interpreted by the courts, are sufficient to achieve its objectives. There is adequate self-regulation through the IPR code, the legal advice given by local authority lawyers, and the heavy penalty of personal surcharge for unlawful expenditure by councillors.

It is ironic, is it not?, that Ministers are currently piloting a Financial Services Bill through the Commons which chooses self-regulation to check flagrant abuses in the City and at Lloyd's, yet for democratically-elected local councils they propose detailed rules which are likely to stop most types of information coming out of town halls and county halls, whether Conservative, Labour or Alliance controlled.

By dropping Clause 4 altogether the Government would be bringing the Bill more closely into line with the Widdicombe interim report which rejected conventions or guidelines in favour of a clear statement of the law. If there were to be a code, it would be much better as a self-regulatory one concerned with tone and presentation which could act as an extension of the statute rather than a rigid part of it.

There is of course a matter of direct concern to your Lordships' House here which has already been mentioned. As a result of a concession forced on the Government in Committee in another place which appears now in Clause 4(4), any code has to be approved by a resolution of the House of Commons. There is no reason I can think of why this should not be extended to include this House as well; and, given the expertise revealed in Lord Campbell of Alloway's recent debate on codes of practice—and I am glad to see that he is going to speak this afternoon—there seems to be every reason why the House of Lords should be included. Mr. Waldegrave seemed to concede this in the other place, at cols. 387 and 388 on 22nd January, and I think I heard the noble Lord, Lord Elton, confirm it. If this is so, it is only right and proper.

In this House we do not vote against Second Readings or Third Readings, but there are no inhibitions or conventions which restrict our revising role other than the understanding that we do not wreck a Bill passed by the Commons. We have no intention of doing this or attempting to do this, but if a large majority of authorities and some of their voluntary clients are to be made to suffer for the ill-judged activities of a few, it is more than ever necessary that we should exercise our vigilance and ensure that the Bill achieves its main purpose without a disastrous fall-out over perfectly legitimate and respectable areas of information. The Bill does not meet this criterion at present. We shall do all in our power to see that it will do so.

Lord Ardwick

My Lords, before the noble Lord sits down, would he mind telling us what the IPR code is?

Lord Kilmarnock

My Lords, it is the code of the Institute of Public Relations.

4.7 p.m.

The Lord Bishop of Gloucester

My Lords, in the shire counties, and therefore in the shire dioceses as well, there are still some people waiting to be converted to the doctrine that the politicisation of local government is a good thing in itself. Be that as it may, it must surely be for the general good of society that the public funds administered by local authorities should be seen to be devoted to the provision of services which will benefit the community and not to foster party political ends. In broad principle, therefore, I speak as one who warmly welcomes the Bill.

However, it seems clear that as drafted, perhaps inadvertently, it may have unhappy consequences for a number of voluntary organisations which work closely with local authorities; and the churches are not infrequently involved in these organisations. Therefore, in putting down markers for subsequent discussion in Committee, I beg leave to join the growing chorus of those who are concerned about the drafting of Clauses 2 and 3.

I shall give one or two examples. The City of Gloucester has, to many people, a surprisingly high proportion of citizens who are ethnically of West Indian or Asian origin. I understand that it is as high a proportion as obtains in the West Midlands region itself. In consequence, we have a vigilant and active community relations council, partly funded by the local authority. Part of the work of this body is certainly to counter the racist propaganda which is occasionally disseminated within the city, and so to preserve the thankfully peaceful relationships which generally prevail.

To take a hypothetical case, the community relations council might wish to give support to an individual family seemingly unfairly penalised by the decisions of immigration officials. Such an incident could easily become the subject of correspondence in the local press, and the community relations council might wish to take part. Would it not be only too easy to argue that in both these instances the CRC's actions were likely to affect public support for (shall we say?) the National Front, as has been already observed by the noble Baroness, Lady David? Therefore, the CRC would be deprived of local authority assistance under Clause 2.

Let us take another example. Care for the particular needs of deaf people in the county of Gloucester is largely in the hands of an association founded many years ago by the church and still used by the county social services as an agent for this work. A generous subvention from the county council helps substantially to pay the full-time social worker who heads this association. From time to time to discharge its responsibility to care for the interests of the deaf, this association may need to be publicly critical of decisions made by the local authority itself, whichever political party is in power at the time.

We have a church-based youth officer in the county in a similar position. Should we not also be concerned about the position of such organisations as MIND and the Association of Mental Health, of whose county branch I am president?

In none of the areas I have mentioned is there likely to be any intention to enter the party political debate directly or indirectly. That would be quite improper and rightly prohibited by law, but who could deny that the unintended side effect of the work of these voluntary bodies might be persuasively portrayed by ingenious people to be political? Understandably the Society of Local Authority Chief Executives has voiced its fears that the Bill as drafted will result in far too much litigation.

It is surely one of the most valuable features of our way of ordering affairs in this country that there exists around the statutory organs of government, both national and local, a penumbra of voluntary bodies working quite clearly in close collaboration with government departments, pursuing largely the same aims, yet at liberty to diverge from, and at times be critical of, particular policies and politicians. Some of these bodies are grant aided by local authorities and some could not function without such aid. The danger that seems to be exposed by this Bill is that this valuable and productive hinterland of government, where the statutory and voluntary realms overlap, might be eroded away through the compulsory withdrawal of public money from voluntary organisations under either Clause 2 or Clause 3.

That surely can scarcely be the Government's intention. Let us hope not. Therefore, let us hope positively that, by redrafting Part II, the Bill can be reformed to make it far more widely acceptable and its main purpose achieved.

4.13 p.m.

Lord Boyd-Carpenter

My Lords, before I seek to trouble your Lordships with one or two arguments on the general policies of the Bill, I wanted to ask my noble friend to answer, not now perhaps but when he winds up, three specific questions about it. I am happy to tell your Lordships that those questions have become two because my noble friend indicated that he was proposing to amend the insult to this House which at the moment stands in Clause 4(4). It would be wholly wrong to entrust the approval of these important codes of practice only to another place. I was glad to hear my noble friend acknowledge that. If he had not indicated that he was proposing to put down an amendment, I should have done so. Even now we may have to race to the Committee office.

However, I want to ask him two questions which I hope he will answer at the end of the debate. The first concerns Clause 1. What is the sanction if a local authority, contrary to Clause 1, does not make a rate by 1st April? From subsection (3) it looks as if it is contemplated that this might happen. Is there a sanction on the local authority, and therefore on its ratepayers, or is there, as I hope there is, a sanction on the individual councillors who seek to defy the law?

The other question relates to a matter which was discussed considerably on its merits earlier in this debate. I am asking for an interpretation. What in Clause 2(3) is the precise meaning of "person"? I understand the meaning of "person" as an individual and I understand a legal "person", an incorporated body. But does "person" also cover—this is material here—unincorporated private associations of people? If it is so intended the provision is rather curiously framed and, if it is not so intended, it is obviously inadequate.

Having said that I should like to consider the general issues. I feel a regret, I think shared by all your Lordships, that it has been necessary to introduce this Bill at all. But there I differ from the noble Baroness, Lady David, because it seems to me that it is quite inevitable that such a Bill should be introduced and that any Government which failed to tackle this problem would be failing in their duty. With respect to the noble Baroness, it is not a case of restricting the freedom of local authorities because the truth of the matter is that this activity by local authorities of using public funds for party political purposes is a comparatively new growth. It is an abuse. And where power is abused, as all history tells us, sooner or later the power has to be removed.

Your Lordships who follow the history of local government in this country will know that it is only in the past few years that the policy of using public funds to support parties and party politics has grown up. It has grown up coincidentally in point of time, but perhaps not coincidentally in point of causation, with the development of the militant movement in the party opposite. It is in local authorities such as Liverpool, Lambeth, the GLC, Southwark and others where a Militant is in control, and the type of Labour councillor whom one has always greatly respected has been ousted, that these abuses have taken place. I think it is largely if not wholly due to the growth of Militant and its policies that the action has been taken of using public funds for party purposes which this Bill has to deal with.

I am sure it was due to inadvertence or a wish not unduly to trouble your Lordships that the noble Baroness, in the course of her speech and during her reference to various activities which might be inhibited by the Bill, did not, as I understood her, answer "aye" or "no" the basic question: is she, is her party, in favour of allowing local authorities to spend public money on party politics? If the noble Baroness would like to answer, I am glad.

Baroness David

My Lords, if the noble Lord reads my speech in Hansard tomorrow he will find that I said that we supported what Widdicombe wanted and that the Labour party does not approve of ratepayers' money being used for party political purposes.

Lord Boyd-Carpenter

My Lords, I am very much obliged to the noble Baroness. Of course, I shall read her speech. I shall do so with enormous pleasure from a literary point of view if from no other. But I did not understand her to give that clear assurance. However, that is a Second Reading point. With great respect, most of the other things to which she referred are Committee points.

They arise on the question, which I know your Lordships will want to discuss very closely and carefully, whether the actual framing and drafting of the Bill will go further than your Lordships would think desirable, or whether they merely go far enough to deal with the major objective. However, the major objective is that it is shocking to use either ratepayers' money—or, of course, when we are dealing with local authorities it is even more taxpayers' money, as the rate support grant very often comes to more than 50 per cent. of a local authority's expenditure—to use that money to promote the interests of a political party.

Equally, your Lordships know and the noble Baroness knows that this is being done at this moment by a substantial number of Labour-controlled, often Militant-controlled authorities. It is being done in Liverpool. It is being done by the GLC, whose leader has just announced a further campaign for a super council for London to be brought into effect, as he puts it, after the next General Election: straight party political propaganda for the Labour party at the cost of the ratepayers, in this particular case adding a further £2 million of expenditure of that money to the £10 million whose expenditure he authorised in connection with the abolition Bill last Session.

One does not need to weary your Lordships with example after example. We have the example of Lambeth, where the leader of the Lambeth council has announced that he is permitting the use of council vehicles for a political demonstration and says, in clear terms, that his intention is to secure the defeat of the present Government.

We see this in Liverpool, where, as the The Times reported only the other day—and how glad we were to see that The Times is still reporting, despite the efforts of trade unionism gone mad in the printing unions—an official had been appointed to a branch of the city council and immediately transferred that afternoon, still paid by the council, to a militant front organisation outside it.

There is case after case of this, and it really is no use trying, with the problems that may arise at the periphery, the problem that may well arise in respect of some voluntary bodies, to distract the House from the main and central issue, which is: are your Lordships prepared to countenance the continuance of this grave, serious and offensive abuse? I hope your Lordships will feel that the Second Reading of this Bill is the moment for the discussion of that issue.

I was delighted to hear the right reverend Prelate the Bishop of Gloucester say he repudiated it. If I may comment, (though it is really for my noble friend on the Front Bench to do so) on his speech, it really did not seem likely that the worthy bodies in his diocese to which he referred would be affected by this Bill as it stands. He indicated that they might wish to criticise the local authority itself. It really seems difficult, on the reading of Clause 2, to see that Clause 2 interferes with financing of criticisms of the local authority by the local authority. However, if the right reverend Prelate is right, this could all be thrashed out in Committee; though I express a doubt as to this, as I express a very strong doubt as to whether the noble Baroness is right when she says that an anti-drugs campaign might fall foul of the section. I have yet to hear that any political party in this country is in favour of the taking of noxious drugs. I have yet to hear that any such body welcomes it or expects support in that way.

It is a little difficult to see, on a careful reading of Clause 2 of the Bill, how on earth this could be affected. I think an unnecessary amount of alarm and despondency has been created. The voluntary bodies are nervous, as we all saw during the abolition Bill of last Session. As the event proved, their nervousness was at any rate very seriously exaggerated. I guess it is so again. However, it is right that they are respectable, worthy and admirable bodies and it is right that their fears should be ventilated, as I understand they will be in a few moments by the noble Lord, Lord Hayter. I say to your Lordships at this stage that it will be advantageous to have these matters out now so that my noble friend, when we come to the Committee stage, can be prepared to deal with this matter. I suspect that his dealing with it will be very much on the lines of disabusing these bodies' fears. Equally, I know my noble friend well enough to know that if there is any reality in them, it is certainly not his wish that these voluntary bodies should be damaged in any way; nor is it mine.

Some of your Lordships may remember that I had the honour to serve for some six-and-a-half years as what was then called Minister of Pensions and National Insurance. I worked closely with all the major voluntary bodies in the social sphere in this country and I conceived an enormous admiration for them. Most of them do work which Government departments are not flexible enough to do and they also generally do it at a much lower administrative cost. They are admirable bodies, and, so far as I know, it is still the policy, certainly of Conservative governments, to encourage and to support all respectable and responsible bodies. I do not say to support all bodies—not, for example, that body supported by the GLC, the gay and lesbian forum, or bodies similar to that, which I hope will soon disappear with the disappearance of the GLC itself, but all the responsible bodies, the charities, the good bodies for which the noble Lord, Lord Hayter, among others, speaks. They surely should have confidence that this Government have no intention whatever of harming them.

I equally hope that those elements in this country who wish to enable Militant to use public funds to improve its grip on the country and its grip on the party opposite will not succeed in distracting the attention of your Lordships or of the Government from the need once and for all to stop the abuse which has grown up in these years. It is for that purpose that this Bill comes forward and for that reason that I fully support it.

4.28 p.m.

Lord Hayter

My Lords, when the abolition Bill was before us last year one noble Peer after another disclaimed any pretensions about wrecking the Bill. Sometimes they were believed; sometimes they were not. I hope that I was, because I have no party political angle coming as I do from these Benches. Now once again, as an independent. I hope that your Lordships will absolve me from any accusation of trying to vv reek this Bill.

There are three reasons why I felt I should speak. First of all, I have listened to the voluntary bodies. I shall not list them all. At a conference just recently there were 64 of them and I gather that all of them were worried about this or that angle of the Bill. There is still widespread concern, despite the slight concession made on Clause 2. Secondly, I know your Lordships' interest in voluntary bodies. I should think there is hardly a person here who is not associated in one way or another with some voluntary organisations, and many of you are mixed up with a whole host of them.

Thirdly, although I am not going to detail any possible suggestions by way of amendments, I can speak to your Lordships because fundamentally I expect that my aims are the same as those who have drafted this Bill. But it is not the aims of the Bill about which I am worried; it is the drafting of it that I think is wrong. If on this side of the House—perhaps with some allies—we are successful in changing this phrase or that phrase we may upset our lawyer friends, because this Bill is a lawyer's paradise and they may not get quite so many briefs. On the other hand, we shall satisfy some of the judges, because they will not then be in a position to decide on party political issues, which is the last thing they want to do.

Let me illustrate the dilemma that we find in trying to discover what is going on behind the mind of the Government. When this Bill was in the Committee stage in another place the Parliamentary Under-Secretary of State said: The Bill is not designed to impose new restrictions on activities of voluntary organisations. It is not intended to prevent voluntary organisations from putting forward their views on issues of political controversy or from campaigning on them. We seek only to prevent ratepayers' money being used by voluntary organisations for purposes that the authority itself will be prohibited from doing". If we thought the Bill did that, I think most of us on this side of the House could sit down and not say another word.

The same Parliamentary Under-Secretary of State said on a different occasion, again in Committee: If voluntary organisations' aims are of a campaigning nature they will need to be extremely careful about how they word or go about their campaign". That is shades of Big Brother or, in this case, Big Sister.

When we come to Clause 2 of the Bill and try to get some light from it, we have this sentence which has been quoted before: A local authority shall not publish any material which … appears to be designed to affect, or can reasonably be regarded as likely to affect, public support for a political party". This year is 1986, not 1984. Those phrases in that subsection could come straight out of 1984.

Again, when we turn over the pages, we come to Clause 6 and find what this word "publish" is supposed to mean. It refers to any communication, in whatever form, addressed to the public at large or to a section of the public". Shades of South Africa! In fact, the only safe place where you can speak is, I presume, the House of Lords, or perhaps the other place as well. So we have our worries. Still in Clause 2 are the words, can reasonably be regarded as likely to affect". That is the stumbling block in our eyes, so far as this Bill is concerned, particularly as Ministers have made clear that the test of political publicity throughout will be the publicity material itself. This, I agree, is the most objective test to use. However, as presently drafted Clause 2 refers both to the intention of the material and to the effect of the material. This means that material which was never intended to affect public support for a political party could nevertheless be prohibited simply because a few reasonable people—I will come back to that phrase in a moment—might think it could have this effect For example, legitimate campaigning by a voluntary organisation on the issue of pensions could be "regarded as likely" to affect public support for a political party simply because the force of its argument might lead members of the public to question a political party's policies on the issue. In this example, the voluntary organisation was doing no more than issuing publicity in pursuit of its own aims.

I hope your Lordships will not think that I take too simplistic a view—I know that I am grossly oversimplifying it—but in a way volunteering is making good the deficiencies of government. In an ideal society—maybe Plato's or Aristotle's; I have forgotten my Greek history—government would be doing all the things that voluntary bodies do now. It is only because they are not done by government that these things are taken up. Therefore, to join the right reverend Prelate, there is this interplay between voluntary organisations and political parties which is sometimes very difficult to define.

My City livery company has a big charitable trust which is devoted to the rehabilitation of prisoners and keeping youth out of prison. Most of those little organisations which are doing those things are supported partly by us and partly by local authorities. The rehabilitation of prisoners might be considered a reflection on the Government's policy of getting them back into public life. As for the young people—and this phrase has cropped up before this afternoon—they might be going to prison through unemployment; they might be going there through bad housing; they might be going there through the use of drugs. Any one of those gets back into this no-man's land of how one can affect public opinion. So a possible solution to some of those problems is to rely solely on the test of the intention of the publicity material.

Then we come onto a curious point—the definition of "political parties". Would not the National Front or communism be political parties? If so, they could complain that publicity material would affect public support for them and therefore they could challenge the very financial assistance that they were getting from a local authority. Thank heavens I have never been in a position to draft a government Bill, but I often wonder whether, when the drafting takes place, the phrase "What is sauce for the goose is sauce for the gander" is sometimes in the minds of those who are devising these Bills, because they may reverberate and rebound on those who are getting them out.

I have always thought—and here I suppose I speak as an innocent—that codes of practice, which after all are a comparatively new form of so-called legislation, are a confession of weakness. You cannot define what it is that you want to do and therefore you have a code of practice which, if you read this Bill, can be altered in any way you want. But if there is to be a code of practice then I hope—as indeed it should be, as laid down in the Bill—that there will be consultations with the voluntary bodies to see whether we can get the right answers. I feel that rightly or wrongly people at large will interpret this Bill as it stands before redrafting as a diehard attempt to muzzle the free speech of the voluntary organisations. I go no further than that. I repeat that it is not the aims of the Bill that are wrong; it is the drafting of it. For all our sakes, let us try to get it right.

4.39 p.m.

Lord Bellwin

My Lords, may I begin by apologising to your Lordships for the fact that I shall not be able to stay until the end of the debate; yet having played a small role in the original setting up of Widdicombe I feel that it would be proper for me to say a few words on this occasion. It will be no surprise when I say that I agree with and wholeheartedly support the Bill. Listening to the noble Baroness, Lady David, I did not know whether to laugh or cry. The local government of which she spoke is the local government of 20 years ago—perhaps 10 or maybe even six or seven. It is the local government of the many authorities which still try to maintain the high standards of public service, of elected members whose sole concern is the local (and I stress the word "local") betterment of the lot of the people who put them into office.

This Bill is surely not aimed to constrain those people or those authorities. The Bill, as I understand it, is aimed at helping them. The disrepute which the activities of the Labour Left has brought on local government has a serious impact on the scope and credibility of the majority who work seriously and hard to provide better and more cost-effective local services for their citizens. They have all to gain and nothing to lose by this Bill.

