Lords Sitting of 26 April 1995

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

Registrars of Births
Lord Young of Dartington Lord Young of Dartington asked Her Majesty's Government:
Whether they will introduce legislation empowering Registrars of Births to conduct civil naming ceremonies; and whether they will require registrars to make available to cohabiting couples who both sign birth certificates parental responsibility agreements which recognise that fathers as well as mothers have legal rights and duties in relation to their children.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, the Government have no plans to change the law in respect of the duties and responsibilities of registrars. However, consideration will be given to introducing an information leaflet which registrars will be asked to issue to all parents who register a birth outside marriage, explaining among other things about the making of a parental responsibility agreement under the Children Act 1989, the Children (Northern Ireland) Order 1995, or such arrangements as may be introduced under the Children (Scotland) Bill which is presently before another place.
Lord Young of Dartington: My Lords, I thank the Minister for that Answer, in particular her comment about the joint responsibility agreement. Is she aware that there are large and ever-growing numbers of cohabiting parents and that if Church baptism is ruled out for them there is no ceremony for welcoming new-born children into the world and affirming a parental commitment to their welfare? Despite what the Minister said at the beginning of her Answer, is she prepared to say that the Government will at least consider allowing registrars to conduct civil naming ceremonies, as they already conduct civil marriages? That would be a logical next step.
Baroness Cumberlege: My Lords, primary legislation would be required. Before taking that step, the Government would have to consider very carefully before coming to any definitive view.
The Earl of Clanwilliam: My Lords, does my noble friend agree that the problems would be overcome if the couples got married?
Baroness Cumberlege: My Lords, that could be a solution for some but perhaps not for others.
The Lord Bishop of Lichfield: My Lords, does the Minister accept that while we on these Benches strongly support all measures to strengthen family life, in particular parental responsibility—and it is not invariably the case that baptism is refused to the children of cohabitees—we are nevertheless bound to have
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reservations about a civil naming ceremony which seems to adopt many of the features of Christian baptism while emptying them of their spiritual content? Would it not therefore be preferable for the Churches to redouble their efforts to reach out and encourage parents to consider bringing their children to baptism rather than adopting a confusingly similar imitation which is deprived of its full spiritual meaning?
Baroness Cumberlege: My Lords, if there were any suggestion that primary legislation was to be introduced, the Government would wish to consult widely with all sections of society, including the Churches. I believe that the issue of baptism is for other authorities rather than the Government.
Lord Dormand of Easington: My Lords, as the Marriage Act 1994 is now on the statute book, would it not be logical for the Government to encourage the step forward described by my noble friend Lord Young? More importantly, when will the Government realise that 25 per cent. of the population of this country hold no religious beliefs? Does the noble Baroness agree that those people should be recognised and should not have placed before them such obstacles as have been mentioned today?
Baroness Cumberlege: My Lords, there is nothing to stop couples holding the kind of ceremonies that they desire. The Question requires that the registrar should be involved. Registrars are statutory officers and at present their duties and responsibilities are limited to those set out in the Acts relating to marriage and registration. As I have said, primary legislation would be required, which would be a big step.
Lord Jenkins of Putney: My Lords, if registrars can consecrate a marriage what is to stop them from consecrating the product of marriage? Is that not sensible? May we take it that the view expressed by the right reverend Prelate is the view of the Church, or is there some discussion and dissent on the subject?
Baroness Cumberlege: My Lords, of course, registrars do not consecrate a marriage. Marriage is a sacrament and it is usually carried out by religious leaders. With regard to the second point, that is very much a matter for the Church.
Lord Teviot: My Lords, is my noble friend aware that the Births and Deaths Registration Act 1836, which has been left almost intact, has worked extremely satisfactorily for more than 100 years?
Baroness Cumberlege: Yes, my Lords.
Lord McIntosh of Haringey: My Lords, the Minister rightly said that any change in the responsibilities of registrars would be a matter for primary legislation. Is she aware that Mr. Frank Field in another place and my noble friend Lord Young of Dartington are proposing to introduce legislation on that issue in Parliament? Can she give any indication of whether the Government will treat that Bill with anything other than outright opposition or will they wish at best a fair wind for such a small but useful additional piece of legislation?
Baroness Cumberlege: My Lords, I am well aware that Mr. Frank Field and the noble Lord, Lord Young, are

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intending to introduce that legislation. As I have said, it will require a great deal of consultation before the Government make up their mind either way. At the moment, we are prepared to produce a leaflet which will ensure that unmarried couples have an opportunity to accept joint parental responsibility because, at present, parental responsibility lies with the mother. That is a way in which to encourage fathers to be involved.
Lord Harmar-Nicholls: My Lords, in order to avoid any misunderstanding, does the Minister understand from the intervention of the Front Bench spokesman opposite that if the noble Lord's party had the power, it would introduce the legislation necessary to implement the provisions referred to in the Question?
Baroness Cumberlege: My Lords, we shall try to ensure that the party opposite does not gain that power.
Lord McIntosh of Haringey: My Lords, I do not believe that that issue can be allowed to pass. Will the Minister inform her noble friend that when I make a comment from the Dispatch Box about a proposed Private Member's Bill, that is not in any way in conflict with the convention to which we adhere; namely, that the Opposition as such does not take a view on Private Member's Bills?

Burundi: Peace-keeping Measures
2.45 p.m.
Viscount Waverley Viscount Waverley asked Her Majesty's Government:
What contribution they are proposing to make to peace-keeping measures in Burundi.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, we are giving our strong support to action by the UN, the EU, the OAU and other regional parties to help resolve the conflict in Burundi peacefully. The EU plans to give help with the deployment of UN human rights experts and OAU military observers. We continue to follow developments closely and an FCO officer in Bujumbura will augment the coverage provided by our mission in Kampala.
Viscount Waverley: My Lords, I thank the Minister for that realistic reply. But are the policies deemed to be working? Is it not high time that a regional conference be brokered to seek political solutions through dialogue to the full range of political, economic and social issues confronting that region?
Baroness Chalker of Wallasey: My Lords, it is fair to say that even in the very confused situation which still exists in many parts of Burundi, some of the measures are working, but they are by no means working universally. As I said in a statement which I made this morning about the region, and in particular about Rwanda, there really is a role for the regional governments to support the peace process. That is what we have been encouraging through the OAU, the UN and with our EU partners. We need to see a system where people talk out rather than fight out their differences.
Baroness Rawlings: My Lords, is the problem in Burundi as important as that in Rwanda? What does my noble friend the Minister intend to do with regard to Rwanda?
Baroness Chalker of Wallasey: My Lords, the resolution of the problems of Burundi would obviously help to create a greater stability in the whole region. I have no doubt that in Rwanda the prime problem is that of promoting national reconciliation. That is why the states of the area—Tanzania, Uganda, Zaire, Burundi and Rwanda—all have a key role to play. It is essential also that any flow of arms from neighbouring states should be stopped. The UN must really help us to concentrate on that if we are to prevent any repetition of the horrors which we saw a year ago in Rwanda and, indeed, the smaller but just as terrifying situation which we saw last Saturday.
Baroness Blackstone: My Lords, given the importance of taking urgent action in Burundi to prevent the kind of slaughter which took place last week in Rwanda, will the Minister elaborate a little on what she said about European Union collaboration in Burundi? For example, will she say whether the European Union is now reinforcing the deployment of OAU military observers on the ground? Will she tell the House precisely how many human rights experts the EU has now sent to Burundi? Finally, what assistance is being provided to improve the administration of justice and the police? Is the Minister satisfied that is adequate?
Baroness Chalker of Wallasey: My Lords, perhaps I may answer the last question first. I am not yet satisfied that the measures are adequate. I believe that there are some 65 monitors in total in Burundi, some of whom were supplied by the European Union. But it is quite clear from the discussions at the Foreign Minister's meeting at Carcassone on 19th March and from the debate in the Foreign Affairs Council on 10th April that all our partners are as concerned as we are to see a resolution.
It is critical that we must help to provide both the Governments of Burundi and Rwanda, because the two really go together, with human rights experts to give them support for the administration of justice and the police. The noble Baroness will remember that Britain was the first country to provide support to the Government of Rwanda after the tragedies of last year to get the justice system started again.
Judge Goldstone will lead the investigations but more justices will be needed in both countries. Getting the system back in operation is very difficult and needs to be done on the ground. We are working at that. I hope to write to the noble Baroness shortly with more information.
Lord Avebury: My Lords, bearing in mind the very unfortunate incident which took place last Saturday and to which reference has been made, is the Minister satisfied that adequate military forces are present in both Rwanda and Burundi to prevent a recurrence of conflict between the peoples of those countries? Further, what steps have been taken to

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accept or to consider the offer that has been made by the OAU countries to provide additional forces, provided that the United Nations is willing to pay for them?
Baroness Chalker of Wallasey: My Lords, I can only tell the noble Lord that I believe the incident was much more than unfortunate; indeed, I think it was a tragedy that took place in Rwanda last Saturday. However, we must keep it in perspective. We certainly do not believe that anything like some of the numbers quoted have been killed—perhaps the number is somewhere between 1,200 and 1,500. Still, every one is one too many.
However, to stop the conflict in an area full of arms, we know that one needs many people to calm down such a situation. UNAMIR has a limited mandate which falls due for renewal this June and it will be for all the members of the Security Council to consider not just having a resolution but also actually putting numbers behind it. We have already given a considerable amount of help both to the OAU and, indeed, to the UN operation in the area. We have spent nearly £91 million since April of last year to try to bring about peace, to keep people alive and to plot the way forward. But there is a great deal more to be done. I shall keep your Lordships well informed about developments.
The Lord Bishop of Lichfield: My Lords, as the Minister referred to the deep need for national reconciliation, is she satisfied that, within the Commonwealth, the neighbouring territory of Uganda (which has experienced massacre and loss of life for more than 20 years) is sufficiently pro-actively involved to bring healing to its neighbour?
Baroness Chalker of Wallasey: My Lords, the right reverend Prelate knows that there is a problem in that respect. The Ugandans are seen by some in Rwanda and Burundi to be on one side rather than totally in favour, as I know them to be, of national reconciliation in the region. Therefore, it is most important that all the countries in the region, especially Tanzania and Zaire which have received so many refugees, are also involved alongside Uganda in promoting national reconciliation.
Earl Attlee: My Lords, the problems of Burundi and Rwanda are closely related. Can the Minister now say whether a chargé d'affaires will continue to be based in Kigali, Rwanda, for the foreseeable future? In asking that question I should declare an interest as I am heavily involved in an NGO in Rwanda.
Baroness Chalker of Wallasey: My Lords, I am glad to be able to tell the noble Earl that we do indeed hope to keep the chargé d'affaires in Kigali and also to have a mission in Bujumbura so that we are working on the ground as well as through the first-class, British non-governmental organisations which are already very active in both countries.

Local Authorities: Debts
2.54 p.m.
Lord Orr-Ewing Lord Orr-Ewing asked Her Majesty's Government:
What is the total debt per head of the local authorities in Manchester, Birmingham, Sheffield and Leeds.
The Earl of Lindsay: My Lords, the total debt per head of population at 31st March 1994, the latest date for which figures are available, was as follows: Manchester, £2,955; Birmingham, £1,192; Sheffield, £1,409; and Leeds, £988.
Lord Orr-Ewing: My Lords, is my noble friend the Minister aware that those are very large sums of money? Are we sure that the ratepayers of those great cities are getting good value for money? Moreover, are we sure that equal effort is being made to collect debts which already exist because both tasks are necessary at the same time; in other words, economy in spending and perspicacity in collecting debts with the greatest rapidity?
The Earl of Lindsay: My Lords, the level of debt in those four cities is extremely large and is of concern to the Government. Their total debts come to nearly £4 billion. To put that in perspective, it represents just over 10 per cent, of total local authority debt in England, which stands at £37 billion. Servicing that debt costs us something like £4 billion per annum across England.
The Government are extremely keen that all local authorities reduce and pay off their debts wherever possible; indeed, the lower their debts, the greater the proportion of their revenues and grants that will be available for goods and services. Therefore, we encourage local authorities both to abide by the rules that we have set for debt redemption and to take up the incentives that we have put in place to encourage debt repayment. We also encourage local authorities to collect all moneys owing in an efficient manner.
Lord Dean of Beswick: My Lords, is the Minister aware that, in the case of Manchester, if it had received from Mr. Heath the money for the forced sale of its waterworks by the Government—indeed, the former Secretary of State the noble Lord, Lord Rippon, suggested that that money ought to be returned to the people to whom it belonged; namely, the ratepayers of Manchester—the figure that the noble Earl quoted could probably be wiped out completely? Why do not the Government give that money back to the people of Manchester?
The Earl of Lindsay: My Lords, notwithstanding what the noble Lord implies, Manchester's record in making efforts to redeem debt is not commendable. Large authorities such as Manchester are sitting on potentially saleable assets of great value. But, despite government incentives to encourage the sale of those assets in order to redeem their debts, such authorities are reluctant to do so.
Lord Bruce of Donington: My Lords, the noble Earl has been most frank in his answers to his noble friend

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Lord Orr-Ewing. However, will he give us an undertaking that he will be equally frank as regards questions that come from this side of the House in relation, possibly, to different local authorities; or, for example, questioning the mathematics which have been used by the noble Earl in his answers? Moreover, if pertinent questions on the matter are put by Members of this side of the House, will the noble Earl confirm that the Government will not plead that the information could be provided only at a disproportionate expense?
The Earl of Lindsay: My Lords, the mathematics are very straightforward and, possibly, somewhat embarrassing to some Members of the House.
Lord Elton: My Lords, will my noble friend the Minister clarify both the question put by the noble Lord, Lord Dean of Beswick, and his answer thereto? Is not the situation to which both apply that Manchester has received capital receipts for the sale of property which is was required to sell under government legislation and that it has declined to use them in the redemption of debt because it wishes to hang on to such money for other purposes? If that is not the case, what other reason is there for Manchester not paying off the debt when it is in a position to pay some of it?
The Earl of Lindsay: My Lords, it is hard to know why cities such as Manchester do not use all their set aside funds to redeem debt. There is no other purpose to which they can put those funds. Therefore, such moneys are simply sitting there, frozen and earning interest; but they are not being used to reduce the local authority debt.
Baroness Fisher of Rednal: My Lords, is it not a fact that all the borrowing of local authorities, including that of Birmingham which I know better than most, has all been authorised under government-allowed borrowing costs? In other words, the Government have said, "Yes, you can borrow the money". Therefore, the responsibility is equal. Does the noble Earl know that the transport Minister was in Birmingham yesterday and said that, these days, it has become just about the most attractive city in the country? Indeed, it is a credit to the people involved and 10 years of Labour control.
The Earl of Lindsay: My Lords, it is also 15 years of Conservative Government. I can also tell the House that it took the Birmingham Labour-controlled authority only eight years to increase its payroll by 10,000 jobs. However, I return to the main point. Local authority borrowing is, indeed, approved by central government. Central government approve that borrowing on the basis of need. The most important point behind my noble friend's question is the fact that the Government have introduced both rules and incentives to reduce debts which are costing the country nearly £4 billion a year.
Lord Ezra: My Lords, may I suggest to the noble Earl that other factors should be taken into account in discussing the success or failure of local authorities? I believe that Sheffield, for example—where I am much involved as chairman of a company which distributes heat from the city incinerator to heat that city—has
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contributed a great deal to environmental improvement and those factors should also be taken into account quite apart from indebtedness.
The Earl of Lindsay: My Lords, the Government certainly applaud all the CHP schemes which are currently being run in certain cities. I think this matter is a little wide of the Question but the record of the noble Lord, Lord Ezra, in the CHP field is much admired.
Lord Glenamara: My Lords, would the noble Earl care to give the national figure for debt per head after 15 years of Tory rule compared with the first year of this Government?
The Earl of Lindsay: My Lords, I told the House that our total local authority debt in England is £37 billion and that the total cost of servicing that debt is £4 billion. That is equivalent to £110 in servicing debt for every adult in this country.
Baroness Hollis of Heigham: My Lords, will the Minister confirm that Manchester's £1 billion of debt is still, after the sale of assets, covered by £6 billion of assets; that Birmingham's £1.2 billion of debt is covered by £3.5 billion of assets; and that, in the case of Sheffield and Leeds, £750 million of debt is covered by £3 billion of assets? Does not the Minister agree that any houseowner would, in these days of negative equity, be happy to have a debt—a mortgage—that is only one-third or one-sixth of the asset value of his house?
The Earl of Lindsay: My Lords, I am grateful to the noble Baroness for pointing out the mathematics involved. When the service charges of local authority debts reach a figure of £4 billion a year and local authorities are sitting on assets of considerable value, it makes sense that those local authorities clear their debt by using their assets.

Education: Use of Resources
3.2 p.m.
Baroness Perry of South wark Baroness Perry of South wark asked Her Majesty's Government:
Whether they are confident that those responsible for the delivery of education are making the best possible use of the resources available to them to give good value in educational provision to pupils and their parents.
Lord Lucas: My Lords, our reforms have provided a framework in which power and responsibility have been devolved to those closest to service delivery, enabling them to secure maximum value from the resources available. We see great opportunities for the better use of resources in all aspects of the education system.
Baroness Perry of Southwark: My Lords, I thank my noble friend the Minister for that reply, but does he not accept that it is extremely frustrating for the average taxpayer, who has seen the expenditure at national level on education increasing year by year in most generous terms over the past 15 years, still to have to listen daily to complaints at local school level that resources are

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being squeezed? I believe that the average taxpayer and the average parent would like some explanation of where things are going wrong.
Lord Lucas: My Lords, it obviously is important that schools are properly funded, but what is clear is that at the current level of funding there is a great deal that schools and indeed others involved in the education system could do to get better value for the money that is already being spent.
Baroness David: My Lords, would the Minister say that the cost of the national curriculum, which was nearly £500 million—that has been spent on an exercise that has had to be radically altered—showed the best use of resources and has given good value in educational provision?
Lord Lucas: Yes, my Lords.
Baroness Cox: My Lords, is my noble friend aware that local education authorities hold back on average about one-third of their general schools budget and therefore only delegate about two-thirds to schools? In view of that, will my noble friend agree that some relatively small economies in LEA spending, and/or a shift of allocation of funding, could result in a quite significant increase of resources for local schools and the pupils in them?
Lord Lucas: My Lords, the situation differs very much from one LEA to another. I would quarrel slightly with the figures that my noble friend has produced. There is a lot of LEA education spending which is not available to be delegated because the Government have decided that it should continue to be disbursed centrally. Many authorities are now delegating better than 90 per cent. of the money that they have available to delegate; others are moving beyond that. We very much applaud what they have done and we believe that it results in the much more efficient use of the moneys involved. When one looks at the breakdown of what remains with local authorities, there are differences—for example, some authorities are spending 5 per cent. on administration while others are spending 1 per cent. on administration—which would lead us to think that there was some further scope for some authorities to do better than they are.
Lord Desai: My Lords, will the noble Lord confirm that, as a proportion of total budget, education's share has not risen over the past few years? Will he also confirm that in terms of spending in secondary schools per student, the figure has fallen?
Lord Lucas: My Lords, I am not quite clear what timescale the noble Lord is thinking of. I am sure he is as aware as I am—
Lord Desai: Fifteen years!
Lord Lucas: My Lords, I am sure he is as aware as I am that over the past 15 years the real term spending per student in secondary schools has risen very substantially by around 50 per cent. I do not have the figures with me on the share of the total budget, but I will write to the noble Lord on that.
Lord Pearson of Rannoch: My Lords, is my noble friend aware of the OECD report last week which found that we spend more per pupil than do either Japan or Germany and yet our standards of education for 16 year-olds are very much lower than theirs, particularly for children of average ability? Would my noble friend confirm that that means there must still be considerable waste in our system, no doubt particularly in our more pernicious local education authorities?
Lord Lucas: My Lords, I am not sure that I would characterise it as waste so much as an opportunity to do a great deal more with the money that we already spend.
Lord Morris of Castle Morris: My Lords, since the Question relates to the best possible use of resources, is the noble Lord aware that his right honourable friend the Prime Minister's claim that there are two education authority administrators for every three teachers has been widely challenged, especially by the Local Government Management Board, which asserts that the ratio is 1:15? As we attempt to reconcile these figures, can the Minister help us by explaining what categories of employee have to be included in the term "administrator" in order to justify his right honourable friend's claim, given that the Local Government Management Board includes curriculum development officers, education inspectors, education welfare officers, educational psychologists, nursery and classroom assistants, school library staff, youth and community workers, careers guidance officers, special needs support officers as well as clerical staff?
Lord Lucas: My Lords, I do not have the answer with me. I shall write to the noble Lord. My belief is that the figures refer to the total of local authority bureaucratic overhead rather than those particularly concerned in schools, but I may well be wrong on that and I shall write to the noble Lord.

Goods Vehicles (Licensing of Operators) Bill [H.L.]
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to introduce a Bill to consolidate Part V of the Transport Act 1968 and related provisions concerning the licensing of operators of certain goods vehicles. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question, Bill read a first time, and to be printed.

Local Government
3.7 p.m.
Lord Williams of Elvel Lord Williams of Elvel rose to call attention to the state of local government in Great Britain; and to move for Papers.
The noble Lord said: My Lords, let me start by saying that my Motion refers particularly to the,
"state of local government in Great Britain".

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It does not refer to local government reorganisation. Other noble Lords may wish to speak on that matter but I will touch on it only in so far as it illustrates comments that I wish to make. I imagine that many of your Lordships will feel that we have debated reorganisation many times and I will be forgiven, at least on this occasion, if I give it a miss. Equally—and here I hope the reasons are obvious—my Motion does not attempt to confront the problems of local government in Northern Ireland; problems which are, as your Lordships will be aware, of quite a different order from those faced by Scotland, England and Wales.
The questions that I wish to ask your Lordships resolve themselves into three groups. First, what is the proper relationship between local government, central government and the electors? Have we got the relationship right? If we have not got it right—and after Question Time this afternoon I am confirmed in my opinion that we have not got it right—what is the effect on morale, efficiency and the credibility of local authorities, their councillors, their officials and their employees? Secondly, what do we think local authorities are really meant to do? If we can establish that, do they have the resources to do it? Thirdly, when all the answers come together, to what extent do we need to rethink our view of the role and position of local authorities, and how and in what direction do we start to move?
I doubt whether anybody would disagree that the relationship between local and central government has shifted fundamentally in the past decade and a half. The most obvious and overt example of that is the way in which financial responsibility has now largely been transferred from local authorities to the Treasury. Gone are the days when local authorities could set their own rate—domestic or business—and be judged on their performance by the way that was set and the way they spent the proceeds. We now have a system in which local government has to rely on Whitehall hand-outs for approximately four-fifths of its revenue. That system, a by-product of which is that the central government grant to local authorities is a major part of central government expenditure itself, allows Whitehall to determine where, in the whole constellation of public sector finance, the axe should fall. Unless the Secretaries of State for Scotland, Wales and the Environment respectively are tough negotiators, local government tends to be the loser.
That has happened. I give one example out of many. In the year 1995–96 general government expenditure and what is known as the control total will increase by 4.1 per cent. and 2.4 per cent. respectively; but local government will face a cash freeze. Central funding for the health programme, which is no doubt desirable, will increase by 4.1 per cent., but local authority personal social services will increase by only 0.3 per cent. I could go on, but I shall refrain from mentioning the proposed teachers' settlement which has resulted in the uproar with which your Lordships will by now be familiar.
It could be argued, and many noble Lords may argue, that that would not matter if local authorities were able to raise revenue from their own localities to cover the
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deficit, even though they would have to raise it on the one-fifth of their revenue for which they are responsible. However, even that is forbidden them by Whitehall. There is a system, initially introduced in the Rates Act 1984 and subsequently re-enacted, under which Whitehall specifically limits by law those local authority budgets which are "excessive" or which represent an "excessive" increase over the previous year. That system is known as "capping".
The upshot is that however much they try, and however willing their own electors may be, to raise extra money by way of council tax to pay for services which they and their electors consider necessary, local authorities can be prevented by Whitehall from doing so.
Your Lordships will then properly ask, what is the basis on which Whitehall determines the appropriate budget for each local authority, down to the nearest penny? The answer is the standard spending assessment. I try very hard—and I mean this sincerely—to understand how this is calculated. But for the life of me I find it very difficult to get my mind round the intricacies of the calculations. There are allowances for this and that; there are regional weightings for the other; there are estimates, based, I am sure, on the most reliable census data, of specific circumstances for each community from John o' Groats to Land's End. However, try as I might, I always end with the conclusion that this is like the Schleswig-Holstein problem of the last century—only two people ever understood it, but one was dead and the other had forgotten.
Many noble Lords opposite may think that that is a reasonable way to handle local government. If they do, I ask them to consider the effect on local councillors, their officials and employees. Who on earth would volunteer for such a sad and unrewarding business, particularly if their jobs are continually put at risk by compulsory competitive tendering? I have with me a sheaf of cuttings from provincial newspapers explaining the effects of the present system on their own communities. I shall not weary your Lordships by reading them all out, but they come from all parts of the country: the Manchester Evening News, the Birmingham Post, the Newcastle Journal, the Western Mail, the Scotsman—all newspapers of distinction, none of them, as far as I know, exactly dedicated to the Left-wing of politics.
Those newspapers, and others up and down the land, reflect local opinion, and they are not happy with Whitehall. Add to that, if you will, the sustained campaign of denigration to which local authorities and their employees have been subjected over the years, being told time and time again that town halls are staffed by bureaucrats with nothing better to do than to make life as difficult as possible for the citizen, and your Lordships will see why local authorities are in a state of near revolt.
My second question is, in one sense, more rewarding, because in asking what local authorities could and should do I can allow myself, and your Lordships, to consider the real potential that is at our disposal if only we have the courage to realise it. I am constantly

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surprised at the ingenuity and inventiveness which exists in local government if we want it. It is there, not only in local economic development, but in ideas on how to improve the local environment, how to improve social work when local social and economic conditions are deteriorating, or even how to make do when school governors are forced to trim budgets to meet a centrally dictated teachers' pay award.
So what should local authorities do? We have to start from what I regard as a very simple fact. Local authorities are what might be called "providers of last resort". It is they who have to run emergency services, environmental planning, rubbish collection, social services, housing, community care and so on. In other words, they look after the most vulnerable in our society. Furthermore, it is right that that should be so, not merely because nobody else can do it, although not even the finest quango in the land could do it, but because elected authorities are in the best position to appreciate local sensitivities. It must be a fundamental principle, and I shall state it frankly and openly as such, that decisions should be taken at the level which is nearest to those who are affected and which is also consistent with maximum efficiency in the provision of that service. I recognise that that is a difficult balance to strike. There is no pretence that it could be easy. However, the one thing that is absolutely certain is that the least sensible, least humane, least acceptable and, above all, least efficient place from which to try to run things is Whitehall.
But that is precisely what is happening. That is precisely the trend over the past decade and a half. Central government have progressively taken over more and more control; and the results have been very worrying.
First, the morale of those in local government has sunk to rock bottom. No one in his right mind—I was told this by a chief executive of a Conservative-run district council only the other day—would recommend a career in local government to his son or daughter. It would be sheer madness.
Secondly, there has been a dreadful waste of our money. I am told that, taken together, the introduction of the poll tax, the subsequent abolition of the poll tax, and the various pieces of local government reorganisation, have cost us in all some £3 billion. That is £3 billion of our money just to satisfy the vanity of those who think that they can do other people's jobs for them.
Thirdly, there is the electoral effect. We saw in Scotland this month, and I expect that we shall see in England and Wales next month, local elections being turned into what is little more than a referendum on the performance of the government in office. I do not mind particularly if Conservative councillors are so ashamed of their party that they prefer to describe themselves as "horticulturalist", or whatever other bizarre name they may choose. That is not my affair. The danger I see is that many competent and able councillors will no longer be serving their communities not because of their local record—it may be very good since there are good
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councillors in all parties—but because they are stuck with being associated with their party's perceived failure in central government.
So how can we retrieve the situation? How can we start on what may be a long process of improving morale and confidence in local government? We must look again at the proportion of their revenue that lies within the responsibility of local authorities to raise. That may mean looking again at the operation and mechanics of the business rate, of the council tax, and so on. We must also avoid laying burdens on local authorities without allowing them corresponding resources. We must send our tanks into quangoland to make sure that it is brought under democratic control. But, above all, we must recognise that decisions taken in Whitehall are not necessarily as wise as decisions taken in the town hall: that our country is by nature pluralistic rather than monolithic, complex rather than simple, and indeed now divided rather than united.
It would be absurd to think that all that will be easy. Too much damage has been done. But it would be wrong not to make the effort. For my part, I should like to believe that the party opposite is capable of changing its spots, of reversing 15 years of centralisation, of encouraging rather than sniping at local government. I should like to believe it, but it stretches the imagination. I suppose—I admit it with some gloom—that we shall have to wait until the Government recognise that enough is enough, or until the country recognises that for them. The sooner that time comes the healthier the state of local government will be. I beg to move for Papers.
Lord Graham of Edmonton: Answer that!
3.26 p.m.
Baroness Young: My Lords, I thank the noble Lord, Lord Williams of Elvel, for introducing the debate. I heard someone say, "Answer that". I am very happy to do so. It is good that we are debating local government. I served in local government for 15 years. I found it enormously interesting and worth while. I am very glad to have the opportunity to take part in the debate today. From the list of speakers, I see that almost everyone has taken part in local government. I am not surprised at that because I can tell the noble Lord, Lord Williams, that local government is a subject which interests people in local government but, whether or not we like it, is not wildly interesting to most people outside local government. I am sorry about that fact, but I believe it to be true.
Taking part in local government involves getting to know the place where one lives, taking part in decisions and, perhaps most important of all, making friends with an enormous variety of people whom one might not normally meet in the course of one's life.
I am very pleased that we are having this debate today. I have consulted some of my colleagues in local government in preparation for the debate. I am glad to say they report that, despite what has been said, local government is alive and well, and the enormous number of people taking part in local government elections next week is indicative of that. It is distressing that we have low polls but that has always been a fact of local

