Local Government Bill

HL Deb 11 January 1988 vol 491 cc947-1033

4.25 p.m.

Lord Belstead

My Lords, I beg to move that this Bill he now read a second time. This is not a particularly long Bill but it contains no fewer than nine quite separate provisions, and views may reasonably differ on which of them are the most significant. I should like to start with Part I, not simply because it comes first but because its practical effect both on local authorities and on their ratepayers will, I am sure, be much more profound and far-reaching than any of the other parts of the Bill.

The concept of Part I is simple: in order to ensure that important local services should be provided in a way which gives the best possible value for money, local authorities—and the other bodies listed in Clause 1—should invite competition for carrying out the work, and, although this is implicit rather than explicit, award it to whichever competent party is willing to do it at the lowest overall cost to the authority.

However, I should like immediately to give an assurance that local authorities will be entirely free to decide what service level and quality they want. For example, if they want refuse to be placed in wheeled bins and collected from the back doors of houses, that is what they will stipulate in the specifications for a contract. If a contractor then puts in a bid based on collection in plastic bags from the pavement, the authority will simply not take up that particular bid.

Of course I acknowledge that there are many authorities which have never before had to specify their service requirements with the amount of attention to contract conditions that will be necessary in order to generate the documents that will inevitably be required in the context of open tendering. However, there is already a sizeable minority of authorities which have been through these processes for the services listed, and already various local officer groups and other professional bodies are hard at work generating and refining model documents based on their experience.

Moreover, no council is going to have to be in a position to decide who is to be awarded work by competitive contract before 1989. Although that means that the preparatory work must be started very soon—and many authorities have wisely already started—it is only fair to point out not only that this Bill was published as long ago as last June but that the consultation paper on which it is directly based was published fully three years ago. Of course we are not proposing that all authorities should subject all the services mentioned in the Bill to competition immediately. A scheme of phasing in over a two to three-year period was set out in a consultation paper issued on 2nd November, with a proposal that the provision of ground maintenance should be phased in more gradually over a five-year period.

I should also like to give an assurance that there is no provision to he found either in Part I or in Part II of this Bill to prevent authorities from making whatever inquiries are necessary in order to establish the competence, track record, and financial integrity of companies wishing to put in tenders. It has been claimed that the specific prohibition in Clause 17 on conditions relating to the wage levels of contractors' employees makes it impossible to ensure that the remuneration proposed will enable the employment of staff of high enough quality to carry out the work properly. But that is not the case. Authorities will be able to ask pertinent questions about the total level of resources included in a tender price which are proposed to be deployed on a contract and to seek references from previous clients, and so on.

In assessing Part I, I would draw your Lordships' attention to the simple, solid experience of those authorities which have proved what can be achieved through competition—and it is of course competition, not privatisation, that is provided for in the Bill—and from letting contracts when that has been the outcome of competition. The borough of Wandsworth—currently saving some £5 million a year as a result of its wide-ranging initiatives—probably remains the leader in this field, but large savings have been made by a small but growing number of other authorities spread throughout the country. Thus it is hardly surprising that the Institute of Fiscal Studies has estimated that cost savings of around £80 million in a year could have been made by authorities in refuse services alone. Refuse collection is only one of the six services covered by the Bill. In each case, if savings can be made, it is the people of a local authority area who ultimately will benefit.

Part II of the Bill aims to prevent the use of what it describes as "non-commercial considerations" in contracts and tender lists. It has to be said that these provisions have their origin in quite gross abuses by a number of authorities aimed, for the most part, not at lofty ideals of racial and sexual equality, training or employment of local labour, but simply at deterring private companies from competing with direct labour organisations. I acknowledge that there arc those who sincerely believe that what is described as "contract compliance" is, in general, a proper and honourable aim of public sector contractual processes. I recognise that. However, the Government are equally sincere in their view that the interests of all members of society are better served if, in their contractual dealings, local authorities are guided by the simple need to get a good job done at a good price, subject only to their specific statutory duties, for example under Section 71 of the Race Relations Act.

However, as your Lordships may well be aware, the Bill has been amended in another place so that authorities' duties under the two limbs of Section 71—that is, their duties to exercise their functions with due regard to the need to eliminate unlawful racial discrimination and to promote equality of opportunity and good relations between the races—will continue to apply to their contractual functions. I think that that was a wise and proper improvement to the Bill.

The great majority of authorities will be almost entirely unaffected by Part for the simple reason that they never have regarded it as proper to use the contractual process in ways which the Bill will prevent. That is the reality of the matter, and to underpin good practice by local authorities I have no hesitation in commending the provisions of Part II to your Lordships.

Part III of the Bill give local authorities powers to assist with the provision of private rented accommodation. These clauses are essentially the same as those included in the last Local Government Bill but withdrawn prior to the general election. They have not, however, been debated before in this House. Their purpose is to provide what we hope is a valuable new power for authorities, offering considerable scope for partnership with the private sector while at the same time—via the Secretary of State's consent power—ensuring that the private sector shoulders its fair share both of the costs and of the risks. The retrospective elements involved in Clauses 25 and 26 were inserted in order to ensure that schemes already being planned took an acceptable form, as there was evidence that some of them were effectively council housing masquerading as privately rented homes in order to evade the capital control system.

The Government have repeatedly made it clear that the consent power of my right honourable friend will be used only to ensure that schemes are acceptable, and not to interfere with the great majority of existing activity. The Bill itself exempts from the consent requirement expenditure under quite a number of existing powers, and the Government have already issued seven general consents as well as almost 90 individual consents for specific schemes. We very much hope therefore that these clauses will encourage further growth in the private sector in the years ahead.

Clause 27 proposes amendments to the provisions in Part II of the Local Government Act 1986 concerning local authority publicity. The amendments are intended to restore the effects of the 1985 Local Government Bill which was amended by your Lordships during its passage through this House. Your Lordships will recall that there was no opportunity to come back to this House at the time because the over-riding need was to ensure that the requirement for local authorities to set their rate by 1st April each year was on the statute hook by 1st April 1986. The Government have now sought, as far as possible, to bring forward new proposals in this Bill which would achieve the original objective of the Bill but without the potentially unacceptable effects that your Lordships feared in the earlier Bill.

Perhaps I may briefly explain the Clause 27 provisions, starting, by way of background, by reminding the House of the purpose of Part II of the 1986 Act. The central provisions of the 1986 Act are a statutory prohibition, in Section 2, on any publicity by local authorities which, in whole or in part, appears to be designed to affect public support for a political party, and in Section 4 a power for the Secretary of State to issue a code of recommended practice as regards the content, style, distribution and cost of local authority publicity and other related matters. Section 2 of that Act was designed to restate the long-standing common law ban on party political publicity at public expense—the key recommendation of the Widdicombe Committee in its interim report on local authority publicity.

When it originally came to this House the party political prohibition comprised two separate tests. The first, the existing test of "apparent design", your Lordships accepted as being a valid test of the nature of material. The second test of "likely effect" your Lordships rejected. The House was concerned that the "likely effect" test could be interpreted widely and might inhibit local authorities' publicity activities unreasonably. The Government recognise that your Lordships' concern was a real one. We therefore reconsidered whether we could achieve our objectives without any risk that the courts might construe the provision too widely.

Clause 27 therefore proposes a new approach, building on the single existing test of "apparent design" of publicity but making it clear that all the relevant circumstances of publication—including its "likely effect"—must be taken into account by the courts in determining whether material appears to he designed to affect public support for a political party. The second change proposed in Clause 27 relates to the code of recommended practice on local authority publicity. Clause 27(2) seeks to require local authorities to "have regard" to this code of recommended practice in all their publicity decisions. This means that the principles set out in the code will be among the relevant factors a local authority must take into account in exercising its publicity functions. Failure to do so will render their decision unlawful. Disregarding the principles without good reason may well result in the decision being challenged in proceedings for judicial review.

I realise that there were differences of view on this particular issue when the 1986 Act was going through your Lordships' House. Your Lordships may wish to know that guidance from the Government on the content and legal effect of codes of practice, including codes in the administrative law field such as this one, has been published by the office of the Minister for the Civil Service and is available today in the Library of your Lordships' House. I hope that this will perhaps help our debates when we go into Committee on this Bill. I apologise for this rather lengthy exposition of the Government's position on local authority publicity, but I thought your Lordships would forgive me if I tried to set out in detail what we feel on this side of the House about it before we get into further debate.

More briefly. Clause 28 of the Bill prohibits the promotion of homosexuality by local authorities, which was approved unanimously by this House in the Bill promoted by the noble Earl, Lord Halsbury, in the last Session. The remaining provisions of the Bill would make various changes to the powers of the local ombudsman, improve the operation of the land registers and amend the existing direct labour organisation competition regime for building work so as to bring it into line with the provisions of Part I.

Clause 32 would regularise the basis on which the Manpower Services Commission and the Department of Employment can enter into training arrangements with bodies created by the Local Government Act 1985, while Clause 33 would extend the remit of the Commission for Local Authority Accounts in Scotland to include the carrying out of value for money studies as the Accounts Commission in England and Wales already does.

Finally, Clause 34 would abolish the dog licensing system. I emphasise the word "licensing" because it does not in any way attempt to abolish controls on dogs. It may well be argued that the existing powers for local authorities and the police to deal with dogs, and with the well-known nuisances to which they can give rise, are inadequate. Be that as it may, the only thing which Clause 34 does is to abolish what has become an anachronistic and expensive licensing system. It brings in about £400,000 a year in England and Wales while costing about £3.1 million to run.

Licensing, I would remind your Lordships, really plays no part in dog control. For instance, the legal requirement for dogs to wear a collar bearing the owner's name and address is entirely independent of the licensing system. It may well be that some of your Lordships feel strongly that the system of control on dogs is in need of overhaul and I would entirely respect any such views. But I hope I can persuade the House that views on that wider topic should not stand in the way of the minor and sensible piece of good housekeeping which is all that this provision represents.

This Bill's major provisions will focus the energies of those charged with the operation of our system of local government where I believe their energies ought to be focused: on the provision, free of inappropriate party political or other irrelevant considerations, of the good services which ratepayers have every right to expect. I believe that this objective deserves support and I beg to move that this Bill be now read a second time.

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

4.44 p.m.

Lord McIntosh of Haringey

My Lords, I rise to follow the noble Lord with mixed feelings. I must start by congratulating him sincerely on his new position and I hope that he will follow the example of his predecessor in introducing an element of moderation into Cabinet. I feel sure that he will do us proud in this House and represent our collective interests with great effect. He is followed in the environment portfolio by the noble Earl, Lord Caithness, who showed great skill in his conduct of the Criminal Justice Bill earlier this Session. I am sure that he will show equal skill in environmental matters, though I hope that he will show that skill to less effect. But I shall look forward to facing him across the Dispatch Box on, no doubt, numerous occasions over the coming months.

This Bill is of rather more importance than the House would be given to expect from the low-key introduction given by the noble Lord, Lord Belstead. This is, I am afraid, a further attack on pluralism in our society, a further attack on local government as an independent source of authority and an independent outlet for citizenship in our society. It is far from being the first. It is indeed the forty-fifth such piece of legislation in the period since 1979. It may not be the worst, but it certainly deserves strong resistance because of the tendency towards centralism which it continues.

As a result of this Bill we shall be taking away one more piece of the independence of local authorities. Local authorities will no longer be able to decide how to provide many of their services. Instead of being responsible, as they have been in the past, to the electorate—and that is the ultimate responsibility which local authorities ought to maintain as their principle—local authorities will now, in practice, be responsible to the Secretary of State.

It is not as if there were any real evidence, other than peripheral evidence, that local authorities were falling down on their duties in these matters. The evidence of expenditure as between local government and central government since 1979 has been that central government expenditure has increased by 127 per cent., while local authority expenditure has increased by only 103 per cent. If indeed any of these measures were to be taken on a rational basis, they would be imposed first on central government before any of these attempts to impose them on local government were made.

One suspects that the Secretary of State's perhaps jocund reference to local authorities lies more firmly behind the Government's actions here than would be willingly recognised by Government as a whole. The Secretary of State described his ideal local authority as one which meets once a year to award contracts, has lunch and then goes away for another year. I do not think that such a definition of local democracy will commend itself, certainly to my friends or, I believe, to a wide spectrum of opinion in this House which contains so many noble Lords who have direct experience of local democracy, who have experienced it in their own part of the country and who value the contribution which local democracy can make.

I turn to Part I of the Bill and to the compulsory tendering procedure. Our intention, as we proceed to consider this Bill in Committee and at later stages, will be to try to avoid the element of blind compulsion which lies behind this part of the Bill. This is not merely because the compulsory element is in itself objectionable in principle, but because in practice, as we can see from the fine print of the Bill, it will prove to be virtually unworkable. It will lead to innumerable more detailed powers for the Secretary of State, or rather for the officials of the department, who will be exercising these detailed controls on local authorities from a distance.

The principle behind this must be that if there is any opportunity whatsoever for local authorities to make their own decisions, responsible to their own electorate for the conduct of local authorities, they should do so. To provide for that in amendments would of course be to propose wrecking amendments and that is not what we propose to do. We do, however, propose that local authorities should have the opportunity to put forward to the Secretary of State local schemes for the implementation of Part I of the Bill—local schemes which will give provision for the timing of the tendering process, for the timing of the implementation, for the range of services to be covered, which recognise local conditions and are not simply imposed from Marsham Street. Such amendments would not damage the principle behind the Bill or the Government's intention. They would greatly increase the efficiency of the tendering process and the local authorities' responsibility to their electorates for the conduct of their services. Failing that—and I see no reason to suppose that we shall fail—we shall have to look at the tendering record more closely than the noble Lord was able to in his opening speech.

The record is not entirely as presented by the noble Lord. Many authorities, particularly Conservative-controlled authorities, have made a start in the privatisation of local authority services. What is noticeable is how, after the first flush of enthusiasm, that has virtually come to a halt, and 85 per cent. of local authorities still have not privatised their local services. That is despite the fact that rather more than 15 per cent. of local authorities are not controlled by the Labour Party.

I ask the noble Lord why there has not been a significant growth in local authority privatisation. For example, why has Gillingham Borough Council said that it will not proceed any further with privatisation "unless the Government so dictates"? It is because the record of success of privatisation is mixed. My noble friends and I will be able to show in the course of the discussions on this Bill that there are many examples not only of poor tenders being accepted, but of tenders producing bad services and of services having to be taken back into public control after the contractors' failure to provide the required level of service. This is quite apart from the fact that tendering has not led to real business competition.

In some of our services multi-national companies and large variegated companies have a dominant position; for example, BET has 62 per cent. of the privatised refuse and street cleaning market. The Hawley Group has 53 per cent. of NHS domestic services. However, that has not led to local enterprise as the Government intended when privatisation was introduced.

As I have said, the details of the tendering process will be unworkable. Let us look at the phasing-in procedure, to which the noble Lord referred, and the consultation paper which was produced in November for replies by the end of January this year. Should anyone look in detail at those proposals, with their complicated mixed list of local authorities in different parts of the country, they will see that the Government have produced a geographer's and a statistician's nightmare. There can be no rational justification for such detailed intervention. The tendering procedure does not allow for anything other than the whole of a particular service to be privatised at any one time. For example, there is no provision for sufficient resources to be retained by a local authority to deal with the emergency services, which are recognised in the Bill; to deal with defaults by contractors, which have been happening; or to deal with the monopolies or cartels of suppliers which have emerged. We shall be proposing amendments to ensure that a local authority which puts out services to tender has the opportunity and the authority to maintain a significant part of that service for such purposes.

When we come to the detailed list of services which must be privatised, we find ourselves up against a number of nonsenses proposed by the Government. For example, in Norwich, there is grassland beside the river. The first 10 yards alongside the river is the responsibility of the water authority. The next 10 yards is the responsibility of the city council, as the local authority, and the part further away from the river is the responsibility of the county council as the education authority. How are sensible tenders to be achieved for the maintenance of that piece of ground?

In the Grampians, the Grampians Regional Council maintains quarries which supply its road maintenance and road construction work. The men who work in those quarries not only work in the quarries but are available for the winter maintenance services, which are essential in that part of the country, and provide emergency services. Should a tender go for the operation of the quarries, without regard to the requirements of the emergency services—it is difficult to see under the Government's proposals how they can be taken into account—the benefit of the division and the flexibility of labour which the Grampians Regional Council has will be lost.

Fire vehicles are a grotesque example. As every one knows, the up-to-date and immaculate repair and maintenance of fire vehicles is essential to the fire service. Indeed, there are statutory obligations upon the fire service to provide that quality of control. In addition, there is a huge variety of fire vehicles with which many contractors could not cope. They contain specialised equipment and fittings which only those in the fire service know how to operate. What will happen if there is compulsory privatisation of the repair and maintenance of fire vehicles? I suggest that many fire authorities will be unable to fulfil their statutory obligations.

Let us take a service, which although it consists of single caretakers and cleaners, is large. There are many such people, and there could be enough in total to bring them above the de minimis rules which the Government propose. Can anyone imagine an effective private contractor providing single caretakers and cleaners? It seems inconceivable to me.

The list of services goes far enough. Some noble Lords might say it goes too far. But in addition Clause 2(3) provides that the Secretary of State may add to and change the list virtually at will and at any time. I do not wish to go into detail about the other services which could be added, but I want to ask the Minister one point. There has been much talk about the addition to the list of sports and leisure services. This has caused great alarm to the Sports Council, the Amateur Athletic Association, the Amateur Swimming Association, cricket, netball and other sporting authorities which have no doubt been as strongly in contact with the Government as they have with noble Lords on this side of the House. Is it the Government's intention to include sports and leisure in the Bill's provisions? If it is, will the noble Lord assure the House that he will bring forward such amendments in Committee so that we can kick them straight out again? Or, will he say that the provision of sports and leisure facilities by local authorities is safe from this vandalism?

I do not wish to spend too much time on Part I. The de minimis provisions are unsatisfactory. They apply to services but not to authorities which would have great difficulty in dealing with them. We shall propose amendments to exempt the Highlands and Islands Council and parish and communty councils from the Bill's provisions.

I turn now to contract compliance. This is not a loony-Left idea. Contract compliance flourishes strongly in the United States where the Federal Contract Compliance Program of the Republican Government—this is a Reaganite programme—applies to 300,000 companies and 41 million employees who supply the United States Federal Government. There are many examples of it being an acceptable procedure here. That is evidenced by the letter in July last year from the noble Lord, Lord Sieff, of Marks and Spencer to the Independent which claimed that it found it necesssary to discuss, and encourage a number of its suppliers to install decent working conditions and opportunities. When Marks and Spencer say "encourage", it is not saying, "Yes, you be good boys"; it is saying, "You do not get the job unless you impose decent working conditions". There is plenty of precedent in this House. As long ago as 1891 the Marquess of Salisbury, in introducing the fair wages resolution, said that it was appropriate to make every effort to secure payment of such wages as were generally accepted as current in each trade for competent workmen. There are much more up-to-date examples. In Northern Ireland, for example, the Fair Employment (Northern Ireland) Act 1976 provides for regulation to protect equality of religion in the public service.

There are six issues on contract compliance which we shall seek to change in Committee or at later stages. We are grateful for the amendment made about race relations. We think that it is some improvement on the present situation, as the noble Lord said, although it appears to centralise race relations legislation. The intention was to have a more flexible instrument. We shall seek its extension to sex discrimination and to the proper provision of jobs for the disabled.

We shall certainly seek to see that training is not treated as a non-commercial matter. The Government have gone much further than exhortation in training. They seek in many respects to ensure that employers take adequate account of the need for training; and that is also proper for suppliers to local authorities.

We shall seek to change the exclusion of fair wages and terms and conditions of employment from the commercial matters that may be considered by local authorities. It is not good enough for the noble Lord to say that local authorities can make inquiries. They must be able to do something as a result of those inquiries if there is to be any effect.

We shall seek to remove exclusion of country of origin from the considerations which local authorities may take into account. Many local authorities in this country, not only out of conviction of the councillors but in relation to the make-up of the population of their areas, have decided to ban goods from South Africa. It is not compulsory on them to do so, but it is proper that they should have the right to do so if they wish. It may well be appropriate not simply as a gesture of principle but as a necessity for the preservation of good race relations in the area.

We shall seek to overturn the provision which says that the use of local labour is not a proper consideration for local authorities. Other departments of government have already recognised that the use of local labour is an appropriate consideration. It is one of the considerations taken into account in EC regional policy, for example, by Birmingham City Council. It is proper that local authorities should take that into account as well.

As to Part III of the Bill, we can, I believe, consider our position and wait for the much more substantial Housing Bill which has started its course in another place. As to Part IV, we are concerned first with the issue of publicity. This House took the view only a short time ago that proposed controls on local authority publicity were not acceptable. The Government took a different view. We do not propose necessarily to go back to the original wording. We are conscious that the decision as to whether local authority publicity should be judged by its intention, its nature or its effect is a complex issue. But it is worth noting that the Government are not following the special interim Widdicombe Report in this matter.

It is interesting that no attempt was made by Ministers in Committee in another place to give any examples of abuses following the enactment of the last Local Government Act. Indeed, the Minister of State said specifically that he was not going to do so. In the absence of such examples, is there any real justification for tightening the law further?

We recognise that the fifth draft code produced in November last year is a substantial improvement on previous codes, although the local authorities have their own alternative codes. But we find it basically unacceptable that codes produced by the Secretary of State which can he varied at any time by the Secretary of State should be enforceable on local authorities. That is what the phrase "have regard to" means and that is the way in which it would be interpreted in the courts. So we shall certainly seek to change the status of those draft codes and to restore to local authorities the right to impose their own codes, even if the Secretary of State then has to look at them and judge them.

I come now to a matter of great delicacy, the question of Clause 28 on the promotion of homosexuality. I do not believe that local authorities should be promoting homosexuality either in their schools or in any of their other services. In that sense I agree with my noble friend Lady David when she spoke of' the Bill of the noble Earl, Lord Halsbury, a little over a year ago. However, the amendments included in the Bill come very directly up against the comments of the noble Lord, Lord Skelmersdale, when he responded to the proposals in the noble Earl's Bill in December 1986. For example, the word "acceptability", he said, was one that could occupy your Lordships sitting in your judicial capacity for hour after hour. The noble Lord said there was a risk that any teaching about homosexuality would effectively be outlawed. The Government's policy was that schools should be prepared to address the issue of homosexuality in a balanced and factual manner appropriate to the maturity of the pupils concerned.

The noble Lord added that he feared that the distinction between these abuses, which he had been talking about and which were the subject of debate then, and proper teaching about homosexuality, could not be drawn sufficiently clearly in legislation to avoid harmful misinterpretation. He declared, at col. 336: That is a risk which we cannot take". As I have said, this is a delicate subject. Amendments were put forward by Mr. Simon Hughes and the official Opposition in another place and I shall be asking my noble friends to support those amendments, I believe that their intention is to lessen the risks to which the noble Lord, Lord Skelmersdale, referred.

I must also tell the House my personal view. It is that the damage done by this clause is too great to be dealt with by such amendments. My personal view is that if any noble Lord decides to cause a Division on whether the clause should stand part of the Bill, I will go through the Lobby in opposition to the clause in this Bill. I believe that there is a risk of a backlash against homosexuality in this country, not against abuses of homosexuality, but against homosexuality as a whole which is a part of our national life and of our artistic life, whether we like it or not. The risk of such a backlash is too great to be taken. And the risks of the words in the clause as drafted are too great. This is not a matter for party division. But it is something which we must face up to in our consideration of this clause.

I come back to the issue of tendering and to the main thrust of the Bill. John Ruskin said that there is nothing in this world which some man cannot make a little worse and sell a little cheaper and he that considers price only is this man's lawful prey. He had the misfortune to be quoted as saying so in a plaque above the fireplace in the Electric Lamp Industry Council, which was one of the worst cartels in British industry. Nevertheless, what he was saying is true. If we go only for the lowest tender—and the noble Lord went closer to the lowest tender approach than I thought he was going to—then we risk a degradation of our public services. We risk a far too narrow interpretation of value for money. We risk losing sight of the wider business principles which ought to govern local government. This is part of a vendetta against local government in this country and the concept of service which local government has had for well over a century.

