Local Government Bill

HL Deb 10 September 2003 vol 652 cc300-93

3.18 p.m.

The Minister of State, Office of the Deputy Prime Minister (Lord Rooker)

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Local Government Bill, has consented to place her prerogative and interest, so far as they are affected by the Bill. at the disposal of Parliament for the purposes of the Bill.

Bill read a third time.

Clause 3 [Duty to determine affordable borrowing limit]:

Lord Bassam of Brighton

moved Amendment No. 1: Page 2, line 39, at end insert— ( ) The power under subsection (7) is not to be read as limited to the specification of an existing document. The noble Lord said: My Lords, Amendments Nos. 1, 3 and 4 have a similar purpose. They relate to Clauses 3, 15, and 21 which all include powers for the Secretary of State to make regulations referring to published codes of practice to which authorities are to have regard. These powers are crucial to our aim of basing the new capital finance system on independent codes of practice and accounting standards. The purpose of the amendments is to ensure that any revised editions of such codes are also covered by the regulations and thus apply immediately and automatically.

Much attention has already been focused on Clause 3 during Parliament's consideration of the Bill. It is the clause that underpins the prudential borrowing system. Authorities are required to determine their own affordable borrowing limits, and, in doing so, may be required to have regard to codes of practice specified in regulations. In the draft regulations under the power, we have of course specified the Prudential Code for Capital Finance in Local Authorities, an often-read document. which is being specially prepared by the Chartered Institute of Public Finance and Accountancy, CIPFA.

The regulations under Clauses 15 and 21 also refer to CIPFA codes. Clause 15 is a power to specify general guidance and in this case we have named CIPFA's Treasury Management code. The code is already widely used by authorities and sets out practice in such areas as investment and the management of debt.

Clause 21 deals with the accounting practices to be followed by authorities and enables the Secretary of State to specify proper practices. Here the regulations identify two other well established CIPFA codes: the Statement of Recommended Practice and the Best Value Accounting Code, which together lay down the basis of local government financial management and accounting.

We always intended that the regulations should refer automatically to new editions of these codes as they are published. It would be undesirable to have to make amended regulations whenever one of the codes was reissued. That could create uncertainty about the legal status of a new edition of a code. Also, any need for each revised edition to be approved by the Government might cast doubt upon our commitment to accounting practice as the basis for the capital finance system. Our policy here has the full support of local government and has been endorsed in another place.

This is an important issue, and we have recently reviewed the drafting of these three clauses. We now consider that the treatment of new editions of the codes should be clarified. These technical amendments therefore expand each clause to state that the references to codes are not limited to the existing editions. They simply ensure that the original policy intention is properly and effectively implemented. I beg to move.

Baroness Hamwee

My Lords, I have no objection to the amendments. But the more a Bill lists what might be included in provisions, the more one is in doubt about the things that are not listed. Although I understand what the Minister is saying, I find the approach quite difficult. If the Secretary of State specifies that an order or provision is wide open, let it be so, rather than suggest that it is in some way limited. Sometimes I find this approach more confusing than helpful.

Lord Bassam of Brighton

My Lords, I know that the noble Baroness rarely gets confused. We think that we have clarified the situation. I take the point that she makes, but I do not think that it has great bearing on the issue.

On Question, amendment agreed to.

Clause 11 [Use of capital receipts]:

Baroness Hanham

moved Amendment No. 2: Page 5, line 35, leave out paragraph (b). The noble Baroness said: My Lords, we have discussed the amendment twice: in Committee and on Report. My final remarks on Report were that I thought it likely that we would return to the matter, so here we are; we do not like summer holidays to get in the way of a good discussion. On Report the Minister said that the difficulty with the same amendment being tabled was that he had nothing new to say. But it seems to us that if you have a simple formula, you should stick to it. That is why we have made no attempt to look for different words.

Clause 11(2)(b) would enable the Secretary of State, by regulation, to snatch all or any part of a local authority's capital receipts. We know that the purpose behind that would be to pool those resources and redistribute them to other authorities not prudent or fortunate enough to have access to their own receipts.

There are three reasons for our concerns about that. The first is that debt-free councils could lose only what they have been able to raise from disposal of their housing stock. There are not many of them, but they feel very strongly that they have managed their affairs well and should not be penalised in that way, by ministerial whim.

Other local authorities which are not in the same position may still need to support the provision of affordable housing or to maintain property that they still own. We made the point previously that to strip local authorities of such capital receipts jeopardises their ability to maintain their own property.

Under the Government's plans to create thousands of new homes, the money collected from these authorities is a drop in the ocean. But for small-scale development these receipts, in good hands and prudent councils, would potentially provide great flexibility.

The Minister has made the point on several occasions that some local authorities—those that would benefit from the redistributed resources—do not have such capital receipts, to which we must ask: why not? The policy for discounted sales to tenants, which the Labour Party did not much like for quite a long time but then embraced, has been available to all authorities for many years now. It seems hard that those who have implemented the policy vigorously and obtained capital receipts should have to support those who may have been less enthusiastic and more dilatory in their ability to do so. I beg to move.

Baroness Hamwee

My Lords, we support the amendment because we oppose the provision that it would ameliorate. To continue the theme of my earlier remarks, and to he utterly clear, we would have preferred to say that the Secretary of State may not make provisions through regulations that the whole or part of a capital receipt be paid to him. Perhaps that does not affect the thrust of the amendment.

The Bill is about freedoms and flexibilities. The clause seems to give with one hand and to take away with the other. I am aware that the Government said during the passage of the Bill that the provision is perfectly reasonable on the basis that receipts arise because the grant originally came from the Government. But some authorities received negative housing subsidies for decades and many have invested in their housing stock the income that they have received from lettings.

My analogy is that, if I give a gift, I do not expect to be able to say after 15 years or so, "You did jolly well: the stock market went up, you invested and got more than I thought you might get, so give me some back". If you make a grant and hand over money, in an environment where noble Lords on all sides say that local authorities should have greater freedom, autonomy and discretion, let the money follow what the mouth says. We support the noble Baroness's amendment.

Lord Hanningfield

My Lords, I support my noble friend Lady Hanham and what the noble Baroness, Lady Hamwee, said. I support particularly the point that the Bill is supposed to be about freedoms and flexibilities for local government. Although it gives some flexibilities and freedoms, there are one or two issues on which local government, as a united front across all parties, feels that more is being taken away than is given. This is one such issue. I hope that the Government, even at this late stage, could think again about this aspect of the Bill.

Lord Rooker

My Lords, it is quite right, tlt, theme of the Bill is freedoms and flexibilities. Although we are dealing with the same issue as we dealt with previously, and my answers will be the same, the arguments in favour of amendments are getting slightly weaker. My arguments are as robust as ever. The noble Baronesses would have difficulty arguing the case that they have just made to certain local authorities, and certainly to the tenants of some local authorities. But this is an important part of the Bill and I welcome the opportunity to discuss the amendment.

The amendment seeks to remove the Secretary of State's power to pool capital receipts. This would mean that many authorities would not get the resources they need to meet pressing demands for housing. Therefore, it is plainly unacceptable to the Government. My noble friends and I have said before that the redistribution of housing capital receipts has been, is, and will continue to be, a fundamental principle of housing capital finance. We believe that it is right that a portion of the proceeds from the sale of council housing be recycled for use in areas where housing need is greatest.

As has been explained before, the current arrangements are that local authorities are required to set aside a portion of their housing capital receipts. The flaw in that arrangement is that debt-free authorities are exempt from the requirement to set aside any portion of their right-to-buy receipts. Not having to set aside a portion of the housing capital receipts means that they are not contributing to the redistribution system that lies at the heart of the housing capital finance regime. Indeed, they may retain the receipts and use them for whatever purpose they wish.

For the avoidance of doubt, I repeat that an authority with debt is not necessarily good and an authority that is debt free is not necessarily bad—and vice versa. There is nothing intrinsically good or bad about being debt free: it is sometimes an historical accident of finance. The fact remains that debt-free authorities have been able to use certain money more than once and for expenditure other than on housing. We are determined to channel that money into housing.

I also wish to make the point, which I believe was raised by the noble Baroness, Lady Hanham, that these funds are not necessarily generated by good management of the council—by good planning, for example. They are raised because tenants are exercising their right to buy. As the noble Lady said, some authorities are more dilatory than others. However, if the local authority stops people exercising their right to buy, there is an adequate system of appeal. The local authority must obey the law, and rightly so.

On the other hand, some authorities have not done as well as others because their stock is rubbish and their tenants do not want to buy it, even at the knock-down prices that they are offered. It is therefore not fair to say that authorities have not done well if they have not generated enough receipts. That is an unfair portrayal of local authority housing, which is very uneven throughout the country. The authority has no influence on the disposals. It does not manage them. Therefore, the authority should not be able to claim credit for them. The disposals are solely in the hands of tenants who exercise their right to buy.

We believe that redistribution must apply to all if it is to be fair to all. It is unacceptable that some authorities should have more access to resources than others, regardless of their need, simply because they happen to be rich in right-to-buy receipts and are debt free. Without redistribution, local authorities with debt, lower capital receipts and a greater housing investment need will lose out. That is irresponsible and it would be quite indefensible to allow that to happen.

The current means of redistribution based on set-aside will cease to be available when the new capital finance system is introduced. Pooling is the mechanism that will replace it and redistribute housing capital receipts for all local authorities.

I am aware—and I make no apology for this—that these are exactly the same arguments that I used on Second Reading, in Committee and on Report. As the noble Baroness, Lady Hanham, said, the case is virtually the same, although I believe that the noble Baroness introduced a weakness by chastising authorities with low capital receipts by saying that it is their fault because they were dilatory in the selling. The selling is not theirs to control; it is the tenants'. Perhaps the stock is rubbish and the tenants will not take it off the local authorities' hands.

My arguments have not changed, because we think that it is right that the resources generated by the sale of council housing stock be recycled and made available for the areas of greatest need. The amendment would remove our ability to do that. The alternatives, as I have told the House before, are higher taxes, less investment in housing or cuts in other programmes. I have not heard from either of the proponents of this amendment which one of those three they recommend. Clearly, they are not prepared to put their names to higher taxes or to stand up in this House and say, "Let's have less investment in certain areas". They are certainly not prepared to stand up in this House and name the areas of local expenditure that should be cut to pay for their amendment—and I am not surprised.

If the amendment is pressed, the noble Lords who tabled the amendment are duty bound to say which alternative they would put in its place. They are not prepared to do that, so I hope that they will not press the amendment. It has been round the course several times. Some parts of local government think that the measure does not offer 100 per cent freedom of flexibility but there is a general view that it is very close to that. It is good governance and good use of public funds placed in areas based on housing need. That is all that this is. It is not confiscation, but a method of re-directing money to areas of the greatest housing need. With all due respect, I do not understand how anyone can seriously oppose that policy.

Baroness Hanham

My Lords, I can and I do, and this is the third time that I have said that. I used very similar arguments in my speeches about this matter on other occasions. "Redistribution" is a word that probably falls better from the Minister's lips than from mine, as does "pooling".

The Minister's case for redistribution is that the money goes to authorities with greater need, but we would argue about where that is. In these days, local authorities need key workers, and key worker accommodation. There are many areas that are perhaps not quite as destitute as others, but where key worker housing is absolutely imperative. It is important that they have the capital for that and we would expect to see capital receipts used for that purpose.

The measure removes a flexibility. It removes the flexibility for authorities that have receipts to use them for affordable housing for specific needs. I am almost certain that, under the Deputy Prime Minister's mantle—his sustainable communities—everything in the future will go one way. The decisions about where key worker housing goes will have little to do with individual local authorities and everything to do with the Deputy Prime Minister. The little pot of gold that might helpfully be used by local authorities would be taken away by paragraph (b).

I disagree with the Minister about some authorities being more dilatory than others, because some authorities never promoted the right to buy and the sale of housing stock. It should have been promoted, because many people needed the issue to be put before them so that they could consider it. Some authorities are still not as energetic as others. Sometimes that is with good reason—blocks of flats, for example. Some authorities have not been as assiduous as others. They have not recouped the capital receipts that they might otherwise have done.

We have trotted round this field now on three occasions. All that I can do is to seek the opinion of the House on this matter.

3.38 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 133; Not-Contents, 118.

Division No. 1
CONTENTS
Aberdare, L.	Anelay of St Johns, B.
Addington, L.	Ashcroft, L.
Alderdice, L.	Astor of Hever, L.
Allenby of Megiddo, V.	Barker, B.
Alton of Liverpool, L.	Beaumont of Whitley, L.

Biffen, L.	McNally, L.
Blatch, B.	Maddock, B.
Bridgeman, V.	Mar and Kellie, E.
Brooke of Sutton Mandeville, L.	Marsh, L.
Brougham and Vaux, L.	Masham of Ilton, B.
Burnham, L.	Mayhew of Twysden, L.
Buscombe, B.	Miller of Chilthorne Domer, B
Byford, B.	Molyneaux of Killead, L.
Caithness, E.	Montagu of Beaulieu, L.
Campbell of Alloway, L.	Mowbray and Stourton, L.
Carlisle of Bucklow, L.	Moynihan, L.
Carnegy of Lour, B.	Murton of Lindisfarne, L.
Carrington, L.	Noakes, B.
Clement-Jones, L.	Northesk, E.
Cope of Berkeley, L.	Northover, B.
Courtown, E.	Norton of Louth, L.
Crathorne, L.	O'Cathain, B.
Deedes, L.	Palmer, L.
Denham, L.	Park of Monmouth, B.
Dixon-Smith, L.	Parkinson, L.
Dundee, E.	Pearson of Rannoch, L.
Eden of Winton, L.	Peyton of Yeovil, L.
Elles, B.	Phillips of Sudbury, L.
Elliott of Morpeth, L.	Plumb, L.
Elton, L.	Plummer of St. Marylebone, L
Erroll, E.	Quinton, L.
Ezra, L.	Rawlings, B.
Falkland, V.	Reay, L.
Feldman, L.	Rennard, L.
Fookes, B.	Renton, L.
Fraser of Carmyllie, L.	Roberts of Conwy, L.
Geddes, L.	Rodgers of Quarry Bank, L.
Gilmour of Craigmillar, L.	Rogan, L.
Goodhart, L.	Roper, L.
Hamwee, B.	Rotherwick, L.
Hanham, B.	Russell, E.
Hanningfield, L.	Ryder of Wensum, L.
Harris of Richmond, B.	St John of Fawsley, L.
Henley, L.	Sandberg, L.
Higgins, L.	Seccombe, B. [Teller]
Hodgson of Astley Abbotts, L.	Selsdon, L.
Holme of Cheltenham, L.	Sharman, L.
Hooson, L.	Sharp of Guildford, B.
Howe, E.	Sharples, B.
Howell of Guildford, L.	Shutt of Greetland, L.
Hunt of Wirral, L.	Skelmersdale, L.
Hurd of Westwell, L.	Smith of Clifton, L.
Hylton, L.	Soulsby of Swaffham Prior, L.
Jellicoe, E.	Stevens of Ludgate, L.
Jenkin of Roding, L.	Stoddart of Swindon, L.
Kimball, L.	Strathclyde, L.
Knight of Collingtree, B.	Swinfen, L.
Laing of Dunphail, L.	Thatcher, B.
Lamont of Lerwick, L.	Thomas of Gwydir, L.
Lane of Horsell, L.	Tordoff, L.
Livsey of Talgarth, L.	Trumpington, B.
Lucas, L.	Tugendhat, L.
Luke, L.[Teller]	Ullswater, V.
McColl of Dulwich, L.	Wakeham, L.
MacGregor of Pulham Market, L.	Walmsley, B.
	Williams of Crosby, B.
Mackie of Benshie, L.	Willoughby de Broke, L.

NOT-CONTENTS
Acton, L.	Blackstone, B.
Allen of Abbeydale, L.	Boothroyd, B.
Archer of Sandwell, L.	Borrie, L.
Armstrong of Ilminster, L.	Bridges, L.
Ashley of Stoke, L.	Brooke of Alverthorpe, L
Ashton of Upholland, B.	Campbell-Savours, L.
Barnett, L.	Carter, L.
Bassam of Brighton, L.	Christopher, L.
Berkeley, L.	Clarke of Hampstead, L.
Bernstein of Craigweil, L.	Clinton-Davis, L.
Billingham, B.	Cohen of Pimlico, B.

Corbett of Castle Vale, L.	Lofthouse of Pontefract, L.
Crawley, B.	McCarthy, L.
David, B.	Macdonald of Tradeston, L.
Davies of Coity, L.	Mclntosh of Haringey, L.
Davies of Oldham, L. [Teller]	McIntosh of Hudnall, B.
Dean of Thornton-le-Fylde, B.	MacKenzie of Culkein, L.
Dixon, L.	Mackenzie of Framwellgate, L
Donoughue, L.	Mason of Barnsley, L.
Dormand of Easington, L.	Massey of Darwen, B.
Dubs, L.	Merlyn-Rees, L.
Elder, L.	Mitchell, L.
Evans of Parkside, L.	Morris of Aberavon, L.
Evans of Temple Guiting, L.	Morris of Manchester, L.
Falconer of Thoroton, L. (Lord Chancellor)	Nicol, B.
	Orme, L.
Farrington of Ribbleton, B.	Patel of Blackburn, L.
Filkin, L.	Pendry, L.
Finlay of Llandaff, B.	Peston, L.
Fyfe of Fairfield, L.	Pitkeathley, B.
Gale, B.	Puttnam, L.
Gavron, L.	Ramsay of Cartvale, B.
Gibson of Market Rasen, B.	Rendell of Babergh, B.
Golding, B.	Richard, L.
Goldsmith, L.	Richardson of Calow, B
Gould of Potternewton, B.	Rooker, L.
Graham of Edmonton, L.	Sawyer, L.
Greengross, B.	Sheldon, L.
Greenway, L.	Simon, V.
Grocott, L. [Teller]	Slim, V.
Harrison, L.	Smith of Gilmorehill, B.
Haskel, L.	Smith of Leigh, L.
Haskins, L.	Strabolgi, L.
Hayman, B.	Symons of Vernham Dean, B.
Hilton of Eggardon, B.	Temple-Morris, L.
Hogg of Cumbernauld, L.	Thornton, B.
Hollis of Heigham, B.	Tomlinson, L.
Howie of Troon, L.	Turnberg, L.
Hughes of Woodside, L.	Turner of Camden, B.
Hunt of Kings Heath, L.	Varley, L.
Irvine of Lairg, L.	Walpole, L.
Islwyn, L.	Warnock, B.
Janner of Braunstone, L.	Wedderburn of Charlton, L.
Jay of Paddington, B.	Whitaker, B.
Jones, L.	Whitty, L.
Judd, L.	Williams of Elvel, L.
King of West Bromwich, L.	Williams of Mostyn, L. (Lord President of the Council)
Kirkhill, L.
Lea of Crondall, L.	Williamson of Horton, L.
Lipsey, L.	Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.

3.48 p.m.

Clause 15[Guidance]:

Lord Rooker

moved Amendment No.3: Page 7, line 7, at end insert— ( ) The power under subsection (1)(b) is not to be read as limited to the specification of existing guidance.

On Question, amendment agreed to.

Cluase 21 [Accounting practices]:

Lord Rooker

moved Amendment No.4: Page 9, line 28, at end insert— ( ) The power under subsection (2)(b) is not to be read as limited to the identification of an existing document.

On Question, amendment agreed to.

Lord Hanningfield

moved Amendment No. 5: Before Clause 25, insert the following new clause—

"APPLICATION OF PROVISIONS OF THIS PART The provisions of this Part may only be applied to those local authorities that have been identified by the Audit Commission as at risk of overspending their total budget by more than 10 per cent.

The noble Lord said: My Lords, we object to Part 2 because it potentially applies to all authorities, although the problems it would address affect a tiny minority. The amendment would restrict the potential effect of Part 2 to those authorities identified by the Audit Commission as likely to overspend their budgets by more than 10 per cent. According to the Audit Commission's latest report, Stewardship and Governance, that would bring 6 per cent of local authorities into the possible remit of these provisions. The amendment does not say that these provisions will apply to those 6 per cent of authorities; it says that these provisions can only apply to those 6 per cent of authorities.

I should like to remind your Lordships of some of the reasons as to why we are so concerned about Part 2. Throughout the passage of the Bill we have argued against the inclusion of these provisions. We have argued on the basis of principle; we have argued on the basis of practice. Both those lines of approach have failed to make any impact on the Ministers opposite, who have refused to recognise the disastrous message that this provision sends out to local authorities. If Ministers do not believe that to be the case, perhaps I may quote from the evidence of the Society of Local Authority Chief Executives to the Select Committee on the draft Bill. The prevailing attitude of mistrust of local government, however, is revealed once again in the Bill's clauses on financial administration".

In previous debates, the Minister went so far as to describe as irresponsible the suggestion that this provision should be challenged. He said that it was irresponsible of the noble Baroness, Lady Hamwee, to suggest that just because an authority does not get into trouble does not mean that it should not have a higher level of reserves. I refer your Lordships to Hansard, 16th July 2003, col. 901.

But that is precisely what it means. That is why we argue that these are local judgments. In its evidence to the Select Committee, the Chartered Institute of Public Finance and Accountancy (CIPFA)—to which the noble Lord, Lord Bassam, referred in his first amendment—stated: specifying a 'minimum level of reserves' for local authorities is impracticable and should be left to local judgment and good professional practice".

In making that statement it was well aware of the findings of the Audit Commission. The point was directly addressed in evidence to the Select Committee. CIPFA stated: I think the latest Audit Commission figures which have come out show that approximately 90 per cent of local authorities have adequate balances, the other ten per cent are judged by the auditors to have inadequate balances. However, when you look at the pattern of local authority spending … between 20 to 40 per cent of local authorities do overspend on individual directorate levels in a year, virtually none of the local authorities actually end up having to reduce services as a result i.e. they have enough in their balances to cover those in year differences against actual budget".

Whether what is defined by the Audit Commission as an inadequate reserve actually leads to problems in practice is not relevant; it is key. The evidence is that in the vast majority of cases there are no problems. That is the evidence given by CIPFA. But it is not just CIPFA that has a problem with this provision. The Society of County Treasurers, in its evidence to the Select Committee stated: The proposals for the Secretary of State to specify that local authorities maintain their reserves at a minimum level would seem to be particularly problematic and unnecessary".

What about the Audit Commission? Surely, it must be in favour of this power. Its evidence to the Select Committee stated: To date Auditors have resisted making recommendations about minimum levels because it is rightly the responsibility of local authorities to determine this for themselves based on a risk assessment of their operational and business models".

Remember those words from the Audit Commission: rightly the responsibility of local authorities to determine this for themselves".

On these Benches, we agree with the Audit Commission. On these Benches, we agree with the Chartered Institute of Public Finance and Accountancy. On these Benches, we agree with the Society of Country Treasurers; we agree with the Society of Local Authority Chief Executives; and we agree with the Local Government Association.

We have tried a number of lines of argument with the Government. Most of the time they have failed to address the specific arguments that we have put forward. For example, in Committee and on Report, we suggested that the provision in Clause 26(2) would be ineffective because it only enables intervention at the end of a financial year—after the damage has been done. The Government have not addressed that.

We also queried the suggestion that the powers would be held in reserve. How does that commitment square with the insistence of the Government that they are taking these powers to deal with a large number of authorities identified by the Audit Commission as having inadequate reserves? If the powers have been taken to address that particular problem, surely they will be deployed against a large number of authorities, even if we know that, in practice, the vast majority will come to no harm.

We put the argument that making short-term decisions to protect a level of balances could cost local authorities an enormous amount of money in the long term. Ministers have not addressed that. There are so many arguments against this provision that we could come up with new ones all day.

Clause 26(2) states: In the case of a controlled reserve, it shall not be regarded as appropriate for the balance of the reserve at the end of the financial year under consideration to be less than the minimum amount determined in accordance with regulations made by the appropriate person". Throughout the debates on these clauses, Ministers have insisted that local authorities must have adequate reserves to meet unforeseen problems that might emerge during the year. But what they are committed to here is a minimum level of reserve at year end. Why do they need a minimum level of reserve at the end of the year? What if local authorities decided that problems over school funding were so severe in a year that they wanted to do something about it? They may have no particular spare cash, but they may have money in reserves which they may want to give to schools during that year. However, as the year progresses, the risk declines and they do not have to call on their reserves. Therefore, at the end of the year, if they chose to, some money could be given to schools from reserves. That is the freedom for local government. Whose judgment should it be that that money is better kept in councils' coffers than spent on services that they are there to deliver?

In our previous debates, the Minister said that this provision will come into play only where an authority ignores the advice of its chief financial officer. But it is quite within the bounds of possibility for that to happen. A chief financial officer's duty is to protect the financial standing of the council. A leader's duty, for example, with regard to children's services, is to ensure appropriate levels of funding. Money is extremely tight. These judgments are finely balanced. At the end of the day, because the Government lay different responsibilities on councils, they might reach different views.

I am trying to be helpful by showing that these issues are not quite as black and white as they are presented. We think that this clause should be removed. We disagree with it fundamentally. It is against local authorities of all parties. This is Third Reading and the amendment would put in the Bill a restriction on the possible scope of the exercise of this provision. People in local government object to the breadth of a power that even the Government admit they do not wish to apply generally. Why not limit the scope of the power to those authorities that are on course to overspend? On that basis, on the latest Audit Commission figures, that would bring about 6 per cent of authorities within the scope of these powers.

Ministers opposite have a great deal of experience and political wisdom. I hope that they will accept the amendment in the spirit in which it is tabled. It moves the argument forward in a practical way and makes the best of a bad job. I beg to move.

4 p.m.

Baroness Hamwee

My Lords, we support this amendment. The noble Lord listed those organisations and individuals with whom his Benches agreed in their criticism of the provisions. I would add to that list the noble Lord, Lord Smith of Leigh. I am sorry he is not in his place. At an earlier stage of this Bill he asked whether the Government really wanted this power because it would he so difficult to exercise. However, difficulty for the Government is not one of the problems I seek to address in supporting the amendment and opposing the provision in the Bill which it seeks to dilute. I said at Report that autonomy in local government, as elsewhere, requires capacity building. The more provisions in place which say, "Here is your freedom and flexibility but we retain a reserve power to take it away", the more that undermines autonomy. It undermines the capacity of individuals whom we seek to attract into public service which as we know, is a huge issue.

Chief finance officers do not get where they are through being irresponsible. If anything, they are a pretty cautious breed. I prefer to see authorities relying on the judgment not just of the politicians but also of the professional officers—I use the term professional in every sense of the word. I am surprised that the noble Lord, Lord Hanningfield, thinks that as many as 6 per cent of authorities might be on course to exceed the 10 per cent limit. I thought that this was a pretty smart clause because it will probably mean that almost no authorities will come within it. This is based on my limited experience of observing other authorities. This amendment is an interesting and fruitful way to reduce the impact of this clause, with which we, the LGA and CIPFA do not agree. We support this amendment.

Lord Bassam of Brighton

My Lords, I appreciate why noble Lords have tabled this amendment. The noble Lord, Lord Hanningfield, has made the point that it is perceived as an unnecessary burden on well managed authorities. I shall explain very carefully why we are continuing to resist this amendment to the new clause. I must set out why Part 2 needs to remain of general application and—this is important—why the particular form of the new clause makes it an undesirable addition to the Bill.

