Sitting of 3 July 1980

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    GREATER LONDON COUNCIL (MONEY) (No. 2) BILL
    Read the Third time and passed.

    ALEXANDRA PARK AND PALACE BILL [Lords] (By Order)
    Order for Second Reading read.
    To be read a Second time upon Thursday 10 July.

ORAL ANSWERS TO QUESTIONS
  HOME DEPARTMENT

    Drunken Offenders (Overnight Facilities)
    Mr Neubertasked the Secretary of State for the Home Department which areas he has selected for the provision of overnight facilities for habitual drunken offenders.
    Mr. Ron Lewisasked the Secretary of State for the Home Department in which areas he proposes to establish overnight facilities for habitual drunken offendenrs; and if he will make statement.
    Mr. Charles Irvingasked the Secretary of State for the Home Department in which areas he proposes to establish overnight facilities for habitual drunken offenders.
    The Minister of State, Home Office (Mr. Leon Brittan): We are not yet in a position to announce precise proposals but we expect one of the intended three experimental shelters to be established in London and another in the Midlands. We are well advanced in discussions to
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    that end, and hope that the first shelter will be available in the autumn. The location of the third shelter is still under consideration. Further financial provision and extension of the scheme will be considered in the light of the success of the experimental projects.
    Mr. Neubert: Given the present pressure on prisons and courts, could not a great deal more be done than is represented by these modest proposals? Could not some of the £4 million in licensing compensation funds, which is lying dormant awaiting a decision from the Home Office, be used?
    Mr. Brittan: The present proposals are only a beginning. They cannot be judged solely on the financial sums involved, because they are meant to assist existing centres to be used for a different purpose. The future of compensation funds is still under discussion. The idea that they should be used for such a purpose is a constructive proposal that we are considering seriously.
    Mr. Kilroy-Silk: Why has such a derisory sum been allocated for such an important area? Does not the hon. and learned Gentleman accept—as the hon. Member for Romford (Mr. Neubert) has pointed out—that £4 million is lying idle in the county compensation fund? How can £30,000 provide adequate staff cover for three centres and a counselling service? Does not the hon. and learned Gentleman accept that they will help to alleviate the present situation, in which a third of the deaths which occur in police custody involve alcoholics or drug addicts?
    Mr. Brittan: I regard the idea that compensation funds should be used for this purpose as constructive and positive. We are considering that idea most seriously. The hon. Gentleman may regard the amount of money provided as inadequate, but it is being provided for a pilot project involving three experimental centres. One must take into account that one is adapting existing centres for further use. We are advised that such sums are sufficient for that purpose.
    Mr. Garel-Jones: Will my hon. and learned Friend confirm that the police welcome the development of such centres, particularly as they will obviate the need

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    to process such people through courts and police cells and so on? Will he ensure that when such new centres are put forward, proper advice is made available to those who come into the centres, possibly seeking rehabilitation?
    Mr. Brittan: The object of the centres is to divert people from the courts. I confirm that they are being set up in consultation with the police.
    Dr. Summerskill: Although this is a step in the right direction if we are ultimately to relieve overcrowding in prisons, is the Home Office working in co-ordination with the Department of Health and Social Security as regards the setting up and financing of the centres? Does not the hon. and learned Gentleman accept that the success of the experiment depends partly on the Home Office and partly on the DHSS?
    Mr. Brittan: The initial sums for financing the project will be derived not from the Department of Health and Social Security, but from the Home Office. We are very conscious of the need to ensure that the centres operate properly as regards medical advice and facilities.
    Mr. Lawrence: Is my hon. and learned Friend aware that the discussions that his Department has been having about the compensation fund have been continuing for a long time and some people think that they have got bogged down? Certainly it is very difficult to get answers from his Department. Is he also aware that the Brewers Society has suggested that £2 million of that fund should be dedicated to educational and social inquiries into the whole question of alcoholism? Even if that money cannot be used directly, it could certainly liberate some of the resources that the Home Office has for dealing with this problem.
    Mr. Brittan: I am happy to reassure my hon. Friend that the discusions are not bogged down. In fact they are coming on rather well. But the matter requires legislation.
    Mr. Tilley: Can the Minister explain the paradox of why his Department suggests that such centres should be opened in London when the DHSS has refused funds for detoxification centres in my
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    area of London? Such centres are not only welcomed by the police but also provide a permanent solution to the problems of alcoholics, rather than the temporary expedient of these wet shelters. Will the Minister co-ordinate the Home Office efforts with those of other Departments in order to ensure that there is an overall Government policy on alcoholism?
    Mr. Brittan: There is no paradox and no discrepancy, for the simple reason that the centres that I have described are not detoxification centres. The two detoxification centres that exist in Leeds and Manchester are being reported on next year and the role that such centres can play should be determined in the light of the reports. The cost of extending centres of that kind would be very much greater than the cost of what we are doing, and that is why we think it is sensible to proceed on the present basis until the reports are available.

    Police Complaints Procedure
    Mr. Meacherasked the Secretary of State for the Home Department what representations he has received regarding his current review of the police complaints procedure.
    The Secretary of State for the Home Deparment (Mr. William Whitelaw): I have received a few representations from Members of Parliament and others about my consideration of the triennial review report of the Police Complaints Board.
    Mr. Meacher: Is the right hon. Gentleman aware that there is intense dissatisfaction that complaints against the police are handled by the police themselves and not independently; that the police report, when completed, is not shown to the complainant so that he cannot assess its completeness or reply to any counter-allegation; and that the Director of Public Prosecutions, in deciding whether to prosecute cannot interview the parties concerned directly? For these reasons there is a complete breakdown of public confidence in the whole of the complaints procedure.
    Mr. Whitelaw: The hon. Member has been guilty of some exaggeration in the past and I think he indulged in some exaggeration in his last remark. I remind the hon. Member that the Police Complaints Board was set up by Act of

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    Parliament under the last Government. We are having the triennial review and I shall certainly consider all the matters that he has referred to. However, he should remember that Parliament set the board up as an independent element in the complaints system. His Government, whom he supported, did this, and it is only fair now to consider how it has worked.
    Mr. Aitken: Will my right hon. Friend accept that most people seem to think that on the whole the board has done a good job in independently assessing complaints against the police? At the same time, when the review takes place will he consider narrowing the remit of the Police Complaints Board to those really serious complaints that have been complainant-activated—in other words, when the complainant himself asks that the board should consider it? This would get rid of the enormous waste of time involved in considering every single complaint whether it has been referred or not.
    Mr. Whitelaw: I have undertaken to publish the report, and I shall do so before the Summer Recess. I shall make a statement on the reactions to that report at that time and then the House can consider how it wishes—if it wishes—to change the existing set-up.
    Mr. Heffer: Will not the right hon. Gentleman agree that there is a great deal of disquiet about this matter and that there is a need for an independent body? Will he also agree that if the body were independent it would benefit the police as much as the general public? Then the police would know that such an independent inquiry had been carried out in their interests as well as the people's interests. For the sake of everyone concerned may I urge the right hon. Gentleman to reconsider his reply?
    Mr. Whitelaw: That is a rather strange remark. I have said that I will reconsider an Act that was passed by the hon. Gentleman's Government to set up an independent element of inquiry into the police. That is what his Government did. I am saying that we should look at the three-year report and then examine the changes that we want to make.
    Mr. Alan Clark: Can my right hon. Friend give us any idea how much police time is taken in pursuing these com-
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    plaints? Will he not agree that a very large proportion of complaints are found to be groundless, and in many cases are mischievous in origin? Is he aware that in some sections of the criminal classes it is almost mandatory to lodge a complaint against the police at the same time as pleading not guilty?
    Mr. Whitelaw: There is a considerable amount of police time involved in some complaints—and I emphasise the word "some"—which turn out to be both trivial and groundless. On the other hand, there are serious and important complaints. I hope that when we examine the three-year report, we can sensibly and quietly differentiate between the two. It may well be that we should look at action on the serious and important complaints, and at the same time realise that too much police time is wasted on the trivial and unnecessary.

    Misuse of Drugs Act 1971
    Mr. Edward Lyonsasked the Secretary of State for the Home Department whether he will seek to amend the Misuse of Drugs Act 1971, having regard to the recent House of Lords judgment dealing with the proceeds of crime in the "Operation Julie" drugs case; and if he will make a statement.
    Mr. Brittan: The implications of this judgment are not confined to the Misuse of Drugs Act. We are considering what changes in the law may be required.
    Mr. Lyons: In view of the startling incapacity of the English law at present to recover by order the ill-gotten gains of criminal offences, will the Minister introduce a simple Bill enabling courts to have the general power to recover gains of this kind? Failing that, will he introduce an interim measure to amend the Misuse of Drugs Act to cover offences of conspiracy and also to cover the profits from drug offences?
    Mr. Brittan: I do not think that the problem can be dealt with in a simple way because it is a complex matter. The hon. and learned Member is not doing justice to the existing powers. In most cases the power to fine, which is unlimited in Crown courts, and the power to make compensation orders can deal with these problems. Of course, there are also substantial powers for the enforcement of orders to

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    that effect. None the less, I agree that the judgment of the House of Lords shows a particular problem in a particular area and that is something that we must look at.
    Mr. Speaker: I appeal for shorter questions and answers.
    Sir William Clark: In view of the fact that, presumably, these ill-gotten gains were not returned for tax purposes, will my hon. and learned Friend have a word with the Chancellor of the Exchequer in order to see whether three times the tax that is due, or whatever the liability is, could be levied on them? That would mean that the Exchequer would receive all these ill-gotten gains.
    Mr. Brittan: I understand that the Inland Revenue is alert to these implications.

    Firearms and Shotguns
    Mr. Newensasked the Secretary of State for the Home Department if he has received any representations on the need further to restrict the conditions on which shotgun licences can be obtained since his recent announcements on this matter.
    Mr. Whitelaw: In addition to the representation made by the hon. Member, there have been two letters from members of the public.
    Mr. Newens: Is the Home Secretary aware that many people, who are deeply concerned about the use of firearms by criminals, are greatly dismayed by his complete failure to take effective steps to make it more difficult for people to get hold of shotguns which are then used in crimes of violence? Does he recognise that many of the police take this point of view? Will not he have another look at the issue because we must all realise that it is very important to try to prevent the use of firearms in crime?
    Mr. Whitelaw: Yes, I accept what the hon. Member says about the importance of dealing with firearms in relation to crime. However, I am totally unconvinced that we would gain in that regard by having legislation to control the use of legally-held shotguns, which I do not believe are the real problem.
    Mr. Farr: Will my right hon. Friend confirm that well over 99 per cent. of all firearms used in crime are illegally and
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    illicitly held, and have never been legally held by a firearms certificate holder in Britain?
    Mr. Whitelaw: I cannot confirm the exact figure, but a large proportion of firearms used in crime are illegally held.

    Dangerous Drugs (Imports)
    Mr. Parryasked the Secretary of State for the Home Department if he is satisfied with the operation of the present law regarding the import of dangerous drugs into the United Kingdom, and whether he has any proposals for changing it.
    The Minister of State, Home Office (Mr. Timothy Raison): Yes, Sir. We have no proposals for changing the present law controlling the importation of dangerous drugs.
    Mr. Parry: May I congratulate the Merseyside drugs squad and Customs and Excise on intercepting several large quantities of smuggled drugs in Liverpool? Will the Minister assure us that constant vigilance at our ports will be maintained in an effort to control the evil of drug smuggling?
    Mr. Raison: I echo the hon. Gentleman's congratulations to the Merseyside police and Customs and Excise. They have given an excellent example of co-operation in their recent successful operations. I can give the hon. Gentleman the assurance for which he asks.

    Commissioner of Police of the Metropolis (Report)
    Mr. John Huntasked the Secretary of State for the Home Department what specific steps he proposes to take in the light of the report of the Commissioner of Police of the Metropolis for the year 1979.
    Mr. Whitelaw: The report is an account of the policing of the Metropolis in 1979, and as such is not the occasion of specific action, but many of the matters on which the Commissioner touches are already the subject of discussion within this House and within my Department. The report is a valuable contribution to that discussion.
    Mr. Hunt: Will my right hon. Friend pay particular attention to the Commissioner's comments on the working of the

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    Bail Act? Is it not extremely disturbing that almost one quarter of those arrested for robbery in London last year were on bail? Is not the repeated granting of bail to persistent and professional criminals demoralising for the police and dangerous for the public?
    Mr. Kilroy-Silk: What about the 42 per cent. arrested who are not guilty?
    Mr. Whitelaw: It is a serious matter, and the House would be wise to pay attention to what the Commissioner has said. However, the Bail Act, which was passed by this House, clearly set out the considerations that the courts have to take into account before granting bail. They include the nature and seriousness of the alleged offence and the defendant's character background. The statutory framework affords ample opportunity for courts to withhold bail in appropriate cases. It must be a matter for the courts. If the House believes that the Bail Act is not working properly, we have a perfect right to re-examine it, although we passed that Act only recently.
    Mr. Alexander W. Lyon: Will the Home Secretary confirm that remand in custody is not preventive detention? Will he also confirm that a good many of the offences for which those people were on bail were fairly minor, such as theft and burglary, compared with, for instance, the robberies that they later committed? Does the right hon. Gentleman agree that in those circumstances it would be wholly wrong to draw conclusions from that narrow sample? When will the Home Office produce national statistics on the effects of the Bail Act?
    Mr. Whitelaw: We shall consider what the hon. Gentleman says. It is right to keep a sense of proportion. We should pay close attention to what the Commissioner says but also bear in mind the overall effects of the Bail Act.
    Mr. Forman: Will my right hon. Friend confirm that the Metropolitan Police is still sadly under strength? Is there a possibility of introducing a pay differential in favour of the Metropolitan Police in order, in due course, to encourage its full establishment?
    Mr. Whitelaw: As my hon. Friend knows, throughout the country police re-
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    cruiting has been extremely good over the past year—and that includes the Metropolitan Police—although it still has a considerable deficiency. Police pay is settled under the Edmund-Davies formula. It would be wrong to change that formula or change the position of the Metropolitan Police compared with other police forces, bearing in mind that most other police forces are virtually up to establishment.
    Mr. Merlyn Rees: As the Metropolitan Police district covers 92 constituencies and part of a constituency in Hertfordshire, and the Home Secretary is quite properly the police authority for the district, should we not have a debate on the report? Does the right hon. Gentleman agree that without that the report will merely end up in the Library, we shall say that the police are accountable to the House, and that is the last that we shall hear until the report is published the following year?
    Mr. Whitelaw: Nothing would give me greater pleasure than a debate on the actions of the Metropolitan Police and the Commissioner, which in the past year have been a remarkable success and a great credit to the country. Alas, debates are not a matter for me. I sometimes wish that they were.

    Firearms Certificates (Fees)
    Mr. Farrasked the Secretary of State for the Home Department when he expects the review of the method of assessing firearm fees will be commenced and will be completed.
    Mr. Whitelaw: Preliminary work has already started, and I expect the review to be completed in the autumn.
    Mr. Farr: As firearm certificate fees increased by 70 per cent. on 1 July, and in recent years there have been many startling increases, can my right hon. Friend assure the House that no further increases will be made until a restructured method of assessment is arrived at which puts the matter on a fairer basis?
    Mr. Whitelaw: In the considerable discussions that I had with my hon. Friend before the firearms fees were increased, I made it clear that we should have a review to see how matters could be improved for the future. I stand by that.
    Mr. Donald Stewart: Is the right hon. Gentleman aware that law-abiding holders

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    of legally registered firearms would be grateful if he would confirm that firearms used by criminals are a completely different matter? Will he accept that the proposed increase cannot be justified on any ground, including inflation? Will he reconsider the increase in the cost of firearms certificates?
    Mr. Whitelaw: I have undertaken to review the length of certificates and the possibility of putting firearms certificates and shotgun certificates together. I believe that that is reasonable. I shall not go into the arguments for raising fees, which we have already debated. I could give the right hon. Gentleman a more convincing answer if I could bring the Treasury in on my side.
    Mr. Hicks: Will my right hon. Friend acknowledge that shooting in the countryside is a natural pursuit, enjoyed by a wide range of the community? Does he agree that it is not solely a rich man's sport, and should, therefore, not be used as an excuse for revenue-raising?
    Mr. Whitelaw: Shooting in the countryside is certainly not being used as an excuse for revenue-raising. It will not surprise the House to hear that I fully endorse what my hon. Friend says.
    Mr. Ford: Does the right hon. Gentleman agree that he might be greatly assisted in carrying out the review if a joint working party was set up consisting of Home Office and shooting sports interests?
    Mr. Whitelaw: As the hon. Gentleman knows, I had discussions with the shooting sports interests both on whether further legislation is necessary, which I decided against, and the increased fees for firearms certificates, on which we disagreed. I am always prepared to discuss such matters with shooting sports interests. I take such matters seriously.

    Bristol (Disturbances)
    Mr. Palmerasked the Secretary of State for the Home Department when he expects the first two inquiries of the investigation into the Bristol disturbances on 2 April namely (a) the inquiry by the chief inspector of constabulary into police methods and (b) the inquiry into social provision by the local authorities, to report.
    Mr. Raison: We hope to be able to announce the results of the review of arrangements for handling spontaneous public disorder before the Summer Recess. The outcome of the current discussions on community relations in Bristol is, of course, primarily a matter for the local authorities and other bodies concerned, but I understand that there have been two meetings and that working groups have been set up on education and employment.
    Mr. Palmer: Is the hon. Gentleman aware that the slowness of the so-called three-pronged inquiry that the Home Secretary set up is causing great disappointment in Bristol? Will the hon. Gentleman confirm that the Select Committee was unable to spend sufficient time in Bristol, although perhaps that was not its fault? Does he accept that the Home Office should therefore reconsider the request of the local authorities and community relations organisations for an official inquiry into what happened in Bristol on 2 April?
    Mr. Raison: I do not believe that the three-pronged approach is proceeding slowly. The Select Committee has paid its visit. The review of spontaneous public disorder has proceeded rapidly, and we are about to learn the results. Local authorities have set up working groups to deal with the crucial areas of education and employment. As the hon. Gentleman knows, I visited Bristol a few days ago, and am aware that the city council and others would still like a public inquiry. However, having talked to them, I believe that my right hon. Friend's decision to proceed in the way that he outlined in April is the most constructive approach
    Mr. Waldegrave: Does my hon. Friend agree that what happened in Bristol on that night is not greatly in question and that there would be nothing for an official inquiry to do except to investigate the underlying causes? There have been several reports on such matters and the Sub-Committee of the Select Committee is preparing another. Does not my hon. Friend think that the time has come, not to have more inquiries, but to take the necessary action?
    Mr. Raison: I entirely agree with my hon. Friend's judgment in the matter.
    Mr. Clinton Davis: Can the Minister tell us whether his statement is likely to include a definition of the Government's policy on the law of "sus", which large sections of the community, including one of our Select Committees, believe does a great deal to sour race relations in this country?
    Mr. Raison: My right hon. Friend the Home Secretary made our view on "sus" clear in the debate that took place in the House a short time ago. The inquiry that has been set up by the Home Office, in conjunction with the Association of Police Officers, will look at the whole question of spontaneous public disorder, which is a slightly different matter.
    Mr. George Gardiner: In view of some past misunderstandings, will my hon. Friend confirm that the Sub-Committee of the Select Committee visited Bristol with the purpose of investigating racial disadvantage in that city and not the events leading up to the disturbance?
    Mr. Raison: My hon. Friend, who is a member of the Sub-Committee, is right. We felt that the visit of the Sub-Committee could be of value in trying to get to grips with the broader questions of racial disadvantage in this country.
    Dr. Summerskill: What further steps will the Government take to deal with racial disadvantage in order to avoid a repetition of the disturbances in other towns and cities? Will he consider introducing measures similar to the previous Government's Local Government Grants (Ethnic Groups) Bill, which was aimed specifically at tackling racial disadvantage?
    Mr. Raison: I cannot make a statement on the whole of the Government's policies towards race relations in answer to this question. As the hon. Lady knows, we have been looking carefully at whether section 11 of the Local Government Act 1966 needs to be replaced by new legislation or whether we can revise the administrative criteria. We hope to make an announcement on that matter shortly.

    Radio 1
    Mr. Chapmanasked the Secretary of State for the Home Department if, to improve the revenue of the British Broadcasting Corporation, he will bring for-
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    ward proposals to enable Radio 1 to become a national commercial station.
    Mr. Whitelaw: I endorse the principle that the BBC should continue to be financed through the revenue from the television licence fees, as was recommended by the Annan committee on the future of broadcasting. The allocation of resources between its different services is a matter for the BBC.
    Mr. Chapman: Does my right hon. Friend agree that the significant problem facing the BBC is a lack of buoyancy in its revenue? Does he agree that the character and content of Radio 1 are already attuned to a development such as I propose and that the BBC might also consider drawing out of local radio so that it is left to commercial interests and the national Radio 1 would bring much-needed revenue to the BBC?
    Mr. Whitelaw: Those are essentially matters for the BBC to decide. I must return to the fact that the Government gave a 36 per cent. increase in the licence fee over two years and the BBC is expected to live within that.
    Mr. Robert Sheldon: Will the right hon. Gentleman recall the words of the Annan committee, which described the BBC as arguably the most important cultural influence in the nation? Will he resist any attempts by his hon. Friends to destroy the important position of the BBC?
    Mr. Whitelaw: I note that point, and so will the governors of the BBC.
    Mr. Lang: As enforcement and collection costs exceed £25 million per annum, does my right hon. Friend agree that there is a need for greater variety and flexibility in the approach to the collection of licence fees, such as, for example, the introduction of direct debiting?
    Mr. Whitelaw: We shall consider all such matters. They are important in relation to the licence fee.
    Mr. Merlyn Rees: In view of the increase in inflation which was not taken into account when the licence fee was put up, is the Home Secretary saying that the BBC will have to carry the inflation during the two-year period?
    Mr. Whitelaw: I remind the right hon. Gentleman that I had to take over

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    the position that he left, with the BBC in debit. I gave the highest-ever increase in the licence fee. It is only fair to point that out. The BBC, like every other organisation in this country, has to look at its costs at a time of considerable economic stringency.

    Tobacco Sales (Young Persons)
    Mr. Dubsasked the Secretary of State for the Home Department how many prosecutions were brought in 1979 against shopkeepers for selling cigarettes or tobacco products to young persons under 16 years of age.
    Mr. Brittan: Information for 1979 is not yet available. In 1978, 11 persons were prosecuted for offences of selling tobacco to juveniles.
    Mr. Dubs: Is the Minister satisfied with that low figure of prosecutions, given that evidence suggests that smoking among those under 16 is widespread and that the law is being totally ignored? Given the number of deaths from smoking every year, will the hon. and learned Gentleman take action to see that the law is enforced?
    Mr. Brittan: It is a difficult law to enforce, for the simple reason that neither those who sell nor those who buy are likely to report the matter to the police. One could significantly increase the number of prosecutions only by a major diversion of police resources from other crimes.
    Mr. Thompson: While I accept the horror of this story, does my hon. and learned Friend accept that far more terrible is the easy access that young people of 16 and under have to other drugs? Is he satisfied with the steps that are being taken to stop that?
    Mr. Brittan: That is a wider, and possibly more serious, question. I do not think that one can be satisfied when young people have access to drugs to the extent that they do. Any practical suggestions for dealing with that will certainly receive sympathetic consideration.
    Mr. Arthur Lewis: Reverting to the Minister's original reply, may I ask whether he is aware that we have been told from January to July that nearly every report from 1979 is not available? Those reports were supposed to be due at
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    the end of last year and it takes seven or eight months before we get them. Will the Minister try to get his Department to see that those people give us their reports within two or three months, and not seven or eight months?
    Mr. Brittan: I do not think that it is absolutely fantastic that we do not have the information for 1979 on all the offences that are committed and on the one that is the subject of the question. I do not think that we should be justified in diverting more resources in the public sector to getting reports out faster.

    Park Royal Estate
    Mr. Freesonasked the Secretary of State for the Home Department what representations he has had regarding the co-ordinated visits to the Bestway cash and carry and other premises in Park Royal Estate on 13 May by police and immigration officers.
    Mr. Raison: We have received letters from the right hon. Member himself and the hon. Member for Brent, South (Mr. Pavitt) and from the Camden committee for community relations; and my right hon. Friend has, of course, received the delegation led by the right hon. Gentleman.
    Mr. Freeson: Will the Minister bear in mind that, whatever comes out of his right hon. Friend's consideration of the representations made by the deputation that I took to him recently, it is unacceptable in our society that there should be blanket raids involving the arrest of large numbers of innocent people in order to bring to justice those who are in breach of the law and that it is equally unacceptable that any system of passport control for identification purposes should be introduced into our society. [HON. MEMBERS: "Why?"] It is the introduction of identity cards and it paves the way to a police State eventually.
    Mr. Raison: My right hon. Friend made clear to the right hon. Gentleman that in carrying out such operations there is a need to strike the right balance between any possible damage to community relations and the need to enforce the law. May I make clear that no blanket raids have been carried out.
    Mr. Freeson: The Minister is wrong.
    Mr. Raison: May I also make clear that there is no need for anybody to carry a passport with him. The only people who need worry about our immigration laws are those who are in breach of them.
    Mr. Robert Taylor: How many of those apprehended during the raids were found to be here illegally?
    Mr. Raison: The figures vary, but of 37 people taken to the police station in the Bestway raid, nine were found to be in breach of the law or charged with being so. At the Main Gas operation, more than 20 people were found to be in breach of the law or charged with being so.
    Mr. Graham: Is the hon. Gentleman aware of the damage that was done to good race relations in my constituency as a result of the raid on the Main Gas factory in Edmonton?
    What advice does the Home Secretary propose to give to my innocent constituents about the sort of documents that they will have to carry in future if they wish to avoid the distressing experiences suffered by other innocent constituents of mine as a result of the raid on the Main Gas factory?
    Mr. Raison: I do not think that the raid carried out in the hon. Gentleman's constituency can be criticised in the way that he has implied. On the other hand, my right hon. Friend has made clear that he is reviewing the way in which such operations are carried out.
    Mr. Budgen: Will my hon. Friend not agree that if all those people who were suspected of an offence had an identity card, they would be able to show the identity card as soon as the police saw them and subsequent arrests would be unnecessary?
    Mr. Raison: It might be true, I suppose, that an identity card would serve that purpose. On the other hand, the introduction of identity cards into this country would represent a major step.
    Mr Freeson: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of certain parts of the hon. Gentleman's reply, when he misrepresented to the House that there was no
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    blanket raid, I shall seek leave to raise the matter on the Adjournment.

    Broadcasting Standards
    Dr. Mawhinneyasked the Secretary of State for the Home Department if he will introduce legislation to set up a body, independent of the broadcasting authorities, permanently to review the application of the standards relating to the broadcasting of obscene, indecent and blasphemous material.
    Mr. Brittan: We do not plan to do so.
    Dr. Mawhinney: I thank my hon. and learned Friend for that disappointing reply. Bearing in mind the increasing incidence of broadcasts by the IBA that contravene the law on standards and by the BBC that contravene the agreement on standards, and bearing in mind the fact that neither organisation seems to be willing to do anything about it, what advice can my hon. and learned Friend give the House to see that the law and the agreement are enforced?
    Mr. Brittan: If there is a suggestion that there has been a breach of the law, it is by no means impossible for those who take that view to consider taking action to enforce the law. On standards generally, I think that to have a body, after the event, monitoring and commenting on a matter of subjective opinion, such as that raised in this question, would be very difficult and not consistent with our present operation of broadcasting.
    Mr. Christopher Price: Can I congratulate the Minister on refusing to set himself up as a sort of Mrs. Grundyite censorial body in these matters? Will he stick to his policies and take no notice of the rather dreadful people behind him?
    Mr. Brittan: I am grateful to the hon. Gentleman for what he says but I do not think that my hon. Friend was inviting me to set myself up as that body.

    British Broadcasting Corporation
    Mr. Lathamasked the Secretary of State for the Home Department whether he will hold further discussions with the British Broadcasting Corporation regarding its budget.
    Mr. Whitelaw: I have no immediate plans to do so, but my officials remain

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    in close touch with those of the BBC about its finances.
    Mr. Latham: Is my right hon. Friend aware that there is widespread local support for such BBC local radio stations as Leicester and Nottingham and that even if there have to be cuts in the BBC budget, as is understood, constituents hope that the BBC will show a proper commitment towards local radio?
    Mr. Whitelaw: That must be a matter for the governors of the BBC. I am grateful to my hon. Friend for his point about the BBC finances which must be clearly understood both in this House and throughout the BBC.
    Mr. Allan Roberts: Does the Secretary of State not agree that a revitalised BBC local radio service running for 24 hours a day could compete adequately with local commercial radio and that money saved by the BBC could be diverted to saving the orchestras if BBC Radio 1 was abolished and the "needle time" used to revitalise local BBC radio?
    Mr. Whitelaw: I have to be careful to stick to my position and to say that these must be matters for the governors of the BBC to decide.

    Wormwood Scrubs Prison
    Mr. Soleyasked the Secretary of State for the Home Department whether he is satisfied with the educational facilities available in Wormwood Scrubs prison.
    Mr. Brittan: No, Sir. Severe staff shortages have meant that sufficient uniformed staff have not been available to escort prisoners to and from classes and as a result cell-based study has had to be substituted.
    Mr. Soley: I am glad that the Minister accepts there is a problem. Would he accept that inadequate provision of education, along with problems about visiting and privileges, creates tensions in our prisons? If he cannot take action within existing resources, why does he not accept the recommendations of the recent all-party report and introduce a conditional release scheme that would get the number of prisoners down and enable existing resources to be spread more widely and fairly?
    Mr. Brittan: I am not sure that the hon. Gentleman's suggestion would have the effect that he desires. I accept that there is a problem about education in Wormwood Scrubs.
    Mr. Joseph Dean: Bearing in mind that the answer and the supplementary question were widened to include other facets of the prison service, will the Minister say when time will be provided by the Government to debate the May report on the prison service in total?
    Mr. Brittan: I hope that it will be soon.
    Mr. Alexander W. Lyon: Is the hon. and learned Member aware that I visited the Scrubs this morning? Is it not plain that the report of the regional director into the incidents of 31 August last year could be published without reference to the events that immediately followed the introduction of the mufti squad and thereby remove it from any police proceedings that are going on? Is it not possible to present that section of the report to the House in order to make a judgment about what happened?
    Mr. Brittan: That ranges well beyond the problem of education in Wormwood Scrubs and different considerations arise.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. Temple-Morrisasked the Prime Minister if she will list her official engagements for Thursday 3 July.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had further meetings with ministerial colleagues and others. Later today, I shall leave for a visit to Scotland, and this evening I shall attend a reception given by Her Majesty the Queen at Holyroodhouse to mark the eightieth birthday of the Queen Mother.
    Mr. Temple-Morris: Will my right hon. Friend take time today to re-emphasise strongly the recent statement of her Industry Secretary, that as well as pricing themselves out of jobs workers can also price themselves into jobs? Will she congratulate those East Midlands busmen who have sacrificed their overtime pay

    1757
    to preserve the jobs of 50 of their colleagues? Will she agree that if more followed the example of those members of the Transport and General Workers Union, as well as the advice of her right hon. Friend, our economic problems would be more quickly solved?
    The Prime Minister: I am grateful to my hon. Friend. I agree that the efforts of those East Midlands bus crews were highly commendable and indicated that, in considering their own pay, they were considering its effect, or possible effect, on the unemployment of others. There is not the slightest shadow of doubt that there is a direct relationship between pay increases that go outside money supply and increasing unemployment. I hope that their example will be followed further. It shows, once again, the wisdom of my right hon. Friend the Secretary of State for Industry.
    Mr. Straw: Is the Prime Minister aware that on Tuesday the Chief Secretary to the Treasury told the House that, broadly speaking, pay increases over the last 12 months had had no impact on inflation? Does she agree with her Chief Secretary?
    The Prime Minister: I thought that my right hon. Friend the Chief Secretary was in his usual scintillating form. If one reads the speech as a whole, every single part of it can very well be substantiated. The underlying reason for increases in inflation is the money supply in the longer run. In the short run, there are particular reasons for the increase in the retail price index, which is slightly different.
    Mr. Bruce-Gardyne: Will my hon. Friend find time, if possible today, to study the latest CBI survey which shows that manufacturers expect to put up their prices by less than at any time during the last seven years? Can she pass a copy to the Leader of the Opposition just in case he might manage to read it?
    The Prime Minister: I did, indeed, notice that report in the survey. It augurs well for a falling rate of inflation in the coming months. I noted that it was supported, in some ways, by an article in the Daily Mirror two days ago that pointed out that the cost-plus era was over, and a very good thing too.
    Mr. James Callaghan: In view of the fact that we all read and listen to the Chief Secretary with reverential attention, can the Prime Minister say clearly whether increases in wages are a cause of inflation or not?
    The Prime Minister: Over a period—[Laughter.] Over a period, the cause of increased inflation is increase in the money supply. Within the money supply, there will be a different distribution both between the public sector and the private sector. Within those sectors, there will be increases in pay within the general money supply well beyond what is warranted and those may come through to an increase in particular products in the RPI. That will not necessarily affect the general price level, which is the inflation level.
    Mr. Callaghan: May I thank the Prime Minister for that reply and say that I do not understand a word of it?
    The Prime Minister: In that case I must remark, in passing, that I wonder who wrote the right hon. Gentleman's speeches when he was in power.
    Mr. Speaker: Mr. Ivor Stanbrook.
    Mr. Stanbrook rose—
    Mr. Callaghan rose—
    Mr. Speaker: Order. If the hon. Member does not mind, I should like to hear the Leader of the Opposition.
    Mr. Callaghan: I do not answer questions here, of course—I only ask them. Is the right hon. Lady aware that not only did I write my own speeches but that they were understood by everybody who heard them?
    The Prime Minister: Then the right hon. Gentleman was fortunate in having intelligent listeners.
    Mr. Stanbrook: Will my right hon. Friend find time this afternoon to look again at the wording of clause 17 of the Employment Bill? Is she aware of the growing volume of criticism about the wording of the clause, which is echoed by the president of the Law Society and the leader of the Bar? In those circumstances, what more do the Government require to decide to examine the clause again and to give the House an opportunity to review the wording of the clause?
    The Prime Minister: I am aware of the clause. I agree that it is somewhat complex because it is based on immunities. The law on trade unions has been based on immunities for a long time. The Bill is a first step. It is not a last step.
    Mr. David Steel: Is the Prime Minister aware that we are not interested in the scintillating form of the Chief Secretary but in what he says? Does she agree with the specific statement that he made on Tuesday that rising wages in the last 12 months made absolutely no contribution to the rise in inflation?
    The Prime Minister: With respect, the Chief Secretary did not precisely say that. My right hon. Friend was dealing with the cause of the underlying increase in inflation and some of the short-term causes. If one reads the whole of his speech one will agree that it is not only scintillating but brilliant in content.

    UNEMPLOYED (ETHNIC MINORITIES)
    Mr. Soleyasked the Prime Minister what steps she is taking to deal with the problem of unemployment for young blacks.
    The Prime Minister: We have agreed to the proposals from the Manpower Services Commission to expand the youth opportunities programme by 25 per cent. to over 250,000 places in 1980–81. This expansion has enabled the MSC to renew its undertakings to all unemployed school leavers and all the long-term young unemployed, whether black or white.
    Mr. Soley: Does the Prime Minister accept that the rate of unemployment for young blacks is at least twice, and possibly three or four times, as high as that of young whites and that they often work in low-paid jobs and do not appear to be pricing themselves into the market, as is the current silly theory? Therefore, is it not time that the Prime Minister did something effective to ensure that young blacks are not discriminated against in employment?
    The Prime Minister: It is right for the youth opportunities programme to apply to all young people, irrespective of colour. In areas with large ethnic minorities some of the schemes under the large youth
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    opportunities programme are arranged and run by the minorities. That seems to be right.
    Mr. Whitney: In the light of recent exchanges, will my right hon. Friend take time today to consult again the speech by the Leader of the Opposition—
    Mr. Speaker: Order. Does the hon. Gentleman realise that we are considering unemployment among young blacks? An open question is due to be asked shortly.
    Mr. Alexander W. Lyon: Could the Government give a lead, in relation to discrimination against blacks by insisting that the Taivstock Institute's recommendation about discrimination in the Civil Service is implemented by the Civil Service?
    The Prime Minister: I am sure that the Civil Service implements everything which it has to implement and which it is advisable to implement. If the hon. Gentleman has a particular case in mind, perhaps he will let us know about it.
    Mr. George Gardiner: Does my right hon. Friend agree that the unemployment problems encountered by young blacks are not eased by inflammatory statements from some bodies urging members of the minority communities to withhold co-operation?
    The Prime Minister: I entirely agree. It does no one any good to suggest that co-operation with the police should be withheld. I said on Tuesday—and I say it again—that I believe that the vast majority of the coloured community believe firmly in upholding the law and will support the police wholly in their task.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. William Hamiltonasked the Prime Minister what are her official engagements for 3 July.
    The Prime Minister: I refer the hon. Member to the reply which I gave some time ago.
    Mr. Hamilton: In regard to the Prime Minister's impending visit to Scotland, does she recognise that the most important matter there is not the eightieth birthday of anybody—[HON. MEMBERS:

    1761
    "Cheap."]—but the escalating unemployment problem? Will she give an assurance that she will pay great attention to the letter that I have sent to her about a firm in my constituency which not only has gone into liquidation but whose directors have disappeared into thin air, leaving at least £40,000 of unpaid wages and holiday pay owing to the people who have been thrown out of their jobs?
    The Prime Minister: If the hon. Gentleman has a particular case which causes him great concern, of course I or my right hon. Friends will give it full and proper attention. I agree that the unemployment rate in Scotland is somewhat higher than in England. [HON. MEMBERS: "Somewhat?"] It is somewhat higher than it is in England. However, the amount of money which goes per head into Scotland, rightly, is greater than that which goes into England, by a considerable amount.
    Mr. Speaker: Mr. Ray Whitney.
    Mr. Whitney: I am most grateful, Mr. Speaker—
    Mr. Cryer: The hon. Gentleman has been called twice.
    Mr. Speaker: Order. The hon. Gentleman was not allowed by me to ask his earlier question and that is why I have called him.
    Mr. Whitney: In the light of exchanges five minutes ago, will my right hon. Friend find time today to consult yet again a speech delivered to the Labour Party conference in 1976—although I am not sure whether it was written by the right hon. Member for Cardiff, South-East (Mr. Callaghan) or his son-in-law? Is my right hon. Friend aware that in that speech the right hon. Gentleman stated that the reason for the steady rise in unemployment was that we had continued to pay ourselves more than the value of the goods that we produced
    The Prime Minister: I remember that speech well because it pointed out that we could not spend our way out of inflation and that if we tried to it would lead to higher unemployment.
    Mr. Arthur Davidson: Since the Secretary of State for Industry is obsessed with the need for workers to take wage
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    cuts and since the Chief Secretary seems to think that that has no impact on inflation, who is right?
    The Prime Minister: On this side we are all right.
    Mr. Beithasked the Prime Minister if she will list her official engagements for 3 July.
    The Prime Minister: I refer the hon. Member to the reply which I gave earlier.
    Mr. Beith: Will the Prime Minister find time today to check up on the trawler which she launched in the Lowestoft constituency two years ago and which is now up for sale, along with most of the rest of the British fishing fleet? Will she take serious account of the representations made to her right hon. Friend this morning?
    The Prime Minister: There was a meeting, as the hon. Gentleman knows, with my right hon. Friend this morning and I am sure that he will take fully into account the representations that were made and will press ahead as far and as soon as he can in seeking agreement on a common fisheries policy which will be suitable for the fishermen of this country.
    Mr. Ralph Howell: Does my right hon. Friend agree that a great number of the unemployed simply cannot afford to work because of our chaotic taxation and welfare system? May I ask my right hon. Friend if she recalls the work done by the Centre for Policy Studies which published realistic figures of those who wanted to work? What has happened to those figures? Why are they no longer published? I believe that they would prove that less than half of the unemployed want to work at the present time.
    The Prime Minister: I know very well the excellent work which my hon. Friend has done on this subject and I agree with him that one of the problems is that there is not a sufficient gap between what one can earn at the bottom end of the wage scale and the amount which can be taken out in benefits which are, sometimes, not liable to tax by those people who are not in work. I agree that we have not yet sorted out that problem, but I ask my hon. Friend to give us

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    some credit for the fact that we are trying to do that and that within two years we shall bring unemployment and sickness benefit into taxation. In so far as they are added to other income, that will go some way towards dealing with the problem.

BUSINESS OF THE HOUSE
Mr. James Callaghan: May I ask the Leader of the House to state the business for next week?
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): The business for next week will be as follows:
MONDAY 7 JULY—Consideration of Private Members' motions until 7 o'clock.
Afterwards, completion of the Report stage of the Civil Aviation Bill.
TUESDAY 8 JULY—Progress on remaining stages of the Local Government, Planning and Land (No. 2) Bill.
Motions on the Northern Ireland orders on roads and private streets.
WEDNESDAY 9 JULY—Debate on the White Paper on the government of Northern Ireland: proposals for further discussion, Cmnd. 7950.
Motion on the Northern Ireland (Interim Period Extension) Order.
THURSDAY 10 JULY—Supply [25th Allotted Day]: Debate on an Opposition motion on the persistent decline in manufacturing industry.
FRIDAY 11 JULY—Debate on information technology, on a motion for the Adjournment of the House.
MONDAY 14 JULY—Supply [26th Allotted Day]: A debate on the persistent rise in unemployment, on an Opposition motion.
Mr. Callaghan: With regard to Wednesday's business, it is the hope of the Opposition that there will be a general discussion on these matters though it is not the intention of the Opposition to divide the House on them at this stage.
The right hon. Gentleman and the House will note that the two matters to be debated on Thursday and the following Monday are related. There is a decline in manufacturing industry and there is a persistent rise in unemployment. In the days at our disposal between now and the end of the Session we shall continue to call attention to these problems. May I ask the right hon. Gentleman whether, in the light of the disastrous impact of

1765
redundancies, unemployment and closures notified day by day to hon. Members on both sides of the House by their constituents, the Government are willing to give an extra day next week for a debate on unemployment and what is happening to the country as a result of continual closures? That will give an opportunity to all hon. Members who are affected to express the views of their constituents.
Mr. St. John-Stevas: I am grateful to the right hon. Gentleman for telling me about the intention of the Opposition on Wednesday. That is, of course, wholly appropriate, since it would not be suitable to divide the House on a discussion document that is not putting forward definitive Government proposals to the House.
As for the question of an extra day for a debate on unemployment, I think that the use of the Opposition's Supply day should be adequate for them to raise the points that they wish to have discussed. Of course, we very much regret the present high level of unemployment, but we feel that we must go through this period of difficulty so that the economy can be put on a lasting and sound basis for the future.
Mr. Nicholas Winterton: While I am not sure that the advice that I give to my right hon. Friend the Prime Minister is heeded as much as it should be, I am grateful to the Government for reducing the minimum lending rate today. Will my right hon. Friend arrange an early debate on the problems of smaller businesses, so that those problems—created as much by the previous Government as by high interest rates—can be displayed to the Government? That will mean that small businesses, which are the seed corn of our future, will feel that their problems are being adequately debated in the House.
Mr. St. John-Stevas: In his Budget Statement my right hon. and learned Friend the Chancellor of the Exchequer produced a number of measures offering material help to small businesses. Those measures have been widely welcomed and, therefore, I do not think that a further debate on the subject is necessary.
I do not underestimate the weight of the advice given by my hon. Friend in
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respect to the reduction in the minimum lending rate, but I understand that other factors came into operation in reaching that welcome decision.
Mr. Faulds: Will the right hon. Gentleman accept the argument of the Leader of the Opposition for a much longer period of debate on the increasing incidence of unemployment throughout the kingdom? Very much as a secondary matter, will he consider—because of the increasing interest in arts affairs—extending the 10 minutes a month to 15 minutes a month for questions on that subject?
Mr. St. John-Stevas: I do not think that I can add to what I have already said on the question of a debate on unemployment. I would, of course, welcome a longer period for questions on the arts, and we can certainly look at that again in the next Session of Parliament. I would point out to the hon. Gentleman that that separate period for arts questions is the first of its kind that we have had in the House.
Mr. Stokes: In view of the recent statements about relations between the police and the immigrant community, would it be possible to have a debate on immigration in the near future, particularly as this very important subject is seldom debated in the House?
Mr. St. John-Stevas: I cannot promise an early debate on that subject, though there will no doubt be an opportunity at a later stage.
Mr. Coleman: Is the right hon. Gentleman aware of the document published by the Iron and Steel Trades Confederation this week entitled "A new deal for Steel"? In view of the desperate situation in which the steel industry finds itself will the right hon. Gentleman say whether we can have a debate on that situation during the course of the next few weeks, and in any case before the House rises for the Summer Recess?
Mr. St. John-Stevas: I have seen the document to which the hon. Gentleman refers but I am afraid that I cannot promise an early debate. It was an interesting document, but I wish that a clearer connection had been made in it between the price of products and wages paid.
Mr. Farr: I wonder whether my right hon. Friend has anything to tell the House in relation to statements made by Members of the House under the cloak of privilege? Alternatively, does he have a statement to make about arranging a debate about the statement that was made by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), which has not been retracted—[Interruption.] Will there be an opportunity for the House to discuss this matter, which has caused a good deal of unease on both sides of the House?
Mr. St. John-Stevas: I certainly share the concern of my hon. Friend about this matter. I suggest, however, that we wait upon events.
Mr. Speaker: Order, I should tell the House that as well as an application under Standing Order No. 9 there is a personal statement to be made later in the afternoon. I hope that hon. Gentlemen will bear that in mind and try to be brief with questions.
Mr. Whitehead: Has the Leader of the House had an opportunity to see early-day motion 726, standing in my name and that of 120 other hon. Members of all parties, relating to the need for the Ministry of Defence to publish a list of the countries invited to the British Arms Equipment Exhibition in Aldershot?
[That this House Calls upon Her Majesty's Government to state which countries have been invited to the British Army Equipment Exhibition front 24 to 27 June, and to describe what steps are being taken to prevent the export of arms technology from contributing to the violation of human rights in countries such as Uruguay, Argentina, Libya, Zaire, Turkey, South Korea and Indonesia, where such practices are widely attested.]
Does the right hon. Gentleman not agree that the Ministry of Defence should make an early statement?
Mr. St. John-Stevas: I understand that the Government's position on that point and the point raised in the motion has already been stated in reply to questions in this House and in correspondence. The list of countries invited to exhibitions has traditionally been treated as confidential by successive Administrations. The Gov-
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ernment's policy on exports to the countries named is that we continue to withhold approval for the supply of equipment which we reason to believe might be used against the civilian population.
Mr. Bruce-Gardyne: In view of the £42½ million written answer from the Northern Ireland Office on Tuesday, which must rank as about the most expensive written answer in our history, would it be in order to debate the present and future of Harland and Wolff on any of the Northern Ireland business before the House next week, and, if so, which? If not, could we have a very early debate on this matter?
Mr. St. John-Stevas: It is not my function, Mr. Speaker, to rule on what is in order in a debate. My hon. Friend has a reputation for ingenuity, and I am sure that he will be able to raise any matter that he wishes in the Northern Ireland debates while remaining within the rules or order.
Mr. Edward Lyons: In view of the harsh inhumane treatment meted out to detainees in many parts of the world, will the right hon. Gentleman arrange for his right hon. Friend the Lord Privy Seal to make a statement next week on the Government's attitude towards the proposed international convention on torture?
Mr. St. John-Stevas: I shall certainly draw that matter to the attention of my right hon. Friend the Lord Privy Seal when he returns from Korea.
Mr. Cryer: Will the Leader of the House accept that the textile industry in the West Riding and Lancashire is in a very difficult situation? His answer last week to a request for a day's debate was not satisfactory, because a general debate does not enable a Minister to be made fully accountable by giving detailed answers to account for the Government's apparent indifference. The level of unemployment in the textile industry is increasing. In the first four months of this year there was a deficit of £200 million in textile goods. As a matter of urgency, for the third biggest employer in industrial manufacturing—clothing and textiles combined—may we have an early debate?
Mr. St. John-Stevas: I understand the hon. Gentleman's concern about the

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future of the textile industry, but we have had four debates recently on regional matters, one of which, certainly, could cover the point that the hon. Gentleman raised. Far from being indifferent to the textile industry, the Government have declared their intention not only of upholding the present multi-fibre arrangement but of seeing that when that expires in 1981 it is replaced by adequate measures to protect the industry.
Mr. Kenneth Lewis: May I ask my right hon. Friend when he himself wants to break for the Summer Recess, so that we may know when we shall break for it?—or shall we be told at the last minute?
Mr. St. John-Stevas: My hopes are that we shall rise some time in August. On this occasion my hopes are matched by my expectations.
Mr. Greville Janner: It the right hon. Gentleman aware that the present unemployment situation bears exceptionally heavily on handicapped people? Will he, therefore, allow a debate on the sort of situation that exists in Leicester where the careers service for handicapped people is being cut to the bone and one of the only two careers officers dealing especially with them is being sacked?
Mr. St. John-Stevas: I understand the importance of the point that the hon. and learned Gentleman raises. I cannot promise an early debate. On the situation in Leicestershire, I understand that the policy of the county council there is to concentrate on preserving the pupil-teacher ratio, and that is an aim of which I am sure the hon. and learned Gentleman will approve.
Mr. Kilroy-Silk: Three major reports on the prison service have been published recently—the May committee report, the White Paper response to the report of the Expenditure Committee, and the report of the parliamentary all-party penal affairs group, "Too Many Prisoners". Will the Leader of the House confirm that there will be an early opportunity to debate these, and that that debate will not take place on a Friday?
Mr. St. John-Stevas: I certainly confirm that there will be an early debate on this subject. I am most anxious to fit it
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in before we rise for the recess. I cannot give an undertaking that it will not be on a Friday. After all, Friday is a Government day now and, while I try to avoid having important debates on Fridays if I can, I cannot possibly rule out Friday because it might mean ruling out the debate.
Mr. Harry Ewing: Does the Leader of the House remember that during business questions last week he gave an undertaking that he would discuss with his right hon. Friend the Secretary of State for Scotland the possibility of making a very early statement on the future of teacher training colleges? Has the Leader of the House had that discussion? If so, what has been the outcome?
Mr. St. John-Stevas: Yes I have raised the matter with my right hon. Friend. He is still considering it.
Mr. Palmer: As a matter of fairness, will the Leader of the House give consideration to the possibility of a debate on the shabby and unfair treatment of the nationalised industries by the present Government?
Mr. St John-Stevas: That is an interesting point. I deny the premise of the hon. Gentleman's question and, therefore, his conclusion that flows from it.
Mr. Sheerman: Will the Leader of the House give some attention to the desire on both sides of the House for an early debate on the position of British exporting industries? This matter is much broader than merely textiles, engineering and chemicals. As many of us know, in all of the constituencies in which the brass of this country is made, industies that are good exporters in normal times are being cut down, and they cannot compete. We desperately need a debate on what the Government will do about our exporting industries.
Mr. St. John-Stevas: I am extremely interested in that question, as I represent a constituency that contains some of our major exporting industries. However, the matter that the hon. Gentleman raises is relevant to many of our debates, and I cannot promise a special discussion on it.
Mr. Marks: Is the Leader of the House aware that Ministers have tabled over

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80 amendments to the Youth and Community Bill, which is due to have its Report stage tomorrow? Are these to enable the very few hon. Members who disagree with the Bill to talk at length, or do they represent a genuine attempt to expedite and improve the Bill? If it is the latter, will the right hon. Gentleman ask his hon. Friends not to delay the Bill tomorrow? If it goes beyond tomorrow will he give time one night next week to enable the Bill to be completed?
Mrs. Kellett-Bowman: Just as they did for abortion.
Mr. St. John-Stevas: If my hon. Friends have tabled amendments to that Bill, it is obviously with the intention of improving it. There is no question about that. I hope that there will be a full debate on Friday, but I cannot promise time for that Bill. However, there is a chance for a further debate on the subject on Monday.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call those hon. Members who have been rising in their places. Mr. Eric Heffer. [Laughter.]
Mr. Heffer: Obviously favouritism.
Hon. Members: Oh.
Mr. Speaker: Order. I very rarely miss the hon. Member for Liverpool, Walton (Mr. Heffer), but has he not been rising?
Mr. Heffer: As a matter of fact, Mr. Speaker, I was beginning to think that it was doing my health a great deal of good for me to bounce up and down like a yo-yo, but I am not complaining.
Will the Leader of the House reconsider his reply to my right hon. Friend the Leader of the Opposition in relation to unemployment? Is the Leader of the House aware that Merseyside has 98,000 people unemployed out of a population of less than 1½ million? Is he aware that we are now faced with the problem of Cammell Laird not getting possible orders for ships? If the Cammell Laird shipyard went out of business it would mean utter destruction for Birkenhead and the people of Merseyside. Is it not time that we had a serious discussion about areas such as Merseyside, in which we shall have no industry, no employment, and poverty for our people unless something is done about the situation?
Mr. St. John-Stevas: I am aware of the special position in Merseyside. The whole country is going through a crisis in employment, caused by a world recession. By the assistance that the Government are giving to special areas they are showing that they are concerned about the matter. We hope that it will be a temporary phase and that unemployment will be reduced as the Government's policies come into operation.
Mr. Christopher Price: Last week the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) made a suggestion, which was repeated today by the hon. Member for Harborough (Mr. Farr), relating to statements made in this House under privilege and their possible consideration by the Committee of Privileges. Does the Leader of the House realise that if we are to enter into a system of that kind it needs to be even-handed between both sides of the House? Is he aware that some hon. Members regard previous statements that certain people have sympathy with the IRA—statements that have been unwithdrawn for a full year since they were made in the House—as far more serious allegations than any others that could possibly be made?
Mr. St. John-Stevas: The hon. Gentleman is being less than his normal helpful self. It is not in order to debate personal statements after they have been made. It is better to avoid trying to debate them before they are made.
Mr. Allan Roberts: On the question of unemployment in Merseyside, I am sure that it was an oversight by the Leader of the House that he did not announce a date for a debate on that matter. Does he realise that unemployment in Merseyside among active males is nearly 25 per cent.? Is he aware that, following statements by the Prime Minister and the Secretary of State for Industry, the people of Merseyside realise that unemployment is now not a consequence of the Government's economic policies but one of their main tools? They are using unemployment in lieu of an incomes policy to persuade people to accept cuts in wages.
Mr. St. John-Stevas: I do not think that that is so. Unfortunately, unemployment is rising throughout the industrial world, and the unemployment in

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Britain is part of that wider problem. There will be an opportunity for the hon. Gentleman and his hon. Friends to raise that matter in the Supply day debate on Monday.
Mr. Winnick: Will the Leader of the House find time next week for the House to be told why the wets in the Cabinet have refused to do anything to challenge the policies that are causing so much harm and unemployment in Britain at the present time? Should it not be expected that those members of the Cabinet who realise the harm being done by the monetarists should stand up and fight?
Mr. St. John-Stevas: I do not understand to what the hon. Gentleman is referring. The Cabinet is entirely united in supporting the Government's policies. My position remains neither wet nor dry, but that of the extreme centre.
Mr. Skinner: I hope that I can help the Leader of the House to be little more constructive on this matter. Is he aware that in the recent debate on the Second Reading of the Coal Industry Bill the spokesman who replied for the Government said that deficit financing would be introduced by 1983, but that that was a flexible date? Because the Venice summit has, since then, suggested that coal production should be doubled, and because the National Union of Mineworkers is meeting next week for its conference in Eastbourne, is it not a sensible idea that a statement should be made by the Secretary of State for Energy, either in Committee or in the House, to the effect that the clause that refers to removing grants will be taken out of the Bill, so that we can ensure that more coal is produced in Britain in line with the Venice declaration?
Mr. St. John-Stevas: If that matter is relevant to the Committee stage of the Bill it can be raised there. If that is so, it would not be in order to discuss it on the Floor of the House.

SELECT COMMITTEE ON EUROPEAN LEGISLATION
Mrs. Kellett-Bowman: On a point of order, Mr. Speaker. I wish to call attention to a 100 per cent. factual error in the 36th report from the Select Com-
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mittee on European legislation. The refund is £206 million, not £102 million, as stated. I did not want anyone to be misled by that error.

YOUTH AND COMMUNITY BILL
Mr. Marks: On a point of order, Mr. Speaker. In reply to my question on the Youth and Community Bill, the Leader of the House said that there would be time to debate the subject on Monday. He was referring to the fact that the sponsor of the Bill, the hon. Member for Bedford (Mr. Skeet), has drawn time to debate a motion on Monday. Is there anything in the rules of the House to prevent the hon. Member for Bedford from having a further debate on his Bill, provided the usual channels agree?
Mr. Speaker: The hon. Gentleman will know, as I know, that motions take precedence on Monday, and the motion may well run the full time.

INDUSTRIAL DISPUTES (SECONDARY BLACKING)
Mr. John Browne: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the need of this House to express its views on secondary blacking and boycotting before a final decision is taken in another place on the provisions of clause 17 of the Employment Bill."
The specific issue is the provisions of clause 17 covering secondary blacking or boycotting. It is a vitally important matter for the future of industrial relations in Britain—not only to achieve industrial peace, but to achieve reasonable fairness, and to enhance investment and profitability in the manufacturing base of our economy.
The matter is urgent because it appears that amendments to the clause may not be made in another place. That means that the House will have no further opportunity to debate the subject before it becomes law—
Mr. Campbell-Savours: On a point of order, Mr. Speaker—
Mr. Speaker: Order. Technically, the hon. Member for Winchester (Mr. Browne) is on a point of order. I think that he is on his last sentence.
Mr. Browne: The Government presented this subject to the House at the very last minute in a clause that is so complex that few right hon. and hon. Members fully understood its implications. The right hon. Members for Doncaster (Mr. Walker) and Chesterfield (Mr. Varley) confirmed that in their remarks, on Report, I think that many hon. Members feel hoodwinked, and that the vital clause passed the House without the due consideration that it deserved—
Mr. Speaker: Order. I am being very patient, but the hon. Gentleman's speech is getting near an abuse of the Standing Order. I hope that he will now come to a conclusion, and I shall then give him my conclusion.
Mr. Browne: My conclusion is that the clause received insufficient debate in the House. My appeal through you, Mr. Speaker, is that it should be returned to the House for discussion.
Mr. Speaker: The hon. Member for Winchester (Mr. Browne) gave me notice this morning before 12 o'clock that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the need of this House to express its views on secondary blacking and boycotting before a final decision is taken in another place on the provisions of clause 17 of the Employment Bill."
In informing the hon. Gentleman that I cannot submit his application to the
1776
House, I wish to say to the whole House that this sort of application could occur on every measure that passes through the House. I hope that, in general, hon. Members will note that Standing Order No. 9 is for very special occasions.

PERSONAL STATEMENT
Mr. Speaker: Before I call the hon. Member for Birmingham, Perry Barr (Mr. Rooker) to make a personal statement, I remind the House that personal statements are not followed by questions or debate and are heard without interruption.
Mr. Rooker: Mr. Speaker, during the course of the debate on Lords amendments to the Industry Bill on Wednesday 18 June, I made allegations with respect to the purchasing policy of Rolls-Royce regarding certain machine tools. In that speech, I made specific reference to allegations, which I repeated, in respect of a Rolls-Royce employee, Mr. Frank Turner.
I repeated the allegations on the basis of information supplied in good faith. On the basis of all the information supplied, I considered that the whole issue should be raised here in the public interest.
It is now clear that neither those who supplied the information nor myself are in any position to substantiate the allegations in respect of Mr Turner, and I hereby withdraw without qualification the references which I made to him in columns 1684 and 1685 of Hansard for 18 June.
I offer my sincere apologies to Mr. Turner, his family, his close colleagues and the House.

ORDERS OF THE DAY

  LOCAL GOVERNMENT, PLANNING AND LAND (No. 2) BILL
  As amended (in the Standing Committees), considered.
  4.2 pm
  Mr. Dafydd Wigley: On a point of order, Mr. Speaker. May I raise with you the matter of the selection of amendments for Report, particularly with regard to new clauses 22, 23 and 24 and amendments Nos. 234 and 235? I have, of course, written to you about this matter, and naturally I accept the ruling of the Chair. These amendments are of considerable importance in Wales. They relate to the vexed question of second and holiday homes, which regrettably has been a subject of unfortunate incidents which in recent months have been condemned in all parts of the House.
  On 20 December, my hon. Friend the Member for Merioneth (Mr. Thomas) and myself attended a meeting at the Welsh Office to discuss the methods by which the House might address itself to how some of the problems in Wales might be overcome. It was suggested to us that the Housing Bill, which was then before Parliament, and the Local Government, Planning and Land (No. 2) Bill were two possible avenues.
  As a consequence, my hon. Friend tabled amendments to the Housing Bill, but they were not selected because, we understand, this was deemed to be a more appropriate subject for a planning Bill, and such a Bill was before Parliament. It is for that reason that we have tabled these amendments. We referred to our intention to do so during the Second Reading debate on 5 February, as reported in column 338 of Hansard.
  Unfortunately, no member of my party and no hon. Member from Wales served on the Committee. Of course, my party has no opportunity of moving amendments in another place either. There is a feeling in Wales that Parliament should address itself to these matters at the earliest opportunity. They are extremely serious, and if they are delayed for another year or two it could have drastic consequences. Of course, this issue goes beyond Wales. There have been prob-
  1778
  lems in the Lake District, and just before Christmas a planning appeal involving Poole council related directly to this question.
  Although I realise that it may not be possible to include these amendments for today's discussion—presumably, amendments Nos. 234 and 235 will be discussed later—I ask whether it is possible for you, Mr. Speaker, to reconsider your selection.
  Mr. Speaker: I am obliged to the hon. Member for Caernarvon (Mr. Wigley) for the way in which he has raised his point of order. He rightly said that we have been in correspondence on this matter. He will be aware that I am deeply conscious of its importance. No one can live in Wales without being conscious of the importance of these issues.
  Naturally, I spent a long time considering the selection of amendments for this Bill, just as I did when I originally considered the amendments of the hon. Gentleman and his colleague the hon. Member for Merioneth (Mr. Thomas). I gave the matter further consideration when I received his letter. I do not want to raise false hopes that I will be able to select the amendments at a later stage, but, of course, I shall look at this again, as the hon. Gentleman has invited me to do.
  Mr. R. C. Mitchell: On a point of order, Mr. Speaker. In your wisdom, you have not selected new clauses 26, 27, 28 and 29, in which I have a particular interest, presumably because in your judgment the contents of those new clauses do not fall within the long title of the Bill. I am in no way querying that.
  However, we are now faced with a difficulty, because we have a Bill in which quite a number of clauses—without the amendments or anything else—fall outside the provisions of the long title. For example, the first line of the long title refers to the relaxation of "controls over local government". But quite a number of the clauses do exactly the opposite and, in fact, increase controls over local government. I should like to give one example. I shall not bore the House, although I could give dozens of examples. Part VIII does the exact opposite.
  The only reason why I raise this question now rather than later is that I have

  1779
  always understood that the contents of a Bill had to fall within its long title. I submit that quite a lot of this Bill does not do so.
  Mr. Speaker: All that I can say to the hon. Gentleman is that I am satisfied that everything that I have selected is in order. I say nothing about those amendments that I have not selected, because obviously the House does not ask me to give reasons why I have selected one amendment and not another. However, I shall, of course, consider what the hon. Gentleman has said.
  Mr. Mitchell: Further to that point of order, Mr. Speaker. In case there is any misunderstanding, may I say that I do not complain about your selection of amendments. My point relates to the contents of the Bill as it has been presented to the House. I am querying whether many of the existing contents of the Bill come within the long title.
  Mr. Speaker: As the hon. Gentleman knows, the long title is a description of the Bill. It does not completely decide the scope of the Bill. He had better work that out over a cup of tea in the Tea Room.

  LOCAL GOVERNMENT, PLANNING AND LAND (No. 2) BILL
    New Clause 1

      ANNUAL BALANCE SHEET, ETC.
      '(1) Every local authority who in any financial year undertake construction or maintenance work, whether under works contracts or by way of functional work or both, and every development body who in any financial year undertake construction or maintenance work by way of functional work, shall prepare the documents mentioned in subsection (2) below not later than 30th September in the financial year following that year.
      (2) The documents are—

      (a) a balance sheet;

      (b) a revenue account;

      (c) a statement of rate of return.

      (3) The balance sheet must show a true and fair view of the state of affairs of the local authority or development body, at the end of the financial year to which it relates, in respect of each description of construction or maintenance work undertaken by them in that year.
      (4) The revenue account must show a true and fair view of the financial result of the local authority or development body having undertaken, in the financial year to which it relates, each description of construction or maintenance work to which it relates.
      (5) The statement of rate of return must give such information as is necessary to show
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      whether, in respect of the financial year to which it relates, the local authority or development body have complied with section 12(1) below.'.—[Mr. Fox.]
      Brought up, and read the First time.
      The Under-Secretary of State for the Environment (Mr. Marcus Fox): I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this we may take Government amendments Nos. 46 and 49.
      Mr. Fox: This new clause is needed to replace the present clause 9(1), which is defective, and which was rightly criticised in Committee as being insufficiently specific. The new clause makes it clear that authorities that run direct labour organisations will, like the private commercial firms with which they will be in competition, have to produce annual balance sheets and annual accounts which show
      "a true and fair view"
      of their trading situation and financial results.
      The notion of a true and fair view of their performance is a new one to most local authorities, but it is a familiar requirement in the Companies Acts in the private sector and it is familiar in the public sector to managers of nationalised industries and new town development corporations. Now that we are setting up direct labour organisations with separate trading accounts it seems only sensible that, so far as possible, those accounts should be kept on bases that make easy comparison with private contractors.
      This new requirement is, of course, restricted to the DLO accounts. It does not imply a wholesale change in the conventions under which the generality of local authority accounts are kept, and it does not imply any change in the role of the local government auditor. It simply means that DLOs—operating, we hope, in a businesslike and commercial way and in a competitive and commercial environment—will keep their accounts in a commercial fashion which enables their performance readily to be judged.
      The two Government amendments are related to the new clause. The first is a paving amendment to remove clause 9(1), which the clause replaces. The second is consequential, to include the clause in the

      1781
      list of the accounting clauses in this part of the Bill which are not to be allowed to prejudice the general provisions of the local government Acts under which the local authority accounts are regulated.
      Mr. Gordon Oakes: We welcome the fact that the Government have tidied up the language. There was very reasonable criticism in Committee of the type of language used with regard to direct works organisations. It was unclear. The proposed language is clearer than the original wording, and for that we are very grateful. We have no intention, therefore, of opposing the clause.
      There is one thing that I should like the Minister to explain very briefly to the House. Subsection (4) of new clause 1 contains the words
      "each description of construction or maintenance work to which it relates."
      We are much opposed to the fact that certain clauses in the Bill cover such things as gritting, snow clearing and maintenance work. How detailed do the Government expect the annual balance sheet to be? A good deal of local government manpower could be involved in making an annual statement dealing with each individual item of snow clearance, or whatever it might be. Surely a blanket item could be put in relating, for example, to snow clearance for the whole year.
      I am sure that the Government will welcome the fact that I am seeking to ensure that local government manpower should not be employed needlessly in giving too detailed descriptions of the sort of work that has taken place.
      Mr. Paul Dean: I have to express some misgivings about the new clause and the thinking behind it. I had a meeting last weekend with some of my county councillors from Avon county council, and with district councillors from Wansdyke district council and Woodspring district council.
      They raised the matter of the new clause and their misgivings about the Government's policy for the control of direct labour organisations generally. In essence, they were saying that they were loyal supporters of the Government, that they were doing their best to carry out Government policy, that they were cutting local authority expenditure, that they were economising on staff, that they were doing
      1782
      their utmost to keep down their rates, but that they had strong feelings that the Government's policy in the new clause—and in the Bill as a whole—involved loyal local authorities getting the stick, as it were, along with other local authorities which were deliberately trying to defy the Government and to wreck their policies.
      They feel that the new clause and other clauses in the Bill involve new controls and regulations being imposed on local authorities, and that the Government are using a blunt instrument rather than a sharper weapon against the few who are deliberately trying to undermine Government policy. I do not go all the way with this view, but these feelings are strongly held and they are sapping the morale of Conservative-controlled councils which are doing their untmost to be loyal to the policies of the Government. The Government should take these feelings extremely seriously.
      I accept that public expenditure has to be controlled and that local authority expenditure is a very large part of it. I also accept that the Government have gone some way in the new clause—and others that will be discussed later—to meet the misgivings expressed by the local authority associations. But it seems to me that the arguments put forward in particular by the Association of District Councils—of which I am one of the vice-presidents—have not been adequately dealt with so far by my hon. Friend.
      I hope that my hon. Friend will be able to deal with some of these points, and in particular with the point that is being made that the new tendering arrangements will mean substantial changes in the accountancy methods that local authorities will have to employ, and that this will mean additional staff having to be employed.
      I believe that these are arguments of substance that the Government have not so far entirely met. I hope that my hon. Friend will be able to reassure me and the House on these and similar matters.
      4.15 pm
      Mr. Fox: I must tell my hon. Friend the Member for Somerset, North (Mr. Dean) that we have had a continuing dialogue with all the local authority associations. We found it impossible to

      1783
      answer to their satisfaction certain questions about the Bill, but as the Bill progresses I hope that my hon. Friend will realise that in all we are seeking to do we are trying to be fair and reasonable.
      I shall restrict my remarks to the new clause. The other matters, such as tendering, will be covered in later amendments. If the hon. Gentleman's own local authority is as efficient as he has indicated, I can only suggest that what we are proposing here will not make any difference to it. I cannot believe that any hon. Member would oppose having sensible accounting procedures as the norm.
      I thank the right hon. Member for Widnes (Mr. Oakes) for his kind remarks about the changes that have been introduced in the new clause. We are at this moment talking to the Chartered Institute of Public Finance and Accountancy in order to achieve exactly what he wants—the simplest possible system of accounting. I give him that assurance.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 2

      RIGHT OF COUNCILLOR TO OPT FOR FINANCIAL Loss ALLOWANCE
      '(1) In section 173 of the Local Government Act 1972 (attendance allowance and financial loss allowance) at the end of subsection (1) (right of member of local authority who is a councillor to receive attendance allowance) there shall be added the words "unless a notice under section 173A below is effective in relation to him".
      (2) The following section shall be inserted after that section:—
      "Right to opt for financial loss allowance
      173A.—(1) If a councillor gives notice in writing to the local authority of which he is a member that he wishes to receive financcial loss allowance, he shall be entitled, subject to and in accordance with the following provisions of this section, to receive that allowance instead of any payment by way of attendance allowance to which he would otherwise be entitled.
      (2) A notice under this section is referred to in this section as a 'financial loss allowance'.
      (3) If a councillor gives a financial loss allowance notice to the local authority not later than the end of the period of four weeks from his election as a member of the authority, he shall be entitled to receive financial loss allowance for the performance of any approved duty since his election, whether performed before or after the giving of the notice.
      (4) If a councillor who has not given the local authority a financial loss allowance notice in accordance with subsection (3) above gives them such a notice not less than three months before the beginning of a financial year, he shall be entitled to receive financial loss allowance for the performance of any approved duty performed not earlier than the beginning of that financial year.
      (5) A financial loss allowance notice shall continue to have effect until the councillor ceases to be a member of the local authority or until a notice under
      subsection.(6) below takes effect, whichever occurs first.
      (6) If not less than three months before the beginning of a financial year a councillor who has given the local authority of which he is a member a financial loss allowance notice gives them notice in writing that he withdraws that notice, he shall be entitled to receive payments by way of attendance allowance, instead of financial loss allowance, for the performance of any approved duty after the beginning of the financial year following the giving of the notice.
      This section does not extend to Scotland".'.—[Mr. King.]
      Brought up, and read the First time.
      The Minister for Local Government and Environmental Services (Mr. Tom King): I beg to move, That the clause be read a Second time.
      The clause is in response to an amendment that was tabled in Committee. It has the support of all the local authority associations. Its effect is that it will now be possible for the option of financial loss allowance to be possible as well as attendance allowance. It will apply to England and Wales but not to Scotland, because the Confederation of Scottish Local Authorities decided that it did not wish to have that option. For that reason, it was not imposed on those authorities.
      I want to make it clear that if a councillor receives one of the new special responsibility allowances under clause 20 of the Bill it will not affect his right to claim financial loss allowance under the new clause. Councillors in positions of special responsibility will have duties over and above the approved duties normally recognised by their councils for allowance purposes. Special responsibility allowances will relate to those additional duties; they will therefore be separate from any financial loss or attendance allowance that a councillor is entitled to claim.
      Financial loss allowance is not taxable, unlike attendance allowance. For

      1785
      that reason, the change may involve a certain amount of cost to the Exchequer. The Government will therefore in due course be observing the effect of giving the option. The Committee felt that it was a sensible option to allow. I know that the right hon. Gentleman on the Opposition Front Bench are in favour of it. I am therefore pleased to be able to introduce it.
      Mr. Neil Thorne: My right hon. Friend knows that I am interested and concerned about this matter because of my previous service on the Greater London Council. There, I experienced the very heavy work load of a board chairman. The work load there is not too dissimilar to the work load of a Back-Bench Member here. I am concerned that authorities such as the GLC should be taken into account, and I hope that the Minister can assure me that some element of general expenses, above the financial loss allowance, will be available to councillors in this case. I hope that when the new attendance allowances are introduced the increase will be substantial, because they seem to have fallen well behind what is at present required.
      Mr. Roy Hattersley: I shall detain the House for only a moment to welcome the Government's proposal. The Government have met the wishes of the Committee, and I express my gratitude to them. Almost everyone who has served on a local authority makes a financial sacrifice by doing so. They will continue to make sacrifices, but, thanks to this clause, in many cases the sacrifices will not be as great. We should welcome the clause on behalf of the many thousands of men and women who serve in local authorities.
      Dr. Alan Glyn: Everyone who has served on local authorities recognises that there is a financial loss. I was not clear on the point of tax-free allowances. How can they be balanced against the losses of earnings of councillors? Many considerations have to be taken into account, such as the councillor being in a different tax bracket, and so on. Will my right hon. Friend clarify that point?
      Mr. Bruce Millan: The new clause does not extend to Scot-
      1786
      land. The Minister said that that was because COSLA did not wish it to be extended to Scotland. I accept that. Nevertheless, it is unsatisfactory, and I am surprised that COSLA took that view. For a considerable time, COSLA has been dissatisfied with the present system of attendance allowances. I had discussions with COSLA when I was Secretary of State and I had sympathy with many of its points.
      Under this clause there is a straight option for individual councillors. Therefore, no councillor could possibly be worse off, but certain councillors could be better off. If the Government would agree to a revision of the present situation and come up with a solution that would be acceptable to COSLA. I understand that it would be sensible to leave the clause as it stands. But it is unlikely that the Government will make a wholesale revision of the system in Scotland, and make Scottish councillors better off than English councillors. But if that does not happen, Scottish councillors will be worse off than English councillors if the clause is not extended to Scotland.
      I am not critcising the Government, because if they have had advice from COSLA they obviously feel disposed to accept it. I hope that COSLA will reconsider the matter. It would be a considerable mistake for councillors in Scotland not to have this option. I repeat that no one could be worse off, but many people could be better off.
      Mr. King: I listened with interest to the remarks of the right hon. Member for Glasgow, Craigton (Mr. Millan), but I am sure that he does not expect me to comment. In some ways I have shared his surprise, but the Government have accepted the information and advice of COSLA, and it is now a matter for my right hon. Friend the Secretary of State. As the right hon. Gentleman said, this clause merely extends an option to individual members.
      My hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) raised the issue of financial loss allowance. It is an option. The individual member then has to persuade the Inland Revenue that he has suffered a loss. There is a ceiling on the loss that he can claim. At present it is £14, as opposed to the attendance allowance of

      1787
      £13, so it is not open-ended in that respect I hope that I have clarified my hon.
      Dr. Glyn: I am grateful to my hon. Friend for clarifying that point. Friend's point.
      Mr. King: I understand the point raised by my hon. Friend the Member for Ilford, South (Mr. Thorne). We are reviewing the question of the attendance allowance, and the circumstances that he raised will be covered in our consideration of the matter.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 3

      SUSPENSION OF PROVISION FOR LIABILITY TO PROGRESSIVE SURCHARGE IN RESPECT OF UNUSED OFFICE ETC. PROPERTY
      The Secretary of State may by order direct that section 17A (surcharge in respect of unused property) and 17B of the 1967 Act (supplemental provisions as to section 17A) shall cease to have effect.
      If an order is made under subsection (1) above, the Secretary of State may by order again bring sections 17A and 17B of the 1967 Act into force.
      (3) An order under this section may make such incidental, supplemental and consequential provision as appears to the Secretary of State to be expedient for the purposes of the order.
      (4) The power to make such an order shall be exercisable by statutory instrument.
      (5) A statutory instrument containing such an order shall be subject to amendment in pursuance of a resolution of either House of Parliament.'.—[Mr. King.]
      Brought up, and read the First time.
      Mr. King: I beg to move, That the clause be read a Second time.
      This clause involves suspension by order of the surcharge on empty commercial property. It was discussed in Committee, and I announced then that we would introduce a new clause. In effect, this is a dead letter. The local authorities support the introduction of this measure and, as it has already been discussed in Committee, I hope that the House will agree that it does not need further amplification. I commend it to the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 4

      RATING OF UNOCCUPIED PROPERTY
      '(1) Schedule 1 to the 1967 Act (rating of unoccupied property) shall be amended as follows.
      (2) In sub-paragraph (1) of paragraph 1, for the words "three months" there shall be substituted the words "the standard period".
      (3) The following sub-paragraphs shall be inserted after that sub-paragraph:—
      "(1A) In this Schedule 'the standard period' means three months or such other period as the Secretary of State may by order specify.
      (1B) An order under sub-paragraph (1A) of this paragraph may specify different periods in relation to different classes of hereditament.".
      (4) The following sub-paragraphs shall be substituted for sub-paragraph (2A) of that paragraph:—
      "(2A) Subject to the provisions of this Schedule, the amount of any rates payable by the British Gas Corporation in respect of a shop, room or other place by virtue of this paragraph shall be the specified proportion of the amount which would be payable if the Corporation were in occupation of it and it were being used by the Corporation wholly or mainly for the sale, display or demonstration of apparatus or accessories for use by consumers of gas.
      (2B) Subject to the provisions of this Schedule, the amount of any rates payable by an Electricity Board in respect of a shop, room or other place by virtue of this paragraph shall be the specified proportion of the amount which would be payable if the Board were in occupation of it and it were being used by the Board wholly or mainly for the sale, display or demonstration of apparatus or accessories for use by consumers of electricity.
      (2C) No reduction shall be made under section 48 of this Act in respect of any rates payable by an owner by virtue of this paragraph.
      (2D) In this paragraph 'the specified proportion', in relation to a hereditament, means such proportion (not more than the current ceiling) as may be specified for the purposes of this paragraph by a resolution of the rating authority for the rating area in which the hereditament is situated; and different proportions may be so specified in relation to different classes of hereditment and in relation to hereditaments in different parts of the rating area.
      (2E) Subject to sub-paragraph (2F) of this paragraph, in sub-paragraph (2D) of this paragraph 'the current ceiling' means the whole of the amount of rates which, disregarding section 48 of this Act, would be payable by the owner if he were in occupation of the hereditment and, in a case to which sub-paragraph (2A) or sub-paragraph (2B) of this paragraph applies, if the hereditment were being used as mentioned in that sub-paragraph.

      1789
      (2F) Subject to sub-paragraph (2G) of this paragraph, the Secretary of State may from time to time by order vary the proportion of the amount mentioned in sub-paragraph (2E) of this paragraph which is to be the current ceiling for the purposes of this paragraph.
      (2G) No order under sub-paragraph (2F) of this paragraph may so vary that proportion as to make the current ceiling exceed the whole of the amount mentioned in sub-paragraph (2E) of this paragraph.
      (2H) Different proportions may be specified under sub-paragraph (2F) of this paragraph in relation to different classes of hereditament and in relation to hereditaments in different rating areas."
      (5) In sub-paragraph (3) of that paragraph, for the words "any period of three months during which the hereditament has been continuously unoccupied" there shall be substituted the words "whether the hereditament has been continuously unoccupied for the standard period".
      (6) In sub-paragraph (4) of that paragraph—

      (a) for the words "three months" there shall be substituted the words "the standard period"; and

      (b) for the words "six months" there shall be substituted the words "the new house period".

      (7) The following sub-paragraph shall be inserted after that sub-paragraph:—
      "(5) In sub-paragraph (4) of this paragraph 'the new house period' means six months or such other period as the Secretary of State may by order specify.
      (6) A statutory instrument containing an order under this paragraph shall be subject to annulment in pursuance of a resolution of either House of Parliament.".
      (8) In paragraph 2 of that Schedule for the words "three months" there shall be substituted the words "the standard period".
      (9) The following paragraph shall be inserted after paragraph 4 of that Schedule:—
      "4A.—(1) Subject to the provisions of this paragraph, section 40 of this Act shall also apply in relation to any relevant hereditament to which it did not apply when it was last occupied if—

      (a) it is owned by, or by trustees for, a charity; and

      (b) they give notice as mentioned in sub-paragraph (2) below.

      (2) The notice is a notice in writing to the rating authority tht it is intended that the hereditament shall be wholly or mainly used for charitable purposes (whether of the charity which owns it or of that and other charities).
      (3) Subject to sub-paragraph (4) below, section 40 of this Act shall cease to apply to a hereditament by virtue of this paragraph on the expiry of a period of two years—

      (a) from the date on which the trustees became the owners of the hereditament; or

      (b) from the passing of the Local Government, Planning and Land Act 1980,

      whichever is the later.
      (4) Section 40 of this Act shall cease to apply to a hereditment by virtue of this paragraph if the trustees—

      (a) cease to own it; or

      (b) cease to have the intention specified in the notice".

      (10) The following definitions shall be substituted for the definition of "relevant period of vacancy" in paragraph 15 of that Schedule:—
      "relevant period of vacancy", in relation to a relevant hereditament means any period during which the hereditament has been continuously unoccupied, beginning with the unoccupied rating day and ending with the day preceding that on which the hereditament becomes or next becomes occupied or ceases to exist; and
      "unoccupied rating day", in relation to a relevant hereditament, means—

      (a) if the hereditament is a newly erected dwelling-house, the day following the end of the new house period (as defined in sub-paragraph (5) of paragraph 1 of this Schedule); and

      (b) in any other case, the day following the end of the standard period (as defined in sub-paragraph (1A) of that pragraph);'.—[Mr. King.]