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government life; it is not new. The truth of the matter is that local government is changing. It changed very considerably in the 15 years during which I took part. Local government is changing in the way that almost every institution is changing because we are in a world of great change.
Perhaps I may comment on one enormous change which took place when I was in local government. I refer to the abolition of the local police forces and the establishment of regional police forces. When I was first in local government the great thing was to be on the watch committee. When that committee was finally abolished, the event was marked by a great deal of sadness as though it was the end of everything. It was a very great change.
I turn to some of the points that the noble Lord raised. He may be surprised to hear me say this, but I believe that there is something to be said for considering the relationship between local and central government. I am particularly pleased to see that your Lordships' House will set up a Select Committee to do just that. I believe that that committee will be very valuable. I hope that an interesting debate will result.
I cannot follow the noble Lord down the same path regarding his other points. He raised the subject of quangos. I take it that he is referring to education. One needs to ask oneself why the Government have chosen the policies that they have through a succession of education Acts. The tragedy is that the average and below average child's education is not as good as it should be. We all want to see it improved.
The establishment of grant-maintained schools, city technology colleges, and the whole local management of schools devolves money down to schools. Far from taking away local responsibility, it has in fact devolved that responsibility to a much lower level where it is being effectively used. Now, for instance, we know that Mr. Blair is sending his son to a grant-maintained school, I hope that those on the Opposition Benches will abandon their hostility to those schools. I have talked to a member from one such school. The first thing that happened was that it received extra money from the Government. The school was able to be redecorated and put in order for the first time for years, quite apart from the many other benefits which flow from that status. We hear complaints on this subject. I never hear constructive suggestions as to how matters might be improved.
I make one other point regarding quangos. One of the most surprising statements made by the party opposite is that if it were to come to power—that is not something that I expect—it would prevent hereditary Peers sitting in your Lordships' House. I shall be all right; I am a Life Peer. However, what would the immediate consequence be? Who will be left? It will be the Life Peers, here by political patronage. By a stroke it will have created the biggest quango in the country. So I hardly think we need a lecture on quangos from the party opposite.
Lord Parry: What about 1066?
Baroness Young: Maybe 1066, but nevertheless it will be a big quango. We have no plans for anything like that. I turn to finance. There again, the noble Lord—
Baroness White: If the noble Baroness will allow me to intervene, I can assure her that the quangos in Wales will go much wider than anything she has mentioned.
Baroness Young: My Lords, the noble Baroness says that, but we are talking of local government and where quangos have been established. However, we are time-limited so perhaps I may turn to finance.
The noble Lord, Lord Williams, was again critical, but on local authority spending the truth is that no government—and no future Labour Government—would not put a limit on local authority expenditure. They would have to look at it in relation to the whole of government expenditure. It is true that four-fifths of the money comes from central government, but there will be a limit on the amount that can be raised locally, otherwise, public expenditure nationally will become completely out of control. That is what happened in many places in the past. The tragedy of local government is that it has got out of control in the past and we have been brought to the state that we are in now.
I do not believe that there has been any denigration of local government. However, there has been great anxiety in many Labour authorities which have implemented the most idiotic proposals. There are great numbers of absurd committees on equality of one kind or another. Someone once suggested to me, "Lesbians against fox hunting"! They do not go quite that far, but I am sorry to say that that kind of action has brought local government into disrepute.
The issue is serious, we could make jokes about it but time does not allow. So far as I can see, the only constructive comment which the Labour Party has made about local authorities is that, were Labour to be returned to power, there would be regional authorities. I should like to know how much would be taken from local government if we had regional authorities in England and Wales. What would be left of local government? What would be the cost? Where would be the future of what I still regard as an important service?
3.31 p.m.
Baroness Thomas of Walliswood: My Lords, in the 10 years during which I have been a county councilor—a period which began with the destruction of the GLC and ended with local authorities having to pick up the pieces in the aftermath of the ill-conceived review of local government—local government has been under continuous stress.
The noble Lord, Lord Williams, covered the finance and taxation aspect of it in great detail and I do not propose to repeat what he said. However, there is no doubt that the transfer of the power of expenditure out of local hands and into the hands of central government has resulted in a loss of independence so that since 1979 Tory Administrations have been not less centrist than

927
the Labour Administrations of the past, but—to the amazement of friend and foe alike—more centrist. I hope that in the debate to come we shall not hear arguments based on the data but it is one of the curious aspects that the level of taxation paid in any local authority area does not depend on the colour of the Government which controls that local authority. It depends almost entirely on the combination of government expenditure allowances, capping limits and grants which have been sent down from the Government to the local authority. Therefore I hope that we do not spend the next two hours or so discussing that.
The noble Lord, Lord Williams, also mentioned compulsory competitive tendering. That has undoubtedly brought some benefits. I do not oppose it when it is applied to certain aspects of local government, but I believe that it will be extremely destructive and I oppose it when it is applied, as it looks as though it will be, in the part of local government which offers advice to members in their client or purchaser role. The Minister looks amazed, he should know that local government is now divided into the client and contractor sides and that members are concerned with the client side. So are a good many of the officers.
If we reach the stage where, for example, we can no longer employ a sufficient body of engineers to advise county councillors and other local authority members on highways issues, then we shall be greatly weakened in our role in determining what highways policy should be and how it should be carried out. The Minister may feel that that would be an advantage, following the recent successes of Surrey County Council and others in defeating the Government's previous plans for the M.25. I shall not expand on that, undoubtedly the advice and expertise of the officer corps in Surrey County Council provided the intellectual and technical input which assisted in the defeat of the road plans. I promised the Minister that I would not talk about transport and that is the last comment that I shall make about it, so he does not need to reply.
In the period which we are discussing, over the past 10 or 15 years, local government has performed amazingly well, despite the pressures that have been put on it. Successive audit reports tend, on the whole, to be complimentary. They point to areas of unsatisfactory performance which are usually carefully considered by local authorities and attended to in subsequent years. But the Audit Commission has not been extremely critical of local government and its performance over the past few years. In well run authorities there have been extremely good working relations between officers and members. That has increased, despite the insecurity in career prospects to which those officers have been subjected, particularly in the past two or three years in the period up to and during the review of local government.
Increasing resourcefulness and inventiveness have been applied in satisfying local needs in the most cost-effective way. There has been a flexible response to new duties such as care in the community. That is despite the fact that the new money attached to new clients who are the responsibility of local governments as a result of Care in the Community has disguised the
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fact that little additional money has been put into social services over the past two or three years to satisfy the needs of those clients who were already the responsibility of local authorities.
Many local authorities under Liberal Democrat and other control have expanded their activities to include a wide range of what might be called "green initiatives". The council, which is headed by my noble friend Lord Tope, who sits on the Front Bench, has been distinguished in that respect. Others have also been distinguished in their approach to what one might call a local response to a global need. That is exactly the kind of thing with which local authorities should deal.
However, despite what I believe to have been a high level of success over recent years, local government cannot continue for ever in an atmosphere of apparent hostility on the part of central government. I do not know the source of the hostility. In the old days many Conservative Members in the other place started their political careers in local government. That is less so today, and perhaps it is the source of the hostility. But there is no doubt in the minds of people who have served in local government during the past 10 or 15 years that central government have been hostile to local government. I do not know which has been the most irritating or destructive: old Labour exercising poor control in certain parts of the country; or new Tory, using those deficiencies to criticise the whole of local government. What we need is independent, well-organised, responsive local authorities which are able, if necessary, to self-finance through local taxation a response to local people's needs, and so guarantee a plural society in which power is spread and not concentrated and which I am sure Members of this House defend and support.
3.40 p.m.
Baroness Fisher of Rednal: My Lords, I thank the noble Lord, Lord Williams, for giving us the opportunity today to debate local government. The pace and radical nature of the change that local government has faced over the past decade has been mesmerising. It is almost impossible to understand the whys and wherefores of what the Government have tried to do with local government.
Government initiatives have been driven by a common philosophy; namely, that private enterprise is better than public service. This philosophy of free market competition has been forced upon councils in relation to planning and the provision of services. We have seen a gradual erosion of the power of local authorities, achieved principally by a reduction in finance—a reduction in government grants of all descriptions. We have seen all the government competitions that local authorities must enter, whereby they are asked to put in bids and show what they can do, and then at the end somebody says, "Five out of 10 of you can have some money". We have seen the introduction of capping and we have an initiative called "deregulation". I do not know who thinks up all the nomenclatures that now relate to what we used to call local democracy.

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The majority of electors are worried, as are the councils themselves, that local democracy is being taken from them. It is a matter of grave importance, about which the Government should think seriously.
All the councillors on local authorities live in the local areas. They know the electors, the schools and all the facilities that can be provided by their local authority. I was about to mention travelling on the buses, but that is no longer a concern of local authorities. How we miss that in the city of Birmingham, which was the first local authority to have free bus passes for old age pensioners. That was a long, long time ago, when my friend Denis Howell—now my noble friend Lord Howell, who is in the Chamber—and I were on the Birmingham City Council. I think my noble friend will agree with what I have said. Those initiatives can no longer take place. Every local authority has to operate within a rut to meet the Government's philosophy of free enterprise.
As a result, we see a lessening of the powers of local authorities. Sometimes that leads to local councillors wanting to resort in a very active way to different measures to prove that the Government are on the wrong track. It is in this respect that local authority councillors feel that their importance is a lot less than that of a quango. They no longer have a direct voice in parliaments. Local authorities are seen as a mere side-effect of governing the country.
I was therefore interested when the Prime Minister put forward his new thinking on a drive to bring government nearer to the people. I thought that at last the Government—I was about to say "had seen the red light", but being a female speaker I do not think that that is a phrase I should use. It is welcome that the Prime Minister wants to do that. I was interested in the regional government idea that I thought he had in mind. I thought that he might be thinking along the same lines as Labour. I thought about it seriously because of the new integrated regional offices, as the Government call them, that have been set up in different parts of the country. There are now 10 such offices, the largest of which is in the West Midlands. I understand that between them those offices employ nearly 4,000 people and control spending programmes for local authorities totalling almost £4.5 billion a year. What is the need for those offices? Perhaps the Minister could explain why they were set up and what the benefits will be for local authorities. I shall be interested in his reply.
What worries me is that this could be the first step towards creating quangos. One wonders whether that is what will arise from the establishment of regional offices, or whether it means that at last the Government have said, "We'll move all these civil servants out of London where they are completely wasting their time and get them into the regions. We'll get them working with local authorities and in future local authorities will be smiling". That would be a very welcome reply from the Minister.
I turn to education. This is the area in which the Government want to get nearer to the people. Therefore, they involved parents and governors in the schools. As a result of being involved, those parents and governors
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began to understand how the money was spent in schools. For a long time they have realised that the Government have not been playing fair with them. Consequently, they began to agitate, to go on marches, and to write to Ministers saying, "Come, come, you can't blame local government any more; it's your responsibility". That was because they had seen the books. Once parents and governors are given that responsibility they cannot be hoodwinked any more. They know where the fault lies. They realise that it does not lie with the local authority; that is why they go on marches. So that is now laid at the Government's door.
My remarks may have been humourous and perhaps not very sensible, and they may not have added to the debate; but on these Benches political values differ fundamentally in relation to the role of local authorities from those of the Government Benches. With that remark I rest my case.
3.47 p.m.
Lord Boyd-Carpenter: My Lords, like my noble friend Lady Young, I am very glad that noble Lords have the opportunity to discuss this enormously important subject this afternoon, although I must confess that I am sorry that we do so on the basis that most of the speeches are limited to seven minutes. As has already been demonstrated, the effect is that it is not possible to give way to an intervention and therefore to get a live debate going. Within a seven-minute time limit it is not possible to give way. All you can do is quickly make one or two points. The points that I want to make relate to finance.
I choose that topic deliberately because finance is probably the weakest area in local government today. The local government tax is proving highly unsatisfactory. It is unsatisfactory in one particular way that has not been mentioned. Householders are placed in a band for the purposes of local government taxation. You are told that you have a right of appeal. But in fact, the right of appeal is very, very slow in being effective. In my own case, I was placed in a band 18 months ago. I appealed at once, and my appeal has not yet been dealt with. I suggest that to have an important tax provision such as this with a so-called right of appeal which is not in fact honoured and effective for 18 months is undoubtedly a weakness. The amounts of money involved are substantial. I understand that the appeal has been undertaken by the Inland Revenue who quite obviously are not very interested in the matter. I hope that my noble friend the Minister will indicate that the Inland Revenue will be told to get on with it.
There is also the very important question of the way in which the tax is raised and applied. Where single tier government has been accepted, I believe that the system is working fairly well. But where two tiers of government are operating, the system works very strangely indeed. Perhaps I may again quote from my own experience in Hampshire. On my own property, the local government tax is levied by the Borough of Basingstoke, which in fact is some 20 miles away. But when papers are received in respect of that tax, it

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appears that nearly 90 per cent. of the revenue so raised does not go to Basingstoke but goes to Hampshire County Council at Winchester.
I suggest to your Lordships that it is quite wrong to have a system of taxation in which the amount of tax is decided by a body that will take quite a small share of it. If there is to be an effective system of local government taxation people should be able to weigh the benefits of the services rendered against the amount of tax demanded. When, as we are told, 90 per cent. of the revenue raised goes to an authority which does not impose the tax, then the discipline which otherwise operates is lost—the good discipline of knowing that if one imposes a tax, one has to face the unpopularity of that tax in order to justify the services which will be rendered. That seems to me to be another very serious defect of the system. It is indeed wrong for one authority to collect most of the money which another authority spends.
That disadvantage is overcome when there are single tier authorities. But as my noble friend the Minister will have to admit, the changes effected to the structure of local government have not been very far-reaching. Far too many authorities still remain two-tier, with what is to my mind a very serious division between the responsibility of raising revenue and the decisions on how that revenue shall be spent.
Finally, as regards finance, my noble friend Lord Orr-Ewing asked a very important Question earlier this afternoon. There are a number of major local authorities in this country which have incurred very heavy debts and have given the impression that they have not been particularly resolute in restraining the growth of debt. I do not wish to cast aspersions at the four local authorities mentioned in my noble friend's Question; but I ask your Lordships to have very much in mind the fact that those local authorities decided to incur very heavy debts indeed. That must be unsound finance. In the long run, it must work against their capacity to render proper services. It seems to me that it is thoroughly unsound.
I have referred to a number of points on finance, which is just one aspect—perhaps the most important one—of local government. I hope that my noble friend the Minister will be able to answer those questions. All of us in the House desire to see local government working well and it is quite clear that in matters of finance local government is not working well at the moment.
3.55 p.m.
Baroness David: My Lords, subsidiarity, on which the Government are very keen in the EU, is forgotten when policies affecting central and local government are concerned. There has been a constant sapping of the powers of local government since 1979, which has accelerated since John Major succeeded Margaret Thatcher.
So far as concerns financing, the abolition of the poll tax was followed by a significant decrease in the local government share of revenue raising. In fact, it is now down to 14 per cent. The combination of SSA and the
932
capping regime effectively means that central government sets the expenditure and taxation levels for local government, which is left with a mere prioritising role.
Local government has lost control of higher education, further education, grant-maintained schools, school inspection, aspects of housing, the police and the careers service—waste management is soon to go. People have probably forgotten that local authorities once dealt with health. In each case, local democratic control has been replaced by quangos; the funding agency for schools; FEFC; TECs and the new police authorities.
The CCT legislation, now extended to white-collar workers, removes any discretion or independence from local government in responding to local circumstances. Many local authorities have provided examples of innovation in private sector contracting, without the diktat of central government. For example, my own county of Cambridgeshire has externalised its education personnel service, its information technology facilities management, and recently its transportation engineering services, all in response to local circumstances. CCT is more likely to inhibit such local innovation than to stimulate it. The Audit Commission has shown that CCT adds to costs rather than reduces them. A new report from the Equal Opportunities Commission puts beyond doubt the damage that it has done and the enormous waste that it has caused.
The local government review has been bitterly fought within local government. It is seen as a kind of hostile colonialism in Wales and Scotland, where it was imposed without an independent commission. After four years of the review the Secretary of State has revived it in a new form. We do not yet know the terms of reference. That will inevitably lead to a period of more uncertainty and loss of morale. There can be no expectation of delivering savings; very much the reverse.
So far as concerns Cambridgeshire, the first suggestion was for three unitary authorities: Huntingdonshire, Peterborough with Fenland and Cambridge City with South and East Cambs. When the people of the county had a chance to express their views, support was weak. The greatest support—35 per cent. in an independent MORI poll—was for the status quo. That is what the commission finally recommended to the Secretary of State in October 1994. Over four months later he announced that he was not prepared to accept the no-change recommendation but was to set up a new commission with a new chairman—Sir John having been unceremoniously sacked—to examine the case for Peterborough, among others, becoming a unitary authority. Also, he was prepared to look at the case for Huntingdon. Can there be anything in the fact that the MPs for Peterborough and Huntingdon happen to sit in the Cabinet with the Secretary of State?
Should both those suggestions become realities, the rest of Cambridgeshire would not have the population to sustain a two-tier structure; and as the Peterborough proposal is for the City of Peterborough, one wonders how the neighbouring towns, such as Whittlesey and Yaxley, which look to Peterborough for work and recreation, would manage. I myself would have favoured two unitary authorities based on Peterborough and Cambridge, which was what Redcliffe-Maud proposed in his Royal Commission report in 1970. That would have

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made sense and each would have been large enough to sustain key services such as education, libraries, social services, environmental planning and conservation. If the new review procedure produces the results that I fear it may, nothing but harm can be done to those services and another slice of public money which could have gone on those services will have been wasted.
It is depressing to see the deteriorating relationship between central and local government, now in the 1990s as evident in the shire counties as in the metropolitan areas. There are a number of reasons for that. Financial constraints have bitten much deeper. Many rural areas do not have the opportunity to "bid" for supplementary government grant—for example, City Challenge. GM legislation has hit LEAs more fiercely. The Conservative Party's demise in large swathes of shire England—Buckinghamshire is the one remaining Conservative-controlled council—has plainly had an impact. No wonder Conservative councillors are deserting in droves. Some of the most derogatory and dismissive observations from the Secretary of State and his Ministers have been directed at shire local authorities—for example Suffolk, Nottinghamshire and Cornwall—yet from shire counties (and I proudly say, particularly my own) there are many examples of innovation and good practice.
In praise of local government I point to the way it has successfully implemented a wide range of government-inspired legislation—complex and contentious legislation at that; for example, the abolition of the rates, replacement by the poll tax and then the council tax, at immense cost; the implementation of the Government's continuous programme of education reforms; the new "special needs" legislation; the introduction of Community Care; the implementation of the Children Act, and publication of statutory performance indicators and league tables required by the Audit Commission. Public opinion polls show high and increasing levels of satisfaction with local authority-provided services.
A new partnership must be founded on mutual respect. We must have change. I mind about local government; I believe in its importance and I want it to succeed. But it is not surprising that local government feels under siege from the range of government reforms, most of which have two principles. The first is to remove major services from local government and the second is to minimise any remaining freedom and discretion exercised by local authorities.
There must be acknowledgment that the centralising tendency has gone too far. I am sure that there could be partnership and co-operation if the Government could be persuaded to change tack. Can the Minister give us some hope? The future of local democracy is an extremely important issue and one which has implications for democracy itself.
4.2 p.m.
Lord Sefton of Garston: My Lords, in opening her speech the noble Baroness, Lady Young, referred to the question of when the change in local government first took place. All speakers will recognise that change has
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occurred. The powers that have been taken from local government are so obvious to everybody that there is no need for me to repeat them. But beneath that change we should understand what happened.
We can consider the police forces, to which the noble Baroness referred—the regional task forces. We should bear in mind how those task forces came into existence. One would assume that politicians had something to do with the formulation of regional task forces. No such thing. Regional task forces came into operation because the police services did not consider that they could do their job properly without a regional input. That sprang into regional task forces which were not answerable to a local authority. I doubt that they were answerable to the Government, though I suppose the Minister in charge of the Home Office may exert some influence on the regional police services. That is how they started.
I want to offer a challenge to the Minister. I was asked to explain to an audience in London (of all places!) the difference between the grants received by Greenwich and Westminster and how they were arrived at. My reply was that I did not know. However, it is simple to find out. All I had to do was write to the department, which would explain very carefully the difference between the two grants and all would be revealed. I did that and received back a folder about two inches thick. It was the SSA.
I found myself completely befuddled. The documents went into three, four and five decimal points about some part of the system on which they determined the grants. I sent the folder to a friend of mine who happened to be in the financial department of a local authority—and he shall be nameless. I asked whether he would mind persuading somebody in the authority to tell me the difference between Wandsworth and Greenwich in relation to grants. I received no reply. I am certain in my own mind that no politician in this Chamber can give us a reasonable and sensible explanation of the SSA. If my assumption is correct, can the Minister explain to this House, in terms that can be understood by everybody, how the SSA works? I have yet to find anybody in local government or in the local authority associations—perhaps we should ask them to explain how it works—who understands it.
That is the problem with local government. It is not political. I remember when I considered the change to be taking place; it was when a Labour Minister said, "The party is over". Up till then we had done well in Liverpool. We had all the usual procedures that go to launch a parliamentary Bill. We had a parliamentary Bill to govern the planning of Liverpool; we came to Parliament and had it approved, all with good consensus. Everybody agreed—there may have been party differences on some issues—that local government was one of the main essentials of our democratic system.
In my last three minutes I want to ask whether we still have local government. Can it be described as "local" when one of the services set up at great expense to ratepayers has been taken away. As was mentioned earlier, the Government should return some of the assets to local authorities. They should take them out of the hands of private enterprise and give them back. Such an undertaking was set up and now it is supposed to be a

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local service, yet at any time it is at the behest of shareholders who have shares in the company to sell it to somebody in France. Is that democracy?
In relation to electricity we see similar examples. We hear about sovereignty and democracy; no such thing. Local government is not local; neither is it democratic and neither, to a large extent, is it government. The transport services on Merseyside are not controlled by the local authorities; they are controlled by an ad hoc body which instructed nominees to sit on a board which considers transport. The real power is in the hands of the officers. That is the battle. It is not between parties; it is whether or not we as politicians, as parliamentarians, are so jealous of our Parliament and our democracy that we will stand up to the officers, I can give the House a perfect example.
I attended a delegation of some people from Manchester, which has one large undertaking. I am informed that if the Government wanted to change that undertaking there would need to be a parliamentary Bill. The Minister told Manchester transport authority, with representatives on it of the political parties, that it was to be split. They did not want that. So those representatives came down here and consulted some politicians, of which I was one. Because it was the other place I thought that I had better not open my mouth too much; after all, I am an undemocratic Member of Parliament. I left them all to do the talking and they put their case that they wanted to oppose the Minister and did not want the undertaking split up under any circumstances.
At the end of the meeting I said, "Look, are you being honest? Are you really telling me—a Manchester politician—that you are determined to oppose the Minister and make him come to Parliament for a parliamentary Bill?" "Yes", was the reply; "We will fight, fight and fight again in order to ensure the worthiness of our cause". Did they fight? No. I forecast then that within 12 months they would agree to the scheme prepared by Ministers and accept it. What was the result? They accepted it because in fact our so-called local democracy has ceased to be.
I say this across parties because I am not beholden to one party on the question of local democracy. I am glad to see that our new Labour Party will commit itself to decisions that are taken and that it will in fact introduce methods of control for new organisations. However, there is only one way to do it, and that is through proper democracy. I put forward a suggestion. The first thing a Labour Government should do is to pass a Bill on all essential services that makes it compulsory for all those services such as gas, electricity and water to consult representatives of each local authority concerned. That will be a good start to restoring proper democracy.
4.10 p.m.
Lord Bellwin: My Lords, an allocation of seven minutes to talk on this subject really is a joke. I just do not know even where to begin. I am grateful to the noble Lord, Lord Williams, for bringing it forward but I had my reservations initially and I have to say that had I realised the limitations, frankly, I would not have taken part. All one can do is make a few observations very
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quickly, touch on a few subjects and then sit down and hope for the best. Perhaps I may say first of all—and I am using part of my precious seven minutes to do so—what a pleasure it is for me to listen to my old friends, even though I do not agree with most of what they say, such as Bill Sefton, Doris Fisher, and many others. It is a bit like old times for me.
As the song says, where do I begin? To touch quickly on just a few points, may I say to the noble Lord, Lord Sefton, yes, I absolutely do understand how the SSAs work. I was the Minister responsible for introducing block grant in 1981–82. I knew how that worked and I know how the SSAs work but I cannot cover the subject in seven minutes, to the exclusion of everything else. However, I should be glad to talk to my old friend, and any one else, about this subject later on. I know how it works. It is not that difficult. In actual fact there are many people who think it is the finest system that there is anywhere. Perhaps I may quote —I know I have got to speak very quickly—what others say of it. The Audit Commission said:
"A more sophisticated system for equalising needs than any overseas system examined in this study".
That is what the SSA system is. It is simply a means of measuring all the demographics within each authority, applying a formula to them to base need and then issuing grant. This is all intended to equalise. If that all sounds complicated, well, that is only until you start to look at it, and then it becomes something less. Anyway, I think it is a good system. Tony Travers of the London School of Economics—by no means a Conservative—and Rita Hale of CIPFA said of the SSA system:
"No overseas country appears to have a full grant system which goes so far in its attempt to achieve equalisation".
Regarding CCT, may I say to the noble Baroness, Lady David,—another old antagonist but a friend, I hope, nevertheless—that I could not disagree with her more. The facts show that CCT has led to an average saving of seven potential contract values, usually coupled with improvements in quality. Even David Blunkett—not a Conservative—said:
"It would be foolish to pretend that the jolt given to many local authorities has not had some beneficial effect in stimulating their own concentration on quality as well as improved managerial practice. CCT has resulted in poorly organised DSOs re-examining their role and efficiency."
It is actually common sense and I speak even today with lots of local authority leaders. Although they do not like some aspects of it they all agree that it must be right in many ways and they are all getting better value for money.
On the subject of quangos, I remind noble Lords opposite, just for the record, that there are now some 1,000 fewer quangos in the country than there were in 1979. There are 100,000 fewer people now working in quangos than there were in 1979. If anyone wants to question that with me later I shall be glad to give the source of that information.
I was sorry the noble Lord, Lord Williams, did not say anything—I presume others will later on—about the Labour Party's intentions regarding regional government. To use a Yorkshire saying, "It's just barmy". I am absolutely convinced that by the time the election comes

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the Labour Party will long have abandoned that one. It makes no sense whatsoever to talk about bringing local government closer to people when it will have precisely the opposite effect. It will simply add another tier at the most enormous cost, with committees, talking shops and all the rest of the things that go with it.
And what will it achieve? It will achieve the division of funds and resources at local levels. Fights will take place. I have yet to meet one Labour leader—and I have spoken to a number of them—who envisages the whole thing other than with some sort of horror. It is interesting that in a government survey of 1991 on local government structure one sees that of the 1,900 organisations which replied only 26—fewer than 2 per cent.—were in favour of regional government. That means that 98 per cent. were not in favour. I reckon that is a pretty fair margin by any criteria.
The noble Baroness, Lady Fisher, talked about the regional offices. It is not for me to answer on that, but I think it is a splendid idea, where there are four or five regional offices for each department in major areas, to take them all together and have them under one heading. All else apart, the saving is enormous and from what I have seen of it working in Leeds it is extremely good. I am all for it.
I should have liked very much to talk about certain things I should like to see in local government but one hardly has the chance to do that in seven minutes. However, I should like to say that there are some good things taking place. For instance, I like very much the way in which local government is now working much more closely with the private sector. They are doing things together, making land available and achieving all kinds of things. If you go round our cities you can see in nearly every one of them instances of the local authority working with the private sector; and that work is now producing all kinds of developments, to the benefit of the people. That has to be good, and I welcome it. I do not think anyone would do otherwise really.
Among other things that I had hoped to touch on but which I hope will be discussed by other speakers later, one was to discuss ways in which we can do it all better. For instance, ought there to be the same number of councillors per ward as there are now? Are our councils too big? Should they be smaller? Certainly I know things are done differently in other countries. Los Angeles has only 13 elected members, but they are all paid. Whether that is good or bad I do not know: you can argue about that. It probably is not good, but still it happens. There ought to be better ways of doing things and it is these things I hope the Select Committee will eventually be talking about.
There are other novel things we can do—better things—for which many of us have worked for such a large part of our lives and which we want to see better done. I am not happy when people are unhappy. It has got to be something we do together: otherwise it is all meaningless.
4.19 p.m.
Lord Parry: My Lords, despite the cheerful assurances of the noble Lord, Lord Bellwin, these standard spending assessments remain a total mystery to me. However, I am sure he would agree with me that it is essential, however they are arrived at, that the new authorities should have an early indication as to what they will have for 1996 and 1997 in order to have a financial target at which to aim. Presently, existing councils have a rough idea of what will happen in the following financial year, based on previous spending performance, but in the case of the new unitary authorities there will be no such background of information on which to formulate their spending plans. It is therefore vitally important that details of the likely SSAs are provided as soon as possible. Can the noble Earl tell the House how soon the shadow authorities in Wales will be told their standard spending assessment?
On finance generally, it is essential that the SSAs, the capping levels, and so on, should be fixed at a realistic level and that the government funding should reflect each council's needs. The new authorities should not be financially squeezed in their first year of existence to an extent where they are unable to deliver services adequately. For example, there should be, as the noble Lord, Lord Williams, indicated, no repetition of the situation last year when the Government agreed to pay an award to teachers, but did not make provision to fund it in the revenue support grant settlement. The SSAs should represent reasonably the level of expenditure proved necessary by the former authority's record plus the disaggregated proportion of the former county authority's precept. Can the Minister confirm that that will in fact be the case?
I am told that most issues relating to the transfer of staff from the present to the new authorities have now become clearer. However, the problem remains of disaggregating county council staff. For example, in my own existing county of Dyfed, the staff will have to be split between three new unitary authorities. That will mean 240 people transferred to Pembrokeshire from Carmarthenshire and 160 to Cardiganshire from Carmarthenshire, which is 400 people in all. It has been agreed that that should be done on the basis of population.
That creates its own problems in deciding who goes where and how they can be fitted into the structure set up by the shadow councils. Almost inevitably there will be redundancies after 1st April 1996, as all staff now have the right to transfer, but do not have the guarantee of a job under the new structure. There will be contests and claims made against the new system. The Minister may agree with me that the Government should make adequate provision to cover redundancy costs rather than have them borne by the new authorities at the expense of other service provision.
I have received a letter from outside Wales and my own area of influence. It is from the chairman of the education committee for the Royal County of Berkshire. She asks me to add a question to the list which I am asking on behalf of my own area. Will the Minister answer her question? The question is: Why has Berkshire been singled out in this way so as to cause