Many of us have watched with growing frustration the excessive abuse of power of many—not all by any means but far too many—of the Labour controlled authorities. To talk of the legitimate dissemination of information, of merely keeping people in the picture as regards a council's activities, of justification of a council's policies—all this is light years away from what is actually happening today in this sphere of much of local government activity. The massive public relations departments, the non-elected political advisers, the millions—yes, millions—of pounds being spent on the most blatant political propaganda, on anti-Government campaigns: what on earth has this to do with providing local services? Let there be no misunderstanding, no distortion. This Bill is aimed only at curbing the spending of ratepayers' money on political propaganda. If any party puts up its own money, it can spend it on whatever it likes. The key words are "its own money", presumably raised for party political purposes.

As my noble friend Lord Boyd-Carpenter said, the list is very long, and I have no intention of delaying your Lordships by going all the way through it. But the scale of what is going on should cause everyone great concern. The noble Baroness, Lady David, said that it is no part of the Labour Party's policy to support the spending of ratepayers' money on political purposes. If the noble Baroness says that, I hear it with much pleasure; but she must not mind if I then say to myself, "But why on earth have they not spoken out in the past against what they know is going on?" It is not enough now to say, "We do not support it". There is a time to come out and say so, and the time is not when a Bill of this kind comes before your Lordships' House.

We read, for example—I shall not give many illustrations because it would take too long and I would have to speak for at least an hour to give just some instances—that Islington's 1985–86 press campaign and publicity unit is likely to spend more than half a million pounds. Even worse is the fact that last year, in July, they advertised for a chief press campaign and publicity officer at £19,000 a year. The advertisement specified: Campaigning will be a major activity, and flair and experience in this area will be very helpful". Could anything be more explicitly politically partisan than that? But I heard no complaint then from the Labour Party about it.

I am not going to reel off, although I have it here, a whole list detailing what each of the authorities to which we are referring is spending on this kind of public propaganda, paid for, I say again, out of ratepayers' funds. The fact is that there are huge public relations departments spending tens of thousands, hundreds of thousands or even millions of pounds a year on this kind of activity. Frankly, how they have the nerve to plead poverty when they can spend such sums on these campaigns is beyond me. As one who for years was responsible for spending ratepayers' money, I am appalled at the profligacy and the irresponsibility.

My own City of Leeds, which is not one of the way out Left-wing authorities—it is moving in that direction but I would not class it in any way with some of the others I could mention—spends hundreds of thousands of pounds a year on public relations and political propaganda. As my noble friend Lord Boyd-Carpenter also so rightly said, prior to 1979 in Leeds both Conservative and Labour administrations, despite our bitter antagonisms against the governments of the day, would not waste ratepayers' money on such diversions. The leadership of' both parties were their own people, not bowing to the local party machines. They acted as elected councillors should act and worked solely for the benefit and wellbeing of local people. How that has changed!

There is another aspect of this political spending. We know where the money has come from, but how is it that such vast sums are available for this politicking purpose? On what pretext was this money raised in the first place? What services was it said the money was needed to provide, or are those services now having to go without? Are they being denied? If the authorities in question are as short of money as they never cease telling us they are, what sort of priority is that for spending other people's money? How does it equate with the need for housing repairs, for restoring empty accommodation, for social services and for educational needs?

We are told from time to time that the amounts involved are marginal. I have said before in your Lordships' House, marginal it may be but millions and millions it is. When I think of what could be done with those millions and millions in terms of providing local services, I could weep for local government as it has now become. Only this week we read that seven authorities in London will each put up £1 million—a total of £7 million—to continue to run the various defunct GLC peace committees, women's committees and the like. Those are the very authorities which tell us they are the poorest in the land; the very authorities which say, "We have 1,000, 2,000, 3,000, 4,000 empty dwellings which we cannot bring back into a state of use because we cannot afford it". They are the very ones who lead the campaigns about cuts. What hypocrisy, if ever there was such a thing!

One of the recent Labour slogans—indeed it was one of the local government slogans—was "Keep local government local". I go along with that. But when we see spending of moneys on campaigns against national government policies, what is local about that? The exploiting of local government as a weapon for co-ordinating publicity campaigns against, for example, national defence policy is not what local government is about. That is a sinister development. We have seen local ratepayers' money poured down the drain on publicity material regarding the miners' strike, civil defence, immigration control and nuclear disarmament. We see it daily squandered on peace committees, women's committees—why not men's committees? We should start doing something about that—and police monitoring committees: and all in the name of local government. I say, what humbug!

There are far too many councils, sad to say, for which local government is no longer about the administration of social services for the benefit of all but about acquiring a political power base and the ratepayers' money that goes with it to thwart the Government of the day and to promote their own ideas of society.

I finish on this note. The noble Baroness, Lady David, talked in terms of an attack on democracy and freedoms. I have the greatest respect for the noble Baroness. We have crossed swords for many years on many matters, and surprisingly, I think and privately, agreed on many others. There are those, including the noble Baroness, Lady David, who say—and I myself would like to say—that spending ratepayers' money on political advertising inhibits free speech. That has been said in the past in criticising the objective of this Bill. I say that that is turning reality on its head. In my view it is totally wrong to claim that preventing party political propaganda being paid for compulsorily by all ratepayers' money threatens democratic freedom.

Is it not ironic that no group of people today does more to threaten democratic freedom and to stifle free speech than do the extreme Left? Where else in this country do we see people denied the right to speak from private and public platforms if not by the extreme Left? We should compare that situation with the narrowly-defined limitations that this Bill seeks to impose.

There are many people, and I am among them, who would go much further than this Bill seeks to go and who would gladly justify doing so. When we reach the Committee stage and discuss amendments, I hope that I may try to do so. I conclude by saying that I am among those who weep over that which the Livingstones, the Hattons, and Bernie Grants and others of their ilk have done to the name, reputation and standing of local government in this country. I support this Bill without the slightest hesitation. I say again that I only wish it went further than it does.

4.51 p.m.

Lord Elystan-Morgan

My Lords, I am sure that the House and the noble Lord will forgive me if I do not follow him in the path that he had taken and in the arguments that he has articulated. All I will say at this stage is that I personally regret very much that a person of his distinguished standing in the realm of local government should have chosen to make so fiercely partisan a speech on this subject.

The noble Lord the Minister in opening the debate and proposing the Bill said that in his view very little change to local government would be brought about by this measure. With the greatest respect to him—and I have great admiration for the Minister's skill, integrity, balance, fair-mindedness and other excellent qualities—I disagree profoundly with the noble Lord on that matter. In my judgment this Bill will have a massive effect upon local government, not only in its direct consequences but also in the climate of thought and attitude that it will engender.

The Bill has to be seen in the context of the very delicate balance that exists between central government and local government; a balance that has been very considerably changed over the past seven years. The Bill must be seen also against the background of menacing financial controls imposed by central government upon local government in the past few years, and against the possibility of far greater controls, again of a financial nature, to be imposed if the proposals contained in the Green Paper that was published last week are to be implemented.

As my noble friend Lady David has said, this is the twelfth local government Bill to be initiated by the Government since 1979. All of them have one thing in common: they all constitute to some degree or another an attack on the scope, freedom and very ethos of local government. Above all, we must ask this question: how does this Bill measure up against our own vision of what local government should be?

The Wheatley Report of 1969 put the matter very modestly, in this way: Local authorities should in some degree provide a means for the self-expression of local communities". But 100 years or so ago, Gladstone, when inaugurating the first county councils in 1889 under the Act of the previous year, touched the very heart of the truth when he said: Our aim is to create a system of local self-government". That ideal, cherished by many, and cherished I hope by his successors in title in the Liberal Party today, even though they voted for the Bill on its Second Reading in another place, still remains unresolved.

I believe that we must consider the effect that this measure will have upon the realisation of such a dream. Since this is a miscellaneous provisions Bill it is axiomatic that, like the curate's egg, there must be some good in it. I readily accept that both Part I and Part IV are utterly unobjectionable. Again, I readily concede that in regard to the principle of making it impossible for public money to be used for the purposes of any political party the Bill is highly laudable.

The noble Lords, Lord Boyd-Carpenter and Lord Bellwin, suggest that the Labour Party has tarried in making clear its position in relation to that matter. That is not so. The spokesman for the Labour Party in another place said on Second Reading on 18th November that he wanted to make it abundantly clear that that was one matter on which there was no difference between the party and Her Majesty's Government. Indeed, when the full Widdicombe Report is published it will be seen that the very evidence given by the Labour Party was exactly on those lines. I may say of the Widdicombe Report that I believe it to be well researched, well argued, and presented in a most fair and balanced way. However, it is an interim report and it should be remembered that of the five members of the committee one thoroughly disagreed and issued a dissenting memorandum, while one other member noted very serious reservations.

One could be very simple and say that it may well be that the motivation of Her Majesty's Government in bringing forward this measure now and in having the Widdicombe Committee make an interim report was perhaps less than honourable; that they wished to stifle certain robust voices in local government. I do not make that charge. I do not believe that such can be proven. Indeed, it may be that such a thought never crossed the minds of Ministers in Her Majesty's Government. I believe that this matter has to be looked at according to its merits or demerits. Its demerits have been very clearly shown in the most excellent speech of my noble friend Lady David. I recognise that much of what I have to say in the next few minutes will be an underscoring of the points that my noble friend has already touched upon.

It is important to remember that this Bill not only goes wildly beyond the recommendations of Widdicombe but that it flies directly in the face of many of Widdicombe's specific recommendations. As far as Clause 3(1) of the Bill is concerned, and as the House well appreciates, it has the effect of cramping very considerably the present scope of Section 142 of the Local Government Act 1970. That provision has been part of local government legislation since at least 1948, and it may have been in existence some decades earlier.

It is also right to remember that that particular provision, which allowed a local authority to spend money for local government purposes, was very considerably curtailed, as my noble friend has already told the House, in two judgments in the High Court, by Mr. Justice Glidewell and Mr. Justice Nolan, in 1984. What those judgments amount to, as I understand it, is this: for an expenditure to be legitimate, first it has to be connected with a local government purpose, and, secondly, in so far as it seeks to campaign, that campaign must be something utterly consequential to that local government purpose. In other words, it narrows very greatly, at least, the superficial grammatical meaning of the words in Section 142.

Widdicombe has a certain vision of local government. It is the broad generous vision. It is not the vision of local government as being confined to the sum total of its limited statutory functions. It is a vision which it sets out in paragraph 34 of the report. I can do no better than quote it to the House. It states: The relationship between central and local government should be an open one, and changes affecting local government should be the subject of consultation". It goes on to say—and this is my main point: Local government has a duty to inform the public within its area as to the exercise of its functions and on local government matters generally. Parliament has given local authorities powers to issue information on local government matters. Local authorities should be able to use their powers, with incidental persuasive effect, in support or opposition to proposed legislative changes". In other words, it does not conceive of a local authority's function as ending with merely carrying out obligations laid upon it by statute.

Paragraph 31 of the report should be looked at in this light. It states: Our political system needs to be able to operate in circumstances of reduced consensus. It is most important that there are means by which political differences can be expressed within our democratic institutions. Such means not only provide an opportunity for the issues to be properly debated, but also provide a stabilising factor in our political system. On this view it would appear right in principle that local authorities should be able to put their side of the argument on issues of political controversy affecting them". That is what this Second Reading debate is about. It is not about whether or not funds should be utterly misused in a thoroughly corrupt way as they would be, of course, if they were used to propagate the views or position of a political party in a direct way. The debate is about whether a local authority is entitled to live its full life, as local authorities were intended to act and live, or whether they should be "cabined, cribbed, confined" to a degree that we regard as utterly intolerable. If Clause 3(1) becomes law I believe that such confinement will inevitably occur.

As regards Clause 2 there are, in my submission, two fundamental objections to the clause as it now stands. First, it is extremely wide in scope. Secondly, it is woefully imprecise in its objective. I first deal with the question of the width of its scope. Clause 2(1) is, of course, a prohibition upon publishing a material which, appears to be designed to affect, or can reasonably be regarded as likely to affect, public support for a political party". Those two nets are massively wide and they cover different areas, although there may be an element of double cover.

The first does not deal with the question of what is the intention of the particular group that publishes material, but what it appears to be. That is a totally different test. It is a subjective test, not an objective test. The second, as I understand it, again is a subjective test of what could reasonably be regarded as likely to bring support for a certain political party. That is the widest test imaginable.

I suppose it can be said that it is virtually impossible for us to have a debate upon any matter in this House and for any Member to take part in that debate, whatever the subject—whether it be theological, about French apples or the nuclear holocaust—without one political party or another benefiting to some degree or being prejudiced by what is said in that debate. Such are the different outlooks of millions of people that such a result is utterly inevitable.

However, the Bill does not talk about political support to a substantial degree; it merely talks of political support. Where do you draw the line? If you conceive that perhaps 10 people might be affected by it, that 1,000 might be affected by it, or that millions might be affected by it, where do you draw the line? Again, the Bill speaks of support for a political party. What of a campaign against a political party? Clever psephologists tell us that, in the main, at elections people hardly ever vote for anyone at all—they vote against people. I well remember, as undoubtedly your Lordships do, the most effective campaign in 1979 and the poster published by the Conservative Central Office stating: Labour isn't working". It is not for me to comment at this stage as to the accuracy of that poster or, indeed, as to the irony of it in the light of subsequent events. Be that as it may, it was a very powerful piece of propaganda. Is propaganda against a party to count? Or is it interpreted that anything that is against Party A must be for the benefit of parties B and C; but which of them? It is a very much more difficult task to decide who benefits, as it were, on the rebound as compared with the tests set out in Clause 2(1).

The second effect with regard to imprecision is, I believe, still more deadly. At paragraph 175 Widdicombe expresses this pious hope: We wish to avoid new controls that will be imprecise, or raise major definitional problems, and are aware that it is easier to identify a problem than to encapsulate that problem in a legislative formula". I am sure that we all heartily endorse those words.

In my submission the words of Clause 2 are open to illimitable varieties of interpretation. If they become law in their present form they will lead to endless litigation. Worse than that, they will bring Her Majesty's judges into the very centre of the arena of acute controversy. I have not the slightest doubt that those judges will do their duty in a most even-handed way; but will that be seen in the same way by ordinary members of the public, or will Johnny Citizen say, "I believe that that judge is manipulating party politics"? It is grossly unfair and it is a grave and critical situation that Her Majesty's judges should be exposed to such a peril.

I am afraid I cannot deal with many of the matters I intended to cover; I have taken up more time than I should already. It has been put that this is really a clever argument now being put forward by the Opposition to try to destroy the heart and centre of the Bill and that, in reality, there are only fringe difficulties. I believe the difficulties in relation to Clause 2 to be quite immense—Clause 2 in conjunction, of course, with Clause 3.

As for Clause 3, it means that a local authority will never be quite sure exactly on what it can expend publicity or indeed exercise unpaid publicity as far as the codes are concerned. It means that where something happens in relation to a local authority, be it the closure of a railway, the making of a reservoir, the building of an airport or some such matter, which affects the people of that locality to an acute degree, if it is not part of the statutory function of that authority then it will be only at its peril that it will spend publicity on educating the public about that particular issue and leading public opinion upon it. That is a very real matter.

I have a letter which was handed to me today from the chief executive of the Gwynedd County Council. It is a cri de coeur as regards the attitude of persons who have to advise local authorities on this matter. Again, I am sure it is the experience of many noble Lords in this House, as it is my own, of appearing in certain local inquiries where there is a consortium of local authorities all joining together to contest, let us say, a railway closure. Some of them will be county councils, and it may well be that they say that they have certain obligations under the various transport Acts. Many of them will be district councils and they have no such obligations at all.

As I understand it, under Clause 3 only at their peril and under the shadow of surcharge will they be able to risk spending money upon publicity. The mention of surcharge reminds me of one point that I wanted to take up in relation to something which was said by the noble Lord, Lord Bellwin. We have to look at this situation in a balanced way. Widdicombe was not able to unearth one single instance of money being directly used for the purposes of a political party. As for the money that was used at all on publicity, the report came to the conclusion that out of half the sample authorities less than one-tenth of 1 per cent. of the money was spent on publicity.

If the noble Lord, Lord Bellwin, is correct and there were blatant and obvious misuses, why were those people not surcharged? Why were the matters not brought before the courts? It is an extremely limited problem but I am afraid that the way in which the Government propose to tackle it creates an even greater difficulty and a grave danger.

5.12 p.m.

Lord Orr-Ewing

My Lords, I do not wish to pick up the various points from the statesmanlike speech which was made from the Benches opposite. I can only say that I hope I shall take rather less time in the interests of those who are yet to come. I had rather hoped that the noble Lord would recognise that there are evils abroad now and that he would come up with constructive suggestions. He does not like the Government's suggestion and I should like to hear what could be done. It is a difficult problem and we are all trying to find the right boundary between information and propaganda.

Ten years ago I sat on the Royal Commission on the standards of conduct in public life. It took a long time and produced a very long, erudite report. I read the evidence which the Labour Party gave to that commission and it was good evidence. It said that all councillors should maintain higher standards than those which were legally enforceable. So they set a higher standard than the law. That was 10 years ago and there has been a terrible change since that time.

In some areas the Labour Party has been hijacked by Militant and some other hard Left factions. The standard of conduct of the new breed of Labour councillor is degrading and utterly different from the honourable standards set by their predecessors. I served for 20 years as Member of Parliament for Hendon and I came to know councillors there of all persuasions. They were honourable men desperately trying to carry out their duties and doing so very honourably. They would turn in their graves if they could read what some of the hard Left are now up to; and this Bill is seeking to try to put a stop to it. I hope that we shall have support from all sides of the House on the general principles of trying to beat the hard Left at their game.

The Marxist Left have moved in on local government in the way in which they have tried to gain control of the trade unions and the way in which they have shamelessly gained control already of some parliamentary seats, of which the saddest example was last week when Michael Cocks, who was Chief Whip of the Labour Party and who was much respected by all the people who served in the Commons as a firm and fair Chief Whip, was hounded out of his seat by the hard Left. This is revolution by stealth, which must be disturbing to the Labour Party and the SDP; and with good reasons, because their name is being tarred by the activities of people who are calling themselves Labour. This Government have enacted a number of measures to combat the problem. They did it in the unions to give democratic control of those bodies to their members, and it was therefore only a matter of time before a Bill was needed in order to restore probity to local councils.

The GLC have now spent £7.6 million of ratepayers' money on their campaign. That is the sort of sum which is not spent even by the main parties in a general election campaign covering 650 constituencies. They do not spend sums of that sort. It is about equal to what the Labour Party and the Conservative Party will probably spend at the next general election, and I suspect that it is two or three times as much as the SDP can afford. When you have that happening, surely something must be done and this is what this Bill is trying to do. In so far as—

Lord Elystan-Morgan

My Lords, will the noble Lord give way? Will he accept that in so far as part of that expenditure was spent on a campaign to seek to preserve the life of the GLC—and that indeed must have been the major part of it—it does not place the GLC in a situation any different from Rutland County Council, the Isle of Wight County Council and the county council of Fife in the early 1970s, who did exactly the same thing?

Lord Orr-Ewing

My Lords, they did not spend moneys of that sort because they did not have moneys of that sort to spend. So far as this Bill goes, I welcome it. Unfortunately I believe that it does not go far enough, as my noble friend Lord Bellwin and the noble Lord, Lord Boyd-Carpenter, both pointed out.