      Brought up, and read the First time.
      Mr. King: I beg to move, That the clause be read a Second time.
      This is the other new clause that deals with the issue of empty property rating. I announced our proposals in Committee. The new clause gives the Government greater flexibility, in that we can make an order to review the maximum level at which empty property rating can be set. There was general agreement that this was the right way to move. The previous Government were concerned about the issue and they issued a circular calling for action. We are giving effect to the proposals in that circular.
      The new clause deals also with an anomaly in respect of gas and electricity showrooms, and it gives relief to empty properties acquired by charities.
      Mr. Stephen Ross: I welcome the new clause, but it is extremely complicated. I have read it many times, and I hope that it will have the desired effect. Statutory undertakers seem to come first, and I am pleased that charities are covered. Will a statutory instrument be presented to the House on the Government's decision? Is it the Government's intention to deal expeditiously with the matter? Many owners of empty property who are desperately trying to sell those properties are having to pay penal rates and they

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      should be given relief as soon as possible. I am really fishing. I do not understand the whole of the verbiage in the new clause. I trust that it is the intention to act quickly in this matter.
      4.30 pm
      Mr. R. C. Mitchell: I have a small query to raise. This is a complicated matter. Subsection (3)(1B) provides that
      "An order under subparagraph (1A) of this paragraph may specify different periods in relation to different classes of hereditament."
      Will the Minister explain what is meant by "different classes of hereditament"? Does it refer to the classes used in planning law? What does the word "classes" mean in this context? Presumably the Minister cannot make an order for some houses for six months and for others for three months. Will he explain what it means?
      Mr. King: Referring first to the point made by the hon. Member for Isle of Wight (Mr. Ross), the answer is that it will be by order laid before the House, we hope this autumn, and will come into effect in April 1981.
      Mr. Stephen Ross: The clause also covers new properties remaining unoccupied. That is an important point. I thank the Minister for dealing with that issue.
      Mr. King: It will be introduced by order.
      Turning to the point made by the hon. Member for Southampton, Itchen (Mr. Mitchell), "different classes" does not apply to domestic housing. The "different classes" might be commercial as opposed to industrial. It is an attempt to apply different classes to different areas because different considerations might apply.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 5

      EXPENDITURE OF GREATER LONDON COUNCIL
      Schedule [Expenditure of Greater London Council] to this Act shall have effect.—[Mr. Fox.]
      Brought up, and read the First time.
      Mr. Fox: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Richard Crawshaw): With this we may take Government amendments Nos. 136, 151, 218, 231, 281 and 286.
      Mr. Fox: The purpose of the new clause and these amendments is to integrate the capital expenditure of the Greater London Council with the controls of part VIII of the Bill over prescribed expenditure, while at the same time allowing the GLC to continue to seek the approval of Parliament to the council's capital expenditure under the annual Money Bill procedure.
      We have been impressed by arguments by the council itself and by hon. Members on both sides of the House to the effect that the GLC's position differs from that of other local authorities in three important ways. First, its borrowing and expenditure on capital account have already been subject to parliamentary control, through the annual Money Bill procedure, for the past 100 years or so. Secondly, the council's budget and the amount of its borrowing are both exceptionally large. Its expenditure on capital account is about £400 million a year. Thirdly, London itself is of unique strategic importance in the United Kingdom.
      On the other hand, it would not be right simply to exclude the GLC from the new capital expenditure controls, because the Money Bill procedure controls only "expenditure on capital account". This does not cover capital expenditure charged to revenue—about £30 million for the GLC in 1978–79—or the acquisition of capital assets by means such as leasing. The Bill aims to control all capital expenditure by local authorities, no matter how such spending is financed.
      The Government have reached the conclusion that the right course is for the GLC's capital expenditure to continue to be controlled through the annual Money Bill system but for the Money Bill arrangements to be brought in line with the control that is to be applied by the Bill to all other local authorities' capital spending.
      These proposals, therefore, are designed to do two things: first, to remove the GLC from the scope of part VIII of the

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      Bill, but, secondly, to alter the London Government Act 1963 in such a way that control over the GLC's capital spending is brought into line with the discipline that is to apply to local authorities generally. In particular, they give the council power to switch the provisions in the Money Bill between services and permit a specific control to be exercised over projects of national or regional importance.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 6

      PLEASURE BOATS
      (1) Subject to the provisions of this section, any of the following authorities, namely—

      (a) a district council;

      (b) a London borough council;

      (c) the Common Council of the City of London,

      may make byelaws—

      (a) for regulating—

      (i) the numbering and naming of pleasure boats and vessels which are let for hire to the public; and

      (ii) the mooring places for such boats and vessels; and

      (b) for fixing the qualifications of the boatman or other persons in charge of such boats or vessels; and

      (c) for securing their good and orderly conduct while in charge.

      (2) No authority mentioned in subsection (1) above shall have power to make byelaws under that subsection in relation to pleasure boats or vessels operating—

      (a) on any water owned or managed by the British Waterways Board;

      (b) on any inland waters, as defined in section 135(1) of the Water Resources Act 1963, in respect of which a water authority may make byelaws under section 79 of that Act;

      (c) subject to subsection (3) below, on any canal or other inland navigation which a navigation authority, as defined in section 135(1) of the Water Resources Act 1963, are required or empowered to manage or maintain under any enactment; or

      (d) on any harbour maintained or managed by a harbour authority, as defined in section 57(1) of the Harbours Act 1964.

      (3) Subsection (2)(c) above does not preclude a local authority making byelaws under subsection (1) above in relation to pleasure boats or vessels operating on any canal or inland navigation which they themselves are required or empowered to manage or maintain.—[Mr. Fox.]
      Brought up, and read the First time.
      Mr. Fox: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this we may take Government amendments Nos. 225, 285 and 287.
      Mr. Fox: In presenting this new clause and these consequential amendments to the House, I am fulfilling an undertaking that I gave to Standing Committee D during its consideration of paragraph 2 of schedule 6 on 19 February. That paragraph was included in the Bill following the Government's review of central Government controls over local authorities because they would have removed the need for local authorities to submit byelaws to my right hon. Friend the Secretary of State for the Home Department every time they wished to fix rates of hire for pleasure craft under section 172 of the Public Health Act 1875.
      Following publication of the Bill in January 1980, however, we received representations from numerous holiday boating firms and other inland waterways interests about the detrimental effect which unfettered or, indeed, any controls over rates of hire would have on the boat hire business. They also drew attention to the fact that those provisions would enable local authorities to make byelaws to regulate pleasure boats and vessels let for hire on waterways and waters controlled by other bodies, such as the British Waterways Board and navigation authorities, and argued that their circumstances could not have been envisaged when the original Act was passed.
      Following consideration of these representations, we came to the conclusion that we should amend the Bill to preclude local authorities from having any powers to fix rates of hire for pleasure boats. In our view, there were no grounds for refusing to treat the boat hire industry like any other business enterprise and to leave the fixing of rates of hire to be determined by free competition and the normal market factors of supply and demand.
      We also concluded that the Bill should be amended to preclude local authorities from exercising their remaining powers to regulate pleasure boats under section 172 of the Public Health Act 1875 in respect of boats on waters where such boats

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      could already be regulated by the British Waterways Board or by any water, navigation or harbour authority. As the House will appreciate, it would be unnecessary and undesirable to allow local authorities to exercise this power where another authority already has adequate power to ensure public safety.
      That led me to undertake to introduce suitable amendments to implement these proposals, and that I am now pleased to do.
      Mr. Eldon Griffiths: I entirely share my hon. Friend's desire that there should be the maximum freedom for boat owners and renters to use our waterways as they choose without too great a degree of regulation. I am sure that many local authorities have far too much to do with being involved in impeding people's use of their boats for pleasure and navigation.
      However, I should be glad of further clarification on one narrow point. Some years ago I had something to do with local authorities and boats. There is the problem of large concentrations of boats depositing large quantities of sewage in still waters with consequential pollution and nuisance to those who either sail the waters or live in the vicinity.
      I should like to be clear that my hon. Friend adheres to the policy that pleasure boats are to be required to have suitable toilets installed and that it will still be within the power of local authorities or, as need be, other navigation authorities—such as the Broads authority, the British Waterways Board and other water authorities—to ensure that boats comply with the minimum requirement of providing toilet facilities so that they do not foul up the water and damage the pleasure and environment for other people.
      Sir Albert Costain: I welcome the new clause. However, I should like my hon. Friend to clear up one small point, because the clause is somewhat complicated. It seems to give and to take away powers at the same time. Will my hon. Friend confirm that it does not restrict local authorities on water safety? There are a great number of unnecessary accidents. For example, there is a very live water safety committee in my constituency. I should like to be assured that the new clause will not restrict its activities.
      Dr. Glyn: I endorse the remarks made by my hon. Friend the Member for Folkestone and Hythe (Sir A. Costain). In my constituency there are large stretches of waterway. It is obvious that we should continue to ensure that there are adequate provisions—which I am sure exist in other Acts—to prevent the pollution of water by boats. I do not think the provision will impede existing powers. We are only removing unnecessary restrictions on boat owners, which would have been very difficult to impose.
      Mr. Fox: I reassure my hon. Friends that nothing in the new clause will worsen the situation as regards sewerage and the provision of toilet facilities. I reassure my hon. Friend the Member for Folkestone and Hythe (Sir A. Costain) that nothing in the provision will impinge on existing safety regulations. I also note the comments of my hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn).
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 8

      OFF-LICENCES: SPECIAL PROVISIONS TO CEASE
      (1) Part VI of the 1964 Act (licensing in new towns) shall cease to have effect in relation to the licensing of premises in new towns by way of a justices' off-licence.
      (2) References in Part VI of the 1964 Act to licensed premises and to a justices' licence shall be construed accordingly.
      (3) In consequence of subsection (1) above, the following provisions of the 1964 Act shall be omitted, namely, sections 112(1)(a)(ii) and (b)(ii) and in section 112(5) the words "or licensed premises".
      (4) Nothing in this section affects the operation of section 111 of the 1964 Act as respects an application made before the date on which this section comes into force or made at the licensing sessions next held after that day.
      (5) Where the Development Board for Rural Wales is responsible under the Development of Rural Wales Act 1976 for the development of a new town, this section and section (Power to end Special Licensing Provisions) below shall apply as if the Board were the development corporation for the new town.—[Mr Guy Barnett.]
      Brought up, and read the First time.
      Mr. Guy Barnett: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this we may take new clause 9—Power to end special licensing provisions.
      Mr. Barnett: I have been encouraged to put forward these provisions as similar clauses appeared in the original draft in the other place. However, they were subsequently excluded from the Bill presented in this House on the ground that the Government needed to shorten the Bill so that it could pass through all its stages in this Session.
      However, the Government cut out of the Bill several provisions which are non-controversial and which would be welcomed in certain places. That is certainly true of these new clauses. In principle, the Government are in favour of these amendments to the law. In addition, the New Towns Association asked me to present the two new clauses, and it speaks of unanimity among new towns.
      The two new clauses would make a number of changes to the system laid down in the Licensing Act 1964 for the provision of licensed premises and off-licences in new towns, which is at present administered by new towns licensed premises committees. New clause 8 provides for the removal of the off-licences jurisdiction of licensed premises committees and enables it to be restored to the licensing justices.
      4.45 pm
      New clause 9 will enable the Secretary of State—in this case the Home Secretary—to abolish a licensed premises committee by statutory instrument on the joint application of the committee and the development corporation concerned. The abolition of a licensed premises committee would restore the full jurisdiction to the licensing justices.
      At present, the licensing committee for a new town must remain in being until the development corporation is dissolved. Under section 108 of the 1964 Act, a committee is established for each new town with the duty of deciding what licensed premises the new town requires. Under Becton 109 the committee submits proposals to the Secretary of State, specifying the places where licensed premises should be established, what type of licence should be authorised to be held at them, and supplementary provisions
      1798
      dealing with facilities and amenities to be provided at those premises. Such proposals must be advertised and are subject to confirmation by the Secretary of State under section 110, following—if objections are received to the advertised proposal—a hearing or public inquiry.
      In many ways, this proposal is an anachronism. The trend is for grocers and other non-specialist retailers to sell intoxicating liquors. The clause restores the control of off-licences to the licensing justices, and removes control from the licensing committee's jurisdiction. As the Government have some sympathy for the new clauses, and as the new towns find them acceptable, I hope that the Government will agree to them.
      Mr. King: I think that the hon. Gentleman has said it all. His analysis of what happened to the clauses initially was right. The more one looks at the background, the more one finds that there is no argument in favour of opposing the new clause. Everybody supports the proposal, and I warmly commend it to the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 9

      POWER TO END SPECIAL LICENSING PROVISIONS
      (1) If a development corporation for a new town and the committee constituted for the new town under section 108 of the 1964 Act jointly apply to the Secretary of State for him to make an order under this section, he may make such an order.
      (2) The power to make an order under this section shall be exercisable by statutory instrument.
      (3) On an order coming into effect, subsections (4) to (6) below shall apply.
      (4) If under section 108 of the 1964 Act a committee was constituted for that new town only the committee shall cease to exist.
      (5) If under section 108 of the 1964 Act a committee was constituted for that and another new town—

      (a) the committee shall cease to exercise its functions as respects the first-mentioned new town, and then this section shall apply as if under section 108 the committee had been constituted for the other new town only; and

      (b) the Secretary of State shall vary any order made by him under the section in such

      1799
      manner as appears to him requisite in consequence of the coming into effect of the order under this section.

      (6) Sections 111 and 112 of the 1964 Act shall cease to apply to the new town, but without prejudice to the operation of section 111 as respects an application made before the date on which the order comes into effect or made at the licensing sessions next held after that day.
      (7) In this section and the foregoing section "the 1964 Act" means the Licensing Act 1964.—[Mr. Guy Barnett.]
      Brought up, read the First and Second time, and added to the Bill.

    New Clause 10

      HONORARY FREEMEN
      In section 249(5) of the Local Government Act 1972 after "royal borough" where it first occurs insert "or any parish or community having by grant or royal prerogative the status of city and any parish or community entitled by such grant to be called or styled a royal town", and after the further references to "royal borough" in that subsection and in section 249(6) insert "or parish or comunity as aforesaid.".—[Mr. Nelson.]
      Brought up, and read the First time.
      Mr. Anthony Nelson: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this we may take amendment No. 288, in title, line 18, after 'council', insert:
      'to empower certain further authorities to confer honorary distinctions'.
      Mr. Nelson: The purpose of the clause is to restore to a number of ancient cities and royal towns the power to confer honorary freedoms on people of distinction or on those who have rendered eminent service to the communities in which they live. Under section 249(5) of the Local Government Act 1972 that power was restricted to London boroughs and districts having the status of a city or borough. It thereby excluded those cities which were designated as "parishes" or as "communities" under the Act but which retained the status or style of cities or royal towns by way of grant or Royal Proclamation.
      Thus, in the case of Chichester, a city with a population of 22,000, a city council and a mayor, there is no legal power, as there had been for centuries before, to confer freedoms. Seven cities and royal towns are affected by my new
      1800
      clause. They are Bangor, Caernarvon, Chichester, Ely, Ripon, Truro and Wells.
      I am pleased to advise the House that my new clause enjoys the support of all those hon. Members within whose constituencies those cities fall, and that that support comes from three political parties. The power to confer honourable freedoms is inexpensive but gives great pride and pleasure to those who give them and to those who receive them. In my own case of Chichester, it is well known that for some time the city council has wished to confer this honour on the Royal Military Police, whose training barracks are in the city and who have contributed so conspicuously to the local community and to charitable causes in the district. It is desirable that those cities should have the right to recognise such service or distinction, especially as they previously exercised that right. Some have continued to do so, unaware they they are no longer legally empowered to grant freedoms.
      Amendment No. 288 is a consequential amendment to the long title.
      I hope that the House will accept that there is a good case for this modest change in the law. It will give great pleasure to many of my constitutents, as well as to others. The freedom of the city does not grant many privileges. However, if regiments are given the freedom to enter cities, they are entitled to march with bayonets fixed, drums beating and flags flying. That is certainly an honour that I hope will be bestowed on the Royal Military Police in Chichester.
      Mr. Clement Freud: I take issue with the hon. Gentleman. This is a significant honour. The misery of having to muffle drums, and of not being allowed to fix bayonets when entering a city of distinction is a misery that should not be underrated.
      Mr. Nelson: I do not wish to pick an argument with the hon. Gentleman, as I fear that I shall lose his support for the new clause. I readily concede his point. There is a good case for changing the law. I thank those hon. Members who have supported the new clause. I earnestly hope that the House will join me in supporting it.
      Mr. Eldon Griffiths: I support the clause, which was so eloquently moved

      1801
      by my hon. Friend the Member for Chichester (Mr. Nelson) in the cause of soldiers marching with fixed bayonets and drums through our historic cities. The regiments do this in Bury St. Edmunds and they have had the right to do so for almost 800 years. In 1973 we sensibly continued that right. Therefore, it would be churlish of me to do anything other than welcome the prospect of similar marvellous civic occasions being conducted in Chichester, Ely and other places.
      I declare an interest, in that I am an honorary freeman of the City of London. My hon. Friend the Member for Chichester said that there were not many privileges conferred with the honour. That is correct. As far as I can make out, the main privilege is that of being asked to contribute to an almost endless succession of good causes which one simply cannot refuse. Therefore, there are duties as well as rights.
      I wish to make only one serious point. I understand that the Government will accept the new clause. If there is to be a right to make people honorary freemen, for heaven's sake let it be used sparingly. Nothing is worse than an almost indefinite number of elderly ladies and gentlemen feeling that at the end of their time on the local council they are bound to get the freedom of their borough. That devalues the honour. I believe that it should be held as an honour that is sought after. I believe that it should go to such admirable bodies as the Royal Military Police, and, in in my case, the Suffolk Regiment. It would be unwise for local authorities to give it to everyone. Naturally, Parliament would not wish to restrain the judgment of local authorities, but they would be very wise not to devalue the honour by chucking it around too liberally. Power is important, but is best used sparingly.
      Dr. Keith Hampson: The mayor of the city of Ripon has written to the Government urging them to accept this new clause. Ours is an ancient city with charters going back to Alfred and Athelstan, and in 1604 it was made a Royal borough. The rights that these charters conferred and the dignity of the city were confirmed in 1974 in a further Royal charter. Very unnecessarily, and
      1802
      possibly inadvertently, the Local Government Act 1972 excluded these seven authorities—which are, in effect, third-tier authorities because they were subsumed within a larger district—from retaining the privilege of granting freedoms. Therefore, this is an opportunity to correct that. It is a cherished honour. It is the ultimate accolade that a city can give to people who have given it distinguished service. It is right that it should be used sparingly, and in our case in recent years it has been given only to the Royal Engineers, the RAF and two distinguished citizens.
      Dr. Glyn: I agree for once with the hon. Member for Isle of Ely (Mr. Freud) that this is a great honour. In the Royal borough of which I have the honour to represent the major part, we make sure that this honour is a great privilege. It is given to regiments, very distinguished citizens and members of the Royal Family, and it is not given lightly.
      My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) said that it was important that it should not be assumed that, just because one has had a long period of service on a local council, one should automatically get the freedom. Looking back on historic records on the granting of freedom in the Royal boroughs, I find that it has always been restricted to very distinguished people and to regiments in the area. I am certain that the residents do not mind—in fact they enjoy—hearing the bands play in Windsor, and that they are not at all frightened by the sight of fixed bayonets. I am sure that the House will agree that the new clause should be accepted, provided that the honour is restricted to those who really deserve it.
      Mr. Freud: I shall be very brief. I agree entirely with what other hon. Members have said. In the seven years during which we have arguably not been allowed to create freemen, we have used the privilege very sparingly. In my case only the RAF Hospital in Ely and the Anglian Regiment have been recipients of the honour. I hope that the Government Front Bench will be sympathetic and compassionate.
      Mr. King: I listened with interest to my hon. Friends the Members for Chichester (Mr. Nelson), for Bury St.

      1803
      Edmunds (Mr. Griffiths) and for Ripon (Dr. Hampson), and to the hon. Member for Isle of Ely (Mr. Freud). The Government recognise that there is a strong case for this category to have the additional power. We endorse the comments of my hon. Friend the Member for Bury St. Edmunds that this is not something that should be treated lightly. It is a peculiar and attractive honour which should convey particular respect and honour on its recipients.
      I should not wish to suggest that the new clause should be opposed, but I must draw the attention of the House to the fact that there are two printing errors. It says
      "by grant or royal prerogative."
      It should read "by grant under the Royal prerogative." Later it says:
      "called or styled a royal town."
      It should read "called and styled a Royal town." If those two errors can be corrected in the next printing of the Bill, the Government will be pleased to accept the new clause.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 13

      AVAILABILITY OF REPORTS DISCUSSED AT LOCAL AUTHORITY MEETINGS
      (1) In the first line of section 228(1) of the Local Government Act 1972 the words "and local authority committee" shall be inserted after the word "authority" and before the word "shall".
      (2) The following subsections shall be inserted after subsection (1) of section 228 of the Local Government Act 1972—
      '(1A)—(a) Copies of any reports being discussed at local authority meetings and local authority committee meetings, and which are considered during any part of such meetings to which the public are admitted shall be made available to the public present;
      (b) any such reports covered by paragraph (a) above shall be open to the inspection of any local government elector for the area of the authority and any such local government elector may make a copy of or extract from such reports.
      (1B)—(a) any member of a local authority or a local authority committee may inspect and make a copy of or an extract from any interim report, memoranda, letters or other documents relating to any matter on the agenda of the local authority committee;
      1804
      (b) any such interim report, memoranda, letters or other documents covered by paragraph (a) above concerning any item taken in any part of the agenda of the local authority or local authority committee from which the public have been excluded, shall be subject to the same confidentiality as that part of the agenda.
      (1C)—(a) any local government elector for the area of a local authority may inspect and make a copy of or an extract from any interim report, memoranda, letters or other documents relating to any item that appears on the public part of the agenda of any local authority meeting or local authority committee meeting, unless the local authority committee has ordered that any such interim report, memoranda, letters or other documents shall not be open to the public;
      (b) The local authority committee may only make such an order as referred to in paragraph (a) above on the grounds that public access to the interim reports, memoranda, letters or other documents would be an invasion of personal privacy or detrimental to the public interest, but not on the grounds that such public access would be politically embarrassing for the council or any member of the council."
      (3) The 1960 Public Bodies (Admissions to Meetings) Act shall apply to meetings of local authority sub-committees as well as to meetings of local authority committees and meetings of the local authority itself.—[Mr. Allan Roberts.]
      Brought up, and read the First time.
      Mr. Allan Roberts: I beg to move, That the clause be read a Second time.
      The new clause does five things. Generally, it concerns open government in local authorities. I imagine that all believers in local government believe that local authorities should practise open government. The new clause also commends itself to those like myself who want to see revitalised local democracy, more powers for local government and freedoms restored to local government. If we want to give local government a significant role in society, that government should be as open as possible so that the electors and their elected representatives can participate fully in the decision-making process and enable the local authorities to be truly democratic.
      First, the new clause gives electors the right to inspect the committee minutes after a committee meeting has taken place. At present anyone can attend a public meeting of a local authority committee, but if he is ill or at work and unable to attend the committee he does

      1805
      not have the right, in law, to inspect the minutes of that committee the next day. The clause safeguards matters that are taken during private sessions on the agenda, because of confidentiality. One would not expect those minutes to be available the next day. If it is right that the public can attend a committee meeting, surely they should have the right to inspect the minutes the next day. Some local authorities allow this and some refuse. This new clause would make it a right in law.
      Secondly, the new clause gives local government electors the right to see copies of reports that are discussed in the public part of the agenda, while and as they are being discussed. Again, some good local authorities make these reports available to the public, but there is no right for the public to have them. People can sit at the back of a public committee meeting entirely in the dark, not knowing what is going on because they do not have the right to those documents.
      Thirdly, the clause gives councillors free access to interim reports and internal memoranda. Fourthly, it gives electors the right to see interim reports and memoranda for the public part of the agenda. This is very important if the public and the councillors are to see what is taking place.
      Elected members and the public are often presented with a report produced by a local authority's management team—a group of chief officers—the differences of opinion between the chief officers and the other officers in that Department having been thrashed out and a compromise reached. All that the elected officers and the public see are recommendations based on the compromise. They have no access to the process of argument. If the public and councillors had access to interim reports and memoranda they could truly participate in the debate.
      5 pm
      This clause would open up local authority sub-committees to the public. At present, by setting up a sub-committee a local authority can exclude the press and public. That ploy is used by many local authorities to circumvent Parliament's intention in the Local Government Act 1972 that committee meetings should be open to the public. When I was a member of the city of Manchester authority
      1806
      we had a secretarial and services sub-committee of the policy committee which consisted of all members of the policy committee. It met in private to decide what receptions and functions the council should engage in.
      Planning applications have to be on a public register and open to public scrutiny, but local authorities often have discussions in development sub-committees that the public cannot attend. Such practices bring local government into disrepute. The clause would not destroy the right of a councillor to move a motion to the effect that there be a private committee session because of confidentiality.
      Finally, the new clause would give councillors free access to local authority interim reports and internal memoranda. I wish to give an example of a property acquired by the Greater London Council, where I believe that there has not only been maladministration but fraud in connection with contracts for modernisation and improvement of properties acquired.
      No. 19 Topsam Road, SW17 was acquired by the GLC in January 1977. The history of that house, which is one of at least 12 similar cases, illustrates the underhand practices that occur over letting contracts. It shows why documents relating to the purchase of houses, and their subsequent improvement, should be open to inspection by councillors and the public.
      Councillor Ken Livingston has been denied access to documents and interim reports regarding that property by GLC officers. After purchase, the house was referred to the housing department for survey. The survey stated that the property was vacant and could be let; that there was nothing wrong with it, and that no work needed doing. The survey stated that the premises could be let at once, that the fixtures and fittings were all there, and that the house appeared to be in perfect order.
      The house was then referred to the survey department of the housing department. The result of that survey showed that the condition of the bath and wash-hand basin was good and that the general condition of the house was good. It stated that the property had been modernised and redecorated internally and externally and was available for letting.

      1807
      The property was then referred by the housing district officer to the works manager, Mr Joseph Clayton. That section issued an order for replastering, fitting a bath, fixing internal services, redecorating and a considerable number of other works, which the other department's surveys said were not required.
      Mr. Dick Canning, the district housing officer of the local authority, together with another chartered surveyor, visited the property and submitted a report to senior officers of the GLC which stated:
      "So far as I am aware there is no laid down standard of what is lettable, but a sum of nearly £4,000 seems to me to represent rather more than an acceptable difference in professional judgment."
      Mr. Canning inspected the property after £4,000 worth of unneceesary works had been ordered. He was suggesting that there had perhaps been double dealing or fraud.
      No action was taken. Mr. Canning decided to resign and take the matter to an industrial tribunal, seeking constructive dismissal. The tribunal could not find in his favour over constructive dismissal but considered that he had good reason to suspect fraud. Mr. Fred Jackson, a senior officer of the local authority, appeared before the tribunal and denied that the accusation of fraud had been reporteed to him. Mr. Dungate and Mr. Hemming, other officers from the housing department, claimed categorically that there was a meeting with Mr. Jackson specifically to discuss the accusations of fraud, and I have evidence to that effect.
      It is disturbing that public money can be dissipated in that way, and that a works management department of a large local authority, with apparent impunity, can order unnecessary work. It is also disturbing that when local authority officers try to draw the attention of senior management to discrepancies no action is taken. To cap it all, local authority councillors are denied access to documents and internal memoranda that would reveal the truth of the accusations. The new clause would release such documents, and local councillors, who are accountable to the public for local authority expenditure, would know the truth.
      I have evidence of four other cases, and indications that there are at least 12 others. It is scandalous that the GLC
      1808
      should try to hide possible fraud in letting such contracts and deny access to documentary evidence to local councillors who wish to see whether the accusations are true. The GLC would not be able to do so if the new clause were accepted.
      Mr. Robin Squire: I cannot comment on the case to which the hon. Member for Bootle (Mr. Roberts) has drawn attention, but I have sympathy with much of the new clause. Subsections (1A) and (1B) of section 228 make a lot of sense. Councillors are often the last to know of matters about which they should properly know. They cannot be defenders of the public if they do not have a full range of weapons to enable them to exercise that responsibility.
      The authority from which I came holds few meetings in private, and I believe that those that are held in private would meet with the hon. Gentleman's approval. However, I recognise that other authorities continue to meet in private when they could and should meet in public, where their affairs could be given much greater attention and involve their own electorate.
      I have some doubt about the proposal in subsection (1C), to allow the electorate access to documents that form part of the background to reports before a council or one of its committees. There will be many occasions—perhaps so many as to put a question mark over the way in which the clause may operate—when the nature of the matter involved, regardless of whether it would come under the exceptions in subsection (1C)(b), would restrict and restrain those dealing with the council in its ordinary business. I am not sure that we should encourage that.
      The motivation behind the new clause is eminently sensible and I hope that even if the clause has some defects, we shall find some way of meeting the points that I have made.
      Mr. R. C. Mitchell: I agree with almost every word of the hon. Member for Hornchurch (Mr. Squire). It is right that reports of any description should be available to all councillors. That is one of the basic essentials of local government.
      I was a councillor for many years and I know the difficulties involved if, say, a councillor who is not a member of the housing committee wants a copy of a report that is to be submitted to that

      1809
      committee. If the report contains anything contentious, the councillor is often told that he cannot have a copy until the committee has considered it. That still happens in a number of councils.
      I strongly agree with the proposals in subsection (3). It has been the technique of some authorities that believe in secrecy to set up sub-committees in order to get round the 1972 Act. That happens frequently. An analysis of the number of sub-committees in existence today compared with those that had been set up before the 1972 Act would show that the number has risen in almost geometric proportions.
      On some councils, particularly rural county councils, all the council work tends to be concentrated in the hands of only half a dozen people. A powerful central block of councillors try to keep to themselves and the officers a considerable amount of information. Hampshire county council meets only quarterly and has decided that even that is too often. It is to cut out one meeting a year. It says that it is taking that action in order to save public expenditure and claims that it is obeying the Government's instructions on public spending. We call Hampshire a one-party state and it is rapidly developing a one-party state procedure.
      It is essential that councillors should have access to reports and it is absurd for members of the public attending a committee meeting not to have documents in front of them to enable them to follow the proceedings. It would be like allowing the public into our Galleries but not providing them with copies of the Order Paper. It is right that documents should be available to members of the public who attend meetings and they should be available the next day to those who cannot attend.
      However, I share the doubts of the hon. Member for Hornchurch about the wisdom of the new clause extending to interim reports and memoranda. There are many issues on which confidential reports have to be made by officers, and not only when the public would be excluded from the discussion anyway. Even on issues of general public debate, initial reports often cover delicate matters. I agree that reports should be made available to councillors, but I am not sure that
      1810
      they should be made available to members of the public before a matter has been considered by a committee. Once a committee has made a decision, the reports should be available, but if we followed the suggestions in the new clause, officers of a local authority would, for obvious reasons, be so careful in writing their reports that they would be meaningless to the councillors.
      It is the job of officers to advise councillors. If they have to be careful because they know that what they say in an interim document may be splashed all over the place. we may end up with useless reports. I support four-fifths of the new clause, but I have grave doubts about subsection (1B).
      5.15 pm
      Mr. Eldon Griffiths: I share the view of the hon. Member for Bootle (Mr. Roberts) that councils are unnecessarily restrictive and that they ought to make much more information available to the public and to councillors who are not able to be present at certain meetings.
      I think that I put into the 1972 Act the clause that the new clause seeks to amend, and I recognise that councils have got round it by setting up endless sub-committees. As a result, a statutory duty placed on councils to make more information available has led, in some cases, to less information being made available.
      I would have agreed with the new clause if the hon. Member for Bootle had confined it largely to subsection (1A). He gets into trouble on subsection (1B), where he suggests that interim reports and memoranda be made available. The result of that, in many cases, would be that officers drawing up such documents, which may necessarily be consultative and indicate a series of options, would, if they knew that the reports were to become public and that the various options could blight all sorts of properties, dry up in the candour with which they introduced the documents to the councillors. It would inhibit the generation of the information that councillors require.
      It seems that the hon. Member for Bootle must have recognised the difficulties that he was getting into while he was drawing up his new clause, because he has inserted subsection (1C), setting

      1811
      out the reasons that councils would be able to use for not doing what the hon. Gentleman wants. A council has only to resolve that publication would be
      "an invasion of personal privacy or detrimental to the public interest"
      and the documents need not be published. A council that does not want to publish documents will say that publication would be
      "detrimental to the public interest"
      and it would be judge and jury in its own case.
      The Mid-Suffolk district council discovered recently that when the Housing Bill becomes law shortly it will give council tenants a statutory right to buy their homes and to take the gardens that go with them. The council decided at the last minute that it had better get hold of some of those gardens for future development.
      The result has been eviction notices for more than 800 council tenants, who have been told that if they do not surrender their gardens before the Housing Bill becomes law they will be sued for possession in the county court and evicted. That is absurd. The decision was taken on the nod at the full council meeting where the public were present, but it was fully debated only in committee, when the public were not present. That is the sort of practice that brings local government into disrepute, and it is something of which the House must take account.
      I do not intend to go into the merits of that case. I mention it merely to illustrate that there must be more exposure. However, all of us who have had anything to do with local government recognise that a local authority is not like the House of Commons. It is an executive body and has to deal with a range of subjects, such as personnel matters, salaries and executive matters concerning planning permissions, which can confer substantial financial gains or losses on various people. Because of their sensitive character, such matters cannot always be hawked about and debated in public.
      There has to be, in an executive authority as opposed to a legislative and deliberative authority, a measure of confidentiality. The present law does not go far enough. Since I had some part in framing it, I am happy to say that. If
      1812
      the hon. Member for Bootle had confined himself to subsection (1A) he might have attracted some support from the Government Benches. In the event, I do not believe that the Government can possibly accept the clause as it stands. I hope that when he replies my right hon. Friend can give some encouragement to the House that we can go as far as subsection (1A) of the new clause.
      Mr. J. Grimond: I rise to support the new clause. I agree that it may need redrafting. I hope that the Government will be able either to assure us that it is unnecessary and that powers exist to enforce this sort of open government by local authorities or that they will accept it, even after some redrafting.
      I do not intend to repeat the arguments already advanced for the new clause. I agree with all of them. I also agree with the reservations expressed about subsection (1B). Some further safeguard may have to be given over internal memoranda. I doubt whether many internal memoranda are entitled to more confidentiality than is given under subsection (1C). Reference has been made to matters concerning personnel, and private matters that I understand would be covered under (1C).
      The phrase
      "detrimental to the public interest"
      is so wide that a local authority would be able to suppress anything. The clause will obviously need redrafting. I believe, nevertheless, that the principle is right.
      In addition to the arguments already advanced, I recall Walter Lippmann saying that in terms of government the public was too often in the position of the deaf man in the back row of the stalls who did not know what was going on on the stage, and only saw figures vaguely crossing this way and that. That is true of a certain number of local councillors. I do not say that it applies to all local councillors, but it applies to some. They have a strong case in arguing that things are decided on documents without their being fully aware of what is happening.
      There are two classes of document that I want to add to those already mentioned. Local authorities seem to engage increasingly in commissioning reports on this, that and the other. I am not sure that it is a practice of which I approve.

      1813
      I know of many examples of expensive reports being commissioned by local authorities. Not all the reports are made available, in total, to councillors. They should be.
      Local authorities negotiate and sign all sorts of agreements. I have examples of agreements that were not made available to all councillors and certainly not to the public for many years after they were negotiated. The Government, I hope, are trying to encourage more freedom in local authorities and also to encourage more open government and to keep local councillors better informed. Unless the Government can say—this may be possible—that there is a statute covering the points made in the new clause, I hope that they will accept it. If the Government say that there is a statute, or some part of a statute, that would achieve what the mover of the new clause wants, I hope that they will take the opportunity to draw the attention of local authorities to such a statute. I believe that it is too often ignored.
      Mr. King: We have had a most interesting debate on what I recognise is an important new clause. The comments made from both sides of the House reflect and anticipate, in a sense, the reply that I am bound to give on behalf of the Government. The right hon. Member for Orkney and Shetland (Mr. Grimond) said, discreetly, that he thought the new clause might require a little redrafting. Parts of it obviously raise problems. It would be impossible for us to accept the new clause as it stands. This is in no sense the Government parading the usual answer, saying "Jolly good effort, but it is technically wrong" and then forgetting about it and not doing anything.
      There are serious issues involved. I do not want to try to interpret the motives of the hon. Member for Bootle (Mr. Roberts) and his concern about the case that he raised. I cannot comment on that. The hon. Gentleman, in his emotions over that case, may have rushed too far in the new clause. I would only say, as a number of hon. Members have remarked, that if he had stopped earlier in the new clause there would have been wide support for the proposals that he makes.
      1814
      The Government's view that there should be discretion and freedom within local authorities has been correctly interpreted. That should be combined with greater accountability to the electorate. Many of the issues raised under publication of information are designed to cover not merely information for electorates but information for councillors and help in interpreting much of that information. To modify further the Lippmann metaphor, it may be possible to see the figures clearly as they march across the stage, but the full significance of their entrances or exits are not fully understood. That is part of the area that the Government are keen to tackle.
      I must say bluntly that I could not recommend the House to accept the new clause. We are concerned, however, to study methods of improving a number of areas that the hon. Member tackles. I should like to clarify the present position.
      The first point in the new clause deals with the inspection of minutes of committee meetings. There is an anomaly. The public have a right of admission to council and committee meetings, but only the minutes of council meetings are required to be open to inspection. That is obviously an anomaly. On the question of availability of council and committee reports, the law at present makes no requirements as to the availability of such reports, and this would create new duties for local authorities.
      On the question of access of councillors to documents, at the moment the councillor has a common law right to inspect such documents as may be reasonably necessary to enable him properly to perform his duties as a councillor. I accept that this is a matter for legal interpretation. The Government would expect that right to be exercised in the widest possible manner. Broadly speaking, a councillor, as a member of an authority, should have wide access to documents within that authority to enable him to discharge his proper responsibilities.
      The proposal that the hon. Member for Bootle has put forward falls down in a number of respects. The statement in subsection (1C) that
      "any local government elector for the area of a local authority may inspect and make a copy of or an extract from any interim report, memoranda, letters or other documents"

      1815
      goes too far. We are concerned to have reasonable accountability and reasonable information. We are also concerned about the economic cost and efficiency of local authorities. I think that the House would feel that the proposal goes too far.
      Mr. R. B. Cant: In normal times, whenever they may be, when a Labour Government are in office, there are not such financial constraints on local authorities and the proposal could be accepted from an economic point of view with certain equanimity. Is the Minister aware of the way in which these financial pressures have changed the whole approach to documentation? In the Stoke-on-Trent authority, all reports are now typed on A4 size paper and then, with the advanced technology now available, are reduced to half that size. That saves an enormous amount of money. Only a certain number of copies are produced for councillors. I hope that if the Minister accepts part of the new clause and makes it possible for a more generous distribution of the documentation he will make the appropriate adjustment in the rate support grant or block grant.
      5.30 pm
      Mr. King: I wondered how long it would be before Stoke-on-Trent reared its familiar head. I welcome the hon. Member back to our discussions, since we enjoyed his contribution in Committee.
      The issue of cost arises. One must examine the implications of such a new clause. In a county council area, is it adequate for documents to be available only in the county hall? The problem of distribution to more distant parts of the county is important.
      The hon. Member for Southampton, Itchen (Mr. Mitchell) referred discreetly to another aspect. The new clause makes no mention of protection for council officials against the law of defamation. If an internal report is made available generally officers will not present a frank report based on their best confidential advice because they have no cover.
      The hon. Member for Bootle said that there was clear evidence of maladministration. The local government ombudsman has the power to investigate and obtain documents for an investigation into maladministration.
      Mr. Grimond: The Minister says that there is a common law right to inspect documents. Does that apply to Scotland? Perhaps his neighbour on the Front Bench, the Under-Secretary of State for Scotland, will know—or perhaps he will not.
      Mr. King: The answer to the second part of the right hon. Gentleman's question apparently is "No". I shall seek advice.
      Hon. Members have said that the proposal relating to proceedings being open to the public might lead to proliferation of sub-committees. Hon. Members might think that the new clause covers that, but it does not. Sub-committees are not covered. That provides another palpable loophole and another incentive to create yet more sub-committees.
      Mr. R. C. Mitchell: I accept that the wording of the new clause does not cover the point, because we are approaching the realm of sub sub-committees. The wording could be revised. In principle, are the Government in agreement with the proposition that meetings of sub-committees should be open to the public on the same basis as meetings of committees?
      Mr. King: The Government are sympathetic, but a council is not like Parliament. It has executive and personnel functions, and a number of different responsibilities. It is not merely a debating chamber or legislature.
      Our policy is to ensure greater accountability and more open government at all levels. The general public will no longer accept tablets handed down from on high, whether from the Government or councils. There must be fuller discussion of controversial issues.
      I am sorry that I cannot accept the new clause. However, the Government are sympathetic to the first part of it. It would be wrong, and contrary to our policy, to take action without fuller consultation with the local authority associations. It might be said that vested interests will not wish to respond. In my discussions with local authorities I have found a recognition of the need to improve arrangements. We should like to consider these matters further and see whether we can bring the proposals before the House later. I am not talking of the possibility

      1817
      of introducing amendments in another place, because we need more time for discussion than that would allow.
      Mr. Allan Roberts: I welcome the spirit in which the House has debated the new clause. The three parties have welcomed its intention. Doubts have been expressed about the wording. Before I came to the House I was a social worker and city councillor; not a lawyer. I hope that the Government will be true to their word and draft a provision that is technically and legally accurate and that meets the view expressed by all sides. I, too, am sceptical about local government response. We heard the true voice of local government vested interest in the words of my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant). I hope that the Government will stick to the Minister's undertaking. I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New clause 19

      COMPENSATION FOR LOSS OF OFFICE, ETC. PURSUANT TO PART XVI OF ACT
      The following paragraph shall be inserted after paragraph (d) in subsection (3) of section 259 of the Local Government Act 1972 (Compensation for loss of office)—
      "(e) the provisions of Part XVI (Urban development) of the Local Government Planning and Land Act 1980 or of any order made or direction given thereunder;"
      and, accordingly, in relation to any regulations required to be made in pursuance of such paragraph (e) of subsection (3) of the said section 259—

      (i) in subsection (1) of that section for the words "such body or such Minister" there shall be deemed to be substituted the words "such urban development corporation";

      (ii) the reference in the said subsection (1) to any provision of that Act or of any instrument made thereunder shall be deemed to be a reference to any provision of Part XVI (Urban development) of this Act or of any order made or direction given thereunder; and

      (iii) subsection (4) of that section shall not have effect.—[Mr. Neil Thorne.]

      Brought up, and read the First time.
      Mr. Neil Thorne: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this we may dis-
      1818
      cuss new clause 20—Compensation (Part XV).
      Mr. Thorne: The purpose of the new clause is to ensure that anyone who is at present in the employ of a predecessor authority shall be compensated for loss of office if he is not appointed to the staff of a new urban development corporation. This has been the common practice in recent years in any local government reorganisation, and similar provisions should be made in this case.
      Frequently, local authorities are anxious to second staff for such development projects which might not at first attract urban development corporation designation. Good staff will not be encouraged to accept the flexibility and challenge offered unless they know that their jobs will be available when they return. It would be a shame if they were reluctant to take up the challenge, particularly as local government staff are often seconded for a considerable time, and promotion is sometimes gained thereby. Naturally, when such staff need to return to the job that they left it is inappropriate for them to return on the original basis. I hope that the Government will support my new clause.
      Mr. Guy Barnett: New clause 20 is important. I suspect that the Government are attempting to shuffle out of responsibilities which they have as a direct consequence of the Bill. In a nutshell, the responsibilities relate to the rights of public servants who are employees of the New Towns Commission or of development corporations and who are liable to suffer redundancy as a direct consequence of clause 15.
      The Government and Parliament have a responsibility to such public servants. I shall seek to show that the responsibility can be properly discharged only by the payment of compensation to people who are put in a worse position as a result of the Bill. That can be done by the payment of what is known as the Crombie code to all those adversely affected.
      The code originates from 1947, when the then Government had to make compensation provisions for redundancies as a result of nationalising industries, and as a result of local government reorganisation. The existing code, which dated

      1819
      from 1888, was thought to be too generous. The Crombie committee was, therefore, set up by the Treasury to make recommendations for a new code.
      The recommendations of that committee were accepted, and they provided the framework of a code of compensation that has survived, in essentials, ever since. The code applies only in cases of statutory intervention. That is an important point, to which I shall later refer. The code was applied, for instance, to the massive local government reorganisation undertaken by statutory intervention, as it was to the reorganisation of the National Health Service. That was another piece of statutory reorganisation.
      The code's latest application is in the GLC housing compensation regulations of 1980. I understand that about 90 orders have been laid, covering 10 to 12 Government Departments. For the new towns, it is pertinent to mention that the Crombie code was applied to those who suffered loss as a consequence of the transfer of new town housing to local authorities, which was made possible by the New Town Amendment Act 1976.
      The Secretary of State makes the regulation with the consent of the Minister for the Civil Service, who acts as arbiter ensuring, among other things, that Departments do not outbid each other in the award of compensation. I shall not detain the House with a lengthy recital of the details of the code, but I think I should mention two important aspects.
      The code involves three stages, each with its own qualifying conditions. They are resettlement, long-term compensation and retirement. The basic principle is to relate the compensation in each case as precisely as possible to the loss that an individual sustains as a consequence of a statutory change made by the Government and Parliament. Therefore, though its terms are reasonably generous they are related strictly and stringently in each case to the circumstances of the redundant person. It is not—and I repeat "not"—a golden handshake.
      I consider next whether the Crombie code terms are applicable under the Bill. Does the Bill constitute the kind of statutory intervention that is liable adversely to affect the career prospects of individuals currently employed by development
      1820
      corporations and the Commission for the New Towns? I argue that the answer is "Yes" on two counts.
      The first is that in clause 110(2) there appear the words:
      "The power of disposal"—
      that is of land—
      "by virtue of this section may be exercised notwithstanding anything in the 1965 Act".
      Those words, in effect, override words contained in the New Towns Act 1965, section 18(1), to the effect that disposals by corporations may take place.
      "as they consider expedient for securing the development of the new town in accordance with proposals approved by the Minister … or for purposes connected with the development of the new town:"
      The House knows why the Government wish to supersede those words. It is because of their stated objective of selling off new town assets without any regard to purposes connected with the development of the new town. That may be done to reduce the public sector borrowing requirement or to repay the taxpayer some of his forced investment—as it was recently described by the Under-Secretary of State for the Environment—or for any other purposes which the Minister may consider or which may occur to him at some future time. The point is that the law is being significantly changed to facilitate the disposal of new town industrial and commercial assets. Such disposal can have only damaging effects on the career prospects of those presently employed to manage those assets.
      Clause 111 permits the Secretary of State to reduce the size of a designated area of a new town by order. It is not possible to do that now. I do not pass any judgment or express a view on the wisdom of that provision, but it will, as in the previous case, significantly alter the parameters in which new town employees are employed—to their possible detriment.
      5.45 pm
      Both those powers can, and certainly will, lead to less available work in many new towns, and therefore to redundancy among those who took up appointments in the new towns. When I asked a question about this the Minister for Housing

      1821
      and Construction replied on 22 May in a written answer.
      "New town legislation has always provided for the dissolution of development corporations, and so the terms of the Crombie code are not applicable to their staff."—[Official Report, 23 May 1980; Vol. 985, c. 361.]
      With respect, that will not do. The situation of the staff about whom I am talking is parallel to that of housing staff who were affected by the 1976 Act and who receive Crombie code compensation. If it is argued that currently employed staff never had long-term security because it was never envisaged that the development corporations would last for more than about 15 years, the same argument must apply to housing staff.
      If it is argued that the housing staff redundancies were not foreseen and that something had to be done urgently, the same argument must apply in this case. An issue arose as a result of the reappraisal of the new towns programme by my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) in 1977 and the redundancies that flowed from that, but there could not be any question of Crombie code compensation on that occasion because there had been no statutory intervention, which acts like a trigger in the operation of the code. It was unfortunate that nothing could be done except to apply existing management redundancy terms. This case involves legislation and I maintain that the Government have no alternative, in equity, but to extend Crombie code cover to those staff whose careers will be adversely affected by this legislation and by this piece of statutory intervention.
      In my search for a suitable form of words to cover the case and to provide an appropriate new clause I came across the words contained in schedule 18, paragraph 6(2) and (3). Those words apply to the employees of the Land Authority for Wales. Why are those employees treated in that way, while the employees of the new towns are not? It is clear that the Government have not turned their backs on the Crombie code, or they would not be using it for the Land Authority for Wales.
      I do not see how I can interpret the answer given by the Minister for Housing and Construction. He said to me on 30 June:
      1822
      "It is the view of the Government that the existing day-to-day management redundancy terms should be applied."—[Official Report, 30 June 1980; Vol. 987, c. 438.]
      If employees of the Land Authority for Wales get it, surely new town employees should get it also.
      Mr. Fox: I have listened with interest to my hon. Friend the Member for Ilford, South (Mr. Thorne) and to the hon. Member for Greenwich (Mr. Barnett). In answer to the hon. Gentleman, I have to say that we do not believe that the numbers of careers affected and the numbers of redundancies will be of the scope that he imagines. That has a considerable bearing on what I wish to say about these new clauses.
      Both the new clauses propose the making of regulations to protect the interests of staff made redundant or who suffer loss or diminution of emoluments. The first concerns those affected by the setting up of the urban development corporations on Merseyside and in London. The second is concerned with the disposal of assets in new towns and reductions in their designated areas.
      The Government do not believe that such regulations are necessary. In the first place, there are very few staff who are likely to be affected by these developments. In Merseyside, there is little, if any, overlap between the functions of the new urban development corporation and the existing local authorities. In London, the shadow UDC is actively exploring ways of ensuring that it is able to make use of appropriate skills whenever and wherever they are available, including the docklands development organisation. In the new towns, similarly, few, if any, staff will be affected by the proposals for disposal of assets and reduction in designated areas. Secondly, there are already in existence terms that provide for the payment of compensation to staff employed in local government or the new towns who may be made redundant or lose their employment in the interests of the efficient exercise of management functions. We believe that these powers are adequate to cover any redundancies that may arise and that no further powers are necessary.
      From that, I hope that the House will realise that the best practices that are followed now, and have been followed for some time, will apply in this case.

      1823
      I cannot accept the suggestion that the Government are trying to shuffle out of their responsibility in this matter. The history of Crombie was recited to us by the hon. Member for Greenwich. The Government do not see the need for the Crombie code today, as there was a need in the past, given that good management compensation terms are now available to cover most groups of employees. In the case that the hon. Gentleman cited, that of the Land Authority for Wales, he will accept that it was some time ago when that concession was given. We are talking about any future decisions in these matters.
      The people employed in the docklands development organisation could transfer back to the Greater London Council, or, alternatively, would, like the contract staff, have a good chance of being recruited. I am sure that note will be taken of that.
      The Government will resist both of the new clauses.
      Mr. Guy Barnett: The House has listened to the most unsatisfactory reply that I have heard in almost any debate during a Report stage. I attempted to advance views, which are sincerely held by the individuals involved, to show why they should be properly compensated. It it not an argument for the Minister to use that there may be only a few individuals involved. If one man is being unjustly treated, that is a serious matter. The Minister should know that when the housing transfer took place, relatively few people qualified for Crombie code treatment. Nevertheless, they were justly treated. What I was arguing was that the situation of these people differs in no way from the situation of those who were made redundant as a consequence of the housing transfer.
      The Minister referred to normal day-to-day redundancy terms, as I did, but surely he knows that the redundancy terms to which he referred are significantly inferior to the Crombie code terms, which are designed to compensate an employee for the loss that he sustains as a consequence of legislation.
      Also, I am surprised that the Minister regards the Crombie code, because of my recital of its history, as out of date. He is inaccurate about the Land Authority for Wales. The provision is in the Bill in
      1824
      order to protect the employees of the Land Authority for Wales in the future.
      What I am asking is that the Government should go away and consider this matter carefully and, if necessary, meet the employee organisations which are directly involved, with a view to seeking a proper solution to this serious matter.
      The Minister has given me no arguments at all to show why the Government should refuse to accept the responsibility which I believe that they have.
      Mr. Neil Thorne: I confess that I am rather disappointed by the reply of my hon. Friend the Under-Secretary, because in Committee he was usually extremely helpful. In this case, we should not overlook any of the people concerned who have been involved in working for predecessor authorities. I believe that my hon. Friend mentioned the joint docklands committee. I might be misinformed, but I understand that the chairman of that body has been replaced under the new organisation. Therefore, there is already one case in point in which someone has lost his office as a result of the new proposals.
      It seems wrong that we are not looking after these officials because of the bad will that this will create for the future. We must think of the future and of any other similar happenings that may take place. We should not want to find that we could not get adequate staff to provide the service required. I hope that before the Bill goes to another place the Minister will undertake to look again at this matter, so that when it returns here he can assure us that it will contain the power to compensate officials properly by some other means, if it is not to be done through the new clause. It is only on that basis that I am prepared to withdraw the new clause.
      I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): Mr. Speaker listened with care to what the hon. Member for Caernarvon (Mr. Wigley) said on the his point of order earlier this afternoon, and he has asked me to say that he has selected for debate new clause 22.

    New Clause 22

      LOCAL DISCRETION IN DEFINING "MATERIAL CHANGE OF USE"
      The following subsection shall be inserted after subsection (3) of section 22 of the Town and Country Planning Act 1971 (meaning of "development"):
      "(3A) A local planning authority may in any local plan prepared by that authority under Part II of this Act designate the whole or part of the area to which that plan relates as an area in which the use for any other purpose of any building previously used as an only or main residence shall be treated for the purposes of this section as involving a material change in the use of the building.".—[Mr. Wigley.]
      Brought up, and read the First time.
      Mr. Wigley: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to take new clause 23—Change of use of an only or main residence—and new clause 24—Change of use of only or main residence in National Parks and area of outstanding natural beauty, etc. We may also take the following amendments:
      No. 234, in schedule 11, page 134, line 36, at end insert—
      "1. The following paragraph shall be inserted after subsection (3)(a) of section 22 of the Town and Country Planning Act 1971 (meaning of "development"):—
      '(aa) The use for any other purpose of any other building previously used as an only or main residence involves a material change in the use of the building.'"
      No. 235, in page 134, line 36, at end insert—
      '1. The following subsection shall be inserted after subsection (3) of section 22 of the Town and Country Planning Act 1971 (meaning of "development"):—
      "(3A) The use for any other purpose of any building previously used as an only or main residence shall be treated for the purposes of this section, as involving material change in the use of the building.".'.
      Mr. Wigley: I am very grateful, Mr. Deputy Speaker, for the fact that this matter has been facilitated, because it is of considerable concern.
      I have been catapulted into the debate rather more quickly than I had anticipated when I raised the point of order, but I shall take the maximum opportunity that I can, in case I lose it later.
      1826
      The question of second homes and holiday homes is a vexed one. In certain parts of Wales it is very vexed. I hesitate to say that it is a burning issue; unfortunately, it has caused incidents of arson over recent months in Wales. No hon. Member would condone that sort of approach; none the less, the fact that there are people who are driven to that sort of end illustrates the depth and strength of feeling that exists in certain areas on the question of holiday homes.
      The reason for this may not be appreciated fully by hon. Members who represent urban areas, although those who represent rural areas will probably have come across it. In an area such as Gwynedd, my area, there are about 7,600 second homes, according to the latest figures that we have had. There are also about 5,000 families on the waiting list for local authority housing. It is often asked "Why do not those people who are looking for housing buy the homes that become second homes when they can buy them on the open market?"
      The reality is that, because of the levels of wages and incomes in the area, which are anything between 15 per cent. and 30 per cent. below the United Kingdom average, it is imposible for people earning ordinary wages to compete with people from the richer cities who want to buy holiday homes.
      Those people from the richer cities may be from Manchester, Liverpool or Birmingham. They may well be from Cardiff. Therefore, one is not saying that it is a problem of people coming only from England into Wales; it is a problem of people coming into rural areas. The problem exists in a severe form in the Lake District, so much so that that district has been forced to take steps itself to try to combat the problem. The fact that it has taken steps that may not have a formal legislative background illustrates the need for the House and the Government to approach the problem constructively and to find a solution.
      Interestingly enough, there was an instance only last December of a planning application being turned down in the Poole area. An appeal was upheld when Poole council had refused an application for planning permission on the basis of a change of use. I believe that that instance concerned holiday flats.

      1827
      The question to which my colleagues and I tried to square up on this issue is how we can find a constructive and practical solution that will give the maximum degree of freedom at local level. It is patently clear that some of the houses that become second homes and holiday homes would not be inhabited otherwise. Some of them may be on the tops of mountains, or in woodlands. Others, however, are in the centres of villages, and even towns. When there is a high level of second homes in such areas in Gwynedd one sees the devastating effect on the social, cultural and economic life of the community. The community can change overnight in its nature, and for large parts of the year the village can be totally dead.
      6 pm
      The figures for the Dwyfor area, in my constituency, show that in 1977 in the village of Beddgelert 30 per cent. of the houses were second homes. The figure is probably higher now. In the village of Llanengan virtually half of the houses—46·6 per cent.—are second or holiday homes. We know of instances in other areas where the figure is almost 100 per cent., and some villages have changed almost entirely to second homes. It is possible that the problems are worse in the villages that have moved half way towards second homes than in those villages that have changed entirely to second homes—but it is sad to see a village that has changed entirely. In the village of Llanbedrog, which has been a thriving community, 33 per cent. of its housing stock is second homes.
      How can the housing stock of an area be managed in a way that gives priority to the needs of people to have first homes, before allowing any residual stock to be sold as holiday or second homes? Most would agree that a priority for any civilised community should be to ensure that every family has a roof over its head. Over and above that, if there is housing stock in excess it could be used in different ways—and holiday homes may be one of those uses. The holiday industry is important in such areas as Gwynedd. But the first priority should be to ensure that people have first homes before the houses become second homes.
      How can that be achieved? There are a number of ways in which the problem
      1828
      can be approached. One way that has been advocated but which would not appeal to the Government is that local authorities should buy more of the housing stock in those areas and rent the houses to people on the waiting list. That suggestion has been experimented with, and houses have been bought in areas such as Dwyfor and Arfon during the past four or five years. The amount of money needed for that meaningful solution to the overall problem is immense. Given the thrust of Government policy in the other directon for selling council houses, I do not imagine that I shall receive a favourable response to that suggestion from the Government Front Bench.
      An alternative way of approaching the problem would be to get a determination on the use of the housing stock at a local level. The way proposed in these belt-and-braces new clauses and amendments which use different forms of words for the same objective—we do not mind which one is pressed, provided that there is movement in one direction—is that the change in use from a house that is a first home—a primary or main home—to a second home—not the main or primary home—should be treated as a material change in the use of that building. There are precedents for trying to distinguish between first homes and second homes. The Housing Act 1974 draws that distinction in payment of grants. There is a similar distinction in one of the Finance Acts. We are not breaking new ground by suggesting that there should be a distinction between a main residence and those used for other purposes.
      We would like local authorities in the areas concerned to be able to take a decision on any specific change of use. A planning application should be submitted on a house that changes from being a primary house, lived in all the year round, to a holiday or second home. If that house is on the top of a mountain, or in an area where the reason for the community's existence—such as a quarry, which has closed—no longer applies and the houses are in excess of requirements, and if there is no valid reason for that house being needed for a first home, the local authority will be in a position to know that. It would not be unreasonable for it to say that that

      1829
      house could become a holiday home. Likewise, in areas where there are large demands for first homes from the indigenous population, the local authority could draw the line and say that there should not be a material change of use for a specific building.
      There are several ways of doing that. New clause 22 asks for local discretion in defining material change of use. We try to do that in a slightly different way in new clause 23, by adding to the end of section 22(1) of the Town and Country Planning Act 1971 the words:
      "(including the use for any other purpose of any building previously used as an only or main residence)".'.
      In new clause 24 we have recognised what the Government themselves recognised in this year's Housing Bill, namely, that there are problems in national parks and areas of outstanding natural beauty, etcetera. "Etcetera" is the word that appears in the Housing Bill. The Government recognised that in some such areas council houses should not be sold. Therefore, the Government have already moved towards acknowledging the existence of the problem. New clause 24 provides the same definition that the Government have deemed appropriate in the context of the Housing Bill, and applied it to section 22 of the Town and Country Planning Act 1971. That will bring in the need for a change of use application. The amendments have the same purpose, but approach the problem in a different way by adding new words to existing provisions.
      The problem is a real one. Given the developments that we have seen in Wales over recent months, everyone in Wales, of all political parties, looks to Parliament to show an initiative to meet the problem. The problem has a special Welsh element, but it is not confined to Wales. There are hon. Members from other areas who feel strongly about this issue—and they are Members of all parties.
      I hope that tonight the Government will show that they are aware of the existence of the problem and are willing to move in a direction that will give reasonable control, so that the emotions that we have seen recently will cool down. If they do that, people will see that a constructive
      1830
      and realistic answer can be forthcoming from Parliament, and that Parliament is not oblivious of the problem or unwilling to tackle it.
      Mr. Stephen Ross: I am delighted that Mr. Speaker changed his mind and allowed these clauses to be debated. The hon. Member for Caernarvon (Mr. Wigley) is to be congratulated upon raising the subject under the Bill. It concerns my constituency, and I know that if my hon. Friend the Member for Truro (Mr. Penhaligon) were here he, too, would wish to speak about the matter.
      The solution that has been suggested is one that has been suggested from the Liberal Bench on previous occasions. The Government must act in this area. We understand—the hon. Member for Caernarvon was fair on this matter—how the build-up of second homes in Wales, in my constituency, in the West country and elsewhere, has taken place. It is quite legitimate. As an auctioneer I have sold property in the past for very little money—property such as coastguard cottages, which I sold for as little as £1,000 or £1,500. The people who bought those cottages spent a great deal of money on them, both in bringing services to them and in modernising them. In many ways they have done a service to the community.
      Those times have changed. For example, when that happened on the Isle of Wight, the population was 92,000 and going down. It is now approaching 120,000 and going up, and house prices have gone through the roof. Certainly, nowadays one cannot buy many properties for under £15,000 or £16,000, and they are properties that used to sell at £600 or £700 when I first went to the Isle of Wight nearly 30 years ago.
      Understandably, feelings are building up, in that people see themselves priced out of the property market and unable to get a home from the local authority because the waiting lists are getting longer and the housing investment programmes have been cut by successive Governments—indeed, almost cut to ribbons by the present Government.
      I am sure that the Government must be aware of this fact, but the warning must be given that, unless it is seen that some action is being taken to prevent a

      1831
      continual build-up of the second home saga, people not only in Wales but in parts of England will start to take the law into their own hands. Therefore, the hon. Member for Caernarvon has put a valid point before the House.
      Another problem is that village communities are virtually disappearing. I remember canvassing in the village of Brook during a county council election. I went along a terrace of eight cottages, of which only one was occupied permanently. I imagine that the average age of the people in that village is now about 70. Hardly any young people are left. The only time at which there are any number of people there is during the months of July, August and September.
      If the Government cannot accept the approach that has been suggested they should at least give an indication that they will bear it in mind and try to do something about it. As the hon. Gentleman rightly says, this problem has already been dealt with in taxation. Capital gains tax is paid on second homes. I think that I am also right in saying that some recognition has been given to this in the Housing Bill, in that council houses in rural areas which are purchased by tenants must first be offered back to the authority.
      Therefore, the Government have already taken this matter on board. They will have to do more if feelings are not to run too high and action be taken which we might all regret. I do not want to see a return to squatting, but I suggest that that is what ultimately will happen if we do not tackle the problem of second homes.
      I strongly support what was said by the hon. Member for Caernarvon, and I hope that the Minister will be able to give a constructive answer to the suggestions that have been put forward.
      Mr. Fox: I hope that in the remarks that I shall make the hon. Members for Caernarvon (Mr. Wigley) and Isle of Wight (Mr. Ross) will not think that I am minimising the problem or the sensitive situation that exists in many parts of the country. I fully understand the deep concern of many of our constituents, and I shall certainly make sure that my hon. Friend the Minister for Housing and Construction is aware of what has been said.
      1832
      Of course, in many areas our planning laws are specific. As I am sure all hon. Members know, a change in the use of an only residence or a main residence which resulted in the house or flat ceasing to be used as a single dwelling would, under current planning law, already normally be a material change of use requiring planning permission. The new clauses would go further—the hon. Gentleman accepts that—by providing that a property that had been a single dwelling and remained a single dwelling would nevertheless need planning permission, because it ceased to be the only or main residence of its occupier. I think that I interpret the hon. Gentleman's contribution correctly.
      I cannot support the new clause. It would represent an unacceptable intrusion by the State into the housing market and a major extension of the role of the planning system. The hon. Gentleman's intention is to bring second homes within planning control, but the new clause would go much further than that. For example, it would bite particularly hard on landlords of privately rented property, who could find themselves liable to enforcement action if a new tenant were not using the dwelling as his only or main residence.
      The clause would also introduce anomalies, in that, although it might not prevent a house from being bought as a retirement home for immediate use, it might prevent someone from buying a house shortly before retirement with the intention of retiring there in due course. I mention those only as examples of the difficulties.
      There is, however, a still more fundamental objection to the clause. It would introduce into planning legislation a new concept which I consider would be completely unacceptable. In effect, it would delegate to local planning authorities the power to amend the provisions of section 22 of the 1971 Act. It would mean that a local authority's provisions in a local plan would bring within planning control activities which, in the country as a whole, Parliament had decided should not require development or planning permission.
      6.15 pm
      The hon. Member for Caernarvon drew a comparison with certain national

      1833
      parks. He was right in saying that in the Lake District—I think also in the Peak park—certain measures have been taken where new housing is designated for local people. Although those two national parks have taken that action, they have not as yet been challenged in court. It is perhaps open to doubt whether they are acting legally.
      Where a particular development is environmentally acceptable in some areas but not others, the situation can be dealt with by the use of development orders under section 24 of the 1971 Act. These are subject to parliamentary procedure. I do not consider it acceptable that local authorities should, in effect, be given the power to amend Acts of Parliament, or that such a fundamental incursion into the rights of individuals to use and dispose of their properties as they wish should be delegated in that way to local planning authorities.
      The hon. Gentleman was very fair and accepted that there was no way in which the Government would be in the business of buying up more homes. Indeed, in planning terms as well, our policy is to reduce public sector activities as far as possible. I regret to have to tell the hon. Member that what he has suggested is out of place in a Bill of this kind, the prime aim of which is to reduce controls. Indeed, it contains a number of measures, which we shall eventually discuss, to speed up the whole planning process.
      I take note of the strong feelings that have been expressed. Certainly, the Government will watch very carefully any further developments in this area.
      Mr. Wigley: I am sorry that the Minister was not able to go further than he has tonight. Frankly, it is not enough to watch developments. Developments are already taking place in Wales. There have already been 40 incidents of arson. I would have thought that what has already happened would be enough to make the Government realise that this problem must be tackled now and that it is not one to be watched in the future. As I have said, it is not a problem just in Wales.
      I believe that there are certain times and circumstances—I believe that the Government accept this as well—when one needs regulations. This is one of
      1834
      those times. One does not want regulations for their own sake; one wants regulations and controls because a problem exists. A problem exists in the county of Gwynedd because 4,000 or 5,000 families cannot get homes. From the response that we have had tonight, the message that will go back loud and clear is that no answer will be forthcoming from the Government to these problems. Frankly, that will be greeted with considerable dismay in my area.
      I believe that the Government should and could have gone further in what was said tonight. Had they done so, it would have helped to defuse the problem. In closing the door on any possibility of moving in the direction that I have suggested—I regret to use these terms—they are fanning the flames, which is highly regrettable and irresponsible. I use that word advisedly, because their response will aggravate the problem rather than solve it.
      As the Minister has said, the Lake District has taken the law into its own hands because of the nature of the problem. It may or may not be acting ultra vires; it has not been challenged in the courts. That is my understanding of the position as well.
      Surely that underlines to the Government the strength of feeling that exists in responsible local authorities in areas such as the Lake District. In Wales, in addition to the rural problems, we have the linguistic and cultural dimension. If in areas such as the Lake District people are taking the law into their own hands, surely the Government should be making a better response than they have tonight to these problems.
      When opening the short debate I mentioned Poole. The local authority there has raised the question whether there is a material change of use when a block of flats become holiday flats rather than accommodation that is used all the year round. There again we see responsible people who recognise the reality of a problem in their own area and who feel that something needs to be done about it.
      The Government's attitude tonight is that they will do nothing about the problem. That is the message that I shall have to take back to Gwynedd—that the Government intend to do nothing about the problem. I shall ask Opposition Members—I hope that they will be joined by

      1835
      some Conservative Members from rural areas—to respond by dividing the House.
      Mr. King: My hon. Friend the Under-Secretary of State responded very sympathetically to the amendment tabled by the hon. Member for Caernarvon (Mr. Wigley), and it is not fair for the hon. Gentleman to pursue the charge that he has made against the Government. We all admire and respect the ingenuity with which he has been able to raise a serious matter under the Bill. As an old and experienced hon. Member he knows perfectly well that the issue that he is raising is a housing issue.
      The problems that the hon. Gentleman described are present in my own constituency. I understand them perfectly well. I agree with him that they are very serious problems. But, as I have already indicated, he has used his ingenuity in order to raise the matter in the context of planning law. Until his last-minute appeal to Mr. Speaker, it was not thought that he would be successful in raising the question on the Floor of the House.
      It is unfair for the hon. Gentleman to say that the Government have totally rejected consideration of the problem. It is unfair for him to suggest that we are fanning the flames. He was perfectly entitled to raise the matter in the way that he did, but he seems in some ways to have been exploiting the difficulty that we face. Technically, he has been able to raise a serious housing issue in the planning context of the Bill now before the House. In these circumstances, it is not fair for him to allege that there has been a total rejection of his proposals. We have sought to respond sympathetically and to explain, why, technically, we could not accept the amendments.
      Mr. Wigley: I hear what the Minister says. On 20 December, just before Christmas, my hon. Friend the Member for Merioneth (Mr. Thomas) and I had a meeting with the Under-Secretary of State for Wales—the hon. Member for Conway (Mr. Roberts)—to explore ways of tackling the problem. Two ways were suggested at that meeting. One was by amendments to the Housing Bill, which was then going through Parliament; the other was by amendments to this Bill. Both were regarded as possibilities. It is for that reason that these amendments
      1836
      have been brought forward today. If the Government speak with one voice in one place and with another voice in another place, that is not my fault.
      We tabled amendments to the Housing Bill. We were given to understand that it was more of a planning problem than a housing problem, and we were told that the amendments would not be called. Now that we have tabled amendments to this Bill, the buck is tossed back the other way.
      Our argument is that the Government can respond, even though they may not accept the technical wording of the amendment or even our approach to the problem. They can still respond, because the Bill is going through this House and the Housing Bill is going through another place. The Government could say that they are willing to consider the matter in relation to either of the two Bills. I do not mind which one it is, provided that something is done about it.
      It is because the Government are not prepared to meet us here and have no intention of meeting us on the other Bill that I have accused them of being complacent. How am I to explain that attitude in my constituency? What message am I to take back to the people who are concerned with the problem and who are living with it from week to week? It is of concern not only to the families who do not have homes but to the people who have second homes. A satisfactory solution to the problem must be found, but from what I understand, no answer is forthcoming from the Government. They have nothing to offer as an alternative way forward. If they did, I should be only too willing to withdraw my words of accusation.
      I hoped that the Government would provide a glimmer of light, but there is none. It is no use the Minister's accusing me of using inflammatory language. It is an inflammatory problem. I am living with it in my constituency. I have constituents who have been taken into custody by the police for the activities that have taken place in the last few months. This is a very real problem, and no answer whatever has been forthcoming from the Government Front Bench. That is why I get annoyed about it.
      I am still hoping that the Government Front Bench will say that they will look

      1837
      at the problem, if not in terms of this Bill, then next year. I am hoping that they will consider the possibility of some other form of legislation that would ameliorate the problem, perhaps by making legal the kind of step taken in the Lake District and elsewhere. Will the Government give any assurance at all that they will consider any other approach to the problem?
      Mr. King: The hon. Gentleman knows something of how government works and the problems involved. The amendments were tabled late last week, on the Report stage of the Bill, at a time when there were already a considerable number of other amendments on a major policy issue.
      The hon. Gentleman put his point perfectly fairly. We shall consider the matter. I shall have discussions with my right hon. and hon. Friends in order to see what further suggestions can be made. That is the positive way to approach the matter. It needs discussion across Government, because a number of issues are involved. It needs preparation; it cannot be done by a fairly late amendment to a Bill. The hon. Gentleman was ingenious and correct in getting the amendments before the House, but it was hardly fair to describe the Government's conduct as outrageous because they had not produced a complete policy to deal with the problem.
      Having given the hon. Gentleman that assurance. I hope that he will regard it as a reasonable response to his request.
      Mr. Wigley: I am grateful to the Minister for that response. The reason why there were no amendments tabled in Committee was, of course, that my party was not represented on the Committee; in fact, there were no hon. Members from Wales on the Committee dealing with the Bill. That is the simple reason, presumably, why the problem did not raise its head before. I put forward the matter on Report in consequence of discussions that we have had with branches of Government. But if the Minister is willing to enter into meaningful discussion on a cross-party basis, to try to find a way of answering the problem, I shall be prepared to ask leave to withdraw the motion.
      Mr. King: I used the phrase "across Government". There are a number of different aspects to the problem.
      Mr. Wigley: I take the Minister's point. Obviously it would have to be across Government, because there are different Departments involved. I assume that there would be an opportunity for other parties to make their representations, in the hope that, not in this parliamentary year but perhaps in the next, there may be progress towards achieving a solution to this vexed problem.
      I am happier now that there is some light that I can take back to the area. If I needed to raise my voice, it was in order to get that assurance, and not to aggravate the problem. I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    Clause 1

      RELAXATION OF MINISTERIAL CONTROL OF AUTHORITIES
      Mr. Ted Graham: I beg to move amendment No. 1, in page 2, line 30, leave out subsection (5).
      Mr. Deputy Speaker: With this it will be convenient to take the following amendments:
      No. 2, in page 2, line 31, after 'effect', insert
      '(but not before January 1st 1982)'.
      No. 224, in page 123, line 39, leave out Schedule 5.
      Mr. Graham: We now come to the main body of the Bill. The first two amendments and the later amendment are not tabled in order to persuade the Government that they ought to take more interest in, or to have more sympathy with, the allotments movement. We were grateful in Committee for the fact that the Minister of State and the Government responded to several suggestions that we made to stay the hand of the Government in repealing certain enactments. We therefore start this short debate not at cross purposes with the Government, because they believe, as we do, that the allotments movement is one that ought to be fostered and encouraged.
      The House needs to be reminded that the genesis of the Government's intentions

      1839
      in this respect, as in many others that were sought to be repealed, comes from the oft-trumpeted cry of the Government, and particularly the Secretary of State, that it was their intention to leave everything to local people because the local people know best. I have no doubt that a great many people in the House would subscribe to that maxim.
      The question that was raised time and again in Committee was whether local authorities could be trusted to act in the local and national interests on allotments. The rationale of schedule 5 and clause 1 is that local authorities can be trusted, but trusted against the background that they would accept the obligation under section 23 of the 1908 Act. That obligation is
      "to provide a sufficient number of allotments."
      The country must grapple with the question of whether, against the legislative safeguard and assertion that local authorities are under an obligation to provide a sufficient number of allotments, the record shows that they have.
      6.30 pm
      The picture as to the size of the allotment movement is patchy. One of the reasons for our sadness has been the inability of the Government and local authorities to monitor fully and faithfully the extent to which there is an allotment movement. In 1969 it was estimated that there were about 560,000 allotments covering 60,000 acres of land. By 1977, the number had declined to 498,000 allotments covering 50,000 acres. Every year during the 1970s the country lost 72,000 acres of land as a result of development and road building. It is not possible to leave either to local authorities or to the Government on a loose rein an obligation to provide a sufficient number of allotments if that is the yardstick against which we measure.
      I ask the Government to stay their hand on the repeals listed in the schedule, and speed up the updating of the recommendations of the Thorpe report. The Government submitted to the Committee proposals for the repeal of 10 Acts which they felt were superfluous to the task of local authorities and the Government. I remind the House that in Committee the Government decided to drop one of the repeals that were sought. We argued strongly about that, and the Government conceded that
      1840
      they were willing to grant the repeal. The Government resisted all the other amendments. The amendments include questions of how money that is obtained from the disposal of allotment land should be used. We say that it should be used to improve and extend the allotments. The Government believe that that should be left to the discretion of local people.
      The Under-Secretary of State must consider, in the context of what I believe is a terrorising climate that the Government are visiting upon local authorities in their determination to cut, slash, revise and repeal—given the opportunity that this repeal would allow to sell allotment land—a temptation to sell some land. Having sold the land, and diminished the amount of land available for allotments, the local authority may then decide to use the money for other purposes.
      In Committee we were told that there is a legal obligation within the legislation for the provision of allotments, but without legislative safeguards—the schedule does away with the legislative safeguards—the legislative obligation is simply paying lip service to the law. In Committee we said that we were unhappy that section 54 of the 1908 Act was to be repealed. That provides a statutory obligation to keep separate allotment accounts. The Government consider that there is no need in the 1980s for an authority to keep separate allotment accounts. That sits rather strange with a Government who later, in clause 2, insist upon local authorities not only keeping accounts but publishing them and making information as widely available as possible.
      So much for open government. On the one hand, the Government are professing to open the books and to train the searchlight on town halls, but, on the other they intend to remove the present safeguards. That is not only retrograde; it is hypocritical. The Government are saying that experience has proved that some of these legislative safeguards are seldom, if ever, used and that, therefore, they can be repealed. That overlooks the fact that the reason why these safeguards are seldom used is often simply that they are there. One does not dispense with a watchdog simply because it has never been called

      1841
      into action, and one does not repeal legislation simply because no one has had the need to use it. Often it is a powerful safeguard simply because it exists.
      It is the duty of Parliament to ensure that the minority interests—allotment holders are minority interests—are protected. Whose job is it to encourage the allotment movement? Who has the job of making better use of waste land and getting better value out of our land? Who has the job of encouraging recreational gardens?
      I turn now to the gravamen of the Opposition amendment. We are not saying that there is not a need for the repeal of some aspects of the allotment legislation.
      The Thorpe report was commissioned by the Labour Government in the 1960s, and it was published in 1969. It is not to our credit, nor is it to the credit of the Government, that it has taken about 10 years for the Thorpe report to be re-examined. The Minister told the Committee that the Government were minded to look seriously at the question whether now was the time to update the Thorpe report and bring forward legislation in a suitable form. The Minister said:
      "At present we are considering comprehensive legislation to take in the Thorpe report. There has been in the background of the Government's thinking for some time what is called a recreational gardening Bill."—[Official Report, Standing Committee D, 12 February 1980; c. 46.]
      If there is not an open door, at least the Government are sympathetic to the need for comprehensive legislation. But the Minister went a little too far when he told the Committee that this radical reforming Administration were looking at the matter seriously. We want the Government not only to look at it seriously but to give us a commitment that they will legislate.
      We think that it is better to wait a little longer, to bring the Thorpe report's recommendations out of the 1960s into the 1980s, to take on the main thrust of the Thorpe report and to legislate along a number of lines.
      For example, one of the Thorpe report's recommendations—there are over 40 such recommendations—is to abolish the term "allotments" and to replace it with the term "leisure gardens". I do
      1842
      not think that there could be any exception to that. It wants to create established and non-established sites, to oblige authorities to provide established leisure gardens at the rate of half an acre per thousand population and to register leisure gardens with the Department of the Environment so that we may know precisely the size. It wants each local authority to have a strategic plan to develop and to improve leisure gardens. It wants to improve communications and participation between authorities and gardeners and it wants gardeners to accept their obligations. Incidentally, recommendation No. 42 suggests that a leisure gardens authority.
      "should be permitted, if it so desires, to set aside special areas of land for the keeping of pigeons or small livestock".
      A number of people—one might call them small, but I know that the Minister would not say that they were unimportant—have taken a great interest in this matter. I received a letter from the editor of The Racing Pigeon in which he said:
      "As you may know, a number of allotments, particularly in the North, are used by racing pigeon fanciers to keep their thoroughbreds, usually with friendly relationships with the other allotment users. We are therefore concerned with the new Local Government, Planning and Land Bill".
      I use that as an illustration. I accept that there are many people outside the House whom the Government wish to assist. They await the outcome with a great deal of interest.
      In view of the welter of new regulations and requirements being imposed on local authorities, we want the Government to take more time to get the matter right. We cannot believe that councils are desperately waiting for these repeals to take place. They can be patient a little longer. The amendments will give the Government the opportunity to take a little more time and to do the job right. It is in that spirit that I commend the amendments to the House.
      Mr. R. C. Mitchell: The first public office that I held was that of chairman of the allotments sub-committee of Southampton corporation. This debate takes me back a few years. When I was first appointed to that exalted position I felt that I was in for a fairly quiet life, but I was wrong. I do not know whether any hon. Member here has served on the

      1843
      allotments committee of any council, but I can say that such committees often generate great passion, disagreement and interest.
      Why do many councils have separate allotments committees? It is because they and ordinary people regard allotments as very important. I am not happy about changing the name from "allotments" to "leisure gardens". Many people today have allotments not for leisure but to save money. With the cost of food today, someone who has an allotment can save himself a substantial amount of money. During the past few years we have built high-rise flats. Allotments have provided flat dwellers with the opportunity not only to get out and have a leisure interest but to save money.
      Allotments are under threat for two reasons. First, in many of our large cities where allotments are needed most there is a shortage of land. Any council looking for land tends to look first at allotments. It does not look at the parks, because they are areas of natural beauty. If a council took a piece of parkland on which to build there would be a tremendous outcry from the public, but people do not take the same general view of allotments.
      6.45 pm
      Secondly, councils are now looking at allotment land as revenue-raising potential. For example, if they change their planning permission within their own machinery from allotment to building land, they can sell it and make a considerable sum of money, which can help their revenue. In view of the squeeze that is being levied on local authorities by the Government, local authorities are looking for every penny that they can find, and I suspect that many of them will have their eyes on allotments.
      I have had many representations, as have others, I am sure, from allotment associations and individuals who use and maintain allotments to do my best to save them. I should be opposed to any proposal that would weaken the position of allotment holders or associations. I believe that the Government should be able to act as an appeal body against a local authority's decision to take away or change the use of an allotment. We should keep every possible safeguard, because allotments will become even more important in future. For example, I
      1844
      think that allotments will grow in importance for people who live in high-rise flats. On the other hand, allotment land will be looked at with greedy eyes by authorities which may think that they can make money out of them by using them for other purposes.
      I support any amendment that will safeguard the position of allotments and allotmenteers.
      Mr. Stephen Ross: I support everything that has been said by the hon. Members for Edmonton (Mr. Graham) and Southampton, Itchen (Mr. Mitchell).
      The hon. Member for Edmonton waxed eloquently at length in Committee on the subject of allotments, and he has repeated his performance today. Indeed, he has covered everything that needs to be said. I think that, largely due to his persuasive powers, the Government made an important concession in Committee when they agreed that the proposed repeal of section 8 of the Allotments Act 1925 should be taken out. I understand that authorities that now wish to sell allotment land will still have to obtain ministerial consent. That is a protection, and we are grateful for it.
      As the hon. Member for Itchen said, this comes at the end of the line. Of the other nine repeals, I suggest that five or six at least weaken the position of allotment holders. We know that it will be not the authorities greedily looking for allotments to sell but authorities that are desperate to raise funds which will say "Where else can we look? What can we do to save the situation"? As I suggested in Committee, chief officers will come forward with recommendations to sell allotments. Although they may come up against the Minister at the end of the line, I think that they may find ways around that problem. There is to be the repeal of section 22 of the Land Settlement (Facilities) Act 1919, which talks about the appropriation of allotment land for other purposes. Under that guise a chief officer will no doubt be able to suggest ways in which allotment land can be used without having to apply to the Minister for consent to dispose of it. He will be able to use it for other purposes—for example, leasing.
      I agree that this proposal weakens the position of allotment holders. I beg the

      1845
      Government to think again. They have a legitimate reason for withdrawing it. The Thorpe report has been lying around for about 10 years. Why not remove the whole schedule and say "We agree that this has caused great concern in the country. We feel that we ought to listen to the views of the many people who have made representations. Therefore, we shall take out this provision and consider whether we can come back with a smaller Bill in order to improve their lot"?
      It is important to encourage allotments. The hon. Member for Edmonton gave some figures. If we had figures that were up to date we would probably find that there was a long waiting list for allotments. Many people are desperate to get an allotment, and there is a need to provide more. The Western world may have a surplus of food, but that will not last. The projections for the world population in the years 2000 are frightening. In the next few years more people will need to grow more food for themselves. That should be encouraged. We should not take a step that would take us in the opposite direction.
      It should be a priority to encourage those who grow their own food. That priority will be urgent by the 1990s. I beg the Government to think again and to accept one of the amendments tabled by the hon. Member for Edmonton.
      Mr. Nigel Spearing: I declare a family interest in an allotment. That form of recreational activity is useful and important. Allotments are particularly important, because some people are not fortunate enough to have large enough gardens in which to grow vegetables or to provide useful recreational activity.
      We are increasingly looking at hard accounts. We may be on a plateau of productivity. The quality of life will become even more important. That view is held by many hon. Members—if not the majority—and by the majority of the population. The Government of the day—whatever their political colour—are responsible, and must not do anything to diminish the opportunities for qualitative activities such as gardening. Indeed, such opportunities should be increased.
      Although I welcome the Bill's amended form, it still represents a threat. My hon.
      1846
      Friend the Member for Southampton, Itchen (Mr. Mitchell) and the hon. Member for Isle of Wight (Mr. Ross) made it clear that land given to gardeners many years ago may become a source of speculation by hard-pressed local authorities. If planning permission is given, such authorities can make money overnight. If land is held for future housing development—alas, no longer possible—or for any other reason, it may temporarily be allowed to be used for the purpose of allotments. However, the proposed scheme may be cut back, and the local authority may see a way of making easy money. The Bill contains pressures that will encourage local authorities to do that.
      Those who were members of the Committee are only too familiar with the fact that the Bill would put pressures on local authorities to dispose of such land. How much more attractive is it not merely to dispose of the land but to make a big profit, by granting planning permission? Many useful areas of allotment land are close to densely populated areas. People can get to allotments without difficulty. They can travel by foot or on a cycle, and they can carry tools or produce to and from their homes. That qualitative aspect is important. However, those same sites are often the very ones that local authorities wish to dispose of. The existing safeguards are not good enough.
      I support the amendment, because the existing legislation is not doing its job. The example that I shall quote to sustain that accusation comes from the London borough of Croydon. The secretary of the London Association of Recreational Gardeners has put together some material and sent it to me. He draws attention to the shocking case of Croydon. That borough has seen a lot of recent development, has a well-planned communications centre and so on.
      The association says that the intentions of the existing Act are not being realised. Its secretary says:
      "The intentions of this section of the Act were very clearly stated by Minister Tom King during the debate on the Bill in Committee 'D' on February 14th (Col. 102) when he said in respect of allotments account surpluses that 'it remains a legal responsibility on Councils that their first priority is to use proceeds of sales of allotment land, in the first instance, for allotments purposes'."