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even greater difficulties, as she sees it, than those which appertain in Pembrokeshire? I simply add that question to my list. I know that the Minister is grateful to me for asking these detailed questions.
There is also the vexed question of "detriment". It applies to those staff who obtain posts with a new authority but at a salary lower than they presently earn. The Government have approved a detriment scheme which will enable such staff to retain their present salary for a period of three years. Apparently, most of the criticisms of the original draft scheme have been met and rectified. But again, the question arises as to where the money is coming from to cover the detrimental schemes. The local authorities in West Wales have expressed concern to the Staff Commission for Wales concerning the terms of the compensation for redundancy regulations. While accepting that there is little possibility of these being further amended, there is one matter that should be further considered, which is termed "clawback".
When an employee decides to leave under the compensation provisions, and additional service exceeds six-and-two-thirds years and there is entitlement to redundancy pay, compensation under the regulations is abated or clawed back. The retirement lump sum is reduced and sometimes the retirement pension. This effectively nullifies in whole or in part the value of a redundancy payment.
I hope that that can be accepted as a very real disincentive to retirement from that very group of staff that local government would expect to leave. The local authority for Pembrokeshire is a major employer and undoubtedly there will be eventually a reduction in jobs as a result of reorganisation. Current provisions that act as a very real disincentive to retirement for those who would consider leaving need to be dealt with, and I urge that for the local government period in Wales at least, which is up to 31st March 1997, it would be very helpful if these clawback arrangements could be set aside.
I had planned to speak about compulsory competitive tendering, but I shall simply ask a question. Will the Government consider deferring the requirements for 12 months? We can then perhaps return to the arguments.
I shall just introduce electoral arrangements. As regards the fire brigades of the new authorities, there will be some disintegration of all these services in Wales. In fact, two of the authorities have received commendations in the Government's own terms.
Perhaps I may conclude by underlining what one very senior Welsh local government officer said. He will be accepting redundancy because he is "disappointed and disillusioned by all the uncertainties". He told me yesterday, "The general view of senior officers and experienced councillors from all parties is that the underlying intention is not so much to reform local government as to disinvent it".
4.25 p.m.
Lord Dean of Beswick: My Lords, I too welcome the opportunity to take part in this debate on local government. As most speakers have said, one cannot cover many of the areas of local government in seven
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minutes. First, I wish to deal with a Question asked earlier today during which the noble Lord, Lord Elton, intervened on the side of the Government. I believe that he made my case in what he said. He asked why local authorities do not spend more of their assets in order to help run the cities. That was my point. The assets that I was speaking about were probably the largest that they had and the easiest to filter through the legal process. The Government perpetrated an act of legalised brigandry on local authorities when they privatised the water industries and confiscated the money. It was a diabolical act and one of the worst actions that any government have taken against local authorities in this country. They were substantial sums of money which could have been used to keep debt charges down.
I wish to question some of the responsibilities which have now been placed on local government by the Government and which are seriously underfunded. When I was in local government I was opposed to the implementation of the Seebohm Act which gathered unto itself care from the cradle to the grave in one huge committee known as the social services committee. I believe that I was the first to make a plea in your Lordships' House about care for the aged which used to take place in the community through the old welfare services department before it was amalgamated into the new social services department, along with childcare. That body used to do a job for which it was well suited and better suited than any other agency. At last the Government saw sense and brought in community care, but grossly underfunded it.
It is not only me who is saying this. One has only to read the press at weekends to realise that elderly people are having to mortgage their homes or whatever assets they have, in order to obtain adequate nursing accommodation when they are on the downward trail and permanently ill. It is one of the disgraces of our community that in some cases we have allowed that to happen because those people belong to the generation which made the biggest input to the wealth of the country as a result of their hard work over a long period of time in order to get that money together. I understand that the Prime Minister himself has taken this matter on board and has asked a working party to report on it in order to resolve the problem. The sooner we get away from the problem the better. The sooner that local authorities are given finance to take care of the ageing population, the better it will be done to the satisfaction of most people concerned.
With the permission of your Lordships, I quote from today's Evening Standard in which Mr. Major, the Prime Minister, attacks the grey face of London. He speaks about the monstrosities that were built in the last housing drive by local government but force-fed by the governments of the day, both Conservative and Labour, which insisted on building properties which local authorities in the main did not want. He wants to change all that.
The Prime Minister spoke about the success of London Docklands. I do not begrudge that success. It is a marvellous achievement. However, I must tell your Lordships that of all the money that the Government have made available for inner-city development, 90 per

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cent. has been spent in London. I am not arguing that point, but surely only 10 per cent. for the rest of the country—for Liverpool, Leeds, Sheffield and Manchester—is an absolute pittance. If those cities had received similar financial support, they would not have needed urban development corporations. The local authorities could have done the job themselves—but only if they had been allowed the money.
If the Prime Minister really wants to rejuvenate the inner cities by providing affordable housing, the Government will have to put their money where their mouth is. Once again, the Prime Minister is falling back on the idea of partnership with the private sector. I am in favour of that. If the private sector can be persuaded to put in money pound for pound to help to provide low-cost housing for rent, that would be ideal. I have never been against that. I have never thought that everybody wants to live in council houses. There should be alternatives. I hope that the Prime Minister's words do not fall on deaf ears. I hope that private investment will come forward. But first the mould that the Government have been operating since 1979 must be broken. They have virtually banned local authorities building houses for rent. That is nonsense. It is nonsense to prevent local authorities embarking on building programmes which would also help the building industry.
Up to a few years ago I used to speak on housing pretty regularly at the Dispatch Box and I always pressed the Minister of the day to allow local authorities to get on with their historical job. All the reports from non-political groups, including the Duke of Edinburgh's Report and that entitled Faith in the City from the most reverend Primate the Archbishop of Canterbury, have come up with the figure of 100,000 extra houses a year being needed for rent if we are to get rid of the appalling homelessness that now faces us. I was constantly advised by the Minister of the day that the Government would do that—but through the Housing Corporation and with the help of housing associations.
But what has happened? About two years ago, I was told by the noble Baroness, Lady Blatch, when she served at the Department of the Environment—it might have been another Minister, but I believe that my recollection is correct—that eventually the housing associations, through the auspices of the Housing Corporation, would achieve their target of building 68,000 houses a year. But what has happened this year? That figure has been cut drastically to, I believe, a total of about 30,000. Indeed, the figure has dipped because at one time it reached over 40,000.
On that basis, are we ever going to be able to tackle the housing problem in this country? Over the past 10 years, the number of registered homeless has increased by 50 per cent.—and that does not include the number of people who do not have a roof over their head but who do not register as homeless. If they are included in the calculation, the official figure trebles. As I said, seven minutes is not long to discuss all this, but I hope that I have
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given your Lordships some ideas of the direction that we should be taking if we are to deal with the current situation.
4.33 p.m.
Baroness Seccombe: My Lords, I also should like to thank the noble Lord, Lord Williams of Elvel, for bringing this matter before the House today. It is timely that we should debate the state of local government just one week before going to the polls.
I was very tentative about speaking today as I have had only one four-year term on a local authority. Sadly, the electors decided that I should not continue—and then the same fate befell the West Midland County Council as four years later it too ceased to continue.
I am a great supporter of local government. I believe that people who live and work in their communities should have control over the cost and quality of the services they receive. They should also have the ability to shape the development of their local environment. Over the years, many distinguished people have given outstanding service, often without remuneration, so I should like to pay tribute to them, and of course to everyone who has made a devoted and unstinting contribution in his or her capacity as a councillor.
I pondered on whether I should concentrate on how Conservative councils give a better quality of service to their council tax payers—and always with a better value for money—but, as the Audit Commission has confirmed that, I decided not to do so. On reflection, I thought it would be useful to remind ourselves of where the Labour Party, old or new, stands on two issues: competitive tendering and regional government.
I am sure that we all remember that during the 1970s local government had become inefficient, bureaucratic and overstaffed. We can probably all recall an example of that. My own is the sight of the local refuse vehicle, with all the refuse collectors relaxing on it, parked at the cricket club from 12.30 to 3 p.m. as they were not allowed back in the depot until then.
Change obviously had to take place. In our personal lives, we shop around to find where we can get the best value for money. It therefore was sensible to take the same attitude with some of the services provided by local authorities. Legislation in the Local Government Act 1988 extended a whole range of services, such as refuse collection, street cleaning and catering services, to compulsory tendering. That followed the success of some Conservative councils which had pioneered the initiative of introducing competition into the provision of local services. The result has been an enormous success, and council tax payers across the country have benefited and received services giving real value for money. The legislation was fiercely contested by the Labour Party which, sadly, too often behaves as if local services should be run in the interests of those who provide them.
Labour's 1992 general election manifesto committed a future Labour Government to abolishing CCT. There then appeared to be a softening of attitude on the issue, but in recent weeks "New Labour", just like "Old

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Labour", appears to commit the party to abolishing CCT. As it says—I quote from Renewing Democracy, Rebuilding Communities:
"Labour believes it would be best for everyone to end compulsory competitive tendering".
That worries me—and it worries me even more when I read that the national secretary of the TGWU, Mr. Jack Dromey, Harriet Harman's husband, and hailed as the great moderniser referred to—again I quote:
"the detailed discussions between the unions and Labour's front bench prior to the publication of the document"—
that is, the document to which I referred a few moments ago. He said on another occasion:
"A local authority must include as many hurdles as it can in the tender specification it sends to private contractors. It must try every possible way to prevent services being taken over by private firms."
I find that very threatening and I cannot conceive how it could possibly be in the public interest. We want a quality service at the lowest cost. It certainly does not seem that that is a priority for the Labour Party of the 1990s.
The second issue which concerns me greatly is the confusion over regional government in England. My experience on the doorstep is that people are not the slightest bit interested in yet another layer of government. I believe that what they want is good government at Westminster and good administration in their local councils. I live in the Midlands and I have never heard anyone clamouring for a regional assembly. As a resident of Stratford-upon-Avon, I cannot believe that there is anyone there who would welcome that expensive bureaucratic tier, which would probably be based in Birmingham. What would it do? Would central government and local government give up powers to the new body? Perhaps I can follow my noble friend Lord Bellwin and say, "What a barmy idea!"
It is difficult to find out where the Labour Party stands on this issue. One day it is for it; the next it is not so sure. I can surmise only that it is the West Lothian issue that is at the bottom of it. Frightened of the SNP, the Labour Party has committed itself to a Scottish parliament and an assembly in Wales. Why they should be different I do not know. Therefore, it had to suggest regional assemblies for England in order to get around the difficulties of the West Lothian question.
I believe that regional assemblies would be resented by English people, cause friction within the Union of the United Kingdom, reduce our influence in the European Union and be a very expensive folly. I believe that it is right to be discussing these matters today as I believe that there is a very real threat to local government.
4.40 p.m.
Lord Desai: My Lords, the noble Baroness, Lady Young, said that all of us have some experience of local government. I rise to say that I have no active experience whatever of local government. However, I hope that being an academic I can still spend seven minutes saying something useful.
For a long time there have been attempts to reform local government. For the past 20 years we have heard of Royal Commissions, Green Papers, White Papers,
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reform and so on. There is a great superstition that local authorities spend too much money. Anyone who looked at the figures would know that for every £1 that local authorities could overspend—and they cannot—central government has overspent much more. Earlier today we discussed local authority debt. Compared to the national debt, local authority debt is puny.
We had grant-related expenditure assessments and now we have standard spending assessments. We had the poll tax and now we have the council tax. All those efforts have resulted only in the fact that local authority spending as a proportion of GDP was 12 per cent. in the 1970s and it is 12 per cent. today. That is flat as flat can be, Of course, one may argue that it took a great deal of effort to achieve that. But along the way there has been enormous waste. One could have built several hospitals for the amount of money that the poll tax cost the country.
One may ask why it is that there is a suspicion of local government. Why have considerable attempts been made by the present Government to turn British local government into the French model of centralised préfectures, which are run from the top with little local freedom? I argue that it is based on two aspects: ignorance and contempt. Whitehall is ignorant of townhall and has contempt for it. I do not make such an assertion lightly.
I wish to quote extensively from a research report which was published by the independent Commission for Local Democracy. It was written by two colleagues of mine at the London School of Economics, George Jones and Tony Travers. They interviewed many civil servants, former Ministers and Ministers. They prepared a paper called Attitudes to Local Government in Westminster and Whitehall. It makes chilling reading and is somewhat amusing too.
All the people must remain nameless, which was the condition under which they agreed to be interviewed. Therefore, the guilty shall remain nameless. A former Minister stated:
"Local government is a lower middle-class activity, of course with some exceptions. The lop mandarins of the civil service come from different social strata from those in local government. There are more graduates in Parliament than in local councils. These differences point to differences in quality … Local government people have limited vision. There are some good chief officers, but a lot are pretty ordinary. Mayors are chosen on Buggin's Turn: they have no ideas and cannot speak. Parties find it hard to get good candidates to stand for election".
That was summarised by a civil servant who said that civil servants possess:
"Rolls-Royce minds and local government officers have motor-cyclists' minds".
If people start with such an attitude, is it a surprise that we have what we have?
A former adviser at the Treasury and at the Department of the Environment stated:
"the Treasury sees local government as an unnecessary encumbrance the country can ill afford … a hole in cost control … a threat to macroeconomic policies".

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The Treasury, which spends several times what it allows local government to spend and has such little control over spending that lately we have seen some spectacular PSBR figures, blames the local authorities for what it presumes is overspending.
Of course, the truth is that local authorities have limited powers to spend. They are not allowed to raise revenues locally and that is a great denial of democracy. When this Government first came into power they had a great theory called "the theory of public choice", which is market oriented. The theory was that if there is accountability these people will not get away with over spending.
But local authorities are perfectly willing to state in an election campaign, "We will tax you more". When rate-capping was introduced I went around collecting signatures. Plenty of people in Islington were willing to sign a paper stating that they did not want rate-capping. They would rather pay rates and have decent services than have central government tell their local government how much to spend and how much to tax. We have neither local taxation nor local control on revenue.
The standard spending assessment comes from something called "a regression analysis". I know a great deal about regression analysis but I shall not bore your Lordships with that. The point about it is that it shows only that across all the authorities the average weekly cost of keeping a five year-old child is £35.20. That is an average figure and is an utterly useless device for settling local variations. I did not make that up; it is part of statistical theory. I would not mind making it up but I do not have to.
Rigid centralised formulae have been used to take away local government autonomy and, by and large, to have deteriorating local services in the Government's hope that the people will dislike their local authorities. What happens time and time again—and it will happen next week—is that more and more people are supporting the Labour party. Next week there will be no Conservative councils left in this country.
4.48 p.m.
Lord Stoddart of Swindon: My Lords, 1 wish to declare three interests. First, I have the honour to be vice-president of the Association of District Councils. Secondly, I am an adviser to UNISON. Thirdly, for 18 years I served as a member of the Reading County Borough Council, leading it for seven years. Of course, that was in the days when there was real local government, a proper partnership between central government and local government and when each organisation respected what the other did.
Now we have central government with all the power, having taken most of it away from local government. I believe that all noble Lords will agree that in this country we want independent, viable, well-governed local government that is organised in units near to the people and accountable to them. It should operate with the minimum of interference from government and with wide powers to provide, control and direct services within its area. That is essential to democratic government.
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The Victorians knew that and provided us with just such a democratic local government system. That is a Victorian value which the present government have failed to emulate. Indeed, they have gone out of their way to destroy what Victorian Conservatives and others built in local government.
One of the policies which illustrates just how centralising this Government are—and we have already heard about it—is that of compulsory competitive tendering, not only for manual services such as refuse collection and street cleaning but now for administrative services, including housing management. If ever there were a social service which needs sensitivity and continuity, it is housing management.
The noble Baroness, Lady Seccombe, who unfortunately is not in her place, criticised local government and sought to join us all with that slanderous criticism. I now unjoin us from it because I believe that it was a slander on local government which will be very much resented by those decent people who give to local government their voluntary services now and who have done so for many years past.
Perhaps I may return to compulsory market-testing madness, because that is what it has become. It is now causing local government real problems and indeed, some of those problems were set out in an excellent article by Sonia Purnell in Monday's's Daily Telegraph. I should like to quote some passages from that article to show how CCT is indeed failing. The article states:
"The Government's drive to privatise council services is in crisis with increasing resistance from local authorities of all political colours.
Scores of contractors have gone bust or been sacked, costs are rising and local government auditors have given warning about the increasing risk of corruption with so many multi-million pound contracts at stake".
The article later continues:
"Some of the contractors have also expressed doubts about its efficacy, particularly when it compels councils to privatise, often against their will, and attracts over-agressive bidding with a resultant low priority on quality".
Those are not my words. That is an article in the Daily Telegraph, which I hope noble Lords opposite still read. I wish that they would do so because it would give them some very good advice which they may wish to take on occasion.
For local government to succeed and for it to be free, effective and accountable, it must be financed properly from sources over which it has control, not from handouts from central government who then seek to dictate which services should be provided and what should be the level of those services. As my noble friend pointed out, it is nonsensical that local authorities are now raising only 15 per cent. to 20 per cent. of their expenditure from one significant source; that is, domestic council taxpayers. It is even more nonsensical that the Government are permitting only a 0.4 per cent. increase in the standard spending assessments this year when their own limit for their own spending is six times that, with a 2.4 per cent. increase. Some government departments are spending even more than that.

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Local governments need far greater access to their own resources. I believe that they should have a share as of right and at a locally decided rate of some of the taxes which at present go to central government; for example, a locally determined local sales tax. But that is for the future and after much debate.
But one source of finance which could be returned immediately to local government is the business rate. That was removed from local government because businesses moaned constantly to the Government that they were being mulcted by local authorities. They have since learnt to their cost that central government are more predatory and less efficient than local government. I believe that many businesses would now return gladly to the local business rate, particularly if they were given an input into local government decision-making.
I say to my noble friends on the Front Bench that we need the Labour Party—because it will not happen with this Government—to return to local government the services that have been lost. Having returned those services, they must trust local government to do its job. Let the Labour Party remember that it built itself up on independent local government and it should never forget that. What is more, the Labour Party should remember that more power breeds a more rather than less responsible attitude. Let the Labour Party trust local government because the Conservatives never will.
4.56 p.m.
Lord Dixon-Smith: My Lords, I speak with some pride as a fairly recently-created vice-president of the Association of County Councils. I am doubly proud because I happen to know that one of my predecessors as chairman of that association is also to speak in the debate. It says something for the quality of local government that there are two of us here from opposite sides of the House.
Of course, it is not for anyone to impute a political motive for a debate on local government at a time such as this but we should all be grateful to the Labour Party because it has made possible a wider examination of some of the significant issues which face society today. That wider examination arises because local government is a part of government. It is not a separate estate which stands alone but is part of a whole. Thus, in examining the attitudes of one part of government, we must inevitably illuminate and throw light on attitudes relating to the remainder. When we do that, we begin to come up against some very difficult questions which I suspect those who promoted the debate would prefer not to have to answer.
I have listened with great care to what has been said today about local government and in particular about the problems of those government services for which it is responsible. Those are serious matters of vital interest to all members of the community and as such are portrayed by speakers with a careful eye on the impression that they wish to create in the minds of the public, even if that means paying more attention to difficulties and problems than to successes.
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But behind all the criticism and complaint, there is a common theme: everything would be better if only the Government would allow the odd extra million pounds here, the odd few hundred thousand pounds there, and so on. Money is the problem and always has been; and of course it is the Government's fault.
I should perhaps make it clear that I believe very strongly in local government. I spent 28 years working hard in it. I believe in the power of local, democratically-elected representatives to set priorities and to guide and develop their communities. Decisions affecting people's lives should be taken at the closest possible level to those people.
But we must remember all the time that it has long been the case in this country that authority for such powers of decision-making is given to the representatives of the community by Parliament, and Parliament always has had the right to define the limit of those powers. Thus it is that the relationship between the two levels of administration has always been tense. And so I edge slowly towards those difficult questions.
During my years as a councillor, I had the privilege and good fortune to work with many people who sought to serve their community. Whatever our political affiliation, we had a common interest that helped to bring us together even when the differences of political party seemed insuperable. However, even with that common interest, there was always a distinction within the political and administrative tussles which clearly defined the lines of debate and decision. That difference was over the subject of money. Is it correct strictly to manage resources so as to squeeze out the last drop of value from every pound spent that is taken from the pockets of the public, or is public expenditure inherently good, and therefore, by definition, more public expenditure inherently better?
And so I come to these difficult questions to which not just we as Members of this House should have clear answers, but which the public at large should seek to have clearly answered also. When I look at local government today, I see all my old colleagues, whose appetite to spend was greater than their capacity to manage, present in increasing numbers. Moreover, local government, which dispenses around 20 per cent. of national public expenditure, has lost none of its old appetites. Of course, it still retains its powers of resource allocation between the various services for which it has responsibility and so still has real power to influence the style and ambience of a community because central government funds are largely distributed through a general grant that does not seek to define the way that money is spent, whatever the method of calculation for the distribution of that grant between authorities might seem to imply. But, local government's power to raise its own funds independently is constrained by Parliament, as eventually it had to be because local government's appetite was too great for the national economy to bear.
In all of this we know the position of the Government and their determination to manage the nation's finances to the wider benefit of all the community, restraining inflation and creating scope for an enlarging economy through the increase of industry and commerce. We do

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not know the position of Her Majesty's loyal Opposition. Do they believe that 20 per cent. of public expenditure can be unfettered and run without government interest? I have read speeches about the possible removal of capping, which is always carefully qualified. If capping is to be removed, what constraint will be put in its place? Alternatively, might we have to consider the possibility of legislative recantation post facto? Will authorities be permitted to push local expenditure up to the point where economic migration takes place again within this country, as used to be the case?
We need answers to those questions because that will illumine the attitude of the Opposition to the national economy, Do they believe that the whole business of government should be tightly managed, or do they believe, as they appeared to do in the past—and as most of their members in local government still appear to do—that the business of government is service driven and that the costs of services must be met whatever the burden on the nation and whatever the burden such a course implies?
I understand all too well the great efforts that are made in another place to avoid anything that might look like a financial commitment and that could make it possible to begin to answer such questions. I understand why it is better to concentrate on window dressing, such as Clause 4 and the party constitution. But we need answers to those questions because, whatever the state of local government now, if we do not have such answers its fate in the future may be much worse.
5.4 p.m.
Lord Monkswell: My Lords, I should also like to join other noble Lords in thanking my noble friend Lord Williams of Elvel for introducing the debate. My noble friend was exactly right when he said that what we had to look at was the relationship between central and local government and between the structures that we have and the involvement of electors.
One of the concepts that I should like to think of as my little theme in today's debate is respect for people. I was interested in the remarks made by the noble Lord, Lord Dixon-Smith, who said that local government always asks for more money. Well, everyone asks for more money. It is the responsible consideration of borrowing money, raising taxes and spending that money that is important when one thinks in terms of respect for people. The noble Lord said that it was Parliament's responsibility to set the limits and rules. But what right have parliamentarians to make decisions about the spending of our money—indeed, taxpayers' money—compared with the right of elected representatives at the local level? What makes them different? What makes Members of another place different from local councillors in terms of their capacity to raise revenue and spend it?
I had not intended to spend much time—and, indeed, there is not much time available—talking about the finances of local government. However, I should like to mention two elements. I shall refer, first, to the capital element which was discussed during Question Time today. I should like to give your Lordships an example of the problems that we were faced with in Manchester City Council. Because of government restrictions on our
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ability to raise and spend capital, we had the problem of disintegrating schools—that is, schools with leaking roofs which needed major capital repairs and schools that had in fact gone well beyond the end of their designed life which needed to be bulldozed and replaced with new schools.
A few years ago, while I was serving on Manchester City Council, we asked the Government for permission to borrow money. That is what one has to do in local government—one has to go to the Government and ask for permission to borrow money upon which one then has to pay interest. It is not a question of asking the Government for money; it is a question of asking the Government for permission to borrow and spend money. We wanted to spend £30 million on capital repairs and on rebuilding projects for our schools. I should point out to your Lordships that we could probably have spent £100 million and made still further improvements. However, we asked permission to borrow £30 million and we were given permission to borrow £3 million. Such local government problems cause a deterioration in capital stock. That is not the right way to go about it.
I have a question for the noble Earl to which I hope he will respond. I have in mind the problems, especially this year, with school budgets. In fact, the impact will, effectively, hit them next year in terms of funding. Because of the individual characteristics of schools and the formula funding of LMS, some schools will have a deficit while others may have a surplus. Moreover, there is a requirement that they balance the books on an annual basis. As regards next year and, possibly, the year after, will the Government permit local education authorities to retain the surpluses from those schools which have them and use them to go towards meeting the deficits of the schools concerned? Will the Government also allow the budgets to be rolled over across two or three years to enable some of the problems to be tackled?
In the remaining two minutes at my disposal, I should like to talk about the structure of local government. I suggest that what we should be about is enabling people to come together to do things that people want to do collectively. Some may want to produce better or different services than others. I suggest that we think of it in terms of a range of tiers and in terms of a community or a parish coming together to do things at that level or a district or a town coming together to do things at that level, or in terms of a county or an urban conurbation coming together to do things at that level, that will benefit those communities.
Should we not think in terms of (dare I say it?) our national Parliament bringing people together and enabling the nation as a whole to do things together? Unfortunately, over the past few years, we have been singularly bad at doing things at a national level. One thinks of the national economy and the way we respect people or the way we utilise people. Some 25 per cent. of our population is not properly utilised, harnessed and economically active. That is a major scandal that affects our national community. I hope that we can have some

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respect for all of our fellow citizens and enable them to build the structures, to work, to come together, to be supportive and to govern themselves.
5.11 p.m.
Baroness Nicol: My Lords, I begin to wonder what place my particular contribution has in this afternoon's debate, having heard the rather heated speeches which have come from both sides. I do not propose to be heated because I am glad of this opportunity to speak about a subject in which I have a great interest. I am grateful to my noble friend for giving me the opportunity to do so.
I wish to concentrate on one local authority area of activity which seems to go unnoticed by most commentators, and has certainly gone unnoticed this afternoon. I do not think a single speaker has referred to it, and yet it is a subject which underpins all the activities of local authorities, and indeed all our activities too, and that is the creation and the implementation of Local Agenda 21. I am sure that there will be blank faces when I mention that because whenever I have mentioned to anyone in the past week that I wish to speak about Local Agenda 21, they have asked me what it is. Therefore, I had better explain.
During the Earth Summit conference on sustainable development in Rio in 1992, local authorities worldwide were challenged in the following terms, that,
"By 1996 most LAs in each country should have undertaken a consultative process with their populations, and achieved a consensus on a 'Local Agenda 21' for the community".
The purpose of the exercise is to support and take forward at local level the strategies needed to achieve the aims agreed at Rio. I remind your Lordships that those aims were fully supported by our Government, and therefore the work that is being done by local authorities should be, and I hope is, done in co-operation with national government and should be supported by them.
Despite the difficulties of which the noble Lord, Lord Williams, and others have spoken, local authorities have taken up the challenge in a commendable, all-party effort. I stress that it is an all-party effort. There has been no party division on this whatever. The local authority associations set up a Local Agenda 21 steering group which started work at the end of 1992. I believe that the noble Baroness, Lady Thomas of Walliswood, was the only speaker who agreed that green issues were a firm objective of local authorities. I am glad of that small bit of support on that matter; I have not heard any from anyone else! The efforts of the local authority associations have already been recognised by the United Nations commission on sustainable development—which has invited the chairman of Local Agenda 21 to address its next meeting—and indeed by His Royal Highness Prince Charles who has promised his support. They have produced guidance notes to assist local authorities to identify the need for integrating sustainable development criteria into all local authority policies and activities, and indeed to raise public awareness on the issue. Already there is an impressive list of subjects covered by these notes—I do not have time to read them out—and more are in preparation.
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The majority of local authorities in the United Kingdom are in the process of developing their plans and I wish to give the House some of the results up to last week. Thirty local authorities have appointed new staff to work on Local Agenda 21; 111 have organised seminars on Local Agenda 21; 187 authorities are seeking to adopt environmental management systems; 192 authorities have integrated sustainable development principles into their land use planning strategies, and 113 have done the same with their transport policies; 182 authorities have adapted or created new public consultation procedures to respond to Local Agenda 21. Some 198 authorities have embarked upon state of the environment reports and 134 are planning to develop local sustainability indicators. That is quite an impressive list in a relatively short time.
Local authorities are at the sharp end of so many policies. They provide the interface between the components which make up our communities. They are the front line in our efforts to remain a civilised society. Almost all their activities have implications for sustainable development aims. It should therefore be a high priority of national government to support and to encourage the work of this vital layer of democracy and not to engage in its destruction, which seems to be the current trend. If there had been more time I would very much have liked to engage in the defence of local authorities on other matters, but for now I shall leave in your Lordships' minds the question of how we can unite in pursuit of the aims of Local Agenda 21. I hope that politics can continue to be left out of it.
5.16 p.m.
Baroness Farrington of Ribbleton: My Lords, I, too, wish to thank my noble friend Lord Williams for the way in which he introduced and opened this debate. I thought that I agreed with the noble Baroness, Lady Young, when she began to talk about what people were interested in. It is my view that few people outside local government are interested in the structure of local government. Their real concern is the services. People are passionately concerned about the quality and availability of nursery education, care in the community, the state of the environment, transport and other matters. The list is endless.
I begin by declaring two interests. First, I am an elected member of Lancashire County Council. Secondly, I declare an interest as someone who is a resident of the country, who believes in being not a subject but a citizen and who believes in a multi-layer democracy. I believe that "subsidiarity" is occasionally being misused by Government speakers when they imply that subsidiarity involves something less than universal suffrage, at whichever level.
I am also saddened when speakers make certain remarks. I believe it was the noble Baroness, Lady Young, who referred to schools opting out of local authorities into grant-maintained status and receiving extra money. As someone who is elected in my local area, I want every child to have access to an equal resource, whether he is in a church voluntary aided school or in a local authority county school or in a grant-maintained school. The resource available for