When councils spend more on an individual campaign than the major parties do in fighting a general election, there is something wrong with the State of Denmark. The Government appointed the Widdicombe Committee and I am sure they are right to bring forward an interim Bill. We shall await the second part of that report. The Government, I thought, had some strange reluctance in the House of Commons to go any further than the Widdicombe Interim Report, but let the Government please recall that it is the Government who were elected to decide these matters and not Widdicombe. By all means weigh Widdicombe; it is most useful that it should be doing a thorough job. Weigh it carefully in the deliberations, but in the final analysis it is the Government who must take responsibility for what appears on the statute book. It is the Government who must govern.

The Left argue—and it has been said today—that this Bill atacks freedom of speech. I find this rich coming from Left-wing activists for whom free speech means that the cost of their propaganda is met entirely from ratepayers' money. No councillor is being denied freedom to express any views that he likes. But this Bill ensures that he must pay the costs of his party political advertising himself and not pass it on to the public at large.

Your Lordships will agree that it is the job of elected MPs to represent the views of their local constituents to government. It is not the job of councils. They exist simply to provide local services, and a great number of them try honourably to do that. Councils are the creation of Parliament and they are subject to it. They are not its rival and are not entitled to oppose and frustrate the will of Parliament. If councils are to be given a new constitutional role representing constitu- ents in place of MPs then this is a matter which surely should be enacted most carefully and most publicly. To create a state within a state is not a change that should take place by stealth.

Examples of the way in which councils have conducted massive publicity campaigns are all too self-evident and they have been quoted. There was the rate-capping saga last year when Labour councils spent millions lying to the public about the consequences of rate-capping. I saw that Leicester council, for example, issued publicity saying that services would be destroyed. Such a statement was very common: that there would be massive lay-offs of council workers. Strangely enough, that council is now employing more workers than it did before rate-capping took place.

Ken Livingstone's report to the GLC Labour Group, which I looked at on 15th March last year, admitted: Telling the public that government policies will lead to immediate massive cuts creates real problems for the credibility of the party when those cuts don't happen". That is exactly what has happened.

The lies can rebound, but millions of pounds of ratepayers' cash has been spent in the meantime. Unfortunately, I am not entirely happy that under the Bill such activity would be prohibited because councils will still be permitted to publish information relating to their functions provided it cannot be said to affect support for a political party. The GLC's anti-abolition campaign alone cost £7.6 million. I wonder how many meals-on-wheels could have been bought for that sum.

One of the most prolific growth areas for propaganda is the funding of outside groups. Some of them have fine-sounding names, like the Institute for Race Relations and the Campaign for Press and Broadcasting Freedom. They sound good, but they provide cover for a Marxist think-tank which does its best to poison good race relations and is a far-Left pressure group dedicated to state interference in the media.

It seems to me that the Bill does nothing to prevent councils from giving money to such groups for some purpose other than publicity and thus keeping them alive and active. I have here a list 13 solid pages long, but for the sake of time I shall not quote from it. It is produced by the Ethnic Minorities Committee of the GLC. It is dated 2nd December 1985. The money to be spent in the current year totals £6.76 million. All sorts of ethnic minorities are mentioned, including the Afghans and the Irish. I have never looked on the Irish as being in need of much support in this country. They speak for themselves and sometimes act for themselves rather too vigorously. But in the eyes of the GLC the Irish are a racial minority in need of ratepayers' money. I could go on until the cows come home.

It seems to me that the Bill does nothing to prevent councils from giving those groups money. There are 441 groups getting aid from the GLC. That is just one committee of one council in one year. Doubtless many of them are quite reputable organisations. But who knows what they do? Who will check to see that they do not use the cash for publicity purposes? I do not think that the Minister appreciates the scale of the difficulties. Who is to police the legislation? The difficulties are considerable. As an example, seven of the staff of the NCCL are funded by local government. It is impossible to check whether any of their activities for the NCCL during the year breaches this Bill.

A whole network of Left-wing militants live off the local government sector; they are parasites who suck the ratepayer dry to feed their propaganda machine. I have already mentioned the Institute for Race Relations. It works in close collaboration with the Institute for Policy Studies in Washington and its sister organisation, the Transnational Institute in Amsterdam. Those organisations are established acolytes of the Soviet propaganda machine. A past director of the Transnational Institute, Orlando Letelier, was discovered after his assassination to have been in close contact with Cuban intelligence. That is the measure of the people who are receiving ratepayers' cash to pay for their propaganda.

The Institute for Race Relations is named as an umbrella group to hold as yet unknown thousands of pounds to pass on to other groups after abolition, by courtesy of the GLC. The London Transnational Information Exchange, which is another affiliate of the pro-Soviet Transnational Institute, is also GLC funded. One of its sponsors, Dr. Michael Cooley, is a director of the GLC funded GLEB; and that organisation has some awkward questions to answer.

The Institute for Race Relations' editorial committee includes Tony Bunyan, a paid GLC officer in charge of the notorious anti-Police Committee, and Lee Bridges, both of whom are serving or past officers of the Libertarian Research and Education Trust, which is also GLC funded. Bunyan has been active in attacking our security services, and is now campaigning to abolish the office of constable and to turn policemen into local government officers, like social workers. He wishes to hand political control of the police over to London borough leaders like Bernie Grant, Ted Knight and others.

Those are the people with their hands on ratepayers' money and those are the people who the Bill must stop. I believe that the Bill will need careful scrutiny in Committee. It is regrettable that it contains no measures to help ordinary people and decent councillors to ensure that its provisions are not broken. It is the militant extremists who are driving out conscientious, moderate councillors (and the last speaker, I am sure, is in touch with those) of all political parties. Not only Labour people are becoming disillusioned; Liberals, Tories and ratepayers' representatives are all becoming disillusioned in the face of the attack.

It is difficult, I concede, to define a clear boundary between information and propaganda. That is what we have to puzzle out in Committee. In 1984 there was a law case, which I think the noble Baroness mentioned. It was reported only last month. It was R v. ILEA, but it was brought by the Westminster City Council, as the noble Baroness mentioned. Mr. Justice Glidewell found that, whereas advertising about its policy was legitimate, publicity expenditure to influence the electorate against Government policy was unauthorised under existing Acts. Up until now there has been doubt about the boundary between information and political propaganda, and it is highly desirable that that boundary should be more clearly established.

Currently councils under hard-Left domination are spending millions of ratepayers' money on millions of pamphlets. Surely local and national papers will report what is important. I was in a marginal constituency for 20 years, and we always had to raise funds for the monthly magazine to tell our supporters what we were about. Now it seems it all has to be done by the council with ratepayers' money. Surely party political pamphlets should be spread abroad by voluntary contributions rather than by using ratepayers' and taxpayers' money.

Noble Lords may have read yesterday's Daily Express lead story which revealed that the GLC and other metropolitan councils are, before abolition, desperately squandering £140 million of ratepayers' money to local organisations that they favour. It has been established by Professor Regan of Nottingham University that councils have spent £10 million in the past five years to sabotage the Government's civil defence plans and to establish so-called nuclear-free zones.

I support the Second Reading of the Bill. During its passage we must try to strengthen it so that reasonable information is permissible, but extreme propaganda will no longer be financed by the public. Surely in this House the vast majority of Liberal, SDP, Cross-Bench, Labour and Tory Peers will realise that something now has to be done and will support this case.

5.27 p.m.

Lord Chalfont

My Lords, the fact that this Bill has had to be introduced at all is a sad reflection on contemporary standards of integrity in much of British public life. The conventions which have governed the conduct of local government for generations have broken down, or rather they are being progressively dismantled by a growing group of political activists who, as the noble Lord, Lord Bellwin, said, having failed to achieve a power base in national politics now turn to the local councils to seek and to seize power which they use both to propagate extremist political dogma and, through the new concept of the local state, as it is called, to pursue policies in areas of national importance which are reserved constitutionally, as other noble Lords have said, for this Parliament.

As the noble Lord, Lord Boyd-Carpenter, said the facts are clear. Those people use the tax-raising power of the rates to redistribute wealth. They use their funding powers to finance all manner of organisations, some of them clearly, and often openly, subversive. They provide jobs for their political allies not only by giving public money to pressure groups that those friends organise but also by employing them in the local councils that they control.

Mr. Livingstone of the Greater London Council said in an article on 10th August last year in a London-based Gujerati magazine that the chief executive of Ealing council will need to be dismissed when Labour comes to power and further that there will have to be the removal of a lot of chief officers in councils of which Labour may gain control—to be replaced of course with Mr. Livingstone's political allies!

I suppose that this could be called—in a phrase used in your Lordships' House this evening—early retirement. But to some of us, it will have somewhat more sinister connotations. This new breed of extremist councils furthermore exploits the co-option system to give its friends seats on committees. That in itself is bad enough. But those seats carry votes. Recently, an SDP candidate who won a by-election to the Inner London Education Authority was denied a seat on any of the authority's committees while his Labour opponent, who lost the election, was co-opted on to the ILEA committees with full voting rights. That is a contempt for the electoral system of which it is hard to find a comparison since the days of the rotten boroughs.

Most spectacularly, it is in the field of publicity that the abuse of the system has developed. Whether we call this publicity, propaganda or information is an interesting semantic and philosophical point. But what is happening is what matters. Councils are using simple legislation which was designed for the proper purpose of giving information about their services and some measure of discretion in the expenditure of, a small proportion of the rates to conduct massive political propaganda campaigns. It is this last issue—political propaganda on the rates—with which Part II of the Bill that we are discussing seeks principally to deal.

The Earl of Longford

My Lords, I apologise for not having been present in the House earlier. If my question has been dealt with already, I apologise again. Would the noble Lord justify the use of enormous sums of money by central government to propagand their own purposes?

Lord Chalfont

My Lords, no. In the context of this Bill, I am not prepared to comment on the use of money by central government. My understanding however—since the matter has already been brought up in the House—is that propaganda by the major political parties in this country in terms of national government is paid for by the political parties themselves and not by the Exchequer.

The Earl of Longford

my Lords, I am sorry to interrupt again.

Noble Lords

Oh!

The Earl of Longford

My Lords, may I interrupt again? It is obviously, if I may say so, not so. The vast sum of money spent on government public relations officers is certainly not provided by the political parties.

Lord Chalfont

My Lords, I believe that this might turn out to be a somewhat futile exchange. There is a vast difference between the expenditure of money by government public relations in putting forward the policies of the Government and the action of extremist political parties in local authorities peddling the propaganda of their parties and not of their authorities.

The noble Lord, Lord Elton, was generously disposed to accept the implications of full political commitment in local as well as in national government. I believe that it will be generally accepted in your Lordships' House that one of the tests of democracy is the ability of governments, national or local, to be changed at the ballot box. In my view it is just as lethal to the democratic system for a party to hold on to power by abusing the system to make political propaganda as it would be for that party to hold on to power by the use of violence. There is no difference, in my view, in the damage that it can do to the democratic system. In so far as this Bill seeks to prevent the corrupt use of public money for political advantage. it is welcome and indeed, in my view, overdue. But will it succeed in its purpose? As the noble Lord, Lord Boyd-Carpenter, has rightly said, it is not appropriate to go into too much detail at Second Reading. But a few observations might be permissible and relevant.

The Bill prohobits a local authority from publishing material which, in whole or in part, appears to be designed to affect, or can reasonably be regarded as likely to affect, public support for a political party. Given a certain amount of attention at the Committee stage, that is fine so far as it goes. But, in another place, for example, the Opposition argued that even a rate demand showing no increase in the rates was in itself likely to affect support for a political party. The noble Baroness, Lady David, put foward analogous and similar arguments in your Lordships' House today. I do not believe that the courts would be so wide in their interpretation of the Bill. But it does, it is true, pose a question of where they will draw the line. This is something, as many noble Lords have suggested, that will have to be looked at in detail in Committee. So indeed will the question of what it is that constitutes a political party. Obviously, the Bill, which charts new legislative waters, will give rise to many questions that only the Committee stage can hope to resolve, and in due course the adjudication of the courts can answer.

The Bill also seeks to ban councils from funding outside organisations for the purpose of publishing the type of material that councils are banned by the Bill from publishing themselves. It is, as already stated, a scandal that councils hand out ratepayers' money to organisations which conduct partisan political campaigns. As the noble Lord, Lord Orr-Ewing, has said, Professor David Regan, of the University of Nottingham, recently published a report called, ironically, It Costs a Bomb, pointing out that over £10 million had been spent by councils on this incredible farce of the nuclear-free zone within local authorities. This is clearly not a minor problem. The Greater London Council, as we have already heard, in the last days left to it, is organising a massive hand-out of millions and millions of pounds to what it terms voluntary groups. Many of these, as the noble Lord, Lord Boyd-Carpenter said, are worthy bodies, active in the fields of medicine or the arts. But many of them will be concerned with straightforward political propaganda.

Indeed, one only has to inspect the minutes of the committee that is organising this pay-out. I have them here. It is a group that calls itself the Voluntary Sector Forward Funding Sub-Group. The minutes are those of a meeting held on 10th January. We do not know exactly how much money will be given away. However, from one of the paragraphs of the minutes, we can get an idea of the cynical contempt with which this authority manipulates the letter of the law and re-arranges its affairs to circumvent legislation. In explaining in the minutes that grants, which are called appendices, must not be given under Section 137 of the 1972 Local Government Act in excess of the amount requiring consent from the Secretary of State (which is a provision of the 1972 Act) council officials are told clearly how to write reports to circumvent the provisions of the Act. I quote from the minutes.

The individual appendices"— or grants— will need to explain that fresh information has been received from groups about their activities indicating that a re-apportionment of funding powers is now considered appropriate with a brief explanation of why this is so". If I may translate that into English, what it means is: Say that the circumstances have now changed so that you can give the grant under other legislation and so avoid having to obtain the consent of the Minister". Such blatant cynicism if it continues (and it almost certainly will) will quickly undermine a provision that bans councils only from funding groups for publicity purposes. The councils will simply say that the grant is for some other purpose—for running costs, for example—and the groups will use the money that they do not need for running costs to pay for publicity. I have here the Camden contact list issued for the Year of Peace, 1986. That contact list contains the addresses and telephone numbers of 129 groups, every single one of them a radical campaigning group. Of those, 63 are directly connected with what are known as the peace movement and unilateral disarmament. That is how Camden Council conducts its publicity: by publishing the names of these radical groups, every single one of which campaigns on behalf of the party which is in power in the Camden Council.

Many of these matters, such as terms like "function", "information", "propaganda", "description of services", will have to be considered again when we come to Committee stage. For example, it is disappointing that the Bill sets no overall limit on the amount which a council may spend on publicity. That is something which we may look at at a later stage.

Lord Stallard

My Lords, may I interrupt on the question of Camden, because I know a little about Camden? Has the noble Lord any proof that all those organisations campaign in favour of the Labour Party in Camden? That is what the noble Lord said.

Lord Chalfont

My Lords, it is proof, experience. I have looked through this list and checked every single item on it. I have looked into its background. There is not one single group on that organisation which does not campaign in a sense which is favourable to the ruling group in the Camden Council. I shall give the noble Lord this list and if he can show me one which does not I shall withdraw accordingly.

As the noble Lord, Lord Orr-Ewing, has said, it is what the Bill does not do which gives me, at least, the greatest cause for concern. So far as I am aware this Bill contains no provision of any kind for its enforcement. If a Bill has no adequate means of enforcement I think that it can be argued that it can do positive harm by bringing the law into contempt.

What are the remedies if the provisions of the law when this Bill comes into force are contravened? There is the remedy of complaint to district auditors. That has proved ineffective time after time. It is slow. Some auditors will not even investigate until after the time when they audit the books covering the expenditure which is complained of. It rarely results in any surcharge of councillors; and any publicity which was the subject of such a complaint would, in the time that elapsed, continue unchecked and the Bill would have proved to be ineffective.

A ratepayer can of course apply to the courts for remedy. But I submit that it would be a dangerous venture. Should he lose, the public-spirited ratepayer could face costs running into tens of thousands of pounds. The ratepayer stands alone; the council is backed by the ratepayers' money whether it wins or loses in the courts. It is hard for me to understand why the Bill does not follow its two predecessors and extend to voters as well as to ratepayers the right to sue in the courts to enforce the Bill.

There are many other matters that I should have liked to deal with but I shall hope to return to them at a later stage of the Bill. I shall conclude by saying that I regard this Bill as a very modest Bill with a substantially useful contribution to make to administrative law. It could be a major instrument for the defence of the democratic system. However, if it fails to give ordinary citizens who are to police and enforce the Bill's provisions the means with which to do so then it will almost certainly fail in its purpose.

It is not too extreme to say that we are seeking in this Bill to deal with people for whom the laws enacted in this Parliament exist only to be defied, undermined and held in contempt. It is our duty to make that course as difficult and dangerous for them as we possibly can.

5.45 p.m.

Lord Mottistone

My Lords, it is a privilege to follow the noble Lord, Lord Chalfont, after his most impressive speech—one of many such speeches, but a particularly good one. I shall have to apologise to my noble friend the Minister, and indeed to the later speakers, because I may not be able to stay to the end of the debate owing to a long-standing engagement. I am extremely sorry for that because it has been a very good debate so far, albeit perhaps rather lengthy.

I fully support the Government's intentions in all parts of this Bill for the reasons given most clearly by my noble friend the Minister in opening the debate so skilfully. It is not for me to add to the very powerful speeches of my noble friends Lord Boyd-Carpenter, Lord Bellwin and Lord Orr-Ewing, as well as that of the noble Lord, Lord Chalfont. They have made it abundantly clear to us why this Bill is so very necessary.

I thought that it was sad when the noble Lord, Lord Elystan-Morgan, picked up the point made by my noble friend Lord Bellwin as though he was being unreasonably aggressive—if I may put it that way. I thought that my noble friend Lord Bellwin spoke from the heart as a long-standing "local governmenteer"—if there is such a phrase—who was genuinely sad at what was happening on those councils to which other noble Lords have referred and whose shortcomings in the general area of running local government have been so very fully exposed.

With regard to the suggestion made by the noble Lord, Lord Elystan-Morgan, to my noble friend Lord Orr-Ewing that the Isle of Wight County Council in the 1970s did no more than the GLC did last year, I hope the noble Lord will remember that the Isle of Wight County Council at that time was a Conservative council, the Government in Whitehall was a Conservative Government, and the Member of Parliament for the Isle of Wight was Conservative. Speaking for them in this House, I too was a Conservative. One could not therefore say that it was a party political issue in the sense of what Clause 2 of this Bill is designed to deal with.

Having said all that, I have very little more to say on matters of detail about this Bill in relation to certain bodies who have briefed me. One of them is the Advertising Association, which clearly accepts the Bill as it stands, feels that it has been amended part way towards what is necessary to make it good from its point of view, and would hope that there will be some further amendments in matters of detail. Those will be a matter for later stages of the Bill.

My main information comes from the National Association of Local Councils, of which I am a vice-president. I was most surprised to hear the noble Baroness, Lady David, say—when opening for the Opposition—that they, like the Association of County Councils and others, were against the Bill when it was first introduced. I think that that is probably true, but it is very clear from their latest statements on this Bill that much of what they disliked about it in its earlier stages has been corrected either by amendment in another place or by discussion with the Department of Environment. There is not very much left which they would seek to have amended and that I shall hope in due course to put before your Lordships.

There is one area which they find difficult in relation to parish councils. It is worth making the point that, happily, parish councils are still not political. It is probably a sad reflection on how we have developed in this country that at the higher levels local authorities are now so political. It is perhaps one of the reasons why they are nothing like as efficient as they used to be.

