Lords Sitting of 10 March 1987

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

Zeebrugge Ferry: Messages of Sympathy
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I should inform the House that I have received the following moving and warm message from the President of the Belgian Senate. It is as follows:
"In the name of the Assembly and in my own name, I would like to express to the right honourable the Lord Chancellor and all Members of the House of Lords the sorrow and pain of the Belgian Senate after the catastrophe of Zeebrugge that cost so many human lives and struck so deeply many British families".
It is signed A. Leemans, President of the Belgian Senate.
If it is your Lordships' wish, I shall reply suitably thanking the President for his kindness in sending this message and also expressing our gratitude to the Belgian authorities and personnel for the expert and courageous help that they gave—
Noble Lords: Hear, hear!
The Lord Chancellor: —and for the generosity and kindness of individual Belgian citizens in giving succour and comfort to the injured and bereaved.
Noble Lords: Hear, hear!
The Lord Chancellor: My Lords, I should also say that I have had an extremely warm and generous message from the President of the National Assembly of Yugoslavia, to which I shall also give a suitable reply.

Private Rented Housing
2.37 p.m.
Baroness David: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will reconsider the criteria set out in the Statement on private rented housing repeated in this House on Thursday 5th February (cols. 354–5).
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Skelmersdale): My Lords, the Government are consulting publicly about the use of the criteria referred to in the Statement, announcing that local authorities would be given a new explicit power to provide financial assistance to the private sector for the provision of rented housing with the consent of the Secretary of State.
Baroness David: My Lords, does the Minister realise that with the deadline that was put on certain schemes on 5th February a great number of authorities are being prevented from providing houses that they would otherwise provide? In one northern authority the numbers are 258 houses and 60 sheltered units, and in 11 outer and inner London boroughs the number of houses amounts, at a conservative estimate, to over 2,000. As the scheme seems to be combining private sector and public sector finance can the noble Lord persuade his department that there is a great loss of housing because of this very authoritative diktat by the department?
Lord Skelmersdale: My Lords, no. I do not recognise anything of the kind. We have not halted any schemes but merely subjected them to the requirement for consent, as I said in my original Answer. The Government are keen to hear from any authority wishing to put forward worthwhile schemes which are consistent with the Government's housing policy objectives.
Lord Dean of Beswick: My Lords, is the Minister aware that in the city of Leeds 60 sheltered housing units and 258 houses are now subject to a moratorium because of the new provisions and that the scheme can no longer proceed? These houses were needed for people whose homes were being demolished. Unless the city of Leeds can find 30 per cent. of the money required, as I understand it, this scheme cannot go ahead. There are many in extreme difficulty because of the cuts in the housing investment programme. Does the Minister expect Members of your Lordships' House to take seriously the Government's concern regarding building and adapting houses for people to occupy when this type of action results in 300 much-needed houses being taken out of commission in Leeds?
Lord Skelmersdale: My Lords, the Statement was made because we were aware that authorities were preparing many schemes which were merely devices for avoiding the capital control system. We therefore had to move quickly. But I say again that if any local authority has any scheme that it wishes to be considered by my right honourable friend the Secretary of State, it has only to declare itself.
Baroness David: My Lords, may I ask whether the Sheffield scheme—which was mentioned at the time of the Statement on 5th February—is entirely safe, as I understood it was at the time? However, since that time there have apparently been some problems.
Lord Skelmersdale: My Lords, I am speaking from memory now. When I considered the Statement which I repeated to your Lordships I understood that there were two Sheffield schemes. One scheme was not caught by the ban and will go ahead under the provisions that Sheffield decided upon at the time. The second scheme has still to be released, as it were, for my right honourable friend's consent.
Lord Dean of Beswick: My Lords, is the Minister aware that I found his Answer rather contradictory? He gives the impression that the measure was brought

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in to encourage local authorities to provide more housing for people. I have just explained, I think quite clearly, that in the case of Leeds it has taken out of commission 300-plus housing units which are vitally needed in order to cope with the demand in that city. Is the noble Lord aware that this is happening in many local authorities? Why does the Minister keep saying that this is to help people by providing houses when in fact the exercise has the opposite effect?
Lord Skelmersdale: My Lords, the grants are limited to 30 per cent. of the cost of schemes. This 30 per cent. is approximately equivalent to the subsidy enjoyed by owner-occupiers through mortgage interest tax relief. Especially when they are combined with index linked finance, it should be possible to produce schemes at affordable rents. If we had 100 per cent. schemes not only would that create municipal housing but fewer schemes would go ahead. There are more 30 per cents. in 100 per cent. than there are 100 per cents.
Lord Glenamara: My Lords, does the noble Lord agree that as home ownership approaches the 70 per cent. mark it may have reached almost saturation point and that there will always be about 30 per cent. of families who require rented accommodation? There is an appalling shortage of rented accommodation. Would it not be profitable to have discussions with the building societies to see what greater contribution they can make to providing rented accommodation?
Lord Skelmersdale: My Lords, the Government's objective for the next Parliament is to make 1 million more houses available for the owner-occupied sector. I readily admit that the private sector will continue to have a role in the provision of rented accommodation, but that is no reason why this should be done by local authorities.

Channel Tunnel Terminal: Health and Safety
2.43 p.m.
Lord Campbell of Croy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will ensure that the same standards of health and safety will be applied to the proposed Channel Tunnel terminal as will be required at equivalent terminals at ports and harbours.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, the safety authority which has been established to supervise the safety of the tunnel system will ensure that equivalent standards apply.
Lord Campbell of Croy: My Lords, I am grateful to the Minister for that reply. I should like to ask whether the Government are making provision for enough staff to perform these duties and also for customs and immigration to enable all necessary terminals to be manned with equal effectiveness and without delays.
Lord Brabazon of Tara: Yes, my Lords, the Government have given an assurance that they will do everything possible to ensure that when the tunnel opens the level of service at the ports and the tunnel alike will be the best practical within the resources available, and that in judging the resources to be allocated to each mode the frontier control departments will do everything possible to avoid bias in favour of one competitor or the other.
Lord Underhill: My Lords, has not the emphasis in the published reports of the sittings of our Select Committe been on questions of safety and rabies? The Select Committee has already had expert evidence on rabies. Is it not also a fact that we can return to these issues when the matter comes before the House in the form of the Bill?
Lord Brabazon of Tara: My Lords, the noble Lord is right, and I have no doubt that we shall return to the issues of safety and rabies when the Bill comes before your Lordships' Committee. However, the Question is specifically targeted at the terminals rather than the tunnel system itself.

Military Training Land
2.45 p.m.
Lord Taylor of Blackburn: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they intend to publish the Baron report on military training land.
The Minister of State for Defence Procurement (Lord Trefgarne): I regret that this document is classified and cannot therefore be published.
Lord Taylor of Blackburn: My Lords, I thank the Minister for his reply. May I remind him that his department is using this document extensively but is not allowing people raising objections—both the public and elected representatives—access to it, and he has already stated that it is classified? Does he not think that this is unfair?
Lord Trefgarne: My Lords, I am not sure in what circumstances the noble Lord thinks that the document is being used in a situation which he would deplore. I know of no such circumstance. But if there is such a circumstance and he can tell me about it, then I shall be happy to look into it.
The Earl of Halsbury: My Lords, will the noble Lord accept that there is widespread concern in the county of Devonshire that further encroachment is to be made upon the national park in Dartmoor for the use of the military? Can he make an announcement to allay this anxiety?
Lord Trefgarne: My Lords, although we do all that we can to make the best possible use of our existing training areas, current land holdings simply do not

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meet all the Army's training needs. The significant increase in the numbers requiring to use the training areas in the United Kingdom, the increased range in safety areas required for modern weapons and the need for operational training for both regular and reserve forces all compete for the limited amount of space in our existing training areas. I am afraid that that means we shall have to continue to train over Dartmoor as far ahead as I can foresee.
Lord Hunt: My Lords, is the noble Lord aware that the Baron report is bound to be of considerable importance to conservation interests, not only in the county of Devonshire but in other counties where the national parks lie, because the training land in question is largely in our upland areas? Will he at least give the House the assurance that there will be close and effective consultation between his department and the Department of the Environment when this report is considered?
Lord Trefgarne: My Lords, I assure the noble Lord that the consultation that he is seeking takes place on a regular and continuing basis. Indeed, I have been responsible for quite a bit of it in recent times, although now a different Minister is responsible. We take our responsibilities very seriously in so far as preserving the environment on the land over which we train. In many cases we are told that the presence of the military is a positive benefit to the environment.
Lord Taylor of Blackburn: My Lords, perhaps I may ask the Minister how he can have negotiations with another department on a classified document.
Lord Trefgarne: My Lords, I am sorry to have to explain to the noble Lord that classified documents are available to other departments but not to the noble Lord.
Lord Irving of Dartford: My Lords, is the noble Lord aware that my noble friend is claiming that people making a legitimate request are being resisted by the quotation of criteria from a document to which they have no access? Will he indicate whether that is so and can he also look to see whether the document is being used in that way?
Lord Trefgarne: My Lords, I assure the noble Lord that the document is not being used in that way, because it does not contain any criteria.
Lord Mellish: My Lords, can we have an assurance that a copy has not already gone to the BBC and that we shall not have a programme soon?
Lord Taylor of Blackburn: My Lords, I should like to ask the Minister whether he would be surprised to learn that I have been invited to go across to the Ministry of Defence to read the document. It would be available to me to read there but it is not available to local councillors or members of the public.
Lord Trefgarne: My Lords, I am not aware that the noble Lord has seen a copy of the document.
Lord Taylor of Blackburn: My Lords, I said I had been invited to read it
Lord Trefgarne: My Lords, if the noble Lord has been invited to see the document he will first have to be authorised to receive classified information, and that I do not think has happened yet.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that there is a good deal of interest in Wales concerning this document? Will he remind the House of the terms of reference of the Baron Committee? Will the Minister further agree that, although it may be necessary to classify parts of the document, most of it could be declassified without any risk at all?
Lord Trefgarne: My Lords, there was no committee set up for this purpose. Baron was a comparatively junior officer in the British Army who conducted the study for the benefit of his senior officers and not for further dissemination.
Lord Molloy: My Lords, will the noble Lord say that at some point in either the near or distant future this very important report will be available to elected representatives in local authorities, to Members of Parliament and to Members of this House?
Lord Trefgarne: My Lords, I regret that I can give no such assurance.

Industrial Buildings: Energy Conservation
2.50 p.m.
Baroness Nicol: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have assessed the impact on future levels of energy consumption of the deregulation of industrial buildings.
Lord Skelmersdale: My Lords, the Government expect no immediate change in the energy require-ment for new construction work in industrial buildings. In the longer term the impact of the proposed deregulation would depend on decisions about insulation levels made by those who commission and build such buildings.
Baroness Nicol: My Lords, I am grateful for that Answer. However, it seems to indicate that the department is not taking this matter as seriously as it might. For example, has the Department of Energy been consulted on the proposed deregulation of industrial buildings? Is the Minister aware that the Secretary of State has given a commitment to an ongoing energy conservation programme? I am sure that he would not welcome any relaxation in regulations which would allow industrial buildings not to be insulated, which is what the new regulations would do. Has the department been consulted?
Lord Skelmersdale: Yes, my Lords, naturally the Department of Energy has been consulted and it will equally be involved in considering with the Department of the Environment the response to consultation.

Disablement Services: McColl Report
Lord Denham: My Lords, with the leave of the House, I shall arrange for a Statement that will be made in another place this afternoon by my honourable friend Mr. John Major, the Minister of State for Social Security and the Disabled, on the McColl Report on disablement services to be printed in the Official Report.
Following is the Statement:
"With permission, Mr. Speaker, I wish to make a Statement on the Government's response to the McColl Report on the Artificial Limb and Appliance Services. As the House will know, these important services are administered directly by my department and the working party were invited to consider them and to make recommendations for the improvement of efficiency and patient care. I am most grateful to the members of the working party for the comprehensive and dedicated manner in which they tackled this task.
"The report made wide ranging and detailed recommendations, concerning the organisation and management of the services; the nature of the contracts for the supply of limbs; the quality of the limb fitting services; and the desirability of closer links between the full range of hospital, community care and local authority services. Action has been taken already to implement many of the recommen-dations.
"We have strengthened substantially the top management of the limb and appliance services by appointing a general manager to head a specialist disablement services division; supported by a new director of operations, and a new director of procurement from the NHS.
"We now propose to extend the principle of general management throughout the limb and appliance service in order to implement the far reaching changes we envisage. We intend to reorganise the service into regions with boundaries that are co-terminous with those of the NHS. Each region will be headed by a senior manager responsible for the entire limb and appliance service in that area. We are also, as I told the House on 17th February, improving the range of wheelchairs that are provided. Pilot projects to improve transport arrangements for patients are under way and improved management systems are already in place.
"We believe the quality of limb fitting by prosthetists is vital to patient welfare. The McColl Report was critical of the level and quality of prosthetic training. We agree that it should be improved. We wish to see professional training and the status of prosthetists upgraded. We have therefore established a joint working party with the limb industry and the Orthotic and Prosthetic Training and Education Council (OPTEC) to review
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speedily the present arrangements for prosthetic training and to make recommendations for improvement. We have already received an interim report from the working party and expect a final report within three months—I shall report further to the House when this is received. I anticipate that implementation of any recommendations will make provision both for initial training leading to a qualification and subsequent in-service training.
"We also agree with the McColl Report that we should seek improved contracts for the supply of artificial limbs. We are therefore pressing the limb industry to agree to new contractual arrangements that will increase competition and encourage a quicker and more flexible service. Discussions with this aim in mind are continuing and we attach great importance to this principle.
"One of the most important conclusions of the McColl Working Party was that it would he inappropriate for the limb and applicance services to remain under the direct control of the DHSS. I wish to make clear that we accept that recommendation and propose to act on it.
"We have therefore decided to establish an interim management board, in the form of a special health authority, with effect from 1st July this year. The authority will be accountable directly to me. I am delighted to announce that my noble friend the Lord Holderness has agreed to be chairman of the new authority. My noble friend is a distinguished former Member of this House and has a long and proven record of commitment to disabled people. I have no doubt that he will be an excellent chairman.
"We envisage the board will have about eight members and their names will be announced shortly following further consultation with the chairman. We shall of course also have regard to the provisions of the Disabled Persons (Representation and Consultation) Act in appointing board members. However, the House may care to know that I have already invited Professor Ian McColl, chairman of the McColl Working Party, to join the Board as vice-chairman so that the views and knowledge of the working party will be readily available. I am delighted to report that Professor McColl has accepted and I know this view is shared by my noble friend.
"The McColl Report identified an imperative need for stronger links with the occupational therapy, physiotherapy and rehabilitation services offered by the NHS. We agree with this recommen-dation. To achieve this aim in the interests of patient care we have concluded that, in the longer term, the right organisational framework for the limb and appliance service would be alongside these services within the regional and district HAs. This is also the view of the recent report on disability published by the Royal College of Physicians.
"Clearly, however, this is a far-reaching change which cannot in our view be carried into effect immediately. The process of transition will need very careful management to safeguard the interests of all involved—whether patients or staff. We shall expect the new authority to complete this task in time for integration to take place on 1st April 1991.

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The instrument establishing the authority will set this as the end date.
"The new authority will have a threefold responsibility: to oversee the planning for the eventual transfer of the services; to build upon the improvements already under way; and to run the service for this transitional period. It will have power to appoint its own senior staff. The SHA will be given its own budget for 1987–88 and planning figures for the two following years. Special arrange-ments will be made to safeguard the level of funding available throughout the period of the SHA's life and for a period after integration with health authorities. The authority will also be charged with devising safeguards to ensure that continuity of the services is maintained following integration.
"Staff who are currently employed in the service will be invited to work for the new authority. Their existing terms and conditions will apply and the authority will be required to ensure that their interests are protected. Discussions with trade unions and staff will begin today.
"The authority will be responsible for the whole of the artificial limb service, for the wheelchair service and for the provision of appliances to war pensioners. The Government are committed to ensuring that the status of war pensioners continues to be recognised. We will ensure that the new authority reflects that commitment. Decisions on the future of the artificial eye service will be taken when the current review of the service is complete but this may also be added to the SHA's responsibilities. The departmental vehicle schemes will remain directly administered by the DHSS.
"The decisions I have announced today represent the most far reaching changes in the artificial limb and appliances service since its inception. They follow the recommendations of the working party. They meet the aspirations of disabled people and I am confident they will improve the services available to them. I believe it is right to end the uncertainty of recent years.
"The Government look forward to working with the new authority to build a better future for the patients they will serve."

Territorial Sea Bill [H.L.]
2.53 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Baroness Young.)
Lord Denning: My Lords, I should like to say a few words. I congratulate the Government on this most important Bill which extends the three-mile limit to 12 miles. I also thank Her Majesty's Government for the further statements made in this House that the sovereignty of Her Majesty the Queen extends not only to the sea itself but also to the airspace above and the bed and subsoil beneath, and that the rule of
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international law, as expressed in the 1958 convention and implied in the 1982 convention, still applies over the territorial seas.
I should like to make one further comment. The Bill only applies to the United Kingdom, but it can also be extended to the Channel Islands and the Isle of Man. I should like consideration to be given to whether representations might not be made to all the countries of the Commonwealth that they might follow suit and extend the limit from three miles to 12 miles. Perhaps representations could also be made to the countries of the European Community. If all the Commonwealth and the countries of Europe followed the same course, it would be effective in international law. However, I congratulate the Government and thank them for this important Bill.
On Question, Bill read a third time; an amendment (privilege) made.
Baroness Young: My Lords, I beg to move that the Bill do now pass.
At this point I should like to place on record my appreciation for the support that I have received from all parts of the House on this Bill. I am particularly grateful for the help and support of my noble friend Lord Campbell of Croy, and for the support from the noble Lord, Lord Cledwyn, and his colleagues. This is a short but important Bill and it is valuable that it has received support from all sides of the House. I am also grateful for the recognition it has been given by the noble and learned Lord, Lord Denning, and for his full support.
Moved, That the Bill do now pass.—(Baroness Young.)
Lord Cledwyn of Penrhos: My Lords, we are glad to have been able to give our support to an historic Bill. In many ways, as the noble and learned Lord, Lord Denning, has said, we have had a number of useful and constructive debates at every stage of the Bill. The speeches made on all sides have been not only interesting, but also important. We wish the Bill a speedy passage.
On Question. Bill passed, and sent to the Commons.

Local Government Finance Bill
2.56 p.m.
Read a third time
Clause 2 [Rate fund revenue accounts: further provisions]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No.1:
Page 3, line 18, at end insert—
("(4A) Before making a specification under subsection (4) above the Secretary of State shall consider the practices mentioned in subsection (3) above, but such a specification may override those practices.").
The noble Lord said: My Lords, Amendment No.1 fulfils the undertaking I gave at Report stage to bring forward an amendment to Clause 2(4) which would ensure that while it would still be possible for specifications under Clause 2(4) to override proper

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practices, my right honourable friend would consider the proper practices referred to in Clause 2(3) before he made any such specifications
There has been some misunderstanding that the government amendment would also give my right honourable friend powers to override proper practices. It is not the government amendment which provides for this; it is the Bill itself. As I have explained in earlier debates that we have had, the Government believe it is necessary for the specifications to override proper practices; indeed that power is already in Clause 2(5). But what the government amendment does is to make it clear that there can be no possible conflict between the provisions of the amendment and those of Clause 2(5). It does this by including the phrase:
"such a specification may override those practices",
which will be the subject of the next amendment. I beg to move.
Baroness David Baroness David moved, as an amendment to Amendment No.1, Amendment No.2:
Line 4, leave out ("but such a specification may override those practices.").
The noble Baroness said: My Lords, I must confess to feeling that I have been conned. We were always worried by the powers conferred on the Secretary of State in Clause 2(4) as were the local authority associations. In Committee we tried to delete the subsection altogether, and on Report we tabled a very modest amendment which inserted at the end of the subsection:
"and in doing so shall have regard to the practices".
When the Minister said that he would accept the amendment in principle and come back with his own amendment on Report, I thought that we would get a real improvement. However, I find the reverse
I should like to comment on what the Chartered Institute of Public Finance and Accountancy has to say. It was concerned about the powers to be given to the Secretary of State for the Environment in order to enable him to decide what should or should not count as a local authority's income or expenditure. However, the institute did not ask for any amendments to be made to the Bill because, on balance, it considered that the requirement for any decisions to conform to proper practices offered some protection against arbitrary action. Now it sees the situation very radically changed by the government amendment to the Bill. The new subsection (4A) says that:
"the Secretary of State shall consider the practices mentioned in subsection (3) above, but such a specification may override those practices".
The institute is deeply concerned that the Secretary of State should have such freedom, and so are we. Although the Secretary of State may not intend to abuse these powers, the wording of the amendment would allow the Secretary of State to undermine the integrity of all or any local authority's accounts. Surely it cannot be right that a Secretary of State can direct a public body to do something which he knows to be inconsistent with proper practice. Yet that is exactly what the amendment would enable him to do.
The government amendment would also come into conflict with Section 15 of the Local Government
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Finance Act 1982, which requires a local authority's auditor to,
"satisfy himself… that proper accounting practices have been observed in the compilation of the accounts".
I hope that, as the institute has such strong feelings, as well as the local authority associations and the Opposition, the Government will think again about their amendment and accept the deletion that we have proposed. I beg to move.
3 p.m.
Lord Denning: My Lords, this is an important point involving the independence of auditors. In Clauses 1 and 2 of the Bill there are references to proper practices to be observed by the auditors in the compilation of the accounts—the proper practices.
In order to discover the reference, one must turn to the Local Government Act 1982. There one finds that the Audit Commission is set up especially to audit and deal with the accounts of local authorities. Section 15 expressly refers to the proper accounting practices. It says:
"an auditor shall by examination of the accounts and otherwise satisfy himself… that proper practices have been observed in the compilation of the accounts".
Therefore it is the duty of the auditor to observe that proper practices have been involved in the compilation of the accounts.
In reading the Bill as it stands at the moment, I understand that when the Secretary of State deals with the matter under Clause 2 and makes specifications as to what is and what is not to be entered in the accounts, he will abide by the proper practices which are to be observed throughout. I did not read subsection (4) as enabling him to do anything other than specify what is the proper accounting system according to the proper practices observed by accountants.
However, the amendment goes so far as to mean that the Secretary of State can override the auditors as regards the proper system of accounting. That seems to me to be entirely contrary to principle. In a sense, an auditor is like a judge; he is a judge of accounts in the same way as an ordinary judge is a judge of men. As with a judge, it is the duty of an auditor to be impartial and independent of authorities—whether or not it is the local authority—and also to be independent of the Secretary of State. Indeed, the 1982 statute requires a code of practice to be issued and approved by Parliament. It has been approved and I have a copy of it here. Under the heading "Independence" (of this very commission) it states:
"In order that the auditor's opinions, conclusions, judgments and recommendations will be and will be seen to be impartial, the auditor and the audit staff must be independent of the authority and maintain an independent and objective attitude of mind".
When the auditor comes to his decision indepen-dently, in accordance with the code of practice, and, in so far as he can see, in accordance with this statute, is his decision then to be overridden by the Secretary of State? That is what the present amendment enables the Secretary of State to do. I ask your Lordships to support the amendment to the amendment and not allow the Secretary of State to override the judgment and decision of the auditor. I approve the amendment to the amendment.
Lord Campbell of Alloway: My Lords, I seek clarification on this matter. Surely, as regards the speeches that have been made, we are moving a long way from the essential point at issue. Surely this is not a question of the Secretary of State approving what he knows to be an improper practice, as I believe it was put by the noble Baroness, Lady David. Surely and assuredly this is not a question of impugning the independence of auditors, as I understand it was put by the noble and learned Lord, Lord Denning. Is this not just a question of essential sound administration? Is this not a question of conferring upon the Secretary of State the power to resolve any conflict between the respective practices when it is common ground that there is no uniform practice?
If that be the intention of my noble friend the Minister's amendment, then to accept Amendment No.2 would surely afford a prescription for continuing uncertainty and disorder in these complex affairs. One is almost tempted to refer to the "arcane mysteries" of local government, where the definition of the very terms is in doubt and the methods—practices—of implementation inevitably vary because of the unintelligible definitions to which the noble and learned Lord, Lord Denning, has already referred. If that analysis is right—and I seek your Lordships' help on that matter—then surely the Government's amendment ought to be adopted.
Lord Simon of Glaisdale: My Lords, the basis of the speech with which your Lordships have just been favoured by the noble Lord, Lord Campbell of Alloway, is that there is no uniform practice. However, with all respect to him, that is quite wrong: there is a code of uniform practice. It is laid down in Section 14 of the 1982 Act to which my noble and learned friend Lord Denning referred. Under that Act a code of audit practice must be laid down by the Audit Commission, and it must embody the best professional practice. There then follows the section to which my noble and learned friend and the noble Baroness referred; namely, Section 15. Under subsection (1)(b), the auditor shall satisfy himself that the proper practice has been observed—proper practice as contained in the code.
Lord Campbell of Alloway: My Lords, I am grateful to the noble and learned Lord for allowing this intervention. It may save a little time. I am fully aware that there is a code of practice. The noble and learned Lord is quite right, and I am fully aware of that fact. I am also fully aware—and this is the substance of my speech—that the implementation of the practice varies. It is that variation which forms the basis of my speech. However, I am aware of that fact and I am grateful to the noble and learned Lord for allowing the intervention.
Lord Simon of Glaisdale: My Lords, if the noble Lord was aware that there is a code of practice, it seems to me quite impossible that he should say that there is no uniform practice. It is laid down by the Audit Commission and has to be observed. There are variations, but they are variations that are made in between the periods of parliamentary review. I come back to the fact that the auditor shall satisfy himself that the proper practice has been observed, and that
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proper practice is the practice laid down in the code prepared by the Audit Commission.
Those words, "the proper practices", are taken up by the Bill and under the amendment the Secretary of State has to consider them, but he can override them. What the noble Baroness is concerned with is that there should be no such overriding. That seems to me to follow from the whole structure of the 1982 Act. It seems to me that my noble and learned friend is quite right in saying that the Secretary of State is given a discretion which runs quite contrary to the 1982 Act.
So much for the legal position, but the constitutional position also arises. At Report stage I dealt with the argument that this Bill avoids and obviates litigation. I ventured to suggest that the possibility of litigation is inherent in the rule of law. It must be possible for the citizen to say, "I do not accept that you, the Executive, should be judge in your own cause. I say you have got the facts wrong, and there are independent courts which can determine the matter between us. I say you have got the law wrong, and those courts will apply an abiding code." There must always be in the background the possibility of litigation. In other words, there must always be the possibility that the citizen can challenge the Executive before an independent court.
I went on to say that of course you can always avoid litigation. Take two traders running an account: Of course litigation can be avoided if one says to the other, "Well, each of these is a matter for dispute, but we can avoid litigation if you give me a blank cheque." That is what the Bill does for the Secretary of State.
But he now goes further. He says that one of the parties to that account can say, "The account need not necessarily be compiled according to proper accountancy practice. I reserve the right to override that proper accountancy practice." I shall therefore without hesitation support the amendment.
Lord Renton: My Lords, I say with great respect to both noble and learned Lords that the speeches they have made appear to me to be speeches against the inclusion in this clause of subsection (4), which gives a power to the Secretary of State to specify kinds of expenditure or income to be regarded as of a revenue nature.
Lord Simon of Glaisdale: My Lords, if the noble Lord will allow me, surely subsection (4) is subject to subsection (3), whereby the practices must be "proper practices".
3.15 p.m.
Lord Renton: My Lords, I was just coming to that. Subsection (4) is not being challenged. It gives power to the Secretary of State to specify kinds of expenditure or income which are to be regarded as of a revenue nature. It seems to me that that may necessarily involve overriding at any rate variations of existing practice. That possibility is envisaged in the last line or so of subsection (3), to which the noble and learned Lord, Lord Simon of Glaisdale, has just referred.
Having described the practices which are to be considered—and they are the "proper practices", and incidentally there is no reference to the Act of

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1982—he is required also (and these are the operative words) to take:
"into account variations of practice occurring from time to time".
I do not think that the noble Baroness can claim, as she did just now, that she was taken by surprise. If we read what my noble friend Lord Skelmersdale said at Report stage, he made abundantly plain what the Government had in mind, and he invited your Lordships to have it in mind as well, when he said on 5th March at col. 726:
"The purpose of this power in the Bill is to make specifications to enable us to deal with situations where there is doubt as to what is required by proper practices."
If we are to give this power to make specifications at all, it is surely inherent in that power that the Secretary of State may find that there is a practice, or more likely a variation of a practice, which has to be overridden. If we do not accept that proposition there seems to be no point in giving this power to make a specification.
My noble friend has included in his amendment these words which the noble Baroness says should be left out:
"but such a specification may override those practices."
He has come clean. He has made it abundantly plain that that is what is necessary, otherwise there would be no point in having a power to make the specifications. So, if we were to leave those words out, and if somebody seeking guidance were to refer to the speeches of the two noble and learned Lords, they would find that the Secretary of State was bound by the practices which Parliament has invited him to consider. That would be a contradiction. I go so far as to say that it would be a nonsense. Therefore, I hope that my noble friend Lord Skelmersdale will stand by his amendment in its entirety.
Lord Silkin of Dulwich: My Lords, I wonder whether I might say a few words about the speeches of the noble Lords, Lord Campbell of Alloway and Lord Renton. There are parts of those speeches with which I would not disagree. I agree with the noble Lord, Lord Campbell of Alloway, that if there are no proper practices then in those circumstances the power to specify would be a perfectly sensible one. I would only add in relation to that that if a situation exists in which there are no proper practices, then it is wholly unnecessary to put in the Government's amendment the provision that:
"such a specification may override those practices",
because there are no practices to override. You do not need to have that at all.
The noble Lord, Lord Renton, drew attention to the possibility that in certain circumstances there might be more than one proper practice. I quite agree. I would not seek in that situation to prevent the Government from choosing between one proper practice and another proper practice. After the debate in Committee the Minister, in kindly writing to me, drew attention to what I think is probably the same point, but put in a slightly different way. He said that a dispute might arise between accountants as to whether a practice which is advocated is proper or improper. That arose because in my speech in Committee I referred to what appeared to me to be the possibility that the Government were seeking to create practices
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which were improper. I felt that was something to be avoided.
The noble Lord the Minister said in relation to that that there might be a situation in which accountant A thinks that a proposed practice is proper and account-ant B thinks it is improper. If a practice is improper the Government should be at liberty to choose the proper practice as against the improper. I should not disagree with that. It is absolutely right, but all that the Secretary of State would be specifying would be a proper practice. He would not be specifying something other than a proper practice.
The amendment goes much further than any of those situations in that it gives the Secretary of State power by specification to override all proper practices. It does not say that his specification must at least be in conformity with one of several possible proper practices—the case put by the noble Lord, Lord Renton—nor does it deal only with the case put by the noble Lord, Lord Campbell of Alloway, where there happened to be no proper practice. As it is framed, it seems to me clear enough that the amendment would mean that where one had any number of practices in relation to a particular situation (all of which may be perfectly proper) it is open to the Secretary of State by specification to say that he will not allow any of those and the only thing he will allow is what he specifies, even though that may be quite improper in the eyes of accountants.
That is the evil that we on this side are very much concerned with, as I think are noble and learned Lords on the Cross-Benches. It may be simply a matter of some further amendment which could be made in another place to make absolutely clear that the Secretary of State cannot specify in that way. Subject to an assurance that that will be done, certainly we on this side of the House are sufficiently concerned about this matter to adhere to the amendment to the amendment.
Lord Kilmarnock: My Lords, before the noble Lord rises to reply I should like to say that we on these Benches are also extremely concerned about the additional power which the noble Lord seeks to import into the Bill at Third Reading. It would seem to us that the powers the Government have equipped themselves with in the Bill are perfectly adequate.
We also agree with the noble and learned Lord, Lord Silkin, that the additional subsection (4A) which the noble Lord wants to write in goes much further than is necessary. Not only does it give him the power to invoke his own subsection (4), where he may specify certain kinds of expenditure which are to be regarded as of a revenue nature, and so on, but it also enables him to override all the normal and proper practices which are contained in subsection (3). Therefore it goes far further than the scope he needs to accomplish his purpose. On those grounds, if this amendment is pressed to a Division we shall support it in the Division Lobbies.
Baroness Fisher of Rednal: My Lords, may I ask one question? I do not want to enter into the debate because my interpretation of what the Government intend to do is that if proper accounting practices have taken place and have satisfied the auditor, the

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Government say, "That is not important. We are here and we decide what is right and what is wrong". That is how it was put to me. Will any of the specifications made under this clause apply to the financial year beginning in 1987?
Lord Skelmersdale: My Lords, perhaps it would be as well to put this amendment to the Government amendment, and indeed the whole Government amendment, into context. When I persuaded the noble and learned Lord, Lord Silkin, at Report stage to withdraw an amendment in favour of a Government amendment which I promised and which is the subject of Amendment No.1 today, the amendment I persuaded him to withdraw was to add at the end of subsection (4):
"and in doing so shall have regard to the practices".
In other words, what I said at the time was quite clearly that my right honourable friend could not make specifications without knowing what the practices were.
I agree with my noble friend Lord Campbell of Alloway that the specifications enable doubts to be resolved. My noble friend Lord Renton quoted my words at Report. The purpose of the power to make specifications is to enable us to deal with situations where there is doubt about what is required by "proper practices". This very purpose means that the specifications cannot be subject to proper practices. The specifications must be effective in situations of doubt. These may include situations not only where there are some differences of view about whether one proper practice is more appropriate than another—a point that my noble friend Lord Campbell raised—but also where accountants hold such diametrically opposed views that some regard a practice as both appropriate and proper while others are so strongly opposed to it that they regard it as improper. I agree with my noble friend Lord Renton. The Government amendment with the words which noble Lords opposite—
Lord Bruce of Donington: My Lords, may I—
Lord Skelmersdale: My Lords, may I just finish this one point and then I shall give way? I was saying that I agree with my noble friend Lord Renton. The Government amendment with the words which noble Lords opposite clearly find offensive makes explicit what was previously implicit in the Bill. There is no additional power in this amendment.
Lord Bruce of Donington: My Lords, I am grateful to the noble Lord for giving way. The Minister has just said that there exist conflicts among members of the various accountancy professions as to what is proper practice. Will the noble Lord kindly provide an example of what one set says, or two or more say, on concepts which are in opposition to one another?
Lord Skelmersdale: My Lords, I did not quite say that. What I said was that the whole purpose of this power to make specifications relates to where there is doubt in the future, so that the whole of local government operates under one specification in regard to the accounts in Clauses 1 to 3 of this Bill.
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I was saying that this amendment gives no additional power in the Bill, so when the noble Baroness says that she has been conned I find that a little hard to take. The specification must be of certain effect, even where a body of opinion among accountants holds that the specifications are contrary to proper practices. If this were not so, the specification-making power would not fulfil its purpose. Indeed, if the specifications were of uncertain effect whenever a group of accountants, however small, thought that they were contrary to proper practices, where would we be?
The accountancy profession has many virtues—indeed the noble Lord, Lord Bruce of Donington, is an exemplar of them—but dull uniformity of opinion, if indeed it is a virtue, is not one of them, I would suggest. That is why the specifications must be able to override proper practices, although, as 1 have said before, we have no intention of making specifications contrary to generally accepted practices.
The noble and learned Lord, Lord Simon, raised the point again on this narrow issue of the Bill, as he did on Report when we were discussing the thorny subject of validation, of my right honourable friend putting himself above the law. But specifications under this clause are of course subject to judicial review in the normal way. We are not talking in this part of the Bill about avoiding litigation at all.
Several noble Lords mentioned Section 23 of the 1982 Act. There is a power for the Secretary of State to make regulations on accounts. There is no requirement for those regulations to conform to proper practices; yet Section 15 requires the auditor to satisfy himself that the regulations and any other statutory conditions are complied with, as well as satisfying himself that proper practices have been observed. The short answer is that in the end the auditor will have to have regard to the specifications in the same way as he must have regard to any other statutory requirement. He could not fault an authority for following the law.
However, the Acts of 1980 and 1982 are about auditors and what we are talking about now are the practices operated by accountants in local authorities. I have to advise the House that the code to which the noble and learned Lord, Lord Simon of Glaisdale, referred is indeed about audit. It is a code of audit practice, prescribing the way in which auditors are to carry out their functions. It does not deal with how accounts are kept. Therefore the provisions of the Bill do not run contrary to the 1982 Act. As I explained, Section 15 of that Act requires the auditor to satisfy himself that regulations under Section 23 of the 1982 Act and all other statutory provisions applicable to accounts are complied with. I emphasise that there has been no change in the Government's approach. Clause 2(5) has always been in the Bill and makes proper practices in subsection (3) have effect subject to specifications.
I must confess that the noble and learned Lord, Lord Silkin, somewhat confused me, because I understood him to say, would not object to the Bill overriding proper practices if they are different". He was picking up the point made by my noble friend Lord Campbell of Alloway. But in that situation some proper practices, by definition, would have to be overridden.

