HL Deb 14 October 1997 vol 582 cc399-411

3.45 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman)

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.—(Baroness Hayman.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 1 [Power to take account of reserved part of capital receipts]:

[Amendments Nos. 1 and 2 not moved.]

Clause 1 agreed to.

Clause 2 [Power in place of duty to specify amortisation period]:

Lord Bowness moved Amendment No. 3: Page 1, line 20, leave out from ("words") to end of line 21 and insert (" "seven years" substitute "twelve years" ").

The noble Lord said: I apologise to the Minister for not being present when this business was called. I move Amendment No. 2 from the starting position that the less a local authority is in debt the better. Certainly it ought not to be in debt for the purpose of financing revenue spending. Perhaps I may say at the outset that I realise there are circumstances in which some expenditure which would normally be classified as revenue is capitalised in connection with particular major projects. However, this clause appears to be about any kind of revenue spending.

I must apologise to the Committee. In my haste to enter the Chamber I thought that I heard the Chairman of Committees refer to Amendment No. 2, not Clause 2. However, Amendment No. 2 contains similar wording to that of Amendment No. 1 which was not moved. I now understand that Clause 1 has been put to the Committee. I believe I misinterpreted the Minister's look of concern as indicating that I was talking to the wrong amendment.

The Chairman of Committees

For the sake of clarification, I should confirm that I did in fact put the Question on Clause 1.

Lord Bowness

As I said, I thought we were discussing Clause 2 which appears to concern any kind of revenue spending. I hope that the Government will explain why they wish to relax the regime in the way that is proposed and why the greater flexibility of the 12-year period which is proposed in the amendment in place of the seven-year period is considered insufficient.

Perhaps the Minister can tell us on how many occasions the seven-year period has posed a problem in the past. I hope that the Minister will tell us the circumstances in which it is proposed that the power should be used. Have the Government received applications to use this power? Is it correct—as was mentioned in another place—that Thurrock has applied for funding for the costs of reorganisation? I read carefully what the noble Baroness said at Second Reading. She said, This is a measure to deal with exceptional circumstances, where an authority is facing severe revenue difficulties but has an urgent need to undertake significant revenue expenditure".—[Official Report, 23/7/97; col. 1463.] That is a wide provision. It seems to me that under that formula any local authority which has been imprudent in its financial management may appeal to the Secretary of State to be bailed out. That is perhaps not as far-fetched as it sounds. The worst run authorities may by definition face severe financial difficulties and they may have an urgent need to undertake significant revenue expenditure. Is this proposal a way of avoiding the cap which it appears the Government propose to keep in one form or another? Can the noble Baroness give an assurance to the Committee that where financial difficulties have arisen as a result of mismanagement rather than some unexpected misfortune strict rules will apply? Surely the Government would not countenance helping bad local government escape the consequences of their actions at the expense of the council tax payer.

If this amendment is not accepted by the Government, do the Government have a maximum period in mind? Do they propose to issue guidance on how these new proposals will be implemented? And will that guidance dictate the kind of circumstances in which this clause is expected to operate? Bearing in mind that the capitalisation of revenue expenditure is generally a bad thing which has an adverse effect on the total cost of whatever is involved, it is right that until there are answers and assurances on this point there should continue to be a maximum period even if it is longer than that which currently applies.

I hope that we shall be given some certainty and some clarity on this point. Certainty and clarity are lacking in this Bill in general. On this important issue it is vital that we are given that certainty and clarity. I submit that the whole basis of the Bill is flawed. A commitment was given by the Government in their manifesto to release moneys which had been generated by the sale of council houses. At Second Reading in another place the Minister of State said, In our manifesto we stated our long held commitment to help meet housing need by building new houses and rehabilitating old ones through the phased release of capital receipt from council house sales".—[Official Report, Commons, 17/6/97; col. 119.] We know that not one penny of accumulated receipts is released. We know that this Bill does not apply to future receipts. We also know that this clause, which I now seek to amend, asks us to accept that revenue spending can in effect be capitalised over an unspecified period with unspecified consequences.

It has been said that the Bill deals with the phased release of council house receipts. However, it does not deal solely with council house receipts. The Minister should inform us why a maximum period should not apply as regards this vital issue of costs to the council tax payer. I hope that the noble Baroness will be able to help the Committee. I beg to move.