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children's education should be equally important for each child and should be of equal value because children are of equal importance.
I also believe, as a citizen of a member country of the European Union, that I want to live in a country where the imaginative, innovative and dynamic process of strategic partnership between the public and the private sectors can take place with the democratic voice of my colleagues from Wales, from Scotland and from different regions of the country. I would say to the noble Lord, Lord Bellwin, that we do have regional government in England; it is regional government determined in Westminster by a combination of national government decisions made at the political level and by civil servants.
I am saddened by the way the debate on local government in this country has been harmed ever since the former Prime Minister, the noble Baroness, Lady Thatcher, decided that it was for her, not the local democratically elected councils and ultimately the local voters, to decide how much it was appropriate to spend on a small village school in Cumbria and on a school in Lambeth, on the basis of a formula worked out by computer in Whitehall.
I was also saddened when, at the end of her contribution, the noble Baroness, Lady Seccombe, said that what she wanted was good government from Westminster and good administration at local level. I do not want that. I want good government at local level; I want good, democratically accountable government at regional level; I want good government at Westminster; and I want good government from Brussels.
That is where the problem has arisen. We have heard a plethora of conflicting arguments about what is wrong within local government regarding local government finance. Local government recognises, and should recognise, that the amount of government grant redistributed, and the formula resulting from consultation whereby that grant is distributed, is quite properly a matter for national government. However, I find it shocking for national government then to say, as they do, that hundreds of school governors, hundreds of head teachers and hundreds of parent governors are being bamboozled into keeping balances in school budgets wilfully to increase class sizes. A snapshot taken on one day—1st April last year—before the Government failed fully to fund last year's teachers' pay award, has been used and has then been thrown in the teeth of head teachers, parents and governors.
We need more integrity. It is impossible to go into detail, but when we speak about debt financing—and mortgages come to mind—and selling assets, I can tell the House that the local authority of which I am a member will sell assets and buy new assets in the interests of local people. However, I hope that it would never sell when the market was depressed and treat a public asset as less important in terms of obtaining a good return than if it belonged to any one of us privately. I would never vote for that. Such judgments must be made at local level. That is the only place where the knowledge exists and where the decision can have the support of the local community.
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There is much that must be said in a further debate which must take place about the need to protect the powers as well as the duties of local government. It is reported that the Secretary of State for Education suggested reducing nursery education in order to fund the teachers' pay award.
We now find ourselves in a sad situation. I, as an elected representative, cannot support a system of compulsory competitive tendering which, in the absence of protection, means that people I represent now work at poverty levels, below acceptable wage levels, to provide public services.
I cannot accept that I live in a country where decisions will be taken centrally about what is best for people within the local community. As the noble Lord, Lord Dixon-Smith, said, we have seen that ultimately the Government in Westminster can change the law and make it legal for no other tier of government to be democratic. I ask whether it is wise for us in your Lordships' House to sit back and watch that happen, as, inexorably, it is happening.
5.24 p.m.
Lord Tope: My Lords, I must begin by apologising on behalf of my noble friend Lady Hamwee. Unfortunately, pressing business matters prevent her from making the speech that she would have wished to make from this Bench. It is my fortunate privilege to do so in her place.
Speaking at the end of a debate such as this it is tempting to try to deal with all the points that have been made, whether they are the problems which the noble Lord, Lord Boyd-Carpenter, is having with his council tax banding appeals, despite the number of Questions that he has asked in your Lordships' House on the subject, or the very welcome speech of the noble Baroness, Lady Nicol, about Local Agenda 21, which is a very high priority for my own authority. We have just run a very successful two-day conference on the subject, attracting delegates not only from all over this country but also from Europe. The conference concentrated on practicalities. I believe that it was very successful. Perhaps one day we could have a debate devoted to that subject and do it justice.
I want to start from the same point as the noble Lord, Lord Williams of Elvel—to whom, like other noble Lords, I am grateful for initiating the debate—namely, the state of local government. The noble Lord was right to say that morale in local government now is very low. It is low for a number of reasons. As others have said, local government is undergoing substantial change. Change is always unsettling and is always threatening to some. Local government has been subject to much denigration from central government and the media for many years. That inevitably has an effect on self-esteem. Above all, local government has suffered from year after year of expenditure cuts. Whatever fat there may have been in local government many years ago has now long since gone and those cuts are serious and damaging.
I want to bring a message from local government. It is not going to collapse tomorrow. Local government will continue. It will continue through the commitment

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and professionalism of the people involved with local government. The fact that local government will not collapse tomorrow does not mean, and should not be thought to mean, that everything is satisfactory and that everything that has been said was a lot of hot air. The situation becomes more serious every year. We should not assume that because people work increasingly hard, at increasing personal cost to their health, everything is therefore satisfactory. That is not the case.
Much of the debate has concerned finance and the system of finance. I have long believed that the UK Government should add their signature to the European Charter of Local Self Government. I regret very much that we are one of the few countries not to have done so. However, I am ashamed that our European partners now tell us that they believe that the UK is no longer eligible to sign the Charter of Local Self Government even if it wanted to. In the many years since the charter was drawn up the UK has been marching steadily in the opposite direction from virtually every other European country, regardless of the politics of their central governments.
One of the reasons we are not eligible to sign the Charter of Local Self Government is that local government in this country has virtually no control over its own finances. Our locally raised tax, the council tax, represents less than 20 per cent, of the net income of local authorities. Local authorities are dependent on central government for the rest. As others have said, and I endorse, that could be corrected significantly at a stroke by the denationalisation of the business rate. That is something which many businesses, certainly in my area, would very much welcome.
Still worse is the regime of spending limits imposed by central government on every local authority in the land. At a stroke that takes away one of the most fundamental democratic principles of local government: that locally elected people should have the right to determine priorities for the needs and services of their local areas, balanced by the level of local tax needed to pay for them; and, most importantly, that they should be properly and effectively accountable to local people for those decisions. None of that applies now.
Not only are centrally imposed spending limits wrong in principle, they are misguided in practice. They disguise the quite proper differences between local authorities and between political parties. They destroy what Conservatives in local government see as their strongest argument; namely, that they provide the cheapest local government. Spending limits imposed uniformly from central government destroy that argument.
The argument about different levels of council tax is entirely bogus. As my noble friend Lady Thomas of Walliswood said, the level of council tax owes virtually nothing to the spending priorities of a local authority or to its efficiency. In effect, to all intents and purposes it is set by central government. Quite simply, it is the money needed to bridge the gap between the money received from central government and the spending limits set by central government. The ability of local authorities to influence their council tax is at best marginal. It depends
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on what they can do by the use of balances, the efficiency with which they can collect their council tax, and so on.
I had thought that I would get through a local government debate without mentioning standard spending assessments. However, there have been so many references to SSAs that I wish to add a comment. SSAs were devised as a means of distributing central government grant. I agree with the noble Lord, Lord Bellwin, that as a means of distribution they are not a bad system and certainly better than many that we have had. The problem with SSAs is not the methodology of distribution but that the amount distributed is too great. Our dependence on them and the distortions which they create are too great. Above all, the spending limits are related to SSAs. SSAs are no longer just a means of distribution, but a means of determining a spending limit for local authorities. They are seen as a measure of a need to spend, in particular in the Department for Education and, increasingly, in the Department of Health.
SSAs bring uniformity to local government which Liberal Democrats strongly decry. That factor has been reinforced by the introduction of national performance indicators this year. For Liberal Democrat-controlled councils, spending priorities should be determined locally in consultation with local people. For Liberal Democrat-controlled councils locally determined performance indicators are vastly more important and more relevant than those imposed centrally.
These are not just words. For years, Liberal Democrat councils, including my own, have been consulting widely in their local areas on all those matters as an essential part of the decision-making process—not an add-on at the end as a sort of ratification of decisions which have already been taken.
Regional government has also been mentioned. That, too, is a subject on which we should have a separate debate, not least in order to help the Labour Party to clarify its own position for us all, including itself.
The noble Baroness, Lady Young, made a telling point when she spoke about regional government taking its power from local government. Those of us—I am one—who strongly advocate regional government envisage it taking its power not from local government but from central government. That is what regional government should be about.
I wonder what evidence there is to suggest that central government are in any way equipped to tell local government how to manage its own expenditure. Time does not permit me to dwell on that subject as much as I would wish, speaking as a local authority leader. However, it has just been admitted that the Chancellor of the Exchequer has overshot his borrowing by £1.26 billion on the PSBR figure announced last November. I cannot help reflecting that if a similar situation had arisen in my local authority I would almost certainly be surcharged, probably disqualified from office, and quite possibly imprisoned by now. The Chancellor of the Exchequer sits there and carries on in his usual "gung-ho" way quite regardless. He does not even apologise to the taxpayers.

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Far from central government imposing financial disciplines on local government, it is high time that central government learned some important lessons from local government. In particular in recent years, perhaps because of what central government have been doing, councillors have learnt much about financial disciplines and real value for money. Those are lessons which would benefit some Government Ministers.
I wish to conclude with some comments about education. The elections next week have been described, rightly in my view, as a referendum on the Government's education spending cuts. As other noble Lords have said, the people have now seen through the Government. The Government's own policies have backfired on them. Their policy, which Liberal Democrats strongly welcome, of involving more parents and more people from the community in the governance of schools has backfired on them. Those people now understand the situation. They know that their local authority is not to blame for spending cuts in education. They know that those cuts come from central government. That is why we have seen parents and governors marching on the streets to protest.
The Government have been rumbled. Next week the elections will be a referendum on the Government's policies towards local government and in particular their policies on education. As a result, perhaps thousands of Conservative councillors, good as well as bad, will feel the force of the public's anger with this Conservative Government and their treatment of local government, and our schools in particular—not before time.
5.34 p.m.
Baroness Hollis of Heigham: My Lords, we are all indebted to my noble friend Lord Williams for a timely and interesting debate. Let me declare my interest as a former leader of Norwich City Council, a former Norfolk county councillor, and a Vice-President of the ADC.
Norfolk is traditionally Tory, but at present I have not seen a single Tory local election poster. Norwich has two MPs, Tory alongside Labour, admittedly on expanded boundaries. After the local elections, apart from the Lord Mayor there will probably not be a single Tory on the city council.
Let me refer, if I may, to King's Lynn, on the other side of the county. The deputy leader, a Conservative councillor of 20 years, refuses to stand as a Conservative, but stands as an independent, as does a quarter of the entire Tory group, including the mayor of King's Lynn, several committee chairmen, and even the Tory agent at the last general election. Many Tories across the country have refused to stand. Only two-thirds of shire seats are being contested by Tories. Those who are standing are distancing themselves, denying and denouncing the Tory party. When asked why, the deputy leader of the council said, "I was so angry. There was some sleazy thing that day. I have forgotten what, because there are so many. I am still
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angry with the policies of the Government". He insists that he is a Conservative; it is the Government whom he cannot stand.
The Tory Lord Mayor said it all. "I no longer feel I can defend the Conservative label. What irks me most"—and this is the Tory Lord Mayor speaking—"is the disdain with which the Government have treated local government over the past decade".
My noble friends have described that disdain. As my noble friends Lord Sefton and Lady Farrington stated so eloquently, since the early 1980s the Tory Government have refused to believe that local government should be either local or government. They insist that we should all deliver the same level of services irrespective of need. They do not recognise that local government is, above all, about local difference. Nor do they recognise that it is about local government. Central government under this Government have simply refused to recognise the mandate that local authorities receive from their electorate. In my city council of 48 members, only one person holds the majority vote in Norwich City Hall and that is the Secretary of State. How has that happened? It is because central government have privatised local authority services while nationalising local authority finance. They have privatised local authority services, as my noble friends, Lady Fisher and Lady David, pointed out, on the one hand, by a combination of compulsory competitive tendering, irrespective often of value for money, and, on the other, as my noble friend Lord Stoddart of Swindon, said, by stripping out the functions and giving them to undemocratic and unaccountable quangos. Those quangos now have more members and spend more money than the whole of local government put together. We do not know half of their members; and the names of most of the remainder are not even in the telephone book.
Government, too, while privatising local authority functions have nationalised local authority finance. They nationalised the business rate. They have also nationalised through standard spending assessments, about which many noble Lords have spoken including my noble friend Lord Parry. We now have a spending formula which says that Hove is more deprived than Hartlepool, that the City of London is more deprived than Liverpool and—surprise, surprise—that the City of Westminster is the fourth most deprived borough in the country. So Westminster obtains extra money because it has more people coming in by day; and it receives additional extra money because it has fewer people coming in by night than by day.
If Norwich had the same level of grant on the standard spending formula as Westminster, not only would it not have to levy any council tax at all this year, but it would give every household in Norwich a rebate of £816.58p. King's Lynn would not have had to levy any council tax. It could have given its residents a rebate of £809—not forgetting the 44p! Put together, there has been a warped standard spending assessment, a settlement which my noble friend Lord Williams mentioned of 0.5 per cent., which is well below inflation.
Put that with the total capping, together with growing community needs, and we see the consequences all around us. They have been spelt out by my noble friend

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tonight. In housing, we see the budgets of both local authorities and housing associations so slashed that they cannot meet the responsibility for homelessness which has increased by 50 per cent, in the past 10 years. That is all right, the Government will solve the problem for us next autumn by removing the right of the homeless to housing, given that local authorities can no longer provide housing for the homeless.
The noble Lord, Lord Tope, is absolutely right: as regards education we have seen school governors and parents of middle England in revolt. They are setting illegal budgets. Fourteen thousand teachers are due to lose their jobs next year. I believe that in Warwickshire it is one teacher in every school. Somerset has already sent out redundancy notices to over 100 teachers. That is all right, let the class sizes float upwards, we all know that it makes no difference until we come to choose our own school where, if we can, we go for the school with the smallest classes.
So far, we know about 42 libraries which are due to close. The inner city single regeneration budget tries to bring inner cities back into the mainstream of our communities so that they are no longer alienated, disadvantaged and deprived. That budget is being cut by a total of £300 million. Eighty per cent, of local authorities are cutting social services. Homes are being closed, charges are being increased, daycentres are being closed and meals on wheels are being cut back.
In Shropshire, cuts of £1 million are being made in spending on the elderly; cuts of £½ million in spending on people with learning difficulties; cuts of £½million are being made on children, including abused children. Is that what we as a society really want? Are we so poor that we cannot finance services for those with learning difficulties and abused children? Are we so poor that as a country we cannot afford them?
In my city of Norwich, we have to make cuts of £5 million in a budget of £20 million, having lost 40 per cent, of our jobs in the past five years. We cannot close the swimming pool, we did that last year; we cannot shut the municipal greenhouses, we did that the year before last. Instead, we will close the main community centre used by 112 clubs for the elderly and unemployed. Let them play on the streets. As for sheltered housing, we shall halve the number of wardens who keep frail and elderly people afloat in the community. We shall abandon the football pitches, the bowling greens and the tennis courts in our parks which were laid out in the 1930s under a Tory Government more enlightened than this one. That government rebuilt all those through public works programmes.
Our historic buildings crumble; our grants to voluntary organisations dry up; our maintenance work is cut. Those skilled people who provided the services will now draw benefit. It is not because the people of Norwich want it. It is not because the city council wants to do it. It is not because the business community is pressing us to do it. It is because the Secretary of State, who knows little and cares less about the needs of the city, has decreed it. We call it "local government". It comes from the arrogance and, as the Tory mayor of Kings Lynn said, the disdain of a government who have been in power too long. They no longer even pay lip
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service to the values on which local government was built of pluralism, participation, local responsibility and democratic citizenship. We know that; we suspect that noble Lords on the opposite Benches know it. We are confident that the citizens of this country will show that they too know it when next week they go to the polls.
5.45 p.m.
The Earl of Lindsay: My Lords, I welcome the opportunity afforded to us by the noble Lord, Lord Williams, to remind the House that in Great Britain we have an active and vibrant local government sector. That is an essential element of the democratic fabric of this country, of which we can be proud.
My noble friend Lady Young described local government as being alive and well. She is quite right. So alive and well is it that public authorities in the new democracies of central and eastern Europe have been eager to establish links with authorities here to learn from their experience.
We cannot accept, as some noble Lords such as the noble Lord, Lord Williams, and the noble Baroness, Lady David, suggested, that local democracy is under threat from what they called "quangoland". Many non-departmental public bodies—or NDPBs, as they are called—are neither new nor recent creations. Many bodies such as the Arts Council and the Legal Aid Board have not taken functions from local authorities, nor have they ever been directly elected. Indeed, the number of NDPBs has actually fallen by about one third since 1979, as my noble friend Lord Bellwin clearly stated.
NDPBs with a local dimension, such as urban development corporations and housing action trusts, have representatives from the local community and local councils on their boards, to ensure that local interests are properly reflected in the decision making process. The most important factor in selecting board members is to ensure that the correct balance of skills, experience and expertise is maintained to enable the organisation to carry out its functions. It would be wrong not to make use of people with valuable expertise within the community just because they were not elected members of local authorities. The Government would welcome more suggestions from local government for public appointments.
I also point out that some NDPBs play a part in the process of national government and therefore are accountable through their responsible Minister to Parliament.
The noble Baroness, Lady Fisher of Rednal, was uneasy about the government offices for the regions and wanted an explanation. The GORs meet a widespread demand for a single point of contact with government in the regions. Each office is headed by a single regional director who is accountable to the appropriate Secretary of State for each programme and each statutory function that the office administers. The offices work in partnership with local people to maximise the competitiveness, prosperity and quality of life in each region. The government offices can look at problems in the round and regional directors can take a balanced and pragmatic view of the issues that come before them.

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Working in harness with the key local players, they can identify the fundamental issues and balance departmental policy concerns before they provide considered advice to Ministers. I should also point out that it is part of devolving power away from Whitehall and sending decision making closer to local communities.
Our aim is quite clear. We wish to see effective local government throughout Great Britain. That requires action by central government. It requires action by local government itself. It also requires an effective partnership between the two and the importance of the partnership is something about which the noble Lord, Lord Williams, spoke at length. I believe that an increasingly sensible and constructive partnership has been developed over recent years, most recently demonstrated by the guidelines for the conduct of central and local relations agreed between the Prime Minister and the chairmen of the local authority associations last November.
For our part, central government have put in place a framework within which local authorities can develop quality services at a price which their residents can afford and which ensures that authorities are accountable for their performance.
The noble Baroness, Lady Fisher, was worried about the eroded powers of local authorities. Sometimes local authorities are best placed to provide a service and sometimes they are not. Our policy is to put the organisation of services as close as possible to the people who use them. For example, our educational reforms have greatly increased control by parents of schools and school governors over what happens in the schools which their children use. Likewise, our housing reforms have given tenants greater opportunities to manage their own homes.
Taking a power and giving 90 per cent, of it to the local community and only 10 per cent, to central government is not centralisation. I appreciate the anxiety on which the noble Lords, Lord Williams, Lord Monkswell and Lord Stoddart, and my noble friend Lord Dixon-Smith focused: the correct structure between central government and local government.
Functions have been given to and removed from local government throughout this century. Hospitals, gas, electricity and water were all once the responsibilities of local government. But who would seriously argue that they should all now go back, except possibly for the noble Lord, Lord Sefton?
Most recently, local authorities have been given responsibility for community care worth £565 million per annum, and for the administration of housing benefit. Local authorities remain big business, accounting for one-quarter of total public spending.
One new area has recently emerged for local government. I agree with the noble Lord, Lord Tope, in recognising its importance. It was mentioned by the noble Baroness, Lady Nicol. Agenda 21 is a vital partnership to which local government is able to contribute, and to do so in a framework of partnership with central government. We very much welcome local government's involvement with the UK Round Table on Sustainable Development and the Going for Green
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initiative, and continuing work in the Central and Local Government Environment Forum, as well as local government's representation on the Environment Agency Advisory Committee.
A central element of the framework of local government is the local government map. The new structure reflects local circumstances and is one that will last. We should now focus on reaping the benefits that the new structure will provide. The noble Baroness, Lady David, and the noble Lord, Lord Parry, queried specific decisions that have emerged from the reorganisation. All I can do is stress that in every case we have carefully considered the Local Government Commission's report and the many representations which my right honourable friend and the commission received.
The underlying case for unitary authorities is that they offer an opportunity to bring all local government functions together in a way that is responsive to local needs. Unitary authorities can provide clear accountability by being the single provider of services.
I know that my noble friend Lord Boyd-Carpenter has misgivings about the two-tier system. But the retention of the existing two-tier system will in some parts of England provide the best solution. In other areas the creation of unitary urban districts, with the rest of the county remaining two-tier, will be the best way of securing effective local government. My right honourable friend is currently considering which urban areas should be referred to the commission for further review. Above all, we have adopted a flexible approach.
This flexibility will strengthen local government. Where new unitary authorities are created, there will be the opportunity to review completely and improve old working methods. We hope that the new unitary authorities will now be better placed to provide cost-effective services.
But there is also scope for improvements in two-tier areas in England. Many told us during the commission's reviews that they were looking at ways to provide services more effectively within the two-tier system. The reviews have been useful in getting counties and districts to work together to reassess their working methods and to look for improvements. We shall be contacting those authorities and others to see what progress is being made.
The framework that government has provided consists of more than just the map. We have established mechanisms to improve local authorities' efficiency and local accountability. This will strengthen the quality of the services that they provide.
I noticed in today's debate that the approach adopted towards local government by many of the speakers paralleled the approach that they adopted towards compulsory competitive tendering. There were the cynics, the enthusiasts and the realists. Competition exposes the true costs of carrying out a service and leads to greater efficiency in the use of resources. My noble friend Lord Bellwin called it common sense, and he and my noble friend Baroness Seccombe stressed its creditable qualities. Indeed, independent research carried out by the University of Birmingham shows that CCT has not only led to average savings of 7 per cent.

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a year, but has also, and perhaps more significantly, led to better management of services, which in turn has led to more responsive and better quality services. I wonder why the Labour Party opposes CCT?
The process of competitive tendering has spurred local authorities into reviewing services and considering what is wanted in a systematic way. The new contracts set explicit standards and performance is monitored much more effectively. Productivity has been improved and inefficient work practices have been tackled. We also believe that the benefits already achieved through the tendering of blue collar services should be extended to local authority corporate and support services. The new white collar services subject to competitive tendering amount to over £6 billion of public money, and the opportunity for efficiency gains and improvements are there.
The noble Baroness, Lady David, posed a few other questions about CCT, as did other noble Lords. CCT applies only if authorities wish to carry out work in-house. If authorities contract services out, as Cambridgeshire has done, the formal processes of CCT do not have to be complied with. For professional services, only a proportion of each service will have to be subject to CCT. This will protect the client side and other services which have to be kept in-house. The Government have made it clear that when authorities contract services out, by whatever means, this will count towards the CCT percentage—
Baroness Thomas of Walliswood: My Lords, before the Minister—
The Earl of Lindsay: My Lords, I am sorry, because of the time limits I must continue. I should also like to point out to the noble Lord, Lord Stoddart, that local authorities can vet the financial standing of potential contractors. Authorities are not obliged to accept the lowest tender. The Government's guidance makes it clear that the lowest tender can be rejected provided that authorities have specific well-founded reasons.
The private finance initiative is a further mechanism for improving local services. It is taking an expanding role in improving our country's infrastructure and public services. Contracts across the whole of the public sector for PFI projects worth £5 billion should be signed in 1995. We are actively encouraging local authorities to adopt the principles of the initiative to build on the impressive range of partnership arrangements already established by many local authorities with the private sector. New rules to encourage partnerships between local authorities and the private sector came into effect on 1st April. They streamline the controls on the transfer of assets to local authority companies, and on authorities' participation in private sector led companies; and they provide incentives for authorities to consider the disposal of specific categories of assets and the leasing of non-housing property. These changes significantly increase the local authorities' scope to harness the private sector's investment potential and management skills in delivering capital projects.
We see these changes as a start, not a finish. We aim to extend further the role of the private finance initiative in the local government sector, and we have asked the
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local authority associations for proposals for further measures to assist partnership initiatives with the private sector at the local level. Proposals have also been invited from private sector organisations and other interested bodies.
The dire predictions and dire statistics given by the noble Lord, Lord Dean, in relation to housing are misleading. The Government expect comfortably to exceed their commitment to 153,000 housing association homes in the first three years of this Parliament. We now estimate that around 60,000 lettings are being provided this year, bringing the total to over 180,000. So—
Lord Dean of Beswick: Will the Minister repeat that figure?
The Earl of Lindsay: My Lords, Hansard will record it and I shall write to the noble Lord in addition.
Lord Dean of Beswick: The figure might be wrong; I might wish to challenge it.
The Earl of Lindsay: My Lords, the noble Baroness, Lady Hollis, took a somewhat "doomsday" look at the provisions for the homeless. We are not preventing local authorities from using their housing to meet the immediate needs of homeless families and vulnerable people. Authorities will be free to use their own housing stock on a non-secure basis, or that offered by other social landlords or good quality private rented accommodation, for the homeless.
To complement the PFI, we have launched the deregulating local government initiative. The Department of the Environment has discussed with representatives of local government the opportunities to remove unnecessary and irksome bureaucratic controls on local authorities to improve the delivery of services and to help local authorities to fulfil their full potential.
On 6th March we published a consultation paper entitled Deregulating Local Government—The First Steps. This reviews the progress across government which has been made to date, makes a number of new proposals for removing or amending certain specific controls, and invites further proposals.
The consultation paper is just a start. We have high aspirations for the future and hope that the paper will encourage local government to come up with more innovative and far-reaching proposals for taking forward the deregulation initiative.
To ensure public accountability, by 31st December last year for the first time local authorities were required to publish performance indicators in local newspapers. In addition, on 30th March, the Audit Commission published the first ever national publication of Local Authority Performance Indicators. This publication is an important step forward in our charter initiatives and one which I am pleased to say has been recognised as such by the local authority associations and their members.
The publication confirms that many local authorities are performing very well across the wide range of services that they provide. But there is no doubt that there is room for improvement. The performance of some authorities falls well short of the standards that

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have been seen in other councils. It is important that the performance of public services are opened up to scrutiny. I am sure that the availability of that type of information will encourage councils to look hard at ways of providing better services for their citizens.
Finally, our framework for effective local government necessarily involves arrangements for the provision of resources to local authorities in order for them to deliver services. I would wish to face head on any criticism of the control mechanisms for local authority spending. As my noble friend Baroness Young said, any government must face up to the fact that local government in Great Britain is big business, accounting for one quarter of total public expenditure. Therefore, local authorities cannot be free from the disciplines on the use of resources which apply throughout the public sector.
The noble Lord, Lord Williams, and other noble Lords, including the noble Lord, Lord Desai, felt very uneasy about capping. But capping remains necessary to ensure that all authorities play their part in the restraint of public expenditure and also to protect council tax payers from the high council taxes which are the result of excessive local authority budgets.
This year's local government finance settlement is demanding, but it is necessary as part of this Government's overall strategy of controlling public spending. We have been accused of unfairly victimising local authorities. In fact, provision for spending by local authorities is set to increase by 2.2 per cent, overall this year.
Local authorities, like other parts of the public sector, are faced with hard decisions about priorities. But in setting these, they are able to explore ways of making their existing resources go further. The Audit Commission has recently suggested that authorities could save over 5 per cent.—£500 million—on their paybill by better pay and performance management, and its recently published performance indicators show that the worst performing authorities have considerable scope for improvement before they achieve the level of the best. The challenges facing local authorities may not be easy but they are certainly not insurmountable.
There has been some suggestion that local authorities' actions have been severely restrained by central government. However, only a very small proportion of the resources made available to local authorities must be spent on specific services. Having due regard to their statutory duties, local authorities are able to decide how to spend something like 90 per cent. of their income. It is more than merely a prioritising role, as the noble Baroness, Lady David, commented.
My noble friend Lord Boyd-Carpenter raised points about council tax banding. I know that this matter is also to be discussed tomorrow. However, I stress that of the 21 million dwellings which had to be taxed, 96 per cent. of the tax banding decisions were accepted. Only 4 per cent. were not accepted. There has been some increase in the speed with which the balance of cases of disputed bandings has been tackled. Very few appeals still remain to be heard. But, overall, after a difficult start there has
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been a considerable improvement on that front. Banding has been widely accepted by many people as an acceptable way to raise local government taxes.
With regard to council tax in two tier areas, each tier sets it own council tax, which is then included in the one bill. It is important that in the information accompanying the bill each tier explains in clear and simple terms the decisions that it has made on the level of the council tax.
The noble Lord, Lord Boyd-Carpenter, was worried about the debt of local authorities. The Government is also very worried about such debt. I hope that the incentives and restrictions that central Government have put in place will ease that problem.
I shall have to leave one or two points for either correspondence or another time. I shall try to send to the noble Lord, Lord Sefton, the definition of the SSA and how it is arrived at. Other learned commentators on the SSA, such as the noble Lord, Lord Tope, and my noble friend Lord Bellwin, have already given him some comfort in that direction. I can tell the noble Lord, Lord Parry, that the 20 specific questions on Wales will be answered by correspondence.
I have described the framework which central government have provided. There have been recent changes, such as reforming the map of local government; but the way forward is largely settled. It is now for local government to act. It must act on the promises made in relation to the benefits of unitary authorities and improved two-tier working. The Audit Commission reports on pay show them and us what further efficiency savings can be made. The national performance indicators show them areas where improvement is possible. The ball is now in their court. The opportunity exists for a renaissance of local government, with modem forward-looking leadership, providing better services, and giving people more responsibility over their own lives. I believe we can be confident that local government will rise to the challenge.
I repeat what my noble friend Lady Young said when she began her speech; namely, that local government in Great Britain is alive and well.
6.4 p.m.
Lord Williams of Elvel: My Lords, I am most grateful to the noble Earl for his response. I understand that this is the first time that he has responded to a major debate of this nature. The whole House will congratulate him on what has been an extremely difficult task. I did not agree with anything that he said, but that is another matter.
I should like to thank those noble Lords who have taken part in this debate. I agree very much with the noble Lord, Lord Boyd-Carpenter, when he said that seven minutes was not adequate time for a speech. I hope that we shall have other opportunities. Indeed, as I understand it, there is to be an ad hoc Select Committee of this House on the relationship between local government and central government. We shall all

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have our input to make on that. I am most grateful to noble Lords. In the meantime, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