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Therefore why are the words in the government amendment offensive to noble Lords opposite?
Lord Silkin of Dulwich: My Lords, before the noble Lord sits down, I wonder whether we could put the question the other way round. He is saying that those words are not necessary because they are already inherent in the Bill. If they are not necessary, why does he want to put them in?
Lord Skelmersdale: Because, my Lords, they remove a doubt and, as I said earlier, they make explicit what is already implicit in the Bill. Therefore I cannot see why there are grounds for complaint.
Lord Bruce of Donington: My Lords, as an accountant who has had some 50 years in general practice and who can, I hope, therefore speak with some knowledge of the matter under review—
Lord Tordoff: My Lords, with respect to the noble Lord, the Minister has wound up. This is the Third Reading of the Bill and I should have thought that was the end of the matter.
Baroness Fisher of Rednal: My Lords, with the leave of the House, will the Minister answer the question I posed to him?
Lord Skelmersdale: My Lords, yes. I am sorry. With the leave of the House, we intend to apply some specifications for 1987–88.
Baroness David: My Lords, everything the Minister has said has made me feel that we were rightly suspicious about these subsections in the Bill all the time. I am very glad of the support I have had from noble and learned Lords and also from the noble Lord, Lord Kilmarnock, whose name indeed appears on the amendment. We are not satisfied with the Minister's reply, nor with the brave words of his supporters on the Government Benches. I think we must test the opinion of the House.
3.35 p.m.
On Question, Whether the said amendment (No.2), as an amendment to Amendment No.1, shall be agreed to?
Their Lordships divided: Contents, 96; Not-Contents, 118.

DIVISION No.1

CONTENTS

Airedale, L.

Brockway, L.

Amherst, E.

Brooks of Tremorfa, L.

Annan, L.

Bruce of Donington, L.

Ardwick, L.

Carmichael of Kelvingrove, L

Avebury, L.

Chitnis, L.

Aylestone, L.

Cledwyn of Penrhos, L.

Banks, L.

Cudlipp, L.

Beswick, L.

David, B.

Birk, B.

Davies of Penrhys, L.

Blease, L.

Dean of Beswick, L.

BIyton. L.

Denington, B.

Bonham-Carter. L.

Denning, L.

Boston of Faversham, L.

Diamond, L.

Bottomley, L.

Donaldson of Kingsbridge, L.

Briginshaw, L.

Elwyn-Jones, L.

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Ewart-Biggs, B.

Mayhew, L.

Ezra. L.

Mishcon, L.

Falkland. V.

Molloy.L.

Fisher of Rednal, B.

Morton of Shuna, L.

Fitt, L.

Nicol, B.

Foot, L.

Northfield, L.

Gallacher, L.

Ogmore, L.

Gladwyn. L.

Oram, L.

Glenamara, L.

Phillips, B.

Graham of Edmonton, L.

Pitt of Hampstead, L.

Hampton, L.

Ponsonbv of Shulbrede, L. [Teller.]

Hanworth. V.

Hayter, L.

Prys-Davies, L.

Henderson of Brompton, L.

Rathcreedan. L.

Henniker, L.

Reilly, L.

Hirshfield, L.

Ross of Marnock, L.

Houghton of Sowerby, L.

Rugby. L.

Hunt. L.

Sainsbury, L.

Irving of Dartford, L.

Seear, B.

Jeger, B.

Serota, B.

Jenkins of Putney. L.

Silkin of Dulwich, L.

John-Mackie, L.

Simon, V.

Kearton. L.

Simon of Glaisdale. L.

Kennet, L.

Stallard, L.

Kilmarnock. L.

Stedman. B. [Teller.]

Kirkhill. L.

Stewart of Fulham. L.

Leatherland, L.

Strabolgi. L.

Listowel, E.

Taylor of Blackburn, L.

Llewelyn-Davies of Hastoe, B.

Tordoff, L.

Lloyd of Hampstead, L.

Underhill, L.

Lloyd of Kilgerran, L.

Wallace of Coslany. L.

Lockwood, B.

Wigoder, L.

McCarthy, L.

Williams of Elvel, L.

McNair, L.

NOT-CONTENTS

Ailesbury, M.

Gibson-Watt, L.

Aldington, L.

Gormanston, V.

Alexander of Tunis, E.

Greenway. L.

Allenby of Megiddo, V.

Gridley, L.

Auckland. L.

Grimthorpe, L.

Beaverbrook. L.

Hailsham of Saint Marylebone. L.

Belhaven and Stenton, L.

Bellwin, L.

Halsbury, E.

Beloff, L.

Harmar-Nicholls. L.

Belstead, L.

Hesketh, L.

Bessborough, E.

Hives, L.

Biddulph, L.

Home of the Hirsel, L.

Blyth. L.

Hood, V.

Borthwick, L.

Hooper, B.

Boyd-Carpenter, L.

Hylton-Foster, B.

Brabazon of Tara, L.

Inglewood, L.

Brougham and Vaux, L.

Kaberry of Adel, L.

Broxbourne, L.

Killearn, L.

Butterworth, L.

Kimball. L.

Byron, L.

Kinloss, Ly.

Caccia, L.

Kinnaird, L.

Caithness, E.

Kinnoull, E.

Cameron of Lochbroom, L.

Lane-Fox, B.

Campbell of Alloway, L.

Lauderdale, E.

Campbell of Croy, L.

Layton, L.

Carnegy of Lour, B.

Lloyd-George of Dwyfor, E.

Carnock, L.

Lovat, L.

Chalfont, L.

Manchester, D.

Chelwood, L.

Margadale, L.

Cottesloe, L.

Marley, L.

Craigton, L.

Merrivale, L.

Cullen of Ashbourne, L.

Mersey, V.

Davidson, V. [Teller.]

Middleton, L.

De Freyne, L.

Milverton, L.

Denham, L. [Teller.]

Molson, L.

Dormer, L.

Morris, L.

Dundee, E.

Mottistone, L.

Eccles, V.

Munster, E.

Effingham, E.

Murton of Lindisfarne, L.

Ellenborough, L.

Nugent of Guildford, L.

Elliot of Harwood. B.

Orr-Ewing, L.

Elton, L.

Pender, L.

Erroll of Hale, L.

Portland, D.

Fanshawe of Richmond, L.

Quinton, L.

Gainford, L.

Reay. L.

951

Renton, L.

Strange, B.

Richardson, L.

Strathcarron, L.

Romnev, E.

Sudeley, L.

Roskill, L.

Terrington, L.

St. Aldwyn, E.

Teviot, L.

Saint Oswald, L.

Tranmire, L.

Sanderson of Bowden, L.

Trefgarne, L.

Sandford, L.

Vaux of Harrowden, L

Sandys, L.

Vickers, B.

Schon, L.

Ward of Witley, V.

Selkirk, E.

Whitelaw, V.

Shannon, E.

Wise, L.

Sharpies. B.

Wolfson, L.

Skelmersdale, L.

Young, B.

Stodart of Leaston, L.

Resolved in the negative, and amendment to the amendment disagreed to accordingly.
On Question, Amendment No.1 agreed to.
3.44 p.m.
Clause 4 [Validation for past and general provision for future]:
Lord Silkin of Dulwich Lord Silkin of Dulwich moved Amendment No.3:
Page 5, line 16, at end insert—
("and within 28 days after the passing of this Act and thereafter after the making by a court of any such decision, the Secretary of State shall lay before Parliament a report setting out each such decision and the effect upon it of this section.").
The noble and learned Lord said: My Lords, I beg to move Amendment No, 3 and with the leave of the House will take with it Amendment No.4. These are corresponding amendments to Clause 4 and Clause 6 respectively. Your Lordships will have very clearly in your recollection the debates that we had on Clauses 4 and 6 in relation to the major point of principle in this Bill; that is, the extent of the retrospective validation provisions.
At the Committee stage, an amendment was moved to restrict fairly heavily those provisions and after a very substantial debate it was defeated by four votes. On Report, a rather less restrictive amendment was moved and discussed and that was defeated by two votes. We have resisted the temptation to secure parity by moving yet another amendment on similar lines. We have accepted that the view of the House, however narrow, is that the wider provision should be permitted, much as we regret it and wrong as we believe it to be.
But having accepted that view, we then set out on a damage limitation route. We said in circumstances where the Secretary of State has performed in the past a number of actions which may fall within the provisions of Clause 4 and Clause 6—that is to say, which, although illegal, are validated by this legislation—it must surely be right that both Parliament and local authorities should know, if not what all those actions by the Secretary of State are, at least what decisions consequent upon those actions have been made by the courts and will, by virtue of the provisions of this legislation, be upset and of no effect.
By this amendment we are seeking to ask the Secretary of State in relation to any decisions of the court which have already been made—and there cannot be any doubt whatever as to what those decisions are—to inform Parliament of those decisions within what we think is the perfectly reasonable time
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of 28 days from the passing of the Act, since he must be aware of the decisions and the effect of those decisions upon the validating legislation.
That will have the result that not only will Parliament be aware of what this legislation has done and be in a position in any particular case, I suppose, to debate it if it so wishes, which is right and proper, but—and perhaps in this context even more important—local authorities which are not directly concerned with a particular decision will know that the decision, in the view of the Secretary of State, is of no effect and therefore that, if they agree with the Secretary of State's view, they will be able to take no account of that decision. It must be right that local authorities should know of these matters so that they can order their steps accordingly.
Of course, in the ordinary case of legislation of this kind, it arises because a particular court decision has been made contrary to the view of the Secretary of State and it is that decision which is to be set at nought, so everybody knows where he is. Here we have a whole row of possible decisions. I do not know what they are and I am not sure whether the Minister knows what they are. For example, do they include the recent decision in the Greenwich case? I do not know. Perhaps the Minister will tell us whether that decision is one which is affected by this legislation.
The Minister stated on a previous occasion that there is either the intention to appeal or to give consideration to an appeal. If that is so, perhaps it is thought by the Secretary of State that the Greenwich decision will not be affected by the legislation. There is hardly any reason to appeal if the decision is to be set at nought in any case. I mention that because it is the kind of problem that local authorities will be involved in unless they are told clearly of the court decisions which are involved and which will be set at nought by this legislation.
The amendment deals not only with decisions taken before the passing of the Act but also with decisions made after the passing of the Act. I think that the Minister agreed with me during our discussions at Report stage that, as lawyers say, cadit quaestio in relation to those decisions, because decisions made after the passing of the Act would necessarily have regard to the legislation. Nonetheless, it is the Government's legislation which speaks of,
"before or after the passing of the Act".
It is only for that reason that the amendment has been framed in such a way as to require the Secretary of State to inform Parliament not only of decisions which are no longer effective and which have already been taken before the Bill becomes law, but also, should there be any, of decisions taken after the passing of the Bill which are equally set at nought as a result of this legislation.
I am sure that the House will take the view that this is a very modest request which is perfectly reasonable in the circumstances. I hope that the Minister will have no hesitiation in saying that he accepts the amendment
Lord Campbell of Alloway: My Lords, this amendment, like all amendments, has to be seen in perspective. To start with, surely the decision of the

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court referred to in Clause 4(6) relates to a handful of outstanding cases which are in the pipeline. At most there will be perhaps a dozen, as the noble and learned Lord, Lord Silkin, has shrewdly said. We do not quite know, and for the purpose of making a short speech I shall assume that there are between half a dozen and a dozen.
By virtue of Clause 4(1), the deeming provisions apply. Therefore, what is the useful, practical purpose of this amendment? It is said that the other authorities ought to know. I agree with the noble and learned Lord; they ought to know, and that is common ground. What I cannot understand is why the Secretary of State should have to lay a report on each decision before Parliament so that other authorities will know. After all, there are law reports and there is the press. One can get a transcript of a High Court judgment. I am not trying to be difficult or to take small points. However, I do not see the necessity or the logic of the reasoning.
Furthermore, why should Parliament, including your Lordships' House, be concerned with any report of such cases. I am not sure whether in the circumstances parliamentary procedures are apt or requisite. Why should the Secretary of State have all the trouble of laying a report? It is not simply a question of the trouble to the Secretary of State. Your Lordships may, well think—I do not know—that it is not appropriate for the Secretary of State to lay before Parliament and to advise Parliament on questions of mixed fact and law, for such would, in effect, be the result.
Lord Silkin of Dulwich: My Lords, I am obliged to the noble Lord for giving way. Surely it must be the province of the Secretary of State to inform Parliament and local authorities of his view. That view will dictate the question of whether in future he will oppose the decision of the court on the ground of "no effect".
Lord Campbell of Alloway: My Lords, I am grateful to the noble and learned Lord. I approached this cautiously because he was of course a Law Officer. I said: "Your Lordships may well think". I have some doubts about that, because I suggest for the consideration of the noble and learned Lord and your Lordships that it does not lie within the province of the Secretary of State to interpret or expand upon any decision of the judiciary by any means such as a report to Parliament. If Parliament seeks advice, I always thought that that would lie within the province of the Law Officers who advise the House objectively without wearing the hat of whichever party it may be.
I find it difficult, as your Lordships will have understood, to discern the purpose of the amendment. The useful purpose and the justification for it is not understood. So far as I am aware, although your Lordships may know otherwise, it creates an extraor-dinary precedent of questionable value, applicable only to a mere handful of cases.
Perhaps I may knock the constitutional issue on the head once and for all. As the noble and learned Lord, Lord Silkin, so objectively accepts and has accepted throughout the Committee stage, the Report stage and again today, there is no constitutional issue unless
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Clause 4(1) is too widely drafted. I am very grateful to the noble and learned Lord for taking the point and nodding. That is the way that the debate has run between these Benches and noble Lords opposite. It is the crossfire from the Cross-Benches which has confused the order of the debate. Ignoring that crossfire and taking the point of the noble and learned Lord, Lord Silkin, who has felt all the way through as he feels today on the straight, objective and totally reasonable constitutional issue, and taking the point that that issue has now been lost (albeit by a narrow margin) and that the House has decided that Clause 4(1) is not too widely drafted, there is no constitutional issue.
Lord Denning: My Lords, I should like to support the amendment. I take the simple instance of a judge in a court of first instance who gives a decision and who is overruled by the Court of Appeal. The law is then known to all and the reasons have been given by the judge of first instance. Everyone knows the reasons why it has been overruled. The same reasoning applies here. A decision is given by a judge on the law as he understands it and on the facts as he understands them.
By this Act that decision will be rendered inoperative for reasons not previously disclosed. Is it not right that the reasons his decision is inoperative should be recorded and made known? It is perfectly simple to lay the report before Parliament. It is no trouble to anybody. It is simply like the record of a Court of Appeal reasoning. I support the amendment.
4 p.m.
Lord Harmar-Nicholls: My Lords, I do not think that it is as simple as the noble and learned Lord suggests. If the Minister was committed to making a report of his decisions, it would have to be done as a report with all the paraphernalia within departments that goes with a report. I do not think it is as simple as the noble and learned Lord suggests and in most cases it would put an unnecessary burden on the department that had to do it.
I intervene in what is usually a lawyers' argument because I recognise this amendment as a ploy. It is a ploy as old as the hills and as old as Parliament itself. One would accept everything the noble and learned Lord, Lord Silkin, has said if this stood alone and if there were no ways of finding out the reasons for a report and what was behind a decision. I would agree with him if it stood alone and there was no way of getting at it. But this is being passed within the parameters of Parliament itself and all the powers are there—Question Time, special debates and opportunities for interested Members to have contact with the Minister in a way that always has to be answered in detail. The noble and learned Lord argued that it is right that it should be known how the decision has been arrived at, but instead of formalising it in the form of a report it is already within the parameters of the parliamentary procedures, about which we all know and which have been operating for a long time.
The noble and learned Lord and I sat in another place for a good many years. Such an amendment would not usually come up on Third Reading there. Generally speaking, to try to pretend that something

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stands separate and alone and ignore all other safeguards which Parliament and its procedures already provide is not looking at the matter correctly. If there were an obligation to put in these reports I do not think it would be as simple and as inexpensive as was suggested by the noble and learned Lord who has just sat down.
Lord Skelmersdale: My Lords, we seem to be becoming a little emotional this afternoon in this Chamber. A "con" was the word used on the last amendment; a "ploy", says my noble friend. Perhaps I may try to be a little more rational and say that in my hands I hold a report. It is commonly known as Hansard. It is of course the House of Lords Official Report. In answer to the noble and learned Lord, Lord Silkin, to whom I listened with great care when he moved his amendment—and I have to say that for the first time I have understood what noble Lords opposite are getting at in proposing it—I remind the House of what I said on 23rd February last, at col. 78 of the Official Report of the Report stage of this Bill. I said that the Greenwich multiplier case,
"is about a future decision which the Bill does not validate at all".
We all make great play of the Official Report in this House. We use it as a work of reference that is always current. If that report is not read and understood both by ourselves and by our miscellaneous advisers, what hope is there for any other report such as the one which we are being asked to consider in these two amendments?
The noble and learned Lord wants Parliament to know about any decisions of the court which are overridden by Clause 4(1) and Clause 6, and what effect those clauses have on the working, or the making, as it says in the amendment, of those decisions. It may be helpful therefore if I explain again what Clause 4(6) and Clause 6(4) actually do. It is important to bear in mind that Clause 4(1) and Clause 6(1) to (3) only validate certain things done before the passing of the Bill. The noble and learned Lord said that he was tempted to have another crack at validation but decided that this was not (dare I use the word?) proper. Anyway, for whatever reason, he has admitted that he decided not to do it today.
Those clauses do not validate anything done after the passing of this Bill. We have also explained that if a court hears a case before the passing of this Bill, the correct course is for it to ignore the provisions of the Bill and to judge the case on the existing law. That is what has happened in the Islington and Greenwich cases which the Government have conceded on the basis of the existing law because of the total expenditure problem, and that is why the Government are in the process of conceding the case brought by South Yorkshire Passenger Transport Association.
However, once the Bill receives Royal Assent it will be an Act and the courts will have to take it into account in reaching their decisions and give effect to its provisions. The reason for the reference to court decisions after the passing of the Act, a matter about which the noble and learned Lord, Lord Denning, asked, in Clause 4(6) and Clause 6(4) was to deal with the remote possibility of a decision being given after the passing of the Bill in a case which was argued fully
956
before the passing of the Bill and therefore did not and could not take account of the provisions of the Bill. It was to complete, if you like, the validation exercise which we have discussed at such length over previous stages of the Bill.
The purpose of Clause 4(6) and Clause 6(4) was therefore to make it absolutely clear that things declared ultra vires in cases such as those in Greenwich or Islington were to be validated by the provisions of Clause 4(1) and Clause 6(1) to 6(3). We did not want to leave scope for argument about this. But I stress again that future decisions are not affected by the Bill and that after Royal Assent a court will take account of the provisions of the Bill and give effect to them in the normal way.
I must echo the question of my noble friend Lord Campbell of Alloway to the noble and learned Lord, Lord Silkin. What would this report, or, if there were more than one, these reports, do? I do not know of any court decisions in rate support grant cases at the moment which are contrary to Clause 4(1). Nor do I expect any to be heard before Royal Assent. I do not expect any to be heard after Royal Assent to be contrary to Clause 4(1) because they will have to take account of the provisions of the Bill—the validation provisions.
In relation to Clause 6(4), we already know about the Greenwich, Islington and South Yorkshire Passenger Transport Association cases. We have already discussed them in detail and at length. I cannot see what purpose any report mentioning them would have. Again, I do not expect any other cases to be heard before Royal Assent. Any cases heard after Royal Assent will not be contrary to Clause 6(1) to 6(3) because they will take into account the provisions of the Bill. I ask again; what purpose would such a report serve? Parliament could do nothing about it.
Finally, I suggest that there is an important point to make about the report to which the noble and learned Lord has referred. He asked the Secretary of State to set out the effect on each decision of Clause 4(1) or Clause 6(1) to 6(3), as the case may be. It is not—I agree with my noble friend Lord Campbell—for the Secretary of State to declare the effect of his legislation on such decisions. It is for the courts themselves to do this. This Bill, like any other, will be interpreted by the courts. If there is argument, it is for them to decide the effect of its provisions. I do not consider therefore that it is at all appropriate to require the Secretary of State to report to Parliament on the effect of the provisions of a particular decision taken in a particular court. For all those reasons I urge the noble and learned Lord to withdraw the amendment.
Lord Silkin of Dulwich: My Lords, I certainly do not intend to do that and I have no doubt that we shall want to test the matter. I was asked: what is the purpose of the report? The noble Lord, Lord Harmar-Nicholls, made the process of a report by the Secretary of State sound a little like passing legislation through all stages of Parliament. The Secretary of State is perfectly well aware today which cases being heard in the courts he regards as being made ineffective or partly ineffective. There may be a few more cases between now and the passing of the Act, but in all probability there will not be. If a judge made more

957
than one finding it is possible that one of the findings would be ineffective as a result of this legislation and other findings would be effective.
All that we are asking is not some great departmental farrago but something which I should hope is within the powers of the Department of the Environment without having to correct itself a fortnight later; that is, to set out case one, case two and case three and the view that the Secretary of State will be following in relation to those cases: for example, that this case is wholly ineffective, the next case is ineffective except to the extent of a particular matter which is not affected by this legislation, and the other case is not affected at all. That is so simple that it is difficult for me to understand why such a tremendous fuss is being made.
I have been asked what advantage will be served. It will involve local authorities who are directly affected and who, in any case, might be privately informed; but much more important it will serve to make others, who will know of such cases as the Greenwich and Islington cases mentioned by the noble Lord, aware of what are the Secretary of State's views with regard to the future of those cases. It is nothing more than that.
It will also make Parliament aware, and if Parliament takes a view that raises a question of principle we will be able to raise that question. The only reason for the report to Parliament is that that is the most convenient way of doing it. It is absurd for the Minister to ask: what is Parliament's concern? If he can suggest some other way of accomplishing the same objective, well and good; but he seemed to object altogether to the whole idea of the Secretary of State coming out into the open and saying, "This is the view that I take on certain cases which the courts have already heard". It makes one suspicious that there may be something behind this when the Minister rejects a very simple, innocent and modest suggestion which we have made for the purpose of improving the way in which a difficult Act will be administered in the future. It is not in any sense what the noble Lord, Lord Harmar-Nicholls, referred to as a ploy, if indeed I understand what that term means; and I am not sure that 1 do.
We believe this matter should be put to the test of whether the House is prepared to incorporate into the Bill an improvement which will do no more than allow people affected in one way, directly or indirectly, to know where they stand in the future. It is nothing more than that.
4.13 p.m.
On Question, Whether the said amendment (No.3) shall be agreed to?
Their Lordships divided: Contents, 98; Not-Contents, 119.

DIVISION No.2

CONTENTS

Airedale, L.

Birk, B.

Amherst, E.

Blease, L.

Ardwick, L.

Blyton, L.

Attlee, E.

Bonham-Carter. L.

Aylestone, L.

Boston of Faversham, L

Banks. L.

Bottomley, L.

958

Brockway, L.

Leatherland. L.

Brooks of Temorfa, L.

Listowel. E.

Bruce of Donington. L.

Llewclyn-Davies of Hastoe, B

Caradon, L.

Lloyd of Kilgerran, L.

Carmichael of Kelvingrove, L.

Lockwood. B.

Cledwyn of Penrhos, L.

McCarthy, L.

Cudlipp, L.

McGregor of Durris. L.

David, B.

McNair. L.

Davies of Penrhys, L.

Mayhew, L.

Dean of Beswick, L.

Mishcon, L.

Denning, L.

Molloy, L.

Diamond, L.

Morton of Shuna, L.

Donaldson of Kingsbridge, L.

Nicol, B.

Elwyn-Jones, L.

Northficld, L.

Ewart-Biggs, B.

Oram, L.

Ezra, L.

Phillips, B.

Falkland, V.

Pitt of Hampstead, L.

Fisher of Rednal, B.

Ponsonby of Shulbrede, L. [Teller.]

Fitt, L.

Fletcher, L.

Prys-Davies, L.

Foot, L.

Rathcreedan, L.

Gallacher, L.

Rea, L.

Galpern, L.

Reilly, L.

Gladwyn, L.

Rugby, L.

Glenamara, L.

Sainsbury, L.

Graham of Edmonton, L.

Seear, B.

Greenway, L.

Serota, B.

Grimond, L.

Shepherd, L.

Hampton, L.

Silkin of Dulwich, L.

Hanworth, V.

Simon, V.

Harris of Greenwich, L.

Stallard, L.

Hatch of Lusby, I.

Stedman, B. [Teller.]

Henniker, L.

Stewart of Fulham, L.

Heycock, L.

Stoddart of Swindon, L.

Houghton of Sowerby, L.

Strabolgi, L.

Hunt, L.

Taylor of Blackburn, L.

Hutchinson of Lullington, L.

Tavlor of Mansfield, L.

Irving of Dartford, L.

Tordoff, L.

Jeger, B.

Underhill, L.

Jenkins of Putney, L.

Wallace of Coslany, L.

Kearton, L.

Whaddon, L.

Kennet. L.

Wigoder, L.

Kilmarnock, L.

Williams of Elvel, L.

Kirkhill, L.

NOT-CONTENTS

Alexander of Tunis, E.

Ellenborough, L.

Allenby of Megiddo, V.

Elliot of Harwood, B.

Auckland, L.

Elton, L.

Beaverbrook, L.

Erne, E.

Beloff, L.

Faithfull, B.

Belstead, L.

Gainford, L.

Bessborough, E.

Gibson-Watt, L.

Biddulph, L.

Gormanston, V.

Blyth, L.

Gray of Contin, L.

Borthwick, L.

Gridley, L.

Boyd-Carpenter, L.

Grimthorpe, L.

Brabazon of Tara, L.

Hailsham of Saint Marylebone, L.

Brougham and Vaux, L.

Broxbourne, L.

Halsbury, E.

Bruce-Gardyne, L.

Harmar-Nicholls, L.

Butterworth, L.

Hesketh, L.

Byron, L.

Hives, L.

Caithness, E.

Home of the Hirsel, L.

Cameron of Lochbroom, L.

Hood, V.

Campbell of Alloway, L.

Hooper, B.

Campbell of Croy, L.

Hylton-Foster, B.

Carnegy of Lour, B.

Ilchester, E.

Carnock, L.

Inglewood, L.

Chalfont, L.

Ingrow, L.

Chelwood, L.

Kaberry of Adel, L.

Cottesloe, L.

Killearn, L.

Crawshaw, L.

Kimball, L.

Cullen of Ashbourne, L.

Kinloss, Ly.

Davidson, V. [Teller.]

Kinnaird, L.

De Freyne, L.

Lane-Fox, B.

Denham, L. [Teller.]

Lauderdale, E.

Drumalbyn, L.

Layton, L.

Dundee, E.

Lindsey and Abingdon, E.

Eccles, V.

Lloyd of Hampstead, L.

Eden of Winton, L.

Lloyd-George of Dwyfor, E.

959

Long. V.

Sanderson of Bowden, L

Vlargadale. L.

Sandford, L.

Vtarley. L.

Sandys, L.

Vterrivale, L.

Selkirk, E.

Mersey. V.

Shannon, E.

Middleton, L.

Sharpies, B.

Vlilverton, L.

Skelmersdale, L.

Vlontagu of Beaulieu, L.

Slim, V.

VIorris, L.

Somers, L.

Vlottistone, L.

Stodart of Leaston, L.

Mowbray and Stourton, L.

Strathcarron. L.

Vlunster. E.

Sudeley, L.

Vlurton of Lindisfarne, L.

Terrington, L.

Slathan. L.

Teviot, L.

Nugent of Guildford, L.

Teynham, L.

Orr-Ewing, L.

Torrington, V.

Portland, D.

Tranmire. L.

Quinton, L.

Vaux of Harrowden, L.

Reay, L.

Vickers, B.

Renton, L.

Ward of Witley, V.

Richardson, L.

Westbury, L.

Romney, E.

Whitelaw, V.

St. Aldwyn, E.

Wolfson. L.

Saint Oswald. L.

Wyatt of Weeford, L.