      1847
      The words "in the first instance" are underlined. The letter continues:
      "There is much evidence in the files of this Association that section 32 of the Act, as it stands, is being considerably abused. The treatment of considerable surpluses from the sale of statutory allotment land in the London borough of Croydon is probably the worst example we have on record, a case where a Council, with the collusion of the Secretary of State for the Environment, has transferred of the order of £250,000 per annum from the Allotments Account to the general rate fund annually and has done for at least five years. Estimates prepared in 1974 for outstanding allotment requirements totalling £62,000 … have never been implemented.
      We submit that this practice is far from being in keeping with the intentions of this Section of the Act and in view of Tom King's statement it appears that communications within the Department of the Environment are, to say the least, inadequate."
      To back up his accusations the secretary included an interesting letter from the Department of the Environment, which was addressed to the director of finance of the London borough of Croydon. It states:
      "I am directed by the Secretary of State for the Environment to refer to your letter of 24 January 1977 and to say that, in pursuance of his powers under Section 54(1) of the Small Holdings and Allotments Act 1908, he consents to the transfer of a sum of £266,969 (being accrued revenues in the Allotments Account) to the General Rate Fund for use in connection with any of the statutory authorised functions of the council."
      One London borough is doing that. Some hon. Members may think that that borough is relatively enlightened. If that is happening in an enlightened borough, one wonders what might be happening elsewhere.
      The London Association of Recreational Gardeners has sent a considerable amount of evidence to show that the existing Act is being circumvented. It points out that, although at least one London borough is putting large sums of money into its general revenue account, it is not replicating existing allotments. If that is so, the law should not be weakened but strengthened. The amendment does not strengthen the law; it merely maintains the status quo. It will still allow Croydon to act in the way claimed by the association. I have every reason to believe that the association's claim is correct, and the case for strengthening the Act is overwhelming. The case for maintaining the status quo can hardly be less.
      1848
      I am sure that the Under-Secretary has received both formal and informal representations since the end of our Committee proceedings. In view of the clear evidence, I hope that the Government will consider maintaining the status quo. If the status quo is maintained, the Department can still write its letters to the directors of finance, and it can still give permission to any local authority to put these sums into the general rate fund, if it so wishes. Perhaps the Department will wish to encourage that. If it does—and this is a fundamental of parliamentary democracy—those moneys must be kept separate in the local authority's accounts. Let it be transferred, if the council wishes and if the Secretary of State permits it, but if that is done it must be seen to be done, and only by accepting the amendment will that be so.
      7 pm
      Mr. Freud: I wish to say here and now that I propose to use the word "allotment". I resent any idea that the phrase should be "leisure garden" or any other euphemism. Most of us are sick of Government legislation in which something is called something else in order that it may be messed around with to the detriment of people.
      The allotment legislation was passed in 1908, 1919, 1922 and 1925 during years of high unemployment and low productivity. To bring in legislation now that will weaken the allotment movement when we are going through a time of the same high unemployment and low productivity which caused sensible Governments in the past to bring in legislation whereby people who had insufficient work were given allotments would be a grave mistake.
      I am a great fan of allotments, and unlike the hon. Member for Southampton, Itchen (Mr. Mitchell) I have never sat on an allotments committee. Heaven knows, since I have been a Member of Parliament enough people have asked me to intervene on their behalf with the allotment committee. I believe that an allotment is socially, economically and ecologically a good thing. Although I accept that the Government, in cutting rate support grant, are trying ever harder to give local authorities options whereby they may raise money which they previously expected

      1849
      to receive, and in fact received, from central Government, I do not believe that the average local councillor is pleased to have this sort of hot potato put into his hands.
      I shall tell the Government Front Bench what will happen. The sale of allotments will be an immensely unpopular act. When one local authority sells allotment land, at the next election the Opposition will say "Vote for us, and in the time-honoured British political tradition we will reverse what the last lot did." Let us face it, that is what British politics are about. It is all a matter of "Vote for us and we will undo what the last lot did." Then the next lot will do the same to the last lot.
      I warn the Minister that if this lot are allowed to sell allotments they will lose their seats and the next lot will promise to reverse that, by which time the cost will have gone up and the next lot will will be able to say "Look how badly that lot looked after our local authority finances. We will sell allotments again." The famous two-party system whereby one lot undoes what the last lot did will be perpetuated in local government.
      The Government should look again at the amendment of the hon. Member for Edmonton (Mr. Graham), calling for delay of the enactment at least until early 1982. It is an eminently sensible suggestion. I am not sure that the Government can go on appointing committees, not looking at their reports and ignoring their recommendations. That has been done three times in the last 10 days. I have had to point out to various Government Departments what the Rothschild report says on one matter and what the Warnock report says on another. Governments set up committees because it is a useful way of buying time. In this case the Thorpe report has been around for 11 years and we are asking for a two-year moratorium so that it can be looked at again with care.
      Our constituents will be sorry to see that there are only two Conservative Back Benchers here for this debate. There are only three on the Labour Benches, and two on the Liberal Benches. I should have thought that the allotment holders of this country deserve more.
      Mr. Spearing: Wait until the vote.
      Mr. Freud: I shall await the vote with interest. My point is simply that I am in favour of the amendment and I shall support it wholeheartedly.
      Mr. Spearing: Does the hon. Gentleman agree that any hon. Member who votes against the amendment will be voting, in effect, to liquidate or give permission for the liquidation of, allotments for hard cash which should be provided by other means?
      Mr. Freud: I accept that.
      Mr. Fox: The first round of this debate was in Committee, and I should have been warned that on Report we would have a similar debate.
      I was astounded to hear the hon. Member for Newham, South (Mr. Spearing) talk about liquidating allotments. We are simply seeking to remove a few controls that we think are unnecessary. I shall give a few examples. Local authorities must make an annual report to the Secretary of State and he must make an annual report to Parliament. That is one of them. The Secretary of State must consent to making a grant or advance to the co-operative allotment society. Rules made by local authorities for the management of their allotments must be confirmed by the Secretary of State. If anyone can see in the removal of that the liquidation of allotments, he is using rather intemperate language.
      As the Minister of State made clear in Committee, the Government accept that in no sense must this be seen as an attack on allotments or allotment holders. The hon. Member for Southampton, Itchen (Mr. Mitchell) referred to his own service on the allotments committee of his local authority and he said that local authorities were mindful of the need to provide allotments. Councillors are far closer to those who want allotments and those who work them than we are. If the only hope of maintaining a viable allotment organisation in this country rests on the interest of Members of Parliament, we are in a parlous state. I cannot think of any subject which should be more the concern of local representatives or is more suitable for being handled locally than that of allotments.

      1851
      I repeat that the Government recognise the value and importance of allotments as a source of recreation and food. That is why we accepted an amendment in Committee which meant the retention of section 8 of the Allotments Act 1925. The hon. Member for Edmonton (Mr. Graham) scored a victory on that occasion, and he has now returned to the battle hoping that the Government will not continue their policy of removing unnecessary controls. I am afraid that his victory ended with his achievement in Standing Committee.
      Because of the anxiety, we retained the provision to require local authorities to obtain the Secretary of State's consent to the appropriation or disposal of statutory allotment land—not only disposal but also appropriation. That was seen as the key safeguard of the interests of plot holders.
      Mr. R. C. Mitchell: I was not a member of the Committee. Did the amendment accepted by the Government refer only to statutory allotment land?
      Mr. Fox: That is my undestanding. If I am wrong, I shall write to the hon. Gentleman.
      I hoped that that provision would allay the understandable fears of the allotment movement. The provision of allotments is essentially for local authorities, which are best able to judge local needs and how to meet them, with the minimum of interference from Whitehall. They should decide what proportion of their resources they are prepared to allocate for allotments, bearing in mind the availability of land and the demands on available financial resources.
      The Government are sympathetic to the broad thinking underlying the Thorpe report that the existing legislation on allotments should be tidied up. Allotments—or dare I call them leisure gardens—should not be tucked away in a remote corner but should be regarded as a valuable recreational resource which local authorities should be free to provide in much the same way as they provide other recreational facilities. The Government do not, however, accept that the detailed rules and restrictions that Thorpe envisaged are appropriate in the 1980s, although tenants should be protected from dispossession without reasonable
      1852
      cause. We intend to give the matter detailed consideration when the opportunity permits. The report has been around for some time, and I know that that assurance will not satisfy everyone.
      We do not accept that this legislation weakens the Government's powers. It was only after the fullest consideration that we decided that the controls could be dispensed with without causing problems. The proposals in the Bill are designed to get rid of certain controls that the Government exercise over the activities of local authorities in relation to allotments. They have no other purpose.
      Mr. Stephen Ross: Item 7 in schedule 5 reads:
      "Land Settlement (Facilities) Act 1919 (c. 59) 7. Section 22(1) (consent to appropriation of land)."
      Local authorities, because of financial restrictions, may, for instance, wish to move the sanitation department to allotment land and sell off the vacant land. With respect to the hon. Gentleman, appropriation remains.
      Mr. Fox: I note what the hon. Gentleman says.
      The proposals in the Bill are designed to get rid of controls which we believe serve no useful purpose.
      The DOE circular in 1974 gave councils a blanket consent under section 32(2) of the 1908 Act to apply allotment money to other purposes, where they considered it to be surplus to requirements. The hon. Member for Newham, South gave the example of Croydon. However, financial protections remain. In Committee we more than met the anxieties expressed.
      Mr. Spearing: I hope that the Minister agrees that the example I gave is correct. The figures show that I am not exaggerating. The hon. Gentleman says that financial safeguards still remain. Does that mean that at a later stage in the Bill the Government will agree to there being an obligation on local authorities to maintain separate accounts, even though they do not need the permission of the Minister to sell land? An obligation on councils to maintain separate accounts would not be onerous and would protect ratepayers and allotment holders alike.
      7.15 pm
      Mr. Fox: I believe that local authorities will automatically keep separate accounts. We are not removing the necessity for the Secretary of State to be notified, and I do not accept that local authorities will behave in the way implied by the hon. Gentleman's question. We believe that local authorities can be trusted to run their allotments. The restrictions under the 1908, 1919 and 1925 Acts will still apply, and it will be extremely difficult for local authorities not to keep separate accounts if they are to remain within the law.
      I repeat that the Government firmly believe that the removal of controls will not cause the hardship suggested. In Committee we agreed to retain the provision that the Secretary of State has to be notified before disposal of land. We believe that we have done more than enough to meet the anxieties. I invite the House to oppose the amendment.
      Mr. Graham: The Minister has increased our anxieties. In Committee we read more into his words than we should, and therefore we did not press other amendments. He said that he was minded to look at the possibility of more comprehensive legislation based on the Thorpe report. We believed that that review would be tied to some time scale and not put off until next year, some time or never. I do not accuse the Minister of misleading us. However, he expressed anxiety about any damage that may be caused to the allotment movement. We wish to spur on the Government to provide legislation in the next 18 months.
      The hon. Gentleman said that the Government were merely removing a few controls, which he suggests are superfluous or minimal. Why, therefore, carry through the legislation? Why go through these traumas if the Government are serious about acting on the Thorpe report in the next two or three years? The anxiety may be unnecessary, but many people are concerned about the legislation.
      My hon. Friend the Member for Newham, South (Mr. Spearing) gave a good example of what can happen even under the present legislation. It is possible for money from the sale of allotments to be transferred to a general rate fund. The transfer of £264,000 was not only
      1854
      desired by the Croydon local authority but endorsed by the Department of the Environment. We are not suggesting that there was skullduggery, but local authorities may decide to use such windfalls in ways other than for allotments.
      People not only need a champion to question the diminution of allotments in Croydon, Newham or Southampton; they need to be assured that, if land is sold to make a profit and they lose, say, 200 allotments in one area, the same number will be provided in another part of the town. We are not saying that local authorities ought to provide more allotments, though my hon. Friend the Member for Newham, South and the hon. Member for Isle of Wight (Mr. Ross) rightly pointed out that it is not merely a question of maintaining the existing number of allotments, because there is a need for more and there are waiting lists.
      We are not suspicious of the Government's general sympathy with the allotment movement, but the repeal of the various Acts makes many people uneasy about what may happen. In the past councils may have been happy to maintain an allotment programme, but the Government have changed the climate. The Secretary of State is telling councils to look at their staffing levels, rates and income. Any council that wishes to respond meaningfully is bound to look at the possibility that there may be some land that is not in demand and could be sold.
      Many hon. Members have served on councils and we do not impugn the integrity of councils. But we all know that a chief officer, under pressure from the centre and from the chairman of the finance committee, may produce a paper on where an extra £1 million can be found or saved. One of the options could be that allotment land that had been running down should be run down completely and sold, with the money perhaps being reinvested in other land.
      Mr. Spearing: Is it not more tempting than that? In order to make sure that the community gets the maximum amount of money from the disposal of any land and in order to please the Secretary of State as much as possible, will not a council seek advice on the maximum planning gain and population density that could be achieved from that land?

      1855
      Has my hon. Friend noticed that there are many councillors, particularly from planning, estate agency and other professions, who are so public spirited that they give up their time to serve on councils where they can give such useful advice?
      Mr. Graham: My hon. Friend has made an interesting point. I am sure that before disposing of land a council will take soundings about the likely alternative use, the zoning of the land and whether it could be rezoned for industry or housing. It may even be worth more as public open space than as allotment land.
      The allotment movement knows that when the Government and a local authority are of a like mind and an opportunity to dispose of land is presented, consent from the Secretary of State is almost
      academic. If the Secretary of State is anxious to ensure that a local council is enabled to raise money, he will approve the disposal of the land and the use of the revenue for other purposes.
      We are sorry that the opportunity of delay for perhaps 18 months that is contained in the amendments to enable the best parts of the Thorpe report to be given legislative flesh has not been taken. The Minister has given a negative response to the House and to the allotment movement. In the best interests of allotmenteers and, in so many ways, the country, we have no alternative but to press our amendment to a Division.
      Question put, That the amendment be made—
      The House divided: Ayes 73, Noes 129.

      Division No. 386]

      AYES

      [7.26 pm

      Archer, Rt Hon Peter

      Grant, John (Islington C)

      Roberts, Ernest (Hackney North)

      Barnett, Guy (Greenwich)

      Grimond, Rt Hon J.

      Rodgers, Rt Hon William

      Beith, A. J.

      Hamilton, W. W. (Central Fife)

      Ross, Stephen (Isle of Wight)

      Booth, Rt Hon Albert

      Harrison, Rt Hon Walter

      Silkin, Rt Hon John (Deptford)

      Bray, Dr Jeremy

      Hattersley, Rt Hon Roy

      Skinner, Dennis

      Callaghan, Jim (Middleton & P)

      Haynes, Frank

      Soley, Clive

      Campbell-Savours, Dale

      Heffer, Eric S.

      Spearing, Nigel

      Cartwright, John

      Homewood, William

      Spriggs, Leslie

      Cocks, Rt Hon Michael (Bristol S)

      Howells, Geraint

      Steel, Rt Hon David

      Crowther, J. S.

      Johnson, Walter (Derby South)

      Stoddart, David

      Cunliffe, Lawrence

      Kerr, Russell

      Stott, Roger

      Davidson, Arthur

      Lamborn, Harry

      Strang, Gavin

      Davies, Rt Hon Denzil (Llanelli)

      Leighton, Ronald

      Straw, Jack

      Davis, Clinton (Hackney Central)

      Litherland, Robert

      Summerskill, Hon Dr Shirley

      Davis, Terry (B'rm'ham, Stechford)

      McCartney, Hugh

      Thorne, Stan (Preston South)

      Dixon, Donald

      Maclennan, Robert

      Wainwright, Richard (Colne Valley)

      Dormand, Jack

      Marks, Kenneth

      Welsh, Michael

      Douglas, Dick

      Mitchell, R. C. (Soton, Itchen)

      Wigley, Dafydd

      Douglas-Mann, Bruce

      Newens, Stanley

      Willey, Rt Hon Frederick

      Dunwoody, Mrs Gwyneth

      Oakes, Rt Hon Gordon

      Winnick, David

      Eastham, Ken

      O'Neill, Martin

      Young, David (Bolton East)

      Evans, John (Newton)

      Park, George

      Foot, Rt Hon Michael

      Penhaligon, David

      TELLERS FOR THE AYES:

      Foster, Derek

      Powell, Raymond (Ogmore)

      Mr. Joseph Dean and Mr. George Morton.

      Freud, Clement

      Price, Christopher (Lewisham West)

      Graham, Ted

      Race, Reg

      NOES

      Alexander, Richard

      Colvin, Michael

      Hawksley, Warren

      Atkins, Rt Hon H. (Spelthorne)

      Cranborne, Viscount

      Heddle, John

      Atkins, Robert (Preston North)

      Crouch, David

      Henderson, Barry

      Baker, Nicholas (North Dorset)

      Dean, Paul (North Somerset)

      Heseltine, Rt Hon Michael

      Beaumont-Dark, Anthony

      Dorrell, Stephen

      Hogg, Hon Douglas (Grantham)

      Bell, Sir Ronald

      du Cann, Rt Hon Edward

      Hooson, Tom

      Benyon, Thomas (Abingdon)

      Dunn, Robert (Dartford)

      Hordern, Peter

      Berry, Hon Anthony

      Eggar, Timothy

      Howell, Ralph (North Norfolk)

      Best, Keith

      Elliott, Sir William

      Hunt, John (Ravensbourne)

      Biggs-Davison, John

      Eyre, Reginald

      Johnson Smith, Geoffrey

      Blackburn, John

      Fairgrieve, Russell

      Jopling, Rt Hon Michael

      Body, Richard

      Faith, Mrs Sheila

      Kellett-Bowman, Mrs Elaine

      Bottomley, Peter (Woolwich West)

      Farr, John

      King, Rt Hon Tom

      Brinton, Tim

      Fenner, Mrs Peggy

      Lamont, Norman

      Brooke, Hon Peter

      Finsberg, Geoffrey

      Lawson, Nigel

      Brown, Michael (Brigg & Sc'thorpe)

      Fletcher-Cooke, Charles

      Lee, John

      Bruce-Gardyne, John

      Forman, Nigel

      Le Merchant, Spencer

      Bryan, Sir Paul

      Fox, Marcus

      Lennox-Boyd, Hon Mark

      Budgen, Nick

      Garel-Jones, Tristan

      Lester, Jim (Beeston)

      Cadbury, Jocelyn

      Gorst, John

      Lloyd, Peter (Fareham)

      Chapman, Sydney

      Griffiths, Peter (Portsmouth N)

      Lyell, Nicholas

      Clark, Hon Alan (Plymouth, Sutton)

      Hampson, Dr Keith

      Macfarlane, Neil

      Clarke, Kenneth (Rushcliffe)

      Haselhurst, Alan

      MacGregor, John

      McNair-Wilson, Michael (Newbury)

      Percival, Sir Ian

      Thomas, Rt Hon Peter (Hendon S)

      Major, John

      Price, David (Eastleigh)

      Thorne, Neil (Ilford South)

      Marlow, Tony

      Raison, Timothy

      Townend, John (Bridlington)

      Mather, Carol

      Rees, Peter (Dover and Deal)

      Townsend, Cyril D. (Bexleyheath)

      Maude, Rt Hon Angus

      Renton, Tim

      Viggers, Peter

      Maxwell-Hyslop, Robin

      Rhys Williams, Sir Brandon

      Waddington, David

      Mellor, David

      Rippon, Rt Hon Geoffrey

      Wakeham, John

      Moate, Roger

      Rossi, Hugh

      Walker, Rt Hon Peter (Worcester)

      Morrison, Hon Charles (Devizes)

      Sainsbury, Hon Timothy

      Walker-Smith, Rt Hon Sir Derek

      Morrison, Hon Peter (City of Chester)

      St. John-Stevas, Rt Hon Norman

      Waller, Gary

      Murphy, Christopher

      Shelton, William (Streatham)

      Ward, John

      Needham, Richard

      Speed, Keith

      Warren, Kenneth

      Nelson, Anthony

      Speller, Tony

      Watson, John

      Neubert, Michael

      Spicer, Jim (West Dorset)

      Wells, Bowen (Hert'rd & Stev'nage)

      Newton, Tony

      Squire, Robin

      Wheeler, John

      Normanton, Tom

      Stanbrook, Ivor

      Whitney, Raymond

      Onslow, Cranley

      Stanley, John

      Winterton, Nicholas

      Page, Rt Hon Sir R. Graham

      Stevens, Martin

      Page, Richard (SW Hertfordshire)

      Stewart, John (East Renfrewshire)

      TELLERS FOR THE NOES:

      Parris, Matthew

      Stradling Thomas, J.

      Mr. Robert Boscawen and Mr. John Cope.

      Patten, John (Oxford)

      Tebbit, Norman

      Pawsey, James

      Question accordingly negatived.

    Clause 2

      DUTY OF LOCAL AUTHORITIES TO PUBLISH INFORMATION
      7.30 pm
      Mr. King: I beg to move amendment No. 4, in page 3, line 3, leave out subsection (1).
      Mr. Deputy Speaker: With this we may take Government amendments Nos. 5, 7 to 13, 16 and 17, and amendment No. 18, in page 4, line 28, at end insert:
      '(15) Regulations shall not be made under section 2 of this Act where—

      (a) the Secretary of State has approved a code of practice setting out information recommended to be published by all local authorities; and

      (b) the Secretary of State is satisfied that local authorities are complying with that code of practice.

      (16) Before approving a code of practice under this section the Secretary of State shall consult such associations of authorities to whom this Part of this Act applies as appear to him to be concerned.'.
      Mr. King: I apologise for the fact that, due to the protocol on the drafting of amendments, the clause is more difficult to read. It has been re-drafted in response to representations that were made to the Government in Committee, to which we were pleased to respond, on the question of a code of practice. We were anxious to see whether we could follow that spirit. I believe that the amendment, together with the other various detailed changes, makes it clear that there should be a code of practice.
      I had to make it clear to the Committee that it would be necessary to have the power to make regulations to ensure necessary compliance with the code. There has been close collaboration with the Chartered Institute of Public Finance and Accountancy and the Society of Local Authority Chief Executives on the preparation of the draft code of practice. This has been published, copies are available in the Library, and consultation is now taking place.
      There is, I believe, wide agreement on both sides of the House on the need—the issue arose in our earlier debate—for information for the public and for councillors on the work of local authori-
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      ties. The Government believe that there is considerable scope for improvement, not necessarily in the amount, but in the quality of the information that is published by local authorities, and in the use that can be made of comparative statistics and information not only for the benefit of the public but to help councillors better to discharge their responsibilities.
      The matter was discussed at some length in Committee. Opposition Members pressed us hard on the code of practice, and I am glad that we were able to respond. I hope that the House will feel that the amendment correctly discharges the undertakings that I gave to the Committee in this respect.
      Mr. Graham: I welcome warmly the developments that have taken place since the Committee stage. I am certain that at that time a code of practice was in the mind of the Government. We satisfied the Minister and his colleagues that if progress was to be made in the publication of statistics it was essential that the people primarily involved in providing them and having responsibility for them should be consulted. In the next series of debates I shall be pressing that the trade unions and the TUC should also be consulted.
      This is another manifestation of the Government's desire to take with them the people at the sharp end. The Secretary of State has talked about what he has been able to do in shedding staff in his Department, but the situation is different for local authorities nearer the ground. The proposition has a measure of agreement. The code of practice has been agreed, but the local authorities have not written a blank cheque. Local authorities such as Enfield have been invited to comment. They will give the Secretary of State their observations in the next two weeks. I am certain that local authorities believe that the publication of information with league tables and comparisons cannot be other than a good exercise. The problem will arise in finding resources to produce the information.
      The Association of District Councils has suggested amendments today but, of course, it is too late. However, the House should hear what the association has said. It is unhappy on two counts about the

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      revised clause 2 tabled by the Government. It states:
      "First, the new clause specifies in some detail the content of the 'code of recommended practice'. This is contrary to the concept of the voluntary code and gives the code the appearance of a statutory document from the outset. Secondly, the fall-back power to make regulations is too widely drawn and gives the Minister virtually unfettered powers to require publication by all authorities. If all but a small handful of authorities comply with the code the Minister would still have to make a blanket regulation covering all authorities to enable him to deal with the odd case of default."
      The fact that a responsible body such as the Association of District Councils says that after five months' work does not auger well for the future.
      There is much suspicion and mistrust about the Government's true intent in the code. The suspicion is that the figures will be used falsely to equate undermanning and efficiency. If local authorities manage to reduce manpower it will be assumed that they are more efficient. That is not necessarily so.
      The Secretary of State uses the detailed authority manpower watch statistics as justification for his attitude. Commenting upon the statistics the Secretary of State said:
      "In virtually every case I investigated the arguments against such reductions amount to no more than the specific pleadings of organised pressure groups who greatly exaggerate the consequences of the requests that we have made … It is the attitude of these local authorities that now threatens the traditional relationship of voluntary co-operation between Central and local government. The councillors running these authorities should have no doubt about the Government's commitment to achieving the public expenditure reductions which are central to its economic strategy."
      7.45 pm
      The manpower watch statistics are central to the problem. Let us examine what the statistics reveal. The House has heard what the Government think about authorities that fail to reduce manpower. Let us examine the London borough of Barnet, in which the Prime Minister takes an interest. The statistics show that for the year-end quarter of March 1980 Barnet was able to reduce its full-time staff by 74, or 1 per cent. One might say that 1 per cent. is not bad, but it is not enough. In the same period Barnet increased its part-time staff by 249, an increase of 6·1 per cent.
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      If the definition of a full-time worker is somebody who works more than 30 hours a week, how can one say that increasing part-time staff by 249 and reducing full-time staff by 74 is a reduction? Barnet have been striving might and main to reduce manpower.
      Mr. Ian Mikardo: It is an increase.
      Mr. Graham: I agree. Statistics are often meaningless.
      The borough of Bexley has made a reduction of 48, or 0·9 per cent., but has increased part-time staff by 116. Kensington and Chelsea has reduced its full-time staff by seven but increased its part-time staff by 35. Blaby has made a reduction of one full-timer but has increased its part-time staff by 20. Bracknell has reduced its full-time staff by 12 and increased its part-time staff by 21. Cheltenham has reduced by 12 and increased by 17. I could go on. The statistics are illuminating. They show the impossible task of local authorities, particularly those which have cut staff year after year. People who have been good councillors, in the sense of cutting waste and providing a good service at the lowest cost, are told by the Secretary of State "We want even more." As a result services will be damaged.
      Berkshire, Chichester, Bromsgrove, Chelmsford, Hereford, Leominster, Malvern Hills, Melton, Northampton and Weymouth did not supply any statistics. Some refused to supply the figures, and some were unable to produce them in the time available. The Secretary of State must reflect on the fact that he has placed an intolerable burden on local authorities, not only by demanding manpower statistics but in terms of the range of other information that he wants authorities to produce.
      Authorities are under pressure from many quarters. They are under an obligation to reduce and control public expenditure. They are under an obligation to increase the rates to pay for increased services. If they do not increase services, they will be in trouble with the local people. Authorities are under pressure from the ratepayers' movement, which wants to reduce services in order to reduce rates. Authorities are in the dilemma that if they reduce manpower to satisfy

      1863
      the Secretary of State they will add to the increasing burden of unemployment.
      I understand that the Secretary of State gives credence to the myth that administration, per se, is bad and is the prime target that should be attacked in reducing manpower. Administrators in hospitals and councils, rating staffs, wage clerks and cashiers are essential for an efficient service, and yet they are coming under pressure.
      The Minister of State referred to consultations with the Chartered Institute of Public Finance and Accountancy. For the life of me I cannot understand, with the welter of information that is available, why authorities must go through the purgatory of having to produce even more statistics in order to satisfy the Secretary of State. I do not think that that will satisfy the public.
      At the moment members of the public who are interested, or able, can get access to a lot of information without its costing the local authority a penny. Yet, in asking for the information, the Government assert that they are anxious to minimise the additional administrative burden on local authorities. No reference has been made, however, to the additional costs that authorities must meet for printing and for additional staff to keep the statistics. The grave reservations expressed by local authorities are shared by the Opposition.
      It is essential that the Government should exercise great caution when they insist that local authorities produce this information besides producing the annual report that is part of the scheme. I repeat that the scheme is a reasonable one, but—as with so much of the legislation produced by the Government—it is ill thought out.
      There has been a lack of consultation and there is, of course, the dilemma of local authorities under pressure to find money. That is ironic, because credence has been given to the possibility that the Government will hive off the collection of statistics from local authorities. I refer to a recent report in The Guardian—a journal about which there was comment in Committee. The article was written by David Hencke. His name featured more than once in our debate on 5 June. Mr. Hencke wrote that there was a possibility that the
      1864
      Government would hive off the collection of statistics. An organisation called SIFTA was mentioned. It was said that SIFTA might undertake the collation of statistics on education, the social services and housing. If it is already undertaking this task the Government have an organisation capable of doing what they say local authorities must do.
      The Guardian report quoted the chief officer of SIFTA, Mr. Hepworth, as saying that if his organisation did the job it would require freedom to present the information without being tied to political control. He said
      "We would need the freedom from Ministers to provide the public with the best information available."
      Is there an inference there that Mr. Hepworth wishes to make it clear that if his organisation were solely responsible in future no information would be published that could possibly have been coloured by possible contact in that way?
      We are prepared to recognise that the Government have attempted to meet the views of the Committee, but I believe that the Minister of State should think most carefully about the speed with which he proposes to produce these league tables of authorities, because a great deal of damage might be done. Ratepayers may well be persuaded that the less money spent the lower would be the rates and the fewer would be the staff, and that, ipso facto, that would equate with efficiency. The Opposition are far from satisfied that that would be the position.
      Mr. Charles Morrison: My amendment No. 18 is grouped with the Government amendments and I wish to refer to it as a background to those Government amendments.
      Of course, I support the proposal that local authorities should publish suitable information to their electorates about their activities. There was a long debate in Committee as to what form that publication should take. The idea was advanced that it would be most satisfactory if a code of practice was published. I think that principle was accepted by my hon. Friend the Minister of State and that he has attempted, by his amendment, to include it in the Bill.
      I accept that it is necessary for the Government to have reserve powers

      1865
      to require authorities to comply with the code of practice in the event of its becoming clear that some authorities refuse to comply with the code. On the other hand, it seems to the Association of County Councils and to the Association of District Councils that the Government amendments do not follow that approach and that they are, therefore, not within the spirit of the undertaking given in Committee.
      Though the amendments purport to introduce a voluntary code, they appear to give the code the status of a statute. It seems to the Association of County Councils that the Government amendments would give the Secretary of State an absolute right to decide the detailed content of the code without—and this is important—seeking the agreement of the local authority associations. The Government amendments appear to enable the Secretary of State to enforce, by a single initial regulation, any code subsisting from time to time, whether it be the original code established at the time the regulation was made, or a subsequent or new amended code.
      The Government amendments also enable the Secretary of State, in particular, to amend in detail the statutory obligations of local authorities in this respect without obtaining any further approval from the House. If the interpretation put on the Government amendments by the Association of County Councils is true, the amendments will extend and enhance the powers originally sought.
      On the other hand, the association believes that the amendment that I am putting forward is all that is necessary to provide the Government with an added statutory back-up power in the context of seeking to work to an agreed voluntary code. It believes that amendment No. 18 will be much more in keeping with the spirit of the undertakings given in Committee.
      I hope that my hon. Friend has been able to consider my amendment carefully. It will be satisfactory if he can convince me that the fears I have expressed about his amendments are ill-founded. If he is unable to convince me—or even himself—of that, I hope that either now or at a later stage consideration will be given to the inclusion of
      1866
      amendment No. 18 instead of the amendment proposed by my right hon. Friend.
      Mr. Stan Thorne: It is difficult for hon. Members who were not involved in the Committee proceedings to appraise clause 2 and the various amendments that have been tabled. Clearly clause 2 would be radically altered by the amendments.
      The Minister of State referred to the code of practice and indicated that a copy of it was available in the Library. I hope that not many hon. Members go to get it because there are no more copies left. That is unfortunate because hon. Members are entitled, when dealing with a Bill of this type, and when a code of practice is referred to in it, to have copies in order to see what is implied.
      8 pm
      I observe that in paragraph 1 of the code of practice three interesting and clear statements are made:
      "(1) The purpose of the exercise is to give ratepayers clearer information about local government activities"—
      one would certainly applaud that—
      "(2) to make it easier for electors, ratepayers and other interested parties to make comparisons of and judgments on the performance of their authorities.
      (3) to help councillors make a judgment about the work of their authorities."
      They are all very laudable aims. All hon. Members would welcome increasing participation in local government elections. If this code of practice seeks to achieve that end, it is only to be welcomed.
      The rest of the code of practice deals with items such as the nature of the rate demand note. However, I am concerned, and, if I heard him rightly, so is the hon. Member for Devizes (Mr. Morrison), about what is implied if the code is accepted as it presently stands, even though it is called a draft code of practice, and what it really means in terms of the way in which local authorities proceed hereafter when the Bill becomes an Act. Will they be prevented from disseminating information that is not covered by the code of practice? I can only assume that that is not so. But to what extent will the Secretary of State consider it appropriate to intervene?
      I recall an occasion when I was in local government on which we sought

      1867
      to give council tenants—rentpayers—the maximum information about why their rents were to be increased in the way that they were increased and to the extent that they were increased. That necessitated the compilation of a piece of information which included a statement of the then Government's policy that gave rise to those rent increases. It was then argued by some—and I can envisage situations in which the present Secretary of State could face a similar attitude—that the statement was political rather than a statement giving factual information.
      It is extremely difficult to differentiate between the two. If at local level we wish to sway a body of ratepayers to the belief that a particular set of circumstances arises from a Government decision in an Act of Parliament, to my mind that is not political. However, I am sure that the Minister of State can remember the hoo-hah at the time of the Housing Finance Act because local authorities that wished to explain the actions that they were taking arising from that Act were seen by many Conservatives in local government and national government as doing political acts in disseminating information that arose from that legislation.
      The Minister of State may recall that at that time one had to issue notices to quit to certain tenants at the same time as indicating to them increases in rents. Many tenants receiving such notices were considerably alarmed about the real implications and intentions of councils. I am sure that the Minister agrees that it is essential that local councils have a free right to give whatever information is possible and is considered relevant to their ratepayers.
      A number of other things are not covered in the code of practice. Any hon. Member who has been a councillor has probably done the same as I have in declaring interests as a member of a local authority. For me, that meant declaring which firm was at the time employing me. Clearly I had no direct financial interests in the sense that a building contractor would have when seeking to tender for contracts within his local area. I am not casting any aspersions on contractors as a body of people. A contractor may have on his staff, in a very senior position, a person who is a member of the local
      1868
      authority as a councillor. In my view, the public are entitled to the fullest possible information about the activities and interests of council members, whichever political party they represent. The public are also entitled to maximum information about ownership of land and buildings.
      Some local authorities, particularly those in whose areas developments are likely to take place in the foreseeable future, would seek to give maximum information to the electorate in their area. I should like an assurance from the Minister of State that there is nothing in this code of practice that would prevent a local authority from giving that sort of information.
      It is also necessary to ensure that in no way will the code of practice prevent local authorities from giving the true information as to why their statistics on nursery school education for the previous two years indicate a marked decrease in the number of nursery places for the two following years because there has been a change arising from Government policy—whichever of the major parties is in power—in the sphere of public expenditure cuts.
      Therefore, at local government level, when talking to the electorate about the provision of resources, it seems to me that we are likely to get involved in the delicate question of what is political information and what is general information for the electorate.
      I am very sceptical about the whole clause. I very much regret that it is in the Bill because I am quite sure that Governments, whether they be Conservative or Labour, have had nothing to worry about in relation to the activities of local government in informing their electorates about the various problems that have existed in local administration.
      I feel very tempted to force a Division on this matter. However, there are other important matters to be debated this evening, so it may be appropriate not to do that. I hope that the Minister will give an assurance that the code of practice is not a recipe for muzzling local authorities which seek to maximise the information they give to their electorates.
      Mr. Grimond: I understand that this part of Bill does not apply to Scotland. I do not know whether it is a good or bad provision, but I want to know why it does not apply Scottish authorities. I

      1869
      hope that the Minister will hoist in that question. A great deal of what has been said, both in the debate and in Committee, appears to apply to Scotland as much as it does to England.
      I am as much in favour of open local government as I am in favour of open national government. The electors should have as much information as can reasonably be provided and which they can digest and understand. I suspect that at the moment the electors have rather more information than they can take in. Nevertheless, it may be that this is a useful amendment.
      One of the difficulties faced by local authorities in keeping down their staffing levels arises from the innumerable new functions that are being ladled upon them. One of the main ways to cut public expenditure is to cut out certain functions altogether. I shall give one concrete example of that. The Orkney island council was asked, as part of the Government's campaign to cut public expenditure, to make a complicated return about crofting. Orkney is a crofting county, but there are practically no crofts left. I believe that the number is about 20 to 50. Because it is listed as a crofting county, the island authority was sent an immense request for information. It was only with some difficulty that it was prevented from taking on extra staff to deal with the request. The Government should be careful about demanding information or encouraging other people to demand it.
      On the question of dissemination, it is impossible to distinguish between factual information given by local authorities and the political gloss that may be put upon it. On the subject of increases in housing rents, for example, local authorities will say that they are due to central Government. I want the information kept down as far as possible to a narrow band of purely factual statements that can be checked. Once we go beyond that, we create a great deal of work for local authorities. I do not think that that would give the public all that they want. If they wish to delve into these matters, the right method would be to go to their local representative and ask him to raise the matter with the local authority. There is a case for dissemination of facts and figures about rates, expenses numbers of staff and the ex-
      1870
      penses of various operations in local authorities.
      I am somewhat sceptical about comparisons, It is extremely difficult to make comparisons between one authority and another. I think that we all agree that we want to give local authorities as much freedom as possible. If they are willing to pay for extra functions they should be allowed to do so, even if other authorities feel that those functions are not necessary for them. We should not compare one authority that is prepared to take on functions such as leisure and archaeology with another local authority that does not want to do the same or thinks that they can be undertaken by some other organisation. Such comparisons would not be of great validity. I wish to be assured that the information will be kept to within as small a compass as possible, and made as factual as possible.
      One of the main ways to enable local authorities to save on staff—and I agree with the Government that that is necessary—is to stop putting new functions on them. I trust that this amendment will not lead to an increase in staff, which could quite easily happen.
      Mr. Warren Hawksley: I do not wish to detain the House for too long. I support these amendments and clause 2, which deals with the power of the Secretary of State to insist on the form of publication of local government information. I declare an interest, as I am still a county councillor and very much involved in local government. My views differ from that of my authority. My county supports the Association of County Councils, which has expressed reservations about the powers in this part of the Bill and also in the amendment, although it sees certain advantages in the proposed code of practice.
      8.15 pm
      My council is extremely critical of one item, namely, the manpower watch figures, which have already been produced voluntarily for the Minister. I disagree with the need for the figures to be produced. Although such information is essential and it is right that everybody should know the figures for local authorities, I hope that when my right hon. Friend the Minister replies to the debate he will be able to remove some of the

      1871
      fears felt by local authorities. Some of the fears are well founded because the figures that are being published are somewhat misleading.
      I wish to give two examples of that. The first follows on from a point made by the hon. Member for Edmonton (Mr. Graham) from the Opposition Front Bench at the beginning of the debate on the question of half staff and staff. There is a conversion figure and a formula for working out the relationship between half staff, part-time staff and full-time staff, but there are anomalies in that system. I understand that in some areas, especially rural areas, that anomaly shows up. There may be a variety of hours worked by staff, and there may also be cases where some part-time staff work considerable amounts of overtime.
      The second anomaly that shows up clearly in the figures that have been produced concerns operations that involve people from the Manpower Services Commission. Certain people on a county council payroll are there under the youth opportunities programme, and they are not included in the figures asked for by the Minister or in the Government's statistics, but if those people are on STEP projects, which are also under the auspices of the Manpower Services Commission, they are included in the figures. That anomaly gives rise to certain reservations about accepting the figures that are produced.
      I hope that my right hon. Friend will be able to assure the House that when drawing up his requirements under these amendments he is open to suggestions to improve the method of collection of the statistics and to make the results better and fairer between one authority and another. I wholeheartedly support the principle that the figures should be known. They can be useful when comparing authority with authority, but I hope that no one will ever suggest that the statistics on their own should be used to criticise or to support one authority against another. No two authorities are alike. I say that from my experience as a county councillor.
      We still have some growth in Shropshire, mainly because of the new town of Telford. Unlike most authorities, the school population is not falling but increasing. I am sure that my right hon.
      1872
      Friend will appreciate that that produces statistics that run contrary to those of many other authorities. Although I believe that the figures are necessary and should be produced, local anomalies should be printed and explained. I hope that the proposal in the amendments to give the Secretary of State the necessary powers to ensure that the facts are published will be approved. I hope that the authorities and the electors will benefit from them. I ask my right hon. Friend the Secretary of State to assure us that he is prepared to listen to the detailed criticism that may be made from time to time by various local authorities about the form in which the details are published and about the way that they are collected.
      I hope that the draft code of practice, when it is discussed with local authorities, will lead to an improvement in the statistics that are published. I believe that they are desirable, but there is a long way to go to make them as worth while as they should be.
      Mr. Neil Thorne: I had hoped that the code would be a voluntary measure. If it is not to be, I should be grateful if my right hon. Friend could assure me that he does not expect the GLC to be responsible for the Inner London Education Authority. The ILEA is a separate body for the purposes of this clause. It is virtually autonomous. It precepts separately from the GLC and it is separate in its public accountability. If, therefore, it is so separate, it seems to me entirely wrong that we should expect the GLC to take on this responsibility on its behalf. I hope that my right hon. Friend will be able to put that matter right.
      Mr. King: I can say straight away to my hon. Friend the Member for Ilford, South (Mr. Thorne) that I shall consider the point he raised, which has not been raised with me before. I shall bear it in mind.
      The hon. Member for Edmonton (Mr. Graham) and my hon. Friend the Member for The Wrekin (Mr. Hawksley) both discussed the problems of the joint manpower watch figures and the difficulty of making effective comparisons. There is an interesting lesson to be learnt from the joint manpower watch. The figures, which after discussion it was agreed should be published, have been collated

      1873
      for a considerable time. The aggregate figures have been published. There has been no discussion or complaint about the fact that the figures were not on the right basis, or that they did not give a sufficiently accurate reflection of the issue of part-timers, which the hon. Gentleman fairly raised. Part-timers may be 10-hour part-timers or 30-hour part-timers. That is an absolutely valid point. Now, at last, urgent discussions are going on between the associations and my Department, because, now that they are being published by individual authorities, people are looking at the figures. Previously, no one really bothered about them, because they were aggregate and fairly meaningless.
      An interesting point was made to me by a distinguished councillor over the weekend. He said "Now that they are important, we must get them right". Yet these figures have been sent in by every local authority to the local authority conditions of service advisory board. It has been collating them and publishing the aggregates. All this time, there has been considerable uncertainty as to whether the basis was right.
      I make no apology for the joint manpower watch and the publishing of figures for individual authorities. I make no judgment on what the level of staffing should be in any authority. My hon. Friend the Member for The Wrekin rightly said that there was a tremendous range of different responsibilities. Anyone who looks at the list of local authorities will know that they range from the GLC, the largest, with a population of 7 million, to two—I think that Nairn might be one—with a population of 9,000.
      The level of staffing will vary. I say that people should not be frightened of publishing the facts. Councillors and leaders of councils should be prepared to defend their judgments and not hide behind a fog of confusion and obfuscation by saying "We cannot publish the figures, because they would be misleading or misunderstood". At least the publication of figures on a quarterly basis by individual authorities shows what is happening within those authorities. I accept that there may be difficulties in making comparisons between
      1874
      authorities, but at least one is able to tell the trend. Therefore, what has happened with regard to the joint manpower watch is an interesting illustration of the need to have effective statistics.
      The hon. Member for Edmonton said that if one were able to argue about statistics the statistics would be valueless. I hope that that is not a plea for concealment. I am sure that it is not, because the hon. Gentleman gave a general welcome to the proposal. There is a need to get the statistics on as fair a basis as possible. The hon. Gentleman went on to talk about league tables.
      Mr. Graham: Obviously, I did not make my point clear. Of course, one is entitled to use statistics in an argument, but if one argues about the validity and the dates of the statistics one will never get on to the real argument, which is to use the statistics in argument.
      Mr. King: That is a penetrating thought, and it is one of the difficulties that we must overcome. There are real problems in this regard, but I hope that no hon. Member considers that that is an argument for not attempting to do it.
      The hon. Gentleman talked about league tables. He introduced the concept, not I, and I am very sceptical about it. It is very difficult to talk about league tables in many of these areas. One can talk about comparative statistics, but I well understand the problems associated wth the league table argument.
      My hon. Friend the Member for Devizes (Mr. Morrison) referred to amendment No. 18, which is in his name. it states that:
      "Regulations shall not be made … where —(a) The Secretary of State has approved a code of practice"
      and,
      "(b) the Secretary of State is satisfied that local authorities are complying with that code of practice."
      The second part of the amendment states that:
      "Before approving a code of practice … the Secretary of State shall consult such associations of authorities to whom this Part of this Act applies".
      That part of the amendment is covered in clause 2(12), because it now reads:
      "Before issuing a code or making any such regulations the Secretary of State shall consult such associations of authorities to whom

      1875
      this section applies as appear to him to be concerned".
      I give my hon. Friend the absolute assurance for which he asks, that we shall seek to get the full agreement of the associations to the code of practice. I very much hope that that will be possible.
      There is a difficulty—I shall be quite frank about this with my hon. Friend— with regard to the approach. I had to make it clear in Committee—in my judgment, these amendments honour the undertaking that I gave in Committee— that we would adopt the code of practice approach. However, it is necessary to have the regulations to ensure essential compliance with that code of practice. We shall make those regulations as limited as possible. That must be our position.
      It is qualified, because the Secretary of State may make regulations only if in his opinion it is necessary to make such regulations in order to ensure that authorities so publish the information. My hon. Friend has made it clear that he wishes the information to be published. There is nothing between us on that. There is the qualification with regard to the regulations, but I am afraid that that is as far as I can go on the first part of the amendment. On the second part, I give him the assurance that we are seeking to reach agreement.
      I am sorry that the hon. Member for Preston, South (Mr. Thorne) did not see the code of practice before. It was circulated on 6 June. If adequate copies are not available, I shall ensure that more are made available. I hope that this is an issue on which hon. Members are prepared to make their comments. There is absolutely no question of our seeking to circumscribe or limit the publishing of any information by local authorities. Our concern is merely to achieve a certain minimum standard. As the hon. Member asked whether this would in any way prevent local authorities from publishing any other information, I give him the absolute assurance that it will not.
      8.30 pm
      The right hon. Member for Orkney and Shetland (Mr. Grimond) raised a very pertinent point, asking why the clause did not apply to Scotland. Before I answer that question I should like to answer his last question about Scotland, which seems to have thrown the whole Scottish Office
      1876
      into a major dither. The answer that I have been given is that the law of diligence in Scotland gives a common law right of access to councillors for a specific document, but apparently it cannot be used to fish for information. That is probably not the clearest answer that the right hon. Gentleman has ever received, but I am told that he will receive further information by letter, if that is agreeable to him.
      I have taken note of the right hon. Gentleman's question about the clause's not applying to Scotland. The matter will be considered and further thought will be given to his proposal.
      I entirely accept the right hon. Gentleman's comment about the need to avoid extra cost. It is not intended to impose a vast new bureaucratic exercise. A certain amount of this information—in certain areas, far too much information—is produced, but often in an undigestible form, or not in a readily comprehensive form, either for councillors or for electors. Part of our concern is to direct attention to ways in which information might be produced rather more meaningfully.
      I have some interesting figures to which I should like to refer, without giving the names of the authorities. In looking at a rate demand or at an abstract of accounts of a local authority, a ratepayer may see that his authority spent £100,000 last year in its planning department and has a certain level of staffing in the department. That does not mean anything to him. It is very difficult for a ratepayer to know whether that is good, bad or indifferent.
      I have here the figures for two district councils in the South-East of England with almost identical population figures. They appear to be very similar authorities. One employs 20 planning staff; the other employs 44 planning staff. The first authority, on another analysis, receives 25 per cent. more planning applications than the second authority. Those figures do not provide an absolute answer; they do not prove anything. The answer could be either way. It might be that the first authority is grossly understaffed and is taking a very superficial attitude towards planning applications, or it may be that the second authority is doing its work in the right way. It is not possible to reach an instant judgment, but in the mind of an alert elector or councillor it raises the question whether a

      1877
      disparity of that sort should be investigated.
      I have figures for two shire counties, practically adjacent to each other. In the library service, one authority employs one person per 6,000 books; the other employs one persons per 3,000 books. There may be all sorts of reasons for that disparity, but it still invites questions at which intelligent councillors should be looking.
      Why is it that one of our major metropolitan districts spends £18,000 per annum per 1,000 population on leisure activities, whereas another—which seems to offer rather good leisure facilities— spends only £7,000? I am not making a judgment. Information presented in that sort of way enables councillors to see whether they are getting value for money and whether functions are being discharged in the most effective way.
      I have another comparison between two shire counties. One spends £2,320 per year on each child in care. The other county—which I have not known to be in disgrace for its handling of the probblem—spends £1,100 per year.
      Illustrations of that sort are worth looking at. They do not provide the answers, but they ask some questions.
      Mr. Grimond: I wholly agree with what the right hon. Gentleman says. His Illustrations are very much to the point, and should make people think. Most ratepayers and others get their information through the local paper, the local radio and so on. Will comparative figures of this sort be available to the local radio and the local paper? Is it intended to produce some sort of digest, which can be used by the local radio and the paper?
      Mr. King: That is part of our consideration of the most effective ways in which these figures should be published. Burying them in an abstract of accounts which may appear six months after the end of the financial year may not be the best way of dealing with the matter. The joint manpower watch has given rise to considerable interest in the local press, where the numbers of people employed in local authorities have attracted a lot of attention. That is one of the areas
      1878
      in which we wish to examine the best way of providing information.
      Mr. Eric S. Heffer: Those figures are still meaningless, because although one authority may have children in care at one cost and another authority may have children in care at a different cost, the first authority may not provide central heating in its childrens' homes and the second one may. One authority may provide secondhand bicycles in its children's homes, whereas another authority may buy decent bicycles. I was a member of a children's committee for a long time, and I was aware of the parsimonious attitudes of some councils, particularly councils in Liverpool at that time.
      Mr. King: I was careful to say that I make no judgments on these figures. On examination, a council may find that there are good reasons for the difference, and there may be other cases where it is difficult to identify the good reasons.
      I am sorry to have spoken for longer than I intended in giving these illustrations, but they help to explain the importance and the background to our thinking on this clause. In Committee there was a general welcome for this approach, although there were some differences on points of detail. In that spirit, I commend this amendment to the House.
      Amendment agreed to.
      Amendment made: No. 5, in page 3, leave out lines 17 to 19 and insert—
      ' (2A) It shall be the duty of the Secretary of State to issue for the purposes of this section a code of recommended practice as to the publication of information by such authorities about the discharge of their functions and other matters (including forecasts) which he considers to be related.
      (2B) A code may be prepared either by the Secretary of State or by some other person at his request.
      (2C) The Secretary of State may from time to time revise or request some other person to revise the whole or any part of a code.
      (2D) A code may specify—

      (a) that publication be made in periodical reports or in any other specified manner;'.—[Mr. King.]

      Mr. Graham: I beg to move amendment No. 6, in page 3, line 22, at end insert—
      ' In addition the Secretary of State shall consult any trade union or staff association appearing to him to represent employees on the

      1879
      various negotiating bodies for local authority workers and shall consult the Trades Union Congress.'.
      Mr. Squire: On a point of order, Mr. Deputy Speaker. Due to the speed with which these amendments have undoubtedly been prepared, may I point out that my name has inadvertently been attached to this amendment, while it is correctly detailed on many other amendments? I do not wish the House to be under any misunderstanding. I regret to disappoint Labour Members, but I feel sure that their disappointment will be limited.
      Mr. Graham: There is no intention of "robbin' squire" in this case.
      This amendment is a further attempt to achieve what we sought to achieve in Committee. We support the principle of the code of practice and the general intention—if it is to inform the ratepayers. However, we feel that employees who are properly statutorily identifiable because they negotiate wages—particularly the TUC—are entitled to special consideration.
      I know that the Minister of State is likely to say that, although he is not prepared to insist that the consultation is statutory, consultation with the TUC has taken place.
      I am grateful for having been informed that that is so, but the TUC and the unions would like the formal opportunity to consult. It is a matter of regret, but a matter of fact, that the TUC local government committee has decided that member unions would be justified in not co-operating with the joint manpower watch in circumstances where the information supplied by an authority could be used as a basis for implementing Government expenditure policies that are aimed at slashing manpower levels. NALGO has advised its branches that it has been authorised not to co-operate in the passing of joint manpower watch data to central Government or local government organisations.
      If that is the kind of mood that has been engendered—I am not blaming anyone for it—if antagonism has been created between the unions and the Government, surely we should recognise not only that the unions will be pacified but that they could do their proper job of ensuring that the work that their members have to do,
      1880
      particularly in town halls, is done with a good heart and spirit.
      It is in that spirit that I commend the amendment.
      Mr. King: As the hon. Member for Edmonton (Mr. Graham) said, he moved a similar amendment in Committee. He will get a similar answer to the one that he received in Committee.
      First, we are anxious to have the fullest consultations with the TUC and representatives of the organisations representing employees in local government. Those consultations have been taking place. We have had a number of views, including NALGO's views, on this matter. We have asked a number of bodies, including trade unions, to respond to the draft code of practice, of which we have sent them copies. We have had some constructive comments from the unions and we are awaiting further views on the draft code of practice and the consultation document. We want to maintain those consultations. The issue is not whether there should be consultations but whether they should be written into the Bill. We are not writing consultations in and we have not named any body in the Bill in that respect. However, we are committed to consultations.
      About 80 organisations have responded to the original consultation document, so wide consultation is taking place. For that reason, it would be wrong to single out the TUC as the body to be written into the statute for consultation. I assure the hon. Gentleman that we shall want to consult the TUC and others and will be interested in their views.
      Mr. Graham: I am heartened by that response. In Committee there was no prospect of consultation. I do not suggest that it was not in the Minister's mind, but we did not have it as a reality. We have now moved on. There has been consultation. My colleagues and friends in the trade union movement will be either satisfied or dissatisfied with this opportunity. If they come back to us and indicate that the relationship can be improved, we shall certainly seek another opportunity to raise it.
      In view of the Minister's assurance that the Government intend to continue consultation with the TUC and others, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendments made:
      No. 7, in page 3, line 23, leave out
      ' subsection (3) above, regulations under this section may authorise'
      and insert
      ' subsection (2D) above, a code may specify'.
      No. 8, in page 3, line 35, leave out from beginning to 'steps' in line 36 and insert—
      ' (5) A code may specify'.
      No. 9, in page 3, line 38, leave out subsection (6).
      No. 10 in page 4, line 1, leave out subsection (7).
      No. 11, in page 4, line 7, leave out from 'Where' to 'to' in line 10 and insert
      'a code specifies information as to the cost of the discharge of any of the functions of authorities, it may specify how the cost is'.
      No. 12, in page 4, line 10, at end insert—
      '(8A) More than one code may be issued under this section, and different codes may deal with—

      (a) different classes of information;

      (b) different kinds of authority or the same kind of authority in different circumstances or different areas;

      (c) different manners, forms or occasions of publication.

      (8B) The Secretary of State may make regulations requiring authorities to whom this section applies—

      (a) to publish any description of information specified in a code;

      (b) to publish the information in the manner and form, and on the occasions, specified in the code.

      if in his opinion it is necessary to make such regulations in order to ensure that authorities so publish the information.'.
      No. 13, in page 4, line 19, after 'Before' insert 'issuing a code or'.
      No. 16, in page 4, line 23, at end insert—
      '(12A) Publication specified or required by virtue of this section may be to the public in general or to any section of it, depending on the terms of the code or regulations.'.
      No. 17, in page 4, line 24, leave out subsection (13).—[Mr. King.]

    Clause 3

      MEANING OF "WORKS CONTRACT"
      Mr. King: I beg to move amendment No. 19, in page 4, line 34, leave out 'under' and insert—
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      '(in this Part of this Act referred to as a "maintenance agreement") under—

      (i) section 5(3)(c) of the London Government Act 1963 (agreements between Greater London Council and other London authorities for the carrying out of works of maintenance by one party in connection with land or buildings for the maintenance of which another party is responsible), or

      (ii)'.

      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this we may take Government amendments Nos. 20 and 21.
      Mr. King: These are technical amendments. They are needed to clarify uncertainties which were pointed out in Committee. We promised to bring forward amendments as necessary. They merely ensure that, where authorities have a number of powers available to them under which they may do work for each other, the treatment of such work under this part of the Bill is consistent.
      Amendment agreed to.
      Amendments made: No. 20, in page 4, line 39, leave out from 'section' to 'or' in line 40.
      No. 21, in page 4, line 40, at end add—
      ' (aa) an agreement under section 18(4) of the London Government Act 1963 (agreements between Greater London Council and other London authorities with regard to metropolitan roads); or'.
      No. 22, in page 5, line 13, leave out 'are delegated to' and insert—
      'fall to be discharged by'.
      No. 23, in page 5, line 14, leave out 'delegated'.—[Mr. King.]

    Clause 5

      LIMITATIONS ON POWER TO ENTER INTO WORKS CONTRACTS
      8.45 pm
      Mr. King: I beg to move amendment No. 24, in page 6, line 9, after ' not insert '(a)'.
      Mr. Deputy Speaker: With this it is convenient to take amendment No. 25.
      Mr. King: Again, these are technical amendments to do with tendering policy. They are designed to ensure that the Secretary of State can lay down competition requirements either by reference to the value of individual projects, or on

      1883
      a sample basis, by reference to a proportion of turnover in any particular category.
      Amendment agreed to.
      Amendment made: No. 25, in page 6, line 11, at end add:
      'or

      (b) enter into a works contract whose value is equal to or less than the prescribed amount unless they have complied with such conditions as may be prescribed by regulations made by the Secretary of State.'.— [Mr. King.]

      Mr. Fox: I beg to move amendment No. 26, in page 6, line 30, at end insert:
      'and

      (d) specify for the purposes of subsection (3)(c) above a number of persons different from three'.

      My comments are also applicable to amendment No. 27. The amendments were promised in Committee. They substitute a small executive discretion for a large one, and restrict the Secretary of State's powers to making regulations to change the number of tending invitations to be required at each competition from three to any higher or lower number that practical experience suggests necessary.
      Amendment agreed to.
      Amendment made: No. 27, in page 6, line 31, leave out subsection (5).—(Mr. Fox.]

    Clause 6

      MEANING OF "FUNCTIONAL WORK"
      Mr. Wigley: I beg to move amendment No. 28, in page 7, line 2, leave out clause 6.
      Mr. Deputy Speaker: With this it may be convenient to take the following amendments:
      No. 29, in page 7, line 3, leave out 'or maintenance'.
      Government amendment No. 30.
      No. 31, in page 7, line 19, leave out 'or maintenance'.
      No. 32, in page 7, line 28, leave out 'or maintenance'.
      No. 33, in page 7, line 31, leave out clause 7.
      Government amendments Nos. 34 to 36.
      No. 37, in page 7, line 42, at end insert:
      'provided that such regulations shall not specify functional work whose estimated cost under subsection (2) above is less than £100,000'.
      No. 38, in page 7, line 42, at end insert:
      (3B) No regulations made under this part of the Act shall in respect of general highway works or works of new construction other than general highway works require a local authority or a development body to invite offers under subsection 4 of this section, in respect of any amount of such works, which in the estimation of the authority or development body will not exceed £250,000.'.
      No. 39, in page 7, line 42, at end insert:
      '(3A) No regulations made under this part of the Act shall in respect of works of maintenance require a local authority or a development body to invite offers under subsection 4 of this section in respect of any amount of such works of maintenance where the value of the works is between £10,000 and £50,000, which exceeds 10 per cent. of the total estimated value of such works to be undertaken by, for or on behalf of that local authority or a development body, in any financial year.'.
      Government amendments Nos. 40 to 43, 47 and 48.
      No. 60, in page 17, line 13, at end insert—
      '(3) Notwithstanding anything in subsection (1) above, in this Part of this Act "local authority" does not include any authority which employs less than 100 employees on functional work.'.
      Mr. Wigley: The amendment goes to the heart of a major issue covered by the Bill, namely, direct works departments. Amendments Nos. 28 and 33 were tabled in order to achieve a clause stand part debate. My hon. Friend the Member for Merioneth (Mr. Thomas) and I were not members of the Committee, but we have read through the Hansard reports. It was noticeable that, although some amendments to clause 7 were debated, there was no clause stand part debate. It is surprising that there was hardly any debate on clause 6. It is therefore important to facilitate that opportunity on Report so that the issues may be thrashed out in greater detail.
      My area is similar to many areas in Wales, England and Scotland in that the direct works departments of local authorities have more than one function. Obviously they must undertake the necessary work, and are responsible for road

      1885
      maintenance and construction. They must ensure that jobs are done. However, direct works departments fulfil another responsibility for which there is no alternative. They maintain a balance in the employment pattern in their areas.
      When contractors are employed, they often come from outside the area and use outside labour. That is sad. In global economic terms, that cannot be beneficial to our economy. It must cost more to bring in outside people than to employ local people. It is a "diseconomy" to the economy of the district if people are on the dole because others are being brought in from outside. Not only must responsibilities vested in local authorities be fulfilled, but, on a local level, one must be able to plan manpower employment.
      Clearly if a local authority has the responsibility of maintaining its own direct works department it will look ahead and plan its work more effectively in order to utilise the labour at its disposal. Therefore, in areas such as mine there would be a great disadvantage in having a rundown of direct works departments because they are the one means of giving employment at a time when factories are closing all around us.
      That is the general background to our amendments, but specific issues arise. Some of the amendments are probing amendments, but we are concerned about whether there will be any implications in the rundown for the highway authority undertakings of routine road maintenance. If there is, that will be highly regrettable. This is something that contractors coming in from outside on a once-off basis cannot plan so well. They do not know the geography or the geology of the area, and in the long term they will not do as satisfactory a job.
      The other question I wish to raise arises in the context of clause 7 and the controls that will be laid down by central Government in relation to the powers being taken away. If detailed controls are given to central Government for small levels of expenditure or on small projects —we specify a limit of £100,000—it will be wrong and bureaucratic. It will mean that local authorities must undertake costings and detailed bureaucratic work, which is totally contrary to the spirit of
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      the Government's proclaimed intention of giving local authorities greater freedom in decision taking.
      We all agree that local authorities should take decisions on the basis of the best information that they have. From my experience in industry, I know how information can be proliferated merely for the sake of proliferating it, and that does not help anyone.
      For those reasons, we feel very unhappy about the provisions in clauses 6 and 7 and we believe that they should be probed more deeply before they are allowed to become part of the Bill.
      Mr. Oakes: The hon. Member for Caernarvon (Mr. Wigley) is right to raise this matter. The instincts of the Opposition are to go along with him in his amendments, particularly that which proposes to delete "maintenance". The hon. Member also made the perfectly valid point about labour being brought from outside into an area where there is acute unemployment. That is something with which my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) and I are familiar on Merseyside. It is not limited to Wales.
      I wish to concentrate on the amendments standing in my name and those of my right hon. and hon. Friends—Nos. 38 and 60—which are being taken with this group. I hope that the Government will accept these modest amendments, either in principle or in spirit, because in no way do they detract from the Government's intention of making direct works organisations accountable. The aim of my amendments, which is supported by the County Councils Association, the District Councils Association and the Association of Metropolitan Authorities, is to prevent unnecessary bureaucracy. That should commend itself to Ministers.
      I turn to amendment No. 38 and the figures in this part of the Bill. I notice that the many Government amendments to the clauses do nothing to alter the figures.
      The Bill allows £100,000 for highways and sewerage works and £50,000 for other new works. Those figures were set down by the DLO working party of 1975, five years ago. There has been a tremendous change in the value of money since 1975, and inflation will enlarge the gap day by day, week by week and month by month.

      1887
      Amendment No. 38 endeavours to set more realistic figures.
      The associations are also concerned about emergency works. The Bill not only covers direct building for housing or direct works on the construction of highways. It includes such matters as snow clearance, which is a costly item for councils, particularly in Scotland and the northeren counties. When it has snowed heavily overnight, councils do not have time to obtain tenders from three contractors to shift the snow. They need a department available throughout the year for such work. A more realistic limit would be £250,000.
      A direct works department is of significance in other emergencies. Any hon. Member who represents a coastal constituency is aware of the damage caused to sea walls through flooding. Lives are at risk, and immediate action is required. The work cannot be put out on competitive tender to private enterprise. I doubt whether private enterprise would even be interested. Our amendments would be of direct and significant help to many county councils and metropolitan authorities.
      The Association of Metropolitan Authorities states with regard to the Bill:
      "There are administrative expenses involved in the tendering procedure—it is estimated that a threshold of £100,000 will result in an additional 170 employees in England and Wales. A reduction of the threshold to £50,000 would result in an additional 750 staff simply to administer the tendering procedures. The estimated additional cost to local government of employing these staff would be £1·7 million and £7·5 million respectively."
      The Secretary of State for the Environment makes much of local government manpower figures. It is sad that he is not in the Chamber to hear that. The Bill will increase manpower not for a useful purpose but merely to further the views of the Government on open competitive tendering.
      On the figures alone, I seriously commend our amendments, which are supported by three local authority bodies, two of which are Conservative controlled. The Government's proposals will have a detrimental effect. I particularly ask the Government to update the figures, which are based on 1975 calculations.
      Amendment No. 60 is based on the de minimis principle. It would exclude from the operation of the Act authorities that
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      employ fewer than 100 people on functional work. The working party of direct labour organisations stated in its final report in August 1978:
      "We appreciate that for smaller DLOs there is a danger of imposing an elaborate checking organisation which will cost more than it is worth."
      That is why we have put down that amendment. There is evidence, particularly in many rural areas, that contractors are not prepared to carry out routine building maintenance at a reasonable cost. The district council has no alternative but to rely on direct labour, otherwise the work would not be done.
      9 pm
      The Association of District Councils, which represents the smaller authorities that will be most directly affected by our amendment, has supplied some startling figures. In the association's opinion, a work force of up to 100 would be a reasonable size. On the basis of the December 1979 manpower watch data, 126 district councils in England and Wales would be excluded. The ADC has provided an annex that shows that 44 authorities employ fewer than 50 employees.
      It is absurd to bring the rigid bureaucracy of the Act to bear on authorities with only a few employees engaged in this work. The amendment will do no harm to the principle that the Government wish to establish. In a typical metropolitan authority, contracts with a combined value of £16 million a year will be over £250,000 each, compared with an overall budget on new works of £20 million. The limit of £250,000 clearly allows sufficient work to go out to competitive tender. The exclusion of authorities with fewer than 100 employees would not damage the principle of competitive tendering which the Government are trying to establish.
      Our amendments are not probing amendments. They are serious and they have the full weight of the three local government organisations behind them. It would be in the interests of any Government who are concerned with saving money and with manpower watch figures to accept the amendments.
      Mr. Paul Dean: I hope that my hon. Friend the Under-Secretary will give serious consideration to the points that

      1889
      have been made in the debate so far. I pay tribute to my hon. Friend and to my right hon. Friend the Minister for Local Government and Environmental Services for having spent many hours in consultation with the local authority associations, but I have no doubt that the Government amendments go only a little way to meeting the justifiable misgivings of the associations. I agree with the Government's aims, but, like the right hon. Member for Widnes (Mr. Oakes) and the hon. Member for Caernarvon (Mr. Wigley), I am doubtful about the methods being employed.
      I subscribe to the view that direct labour organisations should be properly accountable, that inefficiency should be exposed, that there should not be disguised or unfair competition between direct labour organisations and local small firms and that where accounting methods are slack they should be tightened up. However, we must take into account the fact that those situations do not apply in all local authorities. Many Conservative-controlled authorities believe that they are loyally carrying out the Government's policies, but they are deeply disturbed about the new bureaucracy which they believe is being imposed on them in part II and other parts of the Bill.
      I ask the questions that have been asked already. Are all these new regulations really necessary to achieve the objective that the Government have in mind? How much additional work will be involved in local authorities changing accounting methods which they already believe to be satisfactory? What are the staff implications? I hope that my hon. Friend will be able to satisfy the House on those matters.
      I do not intend to repeat the arguments that have been made, particularly at this hour of the night. I wish, however, to highlight what seems to me the main theme of the criticisms by the Association of County Councils and the Association of District Councils, of which I have the pleasure to be one of the vice presidents, and by other local authority associations. They are saying, in essence, that substantial changes will be involved in their accounting procedures and that
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      this will mean additional returns and additional staff.
      I want to refer briefly to what seem to be two of the most important points. The first is tendering limits. I do not propose to weary the House with the details, which have been gone over before, but it seems to me that the limits proposed are almost bound to lead to additional costs of administration, on professional services and on tendering expenses. Is my hon. Friend sure that he must have the limits laid down to achieve the objective that he has in mind? Frankly, I doubt it. I ask him to have another look at the suggestions made by the Association of District Councils, contained in one of the amendments that we are discussing, to see whether it might be possible, in the proposals that have been made, or in proposals on similar lines, to have the adequate control that he needs without the additional bureaucracy that I feel will be involved.
      The second example that I give refers to the small labour forces, particularly in district councils in rural areas such as mine in the South-West. It is surely right and cost-effective for these local authorities to have small labour forces to deal with emergency and essential work when the sewerage system suddenly breaks down or when building maintenance work has to be carried out after a storm.
      It is probably not in dispute that these small labour forces in the smaller local authorities are cost-effective and should be retained. As I understand the Bill in its present form, they will have imposed on them the full weight of the returns and the accounting procedures that may well be appropriate for larger local authorities. I hope that my hon. Friend will have another look at this matter. Although the Government have gone some way to deal with the misgivings expressed in the amendments, I do not believe that they have gone far enough.
      I shall find it difficult to support the Government on these issues unless my hon. Friend is able to be sympathetic and more responsive to the points that have been put from both sides of the House. In my view, the aims and objectives which the Government, entirely properly, have in mind could be achieved with less cost and less trouble to local authorities,

      1891
      especially those that are efficient and support the Government's policies, and with less of a bureaucratic machine than I fear is being set up by this part of the Bill as it stands.
      Mr. Heffer: As a former employee of a direct labour employment department and chairman of a direct labour organisation for a local authority, I must say something in support of amendments Nos. 38, 39 and 60. The Government's attitude to direct labour is doctrinaire and dogmatic. If they had included in the Bill a clause providing that no local authority should negotiate tenders with private enterprise companies, there might have been a case for what they suggest. However, there is nothing to stop local authorities from long-term contract negotiating with Costain, Wimpey, or anybody else. Only local authority direct labour departments are being placed in that position.
      The amendments are important for a number of reasons. Direct labour organisations give construction workers continuity of employment. In areas such as Merseyside and Manchester, continuity of employment in the industry is needed. The £250,000 is a limited sum. It is a modest figure. Nevertheless, it would help to establish continuity of employment. We must move towards a system of decasualisation in the industry. It is scandalous that construction workers are constantly in and out of work. Direct labour organisations help.
      Unfortunately, the big building companies no longer take on many apprentices. This seed corn of the industry now comes from the direct labour organisations. If they are allowed to run down because of the Government's dogmatic and doctrinaire attitude, one of the most valuable assets that we have in training skilled youngsters for the future of the construction industry will be eliminated. We could end up with no skilled craftsmen if nothing positive is done.
      I know all the stories about direct labour organisations overspending, but the Minister must admit, if he is honest, that a number of big construction companies overspend. All types of agreements have to be made to meet overspending. That is legendary in the industry. There are plenty of examples.
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      What do the direct labour organisations do in the big cities? They have built some of our best flats and houses. The Manchester direct labour organisation, in particular, has a fantastic record for house building. In my own city we have built wonderful flats. They are the best. I do not refer to the ones that had to be pulled down. I am speaking of the ones that are still there, and will remain there, because they were not built with profit as the only motive. They are a good product for the people of the area. Direct labour organisations have also built schools, houses, fire stations and all kinds of public buildings.
      I recognise that the key to a good DLO is its management. That is true of any organisation. Private enterprise companies with lousy management can do nothing, and poor management of a DLO means that it cannot do its job properly. Conservative Members say, for doctrinaire reasons, that irrespective of whether management is good or bad measures must be taken to undermine the concept of the DLO. That is not good enough. I agree that DLOs must be made efficient, that they must have good accounting and that they must operate as local government construction companies. That is what we should aim for, and that is the view of the Labour Party as put forward in our document "Building Britain's Future".
      9.15 pm
      We do not support DLOs that are inefficient. We are not talking in those terms, and never have done. There is, of course, room for improvement in the efficiency of certain DLOs, but to eliminate them merely for their own sake, for doctrinal reasons, is wrong. The Government, however, are trying to do that.
      I turn to the matter of maintenance. I wish to see maintenance work in Liverpool done by a good, efficient DLO. That maintenance has been done in the past by such an organisation, though I know that there is room for improvement. I was chairman of the Liverpool DLO, and I used to have arguments with the lads on these matters. Should we really seek to get rid of good, efficient DLOs and allow the ladder-and-barrow cowboys to come in and take over?
      What kind of a product would our people get if that happened? We have already seen the result of the type of

      1893
      modernisation that has taken place in the vast working-class areas of the country when the ladder-and-barrow merchants have come in. The condition of some of the buildings was better before the cowboys touched them. People have said to me "Our buildings were marvellous before the cowboys came in to modernise them. Look at them now." The cowboys were not proper craftsmen. That is happening in Liverpool, where the Liberal council is undermining the DLO. [Hon. MEMBERS: "Where are Liberal Members now?"] They are not here to undermine anything at the moment, so interested are they in this matter.
      That is what is happening in Liverpool, and the Liberal-controlled council is to some extent supported by the Minister's political colleagues there. We do not want those cowboys doing the maintenance and repair work. They do not do it properly. A good DLO with real craftsmen and skilled workmen gives a good product to our people.
      Of course, there are overheads that do not occur in private enterprise, but it is right that there should be sickness benefit and decent conditions for DLO workers. All private enterprise companies in the construction industry should follow the lead given by the DLOs in that respect.
      I was delighted at what was said by the hon. Member for Caernarvon (Mr. Wigley). I do not disagree with a word of his statement. It was extremely good. The hon. Gentleman and I both speak the Welsh language—I speak it in a much more limited way than he does—and I found his ideas, apart from the issue of nationalism, first class. I agreed with him entirely.
      I hope that the House will support us, although I fear that Conservative Members will not do so. If there were more Members like the hon. Member for Somerset, North (Mr. Dean), matters would be different. This matter is of great importance, because there are many Tory local authorities that have good efficient DLOs, and they are arguing the same case as I have been arguing. I hope that a sufficient number of Conservative Members will support the amendment for it to be carried.
      Sir Albert Costain: I am delighted to have the opportunity to follow the speech
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      of the hon. Member for Liverpool, Walton (Mr. Heffer), because I remember him when he used to work for a private firm of contractors in Liverpool. I also remember him when he ran the direct labour organisation in Liverpool. I take no fees or anything else from the contracting industry. If I have any interest to declare at all, it is that I have a sufficient quantity of shares in a firm in Liverpool to cause me to do so.
      We have heard the ordinary arguments put forward. Let us deal first with the question of labour relations. I defy the hon. Member—I hope that he will rise to contradict me—to show me that the direct labour employees of the Liverpool corporation are on any better terms than the employees of the private firm that I represent. There are five Members of Parliament who have worked for my company. They can vouch that its terms are equal to or better than those of DLOs. Also, the larger or middle-sized firms train as many apprentices and are able to train them better because such firms get a greater variety of work.
      The hon. Member for Caernarvon (Mr. Wigley) used all the usual tactics of saying how local authorities must have a team of men so that if it snows on Tuesday the borough engineer or the controller can pick up the telephone and say "Charlie, there's a snowdrift down the valley. Go and clear it." It is so easy. The chief executive and the people who run things like to have a gang of men. They do not like to have to go through the formalities. As long as they have a gang of men doing nothing, so that they can remove snowdrifts, they are all right; they can do it. But what are those men doing in the meantime?
      The hon. Gentleman argued that if authorities put work out to tender they must have a great bureaucracy to prepare the tender, but is he saying that a DLO will not get out any estimate or prepare any costing, and, without knowing about costs, will say" Charlie, go and paint those 50 houses. I don't care a hoot what it costs "? If DLOs are to be efficient, they must have a costing system, and a costing system is related directly to an estimating system.
      Equally, the argument is frequently used that there are no contractors in the

      1895
      area to do the maintenance work. I remind hon. Members that what used to be the War Office—I never know quite what it is called now—used to have a day work schedule. It was able to get camps maintained by local contractors by simply ringing up and referring to a day work schedule, which was tendered once a year against competitive tenders. In such circumstances local contractors are able to build up their organisation to cope with the sort of demands they get, but if they have not got that sort of contract they cannot build up an organisation. One gets the chicken-and-egg attitude. There is no contractor available to do the work when one wants it done because one does not give it to him when one has it to give to him. Thus, the orgainsation that is necessary is not built up.
      Equally, what is often overlooked on this point is that as long as one uses only a DLO, one is at a disadvantage. I am not saying that councils should not have a small standby force. In my opinion, it ought to be what the larger property companies have—a small standby force of people who are generally foremen and who are capable of repairing the odd lavatory when a crisis arises and Mrs. Jones says "I can't wait. Come and repair my lavatory." They tend to have those sorts of persons around. It need be only a small number. They could act as foremen to supervise the work.
      We must realise and appreciate that if we want an efficient organisation, and if we want to use our manpower to the best of its ability, we need versatility—and the contractors are able to give us that. Not only do they work for the local authority; they supply services to the local community. Therefore, not only does the local authority benefit by having small contractors available to carry out maintenance work and build small projects; they provide an opportunity for those who own their own homes to draw on an existing organisation. They are able to spread the work load and make the work more interesting.
      I know a number of skilled men who, in times of depression, have felt that they might be better getting a job with a local authority that will employ them come hail, rain or snow. At the time when there was no wet weather pay in the building industry there was a strong argument in favour of that. But conditions in the
      1896
      building industry have changed. It is no longer the casual occupation that the hon. Member for Walton knew when he was an apprentice. It is a more stable organisation. Top-level men are now able to, and want to, join that industry. They are anxious to join contractors' organisations because they have much greater scope. They could eventually be elected to the board.
      I can tell the hon. Member for Walton that on the board of the small Liverpool company to which I referred, with a turnover of £3 million a year, all but one of the directors started as an artisan or foreman and rose to board level. They could not do that in a direct labour organisation. That is why they want to join a private firm. They are people of ambition. The hon. Member for Walton could not get on that far in a direct labour organisation. He had to come here for what little success he has.
      I hope that my hon. Friends on the Front Bench will resist the amendments. They should do that if contracting organisations are to become more efficient in the building industry.
      Mr. Robert Litherland: I think that it is time that we returned to the debate on direct labour. One thing that is characteristic of the Bill is the vagueness of the wording. The Bill does not give any figures about capital works. It says "the prescribed amount"—that is, the amount prescribed by the Secretary of State.
      In Committee the Under-Secretary of State for the Environment said:
      "I accept that tendering is a difficult area to get right. On the one hand, we have to make sure that direct labour organisations are regularly tested in fair competition across the whole range of their operations. Equally we have to make sure that private contractors—big, medium and small—get a fair chance of winning local authority work."—[Official Report, Standing Committee D, 21 February 1980; c. 178.]
      The Minister used the term
      "regularly tested in fair competition".
      Will that testing be regular? It will not according to the Bill.
      Every capital project of any significant size will have to go out to tender. Will the competition be fair? One main flaw in the Bill, and in the assumption of the Government, is the comparison between

      1897
      a municipal enterprise and a private enterprise. They work under entirely different sets of disciplines, rules and regulations. One has to envisage the restraints imposed on a direct labour organisation—having to work within the confines of a local authority committee structure, the financial provisions of that authority, the standing orders, being reliant upon another department even to recruit its personnel, and restricted in areas of performance. In other words, it is able to tender for capital works only within its city boundaries.
      9.30 pm
      As my hon. Friend the Member for Liverpool, Walton (Mr. Heller) said, direct labour organisations are committed to a decasualised labour force, bringing with it a stable work force and stable working conditions. Apprentice training has always been in the forefront of direct labour organisation policies. My own authority of Manchester is renowned for its contribution to the training of apprentices into skilled craftsmen and even craftswomen.
      There are even projects where sheltered accommodation for the elderly is built solely by apprentices who have been trained under the supervision of officers. Where can that be found in the private sector? If the profit motive is imported into direct labour organisations, schemes such as I have described will be discontinued, because no longer will such projects be undertaken, for the simple reason that they are non-profit making. As a result, many school leavers will not be afforded a training and many youngsters will join the dole queues. Manchester takes on about 150 apprentices, but there are 2,000 young people knocking on the door and we cannot afford to give them jobs.
      DLOs have commitments with regard to the disabled. Here again, my own authority has a 5 per cent. employment level for registered disabled persons. That ranges over 25 classified disablements. All of the people are employed in beneficial and productive work. Such a scheme is rewarding and has far-reaching benefits, but, like apprentice training, it costs money. DLOs must stick strictly to the letter when it comes to safety, health and welfare, superannuation schemes, and so on.
      1898
      Those are the social benefits of DLOs, but social benefits are costly. If DLOs are required to tender for every contract, without being able to negotiate at least one in three, the social content in the tender will be cut drastically. In other words, it will not be possible to take on apprentices. They will be unable to have a decasualised labour force or take on the disabled.
      Unlike the private sector, where men can be hired and fired with every new building project, where new bonus schemes can be introduced, which has the length and breadth of the country in which to tender, where in an economic decline work can be bought and suicidal tendering can be indulged in, where lump labour can be used, where apprentice training can be cut, and where moral responsibilities to the disabled can be ignored, the DLOs must meet their responsibilities without a rolling programme of work. As a result, the role of direct labour must be limited.
      The Government are seeking to impose further limitations on organisations which are already restricted by local government laws, byelaws, and statutory provisions. To subject DLOs to an overriding obligation to compete for every project and to show a profit defeats the whole object of having a department that provides a service. It was never the intention that DLOs would be profit-making sections. The profit motive does not apply to other local departments that provide a service. The prime function of providing a service is completely ignored when value for money or profit appraisals are considered. Profit appraisals disregard the enormous social benefits, all accountable costs in competitive tendering and carrying out the role of a model employer, which are of benefit to the ratepayer. Those factors are ignored by the critics of direct labour.
      There are many critics of DLOs, especially when they are successful. I refer to capital works. Manchester has had a massive slum clearance programme. It has provided the work and sites for major house building projects. Manchester direct labour department won most of these contracts in competitive tendering mainly because during the relevant period the private sector was operating in the more lucrative areas. Being successful in competition, the department was

      1899
      allowed to negotiate contracts of comparable size.
      Today we are in a completely different ball game, and with the cutback in new house building and other Government financial restrictions the construction industry is at a low ebb. The private sector will be grabbing all the public sector work that it can lay its hands on. The Bill will enable it to do so. In the present economic climate, in which suicidal tendering is the order of the day, contractors can put in ridiculous tenders with which a direct labour organisation cannot compete.
      If the Government's intention is not to allow DLOs to negotiate any contracts, the whole nature of DLOs as a municipal enterprise, providing social benefits to the community, will have to be fundamentally altered, or DLOs as we know them today will be forced out of existence.
      The figure for capital works of £250,000 is only updating an unrealistic figure of £50,000 that was agreed five years ago. It is really the distinction between major and minor works. If the Government would concede this figure, more items of minor work could be carried out than at present. That, in turn, would compensate for the loss of the major capital works because of the Government's insistence that every contract of any real consequence will have to be tendered for.
      As has been pointed out, the disastrous effects of negotiated tenders in new-build must be common knowledge to most local authorities. In Manchester we have some huge monstrosities, which have been system-built, leaving many a scar. The same sort of thing can be seen in other cities and towns throughout the country. The intention to contract out maintenance work—which the amendment also covers—will mean a greater use of subcontractors, but the contractors on maintenance will not be interested in the everyday repairs. They will not want to give a 365-days-a-year service. They will not want to be called out on emergencies. They will be after the more lucrative maintenance items, such as programmed repairs, the house painting of whole estates, re-roofing and re-wiring. They will want the cream, and the mundane jobs will be left for the direct labour sector. Private contractors will not
      1900
      hesitate to cash in on this aspect of maintenance activity.
      This was epitomised in the tendering for schools and colleges recently in Manchester. After the recent reorganisation of Roman Catholic schools in the Manchester area, Xaverian college became the responsibility of the direct works department. The direct works department estimated a sum of £22,750 as the cost of painting the college. The lowest tender received from a private painting contractor was £97,480; the highest was £106,250. But unbeknown to the painting contractors, the painter who had previously been responsible, before reorganisation, was asked for his price, and it was £22,700.
      If this portion of the Bill goes through, once again the building and maintenance section will be open to monopolies, cartels and so on. It will be the death knell of the smaller direct labour organisations, and once again the public will be taken for a ride.
      Mr. Anthony Beaumont-Dark: I have never heard a worse case put for a direct labour organisation. The hon. Member for Manchester. Central (Mr. Litherland) makes it sound as though a direct labour organisation is part of social welfare—a glorified employment office. But that is not the purpose of a direct labour organisation, and it is nonsense for anyone to suggest that any council should have an organisation that is set up regardless of the costs that it is likely to involve itself in.
      The hon. Gentleman talked about training apprentices. Is he not aware that private builders are possibly the biggest trainers of apprentices? [HON. MEMBERS: "Rubbish."] Hon. Members may say "Rubbish", but it cannot bear examination that the only people training building apprentices are direct labour organisations.
      Mr. Stan Crowther: Is the hon. Gentleman aware—I am sure he is not, but I shall tell him—that there have been many occasions in my constituency when the only employer appointing apprentices in the building trade was the local authority?
      Mr. Beaumont-Dark: That may be so, but I was responsible for closing down

      1901
      the direct labour organisation in Birmingham when I was chairman of the housing department. I believed that that was the right thing to do.
      Mr. Joseph Dean: The hon. Gentleman made a categorical statement that private sector builders are the largest employers of trainees in the building industry. Surely the House is entitled to hear figures to justify that claim, because I think it is nonsence.
      Mr. Beaumont-Dark: No one who understands the building industry can suggest that without direct labour organisations there would be no apprentices.
      Mr. Dean: Answer the question.
      Mr. Beaumont-Dark: With respect, may I say that in the city of Birmingham there are at least four builders who have over 20 apprentices each. The direct labour organisations in Birmingham had four apprentices at the last time of counting.
      The hon. Member for Manchester, Central mentioned the cost of contracts. Surely Manchester city council cannot have been so badly run that when it put contracts out they were costed by its department. To suggest that a builder was able to get away with charging £90,000 for a £20,000 contract says a great deal about the costing department of the city of Manchester. Under a Labour-controlled or Conservative-controlled council such a thing would not have been able to happen in Birmingham.
      With regard to cost analysis, in Birmingham we worked on cost plus—the most dangerous of all fallacies. It seems a good idea to agree to build a house, repair a block of flats or decorate a building on a cost basis. But what is a cost? It depends upon all the costs of an organisation. The hon. Member for Manchester, Central suggested that on top of a normal building and decorating practice we should load all the factors of decasualisation, all the good things about social benefits and all the talk about training apprentices. The result would be that something that should cost £10,000 would cost £20,000. If a private builder is given a contract on the right basis, and if he tenders for a contract for £40,000 or £400,000, that is the sum of money that he will receive.
      1902
      When I inherited the direct labour organisation in Birmingham, it was said that a building would cost £100,000 against a private builder's tender for £20,000. If, because of mismanagement, the job cost £250,000, the ratepayers had to pay.
      This clause is not intended to do away with direct labour organisations as such. It intends to bring them under a proper, sensible control. Conservative Members are confident that, if Socialist councils are left to run riot with direct labour organisations, we shall end up with hugely expensive, inefficient organisations, and the ratepayers will pick up the bill. The cost will escalate, fewer people will be employed, and less work will be done.
      9.45 pm
      Mr. Reg Race: The illiterate speech that we have just heard was a good example of the way in which Conservative Members talk about the building industry.
      The building industry has a magnificent record. Under private control it has hundreds of thousands of workers on the dole, huge stockpiles of bricks, and few people being trained for skilled work. Many of the buildings erected by private contractors cost far more than was intended, and many have serious structural and architectural deficiencies. That, in essence, is the record of the private sector of the building industry. For Conservative Members to defend that situation and to criticise direct labour organisations is extremely cheeky in view of the position of the private sector of the building industry.
      It is about time that we discussed the real reason for clauses 6 and 7. The real reason for these clauses is that the profit that can be screwed out of the building industry in our present economic situation is low. The private sector has to get its hands on the maximum amount of profitable work that is available when the Government are cutting public expenditure as they are. Therefore, they have to take away from the public sector a substantial slice of its business to maintain the profits of Costain, Wimpey, and the other large building contractors. [Interruption.] Of course, people are employed in the private sector, but we need to increase the amount of building work, not

      1903
      to shift a small proportion of it from the public to the private sector.
      I want to follow the remarks made by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) about the consequences of restricting the activities of direct labour organisations. One way in which direct labour organisations will be affected is by part-time casual employment in the building industry being substituted for full-time employment. The building industry is riddled with part-time casual employment. The major contractors are responsible for that situation. They like to employ people on piece work—doing particular jobs on the basis of sub-contracting. That has led to large numbers of people being unemployed for long periods or being on supplementary benefit.
      One consequence of these clauses will be that those who have been directly employed full-time in the public sector will be forced, if they wish to remain in their trade, into the private sector to maintain any degree of job security. They will also have to go through long periods of unemployment or under-employment to satisfy their new task masters, and the State will have to pay for that privilege. The State will have to keep those people on supplementary benefit or unemployment benefit during the periods when the industry is not employing them. The cost of shifting people from the public sector to the private sector will be substantial, and the Government have not dealt with these arguments.
      Mr. John G. Blackburn: I am doubly grateful to the hon. Member for giving way, as I have been in the Chamber only for the last quarter of an hour of the debate. Perhaps he will be aware that in the Midlands some local authorities that have direct labour forces have recently come under the control of the Labour Party. There are people in my constituency who have been employed by the Sandwell authority in its direct labour department for many years, exercising their skills and crafts in the building industry. They have been dismissed entirely on the ground that a closed shop has been brought in. Is that the way to treat these people in the public sector? I have a responsibility to these constituents.
      Mr. Race: That raises questions that are more appropriate for the Employment Bill. In some direct labour organisations there is a closed shop, and I do not object to that. I am not clear whether the hon. Member is saying that some individuals have been dismissed because they would not join a trade union. If that is so, I would want to look at the fine print of the membership agreement to see whether the hon. Member's claim is soundly based before making any further comments. I cannot say any more without further information.
      Amendment No. 38 seeks to impose a limit below which direct labour organisations could effectively go about their business without having to go out to contract. That is absolutely necessary. Why should every tin-pot repair to a house or school be subject to this bureaucratic procedure? That is the issue in question tonight. The limit that has been placed on the procedure in the amendment is extremely modest. I would like to see that limit increased in line with inflation over a period. Changes would be necessary over the years if that limit were effectively to remain as it is now. Clearly, we would have to change it in order to reflect changes in the retail price index.
      The threat to the direct labour organisations is extremely serious. Many hundreds of people throughout the country will be thrown out of work deliberately by these clauses and many will not get jobs in the Private sector because of the pool of unemployment. Ministers have a heavy responsibility, because they will put people into the dole queues at a time when it is extremely difficult to get jobs in the construction industry. I hope that they do not sleep well at nights when they think of that prospect. I believe that the clauses are damaging and irrelevant to the problems of the construction industry.
      Mr. Ken Eastham (Manchester, Blackley): I have found this debate very interesting because on numerous occasions several hon. Members have referred to their experiences in local government. I served for a number of years on a local authority in a major city, and over the years it has become increasingly obvious that the issue of direct works organisations in the building trade is highly contentious.