Football Industry: Regulation
6.6 p.m.
Lord Donoughue Lord Donoughue rose to call attention to the problems of the football industry and the need for more effective regulation; and to move for Papers.
The noble Lord said: My Lords, I trust that your Lordships will agree that the subject of this debate is of concern to the House, to the Government and to the country at large. Association Football is our premier national team game, attracting the greatest support among the British people, and attendances have been rising in the past decade.
The Government are deeply involved, with considerable public finance concerned. Tax concessions to the Pools since 1990 have injected £121 million into the game via the Football Trust. Government money is going to help stage the 1996 European Championships. Local authorities provide the amateur game with most of its pitches; the Sports Council also assists to some extent the amateur side of the game. So football is not just a great national game; it is now a great industry. But several aspects of its conduct raise concern.
I should point out that not all of those concerns are new. I myself was a member of the Chester inquiry into the state of football which reported in 1968. The House may note that the cost of that 11-man three-year inquiry was £2,805.13s.1d. I think it was value for money, especially compared with some expenditures on various quangos in recent years. I have re-read that report and it stands up well. I recommend other noble Lords to read it. Much of it is still relevant. It reported a game that was flourishing with rising attendances but found that there was a:
"disturbing increase of cases of misconduct by players".
It concluded that:
"misconduct in football will not greatly improve until there is an improvement in the manners and attitudes of society as a whole".
Little has changed in that respect.
But elsewhere it is a different world. That committee was impressed by the unity of the game and the fair spread of resources from top to bottom. The average wage of players in the top division was £2,600 per annum—less than double that of the lowly Fourth Division players. The average First Division transfer fee was £29,000. Even allowing for inflation, that would not buy many Premier League strikers now.
The motivation behind our debate is the widespread belief that football is in some kind of crisis which its own authorities are not able to resolve. We have the opportunity to examine that issue. I shall raise some general points and my noble friend Lord Peston will deal with some regulatory details as well as other points that may come up.
I do not propose to deal with the quality of the game on the field, although our national team seems to perform relatively worse than at times in the past. But our game remains excitingly physical and competitive, and club fans are usually satisfied with their weekly matches. However, it is clearly deficient in basic skills, which is often why we fail internationally. In particular, we appear to be inferior in our "first touch" control of the ball. That may be beyond the influence of this House, despite the skills of first touch control which noble Lords periodically display in other areas.
Our main concerns lie with the conduct of the game, not with the play. Two aspects which must concern us today are the increasing allegations of financial irregularities and the violence and social misbehaviour close to football on and off the field. Reports of the bribing of players and "bungs" to managers fill the media, though the evidence is sometimes hard to establish. Massive tax evasion has been alleged. It is claimed that 15 clubs have already paid £16 million in tax penalties.
Much of the alleged irregularity appears to be related to the transfer system, where larger sums are said to have been paid than received by the clubs, sometimes involving hundreds of thousands of pounds, with the difference disappearing into the pockets of various intermediaries. The problem is that the football authorities seem a little dilatory in pursuing those allegations, which may in some cases involve them personally. I ask the Minister whether the Government are satisfied that those scandals are being investigated with proper diligence by the football authorities and whether the relevant public authorities—the Inland Revenue, Customs and Excise and the DTI—have been instructed to investigate.
Central to that is the new role of players' agents. They manipulate the serpentine transfer system that exists. They appear sometimes to be close to the dubious transactions. In my view, agents should be registered and closely regulated, and I believe the league is considering that. That is a matter mainly for the football authorities. Surely we need to ensure that there is a clean-up in our game, not a cover-up, before hosting the European championships next year. I ask whether we may in fact need another Chester-style inquiry into the game. That is not established convincingly, but I find attractive the idea of an independent monitoring unit to monitor breaches of integrity in the game.
On the social side, the most obvious area of concern is the violence and hooliganism manifested on and off the field. Such behaviour conducted abroad is a matter of national shame and we have seen tragedies in various stadia abroad, most recently Bruges, and the disgraceful behaviour at Landsdown Road, Dublin. At home there has been some improvement at club matches in recent years; arrests are down by 30 per cent. But it is still a weekly issue of law and order. Some games operate in an environment like Belfast during a civil war. There are mounted police, surveillance cameras, anti-riot squads and intelligence officers infiltrating gangs of supporters who themselves are "apartheided" into separate tribal camps.
We must ask why this violence appears to be unique to soccer. Rugby is a more physical sport, with more pain inflicted, yet the behaviour of the crowd is quite different. What is the cause of soccer's affliction of violence? It is certainly not helped by the violence on the field, but that is not a sufficient explanation. Nor is the social class of the supporter. A recent survey showed that on average a Premier League fan earns £20,000 a year and pays £24 a game to watch his team.
One certain problem is a fanatical political minority. What can the clubs do? Their approach has certainly improved, but they can probably do more. It is encouraging that some are introducing hotlines so that decent fans can report troublemakers, including their seat numbers. Clubs should then confiscate their season tickets and ban them. It should always be the case that clubs work closely with the supporters' clubs, which often do an excellent job, sometimes with too little club support.
The problem is that the worst hooligans, especially abroad in relation to England, are not members of the supporters' club. They are often political extremists, British Nazis; groups with the money and motivation to disrupt any match they choose. Of course, matches on the Continent are easier because those grounds do not have the kind of fortress defences which have sadly become common in England. They do not have them because they do not have our appalling hooligans.
The inquiry into the Dublin riot conducted by Mr. Thomas Finlay, former Chief Justice of Ireland, was most revealing. It concluded that some 50 to 80 English louts started it and more than 200 took part. It described the riot as "well-managed and organised" including the use of mobile telephones and hand signals to orchestrate violence. Large amounts of Nazi racist pamphlets were found at the scene and some groups wore Nazi insignia of the notorious Combat 18 group, the British National Party. The report concluded that the violence at Landsdown Road was "targeted, planned and intended"; it was not due to overcrowding or provocation on or off the pitch.
The actions of those fanatical louts bring shame to Britain and fear to thousands of peaceful football fans. I ask the Minister what further plans the Government have to curb them. There is already provision to require known troublemakers to report to police stations during games. That is said not to be rigorously applied. Can we have more rigorous application by the authorities? I am sure the Minister will not repeat criticism of the Irish or other police forces. The problem is ours. We must ensure that these louts do not go abroad and are locked up where they belong. If that requires more football regulation and legislation, we will give our support.
Returning to the game of football itself, I am worried by the progressive division of our game into the very rich and the very poor. Nearly three-quarters of all football revenues now go to the Premier League, and the league is dominated by a few elite teams. Self-perpetuating, they attract the top talent because only they can afford the transfer costs and the top wages, so they remain at the top and receive the bulk of the television coverage.
Television is accelerating that elitism. The latest reported Sky satellite deal for soccer offers £600 million for five years; that is £6 million per season to each top club but nothing to the rest of the game. We note that attendance for the Endsleigh Insurance League is down 7 per cent, since saturation television coverage of the Premier League began. This minority club coverage is for the minority who can afford satellite television. The BBC and ITV cannot hope to compete to provide national coverage at that cost. Here I should stress how crucial it is that major sporting events—not only soccer—remain available to all on national terrestrial television.
What a change there has been since the Chester Report, when every club received an average £11,000 per season from the whole of television and the pools. Now relegation from the Premier League can deprive a club of up to £6 million. Television is now shaping and determining the conduct of the game, the days on which matches are played and times of kick-off. The same problem arises in the Football League, which was debated today in another place. Television is a ruthless paymaster and is creating a game of financially dominated showbiz top-end clubs, with poverty below. I should point out that the lottery may accelerate that. For local clubs, their local lotteries and scratch cards are often their main financial line of support and the National Lottery is cutting some of that off. There is a squeeze on the football pools which through the Football Trust have provided so much for ground improvements. Those funds are under threat too.
In the Chester Report we proudly surveyed a unified game, a fabric stretching from village and schools teams up to the First Division. Our prime aim was to sustain that healthy national game with deep and thriving local roots. The fear is that these days that unity, with its fair spread of resources, has been disrupted. It is perhaps inevitable that money values have come to dominate the game; but must we really hand over our great national games to foreigners such as Rupert Murdoch? I really question whether that is good for the games.
Some of the problems I have raised could of course be approached by government, and I shall look forward to what the Minister has to say on that. Many are endemic in our modern society. Most lie at the door of the football authorities themselves, and surely we should look for improvements there. The Football Association, the senior authority in the game, was criticised by Chester 30 years ago as outdated. I must say that it still looks anachronistic and increasingly bewildered by the problems which face it. The FA Council seems archaic and its decision-making is cumbersome. It is constantly outmanoeuvred by the commercialism of the Football League. It often appears inert amid the growing sleaze around it.
We should never forget that professional football is only 1 per cent, of the whole of football. All the other participation is amateur. The Football Association is responsible for that.
Having made these criticisms, however, I must emphasise that I totally support the existence of the Football Association as the single senior body responsible for the whole game, amateur as well as professional. We

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cannot leave the conduct of football to a small group of league chairmen who are mainly motivated by money. I do want the FA to be more efficient and more effective. Equally, we want the management of league clubs to become more professional. The turnover for this season so far has meant that 47 managers have been sacked by 39 clubs. It seems to me that lack of continuity is really very destructive. It is important that football, as an industry, as we now describe it, should become managed with the full modern professionalism of industry.
In conclusion, I must emphasise that not all is gloom in British football. The commitment of our players, the excitement of the game and the welcoming of the family are all to be applauded. However, there are issues of major concern involved and I have raised some of them. I have deliberately not mentioned the delicate issue of inconsistent refereeing, since my noble friend Lord Howell, a former practitioner, is sitting, whistle in hand, behind me. My noble friend Lord Peston will have more to say in detail on the whole matter. I look forward to the contributions of other noble Lords, and especially to any answers and encouragement which the Minister may offer. My Lords, I beg to move for Papers.
6.23 p.m.
Lord Aberdare: My Lords, I should like to thank the noble Lord, Lord Donoughue, for giving us the opportunity to debate football and some of its problems, and also for starting us off with a very interesting speech. I should also like to welcome back the noble Lord, Lord Howell, who I know has been seriously ill. We are delighted to see him back in our midst.
Noble Lords: Hear, hear!
Lord Aberdare: My Lords, I was a little sad when I first read the terms of this Motion to see that football was termed an industry rather than a sport. I suppose it is inevitable, with the vast amounts of money that are now involved, that it should be considered an industry. However, I hope very much that we shall continue to look on it as much as we can as a sport and to maintain the sporting traditions associated with it.
No one can possibly deny that there are problems and the noble Lord, Lord Donoughue, has mentioned quite a few of them: problems such as hooliganism, player misbehaviour, and financial impropriety. Those problems receive the full attention of the media, as bad news always does, and they overshadow many of the good things that have occurred in recent years. In the few minutes that I have at my disposal I should like to concentrate on the good things, which tend to receive so much less attention than the bad things.
In the first place, tremendous advances have been made as a result of the recommendations of the Taylor Report, especially in the provision of new, all-seated stadia throughout the country. As on previous occasions, I should like to declare my interest as chairman of the Football Trust. I must say that I am extremely proud of the contribution that the Football Trust has made in helping clubs to fulfil the requirements of the Taylor Report. We in our turn owe a debt of gratitude to the pools companies, who supply us with our ways and means, and in particular
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Littlewoods, who were our original sponsors and who have continued to put large sums of money at our disposal towards the safety of our football grounds. I would even like to express thanks to Her Majesty's Government who over the years have made a very significant reduction in pool betting duty, from 42½ per cent. in 1990 to 32½ per cent. as a result of the recent change made in this year's Finance Bill.
Since 1990 the trust has allocated over £132 million to new projects which themselves cost a total of over £420 million. In other words, we have contributed not far short of one-third of the total money required. The programme for the Premier League, the First Division of the Endsleigh League and the Scottish First Division is now almost complete and we are tackling the considerable problems that remain concerning the lower divisions of the league and the Vauxhall Conference.
The face of British football, in terms of ground facilities, has been transformed in the last five years and great credit for this achievement must go to the clubs themselves who have contributed towards it. They have shown great determination and commitment in seeing the job through. The host venues for Euro '96 are magnificent examples of what has been achieved. Following his inspection tour, the UEFA Stadia Committee Chairman, Ernie Walker, said that:
"the clubs, with major help from the Football Trust, had transformed their grounds and that there will be eight splendid venues for what will be the biggest and potentially the best ever European Championship Finals".
In the Football League alone, no fewer than seven brand-new stadia are now in place and a further seven are in the pipeline.
It is not always realised how much is being done by league clubs in their own local communities. Every two years or so the Football Trust has run a competition known as the Littlewoods Community Award Scheme, in which financial awards are made to the winners in the different divisions for what they have done in their local communities. This year, of the 92 league clubs 80 have competed and their submissions cover an enormous range of services for the old and the young, the disabled, the unemployed and ethnic minorities. They also include many imaginative ideas for making use of club facilities for community purposes. I believe that these initiatives are of great significance and an example of the acceptable face of football.
As the noble Lord said in his speech, the problem of hooliganism has been very largely eliminated within grounds, largely thanks to the installation of closed circuit television, for which the Football Trust was largely responsible. But, as he said, unfortunately it remains present in the context of international matches, but even then, most commonly outside the stadium and caused by a hardcore of thugs quite distinct from the fans who regularly attend their own club's games. I fully agree with what the noble Lord has said.
The Premier League has recently published an interesting survey of the views of genuine fans. It was carried out as a result of research done at the Sir Norman Chester Centre. The noble Lord mentioned that Sir Norman Chester was on an earlier inquiry. He was a remarkable man. With the setting up of the centre we

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thought it only appropriate that it should bear his name. It is at Leicester University and it is partly financed by the Football Trust.
The recent report contains further evidence of the progress made in implementing the Taylor Report. More than nine out of 10 fans believed that facilities at their club ground had improved; 84.6 per cent. were of the view that their club was now more attractive to families and 83 per cent. stated that they arc now more likely to take their school-aged children to watch a match than they were a few years ago. This shows a welcome improvement in behaviour at grounds and it is significant that more families are now coming to enjoy the game.
I have tried to give some account of why it is not all bad news in football. But there is one matter of which we must never lose sight, which was also mentioned by the noble Lord. I refer to the fact that the problems which arise are all confined to the professional game. We should never forget that there are innumerable amateur clubs, youth clubs, school teams and women's teams all over the country, some in leagues, some not, but all contributing to the sporting traditions of football. We have done our best in the Football Trust to try to help the game at grassroots level by developing pitches and facilities and by providing strip and equipment for schoolboy and schoolgirl teams. We hope to continue as much of this worthwhile work as we can in the light of the impact of the national lottery which has somewhat affected our income. We hope in the future to play our full part in ensuring that our national game fills its rightful place in the country's sporting future.
6.32 p.m.
Lord St John of Bletso: My Lords, as an avid sportsman, but not an enthusiastic football supporter, when I first saw the Motion for debate in the name of the noble Lord, Lord Donoughue, calling attention to the problems in the football industry—or should I call it a sport?—I immediately thought that the debate would focus in the main on crowd violence and unruly spectators, much of which has already been dealt with in the Football Spectators Act.
On closer reflection, however, I soon realised that I was off track and that the debate would focus more on the commercialisation of the industry—on transfer fees, match fixing, pay-offs and even bribery. Hooliganism has plagued English football since the 1890s, but it is really the subtler problem these days which appears to be practised with pounds, deutschmarks and dollars.
It was Hunter-Davies writing in the Guardian on Tuesday, 4th April under the heading, "A New Set of Goals" who in my opinion admirably summed up the position when he wrote:
"Once upon a time football was about glory and loyalty and local identity. Not any more".
In an age when money dominates our national game, he, a life-long soccer fan, accused Manchester United and other top clubs of ignoring the community and abandoning sport for the relentless pursuit of profit.
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While I have a certain amount of sympathy for the need to remunerate sportsmen and sportswomen who entirely dedicate many of their prime years to achieving sporting excellence—in many cases having to support their families on their meagre earnings—I nevertheless feel that sport has become far too commercialised.
In my research into the commercialisation of the football industry, I was surprised to find that until the 1970s almost none of the major football clubs accepted advertisements on their grounds. Their club's name was sacred and their team shirts were sacrosanct. A team's shirt meant that the shirt could be worn only by the team. For example, only a Manchester United player could wear a Manchester United shirt. Sadly for many, those days are gone forever.
Last season Manchester United's turnover was in excess of £44 million with a profit in excess of £11 million. The club has now reached the stage where it earns most of its money from merchandising, television, catering and sponsorship revenues. Clearly, in the past 20 years money has taken over completely in the football industry, dominating all decisions and in many cases perverting traditional values.
I should like today to focus on one key issue in the football industry; namely, that of transfer fees. Over the past five years there has been a progressive, if subtle, change towards self-determination by players: that is to say, where 20 years ago players were largely lowly paid and "life members" of clubs, such as the great characters Billy Wright of Wolverhampton and Bobby Moore of West Ham, the scope for players being paid substantially more, and moving clubs, has arisen as a result of the increase in the commercialisation of the football industry.
As I understand the situation, most of the top players arc now signed up for a specified contractual period, normally three to five years, at the end of which, should the player not be able to reach contract renewal terms with his club, he is free to be transferred on the open market at a price which is decided by an independent tribunal appointed for this specific purpose.
Whereas players used to rely on their managers for advice, an unregulated agency system, similar to a head-hunting system, seems to have emerged where these agencies strive to obtain the best terms for the star players. The first noticeable case where a player without a contract was able to obtain far better terms by moving from his club rather than leaving his fate to his manager, was that of Gordon Strachan, a famous Scottish international footballer whose transfer from Glasgow Rangers to Leeds United resulted in the player getting almost 50 per cent. of the transfer fee.
Increasingly, the star players like Cantona and Klinsman, are moving from club to club on a season-by-season basis, obtaining their wages from the highest bidder. The detrimental effect, of course, is that the amount that these players are paid has not just severely depleted the coffers of many clubs, but has also resulted in an enormous disparity in salaries between the so-called "stars" and ordinary club players. At one south London Premiership club, for example, two of the first team players who have been promoted from the junior

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learn earn £400 per week, playing alongside the star players who have been transferred to the club and are earning upwards of £6,000 per week.
Of course, as the hold by the major clubs over the transfer of players has eroded, so too the players' loyalty to their clubs has in many cases fallen. The players who get hurt most appear to be the players who are most loyal to their clubs, as their reluctance to move clubs results in many cases in their having to forfeit far higher salaries. The Football Association has become much more like the American system, where players are like highly paid guns for hire. Many of the major clubs that have invested millions of pounds in building their teams—such as Blackburn, Manchester United and Spurs—fear that the introduction of legislation regulating the transfer system would substantially reduce the value of their top players.
The other major problem resulting from the high wages that are paid to the top players is that many of the 92 clubs in the professional league will, and have already, fallen into financial difficulties. The obvious result of the disappearance of many of the smaller clubs is that many of the up-and-coming young talented players may not have the opportunity to exhibit and enhance their talents in public. The English team would certainly be without Ian Wright if this system had prevailed in the past decade as his talents did not emerge until he was 26 years-old. There are many other late developers and players who have been developed and recognised through the lower leagues.
I feel that a committee or commission should be established, incorporating representatives from all of the clubs, including player representatives, to consider not only the commercial but also the legal implications of the current transition to self-determination, so that both players and their clubs can have a more secure future.
As your Lordships may be aware, the honourable Member for Vauxhall in another place recently called for a government inquiry into England's football industry. Fans, she argued, have to pay more because of, and I quote,
"dirty deals which cause money that should be in the game to be siphoned off in back-handers, bungs and fixes".—[0flieial Report, Commons, 30/1/95; col. 828.]
In conclusion, I firmly believe that football should not be run like a supermarket. Football is a team sport and not just about profit and loss. It is about sporting talents; the excitement of winning; about loyalty and legends; about local identity; about families and about history, none of which can be computed on balance sheets.
6.43 p.m.
Lord Dean of Beswick: My Lords, I too am grateful to my colleague and noble friend Lord Donoughue for initiating this debate. He covered a wide spectrum of the problems and achievements of football, so there is no point in repeating them. I should also like to pay tribute to the detailed speech of the noble Lord, Lord Aberdare, who is chairman of the Football Trust, which has done a tremendous job in allocating funds and in ensuring that ground improvements have taken place.
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However, I find some football clubs lacking in terms of their public relations. One Monday it was announced that one of the richest clubs in the game, which was about to undertake a massive extension programme, had received about £2.5 million from the trust in grant. I am not arguing about that, but four days after the first announcement the chairman of that club announced that it was making £6 million available for the manager to buy new players. It does not look very good to the public if a club takes £2.5 million from the trust but says within four days that it will spend £6 million on players.
As Members of your Lordships' House probably know, I have been involved in deliberations on the last two Bills on football which have been considered by this House. I refer to the Football Spectators Bill and to the Bill on alcohol control. There is no question but that the crowd situation has improved tremendously. However, I am not sure that the Taylor Report was entirely right in specifying that all spectators should sit down. I still think that there was a case for leaving some areas where people could watch football in the traditional manner—standing on the steps. I am not suggesting that that should apply to large areas of grounds. However, it has become clear that some of the worst excesses at foreign cup ties have occurred in seated stands.
Turning to a point raised by my noble friend Lord Donoughue: what has really happened since the inception of the Premier League? I was present at a meeting of the all-party parliamentary group when the idea of such a league was first mooted. I do not know of one speaker at that meeting of any political persuasion, from your Lordships' House or from the other place, who spoke in favour of a Premier League. The people who were present included those who had been spectators all their lives, and some who had played the game or who had helped to run top clubs. All were of the same opinion, that such a league would damage the game because the seedcorn would not come through.
My noble friend Lord Donoughue made the legitimate point that we now appear to have two Premier Leagues. There are the top 10 clubs of the Premier League, and below them the others who will never quite make it to the top. Transfer fees are escalating so rapidly and their value is so totally false that a market is being created in which only eight to 10 clubs will be able to operate. That is not good for football.
I then have to ask myself whether the game on the pitch has improved. I have heard it argued today that the game has improved. I do not agree. I do not think that the skills are any better today. The game is harder, more competitive and dirtier, but it is not a better game of football. Some might accuse me of nostalgia, but I had the privilege of seeing the English team play at Main Road just after the war, scoring eight goals against Scotland. The forward line included Matthews, Carter, Lawton, Hagan and Denis Compton. What would they fetch if they were available today? It is no good saying that they would not have made the grade today because they would have. By way of a little aside, perhaps I may correct the noble Lord, Lord St. John of Bletso, who was a little wrong about Gordon Strachan. It was the

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noble Lord, Lord Taylor, who put me right. Strachan moved from Aberdeen to Manchester United and then to Leeds United.
I do not believe that the changes have benefited the ordinary spectator—and I am more interested in the spectators than in the football clubs. Football has become money-mad. I would not refer to "the football industry" because it is not an industry. If we have a debate on Wimbledon, are we then going to call tennis an industry? We cannot go along that route. We must try to keep football a sport. If we start to deviate from that and refer to the game as an "industry", the idea will start to sink in that football is an industry.
I turn now to a development in football that has frightened me. A few weeks ago, I attended a meeting of the all-party group which was attended by a man—I shall not use his name—who was described as prominent among the new breed of agents in the game. I listened to him for 20 minutes and thought, "This fella is nothing more than an East End spiv". That is all that he was. He said that he had been introduced to the game as an agent on the recommendation of Terry Venables. If that is the sort of man who recommends you, you would not get a job from me. But those are the men who have been let loose in football. Nobody has any control over the situation.
The agents tell the players what they are worth and how much to ask for. That is why I ask myself whether the introduction of such agents, who have a totally free rein, has been any good for the game. I do not believe that it has. However, it is one of the biggest factors in the explosion in transfer fees and the price that people have to pay to watch a game. Even Manchester United has to produce a new strip every few months in order to survive. That is the argument, although it is very poor.
I should like to go back to the days when I knew that Arsenal played in red and white, that Manchester United played in red and that they had an alternative strip. Today when I see some teams playing on television I have to ask, "Who is it?", because the colours are totally alien to anything I have ever known. It is the result of the commercial involvement. I hope that the football authorities will get together and try to get rid of the agents because they are of no benefit to the game.
Some noble Lords have referred to crowd behaviour, but I believe that there has been a sad deterioration in the behaviour of players on the pitch. Every era of football has had its hard men but I shudder when I see some of the activities of highly paid professional footballers whose main intention appears to be to get a member of the other team taken off on a stretcher. The worst recent act of violence was committed by a United player. We then heard a former international who plays for the same club defending such conduct.
Such incidents ruin all the good work that has been done by clubs to bring families back into the game. Manchester City, Manchester United and most of the other clubs are doing a wonderful job by encouraging children to go to the club. But it wants only one stupid act such as that to blow the whole thing out of the window. If children see their idol tread on a fellow they will say, "That's the game and that's the way to play
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it". It is about time that managers started disciplining people. I wish to mention Arsenal, the team supported by my noble friend Lord Peston. I understand that if in yesteryear an Arsenal player was sent off he did not play again until he had seen the board of directors. That was the system and it is about time some discipline was brought back.
As regards the incident involving Cantona, I was as surprised as anyone about some of the quick reaction. However, I was disappointed even more by the reaction of those at Crystal Palace to the lout who triggered it all off. They said, "We have suspended him for the rest of the season". That meant two whole matches. There may have been other matches but officially there were only two matches left on the fixture list and I thought, "That's some punishment!". I believe that such people should be dealt with severely and stopped from watching matches.
The FA has published a list of Manchester United supporters who have sold Cup Final tickets at excessive rates, and it has dealt with them. Manchester United has kicked those people out of its club membership and that is 10 years' punishment. However, a fellow who triggered off the worst act of violence on a football field will miss only four or six matches. Then he will be back mouthing his filth at somebody else. I make no excuses for Cantona; what he did was mad.
I turn to the issue of referees on the field. They must show a yellow card, which must be followed by the showing of a red card. The foul that prompted the yellow card may have been the dirtiest that the referee had seen for ages. I believe that a man who commits such a foul should be sitting with his manager and should be taken out of the game immediately. Certain teams are noted for causing the other side to have to bring on substitutes pretty quickly. A fellow can commit two terrible fouls in order to get rid of a star player from the other side and only then be dealt with. That is a situation in which we must become involved.
I appreciate that one cannot turn the clock back. There is no question about the fact that money now decides where the honours will go. A perfect example is rugby league, which is being debated in another place. Wigan became the first team to become totally professional and it wins everything in sight. The same thing has happened in football. While a few teams have all the money, competition will be false and the sooner that we can return to a reasonable situation the better for everyone concerned.
6.55 p.m.
Lord Brougham and Vaux: My Lords, it is a great pleasure to follow the noble Lord, Lord Dean of Beswick, but I hope he will not mind if I do not follow him down the same path. Although his speech was most amusing, I believe that if he repeated some of the comments outside the Chamber he might find himself in a little hot water.
I too thank the noble Lord, Lord Donoughue, for tabling this Motion tonight. However, I have to admit that when I read its terms I was puzzled by what the noble Lord meant by,
"the need for more effective regulation".

