Sitting of 5 April 1982

Preamble
The House met at half-past Two o'clock
The House being met, MR. BERNARD WEATHERILL, THE CHAIRMAN OF WAYS AND MEANS, at the request of MR. SPEAKER, proceeded to the Table and, after Prayers, took the Chair as DEPUTY SPEAKER, pursuant to the Standing Order.

Oral Answers to Questions
  ENERGY

    Standing Charges
    Mr. Greenwayasked the Secretary of State for Energy if he is ready to announce the results of his discussions on standing charges; and if he will make a statement
    Mr. Chapmanasked the Secretary of State for Energy whether, in his review of standing charges for gas and electricity supplies, he has made any assessment of the fairness of the criteria used to determine such charges
    The Under-Secretary of State for Energy (Mr. David Mellor): My hon. Friend the Member for Braintree (Mr. Newton) and I are still considering the matter, and the point raised by my hon. Friend the Member for Chipping Barnet (Mr. Chapman) is one of the matters that we have very much in mind. I am having discussions with gas and electricity supply industries, whose sole responsibility it is to fix the level of standing charges. A statement will be made as soon as possible.
    Mr. Greenway: I appreciate that my hon. Friend has an indirect role in this matter, but does he accept that standing charges are widely, misunderstood, especially by the elderly, who find it difficult to cope with them? Is there some means which be could press by which standing charges can be consolidated into overall charges so that consumers pay only for what they use? Will he consider removing standing charges when the cost of the energy consumed is less than the standing charge?
    Mr. Mellor: I am grateful for my hon. Friend's recognition that the extent of charges is a matter for the industries concerned. We are once again examining the rationale behind standing charges. When an examination was carried out in 1976, it was concluded that standing charges were appropriate. The tariff basis for the gas industry was approved as recently as 1979 in the Price Commission investigation.
    Mr. Chapman: I am grateful to my hon. Friend for what I consider to be a most helpful and encouraging reply. While I appreciate that the cost of the standing charge is based on the cost of bringing the energy from its source of supply to the consumer, including the provision and maintenance of supply pipes, will he nevertheless keep in mind, when decisions are being taken, that it
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    seems unfair that the consumer must pay the standing charge when it becomes a substantial proportion of the total bill? Does he agree that in equity there should be some arrangement whereby standing charges are either reduced or transferred to the cost per unit of the energy concerned?
    Mr. Mellor: I am grateful to my hon. Friend for raising that point. I am well aware of the type of case to which he refers. If the object of the exercise is, as it was for our predecessors, to find a way of helping poor consumers, the problem is that poor consumers are not necessarily the smaller ones. Any removal of standing charges for one group could only lead to material increases in unit charges for others. That could make the position of some poor consumers worse than it is now.
    Mr. Donald Stewart: Is the hon. Gentleman aware that standing charges are not only a substantial part of energy bills, as the hon. Member of Ealing, North (Mr. Greenway) said, but that in many cases they are higher than the cost of consumption? Is he further aware that that is what old-age pensioners and people living on their own resent? Will he take the point made by his hon. Friend the Member for Ealing, North, that some way should be found to sink that cost in the overall cost of energy?
    Mr. Mellor: I had hoped that I had made the point clear. We are examining the matter. I am anxious not to raise hopes. It is only fair to say that when an exhaustive investigation was undertaken some years ago, it foundered on the difficulty of finding any form of tariff structure that would help all poor consumers. Not all poor consumers are necessarily small ones. That difficulty stands in the way of assisting people by merely removing standing charges, as standing charges are worth some £500 million in revenue to each supply industry and that money would have to be found in some other way.
    Sir Peter Emery: Will my right hon. Friend bear two matters in mind? First, will he bear in mind that in the 1976 inquiry the percentage of the bill represented by the standing charge was frequently nothing like so great as it is now and that standing charges have risen considerably in the past six years? Secondly, although one may not be able to help all poor people, will he bear in mind that those with small gas or electricity bills who are trying to keep their costs down are usually the poorest section of society and that it would be better to help some people than to help no one?
    Mr. Mellor: I certainly take my hon. Friend's point about the level of standing charges, but both industries have been seeking to make standing charges more truly reflect the underlying costs that they are supposed to represent. My hon. Friend will also be aware that in the past there was a low standing charge with a higher price for the first 52 therms. That has now gone and has been replaced by a higher standing charge.
    Mr. Stoddart: Is the Minister aware that, in the past two years, the charges have risen by between 300 per cent. and 400 per cent. and that the increase is greatly resented, particularly by pensioners and others on low income? Is he aware that pensioners lobbied certain hon. Members only last week—and pensioners are certainly low paid—asking for a withdrawal of the charges?
    Mr. Mellor: I know that the hon. Member wishes to be fair. He will therefore bear in mind the point that I made

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    in answer to my hon. Friend the Member for Honiton (Sir Peter Emery). It is a distortion to refer to increases of 300 per cent. in gas standing charges, because the higher charge for the first 52 therms has now been abolished. Had that system been in place in 1979, the gas standing charge in money terms would have been £6·37 per quarter.
    I had a most constructive meeting at the Department with the pensioners' group that organised the petition. I assure the hon. Gentleman that all these matters are being looked into with great care. As I said last time, however, I do not wish the Opposition to go away with the idea that it will be much easier for us to resolve the matter than it was when they were in Government.
    Mr. Rost: Will my right hoh. Friend look again at the percentage increase in standing charges for gas? Does he agree that British Gas is now using this as a disguised form of tariff, which is bearing most unfairly on some small consumers who are genuinelly trying to economise?
    Mr. Mellor: I have met the deputy chairmen of both supply industries to discuss these matters. We are concerned to ensure that the charges truly reflect the proper costs to the industry and are in no way a cover for inefficiency, but it appears that the accounting basis for the standing charges is accurate and truly reflects the costs that it is supposed to represent.
    Mr. Rowlands: As has been made clear by the exchanges today, there is now a widespread demand in all parts of the House for a genuine and radical review, and not just the promise of a half review. Can the Minister tell us the time scale of the review that he and his colleagues are undertaking and when we may expect the result?
    Mr. Mellor: The last review, which was very thorough, took the best part of a year. Clearly we wish to take a great deal less time than that. Nevertheless, this involves looking again at the considerable amount of work that was done in 1976. It also involves consultation with the industries and with my hon. Friend at the Department of Health and Social Security. I can only tell the House that these matters are being considered properly and seriously. As soon as we are in a position to make an announcement, one will be made.

    Coal Industry (Productivity)
    Mr. Dormandasked the Secretary of State for Energy when he next proposes to meet the chairman of the National Coal Board to discuss productivity in the coal industry.
    The Under-Secretary of State for Energy (Mr. John Moore): My right hon. Friend meets the chairman of the board frequently to discuss this and other aspects of the board's business.
    Mr. Dormand: When the Minister next meets the chairman, will he congratulate the miners on the increase in productivity, not least on the 6 per cent. increase at the coalface in the past year? In view of the stocks that have arisen as a result of the increase in productivity, will he impress upon the chairman of the NCB that for that reason there should not be pit closures?
    Secondly, will the Government do more than they are doing at present to increase the use of coal in industry, as their present efforts can only be described as feeble?
    Mr. Moore: The hon. Gentleman is right to congratulate the miners on the overall increase in
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    productivity of 3·4 per cent. output per man shift. It would be wrong, however, to encourage people to believe the simplistic notion that that is the only reason for the increase in stocks, which relates to the long-term supply and demand position. I am sure that, on reflection, the hon. Gentleman will wish to congratulate the Government on the improvement in the coal boiler conversion scheme announced in the Budget. I am sure that he appreciates the Government's attempts to produce real increases in the use of coal.
    Mr. Archie Hamilton: Will my hon. Friend confirm that if production is running well ahead of demand, there will have to be cutbacks in uneconomic pits?
    Mr. Moore: My hon. Friend draws attention to the undeniable problem facing the industry and all who support its long-term needs—namely, over-supply relative to current demand. It is no use ignoring that aspect. All who wish the industry well in future must recognise that basic difficulty.
    Mr. Gwilym Roberts: While congratulating the miners on the increase in productivity, may I ask whether the Minister accepts that the best way to increase productivity in the longer term is to sink new, modern pits which are up-to-date in every sense? In that respect, will he take what steps he can to speed up development in areas such as Cannock Chase, where there is the possibility of further coal development?
    Mr. Moore: The hon. Gentleman is assiduous in pursuing his constituency interest in this matter, but I am sure that he and all who are interested in the future of coal will understand the dilemma that we face. We have to develop new economic capacity while recognising the problems of closing uneconomic capacity.
    Mr. Skeet: Does my hon. Friend accept the "Plan for Coal" production targets of 135 million tonnes and 170 million tonnes by the end of the century in the light of what has been said about the declining market and increasing subsidies from the State?
    Mr. Moore: We and the industry are concerned to provide coal at competitive prices to meet the needs of the market place. I imagine that that will allow the industry to sell more coal to that market, but it must be competitive and offer security of supply.
    Mr. Eadie: How can the Government have any credible conversations or discussions with the NCB about productivity when their own policies are responsible for delaying replacement coal production capacity? Does the Minister recognise that that is the true meaning of the situation in the Vale of Belvoir and the comments of my hon. Friend the Member for Cannock (Mr. Roberts)? Will the hon. Gentleman give a categorical assurance that in the Vale of Belvoir, for example, the pits will be sunk in the lifetime of this Government?
    Mr. Moore: Quite the reverse of what the hon. Gentleman says has actually occurred. The Government have made it clear that the North-East Leicestershire prospect will be developed in an environmentally acceptable manner. That combination of policies will suit not just the coal industry but the wider interests that the Government have to bear in mind

    Gas Prices
    Mr. David Atkinsonasked the Secretary of State for Energy how domestic gas prices currently compare with those in European Economic Community member States.
    Mr. Spellerasked the Secretary of State for Energy how prices for domestic gas paid by consumers in France and Germany compare with prices in Great Britain.
    Mr. John Moore: Making adjustments for the change in exchange rates since the latest available information was given to my hon. Friend in answer to his similar question in February, prices in France and Germany are typically about 100 per cent. and 70 per cent. higher than in the United Kingdom.
    Mr. Atkinson: Does my hon. Friend's reply mean that, when taking British pay and pension levels into account, the British domestic gas consumer is now paying a more realistic price, which his European counterparts have always had to pay, and that it was grossly irresponsible of the Labour Government to force British Gas to sell at a loss?
    Mr. Moore: My hon. Friend is right in the sense that the price is more realistic, but it is only right to point out to people in the United Kingdom that the relative price change between domestic and industrial prices on the Continent still shows a far wider disparity than in Britain.
    Mr. Rowlands: As there is a very large lobby outside the House, and quite a strong lobby within it, for the export of British gas to Europe and therefore the establishment of a European price for domestic gas, are not the increases that the hon. Gentleman mentioned what the British domestic consumer could expect if such a lobby were successful?
    Mr. Moore: First, it would be better if the hon. Gentleman recognised that we are still not self-sufficient in gas. We import more than 23 per cent. of our gas from across the median line. He should also understand the nature of competition in producing new supplies. Competition always offers the consumer a better deal than monopoly pricing of supplies.

    Cross-Channel Energy Links
    Mr. Gwilym Robertsasked the Secretary of State for Energy what progress has been made in developing cross-Channel energy links; and if he will make a statement.
    Mr. Mellor: The CEGB has signed agreements with Electricité de France, approved by both Governments, to install cables of 2,000 MW capacity, which will allow electricity to be transmitted in both directions. A hydrosearch survey of the route is presently being undertaken, and it is expected that the link will be fully operational by 1985.
    Mr. Roberts: Does not the Minister accept that this news will be widely welcomed in the coal industry, where this is regarded as a method of exporting coal-generated electricity? When this project is considered, will the Minister assure the House that the Government will not shut their eyes to possible further developments of this kind between ourselves and the Continent?
    Mr. Mellor: We would not want to shut our eyes to further developments, although this was the most promising. The hon. Gentleman is right to welcome it. It will be of benefit to both France and Britain, and it means that for about a quarter of the cost of building a 2,000 MW power station in Britain, we have the advantage of being able to tap in to the French electricity system at the peak as, indeed, France can also do with British electricity when its marginal rates are high.
    Mr. Eggar: Has my hon. Friend noticed the support coming from the Opposition for a gas pipeline between England and the Continent? Will he confirm that the Government will not stand in the way of any such pipeline?
    Mr. Mellor: As I think my hon. Friend knows, the problem in Britain at present is not that we have so much gas that we need to consider exporting it, but that we do not have enough to meet home demand. Our present concern is to liberate the gas market so that proper home demand, particularly from industry, can be met.
    Mr. Douglas: When does the Minister expect the United Kingdom to be self-sufficient in gas? Will he assure the House that, unless and until we are self-sufficient, there will be no probability or possibility of exporting gas to anywhere on the Continent?
    Mr. Mellor: It is the Government's wish—as the hon. Gentleman knows, having served on the Oil and Gas (Enterprise) Bill Committee—that the liberation of the market that will take place when that measure becomes law will lead to an increased incentive to bring the gas cut of the North Sea to satisfy British demands. I again reiterate that our concern is with unsatisfied British demand, and at this stage we are not contemplating exports.
    Mr. Hannam: Does my hon. Friend accept that, while at present we are not self-sufficient in gas, there is every possibility that we could acquire from other sectors of the North Sea—for example, the Norwegians—future gas supplies that would make a cross-Channel link extremely valuable for the re-export of gas?
    Mr. Mellor: I am grateful to my hon. Friend for raising that matter. The House should know that we have told the Norwegians that we are willing to consider projects for the transmission of Norwegian gas through Britain for onward sale to the Continent.

    Coal Industry (Discussions)
    Mr. Ioan Evansasked the Secretary of State for Energy, if he will arrange a meeting with the new chairman of the National Coal Board and the new president of the National Union of Mineworkers to discuss the future of the coal industry.
    The Secretary of State for Energy (Mr. Nigel Lawson): While it would be premature to talk about the new chairman of the National Coal Board, I shall be meeting the new president of the National Union of Mineworkers later this month. Meanwhile, I am sure the whole House will join me in wishing Mr. Gormley well in his retirement, which starts today, and in paying tribute to his able and effective leadership of the NUM for the past 11 years. The coal industry and its prospects have undergone major changes while he has been president of

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    the NUM, and I am sure the whole industry and, indeed, the whole House recognise the important role he has played.
    Mr. Evans: I am sure that the House sends its good wishes to Joe Gormley and Derek Ezra. When will there be a Government statement about the appointment of the new chairman? Will the right hon. Gentleman consider calling the board and the union together to try to reach tripartite agreement for the future so that this successful, publicly owned industry can continue the level of production and productivity that it has enjoyed in the past, due to the investment of the Labour Government, which has been continued by this Government?
    Mr. Lawson: This Government have made available more substantial funds to the coal board for investment, and it is our intention that the coal industry, provided it plays its part, should be a success as, indeed, it can. An announcement about the new chairman of the NCB will be made in due course.
    Mr. Bill Walker: When my right hon. Friend meets the new president of the NUM, will he remind him of the sterling work done by Mr. Joe Gormley and point out that, if the new president looks after the interests of the mineworkers as well and stops playing politics, that will be to the benefit of both the mineworkers and the country?
    Mr. Lawson: I believe that the new president of the NUM has already received certain advice from his predecessor, upon which I do not think I could improve.
    Mr. Welsh: When the right hon. Gentleman meets the new president of the NUM, Mr. Arthur Scargill—as I have already said, he is a grand lad—will he bear in mind that he was president of the Yorkshire area for 10 years and never had a strike in that area? Will he discuss both productivity and production? It is no good having productivity if we decrease production. We are discussing both an increase in production and productivity, which in turn will mean an increase in sales. Will the right hon. Gentleman assure the new president and chairman that the Government will consider other aspects of selling coal, both in this country and outside? For example, many schools could now change from gas to coal, but they do not seem to be able to. Equally, many clubs, such as working men's clubs, could change to coal, and the coal board could sell a vast amount of coal as a result. Will the right hon. Gentleman look into that possibility?
    Mr. Lawson: The chairman of the coal board is well aware of the various different avenues for coal sales and is already exploring them actively, both in this country and overseas, where exports have risen substantially. As my hon. Friend the Under-Secretary has already said, while the possibilites in this regard have improved as a result of the improved coal-fired boiler conversion scheme in this year's Budget, nevertheless the paramount need for the industry to become competitve remains.
    Mr. Stanbrook: When the Secretary of State meets the next chairman of the coal board, will he persuade him to get rid of the board's assets in the private sector, especially those firms not engaged in mining activities that are competing unfairly with private businesses?
    Mr. Lawson: I believe that my hon. Friend recently raised this matter in an Adjournment debate, to which the Under-Secretary replied. I have nothing to add to what he said then.
    Mr. Cryer: Does the right hon. Gentleman accept that the president of the NUM does not need any advice from the Tory Governmet—the sworn opponent of the miners and, indeed, of all workers? If the Secretary of State is so anxious about maintaining a future coal mining industry, why is he so anxious to pour millions of pounds into the nuclear power industry and to go ahead with the PWR system? Why does he not abandon that, put the money into the coal industry and use our indigenous coal reserves rather than attacking the coal industry through the nuclear power industry?
    Mr. Lawson: Like their predecessors, this Government believe that our interests will be served both by a strong and competitve coal industry and an increasing share of electricity generation supplied by nuclear power, which is cheaper than any other form of power with the exception of hydro-power, which is limited. However, the hon. Gentleman's cheap jibes reflect more on him than on the matters that we are discussing.
    Mr. Eadie: Does the right hon, Gentleman not agree that it would be better for all concerned if a successor to Sir Derek Ezra were announced rapidly? Can the Secretary of State assure the Opposition that the new successor will not be a Tory Party political appointment?
    Mr. Lawson: I am grateful to the hon. Gentleman for his advice, which, of course, I shall bear in mind.

    Household Costs
    Mr. Marlowasked the Secretary of State for Energy if he will compare the percentage of household costs for a couple on retirement pension with gas as a sole means of energy (a) at the present time and (b) 10 years previously.
    Mr. John Moore: For a married couple whose only source of income is the flat rate retirement pension, the cost of enough gas for a cooker and main living room fire—280 therms—has fallen from as much as 8 per cent. of household costs in 1972 to just under 5 per cent. of household costs today.
    Mr. Marlow: Does my hon. Friend agree with me that this is very good news and not the sort of news that Labour Members are inclined to let people realise? Will he further say that the Government's policy to free the monopoly in the provision and supply of gas will probably lead to even further reductions in the real costs of pensioners in heating and looking after their houses?
    Mr. Moore: My hon. Friend is entirely right. It is new competition that produces new supply, and competition is always better for the consumer.

    Combined Heat and Power (Report)
    Mr. Rostasked the Secretary of State for Energy when he intends to respond to the Atkins committee report on combined heat and power.
    Mr. Mellor: We expect to receive this report later this month and we shall then consult widely among interested parties.
    Mr. Rost: Does my hon. Friend recognise that combined heat and power district heating can develop only if it offers heat at a competitive and attractive price to the consumer, as happens on the Continent, and that this can

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    happen only if the electricity produced by combined heat and power is sold at a fair price and bought at a fair price by the electricity industry? What criteria are the Atkins committee using in considering the cost-effectiveness of a large city scheme on the basis of the price that the nationalised monopoly will pay for the electricity?
    Mr. Mellor: I pay tribute to my hon. Friend's enthusiasm for combined heat and power and his expertise on it, which has been most useful and which will be even more useful when we receive the report. The question at issue is not whether combined heat and power district heating schemes can save energy, but whether they can do so economically. I cannot comment on these matters now, for obvious reasons. As my hon. Friend knows, we do not have the report. However, we shall study it and welcome his suggestions at the right time.
    Mr. Hooley: Is the Minister aware that, according to a reply given to me by his Department, power stations disperse the equivalent of 67 million tonnes of coal per year in waste heat? Surely this indicates that there should be a far greater sense of urgency in developing combined heat and power schemes.
    Mr. Mellor: We are following the recommendations of the Marshall report in setting up the Atkins committee. When we receive the report we shall examine it and act upon it as quickly as circumstances allow. I take the hon. Gentleman's point about electricity generation. However, he will know that it has been the policy of the electricity supply industry and of successive Governments to locate the large 2,000 mw power stations away from centres of population, for sound environmental reasons. These power stations are not the ideal accompaniment to civilised home life. The fact that the power stations do not have a district nearby to heat poses certain problems in making all our electricity generation available for district heating schemes.
    Mr. Robert Atkins: I claim no responsibility for the report. Is my hon. Friend satisfied that the lead city concept is still valid?
    Mr. Mellor: That concept is at the heart of our considerations. The Marshall report made it clear that 80 per cent. of the potential heat load from a CHP district heating scheme would be in the five major conurbations. We await with interest the report on the nine cities. We shall have to see whether the report recommends further studies.
    Mr. Stoddart: Is it not already clear that CHP will be more efficient than the present system, will save scarce fuel resources and will provide additional employment opportunities for the 3 million who are unemployed? Would it not be better if the Government were to reexamine their nuclear power programme with a view to building smaller power stations of about 200 mw in various areas, combined with heat systems? Would not that be the best route forward?
    Mr. Mellor: I am sure that the hon. Gentleman will not underestimate the good work that the Atkins committee is doing. He knows that the Select Committee on which he serves was able to visit the Atkins committee while it was at work—I do not think that he was able to go—and was left in no doubt about the good and solid work that it is doing. Without that sort of advice it would not be possible for the Government to go ahead sensibly. Everything that
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    I have said, and everything that has been said to my hon. Friend the Member for Derbyshire, South-East (Mr. Rost), indicates that within the Department there is a great deal of interest in the possibilities of CHP. The central issue is whether we can make use of existing power stations in urban areas or whether it will be of the essence of the scheme to build new small power stations economically in such areas. We cannot pass judgment on that issue until we have the report to hand.
    Mr. Rowlands: When does the Minister think that we might see the first district combined heat and power scheme in operation? Will it be this side of 1990?
    Mr. Mellor: The time scale will not be a short one. No one should underestimate the problems that are involved. First, there will be a need to re-equip power stations and, secondly, it will be necessary to establish tine infrastructure. We shall have to grapple with major issues, including the choice that will be presented to the public in certain areas, of accepting the district heating scheme or opting not to do so. These are difficulties that will have to be faced. The Marshall inquiry was dealing with the year 2000 and it calculated that we could save 5 per cent. to 10 per cent. of primary fuel consumption if the economics were right. In looking towards that time scale it is difficult to see a scheme coming into play much before the 1990s.

    Industrial Gas Prices
    Mr. Hannamasked the Secretary of State for Energy by how much he expects the price of industrial gas to increase in 1983.
    Mr. John Moore: The price of industrial gas in 1983 will be influenced by the British Gas financial target and prevailing market conditions. The November NEDC report showed clearly that the majority of industrial gas consumers in the United Kingdom enjoyed prices that were at or below those paid by their European competitors. Following the action announced in the Budget to freeze industrial gas prices for the rest of this year, I have no reason to believe that United Kingdom prices will not remain competitive in 1983.
    Mr. Hannam: May I congratulate my hon. Friend on the help that is being given to British industry through the freezing of gas prices this year? Does he accept that this will give a welcome boost to jobs as our industry will have a competitive edge over our Continental rivals' prices? Will he confirm that, apart from basic cost increases, there will be no general increase in gas prices over the next few years?
    Mr. Moore: It is difficult for me to prejudge the future. Suffice it to say that this area of activity is profitable. In such a profitable area one sees no reason for any radical change in pricing policies.
    Mr. Edwin Wainwright: Will the Minister take into account the fact that some industries have great difficulty in converting from the use of coal? Does he realise that the glass industry is finding it difficult to use oil because of the huge costs involved and would like to transfer to gas if the Government offered it a grant? Will the Government consider doing that? Instead of reducing the price of oil from $34 a barrel to $31 should we not continue to sell at $34 so that we can help industries that are present unable to use coal efficiently?
    Mr. Moore: I am sure that the hon. Gentleman will be pleased to know that his advice, and that of others, was taken into account by the Chancellor and that we have added to the oil boiler conversion scheme those who are converting from gas to coal.
    Mr. Richard Page: Will my hon. Friend either confirm or deny that the recent increase in domestic gas prices now means that British Gas will make a small profit in the domestic sector while its vast profits will come from industry?
    Mr. Moore: After this year's increases we expect to see a return to profit in the domestic sector. The profits are not excessive. We are talking about a post tax profit of £156 million, which is a 1·6 per cent. return, in the current financial year. That will come from the industrial and commercial sector.
    Mr. Campbell-Savours: Is the Minister aware that the Confederation of British Industry in the Northern region is publishing a report that proves that the majority of manufacturers are having to cut their prices to retain their markets? How does he expect those same manufacturers to manage in 1983 when it is obviously the Government's policy to increase energy charges?
    Mr. Moore: It is the height of cheek and absurdity for Labour Members to make such absurd comments. Industrial gas prices are about 24½ per cent. cheaper than they would have been if the policies of the Labour Government had been followed. This has been achieved by the Government's actions.
    Mr. Archie Hamilton: When does my hon. Friend expect private supplies of gas to be available to industry? Does he imagine that the price of this gas will be higher or lower than that which is offered by the British Gas Corporation?
    Mr. Moore: There is a happy prospect of competition in supply, and the opportunity for the consumer to receive more than one offer of gas, I hope that that will come in the not too distant future following the successful completion of the Oil and Gas (Enterprise) Bill. My hon. Friend is right to draw attention to the opportunities that competition will offer to those in industry who seek competitive supplies.
    Mr. Merlyn Rees: Whatever the supply and demand influences, is it not likely that in a pre-election year there will be no increase in energy prices under the control of the Government?
    Mr. Moore: I made it clear in the debate on this subject that these policies were introduced to the House in January 1980. That seems considerably in advance of an election.

    Wave Power
    Mr. Hooleyasked the Secretary of State for Energy when a decision will be made on the preferred system for wave power and the scale of Government funding for it.
    Mr. Mellor: When I have had the opportunity fully to study a report and the advice on the renewables programme from the advisory council on research and development for fuel and power.
    Mr. Hooley: Is the Minister aware that there is a suspicion in some quarters that the Government would like
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    to sink the wave power experiments? Is he aware that this is an enormously important renewable source of energy, especially for this country, and that there are possible world markets? Will he get a move on with his study into which system to fund and give an assurance that there will be generous funding for it?
    Mr. Mellor: I utterly repudiate the implication of the hon. Gentleman's comment that we have somehow been marking time on the matter. In cash terms, the Government are spending this year four times as much on research and development into the renewables programme as did the Labour Government. I do not know how impatient the hon. Gentleman was with the Government that he supported. After £12 million of public money has been spent on the wave programme, the advisory council is examining the whole renewables programme to see where we go from here. This is a sensible step, being undertaken by accomplished scientists and engineers. I await their advice with interest.
    Mr. Ancram: Does my hon. Friend agree that, on current costing of wave power, this is an energy option for the medium rather than the short term? If he does agree, will he consider, before taking his decision, such schemes as Salter's bobbing ducks, which are being developed in my constituency and which, for a small investment, show great potential for the medium term?
    Mr. Mellor: There is enormous admiration within my Department for the work that Dr. Salter is doing on a very accomplished piece of engineering.
    Mr. Grimond: Will the Minister confirm that while he is studying the report, experiments are still continuing? Can he give an idea when he expects that some electricity developed by wave power will be going into the grid?
    Mr. Mellor: I cannot do that in respect of wave power. It is too early to say. The right hon. Gentleman will be more aware than most hon. Members of what the Government are doing on renewables. It is in his constituency, on the Orkneys, that we have moved to demonstration by supporting to the tune of £4½ million the construction of an aero-generator to produce electricity from the wind, of which I gather, in his part of the country, there is quite a lot.

    Britoil
    Mr. Dalyellasked the Secretary of State for Energy on what basis he will assess the most advantageous time to put the shares of Britoil on the market.
    Mr. Eggarasked the Secretary of State for Energy if he will arrange, at the appropriate time, for British National Oil Corporation shares to be available for purchase by individual members of the public through the Post Office network.
    Mr. Douglasasked the Secretary of State for Energy if he will make a statement on the criteria by which he will assess the most opportune time to put the shares of Britoil on to the market.
    Mr. Lawson: Britoil will be sold to the public this year unless market conditions in the autumn are such that there is a convincing case for delaying until next year. Whenever the flotation takes place, I shall be seeking to secure a wide spread of ownership.
    Mr. Dalyell: What if market conditions do not improve?
    Mr. Lawson: That is a hypothetical question.
    Mr. Eggar: Is not the best way of obtaining wider share ownership the distribution of shares through the Post Office network, to be purchased by individual members of the public? Is it not possible for the national savings certificate system to be used in this regard?
    Mr. Lawson: I am grateful to my hon. Friend and also to my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) for putting forward some helpful suggestions. All these ways and means of getting a wider spread of share ownership than is customary are being examined carefully. There are certain practical difficulties, but we are taking the suggestions seriously.
    Mr. Douglas: Will the Minister have the issue underwritten?
    Mr. Lawson: A decision on that has not yet been taken——
    Mr. Dalyell: Answer.
    Mr. Lawson: The hon. Member for Dunfermline (Mr. Douglas) will be aware that the Government that he supported made a large offer of BP shares in 1977. That offer was underwritten.
    Mr. Merlyn Rees: Will the Secretary of State inform the House of, and discuss with it, the actual method of sale before he proceeds?
    Mr. Lawson: I am not sure that it is sensible—I cannot think of any precedent—to discuss with the House anything so technical and complicated as the precise methods of sale. If the right hon. Gentleman and his hon. Friends want to put forward any proposals, I shall be happy to consider them.
    Mr. Dalyell: On a point of order, Mr. Deputy Speaker. In view of the unsatisfactory nature of the reply I beg to give notice that I shall seek to raise the matter on the Adjournment.

    North Sea Oil and Gas (Exploration)
    Mr. Skeetasked the Secretary of State for Energy if he will estimate the effect of the fall in oil prices and the changes in the tax regime on the level of exploration for oil and gas in the North Sea.
    Mr. Lawson: I do not expect these factors to have a significant effect on the level of offshore exploration.
    Mr. Skeet: Surely the Secretary of State must bear in mind that, with spot prices down to $28 a barrel, and with the announcement that the Government expect the same yield from the North Sea, this will deter anyone looking for commercial profit from going ahead with the exploration programme that was envisaged by the Government?
    Mr. Lawson: It is true that these are uncertain times in the oil market and that this is making all oil companies review their investment plans and assumptions throughout the world. That is inevitable. However, the level of exploration in the North Sea is higher than it has been for many years and there is no sign of any slackening, despite the tax changes that were announced a little over a year ago.
    Mr. Merlyn Rees: If it is the case that there is a pullback in investment in the North Sea—and the oil companies say when they meet hon. Members that this is the fault of the tax regime—has the Secretary of State discussed this with them to disprove the point that they are making?
    Mr. Lawson: I see representatives of the oil companies both in concert and singly on many occasions, as the right hon. Gentleman will imagine. There is no doubt that the oil companies would like to see a lighter tax regime. My right hon. and learned Friend the Chancellor of the Exchequer examined the matter carefully and reviewed it in the light of all the evidence, including investment plans, and came out with a new tax system that, with regard to structure, went a long way towards meeting the points made by the oil companies. With regard to the level of taxation, there was only a slight amelioration, but there was some. My right hon. and learned Friend is satisfied that that is a tax system that is fair both to the oil companies and to the general body of taxpayers.
    Mr. Michael Morris: Is not the rate of oil exploration a long-term matter? Therefore, is it not correct that it is as much the general state of the economic situation across the Western world as the immediate tax regime that affects the oil companies' business plans for the future? To that end, is it not a fact that when my right hon. Friend successfully launches Britoil in the current financial year it will show the Western oil companies that we believe in a successful and forceful policy in the North Sea''
    Mr. Lawson: I entirely agree with my hon. Friend. He may have read the article in the Sunday Telegraph yesterday, which pointed out the considerable attractions of Britoil for the investor.

    Common Energy Policy
    Mr. Mylesasked the Secretary of State for Energy what progress was made at the last meeting of the European Energy Council in agreeing a common energy policy.
    The Minister of State, Department of Energy (Mr. Hamish Gray): The Council of Energy Ministers on 16 March renewed its commitment to reduce dependence on imported oil and to the more efficient use of energy. Commission papers on coal, nuclear power, gas and investment in the efficient use of energy were considered, but were not ready for decisions by this Council.
    Mr. Myles: Will my hon. Friend ensure that we, as the leading energy producer in Europe, lead any discussions on a common energy policy and not opt out, as would the Labour Party?
    Mr. Gray: While I recognise the necessity of working towards a common energy policy within the EEC, I should point out to my hon. Friend that priorities are not always the same for every member country. Considerable progress has been made on such things as energy pricing and conservation and the reduced dependence on oil, as well as the fusion programmes. Progress is being made, if not perhaps as quickly as my hon. Friend would wish.
    Mr. Rowlands: Will the Minister assure the House that no common energy policy will mean the loss of national control over all our energy resources?
    Mr. Gray: That would be the wish of every hon. Member and the objective of the Government.
    Mr. Rost: Will the Energy Ministers in Europe make sure that the reserves of oil are not reduced below the levels recommended by the International Energy Agency just because there happens to be a surplus and lower prices now? Would this not be a dangerous development in view of the possible strategic advantages that can accrue from the maintenance of those reserves at a reasonable level?
    Mr. Gray: My hon. Friend will be aware that the maintenance of adequate reserves need not necessarily conflict with the economic use of oil, which is the objective of the Community.
    Mr. Robert C. Brown: Can the Minister of State give us any good reason why he believes that there should be a common energy policy in Europe?
    Mr. Gray: I am sure that the majority of hon. Members would agree that there are vast areas in energy where a common energy policy is advantageous. However, I pointed out at the outset that the priorities of countries are different, and therefore, across-the-board energy policies may be much more difficult to achieve than seems likely now.
    Mr. Teddy Taylor: When the Minister says that there are vast areas in energy where a common energy policy is advantageous, could he give us just one example to help us?
    Mr. Gray: There is little doubt that, as I suggested at the outset, a common form of energy pricing would be advantageous for energy conservation. Realistic energy pricing is essential.

    Combined Heat and Power Projects
    Mr. Spearingasked the Secretary of State for Energy when he expects to announce the results of consultants' reports on projects for combined heat and power systems.
    Mr. Mellor: The results of our consultant's investigations on combined heat and power will be announced after consultation with interested parties.
    Mr. Spearing: While I thank the Minister for that reply, may I ask him whether he would agree that the results of the investigations are taking rather a long time? Does he agree that there are a number of power stations in the country that would be suitable for active experiments on a large scale with this sort of project? Cannot the hon. Gentleman hurry up the programme?
    Mr. Mellor: The Atkins committee, which was set up following Dr. Marshall's inquiry, was originally due to report in January. There has been a small slippage to April, which those who follow these matters will understand, having regard to the complexity of the issues that are involved. I assure the hon. Gentleman that we are interested in the whole idea of heat and power district heating schemes and we shall be studying the report with great interest when it arrives shortly.
    Mr. Cryer: Meanwhile, are not local power stations being closed in rapid succession? They are the very sorts of power stations that would be ideal for combined heat and energy schemes. Why do not the Government hurry
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    up the process and stop the closure of these power stations, because some people are suspicious that this is being done to create capacity to be filled with nuclear power generation?
    Mr. Mellor: If the electricity supply industry, whose decisions these are, were to fail to close small and uneconomic power stations and that led to an increase in the price of electricity, the first person to complain would be the hon. Member for Keighley (Mr. Cryer).
    Mr. Rost: Can my hon. Friend confirm that when the Oil and Gas (Enterprise) Bill becomes an Act it will provide an important stimulus to the development of combined heat and power, because the gas monopoly has restricted the use of gas to industrial CHP?
    Mr. Mellor: It is right that we have shown some concern at the apparent difficulty of combined heat and power schemes using gas getting off the ground because of supply difficulties. There is no doubt in the mind of the Government that the effect of the Oil and Gas (Enterprise) Bill will be to make more supplies of gas available to a domestic market that is currently underprovided for.
    Mr. John Evans: Will the Minister confirm that the only power stations that are being closed are the old, small, clapped-out ones that would cost an absolute fortune to modernise and put back into commission?
    Mr. Mellor: I am very grateful for the robust common sense of the hon. Member for Newton (Mr. Evans). According to the merit table that the electricity supply industry has to use, the difference in the costs of generation in a large, efficient power station compared with some of the smaller ones is so marked that we cannot allow sentimentality to intrude on what is a case of hard economics, as I think the hon. Gentleman recognises.

  HOUSE OF COMMONS

    Scottish Grand Committee
    Mr. Canavanasked the Lord President of the Council what arrangements are being made for further meetings of the Scottish Grand Committee to be held in Scotland
    The Lord President of the Council and Leader of the House of Commons (Mr. Francis Pym): Further sittings of the Scottish Grand Committee in Edinburgh will be announced as soon as possible in the light of consultations through the usual channels.
    Mr. Canavan: Is it not a fact that most of the debate in Edinburgh was taken up by Ministers and ex-Ministers? May we have an extension of the time of the sitting beyond 1 pm to allow more Back Benchers to take part in the next debate? Will the right hon. Gentleman give an assurance that the Government definitely intend to continue with the experimental sittings in Scotland, despite some reports to the contrary and the reluctance of some hon. Members who seem to prefer the fleshpots of Westminster to the invigorating atmosphere of Scotland?
    Mr. Pym: It is our intention to hold further sittings as part of the experiment. It must be done by mutual arrangement and agreement through the usual channels. The length of the sittings and whether it would be convenient to extend them beyond 1 pm should, I think,

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    be decided at the time. A number of hon. Members believe that 1 pm is the most appropriate time to conclude. I wish to make an arrangement that is convenient and suitable to the House as a whole.
    Later——
    Mr. Bill Walker: On a point of order, Mr. Speaker. On question No. 25, tabled by the hon. Member for West Stirlingshire (Mr. Canavan), there was only one supplementary question. You allowed no question from a Government supporter. This is a very serious matter in Scotland——
    Mr. Speaker: Order. It so happens that I was not in the Chair at the time. I took the Chair immediately afterwards. There is no prescriptive right to ask supplementary questions on other hon. Members' questions.

  LORD PRESIDENT OF THE COUNCIL

    Government Information
    Mr. Charles R. Morrisasked the Lord President of the Council if he will list his responsibilities for the coordination of Government information.
    Mr. Murphyasked the Lord President of the Council if he will list his responsibilities for the coordination of Government information.
    Mr. Teddy Taylorasked the Lord President of the Council if he plans any new initiatives in co-ordinating information supplied by Her Majesty's Government.
    Mr. Pym: My role is to give advice and assistance to individual Ministers, who are responsible for their own departmental information, and I keep these matters under continual review.
    Mr. Morris: Is the Leader of the House aware that my constituents, who take a close interest in politics, have difficulty in analysing the coded messages that they are told are coming through in speeches by the Minister of Agriculture, Fisheries and Food regarding Government policy and the Government's stance generally? Will the right hon. Gentleman help by providing a glossary of terms to enable people to understand the messages that the Minister of Agriculture, Fisheries and Food conveys?
    Mr. Pym: The Government as a whole and individual Ministers make their position, views, policies and programmes very clear. I do not think that the policies and programmes of any previous Government have received so much public discussion and debate as those of the present Administration. Ministers are capable of making clear what they mean, and none more so than my right hon. Friend the Minister of Agriculture, Fisheries and Food.
    Mr. Murphy: Does my right hon. Friend advise the British majority group in the European Parliament of relevant Government information?
    Mr. Pym: No. I do not think that it is part of the Government's information machine. There are a number of contacts between my right hon. Friends as Ministers and the European Parliament, but there is no direct link. It is not part of the Government's information machine.
    Mr. Taylor: Does my right hon. Friend agree that one of the most vital areas of dissemination of information is the Government's policy on the Falkland Islands issue? Will he and his colleagues consider the possibility and the advisability of Her Majesty the Queen making a broadcast to the people of the Falkland Islands?
    Mr. Pym: I doubt whether that would be appropriate. My right hon. and noble Friend Lord Carrington has broadcast to the people of the Falkland Islands in the course of the last 24 hours. I believe that is adequate. As to the general position, it is difficult for anyone to read anything in the press except comment and discussion of the Falkland Islands issue.
    Mr. Dalyell: Did the Lord President advise the Foreign Secretary and the Defence Secretary that, as soon as the first shot was fired, they would be taking on right, left and centre the entire Spanish-speaking world, including many of those who have suffered at the hands of Right-wing Governments and who still believe that the Malvinas, or Falkland Islands, belong to a South American State 400 miles away, not a European State 8,000 miles away?
    Mr. Marlow: In view of the Government's unanswerable case for committing our forces to the South Atlantic to recover our land, will my right hon. Friend suggest to the Prime Minister that a broadcast to the nation setting out the Government's position and the national imperative should be made soon?
    Mr. Pym: I shall convey that view to my right hon. Friend.
    Mr. John Silkin: In view of the information that we have had today, and in the light of the right hon. Gentleman's responsibility for the co-ordination of Government information, will he arrange for a statement on the resignation of the Foreign Secretary to be made—perhaps by the Lord President of the Council or even by the next Foreign Secretary?
    Mr. Pym: That would not be in accordance with custom or precedent, but no doubt the matter will he referred to at various moments on other occasions
    Mr. Tam Dalyell: On a point of order, Mr. Speaker. I wish to raise a point of order of which I gave you notice and which I believe affects——
    Mr. Speaker: Order. If it is about the matter of which the hon. Member for West Lothian (Mr. Dalyell) gave me notice, it is not a point of order. He made a mistake by announcing that he had told me what it concerned. I think the hon. Gentleman wishes to pursue an argument, and that is not a point of order. It cannot be a point of order which requires my ruling.
    Mr. Dalyell: On another point of order, Mr. Speaker. Those of us who pursue the courtesies of the House, as most of us do, when Ministers refuse to give way and do not press them——
    Mr. Speaker: Order. The hon. Gentleman has been here long enough to know that that is not a point of order for me.

Argentina (Trade)
3.31 pm
Sir Peter Emery(by private notice) asked the Secretary of State for Trade what advice, instructions or regulations he is giving or introducing to cover those companies or organisations which are trading or which have contracts with Argentina.
The Secretary of State for Trade (Mr. John Biffen): It was announced on 3 April that the Government had frozen all Argentinian financial assets held in this country, that ECGD would not provide new export credit cover for Argentina, and that exports of military equipment and arms to Argentina had been prohibited. Other economic measures are being urgently examined, and we are consulting our European Community and other allies. British citizens are advised not to travel to Argentina, and British companies to withdraw their non-essential British staff. British firms must decide what action they should take in relation to existing commitments in the light of the present circumstances, the measures which have so far been announced, and the terms of their own individual arrangements with Argentinian firms. They are advised not to enter into new commitments.
Meanwhile, right hon. and hon. Members will recall that the Prime Minister told the House on 3 April of the Government's intention to despatch a substantial naval task force to the Falkland Islands. I should like to take this opportunity to announce to the House that Her Majesty assented to an Order in Council enabling the Government to requisition any vessels that may be needed, under the long-standing contingency plans available to meet national emergencies of this kind. The P & O liner "Canberra", whose captain is an officer in the Royal Naval Reserve, is being transferred to naval control this afternoon. Other ships will be requisitioned and chartered as necessary.
Sir Peter Emery: I thank my right hon. Friend for his reply. May I ask him two questions? Is he suggesting that firms which have existing commercial contracts with the Argentine should continue delivery under those contracts? Secondly, what action does he consider should be taken where, obviously, the Argentine will attempt to obtain spare parts for equipment made in Britain from third or fourth countries? Will the Government look very carefully at that position, especially where military equipment is involved?
Mr. Biffen: Replying to the first of my hon. Friend's questions, no general ban currently exists on exporting to the Argentine.
As for my hon. Friend's second question, of course, there is a ban on the export of arms and supplies from this country, and undoubtedly we shall do our utmost and shall expect our allies to assist us in that prohibition.
Mr. John Fraser: Is it not the case that, apart from the obviously necessary ban on arms exports, other sanctions on or interruptions in trade are inevitable and must be proportionate to the dispute which the United Kingdom has with Argentina? Will the right hon. Gentleman describe what he thinks those further sanctions or interruptions should be?
Can the right hon. Gentleman describe to the House what compensation, protection and support will be afforded to British firms and workers who suffer loss and injury from the interruption of trade with Argentina? Can

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he say expecially that the losses on the Export Credits Guarantee Department will be borne by the Government and not be exporting firms? The trading consequences of losses ought to be borne by the Government because these matters flow from their conduct of these proceedings.
May I ask the right hon. Gentleman about the EEC and our other trading partners? Our trading arrangements with the EEC have not always been favourable in international terms. On this occasion, will he have immediate consultations with our trading partners in the EEC, and will he confirm that they will support us to the full in those trading sanctions, whether they relate to arms or other matters, which may be necessary to support and further Britain's cause in this matter? Can the right hon. Gentleman say what other trading support he will get from members of NATO and other defence pacts to which we belong?
Mr. Biffen: Perhaps I may answer the hon. Gentleman's questions in reverse order. We are in consultation with our European Community partners with a view to co-ordinating as far as possible and making economic response to the present situation.
Dealing with the hon. Gentleman's second question, it is true that any interruption of trade which derives from a conflict such as this results in losses to a very large number of companies and people. This has always been true historically, and no doubt it will be equally true on this occasion. The same convention will apply on this occasion as applied within the lifetime of previous Parliaments.
As for our taking economic action, of course, this is a matter under careful review. We shall take account of the hon. Gentleman's aspirations that it should be proportionate to the dispute.
Several Hon. Members rose——
Mr. Speaker: Order. This is an extension of Question Time, but I propose to call two hon. Members from each side of the House before moving on.
Sir Derek Walker-Smith: With regard to contracts entered into by British firms and
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companies with Argentine interests, will not the British concerns be entitled to pray in aid the doctrine of frustration, well known in commercial and international law, and would not they be well advised so to do?
Mr. Biffen: Obviously that is a factor which will be borne in mind when the Government consider the next development in economic reactions.
Mr. Russell Johnston: Given that the last full trade statistics were published in 1978, can the Secretary of State confirm that an embargo, taking total proportions of trade, would still be about 10 times more injurious to the Argentine than to us?
Mr. Biffen: I am not sure that I want to take up the hon. Gentleman's statistics, but I can tell the House that our exports account for about 3 per cent. of the Argentine markets and that we account for 3 per cent. of their exports.
Mr. Kenneth Warren: Although I welcome what my right hon. Friend said about the cessation of arms sales from this country, will he make urgent representations to the Heads of Government of France, Italy and the United States, whose ground support in Argentina not only made the invasion possible technically for the Navy and Air Force of the Argentine but would also make it possible for the Argentine to sustain a counter-attack against our own forces?
Mr. Biffen: I am certain that any helpful economic response in this dispute can best proceed if we are supported fully by our nearest allies in the European Community.
Mr. Eric Deakins: Is the Secretary of State confident that our trading relationships with other Latin American States will not be disrupted by them as a result of the continuance of this dispute?
Mr. Biffen: No one can be confident in replying to such a question, but I hope very much that the dispute can be localised and that the mutual good interests that lie between this country and other Latin American States can be sustained.

Business of the House
3.39 pm
The Lord President of the Council and Leader of the House of Commons (Mr. Francis Pym): With permission, Mr. Speaker, I should like to make a short business statement.
The business on Wednesday 7 April will now be a debate on the Falkland Islands, on a motion for the Adjournment of the House.
Mr. Michael Foot: I thank the right hon. Gentleman for his statement. It was clearly the desire of the House on Saturday that there should be a further debate at the earliest possible moment. However, in the light of the announcements made today, can the right hon. Gentleman tell the House who will be speaking for the Government in the debate?
Mr. Pym: I cannot answer that matter of detail at this moment. I assure the right hon. Gentleman that the Government's position will be put clearly and in a forthright way, as no doubt will that of the Opposition.

Northern Ireland (Political. Developments)
3.41 pm
The Secretary of State for Northern Ireland (Mr. James Prior): I will, with permission, make a statement on political developments in Northern Ireland.
The Government have today published a White Paper setting out proposals for the election of an Assembly, which would provide a framework within which a devolved Government might again be set up in Northern Ireland. These proposals are designed to meet two objectives: first, to provide at once a means for greater democratic participation by the people of Northern Ireland in their own affairs; secondly, to give them the opportunity to evolve for themselves a form of government acceptable to them.
The Government propose that there should be an election later this year to a new Northern Ireland assembly. While consideration of the arrangements for a devolved administration will be its most crucial task, the Assembly will from its first day have important scrutinising, deliberative and consultative functions. It will be able to report on a wide range of topics, and its reports will be laid before Parliament. The Assembly will establish Committees corresponding to each of the Northern Ireland Departments to monitor and report on their policies and activities.
The Assembly will from the outset be empowered to recommend arrangements under which the whole or part of the full range of legislative and executive responsibilities, which were devolved in 1973, could be exercised by the Assembly and by a devolved administration answerable to it. If the Assembly sends to the Secretary of State proposals which have the support of 70 per cent. of the total membership of the Assembly, he will be required under statute to lay those proposals before Parliament for its consideration. He would also have discretion to present to Parliament proposals which did not command 70 per cent. support but which in his view enjoyed the support of both sides of the community in Northern Ireland.
I should like to make two things clear: first, the parties in Northern Ireland will have wide discretion about the basis on which a devolved administration and Assembly might be formed and operate—Her Majesty's Government are not seeking to impose any particular system; secondly, the Government would not recommend any arrangements to Parliament unless they believed them to be acceptable to both sides of the Northern Ireland community. Stable government can come only from such acceptability. If Parliament approved the Assembly's recommendations, powers would be devolved by Order in Council.
The Assembly will have the option of moving to full devolution of powers from the outset or, if if seems easier to achieve agreement on devolving the responsibilities of only some Northern Ireland Departments, to make proposals for partial devolution.
The arrangements will be flexible in that partial devolution could lead to further or full devolution, and if the agreement on which devolution was based collapsed and could not be re-established it would be possible for the Assembly to revert to its scrutinising, consultative and deliberative functions, with the Secretary of State taking back other responsibilities.

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Direct rule has served Northern Ireland well. It was, however, introduced as a temporary arrangement. It does not provide satisfactory political structures through which a divided community in Northern Ireland can make the necessary mutual accommodations to tackle its special problems. For Northern Ireland requires new political arrangements suited to its unique character. These must reflect the history of the Province and its long experience of devolved government and must recognise and respect the differences of identity and aspiration which exist there. The proposals in the White Paper take account of those circumstances. At the same time, they are firmly based upon Northern Ireland's position as a constituent part of the United Kingdom for so long as that is the wish of the people of Northern Ireland.
The Government are convinced that good relations with the Republic of Ireland are of great importance. These relations are for the sovereign Governments and Parliaments. It is for the London and Dublin Parliaments to consider whether the governmental meetings of the Anglo-Irish Intergovernmental Council should be complemented by an Anglo-Irish body at parliamentary level in which members of an elected Assembly in Northern Ireland could take part. In addition, it would remain open to a devolved administration in Northern Ireland to make such bilateral arrangements and agreements with the Government of the Republic as it wished concerning the matters for which it is responsible.
The problems of Northern Ireland are formidable. The evil of terrorism has struck at the lives and expectations of ordinary people, Catholic and Protestant alike, for far too long. The economic decline is more acute and more intractable than elsewhere in the United Kingdom. The Government believe that the defeat of terrorism, the recovery of the economy, and the establishment of effective political institutions go together and support one another. An end to the political deadlock of recent years offers the best hope of a sustained improvement in the economy and in security.
The proposals in the White Paper are fair and flexible. Like all proposals for Northern Ireland, they involve risk and controversy. The Government in no way underestimate the magnitude of the task or the strains any proposals will have to bear. But they also offer an opportunity which, with time and patience and the continued commitment and good will of Parliament, may be exploited to the advantage and relief of all the people of Northern Ireland.
Mr. J. D. Concannon: I thank the Secretary of State for presenting the White Paper to the House today. We hope that it will put an end to rumour and lead to a constructive debate about constitutional arrangements.
Is the Secretary of State aware that we agree on the pressing need for peace and reconciliation in Northern Ireland, and that we think it right that the people of the Province should be given opportunities for broader political participation? Does he accept that we favour devolution of political power to Northern Ireland, and that we find the proposals broadly in line with what we would wish to do and build on? However, will he accept that the time is not altogether right for these proposals? Where economic and social conditions are so depressed, and
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where one in five of the workers in Northern Ireland is on the dole, it is unlikely that there will be a wide or enthusiastic response to constitutional changes.
Does the Secretary of State recall that when we were in office we took the view that political progress would be lasting only if people had safe jobs and decent social conditions? Have not the Government, in choosing to go the other way, put the cart before the horse? Does the Secretary of State accept that far more attention should be devoted to creating jobs in Northern Ireland than to righting social wrongs?
Putting those doubts aside, we support the plan for the election for an Assembly, and we hope that Northern Ireland politicians will take part in the elections. Does the Secretary of State agree that there is no better way of isolating the men of violence than by participating in legitimate forms of political activity? From what the Secretary of State said, it appears that new legislation will be necessary. Can he say when that legislation will be published? Does he realise that we shall have many questions to ask, not least about the confusion that may occur when political heads of departments are responsible to two different Assemblies? We shall look for strong safeguards to prevent abuse of executive power and to protect minorities from discrimination? Additionally, we shall want to be assured about the ultimate power of Parliament and the ability of this House to debate Northern Ireland matters, even when power has been totally devolved.
Will the Secretary of State note our disappointment about how little has been said relating to the Irish Republic? Will he confirm that the only channels through which members of the Northern Ireland Assembly may partake in the Anglo-Irish dialogue will he the parliamentary tier of the Anglo-Irish Intergovernmental Council? If that is so, will he give the House an assurance that the Government will allow time for the House to debate the merits of a parliamentary tier to that council? Further, will he look into the possibilities of allowing Northern Ireland representatives to take part in the Anglo-Irish council at other levels, pending the introduction of the parliamentary tier? We give a cautious welcome to the White Paper, and will the Secretary of State accept the Opposition's wholehearted endorsement of the theme of his statement and of the White Paper that all new structures of government in Northern Ireland must be acceptable to both sides of the community?
Such a principle must lie at the centre of our deliberations on this subject.
Finally, is it the Government's intention to have a separate debate on the White Paper? That would have a great deal of support in the House.
Mr. Prior: I am grateful for the support that the right hon. Member for Mansfield (Mr. Concannon) has given to some of the proposals in the White Paper. I recognise that any Minister seeking to embark on a course of trying to restore political stability to the people of Northern Ireland is bound to find certain areas of controversy. The more that I can win and hold the support of all hon. Members, the better it will be for the people of Northern Ireland to see that we are determined to press ahead sensibly and that we are prepared to leave to the people of Northern Ireland as much as we can.
Economic stability and prosperity go hand in hand with the political and security situations. One cannot achieve

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the one without at the same time seeking by every means possible to deal with the other two. The economic situation in Northern Ireland has deteriorated and continues to deteriorate. Regrettably, part of the reason for that is the lack of political stability in the North of Ireland as a whole.
Subject to what my right hon. Friend the Leader of the House might have to say, I would welcome a debate on the White Paper before debating the Bill, but I think that, in a matter which concerns the transfer of powers and fitting the new proposals into the context of the Northern Ireland Constitution Act 1973, it would be convenient if the House had the Bill presented to it before the White Paper debate. We would then have both in front of us even if we had, as we should, a separate debate on the White Paper.
I can confirm that it is for the Parliaments of the Republic and the United Kingdom to reach a decision about the parliamentary tier, but I hope that Members of the Assembly would be able to take part in any arrangement that is made. This ought to be a gradual process, and it is one on which all parties in the House and perhaps in the Parliament of the Republic will want to proceed with care if it is to be successful and if we are to remove the suspicions which will otherwise surround the initiative. There will also be opportunity for debates on those matters.
Mr. James Molyneaux: On the very day that the Armed Forces of the Crown are embarking on an expedition to free British subjects from foreign domination in the South Atlantic, is it not utterly shameful that a Minister of the Crown should come to the House on the pretext of improving internal government in part of the United Kingdom and launching an operation to erode the rights and privileges of British subjects within the United Kingdom, and in so doing using almost the same terminology as that employed in the statement on the Falkland Islands made by a Foreign Office Minister in the House in December 1980?
Mr. Prior: The hon. Gentleman does himself, his party and his fellow countrymen a grave disservice by such remarks. It could be interpreted that on a difficult day for the Government—we all know that it is a difficult day for the Government—we still thought that it was right in the interests of the people of Northern Ireland that we should face up to the difficulties as we are. I admire the people of Northern Ireland and I do not wish the hon. Gentleman's statement to detract from anything that happens in Northern Ireland or from all the great successes and contribution of British soldiers and the security forces in Northern Ireland.
Rev. Ian Paisley: I welcome the Secretary of State's proposal for an elected Assembly in Northern Ireland with the powers that were envisaged in the convention report, but does he not recognise that the different valuation that he proposed to put on the religious and political colour of votes in the Assembly is repugnant to democracy in Northern Ireland? Will the right hon. Gentleman explain why a 70 per cent. vote is demanded of the Unionist people who do not want power sharing of a united Ireland, but only 50 per cent. plus is demanded of those who will not even recognise the security forces
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that the right hon. Gentleman has praised but who want to destroy the position of Northern Ireland within the United Kingdom?
Will the right hon. Gentleman explain why the Assembly is not to be given its proper freedom to appoint or not to appoint people to the Council of Ireland? Surely the Assembly itself has a right to make a decision on such an important matter.
Mr. Prior: Paragraph 4 of the introduction to the White Paper states:
"The Government's proposals do not require any group in Northern Ireland to compromise its deeply held beliefs. They provide an opportunity for both sides to create a workable form of government in the interests of the common good and in the face of the urgency of the Province's problems. It will be for the people elected to a Northern Ireland Assembly to decide whether they are prepared to adopt this approach."
If it is the case, as the hon. Gentleman suggests, that the people are not prepared to move forward to a form of devolved government which involves both sides of the community, either through a 70 per cent. vote, or, as I have suggested, by something less which still has cross-community support, a devolved Government will not come into being. But there are other important matters that an Assembly in Northern Ireland could still undertake. It is in the spirit that there has to be some movement and compromise if Northern Ireland is to escape its problems that we are putting the proposals for an evolving form of devolution before the House.
Mr. J. Enoch Powell: At a time when the United Kingdom is on the brink of a conflict which may be both grave and long lasting, would it not be wise for the Government, having presented their White Paper, to allow mature time for it to be considered by the House and all those concerned in Northern Ireland before they committed themselves to the form of legislation or introduced a series of debates in the House and in Northern Ireland which might have the effect of creating division when unity is what is needed in the coming weeks?
Mr. Prior: No one will do more than Ito seek greater unity. I shall do all that I can to sustain and promote such unity. I believe that the unity of the United Kingdom is a great aim and goal to be protected and preserved at all costs.
On the question of debates, I recognise that this is an important matter for the House and the country. We should see how we get on. I do not think that we need to rush things unduly, but, at the same time, there are some who have suffered for many years. Are we to neglect their problems because of events in other parts of the world? We have a responsibility for the whole of the United Kingdom, and it is a responsibility which we shall discharge.
Mr. Julian Amery: Is my right hon. Friend aware that his proposals seem likely to be deeply divisive, not only in Northern Ireland but in the House and, I suspect, in the Conservative Party? Is he aware that they will be seen partly as implying Government support for the idea of a united Ireland and as leading inevitably to an encouragement of a revival of the devolutionist movement in Scotland and Wales?
May I join the right hon. Member for Down, South (Mr. Powell) in urging my right hon. Friend to let us debate the White Paper at leisure before there is any question of legislation being tabled so that he may take the feeling of the House before he finally commits himself?
Mr. Prior: I have already said that I believe that it would be right to have a separate debate on the White Paper. I do not believe that there is any connection between the problems of Scotland and Wales and those of Northern Ireland. Northern Ireland had a devolved Government for 50 years. Its political parties are not organised in the manner and on the basis of the political philosophies of the parties in other parts of the country. Of course, there is also the problem of the percentage of the minority who identify with a united Ireland. For all those reasons, I do not believe that there is a connection with the problems of Scotland and Wales and what we seek to do in the interests of the people of Northern Ireland is not connected with what we do for Scotland and Wales.
As for the issue being divisive, any proposal put forward in Northern Ireland is unlikely to be able to bridge the chasm between those who aspire to the nationalist cause and those who aspire to the Unionist cause and is, therefore, bound to create divisions. All that I can say to my right hon. Friend and to other right hon. and hon. Friends is that I seek no division within the Conservative Party. I will do all that I can to explain why I believe that our proposals are in the interests of all the people of Northern Ireland and in the interests of the United Kingdom as well.
Mr. Clive Soley: Will the right hon. Gentleman accept that many in the United Kingdom will expect the political parties in Northern Ireland to give his proposals careful and constructive consideration? Can he tell us whether the Assembly will be able, if it wishes, to consider the economic links between the North and the South and report on them, bearing in mind that that could be of considerable assistance to the people of Northern Ireland?
Mr. Prior: That will be a matter for the Assembly to decide. In days gone by, there were far closer economic links and discussions between Stormont and the Government of the Republic than there have been in the past 10 years. I do not wish to say anything that might make the re-creation of those links more difficult. It is best to leave the Assembly and the Government of the republic to sort out those matters themselves, but there are a number of matters on the economic side that would be helped by closer co-operation. I am certain that that is one of the points to which the Assembly will wish to turn its hand.
Several Hon. Members rose——
Mr. Speaker: Order. There is another statement to follow. I will allow questions on this subject until 4.20 pm. I hope that we shall have quick questions and answers.
Mr. James Kilfedder: I do not doubt the Secretary of State's sincerity, but does he realise that regret will be felt in Northern Ireland that he has made no promise about introducing a Bill of Rights before the establishment of an Assembly and no reference to the ending of religious apartheid, at the taxpayers' expense, in education?
Does the right hon. Gentleman understand that the Anglo-Irish Intergovernmental Council and parliamentary tier are detrimental to the interests of the people of Ulster, because we believe that the Foreign Office is involved in selling out the people of Northern Ireland?
Mr. Prior: I am sorry that we have not so far found time to include provisions on human rights in legislation. It is a complicated issue. We have done a great deal already, but more remains to be done. I take seriously what the hon. Gentleman said about education, because that is of very great importance.
I hope that the hon. Gentleman will not pursue his comments about the Foreign Office. Northern Ireland is a part of the United Kingdom and remains a part of the United Kingdom. The consent of the people would be required for any change in that arrangement, and that consent is not forthcoming. I hope that over a period of years the Government and I will be able to show to all the people of Northern Ireland the great benefits of remaining part of the United Kingdom.
Mr. Gerard Fitt: I accept the Secretary of State's dedication, but is it not a fact that three important elements on the island of Ireland—the Official Unionist Party, the SDLP, which is the party of the minority, and the Taoiseach and Government of the Republic—have expressed not only reservations, but total opposition to the proposals in the White Paper? If they maintain that attitude and the parties seek a mandate from their electors on their opposing ideologies, will not tha mean that the executive will have no hope?
Everyone of good will wishes the Secretary of State well in his endeavours to re-create parliamentary structures in Northern Ireland, but does he agree that if the ground is not well planned in advance and there is another failure it will be a total disaster for Northern Ireland into the foreseeable future?
Mr. Prior: Carrying on as we are is not a policy which carries no risks. That is one of the factors which I had to weigh up. I have also had to bear in mind that there is considerable resistance to the proposals that I am putting forward, but in Northern Ireland—as in some other parts of the world—it is easier to be against something, because that means that people do not have to go further in explaining their point of view.
I hope that the hon. Gentleman will use his considerable influence—it is a considerable influence and one which is greatly admired in the House—to do what he can to help the House bridge the gap that is so detrimental to all the people of Northern Ireland, but, perhaps above all, 10 those who have suffered most—the ordinary, decent, working class people.
Mr. Russell Johnston: Is the Secretary of State aware that Liberals welcome his initiative and congratulate him on the patience, determination and speed with which he has produced the proposals? Few politicians are less divisive than the Secretary of State. Is he aware that we greatly welcome the fact that he recognises that the Assembly must be representative and that, if it is to be representative and, therefore, effective, it must be elected by proportional representation?
Mr. Prior: The Assembly would be elected by proportional representation, on the same basis as the previous Assembly was elected. I point out again that we will leave it to the Assembly to put forward proposals about devolved government. I think that it will take some time to get to that stage, but unless we have a political forum where the cut and thrust of debate and the influence

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of one person's views on another person are able to operate there is no way that the problem that has dogged Northern Ireland for so long can be solved.
Sir John Biggs-Davison: Will my right hon. Friend try to understand the strong feelings of those who want Northern Ireland to be bound closer to Britain and not put into quarantine with fancy remedies that would perpetuate the sectarian differences of which he has spoken and would tend to undermine the Union? Has my right hon. Friend studied the latest poll, which shows that 88 per cent. of Protestants and 45 per cent. of Roman Catholics would find integration acceptable?
Mr. Prior: I have studied public opinion polls as closely as every other politician studies them, for one reason or another. I am not arguing with the figures that my hon. Friend has produced. However, in the same poll there are other figures which show that 60 per cent. of Catholics said that full integration with the Republic was acceptable to them and that 60 per cent. of Catholics wished to remain within the United Kingdom with a power-sharing Assembly. I do not think that we should place too much emphasis on the results of that public opinion poll.
I recognise the strong feelings that exist. I am doing nothing which puts the future of Northern Ireland into quarantine. I believe that our proposals are the most likely way to tie Northern Ireland into the United Kingdom. It is the duty of the House to seek to do that.
Mr. Harold McCusker: In the opening sentences of the White Paper, and in his statement this afternoon, the Secretary of State has emphasised the importance of defeating terrorism. In view of the slaughter which has been perpetrated by the IRA over the past eight days, and the likelihood that it will be able to repeat that performance in the autumn, is not the Secretary of State aware that it is the terrorists rather than the political parties in Northern Ireland who are likely to render his efforts meaningless? Whether they like it or not, the Members of the new Assembly will be held responsible by their electorate for security in the Province. What plans, if any, does the Secretary of State have for giving them some say in the overall security policy?
Mr. Prior: I believe strongly that there will be no total isolation of terrorism until all the parties and all the people of Northern Ireland can strongly and openly support the forces of law and order. That situation is still some way off, but it would be my wish that from the early days of the Assembly it might be possible for closer liaison on security to be developed between the Assembly and the Secretary of State. Although for the time being security and matters of law and order will remain with the House and with the Secretary of State, those are matters which could be transferred when it was thought that the moment was right to do so.
As for security generally, undoubtedly any move towards a devolved Assembly is perhaps too great an opportunity for the IRA to miss, because, if we are successful, that is the way that terrorism will be defeated. We should all remember that in what may be some difficult months ahead.
Mr. Peter Robinson: Does the Secretary of State recall that in a previous White Paper the
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Government stated plainly that they recognised that there were equally acceptable and satisfactory alternatives to power sharing? Does the Secretary of State still stand by that view, or is he saying, through these weighted majorities, that the views of the people of Northern Ireland are of little account and that whatever kind of devolution they may have it will be power-sharing devolution?
Mr. Prior: No. As far as possible, I am leaving it to the members of the Assembly to put forward their own views on how a transfer of power should take place. I must make it abundantly clear, since the aim is to create political stability, that political stability will not come unless there is a wide measure of cross-community support. That does not have to be achieved by a power-sharing executive. There are other means by which it can be achieved. It does not alter the fact that unless it has that cross-community support it cannot be stable and cannot work.
Mr. Neville Sandelson: Is the Secretary of State aware that my right hon. and hon. Friends give a broad welcome to the White Paper, albeit with guarded optimism? We shall look forward to a full debate on these matters after Easter. Questions arise concerning the mechanics of the way in which the Assembly will operate in practice. We shall seek to deal with some of them in the debate.
Does the Secretary of State agree that, whatever the reluctance of some political leaders and their parties in Northern Ireland to support these proposals, the majority of people there support moves towards filling the vacuum in an evolving devolution, and, indeed, would accept actual power sharing? The proposed Assembly——
Mr. Speaker: Order. I said that questions on this statement would end at 4.20 pm. The hon. Gentleman has asked enough.
Mr. Prior: I am grateful for the support of the hon. Gentleman and his colleagues. There is some momentum now which could enable the parties in Northern Ireland to come together in an Assembly. I think that, it will require a great deal of patience and understanding to get further than that, but the economic pressures alone now demand that we at least try to get some political stability.
Sir Philip Goodhart: When will the Secretary of State hold a referendum in Northern Ireland on his devolution plans? Does he recall that he voted in favour of the key referendum amendment on the Scottish devolution Bill? If it was right to consult the voters of Scotland and Wales directly on devolution schemes, why is it wrong to give the voters of Northern Ireland the same opportunity?
Mr. Prior: I know my hon. Friend's strongly held views on this subject; I have discussed them with him. I believe that the Northern Ireland situation is unique, as I think most hon. Members recognise. It would be easy for the parties to evade the issues, and I think that the result of any referendum could be negatived. If it was to have any impact at all, it would have to have an 83 per cent. majority before it could be seen to have a majority of both parts of the community. That would make matters very difficult.
Mr. Kevin McNamara: Is the Secretary of State aware that he should be congratulated on his proposals this afternoon, particularly

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in view of what has been happening behind him and is happening behind the Chair at the present time? The Government have kept their promise by bringing the White Paper before us in these difficult times, for which they should be commended. Is the right hon. Gentleman also aware that a power-sharing executive was last brought down by para-militaries on both sides—those who supported the Ulster Workers Council and those who supported the Provisional IRA? There is a lesson there for the democratic parties to ensure that their voices are heard.
Finally, can the right hon. Gentleman say to what extent there will be a degree of economic initiative lying within the power of the new Assembly?
Mr. Prior: On the last point, I have nothing to add to what I have already said. However, I would certainly wish to explain to the country, and perhaps to other countries, particularly America, the initiative that the Government are taking, and therefore the need for inward investment in Northern Ireland from America. I emphasise that I wish to see inward investment coming to Northern Ireland.
I believe that we are right, in the interests of Northern Ireland, to bring forward these proposals at the earliest possible moment. I do not think that anything that we say which would be helpful to get American investment in Northern Ireland should be interpreted in the way that the hon. Gentleman sometimes seeks to do.
Mr. Tom Arnold: Will my right hon. Friend re-emphasise that devolved institutions, supported by a majority of the people of Northern Ireland, can serve to strengthen and not weaken the Union?
Mr. Prior: I am grateful to my hon. Friend for that question, and I believe passionately that that is the case.
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Otherwise, there will be continual erosion in Northern Ireland of Northern Ireland's position within the United Kingdom. With a little wisdom, we could put that behind us for ever.
Mr. A. E. P. Duffy: Why is the Secretary of State so nervous of the parliamentary tier? Was it not agreed at the Heads of State meeting? Who has warned him off?
Mr. Prior: It is a question not of being nervous but of being frank with those who place a great deal of emphasis on the parliamentary tier. My experience of the House suggests that right hon. and hon. Members would be reluctant to give any of their sovereignty to that tier I have had to tell members of the SDLP and the minority community of the difficulties involved in that suggestion. That should be a matter for the House and the Dail to decide.
Dr. Brian Mawhinney: Does my hon. Friend accept that many of us—and I speak as a colleague and an Ulsterman—will welcome the proposals? Is lie not surprised at the unhappiness expressed when devolution is simply on offer and not imposed on the people of Northern Ireland? Does he agree that the divisions in the Province are likely to be made worse unless a move is made to bring the two communities together?
Mr. Prior: I am grateful to my hon. Friend for the help and advice that he has given over many months in trying to move forward a step at a time. I hope that some of the resistance from my our own side of the House will be mitigated by the fact that we are moving forward only as and when the people of Northern Ireland are prepared and willing to do so.