Therefore, parish councils want the Bill to be in such a form that it will not unnecessarily hamper their attempts to represent the views of the local people at their level. One matter which fusses them concerns the functions of the authority in Clause 3(1)(b), which, as noble Lords who have been briefed by the higher levels of local government will know, is also a matter of concern to the county councils. I quote: It has also to be remembered that some important activities are not categorised as functions. Economic development initiatives which both Government and local authorities are so keen to see promoted are a case in point. There must be a real doubt whether publicity aimed at attracting industry or commerce to an area would be permitted. And what about the related aspect of tourism and publicity connected with the holiday trade? Matters of that sort are absolutely crucial to a county like the Isle of Wight, where I come from. I hope that my noble friend the Minister can reassure us today, or at a later stage when a suitable amendment is tabled, that when the Bill leaves this House there will be no question of those very important points not being able to be expressed as fully as necessary, and that this Bill will not prevent that.

Having said all that and, in effect, having said that there are worthy reasons why some of the points in this Bill should be, if you like, softened in order to accommodate some of the matters contained in my previous remarks, it will be extremely difficult for us eventually to provide a Bill which accommodates that and which at the same time accommodates the very serious problems which were raised in the immediately preceding speeches by my noble friend Lord On-Ewing and the noble Lord, Lord Chalfont. How can we have legislation which is sufficiently strong to protect the rest of us from misuse of legislation by contriving authorities, if I may use that word for authorities which seek to use legislation to achieve their own aims and contrary to the purposes of that legislation? How can we produce legislation which will safeguard the rest of us against that, and at the same time make legislation flexible enough to deal with the problems of the worthy little local councils or the genuinely striving county councils? That is the problem.

However, we must produce such legislation and I believe that the Committee stage and later stages of this Bill will be extremely important. It is also very important not to forget what the Bill is all about in the first place. It should not be here. It is only here because there are scheming people who seek to turn this country to their own purpose and to overthrow the ordinary processes of parliamentary government. We must make quite certain that they cannot continue to do that. Therefore, I hope that during the later stages of this Bill noble Lords of all parties will join with the Government in trying to make this Bill a proper Bill which achieves its main aim.

5.54 p.m.

Lord Denning

My Lords, like my noble friend Lord Mottistone, I may not be able to stay to the end of this debate, but I want to say a few words in support of the general objectives of the Bill. My noble friend Lord Chalfont has dramatically described the evils which are present in our society, and in particular in some councillors in some councils. Like my noble friend Lord Mottistone, I have been concerned only with the lowest level of local authorities—parish councils. I was the president of their national association. I always told them that they must be completely independent of party politics, otherwise I could never be their president. I exhorted them all when they were elected that they should stand as independents and not for any political party. As they grew bigger, I was distressed to find that gradually electors could only know the candidates by their party label. Therefore, I am afraid that throughout our local administration party politics have come to stay.

On this particular Bill I should like to speak as a judge because I am very anxious that nothing should be done in this House or by any legislation which would bring the judges of England into the political sphere. For that purpose, it is essential that the words should be clear and definite, not vague and misleading, so that the task of the judges is simply to interpret the words. That indeed is borne out by the Widdicombe Committee Report, which at paragraph 175 says: We wish to avoid new controls that will be imprecise, or raise major definitional problems, and are aware that it is easier to identify a problem than to encapsulate that problem in a legislative formula". I would agree with every word of that. However, the report then went on to deal with imprecise matters. The committee made just one recommendation as regards legislation at paragraph 244: We propose that: (a) there should be an express statutory prohibition of local authority publicity of a party political nature;". I think and hope that everyone would endorse that recommendation; indeed that is at the forefront of Clause 2 of this Bill.

However, I ask: if the matter comes before the judge, what is the meaning of a political party? Does it mean one of the great political parliamentary parties, as this House and another place know them to be? Is it confined to the Conservatives, the Liberals, the Labour Party or perhaps any others, or does it extend to the National Front? Does it extend to the anti-Fascist organisations? Does it refer to the Institute of Race Relations? We have a problem at once. What is a political party within this paramount clause? That matter must be solved during the Committee stage.

I do not see why a list of those which are regarded as political parties should not be appended. I would certainly put the National Front among political parties, as well as many others. However, it would ease the task of the judges if they are told exactly what they are to do.

My noble friend Lord Chalfont asked about enforcement. At the moment this Bill does not tell us how its provisions are to be enforced, and all Bills should do that. Suppose a local council is doing wrong. It is paying money to its own political fund, or supporting an organisation which is using the money for political purposes. How is that to be enforced? The law can do it at the moment, and I suggest that is what will happen. Any person aggrieved can apply to the High Court for a judicial review, and the judges will then inquire whether the local authority is misusing its powers, and if it is misusing its powers then the High Court judge can grant an injunction or deal with it as he thinks right.

Now what I ask about that is: who is going to bring those proceedings before the judge? If it is the party in power in Parliament which has offended, I imagine the Attorney-General or the Solicitor-General might, but any ratepayer can. As my noble friend Lord Chalfont suggested, let a voter do it. If it was propaganda in favour of the Conservative Party, let a ratepayer or a voter for the Labour Party complain, or vice versa.

Any person interested or aggrieved should be able to go to the judge and say, "This council is disobeying this Act of Parliament. It is giving publicity for party political purposes, and it ought not." That is the remedy. But I would hope that it would be that any ratepayer or any voter interested in such a matter could bring it before the court.

That brings me to the next point. If that is so, the position must be put precisely and definitely to the judge. If he is given an overall discretion in imprecise terms, he is bound to decide in favour of one political party or the other. He would at once be brought into political controversy. It is fundamental, to my mind, that everything should be clear and precise so that the judges have to do nothing but interpret the words of Parliament as they have been set down.

I must say a word, I am afraid, about the code of practice. It is no doubt well intentioned to give guidance to local authorities about what publicity they should give, or the like, but is has no force of law. The judges cannot do anything against the local authority if they say, "Yes, we had regard to that code. We don't think much of it. We don't think we should give much weight to that. We will have regard to it. We will give a little weight to it. We will give much weight to some other things."

The judges would be in great difficulty in going by that code unless the following additional words are put in: shall have regard and give due weight to certain proposals. You can have regard to something in the code, but a judge will say, "I don't think much of it. I will have regard to it, but that is only a little matter". That is having regard to it. But if you are going to make this code work then you ought to have in it the words, shall have regard and give due weight to". Then if the local authority have not given the proper weight to the matter, the judges can interfere.

What I have said is really a plea for the enforcement of this Bill. It is a good Bill in all its objectives, but for goodness sake make it clear and precise so that the local authorities, and in particular the judges, can interpret it as it should be, and is intended by Parliament to be, interpreted. I fully support the Bill, but I hope that in Committee stage we can make it much better than it is at the moment.

6.5 p.m.

Baroness Faithfull

My Lords, like the noble and learned Lord, Lord Denning, I support the objectives of this Bill. However, I agree with my noble friend Lord Boyd-Carpenter and the noble Lord, Lord Chalfont, that it is a sorrowful day when it has been necessary to introduce a Bill such as this into your Lordships' House. It seems to me sad that it is necessary to stem the tide of party politicisation in local government instead of having, as we have had in the past and as is still the case in many local authorities, a sense of great service to the community.

I agree with what I imagine is the intention of Clauses 2 and 3 in Part II of this Bill, but surely the wording is such that the interpretation in practice and in law is far from clear and would result in stifling the democratic process in the arena of local authorities; and I include parish councils and voluntary organisations. Perhaps I may ask my noble friend the Minister whether the intention behind these clauses is to prevent local authorities or voluntary organisations from publishing information or campaigning for the sole purpose of either supporting or denigrating the policies of any one political party.

Like the right reverend Prelate the Bishop of Gloucester, I am concerned on behalf of the voluntary organisations. If a voluntary organisation or local authority carries out its work with integrity and the intention only of serving its clients, then inevitably it makes known the needs of its clients and publicises how such needs can be met. In some cases it may accord with the policy of the government of the day, or with the opposition of the day.

Last week there was an excellent debate in your Lordships' House on a report on housing by a body chaired by His Royal Highness the Duke of Edinburgh and instigated by the National Housing Federation. My noble friend the Minister, Lord Elton, replying to that debate paid tribute to some of the recommendations, but he disagreed with others and said that they were not in accord with government policy.

Under this Bill as drafted where would the National Housing Federation be, or indeed His Royal Highness the Duke of Edinburgh? I suppose that both would appear before the noble and learned Lord, Lord Denning, or his colleagues now in office. The same might be said of publications by Shelter; Age Concern; Mind; and the many voluntary organisations dealing with children; parish councils and local authorities. They communicate with the public and with governments, and the two-way communication between government, local authorities, and the community is one of the ways that we make good laws.

I quote from the Charities, Trusts and Social Welfare Report of 1979 by Professor Chesterman. He said: … charity and politics are inextricably intertwined. In consequence of failure to appreciate this or to take full account of it, most of the recent official recommendations simply seek to 're-draw the line' between charitable and political activity by developing variations on the theme that 'politics' is permissible if it is subordinate to 'charity'. In fact, while not all charitable activities are political in the same ways and in the same degrees, any assertion that there is a hard-and-fast dividing line between the two forms of activity, even in theory, is itself a political affirmation rather than a statement of abiding truth". Surely politics should always be charitable, and charities and local authorities must sometimes be political. But the intention should surely be to serve the needs of clients and the public and not to use those needs to promote or denigrate a party political policy.

6.10 p.m.

Lord Sandford

My Lords, I intend to follow the advice and precept of my noble friend Lord Boyd-Carpenter, to keep off the detailed clauses of the Bill and only to reflect briefly on the context in which it is being presented to us. I invite your Lordships to reflect frequently on this context when we reach Committee stage so that we may better amend the Bill.

Local government is not in good shape and relations between central Government and local government are in deplorable condition. I grieve about that every bit as much as my noble friend Lord Bellwin. But grieving is not enough. We have to find a way to put matters right.

The fact is that over the last 11 years local government has stumbled under a wholly flawed system of finance. It was therefore with great relief that I heard my noble friend last week announcing that the Government are now prepared to tackle this fatal and fundamental flaw. My view is that they have adopted the right diagnosis. We must now make sure that they select the right cure. However, those are all matters for another day.

What is relevant for today and for the debates on this Bill are two serious faults which have flowed directly from this failure and neglect of successive Governments to deal with local government finance over the past 11 years. They are of a very different kind. On the Left there is the cancer of the Militant Tendency. My noble friends Lord Boyd-Carpenter and Lord Bellwin and the noble Lord, Lord Chalfont, all set out in clear and graphic terms the damage that that cancer is doing. How it can best be dealt with I shall come to in a minute. When my noble friend mentioned 13 councils in this connection I imagine he was referring to those which have wholly succumbed to the cancer of Militant Tendency and are entirely in its grip. I hope he will forgive me if I say that to leave it at that is to risk underrating the harmful effect.

I like to believe that in the ADC I have only one council that has wholly succumbed to Militant Tendency, but that is not to say that it is not around in substantial strength in large numbers of councils, seeking all sorts of ways to bring its baleful influence to bear. We are dealing with a substantial phenomenon.

On the Right, and to some extent as a result of that cancer on the Left, and also as a result of many other things, we have a haemorrhage. By that I mean the steady desertion by businessmen from local government. Local government over these years has steadily been deserted by the businessmen who used to be the mainstay of local government. Some have left out of disgust at the antics of Militant Tendency, others have left out of despair at the time-consuming complexity which now besets local government, chiefly in the area of finance, as a result of the 12 Bills that we have had trying in vain to deal with the symptoms of this fundamental flaw, and others have left in dismay at the extent of interference and dictatorship by central Government in areas which ought to be left to those who have been elected locally to deal with. We have to deal with both these: the cancer and the haemorrhage.

In my view the surgery, which is the only remedy for dealing with Militant Tendency, can only be applied by the party opposite. It is, alas!, in their councils in which Militant Tendency has thrived and is now latched on as parasites. It is their job and it can only fall to them to get rid of it. We must ensure that we design a Bill which helps rather than hinders them in their task.

I should like to take this opportunity of saluting my fellow president of the AMA and his other more sensible friends (he has more sensible friends than we sometimes credit him with) for the work they are doing to root this horror out of local government. It is far too late and it is far too little, but they must persevere. I do not think anyone else can do it.

Turning to the haemorrhage on the Right, I wish I could salute the CBI, the Institute of Directors, the chambers of trade and the chambers of commerce for what they are doing to deal with the haemorrhage. I have to say that I can hardly detect that they are doing anything. They will have to attend to this because dealing with the Militant Tendency on the Left, dealing with the matters that this Bill deals with, and all the other issues that a proper form of local finance might do, will not in themselves be enough if the people whose vocation it is to create the wealth in the local council areas do not return to take a direct part in the running of local government. It is absolutely essential. One of the worst features about Militant Tendency is that the only expertise its members possess is an ability to spend other people's money.

The key characteristic and attribute of the businessmen in local government is that they understand and appreciate the factors that lead to the creation of wealth. We need them in local government just as much as we need to get the cancer of Militant Tendency, which is causing us so much trouble, out of local government.

It is with those reflections that I hope your Lordships will consider the details of this Bill. The Association of District Councils, which is still Conservative controlled, and the London Boroughs Association, which is also Conservative controlled, have both voiced their objections and your Lordships will have seen in detail what they amount to. Briefly, they amount to support for the intentions of the Bill and support for the Widdicombe Committee, but not support for the Bill in its present form. We shall have to work very hard and carefully to get it right.

6.17 p.m.

Lord Stallard

My Lords, I begin by apologising as I may not be able to stay to the end of the debate, but I shall do my best to remain. Previous speakers have mentioned the 12 Bills produced by this Government since 1979 aimed directly at local authorities. In reply to a Question by Dr. Cunningham in another place the Secretary of State for the Department of the Environment gave a list of 26 pieces of new legislation involving local government—in column 476 on 9th December. Of those 26, 14 apply directly to local government finance. That legislation has been produced by a party in Government who most of us will recall made bitter attacks when they were in Opposition against too much legislation and too much government interference. It comes ill from them in that context.

Many of those 14 Bills have been rushed, panicky Bills, cobbled together to deal with a symptom of a wider, more severe problem. This Bill is no exception. We have already mentioned the Bill abolishing the GLC and the metropolitan counties. We could mention rate-capping. A previous speaker mentioned the possibility of a further rushed Bill on poll tax to deal with yet another symptom of a serious problem, the problem of domestic rates and that aspect of government finance. So the list of these kinds of panic measure to deal with symptoms goes on. Now we have this Bill. Clause 2 is the main object of criticism in this Bill. That is intended to prohibit political publicity and otherwise restrain local authority publicity. I would suggest that, if we had the time, it could take years of discussion in Committee just to get definitions of that one clause and all the attendant pieces of it. Thus again it is a kind of rushed, blurred attempt to deal with what may well be some exceedingly real problems.

There are those who have argued, which argument I certainly support, that we have enough legislation, if we could implement it or even bring it up to date, to deal with the many of the aspects that are being dealt with in this Bill, so we do not need another legislative steamroller, as it were, to crack a few nuts—because that is what is apparently being done. It is not my intention to defend all the practices that were outlined by the noble Lords, Lord Boyd-Carpenter, Lord Orr-Ewing or Lord Bellwin. I certainly do not intend to defend the practices that they outlined. Neither do I intend to reply to all the examples nor to match them with other examples that exist, though I may perhaps mention a couple, if only to illustrate the futility of that line of approach to this particular problem.

For instance, we know that Westminster City Council spends a higher proportion of its budget on publicity than does the GLC, and those figures are available. Councils like Wandsworth have mounted very high profile campaigns on issues like the sale of council houses. One can recall that Wandsworth actually produced blue hats and badges that had on them, "Wandsworth, No. 1 for council house sales", and mounted a campaign including cash prizes for potential house buyers.

I do not want to go down that road. There are many more examples. If one wanted to take sides, one could say, "You give one on your side and I'll give one on mine", and so on. That is not the approach and certainly not my approach. I say that what we need is the updating of the many excellent inquiries into local government that have taken place, inquiries and commissions that took place in the 1960s and the 1970s, like Redcliffe-Maud, like Layfield, and like Wheatley and Bains. We really should update them and relate them to the new and developing role and purpose, and financial and administrative structures of local government, as well as the relationship of local government to central government and the public accountability of both.

That is what we need. Then we could bring up to date existing legislation, or introduce new laws, after careful consideration and debate. I thought that paragraphs 114, 115 and 116 of Widdicombe, really laid the basis for that kind of discussion and debate and for proper legislation at the end of it.

Unfortunately, this Government have taken the road to more and more centralisation of these issues. That is a new situation, among others, which needs to be inquired into. How much centralisation should there be? When do we say that that is enough? How much more autonomy should local authorities have? That is a very important and vast area that cannot be dealt with by panicky, instant legislation. Thus we must look at that. To aim to prohibit, as does this Bill, publicity, and otherwise restrain local authority publicity, without first examining the effect on our local democratic institutions and making constructive changes, is in my view to misread the present state of local government. I think anyone who reads the Widdicombe report, cannot come to any other conclusion. Widdicombe says in a number of paragraphs that that is what it is about.

A major criticism that I certainly have of this Bill relates to its origin. There was no manifesto commitment to do this. Therefore there was no electoral mandate to do this. There was no measurable public demand to do this. I have heard it said that it was as a result of public demand, but again, if we go back to the Widdicombe report, on page 14, paragraphs 52 and 53 of that report, after discussing a number of surveys that have taken place on these issues, says: We believe that it would be unwise to draw any general conclusions about the nature and degree of public concern from any of these surveys".

Lord Graham of Edmonton

My Lords, will my noble friend give way?

Lord Stallard

My Lords, yes, of course.

Lord Graham of Edmonton

My Lords, does my noble friend not agree that, if it was the case that there was a public clamour to get rid of these practices, the democratic way would have been to allow elections to proceed in the metropolitan counties and the GLC and then we should have seen whether people wanted to abolish those authorities for those purposes?

Lord Stallard

My Lords, of course, I entirely agree, and I think I have said so on a number of occasions during debates, as have many Members of your Lordships' House.

Perhaps I may continue with the examples in the Widdicombe report of public support or the lack of it. Paragraph 53 goes on to say: The numbers of complaints about political advertising"— these are complaints to the Advertising Standards Authority— increased from 100 in 1983 to 177 in 1984. Of these, 22 in 1983 and 52 in 1984 concerned local authority material". However, the report goes on to say: We noted that 62 of the 177 'political' camplaints in 1984 concerned the Kleinwort Benson advertising campaign on the flotation of British Telecom". That is balancing one against the other, as I have said. Thus there is no evidence, even in this interim report from Widdicombe, of widespread public demand for this massive steamroller with which we have been presented tonight.