We have argued throughout that the powers and duties in Clauses 25 to 29 should apply to all authorities. I will come to Clause 30 later. We are not doing this because we wish to impose additional duties on authorities. These duties need to apply to all authorities because no criteria for selection will reliably identify the authorities that are in danger. The well run authorities with sound finances and sound procedures will automatically be complying with these duties and will feel no extra burden. The authorities that the noble Lord leads and the noble Baroness, Lady Hanham, has worked so tirelessly for, like the noble Baroness, Lady Hamwee, and many others, will experience no additional burden. But authorities change, and we regard these requirements as too important for their application to depend on anyone's assessment of the past performance of the authority or forecasts of its future.

All these clauses do is require authorities to comply with good practice. Most authorities already do so, but we have set out on a number of occasions during these debates the evidence that has led us to conclude that this good practice must be backed by statute. The need for sound finances is all the greater when major new financial freedoms are being given. Let me say again that the Government regard the provisions of Part 2 as an essential complement to the freedoms given elsewhere in the Bill and in particular to the prudential system.

Turning now to the specific requirements of the new clause, the trigger for the application of Part 2 will be identification by the Audit Commission that the authority is at risk of overspending by more than 10 per cent. Assuming that was a practical proposition for the Audit Commission—and that is a very big assumption—what would be the implications of this risk for the finances of the authority? Say there was a risk of overspending by less than 10 per cent—say 8 per cent—but the authority only held reserves of two per cent of its budget. The authority would be at serious financial risk, but the new duties and powers of Part 2 would not be available.

Perhaps a real life example would help noble Lords to focus on this issue. When the chief finance officer of Hackney issued his Section 114 report in October 2000 he estimated an overspend of between £14.5 million and £22 million. The reserves were £6.5 million. The general fund budget for the year was £264 million. The reserves were therefore insufficient, but the projected overspend was less than 10 per cent of the budget. The Audit Commission, even if it could have foreseen that development, would not have identified Hackney under the new clause. So the Part 2 provisions would not have applied in one of the most serious financial crises to have hit a local authority in recent years. On the other hand, authorities at risk of overspending by more than 10 per cent might hold reserves adequate to cover this risk. There would be no reason to put them on what would certainly be seen as an Audit Commission blacklist.

The amendment runs into precisely the objection to crude rules of thumb that we have been accused of in Government. The advice on reserves that a chief finance officer will give under Clause 25 will be tailored to the circumstances of the authority. As the noble Baroness said, these chief finance officers are very wise people. And we have made clear that Clause 26 will not be used to impose blanket minima, but will be applied only to specific authorities. If a minimum was set under Clause 26, we would only do that after considering the advice of the chief finance officer and any observations of the auditor.

I would now like to turn to Clause 30. Clause 30 is a facility that helps authorities in serious financial difficulty deal with their problems. It has received a warm welcome in local government and from the LGA in particular. But the new clause says that it would only be available to authorities on the Audit Commission blacklist. Yet unforeseen financial crises can hit any authority. A major legal case, for example, might be lost unexpectedly and the authority be unable to cope with the damages awarded. It would be absurd to deny an authority the benefits of Clause 30 because it had not been put on the blacklist. This is another example of the perverse effects of this amendment. I seriously caution the noble Lord to think long and hard about those perverse effects.

To sum up, this amendment does not achieve its aims. It does not accurately identify the authorities in financial danger. It risks prejudicing the financial reputation of authorities with sound finances, and it denies most authorities the benefit of Clause 30. It would be a highly undesirable change to introduce into the Bill, and I hope the noble Baroness and the noble Lord will rethink this carefully and agree to withdraw their amendment. I fear its consequences.

Lord Hanningfield

My Lords, I am very disappointed in the Minister's reply. It shows how out of touch he is with local government since he came to the Government Front Bench. Local government has changed a lot in the last two or three years, due to the policies of this Government. We have comprehensive performance assessment. I am a leader of a local authority as well as a Member of your Lordships' House. I see an auditor who looks after Essex County Council and all the district authorities in the county and meets with them about once a month. This is something new. We discuss the finances and the problems of that authority with the Audit Commission, so a report goes straight back all the time. Therefore, all the authorities in the land have a regular assessment of what they are doing, almost monthly. That is very new and operates in such a way as to make one feel that one is having an exam every month by the Audit Commission, which I do not feel is necessarily the right way to run local government.

This is the part of the Bill that local authorities dislike the most. Local authorities are increasingly being told by the national government how they should spend their money and what they should do. That has inevitable consequences for council tax. The noble Lord, Lord Rooker, argued in his first response about higher taxes, but this clause means higher taxes. Once we start off with one or two authorities, all authorities will be affected. Authorities are told how much they have to give schools and how much they have to have in their reserves, and the consequences are higher council taxes. Judgments about council taxes are much better left to the local authority. Decisions on levels of reserves are better left to the local authorities and their professional advisers, as the noble Baroness, Lady Hamwee, said.

The Minister's reply was disappointing. It shows that he does not really understand the unhappiness that local government feels about this part of the Bill—which is supposedly about freedoms and flexibilities—or the effect that CPA has had on the monitoring of local authorities, or how different the situation is now.

The amendment that we have tabled would at least limit the scope, and one hopes that it would be less than 6 per cent. The scope that the Government wish to take in the Bill is very dangerous. The amendment would limit the possibility of damage. I wish to test the opinion of the House on the amendment.

4.12 p.m.

On Question, Whether the said amendment (No. 5) shall be agreed to?

Their Lordships divided: Contents, 145; Not-Contents, 126.

Division No. 2
CONTENTS
Aberdare, L.	Lane of Horsell, L.
Addington, L.	Livsey of Talgarth, L.
Alderdice, L.	Lucas, L.
Allen by of Megiddo, V.	Luke, L.[Teller]
Anelay of St Johns, B.	Lyell, L.
Ashcroft, L.	McColl of Dulwich, L.
Astor of Hever, L.	MacGregor of Pulham Market, L.
Avebury, L.
Barker, B.	Mackie of Benshie, L.
Blackwell, L.	McNally, L.
Blatch, B.	Maddock, B.
Bridgeman, V.	Mar and Kellie, E.
Bridges, L.	Marlesford, L.
Brooke of Sutton Mandeville, L.	Masham of Ilton, B.
Brougham and Vaux, L.	Mayhew of Twysden, L.
Buscombe, B.	Miller of Chilthorne Domer, B.
Byford, B.	Molyneaux of Killead, L.
Caithness, E.	Montrose, D.
Campbell of Alloway, L.	Mowbray and Stourton, L.
Carlisle of Bucklow, L.	Moynihan, L.
Carnegy of Lour, B.	Murton of Lindisfarne, L.
Chadlington, L.	Newton of Braintree, L.
Chalfont, L.	Noakes, B.
Cope of Berkeley, L.	Northbrook, L.
Courtown, E.	Northesk, E.
Crathorne, L.	Northover, B.
Crickhowell, L.	Norton of Louth, L.
Dahrendorf, L.	O'Cathain, B.
Deedes, L.	Palmer, L.
Denham, L.	Park of Monmouth, B.
Dixon-Smith, L.	Parkinson, L.
Dundee, E.	Patten, L.
Eden of Winton, L.
Elles, B.	Pearson of Rannoch, L.
Elliott of Morpeth, L.	Peyton of Yeovil, L.
Elton, L.	Phillips of Sudbury, L.
Falkland, V.	Plumb, L.
Feldman, L.	Quinton, L.
Fookcs, B.	Rawlings, B.
Freeman, L.	Reay, L.
Geddes, L.	Redesdale, L.
Goodhart, L.	Rennard, L.
Greenway, L.	Roberts of Conwy, L.
Hamwee, B.	Rodgers of Quarry Bank, L.
Hanham, B.	Rogan, L.
Hanningfield, L.	Roper, L.
Harris of Richmond, B.	Rotherwick, L.
Henley, L.	Russell, E.
Higgins, L.
Hodgson of Astley Abbotts, L.	Ryder of Wensum, L.
Hooper. B.	St.John of Bletso, L.
Howe, E.	StJohn of Fawsley, L.
Howell of Guildford, L.	Saltoun of Abernethy, Ly.
Hunt of Wirral, L.	Sandberg, L.
Hurd of Westwell, L.	Seccombe, B. [Teller]
Hylton, L.	Selsdon, L.
Jellicoe, E.	Sharman, L.
Jenkin of Roding, L.	Sharp of Guildford, B.
Kimball, L.	Sharpies, B.
Knight of Collingtree, B.	Shutt of Greetland, L.
Laird, L.	Simon of Glaisdale, L.
Lamont of Lerwick, L.	Skelmersdale, L.

Smith of Clifton, L.	Thomson of Monifieth, L.
Stevens of Ludgate, L.	Tordoff, L.
Stewartby, L.	Trumpington, B.
Stoddart of Swindon, L.	Tugendhat, L.
Strathclyde, L.	Ullswater, V.
Swinfen, L.	Waddington, L.
Taverne, L.	Wade of Chorlton, L.
	Wakeham, L.
Tebbit. L.	Walmsley.B.
Thatcher, B.	Warnock, B.
Thomas of Gwydir, L.	Williams of Crosby, B.
Thomas of Walliswood, B.	Willoughby de Broke, L.

NOT-CONTENTS
Acton, L.	Hunt of Chesterton, L.
Alli, L.	Hunt of Kings Heath, L.
Archer of Sandwell, L.	Irvine of Lairg, L.
Ashley of Stoke, L.	Islwyn, L.
Ashton of Upholland, B.	Janner of Braunstone, L.
Barnett, L.	Jay of Paddington, B.
Bassam of Brighton, L.	Jones, L.
Berkeley, L.	Judd, L.
Bernstein of Craigweil, L.	King of West Bromwich, L.
Billingham, B.	Kirkhill, L.
Blackstone, B.	Layard, L.
Boothroyd, B.	Lea of Crondall, L.
Borrie, L.	Lipsey, L.
Brooke of Alverthorpe, L.	Lofthouse of Pontefract, L.
Burlison, L.	McCarthy, L.
Campbell-Savours, L.	Macdonald of Tradeston, L.
Carter, L.	Mclntosh of Haringey, L.
Christopher, L.	Mclntosh of Hudnall, B.
Clarke of Hampstead, L.
Clinton-Davis, L.	MacKenzie of Culkein, L.
Cohen of Pimlico, B.	Mackenzie of Framwellgate, L
Corbett of Castle Vale, L.	Mallalieu, B.
Craig of Radley, L.	Marsh, L.
Crawley, B.	Mason of Barnsley, L.
David, B.	Massey of Darwen, B.
Davies of Coity, L.	Merlyn-Rees, L.
Davies of Oldham, L. [Teller]	Mitchell, L.
Dean of Thornton-le-Fylde, B.	Morgan, L.
Desai, L.	Morris of Aberavon, L.
Dixon, L.	Morris of Manchester, L.
Donoughue, L.	Nicol, B.
Dormand of Easington, L.	Orme, L.
Dubs, L.	Patel of Blackburn, L.
Elder, L.	Pendry, L.
Erroll, E.	Peston, L.
Evans of Parkside, L.	Pitkcathley, B.
Evans of Temple Guiting, L.	Prys-Davies, L.
Falconer of Thoroton, L. (Lord Chancellor)	Puttnam, L.
	Radice, L.
Farrington of Ribbleton, B.	Ramsay of Cartvale, B.
Filkin, L.	Randall of St. Budeaux, L.
Finlay of Llandaff, B.	Rendell of Babergh, B.
Fitt, L.	Richard, L.
Fyfe of Fairfield, L.	Richardson of Calow, B.
Gale, B.	Roll of Ipsden, L.
Gavron, L.
Gibson of Market Rasen, B.	Rooker, L.
Golding, B.	Sawyer, L.
Goldsmith, L.	Sheldon, L.
Gould of Potternewton, B.	Simon, V.
Graham of Edmonton, L.	Smith of Gilmorehill, B.
Grocott, L.[Teller]	Smith of Leigh, L.
Harrison, L.	Stone of Blackheath, L.
Haskel, L.	Strabolgi, L.
Haskins, L.	Symons of Vernham Dean, B.
Hayman, B.	Temple-Morris, L.
Hilton of Eggardon, B.	Tomlinson, L.
Hogg of Cumbernauld, L.	Turnberg, L.
Hollis of Heigham, B.	Turner of Camden, B.
Howie of Troon, L.	Varley, L.
Hughes of Woodside, L.	Walpole, L.

Wedderburn of Charlton, L.	Williams of Mostyn, L. (Lord President of the Council)
Whitaker, B.
Whitty, L.	Williamson of Horton, L.
Williams of Elvel, L.	Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.

4.24 p.m.

Lord Jenkin of Roding

moved Amendment No. 6: After Clause 43, insert the following new clause—

"REVIEW OF PROPERTY OWNERS' CONTRIBUTION TO BIDS

(1) It shall be a duty of the Secretary of State to appoint an independent person to conduct a review of property owners' involvement in, and financial contribution to, BIDs.

(2) Such a review should be completed by September 30th 2005.

(3) The Secretary of State shall no later than three months after the completion of the review lay before Parliament a report—

1. (a) summarising the results of the review; and
2. (b) stating, with reasons, whether or not legislation should be introduced to require property owners to make a financial contribution to BIDs."

The noble Lord said: My Lords, I am sure that this amendment is of some discomfort to the Minister and the noble Baronesses, Lady Hamwee and Lady Maddock.

Lord Peston

My Lords, before the noble Lord proceeds, perhaps I may say that we are at Third Reading. The Companion to the Standing Orders is very clear on what it is permissible to do at that stage. We have been breaking that rule for the past hour. There are several amendments in the Marshalled List which cannot remotely fit in with what is said in the Companion. To bring in an entirely new clause tests the patience and the general proprieties of your Lordships' House beyond endurance.

Could someone advise us on whether we have abandoned the Companion and self-regulation and that a free-for-all is permissible at all stages of a Bill or do we have rules in this House? Could we have an answer to this question before we proceed?

Lord Tordoff

My Lords, the answer to the question is that there is no one who can stop it except the House itself. We are a self-regulating House, which is not doing so at the moment. This may be a matter to be considered by your Lordships' Select Committee, which is looking at certain matters regarding the speakership.

I agree with the noble Lord, Lord Peston. I am becoming increasingly fed up with the fact that Third Reading is being turned into Committee: the same arguments are being deployed. Unless some really new matter has arisen, to introduce a new clause seems to be outside the terms of the Companion.

Earl Russell

My Lords, if Third Reading is being turned into Committee, is that not in part because we are not exercising our right to vote at that stage so that business is not disposed of at an earlier stage?

The Earl of Erroll

My Lords, I support what the noble Earl has said. I remember that there were far more votes taken at Committee in the old days so that one disposed of most of the material then. Report stage involved tidying up and Third Reading was a formality. Because so much material is being introduced, people are now keeping the real fight to Report stage: everything is being delayed by one stage. I believe that is where some of the problem lies.

Lord Barnett

My Lords, I point out that Paragraph 6.132 of the Companion states that, The principal purposes of amendments on third reading are: to clarify any remaining uncertainties; to improve the drafting; and to enable the government to fulfil undertakings given at earlier stages of the bill". It may be that the noble Lord, Lord Jenkin of Roding, can tell us how his amendment fits into any one of those three points. It is not clear to me.

Lord Jenkin of Roding

My Lords, perhaps I may now proceed. With the greatest respect to the noble Lord, Lord Peston, he might have waited to see what the amendment was about. He used the phrase "a totally new clause". In the first two or three lines I am going to explain the past history of the matter in Committee, on Report, and why it is entirely reasonable that we should suggest this proposed change at Third Reading having regard to the fact that the Committee stage was held in the Moses Room where no votes are taken. Report introduced a new element when the noble Lord, Lord Rooker, gave a commitment to a review. It is simply now a question of trying to make the review statutory. I believe that it is an entirely appropriate point to raise at Third Reading and I hope that I shall be allowed to get on with it.

Lord Peston

My Lords, I am truly sorry to interrupt the noble Lord. I am sure he believes that he is acting in our best interests, but unless the English language has lost all meaning it is incompatible with the Companion and with self-regulation and proceeding in a proper way, to which most of us have devoted our time

I apologise to the noble Lord in one respect. His amendment arises at a relevant time to raise a matter generally. The point I make is even more general. Several other amendments are about to be moved which also break the rules. I am totally in agreement with the noble Lord. Lord Tordoff. The trouble is that there is no one in the House who appears to be willing to take responsibility for dealing with the matter. It is ridiculous that Back-Benchers such as myself and the noble Lords, Lord Tordoff and Lord Barnett have to raise the issue. There should be someone else who pronounces so that the House can return to its proper way of behaviour. All I can do is to go on record as deploring what appears to have happened to your Lordships' House.

Baroness Hanham

My Lords, the amendment almost certainly falls within Paragraph 6.132 of the Companion, which states, to clarify any remaining uncertainties". There have been uncertainties about this matter throughout and we have had to continue to adapt to them. Noble Lords have raised a very valuable point about not being able to vote at Committee. One stage of the Bill is truncated in terms of testing the response of the House.

4.30 p.m.

Lord Williams of Mostyn

My Lords, my noble friend Lord Peston may have been referring obliquely to me when he said that someone should stand up. If I had any marginal uncertainty, the noble Baroness, Lady O'Cathain, urged me vigorously to stand up.

I was not prepared to give any advice on this amendment to your Lordships, should it have been wanted, but my noble friend Lord Peston referred to two subsequent amendments. On this amendment, would it he a prudent course to note the various stances adopted and to bear in mind that there is currently a Committee on the Speakership of the House? If my noble friends Lord Peston and Lord Barnett feel it appropriate, they might wish—if they have not already done so—to make representations there. It may be convenient for your Lordships to hear the advice I am tendering on the basis of advice that I have received from the Clerks.

The other two amendments that might have been challenged—perhaps it is convenient to deal with them all now—are Amendment No. 13 in the name of the noble Baroness, Lady Blatch, and Amendment No. 19 in the name of the noble and learned Lord, Lord Brightman. The Clerks have given careful attention to the matter and they have come to the conclusion, and advised me, that neither Amendments Nos. 13 nor 19 fall foul of the rule in paragraph 6.133 on page 126 of the Companion.

Amendment No. 13 introduces a new issue. It has not been disposed of at an earlier stage, so it does not fall foul of paragraph 6.133 on the advice I have received because it deals with the conditions of local authority workers. Amendment No. 19 is different from the amendment of the noble Baroness, Lady Blatch, on Section 28. Some of your Lordships feel that Third Reading is not the time or place for amendments, but that is a different view.

That is the advice I have received from the Clerks, which I am transmitting to your Lordships. It does not relate to the amendment or point made by the noble Lord, Lord Jenkin, but I respectfully suggest that if one got to the substance of the matter, recording and inwardly digesting the view of my noble friends Lord Peston and Lord Barnett, which might be taken up by the Committee on the Speakership, that might be a convenient way of attempting some progress.

Lord Jenkin of Roding

My Lords, I am grateful to the noble and learned Lord the Leader of the House for recognising that the strictures probably do not apply to Amendment No. 6. I am also grateful to the noble Lord, Lord Peston, who indicated briefly that he was prepared to accept the same view. In the course of moving the new clause I hope to justify the view he took.

This is the third attempt on this side of the House with the support of the Liberal Democrats to remedy what is widely seen as a major lacuna in Part 4 of the Bill which deals with business improvement districts. Almost all of those concerned with the issue have welcomed Part 4, which was heralded by the Prime Minister in a major speech to local government in April 2001. It is certainly welcomed on all sides of the House.

Part 4 establishes a new procedure whereby business ratepayers can vote to pay an extra levy to fund specific improvements in a defined area of their town. If the vote is carried, then all will pay, subject to any exceptions spelt out in the scheme; that way there are no free riders. But only the occupiers of property have such a vote. If the vote is carried then only occupiers—that is to say ratepayers—can be made to pay.

Part 4 does not give any vote to the occupiers' landlords; the property owners. They can contribute, and those who choose to pay do so, but those who choose not to pay are free to enjoy any benefits of the improvements without contributing to the cost. That is a familiar problem, which I call "free riders".

Yet it has been comprehensively acknowledged by the Government at every stage of the Bill that property owners are often the prime movers in BID schemes. It has been perfectly clear that most schemes would not get off the ground without substantial owner leadership and financial support.

I come to the point that I believe is behind the complaint of the noble Lord, Lord Peston. In Committee amendments were tabled and debated at length to include property owners in Part 4. They were resisted by the Government—I hope I shall summarise the arguments fairly—because they were seen as a new tax on property owners, the introduction of which would require a considerable new administration that would fall mainly on local authorities, which collect the rates and the occupiers' levy. They would have to set up registers of land ownership and establish who should pay the BID levy and so on. I hope that that is a fair description of Ministers' arguments.

In Committee, the noble Lord, Lord Rooker, went further, and threatened that if the amendment were carried and the House insisted on writing it into the Bill, the Government would simply move to remove Part 4 altogether and the BID proposals would be stillborn. So we did not press the amendment; indeed one would not have been able to do so in the Moses Room.

On Report, another tack was tried. It was accepted that the provision could not be introduced in the Bill for the reasons spelt out by the noble Lord, Lord Rooker, but amendments were tabled to give power to add to the owners' levy by order so as to avoid having to come back to Parliament for fresh primary legislation. Ministers liked that even less; introducing a new tax by statutory instrument appeared to offend them grievously.

Instead, the noble Lord, Lord Rooker, offered a review of the experience of BID schemes with the implication that if it is established that the exclusion of owners from any statutory rights and obligations under the BID scheme is harming the scheme, and if a case is made out for including them, that could be the subject for further legislation. The promise of a review was reinforced in a full letter of 25th July from another Minister in the Office of the Deputy Prime Minister, Mr Nick Raynsford to Sir Ian Henderson, who is the chief executive of the British Property Federation.

The prime purpose of the new clause is to make the review a statutory obligation, so in a sense it follows directly—if I may say so to the noble Lord, Lord Peston—as a consequence of what was offered on Report. I hope that it would be held to fall within the Standing Orders. It also takes the opportunity to provide for an independent person to conduct the review and for a shorter timescale for the review than that set out in Mr Raynsford's letter.

Mr Raynsford's letter spelt out the timetable envisaged by the Government. I hope that the House will bear with me, because it needs to be spelt out in full: The review … will have three stages. Firstly it will examine the ways in which the BID pilot projects have engaged property owners in the setting up of the BID and how effective this has been. This first stage will take place in the autumn of 2004 when we believe some of the BID pilots will be established. However, the review cannot simply examine lessons learned from the pilots because the pilots are receiving particular support and advice. Therefore the second stage of the review will examine how successful BIDs are at engaging property owners when they are evolving independently. This part of the review will take place throughout 2005 when we expect to see some BIDs established which have not been involved in the pilots … the third stage of the review will seek to measure the continuing involvement of property owners in BIDs once the initial results from their investment are evident. This means that BIDs that have already been established will be monitored throughout 2006, with the review drawing to a conclusion in January 2007".

That is gold-plating the review and taking an extended period before there can be any question of coming back to legislate to fill what many see as a great lacuna in the Bill. It is not acceptable to the property interests, who are the people who are primarily developing the BID process. I am very grateful to Mr Raynsford and to the noble Lord, Lord Rooker, for arranging a meeting on Monday at the ODPM where those matters were discussed with some of the representatives of the organisations involved. At the meeting, the property and retail sectors told the Minister that a large number of BIDs are planning to start collecting their BID levies from April 2005, covering the billing year 2005–06. From that date, it should therefore be apparent whether landlords are being involved and involving themselves in the BID planning process. Clearly, they told Ministers, that would give a good indication of whether a broad cross section of landlords are contributing funding, sitting on the BID boards and generally participating. If they are not, it was said, surely it would be prudent for the Government to take remedial action as quickly as possible rather than waiting until 2007 for the conclusion of the extended review process. One must also bear in mind the inevitable delay after that while legislation is considered, while there is consultation on it, and when it can be introduced and taken through Parliament.

So what this new clause is proposing is that the review should be complete by the end of September 2005, compared with the Minister's date of January 2007. That would be followed by a report within three months. I feel that that is a perfectly adequate time to conduct a proper review.

The second point is that an independent review seems to me desirable to avoid any suspicion that the review would be coloured by the department's much-trumpeted reluctance to envisage having to introduce an owner levy. It seems to me—although I am sure that whoever is appointed by the ODPM to carry out the review will do his best—that it has taken a very firm view on this and would in effect be reviewing its own decisions.

The third point—and this is the one that I think Ministers really do have to take on board—is the question of making it a statutory review. This proposal reflects the fact that occupiers—which include, for example, the retailers and the occupiers of offices and bodies such as the British Retail Consortium—are deeply disappointed that there is no formal mechanism for requiring property owners to contribute to BIDs. They say that a statutory review would carry more weight in occupiers' negotiations with landlords to make voluntary contributions. The message would he that there is to be a statutory review. If landlords do not contribute voluntarily, then Parliament and the government of the day will consider whether they should be required to contribute compulsorily.

The strength of the message that a statutory review conveys would also provide those enlightened landlords who are prepared to participate with a greater degree of comfort that the issue of landlords' contributions remains one that the Government and Parliament are monitoring. The British Property Federation reports that many landlords in its membership are looking for a clear steer from Government that they will monitor the problem of free-riding from other landlords. A statutory review provides the clearest signal that that would be the case.

None of us mistrusts Ministers' good intentions, and there is no suggestion to that effect; not a bit of it. It is that with this new clause incorporated in what will be the Act, it will be much easier to convince doubting owners to stick with the BID process. That will help to ensure that the Prime Minister's aspirations for BIDs will actually be delivered. If those seem familiar words, they are quite deliberately put. It is turning aspirations into action and delivery.

I cannot for the life of me see why the Government should not accept this new clause as it stands. I beg to move.

Baroness Hanham

My Lords, I rise briefly to support my noble friend on Amendment No. 6. He has been very consistent through the course of these proceedings in trying to find a way whereby landlords can be harnessed into the BIDs process. I say to the noble Lord, Lord Peston, that a consistent theme throughout our consideration of the Bill has been how to harness owners into the BID process so that they are a committed part of it. A number of ways have been tried. This proposal seems to have all but the Minister's blessing for the review to be completed by an earlier date. I very much hope that the Government will accept that this is a sensible and time-rational way forward and accept the amendment so that we can move on with the support of everyone, including the landowners, who are very willing to be involved.

Baroness Hamwee

My Lords, as the noble Baroness has just said, property owners—landlords—are offering to pay money. I hope that the Minister, on behalf of the Government, will accept that offer with open arms. To do anything else would be bizarre.

4.45 p.m.

Lord Rooker

My Lords, notwithstanding the points made by the noble Lord, Lord Jenkin, it would probably be bizarre to accept the amendment at this late stage of the Bill. Although it is a very seductive proposition—all these people queuing up wanting to pay money—at the end of the day, I do not think that it would work out quite like that. I shall not go over the issues that we addressed previously. The noble Lord, Lord Jenkin, stuck to the issue—that the new clause has been tabled essentially because, not to put too fine a point on it, no one takes my word in Hansard. As Ministers' statements in this House are obviously not acceptable to businesses, they want this provision on the statute book. On the other hand, on the issue of owners and taxation, as I hope I made clear in Committee and at Report stage, one cannot introduce a new tax by way of statutory instrument. That would require much more fundamental legislation and major changes in, for example, the sanctions which we discussed in Committee.