Council of Agriculture Ministers. (Meeting)
4.21 pm
The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): With permission, Mr. Speaker, I should like to make a statement on the Council of Agriculture Ministers' meeting in Brussels on 31 March and 1 and 2 April.
The Commission made a compromise proposal on the 1982 price package. After a long and detailed discussion, no agreement was reached. Following pressure from the United Kingdom, I was glad to see included in the package the virtual restoration of the butter subsidy and an improved provision for school milk. There were demands by many member States for higher price increases than those proposed. The United Kingdom opposed further price increases, though Germany and the Netherlands supported us on a number of commodities. We gathered good support for our fierce opposition to the co-responsibility levy on milk with lower rates for small producers, and for our view that we should have freedom as to whether and when there should be any revaluation of the green pound. It was recognised that further consideration was required, and the Council will resume its deliberations in Luxembourg on 20 to 22 April.
In order to allow the Danish Government to continue its policy of having no MCAs, a devaluation of the Danish green krone of 1·8 percentage points was agreed, subject in some cases to reference to capitals.
The current marketing years for milk, beef, sheepmeat and dried fodder were extended until 26 April.
Mr. Norman Buchan: I am grateful to the Minister for the statement, which is less precise than that which we read on page 3 of The Observer yesterday. We have heard the Minister and we regret his failure to come to grips with the need to press for a fundamental reform of the CAP.
In view of the business of the House and, above all, the gravity of the international situation, I shall not press further questions on the Government, so long as we have an undertaking that no final decisions will be agreed before the House has had an opportunity to debate the details. I have given the Minister short warning of my attitude, but we would welcome a rethink. If the Minister gives us an assurance close to that which we require, that would be the best way to deal with the matter.
Mr. Walker: I am grateful to the hon. Gentleman for his observations. I understand the spirit behind his suggestion. The debate on the price fixing took place only a week ago. I shall continue negotiations on 21 April, so I cannot guarantee that there will be further debate or that there will not be a conclusion on 20 to 22 April. The hon. Gentleman will understand that. He will also understand that nobody has been more forthcoming than I in coming to the House after a meeting in Brussels. I have never missed coming to the House and whenever the Opposition have required a statement, I have made one. I do not know whether there will be agreement on 20 to 22 April. That depends upon agreement on the budget, which depends upon a meeting of Foreign Ministers to agree the budget. If we cannot reach agreement on the CAP, I shall make
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a statement in the usual way. Alas, I cannot for obvious reasons, give the assurance for which the hon. Gentleman asks.
Mr. Buchan: Does the right hon. Gentleman accept that the timetable of the House has fluctuated—Saturday, for example—that it will fluctuate again and that, therefore we might have the opportunity for discussion earlier than has been envisaged? I must press one or two questions. Has the right hon. Gentleman been pushing the mandate on the principle of closing the gap between the EEC and world grain prices? Has that been abandoned? Is the right hon. Gentleman aware of the leaks that suggest that that gap is at a level of between 10 per cent. and 11 per cent.? What will that mean in terms of the support budget? The suggested figure is 16 per cent. but perhaps a more realistic level is 20 per cent. What will the new proposal of between 10 per cent and 11 per cent. mean?
How do the proposals square with proposals in the Tory manifesto that radical changes are necessary in the CAP and that we—and that means them—should insist on a freeze on products in structural surplus? How does that square with the statement in the middle of February that the United Kingdom urgently needed prudent price increases for products in surplus? Since then prices have been increasing.
Does the Minister agree with the House of Lords Select Committee that the proposals would add £70 million to the United Kingdom budget contribution? How much more will the increase leaked this weekend add to that £70 million? Does the right hon. Gentleman agree that the CAP is incapable of being reformed, that it has failed both the farmer and the consumer and that the best solution is for us to withdraw from the CAP and to develop a policy that will fulfil the needs of the producer and the consumer in this country?
Mr. Walker: The hon. Gentleman was a Minister in a Government under which the cost of CAP went up by 350 per cent., whereas under this Government it has gone up by only 30 per cent. In those circumstances, I do not accept the hon. Gentleman's criticism. The proportion of the European budget taken up by CAP has substantially reduced, whereas the proportion of CAP expenditure applied to British benefit doubled during this Government's lifetime. Therefore considerable progress has been made.
the detail of the compromise suggestion by the Commission on the price proposals was accompanied not by detailed costing but by the detailed assurance that it would still be within the budgetary limits and below the increase in own resources. We are seeking from the Commission detailed estimates of its proposals.
The hon. Gentleman raised the question of prices and their effect on consumers and statements on page 3 of The Observer and elsewhere. The Commission has moved to a proposal which averages 10·3 per cent. The effect on prices in the United Kingdom will be an increase—if all the price increases take place—of 1·2 per cent. in a full year. When one considers that in the lifetime of the last Labour Government food prices went up by 16·4 per cent. in a year, on average, that is not excessive.
We are interested to assess the cost of the proposals made by the Opposition last week. The hon. Gentleman suggested that there should be deficiency payments fixed between the current European price and the world price.

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That would cost £1,000 million a year to the Exchequer and reduce farm incomes by 80 per cent. It would be catastrophic for employment and would cause unemployment in agricultural machinery, the tractor industry and farming, to the detriment of the nation.
Mr. John Carlisle: I appreciate the Herculean efforts of my right hon. Friend and his colleagues in Brussels to keep these prices as low as possible, but how optimistic is he that a settlement will be reached between 20 and 22 April? Does he realise that the longer this goes on, the greater the detriment it will have on trade and those trying to trade commodities? If, at the end of the day, he must agree to a higher price increase than he would wish, what would his thoughts be on a revaluation?
Mr. Walker: Obviously to settle a price fixing as near the marketing year date as possible, is an advantage for all the farming community. However, before we make any settlement, it is vital that we recognise the nature of Britain's budgetary contribution. That is why we have always made it clear that the agreement for Britain's future budgetary payments should be connected with and parallel to the price fixing.
Mr. Robert Maclellan:: Why is the Minister so opaque about the Government's intentions on the revaluation of the green pound? He must be aware of the farmers' concern about this matter. His statement merely outlined the Government's procedural opposition to that matter being considered by the Council. As a matter of law—not of the Minister's opinion—is this not a matter for the British Government to decide?
Mr. Walker: Yes, Sir. Our view has always been that any member country must be free to move its green pound whenever it wishes and at its own instigation. That has always been our view and that is why I repeated it in the statement. During the debate a week ago, I made it clear that, as far as I was concerned, there would be no revaluation of the green pound.
Mr. Richard Body: Is my right hon. Friend aware that most, if not all, hon. Members are grateful to him for continuing his practice of reporting back to the House, even when he sometimes comes empty-handed from Brussels? Does he agree that we now have a wonderful opportunity, which may never be repeated, to effect curbs on the way that the EEC dumps surplus grain, dairy products and sugar on the world market in a way that causes great hardship? Will he assure us that he will make the utmost use of that opportunity, which may not be repeated at this time next year?
Mr. Walker: Yes, Sir. The United Kingdom Government have always reported the facts on European trading policy, and we shall continue to do so. The present situation and uncertainty of world conditions on grain, for example, show how much better it is for Western Europe to have a surplus than a deficit.
Mr. Nigel Spearing: The Minister mentioned that there had been some support for the United Kingdom stand on the so-called "co-responsibility levy". Does he agree that trying to have a common market in milk over the whole of the EEC is not in accordance with the marketing facts? As he had some encouragement in this
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matter, would it not be more sensible to make separate arrangements where surpluses arise? Is that what the Council of Ministers is going towards?
Mr. Walker: No, Sir. The Commission's proposal to have a super levy, based on the real production of individual countries, is fully supported by the United Kingdom. That is a sane and sensible way of trying to curtail milk production.
Several Hon. Members rose——
Mr. Speaker: Order. I propose to call those hon. Members who have been rising. I hope that they will cooperate.
Mrs. Elaine Kellett-Bowman: I welcome my right hon. Friend's assurance that there will be no lower co-responsibility levy for small farmers, but will he assure us that large farmers, producing more than a certain gallonage or hectarage, will not be penalised?
Mr. Walker: Yes, I give that assurance. In no way would I accept such a proposal.
Mr. Teddy Taylor: First, if the Commission's proposals are accepted, will surpluses next year be larger or smaller? Secondly, was any move taken to curb the record exports of subsidised food to Russia? Thirdly, what is the point of having a price rise for sugar, for example, when the Common Market already produces about 70 per cent. more than it needs?
Mr. Walker: When one talks of price rises, one must consider their impact in real terms as opposed to purely money terms. There are many jobs in the United Kingdom sugar-producing industry. That industry is of considerable importance to Britain. It would be absurd to cause damage to it by not being realistic about the increase in input costs.
Whether surpluses will be greater or smaller obviously depends on many factors. Overall, even at present price levels—many of which we oppose on particular commodities—farm incomes in Europe will have dropped substantially over the past three years. That does not mean that a high price was the reason for surplus production. For example, on dairy production, I assure my hon. Friend that the curtailing of price over a long period has resulted in many small producers of milk endeavouring to improve their yields by having extra cows and thereby increasing production. Therefore, there is not a straight price production ratio.
Mr. Tony Marlow: I congratulate my right hon. Friend on fighting a magnificent battle for the British and European consumer when confronted by the whole of the European farming industry. Bearing in mind that my hon. Friend the Member for Devon, West (Mr. Mills) considered that a 9 per cent. increase was about right, that nurses were offered 6·4 per cent. and that some people in work have had no increases this year, does my right hon. Friend agree that if certain European countries believe that they need a higher price increase to suit their farmers because of their domestic circumstances, there should be an increasing divergence between our agricultural policies and those of other countries and that our increase should be restricted to a maximum of 9 per cent.?
Mr. Walker: First, one cannot start referring to 9 per cent. as if it applied to all commodities and that the proposal was for each to go up by 9 per cent. There is a

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great divergency of price increases. Secondly, it is wrong for anyone to equate farm price increases with wage increases for any sector. The two are totally disconnected. One is an increase, the largest part of which goes to meet increased wages and costs. It is not an increase in farmers' incomes of 10 per cent. It is absurd to say that the nurses or the civil servants have been offered this or that and that farmers should get the same. Farmers must meet a whole range of additional costs out of that increase. The two are not connected. If farm incomes over the past three years had been connected with wages or salaries, including those of the nurses, farm prices would be much higher than they are today.
Mr. David Myles: If there cannot be agreement before the beginning of the livestock year—one has heard that it will be postponed until 26 April—will my right hon. Friend ensure that producers who must market this livestock within that period will not suffer a disadvantage?
Mr. Walker: No, Sir. I cannot give that assurance. The normal custom in the Community has been not to back-date marketing years when agreement has been reached late. Therefore, I cannot give that assurance.
Mr. John MacKay: Remembering the years when, under the Labour Government the MCAs were greatly to the disadvantage of the British farmer, will my right hon. Friend resist any pressure to devalue the green pound? Does he realise that the British agriculture industry is 100 per cent. behind him in that determination for consumers?
Mr. Walker: Yes. That applies not only to the British agriculture industry. I have no doubt that the detriment to British agriculture and, therefore, to all the industries connected with it from having a negative MCA policy was disastrous in those years. Since we have had positive MCAs, we have massively increased the proportion of the United Kingdom market supplied by British farmers. That is an indication that the reverse policy is proving to be correct.
Mr. Buchan: I would not have intervened again, but comments have been made that make it necessary for me to do so. The nonsensical costing of a deficiency payment, on the estimates that I put before the House 10 days ago, in the first half, tallied closely with the figures that I gave. I said £900 million, and it came to £1,000 million. To accompany that with a reduction of 80 per cent. in farm income is a spurious and totally irrelevant figure plucked out of the air.
Is it not also the case that to attach that to a comment on the consequential forward investment in
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machinery—when this is precisely what has happened in British farming over the past few years as a result of Common Market policy—is almost like trying to rebuke Satan in defence of the CAP sin? That position certainly increased under our old structures. Does the Minister agree that if it was possible for us to operate a deficiency payments structure when we operated our own agricultural policy before we entered the Common Market, it is equally possible for us to operate it after we leave the Community? That seems to be manifest. Does the Minister agree?
The right hon. Gentleman blames me for the price increase under the Labour Government. I remind him, first, that that price increase took place during a transitional period when prices had been considerably jacked up year by year. Secondly, I remind him that I resigned from that Government because their policy was too close to his policy for my liking.
Mr. Walker: I do not blame the hon. Gentleman for resigning from that Government. I commend him for doing so. With regard to the costing, I repeat that when one looks carefully at the wording of the hon. Gentleman's statement in Hansard, it seems that, if he was implying that he would fix the prices for British farming at the average between the current world price and the current Community price——
Mr. Buchan: I did not day that.
Mr. Walker: I was saying that that was implied. Therefore, I look forward to hearing the hon. Gentleman say at what level the price would be fixed. If he fixed it at the present price in order to maintain present farm price levels—therefore, not to reduce farm incomes—the cost would be much more that £1 billion. It would be a tremendous amount more than that. Therefore, the hon. Gentleman's figures would be wrong.
Another factor that the hon. Gentleman will remember is that food prices more than doubled under the previous Labour Government. At the end of the Labour Government's period of office, the Minister responsible for agriculture announced that only a small proportion of that was due to CAP farm prices increases.

BILL PRESENTED
  MERCHANT SHIPPING (LINER CONFERENCE)
  Mr. Secretary Biffen, supported by Mr. Humphrey Atkins, Mr. Secretary Howell, Mr. Secretary Tebbit and Mr. lain Sproat presented a Bill to provide for the implementation in the United Kingdom of the Convention on a Code of Conduct for Liner Conferences signed at Geneva on 6 April 1974; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 102.]
Orders of the Day
  Local Government Finance (No. 2) Bill
  As amended (in the Standing Committee), considered.
  Local Government Finance (No. 2) Bill
    New Clause 1

      WATER AUTHORITIES AND NATIONAL WATER COUNCIL
      'Schedule 3 to the Water Act 1973 shall have effect with the substitution for paragraphs 38 and 39 of that Schedule (accounts and audit of water authorities and National Water Council) of the paragraphs set out in Schedule (New paragraphs for Schedule 3 to the Water Act 1973) to this Act. '.—[Mr. Giles Shaw.]
      Brought up, and read the First time
      4.44 pm
      The Under-Secretary of State for the Environment (Mr. Giles Shaw): I beg to move, That the new clause be read a Second time.
      Mr. Speaker: With this it will be convenient to take amendments Nos. 19, 20, 21, amendment (a), to amendment 21, and amendments Nos. 23, 24 and 25.
      Mr. Shaw: The Bill has been fully considered in Committee. Hon. Members who served on that Committee will recognise that one of the matters that caused substantial concern was the position of water authorities under the Bill, particularly public rights of access to water authorities' accounts. During the Committee stage I tried to place an amendment before the Committee for discussion, but I was unable to do that. However, we have now tabled an amendment in the shape of new clause 1, which seeks to meet the points that were brought to the attention of the Committee.
      We received numerous representations about the auditing of water authorities, but nearly all made one point—that it is wrong to deny the public access to the books of water authorities when they already have those rights. That is largely because of the system under which water authorities have been audited to date. That system is similar—and identical in most respects—to that applied to local authorities. Under the Bill the audit commission will be the vehicle by which local authorities will be audited, whereas the Secretary of State will appoint auditors, thus bringing them closer to the position of nationalised undertakings.
      It was apparent from that move that the traditional rights enjoyed by ratepayers and electors in being able to make representations to auditors would be lost during the passage of the Bill unless it was amended. Therefore, right hon. and hon. Members may be surprised that such a short and comparatively simple new clause, which refers to new paragraphs for schedule 3 to the Water Act 1973 should have taken four pages to achieve. I hasten to assure the House that there is nothing sinister about that. There is no surreptitious attempt to smuggle in new provisions. Tinkering with schedule 2 in order to introduce our amendments on public rights would have led to an unwieldy set of provisions and would have involved extra cross-referencing. Therefore, we considered it better to replace schedule 2 with a new schedule to include the full set of accounting and auditing arrangements for water authorities. That is the purpose of the new schedule.
      Most of what the new schedule contains is already in existing legislation or in schedule 2 to the Bill. The only
      710
      changes of substance relate to the public inspection of accounts and rights to make representations, which are found in paragraph 39C. Paragraph 39A refers to the provisions about general duties of auditors.
      In Committee I endeavoured to meet hon. Members by committing the Government to bring forward these amendments. By the amendments, a local government elector is given rights to inspect and copy the accounts, books and deeds relating to the accounts of a water authority, which are the rights that he presently enjoys under section 159 of the Local Government Act 1972. Under 39C(2) he is given the right to question the auditor. The right to challenge an item in the accounts is modelled on the existing provision, although it differs from it in one or two respects. The existing right to make objections is closely tied to the possibility that there has been illegality or wilful misconduct in the incurring of expenditure. There are provisions for the district auditor to follow up any such cases. That is an essential part of his duties under local government legislation.
      Therefore, in future the water authority auditor will have two general duties, which are spelt out in paragraph 39A. The first is to ensure that there are proper accounting practices and that any ministerial requirements have been observed in the compilation of the accounts. The second general duty is for the auditor to consider whether he should make a report in the public interest on anything coming to his notice in carrying out the audit. Those duties are connected with existing duties under local government legislation. A useful means of conferring a right of challenge upon the public is also provided. Under paragraph 39C(2) the public will be given the right to draw the auditor's attention to any matter on which he might make a report in the public interest.
      That is a full and adequate set of rights that preserves the public's present position in relation to the audit of water authorities. It extends those rights somewhat in that it extends them to the full range of water authorities, not just those which, historically, have been audited by the district auditor process. However, the public rights will not extend to the accounts of the National Water Council. They are inappropriate for such a national body. There has never been any objection to the accounts of the National Water Council.
      The remaining amendments in the group—amendments Nos. 19, 20, 21(a), 23, 24 and 25—are consequential. They do not call for comment from me. I commend new clause 1 and those amendments to the House.
      Mr. Ted Graham: We shall be pleased to support the new clause because it is in accordance with an undertaking that the Minister gave after a long debate in Committee—one of the longest debates on one issue. The Minister said that it might appear that a short amendment would be required, but as there are many dovetailing procedures amendment No. 21 has had to be long. It is right that the House should be reminded that the Government substantially changed their attitude to this matter during a four or five hour debate. That was due largely to pressure from both sides of the Committee. That needs to be put on the record.
      The House should be aware that the Government's original view was set out during the debate in Committee on 2 March, when the Minister said:
      "It is our view, which is why the Bill is so drafted, that there is a sufficiently strong case for saying that, in the vital services with which the water authorities provide the consumer; in their

      711
      structure and regional organisation; in the way in which Government have used the mechanisms of MMC and other ministerial intervention and the way in which Ministers are perhaps more directly responsible in Parliament to what water authorities do than is the case with individual local authorities, it seemed sensible to us that the regional water authority, in auditing terms, should be treated more as a nationalised undertaking than as a local authority."
      That was the point at which the Government, quite fairly, defended the existing provisions in Committee. However, the Minister said:
      "I take the point absolutely that in the Bill as drafted, and without amendment No. 143"—
      that amendment added water authorities to the other list and was tabled by my hon. Friend the Member for Blaydon (Mr. McWilliam)—
      "individual ratepayers would lose their right of access to water authorities' accounts."
      I want the Minister to make it absolutely clear that exactly the same rights as now exist will be preserved in the changes. The Minister also said:
      "We shall introduce an amendment to the Bill at the appropriate stage which, subject to consultation, we foresee as providing for existing rights to continue so that consumers will have access to water authority accounts and will be able to question the auditor in the manner sought by the hon. Member for Edmonton and my hon. Friend the Member for Reading, North."—[Official Report, Standing Committee D, 2 March 1982; c. 515–519.]
      I have received reports from The National Farmers Union, as no doubt, have other members of the Committee. It is not cavilling at the intention of the new clause but draws attention to one or two points. In a letter to me the NTU states:
      "At present under the Water Act 1973 water authority audits are regulated by Part VIII of the Local Government Act 1972. By virtue of section 159 of that Act, where the audit is conducted by a district auditor a local government elector may attend before the auditor and make objections"
      That is the first point. It must be made clear that the right to make objections to the accounts is preserved. The letter continues:
      "an elector may also question the auditor about the accounts, and where the audit is conducted by an approved auditor may request the Secretary of State to direct a district auditor to hold an extraordinary audit"
      I want the Minister to confirm that all those existing rights are preserved. The letter adds:
      "The elector seems to be losing a right of objection, and a right to request the direction of an extraordinary audit."
      The Opposition will raise no objection to the new clause if the Minister can assure us that the provisions of the Water Act 1973, and in particular section 159 of the Local Government Act 1972, are contained and preserved in their entirety. In fact, we shall congratulate the Government on their change in attitude.
      Mr. Tony Durant: I welcome the new clause. I strongly pushed for this change to be made in Committee. I place on record my appreciation of the Reading ratepayers who initiated this move, involving myself as the local Member of Parliament. They ran a successful campaign, contacting about 60 Members of Parliament who had an interest in the subject. They deserve credit for their efforts. I know that they are pleased with the new clause.
      The Government are right to leave out the National Water Council. I take a jaundiced view of the water council. I hope that it will be included in the consideration of water authorities now in hand following the recent
      712
      Green Paper on the future of the water authorities. I am not convinced that the water council does as good a job as it should. In anticipation of the possibility of the water council being abolished, I am not worried about its exclusion from the new clause. It is right that the powers should be extended beyond two water authorities and that the new powers will now cover all water authorities. That is to be widely welcomed.
      A promise was given in Committee to table an amendment dealing with the powers and duties of rating authorities to reduce a rate, make refunds to ratepayers, recover sums paid to precepting authorities and to deal with the resultant costs to rating authorities. An amendment has not been tabled. I hope the Government have not changed their mind. My own county council is in some difficulty because no one is in charge at the moment. It would help the county council if such an amendment became law. Some London boroughs would welcome the opportunity to reduce their rate during the year. The Minister will remember that I withdrew an amendment on the understanding that the Government would table an amendment to deal with this matter of a rate reduction or rate refund during a year. I realise that there are legal problems but I urge my hon. Friend to tell us that the matter has not been forgotten.
      Mr. David Madel: I believe that my hon. Friend is referring to the cause celebre in Bedfordshire. We had the problem of a supplementary precept before the beginning of the financial year. I agree with my hon. Friend and I hope the Government will make it clear, absolutely clear that a supplementary rate precept, although started in the previous financial year, is void for the financial year beginning 1 April 1982.
      Mr. Durant: My hon. Friend is right. We debated Bedfordshire at great length in Committee. I was avoiding the use of the word "Bedfordshire" for fear of starting an exchange. I am grateful that my hon. Friend has reminded me of the case although it was in my mind. However, I consciously decided not to mention Bedfordshire on this occasion.
      I urge the Minister to tell the House that this matter is not forgotten and that in the other place an amendment will be tabled that will give relief to those authorities that are in difficulty.
      I welcome the new clause and pay tribute to the Reading ratepayers for their initiative. It meets the points raised and I am delighted that it goes further than existing legislation. I support the new clause and schedule.
      Mr. Robin Squire: I refer to amendment (a) to Government amendment No. 21. This concerns a small but important aspect of the amendments tabled by the Government—the nature of those who are enabled to audit the water authorities. I speak on behalf of the Chartered Institute of Public Finance and Accountancy, which feels strongly on this point. Its members audit water authorities as employees of the district audit service. They are also employees of private firms, which also audit water authorities. Under the Bill none of these members would be allowed to act as auditors in their own right. CIPFA is concerned with public sector accounting and audit and its members have considerable expertise. The exclusion of these members from the list of auditors would, therefore,

      713
      exclude as principals people with specialist public sector expertise. That exclusion is wrong. The amendment is designed to remedy that.
      In the past there has been some opposition from the Institute of Chartered Accountants in England and Wales to the inclusion of CIPFA names in this context. However, negotiations have taken place and agreement has been reached. I shall quote from two letters.
      5.0 pm.
      The first letter is from the secretary of the Institute of Chartered Accountants to the secretary of CIPFA. It states:
      "As you know the Local Government Finance (No. 2) Bill provides, at Schedule 2, Paragraph 2, that a person shall not be qualified for appointment as auditor of a water authority unless he is a member of a body of accountants established in the United Kingdom and recognised for the purpose of section 161(1)(a) of the Companies Act 1948.
      We understand that CIPFA intends to suggest to the Department of the Environment that, in addition to members of those bodies recognised by the Department of Trade in accordance with section 161(1)(a) of the Companies Act 1948, members of CIPFA should be qualified to audit water authorities…The object of this letter is to advise you that the Institute of Chartered Accountants in England and Wales will not oppose such an amendment as long as it is understood to be subject to the following qualification … it is agreed by this exchange of correspondence that a member of CIPFA will not, in practice, be eligible to undertake the audit of a water authority unless either:
      in the case of a member admitted before 1 January 1974, he has completed three years' experience engaged principally on auditing work in a practising office; or in the case of a member admitted after 31 December 1973, he has completed five years' experience engaged principally on auditing work in a practising office."
      CIPFA replied:
      "We accept the conditions set out in your letter and this exchange of letters will constitute an agreement between us as to the practical effect of the addition of the name of this Institute."
      The two bodies most affected by this small but important aspect are in agreement. It would be in their interest and in the interests of the auditing of water authorities generally if the small amendment were accepted.
      Mr. Harry Cowans: I, too, welcome new clause 1. The Bill as published would have taken away the right of ratepayers to examine water authority accounts.
      The hon. Member for Reading, North (Mr. Durant) is right to praise the Reading ratepayers, but it was a little churlish of him not to acknowledge the support of right hon. and hon. Members on the Opposition Benches in the debate which brought about the new clause. I do not make a party political point, but together we forced common sense on the Government. Right hon. and hon. Members on the Government Benches repeatedly asked for greater speed, but had we proceeded faster such points would have been missed, to the detriment of ratepayers.
      I hope that the Minister will acknowledge the part that we played. Had we gone faster we may not have had the new clause.
      Mr. Durant: I do not wish to be churlish, but the main thrust of the Opposition's argument was that the water authorities were being shifted to a different audit status. The question of the involvement of ratepayers came later.
      Mr. Cowans: The hon. Gentleman is partly right. That was part of our argument, but, equally forcefully, we
      714
      argued that ratepayers would lose their right to review water authority accounts. I could quote from our Committee debates to prove that I am correct, but I am sure that, being an honourable man, the hon. Gentleman will accept my word. I believe that it is vitally important to place that fact on the record.
      Dr. Brian Mawhinney: In Committee, I joined my hon. Friend the Member for Reading, North (Mr. Durant) in tabling the amendment to encourage the Government to rectify this mistake. I join him this afternoon in welcoming the new clause and thanking the Government. I thank my hon. Friend the Minister For fulfilling, in the spirit and tha letter, the assurance that the new clause would be drafted in time for it to be examined, so that, if it was not acceptable other amendments could be tabled.
      There is no intention to be churlish. The Opposition made a contribution. The hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) and his right hon. and hon. Friends argued this and many other cases in Committee. They argued them well but not always with conspicuous results. Had it not been for the interest of my hon. Friend and myself they might have argued another case well but with no conspicuous result. We should all thank the Government for responding to cross-party pressures in Committee.
      Mr. David Alton: I, too, participated in the Committee debate on 26 March, but I shall not take part in the self-congratulation. I am grateful to the Minister for fulfilling the obligation that he gave, but I agree with the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) that the new clause does not go far enough. The right of access to information has been restored, but the right of objection should have been enhanced.
      I quote again from the letter from the National Association of Local Councils, which states:
      "Our Association has been much exercised all last year about the lack of local control over the operations and charges of Water Authorities and we have just settled a policy paper seeking more influence in their decision for those they serve. It seems very wrong that a revision of audit procedures should take away an opportunity for the local public to query the accounts of the Water Authorities."
      That association, too, put pressure on the Government. It has been all-party pressure. The debate in Committee helped to bring about the new clause.
      There is also general concern about the size of water bills. Many ratepayers have a feeling of futility because they cannot go to an elected representative and gain access to the water authority. Following the consultation paper "The Membership of Regional Water Authorities" and the Department of Trade's paper "Consumers' Interests and the Nationalised Industries", I hope that the Government will bring forward radical proposals for the greater democratisation and accountability of water authorities.
      The water rate system needs to be reformed. It is iniquitous that an elderly person living alone can pay the same water rate as a family next door purely because of arbitrary property valuations. I and other Liberal colleagues made representations to the Secretary of State for the Environment about the matter last week in response to his Green Paper on rating.
      I hope that we shall see radical proposals to change the way that water authorities operate and to ensure that they become far more responsive to consumers and more

      715
      accountable. The purpose of the Bill was to get value for ratepayers' money. I hope that we shall not lose sight of that purpose when considering the role of water authorities.
      Mr. Giles Shaw: I shall respond briefly to some of the points that have been raised. The hon. Member for Edmonton (Mr. Graham) asked for an assurance, as did the hon. Member for Liverpool, Edge Hill (Mr. Alton), that the rights being embodied in new clause 1 were identical to those that now exist. They are not identical in words although they are in design.
      An objector has the right to challenge the auditor but not in precisely the same way as the district auditor accepted those rights under the local authority legislation. The district auditor's response to an objection is in relation to illegality, the rule of the courts and so on, closely allied to procedure in the courts. This is a much wider power. We are providing an open right of challenge linked to the auditor's duty to report matters in the public interest. That meets the request of the NFU. It will continue to have the right to object. That is an appropriate right for the water industry in its new guise.
      My hon. Friend the Member for Reading, North (Mr. Durant) welcomed the proposed change. I, too, recognise the part played by the ratepayers of Reading and the other ratepayers' associations that raised this issue. My hon. Friend made a further and extremely important point. He pointed out that there is not as yet an amendment dealing with the powers to reduce a rate. My hon. Friend the Member for Bedfordshire, South (Mr. Madel) also referred to that matter. I assure both my hon. Friends that the matter will be dealt with in another place. My right hon. Friend intends to bring forward an amendment for that purpose. Its omission from the Order Paper today indicates the complexity of dealing with the matter, not a lack of intention that it should be dealt with.
      My hon. Friend the Member for Hornchurch (Mr. Squire) spoke in support of amendment (a) to the new schedule, which we are pleased to accept. It allows CIPFA members to join the audit team in the same way as other qualified members. From what I have heard, I believe that there is general acceptance of new clause 1 and the amendments. I welcome that view and I commend the amendments to the House.
      Question put and agreed to
      Clause read a Second time, and added to the Bill.
      Mr. Squire: On a point of order, Mr. Deputy Speaker. I am unclear whether you have disposed of my amendment (a).
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): We work through the Amendment Paper, of which the hon. Gentleman has a copy.

    New Clause 2

      DURATION OF PART I OF ACT
      `(1) The provisions of Part I of this Act shall cease to have effect at the expiration of one year from the date on which it comes into force unless extended by order of the Secretary of State made by statutory instrument
      (2) No statutory instrument containing such an order shall take effect until it has been approved by resolution of the House of Commons.'.—[Mr. Oakes.]
      Brought up, and read the First time.
      Mr. Gordon Oakes: I beg to move, That the clause be read a Second time.
      New clause 2 is short and would simply limit the duration of part Ito 12 months from the date on which the legislation comes into force, giving the Government an opportunity to renew part I by statutory instrument approved by the affirmative procedure of the House.
      There are three principal reasons why the Opposition want to discuss the new clause in the House. First, the Secretary of State himself, the Minister for Local Government and Environmental Services and the Under-Secretaries of State have repeatedly, on Second Reading and throughout the Committee stage, referred to this as an interim measure. The Opposition believe that if it is to be enacted at all, it should be enacted as interim legislation. At the penultimate sitting of the Committee, the Minister made it clear at that late stage that the Government intended to operate clauses 1 and 2 retrospectively. Because of that, the Opposition wanted the House to have the opportunity to debate what the Committee did not have the opportunity to debate as a result of that extremely late intervention by the Minister.
      5.15 pm.
      Ministers have continually said that this is interim legislation. It is detested by all local authority associations. They would be mollified a little if they knew that the Government would treat the legislation as being an interim measure.
      Our second reason might interest Conservative Members, if they were here in sufficient numbers to be interested. They often express concern about reform of the rating procedure, on which the Government introduced a Green Paper. The final date for representations to be made on the Green Paper was 31 March this year. The Minister—indeed, all Ministers—continually tell the country that they intend to act on the rating system. If they intend to do something, why are they introducing this measure as primary legislation for all time? Our new clause will strengthen the arm of those who want something done about the rating system, as it will give the Government only 12 months to operate the Act—by which time, presumably, they will have done something about the Green Paper and put proposals before the House to deal with the reform of the rating system.
      Thirdly, throughout the Committee stage we were presented with a kaleidoscope. It is a pity that the hon. Member for Bedfordshire, South (Mr. Madel) has left the Chamber, as the matter is apposite to Bedfordshire. Matters changed from week to week, and the Government changed the Bill from week to week. The issue of Bedfordshire is apposite to clauses 1 and 2. We believe that it is wrong for the Government to have introduced retrospection in primary legislation, which is intended to remain for all time. Were the legislation intended to be interim, we could understand that, but the House should not allow the Government to introduce retrospection in primary legislation.
      My right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) will speak about clause 4 and part II which are intimately connected with part I. During the weekend, we witnessed an international shambles created by the Government. Members of the Committee were not surprised, as a permanent shambles was presented to us by the Government. We understand that there is likely to be a major change to clause 4, which in itself was a major

      717
      change to the original Bill, which in turn was a change to the Local Government Finance (No. 1) Bill. In such circumstances, it is wrong for the House to pass part I as primary legislation. The Government should at least partly rectify the position by saying that this is interim legislation, that it is for only one year and that the House will have the opportunity annually to review it.
      Mr. John Cartwright: I rise briefly to support the new clause. As the right hon. Member for Widnes (Mr. Oakes) has said, we are here stepping into very dangerous and uncertain waters. I certainly do not wish to explore the Bedfordshire case at this point, but it highlights the fact that unanticipated events have occurred even during the passage of the Bill. If it can happen in Bedfordshire, it can happen elsewhere and it is clear that other problems may crop up that even the Government have not anticipated or expected. In that situation, it seems sensible to review the application of part I annually.
      The right hon. Member for Widnes referred to the situation as a kaleidoscope. That is a colourful term, but I should have thought that the present situation for local government was more like a switchback, with considerable ups and downs and some very nasty turns and bends, not to mention jolts, for some local authorities. It would therefore be sensible for Parliament to review this major change. The removal of the right to levy supplementary rates, which has existed for many years, is a major and extremely important change that should not be lightly made, and it is right that it should be reviewed annually. I therefore support the new clause
      The Under-Secretary of State for Wales (Mr. Wyn Roberts): It seems to me that in Committee we covered, if not exactly this ground, at least very similar ground, as well as what I might describe as allied ground. In other words, the new clause represents yet another attempt by the Opposition to prevent the Government from banning supplementary rates.
      This is in no way a temporary expedient. Reference has been made to the comments on Second Reading of my right hon. Friends the Secretary of State for the Environment and the Minister for Local Government and Environmental Services. I see no contradiction whatever between the two statements. My right hon. Friend the Secretary of State said:
      "In all it is an important measure to carry us forward to the next stage which will follow the consultation we have now begun on the reform of local government finance itself."—[Official Report, 18 January 1982; Vol. 16, c. 58.]
      It is in that context that we must see the total ban that the Government intend to impose on supplementary rates.
      I assure the House that this measure is not intended to avoid the need for the fundamental reform of the domestic rating system to which we are committed. As the House knows, consultation on this finished at the end of last month. We must now consider the results of that consultation. The ban on supplementary rates and precepts is an interim measure, at least in the domestic sector, pending our proposals for the reform of the domestic rating system. In the commercial and industrial sector, in which rates may well remain for the foreseeable future, the ban is likely to continue.
      I think that I have explained to the House why we oppose some of the arguments advanced in favour of the new clause in relation to our proposals for rating reform.
      718
      The real reason behind our banning of supplementary rates was stated by my right hon. Friend the Secretary of State for the Environment on Second Reading, when he said:
      "What the House clearly has to face, and what is at the centre of the controversy about so much of local government today, is that parts of local government are determined to scrap the traditional relationship between central Government and local government whereby local government recognised and accepted the right of central Government to set the level of local expenditure."—[Official Report, 18 January 1982; Vol. 16, c. 49.]
      Last year, a situation developed in which 30 local authorities levied supplementary rates. That was something of a novelty, and the Government are not prepared to allow it to continue.
      In further justification of our decision to abolish supplementary rates, I must point out yet again that they have never been allowed in Scotland. We have come to the conclusion that ratepayers in England and Wales have the right to seek the protection of the Government from the depredations of irresponsible local authorities, as large numbers of ratepayers have done in the past six months. Our objective in banning supplementary rates and precepts is to give ratepayers that protection and to prevent hasty and ill-considered increases in spending after the financial year has begun and both domestic and non-domestic ratepayers have made their financial plans for the year.
      I repeat that there is nothing temporary about the measure that we propose to abolish supplementary rates. Therefore, I must ask the House to reject the new clause.
      Mr. Oakes: All that the Minister has really said in reply is that in the vocabulary of Her Majesty's Ministers "interim" means "permanent" and "permanent" may mean "interim". In the words of a famous comedian, there is no answer to that. There is no point in debating the matter further. I therefore ask my right hon. and hon. Friends to divide the House on the new clause.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 206, Noes 262.

      Division No. 118]

      [5.25 pm

      AYES

      Abse, Leo

      Cohen, Stanley

      Adams,Allen

      Coleman,Donald

      Allaun, Frank

      Conlan,Bernard

      Alton,David

      Cook, Robin F.

      Archer, Rt Hon Peter

      Cowans, Harry

      Ashley, Rt Hon Jack

      Cox, T. (W'dsw'th, Toot'g)

      Ashton,Joe

      Craigen, J. M. (G'gow, M' hill)

      Atkinson,N, (H' gey,)

      Crowther,Stan

      Bagier, Gordon A.T.

      Cryer, Bob

      Barnett, Guy (Greenwich)

      Cunliffe,Lawrence

      Barnett, Rt Hon Joel (H'wd)

      Cunningham, DrJ.(W'h'n)

      Benn, Rt Hon Tony

      Dalyell, Tam

      Bidwell,Sydney

      Davidson,Arthur

      Booth, Rt Hon Albert

      Davies, Rt Hon Denzil (L'lli)

      Boothroyd, Miss Betty

      Davies, Ifor (Gower)

      Bottomley, Rt HonA.(M'b'ro)

      Davis, Clinton (HackneyC)

      Bradley, Tom

      Davis, Terry (B'ham, Stechf'd)

      Bray, Dr Jeremy

      Deakins,Eric

      Brown, Hugh D. (Provan)

      Dean, Joseph (Leeds West)

      Brown, R. C. (N' castle W)

      Dewar,Donald

      Brown, Ronald W. (H' ckn 'yS)

      Dixon,Donald

      Brown, Ron (E'burgh, Leith)

      Dobson,Frank

      Buchan,Norman

      Dormand,Jack

      Callaghan, Rt Hon J.

      Douglas,Dick

      Callaghan, Jim (Midd't 'n& P)

      Dubs,Alfred

      Campbell,Ian

      Dunn, James A.

      Campbell-Savours,Dale

      Dunnett,Jack

      Canavan,Dennis

      Dunwoody, Hon MrsG.

      Carmichael,Neil

      Eadie,Alex

      Cartwright,John

      Eastham, Ken

      Cocks, Rt Hon M. (B'stolS)

      Edwards, R. (W'hampt'nS E)

      719

      Ellis, H.(NE D'bysh're)

      Oakes, Rt Hon Gordon

      English,Michael

      O'Halloran,Michael

      Evans, loan (Aberdare)

      Neill,Martin

      Evans, John (Newton)

      Orme, Rt Hon Stanley

      Faulds,Andrew

      Park,George

      Field,Frank

      Parker,john

      Flannery,Martin

      Parry,Robert

      Fletcher,Ted (Darlington)

      Pendry,Tom

      Foot, Rt Hon Michael

      Penhaligon,David

      Ford,Ben

      Pitt,WilliamHenry

      Forrester,John

      Powell,Raymond(Ogmore)

      Foster,Derek

      Price, C. (Lewisham W)

      Foulkes,George

      Race, Reg

      Fraser, J. (Lamb'th, N'w'd)

      Radice,Giles

      Freeson,Rt Hon Reginald

      Rees, Rt Hon M (Leeds S)

      Garrett, John (NorwichS)

      Richardson,Jo

      George,Bruce

      Roberts,Albert(Normanton)

      Gilbert, Rt Hon Dr John

      Roberts,Allan(Bootle)

      Ginsburg,David

      Roberts, Ernest (HackneyN)

      Golding,John

      Roberts,Gwilym(Cannock)

      Graham, Ted

      Robertson,George

      Grimond, Rt Hon J.

      Robinson, G. (CoventryNW)

      Hamilton,James (Bothwell)

      Rooker, J. W.

      Hamilton, W. W. (C'tral Fife)

      Ross, Ernest (Dundee West)

      Harrison, RtHon Walter

      Rowlands,Ted

      Haynes, Frank

      Sandelson,Neville

      Heffer, Eric S.

      Sever, John

      Homewood,William

      Sheerman,Barry

      Hooley,Frank

      Sheldon, Rt Hon R.

      Howell, Rt Hon D.

      Silkin, Rt Hon J. (Deptford)

      Howells,Geraint

      Silkin, Rt Hon S. C. (Dulwich)

      Hoyle,Douglas

      Silverman,Julius

      Huckfield,Les

      Skinner,Dennis

      Hughes, Robert (Aberdeen N)

      Smith, Rt Hon J. (N Lanark)

      Hughes, Roy (Newport)

      Snape, Peter

      Janner,HonGreville

      Soley,Clive

      Jay, Rt Hon Douglas

      Spearing,Nigel

      John,Brynmor

      Spriggs,Leslie

      Johnson, Walter (Derby S)

      Stallard, A. W.

      Johnston,Russell (Inverness)

      Stoddart,David

      Jones, Rt Hon Alec (Rh'dda)

      Stott,Roger

      Jones, Barry (East Flint)

      Strang, Gavin

      Kaufman, Rt Hon Gerald

      Straw,Jack

      Kilfedder, JamesA.

      Summerskill,HonDrShirley

      Kilroy-Silk,Robert

      Taylor, Mrs Ann (Bolton W)

      Lamborn,Harry

      Thomas, DrR.(Carmarthen)

      Leadbitter,Ted

      Thorne, Stan (PrestonSouth)

      Leighton,Ronald

      Tilley,John

      Lestor, MissJoan

      Tinn, James

      Lewis, Arthur (N'ham NW)

      Torney,Tom

      Litherland,Robert

      Varley, RtHon Eric G.

      Lofthouse,Geoffrey

      Wainwright,E. (DearneV)

      Lyon,Alexander(York)

      Wainwright,R.(ColneV)

      McCartney,Hugh

      Walker, Rt Hon H.(D'caster)

      McDonald,DrOonagh

      Watkins,David

      McKelvey,William

      Weetch,Ken

      MacKenzie, RtHonGregor

      Wellbeloved,James

      McNamara,Kevin

      Welsh,Michael

      McTaggart,Robert

      White, Frank R.

      McWilliam,John

      White, J. (G'gowPollok)

      Magee, Bryan

      Whitehead,Phillip

      Marks,Kenneth

      Whitlock,William

      Marshall, Jim (LeicesterS)

      Willey,RtHon Frederick

      Maynard, Miss Joan

      Williams, Rt Hon K(S'sea W)

      Meacher, Michael

      Wilson,William (C'trySE)

      Mellish,Rt Hon Robert

      Winnick,David

      Mikardo,Ian

      Woodall,Alec

      Millan,RtHonBruce

      Woolmer,Kenneth

      Miller, DrM.S. (E Kilbride)

      Wright,Sheila

      Mitchell,Austin (Grimsby)

      Young, David (Bolton E)

      Mitchell, R.C. (Soton Itchen)

      Morris, Rt Hon C. (O'shaw)

      Tellers for the Ayes:

      Moyle, Rt Hon Roland

      Mr. Allen McKay and Mr. George Morton.

      Newens, Stanley

      NOES

      Adley,Robert

      Ancram,Michael

      Aitken,Jonathan

      Arnold, Tom

      Alexander,Richard

      Aspinwall,Jack

      Alison,Rt Hon Michael

      Atkins,Robert(PrestonN)

      720

      Atkinson,David(B'm'th,E)

      Gorst,John

      Baker,Kenneth(St.M'bone,)

      Gow, Ian

      Baker, Nicholas (N Dorset)

      Grant, Anthony (HarrowC)

      Banks,Robert

      Gray, Hamish

      Bendall,Vivian

      Greenway, Harry

      Benyon, W. (Buckingham)

      Griffiths,E.(B'ySt.Edm'ds)

      Berry,HonAnthony

      Griffiths,Peter Portsm'thN

      Best, Keith

      Grist, Ian

      Bevan, DavidGilroy

      Gummer,JohnSelwyn

      Biffen, Rt Hon John

      Hamilton, Hon A.

      Biggs-Davison,SirJohn

      Hamilton,Michael(Salisbury)

      Blackburn,John

      Hampson, DrKeith

      Blaker,Peter

      Hannam,John

      Body,Richard

      Haselhurst,Alan

      Bonsor,SirNicholas

      Havers, Rt Hon Sir Michael

      Bottomley, Peter (W'wich W)

      Hawksley,Warren

      Bowden,Andrew

      Hayhoe,Barney

      Boyson,Dr Rhodes

      Heddle,John

      Braine,SirBernard

      Henderson,Barry

      Bright,Graham

      Hicks,Robert

      Brinton,Tim

      Higgins, Rt Hon Terence L.

      Brittan,Rt.Hon.Leon

      Hogg,HonDouglas(Gr'th'm)

      Brotherton,Michael

      Holland,Philip(Carlton)

      Brown,Michael(Brigg&Sc'n)

      Hooson, Tom

      Browne, John (Winchester)

      Hordern,Peter

      Bruce-Gardyne,John

      Howe, Rt Hon SirGeoffrey

      Bryan,Sir Paul

      Howell, Rt Hon D.(G'ldf'd)

      Buchanan-Smith, Rt. Hon. A.

      Howell, Ralph(N Norfolk)

      Buck,Antony

      Hunt,David (Wirral)

      Budgen,Nick

      Hunt,John(Ravensbourne)

      Burden,SirFrederick

      Hurd, Rt Hon Douglas

      Butcher,John

      Jenkin, Rt Hon Patrick

      Cadbury,Jocelyn

      Jessel, Toby

      Carlisle, John (Luton West)

      JohnsonSmith,Geoffrey

      Carlisle,Kenneth(Lincoln)

      Jopling,Rt Hon Michael

      Carlisle, Rt Hon M. (R'c'n)

      Joseph, Rt Hon Sir Keith

      Chalker,Mrs.Lynda

      Kellett-Bowman,MrsElaine

      Channon, Rt. Hon. Paul

      Kershaw,SirAnthony

      Chapman,Sydney

      Kimball,SirMarcus

      Clark, Hon A. (Plym 'th, S'n)

      King, Rt Hon Tom

      Clark, Sir W. (CroydonS)

      Kitson,SirTimothy

      Clarke,Kenneth(Rushcliffe)

      Knight, MrsJill

      Clegg,SirWalter

      Knox,David

      Cockeram,Eric

      Lamont,Norman

      Colvin,Michael

      Lang,Ian

      Cope,John

      Latham,Michael

      Cormack,Patrick

      Lawrence, Ivan

      Costain,SirAlbert

      Lawson, Rt Hon Nigel

      Cranborne,Viscount

      Lee, John

      Critchley,Julian

      LeMarchant,Spencer

      Crouch,David

      Lennox-Boyd,HonMark

      Dean, Paul (NorthSomerset)

      Lester, Jim (Beeston)

      Dickens,Geoffrey

      Lewis,Kenneth(Rutland)

      du Cann, Rt Hon Edward

      Lloyd, Ian (Havant& W'loo)

      Dunn,Robert(Dartford)

      Lloyd, Peter (Fareham)

      Durant, Tony

      Loveridge,John

      Eden, Rt Hon Sir John

      Lyell,Nicholas

      Eggar, Tim

      McCrindle,Robert

      Elliott,SirWilliam

      McCusker,H.

      Emery, Sir Peter

      Macfarlane,Neil

      Fairbairn,Nicholas

      MacGregor,John

      Fairgrieve,SirRussell

      MacKay, John (Argyll)

      Farr,John

      Macmillan, Rt Hon M.

      Fell, Sir Anthony

      McNair-Wilson,M. (N'bury)

      Fenner, Mrs Peggy

      McNair-Wilson, P. (NewF'st)

      Finsberg,Geoffrey

      Madel,David

      Fletcher,A.(Ed'nb'gh N)

      Major,John

      Fletcher-Cooke,SirCharles

      Marlow,Antony

      Fookes, Miss Janet

      Marshall,Michael(Arundel)

      Forman,Nigel

      Marten, Rt Hon Neil

      Fowler, Rt Hon Norman

      Mates,Michael

      Fox,Marcus

      Mather,Carol

      Fry, Peter

      Maude, Rt Hon Sir Angus

      Gardiner,George(Reigate)

      Mawby, Ray

      Garel-Jones, Tristan

      Maxwell-Hyslop,Robin

      Gilmour, Rt Hon Sir Ian

      Mayhew,Patrick

      Glyn,DrAlan

      Mellor,David

      Goodhart,SirPhilip

      Meyer,SirAnthony

      Goodhew,SirVictor

      Miller,Hal(B'grove)

      Goodlad,Alastair

      Mills,Iain(Meriden)

      721

      Mills, Peter (West Devon)

      Shepherd,Richard

      Moate,Roger

      Shersby,Michael

      Monro,SirHector

      Silvester,Fred

      Montgomery,Fergus

      Sims,Roger

      Moore,John

      Skeet, T. H. H.

      Morgan,Geraint

      Speed,Keith

      Morris, M. (N'hamptonS)

      Speller,Tony

      Morrison, Hon P. (Chester)

      Spicer, Jim (West Dorset)

      Mudd,David

      Sproat,Iain

      Murphy,Christopher

      Stevens,Martin

      Myles, David

      Stewart,A.(E Renfrewshire)

      Needham,Richard

      Stewart, Ian (Hitchin)

      Nelson,Anthony

      Stokes,John

      Neubert,Michael

      Stradling Thomas,J.

      Newton, Tony

      Taylor, Teddy (S'end E)

      Onslow,Cranley

      Temple-Morris,Peter

      Oppenheim, Rt Hon Mrs S.

      Thompson,Donald

      Page, Richard (SW Herts)

      Thorne, Neil (IlfordSouth)

      Parkinson, Rt Hon Cecil

      Thornton,Malcolm

      Parris,Matthew

      Townend,John (Bridlington)

      Patten,Christopher(Bath)

      Townsend,CyrilD,(B'heath)

      Patten, John (Oxford)

      Trippier,David

      Pattie,Geoffrey

      Trotter,Neville

      Pawsey, James

      van Straubenzee, SirW.

      Percival,Sir Ian

      Viggers,Peter

      Peyton, Rt Hon John

      Waddington,David

      Pink, R.Bonner

      Wakeham,John

      Porter,Barry

      Walker, B. (Perth)

      Prentice, Rt Hon Reg

      Walker-Smith, Rt Hon Sir D.

      Prior, Rt Hon James

      Waller,Gary

      Proctor, K. Harvey

      Ward,John

      Pym, Rt Hon Francis

      Warren,Kenneth

      Raison, Rt Hon Timothy

      Watson,John

      Rathbone,Tim

      Wells,Bowen

      Rhodes James, Robert

      Wells,John(Maidstone)

      Ridley,HonNicholas

      Wheeler,John

      Rifkind,Malcolm

      Whitelaw, Rt Hon William

      Rippon, Rt Hon Geoffrey

      Whitney,Raymond

      Roberts, Wyn (Conway)

      Wickenden,Keith

      Rossi,Hugh

      Wiggin,Jerry

      Rost, Peter

      Wilkinson,John

      Royle, Sir Anthony

      Williams,D. (Montgomery)

      Sainsbury, Hon Timothy

      Wolfson,Mark

      St. John-Stevas, Rt Hon N.

      Young,SirGeorge (Acton)

      Scott,Nicholas

      Younger, Rt Hon George

      Shaw, Giles (Pudsey)

      Shaw,Michael (Scarborough)

      Tellers for the Noes:

      Shelton,William (Streatham)

      Mr. Peter Brooke and Mr. Robert Boscawen.

      Shepherd,Colin (Hereford)

      Question accordingly negatived.

    New clause 3

      SUPPLEMENTARY REPORTS
      `In section 61 of the Local Government, Planning and Land Act 1980 at the end of subsection (6) there shall be inserted—
      "(7) Subject to subsection (8) below, where, during a financial year, the level of prices, costs and remuneration is higher than the level taken into account, through the application of section 54(4)(d) above, for the purpose of determining the amounts payable the Secretary of State shall, during the financial year, make one or more supplementary reports.
      (8) A supplementary report made in accordance with the provision of subsection (7) above shall—

      (a) contain the details set out in (i) to (iii) below which said details shall have been agreed by the Secretary of Slate and such Associations of Local Authorities as appear to him to be appropriate, and

      (b) specify—

      (i) the level taken into account for the purpose:, of the said section 54(4)(d) as a percentage of the higher level; and

      (ii) the additional amount of Block Grant payable to each local authority; and

      (iii) the method of calculation of the said additional amount of Block Grant".'.—[Mr. Kaufman.]