I hope that the Bill will not go through without substantial improvement. It certainly needs it.

5.9 p.m.

Baroness Stedman

My Lords, I, too, would like to begin by congratulating the noble Lord, Lord Belstead, on his new appointment and wishing him well. I should also like to say how much we look forward to dealing with the noble Earl, Lord Caithness, on local government and environmental matters in the future.

As the noble Lord, Lord McIntosh of Haringey, has said, we have already had 46 local government Bills in the eight years of this Conservative Government and there is at least one more to come in the form of the community charge. That is something like five, six or seven local government Bills in every Session since this Government came into power. All those Bills have led to interminable changes in local government finance, to endless complicated mathematical formulae and to unprecedented ministerial interference and massive loss of freedom for the locally elected councils.

Still the Government go on to claim that local government is inefficient and to argue that the Secretary of State must take still more powers unto himself. That is an insult to the thousands of local government officers and elected councillors who know and understand the problems and the needs of effective local services. The Widdicombe Report stated that: efficiency is concerned solely with output, but effectiveness is concerned also with the meeting of needs". Local government must have the right to voice the concerns of its community and, when necessary, to criticise central government when those central policies adversely affect the local area, the local community or the local electors.

Not only all the Opposition parties but I suspect perhaps some of the noble Lord's friends on the Benches behind him and all the local authority associations oppose this Bill. The associations know a very great deal about local government and they oppose the removal of yet more powers from locally-elected members to the Secretary of State. I agree with the Government, and have done over all these years, that local government must be accountable but that accountability should be to its local electors, its local communities and not to the Secretary of State and to Whitehall. Accountability to Whitehall or to Marsham Street is not acceptable to most local councillors.

I served in local government from 1945 until I came to this House in 1974 and at no time in that period can I remember all the local authority associations being united in opposition to the government of the day. Yet in the past eight years this Government have achieved what many of us at that time thought was nigh impossible. They have united the four local authority associations on most of the 44 Bills that they have introduced. Those of us who have been closely associated with local government know that most councils have been constructive and energetic in spite of the restraints that have been continually imposed upon them by central government. They have administered the major services to some 35 million people. But I believe that the time has come for the local councils at every level and for all those who value and believe in local democracy to go on the attack. We have been on the defensive for much too long. Local government has to assert that choices have to be made on the value of results. Local authorities must also know what effect their assessment of the value of results will have on the welfare of their electors.

From these Benches we shall help local government to fight to keep its freedom and we shall oppose any more bureacratic centralisation. Widdicombe argued that the value of local government stemmed from its three attributes of pluralism, responsiveness and participation. The old balance between central and local government has gone but we cannot go on riding roughshod over a system of local government which has served this country well for over 100 years. It was John Morgan, the former chairman of the Association of District Councils, who summed up the local authorities' attitudes when speaking at his annual conference. He said: We are not afraid of change. We are only afraid of the consequences if the legislation has not been properly thought through". That is the trouble once again with this Bill. The ultimate responsibility for services and for delivery should remain with local government which should be accountable to the local electorate for the extent, the quality and the costs of those services.

We know that refuse collections, Meals on Wheels, school meals, street cleaning, school cleaning, parks' maintenance and the repair and maintenance of vehicles are all specifically affected in this Bill. The Secretary of State can add to this list as and when he pleases by order.

I do not believe that local authorities oppose the use of competitive tendering to gain increased efficiency, economy or effectiveness but they are opposed to compulsory competitive tendering. The privatisation of local authorities' services to date has not always been good and in many cases it has led to poorer standards of service, a decline in jobs, in pay, in conditions for the workers and in health and safety. I do not think that that is a very encouraging platform from which to launch a programme of compulsory privatisation as detailed in this Bill. No one will defend poor services, inefficiency or waste, but there is no evidence that enforced privatisation or enforced competitive tendering will deal with that. Where, for example, in this Bill do local authorities have the right to make contractual jobs available to local labour? What were the responses to the Government's Green Paper on competitive tendering? Will they be published and will we know what they were? We all know that the local authority associations were completely opposed to it, so on what evidence are the Government persisting in going down this road? Where is the evidence of better services and better saving? Indeed how can one make a valid comparison between the work carried out by the private sector of the construction industry and that of the direct labour organisations?

As defined in Schedule 1 the "cleaning of buildines" does not include cleaning of the exterior other than the windows. "Other cleaning" includes only the removal of litter from land, emptying the litter bins, cleaning the streets, clearing the snow, emptying gullies and cleaning traffic signs and street names.

Further on in the schedule the "maintenance of ground" means only cutting and tending grass, and re-turfing and re-seeding but not first turfing and seeding. Planting and tending hedges, trees, shrubs, flowers and plants is included but not landscaping. Who does the initial work? Will the authorities be able to do it themselves? How will that be handled?

On the maintenance of vehicles, as the noble Lord, Lord McIntosh of Haringey, asked, why are police vehicles excluded from this? As a former fire service officer I am concerned about what will happen to the fire service vehicles and to its equipment. We shall need to look at competitive tendering as it affects the parish, the town and the community councils. Do the tendering rules need to be extended to them? I do not believe that there is any benefit in bringing these councils within these roles. They are not organised on departmental bases based on functions. They do not have a large workforce and they operate primarily in rural areas. If they are to be obliged to submit to compulsory competitive tendering, their costs will increase and their workforces will have to be enlarged.

We must consider that total parish expenditure is an insignificant part of the total of local authority expenditure—somewhat less than 1 per cent. of the national local authority total. Other concerns are also being expressed about what other services might be added to Clause 2. Not least among those is the deployment of the architectural services of the local authorities on which the Royal Institute of British Architects has some very clear views.

As the noble Lord, Lord McIntosh, has said other authorities, such as the Grampian Regional Council, are worried about the possible dangers to the future of their old established quarries. They believe that quarry operations should never be included. If they are added at a later stage they will have a detrimental effect on the general price level as well as threatening the ability of the councils to discharge their maintenance functions and to deal with other emergencies.

Concerning contract compliance, I shall content myself today with saying that I think it is a retrograde step. To ban it will threaten basic good employment practice in the country. All contract compliance means is that the local authority asks its contractors and suppliers to meet the same high standards which that authority itself aims to meet. Those are standards which will guarantee proper conditions of trading for the workers and a decent pay structure, which will not accept discrimination by race or sex and which will provide employment for local people. If the proposals in the Bill are accepted, it will be very difficult for councils to prevent cowboy contractors from getting jobs.

Turning briefly to publicity, in considering Clause 27 one sees that there are two changes to the Local Government Act 1986. The first introduces another test of what is political publicity with the likely effect of publicity on those to whom it is directed having to be taken into account. The second change concerns whether the material promotes or opposes a point of view on a question of political controversy which could be identifiable as the view of one political party and not the other. Given the nature of adversarial political debate in this country, that is a catch-all provision. It will make difficulties for members of local authorities and even for the local authority associations which act as the collective voice of local government.

The Minister went into some detail as to why those proposals had been altered. However, local government must be able to speak to the people it represents and for the interests of its area. That often falls into the political area of controversy, such as questions of who take over new town housing, the implementation of the right to buy and, in due course, the introduction of the community charge. That part of the Bill seems to be aimed at preventing local government from voicing views on any of those matters. If the clause remains, I see it as a source of controversy and contention for many months to come.

The local authority associations have a unanimous and quite straightforward view. They say that they know of no evidence that councils are breaking the recent Act. Therefore, unless the Minister can give us that evidence, what justification is there for change? Why cannot the Government accept the Widdicombe view and have a code of practice which is self-regulating? I am sure that the associations could agree on such a code voluntarily and without the Secretary of State having to issue a statutory code.

As the Bill stands at the moment. I believe that the Government intend to suppress dissent to the extent that no one can attack or criticise the Government without being in fear of court action. Yet this Government have spent a tremendous amount of taxpayers' money directly or indirectly on privatisation and advertising. The number of glossy documents which were produced in the weeks prior to the general election which lauded Government achievements, department by department, was quite unbelievable. If the Government can get away with spending such large sums of taxpayers' money in that way in order to advance their objectives, then local authorities must have the right and freedom to do the same. Local councils must be able to exercise their own judgment about information and publicity issued to their electors without those unnecessary restraints being imposed by the Government. Let us at least have the same rules for local and central government.

Your Lordships will also want to look at the new clause on promoting homosexuality. There is a lack of clarity in the wording of Clause 28. The word "promote", which appears twice, can mean either to push forward and encourage or to increase understanding. As Iread it, anything done to inform people about who or what homosexuals really are could become an offence and could make any attempt to counter prejudice and fear illegal. That clause might also affect any grant aid from local authorities for promoting advice centres on homosexuality. Those centres would be seriously at risk, and they are doing a very good job at the moment. It is wrong to discriminate against homosexual people and my colleagues will want to return to that clause at the Committee stage.

Finally, I believe that it is the wrong decision to abolish the dog licence. That may seem to be a trivial thing in a bill dealing with such matters. However, we all know that the present 37½p fee is ridiculous. That is no reason to phase it out altogether. There are many problems with dogs and with strays. Dogs can cause road accidents, run livestock and foul pavements in recreational areas. As the Minister has said, the present licensing system produces no control of dogs. Surely it would be more sensible to put up the licence fee to a realistic level and to use the money to fund dog-warden schemes and to improve the control of dogs.

I end as I began; 45 Bills in eight years has been a traumatic experience for local government, for those who administer it and for those who work in it. May we please have a period of peace. Let us look at the structure, functions and financing of local government into the 21st century and beyond. I and others have argued that over the years. Every one of those 45 Bills has tinkered with some part of local government and upset the balance in other parts. Local authorities are made up of perfectly reasonable and sensible people who are able to debate the issues and make the appropriate local decisions. That is their job as locally-elected councillors. Just because a few extreme Left-wing councils have gone overboard on some of the issues is no reason why all local authorities should be penalised.

There used to be a famous election slogan: "Give us the tools and we will finish the job". I urge the Government to give back the tools to local government, to have confidence in the elected councillors and not to take away power after power from local authorities and give them to the Secretary of State. Westminster does not know best; it never has so far as local government is concerned. May we please stop pretending that it does. It only makes life unbearable for those bearing the brunt of central government policies at the grass roots of local democracy.

5.30 p.m.

The Lord Bishop of Manchester

My Lords, I imagine that the Minister may have rather mixed feelings about the various congratulations which have been poured on his head. The task which he is undertaking is seen to be, from some points of view, a real bed of nails. However, I have no doubt that he has a tough hide and I join with others in wishing him well in the months and years ahead.

I think that, as has been said, the Bill can only be seen in the general context of the importance of local government in Britain today and the enormous pressures to which it has been subjected. We have had local authorities up and down the country controlled by various political parties, with control changing hands from time to time and with councillors who admittedly are often elected by a small proportion of the electorate. Yet they are a real and important expression of local democracy. The quality of those who have been prepared to give time to serving on local councils has generally been high. I know that there have been exceptions and occasionally there has been incompetence or even corruption. However, on the whole the quality has been high.

The same surely applies to many public servants in local authorities who are prepared to give their careers and their lives to serving people in that way, as well as to earning a living. There is a great danger of an upset in the whole balance between central and local government. As the noble Baroness, Lady Stedman, has said, that has become a matter of deep concern. I believe it cuts across party lines. I defy the Minister to deny that morale in local government up and down the country is now very low. People must have a conviction that what they are doing is worth while, and that they have real powers of decision-making which affect people's lives. That is the context in which the Bill must be seen. Will it help the functioning of local government or not? I believe that on balance it is most unlikely.

The point has already been made that there have been a number of Bills directly concerned with local government and the diminishment of its powers. But those measures which have already come before Parliament are not the end of the matter. There is also the Bill concerned with education and the housing Bill, which have very important implications for the whole field of local government. There is a widespread feeling that somehow the Government has been panicked by small numbers of councils on occasion taking extreme action.

I appeal to central government at this point to be more positive in their attitude towards local authorities, not least in the programmes which are now being put forward to regenerate the inner cities, where I believe that co-operation is absolutely vital.

We have very limited time this afternoon and there are a lot of speakers, so I shall try to confine my remarks to just a few points about the Bill in general. The Minister said that Clause 1 was probably the most important as it would have the most far-reaching effects. Opinions may differ about that. I would simply say that the promotion of competition can be very good in certain circumstances. I believe that we are all as much in favour of promoting efficiency as I hope we are against sin. However, there seems to be on the part of the Government a mystical faith in the promotion of competition and privatisation which is not always borne out by the facts, by any means. Also, it seems to me that your Lordships should be aware of the dangers which can come in our country to the lowest paid sections of our society where policies of competition are pushed forward vigorously. They should only be pursued in this way provided there is equal importance given to the evidence of wages councils and to the protection of the low paid.

I turn to the section on the prohibition of political publicity by local authorities. Surely there is great danger in the way in which the clause is drawn, in that perfectly legitimate information about what a council is doing might get caught in that particular net. Local authorities need space, money and encouragement to publicise the activities which they quite legitimately carry out.

Let me give an example which some of your Lordships may consider extreme. Suppose at some point in the future a political party in this country did not believe—and God forbid it—in the provisions of free public libraries but believed that they should be paid for in all circumstances and operated privately. If this proposal were put forward by a political party in this country, would it mean that a local authority would fall foul of this proposed legislation because it was promoting its local library services? 1 should like to know whether there would be a danger of that kind.

I should like to add to the point that has already been made. How is it possible to dissociate political views from policies at local level and not do so nationally as well? Political programmes and services to the public are very often deeply intertwined with political philosophies. It is hard to get away from that fact. I hope that this particular clause will be looked at most carefully because I think it could lead us into great problems in the years ahead.

So far as concerns the clause about the purchasing policies of local authorities—namely, Clause 17 and the whole issue of contract compliance—I believe that there are ethical considerations which enter at this point. It is an important part of the freedom of local democracy that there should be a vigorous debate on national and international ethical questions at that level too. Let us take the question of South African goods, which is the most obvious example. It is the view of many people in this country that boycotting South African goods and bringing substantial pressure on British companies which have big commercial involvement in South Africa is virtually the last way to exert pressure from outside the country on what is happening in that tragic situation. It seems to me to be a great mistake to put pressure on local authorities when the debate has proceeded at local level and when they have taken such views—and let me emphasise that among the 160 local authorities there are several which are Conservative controlled. It seems to me to be a mistake to restrict their freedom in that way.

The noble Lord, Lord McIntosh, when speaking about Clause 28 on the promotion of homosexuality, emphasised that this is indeed a very delicate matter. I think your Lordships would expect some comment from the episcopal Benches on this matter. We have been agonising over this problem in the Church of England recently. Perhaps I may quote something which the most reverend Primate the Archbishop of Canterbury said to the General Synod in the debate in November. Dr. Runcie said: I cannot accept the extreme claims that homosexual unions are simply alternative lifestyles to Christian marriage…It is our duty to teach the Christian ideal to our children and not confuse them with options. But, while there are both homosexual and heterosexual people whose conduct is undisciplined, self-centred, and out of control, questions arise over our response to homosexuals who are seeking to behave responsibly towards other people who are not sleeping around, not molesting children, not breaking up other people's marriages and friendships. In the face of much cruel prejudice I want to insist that to be homosexual by nature is to be a full human being. We need to listen to what such homosexuals say about their situation". Those words were, I believe, endorsed by the vote in our General Synod. That vote was overwhelming, and alternative votes to try to pronounce a tougher policy, or indeed to give a greater freedom simply to promote homosexual lifestyles alongside marriage, were not accepted. I think that that is an illustration of the difficulty of legislation in this field. The fear about this clause is that the word "promote" could be open to wide interpretation, and the point has already been made.

Members of your Lordships' House should be aware of the terrible dangers of encouraging prejudice in any form. On the whole, while I believe that it is important to witness to true and proper lifestyles, especially in marriage, and not endorse what is often claimed for practising homosexual lifestyles, I should regret it if this Bill were to go through with this clause unamended. If it were to do so, I think it should certainly be confined to schools because otherwise there would be a real danger that some organisations which do good work in helping those with homosexual orientation, psychologically and in other ways, would be very much impeded.

I hesitate to turn to that very weighty and important question of dog licences just before I end. Perhaps as a dog owner I owe it to my own dog to do so. I simply say that I believe that we are making a wrong decision at this point. I think that there is an opportunity to do much more in the field of proper control of dogs. We need to have a much more humane attitude and a more disciplined control of dogs in our society, and there is no reason why a substantially increased licence fee should not be used towards that end.

I come back to the point at which I began. We must see this Bill in the whole context of the very great pressures on local government at the present time. I hope that the Minister, when he comes to reply, will say something encouraging in that context.

5.40 p.m.

Lord Boyd-Carpenter

My Lords, the noble Lord, Lord McIntosh of Haringey, in his peroration described this Bill as part of a government vendetta against local authorities. He suggested that this was so with apparently great sincerity. I must put this aspect of the matter to him. It is surely beyond dispute that some local authorities—I say at once not the majority—have been indulging in abuses of one kind or another: of power, in the use of ratepayers' money, and in the propagation of wrongful ideas.

It appears the noble Lord feels that the government of the day should do nothing about it. Any government who saw what was happening in certain local authorities and then turned and washed their hands of the whole matter would be the proper subject of public contempt. Local government is a matter of great national importance. It has not already been mentioned in this debate but it is a fact that local authorities are responsible for 25 per cent. of total public expenditure. It is also true that they are responsible for some of the most vital of our services: the administration of education, and, outside London, the administration of the police.

It seems quite extraordinary when one is faced with certain abuses, certain wrongful acts, by a substantial number of local authorities, that the Official Opposition in this House should take the view that the Government should do nothing about it and just let these abuses go on. I cannot help feeling that if the Government had followed that course the noble Lord, Lord McIntosh, and his colleagues would have been full of denunciations, asking why they had not grappled with the matter. As it is, it would seem to most moderate-minded people that the Government are bound to try to tackle these abuses. Whether in respect of each abuse and in each clause they have the balance quite right is obviously a matter of legitimate argument. But to argue, as the noble Lord seemed to do, that the Government should do nothing puts the noble Lord and those for whom he speaks in a very curious position.

Lord McIntosh of Haringey

My Lords, the noble Lord is quite clearly repeating himself in order to tempt me to my feet. The issue before the House is surely whether the proposals in this Bill are likely to achieve the improvement of public services, and whether Whitehall—government—are a better judge of what are abuses and how they are to be overturned than the local electorate, to whom local authorities are responsible. That is the issue with which this House is faced, not the alternative of doing nothing, as the noble Lord puts it.

Lord Boyd-Carpenter

My Lords, I have two comments on that. First, the noble Lord attacked what the Government proposed, and put forward no alternatives. Secondly, he is quite wrong in saying that the Bill seeks to put the wishes of Whitehall on top of those of local authorities. It is not Whitehall that is enacting this; it is Parliament, elected by all the people. It is Parliament, the other place, elected by all the people, that has sent this Bill to your Lordships' House. No doubt it is good to stir up prejudice by talking about Whitehall, because it is very easy to laugh at bureaucracy. I agree that sometimes it is no laughing matter. But to do so is quite misleading. When there are real abuses of this kind it is the duty of Parliament to seek to deal with them.

As I understand it, that is the reason for this Bill. We all know that there are quite a number of excellent, well-run local authorities that could continue to function admirably in the interests of their population for an indefinite period. But it is impossible to dispute that there are a number of local authorities, including—if I may be personal—the local authority from which the noble Lord takes his title, whose abuse of power is manifest and which it is the duty of government to deal with. I wonder whether this represents the official attitude of the Labour Party. I should like to doubt it because I always bear in mind the good advice given in one of Saki's novels by one lady to another. One lady said to the other, "One should always be deferential to the leaders of the opposition". "I see", said the other, "You mean, because they may one day lead the government?" "No", said the first, "It is because they may one day lead the opposition". That is the state of affairs with which I think we are confronted in this country today.

Perhaps I may take first the relatively small item which has been criticised. I join with the noble Baroness, Lady Stedman, and the right reverend Prelate the Bishop of Manchester, in the criticism. Of course it is nonsense to go on collecting a tax which costs £3 million to collect and to receive only £900,000. This is a lunatic state of affairs. But is it right to remove the measure of control which dog licences have exercised on dog ownership? The alternative is to increase the charge for the licence to a figure that at least would cover collection. I have only this afternoon received from the Country Landowners Association a strongly-worded memorandum saying that it, together with a number of charities and organisations, is concerned about the implications, because while the Government is seeking to abolish this duty it is not putting forward any positive alternative suggestion to control and alleviate many of the problems associated with dogs in the countryside, eg livestock worrying", and so on. I hope that the Government will give a little further thought to this. Simply to abolish a wholly unremunerative tax obviously makes sense. But whether to remove any control over the ownership of dogs is a sensible thing to do at this time is at least a doubtful proposition to which I hope the Government will give further thought.

I come now to Clause 28. As the noble Lord, Lord McIntosh of Haringey, said, it is a delicate and sensitive matter. It is the question of the promotion of homosexuality by local authorities. The promotion of the idea in schools that homosexuality is a way of life of equal merit to the more normal habits and standards of our fellow countrymen is most dangerous. To put it brutally, I think that it is wrong to put ideas of this kind before young people. It is necessary to legislate because quite a number of local authorities are doing just that. I have armed myself with the facts. If the noble Lord will forgive me, I come back to Haringey, which has planned to introduced positive images of gays and lesbians into the school curriculum despite fierce opposition from parents and some teachers. Is that defensible?

Lord McIntosh of Haringey

My Lords, I do not think it would be defensible if it were indeed the case. But the noble Lord has improved on previous statements about Haringey by admitting that Haringey Borough Council planned to introduce such positive images. Those plans were subject to negotiations with parents and governors. As the noble Lord might expect, they have been widely disliked and resented. The result has been that those plans have never been implemented and there is no immediate prospect of their being implemented.

Lord Boyd-Carpenter

My Lords, does the noble Lord defend those who put forward plans of that kind?

Lord McIntosh of Haringey

My Lords, I have made it clear that I am not in favour of the promotion of homosexuality. That applies at Haringey and elsewhere.

Lord Boyd-Carpenter

My Lords, the noble Lord has said that. He has also said that he will vote against the clause. Therefore there will be no legal sanction to prevent this kind of action being repeated in this borough and several of the other boroughs. Brent has authorised a display of gay books. Among the books is How to be a Happy Homosexual. In Haringey, there is talk—perhaps the noble Lord will say whether this has been dropped—about having a Gay Pride Week in primary schools. Lambeth council is considering making gay books available in children's homes. This was stated in the South London Press as recently as 1st December. The noble Lord is up against this dilemma. If he intends to vote against the clause, this kind of thing can go on and can be repeated in other boroughs where similar ideas prevail. Surely the noble Lord feels as I said and as he has just said and as the parents in Haringey reacted, that this is a wrong and indeed very wicked thing to do.

If an argument is sought as to why it is necessary to introduce restrictive legislation on local authorities, as the Bill does, one can hardly have a more vivid example than that. The choice before your Lordships when we come to that clause will he quite simple. Do you prefer the clause or do you prefer to allow the promotion to young children of what many people, the Church included, regard with disapproval? Are you prepared to legislate to stop it and to make it illegal?

The Lord Bishop of Manchester

I hesitate to interrupt the noble Lord again. I know that he has had a number of interruptions. Will he accept that there is a middle path between doing nothing and enacting legislation; namely, that these things are often fought out on an individual level by pressure from parents and in other ways?

Lord Boyd-Carpenter

It is all very well for the right reverend Prelate to say that. I have quoted several examples where, whatever the parents' reaction has been, it has happened. Therefore, it is sheer wishful thinking on the part of the right reverend Prelate to imagine that it can be prevented by anything except legislation. I am surprised and sorry that he does not take, on this matter, the more robust attitude in respect of clergy that has been recently taken by his brother the Bishop of Ripon who has been quite emphatic and clear on the ordination of practising homosexual clergy.