Salisbury, M.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
4.20 p.m.
Clause 6 [Validation of past acts]:
[Amendment No.4 not moved.]
Clause 7 [Restrictions on rating and precepting]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No.5:
Page 6. line 39, leave out ("and").
The noble Lord said: My Lords, I trust that it will be convenient to the House if I speak also to Amendments Nos. 6, 9, 10, 12, 13, 14, 17, 18, 19 and 20. The major amendments, Nos. 9, 10, 12, 13, 14, 17, 18, 19 and 20, are all to Schedule 2 of the Bill. They either fulfil the undertaking that I gave at Report stage to bring forward an amendment to the formula for determining rate limits for newly selected authorities or are minor drafting amendments in the light of the helpful amendment to Schedule 2 brought forward by my noble friend Lord Renton at Report stage.
Amendments Nos. 5 and 6 affect Clause 7 and are consequential on the amendments to the formula in Schedule 2. As I explained on Report, in the light of the information available to us, including the matters which the noble and learned Lord, Lord Elwyn-Jones, brought to the attention of the House, we concluded that the formula for determining the limits for newly selected authorities should be amended so as to give such authorities headroom to spend up to at least a level equivalent to their grant related expenditure plus 9 per cent. I undertook to bring forward an amendment for newly selected authorities for which the figure of grant related expenditure GRE x 1.09 exceeds expenditure limit EL x 1.02, so that the formula then in paragraph 2(2) of Schedule 2 would apply with the addition of an R factor.
Amendment No.14, together with consequential amendments Nos. 5 and 6, would achieve that. On the basis of the current intentions of my right honourable friend the Secretary of State for the 1987–88 rate support grant settlement, these amendments would
960
result in an increase of some 3p and 44p respectively in the intended rates for Gateshead and Newham.
The amendments in this group ensure that my noble friend's approach to the drafting of Schedule 2 is fully carried through. I am sure the House will agree that the schedule commencing with definitions and explanations of the terms in the formulae, followed by the formulae themselves, is an improvement in clarity of drafting and ease of comprehension. I am most grateful to my noble friend. I commend these amendments to the House, and I beg to move.
Lord Elwyn-Jones: My Lords, I am most grateful to the noble Lord, Lord Skelmersdale, for these amendments. To say that I understand them fully and clearly would be a gross exaggeration, but I understand the purport of them to be beneficial in particular to the areas of Newham and Gateshead. There have been useful discussions, if I may say so, and it is gratifying that they have borne some fruit. The amendments that the Minister has brought forward will remove the anomalous position in which Newham in particular was adversely placed compared with other rate-capped authorities by the Bill's original proposals. It is a very harassed area and I know that this improvement will give some comfort to those who would otherwise have been anomalously and adversely affected.
Lord Renton: My Lords, I leave aside the amendments that follow from the valuable represent-ations made by the noble and learned Lord during the earlier stages of the Bill. I should like just to refer to the general function of your Lordships' House as illustrated by what has happened to this schedule. That function is a divided one. I moved certain amendments, which had the support of both sides of your Lordships' House, in order to improve the understanding of the second schedule but, being a mere Back-Bencher and not a draftsman, all that I could do was to move the fundamentals. I realised that there would have to be some tidying up by the Government. That has been done and I am grateful to my noble friend, who has shown an open mind on this matter. I think that your Lordships' House can justly claim that on this very complicated matter it has performed its function well as a revising Chamber.
Baroness David: My Lords, I want to make just one comment about these amendments as they affect Newham and Gateshead. I am absolutely delighted that the Government have listened to the pleas of my noble and learned friend and that there has been a change in the formula which affects Newham and Gateshead. However, the House ought to be fully aware of the fact that the amendments put forward by the Government do not mean that they are presenting more money to Newham. In fact Newham will lose grant as a result of these amendments. What will happen is that these authorities will be entitled to ask for more money from their ratepayers. They will have more to spend but the extra will be coming from the ratepayers and not from the Government. Before too big a "thank you" is given to the Government, it is important that we should all be aware of that fact.
Lord Skelmersdale: My Lords, as I moved the amendment, I think it appropriate if I parry the iron

961
fist in the velvet glove of the noble Baroness, Lady David, that has just appeared across the Dispatch Box. The Government have provided only an upper limit for the raising of amounts of rates from individual ratepayers from the rate-capping exercise. It is entirely within the powers of the rate-capped local authorities and precept limited authorities not to spend up to that rate. If they spend the full amounts, clearly they will lose grant, but not all rate-capped authorities do so. The noble Baroness may remember the case of Newcastle, which was rate-capped for the first time last year. Newcastle had a head limit and managed to levy a rate well under it.
Lord Somers: My Lords, there is one final matter that I should like to raise. I think that those mysterious initials are comprehensible to most people who read the Bill but they may not be understood by all. Would it be a good thing if a translation of them were given in the clause which includes the other definitions?
Lord Skelmersdale: My Lords, with the leave of the House, perhaps I may say that when the noble Lord actually sees the Bill he will find that each of the—I was going to say "anachronisms" but that is the wrong word—acronyms in the Bill are defined. I think that that will solve his problem.
On Question, amendment agreed to.
4.30 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No.6:
Page 6, line 43, at end insert ("and
(d) the amount which in accordance with that Schedule he estimates as DBG in relation to the authority (in a case where DBG is a component of the maximum limit in relation to the authority).".
The noble Lord said: My Lords, I beg to move.
On Question, amendment agreed to.
Baroness David Baroness David moved Amendment No.7:
After Clause 8, insert the following new clause:
("Compensation to Authorities.
.—The Secretary of State shall reimburse a local authority for—

(a) any additional expenditure incurred or expenditure rendered abortive by it as a consequence of the provisions of this Act:

(b)expenditure incurred by it as a result of any change between 14th January 1987 and the laying of the report under section 7(5) of this Act in the information provided by the Secretary of State in connection with the calculation and determination of block grants to that authority.").

The noble Baroness said: My Lords, this new clause, with a consequential amendment to Clause 15, is intended to raise issues relating to compensation of authorities left unresolved at Report stage. Amendment No.17 then raised practical instances of extra expenditure incurred during the Bill's passage. Amendment No.8 sought to raise the issues of principle. This new clause is intended to provide for compensation wherever it arises under the Bill.
At Report stage Amendment No.8 sought to provide for compensation to authorities which had incurred extra expenditure as a result of the retrospective provisions relating to accountancy practice under Clause 5. The Opposition made it clear that the costs were likely to have been small but that the principle was nonetheless an important one.
The Minister left the position unclear. He said that Clause 5 would not mean that authorities would need to undertake expensive re-presentation of their accounts. That is accepted. However, it does not rule out the possibility of some costs. Furthermore, the Minister added an intriguing rider (at col. 753 of the Official Report) when he said that, although he understood the intention of the amendments to provide compensation,
"this certainly is not the right place to put them".
In other words, he appeared to concede that there was a possible role for compensation provisions in the Bill.
My noble and learned friend Lord Silkin raised the question of possible extra cost arising from the retrospective validation provisions in Clauses 4 and 6. The Minister did not answer this point other than to say that the amendment before the House did not refer to these clauses.
Amendment No.17 at Report raised the issue of compensation for authorities which have incurred cost as a result of the DoE's revision of the 1987–88 block grant figures. The date of 14th January in the amendment refers to the day after the letter issued by the DoE on 13th January 1987 which announced the Secretary of State's firm intentions for the 1987–88 RSG settlement. In speaking to the amendment I drew the attention to the administrative chaos caused by the DoE's revision of local authorities probable grant entitlements for 1987–88 which were notified to the authorities in a letter posted 23rd February. I gave some examples of the difficulties and inconvenience caused to a number of authorities—Hounslow, Sunderland on behalf of the Tyne and Wear fire and civil defence authority and Newcastle.
Precepting authorities have to issue their precepts by 10th March—that is, today. Therefore, at the present time the information on which they base their precepts will have to be in accordance with the latest informa-tion from the DoE. This information might be changed before the RSG report and the notice required under Clause 7(5). The Minister in reply, having stated (in col. 768) that he did not accept that some authorities might have to convene extra meetings, corrected himself in respect of Tyne and Wear fire and civil defence authority.
This new clause therefore seeks to deal with the overall question of compensation and to ensure that ratepayers do not suffer further cost arising from the mistakes of a Government who claim to be committed to curbing public spending. I beg to move.
Lord Skelmersdale: My Lords, these amendments seek to introduce a new clause into the Bill which would require my right honourable friend to make payments to local authorities by way of reimbursement for either additional expenditure incurred or expenditure rendered abortive by the Bill or for expenditure incurred as a result of any change we have made to my right honourable friend's intentions for the forthcoming rate support grant settlement as announced on 13th January. I hope that the noble Baroness will agree with me at this point that I have the position right so far.
On report we had two debates on the question of my right honourable friend reimbursing—compensating

963
was the term used at that stage by noble Lords opposite—local authorities for additional cost arising from certain provisions of the Bill or from changes to the firm intentions. I said then that I believed the amendments to provide for such compensatory payments which the noble Baroness, Lady David, had moved were wrong in principle and unnecessary. I have listened to the debate this afternoon but I am afraid that I have not been persuaded to change my views. The single fact is that if local authorities have incurred additional costs because of the Bill or because of changes to the firm intentions—I accept that in some cases such costs have indeed arisen, albeit small for the most part—these costs have been incurred by authorities exercising their own responsibilities towards which it would be quite wrong for central government to make any specific contributions.
At the root of these amendments I detect two propositions. both of which I believe to be false. The first is that the Bill and the changes to the firm intentions have resulted in local authorities having to act in ways which they would otherwise not have contemplated and having to incur considerable extra costs to their ratepayers as a result. The Bill is all about maintaining the status quo. and I do not accept that what we are doing is causing significant changes to the way in which local authorities run their accounting systems and calculate their figures of relevant and total expenditure. Perhaps I may remind the House that the rate fund revenue accounts that we are requiring authorities to keep will be very similar to, if not the same as, the non-statutory accounts authorities have in general kept in the past. Clause 2(3) of the Bill provides that the practices to be followed by authorities are those which were applicable to authorities' accounts—and here I quote from the Bill—
"kept by local authorities for the year beginning in 1986 for the entry of items of the same kind as those falling to be entered in rate fund revenue accounts, but taking into account variations of practice occurring from time to time".
The Bill should not cause material additional expenditure.
On the changes to the firm intentions we very much regret the inconvenience that they have caused local authorities, as I made clear at Report stage. The changes are unwelcome, but we cannot go so far as to say that these changes are requiring local authorities to act in a way which no one could have contemplated. The charges simply do not warrant us making the payments which the amendments would require.
I have read today about Brighton. That is a local authority which reportedly spent 10 hours last Friday fixing a rate and is having to repeat the exercise. The changes to the firm intention were announced last Thursday, and last Thursday also the noble and learned Lord, Lord Elwyn-Jones was putting forward an amendment to the formula in Schedule 2 to the Bill which would have affected Brighton's rate limit as well as Gateshead's and Newham's. On Thursday noble Lords opposite were clearly contemplating the possibility of changing Brighton's limit and on Thursday we announced the changes to the firm intentions. The changes to the firm intentions involved reducing Brighton's intended rate limit by 0.01p in the
964
pound; the amendment of the noble and learned Lord would have increased the intended limit by 0.3p. In short, regrettable though they are, the changes we have made have not resulted in authorities having to act in ways no one contemplated.
I remind the House that it was not only Brighton's intended rate limit which noble Lords opposite were seeking to change. They were seeking to change the limits for the 20 rate-capped authorities and for the 20 precept limited authorities referred to in Schedule 2 of the Bill. These are not just a few changes, but a gargantuan number—no fewer than 40, which I regard as a gargantuan number. I am sorry to disappoint the noble Baroness, Lady Fisher, but I do so regard them. As I said last Thursday on Report the changes have not remotely required authorities to rethink their budgets to any significant degree.
I said that I detected two false propositions underlying these amendments. The second is that the whole saga of the total expenditure problem which has necessitated the Bill and of the 1987–88 rate support grant settlement has been viewed by noble Lords opposite in black and white terms with government as villain and local government as blameless hero manfully bearing the burdens arising from the actions of a guilty government.
The real world is simply not like that. I accept that we made some minor errors in the firm intentions. I have on behalf of the Government regretted them. But as to the changes arising from the Greenwich court case, should we have planned on the basis that we would lose the case? The firm intentions for the settlement were based on a proposal that we would correct the error which I would point out to the House involves assuming that Bromley did not inherit responsibility for any roads from the GLC, whereas obviously they did. My right honourable friend is appealing against the judgment, but in the meantime it is only right that we should submit to the ruling of the court.
I am not seeking to apportion blame or to say that some how all this is local government's fault. Rather what I have said demonstrates the futility of any approach which involves seeking out guilty parties who should be made to pay. There is no question of bad faith. Government and local government together have found, themselves in a situation where neither would want to be. This regrettably has caused inconvenience, and difficulties, to both. But there is no case for one party trying to shift its burdens on to the other.
At the outset I said these amendments were wrong in principle and unnecessary. I hope I have demonstrated to the House why this is so and I recommend the House to reject the amendments.
Baroness David: My Lords. I think the Minister does protest too much! I am glad that he now admits that there have been difficulties and inconveniences to the local authorities. There have been various statements—on 13th January, 23rd February and then on 5th March. There have been constant changes, and although the blame may not be entirely on one side (it very seldom is) in these cases it is local government which has suffered because of the actions of central

965
government, the Department of the Environment and the Secretary of State.
Last time I pointed out a number of cases in which there was real inconvenience to local authorities when extra meetings had to be called which incurred extra costs—for example, in attendance fees for councillors. I hope that I have made the Minister understand. I think from the length of his reply that perhaps he does understand that there have been many difficulties caused by these changes. The rates are still not set and cannot be set until the Rate Support Grant Report is made after this Bill becomes an Act.
Local authorities have had a lot of trouble to put up with. I shall not press these amendments but I am glad that I moved them because it is only fair that somebody should speak up for the people who have had to suffer the inconveniences. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 [Expenses]:
[Amendment No.8 not moved.]
Schedule 2 [Rates: maximum limit]:
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 9 and 10:
Page 11. line 34, leave out from ("formula") to end of line 36 and insert ("(found in accordance with paragraph 4 below).
(2) The maximum limit in relation to a designated authority shall be expressed in pence; and parts of pence shall be calculated to two decimal places only, after adding one hundredth where (apart from this subparagraph) there would be not less than one thousandth.").
Page 11 line 37, leave out ("2 above") and insert ("4 below").
The noble Lord said: My Lords, I spoke to Amendments Nos. 9 and 10 with a previous amendment. I beg to move them en bloc.
On Question, amendments agreed to.
4.45 p.m.
Baroness David Baroness David moved Amendment No.11:
Page 11, line 41, leave out sub-paragraph (3) and insert—
("(3) BG is the aggregate amount (if any) of the block grant estimated to be payable to the authority for the relevant financial year and for this purpose the effect (if any) of sections 62 and 63 of the 1980 Act (adjustments) shall be ignored.").
The noble Baroness said: My Lords, in speaking to this amendment, I should like also to speak to Amendments Nos. 15 and 16. These amendments may look formidable on the Marshalled List; but I should like to say that they are not so bad as they look. I hope that I can make the intention behind the amendments intelligible. The amendments are the direct result of the latest statement by the Secretary of State on rate support grant matters. They deal with one, perhaps unintended, effect of the Secretary of State's changes to the 1978–88 rate support grant.
On 13th January 1987 the Secretary of State gave local authorities his firm intentions for 1987–88 RSG. On 23rd February he changes these intentions as the result of:
"two small errors that we have discovered in the calculation".
That is a quotation from a letter to chief executives from Mr. A. C. B. Ramsay of the DoE.
966
Then on 5th March the Secretary of State wrote to say that he was changing the block grant multipliers as a result of the recent finding in the Divisional Court. That was the Greenwich case. The result of this was to increase the block grant entitlement of some of the rate-capped authorities to whom Schedule 2 applies. But applying increased grant entitlements to the formulae in Schedule 2 means that the maximum rates go down because no change is taking place to the uplifted expenditure in the Schedule 2 algebra.
The worry for these rate-capped authorities is this. The Secretary of State has given notice of appeal against the judgment which forced him to increase the grant entitlements of authorities to whom Schedule 2 applies. What will happen if he wins? Or, what will happen if he loses and then decides to change the law to validate his original proposals for grant? It should be noted that the Secretary of State's last attempt to change the law following the victory against him in the courts became the Rate Support Grant Act 1986, which was the very cause of his downfall in the Greenwich case.
The authorities are very concerned at this uncertainty; and with this uncertainty I am sure the Minister will sympathise. They see a very high risk of their recent gains in grant being ephemeral—here today and gone tomorrow. But, they would be stuck with maximum rates on the basis of a higher grant figure. The results could be to force expenditure down below even the uplifted expenditure levels in Schedule 2.
The amendments seek to protect the authorities from these changes. They would enable the authorities to levy rates on the lowest figure for block grant variously supplied to them by the Secretary of State. The unintended cuts that would otherwise be made are significant, equivalent to a rate in thepound of 8.32p in Greenwich; 1.86 in Hackney, 1.75p in Islington, 0.63 in Lambeth, 4.37p in Lewisham, 5.53p in Tower Hamlets and smaller amounts elsewhere.
In replying to this—and I wonder whether the Minister would like to listen—can the Government deal with the following points: First, had they foreseen this result of their changing determination of block grant; secondly, even if the Government say they would wait for a supplementary report to implement any "clawing back" of the increased grant announced on 5th March, and that supplementary report would not be made until later years, would not authorities still have to cut expenditure to "balance their books" in 1987-88? Thirdly, if these amendments are technically imperfect—but if the Government accept the points that we are making—is not the only thing to do at this late stage (and the need to do it at this late stage is the Government's fault) to accept these amendments and then to amend them in the other place?
We want certainty for these authorities before they have to fix their rates for this year. If the Minister can give an assurance that the situation will not be changed in the course of the year, whatever happens to the court case, and that he will have no more legislation to validate other things, then we shall be happy. I beg to move.
The Deputy Speaker (Lord Aylestone): I must point out that if this amendment is agreed to, I cannot call Amendments Nos. 12 and 13.
Lord Renton: My Lords, I should like to ask the noble Baroness to explain two words in her amendment because I do not think they are necessary. They are in the first line of Amendment No.11; namely, the words: "(if any)" in relation to the block grant.
"the aggregate amount (if any) of the block grant",
Every block grant is an aggregate of its constituent parts, so every block grant must be an aggregate. Therefore, the words "(if any)" must be unnecessary.
Baroness David: My Lords, the noble Lord, Lord Renton, has me puzzled here. I am afraid I cannot answer his point. I have no adviser sitting in a Box who can give me the information I need. I am afraid I shall have to write to the noble Lord later and explain this matter.
Lord Renton: My Lords, I understand the noble Baroness's position. We have all been in that situation from time to time and I sympathise with her.
So far as concerns the amendment, the Deputy Speaker said that if this amendment was accepted he could not call Amendments Nos. 12 and 13. That would be, at least, a pity, and I should have thought really a great shame if we could not move Amendments Nos. 12 and 13 because they seem to be necessary consequentials to the exercise of amending the second schedule.
Quite apart from that, I was puzzled that this amendment was capable of being discussed at all, because I read the record of the Report stage and there does not seem to have been a firm undertaking by my noble friend Lord Skelmersdale to introduce a government amendment or to consider a further amendment on these lines. So in a sense we are not breaking new ground but we are rather stretching, as I understand it, the Report stage rules for the discussion of amendments.
Baroness David: My Lords, if the noble Lord will allow me to intervene, the reason that this amendment could not be brought before was that it arose out of the Statement made by the Secretary of State on 5th March, which was the day we had the Report stage. So this is absolutely the first opportunity to bring in an amendment which would deal with that situation.
Lord RentonYes, my Lords. I quite understand, and I am much obliged to the noble Baroness. I shall be interested to hear what my noble friend has to say about this, but on the face of it I should not have thought that the point was of significance in relation to the Bill as a whole and certainly not of sufficient importance to outweigh the disadvantage of Amendments Nos. 12 and 13 not being called.
Lord Underhill: My Lords, I should like to add a few words in support of my noble friend's amendment. I hope that when the Minister replies he will be able to deal with the three points on which my noble friend asked for definite replies from the Minister, and
968
particularly her second point regarding supplementary reports. I am certain that my noble friend Lady Fisher will appreciate the letter that she received from the Minister, and I should like to read the last but one paragraph. The letter is dated 9th March and it states:
"Authorities also know that these reports".
—which are supplementary reports
"will affect the grant paid to them in some future year—for example, we have indicated that adjustments to the block grant for 1983/84 as a result of the next 1983/84 Supplementary Report will be made in 1988/89 and will therefore affect the grant paid in that year. However, as I mentioned above, we have as yet taken no decisions on such specifications and before doing so we shall consider all the representations made to us".
I wonder how many noble Lords, including myself, really understand what that means. The whole purpose of this Bill is supposed to be to clarify the situation and to help to straighten out any difficulties or misunderstandings that there may be. I wonder how a local councillor would explain the point raised by my noble friend in moving her amendments that an increased grant entitlement—that is more finance from central government—will nevertheless lead to a situation where the maximum permitted rate is lower. I wonder how the average local councillor will explain that to his electorate.
The questions which my noble friend has listed should be answered by the Minister because they are most important. She mentioned the figures of enforced cuts in rates which will be effected by some authorities. I hope that it has not been overlooked by noble Lords that the authorities to which she referred are some of the most deprived authorities with inner city problems. We are dealing with real, vital problems which affect such areas. I am certain that, whatever the Minister says in response to the amendments, he will give firm replies to the three questions posed by my noble friend.
Lord Skelmersdale: My Lords, first of all, the answer to the request of the noble Lord, Lord Underhill, is written down in Hansard for the Report stage, where I made quite clear in answer to an amendment of the noble Baroness, Lady David, exactly what effect rate support grants and supplementary reports had upon the main report and what effect all those things had on local authorities. So I do not think that there is anything obscure about it. Noble Lords, local authorities or officers or officials may wish to read that.
While I am thinking in terms of Lord Underhill's speech, perhaps I may say that the paragraph that he quoted from my letter to his noble friend Lady Fisher explained, I hope quite lucidly, exactly why my right honourable friend has decided to appeal in the Greenwich case. The law as it stands pending the appeal means that the whole supplementary report system, which is a beauty—one of the very few beauties, as I suspect I shall have cause to say a little later on, of our current rate support grant system—is totally undermined by the court's decision on that case. So of course my right honourable friend is appealing.
I must say that noble Lords opposite have used their ingenuity to the full in trying in three amendments now to change the balance in Schedule 2 in favour of

969
the councils and against the hard-pressed ratepayers in the rate capped authorities. This group of amendments cunningly plays on our admitted feelings of regret that certain changes have had to be made to the firm intentions announced by my right honourable friend the Secretary of State on 13th January. We all know why those changes were made and I shall not rehearse the arguments again.
The noble Baroness asked me whether there would be any more changes. I cannot stand here and possibly say anything other than that I have not the faintest idea. Clearly, for reasons which I have just explained to the House, it depends on the result of the appeal in the Greenwich case.
Baroness David: My Lords, if the Minister will allow me to intervene, surely it would be possible to say, for the benefit of the authorities which want to know what their position is when their rate really must be fixed by the end of March, that whatever the result of the case, this year there will be no change? That is really what we want to know.
Lord Skelmersdale: My Lords, as I have no crystal ball and cannot see the future, how can I possibly make a declaration on that particular score? I have no doubt that the noble Baroness knew that perfectly well when she asked me the question.
The effect of the unfortunate but regretful changes to the firm intentions were forced upon us by a mixture of decisions of the courts and incorrect information on which the calculations were based. For most authorities this effect is, as I have said on an earlier amendment, small. However, my noble friend is quite right in thinking that these amendments would totally foul up the amendment which I have just given, to general acclaim, to the noble and learned Lord, Lord Elwyn-Jones, on authorities rate capped for the first time. There is no doubt about that.
These amendments would lead to some rate bills being unnecessarily high by 4p and 5p in the pound and in the case of Greenwich over 8p in the pound. These are not burdens which should lightly be laid on those already borne by ratepayers in the areas concerned.
I suggest that the House should not forget why we have rate capping in the first place. It is to protect ratepayers from the high spending, high rating policies of a few apparently incorrigible authorities. We are quite clear that that policy must be maintained. The increased rate burdens and the spending implied by the amendments would fall in an entirely arbitrary manner which could not possibly be justified. Why should authority X receive additional spending power where it has had its grant entitlement increased because we have been prevented from correcting the Bromley error?
Some have argued that accepting these amendments is the least that we could do to offset the administrative difficulties that have been created by the changes to the Secretary of State's firm intentions since 13th January. No one is more conscious of these difficulties than the Government. We very much regret them. However, I am not convinced that a range of arbitrary increases in rate and precept limits is the right response.
970
The noble Baroness made the most amazing suggestion. She said that the only course to take was to accept these amendments and put the matter right in another place. By the time the Bill reaches another place, it will be another place's consideration of amendments made in your Lordships' House.
Baroness David: My Lords, I was saying that if the amendments were technically wrong, then the technicalities could be put right. I was not suggesting that the substance should be changed.
Lord Skelmersdale: I am glad to hear that, because I hope that I have explained to the House why the principle is wrong and not only the technical problems. However, even if the suggestion related to the technical problems, what an amazing idea it is. The noble Baroness obviously wants to cause more confusion to local authorities and I am glad that she withdrew her amendments on compensation which we have just now discussed. In the noble Baroness's book—according to her speeches on the subject—there would have been perfect justification for her compensation amendments.
Baroness David: My Lords, I do not think that the Minister has understood fully the complications which will ensue for some authorities as a result of the Statement made by the Secretary of State on Thursday, 5th March 1987. There will be great uncertainty and the amendments attempted to remove that.
I should like to press the amendment and test the opinion of the House. If we were to win the vote, I think that the Government could do something about Amendments Nos. 12 and 13 when they are considered in another place.
5.2 p.m.
On Question, Whether the said amendment (No.11) shall be agreed to?
Their Lordships divided: Contents, 88; Not-Contents, 118

DIVISION No.3

CONTENTS

Airedale, L.

Ewart-Biggs, B.

Ardwick, L.

Ezra, L.

Attlee, E.

Fisher of Rednal. B.

Aylestone, L.

Fitt. L.

Banks, L.

Fletcher, L.

Birk, B.

Foot, L.

Blease, L.

Gallacher, L.

Blyton, L.

Galpern, L.

Bonham-Carter. L.

Gladwyn, L.

Boston of Faversham, L.

Glenamara, L.

Broadbridge, L.

Graham of Edmonton, L.

Brockway, L.

Grimond, L.

Bruce of Donington, L.

Hampton, L.

Caradon, L.

Hanworth, V.

Carmichael of Kelvingrove, L.

Harris of Greenwich. L.

Clcdwyn of Pcnrhos, L.

Henniker, L.

David, B.

Heycock, L.

Davies of Penrhys, L.

Hooson, L.

Denington, B.

Houghton of Sowerby, L.

Diamond, L.

Hunt. L.

Donaldson of Kingsbridge, L.

Hutchinson of Lullington, L

Elwvn-Jones, L.

Irving of Dartford, L.

971

Jeger, B.

Ponsonby of Shulbrede, L [Teller.]

Jenkins of Putney, L.

Kagan, L.

Prys-Davies, L.

Kennet, L.

Rea, L.

Kiibracken, L.

Ross of Marnock, L.

Kilmarnock, L.

Rugby, L.

Kirkhill, L.

Seear, B.

Leatherland, L.

Serota, B.

Llewelyn-Davies of Hastoe, B

Silkin of Dulwich, L.

Lockwood, B.

Simon, V.

Longford, E.

Stallard, L.

Lovell-Davis, L.

Stedman, B.

McCarthy, L.

Stewart of Fulham, L.

McGregor of Durris, L.

Stoddart of Swindon, L.

Mackie of Benshie, L.

Strabolgi, L.

McNair, L.

Taylor of Gryfe, L.

Molloy, L.

Taylor of Mansfield, L.

Morton of Shuna, L.

Tordoff, L. [Teller.]

Mulley, L.

Underhill, L.

Nicol, B.

Wallace of Coslany, L.

Oram, L.

Whaddon, L.

Phillips, B.

Wigoder, L.

Pitt of Hampstead, L.

NOT-CONTENTS

Alexander of Tunis, E.

Ilchester, E.

Allenby of Megiddo, V.

Inglewood, L.

Ampthill, L.

Ingrow, L.

Auckland, L.

Killearn, L.

Beaverbrook, L.

Kimberley, E.

Belhaven and Stenton, L.

Kinloss, Ly.

Beloff, L.

Kinnaird, L.

Belstead, L.

Kinnoull, E.

Bessborough, E.

Lane-Fox, B.

Biddulph, L.

Lauderdale, E.

Blyth, L.

Lawrence, L.

Boardman, L.

Layton, L.

Borthwick, L.

Lindsey and Abingdon, E.

Boyd-Carpenter, L.

Lloyd of Hampstead, L.

Brabazon of Tara, L.

Long, V.

Brougham and Vaux, L.

MacLehose of Beoch, L

Broxbourne, L.

Manton, L.

Butterworth, L.

Marley, L.

Caithness, E.

Merrivale, L.

Cameron of Lochbroom, L.

Middleton, L.

Campbell of Alloway, L.

Milverton, L.

Campbell of Croy, L.

Morris, L.

Carnegy of Lour, B.

Mottistone, L.

Carnock, L.

Mowbray and Stourton, L.

Chalfont, L.

Moyne, L.

Coleraine, L.

Munster, E.

Cottesloe, L.

Murton of Lindisfarne, L.

Cowley, E.

Nugent of Guildford, L.

Craigavon, V.

Orr-Ewing, L.

Crawford and Balcarres, E.

Pender, L.

Crawshaw, L.

Portland, D.

Cunliffe, L.

Quinton, L.

Davidson, V. [Teller.]

Reay, L.

Denham, L. [Teller.]

Renton, L.

Drumalbyn, L.

Richardson, L.

Dundee, E.

Romney, E.

Eccles, V.

St. Aldwyn, E.

Eden of Winton, L.

Saint Oswald, L.

Ellenborough, L.

Salisbury, M.

Elliot of Harwood, B.

Sanderson of Bowden, L

Elliott of Morpeth, L.

Sandford, L.

Erne, E.

Sandys, L.

Faithfull, B.

Selkirk, E.

Fanshawe of Richmond, L.

Sharpies, B.

Fraser of Kilmorack, L.

Simon of Glaisdale, L.

Gainford, L.

Skelmersdale, L.

Gormanston, V.

Somers, L.

Gray of Contin, L.

Stodart of Leaston, L.

Gridley, L.

Sudeley, L.

Hailsham of Saint Marylebone, L.

Terrington, L.

Teviot, L.

Halsburv, E.

Teynham, L.

Hesketh, L.

Torrington, V.

Hood, V.

Tranmire, L.

Hooper, B.

Trefgarne, L.

Hylton-Foster, B.

Vaux of Harrowden, L.

972

Vickers, B.

Wolfson, L.

Ward of Witley, V.

Wyatt of Weeford, L

Westbury, L.

Young, B.

Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.
5.10 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 12 to 14.
Page 11, line 43, leave out from ("year,") to ("by") in line 44 and insert ("where the estimate—
(a) is made").
Page 11, line 46, leave out ("ignore") and insert ("is made without taking into account").
Page 12, line 14, at end insert—
("(7) GRE is the amount shown as grant-related expenditure in relation to the authority in the relevant Report.
(8) R is the amount determined by applying the formula—
((GREx1·09)-(ELx1·02)+BG-DBG)x100/RV").
The noble Lord said: My Lords, I beg to move Amendments Nos. 12 to 14 en bloc I spoke to them with Amendment No.5.
On Question, amendments agreed to.
[Amendments Nos. 15 and 16 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 17 to 20:
Page 12, line 29, at end insert
("3A.—(1) For the purposes of paragraph 2(8) above DBG is the aggregate of the amount (if any) of block grant which the Secretary of State estimates will be payable to the authority for the relevant financial year, where the estimate

(a) is made on the assumptions that the authority's total expenditure in relation to the relevant financial year is equal to GRE x 1.09, and that the gross rateable value of its area is equal to RV,

(b) is made by reference to the contents of the relevant Report, and

(c) is made without taking into account the effect (if any) of sections 62 and 63 of the 1980 Act (adjustments).