      Brought up, and read the First time.
      5.30 pm
      Mr. Gerald Kaufman: I beg to move, That the clause be read a Second time.
      I first offer an apology in advance. I must attend a meeting of the Shadow Cabinet at 6 o'clock. Therefore, after I have spoken, I shall be unable to remain for much of the first part of the debate. I hope that the House will forgive me in the special circumstances.
      We have tabled this new clause because of the chaos into which the whole business of rate, target and penalty fixing has fallen as a result of the Government's inability to manage these matters and the Bill.
      Since last year, the Government have involved local government in a series of targets and penalties by which the Secretary of State seeks to control local authority expenditure. I shall not go into the basis of the right hon. Gentleman's unfounded allegations that local authority spending is out of control, but, looking at these various operations, one sees that last year's hold-back exercise was written off by the Secretary of State as disastrous. This year's exercise—that is, the targets announced with the rate support grant report—is based on criteria which, as I have tried to point out in previous debates, are not only new and different from the criteria introduced during the last hold-back exercise, but are also irrational and, to many, incomprehensible. They are also riddled with flaws. Last year volume targets were imposed on local government, which led to many local authorities being subjected to penalty. When the Secretary of State considered the outcome of the hold-back exercise he thought that too many local authorities had been subjected to penalties. From his point of view, too many Conservative authorities had been penalised.
      When the exercise had been completed the right hon. Gentleman introduced the alternative criterion of grant-related expenditure assessment. He introduced that belatedly as a way of reprieving some Conservative authorities. Forty-six authorities were relieved of penalty by the introduction of the alternative criterion despite the fact that there was an aggregate overspend of over £70

      723
      million on the basis of the Secretary of State's criterion. That episode was described by the right hon. Gentleman as disastrous.
      This year the Secretary of State has attempted to retrieve the disaster by introducing new targets and from the start assigning grant-related expenditure assessment as an alternative ceiling. He has said that any local authority that spends up to but not beyond the GREA will not be subjected to penalty, even if the authority is above its expenditure target.
      In our debates last year we forecast that the optional target fixing would lead to many councils spending well over the target in the knowledge that they could not be penalised. We estimated that it could lead to an overspend—this is on the Secretary of State's criterion because we do not acknowledge that there is such a thing as an overspend—of about £790 million.
      At present we have incomplete information about local authority budgets but the information that is available shows that council after council has decided to budget precisely up to its grant-related expenditure assessment where that assessment is above the target. Among the metropolitan authorities five local authorities have budgeted to spend up to their GREAs—Oldham, Birmingham, Wolverhampton, Kirklees and Leeds. Each authority is spending over its target and in some instances well beyond it. However, the authorities will be free of penalty.
      As I have said, the relevant information is incomplete but that which is available has brought some crazy anomalies to light. For example, Salford, a Labour-controlled authority, is budgeting to spend 2·5 per cent. over its target and will be subject to penalty as a result. Wirral, a Conservative authority, is budgeting to spend 2·5 per cent. over its target but will not be subject to penalty because it will not exceed the GREA. Gateshead, a Labour authority, is budgeting to spend 3·7 per cent. above its expenditure target and will be subject to penalty. Oldham, which is also a Labour-controlled authority, is budgeting likewise to spend 3·7 per cent. above its target but it will be subject to no penalty because, although it is spending precisely as much over its target as Gateshead, it will be below its GREA.
      Bury, a Conservative-controlled authority, is budgeting to spend 4·9 per cent. over its target and will be subject to penalty. Bolton, a Labour authority, is budgeting to spend 5·2 per cent. over its target but will be subject to no penalty because it is spending below the GREA.
      5.45 pm.
      The anomalies become even more bizarre the more we examine them. Tyne and Wear, which is a Labour authority, is budgeting to spend 13·9 per cent. over its target, and the House will not be surprised to hear that in these circumstances it will be subject to penalty. However, Leeds, which is also a Labour authority, is budgeting to spend not 13·9 per cent. but 16·4 per cent. above its target, and will not be subject to penalty because it is spending within its GREA.
      I have chosen these examples to show the demented nature of the irrationality and to demonstrate that it does not exclude Conservative councils. The Government are
      724
      so bad at the way in which they connive that they cannot even do a political fiddle. If a Government cannot manage that, they are failing in what is expected of them.
      The counties provide an interesting example. If there is one group of authorities which is responsible for overspending beyond targets, it is Conservative-controlled county authorities, which are spending more than their targets but seeking to escape penalty by remaining below their GREAs. The unreasonableness of the targets combined with the GREA loophole is estimated—this is based on the latest information that is available—to have led not to the £790 million overspend that we anticipated but to an overspend of £1,460 million. The shire counties are responsible for 41 per cent. of that huge overspend. The House should remember that the shire counties number only 45 out of the 411 local authorities in England.
      The Minister for Local Government and Environmental Services (Mr. Tom King): I know that the right hon. Gentleman does not want to mislead the House with his ingenious use of statistics. I think that he said that the shire counties are responsible for 40 per cent. of the overspend. Perhaps he will tell us the level of expenditure that is represented by the shire counties. If he does not have the figure readily to hand, let me tell him that it is about 50 per cent.
      Mr. Kaufman: I realise that. However, the Government have rigged the rate support grant. Last year the counties received an increase in RSG. It was increased from 32 per cent. of the total to 53 per cent. We do not have the figures for this year. That increase is one of the reasons for their high level of expenditure. They are buttressed by RSG.
      Mr. King: With great respect, that figure is wildly wrong.
      Mr. Kaufman: No, it is mildly right. The right hon. Gentleman has a tendency to blurt things out. He must take great care. These statistics are based on figures that he supplied to me. A simple pocket calculator—I shall be ready to supply him with one—will allow the right hon. Gentleman to arrive at the same conclusion. In the circumstances, it is no wonder that the condemnation of the Government is spreading far more widely than was previously the case. Last week there was a leading article in The Daily Telegraph which stated:
      "For all his grand gestures Mr. Heseltine has worse confounded the confusion. Mr. Heseltine has imposed somewhat arbitrary limits on spending and still more arbitrary penalties on offenders. The result has been litigation, bad tempers and no real brake to extravagance. The fundamental problems relating to tiers of Government and the welter of unnecessary statutory duties remain untouched."
      It is true that the Secretary of State's alleged controls have not led to reduced rate burdens. The average rate increase, so far as it is known for the financial year that began last week, is higher than inflation. In London, it is Conservative-controlled councils which have the highest rating. Of the 15 councils that plan to increase their general rate by more than 11 per cent., the current rate of inflation, only one is Labour controlled. Although some Conservative authorities, including the authority to which I pay rates in London, Westminster, are blaming the precepts from the GLC and the ILEA, the fact is that Labour authorities have had also to bear those precepts. Yet, on average, Labour authorities in London are rating much below Conservative-controlled authorities.
      Mr. King: I think, on any understanding of the English language, "rating" means the amount of rates that are charged. Does the right hon. Gentleman accept that the rates charged consistently by Labour authorities in London are higher than those charged by Conservative authorities when one considers the rate in the pound?
      Mr. Kaufman: I am sorry that the right hon. Gentleman has fallen so easily into that trap. He will now have to withdraw everything that he said about the figures issued by my hon. Friend the Member for Blackburn (Mr. Straw) in which my hon. Friend showed that people living in Labour authorities were paying less in rates than people living in Conservative authorities. The Minister stood his own argument on its head and said that this was not true: it was not what one paid in rates but the rate poundage that counted. Now he says precisely the reverse. The right hon. Gentleman had better make up his mind where he stands. My hon. Friend the Member for Blackburn has proved conclusively that people living in Labour areas are paying less in rates than people in Conservative areas.
      Mr. King: Is the right hon. Gentleman advancing the theory that a large department store in Oxford Street should pay no more rates than a corner tobacconist in Newcastle?
      Mr. Kaufman: I am very much in favour of a large department store in Oxford Street paying more in rates. I am not, however, a large department store in Oxford Street; I am a householder living in Westminster. I am paying vast rate increases because of the profligacy of Westminster city council on things that are unimportant, including the sending out of wasteful, expensive and politically motivated leaflets for which I, as a Westminster ratepayer, have to pay. In the end, as The Daily Telegraph among others has pointed out, it is the sheer irrationality of the grant that is the most onerous factor. That is one reason for the Opposition moving the new clause.
      We refer to the level of prices, costs and remuneration. Those factors are among the reasons for the irrationality of the basis upon which the Secretary of State has approached the rate support grant. We say that if such costs rise above the level laid down in the rate support grant report, as they already have, the Secretary of State should move a supplementary report to compensate local authorities.
      As well as those factors, there is also the question of the lawfulness of the targets and the penalties being laid down by the Secretary of State. All hon. Members know—the Minister has admitted it—that the targets and penalties of last year's hold-back exercise were unlawful and that the penalties cannot be imposed until this Bill becomes law. The Minister has said—it is in the rate support grant report—that clause 4 clarifies the situation. Now that we have produced for the House and the country the Anglo-Heseltinese dictionary that is necessary for people who study rating matters, we know that "clarify" means to make lawful retrospectively that which was unlawful when originally done by the Secretary of State for the Environment.
      We knew that the targets and penalties of the hold-back exercise were unlawful. We thought that we knew that the targets for the financial year that began last week were equally unlawful but that they would be made lawful when
      726
      this Bill becomes law. It is now said that the targets will not become lawful even when the Bill, as drafted, becomes law.
      The Government have had three shots at drafting clause 4. They tabled it; they amended it; they reamended it. We are now told—this requires clarification frome the Minister—that clause 4 as it is before the House is still wrong. We are now told that the targets referred to as guidance in the clause will remain unlawful if the Bill is carried in its present form because they are constructed with the PESC figures. We have had brought to our notice that it is considered that targets constructed on PESC figures will not be targets that are stated in clause 4(1) as being
      "in accordance with principles applicable to all local authorities."
      Because of the phraseology of guidance issued
      "in accordance with principles applicable to all local authorities"
      we are told that not only are the spending targets for the current financial year unlawful in the Bill as at present drafted but that the exclusions from the targets—the limits—of spending on urban aid and riot damage will be unlawful despite the fact that the Government say that these elements will be excluded from the spending limits.
      It is essential that we should hear a statement from the Minister clarifying the position—a statement that will tell the House whether, five months after the Bill was originally introduced, after the withdrawal of the Bill, after its reintroduction, after the amendment of clause 4, after the withdrawal of the amendments on clause 4, after the tabling of new amendments on clause 4 and after the incorporation into the Bill of the new amendments on clause 4, this Bill still contains a basic flaw at its heart and that clause 4, as drafted at present, is not fulfilling what the Government say it will fulfil. If that is so, I tell the Government here and now that this House, which has spent many months on the Bill, will regard it as intolerable if they seek to remedy their further mistakes by slipping in amendments for passage in the House of Lords. It is the House of Commons that has been put to prolonged inconvenience by the Government's incompetence in drafting the Bill.
      The Government would be treating the House with discourtesy if they were to seek to pass the Bill in a form—it is for them to tell us whether this is so—that they knew themselves to be faulty. If the Government treat the House with any respect, they should abandon this debate until they are ready with new amendments to clause 4 which they can present to the House so that hon. Members may consider them carefully, debate them and decide whether to seek to amend them. I am assuming that when the Government draft the amendments they will get them right at the fifth attempt. They cannot be relied upon to do so. They have made four attempts so far and have got it wrong every time. We want to know now whether the Government think that they have got it right this time. if they have got it wrong, we want to know that they are sure that when they amend the Bill again they will get it right. There is a procedure whereby Bills can go backwards between the House of Commons and the House of Lords, but if it is done too frequently it is likely to get noticed.
      Mr. Harry Cowans: My right hon. Friend makes too many assumptions for my liking because he seems to say that the Government have clause 4 right. May I cast my right hon. Friend's memory back to when this No. 6, 7, 8, 9 or 10 Bill was first

      727
      introduced? The Government assumed then that they had clause 4 right and argued that they had. They subsequently brought in an amendment to clause 4 and argued that that was correct. Later they brought in another amendment to the amended clause 4 and argued that that was correct. We now understand that this is clause 4 mark 58, and this one is correct. However, my right hon. Friend has just told us that there is another clause mark 59 coming up which again will presumably be right. If all those clauses were supposed to be right, how can my right hon. Friend assume that the latest effort will be right?
      Mr. Kaufman: I accept my hon. Friend's correction. It was an act of impertinence on my part to believe that the Government were likely to get it right on this attempt, the next one, or the one after that.
      The Opposition want a categoric statement from the Government on the position on clause 4. If the case is not as I have started it, we will be corrected, although only if the Government are 100 per cent. sure. If what we are saying is right, the best thing that the Government can do is to abandon this botched-up and ill-starred Bill altogether. It has brought them nothing but trouble since they so unthinkingly launched it.
      6 pm
      Mr. Alton: I support the new clause for a number of reasons. First, in many ways local councillors are having to fulfil a dual capacity of not only serving their constituents in their wards but having to immerse themselves in the detail of law and becoming Philadelphia lawyers. At the same time they are having to find out the details of how chartered accountancy works. It is not the job of a local councillor to become a professional in either of those capacities. Yet, as a result of this legislation introduced by the Secretary of State and the Government, it is becoming a nightmare for people to become local councillors.
      In Committee, I suggested that it would be appropriate for the Government to bring forward and amendment to clause 4 so that we could be made aware of the Government's true intentions, after they had got the Committee in the mess that they had. Now we hear that there is to be a further new clause 4—probably to be introduced in the House of Lords—and we are being asked to vote for legislation that the Government must think is inadequate. That seems to be a crazy way of going about things.
      As I said before, it is a nightmare for people to work in local government. They do not know whether they are coming or going, and this legislation makes things worse. Rate support grant settlements are more complicated to understand these days than the Rubik cube. Local councillors can be seen muddling through pages and pages of circulars from central Government and diktats and new amended pieces of legislation, all of which lead to the complete bewilderment of those who are there to serve their local constituents.
      Local councils should have the inalienable right to levy a supplementary rate. I do not see why it should be a matter for central Government to interfere in these matters. If local authorities make a mess of things, local electors can throw them out. Why should the Government constantly interfere with the work of the local administration?
      728
      I think it was Disraeli who coined a phrase to the effect that centralisation is the death blow of freedom. He must be turning in his grave today considering the things that the Government have introduced within the past three years. There was the Local Government, Planning and Land Act, then the Housing Act and now this latest legislation. All three pieces of legislation add up to the same thing—the reducing of powers of local authorities and the taking of more power to the centre.
      In many ways the approach being adopted towards local authorities is similar to the approach that Cromwell adopted towards the monasteries—first list them, then bust them. Clearly, the Secretary of State's intentions have been at all times to thwart the democratic will of local electors in electing councillors to serve them.
      The right hon. Member for Manchester, Ardwick (Mr. Kaufman) referred to a specific local authority where already great chaos has been caused as a result of the proposals in this legislation. It is worth looking again at the example of Bedfordshire county council. In Committee, the Minister accused me of maligning the leader of the Conservative group on the county council because I suggested that he had told local ratepayers not to pay their supplementary rates bills. It comes ill from the party that calls iself the party of law and order to go round telling people to defy the legitimate rights of the local council to levy a rate or a supplementary rate. That is still the law as it stands today.
      However, the Government intend, retrospectively and against every tenet of natural justice, to enact legislation that will bust that local authority and undo what a local authority quite legitimately decided to do in a democratic meeting of its council. It is interesting to examine the legal opinion given to the members of the Bedfordshire county council. It stated that it is a general rule of English law that no statute can be construed so as to have retrospective operation, unless such a construction appears clearly in the terms of the Act or arises by necessary and distinct implication. On the basis of that advice, the county council stood by its original decision to go for a relatively small increase in rates to ensure that it could continue running local services.
      It is worth noting that Bedfordshire county council has suffered badly as a result of the decisions taken by the Government. For instance, over the past three years it has lost more than £12 million in central funds. In 1981, prior to the county council elections, the Conservatives used the balance of £11 million in a desperate bid to retain their seats on the council. While opposing the cuts in the council's police budget, the same Conservative leaders have been urging people not to pay the supplementary rates that have been levied in an attempt to retain the level of services provided by the county council.
      Mr. Madel: The hon. Gentleman is giving us a great lecture about Bedfordshire county council and the difficulties in the county. Will he address his mind to the difficulties that face industry in that county and how the proposed supplementary precept and rate would affect it and disturb its employment base?
      Mr. Alton: Yes, I shall do so. It is relevant to the amendment.
      It is worth noting precisely what it is that the Bedfordshire county council is attempting to do. It is trying to maintain services and at the same time to improve

      729
      certain things that it promised to do in the mandate it asked for at the election. It is not doing anything that it did not say it would do at the time. It would be dishonest of it now to run away from the commitment that it gave to the electors. Equally, the Labour Party has a majority on that council and, therefore, a right to implement its policies.
      Mr. Madel: The hon. Gentleman is not answering my question. I referred not to services but to industry in Bedfordshire and the effect that the supplementary rate would have on it. Will the hon. Gentleman get his nose out of community politics and address himself to the problems of Bedfordshire industry?
      Mr. Alton: I am aware of the effects of massive rate increases on local businesses. That is why the Liberals on Bedfordshire county council attempted to introduce rates that they regarded as being reasonable to maintain services without at the same time hitting local industry unduly.
      The county council now has to levy a 31 per cent. rate increase simply to stand still and provide the same services. The Liberals and the Labour Party were characterised on that county council by the Conservatives as being wicked. The extra spending that the Liberals proposed amounted to another 2 per cent.
      Mr. Madel: Answer the question.
      Mr. Alton: Two per cent. of the 33½ per cent. increase is our responsibility. The rest of the increase is the responsibility of the Conservative Party.
      Mr. Madel: Answer the question.
      Mr. Speaker: Order.
      Mr. Alton: The Conservatives have reduced central Government funds to Bedfordshire county council by £12 million over the past three years.
      Mr. Allan Roberts: I am grateful to the hon. Member for Liverpool, Edge Hill (Mr. Alton) for making such a good case for the Bedfordshire county council supplementary rate. I hope that he is prepared to apply similar arguments to the supplementary rate levied by the Merseyside county council.
      Mr. Alton: My argument is that it should be a matter for local authorities to decide for themselves. If hon. Members had listened, they would have heard me say that councillors were elected on the basis of the programme that they offered to the electorate. The programme that the Bedfordshire county council Liberal group offered was to maintain services and to improve them in certain areas. On Merseyside, the county council is Labour-controlled and dominated by Left-wing elements. That has led to the resignation of the leader and deputy leader of that county council's Labour group, because they could no longer stomach the decisions made in the name of the old Labour Party. Under its Labour leadership, the county council made such profligate proposals that they had to be opposed. For example, Labour councillors wanted to open a resources centre, which is a total waste of ratepayers' money.
      These matters must be looked at on their merits by local councillors. They should not be matters for Parliament to decide. This legislation is ill-conceived, because it takes away power from local councillors.
      I think that everyone agrees that the whole of local government finance, especially the rates, is now in chaos. It was not an easy task to get it into this state, but the
      730
      Secretary of State has spent three long years working hard at it. The right hon. Gentleman reminds me of a certain Left-wing Labour leader in Liverpool who has vowed publicly to grind the city to a halt. Both are part of that other alliance that uses local government, local money and local people for its own selfish and dogmatic ends.
      I support the new clause.
      Mr. Cowans: I agree with much that the hon. Member for Liverpool, Edge Hill (Mr. Alton) has said. I am amazed by Government supporters who appear. though one can never be certain because there have been many cartwheels performed before, to be about to oppose new clause 3.
      The new clause would at last put some sanity, though not enough, into this nonsensical Bill. The ability to raise a supplementary rate is being taken away from local authorities, and new clause 3 is proposed as an alternative. Obviously it is not the full alternative, but it will help. The advent of the Bill has left officers in local government in a complete void. They do not know what advice they can give, and they look to the new clause to provide some sense at last.
      6.15 pm.
      I assume that the Government will be totally opposed to the new clause. However, I remind them that it is taken from their own Act. The new clause refers to the Local Government, Planning and Land Act, a Conservative Act. I should have thought that they would support their own Act. The clause mentions section 61, which refers to
      "supplementary reports for that year."
      In the new clause, we seek to put some bones on what the Government have said in the interests of local authorities. The Government agree that supplementary reports are necessary. That is provided for in their 1980 Act. However, they seem reluctant to spell out clearly and precisely, so that those in local government know exactly where they are going and what they are about, what should be contained in these supplementary reports.
      My right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) spoke of the penalties and targets. I do not want to go over that ground. But there are other aspects dealt with in the clause, apart from the penalties and targets. Any hon. Member who has served in local government will agree about the uncertainty of the finances of local government. At best they are based mainly on guesstimates.
      Again there seems to be agreement between the Government's Act and our new clause. The Government provide in section 54(4)(d) that
      "the current level of prices, costs and remuneration and any future variation in that level which in the opinion of the Secretary of State will result from decisions which appear to him to be final and which will have the effect of increasing any particular prices, costs or remuneration."
      So it is agreed that prices, costs and remuneration are relevant. The difference is that the Government believe that the dictatorial hand of the Secretary of State is the only one that shall decide what prices, costs and remuneration are to be considered.
      That is absolute nonsense. One has only to consider the time when the Secretary of State decides prices, costs and remuneration. There is a gap in the financial year when the financial position changes, sometimes as a result of Government policies. The Government are well aware of the disastrous policy changes that there have been. Interest

      731
      rates change, prices go up, costs go up and wages go up from the time that the Secretary of State makes his guesstimate of the rate support grant.
      The Opposition say that that is reasonably fair. No one can foresee the future, though one gets that impression from reading the Act. But no one can see into the future, and it is reasonable that the Secretary of State shall make supplementary reports. That is the fundamental difference between the Opposition and the Government. The Opposition say that the Minister "shall", whereas the Local Government, Planning and Land Act 1980 says that he "may". Having said that he should make supplementary reports bearing in mind that during the year prices, costs and wages change, we should try to spell out exactly what is to be done in those supplementary reports. If the Secretary of State makes a supplementary report—and up to now there has been no disagreement about a supplementary report being made—it seems reasonable to spell out what is to be contained in it and what the method of that supplementary report shall be. If we do not do that, we achieve nothing.
      We do that by stating what shall be contained in the supplementary report and the matters of which it should take account. But we go even further, because we do not see the Secretary of State as the be-all and end-all of knowledge. The right hon. Gentleman's track record lets him down too much even to think of giving him that dictatorial power. The Opposition are not prepared to say that one man, whether it be a Conservative or a Labour Secretary of State, should be in a position to make these decisions.
      When the Secretary of State makes his supplementary report, the Opposition say that he should make it to the people at the sharp end—those in local government—and agree the data and agree the prices, costs and wages which are to be considered. Only when they have been agreed is the right hon. Gentleman in a position to publish that report. In addition, he must state the amount of the block grant that is payable to each local authority, and, more important—something that the Government always manage to hide—the method of calculation. Nothing in the Bill has confused local authorities more. It even makes them hanker for the old method. People working in local government did not like that method, but the implications of this Bill make them nostalgic for it.
      Mr. Graham: Does my hon. Friend really have confidence in the ability of this Secretary of State or this Government to forecast accurately, for instance, the levels of inflation and wages, when the built-in figures in this year's settlements are woefully inadequate—4 per cent. for wages and 9 per cent. for inflation? They seem to be totally out of touch with reality.
      Mr. Cowans: By no stretch of the imagination do I consider that this Secretary of State is capable of forecasting anything. One of the problems for local government is that the Government do not make truthful forecasts or view matters in their proper perspective. Many Government actions create inflation, but then the Government profess not to have created inflation. They fix a low rate support grant, with disastrous consequences for local government.
      The new clause is necessary because this measure has created more confusion in local government than any other
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      legislation before has done. The Government have been successful in one respect: they are the only Government that I recall who have united all local authority associations of all political colours against what they seek to do. Worse than that, they have put local government officers who are employed to give legal and professional advice in an impossible position. I do not come from Bedford, but that area is a monitor of what is happening in local government throughout the country. Something which at present is lawful and on which chief executives have to pronounce suddenly becomes retrospectively unlawful. Local authorities are in a mess. What a chief executive says today will be illegal when the Bill comes into force, although it is legal when he says it. New clause 3 is an attempt to clear the mist that is slowly descending on local authorities.
      I want to highlight what I am saying by quoting a letter which, although it relates to Bedfordshire, applies throughout the country. I do not seek to make a political point. I want to show the utter confusion that now exists in local government. The chief executive says in his report to the council:
      "In what is undoubtedly a very complex and difficult situation,"—
      without new clause 3 it will be worse—
      "and probably one without precedent, any advice which is tendered to Members can only be a personal judgment. Again, as has been the position for some months, the easier course for any officer would be merely to present the issues to the Members and conclude 'the committee's instructions are requested."'
      That is what the Bill is doing to local officers who, because they now have to look at their own legal position, may have to opt out. The chief executive goes on:
      "I would see this as an inadequate discharge of a professional responsibility and propose therefore to put forward a recommendation. It is my opinion"—
      it should be noted that it is his opinion; the way the Bill is drafted, that is all that he has to rely on, because the legal validity is changing day by day—
      "that the Council should continue to maintain the validity of the supplementary precept and should take whatever measures are necessary to see that its validity is established but that, at the same time,"—
      this is where local government is in complete confusion—
      "some restraint should be applied to the commitment of expenditure so as to reduce the difficulties which would occur if that argument should fail and the income from the supplementary precept should be lost after all".
      That is what the Bill is doing to local government—apart from the many other ways in which councils are being placed in utter confusion.
      I do not claim that the new clause will solve every difficulty. The letter refers to other matters which are relevant to later amendments, but I shall not refer to them now because they are not germane to this new clause. New clause 3 may not be the be-all and end-all. All I claim is that it would make this nonsensical and obnoxious Bill a little better than it is. If the Government have the interests of local government at heart, they will accept it because it will help to clarify the situation.
      Mr. Allan Roberts: New clause 3 is particularly relevant to this legislation and to the Government's administrative and executive action in determining the rate support grant for the financial year 1982–83. I shall describe how the new clause and the Government's actions in that respect affect Merseyside and the metropolitan district of Sefton, in which my constituency lies.

      733
      New clause 3 puts back into statute law the provision for a supplementary report to be made by central Government during the course of a financial year. Traditionally, the purpose of a supplementary report is to enable the Government to put right mistakes, errors of judgment or miscalculations made when the original rate support grant settlement was decided and implemented. It has always been felt advisable that central Government should have the power to correct, adjust or change the original rate support grant settlement as the financial year progressed because no Government—no matter how successful they may be at predicting economic trends, inflation, unemployment or wage settlements—always get it exactly right. This Government are no better at assessing the likely outcome of economic trends than any other Government. For that reason, we feel that they should retain the power to produce a supplementary report and to alter the rate support grant settlement originally decided at the beginning of the year.
      New clause 3 is particularly important because the Bill takes away all the other options for correcting mistakes that have been made in the rate support grant settlement. It takes away the options that were previously available to local government to correct the mistakes. For instance, the assumptions made in the Government's rate support grant settlement of 4 per cent. for wage settlements and 9 per cent. for inflation are totally inaccurate, but local government is landed with a block grant rate support grant settlement dependent on those two assumptions.
      6.30 pm
      The Government must introduce a supplementary report during the current financial year—we have passed 1 April—to rectify that mistake, but, according to the Bill, the Government do not have the power to do so. Local government does not have the power to make up the deficit that every local authority in the country will face as a result of the Government's miscalculations. We have already pointed out that the Bill takes away from local authorities the power to levy a supplementary rate to put right the mistakes and to close the gap between the assumed and actual rates of inflation and wage increases.
      In addition, if there is a crisis within a local authority and the grant is withdrawn, or if there is not enough rate support grant available and the local authority cannot raise the extra revenue from the rates because it is not allowed to levy a supplementary rate, it cannot pass on a deficit to the following year. If it does, it will be penalised by the Secretary of State for overspending and for passing on overspending from one financial year to the next.
      Therefore, the option of maintaining a deficit and carrying it forward and levying a rate for it in the following year is closed to local government. If a local authority, because of economic difficulties, faces the prospect of becoming insolvent—a prospect that never existed before the Government began legislating to prevent local authorities from raising revenue to make up for losses in grant—the first call on its moneys goes to those who have lent it money, not to its employees or anyone else. The first call on a local authority that has borrowed money is the interest that must be paid. That is another area where local government is in a Catch-22 situation and where it is important that the Government are at least in a position to move in to assist with a supplementary report.
      What will happen if new clause 3 is not accepted must be related to what is happening on the ground. This is not
      734
      an academic debate. It matters in terms of the services provided by local authorities for local people. Before May 1981 a Conservative-controlled Merseyside county council overspent £16 million on its own Government's target and left a £5 million deficit to be carried forward into the financial year 1981–82. That £5 million deficit which was left by the Conservatives to an incoming Labour county council, led to a penalty being imposed by the Secretary of State for the Environment who withdrew grant for the current and the following financial years.
      When the Merseyside county council came to formulate its budget for 1982–83, it faced a number of choices. There was an aspiration budget of £180 million, which everyone would like to have seen. That would have provided the best possible services for Merseyside. A budget of £168·7 million was put forward by the various services committees of the council, which, having scrutinised their budgets, made cuts where it could. A budget of £157 million was proposed by the officers of the local authority, because they did not want to annoy the Government or the Secretary of State. They wanted to do what the Secretary of State asked them to do, but they could not quite make it, because the Secretary of State's target figure was £140 million. The Merseyside county council examined the services committees' request budget of £168·7 million and managed to reduce that to £165·5 million. The £140 million target required by the Secretary of State was deducted from the £165·5 million. That left £25·5 million above the Secretary of State's target. That was done 'to maintain essential services in Merseyside.
      The Labour group on the Merseyside county council knew that the Bill was going through Parliament, but its strong view was that it was acting legally and that the Secretary of State had no legal power of super holdback or clawback under the existing legislation when the budget was made or as it exists now as the precept goes out to the districts and the rate bills go out to the electors. The budget was drawn up in the knowledge that the councillors were acting legally.
      What is sad is that the Bill may or may not—the legal advice that the Minister offered in Committee does not clarify the position—retrospectively make the actions of Merseyside county council illegal. The advice given to the county council is "We do not think that it will retrospectively apply to you. You are certainly acting legally at the moment." The Minister's remarks in Committee lead us to believe that he has received advice which leads him to believe that the Bill is all right as it is because it will retrospectively make illegal the action taken by the Merseyside county council.
      I suggest to the hon. Member for Liverpool, Edge Hill (Mr. Alton) that his defence of Bedfordshire county council in its desire to fulfil its election commitments, to keep its promises to maintain services and, as a consequence, to raise a rate higher than the target set by the Secretary of State, applies equally to Merseyside county council.
      Mr. Alton: I rise simply to inform the hon. Member for Bootle (Mr. Roberts) and other hon. Members that I take that view and that it would be illogical not to do so. It is a matter for the Merseyside county council to determine. I accept that the Labour Party has a majority on Merseyside and, in many ways, is doing what it said

      735
      that it would do when it was elected. If local electors do not like that, they should replace Labour councillors at the next local election.
      My objection to what Bedfordshire county council has now done is that it was intimidated into taking that action by decisions that were taken in Committee, because the Bill will apply retrospectively to that council. That goes against what the electors in that area wanted.
      Mr. Roberts: I am grateful to the hon. Member for Edge Hill for his assurance that he supports what the Merseyside county council is doing to fulfil its election pledges.
      In Committee, I asked the Minister a specific question about local authorities receiving advice from various quarters about what was and was not legal?
      The Merseyside county council hopes to receive a supplementary report to help it make up the money lost because of extra inflation and wage increases, greater than anticipated expenditure on the police service and the expenditure—which the Government have still not met—to deal with the results of the rioting in Toxteth.
      The council also wants a supplementary report, which will give it a greater block grant allocation, so that it can provide bus passes for old-age pensioners in the Sefton area, which includes my constituency. The Sefton council—the only authority on Merseyside which is controlled by the Conservatives—is so measly that it will not give pensioners proper bus passes, but insults them by providing a handful of tokens, which run out within about three months, after which they cannot travel without paying the full fare.
      During the county council elections, the Labour Party promised to introduce a uniform bus pass for the whole of Merseyside and, in default of the Sefton council doing its duty, to provide passes for pensioners in Sefton. The council was advised that it might be illegal to provide bus passes for the elderly citizens of Sefton and elsewhere on Merseyside by other ratepayers and district councils. It was suggested that if the county council provided the service for Sefton, some ratepayers might be paying twice, which could be illegal.
      The county council consequently expressed its desire to establish arrangements, if lawful, for the concessionary travel system to be on a basis similar to that in Liverpool and other districts. We are still waiting to find out whether that is lawful. I hope that the Under-Secretary will give me an answer.
      Mr. Alton: I strongly support the latter part of the hon. Gentleman's argument. What is being done to local government is creating a licence for lawyers to make money. As a result of the legislation, more cases are going to court, and those who benefit are not the ratepayers but the legal profession.
      Mr. Roberts: I welcome that intervention. I must be careful. If the hon. Gentleman and I continue to agree with each other, those on Merseyside will not understand what is happening.
      I hope that the Under-Secretary will accept the new clause, because it will give to him and his colleagues the flexibility that they need to deal with the rate support grant settlement as the year progresses. It need not commit them
      736
      to extra expenditure, but it would show local authorities that the Government are not as vindicative as they appear to be.
      Mr. John McWilliam: I wish to put the debate on the new clause into its proper context. New clause 2 sought to make the legislation temporary and we know from the result of the Division on that clause that the Green Paper on the replacement of the rates and the Government's stated intention to abolish the rates are nothing more than a vote-gathering sham and were never intended to be more than that. If they had been otherwise, the Government would have accepted the new clause.
      We now have to deal with the rest of the nonsenses in the Bill. It is clear that there will be nothing to replace the Bill in the foreseeable future, that the Government have no intention of treating it as temporary legislation—as was at least implied—and that the Bill will be the law for the lifetime of this Parliament and Government. Let us have no illusions about that.
      6.45 pm
      One of my problems with the Government is that they are like the Hapsburgs—they have remembered everything and learnt nothing.
      Mr. Cartwright: It was the Bourbons, and they learnt nothing and forgot nothing.
      Mr. McWilliam: I am grateful for the results of the hon. Gentleman's classical education.
      Mr. Allan Roberts: Both the accurate quote and the quote used by my hon. Friend are applicable to the Government.
      Mr. McWilliam: I am grateful to my hon. Friend. The point that I am about to make is underlined by the interventions.
      The Government have had adequate time to study the Layfield report, which was published in 1976. Paragraph 46 of the report states:
      "Wages and salaries tend to rise faster than other costs in the economy. Between 1972 and the first half of 1975"—
      we did not have a Labour Government in power for most of that time—
      "this tendency was particularly marked. In those years the relative price effect, which we describe in paragraphs 29–32, was large, so putting local government finances under extra strain. Because of the relative price effect local authorities would have been obliged to increase their expenditure beyond the general rate of inflation even if'—
      and this is important—
      "they had only maintained their services at existing levels … and if the wages and salaries they paid had increased no faster than wages and salaries generally."
      It is bad enough that the Government have not taken that aspect into account, but that is compounded by Layfield's comment:
      "Wages and salaries in local government therefore increased faster than wages and salaries generally and so aggravated the problem."
      Why did those wages and salaries increase faster? The Layfield committee said:
      "the emphasis in national pay awards was on lower-paid workers, many of whom are employed in local government."
      The relative costs of local authorities are not directly related to the level of inflation and if the country decides that the low-paid deserve to keep up with inflation better than the higher paid the preponderance of low-paid

      737
      workers in local authorities means that the costs of local government are higher than the general level of wage inflation at the time.
      Layfield goes on to say in paragraph 47:
      "Any misjudgement of the likely amount of inflation in the coming year could lead to a serious shortfall in the necessary income. In turn that required greater rate increases in the succeeding year than the spending in that year might demand."
      It is not as if the Government did not have any evidence before the matter was discussed in Committee. They had the considered opinion of an emiment Royal Commission and they ignored it.
      The situation becomes worse in paragraph 48. It says:
      "Within their normal provision for contingencies and reserves, local authorities have only limited scope for meeting increased expenditure once the rates for the year have been set."
      If that was true in 1976, given that supplementary rates are to be banned under this Bill, it is even more true now. In 1976 the Layfield committee gave the Government the benefit of its advice.
      The final crunch in the Layfield report comes in paragraph 49, which says:
      "Further difficulties were caused for some authorities by the increasing tendency of aggrieved ratepayers to withhold rate payments pending the outcome of appeals".
      Given the level of uncertainty which the Government are building in to this legislation, that seems to be much more likely in the future than it was in the period leading up to the Layfield report of 1976—the good old days which many Conservative Members try to hark back to.
      To be fair, all Governments tend, at least initially, to put relatively unrealistic figures upon the projected level of inflation for the coming year. My criticism of the Government is that the word "relatively" is inadequate to describe the misinformation which they have attempted to perpetrate upon the populace in general and upon local government in particular.
      I disagree fundamentally with my hon. Friend the Member for Bootle (Mr. Roberts) when he says that our proposal is intended to put right errors of judgment. It is intended to do no such thing. It is intended to set the law right, to make the Bill workable. If it is not accepted, the Bill will not be workable.
      A local authority has an absolute duty to levy an adequate rate. If it tries to levy that rate on the basis of 4 per cent. and 9 per cent., local authorities know—and if they are honest the Government will accept—that that level of rate is inadequate. The only way that that shortcoming can be made up is for the Government to accept the responsibility which our proposal lays upon them. This has always been the case in Scotland, where we did not have access to supplementary rates. It was only that kind of provision which enabled us to stay within the law in levying a rate.
      The Government might be trying to make a political point. They might have been trying to lead people down a certain path, and if people did not go down that path—even if the Government had tried their best and failed—at least they would bail out the local authorities in the sense of levying an adequate rate.
      It is impossible under the Bill for any local authority to carry out its legal duty to levy an adequate rate. I say most strongly to the Minister that if he will not accept the new clause how will he make up the shortfall which as a result of Government mis-estimates—deliberate mis-estimates
      738
      in many cases—will occur in the income of local authorities to enable them to carry out their legal duty to levy an adequate rate?
      Mr. Giles Shaw: I rise, much to the sadness of Labour Members, to urge the House to oppose this new clause. As is so often the case with debates of this kind led by the right hon. Member for Manchester, Ardwick (Mr. Kaufman), a considerable amount of time has been spent, not on what the clause contains but on other matters which are considered germane to the discussion. That is understandable to those who served on the Committee.
      First, the right hon. Gentleman made some claims about the counties receiving substantially more recently than they should have done at the expense of other classes of authority. He probably missed the point that in the years prior to 1981–82 part of the counties' grant resources was paid as a resources element to the district, unlike block grant, that counted as part of the district's rate income and was therefore taken by the county through the precept.
      The simple arithmetic proposed by the right hon. Gentleman simply does not work. I suspect that that has happened once or twice during the Bill's progress. The relevant part of the resources element paid to the districts has to be added to the share received by the counties. When that is taken into account, it will be seen that there has been no major change in the counties' share of grant between 1980–81 and 1981–82. I sincerely hope that the right hon. Gentleman will accept that.
      The second matter raised concerned clause 4 and the question of the public expenditure control system and whether the Government were seeking to make further amendments to it. As a layman, looking at clause 4, I believe that the principles enacted, including the
      "principles applicable to all local authorities"
      are those that fairly operate.
      It is common in local authority financing to find that a number of local authorities do varying things with their income. Some are police authorities, some programme authorities and some education authorities. However, all authorities have to operate within budgets which relate to the principles of public expenditure. That is common to Governments of both parties. The detailed use of those words has been raised by my hon. Friend with the local authority associations.
      Discussions on the fine points of legal definition are continuing. If some clarification is recommended, it would be appropriate for an amendment to be made. That would be within the ambit of discussion. Clause 4 contains an acceptable definition of the principles applying to all local authorities. Indeed, a wide range of local authorities would seek to make exemptions anyway. Programme authorities are a typical case in point. Should there be any consequential change, an amendment will be tabled in another place.
      The hon. Member for Bootle (Mr. Roberts) slightly misconstrued the present position. He implied that there is no power to make a supplementary report in existing legislation. Under section 61 of the 1980 Act the Secretary of State has the power to make a supplementary report
      "at such time … as he thinks fit".
      However, neither the 1974 nor the 1980 Act makes it obligatory on him to use that power. I suspect that that is the point that the hon. Gentleman was wishing to make.

      739
      7 pm
      The statutory basis for rate support grant settlements in the 1980 Act is the same as that in the 1974 Act. At any given time the Secretary of State has to take into account present and prospective levels of pay and price increases which affect local government. He must take a prospective view of trends in expenditure.
      My right hon. Friend the Secretary of State, like his predecessors, has made clear in each RSG report the rates of increase which he has taken into account. Most increases in costs are in the hands of the local authorities and not of the Department.
      Mr. Allan Roberts: Does the Minister agree that the legislative framework for the rate support grant is the same as it was in making the settlement on assumptions of inflation and wage settlements? Does he agree that the proposed legislation takes away the power of local authorities to adjust for discrepancies in the basis on which the rate support grant is calculated? Is that not why the new clause is necessary? If local authorities cannot adjust in the way in which they have been able to adjust, surely the Government must be required to adjust.
      Mr. Shaw: I do not accept that. We are talking about the cash planning by which local authorities are controlled. That was the discipline used by the right hon. Member for Stepney and Poplar (Mr. Shore). The circular issued at the time of the last settlement promulgated by the right hon. Member for Stepney and Poplar incorporated a pay factor of 5 per cent. The circular stated:
      "Expenditure programmes should therefore be planned and managed on the basis that even if pay and prices increase faster than estimated, for the purposes of the cash limits, the grant will be held within the limits".
      Mr. McWilliam: I accept what the Minister has said, but I hope that he will accept that the difference between then and now is that my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) had the opportunity to put the matter right, whereas under this legislation the Secretary of State will not have the opportunity to put right his mistakes.
      Mr. Shaw: I accept that at that time the power of the supplementary rate was not available to the local authority and that that power was available to the Secretary of State. What is being suggested now is, in principle, identical. Local authorities are now budgeting for a full 12 months, just as Chancellors of the Exchequer and Governments must do. The discipline is no different. There is no reason why Opposition Members should assume that what is now required is an amendment to remove the cash control system.
      Opposition Members should bear in mind that the 1979 circular made it clear that the payment of additional grant to match the full increase in expenditure as a result of inflation is not automatic.
      I stress the message that even the Labour Government understood. The level of service provided by local government and elsewhere in the public sector must be determined by the finance available. It is the cash that counts. The new clause would run counter to a cash control policy and should be rejected.
      Mr. Graham: In the absence of my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman), I must reply. The Minister has made an unsatisfactory defence. As a result of what the Government are doing in
      740
      the Bill and in the Local Government, Planning and Land Act, local government is being made a nightmare not only for councillors but for ratepayers and the public in general. We are asking the Government to accept some reasonableness and flexibility in their control of local government. The Minister has demonstrated once again——
      Mr. Cowans: Will my hon. Friend reflect on the Conservative manifesto in which there was a pledge to give more democracy to local government? Is this the Conservatives fulfilling that pledge?
      Mr. Graham: This is a demonstration of the way in which the Government fulfil their pledges. There is a mockery and a sham about it. Even the Conservative-controlled Enfield council is aghast at what is happening. Only this morning did the hon. Members for Enfield, North (Mr. Eggar) and Southgate (Mr. Berry) and I receive letters from the town clerk, who complained bitterly about the impost in the legislation.
      My hon. Friends the Members for Bootle (Mr. Roberts), Newcastle upon Tyne, Central (Mr. Cowans) and Blaydon (Mr. McWilliam) and the hon. Member for Liverpool, Edge Hill (Mr. Alton) have considerable experience of local government. They have tried to explain the anguish of councillors in their areas and their belief that damage will be done to local government if the new clause is not accepted.
      The forecasts on which the Government based their settlements were made in November and December 1981, but the Government are looking ahead to the costs to be borne by councils in 1982–83. There is a gap of between 15 and 18 months. As such forecasts are obviously far out of tilt, we ask the Government to introduce a supplementary report. That can be done only in consultation with the local authorities. In this Bill and in others the Secretary of State has taken unto himself more power than any other Secretary of State. The Minister has made a bad job of defending the proposition. I have no hesitation in inviting my right hon. and hon. Friends to press the new clause to a vote.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 227, Noes 276.

      Division No. 119]

      [7.09 pm

      AYES

      Abse, Leo

      Callaghan, Rt Hon J.

      Adams, Allen

      Callaghan, Jim (Midd't'n &P)

      Allaun, Frank

      Campbell, Ian

      Alton, David

      Campbell-Savours, Dale

      Archer, Rt Hon Peter

      Canavan, Dennis

      Ashley, Rt Hon Jack

      Carmichael, Neil

      Ashton, Joe

      Cartwright, John

      Atkinson, N. (H'gey,)

      Clark, Dr David (S Shields)

      Bagier, Gordon A.T.

      Cocks, Rt Hon M. (B'stol S)

      Barnett, Guy (Greenwich)

      Cohen, Stanley

      Barnett, Rt Hon Joel (H'wd)

      Coleman, Donald

      Beith, A. J.

      Concannon, Rt Hon J. D.

      Benn, Rt Hon Tony

      Conlan, Bernard

      Bidwell, Sydney

      Cook, Robin F.

      Booth, Rt Hon Albert

      Cowans, Harry

      Boothroyd, Miss Betty

      Craigen, J. M. (G'gow, M'hill)

      Bottomley, Rt Hon A. (M'b'ro)

      Crowther, Stan

      Bradley, Tom

      Cryer, Bob

      Bray, Dr Jeremy

      Cunningham, DrJ.(W'h'n)

      Brocklebank-Fowler, C.

      Dalyell, Tam

      Brown, Hugh D. (Provan)

      Davidson, Arthur

      Brown, R. C. (N'castle W)

      Davies, Ifor (Gower)

      Brown, Ronald W. (H'ckn'yS)

      Davis, Clinton (Hackney C)

      Brown, Ron (E'burgh, Leith)

      Davis, Terry (B 'ham, Stechf'd)

      Buchan, Norman

      Deakins, Eric

      741

      Dean, Joseph (Leeds West)

      Mc Namara, Kevin

      Dewar, Donald

      McTaggart, Robert

      Dixon, Donald

      Mc William, John

      Dobson, Frank

      Magee, Bryan

      Dormand, Jack

      Marks, Kenneth

      Douglas, Dick

      Marshall, Dr Edmund (Goole)

      Dubs, Alfred

      Marshall, Jim (Leicester S)

      Duffy, A. E. P.

      Martin, M (G'gowS'burn)

      Dunn, James A.

      Maynard, Miss Joan

      Dunnet, Jack

      Meacher, Michael

      Dunwoody, Hon Mrs G.

      Mikardo, Ian

      Eadie, Alex

      Millan, Rt Hon Bruce

      Eastham, Ken

      Miller, Dr M. S. (E Kilbride)

      Edwards, R. (W'hampt'n S E)

      Mitchell, Austin (Grimsby)

      Ellis, R. (NE D'bysh're)

      Mitchell, R. C. (Soton Itchen)

      English, Michael

      Morris, Rt Hon C. (O'shaw)

      Evans, Ioan (Aberdare)

      Morton, George

      Evans, John (Newton)

      Moyle, Rt Hon Roland

      Faulds, Andrew

      Newens, Stanley

      Field, Frank

      Oakes, Rt Hon Gordon

      Fitch, Alan

      O'Neill, Martin

      Flannery, Martin

      Orme, Rt Hon Stanley

      Fletcher, Ted (Darlington)

      Owen, Rt Hon Dr David

      Foot, Rt Hon Michael

      Park, George

      Ford, Ben

      Parker, John

      Forrester, John

      Parry, Robert

      Foster, Derek

      Pendry, Tom

      Foulkes, George

      Penhaligon, David

      Fraser, J. (Lamb'th, N'w'd)

      Pitt, William Henry

      Freeson, Rt Hon Reginald

      Powell, Raymond (Ogmore)

      Garrett, John (Norwich S)

      Price, C. (Lewisham W)

      Gilbert, Rt Hon Dr John

      Race, Reg

      Ginsburg, David

      Radice, Giles

      Golding, John

      Rees, Rt Hon M (Leeds S)

      Graham, Ted

      Richardson, Jo

      Grant, George (Morpeth)

      Roberts, Albert (Normanton)

      Grant, John (Islington C)

      Roberts,Allan (Bootle)

      Grimond, Rt Hon J.

      Roberts, Ernest (Hackney N)

      Hamilton, W. W. (C'tral Fife)

      Roberts, Gwilym (Cannock)

      Harrison, Rt Hon Walter

      Robertson, George

      Hattersley, Rt Hon Roy

      Robinson, G. (Coventry NW)

      Haynes, Frank

      Rodgers, Rt Hon William

      Heffer, Eric S.

      Rooker, J. W.

      Homewood, William

      Roper, John

      Hooley, Frank

      Ross, Ernest (Dundee West)

      Horam, John

      Rowlands, Ted

      Howell, Rt Hon D.

      Ryman, John

      Howells, Geraint

      Sandelson, Neville

      Hoyle, Douglas

      Sever, John

      Huckfield, Les

      Sheerman, Barry

      Hughes, Mark (Durham)

      Sheldon, Rt Hon R.

      Hughes, Robert (Aberdeen N)

      Shore, Rt Hon Peter

      Hughes, Roy (Newport)

      Silkin, Rt Hon J. (Deptford)

      Janner, Hon Greville

      Silkin, Rt Hon S. C. (Dulwich)

      Jay, Rt Hon Douglas

      Silverman, Julius

      Jenkins, Rt Hon Roy (Hillhead)

      Skinner, Dennis

      John, Brynmor

      Smith, Rt Hon J. (N Lanark)

      Johnson, Walter (Derby S)

      Snape, Peter

      Johnston, Russell (Inverness)

      Soley, Clive

      Jones, Rt Hon Alec (Rh'dda)

      Spearing, Nigel

      Jones, Barry (East Flint)

      Spriggs, Leslie

      Kaufman, Rt Hon Gerald

      Stallard, A.W.

      Kilfedder, James A.

      Stoddart, David

      Kilroy-Silk, Robert

      Stott, Roger

      Kinnock, Neil

      Strang, Gavin

      Lamborn, Harry

      Straw, Jack

      Leadbitter, Ted

      Summerskill, Hon Dr Shirley

      Leighton, Ronald

      Taylor, Mrs Ann (Bolton W)

      Lestor, Miss Joan

      Thomas, Mike (Newcastle E)

      Lewis, Arthur (N'ham NW)

      Thomas, Dr R. (Carmarthen)

      Litherland, Robert

      Thorne, Stan (Preston South)

      Lofthouse, Geoffrey

      Tilley, John

      Lyon, Alexander (York)

      Tinn, James

      McCartney, Hugh

      Torney, Tom

      Mc Donald, DrOonagh

      Varley, Rt Hon Eric G.

      McKay, Allen (Penistone)

      Wainwright, E. (Dearne V)

      McKelvey, William

      Wainwright,R.(ColneV)

      MacKenzie, Rt Hon Gregor

      Walker, Rt Hon H.(D'caster)

      Maclennan, Robert

      Watkins, David

      McNally, Thomas

      Weetch, Ken

      742

      Wellbeloved, James

      Winnick, David

      Welsh, Michael

      Woodall, Alec

      White, Frank R.

      Woolmer, Kenneth

      White, J. (G'gow Pollok)

      Wrigglesworth, Ian

      Whitehead,Phillip

      Wright, Sheila

      Whitlock, William

      Young, David (Bolton E)

      Willey, Rt Hon Frederick

      Williams, Rt Hon A.(S'sea W)

      Tellers for the Ayes:

      Williams, Rt Hon Mrs (Crosby)

      Mr. J. Hamilton and Mr. L. Cunliffe.

      Wilson, Rt Hon SirH. (H'ton)

      Wilson, William (C'try SE)

      NOES

      Adley, Robert

      Dunn, Robert (Dartford)

      Aitken, Jonathan

      Durant, Tony

      Alexander, Richard

      Eden, Rt Hon Sir John

      Alison, Rt Hon Michael

      Eggar, Tim

      Amery, Rt Hon Julian

      Elliott, Sir William

      Ancram, Michael

      Emery, Sir Peter

      Arnold, Tom

      Fairbairn, Nicholas

      Aspinwall, Jack

      Fairgrieve, SirRussell

      Atkins, Robert (Presfon N)

      Farr, John

      Atkinson, David (B'm'th,E,)

      Fell, Sir Anthony

      Baker, Kenneth (St. M'bone)

      Fenner, Mrs Peggy

      Baker, Nicholas (N Dorset)

      Finsberg, Geoffrey

      Banks, Robert

      Fisher, Sir Nigel

      Beaumont-Dark, Anthony

      Fletcher, A. (Ed'nb'gh N)

      Bendall, Vivian

      Fletcher-Cooke, SirCharles

      Benyon,W. (Buckingham)

      Fookes, Miss Janet

      Berry, Hon Anthony

      Forman, Nigel

      Best, Keith

      Fox, Marcus

      Bevan, David Gilroy

      Fraser, Peter (South Angus)

      Biffen, Rt Hon John

      Fry, Peter

      Biggs-Davison, SirJohn

      Gardiner, George (Reigate)

      Blackburn, John

      Gardner, Edward (S Fylde)

      Blaker, Peter

      Garel-Jones, Tristan

      Body, Richard

      Gilmour, Rt Hon Sir Ian

      Bonsor, Sir Nicholas

      Glyn, Dr Alan

      Bottomley, Peter(W'wich W)

      Goodhart, Sir Philip

      Bowden, Andrew

      Goodhew, Sir Victor

      Boyson, DrRhodes

      Goodlad, Alastair

      Braine, Sir Bernard

      Gorst, John

      Bright, Graham

      Gow, Ian

      Brinton, Tim

      Grant, Anthony (Harrow C)

      Brittan, Rt.Hon.Leon

      Gray, Hamish

      Brooke, Hon Peter

      Greenway, Harry

      Brotherton, Michael

      Griffiths, E. (B'ySt.Edm'ds)

      Brown, Michael (Brigg &Sc'n)

      Griffiths, Peter Portsm'th N)

      Browne, John (Winchester)

      Grist, Ian

      Bruce-Gardyne, John

      Gummer John Selwyn

      Bryan, Sir Paul

      Hamilton, Hon A.

      Buchanan-Smith, Rt.Hon.A.

      Hamilton, Michael(Salisbury)

      Buck, Antony

      Hampson, DrKeith

      Budgen, Nick

      Hannam, John

      Burden, Sir Frederick

      Haselhurst, Alan

      Butcher, John

      Havers, Rt Hon Sir Michael

      Cadbury, Jocelyn

      Hawksley, Warren

      Carlisle, John (Luton West)

      Hayhoe, Barney

      Carlisle, Kenneth (Lincoln)

      Heddle, John

      Carlisle, Rt Hon M. (R'c'n)

      Henderson, Barry

      Chalker, Mrs.Lynda

      Hicks, Robert

      Channon, Rt. Hon. Paul

      Higgins, Rt Hon Terence L

      Chapman, Sydney

      Hogg, HonDouglas (Gr'th'm)

      Clark, Hon A. (Plym'th, S'n)

      Holland, Philip (Carlton)

      Clark, Sir W. (Croydon S)

      Hooson, Tom

      Clarke, Kenneth(Rushcliffe)

      Hordern, Peter

      Clegg, Sir Walter

      Howe, Rt Hon Sir Geoffrey

      Cockeram, Eric

      Howell, Rt Hon D. (G'ld'f'd)

      Colvin, Michael

      Howell, Ralph (N Norfolk)

      Cope, John

      Hunt, David (Wirral)

      Cormack, Patrick

      Hunt, John(Ravensbourne)

      Costain, SirAlbert

      Hurd, Rt Hon Douglas

      Cranborne, Viscount

      Jenkin, Rt Hon Patrick

      Critchley, Julian

      Jessel, Toby

      Crouch, David

      JohnsonSmith, Geoffrey

      Dean, Paul (North Somerset)

      Jopling, RtHon Michael

      Dickens, Geoffrey

      Kellett-Bowman, MrsElaine

      Dorrell, Stephen

      Kershaw, Sir Anthony

      du Cann, Rt Hon Edward

      Kimball,Sir Marcus

      Dunlop, John

      King, Rt Hon Tom

      743

      Kitson,SirTimothy

      RhodesJames, Robert

      Knight,MrsJill

      RhysWilliams,SirBrandon

      Knox,David

      Ridley,HonNicholas

      Lamont,Norman

      Rifkind,Malcolm

      Lang, Ian

      Rippon, Rt Hon Geoffrey

      Latham,Michael

      Roberts, M. (Cardiff NW)

      Lawrence,Ivan

      Roberts, Wyn (Conway)

      Lawson, Rt HonNigel

      Rossi,Hugh

      Lee,John

      Rost, Peter

      LeMarchant,Spencer

      Royle,SirAnthony

      Lennox-Boyd,HonMark

      Sainsbury,HonTimothy

      Lester, Jim (Beeston)

      St. John-Stevas, Rt Hon N.

      Lewis,Kenneth (Rutland)

      Scott,Nicholas

      Lloyd, Ian (Havant& W'loo)

      Shaw, Giles (Pudsey)

      Lloyd, Peter (Fareham)

      Shaw,Michael(Scarborough)

      Loveridge,John

      Shelton,William(Streatham)

      Lyell,Nicholas

      Shepherd,Colin(Hereford)

      McCrindle,Robert

      Shepherd,Richard

      Macfarlane,Neil

      Shersby,Michael

      MacGregor,John

      Silvester,Fred

      MacKay, John (Argyll)

      Sims,Roger

      Macmillan,Rt Hon M.

      Skeet, T. H. H.

      McNair-Wilson,M.(N'bury)

      Speed,Keith

      McNair-Wilson, P. (NewF'st)

      Speller,Tony

      Madel,David

      Spence,John

      Major,John

      Spicer, Jim (West Dorset)

      Marlow,Antony

      Spicer, Michael (S Worcs)

      Marshall,Michael(Arundel)

      Sproat,Iain

      Marten, Rt Hon Neil

      Squire,Robin

      Mates,Michael

      Stanbrook,Ivor

      Mather,Carol

      Stevens,Martin

      Maude, Rt Hon Sir Angus

      Stewart,A. (E Renfrewshire)

      Mawby, Ray

      Stewart Ian (Hitchin)

      Mawhinney,DrBrian

      Stokes,John

      Maxwell-Hyslop,Robin

      StradlingThomas,J.

      Mayhew,Patrick

      Taylor, Teddy (S'end E)

      Mellor,David

      Temple-Morris,Peter

      Meyer,Sir Anthony

      Thorne, Neil (IlfordSouth)

      Miller,Hal(B'grove)

      Thornton,Malcolm

      Mills,Iain(Meriden)

      Townend,John (Bridlington)

      Mills, Peter (West Devon)

      Townsend, Cyril D, (B'heath)

      Moate,Roger

      Trippier,David

      Monro,SirHector

      Trotter,Neville

      Montgomery,Fergus

      van Straubenzee,Sir W.

      Moore,John

      Vaughan, DrGerard

      Morris, M. (N'hamptonS)

      Viggers,Peter

      Morrison, Hon C. (Devizes)

      Waddington,David

      Morrison, Hon P. (Chester)

      Wakeham,John

      Mudd,David

      Waldegrave,HonWilliam

      Murphy,Christopher

      Walker, Rt Hon P.(W'cester)

      Myles, David

      Walker, B. (Perth)

      Neale,Gerrard

      Walker-Smith, Rt Hon Sir D.

      Needham,Richard

      Wall,SirPatrick

      Nelson,Anthony

      Waller,Gary

      Neubert,Michael

      Ward,John

      Newton,Tony

      Warren,Kenneth

      Normanton,Tom

      Watson,John

      Onslow,Cranley

      Wells,Bowen

      Oppenheim, Rt Hon Mrs S.

      Wells,John(Maidstone)

      Osborn,John

      Wheeler,John

      Page, Richard (SW Herts)

      Whitelaw,RtHon William

      Parris,Matthew

      Whitney,Raymond

      Patten,Christopher(Bath)

      Wickenden,Keith

      Patten,John (Oxford)

      Wiggin,Jerry

      Pattie,Geoffrey

      Wilkinson,John

      Pawsey, James

      Williams, D. (Montgomery)

      Percival,Sir Ian

      Wolfson,Mark

      Pink,R.Bonner

      Young,SirGeorge (Acton)

      Porter,Barry

      Younger,RtHonGeorge

      Prentice, Rt Hon Reg

      Proctor, K. Harvey

      Tellers for the Noes:

      Raison, Rt Hon Timothy

      Mr. R. Boscawen and Mr. D. Thompson.

      Rees, Peter (Dover and Deal)

      Question accordingly negatived.

    New Clause 5

      Accountability to Parliament
      "(1) The Commission shall undertake or promote studies of the impact on economy, efficiency and effectiveness in the provision of local authority services and in the financial management of local authorities of statutory provisions and of guidance and instructions issued to them by Ministers of the Crown.
      (2) The Comptroller and Auditor General shall have access to all documents and records held by the Commission relating to any such studies.
      (3) The Comptroller and Auditor General shall report to Parliament the results of his examination of any such documents and records, provided that he shall not in any such report refer to the affairs of any individual authority in a way which identifies that authority by name or otherwise.".—[Mr. Joel Barnett.]
      Brought up, and read the First time.
      Mr. Joel Barnett: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to take amendment No. 16, in clause 21, page 16, line 17 after "20", insert "or section (Accountability to Parliament)".
      Mr. Barnett: I hope and believe that the objectives of the new clause are the same for the Government, local authorities and the House of Commons—to ensure better value for money in public spending and also proper and more effective parliamentary control. The new clause is a limited, but important, step to take the House in some way in the direction that the Public Accounts Committee unanimously recommended in its report last year. That report commanded all-party support among nearly 300 hon. Members in early-day motion 252.
      The purpose of the new clause is to enable the Public Accounts Committee, through reports from the Comptroller and Auditor General, to report to Parliament on the spending of large sums of money that the House votes. For example, there is the 1982–83 rate support grant voted by the House, which will be over £10 billion. I believe that we can do that under the terms of the new clause without infringing the proper democratic rights of local authorities. I shall want to say a word or two about local authorities and their fears, which I recognise they have.
      New clause 5(1) states:
      "The Commission shall undertake or promote studies of the impact on economy, efficiency and effectiveness in the provision of local authority services and in the financial management of local authorities"—
      this is the important part—
      "of statutory provisions and of guidance and instructions issued to them by Ministers of the Crown."
      Therefore, that is a fairly narrow subsection.
      I make it clear that the subsection is narrow. I would have preferred to go further, but we have deliberately written the new clause in a way that should be acceptable. It seeks to ensure that the House has the opportunity to consider whether Government measures and guidance encourage efficient local administration or the reverse. That is what the new clause is about. That is why I say that it should command acceptance on both sides of the House. It is a question whether the financial arrangements set by Government are well designed to meet what Parliament and the Government have approved.
      The work does not have to be carried out by public sector or private sector auditors or by this or that type of

      745
      consultant. That is not an issue. The Public Accounts Committee has never argued that the work must be done by public sector or private sector auditors. I hope that we can remove that question from any argument.
      Personally, I very much regret the fact that, unfortunately, the way in which the debate has been conducted has given the impression that auditors are being treated as a sort of political football. Local authorities are being left, wrongly, with the impression that the auditors, whether private or public sector, are intent on intervening on policy issues. That is not what we are talking about. Auditors, consultants and others, who have specific skills, have the abilities to help local authorities, not to work against them and not to take political decisions that are rightly the responsibility of local authorities.
      Mr. Christopher Price: My right hon. Friend did not have the benefit of attending umpteen sessions of the Committee. Is he aware that it has been made clear by private as well as public auditors that they would very much resent being brought into this situation, so much so that they might refuse outright to be compulsorily appointed to audit a local authority if there were the slightest implication that they were there to do a political hatchet job on that local authority?
      Mr. Barnett: I cannot say that I am sorry that I did not sit through those sessions, day and night in Committee, having done too much of that on Finance Bill Committees over the years. I am glad to hear my hon. Friend's comments because I know from colleagues in the profession that they do not want to become involved in policy-making decisions.
      The difficulty is that local authorities feel that achieving greater efficiency in the spending of money is synonymous with cutting expenditure in total. That does not follow. The total level of expenditure is a matter for Government and local authorities. Within a certain level of expenditure better value for money will help local authorities that want more expenditure. More expenditure will be available through the proper and more efficient use of the money at their disposal. I hope and believe that local authorities will welcome the new clause and the direction in which we are seeking to move.
      I am sorry that we are not going further. This will be borne out by my colleagues on the Public Accounts Committee. When witnesses from the local authorities came before the Committee it was clear to us that they were under the misapprehension that the Comptroller and Auditor General was part of the Executive. They did not see him as the independent figure that he is, although the Public Accounts Committee would prefer it if he were appointed in a different way. He is wholly independent of the Executive and of Parliament. He is an independent man—one day that person may be an independent woman—who would not intevene on policy matters affecting local authorities.
      For the reasons that I have given I believe that local authorities will benefit from the studies that the Comptroller and Auditor General would be enabled to undertake under the terms of the new clause. In that way a Department's actions vis-a-vis local authorities—that is to say its statutory provisions or guidance—will be able to be properly checked by the Comptroller and Auditor General. Reports will be made to the House of Commons
      746
      through the Public Accounts Committee. That can only be to the benefit of local authorities rather than to their disadvantage.
      Therefore, new clause 5(2) provides access to documents for the Comptroller and Auditor General. Again I make it clear that it is nothing like a broad and general access. Subsection (2) states that that access is severely restricted to documents related to the studies that have been referred to in subsection (1). It is not general access either to the books and records of the local authority's auditors, or to the books and records of the local authority. Therefore it is narrow and restricted access.
      New clause 5(3) specifically provides that the Comptroller and Auditor General will not be able to report on any individual local authority. That is rightly a matter for the audit commission and local authority auditors. That is their function, and not that of the House, or the Comptroller and Auditor General. I know from my experience as chairman of the PAC that the obligation of the Comptroller and Auditor General to report to the House of Commons, by convention through the Public Accounts Committee, will ensure that the report will not be treated in a manner that would harm local authorities. I know that my predecessor, the right hon. Member for Taunton, (Mr. du Cann), will agree.
      7.30 pm
      Having said that, I understand the worries of local authorities, whatever their politics. I have frequently said, both in this Chamber and outside the House, that their fears are very much misplaced. We seek to help them achieve greater efficiency, not to hinder them or involve ourselves with their policy-making decisions. No one is suggesting that the Comptroller and Auditor General and his staff should duplicate the work of the audit commission and its staff. The new clause does not suggest that. It is designed to help local authorities, and in so doing, help the taxpayer and ratepayer.
      The new clause does not go as far as I know that ray colleagues on the PAC would like. I should like it to go much further. However, it is a modest but important step in the right direction.
      Mr. King: The right hon. Gentleman said that he would like to go much further. Does he mean much further in the direction of local authorities or in other aspects of the possible role of the Comptroller and Auditor General? It is important to put that on record.
      Mr. Barnett: There are two separate issues. First, as the right hon. Gentleman knows, there is the wider question of general access for the Comptroller and Auditor General to wherever public money goes. That is strongly supported by myself and nearly 300 members on both sides of the House. Secondly, although this is a limited new clause, I would much prefer that this House should go along with our recommendations in relation to local authorities. If the whole aspect were covered by a national audit office there would be better opportunities for pooling and sharing ideas and training, and for ensuring that the House was better advised and better able to obtain effective control of public money. However, I make it clear that that is not in the new clause. It is a narrow new clause.
      I hope that the House and the Government will accept the new clause as a useful first step. However, I do not

      747
      intend to stop here, although I must do so as it is a local government Bill with limited opportunities for amendment. The PAC believe that there is much more still to be done. It is an important step for two reasons. It will help local authorities and Governments to obtain better value for money, as the House intended. It will provide better accountability to the House of Commons. I hope that that is not a party political issue but one that all hon. Members will support as a means of proper and effective control over the Executive. The new clause does not undermine the principles of the Bill—which some of us may not like for other reasons—or the Government's plans on policy. Therefore, I ask the House to support the new clause, and the Government to accept it.
      Mr. Edward du Cann: In the course of his admirable and lucid explanation of the new clause, the right hon. Member for Heywood and Royton (Mr. Barnett) laid strong emphasis on its constructive purpose. I am sure that that was entirely appropriate and right. He was also right to make the point that we are dealing with a relatively limited aspect of a campaign about which he feels, I know, as strongly as I do—the opportunity to make certain that the House has, on a continuous basis, adequate information with which to supervise the activities of the Executive.
      I am pleased to be able make common cause with the right hon. Gentleman about this limited matter. It involves a principle that I believe to be important—that the House of Commons, which is accountable to the public, should be able to follow public money wherever it is spent, to decide how well it is spent and to publish its findings so that the public in general may judge the situation. I believe that that is essentially a practical and constitutional principle about which we have been too careless in the past. The process is essential for economy and efficiency in public expenditure, as the right hon. Gentleman also argued.
      Total expenditure in 1982–83, as the Chancellor announced recently, is planned to rise to £114,900 million in cash terms—9 per cent. higher than the outturn for the previous year, 1981–82, when the figure was £105,000 million. Provisional planning totals shown in the White Paper show that spending in cash terms for 1983–84 will rise to £121,000 million and in 1984–85 to £128,000 million. The House will no doubt be astonished if the figures are as low as that. There is a downward pressure on public expenditure as a percentage of gross domestic product over this period—at any rate, that is forecast, but we shall see. Some may applaud that tendency but that is the matter, in truth, that divides us, or should be the chief argument between the two parties. However, We can all agree that the absolute figures are formidable, and so is the amount voted by the House for local government.
      Volume 2 of the Government's expenditure plans shows that in 1982–83, this current financial year, it is estimated that the total local authority expenditure will amount to no less than £23,300 million and the aggregate Exchequer grant for the same year will be no less than £14,000 million. The rate support grant will be over £10,000 million. Those are huge figures.
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      I quote one sentence from the recently published report of the Treasury and Civil Service Select Committee on efficiency in the Civil Service. This passage is worth quoting and underlining:
      "Very few areas of public expenditure are currently subject to accurate measurement of output."
      The burgeoning expenditure of central Government makes for extreme difficulty in making judgments on the competence of that expenditure. There are always physical difficulties. There is the obvious difficulty of time. That is why a number of us have argued that we should make opportunities now in different ways, hence the establishment of the Select Committees to provide Members of Parliament with better advice than hitherto. That is possible through the Select Committees with the appointment of professional advisers of one sort or another. That is precisely why hon. Members on both sides have argued so strongly, and will continue to do so, for an extension of the remit of the Comptroller and Auditor General. The House will then have better and more catholic information about what is happening. In parenthesis, I cannot resist saying, and I make no apology for doing so, that it is an impertinence that almost three years should have passed since the then Leader of the House on 26 June 1979 undertook that the Chancellor of the Exchequer would examine that proposal as a matter of urgency. Nothing has been heard since. That is why the right hon. Member for Heywood and Royton and I thought fit to table an early-day motion arguing for the extension of that remit, a motion that has been signed, as the right hon. Gentleman pointed out, by more Back Bench Members than any other motion so far in this Parliament. It is time that we received an announcement from the Government.
      Returning to the matter of judgments on the competence of expenditure, we know that in any event judgments on some items are bound to be subjective. Judgment on some items also is bound to be bedevilled by party views or prejudices. But other items in the catalogue of expenditure are competent. Their effectiveness can be accurately measured. I suggest that there are more such matters in the total of central Government expenditure than are currently accurately measured. In general, the same is true of local government. Of course there is a problem. To some extent local authorities are creatures of central Government—that is to say, much of what they must do is dictated by Whitehall. To a large extent they are prisoners of Whitehall, but not entirely. In any case, it must be right as a matter of habit to ensure that outturn is compared with forecasts to ensure that one local authority's costings and competence are compared with another' s.
      I dare say that right hon. and hon. Members can think of many other examples where it is right that better comparative information should be available. What I and the right hon. Member for Heywood and Royton complain about is that, in general, that is never available. Nor do the public—the ratepayers—see value for money obtained on specific projects as a general rule. I truly believe that if there were a better examination of what local government is doing with the money that Parliament votes, a considerable sum could be saved with, no doubt, considerable relief to the individual and the corporate taxpayer.
      I cite one example relating to the assertion that I have just made. It came into my hands just last week. It is a

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      report published by a ratepayers' group about the activities of one local authority. I shall not give its name, as it might be assumed that I was making a party point, which I am not. It is a matter of general interest.
      In the memorandum accompanying the report, the following assertions are made. The report shows that the authority concerned spends far more proportionately than any other council, yet the social need is less than that in many other council areas. It points to items of wasted expenditure which, in the several areas examined, might be cut by about one-third without any disadvantage to deprived persons. It goes on to say that the area concerned spends 50 per cent. more per head on services than the average inner borough. Last, but by no means least, if all local authorities were staffed at the level of this local authority, there would be a further 1¼ million council employees. Those examples show clearly the need for a more searching examination of what local authorities spend in the public's name and what is done with the money that Parliament votes to them.
      7.45 pm
      Mr. John Garrett: Does the right hon. Gentleman agree that he has quoted an extremely one-sided example which is typical of "studies" carried out by ratepayers' associations? Such studies should also take account of the effectiveness of local authorities—the extent to which the local communities' needs are met. If the purport of the new clause is not simply to find cuts in the administration of local government but to enable local government to give better service to the community for which it is supposed to be providing services, that is one of the best points in the clause.
      Mr. du Cann: I agree with the thrust of the hon. Gentleman's intervention. My right hon. Friends the Minister for Local Government and Environmental Services and the Secretary of State have made substantial attempts to control expenditure. Unfortunately, what they have done has inevitably been a fairly crude operation. As the hon. Member for Norwich, South (Mr. Garrett) argued, it is possible to suggest that that type of exercise may result in a diminution or a decrease in services. That is quite possible, and it may happen. In any case, many of us, while agreeing in general with the argument of my right hon. Friend the Secretary of State that central Government cannot be indifferent to what local authorities are doing in the context of the economy in general, feel some unease as to whether local democracy is being interferred with.
      Like the hon. Member for Norwich, South, I would say that there is a more scientific method of proceeding. It is right to argue for value for money studies. It is right to expose what is being done. It is right to make certain that there is a real evaluation of needs and an accurate scientific measurement of whether those needs are being satisfied economically or extravagantly, well or badly.
      That is the object of the new clause. It fits exactly with the idea that the hon. Member for Norwich, South has just advanced. Above all, those who spend money voted by the House of Commons must be accountable to the House. That is the whole purpose of the new clause. I very much hope that my right hon. Friend the Minister of State, my neighbour and friend for whose qualities I have such admiration, will think that what we are endeavouring to
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      do through the new clause is prudent, right and wise. I hope that he will accept the amendment or at least the principle behind it.
      Mr. Christopher Price: I am happy to join in with the remarks of my right hon. Friend the Member for Heywood and Royton (Mr. Barnett) and the right hon. Member for Taunton (Mr. du Cann). I am a passionate believer in the independence of local government, and it is essential for Parliament to retain this antibody in the body politic and to ensure that we do not swallow local government whole and deprive it of any sense of independence that it has. Nevertheless, we must vest in Parliament some broad control, rather than detailed control, of the effective spending of the money voted by Parliament.
      The new clause is the right compromise for the time being. It seems that the Government will bow gracefully to the clear feeling of the House that this is the right compromise. I am pleased that that will happen. One has to admit that it is a difficult area. There will always be tension between central Government and local government.
      It is a fact of political life in the United Kingdom that when one party takes control of central Government, the instinctive reaction—I believe it is a good instinctive reaction—of the thoroughly nonconformist, in the nonreligious sense, British people is to say, "The Tories are in Whitehall, so we shall put a different lot in our town hall just to stop that lot getting slightly too big for their rather substantial boots". We should do nothing in auditing and efficiency studies to invalidate that very good instinct of the British people which has been shown in succeeding elections since the Second World War.
      There is, however, a caveat which I put forward in Committee and wish briefly to reiterate now. I very much favour proper auditing. I also very much favour studies of the impact on the economy of efficiency and effectiveness in the provision of local government services. But I believe that those are wholly different jobs. One is the professional auditing of the local authority's accounts. The other is the making of studies. They must be kept separate.
      I say that in the context of the letter that the Standing Committee finally revealed to the public and had placed in the Library. Mr. Ken Sharp, head of the Government Accountancy Service, wrote about what he described under the heading of "soliciting" but referred to in the body of his letter as "touting". Mr. Sharp wrote in December 1981 to the 13 big accountancy firms in Britain:
      "I am writing to express my deep concern at a developing practice within the profession to 'tout' for public sector business. Recently two cases have been brought to my attention of quite unsolicited approaches by leading firms to Government Departments."
      In Committee, I cited a number of cases, including one in Birmingham in which one of the big 13 firms had moved from its auditing function to its study function, as it were, without anything going out to tender, giving the impression that the Government's desire to bring the private sector into public sector auditing in Britain was a method of introducing a further element of privatisation—I do not say that that was the Government's intention, but that was the impression given—and assisting the great accountancy firms in Britain to secure more business than they would otherwise obtain.
      I shall not go into the matter again at length, but it is worth quoting from a recent article in the magazine

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      Management Today entitled "Accountancy's Golden Goose" just to put the situation in context in relation to the big 13 private accounting firms, because the House should be aware of the types of person with whom it is dealing. The article says of the big accountancy firms:
      "Their current prosperity is breathtaking. The earnings of the upper tier of partners are of the order of £100,000 a year (some deemed to be earned abroad and so bearing tax benefits); an annual income of £1 million has been achieved by the managing partner of at least one of the four largest firms."
      We are therefore talking of moving into an area that has hitherto been dealt with by the district auditing services, none of whose members could ever have boasted an income of £1 million and most of whom live modestly in Petts Wood, if I may so put it. We are moving into this area a sector which is used to getting very substantial rewards from the private sector for its services.
      I say no more than that, but if the Comptroller and Auditor General is to have general supervision of the studies department of the new audit commission, I hope that that will prove something of a check on these characters—I know that most of them are solely devoted to their professional purposes, but some are keener on raising their incomes—so that the studies of local government do not bleed so much money out of local government that they do not give value for money. There was a spate of such studies in the 1960s when I was in local government and on many occasions I felt that ordinary councillors could have taken better decisions than highly paid accountants. That point should certainly be borne in mind.
      Broadly, I welcome the new clause and I hope that the Comptroller and Auditor General will monitor not only the studies but the degree to which they are necessary. I very much agree with my right hon. Friend the Member for Heywood and Royton. I hope that the Comptroller and Auditor General and the audit commission will show local government how to make spaces in its expenditure—not to make cuts in expenditure, but to create areas in which it can spend money more usefully.
      The Select Committee on Education, Science and Arts, of which I am Chairman, has just toured various areas of the country in an attempt to find ways of spending a little money on funding the arts in Great Britain. I believe that if the rest of local government expenditure were better supervised, the arts—the Cinderella, or poor relation of local government expenditure—could be better served within local government. I cite that as just one example.
      I welcome the new clause and I hope that if the Government cannot accept it as it stands they will give cast-iron pledges that they believe in the spirit of it.
      Mr. Michael Morris: I shall not follow the hon. Member for Lewisham, West (Mr. Price) except to say that his Select Committee might take a leaf out of the Public Accounts Committee's book and recognise that we do not have to travel anywhere to carry out our studies.
      As one who put his name to new clause 5 and who worked very closely with the Chairman of the Public Accounts Committee, the right hon. Member for Heywood and Royton (Mr. Barnett), I wish to emphasise certain points about the relationship between local government and Parliament. I do so as one who believes fervently in strong, effective and responsible local
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      government—perhaps because for one period of my career I had the privilege of being leader of the London borough of Islington, which by any yardstick is a difficult area to look after. I thought then, and I still think today, that there are two vital dimensions to successful local government.
      First, local government must recognise that it must work within the economic framework laid down by the Government of the day, whatever the policies of that Government. Secondly, however, the individual councillor is ultimately responsible to his own electorate within his own ward. The new clause violates neither of those two dimensions, but builds upon them.
      We have already listened to contributions from my right hon. Friend the Member for Taunton (Mr. du Cann) and the right hon. Member for Heywood and Royton. The House owes a great deal to both right hon. Members for the persistence with which they have followed this course and the progress that we slowly make along that path.
      When looking at the new clause, and recognising that our friends in local government have certain worries, it is worth reminding ourselves of what was contained in the first special report of the Public Accounts Committee. It is worth drawing to their attention appendix XXXIX of the Minutes of Evidence, where, in his memorandum, the Comptroller and Auditor General listed in paragraphs 14 to 18 what he called "Legitimate Parliamentary Interests".
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      In paragraph 14, he reminds us that local authority expenditure comes from powers derived from statutes from the Houses of Parliament. In paragraph 15, he reminds us that the Government have rightly taken an interest in "both efficiency and effectiveness" auditing but that equally no Government have to be accountable to Parliament for the effects of whatever intervention they choose to make. In paragraph 16, he reminds us that there is no threat to local democracy as Parliament is not suggesting that individual authorities should be accountable, rather the collective whole or a large section of it.
      The essential issues for Parliament are, first, whether the Government have taken appropriate and adequate measures to encourage efficient local administration of services that Parliament has empowered local authorities to run and, secondly, whether the financial arrangements and the Government's control of them will ensure that the money Parliament has voted is spent as approved.
      If my friends in local government are worried, I urge them to read that appendix. They will find 10 examples listed, the majority of which suggest that it would be to the benefit of local government if studies such as that were undertaken.
      How often have we who have served in local government reflected that Parliament—and this is true of all Parliaments—produces a Bill, gets it on the statute book and never adequately provides sufficient resources for local government to undertake the activity involved? How often have we complained about that? That would be a perfectly proper area for investigation.
      I do not intend to speak for long because the issue is clear. It is fair to say that in the evidence he gave to the PAC, my right hon. Friend the Secretary of State for the Environment concurred with the points raised in paragraphs 17 and 18 of appendix XXXIX. He agrees that they are the legitimate interests of Parliament.