We do not think that the amendment is necessary simply because, as I said, I gave assurances both in Grand Committee and on Report that the Government will undertake a review of the role of property owners in BIDs. Conversely, we would be stupid to look a gift-horse in the mouth if, as a result of introducing the BIDs—which everyone fully accepts is a first-class idea—there were a way of including property owners. The idea was not in the Bill initially, but to exclude it would he to look a gift-horse in the mouth. So we want to have a review, and we will have a review.

I detected a certain tone in the comments of the noble Lord, Lord Jenkin. I should perhaps say that my ministerial colleague Nick Raynsford is the policy Minister responsible for this matter. As the noble Lord is a former Secretary of State, he knows how the system works. I am not the policy Minister on this; I am simply here to speak for the Government on behalf of my colleague in another place. Nick Raynsford met the noble Lord during the week, and he has written to interested parties outlining the review process. So the lead policy Minister has written to the industry, and I have made statements in this House.

I have been told to my face that we may not be in government when the review comes round—but so what? The civil servants are going to be there. The policy enunciated will still be there—the policy will not change. The Government have given a firm commitment on the Floor of this House. That can always be repeated in another place by means of Parliamentary Questions; there is no problem about that. There has also been a firm commitment in writing to the industry. We think that that is sufficient. We do not believe that a statutory obligation to do that should be necessary to persuade property owners that we are telling the truth and mean what we say.

The amendment seeks to limit the time period for the review to September 2005. We believe that that would undermine the credibility and effectiveness of the review. The British Property Federation, in previous discussions, has pointed out that the review must examine the way in which property owners are engaged in BIDs—or business improvement districts, for those watching us on the telly, which I suspect is nobody.

Noble Lords

Oh!

Lord Rooker

My Lords, the BBC keeps telling us that the House of Commons is back. To the BBC, the House of Commons is Parliament. That is how it works, is it not? I should not have said that. I did so only because I did not want to use the jargon. I shall repeat the sentence. The British Property Federation, in previous discussions, has pointed out that the review must examine the way in which property owners are engaged in BIDs—business improvement districts—over a couple of years to ensure that they do not renege on promises of support when the initial wave of enthusiasm dies down.

The form of the review that we have proposed seeks to meet those concerns. The first phase of the review will evaluate the BID pilot projects and other voluntary BID schemes to see whether property owners are being effectively engaged with business improvement districts at an early stage. We are already preparing to begin this first phase which will start in the autumn of 2004 and conclude in 2005. During 2005 and 2006 the review will focus on the business improvement districts that are up and running and that are preparing to begin. We do not realistically expect that more than a handful of business improvement districts will be up and running until 2005. One must be realistic. This is quite new. Therefore, that phase shall be vital to ensure that a thorough review takes place. The noble Lord's amendment would make that time too short.

The third stage of the review will focus on BIDs that have been up and running for 18 months to 2 years to check that property owners are still involved. However, if after stage two of the review, or even stage one, it becomes clear that there is almost no proper engagement of property owners in BIDs, continuing with stage three may not be appropriate. We are willing to be flexible in that respect. However, we are not willing to commit to a timetable before the outcome of the first stages of this review can be anticipated.

The noble Lord, Lord Jenkin, asked, as does the amendment, that an independent person be appointed to conduct the review. I was present at the meeting on Monday. I have not checked any of the notes, but so far as I know we did not discuss the independent person, because nobody offered to pay for them. I note that the appointment would be made by the Secretary of State—the Deputy Prime Minister. The argument could be, "Well, if we have appointed him, we are going to have to pay the salary and the fees". Where is the independence? I have to be careful. Nobody offered to put a kitty together to pay. Already our word is not taken on the Floor of the House that we will conduct the review. There is an insistence to put that into the Bill. Our faith is being questioned. This is not a personal matter between myself and the noble Lord, but that is the bottom line. The industry wants the matter on the face of the Bill. We could argue until the cows come home over how independent this person should be and who should pay for him. It should not be ourselves, because we would be held to be paying for that independent review, which would, therefore, not be independent.

The Office of the Deputy Prime Minister will have overall responsibility for co-ordinating the review, but a steering group of interested parties will be convened to oversee its progress. The representatives on this steering group have yet to be confirmed but I can assure the House that they will include property interests, business interests, as well as those with regeneration and town centre management experience. We will be happy to publish progress reports at the end of each stage of these reviews, a copy of which will be placed in the Libraries of both Houses and will be made available to the public.

We have every intention of conducting this review methodically and fairly. I have said before that at the end of the day we would be stupid to look a gift horse in the mouth if there was a way of allowing the property owners to be involved. It was impossible to do that in this Bill because it would be a new tax involving the whole system of collection, whereas the existing system based on the rates of the people who tenant the properties is already there. We are building on an existing system with no new infrastructure. My right honourable friend the Minister for Local and Regional Government, Nick Raynsford, and I have both given clear assurances. I repeat them today on behalf of the Deputy Prime Minister. I see no need for this amendment. I make no criticism of the effort to put these views on the record. Therefore, I hope that this will be taken as gospel by the property interests in that I mean what I say. If I go tomorrow, the person following me will say exactly the same things.

Lord Jenkin of Roding

My Lords, in a brief reply I wonder if the Minister would go just one stage further? Would he offer to publish interim reports as the review proceeds, so that if after the first wave it appeared that there was a serious problem of keeping property interests involved, at least that would become apparent? If the noble Lord could meet us in that way, perhaps we might save him some embarrassment.

Lord Rooker

My Lords, I shall repeat what I said. We have talked about a three-stage review, where we publish progress reports at the end of each stage. I cannot promise any more than that. I believe that I am being wholly reasonable. We will have representatives on a steering group to oversee the way the review is going—with property interests, business interests, and those with town centre management experience. What more can I offer?

Lord Jenkin of Roding

My Lords, I recognise, as a former Treasury Minister, that, subject to the inevitable Treasury constraints on this sort of matter—we had a brief word about that in Monday's meeting—the noble Lord and his colleague Mr Raynsford have gone probably about as far as they can. I hope that the Minister will recognise that the importance of this matter is all about putting the argument to doubting property owners. With the reinforcement that he has given, and with his putting the name of the Deputy Prime Minister behind it, I hope that the property interests concerned might be prepared to take that as a sufficient guarantee that their interests will be properly safeguarded by the review. In these circumstances it would be churlish to press the matter to a Division, although I came into the House firmly prepared to do just that. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bassam of Brighton

moved Amendment No. 7: After Clause 63, insert the following new clause—

"RELIEF FOR REGISTERED COMMUNITY AMATEUR SPORTS CLUBS

(1) In section 43 of the 1988 Act (occupied hereditaments: liability), in subsection (6) (calculation of chargeable amount where ratepayer is a charity and hereditament is occupied for charitable purposes)—

1. (a) the words after "on the day concerned" become paragraph (a) of that subsection, and
2. (b) after that paragraph there is inserted ", or
3. (b) the ratepayer is a registered club for the purposes of Schedule 18 to the Finance Act 2002 (community amateur sports clubs) and the hereditament is wholly or mainly used—
1. (i) for the purposes of that club, or
2. (ii) for the purposes of that club and of other such registered clubs."

(2) In section 45 of the 1988 Act (unoccupied hereditaments: liability), in subsection (6) (calculation of chargeable amount where ratepayer is a charity and hereditament will next be used for charitable purposes)—

1. (a) the words after "on the day concerned" become paragraph (a) of that subsection, and
2. (b) after that paragraph there is inserted ", or

(b) the ratepayer is a registered club for the purposes of Schedule 18 to the Finance Act 2002 (community amateur sports clubs) and it appears that when the hereditament is next in use—

1. (i) it will be wholly or mainly used for the purposes of that club, and that club will be such a registered club, or
2. (ii) it will be wholly or mainly used for the purposes of two or more clubs including that club, and each of those clubs will be such a registered club."

(3) In section 47(2) of the 1988 Act (first condition for discretionary relief), after paragraph (b) there is inserted — (ba) the ratepayer is a registered club for the purposes of Schedule 18 to the Finance Act 2002 (community amateur sports clubs), and the hereditament is not an excepted hereditament and is wholly or mainly used—

1. (i) for the purposes of that club, or
2. (ii) for the purposes of that club and of other such registered clubs;".

(4) In section 48 of the 1988 Act (discretionary relief: supplementary), after subsection (2) there is inserted—

"(2A) A hereditament not in use shall be treated as wholly or mainly used for the purposes of a club that is a registered club for the purposes of Schedule 18 to the Finance Act 2002 (community amateur sports clubs) if it appears that when next in use it will be wholly or mainly used for the purposes of a club that is then, or two or more clubs each of which is then, such a registered club."

(5) In section 67 of the 1988 Act (interpretation of Part 3 of that Act), after subsection (10) there is inserted—

"(10A) The times at which a club is a registered club for the purposes of Schedule 18 to the Finance Act 2002 (community amateur sports clubs)—

1. (a) shall, where it is registered with retrospective effect, be taken to have included those within the period beginning with the date with effect from which it is registered and ending with its registration; but
2. (b) shall. where its registration is terminated with retrospective effect, be taken not to have included those within the period beginning with the date with effect from which its registration is terminated and ending with the termination of its registration.""

The noble Lord said: My Lords, I can see happy, smiling faces around the Chamber. I wonder why that is.

In Committee, the issue was dealt with by my noble friend Lord Rooker. He congratulated the noble Lord, Lord Phillips, on a brilliant amendment. He also said that that was followed by five brilliant speeches in support. As noble Lords are now well aware, the Government have now tabled our own amendment to that brought forward by the noble Lord, Lord Phillips of Sudbury, and the noble and right reverend Lord, Lord Sheppard of Liverpool, to reflect the all-party support that there appeared to be behind the thrust of those amendments.

I shall speak briefly to the amendments that we are proposing and then say a few words, hoping that I shall do the subject justice. Amendment No. 7 would amend the Local Government Finance Act 1988 and provide mandatory rate relief at both the occupied and unoccupied rates for registered community amateur sports clubs—CASCs—under Schedule 18 to the Finance Act 2002. Registered CASCs can also have this relief increased at the discretion of local authorities. That means that in many local authorities there will effectively be 100 per cent relief.

Sports clubs that do not meet the requirements for CASC registration and therefore mandatory rate relief will still remain eligible for discretionary relief. The decisions on those matters will rightly be a matter for individual local authorities. This will be good news for CASCs that play a valuable and influential role in promoting the health and social cohesion of their local communities, but have been unable to receive mandatory rate relief because of the complexities of charitable registration. I am sure that registered CASCs will welcome—and have already welcomed—the certainty that mandatory rate relief would provide through this much simpler route.

I am delighted that the Government have taken the initiative here. We deserve credit for recognising the important part that sports clubs play. I congratulate the noble Lord, Lord Moynihan, and the noble Lord, Lord Phillips of Sudbury, on their role in highlighting and underlining the importance of the matter. I also congratulate and thank my noble friend Lord Pendry. He discovered the important precedent that set us on this course. The move has been welcomed by the chief executive of Sport England. It has been recognised and welcomed by the Central Council for Physical Recreation. I pay tribute to their efforts over the years in arguing that case. I have volumes of correspondence going back over many years when I was leader of a local authority. The authors of that correspondence tried to persuade me to do something about the matter. The Government have acted decisively and great benefit will flow from that.

This morning I talked to the treasurer of St Peter's Cricket Club, a humble organisation which pays some £1,200 a year in rates to Brighton and Hove Council. Next year the £1,000 that it will save will be invested in its pavilion. I hope that that is replicated across the country. Derek Betts, the club's treasurer, a very careful man, tells me that the £1,000 will bring enormous benefit and enable the club to expand and extend its "colts" activity, from which my son benefits.If replicated country-wide, that kind of activity would be of enormous benefit. Credit is due to all those involved in the matter. I thank all those who argued the case for the measure. On this occasion we ought also to thank the Treasury for its magnanimity. I beg to move.

5 p.m.

Lord Phillips of Sudbury

My Lords, this is a red letter day for amateur sport in this country, not just because many millions of pounds will he retained by clubs such as St Peter's Cricket Club, Hove, as the noble Lord, Lord Bassam, indicated, but, much more importantly, because it will encourage tens of thousands of amateur sports clubs to register as CASCs.

It is worth reminding the House that this has been a four-year campaign and that this is the crowning of it. The first and crucial achievement occurred in the Finance Act 2002 when, for the first time ever, a new category of body was created—community amateur sports clubs—with exemptions from tax closely akin to those of charities. As we know, the one thing that was left out was mandatory 80 per cent rating relief. The amendment is not merely beneficial in itself—the measure will, of course, go on from year to year—but it will also unlock the uncertainty and scepticism that have, as I say, held back tens of thousands of small clubs from registering. I believe we all agree that amateur sport is not only one of the crowning cultural achievements of this country but is perhaps a greater source of local and communal pleasure than anything else.

I, too, give unstinted thanks to the noble Lords, Lord Bassam and Lord Rooker. The amendment has no enemies and at previous stages of the Bill they dealt with the matter extremely adeptly. I thank the civil servants who were involved in the matter. We have had an extremely fair and constructive hearing from the DCMS and, latterly, the Treasury. I thank the Treasury. As has been said, it had to agree to the measure and it must safeguard the public purse. I thank all noble Lords in this House, not a single one of whom has been anything but supportive of the measure. Finally—in many ways this is the most important thanks to give—I thank the sports fraternity, led, as the noble Lord, Lord Bassam, said, by CCPR. I should like to mention Nigel Hook. All in all, this is a great day and, what is more, it is a better amendment than mine because it deals with the extra 20 per cent above the 80 per cent mandatory relief and makes clear that CASCs will be entitled to the extra 20 per cent. I shall not move my amendment when we reach it. I vent a small cheer and give considerable thanks.

Lord Moynihan

My Lords, I also wish to congratulate all those involved in the long-running campaign, especially my predecessor, John Greenway, whose tireless work on the issue in another place has paid dividends today. I, too, congratulate the Central Council of Physical Recreation and add to the tributes paid to Nigel Hook, who is retiring. This is a red letter day for him. His encyclopaedic knowledge of sport and his enthusiasm are second to none. I pay tribute to noble Lords on all sides of the House, not least to the important work done over the years, characteristically diligently, by the noble Lord, Lord Pendry. I also pay tribute especially to the work done by the noble Lord, Lord Phillips of Sudbury. I thank the Ministers and the officials who accepted our case. It is a classic example of the maxim that if at first you don't succeed, try, try and try again.

This is, I hope, the first in a series of campaigns to raise the profile of sport. From these Benches we want to ensure that the importance of sport and recreation is re-established at the centre of the political agenda and is recognised as relevant to the objectives of every government department. That is why I am deeply grateful to my noble friend Lady Hanham and her team in local government for working so constructively to support 80 per cent mandatory rate relief for CASCs.

Today's victory goes to the heart of our vision for sport at the local level. It is about volunteer retention; engagement with local communities; youth involvement; the participation of the disabled in sport. It is about social inclusion and the goal of a healthier nation. It is not about today's Olympians; it is about where tomorrow's Olympians are to be found. It is an important step towards wider participation at a time when, despite, £1.6 billion going into sport from the lottery over the years, participation over that time has risen by only 0.3 per cent. That is why the litmus test of this amendment and this initiative is to increase the active membership of community amateur sports clubs. I hope that we shall be able to rectify the now unusual position that Northern Ireland faces of being worse off than the rest of the United Kingdom in respect of rate relief for amateur clubs.

In the spirit of welcoming the Government's U-turn, perhaps in conclusion the Minister can continue the spirit of co-operation and of cross-party support which should always be in the nature of the links between sport and politics, and announce today that the Government do not intend to pocket the tax from the proposed London Olympic lottery game but reinvest that tax directly into the success of the Games in London.

Lord Pendry

My Lords, I support this important amendment and I add my voice to those who have congratulated the Government on listening to those of us who have argued for years for mandatory rate relief for voluntary sports clubs.

I was particularly pleased that the noble Lord, Lord Bassam, confessed at Report stage that he was, not aware of the 65 per cent mandatory relief in Northern Ireland"—[Official Report, 16/7/03; col. 932.] with regard to voluntary clubs. He said that he would review the situation, which he did. I pay tribute to the excellent work of the noble Lord, Lord Phillips of Sudbury, who has been a great campaigner on the issue for many years, as has the noble Lord, Lord Moynihan. Our congratulations must go to them. The CCPR and Nigel Hook have also been mentioned. His voice has been loud and clear on the matter. I do not wish to say much more except that common sense has prevailed. I refer to the benefits that accrue to the people of Northern Ireland as a result of this mandatory rate relief and to the local and wider communities. As the noble Lord, Lord Moynihan, said, Northern Ireland now has some catching up to do as a result of the amendment. I welcome it wholeheartedly.

The Earl of Caithness

My Lords, while supporting the amendment, I should like to ask the Minister one technical question. Who will pay for the rate relief? Will it be the general taxpayer or business?

Baroness Billingham

My Lords, before the Minister replies to that I add my congratulations to everyone who has been involved in what is, as has been said, a red letter day for sport. When I joined the House relatively recently, I found that a huge campaign had been mounted by people who are present in the Chamber today. I pay tribute to them and recognise the work that has been done by noble Lords. I pay tribute also to the Ministers. The measure is an important example of co-operation throughout the House. The House has shown me what a good friend it is to sport. Every debate we have ever had has shown a complete consensus on all sides. Not only do we realise that sport is fun—many of us have enjoyed it and continue to enjoy it, surprisingly, far past our teenage and our early years. We also know the other benefits that accrue from it, such as health and social inclusion. For all those reasons, this is a marvellous piece of work.

I do not want people outside this Chamber to read Hansard and think that this issue is of interest only to men. I want to say thank you on behalf of all the women and girls. They, too, love their sport, and I want it to be seen both in this Chamber and outside that they welcome the amendment. It is a marvellous achievement and I congratulate everyone concerned.

But the next thing I want to say to the Minister is: now we must make it work. We have had some bad press on community amateur sports clubs and we have to put that to rights. People have been disheartened, discouraged and frightened by what they have seen as the red tape involved in setting up community amateur sports clubs. Let us join together and make sure that we send this message out now: that is in the past. The future is much simpler, much more proactive and much more likely to benefit all our communities. I thank everyone who has been involved.

Lord Bassam of Brighton

My Lords, it is nice, as a Minister, to be the recipient of congratulations, and the congratulations that have been generally disbursed are well merited. I, too, wanted specifically to mention Nigel Hook. He is to retire shortly and, in a sense, this is almost a parting gift. I know from contact with him that he is extremely grateful for what has occurred.

I take the point that this provision must be made to work. I suspect that those in the local authority sector, the CCPR, Sport England and everyone else will want to see it work, and work well. It deserves to. It will bring immense benefits to those clubs that operate at the lowest possible level. In my local authority area, some 20 sports clubs will benefit from this. This is a city with a population of a quarter of a million. We can see, if we extrapolate that, the enormous benefits that will accrue across the country.

The question was asked: who will pay for this? In the end, does it much matter? I can tell the noble Earl that there will not be a cost to business. The money will come from general taxation. But, in general, business has a role to play in sponsoring and supporting sport, and it does that very well indeed. That will be reflected financially, I suspect, in the way in which the formula works. That is how these matters usually operate, and certainly that is how we intend to see it work.

This is a great day for sport. It speaks volumes for what can be achieved when intelligent and rational debate takes place and when people put their point at exactly the right stage of a Bill. I am grateful for all the congratulations that have been expressed. They are certainly well merited.

On Question, amendment agreed to.

[Amendment No. 8 not moved.]

Clause 64 [Transitional relief]:

5.15 p.m.

The Earl of Caithness

moved Amendment No. 9: Page 32, line 26, leave out "be the same as or different from" and insert "subject to subsection (10A) below, be less than, but not greater than

The noble Earl said: My Lords, in moving this amendment, I shall speak also to Amendment No. 10.

Governments of all persuasions have accepted that rating revaluations may produce significant increases in rate bills for individual ratepayers and that, therefore, a cushion should be introduced to avoid sudden and significant increases in such hills. That concept is not opposed by the amendments that I have tabled.

The Government are tightening the current rating system by introducing self-financing for transition within each financial year. The Bill also calls for any shortfalls in any year to be recovered by changes to the unified business rate in later years, thus removing; any chance of predictability ratepayers may have for their forthcoming rate liabilities. That makes the system a whole lot more complicated.

The Government intend to achieve this precise balance for transitional arrangements through two mechanisms, or through a combination of the two. The first mechanism is to balance the cost of cushioning rate bill increases by delaying reductions in rate bills when a ratepayer has not experienced an increase in rateable value. That is otherwise known as downwards transition.

The second mechanism is to make a simple, overall surcharge on the uniform business rate in order to pay for the cost of transition for ratepayers. I believe that this second approach is fairer to ratepayers if the cost of the surcharge is spread over the lifetime of a rating list rather than set every year.

The amendments do not—and never have done—fundamentally challenge the notion of self-financing. They merely seek to redress the unfairness of the means of making transitions self-financing—which the Government have admitted will include the system of downwards transition. Downwards transition means that, following a revaluation, ratepayers whose rateable values change by less than the national increase in rateable value will find themselves subsidising more successful ratepayers whose rateable value has increased, often as a result of their location in a growing business area. Independent research suggested that this policy cost ratepayers £1.3 billion in denied rate reductions between 1995 and 2000. I am sure that your Lordships will agree that that is fundamentally unfair and that it affects most harshly the very ratepayers, estimated by independent research to be in the hundreds of thousands, who are for the most part in small or medium-sized enterprises which find rates a disproportionate burden.

The amendments instead seek to facilitate alternative arrangements for transitional arrangements in England, identified by the independent report, The future of business rating transition in England, produced in time for this Bill, in February of this year. The report concluded: Compared with the current system, implementing any one of these schemes"—

the schemes that I have put forward— would have the advantages of speed of implementation, robustness, fairness, transparency and affordability",

in comparison to the Government's proposals.

The amendments would enable a government to avoid "downwards transition" through allowing a surcharge in the uniform business rate to be phased in over more than one year. That gives the flexibility that the Government need to avoid making transitional self-financing in each and every financial year and allows the Government a practical opportunity to avoid downwards phasing.

I wish to stress that my amendment would address the lack of flexibility that the Bill imposes on the Government. I was party to a mistake in 1988, when we did the same thing and left no flexibility at all. That had to be corrected in 1992; the Government had to redress the situation. I fear that the present Government are making the same mistake as we made in 1988.

My final point relates to the question that I asked on the previous amendment. For months, in the negotiations that we have had with the Government, they have turned round to us and said that there can be no money from the general taxpayer. The system that I have proposed is self-financing over a five-year period together with interest. It requires some investment from the general taxpayer in the first one or two years, which is then recouped; so at the end of the fifth year there has been no cost to the general taxpayer.

In his response to the previous amendment, the noble Lord, Lord Bassam, confirmed that the general taxpayer would be the person who bore the cost of the relief for sports clubs. That is a new and important step forward. It means that the Government will use general taxation for the benefit of some sectors. I also refer the noble Lord to the local retention of business rates. That, again, is being supported by the general taxpayer. Here, I propose a system that is not going to cost the general taxpayer any money over a five-year period. It will initially, but all that money will come back. It is better for business; it is more equitable for business. The amendment is strongly supported by the Royal Institution of Chartered Surveyors, the Rating Surveyors' Association and the Institute of Revenues, Rating and Valuation. I beg to move.

Baroness Hanham

My Lords, I briefly want to support my noble friend Lord Caithness as regards the amendment. I remember very well the last revaluation of business rates that took place. All I can recall is that not only was the issue terribly complicated, but it was very widely misunderstood and resented by business.

Having seen the four pages in the Bill that deal with this matter I think that there will be even more resentment. I do not suppose that anyone will be able to understand it. however hard they try. This seems to be an easily understood method of ensuring that a revaluation involving changes to people's tax, either up or down, is implemented in a way which shows fairness—which I do not think that the previous revaluation of rates ever absolutely managed to demonstrate. So I think this is a very neat way of dealing with the issue, and I very much hope that it will have the Government's support.

Baroness Maddock

My Lords, we, on these Benches, at previous stages of the Bill supported the noble Earl, Lord Caithness, in his efforts to deal with this very difficult issue. We continue to do so at this stage of the Bill.

The situation is particularly disappointing because the House of Commons' Select Committee inquiry into this Local Government Bill warned the Government about fettering their ability to contribute to the costs of transition. It pointed out the difficulties that the Government could get into if there was a downturn in business. But this Bill completely removes their ability to support transitional relief.

As the noble Earl said, it is disappointing that the Ministers at ODPM have not been able to persuade the Treasury as they did with sport because I consider this to be a similar kind of issue: it is about local matters, it is about small local businesses. We all know that our successful large businesses started as small businesses. I regret that the Government feel unable to keep an open mind and to give themselves the ability always to support small businesses.

Lord Bassam of Brighton

My Lords, Clause 64 assures ratepayers that there will be a transition scheme to accompany future revaluations. The existing provision in the Local Government Finance Act 1988 simply confers a power to establish a scheme, but does not impose a duty to do so. Business, including the CBI, has stressed the necessity of transition schemes.

The details of a future scheme—the annual increases and decreases in bills—will be decided in the run-up to the revaluation concerned, when the impact on individual rateable values will be known and more certain. But, as we stated in the White Paper Strong Local Leadership—Quality Public Services, any future transition scheme will need to be self-financing. There is no reason why the general taxpayer, as opposed to the ratepayer, should meet the cost of transitional relief. Accordingly, Clause 64 requires that the total rate yield for any year is not to be affected by a transition scheme.

The clause allows for flexibility in how schemes may be structured so as to be self-financing. The methods likely to be used include having a transition scheme which balances the rates lost through phasing in increases in bills against the rates gained by phasing in decreases. Such phasing of decreases in bills as well as increases has been a feature—as I am sure all noble Lords will acknowledge—of past schemes.

In addition to providing for a scheme which balances rate income lost through phasing in increases and rate income gained through phasing in decreases, this clause allows for an addition to rate bills generally as a means of making good the loss of rates resulting from phasing in increases in bills.

This clause also allows for a scheme which is funded by a combination of phasing in decreases and an addition to rate bills generally. This will allow us to put in place a fair and workable scheme.

The effect of these amendments is to make transition revenue neutral over a five-year period—instead of year by year as set out in the Bill—with the Treasury making a contribution to the cost of the scheme in the first years. The Treasury would need a way to recover in later years what it had paid in the early years. The Exchequer would also need to recover interest on what it had paid out in the early years of the scheme, and would need to recover a sum to offset the effects of inflation between paying out the sums concerned and recovering them. All this would make for a complicated calculation—the noble Baroness, Lady Hanham, said that it would be simple—which would also introduce an element of uncertainty for ratepayers.