Baroness Hayman

I shall certainly do my best to respond to the amendment proposed by the noble Lord, Lord Bowness. I believe that he is overly concerned about widespread consequences of what is quite a limited but, we think, useful provision within the Bill. The effect of Clause 2 is to remove the obligation on the Secretary of State, when issuing a supplementary credit approval in respect of capitalised revenue expenditure, to impose an amortisation period not exceeding seven years and to replace this with a power to specify an amortisation period. The amendment proposed today by the noble Lord, Lord Bowness, seeks an extension of the present seven-year period to 12 years. We do not believe that that would give the flexibility that we seek in this Bill.

To be clear, an amortisation period is the time over which amounts must be set aside as provision for repayment of a loan. Local authorities which borrow must always make provision for repaying loans. The Local Government and Housing Act 1989 sets out requirements for the treatment of borrowing. Section 54(5) requires that when a supplementary credit approval is issued in respect of certain capitalised expenditure, the credit approval must specify an amortisation period of no more than seven years.

Making full provision for the repayment of loans over seven years or less is a tough requirement. If the loan was for £700,000 and the amortisation period seven years, the Committee will have no difficulty in working out that the authority would have to find £100,000 from its revenue resources in each of the following seven years. The Government believe that the present requirement to impose an amortisation period of up to seven years is too inflexible in some circumstances. Simply specifying a different maximum period, as proposed in the amendment before us, would not solve that problem. What is needed is a power which is sufficiently flexible to decide on a period for debt provision that is appropriate to the circumstances of the authority concerned. There is no point in imposing on a local authority an unrealistic revenue burden.

The noble Lord, Lord Bowness, referred to the costs of local government reorganisation and the possibility of supplementary credit approvals being authorised in those circumstances. Those costs were certainly recognised by the previous administration and SCAs have in consequence been issued to allow authorities to spread those costs. Several councils have written to the Secretary of State to highlight the continuing burden on revenue as a result of the statutory seven-year limit on the redemption period. The Secretary of State has at present no power to change that even if he considered it reasonable so to do. I stress that we do not seek a power always to extend credit provision. What we seek is the ability to do so in circumstances where that seems reasonable.

I emphasise that the issue of credit approvals and setting of amortisation periods under this measure is not a matter of routine. First, the Secretary of State must issue a direction to a particular authority to allow specific revenue expenditure to be capitalised. Then the Secretary of State will consider whether to issue a credit approval, bearing in mind the implications for public expenditure, the authority's individual circumstances and all other relevant factors. Some of the factors that the noble Lord mentioned in proposing the amendment would certainly be relevant in this regard. If the Secretary of State is then satisfied that it is right to help the authority, he will issue a supplementary credit approval, and for that purpose, unless he decides not to impose an amortisation period, he will decide what period will be appropriate in all the circumstances.

Clause 2 enables the Minister issuing a supplementary credit approval to take careful account of the circumstances of the authority and to choose an amortisation period which is neither too generous nor too onerous. We think that it is a useful flexibility. I urge the noble Lord to withdraw his amendment.

Baroness Hamwee

The Minister has been extremely clear about the regime which will apply when supplementary credit approvals are given in the future. It is important that the Committee takes that point on board. The noble Lord seemed to suggest that an entirely new set of arrangements would allow local authorities unrestrained expenditure. I wish that that were the case. I do not share his views about the need for capital restraint. I suspect that it is spending restraint in general. Spending of capital is a means of investment; it is not money down the drain. It achieves something for each local authority.

However, it is important that there will still be central control. It is for the Secretary of State in the first place to issue the supplementary credit approval; other matters will follow from that. I hope that the noble Lord will not press the amendment, which I regard as regressive.

Lord Bowness

I thank the Minister for her explanation. However, with great respect, I do not find flexibility a sufficient answer. As I stated at Second Reading and when moving the amendment, we are suspicious of the Bill because it flies under false colours. It is supposed to be about the release of accrued capital receipts. It is in fact about the ability of local authorities to borrow. It is supposed to be about council house receipts. It is not in fact limited to that. Clause 2 in particular relates to borrowing.