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      The aim of every hon. Member should be better accountability to Parliament and improved efficiency in local government. I do not believe that anyone would quarrel with that as an objective.
      There is nothing in the new clause as presently drafted that affects ministerial accountability to Parliament. I readily admit that while the scope of the new clause is limited, it is an important step in the direction of the PAC's recommendations on the role of the C and AG and, indirectly, on Parliament's control of expenditure.
      I also note that for many months my right hon. Friend the former Leader of the House, now Foreign Secretary, has been wrestling with the response that the Government should make to the totality of our report. This is an advance on a small front. I hope that my right hon. Friend the Member for Oswestry (Mr. Biffen), in his new role, will urgently look at the remaining outstanding dimensions and come forward with some recommendations at an early date.
      Mr. John Garrett: I shall be brief. I speak only out of sentiment, because for me this represents the first crack in the Government's position after 10 years of campaigning. I did not originate this campaign. That began with a Dr. Normanton, who wrote a scholarly study showing that ours was the least progressive State audit system in the Western world. I was much impressed by what he said.
      I am glad to say that over the years our little caravan has grown. First, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) joined me to write a pamphlet about it in 1972. Later, we received the support of my right hon. Friend the Member for Heywood and Royton (Mr. Barnett) and the right hon. Member for Taunton (Mr. du Cann). Today, 280 hon. Members from both sides of the House support the reform of the Exchequer and Audit Department system.
      I congratulate my right hon. Friend the Member for Heywood and Royton and the right hon. Member for Taunton on tabling the new clause. It is modest, but they know as well as I do that it contains two important principles which are the beginning of a wedge to be driven into the Treasury's position. The first principle is:
      "The Commission shall undertake or promote studies of the impact on economy, efficiency and effectiveness."
      If the new clause is accepted, or if the Government bring forward another new clause that includes those words, it will be the first time that they have been included in a public stature. The economy provision has been there since 1861, but what really matters are the words "efficiency and effectiveness". The economy provision simply minimises spending and exercises good housekeeping. That is fairly innocuous. That is why our Comptroller and Auditor General and our Exchequer and Audit system are so innocuous. However, "efficiency" means examining costs in relation to output. That is interesting. The crucial provision is "effectiveness", which means studying costs in relation to output and ascertaining the effect on the community of providing or not providing a service. That information will be extremely useful to the Opposition. I believe that time and again we shall discover that while cuts may have made local authorities more efficient, they have destroyed the effectiveness of local government to provide for the local community. Therefore, the inclusion of "effectiveness" is crucial.
      The second principle is:
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      "The Comptroller and Auditor General shall have access to all documents and records held by the Commission relating to any such studies."
      That means that for the first time since 1861, audit can go outside Supply. The C and AG and his department can venture beyond money provided by the Supply procedure. Although all public expenditure came within the Supply procedure when the post of Comptroller was introduced in the 1860s, today only half of public expenditure is covered by the Comptroller, because non-Supply expenditure by local authorities, nationalised industries, quangos and so on has grown so much, particularly in the last 50 years.
      Once we have established that, it is difficult to deny the Comptroller access to other non-Supply expenditure, such as spending by private contractors, nationalised industries and others. This is a useful first step towards parliamentary accountability for all public expenditure.
      Next, we must follow the recommendations of no fewer than four Select Committees which said that the Comptroller and his staff should have the power to follow public expenditure wherever it may happen. After that, we need better information so that we can establish whether or not central Government, local authority and other public spending is effective. For that purpose, we need a change in the form of the accounts.
      Lo and behold, we have the Procedure (Finance) Committee sitting on that subject. I have no doubt that it will come forward with some fairly positive recommendations in the fullness of time. The Government may not want that, because they established the Committee for only one Session. That is a matter that we can deal with as we go along.
      The crucial thing is to make the Comptroller a servant of the House, as was intended by Gladstone. Over the years, the Treasury has drawn that power away from the House until, in the end, the Comptroller was virtually a servant of the Treasury, even though it was intended that he should be an Officer of the House. This is the first step towards a mass of reform that the House desperately needs if it is effectively to call the Government to account, and I welcome it.
      Mr. Michael Shaw: I am glad to take up the remarks of the hon. Member for Norwich, South (Mr. Garrett). Those of us who are members of the Public Accounts Committee have had the benefit of his views and we welcome and value them. He said that he was speaking only out of sentiment, but it quickly became apparent that he was speaking mainly out of enthusiasm. We must not rebuke him for that. However, I wondered whether he might be causing the Government to run away with the feeling that there is more in the new clause than they thought. I hope that my right hon. Friend will see nothing sinister in the clause. It is merely a small step forward and part of a steady progression.
      I wish to add my good wishes and congratulations to the Chairman of the PAC committee, the right hon. Member for Heywood and Royton (Mr. Barnett), and to my right hon. Friend the Member for Taunton (Mr. du Cann), who have worked happily together. This augurs well for the work of the Select Committees. Clearly they should work in harmony rather than go off on their own courses and sometimes crossing each other without proper consultation. It is good that consultation and joint purpose obviously exist.
      I welcome the new clause because I believe it right that the role of the Comptroller and Auditor General should be

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      extended. The hon. Member for Lewisham, West (Mr. Price) said that there would always be tension between local authorities and the Government. I think that that is true. However, the Bill seeks to make the auditor much more independent than he has been hitherto and it will be improved if the new clause is accepted. If local authorities understand that the purpose of the Bill is in part to give the auditor greater independence, they should welcome the measure. I see nothing in the new clause to frighten local authorities. The right hon. Member for Heywood and Royton has clearly outlined the restrictions and the limiting factors that feature in the clause.
      We do not wish to interfere with local government. However, I acknowledge that there are some who are still fearful about part III. They come to my surgeries and express the fear that there will be some form of political interference. I have sought to tell them on every occasion that that is not true, could not be true and is not intended to be true. That cannot be said too often.
      The House should be able to follow much more than it has in the past what happens to the money that it spends. It is not enough merely to follow inquiries along lines that have been laid down by the Departments. Obviously the Departments may not have been doing their job. If we examine only the Department's records, we shall often find it impossible to tell whether the job has been properly done.
      The new clause is a modest but important step and can do nothing but good. Local government need not have the slightest fear about it. There will be benefits for central Government, local authorities and Parliament from the new clause, which I hope my right hon. Friend will accept. Alternatively, he may see fit to table a similar proposal at a later stage.
      8.15 pm
      Mr. Durant: I agree with much of what my hon. Friend the Member for Scarborough (Mr. Shaw) has said. However, I have some anxieties and I think that they should be expressed. I agree with the first two terms that appear in the first subsection of the new clause, which are "economy" and "efficiency". It is the inclusion of "effectiveness" that brings us into the political arena. The determination of what is effective is a question of judgment and this is quite a delicate area. Local government has a slight anxiety about the inclusion of "effectiveness".
      If a Minister performs services for the State that we consider are ineffective, we have the right of redress at Question Time and in debate. If a local authority is found to be ineffective, it might be possible through the method set out in the new clause to produce arguments that the actions have not been effective, but there will be little redress. We are moving away from the parliamentary arena and the governmental arena to a statutory agent created by Parliament and, I accept, operated under laws passed by Parliament, but it remains a separate agency. That being so, it may make a political judgment of effectiveness.
      The hon. Member for Norwich, South (Mr. Garrett) expressed worry in an intervention that we might be getting rather near political decisions. He observed that a local authority might decide to do much more in one area of policy because of a political decision and might be
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      ineffective. He said that its actions might have the wrong effect and that they might be taken because of political decisions.
      Mr. John Garrett: Surely it is of interest to the House if a service that is provided widely throughout the country—for example, a service that is provided by local authorities to help the elderly—is ineffective. That might say something about the legislation under which it is being operated, or the capacity of local government or central government to manage. It is important for us to know whether a particular service is being managed ineffectively throughout the country. The purpose of the new clause is to make these matters comparative, which will be of great value.
      Mr. Durant: I agree with what the hon. Gentleman says, but we are still entering an area of political judgment. I am not attacking the clause, but I feel that we might be bringing in party political judgments.
      Mr. Joel Barnett: As the hon. Gentleman knows, I was not a member of the Committee that considered the Bill, so I do not know whether he supported the Bill as it stood. However, clause 9(1)(c) refers to "effectiveness" in the use of resources. I assumed that he agreed with that concept.
      Mr. Durant: We are in debate and I think that I have the right to raise an anxiety. I did not say that I intended to vote against the new clause. I was merely expressing anxieties that have been put to me by people in local government. I thought it right and proper that they should be brought to light. I do not wish to go to the stake on the matter or to move an amendment to the clause. It is not my intention to try to eliminate "effectiveness". I am merely saying that the anxieties to which I have referred should be considered by the Government as part of their reaction to the clause. It is "effectiveness" that gives rise to some anxiety. The other parts of the clause are apposite to what we are trying to do.
      The anxiety to which I have referred featured in debates in Committee. There was considerable debate about the political implications. The Opposition rightly probed the issue deeply and obtained pledges from the Government that they would table amendments to overcome the political implications. The Opposition pressed extremely hard. They felt that the audit commission would become involved politically. One or two Opposition Members referred to instances of the district auditor making pronouncements that they felt were political. This is a matter over which we shall have to exercise care. A large element of judgment is involved. I am in favour of the words "economy" and "efficiency", but I am slightly nervous of the word "effectiveness" and its implications.
      Mr. Graham: I wish to intervene briefly from the Opposition Front Bench to express our gratitude to my right hon. Friend the Member for Heywood and Royton (Mr. Barnett), the right hon. Member for Taunton (Mr. du Cann) and right hon. and hon. Members on both sides who have seized the opportunity presented at this stage of the Bill to demonstrate the need for the new clause. It remains to be seen whether the new clause eventually sees the light of day in its present form. I await the observations of the Minister. I wish also to see in what form the new clause returns to the House from the other place.
      What has been demonstrated in a non-party manner is the genuine desire of right hon. and hon. Members to

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      provide value for money in the oversight of public accounts. Political control in the House and in local councils changes frequently. It is clear, therefore, that the desire to provide value for money is genuine. Some good sense has been displayed by hon. Members on both sides. The Minister's words in Committee have already been translated into concrete deeds. I am sure that the right hon. Gentleman will have taken careful note of the feeling of the House that existing opportunities, which appear not to have been fully exercised, could be more effectively exercised instead of relying on the new role for the audit commission that appears to be in the mind of the Government.
      I have been impressed by the constant reminders to the Government to carry forward the commitments made—I believe in June 1979—by the then Leader of the House. Hon. Members on both sides are anxious to ensure that they provide value for money to their constituents and to the House. The title of the new clause "Accountability to Parliament" says it all. We want to be satisfied that, on those matters for which the House is accountable, the opportunity exists for hon. Members to scrutinise and improve the situation. Members of the PAC and of the Select Committee have demonstrated their complete grasp of the underlying themes that have run through the debate. I am pleased that hon. Members have stressed that there is no party animus in the matter. I know the Minister well enough to believe that he will take this opportunity to refashion the words of the new clause so that, when it returns to the House from the other place, it will serve our aims as Members of Parliament.
      Mr. King: I am grateful to the hon. Member for Edmonton (Mr. Graham) for his last comment. Had his right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) been speaking, he would no doubt have said that he knows the Minister well enough to know that when the words came back from the other place, they would need further amendment. Aside from that point, I am grateful to the right hon. Member for Heywood and Royton (Mr. Barnett) and to my right hon. Friend the Member for Taunton (Mr. du Cann) for the way in which both of them, as present and past Chairmen of the Public Accounts Committee, have presented the new clause to the House. I believe that the whole House is aware of the keen interest that the right hon. Member for Heywood and Royton has taken in the issues of accountability and the proper pursuit of the control of public money. The House is also aware of the interest taken by my right hon. Friend the Member for Taunton, his predecessor, in these matters. They are both keen campaigners.
      I am grateful to my right hon. Friend the Member for Taunton for his courtesy in informing me that he has to leave the Chamber early to chair a further meeting of the Treasury and Civil Service Committee. I wanted to get that on the record in case any hon. Members thought that my right hon. Friend had walked out in the middle of my speech in disgust or some other form of disapprobation. I am not sure whether what I intend to say now will not make him walk out even faster in genuine disapprobation so that no one will know whether he is going to his Committee. I understand, however, that my right hon. and learned Friend the Chancellor of the Exchequer hopes to respond shortly to the points that my right hon. Friend has pressed on me together with other points. I hope that this will be possible.
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      I agree with the remarks of the hon. Member for Edmonton that we are concerned about value for money. All hon. Members who served on the Committee are, I think, flattered by the distinguished presence of other hon. Members interested in issues of public accountability. We have been seeking to deploy the argument that these are not party political issues. The hon. Member for Norwich, South (Mr. Garrett) made the point that they are as much in the interest of an authority that is anxious to minimise the demands on its ratepayers as in the interest of an authority wishing to seek how it can expand its services for a given sum of money. Value for money is an issue in which all hon. Members should take an equal interest.
      I should like to refer to the original proposals of the Public Accounts Committee, the hearings it held and the local government evidence that was given. The right hon. Member for Heywood and Royton made the point that he thought that many local authorities or the associations may have been under a misapprehension that the Comptroller and Auditor General was in some way part of executive Government. That may be a misunderstanding among some representatives of local authorities. There are others who are under no illusion about what the Comptroller and Auditor General represents. They see him as being associated with the Public Accounts Committee and with Parliament and unacceptable on that basis. I say this straight. The right hon. Gentleman will know that this is a view advanced by local authorities. I shall refer to it later. They feel that there is a constitutional implication and that their position is in some way compromised through the Comptroller and Auditor General.
      The right hon. Member for Heywood and Royton referred to his interest in this matter and called the new clause modest. I thought that some of his case was damaged by his hon. Friend the Member for Norwich, South who had me really worried and I was almost inclined to take the advice to leave the Chamber in a hurry. The right hon. Member for Heywood and Royton added that he would have preferred to go further. I picked him up on that because it is important, if we are to find an acceptable solution to the problem—and we cannot ignore the attitude of the local authorities—that the issue of "the thin end of the wedge" and "seeking to go much further in this direction" is put on record. It obviously behoves the Government to make it quite clear what they feel is acceptable so that we do not arouse further concerns. I am talking specifically about local authorities and local government and I am leaving aside certain other targets that it would not be proper for me to comment about, although the right hon. Gentleman might have had them in mind.
      8.30 pm
      We listened to the background of the debate, which has been much worked in the past. We had a historical summary from the hon. Member for Norwich, South, who said that he was speaking out of sentiment. I was struck by the fact that this was not a sentiment shared by the previous Labour Government who made it clear that they rejected the approach of the Comptroller and Auditor General having a responsibility to local government.
      I know that we have to be careful about making party political points these days but I am intrigued to see that the official Opposition are supporting this amendment. The hon. Member for Edinburgh, Central (Mr. Cook) seemed to make it abundantly clear in the early debates on the

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      previous report of the Public Accounts Committee that this was in no sense the view of the Opposition, and I understood that he was speaking for them. They did not seem to think that this was a proper position. It may be that speaking from the Opposition Front Bench is not necessarily speaking for the official Opposition, although that can lead to misunderstanding.
      The hon. Member for Edinburgh, Central said:
      "I do not deny that there is a role for more efficiency and effectiveness audits of local authorities, but if we attempt to achieve that effectiveness audit through an official operating in a closer relationship to Parliament and therefore to the Government, it will be resented by local authorities."
      That is correct and no hon. Member need be in any doubt about the extent to which that would be resented. He went on:
      "Nothing is more likely to cause resentment within local authorities than the suggestion that Parliament should ultimately be in charge of an efficiency and effectiveness audit of local authorities."
      Mr. Christopher Price: I take the statement as a whole but the Minister can take it from me that it is the "and therefore to the Government" bit that worries local authorities because they have hitherto associated Parliament with Government. I agree with him that if it were true that the Comptroller and Auditor General were an agent of Government I would not be in favour of the amendment. It is the hope of some of us that we can settle this with Parliament and Government. That gives us, who know people in local government, the conviction that we could persuade them that a parliamentary C and AG would be acceptable, whereas a governmental one would not.
      Mr. King: That may be the hope. I do not want to rehearse all the columns of this Official Report but the right hon. Member for Heywood and Royton tried to make that point to his hon. Friend, who said later:
      "I think my right hon. Friend will admit that he has failed to persuade the local authority associations of that view."
      It would be simplistic to suggest that that is the sole concern of local authorities. I agree with the hon. Member for Lewisham, West (Mr. Price) that they see a constitutional issue in the role of Parliament being distinct from the role of Government in this matter.
      I am not advancing any of the arguments. I happened to notice earlier that, in an intervention by my hon. Friend the Member for Northampton, South (Mr. Morris) in that debate, he asked whether the hon. Gentleman did not think there was
      "something strange in a situation where the chief inspector of audit prepares an annual report of two-thirds of the finance which is voted by Parliament and that report is not even laid before the House?"—[Official Report, 30 November 1981; Vol. 14, c. 105–6.]
      I think that will strike a chord with the hon. Member for Lewisham, West. Perhaps he will understand why I am not sympathetic to efforts to try to improve the arrangements when I say that I sent that report to the chairman or leader of every local authority in the country. I am sure many of them read it and studied it with care but the only acknowledgment that I had came from one chairman, out of 413 authorities, who complained about the cost and the quality of the envelope in which I sent it. That sometimes leads Ministers to believe that there are possible changes in the arrangements that might be made.
      This is a much-rehearsed route. The previous Government rejected the approach. This Government
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      considered representations and in the report on "The Role of the Comptroller and Auditor General" presented to Parliament in July 1981, rejected that role. They made it clear that in the case of local authorities they preferred the route of the audit commission. This is the route that we have put forward in the Bill. We rejected the route of the Comptroller and Auditor General.
      Nothing daunted—and anyone who knows the right hon. Member for Heywood and Royton knows that he is not often daunted—he has returned with a variant to involve the Comptroller and Auditor General. With his usual courtesy, the right hon. Gentleman informed my right hon. Friend and me by letter on Tuesday of last week that he would be tabling this amendment. We received it on Wednesday, and only now are we beginning to get the responses of the local authority associations to it. Obviously the right hon. Gentleman would have expected us to consult them.
      Hon. Members will have received a briefing from the Association of Metropolitan Authorities saying, effectively, that the first subsection is welcomed by the association but that the next two are not. The association says in effect that it is a good idea for there to be studies by the audit commission of the impact of Government policies on the effectiveness, efficiency and economy of local government, but a very bad idea if the Comptroller and Auditor General is then allowed access to those studies. That is the provision about which the association is concerned.
      I have a letter, which I think may have gone to other hon. Members who served on previous Standing Committees, from the Association of District Councils, which is rather more hostile to the clause. I understand that the Association of County Councils has not formed a view other than that the proposal is novel and that it needs time to consider it. It may be attracted by subsection (1) if not by the other parts of the clause.
      Right hon. and hon. Members will appreciate that the Government have certain problems in knowing how to deal with the new clause. We understand the concern about these issues and the arguments that have been advanced about Parliament's proper concern with the expenditure of public money and the proportion of public expenditure voted by the House that is involved in local government expenditure. That concern is real, and my right hon. Friend the Member for Taunton quoted the figures. Obviously there is some substance in this and a principle to which the Government are not unsympathetic. However, there are details in the new clause that need attention.
      I say immediately that it is an important new clause. It breaks new ground. It provides in statute for outside appraisal of the effects of Government policies and it gives the Comptroller and Auditor General a role in relation to local authorities which he has not had previously.
      We did not discuss these aspects in Committee, and we have not had an opportunity for any detailed consultations with the local authority associations. The Government have some sympathy with the suggestion that the Comptroller and Auditor General should have the right to examine the commission's studies showing the effect of Government policies on value for money, but our concern is partly about subsection (2).
      Mr. McWilliam: The right hon. Gentleman has just said that this principle had not been put forward in

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      Committee. However, he has to accept that I tabled detailed amendments covering this principle and extending it all the way through the Bill. We discussed the matter in detail in Committee.
      Mr. King: The proposals are well rehearsed about the Comptroller and Auditor General as an alternative to the audit commission. If the hon. Gentleman says that he moved specific amendments providing that the audit commission should have a duty to prepare studies on the impact of Government policies and that the Comptroller and Auditor General should have access to those studies, I withdraw what I said. But I am not aware that the matter was raised, and I think there must be some misunderstanding about it. I do not want to mislead the House. However, it is not a crucial part of my argument.
      The concern that arises is about access to documents, and that is dealt with in subsection (2). As the new clause is drafted, it could give the Comptroller and Auditor General access to the detailed papers of individual local authorities. This clearly could give rise to considerable concern. The hon. Member for Edinburgh, Central referred to the attitude of local government to the role of Parliament and the Comptroller and Auditor General.
      Secondly, there is the problem that the Secretary of State specifically precludes himself in schedule 1(3) from access to the detailed information. That paragraph precludes him from obtaining from the commission information relating to the discharge of its functions in respect of any local authority. An important point about accountability in the House is raised if the Comptroller and Auditor General is to have access to more detailed information than is available to Ministers, who may be accountable to Select Committees. We shall have to decide the right level at which informaion and access to documents would be appropriate.
      Another technical point is involved in the new clause. As it now reads, it would apply concurrent access to all the working papers. Clearly, that does not make sense. We believe that it should be consecutive. However, that is a point of detail.
      A further point is that we accepted an Opposition amendment to clause 20 stating that we should accept consultation not only with local authority associations but with organisations of workers, on the studies that would be done on economy, efficiency and effectiveness in local government, and comparative studies. If that were made a duty, there should be parallel consultation in this new clause, and it would be sensible to inquire into the provisions, guidance and instructions issued by Ministers, which might include consultation with Ministers by the audit commission.
      This is an important new clause, because it breaks new ground. It is a significant new step. However, I cannot recommend the House to accept it as it stands. If the right hon. and hon. Members who tabled the amendment were not to press it, I would give an undertaking that the Government see merit in its principle, but believe that it is inappropriate in its present form. I therefore propose that the new clause be withdrawn, on the understanding that the Government will then enter into immediate discussions in the light both of the substance of the new clause and of the further points raised in the debate, with a view to tabling our own amendment in another place that will achieve the main principle of this new clause but will cover the points of difficulty that I have mentioned.
      Mr. Joel Barnett: I want to get the matter absolutely clear and on the record. I note what the Minister of State said about the need for consultations and discussions. I understand that perfectly. However, the Minister of State then used the words "with a view to". I am very conscious of the use of language in these matters, as I know the right hon. Gentleman is. I should like from him a clear commitment—not "with a view to"—that he will give an undertaking. We are going through difficult times. By the time he has in mind, he may be Foreign Secretary. I do not know what he may be. This is a serious point. I want a clear commitment, not only on his own behalf but on behalf of the Government that, after his consultations, a new clause or an amendment that will achieve the main principles of this new clause will be tabled in another place. Without that, I am sure that all the right hon. and hon. Members who support the new clause—and the Public Accounts Committee—realise that there will be no other opportunity to take action, once the Bill leaves this place. I therefore want clearly on the record a firm Government commitment that after the consultations they will come back to this House, after amendments have been tabled in another place to achieve the main principles of this new clause.
      Mr. King: I am grateful to the right hon. Gentleman. As he said, I chose my words carefully. I entirely understand why he picked me up on the phrase "with a view to". Important issues, particularly about the degree of access to documents, have to be established, on which I hope to have full discussions with the right hon. Gentleman and other interested parties. Certainly, there will need to be consultations with local authority associations on the matter. If we can achieve agreement, so much the better. I hope that we shall reach agreement on the amendment that will be tabled. If we fail to reach complete agreement, we shall undertake to table an amendment that embodies the principle and approach of new clause 5. That will afford both to another place and to the House the opportunity to re-examine the question and to vote upon it. That is the most appropriate way. I understand the right hon. Member's concern that if nothing emerged there would be no further opportunity to deal with the matter. There is a timing problem. This is a major issue and we have been faced with a difficulty about time. I do not wish to deny the House the opportunity for a considered approach to what we believe is the right solution to the problem.
      8.45 pm
      Mr. Joel Barnett: I thank the Minister for those remarks. I think that it is now crystal clear that we shall have another opportunity to deal with the matter and that the Government—whoever is in charge at the time—will table an amendment or a new clause to ensure that.
      I hope that the consultations will win the local authorities' agreement. I understand their anxieties, but I think that they are misplaced. I hope that the debate will have assured local authorities that we have no wish for them to continue to be anxious. I hope that we have been able to persuade them on that score. It must be borne in mind that the Government have not always accepted everything that local authorities have wanted or not wanted to do. I hope that the consultations will go smoothly and

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      I shall be happy to take part in them with the Minister. I know that the right hon. Member for Taunton (Mr. du Cann) would do likewise.
      However, the responsibility for the new clause is not only mine. A number of right hon. and hon. Members on both sides of the House support it, because of the importance of the role of the Comptroller and Auditor General. Therefore, I do not wish lightly to withdraw such an important new clause. I should be willing to do so on the clear understanding and commitments that the Minister has given on behalf of the Government that he will table a new clause or amendments in another place to achieve the main principles of new clause 5. That is my understanding of the Minister's assurance. I hope that that will be acceptable to the House.
      Mr. Dick Douglas: Will my right hon. Friend accept that new clause 5. is a compromise on a compromise and that right hon. and hon. Members on both sides of the House who put their names to the new clause would be unwilling to compromise much further?
      Mr. Barnett: I am obliged to my hon. Friend. I am sure that the Minister will have noted his remark. We shall have an opportunity to debate the matter again. That is the important firm commitment that we now have. I made it clear that new clause 5 does not go anywhere near as far as the Public Accounts Committee or those who signed early-day motion 252 wanted. We are dealing with a fairly narrow point, although, as my hon. Friend the Member for Norwich, South (Mr. Garrett) rightly said, it is an important first step. It is on the clear understanding that there is a Government commitment to table an amendment in another place to achieve the main principles that are set out in the new clause that——
      Mr. King: I do not wish to mislead the House or resile from anything that I have said, but the right hon. Gentleman has referred to "main principles". The difficulty is that we shall need to have discussions, and we shall have to say what we think has been established. If we do not reach total agreement, we shall table an amendment setting out what we think will meet the purposes of the new clause. It will then be possible for the House to consider and debate the amendment.
      Mr. Barnett: I deliberately used the words "achieve the main principles", because the Minister used them. I hope that after the discussions, whether or not the right hon. Gentleman is able to get agreement with the local authority associations—I hope that he will, because I believe that their fears are misplaced—the House will have an opportunity to discuss the main principles of the new clause again. There is a substantial majority of hon. Members on both sides of the House in favour of not only the narrow new clause, but much more than that.
      On the basis of the clear undertaking and commitment from the Government, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 6

      SPECIAL CHARGING ORDERS
      '(1) In section 147 of the Local Government Act 1972 (expenses of principal councils) the following subsections shall be inserted after subsection (3):—
      "(3A) If in any part of a district the district council is exercising as principal one or more of the statutory functions held by the parish or community councils (as the case may be) in its district, and such function or functions is elsewhere in that district being exercised by one or more parish or community councils (as the case may be) the district council shall make such charging resolution as is described in subsection (3) above as is appropriate in all the circumstances of the situation.
      (3B) The Secretary of State may by order made by statutory instrument prescribe (a) the factors to be taken into account by the district council in making any charging order under subsection (3A) above and (b) the procedure by which any parish or community councils desirous that any such charging order be made may secure the making of an appropriate order.
      (3C) Subsection (3A) of this section shall not come into force until the first day of April in the year next after the year in which the Secretary of State shall have made the first order under subsection (3B) above."
      (2) In section 54 of the Local Government Planning and Land Act 1980 after subsection (8) there shall be inserted the following subsection—
      "8A Where 'relevant expenditure' includes sums payable under precept to the councils of parishes or communities the Secretary of State may by regulations made under section 113 of the General Rate Act 1967, provide for the transfer of the amount of block grant attributable to an such precept from the local authority to the council of the parish or community as the case may be.".'.—[Mr. Alton.]
      Brought up, and read the First time.
      Mr. Alton: I beg to move, That the clause be read a Second time.
      The new clause seeks to amend the Local Government Act 1972 and the Local Government, Planning and Land Act 1980. Its intentions are well known to hon. Members and they have been debated in Committee, on the Floor of the House and in another place. The objective is to give parish councils the opportunity of receiving some of the rate support grant which the Government give to district councils, but which is not always passed on to the parishes.
      The clause is similar to one moved during the passage of the 1980 Act. At that time Lord Bellwin gave various assurances and, bearing in mind the assurances that have just been given by the Minister for Local Government and Environmental Services, I hope that hon. Members will realise that ministerial assurances are not always what they appear to be. However, I hope that the assurance just given by the right hon. Gentleman will result in an amendment being incorporated in the Bill.
      Lord Bellwin said that the problem of parish councils would be considered. Unfortunately, no results have appeared and the Under-Secretary of State for Wales said in Committee that the objective of the new clause was an impossible task. That contradicts Lord Bellwin's assurances.
      I refute the suggestion that the proposal in the new clause is an impossible task. Perhaps the best reason for my view is that some district councils already do what the new clause suggests. They pass on part of the rate support grant to parish councils, and if it is possible for some to do that I do not see why it should not be possible for others to do it. Therefore, I do not accept that it is an impossible

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      task, though I agree that it is difficult and is not as easy as was suggested by the hon. Member for Bootle (Mr. Roberts), who proposed a similar new clause in Committee.
      The new clause would apply to many parish, town and community councils which have continued to press for changes in the law. The precepts of the 8,600 parish, town and community councils, which are wholly met from rates levied on the ratepayers of those councils, are taken into account in determining the block grant payable to the local district councils, but none of that relevant grant has to be paid to the parish council and it is not credited to the parochial council to enable the parish ratepayers to benefit. Instead, the district ratepayers benefit, even though they did not have to bear the initial expenditure. That is grossly unfair.
      There have been many previous calls to amend the legislation. My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) on 12 March 1979 asked the then Minister:
      "How can the hon. Gentleman possibly defend an arrangement under which expenditure earned by the decision of ratepayers in a parish to pay an additional rate should incur grant-aid on a general basis to the district council that does not need to be passed on to the parish? Does he recognise that a few district councils—fortunately, only a few—are actively opposed to the concept of parish councils and would much prefer parish councils to entrust all their functions to them and enable them, the district councils, to control all the grant-aid and for the parish councils to disappear?"—[Official Report, 12 March 1979; Vol. 964, c. 228.]
      The Minister said that he would consider that argument. However, since then, little has been done.
      My hon. Friend the Member for Colne Valley (Mr. Wainwright) wrote to me last week to say:
      "No Minister has ever attempted to defend this unfair situation, but the attitude has been 'wait till we have other legislation and we will include it then'."
      I have had more representations on this aspect of the Bill than on any of the other horrors perpertuated by the legislation. I have had representations from parish councils throughout the country.
      The Sussex Association of Parish Councils said:
      "Parish Councils have been inhibited from taking an initiative on local enterprises and spending money on them, because they know that although the amounts of their precepts are included in the calculation for Rate Support Grant, none of the Grant will be passed on to them."
      The Great Wyrley parish council said:
      "We … urge you to support the amendment"
      which I am proposing today
      "on the grounds of justice, as the precepts by Parish Councils are taken into account when calculating the District Council's entitlement to the Grant but the District is not compelled to pass on the Grant. Only a very few Districts do so under voluntary arrangements."
      The honorary secretary of the Derbyshire Association of Local Councils said:
      The Town and Parish Councils have fought long and hard since even before the 1972 Act for the grant to be paid to town and parish councils on the grounds of justice—their precepts, which are wholly met by parish ratepayers, are taken into account in calculating the district councils entitlement to grant but districts are not compelled to pass on the grant. Only a very few districts do so, under voluntary arrangements."
      The Yorkshire and Cleveland Councils' Association said:
      "Parish and Town Councils are the smallest tier of Local Government and without doubt the most economically efficient. With relatively modest calls on ratepayers' money they achieve marvellous results for those living within their area."
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      Mr. P. R. A. Newell, the secretary of the Wiltshire Association of Local Councils—it is interesting to note that the president of that association is the hon. Member for Devizes (Mr. Morrison)—said:
      "I have been asked to draw your attention to an amendment put down to the above Bill which would entitle Parish and Town Councils to receive an appropriate share of the rate support or block grant on their precepts."
      He hopes that I would support that. It is because of such representations, and those of my hon. Friends, that I decided to pursue this matter today.
      The Government have said that they have much sympathy with this general idea, but no Minister has ever tried to justify not doing anything about it. Therefore, I have, albeit reluctantly, picked up a suggestion made in the other place 18 months ago that the Secretary of State should make regulations as to how rate support grant attracted to district councils for parish councils expenditure should be passed on to the parish council. That is something which has been debated in the passage of successive local government Bills both by this and previous Governments.
      It is apparent, for example, in Wiltshire, that the district council will agree to make the appropriate payment only if there is legislation to force it to do so. The obvious iniquity of the present system is that parish councils are double rated. Parish ratepayers pay their parish rate and the district rate, and the rate support grant element designed for the parish is used to alleviate district council expenditure generally. Areas with active parish councils are subsidising those without them. This injustice works as a deterrent both to the initiative and the establishment of parish councils.
      Particularly now, when communities are breaking up for lack of community oriented work, the Government should respond to ensure that these efficient, locally based organisations receive adequate resources and encouragement. As one letter put it:
      "No Parish Council will eagerly undertake (in the low key and economic way which is their trade mark) new valuable local initiatives if the expenditure attracts rate support grant from which the Parish and its ratepayers get no benefit."
      9 pm
      The most recent survey by the National Association of Local Councils conducted in October 1979 produced 157 answers from 328 district councils with parish or community councils. The Association of District Councils advised its members not to reply to the questionnaire. Of the 157 which answered, 16 said that they paid the amount requested, 42 said that they gave grants of more than rate support grant resource element, 61 said that they gave less than their rate support grant resource element, two gave rate support grant resource and needs element and 38 gave nothing.
      There is no reason to suppose that the figures have changed in favour of parish councils. With the present squeeze the money is even less likely to be paid out. In Treasury terms what I am asking for is a small sum. For 1981–82 it represents about 0·16 per cent. of a total local government expenditure of about £36 million.
      The Government said in Committee that, if a way could be devised to force district councils to pay, they would adopt it. There is a solution in my proposal. It will allow the Secretary of State to make enabling regulations. Even if the Government will not accept the new clause, I hope that they will assure the House that a more acceptable amendment will be introduced in the other place.

      767
      I commend the new clause. Its purpose is to make parish, town and community councils masters in their own homes, to ensure that funds intended for their use are passed to them and to demonstrate that Parliament fully appreciates the valuable work of small councils which are rooted in their neighbourhoods.
      Mr. Oakes: I have sympathy with what the hon. Member for Liverpool, Edge Hill (Mr. Alton) said. Parish councils have tended to be the Cinderella of local authorities since 1972, but they are important.
      When a parish council expresses an opinion to a Member of Parliament, one knows that is the opinion of elected representatives, not a pressure group. Some parish councils have been adversely affected because the parish rate does not always go to the parish but is absorbed by a district council, in much the same way as some EEC grants go into the Treasury maw rather than into the areas to which they should be directed. Parish councils feel that acutely.
      The parish of Halewood in my constituency is big and rich. Ford operates there. The parish calls itself the town council and is regarded as such by many inhabitants. It does a tremendous amount of work in Halewood. It does more than Knowsley district council can do, because it is closer to the inhabitants and more akin to their needs.
      I listened carefully to the debate. I am not sure that the new clause is the appropriate way to deal with the difficulty. I accept the Minister's view on that aspect. However, it is not beyond the wit of Her Majesty's Government to introduce an amendment in another place if the new clause is unsatisfactory.
      The clause was drafted by laymen, not by Government draftsmen. Nevertheless, the Government should accept that there is a problem and that, if possible, it should be dealt with in another place. If not, the Government may be assured that hon. Members on both sides of the House will come back to this matter to do right by parish councils, whether they call themselves parish or town councils. Parish, town or community councils are often much nearer to the wishes of an area's inhabitants than the gigantic district councils created by the Local Government Act 1972.
      Many urban and rural district councils, which were councils in their own right until 1972, opted to become parish or town councils. The hon. Member for Edge Hill referred to an urban area. Halewood has a population of between 20,000 and 30,000. If it were not in the sort of urban areas that the hon. Gentleman and I represent, it would be regarded as a major county town.
      I accept that this may not be the right new clause, but I hope that the Government will listen carefully to what the hon. Member for Edge Hill said about it. I hope that the Government will introduce a new clause in another place which will do effectively what the hon. Gentleman wants. I assure the Government that if they do not do that, the Opposition—including the Liberal and Social Democratic Parties—will put considerable pressure on them. There will also be pressure from the Government's supporters because many of these parish councils are controlled by them. Such councils do an extremely good job, no matter who controls them.
      768
      I hope that the Minister will assure the whole House that an attempt will be made in another place to remedy the defects in the present system that have existed since 1972.
      Mr. Giles Shaw: I knew that, in moving the new clause, the hon. Member for Liverpool, Edge Hill (Mr. Alton) would deploy strong arguments in favour of making this rearrangement to improve the lot of parish councils.
      Two points arise at the outset. First, the Government, and I suspect hon. Members of all parties, were aware for some considerable time of the anxieties of district councils and parish councils on this matter. Secondly, Governments of both parties, for a considerable time, have tried to find an equitable and sensible way to resolve the matter.
      I spoke at the local councils association's national conference in Harrogate recently when this matter was obviously of major concern and a topic for debate. I explained that under the existing RSG procedure the formula, albeit not entirely accepted on both sides of the House, but at least designed to provide a system of local financing based on a careful assessment of need, and spread over a national network of a substantial number of districts, is not capable of being redesigned to deal with 10,500 parish councils.
      The hon. Member for Edge Hill will understand that if some of those parish or community councils have zero ratepayers—as I believe they do—several hundred have small numbers of ratepayers or electors. Therefore, it is beyond administrative possibility to extrapolate from the present RSG system to deal with each and every parish or community precept or requirement, given that they have such variable calculations and requirements.
      I admit that that does not alter the fact that parishes and community councils exist and that where they have the right to precept against district councils, in all fairness, they should be able to obtain from the precepting authority the correct sums of money to spend on the matters for which they have statutory power. I suggest to the hon. Member for Edge Hill and to the right hon. Member for Widnes (Mr. Oakes) that it is a major obstacle to try to redefine the rate support grant and GREA systems in order to make an equitable settlement for 10,500 additional authorities, given the substantial number of authorities currently covered by the mechanism. Therefore, it is not for want of seeking to find a way, but I must say to the hon. Member for Edge Hill that I do not believe that the existing mechanism works in that way.
      We come to the question of how the parish or community council can obtain satisfaction to do what is seeks to do on behalf of its parishioners or ratepayers. In that matter we have traditionally relied on the relationship between the parish or community council and its district. There is plenty of evidence that in most cases there is an amicable arrangement whereby under precept the district will provide the required sums. The parish seeks to say that the discounted amount, not the full amount, should be levied. It regards what it does as a second rate levied on individual persons. That is the burden of the remarks made by the hon. Member for Edge Hill.
      It is true that there is a double rating point for the individual elector, who is at one and the same time a ratepayer of the parish, a ratepayer of the district and a ratepayer of the county. That is not a new position for the ratepayer. Equally it is true that in many district council areas there is now a mechanism whereby the

      769
      council can take out from its formula for charging the rate the parishes over which it has rating authority and can rate differentially. That provides part of the solution to the problem of double rating. However, there is no mechanism at the moment that will prevent the possibility of an individual community or parish being double rated if the district seeks so to do.
      The question is whether we should amend in the manner laid down by the hon. Gentleman. Should we amend the Bill at this time to achieve that objective? We shall not be able to draft an amendment that will allow the RSG mechanism to go through to the 10,500 individual communities or parish councils in such a way that it will become an effective local authority financing mechanism. I do not believe that we can do that. It would not be right for me to seek to mislead the House by assuring it that we can design an amendment in another place that will carry out that intention.
      We must rely on the relationship between the parish or community council and its precepting district. In a number of cases that is an effective instrument whereby the parish can obtain what it wishes. That is the correct way to deal with the matter.
      9.15 pm
      We are not prepared to accept the amendment. I invite hon. Members to vote against it. That is not because what the hon. Member for Edge Hill asks is so controversial and unacceptable in political terms that we would not wish to meet it. With our system of local government financing it is not possible for us to design a mechanism, based on the RSG system, which would effectively deal with every community, parish or town council requirement.
      That cannot be a satisfactory answer for the hon. Member for Edge Hill. However, I suspect that a vast majority of local authorities and their associations feel, as the Government do, that with the present system that is as far as it can be taken. It would be wrong for us to seek to legislate further by enacting the new clause so eloquently moved by the hon. Member for Edge Hill.
      Mr. A. J. Beith: I am disappointed and depressed by the Minister's reply. My hon. Friend the Member for Liverpool, Edge Hill (Mr. Alton) will no doubt wish to reply to the Minister. However, as vice-president of the National Association of Local Councils, and having been concerned about this issue for a long time, I am amazed that Ministers in successive Governments are still unable to devise a solution to what is a relatively simple problem. It cannot be an insoluble problem, otherwise those district authorities—they are not in the majority—which now transmit the earned element of the rate support grant to their parishes would be unable to do so.
      If a district council can devise a way of calculating the right amount of money and transmitting it to the authority, surely the Department of the Environment can find a way of doing so. Heaven knows, it has overturned, changed, modified and refined the system of rate support grant so many times over the past few years that its officers must have been able to address their otherwise overburdened minds to this relatively limited but specific problem.
      The Minister has confused some aspects of the situation. He referred to parish council requirements and needs as if local councils were seeking additional government finance with which to support their services. That is not the case. We are talking about simple justice
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      and ensuring that Government grant already paid to district councils on the basis of parish council precepts actually gets to the parish councils, whose precept earned it in the first place. We want to ensure that the money that the Treasury allows for local government goes to the people who should get it. We are not talking about additional resources.
      Nor are we talking about 10,500 parish councils. There are only 8,600, many of which do not levy a rate. We are referring to the active parish councils. We are not even including some councils who raise ½p and 1p rates. We are concerned with councils that raise a larger sum. I ask the Minister to consider the injustice and ludicrousness of the position. For example, the inhabitants of a parish might decide that they need a desirable amenity in their village—perhaps a bus shelter or playing fields. A combination of voluntary effort and public funds brings that about. That is the unique feature of parish councils. They draw together voluntary effort and public funds. Ministers should be encouraging, not discouraging, that. The council gets its playing fields but has to raise a 4p or 5p precept to do so. That inevitably affects the rate support grant calculations that bring grant to the district council. Meanwhile, a neighbouring parish, which has an inactive parish council, does nothing.
      However, the district council decides that it does not want other people running the playing fields in its areas and that it would rather be in charge of them itself. When the rate support grant arrives in the treasurer's office the district council duly pockets the whole amount that was effectively earned by the precepting of the active parish. At the end of the day the district council says "By the way, we shall have a district council playing fields project", and the parish that was not prepared to lift a finger to help itself also benefits. The district council will say that it will provide the playing fields, with district council funds, using the precept that was earned by the parish that was helping itself. By that process it will believe that it is teaching the council that it would be far better off if it did not have a parish council at all.
      I remind the Minister that some district councils inherited parishes from rural parts of the districts that made them up in the first place, and some district councils do not like the elements of local democracy, especially mixed urban and rural areas where the urban centre calls the tune, not the parish that was formerly in the rural area. Some district councils are determined to depress and shut out parish councils altogether.
      That is a ludicrous thing to do to the very element in local government that can minimise rate-borne expenditure and can combine voluntary and rate-borne efforts effectively to provide community services. It is ludicrous that after years of examining the problem, civil servants in the Department of the Environment, numerous though they are, have still not produced a worthwhile basis for a solution satisfactory to Ministers. It is ludicrous that Ministers have been so dilatory that they have not demanded, before the next local government Bill comes before the House, a solution in the form of an amendment that will be acceptable to all.
      Mr. Giles Shaw: I cannot help reflecting that while the hon. Member for Berwick-upon-Tweed (Mr. Beith) wants central Government support to solve the problem it is

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      extraordinary that a parish in the district council community cannot prevail on the district council to see that the matter is voluntarily put right.
      Mr. Beith: The Minister betrays scant understanding of the relationship between parish and district councils in many areas. Some district councils are opposed to the very concept of the parish council. They do not welcome parish councils but wish to see district-run services right across their area. The district councils can pursue that policy with the Minister's aid and money and can find more expensive ways of providing services, and of using the money that he has provided instead of handing over the proper grant share to the parish councils, which are trying to do things as cheaply as possible.
      With his knowledge of various parts of the country, the Minister should know better. He should know that some authorities have a definite and strong objection to parish councils and would prefer that services were centralised and run on a grand and expensive scale. That does not make good local government. Good local government is where the community is able to contribute its effort and support, where public services are used sparingly in conjunction with the voluntary resources of the local community. The Minister is penalising such people to the benefit of authorities that want to run matters centrally.
      I cannot understand why the Minister wants to do that. That is why I am sorry that he has not applied his mind and made his civil servants apply theirs to this relatively simple problem.
      Mr. Alton: The Minister may now understand the strength of feeling of the Liberal Party on the matter and why I moved the new clause. I suppose that I am unlucky to represent an inner city constituency, which is not so beautiful as those of my right hon. and hon. Friends. I am equally unlucky that my constituency does not have any town councils. That is not the fault of the city council, as some of its members tried to introduce town councils but the mover was turned down by other members of the city council. That is unfortunate as there is a role in cities for the same form of authority that my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) described.
      It is regrettable that parish, town and community councils are treated with some disdain and contempt merely because they operate on a small scale. I am disappointed that the Government have not found a formula, or even shown themselves prepared to find a formula in another place, to rectify the obvious injustice whereby parish councils desperately doing their best are penalised because rate support is not handed on to them or because other parish councils in the area are not doing the same job and so they are being discriminated against.
      It cannot be beyond the wit of the officials in Marsham Street and the people who have given us rate support grant settlements, block grants, county councils, housing investment programmes, housing revenue accounts and the rest, to find some way to ensure that parish councils receive a fair return for the efforts that they put in, usually on a purely voluntary basis. People further on in local government, on district and county councils, are often reasonably well remunerated for their services, but members of parish, town and community councils usually
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      serve in an entirely voluntary capacity, giving their time free to the local community in the very best traditions of local government in this country.
      I am therefore glad that the right hon. Member for Widnes (Mr. Oakes) and my hon. Friend the Member for Berwick-upon-Tweed both supported the new clause and accepted that there is a desperate need to do something about this, but I am disappointed that the Minister could not give the assurances that we sought. I do not intend to press the matter to a Division today, but I hope that the Minister will understand the anger that is felt, not just by many Members of Parliament but by members of the National Association of Local Councils. I conclude by reading to the House the first paragraph of a letter from the secretary of that association. He says:
      "I hope you may feel able to support the new clause, whose effect is to entitle the 8,600 parish, town and community councils in England and Wales to their fair share of the block grant paid to the district councils."
      That is what the new clause is about—a fair deal for parish, community and town councils.
      I beg to ask leave to withdraw the new clause.
      Motion and clause, by leave, withdrawn.

    New clause 11

      METROPOLITAN POLICE BLOCK GRANT
      '1980 c.65. Section 64 of and Schedule 11 to the Local Government, Planning and Land Act 1980 (Special provision for Metropolitan Police District) shall be repealed and replaced by the following—
      "64(1) Block grant shall be payable to the Receiver for the Metropolitan Police District as if the Metropolitan Police were a local authority and, subject to subsections (2) and (3) below, any reference in this Part of this Act to the method of determining a local authority's entitlement to block grant shall be deemed to apply also to the Metropolitan Police.

      (2) Section 57 shall not apply to the Metropolitan Police.

      (3) The grant-related poundage and grant-related expenditure of the Metropolitan Police shall be determined by the Secretary of State.".'—[Mr. Squire.]

      Brought up, and read the First time.
      Mr. Squire: I beg to move, That the clause be read a Second time.
      It is not unusual for me to move an amendment concerning block grant—those with long memories will remember other occasions—but the House will be relieved to hear that my remarks today will be brief.
      One of the basic principles is that the block grant is paid to each authority—notwithstanding the comments made in relation to the previous new clause—so that the accountability of each authority to its ratepayers and electors is as clear as possible.
      However, there are two anomalies in the Local Government, Planning and Land Act which weaken the application of that principle. Under subsections (2) to (5) of section 56, the possibility is admitted of block grant for the GLC, a local education authority or a county council being paid to the rating authorities in the area. Those provisions were invoked in 1981–82 in favour of the GLC and the ILEA, but they are not to be invoked in 1982–83 in favour of those authorities or of any county council. The prospect of their use in future appears, at least at the moment, to be remote.

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      The other anomaly which the new clause seeks to tackle is in section 64 and schedule 11, in which provision is made for block grants in respect of the Metropolitan Police to be paid to the rating authorities in the Metropolitan Police district. That provision reduces the accountability of the rating authorities and of the Metropolitan Police. It also causes serious accounting problems for the rating authorities. They have to include in their budgets an estimate of the block grant that they are likely to receive in respect of the Metropolitan Police, but there is no way in which they can accurately estimate what that grant will be.
      At the time of the rate support grant settlement, the Secretary of State publishes his initial estimate of the block grant entitlement of each authority, given certain assumptions, but the amount that each authority actually receives depends not only upon various determinations made by the Secretary of State, which may change, and what the authority itself spends, but on what all other authorities spend. Estimates of block grant entitlement are thus continually revised during the grant year and cannot finally be known until some months after the grant year has ended, when the actual expenditure of all authorities and the final determination of the Secretary of State are known. The latter process has become known as clawback.
      Of course, all authorities have to suffer that uncertainty in respect of their own block grant entitlement, but rating authorities in the Metropolitan Police district have to suffer it not only on their own account but in respect of the block grant entitlement of the Metropolitan Police. This is unfair, and it can have either of two results. If the rating authority takes a pessimistic view of the ultimate block grant entitlement of the Metropolitan Police, it must rate higher than it would otherwise need to do to cover any possible shortfall in that entitlement. That is not only unfair on the authority's ratepayers, but contrary to public policy which requires rate increases to be kept as low as possible. It is at least contrary to the Government's declared policy in this respect.
      9.30 pm
      The second, obvious, alternative is that, if the rating authority takes an optimistic view, it may have to dip into its own reserves to cover any shortfall in the Metropolitan Police block grant, with the real possibility that those reserves may prove inadequate to meet this and other calls upon them.
      With part I of the Local Government Finance (No. 2) Bill enacted, and local authorities losing the power to levy a supplementary rate, an authority would have to ask the Secretary of State's permission to borrow to cover a revenue shortfall, thus putting itself—through no fault of its own—under the direct control of the Secretary of State.
      The London Boroughs Association considers that section 64 and schedule 11 of the 1980 Act should be repealed and replaced by the proposed new clause. Representations to this effect have been made to the Department of the Environment, which has undertaken to consider the point. However, the association is anxious that the present legislative opportunity should not be lost.
      The proposed section 64(2) provides that section 57 of the 1980 Act
      "shall not apply to the Metropolitan Police"
      as it deals with the method of determining the grant-related poundage and expenditure of local authorities in
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      accordance with principles to be applied to all local authorities. Those principles would not be relevant to the Metropolitan Police. The proposed section 64(3) provides for the Secretary of State to make the necessary determinations in respect of the Metropolitan Police, thus replacing the equivalent provision in schedule 11.
      Mr. Giles Shaw: I listened with care to what my hon. Friend the Member for Hornchurch (Mr. Squire) said. He has moved a new clause on behalf of the London Boroughs Association, which I know has expressed concern. My hon. Friend will understand that the existing system derives from discussions that we had with the association during the passage of the 1980 Act, when it was agreed that this system should be used.
      The 1980 Act also specified that the block grant to the Metropolitan Police should reach them indirectly through the authorities on which they precepted. That was similar to the way in which all the precepting authorities in London obtained their rate support grant under the old grant system. At that time, it was not thought necessary to change it.
      We have had a year's experience of the new system, and clearly the boroughs are less than happy with the original proposals. Now that the grant entitlements are based on expenditure, it is true that they are likely to fluctuate more than they did under the old system. However, I cannot accept the new clause, although I certainly promise to look at it closely and, more important, to consider the problem that my hon. Friend has raised.
      The association and the Department had a preliminary discussion at the meeting of the grant working group on 1 April and agreed to hold further and more detailed discussions on this proposal. It undoubtedly raises technical questions of considerable complexity that could easily have repercussions outside the confines of the Metropolitan Police district.
      If there is a problem to which there is a straightforward and acceptable solution—from what my hon. Friend has said, I am by no means sure that there is—it is possible that we shall be able to do something about it. Perhaps my hon. Friend will allow me to discuss this matter more fully. We are already having discussions with the association, and I believe that it would be best to leave the matter there for the time being.
      Mr. Squire: I am grateful for my hon. Friend's expression of opinion. He is in danger of breaking my run, to which the right hon. Member for Manchester, Ardwick (Mr. Kaufman) referred in Committee, whereby it was expected that I would get my amendments accepted. My hon. Friend will therefore understand my feeling of shock and horror as a result of his answer.
      In the light of what has been said, I hope that the Government will keep these matters under review. I think that the clause would reduce uncertainty if it formed part of the Bill. However, having had the chance to air my views, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    Clause 4

      ADJUSTMENTS OF DISTRIBUTION OF BLOCK GRANT
      Mr. Harry Cowans: I beg to move amendment No. 1, in page 3, line 44, at end insert—

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      "(d) shall not be exercised for the purpose specified in paragraph (cc)of that subsection so as to decrease the amount of block grant payable to a local authority where the local authority notify the Secretary of State that any such decreases will not enable them to maintain at an acceptable level the services which the local authority are by statute required to provide".
      The hon. Member for Hornchurch (Mr. Squire) referred to the Minister's response as a concession. I think that he was stretching the English language. I hope that this amendment will not be met with a similar concession.
      Mr. Kaufman: The Minister was not using "concession" in the normal way. He was using the definition on the Anglo-Heseltinese dictionary.
      Mr. Cowans: However the word was used, the hon. Member for Hornchurch had to ask to withdraw his new clause because the Minister would not accept it.
      At one stage new clause 4 and the amendment were to be linked. However, for technical reasons which I fully understand it has not been possible to link the clause and the amendment. That is unfortunate, because the clause sought to put responsibility at the door of the Secretary of State, where it should properly lie. The amendment goes some way in that direction.
      It is recognised that central Government must have some control over local authorities. There is no argument about that. However, there is a limit and if we go beyond it, the aim of central Government becomes self-defeating. Year in and year out the House places statutory duties on local authorities. The Bill takes a somewhat different approach because it will remove a financial tool from local authorities. I refer to their ability to raise a supplementary rate. The Bill replaces that tool with a piece of nonsense that states that the Secretary of State may or may not allow an authority to borrow if an approach is made to him. That is a fundamental change.
      The Bill would have been more important if Labour Members had not forced the Government to rethink their approach. At one stage the Bill would have made it possible for the Government to cut finances at any time during the financial year. That would have been much worse. It was the pressure that was mounted on the Opposition Benches that caused the Government to think again.
      On 18 January, when the Bill was given a Second Reading, I intervened in the Secretary of State's speech to tell him that he was taking away the right of local authorities to levy supplementary rates and was conferring upon himself or other Secretaries of State the right to alter grants during the financial year. At the same time, Parliament is imposing statutory duties on local authorities. It is unfortunate that the Secretary of State has not graced the Chamber with his presence today. We have been told that the Bill is vital. Surely we should have seen the right hon. Gentleman at some stage during the day.
      It seems that we have reached the stage where the Secretary of State could make it impossible, through financial restrictions, for local authorities to carry out statutory duties imposed by this Parliament or any other Parliament. It also seems that local authorities, through no fault of their own, find themselves in conflict with laws and Acts that this Parliament seeks to impose on them. One could read out a list as long as one's arm, both arms or the arms of every hon. Member, of the many duties imposed on local authorities. They include standards of
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      social services, housing provisions, educational standards and provisions, provision of efficient and adequate transport, local highways maintenance provisions and provision for children, police, planning and fire services. The list is endless. All those provisions are placed upon a local authority by statute of the House of Commons. No one complains about that.
      I am the first to agree that certain elements of grant contribute towards carrying out those statutory undertakings. I hope, however, that the Minister recognises that a burden is imposed on local authorities by Parliament in carrying out those statutory undertakings. The dead hand of a dictatorial Secretary of State seeks to cut back in such a manner that even the statutory duties placed upon local authorities are put at risk. I referred in Committee to some of the afflictions forced upon Newcastle city council by hidden costs. This translates into effects on the statutory duties that the council must carry out. There can be no other term than "cutback" for the actions of the Secretary of State. Again, in the case of the Tyne and Wear county council, these statutory duties are at risk.
      It was interesting during the debate on new clause 5 to discover the number of hon. Members who seemed to agree on certain matters. One issue germane to the amendment now under discussion was mentioned by the right hon. Member for Taunton (Mr. du Cann), other Conservative Members and a number of Opposition Members. Most agreed that there was inadequate central Government funding to carry out statutory duties placed upon local authorities by the House. There was a call for an exercise to be conducted to see how matters worked out. I submit that the Minister does not need to wait for the exercise. The wording of the amendment now before the House is precise. It is not an open cheque. The words proposed to be inserted are that the powers
      "shall not be exercised for the purpose specified in paragraph (cc) of that subsection so as to decrease the amount of block grant payable to a local authority"—
      and this is the nub—
      "where the local authority notify the Secretary of State that any such decreases will not enable them to maintain at an acceptable level the services which the local authority are by statute required to provide".
      The amendment is by no means an open cheque. It insists that local authorities notify the Secretary of State—rightly—when they cannot carry out the duties that the House has laid upon them. There can be nothing fairer than that. It seems nonsense and grossly unfair that the House should place a statutory duty on local authorities to perform functions but then withdraw funds to such an extent that that duty becomes at risk. The Secretary of State should have in the Bill a clause that allows a local authority to come to him and say that it cannot carry out his will if he carries on with decreased public expenditure at that level. That is fair, square, honest and open-handed.
      9.45 pm
      In Committee I heard one thing said many times—as I am sure did my hon. Friends—particularly from the Government Back Benches. I am drawing to a close so that I can give the Minister a chance to leap to his feet and accept the amendment, as I am sure that he will in a spirit of fairness and open-handedness. I think he is waiting to do so. In Committee Conservative Members will remember that they frequently used the phrase "He who pays the piper calls the tune." I am sure my hon. Friend will recall this vividly because it was like an everlasting

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      gramophone record—we heard it morning, noon and night at every Committee meeting. I will not argue against that, but the converse is equally true—he who calls the tune pays the piper. This is what the amendment is asking the Government to do.
      Where a statutory duty is placed on local authorities but the wherewithal to carry it out is taken away, it should at least, in all honesty and fairness, be open to a local authority to come to the Government and say that it can no longer carry out that statutory duty if the level of expenditure is decreased to that extent. To help local government to carry out duties imposed on it by the House, the Minister should accept the amendment.
      Mr. Christopher Price: The essence of the amendment is law and order. The Government talk about law and order, but there are other sorts of laws such as those passed by the House in a social context that we ask the local authorities to guarantee to implement. The Government, if they refuse to accept the amendment, are saying that monetarism comes before the law and that monetarism is more important than law and order. The Opposition are saying in the amendment that law and order is more important than the monetarist policies of the Government. That is what it boils down to.
      As my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) said, many statutes simply are not being adequately implemented by local authorities because there is not the money for them to do so. Some of the duties that are being overlooked are small but I am sure that as they build up scandals will develop. An example is trading standards legislation, which was passed by the House because we wanted to protect the consumer. It is falling into disuse in local authority after local authority because the authorities do not have the money to enforce it. As so often happens the House will wake up to this only when some tragedy occurs. We shall discover that we have passed laws but have not provided local government with the money to make them effective.
      I am concerned especially about education legislation. In many local authority areas, education takes up more than half the expenditure of the authority. As was shown by the report of Her Majesty's inspector which was issued today by the Department of Education and Science, the standards which have been normal in the past and which have been assumed to exist under section 8 of the Education Act 1944 are not being kept up adequately, and we need some provision in the law to prevent ministerial interference to depress standards even further than they are at present.
      I say that only because I want to warn the House. I know that this is not a matter affecting the Department of the Environment. However, the Department of Education and Science is deep in discussion about so-called methods of reforming the rating system which will involve taking 80 per cent. of education expenditure clean out of the rate support grant and into some sort of direct grant of the kind foreshadowed in one of the appendices to the Government's Green Paper on the future of the rates.
      There are differences between the two sides of the House about this proposal. If it were put forward seriously, I should oppose it with all the power in me, because I am sure that it will not do any good and that it could do a great deal of harm. In my view, local authorities can run
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      education a great deal better than the right hon. Member fo Leeds, North-East (Sir K. Joseph) can from Whitehall. In principle, that must be true.
      I say that to emphasise that traditionally the way that we have upheld standards in local government services is by passing legislation laying down minimum standards, with the Government providing local authorities with the money to make it possible to maintain those standards. Under this Government, during the past few years we have seen that the money is no longer being provided and that the Government are conniving at the law being broken. They know it. The Department of the Environment is more and more ashamed about it but, because it is not specifically its responsibility as each block of legislation may be in some other Department, if feels able to connive at these breaches of the law.
      The amendment is essential if further breaches of the law are not to take place. I commend it to the House.
      Mr. McWilliam: In many ways, this is the most important amendment to come before the House. It is not about audit. It is not about local government accounts. It is about the will of Parliament.
      As my hon. Friends the Members for Lewisham, West (Mr. Price) and Newcastle upon Tyne, Central (Mr. Cowans) reminded us, the will of Parliament has been expressed in a great many statutes, some of which are systematically and callously being ignored.
      Assuredly this Bill will pass into law. The Government have made it clear that they are not willing to listen to reason. They respond only to brute force. They have resisted all our amendments. They see them as getting in the way of the overriding financial responsibility which they seem to regard as their first priority.
      This amendment involves a deeply held principle. It provides that the law of the land will be implemented by local authorities, despite the prejudices and predilections of any given Secretary of State. It says no more than that. It says that a Secretary of State, simply because he cannot argue sufficiently strongly with the Treasury, will be able to say to local authorities "We will give you this amount of money and if you have to break the law, you do so, but you do so at your own peril, and in my view you can manage without breaking the law". That is only his view as an individual, and ratepayers may take issue with it at some time in the future.
      Far more fundamental is the fact that, instead of the Government coming to the House with amending legislation on education, social services and housing measures—the measures that affect people in local government—they are saying "They are all very well, but we shall set them on one side, and we shall decide whether they are to be implemented. That decision will be the sole property of the Secretary of State, as advised by his civil servants". The amendment is the only way to save this legislation from becoming an unconstitutional nonsense. If the Government had the guts to say that they wanted to amend education legislation because it was too generous, or that the social services legislation needed amending because it was too generous, or that the housing legislation should be amended because it was too generous, that would be entirely acceptable. It is their right, because they are the democratically elected Government. However, they should also take the public odium for what they do.