(2) For the purposes of paragraph 2(8) above and subparagraph (1) above EL, BG, RV and GRE have the same meanings as in paragraph 4 below.
3B. In this Schedule "the relevant financial year" means the financial year beginning in 1987 and "the relevant Report" means the Rate Support Grant Report for England for that financial year.").
Page 12, line 39, after ("1986") insert ("and if in the case of the authority GRE x 1·09 does not exceed EL x 1·02").
Page 12, line 41. at end insert—
("(2A) In the case of an authority actually designated by the Secretary of State (as opposed to one deemed to have been designated) the appropriate formula is, if the authority was not also designated under section 2 of the 1984 Act in relation to the financial year beginning in 1986 and if in the case of the authority GRE x 1·09 exceeds EL x 1·02—
(((ELx1·02)-(BG+E))X100/RV)+T+R")
Page 13, line 9, leave out paragraphs 5 and 6.
The noble Lord said: My Lords, I beg to move Amendments Nos. 17 to 20 en bloc. I spoke to these also with Amendment No.5.
On Question, amendments agreed to.
Lord Skelmersdale: My Lords, I beg to move that this Bill do now pass.
What we have discussed in this Chamber for the past month is a Bill that no one wanted—not local

973
authorities, not the Government, not noble Lords opposite, and, if I may be allowed a personal remark for once, not myself. We have had this Bill for one reason and one reason only; that is, to put the past practice in defining total and relevant expenditure on a firm basis and to enable that practice to continue in future on a proper legal footing. Throughout our debates in this House I believe that there has been an acceptance on all sides that a Bill of this kind has been necessary. Some have argued that the Government could have achieved this purpose by a simpler measure—would that we could!—but no one has challenged the main objectives. Indeed, they have been supported.
I think I can go further still. The approach we have adopted in the Bill—basing the definitions of relevant and total expenditure on a statutory rate fund revenue account—has never seriously been challenged. There have been substantial debates on other aspects of the Bill but not on that. Indeed, I recall that no amendments to Clause 1 of the Bill were put forward in Committee or on Report, or today.
In addition to providing for new definitions of relevant and total expenditure in future, the Bill validated my right honourable friend's past actions on rate support grant and rate limitation. This has been a major area of debate. Without going over all the arguments again, I would remind your Lordships of the circumstances which led to this Bill. My right honourable friend had received legal advice that the treatment of relevant and total expenditure which had been operated at the request of the local authority associations since 1981 was incorrect in law. So my right honourable friend did two things: first, he produced this Bill to validate his past actions—all his past actions—on rate support grant and rate limitation; secondly, he took no more decisions, and said he would take no more decisions, until he had new powers which would enable him to continue his existing treatment of relevant and total expenditure.
This was not in my view unconstitutional. You cannot afford only to validate a proportion of those things that need to be validated. We have had constant discussion as to whether it would have been right to validate only those decisions which were directly concerned with total and relevant expenditure. If I on behalf of the Government had bowed to this pressure, this House would have overturned the very purpose of this Bill, which is to give financial certainty to local authorities. Giving my right honourable friend only half a cake on validation would not have achieved that certainty. Litigation would have continued, leading sooner or later to the situation where some local authorities would have grant, which had already been paid, taken away and given to others. What a mess that would have led to. No Government could allow that to happen.
Is what we have done unconstitutional? I say again, What would be unconstitutional would be to validate decisions that had not already been taken. That would be offensive to this House, and rightly so. What we are doing is validating only those things which my right honourable friend has already done. We are not seeking to put my right honourable friend above the law. And I hope on this point at least I have persuaded the House.
974
There have been other areas in this Bill which the House has considered very carefully indeed. I am grateful to the noble and learned Lord, Lord Elwyn-Jones, for bringing to the attention of your Lordships the position of Newham. It was in the light of the latest information we had about newly selected authorities, including that about Newham, which led us to bring forward an amendment to the rate limit formula for the newly selected authorities. While I fear there has not been a general meeting of minds on rate and precept limitation, I am nonetheless pleased that we have occupied a little common ground in the handling of this amendment to Schedule 2 to the Bill. On Schedule 2, I am also grateful to my noble friend Lord Renton for his most helpful drafting amendments.
We have also amended Clause 2 of the Bill in relation to the power to make specifications about the kinds of expenditure and income which are of a revenue nature. The noble and learned Lord, Lord Silkin, was concerned that my right honourable friend would use his powers to override proper practices lightly. The amendment we have made will mean that my right honourable friend now has to consider what proper practices are before making specifications. This provides in statute some safeguards against any cavalier use of the power, and I would repeat yet again the undertaking I have given that we have no intention of making specifications which are contrary to generally accepted practices.
This Bill will return to another place in a better shape than it arrived here. I am grateful to the noble Baroness Lady David, the noble Lord, Lord Underhill, and the noble and learned, Lord Silkin, for the courteous and constructive contributions they have made to the debates on this Bill. We have also had some vaulable contributions from noble and learned Lords on the Cross-Benches, and I hope that in the light of all that has been said they accept that what we are doing is not unconstitutional.
The services of Lords in Waiting, and in this case the Baroness in Waiting, arc all too rarely appreciated. Not only has my noble friend Lady Hooper's shoe leather worn rather thin on this Bill, but I for one have valued her sane advice on a number of points. and like your Lordships have been made considerably wiser by her words both in the Chamber and outside it.
Returning to the Bill, it will mean that we maintain the status quo on relevant and total expenditure, and as such it is a measure very much in the interests of local government. I commend it to the House.
Moved, That the Bill do now pass.—(Lord Skelmersdale.)
Baroness David: My Lords, we have all agreed that it was essential to have a Bill to clarify the law in relation to the meaning of total and relevant expenditure so that local authorities' accounting could continue in the way it had been doing over the past six years since the 1980 Act was passed. What the Opposition has objected to is that in this Bill the Government have gone much further than that, and in their anxiety not to have further litigation and legislation they have created the most enormous umbrella to put up over the head of the Secretary of

975
State so that he is covered for any eventuality, and freak storm, in the future.
"Anything done by the Secretary of State"
as Clause 4(1) says,
"before the passing of this Act … shall be deemed to have been done in compliance with those provisions".
Clause 6(2) says the same.
We have had strong and distinguished support not only from the Alliance and Labour Benches but from the noble and learned Lords, Lord Denning and Lord Simon of Glaisdale, and the noble Lord, Lord Lloyd of Hampstead, and from many others on the Cross-Benches for the amendments put forward to try to improve the Bill in this respect. There were abstentions even on the Government Benches. I cannot think that the Government can have derived much satisfaction from the very narrow victories they achieved at Committee and Report stages. The argument was certainly won by the supporters of the amendments.
I must express my warm gratitude to my noble and learned friend Lord Silkin for the hard work he put in into framing those crucial amendments. In formulating them at Report stage he went a long way to meet the Government's requirements while narrowing the powers that the Bill in its present form gives to the Secretary of State. In fact, he went further than many of us liked in the hope of reaching accommodation with the Government, but to no avail.
The other part of the Bill that causes great distress and anxiety is Clause 7 and its attendant schedule, Schedule 2, dealing with the rate-capped authorities both previously and newly designated. These are authorities which have the worst problems of deprivation. It is just unfair that they should not have had the opportunity to put before the Secretary of State any changes in their financial position that have come about since the publication of the Bill on 18th December last, three months before the end of the financial year.
I am glad that the pleas of my noble and learned friend Lord Elwyn-Jones on behalf of Newham have been listened to, and the situation for that most deprived of authorities has been improved. That authority was lucky to have the persuasive voice of a former Lord Chancellor who represented it for 29 years to speak for it. But the fact is that just because of those pleas and a day's visit by the Minister for Local Government to Newham, its grant entitlement has been changed by an adjustment to the formula. I think this proves the justness of the case that Lord Kilmarnock and I presented at both Committee and Report stages about all those authorities involved. The formulae cannot work fairly for all.
My noble friend Lord Underhill gave examples of their effect on a number of authorities. We shall, I am afraid, in the course of the next financial year have plenty of evidence of what will be the effect of this rigidity on the services provided. It is the recipients of the services we are fussed about. The Government seem to give little attention to them. "The poor ratepayer", is their cry, not the poor child who cannot get into a nursery school or the old person who cannot
976
be provided with a home help or the homeless who have to look at houses standing empty because there is no money to rehabilitate them.
I felt while we were discussing the Bill a great lack of understanding on the Government Benches of what the job of a local authority is as regards the people in the area that it covers and the wish of good councillors to do the best they can for the people they represent. We await anxiously the decision on Birmingham and the 12 other local authorities which, if the Secretary of State does not decide in their favour, may lose extensive sums because of the application of Clause 5 of the Bill. He has agreed that nothing illegal was done by those authorities. I was not quite clear what was the Minister's final response to my noble friend Lady Fisher at Report stage. I know she will say a word or two about Birmingham and I shall leave her to cope with that.
Finally, I must criticise the Government for their incompetent handling of the Bill. We agreed that we had to have a Bill, but between the Secretary of State learning definitely of the necessity for it in October and the publication of the Bill two months elapsed. He kept very quiet in all that time—until two days before First Reading—about anything being amiss at all, even though questions were put to him by my honourable friend, Dr. Cunningham.
Even after the Bill was published, a large number of amendments had to be made. We had some both in Committee and Report stage here. What shocked us greatly was that the letter of 23rd February that went out to chief executives from the DoE saying that there would be revision of local authorities' grant entitlements for 1987–88, appeared to be news to the Minister when we spoke of it on our second Committee day, 24th February, the day the chief executives received the letter. Anyway he made very light of it and said that the changes in rate and precept limits were small. I pointed out the great inconvenience and the uncertainty caused to local authorities by this late notification.
Then there was the Statement that the Secretary of State made in another place on the very afternoon we were starting Report stage, last Thursday. It was to say that, owing to Greenwich having won its court case, the rate supplement grant figures for 1986–87 and 1987–88 would have to be amended so that grant could be paid from the beginning of April. Pages of figures had been sent out to all authorities.
The Minister said that of course the Secretary of State had to respond to the judgment of the court, and that one accepts. But I must point out that Greenwich took the Secretary of State to court because the Secretary of State attempted to correct what was in his view an acknowledged error in the 1986–87 settlement which deprived some London authorities of their full grant. Greenwich did not think that there had been an error but believed that the Secretary of State had made adjustments to the disadvantage of Greenwich and to the benefit of certain Tory authorities. The whole affair has been one of maladministration and incompetence. We shall hardly get this Bill through the House before we start on the next Rate Support Grants Bill later this evening, which brings about yet another change in the way grant is distributed.

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It is not the fault of the noble Lord, Lord Skelmersdale, that he has had to deal with these horrors. He has my sympathy over the timing of his arrival as Minister at the department and over the efforts he has had to make to explain and to justify the workings of his department and his Secretary of State. He has my admiration for his good humour. I should like to include the noble Baroness in that. I am grateful for the courtesy that the noble Minister has shown to me and to my colleagues in writing to us and keeping us informed. But, even so, I can express no satisfaction at the passing of this Bill, which marks one more step in the movement of power from local to central government.
Lord Renton: My Lords, this is an unusual Bill. It is a complex and difficult one, but very necessary, and I think that the noble Baroness was quite right and so were her colleagues to accept the necessity for it and to conduct the debates, as they very ably and fairly did, on the assumption that it was so.
Let us face it: mistakes were made not only in earlier legislation, but in the way that it was interpreted by the local authority associations, which were perhaps over-persuasive in getting Ministers to agree with them in what turned out to be a misinterpretation of the legislation. That seems to me to be the reality in the background of this matter. As validation had to take place, it necessarily had to be retrospective.
Two of my oldest friends in the profession (in both senses of the word "oldest") surprised me a great deal when they complained of the retrospective effect of the legislation, for it seems to me to have been inevitable. My noble and learned friend—if I may dare to call him so because he once was really so in the political sense of the word—even talked about the Minister being above the rule of law. I understand that the rule of law is and always has been subject to the sovereignty of Parliament. If Parliament gives powers to a Minister, nobody can complain that the Minister has been put above the rule of law, because Parliament has decided that he should have those powers. That, as briefly as I dare to express it, is the answer I feel it necessary to give to these highly respected noble and learned Lords.
The Opposition have played their hand zealously and with great ability, as I mentioned. I am very glad that the noble Baroness paid tribute to my noble friend Lord Skelmersdale because he has had as difficult a task as a Minister could have in steering this Bill through your Lordships' House. He has shown not only unfailing courtesy and good humour and kept his cool, but he has shown great ability in this complex matter. The tribute paid to him by the noble Baroness was well deserved.
As I said in relation to an earlier amendment, I think that the Bill is a very good example of what your Lordships' House can do on what is essentially a political matter which is bound primarily to concern the decisions and feelings of another place. But we have been able to knock this Bill into better shape and for that I think that both sides of your Lordships' House deserve to be congratulated.
5.30 p.m.
Lord Simon of Glaisdale: My Lords, on a Third Reading in your Lordships' House we generally kiss
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under the political mistletoe. We congratulate the Minister in charge of the Bill. We congratulate ourselves on improving the Bill and generally there is an air of self-congratulation and pleasure that a measure of importance has passed through your Lordships' House. We can genuinely congratulate the noble Lord the Minister upon his mastery of his material, upon the way he has worked at it and upon his unfailing courtesy. Those of us who intervened on the constitutional issues could only be amazed at the knowledge he had acquired of local government finance and its law. We found the noble Baroness, Lady David, although we knew her background and knowledge, equally admirable and helpful.
As for the measure itself, I cannot really believe that even those who have voted for the Government can be entirely happy at the length to which it has gone in throwing a mantle of exculpation over the acts of the Minister, not merely, as we wished to see, those derived from and connected with and pursuant to the calculations that he had to make, but also over all actions that fall under the wide provisions of what are called "relevant provisions".
I had not intended at this stage to say anything about the constitutional issues. They have been dealt with admirably by two of the greatest lawyers in this House: my noble and learned friend Lord Denning, one of the most eminent persons ever to have held the great position of Master of the Rolls, and my noble friend Lord Lloyd of Hampstead, a Quain Professor of Law. Nevertheless, I must say one word in view of what has been said by the noble Lord, Lord Renton. He suggested that it could not be said that the rule of law had been breached because the Minister had been given power under the undoubted sovereignty of Parliament.
That is a most dangerous doctrine. The British constitution rests on a balance between executive, legislature and judiciary. I cannot believe that the noble Lord has forgotten his own denunciations of the "Henry VIII" clauses. If we give a Minister absolute power to emancipate himself from the control of the courts, we are flouting the constitution. My noble and learned friend and my noble friend were undoubtedly right in that respect. I say again, with all respect to the noble Lord—and I was touched that he referred to our old friendship—that it is most dangerous doctrine. It is constitutionally damnable doctrine.
As I say, I had not intended to deal with the constitutional side. I wanted to say a word about the origin of this trouble that we have had: that is, the drafting of the 1980 Act. I was alarmed the other day to hear a Minister—the noble Lord, Lord Belstead, who is held in universal respect—go out of his way to pay a tribute to the way parliamentary draftsmen do their job. I think he used the word "impeccable". It was some such word, but in any case it was inappropriate and extravagant. The 1980 Act was drafted in such a way that a government could be persuaded that it had meant something contrary to what had been intended and that it could reasonably bear that meaning.
The Renton Committee started their serious consideration of the criticism as follows:
"Our terms of reference imply a widespread concern that much of our statute law lacks simplicity and clarity".

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One could hardly have got a better example than the 1980 Act, on which the Government could be persuaded by the local authorities that it meant something different from what they originally thought it meant.
I also note that earlier the Renton Report said this:
"We must add that little can be done to improve the quality of legislation unless those concerned in the process are willing to modify some of their most cherished habits".
There is not the smallest sign of that at the moment. Indeed things are, if anything, getting worse. I remember introducing the discussion of this report to your Lordships' House before we had the benefit of the presence of the noble Lord, Lord Renton. I remember that my noble and learned friend Lord Elwyn-Jones was then Lord Chancellor, and of course his congratulations to the committee were felicitous, his tones (as ever) were mellifluous, his diction was (as always) perfect; but anybody experienced in government could hear through it all the thud of entrenching tools in Whitehall.
And so it has proved. One need not go very far back. In the Child Abduction Act, which was passed in order to implement an international convention, the convention was conveniently set out in the schedule, less one article, Article 20. It was admitted by my noble and learned friend the Lord Chancellor and by the noble and learned Lord the Lord Advocate that that article, though omitted, was nevertheless binding on the courts and on the citizen, and would be applied. Why was it not in? It was because it did not fit in with the style of drafting on which parliamentary counsel continue to insist, in defiance of the recommendations of the Renton Committee.
Last Session we considered the Shops Bill. At the instance of the very supporters of the Bill, a whole schedule had to go back for redrafting because it was perfectly incomprehensible. At the end of the Session your Lordships were faced with the Financial Services Bill, and a very experienced noble Lord who I see present today, having held several senior departmental offices, described it to me as "a horror". Your Lordships will remember the protest made at its being introduced in an almost incomprehensible form and having to be virtually rewritten at the very end of the Session in which the House had been brought back a fortnight earlier to deal with it. My own view is that we are unlikely to get any improvement until a Bill such as that is thrown out at Second Reading purely on its drafting, and there is time for it to be brought back in a comprehensible form.
There is only one more thing to say. It is not purely the draftsmen. Behind them lies the Legislation Committee of the Cabinet, and obviously it is not doing its job if incomprehensible legislation, which is an affront to the plea for clarity and brevity made by the Renton Committee, continues to be brought before your Lordships. The Legislation Committee performs no useful function unless it examines the various measures brought before it from a technical point of view and in sufficient time to send them back for redrafting, if they are the sort of measures with which your Lordships have lately been affronted.
I am sorry to have mostly had to say disagreeable things about this Bill and what lies behind it, but I
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comfort myself by saying that the personalities who have been concerned in this Bill—principally the Minister, but also the noble Baroness and the noble and learned Lord on the Front Bench—are some redemption of what otherwise I cannot but regard as an arrogation of bureaucratic authority.
Lord Campbell of Alloway: My Lords, having been involved in the constitutional issue, and really only on that issue, of the Bill it would be churlish not to wish to acknowledge the most helpful and objective way in which the noble and learned Lord, Lord Silkin, presented his arguments for the Opposition. I say that with total sincerity, having known him since before the war when we were together in the same college at Cambridge. I should also like to congratulate my noble friend the Minister on holding steady under fire from all sides of the House.
I want to make a point on behalf of the Government and those noble Lords of the Opposition who agree with me on the constitutional issue. There is no question, notwithstanding what the noble and learned Lord, Lord Simon of Glaisdale, has just said, of flouting the constitution. There is, notwithstanding what the noble and learned Lord has just said, no damnable constitutional doctrine. At Committee stage the noble and learned Lord, Lord Denning, stigmatised Clause 4(1) as unconstitutional. He charged the Government with putting the executive and the Secretary of State above the law. On Report, it was again said that Clause 4 was unconstitutional, going behind the courts of law and the rule of law.
The noble and learned Lord, Lord Simon of Glaisdale, in a powerful speech in which we were reminded of Bacon and the judges sitting as lions on the throne, and of Coke with the insistence upon the function of the judiciary to curb the abuses of the executive, questioned, as he questions today and has questioned throughout, the basis of Clause 4(1) as eroding the rule of law on which our liberties as individuals depend. He reminded us in this context of Crichel Down. All those considerations—with the utmost respect to the noble and learned Lord—are wholly wide of the mark, for here we are concerned with a situation where the executive admit their error. They assuredly did not in Crichel Down.
Secondly, the extent of the error by common consent cannot be readily established because the very principles are in doubt. As a result of the error, true, some ratepayers may have gained a financial advantage—the individual aspect—and others may have suffered a disadvantage. But this could only be assessed by some form of complex litigation which in fact merges in adjustments to be made one way or another in favour of local authorities. The individual, the executive, Crichel Down—what on earth has that, with respect, to do with this situation? And it is the very width and variety of things that can be done under Part VI of the Act, as was accepted by the noble and learned Lord, Lord Denning, that make it impossible and impracticable to mount a judicial inquiry into the myriad borderline cases—to what end, to what profit, to what individual advantage as regards an abuse of executive power which could affect the individual?

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The Government, in seeking retrospective legislation validating provisions for admitted error in administrative matters going back to 1981 which cannot be established in the courts, breach no established convention unless the validating provisions were too widely drafted. Your Lordships have decided that they were not. The only issue at stake, as recognised so fairly, frankly and typically throughout by the noble and learned Lord, Lord Silkin of Dulwich, was whether Clause 4(1) was too widely drafted. That was the basis upon which the noble Lord, Lord Lloyd of Hampstead, presented his views to your Lordships' House. It was the basis which attracted the attention of my noble friend Lord Aldington. But it is not the basis which has attracted the attention of noble and learned Lords on the Cross-Benches.
Your Lordships' decision that Clause 4(1) was not too widely drafted leaves rhetoric about the rule of law and the constitution wide of the mark, and the status of the judiciary as guardians of our individual liberties against abuse of executive power assuredly has not been slighted by this Government. The rule of law has not been called in question by this Government. There has been no breach of constitutional propriety by this Government and no evil precedent, as suggested by the noble and learned Lord, Lord Simon of Glaisdale, has been set or would be set, I suggest, by this Government.
5.45 p.m.
Baroness Fisher of Rednal: My Lords, the noble Lord, Lord Skelmersdale, began by saying that the Bill was to put past practice on a firm footing and to enable that to continue on a proper legal footing. I do not think we would disagree with that. I was going to speak about the complexity of the Bill, but after listening to the great speech which the noble and learned Lord, Lord Simon of Glaisdale, has made I feel sure that he has spelt out quite clearly the complexities and the need for better understanding of legislation. He made a comment about it being the kiss under the mistletoe season. May I say that if he puts forward any more propositions such as he did in that powerful speech, I shall be the first to come and kiss him under the mistletoe.
Lord Simon of Glaisdale: My Lords, may I say that I shall be very pleased to meet the noble Baroness on 25th December next.
Baroness Fisher of Rednal: My Lords, the noble and learned Lord, Lord Simon, will have to stand on a chair to achieve that, or I shall have to sit down. It is unfortunate that the Government have had this great need to keep on changing the grant formula. The constant changes which are taking place make it extremely difficult for local authorities to plan their services. As the noble Lord said, he does not have a crystal ball so he cannot say what will happen in the future. All we have to do is hope that for a period of time there will be some standstill, so that local authorities can look again at the figures and make sure that they can plan ahead. I am not sure that that will happen. I feel—and perhaps I am speaking personally here—that the Government are vindictive towards local authorities. I do not know the reason for that.
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The work of local authorities is laid down, in the main, by statute. All local authorities are doing in their local areas is to carry out the wishes of the Government. As my noble friend Baroness David has said, what we have been talking about in this Bill are abstract formulae which are often expressed in convoluted language. However, what we are really concerned with is financing to carry out services for people. That is what this Bill is all about. Some local authorities, perhaps including Birmingham, felt that certain services were very necessary and needed to be carried out. It is important, when we think in terms of abstract formulae, such as X and Y equals B over something or other, and minus something else, to realise that all that means is services which can be provided. That is not an abstract way of looking at matters.
I have' mentioned Birmingham on two or three occasions. In replying to me, the noble Lord mentioned the Report stage of this Bill on Thursday, 5th March. The noble Lord has written to me and I was quite surprised when I received his letter yesterday. He said:
"On reading the Official Report I fear in the event I have muddied the waters rather than shed light on the matter—for which 1 apologise—and I am writing to make the position clear".
I accept that apology in the spirit in which it is made. The noble Lord then attempted to make the position clear in convoluted language.
"The nub of the example was that deficit financing carried out in say 1986/87 would not be covered by a specification made in 1987/88. However, it is in practice not very meaningful to speak of deficit financing 'carried out' in a particular year; an authority may include deficit financing in its accounts relating to a year, say 1986/87, but it may do this either in 1986/87 or in any later year—say 1987/88—until the accounts for 1986/87 are closed. And whilst a specification made in 1987/88 would not affect the block grant paid to an authority in say 1986/87, it could apply to a Supplementary Report in respect of 1986/87 which was made at the same time as or later than the specification and which affected grant paid in 1987/88 or some subsequent year".
Now that muddied the waters; I felt that I needed to put my wellies on to get out of the bog!
I think all this bears out what the noble and learned Lord, Lord Simon, has said. While we laugh at these things, they are gobbledygook and we are not sitting here to understand gobbledygook. We are here to listen and understand statutes which are made and which have to be interpreted so that other people can understand them. It is important for us to understand that point and for the people who write letters on behalf of Ministers to understand that.
I am pleased that the noble Lord the Minister wrote to me and I thank him very much for writing. The letter was signed in his absence. However, he approved it and I hope that he does not bear any malice about it.
Before I finally sit down, I should like to say that if the Government ask local authorities to take on care in the community, such as helping people who come out of mental hospitals; if they push over to local authorities the rent rebate scheme (which the DHSS realised was costing them too much and employing too many people, and which was pushed to local authorities to put into operation); and if local authorities are expected to rehouse homeless people and the other things which they are called upon to do, then they must have money to carry out such policies. We must think of those things in passing this Bill.

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I wish to pay my compliments to the Minister and to the noble Baroness, Lady Hooper, as well as to my noble friends. I am concerned that in speaking on behalf of Birmingham I was not as favoured as perhaps my noble and learned friend Lord Elwyn-Jones, who sits in front of me. I should have liked to see Birmingham included, as Newham was, in some special consideration, I look forward to that in the future.
Perhaps I may reiterate again what the noble and learned Lord, Lord Simon of Glaisdale, has said and suggest that we follow the proposals contained in the powerful speech which he has made.
Lord Pitt of Hamptead: My Lords, perhaps I also may congratulate the Minister on the skilful and relaxed way in which he has steered this Bill through your Lordships' House. It was a difficult Bill and I admire the way in which he handled it. I also join in congratulating the noble Baroness, Lady Hooper, on her part in this Bill.
At this stage I want to ask the Minister to convey to his right honourable friend the problems that the Government have created for themselves by this attempt to centralise control of local government expenditure. It is that that causes problems. Perhaps we should rethink the whole situation and go back to where we were.
When I joined the London County Council in 1961, we had grants by means of which the government paid a proportion of expenditure on each item. The proportions were agreed. They agreed that we were doing a particular act and they agreed to pay their share. We were sold the idea that if we received the grant in a block, we could use it as we wished. That was the start of the rate support grant as we know it now.
The rate support grant was subsequently used as a means of controlling expenditure by local government in terms of targets and penalties. Finally, we have reached the stage of rate-capping many boroughs. We have found that the formula being used, which is the grant-related expenditure assessment, is obviously not right. What it throws up as expenditure is the expenditure of all the deprived areas of the country. That cannot be right.
Nothing could be more illustrative of that than Newham. Newham has always been regarded as a borough which has been run effectively and efficiently. I remember that when, in 1974, I had some dealings with these matters in County Hall, and when George Boyce was told what our rate precept was going to be, he nearly beheaded me. And yet we end up by saying that Newham is a borough that needs to be kept.
I should like to suggest to the Minister that he puts to his right honourable friend that we must sit back and look at the issue again. What is required is that local authorities should have enough income to carry out the responsibilities which are laid down for them by Parliament, that as far as possible the expenditure should be local and that the local electorate should have control over those councils.
When I was at County Hall we also had annual elections for a portion of the London County Council. Those were subsequently abolished and councils were elected for four years in the same way as Parliament.
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Until the latter part of the last Parliament local authorities were expected to balance their budgets. If they did not they were able to make a supplementary rate. The supplementary rate was abolished. I remember saying to your Lordships that for the first time it was possible for local authorities to become bankrupt but it was all ignored.
I know what the Government's worries are. I do not pretend that I do not know what the Government's worries are. I am saying that what they have undertaken is too difficult. It is not possible for the centre to be able to control in its entirety the expenditure of local areas. What the Government should look at is how the duties of the local authorities can be balanced by an adequate income with not only the minimum of interference from the centre but also the minimum of grant. I have suggested before in your Lordships' House that local authorities should have both rates and the ability to levy a local income tax. They should be free to decide which and to what extent they will use each alternative. I have always said that there should be frequent elections so that the local electorate can control the way in which this expenditure is used.
I have taken more time than I intended to but I want the Minister to go back to his right honourable friend, whom I know well, and ask him to look at the issue all over again. We are about to pass the Bill. We hope that at least for 1987–88 all is well. We even hope that for 1988–89 all will be well. But let us realise that all is not well in the way in which matters are developing and the way in which many of the authorities are finding themselves in difficulties. This is storing up trouble for the Government. Let us see whether in fact we need to reverse our steps and reduce the extent to which we have centralised and try to make government more local.
Lord Skelmersdale: My Lords, in the past hour or so there has been enough material to keep your Lordships going for at least five Wednesday debates and therefore I think it would be inappropriate for me to respond beyond saying two things. Quite clearly I have not persuaded the noble Baroness, Lady David, and quite clearly I never shall. She spoke again about covering my right honourable friend with an umbrella from any freak storm in the future. She still has not got the point. The umbrella covers my right honourable friend from storms arising from the past.
The second point to which I should like to respond is that of the noble Lord, Lord Pitt. I agree with him that 20 years from now, if we are spared, we shall almost certainly be speaking about local government finance. I do not think he has grasped the point that the Government intend, as they have said in the Green Paper, Paving for Local Government, to have a new system of central government support for local authority expenditure. We must wait until then. I commend the Bill to your Lordships.
On Question, Bill passed, and returned to the Commons with amendments.

Petroleum Bill
6.4 p.m.
Viscount Davidson: My Lords, I beg to move that the Bill be now read a second time.

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The Bill comes before us against a background of low and volatile oil prices, when the industry is facing perhaps the most testing time in its post-war history. Nevertheless the industry has responded to this test with its characteristic resourcefulness and has resolved to look to the future. Oil and gas are, and will remain, big business. Six million pounds a day is spent in support of current ongoing production. Lower prices for oil have not put a stop to the development of the United Kingdom continental shelf. Last year, 14 projects were approved with a total value slightly in excess of £2 billion, and the response to the Government's tenth round of licensing demonstrates confidence in the long-term future of the United Kingdom continental shelf. In essence, the industry is planning for the future.
The Government too must take a long-term view and plan for the future. It is for this reason that we have introduced the Bill, the main provisions of which aim to establish a framework for the safe and orderly abandonment of offshore oil and gas installations and submarine pipelines once their useful production life reaches a close. The need for this important legislation is clear, given the scale of United Kingdom continental shelf operations and the abandonment problems these will pose, and the gaps in the current legislative framework for regulating this process.
There are about 150 fixed installations offshore and 2,900 miles of pipeline. By the 1990s these figures will have increased. The picture is further complicated by the enormous variety of installations: from shallow water light steel structures in the southern basin to the 600,000-tonne concrete platforms of the northern North Sea, the ocean giants of United Kingdom oil production. The cost of removing totally all existing installations on the UK continental shelf would be enormous. At 1984 prices the industry's estimate is £6 billion. That is a large sum of money indeed, a significant proportion of which will fall to be met by the taxpayer through tax and royalty reliefs, or equivalent payments.
It is therefore in the interests of both the industry and the Government that, where possible in accordance with international law, and after consultation with other interests, costs are saved by allowing the partial removal, rather than the total removal, of installations. Financial resources are not all that will be required. The task will prove a challenging test to the engineering and organisational skills of those responsible for the removal.
With a task of this scale it is vital that the Government have an appropriate framework in place to be able to set standards for the removal operations and to ensure that the job is carried out properly. Although existing legislation provides for removal to the satisfaction of the Secretary of State, it does not provide the framework to regulate the submission and approval of abandonment programmes, to enforce the duty to carry these out and to prevent default. This Bill will enable action to be taken in these areas.
In considering this framework we have been aware of the range of interests involved. Apart from the interests of the oil companies there are those of the fishermen and mariners, the United Kingdom's obligations under international law and of course, as I
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have said, the interests of the taxpayer. This balance has been carefully considered, with more than a year of consultations with interested parties such as the oil industry and the fishermen. The Bill also provides for further consultation when regulations are made and when individual abandonment plans are being drawn up.
The major provisions of the Bill are covered in Part I, which makes clear that the responsibility for removal rests with the owners of an installation or pipeline. Clause 1 enables notices to be served on those responsible for an installation or pipeline to prepare an abandonment programme for approval by the Secretary of State, who, under Clause 5, may draw up his own programme and serve it on those responsible if they have failed to submit their own or have submitted a programme which is wholly unsatisfactory. Under Clause 8 strict duties are laid down on those who submit a programme to ensure that it is properly carried out. In the last resort, under Clause 9, the Secretary of State may himself arrange for the abandonment work to be carried out. This power will hopefully never be needed, but it is essential that it is available.
The pre-eminent responsibility for abandonment lies, however, with the owners, and to give force to this responsibility the Bill introduces criminal offences for failure to comply with certain notices served under this Part of the Bill.
I now turn to a consideration of the persons who might be responsible for the removal of an installation or pipeline. The immediate starting point of responsibility is the licence group who operate the installation, the concession owners and parties to joint operating agreements. It is to these that the Secretary of State will look, in the first instance, for the preparation of an abandonment programme. However, with the high cost and the complexity of abandonment, it is right that the Secretary of State is enabled, if these parties are unable to discharge the obligation, to serve notices on a wider pool of associated and related companies.
However, to strike a balance between the proper interests of good business and the interests of the taxpayer and to give emphasis to the pre-eminent duty of those immediately responsible for the installation the Secretary of State is restrained, under Clause 3, from serving notice on the wider pool provided that he is satisfied, and remains satisfied, that those immediately responsible have put in place appropriate arrangements to ensure that they can meet their obligations.
I now turn to the actual standards which will apply. Your Lordships will have learnt from reading the Bill that no detailed standards are set out. Instead, a power to make regulations, after carrying out the appropriate consultations, is provided in Clause 11. We believe that this is the right way forward. These standards to be embodied in our regulations have not yet been agreed. The enabling power of Clause 11 provides the flexibility we need to put in place a UK regime which meets our international obligations, and enables changes to be made should international standards continue to evolve.