I hear what the Minister says about individual circumstances. I hear what the Minister says about reorganisation costs. But we have not been told of any circumstances which lead us to believe that the law needs changing. The longer the periods allowed, the greater the cost to the individual council taxpayers. In another place my honourable friend Mr. Chope was accused of paranoia. I fear that I, too, may be accused of paranoia. I draw no comfort from the circumstances described at Second Reading regarding when the power will be used. In moving the amendment I quoted them; I shall not do so again.

We should have had assurances that the consequences of mismanagement by local authorities resulting in severe revenue difficulties—I fully accept that an urgent need to spend may arise; indeed it is likely to arise where there has been severe financial mismanagement—will not be imposed on council tax payers through additional costs.

We have had no answers as to whether the present period of seven years has caused any difficulty. There has been no indication of the number of applications received for longer periods. Since so much about the Bill and the clause is not clear, I wish to press the amendment and to seek the opinion of the Committee.

4.5 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 109; Not-Contents, 126.

Division No. 1
Aberdare, L. Hooper, B.
Ailsa, M. Howe, E.
Alexander of Tunis, E. Johnston of Rockport, L.
Alport, L. Keyes, L.
Anelay of St. Johns, B. Kingsland, L.
Ashbourne, L. Kinnoull, E.
Attlee, E. Lane of Horsell, L.
Beloff, L. Lauderdale, E.
Blatch, B. Liverpool, E.
Bowness, L. Long, V.
Brabazon of Tara, L. Lucas, L
Braine of Wheatley, L. Luke, L.
Brentford, V. McColl of Dulwich, L.
Bridgeman, V. Macleod of Borve, B.
Broadbridge, L. Merrivale, L.
Brougham and Vaux, L. Mersey, V.
Bruntisfield, L. Middleton, L.
Butterworth, L. Miller of Hendon, B.
Cadman, L. Milverton, L.
Campbell of Alloway, L. Mountevans, L.
Campbell of Croy, L. Munster, E.
Carnegy of Lour, B. Mutton of Lindisfrne, L.
Carnock, L. Noel-Buxton, L.
Chalker of Wallasey, B. Norfolk, D.
Chatteris of Amisfield, L. O'Cathain, B.
Chesham, L. Orr-Ewing, L.
Clanwilliam, E. Park of Monmouth, B.
Clark of Kempston, L. Peyton of Yeovil, L.
Courtown, E.[Teller.] Platt of Writtle, B.
Cowdray, V. Rawlings, B.
Craig of Radley, L. Rees, L.
Cullen of Ashbourne, L. Renton of Mount Harry, L.
Renwick, L.
Cumberlege, B. Rotherwick, L.
Davidson, V. Rowallan, L.
De Freyne, L. Saltoun of Abernethy, Ly.
Dean of Harptree, L. Sandford, L.
Denbigh, E. Seccombe, B.
Dixon-Smith, L. Shaw of Northstead, L.
Elliott of Morpeth, L. Soulsby of Swaffham Prior, L.
Exmouth, V. Stodart of Leaston, L.
Foley, L. Stokes, L.
Gisborough, L. Strathclyde, L.[Teller.]
Goschen, V. Strathcona and Mount Royal, L.
Gray of Contin, L. Sudeley, L.
Hailsham of Saint Marylebone, L. Swansea, L
Harding of Petherton, L. Swinfen, L.
Hardwicke, E. Taylor of Warwick, L.
Harlech, L. Teviot, L.
Harmar-Nicholls, L. Thomas of Gwydir, L.
Harrowby, E. Trefgame, L.
Hayhoe, L. Vivian, L.
Hemphill, L. Waterford, M.
Henley, L. Wilcox, B.
HolmPatrick, L. Young, B.
Acton, L. Ashley of Stoke, L.
Addington, L. Avebury, L.
Allen of Abbeydale, L. Barnett, L.
Allenby of Megiddo, V. Bath and Wells, Bp.
Ampthill, L. Berkeley, L.
Archer of Sandwell, L. Blackstone, B.
Blease, L. Kilbracken, L.
Blyth, L. Kirkhill, L.
Borrie, L. Lestor of Eccles, B.
Boyd-Carpenter, L. Lockwood, B.
Bruce of Donington, L. Longford, E.
Callaghan of Cardiff, L. McCarthy, L.
Calveriey, L. Mcintosh of Haringey, L.[Teller.]
Carlisle, Bp. Mackie of Benshie, L.
Carmichael of Kelvingrove, L. Mallalieu, B.
Carter, L.[Teller.] Merlyn-Rees, L.
Castle of Blackburn, B. Milner of Leeds, L.
Cledwyn of Penrhos, L. Mishcon, L.
Clinton-Davis, L. Molloy, L.
Crook, L. Monkswell, L.
Dahrendorf, L. Morris of Castle Morris, L.
Dean of Beswick, L. Murray of Epping Forest, L.
Dean of Thornton-le-Fylde, B. Nicol, B.
Diamond, L. Paul, L.
Dixon, L. Plant of Highfield, L.
Donaldson of Kingsbridge, L. Ponsonby of Shulbrede, L.
Donoughue, L. Prys-Davies, L.
Dormand of Easington, L. Ramsay of Cartvale, B.
Dubs, L. Randall of St. Budeaux, L.
Eatwell, L. Rea, L.
Elis-Thomas, L. Redesdale, L.
Evans of Parkside, L. Richard, L.[Lord Privy Seal.]
Ezra, L. Robson of Kiddington, B.
Falconer of Thoroton, L. Rochester, L.
Farrington of Ribbleton, B. Russell-Johnston, L.
Gallacher, L. Sainsbury, L.
Geraint, L. Sefton of Garston, L.
Serota, B.
Gilbert, L. Sewel, L.
Gladwin of Clee, L. Shepherd, L.
Gould of Potternewton, B. Shore of Stepney, L.
Graham of Edmonton, L.
Grenfell, L. Simon, V.
Simon of Highbury, L.
Grey, E. Smith of Gilmorehill, B.
Hamwee, B. Stallard, L.
Harris of Greenwich, L. Stoddart of Swindon, L.
Haskel, L. Strabolgi, L.
Hayman, B. Symons of Vemham Dean, B.
Healey, L. Taylor of Blackburn, L.
Henderson of Brompton, L. Taylor of Gryfe, L.
Hogg of Cumbemauld, L. Thomas of Gresford, L.
Hollis of Heigham, B. Thomas of Walliswood, B.
Hooson, L. Thomson of Monifieth, L.
Howell, L. Thurlow, L.
Howie of Troon, L. Thurso, V.
Hoyle, L. Tordoff, L.
Hughes, L. Turner of Camden, B.
Hylton, L. Wallace of Saltaire, L.
Ilchester, E. Wedderburn of Charlton, L.
Irvine of Lairg, L.[Lord Whitty.L.
Chancellor.] Wigoder, L.
Jay of Paddington, B. Williams of Crosby, B.
Jenkins of Putney, L. Williams of Elvel, L.
Judd, L. Williams of Mostyn, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.15 p.m.