The Lord Bishop of Manchester

The Bishop of Ripon was speaking essentially about ordination to the priesthood in the Church of England. I fully support him on that.

Lord Boyd-Carpenter

I am delighted to know that the right reverend Prelate supports that. He did not go out of his way to say so in his speech.

Lord Mackie of Benshie

I hope that the noble Lord will permit me to interrupt again from a different angle. One agrees that the problem he is talking about is not acceptable. Surely, however, the whole point is that the word "promotion" can be interpreted in many different ways and there is need for redefinition.

Lord Boyd-Carpenter

Of course, "promotion" can be treated in different ways. If the clause becomes law it will be a matter for the courts to interpret in the sensible way in which the courts do interpret the law. The fact that legislation always presents difficulties—the noble Lord knows that as well as I do—is surely no reason why the legislature should refrain from legislating when there is a real evil, as he admits there is, and which, as I have already suggested to the right reverend Prelate, cannot be dealt with other than by legislation.

I pass on quickly to another topic which I believe relevant: political propaganda on the rates. It is difficult, I accept at once, to draw exactly the right line. It is a great pity that certain local authorities have gone so far beyond any reasonable line in putting forward political propaganda that it has become necessary once again to restrain them by legislation.

The right reverend Prelate, the Bishop of Manchester may have noticed that the city of Manchester, the headquarters of his diocese, has spent £500,000 of ratepayers' money on promoting the idea of a nuclear-free Europe. Whether that is a good or bad idea, with great respect is not a matter for a local authority; it is a matter for central government. It seems to me quite wrong for a local authority to spend money raised by rates for local purposes on promoting political ideas of that kind.

No doubt members of the city council sincerely believe in the idea. That city council, I know believes in a lot of silly things; so it is probable that it believes in this, but a great many of its ratepayers do not. If ratepayers want to promote the idea, that is a matter for them to promote with central government. If ratepayers' money is to be used for the promotion of blatantly national and party-political issues of such a kind, we are going far beyond the proper scope of local government. That is why I venture to say that the necessity for the legislation, which I and, I believe, all your Lordships regret, is because a number of local authorities have gone beyond their legitimate sphere of action.

The only other political topic to which I refer is the introduction of a political factor in the awarding of contracts. As already mentioned, some 40 local authorities have warned possible contractors that because they have contacts in South Africa they may be ineligible for those contracts. Five local authorities have warned contractors that because they serve the British nuclear missile industry they will be ineligible for contracts with the authority. That, surely, cannot be right. The duty of a local authority is to place the best contract it can in the interest of its ratepayers so that they will get the best value for money. To pursue the political views of whatever happens to be the majority party in charge of the local authority to the extent of victimising companies whose other associations, irrespective of the contract, it does not like is surely an abuse of the duties of the local authority. If it will not desist—the numbers quoted show that a great many will not—it is necessary to legislate.

The Bill is necessary. As I have already said—I think most of your Lordships agree—we regret that necessity. We regret having to take up parliamentary time putting right the mistakes, errors and prejudices of a limited number of local authorities. That does not mean that we do not recognise that the great majority of local authorities are manned by honest and honourable people seeking to do their duty in the best interests of those whom they represent. But, in a system such as ours, one cannot simply rely on the fact that good and responsible people are in the majority. You have to deal also with the black sheep. For that reason, because it is a Bill for the putting down of abuses which have dimmed the fair name of local government, I hope very much that the Government will persist with the Bill. I suggest to your Lordships that faced with the facts as they are, the Government could do no other.

5.58 p.m.

Lord Bottomley

My Lords, I warmly congratulate the noble Lord who opened the debate on his elevation to the Leadership of the House. It is pleasing also to follow the noble Lord, Lord Boyd-Carpenter. Upon the occasion of my maiden speech, the noble Lord followed me. He was very generous in his tributes to my comments. I value even more his comments having read in a recent publication that the noble Lord is one of the hardest working Members of the House.

There are four basic principles which should he fulfilled by democratic government. Democratic government should express the will of the people and should respect the rights of minorities. Those representing the people should be elected periodically. It should afford the maximum participation by all electors in the functions of central and local government. Local government provides better opportunities for this to be done than does central government.

There is a limited number of people who can represent the electors in the Westminster Parliament, whereas in local government there is widespread representation. The personal contact between the electorate and their local government representatives is inevitably closer and more frequent. Local authority members, whatever their party affiliations, are well able to debate issues and to make appropriate local decisions without interference from central government.

There is much to be said for the statement that those seeking election to the House of Commons should have experience of local government. Local government is an excellent training ground and many statesmen, such as the Chamberlains and Herbert Morrison, received their basic training in local government.

This Local Government Bill continues a sustained attack upon local authorities since 1979. The Government have returned with a vengeance to their policy of curtailing the power of democratically elected local authorities. The Bill, with which the Government is determined to press on, forces local councils to invite tenders from private contractors for a wide range of local government services. They have already been mentioned and I shall not repeat them. Those essential services have been carried out efficiently and successfully by democratically elected councils. If the ratepayers were not satisfied with the standard of service that they received, they were able to show that at subsequent council elections.

Ratepayers will not be able to exercise those powers in respect of private contractors. There is growing indignation and discontent in many local government areas where private contractors are at present running local government services. Two large companies dominate the control of local government services. I suggest that their activities should be investigated by the Department of Trade and Industry to see whether they conform to British and European law in respect of monopolies and mergers.

If the Bill becomes law an absurd situation will arise in the case of Ealing Borough Council. By undercutting the direct labour bid, one of those large contractors took over street cleaning. As a result, the cost-cutting process led to falling standards. The contractors reduced the number of employees from 128 to 80; the number of vehicles was reduced from 57 to 37; and wages were cut between 25 per cent. and 30 per cent. In the first year of the contract 3,240 complaints were registered by ratepayers. The company failed to make a profit and it withdrew from the contract. Since that time the council has been running its services very well indeed. However, under the terms of the Bill Ealing ratepayers will have to face the cost-cutting trauma yet again.

Can the Minister say why it is that Middlesbrough Council must seek contract for refuse collection and street cleaning on 1st April, 1989, whereas other local councils in the Cleveland area do not have to do so until April, 1991?

The provision in the Bill relating to local authorities' publicity is altogether wrong. It is right that in a democracy elected bodies should be able to speak out freely on matters of public concern; and that includes matters of political controversy. At the moment local government is under severe attack and it is in no one's interest that the debate should be one-sided. If it is right for governments to spend money on White Papers which set out their political views, and to produce videos explaining the community charge, then it is right for local authorities to spend ratepayers' money in order to explain their position in a non-partisan way.

The Bill is opposed by local government organisations. The Association of County Councils states that the tendering plans are wrong in principle, and in practice they are likely to provide less value for money and less protection for service users. The Association of Metropolitan Authorities states that competitive tendering would lead to a decline in services and to an increase in administrative costs. It has produced a model questionnaire which seeks to find out who owns and runs a company; technical and financial details; terms and conditions of employment; and equal opportunities. However, under the Government's proposals, in many cases these questions could not be answered. The Equal Opportunities Commission is critical of the Bill because it does not allow local authorities to ask contractors about sex discrimination. There is no provision in the Bill for the enforcement by local authorities of the health and safety legislation.

This insidious and sinister threat to local government parallels the full frontal attacks of cuts in government grants, rate support grant penalties and rate-capping, and it is destroying the very fabric of local government democracy.

The Government's policy of privatisation is supposed to encourage competition, but if, as seems likely, a substantial part of local government services is taken over by multi-national corporations there will be less and not more competition. The Secretary of State says that more controls over local government are necessary in order to limit public expenditure. When one compares local and central government expenditure since the Government came to power in 1979, one finds that central government expenditure has risen by 127 per cent. compared with a rise of 103 per cent. by local councils. The Government should put their own house in order instead of interfering with the powers of local government. The centralist policy of this Government is eroding the people's democratic rights.

I should like to conclude by reading an extract from a letter written by Winifred Holtby to her mother. As noble Lords may remember, her mother was an alderman. In her novel, South Riding, Winifred Holtby wrote: But when I came to consider local government, I began to see how it was in essence the first-line defence thrown up by the community against our common enemies—poverty, sickness, ignorance, isolation, mental derangement and social maladjustment. The battle is not faultlessly conducted nor are the motives of those who take part in it all righteous or disinterested. But the war is, I believe, worth fighting and this corporate action is at least based upon recognition of one fundamental truth about human nature—we are not only single individuals, each face to face with eternity and our separate spirits: we are members one of another". I hope the Government will remember that and will be more liberal in their interpretation of how local authorities should be treated than they are by the presentation of this Bill.

6.10 p.m.

Lord Bellwin

My Lords, I can only assume that the noble Lord, Lord Bottomley, and others who have spoken against the Bill live in a different world from the one in which I live and the people I see and the places I go. Clearly, we shall have to agree to disagree.

I welcome and wholeheartedly support this Bill, but that it is needed at all is a sad reflection on the direction which many in local government have taken in recent years. Despite what some may say, and indeed have said today, the undoubted success and the very logic of competitive tendering is so apparent that to have to legislate for it to make it obligatory is an indictment in itself. The obduracy of some authorities and the political block of their ideology by others make such a Bill inevitable, albeit to some of us rather sad. It is just not good enough to say that authorities should be left to decide themselves whether or not to go out to competitive tendering. That may have been a fair point to make in years gone by, and it may have been a fair point to make when the noble Baroness, Lady Stedman, and the noble Lord, Lord McIntosh, and others were active in local government, but it certainly is not a point that can be valid today with the kind of attitude that all too often prevails.

In the face of overwhelming evidence of the substantial benefits which many authorities are gaining, and faced with the categorical refusal of many local authorities to the basic fundamental of allowing comparisons with their existing in-house performance, cannot simply abandon those who foot the bill in such recalcitrant areas. If local government is either unwilling or unable to take action the Government have no alternative but to step in.

The noble Baroness, Lady Stedman, talked about government interference in local government. That was not the first time I had heard her speak as well as she always does on that subject. Many of us have observed with dismay the ever-increasing involve- ment by local government in matters which have little relevance to the provision of local services. I spent many years concerned with just that, and I remember being taken to task by Labour politicians on the odd occasion for even referring to matters of national importance and interest. I was told again and again that it was about local government. However, today the field has gone far beyond that. All too often in recent years non-local government issues have become the business of the day—vastly different to what transpired then.

At a time when pressure has been so great to contain spending and when the penalties for failing to do so are severe, one might reasonably have thought that obtaining value for money would be an overriding objective for all. However, local government has moved so far away from its local base and so ingrained are social engineering aspects of its affairs that all too often ideology transcends any interest in such mundane matters as efficiency. Those who say that competitive tendering can mean lower standards or higher administrative costs are flying in the face of what has actually happened in practice. Savings of 20 per cent. or 30 per cent. or more are commonplace.

As to standards, as the Minister said, it is up to authorities themselves to specify the levels of services they require and then to ensure that that is what they receive, irrespective of whether it is provided in-house or by the private sector. The flat refusal of many authorities to put services to competitive tender is to me, frankly, a remarkable phenomenon. I have with me a batch of some of the material put out by the trade unions which would appal anyone who read it, but even allowing for that severe kind of pressure, what possible justification can there he, other than blind prejudice, for not being prepared even to find out what cost-benefits are available?

One can only come to the conclusion that for such authorities value for money simply does not matter. Cost-effectiveness and—even though they will deny it—standards of service are of secondary importance to those people. They measure their achievements in terms of numbers of people employed, regardless of what many of them do. A newspaper today cites the case of some 474 gardeners in Lambeth. It is now proposed to reduce that number to 80 because of the cost and the work which many of them do not do. That is not a one-off. The story is there to be told in many places.

A fundamental point in this whole matter of competitive tendering is that, when all is said and done, if at any time any private sector company fails to live up to the contract terms it can be penalised or fined and, if necessary, removed. When have we heard of that happening in the public sector to direct labour organisations or any in-house operations? No such sanction ever takes place then, and that is the difference.

The noble Lord, Lord McIntosh, said, "Privatisation has come to a halt". We are not actually referring to privatisation. It only becomes privatisation if the private sector has a more successful tender. I have a few facts. The situation has advanced since then. There are 166 local authorities who have already contracted out one or more services to the private sector. The number of different services privatised by at least one council is 58. We are referring to six in this Bill, and I shall come to that in a moment. The audit Commission estimated, in considering council refuse collection services, that eight out of 10 local authorities would have benefited from contracting out their services. Over 130 companies have registered an interest in tendering for work in the local authority sector with the major trade associations in this field. In addition, in recent months they have received over 270 requests from local councils for assistance in drawing up specifications and tender documents.

Finally on this part of the Bill, the Audit Commission report on competitive tendering can only be described as devastating. Surely, it makes the case virtually unanswerable. It identified potential savings of over £500 million from three services alone. The report identifies competition as the key to achieving such savings. It says: The choice between providing a service directly and buying it in should be based on management's assessment of which route will deliver the most competitive service in the long run. Competitiveness is the key. The Commission believes that all local authority services should be subjected, regularly, to the test of the market place. And Direct Labour Organisations and private suppliers should compete for as much local authority business as possible, on a completely equal footing". What more is there to say after that?

Part II of the Bill deals with the introduction of extraneous and unreasonable contract conditions. This is a truly deplorable situation which is an abuse of political discrimination. To me it is intolerable. In terms of what local government is and has been about there is simply no justification for authorities setting themselves up as extra-statutory agencies in matters for which Parliament has not given them a role. The sooner this part of the Bill is on the statute book, the better.

The case is very powerful for the curbing of spending on political propaganda, which is contained in Part IV of the Bill. As Widdicombe illustrated, there is abuse which is unacceptable. It goes far beyond the scope of genuine local government. Once again, the warning flags have been flying for a long time now and if local government, through the associations, is unwilling or unable to impose moderation then, as my noble friend Lord Boyd-Carpenter said, the Government have to do something about it. To give information is one thing but blatant political advertising is another. I am quite unimpressed by talk of stifling the dissemination of information.

This Bill deals with excess and abuse, and it comes not a day too soon. The right reverend Prelate the Bishop of Manchester said that local authorities need space and money to give information as to their functions. When I look at some of the public relations' departments and consider the millions of pounds spent on them, I think of Leeds where we never employed even one person for that purpose. We preferred that the citizens obtained the information they required as a result of our achievements and results.

Perhaps that was another extreme and it may be that there is a case for the dissemination of information. I am all for that. But there is no case for that kind of political spending of ratepayers' money which we see today.

I like the proposals contained in the Bill for the greater effectiveness of the Land Register, which has not been mentioned today. I applaud the intention contained in Clause 30 and in Schedule 5 to amend the existing DLO regime so as to prevent authorities protecting construction and maintenance workforces from fair competition. What a reflection that that should need legislation.

In deference to the usual constraints of time, I shall leave reference to other aspects of the Bill to another day. I should like to say how delighted I am that the Bill now includes a prohibition on local authorities promoting homosexuality in schools. The noble Lord, Lord McIntosh, said that this was a delicate subject. It is not a delicate subject to me. It is absolutely clear. When I spoke during the debate on the Bill of the noble Earl, Lord Halsbury, I said that what adult people do is their affair. I make no comment on that. One can argue about the use of the word "promotion". We had examples in that debate. I commend the right reverend Prelate the Bishop of Manchester to read the speech of the noble Baroness, Lady Cox, in that debate regarding what is being done in our schools in the name of teaching young people that heterosexuality is undesirable and that the family and marriage are really not to be put forward as a proper basis for life. Some of these things are appalling. With one exception, everybody in your Lordships' House in that debate spoke in favour of the noble Earl's Bill. I am delighted that this Bill deals with these matters. I have no possible reservations about that at all.

My main reservation about the Bill is that it limits the number of specified services to six. If some of your Lordships consider this the right thing to do, why six? I am not too happy about the phasing-in. I am sure that my noble friend Lord Belstead will explain, in practical terms, the reasons for it, and he will probably be right. I wish it were not so.

This is a fine Bill and I am very happy to support it. I am sure that in doing so I speak for the majority of people in the country and certainly for the majority of noble Lords in your Lordships' House.

Lord Taylor of Blackburn

My Lords, before the noble Lord sits down, would he like to think about what he said a moment ago about homosexuality and all our schools. Surely, he is referring to some of our schools, and not all of them?

Lord Bellwin

My Lords, that is what I was saying. It does not apply to all schools and heaven forbid that it should. The fact of the promotion of homosexuality applying to any schools is enough; the fact that it applies to so many is even worse. I have no reservation in speaking as I do upon this point. To me it is not delicate; it is a matter of grave concern.

6.25 p.m.

Lord Morton of Shuna

My Lords, I should like to attempt to deal with the Scottish aspect of this Bill, but before doing so I wish to say something on general relations and matters such as South Africa.

Edinburgh had the honour and the financial cost (as did Lothian Region) of staging the Commonwealth Games. The Commonwealth Games having taken place two years ago, it is very difficult to say that the local authorities which had to bear part of the costs should have no interest and be unable to express any views about government decisions. Those decisions may have been right or wrong but they certainly affected the Commonwealth Games, with African countries deciding that they could not come because of the attitude of the Government. There is an element where local authorities have legitimate interests.

Perhaps I may deal with the Scottish aspect. Listening to this debate from a Scottish point of view, I began to wonder whether the local authorities that were being talked about had any relevance at all to the local authorities one knows in Scotland. If there had to be a Bill, I suggest that it would have been better to have had two Bills—one for Scotland, in so far as it was necessary, and one for England. In the Bill one sees that all legislation referred to is an English, Welsh or Scottish Act. Every definition seems to be different.

I have discovered to my interest that on page 33—and no doubt the Government are right to include it—"a litter bin" has a different meaning in Scotland from what it means in England. If we reach that situation, surely we should have a Scottish Bill and an English Bill.

This is the normal way in which local authority legislation has been passed in the years since the war. One has a Town and Country Planning Act and a Town and Country Planning (Scotland) Act. They say much the same things in the different languages for the different legal systems. I put it no higher than to say that it really is a mess to try to define in Scottish legal terms and in English legal terms in each section, and then to wallow about like that.

As is usual in Bills presented by this Government, throughout there is provision for the Secretary of State to make regulations. This is where it becomes vitally important that there should be some definition. There would be surprise if the regulations to be applied to Scotland were to be signed or promoted by the Secretary of State for Wales or the Secretary of State for the Environment. But there is no definition.

If we are to have this hybrid kind of Bill, it would be better to have a clause saying that Scottish regulations shall be prepared in St. Andrew's House or promoted by the Secretary of State for Scotland, and so on. That may be said to be unnecessary because each Secretary of State can do anything that any other Secretary of State can do. But that may not be the case because when officials of the Convention of Scottish Local Authorities wanted to discuss aspects of this Bill at St Andrew's House, they were told "No, you cannot do that; you will have to go to the Department of the Environment". That was apparently because St. Andrew's House did not know what the Bill was about at that stage.

Furthermore, the Under-Secretary of State for Scotland, in dealing with the Bill at Second Reading in another place, seemed to be under the impression that only nine local authorities in Scotland had any form of private competitive tendering. That seems to us to show that he did not know what was going on. There is a list—I do not intend to read it out—of 40 local authorities in Scotland which have privatised, or go out to private firms for certain of their work. The extent is quite considerable, but it does not seem to be within the knowledge of the Secretary of State, which is a pity.

It is interesting—and perhaps a sign of the doctrinaire approach of this Bill—that there is a power in Clauses 2(3) and 19 for the Secretary of State to add to items that have been defined, or to add to non-commercial matters. There is no power to take them away if they are found to be unnecessary, which is an interesting distinction. The whole thinking behind this Bill seems to work on the basis that all local authorities are the same, and of course they are not. Is it bureaucratic nonsense to attempt to enforce the same procedures on local authorities in remote, thinly populated areas as are to be enforced in cities and in thickly populated areas. It is just absurd.

The Audit Commission in their paper on competitiveness say: The assessment of long-run competitiveness will need to be based on the facts of the local situation rather than on generalised assertions about the relative advantages of the private sector and direct labour. If that is acceptable to this House, that seems a rather strange basis for this Bill which says precisely what has to be competed for without any power in the Bill for the Secretary of State to say, "Oh, very well, the Scilly Isles are different" or "The Western Isles are different" or, "Roxburgh is different because of this or this particular aspect". It seems to me that that is a difficulty which shows that the Government are approaching this in a purely party spirit without looking at all at the practicalities.

In a place like the Western Isles Council or the islands councils of Shetland and Orkney and in certain rural areas competitive tendering is a wholly absurd concept. It is a question of who you can get to do the job, and whether a local authority should do it or somebody else should do it. The idea of advertising in a local paper and a trade paper, and getting four tenders for refuse collection, say, in the Island of Coll, is one that I find slightly odd. But it seems that is what it is to be.

The Western Isles Council in fact have a refuse system which is based on a wheeled-bin system with the normal, complicated machines to lift the wheeled bins. If this has to go out to tender, what is to happen? Is it to be visualised as a condition of the tender that the successsful tenderer takes over the equipment, or not? Or leases it? What is to happen to it? If the successful tenderer, if you take that supposition, goes bust or decides to cease to operate because he is not making any profit on this, what is to happen? Is the local authority suddenly to set up a new organisation, or is it to put everything out to tender again while for several weeks' rubbish just piles up?

In a low population area—and of course Scotland has almost the same area as England, if my memory of geography is right, with about one-tenth of the population, so we are fairly well off in low populated areas—the successful tenderer is going to get himself into a monopoly position where he cannot be got out. He tenders for two or three years to do the job, and then he has the local authority round the neck. They cannot do anything else. Nobody else can tender.

It is not feasible for the local authority to expend the money—because the Secretary of State will prohibit it from doing so—to set up a new organisation. What one can clearly visualise happening in certain areas of Scotland is that a private monopoly will be created which will be just as inefficient, if there is inefficiency, and certainly will have the risk always of being able to go bust, which the local authority cannot do because the local authority has to continue and has to continue to provide the services.

One of the things that this Bill misses out completely, so far as I can see, is any measure of what is thought to be happening. We in Parliament put statutory duties on local authorities to do certain things. This Bill puts those statutory duties out to competitive tender. On whom is the liability to fall if there is a failure to carry out the statutory duty? It falls on the local authority because of the failure of the private contractor. It seems an odd approach.

On non-commercial matters the position seems to me quite extraordinary. I happened to be dealing recently with a contract. It is a largish building contract in which the employer, the main contractor and the sub-contractor were all private firms all of whom happened to make large contributions to Conservative Party funds. All the contracts both with the main contractor and with the sub-contractor had fair wage clauses. All had the type of contract that this Bill prohibits. All made provision about training.

That private contract was privately negotiated and had nothing to do with any government funding at all. There is no local authority involvement and it is a purely private contract. If that is proper for private companies, why is it improper for a local authority? Why, for example, is it apparently improper (and illegal if this Bill goes through) for a local authority to say, "I insist that electrical contractors will be members of the Electrical Contractors Association, because they set standards and insist on standards of safety"? They are a trade union. According to this Bill that is an illegal contract.

West Lothian District Council has a policy of insisting—as do the Electricity Board and British Gas—that central heating gas and electrical installations in their premises are put in by contractors who belong to the appropriate organisation so that they can rely on the standard of the work. If this is to be prevented under the words "free competitive" it is a cowboy's charter, as the noble Baroness, Lady Stedman, suggested. But it also means additional cost. The local authority, knowing that there is no standard set, has to enforce the standard by employing far more supervisory staff to see that the contract is carried out.

One gets the impression at times that Bills like this—or the ideas—come out of some accountancy mind which has worked in an office and has never had anything to do with any practical contract or seen the difficulties of practical work. This Bill depicts the government attitude that local democracy is bad and should be restricted. It adds to the power of central government to supervise and control and to override the wishes of local communities. If local authorities are so good and appropriate and are to be encouraged, the Conservative Party—at least in Scotland—might consider why so many of its few remaining Conservative local councillors have decided that they do not want to stand again. Is it perhaps because local authorities are having all power removed from them and so there is no point in being a local councillor? If that is the position it is very bad for the country. This is an example of a wholly bad Bill and one which, if it has to go through, will I trust be severely altered.