Then what are the origins of the Bill? If it did not come from any of the sources that I have mentioned, where did it come from? It came from an announcement at the Conservative Party Conference last year. It was announced at that conference. We all know the hysterical atmosphere that surrounds those conferences, and the competition for standing ovations. This was one of the items that came from that conference. I am no cynic, but it certainly gave me the impression that the issue had already been prejudged. It gave me that impression and it must have given many others the same kind of impression. There was a request from the Secretary of State for an early report, an interim report. He could not wait for Widdicombe to report: he wanted something immediate. Again, that must raise in the minds of some cynics, though not mine, some further suspicions as to why he now needs an interim, rushed report. He alleged that it was because of the use made by some local authorities of discretionary powers to engage in overt political campaigning at public expense. That demand for an early report of course meant that consultation had be to curtailed on that part of the Widdicombe considerations. This request for an early report from Widdicombe was criticised by almost every expert, and some not so expert, but everybody involved in the whole field of local government. Again perhaps I may quote from Widdicombe. I can assure your Lordships that the paragraph is relevant so far as this question of an interim report is concerned. In my view, the need for legislation was set against that totally political background of the Tory Party Conference, rather than arising from a need for a general rethink about the whole issue surrounding local government—something for which there is massive public and local government support. There is support for that kind of consideration in the new circumstances that we find outlined throughout this report. The Government's insistence on an interim report on one aspect of the problem will prove, in the view of most people who understand these matters—and the noble and learned Lord, Lord Denning, has already mentioned a few—an expensive mistake. Of the five members of the Widdicombe Committee, one was moved to issue a note of reservation and another published a memorandum of dissent. That left only three and we do not know whether they were totally in favour of the interim report. So the whole basis is not as strong as we are led to believe.

Most people asked: "What is all the rush? What is all the hurry about? Why do they need it like this? What are the Government worried about?" We do not have to look far for the reason for introducing this rushed, badly drafted legislation, together with the atmosphere created by ministerial speeches, press comments, television reports and so on. The reason is the local elections in May. It was essential to get some kind of censorship, some kind of gag on local authorities who were known to be hostile to national government policies. That is not surprising. That has happened under most governments. But it was necessary for a whole number of reasons to gag that kind of publicity, and there are views about that. Certainly that to me is the real reason why this was rushed, why the interim report had to be brought forward and therefore why we have this piece of legislation this evening.

The Government themselves had already given an undertaking to Widdicombe that they would not prejudge the outcome of the full report in any way. But nobody believes that now. How can they believe that the outcome of the Widdicombe Report will not be prejudged by this Bill and by the comments that we have heard in this House this evening? How can it not be said that the end result of the Widdicombe reporting session will be fair and not prejudged? It is impossible. So the Government have broken that pledge, among others, that they gave to Widdicombe and it is quite disgraceful for any government to act in that way.

We have known too of the massive opposition to this Bill and it is no good trying to downgrade the quality of the opposition. The opposition comes from all those who spend their whole lifetimes in local government work. Lawyers and chief officers have all joined with their associations. If I had time I could read out a whole list of those from town clerks and chief executives right through, who are worried about the outcome of this Bill if it goes through in its present form.

We know—and I have given one or two examples—that there are many useful campaigns, but if they are repeated or if similar campaigns are mounted they will be banned under this Bill. If I may give another Westminster example, the voluntary organisation in Westminster, which is funded partly by Westminster City Council—I think that the president is the leader of Westminster City Council—published material on the effect of the abolition of the GLC on voluntary organisations. I happen to agree with lots of it. But that kind of report and activity will be banned under this Bill and there are many others who will be affected, right through to the campaigns on welfare rights.

The campaign for co-operation with the police could be banned under this Bill, as could many others. Indeed, because of the proposals to narrow down Section 142 of the 1972 Act, which is another part of our criticism, councils will in general be unable to fund activities in areas where they have no function. That is not just narrowing it; it is almost entirely destroying the principle of it.

So I say that the Bill is an attempt to silence local councils from the spring of this year, gagging them in their run-up to the local council elections in May. Otherwise there would be no need for all this rush and hassle. However, this Government have already proved to me in a number of Committee stages in this Chamber that they are not listening to anyone. After the presentation of a Bill, it is almost as if it were sculpted in stone. They are not listening to anybody at all. Nothing in any Bill can be changed. That is the general impression that I get after the last couple of years in this House. The noble Lord, Lord Boyd-Carpenter, shakes his head. He is one whom I have never heard criticise any Bill that has come forward so far—

Lord Boyd-Carpenter

My Lords, will the noble Lord allow me to intervene? This House has on many occasions carried amendments to government Bills, including the major Local Government Bill of last Session. In so far as his personal argument to me is concerned, he may care to recall that on the nationality Bill I carried an amendment against the Government giving British citizenship to the citizens of Gibraltar.

Lord Stallard

My Lords, I stand corrected so far as the noble Lord is concerned. I was not present in the House when he moved that amendment or I would have supported him. I was certainly not present when all those other marvellous amendments which the noble Lord mentioned were carried. But even the amendments to the Local Government Bill were not carried with any support from the Government. In no way would the Government listen to any punctuation mark being moved on that Bill; nor will they on this Bill—

Lord Elton

My Lords, I really must put the record straight. I shall not go into the detail, but I stood at this Box for hour after laborious hour. If the noble Lord thinks that nothing said on the other side of the House had any effect on anything written in the Bill he is greatly mistaken. If he were right, perhaps my reputation in the Conservative Party would be greater than it now is!

Lord Stallard

My Lords, I do not want to damage the noble Lord's reputation in the Conservative Party. I am sure he can do that quite well himself! I do not withdraw anything I said about the Government's attitude to Bills in Committees that I have witnessed and sat on in this Chamber. There is no willingness, there is no give, there is nothing at all. If amendments are forced through that is good, but it is no good trying to get credit from a situation after the Government have been forced into it by the weight of opinion here or elsewhere. So in spite of that, and because of the importance of the issues involved to local government and to our local democracy by this Bill, I shall do my best with others to try to amend and make it a better Bill before it leaves this House.

6.37 p.m.

Baroness Gardner of Parkes

My Lords, like many other speakers tonight I regret that I shall not be able to stay because I am committed to duties for the Inter-parliamentary Union. I try never to leave a debate in advance, but I feel that when one is meeting a delegation from another Parliament abroad one must honour that commitment. I was rather amused by the noble Lord, Lord Stallard, saying that this is all rush and hassle, because he certainly did his best to slow things down a bit with 20 minutes on the monitor by the time he sat down. I am hoping that I shall be able to be a little more brief.

I welcome Part I of this Bill, which has received little comment here today because it is not a controversial part. But as someone who last year was involved in absolutely ridiculous, expensive and time-wasting play-acting across the water at County Hall, where we had three full meetings in order to decide whether or not to set a rate, and we as ordinary members had to pay out of our own pockets for a legal opinion as to whether we had to be there to set a rate, I can tell your Lordships that it is a very good thing to have it laid down clearly for councillors that there is an obligation to set a rate and by what date that rate has to be set. So I welcome that aspect of the Bill.

I am more concerned about the other parts of the Bill, because I am now very aware of the points made by the noble Lord, Lord Chalfont. I know that the Labour Party at County Hall is meeting behind closed doors, plotting what to do with the £150 million to £200 million which we know is surplus at the moment at County Hall. That is ratepayers' money and the ratepayers should have some say in what happens to it.

The noble Lord, Lord Chalfont, mentioned the minutes of the forward funding sub-group meeting on 10th January. I too have a copy. There were 28 people present but there was certainly no sign of Alan Greengross, the leader of the Conservative side there. So far as I can see, there was no Conservative representation at all. It was a caucus meeting deciding those matters. Even up to this moment we still have no idea when we will see the papers about what is to happen to that very considerable amount of money.

I believe that next Tuesday, 11th February, is the crucial day because we have only two more meetings of the Greater London Council—on 11th February and on 27th March. We have already received notification that 27th March will be a ceremonial day only—more or less a conclusion—so the real business all has to be wound up on 11th February. I believe that those papers will come to us at the very last minute. If, as I believe will be the case, that money is to be employed for purposes outside the law, our side will take action, but time will be running out and time will be desperately short for us to be able to deal with that matter. An important point was made by an earlier speaker. Who as a private individual can afford to take on the GLC? The GLC has unlimited funding for its side of any legal action but ordinary ratepayers have very little to support their side and it could be a very costly matter.

I think it very important in terms of this Bill today that whatever is brought forward in Part II, which is the controversial part, should be extremely clear and should also be simple and not cumbersome or costly to implement. This is the problem now. Councillors are much more interested in whether or not they will be disqualified or surcharged than they are about anything else. It really does not worry them too much what happens to the council money: that is not their money; that is ratepayers' money. Because of that they are quite happy to spend it in any kind of legal battles. I say this to the Minister. It is important that whatever is done in this legislation should be clear and should enable a ratepayer or someone really concerned to follow it up to see that money is not being wasted on something that is against the interests of the public.

Points have been made by so many speakers about the very fine line between information and publicity. I agree that it is a fine line. People do need to be informed; and certainly in terms of the help that would be available they need to be clearly informed, because so many of the leaflets from the DHSS, even though I know the department is now getting awards for plain English, are still fairly difficult for a lot of people. But there is a clear point at which any and all of us see that resources are being used purely for party political purposes. I do not have to remind noble Lords here of the £10 million spent on the awareness campaign last year by the Greater London Council. That £10 million could have done quite a lot for the ratepayers of London, but spent in the way it was it helped those firms who had the contracts but I would not say it did very much more than that.

My appeal to the Minister is to make something simple and easily enforceable. I hope also that at this moment the noble Lord will bear in mind what might be happening on 11th February, and that he will think about London ratepayers even at this very last minute.

6.43 p.m.

Lord Ellenborough

My Lords, I support this Bill. My noble friend the Minister may be interested to know that the National Union of Ratepayers Association, of which I am president, also supports the aim of the Bill.

It is certainly a sad commentary on the state of affairs in local government that this Bill should be necessary. It is a pity that, despite the publication of the long awaited Government Green Paper Paying for Local Government, the actual reform of the proposed rating system is still a mirage on the horizon. Until such time as all who are able to pay a contribution towards the cost of local government do so and are aware of doing so, I am afraid the abuses of local government highlighted in this Bill must to some extent remain. Very few indeed of the really spendthrift and irresponsible local authorities would be re-elected today if there were closer relationship between those who vote and those who pay the bills.

The object as set out in Part I of the Bill is irrefutable. It is totally unreasonable to expect ratepayers to pay the bill and then suffer the consequences of irresponsible behaviour of a minority of councils which indulge in a kind of political brinkmanship and refuse to set a rate by the start of the municipal financial year. This causes confusion and chaos and an utter waste of ratepayers' money.

Part II of the Bill, which is the vital part if rather controversial, will need some amendment and clarification in Committee. The grey areas must be blotted out. It must be, as the noble and learned Lord, Lord Denning, said, "clear and definite". There is no doubt at all that there is a problem which needs to be dealt with as indicated in the Widdicombe Inquiry. Far too many councils are producing material of a highly partisan nature, published more for political advantage than informing the electorate. The intention of the Bill is to prevent this. It is clear that it is not going to be easy to achieve it without endangering a local authority's obligation on occasions at least to explain to the public what it is doing in various spheres as a result of actual or impending legislation.

The problem lies in where to draw the line in defining material which is intended to win support for a particular political party, and which should therefore be banned under this Bill, without at the same time affecting a local authority's right to give information concerning its existing functions and responsibilities for the benefit of its electors. It is essential to ensure that local authorities spend money on publicity relating to their functions. If there is to be a code, it must be effectively enforceable and must establish beyond doubt what is proper. The difficulty is that if there is the slightest hole, flaw or defect in the Bill, it will be got through at once. It will not take a Derek Hatton to do it: a coach and horses will be driven through it in no time at all—indeed, before one can say "district auditor".

Far too much of ratepayers' money is being spent on quite unacceptable political propaganda which is not wanted. Instead of helping the less well off and paving for essential services, this money is simply being squandered. This is much resented by ratepayers who want to halt and reverse the appalling growth in political advertising as instanced by the mass of so called newspapers, publications and litter that find their way into our letter boxes—indeed, "litter" is the right word. Some councils are actually cutting down the collection of litter from the streets so that they can afford, on the rates, to publish more litter which comes into our letterboxes. This is a most objectionable development in local government.

Another cause for concern is that there are far too many so-called voluntary groups that are set up as front organisations for thinly disguised political propaganda, not least in London by the more extreme Left-wing councils. This has been mentioned this afternoon by various noble Lords, including my noble friend Lord Orr-Ewing who has given some examples.

I closely followed the proceedings of this Bill in another place as I was at some pains to see how many Conservative controlled councils were castigated by Opposition Members. I could find only two: one was a derisory reference to Wandsworth and there was also a reference to Westminster. Both these councils were mentioned this afternoon by the noble Lord, Lord Stallard, who very wisely kept off the subject of his own council of Camden.

On the other hand, the Labour controlled councils criticised by Government and Alliance Members of another place were depressingly numerous. It was not just the GLC and the loony Left-wing London boroughs—of course, Liverpool was mentioned—but many other councils which are not normally in the limelight, councils that one does not usually hear about. One expects them to be quite moderate—councils such as Newcastle, Leeds, Leicester and many others; one could go on.

A particularly virulent propaganda on the rates is expenditure on matters totally outside the confines of local government. That point has also been touched upon this afternoon. I refer to such matters as peace studies, the Troops out of Northern Ireland campaign, anti-nuclear material, and so on. Two noble Lords have mentioned Professor Regan's study in which he disclosed among other things, that the GLC alone spent £3 million on anti-nuclear material.

I often motor up to London and when I travel through Lewisham I am informed by posters and placards that I am in a nuclear-free zone. However, I have yet to see as I enter Bromley or Kent that I am entering an area that is protected by NATO or by an independent nuclear deterrent, or some such infantile slogan as that. That sort of thing is all wrong. That political propaganda on the rates, one sided or not, should be paid for by ratepayers of all political persuasions is to be thoroughly condemned. The public needs to be more aware of the abuse by councils of political campaigning on the rates. I support this Bill.

6.51 p.m.

Lord Allen of Abbeydale

My Lords, I can give an assurance at this stage of the debate that I do not have all that much to add to the points so admirably made by previous speakers—in particular, by my noble friend Lord Hayter, what now seems rather a long time ago.

I was formerly chairman and I am currently vice-president of the National Council for Voluntary Organisations, and I am chairman of MENCAP. I should like to add just a few comments in view of the anxieties that Part II of the Bill is still causing voluntary organisations, notwithstanding the amendment that was made to Clause 2 in another place.

Like everyone else who has spoken, I am against the use of ratepayers' and taxpayers' money for party political purposes. However, to achieve that end it seems to me—again, like previous speakers—that the Bill goes too far beyond the Widdicombe recommendations and opens up a number of doubts that extend beyond drafting points to be explored in Committee. Anyway, as I recall, the noble Lord, Lord Boyd-Carpenter, said that it would be of some advantage if such doubts could be paraded at this stage.

As has been pointed out, Part II of the Bill at least does not say anything about remedies. I have assumed that the thought is that an aggrieved party could go to the courts for a judicial review—not a particularly cheap exercise—or make representations to the district auditor. That latter course was one that my noble friend Lord Chalfont viewed with something falling short of enthusiasm.

If such an issue came before the courts, some of the questions may not be all that easy to determine. There is the test of reasonableness both in Clause 2(1) and in Clause 2(2)(b). There would be questions about what is political and what is a political party—although I believe that there are some precedents on that issue. There would also be questions on how to assess public support and a number of other questions touched upon by the noble Lord, Lord Elystan-Morgan.

I am conscious that from time to time the courts have to determine for the purposes of charity law whether a charity is designed for political purposes and can therefore not be accepted as being for the public benefit in the manner that the law regards as charitable. In that context it is the courts themselves that lay down the rules. They are not enforcing statutory provisions as they would be in this case. I must say as an aside that I hope that it does not occur to anyone looking at this Bill that comparable statutory provisions should be made for charities.

Leaving that apart, I know that everyone would agree with my noble and learned friend Lord Denning's remarks about the judiciary not becoming involved with political issues and being required to rule on matters of a political opinion. Although it is not possible to speak with any certainty, I confess to some doubt—like my noble and learned friend—whether that danger can be altogether avoided by the Bill in its present form.

There is then the uncertainty of certain provisions, particularly those in Clause 2, to which a number of previous speakers have referred. I am well aware that in another place the junior Minister said: I reiterate that it is only overtly political publicity that will be caught by the provisions of this Bill".—[Official Report, Commons, 22/1/86; col. 330.] Try as I might, I cannot find in the text of the Bill itself, whatever in the end might be said in the code of practice, any reference to "overtly political publicity". One cannot rule out the possibility of the courts being faced with applications from aggrieved ratepayers or from aggrieved political parties relating to issues that were not overtly political but might be argued nevertheless to fall within this Bill as at present drafted.

As regards voluntary bodies, one need look no further than the example to which a number of speakers have already referred, of those bodies concerned with racial equality. Any publicity material that they issue would no doubt be argued by the National Front to be likely to affect adversely public support for that political party; and I feel in no doubt that the National Front would in law be regarded as a political party.

In a sense, it could be worse than that. We are talking about the possibility of cases coming before the courts, but in the present atmosphere some local authorities would be extremely cautious about taking risks and could easily withhold support from a voluntary organisation on the argument that although the activities of that body were possibly perfectly all right and within the law, there was just a possibility that it might be challenged; and it would be simpler and better not to take the risk of becoming involved.

There is one other totally unrelated point on which I would welcome the Government's views. Seeing the noble Lord, Lord Broxbourne, in his place this evening reminds us that he has before this House at present a Bill to incorporate the European convention for human rights into our laws.

Lord Broxbourne

My Lords, if the noble Lord will forgive me, I would rather he described it, in the terms of the Long Title and the Memorandum, as a Bill to bring within the jurisdiction of the British courts matters of human rights and fundamental freedoms.

Lord Allen of Abbeydale

My Lords, that shows what suffers as a result of trying to use shorthand and trying to speak briefly. I entirely accept the noble Lord's point. Nevertheless, that caused me to look at Article 10 of the European convention. That provides that everyone should have the right to freedom of expression. It goes on: This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. As always, the exercise of these freedoms is subject to various restrictions permissible in a democratic society; but it is not crystal clear that any of these exceptions actually cover what is provided for in the Bill.

I am sure that the Government have a perfectly good answer as to why this Bill is consistent with the provisions of the article, and that we are not at risk of endless arguments at Strasbourg or, if the noble Lord has his way, in the courts in this country. However, it would be interesting to know what that answer is.

I promised to be brief and I shall say no more than that I end by reiterating that there is much anxiety among the voluntary bodies. I believe that that is not an anxiety to be lightly set aside.

7.1 p.m.

Baroness Elliot of Harwood

My Lords, I have listened with enormous interest to all the speeches made this afternoon, and more particularly to the noble Lord, Lord Allen of Abbeydale, whose experience is fascinating and whose speech I found extremely interesting.

I intervene for only a brief moment because I have spent so much of my life in local government—29 years on the county council—and the rest of my life always working for voluntary organisations. While this Bill is admirable in many ways some of us—and I am one of many here—are a little worried about some of the measures in Clause 2. I should like to say at once that I very strongly approve of the first point, which is to fix a date for the rate support grant proposals as has been done in the Bill. I well remember when I was chairman of local government committees that one had to be quite sure that all one wanted to go forward for approval for grant aid was ready by November so that it could be approved before the end of March. That was extremely important and I am glad that it is now in a Bill, because it means that everyone has to conform.

I also agree with the clause which refers to the selling of mortgages, and the new definition of that in the Bill. I am sure that it is very wise and also very fair.

On the subject of voluntary organisations, I should like to make one or two observations. I entirely agree with the principle that local authorities should not use their money, nor the voluntary organisations which they grant-aid, for any political purposes. I absolutely agree that voluntary organisations should not engage in party political propaganda. There are voluntary organisations for that purpose. All right, let them be; but they are not the sort of voluntary organisations that those of us who have been working in voluntary organisations believe should have support from the rates.