Clause 2 agreed to.

Lord Bowness moved Amendment No. 4: After Clause 2, insert the following new clause—


(" . After section 55(3) of the 1989 Act there shall be inserted— (3A) The Secretary of State shall publish a report of the effect in each year of the approved supplementary credit approvals on the public sector borrowing requirement.".").

The noble Lord said: The amendment asks for a new section to be added to the effect that, The Secretary of State shall publish a report of the effect in each year of the approved supplementary credit approvals on the public sector borrowing requirement". I state again, and apologise for repeating myself, that the Bill is about local authority borrowing. The Minister in another place made it clear that although the initial sums in the first year are not large and certainly not large enough to meet the hopes and aspirations that were no doubt raised by the promises originally made by members of the Government prior to the election—as was made clear in this House and another place—there is new public money involved.

The guidance issued by the department to local authorities, of which the noble Baroness was kind enough to send me a copy, invites their bid and states that, The release of additional spending power in the form of supplementary credit approvals will mean that authorities will incur additional revenue expenditure to meet borrowing or liabilities under credit arrangements. Depending on the particular expenditure undertaken by an authority the cost may fall to the housing revenue account or the general fund and will be supported by the government either through additional housing revenue account subsidy or through revenue support grant". Since the original promise in the manifesto commitment was to use unapplied capital receipts—though, had that taken place, it would indeed of itself have had consequences for the level of council tax since those receipts are not sitting idle in local authority accounts; in many cases they are earning considerable sums that can be applied in aid of the council tax—it is now only right, in the spirit of the openness promised by the Government and in the interests of good economic management, that the figures of the additional borrowing and the effect on the public sector borrowing requirement should be published.