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      Instead of that, they hide behind this tawdry legislation—as it was accurately described by my hon. Friend the Member for Lewisham, West (Mr. Price).
      Far worse than that, in constitutional terms, is the fact that a sweeping measure of this nature, in which vast powers are taken by an individual, the Secretary of State, is surely alien to the concept of the way in which we try to run the affairs of this country. It is alien to the democratic principles of which we say we are proud. It is utterly alien and against the wishes, freely expressed, of the House of Commons on many occasions in the passage of many Acts of Parliament.
      If the House does not accept this amendment, the Government are saying "We are quite prepared to put up an illusion of what we would like to do, but with these reserve powers we can take it all back again". Thus, what they say about providing services for people is not worth the paper that the Bill is written on.
      Mr. Giles Shaw: I do not know about following the speech of the hon. Member for Blaydon (Mr. Mc William), but I certainly have the guts to ask the House to reject the amendment.
      Clause 4 is concerned with a situation which has arisen from time to time under both Labour and Conservative Governments when, for overriding reasons of national economy, the Government have found it necessary to seek expenditure reductions or restraints.
      I was reminded by the way in which the amendment was moved by the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) of the debate in Committee on amendment No. 102. We had a fairly long joust on this matter of principle. The House is certainly familiar with the arguments that have been deployed on this subject in the past.
      How best can reductions be secured? The Government's best instrument is the best rate support grant. That is why we propose hold-back schemes for 1981–82 and for 1982–83. We have told each authority what expenditure reductions we expect. We propose to reduce the grants to authorities that overspend. The amendment would prevent hold-back applying to
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      authorities that claim that they will not be able to provide an acceptable level of service. What in any circumstances would be an acceptable definition of "an acceptable level of service"? It is the length of a piece of string, and it is incapable of simple definition.
      Mr. Christopher Price: Will the hon. Gentleman give way?
      Mr. Shaw: I do not say that the Government are deaf to representations. We shall listen to local authorities that feel that there are good reasons why they cannot meet targets——
      It being Ten o'clock, the debate stood adjourned.

    BUSINESS OF THE HOUSE
    Ordered,
    That, at this day's sitting, the Local Government Finance (No. 2) Bill and the Reserve Forces Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. David Hunt.]
    Question again proposed, That the amendment be made.
    Mr. Shaw: As I was saying, this does not mean that the Government are deaf to representations except, that is, to those from the hon. Member for Lewisham, West (Mr. Price). Of course, we shall listen to local authorities that feel that there are good reasons why they cannot meet targets. If there is a case that raises a general principle, it may be possible to consider exemptions. Indeed, exemptions were considered in the financial year 1981–82. Authorities will know how hold-back will be calculated before they set their rates. This is the main burden of the Bill. The abolition of the supplementary rate will mean that authorities will know exactly where they stand in relation to their main rate.
    If an authority chose to ignore targets that others had been able to meet without disastrous effects on their services, it would not be able to claim in the middle of the year that hold-back came as a surprise. Provided that the authorities keep within the law, they will be able to maintain services at an acceptable level, but whether their ratepayers and electors will agree is another matter.
    I urge the House to reject the amendment.
    Mr. Cowans: Not for the first time, I am totally disappointed with the Minister's reply. To be honest, he has not given any reply. As the hon. Member for Woolwich, East (Mr. Cartwright) said earlier, by no stretch of the imagination can I now shout "Eureka!" What the Minister has said must concern every right hon. and hon. Member in the House. The Minister has said that when the dead hand of the Secretary of State touches local authorities, the will of the House and any legislation is at risk. If that is not a negation of democracy, I do not know what is.
    Mr. Christopher Price: It is good of my hon. Friend to give way to me. The Minister churlishly refused to do so. It would be right to put the record straight. When the Minister says that the adequacy of services is the length of a piece of string, the proper judge of whether services are adequate according to the law would, in the final resort, be the House of Lords, in a case brought to decide what that adequacy was. If the courts decided, for instance, that a local authority was not providing adequate education, there would be a problem if the Government had cut back grant to the local authority and prevented it from doing what the House of Lords told it to do.
    Mr. Cowans: My hon. Friend has put the case much better than I could have done. I do not need to comment further on that except to say that sometimes local government wished that it had something as long as a piece of string. It is important that the Government have not seen fit even to examine the wording of the amendment or to consider the implications. It is a sad reflection on a Government who came to power on a manifesto that promised more democracy to local government and, by every successive word and deed, have made sure that that is impossible.
    I hope that my right hon. and hon. Friends will join me in pressing the amendment to a Division, because it is a fundamental issue that should be included in the Bill. The Minister has not given one inkling of the depth of sincerity with which the amendment was tabled or the importance of it.
    Question put, That the amendment be made:—
    The House divided: Ayes 217, Noes 279.

    Division No. 120]

    [10.04 pm

    AYES

    Abse, Leo

    Callaghan, Jim (Midd't'n&P)

    Adams, Allen

    Campbell, Ian

    Allaun, Frank

    Campbell-Savours, Dale

    Alton, David

    Canavan, Dennis

    Archer, Rt Hon Peter

    Carmichael, Neil

    Ashley, Rt Hon Jack

    Cartwright, John

    Ashton, Joe

    Clark, Dr David (S Shields)

    Atkinson, N.(H'gey,)

    Cocks, Rt Hon M. (B'stol S)

    Bagier, Gordon A.T.

    Cohen, Stanley

    Barnett, Guy (Greenwich)

    Coleman, Donald

    Barnett, Rt Hon Joel (H'wd)

    Concannon, Rt Hon J. D.

    Beith, A.J.

    Conlan, Bernard

    Benn, Rt Hon Tony

    Cook, Robin F.

    Bidwell, Sydney

    Cowans, Harry

    Booth,Rt Hon Albert

    Craigen, J. M. (G'gow, M'hill)

    Bottomley, Rt Hon A. (M'b'ro)

    Crowther, Stan

    Bray, Dr Jeremy

    Cryer, Bob

    Brocklebank-Fowler, C.

    Cunliffe, Lawrence

    Brown, Hugh D. (Provan)

    Cunningham, Dr J. (W'h'n)

    Brown, R. C. (N'castle W)

    Dalyell, Tam

    Brown, Ronald W. (H'ckn'y S)

    Davidson, Arthur

    Brown, Ron (E'burgh, Leith)

    Davies, Rt Hon Denzil (L'lli)

    Buchan, Norman

    Davies, Ifor (Gower)

    Callaghan, Rt Hon J.

    Davis, Clinton (Hackney C)

    782

    Davis, Terry (B'ham, Stechf'd)

    Mc Taggart, Robert

    Deakins, Eric

    McWilliam, John

    Dean, Joseph (Leeds West)

    Marks, Kenneth

    Dewar, Donald

    Marshall, Jim (Leicester S)

    Dixon, Donald

    Martin, M (G'gowS'burn)

    Dobson, Frank

    Maynard, Miss Joan

    Dormand, Jack

    Meacher, Michael

    Douglas, Dick

    Mikardo, Ian

    Duffy, A. E. P.

    Millan, Rt Hon Bruce

    Dunn, James A.

    Miller, Dr M.S. (E Kilbride)

    Dunnett, Jack

    Mitchell, R.C. (Soton Itchen)

    Dunwoody, Hon Mrs G.

    Morris, Rt Hon C. (O'shaw)

    Eadie, Alex

    Morton, George

    Eastham, Ken

    Moyle, Rt Hon Roland

    Edwards, R. (W'hampt'n S E)

    Newens, Stanley

    Ellis, R. (NE D' bysh're)

    Oakes, Rt Hon Gordon

    English, Michael

    O' Neill, Martin

    Evans, loan (Aberdare)

    Orme, Rt Hon Stanley

    Faulds,Andrew

    Owen, Rt Hon Dr David

    Field, Frank

    Park, George

    Fitch, Alan

    Parker, John

    Flannery, Martin

    Parry, Robert

    Fletcher, Ted (Darlington)

    Pendry, Tom

    Ford, Ben

    Penhaligon, David

    Forrester, John

    Pitt, William Henry

    Foster, Derek

    Powel, Raymond (Ogmore)

    Foulkes, George

    Price, C. (Lewisham W)

    Fraser, J. (Lamb'th,N'w'd)

    Race, Reg

    Freeson, Rt Hon Reginald

    Radice, Giles

    Freud, Clement

    Rees, Rt Hon M (Leeds S)

    Garrett, John (Norwich S)

    Richardson, Jo

    Gilbert, Rt Hon Dr John

    Roberts, Albert (Normanton)

    Golding, John

    Roberts,Allan (Bootle)

    Graham, Ted

    Roberts, Ernest (Hackney N)

    Grant, George (Morpeth)

    Roberts,Gwilym (Cannock)

    Grant, John (Islington C)

    Robertson, George

    Hamilton, James (Bothwell)

    Robinson, G. (Coventry NW)

    Hamilton, W. W. (C'tral Fife)

    Rooker, J. W.

    Harrison, Rt Hon Walter

    Ross, Ernest (Dundee West)

    Hattersley, Rt Hon Roy

    Rowlands, Ted

    Haynes, Frank

    Ryman, John

    Heffer, Eric S.

    Sandelson, Neville

    Holland, S. (L'b'th, Vauxh'll)

    Sever, John

    Homewood, William

    Sheerman, Barry

    Hooley, Frank

    Sheldon, Rt Hon R.

    Horam, John

    Shore, Rt Hon Peter

    Howell, Rt Hon D.

    Silkin, Rt Hon J. (Deptford)

    Howells, Geraint

    Silkin, Rt Hon S. C. (Dulwich)

    Hoyle, Douglas

    Silvermanjulius

    Huckfield, Les

    Skinner, Dennis

    Hughes, Mark(Durham)

    Smith, Rt Hon J. (N Lanark)

    Hughes, Robert (Aberdeen N)

    Snape, Peter

    Hughes, Roy (Newport)

    Soley, Clive

    Janner, Hon Greville

    Spearing, Nigel

    Jay, Rt Hon Douglas

    Spriggs, Leslie

    John, Brynmor

    Stallard, A.W.

    Johnson, Walter (Derby S)

    Steel, Rt Hon David

    Johnston, Russel (Inverness,)

    Stoddart, David

    Jones, Rt Hon Alec (Rh'dda)

    Stott,Roger

    Jones, Barry (East Flint)

    Strang, Gavin

    Kaufman, Rt Hon Gerald

    Straw, Jack

    Kilfedder, James A.

    Summerskill, Hon Dr Shirley

    Kilroy-Silk, Robert

    Taylor, Mrs Ann (Bolton W)

    Kinnock, Neil

    Thomas, Dr R. (Carmarthen)

    Lamborn, Harry

    Thorne, Stan (Preston South)

    Leadbitter, Ted

    Tilley, John

    Leighton, Ronald

    Tinn, James

    Lestor, MissJoan

    Torney, Tom

    Lewis, Arthur (N'ham NW)

    Varley, Rt Hon Eric G.

    Litherland, Robert

    Wainwright, E. (Dearne V)

    Lofthouse, Geoffrey

    Wainwright,R. (Colne V)

    Lyon,Alexander (York)

    Walker, Rt Hon H. (D' caster)

    Lyons, Edward (Bradf'd W)

    Watkins, David

    McCartney, Hugh

    Weetch, Ken

    McDonald, DrOonagh

    Wellbeloved, James

    McKay, Allen (Penistone)

    Welsh, Michael

    McKelvey,William

    Wheeler, John

    MacKenzie, Rt Hon Gregor

    White, Frank R.

    Maclennan, Robert

    White, J. (G'gow Pollok)

    McNamara, Kevin

    Whitehead, Phillip

    783

    Whitlock, William

    Woolmer, Kenneth

    Willey, Rt Hon Frederick

    Wright, Sheila

    Williams, Rt Hon A. (S'sea W)

    Young, David (Bolton E)

    Wilson, R Hon Sir H. (H'ton;)

    Wilson, William (C'try SE)

    Tellers for the Ayes:

    Winnick,David

    Mr. Austin Mitchell and Dr. Edmund Marshall.

    Woodall,Alec

    NOES

    Adley, Robert

    Fairbairn, Nicholas

    Aitken, Jonathan

    Fairgrieve, Sir Russell

    Alexander, Richard

    Farr, John

    Alison, Rt Hon Michael

    Fenner, Mrs Peggy

    Amery, Rt Hon Julian

    Finsberg, Geoffrey

    Ancram, Michael

    Fisher, Sir Nigel

    Aspinwall, Jack

    Fletcher, A. (Ed'nb'gh N)

    Atkins, Robert (Preston N)

    Fletcher-Cooke, Sir Charles

    Atkinson, David (B'm'th, E)

    Fookes, Miss Janet

    Baker, Kenneth (St M'bone)

    Forman, Nigel

    Baker, Nicholas (N Dorset)

    Fowler, Rt Hon Norman

    Banks, Robert

    Fox, Marcus

    Beaumont-Dark, Anthony

    Fraser, Peter (South Angus)

    Bendall, Vivian

    Fry, Peter

    Benyon, W. (Buckingham)

    Gardiner, George (Reigate)

    Berry, Hon Anthony

    Gardner, Edward (S Fylde)

    Best, Keith

    Garel-Jones, Tristan

    Bevan, David Gilroy

    Gilmour, Rt Hon Sir Ian

    Biggs-Davison, Sir John

    Glyn, Dr Alan

    Blackburn, John

    Goodhart, Sir Philip

    Blaker, Peter

    Goodhew, Sir Victor

    Body, Richard

    Goodlad, Alastair

    Bonsor, Sir Nicholas

    Gorst, John

    Bottomley, Peter (W'wich W)

    Gow, Ian

    Bowden, Andrew

    Grant, Anthony (Harrow C)

    Boyson, Dr Rhodes

    Gray, Hamish

    Braine, Sir Bernard

    Greenway, Harry

    Bright, Graham

    Griffiths, E. (B'y St. Edm'ds)

    Brinton, Tim

    Griffiths, Peter Portsm'th N)

    Brittan, Rt. Hon. Leon

    Grist, Ian

    Brotherton, Michael

    Grylls, Michael

    Brown, Michael (Brigg&Sc'n)

    Gummer, John Selwyn

    Browne, John (Winchester)

    Hamilton, Hon A.

    Bruce-Gardyne, John

    Hamilton, Michael (Salisbury)

    Bryan, Sir Paul

    Hampson, Dr Keith

    Buchanan-Smith, Rt. Hon. A.

    Hannam, John

    Buck, Antony

    Haselhurst, Alan

    Budgen, Nick

    Havers, Rt Hon Sir Michael

    Burden, Sir Frederick

    Hawksley, Warren

    Butcher, John

    Hayhoe, Barney

    Cadbury, Jocelyn

    Heddle, John

    Carlisle, John (Luton West)

    Henderson,Barry

    Carlisle, Kenneth (Lincoln)

    Hicks, Robert

    Carlisle, Rt Hon M. (R'c'n)

    Higgins, Rt Hon Terence L.

    Chalker, Mrs. Lynda

    Hogg, Hon Douglas (Gr'th'm)

    Chapman, Sydney

    Holland, Philip (Carlton)

    Clark, Hon A. (Plym'th, S'n)

    Hooson, Tom

    Clark, Sir W. (Croydon S)

    Hordern, Peter

    Clarke, Kenneth (Rushcliffe)

    Howell,Rt Hon D. (G'ldf'd)

    Clegg, Sir Walter

    Howell, Ralph (N Norfolk)

    Cockeram, Eric

    Hunt, David (Wirral)

    Colvin, Michael

    Hunt, John (Ravensbourne)

    Cope, John

    Hurd, Rt Hon Douglas

    Cormack, Patrick

    Irving, Charles (Cheltenham)

    Costain, Sir Albert

    Jenkin, Rt Hon Patrick

    Cranborne, Viscount

    Jessel, Toby

    Critchley, Julian

    Johnson Smith, Geoffrey

    Crouch, David

    Jopling, Rt Hon Michael

    Dean, Paul (North Somerset)

    Joseph, Rt Hon Sir Keith

    Dickens, Geoffrey

    Kellett-Bowman, Mrs Elaine

    Dorrell, Stephen

    Kershaw, Sir Anthony

    du Cann, Rt Hon Edward

    King, Rt Hon Tom

    Dunlop, John

    Kitson, Sir Timothy

    Dunn, Robert (Dartford)

    Knight, Mrs Jill

    Durant, Tony

    Knox, David

    Dykes, Hugh

    Lamont, Norman

    Eden, Rt Hon Sir John

    Lang, Ian

    Eggar, Tim

    Latham, Michael

    Elliott, Sir William

    Lawrence, Ivan

    Emery, Sir Peter

    Lawson, Rt Hon Nigel

    Eyre, Reginald

    Lee, John

    784

    LeMarchant, Spencer

    Roberts, M. (Cardiff NW)

    Lennox-Boyd, Hon Mark

    Roberts, Wyn (Conway)

    Lester, Jim (Beeston)

    Rossi, Hugh

    Lewis, Kenneth (Rutland)

    Rost, Peter

    Lloyd, Ian (Havant & W'loo)

    Royle, Sir Anthony

    Lloyd, Peter (Fareham)

    Sainsbury, Hon Timothy

    Loveridge, John

    St. John-Stevas, Rt Hon N.

    Lyell, Nicholas

    Scott, Nicholas

    McCrindle, Robert

    Shaw, Giles (Pudsey)

    Macfarlane, Neil

    Shaw, Michael (Scarborough)

    MacKay, John (Argyll)

    Shelton, William (Streatham)

    Macmillan, Rt Hon M.

    Shepherd, Colin (Hereford)

    McNair-Wilson, M. (N'bury)

    Shepherd, Richard

    McNair-Wilson, P. (New F'st)

    Shersby, Michael

    Madel, David

    Silvester, Fred

    Major, John

    Sims, Roger

    Marlow, Antony

    Skeet, T. H. H.

    Marshall, Michael (Arundel)

    Speed, Keith

    Marten, Rt Hon Neil

    Speller, Tony

    Mates, Michael

    Spence, John

    Mather, Carol

    Spicer, Jim (West Dorset)

    Maude, Rt Hon Sir Angus

    Spicer, Michael (S Worcs)

    Mawby, Ray

    Sproat, Iain

    Mawhinney, DrBrian

    Squire, Robin

    Maxwell-Hyslop, Robin

    Stanbrook, Ivor

    Mayhew, Patrick

    Stevens, Martin

    Mellor, David

    Stewart, A. (E Renfrewshire)

    Meyer, Sir Anthony

    Stewart, Ian (Hitchin)

    Miller, Hal (B'grove)

    Stokes, John

    Mills, Iain (Meriden)

    Stradling Thomas, J.

    Mills, Pete (West Devon)

    Taylor, Teddy (S' end E)

    Moate, Roger

    Temple-Morris, Peter

    Monro, SirHector

    Thatcher, Rt Hon Mrs M.

    Montgomery, Fergus

    Thompson, Donald

    Moore, John

    Thorne, Neil (Ilford South)

    Morgan,Geraint

    Thornton, Malcolm

    Morris, M. (N'hampton S)

    Townend, John (Bridlington)

    Morrison, Hon C. (Devizes)

    Townsend, Cyril D, (B'heath)

    Morrison, Hon P. (Chester)

    Trippier, David

    Mudd, David

    Trotter, Neville

    Murphy, Christopher

    van Straubenzee, Sir W.

    Myles, David

    Vaughan, Dr Gerard

    Neale, Gerrard

    Viggers, Peter

    Needham, Richard

    Waddington, David

    Nelson, Anthony

    Wakeham, John

    Neubert, Michael

    Waldegrave, Hon William

    Newton, Tony

    Walker, Rt Hon P.(W'cester)

    Normanton, Tom

    Walker, B. (Perth)

    Onslow, Cranley

    Walker-Smith, Rt Hon Sir D.

    Oppenheim, Rt Hon Mrs S.

    Wall, Sir Patrick

    Page, Richard (SW Herts)

    Waller, Gary

    Parkinson, Rt Hon Cecil

    Ward, John

    Parris, Matthew

    Warren, Kenneth

    Patten, Christopher (Bath)

    Watson, John

    Patten, John (Oxford)

    Wells, Bowen

    Pattie, Geoffrey

    Wells, John (Maidstone)

    Pawsey, James

    Wheeler, John

    Percival, Sir Ian

    Whitelaw, Rt Hon William

    Pink, R. Bonner

    Whitney, Raymond

    Porter, Barry

    Wickenden, Keith

    Prentice, Rt Hon Reg

    Wiggin, Jerry

    Prior, Rt Hon James

    Wilkinson, John

    Proctor, K. Harvey

    Williams, D. (Montgomery)

    Raison, Rt Hon Timothy

    Wolfson, Mark

    Rathbone, Tim

    Young, Sir George (Acton)

    Rees, Peter (Dover and Deal)

    Younger, Rt Hon George

    Rhodes James, Robert

    Rhys Williams, Sir Brandon

    Tellers for the Noes:

    Ridley, Hon Nicholas

    Mr. Robert Boscawen and Mr. Peter Brooke.

    Rifkind, Malcolm

    Rippon, Rt Hon Geoffrey

    Question accordingly negatived.

    Clause 5

      ESTABLISHMENT OF AUDIT COMMISSION
      10.15 pm
      Mr. Wyn Roberts: I beg to move amendment No. 2, in page 5, line 9, after `with', insert `(a).
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this we shall discuss Government amendment No. 3.
      Mr. Roberts: Amendments Nos. 2 and 3 fulfil commitments given in Committee to make mandatory consultation on membership with the appropriate professional bodies and unions. It is important for such bodies to be consulted. The accountancy profession has an obvious interest in the Commissions's work and will have valuable views on possible membership. It is also important to have the views of local authority trade unions. Such consultation will help to ensure that the audit commission has the necessary confidence of all involved in local government. The Committee believed that consultation with such bodies should be spelt out in the Bill. We are happy to agree to that.
      Mr. Kaufman: The amendments, which have been moved in response to pressure from the Opposition, represent a remarkable achievement. Local authority trade unions will be consulted about appointments to the audit commission. That is satisfactory. We support the amendments.
      Amendment agreed to.
      Amendment made: No. 3, in page 5, line 10, leave out from 'and' to end of line 11 and insert—
      '(b) such bodies of accountants, such bodies representing local authority employees, and such other organisations or persons as appear to him to be appropriate.'.—[Mr. Wyn Roberts.]

    Clause 8

      CODE OF AUDIT PRACTICE
      Mr. Giles Shaw: I beg to move amendment No. 4, in page 7, line 26, after 'prepare' insert, and keep under review'
      Mr. Deputy Speaker: With this we shall discuss Government amendments Nos. 5 and 6.
      Mr. Shaw: The amendment fulfils an undertaking given in Committee. Hon. Members stressed the importance of a code of audit practice and said that it should be subject to parliamentary approval. The Government accept that. The code is the framework in which auditors will work and we therefore tabled the amendment. The amendment provides that the code must be approved by both Houses before it comes into force and approved again at intervals of not more than five years. The hon. Member for Edmonton (Mr. Graham) in particular asked for the five-year provision. Although much of the code may be technical, I am sure that this is a sensible way to proceed with what is an important part of the commission's work. I commend the amendments to the House.
      Mr. Kaufman: It may be a sensible way, but the Government did not see that it was a sensible way until we told them that it was. We proposed that it should be a sensible way and they accepted that it was. This is yet
      786
      another Government response to pressure from the Opposition. We have achieved a major improvement in the Bill. We support the amendment.
      Amendment agreed to.
      Amendments made: No. 5, in page 7, line 32, leave out subsection (3) and insert—
      '(3) The code shall not come into force until approved by a resolution of each House of Parliament, and its continuation in force shall be subject to its being so approved at intervals of not more than five years.
      (3A) Subsection (3) above shall not preclude alterations to the code being made by the Commission in the intervals between its being approved as aforesaid.
      (3B) The Commission shall send copies of the code and of any alterations made to the code to the Secretary of State who shall lay them before Parliament; and the Commission shall from time to time publish the code as for the time being in force.'.
      No. 6, in page 7, line 34, leave out 'or revising the code' and insert
      `the code or making any alteration in it'.—[Mr. Giles Shaw.]

    Clause 11

      PUBLIC INSPECTION OF ACCOUNTS AND RIGHT OF CHALLENGE
      Mr. Wyn Roberts: I beg to move amendment No. 7, in page 9, line 15, after '(3)', insert
      'Subject to subsection (4) below,'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 8.
      Mr. Roberts: These amendments, yet again, fulfil an undertaking given in Committee to various hon. Members, especially the hon. Members for Blaydon (Mr. McWilliam) and Newcastle upon Tyne, Central (Mr. Cowans), whose tuneful voices could charm the birds off the trees.
      In the light of arguments put forward in Committee, the Government accept that local electoral objections to a council should be made in writing and sent not only to the auditor but also to the local authority concerned. It seems only right that the body being complained about should have a written record of the complaint. We also accept the point made in Committee by the hon. Member for Newcastle upon Tyne, Central that the written statement should include the grounds on which the objection was made. We hope that the hon. Members concerned will feel that these amendments meet their objectives.
      Mr. Kaufman: This is a remarkable Report stage, because practically every amendment proposed by the Government is in response to commitments made to my hon. Friends. I congratulate my hon. Friends on that achievement and congratulate, retrospectively, my hen. Friend the Member for Lewisham, West (Mr. Price) on the fact that the previous amendments involved the code being referred back to the House because of his suggestion. The Labour Party has made a constructive contribution to an unconstructive Bill.
      Amendment agreed to.
      Amendment made: No. 8, in page 9, line 21, at end insert—
      '(4) No objection may be made under subsection (3) above by or on behalf of a local government elector unless the auditor has previously received written notice of the proposed objection and of the grounds on which it is to be made.
      (5) Where an elector sends a notice to an auditor for the purposes of subsection (4) above he shall at the same time send a copy of the notice to the body whose accounts are the subject of the audit.'.—[Mr. Wyn Roberts.]

    Clause 12

      AUDITOR'S REPORTS
      Mr. Giles Shaw: I beg to move amendment No. 9, in page 9, line 30, leave out 'either' and insert
      , subject to subsection (1A) below,'.
      Mr. Deputy Speaker: With this it will be convenient to take amendments Nos. 10 to 15.
      Mr. Shaw: These six amendments are of major importance. The Opposition were totally incapable of suggesting them to the Government. We had to work with extreme care. All of the amendments were designed to clarify the workings of clause 12. However, we had the assistance of the hon. Member for Blaydon (Mr. McWilliam) on one amendment whose purpose is to meet a point he raised in Committee. He stated that, when the auditor made an immediate report to the body being audited, there was nothing to say how quickly he must send a copy to the audit commission.
      Amendment No. 14 makes it clear that such reports, which should be immediate, must be sent to the commission forthwith. That is the sort of constructive, important and monumental contribution that the Opposition have made to many aspects of the Bill. I am delighted to think that such amendments give the right hon. Member for Manchester, Ardwick (Mr. Kaufman) the satisfaction of being where he is. I commend the amendments to the House.
      Mr. Kaufman: In Committee we had to put up with a great deal of clap-trap from the Under-Secretary of State. It is a pity that the Chamber should be burdened with such rubbish. When we proposed amendments similar to amendments Nos. 13 and 14 in Committee, the Minister said that they were not necessary. He was full of derision, but he crept away into a corner and tabled precisely the amendments that he said were not necessary when we debated them in Committee. We shall not shame the Minister in public, so we shall not refer further to the matter. We shall vote for these good amendments.
      Amendment agreed to.
      Amendments made: No. 10, in page 9, line 31, leave out from 'accounts)' to end of line 32.
      No. 11, in page 9, line 32, at end insert—
      `(1A) Where an auditor makes a report to the body concerned under section 9(3) above at the conclusion of the audit, the certificate and opinion referred to in subsection (1) above may be included by him in that report.'.
      No. 12, in page 9, line 33, leave out 'subsection (1) above or section 9' and insert 'section 9(3)'.
      No. 13, in page 9, line 35, after `chairman,', insert
      'and (except in the case of an immediate report) shall be so sent not later than fourteen days after the conclusion of the audit'.
      No. 14, in page 9, line 39, at end insert
      `forthwith, if the report is an immediate report, and otherwise not later than fourteen days after the conclusion of the audit. '.
      No. 15, in page 10, line 5, leave out subsection (5).—[Mr. Giles Shaw.]

    Clause 22

      MISCELLANEOUS FUNCTIONS OF COMMISSION
      Mr. Wyn Roberts: I beg to move amendment No. 17, in page 16, line 42, at end insert
      788
      ', but before making a request under this subsection a body shall consult such associations of employees as appear to the body to be appropriate. '
      This amendment requires a body to consult its unions before requesting the commission to carry out a study into its value for money arrangements under clause 22(2). It is likely that the body concerned would consult the unions anyway, but we accept the view expressed by the Opposition in Committee that the Bill should safeguard the position by requiring such bodies to do so.
      Mr. Kaufman: This is another Labour gain. This is an important amendment that was proposed to us by one of the principal local authority trade unions. We have delivered. We hope that the unions will.
      Amendment agreed to.
      Mr. Wyn Roberts: I beg to move amendment No. 18, in page 17, line 4, at end insert "being a body which appears to the Secretary of State to be connected with local government.".
      This amendment is a response to concern voiced in Committee by hon. Members on both sides. It was suggested that the scope of the clause was too wide. There was concern that it would be open to future Secretaries of State to extend unduly the role of the commission.
      It is the Government's intention that clause 22(3) should apply only to bodies in local government. We stress that audits under that provision depend on the agreement of the body concerned. The clause is intended merely to permit the continuation of existing practice whereby the district audit service audits, by agreement, books of people such as the local government Ombudsman or bodies such as the regional tourist board.
      We recognise the merit of the point that was made in Committee. Therefore, the Government have tabled this simple amendment to restrict the scope of the clause. We hope that the House will agree that it is a sensible and desirable change.
      Mr. Kaufman: Yet another one of ours that we shall vote for with great satisfaction.
      Amendment agreed to.

    Clause 25
      WATER AUTHORITIES
      Amendment made: No. 19, in page 18, line 41, leave out clause 25.—[Mr. King.]
    Clause 26

      COMMENCEMENT OF PART III AND TRANSITIONAL PROVISIONS
      Amendment made: No. 20, in page 19, line 8, leave out "Schedule 2" and insert
      "section (Water authorities and National Water Council) and Schedule (New paragraphs for Schedule 3 to the Water Act 1973)".—[Mr. King.]

    New Schedule
      NEW PARAGRAPHS FOR SCHEDULE 3 TO THE WATER ACT I973

        Accounts of water authorities and Council
        38.—(1) It shall be the duty of a water authority and of the Council—

        (a) to keep proper accounts and proper records in relation to the accounts; and

        789

        (b) to prepare in respect of each accounting year a statement of accounts giving a true and fair view of the state of affairs and profit or loss of the body preparing the statement

        (2) Every statement of accounts prepared by a body in accordance with this paragraph shall comply with any requirement which the Ministers have, with the consent of the Treasury, notified in writing to that body and which relates to any of the following matters, namely—

        (a) the information to be contained in the statement;

        (b) the manner in which that information is to be presented;

        (c) the methods and principles according to which the statement is to be prepared.

        (3) Subject to any requirement notified to it under subparagraph (2) above, in preparing any statement of accounts in accordance with this paragraph a body shall follow, with respect to each of the matters referred to in that sub-paragraph, such course as may be for the time being approved by the Ministers with the consent of the Treasury.
        (4) Without prejudice to the foregoing provisions of this paragraph, the Minister may direct a water authority to keep such accounts and records and to prepare such statements with regard to money expended in the performance of their land drainage functions as he may think fit.
        (5) In this paragraph "accounting year", in relation to a water authority or the Council, means subject to sub-paragraph (6) below, a period of twelve months ending on 31st March.
        (6) If the Ministers so direct in relation to any accounting year of a water authority or the Council, that accounting year shall end on such other date may be specified in the direction.

        Audit of water authorities and Council
        39.—(1) The accounts of a water authority or the Council, including all statements prepared by them under paragraph 38 above, shall be audited in accordance with this Schedule by auditors appointed for each accounting year (within the meaning of that paragraph) by the Secretary of State.
        (2) A person shall not be qualified for appointment under this paragraph unless he is a member of a body of accountants established in the United Kingdom and recognised for the purposes of section 161 (1) (a) of the Companies Act 1948; but a firm may be so appointed if each of its members is qualified to be so appointed.

        General duties of auditors
        39A.—(1) In auditing any accounts in accordance with this Schedule, an auditor shall by examination of the accounts and otherwise satisfy himself that the body concerned has complied with the requirements of paragraph 38 above.
        (2) The auditor shall consider whether, in the public interest, he should make a report on any matter coming to his notice in the course of the audit in order that it may be considered by the body concerned or brought to the attention of the public, and shall consider whether the public interest requires any such matter to be made the subject of an immediate report rather than of a report to be made at the conclusion of the audit.

        Auditor's right to obtain documents and information
        39B. —(1) An auditor shall have a right of access at all reasonable times to all such documents relating to a body whose accounts are required to be audited in accordance with this Schedule as appear to him necessary for the purposes of the audit and shall be entitled to require from any person holding or accountable for any such document such information and information and explanation as he thinks necessary for those purposes and, if he thinks it necessary, to require any such person to attend before him in person to give the information or explanation or to produce any such document.
        (2) Without prejudice to sub-paragraph (1) above the auditor shall be entitled to require any officer or member of the body concerned to give him such information or explanation as he thinks necessary for the purposes of the audit and, if he thinks it necessary, to require any such officer or member to attend before him in person to give the information or explanation.
        (3) Without prejudice to sub-paragraphs (1) and (2) above, the body concerned shall provide the auditor with every facility and all information which he may reasonably require for the purposes of the audit.
        (4) Any person who without reasonable excuse fails to comply with any requirement of an auditor under sub-paragraph (1) or
        (2) above shall be liable on summary conviction to a fine not exceeding £200 and to an additional fine not exceeding £20 for each day on which the offence continues after conviction thereof.
        (5) Any expenses incurred by an auditor in connection with proceedings for an offence under sub-paragraph (4) above alleged to have been committed in relation to the audit of the accounts of any body shall, so far as not recovered from any other source, be recoverable from that body.

        Public inspection of accounts and right to make representations
        39C. — (1) At each audit or the accounts of a water authority under this Schedule any local government elector for any area to which the accounts to be audited relate may inspect those accounts and all books, deeds, contracts, bills, vouchers and receipts relating to them and make copies of all or any part of the accounts and those other documents.
        (2) At the request of any such local government elector, the auditor shall give the elector, or any representative of his, an opportunity to question the auditor about those accounts or to draw the auditor's attention to any matter on which he could make a report under paragraph 39A above.

        Transmission of documents to Ministers and local authority
        39D.—(1) As soon as the audit of the accounts of any body under this Schedule has been concluded a copy of any statement prepared by the body for the accounting year in question under paragraph 38 above, together with a copy of any report made by the auditor on the statement or on the accounts, shall be sent by the body—

        (a) to the Ministers; and

        (b) in the case of a water authority, in addition to every local authority whose area is wholly or partly situated in the area of the water authority.

        (2) The Ministers shall lay a copy of every statement and report of which a copy is received by them in pursuance of sub-paragraph (1) above before each House of Parliament.

        Right to inspect statements of accounts and auditor's reports
        39E.—(1) Any person, on application to a water authority or to the Council, shall be entitled—

        (a) to inspect and make copies of any statement prepared by them under paragraph 38 above and any report made by an auditor on the statement or on their accounts and

        (b) to be furnished with copies of any such statement or report on payment of such reasonable sum as the authority or the Council may determine.

        Regulations as to accounts
        39F.—(1) The Ministers may by regulations applying to water authorities and the Council make regulations with respect to—

        (a) the deposit of the accounts of a water authority or the Council at their offices or at any other place;

        (b) the publication of information relating to accounts and the publication of statements of accounts;

        (c) the exercise of any rights of inspection or making representations conferred by paragraph 39C or 39E above, and the steps to be taken for informing persons entitled to exercise them of those rights.

        (2) Regulations under this paragraph may make different provision in relation to water authorities and the Council respectively.
        (3) The power to make regulations under this paragraph shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

        Restriction on disclosure of information
        39G.—(1) No information relating to a particular body or other person and obtained by any auditor, or by a person acting on behalf of an auditor, in the course of any audit under this Schedule shall be disclosed except—

        (a) with the consent of the body or person to whom the information relates; or

        (b) for the purposes of any functions of an auditor under this Schedule; or

        (c) for the purposes of any criminal proceedings.

        (2) Any person who discloses any information in contravention of sub-paragraph (1) above shall be guilty of an offence and liable—

        (a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the prescribed sum (as defined in section 32(9) of the magistrates' Courts Act 1980) or to both; or

        791

        (b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.'.—[Mr. King.]

        Brought up, and read the First and Second time.
        Amendment made: Leave out paragraph 39(2) and insert:
        `(2) A person shall not be qualified for appointment under this paragraph unless he is—

        (a) a member of a body of accountants established in the United Kingdom and recognised for the purposes of section 161(1)(a) of the Companies Act 1948; or

        (b) a member of the Chartered Institute of Public Finance and Accountancy; but a firm may be so appointed if each of its members is qualified to be so appointed. '.—[Mr. Squire.]

        Schedule, as amended, added to the Bill.

    Schedule 1

      THE AUDIT COMMISSION
      Mr. Giles Shaw: I beg to move amendment No. 22, in page 24, line 13, at end insert—
      '(7) Notwithstanding sub-paragraphs (1) and (3) above, the first Controller of Audit shall be appointed by the Secretary of State who shall determine the terms and conditions on which he is to be employed by the Commission.'.
      This amendment was not suggested by the Opposition but was foreshadowed by my hon. Friend the Under-Secretary of State for Wales, who told the Committee that the Government intended to table an amendment whereby the Secretary of State would appoint the first controller of audit. The Committee understood the reasons for that, and the amendment is tabled to discharge that undertaking.

    Schedule 2
      WATER AUTHORITIES
      Amendment made: No. 23, in page 27, line 7, leave out Schedule 2.—[Mr. King.]
    Schedule 3

      CONSEQUENTIAL AMENDMENTS
      Amendments made: No. 24, in page 30, line 2, before `In' insert '(1)'.
      No. 25, in page 30, line 5 at end insert—
      '(2) For paragraph 40(1) of that Schedule there shall be substituted—
      "(1) There shall be made to the Ministers—

      (a) by each water authority and the Council as soon as possible after the end of each accounting year (within the meaning of paragraph 38 above); and

      (b) by the Water Space Amenity Commission as soon as possible after 31st March in each year,

      a report on the discharge by them of their functions during that year and of their policy and programme."'.—[Mr. King.]
      10.30 pm
      Mr. King: I beg to move, That the Bill be now read the Third Time.
      10.31 pm
      Mr. Kaufman: I understand why the Minister should wish to say no more than that about the Bill. He said about as much in favour of it in those words as can be found. It has gone through more adventures than Dick Barton or James Bond. People talk about "The Perils of Pauline". The Bill should be entitled "The Perils of Heseltine".
      792
      The Bill was introduced with great blasts on ministerial trumpets. It was then withdrawn, reintroduced, amended and reamended. The referendums—originally the centrepiece of the Bill—have gone. Selected mid-year hold-back, to which the Treasury attaches such immense importance has also gone. As the House had heard in the past few minutes, major amendments have been both in Committee and on Report in response to pressure from the Opposition. There have been important steps towards the depoliticisation of the audit.
      The words
      "and in the carrying out of its policies"
      in clause 9(1)(c)—a form of words that I told the House on Second Reading was exceptionally dangerous—have now been removed. In addition, the Minister has made an important statement on the non-political nature of the audit. We now have several amendments which provide for consultations with trade unions on the appointment of members of the audit commission. We have restored what was being taken away—public access to the accounts of water authorities.
      The Committee stage of the Bill was truly meaningful. I congratulate my right hon. and hon. Friends who served on the Committee on the way in which they worked and on the amendments that they obtained through 1,000 columns of achievement.
      It would be churlish of me not to acknowledge that our pressure met with response, from time to time at any rate, from the Minister who has now laboured three grim years in the salt mines of the Department of the Environment. We shall watch his future with interest. Moreover, we take our leave of the Bill knowing that it will not be enacted as it is now amended.
      We are still to have what may be described as the `Bedfordshire amendments", which the Government have extremely sensibly decided not to rush through, because they will get them wrong even if they do not. We are still to have the amendments in response to the new clause proposed by my right hon. Friend the Member for Heywood and Royton (Mr. Barnett), and we may still have the Government's fourth thoughts on clause 4.
      I give the Government notice now that the House can look forward to long and fruitful debates when the Bill returns after being considered in another place.
      The Bill has been mangled, changed and improved, but I say clearly on behalf of Her Majesty's Opposition that it is still unacceptable. It is unacceptable in setting up an audit commission, which we join the local authorities and their associations in opposing. It is unacceptable in banning supplementary rates, which have existed for nearly four centuries. It is unacceptable in imposing arbitrary and unfair spending limits and penalties on local authorities. It is unacceptable in its unprecedented interference with the freedom of local authorities.
      Whether the next Labour Government will repeal part III of the Bill will depend upon how the audit commission operates in the short time between its being set up and the next general election, but I state unequivocally and categorically that we shall certainly repeal parts I and II—and we shall demonstrate that by voting against the Third Reading.
      10.37 pm
      Mr. David Madel: The position of Bedfordshire county council has been the subject of

      793
      much comment and debate. As one of the county's five Members of Parliament who was not on the Committee, I should like to deal briefly with the present position.
      When the Bill was launched and announcements were made, it was stated that supplementary precepts and rates would be banned as from 1 April 1982. In Bedfordshire, however, the actual rate for 1982–83 was fixed at the end of February. Every county councillor knew that that decision was to be made then. About 10 days later, a supplementary precept was issued, because it was clearly known by county councillors at the meeting at the end of February that they could not throw out what they had done then and the only way in which they could top it up was to bring in a supplementary precept. They were told that if they did that they would bring themselves into a major collision with the Government as a result of the Bill, and that is certainly what has happened.
      I understand from the Government that, even if supplementary precepts were agreed in the year 1981–82, if they refer to a period after 1 April 1982 they will be invalidated when this legislation receives the Royal Assent. I am glad to see that the Government are further taking care of Bedfordshire's case—we have four district councils, of which two are in exceptional difficulty over this—by making amendments in the House of Lords.
      I am glad that the hon. Member for Liverpool, Edge Hill (Mr. Alton) is present on behalf of the Liberal Party. He had quite a bit to say about Bedfordshire, but he did not answer my point about the damage that supplementary precepts and rates will do to industry and commerce in the county. There will be plenty of time for debate when we have elections later, but the hon. Gentleman did not answer that point. He merely talked about services in the county. I can only point out to him that Bedfordshire is one of the highest spending authorities in the land, especially on education, as a close look at the facts will prove. The supplementary precept with which we are now threatened will be very damaging to industry.
      As I understand it, until the Bill becomes law, supplementary precepts and rates are lawful and must be paid.
      Mr. Alton: Does the hon. Gentleman support the course of action urged upon the ratepayers of Bedfordshire by the leader of the Conservative group—not to pay their supplementary rates bills and thus to break the law?
      Mr. Madel: I do not wish to become involved in a county council argument in this Chamber. I merely restate what I have just said as one of the Members of Parliament for the county. As I understand it—I know that my hon. Friend the Member for Bedford (Mr. Skeet) agrees with me on this—until the Bill becomes law, supplementary precepts and rates are lawful and must be paid.
      I hope that two things will flow from this legislation. First, Bedfordshire county council should not start spending money now that it will have to return to the districts when the Bill receives Royal Assent and becomes law. Secondly, a large amount of supplementary precept and rate money will soon start to move around Bedfordshire. When the Bill becomes law, it will have to be returned whence it came—to districts, ratepayers, industry and commerce. All I urge is that, when the Bill becomes law, the money which must now be lawfully paid will be swiftly returned whence it came.
      I hope that Bedfordshire county council will never again get itself into such a position that it knew that, by
      794
      pushing this supplementary precept, it would collide with the Government and land itself in great difficulties. Bedfordshire has enough difficulties without certain county councillors pushing their luck over this Bill.
      10.40 pm
      Mr. John Cartwright: Despite the changes referred to by the right hon. Member for Manchester, Ardwick (Mr. Kaufman), the Bill is still a considerable step along the road to central Government control and domination of local authorities. The removal of the power to levy a supplementary rate is a crude use of a sledgehammer to reduce the freedom of manoeuvre of local authorities. As to part II, I regard the whole concept of spending targets imposed by central Government as resting on the unacceptable idea that the man in Marsham Street knows best. That approach goes against the whole tradition and spirit of local government, which has always been based on the idea of diversity, innovation and widely differing policies reflecting differing needs and views in local communities. It is a great sadness that that will now be crushed in the dull, grey, centralised uniformity of grant-related expenditure assessments and centrally imposed spending targets backed up by the penal threat of the witholding of grant.
      It is against that background that I suggest that Ministers should not underestimate the suspicion with which local government will face the audit commission. That suspicion was underlined to me again this morning when I received a letter from the treasurer of the London borough of Greenwich expressing a personal view. He says:
      "I am convinced that the intention of the Secretary of State for the Environment in creating the Audit Commission is to have another means of controlling local government from the centre".
      That is not a wild, extremist councillor or a politician with an axe to grind. It is an experienced local government treasurer—one of those prudent treasurers about whom we heard a great deal in Committee. He ends his personal letter to me as follows:
      "I am thus very apprehensive that the proposed arrangements are yet another nail in the coffin of the independence of local government".
      I underline that as a reminder to Ministers that they will meet considerable suspicion from local government when it comes to the operations of the audit commission.
      As other hon. Members have pointed out, the Bill contains a major element of retrospection, sanctifying action that has already been taken by Ministers. It still leaves considerable grey areas about the legality of some of the measures affecting targets and grant systems. Its complex and complicated nature will create a field day for lawyers. It will not provide the stability that local authorities need to operate prudently and to run efficient and effective services.
      Despite the changes that have been made, the Bill is based on a philosophy of centralism and on the belief that it is right for central Government to set the levels of spending of individual local authorities. It is based on a belief that the only defence of local ratepayers against unreasonable rate demands is in central Government direction.
      My hon. Friends in the Liberal Party and the SDP totally reject that approach. We believe that local government should be made more accountable, but downwards to the electors and not upwards to the

      795
      Secretary of State. The Bill is not a blueprint for self-confident, lively, democratic local government. It is a charter for central Government bureaucracy, and we shall vote against Third Reading tonight.
      10.45 pm
      Mr. W. Benyon: The right hon. Member for Manchester, Ardwick (Mr. Kaufman) is adept at looking the most responsive gift horse in the mouth. It would be churlish if someone such as myself, who voted against the Bill on Second Reading, did not congratulate my right hon. Friends on the changes made in Committee, especially to the provisions that allow the level of grant to be changed after the beginning of the financial year. That was the feature that stuck in my gullet more than anything else.
      I do not pretend that I regard the Bill as a particularly happy one, even in its present state. It is essentially a temporary Bill. The difficulties that we have experienced over the Bill underline more than ever the need to change the basis of local government finance so that local government becomes much more responsive to the electors and to those who actually pay the Bill. If the difficulties that we have gone through contribute in some way to bring that about and to develop a sense of urgency to produce that result, all the discussion will not have been in vain.
      10.46 pm
      Mr. King: I much appreciate the contribution of my hon. Friend the Member for Buckingham (Mr. Benyon) who, having made his views clear on Second Reading, was characteristically generous on Third Reading. I am glad that his gullet is now a little freer and that he has been able to recognise the changes that have been made. My hon. Friend will understand that the Bill consists of three parts. I hope that part III will survive and become a lasting addition to the sensible arrangement of local government affairs.
      I profoundly disagreed with one of the least valuable contributions that the hon. Member for Woolwich, East (Mr. Cartwright) has made. I have respected a number of his earlier contributions but he was far too facile tonight in his treatment of the potential contribution of the audit commission.
      I am grateful to the right hon. Member for Manchester, Ardwick (Mr. Kaufman) and his hon. Friends for their contributions in Committee. The right hon. Gentleman made some play on the number of amendments that were made in response to contributions from the Opposition. He will recall that he said on Second Reading that he hoped that it would be a constructive debate to which the Government would listen. I express my appreciation of the part that my hon. Friends played in an important and constructive consideration of the Bill in Committee. My hon. Friends were subject to the difficult quaisi-Trappist role that has to be played by Government Back Benchers in Committee. They discharged their responsibilities excellently. They reserved their comments with te ling effect for the matters where they thought that improvements were needed and supported the areas where they thought that the Government were working on the right lines.
      I think that our proceedings in Committee were responsible. We have produced a Bill that commends itself
      796
      to the House and I hope that the House will support it. The Bill will ban supplementary rates and supplementary precepts, and high time too. I am satisfied from the advice that I have been given that the supplementary precept mentioned by my hon. Friend the Member for Bedfordshire, South (Mr. Madel) will be valid if it is levied now and will prove on Royal Assent, which I trust will be achieved before too long, to be invalid. It is the responsibility of Bedfordshire ratepayers to honour their responsibilities and to pay such precepts and rate demands as they receive.
      I wish to allay the surprise of the right hon. Member for Birmingham, Small Heath (Mr. Howell). Clause 4 is very different now from the clause that he had in mind when he woke up to an intervention to discover that we were proposing a fourth amendment to the clause when he probably thought that it was unamended. It is a different amendment to the clause 4 that he had in mind. This is a sensible approach to the problem of trying to reverse the process of a progressive and continuous increase in local government expenditure and to recognise that, at a time of public expenditure restraint, it is necessary to ensure that individual local authorities to do not pre-empt resources from the more prudent.
      I welcome what the right hon. Member for Ardwick said about the proposals for the audit commission. At the time of Second Reading and in Committee, the debates on the Bill began with a knee-jerk reaction by the Opposition to the effect that the audit commission was unlikely to receive any support from them. That was my impression. I do not wish to make any political point. I believe that the audit commission has a valuable role to play.
      The hon. Member for Woolwich, East suggested that the Bill was another example of centralism. It is, therefore, odd that its introduction should be supported by the president of NALGO, by the Labour leader of the Camden authority, by Conservative leaders of local authorities and also by independent accountants and others with experience of local government. They believe that the audit commission, standing at one remove from the present district audit service, which is, in effect, part of the Department of the Environment, occupies an independent position that the House should support.
      The interesting amendments proposed by the right hon. Member for Heywood and Royton (Mr. Barnett), speaking, I think, with the full support of the PAC, may further extend the new role that may be played in this respect. I believe that the Bill will make an important contribution to local authority expenditure, its proper examination and the better pursuit of value for money, one of the most important responsibilities of central and local government. Against that background, with the greatest of enthusiasm, I commend the Bill to the House.
      Question put, That the Bill be now read the Third time:—
      The House divided: Ayes 273, Noes 212.

      AYES

      Aitken, Jonathan

      Banks, Robert

      Alexander, Richard

      Beaumont-Dark, Anthony

      Alison, Rt Hon Michael

      Bendall, Vivian

      Amery, Rt Hon Julian

      Benyon, W. (Buckingham)

      Ancram, Michael

      Best, Keith

      Aspinwall, Jack

      Bevan, David Gilroy

      Atkins, Robert (Preston N)

      Biggs-Davison, Sir John

      Atkinson, David (S'm'th, E)

      Blackburn, John

      Baker, Kenneth (St.M'bone)

      Blaker, Peter

      Baker, Nicholas (N Dorset)

      Body, Richard

      797

      Bonsor, Sir Nicholas

      Hampson, Dr Keith

      Bottomley, Peter (W'wich W)

      Hannam, John

      Bowden, Andrew

      Haselhurst, Alan

      Boyson, Dr Rhodes

      Havers, Rt Hon Sir Michael

      Braine, Sir Bernard

      Hawksley, Warren

      Bright, Graham

      Hayhoe, Barney

      Brinton, Tim

      Heddle, John

      Brittan, Rt. Hon. Leon

      Henderson, Barry

      Brooke, Hon Peter

      Hicks, Robert

      Brotherton, Michael

      Higgins, Rt Hon Terence L.

      Brown, Michael (Brigg &Sc'n)

      Hogg, Hon Douglas (Gr'th'm)

      Browne, John (Winchester)

      Holland, Philip (Carlton)

      Bruce-Gardyne, John

      Hooson, Tom

      Bryan, SirPaul

      Hordern, Peter

      Buchanan-Smith, Rt. Hon. A.

      Howe, Rt Hon Sir Geoffrey

      Buck, Antony

      Howell, Rt Hon D. (G'ldf'd)

      Budgen, Nick

      Howell, Ralph (N Norfolk)

      Burden, Sir Frederick

      Hunt, David (Wirral)

      Butcher, John

      Hunt, John (Ravensbourne)

      Cadbury, Jocelyn

      Hurd, Rt Hon Douglas

      Carlisle, John (Luton West)

      Irving, Charles (Cheltenham)

      Carlisle, Kenneth (Lincoln)

      Jenkin, Rt Hon Patrick

      Carlisle, Rt Hon M. (R'c'n)

      Jessel, Toby

      Chalker, Mrs. Lynda

      JohnsonSmith, Geoffrey

      Chapman, Sydney

      Jopling, Rt Hon Michael

      Clark, SirW. (Croydon S)

      Joseph, Rt Hon Sir Keith

      Clarke, Kenneth (Rushcliffe)

      Kellett-Bowman, MrsElaine

      Clegg, Sir Walter

      Kershaw, Sir Anthony

      Cockeram, Eric

      King, Rt Hon Tom

      Colvin, Michael

      Kitson, Sir Timothy

      Cope, John

      Knight, Mrs Jill

      Cormack, Patrick

      Knox, David

      Costain, Sir Albert

      Lamont, Norman

      Cranborne, Viscount

      Lang, Ian

      Crouch, David

      Latham, Michael

      Dean, Paul (North Somerset)

      Lawrence, Ivan

      Dickens, Geoffrey

      Lawson, Rt Hon Nigel

      Dorrell, Stephen

      Lee, John

      du Cann, Rt Hon Edward

      LeMarchant, Spencer

      Dunn, Robert (Dartford)

      Lennox-Boyd, Hon Mark

      Durant, Tony

      Lester, Jim (Beeston)

      Dykes, Hugh

      Lewis, Kenneth (Rutland)

      Eggar, Tim

      Lloyd, Ian (Havant & W'loo)

      Elliott, Sir William

      Lloyd, Peter (Fareham)

      Emery, Sir Peter

      Loveridge, John

      Eyre, Reginald

      Lyell, Nicholas

      Fairbairn, Nicholas

      McCrindle, Robert

      Fairgrieve, SirRussell

      Macfarlane, Neil

      Farr, John

      MacKay, John (Argyll)

      Fenner, MrsPeggy

      Macmillan, Rt Hon M.

      Finsberg, Geoffrey

      McNair-Wilson, M. (N'bury)

      Fisher, Sir Nigel

      McNair-Wilson, P. (New F'st)

      Fletcher, A. (Ed'nb'gh N)

      Madel, David

      Fletcher-Cooke, SirCharles

      Major, John

      Fookes, Miss Janet

      Marlow, Antony

      Forman, Nigel

      Marshall, Michael (Arundel)

      Fowler, Rt Hon Norman

      Marten, Rt Hon Neil

      Fox, Marcus

      Mates, Michael

      Fraser, Peter (South Angus)

      Mather, Carol

      Fry, Peter

      Maude, Rt Hon Sir Angus

      Gardiner, George (Reigate)

      Mawby, Ray

      Gardner, Edward (S Fylde)

      Mawhinney,DrBrian

      Garel-Jones, Tristan

      Maxwell-Hyslop, Robin

      Gilmour, Rt Hon Sir Ian

      Mayhew, Patrick

      Glyn, Dr Alan

      Mellor, David

      Goodhart, Sir Philip

      Meyer, Sir Anthony

      Goodhew, SirVictor

      Miller, Hal (B'grove)

      Goodlad, Alastair

      Mills, Iain (Meriden)

      Gorst, John

      Mills, Peter (West Devon)

      Gow, Ian

      Moate, Roger

      Grant, Anthony (Harrow C)

      Monro, Sir Hector

      Gray, Hamish

      Montgomery, Fergus

      Greenway, Harry

      Moore, John

      Griffiths, E.(B'ySt.Edm'ds)

      Morgan, Geraint

      Griffiths, Peter Portsm'th N)

      Morris, M. (N' hampton S)

      Grist, Ian

      Morrison, Hon C. (Devizes)

      Grylls, Michael

      Morrison, Hon P. (Chester)

      Gummer, John Selwyn

      Mudd, David

      Hamilton, Hon A.

      Murphy, Christopher

      Hamilton, Michael (Salisbury)

      Myles, David

      798

      Neale, Gerrard

      Spicer, Michael (S Worcs)

      Needham, Richard

      Sproat, Iain

      Nelson, Anthony

      Squire, Robin

      Neubert, Michael

      Stanbrook, Ivor

      Newton, Tony

      Stevens, Martin

      Normanton, Tom

      Stewart, A.(ERenfrewshire)

      Onslow, Cranley

      Stewart, Ian (Hitchin)

      Oppenheim, Rt Hon Mrs S.

      Stokes, John

      Page, Richard (SW Herts)

      Stradling Thomas,J.

      Parkinson, Rt Hon Cecil

      Taylor, Teddy (S'end E)

      Parris, Matthew

      Temple-Morris, Peter

      Patten, Christopher (Bath)

      Thatcher, Rt Hon Mrs M.

      Patten, John (Oxford)

      Thompson, Donald

      Pattie, Geoffrey

      Thorne, Neil (Ilford South)

      Pawsey, James

      Thornton, Malcolm

      Percival, Sir Ian

      Townend, John (Bridlington)

      Pink, R. Bonner

      Townsend, Cyril D, (B'heath)

      Porter, Barry

      Trippier, David

      Prentice, Rt Hon Reg

      Trotter, Neville

      Prior, Rt Hon James

      van Straubenzee, Sir W.

      Proctor, K. Harvey

      Vaughan, Dr Gerard

      Raison, Rt Hon Timothy

      Viggers, Peter

      Rathbone, Tim

      Waddington, David

      Rees, Peter (Dover and Deal)

      Wakeham, John

      Rhys Williams, Sir Brandon

      Waldegrave, Hon William

      Ridley, Hon Nicholas

      Walker, Rt Hon P. (W'cester)

      Rifkind, Malcolm

      Walker, B. (Perth)

      Rippon, Rt Hon Geoffrey

      Wall, Sir Patrick

      Roberts, M. (Cardiff NW)

      Waller, Gary

      Roberts, Wyn (Conway)

      Ward, John

      Rossi, Hugh

      Warren, Kenneth

      Rost, Peter

      Watson, John

      Royle, Sir Anthony

      Wells, Bowen

      Sainsbury, Hon Timothy

      Wells, John (Maidstone)

      St. John-Stevas, Rt Hon N.

      Wheeler, John

      Scott, Nicholas

      Whitelaw, Rt Hon William

      Shaw, Giles (Pudsey)

      Whitney, Raymond

      Shaw, Michael (Scarborough)

      Wickenden, Keith

      Shelton, William(Streatham)

      Wiggin, Jerry

      Shepherd, Colin(Hereford)

      Wilkinson, John

      Shepherd, Richard

      Williams, D. (Montgomery)

      Shersby, Michael

      Wolfson, Mark

      Silvester, Fred

      Young, SirGeorge (Acton)

      Sims, Roger

      Younger, Rt Hon George

      Skeet, T. H. H.

      Speed, Keith

      Tellers for the Ayes:

      Speller, Tony

      Mr. Anthony Berry and Mr. Robert Boscawen.

      Spence, John

      Spicer, Jim (West Dorset)

      NOES

      Abse, Leo

      Cartwright, John

      Adams, Allen

      Clark, Dr David (S Shields)

      Allaun, Frank

      Cocks, Rt Hon M. (B'stol S)

      Alton, David

      Cohen, Stanley

      Archer, Rt Hon Peter

      Coleman, Donald

      Ashley, Rt Hon Jack

      Concannon, Rt Hon J.D.

      Ashton, Joe

      Conlan, Bernard

      Atkinson, N.[(H'gey,)

      Cook, Robin F.

      Bagier, Gordon A.T.

      Cowans, Harry

      Barnett, Guy (Greenwich)

      Craigen, J. M. (G'gow, M'hill)

      Barnett, Rt Hon Joel (H'wd)

      Crowther, Stan

      Beith, A. J.

      Cryer, Bob

      Benn, Rt Hon Tony

      Cunliffe, Lawrence

      Bidwell, Sydney

      Cunningham, Dr J. (W'h 'n)

      Booth, Rt Hon Albert

      Dalyell, Tam

      Boothroyd, MissBetty

      Davidson, Arthur

      Bray, Dr Jeremy

      Davies, Ifor (Gower)

      Brocklebank-Fowler, C.

      Davis, Clinton (Hackney C)

      Brown, Hugh D. (Provan)

      Davis, Terry (B'ham, Stechf'd)

      Brown, R. C. (N'castle W)

      Deakins, Eric

      Brown, Ronald W. (H'ckn'y S)

      Dean, Joseph (Leeds West)

      Brown,Ron(E'burgh, Leith)

      Dewar, Donald

      Buchan, Norman

      Dixon, Donald

      Callaghan, Rt Hon J.

      Dobson, Frank

      Callaghan, Jim (Midd't'n &P)

      Dormand, Jack

      Campbell, Ian

      Douglas, Dick

      Campbell-Savours, Dale

      Duffy, A. E. P.

      Canavan, Dennis

      Dunn, James A.

      Carmichael, Neil

      Dunnett, Jack

      799

      Dunwoody, Hon Mrs G.

      Jay, Rt Hon Douglas

      Eadie,Alex

      John,Brynmor

      Eastham, Ken

      Johnson, Walter (DerbyS)

      Ellis. R. (NE D'bysh're)

      Johnston, Russell (Inverness)

      English,Michael

      Jones, Rt Hon Alec (Rh'dda)

      Evans, loan (Aberdare)

      Jones, Barry (East Flint)

      Faulds,Andrew

      Kaufman, Rt Hon Gerald

      Field,Frank

      Kilfedder, JamesA.