A five-year revenue neutral scheme would be much more complicated to operate and far less intelligible to the ratepayer than a scheme which was revenue neutral year by year. Furthermore, it is our view that it is difficult to see any reason for such a scheme. Why should the general taxpayer in effect give a loan to ratepayers at the start of each transition scheme?

Transitional relief means that we are easing the burden on ratepayers. We do not believe that the general taxpayer should cover the cost of this. It seems fair to us that ratepayers in general should pick up that bill.

An attempt to make a scheme revenue neutral over the five-year life of a list would mean that at each revaluation complex estimates would need to be made in advance of announcing any transition scheme. If at the end of the fourth year it was discovered that the Treasury had not recouped the money it had contributed in the early years, rate bills would have to be increased to balance the scheme. That would create uncertainty for the ratepayer.

The noble Earl, Lord Caithness, asked why the general taxpayer should not pay for the transitional relief. As I have made clear, this scheme could cost billions of pounds. That would be a heavy burden on general taxpayers. He cited the previous amendment in aid of his case. The cost of relief to sports clubs will of course be far less; more importantly, it will be of tremendous benefit to non-profit-making bodies. Businesses, by their very nature, do not fall into that category. The cost of the relief granted is significant but minuscule by comparison to the potential costs of the general taxpayer funding the transitional relief proposition contained within the amendments.

I hope that, having listened carefully to what I have said—although we may still disagree on this issue— that the noble Earl and the noble Baronesses who have spoken in favour of the amendment will think again and withdraw it today.

The Earl of Caithness

My Lords, I listened with great care to the noble Lord. I have to say to the noble Lord that it is only the Government—not the practitioners, not industry and not businesses—who think that their proposal will he less complicated than the one that I have submitted. Virtually everything the noble Lord said refers to the Government scheme and not to our scheme. Our scheme is more certain for businesses. It is much fairer for businesses. The Government's scheme will certainly cause mayhem. As a chartered surveyor I would say to the Government, "Thank you very much". Many of my colleagues will make a huge amount of money out of this by advising businesses. I want to do them out of some of that money. I want to make the scheme simpler, more straightforward and more transparent. I want to get rid of the uncertainty that the Government are creating.

The noble Lord said that the general taxpayer should not contribute. Overall, I totally agree. The general taxpayer will not contribute under my scheme. By the end of the five-year period, all the money, together with interest and inflation, will he reclaimed by the Treasury.

I am very grateful for the support of the noble Baroness, Lady Maddock, and my noble friend Lady Hanham. This is now the occasion to test the opinion of the House.

5.29 p.m.

On Question, Whether the said amendment (No. 9) shall be agreed to?

Their Lordships divided: Contents, 139: Not-Contents, 119.

Division No. 3
CONTENTS
Addington, L.	Caithness, E. [Teller]
Alderdice, L.	Campbell of Alloway, L
Allenby of Megiddo, V.	Carlile of Berriew, L.
Anelay of St Johns, B.	Carlisle of Bucklow. L.
Astor of Hever, L.	Carnegy of Lour, B.
Attlee, E.	Chalfont, L.
Barker, B.	Colwyn, L.
Beaumont of Whitley, L.	Cope of Berkeley, L.
Biffen, L.	Crathorne, L.
Blackwell, L.	Crickhowell, L.
Blatch, B.[Teller]	Dahrendorf, L.
Bridgeman, V.	Deedes, L.
Brooke of Sutton Mandeville, L.	Denham, L.
Brougham and Vaux, L.	Dixon-Smith, L.
Burnham, L.	Dundee, E.
Buscombe, B.	Eden of Winton, L.

Elliott of Morpeth, L.	Murton of Lindisfame, L.
Elton, L.	Newby, L.
Falkland, V.	Newton of Braintree, L.
Feldman, L.	Noakes, B.
Flather.B.	Northbrook, L.
Fookes, B.	Northesk, E.
Freeman, L.	Northover, B.
Gardner of Parkes, B.	Norton of Louth, L.
Geddes, L.	O'Cathain, B.
Gilmour of Craigmillar, L.	Onslow, E.
Glenarthur, L.	Palmer, L.
Glentoran, L.	Park of Monmouth, B.
Goodhart, L.	Parkinson, L.
Hamwee, B.	Pearson of Rannoch, L.
Hanham, B.	Peyton of Yeovil, L.
Hanningfield, L.	Phillips of Sudbury, L.
Hanson, L.	Plumb, L.
Harris of Richmond, B.	Plummer of St. Marylebone, L.
Henley, L.	Rawlings, B.
Higgins, L.	Reay, L.
Hodgson of Astley Abbotts, L.	Redesdale, L.
Holme of Cheltenham, L.	Rees, L.
Hooper, B.	Rennard, L.
Howe, E.	Roberts of Conwy, L.
Howell of Guildford, L.	Rodgers of Quarry Bank, L.
Hurd of Westwell, L.	Roper, L.
Jacobs, L.	Rotherwick, L.
Jellicoe, E.	Russell, E.
Jenkin of Roding, L.	St John of Fawsley, L.
Kimball, L.	Saltoun of Abernethy, Ly.
King of Bridgwater, L.	Sandberg, L.
Knight of Collingtree, B.	Scott of Needham Market, B.
Lamont of Lerwick, L.	Seccombe, B.
Lane of Horsell, L.	Selsdon, L.
Liverpool, E.	Sharman, L.
Livsey of Talgarth, L.	Sharp of Guildford, B.
Lucas, L.	Sharpies, B.
Luke, L.	Shutt of Greetland, L.
Lyell, L.	Skelmersdale, L.
McAlpine of West Green, L.	Stewartby, L.
McColl of Dulwich, L.	Taverne, L.
MacGregor of Pulham Market, L.	Thomas of Gwydir, L.
	Thomas of Walliswood, B.
Mackie of Benshie, L.	Thomson of Monifieth, L.
McNally, L.	Tordoff, L.
Maddock, B.	Tugendhat, L.
Magjnnis of Drumglass, L.	Ullswater, V.
Mar and Kellie, E.	Waddington, L.
Marlesford, L.	Wade of Chorlton, L.
Mayhew of Twysden, L.	Wakeham, L.
Miller of Chilthorne Domer, B.	Wallace of Saltaire.L.
Montrose, D.	Walmsley.B.
Mowbray and Stourton, L.	Warnock, B.
Moynihan, L.	Williams of Crosby, B.

NOT-CONTENTS
Acton, L.	Clarke of Hampstead, L.
Alli, L.	Clinton-Davis, L.
Archer of Sandwell, L.	Cohen of Pimlico, B.
Ashton of Upholland, B.	Corbett of Castle Vale, L.
Barnett, L.
Bassam of Brighton, L.	Craig of Radley, L.
Berkeley, L.	Crawley, B.
Bernstein of Craigweil, L.	David, B.
Blackstone, B.	Davies of Coity, L.
Boothroyd, B. Borrie, L.	Davies of Oldham, L. [Teller]
Brooke of Alverthorpe, L.	Dean of Thornton-le-Fylde, B.
Burlison, L.	Desai, L.
Campbell-Savours, L.	Dixon, L.
Carter, L.	Donoughue, L.
Chandos, V.
Chester, Bp.	Dormand of Easington, L.
Chorley, L.	Dubs, L.
Christopher, L.	Elder, L.

Evans of Parkside, L.	MacKenzie of Culkein, L.
Evans of Temple Guiting, L.	Mackenzie of Framwellgate, L
Falconer of Thoroton, L. (Lord Chancellor)	Mallalieu, B.
	Mason of Barnsley, L.
Farrington of Ribbleton, B.	Massey of Darwen, B.
Filkin, L.	Merlyn-Rees, L.
Fyfe of Fairfield, L.	Mishcon, L.
Gale, B.	Mitchell, L.
Gavron, L.	Morgan, L.
Gibson of Market Rasen, B.	Morris of Aberavon, L.
Golding, B.	Morris of Manchester, L.
Goldsmith, L.	Nicol, B.
Goudie, B.	Orme, L.
Gould of Potternewton, B.	Patel of Blackburn, L.
Graham of Edmonton, L.	Pendry, L.
Grocott, L.[Teller]	Peston, L.
Harris of Haringey, L.	Pitkeathley, B.
Harrison, L.	Prys-Davies, L.
Haskel, L.	Radice, L.
Hayman, B.	Ramsay of Cartvale, B.
Hilton of Eggardon, B.	Randall of St. Budeaux, L.
Hogg of Cumbernauld, L.	Rea, L.
HollisofHeigham, B.	RendellofBabergh, B.
Howie of Troon, L.	Richard, L.
Hoyle, L.	Rooker, L.
Hughes of Woodside, L.	St.JohnofBletso, L.
Hunt of Chesterton, L.	Sheldon, L.
Hunt of Kings Heath, L.	Simon, V.
Irvine of Lairg, L.	Smith of Leigh, L.
Islwyn, L.	Strabolgi, L.
Jay of Paddington, B.	Symons of Vernham Dean, B.
Jones, L.	Temple-Morris, L.
Judd, L.	Tomlinson, L.
King of West Bromwich, L.	Tumberg, L.
Kirkhill, L.	Turner of Camden, B.
Layard, L.	Varley, L.
LeaofCrondall, L.	Wedderbum of Charlton, L.
Lipsey, L.	Whitaker, B.
Lofthouse of Pontefract, L.	Whitty, L.
McCarthy, L.	Williams of Mostyn, L. (Lord President of the Council)
Macdonald of Tradeston, L.
Mclntosh of Haringey, L.	Williamson of Horton, L.
Mclntosh of Hudnall, B.	Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.

5.40 p.m.

The Earl of Caithness

moved Amendment No. 10: Page 33, line 5, leave out subsection (10) and insert— ( ) In making regulations under this section the Secretary of State shall have regard to the object of securing (so far as practicable) that the aggregate amount payable to him and all billing authorities by way of non-domestic rates as regards a relevant period is the same as the aggregate amount which would be so payable apart from the regulations. (10A) For the purposes of subsection (10) above, the Secretary of State shall estimate the difference between—

1. (a) the aggregate amount which would apart from the regulations, all billing authorities by way of non-domestic rates as regards a relevant period, and
2. (b) the aggregate amount which will be payable having regard to rules prescribed under subsection (4) above,

and any shortfall in aggregate amount shall be recovered by applying a surcharge of the non-domestic rating multiplier for each relevant financial year.

On Question, amendment agreed to.

Clause 77 [Power to change number of valuation bands]:

Lord Hanningfield

moved Amendment No. 11: Page 43, line 7, at end insert ", provided that such change does not alter the ratio between the top and bottom band. (4B) The power under subsection (4A) shall not be used to alter the ratio between the top and bottom bands set out in subsection (1)." The noble Lord said: My Lords, the amendment would not restrict the Government's power to vary the number of council tax bands. It would simply retain the current ratio between the top and bottom bands. That would mean that householders in the top band would continue to pay three times as much council tax as those in the bottom band.

The purpose of the amendment is to provide householders with a degree of protection against steep rises in council tax, which is escalating to unprecedented levels. In 2003, council tax breached the £1,000 average. Even the Government have now recognised that council tax rises of the level that we have witnessed over the past three years are unsustainable.

In Committee, we debated at length the motivation behind the introduction of council tax. It was originally devised as part property tax and part tax on services. It was never designed to be based solely on the capital value of a property. That is why there is a structure of discounts based on the number and type of occupancy.

The discounts have nothing to do with the value of a property; they are based on an assumed reduced take-up of services. It is important that some consideration of service uptake is retained when planning any alterations to the tax system, so that we do not burden council tax payers with inflated charges based solely on property values. That is why the 3:1 ratio was originally introduced and why it is important that we make provision to ensure that it is retained. Let us also be clear that any threat to the existing 3:1 band ratio is a threat not necessarily to the wealthiest but often to those carrying the largest levels of mortgage debt or the lowest levels of disposable income.

On Report, the noble Lord, Lord Rooker, agreed that there is no direct correlation between the capital value of a property and the householder's income. Many properties with a high capital value might be owned by elderly retired people with low levels of disposable income, or by families with large mortgages and therefore relatively high levels of debt.

Property is a poor indicator of ability to pay. If variations in the number of bands mean a shift in the tax burden on to those householders occupying properties of higher capital value there will be problems—particularly with the elderly, who already find it very difficult to meet their council tax bills. Several groups of elderly people have got together to oppose council tax.

The amendment does not seek to inhibit the Government from shifting around the balance of council tax payments through the introduction of new bands. It simply seeks to put a cap on the Government's tax-raising powers. We believe that householders will appreciate that measure of protection. We do not believe that householders living in the same billing authority area will welcome the prospect of paying five times as much council tax as their neighbour because their house is five times more valuable. If that is what the Government have in mind, I think that there will be some very concerned people out there. I beg to move.

Baroness Hamwee

My Lords, we discussed the issue at various stages of the Bill. We do not support the amendment. As many know, we do not particularly support council tax. I do not see that it will help at all. My main concern as regards revaluation is to consider some of those at the bottom end of the scale, particularly those in park homes and so on, who have had tremendous problems. If the Government are trying to look at bands, I do not think that the amendment would be very helpful or that it would ameliorate any of the real problems that we have with council tax. I am afraid that we do not support it.

Lord Rooker

My Lords, having just heard the three key words "ability to pay" from the Tory spokesman, if I had a sense of humour I would wish that the noble Baroness, Lady Thatcher, had been here. "Ability to pay"—from the party that brought in poll tax. Come off it. I know that a decade is a long time in politics, but one must remember that council tax was introduced because of the absolute disaster of poll tax, where there was nothing like ability to pay. Now I am being lectured by the Conservative spokesman about ability to pay and local government finance. I am not taking that, for a start.

Having got that off my chest, I shall address the noble Lord's points. I accept that the amendment is narrow. There is not much new to say about the matter, but we must put it on the record. The amendment relates only to the Secretary of State exercising his powers to change the valuation ratio of 3:1 between the bottom and top bands. As I said previously, most people who pay council tax do not have a clue about the ratio between the top and bottom levels of council tax.

The amendment would mean that however council tax was fixed, the person with the biggest house in the area—at the highest band, well above the lowest band—would never pay more than three times the amount paid by the person in the house with the lowest value. There could be an argument about the issue; it has never been seriously debated. In response to the noble Lord, Lord Hanningfield, there are not too many cases of people in the top band and those in the lowest band living next to one another. I do not think that it is generally the case, so it is not a question of people paying five times more than their immediate neighbour.

When we discussed the issue on Report, I said that there was nothing new to say. I shall make the point in figures, which the noble Lord did not use. I fully accept what I said previously: occupancy of a property is not a sign of the ability to pay or of a person's income. I do not retract those points, which are valid. A person whose house is, say, at the bottom of band H, valued at £320,000, would pay three times the council tax of someone whose house was valued at the top of band A at £40,000. Much to my regret, in some ways, there are thousands of dwellings worth much less than £40,000, and much less than £20,000, in parts of this country. Where someone in a dwelling valued at £20,000 or £40,000 lives a few streets away from a house valued at £320,000—it need not necessarily be next door£the poll tax ratio would be only 3:1 but the property value ratio would be 8:1. It could be a lot higher than that.

I repeat on the record that we have no plans to change the ratio. If the amendment were agreed, we would not be able to change the ratio to reflect more closely the relative values of the bands. We would be stuck with the ratio established in 1992. On Report, the noble Lord, Lord Hanningfield, conceded, at column 983, that he was not fully wedded to the existing ratio of 3:1, which he now seeks to set in concrete. The noble Baroness. Lady Hanham, said, at the same column, that there needed to be a careful review of the number of bands and the ratio between them. It was a duet. By and large, the message was, "We are not fully wedded to the status quo". Noble Lords did not come up with an alternative, although the alternative offered today is highly restrictive.

On Report, noble Lords expressed concern about the owners of houses in band H. But we are also concerned, as we must be, about those in houses in the current band A that are worth very little—a lot less than £40,000. Even if no additional bands were created above the current band H. the amendment would prevent us creating an additional band below band H, for which the tax payable could be less than one third of the amount paid by those in band H.

Although, from the noble Lord's perspective, the amendment looks satisfactory, it would be highly restrictive if we wanted to propose going below the £40,000 level for the many thousands of people who, rightly, see their property as bearing no relation to the upper figure for band A.

I understand noble Lords' concerns about the exercise of powers, but constraining them in such a way is not a sensible way to proceed. Any change to the banding schemes, whether by re-valuing the bands, adding new bands or changing the ratios between bands, must be made by order, which is subject to the affirmative resolution procedure in the House of Commons. If the Government were minded to do that, it is not something that could be slipped through without a debate and a vote. That would be the right way and would provide proper parliamentary scrutiny.

I repeat, however, that we have not yet decided whether we will change the ratio. It does not make sense to limit our powers in this area, especially as we know that the existing ratio does not reflect the relative spread of values.

Although it is churlish for Ministers to say this, I must put on record the fact that the amendment is technically defective, because the actual power to change the ratios is Section 5(4)(a) of the Local Government Finance Act 1992, not the new subsection (4A) inserted by Clause 77 of this Bill. That is a minor matter because if the will of the House were such that we should proceed, we could put that technical matter right. I make the point only in passing for the information of noble Lords. By the way, that is not an invitation to nip along and table a manuscript amendment.

No decision has been made to change the ratio, but the amendment would be highly restrictive as drafted because it would prevent us from introducing a band below £40,000. It is right for us to be concerned, as we all are, about property owners at all levels. I understand the Opposition's concern about people in big houses who may be on poor incomes. I fully accept that. Nobody would argue that people should move from their family house, which may be full of memories. There is no reason for that to happen if people can maintain the property. Nevertheless, people with low incomes present a real problem.

I fully accept that living in bigger, more expensive houses does not necessarily indicate an ability to pay. Nevertheless, I do not think that this is the way to go about changing the situation because it would stop us doing something for people living in really poorly valued properties. That is one area that we certainly want to examine, but no decisions have been made.

Lord Hanningfield

My Lords, I do not think that we should go over old history, but I want to return to why we introduced the community charge or poll tax. It was because there was a revolt against rates. I remember going to meetings where 500 or 600 people were unanimously jumping up in protest against the rates. We are reaching that stage with the council tax. In great chunks of the country, the community charge or poll tax was actually lower than the rates—although not everywhere, which was one of the problems. However, in some parts of the country, people were actually paying less than they were under the old rate system. That was certainly the case in Essex.

There were problems. People were outraged about rates. I accept that people did not like the community charge, but we are now getting the same thing about council tax. The Government do not realise that. I attended a meeting with 200 or 300 people aged 65 and over, all of whom were revolting against the council tax. This legislation could gradually push council tax higher and higher, not only through extra expenditure, but through revaluation or a change in the bands.

I was minded to table a rather more complicated and sophisticated amendment. I thought that I should keep it simple, but perhaps I should have tabled a more sophisticated one, because then the Minister would not have been able to make the same comments.

It is vital for the Government to realise how unpopular council tax is becoming and that something must be done about that. If we are to have new bands, putting some people into the higher bracket, after seven years of a Labour Government, it could be that the Conservative Party now cares more than the Government about people's ability to pay. That is why we are trying to protect those people. It is important to test the views of the House on this issue.

5.55 p.m.

On Question, Whether the said amendment (No. 11) shall be agreed to?

Their Lordships divided: Contents, 105; Not-Contents, 149.

Division No. 4
CONTENTS
Anelay of St Johns, B.	Lamont of Lerwick, L.
Astor of Hever, L.	Lane of Horsell, L.
Beaumont of Whitley, L.	Liverpool, E.
Blackwell, L.	Lucas, L.
Blatch, B.	Luke, L.
Bridgeman, V.	Lyell, L.
Brooke of Sutlon Mandeville. L.	McAlpine of West Green, L.
Brougham and Vaux, L.	McColl of Dulwich, L.
Burnham, L.	MacGregor of Pulham Market,
Buscombe, B.	L.
Byford, B.	Mancroft, L.
Caithness, E.	Marlesford, L.
Campbell of Alloway, L.	Mayhew of Twysden, L.
Carlisle of Bucklow, L.	Montrose, D.
Carnegy of Lour, B.	Mowbray and Stourton, L.
Colwyn, L.	Moynihan, L.
Cope of Berkeley, L. [Teller]	Murton of Lindisfarne, L.
Craigavon, V.	Newton of Braintree, L.
Crathorne, L.	Noakes, B.
Crickhowell, L.	Northbrook, L.
Deedes, L.	Northesk, E.
Denham, L.	Norton of Louth, L.
Dixon-Smith, L.	O'Cathain, B.
Dundee, E.	Onslow, E.
Eden of Winton, L.	Palmer, L.
Elliott of Morpeth, L.	Park of Monmouth, B.
Elton, L.	Parkinson, L.
Feldman, L.	Pearson of Rannoch, L.
Flatter, B.	Peyton of Yeovil, L.
Fookes, B.	Plumb, L.
Freeman, L.	Plummerof St. Marylebone, L.
Gardner of Parkes, B.	Rawlings, B.
Geddes, L.	Reay, L.
Glentoran, L.	Rees, L.
Griffiths of Fforestfach, L.	Renton, L.
Hanham, B.	Roberts of Conwy, L.
Hanningfield, L.	Rotherwick, L.
Hanson, L.	St John of Fawsley, L.
Harris of Peckham, L.	Saltoun of Abernethy, Ly.
Henley, L.	Seccombe, B. [Teller]
Higgins, L.	Selborne, E.
Hodgson of Astley Abbotts, L.	Selsdon, L.
Howe, E.	Sharpies, B.
Howell of Guildford, L.	Skelmersdale, L.
Hunt of Wirral, L.	Strathclyde, L.
Hurd of Westwell, L.	Tebbit, L.
Jenkin of Roding, L.	Thomas of Gwydir, L.
Kimball, L.	Thomas of Swynnerton, L.
King of Bridgwater, L.	Tugendhat, L.
Knight of Collingtree, B.	Ullswater, V.
Laird, L.	Waddington, L.

Wade of Chorlton, L.	Warnock, B.
Wakeham, L.	Willoughby de Broke, L.

NOT-CONTENTS
Acton, L.	Jannerof Braunstone, L.
Addington, L.	Jay of Paddington, B.
Alderdice, L.	Jones, L.
Alii, L.	King of West Bromwich, L.
Archer of Sandwell, L.	Kirkhill, L.
Ashton of Upholland, B.	Lea of Crondall, L.
Barker, B.	Levy, L.
Barnett, L.	Lipsey, L.
Bassam of Brighton, L.	Livsey of Talgarth, L.
Berkeley, L.	Lofthouseof Pontefract, L.
Bernstein of Craigweil, L.	McCarthy, L.
Blackstone, B.	Macdonald of Tradeston, L
Borne, L.	Mclntosh of Haringey, L.
Brooke of Alverthorpe, L.	McIntosh of Hudnall, B.
Burlison, L.	MacKenzie of Culkein, L.
Campbell-Savours, L.	Mackenzie of Framwellgate, L
Carlile of Berriew, L.	Mackie of Benshie, L.
Carter, L.	McNally, L.
Chorley, L.	Maddock, B.
Christopher, L.	Mallalieu, B.
Clarke of Hampstead, L.	MarandKellie, E.
Clinton-Davis, L.	Mashamof llton, B.
Cohen of Pimlico, B.	Mason of Barnsley, L.
Corbett of Castle Vale, L.	Massevof Darwen, B
Crawley, B. Dahrendorf, L.	Merlyn-Rees, L.
David, B.	Miller of Chilthorne Domer, B.
Davies of Coity, L.	Mitchell, L.
Davies of Oldham, L. [Teller]	Morgan, L.
Dean of Thornton-le-Fylde, B.	Morris of Aberavon, L.
Desai, L.	Newby, L.
Dixon, L.	Nicol, B.
Donoughue, L.	Northover, B.
Dormand of Easington, L.	Orme, L.
Dubs, L.	Patel of Blackburn, L.
Evans of Parkside, L.	Pendry, L.
Evans of Temple Guiting, L.	Peston, L.
Falconer of Thoroton, L. (Lord Chancellor)	Peterborough, Bp.
	Pitkeathley, B.
Falkender, B.	Prys-Davies, L.
Falkland, V.	Radice, L.
Farrington of Ribbleton, B.	Rarnsay of Cartvale, B.
Filkin, L.	Randall of St. Budeaux, L.
Finlay of Llandaff, B.	Rea, L.
Fyfe of Fairfield, L.	Redesdale, L.
Gale, B.	Rendell of Babergh, B.
Gavron, L.	Rennard, L.
Gibson of Market Rasen, B.	Richard, L.
Golding, B.	Richardson of Calow, B.
Goldsmith, L.	Rochester, Bp.
Goodhart, L.	Rodgers of Quarry Bank, L.
Goudie, B.	Rooker, L.
Gould of Potternewton, B.	Roper, L.
Graham of Edmonton, L.	Russell, E.
Grocott, L. [Teller]	Sandberg, L.
Hamwee, B.	Scott of Needham Market, B.
Harris of Haringey, L.	Sharp of Guildford, B.
Harris of Richmond, B.	ShuttofGreetland, L.
Harrison, L.	Simon, V.
Haskel, L.	Smith of Leigh, L.
Hayman, B.	Stone of Blackheath, L.
Hilton of Eggardon, B.	Strabolgj, L.
Hogg of Cumbernauld, L.	Symons of Vemham Dean, B
Hollis of Heigham, B.	Temple-Morris, L.
Howarth of Breckland, B.	Thomas of Walliswood, B.
Howie of Troon, L.	Thomson of Monifieth, L.
Hoyle, L.	Tomlinson, L.
Hughes of Woodside, L.	Tordoff, L.
Hunt of Kings Heath, L.	Turnberg, L.
Irvine of Lairg, L.	Turner of Camden, B.
Islwyn, L.	Varley, L.

Wallace of Saltaire, L.	Williams of ElveI, L.
Walmsley, B.	Williams of Mostyn, L. (Lord President of the Council)
Walpole, L.
Whitaker, B.	Williamson of Horton, L.
Whitty, L.	Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.4 p.m.

Clause 92 [Power to charge for discretionary services]:

Lord Hanningfield

moved Amendment No. 12: Page 52, line 7, at end insert "except in cases where a surplus is generated and reinvested in the discretionary service for the purposes of increasing provision of the service or to raise the quality of the existing discretionary service

The noble Lord said: My Lords, the amendment would deal with some of the practical, not to say philosophical, difficulties thrown up by the current drafting of the clause. The clause prevents a local authority from making a profit from charges for a discretionary service. That is wrong in principle and difficult to police in practice. We listened to the arguments made at other stages of the Bill's progress, and we remain convinced that there will be substantial practical problems with giving effect to the provision as it stands.

The amendment would address some of those concerns. It would enable local authorities to over-recover the costs of provision of a discretionary service but only for the purpose of reinvestment in the service, in order to improve it or widen take-up. After all, the bottom line for all of us is service improvement. Let us not close off one obvious avenue to achieving that.

I remind your Lordships that we are talking about discretionary services, services that local authorities are under no obligation to provide and consumers are under no obligation to purchase. We welcome the introduction of a power to charge for such services. Without that power, the services would probably not exist. Local authorities are hard pressed to meet their statutory commitments, without the added pressure of delivering non-statutory, loss-making services.