Had the Bill set out to do what was promised rather than to facilitate borrowing, different arguments might have applied. The amendment does not in any way seek to thwart the Bill's intentions. The Government have already admitted that we are talking about new money; we are talking about borrowing. If the amounts remain as modest as the sums first announced, they should not be fearful of disclosing the effect.

If the amendment is rejected, one is left with the inevitable conclusion that, as with so much of the Bill, we do not know the whole story and the ultimate intentions behind the measure. I beg to move.

Baroness Hayman

As the noble Lord says, the new clause would impose a statutory requirement on Ministers to publicise the effect on the PSBR of decisions on amounts of supplementary credit approvals issued in any one year.

The effect of the Bill on the public sector borrowing requirement is an issue to which noble Lords opposite have returned on many occasions. I would not have mentioned it myself but for the fact that the noble Lord, Lord Bowness, referred to his paranoia. I suggest that in this area they are perhaps over-concerned that there has been some sort of conspiracy about the clear admission from this side of the House that there are effects on public expenditure of issuing supplementary credit approvals for the capital receipts initiative.

Although the noble Lord tempts me to do so, I do not think it would be appropriate under this clause to set out once again the reasons for choosing the route for supplementary credit approvals in order to fund this initiative. It was made clear in the debate at Second Reading why this mechanism was being used. As the noble Lord said, the amounts have been made clear: £174 million for this year; £610 million in 1998–99. The effect that this would have on individual local authorities was also made absolutely transparent in the consultation document on the scheme issued during the summer.

We have always been completely open in saying that these credit approvals will increase public expenditure; but I do not think that we should go on to say that that suggests a necessity to publish a report. We have also promised that the funding of the initiative will be handled to be consistent with our well-known commitment to prudent economic management and ensuring best value. It is not clear how issuing an annual report on this scheme—if that is what the noble Lord envisages—rather than on supplementary credit approvals as a whole would add to that commitment.

In making any decisions on public spending, prudent governments—and this Government are absolutely determined to be prudent in their economic management—will always have in mind the effect on public sector borrowing. We are, as the noble Lord, Lord Bowness, said, much in favour of openness in government and have no objection to publicising the basis of our decisions on allocations under the capital receipts initiative. We have been very clear about the circumstances in which we will make receipts available and the balance that will be struck between the authorities in housing need and those having housing receipts. I do not see that a requirement that spending decisions by government should include a statutory obligation to publish results would add anything to what is already clear, explicit and transparent. What it would add to is the administrative burden on local government. I do not believe that the benefits could in any way justify that burden. As with any other spending programme—and the noble Lord, Lord Bowness, is quite right to point out that this is a spending programme—it will be reflected in the department's published spending plans, and the impact of each department's public spending will be reflected in the public accounts.

The proposed new clause is also unclear as to whether it is intended to relate only to supplementary credit approvals issued in connection with our capital receipts initiative—which is what the Bill is about—or all supplementary credit approvals. If it is meant to refer to all areas of capital expenditure, it is outside the scope of the Bill and would, besides, add time-consuming and we believe quite unnecessary burdens on local authorities and on the department in publishing information.

I suggest to the Committee that there is no need for this provision. We have been clear about the impact of our initiative on public finances; we have been explicit and transparent about the sums of money involved; the Chancellor will make clear in Budget statements and in the accounts published afterwards the public sector borrowing requirement; and we shall continue to adhere to prudent economic and accounting disciplines. In the light of that, I urge the noble Lord to withdraw the amendment.

Baroness Hamwee

My problems with this amendment are in large part to do with my difficulty in accepting that capital expenditure should be treated as part of the public sector borrowing requirement. But that is a whole other debate—one which your Lordships' Select Committee on central and local government relations referred to as a Humpty-Dumpty argument: "It is so because we say it is so". I shall not pursue that now.

However, perhaps I may take this opportunity to ask the Minister whether she is able to expand on the references to monitoring in the guidance recently issued. Paragraphs 40 and 41 of the guidance explain that the Government are—quite rightly—concerned to ensure that resources released are used "wisely and well". The paragraphs do not suggest mechanisms for reporting back to local authorities on the Government's own monitoring. Given that the scheme appears in general terms to propose that future releases of receipts will depend on how previous releases are used, I hope that the Minister can give an assurance about a continuing dialogue and partnership with local government in that monitoring exercise.