      Fitch,Alan

      Kilroy-Silk,Robert

      Flannery,Martin

      Kinnock,Neil

      Fletcherjed (Darlington)

      Lamborn,Harry

      Ford,Ben

      Leadbitter,Ted

      Forrester,John

      Leighton,Ronald

      Foster, Derek

      Lestor, Miss Joan

      Foulkes,George

      Lewis, Arthur (N'ham NW)

      Fraser, J. (Lamb'th,N'w'd)

      Litherland,Robert

      Freeson, Rt Hon Reginald

      Lofthouse,Geoffrey

      Freud,Clement

      Lyon,Alexander(York)

      Garrett, John (Norwich S)

      Lyons, Edward (Bradf'dW)

      Gilbert, Rt Hon Dr John

      McCartney,Hugh

      Golding,John

      McDonald,DrOonagh

      Graham,Ted

      McKelvey,William

      Grant,George(Morpeth)

      MacKenzie,Rt Hon Gregor

      Grant, John (IslingtonC)

      McNamara,Kevin

      Hamilton,James(Bothwell)

      McTaggart,Robert

      Hamilton, W. W. (C'tral Fife)

      McWilliam,John

      Harrison, RtHonWalter

      Marks,Kenneth

      Hattersley, Rt Hon Roy

      Marshall,DrEdmund (Goole)

      Haynes, Frank

      Marshall, Jim (LeicesterS)

      Heffer, Eric S.

      Martin,M(G'gowS'burn)

      Holland,S.(L'b'th,Vauxh'll)

      Maynard, Miss Joan

      Homewood,William

      Meacher,Michael

      Hooley,Frank

      Mikardo,Ian

      Horam,John

      Millan,RtHonBruce

      Howell,Rt Hon D.

      Miller, Dr M.S.(E Kilbride)

      Howells,Geraint

      Mitchell,Austin(Grimsby)

      Hoyle,Douglas

      Mitchell, R. C. (Soton Itchen)

      Huckfield,Les

      Morris, Rt Hon C. (O'shaw)

      Hughes,Mark(Durham)

      Moyle, Rt Hon Roland

      Hughes, Robert (Aberdeen N)

      Newens,Stanley

      Hughes,Roy (Newport)

      Oakes, Rt Hon Gordon

      Janner,HonGreville

      O'Neill,Martin

      800

      Orme, Rt Hon Stanley

      Stallard, A. W.

      Owen, Rt Hon Dr David

      Stoddart,David

      Park,George

      Stott,Roger

      Parry,Robert

      Strang,Gavin

      Pendry,Tom

      Straw,Jack

      Penhaligon,David

      Summerskill,HonDrShirley

      Pitt,WilliamHenry

      Taylor, MrsAnn (Bolton W)

      Powell,Raymond(Ogmore)

      Thomas, DrR. (Carmarthen)

      Price, C. (Lewisham W)

      Jhorne,Stan(PrestonSouth)

      Race, Reg

      Tilley,John

      Radice,Giles

      Tinn,James

      Rees, Rt Hon M (Leeds S)

      Tomey,Tom

      Richardson,Jo

      Varley, Rt Hon Eric G.

      Roberts,Albert(Normanton)

      Wainwright,E.(DearrteV)

      Roberts,Allan(Boote)

      Wai nwrig ht, R. (Colne V)

      Roberts, Ernest (HackneyN)

      Walker, RtHon H.(D'caster)

      Roberts, Gwilym (Cannock)

      Watkins,David

      Robertson,George

      Weetch,Ken

      Robinson, G. (CoventryNW)

      Welsh,Michael

      Rooker, J. W.

      White, Frank R.

      Ross, Ernest (Dundee West)

      White,J. (G'gowPollok)

      Rowlands,Ted

      Whitehead,Phillip

      Ryman,John

      Whitlock,William

      Sandelson,Neville

      Willey,RtHonFrederick

      Sever,John

      Williams, Rt Hon A.(S'sea W)

      Sheerman,Barry

      Williams, Rt Hon Mrs (Crosby)

      Sheldon,Rt Hon R.

      Wilson, Rt Hon Sir H.(H'ton)

      Shore, Rt Hon Peter

      Wilson,William (C'try SE)

      Silkin,RtHonJ.(Deptford)

      Winnick,David

      Silkin, Rt Hon S. C. (Dulwich)

      Woodall,Alec

      Silverman,Julius

      Woolmer,Kenneth

      Skinner,Dennis

      Wright,Sheila

      Smith, Rt Hon J. (N Lanark)

      Young, David (Bolton E,)

      Snape, Peter

      Soley,Clive

      Tellers for the Noes:

      Spearing,Nigel

      Mr. Allen McKay and Mr. George Morton.

      Spriggs,Leslie

      Question accordingly agreed to.
      Bill read the Third time and passed.

    RESERVE FORCES BILL [Lords]
    Not amended (in the Standing Committee), considered.
    Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
    Bill accordingly read the Third time and passed, without amendment.

    Statutory Instruments, &c.
    Mr. Bob Cryer rose——
    Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I must put the Question.
    Mr. Cryer: On a point of order, Mr. Deputy Speaker. I had risen, seeking to catch your eye.
    Mr. Deputy Speaker: Order. The motion cannot be debated.
    Motion made, and Question put forthwith pursuant to Standing Order No. 73A(5) (Standing Committee on Statutory Instruments, &c.).

    RATING AND VALUATION
    That the Valuation (Scotland) Order 1982, a copy of which was laid before this House on 25th February, be approved.— [Mr. Boscawen.]
    Question agreed to.

    Police Accountability
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]
    11.4 pm
    Mr. Alexander W. Lyon: I wish to raise the issue of police accountability, which at present is clouded in a good deal of political controversy. In the short time that is available to me, I hope to clarify some aspects of the matter and take them out of the area of political controversy.
    The way in which we are policed and the effectiveness of the police force are matters of serious concern to all who are interested in the good of our society. The mere fact that the Labour Party has adopted a policy about police accountability should not make it the subject of political controversy. I hope that the Minister will judge the arguments on their merits rather than try to score points in a political debate. This is, after all, a serious matter.
    The Royal Commission on the police in 1959 said that it thought that chief constables needed to be more accountable to their police authorities, and it made recommendations about the way in which that should be done. The Police Act 1964 was designed to implement those recommendations, albeit with some changes. In his Second Reading speech, the then Home Secretary, Mr. Henry Brooke, said:
    "The Bill does not give the police authority power to issue instructions to the chief constable, but it has not got that power now. Its general responsibility is to secure the maintenance of an efficient force, and it will have every right to discuss with: its chief constable how the men and equipment with which it has provided him can be most effectively used in conducting police operations. I have no doubt that every chief constable who is up to his job welcomes discussion of this kind".—[Official Report, 26 November 1963; Vol. 685, c. 87.]
    That shows that it was intended that the powers in the 1964 Act should be used with the intention of bringing a chief constable more under the control of the police authority not by giving the police authority decisive power to make decisions, but by ensuring that the chief constable would not make decisions without consultation and be influenced by the pressure that was brought to bear on him in the course of those discussions.
    Therefore, it is not in any way wrong, either morally or politically, for people now to call for the greater exercise of the power of the police authority. There are 43 police authorities in England and Wales outside the metropolis, and in the metropolis the police authority is the Home Secretary. Outside the metropolis, those police authorities are committees of the local county council. They are not subject to the decision of the county council, even though they report to it. They are composed of one- third of magistrates and two-thirds of locally elected councillors. They are constantly told by chief officers throughout the country that they are not in any way entitled to consider the policing policy of the chief constables; they are simply to provide the finance and resources for chief officers to carry out their policies.
    That is where I take issue with chief officers and to some extent with the Home Office, which tends to support their attitude. In my view, that is not what the Police Act either said or intended. It is clear from the Home Secretary's speech at the time that he did not intend that either. Section 4 of the Act says that the police authority shall

    803
    "secure the maintenance of an adequate and efficient police force for the area".
    It is quite impossible to see how it can do that unless it has some discussion about the policing policy of the area.
    For instance, is it right that the police should be used on the beat or simply in a reactive position in panda cars? How can the police authority decide whether it has an efficient police force unless it can determine that central issue of policing policy, which is an area of serious contention between different chief officers. How can the authority decide whether it is operating an adequate and efficient police force if it does not determine whether officers should be investigating burglaries and criminal damage or should be policing traffic or football crowds? Choices have to be made in the allocation of resources. The police authority can only determine whether it has an efficient and adequate police force in its area if it is involved in policy decisions.
    Section 5 of the Act states that the police force
    "shall be under the direction and control of the chief constable."
    It is on those words that most chief constables lay their claim to be solely responsible for policing policy in their areas. The interesting provision is section 12, which was the result of the recommendations of the Royal Commission. Section 12(2) states:
    "The chief constable of a police force shall, whenever so required by the police authority, submit to that authority a report in writing on such matters as may be specified in the requirement, being matters connected with the policing of the area for which the force is maintained."
    There is no indication that the chief constable has any discretion in the matter at all. Indeed, the next subsection makes it clear that, if he does not like the request and thinks that it is not needed for the discharge of the functions of the police authority, he may request authority to refer the requirement to the Secretary of State. In other words, if the chief constable does not like it, he cannot refuse, but he can refer the matter to the Secretary of State. Only once since 1964 has any chief constable done that. The then Home Secretary turned down his request and backed the police authority.
    Therefore, the position in Manchester at a recent meeting of the police authority is a little surprising. The chairman of the police authority asked the chief constable certain questions about a policing operation at Laurence Scott. He was told by the chief constable that he had no right to ask the questions. Under section 12, in my view the chief constable was without the law. In those circumstances, he was acting illegally, not the chairman of the police authority. Nevertheless, in order to restore amity, the chairman of the police authority withdrew the questions. The chief constable then had the cheek to go out and tell the press that he was perfectly right in the attitude that he had taken, and that it was the chairman of the police authority who did not have the legal power to ask the questions. I believe that that is a breach of section 12.
    The handling of complaints from the public has now become a central feature of the argument about the police. In section 50, the police authority is responsible for ensuring that the police complaints system is adequately policed. Nevertheless, most police authorities fail to do anything more than look at the book occasionally to ensure that the complaints are recorded, but they have no machinery by which complaints can be properly monitored. That has recently been started by the
    804
    Merseyside authority, and it was considered to be something of a revolution. Nevertheless, that is part of the powers of the Police Act. I maintain that the powers, although they are not as extensive as I would wish, allow a police authority to exercise a proper degree of control of policing policy in its area as long as the chief constable recognises that he is subject to those powers.
    The Minister of State should make that perfectly plain and tell chief officers that they are not isolated dictators who can determine the policing policy in their areas without let or hindrance from police authorities. They are required by the Act to be accountable, in a general sense, to their local communities.
    However, that is not enough. The hon. Member for Bury St. Edmunds (Mr. Griffiths), who represents the Police Federation in the House, said in a recent debate that about 21 chief constables are responsible for the fate of police-community relations in our inner cities. He is right, and that is far too great a responsibility to put on the shoulders of such a small number of men. It is only right that the community should have a far greater say in what goes on in police-community relations in the inner cities. The right people for that are locally elected councillors.
    I expect the next Labour Government to ensure that police authorities have an absolute say in the control of policing policy. That is not to say that the authorities will deal with day-to-day minutiae, any more than education committees deal with the day-to-day minutiae in our schools. It is for the director of education to apply the general policy. However, police authorities would be responsible for overall policy.
    The authorities would not have a say in who should or should not be prosecuted. I should prefer to put that in the hands of a public prosecutor, but if it is to stay with the police, there is no reason why such decisions should be in the hands of a police authority.
    However, in the way that we are policed, how the police react to us and how we react to the police, there should be a focus of control—determined by the public and not by an independent official, however prestigious—so that if the people do not like the way things are going they can get rid of the decision makers and put in someone else. That is the answer on the GLC and its contemporary leadership. If people do not like Ken Livingstone they can get rid of him at the next election. If people do not like Sir Kenneth Newman they cannot get rid of him by an election. Surely that is what democracy is all about.
    London poses a special problem, because there is no police authority in the capital at the moment. It is only right that London should have such an authority. The question is: What sort of authority? Should we have a GLC police authority for the whole metropolis? I suspect that the Metropolitan Police is far too big for its own good or for our good and that we ought to carve up the force into four forces, which would be accountable to the boroughs that they policed. Perhaps we need four police authorities of a similar nature and size to the police authorities outside London. Perhaps the Home Secretary should retain the residual powers over the Special Branch and the policing of the Palace of Westminster; that is a matter for discussion.
    However, it makes no sense that those who pay for the policing of London have no say in how London is policed. It is a considerable injustice and that is not the view only of councillors Boateng and Livingstone. In 1978, Lord Marshall, a distinguished scion of the Tory Benches in

    805
    another place said in a report on the GLC that the council ought to have a police committee. Anyone who considers the justice of the matter will agree that that is the proper thing to do. It is wrong to say that the Home Secretary is adequate as a police authority, because the Home Office has less control over Scotland Yard than police authorities have over their police forces at the moment.
    The Home Office has a great many other responsibilities. It simply does not have the time to worry about what Scotland Yard is doing, unless there is a crisis, and then it can and does come in. For that reason, London should have a police authority, and it should have the powers that I have mentioned.
    I stress again that, even if the Minister does not go that far with me, he should make it clear to those chief officers who are getting just a bit too big for their boots that they have to be accountable to their police authorities in the way described by Henry Brooke in the passage that I read at the beginning of my speech.
    11.20 pm
    The Minister of State, Home Office (Mr. Patrick Mayhew): I welcome the opportunity, offered to us by the hon. Member for York (Mr. Lyon), to consider, once again, the proper position of police authorities and the whole question of police accountability.
    My right hon. Friend the Home Secretary, and preceding Home Secretaries, have repeatedly said that the police are, and must remain, accountable to the public whom they serve. The hon. Gentleman and his colleagues want local responsibility for policing placed—with the exception, as I understand it, of the Metropolitan Police to some limited extent—solely in the hands of elected representatives.
    At the same time, the hon. Gentleman and his colleagues have expressed their overall approval of the recommendations of Lord Scarman's report. It is proper to point out that that report stated that on the whole the statutory machinery under the Police Act 1964 works well. Lord Scarman recommended that consultation at local level should extend beyond elected representatives. I shall come to the detail of what the hon. Gentleman said, and to what I wish to say about the consultation, in a few moments.
    The Police Act 1964 gave effect, as the hon. Gentleman has reminded us, to the recommendations of the Royal Commission on the police. The Royal Commission identified two salient features of the structure of policing that were needed, as it thought, for each community. The first of those salient features was that chief officers of police should have complete discretion in directing and deploying their forces. The Royal Commission accepted that must be so if the criminal law was to be enforced impartially.
    The second feature was that the structure of forces was based on the local community. The Royal Commission noted that the local body responsible for administering the service—the police authority—could give advice and guidance to a chief constable on local problems, without detracting from his operational independence. The Royal Commission considered that the lack of control that this relationship implied could be offset by increasing a chief constable's accountability for his actions. It was that delicate balance of interests that the Royal Commission sought to preserve in making its recommendations. Its
    806
    conclusions were generally accepted by the Government of the day and were enshrined by Parliament in the Police Act 1964.
    That Act recognises the three elements that need to combine to provide effective policing arrangements—professional expertise, the interest of the local community and the national interest. Those are reflected in the responsibilities and powers given by the Act to the chief constable, to the police authority and to my right hon. Friend the Secretary of State. There have been many changes in our society since 1964, but those essential elements remain.
    The Royal Commission acknowleged the need for chief constables to be operationally independent. Police authorities may not instruct them to institute proceedings in a particular case, or direct them in the deployment of their forces. Neither may my right hon. Friend, except that in the interests of public safety or order, he can direct a chief constable to provide assistance to another area. Normally, such arrangements are made satisfactorily between chief officers, but this power in section 14(2) of the Police Act, reflects my right hon. Friend's overall responsibility for maintaining the Queen's peace.
    Independence from political control is one of the key elements in our policing arrangements. I believe that, there can be no room for political interference from central or local government. The operational dependence of chief officers is essential for the confidence of Parliament and the people in the police discharging their duty impartially. Subject to the point about accountability, that is the answer to the question: "Why should the electorate of London be able to dismiss Mr. Ken Livingstone but not Sir Kenneth Newman?" The answer is to be found in the desirability, insisted upon by Parliaments for more than a century, that the police administer the law impartially.
    The Royal Commission accepted that the criminal law had to be enforced impartially. In the theory of democracy, we talk about the people having control, but we must recognise that those whom the people elect to have control may be removed after three or five years at the next general or local election. A chief constable has to ensure that a police force enforces the law impartially. If he were to be dependent for the tenure of his ofice upon continuing to retain the favour of the elected council of a local authority, the greater would be the risk that the law would not be enforced impartially, but rather with an eye to keeping in favour with the local authority.
    Mr. Alexander W. Lyon: Why does that danger exist for the police, but not to the Army, Navy and Air force in relation to which the possible power of the Executive is even greater?
    Mr. Mayhew: The Army, Navy and Air Force are responsible to Parliament and to relevant Ministers and do not enforce the law. The police enforce the law and long may that distinction remain in this country.
    The hon. Gentleman asked me to remind chief constables of their duty to consult. There is no need to remind them of that because my right hon. Friend has spoken on the subject and was quoted in Lord Scarman's report at paragraph 5.64 from the lecture that he gave in Edinburgh in 1980 when he said:
    "it has become increasingly desirable that Police Authorities should see themselves not just as providers of resources but as a means whereby the Chief Constable can give account of his

    807
    policing policy to the democratically elected representatives of the community and, in turn, they can express to him the views of the community on these policies."
    Lord Scarman continued:
    "It is necessary also that Chief Officers of Police should accept and, indeed, encourage Police Authorities in their adoption of this role. A police force, the Chief Officer of which does not discuss, or allow his senior officers to discuss, matters of policing policy openly and responsibly with the community, is certain in the long run to find his efficiency undermined by loss of community support."
    My right hon. Friend has already made clear the importance he attaches to the need for consultation, and I need say nothing to amplify my right hon. Friend's remarks.
    Independence from political control is a key element in our policing arrangements. There can be no room for political interference from either central or local government. The chief constable has a statutory duty to give an account of his policies to the police authority. Ultimately, my right hon. Friend is accountable to the House for the conduct of chief constables and the police service nationally. My right hon. Friend is not, of course, responsible for statements made by individual chief officers. The police are there to serve and work with all groups in the community. If they are to achieve this, my right hon. Friend believes it is important that chief officers must be seen to be impartial. They have an onerous task. There is general agreement in the House that much attention and effort needs to be put into the training of the police to cope with the compexity of their job today. The Government are doing that. However, the hon. Gentleman's view is that police authorities should be recognised in the end as knowing better and be able to tell a professional police officer how he is to do his job. That point was dealt with in the second part of the hon. Gentleman's speech.
    That idea is contrary to our philosophy of policing in Britain. No politician or pressure group should be able to direct the police. That could lead to disaster. The police need advice, support and assistance from the police authorities and community at large in carrying out what is often a difficult task. It is to his police authority that a chief constable should look first for advice on whether the policies of the force are in tune with the needs and wishes of local people. Members of the police authority should have a deeper understanding than most of the problems that face the police and the limitations on what they can do because part of their statutory responsibility to maintain an efficient force is to sustain the morale of the police. The police are, of course, their constituents, too, and they serve their constituents.
    808
    The hon. Gentleman talked about the position in London, naturally enough. The House knows that the constitutional position under which my right hon. Friend the Home Secretary is police authority for the Metropolis is long standing, going back to the inception of the Metropolitan Police in 1829. Successive Governments of all complexions and the Royal Commission on the police in 1962 have consistently taken the view that the exceptional arrangement in London is justified by the nature of the problems of policing the capital city and seat of government and also by the fact that the force provides a number of services on a national basis. Lord Scarman recently recognised that there were good reasons for the "national accountability", as he put it, of the Metropolitan Police, adding that he did not believe that Parliament would wish to see the ultimate responsibility for policing the nation's capital transferred from a senior Cabinet Minister, accountable to Parliament, and put in the hands of a local body, however important. That is also the Government's view and my right hon. Friend has repeatedly made it clear that the Government have no intention of going down that road.
    The fundamental point is that there should be no political interference in the enforcement of the law. Thus, the Home Secretary, like other police authorities, may not give directions to the commissioner either about the way he deploys his resources for specific operations, or about the institution of criminal proceedings. Yet the powers which some appear to be seeking over the day-to-day activities and operations of the force in London would have precisely the opposite effect.
    The suggestion of an authority consisting of the Home Secretary and local authority representatives would lead to considerable confusion and would be unworkable in practise. The Metropolitan Police district covers some 40 local authorities, apart from the GLC, and it is difficult to imagine that a body of the size that would be needed truly to represent all those authorities would ever reach a conclusion. That would be dangerous.
    The full support of every law-abiding member of the community is essential to effective policing. That is why my right hon. Friend welcomed Lord Scarman's recommendation that there should be local consultation arrangements. In his view, such arrangements would in no way detract from the role of the police authority. On the contrary, improved arrangements—
    The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
    Adjourned at twenty-six minutes to Twelve o'clock.

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  Welsh Water Authority
EDUCATION AND SCIENCE
  Commercial Insurance Market
  Commercial Insurance Market
  Further Education
  Further Education
  York
  York
  Local Government Expenditure
  Local Government Expenditure
EMPLOYMENT
  Community Enterprise Projects (Leeds)
  Community Enterprise Projects (Leeds)
  Young Persons (Wages)
  Young Persons (Wages)
  Construction Industry
  Construction Industry
  Wages Councils
  Wages Councils
  Manufacturing Industry
  Manufacturing Industry
  Unemployment Statistics
  Unemployment Statistics
  Disabled Persons
  Disabled Persons
  Steel Industry
  Steel Industry
  Farm Workers (Earnings)
  Farm Workers (Earnings)
  Textile Industry (Lancashire)
  Textile Industry (Lancashire)
  Spring Bank Holiday
  Spring Bank Holiday
  Youth Unemployment
  Youth Unemployment
  Training Opportunities Scheme
  Training Opportunities Scheme
  Elephant Jobs Limited
  Elephant Jobs Limited
  Job Release Scheme
  Job Release Scheme
  Clinical Waste
  Clinical Waste
PAYMASTER GENERAL
  Rayner Review
  Rayner Review
ENERGY
  Electricity Production (Costs)
  Electricity Production (Costs)
  North Sea Oil Prices
  North Sea Oil Prices
  Gas Gathering Systems
  Gas Gathering Systems
  European Community (Grants and Loans)
  European Community (Grants and Loans)
  Retirement Pensioners (Household Costs)
  Retirement Pensioners (Household Costs)
  Nuclear Power (Research and Development)
  Nuclear Power (Research and Development)
  Wave Energy
  Wave Energy
  Subsidence Damage
  Subsidence Damage
OVERSEAS DEVELOPMENT
  St. Helena
  St. Helena
SCOTLAND
  Business Start-up Scheme
  Business Start-up Scheme
  Hospital Waiting Lists
  Hospital Waiting Lists
  National Health Service
  National Health Service
  Biotechnology
  Biotechnology
DEFENCE
  Britannia Royal Naval College, Dartmouth
  Britannia Royal Naval College, Dartmouth
  Royal Navy
  Royal Navy
  Tornado F2 Aircraft
  Tornado F2 Aircraft
  RAF Mildenhall (USAF Aircraft)
  RAF Mildenhall (USAF Aircraft)
  HMS "Invincible"
  HMS "Invincible"
  Nuclear Propulsion Fuel
  Nuclear Propulsion Fuel
  Soviet Vessels (Clyde Approaches)
  Soviet Vessels (Clyde Approaches)
  Scientific Survey Ships
  Scientific Survey Ships
  Falkland Islands
  Falkland Islands
AGRICULTURE, FISHERIES AND FOOD
  Council of Agriculture Ministers
  Council of Agriculture Ministers
  Common Agricultural Policy
  Common Agricultural Policy
  Beam Trawling
  Beam Trawling
EUROPEAN COMMUNITY
  Anniversary Celebrations
  Anniversary Celebrations
FOREIGN AND COMMONWEALTH AFFAIRS
  Office of Foreign Secretary (200th Anniversary)
  Office of Foreign Secretary (200th Anniversary)
  Parliamentary Questions
  Parliamentary Questions
  Pakistan Nationals
  Pakistan Nationals
  Select Committees
  Select Committees
  Namibia
  Namibia
SOCIAL SERVICES
  Triazolam
  Triazolam
  Supplementary Benefit
  Supplementary Benefit
  National Insurance Fund
  National Insurance Fund
  Speech Therapists
  Speech Therapists
  Social Security Commissioners (Decisions)
  Social Security Commissioners (Decisions)
  Pneumoconiosis and Byssinosis
  Pneumoconiosis and Byssinosis
  Mobility Allowance
  Mobility Allowance
  Death Grant
  Death Grant
  Porton Down
  Porton Down
  Health Equipment and Expertise (Export)
  Health Equipment and Expertise (Export)
  21-hour Rule
  21-hour Rule
  Post Mortems
  Post Mortems
  National Health Service (Sales of Land)
  National Health Service (Sales of Land)
  Canon Communicator
  Canon Communicator
  Fuel Bills
  Fuel Bills
  Social Security Advisory Committee
  Social Security Advisory Committee
  Nurses
  Nurses
TRANSPORT
  South Circular Road
  South Circular Road
  Seat Belts
  Seat Belts
  British Rail Hotels
  British Rail Hotels
  A40 (Road Works)
  A40 (Road Works)
  Roads (Construction)
  Roads (Construction)
  London Transport
  London Transport
ENVIRONMENT
  Property Services Agency (Properties and Sites)
  Property Services Agency (Properties and Sites)
  Homes Insulation
  Homes Insulation
  Shared Purchase Housing Schemes
  Shared Purchase Housing Schemes
  Council House Sales
  Council House Sales
  Leaseholders and Shortholders
  Leaseholders and Shortholders
  Local Authority Housing Capital Expenditure
  Local Authority Housing Capital Expenditure
  Cmnd. 8524
  Cmnd. 8524
  Serpentine Lido
  Serpentine Lido
  Countryside Commission
  Countryside Commission
  Water Rates
  Water Rates
  Swifts Lane Gipsy Site, Bagshot
  Swifts Lane Gipsy Site, Bagshot
  Manchester (Financial Assistance)
  Manchester (Financial Assistance)
  Local Authority Expenditure
  Local Authority Expenditure

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES On the Woolsack.
Prayers—Read by the Lord Bishop of Portsmouth.

The Lord Carrington—Resignation Tributes
Lord Peart: My Lords, the House will have heard this morning of the resignation of the Foreign Secretary, Lord Carrington. On behalf of these Benches, and I am sure all parts of the House, I should like to pay a tribute to the noble Lord for all his work as a Member of your Lordships' House. Obviously this is not the moment to comment at all upon the events which have led to his resignation.
What I want to say is that this is a sad day for your Lordships' House. Irrespective of party, we have all greatly admired him. He has been a Leader of the House as well as Leader of the Opposition. Apart from the war years and his service as High Commissioner in Australia, he has been an active Member of the House for over 40 years and has served us with distinction. Although, of course, we have often joined battle with him politically, we want to express our warmest thanks and best wishes to him. We hope that we shall see him here in the future. He can be sure of a most genuine welcome from all of us, whichever Benches we occupy.
Lord Wigoder: My Lords, it would of course be quite inappropriate to comment at this moment upon the unhappy events of the last few weeks. It is right that I should join with the noble Lord, Lord Peart, in saying that this is also a sad day for the Liberal Peers. This is a sad day, first, because the country has lost
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the services of a most distinguished and able Foreign Secretary. It is a sad day, secondly, for your Lordships' House because we have lost for the moment a representative in one of the higher parts of the Government who has, by his very position there, caused such esteem to follow upon your Lordships' House.
It is a sad day also for all the Members of your Lordships' House who, as individuals, have always found in the noble Lord, Lord Carrington, a person of such friendship, charm and courtesy. I am sure that all your Lordships' House will hope that the time is not far removed when the noble Lord will be able again to resume his position in the higher counsels of our state for which he is so well qualified.
Lord Shackleton: My Lords, my sorrow at the events of the last few days has been compounded by the loss to this country and to this House of Lord Carrington. I had much experience, as did my noble friend Lord Shepherd, of working with him as we have to work in your Lordships' House. The fact is that he has followed the great British tradition (and I wish it had not been so in his case) that, feeling he was the responsible Minister, whoever else may have been to blame—and we will not even discuss this—he must go.
His services here have been almost immeasurable. Not long ago I had occasion to speak at the Oxford Union on the future of the House of Lords. I was defeated on the simple ground that my chief opponent, a Left-wing Member of the Labour Party, said: "If only they abolished the House of Lords, Lord Carrington could he Prime Minister". We think of his humour, his wisdom, his quickness and his skill as a speaker. I remember on one occasion my daughter had heard us debating. She said, "Daddy, you made a very good speech", and then she said, "I wish you could be a bit more like Lord Carrington".
He brought a wisdom, and he brought a caring for the House. It was possible to deal with him as a man of great honour; a man of humour; a man of understanding. He served this House both in Government and in Opposition, and we all deeply regret his departure.

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The message of every Member of your Lordships' House, and certainly of previous Leaders of this House, is one of thanks to him and of appreciation, and we hope he will in the future have an opportunity to continue the great service he has already given to this country.
Lord Windlesham: My Lords, as one who worked closely with the noble Lord, Lord Carrington, both in Government and in Opposition, I should like from this Bench to endorse everything that has been said in tribute. His resignation is highly regrettable on personal grounds. The noble Lord has been, I think many people would agree, one of the best Foreign Secretaries of recent years, irrespective of party; nevertheless, his resignation is worthy and indeed characteristic of the man we know and respect. I should like to leave this thought with your Lordships today, as we react to the sudden news of Lord Carrington's resignation, that it is by acts of selflessness of this sort that the British parliamentary system, confused though it often is, maintains its honour.
Lord Aylestone: My Lords, on behalf of my colleagues on this Bench I should like to add a brief word. When history is written I am sure that the name of Lord Carrington will go down as one of the outstanding Foreign Secretaries of this country. We have the highest regard for him. We are sorry that we are losing him as Foreign Secretary, but I am sure the whole House will agree with me that he has proved to be what we always knew him to be—a man of very high integrity and great honour.
Lord Brockway: My Lords, I was the Member of this House who defeated my noble friend Lord Shackle-ton on a Motion of the Oxford Union suggesting that if the House of Lords were abolished, the noble Lord, Lord Carrington, would be Prime Minister. I simply wish to comment that even the severest critics of this Government deplore his resignation, how much we regret that the suggestion was made in another place and that we feel confident that, in the present situation, his advice would have been able to solve the situation in a peaceful way. We deeply regret his resignation.
The Lord Bishop of Norwich: My Lords, I am sure I speak for all the Members of this Bench in saying what a shock and sorrow it has been to us. We were not only interested but in prayer for him during the winning of the glittering prize of the Zimbabwe long discussions. It is with great sorrow that I echo, on behalf of my brother bishops on this Bench, everything that has been said in all parts of the House. We wish him well.
The Earl of Halsbury: My Lords, I believe it would be the wish of some of my colleagues on the Cross-Benches that our voice should not be silent on this sad occasion. Naturally, I shall not go into the reasons which have led to the present very sad state of affairs; it is our tradition that it must be so, but it is sad to feel that at a time of national emergency, the Government should lose one of its staunchest and best members. We cannot have it both ways. As a friend, I deplore his going on this occasion.
The Chancellor of the Duchy of Lancaster (Baroness Young): My Lords, I thank the noble Lord, Lord Peart, and all other noble Lords who have paid tribute this afternoon to my noble friend Lord Carrington. As noble Lords have said, this is not an appropriate moment to dwell on the immediate issues concerning his resignation, but I have been deeply moved at the real sense of expression of the great loss of my noble friend, who will be greatly missed in all parts of your Lordships' House.
As noble Lords will know, my noble friend is not in his place today because he is reading the lesson at the memorial service to the late Lord Butler. I think it right to say that it is rare indeed to find a man who commanded such respect and affection in all parts of your Lordships' House and who has done so for so many years. He was a man of international stature and he will not be forgotten for his part in the settlement and giving of independence to Zimbabwe, and in that work the whole of your Lordships' House basked in some of his reflected glory.
That is not surprising, for my noble friend Lord Carrington put this House very high on his list of priorities. I am sure noble Lords will recall that only last Tuesday he returned from Brussels to make a Statement to your Lordships' House, and I am glad—I think we all must be—that the House sat on Saturday that he might have an opportunity to speak to your Lordships from the Front Bench.
I am particularly pleased that so many of your Lordships have paid tribute to his great personal qualities. He was a very good friend to me. We all know his kindness, his friendship and, above all, his great sense of humour. I feel it a personal loss that he, who always called me the "bossette", should not be able to do so again. But it was, I think, in the selflessness of his going that he was true very much to his own sense of duty and honour.

Spectacle Lenses: Low-Cost Imports
2.48 a.m.
Lord Rugby: 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 will make a statement about the cheap foreign imports of lenses from which the opticians have allegedly made £6 million profit out of the National Health Service, and about the source of these imports.
Lord Cullen of Ashbourne: My Lords, the unintended profits referred to are believed to have been made mostly on spectacles containing single-vision lenses. From the overseas trade statistics and information from the industry, it is estimated that the United Kingdom imports roughly 35 per cent. of such lenses used.
Lord Rugby: My Lords, may I be assured by the Minister that, under the disciplinary powers conferred on the General Optical Council under the Act, they in fact exercise those powers to prosecute their own

5
members if necessary, where they are guilty of fraudulent practice?
Lord Cullen of Ashbourne: I feel I should set the matter in some perspective, my Lords. The noble Lord is concerned about the £6 million which had been unintentionally overpaid to opticians. On the other hand, the department owes the optical industry something like £70 million for underpayments, of which about £191/2 million has now been paid. Negotiations are proceeding on both counts.
Baroness Jeger: My Lords, does the Minister recall that on 18th February he told the House that the Director-General of Fair Trading was examining the whole position and that talks were going on with the Optical Whitley Council because many of your Lordships felt that a fee of £4·50 for examination and £4·20 for dispensing was rather inadequate and perhaps a temptation to find expenses in other ways? It would reassure many of us who are concerned with the matter if the Minister would say what point the talks have reached.
Lord Cullen of Ashbourne: My Lords, I feel sure that the noble Baroness knows that new fees have been fixed since 1st April. The fees that are now being fixed are interim fees while the negotiations are going on for a full settlement of all the outstanding issues.
Lord Donaldson of Kingsbridge: My Lords, is the noble Lord aware that many of us who are interested in this subject are not specially critical of the opticians for making too much money? We are critical of the Government for allowing them to have a monopoly. Is the noble Lord aware that the glasses that I am now wearing, and through which I see extremely well, cost 10 dollars in New York across the counter? Why should the British public be deprived of this perfectly reasonable outlet for their money in order to improve their sight, or to make it worse, as they prefer?
Lord Cullen of Ashbourne: My Lords, it might be going a little far to say so, but one might hope that when this large amount of money is repaid to opticians—and £70 million is a lot of money—there will be a fair chance that the charges for private spectacles will not go up, or possibly may come down.
Lord Monson: My Lords, following what the noble Lord, Lord Donaldson of Kingsbridge, has just said, can the Minister confirm that there is no legal impediment whatsoever to the sale of simple reading spectacles on board cross-channel ferries outside the 3-mile limit? If that is the case, would not such an innovation on the one hand help the consumer and on the other hand help the strained financial situation of the British Rail Sealink subsidiary?
Lord Cullen of Ashbourne: My Lords, I feel that the noble Lord is ranging a little widely.
Baroness Masham of Ilton: My Lords, may I ask the noble Lord what is the difference between cheap imported lenses and non-imported lenses?
Lord Cullen of Ashbourne: My Lords, the difference lies in the fact that the cheap imported lenses make it possible for the opticians to make a profit. That is really where the problem has arisen, and where the opticians buy their lenses has nothing to do with the department.
Lord Hunter of Newington: My Lords, can the Minister tell us what is the present situation regarding the Office of Fair Trading, to which the Government have made a reference?
Lord Cullen of Ashbourne: My Lords, unhappily, I cannot give a precise answer to that point. The Office of Fair Trading has promised to report during the course of this year.

Perivale, Middlesex: Roadworks
2.53 p.m.
Lord Molloy: 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 will support the London Borough of Ealing in an endeavour to maintain traffic flow and avoid congestion at the point of the major roadworks now in progress on Western Avenue at Perivale, Middlesex.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, it is an unfortunate fact that major improvement measures to busy roads that will ultimately benefit traffic flow and safety can cause problems while under construction. Every effort is being made to keep those problems to a minimum at Perivale. The Metropolitan Police and the London Borough of Ealing are both co-operating closely with my department to achieve this.
Lord Molloy: My Lords, is the noble Lord the Minister aware that the road works now taking place at Perivale, in Middlesex, are part of a massive programme, which 1 am sure will aid everybody in the end, but that, for example, when the flyover was being constructed a few miles away at the Greenford round-about, there was not merely massive congestion, but also a threat of danger to life and limb which would not have arisen had there been sensible and close liaison among the council, the GLC and the Department of Transport? Will the Minister please consider urging that there should be close liaison and that the views of local associations should be taken into consideration so that nothing in the way of a serious accident or unnecessary congestion occurs?
Lord Bellwin: My Lords, I shall be very glad to pass on the noble Lord's comments to those concerned. He may be interested to know that I understand that the contractor will soon be making available a third lane at the Perivale signals. This should come about within the next few weeks.
Lord Molloy: My Lords, may I thank the noble Lord the Minister for the serious manner in which he has treated this matter? The people who live in the area—and I am one of them—will be most grateful to him.

Mobility Allowance
2.56 p.m.
Baroness Lane-Fox: 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 at what level it is proposed that the mobility allowance should be fixed next November; how this compares with the figure in May 1979; and how many people are now eligible to benefit from the allowance.
Lord Cullen of Ashbourne: My Lords, as from November 1982, mobility allowance will rise to £18.30 a week, tax free, compared to its May 1979 level of £10 a week, subject to tax. Over 217,000 people now receive the allowance.
Baroness Lane-Fox: My Lords, is my noble friend the Minister aware that this really is a most welcome increase, and that freeing the allowance from tax will benefit very many disabled people who go out to work and have other taxable income? Is he further aware that in this previously deprived area the rise means that by November the mobility allowance will have been increased by over 80 per cent. under the present Government, though, sadly, deprivation remains for those debarred the scheme on grounds of age?
Lord Cullen of Ashbourne: My Lords, I am grateful to my noble friend for her comments about the allowance which has, I think, received particular help from the present Government.
Lord Avebury: My Lords, we are very grateful for the increases which the noble Lord has announced, but can he relate them to the increases in costs of motoring which have taken place over the period in question?— bearing in mind that the costs of motoring, such as petrol and licence fees, have gone up by far more than the cost of living generally.
Lord Cullen of Ashbourne: My Lords, I understand that the transport and vehicle group component of the retail price index has risen by 42 per cent. since May 1979; the mobility allowance has increased by 65 per cent.
Baroness Masham of Ilton: My Lords, is the Minister aware that those old age pensioners who are disabled do not receive the benefits of cheap travel on buses and trains which other old age pensioners receive?
Lord Cullen of Ashbourne: My Lords, it is true that mobility allowance does not give a passport for free travel, but I am not sure that I quite see the drift of the noble Baroness's supplementary question.
Baroness Masham of Ilton: My Lords, perhaps I can make it clearer by asking the noble Lord whether he is aware that old age pensioners do not receive the mobility allowance? If they have a disability they are also at a disadvantage compared with their peers—other old age pensioners who are not disabled—since they cannot receive the benefits of cheap travel on buses and trains which other old age pensioners have. Perhaps the noble Lord is not aware that I have received many letters from old age pensioners who have disabilities.
Lord Cullen of Ashbourne: I apologise, my Lords. The position is that when the last Administraton brought in mobility allowance it was on the basis of pension age as the upper limit—60 for women and 65 for men. Since then, gradually, the age limit for women has risen from 60 to 65, and both sexes who become eligible for the allowance before the age of 65 can continue to be eligible for a further 10 years, up to the age of 75. But at this stage it is not possible to scrub the limit altogether, because the cost of that would be £400 million pounds.
Baroness Jeger: My Lords, may I support the noble Baroness, Lady Masham of Ilton? I do so in no party sense, because these rules have been accepted by successive Governments. I find that there is an increasing sense of unfairness among people who receive the mobility allowance; they fear that when they reach pension age it will be taken away. If the noble Lord will confirm that it will not be taken away, so that the only people who will be deprived by the rule
will be those who apply for it after pension age, that would be of interest to many people in this House.
Lord Cullen of Ashbourne: My Lords, the noble Baroness has put the case absolutely correctly. Anyone who qualifies for and receives the allowance before the age of 65 will continue to receive it until the age of 75.
The Earl of Onslow: My Lords, is there not something rather unfair in a situation in which a person who breaks his back in a traffic accident when aged 64 years can go on receiving the allowance up to age 75, whereas someone who sustains a broken back in a traffic accident at age 651 receives nothing whatsoever? There seems to be no equity in that particular proposition.
Lord Cullen of Ashbourne: My Lords, what the noble Earl says is perfectly true.
Lord Leatherland: My Lords, as one who many years ago passed the age of 75, may I ask the noble Lord whether it is unfair that the allowance should stop at age 75?
Lord Cullen of Ashbourne: My Lords, at the moment those who are eligible will continue to receive the allowance until the age of 75. As I understand it, it will be seven or eight years from today that the first of those people will become 75. Perhaps between now and seven or eight years hence it might prove possible to whichever Government are in power to extend the limit from age 75 to, say, age 76.
Lord Leatherland: My Lords, does it not appear to the Government at present in power that this injustice should be remedied?
Lord Cullen of Ashbourne: Not at the moment, my Lords?

STATEMENTS: THE ARGENTINE AND NORTHERN IRELAND
Lord Balfour of Inchrye: My Lords, I beg leave to ask a Question of which I have given private notice.
The Question is as follows:
To ask Her Majesty's Government what advice, instructions, or regulations they are giving or introducing to cover those companies or organisations who are trading or have contracts with the Argentine?
Lord Denham: My Lords, with the leave of the House, my noble friend Lord Trefgarne will answer this Question in the form of a Statement at a convenient moment after 3.30 p.m.
This will be followed by my noble friend Lord Gowrie repeating a Statement to be made in another place, on the political development in Northern Ireland.
Lord Balfour of Inchrye: My Lords, may I ask the Minister one question? Do the Government anticipate that these measures will have an immediate and significant effect on the economy of the Argentine?
Baroness Young: My Lords, I think that the noble Lord should ask that question after my noble friend has made the Statement that he will be making at about 3.30. That will be the appropriate time to put it.
Lord Jenkins of Putney: My Lords, is the noble Baroness aware that I, too, sought to raise a private notice Question on the Falkland Islands task force and the noble Baroness has indicated that that Question was not in order? In these circumstances, I will seek to ask the Question in another way on another day.

Child Care (No. 2) Bill [H.L.]
Lord Avebury: My Lords, I beg to introduce a Bill to abolish local authority resolutions assuming parental rights and make provision for the making of care orders in cases where a child is already in the voluntary care of a local authority; and for connected purposes. I beg to move that this Bill he now read a first time.
Moved, That the Bill be read a first time.—(Lord Avebury.)
On Question, Bill read a first time and to be printed.

Saint Thomas' Burial Ground (Southwark) Bill
Read a third time and passed.

Local Government (Miscellaneous Provisions) Bill
3.5 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): 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 Belstead.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Baroness Ewart-Biggs Baroness Ewart-Biggs moved Amendment No. 125:
After Clause 34, insert the following new clause:
("Control of self-operated laundries
.—(1) A council may resolve that this section is to apply to their area; and if a council do so resolve this section shall come into force in their area on the day specified in that behalf in the resolution (which must not be before the expiration of the period of one month beginning with the day on which the resolution is passed).
(2) A council shall publish notice that they have passed a resolution under this section in two consecutive weeks in a local newspaper circulating in their area.
(3) The first publication shall not be later than 28 days before the specified day.
(4) For the purposes of this section premises shall be deemed to be used as a self-operated laundry when facilities are provided to the public on those premises on payment for washing or dry cleaning clothes or other articles by machines operated primarily by the customer.
(5)(a) In an area in which this section is in force, the occupier of premises used either partly or wholly as a self-operated laundry shall, in order to ensure that the plant and machinery installed in the premises for the purpose of the business are so fitted and maintained as to avoid risk of explosion, leakage of fluids or vapour and danger to the persons operating or in the vicinity of the plant and machinery, cause such plant and machinery to he inspected at least once in every fourteen months after the specified day by a competent engineer appointed or approved by an insurance company or agreed between the occupier and the council and the occupier of the premises shall send to the council a certificate (hereinafter called" a certificate of inspection") by an insurance company or by such an engineer certifying the result of the inspection.
(b) If:—

(i) before the expiration of fourteen months and fourteen days from:—

(a) the specified day, or

(b) in the case of premises which are not used as a self-operated laundry before specified day the date on which the premises are first used as a self-operated laundry, or

(c) (except in the case of the first certificate of inspection to be made in respect of premises) the date on which the last certificate of inspection was sent by the occupier of the premises to the council; the occupier of the premises fails to send a certificate of inspection to the council, or

(ii) a certificate of inspection sent to the council fails to show that the plant and machinery upon the premises are so fitted and maintained as aforesaid;

the council may make application by way of complaint to a magistrates' court who may order the closing of the premises to the public until a certificate of inspection is received by the council showing that the plant and machinery are so fitted and maintained as aforesaid.
(c) Any person who contravenes an order made by a court under paragraph (b) of this subsection shall be liable to a fine not exceeding two hundred pounds and to a daily fine not exceeding twenty pounds.
(6)(a) As from the specified day if in the opinion of the council any substance is used on the premises in connection with any dry-cleaning process which is likely to be dangerous the occupier shall, if so required by the council, display such precautionary notices as may be agreed between the council and such bodies as appear to them to represent the trade or business of self-operated laundries or as failing such agreement may be reasonably required for the purpose of warning the public.
(b) Any person who contravenes any provisions of this subsection shall be liable to a fine not exceeding two hundred pounds and to a daily fine not exceeding twenty pounds.
(7) In this section—
"council" means the council of a district or of a London borough or the Common Council of the City of London;
"specified day" means the day specified for the purpose of subsection (1) above").
The noble Baroness said: I beg to move Amendment No. 125. The suggested new clause is designed to achieve a measure of control over self-operated laundries or laundrettes for the protection of the public. It has been drafted on an adoptive basis so that only those local authorities who choose to exercise the powers will do so. This is a control which was formerly held by the cities of Manchester and Salford and I have received representations from the AMA, from the city of Manchester and from the Institution of Environmental Health Officers who are anxious for this control to be restored.
I think that the first thing that must be recognised when deciding whether this control is necessary is what are the ingredients of a self-operated laundry or laundrette. Some noble Lords may not be familiar with what the inside of a laundry or laundrette looks like, so that perhaps I should remind the Committee that inside a self-operated laundry or laundrette one finds a lot of high-powered machinery, a lot of children and no supervision. The machinery consists of units which can provide all or any of the hazards of electrical power, revolving components, steam-raising equipment and noxious fumes. Many laundrettes have been in operation for several years with the consequential deterioration of the equipment and many may have changed hands at regular intervals.
I recently visited my own local laundrette which I no longer use regularly, to find out what hazards the owner of this laundrette thought there were. Besides those I have mentioned, he described the hazard of a magnetic catch of a spin dryer which was defective and which would allow the door of the spin dryer to open while the machine was in operation, with the resultant danger of a child's limb or that of an unsuspecting grown-up being sucked in with consequent serious injury.
What he said was corroborated by evidence provided by the local authority associations in the form of a list of horrific injuries incurred by children over recent years. These were always due to an arm being caught by spin dryers and with faces damaged seriously. To understand why children particularly are at risk, it must be realised that the laundrettes represent something of a social centre. Mothers of small children who have a lot of washing and who lead rather solitary lives, go to the laundrette and take with them their small children. When they get there they find their friends and begin to talk, and during this time they momentarily leave the children to their own devices. Then, at a later stage, when
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the children have become bigger and the mothers may have gone back to work, the older children will go with the family wash to operate the machines and do the washing.
It must be remembered that there will be children always in laundrettes, and this is an overwhelming reason for doing everything possible to ensure that such machinery is kept at the highest possible level of safety. Bearing in mind that it is essentially children's safety at risk and bearing in mind that such certificates of inspection for which we are asking would be merely comparable to those already required from owners of office and shop premises containing self-operated passenger lifts—which, after all, do not present anything like so great a risk as machinery in the laundrettes—I feel strongly that it seems reasonable to afford this measure of control to local authorities, drafted as it is on a purely adoptive basis in order to try to ensure that the premises and plant of self-operated laundries and laundrettes are maintained at the highest possible level of safety.
Lord Belstead: The noble Baroness has made a strong case in self-operated laundries and the Government agree with the case that the noble Baroness has made. But local authorities have sufficient powers, I think, under the Health and Safety at Work Act 1974 and the Health and Safety (Enforcing Authority) Regulations 1977 (No. 746) to ensure that self-operated laundries are safe and without risk to the health of members of the public who go to them and to any staff who may be visiting the premises and, pursuant to the speech of the noble Baroness, to any children who may be on the premises.
The regulations enable local authorities to enforce the 1974 Act in self-operated laundries and in respect of coin operated dry cleaning units in lauderettes and similar premises. Among other things, lauderette operators have a duty under the 1974 Act to maintain the plant, machinery and installation in a safe condition, and local authorities have more appropriate and effective powers in the form of improvement and prohibition notices under Sections 21 and 22 of the Health and Safety at Work Act to deal with problems than an application to a magistrates' court for a closure order, which is the road down which the noble Baroness has gone in drafting her amendment.
I therefore would not want, on behalf of the Government, to agree that we should simply duplicate one public Act, the Health and Safety at Work Act, together with the regulations by putting a major provision in another public Bill—namely, this one. I would question, on the merits of the case, whether any thought has been given to weighing the costs and benefits to be derived from provisions such as those in this clause. There could be a quite significant cost to a local authority in operating a certification scheme which could more profitably be used elsewhere.
For all those reasons, although I do not agree with one word of what the noble Baroness said about the desirability for seeing that safety is adhered to meticulously in laundries and self-operated launderettes, I think that the powers are to be found in the 1974 Health and Safety at Work Act and also the 1977 regulations.
Lord Hawke: Could the Minister or the proposer of the amendment say whether they have any statistics as to the number of explosions or other harmful occurrences that have taken place in these laundrettes?
Baroness David: I wish to support the amendment. If I could reply to the noble Lord, Lord Hawke, the extent of the problem can be demonstrated by the following actions under the Health and Safety at Work Act 1974 in the city of Manchester. There, there are 101 premises in operation; prohibition notices had to be issued in 26 cases and improvement notices in 66. About three-quarters of the number of premises had to have action taken about them.
The benefit of our amendment is that it puts the onus on the launderettes to see that they have the certificates. I do not understand what the Minister meant about putting costs on the local authorities. I should have thought that, if anything, it might have reduced costs. If it is the launderettes which have to get certificates and produce them, that is their job. The local authority would have to act only if they failed to produce those certificates every 14 months or so. In the event of them not being able to do so, then there might be a court case.
I should have thought that there were a great many benefits in this. We know from the lists of mishaps with which we have been supplied that there have been a great number of accidents. I was told by my daughter recently that she had a great shock one day when she opened her washing machine and the cat jumped out. This was not in a public laundrette. So, strange things can happen. Coin operated laundrettes function very often without anybody being in charge. Also, a number of authorities have felt that they needed these powers. As recently as last year, East Sussex achieved these powers. That matter was presumably debated at some length. So I ask the Minister to think again about this amendment, and maybe take it back and reconsider his answer.
Lord Belstead: May I add one word before the noble Baroness, Lady Ewart-Biggs, decides what is best to do about this amendment? I am certainly very ready to look at the cost point which the noble Baroness, Lady David, made. I feel I have not made the case as well as I should have done on that aspect. If the noble Baroness decides that she is prepared to withdraw the amendment, I certainly would be very happy to look at that. So far as the illustration of the noble Baroness, Lady David, is concerned, I remember many years ago on a foreign holiday turning on a tap in a hotel bedroom and a frog came out of the tap. It is true that unusual things can occur when you either open doors or turn on taps.
But the advantage of the existing powers under the Health and Safety at Work Act legislation over the line taken in this amendment would be that there is greater speed. An inspector appointed at the moment by an enforcing authority—meaning the local authority in a case of this kind—has power under the Health and Safety at Work Act 1974 to issue a prohibition notice if he considers that there is a risk of serious personal injury from the way in which a self-operated laundry is being carried on; and he also is empowered to issue an improvement notice if he considers that relevant
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statutory provisions are being contravened. To enact provisions to deal with similar situations through a magistrates' court, when immediate corrective action can be taken by a local authority under existing legislative powers, would be doubtful as to advantage.
Lord Davies of Leek: The social significance of launderettes is probably lost to many people. They are of paramount importance to women who have to work. After the end of a day's work, they use these places. Sometimes my housekeeper has had to take laundry to a launderette. She has found vandalism and machinery which is tattered and torn. May I ask whether the local authority has what the noble Baroness has built into this amendment?
Let me read what I consider is relevant. This is on page 2. The Committee can follow me and correct me if my argument is incorrect. I am paraphrasing. It says that if, before the expiration of 14 months and 14 days, in the case of premises used as a self-operated laundry before the specified date, the occupier of the premises—and I am referring to paragraph (c), and these are the relevant words—fails to send a certificate of inspection to the council, or a certificate of inspection that is sent to the council fails to show that the plant and machinery upon the premises are so fitted and maintained—and now here comes the relevant part about the council—then the council may make application by way of complaint to a magistrates' court which may order the closing of the premises or a fine not exceeding £200 and a daily fine not exceeding £20.
My point is: How much power has a local authority to close premises that are vandalised, unhygienic and neglected and looked upon from a money-making point of view? I am grateful to the noble Lord for saying that he will look at the cost, because of the social significance to working mothers and single men, widowers, and others, of the modern launderette. It is important that these necessary domestic machines are available hygienically, are not vandalised and are safeguarded by local authorities.
Lord Hawke: If I was in the unfortunate position of having to use these places, I would far sooner have the existing system than the one proposed by the noble Baronesses. In the existing system, the inspector from the council can visit at frequent or infrequent intervals, just as often as he likes. Apparently in Manchester he has been round quite often and declared closed quite a number of premises which seemed to be working all right. But to leave it to the proprietor to get a certificate so that when anybody complains he will wave a certificate at them and say that it is valid since it is 13 months and 29 days since its last inspection, is really not good enough. The person who has to inspect this equipment is a service engineer employed by the owner, and so long as he is going round there it will be kept in reasonable order; but to leave it to a certificate from some insurance inspector at 14-monthly intervals is I think quite frankly a hit of a nonsense.
Lord Swinfen: I wonder whether the noble Baroness can tell us why she has chosen the period of 14 months rather than one year? It seems to me that the latter would he rather more sensible.
Baroness David: I must be quite honest and say that this was an amendment put down in the other place which we have put down again. I did rather wonder about 14 months myself; but I suppose it is a regular period and that is really what matters. I am very grateful for what the Minister has said about this so far as the cost is concerned. I wonder whether he is also able to make an offer to meet the Health and Safety Executive to discuss the merits of the proposed amendment. I understand there was a meeting with them about the ultra-violet tanning amendment which we put down earlier. The meeting about that had a quite satisfactory outcome, so I wonder whether he might consider a meeting on this aspect as well as considering the cost. Perhaps I may also say to the noble Lord, Lord Hawke, that Manchester had within its Bill the amendment we have put down.
Lord Belstead: Certainly I will take into account anything that the Health and Safety Executive have to say on the subject.
Baroness Ewart-Biggs: I should like to thank the noble Lord the Minister for the assurances he has given both as regards looking at the cost and as to arranging for a meeting between his department and the Health and Safety Executive. In those circumstances I beg leave to withdraw the amendment.
Lord Belstead: I said that I would take into account what they have to say. That means I should be very ready to get in touch with them to see what their views were. I think it is a matter for the local authorities to get in touch with the Health and Safety Executive if, on their side, they want to.
Amendment, by leave, withdrawn.
3.23 p.m.
Lord Underhill Lord Underhill moved Amendment No. 125A:
After Clause 34, insert the following new clause:
("Hackney carriages
. Notwithstanding the provisions contained in Part II of Schedule 14 to the Local Government Act 1972 in relation to the applying of section 171(4) of the Public Health Act 1875 to their area, a local authority may licence hackney carriages to ply for hire only in specified parts of their area and to stand and ply for hire only on specified hackney carriage stands within their area as may be stated in the licence.")
The noble Lord said: I beg to move this amendment. The Local Government Act 1972, referred to in this amendment, included provision for the new district councils set up then to deal with the licensing of hackney carriages. Local authorities have always had the option of whether or not to license hackney carriages, and the 1972 Act retained that option. But one problem was what transitional arrangements there should be to cope with the enlarged local authority boundaries, and one aspect concerned the licensing of hackney carriages.
Schedule 14, Part II provided the new district councils that had been set up with three alternatives. Option 1 was to establish the whole of the new district as a single lincensing district and hackney carriages would be able to ply for hire in any part of the district. Option 2 was that they could disapply licensing provisions, thus discontinuing any licensing of hackney carriages within the new district. Option 3 was that they could retain the status quo inherited from the former
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constituent councils. This would mean that hackney carriages would continue to be licensed within the former constitutent boundaries where the provisions had been adopted by the former councils, but in that case they could ply for hire only within those former boundaries—that is, in separate parts of the new district.
Option 1 could be exercised at any time after 1st April 1974, and still can be; but Option 2 had to be exercised before 1st April 1975. In both cases there had to be the approval of the Secretary of State. Generally, I understand that authorities inheriting licensing functions looked either at Option 1 or Option 3. Option I would dezone the inherited licence zones or districts. Option 3 would mean the retention of the former licensing districts, thus retaining the existing zones.
There are arguments on both sides. Those in favour of de-zoning would argue that in the district councils the old boundaries were defunct and all hackney carriages should be able to ply for hire in any part of the new district. It is claimed that that would provide greater flexibility and the councils' administrative arrangements would be made much easier. On the other hand, those who were against dezoning argue that hackney carriages are licensed to provide a public service. This is important in small townships as in larger towns, but if there was de-zoning hackney carriages would tend to converge on the larger towns where opportunities are better, and services in the smaller towns would be lost.
The dilemma facing local authorities is that the process of de-zoning is statutorily irreversible. Once done it cannot be undone: nor can it be done in part only. It would appear that local authorities have not rushed into de-zoning but that, where they have de-zoned, problems have occurred, and these are greater in those districts where there are one or more larger townships with several smaller towns which are geographically distinct. I am informed that, in the large districts of Leeds and Bradford, hackney carriages from the smaller townships are deserting their former ranks in the city centres. This means that service to the public in the smaller towns is being seriously diminished.
Smaller towns should be enabled to achieve a balance suitable to the needs of their areas. This amendment does not argue for or against de-zoning but seeks to provide a new option to be made available to the local authorities. The amendment will give local authorities which de-zone or are considering de-zoning the opportunity of reviewing the needs of the hackney carriage service throughout their districts. Some councils may be very happy at the way de-zoning operates; others by means of this amendment will be able to control the operation of hackney carriages to limited areas or to specified ranks where a need is established.
I emphasise that each district would be free to determine the best balance within its area to suit the needs of the public and also the needs of those in the hackney carriage trade. The amendment provides a formula for a practical solution to give an additional option to deal with the problem which the 1972 Act failed to anticipate. It is so common sensible that I hope the Minister will find it possible to accept it. I beg to move.
Lord Belstead: The noble Lord, Lord Underhill, is seeking to present this amendment as a choice which will enable local authorities to think again about their rules and regulations on the zoning of where taxis may operate in their local authority districts. I know the noble Lord would agree with me that we must think about the consumer in this. If I may say so, I do not think that this amendment will benefit the consumer. This is a proposal to empower additional restrictions on the taxi trade which would limit its ability to respond to public demand and to provide the service that the public wants. We are being asked to accept a really quite far-reaching change to the general law on the basis of difficulties that, I understand from the noble Lord's speech, have arisen in Bradford; and with that I agree. The noble Lord also mentioned Leeds. I have certainly heard that mentioned in preparing for this afternoon's debate, but I am not aware that the Home Office has received any direct notification that Leeds takes that view as well.
I shall not go over the basis for the difficulty, as the noble Lord sees it, because he explained that very clearly. But I should like to refer to the situation in Bradford, and say that Bradford City Council passed its resolution to enable taxis to ply for hire throughout the whole of the Bradford metropolitan district in August 1980. This was confirmed, as it had to be under the law, by my right honourable friend the Home Secretary in October of that year, after he had considered objections.
The main argument put forward by the noble Lord, Lord Underhill, is that taxis from outlying parts of the district are tending to gravitate to the centre of Bradford, if I may use that as an example, and are less easy to obtain in the outlying districts. They are presumably doing that because they are doing better business by acting in that way. The amendment would have us over-ride the principles of supply and demand, and would allow the district council to confine certain taxis to areas where there is less demand.
I appreciate the concern which the noble Lord has expressed. Nevertheless, I do not think that this is the way to go about solving the problem. If the real problem is that there are too many taxis in central Bradford, for instance, and not enough elsewhere, this should be resolved by market forces and not by restrictions imposed by the local authority. If, on the other hand, the problem is a shortage of taxis, then surely the answer is for the local authority to increase the number of licences. The Government are committed to doing everything we can to remove unnecessary controls and restrictions, especially over small businessmen and transport undertakings, and, with respect, this amendment would have the contrary effect.
There are just two more points which weigh against this amendment. First, although I understand that the intention behind the amendment is to allow a local authority to divide its district into separate zones, it would, in fact, empower councils to attach whatever geographical restrictions they chose to individual licences. Local authorities could restrict vehicles to very small areas or even to individual taxi ranks. They could even create a two-class trade—half restricted and half unrestricted. I would almost go so far as to say that I do not think that that is the intention of the noble Lord, Lord Underhill. To that extent, I think that,
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in a way, this amendment is defective, because I do not think that it is carrying out the intention of the noble Lord.
The second point which weighs is that, even although the amendment would make it possible to limit the area in which taxis might ply for hire, they would be compelled to accept hirings to any part of the district at a controlled fare. Therefore, having completed such a hiring, a taxi would have to return to its own limited area before it could seek another hiring. I do not think that that would be particularly popular with either the taxi drivers or the general public, because nothing is more irritating—and it occasionally happens at railway stations in the metropolis—than to find a taxi coming in, depositing a passenger, and then, for some reason which is probably a valid and necessary one to the driver, going off without picking up another fare.
Finally, may I just add this: The Home Office has been conducting a review of taxi law. It has not been entirely easy—there are difficulties of detail and some difficulties of principle—and I would ask that the outcome of that review should be awaited. I ask that in the context that, as I have said, so far as my right honourable friend's department is concerned, we have not heard of any problem in a district other than Bradford, and that is with over three-quarters of the 300 or so district councils which license taxis now having decided that what they want is a single system of control applying throughout their districts. It is on those grounds that I ask the noble Lord, Lord Underhill, to agree to reconsider this amendment.
Lord Underhill: I am disappointed with the Minister's reply. I must clear up one point, because in his opening remarks the noble Lord said that we must think of the consumers. In case that implies that I am speaking on behalf of the taxi trade, let me make it absolutely clear that on this occasion I have had no contact at all with the Taxi Drivers Association. I have not been asked by them to raise the matter and I have not checked it. I was asked to raise this matter by one of the local authorities concerned who are very troubled about the situation.
The noble Lord said that this would not give consideration to the consumer. But that is the situation now, because under the 1972 Act a district council can have the option of de-zoning or of continuing the previous zoning. Therefore, it is there already. So I am not proposing to introduce anything at all new. I am not even suggesting that there should be de-zoning or that there should be zoning. What this amendment is endeavouring to remove is the situation where, once you have made the decision, you cannot alter it. That is what the law provides. The noble Lord has not dealt with that position. Surely, it is a ridiculous position that, if the 1972 Act gives you an option, the decision is irreversible. That seems to be nonsensical from all practical standpoints, particularly the standpoint of local government. In this amendment we are endeavouring not to favour zoning or de-zoning, but to give authorities the option of reconsidering what they may already have decided. That seems to be most sensible.
I hoped that if my amendment was defective the Minister might have taken a look at it and introduced

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one on behalf of the Government. But I repeat that, from a local government standpoint, it seems absolutely nonsensical that once you have taken a decision you cannot change it. If the Minister will not accept the amendment, I shall read very carefully the report of what he has suggested and see what might be done at Report stage. But I will consult. I mentioned Leeds, because Leeds was mentioned to me, and this morning, before I came here, I checked with a councillor at Bradford who assured me that Leeds is also having problems. But I will make further inquiries about Leeds, if I decide to do anything at Report stage. I beg leave to withdraw the amendment.
Amendment by leave, withdrawn.
Clause 35 agreed to.
Schedule 6 [Minor amendments];
Lord Bestead Lord Bestead moved Amendment No. 128A:
Page 82, line 40, at end insert—
(".In section 48(2)(b)(iii) of the Health Services and Public Health Act 1968 (which requires a copy of a certificate to be sent in certain cases to the proper officer of the relevant port health authority constituted in pursuance of section 2 of the Public Health Act 1936) the words "constituted in pursuance of section 2 of the Public Health Act 1936" shall be omitted.").
The noble Lord said: This is a drafting amendment. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 129:
Page 83, leave out lines 29 and 30 and insert—
("Schedule 4, paragraph 12(2), 15A(3), 15A(6)").
The noble Lord said: This, too, is a drafting amendment revising an item in the schedule. I beg to move.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 129A:
Page 83, line 31, leave out paragraph 7.
The noble Lord said: This is also a drafting amendment going with Amendment No. 128A. I beg to move.
On Question, amendment agreed to.
Lord Denham: This is probably the appropriate moment to resume for the Statement. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