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To conclude what I have to say about Part I of this Bill, let me repeat the basic aim, which is to establish a framework for the safe and orderly abandonment of oil installations and pipelines on the UK continental shelf, while making clear that the responsibility for abandonment lies with the owners of those installations and pipelines. The need to legislate now on abandonment has also provided the opportunity to update other aspects of oil and gas legislation. Provisions to this effect are covered in Parts II and III of the Bill. I will cover these briefly.
Part II of the Bill updates the royalty regime by rationalising the procedures for royalty accounting and arbitration and contains provisions concerning the measurement of petroleum. It also provides an enabling power to allow repayment of certain royalties to make allowance for abandonment costs. This part of the Bill also enables the extension of the UK offshore licensing regime to the territorial waters off Northern Ireland, and repeals a legislative requirement to publish an annual report of UK continental shelf licences and activity, a report now superseded by the Brown Book.
Part III of the Bill has two main elements. It provides for the automatic creation of safety zones around offshore installations and specifies arrangements concerning onshore pipelines. Around rigs, platforms and other installations there will be automatic safety zones of 500 metres. At present, each safety zone must be established by statutory instrument. In 1981 there were only 30, whereas in 1986 there were over five times as many. This provision is sensible administrative streamlining.
The main onshore pipeline provision concerns the insurance arrangements for pipelines. This enables the Secretary of State to prohibit the use or testing of any pipeline until specified steps have been taken to ensure that funds are available to discharge any liability for loss, damage or so on.
This is an important Bill, and I make no apology for having dwelt mainly on the provisions of Part I. Abandonment is a problem for the future, but it is right to provide the framework for dealing with it now. This Bill puts that framework into place and makes clear the primary responsibility of the owners for removing their installations and pipelines. These provisions succeed, I think, in striking a balance between the various interests involved. It protects the taxpayer and sea users, and provides assurances for far-sighted and prudent oil companies who will be enabled to make their plans accordingly.
It provides a flexible and responsible framework within which to manage the abandonment of UK continental shelf installations and pipelines, in accordance with international law. I commend the Bill to your Lordships' House.
Moved, That the Bill be now read a second time.—(Viscount Viscount Davison.)
6.15 p.m.
Lord Carmichael of Kelvingrove: My Lords, we should thank the Minister for his very succinct explanation of this Bill. He will appreciate of course that the Bill in the other place was given a general
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welcome although that is not to say that there are not areas where improvement would be possible. In fact, hope that when we get to the Committee stage the Minister, from the experience of the other place, will have one or two points in respect of which he will be putting down amendments himself after having given some thought to the Bill.
At the Report stage in another place figures of revenue from the North Sea were given by my right honourable friend Mr. Rowlands, who was leading for us. He said that the total tax revenue from North Sea oil, was a staggering, £352.4 billion obtained by way of direct taxes. He said it was the largest fiscal windfall in modern British history. The figure seemed rather high to me and I tried to check it, but since the Minister of State spoke after my honourable friend in another place and he did not correct him, I am assuming that that is the figure.
As I understand it, a very large part of the cost of the abandoment will be met by the Government, and this cost will, of course, fall upon the Government at a time when the income from oil revenue will be falling. In 1979 to 1990 terms, the abandonment costs will be very high when related to these terms. The Minister himself said a few minutes ago that the cost was likely to be somewhere about £6 billion. Again at the Report stage in another place the Minister did not really make the matter as clear as I should have liked. I have read the debate carefully, but it may be that I am not understanding properly. He did not make it really clear which of the tax reliefs would apply to abandonment. There is corporation tax, there is petroleum revenue tax and there are royalty payments. I should like to know if the Minister can find out what these reliefs are and say whether the whole of an abandon-ment could be set off against, for example, petrol revenue tax or any of the other taxes. Furthermore, are there any instances in which the Government, by way of tax offsetting, could have the entire cost of an abandonment to meet?
On this particular subject, it was suggested last time that the Minister of State would look at the question of whether, instead of the rather cumbersome method of using a tax repayment—whatever the combination of taxes chosen—further thought might be given to a grant structure either as well as or instead of tax relief. I understand that the Norwegian Government have got much further ahead than the Minister of State thought when he spoke two weeks ago. The Storting, which is the Norwegian Parliament, had been dealing with it much more fully than we had originally thought at the time when the Minister of State spoke.
So much, very briefly, for the financial background, which I think is roughly what the House and the other place will realise is the proper way to go about it. The whole necessity for getting rid of the rigs in the North Sea and the Irish Sea is to try to return the North Sea and the Irish Sea as near as possible to the state which they were in before. This is particularly important with regard to the North Sea which is probably among the world's finest fishing areas. People have been fishing in these areas for generations for demersal and pelagic fish. The hope is that we shall be able to return the waters to them so that we shall again have profitable catches from the sea and ensure that the interests of people in navigation and particularly fisheries will be

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protected. Many communities along the east coast of Britain, particularly in Scotland, were built up on the strength of the riches of the North Sea. We hope that they will be returned to their previous condition. I have no doubt that when we reach the Committee stage and examine this aspect more closely, we shall have valuable submissions from fishing interests.
The Minister gave some figures which for the record I should like to fill out a little more. I know that the Minister was reading quickly, but I understand that there are, as he said, 144 to 150 platforms in the North Sea and 2,800 miles of pipeline. However, the significant difficulty is reached when one considers the different types of rig. The Minister touched on this point. In the shallow water in the southern part of the North Sea there are about 99 rigs weighing from 300 tonnes upwards. They are manageable with modern technology. Is is in the deep water of the middle, central and northern North Sea that the real difficulties arise.
There are about 35 steel rigs and 10 concrete rigs. These concrete rigs, as the Minister said, can weigh up to 650,000 tonnes, which is an incredible problem to be dealt with. The steel rigs weigh 58,000 tonnes. I understand that in some cases the rigs go down to a depth of about 185 metres. That means we are absolutely on the edge of a new technology. It is one thing to tilt a rig onto its side from a barge and another to upset it from the sea bottom and drag it, or whatever is required, to shallow water for breaking up. That is a big problem. Therefore, there is no single possible solution, particularly in the conditions of the North Sea, where there is a very heavy scour on the sea bed, with large tidal fluctuations and frequently absolutely atrocious weather.
Even pipelines, which were dealt with in the other place rather more quickly than I would have liked, need special treatment, no matter how strong or how well built they are. Because of the scouring of the North Sea the pipelines can easily lose their foundations. If the foundations are lost over too long a distance there will be bridging and, ultimately, cracking. That too can be a problem. Various suggestions have been made, but again they are all expensive. Everything one does in the North Sea is expensive. Trenching was suggested, which for a 36 inch pipe at the depths we are talking about would be very expensive. More likely, as suggested in another place, steel matting could be placed over them to give some protection.
How realistic is it completely to remove the structures? I know that is what we should like to do. We know that the Americans in the Gulf of Mexico are taking away rigs completely, but the conditions there are quite different. It is much calmer and they have nothing like the depths that we are dealing with in our in-shore waters. I believe the Americans are talking about taking them below the surface of the sea bed but, as I said, they tend to be in shallow water.
It is good that the Government have brought forward the Bill as early as this. However, do we have the technique to put divers down with safety to the depth required for total demolition? I believe the present answer is certainly no. Can we guarantee that a heavy structure left on the sea bed would not be moved by the special conditions in the North Sea and
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thereby make charts dangerously outdated? Even worse, to my mind, would be to cut off rigs at depths below low tide—say, five fathoms—leaving a hazard to fishermen, submarines and perhaps some of our bigger ships. It was suggested in another place that the rigs could be blown up, but we are a long way from having the ability to blow up rigs at the depths we are talking about.
I should like to speak briefly on the development of new technology. The treatment of the oil/gas platforms and pipelines, whether by complete or partial removal or leaving them as navigational beacons in perpetuity, will require a technology which in many ways is different from that of construction, where rigs can be constructed on dry land, towed out to sea and dropped in position. A very different technique is required for removal. During the Second Reading debate in another place on 24th November the Minister of State said (reported at col. 33 in Hansard):
"Abandonment will also require a supply industry and the development of new technology. Research is already taking place".
We have some years ahead in which to plan for this technology; to develop the personnel at all levels of participation from the oceanographic scientists, the specialist divers, the specialist explosive experts—if that is the way we decide to deal with the rigs—and all the other groups of people who will be required. Barges will need to be operated working in the other direction; that is, hauling things out of the sea instead of tilting them into the sea. Again, that is a new technique.
With the money that has been obtained from the North Sea—and many people say that it has been used profligately—are the Government seriously considering financing departments in universities and colleges of technology specifically to examine this programme? We should remember that there are apparently 6,000 rigs all over the world. If Britain can look at this in a schematic way and spend some money in developing the technology, and if we can suitably clear the North Sea to the satisfaction of the maritime and shipping people and everyone else, there will be great scope for us in the rest of the world.
With the dismantling of this source of great wealth—a real bonanza, which we had from the late 1960s and early 1970s and which we trust will continue into the 1 990s—let us hope that our expertise will be the first in the field, not only on our own continental shelf but in the rest of the oceans of the world.
We recognise that this Bill has a very important aspect. The Minister in another place showed a great deal of flexibility in Committee. He listened to suggestions and altered the Bill, though perhaps not as much as we wanted. But we hope that at the Committee stage in this place, when time will have allowed the Government to rethink some of the excellent points raised by my honourable friends in another place, the Minister will show equal flexibility so that the Bill will be even more improved than it was in the other place.
6.28
Lord Kennet: My Lords, by far the greater part of this Bill is concerned with precisely who, and at what

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moment, is responsible for sending and receiving various notices and other letters. Of course, Bills have to be like that; but in the mass of pettifogging duties and rights which are laid down there lie, partly hidden, major implications for all users of the seas—and there are international implications—and these should be pulled out and examined on Second Reading.
What is required in this matter, as in others, is that our law should be fully in accordance with our treaty obligations and should be such that if the same law is adopted by all the other countries in the world it will not hurt us—at least, not too much. This is sound Kantian doctrine. The provisions of our law have to accord with the interests of all interested parties: fishing, navigation, pollution control, defence, etc., and that means European as well as British interests. Its provisions should be fully in accordance with how we hope to see the law of the sea developing internationally. That is certainly not a legislative free for all within each country's economic exploitation zone.
I believe it is possible that the Department of Energy on behalf of its client industry has pulled a fast one over the other Whitehall departments. It is not really right that the Secretary of State for Energy, who is so very close to one of the industries that is using the seas, should have authority that is not subject to review by the courts to decide all these matters which are of major interest to many other users of the sea, both British and non-British. It is the intention of this Alliance on these Benches, for whom I am speaking this evening, to rationalise sea-use management generally so that such conflicts of interest, whatever seas we are talking about, shall be better dealt with.
The Government should not behave either in this country or in international fora as though they were the agent of one particular commercial interest, and moreover one whose demise in British waters is prefigured by this very Bill. It may be doubted, and I myself doubt, whether the Department of Energy has engaged in the active consultation that it should have done. Mr. Buchanan-Smith, the subordinate Minister in the House of Commons, told the Committee on this Bill that he had had no formal consultations with the environmental groups, national or international. This evening the Minister has told us that there have been consultations with British fishermen. What about European fishermen? In each case, was there any reason why one should not have had these consultations, and what is the hurry now? Is it not legitimate to suspect that it may be one more case of providing for the interests of a major industry that is friendly to the present Government before they are deprived of the opportunity of doing so in the future?
I turn now to the particular point which gives rise to these observations. The 1958 Geneva Convention on the Continental Shelf states that when these oil and gas installations are finished with they are to be "entirely removed"—no ifs and buts. This country is bound by that convention. On the other hand, the United Nations Convention on the Law of the Sea of 1982 simply says "removed" and drops the word "entirely". However, as the House will remember, the Government refused to sign that convention. They
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should have signed it, but did not in order to please President Reagan.
They are now hoist with their own petard because they are introducing domestic legislation that conflicts with their treaty obligation to ensure the entire removal of these installations. Let us look at what the Bill says. The relevant clause, Clause 1(4)(c) says that such and such will happen:
"if it [the Government] proposes that an installation or pipe-line be left in position or not wholly removed".
It is the major, primary language of the Bill, that it need not be entirely removed. It is perfectly clear from the Minister's speech just now and government speeches in the House of Commons, that the idea is to arrive at a sharing out of costs between the Government and the industry, and that is a good idea, not necessarily for the total removal, but for the partial removal.
There is an argument from changing technology which says that at the time that the 1958 convention was drawn up the very biggest of the rigs, platforms and pipe-lines were the little ones, as was just described by the noble Lord, Lord Carmichael, in the southern part of the North Sea where they are not such a problem and that the concrete monsters in the northern part of the North Sea have been developed since then. If one finds that the law is out of date, I submit that in public as in private life, one does not just break the law but one tries to have it changed. With the UNCLOS convention, the Government have missed their opportunity to change it. I have not heard of any other moves by them to change it.
Moreover, only yesterday, in this House, during the presentation of the Town and Country Planning (Compensation for Restrictions on Mineral Workings) (Scotland) Regulations, the noble Earl, Lord Dundee, made a very interesting point. These regulations are about old permissions to conduct mineral workings in Scotland which have been overtaken by technological change. He said that the mineral industry should accept "reasonable" additional cost arising from the changes in conditions since permission was given. So there we see the Government advocating a shift of the financial burden of clearing up old mineral workings from the public sector to the private, despite new conditions that have arisen since the original deal was done. What is sauce for the goose is sauce for the gander, I think.
The Government's argument for claiming that in law they do not need to have offshore installations entirely removed when they are abandoned or disused is not really a worthy one. They argue that the words of the actual convention to which we are a signatory can be ignored in the light of "customary international law". This argument was set out most clearly in a Written Answer to me from the noble Viscount, Lord Davidson, on the 23rd of last month. He said (at col. 84 of Hansard):
"We accept that the convention as a whole, including Article 5.5, has not fallen into desuetude, nor is it obsolete. But it has to be interpreted in a manner consistent with the object and purpose of the convention and, so far as possible, with customary international law".
It only has to be so interpreted if it is unclear, and I honestly ask the Government: what possible unclarity can there be in the words "entirely removed"?

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Moreover, the Government's present approach to the 1958 Convention does not tally with Paragraph 31 of the 1969 Vienna Convention on the law of treaties. If there is doubt about whether a treaty means what it obviously does mean, one does not have to guess. One goes to the convention on the law of treaties. This states that a treaty:
"shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose".
The next paragraph shows that "context" means the text of the treaty itself. Only when the text itself is obscure can one go outside it to establish its meaning.
Nevertheless, in his Written Answer the noble Viscount went outside it. If he is to sustain his argument that it is desirable or necessary to do that, he must say why the words "entirely removed" are obscure. The ordinary meaning of the 1958 convention shows that "unjustifiable interference" is not allowed during the process of exploration and exploitation. Equally, there is no obscurity about the article which requires that abandoned or disused installations must be "entirely removed" since the exploration and exploitation have now ceased. There is virtually no state practice—and I again refer to the noble Viscount's Written Answer—and the 1982 Convention is not yet in force, and anyway it would not apply because as yet there are not any international standards. So the 1983 UNCLOS Convention cannot be held to allow the reinterpretation of the words "entirely removed".
The International Maritime Convention has barely begun to establish what international star Wards would be appropriate. Have the Government r at in a draft proposal for these standards? In Nover iber last they had not. Only Norway—as the noble Lord, Lord Carmichael, mentioned—has moved away from "entirely removed". The United States has a law which required entire removal down to only 200 metres in depth. As Mr. Buchanan-Smith suggested in the House of Commons, if the Government wish to lead the way among the nations in this matter, it is of the greatest importance that the Petroleum Bill should establish an internationally acceptable formula for allowing less than total removal, and until then should be observed.
The Government of our country support the Exploration and Production Forum of the oil companies. I understand that the Government are saying that the International Maritime Organisation may develop standards only for the safety of navigation and not for anything else. However, other interests, such as fishery and pollution control and the rights and duties of other states, must also, they say, be taken into consideration. But, say the Government, these other interests fall within the purview of the coastal state, and therefore no other body or organisation can interfere with the development of standards. I do not know how the Government can say that about the high seas but it appears that they are doing so. Perhaps the noble Viscount will have something to say about that. In any case, the International Maritime Organisation is going beyond safety in navigation. There is a West German paper about modern fishing which claims that the interests of fishermen down to 1,000 metres—not 40—must be
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taken into account. The Soviet Union and West Germany both want to bring in the IMO legal committee, the maritime environment protection committee of IMO, and the London Dumping Convention. And fisheries in our country, and all round the North Sea are a European Community affair and not national.
The long and the short of it is that this Bill is a curiosity. It is against treaty obligations; and the Government pretend that it is not. That is quite a rare situation. There will have therefore to be amendments not to bring it into line with our treaty obligations—that would be impossible at this stage, with the make-up of Parliament as it now is—but to make it possible for the Secretary of State to behave as well as he can in administering this Bill. At the moment he will be bound by the terms of the Bill to go against international obligations, even though he may not want to.
I shall put down three amendments at Committee stage. If the House does not mind, I shall take the trouble to tell noble Lords what the amendments are because it is good to put them forward in advance. I shall be joined in those amendments by the noble Baroness, Lady White. That will make them all-round Opposition amendments. They are designed to make it easier for the Secretary of State to do the right things as he operates the Bill, although no one can compel him so to do. One amendment will provide for an oilfield installation advisory board. My honourable friend Mr. Malcolm Bruce proposed this in Committee in the House of Commons. This would provide statutory representation for fisherman, environmental and pollution interests, and others. Another amendment will remove the limitation that the Bill imposes on the Secretary of State's consultations; namely, that they shall be with UK people only. A third amendment would require the Secretary of State to have regard to international guidelines and regulations as they come along.
I am sorry to have spoken at a little length, but I thought it worth giving the background to what may be some controversial amendments which will come up later.
6.45 p.m.
Lord Campbell of Croy: My Lords, I should like to thank my noble friend Lord Davidson for carefully explaining the purposes of the Bill. I propose to address my remarks to the main part of the Bill, Part I, on the abandonment or de-commissioning of the structures and pipelines.
I again declare an interest. For the last 11 years I have been working with an oil company which is the operator of one of the largest fields in the North Sea. That field has been on stream for eight years. I agree that a Bill of this kind is needed. It is introducing procedures to ensure that everything necessary is being done beforehand. When installations are no longer required, those responsible will have to put into effect adequate plans which will not be vulnerable to unforeseen financial misfortunes or other changing circumstances. Of course responsible companies have already envisaged, and have been prepared for, work and expense when the life of an offshore field has

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ended to ensure safety and to remove obstructions to shipping or fisheries.
The Bill should provide the framework and the procedures required on the United Kingdom continental shelf. The first installations are expected to become redundant in the early 1990s. I would remind your Lordships that the first to be installed on the continental shelf of Britain were the gas platforms, starting 20 years ago. With the discovery of oil in the early 1970s, much larger structures were needed in the northern basin of the North Sea, the gas having previously been discovered in the southern basin. Most of those structures were steel but some were concrete. They were floated out to the fields and there firmly secured to the sea bed. It was intended that they should be in position there for the whole life of the field, which typically is between 10 and 30 years.
A system of pipelines has also been laid out to the mainland Orkney and Shetland and connecting some fields with others. Most of the oil and gas so far produced have come from the North Sea, but not all. I would remind the House that the Beatrice Field is within the Moray Firth, only 13 miles from the coast of the mainland. I would also remind the House of the gas field in Morecambe Bay, on the west coast of England. Exploration is being undertaken and licensed in other areas, including to the west of Shetland and to the west of the Scottish mainland, although it is not proceeding as fast as it might owing to the fall in crude oil price over a year ago. More discoveries are expected in these new areas as well as in the North Sea.
There are technical difficulties to be encountered and mounting expense where the depth of water is considerably greater than in the North Sea fields already being developed. Now that we are making positive arrangements for abandonment of oilfields in this Bill we must be careful, I suggest, to avoid misunderstandings which can occur in public discussions. The oil is not due to run out in the next 10 or even 20 years. I foresee it flowing from the United Kingdom continental shelf for at least 40 years.
It is true that there will be a decline in the quantity being produced each year. Indeed, the peak for annual United Kingdom production is probably being reached about now. That does not mean that the oil will shortly come to an end. Some commentators have in the past year or two confused this peak rate being passed with the oil drying up altogether. One has heard remarks about no more oil after 1990 or when the oil runs out in the early 1990s. There is still a lot to come, but the annual rate will decrease over a period of years—a fact which of course the Treasury has to take into account.
The Bill leaves each installation to be dealt with individually, depending upon the circumstances. I am sure that that is right. In very deep water it may not be necessary to remove a platform completely. More than enough of it should be removed to ensure that it offers no obstruction to surface vessels. In shallower water, nearer the coasts, the requirements of the sea fishing industry are likely to influence plans. An obstruction left on the sea bed, if it is on a recognised fishing ground, could make difficult or impossible the use of trawls, seine-nets or similar fishing gear.
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The action required to remove installations after they have served their purpose is all part of the task of winning the oil. The costs should therefore be taken into account in taxation. This, it seems, the Government recognise. No doubt there will still be detailed discussions ahead about the precise application to various situations.
A lot of money will be spent over the next 30 years at least for work on dismantling offshore structures. This can, and should, be earned by British firms in the ancillary industry which serves the oil companies. They are passing through a difficult time of recession at present. If they can get into this abandonment business at the right time and become specialists, there is a great deal of contracting to be won. They can also use the acquired expertise in oil provinces elsewhere in the world.
I understand that the Government have consulted and kept in close touch with the United Kingdom Off-shore Operators Association and that some amendments made in another place have met, to some extent, the views expressed by the association. Nevertheless, I am sure there will be further points to be raised in later stages as the Bill passes through this House. In principle, I feel that it deserves our support.
6.53 p.m.
Lord St. John of Bletso: My Lords, I, too, wish to lend my support to the Bill. As with the noble Lord, Lord Campbell of Croy, my interest in the Bill stems from having worked for two years for a major oil company and now working as an oil analyst for one of the stockbroking firms in the City.
I wish to address my remarks to Clause 1 of the Bill. With the volatility of the oil market and the limited lifespan of several of the North Sea platforms—here I should mention Shell's Auk field, and the Heather, Montrose and Tartan platforms, all of which are scheduled to come off stream in 1992. It is indeed right to tackle the immense problem of dismantling our North Sea platforms now. New Scientist forecast last year that as many as 40 fields, each with many platforms, will become redundant by the year 2010. An article in The Times on 15th November 1986 stated that:
"Britain has become the first oil-producing country with a cohesive policy of what to do with the big off-shore platforms once the oil runs out."
In essence Clause 1 provides a framework for the safe and orderly abandonment of installations. Of the almost 6,000 oil production platforms scattered across the world, most are in shallow water—that is, less than 40 metres, and are comparatively easy to remove. The North Sea with its 139 oil and gas fields makes up the world's largest concentration of deep water platforms. Central to this Bill is the need to balance the safety of navigation, fishing and environ-mental interests with the most cost effective means of abandonment.
As the Minister mentioned in his opening address, estimates of more than £6 billion have been quoted for total removal of the existing platforms from the North Sea, let alone any new ones. As decommissioning is a capital expense, the taxpayer is liable to bear approxi-mately two-thirds of this figure through the oil

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companies receiving rebates on petroleum revenue tax.
The noble Lord, Lord Kennet made mention of the international law on abandoned platforms. Indeed, this law is ambiguous. The 1958 Geneva convention on the continental shelf is unequivocal about abandoned oil platforms. Article 5.5 states:
"All installations which arc abandoned or disused must be entirely removed".
I have a great respect for the knowledge of the noble Lord, Lord Kennet, of international law, and I stand subject to correction, but I am not of the opinion that Britain is bound by that convention as Britain was not a signatory to the convention.
The United Nations law of the sea Convention of 1982 however permits partial removal to generally accepted standards. We are all aware of the recent International Maritime Organisation conference in January, which sought to identify the key conditions to be met if part of an off-shore structure is to stay on the sea bed. These conditions are: the need to preserve the safety of navigation, to avoid pollution, to protect the needs of fishing, and finally, to protect the needs of other users of the sea.
I understand that the deepest draught of any existing ship is 28.6 metres. This would conform with the Exploration and Production Forum's proposed safety standard, which, requires that:
"partially removed structures must have 40 metres of water above them at lowest tides".
Several noble Lords have mentioned the substantial cost savings, which would be up to £2.7 billion, should the Government permit the toppling or partial removal of abandoned platforms to a safe depth in the deepest parts of the North Sea.
Dumping debris at sea rather than on land would cut costs by a third. However, a note of caution ought to be made on the issue of toppling. New Scientist stated on 27th February 1986:
"No one has ever toppled a large platform. The technique does not necessarily require any dismantling of topsides and decks, but if anybody does ever try they will have to succeed first time. An incomplete collapse that left wreckage above the 40-metre mark would be very difficult and dangerous to deal with. Toppling a jacket platform into a particular position is a complex task. Platforms have up to eight or more legs and they are buffeted by tides, currents, waves and winds. Cutting the legs in the right place and at the right time is a problem that needs detailed evaluation".
I certainly would lend support to such cost cutting measures but of critical importance is the responsibility to ensure the safety of our sea traffic and protection for the fishing industry. Many alternative uses have been raised for the old oil platforms—for example, the formation of artificial reefs, the so-called "rigs-to-reef' idea raised by the honourable Member for Exeter when the Bill was debated on Second Reading in the other place. Other suggestions have been for meteorological stations and also search and rescue bases for helicopters which would keep the deep waters of the North Sea accessible to helicopters for sea rescues. Certainly, these are innovative alternatives but they will cater for only a few of the abandoned platforms.
Much concern has been expressed about segments of partially removed platforms shifting across the sea bed. With partial removal the simplest way to ensure
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that tanks and chambers stay still on the sea bed is to put a large hole in them with a flame cutter or an explosive charge. Should a partial removal be approved by the Secretary of State under Clause 4 of the Bill, it would obviously be most important to publicise the depth, position and dimension of any structure not entirely removed.
In conclusion, there are two questions upon which I should appreciate some clarification from the Minister. First, it is clear that the fishing industry is adamant that there should be total removal of all abandoned platforms. Apart from the United Kingdom Offshore Operators Association, which pays almost £100,000 each year against claims submitted for fishing equipment damaged by its members' debris in the North Sea, will the fishermen have any compensatory recourse for damage and/or loss caused to their equipment by partially removed platforms?
Secondly, have the Government a general policy on the removal at least of the 99 steel platforms mentioned by the noble Lord, Lord Carmichael of Kelvingrove, which are lying in the southern North Sea and almost all of which are in shallow water?
Ultimately the responsibility rests on the owners of the platforms for their final removal, whether that be partial or complete. There is no doubt that the removal of these platforms will become a multimillion pound industry which could, according to the National Economic Development Council, provide many thousands of new jobs.
The Bill goes a long way to ensuring that oil companies meet their responsibilities. It will assist them in more accurately costing their programmes to clear their abandoned platforms. I therefore reiterate my support for the Bill.
Lord Kennet: My Lords, before the noble Lord sits down, may I correct a mistake that he made? He said that this country did not sign the 1958 Convention on the Continental Shelf. We did sign it. Moreover we were the first country to sign it. There is no ambiguity either in the wording of the treaty or in the fact that we are bound by it.
Lord St. John of Bletso: My Lords, as I mentioned, I stand subject to correction. I obtained my information from the New Scientist, which states that the 1958 Geneva Convention on the Continental Shelf, which Britain has not signed, is unequivocal about abandoned oil platforms.
Lord Kennet: My Lords, to round this off, it is clear that there is confusion with the 1983 Convention on the Law of the Sea. That is the one that we did not sign.
7.2 p.m.
The Earl of Lauderdale: My Lords, like the noble Lords, Lord St. John and Lord Campbell of Croy, I have an interest to declare. During the last seven years I have been working for an oil company which has produced from the Frigg Field one-third of Britain's domestic gas supply and in the coming year will be bringing on stream the North Alwyn Field in which we have a two-thirds financial stake. That is an example of the development that is still going on, and we have projects in our minds for further developments,

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whatever the relatively ignorant public may say about oil and gas running out.
We are all agreed that this is a useful Bill. It is an enabling Bill, but it is one that proceeds with its life under the dark shadow of interpretation and implementation. The Bill leaves literally all the options open and, in my view, that is to its advantage. It focuses mainly on different categories of structure where about 10 heavy concrete platforms were floated out. It remains to be seen whether they can be floated away again having been de-watered. It relates in effect to the toppling of 35 or more of the heavier steel or steel and concrete hybrid platforms, leaving a clearance of a good 120 feet of water above them so that shipping can pass freely. The Bill relates to about 100 smaller platforms—this is sometimes overlooked and my noble friend referred to it briefly—and to nearly 3,000 miles of sea bed pipelines.
I was very interested in, and look forward to hearing more about, my noble friend's statement that of course, first of all, partial removal is in the Government's mind, but that we shall nonetheless conform to our international obligations.
I was not surprised that the noble Lord, Lord Kennet, dwelt on this at some length. It is a subject in which he has specialised and in which he is terrifyingly knowledgeable. It is fair to say that the 1958 Geneva convention is about as far removed from today's North Sea bed conditions as the Iron Age is from the present day. So much has happened technologically that it must be open to question how far it is even relevant.
I should like to know, and I hope that at some stage my noble friend can enlighten us, the extent to which other countries have signed and ratified the convention (if it requires ratification) and how far that convention is now part, in effect, of our domestic law and how far it is part of the domestic law of other countries. This is a matter which obviously we can probe when we come to the Committee stage. It is helpful of the noble Lord, Lord Kennet, to tell us what amendments he proposes to put down so that we can focus our minds on them in the meantime.
What is important about this Bill is that whatever the 1958 Geneva convention says about the removal of "every trace" (I think that is the term) of the structures—however it may use that term—this Bill is an enabling Bill. It leaves the Government free to do what they think is best or, to take a term from the noble Lord, Lord St. John, what is most cost-effective.
It is important to bear in mind that the drift, seemingly, of thinking in the International Maritime Organisation is towards toughening rather than easing the conditions about removal that should obtain. A working group of its sub-committee on safety of navigation as recently as 15th January last issued a report including an annex which suggested guidelines. In them there is the term "entirely removed …without exception", in cases where there is no further use for a structure.
There is a further point which will no doubt come up in Committee; the IMO thinking, so far as it is accurately represented by this working group, is that:
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"coastal states must unambiguously ensure that legal title to, or responsibility for, any installations (or parts of them that may be allowed to remain) is established quite clearly".
It seems that the IMO at any rate and those who think in that way are trying to weave a web of restrictions which may in the end not be helpful to anybody. The sea bed is already strewn with wrecks. I do not remember it ever being said that the hapless owner of a ship that goes down is for all time responsible for the wreck. It may be that he is, but I should like to know what international law says about the matter.
I understand that it is because of the trend of thinking in the IMO that in proceedings in another place the Government resisted pressure from industry against companies being committed to continued liability indefinitely, even after the Government have given an official certification that any abandonment programme has been properly completed.
We cannot look at the matter without also looking at the economic uncertainties of sea bed exploration and development. As my noble friend Lord Campbell of Croy said, there is still much to come, and to throttle or prevent that may be greatly to everybody's disadvantage, including the fishermen who use diesel oil to fuel their vessels.
We shall need to encourage further investment. Between them the oil and gas companies have already given the Government more than £50 billion in revenue over the past 10 years and have re-invested £33 billion over the same period. So the input and the benefit to our economy from those operations is considerable.
While I respect the comments of the noble Lord, Lord Kennet, that perhaps the Department of Energy has for once pulled a fast one on the other departments and got in with a Bill which may be said to favour the oil and gas companies rather than other interests, these are not interests that should be lightly cast aside. I ask the Government whether they really want North Sea or offshore continental shelf investment to dry up. Given the uncertainty of the market, almost anything can happen.
At a price of 15 dollars a barrel, which we had as recently as the other day, about eight platforms would be deemed to be superfluous—perhaps I should say that they would be doomed to be deemed to be superfluous—by about 1990, in three years' time. On the other hand, at 25 dollars the figure would be half that. Therefore the uncertain climate of the oil world is a factor that must be taken into consideration when the environmentalists, the fishermen and all the others plead their cause. We, too, have a cause to plead and it is one that we have no reason to be ashamed of.
Lord Kennet: My Lords, before the noble Earl finishes blaming me for the drying up of North Sea investment single-handed, does he agree that to ask a Cabinet Minister to judge fairly between conflicting claims on the public purse and the public wealth is not automatically to ensure a victory of the weakest over the strongest; nor would one wish a victory of the weakest over the strongest—just balance and justice?
The Earl of Lauderdale: My Lords, I am grateful to the noble Lord for the intervention. He has had more experience in government than have I and therefore I