      1905
      Conservatives talk about competition, but because this element of competition was introduced into the building industry by a Labour Government, they are suspicious. The Bill puts obstacles in the way of direct works departments, designed to ensure that they are not successful and cannot compete in doing first-class jobs. The Government are probably spending hundreds of thousands of pounds in their campaign against direct works departments. They say they have the ratepayers' interests in mind, but I believe that they are spending that money in their own interests.
      It has been suggested that the building industry is stable. The opposite is true. It is the most unstable industry in the country. There are bankruptcies week in and week out. In my constituency numerous firms have gone bankrupt and disappeared almost overnight. The local authority is left with the job of picking up the pieces. Without a direct works organisation it is difficult to complete a job that is left unfinished. Private builders can hold local authorities to ransom. They can demand any figure, and local authorities have to agree in order to complete the job.
      The hon. Member for Folkestone and Hythe (Sir A. Costain) talked of local authority commitments as if one man and a wheelbarrow would be sufficient for the maintenance work. Manchester has about 100,000 council houses, which require maintenance by an organised labour force. If a work force is employed that is familiar with the estates and the buildings, it is more efficient, which leads to improved maintenance.
      Apprentices have been mentioned. I have been chairman of an education committee. The college of building is located in the centre of Manchester. Had it not been for Manchester's direct works organisation sending apprentices to that college, it would have closed down. The private sector did not send apprentices there. They had very few apprentices to send. It may be different in Birmingham, but an across-the-country examination will confirm what I have said. I should like to quote from report No. 10/1975. It is a report of a meeting held on 24 July 1975. It concerns the memorandum—
      It being Ten o'clock, the debate stood adjourned.
      Ordered,
      That, at this day's sitting, the Local Government, Planning and Land (No. 2) Bill may be proceeded with, though opposed, until any hour.—[Mr. Brooke.]
      Question again proposed, That the amendment be made.
      Mr. Eastham: The report concerns the memorandum of evidence for the Lay-field committee of inquiry on local government and finance. Inter alia, it states:
      "The Association which represents local authorities at both county and district level in London and in the six metropolitan, areas outside London, which between them serve a total population of nearly 20 million people, firmly believes that the properly regulated and controlled use of directly employed labour by local authorities in the fields of new construction and building maintenance brings substantial economic and financial benefits both to local authorities themselves and to the community at large."
      That has been said by a distinguished body, which is supported by both Labour and Conservative Parties.
      Owner-occupiers provide evidence in favour of direct labour. The owner-occupier sees the benefit of direct labour. One often sees an owner-occupier undertaking do-it-yourself work. If a man decides to paint his house, he cuts out the middle man. As a result, he will get a first-class job, and he will save a lot of money. Direct labour was introduced to do exactly the same thing.
      Many local authorities do not believe that middle men should be paid when labour can be directly organised and engaged. Conservative Members cannot deny that they use direct labour when they carry out work. Local authorities have often suffered from jerry building. Cowboys turn up. For years, men worked on the lump without any moral responsibility to the local authority. That was disgraceful. Local authorities had to pick up the bill months later, when the contract had been completed. The men could not be found to correct some of the awful work that they had done.
      The subject of additional tendering is mind-boggling. If a massive army of estimators is used for tendering, enormous numbers of technical staff will be

      1907
      employed. Buildings and financial support will be needed. As a result, further costs will be incurred. Ratepayers will not want that, because it will not make the job any cheaper. Conservative Members often put their hands on their hearts and say that they are interested in making jobs cheaper. Such tendering will not do that.
      An organisation controlled by a local authority can achieve good standards in construction work, which will reduce the legacy of maintenance work. Maintenance bills are often a direct result of shabby building, of which there are scores of examples in many major cities, including Manchester.
      Direct labour provides a check on prices and sobers up the private sector. I was told recently about work carried out in a hospital that comes under an area health authority that has no direct works organisation. The recommended list of private builders tendered for about £14,000 for the most minimal adaptations. It worked out at £77 a square foot to build one wall, put a roof on it, and provide a toilet and lighting for a waiting room. I bet that the prices would not have come out like that if there had been a direct works organisation.
      My hon. Friends and I have nothing to be ashamed of. We know that people get value for money from direct labour organisations. Conservative Members may titter and chuckle, but they know that they are pursuing this matter in the interests not of ratepayers but of private builders.
      Mr. Stanley Newens: As the hon. Member for a constituency in which there is a successful direct works department in Harlow new town, which is run by the Harlow district council, I wish to say a few words on the issues raised by the amendments.
      The Government have claimed at various times that local authorities should be locally controlled and that there should be less bureaucracy, less red tape and less outside interference. But the clauses that we are considering provide for exactly the opposite.
      Serious problems have arisen in many of the houses transferred by new town development corporations to local authorities. Those properties require considerable expenditure on repairs and the matter
      1908
      is being discussed by new town local authorities and the Department of the Environment.
      It is important to point out that the houses that are subject to those faults were built not by direct labour but by contractors. I am not criticising all contractors, but we should recognise that the apparent cost advantages that are sometimes claimed by contractors are illusory, particularly when the quality of work is inferior. Some of my hon. Friends have already referred to the problems with which the lump presented us. In many new towns, we are facing the legacy of those problems, which were not created by direct works departments.
      I do not believe that there is any justification for the clauses, even from the Government side, except as a gift to private contractors. That is the motivation behind their introduction. Many private contractors have suffered enormously from reductions in public expenditure forced on local authorities by the Government. In the new towns, large contractors have done very well as a result of the large public schemes that have been conceived by previous Governments, but which the present Government are not prepared to countenance. The bureaucracy to which these clauses will give rise will increase the cost to the public without any advantage to those who foot the bill. I do not see that there is any reasonable argument for placing restrictions on efficient direct works organisations.
      I believe that, for these reasons, we should most certainly support the amendments before the House.
      Mr. Fox: We are discussing a multitude of amendments. I should like to bring the House back to them. A block of five, Nos. 28, 29, 31, 32 and 33, put down by the hon. Members for Caernarvon (Mr. Wigley) and for Merioneth (Mr. Thomas), are effectively wrecking amendments that would remove from the scope of the Bill more than 90 per cent. of all direct labour organisatons' activity, including virtually all operations of major significance. They cannot be accepted by the Government.
      A modest Government amendment, No. 30, is put down in response to a suggestion in Committee that certain arrangements for one council to do work for another, under section 18 of the London

      1909
      Government Act, were not properly dealt with. This is technical. A further Government drafting amendment, No. 34, again put down in response to discussion in Committee, clarifies clause 7(2), which has been the source of much misunderstanding. It makes it clear that DLOs will have to declare in advance the basis on which they intend to charge for their services. That is an obvious and fundamental requirement if they are to operate on a trading basis. We are working out a code of practice for the local authority associations and the Chartered Institute of Public Finance and Accountancy, which will give further clarification and help to councillors who need it.
      Amendments Nos. 35 and 36 are again Government drafting amendments as foreshadowed in Committee. They have the same effect in relation to functional work as amendments Nos. 24 and 25 in relation to contract work.
      In amendments Nos. 37, 38 and 39, to which the right hon. Member for Widnes (Mr. Oakes) spoke, we come to the major issue, the tendering limits. I shall return to this question in a moment. I shall first finish my description of the amendments before the House by mentioning amendment No. 60, which also deals with an important matter. This amendment seeks to establish a de minimis level and excludes from the provisions of this part of the Bill authorities with only small direct labour organisations.
      I turn now to amendments Nos. 37, 38 and 39. I am grateful to the right hon. Member for Widnes for the reasonable way in which he put them forward. The Government suggested in Committee, as a basis for consultation, new proposals for a possible regime for regulating DLO tendering. We have since listened to the arguments from various quarters both for relaxation and for tightening of the proposals. We have decided to make two changes to the February proposals. The first deals with highways work. We have always accepted that there are special problems in connection with winter maintenance, snow clearing and the like. The work is, in essence, unpredictable, as hon. Members have indicated. Authorities need to keep men and plant on standby. We have, therefore, decided to exempt all such work from the need for competition. Otherwise, for highways work we stick to
      1910
      our proposal that all highways work worth more than £100,000 should go out to tender.
      Secondly, on sewerage work, we have decided that, in view of the considerable interdependence between routine sewer maintenance and the emergency service provided by sewer gangs, there should be a single category to embrace both new sewerage work and sewer maintenance of all sorts. We shall require all work in that category to be exposed to competition if it is estimated to cost more than £50,000. That is a more stringent requirement than we first proposed for new sewerage work, but it is a significant relaxation in respect of maintenance work.
      10.15 pm
      We shall make no other changes. New work, apart from highways work, will be subject to tender automatically once a project exceeds £50,000 in value. In addition, one-third of DLO turnover in this category, again excluding highways and sewerage work, will be exposed to the test of competition. Maintenance work will be free from the requirement for competitiion only in so far as it is worth less than £10,000. All the limits will be subject to revaluation in the light of changing building prices.
      Mr. Heffer: Are the Government saying that in no circumstances can a local authority enter into a negotiated tender with a private enterprise company? Alternatively, are the Government intending to allow local authorities to continue to negotiate tenders with private enterprise companies?
      Mr. Fox: Various other matters are to be discussed. If there have been successful agreements between local authorities and the private sector, our proposals should not interfere with efficient workings.
      Mr. Heffer: Why does the provision apply only to direct labour organisations? That proves beyond doubt the dogmatic and doctrinaire attitude of the Government. Only direct labour organisations will suffer.
      Mr. Fox: The hon. Gentleman is forgetting what direct labour organisations were set up to do. Before he becomes too excited, I suggest that he should wait until we put the tendering practices into

      1911
      operation and see how efficiently the organisations of which he is so proud perform. We are not saying that there will not be work for direct labour organisations. To listen to some hon. Members, one would think that that was our intention. All we are saying is that they must be accountable, as is the private sector.
      The amendments seek to impose requirements which are significantly less stringent than those upon which we are resolved. Efficient authorities with effective DLOs will be able to face competition of the type that we envisage. We are satisfied that the arrangements will spare authorities the burden of excessive tendering on small, essentially repetitive work. At the same time, we shall ensure that the prices of substantial projects are properly tested in competition. I think that that is acceptable on both sides of the House.
      Private building firms, particularly the small and medium-size firms, will be given a fair opportunity to compete for public sector work. The amendments should be rejected.
      Mr. Joseph Dean: Has the Minister heard of the Bramwell report, which some years ago was adopted by a Conservative Government, under which direct labour departments and private contractors were allowed to tender for one contract and, on the basis of a successful tender in open competition, were allowed to negotiate another two contracts? Why are the Government moving away from that system when it has been so successful?
      Mr. Fox: We have examined all the issues carefully. We came to conclusions which are written into the Bill. We are satisfied that we have found the best solution.
      I take the point made by my hon. Friend the Member for Somerset, North (Mr. Dean) about bureaucracy and accountability. What I shall say about the final amendment will please him in relation to the smaller DLOs. We are satisfied that in our negotiations with the CIPFA we shall find a simple procedure which will not involve the increase in staff of which some people are fearful.
      I am glad to have the support of my hon. Friend the Member for Folkestone
      1912
      and Hythe (Sir. A. Costain). My hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) was right to state that more training is done in the private sector than by local authorities. It is no good Opposition Members shaking their heads, because I have figures from the training boards. In the private sector there is one apprentice for every 12 employees, whereas in the local authority sector there is one apprentice for every 18 employees. My hon. Friend, therefore, was entirely right.
      I move now to amendment No. 60. I must advise the House to reject this amendment, which would effectively allow about 230 authorities of a total of 550 entirely to escape the provisions of this part of the Bill. We have, however, considered the matter of de minimis exclusion with great care, as we promised in Committee, and we agree that there is a point at which an undertaking becomes too small to draw the full benefit from the new accounting and management systems provided in the Bill. We think that that point comes when the number of operatives falls below 30. We shall therefore table amendments in another place to enable such authorities to be exempted from all the provisions of this part of the Bill.
      Mr. Den Dover: Will my hon. Friend confirm that there is no provision in the Bill to prevent local authorities from giving work to their DLOs even if those organisations are not the lowest tenderers? Will he also give an assurance to the House that if that practice takes place on a grand scale he will require local authorities to advise the Secretary of State which contracts they are giving to direct labour when DLOs have not put in the lowest tender?
      Mr. Fox: There are powers in the Bill to prevent that kind of abuse.
      Opposition Members must not see in the Bill an attack upon DLOs. We maintain that efficient DLOs have nothing to fear, but for far too long the others have been a drain on the ratepayers. It is about time that there was close accountability. The previous Labour Government spoke in terms of introducing certain measures in this context. They were just as worried as we are about certain excesses that were taking place. I advise

      1913
      my hon. Friends to oppose these amendments.
      Mr. Paul Dean: I am reassured by what my hon. Friend said on two points. The first concerns tenders and the second and more important point concerns small labour forces. Do I understand from what my hon. Friend said that there is a firm commitment on the part of the Government to introduce a de minimis rule that will allow smaller local authorities to employ a small number of people on emergency work without having to go through all the rigmarole? Is that correct?
      Mr. Fox: My hon. Friend is right. It is our intention to exclude any DLO with fewer than 30 workers from these strictures. Local authorities will not have to set up a new organisation.
      Mr. Oakes: I have listened carefully to the Minister. My hon. Friends all said that the amendments that we were moving were modest and that they were desired by all three local authority associations. The Minister has not seen fit to concede even those modest amendments. The hon. Gentleman has given nothing to the House. Even on the de minimis principle it is clear from the attitude of the Government that this has nothing to do with free competition among authorities. It is a matter of malevolence towards building departments and direct works departments. The fact that the hon. Gentleman would not concede even the modest points that we raised is proof of that. When we come to amendment No. 38, we certainly intend to divide the House.
      Mr. Wigley: This has not been such a good debate. Many points have not been covered, and if we follow the advice given by the Government we shall follow what is, to a large extent, dogma.
      It is somewhat disingenuous of the Minister to say that this is not an attack on DLOs. It most clearly is an attack. If, in a competitive tendering system, there are private sector companies up against the wall putting in tenders that are well below what they would put in
      1914
      in a normal marketing situation, authorities will be forced to take those tenders. That will be the reality if there is an ongoing era of the sort of depression that we have seen in the building industry. As a result, there will not be the work for DLOs and we shall see the rundown of them. Inevitably there will be a substantial erosion of these departments.
      The real question is whether DLOs are always run as effectively and efficiently as they should be. Some of them are not so run, and it is right that those should be strengthened. But what we get from the Government's proposals does not achieve that. Whereas inefficient DLOs put an additional cost on the ratepayer, when private building contractors get into difficulties they put off labour and the cost goes on to the taxpayer. Apparently, that is quite legitimate but the other cost is not legitimate.
      The advantage of having a DLO on a substantial scale is that one can have planning of the manpower that has the skills to undertake the work rather than the present hotch-potch of having thousands of skilled men unemployed and no ongoing planning in the construction industry. That is the overwhelming argument. It is not an argument for having inefficient DLOs. It is an argument for having well-organised departments.
      I was rather encouraged by the Minister when he said that amendment No. 28 would wreck 90 per cent. of the Government's intentions. It nearly persuaded me that it would be worth pressing it. It is important, however, that we project from this debate the fact that the Opposition Benches were putting forward constructive amendments which would have been adding to and making more effective the work of DLOs and that the Government have come out against those amendments. For that reason, I am prepared not to press amendment No. 28 but to support amendment No. 38.
      Amendment negatived.
      Amendment made: No. 30, in page 7, line 8, leave out 'or agreement' and insert ',agreement or requirement'.— [Mr. Fox.]

    Clause 7

      REGULATION OF FUNCTIONAL WORK
      Amendments made: No. 34, in page 7, line 36, leave out from 'work' to end of line 37 and insert
      'of any description unless they have first prepared a written statement—

      (a) of the amount which they will credit to their DLO revenue account in respect of carrying out the work or of carrying out work of that description which they intend or expect to carry out; or

      (b) of a method by which they intend that the amount to be so credited shall be calculated'.

      No. 35, in page 7, line 38, after 'regulations', insert '(a)'.
      No. 36, in page 7, line 42, at end insert and
      (b) specify other conditions with which a local authority or development body must
      comply, as well as complying with subsection (2) above, before they undertake functional work of any other description.'. —[Mr. Fox.]
      Amendment proposed: No. 38, in page 7, line 42, at end insert—
      (3B) no regulations made under this part of the Act shall in respect of general highway works or works of new construction other than general highway works require a local authority or a development body to invite offers under subsection 4 of this section, in respect of any amount of such works, which in the estimation of the authority or development body will not exceed £250,000.'.—[Mr. Fox.]
      Question put, That the amendment be made:—
      The House divided: Ayes 65, Noes 114.

      Division No. 387]

      AYES

      [10.27 pm

      Alton, David

      Foster, Derek

      Price, Christopher (Lewisham West)

      Archer, Rt Hon Peter

      Graham, Ted

      Race, Reg

      Atkinson, Norman (H'gey, Tott'ham)

      Grant, John (Islington C)

      Richardson, Jo

      Barnett, Guy (Greenwich)

      Hamilton, W. W. (Central Fife)

      Roberts, Ernest (Hackney North)

      Beith, A. J.

      Harrison, Rt Hon Walter

      Rodgers, Rt Hon William

      Booth, Rt Hon Albert

      Hattersley, Rt Hon Roy

      Ross, Stephen (Isle of Wight)

      Callaghan, Jim (Middleton & P)

      Haynes, Frank

      Skinner, Dennis

      Campbell-Savours, Dale

      Heffer, Eric S.

      Soley, Clive

      Cartwright, John

      Homewood, William

      Spearing, Nigel

      Cocks, Rt Hon Michael (Bristol S)

      Howells, Geraint

      Spriggs, Leslie

      Crowther, J. S.

      Lamborn, Harry

      Stoddart, David

      Cryer, Bob

      Lamond, James

      Stott, Roger

      Cunliffe, Lawrence

      Leighton, Ronald

      Strang, Gavin

      Davidson, Arthur

      Litherland, Robert

      Straw, Jack

      Davis, Terry (B'rm'ham, Stechford)

      Maclennan, Robert

      Wainwright, Richard (Coine Valley)

      Dean, Joseph (Leeds West)

      Marks, Kenneth

      Welsh, Michael

      Dixon, Donald

      Mikardo, Ian

      Wigley, Dafydd

      Dormand, Jack

      Mitchell, R. C. (Soton, Itchen)

      Winnick, David

      Douglas, Dick

      Morton, George

      Woolmer, Kenneth

      Douglas-Mann, Bruce

      Newens, Stanley

      Dunwoody, Mrs Gwyneth

      Oakes, Rt Hon Gordon

      TELLERS FOR THE AYES:

      Eastham, Ken

      Park, George

      Mr. Hugh McCartney and Mr. John Evans.

      Foot, Rt Hon Michael

      Penhaligon, David

      NOES

      Alexander, Richard

      Dorrell, Stephen

      King, Rt Hon Tom

      Atkins, Rt Hon H. (Spelthorne)

      Douglas-Hamilton, Lord James

      Lamont, Norman

      Baker, Nicholas (North Dorset)

      Dover, Denshore

      Lawson, Nigel

      Beaumont-Dark, Anthony

      Dunn, Robert (Dartford)

      Lester, Jim (Beeston)

      Benyon, Thomas (Abingdon)

      Eggar, Timothy

      Lloyd, Peter (Fareham)

      Berry, Hon Anthony

      Elliott, Sir William

      Lyell, Nicholas

      Best, Keith

      Fairgrieve, Russell

      Macfarlane, Neil

      Biggs-Davison, John

      Faith, Mrs Sheila

      Mac Gregor, John

      Blackburn, John

      Fenner, Mrs Peggy

      McNair-Wilson, Michael (Newbury)

      Body, Richard

      Fletcher-Cooke, Charles

      Major, John

      Boscawen, Hon Robert

      Forman, Nigel

      Marlow, Tony

      Bottomley, Peter (Woolwich West)

      Fox, Marcus

      Mather, Carol

      Brinton, Tim

      Garel-Jones, Tristan

      Maude, Rt Hon Angus

      Brooke, Hon Peter

      Gorst, John

      Maxwell-Hyslop, Robin

      Brown, Michael (Brigg & Sc'thorpe)

      Griffiths, Peter (Portsmouth N)

      Mellor, David

      Browne, John (Winchester)

      Hampson, Or Keith

      Moate, Roger

      Bruce-Gardyne, John

      Haselhurst, Alan

      Morrison, Hon Charles (Devizes)

      Cadbury, Jocelyn

      Hawksley, Warren

      Morrison, Hon Peter (City of Chester)

      Carlisle, Kenneth (Lincoln)

      Heddle, John

      Murphy, Christopher

      Chapman, Sydney

      Henderson, Barry

      Needham, Richard

      Clarke, Kenneth (Rushcliffe)

      Heseltine, Rt Hon Michael

      Nelson, Anthony

      Colvin, Michael

      Hogg, Hon Douglas (Grantham)

      Neubert, Michael

      Costain, A. P.

      Hooson, Tom

      Newton, Tony

      Cranborne, Viscount

      Howell, Ralph (North Norfolk)

      Normanton, Tom

      Crouch, David

      Hunt, John (Ravensbourne)

      Onslow, Cranley

      Dean, Paul (North Somerset)

      Jopling, Rt Hon Michael

      Page, Rt Hon Sir R. Graham

      Page, Richard (SW Hertfordshire)

      Spicer, Jim (West Dorset)

      Walker-Smith, Rt Hon Sir Derek

      Parris, Matthew

      Squire, Robin

      Waller, Gary

      Patten, John (Oxford)

      Stanbrook, Ivor

      Ward, John

      Pawsey, James

      Stanley, John

      Warren, Kenneth

      Raison, Timothy

      Stevens, Martin

      Watson, John

      Renton, Tim

      Stewart, John (East Renfrewshire)

      Wells, Bowen (Hert'rd & Stev'nage)

      Rhys Williams, Sir Brandon

      Stradling Thomas, J.

      Wheeler, John

      Rippon, Rt Hon Geoffrey

      Thomas, Rt Hon Peter (Hendon S)

      Whitney, Raymond

      Rossi, Hugh

      Thorne, Neil (Ilford South)

      Winterton, Nicholas

      Sainsbury, Hon Timothy

      Townend, John (Bridlington)

      St. John-Stevas, Rt Hon Norman

      Townsend, Cyril D. (Bexleyheath)

      TELLERS FOR THE NOES:

      Shelton, William (Streatham)

      Viggers, Peter

      Mr. John Cope and Mr. David Waddington.

      Speed, Keith

      Wakeham, John

      Speller, Tony

      Question accordingly negatived.
      Amendments made:
      No. 40, in page 8, line 1, after '(3)', insert '(a)'.
      No. 41, in page 8, line 9, at end add—
      '(4A) The Secretary of State may by regulations specify for the purposes of subsection (4)(a) above a number of persons different from three.'.
      No. 42, in page 8, line 12, leave out from 'written' to 'with' in line 14 and insert
      'statement which they are required to prepare under subsection (2) above is a statement consistent'.
      No. 43, in page 8, line 15, at end add—
      '(5A) Where—

      (a) a local authority or development body are required to comply with conditions specified in regulations made by virtue of subsection (3)(b) above; and

      (b) the conditions require them to invite offers to undertake work,

      the written statement which they are required to prepare under subsection (2) above is a statement consistent with conditions corresponding to those specified in the invitation.'.—[Mr. Fox.]

    Clause 8

      ACCOUNTS RELATING TO CONSTRUCTION OR MAINTENANCE WORK
      Mr. Fox: I beg to move amendment No. 44, in page 9, line 1, leave out from 'accounts' to second 'as' in line 2.
      This is a purely drafting amendment, to simplify the Bill.
      Amendment agreed to.
      Mr. Fox: I beg to move amendment No. 45, in page 9, line 17, leave out from 'means' to end of line 22 and insert:
      'means—

      (a) construction and maintenance work for the purpose of the laying out, construction, improvement, maintenance or repair of highways, other than work for the purpose of the construction of highways which is connected with the carrying out of other works of new construction and

      1918

      (b) the gritting of, or clearing of snow from highways.'.

      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to take Government amendment No. 50.
      Mr. Fox: The amendment fulfils the undertaking that we gave in Committee to remove cleansing from the definition of general highways work in clause 8 and thus to reconcile it with the primary definition of construction and maintenance work in clause 17. We have taken the opportunity at the same time to make a purely drafting change to improve the presentation of the definitions by separating what is called winter maintenance—gritting and snow clearance—from construction and maintenance of property.
      Amendment No. 50 is a purely drafting amendment.
      Amendment agreed to.

    Clause 9

      CONTENTS OF ACCOUNTS RELATING TO CONSTRUCTION OR MAINTENANCE WORK
      Amendments made:
      No. 46, in page 9, line 37, leave out subsection (1).
      No. 47, in page 10, line 9, leave out from 'the' to end of line 10 and insert
      ' appropriate amount.
      (2A) Where they have prepared a written statement in accordance with section 7(2)(a) above, the appropriate amount is the amount specified in that statement.
      (2B) Where they have prepared a written statement in accordance with section 7(2)(b) above, the appropriate amount is an amount calculated in accordance with the method in the statement.'.
      No. 48, in page 10, line 11, leave out subsection (3) and insert
      '(3) Where the statement allowed for a variation in the appropriate amount in the

      1919
      event of changed circumstances, then if the circumstances arise (but not otherwise) the local authority or development body may credit the account with such sum as the statement allowed for in those circumstances.'.—[Mr. Fox.]

    Clause 10

      ACCOUNTS UNDER SECTION 8 AND OTHER LOCAL AUTHORITY
      Amendments made:
      No. 49, in page 10, line 37, leave out 'and 9' and insert
      ', 9 and [Annual balance sheet etc].'.
      No. 50, in page 10, line 43, leave out 'prescribed accounts' and insert
      'accounts required by directions under section 8(1)(ii) above '.—[Mr. Fox.]

    Clause 11

      PAYMENT FOR CONSTRUCTION OR MAINTENANCE WORK UNDERTAKEN IN PURSUANCE OF DELEGATED FUNCTIONS ETC.
      Mr. Fox: I beg to move amendment No. 51, in page 11, line 15, leave out 'the cost of'.
      This amendment is consequential on amendment No. 34. It removes any possibility of confusion on the reimbursement that a direct labour organisation will receive for work carried out. The direct labour organisations will not receive the cost of work that they undertake. Like contractors, they will be paid on the basis of terms agreed before the work was started.
      Amendment agreed to.

    Clause 13

      RATES OF RETURN: POWERS OF SECRETARY OF STATE
      Mr. King: I beg to move amendment No. 52, in page 12, line 42, leave out from 'if' to end of line 9 on page 13 and insert
      'by virtue of subsection (1) above a local authority or development body come under a duty to give a notification to the Secretary of State in respect of the same description of construction or maintenance work in each of three consecutive financial years, they shall prepare a report in respect of that description of work.'
      Mr. Deputy Speaker: With this we may take Government amendment No. 56.
      Mr. King: In response to representations from the Opposition, in Committee we promised to clarify the drafting of what was then clause 14(2) and which is now clause 13(2). This amendment is an attempt to clarify that, and I hope the House will feel that it succeeds in its purpose.
      Amendment agreed to.
      Mr. Oakes: I beg to move amendment No. 53, in page 13, line 15, leave out 'if he thinks fit' and insert
      'where a local authority has failed to conform with the appropriate statutory provisions'.
      Mr. Deputy Speaker: With this, we may take the following amendments:
      No. 54, in page 13, line 20, leave out 'three' and insert 'five'.
      No. 55, in page 13, leave out lines 33 to 38 and insert
      ' he may direct that the local authority or development body shall conduct a comprehensive review of the Direct Labour Organisation and publish the report of such review'.
      Mr. Oakes: These amendments cover an important point of principle on local authority freedom. The Secretary of State and Ministers have prided themselves on the fact that the Bill is designed to reduce central Government power over local government and to let local government get on with its job. Yet under this clause the Secretary of State is taking unprecedented powers, in that when he has received a report—or if it is not sent to him in the time specified—he has the power to close down a direct works department. That is a power that all three local authority associations bitterly resent and object to.
      What is proposed in this clause is monstrous. By these amendments the Opposition are saying that when the Secretary of State has received that special report he may direct the local authority or development body to conduct a comprehensive review of the direct labour organisation and publish the report of the review. The Secretary of State seeks the power to close that direct labour department forthwith. The House should not give that power to the Secretary of State. I said previously that the niggling way in which Ministers had dealt with the moderate points that we raised was an indication of their malevolence towards direct labour departments. Given that malevolent attitude by the Government—and particularly by the Secretary of State—there is no

      1921
      knowing how many departments he will seek to close under the powers in this clause.
      Hon. Members who cherish local government and who may have become Members of Parliament via local government will heed the pleas of all three associations and not give such unprecedented power to a Secretary of State.
      10.45 pm
      Mr. Crowther: It is unfortunate that we should have reached one of the most important clauses in the Bill at such a late hour. We have had a long and interesting debate on the operation of direct labour departments but, as my right hon. Friend the Member for Widnes (Mr. Oakes) pointed out, we are now talking about their very existence and whether they will be allowed to continue in being.
      Whenever local government matters are discussed in this Chamber a great depth of ignorance is shown on the Government Front Bench. A wealth of inexperience permeates every ministerial utterance. I am not blaming Ministers for their inexperience, but I wish that they would pay attention to what is said by those with experience of this subject, especially people outside in the local authority associations who have been treated in a most cavalier fashion throughout the discussions on the Bill.
      The clause that we are seeking to amend demonstrates as well as anything in the Bill that the Secretary of State has no sympathy for local government. He has no understanding and little knowledge of it. This is the problem that we and people in local government are up against. The right hon. Gentleman does not appreciate what an ancient, democratic institution local government is. It matters in this country. I hate to see it being emasculated by the Government. Local government has fallen into the hands of its most implacable enemy.
      The Secretary of State does not understand the concept of local democracy. I am sorry that he has paid so little attention to our debates today. He has made a few fleeting visits to the Government Front Bench, but he has spent very little time defending these outrageous proposals in the Bill.[Interruption.] I
      1922
      have been here virtually throughout the whole of the debate. The fact that I have remained silent does not mean that I have not been here, although hon. Members may find it odd that I should be here and remain silent.
      Before I was interrupted, I was saying that the Secretary of State did not understand the concept of local democracy. Like tyrants throughout the centuries, he is now out to destroy what he does not understand. Not only does he not know how it works; he does not even care that he does not know.
      I am not pretending, and none of my right hon. and hon. Friends has tried to pretend, that all direct labour organisations are perfect. We do not suggest that they never make mistakes and are never guilty of poor workmanship or bad management. Many of us have been in local government too long to make such a foolish assertion. However, any member of the public who has a complaint against a local authority department can at least take it up with an elected councillor who can investigate and, if necessary, raise his complaint in the council chamber. That kind of accountability does not apply to firms in the private sector.
      This argument is not about efficiency. We are facing a demand by the Secretary of State to have the power to order a democratically elected local authority to close a department—that is what the clause means in practice—irrespective of whether is is efficient or not and irrespective of whether the authority and the people who elected it are satisfied with that department.
      I do not understand why the Government have taken this power. Underlying the clause is the Government's inbuilt dislike of the public sector in all its forms. The clause is based on the notion that direct labour is intrinsically bad and should be tolerated only within certain severe restraints and restrictions. The Government believe that local authorities should be constantly exposed to the threat of arbitrary abolition by the Secretary of State. I repudiate that notion.
      The national interest does not require such power to be vested in the Secretary of State. The clause is part of the Government's relentless drive towards centralised State control over many of the

      1923
      most important activities of local government. I am nauseated by the hypocrisy of a party that continually proclaims its belief in freedom. That party constantly tells us that it wishes to reduce the power of the State. It is supposed to abhor Government interference. It is now assiduously dismantling the rights of elected local authorities and establishing the omnipotence of the Secretary of State. How can Conservative Members match that with their proclaimed belief in freedom? I would welcome some answers.
      If the Bill is enacted, the voice of the people will no longer be the voice of God. The voice of the Secretary of State will be the voice of God. The question is not whether direct labour departments are good, bad, inefficient or efficient. The question is whether the Secretary of State should have an unfettered and untrammelled power to impose his will on elected local authorities which are much closer to the people whom they represent. Local authority representatives understand the problems of their areas and the needs of their electorates better than a Secretary of State could. The clause therefore cries out to be amended.
      Even at this late stage, the Government can save something of the tattered reputation that they have among local authority people of all parties. They can reconsider this outrageous proposal with a view to modifying the proposed dictatorial powers when the Bill is considered in the other place.
      I would warmly welcome even a hint of an assurance that the Government will reconsider the advisability of establishing a dictator in Britain.
      Mr. Nicholas Winterton: I shall be brief, but I have been prompted to rise by some of the outrageous remarks made by the hon. Member for Rotherham (Mr. Crowther). He is being unfair to the House and to those who read Hansard, because he has indicated that the Labour Party has a monopoly on knowledge of local government. That is not so. The hon. Gentleman may not know that I had the honour of serving on a local authority for about six years. That is a very small period in comparison with the hon. Gentleman and, no doubt, some Conservative Members. However, during that time I gained a great deal of knowledge about how local authorities work.
      1924
      I understand some of the points that the hon. Gentleman made concerning the importance of maintaining independence from the Government. The hon. Gentleman advocated his cause with flowery and emotional language. I remind him that the central Government fund more than 60 per cent. of local authority expenditure. Inevitably, the Government have some power over the way in which local authorities operate.
      I am sure that the Opposition spokesman would admit that there has been an abuse of power in local government. I could recite several cases. The majority of them would probably involve Labour-controlled authorities. For many years, they have abused their powers, not least in the operation of direct labour organisations.
      I remind hon. Members that many private contracting companies pay rates. Therefore, is it not unfair that they might lose business to a direct labour organisation to which they are indirectly contributing through the rates? This is important. If there is an abuse, the Secretary of State and Ministers could obviously assess it, and therefore it is right that there should be a power of intervention by the Government over the operation of the department.
      Mr. Crowther: I am happy to attempt to answer that point. Direct labour departments themselves also pay rates. There is no distinction in that respect between public and private contractors. If there is an abuse in the sense that there is maladministration, it is a matter for the local government ombudsman. Assuming that things are properly operated and in order, there is no validity in what the hon. Member says—in fact, far from it. On the other side of the coin, the hon. Member and his hon. Friends should be urging that direct labour organisations should be allowed to compete freely in the open market.
      Mr. Winterten: It is not unknown for a local authority that gets into trouble to threaten to increase the rates. That is the case with Manchester, which has threatened a 70 per cent. increase in the rates to recover its position. But who will pay the increased rates? It will be the ratepayers, including the private sector, who will suffer at the hands of the local authority because it has mismanaged its

      1925
      affairs. I do not say that all such authorities are Socialist-controlled, but that is certainly the case with Manchester. Its mismanagement and total neglect of the Government's requests to contain its expenditure has placed business and domestic ratepayers in a precarious and unfortunate position. The local authority can always recover the position by increasing the rate poundage next year. The private contracting company, the building company and the operators of public service contracts are not in the same position. Also, bearing in mind the high interest rates, they are not in a position to borrow.
      Mr. Joseph Dean: May I press the hon. Member further on the question of whether the Secretary of State or the Minister should have powers of intervention? My mind goes back to the first Labour Government of my right hon. Friend the Member for Huyton (Sir H. Wilson) when the Conservatives took control of Manchester council and tried to dismantle the direct labour department. The DLO put in a serial tender for a primary school contract which was 2½ per cent. lower than the nearest private sector tender. The Conservative-controlled council decided not to give the contract to the DLO. The Manchester Labour councillors then lobbied the Government, but they refused to intervene in the matter, saying that it was for the local authority to decide. Why are this Government acting differently?
      Mr. Winterton: The hon. Member has greater knowledge of the case than I have. He makes a good point. I hope that my hon. Friend the Minister will answer the point in due course. I share the hon. Member's concern that a local authority must have some integrity and must retain an element of independence. However, it can never be totally independent, and to suggest that it can is to live in cloud-cuckoo-land. The hon. Member, who represents a Leeds constituency, knows Manchester extremely well as he served and lived there for many years. I must point out, however, that the local authority and Government Departments are under no obligation to accept the lowest or, indeed, any tender for any job. I have opened tenders, and I am well aware of the basis on
      1926
      which they are accepted. There might have been other reasons. I shall not speculate on what they might have been. The hon. Gentleman blames the dogma of a Conservative-controlled local authority. The Conservatives have not controlled Manchester for a long period. Its problems reflect many years of Socialist neglect and incompetence.
      I look forward to my hon. Friend's explanation. The Government have good cause not to accept the amendments.
      11 pm
      Mr. Stephen Ross: The House is at its worst when talking of direct labour. The arguments are stale, and the solution is simple.
      If the situation was reversed, the hon. Member for Macclesfield (Mr. Winterton), would consider the wording outrageous. A Conservative Opposition would have made great play with the words "if he thinks fit". The situation is similar to that in 1945 when a Labour Attorney-General stated "We are the masters now". Those words should not be applied to legislation and are an insult to local government. The amendment is much more sensible and nearer the mark. I am surprised that the hon. Gentleman does not support it. I shall remind him of this in future. We are asking only to substitute the words:
      "where a local authority has failed to conform with the appropriate statutory provisions."
      That principle is clearly set out in previous clauses.
      The Minister has been courteous in his replies in Committee and in this debate. In Committee I raised the problem of a local authority, such as my own in the Isle of Wight, where it would be difficult to seek tenders from three persons. The Isle of Wight county council built up a direct labour organisation because for a long time we had only one substantial firm that could do maintenance work. It was a monopoly and often held the local authority over a barrel. There are now one or two other firms in the field. That point was accented in Committee. I hope that the Minister will indicate that it will not be a hard and fast rule. The Scilly Isles goes its own way and has only just done away with aldermen, but there could well be difficulties there.
      A local authority should not be hauled over the coals and forced to make a

      1927
      report because it has not carried out the terms of the clauses. It is preferable to put the position right before the Bill is enacted. I should be grateful to hear from the Minister that there is a way round that.
      Mr. Litherland: I agree with my hon. Friend the Member for Rotherham (Mr. Crowther) that this is an extremely important part of the Bill. It emphasises the draconian powers that the Secretary of State will have over local authorities in his discretion to shut down direct labour organisations.
      The four areas of accountancy—general highways, new construction of more than £50,000, new construction of less than £50,000 and maintenance—will be separate accounts, kept distinct from other accounts. Those accounts are not merely for the interest of the public. They will be trading accounts, and the object of trading accounts is to show a profit or loss, which is described in the Bill as a positive rate of return. The rate of return on capital and the method of calculation are once again the responsibility of the Secretary of State. We have repeatedly said that direct labour organisations were not introduced merely to show a profit. The service element is paramount in any direct labour organisation. The consultative paper referred to a 5 per cent. return on capital. That figure, or the figure prescribed by the Secretary of State, will, it is claimed, enable local authorities to decide whether their direct labour organisations are profitable or whether they should be disbanded, with the money put to better purposes.
      Why is that principle not applied to every other local authority department, with a profit having to be shown in education, social services or housing? If local authorities existed merely to show a profit, most services would be dismantled and capital would be invested in speculative dealings.
      The service, whether a direct labour organisation or any other department of a local authority, should be based on need. Local councillors, elected by the ratepayers, should assess those needs. If, as elected members, they wish to set up a direct labour organisation, that is their prerogative. Even if they wished to disband an organisation, it should be their
      1928
      decision and not the decision of the Secretary of State.
      This part of the Bill will be forcing one department to make a profit out of others in the same authority. In future, departments will not be paying cost, as they are at present. Should a DLO refuse to carry out work for another department if it is not profitable?
      The Government claim that the Bill will create public accountability, but, as one member of the Institute of Municipal Building Management commented,
      "this is virtually akin to requiring that all DLO tender prices be published in the National Builder."
      He made that comment because DLOs will not be able to shift finance to other headings. It will be judged under each of four separate categories and it will, therefore, reveal the make-up of DLOs' tender prices. Direct labour organisations will be under continual scrutiny, and the only people to derive any benefit will be the private contractors and not the ratepayers.
      The Minister has referred to a code of practice approach, which, we were told in Committee, would include not only the CIPFA recommendations but consultation with the Institute of Chartered Accountants and, as the Government moved on, other bodies. Perhaps the Minister will tell us whether he has asked the Institute of Municipal Building Management for its observations, because, like the local authority associations, the institute has grave reservations about this aspect of the Bill. A code of practice imposed without in-depth consultation with the organisations immediately concerned will be of overriding concern to them. A practice must be acceptable and not put DLOs at a direct disadvantage.
      If the code of practice is not in the best interests of DLOs and if the Secretary of State maintains the fall-back power, the elected local authority members must fully understand the implications of that. Should the return on capital employed not be achieved over a period of three years, the Secretary of State will have the power to close a division or the whole of a department's operations.
      The whole tenor of the Government's proposals points to a bias against DLOs,

      1929
      and the Government's rhetoric about giving local authorities more freedom and autonomy contradicts their actions in taking away the democratic tradition of local authorities in which the elected representatives take the decisions.
      This is once again an undesirable shift from local government responsibility to central Government control—a shift which is unnecessary and undesirable and must be resisted. The closing of a DLO would clearly be relished by the private sector. The intention is to eradicate DLOs as building and minor works departments and to leave a clear field where public building and lucrative maintenance can be shared out and where monopolies and cartels can prosper.
      Without a DLO putting in a responsible estimate for work, which in turn forces the private contractor to put in a realistic price—if DLOs are taken out of the tendering procedure—the ratepayers are at the mercy of price fixing.
      The Bill, with all its restrictions, is creating an atmosphere in which DLOs cannot compete. The ultimate power of the Secretary of State to close down is adding insult to injury. The director of works in Manchester has already stated that staff required for administration will have to be increased, which would have repercussions on staffing resources. Another difficulty, presented by new legislation, will be the varying work loads of a department. The director predicts that the more variations there are in the work load, the more will work have to be sublet. This factor, together with the hardening of the financial position in general, will mean a reduction in the work force. Management will find itself in a difficult position to ensure continuity of work for all its personnel and yet remain competitive.
      DLOs need to be given preferential treatment to keep a rolling programme of work either in the capital or the minor works division. They will not be able to show a profit under the stringent restrictions in the Bill of having to tender for all major contracts and for a percentage of minor and maintenance works. The Bill is a constraining measure with the objective of moving public sector work more into the private sector. If this can be achieved at the expense of DLOs,
      1930
      the aims of the Government will be achieved.
      Mr. King rose—
      Hon. Members: Hear, Hear.
      Mr. King: I am very moved by the reception accorded me. I do not think that it is entirely in anticipation of the content of my speech.
      Amendment No. 53, moved by the right hon. Member for Widnes (Mr. Oakes), seeks to remove the discretionary power of the Secretary of State. The hon. Member for Isle of Wight (Mr. Ross) was also concerned by the words "if he thinks fit". In many places in legislation there is the discretionary power contained in the words
      "if, in the opinion of the Secretary of State"
      But it is not an unfettered power. There is protection, at all times, in the courts. If the Secretary of State cannot show good reason why he exercised his power, it is challengeable in the courts. If it is found that the Secretary of State has exercised his discretion without good cause, the courts can order such action to be quashed. It is important to recognise that this is far from the sort of dictatorial, absolute power that might be suggested.
      If hon. Members want illustrations to show why this discretionary power is necessary and why there cannot merely be an absolute criterion of the statutory provisions in the Bill, I refer to the point raised by my hon. Friend the Member for Chorley (Mr. Dover). My hon. Friend asked whether it was mandatory for a council to accept the lowest tender. It is not. It is possible for a council to accept a higher tender, perhaps from its own direct labour organisation. It would be palpable nonsense to insist on every occasion that the lowest tender, from wherever it came, had to be accepted. That could lead to abuse. Although a council was observing its obligation to go out to tender it could ignore the lowest tender and continue to place every order with its own direct labour organisation at a higher figure. For those reasons, there is need for an extra discretionary power.
      There is a requirement in the Bill that after three years of failing to make an adequate return or of making a loss, a special report should be called for and action should be taken by the Secretary of State. The situation might become so

      1931
      serious well before that time that the Secretary of State would have to intervene and ask for a special report.
      11.15 pm
      I hope that I have explained that, although the wording might look as though there is an absolute power for the Secretary of State, the laws are interpreted by the courts. The Secretary of State is obliged to act within his responsibilities and would need to show good cause if he exercised his power, and would be subject to the determination of the courts in the final analysis.
      The second amendment seeks to change the period of three years to five years. If after three years there is a failure to perform it is sensible for a report to be made. There is nothing to stop a local authority, if there is a particular reason, submitting a further return to show the true picture.
      The third amendment suggests that if the local authorities have submitted their reports the Secretary of State should have the power to ask for further reports. We did not think that that would meet the problem. We prefer to maintain the position that if it is proved that a DLO is becoming a substantial charge on the ratepayer and that it is consistently failing to perform efficiently there should be a power within a sector or within the totality of operations to require the DLO to cease operating. That is the ultimate sanction. I hope that it will never be used.
      We are not making an attack on direct labour organisations, but we are attacking inefficient direct labour organisations, which we are determined to root out. The nature of their structure within local authorities can lead to inefficiency. I should have thought that all hon. Members would support proper accounting procedures. They are required in the private sector. If that sector does not have proper accounting procedures it goes bust quickly.
      There is nothing in the Bill that an efficient direct labour organisation has any reason to fear. In some ways, the opposition of Labour Members does a disservice to many DLOs that are efficient and have done much good work. To argue that they cannot face proper accounting procedures does a disservice to them and acts as a camouflage to inefficient DLOs. I hope that my hon. Friends
      1932
      will insist on resisting the amendments, because the powers in the Bill are the minimum necessary to achieve our objective.
      Mr. Oakes: I have listened with care to the Minister. None of my hon. Friends has suggested that an inefficient and badly run direct labour organisation should be allowed to continue in that way. We are anxious about unfettered power being given to any Secretary of State. The Minister said that the words "if he thinks fit" do not bypass the courts. Therefore, if a Secretary of State—I used the word "malevolent" some time ago—were to close down building and direct works departments malevolently, as it were, on an issue of party principle because he believed in the private sector and intended to close as many DLOs as he could, and he was stopped from doing that by the courts, that would mean that he did not have unfettered power. That is what the Minister is saying.
      Mr. Crowther: This is an interesting point. Does my right hon. Friend agree —since he is a practitioner of the law and I am not—that, at the point where the court considers whether the Secretary of State has acted properly and reasonably in the exercise of his discretion, the court would merely have to establish, in finding that the Secretary of State had acted reasonably, that he had genuinely thought fit to act in that way? That is all that he is required to do.
      Only in the event of the Secretary or State acting in a non-genuine way would the courts find that he had acted wrongly. If he could show the court that he genuinely thought it fit that he should take certain action, he would surely be covered. Is that not the case?
      Mr. Oakes: I do not blame my hon. Friend for thinking that. It is perfectly reasonable for any layman to think that if the words "as he thinks fit" are included in a Bill the courts have no power over the Secretary of State because he would say that he had thought fit.
      I can tell my hon. Friend that, as a Minister, I went from the Department of Energy to being Minister of State at the Department of Education and Science at a peculiar time a few years ago. On an education issue to do with Manchester, the courts, in words not dissimilar to these, held that a Secretary of State was

      1933
      accountable. That is something that might blow back on the Government.
      I return to my point that there is a fetter and that the Secretary of State, if challenged in court by an authority—as no doubt he would be if the authority felt strongly about an issue—would have to give his reasons and it would be for the court to accept those reasons.
      Mr. King indicated assent.
      Mr. Oakes: By nodding his head, the Minister of State indicates that that is the position. In those circumstances, although we feel strongly about giving powers to the Secretary of State, and since there is a fetter enforceable by the courts of the land, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendment made: No. 56, in page 14, line 1, after 'not', insert
      'notify the Secretary of State under subsection (1) above or'.—[Mr. King.]

    Clause 16

      INTERPRETATION OF PART III
      Mr. King: I beg to move amendment No. 57, in page 16, line 6, leave out 'below' and insert 'below— (a)'.
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this it will be convenient to take Government amendments Nos. 58 and 59.
      Mr. King: These are purely drafting amendments to separate the winter maintenance activity—gritting and snow clearing—from construction and maintenance proper and to make clear that the maintenance of playing fields is not to be considered as construction work for the purposes of the Bill.
      Amendment agreed to.
      Amendments made: No. 58, in page 16, line 10, leave out 'or in the gritting' and insert 'and (b) the gritting of'.
      No. 59, in page 17, line 3, after 'gardens' insert 'playing fields,'.—[Mr.King.]

    Clause 19

      AMENDMENTS RELATING TO ALLOWANCES TO MEMBERS OF LOCAL AUTHORITIES AND OTHER BODIES.
      Mr. King: I beg to move amendment No. 63. in page 18, line 27, leave out 'subsection' and insert 'subsections'.
      Mr. Deputy Speaker: With this it is convenient to take Government amendments Nos. 64 and 65.
      Mr. King: These are technical amendments to clarify points on the payment of allowances to councillors. This has to do with the pay and allowances for joint committees and boards. It provides for the payment of allowances to their members for attending conferences and meetings. It is possible for councils to make payment, but at the moment joint committees are not covered. This has the support of the local authority associations and, I believe, the support of the House.
      Amendment agreed to.
      Amendments made: No. 64, in page 18, line 35, at end add—
      '(3B) In relation to any such body as is mentioned in section 177(1)(d) or (e) below this section applies to a conference or meeting held and convened as mentioned in subsection (3) above for the purpose of discussing matters which in the body's opinion relate

      (a) to the functions of the body; or

      (b) to any functions of local authorities in which the body has an interest'.

      No. 65, in page 18, line 39, at end add—
      '(5) The following subsection shall be inserted after section 47(3) of the said Act of 1973:
      "(3A) In relation to any such body as is mentioned in section 49(1)(c) or (d) below this section applies to a conference or meeting held and convened as mentioned in subsection (3) above for the purpose of discussing matters which in the body's opinion relate

      (a) to the functions of the body; or

      (b) to any functions of local authorities in which the body has an interest.".'.—[Mr. Fox.]

    Clause 20

      INTRODUCTION OF SPECIAL RESPONSIBILITY ALLOWANCES FOR MEMBERS OF LOCAL AUTHORITIES.
      Mr. King: I beg to move amendment No. 66, in page 19, line 9, at end add—
      '(1A) Subject to regulations under subsection (2) below, the Greater London Council may

      1935
      pay any member of the Inner London Education Authority an allowance in addition to any allowance under sections 173, 174 or 175 above, if they are satisfied that he has special responsibilities in relation to the discharge of the functions of the Authority.'.
      Mr. Deputy Speaker: With this it will be convenient to discuss Government amendments Nos. 66A and 67.
      Mr. King: Amendment No. 66 is to put all members of the Inner London Education Authority on the same footing with respect to special responsibility allowances, because in the previous drafting they were excluded.
      Amendments Nos. 66A and 67 deal with the two points to which we undertook in Committee to respond—not to specify the maximum number and now to work matters on the basis of a total amount which will be payable to the committee. There will be a ceiling for the amount that any one person can get, but it will not determine the number of people to whom such allowances may be paid.
      Amendment agreed to.
      Amendments made: No. 66A, in page 19, line 14, leave out from 'the' to end of line 16 and insert—
      'total amount which a principal council may pay under this section in a financial year;
      No. 67, in page 20, line 1, leave out from 'the' to end of line 3 and insert—
      ' total amount which a local authority may pay under this section in a financial year.'.—[Mr. Brooke.]

    Clause 22

      ASCERTAINMENT OF RATEABLE VALUE OF NON-INDUSTRIAL BUILDINGS
      Mr. Fox: I beg to move amendment No. 68, in page 21, line 25, leave out subsection (6).
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 75 to 77.
      Mr. Fox: Amendment No. 68 is one of a number of drafting amendments that reorganise the commencement provisions for part V in a single place—namely, clause 36.
      Amendment No. 75 is a minor one consequential upon accepting a new
      1936
      clause in Committee. It provides for the commencement in a new rate period of clause 28, which relates to recovery of rates from owners.
      Amendment No. 76 is another of a series of drafting amendments that bring all the commencement provisions for rating clauses into clause 36.
      Amendment No. 77 is a technical amendment to complete the process of bringing together in the same clause—clause 36—all the commencement provisions for part V.
      Amendment agreed to.

    Clause 23

      VALUATION AND ADJUSTED VALUATION
      Mr. Fox: I beg to move amendment No. 69, in page 23, line 8, at end add—
      '(2A) Before prescribing a method, the Secretary of State shall consult—

      (a) such associations of local authorities, as appear to him to be concerned; and

      (b) any local authority, and any other body of persons, with whom consultation appears to him to be desirable.'.

      This amendment meets a request made of us in Committee. Clause 23 would enable a general rating revaluation for one sector of ratepayers only.
      Amendment agreed to.

    Clause 24

      DOMESTIC RATE RELIEF
      Mr. Fox: I beg to move amendment No. 70, in page 24, line 7, leave out from second 'the' to end of line 10 and insert 'standard amount'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 71 to 74.
      Mr. Fox: These amendments are consequences of amendment No. 443, which incorporated paragraph 5 of schedule 2 to the Local Government Act 1974, appropriately reworded, into schedule 8 to the Bill.
      Amendment agreed to.
      Amendments made: No. 71, in page 24, line 14, leave out 'amount so prescribed' and insert 'standard amount'.
      No. 72, in page 24, line 18, leave out 'amount so prescribed' and insert 'standard amount'.
      No. 73, in page 24, line 20, leave out 'amount so prescribed' and insert 'standard amount'.
      No. 74, in page 24, line 20, at end add—
      '(1B) In subsection (1) of this section "the standard amount" means—

      (a) the amount prescribed for the year for the rating authority's area under paragraph 5 of Schedule 2 to the Local Government Act 1974; or

      (b) the amount specified for that year for their area in a Rate Support Grant Report under section 48 of the Local Government, Planning and Land Act 1980.'.—[Mr. Brooke.]

    Clause 36

      COMMENCEMENT AND EXTENT
      Amendments made: No. 75, in page 31, line 18, leave out and 25' and insert '25 and 28'.
      No. 76, in page 31, line 19, leave out from 'repeals' to end of line 20 and insert—
      'contained in Part II of Schedule 27 to this Act—

      (i) of provisions of the General Rate Act 1967, other than the repeals in sections 19, 20 and 30 and Schedule 2;

      ii) of paragraph 28(3) of Schedule 2 to the Decimal Currency Act 1969;

      (iii) of section 26 of the Greater London Council (General Powers) Act 1973; and

      (iv) of words in paragraph 4 of Schedule 7 to the Local Government Act 1974.'.

      No. 77, in page 31, line 24, at end add—
      1938
      '(1A) Sections 29, 30 and 31 above shall come into operation at the expiration of the period of one month beginning with the day on which this Act is passed.
      (1B) The following provisions of this Act, namely—

      (a) section 22(1) to (3) above;

      (b) paragraph 5A of Schedule 26 to this Act; and

      (c) the repeals contained in Part II of Schedule 27 to this Act of words in sections 19 and 30 of the 1967 Act,

      shall not have effect for any rate period, within the meaning of the 1967 Act, beginning before the first date after the passing of this Act on which new valuation lists come into force under section 68(1) of that Act.
      (1C) Subject to the foregoing provisions of this section, this Part of this Act and the repeals contained in Part II of Schedule 27 to this Act shall come into force on the day on which this Act is passed.'.—[Mr. Brooke.]
      Further consideration of the Bill adjourned.—[Mr. Brooke.]
      Bill to be further considered tomorrow.

      WELSH GRAND COMMITTEE
      Ordered,
      That during the proceedings on the matter of the Welsh language, the Welsh Grand Committee have leave to sit twice on the first day on which they shall meet; and that notwithstanding the provisions of Standing Order No. 64 (Meetings of Standing Committees), the second such sitting shall not commence before Four o'clock nor continue after the Committee have considered the matter for two hours at that sitting.—[Mr. Brooke.]

      ADJOURNMENT
      Resolved, That this House do now adjourn.—[Mr. Brooke.]
      Adjourned accordingly at Twenty-nine minutes past Eleven o'clock.

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  British Steel Corporation
  Merseyside
  Merseyside
SOCIAL SERVICES
  New Commonwealth Ethnic Origin Population
  New Commonwealth Ethnic Origin Population
  Geriatric Care
  Geriatric Care
  Family Incomes
  Family Incomes
  Hearing Aids
  Hearing Aids
  Miss Stella Maltson
  Miss Stella Maltson
  Hospital Waiting Lists (Islington)
  Hospital Waiting Lists (Islington)
  Drugs (Monitoring Scheme)
  Drugs (Monitoring Scheme)
  Liverpool Area Health Authority
  Liverpool Area Health Authority
  Liverpool Hospitals
  Liverpool Hospitals
  Mr. L. Bowden Brown
  Mr. L. Bowden Brown
  Unemployment Review Officers
  Unemployment Review Officers
  Cigarettes (Carbon Monoxide Level)
  Cigarettes (Carbon Monoxide Level)
  Benefit Entitlement
  Benefit Entitlement
  Voluntary Organisations (Financial Assistance)
  Voluntary Organisations (Financial Assistance)
  Henderson Hospital
  Henderson Hospital
AGRICULTURE, FISHERIES AND FOOD
  Fisheries
  Fisheries
  Milk
  Milk
  Citizens Band Radio
  Citizens Band Radio
  Farm Census
  Farm Census
DEFENCE
  Low-flying Aircraft
  Low-flying Aircraft
  Nuclear Weapons
  Nuclear Weapons
  Defence Budget
  Defence Budget
  Military Personnel (Boarding School Allowances)
  Military Personnel (Boarding School Allowances)
FOREIGN AND COMMONWEALTH AFFAIRS
  Zambia
  Zambia
  Spain-Gibraltar Border
  Spain-Gibraltar Border
  Overseas Students
  Overseas Students
  British Council
  British Council
  Soviet Union (British Tourists)
  Soviet Union (British Tourists)
  Diplomats (Boarding School Allowances)
  Diplomats (Boarding School Allowances)
  Identity Documents
  Identity Documents
EUROPEAN COMMUNITY
  Council of Foreign Ministers
  Council of Foreign Ministers
  European Council
  European Council
NORTHERN IRELAND
  Civil Service (Ex-Service Personnel)
  Civil Service (Ex-Service Personnel)
  Grammar School Places
  Grammar School Places
  Western Education Board
  Western Education Board
  Grant-aided Bodies (Premises)
  Grant-aided Bodies (Premises)
  Sports Council
  Sports Council
  Gas Industry
  Gas Industry
  Royal Prerogative of Mercy
  Royal Prerogative of Mercy
  Civil Servants
  Civil Servants
  Constitutional Settlement
  Constitutional Settlement
  Consolidated Fund
  Consolidated Fund
  Ulster Office, London
  Ulster Office, London
ENVIRONMENT
  Walsall Council (Housing and Land Grants)
  Walsall Council (Housing and Land Grants)
  Council House Sales
  Council House Sales
  Rate Support Grant
  Rate Support Grant
  Alkali and Clean Air Inspectorate
  Alkali and Clean Air Inspectorate
  Protection of Birds Act
  Protection of Birds Act
  Housing Market
  Housing Market
  Titanium Dioxide
  Titanium Dioxide
  Rates
  Rates
TRANSPORT
  Wells, Cundall of Malton (Correspondence)
  Wells, Cundall of Malton (Correspondence)
  Greater Manchester
  Greater Manchester
  Caravans (Licence Fees)
  Caravans (Licence Fees)
  Nuclear Fuel (Transportation)
  Nuclear Fuel (Transportation)
  A12 (Safety Standards)
  A12 (Safety Standards)
  Litter
  Litter
EDUCATION AND SCIENCE
  Inner London Education Authority
  Inner London Education Authority
  Assisted Places Scheme
  Assisted Places Scheme
  Advisory Committee on Pesticides
  Advisory Committee on Pesticides
  Local Education Authorities (Expenditure)
  Local Education Authorities (Expenditure)
  University Teachers (Pay and Conditions of Service)
  University Teachers (Pay and Conditions of Service)
  Education (Administrative Costs)
  Education (Administrative Costs)
  Overseas Students
  Overseas Students
  Education, Training and Industrial Performance
  Education, Training and Industrial Performance
  Inner London Education Authority
  Inner London Education Authority
  National Association for Multiracial Education
  National Association for Multiracial Education
  Student Teachers
  Student Teachers
  Teachers and Pupils (Ethnic Minorities)
  Teachers and Pupils (Ethnic Minorities)
  Local Authority Funding
  Local Authority Funding
  Institute of Animal Physiology
  Institute of Animal Physiology

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Norwich):
The LORD CHANCELLOR The LORD CHANCELLOR On the Woolsack.

GATWICK: ROAD CONSTRUCTION PLANS
Lord GISBOROUGH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what plans they are making for the long-term to improve the feeder road from London to meet the ever-expanding demand by travellers to Gatwick.
Lord MOWBRAY and STOURTON: My Lords, my right honourable friend the Minister of Transport is giving top priority to the completion of the M.25 London orbital road, which provides a direct connection with the M.23 to Gatwick. This will facilitate access between Gatwick and a number of routes into London. My right honourable friend has decided that a major new highway extension of the M.23 is not the right answer to the problems of the A.23 corridor. Instead, he will be considering with the local authorities concerned what improvements can be made to the existing A.23 route. The dual carriageway north of Hooley is at present being extended and two schemes for the improvement of the busy junction at Purley Cross are expected to start, one, in 1980–81 and the other in 1981–82.
Lord GISBOROUGH: My Lords, I thank the noble Lord for that Answer. Is he aware that the first national road traffic forecast of the transport department has estimated that there will be an increase of up to 60 per cent. in the number of motor cars by the turn of the century, and that it is also likely that the Common Market rules about heavy lorries will be applied to this country by then? Would
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he take the point that it is utterly necessary for this road to be improved virtually to motorway standard from Central London?
Lord MOWBRAY and STOURTON: My Lords, I am not quite sure of the connection between heavy lorries and Gatwick, which is not primarily a cargo airport. Your Lordships may be interested to know for Lord Moyne's family book of records that Gatwick holds the world record for the number of air passengers approaching and departing from it by train. I do not think my noble friend has taken the point that the M.25 is going to be an enormous circular road and that very little of the main traffic going north goes straight into Central London. Most of it spans out and goes in from the outer edges.
Lord GISBOROUGH: My Lords, is the noble Lord aware that the reason that this happens is that they cannot stand the two-hour grind through all the traffic coming into London?
Lord MOWBRAY and STOURTON: My Lords, I have already said that very nearly half the airport travellers use the train service. When the British Rail improvements are completed the number will be even closer to half. The orbital system will make an enormous difference because the traffic will use that. We have investigated this on many censuses and it is a fact.
Lord DAVIES of LEEK: My Lords, is the noble Lord aware that some of us who have been around a long time believe that this voracious demand for roadways—roadways which are eating up our hedgerows and consuming farmers' fields—is driving three-quarters of the country neurotic? Does he not think it is time we learned that travel across London was quicker by hansom cab than in today's traffic jams? Will he not do something to bring back some of the railways?
Lord MOWBRAY and STOURTON: My Lords, I think I have answered the noble Lord, Lord Davies of Leek. I have said that the railways are being improved. Gatwick already holds the world record in the number of people using it—and using trains. We are not going into hedgerow country when we get north of Purley Cross.
Lord CHELWOOD: My Lords, does not my noble friend agree that the harder it is to find the road, the more important it is to have signposts, and that there are practically none between London and Gatwick?
Lord MOWBRAY and STOURTON: My Lords, between London and Gatwick there is a very good "sign-posted way". It is by train from Victoria. Most people find it easier and quicker to use that way.
Lord GAINFORD: My Lords, in connection with the train service, will it not be possible to alleviate the road traffic by making, in addition to Victoria, the station at Kensington (Olympia) a terminus for access to Gatwick?
Lord MOWBRAY and STOURTON: My Lords, that is a very interesting point. I have heard that discussed and I have heard tunnels and so on discussed. If the noble Lord would like to put down a Question on it, I will have it looked into.
Lord SEGAL: My Lords, is the noble Lord aware that the train service to Gatwick could be still further improved if the train were allowed to run every quarter-hour after one o'clock in the morning for the benefit of those unfortunate travellers who arrive at Gatwick by air somewhat late?
Lord MOWBRAY and STOURTON: My Lords, I will take the noble Lord's point and see that it gets to the authorities concerned.

"DAY OF ACTION": EFFECT ON ECONOMY
3.7 p.m.
Lord BOYD-CARPENTER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their estimate of the loss to the British economy caused by the "Day of Action" which the TUC sought to organise on 14th May.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, the necessary information on which to base a close estimate of the loss to the whole economy is not available. Limited data on the extent of the "Day of Action" suggest that more than 90 per cent. of the work force went to work on the 14th May and only a very small percentage of the day's normal output would have been lost.
Lord BOYD-CARPENTER: My Lords, while thanking my noble friend for that Answer, may I ask whether it follows that the damage done by this extraordinary action was very much minimised by the refusal of the sensible British public to respond to it?
The Earl of GOWRIE: My Lords, I am altogether in agreement with that view from my noble friend. Indeed, a group of employers in South Wales told me that the normal absenteeism for which they budget on any given day was halved on 14th May.
Lord SHINWELL: My Lords, although the noble Earl is unable to give an accurate reply to the important Question that was asked by the noble Lord, Lord Boyd-Carpenter, can he say what is the loss to the economy resulting from the Government's policies?
The Earl of GOWRIE: My Lords, I cannot see quite what that has to do with the Question on the Order Paper. But I can say to the noble Lord—and, as an old parliamentary hand he knows this very well—that the Government are quite determined to keep on with their policies, which are well overdue, which should have been done about 15 years ago, and when British industry revives it will be in better shape than at any time since the noble Lord himself was last in Government.
Lord LEE of NEWTON: My Lords, will the noble Earl agree that if it is possible to make an estimate of the type asked for in the Question, it is possible also to estimate the cost of the massive unemployment from which we are now suffering? You cannot have one without the other.
The Earl of GOWRIE: My Lords, unemployment is enormously costly to

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the Government and that is why they do not like it. What, unfortunately, is not available is the old tools of demand management which has inflated the economy for so long.
Lord MISHCON: My Lords, while the House is engaged on this completely non-political series of questions and answers, may I ask the noble Earl, if he has the figures available by way of estimate, what he estimates is the cost to the country of the non-intervention of the Government in the steel strike which has led to such devastating results not only in the steel industry but in the general economy of the country?
The Earl of GOWRIE: My Lords, as my right honourable friend the Secretary of State for Industry has said on many occasions, the Government have been intervening in the steel industry to the tune of £5,000 million in the last four and a half years. That is not my idea of non-intervention. In terms of the steel strike, what the noble Lord means by intervening is, presumably, settlement at any cost.

LONDON-HONG KONG AIR SERVICES
3.10 p.m.
Lord MERRIVALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they gave consideration to the possibility that British Airways, Cathay Pacific and in particular British Caledonian could cater for the needs of "the forgotten men and women at the bottom end of the market" before announcing the licensing of four operators for air services between London and Hong Kong, and if so, what consideration was given to the probability of shortage of hotel space in Hong Kong and the saturation of Kai Tak Airport.
Lord TREFGARNE: My Lords, my right honourable friend the Secretary of State for Trade, in considering the appeals,
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took into account the information put in evidence. This included evidence on passenger forecasts and on hotel accommodation and airport capacity. On the basis of all the evidence he decided that all four carriers should be licensed.
Lord MERRIVALE: My Lords, may I thank my noble friend for that Answer? Is he aware that last week British Airways introduced a new package for Hong Kong? Would he not agree that with British Airways, British Caledonian and no doubt Cathay Pacific providing a fare of £99, that will cater for those people at the lowest income? Furthermore, am I right in assuming that the date of application to the Hong Kong Air Transport Licensing Authority was filed by Laker on 23rd June last and that it was sup-ported by the Hong Kong Government? If it was supported by the Hong Kong Government, will my noble friend say whether Her Majesty's Government have given to the Hong Kong Air Transport Licensing Authority via the Hong Kong Government any economic information which will assist them to approve or disapprove the application?
Lord TREFGARNE: My Lords, the Hong Kong licensing authority is a completely independent body and the matter is therefore solely one for them, although when the original decision on the appeal was announced by my right honourable friend he expressed the hope that they would treat Laker's application favourably.
Baroness BURTON of COVENTRY: My Lords, while being glad that the noble Lord, Lord Merrivale, has called attention to the bottom end of the market, would the Minister agree that the recent offer by British Airways (which they have called a "fire cracker" scheme) is likely to bring advantage to air travellers at the bottom end of the market, as it is the lowest on offer? May I ask him, furthermore, in congratulating British Airways on that scheme, whether he is aware that they say that this scheme guarantees a ticket? Does it also guarantee a seat?
Lord TREFGARNE: My Lords, that, I suspect, rather depends upon the number of passengers offering, I do not suppose that we have heard the last of this matter in terms of low fare offers.

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I can well imagine the other air lines following suit in due course.
Lord SEGAL: My Lords, in view of the enormous congestion at Kai Tak airport, will the noble Lord say what progress is being made with the construction of a second airport for Hong Kong, and when the second airport is likely to be completed?
Lord TREFGARNE: My Lords, I have no information on that matter, I am afraid. We think that the proposals are not likely to stretch unduly the capacity of Hong Kong airport, although I confess that it is fairly busy at present. Even if all the carriers operate at full frequency as forecast, it is likely to be only some 22 movements a week.
Lord PONSONBY of SHULBREDE: My Lords, surely the Hong Kong licensing authority will have to take into account the capacity of the airport, before coming to a decision themselves whether to licence a fourth carrier to enable that additional service to operate?
Lord TREFGARNE: My Lords, I am quite sure that the Hong Kong licensing authority will want to consider all the factors, but I cannot think that they would want to exclude Laker simply on the grounds of the capacity at Hong Kong airport.
Lord MERRIVALE: My Lords, would not my noble friend agree that if there is extensive competition—in other words, increasing free-for-all—with a continuing fight for reducing air fares, British airlines may find themselves in a position in the future in which some American airlines find themselves at the moment?
Lord TREFGARNE: My Lords, if my noble friend is referring to the Hong Kong to London route, there is no question of American airlines operating on that route.

CONSETT: STEEL RUNDOWN AND REMEDIAL MEASURES
3.15 p.m.
Lord ROCHESTER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied that the measures announced on 19th June for areas affected by the proposed steel rundown, will alleviate sufficiently the economic and social consequences of the job losses involved at Consett.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard): My Lords, the Government believe that the measures announced for Consett on 19th June represent a realistic assessment of what can usefully be undertaken there at the present time and will help to alleviate the severity of the area's problems.
Lord ROCHESTER: My Lords, does the Minister accept that action should not be taken at Consett that results in intolerable social strains for that single industry, town and its fine workforce? Has the British Steel Corporation considered inviting the trade unions to examine with them whether there is any economic basis—perhaps even including some reductions in pay—that would enable Consett, which is still potentially profitable, retains a growth market for steel billets and in recent months has met its production targets, to remain open beyond next September? If it does not, are the Government quite sure that they will be able to honour at Consett the undertaking that has been given, to give all this summer's school-leavers training or other work opportunities by next Easter, and also, to make places available under the scheme to all young people who have been unemployed for more than 12 months?
Viscount TRENCHARD: My Lords, I do not accept the noble Lord's premise that if the planned closure at Consett goes ahead as proposed it will produce intolerable social strains. That it will produce a very severe problem and that we need to mobilise a great many remedial measures—most of which have been announced, and about which I shall remind the House if requested—is undoubted.
Neither do I believe that the proposition that Consett is potentially profitable in present circumstances is one on which the noble Lord or even the Government can

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properly judge. With the latest turn of events in the steel industry in Europe and in this country and bearing in mind the coming on stream of the Redcar blast furnace, I can see no reason, as an amateur, speaking, I believe, to another amateur, to disagree with the British Steel Corporation's judgment that the position at Consett, both in the overall position and itself in the longer term, which has led them to take the decision that they have is a very difficult one.
As regards whether we can guarantee all school-leavers either training or a job, I should like the noble Lord to direct my attention to where we have positively said that we can train every individual leaving school. We are certainly expanding the various training services of the Manpower Services Commission. Where there is a need and it is practicable, we shall do all we can to meet it with training courses of one kind and another.
Lord PEART: My Lords, I support strongly what the noble Lord, Lord Rochester, has said. Consett is suffering basically because the Government have refused to act properly on this matter. It is true that Consett was successful. Is the noble Viscount not aware that this is a deplorable situation? The Government are responsible for the breakdown in good relations in the steel industry, in a situation where the men of Consett are moderates in the best sense.
Viscount TRENCHARD: My Lords, the fact that the results at Consett have improved and through the efforts of the people working at Consett is accepted and has happened. To say from that that Consett is a highly successful steelworks is not correct on any long-term basis. There is a substantial improvement—but no more. So far as the Government's responsibility for the situation leading to the closures which British Steel judge must include Consett, noble Lords opposite must look to themselves and to their failure to face realistically the situation of the uncompetitiveness of British Steel as a whole at an earlier time.
Lord SANDFORD: My Lords, can my noble friend tell the House what steps the Government have taken so far to
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take advantage of the proposals made by the EEC Commission for assistance under the Regional Fund for just such a situation as has now occurred at Consett? Those proposals were made, if my noble friend will remember, last October.
Viscount TRENCHARD: My Lords, as I have repeated before in this House, we have taken all available offers from the ECSC and from the Commission. I think my noble friend may be referring to certain proposals which go beyond that, for which there is not an EEC budget; nor is there an agreed scheme.
Lord BLYTON: My Lords, is the noble Viscount aware that the closure of Consett will make a deserted town in the County of Durham from which I come? Is he not further aware that the remedial measures suggested to meet the position of Consett will not touch the fringe of the problem and that there will be practically total unemployment in the Consett town? Is it the Government's position, as they did in the 1930s, to create another Jarrow in the County of Durham at Consett?
Viscount TRENCHARD: My Lords, I would not accept that the closure of the Consett steel mill will turn Consett into a deserted town. The employee numbers in 1976 (and they have worsened only a very little bit since) in the travel-to-work area of Consett were 31,000. The present unemployed position, which is serious—and that is why the area is a special development area—shows that the figures are of the order of 4,000. The number of redundancies declared by the British Steel Corporation is 3,700. Those are the proportions, and I think the noble Lord's statement is an over-statement. Against those numbers, the Government have announced factories at a cost of £12 to £13 million, which could provide jobs on the average jobs to the square footage of factories of over 2,500 jobs; 33,000 square feet of the factories are under construction at the present time and 65,000 square metres have been agreed—
A noble Lord: Not at Consett.
Viscount TRENCHARD: At Consett.
Lord ROCHESTER: My Lords, surely the noble Viscount will be aware that,

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in winding up a debate on unemployment, the Secretary of State for Employment last week gave in another place the undertaking concerning the youth opportunities scheme, to which I referred, and it has application not only at Consett but throughout the country?
Viscount TRENCHARD: My Lords, the youth opportunities programme will be expanded in all steel remedial areas and there will be enhanced measures under the four headings which I gave in the recent steel remedial Statement for all steel areas. In addition, my right honourable friend the Secretary of State for Employment, as you may have seen reported in the press yesterday, spoke at NEDC on the problem of extreme unemployment in these particular kinds of areas, and he is to table a further paper with further ideas for discussion with all parties at the NEDC in, I think, a month's time.
Lord MORRIS: My Lords, in the light of the answer given by my noble friend to the first supplementary question of the noble Lord, Lord Rochester, will he be good enough to tell the House how he manages to distinguish between "very serious problems" and "very serious strains"?
Viscount TRENCHARD: My Lords, I have made no major distinction between them. What I said was that I did not accept "intolerable social strains". I believe that with the measures that we take, the social strains, which are very real, will not become intolerable.
Lord WYNNE-JONES: My Lords, if the noble Viscount is serious in saying that the Government intend to extend opportunities for the training of young people, why is it that they have closed down two skill centres in County Durham and over the whole of that region?
Viscount TRENCHARD: My Lords, I know that the Manpower Services Commission are closing and opening skill centres in various parts of the country. I happen to know the detail of that at Corby, where a similar criticism has been made, but I am afraid I do not know the details of the particular situation which the noble Lord, Lord Wynne-Jones, raises in relation to Consett. However, I
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am pretty sure that availability of skill training within the area or within bus reach of the area—which is more and more what is happening in order that one skill centre should be properly equipped to cover a large area—will recieve the highest priority; we will train for skills people who are suitable for that kind of training and where there is a reasonable prospect of their being able to change their careers and take a new job in the area.
Lord DAVIES of LEEK: My Lords, in all seriousness, without hoping to make a party political point, may I ask the noble Viscount whether he will ask the Government very soon to come to this House and make a statement on the relationship of the steel industry, as they envisage it, to the military-industrial complex and all this talk about civil defence and military rebuilding in this country? Without the skill of the steel worker, which is going to he lost, it is ridiculous to talk in militaristic terms, as some Government people seem to do.
Viscount TRENCHARD: My Lords, this Government are well seized with the need to have a really competitive and efficient steel industry. I say once more that if their policies, and if the policies of the British Steel Corporation, had been applied and supported some years ago, we would have now a much stronger base for the purposes the noble Lord has described.
Lord DENHAM: My Lords, I know that the noble Lord, Lord Pargiter, wishes to ask a question; perhaps the House may feel that, after he has asked his question and my noble friend has replied, it might be convenient to move on.
Lord PARGITER: My Lords, could the noble Viscount tell us, with regard to these admirable new factories that are being put up, whether occupants have already been found for them or whether it is really a case of transferring unemployment from one area to another?
Viscount TRENCHARD: My Lords, some of those factories are already booked —I have forgotten what the official term is for "booked"—but far too few of them. Certainly I do not wish in any way to mislead the House on this, but the problem of Consett is indeed to attract other employment to that area. All I can

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say is that all departments of government are doing everything they can, including the preparation of factories, to attract suitable employers to the area.