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I thought, "Heaven forbid, does he want the Government to be involved in some way, however loosely, with the operational running of our national sport?". If that were to happen perhaps snooker would be in the newspapers next. All governments are accused of over-legislating; let us not get them involved with sport. Having said that, I agree with a lot of what was said by the noble Lord, Lord Donoughue.
I have no interest to declare—financially, that is—but like the noble Lord, Lord Peston, I am an avid Arsenal supporter. In the past I have enjoyed the club' s hospitality in the directors' box but, alas, not this season. However, I would like to thank the club and the FA for their help in preparing for tonight's debate. Although the Gunners have had a torrid time in the domestic game, as well as the bad publicity, and although they were on the brink of demotion for the first time, I congratulate them on their fine performance in Europe this season. I wish them every success in Paris on 10th May. For the second season running it is the only British club to make progress in Europe.
Regrettably, this season has had a turbulent period, provoking unwelcome publicity; namely, that concerning financial irregularities in the transfer market, match fixing, drug abuse and, regrettably, the old story of spectator violence as was seen in Dublin. The first two matters are under inquiry, one by the Hampshire police and the other by a commission set up by the FA with a leading QC as a member. Both those inquiries are still under review and as they are sub judice I shall not comment. However, I am led to believe that the George Graham case should be reported towards the end of May or in June.
With regard to drugs, the FA has stepped up its monitoring and testing procedures wherever usage has been established. Swift action has been taken to help players; not only the high profile players such as Paul Merson who, I am glad to see, has made a good recovery—and may it last.
I am told that new arrangements are being put into place to ensure that there is no repeat of the nasty events in Dublin. But I strongly believe that if the Irish authorities had accepted help from our police force the incident may not have happened. I believe that it was caused in the main by a minority of mainly Left-wing extremists or fascists, as has been said. Whoever this rent-a-mob are, they are about the worst kind of people in our society today and should be dealt with by the courts in no uncertain terms. They are hellbent on upsetting other people's enjoyment. I believe that they are known by the police and I hope that they will be brought to book very soon. Provided that the courts have the powers, and use them with tough punishments, this behaviour could I hope be stamped out.
Likewise, the transport police could be stronger. Why do not they stop the known troublemakers from travelling to the matches simply by stopping them from boarding the trains? Perhaps my noble friend could pass that suggestion to the appropriate department for consideration.
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I am told that soon members of the FA will be seeing my right honourable friend the Home Secretary to discuss the existing rules and possible amendments to them. I hope that he will listen with an open mind to their requests.
Another problem from which our national game suffers, which is nearly as bad as the last problem that I mentioned, is racism and intimidation, which causes a nasty atmosphere at many games. That must be dealt with severely. I am told that the FA is working with the Commission for Racial Equality and other bodies to tackle that problem. They are building on the "Kick Racism out of Football" campaign and will be launching a comprehensive campaign for the new season.
As regards taxation, I am told that the Premier League clubs have agreed voluntarily, at an aggregate cost of about £0.5 million, to commission independent accountants to prepare reports for the Inland Revenue so that clubs can put their houses in order. That has been agreed voluntarily with the Inland Revenue on the basis of voluntary disclosure. There is no truth in the reports that the clubs are being investigated.
Despite the damaging headlines this season, one should not lose sight of the achievements and success of the sport in recent times. If one casts one's mind back to the Taylor Report following the Hillsborough disaster, people up and down the country in this House and in another place were saying that all-seater stadiums would be a disaster and that clubs would lose support and money. Not many people like change but sometimes it can be good, as in the case of football. In the 1993–94 season, the total attendances at Premier League matches topped 10.6 million. For the first part of this season the likely attendance figure will be over 11 million. It will be only the second time in the past 11 years that the figure has exceeded 10 million.
In the past, fathers and sons went to watch football. Now more women and families are attending than ever before. The majority of fans prefer the new stadiums as they are more comfortable and have much better facilities. It may be that the old traditional supporter is staying away but those supporters are being replaced by new supporters who turn up week after week. One has only to look at the top clubs which have full houses every week. Arsenal consistently has gates in excess of 35,000 with a capacity of around 38,000. That is despite all-seater stadiums and an increase in price, although not in every case, all of which was frowned upon not so long ago.
The association is not complacent. It welcomes this debate about the future of our national sport. It knows that there are problems to be solved which are being properly investigated and which will be dealt with in the appropriate manner. If the sport were in such a turmoil, as some of the media suggest, how is it that UK Ltd. has been awarded the Euro-cup next year? As Bryon Butler of the Daily Telegraph said, English football is facing a new

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dawn; its health has never been ruder; its profile has never been higher. My Lords, let us keep governments out of sport.
7.2 p.m.
Lord Howell: My Lords, I thank my noble friends Lord Donoughue and Lord Peston for arranging this extremely timely debate. I thank the noble Lord, Lord Aberdare, for his kind personal remarks.
I am extremely sad that the Minister has not found it possible to answer this debate. Perhaps I may say to the noble Baroness, Lady Trumpington, that my regret in relation to the Minister is in no way to be taken as any reflection upon her, for whom we all have great affection. I know that she will listen faithfully to the debate and transmit our views to Ministers.
My complaint is that Ministers should be here to listen to the debate and reply to the vital matters raised in this Chamber. The reason I say that is because there has been a succession of events recently about which the silence of the Minister for Sport has been the cause of the deepest regret. There is the threat of a television war, to which I shall return, which my noble friend Lord Donoughue mentioned. That will affect all sports and is a matter of the most serious concern. There has been not one word from Ministers on that. There has been the violence of criminal groups in Dublin and Bruges. Although the Home Secretary has spoken, there has been not one word from the Minister for Sport. There was the criminal activity at Walsall caused by alcohol, to which I shall return, which resulted in the death of an innocent supporter. There has not been one word from the Minister for Sport about that.
I was a Minister for 11 years and I was brought up in the belief that my first duty was to the House and to be present to respond in person to matters which were raised. Now one could be excused for thinking that the silence of Sports Ministers of this Government means that:
"Some mute inglorious Milton here may rest".
The truth of the matter is that they are mute and inglorious, which is a matter of concern to us all.
I wish to turn, first, to the question of television which is the matter of the greatest concern for all sports. There is a fight taking place between Murdoch and Packer, as we have seen in relation to rugby league. But it will not only be rugby league and soccer that will be affected. Cricket, tennis and boxing will also be affected. They will try to buy the whole gamut of sport for television. The Government must do something to regulate that. This debate makes the case for regulation. We must prevent those buy-outs and monopolies.
The governing bodies of sport have been inclined to take the money and run. One can understand why they have done that. They cherish their independence, but if those television moguls are allowed to buy up British sport in the way that they seek to do, the independence of governing bodies will count for nothing. Television will become the governing body of sport. A predatory Murdoch will run sport. Public service broadcasters, the BBC and ITV will be also-rans.
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The question to which we need an answer is what the Government intend to do about that. As Mr. Michael Grade said last night in a striking lecture, the new Channel 5 may well prove to be catastrophic if the decision goes in favour of handing it over to those people who already own so much.
The Premier League is to be congratulated on keeping a close watch on the effect of its arrangements with BSkyB Television. The research that it commissioned from Leicester University is first-class and some of that has been read out to us. Last Thursday, the Premier League clubs took two very enlightened decisions of which we should approve. First, they are requiring every club to provide an audited statement that the club has complied in every direction with the rules of the Football League. That will do a great deal to get rid of the sleaze and will help also to control the agents. I agree wholeheartedly with what my noble friend said about that. The activities of agents are a matter of concern to the Football Association, which needs our support to keep that matter under control.
The second decision of the league chairmen is to ensure that an appropriate portion of the funds of any TV deal is directed to the Football League for the benefit of the clubs in the lower leagues. That is absolutely essential. I can tell my noble friend Lord Donoughue that the Football League tells me that the reports in the press of a £600 million deal are totally erroneous. At least we can be grateful on that score.
I turn now to the second of the Government's responsibilities which they are not discharging adequately, if they are discharging them at all. I refer to the violence and crime which now attach to our football. There has been a total failure to stop criminals travelling abroad. Why on earth should we impose upon our European partners the havoc and destruction which those people create, for example, in Dublin and Bruges?
I had a great deal to do with the Football Spectators Act when it was in another place. We opposed the system of identity cards but we were unanimous in our support of Part II of that Act which provided that if the police bring an offender before an English court, the court can make an order requiring the offender to attend at a police station at any stated time; for example, when the England team is playing abroad.
I understand that the number of those criminals creating havoc in Europe who have been brought before the court under that Act is one. I repeat, one. That is a gross negligence of duty on the part of Ministers and of the Government who obviously have not been pursuing the matter. What are the Government doing about all those people involved in Dublin and in Bruges, (many of whose names are known), in terms of bringing them before the courts under the Football Spectators Act? That is a question that I should like to be answered. I do not expect the Minister to be able to do so this evening, although I would be delighted if she were able to do so. However, if she is not able to do so, could she please arrange for her answer to be given to the House and not sent to me in the post? It is a matter of great public importance and something which we need to pursue. I am sure that the Football Association and the police

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intelligence unit, especially as regards Chelsea Football Club in the Bruges case, have acted with great forethought and commendable precision.
I turn now to the Villa Park semi-final where two motor coaches—one from either side—spent two hours at a pub by arrangement which resulted ultimately in a punch-up and one death. I hope that noble Lords will excuse me for returning to my own experience, but when I was Minister for Sport we issued a code of conduct with the support of all the football authorities, the police and the coach operators. It stated that no coach would be allowed to stop at a public house anywhere during the journey going to or from the match and that no coach would be allowed to carry alcohol. Why have those regulations gone into disuse? Can the Minister tell us why such successful efforts have fallen by the wayside? I suspect that it is due to the fact that we no longer regulate coaches; indeed, it is all part of the evils of deregulation from which we are suffering. However, I am glad to say that the National Federation of Football Supporters' Clubs (of which I happen to be the patron) is reassessing and revamping its own guidelines in order to draw attention to the great dangers associated with alcohol consumption.
Then there is the question of racism and chanting which has been mentioned. The concern of the league is commendable. The Football Association has said:
"In the near future, we will be launching a new initiative to combat racism and intimidation in our grounds".
The National Federation of Football Supporters' Clubs has written to every league chairman pointing out that,
"the anger felt by [our supporters] who are now forced to sit in an environment polluted by the foul-mouthed, whose response to any personal appeal to tone down their excesses is met with a verbally or even physically intimidating response".
That is the evidence of people dealing with the problem. Again, one can only hope that the Government, in association with everyone else, will deal with the matter. I should tell the Minister that I can tell the time. Therefore, there is no need for her to keep pointing at the Clock. When I refereed, I always played extra time if I thought that it was necessary. However, I shall do my best not to do so on this occasion.
I should like to extend a word of commendation to the noble Lord, Lord Aberdare, and his trustees. Because of the lack of time, I can only say that they have done a magnificent job and that they deserve the support of all of us as, indeed, do the football pools. However, we should take note of what the Football League has told me. Its income is down by 22 per cent. because of the National Lottery and that of the clubs is likely to be down by 24 per cent. Those of us who supported the lottery are entitled to express such concerns. We ask the Government to keep the matter well under control. The tax paid by the football pools is still well out of kilter with that paid by the National Lottery.
Finally, I should like to say—and I am still within my 11 minutes—that when I wrote a report on sport sponsorship a few years ago, I said on every page of it that, while welcoming sponsorship,
"the governing bodies at all times must govern their sports. They must not hand the control of their sport over to television or sponsorship".
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I wish to end by drawing attention to that great danger. If governing bodies governed and if the Government accepted their responsibilities—and, indeed, if we all encouraged both of them in that respect—football and sport would be much healthier than it is today. However, if we do not do so, then the dangers will stare us in the face and they are very real.
7.15 p.m.
Lord Lyell: My Lords, what a pleasure and privilege it is to be able to congratulate the noble Lord, Lord Howell, on his first appearance. We are all delighted to see him back. We hope that he will be in fine training very soon. Perhaps I may begin by thanking the noble Lord, Lord Donoughue, for giving us a chance to look at the football industry. I understand that there are some machinations with noble Lords opposite about the question of regulation.
My one thought on the regulation of football is as follows. The noble Lord, Lord Howell, who has just spoken and other noble Lords opposite, should think back to 1988 and remember the words, "No, don't". I recall the incredible scenes in your Lordships' House when my noble friend Lord Hesketh was taking criticism—much of it perhaps justified—from noble Lords opposite, and above all from the noble Lord, Lord Harris of Greenwich, about the Government getting involved in areas, especially as regards sport, where it was thought much better not to do so or, indeed, to do so with considerable thought and to the minimum extent.
I believe that the Football Spectators Act 1989 was a prime example of fine rhetoric, followed by what I like to call "marking time" in a swamp with considerable difficulty. However, I should like to consider one or two thoughts on the football industry; in other words, on the sport and how it is run. Football for me, and for all young Scots—and, indeed, even older Scots such as I can see on the second row opposite—consists of dreams, romantic notions, emotions and, above all, money. That is because, until recently, the Premier League was stippled with Scots.
The people involved in the sport—and we have to be politically correct—are boys or young men. Your Lordships may remember an excellent movie released about 20 years which was called, "Gregory's Girl" in which a young Scottish girl demanded as of right to play in the school team; and, indeed, did so. I must say that the young lady was extremely attractive. Your Lordships may also like to consider what happens at World Cup matches. The cameras pay scant attention to what is happening on the football field, unless the Brazilian team is playing well. They pan the stands where, if one is lucky, hundreds of stunningly attractive Brazilian young ladies are to be found in national jerseys. That prospect will clear your Lordships' Chamber. Even the noble Lord, Lord Taylor of Gryfe, and myself, no matter what is being discussed, will head for the television in such circumstances. Perhaps when she responds, my noble friend the Minister will tell us about the time when she wore a rugby jersey on a fairly public occasion. If she has time, she can fill us in.

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The football industry is—and, again, we have to be politically correct—for young men and boys. However, I am reminded of meeting the late and much respected chairman of a very distinguished football club at a bus-stop in Oxford Street. I refer to the late Sir John Smith who was chairman of Liverpool. He told me that he was trying to conduct the business of a properly run football club. The last four words will predicate much of what I have to say. A "properly run football club"—such as many of those that we have heard about today—will have a development programme whereby it will take, if I may be politically incorrect, young boys. Those boys are taken to separate, dedicated premises from nine years of age upwards. They undergo a training session of one-and-a-quarter hours twice a week. I am sure that that would be very beneficial to the noble Lords, Lord Peston and Lord Donoughue. However, I shall excuse my noble friend the Minister in that respect because her managerial qualities are the highest.
Those young boys undergo a trial period of four weeks. If their commitment, talent and behaviour are reasonable, they are then invited to sign a commitment to the club on a yearly basis until they reach the age of 14. At that time, if they still wish to go on, they make a further two-year commitment, At the age of 16 the boys will almost certainly be offered something under the YTS scheme with the club. The process is taken step by step, once they are 16 and have left school, as part of their intellectual development.
The youth development officer of the club who has given me that information is a school master. He has up to 130 boys in the development programme aged from nine to 16 and six part-time coaches. Last week, the club played a reserve game. Ten out of the 14 players, who were either on the pitch or sitting on the substitute bench ready to go on, were what I call "home grown"; in other words, they had come through the system. Perhaps that is fairly typical of top Premier League clubs—the 10 or the 20 described by the noble Lord, Lord Dean of Beswick, for example. Certainly the club I am talking about is, I believe, unique in that one director takes personal responsibility—he reports to the chairman and to the board of directors—for the development programme. The director has returned with the under-16 team from Bludenz in Austria. He goes to Coleraine where there is an annual tournament to which the club, thanks to its conduct and behaviour, is invited most years. We have not yet heard about that side of things and it is the obverse side to the problems of money and transfer fees.
Four weeks from tonight many of your Lordships may be sitting in front of the television set watching the team of Milan—an Englishman founded Milan Athletic and Cricket Club—play Ajax of Amsterdam. If any of your Lordships raise one finger against Milan, he will be subjected to a starvation diet. Noble Lords will appreciate what I mean when they leave the Chamber. Twelve out of the 15 members in the Ajax team are home grown and that team is at the pinnacle of the European club system. That point should be considered as well as the large sums of money that have been mentioned in the debate.
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How should the idyllic system to which I have referred be regulated? I refer now to dull, boring accountancy which might be pertinent to the regulation of the game. I refer to my profession of accountancy and to simple, dull accountants and auditors. The Premier League has a working party which is considering how to regulate the money that clubs receive and handle. I learnt my first lesson in auditing on 2nd October 1962 in Glasgow—the noble Lord, Lord Taylor of Gryfe, will appreciate this—as a young apprentice. One must separate the cash from the traders. The kinsmen of the noble Lord, Lord Peston, may have seen the article in today's press entitled "Footloose traders". The subject matter of that article is relevant to many of the scandals of which we have heard.
We have heard about problems as regards transfer fees. I spoke to one former chairman of a leading club—in the top 10—who referred to what he called the Eight Commandments. He said that when a club wishes to buy a player, first, the manager responsible for the teamwork and the playing staff ought to say to the chairman, "I am interested in this player. I would like to bring him to the club". Secondly, the buying chairman speaks to the prospective selling chairman. Thirdly, if he is told he may contact the player, the manager, or the chief executive, and the director should travel to the selling club and arrange a professional and businesslike meeting. I am not talking about a motorway service station or other out-of-town area, but of a room where records can be kept and verified. Fourthly, if the transfer is agreed, the fee, the methods of payment, the contract, and what I might call odds and ends, should be agreed in writing. Fifthly, this matter should be settled between the two chairmen. Sixthly, the buying chairman should inform his board in writing that the player has been bought for a certain sum of money. Seventhly, the cheque should be signed by two directors of the buying club. Eighthly, the cheque should be paid club to club. Those seem fairly complicated steps but I believe they form at least a basis of such negotiations. That is what the Premier League wants. At least dull, boring auditors have a part to play in these matters.
I now refer to agents. They can cause an emotional reaction but of course they act entirely for the players. Some clubs are naive enough to think that they should pay the agents. However, the agents act for the players. It has already been said in this debate that agents should be registered. I understand that they must be registered under European or world—UEFA or FIFA—rules. I wonder whether that is enough.
I conclude by referring to the ever popular gospel of St. John, Chapter 8, verse 7. I recall asking the noble Lord, Lord Peston, to look at this last July. The gospel states,
"Let he that is without sin cast the first stone".
If clubs put as much effort and professionalism into their financial and auditing arrangements as they do with the playing arrangements, let alone the youth development programme, we would have properly run football clubs. We need to take advice from auditors. Then I believe the clubs would have the great motto of,
"Nil saris nisi optimum".

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That is not the motto of the club in which I must declare an interest as, last Saturday, I actually spent money in sponsoring my local club Forfar Athletic. There were 611 hardy souls present. The temperature was extremely low. I gave a prize to the man of the match who said, "Lord Lyell, let us get out of this. I am going to freeze". As we speak, the referee is attempting to calm the excitable Italians in Lithuania. I declare my interest and I look forward to hearing what my noble friend the Minister will say.
7.26 p.m.
Lord Stallard: My Lords, I, too, wish to congratulate my noble friend Lord Donoughue on tabling this Motion and for introducing it in the way that he did. It is with some trepidation that I stand to say a few words on this subject, particularly as there are so many noble Lords who are experts on football, and officials involved in the game of football, present in the Chamber. I refer, for example, to the noble Lords, Lord Howell, Lord Peston, Lord Aberdare and Lord Donoughue, and the noble Baroness, Lady Trumpington. They are all experts in this field. My only reason for speaking in this debate is to express my feelings as a worried spectator. I have no higher claim to speak than that.
Like many thousands of others in this country, I was brought up in a small community where football was the major pastime. Football was our life. Saturday was the biggest day of the week, when we all trooped down to the local football ground, Douglas Park, to watch Hamilton Academical. We went there in our thousands, or perhaps in our hundreds! At least there were some of us. One week we watched what we called the "big" team—the first team—and the next week we watched what we called the "wee" team; that is, the reserves. We were fiercely loyal to our side because in those days the name of the game was loyalty to one's team and to the local community. One took pride in the achievements of one's local team. A win for Hamilton in those days was something to be proud of but if the team went any distance in the Cup the whole town became ecstatic. When the team reached the final of the Cup, people in the town went absolutely berserk. If it had not been for the referee, we would have won the Cup. One of his relatives is a Member of your Lordships' House and I have never spoken to him since.
However, just before the war I moved to London, to Tottenham, and I have been a Tottenham supporter ever since. I supported Tottenham during the war and up to this day. Even though Tottenham has been though a difficult period during the past two or three years, and that continues at the moment, I still support the team, and I am hopeful for its future.
Little changed in the game over a long period. It was a fairly steady game which involved loyalty, fervour and excitement. However, during the war I served an apprenticeship in an aircraft factory and many professional footballers entered that factory at that time. I noticed that they were restless as regards their conditions. They were beginning to feel that they were due more than they were getting—they were only receiving a pittance for playing—and that they ought to be better organised. I watched that development. That
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led shortly after the war to negotiations—for example, between Jimmy Hill and Fulham—and the introduction of individual contracts, and so on.
Those changes have been developing for a long time, but none of us could have foreseen what has happened since footballers first wanted great recognition for what they do on the football field and the situation that we have now. The emergence of the agent has been mentioned. The agent has almost taken the place of the union, the negotiating body and the management. The agent has become rather a sinister figure in this area. It is an issue which has to be dealt with before it gets much worse.
The signing of the new contracts was a good development. There were some changes to the game. There are still changes, some of which I cannot follow. They keep changing the offside rule. I rely on my noble friend Lord Howell to interpret some of those rules for me. The team positions also changed, I do not think for the better. I used to enjoy the formation of the two backs, two half-backs and five forwards. In my view that made for a far better game than some of the negative things we have now. However, those are minor points.
As the noble Lord, Lord St. John of Bletso, said, in the past 20 years the game has become so commercialised that it has almost destroyed itself. If we are not careful, that is exactly what will happen. It is all very well to say that there have been improvements. There have been major improvements in the grounds. No one can deny that. But there is a feeling among ordinary supporters that the improvements and additional revenue are not being fed back into the game on their behalf. It is being fed into the coffers of the clubs, for the benefit of the directors and shareholders. The supporters have not seen the benefit of the improvements.
The noble Lord, Lord St. John of Bletso, also mentioned the article in the Guardian on 4th April. That was an excellent article, which dealt at length with the situation at Manchester United, which is typical of the five or six major clubs in the country. The article referred to Manchester United plc. That is a new development. The club is now quoted on the Stock Exchange. It is bound to be in it for profit. Sleaze comes into it. That is what has caused corruption and fraud, because we all know that that is rife in the Stock Exchange.
The article says:
"Last season, Manchester United plc, our leading club, turned over around £44 million and made a profit of £11 million. So well done, Man U. In their annual report, the actual football successes—winning the Premier League and the FA Cup—were almost dismissed, meriting only a couple of sentences, while 24 pages were devoted to how marvellously they had managed their finances and marketing. Merchandising their own brand name had earned them £14 million, an increase of 180 per cent on the previous year".
The club congratulated itself not on winning the FA Cup and the Premier League, but on managing its affairs to make massive profits.
It has also been mentioned that football clubs have discovered the new gimmick of the club strip. The strip was sacrosanct. A thrill went through you when you saw the lads come out on to the field in their colours. In

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those days they were the only colours. Nowadays, as the noble Lord, Lord Dean, said, when you watch a match on television it takes a few minutes before you know which team is which, because each club has a strip for home games, a strip for away games, a strip if another team has the same colours, and for black and white television or colour television. There are so many reasons and excuses for having more strips.
That is another constituency problem that I had to deal with. Parents are being blackmailed and bullied by their children, who have to be seen in the latest outfit. It costs a fortune. It is not just a shirt, but there are pants, socks, boots, badges, holdalls, scarves, hats— everything. That creates a problem for parents, who are placed in a difficult situation by youngsters. That does not seem to bother Manchester United and the rest of them; they are making a bomb.
The clubs have their own shops. Arsenal has its own shop. Tottenham has its own shop. They are like supermarkets. They started in tatty little premises, selling programmes or booking seats for coaches. Now they are getting bigger and bigger. The Arsenal shop at Finsbury Park is like a shopping precinct, selling everything.
Making money has become part of the industry. That is what bothers me. I know that the money is certainly not being fed back in the direction of the spectators. On the contrary, they are being priced out of the game. The people who were and should still be the backbone of the national game can no longer afford to go to football matches. I spoke the other day to the youngster who cut my hair. I said, "I suppose you will be going to Highbury on Wednesday night to see the match". He said, "No." I asked why. He said that it costs £15 to get into the ground. Then when you get in you may want to buy tea, a sandwich or a drink and may spend another £10 or £15. He said that you can spend £25 before you come out of the ground. He said, "Who can go there, unless I can fiddle my mate's ticket, because he's older than me and has a ticket? If he's not going he lends it to me". The clubs are encouraging that kind of behaviour.
Youngsters can no longer afford to go to football matches. That applies to other people. Who can afford to go to football matches if they are on income support, or the jobseeker's allowance? So who do the clubs rely on? They rely on hospitality suites, which are getting bigger and bigger. There are more and more of them. I understand that some companies are prepared to pay £100 or £200 for a seat in a hospitality suite. They get a bit of nosh with it and a few drinks, and they might meet a player to introduce to their customers. That is where the money is coming from. The clubs are inclined to forget the fellows who made the team what it is.
We ought to remind the clubs who those people are. I had a conversation with my noble friend Lord Merlyn-Rees, who had hoped to be here tonight to speak but had to attend a meeting. Leeds United has written to him outlining some of what the club had been doing to combat hooliganism, and so on. I congratulate Leeds. I hope that other clubs are doing the same. I do not have time to list the steps they are taking to tackle the problems facing them.
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We ought to take note of what the honourable Member, Kate Hoey, said in another place. She has raised the matter on a number of occasions. She is absolutely right. I do not agree with her on everything, but I agree with her in this instance. She is of the opinion that it is important that the authorities do not to look for an official scapegoat. She says that:
"The only way to counter that is for the Government to set up an inquiry along the lines of the Taylor report or other reports into football, independent of the cosy relationships in football and with the power to subpoena evidence, to examine accounts and make a full and impartial report. That is what the country wants and that is what is needed if we are going to get back that confidence in football—the national game."—[Official Report, Commons, 30/1/95; col. 831.]
Somebody once asked Bill Shankley whether it was true that some people look on football as a matter of life and death. Bill Shankley said, "No. It is far more important than that". So it is.
7.37 p.m.
Lord Carter: My Lords, we are all extremely grateful to my noble friend Lord Donoughue for giving us an opportunity to have this important debate on the problems which face the football industry and the need for more effective regulation.
No one can disagree that our national game has suffered a bleak few years, with one scandal after another hitting the headlines. I do not think that any of us can recall a time when the game that we all love has suffered so many allegations and controversy involving chairmen, directors, managers, players and so-called supporters.
In today's debate it is essential to determine what kind of regulation the game requires. I do not think that any of us want a great national game run by government and wracked by litigation, but we should not forget that the taxpayer is putting up in the order of £20 million each year by way of tax relief on the football pools betting duty. Also, the Government have the ultimate responsibility for ground safety and for public order, both inside and outside football grounds.
We all hope that football will he a self regulating industry with decisions taken within the game. However, one of the main obstacles to efficient and effective decision making is the fact that the game is still governed by an outdated Victorian rule book whose relevance, if any, to today's game is purely incidental.
What are encouraging are proposals by the FA Premier League to introduce a package of measures next season which will bring in the new code of conduct for managers. There will also be rules which cover the inducements to young players to sign for a particular club as well as measures to license agents, and better financial accountability for directors and chairmen of the Premier League clubs. Proposals were announced only today for the FA to strengthen the finances of the Football League.
Perhaps I may say a word about agents. I heard the agent to whom my noble friend Lord Dean referred. I can use his name. It was Eric Hall. He said, "We say that footballers are entertainers. Entertainers have agents. So footballers should have agents". If a theatrical

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agent induced an actor or actress to leave the run of a successful play half way through its run to join another manager, he would soon be out of business. I know that the PFA is prepared to act for its members at a much lesser cost than other agents charge. Therefore I cannot understand why the players do not use their own organisation.
The picture is not all doom and gloom. We know that crowd attendances have continued to increase. The extra revenue generated by the Premier League clubs means that we can compete with the rest of Europe for the top players, although competition seems to have led to a number of side deals which have created some remarkable differences between the prices paid by the buyer and those received by the seller.
In passing, it is interesting to note that it was always said that those large transfer fees all stayed within the game. That was never an argument that I accepted. However, those fees are not staying within the game now; they are going overseas.
In a matter of five years we have transformed our stadia throughout the game thanks to the vital support of the Football Trust, which has been mentioned. The chairman of the UEFA Stadia Committee concluded recently,
"It is quite clear to me that city for city, England has the best football stadia in the world".
However, we have only reached half time in the projected 10 year programme of the Taylor Report. Future progress will depend on the impact of the National Lottery on football's income stream. We know that the turnover of the pools companies has suffered. That in turn has affected the amount paid to the Football Trust which is then used for ground improvement.
The trust is not the only body to be hit by the effects of the National Lottery. The football leagues are losing the income paid to them for their fixture copyright contracts as the payments are calculated as a royalty on the pools' turnover. According to figures released by the Football League, income on the current contract is running at 22 per cent. less than last year, although the situation will be remedied a little by the welcome reduction in the pool betting duty introduced earlier this month by the Government in another place.
Much more serious has been the impact on the game's own activities in fund-raising. According to recent figures for the Football League, the introduction of the lottery resulted in football clubs suffering an 18 per cent. downturn in net contributions to their own lottery and fund-raising schemes. On top of that, a midweek draw is to be introduced by Camelot and 15,000 more terminals are to be set up to sell tickets. All that will put tremendous pressure on the pools companies and the football clubs throughout the professional, and the extremely important non-professional, game as well as the thousands of grass root clubs for whom the local lottery competitions represent a vital source of income.
All noble Lords who have taken part in the debate are interested in football and recognise the importance of protecting those vital sources of income. I hope that the Government will see their way clear to addressing the
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fundamental concerns sooner rather than later, preventing any further loss of income to clubs throughout the game.
In today's post I received the report from the NCVO regarding the effect of the National Lottery on charities. I quote some figures. There was a fall in the numbers reporting a donation to charities in the previous month from 81 per cent. before the launch of the National Lottery to 67 per cent. in March of this year. The number of people buying charity raffle tickets is down by 15 per cent; and those giving to street collectors is down by 9 per cent. There is a projected loss of £212 million in charitable income over the first 12 months of the National Lottery. If that is what is happening to charities, one can see what will happen, too, to the fund-raising schemes of football clubs.
I return to the point I made about legitimate Government interest because Government represent the taxpayer. Every year the taxpayers put some £20 million into the game. There is also considerable parliamentary interest. We have today's debate. There is also the excellent book which I hope noble Lords have seen—if not, your Lordships should buy it—entitled Football and the Commons People. All the profits go to help the Child Poverty Action Group. In that book some 34 MPs, all fans, (as we all are) who love the game describe their football memories. As I say, all the funds from the sale of the book go to the Child Poverty Action Group.
The game is trying to put its house in order with one important and large area of omission to which I shall return. We have had from the Football League Managers Association some imaginative proposals regarding disciplinary procedures. Anyone who watches the game regularly must agree that the new FIFA mandatory instructions to referees have led to enormous inconsistencies, as individual referees interpret them differently. One can go to two games in successive weeks. The games are extremely similar in the speed of play and the amount of fouls. In one, one can see 11 bookings and in the next week one sees two. There is an interesting idea in France. All the penalty points that a player has are erased if the player goes through 10 consecutive matches without a caution.
A new code of conduct for Premier League managers is proposed dealing with the registration of managers' contracts and arbitration procedures in the event of a dispute. It is important that if that proposal is adopted by the Premier League but not by the Football League, it could lead to poaching of the Football League managers by the Premier League clubs because those clubs will be under the control of the code of conduct.
It is extraordinary what supporters expect football managers to do. I recall the wise words of Mr. Ted Bates who served Southampton Football Club as player, manager and director over many years. After a game he once said to me, "Always remember, Denis, there are 20,000 managers out there watching every game". In the case of Southampton, it used to be 20,000. We have just spent £1 million net to reduce our capacity to 15,000 because of the all-seating requirement.
Much has been said in the debate about money. What is so worrying is that it is now quite clear that it is possible to buy the championship. That is what is

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happening, with very rich men prepared to put enormous sums of money into their favourite clubs. That is a situation that we would never have thought possible.
The influence of television has been referred to already. About a million people watch matches on Sky compared with an average of 7.5 million to 8 million who watch on the terrestrial channels. We have Rupert Murdoch, Kerry Packer and the Rugby League saga. Exactly the same could happen to football and, I believe, is likely to happen to Rugby Union. It is extremely worrying, as my noble friend Lord Howell said.
The important area of omission to which I referred is corruption. I know that my noble friend Lord Peston will deal with that issue when he winds up. It is an area in which the Government have a tremendous responsibility and should pay considerable attention to it. There is a need and a duty for the Government to encourage and to advise—and, yes, if necessary to intervene and regulate to ensure that what Sir Stanley Rous once called "the beautiful game" is properly regulated and free from corruption. Football is not just "the beautiful game", it is also the "people's game". We must all hope that it can deal with the current problems, learn from them and emerge cleaner—both on and off the field—and much more like the game that we all grew up with.
7.48 p.m.
Lord Addington: My Lords, this debate has probably one of the most intriguing titles that we have ever had. It refers to the "football industry". What is becoming increasingly apparent as we listen to the debate is that two aspects are involved: we are mainly talking about football's decline from being a sport to a position where the entertainment industry is attempting to claim it as its own.
The debate revolves around those two components. The noble Lord, Lord St. John of Bletso, expressed best the feeling that sport is about belonging, a sense of achievement, and an identification.
We must bear in mind that those who play professional football are professionals. Not many professions will willingly restrict their earning power. We then find that those two factors—the restriction of earning power and the ideals of sport—come into conflict. As more money is brought in, the conflict will become clearer. The only thing that will keep the balance is some idea of where the line will be drawn.
In the press we have heard much of late about corruption and allegations of bribery. None of the most recent salacious headlines has yet been proven, but one of the researchers in our office discovered for me a list of football scandals of the past. They start in 1900 when Burnley needed to win at Nottingham Forest to avoid relegation from the First Division. Jack Hillman, Burnley's captain and goalkeeper, asked the Forest players to "take it easy" and they would get £2 per head. At half time, the score was 2-0 to Forest and the offer was doubled. Forest won, 4-0.
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We move on to other events until a major series of allegations in 1960. They involved my own team, Norwich. I am not a dutiful supporter, my football affiliations go with the Rugby Union code and not the Football Association. I shall try to avoid using the term "soccer", which I imagine is as irritating to a football fan as I find the term "rugger" to one who prefers Rugby Union. There was a five-year investigation resulting in certain people being banned for life.
If we take into account that there are those pressures on us, we must try to guard against them. One way of doing that is to call on the Government to try to keep a firm but distant hand on the game's finances. That involves the attempt at corruption; and the abuse of money matters and monopoly powers.
It has already been mentioned that Rugby League faces obliteration in its current form with a series of super teams playing across the world. We do not know that the proposal is guaranteed success because people like to identify with whichever team they support. Teams generally need a regional basis for that support. If we have the global game, we may lose that support and destroy the structure that we have. Also, if we accept the idea of having a sports syndicate, I doubt whether any of the teams in any type of competition that is held will have true competition as regards facing relegation. If one buys something like that, as is shown in the United States, one does not wish to risk having the investment wiped out.
Guaranteed possession in the Premier League of any type of sport does not appeal to me. If there is one thing that football has given to us, it is the idea of promotion and relegation on the basis of achievement. That leaves us open to the idea of buying players, but at least we have real competition. Ultimately, real competition is what fans wish to see. They want to identify and they want to see it. Surely here the Government have the role of keeping an arm's length position on finance.
When we are dealing with football, we must remember that our nation is a footballing nation. Association football is the premier game. To be perfectly honest, I would prefer another code, but that is not possible. This is something in which national pride is invested and thus we have the problem that racist and extreme right wing groups hijack our nation's premier game for their own purposes.
Much has already been said about the failure to implement that part of the Football Spectators Bill which was universally welcomed. Something must be done. We have passed legislation which can give us a chance of controlling the ultimate outlet of an extremely obnoxious element in our society. We must take it. The FA talks about trying to crack down on racist abuse and chanting in its games. There is not much point in doing that at club and domestic level if it is not done on the international scene. Such groups are not interested in football; they are interested in publicity. Cut off publicity and we will stop them behaving like that. I do not know where they will go next; I hope it is not to my sport. However, we shall stop them at the most effective stage.