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would defer, with respect, to what he said. However, I am certain that it is important that the energy industry should be encouraged, and be seen to be encouraged, if investment is to proceed.
I believe that it is important—and industry has indicated its appreciation—that the Government appear to have dropped their Wild West, scatter-gun approach by which almost any bank involved in helping to finance development might, under the original terms of the Bill, be sucked into a joint and several liability for abandonment costs. As with extractive industries in general, it is quite clear that the Government accept that site restoration is a cost over the whole life of the enterprise and is therefore properly to be set against tax. However, the point remains that unless investment is encouraged it will become more costly and there will be less of it and less benefit to the community at large.
There was relatively little reference to pipelines, except by the noble Lord, Lord Carmichael of Kelvingrove, whose points I thought were of great interest. There is a real war on not only against the stubble of toppled structures leaving a seaway clearance of 120 feet above them, but also against pipelines. Most of the pipelines are on, and also often under, the sea bed, having been deeply trenched when they were laid. There are more than 2,200 miles of pipeline in deep water and about 650 miles in shallow water; nearly 3,000 miles in all.
As far as I am aware, there has been relatively little complaint hitherto concerning the damage to trawl nets and seine nets through entanglement with those pipes. Even if there were such complaints in the future, I believe that the free replacement of nets would make much more sense than to tear up the pipelines.
Many of the pipes may well be of use to smaller oil and gas fields in the future, controlled by sub-sea wellheads. In that sense, the surviving pipelines could well assist cheaper energy provision. In the meantime, they are easily sterilised by being filled with water and plugged at either end. I believe that to tear them up would be vandalism of monumental proportions; but that seems to be implied in IMO thinking.
One is much tempted to seek for alternative uses for the platforms. I find that the great difficulty is that as the platforms become older they need increasing maintenance. For a platform which is 300 feet high, having cost, say, £300 million, after 10 years of life, or maybe less, one will probably have to spend £10 million on maintenance each year as metal fatigue advances and wear and tear take effect.
At one time I was tempted with the idea that some of the platforms might be used for offshore power plants. However, one would not get many windmills on a platform which had a top about the size of a rugger field, and it would require great ingenuity to design a nuclear power plant to fit into such a small place. Therefore, it would seem that the upkeep of platforms is not on, once they are no longer needed. It seems to me that far the best hope is that either the shipbreakers can take them away or that they can be toppled to a suitable depth.
So far as I understand the position, the industry is broadly satisfied with the Government's response to its anxieties. However, the industry is anxious
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(reasonably so, in my view) about unlimited financial liability for what in many cases will be sea bed wrecks. I join with other noble Lords in wishing well to the Bill, and I wish good sense to the Government in its application.
7.20 p.m.
Lord Taylor of Gryfe: My Lords, the content of this Bill has been well covered this afternoon by experts in this House. Once more we have the good fortune to be able to draw on a wide range of experience in dealing with this matter. I very much welcome the opening statement of the Minister in which he said that abandonment is a problem for the future but steps have to be taken now. It is almost unique in political experience these days to find anticipated difficulties being dealt with at the appropriate time. What we are dealing with this afternoon is providing the legislative framework which makes these anticipated necessary steps real.
Several noble Lords have mentioned that while we are out to establish the legislative framework, the physical effort of removal of these rigs is a matter for industry. I hope that the Scottish industry, which developed a considerable expertise in oil industry exploration, will tackle the abandonment with the same enthusiasm. It is probably difficult psychologically to become equally enthusiastic about dismantling when you lose all the excitement of the creation of this considerable industry.
I would be interested too in the Government's comment on the financial aspect of these provisions. I accept of course that this will be a phased operation, and I accept that the obligation to the companies might be in the region of £6 billion, of which perhaps 70 or 80 per cent. might be reclaimed from the taxpayer in the royalties and the PRT which have already been paid by the companies to the Government, but there is a considerable problem of government funding involved in the passing of this Bill.
We are indebted especially to the noble Lord, Lord Kennet, on these Alliance Benches for his considerable knowledge of our international obligations. I do not expect that the Minister will be able to spell out tonight all the details of the Geneva Convention and the other conventions and international agreements covering fisheries, navigation safety, pollution and other matters which are matters of international regulation. We must not assume that we ourselves in this country can undertake responsibilities in these fields, ignoring the implications for other users of the sea. I assume that the Minister will be able to give us some assurance in general terms that wider consultations will take place in this area beyond those which have already been mentioned by Mr. Buchanan-Smith in the other place.
I should like to say a word about the oil companies themselves and their response to our proposals. The offshore oil industry has put on record that it recognises its duty and responsibility to comply with abandonment regulations, and will make every effort to carry them out as efficiently as possible and at minimum cost. However, some of the detail of the clauses is disturbing to the industry. In particular, the effective removal of the principle of corporate limited

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liability in relation to abandonment ought to be clarified.
There is a power assumed in the Bill—and it is a complete power—by the Secretary of State to approve, reject, amend or even impose a programme of abandonment without there being any published form of appeal or any published criteria of the basis on which he is going to judge these plans, and perhaps at some stage the Minister would care to look at this overwhelming power. It is a matter of public debate. We are talking about large sums of money, and we have to make some public declaration of the kind of criteria against which these plans may be rejected or amended.
I agree with the noble Earl, Lord Lauderdale, that we must ensure that this is a continuing business so far as possible, and that it does not become unattractive to develop marginal fields. The Government wisely and rightly in the past have encouraged small companies in this industry. I think that half of all the licensed acreage is in the hands of the small companies, and one-third of the total oil and gas reserves are in the hands of the small companies. I know very well that some of the large companies have been careful to make provision for the eventuality that is contained in the Bill, but we must not be unmindful of the fact that small companies have a role in this Bill, and I hope that small companies will continue to be encouraged to develop in this area.
I should like to say—perhaps I should declare an interest—a word about the position of banks and financial institutions in relation to the Bill. The potential liability of banks and financial institutions having a financial interest in offshore installations or pipelines for the abandonment obligations of their borrowers could have serious knock-on effects for investment in offshore activities generally. It was never the intention to serve notice on these organisations where their interest was confined to security for a loan, but I think that this must be looked at seriously. However, where their interest is greater than just security for a loan—for example, if the bank becomes the owner of a licence—then inevitably the obligation for abandonment falls on a bank or a financial institution. We have to watch where that leads us in relation to further support in the form of bank loans and bank support for new exploration.
On these Benches we give general support to the Bill. It is a wise Bill, it anticipates a need, but we shall of course require to be satisfied on the points raised by the noble Lord, Lord Kennet, in relation to international obligations. We shall require to have some satisfaction as to the powers of the Minister in relation to acceptance of abandonment plans. Subject to seeking these further assurances, on these Benches we shall give support to the Bill.
7.28 p.m.
Viscount Davidson: My Lords, this has been a valuable and interesting debate on an important piece of legislation. I am most grateful to noble Lords who have taken part and for the general welcome that the House has given to the Bill. This Bill concerns the operations of a major industry which has brought enormous benefits to the United Kingdom. The
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abandonment of offshore installations needs to be carried out in a safe and orderly way, taking account of the many other interests that are included, such as the fishermen and the taxpayer, and within the UK's international responsibility to protect the safety of navigation.
Responsibility and consultation are key words: the responsibility of the owner of an installation to ensure that adequate arrangements are made for abandonment and to ensure that the job is properly carried out; and consultation because we recognise the complex interests involved. As I said in my opening speech, this Bill is the product of over a year of consultation, and further consultation is enshrined in its provisions. As a result of this consultation a number of improvements have already been effected in another place.
The spirit of co-operation with which your Lordships have approached the Bill is true to this consultative principle, and I shall do my best briefly to answer some of the points which have been raised. But I am sure your Lordships will forgive me if I do not answer all of them at this stage of the Bill. It is clear that we shall have ample opportunity to discuss all these matters further at later stages. The noble Lord, Lord Carmichael, to begin with, quoted his honourable friend's reference to a figure of £352 billion revenues from the North Sea. That is a misprint in Hansard. That is a good start! The actual figure from 1979–80 to 1985–86 was £52 billion.
Lord Carmichael of Kelvingrove: My Lords, I am grateful to the noble Viscount. He will realise that after seeing that figure I asked a number of people about it. They were amazed, but since the Minister had not corrected it that is the only explanation that could possibly fit the facts. Thank you very much.
Viscount Davidson: My Lords, I am delighted I have been able to help the noble Lord. He also talked about fiscal problems. On that, I have to say that if a fiscal route to abandonment relief is maintained relief will be against royalty, PRT and corporation tax earned by the companies previously. The noble Lord suggested that the Government should contribute towards the costs of abandonment through grants rather than tax relief. We have not closed our minds to the idea, though we need some convincing that it is right. If subsequent discussions lead to its adoption, the provisions for carry-back in the Bill will not be used. As a matter of interest, I should mention that in April 1986 the Norwegians passed an Act establishing the framework for meeting the government's share of abandonment costs and a company there is likely to receive grants of a proportion of the costs equal to that proportion of field profits previously paid in tax.
The noble Lord also asked about research and development programmes. The Department of Energy is contributing £70,000 to a Science and Engineering Research Council programme costing £570,000 on the abandonment of offshore structures. The programme includes research on wells shut down, debris removal, environmental and fisheries implications, explosives technologies including safety aspects, metal and cutting technology and removal of gravity structures. Other contributors include oil companies and contractors. The overall aim of the programme is to

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identify those activities in the decommissioning, abandonment and dismantling of structures where technological development is a prerequisite or where such development leads to major cost savings and to identify where safe, efficient and cost-effective removal strategies can be established.
The Earl of Lauderdale: My Lords, will my noble friend say before he leaves that point whether this research will include consideration of alternative uses for platforms?
Viscount Davidson: My Lords, at the moment I cannot tell my noble friend whether or not it does, but I shall write to him and make sure that he knows before the next stage of the Bill.
The noble Lord, Lord Kennet, asked about the 1958 Geneva Convention on the Continental Shelf. He mentioned that I had answered a question in Hansard on 23rd February 1987. I do not think I can really add much to that except to say that the 1958 convention is to be interpreted, first, in accordance with its purpose to prevent unjustifiable interference with other users of the sea; and, secondly, recognising that in 1958 all existing platforms were in shallow water and were relatively easy to remove.
Circumstances today, as my noble friend Lord Lauderdale rightly pointed out, are completely different with many platforms in deep water which will be difficult and very expensive to remove. These concerns led the provisions of the 1982 (not 1983, I believe) Convention on the Law of the Sea which allowed partial removal. These provisions reflect international consensus that the purpose of the 1958 convention to prevent unjustifiable interference with other users of the sea can be achieved without the need for the entire removal of all installations. I confirm to the noble Lord, Lord St. John, that we have not signed the 1982 convention. I did not want to get involved in what was becoming a private argument at the time.
The noble Lord, Lord Kennet, will not expect me to go into too much further detail at this stage in reply to his speech, as the noble Lord, Lord Taylor, anticipated, especially as he has kindly told the House of his intention to put down three amendments at Committee stage, when I suggest it might be more appropriate to discuss the subject in greater detail.
I very much welcome the support which my noble friend Lord Campbell of Croy has given to the objectives of the Bill. I echo the remarks he made concerning the importance to the future of the UK offshore supplies industry of seizing the opportunities arising from the abandonment operations. The industry has been at the forefront of the development of deep water production technology and I believe that ii. is well placed to apply this knowledge in relation to abandonment both in the UK and elsewhere.
The noble Lord, Lord St. John of Bletso, asked me two questions. The first was about compensation for fishermen's claims as a result of possible damage caused by partly removed platforms, presumably when the oil companies have left the North Sea or that part of it. This question is under discussion between officials and the fishermen. It will also need to be discussed with the oil industry. I very much hope that
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some permanent arrangements can be put in place which will meet the fishermen's worries about damage caused by oil-related debris. He also asked me about the Government's attitude towards shallow water steel platforms in the southern North Sea. The abandonment of each installation will be approached on a case-by-case basis. However, it is likely, given the shallowness of the water in the southern North Sea, that installations in this area will be totally removed to ensure safety of navigation.
My noble friend Lord Lauderdale mentioned the January meeting of the International Maritime Organisation. A helpful feature of this was the clear acceptance by the IMO working group of the principle of partial or non-removal in appropriate circumstances; for example, where the installation or part of it will serve a genuine use or a genuine new use and where it can be left in place without causing unjustifiable interference with other users of the sea. The group also suggested that partial removal is also admissible where entire removal is technically not feasible or would involve extreme cost or an unacceptable risk to personnel or the the marine environment.
My noble friend also asked me whether the 1958 Geneva Convention on the Continental Shelf has been incorporated into UK domestic law. The answer is, yes and no. Effect has been given to some of the provisions—for example, those permitting the creation of safety zones around offshore installations—but other provisions of the convention including those dealing with the removal of offshore installations have not been incorporated into UK domestic law.
The noble Lord, Lord Taylor of Gryfe, made the point that it was rare for legislation to be prepared and passed well in advance of the time when the problems which it was drafted to resolve are likely to arise. or words to that effect. I must agree with him. It usually works the other way round, but I am very happy to be associated with this particular instance. There is nothing in the Bill which restricts the extent to which the Government may consult nationally or internationally. We shall play a full part in those international organisations which have a role in this matter, such as the IMO and others who may develop an interest in abandonment; for example, the London Dumping Convention and the Oslo Commission. On environmental matters we already have a well-established relationship with the Nature Conservancy Council which will be well maintained.
Lord Kennet: My Lords, it states in the Bill at Clause 11(5):
"Before making regulations under this section the Secretary of State shall consult organisations in the United Kingdom appearing to him to be representative"—
and so on. The Minister just said that there was nothing in the Bill to confine consultations to the United Kingdom.
Viscount Davidson: I am afraid, my Lords, that the noble Lord has bowled me a very fast one. I cannot answer that question but, again, I shall write to him.
Finally, this is not a Bill dealing with a hypothetical situation. It deals with real events of importance to the

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UK offshore operations in the years to come. The Bill highlights and demonstrates a continuing need for co-operation between the Government and the industry. It provides a framework upon which time and the necessary knowledge and experience will allow us to build the detailed standards and practices required for the safe and orderly abandonment of offshore oil and gas installations on the United Kingdom continental shelf. I commend the Bill to your Lordships.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Rate Support Grants Bill
7.40 p.m.
Lord Skelmersdale: My Lords, I beg to move that the Bill be now read a second time.
This is mercifully a short Bill to abolish the procedure known as grant recycling. It deals with the arrangements by means of which block grant is paid to local authorities, and has been certified in another place as a Money Bill. It nonetheless requires your Lordships' consent, and the House will therefore wish me to explain both the reason for it and the way in which it works.
Before I do this, however, it would be appropriate for me to describe briefly how the system works at present and why it needs to be changed. Well before the start of each financial year my right honourable friend the Secretary of State for the Environment announces how much grant is to be made available to local authorities from the Exchequer. From this he deducts the amounts which he estimates will be needed for specific and supplementary grants, and after a further deduction for domestic rate relief grant the balance is the amount of money which he calculates will be available to local authorities as block grant.
My right honourable friend also announces in advance the principles on which that grant is to be distributed and provides an estimate of the amount of grant which each authority can expect to receive for a given level of expenditure. Some assumption about authorities' expenditure needs to be made at this stage, both in order to provide these exemplifications—since an authority's grant entitlement depends on its level of spending—and to set the grant-related poundage schedules which govern the distribution of the total grant available. It can only be an assumption, of course, because authorities at this stage have not yet set their budgets for the year.
Later on information about authorities' actual grant entitlements becomes available as their actual spending levels become known. Some authorities will have spent below the assumed level and in most cases are therefore entitled to more grant. Others will spend above the assumed level and can claim less grant than anticipated. In either case, however, because a fixed total amount of grant must be distributed, the whole sliding scale of grant entitlements and the grant-related poundage schedule which governs their distribution must be re-calculated in a supplementary report so as to achieve this. When authorities in aggregate spend more and lose grant entitlement, the resulting
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underclaim is eventually redistributed among all authorities on a common poundage basis. This is what is meant by the term "grant recycling", otherwise known as "close-ending". The process is repeated periodically for each grant year as new and better information about authorities' actual spending becomes available, always ensuring that the same aggregate amount of grant is distributed.
The procedure has a number of disadvantages which have become increasingly apparent to the Government and also to many local authorities. First, individual authorities have no real certainty as to their likely grant entitlement at the crucial stage when they are setting their budgets and their rates for the forthcoming year. Any estimates of grant can only be provisional, as relatively large amounts can later be made available, or be lost, purely as a result of other authorities' spending decisions.
This makes for uncertainty and instability. Even where authorities subsequently gain additional grant, this often happens too late to be taken into account in rating decisions; and of course in cases where negative recycling, or clawback, operates as a result of a grant overclaim, this can cause particular difficulties.
In 1985–86, for example, initial grant claims exceeded the amount available by £123 million. So £123 million had to be clawed back from all authorities' entitlements. But that is not the end of the matter. During the course of the year the GLC adopted a new budget, with the aid of some creative account-ing, which reduced its budget by £34 million. Subsequent court decisions against the GLC reduced its actual spending by another £100 million. As a result, its grant entitlement has risen by £100 million. That amount will have to be found at the expense of all other authorities, well after the end of the year in question, simply to ensure that the same total amount of grant is paid out as was originally envisaged. That provides a good example of the absurdity of the current close-ended system and the quite unacceptable uncertainty which it creates for local authorities.
A further disadvantage of the present system of particular concern to the Government is the fact that any grant recycled when there is an underclaim is distributed to both high- and low-spending authorities alike. Authorities which choose to penalise themselves by spending up and which lose grant as a consequence can paradoxically receive back large amounts of windfall grant, regaining on the swings what they quite justifiably lost on the roundabouts. This then is how the system works at present, and why it needs to be changed. The Bill which is now before your Lordships for consideration will amend it with effect from the financial year beginning on 1st April.
Clause 1 contains the substance of the Bill. It enables the Secretary of State to end the practice of grant recycling by requiring him not to be concerned always to distribute a fixed aggregate amount of block grant. Instead he may vary the amount of grant payable, as the sum of authorities' actual grant entitlements varies.
Clause 2 contains a clarification of the definition of classes of authority which, though incidental to the abolition of grant recycling, is needed to ensure the smooth operation of the modified scheme by

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removing a possible area of doubt in the existing legislation. It ensures that the definition which applies in Section 59 of the 1980 Local Government, Planning and Land Act applies in other sections of that Act where the words, "authorities of the appropriate class", appear. The third and final clause of the Bill provides that it shall apply in England and Wales only.
On a technical level, what this Bill does is to ensure that the grant-related poundage schedule determined in the main rate support grant report to distribute the full amount of grant then available will not in future be redetermined to take account of individual authorities' spending decisions. What this means in practice is that if authorities collectively are entitled to less grant because spending turns out to be above the assumed level, the unclaimed grant will not be recycled to them. Conversely, if they turn out to be entitled to more grant in aggregate, this will be made available from the Exchequer.
This, we believe, will bring real benefits to local authorities in terms of greater certainty and stability. They will know their grant entitlement for any given level of spending at the time of the RSG settlement and will be able to set their budgets and their rates in the knowledge that other authorities' spending decisions will not affect them, as they do at present. Unlooked for and uncovenanted sums of grant will no longer wash in to authorities' accounts long after their rates for the year have been set; neither will the Government take away grant in order to pay for some sudden increase in another authority's entitlement. An authority's grant will depend solely on its spending decisions. I commend the Bill to your Lordships.
Moved, That the Bill be now read a second ti me.—(Lord Skelmersdale.)
7.48 p.m.
Baroness David: My Lords, I should like to thank the Minister for his explanation of the Bill and of grant recycling, clawback, flowback, close-ending and so on. We are becoming familiar with those terms after the last week or so.
This Bill is, I think, the 43rd piece of legislation concerning local government and the 16th actual local government Bill which we have had from the Government since 1979. This Bill is designed to make further provision as to the calculation of entitlement to block grant. The Local Government Finance Bill, which we passed just this afternoon, is a Bill to validate things done by the Secretary of State in connection with rate support grants and the limitation or reduction of rates and precepts for local authorities.
The Rate Support Grant Act 1986 is,
"An Act to validate certain block grant determinations already approved by the House of Commons; and to clarify and amend the law relating to rate support grants."
The Local Government Act 1986 is,
"An Act to require rating authorities to set a rate on or before I st April: to prohibit political publicity and otherwise restrain local authority publicity."
The Local Government Act 1985 is,
"An Act to abolish the Greater London Council and the metropolitan county councils; to transfer their functions to the local authorities in their areas and, in some cases, to other bodies."
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The Local Government (Interim Provisions) Act 1984 is,
"An Act to make provision for the composition of the Greater London Council and the metropolitan county councils pending a decision by Parliament on their continued existence."
The Rates Act 1984 is,
"An Act to enable the Secretary of State to limit the rates made and precepts issued by local authorities."
The Local Government (Miscellaneous Provisions) Act 1982 is,
"An Act to make amendments for England and Wales of provisions of that part of the law relating to local authorities".
The Local Government Finance Act 1982 is,
"An Act to abolish supplementary rates and supplementary precepts; to require rates and precepts to be made or issued for complete financial years."
It all started with the Local Government, Planning and Land Act 1980, of which we have heard quite a lot in the last few weeks, which had the audacity to call itself—and this is how it still reads—
"An Act to relax controls over local and certain other authorities".
That is the history, or some of the history, of the local government Acts with which we have had to cope, and with which local authorities have had to cope, since this Government took over in 1979.
This Bill, short as it is, will have a serious and damaging financial impact on most local authorities, and also give the Secretary of State yet further powers for future years to determine the principles on which the allocation of grant to local authorities is made. It is plain for all to see that the Government are attempting to smuggle through major changes to the grant system in a Bill which they are trying to claim is non-controversial, and which indeed the Minister was claiming just now is for the benefit of local authorities. It is also plain from a close reading of the Bill that retrospective legal cover is being sought for previous decisions made by the Secretary of State in respect of the distribution of grant between different kinds of local authority.
Clause 1 seeks to curtail the practice of flowback or grant recycling. That is the process which the Bill seeks to curtail, the practical consequence being that any surplus grant under-claimed will return to the Treasury rather than be redistributed to local authorities. If the present system of grant recycling were to operate in the financial year 1987–88, it has been estimated by the county treasurer of Somerset—and he is the official adviser to the Association of County Councils—that about £400 million would return to local authorities by way of reallocated grant through the flowback system.
This broad figure of £400 million loss of grant in 1987–88 is confirmed by figures produced by the AMA. These show that, if local authorities' expenditure in England globally is 3 per cent. above the DoE's estimates for 1987–88, then £408 million in block grant would be forgone by authorities and would not return to local government via the flowback system. If expenditure rises to 5 per cent. above DoE assumptions, the total of grant forgone rises to £693 million.
Clause 1 as drafted also ends the close-ending of block grant totals. Ministers have stressed that they

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wish to stop close-ending in order to prevent "abuse" of the system, whereby individual local authorities can so arrange their accounts as to maximise their block grant receipts at the expense of other local authorities, which would have to lose grant in order that other authorities claiming and entitled to more could, in fact, receive more. Accordingly, the Bill specifies that the aggregate amount of RSG payable in pursuance of a Supplementary RSG report,
"may accordingly be more or less than any amount previously calculated as the aggregate amount available for it."
This provision enables Ministers to do one of two things: either to make available more cash for block grant if the Treasury approves, and if they make a political judgment that at the time concerned the claims submitted are reasonable; or to make available a lesser figure of block grant than set out in the initial RSG report, as local authorities spend more than DoE assumptions and consequently reduce their block grant entitlements.
It is our view that the new system proposed will have an automatic deflator built into it. This is because, in most years, the Treasury is unlikely to agree further sums to be available from contingency reserves in order to pay for local authorities' expenditure; and it is fair to say that the new system will encourage the DoE to set their expenditure assumptions for local authorities at an unrealistically low level in order to guarantee an overshoot on local authority expenditure, a consequent lower level of aggregate RSG and a consequent windfall gain to the Treasury in undistributed RSG.
We believe that the system now being created by Clause 1 of the Bill re-erects a system of penalties on all local authorities for alleged overspending only shortly after the Government abolished targets and penalties. The year 1986–87 was the first year without targets and penalties. The new system will, we believe, mean a permanent and recurring loss of grant to local authorities in circumstances where many of them are already struggling to meet growing social needs with reduced or static financial resources.
It is clear that the whole of Clause 1 gives the Secretary of State broad discretion on a number of issues. First, he may determine the principles for calculating grant-related poundages for the RSG report and any supplementary report on any basis. Secondly, he may make assumptions on any basis about the total expenditure of local authorities. Thirdly, he does not need to match claims for grant from local authorities with the originally determined total of block grant available; it can be higher or lower. And, fourthly, he may make wholly different assumptions about the position of individual local authorities or descriptions of authorities, which may lead him to mete out less favourable or more favourable treatment to individual authorities or descriptions of authorities by way of grant-related poundage and thereby the grant system as a whole.
The introduction of Clause 1(3) is very significant indeed. In the past, Secretaries of State have had to base their differential treatment of different local authorities on the concept of classes of authorities. This has meant that, in theory and in law, all county councils or metropolitan district councils would have
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to be treated in the same general fashion as far as the calculation of rate support grant is concerned. This Bill allows Ministers to establish different assumptions and hence different outcomes for the purpose of calculating grant-related poundages.
Such a provision is unprecedented and we oppose it, as it gives a general power to discriminate against, or in favour of, any individual local authority without further parliamentary scrutiny. The Bill as drafted also allows Ministers to discriminate in favour of, or against, different descriptions of authorities and allows them to determine what a "description" of authorities should be. No doubt it will be argued that there is a need to create these new descriptions of authorities, in order to meet new circumstances such as the teachers' pay settlement where government wish to direct additional resources to education authorities only. The current response to this argument is, we believe, that government can so direct additional resources to education authorities only by reference to the definition of clauses in the 1980 Act as amended.
If we had been able to amend the Bill. we should have liked to see a clarifying amendment to Clause 1(3) to limit the scope of the subsection to clearly defined and agreed sets of circumstances. Perhaps the Minister will give some reassurance when he replies, because, without such an amendment or deletion of subsection (3) as a whole, the suspicion will remain that the Government are granting themselves new and universal powers to deal more favourably, or less favourably, with groups of local authorities or individ-ual authorities as they please.
There is, however, a second purpose in the existence of Clause 1(3) as drafted: it is further evidence of their desire to "judge-proof" their legislation. As drafted, the subsection gives Ministers what is intended to be perfect cover against legal challenge based on the Wednesbury principles; for, if Ministers under this Bill can treat individual authorities or groups of authorities differently from others of the same class, then it would be unlikely that a challenge based upon Rednesbury could succeed. In short, the Bill gives the Secretary of State discretions which are far too wide and which will be a standing invitation for an unscrupulous and unfair Minister to exploit.
I now turn to Clause 2. The Minister will know that I wrote to him this morning to ask a series of specific questions to which I think the House as a whole is entitled to answers. These questions, relating to the operation of Clause 2, are as follows. What discrimi-nation between authorities of the same class has taken place on an illegal basis since enactment of the Local Government, Planning and Land Act 1980? If such illegal discrimination has occurred, what has been the practical effect of such discrimination? What effect, if any, does Clause 2 as drafted have on the outstanding litigation between the London Borough of Greenwich and the Secretary of State? What Statement is the Minister prepared to make following the Parliamentary Under-Secretary's commitment in Standing Committee on 19th February, at col. 60, in which Mr. Chope stated that he undertook to look at the matter again? We look forward to receiving concrete replies to those important questions.

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This Bill is part of the continuing pantomime of the Government's local government legislation. They are in a mess and they know it. There are some on the Government Front Bench who will be relieved not to have to go through a Committee and Report stage on this particular Bill.
There are still two further local government Bills to come before us this Session. There may be more if the Government invent yet more legislation to keep us busy. We dislike this Bill very much as it is part of the Government's strategy of centralisation and it gives Ministers powers which, on the record before us, we fear will be abused. Unfortunately, as it is a Money Bill we can do no more than express our opposition. But that opposition is strong, as is that of all the local authority associations who also feel that a number of questions remained unanswered when the Bill left another place. The Minister suggested that the local authorities ought to be pleased about the Bill. I can assure him, from communications I have had with all three associations, that they are not.
8.3 p.m.
Baroness Stedman: My Lords, I should like to join with the noble Baroness, Lady David, in her condemnation of this Bill. My background, as many of your Lordships know, is in shire counties. I have felt for many years, not only with this Government but with the preceeding one, that the shire counties got a very raw deal. It seems to me that the only certainty about the proposals in this Bill is that local authorities as a whole are going to receive less in block grant than they do in the system of flowback which we have at the moment. I believe that the total abolition of block grant recycling and the other technicalities in the Bill can only produce a new kind of mechanism which will restrain local authorities' spending, which is every bit as unfair and severe, particularly on the shire counties, as the discredited system of targets and penalties which we abolished in 1986–87.
The Association of County Councils is extremely concerned about the effects of this Bill. It feels that there are quite a few things which have been left unanswered. I hope that the Minister may be able to give us some reassurances tonight. It is concerned that the Bill as it stands does not give a future Secretary of State any discretion to reintroduce a system of flowback unless we have yet more primary legislation, and that there are no provisions in the Bill for the Secretary of State even to consult with the local authority associations on any aspect of his policy. I thought we were trying to work with local authorities and not against them. The Association of County Councils also fears that there is a potential in the proposed change for it to be used for a much wider purpose than the explicit intention behind this Bill, which is to deal with the rate-capped authorities. To put it simply, they are very suspicious of what is going on; and who can blame them after the plethora of Bills we have had affecting them.
8.6 p.m.
Lord Skelmersdale: My Lords, if I were a stranger from Mars listening to the noble Baronesses I should immediately say, "poor local authorities". However, I
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do not believe that it is a case of poor local authorities at all. I must congratulate the noble Baroness, Lady David, for her stamina. After a long and mentally exercising day—I do not know whether she found it mentally exercising, but I assure the House that I certainly did—she spent the first two and a half minutes of her eighteen-minute speech on pieces of legislation which had absolutely nothing to do with the Bill. Was it 42 or 43? Who is counting, except the noble Baroness and her right honourable friend in another place? I gave up counting months ago. It is just as well, because I cannot count, and as the noble Baroness has said, we are going to have at least two more local government Bills this Session.
Lord Graham of Edmonton: At least two!
Lord Skelmersdale: Exactly. Nonetheless, my Lords, we have had plenty of opportunity today to consider the intricacies of local government finance. The Bill which we are now considering is meant to he short and is essentially confined to a single purpose: the abolition of grant recycling. I am reminded that on a previous occasion—I do not have the reference, but no doubt the noble Baroness, Lady Stedman, will remember it—the noble Baroness said that grant recycling was a bad form of changing around grant and that it was invidious to local authorities. Does the noble Baroness remember that? I shall send her the reference.
Baroness Stedman: My Lords, I do not. However, after 43 Bills no one can remember what was said on any one of them.
Lord Skelmersdale: My Lords, I must admit that I too have a selective memory. However, on this occasion I believe that my memory is correct.
Baroness David: My Lords, I think that it was the previous Secretary of State, Mr. Kenneth Baker, who praised grant recycling highly about a year ago.
Lord Skelmersdale: My Lords, it was my right honourable friend the current Secretary of State for Education who changed his view and who introduced the idea of the abandonment of clawback. However, the spending plans of the Government this year are realistic because they provide for a substantial increase in authority current expenditure—£3 billion more at £251 billion. The settlement provides for most local authorities—except, as I admit, those which are rate and precept limited—to increase their current spending by 51/2 per cent. This is well above the expected rate of inflation of 31 per cent. I am advised that if authorities spend at inflation in the current year, they would get at least 150 million more grant from the Exchequer than the firm intentions Statement provides.
The noble Baroness, Lady David, almost accused me of a con, I think, on behalf of the Government.
Lord Graham of Edmonton: I think that is right!
Lord Skelmersdale: My Lords, I am glad that her noble friend agrees with my analysis of what the noble Baroness said. This Bill in no way attempts to smuggle

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in major changes. My right honourable friend announced last July that he proposed to abolish grant recycling and consulted the local authorities and their associations on his proposals. The principle of the abolition of grant recycling has been welcomed by many authorities. I do not call that smuggling.
I was asked whether Clause 1(3) enables my right honourable friend to discriminate against particular authorities. That is a fear of which I have heard before. I have to say that it is quite groundless. Clause 1(3) enables different expenditure assumptions to be made for different authorities or descriptions of authorities, primarily in order to allow for the fact that it seems sensible to assume that rate-limited authorities will spend at expenditure levels and not at the levels we have assumed for all other authorities. It also enables new assumptions to be made for certain authorities in exceptional cases; for example, for education authorities in order to channel for them the extra grant which the Government have indicated will be made available to them to fund the teachers' pay settlement.
Those assumptions feed into the figure which is used to set the national grant-related poundage for spending at grant-related expenditure. That is a very technical concept. What it means is that by making different assumptions for certain authorities, grant entitlements may be affected on a national basis. However, there would be no differential effect on those particular authorities. If for some reason we were to make a wildly different spending assumption for one authority, that could alter the national grant-related poundage, but the effect on that authority would be minimal and would be the same for all authorities. It would not therefore be possible by this method to discriminate against particular authorities' grant entitlements. Clause 1(3) is an entirely innocuous provision.
I am grateful to the noble Baroness, Lady David, who, for a change, turned the tables on me and sent me a missive. She said in it that she would ask various questions about Clause 2 of the Bill. I am pleased to be able to reassure her that this provision has no validatory purpose and no practical effect whatsoever in terms of past actions. The relevant powers in the Local Government, Planning and Land Act 1980 have never been used in a way which differentiates or discriminates between the different classes of authority set up by Section 59 of that Act. The retrospective element of Clause 2 of this Bill simply ensures that the same interpretation of the words in question applies for all years and not just from 1987 onwards, and is included simply for the sake of legislative tidiness and consistency.
Clause 2 has no effect whatsoever on the matter which is currently the subject of litigation between the London Borough of Greenwich and my right honourable friend the Secretary of State. My honourable friend the Parliamentary Under-Secretary of State gave a detailed explanation of the effect of Clause 2 during Committee stage in another place. I accept straight away that this was before my right honourable friend had decided to appeal on the Greenwich case. My honourable friend the Minister of
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State subsequently wrote to the Opposition spokesman, Mr. Fraser, on 26th February, reassuring him that the fears which had been expressed about Clause 2 were entirely groundless. These assurances were repeated during the Third Reading debate in another place when my honourable friend the Parliamentary Under-Secretary of State said:
"Clause 2 is not intended to have any retrospective effect in the sense of validating any past decisions or actions".
I am pleased to repeat that assurance here today and to tell the House that there are no sinister, ulterior motives behind this provision.
Responsible local authorities pursuing sensible spending policies need have nothing to fear from this Bill, but I admit that it screws the screw tighter on the irresponsible ones. The responsible ones will benefit from the increased certainty which it brings. In future it will be clear to all authorities at settlement what their grants will be for any given level of spending. They will be able to make their budgets on this new and more certain basis quite independent of what other authorities are doing. Authorities determined to push spending upwards will know exactly what the grant consequences will be for them and their ratepayers. They will have a choice—just as they have at present—but this Bill will make the consequences of that choice crystal clear. I commend the Bill to the House.
Baroness Stedman: My Lords, before the noble Lord sits down, will he tell us what form of consultation there will be with local authority associations? At the moment, when the Minister is making his decisions about rate support grant and block grant some consultations go on with the consultative body. Will that continue or will the Minister make the decision arbitrarily without hearing what the associations think?
Lord Skelmersdale: My Lords, what I said was that the consultations had taken place before the drafting of the Bill and that they had continued practically up to the last moment. As to whether consultations will go on in the future, consultations about the rate support grant settlement will continue into the future because this is one of the bases of the 1980 legislation. Consultation with the local authority associations is a necessary and desirable part of the process leading up to the making of any rate support grant report or supplementary report. Provision requiring such consultation is already present in the main legislation, in Section 60(5) and Section 61(2) of the Local Government, Planning and Land Act 1980, of which noble Lords opposite have so much disapproved in their miscellaneous speeches today. No further specific provision is therefore necessary in this Bill. I hope that that answers the noble Baroness's question.
On Question, Bill read a second time; Committee negatived.
Then, Standing Order No.44 having been dispensed with (pursuant to Resolution of 9th March), Bill read a third time and passed.