BUSINESS
Lord DENHAM: My Lords, it may be for the convenience of your Lordships if I announce that dinner will be available this evening at the usual time.
The Committee stage of the Housing Bill will be adjourned at approximately 7 o'clock for about one hour. The Novelties (Safety) Regulations 1980 and the Third Reading of the Trees (Replanting and Replacement) Bill will be taken during this adjournment. It may also be for the convenience of the House if I say that it will now be necessary to continue the Committee stage of the Housing Bill tomorrow, Friday, 4th July.

SCOTTISH WIDOWS' FUND AND LIFE ASSURANCE SOCIETY BILL
Read 2ª, and committed to an Unopposed Bill Committee.
STANDARD LIFE ASSURANCE COMPANY BILL
Read 2ª, and committed to an Unopposed Bill Committee.

HEALTH SERVICES BILL
Lord CULLEN of ASHBOURNE: My Lords, I beg to move the Motion standing on the Order Paper in the name of my noble friend Lady Young.
Moved, That it be an Instruction to the Committee of the Whole House to whom the Health Services Bill has been committed that they consider the Bill in the following order, vizt.:—

Clauses 1 and 2.

Schedule 1.

Clauses 3 to 8.

Schedule 2.

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Clauses 9 to 14.

Schedule 3.

Clause 15.

Schedule 4.

Clauses 16 to 24.

Schedules 5, 6 and 7.

Clause 25.—(Lord Cullen of Ash-bourne.)
On Question, Motion agreed to.

HOUSING BILL
3.30 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, that the House do now again resolve itself into Committee.—(Lord Bell win.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 61 [Cancellation of registration of rent]:
[Amendment No. 138B not moved.]
Clause 61 agreed to.
Clause 62 agreed to.
Clause 63 [Conversion of controlled tenancies into regulated tenancies]:
[Amendments Nos. 139 to 139E not moved.]
On Question, Whether Clause 63 shall stand part of the Bill?
Lord GOODMAN: Perhaps I ought to explain that the self-sacrificing abstinence of the noble Baronesses on the previous amendments was owing to the fact that, logically, if the two amendments that they have put down had been discussed, and subsequently, as I hope, my own amend-

521
ment is passed by the Committee, those two amendments would become irrelevant. So I expect that the probability is that they have not dispatched their amendments into limbo, but intend to reinstate them on Report stage in the event of my unhappy failure to persuade the Committee that this clause should be removed from the Bill altogether.
Since we have all been urged to brevity —quite rightly, in view of the elaborate nature of the discussions in which we have to be involved—I hope that I may be permitted to make a few preliminary observations about my reason for wanting to remove this clause. I was, many years ago, one of the unofficial advisers to the late Richard Crossman when this matter arose in a very prominent and important context. I, and the noble Lord, Lord Lloyd of Hampstead, whom I am happy to see today, worked with him on these matters.
One of the most important questions that arose for discussion was whether the principle of the fair rent, qualified by the introduction of the shortage element, as explained last evening by the Minister, who gave an admirable and exemplary explanation of what a fair rent is, should he introduced to all controlled lettings, or whether the controlled lettings of the poorer element, or the worst element, of the housing stock should be left out, for the reason that their inclusion would bring great hardship, discomfort, anxiety and concern to a number of people living in the most deprived fashion in this country under the rent restriction legislation. After anxious discussion, it was decided by the then Minister that the old controls should remain.
I would invite the co-operation of the noble Lord, Lord Bellwin, to whom I should like to pay tribute, if I may venture to do so without appearin patronising, for the exceptional courtesy and mastery which he has shown over this thoroughly difficult and complicated Bill. I should like to ask him whether he would be kind enough, if he disagrees with the statistics that I am proposing to furnish, to tell me so, because my statistics are secondary evidence based on hearsay, I have not been around to count the number of secondary controls that still remain. I do not know how many there were,
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authoritatively, at the time when Richard Crossman's decision was made, but my understanding is that at that time there were 4 million such tenancies, and they have abated since then, by the normal processes of attrition and wastage, to 200,000. So it is perfectly clear that, on that principle alone, this wastage is effectively removing them from the housing scene, and that it cannot be very long before, in the ordinary process of attrition, they will disappear altogether.
The process has been hastened by the introduction of a principle in, I think, the 1977 Act, whereby the second transmission of a tenancy, without the tenancy becoming automatically a regulated tenancy, ceased to arise. That is to say—to explain to those who are not entirely familiar with the matter—under the present provisions, where there is a controlled tenancy and the tenant dies, there is a right of transmission to the spouse of that tenant, but there was previously a second right of transmission to other members of the family of that tenant. That second right of transmission has been abolished, so there is already a process whereby curtailment or reduction of those tenancies is brought about by that method as well. So we have a situation where we are dealing with 200,000 tenancies out of a previous number of 4 million tenancies, which it is now considered necessary to remove by this clause in the Bill.
I wonder whether I may make this general observation, which may not be entirely acceptable to either side, but will possibly be to the Cross-Benches. I think that this Bill contains a number of very valuable features, and reflects a considerable degree of credit on the draftsmen and others who devised it. It has, obviously—as any Bill as complex and difficult as this must have—a number of difficulties and a number of shortcomings and the noble Lord has expressed a willingness, in several instances, to consider an improvement in the Bill, since he has uttered the admirable sentiment that he wants the best Bill he can have. I am sure that that view is shared by every Member of the House, of whatever political complexion.
However, there are two serious shortcomings in this Bill, both of which have given rise to very great public anxiety.

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The first we discussed yesterday. That was the question of the shortholding, because, in my view, everything which is required to encourage the availability of additional premises for letting, either furnished or unfurnished, would be provided by a safeguard that the landlord of the premises could be sure, where he had stipulated that he would want them back at the end of a short tenancy, that they would be restored to him. That is the important requirement that would bring about the availability of a great deal more furnished letting.
I can see—and I do not want to talk on a different amendment, but as I have started on the point I will go on—no sense at all in allowing a landlord to change one tenant at a registered rent to another tenant at the same registered rent. It creates anxiety on the part of the incumbent tenant, adds nothing whatever to the availability of the housing stock and is not a sensible provision.
That is not, however, the point we are on at the moment. The point we are dealing with at the moment is the deep public anxiety that has been caused, as reflected in my own mail—and no doubt it is reflected in the mail of most Members of this Housex2014;by the removal of those 200,000 tenancies, quite unnecessarily, since, as I have said already, they are going to disappear by a process of normal wastage.
I invite the Government to consider that this Motion on my part is in no way motivated by any political considerations. I think I have said enough already to satisfy them on that point. It is animated by this consideration. The rent officer, about whom I shall have a word to say in a moment, will now have to consider and assess a rent for 200,000 premises, where previously he need not have done it. The noble Lord can possibly tell me—yesterday he was, if I may say so, a little coy on the subject—what it costs to assess a rent in either let or unlet premises. My guess would be that an assessment of £100 is a very modest one indeed.
I have no mathematical skills, but aided by several experts at Oxford I have been told that 200,000 times £100 makes £20 million. We are going to spend £20 million to indulge a political whim
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and a belief that consistency should be the god which we serve in this regard. That £20 million is going to be spent to no purpose at all. That is an important consideration, but it is not the most important consideration. The most important consideration is that 200,000 tenants—and my statistical experts tell me that 65 per cent. of them are pensioners and 85 per cent. are over 60 or 65—are going to have visits from the rent officer. They are people who are least equipped to deal with the situation, in whom anxieties, concerns and fears will be aroused by the mere arrival of this official.
I shall have a word to say about the rent officer in a moment—it will be a word of approbationx2014;but why should it be necessary for 200,000 people to be mildly persecuted, and some even tormented, to secure a result that is going to come about by the process of time? It does not make any sense. It is devoid of reason. It is out of character with the deep thought and anxiety that is clearly reflected in most of this Bill.
I have a further point and it is this. As I rather proudly announced yesterday, I am, in a way, the creator of the rent officer. I can claim in part to have invented him, and I am glad to see that that claim is being conceded. I do not say this in any boastful spirit, but the appointment in which I take the greatest pride is President of the Institute of Rent Officers and I am concerned for their welfare.
The rent officers will now become engaged in a situation of the utmost difficulty, delicacy and embarrassment. They will have to search out the people who are less able to deal with these things, and who are the people who will respond worst to their approach, and it will be to no point. The poor wretches will have inflicted upon them the invidious duty of telling these old people that there are going to be changes in their rent. It will not be the slightest use telling them that they can get a rent subsidy. They will not know where to get it and they will not be reassured.
Nearly 50 years ago I used to sit with two other close friends of mine, one of them the noble Lord, Lord Lloyd of Hampstead, as a poor man's lawyer in the East End of London. About half

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of the cases which came to us on Tuesday evenings—we sat from six until nearly midnight—were landlord and tenant cases. About half of those cases were elderly people, mostly old ladies, wanting to be reassured that they could stay in the slum quarters that they occupied and that they would not be institutionalised. They wanted to feel that they had a home, whatever it was, and however inadequate.
It is for that reason that I feel so strongly about the matter this afternoon, and I invite the Committee, regardless of political affiliations, if necessary to go with me into the Division Lobby to ensure that this clause is removed. It will show great grace, wisdom, generosity and kindness on the part of the Government and earn them much esteem if they respond to this appeal.
May I say one word about the rent officer. Yesterday, the noble Lord, Lord Shinwell, raised a question about how the rent officer operated and about whether people were concerned about the way in which he operated. I think that one of the innovations in relation to landlord and tenant—my small part in it is unimportant—has been the enormous success of the institution of the rent officer. I was told by a senior rent officer when I addressed 600 of them—it is a matter of great pride to a bachelor like myself to find that he has fathered a family of that size—that since his appointment he had dealt with 10,000 applications, from which there had been 40 appeals. Imagine the amount of public and judicial time and expenditure which has been saved by that institution. It becomes an absolutely legendary sum. It seems to me to be a great folly to endanger his standing and position and to endanger his status by giving the rent officer a job that he must find distasteful.
I have said all I need to say. I invite your Lordships to consider very carefully indeed whether or not this clause should be removed from the Bill—whether or not this particular kind of tenancy should be allowed to remain and to waste away during the short time that is needed for it to waste away. I beg to move.
Lord HYLTON: Before my noble friend on the Front Bench replies, may I put a point to him? The noble Lord, Lord Goodman, has made a very moving
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plea on behalf of controlled tenants and a lesser plea on behalf of rent officers. May I ask whether my noble friend has received any pleas on behalf of landlords, often of only one or two properties, who in some cases find themselves to be poorer and less well off than their tenants? I have received some pleas and I have no doubt that other Members of your Lordships' House have received similar pleas. This is a factor to be weighed in the balance.
Lord GOODMAN: With the leave of the Committee, I should like to answer that question. There are situations where the continuation of a controlled tenancy must bring some injustice to a landlord, particularly if he is conscientious. It would be thoroughly bogus and hypocritical to pretend otherwise. If, however, one considers the matter on a question of balance, there is an overwhelming balance in favour of retaining controlled tenancies.
3.44 p.m.
Lord BELLWIN: May I begin by saying that Clause 63 removes what is probably one of the biggest iniquities in all the Rent Acts—namely, the continued existence of these controlled tenancies with rents still basically fixed at 1956 levels. They average between £1 and £1.50 per week.
I shall refer briefly to the history of these tenancies; it is right that I should. When rent regulation was introduced by the 1965 Rent Act it was applied only to tenancies of properties above certain rateable value limits. The reason was not that the Labour Government felt that these dwellings were intrinsically not suitable for the fair rent system but simply a question of the workload for rent officers. This was made quite clear by Mr. Crossman during the Second Reading of the Rent Act in April 1965 when he apologised for not providing for the decontrol of all properties at once. I will quote what he said on that occasion:
"I am aware that this means carrying on for some time with the old rigid control, but that is because the first call on our new machinery of flexible rent regulation must obviously be a review of the exorbitant rents which the most exploited of the decontrolled tenants are now paying".
He went on to say:
"When the bulk of this work is out of the way in any particular area, we are going to transfer the old tenancies"—
those are the tenancies about which we are talking—
"now under the old rent control into our new system of rent regulation and from that moment tenants and landlords will each have the right to put their case to the rent officers and the rent assessment committees ".—[Official Report, Commons; 5/4/65: col. 36.]
That was in 1965.
The noble Lord, Lord Goodman, will hardly need reminding of that history. The Crossman Diaries described how he played a major part in developing the fair rent system to which he has just referred. I have no hesitation at all in paying tribute to him and to the consequences which flowed from it. Yet now we have the noble Lord, 15 years later, trying—no, not trying, but very ably suggesting to us that the original 1965 intention of applying fair rents to controlled tenancies should be further delayed.
The next part of the saga comes with the introduction of the Conservative Government's 1972 Housing Finance Act, which introduced a phased programme of decontrol whereby controlled tenancies were divided into six rateable value bands, with properties within each band being converted in turn into regulation. Again, the only reason we did not decontrol all bands at once was fear of the workload consequences for rent officers. Sadly, our phased decontrol programme was halted half way through on the change of Government in 1974. That meant that tenancies which have existed since 1957 in properties with a rateable value of less than £35 outside London and less than £70 in London remain caught in the controlled sector. That is the position which we aim to rectify. Our best estimate is that there are some 200,000 such controlled tenancies in existence. I think that the figures which the noble Lord gave were very nearly correct. I would not for one moment suggest otherwise.
I said a moment ago, and repeat again, that the average controlled rent is probably between £1 and £1.50 per week and it has remained pegged to the rateable value of the property in 1956. Since
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then the retail price index has risen by over 375 per cent., council rents by over 650 per cent., and old age pensions by over 1,000 per cent., yet controlled rents remain the same and are now little more than the rental on a telephone and rather less than that on a colour television. These stark figures speak for themselves.
When they stopped our decontrol programme in 1974, the policy of the last Labour Government was only to allow conversion from control to regulation after improvement of the dwelling up to a strict qualifying standard. Failure by a controlled landlord to improve up to that standard was to attract the penalty of staying on controlled rents. The figures show what an utter failure that policy has been. In 1975, only about 5,000 controlled tenancies passed into regulation after the issue of a qualification certificate; in 1976, it was 4,000; in 1977, 3,000; in 1978, 2,000; and in 1979, a grand total of 1,260 properties qualified for decontrol out of a total sector of about 200,000 tenancies. At that rate we should have controlled tenancies, still no doubt at 1956 rents, well into the 21st century. I think, if I may say so with respect, that that is the answer I would give to the noble Lord, Lord Goodman, on the point of allowing this to happen by itself.
Is it any wonder that controlled landlords cannot afford to improve or sometimes even to maintain their property? The point that my noble friend Lord Hylton made was very relevant; I was going to make it myself in any case. No wonder that we receive despairing letters from controlled landlords who are often worse off than their tenants and who are faced with bills they cannot pay for a property they cannot afford to maintain. It is estimated that about 80 per cent. of controlled landlords are individuals, as opposed to property companies.
I think that is a very significant figure. I say it again: some 80 per cent. of controlled landlords are individuals. We have no firm information about their incomes, but in 1976, among all nonresident individual landlords, about half were over 60 and about half had incomes below £60 a week. Controlled landlords are likely to be older and poorer than the rest. We are not talking about the rich or about property companies. Con-

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trolled landlords are mostly individuals of below average means, who, because of the grossly unfair controlled rent regime—some would say because of the iniquity of it—are suffering real hardship.
Controlled tenants, too, are mainly of below average means, as the noble Lord very properly said. We recognise that. About 85 per cent. of controlled tenants are 60 or older. About half the controlled sector are elderly, single person households, and another one-third are small, elderly households. These tenants are old and poor, on average, and we are certainly not forgetting that they are living in low-standard accommodation which either lacks standard amenities or is in poor condition, or both. It would be fair to ask whether we could really expect that the condition of these premises should be other than the state in which they now are if, since 1956, the landlords have not been allowed to charge more than £1 or £1.50 per week as rent. Where would the money to upgrade them come from if those landlords are people, as I have just illustrated, who do not have means at all? If we are concerned about the lack of amenities and the poor standard of this accommodation we should not be so surprised.
On decontrol there will be rent in-creases, but let us put that in perspective. The average fair rent on decontrol in 1979 for dwellings lacking at least one amenity was about £7.20. By definition, those rents were for dwellings with higher rateable values than currently controlled dwellings. These were landlords whose property was decontrolled under the 1972 programme but who have not until 1979 applied for registration. Our best estimate, therefore, of the average fair rent likely to be assessed for the lower rateable value dwellings now in control is between £5 and £6 per week. The increase in the old controlled rent will be phased, so a typical progression following enactment might be an increase from £1 to £3.50 in the first year after registration, rising to £6 in the second year. Obviously each fair rent must reflect the quality and condition of the dwelling, but on average we are talking about an increase in rent of the order of £4 or £5 spread over two years.
As with other private tenants who have difficulty in paying their rent, rent allow-
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ances and supplementary benefit will be available. I take the point the noble Lord, Lord Goodman, made about the fact that this is the very part of the community who have most difficulty in knowing what their rights are. I believe it was the noble Baroness, Lady Birk, who said yesterday that some 55 per cent. of tenants claim allowances to which they are due. I said that this was a matter of grave concern to Government, not just concerning this category of tenant, and that we intend to launch yet another publicity campaign, we hope this time a better one than before.
We will do everything in our power to bring to the notice of people exactly what their rights are in this regard. I suggest that with this opportunity of decontrolled rents we have a special chance, because each person concerned will be contacted, will be involved, and it will be discussed with them. I give an assurance that it will be made absolutely clear to every tenant concerned exactly what his or her position will be in relation to the allowances which are available. As with other private tenants who have difficulty, this is the position with which they will be faced.
I have already mentioned that 85 per cent. of controlled tenants are over 60 years old. Many of them, therefore, will be on supplementary benefit, which means that their rent increase will usually be met in full. As I have just said, we will give the widest publicity to the availability of rent allowances, and in particular to the tenants affected by decontrol. As a safeguard for tenants we are providing, in Clause 66, that private agreements increasing the rent on decontrol are void. The only means of increasing a controlled rent after the commencement of Clause 63 will be by application to the rent officer for registration of a fair rent. The rent officer will ensure that the tenant is properly informed about the implications of decontrol. That was the point I made a moment ago.
In summary, Clause 63 brings controlled tenants at last into the fair rent system. This was what was always intended. The fair rent system itself exists to provide protection for tenants, and that is the protection that controlled tenants will now get. The clause at last allows controlled landlords a fair rent for their

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property. In my view there is absolutely nothing unfair or unreasonable about that. I reject altogether any accusation that the clause will cause hardship for tenants. It could cause hardship for tenants, but, as I have just mentioned, we will do everything we can—I am sure it will be most effective—to ensure that it does not. On balance, it must be the weight of the argument.
I think I should try to refer to one or two of the specific points which the noble Lord, Lord Goodman, made and which perhaps I have not touched upon. In particular, he was concerned about the cost of each rent assessment. With great respect, I suggest that the noble Lord was wrong in saying that it would cost in the region of £20 million. The general total estimate of what it will cost—if the noble Lord would like the basis on which I make the assertion I will endeavour to give it to him in greater detail, perhaps in another form, at another time—is about £1 million. The other point the noble Lord made was that rent officers would find the job distasteful.
Lord MISHCON: Before the Minister continues, I wonder whether he would elucidate, for the benefit of us all, how he estimates £5, as I make it, per rent officer charge for 200,000 dwellings? To me this is completely and absolutely absurd, but it may be that I have misunderstood the Minister.
Lord BELLWIN: I am advised that paragraph 27 of the financial memorandum to the Bill puts the cost of the extra work to the rent officer service as being £1 million. If the noble Lord, Lord Mishcon, would like me to do so, I will gladly undertake to send him, as I propose to do with the noble Lord, Lord Goodman, information to explain where this figure comes from. I cannot give that as I stand at the Dispatch Box. Clearly it is a figure which is given to me, but I have no reason to think it is extremely out.
Lord MISHCON: As always, the noble Lord is most courteous, but the Committee is trying to make up its mind on an argument. The argument on one side is that it would cost £20 million. That may or may not be right. The argument
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on the other side is £1 million. For the life of me, I cannot understand it. It may be that I am wrong, but I cannot understand how 200,000 tenancies can be dealt with for a cost of £1 million unless it be on the basis of £5 per dwelling.
Lord BELLWIN: I think I must say, first of all, that one should not be talking about the difference between £1 million and £20 million. The noble Lord, Lord Goodman, said that maybe it would cost £100. He did not say it would cost £100. I am sure he has not done any calculations to enable him to assume it would be so. I said the extra cost of the measures could be £1 million, and this is still the figure. There will be a very great increase in the procedures. Yesterday, when the noble Lord, Lord Goodman, was talking generally about the rent officer service, I said there had been considerable discussions with the Institute of Rent Officers, as a result of which whole new procedures are about to be introduced. I understand these are entirely with their approbation and, I hope may say, their enthusiasm.
Therefore, the procedures and costs in the past will not pertain, whatever they might have been—and I could not accept, any more than I think the noble Lord, Lord Goodman, would want me to—that £100 was the figure. It may be that I did not make it clear that the £1 million, to which I am referring, is the extra cost of the work that will be involved, but that will not be a cost to the tenants in any way. It is the extra cost. It is not necessarily the basic cost, but it is the extra cost of what will be involved. In any case, even if I were wrong—and I certainly do not accept that I am—in no way, to my mind, does that detract from the basis of the argument.
The basis of the argument is that in 1965, when the fair rents procedure was brought in, it was said—and I have quoted from the Minister at that time and I think the noble Lord, Lord Goodman, himself would confirm it—that the object of the exercise was to take these controlled tenancies, which were then some 4 million or 5 million (I thought it was the latter figure) and to bring them into regulation. All that has caused that to be delayed have been the problems attendant upon

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the administration, the rent officer, procedure and so on.
I can quote from my own experience by saying that one of the recommendations of the Francis Committee in 1971 was that all those controlled tenancies should at once be brought out of control and into regulation. So I think I should have to base my argument upon the thesis of whether it was right that landlords of the kind that have been described should continue to have to receive their £1 or £1.50 a week, that the tenants should have to go on at the rate of some 1,250 a year becoming decontrolled. There are 200,000 of them. I think the whole case is unanswerable. I respect very deeply the points made by the noble Lord, Lord Goodman, and his motivation in raising them, but I feel that the great strength of the argument lies with us and that is why we resist this amendment.
Baroness BIRK: As the noble Lord knows, I had tabled an amendment to this clause in which I was trying to find a way to minimise the effects on the tenant if rents were decontrolled. It was extremely difficult to do this, but I think my amendment went some way towards it. However, I thought on balance that leaving out the clause, as suggested by the noble Lord, Lord Goodman, was a much better way of dealing with this situation, which he rightly said is really such a small part of all the housing problems in this country.
We are dealing here with the most vulnerable people and the Minister quoted Richard Crossman speaking over 15 years ago. But I would remind him that 15 years ago conditions were rather different from what they are today. We were not in a period of high inflation, the cost of living was not as high as it is today and, in spite of the increase (which I acknowledge) in pensions, a great deal of which was done under the last Government, nevertheless we are speaking about some of the most vulnerable people in the community in respect of their poverty, their age and the conditions in which they live. One of the reasons why I prefer the option of leaving out the clause to either the amendment standing in the name of the noble Baroness, Lady Vickers, or my own amendment, is that I can see no way in our amendments by which the tenants would not be subjected to a fairly
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high increase if they came under the fair rents system. Certainly under the proposals in the Bill there would be no requirement that the property should be in good repair, with the basic amenities, prior to a fair rent being fixed. So there is a very big hole in the Government's proposals, even if one accepts that it is right in principle, which I do not.
If these properties are decontrolled, it means that the rents will be increased, ostensibly if repairs are carried out, but bad landlords, and some of these poorer landlords to whom the Minister has referred, will not carry out repairs for a long time—if ever. In previous clauses in this Bill we have seen that rents are now going to be reviewed every two years rather than every three years, and the phasing is also going to be cut down. This again means an increase in rents, or certainly a high potential, and I should have thought actual, raising of rents.
The noble Lord the Minister referred to the Conservative Housing Finance Act of 1972 and I would remind him that in that Act the wording of the relevant subsection (5), which is in my amendment, is taken straight from that Act; that the Government clearly recognise the need to pay regard to the wishes of frail and elderly tenants. So all we are asking this afternoon is that the Government should pay attention to the needs of frail and elderly tenants. I agree with the noble Lord, Lord Goodman, that in the interests of consistency it seems a pity for the Government to stand out on something like this which is a matter for compassion as well, and there is a business involved in it. I am sure the Minister will have seen the notice of an auction sale of controlled tenancies which in fact is going to be held next Thursday in London, where these controlled tenancies are bought up by speculators as investments and immediately, even with the low rents that are being charged at the moment, they are a very good investment. So there is another unhappy side to it as well, and I hope that the Committee will support the noble Lord, Lord Goodman. Certainly my noble friends and I will be doing so.
Lord LEVER of MANCHESTER: I must say that the Minister has made an absolutely unanswerable case for the

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abolition of rent control. The only difficulty I have is that nobody is urging permanent continuance of rent control, so that most of his speech of compelling logic was very far away from the narrow issue that we are now discussing; not whether rent control should be brought to an end on these houses, but at what pace and in what way.
For many years I have been sceptical, from practical experience, of the effectiveness of those benign intentions which led to the complex of rent control. It was not a view popular on our side of the House; nevertheless that battle has been won. What we have got to is the same system of fair rents which goes absolutely and inevitably with any concept of giving tenants protection from eviction. What we all have to judge is whether the noble Lord, Lord Goodman, is right in thinking that it is for the country to decide—having acquiesed with a considerable degree of illogicality for one reason or another with different Governments of different political complexions—as to whether the right way of ending rent control for these 200,000 houses, mostly in bad condition, mostly occupied by old and poverty-stricken people, is the abrupt, pedantic one which will come into force if the Minister has his way or the rather more benign process of gradualism proposed by the noble Lord, Lord Goodman. I think for a hard-headed Government we ought to have something better in the way of an estimate of the costs. These benefits must be weighed against the social cost. For example, if we heard that it would cost £200 million—and I am not suggesting that figure—the noble Lord could hardly say that the cost is irrelevant.
A noble Lord: But it is not £200 million.
Lord LEVER of MANCHESTER: No, of course it is tv,t £200 million, but equally it is exceedingly unlikely that it is £1 million. It is a figure which on the face of it sounds incredible, and not merely incredible in the sense that it is inadequate but that it is hopelessly wrong. These houses cannot be looked at street by street; they must be looked at individually, their condition assessed and examined and argued about. The notion that that can be undertaken in present-day conditions at £5 a house is so absurd
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that I share Lord Mishcon's excitement that brought him to his feet on the matter.
I do not think the Minister is entitled to come here and ask for a blank cheque. He has argued the benefit of decontrol. Nobody is challenging that there has to be decontrol; it is going to take place and it is taking place every day. Many of these houses, thanks to the policies of Governments, misguided as he probably thinks and as I think in the past, are now in a condition where they cannot be put into proper order structurally at any kind of reasonable expense.
What he is really doing is applying rigid logicality to a situation in which everybody has acquiesced, in a major degree, to illogicality for a long period of time. So I ask the noble Lord, who has shown great perspicacity in handling this Bill, to have some regard to the arguments of the noble Lord, Lord Goodman, who is not speaking against decontrol of these houses but merely against the helter-skelter of immediate decontrol. It is no good saying people can afford to pay £4 or £5 and they ought to be paying that by now; certainly they ought, but it would have been better for everybody concerned if this had been organised over a long period of time. To inflict these changes abruptly, because of some kind of legalistic pedantry, on the kind of people who occupy these houses and on the kind of houses we are dealing with seems to me far away from the pragmatic reality that we require.
May I add a word about landlords? I feel that landlords are entitled to justice too. The noble Lord who argued that point is absolutely right. But I have to say that here the balance is overwhelmingly for protection of the tenant, to allow these tenancies to flux over a period of time. The landlord has many uncovenanted benefits arising out of inflation. When a house becomes free he realises a price quite out of line with his wildest expectations in the past. I think the Committee could make this concession to these 200,000 old and poor tenants and feel fairly confidently the comforting assurance that their landlords will continue to remain among the less spectacular examples of malnutrition in our land.
Lord SANDFORD: The noble Lord, Lord Goodman, is recognised in all

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circles, inside the House and outside, as being a great authority in the field of housing, and we are all indebted to him for a number of things besides that of fathering the rent officers. Of course, we listen to his arguments in this field with all the more respect because of that, and also because he adds always to the cogency and substance of what he has to say all the skills and arts of advocacy which are such a pleasure and joy to listen to.
But I have to say that in respect of the proposal included in this clause all the housing associations, 300 of them, embraced by the Association of District Councils are now in favour of the change proposed in this clause, the change from controlled to regulated tenancies. And the reason they are all in favour of this is that the situation, which was inequitable from the point of view of the landlord 20 years ago, has become quite intolerable now, now that inflation is added on top of the inequity that already existed before the inflation began.
The noble Lord, Lord Lever, argued strongly that in thinking about the landlord and the tenant it is the tenant who is frail and old and vulnerable and the landlord who can stand on his own feet and look after himself. My noble friend Lord Bellwin has sketched out a profile of the landlords we are talking about in this case, and they are by no means capable of carrying out the duties one would expect of landlords, because they simply have not had the means and they have been deprived of the means for some 20 years.
On the other hand, the tenants, for whom, of course, we must show proper concern and care and compassion, in this respect have all the benefits of being able to apply for rent rebates and rent allowances; this protects them very largely against any of the increases that would arise from making the change from controlled to regulated rents. For this reason I myself, and I think most of my noble friends on this side, feel that the Government are absolutely right to take the occasion of this Bill to bring to an end a situation which has for so long been intolerable and cannot be allowed to drift on for years and years further.
Lord EVANS of CLAUGHTON: If I may very briefly speak in warm support of Lord Goodman's proposal, I would say, as other noble Lords have said, that very many of the landlords involved are small landlords owning two or three houses, elderly people themselves with problems of their own. But what we must not forget—and this has not been mentioned yet in the discussion—is that, almost by definition, the houses under this kind of control are houses that were built many years ago; they were houses built at a very low price by today's standards, perhaps an average cost of £200, £300, £400. Even if the landlord today is not getting the kind of return that will enable him to spend his holidays in the South of France, he really has had, either directly or indirectly, his money back on the original investment. It is only latterly that the cost of repair and so on has cost him money, and there are provisions for increases for the cost of repair. So we should not forget that we are dealing with houses that are fairly old, houses that were erected at low cost in most cases, and we are dealing with a position that is not quite as heartrending as the noble Lord, Lord Bellwin, made it out to be from the landlords' point of view.
We must remember, as the noble Baroness, Lady Birk, said, that in spite of the disadvantages to the landlord which Lord Bellwin pointed out, these houses under this kind of control are still saleable as an investment. It is interesting that very often when a sitting tenant wants to buy one of these houses the price the landlord puts on this wasting asset that is of no use to him at all is often a very high price and well beyond the pocket of the tenant who wishes to buy. Very often it is a tenant who wishes to buy who has himself or herself—and I can think of a lot of cases in the area I represent as a councillor—done all the repairs, externally and internally, all the painting, has produced all the amenities, added inside lavatory, inside bathroom and introduced hot water, at no cost to the landlord. For in spite of the fact that, according to the noble Lord, the house is a total dead loss, the landlord still thinks that it is worth £4,000, £5,000, £6,000, £7,000.
So it seems to me that while one has sympathy with the landlord, the balance

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of sympathy, the balance of concern, must be with the tenant who has, perhaps himself and his family, lived in the house for many years, has paid a rent earlier which was a substantial rent and is now, because of inflation, not so substantial, and has spent a lot of his own money in keeping the repair and condition of the premises up to a reasonable standard. It is on those grounds that from these Benches I hope your Lordships will give support to the proposal by the noble Lord, Lord Goodman, that this clause should be left out.
Lord BELLWIN: Perhaps I can briefly comment on one or two of the observations made, because we have spent a long time on this clause and there is so much to do. I will comment briefly before the noble Lord himself winds up. The points made by the noble Lord, Lord Evans, I really cannot possibly accept at all. He talks about the fact that the tenants themselves have done repairs. My hat!, if I were a landlord receiving £1 a week how could I get the money to do the repairs, especially if I were in the category of the people I have described who really do not have resources? With £1 a week coming in and with premises to maintain, how on earth could I afford to do the repairs? The fact is that they cannot afford to do the repairs. This is not something that has just happened in the last few years: it has been going on for a long time now, and I mentioned a committee which nine years ago said that all of these tenancies should come out of this form of control. This is not something that has just taken place.
The noble Lord also said that the landlord has had his money back over the years. Noble Lords can do some calculations, but at £1 or £1·50 a week, less certain repairs which would have to be done—well, I do not know how much money he could have had back. In any case, I am not making the case at all for the landlords; I am making the case on behalf of the tenants. For every one who has had to do something himself or who has had to have the landlord do something, how many more have been unable to do so? Is that a contribution that will add to the quality of the stock of houses in this country?
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Are we really prepared to say that, because of any of the points that have been made, we shall continue to allow people to live in houses for which they pay £1 or £1·50 a week?—people who are in the category that we have been told about and whom I have mentioned. They are also entitled to something and we are proposing to give them the protection of the Rent Acts—the very Rent Acts (if I may give the noble Lord credit again) which were partly the brainchild of the noble Lord, Lord Goodman, himself.
Do not the regulations give protection? If they do not, what does? Why should there be this difference between those 200,000 people and all the others? Some 800,000 tenants have in recent years come out of that form of control into the existing form of regulation and there has not been the trauma that we have been told will take place. They have fitted into the scene and they have been absorbed. They are paying rent, if they can afford it, and if they cannot they are receiving rent allowances, and I hope that more of them will get them. That is the nub of it. I cannot for the life of me see how we can want to go on condemning these people at the rate of some 1,250 a year—if last year's figures are any guide—to go on living in the conditions that they must be living in with tenancies of this kind. I hope that certainly enough of your Lordships will accept this case in which I believe very, very deeply.
4.24 p.m.
Lord GOODMAN: With the leave of your Lordships, I should like to make two very brief points. The first point concerns the question of the period of time over which the wastage will take place. I do not think that it is of great importance if this situation continues for a great many years and if there are a few wretched tenants continuing to survive in these circumstances year after year. I cannot think that that will cause the country to be profoundly disturbed or injure our economy in any way.
Further, there is the point which I made when I spoke originally; namely, that the degree of wastage is now much influenced by the removal of the second transmission and we would have to see what effect that might have over the years. I think that it would greatly increase the

541
rate of wastage, but if it does not, I do not think that it is of great importance.
Another matter is that I should like, with the deepest love and affection, to dissociate myself from the views that have been expressed about the adventitious profits that tenants, proprietors, may make by purchasing these premises. I am not remotely concerned with that aspect. In fact, it is an argument which I wish to use to my own advantage. We live in a society where adventitious advantages are available to a great many people. I should be very sorry indeed if the day comes when, in this country, the chance of making money by a bit of luck disappears altogether. Hence, if a few landlords contrive to make a profit to which they are not entirely justified by the views of the bar of Heaven, that leaves me totally unconcerned. Therefore, if a few tenants are enjoying the side benefit because of a chance that some legislation was not earlier repealed, I think that it is a benefit to which they, too, are entitled. I hope that the Committee will take a wise and benevolent view in that regard and will consider that that sort of chance is the chance that makes a democratic society the sort of world in which we wish to live.
I beg of your Lordships to have a sense of proportion. There were, according to the Minister—who generously conceded this—5 million of these tenancies. There are, if I may say so, 200,000 left and that represents 4 per cent. The remainder, 4,800,000, have vanished; they have disappeared. He said that it was the intention of Richard Crossman and the Government to decontrol them 15 years ago. That may well have been so, but they were not decontrolled 15 years ago, 14 years ago, or even 13 years ago. There was no decontrol—until the attempt which is being made at this moment. I should imagine that some conscientious official in the Department of the Environment suddenly reached into a pigeonhole and said, "My heavens we promised to decontrol these 15 years ago and we have
not done so. We had better hurry up or there won't be any left "!
In my view it is a total absurdity to make an issue about this, but it is also an act of gratuitous cruelty. The Minister has spoken about the suffering of the landlord and the discomfort of the landlord. I would invite him to attend at a neighbourhood law centre at any time to see the anxiety and concern of these 200,000 people about any attempt to change the conditions of their tenancy, which they will never understand. We shall inflict a totally unnecessary and gratuitous cruelty on people for no benefit whatever.
Perhaps I may venture to quote some of the few words of Latin that I know. Cui bono—to whom is there any benefit by this decontrol? The notion that the landlord will benefit, the idea that he will now secure sufficient money in order to convert these hovels into palaces, is Gilbertian; it is farcical in the extreme. These people will continue to live under the same slum conditions and in the same state of disrepair as they have alway lived. The only change will be that 200,000 tenants will have to be visited by the rent officers, which will cause them trouble and anxiety quite unnecessarily.
I venture to ask the Committee to display compassion and sympathy in this regard and not to be carried away by a bureaucratic concern for consistency in the belief that 15 years ago somebody said that something would happen that has not happened. It would redound greatly to the credit of the Committee and the Government if they could be persuaded to leave these controlled tenancies until they disappear by the effluxion of time.
4.27 p.m.
On Question, Whether Clause 63 shall stand part of the Bill?
Their Lordships divided: Contents, 100; Not-Contents, 90.

CONTENTS

Adcane, L.

Belstead, L.

Braye, L.

Airey of Abingdon, B.

Berkeley, B.

Brentford, V.

Allerton, L.

Bessborough, E.

Cathcart, E.

Alport, L.

Blake, L.

Chelwood, L

Amory, V.

Boyd-Carpenter, L.

Clitheroe, L.

Bellwin, L.

Bradford, E.

Clwyd, L.

Cork and Orrery, E.

Hawke, L.

Nugent of Guildford, L.

Craigavon, V.

Henley, L.

Orr-Ewing, L.

Cullen of Ashbourne, L.

Hood, V.

Redmayne, L.

Davidson, V.

Hornsby-Smith, B.

Reigate, L.

de Clifford, L.

Hylton, L.

Renton, L.

De Freyne, L.

Killearn, L.

Richardson, L.

Denham, L. [Teller.]

Kimberley, E.

Rochdale, V.

Digby, L.

Lindsey and Abingdon, E.

Romney, E.

Drumalbyn, L.

Long, V.

Saint Oswald, L.

Duncan-Sandys, L.

Lucas of Chilworth, L.

Sandford, L.

Ebbisham, L.

McFadzean, L.

Sandys, L. [Teller.]

Effingham, E.

Macleod of Borve, B.

Selkirk, E.

Ellenborough, L.

Macpherson of Drumochter, L.

Sempill, Ly.

Elles, B.

Malmesbury, E.

Skelmersdale, L.

Elliot of Harwood, B.

Margadale, L.

Soames, L. (L. President.)

Elton, L.

Marley, L.

Spens, L.

Faithfull, B.

Monckton of Brenchley, V.

Strathcarron, L.

Ferrers, E.

Monk Bretton, L.

Strathclyde, L.

Ferrier, L.

Morris, L.

Strathspey, L.

Fortescue, E.

Mountgarret, V.

Swansea, L.

Gainford, L.

Mowbray and Stourton, L.

Swinfen, L.

Gisborough, L.

Moyne, L.

Trumpington, B.

Glenkinglas, L.

Murton of Lindisfarne, L.

Vaux of Harrowden, L.

Godber of Willington, L.

Newall, L.

Vickers, B.

Gore-Booth, L.

Norfolk, D.

Vivian, L.

Gowrie, E.

Northchurch, B.

Ward of Witley, V.

Gridley, L.

Norwich, Bp.

Young, B.

Halsbury, E.

NOT-CONTENTS

Ampthill, L.

Goodman, L. [Teller.]

Mishcon, L.

Ardwick, L.

Gordon-Walker, L.

Oram, L.

Avebury, L.

Goronwy-Roberts, L.

Pargiter, L.

Aylestone, L.

Greenway, L.

Peart, L.

Banks, L.

Greenwood of Rossendale, L.

Pitt of Hampstead, L.

Barrington, V.

Grey, E.

Ponsonby of Shulbrede, L.

Beaumont of Whitley, L.

Hale, L.

Porritt, L.

Beswick, L.

Hampton, L.

Ritchie-Calder, L.

Birk, B.

Hanworth, V.

Rochester, L.

Blease, L.

Hatch of Lusby, L.

Ross of Marnock, L.

Blyton, L.

Henderson, L.

Rugby, L.

Boston of Faversham, L.

Hooson, L.

Sainsbury, L.

Bowden, L.

Houghton of Sowerby, L.

Segal, L.

Brockway, L.

Hunt, L.

Somers, L.

Bruce of Donington, L.

Hylton-Foster, B.

Southwark, Bp.

Bvers L.

Ilchester, E.

Stedman, B.

Collison, L.

Irving of Dartford, L.

Stewart of Alvechurch, B.

Cudlipp, L.

Jacques, L.

Stewart of Fulham, L.

David B.

Janner, L.

Stone, L.

Davies of Leek, L.

Jeger, B.

Strabolgi, L.

Denington, B. Diamond, L.

Kissin, L. Lee of Newton, L.

Strauss, L. Taylor of Mansfield, L.

Donaldson of Kingsbridge, L.

Lever of Manchester, L.

Underhill, L.

Elwyn-Jones, L.

Listowel, E.

Wallace of Coslany, L.

Evans of Claughton, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Wells-Pestell, L.

Fisher of Rednal, B.

White, B.

Fraser of Kilmorack, L.

Lloyd of Hampstead, L.

Willis, L.

Gaitskell, B.

Lovell-Davis, L.

Winterbottom, L.

Gifford, L.

McGregor of Durris, L.

Wootton of Abinger, B.

Gladwyn, L.

McNair, L.

Wynne-Jones, L.

Glenamara, L.

On Question, amendment agreed to.

Resolved in the affirmative, and Clause 63 agreed to accordingly.
Clause 64 [Resident landlords]:
[Amendments Nos. 140 to 143 not moved.]
Clause 64 agreed to.
Clause 65 [Amendment of Cases 11 and 12 of Schedule 15 to Rent Act 1977]:
4.36 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 144:
Page 46, line 5, at end insert—
(" (3A) In Case 12 for the words from the

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beginning to" employment let "there are substituted the words" Where the landlord (in this Case referred to as "the owner") intends to occupy the dwelling-house as his residence at such time as he might retire from regular employment and has let"").
The noble Lord said: This is a minor amendment to Case 12 of Schedule 15 to the Rent Act 1977, which deals with retirement homes. Case 12 provides that a landlord who acquires a house with a view to retiring there may let it with a clear right to repossession when he retires. As Case 12 is drafted, it could not be used to let a house that the landlord inherited. This is because "acquiring with a view to occupying" is an active concept whereas "inheriting" is a passive one.
This seems to us to be wrong. It seems to us quite possible that someone who, for example, inherits his parents' house, may wish to let it until he retires there. Indeed we have had representations to this effect. There seems no reason why he should not be able to use Case 12 in those circumstances.
That is what this amendment will allow for. It will remove the requirement for the use of Case 12 that the landlord acquired the house with a view to retiring there. The criterion will be that the landlord intended to retire to the house at the time the letting was made. I beg to move.
Baroness BIRK Baroness BIRK moved Amendment No. 145:
After Clause 65, insert the following new clause:
" Amendment of 1977 Act
(" . For section 9 of the 1977 Act (holiday lettings) there is substituted the following section—
9.—(1) A tenancy is not a protected tenancy if the purpose of the tenancy is to confer on the tenant the right to occupy the dwelling-house for a bona fide holiday.
(2) For the purposes of this section, a letting shall not be taken to be for the purpose of a bona fide holiday unless the landlord had reason to believe that the tenant proposed to use the dwelling-house for a holiday.
(3) Notwithstanding anything in any agreement, the burden of proof that a
546
letting was for the purpose of a bona fide holiday shall lie on the landlord.
(4) For the purpose of this section, "holiday" means a period of cessation of work, or recreation, and does not include a working holiday.")
The noble Baroness said: In moving Amendment No. 145 I should, with the leave of the Committee, like to speak to Amendments Nos. 146 and 147. These three amendments are designed to close three of the most notorious loopholes in the 1977 Rent Act under which some unscrupulous landlords have been able to charge extortionate rents and evict the tenants at will.
In the absence of any security of tenure, tenants who take such lettings, usually because they are desperate for accommodation and have nowhere else to go, are in these instances at the mercy of the landlord whenever he wishes to charge a higher rent. They do not have their rents registered by the rent officer as normal secure tenants do, and if they challenge their landlord's rent charges as excessive they are, not unnaturally, likely to find themselves evicted and homeless.
The tenants who are the victims of these devices are living under legal conditions which no Member of your Lordships' House would accept for one moment for himself, or even for other people, as equitable or reasonable. By passing these amendments we can make a significant contribution to easing some of the anxieties and distress caused by these abuses.
I know that the noble Lord the Minister will point out that the rent review started under the last Government and went on for a long time. He would be quite right. Nevertheless, we were aware of these problems and were hopefully seeking to do something about them. It is not a point that I am just raising with this Government but something which had been going on before.
The first amendment deals with holiday lettings. These are increasingly being used in the most improbable places for holidays. There are advertisements in London's evening papers every day offering a series of supposed holiday lettings in areas as unlikely as Kilburn, Hackney, and Brixton. This is not to cast any aspersion on these places, but I am not

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sure that people will go to them for a holiday.
By calling a tenancy a holiday letting, the landlord is able to evade the current framework of the Rent Acts, which were really designed to exclude accommodation genuinely used for authentic holiday lettings. Unfortunately, the wording of the current legislation is open to abuse and has been exploited for purposes far removed from the original intentions of Parliament. It is only fair to say that if an Act of Parliament permits abuses, people will take advantage of that because they are acting within the framework, if not within the spirit, of the law.
Amendment No. 145 is designed to clarify the issue by making it clear that the letting must be used for bona fide holiday purposes that fall outside the normal provisions applying to the security of tenants. This would enable landlords who are genuinely letting accommodation for holiday purposes to continue to do so, but would stop those who are abusing the framework of the law and using it for continuous unregistered lettings at any price they wish to charge.
Amendment No. 146 deals with the bogus bed and breakfast arrangement, what was referred to in another place by Mr. Geoffrey Finsberg as "the cornflakes syndrome." Under this, landlords can again deny the security of the Rent Acts to tenants by claiming they are providing bed and breakfast, even if the breakfast consists of no more than a weekly supply of packets of cornflakes. The amendment is designed to close this loophole by deleting the word "board" from the relevant section of the Rent Act 1977. It will still leave the landlord who is providing genuine attendance, as occurs in bona fide bed and breakfast hotels and lodgings, free to let without the tenant enjoying security.
Amendment No. 147 deals with licences, the third of the commonly exploited loopholes in the 1977 Act, which enables landlords to deny security to tenants by requiring them to sign an agreement under which they do not enjoy the right to exclusive occupation of their room or rooms and gives the landlord the right to share the accommodation. By this shared accommodation, the occupant
548
becomes a licensee rather than a tenant, even if, as is often the practice, the landlord has no intention of sharing the accommodation, but simply uses this legal device to deny security to the tenant. This amendment covers that loophole by providing that in such circumstances the occupants shall be deemed to be joint tenants.
These three amendments will together have the effect of closing the door on some of the most flagrant abuses, which have increased—this applies particularly to holiday lets—in the last two years. However, they will not restrict the reputable landlord who genuinely offers holiday lettings or bed and breakfast. Given the acute shortage of accommodation in many housing stress areas, people who are desperate for accommodation do not really have a choice to refuse lettings, even when they are made on such clearly inequitable terms as those I have outlined.
I should have thought the Government would welcome this series of amendments, for there is no doubt that if these loopholes are allowed to continue they will be used in preference to the shorthold tenancy if the option still remains open. I therefore hope the Minister will see the amendments as a way of strengthening the shorthold plans of the Government. As the Government have reiterated their concern for the interests of tenants, they must accept the logic of this series of amendments and I therefore hope we shall receive a favourable reply from the Minister.
The Earl of KINNOULL: Before my noble friend replies, may I ask the noble Baroness, Lady Birk, to explain precisely how the loophole she dealt with will in practice be stopped by the amendment? She said that the onus as to whether or not it is a holiday letting will lie on the landlord, and I presume the landlord will have to produce a form and invite the tenant or occupant of the holiday letting to sign that form. Surely it is a little tough on any landlord, however proper he is or however genuine the cause, other than for him to accept some undertaking from the tenant that it is actually a holiday letting. I therefore wonder whether what the noble Baroness is proposing would ever work in practice; in other words, whether the amendment would hold tight in a practical market.
Baroness BIRK: At present the whole thing is completely wide open, and by restricting it to a bona fide holiday letting, the landlord would have to show that it was his practice to let for holidays. It would not be a holiday letting in some of the cases with which I had not intended to weary the Committee. For example, consider the case of a woman who took a furnished bedsitter for £18 a week and signed a four-month agreement which had a clause stating that the accommodation was a holiday letting. She then signed at least one more four-month agreement, and then continued to pay the rent weekly, getting ordinary receipts. She had been in this holiday let for about 20 months, in the meantime having married. She then became pregnant and was seeking other accommodation, but could not find alternative housing. The landlord agreed to extend their stay if they paid a higher rent. I do not think that by any stretch of the imagination one could call that a holiday letting. I am not saying that anything one does by way of legislation will necessarily be entirely foolproof, but surely we can tighten the law to the extent that I have explained. The case I have described could not, I think, happen if the amendment were accepted.
Lord DIGBY: Surely one of the results of this measure will be that landlords will no longer have to look for such loopholes because there will be shorthold tenancies. I believe that putting the onus on the landlord to ensure that what the tenant says is correct is adding to the complications. We know how difficult holiday lettings are anyway, and I should have thought that what the noble Baroness proposes is unnecessary at this stage so far as holiday lettings are concerned.
Baroness BIRK: Holiday lettings are not registered. As we have discussed during the passage of the Bill, the rent of shorthold lettings are registered, so there is that difference and there would still be a big advantage in having a holiday letting licence.
Lord JANNER: I support the amendment. Those of us who have been connected with the question of lettings and protection are, first, appalled by the actions which the Government are taking, and I do not entirely agree with my noble
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friend Lady Birk when she talks about helping shortholds. Personally, I believe that shortholds will prove a damned nuisance and will be an awful business. Many landlords have twisted and twirled the law in such a way that houses have become decontrolled and consequently put on the market, and I shall have more to say about that at a later stage, particularly when we come to the question of flats and so on.
We must have human hearts about this whole issue. If you decontrol a place, you are really taking out of the hands of the public as a whole opportunities of letting. It is all very well talking about what has prevented lettings, but there are methods by which the existing provisions can be avoided. Indeed, they have been avoided by very many unscrupulous landlords, and I am not talking about the whole lot of them. There are some with human hearts, just as there are on this side of the Committee and a few on the Benches opposite. Problems arise because of the twisting of possibilities in such a way as to produce decontrol and thereby to produce fewer opportunities for people, simply because some can and do exercise—to put it in plain language—the sort of gimmicks that have been described in order to avoid the Act as it stands. I hope that the noble Lord, even if he is not prepared to consider these amendments, will at least consider meeting the situation to which my noble friend and I have referred.
4.50 p.m.
Lord BELLWIN: I should like to deal with Amendment No. 145 first. It relates to the first of three proposed new clauses designed to close Rent Act loopholes. This one is concerned with the problem of so-called bogus holiday lets. Of course I do not condone attempts to evade the provisions of the Rent Acts by pretending that a letting is for a holiday, when it clearly is not; nor as I understand it do the courts. But I think that the main reason that some landlords have resorted to devices of this kind is that the terms of the existing legislation have discouraged them from letting on fully protected tenancies. Heaven knows!, one does not condone attempts to evade the provisions, but it does no harm to look at some of the causes behind these matters.

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The way that this amendment seeks to deal with the problem of bogus holiday lets is to replace the present Section 9 of the Rent Act 1977, which states that a letting is not a protected tenancy if the purpose of the tenancy is to confer on the tenant the right to occupy the dwelling-house for a holiday, with a more complicated provision, so that a tenancy is excluded from Rent Act protection only if the tenant is on a bona fide holiday. It would he for the landlord to prove that a letting was for the purpose of a holiday, and a holiday would have to be a period of recreation. A working holiday would he excluded.
I am afraid that I am not convinced that this would he satisfactory. First, is there really a difference between a holiday and a "bona fide" holiday? Secondly, how can a landlord prove that someone who claimed to be taking a holiday really was? Flow is the landlord to tell whether the tenant means what he says? Is it fair that someone who took a holiday cottage for a fortnight, pretending that it was for a holiday, should become a fully protected tenant, with life-long security and the right to apply for a fair rent, because he never in fact intended to have a holiday at all? Then there is the fact that a working holiday is not to count as a holiday at all. I am sure that many noble Lords are all too familiar with the idea of a working holiday. I think that they would find it difficult to rent a holiday cottage if this amendment were accepted. If I were a landlord I should not be prepared to let my holiday cottage—if I had one—to someone who could claim lifelong security and the right to a fair rent by writing an article or doing some academic research quite unbeknown to me.
I hope that I have said enough to convince the Committee that this clause would not be workable, or fair. It is not practicable, although of course I sympathise with the sentiments behind it. There is no reason why a tenant who considers that he has a bogus holiday letting should not go to the rent officer to apply for a fair rent to be registered. As I have said, it is the Government's view that the solution to the problem of attempts to evade the Rent Acts by devices such as bogus holiday lets is to encourage landlords to let within the
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Rent Acts. That is why we are introducing shorthold.
I turn now to Amendment No. 146. This new clause seeks to close the so-called "bed and breakfast" loophole in the Rent Acts. It seeks to do so by the means that the noble Baroness, Lady Birk, mentioned, and which in the interests of saving time I shall not repeat. What the amendment proposes does not seem to me to be right. If a landlord comes to a genuine agreement with a tenant that he will supply him with accommodation including board, it does not seem to me to be fair that the landlord could thereby find himself obliged to supply not only the tenant with board for the rest of the tenant's life, but also the statutory successors of the tenant as allowed by the Rent Act. I think that noble Lords will agree that arrangements where board is provided are different from the kind of lettings where Rent Act protection is appropriate. It is important to maintain this distinction, even if there have been attempts to circumvent the Rent Acts by claiming that hoard was provided as the result of a minimal provision of food requiring no preparation.
As I said in discussing the last amendment, it does not follow that a letting is not a protected tenancy because the landlord says that it is not. It is always open to the tenant to challenge this by going to the rent officer or rent tribunal for a rent to be fixed; and in the last analysis only the court can determine if a letting is a protected tenancy. Basically the whole problem arises because in some places there is a shortage of accommodation to let. However, we are trying to reverse that trend and, if we succeed, there will be little scope for loophole lettings. I do not think that it would be right to bring within the Rent Acts a whole host of letting arrangements, where the Rent Acts may be totally inappropriate, in order to close this loophole. That would be rather like throwing out the baby with the bathwater.
Finally, I come to Amendment No. 147, which seeks to close another so-called Rent Act loophole: the non-exclusive sharing agreement. This loophole depends on the fact that one of the conditions for full Rent Act protection is that there must be a tenancy. The distinction between a licence and a tenancy derives

553
from common law, and is a fundamental feature of the law of landlord and tenant. I do not think it is necessary to go into this complex area in detail. The important point is that, for there to be a tenancy, the tenant must have what is called "exclusive possession"; that means the right to occupy on his own, and to exclude anyone he does not want. If the agreement allows the landlord himself to share with the tenant, or to nominate that someone else can share with the tenant, that is prima facie evidence that the agreement is a licence rather than a tenancy, because there is no exclusive possession.
However, I must stress that it does not follow that someone does not have Rent Act protection because the landlord makes him sign a purported licence agreement. This is something that can be settled definitively only in the courts, and the courts will consider the intention of the parties at the time that the agreement was made. There have been four cases in the Court of Appeal on the question of whether a licence agreement was genuine or sham. Two were decided in favour of the landlord, and two in favour of the tenants. It is therefore always open to someone to go to court if he does not accept his landlord's claim that he is a licensee rather than a tenant.
I do not intend to go into the details of those cases, although I have the details of them before me. For the reasons given I am not convinced that this clause would in fact work in practice. In my view there are two ways of tackling the use of licences to evade the Rent Acts. First, it is important to remember that because an agreement says that it is a licence, and so is outside the Rent Acts, it does not follow that the courts will accept this. Secondly, it seems to me that the initiatives that we are taking in this Bill to encourage landlords to go on letting and to make more accommodation available should mean that landlords will be encouraged to let within the Rent Acts, rather than try to resort to uncertain devices of this kind. I ask the noble Baroness whether in the light of what I have said, she feels able to withdraw the amendment.
4.58 p.m.
Lord GIFFORD: The noble Lord began his reply by saying that he did not
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condone Rent Act evasions or attempts to get round the Rent Acts, and that he sympathised with the intention behind the amendments. I am grateful for that, and I shall come back to it. However, in view of the rest of his remarks on the amendments, and his lack of any kind of constructive comment, I began to feel that he really has not understood what is happening both in the big cities when these agreements are negotiated, and indeed in the courts when these agreements are challenged.
The person who answers an advertisement for what appears to be a letting may be confronted with having to sign a document which appears to be all very official and proper, and has fine Gothic printing at the top, stating "This licenceߪ" such a person has no idea whatsoever of what is some archaic difference in the law between a licence and a tenancy. Why should he? If two or more people take a letting, and they sign one agreement jointly to pay one rent, they will be joint tenants and will be protected, but if they sign two agreements agreeing to share with each other, with each paying half the rent, they are licensed and are not protected. There is no sense at all in that kind of distinction.
The same goes for holiday letting. People who are in no way on holiday go along to what appears to be a normal bona fide letting. They are presented with an agreement—I have a stack of these agreements with me—which appears to be a perfectly normal bona fide agreement, headed "Tenancy agreement". It has at the side, tucked away, the words, "This is a holiday letting only", which either they may not see or, if they see it, they may be in no position to question.
Your Lordships may say that there is no justice in people who sign agreements in those circumstances not having the normal protection of the Rent Acts, and the noble Lord said that they can always challenge it in court. The trouble when they challenge it in court is that common law has an age-old principle that you are bound by what you agree to; that if you put your name to a contract with all sorts of clauses in it, whether you have read them or not, you are hound by each and every one of those clauses.
Because that is what the common law says, we have in some fields of the law

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introduced legislation—the Hire-Purchase Act, the Unfair Contract Terms Act and matters of that kind—to get round the rigidity of that kind of legal interpretation. In the case of both holiday lets and licences, what the courts have said is, "If they have signed their name to this and if they have not been deceived or 'conned' by any words which deny what is in the document, if it is a perfectly open agreement and the landlord has not actually used any deceit but has just extended it for signature, then such an agreement prevails"; and that is the real problem which these amendments are designed to meet.
May I answer some of the points which have been made—and I take the liberty of answering because I take some responsibility for the drafting of the amendments. The noble Earl, Lord Kinnoull, and I think the noble Lord, Lord Bellwin, as well, asked the question: How does a landlord prove that someone is on holiday? It is not very difficult to ask that person what is his normal address, for instance; and if he has not got a normal address, as a lot of the people who sign these holiday lets have not, then it is obvious that this person is not on a holiday at all. So far as board is concerned—I deal with it very shortly—the normal bed and breakfast, which provides board, is not a tenancy arrangement at all; it is a true licence arrangement which the courts would never call a tenancy and with which they would never interfere.
I come back to the noble Lord's statement that he does not condone evasions of the Rent Act and would seek to close loopholes if he reasonably could. Let me assure him, first of all, that they are going to continue, because at the moment there are two incentives, security and rent control. The shortholds deal with security, but they also impose rent control. Therefore, those who wish to get more money from property than the fair rents will allow—and there are many—can go to solicitors and will be quite legally and properly advised that they can use this form of agreement and, bingo!, you can get double or whatever the market, with all its scarcity elements, will bear.
Since the noble Lord said that that was not something of which he would approve, not something he would wish to see proliferate, will he sit down, between
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now and Report, with those of us who have had experience of these problems, and try to work out a way to combat these abuses? I do not hold to any particular wording, but I do think that this is something which needs to be seriously discussed in a spirit of good will.
Lord BELLWIN: I think that what the noble Lord suggests has merit. Whether that is the best way to go about it, I do not know. I still feel that what I said about the holiday let is absolutely right by itself. As to whether there is more which goes beyond that, which I think is what the noble Lord, Lord Gifford, is saying, I think he is entitled to argue in the light of his considerable experience in this field. I would say to him just what I said yesterday—and it seems so long ago—that I think we should study very carefully what the noble Lord has said. I will speak to those who should be expert in these matters, and if it is felt that it would be helpful to act as the noble Lord suggests, then of course we will do so, because I say again, and will go on saying until the end of this thing, that we want the best Bill we can get.
Baroness BIRK: In view of what the Minister has said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 146 and 147 not moved.]
5.5 p.m.
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 148:
After Clause 65, insert the following new clause:
"Amendment to Schedule 15 to Rent Act 1977
( . The following Case shall be added to the Cases in Part 11 of Schedule 15 to the 1977 Act (mandatory orders for possession)—
"Case 20
Where a person acquired the dwelling-house or any interest therein (he then being a member of the regular armed forces of the Crown) and without occupying it let it on a regulated tenancy and—

(a) not later than the relevant date the landlord gave notice in writing (he still being such a member at the date of the notice) to the tenant that possession might be recovered under this Case, and

(b) the dwelling-house has not, since the commencement date for this provision

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appointed under the Housing Act 1980, been let by the landlord on a protected tenancy with respect to which the condition mentioned in paragraph (a) was not satisfied, and

(c) the court is of the opinion that one of the following conditions is satisfied—

(i) the dwelling-house is required as a residence for the owner or the spouse of the owner;

(ii) one of those in sub-paragraphs (b) to (f) in paragraph 2 of Part V to this Schedule, paragraph 1 where relevant having effect for interpreting those sub-paragraphs.

If the court is of the opinion that, notwithstanding that the condition in paragraph (a) or (b) above is not complied with, it is just and equitable to make an order for possession of the dwelling-house, the court may dispense with the requirements of either or both of those paragraphs, as the case may require.
In this Case "regular armed forces of the Crown" has the same meaning as in section 1 of the House of Commons Disqualification Act 1975."").
The noble Earl said: The purpose of this amendment is to enable members of the armed forces to acquire their own houses. This is not a privilege; this is doing no more than putting them on an even keel with other young people. It is, I think, broadly known that at least 80 per cent. of the young people in this country want to own their own houses, and intend to do so. A recent phone-in television programme, conducted from Cologne to the British Army of the Rhine, showed that this was the incessant demand: that they were virtually excluded from the possibility of buying their own houses, except by some outside chance, and that this is what they wanted. This amendment has to do with mortgage, and I am president of the Building Societies' Association, which I must formally declare. I do not speak for them, but I know that they are in favour of the general lines on which this amendment is couched.
Why cannot servicemen buy their own houses? What are the proposals which we make to enable them to do so? And why is this, as I believe, important? The problem arises from the famous section, Section 98 of the 1977 Act, in which it is said, quite simply,
"a court shall not make an order for possession of a dwelling-house which is … let on a protected tenancy… unless…".
Unless what? This is the point. What must you achieve in order to get round this point? In the 1977 Act there are
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18 cases in which the "unless" (if I may put it in that way) applies. They cover a number of different subjects, and they, so to speak, make a circle round service personnel. They refer to people who occupy houses. Service personnel, by definition, do not occupy houses, because they are provided by the Ministry of Defence. It refers to people who are retired. Service people do not retire. When they have finished their work in the armed forces they go on to do other work, for many years, I hope, very usefully. It refers to ministers of religion. That does not apply, either. None of them fits. But the broad purposes, I must say, are the same in these 18 cases.
The distinctive feature of service personnel is that they live in property provided by the Government, at least practically the whole time, either in barracks or in married quarters, or whatever it may be. Secondly, they are subject to discipline, which means they may have to move anywhere at any time for an indefinite length of time. In this sphere, they are unique members of the body politic of this country. If they want to buy a house, they must first get vacant possession. They must then get a mortgage, and inevitably they must let the house in order to pay the mortgage. In the ordinary way, if they let a house now they would never get it back under section 98, which I have quoted. Not only that, but as a matter of stern and honest fact, with a regulated rent without a break they would never get a mortgage. That is the position they are in. They cannot get vacant possession and hold it unless they give it; and they do not fall under any of the existing cases in Schedule 17 of the 1977 Act.
What we suggest is that there should be broadly the same principle as exists in the other cases, and that when a man serving in the armed forces buys a house with vacant possession he should give notice under what I call Case 20 (as we have here) that he will want it back after he has left the armed forces. This is very similar to the rules in Cases 11, 12 and 15 which we see here. I think it really a ridiculous suggestion that service personnel would turn into haunting ghosts of Mr. Rachman. This is very improbable and is something that we can discard at an early stage.
The reason why the new clause is important is this: the noble Lord, Lord Bellwin, has spoken of the unique service of the armed forces—people who are committed to this vital task and who do so under certain restricted conditions. I believe that this would be of value in recruiting but, what is more important, that it would be valuable in stimulating re-engagement. It is a long time since I had anything to do with the armed forces; but married life is a bane in some ways to many in the armed forces. It presents problems and social difficulties of one sort or another, but the assurance that you have a house to go back to is of enormous importance. Perhaps I may give an example. When a young man talks to a young girl and says those things that a young man says to a young girl, he may then add, "Moreover, I have a house in which we can live together" That is an argument which cannot be used at the present time by the young men in the armed forces. Anyone else can say that, but service people cannot. That is why I say that this new clause is fair, right and, I believe, in the national interest. I beg to move.
Lord GREENWOOD of ROSSENDALE: Having joined with the noble Earl in tabling this amendment, I should like to support it very warmly indeed. The noble Earl declared his interest as President of the Building Societies' Association. I think it will be convenient if I complete my own declaration of interests at this time. I have been declaring them ad hoc as various organisations have come into the discussion but, with a long list of discussions on housing and local government to come over the few months ahead, it will save me a lot of tedium and the Committee a certain amount of time if I complete my declarations today. I am President of the United Kingdom Housing Association, of which I was a co-founder. I am chairman of Greenwood Homes Limited and its associated companies, deputy-chairman of Municipal Mutual Insurance and its subsidiaries, and chairman of a recently-formed company which is engaged in local government research and information. I do a certain amount of consultancy in the planning and housing field; I am a director of the Britannia Building Society and also vice-president of the Building Societies' Association.
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I believe that the logic behind this amendment is absolutely irrefutable. I shall emphasise a little of what the noble Earl, Lord Selkirk, has said. This new clause does not apply solely to servicemen but to servicewomen also. If, for example, a serviceman buys a house during his period of service it is an extremely sensible thing to do. It is sensible provision for the future, it is the sort of duty that he owes his spouse and also a very prudent hedge against inflation. But, supposing that he does so, then, until he returns home or leaves the forces, he has to let it. This is not always an easy thing to do and it is often very inconvenient. for the serviceman or servicewoman Not to put too line a point on it, they do not always know their precise movements in the immediate future; and the difficulty is that if they return to the United Kingdom before the time that they would normally expect to do so then the tenant has the protection of the Rent Acts and the serviceman cannot get possession of the house.
We are proposing that the serviceman should get that possession but at the same time we are providing protection for the tenant because the new clause provides that, before the tenancy is granted, the serviceman should serve notice on the prospective tenant that possession may be recovered under this new clause. That helps the serviceman. I think it helps the tenant for it gives him some protection and it further helps the serviceman by making the proposition more attractive to building societies. They know that if the borrower defaults they can sell with vacant possession at the end of the contractual term of the tenancy. That seems to me to be good justice, I think it makes good sense and I hope that the Minister will feel able to accept the new clause. I have some slight reservations over the drafting. It may not be absolutely perfect, but if the noble Lord could accept the principle I think that the whole Committee would be delighted.
The Earl of BESSBOROUGH: May I, as President of the South-Eastern Association of Building Societies—and I cannot declare quite so many interests as the noble Lord, Lord Greenwood—briefly support my noble friend Lord Selkirk and the noble Lord, Lord Greenwood,

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in what they have said. I feel that there is sympathy for this amendment in all parts of the Committee; even, I guess, on the Front Benches and, I hope, on the Liberal Benches, too. It seems to me that the clause meets the needs of the serviceman and indeed those members of the regular women's services abroad (including, I think, in Northern Ireland) and even in Britain itself. I am glad that the clause is not exclusive and does not only apply to those serving overseas.
The law as it now stands makes it impossible for the serviceman to get possession of the property when he returns home. Under the new clause, he would be able to get vacant possession at the end of the contractual term of the tenancy so that he, his wife and family could then have a permanent home at their disposal. I cannot help thinking that my noble friend Lord Bellwin, who is a very sympathetic man, cannot fail to be sympathetic to this amendment in view of the fact that it appears to have support in so many parts of the Committee. Even if the new clause may need some redrafting, I hope that he will be able to accept the principle and perhaps produce a new draft at Report.
Baroness BIRK: Speaking as a spokesman for Her Majesty's Opposition in your Lordships' House, I certainly would not oppose the new clause which has been moved by the noble Earl. I was touched by his romantic story of love and property which added to his persuasive powers in support of this clause.
Lord HILL-NORTON: May I add a few words in support of the noble Earl, Lord Selkirk. I have no interest in building societies. If it is necessary to declare any interest, I may say that I am still on the active list of the Royal Navy. I should like to say to the Committee, from my own long and indeed current experience, that there is no question that anything which helps service people, male or female, to own houses is good news. It is good news for them; good news for the people running the services, and, therefore, good news for the country. It has been said, although not said in this Committee today, that other people may have to move about—young executives, members of the foreign service and so on. But I maintain that service people deserve
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special protection because of their unique conditions of service, which often compel them to move without the chance, which is usually available to civilians, of refusing to move or changing their job so that they do not have to move.
There is no question about it. As the noble Earl, Lord Selkirk, said, the knowledge that one has a secure base to return to in the end enhances the stability and happiness of service families. That above all greatly increases the retention factor which is so important. The cadre and corps of the services are the trained men, the married men, and they are the people whom we want to keep. They are the people to whom this amendment will be particularly attractive.
5.21 p.m.
Lord BELLWIN: I need hardly say that noble Lords on all sides of the Committee are very much pushing at an open door with this amendment. I have great sympathy with it and what noble Lords have said about it. Service in the armed forces of the Crown imposes very special obligations on people. The Government accept that there may be a case for singling out servicemen serving overseas who may have particular difficulties in obtaining a house of their own in the way that this new clause proposes.
I gladly undertake, first of all, to give this matter careful consideration and I shall draw the attention of my right honourable and honourable friends to what noble Lords have said. As the noble Lord, Lord Greenwood, intimated, I am afraid that I could not accept the clause as it stands because of technical drafting reasons. It is only right that my right honourable and honourable friends and I should consider carefully the exact scope of such a provision. That there is sympathy, that there is a wish to have something along these lines, is unquestioned. It is with considerable pleasure that I confirm that we will take this away for consideration. In those circumstances, perhaps the noble Earl may feel able to withdraw the amendment.
The Earl of SELKIRK: I should like to thank the noble Lord very much for what he has said. He had certain restrictions but I hope that he will not restrict this only to persons serving overseas.

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This is necessary just as much for people in this country. They are provided with Government accommodation and they are working under discipline. They may go overseas at any time. So I hope that this will not be a restriction. I should like to thank those who have supported this amendment. I am glad to have drawn the noble and gallant Lord, Lord Hill-Norton, into the Committee stage. I think it is the first time he has taken part in it. I am glad to know that the noble Baroness, Lady Birk, is sensitive to romantic arguments. I will always bear that in mind in future, if I may do so. I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Schedule 7 [Amendment of Schedule 15 to 1977 Act]:
5.23 p.m.
Lord EVANS of CLAUGHTON Lord EVANS of CLAUGHTON moved Amendment No. 149:
Page 109, leave out lines 32 to 49 and insert—
(" In any case where the owner, or his successors in title, wish to rely on (a), (b) or (c) above they shall give notice to the tenant and to the local authority in whose area the dwelling house lies, not less than 12 months before the date at which they wish to assume or resume occupancy.").
The noble Lord said: It seems to me that while I do not have the distinction of other noble Lords who have spoken about their presidencies and vice-presidencies, I have had a very rude letter from the noble Earl's Building Societies Association telling me how wrong I am about this one. I had better declare that kind of interest. They are writing to me about paragraph (e) which I seek to exclude from the Schedule.
I welcome the general exceptions (a),(b) and (c). As I have said in my amendment, I should like the tenant who confronts the problem of being required to leave the house to have some warning and protection. That is why I seek to add the words in my amendment so that he will have at least 12 months' notice of the intention of the owner to reoccupy the property. It is clear to all of us that if one is a tenant of a house it is not very easy at short notice to make other arrangements. That is why I have added the words to my amendment. The reason I
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seek to delete lines 32 to 49 is that, while I welcome the general changes in the conditions, the Government, for once, have been too liberal in their attitude to an owner.
It is perfectly proper that if the owner wants to return, if the owner has retired or his family want to come back to the property, that is fair enough. They should be allowed to reclaim possession. It is stretching it a little far if the successor in title, who by the definition of this schedule is not the family of the owner, but possibly some other relative, should be allowed to take advantage of this amendment.
Leaping rapidly over paragraph (e) to paragraph (f), it seems to me too generous if the landlord could make the reason for requiring the dwelling-house that it is not reasonably suitable to the needs of the owner, having regard to his place of work, and he requires it for the purpose of disposing of it with vacant possession and of using the proceeds of that disposal to buy another house. That seems an enormously elastic exception which almost creates the right of an owner to return to the property almost at will.
I should like to mention briefly paragraph (e) which has put me in trouble with the noble Earl's association. I take the point which they make in their letter to me. The new paragraph (e) will assist building societies in making mortgages available to absent owners. The point I originally would have made was that if you give me a choice between causing discomfort or difficulty to a mortgagee as against difficulty to a tenant, I would rather that the mortgagee suffered the difficulties. I take very much to heart the remarks made by the Building Societies Association that inclusion of paragraph (e) facilitates the granting of mortgages to absent owners.
Therefore, I should like to try and persuade the Government to consider whether they have not gone too far in their wishes to accommodate absent owners or the successors of absent owners, or absent owners who find it inconvenient to live in the house to which they return, to carry out that function. My concern is that it is driving a carriage and pair through the regulations. It is for that reason that I have sought to move the

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amendment and try and persuade the Government to limit the liberality of their extension to the rights of returning owners. I beg to move.
Lord BELLWIN: Unless the noble Lord, Lord Evans, presses me to do so, I will not go into the arguments on the detailed individual conditions in the order that he enumerated them. None of the changes we are proposing represent a fundamental change of principle. They are all designed to prevent a landlord or his successors from being penalised by a change or circumstances that could not have been foreseen at the time the letting was made. None of them will remove from the tenant any security he would have expected at the start of the letting, because in none of these cases would the changes we are proposing enable the landlord or his successors to regain possession from the tenant any earlier than the original contract made between the landlord and the tenant would have allowed.
I hope therefore that the Committee will agree that conditions (d), (e), and (f) in Schedule 7 should be retained in the Bill. There is however a further restriction on the use of Case 11 and Case 12 proposed in this amendment. This would require the landlord to give the tenant of a local authority at least 12 months' notice of his intention to require repossession.
I fear this would not be acceptable. There may be many circumstances in which the landlord would not be in a position to give a tenant 12 months' notice; for example, if he had to return suddenly from an overseas posting and if the tenant would have known throughout the letting that the landlord might seek to recover possession. I cannot accept these amendments but, if the noble Lord wishes, we could go into greater detail on the individual points he made.
Lord EVANS of CLAUGHTON: Your Lordships will be delighted to hear that I do not wish to go into further details on the various points. I anticipate it would be the case that in the circumstances outlined in the paragraphs to which I have referred, if the tenant had to leave in less than a year the local authority would be required, under the Homeless Persons Act, to rehouse him in any event. As I said, I feel that the Government are
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being a little too generous in their proposals; but, having listened to what the noble Lord the Minister has said, and being absolutely terrified of getting on the wrong side of the Building Societies Association—as a solicitor they could drive me out of business—in the circumstances, seriously, and in the light of what the noble Lord has said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 7 agreed to.
Clause 66 agreed to.
Clause 67 [Restricted contracts: security of tenure]:
5.32 p.m.
Baroness BIRK Baroness BIRK moved Amendment No. 149A:
Page 48, leave out lines 9 to 10 and insert ("granted for a term of years certain.").
The noble Baroness said: In moving Amendment No. 149A, I should like to speak to Amendment No. 149B and to do so as briefly as I can. I have a long and very interesting history of the rent tribunals with me but I will spare or, alternatively, deprive your Lordships of that information unless you insist on hearing it. These amendments will in fact do two things. First, they will continue the operation of rent tribunals for all periodic, restricted contracts. Secondly, they will modify the proposals with respect to fixed term restrictive contracts that currently fall outside the jurisdiction of rent tribunals.
The reasons for supporting these amendments, I suggest, are that, in the first place, the rent tribunals are a better forum for dealing with the sensitive balance of issues involved than county courts. There are no costs and neither party is obliged to hire a solicitor to represent him. I realise, of course, that that is unfortunate for the noble Lord, Lord Evans! Secondly, the county courts will face an increased work-load as a result of other changes in the Bill, and particularly in Chapter 2 of Part I. At the moment, many cases where a period of security is granted by the rent tribunals are not subsequently followed by court hearings. The tenant leaves before the tribunal security expires

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This change will therefore mean more court hearings and more delays. Thirdly, a three-month maximum period of security as envisaged by the Government is, I believe, totally inadequate, as this will probably mean that on average the tenant might get a week or two more than the existing standard period of four weeks for a possession order. Fourthly, it is unnecessarily complex to provide, as the Government plan to do, two separate procedures to deal with a single type of tenancy. The proposal will raise again all the difficulties of determining when a tenancy commences—a problem more difficult than the often informal relationship between a resident landlord and his tenant.
Although rent tribunals have inevitably attracted some criticism on occasions, I believe that, by and large, they are the most respected and least criticised of all the institutions involved in the regulation of private renting; and so I really wonder why the Government now seek effectively to abolish the tribunals. I know the Government argue that the very limited protection of the tribunals is a disincentive to resident landlords to let rooms, but where is there any evidence of this? This particular sector of the rented market is not declining—that is, where there is a resident landlord. It is turning over normally and, if anything, is growing as owner-occupation itself grows. The Centre for Environmental Studies, in their Review No. 5 of January 1979, expand on that very point.
In another place the Minister referred to the tribunal's powers to give up to six months' security or even longer. But what must be remembered is that the tribunals still deal with a range of some more domestic or some more or entirely commercial lettings. It therefore needs a suitable power to meet that range of circumstances. Even so, on average the tribunals give a period of less than three months' security, not six months. It is only in a very small number of cases that they give security of six months or longer. Equally, in a number of cases the tribunals, quite properly, give little or no security at all. I hope that the Minister will accep tthese amendments.
Lord BELLWIN: These amendments are designed to reverse the changes to
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the régime for lettings by resident landlords that we are proposing for new lettings in Clause 67. I must confess that I am somewhat surprised to see these amendments tabled by the noble Baroness. I had believed there was widespread support for the measures that the Government are taking to make it easier for resident landlords to regain possession of the part of their house that they have let. I say I am surprised, because I have looked at the housing policy Green Paper produced by the party opposite when they were in government and indeed when the noble Baroness was herself, I understand, a very distinguished Minister in the Department of the Environment, no less. Perhaps it should he made known that I occupy the office that she previously occupied, I hope with at least partially equal distinction—but perhaps I should not say that.
In case they have not read it themselves or do not remember what it says, I should like to draw attention to part of what it says. I shall do this briefly, although I have it in front of me at length. This is what it says about lettings by resident landlords in chapter 8:
"8.21 It would certainly be too far-reaching to abolish the need for a court order altogether, but there is a strong case for ending the role of the rent tribunal and for improving the procedure for obtaining a possession order".
This Government aeree with what that says, and that is why we are introducing the changes in Clause 67 which this amendment seeks to reverse. I do not want to make a great meal of this, but I do urge the Committee not to accept these amendments and I hope that the noble Baroness may feel able to withdraw them. I believe our proposals for letting by resident landlords in Clause 67 will in fact encourage more people to make available spare accommodation in their houses and, as such, I hope they will be welcomed on all sides by your Lordships.
Baroness BIRK: I should like to look very carefully at what the Minister has said and also to refresh myself as to what we did when in Government. Therefore I will withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 149B not moved.]
Clause 67 agreed to.
Clause 68 [Reconsideration of registered rents under Part V of Rent Act 1977]:
[Amendment No. 151 not moved.]
Clause 68 agreed to.
Clauses 69 and 70 agreed to.
5.39 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 152:
After Clause 70, insert the following new clause:
"Dwellings forming part of Crown Estate or belonging to Duchies
(.—(1) The following section is substituted for section 13 of the 1977 Act:
"13.—(1) Except as provided by subsection (2) below—

(a) a tenancy shall not be a protected tenancy at any time when the interest of the landlord under the tenancy belongs to Her Majesty in right of the Crown or to a government department or is held in trust for Her Majesty for the purposes of a government department; and

(b) a person shall not at any time be a statutory tenant of a dwelling-house if the interest of his immediate landlord would at that time belong or be held as mentioned in paragraph (a) above.

(2) An interest belonging to Her Majesty in right of the Crown shall not prevent a tenancy from being a protected tenancy or a person from being a statutory tenant if the interest is under the management of the Crown Estate Commissioners.".
(2) In subsection (5) of section 19 of the 1977 Act the words (in paragraph (b))"or of the Duchy of Lancaster or to the Duchy of Cornwall" are omitted and at the end of the subsection there are inserted the words "except that an interest belonging to Her Majesty in right of the Crown does not prevent a contract from being a restricted contract if the interest is under the management of the Crown Estate Commissioners".
(3) In section 5 of the Rent (Agriculture) Act 1976 the following is substituted for subsection (1):
"(1) A person shall not at any time be a statutory tenant of a dwelling-house if the interest of his immediate landlord would, at that time—

(a) belong to Her Majesty in right of the Crown or to a government department, or

(b) be held in trust for Her Majesty for the purposes of a government department; except that an interest belonging to Her Majesty in right of the Crown shall not prevent a person from being a statutory tenant if the interest is under the management of the Crown Estate Commissioners.".