My strong belief is that local authorities would be inclined to make much greater use of a power that enabled them to improve a service, without having to subsidise it from somewhere else. They would be able to use the power more effectively. We accept that the purpose of the power is, primarily, to promote the economic, social and environmental well-being of our communities and that it is not intended to provide a further income stream for local authorities. However, in order for local authorities to remain a high-quality service and meet the requirements of promoting the well-being of our communities, it is clear that, in some instances, they may wish to over-recover their costs in order to invest in service improvements, either to raise the quality of service provision or to increase the capacity of the service.

We should not miss the opportunity in the Bill to enable local authorities to improve the quality of their discretionary service provision. The message that the Bill sends to local authority managers is that they must make a loss and guard against the prospect of creating a surplus. That seems nonsensical.

In Grand Committee, the noble Lords on the Government Front Bench suggested that amendments previously tabled had been designed to push local authorities into unrestricted commercial activity. I hope that those noble Lords will not construe the new amendment in that way. We seek to make clear and explicit the freedoms that are hinted at in the Bill. On Report, there was a suggestion, born of experience, I think, from the noble Lord, Lord Bassam of Brighton, that flexibility in defining "costs" could provide sufficient room for manoeuvre in the clause. There was, undoubtedly, a good deal of truth and practical sense in that proposition. However, given that it is primary legislation, finance people, however clever they may be, will find it difficult to change new investment to costs. We are concerned with improving service delivery and widening provision. I cannot see why we should not make explicit what is implicit and say to local authorities that they may over-recover their costs, but only for the purpose of improving the service. That is a more honest and straightforward way of dealing with the power.

In Committee, the noble Lord, Lord Rooker, mentioned the dangers of allowing authorities to enter into unrestricted commercial activity. On the face of it, it is a reasonable argument. None of us wishes to see local authorities putting themselves into financial difficulties because they have lost money as a consequence of delivering discretionary services. However, that is not the danger that the Minister sees. He seems to be content for local authorities to lose money, and the clause does not prohibit that. Perhaps the Minister is alert to a more subtle danger that some of us may have missed. Perhaps there is a danger in allowing local authorities to make money. That is ruled out in this clause. Again, let us remind ourselves that these arc services which no one has to purchase and which local authorities do not have to provide.

As well as the principal objections that we have to this measure, we are also concerned about how it will work in practice. What will happen if the take-up of the service is greater than predicted and local authorities make a surplus? Will they be penalised? Will they have to pay back any profit? To whom will they pay the money? Surely, the most sensible and practical way forward would be to oblige any profit to be reinvested in the service. That is what we are suggesting in this amendment. I hope that noble Lords will support this pragmatic approach. I beg to move.

Baroness Maddock

My Lords, we have a great deal of sympathy with the principle underlying the amendment. As the noble Lord said, it would be quite difficult to guarantee that no profit will be made on a service over a year. It may be that the Minister can tell us that regulations will deal with that situation should it occur. At this stage, I wonder whether the wording is sufficient to carry out the intention of the amendment. However, we support it in principle. I shall listen with interest to what the Minister has to say.

Lord Bassam of Brighton

My Lords, as I listened to the noble Lord, Lord Hanningfield, I began to feel that probably there was not so much difference between us. However, I shall go through the issue carefully. It was interesting that the noble Lord addressed some of the points we made at earlier stages of the Bill. I am grateful to him for that.

Amendment No. 12 appears to allow authorities to invest in their discretionary services with the aim of increasing both the take-up and the quality of the service concerned. We have no problem with that. Under the power, as currently drafted, any such reinvestment would count as a cost of the service and would reduce any surplus, thus helping the authority to achieve the duty in the clause. In other words, standard accounting practice already achieves one of the objectives which perhaps lies behind the amendment. If it is the case that it is seeking to allow only such investment, the amendment would be unnecessary.

However, the amendment goes further than that. It would absolve authorities of the need to comply with the duty in Clause 92(3). It would allow all best value authorities to engage in a restricted form of trading, irrespective of performance—not something that I think we, across the Chamber, would agree with—and without the necessary checks and balances envisaged in the trading powers set out in Clauses 94 and 95. It would permit something without those checks and balances which I think we are agreed should be in place. It would permit a form of trading by the back door.

The provision on charging at Clause 92 is not about allowing authorities to enter into commercial activity in their discretionary service provision. The purpose of providing a new general power to enable best value authorities to charge for discretionary services is to encourage them to enhance their existing services and to develop new ones that will help to improve the service provided to their community. That is probably a shared objective. It is not our intention, through this new power, to provide a new source of income for authorities, but it should allow them only to cover their costs.

I appreciate that in Committee some concerns were expressed about whether an authority would be acting ultra vires— point, I believe, referred to by the noble Baroness, Lady Maddock—if its income exceeded its costs by only a very small amount. Clause 92 gives local authorities flexibility in terms of costs and charges. The concept of, taking one … year with another", is well precedented—for example, with NHS trusts and in the Audit Commission Act 1998—as a way of establishing the idea of balancing the books without having detailed prescription either in the Bill or in secondary legislation. Any over or under recovery, resulting in a surplus or deficit of income in relation to costs, would be addressed by an authority when setting its charges for future years, so that, over time, income equated to costs.

We do not want this clause to operate in a heavy-handed way at all. I made that point at an earlier stage. We understand the spirit behind this amendment, but it does not address the issue properly—again, a point on which I believe that the noble Baroness, Lady Maddock, was uncertain. I can give an assurance that we do not want the clause to operate in a heavy-handed form. The heart of the proposed amendment is defective, despite the noble Lord's efforts to ensure that it would work properly. We cannot permit a form of trading to be established by a back-door route. We permit that in other parts of the Bill.

Having heard that explanation. I hope that on this occasion the noble Lord will feel able to withdraw his amendment because we are not a million miles apart on this.

6.15 p.m.

Lord Hanningfield

My Lords, I thank the noble Lord, Lord Bassam, for that reply. I agree that we are not many miles apart. At an earlier stage I quoted—I shall not quote again—the situation regarding archaeologists, who are being withdrawn from local authorities because they are unaffordable. If costs can be recovered through commercial activity when houses are being built and so forth. that service could continue. That is the type of instance to which I referred.

I have noted carefully what the Minister said today and on previous occasions. Obviously, it is all on the record. It is important and I believe that the Government acknowledge the problem. I was interested to hear the Minister say that reinvestment in the service is obviously a cost and that it can therefore go down as a cost in the way in which it is presented. With those assurances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Blatch

moved Amendment No. 13: After Clause 111, insert the following new clause—

"ADOPTION: CONSCIENTIOUS OBJECTIONS

1. (1) No person employed by, working for or acting as an adviser to a local authority shall he under any duty whether by contract or by any statutory or other legal requirement to participate in—
   1. (a) any placement under section 18 of the Adoption and Children Act 2002 (c. 38) (placement for adoption by agencies); or
   2. (b) any application under section 49 of that Act (applications for adoption), to which he has a conscientious objection on either of the grounds specified in subsection (2).
2. (2) The grounds referred to in subsection (1) are that the placement is with, or the application is made by—
   1. (a) a couple who are not a married couple;
   2. (b) one person who is in fact part of a couple within the meaning of section 144(4)(b) of the Adoption and Children Act 2002 (general interpretation etc.).
3. (3) In any legal proceedings, the burden of proof of conscientious objection shall rest upon the person claiming to rely on it.
4. (4) A local authority shall not treat less favourably any person who relies on subsection (I) above."

The noble Baroness said: My Lords, in speaking to Amendment No. 13, I shall clarify what has been a serious misunderstanding at previous stages of what it is that I am trying to achieve. The amendment simply extends the right of social workers to exercise their conscience in a situation which seriously compromises their profound belief that children should be adopted by a mother and a father.

I implore those who oppose my amendment—who may speak against me today—to give reasons why some professionals are protected by a conscience clause and why this particular group of professionals cannot enjoy the same freedom. Dawn Jackson and Norah Ellis are the cases that I cited in previous debates. Of course, there are others; I heard of another only today. They worked for Sefton Borough Council Social Services Department. Between them they have 46 years experience of childcare. They are specialists in adoption; they have dealt with the most complex and difficult cases over all those years, and they have exemplary records.

As mothers, as very practised social workers specialising in adoption and as committed Christians, based on practical evidence they believe profoundly that a child fares better and is more secure when placed with a mother and a father, who, preferably, are married. There has been considerable misunderstanding during earlier stages, but absolutely nothing proposed in my amendment invalidates gay adoption. Parliament has decided that issue: gay and lesbian people may adopt children. Although I oppose that proposal, I nevertheless accept the will of Parliament. I repeat, my amendment does not invalidate that change in the law.

However, just as teachers can refuse to teach religious education or take a religious assembly, just as medical professionals can refuse to carry out or assist with abortions, why cannot a social worker enjoy the same right? Nor will my amendment result in stigmatising anyone. Doctors exercising their conscience about not performing abortions does not stigmatise those who have abortions. Teachers exercising their conscience do not stigmatise children. Social workers exercising their conscience who in every other respect are doing an excellent job, would not stigmatise others. At a time when there is a serious lack of good experienced social workers, those two ladies—and we know of others—have been hounded out of their jobs in a specialist area of adoption. The Green Paper presented to Parliament yesterday referred to the need to do more to attract good, experienced social workers. Norah Ellis and Dawn Jackson had exemplary careers in adoption services. My amendment is too late for them—they were hounded out of their jobs—but it would prevent others from experiencing the same cruel fate. I beg to move.

Lord Hunt of Kings Heath

My Lords, I congratulate the noble Baroness, Lady Blatch, on her tenacity in relation to this question. However, I am sorry that she has brought this matter to the House at this late stage and I hope that the House will reject her amendment. I know that the noble Baroness disagreed with the decision of Parliament in relation to the Adoption and Children Act passed last Session although she has said she accepts the decision. The issue is expressly about the issue of a clause of conscience for social workers rather than whether unmarried couples—whether of the same or the opposite sex—may adopt. One must consider the issue she has raised in the overall context of why Parliament passed the Adoption and Children Act in the previous Session. We had a very serious consideration of these issues.

The outcome for many children in care has been very poor. The statistics seem to show that half of young people in prison under the age of 18 and 26 per cent of all prisoners have been in care at some stage. Up to 20 per cent of all care leavers experience some form of homelessness within two years of leaving care. More than half of young people leaving care at the age of 16 and over are unemployed. Some estimates put that proportion as high as 80 per cent. We know that for many of those young people adoption would have been a much better option. The outcome for adopted children is so much better than for those children left in care despite the enormous work of those in the care setting. We also know that there have been long problems with the adoption process. Thankfully, the Act passed last year together with associated changes has improved the system of adoption no end. In 1996, the total time spent in care before final adoption was three years and four months. That is a long time in anyone's mind but in the experience of a young person, it is often an eternity.

The question of unmarried couples was a very crucial issue in the debate on improving adoption procedures. The fact was that before the passage of the previous Act, single people could and did adopt. In such circumstances, if a single person was in a relationship with another person, whether of the same or opposite sex, that person was also assessed by social workers. Before the Act of last year was passed, that partner could not adopt. As a Minister responsible for that Bill at the time, I was impressed with the views of young people who had been adopted in such circumstances. They argued that they would feel more secure if both partners could adopt jointly. This House agreed and passed the necessary legislation. The noble Baroness, Lady Blatch, may shake her head but it is important to set the context in which to make a judgment as to whether her amendment ought to be accepted. One cannot consider the question of a conscience clause in isolation from decisions that this House made after intense and passionate debate less than 12 months ago.

No one has the right to adopt. The paramount interest must be the child. I am convinced that the changes we made were in the interests of the child. Frankly, this amendment is retrograde and against the interests of the child in adoption procedures. Whether one considers an issue of conscience by social workers in this regard to be on the same level as that of doctors in relation to abortion or teachers in relation to the teaching of religious education is a matter of individual judgment that each noble Lord must make. If we look at the history of adoption, for many years single people have been able to adopt. Whatever the sexual orientation of their partner, if that person applied to adopt a child, their partner would also be assessed. I do not believe that the issue of conscience in relation to social workers is of the same order as the two examples she gave on doctors and abortion and teachers and the teaching of religious education. The amendment of the noble Baroness would set a worrying precedent and make administration of the law on adoption very difficult for the relevant public authorities. I have no doubt that if it were passed, it risks reducing the pool of prospective adopters. For the sake of children for many years to come, this House should reaffirm the decision made in the previous Session and reject this amendment.

Lord Campbell of Alloway

My Lords, I oppose this amendment for the very close reasoning given by the noble Lord, Lord Hunt of Kings Heath. I shall not reiterate parts of the reasoning. This is advanced as a conscience clause. It is a conscience clause that qualifies implementation of those provisions of an Act of Parliament contrary to the spirit of the enactment. As such, it is indeed the motivation. It is a wholly unacceptable position. That Act was brought in after a pretty tough dispute in your Lordships' House. I supported the provisions. My noble friend opposed them and we both have an interest to declare. I certainly declare mine. The reasons for retaining my position could not have been better put than by the noble Lord, Lord Hunt of Kings Heath. The amendment expressly recognises an aversion to homosexuals as adopters or unmarried couples.

Baroness Blatch

My Lords, it does not.

Lord Campbell of Alloway

My Lords, it does. In terms. If my noble friend would like me to give way, I shall give way.

Baroness Blatch

My Lords, indeed it does not. Just like the doctor who does not wish to be involved in aborting babies, the amendment refers to the profound beliefs of social workers in the way in which children should be placed. I made a specific point when I said it does not stigmatise homosexuals in any way. My amendment just protects the right of the social worker not to be given that work to do.

6.30 p.m.

Lord Campbell of Alloway

My Lords, I am grateful to my noble friend. I hear what she says and shall try to deal with it in a moment, but I really cannot deal with interruptions from a sedentary position—they make it quite impossible to make a speech.

If one looks at the terms of the amendment, it is manifestly plain that it recognises an aversion to unmarried couples as adopters which extends, against the background of the whole debate in this House, to homosexual couples. Before this, a single homosexual could adopt. The amendment totally ignores the absence of any evidence of any untoward conduct by a single homosexual adopter in the past. That was a matter that carried some credence when your Lordships considered the subject in a strenuous debate, argued by the noble Lord, Lord Hunt of Kings Heath, with my noble friend Lady Blatch arguing against him.

The amendment also ignores the stringency of the vetting procedure, and another matter that was of considerable importance in the debate—the plight and interests of those thousands of children in care who seek the benefit of a home, education, prospects for a happy life and so forth.

It is understood that it is the intention to take the opinion of your Lordships' House with a free vote on these Benches. That is why I have spoken at a little length today, and I seek your Lordships' indulgence for having done so.

Baroness Richardson of Calow

My Lords, I should like to support the amendment. Your Lordships will know that I wholeheartedly agree with the adoption provisions, and I have spoken many times on the matter in this House. Some people have very strong convictions and I believe that their employment should not be put at risk because of them, although I do not share that viewpoint in any way.

My primary reason for supporting the amendment is to safeguard the rights of those couples described under proposed subsection (2)(a) and (b) who offer themselves for assessment. They have a right to be assessed without prejudice, whether acknowledged or unacknowledged, by those who do the assessment. They have a right to be judged by criteria that are as objective as they can be, and which would be better preserved if those with strong conscientious objections over the matter were allowed not to be put in the situation of having to make that judgment.

I support the amendment, which would benefit not only those with strong religious convictions but, primarily, those who need to be assessed in a proper way.

Baroness Barker

My Lords, I join the debate with some regret, as these matters have been debated at considerable length on many occasions.

I shall deal with two points. First, in moving her amendment the noble Baroness, Lady Blatch, said that those of us who oppose her do so on a misunderstanding of her intent. I believe that we do not do so, but that we understand entirely what the amendment seeks to do. It seeks not to overturn your Lordships' decision on same-sex couple adoption but to undermine it in practice. That is as unacceptable as seeking to overturn it.

We all know that principles have to be put into action. Anyone who has read at length the Climbié report will know what life is like in a social services department, particularly in a children's unit. The amendment would enable social services departments, which are already working beyond capacity in many cases, particularly in children's work, to keep on their staff people who absent themselves from part of their work. The net effect would be that all children would suffer.

The most dangerous thing about the amendment—as I said when we discussed it in previous debates—is the precedent that it sets that the beliefs of staff and social services departments take precedence over the needs and wishes of users. If noble Lords have read the Climbié report at any length, they will know what a dangerous precedent that would be. Tremendous work is being done in the social work profession to move in a way that is completely contrary to that.

Secondly, I want to address a point made by the noble Baroness, Lady Richardson of Calow. I hold her in high regard, as I have done throughout all our decisions, and I have had similar thoughts to those that she has expressed. Ultimately, much though it pains me to disagree with her, I believe that she is wrong. I came to my conclusion after spending time reading a lot about the history of adoption and fostering in this country. During the passage of the adoption Bill, I spent considerable time talking to people who were coming to terms as adults with the effects of decisions made on their behalf by people who thought that they were acting with the best of intentions.

Adoption is always an expression of the views and philosophy of the society of the time. If one goes back into the history of fostering and adoption, one comes across instances where people of undoubted good faith and intentions made decisions because of their beliefs on matters of race and religion. From our standpoint now, we can see that those decisions have had the most damaging effect on children.

I am haunted by many of the letters that I received throughout the passage of the adoption Bill, but one in particular sticks in my mind. A man was trying to figure out why as a child he was moved on from a very happy placement. He said that the only reason he could possibly think of was that his foster parents were Jewish and that he was not: he wished that he had been left in that happy situation, Christian though he was—and still was when I spoke to him—rather than being moved.

I have no doubt that in the course of our debates we were right to stick with the principle in Clause 1 of the Adoption and Children Act 2002 that it is the best interest of the child that is paramount. That is why I believe that the amendment moved by the noble Baroness is not only wrong but dangerous. I therefore hope that noble Lords will retain the decision that we have made on at least six occasions when we have discussed the matter.

Earl Russell

My Lords, the question of the rights of the individual conscience against the state is one that has absorbed some of the finest minds in our cultural tradition over some 2,000 years and more. Distilling all that into a few words is something of a challenge, but I believe that I can see something of a distinction, to which my noble friend Lady Barker referred.

Where, as an individual, one is commanded to do something that one thinks is sinful, one must not do it. But when one is taking part in the provision of a public service, as my noble friend Lady Barker said, the users also have rights. There the principle of the rights of conscience, although it cannot ever be extinguished, must be handled with a good deal more caution and balance.

I have had to think quite hard about this because a great many of the changes imposed on universities by successive governments have involved me in doing things against which my conscience protested. In some cases I have managed to make the cup pass from me by the exercise of some ingenuity. But I have taken the line throughout that a public service is to an extent a seamless robe, and if one cannot do what is required in that service, then one must resign from it. Since the Education Act 1988 I have been several times very near doing that myself. But I would not have claimed the right to exercise my individual conscience to refuse to perform a service which I then knew had to fall on long-suffering colleagues who were desperately overworked already and who in many cases might dislike it almost as much as I did.

The point made by the noble Baroness, Lady Richardson of Calow, was one of great brilliance, but not therefore necessarily a point of truth. It is a point which only a very great and sensitive mind could have made. But if one thinks, for example, of the first women to attempt to enter public and political life, they also had to face assessment from people who took a very dim view indeed of the political powers of women. I believe that they were right in deciding—and my grandmother was among them—that it was much better to face down these dangers at the earliest possible stage because equality would never be achieved until one took the bull by the horns, faced down the dangers and the hostility and defeated them.

I believe that the women who took that attitude were right. They suffered a good deal in doing it, but I believe that the suffering was shrewdly and deliberately chosen. I wonder whether these cases have some parallel element.

Lord Bassam of Brighton

My Lords, this has been a valuable discussion, revisiting an issue which has been debated twice already within the confines of this Bill, in Grand Committee and on Report. It would be unkind of me not to join in the congratulations to the noble Baroness, Lady Batch, on her tenacity. I appreciate that and also her sincerity in these matters. But, like the noble Baroness, Lady Barker, and the noble Lord, Lord Campbell of Alloway, I believe that the noble Baroness, Lady Blatch, is clear in her intent. She accepts the will of Parliament in these matters. She well understands that the impact of her amendment, were it to be carried by the House, would undermine the will of Parliament. I believe that is the case and that that view is generally shared in your Lordships' House.

At each stage of this Bill we have explained why the clause is inappropriate. We continue to resist the amendment for reasons that I intend to spell out very clearly. As we all appreciate, Amendment No. 13 would ensure that no person working for or on behalf of a local authority shall be under any duty, whether by contract or by any statutory or other legal requirement, to participate in adoption placements or processing adoption applications to which they have a conscientious objection.

This refers to cases where children are to be placed for adoption with an unmarried couple or with one person who is in fact part of a couple living together as partners in an enduring family relationship. It also covers the processing of these adoption applications.

The Adoption and Children Act 2002 allows for the first time unmarried couples, regardless of their sexual orientation, to apply to adopt a child jointly. However, as we all understand, it has long been possible for a person in an unmarried relationship to apply to adopt as a single person.

The Adoption and Children Act does not therefore raise any fundamental new issues, so we do not believe that there is any need to make special provision for conscientious objections as a result of the change to enable unmarried couples to adopt jointly. Arguably, the key benefit for children of the change in the 2002 Act is that it enables a child adopted by an unmarried couple to have the permanence and security of having two legal parents. I believe that all Members of the House would welcome that.

The new clause raises employment issues that are more suitably addressed by the Employment Equality (Religion and Belief) Regulations 2003, which were approved by both Houses on 17th June. These regulations will prohibit discrimination on the grounds of religion or belief in employment and vocational training.

Local authorities have a duty to maintain an adoption service in their area that meets the needs of those who may adopt a child. This includes unmarried couples and individuals who are in fact part of a couple. As many noble Lords have said, the clause would make it more difficult for local authorities to provide a service and to meet their duties and could well lead to delays in the assessment of prospective adopters able to meet the needs of children waiting for adoption. I do not believe that anyone sees that as a desirable outcome. The Government believe that it is unacceptable to risk vulnerable children losing out on the chance of, or experiencing delays in, finding a new family.

I believe that the comparison drawn with conscientious objection to abortion in earlier debates is unhelpful in that conscientious objection to participating in an abortion procedure often raises strong ethical issues around the sanctity of life whereas objecting to non-married couples adopting is about judgmental attitudes on the lifestyle of individuals and their personal choices. There is a profound difference in that, which seems entirely inappropriate to the present.

As I said at the outset, I do not doubt the noble Baroness's sincerity and I certainly do not doubt her tenacity. But I hope that, having listened to the arguments, the noble Baroness will be able to withdraw the new clause.

6.45 p.m.

Baroness Blatch

My Lords, I thank the Minister most strongly for at least not doubting my sincerity and motivation for tabling the amendment. My noble friend Lord Campbell of Alloway and the noble Baroness, Lady Barker, do doubt my sincerity. They have attributed to me motivations which I find deeply hurtful and which are simply wrong. I want to protect people like Norah Ellis and Dawn Jackson, the lady I heard about today, and others whose jobs are now at risk. In fact, what those two ladies experienced was frightful. It was discrimination against them because of their beliefs, which I understand from what the noble Lord has just said gave—

Earl Russell

My Lords, I speak on behalf of my noble friend Lady Barker. I never understood her to be referring to the noble Baroness's intentions. I have checked this reading with my noble friend. She acknowledges the noble Baroness's sincerity completely. What was being discussed was the effect of the amendment. Even after Pepper v Hart the mind of the mover is not the sole guide of the courts to the intention of Parliament. I believe that my noble friend Lady Barker is right about what will be taken to be its intention. I admit that the noble Baroness believes otherwise, but this is simply a difference of opinion between us.

Baroness Blatch

My Lords, the noble Earl will receive a very apologetic letter from me tomorrow if I am wrong, but I remember the noble Baroness saying that she did not think that I was invalidating the previous Act of Parliament, but that my intention was to undermine it. That was personal against me. I shall read Hansard and I promise a profuse apology if I misinterpreted the noble Baroness.

My motivation is that, just like medical professionals, the professionals involved in adoption have a strong belief on two grounds. One is practical, and is supported by evidence that my noble friend. said does not exist. I have not chosen to engage that argument because it was lost when the decision was taken by Parliament to allow same-sex adoption. However, I invoked the other argument: that their religious beliefs are such that they would find it in all conscience difficult to engage in processing and/or assisting in same-sex adoption.

I know that the noble Baroness, Lady Richardson, and I are not usually on the same side, but I thank her for what she said because she introduced a different argument. It would be difficult for someone holding strong views who was well known in the authority—as indeed they were in Sefton Borough Council—to be assessed knowing that someone had a prejudice or a belief. We can argue about the words. They would not feel secure that they were being judged or assessed fairly. That is a powerful argument for which I am grateful.

Many of the comments made are not acceptable as arguments. There are no fewer abortions simply because some doctors do not perform them and some professionals in the medical world do not assist with them. That is managed in the health service, just as it could be managed in the world of social services. There is always more work than there are people to carry it out, as the noble Baroness, Lady Barker, said. Therefore there is always a choice of work for these fine, exemplary workers to be put to and to allow them to exercise their conscience not to be involved in such work.

It was not my intention to undermine the will of Parliament, but I oppose this level of intimidation against good, honest people; highly experienced social workers working in the interests—as they feel—of children. They should not be discriminated against simply because of their belief. I wish to test the opinion of the House.

6.52 p.m.

On Question, Whether the said amendment (No. 13) shall be agreed to?

Their Lordships divided: Contents, 63; Not-Contents, 142.

Division No. 5
CONTENTS
Allenby of Megiddo, V.	Kimball, L.
Astor of Hever, L.	King of Bridgwater, L.
Blatch, B.[Teller]	Laird, L.
Brougham and Vaux, L.	Liverpool, E.
Burnham, L.	Lyell, L.
Byford, B.	McColl of Dulwich, L.
Caithness, E.	Mancroft, L.
Carlisle of Bucklow, L.	Masham of Ilton, B.
Carnegy of Lour, B.	Montrose, D.
Colwyn, L.	Northbourne, L.
Cope of Berkeley, L.	Northesk, E.
Craig of Radley, L.	O'Cathain, B.
Crickhowell, L.	Onslow, E.
Denham, L.	Park of Monmouth, B.
Dixon-Smith, L.	Peterborough, Bp.
Eden of Winton, L.	Plumb, L.
Elliott of Morpeth.L.	Reay, L.
Elton, L.	Rees-Mogg, L.
Flather, B.	Richardson of Calow, B.
Fookes, B.	Roberts of Conwy, L.
Geddes, L.	Rochester, Bp.
Glentoran, L.	Selsdon, L.
Griffiths of Fforestfach, L.	Stoddart of Swindon, L.
Hanham, B.	Strathclyde, L.
Hanson, L.	Tebbit, L.
Hodgson of Astley Abbotts, L.	Thomas of Gwydir, L.
Howe, E.	Ullswater, V.
Howell of Guildford, L.	Wade of Chorlton, L.
Hurd of Westwell, L.	Wakeham, L.
Hylton, L. [Teller]	Waldegrave of North Hill, L
Jopling, L.	Willoughby de Broke, L.