6.40 p.m.

Baroness Carnegy of Lour

My Lords, I am not sure whether the noble Lord, Lord Morton of Shuna, is planning at the Committee stage to move an amendment that Scotland should be excluded from the provisions of the Bill. If he is, I hope very much—

Lord Morton of Shuna

My Lords, perhaps the noble Baroness will allow me to intervene. If there were to be an amendment I believe that the time for that would be the Committee stage. I may or may not put down such an amendment.

Baroness Carnegy of Lour

My Lords, however it comes, I hope that noble Lords will not think of backing such an amendment. Scotland should not have to wait for a separate Bill and should not suffer from having no Bill at all. The people of Scotland need this Bill every bit as much as do the people of England and Wales. It is a combined Bill. There is nothing unconstitutional about it. Indeed, there are plenty of precedents. I understand that under the 1974–79 Labour Government there were some 40 combined Bills with provisions for England and Wales and Scotland. Between 1980 and 1987 there have been 80 such Bills, five of them local government Bills.

As a number of noble Lords have said, there is no question that the Bill is causing considerable anxiety in local government circles. That is certainly true in Scotland. I want to suggest that those fears are largely unjustified. It may be that there are proposals which can be made more easily workable, and doubtless we shall be examining those carefully during the Committee stage. However, it is my belief that the general thrust of the Bill will bring changes that are wholly beneficial to Scotland; to ordinary people all over the country who use local government services and naturally want them to be as efficient and cost-effective as possible; to local businesses and their employees—and this point has not been made—who should be able to play a greater part in the delivery of local government services from which they are now excluded; and to local government itself.

The Bill proposes a framework within which local government can sharpen and update its managerial role, its managerial style and expertise, to meet society's changing demands and so be much better placed to do its statutory job. Far from diminishing the role of local government or heralding its end, as has been suggested by several noble Lords, I believe that this much-needed updating will help to ensure the continuance of local government as a strong, effective form of local democracy. I am extremely sorry that the right reverend Prelate the Bishop of Manchester is not at the moment in his place because I feel that he misunderstands that issue quite deeply.

The Lord Provost of Dundee has kindly written to me a careful and detailed letter expressing the doubts and fears of the Labour-controlled Dundee District Council about the Bill. If the Bill comes into effect, he says, It will change the face of local government as we know it. It threatens the accepted historical and constitutional status and function of local authorities … Local authorities could cease to be the employers of people who actually service the public. They will be reduced bodies which merely supervise contracts but without the freedom to exercise judgment on providing the best service for their communities whether by their own workforce or by private contractors". The Lord Provost assumes that local government's statutory responsibility for the provision of refuse collection, pavement cleaning, school meals, school cleaning and grass cutting means that those things must be done by people employed by his council or by Tayside Regional Council and that those people must be managed and supervised by other people employed by the council. But it has already been pointed out that this is not necessarily the case. It is not the case even in the Dundee area. The roads department in Tayside does large parts of its work through private contractors. Tayside Regional Council's reputation is in no way diminished by that.

Those noble Lords who have recent experience of local government and of the running of services through direct labour know that it is becoming more and more difficult to provide direct labour services which are as well managed, as efficient and as cost-effective as are the equivalent in a well-run private concern; and that is so even where the political will exists among councillors, which is by no means always the case.

There is something about the chemistry of a local authority which militates against a business approach. It has to do with the way officials are required to operate—answerable to political councillors, working with highly politicised trade unions, the customers and indeed the staff being in addition the electorate, and some, but not all, also being ratepayers and so, as it were, the shareholders. The interaction of all those groups and roles means that, even when councillors suggest comparing their refuse collection, school meals or whatever with what a private firm might achieve, proof is somehow established to them that that cannot be done. It is in fact "Yes, Minister" at local level. That is why since the Government's White Paper of 1985 where such comparisons were proposed, so few councils have tried. So few as yet know just how their direct labour services compare with what might be achieved.

The Lord Provost of Dundee himself says: There is no evidence that the private sector will provide services to existing high standards at less cost". I wonder whether Dundee District Council has tried. It is easy to say, as many do, that local government should be free to decide for itself whether it is cost-effective, but the totality of local government expenditure is a large proportion of total public expenditure and half of it comes anyway from the taxpayer. The services listed in the Bill cost £3 billion each year. Even 10 per cent. saved would be £300 million. That is no small sum.

Surely the public as a whole have a right to insist that where a council wants to provide a particular service by using its own staff then at least it will have to compare its direct labour efficiency and costs with what a private firm or some other agency can do, and where the job can be done better at the same cost or as well at a lower cost by some other agency, that agent should get the job.

It was suggested by the right reverend Prelate the Bishop of Manchester that this was simply privatisation. I suggest that it is not privatisation of local government in any way. Local government will continue with its statutory responsibility to provide the services. The Bill simply means those services will be delivered either by direct council employees or by people working for private firms or other bodies acting as the council's agents.

It is likely that well-run councils who want to use direct labour will find when they compare the tenders they receive that the one from their own department is using the advantages of scale and accumulated experience to good effect and that it gets the job. Others will find that the in-house way is not in their case the best way and will make other arrangements. There is not much wrong with that.

From the employees' point of view, too, he or she may well find that a not particularly satisfying job in a loosely run, overmanned council comes to an end and that in its place a similar job becomes available in a much smaller, more personal organisation with tighter management and much greater job satisfaction as a result.

However, the biggest change will be for the council's officials. As the noble Lord, Lord Belstead, said, they will have to develop new management expertise. Instead of simply providing estimates to the satisfaction of councillors for carrying out a particular service, and then adjusting the operation according to the budget which the councillors finally agree, they will have to specify the work much more precisely; and that is where the standard is ascertained. They will have to draw up contracts; they will have to produce precise costing for their own direct labour tenders; they will have to make proper comparisons between tenders and if an outside agent wins a contract they will have to oversee its work. If the direct labour organisation wins it, they will have to ensure that they meet the sharpened specification and costs.

This separation of the drawing up of specifications and the carrying out of the job is quite new to many council managers; so is the drawing up of contracts and seeing that they are met. Yet these skills are very important in the world outside local government; and indeed they are already important in some departments within it, such as roads departments. It seems likely that those to whom it is all new will find the sharpening and updating of their skills, once they get into it, a much more stimulating and satisfying business than the way they work at present.

I suggest therefore that for local authorities and the other bodies listed in Part I of the Bill—with perhaps slight problems for very small local authorities in England and Wales, at which we must look during the Committee stage—competitive tendering is highly desirable and likely to provide improvements for the customers, more enjoyable jobs for the workforce and a more interesting role for the managers.

The proposals in Part II of the Bill, which stipulate what can and what cannot be taken into consideration in drawing up lists of firms who may tender for contracts and in awarding contracts, are also in my view likely to be extremely helpful in Scotland in ensuring fairness to firms and in strengthening ever necessary protection against corruption and political bias. On that part, I simply say at this stage that those councils who are expressing fears about Part II should feel reassured that other councils—certainly including Tayside region as it was when I was a councillor—already carry out the main procedures prescribed in Part II and find that they work extremely well. On the rest of the Bill, I reserve any comment until the Committee stage.

Finally, I simply say that I think this Bill is highly relevant to Scotland. It is relevant to remote areas as well as to urban areas, as it is relevant to remote areas in England and Wales as well as to urban areas. There are always problems about getting tenders in the Western Isles and, I am sure, in the more remote parts of Wales. But I do not think that anybody would refuse an offer of putting in for a tender to clean windows, cut grass or perform that kind of function in one of the Western Isles. It seems to me that that opportunity should be open to people. It is not always possible to get a full list of tenderers. If you cannot, then whoever tenders has to take on the job. This is always a problem. But I do not think this in any way makes the Bill irrelevant for rural or remote areas and I do not think it makes it irrelevant for Scotland. I shall support the Second Reading.

6.55 p.m.

Lord Houghton of Sowerby

My Lords, there are 11 noble Lords and Baronesses to speak after me and it is now five minutes to seven. It is a great pity that after a Christmas Recess of quite adequate length our first day back will be a late sitting. It is a great pity that we could not have had a whole day for a debate on an important Bill of this kind. I leave it at that.

The second point I want to make is that nearly all local government Bills which come before your Lordships' House are miscellaneous provisions Bills. They nit-pick around local authorities, lecture them, rebuke them, impose restrictions upon them and threaten them with dire penalties if they fail. This sort of attitude is very bad for local government. People are fed up with Parliament lecturing local authorities on their duties and spending a lot of time on remedies which are all-prevailing throughout the system in order to check abuses in a comparatively small number of cases. That is not the way we should be going on.

The noble Lord, Lord Boyd-Carpenter, referred to the importance of local government. We all realise that. Twenty-five per cent. of national expenditure—a very big slice indeed—is in the hands of local authorities. A large number of local authorities carry out a very great number of activities which are of great importance to our citizens. I believe that our attitude ought to change. In our approach to local government we have lost sight of the wood because of the trees. Probably, by the time we come to the community charge debates, we will be able to develop some new philosophy about the role and responsibilities of local authorities and, what is more, about how comprehensively they are to be paid for. But the Bill before us seems just another instalment of what we have had before in other directions.

Another point is that Bills of this kind, when they arrive here, nearly always contain a most contentious part which was not in the Bill when it was introduced into the other place. Do your Lordships remember the Local Government (Miscellaneous Provisions) Bill? It finished up dealing with sex shops in a new schedule, introduced at the Report stage in another place, which was bigger than the Bill itself. The Bill came here within only a few days containing all the apparatus for the suppression of the evil of sex shops.

Here we have, in this Bill, Clause 28 dealing with the promotion of homosexuality. I must say to the right reverend Prelate the Bishop of Manchester that I agreed with almost everything he said on this subject, as I agreed with him on most other things. We have to be careful about this. I object to what the Bill proposes. I object also to the source from which it comes. This kind of Bill frequently contains the product of a narrow grouping of persistent endeavour in another place to suppress more liberal attitudes and thoughts about sexuality and morals generally. Here is another example. Your Lordships should study how it all came to be where it is in the Bill. I shall have something more to say about that later.

I turn to another matter which is probably not suitable for the Bill. I refer to dogs—the tail-end of the Bill. I have a morsel of mischief to drop upon the House. It arrived as I sat here waiting for important constitutional information about whether this is a money Bill.

Clause 34 deals with a tax. It is a licence duty. Apart from the anachronism of this small tax on dogs, I thought that I would consult the greater anachronism of the Parliament Act 1911. That was a temporary arrangement while governments thought out the future role of the House. However, here we are in 1988 and the Act is still on the statute book. What is more—I am about to drop that morsel on your Lordships right now—according to the advice that I have received while sitting here, we cannot in Clause 34 increase the amount of the dog licence. It would be a breach of the financial privilege of the other place.

Therefore, we are not free to amend the dog licence fee—at least not beyond a certain point. I am advised that it would not be a breach of the financial privilege of the other place if we were to increase the licence fee to an amount which would equal the cost of its administration and collection. That is a beautiful one. If we can only work that out, we shall know what amendment to send to the other place. However, I do not have information as to whether we are free to delete it from the Bill. Is it a breach of the financial privilege of the other place to say that it must not abolish a tax?

We are strung up on the financial implications of Clause 34. All the talk that we have will be invalidated unless we have the courage to tell the other place that it can do what it likes with the clause but we are not going to let it go through as it is.

The dog licence fee has become uneconomical because governments have not enforced or increased it. I shall adopt an attitude of penace and confess that I was party—when the Labour Government were in office in 1966—to leaving the dog licence out of the general increase in all licences that Crossman brought to us to impose. We left out the dog licence, and no one. Labour or Conservative, has had the courage to deal with it since. That is why the tax has fallen into disuse and become an anachronism and an absurdity. We can only blame ourselves—or at least the other place can only blame itself—for not having done something about this matter long ago.

Why, then, was it difficult to put up the licence over 20 years ago? Was it the fear of the cruelty to the dogs which would result from dog owners throwing out their dogs if the dog licence fee was increased? The voluntary societies were saying, "Don't come to us to ask us to destroy thousands upon thousands of dogs thrown on the streets because their owners will not pay more in tax". That was the dilemma. It might be a good thing if some of the voluntary societies which destroy dogs were to take a firmer stand today and say, "We are in business to prevent cruelty to animals. We are not here to put them down so that they are not cruelly treated. We will enforce our laws against cruelty to animals."

We do not even do that. We allow people to throw out dogs. We allow them to go to the charitable bodies or in some cases the local authorities and say, "I don't want this puppy any more. Will you put it down? Me mam says we can't do with it." They only had it at Christmas, and yet this is going on every year, and we tolerate it. We must have a major debate about dogs so that we can decide what to do with Clause 34.I am in favour of deleting the clause unless we receive firm assurances from the Government that they will tackle seriously the dog control problem. It is no good the new Leader of the House, whom I warmly congratulate on his appointment, telling us that the clause does not detract in any way from the Government's desire or intention to impose dog control. I should be glad to see what the provision will look like, because it is not there at present.

That is all I have to say, and it is quite enough to be going on with. I have spoken for 10 minutes, and it is now someone else's chance. However, I sit down warning the House that on Clause 34 we can promote an acute constitutional crisis which would be much more interesting than homosexuality. We can now tell the other place where it can put Clause 34, and see what happens. This is a wonderful opportunity. I hope that your Lordships will not fail to grasp it. Let us have a real battle in 1988 over the anachronism of the Parliament Act 1911.

7.6 p.m.

Lord Beloff

My Lords, it is rare that the noble Lord, Lord Houghton of Sowerby, speaks on any subject without casting new light upon it. I am delighted with, and I hope that the Government have taken note of his constitutional objections to Clause 34. It is true that under the Parliament Act 1911 the House is not supposed to discuss the levying of money, which is rightly the sole prerogative of the elected Chamber. However, if the Government and your Lordships accept this point, it obviously applies to the community charge. If the noble Lord, Lord Houghton of Sowerby, is right, the community charge Bill would not be a matter which will occupy us for laborious nights and days, because it will be ultra vires so far as this House is concerned. It must give pleasure to our new Leader when he considers that as a possibility.

I return now to the subject matter of the rest of the Bill. I have, as so often, been interested not so much in the argument—having ploughed through the debates in the other place, I fear the arguments have largely been forestalled—as in the techniques of argument and the way in which a harmless Bill designed to correct some observed anomalies is built up into a major issue by the Opposition. There are various ways in which that is done. One of them—this was true I think of the noble Lord, Lord Houghton of Sowerby, the noble Baroness, Lady Stedman, and the right reverend Prelate—is to take a common word, and say that in some extraordinary circumstances the courts might interpret it as meaning something different.

Those with a little Latin will know that "promote" means to move forward. This word is a common word. We know, for instance, that there is a class of persons known as boxing promoters. They put on fights and receive the money. No one suggests that one could use "promotion" in that sense to mean the impartial investigation of the effects of pugilistic exercises. Yet it is seriously claimed, not only by the right reverend Prelate and by the noble Baroness but by correspondence which has reached me, as it has other Members of your Lordships' House, that a clause which prevents the promotion of homosexuality could, for instance, be used to eliminate books by homosexual authors from public libraries. A correspondent of mine today writing, I think, from the London printing college gave me a list of such authors ending with Marcel Proust. Anyone who thinks that reading Marcel Proust is likely to encourage one in the pursuit of homosexual practices would be very curious indeed. On the contrary, one might have thought that the picture of misery which is entailed for such people might even be some kind of deterrent. So the twisting of the word "promote" is out of all proportion.

A second technique or tactic—and I am addressing myself particularly to the right reverend Prelate—is to take the high moral ground. Obviously if anyone is to do that it ought to be someone on the Bench of Bishops. But the right reverend Prelate took it in relation to contract compliance as it concerns the purchase of goods from South Africa or dealing with firms with South African interests. He argued that many of the citizens of Manchester, many of the people in his diocese, were profoundly convinced that to damage or attempt to damage the economy of South Africa in this way would be a method of ending apartheid. Therefore, he says that surely the city council, representing their feelings, should be able to act along these lines. I must, however, inform the right reverend Prelate that, on the contrary, the only chance for apartheid to disappear without enormous bloodshed is the encouragement of the economy of South Africa and in particular the fuller employment of its black population.

I may be wrong and those who favour boycotting South African goods may be right. But if the right reverend Prelate takes the view that it would be proper for Manchester City Council to take one line, I do not think it would have much chance of success, but would I also be right in urging my local authority to give absolute preference to South African goods in order that more black people might be employed in growing the fruit or making the products, whatever they were? It seems to me—

Lord McIntosh of Haringey

My Lords, I wonder whether the noble Lord would allow me to say that the answer must be, "Yes, of course"?

Lord Beloff

My Lords, I would myself have preferred the answer to be "No." In listing the ways in which the Opposition has approached the Bill, the other point I want to raise is this continued blurring of the rightful distinction between national and local politics, doing this in some cases by sleight of hand or forms of argument which are really a little difficult to take. I know of course that it is absolutely right—and the noble Lord, Lord McIntosh, is within his rights to remind us—that the federal government of the United States uses contract compliance. Perhaps the noble Lord, Lord McIntosh, would give me his attention. I am referring directly to something he quoted. The noble Lord, Lord McIntosh, is within his rights in saying that under President Reagan the federal government of the United States makes massive use of contract compliance in order to bring about certain social objectives.

I would submit that in a federal country where the opportunity for direct regulation by the federal government is constitutionally of doubtful validity, a quite different set of arguments applies from the one which applies to a unitary form of government such as ours. Really, that argument will not hold water.

Lord McIntosh of Haringey

My Lords, I wonder whether the noble Lord's argument would be affected if I told him that not only the federal government but a large majority of state, city and local governments in the United States are also equal opportunity employers. They employ the same contract compliance conditions.

7.15 p.m.

Lord Beloff

My Lords, states are not parallel to local authorities. Local authorities in this country are the creation of Parliament; in some cases the states in the United States, as the noble Lord well knows, regard themselves as prior to the federal government. They certainly are not its creatures.

The noble Lord may not wish to pursue his American comparison or may think that I have got it wrong. However, he also quoted rather unexpectedly and touchingly the noble Marquess Lord Salisbury. No Conservative in this Chamber ever hears the name of the great Marquess of Salisbury quoted without respect. Therefore perhaps I might quote something he said about local government: There is something very grand in the phrase 'municipal liberties'. It rouses a crowd of inspiring associations connected with the struggles of mediaeval burgesses against the tyranny of feudal barons, and it touches powerfully the parochial instincts which are keen in the breast of every Englishman. But municipal liberties, if you come to count them, are not the things for which people get themselves and their neighbours shot. They mean, with us, the power of looking to the drains, keeping the pavement in good order, regulating the dustman and the water-cart, fighting the gas and water companies, and, moreover, of exercising all these cherished privileges without interference from the central government. To this it may be added the power of making such streets as Parliament allows to be made, levying such rates as are prescribed by law, choosing and paying the police who are to act under the orders of the executive. Men do not die upon the barricades for prerogatives of this sort. The authorities of St. Pancras, in our own metropolis"— I suppose that we should now read "Camden Borough Council" for that— probably carry the enthusiasm of vestrydom as high as it has ever risen in the human heart, and they detest the central government with a hatred which will yield to no other upon earth. But their emotions have never reached even to the mildest tint of the heroic. This lack of a heroic cause and some way of building up emotion on this simple Bill appear to be the objective of some Opposition speakers. I shall not give away much perhaps when I say that the point about barricades was a little more vivid at the time when Lord Salisbury wrote that article, since it was at the time of the Paris commune. Lord Salisbury was suggesting that even the St. Pancras vestry was unlikely to go to those lengths. We may hope this is also true of Camden and other borough councils.

We have here a Bill designed—perhaps imperfectly; perhaps there are ways in which it could be improved at the Committee stage—basically to see that the balance between central and local government is such that the partnership which existed and to which my noble friend Lord Bellwin referred can be reinstated.

Since I think that the noble Lord, Lord Houghton, would be distressed if I did not refer to dogs, let me say that I see a connection between what we might do about dogs and the rest of the Bill. If my local authority would devote to the control of dogs, the prevention of the fouling of our streets and promenades, and thus the discouragement of our tourist trade the money that it spends on promoting a nuclear-free zone or on sending me letters about how to vote in your Lordships' House, I for one would be delighted.

7.20 p.m.

Lord Graham of Edmonton

My Lords, the noble Lord, Lord Beloff, will not expect me to follow what he said, and neither will the noble Lord, Lord Bellwin. However, I intend to make reference to one or two of the points that have been made.

In a Bill of this kind, which is literally a catch-all kind of Bill which deals with a great many things, it is not possible to deal adequately at Second Reading with the many points that are of interest, not least to those of us who have served for long stints in local government on councils and therefore see not merely the words in the Bill but also their impact on ratepayers and on colleagues who continue to serve on councils. I believe that what we must try to do here is to look at the philosophy behind the Bill. I am bound to say that that philosophy comes over increasingly, not least from the Leader of the House. I wish him to accept my warm congratulations and my wish—as I am sure it is the wish of every other Member of this House—that he should have as trouble free a time as possible while he occupies that post.

The Bill sets out, in my view, to continue the mania that the Government and their friends have for asserting that public is bad and private is good. In fact, tonight the interesting point was made that the Members opposite have run away from the notion of private and privatisation and that they want us to believe that the Bill is about competition. Well, you could fool me, because when we look at what competition means and what it has meant in a range of services we can see that the Bill involves very little competition at all. When one looks at the mergers and the takeovers that have taken place in those companies that provide services to, for example, the National Health Service and at other industries mentioned in the Bill one immediately sees that instead of there being 40 or 50 groups competing to take over council business there are only two or three.

When one looks at the market dominance of the two big groups one sees that companies such as Initial Service Cleaners, Exclusive Cleaning, ICC Cleaning Services, Biffa, Advance Services and Exclusive Health Care Services are all owned by one large conglomerate. Provincial Cleaning, Progressive Cleaning, Cleaners Limited, B. A. Lester, Home Counties Cleaning, Taskmasters, Pritchard Industrial Services, Mediclean, Crothall and Company, Lester Health Care Services and Home Counties Hospital Cleaning are all owned by one large conglomerate. I give way to the noble Lord, Lord Bellwin, not for the first time I am sure.

Lord Bellwin

My Lords, I know that the noble Lord has a great interest in factuality. Would he care to comment on information that I have before me which states that in the National Health Service over 220 contracts have been awarded to private companies for ancillary services? The number of different companies which have been awarded such contracts is 38, and less than 50 per cent. have been awarded to the market leaders and their subsidiaries—BET and the Hawley Group.

Lord Graham of Edmonton

My Lords, I do not dispute the information that the noble Lord has given, but if he is saying that less than 50 per cent. of the contracts have been awarded to the two dominant groups he knows very well that industry is in a process of takeover and merger. I have information which states that when the West Midlands local authority put its services out for tender 11 companies put in tenders. Those 11 companies are now reduced to four as several of them have been taken over.

If the two big groups have, say, 45 per cent. of the market the noble Lord knows that it will not be long before that 45 per cent. becomes 55 per cent. and 65 per cent. Therefore I am simply making the point that it is a nonsense to say that this Bill is all about competition. The Bill is all about diminishing the size of the public sector and enlarging the size of the private sector.

When we considered the contrasts that arise in this context a number of authorities were mentioned. Wandsworth was mentioned. I wish to draw attention to the London borough of Merton. That borough is very often held up alongside others as a paragon of virtue in the management of its local affairs. What has happened in Merton in the past six or seven years? Housing which is needed is at a virtual standstill. The housing stock has been sold off. Merton has the lowest expenditure per head of population on education in London. Environmental services there have been cut to the bone. However, when one considers other aspects one sees that at the same time as cleaners employed by the council are being paid £1.90 per hour the chief executive is now to receive £55,000 per year.