(4) In the Landlord and Tenant Act 1954—
(a) the following is inserted at the end of section 56:
"(7) Part I of this Act shall apply where—

(a) there is an interest belonging to Her Majesty in right of the Crown and that interest is under the management of the Crown Estate Commissioners; or

(b) there is an interest belonging to Her Majesty in right of the Duchy of Lancaster or belonging to the Duchy of Cornwall;

as if it were an interest not so belonging.";
(b) in section 21(6) the following is substituted for the definition of "interest not bound by this Part of this Act":
" In this subsection interest not bound by this Part of this Act' means an interest which belongs to Her Majesty in right of the Crown and is not under the management of the Crown Estate Commissioners or an interest belonging to a government department or held on behalf of Her Majesty for the purposes of a government department.".
(5) Schedule 7A to this Act has effect for making certain provisions consequential on this section.").
The noble Lord said: With this, I speak also to the new Schedule (150), which concerns the Crown Estate and the Duchies of Cornwall and Lancaster. It may he convenient to your Lordships if I also speak, as I am doing, on this new clause, as they are so closely interrelated. Later in the Bill there are minor consequential amendments in Clause 77— Amendments Nos. 158 and 159—and also on Schedule 14, Amendment 191, and Schedule 24, Amendment 290, which I shall mention separately when we reach them. Those amendments will give Rent Act protection to short-lease tenants of the Crown Estate Commission, the Duchy of Cornwall and the Duchy of Lancaster.
We estimate that there are respectively 2,000, 1,000 and 200 such tenants, mostly in London. They will, in future, benefit from full security of tenure and they, or their landlords, will be able to apply to the rent officer for the registration of a fair rent. By virtue of being protected tenants, they will also be eligible for improvement grants and be given the right to improve under the new provisions dealing with these matters in the Housing Bill. The provisions of the Rent (Agriculture) Act 1976 and Part I of the Landlord and Tenant Act 1954 will also be applied.
The new clause and schedule were tabled in similar form on the Report stage of the Bill in another place. We had the benefit there of several Members themselves being Crown Estate tenants, and the Secretary of State agreed to withdraw the amendments to allow time for further consultation on the points they raised. This consultation has now taken place. A group of tenants and Members of another place has met with the Crown Estate Commissioners and subsequently with my right honourable friend the Secretary of State. It might be helpful to the Committee if I dealt with some of the points which have been raised and explained why we are proceeding with the amendments, and in what way they have now been revised.
There is, I think, general agreement that there is a need to remove present doubts about the rights and status of Crown Estate and Duchy tenants. It has been the practice of the Crown and Estate Commissioners and Duchies to apply the Rent Acts administratively, but the tenants feel they do not have the certainty which statutory protection provides. The Government's amendments, by formally applying the Rent Acts, will for the first time provide this certainty.
In the light of the representations which have been made, however, we accept that some special provision is needed to modify the normal Rent Act provisions for premiums, to reflect the particular circumstances of the Crown Estate where undertakings were given in relation to current leases. We have, therefore, revised our amendments so that tenants of the Crown Estate and Duchies—unlike previous tenants brought within the Rent Acts—will be able to charge full market premiums on the outstanding term of existing fixed-term assignable leases. For future leases, the Rent Acts will apply in the same way as for other tenancies.
I am also aware of representations to the effect that the Crown Estate Commissioners should be regarded as a public body, and therefore brought within the scope of the tenants' charter provisions in Part I of the Housing Bill, including the right to buy at a discount. I see little merit in entering a legal debate about the precise status of the Crown Estate. The important point is that Part I of the Bill
572
does not, anyway, concern all public bodies, only those—such as local housing authorities—which are statutorily charged with providing housing out of public funds to meet need. The Crown Estate Commissioners are not such a body, and the right to buy provisions are quite inappropriate.
I understand, however, that the Commissioners have agreed that they will implement on an informal basis certain tenants' charter provisions not involving the right to buy; for example, giving tenants information about their rights and obligations. The Government have also been discussing with the Commissioners their policy on the sale of long leases once the Rent Acts have formally been applied. The Commissioners have said that they will be prepared in principle to sell assignable but non-enfranchisable long leases to sitting tenants.
It will be clear from what I have said that this subject is one to which both the Government and the Crown Estate Commissioners have given the fullest consideration. The formal application of the Rent Acts will remove uncertainty about the legal rights of the Crown Estate and Duchy tenants. And the revised provisions on premiums, together with the management undertakings given by the Commissioners, will provide additional benefits over and above those enjoyed by other Rent Act tenants. I beg to move.
Baroness BIRK: I should like to thank the Minister for that explanation, because it was very difficult, just reading the amendment without any explanatory notes, to understand the very important content of it. Subject to my not finding anything displeasing when I read in Hansard the report of what the Minister has said, I can see nothing against the clause.
Baroness FISHER of REDNAL: I, too, found it extremely hard to follow and had difficulty in understanding the noble Lord the Minister, although I appreciate that he is trying to save as much time as possible. Is it correct to understand that there will be no option for them to buy, but that there will be an option for them to sell their leases?
Lord BELLWIN: Yes, that is the position as I understand it. I am glad I that the noble Baroness. Lady Birk, said

573
that it is not a straightforward matter, and the answer that I gave was in good faith. I believe that to be the position.
Clause 71, as amended, agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 150:
Before Schedule 8, insert the following new schedule:
(" SCHEDULE 7A
CROWN ESTATE AND DUCHIES—
CONSEQUENTIAL PROVISIONS
PART I
Rent Act 1977
1. Where a tenancy granted before the commencement of section 70A of this Act becomes, or would but for its low rent become, a protected tenancy by virtue of that section, section 5 of the 1977 Act applies as if in relation to the dwelling-house the appropriate day were the commencement of that section.
2. In Part I of Schedule 15 to the 1977 Act the following is inserted after paragraph (b) of Case 6:
"(bb) the commencement of section 70A of the Housing Act 1980, in the case of a tenancy which became a regulated tenancy by virtue of that section."
3. In Part II of Schedule 15 to the 1977 Act any reference to the relevant date shall (notwithstanding paragraph 2 of Part III of that Schedule) be construed, in the case of a tenancy which becomes a regulated tenancy by virtue of section 70A of this Act as meaning the date falling six months after the passing of this Act.
4.—(I) Part II of Schedule 18 to the 1977 Act applies to a tenancy which becomes a regulated tenancy by virtue of section 70A of this Act (unless it is a tenancy falling within subparagraph (2) below).
(2) Nothing in Part IX of the 1977 Act applies to a tenancy which falls within this sub-paragraph; and a tenancy granted before the commencement of section 70A of this Act falls within this sub-paragraph if—

(a) it becomes a regulated tenancy by virtue of that section; and

(b) it was granted for a term certain and its terms do not inhibit both the assignment and the underletting of the whole of the premises comprised in the tenancy.

(3) For the purposes of sub-paragraph (2) above the terms of a tenancy inhibit an assignment or underletting if they—

(a) preclude it; or

(b) permit it subject to a consent but exclude section 144 of the Law of Property Act 1925 (no payment in nature of fine); or

(c) permit it subject to a consent but require in connection with a request for consent the making of an offer to surrender the tenancy.

PART II
Rent (Agriculture) Act 1976
5. Where the question whether a person is a qualifying worker for the purposes of the Rent (Agriculture) Act 1976 arises by virtue of section 70A of this Act, Part II of Schedule 3 to that Act applies as if the date of operation for forestry workers were the commencement of that section.
6. Where a protected occupancy or statutory tenancy within the meaning of the Rent (Agriculture) Act 1976 arises at the commencement of section 70A of this Act, Cases VIII and X in Schedule 4 to that Act apply in relation to it as if the operative date were that commencement.
7. For the purpose of determining whether, at the commencement of section 70A of this Act a person becomes a statutory tenant for the purposes of the Rent (Agriculture) Act 1976 and of applying that Act to him if he does, paragraph 3 of Schedule 9 to that Act applies as if the operative date were that commencement.
8. Paragraphs 6 and 7 above apply in relation to forestry workers as they apply in relation to other persons and paragraph 7 of Schedule 9 to the Rent (Agriculture) Act 1976 does not apply.
PART III
General
9. Where an interest belongs to Her Majesty in right of the Duchy of Lancaster, then, for the purposes of Part I of the Landlord and Tenant Act 1954, the Rent (Agriculture) Act 1976 or the 1977 Act, the Chancellor of the Duchy of Lancaster shall be deemed to he the owner of the interest.
10. Where an interest belongs to the Duchy of Cornwall, then, for the purposes of Part I of the Landlord and Tenant Act 1954, the Rent (Agriculture) Act 1976 or the 1977 Act, the Secretary of the Duchy of Cornwall shall be deemed to be the owner of the interest.").
The noble Lord said: I spoke to this amendment with the last one. I beg to move.
Schedule 8 agreed to.
Clauses 72 to 74 agreed to.
Schedule 9 agreed to.
Clause 75 [Allowable premiums in relation to certain long tenancies]:
5.45 p.m.
Lord EVANS of CLAUGHTON Lord EVANS of CLAUGHTON moved Amendment No. 153:
Page 53, line 41, at end insert—
("4. In section 127(2)(b) of the 1977 Act leave out from "the sums" to end and insert "either

575

(i) the sums payable by the tenant otherwise than in respect of rates, services, repairs, maintenance or insurance are not, under the terms of the tenancy, varied or liable to be varied within 20 years of the date when it was granted nor, thereafter, more than once in any twenty-one years; or

(ii) if such sums are so varied or liable to be varied, any increases in such sums do not exceed either the ratio between the premium paid on the grant of the tenancy and the premium paid on the most recent assignment or under-letting of the whole of the premises comprised in the tenancy or the ratio between the rack rental value of the premises at the commencement of the tenancy and their rack rental value at the date of any such variation or the ratio indicated by any officially published index in respect of average earnings or prices for the time being currently in force as being the ratio between the level of such earnings or prices at the commencement of the tenancy and their level at the date of any such variation; and".").

The noble Lord said: Unfortunately, the noble Lord, Lord Mishcon, is not well so he has asked me to speak on this amendment for him. It is one on which I understand the noble Lord's department is trying to help the Law Society, who are the group who have fathered these proposals. The concept of the amendment is to permit lessees, who have leases with rents which are subject to review within 21 years and can be increased by reference to some index of price or wage inflation, or by reference to the ratio of premiums on assignments to the original premium or to the increase in the rack rental value, and who cannot therefore lawfully charge premiums on the assignment of leases, to be able to do so, if the potential increase is less than the rise in value.
As I have said, I gather that attempts have been made to meet this point, because the department of the noble Lord's right honourable friend the Secretary of State has found that landlords are seeking to relate ground rent increase to the annual increase, by reference to the value of gold. So it seems to me, and to the Law Society, that tenants in this position which I am outlining, which is a complex and technical position, are very often forced to sell at a loss.
What is happening in the legal profession is that many people are wittingly breaking the law, in order that they can benefit from the sale of their properties, which they would otherwise be able to do
576
legally if it were not for this technical problem. I am sure that nobody would want people to be forced into the position of making a technical breach in the law, in order to make a modest profit on the sale of property of this kind. I know that methods have been sought to meet this point, and I wonder whether the noble Lord is in a position to assist on this very difficult and complex matter. I beg to move.
Lord JANNER: May I take a moment or two (I realise that there is a pressure of time) to endorse what has been said by the noble Lord, Lord Evans, and to point out that this matter has been very carefully considered by the Law Society, which of course has unlimited experience—or if its experience is at all limited, it is limited less than any other organisation's—in respect of these matters. I do not think the point needs elaboration, and I hope that the Minister can accept this amendment.
Lord BELLWIN: I fully acknowledge that the problem which this amendment is designed to solve is a very real one. It is also a very difficult one to solve as the relevant provisions in the Rent Acts are extremely complex. As Professor Prichard has pointed out in the article in the New Law Journal in March, in which he proposed a rather similar amendment to this one, it is certainly quite wrong that in bona fide cases an increase in the ground rent to above two-thirds of the rateable value on the appropriate day should have the effect of preventing people from charging a full market price when they sell their house or flat. Bringing long tenancies of this kind within the scope of Rent Act protection makes no sense at all, and was obviously never intended.
The situation has arisen only because recent levels of inflation have meant that any provision for ground rents to be increased more or less in line with inflation is likely to bring the rent above two-thirds of the rateable value within the foreseeable future. When this happens, the tenancy becomes a fully protected tenancy, and Part IX of the 1977 Act applies. This generally prevents a premium from being charged for the grant or assignment of a protected tenancy.
The Government fully accept that there is a need for an amendment to deal with

577
this problem, both for leases where the ground rent has already gone above two-thirds of the rateable value and for those where it is likely to do so at some future review. Any amendment that deals with this problem must do three things. First, it must help long leaseholders who are or may be in this position, and enable them to charge a full market price when they want to dispose of their lease. Secondly, it must ensure that it does not change the rules in such a way as to open up a loophole in the Rent Acts which would enable landlords to make ordinary rack-renting lettings totally outside the Rent Acts because the rent at the very start of the tenancy was below two-thirds of the rateable value, but with provision in the lease to increase the rent rapidly to a fair rent level or above. Thirdly, it must ensure that existing tenants who need the protection of the Rent Acts, but who may be paving less than fair rent levels, do not lose that protection.
This is not an easy task, and I accept that this amendment seems to he along the right lines. However, I am not fully convinced that it would solve the problem in all cases, for the following reasons. First, I think there could be difficulties in applying the criteria proposed in the amendment for assessing by how much a ground rent should be allowed to rise without coming into the Rent Acts. One of these would allow increases in the ground rent that did not exceed
"any officially published index in respect of average earnings or prices".
I am not clear how this should be interpreted. It seems to me that it could lead to disputes about what indices of prices and earnings are "official", and so what increases in ground rents would be allowable in particular cases. Secondly, I am advised that the way the amendment is drafted could cause uncertainty about whether all or only one of the criteria mentioned needed to be satisfied.
But, more important than this, many of the cases in which difficulties are likely to arise relate to agreements that have already been made, in some cases a good many years ago. The level of the ground rent may have been pegged to a whole host of different criteria. Some of them may have risen faster than the general level of inflation and would thus
578
not satisfy the criteria in the amendment. For example, I am aware of one case where the ground rent is linked, as the noble Lord himself said, to the price of gold and is revised annually. Now at the time of the original lease this might have seemed perfectly reasonable, and the price of gold might have seemed to be something that could be relied on more or less to keep in line with other prices. Today, one might take a different view. But is it fair that the unfortunate tenants in this case should find not only that their ground rents increase at a much faster rate than inflation, but that this very fact prevents them from disposing of their house or flat at a market price? The amendment in its present form would not help them.
For these reasons, I cannot accept this amendment. As I have already said these are extremely complex provisions. Indeed, the noble Lord, Lord Evans of Claughton, himself said so when moving the amendment. However, I hope that we shall be in a position at Report stage to come forward with a solution to this difficult and technical problem in a way that should help most of those who are likely to be affected by it, but also in such a way as to ensure that those people who are genuine rack renting tenants with existing Rent Act protection do not lose it. My officials are having helpful discussions with the Law Society about this problem. I am grateful to the noble Lord, Lord Evans of Claughton, for raising it in the form of this amendment. I am sure that he will appreciate the difficulties which exist, and in view of what I have said I hope that he may feel able to withdraw the amendment.
Lord EVANS of CLAUGHTON: I am very grateful indeed to the noble Lord for this full reply, and I have great pleasure in withdrawing the amendment on the terms which he suggests.
Amendment, by leave, withdrawn.
Clause 75 agreed to.
Clause 76 [Meaning of "premium" in Part IX of Rent Act 19771]:
Baroness DAVID Baroness DAVID moved Amendment No. 154:
Page 54, line 10, leave out ("one-sixth") and insert ("one-twelfth").
The noble Baroness said: Clause 76 would enable a landlord to charge an incoming tenant a sum equal to two months' rent by way of deposit without that deposit constituting an illegal premium. This is unacceptable on several counts. It is too high. It would quickly become the standard amount, as landlords' advisers would latch on to the chance offered by the statute. And as it would apply to shortholds as well as to fully protected tenancies, in practice the landlord might well stand to gain every year the equivalent of two months' rent as a "perk", as tenants leave and others come.
There is no guarantee of the refunding of a deposit, but even if it were to be refunded it would still be sitting in a bank for a long time, gathering interest for the landlord. The size of deposits could be astronomical, effectively barring many poor tenants from entry to the sector. Moving house is a very expensive time. A prospective tenant frequently has to find a deposit—a month's rent in advance—and agency fees for the finding of the accommodation. Assuming a rent of £25 a week, the deposit could come to £200 in addition to the other costs which I have mentioned. The aim of the amendment is to make the deposit half what it is in the Bill—still quite a substantial sum. I beg to move.
Lord BELLWIN: This amendment is designed to limit the amount of any deposit which a landlord may charge as a condition of granting a tenancy to one month's rent. The purpose of Clause 76 is to make clear that the common and perfectly acceptable practice of landlords
charging a returnable deposit at the start of the letting in respect of possible damage or unpaid bills is not illegal. We are also trying to protect tenants from being required to find excessive deposits.
The reason we have made two months' rent the maximum deposit that a landlord can charge is that we believe there are tenancies where such a deposit would not be unreasonable—for example, a furnished tenancy where the landlord was responsible for the bills for heating, lighting and the telephone and where the tenant might damage the furniture. However, I accept also that there may be tenancies where a deposit of two months' rent might be excessive. That is why we have provided that a deposit must be reasonable in relation to the potential liability in respect of which it is paid. I think that our proposals are fair and reasonable and, I hope, sufficiently flexible to apply to the very different circumstances that can apply in different cases. In view of what I have said, I wonder whether the noble Baroness may feel able to withdraw her amendment.
Baroness DAVID: I thank the Minister for his reply. If the landlord has the chance of charging a two months' deposit, I do not think that he is very likely to charge less. This amendment is reasonable and, in relation to the potential liability, is not going to make much difference. Some tenants will be able to afford to pay the deposit, but a great many will find it very difficult to do so at the point of moving house. Therefore I shall press the amendment.
5.58 p.m.
On Question, Whether the said amendment (No. 154) shall be agreed to?
Their Lordships divided: Contents, 70; Not-Contents, 98.

CONTENTS

Airedale, L.

Crowther-Hunt, L.

Hale, L.

Ardwick, L.

Cudlipp, L.

Hatch of Lusby, L.

Aylestone, L.

David B.

Henderson, L.

Banks, L.

Davies of Leek, L.

Hooson, L.

Barrington, V.

Denington, B.

Houghton of Sowerby, L.

Beaumont of Whitley, L.

Diamond, L.

Irving of Dartford, L.

Beswick, L.

Elwyn-Jones, L.

Jacques, L.

Birk, B.

Evans of Claughton, L.

Janner, L.

Blyton, L.

Fisher of Rednal, B.

Jeger, B.

Boston of Faversham, L.

Gaitskell, B.

Kaldor, L.

Brockway, L.

Gifford, L.

Lee of Newton, L.

Brooks of Tremorfa, L.

Gordon-Walker, L.

Llewelyn-Davies of Hastoe, B.

Bruce of Donington. L.

Goronwy-Roberts, L.

Lloyd of Hampstead, L.

Collison, L.

Greenwood of Rossendale, L.

Longford, E.

Lovell-Davis, L.

Segal, L.

Wallace of Coslany, L. [Teller.]

McNair, L.

Shinwell, L.

Oram, L.

Stedman, B.

Wells-Pestell, L. [Teller.]

Peart, L.

Stewart of Alvechurch, B.

White, B.

Pitt of Hampstead, L.

Stewart of Fulham, L.

Wigoder, L.

Ritchic-Calder, L.

Stone, L.

Willis, L.

Rochester, L.

Strabolgi, L.

Winterbottom, L.

Ross of Marnock, L.

Strauss, L.

Wootton of Abinger, B.

Sainsbury, L.

Taylor of Mansfield, L.

Wynne-Jones, L.

Sefton of Garston, L.

Underhill, L.

NOT-CONTENTS

Airey of Abingdon, B.

Ferrier, L.

Norfolk, D.

Allerton, L.

Fortescue, E.

Northchurch, B.

Alport, L.

Fraser of Kilmorack, L.

Nugent of Guildford, L.

Amory, V.

Gisborough, L.

Orkney, E.

Ampthill, L.

Glenkinglas, L.

Orr-Ewing, L.

Auckland, L.

Godber of Willington, L.

Pender, L.

Balfour of Inchrye, L.

Gowrie, E.

Rawlinson of Ewell, L.

Bellwin, L.

Greenway, L.

Redmayne, L.

Belstead, L.

Gridley, L.

Reigate, L.

Berkeley, B.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Rochdale, V.

Bessborough, E.

Romney, E.

Blake, L.

Hawke, L.

Rugby, L.

Bradford, E.

Henley, L.

St. Aldwyn, E.

Brougham and Vaux, L.

Hornsby-Smith, B.

Sandford, L.

Caccia, L.

Hylton-Fostet, B.

Sandys, L. [Teller.]

Campbell of Croy, L.

Killearn, L.

Selkirk, E.

Chartcris of Amisfield, L.

Lindsey and Abingdon, E.

Sempill, Ly.

CoKvyn, L.

Long, V.

Skelmersdale, L.

Craigavon, V.

McFadzean, L.

Soames, L. (L. President.)

Craigmyle, L.

Macleod of Borve, B.

Spens, L.

Croft, L.

Mancroft, L.

Strathclyde, L.

Cullen of Ashbourne, L.

Margadale, L.

Strathspey, L.

Davidson, V.

Marley, L.

Swansea, L.

de Clifford, L.

Merrivale.L.

Swinfen, L.

De Frcyne, L.

Monckton of Brenchley, V.

Teviot, L.

Denham, L. [Teller.]

Monk Bretton, L.

Trefgarne, L.

Digby, L.

Monson, L.

Trumpington, B.

Drumalbyn, L.

Morris, L.

Vaux of Harrowden, L.

Ellen borough, L.

Mowbray and Stourton, L.

Vickers, B.

Elles, B.

Moyne, L.

Vivian, L.

Elton, L.

Murton of Lindisfarne, L.

Ward of Witley, V.

Faithfull, B.

Nathan, L.

Westbury, L.

Ferrers, E.

Newall, L.

Young, B.

On Question, amendment agreed to.

6.6 p.m.
Lord EVANS of CLAUGHTON Lord EVANS of CLAUGHTON moved Amendment No. 156:
Page 54, line 12, at end insert ("such sum being deposited with the rent officer with the relevant sum being returned to the tenant at the end of the tenancy with interest").
The noble Lord said: I beg to move this amendment. It seems to me quite an ingenious way of ensuring, now that sums deposited are larger amounts than if the previous amendment has been passed, two things—first, that the money is in the safe hands of the rent officer; and, secondly, that at the end of the period, when the deposit is returned, it would have gained interest, because there would be a requirement on the rent officer to depositthe money
582
and the interest on it would then be returnable to the tenant. It seems to me that this might be useful in a small way towards making the lot of the tenant safer and easier.
Lord BELLWIN: This amendment would give to rent officers an additional responsibility. It would require them to hold deposits that landlords had charged in accordance with Clause 76, on behalf of landlords. It would also require the rent officer to return such deposits with interest to tenants at the end of the tenancy. I do not regard this as an acceptable extension of the role of the rent officer. The function of the rent officer is to assess fair rents in accordance with the statutory provisions. It is no part of his function to hold deposits on behalf of landlords. Nor is the rent officer in

583
any position to adjudicate between the landlord and tenant as to how much of the deposit should be returned to the tenant at the end of the tenancy. At the moment, any dispute between the landlord and the tenant about the repayment of a deposit would be a matter for the courts. This, rather than the rent officer, seems to me to be the right forum for resolving such disputes.
Lord EVANS of CLAUGHTON: I am sorry that the noble Lord, Lord Goodman, is not in his place, because he tells us that he was the father of the rent officers. I take the point the noble Lord, Lord Bellwin, has made. I should have thought, as I said, that this was an ingenious and useful additional clause, hut, since the Government do not want the advantage of useful additional clauses, in sorrow rather than in anger I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord EVANS of CLAUGHTON Lord EVANS of CLAUGHTON moved Amendment No. 157:
Leave out Clause 76 and insert the following new clause:
("Amendment of s. 128 of 1977 Act
In section 128 of the 1977 Act (interpretation of Part IX, which prohibits premiums etc.) for subsection (2) there is substituted the following subsection:—
"(2) For the avoidance of doubt it is hereby declared that:—

(a) nothing in this Part of this Act shall render any amount recoverable more than once;

(b) a deposit returnable at the termination of a tenancy or of a restricted contract and given as security for the payment of accounts for supplies of gas, electricity, telephone or other domestic supplies or for damage to the dwelling-house or contents is not a premium for the purpose of this Part of this Act provided that it does not exceed the amount of two months rent payable under the tenancy or restricted contract;

(c) "premium" includes any payment by the tenant in respect of costs incurred by the landlord in connection with the grant, renewal or continuance of the tenancy."").

The noble Lord said: I beg to move the amendment standing in the name of the noble Lord, Lord Mishcon, and myself. The clause which it seeks to amend —Clause 76—is generally warmly welcomed by the legal profession. The amend-
584
ment seeks merely to give a clearer definition of what deposits may be taken from tenants and to prevent landlords from passing on solicitors' or estate agents' charges to the tenant. I gather, again, that the Minister's department are anxious to meet this point and that in another place they moved an amendment which dealt with some of the criticisms the Law Society made, but not with all of them.
What I think would be valuable would be to know whether the noble Lord the Minister can say definitively whether what is believed to be the case is in fact so; that is, that the requirement to pay costs—solicitors', estate agents' or any costs—is a premium and therefore unenforceable. It would be useful for the profession and for many people to have that answer and I hope the Minister can be helpful in his reply about meeting the reasonable requests of the legal profession. I beg to move.
Lord JANNER: I should like to support with just a few words the amendment that has been proposed by the noble Lord, Lord Evans. I think from another point of view that it is important that the law with regard to any circumstances should be made as clear as possible, and the idea behind this amendment is to see to it that not only the legal profession but laymen shall be in a position to know what it is all about. I think the whole idea of the amendment is to clarify the position in such a way as to make it possible for anyone concerned to have a real knowledge—or at least some kind of knowledge —of what in fact the law is, and I hope the noble Lord, the Minister, will consider this proposal.
Lord BELLWIN: I think the noble Lord, Lord Evans, will agree in putting forward this amendment that it has a similar intention to Clause 76 as it stands. It is concerned to ensure that landlords may charge deposits as security against unpaid bills or damage. It would change the clause in three ways. First, it would spell out precisely what a deposit could be charged for. I must tell the noble Lord that I do not regard this as necessary, as it seems to me undesirable that the clause should seek to anticipate all the items for which a landlord might quite reasonably seek to charge a deposit.

585
Secondly, it would specify that payments by tenants in respect of costs incurred by the landlord in connection with the grant of the tenancy are premiums. I do not regard this as necessary. The clause already states that "any other pecuniary consideration in addition to rent" is a premium. It seems to me that there would be little doubt that such charges are included in this definition. No further clarification seems necessary.
Thirdly, it would remove the requirement that a deposit must be reasonable in relation to the tenant's liability. I think it is important that this should be retained because I consider that there could he circumstances in which two months' rent might be an excessive premium. I do not know whether what have said is the clarification that the noble Lord, Lord Evans, is seeking, but I hope he will at least find it helpful.
Lord EVANS of CLAUGHTON: Looking at my brief, I see that it says, "Government lawyers take the view that the requirement that tenants should pay the landlord's costs is clearly a premium within the definition. If the Government spokesman can state this categorically I do not think we need press our points". I think the Government spokesman has stated this reasonably categorically and therefore I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 76 agreed to.
Clause 77 [Repairing obligations in short leases]:
Lord BELLWIN Lord BELLWIN moved Amendment No. 158:
Page 54, line 23, leave out("or").
The noble Lord said: For the convenience of the Committee I should like to speak to Amendments Nos. 158 and 159 together. These are minor consequential amendments to the Government's earlier Amendments Nos. 150 and 152 applying the Rent Acts to the Crown Estate and Duchies.
Clause 77 of the Bill enables landlords letting to certain specified bodies such as local authorities to transfer to them the repairing obligations under Section 32
586
of the Housing Act 1961 without the leave of the court. The bodies are all those to which the Rent Acts do not apply and cannot create protected tenancies. Thus, therefore, they are able to sub-let to private tenants on a flexible short-term basis. These arrangements are known as North Wiltshire schemes. The Crown Estate and Duchies are currently listed among them, and this is no longer appropriate now that they are to be within the Rent Acts and thus can only let on protected tenancies. The amendment therefore deletes them. I beg to move.
Lord BELLWIN Lord BELLWIN moved Amendment No. 159:
Page 54, line 24, leave out from ("Crown") to ("a") in line 25 and insert ("unless the lease is under the management of the Crown Estate Commissioners; or
(e) to").
The noble Lord said: I have already spoken to this amendment. I beg to move.
6.16 p.m.
Lord MONSON Lord MONSON moved Amendment No. 160:
Page 54, line 34, at end insert—
("(4) To section 32(2) of the Housing Act 1961 there shall be added the following—
(d) in respect of any of the installations listed in subsection (1)(b) of this section, to undertake repairs the cost of which, if undertaken by a contractor, would not exceed £30 per item, or such other sum as the Secretary of State may by order prescribe.")
The noble Lord said: This amendment was inspired by a request from the Association of District Councils, who felt that the burden imposed upon councils by minor repairs was really rather excessive. I have to declare an interest, in that if the amendment were passed it would also apply to private tenancies—but I do not think that in practice it would make much effective difference, as in my view most private tenants do carry out small repairs themselves. The Association of District Councils suggested a limit of £50. I have reduced that figure to £30, but I should like to make the point that this does not mean that the tenant himself or herself would have to expend as much

587
as £30; £30 represents the price that an outside contractor would charge and, if one deducts the cost of transport and labour, it would mean, generally speaking, that the tenant would be involved in an expenditure of no more than £5 or £10 for materials. I think this would relieve local authorities of an immense burden in overheads on very minor repairs and I hope the Government will give this sympathetic consideration. I beg to move.
Lord BELLWIN: The noble Lord, Lord Monson has referred to the difficulties of landlords, especially local authorities who have to carry out minor repairs. But we should also be concerned about the effect on many tenants on low incomes. They may find the cost of a £30 repair job very difficult to bear, especially if they are unemployed, or elderly. And let us remember that such groups tend to be over-represented among council tenants and they are the least able to tackle such jobs themselves. I think this amendment could cause many old people a great deal of worry. On the other hand I am well aware, that, as a recent survey bore out, many tenants who are perfectly capable of doing minor repairs themselves already do so. This seems to me to be entirely sensible and in itself casts doubt on the need for the amendment.
We should also be concerned about the eventual impact of such a change as this on the nation's housing stock. Even with the limit set at £30 an accumulation of minor repairs could build up in dwellings across the country. Tenants might be unable to undertake them, or they might do them badly. In a few years' time, landlords, and especially local authorities, might find themselves faced with what would be by then a heavy load of major repairs.
The amendment also seems to be capable of different interpretations and liable to abuse. No definition is included of what constitutes an "item of repair". The phrase could cover fitting an individual spare part, say, to a heating system; or it could cover installation of several parts, cleaning, adjusting and generally making the heating system serviceable again. It seems to me to depend very much on how you look at it—or more important perhaps, how the tenant and the contractor would choose to look at it. The amend-
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ment would also, I believe, lead to considerable practical difficulties for tenants in seeking estimates from contractors; it would mean a large number of inspections of very small items when the contractor might reasonably wonder whether there was in any case much likelihood of his firm getting the job.
I can see why the noble Lord has introduced this amendment. If I may say so, I have discussed it with former colleagues in local government who are on the Association of District Councils. I am aware that some local authorities would favour a change in Section 32, but we must remember that what we are concerned with here is the basic repairing obligation of landlords involving both the public and private sector. It is certainly not something we should consider changing lightly. The amendment would, I am sure, be a source of worry and concern for many tenants of slender means. None of us would want to give tenants the impression that we are taking away with one hand what the tenants' charter, which has a wide measure of support on all sides, gives with the other. I wonder, in view of that, whether the noble Lord, Lord Monson, will feel able to withdraw the amendment.
Lord SANDFORD: Before the noble Lord responds, I wonder whether I may make this point to my noble friend. It may well be that the particular formula which the noble Lord, Lord Monson, has moved, is not the right one, but I should have thought that the time had come and that the opportunity was presented by this Bill to have a look at this charter and see whether it is sensibly divided between the landlord and tenant at the moment. When one looks at the feats of repair work and maintenance which council tenants are quite capable of exercising in respect of their own motor cars, for instance, one wonders whether it is really necessary to involve local authority landlords in such things as changing tap washers.
I think the time has come when it is reasonable to expect tenants as a whole to carry out some of these jobs for themselves. It would make it much easier to achieve some of the cuts in local authority expenditure which are being rightly urged on authorities from all sides. Perhaps my noble friend would agree to have a

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look at this and see if there is any other way of revising this formula, if the one proposed by this amendment is not acceptable, and come back with his own amendment on Report stage.
Lord BELLWIN: I am very seized of this particular point because it is something with which I was for many years involved at great length. I am very pleased to note that in fact there is an obvious increase in the extent to which tenants are doing minor repairs themselves. I think, so long as it is nothing that is fundamental to the house that could lead to the kind of problem I mentioned a moment ago, there must be much merit in it. Often they do not want to wait anyhow, and are only too glad to get the job done and do it the easiest way.
However, the point is whether or not we should be trying to exclude things from what we are proposing in this tenants' charter. There has been much discussion with the association; my noble friend will know that. Indeed, it started a long time ago with the proposals in the Green Paper that the Labour Government put out, I think in 1977. We talked in those days at great length, for hours, as to what ought and what ought not to go into the tenants' charter. Whether we got the right answers then at the end of the day, only time will tell.
I do not know whether there is scope at this stage to look further in the way my noble friend Lord Sandford suggests. He knows how sympathetic I would be to trying, because of the great sympathy I have with the local authorities as well as the tenants. But I just have a feeling that if I were to say, rather easily, "Yes we will do that" I might be giving him a wrong impression. All I can say to him, as I have said to noble Lords opposite on one or two matters of this kind where we have got into specialised areas, and as I said to the noble Lord, Lord Gifford, in particular, we certainly could not accept the amendment and I cannot give a promise to take it away and bring back something in its place. But I will undertake that we will look very carefully to see if there is any room on this at all, and if there is we will talk to the ADC once again; but I hope the noble Lord will not hold me to it if I am not able to do that at the end of the day.
Baroness DENINGTON: I cannot miss the opportunity of saying to the Committee and to my friend the Minister that, if only the Government would give a lot of encouragement to the establishment of management co-ops in local authority dwellings, there is here a vast field where they would manage their own affairs. We are trying this now in the Greater London Council area on Greater London Council estates. The council makes a grant to a management co-op to do their own cleaning and repairs, collect their own rents and so on. We are breaking down a very big estate into small units and making people responsible for their own affairs, which includes the taps and all the other things. I do really think this is the way forward, and it would solve these niggling little problems.
Lord SANDFORD: I am most grateful to the noble Baroness. She has opened up another possibility and that is another very good way forward. But the fact is that if this formula—which has been discussed a great deal, but not, I think, debated during the passage of this Bill in the other place, and therefore perhaps does deserve a little consideration now— were looked at and the framework altered to encourage the kind of developments the noble Baroness talks about, we would make some progress. It is not right to let the opportunity pass and make no changes at all in an area which everybody recognises needs to be modified in some way or another.
Lord MONSON: I am most grateful to the noble Lord, Lord Sandford, for his support. I must agree with the noble Lord, Lord Bellwin, that the amendment is no doubt imperfectly drafted. The Association of District Councils and I had some considerable difficulty in finding the right formula. I do want to emphasise that there is no question of getting the tenant to undertake repairs that would cost him as much as £30; that was the price the contractor would have charged. The main element, as most noble Lords will know, is the labour cost and the transport cost; it costs £15 for people to come for five minutes in the normal way. My object was to try to confine the tenant's liability to those repairs not costing more than £5 or so, mainly material costs, which could normally be done by the averagely competent person in half

591
an hour at the weekend. We have all heard stories, some of them perhaps apocryphal about the well-known profligate London local authorities who send people round to change light bulbs and that sort of thing which tenants could quite easily do themselves. However, I am glad the noble Lord, Lord Bellwin, is going to have a look at this. I quite appreciate that he cannot give any promises, but with that assurance I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 77, as amended, agreed to.
Clause 78 [Tenant's improvements]:
On Question, Whether Clause 78 shall stand part of the Bill?
6.28 p.m.
Lord MONSON: I would like to intervene to ask the noble Lord, Lord Bellwin, to say a few words about Clause 78. It does seem to me a little bit worrying that the tenant is going to be given a right to make quite major alterations to somebody else's property and the consent of the landlord is virtually implied in that it could not reasonably be withheld. I am not thinking of the large impersonal landlords, large remote companies; they are a different matter. I am thinking of small landlords who may well be letting a property which is adjacent to their own house, or even part of their own house converted and formed into a self-contained unit. I am not thinking so much of internal alterations, but external decoration, for instance. Is it right, really, that somebody who owns a semi-detached pair of houses and lives in one should be required to allow the tenant to repaint the exterior of the adjoining one any colour he likes? It may seem a trivial point, but it seems to me to weaken the whole concept of private property rights.
I wonder whether the noble Lord could say anything about it. I might come back to it again at the next stage. I wonder whether he could give some consideration to the matter because I should like to know whether this is really intended by the Government.
Lord BELLWIN: I do not know that I am able to help the noble Lord on this
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matter. It is rather like a number of other matters that come up from time to time—one has a view on them and, indeed, one could only be sympathetic to the point which the noble Lord has mentioned. I should like to refer to what my noble friend Lord Sandford said a moment ago. There are so many aspects of this whole area that require far more investigation and far more consideration than may have been given in the past. I suppose that I had better qualify that, because when one bears in mind all the discussions that have taken place in the past, one realises that there are so many aspects of the matter which are still far less than ideal. There could never be a point where one could say, "That is it".
That is all that I can say to the noble Lord, Lord Monson. Yes, there has to be a case for further discussion. I hope that when the Bill has gone through and when everything has settled down and we have time to think and breathe, we shall be able to look in the longer term at all the aspects of repairs, maintenance and so on as regards all sectors of the country's housing.
Lord MONSON: I am grateful to the noble Lord for what he has said. I think that the Government probably had the large landlord in mind when framing this particular clause. Although the landlord who lets his own private house and who wishes to return to it is protected by the provisions of the clause, he is not protected if it is the house next door to the one in which he lives. That, I think, is a gap which quite understandably—in a complex Bill like this—may have been overlooked. I should like to reserve the right possibly to introduce an amendment at the next stage to cover this point.
Clause 78 agreed to.
Clauses 79 to 84 agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No.161:
After Clause 84, insert the following new clause:
("Discretion of court in certain proceedings for possession
.—(1) Where, under the terms of a rental purchase agreement, a person has been let into possession of a dwelling-house and, on the

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termination of the agreement or of his right to possession under it, proceedings are brought for the possession of the dwelling-house, the court may—

(a) adjourn the proceedings; or

(b) on making an order for the possession of the dwelling-house, stay or suspend execution of the order or postpone the date of possession;

for such period or periods as the court thinks fit.
(2) On any such adjournment, stay, suspension or postponement the court may impose such conditions with regard to payments by the person in possession in respect of his continued occupation of the dwelling-house and such other conditions as the court thinks fit.
(3) The court may revoke or from time to time vary any condition imposed by virtue of this section.
(4) In this section "rental purchase agreement" means an agreement for the purchase of a dwelling-house (whether freehold or leasehold property) under which the whole or part of the purchase price is to be paid by instalments and the completion of the purchase is deferred until the whole or a specified part of the purchase price has been paid.
(5) This section extends to proceedings for the possession of a dwelling-house which were begun before the commencement of this section unless an order for the possession of the dwelling-house was made in the proceedings and executed before the commencment of this section.").
The noble Lord said: I beg to move Amendment No. 161. The purpose of this clause is to implement an undertaking given by the Minister for Housing and Construction in another place. That undertaking was to introduce an amendment to the Bill which would extend to rental purchasers who fall into arrears a statutory protection from immediate eviction similar to that possessed by mortgagors who default. The draft clause is an adaptation of Section 36 of the Administration of Justice Act 1970, which is the source of protection for mortgagors who default.
It may be of assistance to the Committee if I indicate what is meant by rental purchase. It is a form of house purchase where an intending purchaser occupies a property, and agrees to make regular instalment payments to the owner, but does not become the owner of the property until the full purchase price is paid. The agreement to purchase may stipulate any deposit or interest to be paid by the purchaser, and the right of the vendor to terminate the agreement if the purchaser should default on his payments. Rental purchase is perhaps most common in
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cities in the North-West of England, but is not unknown elsewhere. Rental purchasers tend to be people who would not meet the lending criteria of institutional sources of funds; and they tend to buy property which likewise may not be attractive to institutions.
At present, because of the nature of rental purchase agreements, a rental purchaser who falls into arrears on his payments may become liable to eviction as a trespasser. This is because he is neither a mortgagor nor a tenant, and cannot therefore obtain the assistance of the courts under the Administration of Justice Act 1970 or the Rent Acts. The proposed amendment will enable those purchasers who fall into arrears to seek an adjournment of court proceedings, or to ask the court to suspend or postpone any order for possession the court grants. The Court will be able to impose conditions —for example, that the occupier pays off the arrears and pays something for his occupation of the property, or pays the amount required by the original agreement should the owner waive the breach. Without this clause rental purchasers will be left in an exposed and anomalous position, without any protection from eviction similar to that which the law provides to mortgagors and tenants. Accordingly, I invite the Committee to accept this amendment.
Baroness BIRK: I should like to thank the Minister and the Government very much for introducing this clause, which both we on this side of the House and my honourable friends in another place very much wanted to have inserted in the Bill.
Clause 85 [Restriction on discretion of court in making orders for possession of land]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 162:
Page 58, line 26, at end insert—
("or
(e) the order is made in proceedings brought as mentioned in section (Discretion of court in certain proceedings for possession) (1) above.").
The noble Lord said: I beg to move Amendment No. 162. This is a small amendment that is consequential on the

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Government's new clause we have just been considering designed to help those purchasing under rental purchase agreements. All that it does is to provide that the more rapid repossession procedures that Clause 85 introduces for mandatory possession cases, cannot be used against someone who has been occupying under a rental purchase agreement. The clause already provides that they do not apply to an action by a mortgagee for possession, or to an action for forfeiture of a lease. An action against someone who has been occupying under a rental purchase agreement is similar to these, and the extended discretion the new clause gives to the courts would be virtually taken away again, if Clause 85 were to apply to actions against rental purchasers. I therefore ask your Lordships' Committee to accept this amendment.
On Question, Whether Clause 85, as amended, shall stand part of the Bill?
Baroness DAVID: In speaking against this clause standing part of the Bill, I want to say that there is no reason for giving quicker court hearings on possession orders on the basis of whether or not the case for possession is mandatory or discretionary. That possession is mandatory does not mean that the outcome of the hearing is in any way certain. Possession only follows if the case is proved. In many cases, say, for instance, an alleged holiday letting, as my noble friend said perhaps in Hackney or Brixton, there may be very reasonable doubt as to whether the case will be proved. Neither is there any consistent relationship between the urgency of the landlord's claim for possession and whether or not possession is mandatory or discretionary. Indeed, it could be argued that the landlord, facing substantial rent arrears or a tenant damaging his property, might more urgently need possession than many of the landlords bringing mandatory cases for possession.
The important point for landlords, particularly in London, is the delay in obtaining a court hearing because of the pressures on the courts. In that respect the Housing Bill overall could well mean even greater delays in obtaining possession. It is the delays in the courts, not the
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periods of notification of court hearings and operation of possession orders, that should be reduced. The procedural period should be retained unchanged. The reduction from three weeks to one week of the period of notice of the court hearing is being considered, again for mandatory cases, by the County Court Rules Committee.
This proposal, which is clearly related to the proposal contained in Clause 85, will leave tenants with an inadequate period to seek advice and representation. It is particularly likely to lead to an increase in kite-flying claims for possession by less scrupulous landlords. Currently there is more time and a better chance of tenants getting proper advice and for their solicitors or advisers to contact the landlords who then invariably will withdraw such a claim for possession. The reduction from four weeks to two weeks in most cases of the period after the grant of the possession order—that is the only period when the tenant definitely knows he will have to leave—must lead to an increase in homelessness. It will also lead to more applications being made to local authorities for housing, as tenants will have less time to seek alternative accommodation themselves.
The Royal Commission on Legal Services recommended that there should be a review of the operation of the courts and tribunals, including those in the area of housing. A wide range of responsible organisations, including the London Boroughs Association and the Royal Institution of Chartered Surveyors, have suggested that a single housing court should be established to replace the current complex structure of courts, committees, and tribunals dealing with housing law. Mr. Finsberg supported this idea when he was in Opposition. He of course is now a Minister in the Department. Mr. Rossi, then the spokesman for the Conservative Party in the other place, also supported this.
We suggest that the Government should drop these ill-considered and petty procedural proposals which will satisfy no one, and that they should face up to the need for a more fundamental review of this area.
6.42 p.m.
Lord BELLWIN: I regard this as an important clause in the Bill. Its purpose

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is to limit judges' discretion to postpone possession in cases where the landlord has a right to possession, once certain facts are established. This is because we are concerned about the time that it can take landlords to regain possession, even in cases where there can be no question of the tenant having any right to remain in occupation. At present, the courts' power to postpone the date of possession in these cases is a common law power, and enables them to postpone possession for up to four to six weeks in a typical case. This clause reduces this period to 14 days unless it appears to the court that this would cause exceptional hardship, in which case possession may be postponed for up to six weeks. I think these changes are fair and reasonable. I totally reject that they will mean that tenants will be liable to eviction from their home at short notice.
Before a landlord with a mandatory right to repossession can apply to the court for possession, the tenant will know that his rights of occupation have come to an end, either, for example, because the landlord has served a notice to quit (or a notice to terminate in the case of a secure tenancy), or, if the tenancy was for a fixed term, because the term has expired. Let me take the example of shorthold. Under the shorthold proposals in the Bill, the landlord must always give the tenant at least three months' notice of his intention to apply to the court for possession. The tenant should be in no doubt that he has no right to remain in occupation. At the beginning of his tenancy, he will have been served with a notice explaining his position as a shorthold tenant. The same applies to the "Case 11" tenant—the tenant of the temporarily absent owner-occupier. He too will have been served with a notice at the start of the tenancy.
So, in none of these cases can there be any question of the tenant being completely unaware of the landlord's right to repossession. It seems to me quite reasonable that landlords should be entitled to more rapid repossession in these cases. I therefore move that this clause stand part of the Bill.
Lord GIFFORD: I do not find that explanation or that reply acceptable at all. First, it does not deal with one of the
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points made by my noble friend. We should look again to see how this works in practice. A great number of the types of case where this 14-day order will be imposed are the types of case which can be brought to the court by the very streamlined short notice Order 26 procedure, as it is known in the county court—that is to say, the procedure which is used against alleged squatters or other occupiers whose time of occupation has come to an end. That gives a seven-day period between the commencement of the proceedings and the hearing in the courts. With 14 days you have a total of three weeks from start to finish.
There are people who will not get notice of such a hearing. They may not be there. There are people who may get notice but who take time to get to the right place to get advice. By the time they come to get advice, the bailiffs may be either knocking on the door or have actually obtained possession. The noble Lord seems to assume that these cases will only be cases where the tenant's-occupant's right has come to an end in any case. That is not always the case. There are many instances where proceedings are brought to the court alleging that the person is a squatter, or a tenant of a resident landlord, or something of the kind, when that is in fact not the case at all. If the tenant does not appear at the hearing, or does not get advice for two or three weeks about the perfectly good defence he has, then this axe will fall upon him and it will be too late once someone tried to intervene.
What is the necessity for this? At the moment the judges have a limited discretion which is usually not more than 28 days, though sometimes they give six weeks, and if a landlord presents a case for needing urgent possession, as he often does in a squatting case or some other case, that period can be cut down to eviction forthwith, or within seven days. There is no need for a 14-day period because the period is not much greater than that in any event, and I think has in fact been limited by the courts to something like 28 days. It is an unnecessary clause, and a clause which will work great hardship in a number of cases.
Baroness DAVID: I have listened to what the Minister has said. I am not

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convinced by his defence of the clause. It will do more harm than good. Therefore, we shall be voting against the clause.
Resolved in the affirmative, and clause agreed to accordingly.
Clause 86 agreed to.
Lord DENHAM: I think this is probably an appropriate moment to adjourn for
6.47 p.m.
On Question, Whether Clause 85, as amended, shall stand part of the Bill?
Their Lordships divided: Contents, 91: Not-contents,60.

CONTENTS

Airey of Abingdon, B.

Fraser of Kilmorack, L.

Norwich, Bp.

Allerton, L.

Gisborough, L.

Nugent of Guildford, L.

Amory, V.

Godber of Willington, L.

Orkney, E.

Auckland, L.

Gowrie, E.

Orr-Ewing, L.

Balfour of Inchrye, L.

Greenway, L.

Pender, L.

Bellwin, L.

Gridley, L.

Rawlinson of Ewell, L.

Belstead, L.

Hailsham of Saint Marylebone, L. (chancellor.)

Redmayne, L.

Bessborough, E.

Reigate, L.

Blake, L.

Harmar-Nicholls, L.

Renton, L.

Bradford, E.

Hawke, L.

Rochdale, V.

Clitheroe, L.

Henley, L.

Romney, E.

Colwyn, L.

Hornsby-Smith, B.

St. Aldwyn, E.

Cork and Orrery, E.

Hylton-Foster, B.

Sandford, L.

Craigavon, V.

Killearn, L.

Sandys, L. [Teller.]

Craigmyle, L.

Kinnoull, E.

Selkirk, E.

Croft, L.

Lindsey and Abingdon, E.

Selsdon, L.

Cullen of Ashbourne, L.

Long, V.

Spens, L.

Davidson, V.

McFadzean, L.

Strathclyde, L.

de Clifford, L.

Macleod of Borve, B.

Strathspey, L.

De Freyne, L.

Mancroft, L.

Swansea, L.

Denham, L. [Teller.]

Margadale, L.

Swinfen, L.

Digby, L.

Marley, L.

Teviot, L.

Drumalbyn, L.

Monckton of Brenchley, V.

Trefgarne, L.

Ellenborough, L.

Monk Bretton, L.

Trumpington, B.

Elles, B.

Monson, L.

Vaux of Harrowden, L.

Elliot of Harwood, B.

Morris, L.

Vickers, B.

Elton, L.

Mowbray and Stourton, L.

Vivian, L.

Faithfull, B.

Moyne, L.

Ward of Witley, V.

Ferrers, F.

Murton of Lindisfarne, L.

Westbury, L.

Ferrier, L.

Norfolk, D.

Young, B.

Fortescue, E.

Northchurch, B.

NOT-CONTENTS

Airedale, L.

Goronwy-Roberts, L.

Ritchie-Calder, L.

Ardwick, L.

Greenwood of Rossendale, L.

Rochester, L.

Aylestone, L.

Hale, L.

Ross of Marnock, L.

Banks, L.

Hatch of Lusby, L.

Sainsbury, L.

Beaumont of Whitley, L.

Hooson, L.

Sefton of Garston, L.

Beswick, L.

Houghton of Sowerby, L.

Segal, L.

Birk, B.

Irving of Dartford, L.

Stedman, B.

Blyton, L.

Jacques, L.

Stewart of Alvechurch, B.

Boston of Faversham, L.

Janner, L.

Stewart of Fulham, L.

Brockway, L.

Jeger, B.

Stone, L.

Brooks of Tremorfa, L.

Lee of Newton, L.

Strabolgi, L.

Collison, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Strauss, L.

David, B.

Taylor of Mansfield, L.

Davies of Leek, L.

Longford, E.

Underhill, L.

Denington, B.

Lovell-Davis L.

Wallace of Coslanv, L.

Diamond, L.

McNair, L.

White, B.

Evans of Claughton, L.

Oram, L.

Wigoder, L.

Fisher of Rednal, B.

Peart, L.

Winterbottom, L.

Foot, L.

Pitt of Hampstead, L.

Wootton of Abinger, B.

Gaitskell, B.

Ponsonby of Shulbrede, L. [Teller.]

Wynne-Jones, L.

Gifford, L.

dinner, and I therefore beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

NOVELTIES (SAFETY) REGULATIONS 1980
6.57 p.m.
Lord TREFGARNE Lord TREFGARNE rose to move, That the draft regulations laid before the House on 9th June, be approved. The noble Lord said: My Lords, the proposed regulations seek to ban the sale of three products—balloon-making substances which contain benzene, tear-gas capsules, and stink bombs containing more than 1.5 ml of liquid consisting of sulphides of ammonia or of these sulphides mixed or in solution with any other substance. These products are known in the trade as "novelties". The word "novelty" is usually used to describe relatively inexpensive products for pastimes or jokes which sometimes are designed to create amusement at the expense of unsuspecting victims. Typical examples are itching and sneezing powders, fake lumps of sugar, food made from plastic, glasses that leak their contents and blood-stained bandages.
None of these products is likely to offer substantial risks of personal injury. However, the three items covered by these regulations are believed to offer such a risk—the balloon-making compound because of the presence of benzene, a well-known carcinogen, and the tear-gas capsules and large stink bombs because of the risk of injury from the chemicals used to the face, especially the eyes and to other sensitive parts of the body. It is felt that the tear-gas capsules and large stink bombs represent what may be a disturbing tendency in the novelty trade, as they offer a substantial risk of personal injury to the victim or victims.
Balloon-making substances containing benzene are covered by regulations 2(a) and 2(b). This product was previously banned by the Balloon-Making Compounds (Safety) Order 1979 (SI 1979 No. 44), which was made under Section 3 of the Consumer Safety Act 1978. The order was made because it was found that "free" benzene was present in balloon-making kits imported in quantity from Taiwan via the United States. Benzene, which served as a solvent in the balloon-making paste, is known to be capable of causing blood diseases like leukaemia as a result of ingestion or prolonged inhalation.
Consultation about proposed regulations made under the Consumer Safety Act 1978 is always liable to be a lengthy affair. Consequently, it was not possible to introduce the regulation dealing with this product before the prohibition order expired on 18th January, this year. However, tests carried out for the department on samples of the balloon-making compound made by the same manufacturer and marketed after the order came into effect failed to reveal the presence of the offending benzene. For this reason it was not felt necessary to make a fresh prohibition order to cover the period between expiry of the original order and the entry into force of Regulation 2(a) and (b). Regulation 2(a) and (b) is so drafted as to come into force seven days after it is made.
Tear-gas capsules are covered by Regulation 2(c). They are at present banned under the Tear-Gas Capsules (Safety) Order 1979 (Statutory Instrument No. 887) which was also made under Section 3 of the Consumer Safety Act 1978. The regulation is so drafted as to come into effect from the date of expiry of the existing order; namely, 20th August 1980. The order prohibits the supply of a tear-gas capsule designed or intended to afford amusement to any person by causing discomfort to any other person by means of the lachrymatory properties of a substance capable of causing personal injury. By "lachrymatory properties" the draftsman means that the contents of the capsule cause copious tears. The department's medical adviser has stated that such a substance could cause damage to sight, if splashed into the eyes. Before the prohibition order was made there were known to be some of these products imported from West Germany.
Regulation 2(d) will forbid the supply of "large" stink bombs; that is, those containing more than 1·5 millilitres of a liquid consisting of sulphides of ammonia, or a mixture or solution of these substances. This liquid is corrosive and could burn the skin and eyes, and, if swallowed, the mucous membranes. In a confined space the gas given off—hydrogen sulphide—could be hazardous, particularly to persons with respiratory problems. Only large stink bombs are covered by the regulation. The large stink bomb

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appears to be a new development, and it is not proposed to prohibit the supply of the "traditional" small stink bomb which contains on average 1 to 1·2 millilitres of liquid.
It is recognised that some people may consider any stink bombs obnoxious or distressing, whilst others may consider them harmless practical jokes of a kind that children have always been given to. In the event, it has been considered right to draw a distinction between the "traditional" stink bomb and the large kind. The "traditional" stink bomb does not constitute the hazard to the victim offered by the large stink bombs, which may contain as much as 10 to 12 millilitres of liquid, and unlike the traditional kind, which are often crushed under foot, may well be used by splashing the liquid about. In the hands of hooligans who look upon the suffering of a victim as a joke they could constitute a serious threat of personal injury. Regulation 2(d) will enter into force three months after it is made, so as to allow the many small retailers of such goods reasonable time to withdraw stocks and avoid the risk of prosecution.
More than 60 bodies, representing a wide spectrum of interests—manufacturers, retailers, consumers and enforcement authorities—were consulted about the proposed regulations. They received a general welcome. The only substantial objection came from a manufacturer of the large stink bombs, who considered that a significant part of his production would be affected. His representations, together with all the others, were considered very carefully before it was decided to make the proposed regulations. The interests of safety were considered overriding. Accordingly, I recommend the draft regulations to this House, and I beg to move.
Moved, That the draft regulations laid before the House on 9th June, be approved.—(Lord Trefgarne.)
7.3 p.m.
Lord WYNNE-JONES: My Lords, we are grateful to the noble Lord, Lord Trefgarne, for having clarified some of the issues with regard to these regulations. However, there are, I think, one or two other points that still require clarification.
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Of course I am assuming that before he came into the Chamber the noble Lord divested himself of the stink bombs with which he was presented. If one looks at these very reasonable regulations, one finds all kinds of points that require even more clarification than the noble Lord has so far been able to give.
Regulation 2(a) refers to
"any kit for making balloons containing any substance from which the balloons are to be made which contains benzene".
Benzene is, like most chemicals, a troublesome and noxious substance if ill-advisedly used. At the same time it is an extremely common chemical, which can be purchased at a chemist's with no difficulty at all. Benzene has frequently been used as, for example, a solvent in removing greasy stains from clothing. It is not an uncommon substance; it is fairly common. It has been known ever since Michael Faraday discovered it in, I think, about 1854, and it has since been frequently used.
I do not wish to ask the noble Lord about the justification for excluding its use —I agree entirely with that—but rather, I wonder whether this prohibition will have any marked effect. Is it not perfectly possible for a kit to be supplied without benzene and then for the benzene to be purchased separately at a chemists' shop? One would then be able to do exactly the same thing as one could have done had the benzene been supplied with the kit.
Another point arises. I am not familiar with these kits, but there are various other substances—organies and liquids—which are not markedly dissimilar from benzene and which quite possibly could be used. Would it not be possible for a manufacturer to substitute some other substance? —for example, toluene, which is very similar to benzene and which might, if it were a matter of keeping the vapour pressure high enough, be diluted with another liquid which produced exactly the same kind of vapour pressure. I am not certain, but perhaps one is being a little too specific in mentioning benzene. Perhaps the noble Lord can elaborate on this point in his reply and explain to the House whether the regulations are concerned uniquely with benzene, or whether some other substance might not be able

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to perform the same function and be deleterious.
Certain other matters arise. The wording of the regulations is most delightful. No doubt the noble Lord has derived as much amusement from reading the regulations as I have. Regulation 2(c) refers to
"any injurious tear-gas capsule, that is to say, any article designed or intended to afford amusement to any person by causing discomfort to any other person …"
I should really like to know where the banana skin comes in, in this. I should have thought it a perfect example of something that can be used to afford amusement by causing discomfort. It is surely the classic example. The regulation goes on to refer to the lachrymatory properties of a substance. Where does the common onion come in? The common onion is well known to have lachrymatory effects. Is the common onion, as well as the banana skin, included in this regulation, or is it not?
More seriously, I find it a little difficult to understand how a figure of 1½ millilitres is arrived at. It is a very small amount. Do the Government and their advisers maintain that 1·2 millilitres would be harmless, whereas 1·5 millilitres would be harmful'? I find this very odd, because I would have thought (especially as he referred to the medical advisers saying that if one got any of this liquid on the eyes, for example, it could be very troublesome) it does not require one and a half millilitres on the eyes to be troublesome. I would venture to say that a tenth of a millilitre could be very troublesome on the eyes. I would have thought that this figure of 1·5 was a very strange one to introduce into an order like this, and I hope that the noble Lord will be able to justify this in greater detail, and explain to us why this figure of 1·5 is used.
Finally, there is another point I should like to raise. In the 1979 Order, No. 887, which comes to an end because it was applicable for only a year, there was a provision which said:
"No person shall supply, offer to supply, agree to supply, expose for supply or possess for supply any injurious tear gas capsule".
Why has that been left out? I would have thought that that was a very clear statement which ought to have been retained, and I should like to know from
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the noble Lord why we have had this degree of dilution. It would surely be better to retain the original order with suitable modification, but not with the exclusion of that provision.
7.12 p.m.
Lord AUCKLAND: My Lords, I intervene briefly in this short debate, which brings a little levity after our rather heavy discussions on more controversial legislation but which, nevertheless, has some serious connotation to it. I speak, first, as an honorary vice-president of the Royal Society for the Prevention of Accidents, and also as a member of the Joint Committee on Statutory Instruments, although I was abroad on business when this particular order came up. I do not think any of us wants to see prohibited the delightful novelties which a shop in High Holborn, not so very far from here, used to display, and which gave immense pleasure, nationally and internationally, but there are certain inherent dangers in some of the substances used in them.
Unlike the noble Lord, Lord Wynne-Jones, who has given us an expert scientific appraisal of this, I am, I must say, no scientist, so I shall not go into the sizes of the various amounts of ammonia and other substances contained in these balloons and other novelties, but the question I should like to put to my noble friend is this. I understand from his original statement that some of these items are imported from Taiwan and elsewhere. Have the Government had arty consultations on this matter with the authorities in Taiwan and elsewhere? There was the problem of the dangerous lead content of toys imported mainly from Hong Kong, and, as I understand it, the Hong Kong Government was approached and that problem has now been largely resolved. Since we import into his country a number of these novelties, such as stink bombs, balloons and so on, while I do not think any of us would wish to be spoilsports enough to see these items too vigorously controlled, nevertheless, as this order indicates, there are certain safety hazards; and it seems to me very important that every step should be taken to ensure that, where imports take place, there is discussion with the Governments concerned as to safety levels, which are of paramount

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importance, particularly where children are concerned.
7.15 p.m.
Lord TREFGARNE: My Lords, I am obliged to noble Lords for their reception of these regulations. I am glad I have not had to let off one of the stink bombs to get the measure through your Lordships' House, although perhaps that might be helpful in the case of the Housing Bill, which is going so slowly. Perhaps I may deal with the points made by the noble Lord, Lord Wynne-Jones. They are fairly technical, but I will do my best. I think I have got it right, but the noble Lord will forgive me if I inadvertently stray, for I fancy he knows the answers better than I do. As for, first of all, the balloon-making kits, benzene, even if sold separately, which is certainly not the practice at the moment, would be caught under these regulations. Of course, the point is that the benzene is used as a solvent for the plastic from which the balloons are made. The kit contains a little plastic tube with the dissolved plastic, and thus there is a risk that the child would actually swallow some of the plastic and the benzene. That is why it was necessary to prohibit the kits where they contained benzene. Kits that have recently come on the market do not, I am informed, contain benzene, and they, therefore, are not caught by these regulations.
The noble Lord asked me about the reason for the 1.5 millilitre figure with respect to the stink bombs. The current traditional stink bombs, as they are called, contain, as I said, about 1.2 millilitres, which we consider harmless, and we therefore set the figure at 1.5 millilitres because we understand that these devices are not manufactured to very close tolerances, and the precise amount of liquid therefore cannot always he exactly determined.
Lord WYNNE-JONES: My Lords, I thank the noble Lord for giving way. May I ask him whether the medical advice is that 1.2 really would be harmless on the eyes? Because I am surprised if such medical advice has been given.
Lord TREFGARNE: No, my Lords. The purport of the advice was that the
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traditional stink bombs, which are little glass capsules, by and large, and which, as I explained, are normally designed to be broken underfoot, or something like that, do not present the same risk because the fluid does not come near the eyes. The larger stink bombs are different. They are not glass capsules. The one that I was shown recently was a plastic bottle with a screw top, which could not have broken. It was simply that the top was unscrewed and the hooligan, or whoever he was, then scattered the fluid all around. That was clearly a hazard that had to be controlled.
The noble Lord asked me about tear gas capsules, and why it was that these regulations were diluted, as he thought they were, when compared with the original order banning them. I am advised that that is in fact not the case, and that the words used under the original order are virtually identical to the words used under these regulations. Certainly the effect is designed to be precisely the same.
My noble friend Lord Auckland asked me about consultations with the countries from which they come. There are some difficulties in this area because sometimes these products come via a devious route through several countries, and it is not always possible immediately to determine from where they in fact originate.
So far as Taiwan is concerned, our relations with Taiwan are not precisely cordial. As your Lordships will know, Taiwan has a curious place in the community of nations, and we do not in fact have relations with them at the present time. Thus, although we would be happy to stop the source of these products where that was practicable, we prefer to take the course laid out in the regulations. In fact, the larger stink bombs that I referred to are manufactured in this country; so clearly we had to proceed in the way that we did. I hope that with those explanations your Lordships will approve these regulations.
On Question, Motion agreed to.

TREES (REPLANTING AND REPLACEMENT) BILL [H.L.]
7.20 p.m.
Lord SOMERS: My Lords, I beg to

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move that this Bill be now read a third time. In doing so, I should like to add a few words of explanation. When I introduced this Bill into your Lordships' House, I realised that it would never have a chance of going through the other place in this Session but I thought it might be as well to go through it here so that it could then be reintroduced next Session with the minimum of trouble.
However, the Bill as it has now been amended is not very satisfactory in some ways. For one thing, the qualification that the trees planted must be of the same genus or species has been removed, thereby destroying the whole purpose for which I introduced the Bill originally. Also, as several noble Lords have said, it has no penal clause in it. That, I am having to take advice about from those who are more learned in the law than I am; but I am hoping to introduce that when the Bill reappears in the next Session in the same way as I shall reintroduce the qualification about planting the same species.
Moved, That the Bill be now read 3ª. —(Lord Somers.)
Lord WYNNE-JONES: My Lords, I wish to make a brief comment about this Bill. First, I should like to congratulate the noble Lord, Lord Somers, on having persisted in getting this Bill through. I think that no one in this House would be opposed to this Bill. I think we all feel that it is a Bill that is desirable. We were not always happy in the earlier stages with all the wording, but I think that we should accept this Bill and congratulate the noble Lord, Lord Somers.
Lord MOWBRAY and STOURTON: My Lords, I, too, should like to congratulate the noble Lord, Lord Somers, and other noble Lords who supported the Trees Bill. We in the Government totally sympathise with the aim of encouraging the planting of more trees, as I think I made clear during the passage of the Bill. Furthermore, I accept that the Bill as amended is in some ways an improvement on the original. I do not go along totally with the noble Lord, Lord Somers, in his view that it must always be the same genus as was planted before. As we pointed out in the various stages of the Bill, if the wrong tree has
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been planted it does not make it better to plant two more when it has to come down.
That apart, we still do not support the noble Lord's Bill. Our fundamental objection is that it imposes a further statutory duty on the local authorities, involving increased bureacracy and thus it is running entirely counter to our aim of reducing bureacratic duties. No evidence has been produced—and this I think is really the vital point—to show that the local authorities generally are reluctant to plant trees. The resources which would have been spent on maintaining the records required by the provisions of Clause 3 can be better spent, we think, on getting more amenity trees planted—which, I repeat, is the policy the Government wholeheartedly support. Having said those dampening words, I still congratulate the noble Lord, Lord Somers, on what I know is a very public-spirited and wholehearted devotion to the cause of trees and forestry. I pay tribute to him for what he has done.
Lord SOMERS: My Lords, I thank both noble Lords for what they have said. I shall certainly think about what the noble Lord, Lord Mowbray and Stourton, has said and consider it before producing the next version in the next Session.
On Question, Bill read 3ª, and passed, and sent to the Commons.
Lord SANDYS: My Lords, I beg to move that the House do now adjourn during pleasure until 8 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.24 p.m. to 8 p.m.]

HOUSING BILL
House again in Committee.
Clause 86 agreed to.
Clause 87 [Power of local authorities to dispose of land held for purposes of Part V of Housing Act 1957]:
Lord BELLWIN Lord BELLWIN moved Amendment No. 163:
Page 60, leave out lines 7 and 8.
The noble Lord said: This technical amendment removes an unnecessary definition. The clause which we are discussing inserts a new Clause 104 into the Housing Act 1957. This gives local authorities a new power to dispose of land held under that Act. Subsection (10) of the new clause defines the word "land". It reads:
"In this section 'land' includes any estate or interest in land".
That definition is too narrow. Removal of this subsection from the Bill will produce the result that "land" in this context will have its widest meaning, as in the Interpretation Act 1972, which defines "land" as follows:
"Land' includes buildings and other structures, land covered with water, and any estate, interest, casement, servitude or right in or over land".
We have taken the view that this broader definition is preferable.
On Question, amendment agreed to.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Nugent of Guildford): The next amendment is No. 163A. Before calling the noble Lord, Lord Bellwin, I should tell the Committee that this is a manuscript amendment. Amendment No. 163A now reads:
"Page 60, line 12, leave out from 'disposal' to end of line 14 and insert (`made in pursuance of the option')".
Lord BELLWIN Lord BELLWIN moved Manuscript Amendment No. 163A:
Page 60, line 12, leave out from 'disposal' to end of line 14 and insert (`made in pursuance of the option').
The noble Lord said: I am grateful to the noble Lord, Lord Nugent of Guildford. I have already spoken to this amendment with Amendment No. 28A. I beg to move.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 164:
Page 60, line 23, leave out ("section 88") and insert ("sections 88 and (Appropriation of land).
The noble Lord said: For the convenience of the Committee I should like to speak also to Amendment No. 168. These amendments introduce consistency in relation to all means of dealing with
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houses held under Part V of the Housing Act 1957. As it stands, Part V of the Bill removes the present complexity in the requirement for ministerial consent to the disposal of "Part V" council houses but only where their disposal is into new ownership. As a result of these amendments there will be a complementary requirement for ministerial comment where there is an appropriation by a local authority of such houses for another statutory purpose.
We have always made it clear that our policy of removing controls over local authorities must be consistent with the achievement of other policies on which we were elected. As the White Paper said:
"Democratically elected local authorities are wholly responsible bodies who must he free to get on with the tasks entrusted to them by Parliament without constant interference in matters of detail by the Government of the day. On the other hand, there are certain national policies which it is the Government's duty to pursue even though they may be administered locally; for example, where by statute the responsibilities are shared between central and local government or where the Government of the day may have secured a particular mandate at a general election. It would be inappropriate therefore to abandon all control over local government; to do so would he an abdication of the Government's proper role".
This applies in the case of council houses. It is the policy to ensure that dispositions of usually subsidised council houses and related property are to appropriate purchasers and on acceptable terms and prices. This must be done through a consent mechanism, such as Part V of the Bill, as amended, will provide. I beg to move.
On Question, amendment agreed to.
8.6 p.m.
On Question, Whether Clause 87, as amended, shall stand part of the Bill?
Baroness BIRK: While I do not doubt that what the noble Lord said about the last amendment was so, and the rest of the clause—and I am not "rubbing it in" for political reasons—this does underline the need for us to have Notes on Clauses on this Bill. It is terribly difficult to take in what it is about. The amendment as it stands almost means nothing unless one is provided with further information on the clause itself as well. Although we agreed to it simply in order to expedite

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matters, if we do not understand it we do not know what to say about it, whether opposing it or supporting it. We shall have to look at it and consider it before Report. It is not because on principle we are against these things, but so much of it is practically incomprehensible.
Lord BELLWIN: As I said right at the very beginning, I will gladly send some detailed clarification on this particular amendment to the noble Baroness, Lady Birk. I will see that that is done very quickly.
Baroness BIRK: And any of the other rather obscure amendments, because it is very difficult to understand them. It is one of these occasions where you do not really know what to ask for. You do not know what you want to know until you know what you do not know.
Lord BELLWIN: Then the difficulty is that I do not know what you do not know that you do not know about, and that presents yet another problem for me, too, with the best will in the world!
Lord SANDFORD: May I agree with the noble Baroness. There ought to be an all-party pact not to handle any more Department of the Environment Bills in our House until we resume the excellent practice which the noble Baroness and I both instigated, that we have Notes on Clauses. It is quite impossible to handle these complicated Bills at the rate we are dealing with them without notes on clauses.
Baroness DAVID: May I add that there have been a great many Government amendments since the Bill was printed. It is even more difficult to try to keep up with those. They only come out a few days before the Committee stage. So that makes it even more difficult for us.
Clause 87, as amended, agreed to.
Clause 88 [Consent to disposals and recovery of discount]:
Lord BELLWIN Lord BELLWIN moved Amendment 164A:
Page 62, line 11, at end insert ("and for the purposes of this section the grant of an option
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enabling a person to call for a disposal falling within subsection (4) above shall be treated as such a disposal.").
The noble Lord said: I spoke to this Amendment with Amendment No. 28A. I beg to move.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment 164B:
Page 63, line 33, at end insert—
(" (10) For the purposes of this section the grant to any person of an option enabling him to call for a disposal falling within subsection (4) above shall be treated as such a disposal made to that person and a consent to such a grant as a consent to a disposal made in pursuance of the option.").
The noble Lord said: I spoke to this Amendment with Amendment No. 28A. I beg to move.
On Question, amendment agreed to.
On Question, Whether Clause 88, as amended, shall stand part of the Bill?
Lord SANDFORD: May I say a word before we pass on from this particular clause? This is in the general area of the consents which my noble friend has already mentioned. The first part of Clause 88 says:
"Any consent of the Minister required under section 104(2) or (5) of this Act may be given either generally to all local authorities or to any particular local authority or description of authority and either in relation to all kinds of property or to any particular property or description of property".
I submit to the Committee that you could hardly have a sentence which gives the Secretary of State wider scope for intruding into the exercise of the powers of local authorities. I should have thought that it was necessary for Parliament to have some indication of how this power conferred on the Secretary of State in this respect is going to be exercised before we allowed the Bill to go forward on to the Statute Book.
Up to the present moment there has been no consultation with the local authorities about the exercise of these consents and therefore I should like to ask my noble friend to give us some assurances. Any clause like this causes anxieties and suspicions among local authorities, but particularly so at the pre-

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sent time. The reason is this: it is essential to bring public expenditure under control and my right honourable friend the Secretary of State has had to send a circular to local authorities telling them to contain and curb their expenditure and to report to him by 1st August on how they are going to do it, at the same time spelling out various steps which he has in mind to take to do it for them if they do not do it successfully for themselves. In this climate, local authorities are bound to be particularly sensitive about the exercise of central Government control in areas which they regard as being their responsibility. Therefore it is particularly important for them to know how they stand here.
Therefore I would ask my noble friend whether he would be kind enough to give us assurances on this point. The best thing would be for him to be able to say that by the next stage of the Bill the local authorities will have been consulted about it. If he cannot do that, perhaps at the next stage he would tell us when they are going to be consulted, and I hope that that would certainly be before the Bill is enacted. At the same time, perhaps he could tell us the kind of controls and the way in which these consents will be drawn. I hope he will be able to say that by the time we get to Report stage consultations upon this will have taken place and we shall know the views of local authorities about it.
Lord BELLWIN: I am not in a position to offer formal consultations at a stated time about the content of the new general consent which will be issued under the revised Part V of the 1957 Act. However, I can tell your Lordships that it is the intention that sales on comparable terms to those set out in Chapter 1 of the Bill should be submitted on a voluntary basis. The consent will also extend to sales on share-ownership terms and to building for sale. I am also glad to say that there has been contact at official level about the provisions in Clauses 87 and 88. Also, in response to a letter, an invitation has been extended to the ADC to take up any points they wish with the departments. Officials would also hope to do that with officers of the other local government associations.
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One does want to be helpful here. I entirely recognise the validity of the points made by my noble friend, and we want to be sure as far as possible that local authority associations are as happy about these as they can possibly be. To that extent I will take away the points my noble friend has made about the more formal consultations, and without making any commitment as to that at the moment I will have talks with my colleagues to see what we are able to do.
Lord SANDFORD: I am grateful to my noble friend.
Clause 88, as amended, agreed to.
Clause 89 [Acquisition of land for purpose of its subsequent disposal]:
Lord BELLWIN Lord BELLWIN moved Amendment No. 165:
Page 63, line 41, leave out ("erect houses") and insert "provide housing accommodation").
The noble Lord said: This amendment clarifies the declaration in Clause 89 that local authorities have power to acquire land or houses expressly in order to dispose of them, under their powers to provide housing accommodation in Part V of the Housing Act 1957. Hitherto, it has been arguable that these powers did not extend as far as that. The amendment makes it clear that the power extends to the acquisition of buildings for disposal to someone who will convert them into housing accommodation. This unreasonable gap was brought to light by a recent case which came to the department's notice after the Bill had been introduced. I beg to move.
On Question, amendment agreed to.
Clause 89, as amended, agreed to.
Clause 90 [Options granted before commencement of section 87]:
8.15 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 166:
Page 64, line 5, after ("granting") insert ("to thetenant of a house").
The noble Lord said: In speaking to this amendment I should like also to speak to Amendment No. 167. These are

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primarily drafting amendments. It is now some years since local authorities began to dispose of council houses under what have been called half-and-half or equity sharing schemes, but are now known as shared ownership schemes. The basic element in these schemes is that the share-owner buys a lease of the house together with an option to buy the council's remaining interest, usually the freehold, which he buys at a later date when he is better able to afford it.
Unfortunately, as the previous Government announced in the other place, there has been some doubt as to whether a local authority's powers to sell and lease "Part V" council houses extend to the granting of such options. The purpose of Clause 90 is to remove any doubt about the validity of options contained in existing shared ownership arrangements. However, Clause 90 as drafted goes rather wider than we wish. These amendments make it clear that the options with which we are concerned in this clause are that shared ownership options and any other options to buy their homes which may have been granted to council tenants. I beg to move.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 167:
Page 64, line 6, leave out from ("in") to end of line 9 and insert ("the house").
The noble Lord said: I beg to move this amendment formally. I have already spoken to it.
On Question, amendment agreed to.
Clause 90, as amended, agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 168:
After Clause 90, insert the following new clause:
("Appropriation of land
. After section 110 of the 1957 Act there is inserted the following section—
"Appropriation of Part V land for other purposes.
110A.—(1) Where a local authority have acquired or appropriated any land for the purposes of this Part of this Act they shall not, without the consent of the Minister, appropriate for any other purposes any part of that land on which there is a house.
(2) Any consent under this section may be given either generally to all local authorities or to any particular local
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authority or description of authority and either in relation to all kinds of houses or to any particular house or description of house.
(3) Any such consent may be given subject to such conditions as the Minister sees fit to impose.".").
The noble Lord said: I spoke to this amendment with amendment No. 164, and I beg to move.
On Question, amendment agreed to.
Clause 91 agreed to.
Schedule 10 agreed to.
Clause 92 [Housing subsidy from local authorities]:
Baroness FISHER of REDNAL Baroness FISHER of REDNAL moved Amendment No. 169:
Page 64, line 37, at end insert—
("(3) In calculating the amount of housing subsidy payable to a local authority no account shall be taken of any receipts by the authority in respect of the sale of any dwellinghouse so long as any debt charges remain outstanding in respect of that dwelling.").
The noble Baroness said: In moving the amendment that stands in my name and that of my noble friends, I should like to link with it Amendment No. 170 in the name of the noble Lord, Lord Greenwood of Rossendale. I should like to link the noble Lord's name with Amendment No. 169, as unfortunately he cannot be with us at the present moment. This amendment that we have put down indicates one of the reasons why we are finding it practically impossible to assess the potential long-term effects which will arise from a statutory sales policy as envisaged in this Bill and that affect the housing revenue account of a local authority. The debt charges will obviously be affected, the money being borrowed over a 60-year period as distinct from the kind of mortgage in which the money is borrowed over only a 25-year period.
There are few capital receipts that arise on the selling of council houses, as has been proved by most local authorities, because most sales are financed by mortgages from local authorities. Capital receipts are relatively small in relation to the properties sold. If my research is anything to go by—and I stand to be corrected by the noble Lord—most tenants who make a purchase are asking for a

619
mortgage from the local authority of anything from 95 to 97 per cent. Therefore, any capital receipts that arise are only to the extent that a sale is privately financed. If the local authority give a mortgage of 95 to 97 per cent., it is merely substituting mortgage income for rent income. It does not receive any capital lump sum; it does that only when the sale is privately financed.
I would draw your Lordships' attention to the fact that in the private sector owner-occupiers are assisted in their house purchase by tax relief, in the same way as the council house tenant is helped with his rent by subsidy payments. I am not suggesting what I might call tax relief subsidies, but just a form of help such as is given to owner-occupiers with their mortgages. There is no provision in the private sector for the Exchequer to claim a refund when an owner-occupied property is sold. What we are asking is: why should the Government expect anything from the sale of a council house?
One recognises that the Government would prefer mortgages to be financed by building societies, since private finance brings immediate capital receipts to the local authority and to the housing revenue account, which helps the Government in their policy of curtailing the public sector borrowing requirement. But I think the noble Lord will agree with me that building societies are not finding it easy to satisfy all the demands for mortgages in the private market, and, so far as I have been able to ascertain, there has been no marked enthusiasm on the part of any building society to get really involved in the council house market. There have been one or two separate and individual mortgages, but no building society has come out and said, "Yes, we are in the market."
In conclusion, may I say that I hope the noble Lord, Lord Bellwin, will consider this amendment very seriously, bearing in mind that if there has to be an incentive for local authorities to sell houses, that incentive should surely be that they ought to be able to keep all the capital receipts that arise from a sale. I beg to move.
Lord HYLTON: This is a very interesting amendment to a very complex part of the Bill, and it prompts me to put this
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question to my noble friend on the Front Bench. Does he think there will be many occasions when the price at which a council house is sold, less discount, is less than the outstanding loan debt on that house? If this does happen, who will pay for the difference? Will it be central Government or will it be the local authority?
Lord BELLWIN: May I begin by saying to the noble Baroness, Lady Fisher, that experience has shown that somewhere between 20 and 25 per cent. of all sales of council houses are financed privately by the people who buy them. The balance comes from mortgages given by the local authority. As to her point that there is no enthusiasm by building societies, and that no building society has come out and expressed great enthusiasm, I can only tell her from my own personal experience that there was, in the past, no problem at all in getting local building societies, in the area from where I come, to become involved.
That is not the same as saying that building societies have come out and made a statement along the lines which she might like to hear. Also I entirely take her point that at the present time that would be additional competition for mortgages, when funds are less available than one would like them to be. So I take that part of her argument as being fair. But I hope she will accept from me the point I made about the experience hitherto. That is not to say where we shall go from here, because these are difficult times for the building societies. But so far, anyhow —from where I stand—so good. The noble Baroness may not see it in that way, but that is my experience so far.
Even though the Committee will be anxious that we should be moving on, I feel that your Lordships would like me to explain precisely how we see the position at the present time. When a council house is sold, subsidy is withdrawn accordingly. An authority's admissible capital costs are reduced and subsidy is thus no longer payable on the loan charge relating to those costs. At present, the reduction in admissible costs is, in all cases, taken as the historic cost of provision. Where the sale price is greater than historic cost, the local authority benefits from the entire difference between historic cost and sale price. Where the

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sale price is lower than historic cost—and this is the point which my noble friend Lord Hylton made—the authority have themselves to fund the difference between sale price and the cost of provision. These rules are contained in the general determination issued under Section 2 of the Housing Rents and Subsidies Act 1975. If we were to alter them now, a change in the determination, not in the statute, would be needed.
We have indeed, however, proposed that we should frame different rules to come into force on enactment of the Bill. These are designed to reflect more faithfully the Exchequer's role and interest in sales of council houses. Thus, where the sale is below historic cost to a purchaser who invokes, or could have invoked, the right to buy, we are suggesting that subsidy should be reduced according to the sale price: it follows that the difference between cost and sale price will, in those circumstances, be reckonable for subsidy since it seems only fair that an authority should not suffer a visible and immediate loss resulting from discharge of its statutory duty. Where, however, sale price exceeds historic cost, it is only equitable that the Exchequer's contribution to public sector housing should be recognised in taking a share of the benefit.
No single figure for Exchequer subsidy can apply to all houses alike. On this ground alone, it is reasonable to suggest a 50/50 sharing as proposed in our consultation paper. It is also relevant that between 50 and 55 per cent. of reckonable expenditure by local authorities is at present estimated to be met by Exchequer subsidy. With that estimate in mind, our proposal seems fair and based soundly.
That is our positive reason for advancing our proposal. The counter-suggestion contained in the amendment is objectionable in more than one respect. I imagine, for example, that I am safe in not taking at face value the suggestion that so long as any debt charges remain outstanding no Exchequer subsidy should be withdrawn at all. That would enable a local authority to apply its receipts from a sale to a purpose other than debt redemption as they are quite entitled to do—in the knowledge that in that way the costs of the dwelling would still feature in the subsidy calculation. Similarly, I am prepared to be reassured that the amendment is not designed
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to count as reckonable expenditure any shortfall between sale price and cost, where sale has taken place on a voluntary basis. It goes almost without saying that both these side-effects would be unacceptable.
Even though these may be unintentional, the point remains that we believe the proposal we have advanced on reduction of subsidy is reasonable and ought not to be set aside by this amendment. Moreover, the basis for reduction of subsidy on disposal is the kind of detail which has been, and should in our view continue to be, the subject of detailed rules rather than of provisions in the Bill.
Finally, one particular argument advanced in support of this amendment seems to me to be misconceived. There is no valid analogy with the owner-occupier on a mortgage who receives tax relief on his interest payments. In the case of council housing, subsidy is paid and withdrawn according to the property concerned and subject to its remaining in public ownership. Tax relief, however, is personal and payable to an individual in respect of his main residence, regardless of which particular property he happens at the time to live in.
Once again, we are getting into complicated areas, as seems to be inevitable with the Bill. I hope that after the explanation I have given, the noble Baroness may feel able to withdraw the amendment.
Baroness FISHER of REDNAL: I thank the noble Lord for what he has said. One is at a distinct disadvantage when listening to somebody who is reading a very complicated answer. Unless one is able to take shorthand and transcribe almost immediately, one is in great difficulties.
The noble Lord spoke about the detailed rules. It would be good if we could see them; then we should know what he was talking about. Our difficulty is that we do not have them; we do not even know what they are. If I had had the detailed rules, it might be that this amendment would not have been moved.
My point in reply is that the suggestion in the consultation paper was that the 50 per cent. which the local authority