Baroness Hayman

I am happy to give that assurance in general terms to the noble Baroness. As she points out, it is important that we monitor the effectiveness and value for money of receipts that are approved and that, as we forge future policies, we can look back to see what has been successful and encourage that. A good precedent was set during the summer by the consultation document and the extremely constructive response of local authorities to it. I hope that that sort of partnership in terms of monitoring the effect of the release of supplementary credit approvals and their effectiveness will be something that in the new climate of relationship with local government can inform policy-making for the future.

Lord Bowness

The noble Baroness, Lady Hamwee, quoted the Humpty-Dumpty argument: "It is so because we say it is so". I feel that that is to some extent the position of the Government on this Bill: "This is about the release of capital receipts because we say it is about the release of capital receipts". In fact, it is about borrowing, and I believe that that needs to be repeated long and often.

At Second Reading I said that I understood that in many instances local government would understandably want to have the opportunity to spend the proceeds of some of its released assets. However, that in no way takes away from the responsibility of government in going into this new area—as they are by virtue of this Bill—without our knowing where it will all end. At the moment it is housing receipts that are concerned, but the Bill leaves it open for all receipts to be used in the future. We do not know when that will be or in what circumstances the Government will think that right. The amounts involved are modest at the beginning but might not be modest in future years. As the Minister agreed, the Government want to be open in all their dealings and prudent in their economic management. If they are looking to release the considerable sums held by local government in the form of unapplied receipts through additional borrowing, which will have a considerable consequence on the public sector borrowing requirement, I cannot understand why they cannot accede to the amendment. It would in no way affect the Government's wishes or the intent of the Bill. I am sorry that the Minister cannot accept the amendment and I ask for the opinion of the House on it.

Baroness Hayman

I respect the noble Lord's right to test the opinion of the Chamber. However, I should like to say that the Bill is not about borrowing; it is about improving housing for some of the people most in need of it in this country.

Front Bench Members opposite spoke of mechanisms and processes but have not welcomed the fact that we are beginning to address the years of under-investment in homes for people who need them. I refer to the homes which are ill-insulated and badly heated and which give rise to ill health and to all the other problems that surround ghetto estates and poor housing in some of the most deprived local authority areas. That is what the Bill is concerned with. If the mechanism allows us to take those aims forward, then the Committee should support it.

Lord Bowness

I thank the Minister for those additional comments. I understand what she says. However, it was stated in the other place and in this Chamber that, whether or not those ambitions would be met by the Bill, they would be achieved by the phased release of capital receipts. The Minister said that she did not want to go into those arguments today. But the fact is that those ambitions are not being achieved by the release of those receipts but by additional borrowing. In those circumstances, I maintain my position on the amendment.

4.31 p.m.

On Question, Whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 99; Not-Contents, 125.