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Surely, the Government must take more action. The legislation which was passed gives the authorities the opportunity not to inform police abroad but to keep the problem at home. It is, after all, our problem and we have responsibility for it.
Most of the other points which I wished to make in the debate have been covered, so I shall conclude—to great smiles from the Government Front Bench. Unless we look after the game and guard the control of it by people with money and with monopoly competition, we shall deny access to many people to watch the game in anything other than a passive capacity on a TV set. Any sporting event watched on TV has nowhere near the level of involvement of actually being there. Unless we take some action to ensure that football is not strangled by commercial interests, regardless of the just aspirations of professional sportsmen, we are in danger of throwing away a game which is not only our premier game, but the world's premier game.
7.56 p.m.
Lord Peston: My Lords, we are indebted to my noble friend Lord Donoughue for introducing the debate. With one exception, to which I shall come later, I do not propose to devote my speech to football per se. I agree with nearly all of what other noble Lords said and so there is no need for me to repeat it. Instead, I shall concentrate on professional football as an industry and clubs as firms. The reason is that that is what they are. They are not clubs in any meaningful sense of the word. Fans and supporters are paying customers and not members. I say that not with any pleasure but with deep sadness.
The noble Lord, Lord Addington, used the word "identification". I and all other noble Lords interested in football identify. If any of my children ring me on a Saturday evening and ask: "How did we do today?", they do not mean: "How did we, the Pestons, do today?", they mean: "Did Arsenal win, lose or draw?" That is because in a sense we are silly and do not recognise the reality of what has happened to our great game.
My point of departure is the Prevention of Corruption Act 1906. The relevant part is Section 1(1):
"If any agent corruptly accepts or obtains, or agrees to accept or attempts to obtain, from any person, for himself or for any other person, any gift or consideration as an inducement or reward for doing or forbearing to do, or for having after the passing of this Act done or forborne to do, any act in relation to his principal's affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal's affairs or business; … he shall be guilty of a misdemeanour".
That applies to all employees of a football club: the players, the manager and other staff. That means that if any of them accepts an inducement not to perform his duties or to perform them in a particular way, he is guilty of the offence specified. I look forward to the Minister's confirmation. I take that legislation to mean that a manager or any member of his staff who accepts an inducement or a reward to buy or sell a player is guilty of a misdemeanour. I go further. The offence occurs if the inducement leads to or encourages such
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buying or selling. I must also mention that serious penalties would then be involved. I emphasise the word "serious".
Now, it is alleged that this kind of thing is or was widespread in football. The Inland Revenue has taken an interest because it believed that payments were made and not declared as taxable income. Gathering in the revenue is its concern. I must ask whether the Inland Revenue has a legal duty in all such cases known to them to pass on the relevant information to the authorities; namely, who was paid what, by whom and for what. Since we are concerned here with the criminal law, I take it that the relevant authorities are the police.
One problem I have is that I have been advised that the Inland Revenue has no such duty. If that is so, it is most upsetting, since the information that it has would be the first hard evidence available prompting police action. In addition, I am puzzled that it is the FA Premier League and the FA itself which are taking the lead in looking into all that. They have a role to play, and I shall return to it in due course. But my question to the Minister concerns what part the legal authorities play, are playing and ought to play.
I turn next to the players themselves. What has made the news are allegations of match fixing. There has been some misunderstanding of what might be going on. To be profitable either to gamblers or to bookmakers match fixing does not necessarily mean fixing the precise result, which is hard to do. All that is required is to make sure that certain results are not possible. In that respect football is no different from racing or prize fighting. I must be careful not to get too close to any actual case. Let me point out purely logically, not with respect to any specific case, that a goalkeeper who lets in a goal ensures that all bets involving the other side being scoreless ipso facto lose. That is all he needs to do to rig the whole match.
On match fixing, my legal advice is that it may be covered by the Prevention of Corruption Act 1906 to which I referred. But I am also advised that it may involve conspiracy to defraud, which is a common law offence. I am advised that even if the gambling occurred abroad, English courts would accept jurisdiction on the grounds that the conspiracy was hatched in England. Can the Minister confirm all of that?
Can we also be told—I repeat a question that I have asked but now apply it to this particular case—who are the relevant people to pursue the matter? I hope that I am right in assuming yet again that the relevant people are the police.
I now come to the subject that other noble Lords raised; namely, the role of footballers' agents. I am bound to say, as someone who is not expert in the law, that their role needs clarification. If they are part of the process of inducement and reward to which I referred in connection with the Prevention of Corruption Act, it seems obvious to me that they, too, are guilty of a misdemeanour. I hope that the Minister is able to confirm that. In that case, am I right in saying that the police have a responsibility to pursue the matter and to investigate the role of agents in particular cases, or is it that the police can get involved only if there is a

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complaint from a specific club? That is one of my examples of why it is so difficult fully to understand all this.
That brings me to the question of footballers' contracts with their clubs, a point which my noble friend Lord Carter mentioned. This, too, is a murky area. My understanding is that footballers' contracts certainly are contracts. If then an agent persuades a player to act in such a way as to call the contract into question and breach it, a civil action for the tort of inducing a breach of contract arises. If this involves inducements and rewards for the player and his agent—and it certainly does; the player receives signing on fees and the agent receives a large fraction of the transfer fees—I must again ask: does the Prevention of Corruption Act apply to the behaviour of agents? We read about such matters in the newspapers every day. We are told almost every day that this or that player is to leave one club and join another even though his contract has several years to run. Is it then the police who have the responsibility to investigate? If the police do have that responsibility (I am fairly sure that they do) they will be pretty busy if what we read in the newspapers turns out to be anything like the truth.
An equally important point is this. Why do the major football clubs not look in some detail at the kind of contracts that they sign and at the penalties for breaching them? My fear is that they see what goes on every day as swings and roundabouts. But if they were to see that and not take action, it is not obvious to me that that would be in the public interest.
I have already referred to the role of the various football authorities. A central question is what is the statutory basis of what the football authorities do? Again, I gave the Minister notice that I would like her to answer that point definitively. As I understand it, to give an example (it is hard for these words to pass my lips) Tottenham Hotspur football club (I think it-is a football club) argued successfully that the FA did not have the power to deal with transfer irregularities in the way that it did. Unfortunately, it is not obvious whether the FA's procedure in that case was wrong or whether it did not have the powers that it thought it had anyway. I think we need to know precisely what are the FA's powers with respect to player and club behaviour, and how this relates to the law. Certainly, whether we are discussing Mr. Cantona, Mr. Merson, and now this new gentlemen Mr. Tait, to name just three among many, they seem to suffer double jeopardy from the courts and from the football authorities.
A final question relating to this area is violence on the field. Commentators of all sorts make idiotic judgments and statements about football being a man's game. I for one do not believe that violence is or ought to be intrinsic to football. There have been some celebrated court cases on that in recent years, the outcomes of which have left me deeply disturbed. Violence is violence whether it occurs on or off the field. Again, this not something which, when it occurs, can be left just to the football authorities, but there is a great deal that they can do to outlaw it.
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Let me return to my main theme of corruption, and say what has to be done. Concerning the past, what is required is the completion as a matter of urgency of the full investigation by the Premier League Commission of Inquiry. I hope that it will have examined every transfer, say, of more than £1 million that has occurred in the past five years. The clubs involved, buyer and seller, should demonstrate how much the former paid, how much the latter received, and what happened to every penny of the difference, if there was one. That information needs to be placed in the public domain.
For the future this very same policy needs to be extended so that every transfer of substance is monitored in exactly the same way and every penny accounted for. I was delighted that the noble Lord, Lord Lyell, used the word "accounting", because that is what is required here. Every penny should be accounted for, and in my judgment preferably publicly. If there is some objection to that, which I cannot see, then a certificate of legitimation should be issued by a fully independent body to say what happened to all the money and that it was all used legitimately. Only such an approach will be sufficient to stop the kind of experience that I had recently; namely, of people whom I normally regard as being of good sense and probity saying to me apropos of tonight's debate, "I see you are going to speak about football. You know it is the most corrupt industry in the country". I beg to differ, but I am profoundly disturbed when people make that kind of remark.
There is a public interest in football being conducted according to the highest standards. I should like to reassure noble Lords that I believe strongly in self-regulation in football—based on a proper statutory foundation. In other words, I want the FA to be the regulatory body. But that means, as in other cases of self-regulation, that it must do the job well and satisfy the public that it has done so. I do not exaggerate, and I echo other noble Lords when I say that at the moment the FA is on trial, and any suggestion that its commission of inquiry will brush things under the carpet will prove disastrous for the future of the game.
I said that I had one actual football point to make. In the last few moments of my time, I now make it. There has been only one English international team—only 11 men—which has won anything of importance internationally. That was the 1966 World Cup team. I happen to believe that the 1970 team was better and should have retained the World Cup. But, despite being a know-all football fan, I have no time tonight to go into the detail of why I believe that. I am extremely upset that while some members of that great team have been honoured, not all have. That is a cause for shame, especially when one sees the number of also-rans and failures in so many other sports who in traditional British fashion have been honoured. I shall not rest until this anomaly has been dealt with. I hope that all noble Lords who have spoken and the Minister will agree with me on that, if on nothing else.
8.9 p.m.
Baroness Trumpington: My Lords, I know that the interest in football of the noble Lord, Lord Donoughue, goes back a long way, and that he has a genuine concern

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for the game. My football knowledge has greatly increased since I was driven by a GCS driver, a girl who plays for the English women's football team. I welcome the opportunity that this debate has afforded the House to discuss the problems that football has undoubtedly suffered recently. I am also grateful to the noble Lord, Lord Peston, for giving me warning of his questions, and to my noble friends Lord Aberdare and Lord Lyell for allowing me the privilege of a preview of their speeches.
This has been a turbulent season, accentuated by the fact that anything which happens in football is certain to be caught and magnified by the media spotlight. That is not of course to suggest that the problems have not been real or that corrective action has not been needed. Football is our national game and is followed by millions who regularly go to watch their local team, and many millions more who watch the game on television. Although football is run by private clubs and administered by independent governing bodies, where issues of legitimate public interest are raised it is right for the Government to ensure that appropriate action is taken both to resolve the immediate problems and also to ensure, as far as possible, that there will be no repetition.
That is not to say that it is always the Government themselves who must take action. That is an important distinction. As your Lordships know, the Government's role in football is to encourage the development of, and participation in, the game through appropriate policies and expenditure programmes.
Responsibility for the day-to-day running of the game rests with its governing bodies, such as the Football Association, the FA Premier League and the Football League, which are self-regulating and entirely independent of government. The noble Lord, Lord Peston, will note that those bodies do not have any statutory basis, and their powers in relation to their members are purely contractual. It is to those bodies that we must, in the first instance, look to see what action is being taken in response to the problems which have been mentioned.
One of the main concerns—this point was raised by the noble Lord, Lord Peston—has surrounded the area of player transfers, with allegations of financial improprieties by clubs, managers and agents. In response to those concerns the FA Premier League set up a commission of inquiry, and appointed as a member of that commission an independent QC who is also a deputy High Court judge. That commission has a wide-ranging remit and is looking into all overseas transfers since the Premier League was established, together with a number of alleged irregularities in domestic transfers. I am confident that that inquiry is conducting a thorough investigation, and that any evidence of wrong-doing will be vigorously pursued. The commission's recent findings in the case of Mr. Graham, the former manager of Arsenal Football Club, who has been accused of taking bungs, demonstrate that the inquiry is proceeding speedily and that there is no reason to fear a cover-up of any of its findings. Mr. Graham now faces disciplinary procedures by the Football Association, so your Lordships will understand
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that I should not discuss this particular case. Whether any offence has been committed under the Prevention of Corruption Act 1906 is a matter for the police to consider. The question of whether to take action against a particular individual under our corruption legislation is not something in which it would be appropriate for the Government to intervene. It is a matter for the police and prosecuting authorities.
I am pleased to say that the Premier League has already taken a number of steps to improve its regulatory mechanisms, as a direct result of the inquiry. New rules covering the registration of managers' contracts and codes of conduct for clubs and managers are being introduced, as are new disciplinary procedures. New rules to regulate the activities of agents, who, as the noble Lords, Lord Peston, Lord St. John of Bletso, and other noble Lords have noticed, have been a major source of concern, are also being introduced. These new rules will require contracts between agents and principals to be registered; and for agents to comply with a new code of conduct. Agents are now also governed by FIFA regulation, and must be licensed. The rules under which agents must operate, which came into effect this year, clearly state that an agent shall never
"approach a player who is under contract with a club so as to persuade him to break his contract or not to adhere to the rights and duties contained in the contract".
Agents who breach that rule are subject to penalties by FIFA, which include the withdrawal of the agent's licence. The law in relation to contracts makes inducement of breach of contract a tort, and clubs have in the past claimed damages where a player has been induced to break his contract. The FA Premier League is looking to introduce even tighter controls over agents involved in domestic transfers.
Concern has also been expressed about financial irregularities by clubs. As your Lordships will know, the principal responsibility, within government, for such matters rests with the Inland Revenue. The Inland Revenue has, for some years, been looking at these issues. Football clubs are, of course, entitled to the same confidentiality in their tax affairs as any other private organisation or individual, but where offences come to light and merit prosecution then that will be done, as it has in the past. My noble friend, Lord Brougham and Vaux, will wish to know that the FA Premier League has also taken that concern seriously, and has voluntarily agreed to commission independent accountants to prepare reports for the Inland Revenue, which has agreed their scope and contents. The, aggregate cost of this exercise to football clubs is likely to be around £½ million. The Premier League is also considering the introduction of a new requirement for each club to have to satisfy its auditors each year that the club has complied with all the relevant Premier League rules. The football authorities have also set up a bank account through which money for transfer fees between English clubs must pass, thereby ensuring that it is clearly accounted for.
Another problem which has received much attention has been that of the behaviour of players and spectators. The disgraceful scenes in Dublin and in Bruges will

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have saddened all true football supporters, and it is essential that we ensure that such problems are not repeated. Good intelligence is the key to tackling hooliganism. The football unit of the National Criminal Intelligence Service was established as a centre for the collation of police intelligence on serious and persistent hooligans and has been fully operational since March 1990. The unit operates a confidential "hot-line" for the public to pass on information about the activities of hooligans. I am sure that my noble friend Lord Brougham and Vaux and the noble Lords, Lord Donoughue and Lord Howell, will be pleased, as I am, to learn that, following the disgraceful events in Dublin last February, the football unit received over 1,000 calls from members of the public providing information, including details about the identity of some of those involved.
It is, of course, a matter for the Irish authorities to consider whether to take criminal proceedings against those concerned. If they decide to do so, police officers here are ready to offer them every assistance, just as they did in the lead up to the game itself.
Over the past few years the Government have introduced a range of measures to counter the threat posed by football hooliganism both inside and outside the ground. In answer to the noble Lord, Lord Donoughue, your Lordships can be assured that the Government are considering carefully what further legislative or administrative measures may be necessary to deal effectively with the problem of football hooliganism. Those measures will, I am sure, take particular account of the findings of the various inquiries into the disorder in Dublin and will lead to tightening up on those intent on creating trouble at matches abroad. As someone who travels regularly on the train from London to Dover, and Dover to London, I have experienced at first hand the dreadful and shameful behaviour in which a small number of so-called supporters engage when they join the train on their return from a continental football match. Frankly, I wonder how they can afford to pay to go all that way and get drunk.
I am aware that the behaviour of players has also caused concern. It is, of course, extremely regrettable when players, who should be setting a good example to young supporters, become involved in loutish or criminal actions. Allegations of match-rigging made against a few players are being thoroughly investigated by the police and it would therefore not be right for me to comment further on this issue. When footballers break the law they will be dealt with by the courts like anybody else, on top of which they are also likely to be penalised by their clubs and the Football Association.
As the noble Lord, Lord Dean, said, several players have been banned from games this season as a result of their behaviour off the pitch, while on the field of play referees are now penalising fouls and dissent more severely. I am confident that the Football Association is aware of its responsibilities to ensure proper behaviour at all levels of the game. I appreciate that during a game emotions and adrenaline run high, and winning is
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important, but so are honesty, respect and fair play. Like the noble Lord, Lord Stallard, I want those to be the qualities that shine through to supporters young and old.
It would be wrong not to,
"Always look on the bright side of life";
and there are also several reasons to be optimistic about the future of our national game. Attendances at football matches have gone up every year since the 1986–87 season and arrests at league games have gone down by 30 per cent. over the past five years. A recent survey of Premier League spectators has shown that going to matches is increasingly becoming a family affair with a third of supporters going as part of a group of both men and women and almost a quarter taking children with them. Some other sports have long been more family friendly and this is a trend which I heartily welcome.
The vast majority of fans say that grounds have improved and are now more attractive to families and children. Although the Premier League's contract with BSkyB and the BBC was criticised by some people, the majority of fans believe that television coverage has improved. More than three-quarters of fans approve of recent changes to top stadia and only 18 per cent. disapprove the move to seats.
Returning to the question of television and television rights, the Government believe that the governing bodies are best placed to decide what is in the interests of their sport. My noble friend Lord Aberdare explained the sums of money that have been spent on major football ground development projects since the Taylor Report. He is right to be proud of the contribution of the Football Trust. The noble Lords, Lord Donoughue and Lord Howell, and my noble friend Lord Aberdare mentioned that the National Lottery had harmed the income of the pools companies and hence the football clubs themselves. The Government have already made changes to the rules affecting the pools companies and reduced the level of duty. I can assure your Lordships that the Government continue to watch the situation closely.
UEFA have demonstrated their confidence and faith in English football by inviting England to host the 1996 European Championship Finals, known as Euro 96. Both the Department of National Heritage and the Home Office are actively assisting the Football Association in its preparation for what promises to be a celebration of European football. My ministerial colleagues at the Department of National Heritage have held a number of meetings with football governing bodies and impressed upon them the need for football to be seen to be putting its house in order. It is clear that that is being done.
The noble Lord, Lord Donoughue, queried the need for a Chester-style inquiry or an independent monitoring unit. We are not convinced that that is necessary. Football governing bodies are taking action. I have listened carefully to your Lordships but do not believe that there is anything further which it would be appropriate for the Government to do at this stage, though we shall certainly continue to monitor events closely and in conjunction with the game's governing bodies. I can assure the noble Lord, Lord Howell, that I shall ensure that all Ministers read his golden words and those of other noble Lords. Football has been one of our

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most important games for over 100 years and I have no doubt that as we approach a new century it will continue to receive the public's support long into the future.
8.23 p.m.
Lord Donoughue: My Lords, I thank all noble Lords for participating in what has been an excellent debate and I thank the noble Baroness for her full and helpful reply. She will note that some in the House regretted the absence of the Minister. I am sure she will pass to him the House's concern regarding the inadequate application of the law and of certain regulations in specific areas. I am sure also that the noble Baroness will note the anxiety in relation to the media dominance and the way football is media driven, and our regret that where Rupert Murdoch is concerned, the white flag appears to be flying permanently over Downing Street. However, I note that we must give way to dangerous dogs, which I assume refers to Millwall Football Club. I therefore beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Dangerous Dogs (Amendment) Bill [H.L.]
8.25 p.m.
Lord Houghton of Sowerby Lord Houghton of Sowerby My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Houghton of Sowerby.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [Discretion of court to deal with dog other than by destruction order]:
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Houghton of Sowerby: I beg to move that Clause 1 shall stand part of the Bill.
In doing so, I wish to remind the Committee that we have all been here before and we have studied this matter with great care over a considerable length of time. It may be that from the point of view of the noble Baroness, Lady Blatch, these debates are becoming a little tedious; from my point of view they are becoming more dispiriting. This is a further attempt to ask the Government to look favourably upon some alleviation of the severity of the Dangerous Dogs Act 1991.
We are now in the fourth year of the operation of the Act. The Government have no wish, or no intention, of tabling any amendments to the 1991 Act. Therefore the attempts that are made to make changes in the Bill are met with blank refusal to entertain anything that means legislation to alter the terms of the Act. The truth of the matter is that the Government are politically too weak to face the possible criticisms they would meet from the tabloid press if they weakened the Act in any way. They want to stick to the doctrine that the greater the severity
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of the punishment, the greater the deterrent. That philosophy has governed the policy of the Home Office on criminal law for some time.
There are two views on that. It is arguable whether in fact members of the public who are owners of dogs which may come within the terms of the 1991 Act are disposed to use stratagems and arguments and devices to escape their obligations, unless one takes into account that there is a definite sentence of death provided for for offences under the Act. I do not believe that that is a greater deterrent than if we were to seek a little more co-operation.
This clause proposes to do one thing and one thing only: to remove the mandatory sentence of death from the 1991 Act, to sweep it away entirely from the mandate given to magistrates in England and Wales and to sheriffs in Scotland. Clause 1 of the Bill deals with the abolition of the death penalty and in particular with the alternatives that are provided in Clause 1 to mandatory destruction in Section 1 of the 1991 Act. It would still be possible for the court to issue an order for destruction but it would be in its own judgment, not under mandate. It would not be required to do it, as it is under the present Act. The power would rest with them in suitable cases to order the destruction of a dog. I am dealing now with the pit bull terrier aspect of the problem. Equally, in their own judgment, they could decide that an option should be given to the owner of exemption under the conditions already involved for the exemption index, and on completion of all the treatment necessary to qualify for that.
In those circumstances, it seems that a suitable alternative is on offer to those on whom otherwise a mandatory death sentence would be imposed. There are difficulties of administration about this, but I do not see any reason why they should not be overcome. For example, it would require that the index of exemptions which already exists and which was closed on 31st August 1991 should be available to be reopened for particular dogs on particular occasions on an order of a court. That responsibility for opening the index would rest with the Home Secretary. It is important that the Home Secretary should have the power to admit late entry to the index in order that such cases can be provided for.
We believe that the powers exist. At any rate, the noble Baroness, Lady Wharton, will move an amendment to ensure that the power will rest in the hands of the Home Secretary to reopen the register to admit cases selected by the court for this treatment. This would be more humane and in particular it would be so appropriate to most of the cases that are coming to the courts at the present time. Those cases do not concern pit bull terriers: they are crosses. They are of the type provided for in the Act, and dogs of the type known as pit bull terriers face the same penalty under Section 1 of the Act as a pit bull terrier itself.
I think any expert will advise the Home Office that there is the greatest difficulty in many cases in deciding whether a dog is of the type of a pit bull terrier. If it is of the type, then at the present time an automatic issue of a destruction order is made. The courts, by a majority of magistrates at any time coming to the conclusion that

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a dog is of the type, are thereby obliged to issue a destruction order. That is the present position. The cases that are being fought in the courts at the present time are those where owners are disputing that their dogs qualify for the death sentence on the grounds of being of the type. It is in such cases where there may be actually a division of opinion in the court itself, and certainly in most cases a division of opinion between experts who believe they can identify dogs of the type and classify them with some confidence.
Some dogs are having destruction orders imposed upon them on the decision of a stipendiary magistrate sitting alone and hearing the case alone. It is a peculiar coincidence that on the occasion of the Second Reading of the Bill a message came from a court in Scotland which was making some very harsh criticisms of the Act. This morning in the Glasgow Herald we find another criticism of the Act by the sheriff court in a particularly difficult case where a young man pleaded guilty to being in possession of an unregistered pit bull terrier but later sought leave to change his plea, was granted leave by the High Court, went back to the sheriff court and has been acquitted of the charge made against him. It is an extraordinary situation which is arising and giving many grounds for criticism of the administration.
I think it is appropriate for me to add one word. If we do not get from the noble Baroness an indication of a more favourable approach to this matter, we shall have to seek other means of getting this issue brought before the public and before your Lordships' House. I refer in particular to the idea of a Select Committee of your Lordships to inquire whether this Bill should make progress. In the circumstances, we should then have evidence and we should be able to get information about the practical side of what has been going on for four years. In those circumstances, we should abandon the Bill later.
Clause 1 agreed to.
Baroness Wharton Baroness Wharton moved Amendment No. 1:
After Clause 1, insert the following new clause:
("Amendment of power to make exemption scheme
. After section 1(5) of the 1991 Act (which enables the Secretary of State to make a scheme exempting, subject to compliance with certain conditions, persons from the absolute prohibition against having possession or custody of pit bull terriers and other designated types of dogs) there shall be inserted—
"(5A) A scheme under subsection (5) above which specifies a time limit for the making of an application for exemption in respect of a dog shall make provision for an application to be made out of time in any case where a court has granted leave under section 4(1) (c) below for such a late application to be made." ").
The noble Baroness said: I beg to move Amendment No. 1. Clause 1, which we have just passed, cannot become effective if there is any doubt about the powers of the Home Secretary to reopen the list of exemptions in the case of particular dogs in certain cases which could be spared mandatory destruction by the provisions of this Bill. This amendment removes any doubt as to the powers of the Home Secretary to accept late entries to the list of exemptions—that is, dogs which comply with the conditions of Clause 1 and are ordered by the
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courts to do so. I should like to make it clear that dogs will only be given late entry to the exemption list by the courts from whom this Bill removes mandatory sentencing under the principal Act and returns to the courts their historic right to exercise some discretion within this area of their jurisdiction.
No dog dealt with under this Bill will be returned home without satisfying all the conditions which apply to all other dogs granted exemption under the 1991 Act. Only neutered dogs given the full treatment for exemption will be returned to their owners. The dogs concerned will be given late entry to the exemption list under this Bill. This amendment makes sure that the Home Secretary has the necessary power to enable that to be done when he receives an order from the court to that effect. For the removal of any doubt about that, I beg to move this amendment.
Lord Hayter: In supporting the noble Baroness, Lady Wharton, in a way my thoughts go back to an earlier part of this evening when we had a debate on the relationship between local government and the national government. In the context of this Bill we are really debating the relationship of local magistrates with that of the national government once again. It has been made clear that we are trying to do the best we possibly can to make sure that there will be no repetition of appalling accidents which sometimes happen in the context of dangerous dogs. That is why we have gone out of our way—I am told, perhaps unnecessarily, legally—to make sure that the Secretary of State has a position in relation to this Bill. I am glad to support the amendment.
Lord Leigh: Speaking as an owner of a Staffordshire bull terrier, occasionally mistaken as a pit bull terrier, the whole point of not giving discretion against the mandatory death sentence is that it penalises the good owner as well as the bad. No breed of dog can be classified as bad. More often than not it is the owner who should be put down, not the dog.
Pit bull terriers are in fact an outcross of Staffordshire bull terriers who are reared and kept by the Staffordshire miners—who are now few and far between—especially for fighting. It is how the dog is brought up that determines how its character is going to develop. My "Staffy" is called Sir Caspar Weinberger, who I got as a four-month old puppy from Grantham, so perhaps I should have called him, "Thatcher". But with all due respect to the noble Baroness, I thought at that time it was too obvious and so I called him "Caspar Weinberger" after the American senator who was very popular then and in all the news bulletins.
A fellow American who claims to be a cousin of mine, alleged that he knew the real Caspar Weinberger and took back a photograph of my dog to show his namesake. I did not then hear from my cousin, who had previously been a regular correspondent, for nearly three years; but out of the blue he sent me a card last Christmas. There must be a lesson in that somewhere. I am trying to reply to him and other overseas friends, with a general letter to cover Christmas, etcetera, but I admit that I have not managed it yet. Perhaps this speech will prod me into action.