The Argentine: Trade and Contracts
3.39 p.m.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): My Lords, with your Lordships' permission, I will now answer the Private Notice Question tabled by my noble friend Lord Balfour of Inchrye by repeating a Statement that is being made in another place by my right honourable friend the Secretary of State for Trade. The Statement is as follows:
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"It was announced on 3rd April that the Government had frozen all Argentinian financial assets held in this country, that ECGD would not provide new export credit cover for Argentina and that exports of military equipment and arms to Argentina had been prohibited. Other economic measures are being urgently examined, and we are consulting our European Community and other allies. British citizens are advised not to travel to Argentina, and British companies to withdraw their non-essential British staff. British firms must decide what action they should take in relation to existing commitments in the light of the present circumstances, the measures which have so far been announced, and of the terms of their own individual arrangements with Argentinian firms. They are advised not to enter into new commitments.
"The Prime Minister told the House on 3rd April of the Government's intention to despatch a substantial naval task force to the Falkland Islands. I should like to take this opportunity to announce to the House that Her Majesty assented to an Order in Council enabling the Government to requisition any vessels that may be needed under the long-standing contingency plans available to meet national emergencies of this kind. The P&O liner "Canberra", whose captain is an officer in the Royal Naval Reserves, is being transferred to naval control this afternoon. Other ships will be requisitioned and chartered as necessary."
My Lords, that is the Statement.
Lord Bruce of Donington: My Lords, we on this side of the House would like to thank the noble Lord for having repeated the Statement, the contents of which are quite inevitable following the extremely grave events that were reported to this House and to another place on Saturday. We on this side of the House entirely support the Government in their intention to freeze all Argentinian financial assets in this country. At the same time we should like some clarification of Statutory Instrument No. 512, which we believe was laid before Parliament on 3rd April and which is supposed to come into effect, concerning gold, securities, payments and credits. Perhaps the position regarding those could be clarified.
We note from the Statement that the Export Credits Guarantee Department will not provide any new export credits for Argentina. This raises the question of what is going to happen to existing outstanding liabilities of the Argentine which the ECGD have already insured. May we take it that the obligations of the ECGD up to and including 3rd April will be honoured? And can we have the further assurance that in the event of substantial losses being incurred by the ECGD as a result of these measures, no increase in premium will be passed on to other exporters in order to pay for any deficit that arises? In other words, will the noble Lord give the House an assurance that any deficit on the ECGD fund that arises from this situation will be borne directly out of the Consolidated Fund rather than passed on to the exporters who continue to do business with other parts of the world?
It is quite clear from the Statement that other measures will have to be taken, and the noble Lord has already

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mentioned some of them. May we take it that there will be urgent consultations not only with our EEC partners, whose joint action will urgently have to be sought in concurring with whatever measures we decide upon in supporting those measures, but also far outside the EEC itself, in conjunction with our allies?
We note that British companies are advised to withdraw their non-essential British staff. The term "nonessential" is of course a little vague and I cannot expect the noble Lord to enlarge upon it, but I should be surprised if British companies employ non-essential people in the enterprises which they are conducting. Will the noble Lord undertake to keep the House fully informed of what further steps are likely to become necessary as the situation develops?
Finally, the noble Lord can be assured that we on this side of the House will support whatever measures are necessary in the economic sphere to bring pressure upon the Argentinian Government, even though some of these may, at any rate temporarily, be to the disadvantage economically of this country. Will he give an assurance that the military objectives so forcefully put forward in the other place on Saturday will in fact be pursued with the utmost rigour, should it become necessary to do so?
Lord Mais: My Lords, may I from these Benches say that Her Majesty's Government have our complete support in any action which they may have to take. But in the light of industry generally, can we be assured, in so far as any assurance can be given, that companies which at the moment are heavily committed in the Argentine both in the supply of goods and in construction and other works, will receive some instructions as to how they are to proceed? In other words, are they to carry on, or are they to withdraw? And will they have some assurance as to compensation, or otherwise, for what could in many cases amount to very heavy losses?
Lord Trefgarne: My Lords, may I thank both noble Lords, in particular the noble Lord, Lord Bruce of Donington, for his helpful and constructive reception of this Statement. My thanks are no less due to the noble Lord, Lord Mais, although he did not go into the same detail. May I deal first with the points put to me by the noble Lord, Lord Bruce of Donington.
Regarding the noble Lord's question about the statutory instrument, that instrument was made, laid and came into force on Saturday last. It was made under Section 2 of the Emergency Laws (Re-enactments and Repeals) Act 1964. Section 7 of that Act provides that the order may be annulled by a resolution of either House. The order clearly therefore does not require formal approval by your Lordships' House or the other place.
So far as the position of the ECGD is concerned, I understand that the ECGD has firm commitments amounting to £290 million in respect of Argentina, that there are further offers outstanding of £60 million and that applications are being considered for a further very substantial sum. In fact, United Kingdom investments in Argentina amount to about 8 per cent. of total foreign investment in that country. They have a book value of about £200 million but the real value may well be higher. We are unaware of any significant Argentinian investment in the United Kingdom.
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The noble Lord also asked me to give an assurance about increases in premiums which may or may not prove to be necessary following these events. I am not in a position to give the noble Lord the blanket assurance that he sought. The noble Lord will recall that it has been the policy of consecutive governments to ensure that the ECGD traded in respect of its credit insurance arrangements more or less in balance on a year-to-year basis. As the noble Lord knows, that has not always proved to be possible, but that has been the target and we would wish to maintain the general principle so far as ECGD is concerned. I certainly take note of the point which the noble Lord has made. Further measures, which were referred to in the Statement, will indeed need to be discussed and agreed with our European Community partners, by and large.
As for the noble Lord's question relating to the staff of British firms, the Statement made it fairly clear that it would be wise for British firms operating in Argentina to reduce their personnel there to the very minimum. Turning to the final point made by the noble Lord about the military action which we fear may prove to be necessary, I can assure the noble Lord that it is the Government's clear intention to restore control of the Falkland Islands to this Government, as was said by my right honourable friend the Prime Minister and Lord Carrington on Saturday. I believe that I have covered the point made by the noble Lord, Lord Mais, in his supplementary question and I hope that I have been able to clarify the Statement to the benefit of your Lordships.
Lord Balfour of Inchrye: My Lords, may I repeat the question I asked before? Are the Government satisfied that these measures will have an immediate and significant effect on the economy of Argentina in general? In particular, the noble Lord the Minister did not mention aviation. Can we be assured that the Argentinian aircraft in this country are impounded and will not be allowed the continued service of our aerodromes?
Lord Trefgarne: My Lords, as to the effect of these measures upon Argentina, it may be helpful if I say that some 20 to 25 per cent. of Argentinian reserves are believed to be held in United Kingdom banks or by way of stocks and securities held in this country. It is therefore certain, I would say, that this will have a very significant effect on Argentina's economy.
As to my noble friend's second point, about air services, I understand that Airlineas Argentinas, which is the Argentinian airline, normally operates two services to the United Kingdom. The two most recent services were in fact cancelled for reasons best known to the Argentinians. Certainly it is not our intention that any further services should be operated. The operating permit will he suspended if necessary, and British Caledonian Airways have also suspended services to Buenos Aires.
Lord Kennet: My Lords, will the Government look again at their own wording in this Statement, perhaps later today? Will they put themselves in the position of a British firm and see whether the sentence "British firms must decide what action they should take", and

23
so on, could not be made a little more helpful? Are the Government satisfied that they have continuing arrangements which will make it possible for firms which are truly puzzled about what they should do and in fear of their futures, to get advice quickly in terms which are quite understandable and in terms which the Government will stand by?
Also, on the last part of the Statement, about the taking of the "Canberra" under naval control, are the Government satisfied that there are enough merchant ships left flying the British flag for them to be able to meet their needs in this emergency, given the enormous number which have passed under flags of convenience in recent years? Will the Government in due course draw a lesson from this? Will the Government go further than speaking of "restoring" the Falkland Islands to their proper allegiance and of maintaining them in the Falkland Islands as long as the inhabitants wish?
Lord Trefgarne: My Lords, as for advice to British firms, it is not possible to go further than the Statement does in terms of specific advice, because circumstances will vary from company to company. A total trade embargo with Argentina is certainly something that we could consider, but we would need to do that in close concert with our allies in the European Community and elsewhere. In any event, an embargo by the United Kingdom acting in isolation would probably not have any major effect and it is therefore crucial, I believe, to secure the support of our friends and allies in this matter.
With regard to the "Canberra" and the possibility of needing other ships, I can say that one other ship has, I believe, been requisitioned and that a number of others have been chartered for this operation. We have no doubt whatever that an adequate number of vessels will be available as required.
3.54 p.m.
Lord Shinwell: My Lords, my question is directed not at the noble Lord, Lord Trefgarne, but at the Government's Chief Whip. I want to ask this question, because there is a danger that we might be entering into a kind of debate, and this is not the appropriate occasion for that; so many questions have yet to be answered. I should like to ask the Government Chief Whip, is there likely to be another debate on this subject before the Easter Recess? Is the vacation to take place as arranged, beginning on Wednesday next? These are very important questions and we want to know where we are. The House should be in almost constant attendance while we are awaiting events in the Argentine. Will the noble Lord inform us whether there is likely to be an occasion for another debate? Otherwise some of us want to ask some very direct questions.
Lord Denham: My Lords, I do not know whether it is proper for me to answer the noble Lord, Lord Shinwell, at this point. This is the kind of matter which is always arranged after discussions through the usual channels. I can assure the noble Lord that such discussions will take place.
Lord Morris: My Lords, I should like to ask my noble friend Lord Trefgarne, will Her Majesty's Government constantly bear in mind their strategic principle and eschew all short-term economic expediency?
Lord Trefgarne: My Lords, the Government's position with regard to this matter generally was very eloquently and adequately described by my right honourable friend the Prime Minister when she spoke in the other place on Saturday, and indeed by my noble friend Lord Carrington when he spoke to your Lordships on the same day. 1 suggest that my noble friend reads the Hansard reports of those two debates.
Lord Beswick: My Lords, will the noble Lord, Lord Trefgarne, be good enough to clarify what he said about the European Economic Community? I understood him to say that further measures will have to be discussed with our partners in the Community. What about those measures already taken? Are they to be followed? Will similar action be taken by our fellow partners?
Lord Trefgarne: My Lords, I believe that will be a matter for the national Governments concerned. External trade, as the noble Lord will know, is a matter in which the European Community has competence, as the expression goes, and therefore it is right and proper that we should discuss matters of that nature with them. The matters to which the Statutory Instrument refers, and about which the noble Lord, Lord Bruce of Donington, was asking me, fall within our own national competence.
Lord Davies of Leek: My Lords, there is a technical point about insurance. Would an underwriter's agreement made 24 or 30 hours ago still be legally correct? Would he still be called upon to undertake his underwriting if it was with Argentinian business or with other concerns of Argentina? May we have some information on that point?
Lord Trefgarne: My Lords, I speak without a specific brief on that particular point, but I imagine the position is that if a premium has been received, then the contract is in force but that a claim could not be paid until these restrictions were lifted.
Baroness Masham of Ilton: My Lords, are the Government keeping in close contact with the International Committee of the Red Cross in Geneva? I believe that the committee has offered its services on behalf of the Falkland Islands population. Is it not vital that there should be an impartial humanitarian body to protect the interests of civilians in the hands of an occupying state? Would the Minister not agree that safeguarding innocent civilians is paramount whatever else happens?
Lord Trefgarne: My Lords, I can confirm that the International Committee of the Red Cross has made an approach to Her Majesty's Government along the lines which the noble Baroness has described. We naturally welcome that approach.
Lord Bruce of Donington: My Lords, may I press the noble Lord, Lord Trefgarne, on the whole ECGD question? Would he not agree that it would be very unfortunate indeed if these events were required to be paid for by ECGD policyholders and by exporters generally, who have already suffered enough? Will he give this matter his most urgent attention? Will he reply to the request made by the noble Lord, Lord Mais, with regard to the position of compensation for firms which have suffered damage or loss as a result of these events?
Lord Trefgarne: My Lords, I understand that it is not the practice to pay compensation in these circumstances. It is the case that in a situation such as this one costs will be incurred and will have to fall on someone, but defending our national honour is not something that we can do for free.
The Earl of Onslow: My Lords, could my noble friend answer the following questions? Will he please make representations to the French and Italian Governments that they should supply no spare parts to the Argentinian armed forces for French and Italian equipment which they supplied? Secondly, how many Argentinian merchants ships are there in British or British controlled ports? How many British merchant ships are there in Argentinian controlled ports? Please can we put an embargo on the Argentinian ones if the odds are on our side and not on theirs?
Lord Trefgarne: My Lords, I can assure my noble friend that the Italian and French Governments have given us the utmost support in this matter, and I have no doubt will be considering acting along on the lines my noble friend suggests. I understand that at present there is only one Argentinian vessel in a United Kingdom port, but one or two are due either today or soon. I will certainly see that the point made by my noble friend is taken into account.

Northern Ireland: Political Developments
4.2 p.m.
The Minister of State, Northern Ireland Office (The Earl of Gowrie): My Lords, it might be for the convenience of the House if, with the leave of the House, I now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Northern Ireland. The Statement is as follows:
"Mr. Speaker, I will, with permission, make a Statement on policital developments in Northern Ireland.
"The Government have today published a White Paper setting out proposals for the election of an assembly which would provide a framework within which a devolved government might again be set up in Northern Ireland. These proposals are designed to meet two objectives. First, to provide at once a means for greater democratic participation by the people of Northern Ireland in their own affairs. Secondly, to give them the opportunity to evolve for themselves a form of government acceptable to them.
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"The Government propose that there should be an election later this year to a new Northern Ireland assembly. While consideration of the arrangements for a devolved administration will be its most crucial task, the assembly will from its first day have important scrutinising, deliberative and consultative functions. It will be able to report on a wide range of topics and its reports will be laid before Parliament.
"The assembly will establish committees corresponding to each of the Northern Ireland departments to monitor and report on their policies and activities."
"The assembly will from the outset be empowered to recommend arrangements under which the whole or part of the full range of legislative and executive responsibilities which were devolved in 1973, could be exercised by the assembly and by a devolved administration answerable to it. If the assembly send the Secretary of State proposals which have the support of 70 per cent. of the total membership of the assembly he will be required under statute to lay those proposals before Parliament for its consideration. He would also have discretion to present to Parliament proposals which did not command 70 per cent. support but which in his view enjoyed the support of both sides of the community in Northern Ireland. I would like to make two things clear: first, the parties in Northern Ireland will have wide discretion about the basis on which a devolved administration and assembly might be formed and operate—Her Majesty's Government are not seeking to impose any particular system; secondly, the Government would not recommend any arrangements to Parliament unless they believed them to be acceptable to both sides of the Northern Ireland community. Stable government can only come from such acceptability. If Parliament approves the assembly's recommendations, powers would be devolved by order in council.
"The assembly will have the option of moving to full devolution of powers from the outset or, if it seems easier to achieve agreement on devolving the responsibilities of only some Northern Ireland departments, to make proposals for partial devolution.
"The arrangements will be flexible in that partial devolution could lead on to further or full devolution. And if the agreement on which devolution was based collapsed and could not be re-established, it would be possible for the assembly to revert to its scrutinising, consultative and deliberative functions, with the Secretary of State taking back other responsibilities.
"Direct rule has served Northern Ireland well. It was, however, introduced as a temporary arrangement. It does not provide satisfactory political structures through which a divided community in Northern Ireland can make the necessary mutual accommodations to tackle its special problems. For Northern Ireland requires new political arrangements suited to its unique character. These must reflect the history of the Province and its long experience of devolved government, and must recognise and respect the differences of identity and aspiration which exist there. The proposals in the White Paper take account of these circumstances. At the

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same time they are firmly based upon Northern Ireland's position as a constituent part of the United Kingdom for so long as that is the wish of the people of Northern Ireland.
"The Government are convinced that good relations with the Republic of Ireland are of great importance. These relations are for the sovereign Governments and Parliaments. It is for the London and Dublin Parliaments to consider whether the governmental meetings of the Anglo-Irish Intergovernmental Council should be complemented by an Anglo-Irish body at parliamentary level in which members of an elected assembly in Northern Ireland could take part. In addition, it would remain open to a devolved administration in Northern Ireland to make such bilateral arrangements and agreements with the Government of the Republic as it wished concerning the matters for which it is responsible.
"The problems of Northern Ireland are formidable. The evil of terrorism has struck at the lives and expectations of ordinary people, Catholic and Protestant alike, for far too long. The economic decline is more acute and more intractable than elsewhere in the United Kingdom. The Government believe that the defeat of terrorism, the recovery of the economy and the establishment of effective political institutions go together and support one another. An end to the political deadlock of recent years offers the best hope of a sustained improvement in the economy and in security.
"The proposals in the White Paper are fair and flexible. Like all proposals for Northern Ireland, they involve risk and controversy. The Government in no way underestimate the magnitude of the task or the strains any proposals will have to bear. But they also offer an opportunity which, with time and patience and the continued commitment and goodwill of Parliament, may be exploited to the advantage and relief of all the people in Northern Ireland."
My Lords, that ends my right honourable friend's Statement.
4.8 p.m.
Lord Blease: My Lords, we are grateful to the noble Earl the Minister, Lord Gowrie, for repeating in this House the Statement made by the Secretary of State for Northern Ireland in another place. The announcement made today by Mr. James Prior about the Government's new political initiative concerning Northern Ireland has been anticipated for some months, and especially during the past four weeks. There has been a continuous stream of statements, reports of meetings, and pronouncements by the Northern Ireland Office, and by politicians of various groupings, about the proposed devolved political powers and the structures of government for the Province. I would like to say that I am aware that the Secretary of State for Northern Ireland and the noble Earl have, in my view, worked earnestly and energetically to get the developments to this particular stage.
There have been the predictable political posturings and entrenched attitudes to these developments. Some
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of these positions are understandable; they are born out of bitter sectarianism; some arise from the years of fear, terrorism, murder and destruction; some are perpetrated through the ugly exploitation of a few rabid politicians who play upon the differing traditions of the people of the Province.
From these Benches we welcome the flexibility of the proposals in the Statement, and the opportunity that the new political initiative should give to the people of Northern Ireland to find peaceable and positive solutions to the many and terrible problems of the Province. The proposals involve considerable risk and possible emotive controversy. While much of the responsibility for the way forward lies with the Northern Ireland people, at the same time the United Kingdom Government must continue to help in the creation of a stable political framework in which community peace, improved security and social and economic progress can be built.
It is difficult at this stage to make other than a few general observations on the statement about the political developments. I would assume that we shall have an early opportunity in this House to debate in more detail the White Paper and the proposed way forward by order in council. There are a number of procedural arrangements which I consider require considerable clarification. I would hope that in the interim the United Kingdom Government and the Northern Ireland Office will continue to seek to provide adequate and appropriate security and economic measures. There should be no letting up on both of those vital fronts in any way forward to a political arrangement.
It is also hoped that all the consultations, discussions and debate which ensue in the interim with the interested parties will be conducted with the greatest possible degree of openness and frankness. It is my opinion that for future peace and prosperity in Ireland there is nothing to be gained by secret diplomacy, private deals or ad hoc agreements.
While I hold that it is the responsibility of all the people of Northern Ireland to find a system of devolved government which will promote harmony, trust and respect for all, I equally hold that it is the responsibility of the United Kingdom Government to help and support every step towards the achievement of parliamentary democracy in the Province. There is a great need at this time for both traditions in Northern Ireland and the United Kingdom Government to work together with honesty, goodwill and respect for each other. If we fail together then the only persons to gain are the men of violence. I wish to support at this stage the Statement made by the noble Earl and I shall look forward to further exchanges as regards the possible arrangements for political development.
Lord Hampton: My Lords, I, too, should like to thank the noble Earl for repeating the Statement for his right honourable friend. I think that we are in danger of feeling a sense of anti-climax not only because of the tragic events in the Falkland Islands which dominate the political scene at the moment, but also because on so many occasions the Secretary of State's proposals seem to have been published in the papers with little tables saying how the Catholics react, how the Protestants react and that we should take no notice of it anyway. But it is essential that

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we should turn to this highly important matter now.
We welcome the Statement because, as a party, we believe in devolved government. It seems to me, from the discussions that we have in this House on the orders, that it would make much greater sense if the people from Northern Ireland did not have to travel over here at considerable trouble but could discuss the matter in their homeland.
There is one matter that I should like to raise with the noble Earl. I am not certain whether I missed this point but I understood that the assembly would normally have the opportunity to comment on draft orders in council. I am sure that the House will wish to take careful account of these comments. I am not certain whether I heard the noble Earl mention that, but it may be that my attention was distracted for a moment. This has been described elsewhere in the press as rolling devolution. It comes by stages. There is no imposition. I think that the noble Earl will not be surprised if we say we shall encourage the use of proportional representation when we get to it.
The next point that I wish to make is that if unionists wish to remain in the United Kingdom, we believe it should be made clear to them that their co-operation in finding a way forward is essential. They cannot have it both ways. They cannot say that they are loyalists and then make everything as difficult as possible. I agree that direct rule has worked well, but for practically everyone it has only been second best. I believe that failure to proceed now would be a failure of the Northern Ireland politicians and the Northern Ireland people behind them, and not of the Secretary of State. I agree with the noble Lord, Lord Blease, on the need for co-operation as regards this matter. We agree that there is a vital need for good relations with Eire. That is another matter which has to be kept in the balance. The tragic economic situation in Ulster emphasises the need for maximum co-operation and effort all round. Obviously details of how to proceed will have to be worked out with greater time to study the proposals in the White Paper, But we hope to be able to support the proposals wholeheartedly.
I should like to refer to the closing paragraph of the Statement which suggests the right mood. It says that the proposals:
"offer an opportunity which, with time and patience and the continued commitment and goodwill of Parliament, may be exploited to the advantage and relief of all the people in Northern Ireland ".
We very much hope to help that come about.
The Earl of Gowrie: My Lords, on a sad and worrying day I am really most grateful for the welcome from the official Opposition Front Benches which I have just received for my right honourable friend's Statement. That is very gratifying to us and I hope that the remarks of both noble Lords will be heard in Northern Ireland itself. The noble Lord, Lord Blease, said that there had been a stream of statements by politicians as well as leaks and speculation. I think that that is the ordinary hazard of the consultative process. In fact, I do not think that it was so much a problem of leaks as a question of the people whom we consulted going out and issuing press notices quite overtly and right away the moment we had finished talking to them. But that is part of the process, and we certainly make no criticism of that.
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I am very glad that the noble Lord, Lord Blease, who has so much experience of the Province and is so widely respected there, welcomes the flexibility of the package. No British Government can impose their own views on the Province or the views of one side of the community in Northern Ireland on the other. Our proposals are designed to provide a framework within which the Northern Ireland people and their representatives can have the opportunity to devise the necessary arrangements for progress there. The noble Lord, Lord Blease, echoed me in saying that of course there was risk here. But there is also considerable risk in standing still. Where security is concerned, we have achieved some improvement, although not enough. We wish to sustain that improvement and we wish the progress necessary for the improvement to continue.
Until such time as the people of Northern Ireland and their elected representatives decide to make proposals to us by which powers could be devolved back, direct rule will, of course, continue, as the noble Lord required, with great attention to both economic and security issues. But I for one welcome enormously what the noble Lord said about both traditions in Northern Ireland having to recognise each other and having to work together. That is very much the spirit of the White Paper which we shall be publishing in a few minutes.
I also agree with the noble Lord, Lord Hampton, that here, of course, there is not sufficient Parliamentary scrutiny or always scrutiny by the most appropriate people, of matters of very great concern to the Province. I can confirm to him that it will be for the assembly to comment on the draft orders and I am sure that Parliament as a whole and your Lordships' House will take their comments into close consideration. Direct rule has, I think, worked, but it is a second best and the people of that lovely part of the Kingdom with their great and productive traditions deserve rather more than second best.
4.19 p.m.
Lord Donaldson of Kingsbridge: My Lords, is the noble Earl aware that, owing to the rather foolish convention by which third and later speakers must ask questions and not make comments, I shall ask him several times "Whether he is aware of" things which I think he probably is aware of? Is the noble Earl aware, for example, that from this Bench we endorse entirely this latest effort to return gradually to devolved government? Is he aware that we have always taken the view that direct rule was not permanent but only temporary? Is he aware that we cannot produce effective politicians unless they are allowed to take part in government as well as politics? Is he aware that one of the difficulties in Northern Ireland over the past few years, since government was exercised at Stormont, has been that no responsible duties at all have been laid on politicians? Is the noble Lord aware that we found a number of very competent and effective politicians in the Stormont experiment, and that it is a great pity that it was sabotaged?
In view of the advisory and consultative form that the Secretary of State is proposing, has the noble Earl considered sending two members of each party to Hong Kong to see how they do it there? I returned

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from there on Saturday, and it is remarkable that there they have a Governor, an administration and a number of specific consultative groups who are listened to very closely and for whom the Government have the greatest respect, and that form of Government works there extremely well. The noble Earl is aware—I shall not ask whether he is—that matters are much more difficult than that in Northern Ireland, but I think that it is an example which could be pointed out to the politicians with whom he has to deal.
Finally, I was very glad to see that the right of Northern Ireland to remain within this country is, once again, stated in the Statement. As a party which is entirely bipartisan at the moment, we fully support this move by the Government.
The Earl of Gowrie: My Lords, again, I am very grateful for that endorsement of my right honourable friend's Statement. It is particularly welcome, coming as it does from a noble Lord with considerable distinguished service and experience as a Minister in Northern Ireland, albeit in another political incarnation. I would also endorse what the noble Lord, Lord Donaldson, has said about the competence of Northern Ireland politicians. We would just ask them now to face their own reality squarely and to start working together for the good of all. If I suggested in the Province that Northern Ireland politicians should go to Hong Kong, I might be open to misinterpretation, but I will certainly draw to their attention the point which the noble Lord has made.
Lord Shinwell: My Lords, is the noble Earl, Lord Gowrie, aware that none of the somewhat long statements that we have heard from the Leaders of the Oppositions has elicited the important element in this problem, which is that in the opening Statement the noble Earl failed (nor did any of those who followed him deal with the subject) to state whether the new proposals, the new device, or apparently new device—because, as we are all aware, the proposal for a devolved government is far from being original—have received the majority consent of any of the sections in Northern Ireland? Or is it just an attempt on the part of a new Minister, who realises that his predecessors have failed to solve the problem, to solve it by producing what might be called a gimmick, just a leftover from a previous suggested solution? Is the noble Earl aware of all that, or does he come to the House making a Statement about what is to happen in the future, based on a White Paper, without making it quite clear to Members of your Lordships' House that these proposals have the consent of any of the majorities on either side, either those on the Orange side or those in the minority? Unless he can do that, I suggest that they are just wasting their time.
The Earl of Gowrie: My Lords, I think that the noble Lord, Lord Shinwell, has slightly misunderstood what 1 said. I said very clearly that no British Government can impose their own views on the Province. Nevertheless, it is also true—and the noble Lord with his experience will be aware of this—that the views of one side of a divided community in Northern Ireland cannot be imposed on the other. That is one of the principal reasons why the power-sharing
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experiment failed. As a result of that failure, the United Kingdom Government as a whole—the British Government—had to take back powers, and they are now simply spelling out the terms under which they would be prepared to devolve powers again should the people of Northern Ireland and their representatives wish to have those powers devolved back.
Certainly in the six months that I have spent in the Province, I have had wide representations of a desire for greater local autonomy and a restoration of responsibility. With his customary acuteness, the noble Lord is quite right in saying that the political groupings make statements in which they declare that they will not co-operate with each other. But if they are not prepared to do so, direct rule of course will continue, with the added bonus of more scrutiny of its procedures by regionally-elected representatives. However, my own view, for what it is worth, is that there is a great hunger on the part of the people of Northern Ireland to put some pressure on their representatives to make the necessary, perhaps limited, mutual accommodations, one with another, across the community divide in order to improve what is a rapidly deteriorating situation there.
Lord Monson: My Lords, is the noble Earl aware that, according to a recent public opinion poll, no less than 74 per cent. of the population of Northern Ireland would be content with full integration with the rest of the United Kingdom? This fact has been known for some considerable time. Can the noble Earl say why no attention appears to have been paid to this majority point of view?
The Earl of Gowrie: My Lords, the Government are constantly paying attention to points of view, though, of course, one particular poll does not make a summer. But where the issue of full integration with the United Kingdom is concerned, the role of Northern Ireland as a constituent part of the United Kingdom has been made quite clear by legislation and by myself in my Statement. If the noble Lord means by full integration a form of extra or improved tier of local government in Northern Ireland, I can only say to him that that does not evade the responsibilities of elected representatives there to make the same mutual accommodations and confront the same dilemmas inherent in Northern Ireland's unique political history and character, as I mentioned only a moment ago.
Lord Vaizey: My Lords, is my noble friend aware that these proposals will be warmly welcomed by most responsible people who have been involved with the question of Ireland and Northern Ireland? Is he further aware that the reaction of politicians in the North of Ireland to these proposals will be a test of their sincerity and their statesmanship? Is he also able to say at this stage whether in the long run, assuming that the assembly is formed and begins to work successfully, it would be possible to hand over supervision of the police force?— which has been a major source of worry to both sides of the community—ultimately the test of the responsibility of the assembly in important matters?
The Earl of Gowrie: My Lords, the bulk of law and order responsibilities—for example, the Royal Ulster

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Constabulary, the criminal law and prosecutions, and the treatment of offenders—are in the reserved category of powers and, therefore, they could, as my noble friend appears to imply, be devolved at some time in the future, though of course the British Government would have to be conscious on these matters, as well as on other matters, that the arrangements under which they were being devolved were broadly acceptable to both communities in the way in which the general devolution proposals also have to be.
Lord Blease: My Lords, before the noble Earl sits down, I asked him a question about possible time for a debate on the White Paper in this House. If he is not able to answer that at this time, will he use his good offices to request a debate on the White Paper?
The Earl of Gowrie: My Lords, I shall certainly draw that to the attention of my noble friend the Chief Whip. As the noble Lord will be aware, these are not matters for me but for the usual channels. The noble Lord makes his views and desires perfectly clear, and they will of course be taken into account.

Local Government (Miscellaneous Provisions) Bill
House again in Committee on Schedule 6.
4.30 p.m.
Baroness Fisher of Rednal Baroness Fisher of Rednal moved Amendment No. 131:
Page 83, line 36, at end insert—
("Local Government
8. In section 33(1) of the Local Government (Miscellaneous Provisions) Act 1976 (Restoration or continuation of supply of water, gas or electricity) at end of paragraph (a) add "in consequence of an instruction given by him or", and at end of paragraph (b) there is added" or instruction "and at end of the subsection add—
"Provided that in any case where a Council undertakes to be responsible for all future outgoings in respect of a supply the undertakers shall not be entitled to refuse to restore such supply by reason of any sum or sums payable by the owner or former owner remain unpaid."
9. In section 33(2) at the end of the subsection add—
"2A. Where a Council becomes entitled to demand and recover from a person a sum under the preceding provisions of this subsection, the Council shall also be entitled to demand and recover from the said person any expenses reasonably incurred by the Council (including their establishment charges) in exercising their powers under this section in relation to the premises."
10. In section 33(4) at the end of the subsection add—
"4A. Any payments made by a Council in respect of any premises and recoverable from the owner, together with interest thereon from the date of service on the owner of the premises of the demand referred to in subsection (3) of this section, shall, from the date when such payments were incurred until recovered, be a charge on the premises and on the appropriate estates and interests therein or, if the premises having the same owner, on those larger premises and on the appropriate estates and interests therein.
4B. For the purpose of enforcing a charge under this subsection a Council shall have all the same powers and remedies under the Law of Property Act 1925 and otherwise as if they were mortgagees by deed having powers of sale and lease of accepting surrrenders of leases and of appointing receiver.").
The noble Baroness said: I apologise to the Committee if my voice is not very good, but I have a streaming cold. In moving this amendment, it is important to draw the attention of the Committee to the fact that powers currently exist within the Local Government (Miscellaneous Provisions) Act 1976 whereby a local authority can make arrangements with the statutory undertakings—the water authorities, the electricity and gas boards—for the reconnection of supply where disconnection has taken place. I should like to make sure that your Lordships understand that the main reason for the introduction of these powers in the Local Government (Miscellaneous Provisions) Act 1976 was to allow local authorities to try to remedy the situation where tenants in private sector properties were left without heat, light, and possibly water not as a result of their own fecklessness, but as a result of the landlord—whether he is a resident landlord or an absentee landlord—having defaulted on paying his bill. There was no misdemeanour on the part of the tenant; it was on the part of the landlord.
It is still common in many multi-occupied properties that the landlord takes responsibility for the payment of bills, especially for electricity, through slot meters or includes the costs of electricity and other services through the rent. Many of the larger authorities, and at the present time many of the district councils, are using the powers under the Local Government (Miscellaneous Provisions) Act. This legislation has proved valuable because it provides a national framework to remedy the distressing conditions in which the tenants find themselves when their power is turned off.
It is important for us to recognise—and it has been brought to our attention through the local press, the media, through television—how accidents occur in this type of property when electricity is disconnected. There are the obvious fire risks because people use candles when there is not any lighting. They tend to use oil stoves, which in certain circumstances are hazardous and can cause fires. There is a definite risk when disconnection occurs.
It seems to us completely unreasonable that, in order to get the reconnection of electricity, gas or water, the local authority—and the local authority is the ratepayer; I want to reiterate that—has to become responsible for the payment of the outstanding debt of the landlord who defaults. The ratepayer has to come to the aid of the unfortunate tenants in these circumstances, to make sure that they can continue to live in the properties. We think that that is an unfair burden on the ratepayer and the local authority. Our amendment seeks to remove this condition.
The remainder of the amendment allows for reconnection to take place where the landlord has merely asked for a disconnection of supply. Some landlords use the disconnection of supplies to rented accommodation in multi-occupied properties purely as a blackmailing element to get the tenant out of that particular property. We are saying in the final part of the amendment, therefore, that there should be power for the local authority to recover the administrative expenses from the owner when the ratepayer pays for the connection.
Long discussions have been taking place with local authorities and with the statutory undertakers. It

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was pleasing that in another place in a Written Answer on 29th March it was said that information had been laid in the Library that a new code of practice incorporating changes regarding statutory undertakings and disconnections was to be considered and put into operation. Perhaps one of the draconian measures that was considered in that code of practice was the disconnection of the owner's own electricity if he defaults and does not pay the debts of the property that he has rented. I hope that the Government will he considerate regarding our amendment. It is an amendment that has to be moved because, unfortunately, there are landlords who do not honour their obligations and who place their tenants at great risk and distress. It is for these reasons that I beg to move.
Lord Bellwin: The object of this Bill is to include in public legislation these uncontroversial matters appearing regularly in local authority rationalisation Bills which are being promoted by local authorities as a result of the lapse of their legislation by the end of 1986 under Section 262 of the Local Government Act 1972. To that extent the proposed amendment is not consistent with the object of the Bill. Indeed, in so far as the amendment seeks to impose an obligation on statutory undertakers, I wonder whether it is even within the scope of the Bill.
I appreciate that local authorities are concerned about the amounts of unpaid bills that they may be required to pay. However, I could not accept that the existing freedom of the statutory undertakers to negotiate with local authorities should be restricted unless there had been full consultation with them. The amendment's second purpose, of making sums due a charge on the premises, would in practice not necessarily be a better way of recovering money than local authorities' existing powers to collect rents. Putting a charge on the premises would also be indiscriminate since it could affect others than the defaulting owner who is to blame and I am not persuaded that it could be justified in national legislation.
That provision of the amendment which would cover cases where an owner merely gave instructions for disconnection would also be an indiscriminate measure, which would allow local authority intervention regardless of the circumstances in which an owner had sought disconnection. While I am satisfied that a local authority should be able to recover sums which are properly the responsibility of an owner, I am not at present persuaded that the fourth purpose of the amendment can be justified, which would allow a local authority to recover its own costs also, over which an owner has no control. Having said that, I would add that the whole issue, as the noble Baroness, Lady Fisher, rightly reminded us, has recently been considered by the gas and electricity supply industries in the context of a report by the Policy Studies Institute on the industries' code of practice on the payment of bills. My honourable friend the Parliamentary Under-Secretary of State for Energy has now received the industries' joint response to the report; and the changes they have undertaken to make to their code of practice were announced by him in another place on 29th March in reply to a Question by my honourable friend the Member for Fulham. The industries have agreed that where
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the board or region concerned becomes aware that a tenant is at risk of disconnection because of his landlord's debt, they will inform the local authority of the position and advise the tenant to do likewise. Disconnection action will be suspended for 14 days to enable the local authority to use its statutory powers to intervene.
Where the local authority agrees to help, disconnection will not take place provided the local authority agrees to pay to the board or region from future collection of rents an amount which covers the cost of ongoing consumption and clears the arrears. The board or region will therefore not insist on a lump sum payment of the bill giving rise to disconnection. The industries have also agreed to take all legal steps open to them to pursue the landlord for the debt including, where possible, disconnection at his home.
Those positive proposals will benefit tenants by reducing the risk of disconnection. They will also assist local authorities by giving them time to act and will mean that no local authority has to find a lump sum from its own resources. I believe, therefore, that they should be given a chance to work. My honourable friend the Parliamentary Under-Secretary of State for Energy has welcomed those and other positive proposals for changes in the industries' code of practice. He intends to maintain close interest in the whole operation of the code, and the gas and electricity consumer councils are to monitor implementation of the changes. In view of what I imagine the noble Baroness feels is a considerable and satisfactory advance on the position when the amendment was tabled, she may feel able not to press it.
Baroness David: I understand the Minister to say that the amendment was not within the scope of the Bill. It was of course accepted here by the Public Bill Office. The amendment is to existing powers under Section 19 of the Local Government (Miscellaneous Provisions) Act 1976. The 1976 legislation was itself drawn up with reference to local Acts, just as this legislation is, notably in that case the South Glamorgan Act. The basis of the amendment is to bring into that national legislation features which currently exist in Section 19 of the Greater London Council (General Powers) Act 1972. Although additional points are included which are not in the Greater London Council Act—recovery of local authority administrative cost and action on voluntary disconnections—the proposals are esentially based on local Act powers. In addition, the Bill seems an appropriate vehicle for amendng powers in an existing Local Government (Miscellaneous Provisions) Act. Perhaps the Minister would respond to that point, and I leave my noble friend to respond to the rest of what he said.
Lord Bellwin: In so far as the amendment seeks to impose an obligation on statutory undertakers, I said I wondered whether it was even within the scope of the Bill. The noble Baroness puts forward a powerful case for suggesting it is within its scope, and clearly others would adjudicate on that. However, the main thrust of my response was to the substance of the matter concerning those who tabled the amendment, who I hope will feel that the position now is a major advance on what it was previously.
Baroness Fisher of Rednal: I accept what the Minister said; namely, that the code of practice that has been brought forward is a welcome step for people in whatever properties they are occupying, but it will have a direct bearing, as the noble Lord said, on multi-occupied properties. As I said, this matter has concerned local authorities and statutory undertakers and it has been a case of one playing off the other to get bad debts in, but it seems that we are now going in a more sensible direction. If I understood the noble Lord correctly, many thousands of pounds will be saved by local authorities if the code of practice comes into operation. In view of the Minister's remarks, I will withdraw the amendment at this stage on the basis that shall read what he said to see whether I need return to the matter on Report.
Amendment, by leave, withdrawn.
Schedule 6, as amended, agreed to.
Schedule 7 [Repeals]:
[Amendments Nos. 132 and 133 not moved.]
4.47 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 133A:
Page 85, line 47, at end insert—

("PART 1A

LOCAL ENACTMENT REPEALED IN CONSEQUENCE OF SECTION 8

1980 c. xi.

West Midlands County Council Act 1980.

Section 51.")

The noble Lord said: It might be convenient if I spoke at the same time to Amendments Nos. 133B and 135A, No. 135A was printed in a previous Marshalled List but not in the present one, and it has therefore had to be tabled as a manuscript amendment, but it is consequential and therefore, with permission, I will cover that in my remarks also.
On Second Reading my noble friend Lord Nugent pointed out that many provisions in recent local Acts would be superseded by the provisions of the Bill. He asked why, in those circumstances, repeals had been included in Schedule 7 only in respect of provisions which corresponded to Clause 1 or which were consequential on Clause 11. I replied that I accepted in principle the need to repeal local Act provisions which were either being replaced by mandatory provisions in the Bill or which modified provisions in public general Acts which were also amended by the Bill. I promised that the matter would be discussed with the local authority associations with a view to introducing suitable amendments. I added that where provisions in the Bill were adoptive, local authorities would generally be free to retain their own provisions. Amendments Nos. 133A and 133B fulfil the promise I made. The repeals cover only the two limited categories I mentioned they would.
To be frank, it was our early hope to deal with these repeals by order under Clause 36 after the Bill had completed its passage through Parliament. But, as soon as we began examining the position, we realised that there were certain repeals that should be made in the Bill itself; they are the ones with which these amendments are concerned. I am sure the Committee will agree that it is highly undesirable to allow provisions in local Acts which amend public general Acts to remain in force together with those which are identical, or virtually identical, to amendments in this
38
Bill. I will not say more at this stage. I hope the Committee will agree that this series of amendments represent a practicable and reasonable course which is open to the Government. I beg to move.
Lord Mottistone: I should like to ask my noble friend for an assurance with regard to these amendments. Having looked at the relevant parts of the Isle of Wight Act which are to be repealed as a result of these amendments, it seems to me that rather more is being swept away than this Bill provides for. I should like an assurance from my noble friend that he and his advisers have looked closely into this question to see that they have not in some ways washed out the baby with the bath water. I wonder whether he can reassure me that in these local authority sections which are being removed there is nothing substantial which the present Bill does not wholly replace.
Lord Bellwin: I hear what my noble friend says. So far as I am aware, I am able to answer in the affirmative, but, as always, my noble friend, quite properly, raises matters which concern the Isle of Wight, and I would assure him that I shall take further advice. I undertake that, should it prove that his fears are in any way justified, I shall write to him and tell him exactly what is the position.
Baroness David: Following what the noble Lord, Lord Mottistone, said, I should like to ask the Minister whether he will consider withdrawing Amendments Nos. 133A and 133B until the Report stage, because I feel that there has not been adequate consultation with the local authorities and they have not been given ample opportunity to respond. I understand that, when they were notified of this matter, there were effectively only two days for them to consider it, and that seems to me totally inadequate. Since, clearly, we are not going to have the Report stage for another two or three weeks, it would be reasonable for the local authorities to be given another opportunity to look at the enormous list with which we are presented. It is much longer than the original list in Schedule 7. It seems to me that that would be quite a reasonable request.
Lord Bellwin: I confirm that we consulted the local authority associations on this issue, as I assured your Lordships we would do. They responded in a very swift and, if I may say so, a very constructive fashion, though understandably—and I take the noble Baroness's point—they were concerned about the short time allowed. Of course we should have liked to have allowed more time by using the order procedure under Clause 36, but, as I have explained, we do not consider that that course is practicable in relation to the local Act provisions in question. In principle, all the associations appear to recognise the practicality of what we are now proposing, though I must say that naturally they express some reservations, which the department has tried in discussions to satisfy. I cannot withdraw the amendments, but I am sure the noble Baroness will recognise that, if between now and Report there arise any specific troublesome points, we can always discuss them with those concerned. I should have thought that that was probably the way to proceed.
On Question, amendment agreed to.
4.53 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 133B:

("PART IIA

LOCAL ENACTMENTS REPEALED IN CONSEQUENCE OF SECTION 12

1980 c. x.

County of Merseyside Act 1980.

Section 29.

1980 c. xxxvii.

South Yorkshire Act 1980.

Section 44.

1981 c. xxv.

East Sussex Act 1981.

Section 91.")

PART IIB

LOCAL ENACTMENTS REPEALED IN CONSEQUENCE OF SECTION 20

1976 c. xxv.

County of South Glamorgan Act 1976

Section 56.

1979 c. xxiii.

Greater London Council

Section 5.

(General Powers) Act 1979.

Section 9.

1980 c. x.

County of Merseyside Act 1980.

Sections 11 and 12.

1980 c. xi.

West Midlands County Council Act 1980.

Sections 7 and 8.

1980 c. xiii.

Cheshire County Council Act 1980.

Section 10.

1980 c. xiv.

West Yorkshire Act 1980.

Sections 13 and 14.

1980 c. xv.

Isle of Wight Act 1980.

Sections 11 and 12.

1980 c. xxxvii.

South Yorkshire Act 1980.

Sections 11 and 12.

1980 c. xliii.

Tyne and Wear Act 1980.

Sections 7 to 9.

1981 c. ix.

Greater Manchester Act 1981.

Sections 17 to 19.

1981 c. xviii.

County of Kent Act 1981.

Sections 8 and 9.

1981 c. xxv.

East Sussex Act 1981.

Sections 4 and 5.

1982 c. iii.

Humberside Act 1982.

Sections 31 and 32.

PART IIC

LOCAL ENACTMENTS REPEALED IN CONSEQUENCE OF SECTION 22

1980 c. x.

County of Merseyside Act 1980.

Section 14.

1980 c. xi.

West Midlands County Council Act 1980.

Section 10.

1980 c. xiii.

Cheshire County Council Act 1980.

Section 9.

1981 c. ix.

Greater Manchester Act 1981.

Section 20.

1981 c. xviii.

County of Kent Act 1981.

Section 11.

1981 c. xxv.

East Sussex Act 1981.

Section 6.

1982 c. iv.

County of Avon Act 1982.

Section 4.

PART IID

LOCAL ENACTMENTS REPEALED IN CONSEQUENCE OF SECTION 23

1980 c. xi.

West Midlands County Council Act 1980.

Section 17.

1980 c. xiii.

Cheshire County Council Act 1980.

Section 24.

1980 c. xxxvii.

South Yorkshire Act 1980.

Section 35.

1981 c. xxxiv.

Derbyshire Act 1981.

Section 18.

1982 c. iii.

Humberside Act 1982.

Section 38.

PART IIE

LOCAL ENACTMENTS REPEALED IN CONSEQUENCE OF SECTION 25

1980 c. xiv.

West Yorkshire Act 1980.

Section 45.

1980 c. xxxvii.

South Yorkshire Act 1980.

Section 23.

1980 c. xliii.

Tyne and Wear Act 1980.

Section 14.

1981 c. ix.

Greater Manchester Act 1981.

Section 33.

1981 c. xxv.

East Sussex Act 1981.

Section 16.

PART IIF

LOCAL ENACTMENTS REPEALED IN CONSEQUENCE OF SECTION 26

1967 c. xx.

Greater London Council (General Powers) Act 1967.

Section 24.

1980 c. xiv.

West Yorkshire Act 1980.

Section 10.

1980 c. xxxvii.

South Yorkshire Act 1980.

Section 40.

1980 c. xliii.

Tyne and Wear Act 1980.

Section 15.

1981 c. ix.

Greater Manchester Act 1981.

Section 46.

1981 c. xviii.

County of Kent Act 1981.

Sections 24 and 25.

1981 c. xxv.

East Sussex Act. 1981

Section 15.

PART IIG

LOCAL ENACTMENTS REPEALED IN CONSEQUENCE OF SECTION 27

1976 c. xxxv.

County of South Glamorgan Act 1976.

Section 28.

1980 c. x.

County of Merseyside Act 1980.

Section 17.

1980 c. xiii.

Cheshire County Council Act 1980.

Section 26.

1981 c. ix.

Greater Manchester Act 1981.

Section 39.

1981 c. xviii.

County of Kent Act 1981.

Section 27.

1981 c. xxxiv.

Derbyshire Act 1981.

Section 17.

1982 c. iii

Humberside Act 1982.

Section 43.

PART IIH

LOCAL ENACTMENTS REPEALED IN CONSEQUENCE OF SECTION 29

1980 c. xiii.

Cheshire County Council Act 1980.

Sect on 94.

1980 c. xv.

Isle of Wight Act 1980.

Section 17.

1981 c. xviii.

County of Kent Act 1981.

Section 4.

1982 c. iii.

Humberside Act 1982.

Section 50.

PART IIJ

LOCAL ENACTMENTS REPEALED IN CONSEQUENCE OF SECTION 30

1980 c. xiv.

West Yorkshire Act 1980.

Section 82.

1980 c. xxxvii.

South Yorkshire Act 1980.

Section 90.

1981 c. xxv.

East Sussex Act 1981.

Section 90.

PART IIK

LOCAL ENACTMENTS REPEALED IN CONSEQUENCE OF SECTION 31

1980 c. xxxvii.

South Yorkshire Act 1980.

Section 94.

1980 c. xliii.

Tyne and Wear Act 1980.

Section 22.

1981 c. xviii.

County of Kent Act 1981.

Section 31.

PART IIL

LOCAL ENACTMENTS REPEALED IN CONSEQUENCE OF SECTION 33

1980 c.xi.

West Midlands County Council Act 1980.

Section 68.

1980 c.xiv.

West Yorkshire Act 1980.

Section 52.

1980 c.XV.

Isle of Wight Act 1980.

Section 47.

1980 c. xxxvii.

South Yorkshire Act 1980.

Section 83.

1981 c. ix.

Greater Manchester Act 1981.

Section 95.

1982 c.iii.

Humberside Act 1982.

Section 54.")

The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 134:
Page 86, line 27, at end insert—

("1936 c. 49.

Public Health Act 1936.

In section 2(2), paragraph (ii).")

The noble Lord said: This amendment is consequential on subsection (1)(b) of the new clause which was contained in Amendment No. 124. Section 2(2)(ii) of the Public Health Act 1936 limited the Secretary of State to constituting a joint board consisting of representatives of two or more authorities to be a port health authority, where the port health district consisted of two or more Customs ports. The new clause removes that restriction. I beg to move.
On Question, amendment agreed to.
The Deputy Chairman of Committees (Lord Jacques): We now come to the amendment which was omitted from the Fourth Marshalled List, although it appeared on the Third Marshalled List. It is now Amendment No. 135A.
Lord Bellwin Lord Bellwin moved Amendment No. 135A:
Page 86, leave out lines 28 to 30.
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 135 to 137 not moved.]
Schedule 7, as amended, agreed to.
Clause 36 [Consequential repeal or amendment of local statutory provisions]:
On Question, Whether Clause 36 shall stand part of the Bill?
Baroness Fisher of Rednal: I should like to speak on clause stand part. I listened to what the noble Lord said about the order procedure, and I want to reiterate some of the points which my noble friend has previously made. It is incumbent upon the Government to give to local authorities adequate notice when they are considering repealing or amending any provisions of a local Act. Two or three days' notice is just not good enough, especially when we consider that local authorities do not lightly decide to seek their own legislation. Over a long period of time local councillors and officials think earnestly about possible legislation which they consider would be effective in their own area.
If the Secretary of State considers that local provisions should be repealed or amended so as to fit in more easily with national legislation, due consideration should be given to the matter. It should not be dealt with merely by means of a cursory letter requesting a reply within perhaps three or seven days. There should be real consultation with local authorities. If local government is to mean anything, there must be working co-operation with national government. I am sure that the national Government will accept that many provisions on the statute book arose initially from various local authorities which became aware of problems or which wanted to better conditions in their own areas, and in the long run such provisions became national legislation.
Along with my colleagues on this side of the Committee, I feel that the concern of local authorities should be properly studied; as I mentioned on Second Reading, there should not be merely a token consultation. A local authority should be able to retain any local Act which it feels would be more beneficial in its area than would such national legislation as might be brought forward. In some instances where national legislation is put forward—such as the miscellaneous provisions now before us—local authorities might agree to a repeal, only in the distant future to wish that they had not given up a specific power which they had in local legislation. So I would ask the Minister to be very tolerant of the local authorities' wishes on any future repeal, and to ensure that the phrase "to consult" will mean real consultation, not merely a letter requesting an answer within seven days.
Lord Bellwin: I am sure the noble Baroness will accept from me that I, perhaps more than most, should like to believe that local authorities will not feel in any way badly done to, for whatever reason. I think it is also fair to say, in connection with this whole Bill, that there has been a great deal of con-
42
sultation. In fact, it is really what local authorities need; they need this particular legislation. I am informed that they were pressing for it long ago, and it makes good sense that it should be there because obviously we have to do something that will prevent them all having to come individually to make cases. They will now have powers which will obviate the necessity for that, so that will be what they are wanting.
This is bound to be the situation. I have now had the privilege (if that is the right word; I am not sure that it is) to deal with (I am not sure that is the right phrase, either) a great number of Bills in the last three years, and always this matter of consultation arises. Always one tries to do the best one can, and always, it seems, there is someone somewhere who feels that there ought to have been more consultation. I entirely take the noble Baroness's point that two or three days on anything is really less than desirable; but I hope she will agree that there can be situations which arise where that may in fact happen, whatever earlier period of consultation there may have been.
So I would say that, so far as concerns, in particular, the clause to which she has referred, in fact an order may not be made until the local authority has been consulted, and they will be given plenty of time for this purpose. I would imagine, too, that they will be taking the initiative. So while I accept in general what the noble Baroness is saying, I know that she has also seen so many Bills going through that she knows that these situations can arise, and it is not done with any motive at all other than from anxiety to get into the Bill in question the points that everyone needs to have covered.
Baroness Fisher of Rednal: I take in some of the points that the noble Lord has made, but one presumes that consultation could have taken place earlier. I mean, in the repeals section we are repealing Acts before the ink in which they have been printed is even dry, to be perfectly candid. There is the Humberside Act 1982. We are repealing that under three clauses according to the latest schedule. The oldest one is the County of South Glamorgan Act, the most controversial one; the first one of the local government ones. In the case of all these, local authorities, with their officers and with their councillors, spent money and spent time, and used the parliamentary time; and one wonders, for what?
The consultation procedure, I should have thought, could have started even in 1981, to let the local authorities know that a miscellaneous provisions Bill was coming along and that it was hoped to accommodate this, that the other which they might be bringing forward. So I would have said that there should be consultation over a longer period, because I think there are already four Bills which will be going upstairs to a committee in the near future. I know that I have been asked to sit on the Epsom and Walton Downs Bill. Then I think there is the Nottinghamshire one; and I think Derbyshire is also going to a committee. I hope that their consultations have taken place, and that the committee will not be discussing things that have perhaps got into this miscellaneous provisions Bill. So while I would have said that on repeals we might have greater consultation, there should really be greater consultation on everything,

43
so that public money or parliamentary time is not wasted.
On Question, Clause 36 agreed to.
Clause 37 [Citation and extent]:
Lord Bellwin Lord Bellwin moved Amendment No. 137A:
Page 43, line 34, after ("11(2)") insert (",[Work undertaken by local authorities and development bodies under certain agreements with Manpower Services Commission](3)").
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 37, as amended, agreed to.
In the Title:
Earl Grey Earl Grey moved Amendment No. 138:
Line 4, after ("Acts;") insert ("to make provision for the licensing of existing and future sex establishments;").
The noble Earl said: The reason for moving this amendment is that the Long Title should reflect the important contents of the Bill and yet there is no reference to Part II of Schedule 3 in the purposes of this Bill. I feel the Title should be amended as I have suggested. I beg to move.
Lord Belstead: I take the point which the noble Earl, Lord Grey, is making in this amendment, but I have reservations about the precise form of the words proposed in it. It would seem to carry an implication, which does not accord with the general tenor of the discussions on Schedule 3, that local authorities are obliged to licence existing and future sex establishments. The Committee has been at very great pains to make the point that this is not so, and I think the contrary would be implicit if this amendment was made in exactly the words that the noble Earl has chosen.
I do accept, however, that technically an amendment to the Long Title may be needed to cover the proposed controls which arc set out in Schedule 3. While I hope, therefore, that the noble Earl may agree to withdraw his amendment for the reasons I have given, I will give an undertaking to take this point away and to look at it.
Earl Grey: I am very grateful to the noble Lord, Lord Belstead, for being so helpful over this amendment. I think that in my amendment I did not make any reference to any obligation; I used the words,
"to make provision for the licensing of existing and future sex establishments".
But, in view of what the noble Lord has said and of his helpful remarks, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Bellwin Lord Bellwin: moved Amendment No. 138A:
Line 14, after ("registers") insert ("to exclude from the definition of" construction or maintenance work" in section 20 of the Local Government, Planning and Land Act 1980 work undertaken by local authorities and development bodies pursuant to certain agreements with the Manpower Services Commission which specify the work to be undertaken and under which the Commission agrees to pay the whole or part of the cost of the work so specified;").
The noble Lord said: I have already spoken to this amendment, and I beg to move.
On Question, amendment agreed to.
House resumed: Bill reported with amendments.

Antiquities Bill [H.L.]
5.9 p.m.
Lord Abinger: My Lords, I beg to move that this Bill be now read a third time. If I may make one brief comment on it, I believe that the subject of the Bill, the better care of antiquities, has a wider than purely domestic interest. If I may put it like this, I think that we in Britain would be concerned and distressed if states like Egypt and Israel, or great nations like Italy and Greece, did not take proper care of their antiquities. Antiquities are not only part of a national heritage; they are part of the human heritage. The countries I have mentioned would have an equal right to hope and expect that we in Britain would take proper care of our portable antiquities, too. Unhappily, Britain is behind other countries in this respect in our legislation; but, while I cannot claim that this Bill aspires to being able to put a bad situation completely right, I would claim that it is at least a step in the right direction. The noble Earl who has spoken for the Government in our debates on the Bill has suggested that the Bill proposes a radical change in the law on property. I can only say with the greatest respect that I cannot agree with him. I would claim that the Bill seeks no more than a fairly modest extension of the existing law, the law of treasure trove.
I should like, in conclusion, to express my gratitude and thanks to noble Lords who have supported the Bill; my particular thanks to the noble Lord, Lord Windlesham, who has given it staunch support and who has reflected the view of the British Museum; my thanks to the noble Baroness, Lady Birk, who spoke eloquently in support of the Bill and with the authority of having been a Minister in the Department of the Environment; and, not least, my thanks to the noble and learned Lord, Lord Elwyn-Jones, for his brief intervention. He suggested that in some respects the law of treasure trove is an ass. My wish might be that this Bill would seek to make it a little less asinine.
Moved, That the Bill be now read a third time—(Lord Abinger.)
The Earl of Avon: May I first acknowledge the time and attention that my noble friend Lord Abinger has devoted to this Bill and the contributions of others in this House who have generally supported the Bill or have sought to improve it. Its basic aim is to seek improved arrangements for the recording of archaeological finds and for their subsequent disposal. If, in the course of these debates, the Government have seemed rather less than wholehearted about the Bill, this reflects some doubts whether in practice these aims are achievable in this way. There are also some matters about which your Lordships have heard me express misgivings. These points have been mentioned in the course of debate and I have no intention of labouring them now. The Bill has many friends in this House and I would not want to cast a blight on

45
the proceedings. I end as I began, by complimenting my noble friend on the way he has piloted the Bill through the House and on the diplomatic way in which he spoke this afternoon.
On Question, Bill read a third time, and passed, and sent to the Commons.

Transport (London) (Amendment) Bill [H.L.]
5.13 p.m.
Lord Underhill: My Lords, I beg to move that this Bill be now read a second time. The purpose of the Bill is to restore the position of the Greater London Council and the London Transport Executive to that which it was held generally to be prior to the judgment of the noble and learned Lords of Appeal. The importance of London's passenger transport can hardly be overstressed; 5½ million trips are made each day, some 55 per cent. of which are in connection with work. Central London alone provides employment for 1 million persons, 80 per cent. of whom commute by London Transport and British Rail.
We are not debating here the Greater London Council's low fares policy but it must be made absolutely clear that until the judgment, few if any had thought that the fares policy adopted by the GLC was unlawful. I have a 157-page discussion booklet on Labour's GLC election policy which was considered at a two-day conference as long ago as October 1981. This included a 22-page section on transport policy drawn up by a 19-member working party. The low-fares policy was argued and recommended in that document. This was publicised, but no one suggested the policy was unlawful. This was included in the GLC election manifesto and was one of the controversial items in the campaign. No one suggested that it was unlawful. A number of independent observers said that this was an imaginative effort to tackle traffic congestion, energy saving and to deal with environmental aspects in connection with London Transport. There may be some who have criticised the proposal, but no one has suggested that it was unlawful.
One important reason why the proposals were not considered to be unlawful was because there was general acceptance that they were within the powers under the Transport (London) Act 1969. That Act was quoted in some detail in the course of the judgment and it was stressed that there was a difference between that Act and the Transport Act 1968 which dealt with the provision of public transport outside Greater London.
When the London Bill was introduced in 1969 the Ministers of the day intended clearly to give wide powers to the GLC. I am pleased that the noble Lord, Lord Marsh, is in his seat today and is down to speak because I want to quote from a statement that the noble Lord made at the Second Reading in another place on 17th December 1968 (in cols. 1247–8). He said:
"The main power that the Council will have, apart from the power to appoint, will be to pay grants to the Executive for any purpose it thinks fit and to issue directions to the Executive. This gives the Council the right to prescribe the policy lines to be followed and to take financial responsibility for its decisions.
46
This is very important, because if the Council wishes the Executive to do something that will cause it to fall short of its financial targets, it will itself have to take financial responsibility for it. The Council might, for example, wish the Executive to run a series of services at a loss for social or planning reasons. It might wish to keep fares down at a time when costs are rising and there is no scope for economies. It is free to do so. But it has to bear the cost".
That statement was made on behalf of the Government of the day when the 1969 London Bill was introduced. The statement, your Lordships will agree, is clear and needs little or no elaboration.
I could give a number of extracts from the Minister's speech, but I will content myself with just one more statement which the noble Lord made in reply to that debate in another place. He said:
"if a democratically-elected authority decides that it wishes to spend its rates in a particular way for the benefit of its electors it is a rather unconstitutional theory that Parliament should tell the authority that Parliament knows best".
That, I am sure noble Lords will agree, is what democracy, the constitutional position and local government are all about.
I thought it might be helpful if I read through the debate on Second Reading when the 1969 Bill came to your Lordships' House. The noble Lord, Lord Winterbottom, then Parliamentary Under-Secretary, on 10th June 1969 (in column 533), when dealing with the financial duties to be placed on the Executive and the procedure for controlling fares, said:
"The practical effect of this will be that Londoners through their elected representatives on the GLC will decide the pricing policies and levels of service for their public transport and will take financial responsibility for their decisions. This would appear to be an eminently reasonable approach".
I am sorry that the noble Lord, Lord Nugent of Guildford, is not with us. He was speaking for the then Opposition and said:
"The future financial policy for London Transport will be strongly influenced by the fact that the deficit will fall on the ratepayers who elected the GLC. This, I think, is a thorougly sound constitution and I commend both the Government and the GLC in agreeing to it".
To be absolutely fair to the noble Lord, Lord Nugent, I must say that in a later part of his speech he hoped that any subsidy from the rates would be on capital expenditure and would not be on current revenue. The noble Lord was entitled to that policy viewpoint. But at no time did he challenge the interpretation which has been generally placed on the 1969 Act that the GLC have powers to pay from the rates towards current revenue.
Just a few words on what has happened with the low fares policy. It is claimed that it generated 10 per cent. extra journeys, 400,000 additional bus journeys and 140,000 additional tube journeys each day during which the policy was in being. A survey that was undertaken indicated that 40 per cent. of these related to work journeys; the other 60 per cent. were additional journeys through fares reductions. Surveys generally showed that high fares discourage employment in central London, and I must remind your Lordships that 60,000 persons outside the Greater London area travel into work each day by London Underground. A journey of only 30 miles return will now cost a husband and wife £6.40, and when we remember that same journey can be done by car for £1.60, there is obviously an encouragement not to go by public transport but to add to the congestion of London's roads.