It may be difficult but it is quite possible to distinguish between what organisations are political and what organisations are designed to help local authorities in the work that they want to do. I spent a great deal of my life working for youth organisations. Those organisations were at that time all working in the same spirit as the education authority from which they received their grants; namely, they would do anything which would help young people when they left school, or perhaps in the last year of school, in the main community. That is an excellent and admirable way in which local authorities can help voluntary organisations.

I remember—I think it was just before the war, in 1938—when the first paper from the Department of Education came out urging local education authorities to be prepared to help voluntary organisations. It was a very important moment because no education authority in those days had any youth committee or any method of helping voluntary organisations. I spent a considerable amount of time in those years just before the war, and during the war, urging local education authorities to help the voluntary organisations. Today there is not a single local authority which does not have a youth committee and does not help with youth work, all of which I think is admirable. It means, of course, that the voluntary organisations, certainly on the youth side, are now three, four or five times the size they were 20 or 30 years ago. That could not have happened without the support of the local authorities.

There are many other voluntary organisations which are also vital—for instance, those connected with social work. I am thinking of all that is done for social work committees by the Women's Royal Voluntary Service and other organisations, as was mentioned by the noble Lord, Lord Allen of Abbeydale, dealing with MENCAP and handicapped people of all kinds. If one is chairman of a social work committee for years, as I was, one sees what the voluntary organisations contribute to that work. It is simply tremendous. Naturally, we were only too delighted to give what help we could, although it was only in a very small area, so that that kind of voluntary work and service should continue.

That work was enormously valuable and considerably helped the local authorities. If the local authorities had had to provide all that it would have cost far more; but we got all those services from the different societies and when those societies asked us for help we tried to give it to them. However, the greatest help by far was what they did for us voluntarily. Therefore, it is extremely important that whatever clauses are in the Bill dealing with voluntary organisations should not hamper that work in any way because that is an admirable way of using the rates—very much better than many of the other ways in which our rates are used.

Clause 3 contains two measures which affect voluntary organisations. There is a reference in Section 88 of the Local Government (Scotland) Act 1973 to change in the information relating to the functions of a local authority rather than information as to local government matters affecting the area. This would seem to prohibit a district authority from finding information on matters like drugs, matters affecting ordinary people in the community or careers advice, which is often given, and helping to deal with those matters which I think are important and where the local authorities could help. Publicity by voluntary organisations to counter some of the evils of the day should not be treated as political propaganda but as bringing out some of the important responsibilities which fall on voluntary organisations, work for which the grants they receive are essential.

I have in mind, for example, all the problems of today in connection with drugs, with much of this disagreeable cruelty, and so on. Voluntary organisations can, with their publicity, help stop these things just as much as local government can. I do not think that such matters should be treated as political. I believe that with some careful redrafting of these clauses it would be possible to draw a distinction between information vital to preserve the good of the community and propaganda designed to influence people politically. I think that one can make that distinction; after all, many of us—and I am only one of many—have been engaged in both independent voluntary organisations and in political propaganda. The two could be kept perfectly separate. Not for one moment did I allow any of my political feelings to impinge in the case of voluntary organisations. It can be done. But of course if people want to distort the relationship they can do so, and that is where we have to be very careful.

I think that all this work which has been done by the social services and by the voluntary organisations is something which we must protect, and I very much hope that, when we are dealing with this Bill in Committee—I think we really all agree on this—the Government will be able to find some wording which can be brought forward as amendments which they will agree with and which will really meet the desires of almost everybody in your Lordships' House.

7.10 p.m.

Baroness Vickers

My Lords, I should like first of all to make my apologies for not having been here for the whole debate but I had to attend a Red Cross blood transfusion meeting which went on rather longer than I had anticipated. However, may I say how pleased I am to follow the noble Baroness, Lady Elliot of Harwood, because we worked together both before and during the last war, and she did a magnificent job. The only points I wish to make now concern the question of local government officers.

This Bill has caused great concern in local government, and after all it will be the local government officers who will have to pay the price. As we know, it was designed to prevent some of the excesses of the Greater London Council but it goes far wider than that. It also goes far wider than the recommendations of the Widdicombe Committee which gave advice to the Government on the problem. The draft code to accompany the Bill would go far beyond the restriction of expenditure. It would restrict freedom of speech and the traditional democratic role of local government to act as spokesmen to central Government on behalf of their local inhabitants.

Then, we have the words "publicity", "publish" and "publication", which refer to any communication in whatever form which is addressed to the public at large or to a section of the public. There is the question of the definition of "publicity". It is very wide indeed. It is not clear whether it would catch a television interview by members of the local authority, or would include going to "Any Questions" and answering questions, which after all is a political matter. Then the words in Clause 2(1) could well make a lawyers' paradise. Uncertainty in any law is very bad. Therefore I should be very grateful if the noble Lord who will reply can give me any ideas about this, or perhaps he will write to me.

The Bill also affects local authorities' powers under Section 142 of the Local Government Act 1972 (which was mentioned by the noble Baroness, Lady David) to provide information on matters relating to local government. The Bill changes this to "information relating to the functions of the Authority". "Functions of" is far narrower than "matters relating to" local government. There are some important activities of local authorities which cannot be categorised as "functions". Economic development initiatives, which both Government and local authorities are so keen to see promoted, are a case in point, as there must be doubt whether publicity aimed at attracting industry and commerce would be permitted. This is a very important point for local government.

Campaigns against Government policy on important issues of concern to particular local authorities and to the welfare of their constituents could be prevented. The Association of Parish Councils is particularly concerned by the limits which this clause would impose on them.

The principle of separate accounts is reasonable. However, the provision in Clause 5, together with the interpretation in Clause 6(4), relating to the duty to keep accounts, which would include the publicity connected not only with tourism but also with job advertisements, is much too widely drawn. I think those are two very important matters. It would also include statutory notices under various Acts, letters and many other minor communications addressed to sections of the public, not to mention reports of various sorts which are published on planning and similar matters.

Statements at press conferences, media interviews, etc., are to be caught. It is not clear whether this is intended to apply to the individual members of a local authority or only to official statements by its officers. As at present drafted, it must apply to both, and it is difficult to see how this can be anything other than muzzling local democracy and freedom of expression. Debate about the Okehampton By-pass, which many of your Lordships will remember recently took place, and about the Devonport Dockyard, would both risk infringing the code. There was a model of the south route of the Okehampton By-pass and I gather that such a model might be out of order in the future if this Bill goes through.

This Bill would probably prevent discussion of these subjects. The Devonport Dockyard is a Government function and service and will be of great importance to the local people in the area of Devonport. The people in these areas will expect the local authorities to express their views on these issues.

I should like to end by paying tribute to the late Herbert Morrison. For eight years I was on the London County Council and he ruled it well and truly. Always in the Opposition we were allowed to say what we wanted to say. We never had any trouble and we worked together marvellously—and working together makes all the difference, because time is not wasted in having so many disagreements. My Lords, I hope that when this Bill goes through we shall see it working smoothly and well in the future.

7.16 p.m.

Lord Ardwick

My Lords, perhaps I should begin by boasting that I intend to be one of the happy few who stay until the end of this debate. I must say that I share with my noble friends their condemnation of the use of public money for party propaganda. I accept the Widdicombe Report.

I am very worried about the Bill. It seems to me that in going for the villains the Government have upset a lot of good people who are engaged in local government and in voluntary movements. They have upset a lot of good people, including many good Conservatives, and they will have to think very seriously about this Bill. As other noble Lords have pointed out, the trouble with this Bill is that it attempts the impossible.

Its object is to deter a local authority from publishing anything which is likely to affect support for a political party. Yet whenever a local authority justifies its policies to the ratepayers, as it is its duty to do, and that local authority is governed by a party with an overall majority, then the party as well as the authority itself will get the credit. Ratepayers are not fools, particularly those who use their votes in local elections. They know which party runs the council and they judge the party on the way the council carries out its business.

One of the tests about whether the material falls within the prohibition is whether the material refers to persons identified with a political party. Does this mean to say that the material may not mention the name of the chairman of the authority or the chairman of one of its committees?—for it is certain that a person of such local eminence is known both as a councillor and a politician. The publicity for the work of his committee must be of advantage to him and a disadvantage to his opponents at the next election. I think it is very difficult to legislate fairly and sensibly on this subject other than in a way which will deter the grossest abuse of public money. Surely what is needed is some kind of convention, a code of good municipal practice which recognises the realities but imposes sensible limits. There are such conventions for national government and they work acceptably if not well.

I remember on one occasion my newspaper was asked by Dick Crossman to do a popular version of his White Paper on state insurance. It was by no means intended to be a political pamphlet. The object was to produce a serious guide for trustees of vocational pension funds. After we had agreed to do that he had to seek agreement, whether with the Opposition or the higher Civil Service I do not know, and that was obtained easily because he could cite a precedent in that the Opposition had sponsored such a publication.

But perhaps the Government feel that they could not trust a local authority to follow a code unsupported by legislation, and I am not surprised if the code that they have in mind is as constraining and repressive as the tentative one that they have published. But I shall deal with that later.

The publicity aspect of the Bill is inevitably seen as one more example of this Government cutting down the local authorities to size. All governments are impatient of dissidents and regard them as unpatriotic, but this Government are less tolerant of dissent than any government that I can remember, even of dissent among their supporters. Local authorities when they criticise Whitehall are most dangerous critics, for although their powers derive from central government their right to exercise them comes from the same source as the Government's power; that is, from the people, from the electors.

Local authorities are political bodies run by the parties, the parties that engage in national politics too. Do we expect today, for example, local authorities in the Midlands to be silent about plans for the disposal to foreign firms of British Leyland which gives so much direct or indirect employment to many of their citizens? Is that to be beyond the sphere of local government in the West Midlands? Concern will surely be felt by all councils and not simply those where the Opposition are in the governing majority. Should they not publicise their concern?

One feels that this Government would like to have minimum local government; to reduce further the role that local government has come to play in the welfare state. As such, local government is undeniably and rightly self-assertive. It must keep its citizens informed of the benefits that they can claim, for if they are ignorant there will be unnecessary suffering. I remember an example at national level which stirred me considerably. A Conservative Government to their credit provided a new benefit, family income supplement, but after some months only a fraction of those entitled to it were claiming it. The poorest of the poor were suffering unnecessarily. I looked at the application forms provided in the post office. They were well beyond the capacity of the potential beneficiaries. So my newspaper set out to explain the scheme, giving it generous space over several days. We asked our readers to explain the scheme to anybody who might benefit from it.

That is precisely the kind of explanatory role that local authorities today play very well. They should be encouraged by the Government and not discouraged or constrained, as they are by the Bill. We should thank heaven that local authorities have begun to use the imaginative and appealing techniques of modern advertising. They are using the ratepayers' money to give the ratepayers the information that they require.

We see that publicity is being used in all kinds of new circumstances. Great public companies are using shareholders' money to acquaint them with the facts and arguments of a takeover as seen by the directors. The BBC has produced at low cost a brilliant television commercial reminding the viewer of the richness of the service that he gets for his licence fee. Many firms today produce an annual report that will interest not merely their shareholders but also their own staffs. That is one of the leads that some enlightened authorities have followed. They may produce a small newspaper once a year or once a quarter to let the ratepayers know how the council is using their funds.

That is of great importance. There was a time when the majority of people were hardly aware of themselves as ratepayers because they paid a weekly lump sum for rent and rates and the rates were thus invisible. Only the minority who owned their houses were self-conscious ratepayers. Indeed, they formed themselves, as the noble Lord has reminded us, into ratepayers' associations and ran candidates who would keep local services to a minimum, since they were hardly used by those middle-class citizens in the association, and by restricting services they would keep the rates down.

Today something like 60 per cent. of homes are owned by their occupiers, and those people know only too well the size of the rate bill; but, like the occupiers of rented houses, they are consumers of the services that are financed by the rates and they need to be told just what they are getting for the considerable money that they have to pay out.

The Widdicombe Report is a sensible and generous document which recognises the need for publicity—for publicity which uses the best current techniques, which recognises that a local authority is more than a body carrying out statutory duties and which recognises the political nature of local government. It also recognises that the scale of the publicity might become too large, the content too intense or the subject outside the local level and wrongly pitched at the national or international level.

The Bill does not, however, fully reflect the wisdom of the Widdicombe Committee. My union, the National Union of Journalists, which has members serving as public relations officers of local authorities, fears that unless the Bill is amended, and above all unless the draft schedule is changed, those people will be confronted with hopeless professional dilemmas.

Those of us who are interested in the Bill have received many representations. I was particularly impressed by a missive from the London Boroughs Association, perhaps because it was the briefest and most succinct of the documents and because it was unanimously approved by all political parties. That association is concerned, first, with the problem of publicity for council policy, which is also the policy of the majority party on the council. It is concerned, secondly, with the problem of persons identified with a political party who are also identified with the council. Those are two subjects which I dealt with earlier. Thirdly, it is concerned with the restriction of Section 142 of the Local Government Act 1972; and, fourthly, with the nature of the proposed code of practice.

As for Section 142, the Widdicombe Committee recommended that it should remain unchanged. Clause 3 of the Bill would restrict publicity to, information relating to the functions of the authority". It would narrow the present provision which permits publicity of, information on matters relating to local government". Thus the authority would not be able to publicise many matters of legitimate concern such as, for example, its continued existence, its boundaries or new legislation that it may wish to see enacted.

As for the code, the association (and I agree with it) would prefer to have not a statutory code but a voluntary one which could easily be amended in the light of experience, without seeking the leave of Parliament. As the association points out, the code even seeks to control the content of council and committee reports. This code seems to have been drawn up in a hurry. Nobody has mentioned its provenance. It is hastily adapted from the code which is used at national level.

Lord Elton

My Lords, I have refrained almost all along from intervening. I do not want to protract proceedings. But there is, I believe, a misconception around about the status of the code that at the moment exists and that is now in the Library of the House. It is entirely embryonic. It is merely designed to show the format and subjects that might be covered. It is our intention to discuss fully with those concerned. The noble Lord is right to attack, if he so wishes, the principle of having a code. I would ask him not to exhaust himself attacking the detail of what is in it, because I do not intend very vigorously to defend that.

Lord Ardwick

My Lords, I am glad that the noble Lord has given that explanation. I was not attacking the principle of the code. I was supporting the principle of the code. I was, however, saying that this was one hastily cobbled together from the national code. Although it works very well at national level, it does not work well at local level.

I shall not go further into that. We are all agreed that public money should not be used primarily to affect support for a political party. We are all concerned to prevent abuse of the powers under Section 142. We are all concerned to see that publicity stays within the ambit of local government. For although it is a wide ambit, this does not mean that it is unlimited. The Government share these objectives but the Bill goes beyond them. We must hope that wise amendments can be devised and that the Government will be willing to accept them.

7.31 p.m.

Lord Campbell of Alloway

My Lords, the noble Lord, Lord Ardwick, and I share many views in common. On this particular occasion, as I understand it, he proposes a code of administrative practice whether statutory or voluntary and not legislation. That opinion I cannot share with him. If only the traditions of local government had not been traduced, if only the conventions of impartiality had not been flouted, if only these untoward dealings in mortgages had not occurred, if only rates had been duly set, and if there had been no abuse of ratepayers' money for party political purposes, this Bill would have been neither requisite nor welcome. As to the constitutional considerations, to which my noble friend the Minister adverted, constititional government has been flouted and put to mockery. That is the order of the attack on democracy and freedom which this Bill seeks to preserve.

However, the intention of the Government, behind the means of implementation proposed, in particular in Clause 2 and also Clause 4, warrants clarification. Under Clause 2, I would ask respectively: can the civil courts order reimbursement of sums improperly expended on political publicity as well as grant injunctions and declarations, the type of sanction upon the councillors to which my noble friend Lord Boyd-Carpenter referred under Clause 1? Will Clause 4 afford some form of extra-judicial sanction available to central government to withhold rate support for breach of code, a circuitous route to those slippery slopes of potential administrative abuse? I hope not.

As to Clause 2, this prohibits direct or indirect political publicity. The civil courts must reach a decision having particular regard to subsection (2) on an objective basis, intention being irrelevant. I question, with the greatest respect to the right reverend Prelate the Bishop of Gloucester, to the noble Lord, Lord Hayter, and to others, whether it is really necessary to redraft to accommodate the fears of the voluntary bodies. I should have thought that those fears could have been largely allayed by a massive process of consultation on the code of practice to be Issued under Clause 4.

I was much heartened and indeed greatly instructed by the speech of my noble friend Lady Elliot of Harwood as, in her experience—I have none—of local government, she saw no practical difficulty in deciding which voluntary organisation was indulging in political activities. That was not the sort of judgment that I myself could ever pass until I had to decide it. I have never had to do so. But the experience of my noble friend, given totally objectively, is a source of comfort to me and, I hope, to the right reverend Prelate who spoke on this matter.

That being so, is the distinction between the two limbs of subsection (1) a viable distinction or a distinction without a difference? If so, the complex drafting and the second limb could well be excised by deletion of, can reasonably be regarded as likely to affect or to achieve", in Clause 2(1) and Clause 2(2)(b) respectively. The position, put quite simply, is this. Surely, likelihood to affect public support for a political party under the second limb must inevitably involve "apparent design" under the first limb. And, surely, a finding of apparent design to affect public support for a political party under the first limb would render the second limb otiose.

As to Clause 4, my noble friend the Minister has made it plain that these sets of administrative recommendations, varied from time to time, to be embodied in a voluntary code of guidance on various specified and unspecified but related matters on all aspects of publicity, are not for enforcement in the courts. If that is so, why, I ask my noble friend, impose a mandatory statutory duty to have regard to a recommended practice that conveys the semblance of legal efficacy but affords none? Why not, for clarification, delete subsection (6) and include at the end of subsection (1) "for the guidance of local authorities", because that is what I understand to be the true intention of the Government?

In this context, it has to be said that subsection (6) represents one of the types of trigger clause in current usage to introduce a code of practice that has given rise to very much concern. It is, as your Lordships know, the "shall have regard to" type of clause directed to a local authority in the realm of public administrative law. The judicial approach is that such codes lack legal significance as affording no jurisdiction on judicial review to challenge the local authority. So here there is no available challenge in the courts to the decision of a local authority to incur expenditure on publicity in breach of the code save in the rare and wholly exceptional case where no reasonable authority, mindful of its duties, could possibly have made such a decision. With respect to my noble friend the Minister, he might accept that as the more accurate, judicial expression of legal status rather than a decision being reasonable and not in breach of a fiduciary relationship with ratepayers. That, with the greatest respect to him, is a new one. The traditional concept, as I have sought to explain it, arises in the totally rare and exceptional case. I make this point because that concept of residual safeguard by judicial review in the wholly exceptional case would obtain without subsection (6) in any event.

In conclusion, as your Lordships well know, approval by Parliament—and we are now to have approval by both Houses—confers no legal efficacy. That is confirmed when the trigger clause receives Royal Assent. The approval by Parliament approves only the exercise of the statutory power of the Secretary of State to make the code—no more, no less.

Your Lordships, with respect, ought to know that I have raised these matters at the suggestion of my noble friend Lord Henderson, who is unable to attend as he is engaged on committee duties elsewhere in your Lordships' House. However, he having drawn these matters to my attention, we both share the anxiety for the clarification which we have sought.

7.42 p.m.

Lord Winstanley

My Lords, on rising at this late hour to wind up this debate on behalf of my noble friends on these Benches it clearly behoves me to be brief. In any case, I would not be speaking now on this subject had not my noble friend Lord Evans of Claughton, as a result of ill-health, been unable to be here. I very much regret that his great experience and wisdom in local government matters have not been available to us in this debate. I earnestly hope that the noble Lord will be sufficiently restored to health to play a full part in the later stages of this Bill which I am quite sure will be extremely important and perhaps contentious.