Public Order (Northern Ireland) Order 1987
8.15 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lye11): My Lords, I beg to move that the draft order laid before the House on 19th February be approved.
Before I speak about the draft order, I should like to say a few words about how much I regret, as I am sure all noble Lords do, the absence of my noble friend the late Lord Brookeborough, who died so tragically last week. I am sure that he would have made an invaluable contribution to this debate, just as he has over the years so assiduously attended your Lordships' House to argue the Unionist cause with open-mindedness and above all awareness of the need for reconciliation. I shall miss the keen interest he took in agricultural matters and the welcome that he always gave to me, my predecessors and to everybody else who came to that lovely corner of the Province, County Fermanagh. I am sure your Lordships will agree that with his long service to his country, both at home and abroad, his great personal courage (I think your Lordships will permit me to say, often on horseback) and not least his humour and humanity, he will be greatly missed.
You Lordships will recall the debates in this House on the Public Order Act 1986 and will recognise that many of the issues discussed then will arise during our consideration of this draft order. Indeed, I hope to show your Lordships that the principles underlying the draft order are the same as those which guided the Government in drawing up the Public Order Act. The draft order differs in detail from the provisions of the Public Order Act in consequence of the different requirements of the Province in this field.
The public order situation in Northern Ireland is very different from the position in the rest of the United Kingdom, and public order legislation in Northern Ireland thus requires a slightly different emphasis. The net result is a body of draft legislation which fully reflects the principles underlying public order law throughout the United Kingdom but which also takes full account of local needs.
The public order legislation which currently applies in Northern Ireland was last amended in 1971—the 1981 order was pure consolidation—and developments in Northern Ireland since then suggested to the Government that some changes were required. A number of recommendations to this effect were made by the Chief Constable of the Royal Ulster Constabulary.
I should like to make one other general point before turning to the detailed provisions of the draft order. The draft order is not, as some people have portrayed it, a bundle of new and repressive measures which vastly extend the powers of the police and of my right honourable friend the Secretary of State to prevent the normal expression of political, industrial or cultural views. The order is intended to operate for the benefit of the whole community and does not interfere in any way with those who are intent on demonstrating or expressing their views on any subject in a peaceful manner and within common sense bounds that every reasonable person would accept as being appropriate.
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As for claims that the draft order will extend the powers of the authorities, I should like to draw your Lordships' attention to the fact that it confers no new powers on the police, though it puts their existing power under common law to impose conditions on open air public meetings on to a statutory basis and it redefines the grounds on which certain of their powers may be exercised. The only new power conferred on the Secretary of State is the power to exempt specified classes of procession from the notification require-ments of Article 3.
The draft order has four main elements. First, it amends and updates the law on the control of public processions and open-air public meetings. Secondly, it updates the law on the prevention of incitement to hatred and brings it into line with the equivalent Great Britain legislation. Thirdly, it consolidates and makes minor amendments to miscellaneous existing public order legislation. Finally, it provides for the repeal of the Flags and Emblems (Display) Act (Northern Ireland) 1954.
The provisions concerning public processions and open-air public meetings are contained in Part 11 of the draft order. This part of the draft order requires organisers of public processions to give seven days' notice to the police, rather than the five days required under the 1981 Order. This requirement for advance notice applies to all public processions except funerals, but there is provision for the Secretary of State to exempt, by order, other classes or descriptions of procession. This particular provision could he applied,—to take one example—to the regular Salvation Army processions which obviously pose no risk of public disorder.
I should like to refer at this point to one aspect of the draft order which differs from the Public Order Act, and which has attracted some criticism and indeed has been misrepresented. The draft order does not exempt from the requirement to give notice processions which are customarily held in a particular area or along a particular route. As your Lordships will be aware, in the divided society of Northern Ireland, traditional parades unfortunately all too often become the focus of disorder—not necessarily because that is the intention of the organisers. The requirement for notification is essential in order that the police shall have adequate information about the intention of the organisers to enable them to plan the policing of the event, and have the opportunity to discuss matters with the organisers.
During the consultation process a number of bodies expressed concern that there was no provision for spontaneous processions, such as might well occur when a sports team returns home from a notable victory. We hear about the great boxer Barry McGuigan and even of Denis Taylor returning to Ireland. Those are unique occasions which give rise to great joy and where there is probably not a great risk of disorder. The draft order now makes provision for such occasions.
The grounds on which a senior police officer may impose conditions on a procession have been brought into line with those which apply in England and Wales and the common law powers to impose conditions on an open-air public meeting are put on a statutory basis and made subject to the same grounds.

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The power of the Secretary of State to prohibit processions and meetings is unaltered, except that the grounds on which it is exercisable are rephrased to reflect the wording of the Public Order Act and of the police power to impose conditions on public processions.
The remaining provisions of Part II of the order empower the Secretary of State to make an order requiring the registration of bands, and to provide for offences concerning attempts to disrupt lawful public processions or open-air meetings. These provisions are mainly a consolidation of existing provisions in the 1981 order. I should explain to your Lordships that the power to require the registration of bands has never yet been exercised and there is no present intention to do so. Certain bands have caused a great deal of offence and disturbance but I am pleased to be able to report to your Lordships that the organisers of many of the major parades in Northern Ireland have very responsibly taken steps to ensure that bands attending their parades behave in an appropriate and decorous manner.
Part III of the draft order contains provisions against the stirring up of hatred or arousing of fear. These provisions follow closely the equivalent provisions of the Public Order Act. The significant difference is that the draft order concerns both racial and religious hatred, for reasons which in the Northern Ireland context will be perfectly obvious to your Lordships. The provisions are intended to make the law against incitement to hatred more effective. Under the 1981 order it is necessary for the prosecution to prove an intent to stir up hatred; the new provisions make it an offence to use threatening, abusive or insulting words or behaviour with that intent, or if, having regard to all the circumstances, hatred is likely—I emphasise that—to be stirred up. Your Lordships will find that reiterated time and time again in the Articles in Part III. The new provisions also extend the offences concerning inflammatory material to cover the media, such as film or video recordings.
Some concern has been expressed, by the National Union of Journalists among others, that these provisions may interfere with the normal activities of the press in reporting events in Northern Ireland. I do want to assure your Lordships that this is not the intention, nor is it the effect, of the new provisions. During the consideration of the Public Order Bill in another place, it was my right honourable friend the Secretary of State who on 20th March 1986 pointed out that the British Guild of Newspaper Proprietors had expressed similar fears about the equivalent provisions of that Bill. As a result the Bill was amended at Report stage to include the words "having regard to all the circumstances". This provision enables the prosecuting authorities and the courts to distinguish between legitimate reporting and comment on the one hand and inflammatory material on the other, and the same wording has been incorporated in Articles 9, 10, 11, 12 and 13 of the draft order.
I will take your Lordships to Part IV of the draft order, which consolidates and rationalises various public order offences which at present appear in the 198 I order and in the Criminal Justice (Miscellaneous Provisions) Act (Northern Ireland) 1969.
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Part V of the order before us this evening makes provision for arrest without warrant for certain offences under the Order. It requires the consent of the Attorney General for prosecution in respect of offences under the incitement to hatred provisions or for the wearing of political uniforms, and it provides for a court to order the forfeiture of articles connected with various offences.
Finally, the draft order repeals the Flags and Emblems (Display) Act (NI) 1954. This is a measure which has been widely misunderstood and misrepresented. The repeal of the Act will not affect the fact that the Union Flag is the official flag of the United Kingdom and it will continue to be the flag which is flown from public buildings in Northern Ireland on public occasions. There is no question of the Irish Tricolour being given any status by the repeal. It will no longer be an offence in itself to interfere with the display of a Union Flag on private property, but any such interference would involve the commission of other criminal or civil offences—for example, criminal damage. The peaceful display of the Union Flag, or any other flag, will continue to be protected. The police will also retain their general duty under common law to take whatever steps are necessary to prevent a breach of the peace arising from the provocative display of any flag or emblem.
Legislation in the public order field is always a sensitive and often a controversial matter. It has to strike a careful balance between preserving the rights of individuals—for example, to demonstrate their views—and giving the police the miminum powers necessary to enable them to protect the whole community from the effects of public disorder.
In the Northern Ireland context that balance is perhaps even more difficult to strike than elsewhere because, in the circumstances of a divided community, public disorder only too frequently gives rise to intercommunal tension and may even be exploited by terrorist organistions. I hope your Lordships will agree that this draft order strikes that difficult balance. With that, I commend this order to your Lordships' House and I beg to move.
Moved, That the draft order laid before the House on 19th February be approved.—(Lord Lyell.)
8.30 p.m.
Lord Prys-Davies: My Lords, we on these Benches wish to be associated with the tribute paid by the noble Lord, Lord Lyell, to the memory of the late Lord Brookeborough. Although he was opposed to the central thrust of the Government's policy towards his beloved Ulster, he continued to come to your Lordships' House until he was laid low with sickness. Here he continued to represent the interests of the people of Ulster according to his light.
We are grateful to the noble Lord for taking us through the provisions of this important order. We have been told that it brings the law of public order in Northern Ireland more closely into line with the principles of public order law in England and Wales as that law has emerged in the Public Order Act 1986. However, there is an immense gap between the Public Order Act 1986 and this order.

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The order preserves many of the distinctive features of public order law in Northern Ireland, much of which is founded on the Northern Ireland legislation which was passed in 1981 and to which we have been referred by the Minister, and indeed on even earlier legislation. In the result, the criminal law which will apply in Northern Ireland in this area of the law will continue in some respects to be tougher and more extensive than that obtaining in England and Wales. To this the Minister replies that the divided Province has more than its share of upheaval and public disorder, but I am not entirely sure that that is a conclusive reply.
The proposal for this order was published on 1st December and comments had to be received by 16th January so that the timetable of the consultation —bearing in mind also that Christmas Day, Boxing Day and New Year's Day fell within the period—was exceedingly short for so important a subject. I acknowledge that there have been important amendments to the order as originally proposed; nevertheless, the order before the House is rushed legislation, and that in an area which requires this fine balancing exercise between the freedom to protest and the requirements of public order which the noble Lord, Lord Lyell, has himself acknowledged to be necessary.
The House will recall that the Public Order Act 1986 was based to some extent on the report of the Law Commission, but this order cannot be presented as the result of any articulated research and evaluation of the effects of existing public order legislation in Northern Ireland. It is rushed legislation.
It is to be regretted that the press release which accompanied the proposed order on 1st December failed to indicate in what way public order law in Northern Ireland, after the passing of the proposed order, would be different from that obtaining in England and Wales. It seems to me that a short comparative table would have been very helpful to enable us to grasp the significance of the order and the major discrepancies between the English and Welsh legislation and the proposed order.
If I followed the noble Lord correctly, he referred to discrepancies of detail but I believe they are more than that. There are discrepancies of some significance. We have not seen a summary of the comments of the organisations and individuals which were received by the Northern Ireland Office, but we know from press reports that some of the articles have been criticised, sometimes fiercely, on the grounds that they encroach too severely on civil rights and are an attack on basic democratic rights. If that criticism is correct and if it is sound, the order could be counter productive. We hope that the Government have taken that into account.
It has also been argued with a great deal of force—and this has been reflected in an Early-Day Motion put down in the other place—that this kind of legislation should have been in the form of a Bill, capable of being scrutinised and amended, rather than in the form of this unamendable order.
I turn to the order. As the Minister explained, it has four main features; Part II, which controls public processions and open air meetings; Part III, which
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relates to stirring up hatred or arousing fear; Part IV, which relates to miscellaneous public order offences; and, finally, Part V, which includes the repeal of the Flags and Emblems (Display) Act (Northern Ireland) 1954. I should like to make a few brief comments on those four parts of the order.
I appreciate that some of my colleagues on these Benches and others will disagree with me, but I believe that the Government were right to impose a compulsory duty to give prior written notice to the police of the intention to hold a procession so that they can assess the scope for disorder. However, I note and I welcome the amendment which has been made to the proposed order which provides for the seven-day notice to be waived where the giving of such notice is not reasonably practicable. That amendment should go some way towards safeguarding the position of those who are engaged in a spontaneous or impromptu march. However, I suggest that it is still in the interests of such people that they should give notice wherever possible, even though it may not be a seven-day notice.
We are also pleased that the Secretary of State has been given power to exempt class processions from the need to give a seven-day notice. However, why are the classes of processions which are to be exempted not specified in the order?
I should like to refer to one or two discrepancies between this part of the order and the Public Order Act 1986. Unlike the position under that Act, anyone who takes part in a procession in respect of which a due notice has not been given, and although he had played no part in organising the procession, could be guilty of an offence. There is another worry. Unlike an offender against the relevant provisions in the Public Order Act 1986 who can only be fined for committing an offence, an offender in Northern Ireland against this article in this order can be sent to prison for a term not exceeding six months and can also be fined
There must be many people in Northern Ireland, even though it is a divided community, who are unconvinced that a person who takes part in a march in Northern Ireland should be caught by an offence which would not apply to him if he took part in a similar procession in England or Wales. They will be unconvinced that he should be subjected to imprisonment when he would not be so subjected for identical behaviour in England or Wales.
In the context of criminal law, how can conduct be criminal in one part of the United Kingdom and not criminal in the remainder of the country? I am sure that it is simply not good enough for the Government to say to the people of Northern Ireland, "We are merely following the 1981 precedent". It occurs to me that the Government may have been too ready to fall hack on the 1981 Order in order to justify some other concept in this Order such as that of the open air public meeting. That is quite an interesting commentary, because the prospects for peace and order in Northern Ireland seem as bleak today as they were in 1981. That suggests that the 1981 Order, upon which the Government place such reliance, has not been all that effective. I very much doubt whether it should have been imported into the new order.
It is reported in the press that the leader of the Democratic Unionist Party claims that he has been

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informed that this part of the order will not be applied to nationalists but only to those who oppose the Anglo-Irish Agreement. The Minister has already replied to that statement by the leader of the Democratic Unionist Party in saying that this order was for the benefit of the whole community. I invite him to say again that in so claiming the leader of the Democratic Unionist Party has no basis for his statement and that his claim is groundless.
Will the Minister also confirm another point? The National Council for Civil Liberties believes that the articles relating to the banning of processions and open air meetings are contrary to Article 11 of the European Convention on Human Rights. The department has considered that allegation by the NCCL and has rejected it, but I understand that the NCCL is repeating the charge. I hope that the Minister can confirm that the department's senior lawyers are satisfied that nothing contained in this order is contrary to the provisions of Article 11 of the convention.
I think it is clear that we have serious misgivings about the implications of some of the provisions relating to the control of processions and open air meetings. Indeed, I should have mentioned that the provisions relating to open air meetings are far-reaching and much more so than the provisions that apply in England and Wales, because they give to the police the power to prohibit an open air assembly. We are in something of a dilemma because we have been told that the provisions are likely to help the police in maintaining public order in the Province. In the judgment of the leaders of the SDLP the provisions will do just that. Some of us therefore find ourselves in a dilemma. I accept the judgment of the leaders of the SDLP, who, after all, live in the Province day by day.
We have no reservations about Part III, which strengthens the legislation against incitement to hatred. It seems to me that no reasonable person can object to this development because it is only too painfully obvious that this reform is not only necessary but urgent. For far too long agitators whose speeches have been stirring up hatred have escaped prosecution because it could not be proved that there was an intent to stir up hatred. When this order becomes law, as the Minister explained, the offence will be committed without proof of intent. This should give it much greater impact. However, time alone will tell whether Part III will be effective.
From these Benches we urge the Attorney-General not to hesitate to give his consent to bringing proceedings under this part of the order when they are justified on the evidence that is available to him and where witnesses are prepared to give evidence. Meanwhile, this part of the order will bring much satisfaction to the noble Lord, Lord Dunleath, who in January 1986 introduced a Bill which was given a Second Reading in your Lordships' House and which I believe would have achieved the same result.
Finally, I come to Article 27 which repeals the Flags and Emblems (Display) Act (Northern Ireland) 1954. Again, we welcome this article. For the Catholics of Northern Ireland the 1954 Act has been a source of grievance, so its repeal is a desirable development
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which will bring reassurance to the Catholic community. However, we want to be assured that the Government have fully taken into account the likely Unionist reaction. The Minister has been at pains to argue that the repeal of the Flags and Emblems (Display) Act in practice will not mean any fundamental change in the law. His analysis of the theoretical state of the law is faultless, I am sure, but I am not so sure that the Unionists will be impressed by that analysis. A flag is more than a piece of cloth. It is a centuries old symbol of tribal loyalties, and the Unionists will see the repeal of this Act as being of major importance. We believe that it is of major importance and we hope that the Government have not underestimated the likely reaction and that our worries are groundless.
To sum up, we have serious reservations about some of the provisions of this order. The provisions about which we are worried primarily are the articles which control processions and assemblies. On the other hand, we very much welcome the strengthening of the law against incitement to hatred. We welcome the repeal of the Flags and Emblems (Display) Act 1954. But we hope that this measure will not be counter-productive and that the reactions of the Unionist leaders will be somewhat more reflective than their speeches over the past few weeks have suggested.
8.45 p.m.
Lord Hampton: My Lords, I too must start by paying tribute from these Benches to the late Lord Brookeborough. I did not by any means always agree with the views that he expressed, but I always realised that as one living in Northern Ireland he was in touch with events and people there in a way with which I could not compete. The Times referred to his earthy humour and I found him always friendly and encouraging. He seemed so vital and active that his death at so early an age comes as a particular shock. We shall miss him in our debates and we join in extending our deep sympathy to his widow and family. My noble friend Lord Donaldson particularly wishes to be associated with what I have said about someone who was, for him, a personal friend.
I am grateful to the Minister for introducing this order. There may be some disagreement about it but I do not think that there is anybody in your Lordships' House tonight who thinks other than that this is a sincere attempt by the Government to tackle the difficult problem of maintaining order in the Province, sometimes in very tense circumstances. However, we need to maintain a sense of proportion. I believe that there were over 2,000 marches and parades in Northern Ireland last year and in only seven of them was there any real trouble. Perhaps the Minister can confirm that I have the figures right, because if they are correct they emphasise that the position is less critical than mainlanders often suppose.
We are very conscious of the need to reconcile two freedoms: first, the freedom to be able to walk our streets in peace and to enjoy our homes in quietness; secondly. the freedom, for members of the public individually and in groups, from arbitrariness and injustice, whether imposed by the Government, the police, local authorities or any other form of authority. That is the problem.

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The Alliance parties of Great Britain have expressed the desire to avoid differences in the law between Northern Ireland and Great Britain, arguing that if exceptional powers are necessary they should be temporary and under the widest review possible. We are forced to accept that exceptional powers are in many ways still necessary. But I am glad that, for example, the Emergency Provisions Act is under review.
I should be grateful for some further confirmation—if the Minister can give it without having to do so at great length—on the following. First, what are the main differences as planned on matters that we are discussing between the law in Great Britain and that for Northern Ireland? Secondly, have the Government given thought to what might happen in a general election if a Sinn Fein candidate stands?
The main provisions of these amended orders are as follows. Article 3 stipulates the notice that must be given before processions can be held. That is seven days or as soon as is reasonably practicable. The latter words were added in line with our suggestions. Article 4(1)(a) allows for conditions to be placed on the holding of public processions or open-air meetings if they will lead to disorder or serious damage to property or serious disruption to the life of the community. Article 4(1)(b) deals with the intimidation of other people or stopping them from doing something that they have a right to do. We argued that these provisions are too general. Serious disruption or coercion of individuals are new provisions and are unnecessary. The existing definition of serious disorder is adequate. They arc so general as to allow for conditions to be placed on virtually any march.
Article 5 allows for the prohibition of a march if it will cause disorder or disruption or make undue demands on the security forces. Again, the provision about undue demands on security forces allows them a great deal of discretion. Articles 6 and 7 make it an offence to try to break up a march or meeting. Articles 8 to 17, 1 understand—and the noble Lord, Lord Lyell, mentioned this—bring the law on the prevention of incitement to hatred into line with British law, and we welcome that.
Articles 18 to 26 consolidate miscellaneous public order provisions relating to disorderly behaviour, provocative conduct, wearing uniforms, carrying offensive weapons, and so on.
We then come to Article 27. Both the noble Lord, Lord Lyell, the Minister, and the noble Lord, Lord Prys-Davies, have mentioned the repeal of the Rags and Emblems (Display) Act (Northern Ireland) passed by Stormont in 1954. The Act has two provisions. Section 1 makes it an offence to interfere with the display of a union flag on private land; and this we believe is unnecessary. Provisions for offences such as criminal damage and conduct likely to cause a breach of the peace are perfectly adequate. Section 2 empowers a police officer to require the removal of an emblem other than a union flag if he believes that its display is likely to cause a breach of the peace. This, again, is unnecessary as there are other public order powers allowing police officers to remove such emblems.
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The Act does not make it illegal to fly the tricolour but it is widely held to be offensive to a large number of people. The Standing Advisory Committee on Human Rights called for the repeal of the Act in its annual report for 1974–75. This perhaps indicates how far from seriously its views are taken. It recently called for three-judge Diplock courts. We wonder whether it will take seven years for these to be introduced as well. With those few comments, in the main we support this order.
Lord Fitt: My Lords, the noble Lord, Lord Lyell, in introducing this order, at the very outset of his remarks made one of the truest statements in relation to the order, to the effect that public order in Northern Ireland is very different from that in other parts of the United Kingdom. Indeed, it is very rarely if ever that a demonstration in England, Scotland or Wales is related to the constitutional position of this country, whereas the vast majority of demonstrations which take place in Northern Ireland are totally related to the constitutional position of Northern Ireland, whether it be on the Unionist side or the Nationalist side.
However, to demonstrate the difficulty, if one looks at the articles in this order, in the atmosphere which prevails in this House, in this country, it would seem eminently reasonable that the Government should introduce legislation to take into account what may happen in the field of public order in a part of the United Kingdom. But what are the realities of it? The reality is that there will be no vote in this House this evening. The reality is that in another place, at the other end of this building, there will be a vote. Of the 16 representatives who are there—the Sinn Fein representative for Belfast, West will not be in attendance—14 will vote against and I predict that the two SDLP representatives, if they are there, will vote for this order or abstain.
Let us recall the civil rights demonstrations which are taken into account in Part IV of this order. In 1968 the civil rights movement began to demonstrate on the streets of Northern Ireland. It led to a very serious backlash from the Unionist population. In 1969, when the then Captain O'Neill—now the noble Lord, Lord O'Neill—called his last election in Northern Ireland the first piece of major legislation that came into the House was a public order Bill. The Nationalist community saw that public order Bill as being directed against them and against the civil rights movement and demonstrations. There were serious disturbances in the old Northern Ireland Parliament in Stormont. The police had to be called to carry out the personnel involved—this was a year before the SDLP was formed—who later went on to constitute the SDLP. They were elected in the February election of 1979. They saw the provisions of that order as being directed at them and at the ideals for which they stood. Every Unionist in the House of Commons at Stormont supported the public order Bill, and it was rejected by the Opposition.
We now seem to have come full circle. We do not have to like the Unionist representatives or the various shades of Unionism in Northern Ireland. But we have to accept that they are the representatives of their constituencies. Indeed, they have had an election since we had an election in the United Kingdom. They had

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an election in 1986. Their representation was consolidated. They were returned to Parliament with the exception of one seat. They can say in relation to this legislation that they have had a fresher mandate than any other Member sitting in the House of Commons. They were elected in January last year. We are sitting here in the House of Lords, and in another place the same atmosphere will prevail. It will appear in Northern Ireland that we are laying down the law about public order while every representative of the majority community totally rejects it. That is the reality of this type of legislation.
My noble friend Lord Hampton has already referred to the fact that there were over 2,000 marches in Northern Ireland last year—that is the average: between 2,000 and 2,500 marches. There is no other part of the United Kingdom—region or city—which has that number of marches. Indeed, I cannot think of any other country or region in the world which has over 2,000 marches per annum.
One must then ask why do the Northern Irish have to have so many marches? Are they health fanatics? Or, do they like walking in the street? Or, do they like their relatives to see them marching? It is much more dangerous than that. People march in Northern Ireland because of politics; and they wave flags because of politics. When people march in Northern Ireland they are either imposing their tribalism on the other tribe, or the other tribe is marching in defiance of some legislation which they did not like—such as the civil rights movement in Northern Ireland.
Marching in Northern Ireland is a serious business and it has to be treated with a great deal of sensitivity by whoever is to carry out the workings of this particu-lar order. But, 14 public representatives, elected representatives, are coming to the House of Commons tonight to go into the Lobbies to vote against this order. They will not speak because they are boycotting the Chamber itself. But, they claim—and who are we to deny it?—that they are acting with the full authority of their constituents.
I would hope that the SDLP would maintain some form of credibility. If before 1969 they were so opposed to public order, does it not show that it is totally tribal if they go into the Lobbies tonight to support this order? If the order pleases the SDLP, it will not please the Unionists. If it pleases the Unionists, it will not please the majority community.
As has already been said by my noble friend Lord Prys-Davies in 1981 there was a public order act. The provisions of that act have not stopped demonstra-tions nor brought peace any nearer to us in Northern Ireland.
Another very important fact was mentioned by the noble Lord, Lord Hampton. What happens in the forthcoming elections—if there are to be elections this year? Mention has been made of the Irish tricolour and I remember sitting in Stormont listening to the debates which precluded that act going on the statute book. I remember the great passions that were clearly evident in the old Stormont Parliament. The Unionist population in Northern Ireland at that time saw the tricolour of the Irish Republic as being an offensive foreign emblem. Again, every nationalist in Stormont
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voted against that legislation. Every Unionist supported it. During the existence of that legislation the Unionists used it to their own advantage.
The Minister said tonight that it will not make any change in the law—that it will not really cause any change to be made since 1964. Why was it there, and why has it been allowed to remain on the statute book since 1945? Why was it not taken off the statute book when it was so offensive to the nationalist population in 1972, when this House assumed direct responsibility for Northern Ireland? If it is offensive now in 1987, it was offensive in 1972 and in 1954 when it was first promulgated.
So we have the hypothetical situation where there may be an election this year. The Irish tricolour is regarded by nationalists, and particularly by Sinn Fein, as their emblem. It is regarded by them as their flag and the emblem which shows that their aspiration is to a united Ireland. If one can recall the very onset of the present troubles in Northern Ireland began in the general election of 1964 when the Sinn Fein candidate Liam McMillan had his headquarters in Divis Street and had a tricolour (the political emblem) in the shop window of his election headquarters. The then Mr. Paisley (the now Member for North Antrim) took offence at that flag when someone told him it was there. It was in the heart of the Nationalist area. It was not provocative and it was not being waved or shown to the Unionist population at large. It was in the Catholic area in Divis Street. But, the then Mr. Paisley created a great furore and told the then Minister of Home Affairs in the Stormont Parliament that if that flag was not taken out of the window he would lead 10,000 men into that Catholic ghetto and take it down himself.
The then Minister of Home Affairs, Mr. W. W. B. McConnell, took fright at these threats and instructed the police to go to the Divis Street election headquarters to get the flag. I was standing outside those headquarters that night because I was acting as agent for another candidate in the elections. The police came down in their full armoury and riot gear. They wrecked the windows, broke into the shop and took the tricolour away. That led to a week of rioting in Divis Street, and for the first time in my life I then saw the rioting which we have seen so many times since. The rioting lasted for a week—the police versus the Catholic population of the Falls Road. This situation was occasioned by the flying of a flag in a shop in the Falls Road area—Divis Street.
If there is to be an election this year, Sinn Fein may put up candidates in areas which are highly volatile and hostile because mid-Ulster has its pockets of Unionism, as have Fermanagh, North Antrim and various areas in South Down. Sinn Fein will put forward candidates, even though they may be only token candidates, because Sinn Fein know that they cannot win. I am very glad to see the very unsuccessful attempt to better their wares in the republic in the recent election there.
However, they will put forward candidates. They will say that the identification emblem of our candidate is the tricolour. They will try to traverse the constituency to tell their election story to the various people who may be prepared to listen in that constituency. When going along the road with their tricolours