Only three or four months ago Merton was contemplating going to the City and arranging for the town hall and other large municipal buildings to be mortgaged and for the money to be invested on the Stock Exchange. That is the other side of local government which apparently noble Lords opposite and the Minister are not inclined to criticise or castigate in any way.

One must consider how the Bill will deal with contract compliance. A great deal has been said in this regard which will obviate the necessity for me to say much. But quite frankly I cannot see the argument that local councillors who are elected—far more democratically than Members of your Lordships' House—to carry out the will of the electorate and who decide on behalf of that electorate that they wish to lay down certain conditions should not be allowed to do so. It has been pointed out that not only is it their entitlement to do so but that those conditions are seen by a great many people of high esteem to be good conditions.

I happen to be a member of the Institute of Personnel Management. A comment that was made on the Bill in Committee in another place is worthy of repeating here: IPM's own independently-commissioned study of the subject, Contract compliance—the UK Experience, finds that contract compliance is not only useful in promoting fair employment practices with respect to recruitment, selection and training, but also makes good economic sense". That view has not been promoted by anyone other than those whose job it is to make a sensible evaluation of matters and practice.

Then there is the nonsense of Northern Ireland, unless we are to be told that yet again this is a special case. In Northern Ireland, this Government go out of their way to ensure that the contracts which are awarded are capable of having built into them methods that can ensure that they are awarded to people whose practices are acceptable to that authority. That authority in this instance is the Government. Tom King had to say on this matter: Equality of opportunity in employment is a vital concern in Northern Ireland. It is central to personal dignity, to the best use of individual talent and to business efficiency". Equality of opportunity is a vital concern here too. I can understand noble Lords opposite not liking the kind of restriction which is placed by some authorities on those who should receive contracts. But it is hypocrisy of the worst kind to say that in some circumstances that is not applicable and relevant. Those councillors who decide to operate by those methods are as entitled to do that as this Government and the Cabinet are entitled in Northern Ireland to meet the circumstances there.

I understand the discussions that we have had concerning Clause 28 and the promotion of homosexuality. I listened carefully, as I always do, to the noble Lord, Lord Bellwin. I am sure that he was referring to me obliquely when he said that in the earlier debate on this issue, which was initiated by the noble Earl, Lord Halsbury, only one voice spoke out against the Bill. However, I was not the only one; the Minister also spoke out. If the noble Lord, Lord Bellwin, wishes to ignore what the Minister said, that is up to him. The Minister did not find that the Bill of the noble Earl, Lord Halsbury, would be helpful. That was the view of the Government then; they have changed their minds. I wonder why they have changed their minds during 1987.

Reference has been made to the hysteria which has built up. I think that this provision is a very dangerous precedent. I am not in favour of the promotion of homosexuality. However, anyone who tries to define the word "promote" will find himself in a dangerous and difficult area. Indeed, the noble Lord, Lord Beloff, in trying to be helpful, gave us his interpretation and a range of sources to go to for a definition. There are excellent grounds for amending the clause, if not for rejecting it altogether. The noble Lord, Lord Beloff, referred to some of the manifestations which have been drawn to his attention, such as that a local authority will hesitate to stock books in libraries, provide services or aid and support those who need advice and guidance on the dangers of homosexuality and lesbianism.

It is right that this Government have created a climate of fear and suspicion. There will be many a council that wishes to provide services and will be advised not to do so because by so doing it may lay itself open to an appearance in court. This clause will provide a field day for the legal profession. It will inhibit many a young person who will wonder where he or she can get advice as regards his or her sexual orientation. The clause is not welcome and it is full of matters that need to be put right.

As regards dog licences, I raised that matter with my postman. He gave me information which I think the House ought to have about the nonsense of a provision which simply washes its hands of the difficulty of administering the present law with the present income. In 10 years the number of postal delivery workers bitten has increased by more than a third. In 1976, 3,992 attacks occurred; ten years later, there have been 5,560 attacks.

Lord Beloff

My Lords, was the noble Lord's postman aware that only half the dogs owned in this country are owned by people who have dog licences? Those victims may well have been bitten by unlicensed dogs. Does that not make it absurd to think of licences as any form of protection for postmen? I am all for protection. However, the licence does not give it.

Lord Graham of Edmonton

My Lords, in the main postmen are worried about liability for attacks by dogs. If one has no system, one is in great difficulty. If there is a licensing system, one at least begins to find where liability lies. Sadly, more than half the attacks that were made on postmen over the past 10 years have come from family pets and not from strays. I have mentioned the word "stray", and I am afraid that that is what I have been tempted to do more than once during this short discourse.

What we are witnessing in the Bill is yet another attempt by the Government to inhibit the powers of local government. The Government are hypocritical in, on the one hand, wanting local people to take a bigger interest in what goes on in local areas and, on the other hand, making that very difficult. What we want from the Government is a little less cant and a little more compassion. What we want is a lot less humbug and a lot more humanity. What we want is a lot more heart and a little less hypocrisy. I intend, together with my colleagues on this side of the House, to try to bring that about by moving amendments at Committee stage.

7.35 p.m.

Baroness Platt of Writtle

My Lords, I should like first of all to join other noble Lords in congratulating my noble friend and wishing him well in his new position as Leader of the House.

My contribution to the debate on this Bill is a narrow one. In my position as Chairman of the Equal Opportunities Commission, in pursuance of its statutory duties I shall speak only in relation to Clauses 18 and 19 of the Bill on public supply on works contracts. I am not bringing forward arguments for or against contract compliance. The Government have agreed that contract compliance can be allowed in those sections of the Bill where there is a sufficient cause, such as a local authority's statutory duty under Section 71 of the Race Relations Act, to have regard to the need to eliminate unlawful racial discrimination and promote equality of opportunity and good relations between persons of different racial groups. That can be seen in Clause 18 on page 17 of the Bill.

The Government have also put into action similar policies in relation to religious discrimination in Northern Ireland. Reasonable and properly directed contract compliance is therefore accepted by the Government. The Equal Opportunities Commission knows from its experience that employers at present develop equal opportunities policies with equal consideration to sex and race, and it strongly feels that that is right. The Government in the past have in general dealt with the two issues in a similar manner. We believe that that should continue to be the case in the Bill. To do otherwise would devalue the issue of policies affecting women in the minds of employers.

The commission has made strong representations to my right honourable friend the Secretary of State for the Environment to put an amendment to the Bill to allow a similar exemption for sex to that for racial considerations in that part of the Bill. Because there is at present no clause in the Sex Discrimination Act which is similar to Section 71 of the Race Relations Act 1976, he has not felt able to do so.

The Equal Opportunities Commission has, for wider reasons, been concerned for some time that there is no parallel in the Act to Section 71 of the Race Relations Act placing a duty on local authorities to have regard to the need to eliminate sexual discrimination and promote equality of opportunity between men and women generally. In its consultative document, Legislating for Change, which was issued last year under its statutory duty to put forward necessary amendments to the legislation, it proposed the insertion of such a clause in the Act. It will put that forward in its final proposals to the Government in a month or two. However, that will be too late for this Bill.

My right honourable friend the Secretary of State suggests that the commission should wait until the Act is amended. That could take some time and meanwhile in employers' minds and in the minds of the public at large it will appear that the Government regard racial discrimination as being of greater significance than sexual discrimination in commercial and industrial life. Women can be forgiven for their dismay at that prospect, particularly as they form 42 per cent. of the workforce and 51 per cent. of the population.

The Women's National Commission is set up by the Government. Its terms of reference are: To ensure by all possible means that the informed opinion of women is given its due weight in deliberations of Government". It has a membership of 50 well-established womens' organisations representing 3½ million women and it feels, as does the EOC, that the two forms of discrimination and the associated provision of equal opportunity should be treated equally. It has therefore made its views known to the Department of the Environment that it would also wish a clause to be inserted in the Bill to put the consideration of unlawful sexual discrimination on an equal footing with racial discrimination. We also know that professional bodies, such as the Institute of Personnel Management, share our concern and wish to see such an amendment.

At the Committee stage of this Bill I shall therefore hope to put an amendment to place sex equality issues on an equal footing with race and to obtain all-party support for its adoption so that in the future as in the past the two forms of discrimination are considered equally by local authorities, public bodies and employers seeking public contracts, and that discrimination against women is not relegated to second place.

7.40 p.m.

Lord Peston

My Lords, I believe very strongly that your Lordships' House should always act cautiously in rejecting what the elected other place wishes to do. However, where the other place uses its powers to limit the freely decided activities of another elected body or bodies, then that restraint is less compelling. Indeed, I go further and say that it is also less compelling when attempts are made to limit the authority and power of any other independent organisations or institutions.

I agree very strongly with what my noble friend Lord McIntosh of Haringey said; namely, that our democracy must be decentralised and must be pluralistic. Another way of putting that is that it must always be difficult for the central government to govern. I say that as someone who is I think a great deal more centraliste and dirigiste than most of your Lordships on the other side of the House. Indeed, I find myself quite puzzled to hear the extraordinary arguments that they are putting forward for centralism on this occasion, if perhaps not on others.

It seems to me that we must see this Bill clearly for what it is, as other noble Lords have said. It is simply based on an unreasonable antipathy to local government and is therefore most unattractive. It is also not merely unreasonable, it is unreasoning in that the Secretary of State's thoughts seem to have been dominated by the activities of a tiny minority of local authorities. He is willing to sabotage all the activities of the overwhelming majority of local authorities simply to attack this tiny minority.

In this connection, let me say—and I have listened to most but not all of the debates—noble Lords opposite today as they have in the past constantly refer to the abuses of "many local authorities". I, like so many other noble Lords, sit here and wait for the "many" and I am always offered the same two or three. I am also always offered the same two or three abuses, most of which, as my noble friend Lord McIntosh has already pointed out, turn out to be speculative and with no basis in fact. They are tired and hackneyed, and I think it is about time that noble Lords opposite either obtained some new facts or went on to a different subject altogether.

I should like to say also that I do not regard this as a trivial or a simple Bill, as one or two noble Lords opposite have suggested, and merely a minor or tidying up operation. I believe that it is part of a fundamental attack on the nature of our democracy. I do not believe that it is trivial. It is one that should be opposed in a broad way.

Having said that, I wish to turn for most of my remarks to Clause 28. I did not know and am sorry to hear that something similar to this proposal was supported in your Lordships' House less than a year ago. Unhappily, I was not present or I too, like the noble Lord, Lord Graham of Edmonton, would have spoken up most fiercely against it. The clause is illiberal and it is also nonsensical. Indeed it is almost unique in its combination of illiberality and nonsense. One must start by looking at it and asking oneself: why is there this emphasis on homosexuality? Why are some people so obsessed with it? What is the evidence that homosexuality is threatening to others or to society as a whole? I have not heard a word on that, and there was no such suggestion in the debate in the other House. Let me remind the noble Lords that most sex crime is heterosexual; most child abuse is heterosexual. Are we asked to believe, quite against the facts, that homosexuals are, as it were, generally less law abiding than the rest of society? Are we asked to believe that homosexuals are less useful to society than the rest of us? Indeed, I ask myself as I listen to this debate and read the debates in the other place whether the proponents of this clause and those who support them actually have the faintest idea of what they are talking about.

Let me turn specifically to Clause 28 and again go over the ground. What is supposed to be meant by "the promotion of homosexuality"? Does it mean that in schools no work written by a homosexual is to be in the curriculum? Or does it mean that only the homosexual works or homosexual parts of works written by homosexuals are to be excluded? I refer to what the noble Lord, Lord Beloff, has said, because the same thought occurred to me. Would works of literature that show homosexuals living unhappily or coming to an unhappy end be acceptable? Would that great jewel of European literature, Proust's "A la Recherche …", be acceptable but would anything else written that suggests that perhaps there are one or two homosexuals who actually live a decent life be counted as promoting homosexuality?

How are the teachers supposed to respond to questions put to them by intelligent school children? Is a question on Marcel Proust acceptable because his life was unhappy, but a question about Benjamin Britten or Peter Pears quite unacceptable because there we seem to have an example of a stable relationship? Is the new, brilliant work by Richard Ellman on Oscar Wilde to be banned, even though, since Oscar Wilde's works themselves do not seem to be exclusively homosexual, they are to be accepted and recognised as part of the great canon of English literature?

The Earl of Longford

My Lords, may I interrupt and ask the noble Lord whether he will not agree that homosexual activity as distinct from homosexual feeling is forbidden both by Christian and Jewish teaching?

Lord Peston

I do, my Lords; but I do not have the faintest idea why that is relevant to this debate. It does not seem to me that the view that one has to take—or some of us do—should be what is determined by either Christian or Jewish teaching specifically in its original or primitive form. Some of us believe that in the past 2,000 years there have been some developments in human thought and human moral values and therefore are not ashamed to take a different view.

Let me turn away from that to another area, since I have concentrated on literature. What about works in the social sciences, if I may talk about my own field? Is Professor Skidelsky's first volume of his biography of Keynes to be kept out of school libraries because there is an extensive discussion in that work about Keynes' homosexuality? Or is the point rather—and this will no doubt please some noble Lords opposite—that because of what we now know about Keynes, Keynesian economics should not be taught in schools on that account? If that view were to be taken by people ignorant of economics. I simply make the point to them that several of the leading anti-Keynesians of Keynes' day were not exactly well known for their great belief in heterosexuality in any form whatsoever.

However, I go further, because the question that I ask myself is whether anybody believes that the occasional, and as far as I can see rather naive attempts to push forward homosexuality actually make anyone into a homosexual. Do they in fact do anything of any sort? The concern here is not that, is it? Surely it is more a concern or, if I may use a word used earlier—a compassion for those people, young people in particular, who discover that in some sense they are homosexual but live in a society which is predominantly heterosexual. Is not the point here to try to help them to come to terms with how they find themselves?

The key issue is not homosexuality. Is it not of fundamental importance that the majority of people in our society, the majority of children in schools, who are heterosexual should learn to understand and be sympathetic to the problems of the minority? Given that, I ask this question. Why should local authorities be explicitly forbidden to operate in this area? It would seem to follow that not only are local authorities forbidden but all kinds of voluntary bodies that might be helped by local authority finance would also be forbidden to act in this area. One asks two questions. If that is so, who should be permitted to act in this area? Should the broadcasting authorities also not be prohibited in this way? The whole issue becomes more and more preposterous. To argue, as was argued earlier, that the word "promotion" is so obvious, and that there is no difficulty with it, is ridiculous in the extreme.

My view is that this is a nasty and vindictive clause. I am fearful that the nasty and vindictive people who promote it, and who have misled others, regard it as not simply a clause but as the first step in a general attack on homosexuality in our society. I am not merely fearful; I know it for a fact because they have said so. Viewed in the long-term perspective of history, our descendants will look at us in amazement and dismay both for the time that we waste on this matter and certainly with shock if we allow this clause to pass into law. I very much hope that during the next few weeks, in the later Committee stages of this Bill, I shall be able to vote against this clause and to rid this legislation of it.

7.52 p.m.

Lord Mackie of Benshie

My Lords, I shall not follow the noble Lord, Lord Peston, in making my main subject that of homosexuality and the treatment thereof. However, it is part of the general philosophy of the Bill. There is no question, as the noble Lord, Lord Boyd-Carpenter said, that a government have a duty to put right the excesses of perhaps a small local council where the extremists have control. They have a duty to protect the majority in that community, if the legislation and the tendency subjects them to the kind of example that has been quoted.

One of the great troubles with homosexuality is that there is a prejudice among the majority of the tribe. Nothing does more to increase that prejudice than the kind of nonsense that these councils have been promoting. To teach children in school that it is a natural relationship compared with marriage, and to publish literature on it which has been quoted, increases the prejudice against the homosexual. We have advanced greatly since the War in the understanding and treatment of the minority. The kind of matter that was quoted from the other Benches does great harm to the homosexual community, and subjects them to persecution. I am not against controlling the kind of examples that we have heard. I believe that the Government have the right to do so.

On local government generally, I am afraid that the Government are on a path that leads to more and more centralisation. I do not think that they are tackling this with local government at the source. In local government fewer and fewer people are voting. A smaller percentage of the electorate are voting. One has less and less responsibility. One has a voting system—and do not say, "This is the hoary old issue of PR"; it happens to be true—where at least half the councils to which the Government object so strongly as extremist would never have had a chance if we had a system of voting which gave a fair representation in the council chamber of the views of the electorate. The longer they go along the centralisation path, the more they will have to pursue this subject. One adopts sensible rules, and gives the people a chance to elect people. One adopts a system of local taxation which is fair. I do not think that the poll tax will be fair. But I think that one could extend the responsibility greatly with a local income tax, as suggested by the Tory Reform Group.

However, I wish to follow the noble Lord, Lord Morton of Shuna, and to talk a little about Scotland. It appears to me that there is a very strong case for devolution of government. One has a Bill in which one can point to a large number of small anomalies. The noble Baroness seemed to think that they could all be sorted out. I believe that they can be sorted out and that is why we shall have to examine the Bill with great care. But the case of the Western Isles stands out. There one has a single-purpose authority. It is a very remote area. There are stormy seas separating the Western Isles from the mainland. Unless the rules are relaxed, they will be in trouble. The council has sent me a brief, as it has to many other people. The council states categorically: There are no contractors in the Western Isles with the degree of expertise or experience to give the Council confidence that those contractors could undertake each of the defined activities in a professional and competent manner.". I can believe that. Obviously, there will be different circumstances that will have to be dealt with. Although this is not a Scottish Bill, we shall have to examine the particular cases very closely. I hope that the noble Lord, Lord Sanderson, will help us in this examination to see that the anomalies which will arise over the tendering for services in Scotland and remote areas are sorted out.

A case in point is that in Aberdeenshire, or the Grampian Region. This area has extreme snow storms, and becomes snowed up very frequently. A centralisation of services would affect the situation greatly. There was a classic case during the war when the snow-clearing equipment was centralised in the quarry at Belhelvie. When a snow storm came, the equipment could then be spread out over the county and clear the roads. Unfortunately, the snow storm filled the quarry and its was a fortnight before the authority could reach the snow-clearing equipment. That was an example of centralisation that the Government would do well to ponder upon. We have to look at this issue with great care.

Noble Lords have talked in both a serious and funny way about dogs. The noble Lord, Lord Houghton, has brought up constitutional issues. However, I should like to talk about them from an agricultural and a general, social point of view. There is no doubt that for some extraordinary reason the Government are running away from an opportunity to do something about this issue. It is quite ludicrous and heartbreaking that every Christmas there is an enormous trade in puppies, and some weeks later these puppies are given away and destroyed when the initial interest wears off and the responsibilities become apparent. Something like 1,000 dogs a day are destroyed in this country. Those are figures given by vets. This is a matter about which we should be doing something. It is scandalous that the Government are doing nothing about it. The figure given was £400,000 raised from the licence, and it cost £3 million to collect. If that is multiplied by a licence costing £10 a head, which is low by European standards, the sum reached is £12 million. Then local authorities could employ people to rectify the undoubted harm done by the thousands of dogs that roam and foul the streets, as some speakers have said.

There is also the damage done to agriculture, which is very large indeed. Not only are several thousand sheep and other animals savaged each year by stray dogs, but it becomes impossible to farm any stock near a town. There are plenty of examples. In Ulster the licence has been put up to £5. It appears to be working very well. In Ulster people are employed to look after stray dogs, to follow up the licences and to enforce a whole host of practical and sensible measures. I do not know what the constitutional issue will be. No doubt the noble Lord, Lord Houghton, will be able to get round it, but we should send a strong message both to the Government and to the Commons that this is a not a funny subject but a very serious one. It is something we must tackle—if not in this House, at least we can start it here.

8.1 p.m.

Baroness Blatch

My Lords, I too should like to congratulate my noble friend Lord Belstead and offer him the warmest possible wishes for a successful tour of duty. I am also strongly in support of the Bill and am a staunch supporter of local government. I shall refer mainly to the first part of the Bill that deals with competitive tendering. For many local authorities, but sadly not enough, the Bill will do no more than simply endorse what they are doing. Others, again sadly a larger number, assume that what they are doing is absolutely right, that what they are doing is both cost-effective and operationally effective, but they do not test that view by submitting their services to competitive tendering. There is something of an arrogance about that stance.

Some other authorities—I agree with many of my noble colleagues opposite that it is a minority—are not interested in competitiveness. They are philosophically and politically opposed to working competitively. They indulge extensively in contract compliance, which I certainly could not support. They claim for themselves an autonomy which disregards the fact that they operate in the same world as all public government: that is, working within and with central government. To claim for themselves an autonomy that disregards that they are part of the whole is quite wrong.

Unlike most of your Lordships I claim the right to speak tonight in this debate as a member of a local authority which I have served for the last 10 years. I do not see the Bill working against my interests as a councillor, nor do I see it working against local government. However I see it joining with me as a local authority councillor, working as a guardian and interested in those people whom we serve: the public, who in this debate have had very little concern shown to them by noble Lords opposite.

Reference was made earlier to morale being low in local government. I admit that my own morale in local government is low because time out of number I find myself standing in my council chamber where the topics on the agenda have very little to do with our business of providing local services for local people. We find ourselves discussing defence, national policies, South Africa, the third world, hunting, positive discrimination for gays and lesbians, and so it goes on. I speak as a real councillor in a real council chamber discussing these matters even as recently as this last year.

We in local government will not deserve the support that we surely will be looking for when we are fighting for the right of local government to exist for a public whose perception of local government at this moment is not a very happy one. I shall do what I can to enhance that reputation of local government and the Bill will do much to support me in that effort.

I am at a loss to find good arguments against the requirement for competitive tendering. Local authorities, indeed governments themselves, have no monopoly in providing the most cost-effective and the most operationally effective services. It is people who do the jobs. It is people who clean buildings and repair cars. The issue is about management. The issue is about the humane management of those workforces, with the objective of producing the best possible job. For local authorities the issue is to see that those services are provided by the best possible provider. It is not important whether that provider is a local direct labour organisation that may win the local services, and so be it, or a private sector provider. The new skill that local authorities must learn is how to manage contractors.

Lord Graham of Edmonton

My Lords, I am grateful to the noble Baroness for giving way. Is she aware that last Friday I went to Chase Lane school in Chingford at lunchtime to observe the dinner ladies who will be affected by the Bill if it becomes law? They are dedicated people and provide the best possible value for money. But they are right in believing that if the Bill is passed and they win the contract, it will either result in a diminution of the value of what they provide or a reduction in their wages and conditions.

Baroness Blatch

My Lords, I thank the noble Lord for that intervention. If the noble Lord is saying that those people are threatened but is claiming that they are doing the best possible job, and if we are saying that the right of the local authority to determine the level of services is not to be impeded by the Bill, then those people will not be threatened by the Bill. The local authority has the right to determine the level of service. If those people are providing it, they will win the contract.

Reference was also made earlier to our being as concerned with input as we are with output. As somebody working in a local authority I absolutely agree with that, but too often we concern ourselves only with input and we spend very little energy on measuring output. If we spent more energy on measuring output we might sometimes be a little more critical of some of the services that we provide.

I am pleased that the Bill incorporates a suggestion I made a long time ago when I knew that the Bill was in the offing. It is that there will be no requirement or demands on local authorities necessarily to take the lowest possible tender. I am pleased that where we do not accept the lowest possible tender we are required to tell the contractors why not. We are also required to tell our electorate why we have chosen either to determine a higher level of service or why, for one reason or another, in researching the credentials of a company, we have determined not to employ it.

I have direct experience of a local authority in the Cambridgeshire County Council. When we contracted-out school cleaning at a saving of £750,000, which we put directly back to the classroom to further the education of the children, we did not accept the lowest tender and we were very happy to tell the world why. But in the process of going through that exercise we found out how little our officers knew about the service that prevailed at the time. They knew little of what was happening. We had a bonus scheme that paid for good, bad or indifferent service. We were victims of that terrible local government problem that we paid the same for good, bad or indifferent service. It seemed to me that we found as many things wrong with the way in which we did things ourselves, and there was benefit to our authority simply by going through the exercise. Sadly, for political, dogmatic reasons that contract was overturned at a considerable cost to the ratepayers in Cambridgeshire. Contract compliance would be an issue for my authority. We already spend time, energy and a considerable amount of money on researching South African links with anyone with whom we do business.