Division No. 2
Aberdare, L. Blatch, B.
Addison, V. Boardman, L.
Alexander of Tunis, E. Bowness, L.
Anelay of St. Johns, B. Boyd-Carpenter, L.
Beloff, L. Braine of Wheatley, L.
Biffen, L. Bridgeman, V.
Birdwood, L. Brigstocke, B.
Broadbridge, L. Luke, L.
Brougham and Vaux, L. McColl of Dulwich, L.
Bruntisfield, L. Marlesford, L.
Butterworth, L. Merrivale, L.
Cadman, L. Miller of Hendon, B.
Campbell of Alloway, L. Milverton, L.
Campbell of Croy, L. Mottistone, L.
Carnegy of Lour, B. Mountevans, L.
Carnock, L. Munster, E.
Chesham, L. Murton of Lindisfarne, L.
Clark of Kempston, L. Northesk, E.
Cochrane of Cults, L. O'Cathain, B.
Courtown, E.[Teller.] Onslow, E
Cowdray, V. Pender, L.
Cox, B. Pilkington of Oxenford, L.
Craig of Radley, L. Platt of Writtle, B.
Cullen of Ashbourne, L. Prior, L.
Cumberlege, B. Rathcavan, L.
Davidson, V. Rawlings, B.
Dean of Harptree, L. Renton, L.
Denbigh, E. Renton of Mount Harry, L.
Denton of Wakefield, B. Rotherwick, L.
Dixon-Smith, L. Sandford, L.
Elles, B. Seccombe, B.
Shaw of Northstead, L.
Elliott of Morpeth, L. Simon of Glaisdale L.
Foley, L. Skelmersdale, L.
Fraser of Carmyllie, L. Stewartby, L.
Gisborough, L. Stodart of Leaston, L.
Goschen, V. Strange, B.
Gray of Contin, L. Strathclyde, L.[Teller.]
Harding of Petherton, L. Strathcona and Mount Royal, L.
Harmar-Nicholls, L. Sudeley, L.
Harrowby, E. Swinfen, L.
Hemphill, L. Taylor of Warwick, L.
Henley, L. Teviot, L.
HolmPatrick, L. Thomas of Gwydir, L.
Hooper, B. Trefgarne, L.
Howe, E. Ullswater, V.
Kimball, L. Vivian, L.
Lauderdale, E. Waterford, M.
Liverpool, E Wharton, B.
Lucas, L. Wilcox, B.
Acton, L. Diamond, L.
Addington, L. Dixon, L.
Alderdice, L. Donoughue, L.
Allenby of Megiddo, V. Dormand of Easington, L.
Ampthill, L. Dubs, L.
Annan, L. Eatwell, L.
Archer of Sandwell, L. Elis-Thomas, L.
Ashley of Stoke, L. Evans of Parkside, L.
Avebury, L. Ezra, L.
Barnett, L. Farrington of Ribbleton, B.
Berkeley, L. Gallacher, L.
Blackstone, B. Geraint, L.
Blease, L. Gilbert, L.
Borrie, L. Gladwin of Clee, L.
Brightman, L. Gladwyn, L.
Brooks of Tremorfa, L. Gould of Potternewton, B.
Bruce of Donington, L. Graham of Edmonton, L.
Callaghan of Cardiff, L. Greenway, L.
Carlisle, E. Gregson, L.
Carmichael of Kelvingrove, L. Grenfell, L.
Carter, L.[Teller.] Grey, E.
Castle of Blackburn, B. Hamwee, B.
Chandos, V. Harris of Greenwich, L.
Cledwyn of Penrhos, L. Haskel, L.
Clinton-Davis, L. Hayman, B.
Cocks of Hartcliffe, L. Healey, L.
Currie of Marylebone, L. Holme of Cheltenham, L.
Dahrendorf, L. Hooson, L.
Dean of Beswick, L. Howell, L.
Dean of Thornton-le-Fylde, B. Howie of Troon, L.
Hoyle, L. Richard, L.[Lord Privy Seal.]
Hughes, L. Robson of Kiddington, B.
Hylton, L. Rochester, L.
Inchyra, L. St. John of Bletso, L.
Irvine of Lairg, L.[Lord Sandwich, E.
Chancellor.) Sefton of Garston, L.
Jay of Paddington, B. Serota, B.
Jenkins of Putney, L. Sewel, L.
Johnston of Rockport, L. Shepherd, L.
Judd, L. Shore of Stepney, L.
Kilbracken, L. Simon, V.
Kirkhill.L. Simon of Highbury, L.
Lockwood, B. Smith of Gilmorehill, B.
Longford, E. Stoddart of Swindon, L.
McCarthy, L. Stokes, L.
McIntosh of Haringey, L.[Teller.] Strabolgi, L.
Mackie of Benshie, L. Symons of Vernham Dean, B.
Mallalieu, B. Taylor of Blackburn, L.
Merlyn-Rees, L. Taylor of Gryfe, L.
Milner of Leeds, L. Thomas of Gresford, L.
Mishcon, L. Thomas of Walliswood, B.
Molloy, L. Thomson of Monifieth, L.
Monkswell, L. Thurso, V.
Morris of Castle Morris, L. Tordoff, L.
Murray of Epping Forest, L. Turner of Camden, B.
Nicol, B. Wallace of Saltaire, L.
Paul, L. Wedderburn of Charlton, L.
Plant of Highfield, L. Whitty, L.
Ponsonby of Shulbrede, L. Wigoder, L.
Prys-Davies, L. Williams of Crosby, B.
Ramsay of Cartvale, B. Williams of Elvel, L.
Randall of St. Budeaux, L. Williams of Mostyn, L.
Redesdale, L. Winston, L.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 3 agreed to.

House resumed: Bill reported without amendment.