NOT-CONTENTS
Acton, L.	Bassam of Brighton, L.
Addington, L.	Berkeley, L.
Alderdice, L.	Bernstein of Craigweil, L.
Alli, L.	Bhatia, L.
Archer of Sandwell, L.	Blackstone, B.
Ashton of Upholland, B.	Borrie, L.
Barker, B. [Teller]	Brooke of Alverthorpe, L.
Barnett, L.	Burlison, L.

Buscombe, B.	McCarthy, L.
Campbell of Alloway, L.	Macdonald of Tradeston, L.
Campbell-Savours, L.	Mclntosh of Haringey, L.
Carlile of Berriew, L.	McIntosh of Hudnall, B.
Carter, L.	MacKenzie of Culkein, L.
Chandos, V.	Mackenzie of Framwellgate, L.
Chorley, L.	Mackie of Benshie, L.
Christopher, L.	McNally, L.
Clarke of Hampstead, L.	Maddock, B.
Clinton-Davis, L.	Mallalieu, B.
Cohen of Pimlico, B.	Mar and Kellie, E.
Corbett of Castle Vale, L.	Massey of Darwen, B.
Craigavon, V.	Merlyn-Rees, L.
Crawley.B.	Miller of Chilthorne Domer, B.
Dahrendorf, L.	Mitchell, L.
David, B.	Morgan, L.
Davies of Coity, L.	Newby, L.
Davies of Oldham, L.	Newton of Braintree, L.
Dean of Thornton-le-Fylde, B.	Nicol, B.
Desai, L.	Northover, B.
Donoughue, L.	Norton of Louth, L.
Dormand of Easington, L.	Orme, L.
Dubs.L.	Patel of Blackburn, L.
Elder, L.	Pendry, L.
Evans of Temple Guiting, L.	Peston, L.
Falconer of Thoroton, L.(Lord Chancellor)	Pitkeathley, B.
	Prys-Davies, L.
Farrington of Ribbleton, B.	Radice, L.
Filkin L	Ramsay of Cartvale, B.
Finlay of Llandaff, B.	Randall of St. Budeaux, L.
Gale, B.	Razzall, L.
Gavron, L.	Rea, L
Gibson of Market Rasen, B.	Rendell of Babergh, B.
Golding, B.	Rennard L.
Goldsmith, L.	Renwick of Clifton, L.
Goodhart, L.	Richard L.
Goudie, B.	Rooker, L.
Gould of Potternewton, B.[Teller]	Roper, L.
	Russell, E.
	St. John of Bletso, L.
Graham of Edmonton, L.	Sandwich, E.
Greengross, B.	Scott of Needham Market, B.
Grocott, L.	Sharp of Guildford B
Hamwee B.	Shutt of Greetland, L.
Hams of Haringey, L.	Simon, V
Harrison, L.	Smith of Leigh, L.
Haskel, L.	Stern B
Hayman, B.	Stone of Blackheath, L.
Hilton of Eggardon, B.	Symons of Vernham Dean, B.
Hogg of Cumbernauld, L.	Temple-Morris, L.
Hollick, L.	Tomlinson, L.
Hollis of Heigham, B.	Tope, L
Howells of St. Davids, B.	Tordoff, L.
Hoyle, L.	Turnberg, L.
Hughes of Woodside, L.	Turner of Camden, B.
Hunt of Kings Heath, L.	Wallace of Saltaire, L.
Irvine of Lairg, L.	Walmsley. B.
Islwyn, L.	Warnock, B.
Jay of Paddington, B.	Watson of Richmond, L.
Jones, L.	Wedderburn of Charlton, L.
King of West Bromwich, L.	Whitaker, B.
Kirkhill, L.	Whitty.L.
Levy, L.	Williams of Elvel, L.
Lipsey, L.	Williams of Mostyn, L. (Lord President of the Council)
Livsey of Talgarth, L.

Resolved in the negative, and amendment disagreed to accordingly.

7.3 p.m.

Lord Hanningfield

moved Amendment No. 14: After Clause 112, insert the following new clause—

"PARISH COUNCILS (MODEL CODE OF CONDUCT) ORDER 2001 (1) The Parish Councils (Model Code of Conduct) Order 2001 (S.I. 2001/3576) shall cease to have effect. (2) This section shall come into effect on the day on which this Act is passed.

The noble Lord said: My Lords, we now return to an amendment that we first debated on Report. We do so because, as that debate showed, at stake are some interesting issues which we believe require further consideration. I should hope that we would all agree that parish councillors do an enormous amount of good work for their communities, often for little recognition or reward. They do this because they are public-minded citizens with a real sense of community who wish to make a positive impact on their localities. The bottom line is that we need more people like that. We want to encourage people to become parish councillors and not frighten them off.

As it currently stands, the parish councils' code of conduct requires all parish councillors to register interests, including their property, their employment and their business interests. It also requires them to register the interests of their spouses and relatives. Registering an interest is different from declaring an interest. It involves making a written and public statement of interest up front and in advance regardless of the likelihood of those interests ever having any bearing on any issues ever discussed or likely to be discussed within a parish council.

Parish councillors are not parliamentarians dealing with major issues of state; they are for the most part responsible for important but very strictly local issues. A comprehensive register of interests is ridiculous over-regulation. That is why we object to it. Perhaps the Minister will tell us that parish councils are seething hotbeds of corruption and fraud doing major damage to the economy and infrastructure of this nation. On Report, the noble Lord, Lord Bassam, quoted some examples of misconduct. No one would minimise the seriousness of any form of misconduct in public life, and I unreservedly support him in condemning those activities. However, if I remember the figures correctly, after investigation, 83 councillors were subjected to a period of disqualification. That means that, in a 12-month period, of approximately 20,000 parish councillors, less than half of one per cent were found guilty of any, and sometimes minor, misconduct. I may have the numbers slightly wrong, but I think that the point is clear. That is the scale of magnitude of wrong-doing with which we are dealing.

No one disputes at all the need for probity in public life. The question is whether noble Lords believe in the concept of balance. Should we regulate to eliminate the possibility of any risk under any circumstances and in every situation? Or should we try to make regulation proportionate to the risks involved? I favour the latter option, first, because there are costs involved in regulation, and those costs must be balanced against the level of risk against which they seek to offer protection. Secondly, all regulation potentially has the capacity to damage the institution or body regulated. In the case of parish councils, that is an outcome that we should all deplore.

In May 2002, the University of Aberystwyth published an ESRC report on community governance in England and Wales. That report found that nearly 40 per cent of parish councils did not have enough councillors to fill their seats and that the situation had been in decline for more than a decade. However, the report concluded: It has been suggested to us that one factor behind the lack of candidates is that being a parish councillor is seen as an onerous task with little reward, and the introduction of the new code of conduct may prove a further disincentive".

For the most part parish councillors are giving up their time for free to address very local issues. They do so because they are committed to the community ethic. We need to encourage more people to take that view. What the Government have done through the introduction of this code has had the opposite effect. It has made a bad situation worse and threatens to undermine one of the oldest institutions of government in this country. I hope that the Minister will consider this amendment. I beg to move.

Baroness Maddock

My Lords, we made our position very clear at other stages of the Bill. We on these Benches believe that if one puts oneself forward in any way for public office, one opens oneself to public scrutiny. I have listened to the arguments time and again, such as the fact that it may be a small council and councillors are not paid. With respect. I do not think that that is relevant. The important thing is that one is speaking and making decisions on behalf of others. All we are asking is that people use their common sense and declare where they are coming from and what possible interests they might have in the matter they are discussing.

Earlier this week, this House again addressed the issue of what one should declare as an interest. I think that a certain amount of common sense comes into this. I have briefly reread the requirements. A lot of fuss has been made about this. but I am clear that if someone wants to make decisions in public service on behalf of others, then the public have the right to know exactly where that person is coming from and what their interests are. If people are not prepared to do that. then it seems to me that they are not really very community-minded.

Lord Hylton

My Lords, having served in the past on a parish council, for about 20 years, in one small Somerset village, I strongly support the amendment. In moving it, the noble Lord, Lord Hanningfield, drew the key distinction between registration and declaration of interests. I hope that the Government listen to all his other arguments.

Lord Rooker

My Lords, essentially the new clause seeks to remove parish councils from the ethical framework of behaviour that was established in the Local Government Act 2000. I am astonished that at Third Reading the matter is on the Order Paper. It seeks to remove parish councils from the model codes of conduct that followed that legislation by simply revoking the code that currently applies. I agree that separate codes have been established for local authorities, police authorities, national park authorities, the Broads authorities and the parishes. They cover everybody. Why should there be an exemption for one group of people who have put themselves forward to serve on those bodies? That could not possibly be justified. We would almost be saying that any level of behaviour goes for that sector. That would be unacceptable to the public. It should be unacceptable to Parliament. Also, the public would not have a test by which to judge the behaviour of people whom they elect.

I accept that there are difficulties. Earlier this year I was hoping to vote for the first time in a town council myself, but there were only 10 candidates for 13 places, so there was no possibility of voting. I am not aware—I have not inquired—and I have seen no evidence that it was this code that was the cause of that. The public have the right to expect that all the people who are taking decisions on their behalf that may affect their daily lives observe the highest standards of conduct. I cannot see the problem about operating the code. All parish councils are statutory consultees on planning issues. Some parishes have budgets of tens of thousands of pounds. I appreciate that the variation in parishes and the size of their budgets is enormous. However, some are very large, but why should the small ones be exempt? They are making the same kind of decisions—true, for a smaller area—but there is no good argument that they should be exempted.

It is astonishing that when that legislation was before Parliament and I was elsewhere in the Government—this was not the key matter that I was dealing with—the National Association of Local Councils, which represents the parish councils, pressed for their inclusion within the new ethical regime. I have not read the debates so I do not know whether that was opposed in this place, but the idea that the parishes should be pulled out now, just as the code is starting to operate, is nonsense. Much of the new code is similar to the previous code that was put in place in 1990. I have not personally checked that, but that is my information.

The main difference is that the new code requires registration of interests and the standards board provides an effective means to enforce it. In some ways the introduction of the standards board should probably have solved all of the problems for people in public life. When allegations are made against them for all kinds of spurious reasons, the standards board is there as a back-stop to make sure that we have a proper independent judgment over the operation of the codes. I understand that half of the allegations so far sent to the standards board relate to parish councillors. I cast no aspersions about parish councillors on that matter—there are an enormous number of them compared to county councillors and district councillors. I do not know the precise figures.

The effect of the amendment would repeal the current order. It does not repeal the power of the Secretary of State to introduce an order. If the amendment were pushed—I sincerely hope it is not—I hope that it will not be carried. If it were, I suspect the Secretary of State would introduce a new order the following day, because his powers to produce an order are not affected by the amendment. There might be an argument over the will of Parliament et cetera, saying that parishes should not be covered. The other place would smartly send the matter back here. It is true that there are people who do not like the idea of answering a few personal questions as a result of seeking public office. The balance has to be made by them. It is their personal judgment. That is why the overwhelming majority of people have accepted the code. I have no figures about the number of parish councillors who have been removed for refusing to sign—but it has to be a tiny percentage. It is the norm to sign up. To remove it for only one part of public life would send completely the wrong signals to the public. All of the other types of councils are covered, including the police authorities, the national park authorities and the Broads authorities. Why do we not have an amendment to exempt some of those bodies? Why just the parish councillors? We have had no explanation for that.

It is true that there have been a few noises, but people should not become the mouthpieces for a few noises. We are dealing with legislation. The proposal would send the wrong impression to the public that there was an ethical code of behaviour that people in public life were expected to operate, but with certain groups exempted. That cannot be justified. I say to the noble Lord, Lord Hanningfield, one cannot justify that across the garden fence or in the local shop one could say "it does not matter with our councillors. We do not have to know where they are coming from, what their interests are, irrespective of the decisions that they might be taking". I repeat that they are statutory consultees on planning applications. That is in some ways one of the most sensitive areas that people can deal with.

I find it difficult to believe that the Conservative Opposition is serious in this matter, because it would send wholly the wrong signals to the public in exempting parish councils from the ethical codes of behaviour. I hope that it is not pushed to a vote, and if it is I hope that it will be voted down.

Lord Hanningfield

My Lords, I thank the Minister for that reply. I made it clear in proposing the amendment that no-one should be absolved from declaring an interest—that is what the noble Baroness, Lady Maddock, said in her contribution. People should always declare an interest if they have any kind of involvement in the subject that is being talked about—whether it is here a parish council, or wherever.

I was pleased to hear the Minister say that he was not the Minister at the time. When the Labour Party was first elected I was the vice-chairman of the Local Government Association. I spent much time with the then Minister, Hilary Armstrong, discussing this legislation. At that time no-one envisaged a virtual castle in London with the national standards board presiding over very minute complaints—mostly about people calling each other four letter words. If there was an issue of real corruption then it should be considered by the board. The process was set up differently from that which was expected by local government. That is why parish councils and others did not mind coming in—they thought that there would be some local mechanism. In fact the measure does enable in other parts of the Bill more local discussion of very small complaints—which is what should have been done from the beginning. There were problems with the legislation from the start, which this Bill rectifies. I am content with that.

However, parish councils are different. I am now an elected county councillor. I have 10 parish councils in my patch. They are much like the "Vicar of Dibley". The matters that they discuss are mainly litter and the sports field. The borough council normally takes planning decisions contrary to the views of the parish council anyway. It is the borough council that takes the planning decisions. The legislation that affects the parish councils was a sledgehammer to crack a nut. It has put people off from standing for parish council. No-one should be absolved from declaring an interest in any subject in which they have some involvement. But for parish councillors to have to list every asset that they have, when they are never going to be discussed at a meeting is ridiculous. Therefore I wish to test the opinion of the House.

7.20 p.m.

On Question, Whether the said amendment (No. 14) shall be agreed to?

Their Lordships divided: Contents, 55; Not-Contents, 121.

Division No. 6
CONTENTS
Astor of Hever, L. [Teller]	Griffiths of Fforestfach, L.
Blatch, B.	Hanham, B.
Brougham and Vaux, L.	Hanningfield, L.
Burnham, L.	Howell of Guildford, L.
Buscombe, B.	Hurd of Westwell.L.
Byford, B.	Hylton, L.
Caithness, E.	Jenkin of Roding, L.
Campbell of Alloway, L.	Jopling, L.
Carnegy of Lour, B.	Kimball, L.
Chalfonl, L.	King of Bridgwater, L.
Coe, L.	Liverpool, E.
Colwyn, L.	Lyell, L.
Cope of Berkeley, L. [Teller]	Mancroft, L.
Craigavon, V.	Montrose, D.
Denham, L.	Newton of Braintree, L.
Dixon-Smith, L.	Northesk, E.
Elliott of Morpeth, L.	Norton of Louth, L.
Elton, L.	O'Cathain, B.
Flather, B.	Onslow, E.
Fookes, B.	Plumb, L.
Geddes, L.	Reay, L.
Glentoran, L.	Rees-Mogg, L.

Roberts of Conwy, L.	Tebbit, L.
Saltoun of Abernethy, Ly.	Thomas of Gwydir, L.
Selsdon, L.	Ullswater, V.
	Wakeham, L.
Skelmersdale, L.	Warnock, B.
Strathclyde, L.	Willoughby de Broke, L.

NOT-CONTENTS
Acton, L.	Islwyn, L.
Addington, L.	Jay of Paddington, B.
Alderdice, L.	Jones, L.
Alli, L.	King of West Bromwich, L.
Archer of Sandwell, L.	Kirkhill, L.
Ashton of Upholland, B.	Levy, L.
Barker, B.	Lipsey, L.
Bassam of Brighton, L.	Livsey of Talgarth, L.
Berkeley, L.	Lofthouse of Pontefract, L.
Bernstein of Craigweil, L.	McCarthy, L.
Blackstone, B.	Macdonald of Tradeston, L.
Borrie, L.	McIntosh of Haringey, L.
Brooke of Alverthorpe, L.	McIntosh of Hudnall, B.
Burlison, L.	MacKenzie of Culkein, L.
Campbell-Savours, L.	Mackenzie of Framwellgate, L.
Carlile of Berriew, L.	Mackie of Benshie, L.
Carter, L.	McNally, L.
Chandos, V.	Maddock, B.
Chorley, L.	Mallalieu, B.
Clarke of Hampstead, L.	Mar and Kellie, E.
Clinton-Davis, L.	Massey of Darwen, B.
Cohen of Pimlico, B.	Merlyn-Rees, L.
Corbett of Castle Vale, L.	Miller of Chilthorne Domer, B.
Craig of Radley, L.	Mitchell, L.
Crawley, B.	Morgan, L.
David, B.	Northover, B.
Davies of Coity, L.	Orme, L.
Davies of Oldham, L. [Teller]	Pendry, L.
Dean of Thornton-le-Fylde, B.	Peston, L.
Desai, L.	Pitkeathley.B.
Dixon, L.	Radice, L.
Dormand of Easington, L.	Ramsay of Cartvale, B.
Dubs, L.	Randall of St. Budeaux, L.
Elder, L.	Razzall, L.
Evans of Parkside, L.	Rea, L
Evans of Temple Guiting, L.	Rendell of Babergh, B.
Falconer of Thoroton, L. (Lord Chancellor)	Rennard, L.
	Renwick of Clifton
	Richard, L.
Farrington of Ribbleton, B.	Rooker, L.
Filkin, L.	Russell, E
Gale, B.	Scott of Needham Market, B.
Gibson of Market Rasen, B.	Sharp of Guildford, B.
Golding, B.	Shutt of Greetland, L.
Goldsmith, L.	Simon, V.
Goodhart, L.	Smith of Leigh, L.
Goudie, B.	Stone of Blackheath, L.
Gould of Potternewton, B.	Symons of Vernham Dean, B.
Graham of Edmonton, L.	Temple-Morris, L.
Grocott, L.[Teller]	Tomlinson, L.
Hamwee, B.	Tope, L.
Harris of Haringey, L.	Tordoff, L.
Haskel, L.	Turnberg, L.
Hayman, B.	Turner of Camden, B.
Hilton of Eggardon, B.	Wallace of Saltaire, L.
Hogg of Cumbernauld, L.	Walmsley, B.
Hollick, L.	Wedderburn of Charlton, L.
Hollis of Heigham, B.	Whitaker, B.
Howells of St. Davids, B.	Whitty, L.
Hoyle, L.	Williams of Crosby, B.
Hughes of Woodside, L.	Williams of Mostyn, L.(Lord President of the Council)
Hunt of Kings Heath, L.

Resolved in the negative, and amendment disagreed to accordingly.

7.30 p.m.

Baroness Hamwee

moved Amendment No. 15: After Clause 114, insert the following new clause—

"GOODS, FACILITIES AND SERVICES In section 19 of the Disability Discrimination Act 1995 (c. 50) (discrimination in relation to goods, facilities and services), after subsection (3) there is inserted— (3A) In subsection (3)(h), the services of a local authority shall include those it provides to its elected and co-opted members."

The noble Baroness said: My Lords, the amendment would insert a new clause pursuing a matter that was dealt with at a previous stage of the Bill. As one noble Lord said earlier, it would avoid embarrassment by seeking an assurance from the Government.

The amendment proposes to extend the Disability Discrimination Act to local authority members. My noble friend Lord Addington has tasked me to state why I have not extended the proposal to all elected representatives. I take his point that this is a local government Bill. However, I hope that in his response the Minister can give us some hope on this point.

The amendment implements the outstanding recommendation of the Disability Rights Task Force that local councils should be placed under a duty not to discriminate against disabled councillors, including a duty to make reasonable adjustment. The Government have said that they will address the matter as soon as legislative time allows. I hope that legislative time is galloping towards this.

I am surprised to learn from the Disability Rights Commission, which supports this proposal, that over 13 per cent of local councillors in England and Wales have a disability. It must be a given that we want to encourage the involvement in the public services of all who have a contribution to make and that, by failing to ensure that those with a disability can overcome that disability through facilities and services, society itself risks losing out by putting barriers in the way of tapping all available talents. It is also a given that discrimination is wrong.

I refer to such matters as communications support— providing materials in accessible format. I am told of one town councillor who could not hear debates properly after renovations to his council chamber. The other two noble Lords who, like me, have experience of a new chamber, not at local government level, will know that it can present a considerable problem if it is designed so that the public can hear but members cannot hear one another.

I hope that the Government will soon publish a draft disability Bill. I know that at a previous stage the Minister said that this issue would be a matter for the Secretary of State for Work and Pensions and proposed to raise the matter with him. I hope that we can be assured today that the draft disability Bill will include provision to plug that loophole. If we receive that assurance, I shall be happy to accept it and shall not need to take the matter further on the face of the Bill. I beg to move.

Baroness Hanham

My Lords, I have not put my name to the amendment, but I want to make it clear that we support it. Had I been quick enough, I would have added my name, but I was not. I want to make it clear that it receives all-party agreement.

Lord Bassam of Brighton

My Lords, I hope that my remarks will be welcomed. It is certainly my intention to be helpful on this amendment.

We argued earlier, and we stick to the point, that we feel that the amendment is unnecessary. But we understand and appreciate the motive behind it. Like the noble Baroness, I have been in council chambers which have appalling audio systems. They are a positive barrier to debate and are very unhelpful, particularly to those with a hearing difficulty. It is right that local authorities address the needs of those members of the authority who have any form of disability. We recognise and support that point.

As the noble Baroness has said, the issue of discrimination against disabled councillors was raised in 2000 by the Disability Rights Task Force. In responding to its report, the Government undertook in 2001 to extend the Disability Discrimination Act 1995 to local councillors.

We believe that it would be wrong to make piecemeal changes to the disability legislation. As the House is now aware, my right honourable friend the Secretary of State for Work and Pensions intends to publish a draft disability rights Bill later this year. We gave a commitment at Committee stage that my right honourable friend the Minister of State would write to those who raised concerns during the course of that debate. I am happy to say that, in response, the Secretary of State has confirmed his intention to legislate on this matter.

We believe that the disability rights Bill will be the correct legislative vehicle to consider extending the provisions of the Disability Discrimination Act. The Disability Rights Commission agrees with us in that regard and has made it plain that it prefers that as the best means of addressing the issue. So we are at one with the spirit behind the amendment. We accept the points that have been made and we intend to deal with them in the forthcoming disability rights Bill. Obviously, we hope that the noble Baroness will feel able to withdraw her amendment.

Baroness Hamwee

My Lords, I am grateful for that response. Part of the way through the Minister's speech, I thought that I should have to ask whether he had intentionally put a full-stop between "we will legislate" and "there will be a Bill". But he said at the end, as I understand it—I say this in terms so that he can contradict me if necessary—that the draft disability rights Bill will be the vehicle to deal with the issue. Yes, the Minister is nodding his acknowledgement that that is the case. On that basis I am glad to enable us to move on. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 115 [Local polls]:

[Amendment No. 16 not moved.]

Lord Rooker

moved Amendment No. 17: After Clause 118, insert the following new clause—

"REGULATION OF COSMETIC PIERCING AND SKIN-COLOURING BUSINESSES

(1) Section IS of the Local Government (Miscellaneous Provisions) Act 1982 (c. 30) (regulation of tattooing, ear-piercing and electrolysis businesses) is amended as follows.

(2) In subsection (1) (requirement for person carrying on business to be registered), for paragraph (b) (ear-piercing) there is substituted

1. "(aa) of semi-permanent skin-colouring;
2. (b) of cosmetic piercing; or"

(and in the side-note for "ear-piercing" there is substituted "semipermanent skin-colouring. cosmetic piercing").

(3) In subsection (2) (requirement to register premises where business carried on)—

1. (a) for "ear-piercing" there is substituted "semi-permanent skin-colouring, cosmetic piercing", and
2. (b) for "pierce their ears" there is substituted "carry out semi-permanent skin-colouring on them, pierce their bodies".

(4) In subsection (5) (local authority may not require particulars about individuals whose ears have been pierced etc.), for "or whose ears he has pierced" there is substituted ", whose bodies he has pierced or on whom he has carried out semi-permanent skin-colouring".

(5) After subsection (8) there is inserted—

"(9) In this section "semi-permanent skin-colouring" means the insertion of semi-permanent colouring into a person's skin."

(6) Schedule (Section (Regulation of cosmetic piercing and skin-colouring businesses): transition) (which makes provision about transition) has effect."

The noble Lord said: These amendments are to meet a government commitment to give local authorities outside London specific powers to regulate cosmetic body piercing and micropigmentation businesses. London local authorities already have such powers under private legislation.

The new clause would amend the Local Government (Miscellaneous Provisions) Act 1982 to bring cosmetic body piercing and micropigmentation businesses under the regulatory framework of registration arid by-laws that already apply to ear piercing, tattooing, acupuncture and electrolysis.

Under that framework, local authorities would be able to require cosmetic body piercing and micropigmentation businesses to register with them and observe by-laws on hygiene and cleanliness for preventing the transmission of infection. For example, businesses would be required to use sterile instruments for each client. It would be an offence to trade without registration or breach by-laws.

The term "cosmetic piercing" is used to include cosmetic body piercing and ear piercing as these are both forms of skin piercing to allow the insertion of jewellery into the skin. This is the approach taken in the London legislation. "Semi-permanent skin colouring", which means the insertion of semipermanent colouring into a person's skin, is used to include micropigmentation and related activities such as semi-permanent make-up and temporary tattooing. The use of this umbrella term should stand the test of time should further activities of this kind come into fashion.

The schedule allows a smooth transition when the new legislation is adopted by local authorities. In brief, the transitional provisions provide that the amendment does not affect persons and premises already registered for activities under Section 15 of the 1982 Act—for example, tattooing, ear piercing and electrolysis; the amendment does not affect pending local authority resolutions to apply Section 15 of the 1982 Act in their area; where a local authority has already resolved that Section 15 of the 1982 Act should be brought into force in their area for tattooing, ear piercing and electrolysis, the local authority will he automatically enabled to apply the registration and by-laws regime to cosmetic piercing and semi-permanent skin colouring; and a person and premises already registered for ear piercing shall be counted as registered for cosmetic piercing unless cosmetic body piercing is subsequently provided when a new registration would be required.

This is a serious issue and it is only the lateness of the hour that prevents me giving your Lordships some samples from my The Wildcat Collection catalogue of sophisticated body adornments, which has been on my bookshelf for a considerable number of years. I can show noble Lords that there is no part—and I mean no part—of the human anatomy that cannot have fitted to it a sophisticated body adornment. I do not have the guts to read out some of the details, but my noble friend on the Front Bench has been having e look. I have only one copy of this and I shall not put it in the Library.

I just want to make clear that we are talking about a very serious issue. I once did a TV programme, which is where I picked up this catalogue, and one consultant at one hospital—Wolverhampton I believe—gave examples of having to dig out of bodies some of these sophisticated body adornments—which is the phrase I shall always use—from the most unlikely places. He had been quite surprised himself but he knew that it did not all stop at nipple rounders or spiked nipple collars. There were polo locks and nostril studs arid all kind of things. There is a warning on some of the items that they are not suitable for genital piercing—although most of them are—which applies to both males and females. It requires the utmost care. In this case one can take one's own CD and they will do the piercing for you in air-conditioned premises. The prices are obviously a little out of date—I would not dream of reading out some of the prices—and quite modest. As I say, the catalogue has been on my bookshelf for some years.