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keep should become part of the housing investment programme of a local authority. Whether in the rules the Secretary of State will make that compulsory we do not know. We shall have to wait for the rules. The Government argue that the money from sales will go towards the replacement of the houses which have been sold. Even when a private mortgage allows a local authority to receive the full sale value as a capital receipt, given the discounts that will fall below the cost of replacement. Therefore the 50 per cent. which the Government are suggesting should go into the housing investment programme will be nowhere near the amount that might have been expected because of the very generous discounts which the Government are giving on the sales side.
Lord BELLWIN: May I put right one or two of the points which the noble Baroness has just made? First, the Government by no means say what an authority should do with the 50 per cent. that it will keep. A local authority may use it to supplement its housing programme in any way it likes: by spending the money on repairs or improvements, or on building new houses, or whatever. But if a local authority wishes not to spend the money on housing, that will be its prerogative. It will be able to apply its own capital receipts as it wishes.
I do not accept the basic premise that because one sells a council house to a sitting tenant one has to build a replacement. I have said time and time again when talking of the right to buy that this is not the object of the exercise. There will be no need to build a replacement for every house which is sold. Heaven forbid that we should go back to the arguments which we had last Thursday! I am sure the noble Baroness knows that the Government do not see it that way. This has not been necessary hitherto when sales have taken place and it will not be necessary in the future.
I take the point that it is difficult to follow some of these complex arguments, but if I were to deal with them more slowly it might have a counter-productive result so far as getting on with the Bill is concerned. There will always be the record to show what has been said and the
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opportunity to take up any points. When I said the "nth time" last time, I was told that that was the end, but I understand the "nth" time to mean infinity, which goes on and on. So I will say, for the "nth" time, that should any further clarification be required beyond what has been said, the noble Baroness has only to ask and I will do my best to make it clear.
Baroness BIRK: Whether or not it is for the "nth" time, unless everybody is satisfied that everybody is reasonably housed in this country and that there is not a waiting list, how on earth can one talk about not replacing housing stock? We do not want surplus housing stock, but unless people have a home it does not make sense. I do not expect the noble Lord necessarily to answer that point now. He can answer it after my noble friend has replied.
Lord UNDERHILL: The noble Lord the Minister said that he hoped we should not go over the discussions that we had last Thursday. I am an innocent abroad and it may be that there are experts in the Committee, but I am wondering how many other noble Lords are really confused, as I am, as to exactly what will be the position of a local authority when it looks at its finances. When I raised this question in a previous discussion the Minister asked us to leave it until we dealt with the financial implications.
I am still not satisfied about what will be the implications for a housing authority which still has a substantial number of years outstanding in loan charges. In view of the 33 per cent. discount—and it may be a 50 per cent. discount—it may face a quite serious financial position. In the absence of any details about the meaning of clauses or any document which shows exactly how this will work out in a number of examples, I am certain that most of your Lordships, except those who are well informed, are taking a pig in a poke. We just do not know exactly how this will work out.
8.37 p.m.
Lord BELLWIN: I must give an exposition of the financial implications. First, the Notes on Clauses which I have seen on this, such as they are, would serve only to confuse still further. There is

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absolutely no question about that. Perhaps the noble Lord, Lord Underhill, will take my word for it. What can one do other than quote from experience? The fact is that my own former authority's housing revenue account is today benefiting to the tune of over £1 million a year on sales of houses already made. I am leaving aside any other profit. That is very significant. It will be selling more houses, so it will not be long before that figure can be doubled and trebled. That is a very significant benefit to a local authority.
I know of the arguments that have been put forward by people who have carried out surveys and made prognostications, to the effect that this may be so for a time but in so many years' time that profit situation will turn into a deficit situation; and where, they ask, will you be then? I can only refer noble Lords to the document put out by my right honourable friend in another place, which is there for everybody to see and read, which confirms that there is every reason to believe that for at least 20 years the profit should continue. If one looks at the price of properties 20 years ago and their price today and if we go up to 20 years ahead, that should be satisfactory.
Nobody argues about the fact that there is a gain and a profit to the person who buys. Here, though, we are concerned only about what is the position of a local authority, what will happen to its housing revenue account and what then it will be able or unable to do as regards its spending. I can only refer noble Lords to what I have said.
May I add that the figures that one sees in the many different surveys and calculations made by different groups of people always come down in the end to the facts which you feed into them. The figures are as good as the assumptions you put in. One assumes certain rates of rent increases on the one side and one also assumes what the levels of inflation will be. Those affect what the cost of repairs and maintenance will be, and one takes a supposition regarding the cost of management and so on in the future, and then feeds all those suppositions into the calculations on the one side and the other. One can come out at the end of the day with whatever one feels one would like to have.
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Having said that, I return to my first point and say that the only thing that we can quote as fact, not as supposition, not as calculation, is the actual financial experience of those authorities who have been doing it on some scale for some time. When I quote those, as I do, I come out with the kind of figures I have just mentioned. I do not know how helpful or how mystifying that is to the noble Lord, Lord Underhill, or to anyone else; it is meant to be helpful. I would gladly confirm, in any form, anything which I have said, in any way they would wish. I just hope that it is helpful.
Baroness FISHER of REDNAL: I thank the noble Lord for what he has said, and also my noble friends who joined in supporting the amendment. The thing that worries me is that lots of people feed lots of different figures into different things, and different things come out. We have to take it, from what the noble Lord says, that the figures his department pushes in are the right figures, and the right figures come out of the box. Therefore we have no alternative but to reckon that they are backing a winner. What we are saying is that we are not so sure that they are. I would have said it is impossible to assess the potential long-term effects of the statutory policy on the housing levy account. The noble Lord has had his experiences. I should like to say that I have had experiences as well. My experiences do not bear out what the noble Lord has said.
On Question, amendment negatived.
[Amendment No. 170 not moved.]
Clause 92 agreed to.
Clause 93 [The base amount]:
The DEPUTY CHAIRMAN of COMMITTEES: I should explain that Amendment No. 171 pre-empts No. 172, and if No. 171 were agreed to I should not be able to call No. 172.
Lord STEWART of FULHAM Lord STEWART of FULHAM moved Amendment No. 171:
Page 65, line 15, leave out subsection (2).
The noble Lord said: Subsection (1) of Clause 93 tells us about the base

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amount, which is one element in the subsidy. Subsection (2) then gives the Secretary of State power, if he is of opinion the particular circumstances require it, to adjust the base amount for any year by increasing or decreasing it, either generally or in relation to any description of authority or any particular authority. One could hardly have a more wide and general power than that. I should like to ask the Minister what is the value of putting in the base amount as one of the elements determining the subsidy if the base amount can apparently be moved up or down at the judgment of the Secretary of State.
The Secretary of State issued a consultation document to local authorities, and one paragraph of it deals with this subsection. It says:
"Such a power"—
that is, the power to vary the base amount—
"might be exercised, for example, where one housing authority had transferred property to another during the currency of the 1975 Act and had made special arrangements for making over each year a payment representing 1975 Act subsidy attributable to the property concerned. In such a case it seems simpler to make appropriate adjustment to the base amount of the transferring authority so as to dispense with the payment.
I have read that at some length because it shows that this is, as far as I can see, a unique example. The assumption is that one authority has transferred property to another and in consequence has to make payment to that other authority in respect of subsidy. We are told that if that happens the Secretary of State will use his powers under this subsection to adjust the base amounts, presumably both authorities so that the payment between them will no longer have to be made. Surely the special feature of that example is this. The local authority who get their base amount reduced do not suffer any loss because they do not have to make the payment they were making to the other authority. That seems clear enough from this paragraph in the consultation document. It is a mere convenient adjustment, and one can see the point of it.
As I say, that is the only example given in the consultation document of the use of this power and it is an example of such a nature that the local authority who get their base amount reduced do not, in fact, suffer any loss, but the base amount
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is only being reduced because that authority are no longer going to have to make the payment they used to have to make. Can the Minister tell us that in any use he makes of this power under subsection (2) the result will be that a local authority who get their base amount reduced will not in the end suffer a loss? I do not think he can. If he can, well and good, and we need not bother about the subsection; but if this power to reduce the base amount can be used in a way which causes certain local authorities to suffer a loss we really ought to know what are the circumstances in which that would happen.
What we are told about the circumstances so far is that it is simply if the Secretary of State is of opinion that the particular circumstances require it. We were discussing a little earlier, in another context, the powers of the Secretary of State under the Bill and the degree of his accountability to Parliament. I think I am right in saying that the Secretary of State will in no way be accountable to Parliament for any use he makes of the power in this subsection to vary base amounts up or down. I repeat, therefore: why does he want to do it? The only example of a good reason for doing it that has been provided so far is one of an entirely special character that does not cause the local authority who have their base amount reduced to suffer any loss. As I say, if the Minister can assure us that that will always be the case—that if a local authority have their base amount reduced under this subsection it will always be done in circumstances that will cause the local authority to suffer no loss—well and good. But if that is not so, and I do not suppose it is, we really are being asked to give the Secretary of State almost unbelievably wide powers.
This illustrates again what a handicap we are under in not having Notes on Clauses for this Bill. I must say I listened with great interest to an excuse I do not think I have ever heard before, in many years of Parliamentary experience, not here but elsewhere—that we were not being provided with Notes on Clauses because, if we had been, we would have been even more confused than before. It looks as if the Bill is like that famous book owned by the magician Merlin, in which he said:

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"And none can read the comment but myself; and none can read the text, not even myself".
This really will not do. I hope the Minister will give us a convincing reason why the Secretary of State should have this power to shunt the base amount up or down if he is of opinion the particular circumstances require it. I beg to move.
Lord BELLWIN: I think I should first of all put the record straight by pointing out that I did not say that the reason the Notes on Clauses were not given was because they would be confusing. What I said was that I thought that such of the Notes on Clauses as I had seen would be confusing, which is really not the same thing.
Lord STEWART of FULHAM: Will the Minister allow me? Do I understand that there are other Notes on Clauses that he has not seen, which would be elucidatory and not confusing; and if there are such notes, why has he not seen them?
Lord BELLWIN: I do not think the noble Lord should put words into my mouth or say I said things I did not say. If the noble Lord wishes to draw those conclusions then, of course, he is entitled to do so, but I did not say it. It is up to the noble Lord to take it any way he likes.
The power proposed in Clause 93(2) to adjust base amounts will prove useful both to the Secretary of State and to housing authorities. We can in fact envisage precise circumstances in which we should want to invoke it. First, where transfers of property have taken place from one authority to another, notably from the GLC to other authorities (and possibly in transfers from Birmingham to Solihull) we are at present forced by the terms of the 1975 Act into the somewhat cumbersome arrangement of paying subsidy to the transferring authority for them to pass on. For the future we would propose tidying this up by increasing the base amount for the transferee authorities and reducing it for the transferring authority. The GLC incidentally have welcomed this proposal.
Secondly, the power provides a convenient means of transferring subsidy entitlement from new towns to local authorities when there are future transfers
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of housing. Thirdly, under the Housing Rents and Subsidies Act 1975, when a property is disposed of subsidy is reduced at the start of the next financial year. For property disposed of in 1980–81, one convenient means of making adjustment would be through a reduction in the base amount for 1981–82.
These are examples. There could be other circumstances, as yet unforeseen, where it would be useful to have this power of adjustment. Noble Lords will note that this discretion is similar to that proposed at Clause 45(5) in the Labour Bill. I hope that will reassure them that it has no sinister implications, and I hope the use I have outlined shows that it will be of practical value. In the light of this explanation, the noble Lord may feel able to withdraw Amendment No. 171.
With permission, I will speak also to Amendment No. 172, which seeks to ensure that where this power is used, the local authority concerned should have been consulted beforehand. I hope it will reassure the noble Lord to know that where the Secretary of State intends to change any element in the calculation of housing subsidy, whether the base amount or any other element, he would consult on his proposal as a matter of course. He would consult either the local authority associations or an individual authority, depending on whether numerous authorities or a single authority stood to be affected by his decision.
There are two opposing arguments that can be advanced in circumstances where consultation will in practice take place. The first is that a formal consultation obligation imposes no additional burden on the Secretary of State and therefore ought to be applied universally. There is, however, the counter-argument that because assurances of consultation are not given lightly and because the practice of consultation is well established, a formal requirement adds nothing of substance and is unnecessary.
These two arguments seem to us to mark extreme positions. We have instead taken the view that the statute should prescribe prior consultation for the most important decisions, thereby underlining their significance; but that it is unnecessary to write into the law a formal obligation in respect of each and every case where

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consultation would in practice take place. We have therefore confined the obligation to consult to those cases where the Secretary of State is to make a general determination affecting all local authorities on the two key elements of the subsidy calculation—that is, reckonable expenditure and reckonable income. I believe that this is a sensible boundary line.
The only other comment I would add to the points made by the noble Lord, Lord Stewart, is that adjustments to the base amount would in fact be made only after consultation, and frankly 1 am not sure how far that goes to answer his point about whether the reduction or increase would apply only in one situation or another. I suspect that it does, and I think he may be comforted by the fact that it is such a similar proposal to what was in the previous administration's proposals in this direction, in which case he may well feel able to withdraw his amendments.
Lord SANDFORD: As my noble friend's remarks have embraced Amendment No. 172 I wonder whether I may comment before the noble Lord, Lord Stewart, responds, to say that in my view the spirit of Amendment No. 172 ought to commend itself to my noble friend and ought to be accepted, but with further amendment to make it applicable not just to a single authority but to authorities in appropriate cases or even to associations of authorities. My view and that of the Association of District Councils is that this is a point on which they would like the requirement to consult to be incorporated in the statute, and therefore I would support Amendment No. 172 if the noble Lord opposite were to move it, or, better still, to invite my noble friend to consider carefully adopting this amendment and coming forward with one along those lines at the next stage.
Lord PITT of HAMPSTEAD: I would support the noble Lord, Lord Sandford, on that. I was going to make a suggestion along those lines because I feel that the base amount is as important as the reckonable expenditure or local contribution and I think consultations should be obligatory on all three. I hope the Government will accept the suggestion made by the noble Lord, Lord Sandford.
Lord STEWART of FULHAM: I have listened carefully to what the Minister has said. I noticed that all the examples which he gave of the use of this power were of exactly the same kind as in the consultation document issued to the local authority; that is to say, they apply where there have been transfers of property from one authority to another and the use of this power would be not much more than a bookkeeping arrangement, more convenient than leaving the transfer payments to be made. We are still left with the fact that the Secretary of State is given a very wide power which can be used in circumstances which, as the noble Lord, Lord Bellwin, himself said, cannot be foreseen. One cannot be entirely happy about that.
However, since the debate has been widened by the inclusion of the next amendment I noted what the noble Lord, Lord Bellwin, and the noble Lord, Lord Sandford, said on this. I hope the Minister will consider carefully what his noble friend has said and consider whether, in this context, and possibly in a similar context in Clause 94, he might not write the duty of consultation in some form into the Bill. I hope he will consider that suggestion before we come to the next stage of the Bill; but, with that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord STEWART of FULHAM Lord STEWART of FULHAM moved Amendment No. 172:
Page 65, line 16, after ("may") insert ("after consultation with the authority concerned").
The noble Lord said: I move this amendment formally and invite the noble Lord to say whether he will be able to act on the suggestion that has come from both sides of the Committee. I beg to move.
Lord BELLWIN: Speaking for myself, I rarely believe that it is right to write into legislation a requirement for consultation. We have had a number of debates in a number of different spheres on this, and I am not in favour of it because in practice it can mean what people want to make it mean and it leads to all sorts of confusions and irritations. Consultation is something that people want to do, and that they should agree to do, but they should not be bound to do it, because once they are so

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bound they then begin limitations to it.
Having said that, I cannot give an undertaking. I will do what I have said so many times on this Bill; I will carefully discuss with colleagues the point made both by the noble Lord, Lord Stewart, and by my noble friend Lord Sandford, and if it is thought that we can usefully add something in the way that is required, then of course we will do so. It may even be that we shall want to talk about it—dare I say to consult about it?—but I am afraid I cannot give an undertaking that it will be written in.
On Question, amendment negatived.
Clause 93 agreed to.
Clause 94 [The housing costs differential]:
9 p.m.
Lord PITT of HAMPSTEAD Lord PITT of HAMPSTEAD moved Amendment No. 172A, which was printed as follows:
Page 65, line 26, leave out from ("is") to end of line 30 and insert (" the aggregate of—

(i) the amount by which its reckonable expenditure for that year exceeds its reckonable expenditure for the preceding year (and accordingly is nil or as the case may be, a negative amount if its reckonable expenditure for the year of account is the same or less); and

(ii) a sum equivalent to payments of capital and interest actually received on disposal of property under Part I of this Act, and the sums which would have been due had purchasers exercising the right to buy not been entitled to any discount.").

The noble Lord said: I am in the embarrassing position of having to ask your Lordships to accept an amendment to my amendment. The fact is that certain words were left out. It may well have been my mistake and I am not blaming anyone for it. Paragraph (ii) says:
"a sum equivalent to payments of capital and interest".
Before "payments" ought to have been added "the difference between", so that it reads:
"a sum equivalent to the difference between payments of capital and interest actually received on disposal of property under Part I of this Act, and the sums which would have been due had purchasers exercising the right to buy not been entitled to any discount".
Your Lordships will recognise that that is obviously what I wanted to say because
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you will remember what I said on Second Reading. The purpose of this amendment is specifically to place an onus on central Government to pay the cost of the discount which they are compelling local authorities to give to their tenants. I think it is only right that that should be so, because, as Lord Hatch of Lusby said on Second Reading, the counterpart of the right to buy is compulsion to sell.
The Government are no longer allowing the local authorities merely to rely on their power to sell; they have got that power now. What the Government are doing is compelling them to sell and also compelling them to make a certain discount. I know that local authorities sell now and local authorities do in fact give discounts. But that is done at their discretion. What this Bill now does is to compel them not only to sell but to give a certain discount, whether they think that that is appropriate or not. I think in the circumstances the right thing to do is for the Government to follow the logic of their decision and agree to pay to local authorities the cost of that discount.
It seemed to me that the simplest way for them to pay the cost of this discount is to regard the discount as reckonable expenditure for purposes of subsidy. It seemed to me that would be quite straightforward, and it is in that sense that this particular amendment has been moved. I hope the Government will accept this. In effect I am inviting the Government to accept the logic of their own proposals.
When we were having an earlier debate there was a suggestion that we were dragging our feet because, when all is said and done, there will be plenty of houses built and therefore the selling of houses cannot be of such importance. Frankly, I agree that if we are building enough houses, then selling some is not a big issue. But what we have at the moment is a situation in which last year we had fewer starts than for the last 30 years, and since the housing finance programme has in fact been reduced the chances are that the year 1980–81 will be even worse than the year 1979–80. Therefore, what we are debating now is a situation in which, in spite of the scarcity of housing, we are being asked as a Parliament to compel local authorities to sell those that they already have. Be

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that as it may, we have already dealt with that principle. We passed Part I.
The question is now the financial consequences of the decision we made when we passed Part I. One of the financial consequences that flow is that there will in fact be a certain amount of shortage of money because of the fact that local authorities give as much as 50 per cent. discount. Fifty per cent. is a very high discount. It means that when you sell a property with a market value of £30,000 you reduce that by £15,000. If you do that 1,000 times it is £15 million. Therefore it is a large sum of money. What this amendment is saying—I keep repeating myself because I want the point to be clearly understood by all your Lordships—is that that £15 million, assuming 1,000 houses were sold in that fashion, should be borne not by the ratepayer but by the taxpayer, because it is the taxpayer, represented by Parliament, who is saying to local authorities, "Not only must you sell this asset but you must sell it at half price". I await with interest what the noble Lord the Minister will have to say. It is my view that equity demands that central Government pay that discount. I beg to move.
Lord BELLWIN: I was somewhat puzzled when Amendment No. 172A was first tabled, but now with the adjustment that has been made I will say that what this means is the Exchequer counting for subsidy the amount of discount allowed to the purchaser. There is, in my opinion, no justification for this, unless the discount creates a loss, when, as I have said on Amendments Nos. 169 and 170, the loss will count for subsidy.
I do not know how far I should go into detail on this question because to do so would mean covering some of the old ground. What it all boils down to is the belief, or otherwise, that one has in what will be the long-term effect of council house sales on local authorities—whether it will be to their advantage or disadvantage. One reason advanced in support of the amendment is that it would afford compensation to authorities. The order of transfer from the Exchequer to authorities promises, indeed, to he massive, but that is beside the point.
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In our debates on the right to buy, I tried my best to explain why we do not subscribe to the view that local authorities stand to suffer; indeed, on the contrary, in which case the question of compensation, whether via the subsidy system or any other means, just does not arise. I am glad that the noble Lord, Lord Pitt of Hampstead, felt that there was not much advantage in getting into the arguments that we have gone over so many times previously. I am anxious to help him, but where a sale, with or without discount, is less than the cost of provision under the right to buy, subsidy reduction will be on the basis of the sale price—that is, the Government will continue to pay subsidy on the difference and that will effectively underwrite any loss.
Where the sale is above historic cost, there is a benefit which the Government propose to share—as was said previously—with the authority, given that the Exchequer has contributed to the cost. No loss arises and there is, therefore, no cause for any underwriting by the Government. I think that it is clear enough. It is a question of the view one takes of what in practice will happen, and that is where there is a difference between us on the matter. I am sure that noble Lords opposite hope that I am right and that their concern is not necessary. Beyond that, I fear that I cannot help. That is why we cannot accept the amendment. Perhaps, in view of what I have said, the noble Lord will feel able to withdraw his amendment.
Lord PITT of HAMPSTEAD: The noble Lord is certainly not able to withdraw the amendment and certainly will not do so. On Second Reading I indicated that I thought that the least the Government could do was to agree to pay 50 per cent. On this occasion I am demanding that they pay the whole lot, because my own view is that that is the equitable arrangement. It is all very well to say, "But if there is a loss, then it would be met by subsidy". I am talking about the Government deliberately depriving local authorities of what might be a profit. If I have an equity, a house, and it is worth £50,000, then it is worth £50,000 to me. Therefore, if the local authority has such a house, it is worth £50,000 to them. If the Government say to them, as they are saying, "You must sell that

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house for £25,000" then they are taking away, £25,000 from the authority. All that I am saying in the amendment is that if we compel the local authorities to sell their property below its value then we must compensate them for it.
Lord BELLWIN: It sounds all very right and proper until we start to look at from where the money came to build the house in the first place. We cannot get away from the fact that the subsidy came from the Exchequer. It is not good enough simply to say that it is the authority's house. My hat!, if it is still paying off—as it almost certainly will be because funding is over a 60-year period—then to whom is it paying off? It is paying off to where the subsidy came from in the first place. No, I do not accept the noble Lord's basic argument and I am sorry that I cannot help him.
9.12 p.m.
The DEPUTY CHAIRMAN of COMMITTEES (Viscount Hood): The Question is, That Amendment No. 127A be agreed to. As many as are of that opinion say "Content". To the contrary "Not-Content". I think the "Contents" have it.
Several noble Lords: Not-Content.
The DEPUTY CHAIRMAN of COMMITTEES: Clear the Bar.
Tellers for the "Contents" have not been appointed pursuant to Standing Order No. 50. A Division therefore cannot take place, and I declare that the Not-Contents have it.
If Amendment No. 173 is adopted I shall not be able to call Amendments Nos. 174 or 175.
Lord STEWART of FULHAM Lord STEWART of FULHAM moved amendment No. 173:
Page 65, line 15, leave out subsection (2) and insert—
(" (2) A local authority's reckonable expenditure for any year shall include any expenditure charged to the authority's Housing Revenue Account in respect of: —

(i) new housebuilding including the acquisition or appropriation of land for the purpose of Part V of the Housing Act 1957, and the acquisition of newly built dwellings and the clearance of land acquired under Part V of that Act;

638

(ii) the renovation of the local authority's own dwellings, including capitalised repairs, and environmental expenditure;

(iii) the acquisition of existing dwellings for continued housing use, including any capitalised initial works carried out within 12 months of acquisition;

(iv) the acquisition of vehicles and of moveable and immoveable plant, machinery and apparatus;

(v) the renewal or replacement of vehicles and the installation, renewal or replacement of moveable and immoveable plant, machinery and apparatus;

(vi) the management, maintenance and repair of buildings within the Housing Revenue Account;

(vii) the discharge of such other of its functions as the Secretary of State may determine.").

The noble Lord said: I am hoping that one of my noble friends will bear the burden of explaining this amendment. I think she is here.
Baroness FISHER of REDNAL: I apologise to the Committee. I hope that noble Lords will be as concerned about the subsidies part of this Bill as they have been about those parts of the Bill which affect the private tenant living in private accommodation. The costs of subsidies, and the way they are outlined in the Bill, are of grave importance to the majority of people who live in rented accommodation in this country. Therefore, there are approximately five million people affected by how subsidies are going to be paid in the future by the Government. I say that as an opening to moving the amendment because so many people do not realise the subsidy make-up and how it reflects upon the rent that the council house tenant has to pay.
I accept that the Bill is introducing a new subsidy system for council housing, and I accept that it should be a much more flexible system. As the Minister said at Second Reading on 9th June, at column 25:
"Instead of the somewhat indiscriminate present arrangements, subsidy will in future be directed to the areas which require it".
I presume from that that he means those areas with the greatest housing need and those houses in housing stress areas. In most cases these will be the large urban areas, the large towns, and the large cities. May I say to the noble Lord, Lord Sandford, who has spoken so eloquently as the chairman of the ADC, that I think

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in the main the stress areas will be those which belong to the AMA, and I speak as a vice-president of that organisation.
The subsidy proposals are outlined. I say "outlined" because here again the Minister in the other place said that he was hoping to bring forward very quickly the proposals that he was going to make, but the actual figures for subsidies, so far as I am aware, are not available at the present moment. It is important for us to recognise what provisions are going to be made. Local authorities are in grave difficulty at the present moment because they are not able to forecast the next year because no figures are available. What has to be decided at an early stage is what resources the local authority has to find from rents and from rates.
I am not one of those people who tend to talk in—
A noble Lord: Ho, ho!
Baroness FISHER of REDNAL: Was that very funny? I think I deserve an apology from the noble Lord.
Baroness BIRK: I do not know precisely what happened, but I think my noble friend deserves an apology.
Several noble Lords: Who did it?
Baroness LLEWELYN-DAVIES of HASTOE: An apology has been asked for. It seems that none of us was quite clear what happened to cause my noble friend Lady Fisher to seek an apology, but if a noble Baroness asks for an apology for some sort of uncouth interruption in your Lordships' Committee, she is entitled to one.
Several noble Lords: Hear, hear!
Baroness LLEWELYN-DAVIES of HASTOE: I suggest that in the interests of the Committee, some sort of gesture from the Front Bench opposite is required. Nobody wants to make a fuss over this. There was what I repeat was an uncouth interruption. Would the noble Lord, Lord Mowbray and Stourton, out of his usual courtesy, make a move?
Lord MOWBRAY and STOURTON: I am extremely fond of the Opposition
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Chief Whip. I merely gave a horse-laugh at what I thought was a rather funny remark which the noble Baroness, Lady Fisher, made when she said she did not like to speak much.
Baroness LLEWELYN-DAVIES of HASTOE: I do not think that quite constitutes an apology. We just need a courteous acknowledgment that perhaps it was unfortunate to laugh so loudly.
Several noble Lords: Apologise!
Baroness LLEWELYN-DAVIES of HASTOE: I am sorry to go on about this, my Lords, but we really cannot go on until the matter is resolved. The noble Lord is the only Whip present on the Government Benches. He is the Deputy Chief Whip—
Lord MOWBRAY and STOURTON: I am not.
Baroness LLEWELYN-DAVIES of HASTOE: Whatever the noble Lord is, he is the only senior Whip present and it is up to him to keep the proceedings of the Committee going. My noble friend Lady Fisher is not a compulsive speaker and it was an uncouth thing to laugh so loudly when she said she did not like speaking much. We all know there are many compulsive speakers in your Lordships' House, but she is not one of them. It is extremely ungentlemanly, if I may say so, of the noble Lord, after all this pleading, not to get to his feet and say something courteous.
Lord BELLWIN: As one of the very newest Members of your Lordships' House, what has impressed me so much since I have been here is the fact that not only did everybody tell me that the people here were kind and considerate—which I have found to be absolutely true—but that the standard of debate was of the highest order—which I have also found to be the case. I was also told that the courtesies were, in the main, extremely generous all round, and that I have also found to be the case. The other arena from which one may come, and from which I come, is much more vigorous, in the sense that the interjection, the heckle aloud, and the interruption are part of' the day-to-day routine. One has to go only a little way to the other place to

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hear an extreme example of that, if I may say so without being discourteous.
The noble Baroness, Lady Fisher, was undoubtedly interrupted in the middle of what she was saying, I am not sure by what and I am not certain that even my noble friend Lord Mowbray and Stourton is sure what it was. But whatever it was or was not, I am sure it was not meant to be offensive in any way. Maybe there was a moment of astonishment at a remark made, perhaps expressed in an over-exuberant form—whatever it may have been—but it is not for me to speak for my noble friend, who is quite capable of doing so far better than I, with all his years of experience in your Lordships' House. It seems to me that as we always have such a good understanding and mutual courtesy, one wants that always to continue. I am sure that nothing was meant of a nature which would disturb that very high standard, and I hope the noble Baroness, Lady Fisher, may feel able to continue her speech.
Lord MOWBRAY and STOURTON: Before the noble Baroness, Lady Fisher, continues, let me say to her straight away that she was rather like one of those people who ask for the answer "Yes"— and she got a sort of horse-laugh from me. In any event, I apologise if I upset her.
Several noble Lords: Hear, hear!
Lord MOWBRAY and STOURTON: I meant it in a sort of jocular sense. The night is getting on and we are having quite long speeches on amendments. While I would not want to offend the noble Baroness, when she said, "I would not like anyone to think I am speaking at length," I just gave a horse-laugh, and I apologise if that upset her.
Baroness FISHER of REDNAL: I accept the apologies of both noble Lords. May I say that I, too, have been in politics for quite a long time and I know of the hurly-burly of being on a local authority, as well as the hurly-burly of another place. One accepts that there is a different code in this place, and I objected to that code being broken. I was not saying that I was not going to speak at great length. The noble Lord has now encouraged me to speak at greater length.
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I was trying to point out that the Bill must be read very thoroughly if we are to understand it, and the clauses relating to the subsidy must he read particularly thoroughly. I have read them as thoroughly as I can in order to try to understand them. For quite a long time during my public life I represented the inner city of Birmingham, and I know full well that the people who live in that area depend to a certain extent on council housing. The subsidies are important to these people because they reflect on their rates.
I am prepared to be corrected by the noble Lord if I am wrong, but I reckon that all the existing subsidy entitlement will be added together to form the base amount. There will be added to, or subtracted from, this base amount changes in reckonable expenditure which the authority is assumed to have incurred during the year.
Each year the Secretary of State, after consultation, will announce changes in the authority's deemed local contribution. One expects that the Secretary of State will in fact normally ask for an increase in the local contribution. At least one presumes this; at the moment there are no figures to show which way he will decide. As I say, the change will in fact normally be an increase, and then the local authority will have to decide to what extent this increase is met from rent or rates.
Clearly the amount of subsidy which a local authority will receive under the new provisions, based on what is chargeable as reckonable expenditure, will be of paramount importance. Local authorities will have to press for a very realistic treatment of their items of expenditure on an individual basis. Obviously their commitments will vary from area to area. The commitments of those authorities that are represented by the Association of Municipal Authorities will vary considerably from the authorities represented by the ADC.
In my view, the new system for the first time places the level of services provided by the local authority under central Government scrutiny. It is imperative that the reckonable expenditure should be realistic, and those local authorities that try to improve their services should not be penalised. Many local authorities

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are involved, and one must take into consideration what the Bill says about the tenants' charter. In considering what is reckonable expenditure there must be taken into account such items as rooms where tenants can meet, the provision of both more decentralised depots, where tenants can see about repairs, and offices where they can pay their rent more conveniently or get in touch with an official because they want a transfer. In my view all such things, if they are being undertaken by a local authority, should be considered as reckonable expenditure.
I would ask the Minister to remember, when he is thinking about this, that the realistic figure, being fixed locally, takes into consideration local circumstances. When I say that, I do not mean that the figure that Whitehall comes out with is the figure that should be paid. I have had experience, being a member of a local authority—and no mean authority, at that —and a member of the housing committee and its chairman for quite a long time, of constantly coming down to meet Ministers and their civil servants regarding the subsidy which ought to be payable. I remember on so many occasions that the Birmingham local authority had to come down and convince Ministers—the civil servants were not susceptible to our arguments—that Birmingham should have a subsidy because it built high-rise flats. It was only thought necessary for London to have a subsidy because they built high-rise flats.
We won the day. Then, only recently —when I say "recently", I mean during my last years on the local authority; that was in 1972—I was in a deputation that came down to meet the Minister regarding the increased price of paint and glass and all the necessary things that have to be carried by a repairs depot. The figures which were being quoted by Whitehall were completely out so far as concerns purchases of the building materials necessary to keep the houses in repair. This is what I mean when I say that it must be a realistic figure.
A decision on what is accepted as reckon-able is vital, because if expenditure is disallowed that automatically means that the burden will fall upon the local authority to decide either to cut out those items or to pay for them out of increased rents
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or a contribution from the rates. That is why we have itemised the various things in the amendment before the Committee. Under the new subsidy system, the Government would obviously have to consider the amount which is fixed as reckonable expenditure regarding the repairs of properties. At the present moment, while approximately 95 per cent. of new building counts as reckonable expenditure for subsidy purposes, only 30 to 50 per cent. is counted as reckonable expenditure on modernisation and improvement work. When we are seeing the big switch from new house building to making good and modernising older-type council properties, I would ask that the Minister should make quite sure that this is an area which is given added support. I beg to move the amendment.
Lord BELLWIN: Perhaps I may first deal with one or two of the points which the noble Baroness, Lady Fisher, raised. She made much of the necessity for taking local circumstances into account when reckonable expenditure is considered. I do not know what basis she would have a Government take, when she talks of fixing subsidies. She talks about realistic figures. What may be realistic to the authority may not be realistic to others. This would be a question of a judgement at the end of the day; and it would be hardly surprising, would it, if in fact an authority felt that its figures were not too low whereas a Secretary of State may consider quite differently.
Then, what are "realistic" figures? The costs of one authority are so different from the costs of another. The costs of the provision of services in one authority are different from those in another; and one of the great pluses we are going to get, hopefully, out of the Local Government Bill which is coming along is the fact that there will be more information which will be disseminated around, so that everyone will in fact know the relativity of one authority's cost to somebody else's cost of providing the same services. Therefore, it might then be easier to adjudicate on what are realistic figures. I hope that that will make a contribution to assuaging some of the fears which the noble Baroness may have.
As to the kind of reckoning which will be taken into account in coining to that

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conclusion, the noble Baroness said that the local authority which tried to improve services should not be penalised. It should not—so long as it takes into account, first, the wishes of the Government whose job it is to try to bring down inflation and to see that public spending is not beyond the levels that the country can afford. If it decides that its own wish to improve services is something which should take precedence over that, then that will not receive a very welcome response by Government. How could it?
There are too many authorities who are cocking a snook at or are happy to thwart the Government's policies in this direction. I am sure that the noble Baroness would not expect a welcome response from the Secretary of State to authorities which take that line, even though they may be saying they are there to improve their services. We all want to see these services improved. So long as we can afford it, it will then be done. So I will not take too much cognisance of that part of what the noble Baroness said. She presumed that the Secretary of State would ask for an increase from a local authority. I am not sure on what she bases that presumption. We should have to see.
The Government's fundamental opposition to this amendment is that it departs from the well-established principle in Clause 94; and in our view the Secretary of State should have a wide measure of discretion to act flexibly in determining reckonable expenditure. In this way that expenditure can reflect and continue to reflect the prevailing policy on what housing expenditure is or is not to be supported out of taxpayers' money. In taking this approach we are adopting, as it happens, a practice followed by the last Labour Government; and I am sure that should comfort the noble Baroness. Under Section 15 and Schedule 1 of the Housing Rents and Subsidies Act 1975 they took and operated powers of determination. Under them, the Labour Secretary of State of the day established his general subsidy rules setting out which capital costs were to be admissible and what expenditure related to these costs was to be reckonable for subsidy. He was also able to make special determinations so as to deal with subsidy in particular exceptional cases. Similarly there is to be found, both in the Labour Bill of
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March 1979 and in Clause 94 now, the proposal that the Secretary of State should have a wide measure of discretion.
Both out of principle and of well established, proven practice we would not want to write a definition into the statute as this amendment inflexibly proposes. Our basic objection apart, the amendment as drafted would force us to support all housing expenditure falling on the housing revenue account, despite sound reasons for wishing to do no such thing. Let me give four examples where the amendment would entail an Exchequer subsidy being paid out on housing revenue account expenditure where we would choose otherwise. The first is building expressly for sale under Part V of the Housing Act 1957. We have no proposal that expenditure on this activity should count towards subsidy as it would under subsection (1). Secondly, because we wish to restrain indiscriminate purchases which can easily result in a waste of public money, we shall only support municipalisation in exceptional cases. Under subsection (3), however, we should be committed to do so willy-nilly. Clearly, we could not have that. Thirdly, an authority may choose to proceed with a scheme which is, in our view, unduly extravagant. All else apart, as a matter of responsibility we need to be able to refuse support for such a case. Fourthly, under subsection (6) all expenditure on management and maintenance would count as reckonable.
We have already invited comment in our consultations on whether amounts related to the cost of managing and maintaining housing revenue account dwellings should become reckonable under the new system; but this would not mean counting in all such actual expenditure. Since there is no limit on its level, the amendment, in effect, invites the Exchequer to write out a blank cheque; and, of course, that we could not accept. On the other hand, the amendment fails to take account of some expenditure which does not fall on the housing revenue account, which is not at present reckonable and which we propose to count as reckonable under the new system. I have in mind in particular the case where an authority finance a capital scheme from capital receipts, and at present do so unsupported, even though the loan charges for repayment of debt would have been reckonable if they had chosen

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to borrow. In future, we propose to treat such a case as if the authority had borrowed, and thus to count notional loan charges as reckonable. By definition notional loan charges do not fall on the housing revenue account and are not therefore covered by this amendment.
I recognise the concern expressed by the noble Baroness—and so well expressed. I appreciate the intention behind her amendment. On the other hand, I would ask her in turn to accept from me that we are talking yet again about basic aspects of this whole Bill, which clearly we could not move away from because to do so in the way that she suggests would undermine much of what we are setting out to achieve. Whether or not that, with respect, is an aim that she and indeed noble Lords opposite support, I have to doubt. The fact is that this is what the Government are committed to do. It is what we feel is the right thing to do and it is for this reason that I fear I cannot accept this amendment.
Baroness FISHER of REDNAL: I did not for one moment think that the Minister would accept the amendment. I do not know why he thinks I presumed wrongly about the local authority contribution automatically being increased year
by year by the Secretary of State. I know full well that if he accepted the amendment it would undermine the basic tenets of the Bill. I understand that. That is where we differ, and differ fundamentally. If one looks at the financial provisions of the Bill, paragraph 28 clearly spells out the difference between the two sides of this Committee. The last sentence of paragraph 28 on the financial implications says:
"The subsidy system proposed will assist the Government to fulfil their intention of reducing over a period of years the overall level of public expenditure on housing subsidies by central government and local authorities".
My presumption could not have been wrong. It is clearly spelled out in the financial arrangements. It means to say that obviously the Secretary of State will be saying to local authorities quite clearly: "increase your local contribution and we will be decreasing our subsidy". That is clear and implicit and that is why I readily understand why the Minister cannot accept the amendment.
9.44 p.m.
On Question, Whether the said amendment (No. 173) shall be agreed to?
Their Lordships divided: Contents, 37; Not-Contents, 63.

CONTENTS

Airedale, L.

Gifford, L.

Ponsonby of Shulbrede, L. [Teller.]

Ardwick, L.

Goronwy-Roberts, L.

Birk, B.

Greenwood of Rossendale, L.

Ritchie-Calder, L.

Boston of Faversham, L.

Hatch of Lusby, L.

Ross of Marnock, L.

Brockway, L.

Houghton of Sowerby, L.

Sainsbury, L.

Brooks of Tremorfa, L.

Irving of Dartford, L.

Sefton of Garston, L.

Collison, L.

Janner, L.

Stewart of Alvechurch, B.

David, B.

Jeger, B.

Stewart of Fulham, L.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Stone, L.

Denington, B.

Strabolgi, L.

Evans of Claughton, L.

Morris of Kenwood, L.

Strauss, L.

Fisher of Rednal, B.

Peart, L.

Underhill, L.

Gaitskell, B.

Pitt of Hampstead, L.

Wigoder, L.

NOT-CONTENTS

Abinger, L.

Craigmyle, L.

Ferrers, E.

Airey of Abingdon, B.

Croft, L.

Fortescue, E.

Auckland, L.

Cullen of Ashbourne, L.

Gainford, L.

Bellwin, L.

Digby, L.

Gisborough, L.

Belstead, L.

Drumalbyn, L.

Godber of Willington, L.

Bessborough, E.

Ellenborough, L.

Gowrie, E.

Brougham and Vaux, L.

Elliot of Harwood, B.

Gridley, L.

Cathcart, E.

Elton, L.

Henley, L.

Cockfield, L.

Faithfull, B.

Holderness, L.

Cork and Orrery, E.

Falmouth, V.

Hood, V.

Hornsby-Smith, B.

Mountgarret, V.

Sandys, L. [Teller.]

Hylton, L.

Mowbray and Stourton, L.

Selkirk, E.

Killearn, L.

Moyne, L.

Sempill, Ly.

Lauderdale, E.

Murton of Lindisfarne, L.

Spens, L.

Long, V. [Teller.]

O'Neill of the Maine, L.

Trefgarne, L.

Macleod of Borve, B.

Pender, L.

Trumpington, B.

Margadale, L.

Rawlinson of Ewell, L.

Vaux of Harrowden, L.

Marley, L.

Redesdale, L.

Vickers, B.

Monk Bretton, L.

Rochdale, V.

Vivian, L.

Morris, L.

Romney, E.

Ward of Witley, V.

Mottistone, L.

Sandford, L.

Westbury, L.

On Question, amendment agreed to.

[Amendments Nos. 174 and 175 not moved.]
9.51 p.m.
Lord PITT of HAMPSTEAD Lord PITT of HAMPSTEAD moved Amendment No. 176:
Page 66, line 5, after ("with") insert ("and endeavour to obtain the agreement of").
The noble Lord said: This is a serious attempt on our part to try to secure agreement between central Government and local authorities on the question of reckonable expenditure. The Government have already conceded that that is the objective by including in the Bill the requirement to consult. But, of course, consultation can be a mere formality, and it is in order to try to find a form of wording that would make sure that it is more than just a formality that I have put down this amendment.
I do not necessarily insist on the Government's accepting the amendment in the way I have worded it. There may be a better way of ensuring the objective that I think we both have in mind. Therefore, if the Minister comes up with an acceptable solution I will take it. My own view is that we need to do more than merely say that the Minister must consult. This is my first try when I say,
"and endeavour to obtain the agreement of",
and there are probably better ways of doing it. I hope the Minister realises the motive behind the amendment and accepts that. I beg to move.
Lord BELLWIN: I did, indeed, understand the motives of the noble Lord, Lord Pitt, and I respect what he seeks to achieve. The problem is the one that I mentioned before, that it is a difference of view about consultation. A general determination of reckonable expenditure will encompass both large issues of principle over what expenditure is to rank for subsidy and points of intricate detail. We intend to issue very shortly further consultation proposals on a number of aspects of reckonable expenditure. I have every reason to believe that this consultation will be full and mutually beneficial.
On reckonable income, our consultation proposals will be framed in the light of the criteria set out at Clause 95(3). It is not yet possible to reach a clear view about expected movements in incomes, costs and prices for the first year of the new sub-
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sidy system, but our intention is that we should put forward consultation proposals in the autumn. Consultation here will mean what it says. The Secretary of State will naturally want to persuade the associations to endorse his proposals, and he for his part will heed their comments and take them into account.
I hope that, in these very few words, I have indicated that these amendments would not add to the sense of the formal requirements to consult already contained in Clauses 94 and 95. I also hope that again in just a few words I have shown the Government recognise and accept the importance of consultation on these two topics and will act accordingly. I do not know whether the noble Lord wishes me to elaborate further—I suspect that he does not—and in view of what I have said he may feel able on this occasion to withdraw his amendment.
Lord PITT of HAMPSTEAD: Yes, I recognised the difficulty of this amendment when I put it down. I merely hoped that the Government would recognise the spirit of the amendment and accept its spirit. In the circumstances, I will withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 94 agreed to.
Clause 95 [The local contribution differential]:
9.56 p.m.
Lord PITT of HAMPSTEAD Lord PITT of HAMPSTEAD moved Amendment No. 177:
Page 66, line 29, leave out subsection (4) and insert—
("(4) A determination under this section may be made for all authorities and shall be made known in the year preceding the year of account to the local authorities for which it is made.")
The noble Lord said: This is another attempt to see whether in some way we can circumscribe this wide power of the Secretary of State. We do not like the power of the Secretary of State to determine the local contribution for individual

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authorities. I throw it out to the Minister that it should be possible to agree guidelines with the local authority associations and to work along those guidelines. It is that which I genuinely hope the Government will see as the right approach. It is in that sense that I move the amendment and I hope that the Government will accept it.
Lord BELLWIN: A few moments ago we had quite an extensive debate with the noble Baroness, Lady Fisher of Rednal, on this matter and I think that we covered at least the philosophies behind the amendment which the noble Lord, Lord Pitt of Hampstead, has moved. I do not know whether there is a great deal more that I can add without going into the kind of detail which I suspect he would not wish me to do.
May I refer briefly to the special determination which may be made for individual authorities, since this might be helpful. This marks a difference from the Labour Bill and I recognise that at first it caused some disquiet in local authorities. I had hoped that the assurance given in another place by my honourable friend the Parliamentary Under-Secretary of State might have stilled those misgivings—and I still hope so, at least to a certain extent. He pointed out that we envisaged using this power solely when it would prove advantageous to the authority concerned. We are leaving scope to help individual authorities. I reiterate that undertaking.
Without going further into the kind of detail which would be necessary for the purpose of this amendment, may I say that we have given quite an airing to the subject and that clearly we see it differently. In those circumstances, I think the noble Lord will understand why I am unable to accept his amendment.
Lord PITT of HAMPSTEAD: Again I am not going to press the amendment. On this occasion I do not agree with the noble Lord. We do not seem to have narrowed the gap, but there is no point in pressing the amendment.
Baroness FISHER of REDNAL: I had expected to see the noble Lord, Lord Sandford, stand up.
Lord SANDFORD: I will in a minute.
Baroness FISHER of REDNAL: Then may I ask the noble Lord whether he is going to speak?
Lord SANDFORD: No, not on this amendment.
Baroness FISHER of REDNAL: I am surprised that he is not going to speak because I happen to be a Vice-President of the ADC as well as of the AMA. They sent me some literature which touched on this point of the local contribution differential. If the noble Lord, Lord Sandford, is not going to put the point of view of the ADC, I feel that somebody ought to put it, and I will take on that very humble role.
This is what the Association has asked us as the vice-presidents to take into consideration in the Bill:
"The Association is also concerned about the very wide and uncontrolled powers given to the Secretary of State under Clause 6 of the Bill in relation to local authority subsidies. It is felt, in particular, that any general determination of the local contribution differentials which will effectively settle the rent levels rate fund contributions of housing authorities should be made subject to the approval of Parliament under the Affirmative Resolution procedure, thus allowing debate on the decisions taken".
Perhaps the Minister can tell us whether, in the future, we shall he able to get these contributions made under Affirmative Resolution procedure.
Lord BELLWIN: I cannot so confirm. I doubt very much that it is the intention that it should be done in that way. Probably I do not surprise the noble Baroness too much by saying that, but certainly I have had no intimation from any source that that is the procedural way in which we should propose to operate. Therefore I really cannot hold out too much hope to the noble Baroness on this point. But I would repeat what I have said so many times. I know it is something that does concern the ADC. I am not sure of the extent to which it has been discussed in the past—I have not been privy to those discussions—but it may be that not necessarily that procedure but some other procedural

655
form might be satisfactory, and certainly I will look into that.
From what was said—was it only yesterday?; it seems like years ago—when we were talking about the same thing under the constitutional point raised by the noble Lord, Lord Foot, and when we had the benefit of the observations made by my noble friend Lord Boyd-Carpenter when the whole area of this question came up (I confess I learned something, as I do every day) it may be that that is one reason why we cannot move in that way. Nevertheless, I will take the point away just in case there may be something that could be helpful.
Lord SANDFORD: I should like my noble friend to note, following the remarks of the noble Baroness, Lady Fisher, the enormous self-restraint I am exercising.
Amendment, by leave, withdrawn.
[Amendment No. 178 not moved.]
Clause 95 agreed to.
Clauses 96 to 99 agreed to.
10.2 p.m.
Clause 100 [Interpretation of Part VI]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 178A:
Page 68, line 45, leave out ("or").
The noble Lord said: If it is convenient to the Committee, I will speak to Amendment No. 178B as well. These two amendments have one simple purpose—to permit us to pay the new housing subsidy to the Isles of Scilly. The Council of the Isles is not a district council and therefore does not fall within the present definition of a local authority in Clause 100. The amendments extend that definition to include the Council of the Isles. I beg to move.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 178B:
Page 68, line 46, at end insert ("or the Council of the Isles of Scilly.")
On Question, Whether Clause 100, as amended, shall stand part of the Bill?
Lord SANDFORD: I am afraid I have come to the end of my self-restraint for a moment. Clause 100 has a rubric which reads: " Interpretation of Part VI". That is the theme I should like to pursue for a minute or two. This Part introduces an entirely new system of housing subsidies. Many of us taking part in this debate have at various times been steeped in this complicated topic. The noble Lord, Lord Greenwood, for instance, has been Minister of Housing and is now a president of the AMA. The noble Baroness, Lady Fisher, speaks with immense experience from the city of Birmingham. The noble Baroness, Lady Denington, speaks from experience in almost every single field of housing, going back to various periods. The noble Lord, Lord Pitt, from the Greater London Council; the noble Baroness, Lady Birk, a previous Minister concerned with these things; the noble Lord, Lord Evans of Claughton, speaks from experience in Merseyside, et cetera. But all that experience comes from different periods and from different places, and if we are only furnished with a single paragraph —paragraph 14 in the Explanatory Memorandum—I would submit that we approach this subject with all this diverse understanding of housing subsidies and no adequate grasp of what the Government are actually intending.
This is a House which tackles Bills like this very thoroughly. Every item of the Committee stage is conducted across the Floor of the House; there is no selection of amendments, so every amendment is called and there is no guillotine. So the whole procedure can be very protracted and in fact it is very protracted. Therefore I submit it is highly desirable that we should be furnished with the Notes on Clauses which give us the material on which we can bring our experience to bear with a common understanding of what the Government are trying to achieve. I am now saying in public what I have been saying privately to my noble friend and my right honourable friends and to the noble Lord the Leader of the House for weeks and weeks past. If the Government are making slow progress they really only have themselves to blame, and I hope that the lesson will be taken before we start on the Local Government Planning Bill, because otherwise the progress will be

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even slower. That is the first point I wanted to make.
My second point is that we are dealing with this particular Part of the Bill against the background when the Government have announced their intention of abolishing the Parker-Morris standards and the housing cost yardsticks and when they have announced their intention of introducing project control. I should have thought it was desirable that we should know more about their intentions with regard to project control before the Bill is enacted, and I should be grateful if my noble friend could comment on that point.
My third point—and I will make this rather briefly—is that the new housing subsidies very properly introduce more flexible arrangements, but they are being introduced at a time when interest rates are high and fluctuating and the inflation rate is high and fluctuating. I hope that both will be coming down. But this introduces a legitimate reason for giving the Secretary of State fairly extensive powers, and he is certainly taking them. I should have thought it was desirable for some parliamentary supervision over the exercise of the Secretary of State's very wide powers under this Part of the Bill which enable him to influence and control the jurisdiction and expenditure of housing authorities. I ask my noble friend to consider that and to see whether some sort of provision can be included in Part VI whereby Parliament can be given some degree of supervision—not over the exercise of his powers in minor matters but if they have to be used to their extreme limits.
Lord BELLWIN: I was sorry that among the "Honours List" of local authority experience my noble friend referred to he did not include my own bona fides, which I now put on the table, and I hope it was not in any way reflecting adversely upon Leeds. I am sure he did not mean that it should. I will not make any further observation on the observations which have already been made on Notes on Clauses. I have had my say on that and I had rather hoped that everyone else would have had theirs, but apparently not so, and doubtless to the end of the day I shall he reminded at regular intervals. This is just one of the
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crosses which I have to bear, I presume. Well, so be it.
My noble friend asked whether I would say a little more about project control. I would only say of it, first of all, that I hope he will understand that the one thing that we do intend about it is that we should be doing as we are, and that is having consultations with the local authority associations on the best way of dealing with this, or should I say the best way of not dealing with this. I am not sure that it is not the provisions in the Local Government Bill, which will be coming here, that would lead to greater debate upon project control and all that goes with it. I rather think that would be the better area in which to do it. Meantime I can only say that it is not only the wish, not only the intention, it is happening: discussions are going on about the best way of going about that.
We recognise that local authorities are particularly keen to know our proposals in this matter, or, more accurately, our proposals about the relaxation of these controls. We cannot commit ourselves to a precise date, but we do aim to issue them as soon as possible once we have finalised all the proposals, and we are putting every effort into trying to do that. The Bill is similar to the existing subsidy system in allowing the Secretary of State discretion over what expenditure is reckon-able for subsidy. It is certainly indeed a novel feature of this system that the Secretary of State is to determine an assumed amount of housing income for authorities. Like the Labour Bill last year, we have taken the view that the formal consultation requirement in Clauses 94 and 95 constitutes an adequate safeguard for authorities.
I do not know what more I can say to my noble friend on this whole matter. I think that, as I suspect is the case with all Bills—and here I cannot speak from experience but I would imagine from what T have learned since being in your Lordships' House—that much is yet to come forth as to the breakdown of the regulations, details of project control and other aspects. It is not really quite fair to be overcritical that one does not spell out chapter and verse of every detail. I have read enough to know that there is a whole world of precedents on this, and I shall probably he told by those who have so much more

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experience and knowledge than I have that it clearly could not be any other way.
I think one would have to stand on that to answer my noble friend. I hope he will feel that, while it may not tell him all he wants to know, at least we do have the intention of doing these things as best we can, with the object of getting to where we feel we ought to be, and when we get there we shall have a better scene than we have at present.
Clause 100, as amended, agreed to.
Clauses 101 and 102 agreed to.
Schedule 11 [Amendments of Housing Act 1974 Part VII (local authority grants)]:
10.13 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 178C:
Page 113, line 16, at end insert—
("Consideration of application for grant
In section 57(3) (application not to be entertained unless certain conditions are complied with) for "entertain"substitute "approve".").
The noble Lord said: This is a simple amendment designed to allow local authorities to consider applications for grant from prospective purchasers of a property. At the moment the grant applicant must actually own the property before the local authority can even entertain his application. This can cause problems in cases where, for example, a building society needs to know in connection with a mortgage advance that grant aid for necessary improvement works will be available. This can be quite crucial in determining whether a sufficient advance can be made to finance the purchase. Many local authorities are quite willing to give an informal indication of the grant availability in such cases and this is usually sufficient for the building societies. But some, understandably, feel deterred from doing so by the very specific wording of the 1974 Act, and in these cases we have a classic chicken and egg, or perhaps in the modern idiom Catch 22, situation. The local authority cannot determine grant until the purchase is completed and the purchaser cannot get the mortgage to complete the purchase until the amount of grant is determined.
This amendment, therefore, is designed to remove any doubts which local authorities may have about their power to consider applications from prospective purchasers. Its effect is to enable the local authority to go as far as they like in considering such applications, short of formally approving them and thus committing themselves to pay. It should, therefore, provide an adequate means of resolving the Catch 22 problem to which I have referred without imposing any duty on local authorities which could lead them into a good deal of abortive work for frivolous or exploratory applications. I beg to move.
10.16 p.m.
Baroness FAITHFULL Baroness FAITHFULL moved Amendment No. 179:
Page 114, leave out lines 44 to 46.
The noble Baroness said: I beg to move Amendment No. 179. This amendment is a straightforward amendment concerning improvement grants for the disabled. It recommends that the words, "without undue hardship" should be deleted from the Bill. Under the Chronically Sick and Disabled Persons Act, doctors, occupational therapists and social workers are under a duty to recommend to the local authority adaptations and alterations to a house occupied by a disabled person, thus enabling the disabled person to attain the maximum amount of independence and the maximum amount of mobility—and I include children who are disabled.
Improvement grants are given for such appropriate work as is necessary, and much of it is structural work. The amendment recommends that the assessment of payments of such alterations should be left to the discretion of the local authority and that it should not be necessary to assess the disabled under the undue hardship clause. This Will cause a great deal of form-filling, assessment and bureaucracy, and I suggest that it is quite unnecessary and that we can leave it to the discretion of the local authority. I beg to move.
Lord MOWBRAY and STOURTON: In the interests of brevity it might be convenient if I speak immediately after

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my noble friend. I am grateful to my noble friend for bringing this matter before your Lordships' Committee. Your Lordships' concern for the disabled is a matter of record and it was in this House that the amendment was made to the 1974 Housing Bill which enabled work for disabled people to be defined as "improvements" for the purpose of grant aid.
The background to the rateable value limit for improvement grants is the view that if we are to direct resources towards those in greatest need, then there must be some limitation on the availability of grants. The rateable value of a dwelling has, in general, a broad correlation with one's ability to pay for its repair and improvement without help from the taxpayer—though there are, of course, exceptions. We recognised, however, that in the case of disabled people, this broad correlation becomes pretty meaningless and paragraph 6 of Schedule 11 is designed to give the local authority the opportunity to pay grants in hardship cases notwithstanding that the rateable value of the dwelling exceeds the set limit. The amendment now proposed by my noble friend would abolish the hardship requirement. The effect would be that there would be no rateable value limit in any case where the improvements consist of works which are specifically needed to meet a requirement arising from disability of an occupant of the dwelling concerned. Local authorities would therefore be free, at discretion, to award grants in such cases without any requirement on the grant applicant to establish hardship. Given this general discretion, it seems to me that we do not need the hardship provision and I am therefore happy to accept the amendment.
10.19 p.m.
Baroness FISHER of REDNAL Baroness FISHER of REDNAL moved Amendment No. 180:
Page 114, line 49, at end insert—
(".In section 64(3)(a) for "£2,000" substitute "£7,000" and for "£2,400" substitute "£8,000".").
The noble Baroness said: I shall be brief in moving this amendment and I hope that the noble Lord will perhaps be as kind to me as he was to the noble I
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Baroness, Lady Faithful], who spoke previously. This amendment is really trying to bring up to date the figures that are recognised as eligible expenses for grant purposes. The figures that are contained in the Housing Act were put in many years ago. I know that the Secretary of State has increased them since, and I understand at the present moment that the current eligible expenses limits are set in the order of £5,000 per dwelling and £5,800 for conversions.
What we ask in this amendment is to make these figures realistic, amend the Housing Act, and make sure that the figures are brought up to date, because in doing so we shall get many more potential improvers taking up the grant. I think that the noble Lord would agree that the improvement picture is really pretty bleak because of the high inflation, and that fewer and fewer people are taking advantage of improvement grants bearing in mind that they are not taking into consideration inflation in the grant level. The amendment is purely and simply to bring the figures up to a more realistic date; in other words, to amend something that happened five or six years ago. I beg to move.
10.22 p.m.
Lord MOWBRAY and STOURTON: If I hiccoughed before at the noble Baroness's rash remark when she invited a hiccough, I congratulate her now on her extreme brevity. I trust that the good rapport between us which existed previously is now re-established.
This amendment seeks to specify, on the face of the Bill, higher eligible expense limits for improvement grants. As the noble Baroness said, the limits specified in the Housing Act 1974 have since been increased by order; the present limits are £5,000 in normal cases and £5,800 for conversions of three storeys or more.
When it was decided to make the increases in eligible expense limits for the intermediate, repair and special grants which were announced on 23rd April, the Government considered whether also to make a general increase in the limits for improvement grants. The present limits for these grants were, after all, set at the same time as those for the grants for which increases are being made. We decided against such an increase pending

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the availability of the wider powers in the Bill which will enable limits to be set to reflect both priority needs and variations in cost in different areas. Outline proposals for the new grant system generally were included in the department's paper on this subject published on St. George's Day this year; and consultations with the local authority associations are in progress.
In considering changes to the grant limits, whether under the present system or under the more flexible system which will result from the changes we are making in this Bill, the main aim must be to make the most of the limited resources which are available—to direct those resources to the dwellings and to the people most in need. The grants for which we have already announced increases are only available for priority works; that is, the installation of essential amenities or the repair of dwellings where the grant applicant is in financial hardship. For the full improvement grant, the position is, however, much less clear cut. The great majority of these grants are paid only at the 50 per cent. rate, and in those cases increasing the eligible expense level to the £7,000 suggested by this amendment would benefit only those people who could afford to find the first £3,500 rather than the first £2,500 of their own money. For many people living in substandard housing the problem lies in finding the first £2,500 anyhow and they would gain nothing from this increase.
In housing action areas, however, the percentage rate of grant is already much higher—it is 75 per cent. already; it can rise to as much as 90 per cent.—and an increase in eligible expense limits in such areas does not impose anything like the same consequential burden on the occupier who therefore stands a much better chance of benefiting from the increase. It is for that reason that we have announced that we are willing to consider applications from local authorities for increases in the limits as they apply in housing action areas.
We intend to use the new powers under the Bill—which, if you are interested, are in paragraph 29 of Schedule 23—to even out to some extent the great differences which at present exist in the real value of grants. Because of differences in the cost of works, a grant in, say, London is
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worth very much less than the same grant in some other parts of the country. That makes little sense. The general intention would be to increase the levels for improvement grants by the same broad order of magnitude as has already been announced for other grants, but the very concept of differential limits is incompatible with further national increases to a single national figure. A national increase of the sort specified in the amendment would benefit both high cost and relatively low cost areas alike. Furthermore, since it could not come into effect until after enactment of the Bill, it would directly and inevitably clash with the new grant limits which the Government will be introducing at that time using the order—making powers available under the 1974 Act, as amended by the Bill.
If the noble Baroness is merely seeking in the amendment some indication of the Government's intentions with regard to the limits for improvement grants following enactment of the Bill, I hope that what I have said will reassure her. I cannot, at this stage, say exactly what pattern of eligible expense limits we shall arrive at in the autumn; we are still gathering and analysing cost information. What I can say is that in priority areas and high cost areas of the country, the amount of the increase which we shall be announcing will certainly not be less than the percentage increase already announced in respect of the smaller grants; that, I would think, would be of the order of 30 per cent. Pending the results of our consultations with the local authorities and others, I do not think I can go much further than that, but the new limits which we set will of course be laid down in an order which will he laid before Parliament. I hope, on the basis of what I have said, that the noble Baroness will feel able to withdraw her amendment.
Baroness FISHER of REDNAL: While I thank the noble Lord for that explanation, is he aware that some of it was not directly relevant to the amendment, which deals with a particular point? I am concerned that the present grant limits are below current prices. If owners were able to take up the grant with a higher percentage, they would not have to pay so much themselves; obviously, if one cannot get the maximum—because the grant has not been updated to take modern prices into

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consideration—then fewer people will be taking up improvement grants. In urban areas there are many young couples who would be willing to buy what we would call run-down houses at a reasonable price if they could be sure of getting a reasonable improvement grant, thereby saving that type of property, and I should have thought the Government would have been interested in that. The amendment is simply saying, "A figure was fixed in a previous Act. Please amend it to make it more suitable to present-day figures". Surely that is a very simple request.
On Question, amendment negatived.
10.30 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 181:
Page 116, line 39, after ("1957") insert—

("(a) section 60 above shall not apply; and

(b)").

The noble Lord said: This is essentially a technical amendment designed to disapply certain grant conditions—for instance, the need to supply certificates of future occupation—where a repair grant is given following the exercise of local authority compulsory repair powers. The effect is simply to bring the position in the case of compulsory repair action in line with that which already exists in the case of compulsory improvement when an intermediate grant is given. This is normally 50 per cent. I beg to move.
Baroness VICKERS Baroness VICKERS moved Amendment No. 182:
Page 119, line 20, leave out ("£5,000") and insert ("£6,750").
The noble Baroness said: On 15th May, Mr. Stanley wrote about his concern regarding conditions in some hostels. He said,
"We have already taken a series of steps to start dealing with the most pressing problems. I think it would be helpful if I outlined what we have done to date and what more is planned.
"We have increased the eligible expense limit for Exchequer assistance towards providing fire escapes to £5,000, a ten-fold increase on the figure previously in the Housing Bill"—
and for that we are very grateful. However, Mr. Stanley went on to state that,
"The Secretary of State will be empowered to go beyond this figure in individual cases".
I should like to suggest that there will be a great many individual cases in which he might take an interest.
The effect of the amendment would be to raise the maximum eligible costs level from £5,000 to £6,750, which, with the 75 per cent. limit on grant set by the Government, would provide hostel owners with a maximum grant of £5,000. But the expenses of most of the hostels are very high indeed, and I should like to mention one or two examples.
A Women's Aid Refuge for 30 women and children in South London—a charity, but not registered as a housing association —consisting of five adjoining terraced houses knocked into one, two floors high, with a third floor back addition, was required in 1979 to comply with the requirements of the G LC. The total costs at 1979 prices were £10,500.
The Salvation Army recently had to close a whole floor of its Victoria Hostel in Edinburgh, losing 30 beds for homeless single people, because it had to comply with works costing £15,000 to make the building safe. The special grant in this Bill does not extend to Scotland. Perhaps the noble Lord who is to reply can tell me whether Scotland can obtain help under any other legislation.
A British Rail hostel in Ilford, providing 200 beds for low-paid rail workers, had to be closed in February 1980 because £105,000 was needed to be spent to instal fire precautions. Over 20 men were made homeless after the run-down period.
The Church Army estimates that costs of works on fire precautions at its hostels nationally are never less than £10,000, and can reach £100,000. I wish to point out that the various hostels I have mentioned, particularly those of the Salvation Army and the Church Army, provide facilities which no other hostels provide. They are willing to take into their hostels anybody who is down and out.
There is of course a differentiation between hotels and hostels. Owners of hotels have automatically to comply with the Fire Precautions Act 1971 and must instal effective fire safety precautions. They can apply under Section 36 of that Act for a loan from their local authority to do the works, and they can then obtain tax relief on that loan. Obviously for

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many hotel owners this relief can amount to a considerable sum.
Voluntary agencies running hostels, in being required to comply with fire regulations, will, under the Bill as it stands, be eligible for a grant of only £3,750, and will have to raise all the rest from charity, gaining no relief on this exercise.
Finally, difficulties occur when there is a change of fire officer in a district. One fire officer may state that he wants this and that done, and the work may be started. But that fire officer then leaves the district. Another fire officer takes over and he has other ideas regarding certain buildings. I hope that the Secretary of State will be empowered to go beyond the figure now set down in the Bill. I beg to move.
The Lord Bishop of NORWICH: I should like to support the amendment moved by the noble Baroness, because I think it reflects a fairly wide concern, particularly in the voluntary agencies, and there is strong support for the easing of this particular grant and for making it slightly larger. As the noble Baroness has said, all those concerned in the voluntary agencies are immensely grateful to the Government for the change of figure, in a very generous way, in another place from an original figure of £500 to the present figure of £5,000. I know that the Single Homeless Group are concerned with this and support this amendment, and also the Catholic Housing Aid Society.
There seems a general feeling that this is an area, not only of concern for those who are socially dispossessed but of need for giving the widest support to the voluntary societies, for two reasons. The first is straightforwardly humanitarian, in that there are many people for whom such multi-occupied premises are needed, and the voluntary societies care for them in a wonderful way. The second, of course, is straightforwardly financial, in that, on the whole, the voluntary societies can always care more cheaply than Government.
The dilemma is that if legislation is passed making it mandatory to bring the various hostels up to required standards, then a very great deal of money will be needed. It was in 1972, I think, that the DHSS commissioned the Office of Popula-
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tion Censuses to survey all the hostels and the common lodging houses. That report came out in, I think it was, 1976, and it showed a rather alarming lack of amenity. Amenity as such is something which people may be willing to accept if their own circumstances are themselves worse than the amenities provided; but, of course, this amendment is concerned with life and limb, and particularly with escape from fire. One has heard of dangers in the past, and anything that can be done to remove them in the future should be done, I think; and as it would relieve the Government of anxiety concerning governmental support for those in need and support for the voluntary societies in the marvellous work they are doing, I should like to press upon the Government that they should look with much sympathy at this amendment.
It should be said, I think, that both the Bishop of Southwark and the Bishop of London, whose names are on this amendment, would have liked to be here, but they are (I choose the word carefully)— I was going to say they are "junketing", but they are not. They are seeking to rejoice in the 75th birthday of the Southwark diocese as at this moment, and those of us who know and respect the Lord Bishop of Southwark will know that when I say "junketing" I mean junketing. So, without the force, the knowledge or the ability, or the sheer panache, of those two right reverend Prelates, I am very glad, quietly but humbly, to support this amendment.
Lord SANDFORD: In the absence of the two right reverend Prelates, but as a past chairman of the Church Army, I should like to add my support of this amendment.
Baroness MACLEOD of BORVE: I, too, should like to support this amendment as one who for a very short time of the year tries to help those who have not got homes. Very recently we have had some terrible tragedies where people have been burned, and I gather it is now abundantly obvious that there should have been many more fire precautions in those cases, but they were not able to be provided because of the lack of finance, either statutory finance or voluntary finance. People in fact lost their lives in those cases. The Government have

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"upped" the amount which is to be allowed, but I support the amendment moved by my noble friend.
10.40 p.m.
Baroness RYDER of WARSAW: I should like to support the noble Baroness in all that she has said and, if I may, add that those of us who have the privilege of working for the homeless, for those who are probably the most unloved in society and for the sick and the disabled often find our work is to a large extent greatly hindered because of the whim of some local fire officer. There are no national regulations laid down but if local fire officers take it into their heads to decide upon so many extra fire doors through which we cannot even get out wheelchair patients at night, not only are we as a voluntary society greatly hindered because we must raise all these funds from the public but, at the same time, we are even prevented from opening further accommodation which is desperately needed for the homeless, the sick and disabled. There are literally thousands of them in this country—those I call "the silent sufferers". I would believe that this Committee would fervently uphold what the noble Baroness has said: that we should get all possible help—not just moral support but actual financial support, in particular because we are so cut in other directions. If any assistance can he given, we should all be extremely grateful—and in particular in respect of the fire precautions.
Baroness BIRK: In adding a brief word to what has been said, may I take the opportunity to wish the noble Baroness, Lady Ryder of Warsaw, a happy birthday today. I should like to add my support and that of my noble friends to what has been said by the noble Baroness, Lady Vickers, by the other noble Lords who have spoken and by the right reverend Prelate. May I say that this is one of the rare occasions when an amendment is supported by every side of the Committee, including the bishops. The Liberals have their name to it; we are supporting it; the Cross-Benches have added their support—it has the support of everybody.
I think that what is being asked for is a modest increase. It is an extremely modest one and I personally would have been inclined to ask for rather more. I
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think the Government, in accepting this amendment, will have got off very cheaply over this, when one takes into account the economic and human cost which is involved—and which may still be involved because nothing can ever be completely fireproof or foolproof. Nevertheless, it will help; and one hopes that it may help to stop some of the terrible tragedies that occur. I hope that the Government will accept this amendment and do so right away.
Lord DAVIES of LEEK: Despite the late hour—and I shall be very brief—I think this is a very important part of the Government's Bill and they were proud of it. But I want them to make it a reality because it is a cri de Coeur from the homeless. I think this really should be implemented. There are four types of grant: grant for tenants, extended scope for grants, special grants and repair grants. Unfortunately there are relaxed buildings regulations. I would say there is a way out. In view of the fact that the building societies have increased their assets 16 times and now have over £40 billion assets, a modus vivendi, a way of working, with the local building authority might well be found to implement a guarantee of improvement for old properties so that the homeless also would have a chance, not necessarily to buy but to have somewhere to live as human beings.
10.45 p.m.
Lord MOWBRAY and STOURTON: Nobody could have sat in this Committee and listened to the speeches without being moved by the compassion which, as usual, your Lordships have shown. We are discussing means of escape from fire in houses of multiple occupation, and after the very sad case that we had not so many months ago, it is very much in our minds. The right reverend Prelate and others were no doubt thinking about that particular case.
Having said that, the effect of this amendment would be to increase the amount of grant-aidable expenditure on the provision of means of escape from fire in hostels and other houses from £5,000 to £6,750. No doubt there are those who would contend—and I would not blame them—that the figure should be even higher or that we should have no limit at all set for this particularly important provision.

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I certainly would sympathise with that view, but one has to say, sitting on this side of the Committee—and noble Lords have heard it before—that the taxpayer's purse is not bottomless.
We must take a little credit, for we have already increased the base rate from £500, which was set by the Government of noble Lords opposite, to £5,000. That is tenfold. It is not bad. I must add also that there is a specific provision—and I would ask your Lordships to bear this in mind—in paragraph 18 of Schedule 11, which enables the limit to be increased in particular cases, and also for different limits to be set to reflect, for example, higher than normal costs in particular areas. This I take it would relate to more costly works needed because of the size and height, et cetera, of the building concerned. The noble Baroness, Lady Ryder—to whom I also wish birthday greetings—mentioned extra expensive escapes because of the disability of the people living in the property. That is in the capacity of the Bill as it is, if the Secretary of State wishes to use that clause.
I must emphasise that, although I have said that this clause exists, I would not want everyone to think that it was an "Open Sesame" which would automatically be used. It would only be used where special circumstances would justify it. We take the view that in the present circumstances a £5,000 limit is by no means unreasonable. By some standards compared with what it was only a year ago it seems quite generous, in fact, and, as I have said, we have taken powers in this Bill to deal with the exceptional cases.
I should like to say to my noble friend Baroness Vickers that Scotland has its own grant system. This Bill has no application in Scotland. I have to confess—and I apologise—that I am not briefed to say what the Scots' grant system is; but if the noble Baroness wants to know I will write to her and place a copy of my letter in the Library for the rest of the Committee who are interested.
If the cost is £5,000 now—and £5,000 still does something—the money given would be £3,750. I agree that if the cost were £6,000, it would still only be £3,750, under the Bill as it is now. I re-
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empasise the exceptional powers that the Secretary of State has in reserve to use for exceptional cases, for buildings which are extra large or for extra special cases. These powers are there. We all know that if you impose an upper limit everyone will tend to use it. Perhaps just to paint the lily a little bit more in times of stress it may be wise to keep the figure down and let the Secretary of State—
Baroness BIRK: The noble Lord says that if the figure is high everyone will use it. But according to the subsection the contributory element has to be so much of the amount determined under Section 70(1)(b), so there is a control over it. It is not just a free-for-all.
Lord MOWBRAY and STOURTON: There is, as I said, a limit of £5,000, up to 75 per cent. I also said that paragraph 18 of Schedule 11 gives the Secretary of State powers, if he wishes, to increase it to what he wants. I cannot be more explicit than that. This is not a fixed limit at all. I am quite willing to take this away and ask the noble Baroness to come and explain it to us. We are sympathetic in this case. We think the Secretary of State's powers in the above paragraph are sufficient to deal with any case which needs looking at. We are not hard-hearted people: we have every sympathy with this. The lives and safety of human beings are at stake. I assure your Lordships that if noble Lords have any points to put to us on this we shall listen. In the meantime, I would ask for the amendment to be withdrawn, so that if necessary we can discuss it further.
Baroness BIRK: Before the noble Baroness replies and decides on what she wants to do, may I say that whatever she decides to do we will go along with her. I should like to make one point for consideration when it is taken back. One clause allows the Secretary of State discretion. If we take the amount which is being asked for, which I believe is £1,650, and consider the cost of an application in exceptional cases and the cost of processing this through the department, I think several hundred pounds would already have gone for each case before the money reached the applicant.
Lord MOWBRAY and STOURTON: This is one of the cases we would be happy to discuss with the noble Baroness.
Baroness VICKERS: I am very grateful to my noble friend for what he has said. I shall ask leave to withdraw the amendment, but I should like to ask for a survey to be made if possible of the number of hostels that would have to be closed in the future. I have to close three myself and there must be many more; but I am grateful for what my noble friend has said and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 183:
Page 120, line 18, at end insert—
("21A. In section 74(l) after "they shall" insert "(subject to subsection (2A) below)" and after section 74(2) insert—
"(2A) Where, apart from this subsection, a local authority would be required to impose the conditions specified in subsection (2) above with respect to a dwelling in respect of which a certificate of owner-occupation has been given but it appears to the local authority that in the special circumstances of the case it would be reasonable to dispense with the conditions they shall not be required to impose the conditions.".").
The noble Lord said: This is a small but not insignificant amendment designed to give local authorities more discretion to have regard to the circumstances of particular cases when considering the payment of grant for home improvements. Under the present grant system grant aid is not available for the improvement of an owner-occupied house within a housing action area or general improvement area if that house has been let within the previous 12 months. On the face of it, this is a slightly curious provision, but it was introduced in the 1974 Housing Act as part of a package of controls on the availability of grants for home improvement. The intention was to deter owners of privately rented housing from pressurising tenants to obtain vacant possession with a view to sale for improvement with grant aid.
We have already, in this Bill, removed the so-called 12-month rule in the case of purchase by a sitting tenant, so that he will be able to obtain grant aid to improve his home without waiting for a year. The effect of this amendment is, while preserving the general rule that grant should not be given in such cases, to give a local authority a discretion to dispense with the restriction if they are satisfied that in the
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special circumstances of the case it is reasonable to do so. I beg to move.
Schedule 11, as amended, agreed to.
Clauses 103 and 104 agreed to.
Schedule 12 agreed to.
Clause 105 [Local authority mortgage interest rates]:
10.55 p.m.
Lord PITT of HAMPSTEAD Lord PITT of HAMPSTEAD moved Amendment No. 184:
Page 72, line 6, after ("be") insert ("not more than").
The noble Lord said: This amendment is aimed at enabling a local authority to keep its mortgage interest rate flexible in the way it does at the moment, rather than be forced to do it in the way the Bill requires. As the Bill now stands, local authorities must charge the higher of two rates: either the national rate or the average pool rate. Most authorities charge an average pool rate when they lend on property, and they do not make frequent changes in mortgage rates, as will be required under this Bill. Over a period—usually the whole year—they determine what is the average and then insist on the rate at that time.
The Bill as now drafted will require two things. First, they must charge the higher of the two rates; and, secondly, they must change their rate whenever the rate changes. This amendment is merely intended to enable them to continue to do what they are doing, provided that that is satisfactory. In other words, we are merely asking that the words "not more than"—which mean that they can if they want charge the higher rate—be inserted. They can if they wish charge the lower rate, but they have the flexibility which they now have and of which the Bill is depriving them. I beg to move.
Lord BELLWIN: This amendment undermines the whole purpose of Clause 105. It will enable a local authority to charge a lower rate of interest on its mortgage lending than it needs to do to cover its costs. This means a subsidy to one group of borrowers from other ratepayers, which cannot be justified.

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The amendment would also enable a local authority to charge less than the "standard national rate"—that is, the rate which building society mortgagors are charged. Local authorities are supposed to be lenders of last resort. This is not possible so long as borrowers are able to obtain mortgages from the town hall at more favourable rates than those—the vast majority—who borrow from building societies. I wonder whether that was in the mind of the noble Lord, Lord Pitt, when he proposed this amendment. If not, perhaps he may feel able to withdraw it.
Lord PITT of HAMPSTEAD: Although I probably shall withdraw the amendment, I wish to point out to the noble Lord that I am fully aware of this point. I do not know what is his authority, but the one that I used to be on invariably insisted on two things: first, that the building societies had turned you down; and, secondly, that the borough council had turned you down. It was only if you were turned down by the building societies and the London borough council that you got a mortgage from the GLC. So we were very much a lender of last resort. But there are other amendments that may meet the noble Lord's ideas better than this one, and I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
10.58 p.m.
Baroness DENINGTON Baroness DENINGTON moved Amendment No. 185:
Page 72, line 15, at end insert—
("Provided that a local authority may, subject to there being no cost to the rate-payer, taking one year with another, charge their average rate if it is lower than the standard national rate.").
The noble Baroness said: Reading Clause 105, I turn to subsection (3) and I see:
"The rate of interest shall be whichever is for the time being the higher of the following, namely—

(a) the standard national rate… and

(b) the applicable local average rate".

I pursue my way through and down the next page, and I come to subsection (10). I read there:
"The Secretary of State may by notice in writing "—
and the words "notice in writing" warn me that something is coming—
"to a local authority direct it to treat a rate specified in the notice as being the higher of the rates mentioned in subsection (3)".
I read it about four times, and it seems to me that what the Secretary of State is saying is that if you get this notice you should call the lower the higher. That is what it seems to me to mean: that you should call the sun the moon. I knew something was coming when I saw that it was to be a notice in writing.
I should like the Minister to elucidate this strange subsection (10) in relation to subsection (3). When I go back to subsection (3) I ask why, if I have read it aright, which I may not have done, the Minister is putting this peculiar thing into subsection (10). I wonder whether he is trying to deal with a position where paragraph (b)—the local average rate—is higher, and is too high, in his view. He wants to encourage house ownership, so he then declares that the higher is the lower. Then you turn to the standard rate. Is that what that is about? I should like the point to be elucidated.
My amendment has to do with a case where the local rate is lower than the standard rate. I do not know whether this happens. From what the Minister said a few minutes ago, perhaps it does not happen in many authorities, but certainly the position today in the Greater London Council is that the Greater London Council's average rate is 13 per cent., based on the Consolidated Loan Fund's average rate of interest on all council borrowings, past and present. The building society rate, as we know, is 15 per cent. If the council had to charge the higher of these two rates, the 15 per cent. rate, it would add some £23 gross, or £15 net of tax relief—which is about 12 per cent.—to the repayments on a mortgage of £15,000. That would hit very hard the people who have their mortgage from the Greater London Council, because it is a lender of last resort. They lay down very stringent regulations in County Hall, London. You must have been turned down by two building societies, if not three. And here are people who are just managing to get a mortgage from the council at 13 per cent.
We talked a lot about this many weeks ago, it seems to me. I have sympathy

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with the Minister who spoke about it days ago, but I think it was weeks ago when we started on the Bill. We were talking then about the right to buy and we were told over and over again that the Government want to do everything to help people to own their own homes. Surely he is going to accept this amendment, because it will help those at the lower end of the income scale to own their own home. I beg him to be generous to those people and to accept the amendment. I beg to move.
11.4 p.m.
Lord BELLWIN: The noble Baroness referred to the fact that it seemed like days ago or weeks ago since we started. To me it seems like years ago.
Although her amendment takes account of one fundamental objective of Clause 105, that local authorities should not subsidise borrowers at the expense of the ratepayers, nevertheless it conflicts with the other purpose of the clause, which is to ensure that local authority mortgage borrowers should not be offered loans at interest rates more favourable than those generally charged to building society borrowers.
Local authorities have limited funds and are supposed to act as lenders of last resort. This amendment would provide an incentive for everybody, regardless of whether they are coming to local authorities simply as a last resort, to try to secure a local authority mortgage instead of a building society mortgage. I know that the noble Baroness and the noble Lord, Lord Pitt of Hampstead, said that the kind of conditions imposed by the authority to which they referred were likely to mean that unless those who came could show that this was of last resort they would not be considered. That may well be so in the authority to which the noble Baroness refers, but I can assure her from my own knowledge that that is not the attitude some authorities take. They really do not lay down such stringent conditions; at least they have not done so hitherto. With the difficulties there may well be at the present time in getting mortgages, it is likely that local authorities will, more rather than less, be granting mortgages, in which case the point I am making is particularly apposite.
Subsection (10), which caused some difficulty to the noble Baroness, gives the Secretary of State powers to direct
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a particular local authority to charge an interest rate specified in the direction in respect of the authority's mortgage loans covered by this clause and to operate the other provisions of the clause accordingly. Such a direction can be varied or revoked by a further direction from the Secretary of State. It is expected that little use will be made of this clause, but a specific reserve power has been considered necessary, particularly in relation to those authorities opposed to the right to buy provisions, with which this clause has a link.
The noble Baroness, Lady Denington, expressed concern about people who have to come for mortgage and therefore should be able to get the lowest possible rate. That is something with which everyone would sympathise as a philosophy. The best way in which we can help to ensure that not only they, but all who take out mortgages, are able to get them at the lowest possible rates will be when we are so able to influence the economy that there will not be the necessity any more for rates to be as high as they are at present.
I hope she will be as encouraged as I am by the fact that today—I found this out by being inside this Chamber and not outside it—the minimum lending rate has come down by 1 per cent. It is a step in the right direction. The noble Baroness may smile; I hope she will smile with some glee. As I say, at least it is a move in the right direction. It is an indication, and surely she and the noble Baroness, Lady Denington, want nothing better than that we should reach the point, as I am very confident we shall, when the mortgage interest rates will come down, and then everyone will be able to benefit.
Baroness DENINGTON: I thank the Minister for his explanation about this mysterious Clause 10. I must admit now that I did guess it was in order to deal with the bad boys; my guess was right. But I want something for the good boys. I am very disappointed at the Minister's attitude. It is very fortunate that there are people in London, and maybe elsewhere, who at no charge whatsoever to the ratepayers are enabled to have a slightly lower mortgage rate. I am astonished that the Government should want to push up the mortgage rate of those who have managed to have some-

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thing lower and be a little fortunate in the. I am really most disappointed, and I hope the Committee will divide on this amendment and make our position on this quite clear.
11.17 p.m.
Baroness DENINGTON Baroness DENINGTON moved Amendment No. 186:
Page 72, line 19, at end insert—
("The Secretary of State shall give notice of any change in the national rate at least two months prior to the date of operation.").
The noble Baroness said: This amendment is so, so simple. This is just to give authorities some notice that they have an awful lot of work to do! I beg to move.
Lord BELLWIN: Perhaps not quite so briefly, but briefly, I hope, I think the amendment is not necessary. Subsection (8) already permits a sufficient measure of flexibilty to local authorities when adjusting their rates as a result of either a change in the standard national rate or indeed the local average rate. Notice of
11.9 p.m.
On Question, Whether the said amendment (No. 185) shall be agreed to?
Their Lordships divided: Contents, 29; Not-Contents, 54.