In addition, I also missed some of the speeches in the middle part of the debate owing to the need to attend one of your Lordships' Select Committees. Again I shall try to be brief, and as it is late I am very anxious indeed to hear the noble Lord, Lord Elton, fill some of the gaps which I think the noble Lord left, perhaps deliberately, in his opening speech.

I listened to that opening speech with great care. I thank the noble Lord, Lord Elton, for his clarity in the way that he took us through this Bill and for the clarity in the way he told us what he thought the Bill means. I am quite sure, however, that he must know that others think that the Bill means something very different indeed.

The fears of the voluntary bodies—so clearly illustrated by the noble Lord, Lord Allen of Abbeydale, in an excellent speech—cannot be wholly illusory. Nor can the anxieties of the local government organisations listed by the noble Baroness, Lady David, at the beginning of the debate, all of whom have said that they are opposed to the Bill, be wholly illusory. I do not think that the noble Lord, Lord Elton, would think their fears are illusory. They are real fears and I think that the noble Lord clearly has a duty at the end of this debate to do everything he possibly can to put them to rest.

The problem with regard to the voluntary bodies referred to in the speech which I have just mentioned of the noble Lord, Lord Allen of Abbeydale, is that the publicity campaigns of all voluntary bodies must inevitably appear to be anti-government. They are very frequently designed to persuade governments to modify, or even reverse, policies, in so far as those policies affect the well-being of the particular voluntary body's client group. Therefore voluntary bodies have always appeared to be anti-government; anti-this Government, anti-the last government, and no doubt anti-the next government. How much is that political? It is very difficult to say.

The noble Lord, Lord Sandford, said that he would follow the example of others and keep off all detailed provisions of the Bill and focus on the context in which the Bill has been introduced. The noble Lord, Lord Sandford, developed that theme and the failure of successive governments to tackle the major problem of local government finance. On that point I would wholly agree with him. That is a matter which has lain on our agenda year after year and will have to be sorted out sooner or later.

The noble Lord, Lord Sandford, also looked at the present tendency of the domination of local authorities by the militant tendency in certain authorities. He raised the specific question of the amount of money which is being spent on what are obviously wholly improper activities. I agree with him on that. The problem is how and by whom they should be stopped. That is what we are talking about in this Bill. Like the noble Lord, Lord Sandford, I should like to look at the Bill in its context, but I see that as being a slightly different context.

It seems to me that in this country we have spent about eight centuries building up a system of local government, a job which has been done by many different governments, even a republican government. It has been done under all political parties at different times. We now have accumulated a vast edifice of local government apparatus which is costly, time-consuming, inclined to be extremely bureaucratic—to a troublesome extent—and we have done all that on the pretext that somehow this edifice of local government gives local people control over local decisions.

The context in which I am speaking is that it now appears, since the present Government took office in 1979, that they are determined that local government should give local people nothing of the kind. We have seen an apparent continual tendency to limit to an increasing extent the powers of local government.

I have already agreed that improper spending of local government money on improper purposes should indeed be stopped. But, as I said a moment ago, who should do the stopping? It seems to me that it is the electors who should do the stopping. I am bound to say again—it has been said already—that had we had a satisfactory system of local government elections the people spending the money improperly would not be in a position to spend any local government money at all. They would never have been elected. As has been said earlier, had more notice been taken by the Government of the admirable Bill introduced by my noble friend Lord Harris of Greenwich and the noble Lord, Lord Blake—a Bill which passed all its stages in your Lordships' House—then we might not be in this position at all.

I think that the Government accept, as I do, that local government must have some powers to spend some of its money. Whether it should have total control over its own money is in part what we are arguing about.

At the beginning of the debate the noble Lord, Lord Elton, talked about the whole question of the local government finance by rates. There is the requirement to set a rate by a certain date. Occasionally it seems to me—and I think that this point was mentioned in my absence by another noble Lord—that sometimes local authorities have been put in some difficulties because they have been required to set a rate before they have had sufficient detailed knowledge of the precise nature of the rate support grant. Perhaps that point can be dealt with by the noble Lord, Lord Elton, when he comes to reply. However, we must accept that to give local government real powers—and I believe that it should have real powers—must also mean giving local government real powers to raise its own finance. If it has those powers, it should have the powers to dispose of that finance.

However, I accept, as do all noble Lords, that the local authorities which need the most money will always raise the least, and those which need the least money are in a position to raise the most. It is for that reason that we must have some kind of equalising means, and we have it by way of the rate support grant. I say at once that the rate support grant is essential in order broadly to equalise the finances in relation to the needs and requirements of different local authorities; but as that is provided by central government, clearly central government has a right to a pretty big say as to what is actually done with it. However, whether they have the same right to a say over what is done with local authority money which the local authority raises is, I think, another question.

However, a different matter arises with regard to having a say over what is done with the money provided through the rate support grant; it is the general question of the extent to which the rate support grant money going to local authorities should be hypothecated. Of course, it is not; at present it is regarded as money that can be spent on almost anything. We have examples of that at present. Following the abolition of the metropolitan counties, we now have extra money going to certain of the metropolitan districts in order to enable them to fulfil some of the functions which were formerly exercised by the metropolitan counties. However, there is no firm guarantee that the money given to local government for those purposes will in fact be spent on those specific purposes.

I understand, though I was not present at the time, that yesterday in your Lordships' House some anxiety was expressed about Sadler's Wells, which I believe relates to the same point. I should like to hear what the noble Lord, Lord Elton, has to say about the question of hypothecation in relation to the rate support grant, because I believe that it has some relevance to this whole matter.

In conclusion, if we are to go down the path on which this Government embarked in 1979—namely, gradually and continuously reducing the powers of local government—we could finish up by beginning to think, "What is the point in having local government at all?" If we carry those arguments to their logical conclusion and say that we will not have local government, then the director of education will not be an employee of the local education authority, but will be an out-stationed officer of the Department of Education and Science. There have been times when, as a parent, which was quite a long time ago, I wanted to see the local director of education if I could find him (and after local government reorganisation it was not always easy). If I did find him and put my point to him, he would say, "I entirely agree with you; you are entirely right. But I cannot do anything about it because it is controlled from Whitehall." If it is all to be controlled from Whitehall, why do we pay for this huge edifice of local government?

I am the last person to advocate the abolition of local government, but if we substantially weaken the powers of local government, as a corollary I think we must do something to limit the powers of central government in certain ways and to make central government much more accountable to people than they are now. For example, if more and more functions previously exercised by local authorities are to be taken over by central government, somehow we must have reforms of the way in which the business of central government is carried out so as to make the officers and those concerned much more accountable locally. Frankly, that is what this whole debate is about. It is about accountability.

I accept that some local councillors have taken deplorable decisions. I think that we all agree about this. I do not think that any noble Lord has stood up and said that it is entirely right that ratepayers' money should have been spent on these various purposes which have been itemised in the course of this debate. I do not think that anyone has said that. However, the real argument is: who should put a stop to this?

I personally am a little suspicious about a central government which think that it is necessary to step into local government to the extent to which this particular Government have done during recent years. Like other noble Lords, I shall look forward with interest to the later stages of this Bill. I hope that we shall receive greater clarification of many of the points about which there is a great deal of anxiety.

However, even before that happens, I am quite sure that shortly the noble Lord, Lord Elton, in reply will be able to lay to rest some of these anxieties. I cannot believe that all the fears which have been expressed by noble Lords all round the House and which are contained in all the papers which we have accumulated from valuable and important bodies are groundless. If they have reason to express those fears to us, at the end of the debate the noble Lord, Lord Elton, has a duty to put those fears to rest for our sake as well as for the sake of the people who have written to us.

7.55 p.m.

Lord Underhill

My Lords, I believe that it would be useful if, right at the outset of my remarks, I reiterated what my noble friend Lady David said when introducing her speech. She said that the Labour Party fully concurs with all the expressions of opinion and that we in no way support payment for political propaganda out of the rates, by the ratepayers. Let there be no dubiety whatever on that point.

In his very useful introductory speech the noble Lord, Lord Elton, said that the Bill was based on the Widdicombe recommendations. However, strangely enough the noble Lord did not use Widdicombe to justify the Bill. It is for that reason that I propose to concentrate my remarks on Clause 2 and on points in the Widdicombe Report. Various noble Lords have quoted certain extracts and I am afraid that I shall quote other extracts so that I shall not be accused for my interpretation of Widdicombe, which noble Lords might think is wrong.

First, like other noble Lords, I must ask: why the haste? The interim report was published in, I think, July last year; then we had had the Queen's Speech, and this was one of the very first Bills that the Government brought forward. It ignores a great deal of what Widdicombe said and, frankly, in some respects it turns Widdicombe's recommendations, proposals and comments on their head. Widdicombe tells us that the main report is expected later this year.

In paragraph 7 the committee expresses sympathy with the view of many who gave evidence to the Widdicombe Committee, that it was unfortunate that the committee was asked to produce an interim report ahead of the rest of its remit. The committee comments that it is pleased that the three Secretaries of State accept that the recommendations of the interim report cannot be taken to prejudice their eventual findings and broader judgments. The committee returns to this point in paragraph 13 and, commenting on the limited time available to prepare the interim report, states: … we must reserve the right to return to the subject in our Main Report". At paragraph 23 Widdicombe says: We shall consider in our Main Report some of the wider arguments about the role of local government and its place in the political system. The task will not be an easy one". Yet on the basis of an interim report we have this Bill. As other noble Lords have said, the Government appear to have acted in haste and, despite what the noble Lord, Lord Boyd-Carpenter, said about the Bill for abolition, I think there is general acceptance that that Bill was not thoroughly thought out; the Government thought up the answers as different problems came along. It would appear from the comments of many noble Lords from all parts of the House that this is likely to be the case with this particular Bill which is before us.

The arguments about a few authorities have been put forward, but the Bill purports not to deal with just a few authorities; it endangers all local government in general and local authorities in all parts of the country. Why are all the local authority associations so strongly opposed to it? As we have heard from the other noble Lords, not just the three major associations are opposed to it but also the Association of Local Councils and the London Boroughs Association.

They believe in the type of local government to which the noble Lord, Lord Bellwin, referred. They are not members of Militant. I know a little about Militant. All three major local government associations, and the others to which I have referred, are strongly critical of the major parts of this Bill. What consultation was there with the local authority associations folowing the publication of Widdicombe and before the Bill was brought forward? My knowledge is of the AMA, and I can assure noble Lords that if there was consultation the Government completely ignored everything that the AMA would have said about the Bill.

My noble friend Lord Elystan-Morgan asked me to apologise because he could not stay. He has important legal matters he has to get back to. He drew attention to the sections in Widdicombe dealing with local government publicity and the political system. He mentioned that paragraph 34 sets out five general principles which the committee kept in mind when preparing its interim report. I should like to repeat one of them. It is the fourth, which says: Local government has a duty to inform the public within its area as to the exercise of its functions and on local government matters generally". In paragraphs 111 and 112 Widdicombe comments on political developments which have affected local authorities. In paragraph 112 there is reference to a situation where a rating authority sends out a demand for a higher rate which does not result from what it has done itself but arises from reduced government grant or the increase by a precepting authority. Widdicombe comments: It is perhaps ironic that financial constraint might well create a greater need to inform, although reduced resources with which to do so". All this led Widdicombe to emphasise that local councils are intrinsically political bodies and to declare in paragraph 122 that it is not, wrong in principle for local authorities to issue material dealing with matters of political controversy, not to express a view on such matters". Paragraph 117 refers to big expenditure by central government in support of their privatisation proposals, particularly for British Telecom, their expenditure in connection with the abolition proposals and also in conection with various other matters.

Widdicombe, following up this point, states—and I do not believe that this has been referred to by any other noble Lord—in paragraph 123 that their attention was drawn by the Association of County Councils to a statement made by the Government in the Commons in 1983 during the Committee stage of the Local Authorities (Expenditure Powers) Bill that (I quote): Local authorities are essentially political bodies elected on political mandates, and run by politicians. Political consideration must affect the balance of the individual decisions they reach—and that applies to Conservative councils taking decisions on privatisation as much as Labour authorities reaching conclusions on, say, the right to buy. Therefore, we cannot simply stop local authorities acting politically". That was the statement made by the Government in 1983. All the three local authority associations say that the Bill contradicts that statement made by the Government in 1983.

Widdicombe goes on in paragraph 221: it is right for local authorities to be able to explain their views on controversial matters affecting them". Later the report says: that includes issuing information about abolition and rate-capping". Those are two of the issues on which campaigning has been referred to today as wrong, and yet that is a definite statement made by Widdicombe. By the same argument that could include campaigning by the local authorities about the position of buses under the Transport Act. The Government must face the position that local authority associations are worried as to a number of other issues that would become illegal under the present wording of the Bill.

I was talking this afternoon to a representative of one of the local authorities in Kent. They may be arguing on aspects of the Channel tunnel. Where will they stand? Local authorities in my county, Essex, will be arguing about Stansted. Others will be arguing about the fifth terminal at Heathrow and issuing campaigning material about it. There is sure to be campaigning by certain local authorities about proposals for privatisation of their airport under the airports Bill which is shortly to come before us.

There has been campaigning by local authorities throughout Scotland on the threatened closure of Gartcosh. Inevitably there will be publicity campaigns on the Government's rating and poll tax proposals. Can we have a definite assurance that under the present wording of the Bill these will not be illegal? The local authority associations believe that they will. Council officials will be chary about giving advice that they are not illegal on the present wording of the Bill.

In paragraph 126 the committee drew a distinction between material issued on a matter of political controversy or which may reflect the political views of the majority party but which is issued in furtherance of the interests of the local authority, and material issued in furtherance of the interests of a political party. But it went on in paragraph 128 to say that the distinction can be a difficult one in practice, and the areas often overlap. Then in paragraph 130 it says: We do not believe that it is possible to draw a simple distinction by which all persuasive material is considered improper". During the debate on an Unstarred Question that I asked a few months ago regarding the threatened closure of a local hospital I praised the local district council, which has an overwhelming Conservative majority, for its campaigning efforts against the closure of that hospital. I have its piece of material in front of me. It was distributed to all the households in the area, with a petition form. It called upon residents to send in the petition form to stop the closure of this hospital. That district council would be extremely worried as to whether that would be permitted under this Bill. People of legal background who know far more about that aspect than I do are chary of giving advice on matters of this kind on the present wording of the Bill.

The National Association of Local Councils says, in a communication which many noble Lords may have received, that it was told that the department draws a distinction in regard to making information available but that the Bill would prevent expenditure on distributing it. My council must have incurred some expenditure on distributing that document, and I am glad that it did. I give praise to the Conservative district council for so doing.

I must repeat what some noble Lords have said about the fears of the National Association of Local Councils: that on local matters which are of primary concern to parish councils they may be debarred under the Bill from engaging in publicity upon particular items. Let us remind ourselves of what some noble Lords have said, and I may include one or two other matters: the closure of a village school; the closure of a local post office; the closure of a local railway station; a campaign for a by-pass; a campaign trying to press against a proposed lorry route; campaigning for a bus service which might be taken off as a result of the recent Transport Act. All of them argue that the present drafting of Clause 2 could present problems in carrying out campaigns on all those items. Clerks will be wary of giving contrary advice.

We have heard a number of noble Lords, particularly the noble Lords, Lord Hayter and Lord Allen of Abbeydale, and the noble Baroness, Lady Elliot of Harwood, stressing the worries of the voluntary organisations. I must tell the Minister that sympathy about this problem will not be enough. I am sure he will understand what I am saying because what will count is what judges will decide in the future on the wording of the Bill. If the fears of the voluntary organisations are to be allayed there must be amendments to the Bill which will relieve their worries.

Reference has been made to the provision in Clause 4 for the statutory code to be issued by the Secretary of State. It is a wide provision. I quote: recommended practice as regards the content, style, distribution and cost … and such other related matters as he thinks appropriate". The whole House will welcome the statement made by the noble Lord, Lord Elton, that the code will be considered and must be approved by both Houses by an amendment which the Government will be bringing forward. But will this simply be through an affirmative order? From the Opposition Benches we never oppose something that has been carried by the other House. Therefore we shall just have a nice little debate upon it and that will be the finish. Will it be in the schedule to the Bill? Will there be opportunities to amend the proposed code of conduct? Otherwise it becomes a debating exercise and will be dealt with later.

In paragraph 242 of Widdicombe the report stresses that the control of tone and presentation should be exercised, but goes on to say that it would be best if this could be done by self-regulation within local government itself or through the agency of the local authority associations. The Widdicombe Committee says that it proposes to consider this matter further with the local authority associations. Obviously the Government have rejected both those proposals. They have rejected the proposal of self-regulation through local government made by Widdicombe. They rejected the idea of allowing local authority associations to draw up a code. It would be interesting to know why the Government have not followed either of those proposals made by Widdicombe.

As we shall have a more definite code of practice all I shall say on the one that has been presented as a possible code is that it indicates what the Government want to do in a code of practice. That is why we are worried about certain points which have appeared in this draft code. The suggestion that a code will include unpaid publicity was never suggested by Widdicombe, yet it was put in the draft code. Everyone must agree that the suggestion that local government politicians should be debarred from making statements on council business and reports which may be politically controversial would be a denial of free speech and would be wholly unacceptable to local government throughout the United Kingdom.

Why have the Government ignored what Widdicombe said on controls? My noble friend Lord Elystan-Morgan referred to paragraph 175. I shall repeat it because I wish to make another point later. Widdicombe says in paragraph 175: We wish to avoid new controls that will be imprecise, or raise major definitional problems, and are aware that it is easier to identify a problem than to encapsulate that problem in a legislative formula". But the report goes on under the heading of the undesirability of restrictions in local government. In paragraph 177 Widdicombe says: We would not wish to propose new controls on the detailed discharge of local authority functions unless the case was a clear and strong one". The local authority associations believe that the case has not been made out. These points were not properly discussed or considered with the local authority associations. A number of noble Lords have made it absolutely clear that the matters in the draft code are so imprecise that it would be a lawyers' paradise. Lawyers have said that, not non-lawyers like myself. The Government must have second thoughts on the proposals in this part of the Bill. We hope that they will have listened carefully to the criticisms made and will themselves propose amendments at the Committee stage.

I conclude by referring to a point made by my noble friend Lord Ardwick that Widdicombe recommends that the scope of the local authorities' general powers to issue publicity shall remain as laid down at present in Section 142 of the 1972 Act, and Section 88 in Scotland. I must emphasise that in paragraph 233 Widdicombe suggests that this should be left unchanged. I quote from that paragraph: It provides an acceptable and long established definition of the proper scope of local government publicity". The last reference I shall make is a quotation from paragraph 235: We reject the view that this is too wide a scope for local government publicity. We think that local authorities should be entitled to inform those living in their area of the consequences of the proposed changes in or affecting local government". The Government have ignored that and many other proposals made by Widdicombe. I am rather surprised that the Minister did not use Widdicombe to justify the Bill because most of its proposals would not have led to a Bill of this kind. We hope that following our debate here today numerous amendments will be tabled to improve that part of the Bill.

8.17 p.m.

Lord Elton

My Lords, I have listened with great interest to a large number of very interesting and illuminating speeches—a number of which, I might add, went on for longer than my introductory speech to this debate. Your Lordships will forgive me if I now too speak for a little longer than my introductory speech to this debate. Even if I do there is no way whatever that I can answer every point made, but this is not the purpose of a Second Reading. It is the Committee stage that is designed to take on board a great number of your Lordships' anxieties. I shall pick up as many as I can of these points.