People choose to do this. One issue I raised on Report was that of young children whose mothers were having them pierced, probably for their own gratification in a way. There is nothing intrinsically wrong or unhealthy in that as long as it is done under proper conditions. There is no question about that; no one says that anything is wrong. The evidence is that the legislation can work in London and we think that the time has come for premises to be more regulated, hence the Government have tabled this amendment. I am only sorry that there is not time to say where all the pear-drop and nuclear weights can be fitted on the body, and the ultimate necklace—I have to say—is not intended for the neck. I beg to move.

7.45 p.m.

Baroness Hanham

My Lords, I thank the Minister for the very welcome reception of this amendment. It was originally moved in the House of Commons by my honourable friend Philip Hammond. After vague promises there we reintroduced the amendment here to see whether we could get those promises firmed up. I am delighted that the Government have seen the sense and, indeed, the necessity of ensuring that these various piercings are carried out under regulated circumstances.

On Report I cited the case of a young man who had diabetes. No medical history was taken because there was no necessity to do so. And because no one was performing particularly capably in the premises where the piercing was carried out, he died. He got septicaemia. That was a desperately unhappy outcome of his trying to make himself look better.

I am delighted that the regulations will be put in force. The Minister was kind enough to write to me about the perplexing question of consent. As the Minister said, not only can mothers have their children's ears pierced, but on the other hand it would be the mothers who would give consent if they were asked for it. So that is a difficult area. I understand that this issue is covered by common law—for example, the assault of a person. So that if there was a complaint made it would, by definition, be something that could be dealt with, although it would probably have to be dealt with by civil prosecution. None the less, this is a huge step forward. I thank the Minister on behalf of my honourable friend, who has been sitting up there for a very long time. I think it is fair to say that he has given up at the one moment when he might have been given credit for the actions that he has taken. I thank the noble Lord.

On Question, amendment agreed to.

Lord Northbourne

moved Amendment No. 18: After Clause 118, insert the following new clause—

"EMPLOYMENT RIGHTS OF LOCAL AUTHORITY EMPLOYEES

(1) No employee whose employer is a local authority or local authority company shall be required to work on both a Saturday and the immediately following Sunday if that person has the care and control of a school-age child.

(2) On whichever day the employee is not required to work under subsection (1). he shall not be required to work at any time during that day.

(3) The Secretary of State may by regulation provide for—

1. (a) exemptions or exceptions to cover emergencies;
2. (b) rights of enforcement and redress for employees through courts or tribunals either already existing or to be established for this purpose;
3. (c) criminal sanctions.

(4) For the purposes of subsection (1), any adult with whom a school-age child customarily lives as part of his or her family has the care and control of that school-age child and where more than one adult qualifies under this test each of them has the care and control.

(5) In this section— employee" and "employer"—

1. (a) in relation to England and Wales, and Scotland, have the same meaning as in the Employment Rights Act 1996 (c. 18), and
2. (b) in relation to Northern Ireland have the same meaning as in the Employment Rights (Northern Ireland) Order 1996;
• "local authority" means a local authority in any part of the United Kingdom, including the Common Council of the City of London but excluding a parish or community council;
• "local authority company" means a company through which is exercised a power conferred under section 95;
• "school-age child" means a person who has attained the age of five but has not attained the age of eighteen."

The noble Lord said: My Lords, I have brought back Amendment No. 18 because a number of your Lordships have indicated that they feel it to be important; indeed, some have even suggested that it should be tested against the opinion of the House.

The amendment has now been revised by the addition of a subsection (3), which addresses some of the objections raised at earlier stages of the Bill, especially those relating to emergencies and emergency services. Those noble Lords who support the amendment believe two things: first, that local authorities should be setting a good example in respect to family friendly employment practices and that it is entirely appropriate that they should be asked to give a lead by Parliament in doing so; and, secondly, that children of school age should not be deprived of the time, love and care of their parents on both of the only two days of the week when they are not in school.

Research shows that children of school age, on average, will do better in school and in later life if they have the opportunity to spend time with their parents, doing things together, learning by example and having a normal happy family life. Surely, one day a week is not too much to ask for.

Children of school age who are left on their own all day when they are out of school are vulnerable. They are liable to join the gang at the end of the street or to get into trouble in one way or another. These things can, through boredom, be precursors to substance abuse and anti-social behaviour. Children need time with their parents. Yet there is clear evidence that family life is under increasing pressure today from the seven-day week. There is an increasing consensus among working fathers and mothers and their children that parental time at weekends, when the children are not in school, is an important issue which needs to be addressed quickly by the Government.

That is emphasised by the comprehensive summary of research published last week by the Joseph Rowntree Foundation. I give your Lordships one quotation from that research: Despite the plethora of new legislation and policy on families and work, and the need for some of these new employment laws to 'bed down', there are two areas where Government needs to consider further interventions. Long hours of work and Sunday and weekend work by parents of school age children need further consideration".

On Report the Minister said, sadly, that my amendment is inconsistent with the Government's general approach to better regulation. That is, we regulate only when there is an identified problem that cannot be solved in any other way. Well we now know, since last week, that this is an identified problem, a serious problem that has been identified by thorough research by the Joseph Rowntree Foundation in conjunction with London University. Will the Government either accept the solution I propose in this amendment or else come up with some other solution to the problem?

I know the Government are under pressure from local authorities to reject this amendment and I understand that some local authorities are so short-staffed that they have enormous difficulty in servicing all the demands of their care services including, particularly, those involving young people. But surely the solution is to staff the social services properly rather than to damage the nation's children? Damaging the nation's children is what we are doing by depriving them of family life.

Of course this will cost money, but if the present situation is leading to damage to the nation's children, albeit that that damage may not show for many years, is it not economic good sense to make the necessary investment now? The harm done to children by parental deprivation does not show up immediately but that does not mean that it will not come back to haunt us in the future. The effective care and education of the nation's children is crucial to the future of our society. I urge the Government and the House to take this amendment seriously.

I want to make one more point. The Government have already made a commitment to monitor how existing legislation is working and to commence a review in three years' time. However the existing law relates only to parents of children under six years old, it does not specifically cover families with children of school age. I sincerely hope the Government are prepared to take action on weekend working for families with school-aged children long before 2006, but whether or not they do, will they at least undertake to widen the monitoring and the reviewing of these issues so that it includes all families with school-aged children? I beg to move.

Baroness Blatch

My Lords, I rise to support the noble Lord, Lord Northbourne, enthusiastically and to congratulate him on his persistence. He listened to the arguments throughout the Committee stage and he has modified his amendment, which allows for those occasions when emergency services or unavoidable events require somebody to work Saturday or Sunday.

One argument that has been made to me is that almost nobody is required, I mean forced, to work on a Saturday or a Sunday. For those who believe that argument then the amendment is harmless. But if it is not the case and parents of young children are forced, required by the local authority, to work on Saturday and/or Sunday and are given no right whatever not to do so, then it seems to me that the amendment has force, and in that case it has my support.

There is much wringing of hands about young families, dysfunctional families, families that are not coping very well. Governments have set up endless committees, think tanks and task forces. The noble Baroness, Lady Ashton of Upholland, is constantly telling us about what the Government are doing to make life easier for parents bringing up children and how children should be our prime consideration. That is what the noble Lord, Lord Northbourne, has said throughout, that the consideration should be for the health and well-being of young children. For some the weekend, Saturday and/or Sunday, is very precious time with their children and it does seem to me that the amendment is a permissive amendment asking, for the right of parents of small children not to be required and/or forced to work on one of those two consecutive days, Saturday and/or Sunday.

There are many families where those are the only days they can work and, indeed, want to work. There are many people who live alone, and working at weekends is one way of getting out and meeting people. There are ways and means of covering it. For areas such as care homes, which I know are particularly sensitive areas, Monday, Tuesday, Wednesday, Thursday and Friday are as critical as Saturday and Sunday. Every day of the week is a critical day, and we are saying simply that parents of young children should not be forced. If they are, then it means that they would be denied and discriminated against for employment if they could be required to work on one of those days. They could not take the job unless they were allowed the right not to accede to that request. They would be discriminated against in the workplace and that would be wrong. I support the amendment wholeheartedly.

Lord Peston

My Lords, I rise to ask a question. I have followed this debate and I have been puzzled about it throughout. I understand why the amendment refers to a local authority, because we are discussing a local government Bill. The noble Lord, Lord Northbourne, has also referred to local authorities giving a lead, which is a quite separate matter.

Am I to understand that what the noble Lord, Lord Northbourne, is really saying is that this ought to apply to all firms in the British economy'? Is that what he really wants? I assume he must be arguing that because I cannot imagine that it would only be the children of local authority employees who would suffer if their parents were not there. So what he is really asking for is something much more fundamental; namely, that all firms in the British economy should have to have a law of this kind applied to them. That may well be right.

Certainly I am as sympathetic to the care of children as anybody could possibly be. In the case of my own children—well, I had an easy life as a professor—I was always available. Students got neglected but my children always came first. But the fact is that if our economy is to have any hope in the world whatsoever, to start to move in this direction would be a devastatingly costly exercise. It is all very well to put it forward, and I am as sympathetic as one can be, but to do it within the context of a Bill of this sort, given the fundamental principles involved, seems to be entirely inappropriate, not because the aim is not what we would like to achieve but simply because we are talking about massive costs. I would be very interested in what the Institute of Directors and the CBI would say.

Lord Northbourne

My Lords, does the noble Lord, Lord Peston, have any evidence of what those costs would be?

Lord Peston

My Lords, I believe, and I know from speaking to noble Lords opposite—the Tories—that there was a time when they believed in the working of the free market, and essentially I take the view that when we live in a free market economy the free market outcome is prima facie the correct outcome. Every so often when I say that to them they all look at me with horror, but the fact is that that used to be at least the Conservative view. I do not commit the CrossBenchers to anything.

My general view is that imposing burdens on the economy, bearing in mind that the overwhelming majority of people in this country work in the private sector, is something that we ought at least to be careful about.

As I said, I rise not because I do not accept the argument, I am extremely concerned about parents not being there for their children, but the consequences of this proposal are absolutely massive and I would wish to pause before we place this on the statute book in a local government Bill simply because we are discussing a local government Bill. I do not want to be negative in the sense that I do not agree with the sentiment. I do agree with it wholeheartedly, but I am genuinely concerned about the principle rather than the specific.

Lord Elton

My Lords, I rise to congratulate the noble Lord, Lord Peston, on the skill and elegance with which he evaded the question asked of him by the noble Lord, Lord Northbourne, which was where was the evidence for the massive cost to which he said this would give rise.

Lord Peston

My Lords, is the noble Lord, Lord Elton, actually saying that this would be costless? Is he saying that the business firms that do employ people over the weekend are idiots, that they do not know what is in their best interests, and they are somehow going out of their way to ill-treat their employees? The argument is ridiculous. All I am arguing is that the free market outcome is prima facie the correct outcome.

Lord Elton

My Lords, that was not actually the point on which the noble Lord was addressed. The question was, what was the evidence for the massive nature of the costs to which this gives rise. I am being prompted, but I cannot hear the prompts, so I shall continue unsullied by help or hindrance.

I support the noble Lord, Lord Northbourne, in a crusade that he has pursued for decades. It started in the days of "Keep Sunday Special", when he attempted to keep free an area of the week when people could count on being free at the same time as the others in their family. That attempt failed. The noble Lord is now trying to secure a time when children at school can be free at the same time as one of their parents, if one of their parents wishes.

I follow the noble Lord, Lord Peston—to his surprise—in thinking that, in principle, the proposed measure is a good thing. I would like to see it as accepted practice among all employers. The Bill applies only to local authorities, but, on the grounds that it is good to pilot any such innovation, this is a good, concise, contained area in which to do so.

I regret that the issue has arisen so late this evening, because my noble friend opened his remarks by saying that he had been advised to test the feeling of the House. I suspect that, on this matter, there is more dirigisme on the other side of the House than there is on this, and that it will be directed at seeing that the amendment fails. I would not like it to do so without recording my warm support for any move that strengthens the bond between parents and children in a society that is becoming increasingly corrosive of that link.

Lord Campbell of Alloway

My Lords, perhaps I may briefly, and without repetition, support the spirit of the amendment. For the very same reasons as were so well put by my noble friend Lady Blatch, which need no repetition, I hope that the opinion of the House shall not be sought tonight on the amendment. There are problems of costs to the local authorities. The essence of the problem arose when the House accepted Sunday trading—this is a spin-off.

There is a wider dimension, to which the noble Lord, Lord Peston, referred, that requires consideration. If the noble Lord divides the House, I will go with him, but I hope that he does not. I will go with him as a humanitarian gesture which is worthy of support. But I think that it is premature, if I may say so.

I ask the noble Lord, Lord Northbourne, to consider one matter to which I draw attention. Look at subsection (3)(c). Why on earth should the criminal law be introduced as a sanction for enforcement when the funds go to the wretched Treasury? What you want is a process of civil law compensation whereby, if the local authority breaches the code or regulations, the person involved says, "Look here, I have suffered damages worth x—say £50, £100 or £150—will you pay me?" If they say "Yes", that is the end of it. If they say "No", he goes to the registrar of the local county court and says, "I want more". The registrar would listen to it all and say, "No, they have given you quite enough; you must pay all costs; so there is a sanction" or "They have not given you enough; I will give you more" and then pay all the costs. The injured person gets compensation by a civil process.

What on earth is the use of giving the Secretary of State powers to introduce criminal sanctions? I ask that that may be taken into account. I have given notice to the noble Lord, Lord Northbourne, by his series of secretaries in Cambridge or somewhere, that I was going to take this point, so I hope that it does not come as a surprise. If he divides, I will support him as a humanitarian gesture, but, with respect, I think that he would be unwise to do so.

Baroness Hanham

My Lords, as I said on Report, in principle I support the noble Lord, Lord Northbourne. That was the attitude taken in the House of Commons. I do not think that any noble Lord, particularly those who have children. would not say that weekends are extremely precious, and that they are a very precious time to be with one's children. But to start by saying that all local authorities will have to agree to any request not to have to work on both Saturday and Sunday, without us having some idea of the implication, seems too far-stretched to be included in legislation.

It is well worth exploring the implications of the proposal. My noble friend Lord Hanningfield, the leader of Essex County Council, who has canvassed the idea, believes that the measure would cost potentially millions. He said billions—I have changed the "b" to "m"—but he may well be correct, and I may be wrong as a former leader of a local authority. Under the circumstances, it would be unwise for the measure to be embarked upon in that way.

Somebody needs to take a grip on the matter and see whether the measure is possible. It ought to be possible within the terms of flexible working, which is already part and parcel of employment law. Good employers, under special circumstances, ought to be able to grant such freedom. But I do not know whether they can grant it perpetually to people who have taken on a job that says they will work at weekends. We need to consider that.

I told the noble Lord, Lord Northbourne, that I would agree in principle—I did so during the previous debate. I hope that he will accept that as a sensible stance by someone who is basically very supportive of the measure but worried about the practicalities. Like my noble friend Lord Campbell, I hope that the noble Lord does not push the amendment to a vote today. But I hope that it does not get lost in a welter of ministerial bromides, and that it is taken seriously. If possible, in the not-too-distant future, someone—not only the Rowntree Trust, which is a valuable organisation—should investigate the implications of this proposal. We could then balance them with the cost to local authorities of children being on the streets. That work needs to be done.

Baroness Hamwee

My Lords, we on these Benches have difficulty with this amendment. My noble friend Lord Russell dealt with it at a previous stage and I will not follow him in referring to the Irishman's pig. At some point, I will ask him what that was all about. However, I follow him in his comments. Our preferred approach is not to look at the prescriptive allocation of particular days of the week. I would he far happier to see what is clearly an important issue addressed in the round.

This matter does not only concern weekdays and weekends. There are hours during the week when many parents operate in an almost child-free or childless zone. They hardly see their children during the week. The issue is much broader than just weekends.

Although local authorities should set a good example, I am unpersuaded that it would be appropriate to impose this arrangement on a sector that is actually a pretty good employer. Earlier in this debate, the noble Lord, Lord North bourne, mentioned local authorities being against the proposal. Certainly, as others—especially the noble Baroness, Lady Hanham—have said, there should he a huge investigation into the implications.

I cannot resist mentioning an article about the French school system that I saw in the Independent two or three days ago. Many French schools still require attendance on Saturday mornings, and many children prefer that, because the alternative is spending time with their parents going to the supermarket. I am sorry that we cannot support the noble Lord, Lord Northbourne.

Lord Hylton

My Lords, before the Minister replies, I would like to say that I am very happy to support at least the principle of the amendment moved by my noble friend Lord Northbourne. He has frequently spoken about the need for quality time for the whole family. He was too modest to mention his admirable speech on the Second Reading of the Anti-social Behaviour Bill, when he drew attention to the "Dad-deficit for boys". That is an important factor in keeping them—or not—on the straight and narrow path. Neither did he mention the importance for a significant minority of the Jewish Sabbath on Saturday.

Good employers are already doing what my noble friend wants in many cases. That is particularly true of small employers and farmers, with whom I am more acquainted than with most other types of employer. As has already been said, it is most desirable that local authorities should give what lead they can. I suspect that some of them up might actually find themselves saving overtime payments. The policy would also give trade unions a lever with which to improve the situation of all employees. With those words, I hope that the Minister will give us a favourable response.

Lord Campbell of Alloway

My Lords, before the noble Lord sits down, does not the essence of the problem lie with these wretched supermarkets?

Lord Hylton

Indeed, my Lords, shops and other sales outlets are the ones most likely to require their workers to work both Saturday and Sunday.

Lord Bassam of Brighton

My Lords, before I get into the meat of the issue, it is worth reminding your Lordships that we are discussing the Local Government Bill. I echo the words of congratulation that have already been given to the noble Lord, Lord Northbourne, for his tenacity in bringing forward this amendment. It has already been debated twice—in Grand Committee and on Report. The noble Lord, Lord Northbourne, is a tireless campaigner in this field and he should be congratulated on that. As a parent with three young children, I certainly approve of and endorse his campaigning. Listening to what he and other noble Lords have had to say on this subject, I have a great deal of personal sympathy for his position.

It has been a mature debate. As it has moved on, all the other important considerations have been introduced into it—considerations such as whether it is right that it should apply only to one sector of employment and whether it is right that it should be imposed on the sector of employment that is best conducted—local authorities. Local authorities are good employers and are flexible in their working practices. We all know from our rich years of experience—in Kensington and Chelsea, Essex or wherever—as local authority representatives that local authorities have been very good about introducing innovation in childcare and support for those who care for young children.

This has been an important debate, but issues such as cost, impact and the perversities of the proposition, which were well aired on Report, I think, or in Committee, when the noble Earl, Lord Russell, made a telling intervention, must be taken into account. I am one of those who would like, in principle, to be able to support the amendment but find that I cannot. We need to see how the current legislation works. As the noble Lord, Lord Northbourne, said, it has not been in place long. As a government, we are well on the road to introducing and ensuring that there are flexible working arrangements and ensuring that nobody is discriminated against unfairly and that family-friendly practices are put in place. It is right to see how those things work in practice and progress, as we always should, on the basis of evidence. It is for that reason that I look forward to 2006, when there will, no doubt, be a thorough review of the way in which the legislation has worked. It is at that stage that some of the considerations to which the noble Lord has drawn attention in moving his amendments will be best addressed.

I appreciate that that is some time off, but it is right that we have a monitoring strategy in place. We ought to work closely with the employers, whether they be in the local authority or the private sector, so that we can assess the impact of the legislation and how it has worked and see how best practice has operated and how flexible working practices have worked.

I do not think that I will tread on the toes of too many ministerial colleagues if I say that we would welcome the opportunity at that stage to see whether the matter is an important consideration. That, in itself, will enable the local authority sector to review the impact and consider whether it is an appropriate way forward and will provide the opportunity for employers generally to consider other issues, such as cost, to which the noble Baroness, Lady Hanham, referred. Cost is not an insignificant matter. My noble friend Lord Peston made the point forcefully that, although it is a highly desirable direction for public policy to follow, we must balance it with the cost of implementation and the perversities that occur occasionally through implementation.

I hope that the noble Lord does not feel that he needs to press the matter to a Division this evening. That would be unfortunate. However, as Ministers, we have the issue at the front of our mind. We undertake to consider it at a later stage, and we keep it under review at all times. I am grateful to the noble Lord for bringing us back to the matter with his trenchant persistence, on which he is to he congratulated, and for his tireless campaigning in the field. I hope that he will feel able to withdraw his amendment.

8.15 p.m.

Lord Northbourne

My Lords, may I say to the noble Lord, before he sits down—he cannot reply after I have spoken—that he did not deal with my point about whether the Government would extend the monitoring and review process in 2006 to cover school-age children?

Lord Bassam of Brighton

My Lords. that is a fair point. I did not respond to it. It goes without saying that it would make good sense to do that. It would be in the spirit of the legislation that we have introduced in the past few years.

Lord Northbourne

My Lords, I am grateful to the noble Lord. I shall follow the lead given by the noble Lord, Lord Campbell of Alloway, and make a humanitarian gesture, by telling your Lordships that I do not intend to test the opinion of the House. The reason, simply, is that I do not think that I should win.

The noble Lord, Lord Peston, referred to the immense cost. Everybody talks about the high cost, but I think it is just a question of good management, although the matter needs considerable research. The noble Lord, Lord Campbell of Alloway, introduced the interesting idea of having a civil remedy, rather than a criminal remedy. That needs exploring further.

I do not want to delay the House. I am extremely grateful for contributions made by noble Lords, which will assist in arriving at a better way of achieving this objective. I hope that the noble Lord's department might be prepared to enter into discussions with noble Lords and others who are interested to determine whether the matter can be moved forward over the next months and years. I promise I shall come back on this subject—unless the Lord takes me. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 120 [Repeal of prohibition on promotion of homosexuality]:

Lord Brightman

moved Amendment No. 19: Page 75, line 40, at end insert— (2) Subject to the general principle that the institution of marriage is to be supported, a local authority shall not encourage, or publish material intended to encourage, the adoption of any particular sexual lifestyle. (3) This section does not prohibit the provision for young persons of sex education or counselling services on sexual behaviour and associated health risks. The noble and learned Lord said: My Lords, although it may not be very obvious at first glance, this amendment is. in substance, a drafting amendment, but it is an essential one. The only purpose of the amendment is to clarify what would otherwise be an ambiguous situation. Section 28—to use the familiar description—prohibited a local authority from promoting homosexuality. What was meant by promoting is irrelevant for present purposes. I believe that it has a dictionary meaning of encouraging, but that does not matter.

Clause 120 states that Section 28 "ceases to have effect". The question arises: what exactly is the result? Let me take a simple analogy. Suppose that there is a notice on a garden lawn: "It is prohibited to walk on the grass". Suppose that notice is removed. What is the result? What are walkers being told? They are being told that it is no longer forbidden to walk over the grass.

So with Section 28, which states that a local authority is prohibited from promoting homosexuality. Section 28 is repealed. What is the message? A local authority is no longer prohibited from promoting homosexuality. That is clearly not the intention of the Government. The Government try to meet the ambiguity point by saying that local authorities can undertake only those activities for which they have specific powers. Therefore, no more need he said.

But that response is flawed. It overlooks the fact that, as a matter of law, rights and powers—I do not mind which word is used—can be created not only expressly but also by implication. If a course of action is prohibited by statute and then the prohibition is removed, what was previously prohibited is, by implication, sanctioned. If Clause 120 stands on its own, without any explanation, the result is that what was previously prohibited—the encouragement of homosexuality—is, by implication, now sanctioned.

If the situation is not clarified and there is a law case, I can see the case wending its extensive way to the House of Lords— all for the want of a few words of clarification, which Parliament can so easily provide. Perhaps I may take your Lordships to the wording of my amendment, for my suggestion of a way of resolving the ambiguity point. I have done it in a way which I hope will cause no offence to anyone. It does not alter one line of the Bill. It begins with the words: Subject to the general principle that the institution of marriage is to be supported. Those words are lifted verbatim from Section 1 of the Family Law Act 1996. They can be removed by the Commons if the Government do not like them. The amendment continues: A local authority shall not encourage, or publish material intended to encourage the adoption of any particular sexual lifestyle. The Government may say that the words "sexual lifestyle" lack definition. I do not mind. The Commons, with their highly experienced parliamentary draftsmen, can no doubt think of a better terminology. My wording, or their better wording, will preclude the implication that what was previously prohibited is now sanctioned.

My amendment concludes with the important words: This section does not prohibit the provision for young persons of sex education or counselling services on sexual behaviour and associated health risks. That is inserted merely to make sure that I am not interfering with sexual education.

I am not a politician. I have no experience of local government. I am only in your Lordships' House ex officio because I have spent my life in the law and ended up as a judge. I am convinced that it is my duty to advise your Lordships that an uncertainty exists. If the Bill is returned to the Commons with my amendment, they can resolve the ambiguity in whatever way they please. I must advise your Lordships that the ambiguity should be removed.

I may be asked why I am moving an important amendment so late in the day. The answer is that that is what the Companion tells me to do. Third Reading is the proper time to clarify any remaining uncertainties in the Bill. I do not know whether there will be a Division on my amendment, but if there is, a vote for the amendment is a vote for clarity. A vote against—and I intend no offence—would be a vote in favour of ambiguity.

I conclude by reminding the House of the words of the noble Lord, Lord Lester of Herne Hill, in debate on the drafting of statutes. He said: It is essential for reasons of legal certainty and the rule of law, that legislation should be drafted as clearly as possible and in a manner which reflects the objects and purposes of Parliament in using its sovereign power to make the law of the land".ֵ[Official Report, 21/1/98; col. 1591] I ask your Lordships to support the amendment, which I only put forward in what I believe is the best interests of the promoters of this legislation. I beg to move.

8.30 p.m.

Lord Campbell of Alloway

My Lords, I have difficulties with this amendment. I speak with utmost deference and respect, having appeared befDre the noble and learned Lord when he was a High Court judge, in the Court of Appeal and in the Appellate Committee. He is one of the best equipped legal draftsmen whom I have known in my experience at the Bar, but I have problems with his amendment.

My problem is that, if the amendment had said, in ordinary language, that the local authority should say that the right way of living is with a family in marriage, I would have been content. That would have been in accordance not only with the Christian faith, of which most of us are members, but with the Islamic faith and the Jewish faith. The amendment, as I read it—though I may be totally inept—does not ordain that the encouragement for the children should be to understand the importance of marriage, whether they be Christians, Islamic, Jews or whatever. That is my problem. Therefore, I have a difficulty with the amendment, but perhaps my difficulty is ill conceived.

Earl Russell

My Lords, I congratulate the noble and learned Lord, Lord Brightman, on having shown the patience of Job in waiting for the right moment for the amendment to come out. He has been waiting for the resolution of the debate on Section 28 and has had the amendment on the Order Paper without moving it all through the progress of the Bill. He has sat through many hours when his amendment has not come out and, so far as I know, has not breathed one word of complaint. That is an example to us all.

However, I am not convinced that the noble and learned Lord is setting out to meet a genuine danger. If one considers the Learning and Skills Act 2000 and the guidance drafted by the right reverend Prelate the Bishop of Blackburn in conjunction with a great many other people, one can see that a great deal has already been done to plug the gap that the noble and learned Lord believes is there. However, I shall leave the detail of that to the Minister.