CONTENTS

Airedale, L.

Evans of Claughton, L.

Morris of Kenwood, L.

Banks, L.

Fisher of Rednal, B.

Pitt of Hampstead, L.

Beaumont of Whitley, L.

Gaitskell, B.

Ponsonby of Shulbrede, L. [Teller.]

Birk, B.

Greenwood of Rossendale, L.

Boston of Faversham, L.

Hatch of Lusby, L.

Sefton of Garston, L.

Brooks of Tremorfa, L.

Houghton of Sowerby, L.

Stone, L.

Collison, L.

Janner, L.

Strabolgi, L.

David, B.

Jeger, B.

Underhill, L.

Davies of Leek, L.

Kaldor, L.

Wigoder, L.

Denington, B.

Llewelyn-Davies of Hastoe, B. [Teller.]

Elwyn-Jones, L.

NOT-CONTENTS

Abinger, L.

Fortescue, E.

Mowbray and Stourton, L.

Airey of Abingdon, B.

Gainford, L.

Moyne, L.

Bellwin, L.

Gisborough, L.

Murton of Lindisfarne, L.

Belstead, L.

Gowrie, E.

Redesdale, L.

Bessborough, E.

Halsbury, E.

Renton, L.

Cathcart, E.

Harmar-Nicholls, L.

Romney, E.

Cork and Orrery, E.

Henley, L.

Saint Oswald, L.

Craigmyle, L.

Holderness, L.

Sandford, L.

Croft, L.

Hornsby-Smith, B.

Sandys, L. [Teller.]

Cullen of Ashbourne, L.

Hylton, L.

Selkirk, E.

Denham, L. [Teller.]

Killearn, L.

Sempill, Ly.

Digby, L.

Lauderdale, E.

Spens, L.

Ellenborough, L.

Long, V.

Trumpington, B.

Elles, B.

Macleod of Borve, B.

Vaux of Harroden, L.

Elton, L.

Margadale, L.

Vickers, B.

Faithfull, B.

Marley, L.

Vivian, L.

Falmouth, V.

Monk Bretton, L.

Ward of Witley, V.

Ferrers, E.

Mottistone, L.

Westbury, L.

Resolved in the negative, and amendment disagreed to accordingly.

a change must be given to borrowers within two months of a change. A reduction in the rate will take effect from the first interest payment after a date not later than one month after the change, and an increase will take effect from the first interest payment after a date at least one month and not more than three months after notification.
Baroness DENINGTON: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord PITT of HAMPSTEAD Lord PITT of HAMPSTEAD moved Amendment No. 187:
Page 72, line 23, leave out ("not exceeding six months and").
The noble Lord said: I hope I can at last find an amendment that the noble Lord will accept. This is an amendment merely intending to prevent local authorities from having to change their rates as

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frequently as every six months. I cannot really believe that the noble Lord regards this changing of interest rates every six months as an integral part of the strategy. I hope he will accept this amendment. I beg to move.
Lord BELLWIN: In speaking to this amendment, may I also speak to Amendment No. 188. The deletion of the six-monthly periods, as proposed in these amendments, would leave local authorities free to decide when and how often they should determine and declare the applicable local average rate. It could enable local authorities to charge interest at a rate which did not cover their costs by failing to declare a local average rate which is up-to-date. This would mean a subsidy from the ratepayers which would be unacceptable.
We believe local authorities, the great majority of whom nowadays lend at variable interest rates, will not be inconvenienced by the requirement to monitor and declare a rate of interest at six-monthly intervals. With the recent volatility of interest rates I suggest that it would be foolhardy for a local authority not to keep a close watch on costs affecting interest rate movements.
Lord PITT of HAMPSTEAD: I am sorry that the noble Lord who has been in local government so long has such a poor opinion of local authorities that he thinks that they need to be told that they must change the rate every so often. They will know—if it is in terms of their own financial position—whether it is necessary to put the rate up at that time.
I am saying that as the Bill now stands it is rigid: they must do it every six months, regardless. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 188 not moved.]
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 188A:
Page 73, line 8, after ("Council") insert ("or the Council of the Isles of Scilly").
The noble Lord said: The provisions in the Housing (Financial Provisions) Act 1958, the main power under which local authorities lend money for house
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purchase, et cetera, extend to the Isles. It is therefore necessary to similarly extend the Clause 105 provisions governing the interest to be charged on such loans.
On Question, amendment agreed to.
11.22 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 189:
Page 73, line 41, at end insert—
("(10A) This section shall not prevent a local authority, if the conditions stated in subsection (10B) below are satisfied from giving assistance to a person acquiring a house in need of repair or improvement by making provision for waiving or reducing for a period ending not later than five years after the date of the advance mentioned in subsection (1)(a) above or the disposal mentioned in subsection (1)(b) above, the interest payable on the sum advanced or remaining outstanding and for dispensing during that period with any repayment of principal.
(10B) The conditions mentioned in subsection (10A) above are that—

(a) the assistance is given in accordance with a scheme which either has been approved by the Secretary of State or conforms with such requirements as may be specified in an order made by the Secretary of State with the consent of the Treasury; and

(b) the person acquiring the house has entered into an agreement with the local authority to carry out, within a period specified in the agreement, such works of repair or improvement as are so specified."").

The noble Lord said: This amendment enables the provisions that will govern the rate of interest charged by local authorities on their mortgage lending to be relaxed in certain cases at the discretion of the Secretary of State. The Government have decided that it is necessary to enable local authorities to charge a lower rate of interest or to waive interest payments for a limited period in cases where some relaxation of the interest rate régime is essential in order to bring back into use properties in need of significant repair or improvement and which without this additional incentive would be liable to remain unsold and in danger of falling into further decay.
A very good illustration of such a case is the GLC's home selling scheme which is making a significant contribution both to the encouragement of home ownership and to the improvement of the poorer housing stock in London. Under the GLC scheme, a house or flat in poor condition, needing a minimum of £2,000

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spent on repairs and improvements, and having been empty for at least two months, is bought by a purchaser who undertakes to put it into good repair and decorative order during a specified period of no more than three years, during which period payments of interest on the GLC mortgage are waived and repayments of capital deferred. The scheme is designed for people who are willing to put time and money into improving a run-down property and who would not normally be able to afford the combined cost of mortgage repayments and repair improvement costs.
I must assure noble Lords that this amendment does not herald a change in the Government's policy on local authority mortgage interest rates. Local authorities should lend only in the last resort, as we have been saying earlier today. Only in the exceptional circumstances which I have described, therefore, should borrowers be able to obtain mortgages from the town hall at more favourable rates than those who borrow from building societies. And only in such circumstances should a local authority be able to lend money for house purchase at a rate below normal mortgage rates.
The general principles remain as set out in Clause 105 which requires local authorities, as we have just been saying, to charge a rate of interest comparable to that charged by the building societies or for those authorities whose borrowing costs are higher than that rate, enough to cover those costs. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 189A:
Page 74, line 9, leave out ("or")
The noble Lord said: I really spoke to this when I was speaking on Amendment No. 188A. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 189B:
Page 74, line 9, at end insert ("or the Council of the Isles of Scilly")
The noble Lord said: This was also spoken to when I spoke to Amendment No. 188A. I beg to move.
On Question, amendment agreed to.
Clause 105, as amended, agreed to.
Clause 106 [Local authority and Housing Corporation indemnities for building societies]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 189C:
Page 75, line 8, leave out ("and")
The noble Lord said: This important amendment to Clause 106 enables local authorities to guarantee building society mortgage advances against a mortgagor's default. It is customary to treat the Isles of Scilly as a housing authority. Therefore, the power should be extended to this council. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 189D:
Page 75, line 8, at end insert ("or the Council of the Isles of Scilly")
The noble Lord said: What I said on the last amendment applies also to this one. I beg to move.
On Question, amendment agreed to.
Clause 106, as amended, agreed to.
Clauses 107 to 109 agreed to.
11.27 p.m.
Lord BANKS Lord BANKS moved Amendment No. 190:
After Clause 109, insert the following new clause:
Housing subsidies
( .—(1) The provisions of section 24(1)(B) of the Housing Subsidies Act 1967 shall have effect where a person borrows, or two or more persons borrow jointly, from a qualifying lender on the security of a freehold or leasehold estate of the borrower, or of one or more of the borrowers (including an estate held jointly or in common by the borrower, or one or more of the borrowers and one or more other persons) in land in Great Britain, and the following conditions are satisfied:

(a) that the loan is or was made as part of a scheme under which not less than ninetenths of the proceeds of the loan are or were applied to the purchase by the person or persons to whom it was made of an Annuity ending with his life or with the life of the survivor of two or more persons (in this section referred to as "the Annuitants") who include the person or persons to whom the loan is made;

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(b) that at the time the loan is made the person to whom it is made or each of the Annuitants had attained the age of 65 years; and

(c) that the person or persons to whom the loan is made or each of the Annuitants uses the land on which it is secured as his only residence.

(2) The borrower or borrowers may by notice in writing to the lender in such form as the Ministry may direct (in this section referred to as an "Option Mortgage") elect that the loan shall be subsidised in accordance with the provisions of Part II of the Housing Subsidies Act 1967 and the Option Notice shall be treated for all purposes as if it were an Option Notice made under the provisions of section 24 of the said Act.").
The noble Lord said: I must begin by declaring an interest. I am an insurance broker, being a director of a subsidiary company of a firm of Lloyds brokers. I moved a similar amendment to this to the first Social Security Bill when it was in Committee in this House. On that occasion the noble Lord, Lord Cullen of Ashbourne, agreed to take the matter back and consider it again. I moved the amendment again on Report stage of that Bill. On both occasions the amendment received a substantial amount of support in all parts of the House. Of course it enjoys the support of organisations outside the House, such as Help the Aged and Age Concern. The noble and learned Lord, Lord Gardiner, and the noble Lord, Lord Maybray-King, spoke as office holders in Help the Aged on this particular matter.
On a Division at the Report stage this amendment was lost by 12 votes. In the discussion before the vote the noble Baroness, Lady Young, argued that the amendment was not relevant to the Social Security (No. 1) Bill as it sought to amend the Housing Subsidies Act 1967. I was able to show that a letter from the Department of the Environment stated that their legal advisers were of the opinion that the responsibility for the area of public policy covered by the proposed reform lay with the Department of Health and Social Security. Nevertheless, it is possible that a number of noble Lords were influenced by the argument of the noble Baroness and voted against this amendment on the grounds that it was not relevant to the Bill. I have felt justified, therefore, in tabling the amendment to this Bill and I imagine that we
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shall not be told that the amendment falls outside the scope of the Long Title.
The amendment may therefore be considered on its merits, and these are considerable. Elderly people who own their homes but who have an inadequate income may increase that income by raising a mortgage on their house and using the proceeds to purchase an annuity. Out of the annuity they pay the interest on the mortgage and are left with a balance which provides them with extra income to meet their own expenses. Elderly taxpayers raising a mortgage in this way have been made the recipients of Government assistance through being granted tax relief on the interest on the mortgage. Elderly non-taxpayers—those too poor to pay tax and most in need of the additional income—were left out, with the result that these arrangements are often of no use to them.
The amendment proposes that help should be given to the elderly non-taxpayers by extending to them the option mortgage scheme which would allow them to pay a reduced, Government-subsidised rate of interest on the mortgage, thus making the scheme helpful to them and enabling them to increase their income. This mortgage option is available to non-taxpayers buying their house. Since elderly taxpayers have been singled out for the same tax relief in these cases as younger taxpayers buying their house, it is logical and right that elderly non-taxpayers should be accorded the same tax relief in these cases as younger non-taxpayers buying their house. What I am asking for is an elementary act of justice. I beg to move.
Lord BELLWIN: I wish to say at the outset that I consider that this is very much the right place for this amendment, and that will probably please the noble Lord, Lord Banks, greatly, in that, having read carefully, as I did, the previous debate and all that surrounded it, it is clear that he seemed to be bedevilled by the fact that everyone was urging and had done on other occasions, that it should be proposed in various other places. I readily accept that this is where it should be. I assure him also that I will talk to the amendment on its merits and do only that.

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I read very carefully indeed the Official Report of the debate of the Report stage of the Social Security Bill (No. 1) on 6th May. On that occasion the noble Lord, Lord Banks, argued that it would be an elementary act of justice to extend the option mortgage scheme as his amendment proposed. He said that Parliament had specifically decided in 1974 to help elderly taxpayers by retaining tax relief for annuities and he claimed that the only arguments against his amendment were those of additional cost. The amendment now before the Committee constitutes exactly the same proposal as was debated and defeated on that occasion, albeit by the majority to which the noble Lord referred. My noble friend Lady Young made a full and effective response to the noble Lord's arguments in that debate. It will not be easy, but I shall do my best to emulate her.
First, would this extension be, as the noble Lord claims, an elementary act of justice? I accept that in the context of house purchase, the option mortgage subsidy is indeed for non-taxpayers the counterpart of tax relief. But that scheme was introduced specifically to help people on low incomes to purchase or improve houses. There is no general principle that tax relief should have matching subsidies. Indeed, the option mortgage scheme is almost unique in this respect, and the noble Lord's amendment has no relation to the aim of extending home ownership; it merely uses option mortgage subsidy as a vehicle to increase the income of a particular group of elderly people.
The arguments are not about housing policy; they are about whether the particular group of people who would benefit under the amendment—that is, elderly householders who do not pay tax—require greater financial help from the Government than they receive at present. Secondly, if they deserve a higher priority for available funds than other groups, would this proposal be the best means of achieving such additional help? And, thirdly, are the additional funds available?
Let us look first at the differences between the treatment of taxpayers and non-taxpayers who take out an annuity on their house. I recognise that the Finance Act 1974 was specifically amended so that tax relief on annuities was retained,
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but I suggest that this does not imply there should be a corresponding subsidy for non-taxpayers. Those who pay tax receive a smaller net income from their annuity than non-taxpayers. The allowance of mortgage interest relief helps to offset the additional tax liability on the annuity. But to pay option mortgage subsidy to those who, by definition, pay no tax, would be to give them a double benefit, a direct income subsidy in addition to their freedom from the burden of income tax.
We must look also at non-taxpayers likely to be in even greater need than those who own their own home. The average outright owner-occupier has extremely low housing costs. On the basis of the 1978 family expenditure survey he spends only 4½ per cent. of his gross household income on housing, while the housing costs of people in rented accommodation are around 10 per cent., and those of households with a mortgage are over 12 per cent. of their gross household income. These figures take account of the availability of rebates where appropriate.
So in effect the proposal before us would give additional help to a group whose average housing costs are the lowest in the country, whatever their other means may be. If additional funds to help the elderly from the public purse were available, there are many other means which might be used to direct those resources at those who have the greatest financial needs; for example, through the instruments of the supplementary pensions.
We must also not underestimate the ability of elderly householders to help themselves. Although in many cases it is right that elderly people should be able to stay in their home for as long as they are able, some of them will wish to move to a smaller property as their family circumstances change, and thus to realise a part of the major capital asset which they have acquired over their working lives. I ask noble Lords to accept that if the proposal were implemented, there would be—and rightly so—charges of unfair discrimination in favour of owner-occupiers against other old people above the supplementary benefit level who do not happen to own their home.

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I hope that I have shown that there is far more to the Government's case than that, but we cannot at any time—particularly in the present circumstances—ignore the potential cost of this concession. I do not at all make my case on that point. Nevertheless it is a factor. I do not propose to hazard a guess about precisely what the amendment might cost, and indeed I say again that that is not the kernel of the argument. I ask the Committee to accept that such a concession could not be contemplated by Government when all forms of public expenditure are subject to such rigorous constraints.
Finally I wish to emphasise to the Committee that this is not a case of taking a doctrinaire, hard-hearted line in response to one of caring and reason. The other side of the Committee has no monopoly on compassion. The noble Lord, Lord Banks, will testify that successive Administrations have resisted the extension of the option mortgage scheme in the way that he proposes. The Government's argument rests not only on grounds of cost or constitutional convenience, important though those points are. My proposition is that the noble Lord's amendment is not the right way for a responsible Government to fulfil their obligations to elderly people. It would indeed help to augment the incomes of particular people who make particular arrangements with particular insurance companies. It would not directly assist those who are most in need.
Lord BANKS: I am grateful to the noble Lord for his detailed reply to the amendment, which he delivered at some considerable speed, no doubt because of the lateness of the hour, and it will take some reading to follow all the points that he made. I shall not attempt to answer them now, but I should like to make one or two brief observations.
First, the noble Lord said that the option mortgage scheme was introduced originally to help in the purchase or improvement of houses, as if that were some reason for not using it for anything else. If another and useful way of using this particular instrument can be found, it would be foolish, and would be a democratic nonsense, not to use it in that particular way.
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The noble Lord made the point that has been made previously that there is no rule that there must be matching subsidies for tax reliefs. But that does not mean to say that there must never be matching subsidies for tax reliefs. It has been done in the case of house purchase, and the need to help the non-taxpayers has been recognised in the introduction of child benefit.
The noble Lord spoke about the tax relief on annuities being retained, but think the point is that it was tax relief on the mortgage interest that was retained. I think the noble Lord said that the tax relief on the mortgage interest was to compensate for the position of the annuity. But the interest element in the annuity is never more than one-third of the mortgage interest in these type of schemes. So as these schemes are at the moment the tax relief gives a distinct advantage to the taxpayer.
Finally, on the question of unfair discrimination and singling out a particular group, I think that that argument might carry weight if the preceding Government had not already singled out the taxpayers in this particular case. But they have singled them out, and it seems quite unfair to leave out of account the non-taxpayers. However, I should like to consider all the other points that the noble Lord made, and therefore, with the leave of the Committee, I should like to withdraw the amendment and perhaps come back to the question again at the Report stage.
Amendment, by leave, withdrawn.
Clause 110 agreed to.
Schedule 13 agreed to.
Clauses 111 and 112 agreed to.
Schedule 14 [Rent rebates and allowances]:
11.42 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 191:
Page 127, line 27, leave out paragraphs (f) and (g).
The noble Lord said: This is a minor, consequential amendment to the Government's earlier amendments, Nos. 150 and 152, applying the Rent Acts to the Crown Estate and Duchies. The amendment has

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no substantive affect. It deletes the provision in Schedule 14, paragraphs (f) and (g), specifically applying the rent allowance scheme to Crown Estate tenants. This is no longer necessary as Crown Estate tenants will now anyway be eligible for rent allowances under paragraph (a) by virtue of being protected tenants under the Rent Act. I beg to move.
On Question, amendment agreed to.
Schedule 14, as amended, agreed to.
Clauses 113 to 117 agreed to.
Clause 118 [Accounts and audit]:
[Amendments Nos. 192 to 196 not moved.]
Clause 118 agreed to.
Clauses 119 and 120 agreed to.
Schedule 15 [Registered housing associations]:
[Amendments Nos.197 to 202 not moved.]
Lord BELLWIN Lord BELLWIN moved Amendment No. 203:
Page 132, line 10, leave out from ("committee") to end of line 13 and insert ("or an officer or employee of the association;
(b) by way of expenses to a member of its committee who is not an officer or employee of the association; or
(c) by way of expenses to an officer of the association who does not have a contract of employment with the association.")
The noble Lord said: Amendments 203, 206 and the first part of 207 are technical amendments made in recognition of the fact that housing associations frequently have two sorts of officers: those who have contracts of employment with their association and are employees in the normal sense of the word, and those who do not. The schedule as drafted covers only those officers with contracts, and accordingly it could have the effect of preventing any payments at all being made to what I might call the honorary officers; that is, those without contracts of employment, such as the honorary secretary of an association.
The first amendment makes it clear that honorary officers should be treated under Section 26 in the same way as committee members who do not have contracts of employment. This means that the Housing Corporation will be able to lay down
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the maximum amounts that these officers and committee members may receive from their associations by way of expenses.
Amendment 206 and the first part of 207 complement the first by providing that these payments of expenses are not prohibited by the general ban on payments contained in the new Section 27. The second part of 207 will ensure that nothing in Schedule 15 will prevent tenants of housing associations becoming committee members. It will also ensure that tenants who are on committees can be rehoused by their associations or given new tenancy agreements.
It is common practice—and, indeed, it is encouraged by the Department of the Environment—for housing association tenants to sit on the management committees of their associations. It is possible, however, that the present wording of Schedule 15, which prevents associations granting benefits to their committee members, could prevent this perfectly sensible state of affairs and, more particularly, could prevent tenants who were committee members being granted new tenancies. Without these amendments a number of problems could arise. First, honorary officers might not be able to receive any payments at all from their associations. Secondly, there might be difficulties for tenants who become committee members. I invite noble Lords to accept the amendments which rectify these anomalies.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 204:
Page 132, leave out from beginning of line 16 to end of line 20 and insert—
("(5) Where a registered 1965 Act association—

(a) pays any sum or makes any gift in breach of subsection (1) above; or

(b) pays to any person a sum which exceeds any maximum amount specified in relation to that person under subsection (3) above;

the sum or, as the case may be, the value of the gift or, in a case falling within paragraph (b) above, the amount by which the sum exceeds the maximum shall be recoverable by the association; and proceedings for its recovery shall be taken by the association if the Corporation gives the association a direction to that effect.").
The noble Lord said: This is a technical amendment to ensure consistency within Schedule 15. The Bill already provides

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for an association to recover payments made in breach of the new Section 27 and for the Housing Corporation to direct recovery. This amendment is designed simply to rectify that omission and I invite the Committee to accept it.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 205:
Page 132, line 34, after ("business") insert ("trading for profit").
The noble Lord said: This amendment restricts the definition of "business" in new Section 27(3) to one which trades for profit. Without this restriction, the Bill could prevent some practices which we want to encourage. By restricting the schedule to businesses trading for profit, these problems would be avoided. I invite the Committee to accept the amendment.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 206:
Page 133, line 10, leave out ("or").
The noble Lord said: I spoke to this amendment when moving Amendment No. 203. I beg to move.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 207:
Page 133, line 13, at end insert—
("; or
(d) any payment of expenses to which section 26(3)(c) above applies.
(5A) Where a tenancy of a house has been granted to, or to a close relative of, a person who later became a committee member, officer or employee of an association, nothing in this section prevents the grant to that tenant of a new tenancy (whether of that or any other house.)".
The noble Lord said: I spoke to this amendment when moving Amendment No. 203. I beg to move.
On Question, amendment agreed to.
Schedule 15, as amended, agreed to.
Clauses 121 and 122 agreed to.
Schedule 16 agreed to.
Clause 123 [Housing association grant]:
11.48 p.m.
Lord EVANS of CLAUGHTON Lord EVANS of CLAUGHTON moved Amendment No. 208:
Page 86, line 13, leave out ("£5,000") and insert ("£9,000").
The noble Lord said: I would ask the Committee to consider Amendments Nos. 208 and 209 together. This is an amendment in respect of which I should declare an interest. I am a member of the management committee of one of the largest housing associations in the country. This is to do with the provision of grant for housing associations who are rehabilitating houses for sale. The question is simply whether the present proposal, at £5,000, in Clause 123 is large enough to cover the gap between, as it were, the production costs of rehabilitating a house and the market value. I concede that in a town like York or almost any market town in the country, where you rehabilitate a house in an urban context in a small town like that, the added value in terms of the value for sale would be probably sufficient on the present proposal of £5,000 to cover the cost, because there is no stigma value in buying a house in the centre of Stratford on Avon or some such place. However, if as are the Merseyside Improved Housing and a lot of other housing associations of that kind—and I expect the noble Baroness, Lady Fisher, has experienced this in Birmingham, as have other noble Lords in other parts of the country—if you are rehabilitating a house in an inner urban area (which I suspect the Government and all noble Lords would be anxious should happen) the sale price is depressed by the area in which the house lies. It is the experience of the housing association with which I am connected that the production cost, the architectural fees, the purchase price, the legal fees, the capitalised interest and the improvement and temporary decanting allowances fall very far short of the price that can be obtained in an inner urban area such as Liverpool 8 for the house when it has been rehabilitated. The reason is the type of area. I agree there are differences between one area and another. For the areas of large cities with inner urban problems, which on the present Government's declared intentions and that of past Governments' they regard as important, the grant of £5,000 is not sufficient. That is why I am suggesting that the figure of £9,000

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should be inserted in both cases. I beg to move.
11.51 p.m.
Lord MOWBRAY and STOURTON: I was very interested to hear what the noble Lord said about his amendment. Like him, we regard the improvement for sale scheme as extremely important. It will help in bringing to life some of our most dilapidated housing stock and in providing homes at low cost, especially for young people, as he mentioned. However, we cannot agree with the noble Lord that a maximum grant of £5,000 per dwelling is inadequate, as he put it. We believe it is a realistic figure which will put momentum into the scheme while accepting that the resources which can be devoted to it are not limitless. As the noble Lord knows, a limit of £5,000 also appears in Clause 103, which provides for local authority improvement for sale. We would have to think very carefully before changing the limit in one clause while leaving the other unchanged.
It might also interest the Committee to know that the National Federation of Housing Associations, even when they were considering various regional variations only asked for a maximum of £6,000, so as the Government have given £5,000 I do not think that we have done too badly on this. The clause does however provide for the maximum grant to be changed by order if circumstances warrant it, and the Government will certainly wish to consider this if at any time in the future there is evidence that the £5,000 is proving inadequate. This meets the point the noble Lord was worrying about. However, at the present time we judge that figure to be a perfectly adequate and reasonable one and I ask your Lordships to reject this amendment.
Lord EVANS of CLAUGHTON: I take the point that the noble Lord mentioned about the local authority sector. I also take the point the National Federation have not suggested the figure that I have put in to the amendment. I am aware that the housing association with which I am connected regards the type of problems that exist in central Liverpool as unusual. To give a typical example of the kind of problems we have, we have a contract price of £11,400 to buy; archi-
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tectural fees of just over £1,000, the purchase of the property for £2,000, very modest legal fees of £60, capitalised interest of £500, acquisition, improvement, re-housing and temporary decanting allowance of £825, which leaves us with an average price for a rehabilitated house in the central area of Liverpool of £15,925 —nearly£16,000. Deduct the £5,000 grant, and there is £10,975. This leaves a gap of £3,675 between that figure and the valuation that the district valuer will give in that kind of area. It is on that basis I have put forward this particular amendment.
Having said that, and taken into account what the noble Lord said about the possibility of reconsidering by order and, having drawn the attention of the Committee to this problem in the area about which I am talking, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 209 not moved.]
Clause 123 agreed to.
11.55 p.m.
Baroness DENINGTON Baroness DENINGTON moved Amendment No. 210:
After Clause 123, insert the following new clause:
Amendment of s. 29 of 1974 Act.
(". Section 29 of the 1974 Act (Housing Association Grant) is amended as follows:
After paragraph (e) in subsection (2) there is inserted the following paragraph—
"(ee) establishing in respect of any housing or residential accommodation a scheme or schemes for the ownership of the housing or accommodation by an association which falls within paragraph (d) of section 15(3) of the 1977 Act or for the management of the housing or accommodation by a housing cooperative as defined by section 49 of this Act or an association formed by the occupants of the housing or accommodation for the purpose of managing such housing or accommodation.".")
The noble Baroness said: I shall try to speak to this amendment as briefly as I can. It is concerned with trying to get adequate grants to help establish housing associations which are running community leasehold schemes, co-operative management schemes and things of that sort. When they start, these associations really do need professional guidance. They are often groups of people who have no knowledge of committee matters or of

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how to form a committee, what a chairman or secretary has to do, or anything at all. Their responsibilities have to be explained to them. Essentially they need lessons in book-keeping or else they get themselves into a terrible muddle and then they fail: and it is tragic if they do that. They need guidance from experienced and professional people, and this guidance has to be paid for.
I declare an interest, in that I belong to the Greater London Secondary Housing Association which is doing this work. They fortunately are funded by the Greater London Council, but there are others who are not, and they do need funding. The funding authority is the Housing Corporation and funding should usually come through what is called the non-scheme grant operated by the co-operative services unit. Their money is limited and there is simply no guarantee that they will always make a grant, or do it early enough. It is really a bit of a "hit or miss" business, if I can put it like that, whether you can get them to listen or whether you have a member who is influential enough to get them to listen to you.
So something really needs to be done about these setting-up grants. My friends in this field suggested that this was the right amendment. I am not pressing this amendment as it stands at all. Really, what I am asking the Minister is this. Will he look into this matter and see what is the best way to help? Should it be done, as the amendment suggests, through the HAG system, through a word in the ear of the Housing Corporation, or what? I just felt that it should be raised.
Lord HYLTON: I should briefly like to support the noble Baroness over this amendment. The amounts required can be quite small—£100 or £200 to start the finance. I agree it would be not unreasonable to ask these co-operatives to put up something towards that themselves, but very often they cannot find the whole of the money and there is a lack of charitable funds to cover this kind of thing. It would be very helpful if some Government agency or other could do something about it.
Lord BELLWIN: Without referring to the notes I have here—because I think the
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last point made by the noble Baroness was the nub of what she was trying to achieve—I think I could best answer by saying that obviously she will not press this amendment, but if there are ways in which we could be helpful then why do not we do it like that? I shall be very glad to look at what can be done to be helpful, perhaps together with the noble Baroness.
Baroness DENINGTON: I thank the Minister, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 17 agreed to.
Clause 124 [Recoupment of surplus rental income]:
11.59 p.m.
Lord MOYNE Lord MOYNE moved Amendment No. 211:
Page 86, line 21, after ("which") insert ("after the passing of this Act").
The noble Lord said: In speaking to all the amendments standing in my name, I should explain that the first two are really one, and are concerned with the general principle of what seems to me retrospective legislation, while the third is designed to remedy for the charitable housing trusts what would, in my view, be a very real injustice in the Bill as drafted. As the background of all the amendments is the same, and as the arguments are inter-linked, it seems best to speak to them all together.
I should begin by saying that I am a trustee of the Guinness Trust, which was set up 90 years ago, in 1890, and has other activities apart from housing among its permitted objects. Though charging the lowest possible rents over the years, the trust has grown and had become quite substantial even before the admirable housing association grants were thought of. I understand that some of the other older housing trusts, such as the Peabody, the Sutton or the Samuel Lewis, are in much the same position; namely, of having built up a valuable capital of bricks and mortar, the income from which is, and always has been, used for the gradual expansion of their work.
I do not wish to show ingratitude for the housing association grants, which have

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so enormously contributed to the expansion of the housing associations and trusts. By their help, the Guinness Trust alone has, since 1974, been able to complete some 4,000 dwellings, besides having over 2,000 in the pipeline. Without the grants, it is possible that in the prevailing economic circumstances we should not have been able latterly to afford much new building, but could only have continued our programme of reconditioning. Everybody in the housing movement must be exceedingly grateful for these grants, and to the Governments of both complexions which set them up and which have sustained them.
But the sums advanced were said to be grants—that is to say, gifts—though with conditions attaching as to the way in which they should be spent. The gratitude that I have expressed makes me reluctant to look a gift horse in the mouth but the question is whether this admirable horse was a gift or not. Clause 124 would turn the conditional gifts, after all the conditions have been fulfilled, into a kind of loan to be repaid out of the profits which the trusts since their inception have used to further their work, or they can even be regarded as a kind of investment of the State in the work of the trusts. Well and good, if that had been the understanding when the grants were made, but my objection is to retrospective legislation, which is rightly abominated by all our political parties whenever it rears its ugly head, and my first amendments, Nos. 211 and 213, are to make the proposal for clawing-back surpluses arising from the grants operate only from the passing of this Bill.
I should say that among those who support my amendments the noble Viscount, Lord Boyd, cannot be in his place, being overseas, although he has, I know, written to the Minister and spoken along these lines on Second Reading; and the noble Earl, Lord Jellicoe, who is a director of the Peabody Trust, is also unable to be present. But I am very glad that the noble Baroness, Lady Denington, with her wide knowledge of the housing field generally, and of the Sutton Trust in particular, has put her name to the amendments.
My first two amendments would make the gift horse remain a gift horse, until
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its new nature of a loan horse had been made manifest by the Act. But, if the Minister cannot accept my first two amendments, I hope that my third amendment, No. 215, at least may find favour in his sight. That amendment is designed to achieve at least that the value of a trust's assets before the grants were made is taken into account, so that a trust's assets received for specific purposes, often wider than actual housing as such, can still be used as the trustees decide. I would emphasise that present and future surpluses are generated not only from the grants under the 1974 Act, but also by the assets which the original endowment has produced.
Some purposes, such as the provision of a club room or specialised provision of housing for the frail elderly or other disadvantaged groups, or other purposes of the kind, may be outside the definition of housing, and so outside the scope of the housing association grants, though within the objects of the charitable trusts.
We want to be able to use the fruit of our original assets for such purposes beyond the peradventure of a Minister's discretion. That the acceptance of a housing association grant should lead to the possible expropriation of income from the original funds of a charitable trust would surely be altogether unjust. If they had known of this clawing-back consequence, trusts might well have chosen to look for improvement grants instead of housing association grants which they might well have hesitated to accept. Timeo Danaos et dona ferentes. They should perhaps have guessed what the benevolent Greeks would be up to in some future Act of Parliament! Seriously, I feel that the right of trustees to use the income of their trust's original assets in accordance with the terms of the trust should be enshrined in the Bill. I beg to move.
12.6 a.m.
Lord BELLWIN: In replying to this amendment, I hope it will be helpful to noble Lords if I also take the points raised in Amendments Nos. 212 to 215, since these are all closely connected and concern the worries of noble Lords about the grant redemption funds and the way in which they will operate. I hope, too, that I shall be forgiven if I range a

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little more widely than the text of the amendments themselves and attempt to give some explanation of our intentions in relation to the funds. I believe, in this way, I may be able to assuage some of the fears that have been expressed about the Government's intentions.
First, I think I should spell out the nature of the proposals for the recoupment of surplus rental income and the way in which we envisage them operating—although I shall not, of course, be giving a detailed plan of implementation, since we want to have further consultation with the National Federation of Housing Associations and the National Association of Almshouses before we reach that stage.
As a matter of background, noble Lords will know that housing associations which are registered with the Housing Corporation have, for some years now, been eligible for housing association grant under Section 29 of the Housing Act 1974. This grant meets the difference between the total approved capital costs of a project and the capital sum—for which a "residual" loan is raised—which can be serviced from the net income of the project. This will effectively be the net income when an allowance for management and maintenance costs has been subtracted. Typically, grant meets 80–90 per cent. of the costs. The grant calculation is based on the figures relevant to the time of project completion and is not varied afterwards. If rents and running costs later rise with inflation while loan charges do not, associations are likely to build up surpluses on their projects. In a sense, there would have been an overpayment of grant, but the grant calculation was correct at the time it was made and there is no way of forecasting the extent to which surpluses will arise. The purpose of the clause is to allow the Secretary of State to require associations either to pay the surpluses to him or to apply them for purposes he specifies.
It is unlikely that such surpluses have yet arisen in practice, because the increase of management and maintenance costs has been at least as great as the increase in rents, which are constrained by the 75 pence a week phasing arrangements applied to housing association fair rents in the Housing Finance Act 1972. However, surpluses are now more likely to arise,
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because of the progressive erosion in real terms of the charges on the residual loans and because of the new rent phasing arrangements introduced in the Bill. I cannot say categorically how the Secretary of State plans to use the surpluses which arise, since much will depend on the circumstances of an association at any particular time. I have to say, however, that the Bill clearly envisages that the Secretary of State may wish to recover, rather than simply to direct the use of, surpluses arising. There will often be circumstances in which it will be right to recover the money—for instance, where public funds alone have paid for the activities of an association whose future programme does not warrant retention of large surpluses; but equally there will be occasions when the power to direct is more appropriate.
I have also to say here that I cannot accept the amendment of the noble Lord, Lord Moyne, and the consequential amendment, No. 213, which would restrict operation of the funds to surpluses arising on schemes which received housing association grant after enactment of the Bill. This would discriminate between existing associations, which would be able to retain much of any surpluses arising, and new associations, which would not. It would also allow some associations to retain large sums of money by benefiting from grants which were not intended for that purpose. I shall come on to the detail of this in a moment.
This brings us to another major point which, I know, has caused some concern and is the subject of the noble Baroness, Lady Vickers' Amendment No. 212. I appreciate that it has been argued that it is not right to continue recovering or directing surpluses once an amount equivalent to the original grant has been recovered; and I have received representations suggesting a ceiling on the recoverable amount. I am afraid, however, that I cannot accept these arguments. On recent housing association schemes, housing association grant has typically contributed at least 85 per cent. of the costs, the rest being provided by the residual, long-term loan; and associations have not needed to provide any money of their own.
Moreover, the intention has always clearly been that the grant should do no more than cover an association's costs,

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not that it should put associations into surplus. In these circumstances I cannot agree that the Government have no call on, or responsibility for, surplus rental income accruing above a certain level. On a more practical point, it also seems to me that many associations, being non-profit making bodies, would not have an appropriate use for surplus funds, even if they were to retain them. This, it seems to me, might apply with particular force to some of the associations providing hostels which are the subject of the noble Baroness, Lady Faithfull's Amendment No. 214.
I believe it right, therefore, that surpluses should always be subject to the direction of the Secretary of State for all stock which has been provided with the assistance of housing association grant. The overriding need here is to protect public money, and all associations, large and small, charitable and non-charitable, should be required to establish the funds identifying the surpluses arising, as a matter of good management and accounting discipline. But there will obviously be cases where recovery is highly unlikely—for example, where an association shows a deficit on its activities as a whole and becomes eligible for revenue deficit grant. In such cases, the Secretary of State would normally expect to offset surpluses against their overall deficit. But this does not breach the principle that these surpluses first have to be identified in the manner we propose.
I come lastly to the concern expressed about houses which were originally built by charitable trusts out of charitable endowments. I know there is general concern about this, but also more particular concern about properties which have recently received small amounts of housing association grant for repair works such as new roofs. Another rather similar problem concerns the use of charitable funds to top-up the grant available, providing for an overall higher standard than is considered appropriate for grant-aid. These, I am sure, are the problems which have concerned the noble Lord, Lord Moyne, the noble Viscount, Lord Boyd of Menton and the noble Earl, Lord Jellicoe, in tabling Amendment No. 215.
Again, I am afraid I cannot accept that such property should not be shown in the
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grant redemption funds. But I accept that it would not be right to recover the full amount of surpluses arising where substantial amounts of charitable funding are involved, and I can assure noble Lords that we shall be looking for a formula which accounts fairly for the private funding involved and allows for surpluses deriving from those sources to be retained by the association.
I believe that, given flexibility and full consultation on its detailed application, this clause provides a fair and practical way of dealing with surpluses arising on stock provided with public money. I urge noble Lords to support the clause and I hope that the movers may now feel it possible not to press the amendment before us and not to move Amendments Nos. 212 to 215.
Baroness FAITHFULL: I was to have moved Amendment No. 214, and I am grateful to the Minister for taking the amendments together, thus saving time. But I am sorry to press the Minister on this point. The purpose of Amendment No. 214 was to bring to his notice that, where housing associations are running very small hostels for very difficult people, not only the rent is included but also board and lodging. To divide the rent from the board and lodging is in fact going to entail a great deal of administrative work for the small housing associations for, in fact, very little money. I imagine from what has been said that the Secretary of State will take this into account.
Lord HYLTON: I am extremely grateful to my noble friend Lord Bellwin for saying that there would be further consultations, both with the National Federation of Housing Associations and with the National Federation of Almshouses. However, I was disappointed in his reply in that I did not think he really covered the point made by my noble friend Lord Moyne about retrospection. At this time of night I am very uncertain as to whether points made with great force about the assets of old charitable trusts have really been taken into account.
In his reply the noble Lord made some mention of hostels and I would just like to add into the pool the question of Part III homes for the elderly, on which I had an Unstarred Question earlier this year,

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which was answered by my noble friend Lord Cullen of Ashbourne. It is universally acknowledged that there is an extreme shortage of funds and very little statutory provision on this particular point, and if some of the possible future housing association surpluses could be diverted to this end it would solve a great many problems. I hope that the Government will think a good many times about all these amendments, and I should like to support them in general.
Lord EVANS of CLAUGHTON: Since I understand we are also considering Amendment No. 214, I should like to support what the noble Baroness, Lady Faithfull, has said. I have been involved over the years in the Abbeyfield Societies and it seems that this clause proposes that the Grant Redemption Fund is based on the calculation of rental income obtained from hostels. At the present time hostels only have to identify the rental income proportion of the charge they make to residents at the time they apply for the grant. It seems that under this proposal this calculation will have to be made very frequently and would involve owners of hostels, such as Abbeyfield, in making a fairly complex calculation to divide the rental income from the proportion of the charge that is made for lighting, the proportion that is for heating, for services and for full or partial board, which many hostels of this kind offer.
This seems to me, as I think it does to the noble Baroness, to be an enormous and permanent addition to the work load of the rent officer service for a very small return to the Exchequer. It seems to me that the kind of people we are talking about, who are largely doing this work on a voluntary basis, are having an unnecessary and totally extra bureaucratic load placed upon them, to identify and separate the rental proportion of a charge from the other charges, and I do hope that the Government will reconsider this in order to reduce bureaucracy, which again is something to which we often hear the present Government paying lip-service.
Baroness DENINGTON: I think we shall want to study the Minister's statement very closely. There is a great deal of feeling, particularly on the part of the charitable trusts, about the possibility of having monies that have arisen through the use of their charitable endowments and
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charitable activities sequestered, and I do not think that is really what the Government can possibly want to do. I noted that it was said they would be looking for a formula. As well as the consultations, which I am sure everybody welcomes very warmly, I wonder whether the Minister would consider including as a group the charitable trusts? I think it would be very helpful to them if they could have direct contact in working out the formulas. I dare say our situations are fairly general and yet differ in certain cases.
In the case of Sutton, of which I am a member, the value of their assets is £138 million and the work that has been done with the help of HAG is £17.7 million; that shows the sort of relationship between the charitable holdings and what has been done with Government money. If we can be included in consultations I am sure everyone will be most grateful.
Lord BELLWIN: May I make two or three brief points. On the point the noble Baroness, Lady Denington, made, I am not quite sure of its implications, but I shall certainly talk to colleagues about that. We will consider the point my noble friend Lady Faithfull made about small hostels and the administrative difficulties in making the order; we will certainly give that some thought. As to the point of my noble friend Lord Hylton, I assure him we will look sympathetically at the cases to which surpluses may be applied.
Lord MOYNE: The noble Lord, Lord Bellwin, in his not unsympathetic reply did mention that he would try and find a formula for separating the endowments of the charitable trusts; I think he said that. It seems to me that the amendment proposed—my long amendment No. 215—does exactly that. It takes the value of the endowments and anything built up, not now, but in 1974 before a penny had been received of the HAG grants. The grants started in 1974. It seems to me that avoids all the accounting difficulties because the assets are known at that date. It may not be exactly fair that it is not done gradually up to the present date, but for rough justice the assets can be taken at that known date before the housing association grants came into it. It seems to me that here is the formula the noble Lord is looking for.

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I should mention the new amendment, No. 215A, which is very much on the lines of the hostels amendment but taking it a bit further. The Minister can take into account before clawing back four additional things which are set out in the Act of 1974. It widens Lady Faithfull's hostel exemption (Amendment 214)—taking the hostels and other activities into account before clawing back. It seems to me that Amendment 215A might be deserving of being looked at again. I hope very much that between now and Report stage the noble Lord will look very closely at these things. It seems to me that all of us can have a shot, as we have done, at making the improvements, but that really only the Government can make satisfactory improvements which fit in with their scheme and will stand up. I do think these things ought to be in the Bill, and not dealt with just by assurances. I hope the noble Lord will in the short time between now and Report stage do his best to work out perhaps a few additional sentences as Government amendments. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness VICKERS Baroness VICKERS had given notice of her intention to move Amendment No. 212:
Page 86, line 23, leave out ("for any period") and insert ("until such time as the Secretary of State determines that the grant has been redeemed")
The noble Baroness said: I am in a slightly difficult position because this amendment has already been more or less answered before I have had time to move it. Therefore, I shall not move the amendment, but shall read what my noble friend has said and perhaps bring forward a further amendment at the Report stage.
[Amendment No. 213 not moved.]
12.26 a.m.
Baroness FAITHFULL Baroness FAITHFULL had given notice of her intention to move Amendment No. 214:
Page 86, line 25, after ("projects") insert ("other than hostels")
The noble Baroness said: I do not wish to move this amendment at this stage, but I shall reconsider, when I have read Hansard, whether to bring it up again at Report stage.
[Amendments 215, 215A and 216 not moved.]
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 217:
Page 87, line 21, leave out from ("date") to ("as") in line 22 and insert ("but not earlier than the end of the period of account").
The noble Lord said: I beg to move Amendment No. 217. Your Lordships will have appreciated that, under Clause 124, as drafted, the Secretary of State may demand interest on surpluses accumulating in the grant redemption funds at rates to be decided by him for any period beginning up to 12 months before he serves a notice on a particular association to direct the use of the surpluses. This, however, carries a risk that associations may be charged interest for a period during which they had no knowledge that interest would be payable, or at what rate.
Clearly that is not a satisfactory position for them to be in and we believe the present amendment puts matters right. In practice, the Secretary of State intends to make in advance a general announcement of the rate at which interest on surpluses arising will become payable where these surpluses remain in the funds after the end of the accounting period in which they were generated. When the Secretary of State subsequently gives a notice to an individual association to direct the use of their surpluses, the amendment provides that the earliest date from which interest will be payable is the end of the accounting period. The amendment therefore removes the risk of associations incurring unknown liabilities, and I urge your Lordships to accept it.
On Question, amendment agreed to.
Clause 124, as amended, agreed to.
Clauses 125 and 126 agreed to.
[Manuscript Amendment No. 219AZ not moved.]
Clause 127 agreed to.
Clause 128 [Housing Repairs Accounts]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendments Nos. 219A and 219B:
Page 89, line 39, leave out ("or")
Page 89, line 40, at end insert (" or the Council of the Isles of Scilly.").
The noble Lord said: I beg to move Amendments Nos. 219A and 219B en bloc. These two amendments have one simple purpose—to permit the Council of the Isles to open a housing repairs account, should it so desire. The Council of the Isles is not a district council and therefore does not fall within the present definition of a "local authority" in Clause 128. The amendments extend that definition to include the Council of the Isles. I beg to move.
The Earl of KINNOULL: Do I understand that the Isles of Scilly are included in the Bill? If they are included, may I assume that the Isle of Wight and the Isle of Man are also included?
Lord MOWBRAY and STOURTON: I cannot speak about the Isle of Man. I think the Isle of Wight is included in the local authority of Hampshire.
The Earl of KINNOULL: With respect it is not in the local authority of Hampshire. The Isle of Wight is a separate body.
Lord MOWBRAY and STOURTON: I beg your Lordships' pardon; I am advised that my noble friend is right. But I gather that the Isles of Scilly would not have been a separate authority unless we had particularly mentioned them in the Bill.
The Earl of KINNOULL: Can my noble friend let me know later about the Isle of Man?
Lord MOWBRAY and STOURTON: I shall certainly undertake to do that.
On Question, amendments agreed to.
Clause 128, as amended, agreed to.
Clause 129 [Service charges]:
12.31 a.m.
Lord STRABOLGI Lord STRABOLGI moved Amendment No. 220:
Page 90, line 5, at end insert—
(" ( ) Where a service charge relates to a later period the monies collected for this charge will be accounted for separately by the landlord or the association or company responsible for the collection of the service charge and will be controlled and administered by a representative of the landlord and one representative of each
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category of tenant nominated by the respective categories subscribing to the service charge".
The noble Lord said: This amendment seeks to ensure that these funds are administered and controlled by not only the landlord but also by each category of tenant subscribing to these reserve funds for future expenses. In most mansion blocks there still remain three categories of tenant in varying numbers: regulated tenants, short leaseholders, and long leaseholders. All three of these categories should be in a position to control, through their nominated representatives, in conjunction with the landlord's representative, the administration, investment and disposal of these funds, as and when necessary, to defray legitimate expenditure.
The suggested amendment will prevent cases such as that recently of a block of flats in London where the tenants were asked to pay substantial capital expenditure for future repairs. The block was then sold and the funds so collected were mysteriously whisked away; the tenants being asked by the new landlord to pay that money again. Although the tenants were able successfully to contest the matter in court, they should not really have been placed in that position. Indeed, if the vendor had not had other assets in this country, successful as the tenants might have been in court, they might well not have been able to retrieve the funds had these been deposited in certain overseas areas. I beg to move.
Lord JANNER: I should like to support this amendment. In doing so, I point out that we are now coming to matters which affect a large number of people in this country, particularly those whom we commonly call the middle class. Members in this House, Members in the other place, and people throughout the country are placed in a position of serious difficulty. I am sure that it is well known to those Members who are present and to everybody who is being faced with this serious position.
I shall take an opportunity later of discussing the whole matter and showing how shattering it is, and what terrible results are being effected by certain speculators who are making it impossible for people—some of whom have been in houses for 40 and 50 years, and people

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of the age of 95 and some even over—who are bound to leave their premises at the present time because of the unfortunate situation that has been created.
If there are to be charges, at least let the tenants themselves have something to say about it. I have had a personal experience of this matter. Some time ago I had to leave my own flat because of the enormous rent that was being asked. I then went into another flat. I was told in the other flat—I am paraphrasing—that there would not be any cause for concern for the next three years in regard to any improvements or repairs that were necessary. Within a year they had put up scaffolding, and already they had had one "dangerous" notice served. However, I shall come to that when we debate later clauses.
One thing is certain: whatever else may be conceded, at least this amendment should be accepted, otherwise tenants will be placed in a position of tremendous difficulty and will have no say in what is being done. I therefore hope the noble Lord, for whom we have great respect who has been treating the Committee very reasonably, showing himself willing to consider positions as and when they arise, will appreciate that this is a terribly serious matter.
The Earl of KINNOULL: The noble Lord, Lord Janner, commands great respect in the Committee, but I think he is mixing up a service charge, with which we are dealing here, and the Rent Acts and the rights of landlords under those Acts to charge a certain premium for the right to purchase individual flats.
Will the noble Lord, Lord Strabolgi, explain why he feels his amendment would have a practical effect? I look after the management of certain flats and one knows that under the 1972 Act, as responsible agent for the landlord—and indeed for the tenants—one has a responsibility to notify tenants of capital sums. The noble Lord referred to three categories of tenant, but I do not think they are treated in any way differently. I see the noble Lord looking at me with mystification, but he went on to say that the tenants in the case he quoted resorted to the law and the law supported them, and that is right and proper. However, why does he think his amendment would strengthen the hands of tenants?
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I do not think it would.
Lord BELLWIN: I am grateful to my noble friend Lord Kinnoull because he made the point I was about to make. The Government will be studying the question of reserve funds set aside for future expenditure. This is an extremely complex area and any proposals would have to be very carefully worked out. We are not unsympathetic to the idea underlying the amendment, but, as drafted—and my noble friend said exactly what I would have said—it would not be of any practical effect. However, as I say, we are not unsympathetic to it and, if the noble Lord will withdraw it, then it is something we think should be looked at in any case.
Lord ST RA BOLGI: I am grateful to the Minister for what he has said and, in view of his encouraging remarks, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 129 shall stand part of the Bill?
The Earl of KINNOULL: The way subsection (2) is drafted it is extremely complicated. It says that paragraphs 2 to 6 of Schedule 18 shall not apply and then says that Sections 90 to 91A shall apply. Could we try to simplify the clause for those who have to practise the law?
Lord BELLWIN: I am grateful to my noble friend and I am sure that what he says is most relevant. I promise that we shall look most carefully at his remarks.
Clause 129 agreed to.
Schedule 18 [Provisions replacing sections 90 to 91A of Housing Finance Act 1972]:
[Amendments Nos. 221, 223, 224 and 225 not moved.]
12.40 a.m.
The Earl of HALSBURY The Earl of HALSBURY moved Amendment No. 226A:
Page 139, line 4, at end insert—
(" (3) This Schedule shall have effect notwithstanding anything to the contrary contained in any lease or tenancy agreement which makes provision for payment of a service charge.")
The noble Earl said: This amendment arises out of my practical experience of

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being at one time chairman of a tenants' association in a London block of flats, under the previous legislation. This was rendered unmanageable in one sense as a result of a number of the tenants preempting the decision which ultimately emerged in the case of Frobisher v. the Kiloran Trust on progress payments, notwithstanding the quite clear covenants in their leases.
The drafting of the previous legislation was intended to prevent landlords or their agents from apportioning accruals between accounting periods, which is of course standard practice in accountancy in any other form, but this standard practice had lent itself to abuse, and in the 1974 Act this was restricted. The intention of Parliament was as stated in the judgment in the case of Finchcorn v. Rodriguez, but the subsequent judgment in Frobisher v. the Kiloran Trust clearly went beyond the original intention of Parliament, and the present Bill places that judgment in abeyance henceforward by restructuring the provisions.
It is impossible to run any business without working capital. Whether the business is the British Steel Corporation or a block of flats, somebody has to provide money before money can be spent. If a lease requires tenants to do so by progress payments—and this has nothing to do with the accountancy for accruals—then of course it is the tenants who provide the working capital. An Act of Parliament which relieves the tenants of this obligation without transferring the obligation to the point where it must arrive, or settling the terms on which this shall be done, throws an innumerable number of leases into a state of complete confusion.
The unsatisfactory situation which progressively developed in this context has left a trail of what I might call disputational debris in its wake, which could continue to be troublesome in the future. I hope that the adoption of this amendment will put an end to all these matters and help to forward good relations between landlords and tenants by removing any possibility of doubt that this schedule does override.
I believe that the forward situation is now clear, as stated by the noble Lord's right honourable friend in the other place.
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If I give the noble Lord the reference as column 449 of Hansard of 20th May, I hope that he will have it handy and be in a position to confirm that the position as there stated by his right honourable friend is unchanged. Failing that, if the noble Lord has not got it by him, I have it here and, with permission, will read it.
I apologise for the short notice of this amendment, but it is part of the price paid for the short notice which your Lordships have been given for the entire Bill from beginning to end. Cross-Benchers and Back-Benchers have no mechanism for studying these Bills intensively and it takes us a little while to come up with amendments. If the noble Lord will promise to study the amendment sympathetically between now and report, I would not this evening wish to treat the precise wording as other than negotiable, and I would be ready to withdraw the amendment in the hope of finding something more acceptable for a later stage of the Bill. At this stage I shall say no more. I beg to move.
Lord BELLWIN: Amendment No. 226A seeks to ensure that the provisions in this schedule will override any term to the contrary contained in a lease or tenancy agreement. I can assure the noble Earl that it is quite unnecessary to make specific provision for this. It will not be possible to evade the schedule by placing any clause to that effect in a lease or other agreement.
Obviously, I am not cognisant of the particular reference which the noble Earl mentioned a moment ago; and because of his concern I gladly undertake that we shall look very carefully, not only into what was said in the other place but also into what he has said. It seems to me that what I have before me perhaps does not quite cover the points the noble Earl has made, and I shall want to satisfy myself, as well as I know would the noble Earl, that what I have said is absolutely true. But perhaps it would be helpful if I repeat that we really feel that it would not be necessary, and that his fears are fears which he need not have. Therefore, for the time being, at least, I would ask him if he would care to leave it at that, as indeed he said he would be prepared to do; and we in turn will look at it very closely. But as I sit down I

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would be inclined to feel that in fact he need not be as concerned as he seems to be.
The Earl of HALSBURY: In face of that very positive assurance from the noble Lord, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 228 not moved.]
12.47 a.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 229:
Page 139, line 10, after ("incurred") insert—("—

(a) no greater amount shall be so payable than is reasonable; and

(b) after the relevant costs have been incurred")

The noble Lord said: The purpose of this amendment is to prevent landlords from requiring tenants to pay, as part of their service charges, sums of money in advance beyond what is reasonable. Perhaps your Lordships will allow me to explain how this will work, very briefly. Many leases provide for long leaseholders, and sometimes renting tenants, too, to make advance payments in various ways; for example, through periodic fixed payments or payments based on estimated costs for the year, and in some cases contributions to a long-term sinking fund. I see nothing objectionable to that in principle, and Schedule 18 makes it clear that such advance payments will be lawful.
The position under the Housing Finance Act 1972 was established by a recent High Court judgment. That held that because of the way the Act was worded advance payments were not lawfully recoverable by the landlord. That was not the intention, and I think it would be difficult to justify outlawing such payments. Indeed, great practical difficulties would arise. In the light of representations we have received, however, the Government have tabled Amendment No. 229, which will have the effect of limiting what can be demanded by way of an advance payment to what is reasonable. This limitation will apply whatever the terms of a lease may say.
For example, if there is provision for advance payments to be made on the basis of estimated expenditure in the coming
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year and the tenant considered the estimates to be excessive, he could challenge the landlord in court to show that the payment demanded was reasonable. Nevertheless, much of the value of provisions of this sort lies in their effectiveness in deterring landlords from making unreasonable demands in the first place. This amendment will further strengthen the protection we are giving to tenants paying variable service charges, and I strongly commend it to your Lordships' Committee.
Lord STRABOLGI: I think this amendment will greatly strengthen Schedule 18, and we welcome it.
On Question, amendment agreed to.
Lord STRABOLGI Lord STRABOLGI moved Amendment No. 230:
Page 139, line 13, leave out paragraph 3 and insert—
(" 3.—(1) Costs incurred are to be taken into account only to the extent that they are reasonably incurred and costs incurred in the provision of services or the carrying out of works only to the extent that the services have been provided or the works carried out to a reasonable standard and so certified by an independent Surveyor.
(2) Estimated costs including costs representing a provision for future expenses of a non-annual nature or a contribution towards a reserve fund in respect of future expenses are to be taken into account only to the extent that they are reasonably estimated and so certified by an independent Chartered Accountant.
(3) The test of reasonableness is to be applied after the audited accounts are produced and actual costs incurred for the service charge year are known.")
The noble Lord said: With your Lordships' permission, I should like to speak to Amendments Nos. 231, 232, 233, 234, 235, 236, 239, 240 and 243A. These amendments are all linked, and deal with the whole question, and indeed the whole problem, of service charges, which is one which has arisen in the last 10 or 15 years, of course, and has become increasingly acute—and my noble friend Lord Janner referred to it in a previous amendment. Many thousands of people who live in flats have to pay a service charge to the landlords or managing agents. This is something which has always been customary, and, of course, is acceptable. They include many long leaseholders, who may have leases for periods such as 99, 100 or 125 years on their flats. These service charges are

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intended to pay for items such as the provision of hot water or heating; the cleaning of common parts of the building, such as the staircases; repairs to the common parts or the main structure of the building; maintenance of installations in the building, the upkeep of the surrounds; external decorations; the payment of the porter if there is one, and so on.
During what I may call the break-up era of flats, these service charges began to be used for quite a different purpose. In the period about 10 to 12 years ago when it was easy to borrow money and people went in for property development as a means of quick gains, these property companies acquired all the old-fashioned Key Flats and other flats owned by family trusts. They bought them up--and there was no control—and they then persuaded the tenants, if they could, to buy the long lease under threat of eviction if they did not. Many did buy the long lease and signed contracts which required them to pay service charges; and then the owners began to recoup what they had not been receiving in rents—for, of course, they had sold the long leases—in the form of service charges. This has accelerated because since the collapse of the property market in 1974—when Mr. Tony Crosland said, "The party's over"—many of these large empires fell into liquidation and the liquidator was obliged to sell them off to other property companies who then sold them off to others, sometimes to overseas and offshore interests.
The position is, therefore, that in many blocks of flats in London, well-known flats, the tenants are being obliged to pay very large sums for refurbishing and tarting up the whole building. The noble Earl wonders at the word I used. It was used in another place, and that is as good a precedent as I know. They are being asked to pay very large sums for this sort of thing which, I submit, is really a capital expenditure. There is no control over it. As well as that, in some cases, if they ask to see the books they find that the landlord is a company which they cannot get at.
The provisions of the present Bill do not tackle the root of the problem which is a lack of control by the people paying for the services, the extent and value for money of the expenditure. Instead, the Government has taken the view that the tenants and leaseholders can retrospect-
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tively challenge their service charge bills in the county court. But why should they have to go to court every year? These amendments, therefore, seek to tighten up the procedures. I beg to move.
Lord EVANS of CLAUGHTON: I very much support and admire (if that is the right word) the noble Lord, Lord Strabolgi, for putting down these amendments. The service charges problem is mainly a problem in inner London, as I understand it. In spite of many attempts, it has not been possible to cure it by legislation up to now. I think that a number of Conservative Members of the other place have tried in various amendments that have been moved in the passage of the Bill there to deal with the problem in an effective, watertight way. I think that, on the admission of practically everyone who has been involved, it has evaded the best attempts of the amateur draftsmen. One would hope that the attempt made by the noble Lord, Lord Strabolgi, will encourage the Government draftsmen to try again to create legislation which will prevent the taking of advantage of people through the imposition of service charges, which is becoming a very serious problem, as I am advised, in the inner London area, and some other areas but not on a national basis.
The attempt made in these series of amendments is a very good attempt. In Amendment No. 230 he gives two protections to the tenants: that the costs are reasonably incurred and that they are certified by an independent surveyor. Those are great improvements over the present rather haphazard protection that the tenant has. I am not quite so sure as to the efficacy of Amendment No. 231. The provisions of Section 32 of the Housing Act 1961 are absolute prohibitions. Paragraph (b) is welcomed from these Benches. It makes certain a position that is already clear.
Generally, therefore, I think the amendments which are set out here at great length are a brave attempt to deal with what I hope the noble Lord, Lord Bellwin, will admit is a serious problem. I hope that he will be able to offer constructive ideas how the wishes not only of noble Lords on this side of the Committee but Members of the other place and a very wide spectrum of people from all political backgrounds

719
see as a serious blot in the central areas of London and one that cries out for remedy. If the noble Lord is not willing to accept the amendments, I hope he will have something positive and constructive to offer in their place.
12.57 a.m.
Lord BELLWIN: Of course, I know the concern. If I had not known it, it has been raised in your Lordships' House sufficiently—not least by the noble Lord, Lord Janner, on one aspect of it, although it is not strictly speaking so much the service charge aspect that he always raises. Nevertheless, the whole area of mansion blocks is one of concern. I am grateful to the noble Lord, Lord Strabolgi, for putting down these amendments, which I will try to answer in the kind of detail which I think they merit, and for dealing with them in the way he is doing, which is most helpful. I think that I ought to answer them in some detail.
The Government have provided in paragraph 3 of Schedule 18 a very simple and clear-cut limitation on the costs which a landlord may recover in a service charge. First, costs are only to be taken into account to the extent that they are reasonably incurred. This means that if the landlord decides to put very expensive wallpaper on the staircase walls he would only be able to recover the cost of using wallpaper of a reasonable standard. Secondly, costs are only recoverable if—and I repeat the "if"—the services or works are of a reasonable standard This means that if the court decided they had been provided to an unreasonably low standard it could rule that none of the cost was recoverable from the tenants.
Let us now see what Amendment No. 230 would do to that provision. First, it would remove that very important "if", and substitute "to the extent that" thereby substantially weakening protection to tenants given in paragraph 3. Then it would require an independent surveyor to certify that the standard was reasonable, but there is no indication of who appoints the independent surveyor, or what happens if the first surveyor who is asked will not certify that the standard was reasonable, but the next one will, or what effect this would have if the court was asked to say what was reasonable.
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It goes on to say that estimated costs, including contributions to a reserve fund, are to be reasonably estimated and so certified by an independent chartered accountant. I think it is very difficult these days for anyone to be sure about what is a reasonable estimate, and that is why in Government Amendment No. 229 which bears on this question we have provided not that estimates must be reasonable, but that demands for advance payments must be reasonable. I fail to see why a chartered accountant should he considered specially qualified to pronounce on estimates. That is really not his job.
But when we get to the final part of this amendment we see that perhaps there was no need to bring in the chartered accountant at that stage because it says that the test of reasonableness is to be applied after the audited accounts are produced and the actual costs incurred are known ! I really do not see the point of saying that estimates must be reasonable if the test is not to be made until the costs have been incurred.
Moving on to Amendment 231, if I understand it correctly, it tries to deal with the problem perceived to arise from the judgment in Campden Hill Towers v. Gardner, 1976.
Under Section 32 of the Housing Act 1961, landlords must keep in repair specified parts of the dwelling for all tenancies under seven years, even if the lease suggests otherwise. The apparent problem is that Section 32 only applies—and this was held in the Campden Hill Towers v. Gardner case—to the tenant's own accommodation. Seemingly therefore the landlord can recover the cost of repairs to common parts, and even other tenants' accommodation, through the service charge or rent. The amendment would try to prevent landlords doing so.
I would suggest that this is not the right solution. First, Schedule 18 is not the correct place. Section 32 to the Housing Act 1961 deals only with those on short leases—leases of less than seven years—while the great majority of those to whom Schedule 18 applies will be on leases of seven years or more. Secondly, an adequate and more appropriate safeguard already exists through the rent registration system. If the landlord is

721
trying to pull a fast one by requiring a tenant to pay for repairs to other people's homes, it is highly unlikely that the rent officer would agree to register a service charge as being variable.
Moreover, we have provided in the Government's earlier amendments (Nos. 127 to 130) to Clause 58 and Schedule 6 that the tenant will in future have the opportunity to challenge the landlord's evidence on service costs before the rent officer registers a fair rent.
I am also bound to say that, although this amendment was tabled in another place, no one has submitted to the Government any evidence of an actual problem. I agree that we should also look ahead and try to prevent potential problems arising. This one, however, seems rather remote. I hope that, in the light of this explanation, the noble Lord, Lord Strabolgi, will accept the rent officer procedures as being more appropriate to this issue, and that this amendment really does not hit the target.
I move to Amendment No. 234. This substitutes for paragraph 5 of the Schedule complex arrangements for consultation on works. I could go through it in great detail explaining why it is unsatisfactory, but that would take a long time, so, if your Lordships are content, I should like quickly to summarise just the main objections.
It provides conflicting arrangements for deciding what is reasonable. It would enable tenants who do not have to pay for works to vote on estimates. It contains unworkable arrangements for dealing with disagreements and, by finally referring them to the court, would ensure that costs in such cases would in the end have increased, given the inevitable delay. It disregards landlords' contractual obligations and would require tenants' associations to consult non-members. I do not doubt that the noble Lord's intentions are of the very best, but I fear that in this case it really would not be too helpful. Certainly, this is not, as I see it, a party political matter at all, and one is really trying to find solutions which would get to where I think everyone really wants to be.
If I may turn to Amendment No. 233, it concerns the cost limits above which a landlord must consult tenants about proposed works. Under Schedule 18, the
722
landlord will not be required to consult about works costing less than £500. The amendment would reduce that minimum to £200, so that in a block of, say, 10 flats consultation would be required on works costing more than £250, being £25 per flat. I do not think really we should be justified in requiring landlords to consult tenants about works costing less than £500. Firms could well be unwilling to estimate for such minor works or, if they did, would want to cover themselves against the cost of providing estimates which might not be accepted. That would increase their overheads and would not be in the general interests of tenants. If I understand this amendment correctly, it also tries to limit any subsequent alteration to the proposed amounts of £25 and £200 to the level of inflation as measured by the retail price index.
I grant that the main reason for providing that the proposed amounts can be varied by order is so that they can be up-dated to allow for inflation, but I see no need to put a limitation of this kind in the Bill. For one thing, we need to see how the proposed limits work in practice, and, for another, any change will be made by statutory instrument laid before Parliament.
In connection with Amendment No. 235, we have provided in paragraph 5(6) of Schedule 18 that in an emergency a landlord may begin works before the period for consultation has expired. Paragraph 6 allows the court to dispense with all or any of the consultation requirements if it is satisfied that the landlord acted reasonably. It would be up to the landlord, if challenged, to satisfy the court that there had been an emergency. It would allow the landlord to dispense with the elaborate requirements in Amendment No. 234, if he can demonstrate that there was an emergency, but it does not say to whom he must demonstrate it—the tenants, the association or the court. It would not be a very satisfactory adjunct to Amendment No. 234. Considered on its own, it is totally unsuited to the proposals in the Bill, which already provide for emergency situations.
Moving to Amendments Nos. 236 and 248, they would require every landlord to provide a detailed account of expenditure for the service charge year, and a statement of the reserve fund with

723
an audited report which is to be "circulated" to each tenant. Presumably, that means that every tenant is to be given a copy, whether he wants it or not. I am not convinced that it is necessary to require every landlord to supply all his tenants with something they may not want and, at the same time, to impose a penalty if he fails to do so. The requirement would have its own costs which tenants would have to pay. Why force those who are content to pay for something they do not want?
I shall not go on about that amendment. I have lots of notes about it, but I am anxious to come to the end of this part. If I may come to Amendment No. 239, that really amounts to five separate amendments. If the noble Lord will allow me, I shall not deal with them in detail. I wonder if I may sum up by saying that we are really anxious to know whether there are ways in which we can do better that which is of concern. I have tried to demonstrate that the proposals—although moving in particular directions—have for one reason or another, in the individual circumstances, their own problem and limitations.
What they do which is helpful is that they make us think about whether or not these are the directions, modified perhaps in some ways, in which we ought to be going, but they do not solve the problems as we see them, and do not take us much further. However, I need hardly say that if the noble Lord, Lord Strabolgi, feels that we ought to be talking, perhaps outside the Committee, about these matters and trying to get something that would get us into a better situation, then, of course, we should happily agree to do so.
Lord JANNER: I am sure your Lordships have listened with very great care, both to the proposal in the amendment and to the reply. What I should like to ask the Minister is this. I am sure that he will consider these amendments carefully, as he has very willingly considered suggestions which have been put before your Lordships on previous amendments. But will he please keep in mind that all this has arisen because of the very serious position which has been created by speculators in property? Will he do his utmost to prevent further
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damage to the tenants, by giving every possible consideration to these matters, as well as to others?
The Earl of KINNOULL: What does the noble Lord mean by speculators benefiting from a service charge?
Lord JANNER: It is now ten minutes past one, and I should very much like to expand on that matter. Putting it very simply, we are now dealing with leaseholds. What is happening now is that under leaseholds, which was a very ingenious idea created at the time of the Industrial Revolution—
The Earl of KINNOULL: This is irrelevant.
Lord JANNER: It is very appropriate. In the leases which one had then, the leaseholder had to do the repairs. They were within his discretion. If therefore there was any dispute about repairs, the landlord had to dispute them. Because of the shocking things which have happened in consequence of the absurd regulations as they stand at present, with tribunals giving entirely wrong decisions in consequence of what I have mentioned time after time in this place and not taking into consideration the scarcity of rented houses in an area, one is now placed in a position where the tenant has to protest and see to it that he is protected.
That is why I am asking the Government to be very careful about this and to try as much as they possibly can to minimise the damage which has been caused by people who have bought houses and speculated in them, and consequently placed hundreds of thousands of people in this country in a position where they have to leave because they cannot afford the accommodation and cannot meet the demands that are made upon them. That is why I am pressing the point. Perhaps the noble Earl will consider it from that point of view. If he is leaning at all on one side or another, he should lean on the side of the tenant who is being placed in this terrible position.
The Earl of KINNOULL: I know that the noble Lord, Lord Janner, feels very strongly about the tenant's position, and rightly so. He is a practising solicitor of great merit. But he is missing the point.

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We are talking about the service charge. This is the narrow point, although it is not narrow because the service charge is a delicate point. The noble Lord, Lord Strabolgi, has raised a very important point, but it is not Lord Janner's point. support my noble friend. Subsection (3) greatly strengthens the position of tenants. Probably the most vital question is this: May I ask my noble friend what discussions he has had with the professional bodies which look after not only landlords but tenants as well—those who have to interpret the management clauses of leases? Can I assume from him that they were brought into the discussions to try to firm up what we all want to achieve; namely, a better deal for tenants under service charges?
1.14 a.m.
Lord BELLWIN: I cannot give details of the discussions and consultations which took place. I hope that we had them with the professional people to whom my noble friend refers. If he has any suggestions to make about that, we shall be glad to hear of them. Other than that, have nothing to add.
Lord STRABOLGI: I am grateful to my noble friend Lord Janner for what he has said and also to the noble Earl, Lord Kinnoull, who knows a great deal about this subject. There are many good landlords, but I am afraid that there are some bad ones. As the noble Earl, Lord Kinnoull, said, the question of service charges has to be seen in the context of the apartment houses of London and some of the other cities. Ten or 15 years ago we allowed what were ordinary, rented flats which went up in an orderly way and which were run in what I call a Dolphin Square way—indeed, in the way Dolphin Square is still run—to be acquired and suddenly to become long leaseholds. This happened in a very few years, but what we did not do was to back it up with a proper system of law. The French have owned their flats for most of this century and a lot of the last, but they have a proper system of law. The tenants there own the freehold of the flats.
This is something to which I would urge the Government to give their attention, because, as the noble Lord, Lord Bellwin, said—I am most grateful to him for his full explanations—this is not a party
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matter. It has given considerable concern to all the Central London Conservative Members who have taken it up in very strong terms. It is not a party matter but it is, I think, a major scandal. I know a large block of flats, which was sold off to an offshore company, where the tenants have had the builders in knocking around for six years now, refurbishing, turning flats next door to them into luxury flats. It has been going on for six years, with the builders in and all that that implies. And who is paying for it? They are, because in their leases they have to pay for refurbishing and improvements. They are paying for it. They do not want it, but they are having to pay for it. The block is owned by a company that is based in Curacao, with directors living in Switzerland. This is the sort of thing that is going on in many places in London. It is something to which the Government should give their attention.
I am very glad that in another place a a Select Committee—these Select Committees are, I think, one of the most important developments we have seen in Parliament since the war—is going to look into this whole question of the flats in Central London and our other cities. The Ministers and the department will be required to go and give evidence about it. I hope that some good will come. In the meantime, I am very grateful to the noble Lord, Lord Bellwin. I know he takes an interest, and his heart is in the right place. I beg leave to withdraw the amendment.
Lord DAVIES of LEEK: I do not know whether I am in order, but this issue is so important that I cannot understand why we are considering it at this time of night. Why should we rush it through and why could the Government not give more time? This is important to tens of thousands of people, particularly in our cities.
Amendment, by leave, withdrawn.
[Amendments Nos. 231 to 236 not moved.]
Lord BELLWIN Lord BELLWIN moved Amendment No. 237:
Page 140, line 41, leave out ("and that person") and insert ("(and so on if that person is not himself the superior landlord) and the superior landlord")
The noble Lord said: This amendment closes a gap we have noticed in para-

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graph 8 of Schedule 18. It relates to a tenant's request for a summary of costs incurred by the landlord or a request to see the accounts or other documents on which the summary is based. Without going into more details, unless anyone requires me to do so, I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 238 to 240 not moved.]
1.15 a.m.
The Earl of HALSBURY The Earl of HALSBURY moved Amendment No. 241A:
Page 141, line 31, after ("not") insert ("or will be or will not he")
The noble Earl said: This amendment is the second of my two amendments arising from practical experience of onetime chairmanship of a tenants' association. If it is not well run, a tenants' association can be just as troublesome to a landlord as a landlord can be hardhearted towards his tenants. A tenants' association is associated with a number of difficulties, in the sense, as the noble Baroness, Lady Denington, said earlier, that it is badly in need of professional help. To start off with, it is, for example, not a corporate body which can enter into covenants with the landlord, under seal, binding on future members. It has a fluctuating membership which can include the type of barrack-room lawyer who makes cordial relationships between the tenants' association and the landlord almost impossible, despite the will of many to be on friendly terms.
In such circumstances, decisional paralysis can descend on the relationship and the amendment gives the right to ask for a declaratory judgment in the county court with a view to procuring a resolution in advance of matters which can drag on in dispute indefinitely. It merely gives the county court jurisdiction over the same matters before the event as it would have after the event in those cases where no decision can be agreed on between the tenants' association and the landlord. I believe it would facilitate relationships if this were the case and there were a court to which decisions could be referred. I beg to move.
Lord BELLWIN: I presume the intention of this amendment is to enable a
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tenant to challenge the reasonableness of estimated costs—
The Earl of HALSBURY: Or a landlord.
Lord BELLWIN: Indeed, yes, but I do not think it would be realistic to expect the court to make a declaration of what will or will not be reasonable in the future. I have already explained to your Lordships that Government Amendment No. 229 will enable tenants to challenge the reasonableness of demands for advance payments and I think that is a practical way of dealing with this question. I really have nothing more that I can add in reply to the noble Earl, but I should like to say what I said to him on the last amendment that he moved: I cannot see at the moment that we can be more helpful on the point but we will look at what he has said and I will consult with my colleagues and, if I feel that we ought to be doing something about the matter along the lines that he has suggested, I will take steps so to do. Otherwise I fear I cannot be helpful on this occasion.
The Earl of HALSBURY: I am anxious to oblige the noble Lord and to save the time of the Committee by not prolonging the argument, but when the noble Lord talks about asking what will be reasonable in the future, of course the future means the present when a decision has to be taken, and the court would only be asked to decide in the present how it would view the matter retrospectively. If the noble Lord will, as it were, take that under his belt as well, then I shall be content. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
1.22 a.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 242:
Page 141, line 37, leave out ("£200") and insert ("£500")
The noble Lord said: This amendment fulfils an undertaking given by the Government in another place. Paragraph 7 of Schedule 18 requires a landlord to supply a tenant who asks for it with a summary of costs which relate to his service charge. There are a number of other points to the amendment but I

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think that they are self-explanatory. I beg to move.
Lord STRABOLGI: Perhaps I may speak also to No. 243. I agree that the figure of £200 is derisory and I think £500 is more realistic. We felt that £1,000 was probably more appropriate in these days, but there we are: if the Government want £500 and it is not a sufficient deterrent, perhaps they will consider putting it up later.
On Question, amendment agreed to.
[Amendments Nos. 243 and 243A not moved.]
Lord STRABOLGI Lord STRABOLGI moved Amendment No. 244:
Page 142, line 17, leave out paragraph 15.
The noble Lord said: Formerly all tenants who paid a service charge which varies, or may vary, had a right to information under the Housing (Finance) Act 1972. Under the present provisions of the Bill about 90 per cent. of Rent Act tenants will be excluded from any right to information. Only those 10 per cent. or so of Rent Act tenants whose rents have the service charge element entered by the rent officer as variable are allowed to have the right to service charge costs information, such as certified accounts I beg to move.
Lord BELLWIN: We have already debated the Government's amendments 127-130 to Clause 58 and Schedule 6. These fulfil our commitment to give fixed fair rent tenants the opportunity to challenge the evidence on service costs deployed by their landlords before the rent officer. The rent officer, in fixing a fair rent, would anyway only take account of service costs which he considered to be reasonable. But our amendments give an added safeguard to the tenant. I would suggest to the noble Lord that this is a somewhat better approach than that in his amendment because it places the safeguard in the right place. Fixed fair rent tenants can only have their rent increased by the rent officer, and it is at that point we are providing them with the right to challenge the landlord's evidence.
The noble Lord's amendment seeks to apply the machinery of Schedule 18,
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which is designed for those whose leases provide for a service charge which can be varied at any time according to the costs incurred. It is not intended for fixed fair rent tenants, and I could not say quite what the legal effect would be if it was applied to them. All I could guarantee is uncertainty and confusion for all those involved. In the light of this, and the major safeguard introduced by the Government's earlier amendments, I wonder if the noble Lord will feel able not to press this amendment.
Lord STRABOLGI: I am very grateful to the noble Lord for his explanation. I think it is very important to have this on the record, particularly for people outside who are very interested and affected by this. We are grateful, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord STRABOLGI Lord STRABOLGI moved Amendment No. 245:
Page 142, line 21, leave out paragraph 16.
The noble Lord said: Clause 16 as now included in the Bill would encourage landlords who have not done so as yet to collect their service charges through an association or management company and in this way give landlords a free and unfettered control of administration and service charges which they could then levy as they see fit on tenants who previously paid their rent direct to the landlord. This is a loophole in the Bill which I hope the Government will be able to block. I beg to move.
Lord BELLWIN: How nice it is to be able to say yes, we do entirely agree.
On Question, amendment agreed to.
Lord STRABOLGI Lord STRABOLGI moved Amendment No. 246:
Page 143, line 9, leave out paragraphs 21 and 22 and insert—
(" 21. A recognised Tenants' Association is an association of tenants of flats in a building where at least 55 per cent. of the tenants are members of the association. Where an association satisfies this definition the Secretary shall give written notice to the landlord together with a list of members. Annually thereafter the secretary shall supply the landlord with a list of members to prove that the association

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continue to satisfy the requirements of this paragraph.
22. The County Court or the Secretary of State may issue a certificate to the landlord certifying that a tenants' association is to be recognised Tenants association, notwithstanding that it does not meet the requirements of paragraph 20 and such certificate Hill stand until an application is made by the landlord to cancel same.")
The noble Lord said: There is no minimum level of membership required under the Bill before the landlords may recognise an association. It is, therefore, quite feasible for the landlords to recognise a less representative association or even one specifically set up by the landlords themselves. Formerly associations with over 60 per cent. of the eligible membership were able to take action in the county court in a service charge case. This facility has been, it seems, withdrawn from associations. I beg to move.
Lord BELLWIN: Amendment 246 would amend the provisions in Schedule 18 relating to recognition of tenants' associations.
I agree that it would seem reasonable in most circumstances for a tenants' association to be recognised if 55 or 60 per cent. of the tenants in a block belonged to it, but membership is not the only criterion which will need to be satisfied.
Under the Bill, the association will have the right to be consulted on proposed major works to the block, but not all tenants have to contribute to the cost of works. Generally speaking, it is only long leaseholders. Consequently, in a block containing renting tenants and long leaseholders it would not be right for tenants who do not have to pay to be able to vote on estimates for works. In order to obtain a certificate of recognition under the proposal in the Bill, therefore, an association will have to have rules which ensure that only those who pay vote. I wonder whether in the light of that consideration the noble Lord may feel able to withdraw his amendment.
Lord STRABOLGI: I am grateful to the noble Lord. We will study carefully what he has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos.247 and 248 moved.]
Schedule 18, as amended, agreed to.
Lord DENHAM: Having on previous occasions on this Bill had to say to your Lordships that I was not terribly happy with the progress, I think I really ought to say that I am very grateful indeed for the way that the Committee has really put itself out today to get this Bill through in the way that it has. Having said that—which I feel very strongly and very sincerely—I beg to move that the House do now resume.
Moved accordingly, and, on Question. Motion agreed to.
House resumed.

THE GREATER LONDON COUNCIL (MONEY) (NO. 2) BILL
Brought from the Commons; read I", and referred to the Examiners.
  EAST AFRICAN ASIANS: IMMIGRATION RIGHTS
  EAST AFRICAN ASIANS: IMMIGRATION RIGHTS
  DRY POWDER FIRE EXTINGUISHERS
  DRY POWDER FIRE EXTINGUISHERS
  MILITARY EQUIPMENT: SALES TO ARGENTINA, ET CETERA
  MILITARY EQUIPMENT: SALES TO ARGENTINA, ET CETERA
  GUYANA: SUPPLY OF MILITARY EQUIPMENT AND TRAINING
  GUYANA: SUPPLY OF MILITARY EQUIPMENT AND TRAINING