The noble Baroness, Lady Stedman, earlier referred to contract compliance and to how infrequent that happens in our authorities. Her own local authority will not allocate business to any company which has any connections with RAF Molesworth, where cruise missiles are or will he installed.

One of the advantages of allowing work to go out to private companies, if they win the contracts against direct labour, is their flexibility as regards rates of pay. Much concern has been expressed about low rates of pay. It has always been my experience that in this field rates of pay were never lower. However, because private contractors are freer than are local authorities they are able to pay considerably over the odds and they do so where labour is scarce. Further, they have a flexible paying arrangement where labour is not so scarce.

So far as I am concerned, the primary responsibility for local authorities is to ensure that provision is made for its electorate. That will be strengthened by the Bill and will certainly be as important as it is at the moment. However, in ensuring that that provision is made the authority need not necessarily be the provider. It is also important to monitor, and the proposals in the Bill allow authorities enormous flexibility in bringing into play penalty clauses, provided that they have the correct job specifications in the first place. That is another skill which local authorities must learn.

I remember that we in Cambridgeshire spent a great deal of time achieving the correct job specification. I was most depressed to learn that we did not have a detailed job specification for our own direct labour force; hence we were not able to carry out proper monitoring on whether it was effective.

I should like to express a concern as regards authorities which go through the motions of competitive tendering with no real intention of putting the work out to contract. In that respect, I find my Alliance colleagues to be the most guilty. I find that they use the rhetoric of competitiveness and pay lip service to the intention, but when it comes to making hard decisions they back off. That harms the private sector, which spends considerable amounts of money, time and energy in responding to the contracts, only to find that at the end of the day it is politics which come into play and not objective judgments.

I should like to refer to misinformation. It is interesting that the borough of Merton has been mentioned and that it has been suggested that contractors had a monopoly of the work. It has been alleged that Merton was a failure because one company was sacked. The truth of the matter is that the first contractor was indeed sacked for failing to fulfil the contract. A new company was appointed with no loss of service to local schools and a substantial improvement has taken place. However, the irony is that, on the one hand, Labour members argue that there is a monopoly in the industry and, on the other hand, a contractor will be replaced by another private sector firm when he is dismissed.

It has also been alleged that in the borough of Merton a contractor was fined £23,000 and forced to increase his workforce from 99 to 121. Again, the truth of the matter is that in the first year the company was fined £23,000. However, £18,000 referred to the first month and noble Lords know that, logistically, changing from one system to another can produce problems such as those which arose in my own authority. By the sixth month the number of poorly cleared streets was only 2 per cent., and that figure is higher than any that has since been recorded. Moreover, that standard was far better than any DLO had previously achieved. There was an increase in manning levels over the first year but that was still lower than those under the local council service. They were also provided at no extra cost to the ratepayer because they were in the contract. Surely that is an example of an achievement and not of a failure. In other authorities where there has been no privatisation, extra costs must be met by local authorities, and so forth.

Dealing with monopolies, it is interesting to note a figure that has been bandied around a number of times during the debate and which relates to two companies, BET and Hawley. In the refuse collection field BET holds, through its subsidiaries, Exclusive and Biffa, only eight contracts out of 27, and Hawley holds four contracts. In the NHS, BET holds 56 contracts out of a total of 220; the Hawley Group holds 55 contracts. In addition, there are 36 other companies which are involved in performing health authority contracts. Following the announcement of the Bill, already over 130 companies have registered an interest in working within the local authority sector. Therefore misinformation is being used and I have no doubt that the subject will he dealt with again during the Committee stage.

In dealing with propaganda as regards the rates, I speak not from second-hand but from first-hand experience. As leader of Cambridgeshire County Council I was constantly invited to conferences to discuss South Africa, defence, nuclear-free zones, and always by local authorities which were sponsoring them. I was offered attractive invitations to attend far-flung conferences at no expense to myself or to my authority. I would usually telephone my apologies for not attending their conferences, but, as I say to my children, nothing in this world is free. Therefore, who is to pay for the hall; who is to pay for the speakers; who is to pay for the creche that will be provided? In every case, the answer was that the local authority would pay; and that meant that the ratepayer would pay. However, I shall leave it to my noble friend Lady Cox to deal with the matter in more detail.

As regards Clause 28, dealing with homosexuality, as a parent of children who left school last term I am in no doubt that I know what promoting homosexuality means. I shall not haggle about the wording, but if it means that homosexuality will not be promoted in schools that clause in the Bill has my support.

I am sorry that the right reverend Prelate the Bishop of Manchester is not present at the moment, because he assumed that the House was unanimous in its opposition to sin. I agree that I am in opposition, but as a communicant member of the Church of England I am not entirely sure that the Church of England is unanimous in its opposition to sin. Nor am I entirely sure that it is unanimous in its definition of sin.

In conclusion, I should like to return to the main thrust of the Bill—competitive tendering. Enlightened local authorities which are already submitting their services to competitive tendering, and which are already communicating with their electorate and exposing what they are doing, have absolutely nothing to fear. Those local authorities which assume that everything they are doing is cost-effective and operationally effective may be surprised when they put their toes in the water and submit all the services required in the Bill to competitive tendering. I believe that once they have tried that they will find it to be a healthy experience. Those local authorities which wilfully oppose competitiveness and are wilfully uninterested in it, and which are not openly communicating with their electorate about the efficacy of their services, have a great deal to fear from the Bill. It is my hope that they will at least be brought into line.

In my book one thing is for sure: the real beneficiaries are those who, sadly, have not been mentioned a great deal in the debate. They are the people who consume the services and who must pay for the services. The Bill will have my unqualified support.

8.19 p.m.

Lord Pitt of Hampstead

My Lords, like the noble Baroness who has just sat down, I congratulate the Minister on his promotion and wish him every success. We have known him for a long time. We know he will do well in his new job because he has performed well in this House, at least, since I have been here. I am afraid that is where the noble Baroness and I part company because I personally am very sorry that this should be the Minister's first Bill. I genuinely believe this Bill should never have been brought forward.

The aim of the Bill is to improve efficiency and effect savings by enforcing competition. With that we all agree. However, in doing so the Government have enforced the competition; and, in trying to enforce it, they are forcing the local communities to pay heavy social costs. The social costs lie in their rejection of contract compliance and in the consequential loss of equal opportunities for women and people with disabilities, and the centralising of the way in which local authorities carry out their duties under the Race Relations Act. That Act had Section 71 included because there were local issues and activities which should be done locally to make sure that we have equal opportunities and good race relations. It cannot be done by centralising the questions that should be asked.

I was going to say that I am half with the noble Baroness and half against her, but I think I am 90 per cent. against her and 10 per cent. for her because the villain of the piece is Part II of the Bill, in particular, Clause 17; and more particularly subsection (5). Consequently, we are being asked to pay the social costs that I have previously mentioned and I really hope that the Government will have due regard to the points made by the noble Baroness, Lady Platt of Writtle. If Clause 17 remains in the Bill, I hope that there will be an appropriate amendment to meet the case that she has made.

To my way of thinking many of the prohibitions in Clause 17(5) have not been carefully thought out. For example, the terms and conditions of employment of contractors are a vital consideration because increasing costs are usually the result of increased wages; and an increase in profits is usually the result of reduced wage rates and a reduction in wage rates in a stable situation often results in industrial strife. Thus the conduct of contractors—and this is another of the matters in subsection (5)—in local disputes can also be a very valid consideration because it may indicate the possibility of industrial problems in the area leading to strife. Of course—and we must never forget this—the local ratepayers have to pay part of the police costs.

Again, it is legitimate for local authorities to take into account the country of origin of supplies and the country or territory in which the business activities or interests of contractors are located. Your Lordships will notice that in each case I am using the words that are in the Bill. Again, that could be responsible for creating strife in the area of the local authority.

Many individuals refuse to buy products from South Africa. A recent survey showed that the percentage is as high as 40 per cent. To those people, not to buy a product from South Africa presents them with a dilemma. If they know it is from South Africa they can forgo it, but it is certainly wrong to force them to eat it by not telling them from where it has come. It is wrong for a local authority to force on people in its area goods which in their private lives they refuse to use. It is therefore legitimate—and I use the words advisedly—for local authorities not only to ensure that contractors provide an efficient service (they have to do that) but also that the products which they supply are those which ratepayers and other members of the community wish to have. I go further and say that it is wrong—and again I use my words advisedly—for central government to use their political power to force people in those areas to accept products which they do not wish to have. I regard that as wrong.

The same holds good for the use of services which have the effect of helping to provide financial support for a hated regime. Many people will not use banks or firms with links with South Africa because they are not prepared to help to support apartheid by helping to provide its financial base. They have a right to say that they are not going to do that. It is equally right for their local authority to give effect to this and to refrain from using ratepayers' money to support banks or other organisations that help to finance apartheid.

Moreover, there is a commercial base to it. Barclays Bank has withdrawn from South Africa and I am sure it has done so for commercial reasons. The local authority may well have to consider a further point. In dealing with these people who have this connection which (shall I say?) is insecure—many people, think that the future of South Africa is insecure and therefore is not a good financial risk—the local authority has an equal right to take the view that it will not bank with people whose money may not be safe. It is not a straightforward idea that, merely because the Government do not think that sanctions against South Africa will work therefore no local authority has a right to say that it is not going to deal with South African companies or any financial institutions that are financing South Africa. Local authorities have the right to do that because many of their citizens think it is right.

I should have thought that the worst consequence of Clause 17 is the inability to use local labour. Members of the Government talk glibly—and I say glibly because I once accused them of it being a gimmick—of wanting to do something about the inner cities. One of the most important considerations in the inner cities is that, whatever development and construction and economic activity is taking place, there should be a certain amount of local labour. To put on the statute book a Bill which could have the effect of making that difficult, or even preventing it, is, to my way of thinking, a way of cutting one's nose off to spite one's face.

Moreover, if there was not the Bill the issue would not arise. I understand that in 1986 Birmingham constructed a centre with a 30 per cent. grant from the EC. It had a condition with the contractors that 30 per cent. of the labour should be local. The EC did not challenge it. We are now putting a law on the statute book which will make that difficult. Therefore, I hope the Government will think again. The Government should look to see whether a code of practice acceptable to the local authorities can replace Clause 17. The clause as now drafted could have serious consequences for the community.

I wish to comment on the centralisation attitude of the Bill. I illustrate that by the housing powers. Local authorities are given powers to do certain things which they are doing anyway. But now they will have to get permission from the Secretary of State. I use that small point to illustrate what I am saying; namely, that the whole Bill has a centralising flavour. It is the Secretary of State who will always know best; and so it is he who must decide. I beg the Government to try to tone that down.

Finally, I wish to say to the Minister that many clauses of the Bill are very complicated. I hope that there will be a liberal supply of notes on clauses.

8.32 p.m.

Baroness Blackstone

My Lords, I fear that this Bill is yet another example of centralist intervention in the work of elected local authorities who are trying to develop and implement policies which they consider meet the needs of their own communities. If it becomes law without substantial amendment, the Bill is going to greatly increase central power. As such it poses a further threat to the delicate balance between central and local government which has been built up over very many years and which is an important linchpin of our constitution.

The massive centralising tendencies of this Government are reflected not, I am afraid, just in this Bill but in practically every piece of legislation concerning the public sector that the Government are bringing forward. As my noble friend Lord McIntosh said, this can only result in the concentration of power in the hands of too few people, destroying pluralism which is one of the most important characteristics of a healthy, democratic society.

The Bill also contains clauses that reflect prejudice and illiberalism and that pander to hostile attitudes towards certain minority groups—attitudes about which we should be ashamed and which the political leadership of this country has an obligation to try to alter.

I wish to confine my remarks to the part of the Bill that deals with contract compliance, concentrating on slightly different aspects than did my noble friend Lord Pitt. Later, I wish to deal briefly with the clause relating to the so-called promotion of homosexuality. Repeated surveys by the independent research organisation, the Policy Studies Institute, have revealed the frightening extent of racial discrimination in employment in this country. Although we have legislated to outlaw it, much discrimination still takes place, partly because it is often very subtle and difficult to prove. The bringing of individual cases under the Race Relations Act is a cumbersome and difficult process. Further action is therefore required.

Unlike the noble Lord, Lord Beloff, I believe it is appropriate to make comparisons with the United States. I wish to spend a little time doing so. In the USA it has been clearly recognised that contract compliance at both national and local levels is one form of important action which is needed. It was as long ago as 1965 that the Office of Federal Contract Compliance Programmes was set up, and in 1968 the first company was debarred from further federal contracts for failing to comply.

A recent evaluation of the effectiveness of US policies demonstrates very clearly their success. The findings show that literally thousands more black and ethnic minorities and women have been moving into highly skilled jobs, into more senior positions and into training schemes than before. More of them have obtained jobs. Contract compliance is an accepted plank of public policy in the USA at national, state and local level, and it has remained so throughout Mr. Reagan's administration.

It is a very sad fact that we are nearly 20 years behind the United States. Why, then, have the Government been dragging their feet in introducing contract compliance and promoting equal opportunities in employment? Why are they now introducing legislation which will discourage local authorities who have taken the lead and innovated where central government have actually failed when they should be encouraging these authorites?

Sadly, the Secretary of State for the Environment, until recently, seems to have been more willing to listen to the baying voices of the extreme right than to more progressive conservatives or to the many thoughtful chairmen and chief executives of major British companies who are now in sympathy with the objects of contract compliance in relation to equal opportunities.

One such business leader is the noble Lord, Lord Sieff, of Marks and Spencer, a firm apparently very much admired by Mrs. Thatcher. She is often exhorting officials in Whitehall and others to be more like Marks and Spencer. The noble Lord, Lord Sieff, is on record as saying that Marks and Spencer has found it necessary to discuss with and encourage a number of its suppliers to instil decent working conditions and opportunities. This is what contract compliance is trying to do.

It is a high priority of the Government to try to solve the problems of the inner cities and to achieve the very important objective of urban regeneration. I think we all welcome that. They have emphasised that creating more employment is central to achieving that. As my noble friend Lord Pitt has said, all of their efforts in job creation will be of very little value if people are to be recruited from outside those areas. A combination of contract compliance and local labour policies are vital ingredients to their success. It is therefore particularly puzzling that the Government are seeking to restrict and control local authority activities in this area.

Reverting to the USA, one of the most interesting testimonies at the Bork hearings in the Senate was that of Andrew Young, the Mayor of Atlanta. Defending equal opportunity programmes including affirmative action in employment and contract compliance, Andrew Young explained their central role in the Atlanta success story. Once a city suffering from very severe urban deprivation, it is now prosperous and its prosperity is shared by the whole community because of the very success of those policies.

Only last week, Kenneth Clarke, the Chancellor of the Duchy of Lancaster, was in Atlanta to see for himself the operation of those inner city policies. Everywhere he went he will have been told the same story—that affirmative action directed particularly at the black community, but also at women, is an essential ingredient in their success.

Perhaps the Secretary of State for the Environment should also visit the United States in the interests of maintaining rather more consistency between the Department of Environment, the Northern Ireland Office, the Department of Employment and the Home Office, all of which at various times have been more positive about contract compliance in this area than this Bill. We have even had the really absurd situation in which the Department of Employment Race Relations Employment Advisory Service was urging employers to adopt the CRE's code of practice for good employment, while DoE policy was to prevent local authorities from persuading employers to use the very same code of practice. How ridiculous!

While the Government have made an important concession—and, for the reasons I have just given, a very welcome concession—in that part of the Bill relating to race and contract compliance, we are still left, I fear, with a policy which is both confused and contradictory. While local authorities will be able to ask new contractors questions about their employment policies, they will only be allowed to take into account answers to such questions prior to entering a contract and they will not be allowed to terminate a contract. In actual fact, the Government have invented a problem which does not exist. All local authorities pursuing contract compliance for equal opportunities purposes have focused on new contracts. None has terminated an existing contract. Nevertheless, the possibility that local authorities may do so is a useful form of pressure on firms to ensure that they maintain equal opportunities policies. The Government appear to want to remove this pressure.

There is also a contradiction in the fact that the Government are willing to make a major concession but are not willing to use the existing statutory code of practice on good employment. Instead, the Secretary of State for the Environment is taking new powers to determine the questions that local authorities may ask and the evidence they may seek from firms in support of the answers provided. Why on earth does he need such excessive powers? Why not let the local authorities get on with it?

He is also greatly increasing the degree of bureaucratisation by insisting that all dealings under this section of the Bill have to be in writing. Many of the details can be sorted out on the telephone or even in informal meetings between representatives of firms and local authority officials. I speak as an ex-local authority official.

More important perhaps than any of these details is the fundamental muddle in the Government's thinking, which now concedes the desirability of contract compliance in relation to racial discrimination but does not do so in relation to sex or disability. The desirability of removing discrimination in these areas is obvious. In neither case is it just a matter of social justice, although I believe this to be of fundamental importance. If this country is to prosper it must use the talents and skills of all the people. If half the population is not reaching its maximum potential then we have a monumental waste. Similarly, it is in the interests of us all that disabled people who are willing and able to work should do so rather than being dependent on the state.

Currently, local authorities can include questions on sex and disability in their contract compliance procedures. If this Bill goes through unamended they will be unable to do so. The Equal Opportunities Commission has made it clear that it wants the introduction into the Sex Discrimination Act of a Section 21-type duty as in the Race Relations Act, as we have already heard from the noble Baroness, Lady Platt. If the Home Secretary concedes this and amends the Act, we shall be in the ridiculous position of having just outlawed the pursuit of equal opportunities in relation to gender in contract compliance unless this Bill is amended. Why cannot the Government anticipate change and act now on the Bill before us? I shall certainly support the noble Baroness, Lady Platt, in her amendment.

Turning to disability, the failure of the great majority of employers, whether in the public or the private sector, to meet the requirements of the 1944 Disabled Persons Act is, I am afraid, a reflection of prejudice, indifference, and a terrible lack of imagination in creating the working conditions which would make it possible. While existing contract compliance procedures do not insist on the 3 per cent. target, they are at least able to draw employers' attention to the 1944 Act. The Government's lack of commitment to helping a group of people who are already at considerable disadvantage in the job market is sadly illustrated by their rejection in another place of amendments designed to ensure that the duties of the 1944 Act are upheld by contractors.

I should like to conclude with a brief reference to Clause 28. Only a year ago Ministers in this House rejected a Private Member's Bill to restrain local authorities from promoting homosexuality. Their reasons included the possible harmful misinterpretation of terms such as "promotion" and "acceptability". Those are good reasons and they still apply, so why the U-turn?

The real problem is that it is extraordinarily naive to believe that this clause will operate in practice simply to deal, as has been said by several of my noble friends, with the tiny number of local authorities which have gone over the top on this matter. I am afraid that it will be interpreted in a quite different way. It will be interpreted as a signal that homosexuals are second-class citizens involved in unacceptable relationships. Some of those who support the clause are on record as actually wanting to recriminalise homosexuality. We are on a slippery slope of intolerance and censorship.

As my noble friend Lord Graham of Edmonton has said, because of the vagueness of the term "promotion" many perfectly acceptable activities by local authorities may be stopped. This includes providing accurate information for young people about homosexuality, publicising facilities for homosexuals, carrying out any activities designed to counter discrimination and intolerance—and I am sure we all agree that that is desirable—providing specialist counselling and advice services, or literature in public libraries written by homosexuals about their way of life (and we must of course remember that homosexuals, like everybody else, are ratepayers) or supporting artistic work, for example, in the theatre where homosexuality is portrayed positively. Are we in fact going to see a purge in public libraries of the works of E. M. Forster, Christopher Isherwood, Mary Renault, or Virginia Woolf? Marcel Proust may not promote a positive image of homosexuality but many other homosexual writers do. Will it become illegal to provide financial support for a production of Joe Orton's "Entertaining Mr. Sloane"?

Finally, the phrase "pretended family relationship" is offensive to many homosexuals. It is an insult to those who have set up home with someone of their own sex and have established a stable and loving relationship, which is their family. Families can take many forms. Young people know this. They live in many different forms of family. It is a pretence to set up a model of mother, father and children as the only acceptable form.

There can never have been a better example of taking a sledgehammer to crack a nut than Clause 28 of this Bill. The noble Lord, Lord Skelmersdale, said of a similar Bill a year ago that it was unnecessary, and so did the noble Baroness, Lady Hooper, who said that it was not necessary or an appropriate method of dealing with the problem. What was unnecessary and inappropriate then still is today. I must agree with my noble friend Lord Peston: the clause should be dropped altogether.

The Earl of Halsbury

My Lords, before the noble Baroness sits down, could she clarify a possible misunderstanding by me of what she was saying? I understood her to say that the Bill was rejected by this House. No, it was not. It failed in the House of Commons due to technical abstention from voting and being counted out.

Baroness Blackstone

My Lords, I did not say that the Bill was rejected by this House. What I said was that Ministers in this House rejected it.

8.50 p.m.

Baroness Cox

My Lords, I wish to support the Bill in its general principles and the way in which those principles are to be translated into various practical policies. However, I must emphasise at the outset that I agree with my noble friend Lord Bellwin that it is a sad day which sees the need for some of the provisions contained in the Bill.

Traditionally, local government, whatever its political complexion, has gained the respect of the communities it has served, and that is still the case in many parts of the country. However, it is also important to note that local government is a crucial counterpart to national government, providing for democratic accountability in the provision of local services. It is therefore only with great reluctance and caution that central government should seek to curtail the autonomy and activities of local government. However, recent developments in some areas have caused great concern to many people of different political convictions, and not just to Conservatives.

For example, Alan Alexander, former leader of the Labour group in Berkshire, has admitted in a Fabian tract, Managing Local Socialism, that, There is a degree of public disquiet about the way in which some labour controlled authorities arc run. In their zeal to implement socialist policies some local politicians may sometimes give crucial democratic values short shrift". It is because there is evidence to show that some local authorities have abused their power and resources in a number of ways that this Bill is necessary. I shall limit my contribution this evening to discussion of just two aspects of the Bill: the provisions to outlaw the use of public money, first, for partisan political propaganda, and, secondly, for the promotion of positive images of homosexuality in schools.

Perhaps I may deal first with the provisions in Clause 27 designed to amend Section 2 of the Local Government Act 1986 with regard to the prohibition of political publicity by local authorities. This prohibition is necessary because a number of authorities have devoted large sums of public money to partisan political propaganda and to propaganda relating to matters of national policy which have nothing to do with local government responsibilities, as my noble friend Lady Blatch has described.

One example of this kind of abuse of local government money is the enormous sums which have been spent by many local authorities on promoting so-called nuclear-free zones, a point which was raised by my noble friend Lord Boyd-Carpenter. A publication appropriately called It Costs a Bomb, by Professor David Regan, professor of local government at the University of Nottingham, describes the growth of the nuclear-free zone movement, launched in Manchester in 1980 and now joined by more than 170 local authorities throughout Britain. By 1985, when that study was published, more than £10 million of public money had been spent on the nuclear-free zone movement.

As Professor Regan has argued, in a recent publication entitled The Local Left and Its National Pretensions: A nuclear free zone is a declaration by a local government against the manufacture or deployment of nuclear weapons within its municipal boundaries. Such a declaration cannot be enforced but provides an excuse for an expensive propaganda campaign against current defence policy and the nuclear deterrent. The original Manchester resolution spoke of creating a 'European nuclear free zone. If the British people want a European nuclear free zone, they can return a government to Westminster favouring one". It is important to remember that the diversion of such large sums of money for such partisan political purposes is at the expense of the traditional responsibilities of local government such as the provision of housing or social services. This often happens in areas where those needs are most acute.

The Government tried to tackle these problems in the Local Government Bill 1986, but the wording was ineffectual. The new proposed wording in Clause 27 should, however, be satisfactory to eradicate such use of public money on the promotion of tendentious political propaganda, while leaving intact the autonomy of local authorities to spend money on publicity in ways which were originally intended.