The second part of the amendment says that, a local authority shall not encourage, or publish material intended to encourage, the adoption of any particular sexual lifestyle". I would not have chosen the word "lifestyle", but the sentiment is exactly right. It is not the business of schools to do that. How we should live is a matter that is to be resolved by individuals and by collective conscience in groups. It is not the business of schools to teach that one way of living is right and another is not. If that had been the whole of the amendment, even though I believe it to be unnecessary, I would have been perfectly content to see it on the statute book.

However, my problem is with the first words of the amendment, that, the institution of marriage is to be supported". Your Lordships know my own personal views on marriage. One thing that I have against it is that "till death do us part" is not long enough. But I do not feel entitled to take legislation to enforce my particular preference and conscience on other people. A great many people, among whom I would include my two sisters-in-law, for whom I have great affection, have a genuine conscientious objection to the state of marriage. However, they live together in a union—or, in one case I regret to say used to live together in a union when she was alive—as true, as loving and as faithful as any that I can think of. Qualitatively I can see no difference between those types of union.

It is very dangerous to start using the law as a kind of hortatory device to support marriage. In fact it sounds very often as though in medieval theology marriage had been not a sacrament but a penance. The more people think of it as a sacrament the more I would have thought that they would have had reservations about using the law and financial incentives to support it. To use financial incentives to spread a sacramental grace is simonious and that, metaphorically, expresses some of the objections that I feel about the idea of using the law to encourage marriage. It is a matter for the individual conscience and it ought to be undertaken with a whole heart, complete will and genuine intention or not at all.

The amendment could possibly have the inadvertent effect of discouraging things which need to be done in cases where marriages have not worked; for example, the provision of women's refuges for people who have had to leave marriages which very patently are not working. I am certain that never for a moment was that the noble and learned Lord's intention, but without an exhaustive trawl through statutes, for which I have not the resources, I cannot be sure that that would not be its effect. If it is, I hope that it will not happen.

I said at earlier stages of the Bill that people feel committed to each other in unions by different things, not necessarily by the ceremony of marriage, even if they have gone through it. One or two noble Lords may possibly remember that I mentioned a couple with whom we had dinner 15 years ago and who were both coming out of a failed first marriage and hesitating before commitment to a second. They discussed with each other at some length what would make them feel that they had made a commitment to each other. They decided that it would be when they took one subscription instead of two to their favourite learned journal.

It so happens that by sheer chance I met that couple again at a party last Sunday evening. I asked them what they had done about it. They said that they had taken out a single subscription to that journal and that the editor had been furious. Here, what stands in the way of family values is not liberalism but commerce. That is a point which we could all afford to take. They had got married but they said that it was not the marriage which gave them their sense of commitment and the sense that they were a union; it was that they had only the one copy of the journal so if they ever parted one of them would be without the back numbers and without one of the basic resources of living.

I do not know how many other ways there are in which people may feel that they are committed to each other, but they are truly legion. If one looks at people who have gone through the ceremony of marriage one may see two complete strangers. By contrast, as recently as last weekend I was having dinner with a couple who were obviously, in any inward and spiritual sense, as completely a married couple as I have ever seen. They had a private language; they understood each other instantly; they would react to something I said as one person. Both of them are still in the process of freeing themselves from marriages to other people, but in any inward and spiritual sense, those people are as married as any couple who have been through a ceremony I have ever met.

So I believe that simply enforcing, encouraging or even using the power of the state to give primacy to a ceremony is a mistake. It is taking the letter and not the spirit. There are many instances that the letter killeth and the spirit gives it life which, not being a Christian, I quote in a metaphorical sense. But in a metaphorical sense I believe that it is a truth and that is why we on these Benches have difficulty with this amendment. For a party with liberalism in its philosophy, it is a matter for the individual conscience.

Lord Peston

My Lords, I rise to ask a question. The noble and learned Lord, Lord Brightman, said that his purpose was to produce clarity where there would otherwise he confusion. In my case he has produced confusion where, until he spoke, I thought the matter was clear. As I understood it, some years ago a reactionary House of Lords passed an amendment, Clause 28, which was viciously anti-homosexual and prohibited what it called the promotion of homosexuality. The law was changed.

As I understood it, a few weeks ago the House removed that provision and returned the law to where it was. That is the whole story as far as I am concerned. There is no confusion whatever. Will the noble and learned Lord, Lord Brightman, tell us whether, if he passes his amendment, we will return to banning the promotion of homosexuality? I read his amendment as reintroducing Clause 28 in a different form of words.

Baroness Warnock

My Lords, I hope that the point about lack of clarity in the Bill will not be overlooked. Probably not lawyers, but ordinary people tend to think that if one removes a prohibition one gives a permission. Since Clause 28 was so notoriously antihomosexual—I entirely agree with that point, it was a disgraceful clause—removing it, of which I am greatly in favour, suggests an ambiguity about the entitlement of teachers.

I was persuaded by my noble and learned friend in his exposition of that ambiguity, but I find a certain contradiction in proposed subsection (2) between, Subject to the general principle", and, shall not encourage, or publish material intended to encourage, the adoption of any particular lifestyle". Marriage is a particular sexual lifestyle. If it is to be supported then that is to encourage a particular sexual lifestyle.

I would he happy with the amendment removing any possible ambiguity if it started after the comma, so that it read, a local authority shall not encourage, or publish material", and so on. That would rule out any preference that a teacher might have, whether for marriage, homosexuality or any other sex style we would like to imagine. I am a believer in marriage, but I do not make any distinction among my five children between the two who live with partners unmarried and the three who are married. They are all my children and sons-in-law and daughters-in-law, although I never know quite how to refer to them.

The first proposed subsection is the trouble. Nevertheless, there is an ambiguity in the Bill as it stands.

Baroness Blatch

My Lords, the noble and learned Lord, Lord Brightman, is right in one of his assumptions: if in law there has been a prohibition measure—like him I scanned the dictionary, and it subsumes encouragement of homosexuality—and it is removed and there is no substitute, that means that it is a legal activity. The promotion of homosexuality becomes permissible and legal. To that extent the noble and learned Lord is right.

I believe that I was wilfully misunderstood when I tried to put something in place of accepting. the abolition of Clause 28 to give the power to parents to make judgments about the materials used and the content of sex education outside the national curriculum and the degree to which they believed it was appropriate for their children. That was denied me. As I say, I believe that it was wilful misinterpretation. I have read and reread the debate, which was all about my subverting Clause 28 and reinserting it by the backdoor and all the rest of it. I thought that it was straightforward support for parents and a straightforward provision to protect children from the worst form of sex education and the worst form of materials used for sex education.

I have one difficulty which has already been mentioned by the noble Baroness, Lady Warnock. I very strongly support the first line of subsection (2), which states: Subject to the general principle that the institution of marriage is to be supported". However, there is a difficulty with the second part of the subsection, which equates marriage with all other lifestyles. Consequently, the two parts of the provision almost contradict one another.

I unashamedly want to distinguish marriage from other forms of sexual lifestyle. Not only do I think that marriage should be supported; the Government and the Prime Minister believe it should be supported. The Foreign Secretary is on record as making very strong statements of support for marriage and as advocating marriage as the best arrangement, not only for bringing up children but for ensuring the cohesion of society. I support it very strongly and I should like to see the distinction. If no such provision goes to the other place, the other place will have no opportunity to consider the basic dilemma. A prohibition has been removed but nothing has been put in its place.

So I want to put on record my view that there is a difficulty and ambiguity in subsection (2) of the amendment. However, if the noble and learned Lord, Lord Brightman, wishes to seek the opinion of the House, I should like to think that there will be support for it. He will have my support because I think that the provision will keep the debate alive in another place and that it will allow further thought to be given to what should be put in place of the abolished Clause 28. That is why I shall support the noble and learned Lord.

8.45 p.m.

Lord Northbourne

My Lords, I have put my name to the amendment. I do not wish to delay the House. I am sorry that this debate has, in my view, degenerated into another ongoing discussion about homosexuality, because I do not think that that is what this amendment is about. For me—one may think rather naively—the problem is much simpler. I believe that this amendment is about a tolerant and inclusive society. We know from the enormous lobby that many of us received that there are many in this country who are very deeply worried about the abolition of Section 28. I do not happen to be one of them. However, those people, whether they were right or wrong, were terrified that their children and grandchildren were going to be put in a situation where there was some sort of promotion of homosexuality or other kind of sexual lifestyle indoctrination.

We know that that is not the case. However, I believe that every government have the responsibility to act not only for those who vote for them but also, once they are elected, for all citizens. I think that the Government should show more concern for that enormous chunk of the population who are deeply worried about this situation. That was one of the reasons why I wanted to support the amendment tabled by the noble and learned Lord, Lord Brightman. I also support the point that he made about the uncertainty which was created by negativing a positive statement without in any way making clear what we mean.

Lord Elton

My Lords, I rise briefly in support of the noble and learned Lord, Lord Brightman, and in search of illumination. I would be grateful if he would tell me if I am not right in thinking that the first line makes the rest of subsection (2), Subject to the general principle". In other words, my noble friend Lord Campbell of Alloway can be reassured that the principle is already established, as the noble and learned Lord told us, in the Learning and Skills Act. So the noble Earl, Lord Russell, can be reassured that this is no new introduction in law of proselytization for marriage; it is a repetition.

Earl Russell

My Lords, I am well aware of that. I think I made the point in 1996.

Lord Elton

My Lords, I regret that I was not perhaps awake at the moment that the point was made, or perhaps my memory is not as good as the noble Earl's. As it is not a new point, there is no point in objecting to it as though it were. The noble and learned Lord, Lord Brightman, has achieved what he set out to do—to remove an ambiguity. If that were not removed there would be an inequality of treatment between different potential lifestyles. I am glad that there is a prohibition, subject to the provision in the first line of paragraph (2), for the promotion of particular lifestyles, because nobody has talked about the lifestyle of young people who count sexual conquests as Red Indians used to count scalps.

This is a heterosexual as well as a homosexual matter. There are all sorts of lifestyles which are bad, not merely medically—as covered by paragraph (3) —but spiritually, and I would not wish to see them promoted. Therefore, to prevent all such promotion, subject to the general principle that the institution of marriage is to be supported, is an admirable clarification of the intention of the law.

Lord Rooker

My Lords, this has been a useful debate and many noble Lords have contributed. I hope that my notes will cover all of the issues raised. This amendment comes a little late in the day. That is not a criticism, but just in the sense that we are at Third Reading. The arguments on this amendment seem to have changed since Committee stage.

Amendment No. 19 concerns the repeal of Section 28 as we know it. It seeks to place a broad duty on local authorities to prevent them from, with the exception of supporting the principle of marriage, promoting any particular sexuality across any of their functions. The noble and learned Lord, Lord Brightman, said quite clearly in Committee that his only purpose in tabling the amendment was to avoid a difference of opinion between this House and the other place, which would delay the Bill and mean further argument about Section 28. I am very glad to say that that is not the situation in which we find ourselves.

I remind noble Lords that we saw at Report that the view of this House is quite clear on the repeal of Section 28. The amendment to repeal was defeated by 180 votes to 130. In view of such a majority, it seems odd that we are again debating the noble and learned Lord's amendment given that it was originally put forward as a compromise. However, I shall turn now to the substance.

Over the summer we have considered the amendment carefully, but as we explained in Committee, we do not believe that it offers advantages beyond the straightforward repeal of Section 28, which is currently enshrined in the Bill in Clause 120. Indeed we believe that the amendment has some disadvantages.

As we made clear in Committee, the new clause is unnecessary as far as sex education is concerned. The main responsibilities fall to schools and we have in place an adequate framework of protections. Indeed, the approach in the new clause with regard to sex education closely reflects that of the existing sex relationship education guidance which says, in paragraph 1.21, that: pupils should be taught about the nature and importance of marriage for family life and bringing up children, but that there are strong and mutually supportive relationships outside marriage". Paragraph 1.30 states that, teachers should be able to deal honestly and sensitively with sexual orientation, answer appropriate questions and offer support and that there should be no direct promotion of sexual orientation". There are, however, wider considerations. The noble Earl, Lord Russell, pointed out one of the problems with the proposal in his contribution in Committee when he questioned what he described as the "monopolistic provision" for marriage in the proposed new clause. I appreciate that the promoters consider that the new clause simply repeats provisions in the Family Law Act passed under the previous administration, to which reference has been made. I also recall that in Committee the noble and learned Lord, Lord Brightman, said that his intention was to avoid causing offence to anyone. I believe him entirely. However, it is clear to us that this new clause would in fact be offensive to many people—not just homosexual couples but unmarried heterosexual couples as well.

It is also worth pointing out—this reinforces the points that have been made—that the Family Law Act had as its primary purpose dealing with the fallout from breakdown and disputes in marriage and domestic relationships. The general principle regarding the institution of marriage is arguably relevant in dealing with divorce and separation and legal aid for mediation—the matters with which the 1996 Act deals. It does not follow that it is a "freestanding" provision that should underpin all of a local authority's functions, which is what the intent of the amendment appears to be.

Baroness Blatch

My Lords, I am grateful to the Minister for giving way. My understanding is that the Family Law Act has never been implemented. Is that right?

Lord Rooker

My Lords, I cannot answer that question: I shall take advice on it.

Earl Russell

My Lords, I believe the position is that Part 3 of the Act has not been implemented.

Lord Rooker

My Lords, I was just about to say that several Acts have parts that are never implemented. I shall certainly check whether that is the case with the Act we are discussing. However, that does not alter the point that I am making and does not obviate the paragraph that I have just read out which I shall repeat. As I said, it is worth noting that the Family Law Act had as its primary purpose dealing with the fallout from breakdown and disputes in marriage and domestic relationships. The general principle regarding the institution of marriage is arguably relevant in dealing with divorce and separation and legal aid for mediation—the matters with which the 1996 Act deals. But it does not follow that it is a "freestanding" provision that should underpin all of a local authority's functions, which is what the intent of the amendment appears to be.

I also appreciate the efforts that the promoters have taken in order to ensure that the measure would not obstruct local authorities in their responsibilities for sex education and sexual health. However, the very fact that they have done so in the second limb of the amendment indicates the main problem associated with their approach. It is a recipe for confusion and uncertainty for local government about what would fall inside or outside the prohibition. That is very important. There is a seductive argument that would lead us along the path of saying that if we accept that authorities should not be promoting a particular lifestyle choice—and we do—we should not object to the law saying so. As I say, it is a seductive argument but I believe that it is one we should resist.

We have given local authorities the powers to be community leaders—a role that we have asked them to develop for the benefit of all the people living in and using their areas and services. Local authorities know that they should act responsibly. They should, indeed, not be promoting any specific lifestyle choice. But equally they should be able to provide services that meet the needs of all members of their communities, including those who may already feel quite marginalised. We should be wary of inadvertently making that task more difficult. We believe that despite its good intentions the amendment has the capacity to cause unnecessary confusion about exactly those kind of issues. For those reasons I hope that the noble and learned Lord will feel able to withdraw the amendment.

9 p.m.

Lord Brightman

My Lords, one lesson that I have learnt this evening is the danger of leaving a drafting amendment to Third Reading. Then, there is no possibility of meeting by means of a few words objections to the actual terminology involved. Leaving a drafting amendment to Third Reading means that you have burnt all your boats except the one that you are in, which is sinking. So, in future, I shall always introduce my drafting amendments on Report, whatever your Lordships may say about it.

I did think of doing that during the debate on Report, but the clock said 11 o'clock and there had just been a Division which had taken up a great deal of time. I felt that it would be unfair to burden your Lordships with a debate on drafting at that stage. I intimated, as your Lordships can read in Hansard, that I intended to introduce this proposal al. Third Reading. I have learnt my lesson.

I said again and again in introducing the amendment that I was not wedded to any particular wording. I made it absolutely clear, as the noble Baroness, Lady Blatch, pointed out, that my only purpose was to get the amendment to another place so that Members there could put their skilled draftsmen on to it and achieve a terminology that would suit both Houses.

If the amendment were rejected, as I said earlier, that would be a vote in favour of ambiguity. If I divide the House, a vote in favour of the amendment will at least be a vote in favour of certainty, because the whole of this can be put right in the Commons.

I know that there have been innumerable Divisions already and it is nine o'clock, but I think that I would be letting down many of my friends if I did not seek the opinion of your Lordships. I wish to press my amendment.

9.2 p.m.

On Question, Whether the said amendment (No. 19) shall be agreed to?

Their Lordships divided: Contents, 25; Not-Contents, 100.

Division No. 7
CONTENTS
Blatch, B.	Kimball, L.
Brightman, L. [Teller]	Kingsland, L.
Brooke of Sutton Mandeville, L.	McCarthy, L.
Brougham and Vaux, L.	Marlesford, L.
Byford, B.	Masham of Ilton, B.
Cooke of Thorndon, L.	Northbourne, L.[Teller]
Dixon, L.	O'Cathain, B.
Dixon-Smith, L.	Palmer, L.
Elton, L.	Seccombe, B.
Fookes, B.	Waddington, L.
Glentoran, L.	Warnock, B.
Hylton, L.	Wedderburn of Charlton, L.

NOT-CONTENTS
Acton, L.	Gould of Potternewton, B.[Teller]
Addington, L.
Alderdice, L.	Graham of Edmonton, L.
Alli, L.	Greengross, B.
Archer of Sandwell, L.	Grocott, L.
Ashton of Upholland, B.	Hamwee, B.
Barker, B.	Harris of Haringey, L.
Bassam of Brighton, L.	Haskel, L.
Berkeley, L.	Hayman, B.
Bernstein of Craigweil, L.	Hilton of Eggardon, B.
Blackstone, B.	Hogg of Cumbernauld, L.
Borrie, L.	Hollis of Heigham, B.
Brooke of Alverthorpe, L.	Holme of Cheltenham, L.
Burlison, L.	Howells of St. Davids, B.
Campbell-Savours, L.	Hoyle, L.
Carter, L.	Hughes of Woodside, L.
Chandos, V.	Hunt of Kings Heath, L.
Cohen of Pimlico, B.	Jones, L.
Corbett of Castle Vale, L.	Layard, L.
Craigavon, V.	Lea of Crondall, L.
Crawley, B.	Livsey of Talgarth, L.
	Lofthouse of Pontefract, L.
David, B.	Macdonald of Tradeston, L.
Davies of Coity, L.	Mclntosh of Haringey, L.
Davies of Oldham, L.	Mclntosh of Hudnall, B.
Dean of Thornton-le-Fylde, B.	MacKenzie of Culkein, L.
Desai, L.	Mackenzie of Framwellgate, L.
Dubs, L.	McNally, L.
Elder, L.	Maddock, B.
Evans of Parkside, L.	Mallalieu, B.
Evans of Temple Guiting, L.	Mar and Kellie, E.
Farrington of Ribbleton, B.	Massey of Darwen, B.
Filkin, L.	Miller of Chilthorne Domer, B.
Gale, B.	Mitchell, L.
Gibson of Market Rasen, B.	Morgan, L.
Golding, B.	Norton of Louth, L.
Goldsmith, L.	Parekh, L.
Goodhart, L.	Pendry, L.
Goudie, B.	Peston, L.

Pitkeathley, B.	Smith of Leigh, L.
Radice, L.	Symons of Vernham Dean, B.
Ramsay of Cartvale, B.	Temple-Morris, L.
Rea, L.	Thomas of Walliswood, B.
Rendell of Babergh, B.	Tomlinson, L.
Richard, L.	Tordoff, L.
	Turner of Camden, B.
Richardson of Calow, B.	Walmsley, B.
Rooker, L.	Whitaker, B.
Roper, L.	Whitty, L.
Russell, E. [Teller]	Williams of Crosby, B.
St.John of Bletso, L.	Williams of Mostyn, L. (Lord President of the Council)
Shutt of Greetland, L.

Resolved in the negative, and amendment disagreed to accordingly.

9.12 p.m.

Clause 126 [Commencement]:

Lord Rooker

moved Amendments Nos. 20 to 24: Page 77, line 33, after "71," insert "72, Page 77. line 33, after "103," insert "109, Page 78, line 17, leave out "sections 22(2) and" and insert "section Page 78, line 30, leave out "109 to" and insert "110, Page 78, line 38, after "67" insert ", 67A

On Question, amendments agreed to.

Lord Rooker

moved Amendment No. 25: Page 79, line 6, after "58," insert "65A(2), The noble Lord said: My Lords, with this amendment we will briefly debate Amendment No. 27, which inserts the words on the Order Paper into Schedule 6, page 114, line 10.

During the conclusion of the Report stage in the summer I indicated that the statement being made that day by the Secretary of State for Education and Skills on education funding would include a proposal relevant to this Bill, involving a minor amendment to education legislation. I wrote subsequently to the noble Baronesses, Lady Hanham, Lady Hamwee and Lady Maddock, and to the noble Lord, Lord Hanningfield, explaining the Government's intention in more detail, and my letter was placed in the Library of the House. The amendment as now presented for consideration by your Lordships' House has since been extended, as I shall explain. Representatives of local education authorities and head teachers have also been consulted about the amendment over the summer.

The amendment is concerned with Sections 45A and 45B of the School Standards and Framework Act 1998, as amended by the Education Act 2002. Under those provisions, the Secretary of State for Education and Skills and the National Assembly for Wales have a reserve power to set a minimum schools budget for a local authority where the authority's proposed schools budget is considered inadequate in all the circumstances.

First, as advised in my letter, the amendments bring forward by one month to 31st December the schools budget deadline by which local education authorities in England are required to notify the Secretary of State for Education and Skills and their schools of their proposed schools budget for the following financial year. We intend to announce the provisional local government finance settlement in the middle of November. That will make it possible for local authorities to decide by the end of December what schools budget they will propose. The effect will be to give schools much greater certainty about their funding earlier in the year, so that they can plan more effectively for the following year.

Secondly, these amendments change the deadline by which the Secretary of State for Education and Skills or the National Assembly for Wales must give notice of their intention to use the reserve power, to 14 days from the schools budget deadline instead of 14 days from the date of each individual authority's notification of its proposed schools budget. That will ensure a common timetable for the consideration of all authorities' proposed schools budgets.

In short, it is a technical adjustment to the calendar for making the very important decisions on the large expenditure— by both central and local government—of the schools budget for this country. I beg to move.

Lord Hanningfield

My Lords, I thank the Minister for his comments. Unfortunately, I missed the first part of his speech. We have reservations about the timetable. All governments—there is no difference between Conservative and Labour governments—often give promises about the timetabling of announcements of the grant to local authorities. There have been many years when, for example, Parliament has closed for a week before the Queen's Speech in the middle of November—that is very likely to happen—so announcements for local government finance are made 10 days later than originally planned. I gather from officers of the Local Government Association that already there are discussions about the statistics used in making the grant announcements.

Given such factors, it could be early December before the announcement is made—for reasons that the Government might say they cannot control. It will then he impossible to deliver school budgets by the end of December. We all want to support schools as much as possible. But a 1 per cent increase in expenditure in local authorities means a 4 per cent rise in council tax. Most authorities are determined to do all they can to avoid increasing council tax. That might mean not being able to pass money to schools, because it depends on how the grant settlement works out. In Essex last year, council tax had to be increased by 5 per cent virtually to reach the target for schools alone. We are not prepared to do that again, so the schools budget will depend very much on the settlement.

There is also a technical problem as regards local authorities: their budget meetings do not take place until early February. Although they might indicate what they will give schools, they must decide the rest of the budget, and it will not become council policy until early February. Although there will be government indications of what they expect to give schools, it will not be a cast iron guarantee unless the Government expect all councils to change the dates of their total budget processes before Christmas.

We would like those issues clarified. What happens if the Government cannot give the grant settlement at the time that has been mentioned? What happens if the grant settlement means huge increases in council tax, which councils will not agree easily? What happens to legal procedures in councils when the final budget decisions are not taken by a full council until early February? I see that the Minister has been joined by a Minister from the education department and I would be grateful for some clarity about how the system will operate, especially if the Government cannot keep to the deadlines that they have announced.

Baroness Hamwee

My Lords, the Minister is lucky that the noble Lord, Lord Peston, is not behind him waving the Companion.

The noble Lord, Lord Hanningfield, raised important points about the practicality of the policy, which I shall not repeat. We have always opposed this reserve power for the Secretary of State to intervene in the education budget. However, in the light of what the noble Lord, Lord Hanningfield, said, I acknowledge the additional time that local authorities will have to prepare their budgets. Perhaps the key issue is the one that has not been addressed—whether the Government will follow through on their assurance to give local authorities more guaranteed, longer-term funding and fewer year-to-year changes.

Lord Rooker

My Lords, I will read this. It says, For use if pressed only. Question: How can this amendment work if there is a delay to the provisional local government financial settlement? Local authorities will not have time to decide their proposed schools budgets", which is exactly the point made by the noble Lord, Lord Hanningfield.

I will now read the three paragraphs that follow: The Government is firmly committed to bringing the date of the provisional local government finance settlement earlier. We will be doing everything possible to ensure that the provisional settlement for 2004–5 is made as early as possible this year. We plan to announce the provisional settlement by the middle of November. In addition, well in advance of the provisional settlement, we will also be providing local authorities with key information on the minimum increase in funding per pupil to be provided and the floor increase in resources for local authorities which will underpin that guarantee. By bringing these announcements forward, we will be providing authorities with adequate time to set their proposed schools budgets by 31st December". I cannot make it any clearer than that. That is as firm a commitment as I can possibly give and I think that it answers the question asked by the noble Lord, Lord Hanningfield.

Lord Hanningfield

My Lords, as I said, what happens if the opening of Parliament happens at that crucial time? The figures are crucial. They must be available in mid-November; otherwise it will not he possible to set budgets.

Lord Rooker

My Lords, as I have discovered in the past six years, Parliaments may recess, but governments never do. However, the noble Lord, Lord Hanningfield, raised a fundamental issue—I am now thinking on my feet. He made a point about the proximity of the announcements and the Queen's Speech, the date of which I do not have a clue about. It is right that these announcements are made to Parliament; otherwise, there is a row, because large amounts of public expenditure are involved. I would hope that in a commonsense world, with the type of change that we are proposing—bringing information to school heads and local authorities earlier—we could make whatever announcements were necessary to the relevant people at the right time to enable them to do their job of budget planning.

I am not saying that we would usurp Parliament, because that would be ridiculous, but I quite understand the problem of proximity. I would hope that it would not stand in the way of wrecking what would be a new system. Obviously, getting the information by the middle of November is crucial for local authorities making their budgets by the 31st December deadline. I fully accept that December is not a full working month because of Christmas and the New Year. However, these are practical problems for which the Government are duty bound to find solutions, rather than saying, "We couldn't do it".

If the information is available, we have to make sure that it is published. We must do that for the sake of the 24,000 or so schools in this country, so that their heads have more certainty and clarity and so that the budget planners in the local authority can organise their budgets. I fully accept that.

I have taken the problems on board. I will make sure that I put to my colleagues in the ODPM responsible for this side of local government—as opposed to the education department—how fundamental it is that we keep to the points that I made in the three paragraphs earlier, which were headed, For use if pressed only".

On Question, amendment agreed to.

Lord Rooker

moved Amendment No. 26: Before Schedule 6, insert the following new schedule—