This small Bill—physically it is a small Bill compared with a great many that we have handled in this House on this subject—deals with very large matters that come close to the heart of local government and on which your Lordships have strong and understandable feelings. I shall start with what have been revealed to be the less pressing matters and come afterwards to that which has clearly preoccupied your Lordships for much the greatest part of today's debate.

The first matter was the question of a date for the rate. Your Lordships are agreed that good practice requires councillors to do what this Bill in Clause 1 would require them to do in law. I am grateful to my noble friend Lady Elliot of Harwood for her clear confirmation of that. A number of questions were raised on it especially by my noble friend Lord Boyd-Carpenter. As to the question of what is the sanction for failure to comply with Clause 1(1), my right honourable friend said in another place that if a rate is made deliberately late two consequences might follow. On the application of an interested party, a court could require the council to fulfil the duty and could make an order of mandamus. In addition the breach of duty would provide prima facie evidence of willful misconduct and the auditor, who is completely independent of the Government, might initiate action against councillors for the recovery of any resulting loss of funds. Clause 1(3) allows for the remote possibility that it may be physically impossible to set a rate, for example, because of an epidemic. I emphasise that that is not a let-out; the obligation remains.

The clause places a statutory duty on a rating authority to make the rate by 1st April. If it fails to do so, then any person with a sufficient interest, as I have said—and that could be a council or it could be a ratepayer—can make an application for judicial review, seeking an order to which I have referred.

If a loss or deficiency is caused by the delay in making the rate—and this brings us back to the sanction—the sanction is that the auditor, if satisfied that the loss was caused by wilful misconduct, may certify that the amount of the loss should be repaid, and if the amount exceeds £2,000 the person responsible must be disqualified from office.

The noble Baroness, Lady David, asked if we could give a commitment for providing the necessary information for making a rate in November. The Government aim to lay the rate support grant report before another place as early as practicable each year. But before the settlement we must consult local authorities, we must take the necessary decisions in the light of those consultations, and we must undertake all the really staggeringly large and complicated calculations and check them before the report can be laid. Because of this, the middle of December, rather than the end of November, has tended to be the earliest feasible date. We think that a minimum of three months between mid-December and the end of March ought to provide local authorities with ample time to set their rates.

My noble friend Lord Orr-Ewing asked about the question of enforcement, to which I shall return at a later stage because it really is more to deal with Clause 2 than Clause 1. In the context of Clause 1, the noble Lord, Lord Kilmarnock, asked whether precepting authorities would be covered by Part II. While they will not be caught, of course, by Clause 1, because they already have a date, they will be caught by Clause 2, as the noble Lord suggested would be appropriate, and the other publicity—

Lord Kilmarnock

My Lords, I asked whether they would have any protection under Clause 1(3), the same protection as is provided for the rating authority in case of emergency—an epidemic, or something of that kind.

Lord Elton

My Lords, they will continue to have whatever protection they already have. As they are not caught by Clause 1, they will not be threatened by it and therefore they will not need to be, as it were, protected from its effects. I feel rather like a paper hanger in a high wind but I shall struggle on.

The noble Lord, Lord Kilmarnock, also raised the question of mortgages and asked whether we were not simply dealing with yet another device to stop local authorities from getting the money they wanted to get. We do not want to stop local authorities selling their mortgages, and I can tell the noble Lord that we have encouraged them to do so as a useful way of generating capital receipts and also on the more general grounds that mortgage business is something that properly belongs in the private sector, anyway. The Bill is designed not to prevent sales but to ensure that, if they are made, they are made properly and completely.

The borrower's interests are, after all, affected by the disposal, and I should remind the noble Lord who thought that some borrowers might welcome the transfer to the care of a French bank, that it is the new mortgagee who sets the interest rate and that is a matter of intimate concern to them. The lender may be less sympathetic in dealing with arrears, for instance. The local authority may have a well-established and precedented way of dealing with arrears; the borrower may have it in mind that that will be the way he will be dealt with if he falls into arrears, and be in for a very nasty shock if he suddenly finds that, unbeknown to him, his debt has been transferred to somebody else who has a completely different system and much less interest in the individual. Thus I do not think that this is necessary. If the local authority wants to count a capital receipt from the disposal of a mortgage, then of course it ought also to dispose of the financial risk entirely. Otherwise, it is not, after all, a disposal that is taking place but a borrowing.

The noble Lord raised the matter of proportional representation. I congratulate him, I must say. I think it is a marvellous achievement to bring in PR. So long as he deals with it as courteously and intellectually as he did this afternoon. I shall refrain from the inevitable temptation to rejoin to the umpteenth or trillionth reference to PR with the cry, "PR ha, ha!"

A matter that was raised by one or two of your Lordships in passing was forward funding by those local authorities that will cease to exist at midnight on 31st March. I have seen numerous reports of plans by the GLC in particular, and indeed of certain of the metropolitan county councils, to use unspent resources to fund activities after the abolition date. Their plans involve the payment of forward funding in grants to a variety of organisations, including a number of voluntary bodies, some of which are no doubt highly meritorious and others which your Lordships may think are less so. Very significant amounts of money, perhaps in excess of £100 million, as my noble friend Lady Gardner of Parkes and the noble Lord, Lord Chalfont, have pointed out, are reported to be at issue.

It is not appropriate for the GLC and the metropolitan county councils to incur significant expenditure on major new initiatives without the expressed support of all successor authorities in their areas. Where spare financial resources are available, they ought to be passed on to successor authorities under the proposals for the distribution of balances which we have already outlined. Decisions as to the funding of post-abolition activities from ratepayers' money are unarguably the province of successor authorities.

I should remind the House that Section 97 of the Local Government Act places the GLC and the MCCs under a duty to exercise their functions so as to facilitate abolition and the transfer of functions, property and staff under the Act. Where any successor authority takes the view that forward funding activities are unreasonable, that authority can have recourse to the courts to seek a judicial review of the activity concerned. Indeed, I understand that in Greater Manchester one of the metropolitan districts has already initiated an action to challenge decisions which were taken by the Greater Manchester County Council last week.

In addition, the councillors of the GLC and MCCs should not forget that their decisions will still be subject to audit challenge, and they to surcharge and disqualification, even after the abolition of their councils. The ratepayers, from whom these resources were in large part taken in the first place, will be very interested indeed to know what has been done with them if they are not returned to them in the person of the successor bodies after abolition. I hope that that goes home where it should. However, I in fact digress from the main content of this Bill, and I have to tell your Lordships that my short answer, having given the long one, is that the question of abolition does not actually fall within the parameters of this Bill.

I therefore return to the Bill and to that part of it that has exercised so magnetic an attraction upon your Lordships this afternoon. In my opening remarks I referred in a general and rather muted way to the evil to which Part II of the Bill is addressed. I assumed, and I was right, that my noble friends would deal with that matter fully and effectively; and that they most certainly did. My noble friends Lord Bellwin and Lord On-Ewing opened on a theme which the noble Lord, Lord Chalfont, brought, in spite of interruptions, to an unanswerable crescendo.

To listen to the noble Baroness, Lady David, who I greatly admire, one would scarcely think that there was a really serious problem at all. I hope that she and her noble friends paid close attention to what my noble friends and the noble Lord, Lord Chalfont, from the Cross-Benches, have told them today about this. For there is, I think, no serious doubt that the use of public cash taken from private people, as well as private businesses, ought not to be used by local authorities for party political propaganda. The political parties themselves ought to pay for that, and nobody else.

The anxieties which your Lordships have expressed about the way we do this have focused not on what we are trying to do, but on what the results, as the noble Lord, Lord Winstanley, put it, of that effort may be. That turns, of course, on definitions and they can only be teased out in Committee, not in Second Reading speeches. There are, however, some useful points that I can make now.

The first definition that we need, according to the noble and learned Lord, Lord Denning, is a definition of a "political party". Without it, he told us, his learned friends the judges, some of them noble, would be in trouble. With great respect, the judges always seem to have looked after themselves pretty well in political trouble ever since that small question of who was boss in the days of James II. In this case I think there is proof that they can cope quite well, because there are already Acts on the statute book which refer to a political party without defining the term.

For instance, I refer your Lordships to the Companies Act 1967, to various Finance Acts and also in Section 175 of the Local Government Act 1972, which deals with allowances for attending meetings of bodies the objects of which are wholly or partly political. All these are done without definition. The first of them was done in 1967, so we are only asking the learned judges to continue their invaluable and fearless labours under the interpretations deemed or established for up to nearly 20 years. If I may say so with great respect to the noble and learned Lord, from whom I have learned a very great deal sitting on this Bench in recent years, that is better than the sort of list which he suggested we might use, which could be rendered out of date overnight by any body on it simply resorting to the simple and cheap practice of changing its name.

The main depository of definitions in Part II is in Clause 6 of the Bill and it was to that definition that is in subsection (3) that the noble Lord, Lord Hayter, directed our attention. The definition of "publicity", "publish" and "publication" is, I concede, extremely wide—maybe the noble Lord did not expect me to concede it—but it must start off by it, in order to deal with an extraordinary range of activities. We are not talking just about posters or advertisements in the local newspaper. Lambeth, for instance, have used firework displays. Liverpool have written letters to enormous numbers of parents. But I think I can best give the flavour of this matter if I read out the list of items on which I understand the Greater Manchester County Council authorised expenditure for publicity purposes on 18th March 1985.

It was decided on 18th March to order, I understand, 30,000 balloons at a cost of £1,000; 20,000 car stickers at a cost of £ 1,800; 45,000 carrier bags at a cost of £2,400; 40,000 badges at a cost of £1,700 and 20,000 lapel stickers at, I think, a discount price of only £140, making a total expenditure of £7,040 which ought to be within the definition of the Bill if it falls on the other leg of the definition, that they are used for specifically political purposes.

I ask the noble Lord to remember that the definition applies only in the context of a local authority's party political publicity, and so far as their publicity is not party political it will not, of course, be affected. Councillors are not the local authority, so they will continue to be able to say what they wish. We are not inhibiting free speech. The noble Lord, Lord Elystan-Morgan, whom God-speed to the Western Provinces, raised this matter also, and I would say that the Government recognise that they have gone further than the Widdicombe recommendation in respect of Section 142.

The Government believe that this adjustment is necessary and desirable, in order to include matters such as national foreign policy or defence policy, which are not in the accepted sense, I submit, local government matters at all. The term has been so widely interpreted by some local authorities that they appear to have their own defence and national policies, as my noble friend Lord Orr-Ewing sensibly reminded us. But they are not mini-independent states and it does not make much difference whether they have a nuclear-free policy or not. So the Bill seeks to ensure that, in future, their information activities relate to services and to matters relating to the functions of the authority.

Continuing on definitions, both the noble Baroness, Lady David, and the right reverend Prelate the Bishop of Gloucester were concerned that material campaigning for improved race relations might be caught by the prohibition. I am not sure whether the noble Baroness had this specific example in mind, but it certainly was of the same genus that she had in mind. I can reassure them both, and the outside voluntary bodies who are concerned, that our firm view is that the courts would construe Clause 2(1) in the light of the purpose of the provision, bearing in mind the statutory duties on local authorities and the matters to which they are asked to have regard, as set out in Clause 2(2). Against this background, the Government do not consider that the courts would hold that material promoting racial equality or dealing with race relations questions should, of itself, be prohibited as opposed to material either attacking or promoting a particular position, such as that of the National Front or any other political party, directly.

That brings me to the question of the voluntary movement. I recognise the anxieties and it is important that we should address ourselves to them. Some noble Lords fear that the Bill will restrict their capacity to campaign on matters concerned with their aims and objectives, and I should like to reassure noble Lords, and especially the right reverend Prelate, on some important points. First, the mischief which the Bill seeks to remedy is party political propaganda paid for from the ratepayers' pocket, and the Government do not intend to prevent local authorities from assisting voluntary bodies financially, and publicising within their area the valuable services which they provide, or enabling them to publicise those services for themselves. Under the Bill, voluntary organisations will continue to be able to use local authority money to campaign on matters of concern to them, including government policies, so long as the presentation of local authority-funded publicity does not contravene the terms of the prohibition in Clause 2.

First, since we are concerned with the use of ratepayers' money, the Bill does not restrict the use that a voluntary organisation can make of its own funds. Voluntary organisations, in so far as they are not limited by charitable status or other restrictions outside the Bill, will be free to produce even explicitly party political publicity at their own expense.

Secondly, noble Lords have asked about the effects of Clause 3 directly on the organisations. This clause will not restrict unduly the powers of local authorities to fund non-partisan publicity by voluntary organisations. That is a bland statement of view which your Lordships may wish to test in Committee, although I do not wish to provoke your Lordships into putting down a single extra amendment. We are essentially implementing in this the recommendations of the Widdicombe Committee, that it should be made clear that Section 137 discretionary spending powers may not be used for publicity but that any such change should not prevent the funding under Section 137 of voluntary bodies who issue publicity for their own aims and objectives. I believe that we have provided such protection for voluntary organisations, and we have made clear what our intentions are.

In short, I can assure the noble Lord, Lord Hayter, that the Bill is not designed to constrain voluntary organisations in pursuing their aims and objectives. But, in so far as they are using public funds supplied by local government, they will, of course, have to take care that they do not fall foul of Clause 2, which is set to catch the misconduct that I think we are agreed we should.

Very quickly, may I say that on the question of parishes, in which both my noble friend Lord Ellenborough and the noble Lord, Lord Kilmarnock, were interested, I can affirm that we are looking carefully at the drafting of Section 142, in particular to ensure that it does not unduly constrain parish councils. The Government propose to bring forward appropriate amendments at a later stage. They are rather difficult to grasp and it may be Report stage before I can get them on to the Marshalled List, but I shall do my best to speed it up.

On the enforcement of all that we have touched upon, the noble Lord, Lord Chalfont, and the noble and learned Lord, Lord Denning, were both concerned. The noble Lord, Lord Chalfont, said—if I may paraphrase him—that auditors were slow and weak to act and asked why there should not be a power to sue.

Perhaps I may first say that the provisions of Part II will be subject to the normal sanctions for illegal expenditure in local government law to which I have already in part referred. The auditor acting under Section I 9 of the Local Government Finance Act 1982 for unlawful expenditure is one method of approach. Another is judicial review by the courts at the instigation of a person with a sufficient interest. I referred to that and also to its consquences, which may be in an injunction or more. Finally, civil actions in very limited circumstances if a person can show that a private right has been affected, or I think on the direction or recommendation of the Attorney-General. I have to say that this must be seen in the light of the fact that Widdicombe is looking at the public rights of challenge in his main report, and it may well be that when we act on his main report there will be another string or other strings to that bow.

What is the practical effect of Clauses 2 and 3? Here I leave aside Clauses 4 and 5 which do not constrain the powers of local authorities, and look at the combined effects of Clauses 2 and 3 and touch on matters that are of most interest to my noble and mobile friend Lord Sandford. I should first make it clear that we are talking about information. The courts have held that material which is designed to persuade is already outside the scope of Section 142. Clause 3(2) ensures that Section 137 cannot be used to get round this limitation. We are talking about information and, by virtue of Clause 3(1), about the distribution of material which gives information about local authority services.

The effect of Clause 2—one has to look at the whole clause—is that local authorities will not be able to put out party political material. The clause talks of material which, appears to be designed to affect, or can reasonably be regarded as likely to affect, public support for a political party"; but I shall use "party political material" for short.

First, this provision emphatically does not mean that local authorities cannot put out information which touches on issues of controversy, whether these are local or national. Perhaps I may illustrate with two examples. First, at the local level, the information which local authorities put out about their services will naturally aim to emphasise the achievements of the council. It is perfectly reasonable for an annual report, while strictly factual, to put the work of the council in the best possible light. Indeed, the code of practice under the 1980 Act encourages councils to show how their performance compares with that of others.

In this debate it has been said that an annual report of the kind I have described could be caught by Clause 2 because it might be seen as affecting the choice before local electors—for example, at the next elections. I do not think that that is a correct interpretation. Of course, the local authority could well find that Clause 2 restricts the way in which it expresses its achievements. Subsection (2) is relevant here—but there is certainly nothing in the Bill which would prohibit publication of material setting out the achievements of a local authority.

Secondly, at the national level, it is clearly reasonable that local authorities should be able to express their views publicly on the way in which central government policies affect their services or indeed their existence, to go back to an example quoted earlier. Factual information on issues of controversy is the lifeblood of democracy. It is only if the material is designed in such a way as to be party political that it will be caught by Clause 2. So it is not right to suggest that the Bill will stop local authorities from putting out information on matters of political controversy. It will ensure that they consider very carefully the material they use to ensure that it will not in any way be party political.

Nor does anything in the Bill prevent local councillors or groups of councillors from putting out party political material at their own expense. What it does is to bite on material which is put out by councils themselves and therefore paid at somebody else's expense—that is to say the ratepayers. There will still therefore be plenty of scope for local parties to put their political views to electors, and they must pay for them themselves. That is the point of this clause and that part of the Bill.

I had intended to spend a little time on codes of practice and what was said by my noble friend Lord Campbell of Alloway. I will merely say that I paid close attention to what he said and will also take close advice. I am grateful that my noble friend gave me some warning and it embarrasses me therefore to have left no time. I ought to repeat, because I do not think the noble Lord, Lord Underhill, could have been listening when I said it before, that the draft code to which your Lordships are referring is so draft as to be embryonic. It is merely put out so that people can see the sort of thing it might deal with and the sort of shape it might be in. Therefore, the noble Lord's lengthy anxiety on that subject can be allayed, though of course it may be aroused later on—

Lord Underhill

My Lords, will the noble Lord the Minister give way?

Lord Elton

My Lords, if the House will observe the time on the clock and stop counting, I will give way. We will be generous.

Lord Underhill

My Lords, I thank the noble Lord the Minister for that. I made it absolutely clear, as Hansard will show, that I accepted what the noble Lord had said. The question I really asked is: what form will the code take? Will it be in a schedule in the Bill or will it be an affirmative motion? That is the important point.

Lord Elton

My Lords, it will be an affirmative motion. This House has great experience of codes of practice like this. I refer your Lordships to all your Lordships' enthusiasm when we had the codes of practice incorporated in the Police and Criminal Evidence Bill, for instance, so I am a little puzzled by this anxiety about it now.

I shall not deal with the two Westminster cases except to say that Widdicombe recommended an express declaratory provision notwithstanding the two judgments, which disposes of that. I come belatedly to my conclusion which is brief.

My regard for the noble Lord, Lord Elystan-Morgan, is certainly no less than his regard for me; nor do I think him any less fallible than I am either. I have to tell the noble Lord that the reason why he thinks this Bill provides the wrong answer is that he has asked the wrong question; and I am sorry that he is not here for me to put him right. How, he told us to ask ourselves—and he spoke for those on his Benches—does this Bill measure up against our own vision of what local government should be like? If local government in all its manifestations was as any of us would like, we would not need to have this Bill at all. Even if it was halfway perfect we could leave it as it was.

However, it is not the vision of noble Lords opposite of what local government ought to be to which this Bill is addressed. What this Bill is addressed to is the present condition of local government as it is seen in a few narrow respects and as it is conducted by a few narrow and fundamentally misguided councils. That is not the vision of local government as noble Lords opposite would like it to be; it is the vision of local government that has made my noble friend Lord Bellwin say that it made him weep to look upon. The noble Lord, Lord Ardwick, told us that we were attempting the impossible. On the contrary, we are tackling the inescapable, and with your Lordships' help in Committee we shall accomplish it well.

On Question, Bill read a second time, and committed to a Committee of the Whole House.