I should like to ask my noble friend the Minister one question in connection with this issue. Just before I do so, I should like to add my warm and sincere congratulations to those which have been expressed throughout the course of this afternoon. I should like to ask my noble friend whether the clause also prohibits wording which is politically partisan in advertisements for posts of council employees. A growing number of advertisements seem to be couched in politically partisan terms. I now turn to the second aspect of the Bill that I wish to highlight: the proposals to outlaw the use of public money to promote homosexuality, including the promotion of homosexuality in teaching in schools. It is on the latter aspect that I wish to focus. First, perhaps I may emphasise that, as the noble Lords, Lord McIntosh of Haringey and Lord Boyd-Carpenter, have both said, this is a matter which needs to be discussed with great sensitivity. Perhaps I may also emphasise, as I have done previously, that I am not averse to responsible discussions in schools, with pupils at appropriate ages, of matters relating to the fact that people have different sexual orientations. Indeed, I strongly favour teaching and discussions which lead to increased understanding, especially as a number of senior pupils are likely to be discovering that they are themselves homosexual.

However, I believe that recent developments in some local authorities have had precisely the opposite effect. By aggressive anti-heterosexist policies and by expenditure of large sums of public money on the active promotion of so-called positive images of homosexuality, they have caused grave offence to many parents and have thus violated the trust invested in them to provide schools which should be serving their children in loco parentis. When some of these parents have tried to remonstrate with their local authorites, they have been intimated and harassed and have even been told that they have no rights over their children. When some of them, going to remonstrate at one local authority, said that this violated their fundamental religious beliefs, they were told by one councillor that people had been known to die for their religious faith and that perhaps they should be prepared to die too.

In order to see this proposed legislation in context, it may be helpful very briefly to recall some of the evidence that was mentioned during the debate on the Bill that was previously introduced into your Lordships' House by the noble Earl, Lord Halsbury, to whom we all owe a great debt of gratitude for taking an initiative which commanded support from noble Lords of all political commitments. That evidence, during the Second Reading debate, shows the nature and extent of some of the policies being pursued by some local authorities.

The Inner London Education Authority, for example, in a resource book on Positive Images, claims that positive images of gay and lesbian issues should pervade the whole curriculum and that they are relevant in subjects as diverse as English, history, science and religious education. The book is packed with recommendations of different kinds of resource material including films, books and videos.

I am not taking issue with some of the examples of classical literature which have been raised and which are obviously classical literature and would not fall under any legislation. The kind of material which has given offence is that which is so explicit that many parents believe it is offensive and certainly most inappropriate for young children. Another book, Tackling Heterosexism, states its commitment to a policy of encouraging the Inner London Education Authority and other local education authorities to devote more resources to promoting positive images of gay and lesbian issues in education institutions, with children and young people of all ages from primary schools to further education institutions. I shall place copies of both these publications in the Library of your Lordships' House.

It is sometimes said by those who wish to defend present policies that there is a lack of evidence that such material and teaching really gets into the classroom and reaches children. I would argue that even if it did not, it would still be unacceptable both in intent and as a misuse of public money. However, there are recent reports which indicate that children are being exposed to it—often at an extremely young age. For example, the Evening Standard in November last year reported that children as young as two years old have access to gay and lesbian books in Lambeth play centres. Mrs. Jill Delaney, playleader of the Windmill Gardens play centre, was reported to have said: We have been on training courses where members have access to take this kind of literature into the playgroups but nearly everyone refused. Some of the books on display were terrible. I have children in here as young as 2 years old and I don't think they should be seeing pictures of grown men in the nude in different sexual practices. I personally found it very offensive". While some of us here might be reassured that, apparently, nearly everyone refused to take that literature into playgroups, it should also be noted that not everyone did so refuse. In the same article a leader of another playgroup claimed: Gay and lesbian literature is available to us from Lambeth and we have displayed it". Those examples relate to playgroups for very young children.

Anyone who has any doubts about whether similar developments are occurring in schools should look at the publication School's Out: Lesbian and Gay Rights in Education produced recently by the Gay Teachers' Group. One of the books which it recommends most highly is The Milkman's on his Way which portrays in minute detail sexual intercourse between a teenager and an adult homosexual. Many who have seen that hook feel that its explicitness is offensive and that it is totally inappropriate for use in schools.

It also seems the ultimate irony that in some local authorities books such as these should be recommended by some teachers while other books, which most people would see as an innocent, delightful part of our childhood cultural tradition, like Dr. Dolittle, Rupert Bear and Thomas the Tank Engine, are being censored out of schools for alleged sexism, racism or Eurocentrism.

Anyone who finds that incredible should see the film made by the American "Sixty Minutes" television programme—a programme not noted for being right-wing. That film shows a group of censors in a London school jettisoning those children's books and others like them. It also shows interviews with mothers in Haringey speaking about their worries over the council's policies to promote positive images of homosexuality in schools, and it shows what happened to them when they went to a council meeting where they were subjected to fearsome intimidation and harassment. That is the kind of evidence which demonstrates the need for the provisions in this Bill. Those mothers were desperate. Subsequently they were severely harassed and intimidated—some of them receiving death threats for their children.

It is not fair or just to expect parents to have to bear the brunt of the responsibility for curtailing policies which they find deeply offensive, and especially when their attempts to do so lead them into such dire consequences for themselves and their children. I think that is a point which relates to that which was made by the right reverend Prelate the Bishop of Manchester, who suggests that perhaps parents should have this responsibility. I suggest that he might like to meet some of those parents and find what it costs them to have to challenge a local authority like that. When local government becomes as lacking in accountability as this, and uses its power and resources in ways so far removed from its traditional remit, it is, sadly, time for central government to intervene.

Perhaps I may conclude by referring once again to one of Professor Regan's authoritative studies of local government where he concludes that remedial action is now necessary given the: atmosphere of menace and intimidation which disfigures local government in some areas, the disgraceful harassment of the Haringey mothers, the unjustified persecution of Mrs. Maureen McGoldrick, the scenes of riot and confusion in Lambeth and Brent council chambers and, alas, many similar developments elsewhere". Democracy is precious and precarious; it depends on good faith. Where local government has shown that it is prepared to violate that good faith, then it is necessary for central government to intervene to protect its citizens from abuse and from the abuse of their resources. The proposals in this Bill which I have discussed are designed to do no more and no less than that and are consequently of the greatest importance. I believe that they are worthy of support from all who wish to protect the best traditions of local government and local democracy.

9.6 p.m.

Viscount Massereene and Ferrard

My Lords, I hope that you have taken very great note of what my noble friend Lady Cox has been saying about the promotion of homosexuality. I was going to say a very few words on that subject, but my noble friend is such an expert on it that I could not add to anything that she has said. I shall be extremely brief and shall speak on Clause 34, which deals with the abolition of dog licences.

I have already congratulated my noble Leader on his movement to higher office. Of course he cannot get any higher, but we are very pleased to see him in that position. He said in introducing the Bill—and he was quite right—that it is quite absurd that at the moment a dog licence costs 37p, that about two-thirds of dog owners do not have a licence, that it collects only £400,000 and that it is a great nuisance to the police. I should like to point out that in this country there are 6 million dogs and that in Ulster, in the north of Ireland, they have for the last five years been charging £5 for a licence. With that money they have set up a dog warden scheme which has been working extremely satisfactorily. I understand that since they started that scheme there are now 32,000 or 62,000 more dog owners than there were before. If the Government were to have a licence fee of £5 that could bring in £30 million. Of course it would not actually bring in quite that amount, because certain dogs would be exempt; for example, working sheep dogs and guide dogs for the blind. OAPs should probably have a greatly reduced licence.

If the Government charged £10 for a licence that would bring in £60 million and one could then have a fully staffed dog warden service. It would be an excellent thing.

I should like to read out some of the dog licence fees which apply to our EC partners. I shall not read them out in full. I shall not read them out in deutschemark, kroner, or anything like that. For example, Germany charges £19.20; Italy charges £13.50; and the Netherlands £14.40. The document mentions Norway and goes on to Sweden where I think the licence is £48. I should not recommend the Treasury to charge those fees, but the list shows that we are really rather behind the times and out of step with our EC partners on dog licences.

The other point I should like to bring out is that every year it is estimated that there are about half a million stray dogs in our big cities and towns. They are involved, according to Manchester University, in about 54,000 car accidents each year. That is not the fault of the dogs. The trouble is that we are, as I have often said before, an urban society. More than 80 per cent. of the population is urban. The people cannot help that, and there is no objection to it, but because of that a great many of them do not understand animals. They may be, in some respects, slightly divorced from country ways.

I am sure that if we had a dog warden system the dog wardens could to a great extent cut down the number of stray dogs. As your Lordships know, there have been many cases of people chucking dogs out on the motorway because they have made a mess in the house or something and they have grown tired of them; or they have gone on holiday and will not pay to put them into boarding kennels.

We had a case in Kent a few months ago where a young man had been given a puppy. The puppy made a mess and the young man put it into the oven and roasted it to death. Such hideous things as that are of course really appalling.

I think it was the noble Lord, Lord Graham of Edmonton, who complained that every year many dogs bite the postman—not the same postman or otherwise he would be dead. I cannot remember the number of postmen he mentioned but I think it was a few hundred. One of the reasons for that may be that the people probably had unsuitable dogs; for example, they might have had sheepdogs, greyhounds or even hunting dogs. If they do not get sufficient exercise they are inclined to take their exercise from biting postmen. This matter will come up at the Committee stage so I shall not go on about it, but I am sure that the Government can look at this again and start a similar system to the one in Northern Ireland. It will be the responsibility of councils and I cannot think why the Government cannot do it. I am sure it would also gain them some votes whereas if they abolish dog licences they will lose quite a lot of votes. That is my opinion.

I have made the plea not to abolish dog licences and I hope that when we come to the Committee stage we shall have considerable support to advise and beg the Government not to do this. It will have unfortunate consequences.

9.15 p.m.

Lord Dean of Beswick

My Lords, first perhaps I may also join in giving my contratulations to the noble Lord, Lord Belstead, on his appointment as Leader of your Lordships' House. Most of the noble Lords present will be aware that occasionally Lord Belstead and I face each other across the Chamber on issues. However I have always been mindful of and noticed the courteous way in which he deals with matters. I wish him all the best as Leader of the House, although no doubt we shall differ on future occasions on policy.

My Lords, what is this debate about? What is the Bill supposed to be aimed at? It is supposed to improve local government or the performance of local government. I suggest it does no such thing. I have heard no substantive arguments other than rhetoric based on local experiences to improve the situation.

Perhaps I may deal with the last item which appears to have been discussed at rather considerable length: homosexuality and how the schools do or do not deal with it. Starting from a premise of my own, 1 find very little acceptance of such behaviour, it is totally alien to me. Nevertheless, people are entitled to live their own lives as they wish, if it is in private. However, 1 think my noble friend Lady Blackstone, made a very telling point when she said that successive government Ministers in your Lordships' House and also in another place were responsible for a Bill which would have done something similar to this Bill being taken out of circulation last year. I hope that somebody will tell us why there has been the need to reintroduce the subject.

I would issue a word of caution to noble Lords. If this matter has been included in the Bill on the basis that there is some electoral spin-off for the people trying to introduce it into the legislation they should be very, very careful indeed. No political party has a monopoly on or more of a tendency towards homosexuality than any other party. Noble Lords have only to check the recent history just before and after the war of prominent names in the main political parties of the day. So be careful, my Lords, when you start to thrown the mud that some of it does not stick to the image which in your own mind is clean. We know the names of some of the people who were very distinguished in public life. I am talking about them. So I urge great care when going down that road.

I know something about local government. I can claim to do so because I was in it for 17 years, before I became an MP. I was chairman of the housing committee in Manchester, chairman of the direct works department and the last chairman of the old AMC housing committee before the AMA was formed. I was a member of the group which spent three days at Birmingham University setting up the AMA. So that is not strange ground for me. What I find difficult to understand is the attempt by certain noble Lords opposite to try and indicate, I believe quite wrongly, that the Conservatives in local government and the Conservative Party is full of angels and cherubs and that the Labour Party is full of devils and imps, when we both have our share of all of those.

There has been a tragic reduction in the responsibilities of local government. Over the years some of its best officers have left because of the diminution in the responsibility given to local government. The Conservative Government under Edward Heath made a mess of local government when they took some of the responsibilities for the health service from local government and placed them under new area health boards which people could not approach with their complaints. In the old days people could complain, for instance, that midwifery services were lacking in the big cities. They could go to their local councillor and someone would listen to them, but in the main these days they are trying to reach faceless people with human complaints.

Therefore there is a history not just of people in my party but also of people in the other main party with whom I was involved in Manchester who were bitterly disappointed and downhearted to see their responsibilities being taken away. The responsibility for water was removed, for example. Manchester's water system was pioneered by Conservative councillors years ago before ever a Labour councillor had been elected but they were walked over when it suited successive governments politically to do so.

I do not believe that the central government of any party can be geared to run local authorities on an agency basis. That is the position we are approaching. However, I say to those Members of your Lordships' House who try to put across the slant that it is all Labour control that is bad, that they should have read the article in the Sunday Times yesterday on local government. There is a photograph in that article of Mr. Tom Caulcott who used to be the chief officer at the AMA. I shall read out one or two quotations from that particular article.

Tony Babidge, 51, who left Labour-controlled Hammersmith and Fulham last October after 10 years as director of housing: 'The job became impossible because of cash limits at the same time as increased demand from the homeless'". That was the comment of one officer. Officers have left local authorities in droves through interference from councillors who thought that they should become the officer once they were elected. I never believed that a person who became a leader of a local authority should evict the town clerk from his office and take his place. I know that that has happened. It has happened in my party but it has also happened in the other party too. I can give quotes and names.

It does not matter who one is. If one thinks that one can take the place of a town clerk, a town planner or a city treasurer with a layman's training, whatever one's walk in life one is whistling in the dark and one will never do it. What has occurred in some local authorities has been a total disaster. I am not absolving my party from blame in this matter. A lot of these incidents have occurred within my party but I totally disagree with them. When I was the leader of a council or the chairman of a housing committee I was able to convey the objectives of my party's policies on which we had been elected to the chief officers. But then it was up to the chief officers with their professional expertise to tell us how to reach those objectives. I do not believe that anyone who is elected to a public body should go any further than that. That is their role and any other course is disastrous.

The article in the Sunday Times further states: Terry Neville, former city solicitor at Tory Westminster, is one of 48 senior officers who have left since Shirley Porter became council leader in 1983. One officer who quit recently said: 'The elected members are authoritarian and more interested in slavishly following government policy than listening to our advice'". That is not particularly the action of a local authority cherub or an angel. Both sides of the argument are illustrated there.

Perhaps I may deal with the question of letting contracts. I listened to the statements of the noble Baroness opposite and the evidence which she poduced about the behaviour of the Cambridge council. I do not come from Cambridge. However, if I wished to investigate local government, I should have to highlight the appalling behaviour of the Conservative group in Manchester when the Labour Party was massacred in the local elections in 1967.

At the time a very successful direct labour department was in being which employed 4,500 men with 900 apprentices of all ages. We had a house-building programme of 4,000 houses a year. We built 2,000 houses and the private sector built the other 2,000. We also had an extensive capital building programme. We had just embarked on a programme to rid Manchester of every one of its primary school slums and to do that we went in for the system of what was called "class building", which is a semi-industrialised form of building. It was very successful. We tested the market. We wanted to build six schools. We did it on the basis that whoever got the first contract would get the first three and the next one would get the second three, based on the Bamwell Report. That report concerned letting of local authority contracts and it stated that it was possible to negotiate to contracts based on the successful tender of the first one.

The first thing which the Conservatives did was to sell council houses, which we were opposed to but we lost. They acted within the law. Then they had to lay the ghost of the direct labour department so they called on the city treasurer, Sir Harry Page. He was a very distinguished man and nationally known in local government. He produced a report. That report exonerated the Labour Party and the direct labour department and said that it was a benefit to the ratepayers of Manchester.

When the report came to the council, one of the Conservatives—not of the best type—accused him of being too political. Nevertheless, that report showed that, as regards the concept of the first three schools, the direct works department had completed the contract within the contract time, the price being 8½ per cent. below that of the next private contractor, which was Simpson and Cooke of Nottingham.

There was another contract to be let. The Conservatives put tenders out and the direct labour department came in 2½ per cent. lower than the nearest private contractor. However, the Conservatives passed a resolution in principle that in future the direct labour department would be restricted to building houses and the maintenance of council property. That was such a dubious act that when the issue was decided in the council chamber the police were brought in because there was a strong belief that what was being done was outside the law. The papers were sent to the shadow Attorney-General, who is now my noble and learned friend Lord Elwyn-Jones. His words to us were, "I am sorry but they have kept just the right side of the law".

If noble Lords on the other side of the House accept that it is wrong for local authorities to spoonfeed direct labour departments—and I do not support that; I think that everyone should be subjected to competition on an equal basis—perhaps they should be made aware of the practices of some of their own people in local government before they start slinging mud at anyone else.

I was a bit surprised to hear some of the remarks that were made by the noble Lord, Lord Bellwin. Although I disagree with him politically, I have always had respect for his debating ability. However, he said words to the effect that if we let private contracts and the private contractor falls down, we can always take the contractor to court, he will be fined and we can get our money back. Anyone who has been involved in letting large local authority building contracts will know that nothing could be further from the truth.

At the time that I served on the council in Manchester we had a project before us—the building of the largest abattoir in Europe—which was two-thirds completed. Suddenly, the private contractor went "bump"—and I mean bump, my Lords. What happened then? The local authority had to use its own officers and employ consultants from outside to complete this contract, taking it over at considerably more expense than otherwise would have been the case.

There are literally hundreds of local authorities which have been involved in the same kind of thing. Housing contracts have been given to private builders who have gone bankrupt, and other people have had to be brought in or direct labour departments used to fulfil such contracts. Naturally, it has always been at greater cost.

I am not suggesting that all direct labour departments are a success. All I am saying is that where they can compete favourably and produce the goods for local ratepayers, they ought to be allowed to get on with the job on a basis of equality of competition. I have tried to highlight some of the points. Members of your Lordships' House on the opposite Benches think that all Conservative councils behave with total decorum, and that their total concern is the interests of the ratepayers. I have disproved that conclusively, and if any of your Lordships wants to obtain verbatim reports of the debates in Manchester about which I have spoken he can have them, because the debates were all taped and transcribed into typewritten form so that everyone could have copies. I have kept them, as a historical record. That is not in my opinion a good advertisement for the Conservative Party when in office in certain circumstances.

I should like to close, because it is getting late, by referring only briefly to housing policy. I think my noble friend Lord Pitt touched upon that point. It appears as though that is something new that the Government are proposing; but it is no such thing. The local authorities already have the power to do what is contained in this Bill. The only difference is that they have to go to the Minister and ask to do it.

I do not see anything in this Bill to indicate that if a local authority wanted to go in for such a policy there would be any extra money to carry out such a function. The housing investment programme has just been published once again and there have been substantial cuts all over the place. Some of the worst cuts have been in areas of greatest need. If that is a panacea and augury for a good future for local government, it is foreign to what I believe local government is about. I issue a warning to the Conservative Party. Some Conservatives whom I know in local government are getting a little fed up with fighting elections, being elected and yet finding that the things that they want to do in their own areas are being removed from their area of responsibility. I do not think that it is any accident that all the local government associations, two of which the Labour Party has never controlled—or very rarely—are total in their opposition to this Bill.

I have said quite a lot and it is an indication that there is a lot of work to be done in Committee stage. I hope that your Lordships' House, in the broadest sense, will wish to warn the Government and bring them rightly to the view that in some respects some of the worst features of this Bill will be damaging to everybody concerned.

9.35 p.m.

Lord Underhill

My Lords, as the final speaker before the Government reply, perhaps I may offer my congratulations and best wishes to the Minister on his appointment as Leader of your Lordships' House. Perhaps I may add my personal regard and goodwill as the Deputy Leader of the Labour Opposition. However, I wonder whether in the future, if not tonight, the noble Lord, Lord Belstead, might regret that the final Bill he brought forward as a Minister should be this measure which will do so much harm, as have so many other Bills, to local government. I share the view of the right reverend Prelate the Bishop of Manchester that morale in local government is falling. Those associated in any way with local government know that to be the true position.

My noble friend Lord McIntosh referred to the Bill as being the 45th piece of legislation dealing with local government that this Government have introduced since 1979. I recall that my honourable friend, Dr. John Cunningham, on Second Reading in the other place on 6th July, at col. 87, said: There is no parallel for that in any other policy area, nor is there any parallel for it in any other democratic country. There is no parallel for there to be so much legislation interfering with the sphere of local government.

The noble Lord, Lord Belstead, said in his opening remarks that there had been consultations starting as far back as three years ago. I know that the four local authority associations have been critical of the proposals for three years. What notice was taken of those consultations? I ask the Leader of the House why all four local authority associations are now in strong opposition to the Bill. District councils, county councils, metropolitan authorities and the Convention of Scottish Local Authorities are all strongly opposed to the Bill. Many noble Lords will have seen on their desks this morning the joint statement issued by the four authorities who, I am certain, opposed the principles behind the Bill when there were consultations some years ago. I can sum up their attitude by quoting part of paragraph 5 of the joint statement: While sharing the Government's general objective of securing increased efficiency and the maximum possible value for money, the Associations consider it essential that local authorities should be free to make the final decision as to how their services are provided and should remain accountable to their local electorate for the extent and quality of those services and the costs which are incurred. Listening to two or three speakers today, one would have had the impression that there is a lack of faith in local electorates to be able to deal with their local authorities and to make them accountable for anything that they are doing. The invitation to tender is nothing new. Those who have been involved in local government will know that many local authorities have done this in certain services for many years. What is opposed is the compulsion, interference and domination by central government. We understand that the Government are proposing a de minimis exemption for compulsory tendering if less than £100,000 is spent on a particular activity. In some cases this will mean the total cost of that activity. I understand that there were some consultations on this. With whom were there consultations? What were the results of the consultations? I believe that the four local authority associations disagree with that provision.

I should also like to ask this question. Are the Government intending to introduce an amendment at some stage on this point? If so, will it lay down a fixed figure, or will it be flexible? Is it just another point on which the Secretary of State will have complete power? I cannot see how one can separate the provisions for compulsory competitive tendering from those relating to contract compliance. That leads me to the question: what is fair competition? Surely all must comply with the same required standards, but the Bill does not require this. As the noble Baroness, Lady Stedman, said, the first principle is that private contractors should offer the same high standards of employment, training and other matters which local authorities apply to their own in-house activities.

Clause 17 lists non-commercial matters. How can there be fair competition when nothing is laid down about terms and conditions of service, arrangements for promotion, transfer or training or other opportunities offered to workpeople? How can there be fair competition'? It is impossible to talk about fair competition if a local authority is forbidden to lay down that its contractors, those who reply to tenders, should have the same conditions of service which we regard as fair.

I recall the proceedings on the London Regional Transport Act when from this side of the House we endeavoured to move an amendment that the obligation to tender which is laid down in the Act, shall have due regard to the general conditions of service and wages exercised by persons submitting tender". I can recall the Minister who replied at that time accepting that the amendment was aimed at securing fair competition on equal terms. But he added that the Government's view was: We are keen to encourage competition. We believe that it holds the key to obtaining a better service. We are not anxious to insert unnecessary obstacles".—[Official Report, 18/6/1984, col. 21.] He said that the amendment we sought to put forward would tend to frustrate rather than encourage competition. I mentioned that because my noble friend Lord Graham of Edmonton said that the Bill illustrated the philosophy of the Government. That was the position on the amendment I tried to put forward with my colleagues on the London Regional Transport Act dealing with the same point.

In the Transport Act 1985 a clause was written into the Bill. It was not an amendment that we sought. It read: An invitation to tender under this section may not include conditions with respect to the terms of employment of persons to be employed in providing any service to which the invitation to tender relates". In other words, that is a philosophy of the Government (not just in the Local Government Bill) which they have followed time and time again and at least in these two examples of transport Bills to which I have referred. If such questions cannot be asked, and if such assurances cannot be obtained when a tender is requested, how can cowboys be stopped? What effect will this have on good employers who also want to tender, but to succeed they find that they cannot keep their own high standards? Also it could have an effect on the standards of local government staff.