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Be that as it may, my Caspar Weinberger has the sweetest nature and in Putney, where I am now domiciled, it is not me or my health who the locals enquire after, it is always Caspar, which makes his owner feel quite jealous. In fact, many of the locals call out his name at distances up to 100 yards or so when they see him approaching with me, provided he is loose on the common. I try—I do not always succeed —to greet everybody I see on a regular basis. Sometimes strangers approach me and ask, "Is he dangerous?" or similar words, to which I always reply, "He will not hurt you, but he might kill you with kindness". He has a fearfully long tongue, but all he wants to do is lick you.
Caspar has been police guard dog, trained by a top professional dog trainer who has won the Grand National of dog training on several occasions. He had never trained a Stafford before, but he told me that Caspar had the hardest grip of any dog he had ever trained. The dog trainer reckoned that if anyone attacked me, or any member of my family, they would be dead in a minute-and-a-half if Caspar got a grip on them.
I have met two pit bull terriers and their owners on separate occasions. One was nasty and vicious, and his owner appeared the same. The other pit bull was a lovely dog and the owner, on brief acquaintance, appeared a nice chap, too. Some dogs have a blemish or a quirk in their character. I also had a Rottweiler called Argos B. Eagleburger—I was heavily into the American Senate at that time—which I brought up from a puppy with Caspar and they were inseparable. They were both full dogs and they used to spend most of their time buggering each other.
Unfortunately, although he was like a great cuddly bear most of the time, he had a quirk which is common to that breed—so I was told by my vet—which meant that he occasionally went berserk. After he had attacked a third blameless dog in the park in the space of two years, I had to have him dispatched to his forefathers as I feared that it might be a child next.
There must be an escape clause in this Bill to protect the innocent owner. I hope that I have shown by my action in the case of my Rottweiler that responsible owners should be given discretion from the wholesale slaughter of their friends and pets. After all, dogs are said to be man's best friend and Caspar Weinberger vies with my wife as mine.
8.45 p.m.
The Viscount of Falkland: From these Benches I support the main drift of this clause which is that the Act should have, by common consent throughout the country among people who have any interest and care about dogs, a discretion given to the courts in order to decide whether dogs, in both Part I and III of the Act, should be destroyed.
What the noble Lord, Lord Leigh, just said is very useful because when this legislation came about—prompted, quite rightly, by an enormous outcry in the popular press because of unfortunate incidents involving very serious injury to people, and in particular children—there was a general feeling that all was not well in the dog world and that legislation was required.
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Personally, I do not argue with the motivation behind the Government's legislation in this area and neither do I disagree with the RSPCA which has expressed publicly the view that they wish that pit bull terriers did not exist. Understandably, the Government were much moved by the fact that many of the pit bull terriers were brought here expressly for fighting and were often used by criminal and irresponsible elements in quite improper ways, such as a form of protection against police raids in search of drug dealing.
As has been shown, the reality is that there are responsible owners like the noble Lord, Lord Leigh, who own pit bull terriers and who are responsible owners. They have little or no trouble with them, particularly as they are now subject to the provisions of the Act, which are very rigorous and, some may say, draconian.
I would only disagree with the noble Lord, Lord Houghton, when he says that the Government must be concerned about the reaction of the popular press if they accept the new clause. I do not agree with that because most of the popular newspapers which previously urged the Government to act are now carrying stories expressing great concern about cases where dogs have been taken into custody and given the mandatory sentence for infringements where there has been evidence that certain special situations arose, such as a muzzle being removed or a dog not being registered according to the Act. In the view of most people, that is where discretion should have been allowed to apply. That is what the new clause is all about. I support it, and I hope that the Government will do likewise.
Lord McIntosh of Haringey: The procedures of this House allow for debate between Second Reading and the Motion that the Bill do now pass only on specific issues: amendments before the House and, at Committee stage, the Motion that the clause stand part of the Bill. Therefore, I must ask for the indulgence of the Committee if I take the opportunity of this amendment to refer back to something that my noble friend Lord Houghton said on the Motion that Clause 1 stand part of the Bill because I think that it is important and raises an issue that has arisen since Second Reading. Specifically, my noble friend said that he thought that the issue behind the Bill ought to be referred to a Select Committee of the House in order to enable the issues to be considered in a way that is not easy to achieve through Public Bill procedures.
I am advised that on page 95 of the Companion is the provision that Public Bills may be committed to Select Committees other than Public Bill Committees at any stage between Second and Third Reading. There is no Motion of that kind before the House, but I thought that it would be as well for me to put on the record the fact that my noble friend would be entirely within his rights if he sought at any stage between now and Third Reading to move that the Bill be committed to a Select Committee. That would be entirely in order.
Following that, I think it would be helpful if that were the case because I have had the benefit of an enormously helpful letter from the Minister, dated 20th March, following Second Reading and my request that there should be better statistics about the practical workings of the Dangerous Dogs Act 1991. I express my gratitude now to the noble Baroness—I have not done so in the form

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of a written reply—for the care that she and her officials have taken in seeking to provide such evidence as is available. However, at the end of that exercise, the evidence is not conclusive. It indicates to me that, on the whole, the Act is working well and that the provisions—the "draconian" provisions, as they have been described—may well have proved necessary. However, there is enough room for doubt and enough room for discussion of the evidence to make me say that if my noble friend were to move at any time that the Bill should be committed to a Select Committee other than a Public Bill Committee, I personally, speaking from this Dispatch Box, would support him.
The Minister of State, Home Office (Baroness Blatch): Perhaps I may respond briefly to the helpful point which has just been made by the noble Lord, Lord McIntosh. It would be wrong of me to pre-empt the response of the House to such a Motion and, in the absence of such a Motion, I do not wish to do that at this stage. The noble Lord is absolutely right—it would be for the House to make a determination. As is the convention in your Lordships' House, on behalf of Her Majesty's Government I shall not oppose the amendment.
Lord Houghton of Sowerby: I think that we are getting into a bit of a tangle in terms of order. The Question before the Committee at present is, as far as I can gather, that relating to the new clause which is to follow Clause 1 and which was moved by my noble friend Lady Wharton. The Question that the new clause be added to the Bill has not yet been put, so we are diverting from the mainstream of the discussion on that new clause to deal with other matters—and I am bound to take responsibility for having raised them myself. The new clause that we are considering at the moment is intended to give the Home Secretary the power to reopen the index of exemptions which was closed on 31st August 1991 by opening it on an order of a court given to him for particular cases brought forward under the new Clause 1 of the Bill—
Baroness Blatch: I am most grateful to the noble Lord for giving way. As I made it clear that I shall not oppose the amendment, it is my understanding that the Committee will probably accept it. But, again, it would be presumptuous of me to pre-empt the outcome of the decision.
Baroness Wharton: Finally, perhaps I may thank the Minister for her response and all noble Lords who have spoken. I commend the amendment to the Committee.
On Question, amendment agreed to.
Clause 2 agreed to.
The Viscount of Falkland The Viscount of Falkland moved Amendment No. 2:
After Clause 2, insert the following new clause:
("Transitional provisions
.—(1) This Act shall apply in relation to cases where proceedings have been instituted before, as well as after, the passing of this Act.
(2) In a case where, before the passing of this Act—

(a) the court has ordered the destruction of a dog in respect of which an offence under section 1, or an aggravated offence under section 3(1) or (3), of the 1991 Act has been committed, but

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(b) the dog has not been destroyed,

that destruction order shall not have effect but the case shall be remitted to the court for reconsideration and the court shall make any order in respect of that dog (including an order for its destruction) that it has power to make under section 4 of the 1991 Act, as amended by section 1 above.").
The noble Viscount said This new clause follows logically on the new clause that we have just debated. It gives the owners of dogs who have already been sentenced by the courts at the time when the amended Act comes into force the right to seek the discretion of the court under the terms of the amended Act. That will achieve a total absence of mandatory destruction—not only for new cases, but for cases which are already going through the courts. I beg to move.
Lord Houghton of Sowerby: The new clause deals with the transitional arrangements. They are new to this Bill, but they were included in the Bill that was passed by the House last Session. The reason why the transitional arrangements were left out of this Bill was that we decided to shorten the Bill in the hope that in the ballot for Private Member's Bills in the House of Commons an honourable Member would take up the Bill and ventilate its provisions in that House. We thought that it might help if the complications of the transitional arrangements were not included in the Bill originally, but introduced at Committee stage. Therefore, we have to introduce into this Bill the transitional arrangements that were in last year's Bill. They are set out in the new clause which we seek to insert after Clause 2.
We must have transitional arrangements otherwise we shall not be able to deal with the dogs which are already in police custody or going through the courts. The transitional arrangements provide that all dogs which are in police custody, which have been tried and upon which a verdict has been given shall not undergo the sentence of death whatever stage their case has reached. They shall have the right to return to the court for consideration of applying to them the option that Clause 1 proposes to give to all future cases involving pit bull terriers.
Under the transitional provisions, no further mandatory destruction orders shall be carried out. Any destruction orders that are issued will be dealt with by the courts to which reference was made in deciding whether the mandatory destruction order should be confirmed in the independent judgment of the court or whether the option of being granted exemption under Clause 1 should be applied to them.
The process sounds more complicated than it is, but it amounts to the following. Anyone on whose dog a mandatory death sentence has been pronounced should be able to appeal against that and seek the option that is given to all new cases that the courts decide. That is a simple act of justice and not of retrospective action under the conditions of the old law.
My noble friend Lord Falkland, who moved the amendment, provides for that and there is no need to vary the measure as provision is provided for all cases. Nothing is automatic. The decision of the court would be needed to decide the future of dogs already waiting on death row and so bring to an end some of the most

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tiresome and grievous cases that have been before the courts for many years. Tomorrow a case will come before the court involving the dog, Dempsey, who has been in police custody since the end of 1991. The case is not finished yet.
If the Bill had been passed and were available for action we could have asked for such a case to be referred back to the court to decide whether the death penalty should be reimposed or whether the option of being made a registered dog should be applied. I hope that the Committee will support Amendment No. 2, which contains the transitional provisions.
On Question, amendment agreed to.
Clause 3 agreed to.
House resumed: Bill reported with amendments.

Proceeds of Crime Bill
9.4 p.m.
Lord Chesham: My Lords, I beg to move that this Bill be now read a second time.
When I was asked whether I would take this Bill through your Lordships' House I thought that it would have some humourous reflection on my Antipodean past. I am not certain that that was not so. However, crime, and organised crime in particular, is one of the greatest menaces facing this country and the international community generally. Therefore, I am proud to have this opportunity to take forward a Bill which impacts so directly on all forms of serious crime.
This House is justifiably most grateful to the honourable Member for Exeter, who was lucky enough to be successful in the Private Member's Ballot, for bringing forward the Bill in another place and for piloting it so skilfully and successfully through that place. If a real impact is to be made in the war against crime there must be determined action on many fronts. The enforcement agencies must have the investigatory powers that they need to bring offenders to justice. The courts must be able to impose tough prison sentences where appropriate and, equally importantly, strong powers of confiscation must be available to deprive criminals of the proceeds of their crimes.
The Bill addresses the investigatory and confiscatory elements of the problem. There is the clear moral imperative that crime must not pay and must be seen not to pay. There is also the deterrent effect of confiscation. Criminals will not relish the prospect of a long prison sentence if they have no nest-egg to look forward to on their release.
Additionally, there is an increasingly and worryingly important practical element to confiscation: the need to stop professional and organised criminals from reinvesting their profits in ever more lucrative criminal operations and activities.
The Bill amends Part VI of the Criminal Justice Act 1988, which already provides the courts with the power to confiscate the proceeds of all serious offences, other than drug trafficking and certain terrorist offences which are dealt with in separate legislation. The necessity for
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such amendment is that Part VI of the Criminal Justice Act 1988 has not worked effectively to deprive criminals of their proceeds. All too often we read reports in the media about criminals who have flouted the law and managed to retain large sums of money accumulated from crime. The same depressing picture is painted by the Government's own statistics which show that in the financial year 1993–94, only £265,600 was realised by confiscation orders under Part VI of the Criminal Justice Act 1988. By way of comparison, some £5.3 million was realised from drug trafficking confiscation orders for the same period.
The amount confiscated barely scratches the surface of the profits which are being made from crime, other than drug trafficking; for example, from crimes such as the trade in pornography, fraud, corruption and from forms of theft, such as car rigging, from which we know millions of pounds are being made. Something must be done to reassure the public that criminals are not being allowed to get away with the proceeds of their crimes.
I stress that the fundamental principle of confiscation orders under the 1988 Act, as amended by this Bill, remains intact. An order can be made only following a conviction. Broadly speaking, the Bill extends to crime generally the more effective confiscation scheme currently applicable to drug trafficking, subject to a number of important safeguards to which I shall turn in due course. It provides more effective powers from the start to the finish of the confiscation process, from specialised powers for the police and Customs at the investigative stage to more effective confiscation procedures in the courts and improved enforcement of confiscation orders once they have been made.
I should like now to deal with the main provisions in some detail. The first of the two key provisions of the Bill is contained in Clause 1. I should like to draw your Lordships' attention to the changes effected by the clause to the Criminal Justice Act 1988. It contains two very important changes to that Act. First, the courts are obliged to make a confiscation order in the full amount of the defendant's benefit or the amount of realisable property available for confiscation, where that is less.
I am afraid that there is some evidence, referred to in the Home Office report on which this Bill is based, that the courts have not always made a confiscation order even in cases where one was clearly merited or has made an order in an amount lower than the defendant's benefit from crime. I do not believe that it is acceptable for the legislation to permit a defendant to retain any of the proceeds of crime.
The obligation on the courts as to the amount of the confiscation order would be reduced only in the circumstances in which the court is satisfied that a victim of any relevant criminal conduct has instituted or intends to institute civil proceedings against the defendant in respect of any loss, injury or damage sustained in connection with that conduct.
The second important change is that it will now be possible for the courts to make a confiscation order under Part VI of the Criminal Justice Act 1988 for less than £10,000. Until now, criminals have known themselves to be secure from such an order if it appears that they have benefited from crime to the tune of less than £10,000 or

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have retained less than £10,000 worth of their ill-gotten gains. That was always an artificial threshold. I am sure that your Lordships will welcome this change. There will undoubtedly be cases where a confiscation order in an amount lower than £10,000 is appropriate.
At present, Part VI of the Criminal Justice Act 1988 enables the courts to confiscate only the proceeds of any offences of which a person has been convicted, thus including the proceeds of any offences taken into consideration by the court in the same proceedings. That is the root cause of the weakness of the confiscatory powers in the 1988 Act and explains why so little has been confiscated since the Act came into effect in 1989.
The difficulty is that in many cases the offences charged and for which there are convictions represent only a minute proportion of those actually committed by the offender. For example, it is an offence to produce one pornographic video. A pornographer may be producing thousands of videos per month but when he is arrested, he will probably be charged with only a few offences by way of specimen counts. The consequence is that the court can confiscate only the proceeds of the specimen offences which represent only a very small proportion of the criminal's true profits. That is wrong and the fundamental purpose of the Bill is to correct that situation.
The drug trafficking legislation overcomes the difficulty of multiple offences by enabling the court to assume that the property which a defendant holds or which has passed through a defendant's hands in the previous six years is the proceeds of crime. The defendant is then required to account for its lawful origin, otherwise an amount equal to the assumed proceeds may be confiscated.
Those provisions were regarded as quite radical when they were first proposed a decade ago. But they have since worked well, and fairly, in practice in relation to the drug trafficking legislation. I am convinced that those provisions should be extended so that they can be used against crime generally. The relevant provisions are to be found in Clause 2.
Because the Bill bites on acquisitive crime generally, Clause 2 takes a slightly different approach from that to be found in the drug trafficking and terrorism legislation. Clearly one would not wish the strong powers encompassed in Clause 2 to be brought to bear in trivial cases and the Bill incorporates a number of safeguards to prevent that from happening. First, under drug trafficking legislation, the court has no option but to make all the assumptions set out in that legislation in respect of a defendant's property. Under the Bill, the court will have the discretion as to whether it makes one or more assumptions—or, indeed, any at all—in a particular case.
A second important safeguard is that the court will only be able to make the assumptions where the prosecutor tenders written notice that the case is an appropriate one for them to be made. The third safeguard is that offenders appearing before the courts for the first time and convicted of a single offence are explicitly excluded from the powers. The assumptions will arise under the Bill where the defendant has a previous conviction of an acquisitive offence, or is convicted of two or more acquisitive offences in the present proceedings.
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Those vital provisions were examined in detail in Committee in the other place. I have to say that the general feeling was that the Bill as originally drafted was over-cautious. For example, it was suggested in Committee that the courts should be required to make the assumptions as in the drug trafficking legislation. In the event, that particular proposal was not taken forward, but Clause 2 was amended.
In its original form, Clause 2 enabled the assumptions to be made if the defendant had been convicted of four or more acquisitive offences in the same proceedings— a figure reflecting the number of sample charges which frequently appears on the indictment. That threshold was felt to be too high and the number of offences for which a person must be convicted has been reduced from four to two.
That is the heart of the Bill. I have spoken at some length to the first two clauses and so I shall address the remaining clauses more briefly, which I am sure will be to everyone's relief, although they contain some very interesting and useful measures.
As I mentioned, the Bill provides more effective powers from the beginning to the end of the confiscation process; that is to say, from the initial investigation into the proceeds of crime to the enforcement of the confiscation orders. Although the new investigative powers are to be found towards the end of the Bill, it may be convenient for your Lordships if I deal with them before the other important provisions as, in practice, the investigative process obviously precedes confiscation.
The police and Customs will, in most cases, wish to carry out a financial investigation into whether a person has benefited from crime, or into the extent of any proceeds of crime and their whereabouts. Clause 11 enables them to obtain by means of a production order issued by a circuit judge any relevant material, such as bank records, to assist them in such an investigation. That power is already available in the drug trafficking legislation. Until now, the enforcement authorities have had to rely on powers provided by Schedule 1 to the Police and Criminal Evidence Act 1984. From the point of view of asset tracing, the new clause represents a considerable improvement on the powers in the 1984 Act because it will enable material to be collected at a very early stage of a financial investigation.
Clause 12 also emulates the drug trafficking legislation in enabling our enforcement agencies to obtain a search warrant at an early stage of a financial investigation. Clause 13 will enable materials to be obtained from government departments under circumstances where it is currently only possible to do so in the case of drug trafficking. Taken together, those new powers represent a very useful package. I know that they will find strong favour with financial investigators in particular.
I have already spoken about the confiscation process itself, so I shall move on to the effect of the Bill on the enforcement of confiscation orders made under Part VI of the Criminal Justice Act 1988. At present, the service of a term of imprisonment in default of payment of a confiscation order expunges the order and the defendant is no longer required to pay the order. In effect, the defendant is provided with a choice between paying the order or serving a term of imprisonment. In many cases,

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that term would be served by a person who is already serving a substantial term of imprisonment anyway. That defeats the whole purpose of confiscation: there should not be any option between paying or not paying.
Therefore, Clause 8 of the Bill allows the confiscation order to be enforced regardless of the fact that the defendant has served a term in default of payment. Clause 9 also tightens up confiscation order enforcement by preventing criminals from benefiting from delaying payment and thus drawing interest on their ill-gotten gains. Clauses 6 and 7 allow the prosecutor to return to the court within six years of the defendant's conviction to obtain a revaluation of the confiscation order where new evidence comes to light to show that the defendant's benefit was greater than previously thought.
Clause 14 was added to the Bill in another place. It remedies a defect in the Prevention of Terrorism (Temporary Provisions) Act 1989 and the Criminal Justice (International Co-operation) Act 1990 by making it quite clear that a restraint order may be obtained from the High Court in this country in advance of a restraint or forfeiture order being made in a country overseas. It is clearly very important that in terms of international co-operation swift action should be available in this country to prevent a criminal from dissipating his ill-gotten gains.
In conclusion, this Bill narrows the gap between measures currently available to confiscate the proceeds of drug trafficking and the much more limited powers available in respect of other, equally lucrative, crimes. So wide a gap is not defensible, and that was certainly the view of honourable Members on all sides in the other place. As some noble Lords will be aware, the reception accorded there to this Bill was particularly warm, and I firmly hope that your Lordships will see it in a similar light. I beg to move.
Moved, That the Bill be now read a second time.— (Lord Chesham.)
9.20 p.m.
Lord Harris of Greenwich: My Lords, we support this Bill. I do so without a great deal of difficulty because I was involved in the earlier debates which we had in this House on the measure to empower the courts to confiscate the assets of convicted drug smugglers. Indeed on that occasion, like the noble and learned Lord, Lord Denning, I did not think that that measure went far enough. Subsequently there have been some improvements to that legislation which I welcome.
Since then we have also had the 1988 Criminal Justice Act which enables the courts to seize the proceeds of criminal activities of people convicted of other indictable offences. As the noble Lord, Lord Chesham, has said, this Bill goes significantly further than the 1988 Act. It imposes a duty on the court, on the application of the Crown Prosecution Service, to determine whether a defendant has benefited from a course of criminal conduct, and if so, to decide whether it is appropriate to make a confiscation order. This can be done only—as the noble Lord reminded us a few minutes ago—where there have been convictions for previous relevant offences, or where the defendant has
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been convicted of at least two in the current proceedings. That is fine as far as we are concerned. But having said that, I want to ask two questions of the noble Baroness because, with great respect to Sir John Hannam and the noble Lord, this is a Home Office Bill, drafted by Home Office lawyers and the parliamentary draftsmen. I welcome that because I would certainly not necessarily be quite so enthusiastic about a genuine Private Member's Bill dealing with issues as complex as those which are set out in this measure.
The questions which I want to put to the noble Baroness concern two particular areas. First, there is the issue of monitoring and the guidelines. The colleague of the noble Baroness in the House of Commons, Mr. Maclean, told the House of Commons on 31st March that the Home Office intended to be closely involved with the CPS in the formulation of the guidelines. Apparently, the prosecution authorities are to be asked to monitor the kind of cases that are to be dealt with under Clause 2 of this Bill. I welcome that, as I do Mr. Maclean's statement of 31st March, when he said in another place that the Government do not want the powers to be used in trivial cases.
It would clearly be foolish in the extreme to spend an immense amount of public money on CPS fees and those of other lawyers and accountants in order to secure the seizure of a few hundred pounds' worth of a defendant's assets. But if we are to ensure that ill-judged decisions are not taken by, say, a rather junior and inexperienced prosecutor, what undertaking can the noble Baroness give us about the manner in which these decisions will be taken within the Crown Prosecution Service? As the noble Baroness may be aware, we were given clear assurances on this question when we discussed this precise issue, in reality, on the Bail (Amendment) Act which was a Private Member's Bill which came from the House of Commons and to which we devoted quite a significant amount of time. We had to dispose of a number of formidable difficulties while discussing the Bill.
That particular Act gives a prosecutor the power to require a defendant to be held in custody for a limited period until a judge has determined the prosecutor's appeal against a magistrates' court decision to grant bail. On the instance of the prosecutor, a person can, in those circumstances, be held in custody, notwithstanding the provisional decision of the magistrates' court to give him bail.
On that occasion assurances were given on behalf of the CPS that such decisions would not be made by a prosecutor who was not adequately experienced. If we are to avoid misjudgments being made as a result of this legislation, can a similar undertaking be given today? In other words, can we be sure that the people who make the decision to make an application of this character have substantial prosecutorial experience behind them?
On the general question of monitoring, how precisely is this to be done? Will it simply be a review by senior management, or is it intended to have a limited research programme? Perhaps the noble Baroness will deal with that matter when she replies to the debate in a few moments.

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Secondly, I want to turn to the last sentence of the Bill's explanatory memorandum. Here it is stated:
"The Bill is not expected to have any effect on public service manpower".
That is a remarkable statement. In my view, it does not happen to be an accurate statement. The term "public service manpower" must include the police. The noble Lord, Lord Chesham, gave an indication of the way in which the police would approach the matter as a result of the Bill and the substantial inquiries that would take place. As I indicated, I am not opposed to the Bill; I am in favour of it. However, to say that it will have no effect on public service manpower is manifestly nonsensical, unless it is argued that public service manpower does not include the police.
On a number of occasions there will have to be significant police inquiries, just as there have been in relation to drug trafficking offences. I have had an opportunity to talk to a number of police officers who have been involved in following up cases where drug traffickers have been convicted. I am aware of the immense amount of work which has to be done in order to recover some of those assets. It is quite obvious that the burden of work in these cases can be substantial.
That being so, how can we be told that there is no effect on public service manpower? It would be better to say bluntly that there is an effect, because I regret to say that when many police officers see this Bill there will be derisive laughter at the suggestion that it will have no effect on their resources. Therefore, I very much hope that the noble Baroness will deal with this question, because, as I indicated, having seen the amount of work that is involved in tracking down the assets of drug traffickers, I am clear that there will have to be a significant amount of work in relation to following up the people who have been convicted and where applications have been made as laid down by the Bill.
On this particular point, I fear that there is a temptation for all governments of all political persuasions to minimise the additional calls on resources when they discuss legislation which they favour. I very much hope that that experience will not be repeated in relation to this piece of legislation.
I have made it clear that I am firmly in favour of the Bill. I believe that it is highly desirable, but I should like answers to the points that I have made.
9.30 p.m.
Lord McIntosh of Haringey: My Lords, the Opposition are totally in favour of the Bill and so I do not need to detain your Lordships long. We are grateful to the noble Lord, Lord Chesham, for introducing it in this House. I can confirm that the only interventions made from Opposition Benches in another place were in support of the Bill and the principles underlying it. There was one exception. There was considerable irritation on the Opposition Front Bench about the filibustering tactics of three Conservative Back-Benchers who were not particularly opposed to the Bill but were determined to see off another Private Member's Bill which was to follow. They therefore took up Committee sessions for
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two-and-a-half hours with utterly irrelevant amendments which were a complete waste of parliamentary time. I do not say that simply in criticism of behaviour in another place. That would be improper. I say it simply in the hope that a comparable experience will not befall your Lordships.
The only point that I have to make about the Bill is in confirmation of what the noble Lord, Lord Harris, said. It is a Home Office Bill. It follows a Home Office report. It has been drafted by the Home Office and parliamentary draftsmen. It seems to me an abuse of the procedures of this House that the very scarce parliamentary time available for Private Members' Bills in another place— there is less restriction in this House—should be taken up by Bills for which the Government themselves should be taking responsibility. I regret that it was necessary for the Bill to come to us in this way rather than as a government Bill, as it should be.
Nevertheless, the intentions underlying the Bill, and I am sure the drafting of it, are an advance on the Criminal Justice Act 1988. I hope that the provisions will achieve real benefits, although we must remember that only 2 per cent. of crimes result in convictions before the courts. Therefore the potential scope of the Bill is significantly limited. However, in so far as it will serve a useful purpose, as I believe it will, we support the Bill.
9.31 p.m.
Baroness Blatch: My Lords, this has been a short but interesting debate and I wish to put on record at the outset that the Government are strongly supportive of the Bill. As has already been said, it is a Government-backed Bill. I am most grateful to my noble friend Lord Chesham for taking us so clearly and painstakingly through the details of the Bill. That has relieved me of the duty of repeating what he said.
The Bill takes forward proposals contained in a Home Office report published in 1992. The report in question was the second report of the Home Office Working Group on Confiscation, an interdepartmental working group established in the wake of the 1989 Home Affairs Committee's inquiry into drug trafficking. The working group's first report, published in May 1991, reviewed the operation of the Drug Trafficking Offences Act 1986 and made a number of recommendations for improvements. Those were taken forward in the Criminal Justice Act 1993 and ultimately consolidated in the Drug Trafficking Act 1994, which came into force earlier this year.
The working group's second report examined Part VI of the Criminal Justice Act 1988 and made a series of recommendations and proposals for amending that legislation, many of which are now being taken forward in this Bill.
As your Lordships will see, the Bill is the product of long and methodical preparation. First, the drug trafficking confiscation legislation was reviewed and amended. Then the all crime confiscation legislation in Part VI of the Criminal Justice Act 1988 was reviewed, and a similar process of amendment is under way in this Bill. In this sense, the present Bill rounds off, and provides the culmination to a legislative process that goes back a decade.

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The Government are grateful to my noble friend Lord Chesham for agreeing to take forward this important measure. From the outset, the confiscation legislation has received wide support on all sides of the House. As my noble friend mentioned, this latest Bill was well received in another place, and I am grateful to noble Lords who have similarly given their support to the Bill this evening.
In his opening remarks, my noble friend expounded the main provisions of the Bill in some detail and I shall not detain your Lordships with a repetition of them. I would, however, pick up briefly his reference to the universal threat posed by organised crime. The provisions in the Bill which provide the enforcement agencies with new investigative powers have been drawn up specifically, like their predecessors in the drug trafficking legislation, so that they can be used here on behalf of agencies carrying out financial investigations outside this country. In this way, though it is not immediately obvious, the Bill will make its contribution to international co-operation against crime. I hope, more generally, that authorities overseas will study the Bill very carefully. Many of its provisions might provide a model for others.
It has been mentioned that this is a Private Member's Bill and it is important for me again to put on record that the Government brought forward a number of major criminal justice initiatives in recent years, not least the Criminal Justice Acts of 1991 and 1993 and last year's Criminal Justice and Public Order Act. The latter was rightly regarded as a measure of somewhat gargantuan proportions and the Government took the view, as a result, that a further criminal justice Bill in the present Session of Parliament should be avoided, if at all possible. It so happened that the provisions which now form the basis of the Bill were finalised in readiness for a criminal justice Bill this year, had there been one. The choice was between bringing them forward at a later date and thus delaying them, or finding some other way of enacting them. The Private Member's ballot offered a way forward and we must all be grateful to Sir John Hannam for choosing the Bill over and above the many other competing measures which he will no doubt have considered. I make absolutely no comment about his speech in another place.
I emphasise that the provisions of the Criminal Justice Act 1988 have not acted so as to deprive criminals of their ill-gotten gains as effectively as the Government had hoped. That point was made by my noble friend Lord Chesham. The Bill contains powerful measures to rectify the shortcomings in that Act. The criminals will find it much more difficult to accumulate and enjoy ill-gotten gains once the Bill comes into force. That is something which will be welcomed, not just by your Lordships but also by the public.
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The noble Lord, Lord Harris, referred to manpower. The Drug Trafficking Act 1994 which came into force on 3rd February 1995 no longer obliges the court to make a confiscation order, unless the prosecutor asks for one to be made. Fines will be imposed which will have a substantial effect on the police and court costs. Those savings will be used to operate the new confiscation hearings. If the noble Lord wishes to ask anything further on that, perhaps we can correspond later.
Lord Harris of Greenwich: My Lords, of course I accept what the noble Baroness said. She is entirely right. The point I was making referred to the last sentence of the explanatory memorandum. We are not talking about costs in the normal sense but about manpower resources. The memorandum states that there will be no effect on manpower resources but, as I said a few moments ago, manifestly that cannot be true. The police will have to carry out inquiries and investigations. If they did not, there would be no purpose in having the legislation.
Baroness Blatch: My Lords, I happily agree with the distinction between whether there will be increased activity and whether the activity is a neutral cost when it comes to paying for it.
As to the guidelines, my understanding is that the guidelines are being drawn up by the CPS in consultation with other prosecuting authorities. They have not yet been completed and I understand that the cost for considering confiscation is around £10,000. It is expected that the guidelines will state that a confiscation order should not generally be sought when it is likely to realise less than £10,000. That point was well made by the noble Lord. It is anticipated that such a judgment will be made by a suitable senior official in the Crown Prosecution Service. I hope that the Bill will be given a Second Reading.
9.34 p.m.
Lord Chesham: My Lords, this has been a brief but interesting debate which has achieved a certain amount of clarification. I thank your Lordships warmly for the support which the Bill has received this evening. I commend the Bill and very much hope that the House will grant it a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Statute Law (Repeals) Bill [H.L.]
Reported from the Joint Committee with amendments, and re-committed to a Committee of the whole House; it was ordered that the Bill be printed as amended.
House adjourned at twenty-one minutes before ten o'clock.