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I have absolutely no doubt that they will be met with a great deal of opposition. Then they will say, "The Minister said in the House of Lords and they said in the Commons that the tricolour was unaffected by this recent repeal and if it is our election emblem it should be afforded the same kind of honour"—for want of a better word—"as is given to the Union Jack". It is their election material.
Does anyone who knows Northern Ireland really believe that the provisions of this order will be able to contain such a situation? I am glad to see the provisions in relation to the incitement to hatred legislation, because in 1969 and 1970 I used whatever influence I had to have that legislation put on the statute book in Stormont. However, we have seen in all the years that have elapsed since then that it was all to no avail. It was difficult to prove whether a person was intentionally inciting someone to fear or hatred. The same will happen in respect of this legislation. Well intentioned as it may be, it will be difficult to prove that someone intentionally set out to cause fear or to create hatred.
There are some things that it is just not possible to prove. All the parliamentary draftsmen that ever existed may find the right formula of words but it is so difficult to find the reality that exists behind those words. I could talk for another two hours on this matter. Noble Lords should not provoke me in case I do so. I know exactly what I am talking about. The Government Whip from Somerset says that I have taken 15 minutes.
The legislation has to take into account all the passions of centuries, all the passions that have been created by events which generated from and began in this country. Let us just look at the situation. We are now coming to 1988, 1989 and 1990. Indeed 1988 is the tercentenary of William of Orange taking over the throne in Great Britain. That is where the alleged glorious revolution and bloodless revolution came from. That is where the Orange Order came from. That is where 2,000 of these marches come from. They all began in 1688, and, whereas it may have been the glorious and bloodless revolution over here, it was not over there. All the blood that was spilt was spilt in Ireland.
In 1689 we had the seige of Derry. There will be thousands of Orangemen marching to Derry in 1989, which will be the tercentenary commemorating the 300 years since the Apprentice Boys closed the gates.
Then we come to 1990, which will commemorate the 300 years that have passed since the Battle of the Boyne, in which the Protestants beat the Catholics in Ireland. Are we to contain all those marches and all those passions with this public order legislation?
I agree with my noble friend Lord Blease that the Hiberneans march. How many marches do they have a year? I think that it is about half a dozen, but nobody takes them very seriously. I did not take them seriously when I was living in Northern Ireland. Of over 2,000 marches, 95 per cent. emanate from the Northern Ireland community. This is an order which in this rarified atmosphere seems eminently reasonable. However, we are concerned about how it will be received in Northern Ireland. The Unionist population perceive—that is an English word—this
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order to be directed at them, just as we perceived the 1969 public order legislation in Northern Ireland to be directed at us.
There are the tribal loyalties, the tribal conflicts and the tribal divisions. All I say to the Minister is that whoever will be in charge of operating the tenets of this order will have to do so with the utmost sensitivity in the very dangerous situation which exists in Northern Ireland this year and which will exist in the years that lie ahead.
9.15 p.m.
Lord Moran: My Lords, I am very sorry indeed that Lord Brookeborough is no longer among us. I was in Northern Ireland the other day and was travelling around Fermanagh. I found that a great many people with whom I spoke were deeply concerned that he was so seriously ill in hospital and it was clear to me that he was held in very high regard. The noble Lord will be greatly missed there and greatly missed in your Lordships' House. Our sympathy goes to his widow and to his family.
One of the effects of the Anglo-Irish Agreement of 1985 and of the secrecy surrounding the deliberations of the Anglo-Irish Conference, is that anything the Government bring forward is seen as a response to pressure from the Republic. Certainly that seems to be true of Article 27 of the order: the repeal of the Flags and Emblems (Display) Act (Northern Ireland) 1954 about which the noble Lord, Lord Fitt. has spoken with great authority. After the rebuff to the Republic on the composition of the Diplock courts, this looks to many people like a sop to the Government of the Republic. Designed perhaps as a bouquet for Mr. Peter Barry, time has turned it into flowers on Mr. Barry's political grave. However, it is bound to be resented by the majority in Northern Ireland.
The timing of this order also seems to me to be unfortunate. On my recent visit I was struck by the fact that, politically, everyone at present seems to be stuck and boxed in. The article in today's Times about the uncertainty among Unionists may be right, but I think that the Government are also in a hole. It cannot be satisfactory that Ministers cannot even visit a school or go into a factory without workers possibly downing tools and walking out. I believe that statesmanship requires the Government to make a move to lower tension, remove suspicions, and chart a more constructive course. For example, they could remove the secretariat from its bunker at Maryfield and put it in London or Brussels (there is nothing in the agreement about its location); or they could press the Republic to amend Article 2 of their constitution under which they claim the territory of Northern Ireland. That would be a logical consequence of the agreement. But, no, far from attempting conciliation they produce this order which must inevitably be resented by Unionists. I find that hard to understand.
As regards the substance of the order, I recognise that a good deal of it follows the Public Order Act 1986 applying to England and Wales. That Act was considered at length in your Lordships' House and in another place, and important amendments were made to it. I find it strange therefore that this order, applying to another part of the United Kingdom. should differ

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so much from the Act. It seems to me to ignore some of the amendments to the Act made by Parliament. For example, the Act was amended so that restrictions on public processions apply only to those intending to demonstrate support for or opposition to a view or action, to publicise a cause or campaign or to commemorate an event. (That appears in Section 11).
However, the order is not so restricted. As it stands, it seems to me that the most innocent processions—school crocodiles or wedding processions—could be covered by the order unless they are exempted by a purely administrative order. The statutory powers given to the police seem to me to be much more extensive and draconian, and the restrictions on civil liberties much more severe. The penalties are much tougher even for the same offence. As the noble Lord, Lord Prys-Davies, pointed out, someone taking part in a procession in England and failing to comply with a condition laid down is subject to a limited fine. However, someone doing exactly the same thing in Northern Ireland will, under this order, be liable to be imprisoned. Surely, it is quite wrong that someone committing an offence in Ballynahinch should be liable to a much more severe penalty than someone committing the same offence in Barnstaple. I should like to know how the Government seek to justify that discrepancy between two parts of the United Kingdom.
There is then the question of bands, which is not covered in the 1986 Act. They are defined in the order as:
"a group of two or more persons who carry for the purpose of playing or sounding, or engage in the playing or sounding of, musical or other instruments".
It seems to me that that could cover a barrel organ and an aged violinist. I should like to ask the Minister whether it is correct, as I have heard, that a group of children walking along the street with a couple of tin whistles would, under this order, be committing at least two offences: failing to give notice of their procession and knowingly taking part in a public procession as a member of a non-registered band, for both of which they could be imprisoned?
I should also like to ask the Minister why in Article 12, which makes broadcasting threatening or abusive images or sounds an offence, the BBC and the IBA are exempted? I know that they were so exempted in the Act but why should they be put above the law in this way? An offence is surely an offence committed by whomever it might be.
I think there is much that is questionable in the order. However, as has been pointed out, under the procedure which the Government have chosen we cannot amend the order, and the Government can ignore the detailed arguments and changes made to the Public Order Act. All that we can do is to support or oppose it, but it is an unsatisfactory measure, severely curtailing civil rights in one part of the United Kingdom just because the Government believe that some people there have made a nuisance of themselves. I think that it is born of impatience—never a good guide to policy.
Then there is the repeal of the Flags and Emblems (Display) Act (Northern Ireland) 1954 after 33 years.
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I do not think I can add anything to what the noble Lord, Lord Fitt, said on that. I suppose it means that the police will no longer be able to intervene under the previous Act to prevent the flaunting in a provocative way of the Irish tricolour. As the flag of the Republic it is entitled to respect; but in Northern Ireland it represents the flag of a state claiming the territory of Northern Ireland as its own. Flying it therefore is seen as a challenge to the present status of Northern as part of the United Kingdom.
What will happen? I suppose that in many Catholic housing estates the IRA will, by intimidation, enforce the flying of the tricolour which will accentuate differences between the minority and the majority and be provocative to Unionists, and then what price peace, stability and reconciliation, the objectives of the Anglo Irish Agreement? This provision seems to me to go flat against those objectives.
All in all therefore this seems to me an untimely and unhelpful order which I hope the Government will take back and amend in the light of what has been said in your Lordships' House. But I have a more fundamental objection. I think that the Government ought not to spend time on unreal legislation on flags, processions, and penny whistles. On public order in Northern Ireland they should concentrate on the real threat, which is that of murder, bombing and mortaring by the IRA.
I have just visited the border area in Fermanagh. I saw RUC stations being turned into mini-fortresses. I met some of our soldiers and members of the UDR. Here I should like to pay a tribute to the members of the RUC and the UDR in Northern Ireland who are acting with great courage, who are being even-handed between the two communities, and doing a tremendously good job under extraordinarily difficult circumstances. They deserve our fullest support.
I also met some of those who had had members of their families murdered. I met a boy who had seen his father, who had been cutting rushes in the field, shot in the back of the head. I met a schoolmistress who said that two-thirds of the children in her class had lost fathers, uncles, or first cousins. It seemed to me shocking that this state of affairs should be allowed to continue in a part of the United Kingdom while known IRA gunmen walk about quite openly.
The people in this part of the United Kingdom are not being adequately protected. The murderers are seldom caught. This state of affairs would not be tolerated in most of the countries that I have lived in. It ought not to be tolerated in ours. The present level of security in border areas is not acceptable. The Government ought to address themselves first and foremost to this public order problem. I believe that they have improved the situation in some areas, for example around Crossmaglen. They should do so elsewhere as well. I hope that the Minister will be able to tell us that much more resolute steps will be taken to provide proper security throughout Northern Ireland.
The Earl of Erne: My Lords, I should like to be associated with the remarks and comments that have been made about my late noble friend and neighbour Lord Brookeborough. We are all extremely sorry that

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he is not here this evening, and our deepest sympathy goes to his family.
I should like to say that I am delighted to hear of any noble Lords who takes the trouble to visit our troubled country, and especially my county of Fermanagh. It is essential that people visit our country in order to understand our problems. One of the problems that faces us all today is that so few people really understand.
One is deeply grateful when one hears of people taking the trouble not only to go there but to travel, to visit the people who have been stricken and the families that have suffered, and to see and experience the tremendous work that is being done by the RUC, the UDR and the other military personnel there.
Lord Blease: My Lords, I share with the Minister and with other noble Lords the shock and the sadness of the loss of Lord Brookeborough. I wish to join in the tributes and the words in token of his work in this House and the memory that he has left of his staunchness, his outright honesty and the forthrightness with which he dealt with those things in which he believed and for which he stood. I wish to be associated with the remarks of the Minister and other noble Lords in the words of sympathy to his lady, Rosemary, and his family at this time.
It will be no surprise to the House if I say that the proposed public order legislation has given rise to much bitter controversy in Northern Ireland. Public pronouncements have been made by Northern Ireland Members of Parliament and others about concerted plans for a campaign of opposition hostile to the implementation of the proposed legislation. One Northern Ireland Member of Parliament stated on 2nd March:
"A campaign of civil disobedience will be timed to coincide with the introduction of the Public Order legislation, and much of it will defy that Bill. The full scale civil disobedience campaign will include the withholding of all licence payments and rates for bills which are due to be issued in April and May."
The history of marches and public meetings in Northern Ireland records many instances of innocent and peaceable citizens having been caught up and ensnared by marches and public meetings which turned into displays of provocative sectarian conflict and political hatred. Tragically, on some such occasions recently the outcome has been serious injury and death as well as the wilful destruction of homes and public property with consequential human suffering and loss of employment. I believe that in Northern Ireland, as here in Great Britain, the vast majority of citizens wish to uphold the rights of peaceful demonstration and the freedom to protest and to give expression to public interest in matters of public concern as well as the freedom to participate in the organisation of traditional parades and public meetings. At the same time, I believe it is firmly held that there is a need for the public good that such parades and meetings should be under agreed rules for the maintenance of law and order.
If we approve legislation which is considered necessary for good government and the maintenance of law and order, surely we must consider also the practical implementation of such legislation. That is the note which I try to sound in this House this
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evening—the practical implementation and the realities of the situation in Northern Ireland which have already been mentioned in this House.
The consequences of such widespread and planned opposition to law and order measures cannot be lightly set aside, notwithstanding the stated principles and the urgency of the proposed legislation. Surely we must not only be convinced of the rightness and equity of the legislation in terms of parliamentary democracy but must, of necessity, be assured that the proposed measures are workable and are within the principal capacity and the existing resources of the law and order services to act upon with impunity.
There can be no doubt that this order we are discussing is a major piece of substantive primary legislation. Among the matters the order deals with are three vital and highly emotive issues which are deep-rooted in the political and community life of the Northern Ireland people. They have already been mentioned several times in your Lordships' House and I will repeat them so that it will be understood I am referring to the same issues. They are: the repeal of the Flags and Emblems Act (Northern Ireland), which was enacted by the Northern Ireland Stormont Parliament in 1954; the amending of the incitement to hatred legislation; and changes in the laws concerned with the control of marches and open-air meetings.
I share the concern expressed by many in Northern Ireland and in this House that the six-week consultative period (which included the Christmas holiday period) was totally inadequate to allow for careful debate and thoughtful discussion by public bodies, organisations and individuals who might be directly or indirectly concerned about this legislation.
Although the Government and the Northern Ireland Office may not be totally to blame for the lack of suitable parliamentary scrutiny and debate in connection with this order, I am of the opinion that the Government ought to have given greater thought and to have displayed a more sensitive awareness of the parliamentary and public presentation of this difficult order. All we have had has been an explanatory document, the draft proposals and ministerial statements made outside the precincts of Westminster, the Parliament of the United Kingdom.
In this connection there are at least three measures which I believe could have helped, had they been subjected to a greater input from a wider public debate before the parliamentary procedures were set in motion. The first concerns a measure to amend the incitement to hatred laws. In this regard the Secretary of State for Northern Ireland, the right honourable Tom King, was reported in the Belfast Telegraph of 10th February 1987 as stating:
"The Secretary of State, Mr. Tom King, today suggested that the Government might have to consider further new curbs on incitement to hatred in Northern Ireland after its proposed Public Order legislation came into force.
"Mr. King was responding to the annual report of the Standing Advisory Commission on Human Rights, which has argued that wider issues are involved.
"In a letter to the commission chairman, Mr. James O'Hara, the Secretary of State said the Government intended to bring in its controversial Public Order measure before Parliament shortly.
"However, he added: 'This is, however, an area of law which raises particular human rights issues, including relations between citizens as well as between citizens and the State, and is one in which

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further evolution of the law can, by no means, be ruled out in the longer term'."
That was the Secretary of State's reaction to the body which has been set up and established by an Act of this United Kingdom Parliament to inquire into and scrutinise the laws in relation to the incitement to hatred and human rights matters in Northern Ireland.
In view of these remarks by Mr. King, may I ask the Minister: is it not unwise to proceed with this legislation and to replace an unworkable Act by introducing another piece of flawed legislation which appears at best to be an interim stage measure? The human rights commission has already indicated that it is not completely satisfied with its examination of the legislation that has been put forward. It is on record in its annual report that it will require a considerably longer time to go into the details of the legislation.
My second question is about the concern and reservations expressed by leading media representatives over the proposals in Article 10(2) on page 9 of the order. This deals with the burden of proof in cases of intent to stir up hatred and arouse fears. The Minister has already referred to the concern of the press. I should like to quote from the Belfast Telegraph editorial of 11th February 1987. It reads:
"Just as it was impossible to prove 'intention' to cause a breach of the peace by words that could be held to constitute incitement under the present Act, the new Bill could encroach on the duty of the media to report public statements …Every doubtful statement, by every politician, journalist or letter-writer, would have to be carefully scrutinised for its inflammatory content, and clearly a lot of subjective judgment based on the likely readership or audience would be involved. One person's incitement is another's robust statement of opinion".
That is the dilemma with which we are faced when we try to enforce regulatory powers on the media. Perhaps the Minister will wish to reassure responsible journalists and media representatives that the proposed legislation will enable them to carry out their work with impartiality and objectivity, without feelings of restriction by the order, and will not hinder them.
I further ask the Minister whether he agrees that the purpose of a law which attempts to restrict the accepted standards of freedom should be clearly defined. It is apparent that this part of the order is not clear to experienced and responsible journalists. I am advised that the words in the order,
"having regard to all the circumstances",
are not clear and do not give the necessary safeguards.
My third concern is over the practical role and functions of the police in connection with the repeal of the Flags and Emblems (Display) Act (Northern Ireland). The Northern Ireland Secretary of State, Mr. King, in a statement issued on 19th February 1987 about the draft order said this. I do not wish at this time to quote the statement in full because the Minister has already repeated it. Is the noble Lord putting his hand up to prevent my going on? I intend to say what I have to say on this occasion. I am trying to restrict my remarks but, as my noble friend Lord Fitt and others have indicated, this is a very important issue so far as Northern Ireland is concerned. I should not be standing up to my responsibilities if I flagged at this stage in putting forward my views. The Minister is well aware of the need for a debate on this order.
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As I said, I shall not repeat the whole statement by Mr. King on 19th February 1987. It was made outside Parliament, and so I welcome the fact that it has been put on the official record by the Minister. The only part to which I shall refer reads:
"The police will also retain their general duty under common law to take whatever steps are necessary to prevent a breach of the peace arising from the provocative display of any flag or emblem".
Tribute has already been paid this evening in your Lordships' House to the security forces and particu-larly to the RUC for maintaining peace and order in Northern Ireland. It will therefore not be necessary for me to go into detail. The RUC is at the sharp end of the law and order services in the Province. Your Lordships have on several occasions expressed commendation and praise for the RUC in dealing with ugly and vicious deeds of terrorism and in maintaining the principles and the impartiality of the administration of the rule of law.
On many occasions recently members of the RUC have been trapped in the middle ground and have been the target of rival rioting groups, on duty, off duty and in their homes. We have an obligation in this Parliament to ensure that if we enact laws, we also give the necessary measures for enforcing them. I believe that that was the tenor of the remarks made by the noble Lord, Lord Moran. It is useless to put forward laws unless they can be implemented.
I hope that the Minister will therefore confirm that the statement by Mr. King embodies the intention of the order. He has already repeated the statement and I am sure that that was the reason for it. I also ask whether the Minister can explain how in real terms it is intended that the RUC will be able to prevent a breach of the peace, as was referred to in the statement, in circumstances such as the defiance announced by Northern Ireland Members of Parliament and others. Will the general duties of the police, as referred to in the statement, be made easier or more difficult by the role and function of the RUC under the order? Perhaps I may repeat that. I believe that the Minister did not hear.
Lord Lyell: I did hear.
Lord Blease: I look forward with interest to the reply.
The proposed legislation raises many issues and questions about community protest, public interest, industrial action by trade unions, the registration of bans and the discretion available to be exercised by the police. I am unhappy about this order. I believe the Government have missed an opportunity to introduce helpful, suitable and workable public order measures by their insensitive presentation and by the parliamentary procedures which they have adopted on this occasion. In my opinion the order will create more problems than it resolves, not only for the law-abiding citizens of Northern Ireland and the police but also for the Government and for this Parliament. I hope that I am wrong. I shall be happy if the order succeeds and if I am proved wrong. For the present, my conscience and my judgment prevent me indicating support for this order.
9.45 p.m.
Lord Lyell: My Lords, I too wish to reiterate everything that has been said in tribute to the late Lord Brookeborough and to associate myself with what has been said by your Lordships. I am sure that it will go on record that all noble Lords wish to send their sympathy to his wife and his family. They have shown much courage and they helped the late Lord Brookeborough in so much that he did in Northern Ireland.
The noble Lord, Lord Prys-Davies, started with a major review of the order we have before us this evening. The first matter the noble Lord raised was that of consultation by the Government with various people in Northern Ireland. Successive governments have devised arrangements for wide consultation before orders such as the one we have before us this evening are made. I hope I can assure the noble Lords, Lord Prys-Davies and Lord Blease, that six weeks is the normal consultation period for orders, many of which are as controversial as or even more controversial than the one we are considering this evening. I confirm once again that proposals for draft orders, including the one which we have before us, are sent to the political parties in Northern Ireland.
The Northern Ireland Committee in another place can consider proposals and this allows all of us in your Lordships' House to hear the views of honourable Members of another place, and if appropriate we would be able to amend the draft order. With regard to consultation and insensitivity—and this is relevant to the concluding remarks of the noble Lord, Lord Blease—the Government cannot be responsible if elected representatives from Northern Ireland do not take advantage of the procedure of the Northern Ireland Committee in another place. I would go further and say that if all draft orders concerning Northern Ireland legislation took the form of a Bill, an impossible burden would be put on your Lordships' House and indeed on another place. I speak as a Scotsman and also as a proud representative of Northern Ireland.
Lord Blease: My Lords, will the noble Lord give way?
Lord Lyell: My Lords, I shall come to the noble Lord, Lord Blease, in a moment. He had a fair crack of the whip and I shall come to him after I have dealt with one or two other points. If the noble Lord can intervene briefly, I shall give way.
Lord Blease: My Lords, I indicated in my remarks that I made allowance for the absence from debate in another place of the Members of Parliament for Northern Ireland. I said that for that reason the Government were not totally to blame, but that does not exclude the responsibility in other quarters.
Lord Lyell: My Lords, the noble Lord is only reiterating what he said earlier. I believe that we cannot be responsible. I shall not repeat what I have already said. I hope the noble Lord will accept it. Our positions are fixed. The noble Lord should take that point, and I think he supports us; I hope so, anyhow.
The noble Lord, Lord Prys-Davies, suggested that the consultations were rushed. Public order issues in
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Northern Ireland have been in the public domain at least since 1981, when the chief constable in his annual report first raised his concerns about the high level of policing required for parades. He developed this concern in all subsequent annual reports right up to 1984, when he pointed out that the whole question of parades and demonstrations presented what he called a challenge which had to be faced by the whole community in Northern Ireland. It was against this background of five years of concern that the Government published their draft proposal and the explanatory document more than three months ago. This invited representations and comments from, among others, the constitutional political parties. I regret to say that the Ulster Unionist Party and the Democratic Unionist Party chose not to respond.
The noble Lord, Lord Prys-Davies, also referred to the press release that was issued by my right honourable friend in December last year. If the noble Lord glances at it he will see that it clearly set out the intention behind the order before us this evening and above all set out its main provisions. Paragraph 3 of the press notice, which was quoted by my right honourable friend the Secretary of State, said that the Government believed that it was right that the principles underlying public order legislation should be uniform throughout the United Kingdom, although local circumstances in Northern Ireland may require detailed provisions that are different. That is fairly clear and sets out the intentions of the Government on public order.
The noble Lord, Lord Prys-Davies, referred to conduct which may be criminal in Northern Ireland but not in England and Wales. There would be a difference between the 1986 Act and the order before us this evening.
The legislation on processions in the draft order is closer to the Public Order Act 1986 than the present Northern Ireland law, which was implemented in 1971. Differences do occur and we hope they are minor differences and that the noble Lord will accept that this is a necessary reflection of the different situation regarding public order, marches, processions, open air meetings and the like in Northern Ireland.
The noble Lord also raised the question of the statements which had been made by the honourable Member for North Antrim in another place. He referred to the legislation before us this evening and before another place for use against opponents of the Anglo-Irish Agreement. Certainly the legislation is not intended in any way to interfere with lawful and peaceful demonstrations whether against the Anglo-Irish Agreement or any other cause. In all these cases and indeed in the legislation before us this evening, it is for the police and the courts—not the Government—to determine whether any particular demonstration infringes the law.
The noble Lord, Lord Prys-Davies, raised the question of human rights and also I think the National Council for Civil Liberties. They had suggested that Article 5 of the order clashed with or contravened the European Convention on Human Rights, especially Article 11. If we look at that article we see that it specifically recognises that restrictions may or might have to be placed on the exercise of the right of peaceful assembly. I think that the noble Lords. Lord

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Fitt and Lord Prys-Davies, would accept that such restrictions may be necessary in a democratic society in the interests of national security or public safety or for the prevention of disorder or crime. I think that point will register with the noble Lords and also the point regarding the protection or of health or morals and the protection of the rights and freedoms of others.
I do believe, and I am sure your Lordships will agree, that the provisions of the draft order—in particular Article 5—are within the terms of this particular article of the convention. The noble Lord, Lord Prys-Davies, raised the question of the Flags and Emblems Act and we are extremely grateful for his support for the repeal and removal of this legislation. We are very grateful for the tributes and the comments of the noble Lord, Lord Hampton, and the thought which has gone into his speech on the particular order before us this evening. The noble Lord is indeed quite correct about the number of marches. I understand there were over 2,000 marches in 1986, but the noble Lord's mathematics were definitely in the right direction. It was 70 rather than seven marches that gave problems and the noble Lord is quite correct in that particular aspect. The Royal Ulster Constabulary did consider it necessary to reroute 10 parades and my right honourable friend the Secretary of State did ban a proposed parade by the Apprentice Boys through Portadown on Easter Monday. This was not a traditional parade and it was the chief constable's view that the route selected was deliberately provocative and that any parade there would be a serious threat to public order. This, my Lords, is one parade or march out of 2,000 which was banned during 1986.
The noble Lord, Lord Prys-Davies, referred to participants and organisers who might be liable to commit an offence. He also raised the question of the penalty not just being a fine. It could also be imprisonment. I think that point was touched on by the noble Lord, Lord Moran. These provisions in Part II follow the 1981 order. In the view of the Government they remain necessary if the police are to be able to deal effectively with potential public disorder. That is what is at the back of our minds all the time, although I take the thoughts of the noble Lord, Lord Blease, and other noble Lords who have spoken as to the practical effects of these aspects.
The noble Lord, Lord Hampton, also asked about Diplock courts. I do not think I shall go along that road too far this evening, if the noble Lord will forgive me. I shall write to him if we can find any tripping points on that apsect.
The noble Lord, Lord Fitt, has clearly studied this order and he took us right back to some very interesting aspects of 1964 and 1969. We always find him most interesting. Unfortunately, I do not have my copy of the Cameron report before me this evening but doubtless there will be many other points of Northern Ireland history that the noble Lord can describe. He spoke about these dates in history. I am sure he knows of 1608. I do not know whether marches were going strong 380 years ago, but that, too, is a critical date in Northern Ireland's history.
The noble Lord pointed out that public order matters in Northern Ireland are different and he referred to the constitutional problem. He is quite
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correct. He stressed that the wheel had turned full circle, with anger by nationalists in, I think, 1969 and rage now by Unionists. Perhaps that goes to prove that governments in the United Kingdom cannot please everybody all the time.
The noble Lord referred to the Flags and Emblems (Display) Act (Northern Ireland) 1954 and asked why this was not taken off the statute book in 1972. Why he chose 1972 and not 1969 I am not too clear.
Lord Fitt: It was the abolition of Stormont.
Lord Lyell: I see. That is one interesting date in the recent history of Ulster events.
The Act was redundant. There have been no prosecutions under it since at least 1969 and I am advised that no records are available for earlier years. Therefore, for all the fire and fury that may have been emitted in 1954 or in earlier days—perhaps even after that in 1964—the Act has not been used in any court. Therefore, it was clearly redundant and I hope your Lordships will accept that the draft order provides an appropriate legislative vehicle for public order offences that are connected with the waving of banners, emblems or whatever else. Certainly my fertile mind, and I am sure those of your Lordships, can go a long way from tricolours or anything else.
The noble Lord referred to the 1964 disorder provoked by Sinn Fein. I stress that the repeal of the Flags and Emblems Act will make no difference to the fact that the Royal Ulster Constabulary will have to make difficult judgments on its own as to whether the display of a particular flag or emblem—and that could by anything, could it not?—
Lord Fitt: My Lords—
10 p.m.
Lord Lyell: May I just finish this sentence? There are difficult judgments as to whether the display of a particular flag or emblem is likely to give rise to public disorder or whether those opposing the display of a particular flag or emblem are creating a breach of the peace. Therefore, there are the fliers of the flag and the opposers. The noble Lord, Lord Fitt, nods his head. The police must try to reach perhaps not the judgment of Solomon but some judgment. It will be difficult. We hope that the order will give them some indication and help.
The noble Lord asked about inflammatory statements and hatred. He will see that in Part III, paragraph 1(a) refers to intent and paragraph (b) to,
"having regard to all the circumstances".
I think that those two sub-paragraphs cover the intention to use inflammatory words that people know perfectly well, especially in the context of Northern Ireland, will stir up hatred or fear or what everyone knows those two concepts to be. I think that Part III makes it fairly clear that people cannot come before the courts and skate away saying that they did not know, especially in Northern Ireland. I think the noble Lord will accept that.
Once again we are grateful to the noble Lord, Lord Moran, for his tribute and I also add a note of gratitude. As he told your Lordships, he made a personal visit to Northern Ireland and his remarks this evening are very much the result of that visit. I hope

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that I quote him correctly in recalling that he said that this order must be resented by Unionists. That may be the view of some—perhaps many—Unionists but I ask the noble Lord and the Unionists to study what Part II of the order does that is not done already in almost all cases of responsible marches. Much noise and strident comment will be uttered by those who wish to stir up disorder and trouble because they neither care for Part II of this order nor appreciate it. However, I assure the House that Part II confirms much of what is already being done in the field of public order so far as processions and public meetings are concerned.
The noble Lord, Lord Moran, referred to civil liberties. Perhaps he will cast his mind back to the last occasion on which we discussed public order and emergency provisions, I think when we were renewing the emergency provisions order. We spoke about civil liberties. We heard what the noble Lord, Lord Fitt, had to say about civil liberties in Northern Ireland and how concessions to one section of the community are regarded as a flagrant breach of civil liberties. That phrase has very wide terms of reference in Northern Ireland.
The noble Lord, Lord Moran, also referred to the differences in laws between Northern Ireland and other parts of Great Britain, particularly England and Wales, and the great gap between the Public Order Act 1986 and the order that is before us this evening. I shall not go into the differences that existed in Scotland in 1980 and 1981 as regards conduct at events such as football matches. For four years in Scotland the law concerning behaviour at a specified event was completely different from that governing what one could or could not do in England. We hope that the differences between Northern Ireland and other parts of Great Britain are at least being narrowed.
The noble Lord raised the question of bands. Article 6(2)(b) provides that any regulations may exempt specified classes or descriptions of bands. In any event, no such regulations have been introduced, nor are they planned.
As regards the point which was raised by the noble Lord, Lord Moran, concerning the Flags and Emblems (Display) Act, the Royal Ulster Constabulary will not be precluded from dealing with provocative displays of the Irish tricolour nor indeed any other flag or emblem. As the noble Lord will be aware, flag waving can be provocative and annoying and where it is provocative or causes a breach of the peace the Royal Ulster Constabulary already have sufficient common law powers to deal with the matter.
The noble Lord raised the question of the BBC and the IBA being exempt from offences of incitement. I am advised that the BBC is governed by its charter and the IBA is subject to the Broadcasting Act 1981. Both measures impose duties on the broadcasting authorities which, among other things, prevent them from broadcasting any material that is likely to lead to crime. I understand that the phrase, "likely to lead to crime", is sufficient for exemption. It seems that it is not necessary for them to be made the subject of criminal offences in the order that we have before us this evening, since the IBA is caught by the Broadcasting Act and the BBC by the charter.
We were grateful for the tribute of the noble Earl, Lord Erne, from County Fermanagh. The noble Earl,
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Lord Erne, and Lord Brookeborough, were close neighbours and friends. The tribute this evening from my noble friend is all the more helpful and kind. We were also grateful for the tribute of the noble Lord, Lord Blease, to Lord Brookeborough.
The noble Lord mentioned the question of agreed rules—at least that is what I wrote down. I hope that he will accept that Part II of the order is codifying the agreed rules of what I am sure he would accept are the responsible marchers. Part II seeks to catch, as I was pointing out to the noble Lord, Lord Moran, the wilder elements who wish to stir up trouble.
With regard to the report of the Standing Advisory Committee on Human Rights, and the response of my right honourable friend the Secretary of State, we are satisfied that Part III of the order before us this evening makes provisions which are fully appropriate to the present situation. The standing advisory committee commented that the draft legislation raised wider issues. My right honourable friend's letter to them looked forward to receiving further advice from them. It sought not to close the door on the possibility of further changes to the law.
The noble Lord also reflected on the worries of responsible journalists. I mentioned in my opening remarks that responsible reporting would be protected. However, your Lordships would not expect journalists to be given a blanket immunity. As in almost all the measures before us this evening it will be a matter for the courts to decide whether in all the circumstances their reporting is likely or intended to stir up hatred or arouse fear. I think that the noble Lord will accept that in the context of Northern Ireland intent may be one thing but knowledge of a course of action, and the probability of what it might do, is certainly very clear, especially to journalists.
I hope that I have covered Article 10—the accepted standards of freedom. This is always a matter for the courts. I hope that I have covered the matter of flags and emblems, mentioned by the noble Lord, Lord Blease. I believe that the Royal Ulster Constabulary will see the order before us this evening as being a realistic attempt to bring public order legislation more closely in line with that in Great Britain, and, above all, that it will be treated in a realistic manner.
As I stressed in my earlier remarks, and I hope throughout my later remarks, legislation in the field of public order and in particular in Northern Ireland is a sensitive matter. I have sought—and I stress that word—to explain and justify a number of points on the draft order which were raised by noble Lords. I hope that I have gone some way in satisfying noble Lords who asked questions that the draft order deals adequately with these sensitive matters and that it will be in the long-term interests of all the people in Northern Ireland. I hope that I have said enough. I commend the draft order to the House.
On Question, Motion agreed to.

Pontypridd Markets Fairs and Town Hall Bill
Reported from the Select Committee with amendments and recommitted to an Unopposed Bill Committee.
House adjourned at nine minutes past ten o'clock