I was pleased to hear the noble Baroness, Lady Platt, from her important position make it quite clear that she proposes to bring forward certain amendments to deal with the conditions of equal opportunities for women in the same way as the Government brought forward their amendment on racial discrimination. I echo what other noble Lords have asked. What about disabled persons and health and safety at work? Surely an authority has the right to insist that those matters be complied with before it is prepared to grant a tender; but they are regarded as anticompetitive and those questions must not be asked. That indicates the type of philosophy behind the Government which will not only do harm to general working standards, but will also do harm to those people who believe in having decent standards in local government. Whatever else happens, local government should see that its own staff have satisfactory conditions. One of your Lordships spoke of the obduracy of some local authorities. As my noble friend Lord McIntosh pointed out, it is strange that 85 per cent. of local authorities have preferred to keep in-house activities. Perhaps the Minister will indicate why that is so and why it is that some of those who tendered have now withdrawn their services because they were dissatisfied with the type of service that they were receiving.

I listened with care to my noble friend Lord Pitt. I believe that in dealing with the lack of ability to question the country of origin of supplies, particularly stressing the position of South Africa, the logic of his case was such that there should be few noble Lords who are not impressed by it.

I do my best not to use or obtain goods made in South Africa. I also do my best not to obtain goods that are made in shocking conditions in other countries. So far as possible I do my best to buy British goods of satisfactory condition. I should like to see the same kind of conditions laid down by local authorities, but that is barred under the Bill.

We then see the nonsense in Schedule 1. I hope that noble Lords will look carefully at that schedule in order to see the peculiar exclusions. Certain things are excluded but others are permitted, such as cleaning inside an authority's building but not outside it. I shall not go through the various points, but I have listed them and other noble Lords can see them.

Excluded is the repair and maintenance of police vehicles. It is understandable that the Secretary of State said that exclusion was for security reasons. However, the repair and maintenance of fire service vehicles is not excluded. As one who was in the National Fire Service for five or six years, I recognise the importance of this issue. If it is regarded to be vital that police vehicles should be excluded from the provisions, why not also exclude those vehicles relating to the fire service? When looking at items which are excluded and those which are not, there appears to be a certain amount of nonsense.

The same kind of confusion was outlined by my noble friend Lord Morton of Shuna in his references to the different meanings of words and terms in relation to Scotland. During his speech I quickly looked at Schedules 1 and 2 and marked approximately a dozen instances where the reference is different when dealing with application in Scotland. There seems to me to be complete and utter confusion and nonsense in that respect.

As has been pointed out, the activities for which tendering is to be compulsory are set out in Clause 2. That also states that the Secretary of State may by order provide for an activity, but before doing so he must consult such representatives of the local government as he deems to be appropriate. Perhaps the Minister can explain the meaning of that provision. If the Secretary of State consults the local authority associations which then state that under no circumstances should the activity be included, will he accept the results of that consultation? It seems that he has not accepted any results of consultations, not only as regards this Bill but also a number of other local government Bills in recent years.

Even before the Bill came to this House, a consultation paper was issued by the DoE regarding the possible extension to local authority sport and leisure facilities. Comments have to be in by 11th December. This particular consultation paper is unique because it even proposes the possibility of giving the private sector control over policy on admissions, pricings and opening hours. I should like to speak at length on this matter but I shall make just one point. If it were not for the co-operation and the special treatment which Nottingham City Council gave, there would have been no Torville and Dean. Their success was because of the special facilities given by the council.

The term "management" goes far and wide. That is all in this consultation paper. I ask again: if the local authorities say that in no circumstances should sport and leisure activities be included in compulsory tendering, will the Government heed their views and will the Secretary of State bring forward amendments?

So far, there have been few examples of any local authority voluntarily contracting out these particular services. I am certain that companies would be less interested, for example, in providing full horticultural facilities than in simple grass cutting operations. I have spoken to a close relative who is a horticulturist and who is convinced that if this were allowed the grass would be cut, wet or dry, because it would assist the private company in seeking the best possible return; but that would damage the grass.

I have a few words to say on local authority publicity. As one or two noble Lords stressed, this Bill restores two of the clauses removed by this House from the Local Government Bill 1986. I remind the House, if it needs reminding, that the idea of any compulsory code was definitely rejected by Widdicombe. We now come back to this situation that to go beyond the recommended code the authorities "shall have regard to". In all other legislation with which I have been concerned, whenever that phrase has been used it has been held to mean that the body concerned must have regard to what is proposed in this particular code.

As recently as 18th November, the Association of Metropolitan Authorities—and I assume the other associations also—received a letter from the DoE setting out a draft recommended code of practice under the 1986 Act, stating that the Government will not seek parliamentary approval for this until this present Local Government Bill receives Royal Assent. Clause 26 bans the council from producing publicity which promotes or opposes a point of view on a question of political controversy which is identifiable as the view of one particular party and not of another.

I can see immense discussion on what that means. I ask the noble Lord, Lord Belstead, whether it will be possible for a local authority to issue publicity opposing the principle of the poll tax, not only to its area in particular but to general local government. Will it be right for a local authority to oppose any provision for schools to be allowed to opt out, and for London boroughs to opt out of ILEA? Will that be permissible, or will it not? Will it be permissible for a district council to conduct a campaign against any proposal of its county council to close particular schools? Surely these are activities which ought to be permissible and not barred. Will a local authority be prevented from taking part in any joint effort by its local authority association or by all the local authority associations acting jointly? Will the statement to which I have referred, issued by the four local authorities, be illegal under the Bill? Will it be illegal for authorities to pay to local authority associations subscriptions which may be used for publicity of this kind on any particular campaign regarded as injurious to local government?

In conclusion, I can see that we shall spend many hours dealing with the many controversial issues raised in this Bill. On this side of the House we shall try by amendments to the Bill in some way to remove what we regard as the worst features of the attack on local government. We shall also try to bring back a consensus of opinion between central and local government which is so essential and which has been sadly missing since 1979 from various items of legislation brought in by this Government.

9.55 p.m.

Lord Belstead

My Lords, I should like to thank the noble Lords who have spoken in this debate for their kind personal remarks, not least those of the last two speakers from the other side of the House, the noble Lords, Lord Dean, and Lord Underhill. Despite those remarks we have had quite a hard-hitting debate upon this particular Bill.

I should like immediately to refer to some detailed points on Part I which were made by the noble Lord, Lord McIntosh. If, as the noble Lord claimed, the private sector does not have the capacity or the ability to take on a contract in any given case, then an authority will be able to keep the work in-house. However, the Government believe that competent contractors will be wanting to bid for much of the work which is on offer and if they can offer a better deal for ratepayers we believe that the authorities should be able to keep the work in-house.

The noble Lord, Lord Underhill, raised many questions, including consultation on sport and leisure. As the noble Lord knows, the period for consultation upon the bringing of sport and leisure management within the scope of the Bill ended only last month. We are still considering the responses so I cannot say what our decisions will be.

I emphasise that, whether or not it would mean agreeing or disagreeing with the views of the local authority, if we decide to bring competition into that particular field there would be an opportunity for your Lordships to debate that decision either on an amendment to the Bill or on an order under Clause 2(3), as that is subject to Affirmative Resolution in both Houses.

Lord McIntosh of Haringey

My Lords, I am grateful to the noble Lord for giving way. There is a huge difference between whether the House can debate the matter on an amendment to the Bill or on an order. As the Leader of the House knows very well, there is no opportunity to amend an order and the inclusion of sport and leisure facilities in the competitive tendering part of this Bill is an extremely complex issue.

Since the consultation period has been concluded, may I impress on him that it would be quite undemocratic for the Government to make up their mind to bring forward this matter before the Bill leaves the House.

Lord Belstead

My Lords, I shall certainly consider what the noble Lord, Lord McIntosh, has to say on that. I think this is a point on which probably a letter ought to be sent to the noble Lord. I would not agree with the noble Lord that it would be undemocratic. Quite specifically, the order-making power is provided for in this Bill and this would simply be one of many functions which could be brought within its scope by order; the order would be subject to Affirmative Resolution.

Following that point, I was particularly glad that my noble friend Lady Blatch made the simple statement in her speech that she could not think of a good reason against Part I of the Bill. My noble friend said that it will be for local authorities to specify the service level and quality that they want in any given case; that at the end of the day it will be the ratepayers who will benefit; and that they will often benefit from having increased services from cost-savings. My noble friend gave a particular example of that in her speech.

In his winding-up speech the noble Lord, Lord Underhill, referred to the competition provisions in Part I and particularly to the requirement that authorities should expose major services to competition. Like my noble friend Lord Bellwin, I say to the noble Lord that I regret that we have to resort to compulsion on a matter like this. Sadly, all the evidence points to compulsion as being the only way of ensuring that ratepayers everywhere benefit, as do those ratepayers served by authorities which have started competitive tendering.

The reaction of some authorities to our proposals—to the effect that private contractors really are not fit to carry out the services listed in the Bill—is not realistic. I ask your Lordships how such views can possibly be squared with the simple fact that in several dozen authorities contractors are carrying out this kind of work very effectively indeed.

My noble friend Lord Bellwin referred to the Audit Commission which, in several reports, has pointed to the inexplicably wide differences between the performance of the best local authorities and that of the remainder. He reminded the House of the occasional paper published a year ago by the commission where the remark was made that if all authorities matched the performance of the most successful 25 per cent., savings of some £500 million could have been made.

We need to look at this Bill from the point of view of the interests of ratepayers—the people who, after all, local government services are designed to benefit. I was glad that in a skilful speech my noble friend Lord Beloff, among other things, pointed to the sensible balance that the Bill is trying to achieve. Following on from what my noble friend Lord Beloff said, this Bill does not make the assumption that, in providing services, all direct labour organisations are inefficient or that all private contractors are efficient.

The noble Lord, Lord Dean, made a very fair speech. But there was one point on which, uncharacteristically, he was a little less than fair. He suggested that perhaps in some way in the political argument those of us on this side of the House were occasionally trying to say that all is black on one side or all is white on the other.

Lord Dean of Beswick

I am grateful to the Minister for giving way and for making that point. May I put a hypothetical question to the noble Lord which may well occur in certain circumstances? Tenders are submitted for a large contract, say a building contract. A direct labour department is involved but its tender is not the lowest. However, when the actual specification goes to the Department of the Environment—I know that all major contracts have to be approved by the DoE—it is found not to be in order. Would the Government intervene and award the contract to the direct labour department? In the past, they have done the reverse.

Lord Belstead

All my legally trained noble friends and colleagues on both sides of the House would, I think, agree that I would be foolish to try to answer a hypothetical question of that kind. All I would say to the noble Lord, Lord Dean, is that the relevant clauses—Clauses 3, 4, 5 and 6 and, I think, Clause 7 as well—give a fair crack of the whip so far as contract work, or what is called functional work, is concerned, in that service level and quality are clearly open to be taken into account by a local authority when it goes out to competitive tendering.

In many cases, what I think we are going to find is that the direct labour organisation often gets the work. But it is only going to get the work having had to take a close look at its organisation and cost levels. That I think is to the benefit of everyone. As my noble friend Lady Carnegy said, so often DLOs have simply not been subject to competition and examining their costs in that way.

In relation to Part II provisions, I hope I recognised in my opening speech that there are those who quite genuinely believe that what can be described as contract compliance is a proper and honourable part of the public sector contractual process. But where does one draw the line? The noble Lord, Lord Peston, asked for some examples for a change and not, as he said, the tired old examples always dragged out in the same way. I was sorry that the noble Lord did not hear the speech of my noble friend Lady Blatch because she provided some examples. Perhaps I may add to what she said.

Can anyone really approve of authorities which ask contractors about their links with the nuclear missile programme? Is it proper for authorities to seek to discriminate against contractors who have transported workers across picket lines? Is it reasonable—and this is a more unusual example—to ask contractors for donations to support a Vietnamese hospital? Those are some of the reasons why I have to say to the noble Baroness, Lady Blackstone, that we cannot just leave it to local authorities to get on with it either on the telephone or on paper. Those are some of the reasons why I agree with my noble friend Lord Boyd-Carpenter when he said that to any moderate opinion really deliberate abuses of local authority procedures cannot be disregarded.

Lord Peston

My Lords, my point still remains that the examples are trivial. The substantial point that I wish to raise is not the question whether local authorities make mistakes. Those of us who live in London, as I have all my life, are perfectly aware that authorities, Right and Left, do things we do not care for. Our concern is whether, as my noble friend Lady Blackstone said, the sledgehammer of central government is required in these cases. That was the point I was trying to make. Perhaps we shall have a chance to debate it again later in the passage of the Bill.

Lord Belstead

My Lords, the noble Lord makes a fair point. If 1 may say so, there is an answer and no doubt we shall go on batting it across the floor of the House. I have among my papers a long questionnaire which has to be filled in before one ever gets to the tender procedure. It comes from Leicester City Council. Having read that questionnaire, I take the view that this makes it very difficult indeed for a contractor to get in and compete with a direct labour organisation. For that basic reason we feel that we need to open up this work to competitive contract; and then at the end of the day by all means let the best man win.

The provisions in Part II of the Bill are designed to prevent just what the noble Lord and I have been talking about. Noble Lords have argued in effect that certain practices are acceptable while others are not. On this side of the House we maintain that all the non-commercial matters in Clause 17(5) are irrelevant to the contractual process, and we see no reason why authorities should be allowed to discriminate against certain companies and to distort competition in favour of their own direct labour organisations.

I have been worried during the debate that perhaps the Government have not put across the true scope of the Bill. For instance, the noble Baroness, Lady Stedman, who has almost unrivalled experience of local authorities, and the noble Lord, Lord McIntosh, to whom very much the same applies, referred to operations concerning quarries in the Grampian region. The noble Baroness also asked about landscaping. Neither of those activities falls within the scope of the Bill. If they were to come within the scope they would have to go through what would be an Affirmative Resolution procedure.

The noble Lord, Lord Underhill, who has wide experience, asked how cowboy contractors could be stopped if authorities could not ask questions or lay down conditions about pay rates. The Bill will not stop authorities refusing to enter into contracts where they are not satisfied with competence. The best way of checking is by taking up references relating to previous jobs carried out by contractors. The noble Lord asked specifically about the de minimis exemption which refers to Clause 2(9) and which we say will he set at £100,000. This is part of the consultations on implementation where the closing date for comments is 31st of this month. A wide range of bodies is being consulted, including all local authorities and their associations. The exemptions wil be provided for by regulations under Clause 2(9), and so the figure could be changed upwards or downwards in the light of experience.

My noble friend Lord Bellwin gave it as his view that there were not enough services put in the Bill. The same answer applies to my noble friend. These can be changed by order under a slightly different part of Clause 2—Clause 2(3)—and obviously that is open to possibility in the future. The noble Lord, Lord Graham of Edmonton, raised the question of monopolies and he pointed to a very great deal of the work being done by two particular groups. There was an exchange between the noble Lord and my noble friend Lord Bellwin on that.

Although there are two particularly large groups in the cleansing field at present (the point made by the noble Lord) it is a fact that the market is very easily entered; and, in response to the large amount of extra opportunties which we believe the Bill will bring about, it is to be expected that new firms will emerge. Moreover, local authorities themselves can compete for other authorities' businesses. At the end of the day, some competition is surely infinitely better than no competition at all, which is the condition under which most of this work is currently carried out.

The noble Lords, Lord Pitt and Lord McIntosh, both raised the question of the use of local labour particularly in inner city areas. As was made clear during consideration of this Bill in another place, the fact that the Bill does not contain a specific exemption for what can be termed local labour clauses in local authority contracts does not mean that the Government are any less resolute in their determination to ensure that those living in our inner cities share in the benefits created by our various initiatives in these areas.

But this objective is not easily achieved. Birmingham (which has been mentioned this afternoon) and Sheffield have both considered adopting policies where a quota of the jobs must be given to local residents. However, inner city residents may not sometimes have the necessary skills to carry out certain jobs, particularly in very huge urban areas, in which case quotas would not be desirable. But perhaps more to the point, it is my constant and clear advice that such quotas are illegal under EC law. We shall nevertheless continue to make sure that the available labour in our inner cities is better equipped to take advantage of the job opportunities created by our various programmes for the regeneration of those areas.

Lord Pitt of Hampstead

My Lords, will the noble Lord give way? If it is already illegal under EC law, will the noble Lord explain to me why the EC actually met 30 per cent. of the cost of the Birmingham job, which worked perfectly satisfactorily? If it is illegal, why did the EC finance it?

Lord Belstead

My Lords, I shall certainly check up on that. But it is for the precise reason that I very carefully said it is the clear and consistent advice that I have received that quotas of the kind we have been talking about this afternoon are illegal under European Community law. I have to say that I checked again this afternoon. If I find that I have made any mistake, I shall certainly write to the noble Lord.

The noble Lord, Lord Morton of Shuna, said that Scottish provisions in an English Bill were not appropriate. I must say that where there is a genuine need for separate Scottish legislation, a separate legislative vehicle is normally provided. But I would respectfully remind the noble Lord that the Government in Westminster are the Government of the United Kingdom, and that being the case there is no constitutional impropriety in producing a Bill of this kind, and nor is it in any way unusual.

A significant volume of Great Britain legislation has been carried out by successive governments, both Conservative and Labour, over the past few years dealing with the United Kingdom on both sides of the border. Under the last Labour Government, some 40 Bills went through Parliament making provisions in Scotland, and similarly, between 1980 and 1987, nearly 80 Great Britain Bills have been enacted with Scottish provisions. Nonetheless, I listened carefully to what the noble Lord said and I think that perhaps we would do well to re-read it.

Having said that, I was grateful to my noble friend Lady Carnegy for putting some Scottish issues in what I felt was their right context, including special or I unusual requirements for the performance of work in the Scottish islands, to which some of your Lordships and my noble friend referred. They will be free, as are all authorities, to reflect their needs in their tender specifications and to decide how best to safeguard access to important assets.

As regards Part II of the Bill, there is just one question that I need to answer. It is important that I should do so. It concerns the speech of my noble friend Lady Platt. She mentioned the inclusion of racial discrimination and the promotion of racial equality in the Bill and the exclusion of sex discrimination from it. In preventing authorities from setting themselves up as extra-statutory enforcement agencies, we have to recognise that as the law stands at present local authorities are, by virtue of Section 71 of the Race Relations Act, part of the enforcement process in respect of racial discrimination only.

As my noble friend said, there is no section in the equal opportunities legislation parallel to Section 71 of the Race Relations Act. It is possible that the Equal Opportunities Commission may decide, as a result of consultations on its document Legislating for Change, to press for changes in the Sex Discrimination Act, which among other things would impose a Section 71-type duty on public authorities. If such a proposal were made, I understand that it would be part of a package of measures which the commission would wish to see implemented in any review of the Sex Discrimination Act. If that proves to he the case, and should the Government be persuaded of the need to make such changes, then the position with regard to the contractual process would need to be reflected in amending legislation. At the moment, I do not feel that I can go further than that.

There have been some important exchanges this afternoon about publicity. My noble friend Lady Cox asked a direct question. She asked whether Clause 27 prohibited politically partisan phraseology in staff advertisements. The answer is that the 1986 Act prescribes a test which outlaws publicity which in whole or in part appears to be designed to reflect public support for a political party. That covers advertisements for staff as much as any other publicity. The proposed code of recommended practice for local authority publicity would also make it clear that advertisements for staff should be based on the tradition of a politically impartial local government service. In particular, they should not be placed in party political publications.

Finally, the question of ensuring that there is a politically impartial local government service was covered by the recommendations of the Widdicombe Committee. The Government are considering these recommendations and will announce their conclusion shortly.

The noble Lord, Lord McIntosh of Haringey, asked whether there were any examples of abuse since the 1986 Act was passed and what justification there was for Clause 27. The answer is that the justification for amending the 1986 Act does not rest on abuse. As I tried to explain in my opening speech, amendments were made during the passage of the Act which undermined the Government's objective to ensure that all the circumstances of publicity could be taken into account. There is now a doubt about whether that is the case. Clause 27 would make it clear that the circumstances of publication must be taken into account. It would clarify the 1986 Act, but it would not extend it. Evidence of abuse since the passing of the Act is therefore not relevant to the issue.

The right reverend Prelate the Bishop of Manchester asked whether a local authority would fall foul of the rules if, there being a political party opposed to public libraries, for instance, it promoted public libraries. The noble Baroness, Lady Stedman, was concerned more generally about local authorities being unduly constrained in their publicity. The noble Lord, Lord Underhill, followed the same line and gave three separate examples similar to those given by the right reverend Prelate.

I should like to make it clear once again that the Government are not proposing a new test in the Bill. The publicity that would be banned if our proposals are accepted is that which is banned at present; that is, publicity which appears to be designed to affect public support for a political party. What we are doing is specifying the evidence on which that judgment is to be based. To take the right reverend Prelate's point, in his example where a political party was opposed to public libraries—perish the thought!—publicity about public libraries would be affected only if it appeared to be designed to affect support for that party. Anything else about public libraries would be unaffected. The same test would apply to the examples put forward by the noble Lord, Lord Underhill.

A number of noble Lords commented on the proposals about homosexuality. I do not intend to get into that this evening because very powerful speeches have been made on it today. There is just one point which I ought to make. Reference has been made in the speeches to the words of the Government in earlier debates on the Bill of the noble Earl, Lord Halsbury. I should like to remind the House that the Government always supported the objectives of that Bill. The reservations expressed by my noble friend speaking for the Government at that time, which were referred to by the noble Lords, Lord McIntosh of Haringey and Lord Graham of Edmonton, in their speeches about the detail of the clause were made in the context of a rather different formulation. Your Lordships will recall that the drafting of Lord Halsbury's Bill was significantly amended at Third Reading to take account of the comments of a number of noble Lords in this House.

Perhaps I may finally come to dogs. My noble friend Lord Boyd-Carpenter and the noble Lord, Lord Houghton of Sowerby, were both critical of the clause. The noble Lord, Lord Houghton, said that it was no good referring to control in speeches because there seemed to be none in the Bill. The reason is that the abolition of dog licensing does not mean the abolition of control on dogs. There is a large raft of legislation which already deals with this matter. It will still be a legal requirement, aside from this Bill, for dogs to wear a collar with the name and address of the owner when the dog is in a public place. There will still be powers for police to deal with stray dogs.

There will still be powers available to deal with dangerous dogs and dogs found worrying livestock. It will still be a defence for killing a dog to show that the action was taken for the protection of livestock. Powers to deal with dogs not kept under proper control will remain.

There are also powers for local authorities to make by-laws confirmed by the Home Secretary relating to fouling or the banning of dogs from certain areas. None of those provisions will be affected by the abolition of the dog licence.

Lord Mackie of Benshie

My Lords, would the noble Lord not admit that all these measures would need money to make them effective?

Lord Belstead

My Lords, if the noble Lord is referring particularly to the local authority warden services, I am speaking from memory but I believe there are about 200 such services at the present time. The money is being found and can indeed be found, I should have thought, for expansion in the future.

As I attempted to say at the beginning of my speech, this has been a wide-ranging and hard-hitting debate in which your Lordships have touched on many aspects of local government. The number and quality of the speeches have demonstrated once more the extent to which your Lordships value local government and the depth of interest in it.

The right reverend Prelate said in his speech that the Government ought to affirm their belief in local government. My Lords, I do. The Government share your Lordships' concerns for the future health and prosperity of local government. The various provisions in this Bill are all concerned, in their different ways, with improving quality and efficiency in ways which will benefit both those who pay for local government and those who use its services.

In order to prepare for the next stage of the Bill, I shall certainly make Notes on Clauses available in the Printed Paper Office as quickly as possible. So we shall return to the details of these provisions at later stages. Meanwhile, I commend the Bill to your Lordships' House.

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