47
Following the judgment, the GLC has considered it desirable and essential to obtain counsel's opinion on various matters. One such opinion dealt solely with what capital projects could be lawfully embarked upon in the light of the judgment. This has serious implications for the future of the London Transport system in light of the break-even requirement which has been laid down.
It is estimated that by the late 1980s fares will need to rise by 50 per cent. in real terms over the increased fares which started on 21st March this year. There will be 40 per cent. less journeys by bus and 17 per cent. less journeys by tube. The problems of London traffic congestion will be immense. There are already in hand, because of the judgment, reductions in bus service levels by thinning out, withdrawal of some routes and cuts in service frequencies. The tube will suffer also by cuts in service frequencies, closure of some 25 stations and possible withdrawal of branch lines and little used lines in the outer areas. It is claimed that in the first week of the increased fares (since 21st March) the number of journeys fell by 17 per cent.—that is, 800,000 fewer journeys in one day. Higher fares can mean less travelling followed by further cuts and restrictions. All this has a multiplying effect for the problems of employment in the Central London area, and a possible increase in London weighting because of the heavy prices. A 30 mile return journey on a monthly season costs £330 in the course of 12 months, and there are great problems.
Since the judgment, editorials in various papers and journals have urged the need for the Government to clear the present confusion and for the law to be revised. I will not take time in quoting from all those publications because there are possibly more important statements to be made. I refer to the opinion of counsel regarding the capital projects. This was a 38-page opinion, which the GLC obtained. I am not going to read the 38 pages but I should like to quote the last paragraph:
"In conclusion, for as long as the duty to operate London Transport's bus and underground systems upon business lines attempting to break even on revenue account in any two consecutive accounting periods remains the overriding duty which must prevail above and be given priority to the duty under Section 5 of the 1969 Act' to provide or secure provision of such public passenger transport services as best meets the needs for the time being of Greater London', it is the melancholy fact that the public transport systems in the capital are likely to deteriorate and to contract. Capital expenditure must necessarily reflect the prospective public demand, as well as the need to attempt to balance the books on the revenue account".
The concluding part of the opinion says:
"The Council is in the melancholy position of being prevented by law from 'securing the provision of such public passenger transport services as best meet the needs for the time being of Greater London'. That position results ineluctably from the existing consolidated revenue account deficit which will probably persist for at least another three years. If the Secretaries of State for Environment and Transport wish the Council and LTE to secure such public passenger transport services as best meet London's needs or if they wish to prevent the continual reduction in the scope and quality of such services and facilities, the law will have to be changed. In any event the conflict of legal opinions may be thought to call for its urgent clarification".
That is the end of a 38-page opinion by Mr. Roger Henderson, QC, dated 8th March 1982.
I wish to refer to one other opinion. This is interesting because it is a joint opinion by three counsel for the
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Greater London Council and two counsel for the London Transport Executive. The opinion refers to known divergence of counsels' views on the proper interpretation of the Lords' judgment. I quote:
"The effect of this divergence is that counsel for London Transport consider that the GLC is entitled to provide a higher level of subsidy for the current year than is considered to be permissible by counsel for the GLC".
The joint opinion then sets out points on which the counsel are in agreement:
"We are also in agreement that it is most desirable that the principles upon which the GLC may grant subsidy to London Transport should be clarified by legislation … We therefore consider it necessary that legislation for the operation of the London Transport system should state unequivocally the principles upon which subsidy may be granted. Successive GLC administrations had approved budgets without challenge until 1980 on the assumption of a subsidy which included an amount which was decided to be necessary as a matter of policy in order to maintain a particular standard of service at given fare levels. If the continuance of this approach is considered desirable, it is necessary for there to be legislation which makes it clear that such policy objectives may properly be taken into account. It will obviously be a matter of consideration as to whether, if such legislation is introduced, amendments to other provisions of the Transport (London) Act, 1969, are desirable".
This Bill will go a long way to clarifying the situation set out in those two important legal opinions. It will provide grants which the GLC may make to the Transport Executive as provided in Section 3(1)(a) of the 1969 Act and will also include grants towards current expenses. The passing of this Bill would give the basis for effective planning for 1983, for capital projects and level of fares. I am assured, in the light of those two opinions, that urgent action is required on these matters for which planning needs to be started almost at once. It must be emphasised that the GLC would have the ability under this amendment to decide what is reasonable. Although the council will not be limited by statute, it would still—even if this Bill which I am introducing is approved—need to have regard to its fiduciary duty. My Lords, I beg to move that this Bill be read a second time.
Moved, that the Bill be now read a second time.—(Lord Underhill.)
5.30 p.m.
Lord Tordoff: My Lords, let me start by saying quite clearly from these Benches that we welcome this Bill and we thank the noble Lord, Lord Underhill, for introducing it. It fills a gap in the legislation which has been caused by the decision of the Lords of Appeal and the Government made it quite clear through the noble Lord, Lord Bellwin, during the discussion on the Transport Concessions (London) Bill recently when they sought to confirm the position of London Transport in relation to the elderly and the disabled that it was not their intention to take any further action. Therefore, I think it is greatly to the credit of the noble Lord, Lord Underhill, that he has brought this Bill before your Lordships today.
I made it clear during the discussion on that earlier Second Reading that even this is not enough to solve the problem, but at least it goes some way towards helping transport in London in that it gives London equality with the rest of the country. Having said that, one could almost sit down and hope that the thing would go through. In my opinion, there should be very little

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further debate. What is being asked for is a fair deal for London in relation to the rest of the country, but I have no doubt we shall not be able to leave it at that. I repeat that even this is inadequate to solve the existing problems although it does go as far as it is possible to go with this type of Bill—anything further would have to come from the Government side. If I repeat several things that I said during the Second Reading of the last Bill, I apologise to your Lordships, but I think they should be firmly on the record.
The first fact is that we are dealing with the capital city of this country, and that brings particular problems. It brings particular sorts of congestion and therefore perhaps a greater than usual need for a good public transport system. London has a very large number of commuters which other cities do not have in the same proportion. Some of those commuters pay rates and some do not. Not all of them can travel on London Transport—many of them travel on British Rail, particularly on the south side of the river. The problems of geography as well as the problems of finance bedevil this matter. Some of the ratepayers cannot benefit from the subsidies and some of those who benefit are not ratepayers.
The Minister was somewhat critical when I spoke on this subject before, and perhaps I did not make my position clear. I criticise the GLC for going too far too fast, and I think perhaps that has been at the root of some of the psychological reaction to the "fares fair" policy on the part of the Government and on the part of many ratepayers. I think they were wrong to expect to be able to recoup such large amounts of money—of the order of £125 million—from the ratepayers alone when, as I have said, many rate-payers are not able to benefit. Among those who do not pay but who do benefit are the large number of tourists who come into this great city of ours and the large number of business visitors, who naturally come to the capital city for a variety of reasons. A tourist tax is something which is outside the scope of this Bill, but it is something which has to be considered, it seems to me, if we are going to get the totality of this problem solved. However, in the end the cost of doing nothing is very high indeed. For a start, the sheer congestion has an enormous cost.
Many of us will have had various bits of information passed to us from a person called "Dave", to whom I have not been properly introduced. He sent me something about fare levels in London which I found quite interesting, and others may also have had that. I think, certainly, that many of the statistics given in that lead one to suppose that the extra cost of existing private vehicles under the new situation is of the order of £40 million. I do not know whether that figure is correct or not, but certainly the cost must be very significant.
The cost of accidents as a result of the extra congestion on the roads is another very significant figure. The estimate has been put as high as 3,000 more accidents in Greater London in a year and possibly between 30 and 40 fatalities, the cost of which I would not care to calculate. As the noble Lord, Lord Underhill, said, already in the short time since the fares rose we hear there has been a loss of something like 17 per cent. of passengers on London Transport. This increased congestion, increased pollution
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and increased frustration is only the beginning. I would remind your Lordships that the tourist season has not started yet and the congestion we shall have in the next few months is going to be horrendous.
Let me not pretend that throwing money at the problem is the complete answer. There is a need for greater efficiency, and the record of London Transport in many respects is not good. I am told that in the period between 1974 and 1981 there has been a decline in passenger miles of something like 6 million, while at the same time there has been an increase in staff of some 6,000. That seems to me to be a particular form of Parkinsonian law we could well do without. And it is not just the pen-pushers who are the trouble. There is a continued resistance to accept automation and a continued failure of management to press forward with it. There are far too many one-man buses that are being manned by two, but of course it is exceedingly difficult to achieve an improvement in productivity when the staff of London Transport are totally demoralised by being told that their services are no longer going to be required because of the increased fares leading to a rundown in services.
What the noble Lord, Lord Underhill, has told us about the reduction of services is really quite frightening—the closure of stations and the removal of buses. How could anyone in that situation feel they have a secure future? And if they do not feel that they have a secure future, how can they possibly participate in genuine discussions on productivity? So the staff have become demoralised and they need a new boost to their morale. This Bill is a start, and I hope the Government will not allow their prejudice against the present rulers of the GLC to affect their judgment.
This, as I said before, is a Bill about fairness. It is a Bill about giving Londoners the same rights and rules as other people; and justice demands no less. The Government may feel that the rights will be abused. They are perfectly entitled to that view, but I submit, as the noble Lord, Lord Underhill, said in quoting the noble Lord, Lord Marsh:
"That is a problem for the electors of London at the appropriate time".
Nothing is provided free in this world, and particularly is that true of transport. The question is: How shall we best pay for it in order to encourage an efficient, integrated public transport system in London, not only in the local interest but in the national interest? It cannot be achieved by charging economic fares: it can only be achieved by a subsidy of some sort provided either by the Government of by the GLC and preferably by both.
I note that the noble Lord, Lord Mottistone, is speaking after me and doubtless he will suggest that this is another attack on the ratepayers and industry. I hope he does not take that view. On that point, I would suggest that even if the rate costs go up slightly there will be some compensation in terms of a reduction in the London weighing and there is an equation to balance there. I hope I do not anticipate his argument.
The Bill deals only with the position of the GLC in this very unusual circumstance. As I said earlier, I think that there is a need to tackle the whole of transport in the South-East region, but that, again, is not a purpose that can be tackled by this Bill. But

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I hope that the Government will give a fair wind to this Bill and that your Lordships will give it a Second Reading today.
5.40 p.m.
Lord Mottistone: My Lords, in commenting on this Bill I speak as a London ratepayer in a small way. It so happens that, when the fares went down, I worked out that my increased rates just about balanced the extra value I would get from my own use of London Transport. Perhaps the situation is now reversed—I do not know. I have not had time to work it out. So your Lordships can take it that, though a ratepayer, I am a neutral one.
It seems to me—though I am sure that the noble Lord, Lord Underhill, was properly advised by his learned advisers—that the amendment to the 1969 Act as effected by this Bill does not give the value that is required of it to warrant the necessary authority. It seems to me that the underlying section in the parent Act is Section 1, where the Greater London Council is called upon,
"to develop policies, and to encourage, organise and, where appropriate, carry out measures, which will promote the provision of integrated, efficient and economic transport facilities and services".
That, surely, is the real objective. Just to supplement Section 3(1)(a), to spell out what purposes might be covered, does not seem to me to add very much, because what it says is, "the Executive for any purpose ". Anyhow, that is as may be. I am not a lawyer and I do not understand these things. But I should not have thought that the Bill does what it sets out to do.
We had a comparison from the noble Lord, Lord Underhill, about the effects of the new high fares. He said that a husband and wife journeying in by car from 30 miles outwould have to pay £1.60, as against £6.40 to come a similar distance by Underground. I calculate that the minimum cost of running a car is what your Lordships and I are paid by the House for our own transport costs, which I think is 22½p per mile. That covers not only the £1.60 for petrol in the example given by the noble Lord, Lord Underhill, and it looks much more like £6·60—
Lord Underhill: My Lords, I am obliged to the noble Lord for giving way. I am not suggesting that people will buy cars especially to travel into town. They already have a car, and because they have one they will be tempted to use it and pay £1·60 instead of £6·40.
Lord Mottistone: My Lords, if they go on doing that for any length of time, as anybody with experience knows, it will cost them the equivalent of 22½p per mile; and the AA's figures are much higher. So I do not think one should take that as a categorical statement about figures. As I work it out for the kind of distance that I travel, which now costs 40p instead of 20p, it costs about three times as much to travel by car and about four times as much to use a taxi. Your Lordships may say that, because a taxi takes only one person and there are all the other factors related to it, that is very reasonable, and that it would be better if the differences were six times and eight times. But I do not know whether that is a very easy
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calculation. The fact is that, by any calculation, the new increased fares are not disproportionately high, even though it might be a good thing if they were lower.
To turn to the effects of the "Fares Fair" policy—and I have always wondered: fair to whom?—the benefits seem to go to the non-ratepayers who are often tourists. I am sure that they are necessary here and that they spend lots of money in the capital, but people have different views about how many they want here at any one time. Then there are the out of London commuters, to which the noble Lord referred, and I should have thought that Londoners as a whole did not particularly welcome giving special treats to them. They may have to give a treat to a tourist, in order to bring him into the country, but I question whether we should give a treat to an out of London commuter. I expect that some of your Lordships are out of London commuters, and I do not want in any way to be unpleasant to your Lordships, but for a resident that is not necessarily a good thing.
Then there are the young people. It depends how young they are. There are quite a lot of people who are not ratepayers and who do very nicely out of that sort of thing. The young people and the not quite so young get much higher wages and salaries, relatively speaking, than they did 20 or 30 years ago. That is a fact, and they can afford more than they could when I was a young man. I understand that the old and infirm are not affected, so we can discount them.
I should now like to look at the penalties imposed upon the ratepayers. A very large number of domestic ratepayers end up evenly balanced, as 1 do. That must be the average situation, and it is nice to think that one is sometimes an average person. But the people who need to be considered—and here I must disappoint the noble Lord, Lord Tordoff—are the non-domestic ratepayers. They are the ones who get clobbered.
According to the rates information which I get from the Westminster City Council—I do not know to what extent this reflects itself on the GLC side, because it is rather difficult to identify the figures—332153; per cent. of the total rates are commercial and 6·4 per cent. are domestic. So that one-fifth of the rate income is domestic and four-fifths is commercial. That seems to be a bit hard. I do not suppose that the small businesses can afford to pay London weighting, though, of course, the big companies and the Civil Service pay London weighting. But the ordinary small trader around the place, who in many respects provides the life blood of this capital, is the person who is getting clobbered and going out of business. He is the one who will bear the main brunt.
One might suspect the London Labour Party of not being sympathetic to such people, and I wonder whether they realised when they formulated their great plan that that was where the real penalty would be imposed. I wonder whether they thought the increase would be paid by the rich ratepayers—the imagined Lordships, who are all supposed to be so much more wealthy than any of us are, except the ones who do not come to this place. It may be that they, thought they would clobber the wealthy millionaires, but I think they will find that they clobbered the small shopkeepers. So it is for that reason above every-

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thing else, that I do not think they had an undeniable right to make the kind of shift that they did.
One then wonders to what extent it is reasonable for any civic authority to have freedom to adjust the rates to provide something, if anything, to assist their local transport system. I think it is reasonable that they should be able to do something. I come back again to Section 1 of the 1969 Act which I suggest, to be effective, requires London Transport to operate with the minimum gross labour costs. Grants towards current expenses, which are referred to in the Bill before your Lordships, will not, I should have thought, encourage the diminution of gross labour costs. The noble Lord, Lord Tordoff, drew attention to this point. There is no doubt that London Transport and many other nationalised enterprises—if you can call them enterprises, because they do not usually turn out to be very enterprising—tend to have an awful lot of fat on the labour side. There was a frightening article in the Evening Standard about a workshop—think it was a tube workshop but it may have been a bus workshop—into which a reporter and a photographer managed to get where they found people waiting about doing nothing: having cups of tea, playing cards, et cetera. It was a gross waste of money. I am afraid that a further grant would encourage more of this. How properly to support, if support is necessary, a body which does not in the last resort have to rely on making the books balance is a great problem. It is the great problem of our era. It applies to any body, any organisation, which does not in the last resort have to rely on making the books balance in order to remain in business. I should not have thought any little grant like this would help them very much.
To sum up, I do not think that this Bill does what it sets out to do, and even if it did I do not think it would make life better for the people of London. Something much more radical is required. Selling off London Transport to private industry, in sections, is needed to get the efficiency and effectiveness which Section 1 of the 1969 Act requires. Therefore, I hope that when we come to consider whether the Bill should be given a Second Reading, we on this side of the House will decide not to give it one.
5.52 p.m.
Lord Marsh: My Lords, I listened with interest to the last comment of the noble Lord about the possibility of meeting at least part of the problem by selling off parts of London Transport to private enterprise. If he identifies buyers, I hope he will let me have prior notice. I shall then proceed to sell them the pigeons in Trafalgar Square.
The great problem that we have with London Transport is that inevitably it is a vastly expensive, complex undertaking. I find it a source of great pleasure that I am able to agree with almost everything which the noble Lord, Lord Underhill, said, because we have been friends for a long time. Having said that, I regrettably have to go on to say that I shall not support his Amendment Bill. On the arguments which he puts forward, all people would, I think, accept today the importance of an urban transport policy.
As a dedicated supporter of market forces I should be the first to accept that it is impossible to run an
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urban transport system without very large and heavy subsidies. The problem is that when one talks of subsidies and makes a case for them there is the danger of thinking that subsidies come from Governments, or local authorities. But subsidies come from people and there is a limit to how much they can pay, no matter how good the arguments which can be advanced. The problem, which has created this situation, is not that a decision was taken to subsidise Greater London's transport but that it is subsidised at a level which is insupportable, whichever party is in office. This is an argument which I would strongly promote.
May I pass on to some basic points. The noble Lord, Lord Underhill, quite fairly quoted from speeches which I made in the course of the debates on the 1969 Act. The interesting point, as the courts have revealed, is that it is just as possible to point to other comments which lead one to a totally opposite conclusion. The brutal truth is that the 1969 Bill was designed to appeal to a Labour-controlled Greater London Council which was positively enthusiastic about a high level of subsidy and that halfway through it had to be amended to make it acceptable to a Conservative-controlled Greater London Council—ably led, if I may say so, by the noble Lord, Lord Plummer—which was rightly suspicious of the whole concept and which was determined, above all else, not to get itself encumbered with an open-ended, ever increasing deficit. So the whole concept of the legislation changed in mid-air. if ever there were an argument against party political control of large, complex undertakings, the 1969 Act provides that argument.
To run briefly over what happened, as I saw it—and I know as much about these problems as anybody else in the House, because I created as much of these problems as anybody else in the House—in 1968 I was invited by the then Prime Minister to transfer from the Ministry of Power, after the completion of the Steel Bill, to the Ministry of Transport where I was to take charge of the 1968 Transport Bill from Mrs. Castle. I explained to the Prime Minister that I knew very little about the Transport Bill, that what little I did understand I disagreed with and that I would far rather stay at the Ministry of Power. As many noble Lords are aware, as always happens on these occasions I became Minister of Transport about an hour and a half later.
This is not the time to discuss once again the 1968 Transport Bill, other than to say that some of the key elements in the Bill led Mrs. Castle, logically as she saw it, to the 1969 London Transport Bill. Having created the passenger transport authorities and executives in the major conurbations, she was convinced, particularly since the creation of the new Greater London Council in 1965, that it would be totally illogical to have every conurbation in the country in charge of its own transport system with the exception of the biggest transport system and the biggest conurbation in the entire country. I am sure that she would not normally nominate me to speak on her behalf and I have not asked her permission, but I think that was her logic and one can see how it led to the separate 1969 Bill. She felt that control over London Transport should be transferred from central government to the new local authority.

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For reasons which I will come to, I believed that was a fundamental mistake. Indeed, I felt so strongly about the 1969 London Transport Bill that I went with a paper to the full Cabinet and asked my colleagues to allow me to withdraw the Bill. Looking back, I am not surprised that they refused. In 1967, the Government and the then Labour-controlled Greater London Council had reached agreement in principle. Although political control of the council had passed to the Conservative Party under the leadership of the noble Lord, Lord Plummer, negotiations were still continuing. But there was, as I said at the beginning, a fundamental difference which followed that change. The difference was that Mr. Plummer, as he then was, recognised very clearly the enormous dangers of accepting the enormous financial obligations of the London Transport Board. I remember quite clearly, and I have recently checked my memory, that he said over and over again, "I accept that it may be necessary to subsidise on the capital account but I will never be a party to an open ended subsidy on the revenue account". That was a fundamentally different view of the same Bill.
If I may say so to noble Lords, (outsiders may regard it as cynical though others here will recognise the inevitability of it) the fact is that in the course of the Committee stage I was speaking to two audiences. I was trying to persuade the Government supporters to continue in support of the Bill and I was trying to persuade the noble Lord, Lord Plummer, kindly to take it off the hands of the Treasury, who were delighted. They were as delighted to get rid of it as the Labour GLC had been to receive it. The argument then was not about transport policy but about how to get rid of this element of public expenditure by central Government and put it on to the back of the local authority. Quite why we wanted to do that I do not know, because we have shown no greater historical ability more ably to control local government expenditure than we control central government expenditure.
We argued all the way through on that basis and in the event there was a capital reconstruction. Assets worth £270 million were transferred for £27 million to the local authority, and the £27 million was in turn split with the National Bus Company. Again this was the danger. Eyes were fixed on the capital account. But it is the revenue account which is the danger every time in a transport undertaking. As I have already said, the Treasury were delighted to see the last of this monster. I consoled myself with the thought which the noble Lord, Lord Underhill, pointed out, that local electoral considerations would exert sufficient pressures to prevent irresponsible financial policies in respect of London Transport. That was a fundamental error. It is probably too wide a subject to discuss at the moment, but, in my view, local elections have very little to do with local issues. It can be quite fairly said that no one in London had any excuse for being in doubt as to what the policies would be in relation to London Transport if Mr. Livingstone and his colleagues came to power. But, of course, people did not vote in local elections for Mr. Livingstone and his colleagues; they voted the way they did because they did not like the Conservative Government. They did not vote about London Transport. This was the
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fundamental mistake in my view; that the one control we thought would be there—local elections—in reality does not apply for those reasons.
The result was that Londoners found themselves faced with a financial disaster which, even if the policy had not been reversed by the courts, would rapidly have reached a level which could not possibly have been supported by the London ratepayers alone. I believe it was just sheer chance that the courts intervened when they did. If one extrapolates the rate of loss forward, it is inconceivable that ratepayers could have paid it. Many ratepayers under our strange system are not necessarily wealthy people and the hardships were very real indeed—all the more so for those who suffered very large rate increases to pay out of relatively small incomes and who did not use London Transport services for which they were being charged through the rates.
I have no doubt that London Transport will always require very substantial financial support. I know of no rail passenger transport system anywhere in the world which breaks even. There are many reasons for that. That is even more so in the case of a system which depends on and is operated largely for commuter traffic because there is no way in which a complex, expensive organisation of that size can cover itself when it is only operating efficiently for probably five hours out of 24. This is one of the key reasons why no commuter system will ever make money or wash its face. But because a socially necessary service cannot provide a convential commercial return, that does not mean that it should not be run on conventional commercial criteria. Indeed, I believe that the strictness of the commercial criteria is all the more essential when one is dealing with what is essentially a socially necessary but non-profit making service than it is with a business making money but which occasionally loses some, because things can run away with you the moment you see such a service as a bottomless bucket into which you just keep on putting pennies.
This vast, complex industry cannot be run as the part-time interest of local councillors. Indeed, it is a nonsense to regard London Transport (this is the reason why I find myself unable to support the noble Lord, Lord Underhill) as a local issue in the same category as libraries, swimming pools, parks or open spaces. As other noble Lords have said, the London commuter area stretches, for a very large number of people, to a distance of 50 miles from London. It cannot be viewed in the same way as the West Midlands conurbation or Glasgow. It is a national undertaking. Most of those commuters come to work in establishments and undertakings which are of a national or even international nature. They are not working in London shops but in Government offices of the nation, in banks, in financial institutions, and in the head offices of large British and international companies. It is an international city, and a very expensive international city too. Why, in heavens name, should a low-paid manual worker in Wandsworth subsidise the travel expenses of a highly-paid executive living in Woking? There seems to be no sense in that in terms of equity. Why should people who travel five miles to work subsidise people who travel 50 miles to work? Why indeed, particularly when those people who are travelling 50 miles do so because they find it more pleasant to live 50 miles out of London and can afford to live 50

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miles out. In my view, there is no argument in logic for this concept.
I accept that in funding transport one needs to look at the total sum. I accept that there is a cost of congestion. I accept there is a cost of road accidents. I accept that there is the involvement of the tourist industry. But every single one of these things is a national cost and not a local cost in that sense. We tried a very expensive experiment with a major national asset. I conclude it is high time that the financial responsibility for this crucial element in what is the nation's economic life was transferred back to where it belongs, to national government, because it can only be seen as part of the nation's economic life, and because it is neither realistic nor fair to expect the people of London to carry this burden.
6.6 p.m.
Lord Pitt of Hampstead: My Lords, I am glad that I am able to follow the noble Lord, Lord Marsh, and I must thank him for making the case that the Government should be subsidising London Transport to a much greater extent than they are prepared to do. I agree with the noble Lord that London Transport should not have been transferred to the Greater London Council and should have remained under central Government control—or better still, that there should he a London Transport executive or undertaking covering not only London Transport but the London section of British Rail also. I believe that all these proposals are right.
However, that is not the position from which we are starting. The position we have is that the Greater London Council has policy and management obligations to London Transport. I agree with the noble Lord, Lord Mottistone, that the relevant section is Section 1. We have always thought that the relevant section was Section 1 and that this section not only gave the Greater London Council responsibility for policies but also the power to do something about these policies. It is only since the judges have stated that that is not so that we now have to do something.
It is all very well to say that some ratepayers benefit and that some do not; that some ratepayers benefit more than others; that some ratepayers are burdened more than others. The truth is that one cannot consider London Transport merely in terms of the bus and Underground services. One cannot consider it in isolation from the rest of the travel situation in London. London is a city to which people have to travel to work; to which people travel for entertainment; to which people come from abroad. Therefore, the question of how one arranges for people to travel around London is of the utmost importance.
They travel by many means. Some people walk and one must make provision for walking—that is what pavements are all about. Some people travel on bicycles, and if more and more people travel by bicycles, provision will have to be made to accommodate them. Some people travel by motorbike; I regard that form of travel as very dangerous but, nevertheless, people do travel by motorbikes. Some people travel by taxis and some by car, while others travel by bus and the Underground. It is obvious, and it has always been obvious, that the more people one can persuade to use buses and the Underground
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the better it will be for London in terms of travelling. There would be less congestion. There would be less need to build new roads. The logic of constricting London Transport in the way we are now bent on doing is that we cannot build more roads because we have already exhausted all the controls we can apply on cars coming into London, except one, which so far everybody has run away from, and that is supplementary licensing. Unless we are going to impose supplementary licensing for people who drive cars into London we have now exhausted the controls we can apply to those people driving cars into London and therefore we have to build more roads.
Roads are expensive, to central Government and to the ratepayers. Let us not minimise the point. When we are talking about what it costs to subsidise buses or Underground let us also talk about the cost of building more roads so that more people can use their cars. It is in that context that we must look at the whole system of London transport.
Of course, the question of low fares is a controversial one. I am not prepared to go into that debate at the moment. I personally think that it is as important that the services be satisfactory as that the fares be low, probably more important, but both procedures are necessary. You are required both to provide an efficient service and to provide a reasonably cheap service.
In terms of the cheap service, Lord Underhill was right in the way in which he presented the figure. The thing that matters to the person who has to make a choice as to whether he travels by bus or by car is what it costs. And of course Lord Mottistone is right; later on he will find that he was shortsighted in terms of the way in which he estimated his cost. The traveller will start by saying, "It will cost me X to travel by car and it will cost me X plus Y to travel by bus or underground", and he will travel by car. Therefore, in assessing what you charge those travelling by bus or Underground you have to bear in mind the possibility that if the charge is too high they will travel by car, create more congestion, and you find yourself in the position where you have to think in terms of new roads with all that that means. I cannot allow the debate to go in the way it is going, and has gone, where everyone discusses the problem of London transport in isolation, in terms of merely a question of what it costs to run the buses and tubes and what it costs people in terms of fares and ratepayers in terms of rates. There is a lot more to it than that.
It is the Government's job to see that the whole issue is viewed in perspective. So far—let us be honest with each other—the Government have signally failed; they have been so anxious to make political capital out of the fact that the judges give the present Greater London Council a knock on its knuckles. They have failed to appreciate the serious issue, but we are dealing with a serious issue and we must deal with it seriously. We must consider how best we are going to provide the sort of transport within this city which will enable people to go about their work, to go about their entertainment or anything else, so that they can get about in this city with the minimum amount of inconvenience.
As things are at the moment, we barely keep a day ahead of grinding to a halt. At the moment, by what are called traffic control measures—that is, you make a

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one-way street today or prevent a right-hand turn tomorrow—we have managed to keep ahead of grinding to a halt; by controlling the costs of people coming into London through parking restrictions, the cost of parking and so on, we have managed to impose some control. The question of supplementary licensing has been on the table for a long time and everybody has run away from it. It may well have to be faced. In the final analysis the question is how public transport fits into the scheme of things, and it is there the costs come in; what do you demand of those who use it in order to encourage them to use it. That is of the utmost importance.
Now we come to the Bill. I am not going to pretend that the Bill goes far enough, but it does help. It does indicate that the Greater London Council, in planning its transport policy, in discussing what should be done, can consider with the London Transport Executive what grant is necessary for revenue purposes and can make such a grant. That is what this Bill is enabling it to do and that is right. I know that Lord Plummer will say no, as he always said, capital grants, yes, revenue grants, no. It is quite a sensible stand to take. But even before the end of his regime we had moved from not merely making capital grants but also making revenue grants. The fact remains that when we eventually have to decide how to provide this service which is required we cannot just think merely of making capital grants; all of us who have anything to do with it know that revenue grants also are necessary.
If there is the problem of open-ended grant—I do not want to take time to argue that—that is where the control needs to be. My own view is that central and local government should always be in a position where they can together discuss and agree on levels of grants for these purposes. The problem we have had is that central Government merely wanted to run away from their responsibility in making their fair contribution to the running of London.
6.18 p.m.
Baroness Denington: My Lords, I apologise to your Lordships for inflicting on you one more speech beyond the list which is in your hands. I had not thought to be here today, but since I am I feel I must make my contribution to this discussion. It will be perfectly plain from all that has been said—and I was fascinated to listen to the speech of the noble Lord, Lord Marsh, because I was on the council at the time when he was acting in his governmental capacity, and I remember the whole story, as does the noble Lord, Lord Plummer—that we are discussing a very difficult and, to my mind, national matter. I know we are talking about London Transport, but London, as we know, is the capital city, and the health of the capital city is a national matter. I think we are talking about the health of the capital city, and it is from that standpoint, and not from a political standpoint at all, that I want to talk.
The noble Lord, Lord Pitt, has mentioned, as have others, the traffic problem. The congestion problem in London is acute. Those of us who were on the old LCC and then the GLC, have lived with it for a long time. It is a matter of grave importance to the
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capital city that, somehow or other—and we have not found that it is for want of thinking or trying—we must find an answer to the congestion problem.
We have thought of supplementary licensing. How on earth do we enforce supplementary licensing? Can we have a blockade or a filter point on every road that comes into London and then have periodical checks? We could check every day, but even if we had periodical checks we would have a queue five miles long of vehicles waiting to come into London while we did the checking. That would be quite unacceptable. There has been talk of road pricing—it does not work. We have looked at everything. There has been talk of trying to have essential users only coming into London and trying to restrict the parking spaces under the office blocks which were built in the 1950s and 1960s when local government was insisting on having vast parking spaces. Now it does not want them at all because if people have parking spaces they drive in and congest the streets.
I was a member for a time—and it was a quite fascinating experience—of the South East Economic Planning Council. The industrialists who sat on the council pressed on us over and over again the enormous costs for industry of congestion, and particularly congestion in London. The council was pressing the Government—and if it were in existence it would still be pressing the Government—to get the M.25 built; it is still only built in bits and not yet finished. In my view the M.25, desirable as it is, will not do very much to reduce congestion in Central London because it is too far out. It is the third ring of a concept of two inner rings, neither of which are being built. We are going to get only the third ring and so it will not do that much to help Central London.
There is now very great concern about the loss of population from London. There is equal concern about the loss of jobs from London and the loss of industry and offices from London. I was concerned in the 1960s with decentralisation from London. Indeed, I was chairman of the New and Expanding Towns Committee of the GLC. Why did industry go out? It is perfectly true that it went out because when it wanted to build new factories it wanted green field sites which were easier to build on. The land was cheap and it could build a one-storey or at most a two-storey building very much more cheaply than in London. But the other reason why industry was driven out was that it wanted to escape the congestion of Central London, and not just Central London, but London generally, because of the on-costs of congestion. Industry went out because its employees arrived late at work. It said that it lost production time because of the difficulty of public transport. This is all information that came to me from the industrialists who moved. Employees arrived tired and worn out and suffered from ill-health because they were waiting for the bus that never came—and the bus never came not because London Transport did not want to run a decent service but because of the congestion. Again we come back to congestion.
Why did the people go out so willingly? Sometimes we hear that they were driven out. That is not true at all. Everybody who went, chose to go, and they went again because they were sick of conditions in London—sick of waiting for buses. They were only

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too glad to go. They also went out for a house and a garden because they did not want the flats that were being built in London.
So we come back to the fact that we have to get rid of London congestion. If London is to flourish and if we are not to see the essential Central London institutions—the banking institutions, the financial institutions and the international institutions—moving out, something has to be done about congestion and also about London fares, because 80 per cent. of the workers in Central London in these important international and banking institutions travel by public transport. While fares are going up and up, I think that we shall find that people will not bring in their cars, because they cannot bring in their cars, the streets cannot be widened. I need not go over that argument because your Lordships know that the streets cannot be widened. So I think that, in the end, unless we do something, the institutions will move out. To me this is a national matter. It concerns London deeply and it concerns London government deeply, whatever its political persuasion.
However, I beg the Government not to regard this for one single moment as a political matter. It started as a political matter with Bromley. Bromley has always hated the GLC, whether it is Tory or Labour. Bromley never wanted to be integrated in the local government reorganisation. That is where this matter started. But for goodness sake! I hope that everyone who is concerned with this vital problem will rise above politics and see that something must be done. Whether it be the Bill before the House today, or whether the Government come up with something else, I wish that the noble Lord, Lord Beltwin, if he does not like what is in front of him now, would get up and say, "We shall take it away but will come back with something". If only the noble Lord, Lord Bellwin, would say that, it would be a step along the road to a solution. What the solution is, I do not know. It needs someone very, very wise to find it.
6.27 p.m.
Lord Plummer of St. Marylebone: My Lords, I should like to rise and support the words of my noble friend Lord Mottistone. Indeed, I support, wholeheartedly what the noble Lord, Lord Marsh, has said. At the time of our negotiations, which I must say I enjoyed very much, I was urged to accept a 75 per cent. write-off of London Transport's debt. But I pursued the matter with some opposition from the noble Lord, Lord Marsh, to the point where we got 100 per cent. I do not think that that was, in fact, a very clever thing to do, because it brings me to the point that local government, and indeed, the very efficient local government officers, are not really trained by reason of their profession to deal with a commercial undertaking. On the night when the noble Lord, Lord Marsh, and I finally agreed terms, I remember saying that I thought we ought to have a very much greater write-off than the 100 per cent. which in fact we got, and that was because it was not being looked at as a commercial undertaking, but was merely being looked at with the eyes of local government.
The trouble is that London Transport is looked upon as a rather nice new toy which the councillors can play with because it is rather like playing with trains.
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It is a much more serious matter than that. Indeed, I agree with the noble Baroness, Lady Denington, that it is a national matter and it is a very difficult national problem which affects the whole of the health of this great city conurbation.
I am very concerned, as I know the noble Baroness was at the time, with the problem of the low paid worker in London. The noble Baroness, Lady Denington, mentioned the new and expanding towns policy and how industry was asked to move out to the new towns. But I must challenge her on one point, which is, of course, that they went not only because they wanted a greenfield site, but because they were paid out for the site on which they were already in London and they took it with both hands. Very often those sites were turned into housing estates. Consequently there are a large number of low-paid workers who still have to move across London to get to their jobs, and they cannot be expected to do so if we have a very high fares policy.
How shall we deal with this? I firmly stick to my point of view that once you are on revenue subsidies, you are on a slippery slope and you cannot climb back up that slope. If you can stick to capital subsidy—and I agree that it is very difficult to do so—you have a measure of control over what you are expending. If you once get on to revenue subsidy you no longer have any control over the money that you are handling. I must say that the policies at County Hall at the moment cannot reassure us that they know what they are doing.
There are three parties involved in the subsidy to London Transport. There is the rarepayer; there is the taxpayer; and there is the rarepayer. All of them contribute very large sums indeed to the undertaking. All of this is bound up with another very large transport undertaking which works in the capital, and that is British Rail, where the subsidy very largely is provided by the Government. It seems to me that if you are to have a centralised transport policy in London, in view of the way in which the whole undertaking has been handled in the past year, I agree with the noble Lord, Lord Marsh, that it would be better to put it back into Government hands.
Lord Tordoff: My Lords, I hestiate to interject, but this seems a little difficult coming from a Government supporter. What will he do if the Government will not take it into their hands? Will London be simply left to rot?
Lord Plummer of St. Marylebone: My Lords, I think that recent events may well persuade the Government that in the control of subsidies they may well be advised to take it back into their hands in order to see that the money is well spent. I should mention that in the days when Mrs. Castle was persuading the GLC to take over London Transport she offered an alternative which was a passenger transport authority. That, would have had the power to precept on the ratepayer, but the ratepayer would have had no recourse as to the amount that the PTA asked. We thought that this would merely create what I would call another ILEA in London, and would be the worst of all worlds. Therefore, very reluctantly indeed, with the pistol at our heads, we proceeded with the negotiations to take it over.

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What it really amounts to is that there must be a reasonable balance between what the taxpayer pays and what the farepayer pays. Recently that has become so distorted that many firms are now leaving London and going off to places like Swindon, Bristol, Bournemouth, Milton Keynes and Peterborough as fast as they can. Indeed, it is quite clear that a low fare and high rates subsidy is causing a vast amount of unemployment in London, which is the reverse of what was expected. I hope that this whole matter will be reconsidered on a high level, and I fear that this amendment Bill which is before us today will not be of great help.
6.36 p.m.
Lord Ponsonby of Shulbrede: My Lords, I rise to speak in this debate following two former chairmen and one leader of the GLC, so I fear that perhaps in some ways the debate is becoming slightly incestuous. In introducing this Bill my noble friend Lord Underhill has highlighted the problems of London Transport. His Bill, of course, enables us to restore to the GLC the powers which we all thought it had prior to the Law Lords' judgment.
I myself have been concerned with the problems of transport in London for a number of years, particularly during a period when I was chairman of the Central Area Board of the GLC, at a time when the noble Baroness, Lady Denington, was chairman of the Transport Committee of that council. As she rightly pointed out to us—it has always been a concern of the GLC—the vitality of central London is a matter of great importance to the nation as a whole because on this depends the success of London as a business centre and depends the convenience of its inhabitants moving about London, and for all these things to happen it is essential that traffic flows freely in the central areas.
As we have been reminded in this short debate by various speakers, the changes in policy towards London Transport have varied and changed over the years. Of course, this has very much coincided with the increasing problems brought about by the ever increasing number of people in and outside London who own cars. As the noble Baroness pointed out, it is curious to think that up until the early 1960s people were positively encouraged to bring their cars into central London by the fact that at that time those building new offices were encouraged—indeed, compelled—to provide a proportion of car parking spaces for their employees underneath the office blocks which they were building. As we know all too well, after a period of time this policy was seen to have been folly. The effect of it, of course, was that in the early 1960s congestion was slowing down the average speed for each bus journey, and as it slowed down fares had to increase further in order to help London Transport meet its bills.
We then moved into the period when parking restrictions were introduced, but the downward spiral of bus usage continued, and fares and congestion continued to grow. Then in the late 1960s more measures were introduced, with some success, in order to get the buses moving again, and priorities were established in the form of bus lanes further to
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increase the speed with which they managed to move around the capital.
These measures met with some success and were, for a time, helped by the hike in petrol prices which occurred at the time of the Six-Day War. Inevitably, the successes from these particular measures were limited and other ways of solving the capital's traffic problems had to be examined. In particular, it was seen that groups of users should be persuaded to change their mode of conveyance into central London, and the obvious candidate for such a change was the commuter who basically is somebody who brings his car into Central London, parks it, and does not use it again until he returns home in the evening.
Having tried the various measures which I have described and various noble Lords have spoken to, the Greater London Council eventually saw that there were two extreme solutions to these particular problems. The problem of solving it with a carrot or solving it with a stick. The carrot, the positive encouragement for people to use public transport; the stick, to stop commuters bringing their cars into Central London.
Both my noble friends Lady Denington and Lord Pitt have mentioned the question of the supplementary licence fee and the cordon proposal which would stop people from coming into Central London without going through a checkpoint, and would cause great congestion on the perimeter of that area. This has recently been highlighted in the press. This solution would not be one which would be acceptable to Londoners as a whole. This particular solution, which was highlighted in the press recently, was rejected by the Transport Committee chaired by my noble friend Lady Denington some seven or eight years ago.
It can be seen that the only solution to London's traffic problems is a carrot solution, a positive solution to encourage people to use public transport in Central London. As the noble Lord, Lord Underhill, pointed out in moving the Second Reading of his Bill, the cheap fares policy in a sense added proof to the ideas behind this particular solution by the fact that immediately it was introduced there was a 10 per cent. increase in the usage of public transport in Central London. As the noble Lord, Lord Underhill, pointed out and was underlined by the noble Lord, Lord Tordoff, since the increases have come in, that increase which had been experienced has been followed by a decrease of approximately 17 per cent. in usage.
Unfortunately, this experiment lasted for a very short time. However, it had the unique effect of providing that a solution along these lines could help solve some of London's serious congestion problems. Also, we have been able—and this has been highlighted in the press a number of times recently—to make a comparison of cheap fare systems and the amount of subsidy paid to other metropolitan systems throughout the world. Indeed, these surveys have shown that the level of subsidy being paid in the transport system under the "fare's fair" policy was no more or no less than the average subsidy being paid to other metropolitan city transport systems. As the noble Lord, Lord Marsh, reminded us no commuter system in the world pays its way.

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There may well be arguments about how fares should be subsidised. The noble Lord, Lord Mottistone, in his contribution queried the fact that certain groups received the advantage of cheap fares. He came to the support particularly of the commercial ratepayer. One always ought to realise when one is making the sort of comment that the noble Lord, Lord Mottistone, made that what one is actually talking about is a transfer. He compared his own personal situation of how he was paying more on rates and he got it back through cheaper fares. If one is thinking about commercial employers, or perhaps the shopkeeper is the best example, the shopkeeper would have to charge more for the goods he sells, albeit fractionally but the person who buys from him will have received the advantage of the cheaper fare to reach the particular shop concerned. Likewise, one can say with regard to offices and commerce as a whole that the employees of particular firms will have received the advantage of the cheap fares, and no doubt that could be reflected in the rate of wages paid at the end of the day. These are fractional, but if one thinks of it in total, this is exactly what has happened.
Lord Mottistone: My Lords, might I intervene before the noble Lord moves on? It is fractional so far as the individual goods being sold are concerned; maybe it is fractional if you can persuade people to take less wages if your company is not doing well—that is rare; but it is not fractional when you are paying the rates as a commercial ratepayer.
Lord Ponsonby of Shulbrede: My Lords, it is fractional if it is broken down. I should like to take the noble Lords, Lord Mottistone and Lord Tordoff, off on another point. I am afraid this is a hobbyhorse of mine. They both raised the red herring about the tourists not paying sufficient tax, and raised the question of a tourist tax. One always feels compelled to remind people who raise this point that the tourist, through the VAT which he pays on his hotel bill and the VAT which he may pay in other ways, produces many millions of pounds of tax revenue each year for the Government. That should not be forgotten.
Returning to London Transport, what we have so far as London Transport is concerned, basically, is that more of their total income is coming from subsidy and less from fares. As we have seen, for a metropolis this appears to be a more effective way of apportioning the total amount of money needed in order to run an effective transport system in a metropolitan area.
How a subsidy to London Transport should be paid has been raised by a number of noble Lords. Lord Underhill's Bill provides a stop-gap solution to this problem. It returns the GLC to the position in which it was before the Law Lords' ruling. But, as several noble Lords have hinted, this may not necessarily be the right and ultimate solution to London's traffic problems. The noble Lord, Lord Marsh, has said that the level of subsidies should not be paid by the ratepayers alone. He in fact advocated, and he was supported by the noble Lord, Lord Plummer, that London Transport should be handed back to national government. I think indeed that my noble friend Lord Pitt of Hampstead agreed with this solution.
Lord Pitt of Hampstead: My Lords, I indicated that I would not quarrel with that solution.
Lord Ponsonby of Shulbrede: However, my Lords, the noble Lord, Lord Pitt of Hampstead, went on to say that it was of the utmost importance how people travelled around London, and underlined the importance how people travelled around London, and underlined the importance which I do not think was underlined by many other speakers, of having an efficient and effective system; of having a high quality of service. The question of a high quality of service can go hand in hand with the other points we have mentioned.
The noble Lord, Lord Plummer, raised the difficult question of how to ensure that money is well spent by London Transport Executive once they receive it. He reminded your Lordships that when the agreement relating to the 1969 Act came about, he rejected the possibility of a passenger transport authority, and I am sure he was right to reject that solution to the problem. The situation today, with an elected authority determining the policies of London Transport—an authority which spelt out, as my noble friend Lord Underhill pointed out, in its election address what it intended to do—gives an area of accountability.
However, I agree in some ways with my noble friend Lady Denington that the solution to the problem is not easy. I hope we shall not regard this as a political problem; it affects all Londoners and the vitality of London as a whole, and that should be of the greatest concern to us all. Lady Denington called it a national problem. I hope your Lordships will view it in that way. As I said, while the Bill is not the final solution to the problem, it is a solution which is available to us now, and I hope your Lordships will give it a Second Reading.
6.52 p.m.
Lord Bellwin: My Lords, I begin by saying that I, too, am not without some sympathy for what the noble Lord, Lord Underhill, said in moving the Second Reading of this Bill. Nevertheless, I must ask your Lordships to oppose it because I have to say that it is simply not the right way to tackle the problems of public transport in London.
Nobody could deny there are problems—very serious ones. Fares on London Transport have just doubled. I regret that as much as anyone. As has been said, transport is one of the major factors that people take into account when they decide where to live or work. They cannot change them overnight. They expect some stability. Of course, the cost of transport is liable to change, like anything else—because of world oil prices and many other factors; but people are entitled to expect that fares should not jump up and down because of the way transport is run and decisions are taken. The GLC has been responsible for running London Transport for 12 years. It is surely not without significance that for 11 of these 12 years, under both parties in County Hall, people knew where they stood; but suddenly, in the last year, all that has changed.
It is easy to say it is all due to the Law Lords and that all we need do is reverse their decision and all will be well. The GLC are trying to show that fares have doubled because they are no longer allowed to give

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London Transport a reasonable amount of subsidy. They have put out figures which take account of only part of the subsidy which London Transport gets. In fact, London Transport is still getting a massive amount of subsidy from taxpayers and ratepayers this year. Even leaving aside the £125 million needed to make good last year's deficit—and the noble Lord, Lord Ponsonby, said the experiment lasted only a short time; they managed to run up a £125 million deficit—they will be getting around £250 million now, nearly one-third of their total costs. Apart from last year, that proportion has remained fairly constant over the last five years. The noble Lord, Lord Pitt, said the Government should not run away from their obligations. There are those who say they should have run much faster.
Lord Pitt of Hampstead: My Lords, may I ask the Minister to compare the contribution the Government make to London Transport with the contribution they make to British Rail?
Lord Bellwin: I should have thought we were not talking about the same thing by any manner of means—
Lord Pitt of Hampstead: Why not?
Lord Bellwin—and if the noble Lord is suggesting that there should be some dramatic reduction in the subsidy to British Rail, then that is a point of view.
Lord Pitt of Hampstead: No, my Lords; raise the contribution to London Transport.
Lord Bellwin: My Lords, why have fares doubled? To put what has happened in perspective, we need to relate the new fares to what they were before they were cut last October. In fact, they are now about one-third higher in cash terms than they were six months ago. The last increase before that was in September 1980. If the previous policy had continued, there would have had to be some increase since then to take account of increased costs. The new fare levels are in fact about 15 per cent. above what would have been needed to keep up with inflation over the last 18 months.
Many people would say that fares were already too high. London Transport has been in a spiral of increased costs, leading to increased fares, leading to a loss of passengers, lower revenue and more fares increases. There are underlying problems which cannot be solved simply by increasing subsidies if the available resources are not used effectively. I quote from a Government White Paper on Transport Policy:
"subsidies transfer the cost of a service from the traveller to the taxpayer or the ratepayer. And the traveller is often a taxpayer or ratepayer himself. To use subsidies to disguise from people the cost of the services they are paying for is pointless".
That White Paper was published in June 1977 by the then Labour Government, and I agree with what it said.
The real problems which need to be tackled are how to tailor services to meet the changing demand for public transport, how to make it more responsive to the needs of passengers and how to make it more efficient. Over the last 10 years, the number of pas-
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sengers has fallen by about 20 per cent., yet London Transport still employs the same number of staff. The number of vehicle miles per employee has fallen over the past 10 years, whereas the National Bus Company and municipal bus operators have increased the number of vehicle miles per employee by about 15 per cent.
The passenger transport executives in the other conurbations have not done quite so well, but their costs are still much lower than London Transport's—by nearly £100 million a year for the number of bus miles run by London Transport. That is equivalent to half the extra revenue they will obtain from the recent fares increase. Of course I accept that London is different and that traffic congestion is much worse, and although the noble Lord, Lord Pitt, does not think so, the fact remains that fares would not be at their present level if costs had not gone up so much. One cannot simply ignore the whole point about what it costs. The policy of the present GLC administration would have made matters still worse, by running more bus miles and taking on more staff. Their policy would have cost an extra—I repeat, "extra"—£250 million this year. But there was no attempt to see how the money could be used to improve efficiency. For example, London Transport has said that to install automatic fare collection machinery would save substantial numbers of staff, but that was not part of the policy. London Transport have for many years tried without success to introduce one-man operation of tube trains.
My noble friend Lord Mottistone, the noble Lord, Lord Tordoff, and others—though not the noble Lord, Lord Underhill—pointed out what I must repeat tonight; namely, that the problems of London Transport are like so much of our industry: change has been resisted for too long. I do not underrate the human problems involved; and it is not only the fault of the people who work for London Transport. These problems cannot be solved overnight. But it is totally misleading to pretend that they are all due to the wording of an Act of Parliament and that all we have to do is change the words and all will be well again.
I understand the desire of the noble Lord, Lord Underhill, to see the legitimacy of subsidy payments placed beyond doubt. I have said that the existing law allows a reasonable amount of subsidy, and the noble Lord asks, "How much is reasonable?" But that is not a problem. It has never been a problem in the past with reasonable people. The GLC is pretending that the Lords' judgment requires London Transport to break even next year. It pretends that the only choice is between its policy of doubling the amount of subsidy at the expense of the ratepayers on the one hand and no subsidy at all on the other. No other previous GLC administration took that view. No other previous GLC administration ever had to be challenged on this point. The House of Lords' judgment has not changed the law. It has not said that the subsidies given by previous administrations were unlawful. I repeat, because it must be fully understood, that the real responsibility for the present situation lies fairly, squarely, and solely with the present GLC administration.
I am not going to rise to any bait about becoming involved in the politics of the matter. The noble Lord, Lord Tordoff, and I think the noble Lord, Lord

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Pitt of Hampstead, and certainly the noble Baroness, Lady Denington, stressed that we should not allow politics to become part of the issue. Would that that were so. Would indeed that politics did not come into it at all; and certainly I am not going to make an issue of that tonight. But the fact is that there are those who would say that the behaviour of the present GLC administration over its fares increase has been the behaviour of people who are not concerned to take the problems as seriously as we are taking them tonight, but are simply using them—and indeed they have said so—to mount political campaigns. But I shall say no more about that now, much though I am tempted to do so.
I am sure that the majority of people must feel that these politicians should stop campaigning and drop their slogans; let us get together to find a solution to the problems. My right honourable friend the Secretary of State has had recent meetings with Mr. Livingstone, Sir Peter Masefield, the chairman of London Transport, and the unions representing London Transport workers. He has asked the GLC to consider whether the £250 million which London Transport is now receiving in subsidies is being spent wisely and whether Londoners are getting proper value from it. He has asked them to examine carefully how Londoners can get better bus and tube services with the resources likely to be available.
Officials of the Department of Transport and the GLC are undertaking a joint exercise to work out options for London Transport's budget for 1983 and to see what levels of service could be provided and how much subsidy would be required. It will then be possible to consider whether the degree of subsidy required would be legitimate and, if not, what changes in the law would be required. Here I come to the point made by both the noble Lord, Lord Tordoff, and the noble Baroness, Lady Denington. I always like to say something to please her if I can; sometimes I do, though more often I do not, I fear. However, I am sure she will be pleased to hear me say that the Government are not ruling out the possibility of further legislation.
But I must make it crystal clear that there can be no question of giving the GLC a free hand to behave irresponsibly and to place massive extra burdens on London. Whether the Bill of the noble Lord, Lord Underhill, would actually allow that, I am not quite sure. On a number of occasions he has asked me to say how much subsidy is reasonable. I have tried to cover that point. With respect, I suggest that his Bill does not give us the answer. We do not know how the courts would interpret it, and it would be wrong of me to take drafting points on a Bill of this kind. That is not the reason why I am opposing the Bill, but it illustrates the difficulties. If legislation should be needed to clarify the law, it would have to be drafted with very great care.
I conclude by referring to what is the real question. As was rightly said by my noble friend Lord Plummer of St. Marylebone and by the noble Lord, Lord Marsh (in a splendid speech), it is the level, the scale, the degree and the extent of subsidy that we are talking about. That is the issue. The noble Lord struck what was for me a very personal note when he referred to what happens in local elections. Do I not know how right
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he was about what happens in local elections, having been on the receiving end, and looking around the Chamber I see other noble Lords who are nodding agreement with me on that point. We have all done what we thought was a jolly good job, only to be turned out by the electorate, perhaps because our own party was in power at Westminster, and our efforts were all to no avail.
What we now need is a new approach whereby the GLC considers what services are required and what fares would make the best sense, and then decides how costs are to be met, taking full account of all reasonable economies. That cannot be achieved simply by changing the words in the legislation. In fact, there is a real risk that legislation at this stage, however well intended, would actually divert attention away from what really needs to be done while the lawyers try to work out what it means. Therefore, I hope that the noble Lord, Lord Underhill, will understand why we do not want to see the Bill go further.
7.6 p.m.
Lord Underhill: My Lords, I am sure that at this hour, after a very interesting debate, your Lordships will not expect me to speak at any length, but I should like to thank all of your Lordships who have taken part. I noticed that among those taking part were three former chairmen and a former leader of the GLC, and I should like to thank them for their contributions. I also wish to thank the noble Lord, Lord Tordoff, for his supporting words.
The noble Lord, Lord Mottistone, thought that Clause I was the important provision. That makes it clear that there should be an integrated and efficient service. The GLC, taking into account the legal opinion it has received, makes it quite clear that such a service cannot be provided unless there is a subsidy for the revenue account. Of course, it could be done quite simply if the GLC wanted to slash services and have less public transport; that could be done quite easily.
I appreciate what the noble Lord said about the commercial ratepayers. In replying to a debate it would be wrong to introduce new material, but there is considerable evidence of statements by employers in Central London that they are becoming increasingly perturbed over the difficulties facing their staff travelling into Central London, due to traffic congestion and the high cost of travel. That is what employers have stated.
I appreciate the generous remarks made by the noble Lord, Lord Marsh, about how I had referred to his statements, to which, 1 am very pleased to note, he still adheres. I am sorry that he said that he cannot support the Bill.
The important question that we must consider tonight is, what are we going to do now?—not, what are we going to do in two, three, or four years' time? We have the problem now, and until we do something the transport situation in London will remain very difficult.
The noble Lord, Lord Bellwin, extended sympathy to me, but then called upon noble Lords to oppose the

71
Bill. If we took at face value everything that he said, we would question subsidy for British Rail and subsidy for the National Bus Company—which, perhaps I ought to remind your Lordships, is still publicly-owned; the noble Lord praised its work—and we would do away with the transport suplementary grant, which enables county councils throughout England and Wales to make grants towards public transport, and for other purposes. Of course, everyone recognises that without those subsidies there could be no transport system in this country. I was very pleased that the noble Lord, Lord Marsh, emphasised the position of public transport throughout the world.
There have been appeals not to make this a party political issue. It seems that other countries do not do that, even though they have public transport, and have subsidies far higher than ours. The subsidies to the railway system and the capital public transport system in this country are the lowest in the world. They do not seem to make party political issues out of it, and I hope we shall not make a party political issue out of this tonight.
The noble Lord said that the Government do not rule out further legislation but he will not give any free hand for the present GLC to behave irresponsibly. I emphasised in my speech that the Law Lords' ruling, which confirmed the 1955 Act on the question of fiduciary responsibility, still obtains. Therefore, even with my Bill the GLC would still have to behave responsibly.
But what is overlooked in the comments of the noble Lord, Lord Bellwin, is that the legal opinions to which referred—these are not the GLC opinions, not the London Transport opinions; these are opinions from learned counsel—say that the law must be changed, that something must be done quickly, because otherwise the existing interpretation of the law is going to make it absolutely impossible for the GLC and London Transport, as they make their plans during the next two or three months, to budget for next year. Unless the constraints on them are removed, then the budgeting will undoubtedly mean further cuts in services; and, as other noble Lords have said, cuts in services mean further congestion. Therefore, we are not considering only the benefit of the people who use public transport, we are considering employers, and we are considering everyone who benefits by the removal of traffic congestion from the streets of London.
Much as I should like to be able to ask leave to withdraw this Bill I cannot unless, frankly, the noble Lord can get up and tell me that very quickly the Government will resolve the position and clarify, the law, because all responsible opinion says that the law must be clarified and must be changed. If the noble Lord will say that the Government will do that, then I will not press this to a Division, but unless that can be done then I must ask the House to give this Bill a Second Reading.
7.12 p.m.
On Question, Whether the Bill shall be read a second time?
Their Lordships divided: Contents, 46; Not Contents, 71.

DIVISION NO. 1

CONTENTS

Amherst, E.

Llewelyn-Davies of Hastoe, B.

Ardwick, L.

McGregor of Durris, L.

Avebury, L.

Noel-Baker, L.

Aylestone, L.

Oram, L.

Bacon, B.

Peart, L.

Banks, L.

Phillips, B.

Beaumont of Whitley, L.

Pitt of Hampstead, L.

Bishopston, L.

Ponsonby of Shulbrede, L.

Collison, L.

Rhodes, L.

David, B.

Ross of Marnock, L.

Davies of Leek, L.

Seear, B.

Denington, B.

Stewart of Alvechurch, B.

Glenamara, L.

Stewart of Fulham, L.

Gosford, E.

Stone, L.

Gregson, L.

Taylor of Mansfield, L.

Hampton, L.

Tordoff, L.

Harris of Greenwich, L.

Underhill, L. [Teller]

Howie of Troon, L.

Wells-Pestell, L.

Jacques, L. [Teller]

Whaddon, L.

Jeger, B.

Wilson of Radcliffe, L.

Jenkins of Putney, L.

Winstanley, L.

John-Mackie, L.

Winterbottom, L.

Kennet, L.

Wynne-Jones, L.

NOT-CONTENTS

Airey of Abingdon, B.

Home of the Hirsel, L.

Alexander of Tunis, E.

Hylton-Foster, B.

Auckland, L.

Inglewood, L.

Avon, E.

Kinloss, Ly.

Balerno, L.

Lane-Fox, B.

Bellwin, L.

Lauderdale, E.

Beloff, L.

Long, V.

Belstead, L.

Lyell, L.

Bessborough, E.

Mackay of Clashfern, L.

Broadbridge, L.

Macleod of Borve, B.

Buxton of Alsa, L.

Marley, L.

Campbell of Alloway, L.

Marsh, L. [Teller]

Cathcart, E.

Mottistone, L. [Teller]

Chelwood, L.

Mountevans, L.

Cockfield, L.

Murton of Lindisfarne, L.

Colville of Culross, V.

Newall, L.

Colwyn, L.

Onslow, E.

Cork and Orrery, E.

Orkney, E.

Craigavon, V.

Orr-Ewing, L.

Crathorne, L.

Plummer of St. Marylebone, L.

Crawford and Balcarres, E.

Cullen of Ashbourne, L.

Rankeillour, L.

Drumalbyn, L.

Redesdale, L.

Ellenborough, L.

Renton, L.

Elliot of Harwood, B.

Romney, E.

Elton, L.

St. Just, L.

Ferrers, E.

Sandys, L.

Fortescue, E.

Selkirk, E.

Gardner of Parkes, B.

Sharpies, B.

Glanusk, L.

Skelmersdale, L.

Glasgow, E.

Spens, L.

Glenkinglas, L.

Stodart of Leaston, L.

Gowrie, E.

Swinton, E.

Grafton, D.

Trenchard, V.

Hailsham of St. Marylebone, L.

Windlesham, L.

Wise, L.

Harmar-Nicholls, L.

Resolved in the negative, and Motion for Second Reading disagreed to accordingly.
Bill, by leave, withdrawn.

British Nationality (Amendment) Regulations 1982
7.21 p.m.
Lord Avebury Lord Avebury rose to move, That this House calls on Her Majesty's Government to revoke the British

73
Nationality (Amendment) Regulations 1982 (S.I. 1982, No. 283).
The noble Lord said: My Lords, it will be within your Lordships' recollection that the problem of fees for registration and naturalisation came up a number of times during the proceedings on the British Nationality Bill, both in your Lordships' House and in another place. For instance, we discussed the matter on 21st July, when it was pointed out that over the years there had been a progressive increase in the number of civil servants dealing with nationality applications while at the same time their productivity had steadily declined. Since it was the Government's policy to recover the whole of the costs of the department dealing with the processing of applications for nationality in the form of fees, it was predicted that within a few years the fee would not be £150, as it then was, but something more like £300 or £400. At that point, the noble Lord the Minister contrived to avoid any mention of fees in the two speeches that he made on the amendment which was concerned with the extension of the relatively less expensive process of registration.
When the matter came up again the next time, on July 24th, the noble Lord, Lord Belstead, reaffirmed the Government's policy of recovering as much as possible of the administrative costs of nationality applications through fees. Then, on October 13th, we discussed two amendments, one in my name and one in that of the noble Lord, Lord Pitt, which, in the latter case, would have given the Government power to exempt particular classes of applicant and which, in the case of the amendment I moved, would have obliged them to waive the fees in respect of applicants in receipt of supplementary benefit or family income supplement. To this, the noble Lord, Lord Belstead, replied—and I should like your Lordships to mark the words—that the Government:
"would not wish to deter applicants by setting fees at an impossible level".
He pointed out that only about 30 per cent. of the cost was being recovered, that it was a small percentage, and that further increases were inevitable. We could not exempt certain classes of applicants because demands would then arise from others who might seem to be equally deserving of consideration and because the only way to make up the shortfall in income would be through increased charges on all the other applicants.
In the end, the noble Lord the Minister was honest enough to admit that he knew he had not been helpful. He must have had some idea of what was coming. The fees have indeed been set at what I consider to be an impossible level for many who aspire to British citizenship, and the latest increases which are provided for in the regulations that we are discussing represent an enormous jump, far higher than the rate of inflation.
Before coming on to the amount, I want to mention the two particular obstacles placed in the way of applicants and their advisers which have come to my notice. The first was in a letter from Mrs. Ruth Runciman, chairman of the East London Area Citizens Advice Bureaux, in The Times the other day. Mrs. Runciman said that advice agencies in East London, and, presumably, everywhere else, have been unable to get supplies of the application forms, that they have not been successful in making telephone calls to the Home Office to ask for more supplies and, when
74
special journeys to Croydon were made by members of her staff, they found that the nationality and immigration department itself had no supplies of the forms. If I was of a suspicious cast of mind, I might even say that the Home Office had been deliberately starving applicants and their advisers of these forms knowing that, as a result, they would have to pay the increased fees now under discussion.
The second point I want to make relates to the telephone inquiry service. A solicitor, one of the partners in the firm of Bindman and Partners, tried to telephone the inquiry bureau. First, the telephone rang for 20 minutes before a person answered and immediately hung up; she then dialled again (that was at 9.30 a.m.) and the telephone rang continuously from 9.30 until 10.32 a.m. before somebody picked it up. When she wrote to complain to Lunar House, the reply she received was that there were only four incoming exchange lines in the inquiry bureau compared with 25 on the immigration side and that that was thought to be sufficient when the equipment was installed because, the writer said, nationality was a much more complex matter than immigration and only the simplest of inquiries were thought to be able to be satisfactorily dealt with over the telephone.
That may be so, but I should have thought that anybody could predict that as a result of the British Nationality Act there would be an increase in the volume of inquiries, and that steps would be taken to deal with them and, in spite of the strict economies in the number and cost of civil servants mentioned by the writer of this letter, there would have been methods of dealing with it which did not involve any additional expenditure. Perhaps the noble Lord could tell us why, for instance, all the calls for both immigration and nationality departments could not have been routed through one exchange so that 29 lines would have been available for both purposes and any variations in the workload of one department rather than another could have been taken up in that manner.
Returning to the fees themselves, if one looks back over the last six years we see that citizenship has become the prerogative of the rich. The fee for naturalisation has risen from £70 in 1976 to £200 in 1982, an increase of 285 per cent. Registration at discretion—that is, of a Commonwealth citizen NA ho has been here since 1973—has gone up from £35 to £200, an increase of 570 per cent; while other registrations, including that of a woman married to a citizen of the United Kingdom and Colonies, have gone up from £25 to £70, an increase of 280 per cent. Minor children were registered for nothing in 1976; and it now costs £35. One can say that citizenship is, like the doors at the Ritz, open to all.
First, my Lords, I want to question the principle that the fees should bear some fixed relationship to the cost of the service. That is not the case in other countries. In the USA, the fee for naturalisation is five dollars; in Canada it is 25 dollars. Those were 1981 figures. Even in Britain many services are provided at public expense either freely or at a tiny fraction of the actual cost. One pays nothing, for instance to borrow a book from the local library or to visit the great museums; one pays nothing for using the public parks; one pays nothing for cycling on the roads and the dog owners pay only a tiny fraction of the licence costs, quite unrelated

75
to the administration costs of processing the application. Yet citizenship is surely far more important to any person than the privileges which I have just mentioned and which all of us enjoy.
Secondly, consider where the Government's policy is going to lead. Sir Derek Rayner said in his review of the nationality division of the Home Office that only about 40 per cent. of the costs were being recovered. So over a period of two or three years the fees would have to go up by a factor of two and a half if the total cost of the service is going to be recouped from the fees. That is £375 at 1981 prices for naturalisation, probably somewhere in the region of £450 if one takes into account the effects of inflation. This first instalment, one might say, is fairly modest in relation to an increase of that size. One may suspect that the Home Office is trying it out to see how much of a fuss there is. Therefore we ought to protest on this occasion as vehemently as we can so as to prevent an even worse outrage in 12 months' time.
Thirdly, one has to point out that if the Government really wanted to make savings, then Sir Derek Rayner did show several ways that it could have been done. The criteria for citizenship could have been relaxed so as to obviate the need for detailed inquiries or, in the case of longer periods of qualifying residence, the need to fulfil other requirements might have been eliminated. If someone had been here for 15 years, for instance, Sir Derek suggested that the good character requirement could have been waived. However, strict you make the test, some people are going to become citizens who are not wholly admirable. Your Lordships can think of people of that kind who have become Members of both Houses of Parliament. On the other hand, how many civil servants is it sensible to employ in what is essentially totally unproductive work for the sake of excluding a few bad characters from our citizenship? I agree with the Government when they try to reduce the number of pen-pushers in the Civil Service. The trouble is that certain areas of work seem to be sacrosanct, and nationality and immigration are examples.
Before leaving the question of efficiency, I want to ask the Government what happened as a result of Sir Derek Rayner's recommendation that a feasibility study should be undertaken of the use of computers for the storage and retrieval of the records of naturalisations, registrations and renunciations both in the United Kingdom and overseas. This would really be quite a simple application, and I should like to see the Home Office going for a system that would also record currently-being-processed applications. The system should be interactive, with the ability to respond to questions on-line, and for the information to be updated in real time.
The terminals on the system should be intelligent themselves so that they can be used for word processing, a particularly necessary facility considering that nearly 300 stock letters are apparently in use, according to Sir Derek's report. He said that there had been no continuing review of those stock letters. If the division had a computer system with text processing on intelligent terminals, the review of standard stock letters could be a continuous process. I ought to declare an interest as a manufacturer of computers. I have not seen copies of all the form letters used, but I wonder
76
whether somebody has not been trying to create extra work. There is a letter to the employer of an applicant, for instance, asking what the nature of his work is, how much he is paid, and whether or not his work is satisfactory. It would be interesting to know how how any of this could be relevant. I should be grateful if the noble Lord the Minister would enlighten us.
If the employer says he is paid £2,000 or £20,000, what difference does it make? If he is a labourer or a managing director, again, does it affect the success or failure of his application? If he is conscientious or lazy, in the opinion of the employer, what difference does that make? I should be very grateful if the noble Lord could confirm that the answers to these questions are actually used in the process of making decisions on a person's application for nationality and in what manner they affect the final decision.
But the major increase in the work of vetting applications over the last few years, as your Lordships know, stems from the decisions of the courts in 1977, that residence in the context of nationality law means lawful residence, and consequently it became necessary to check that an applicant was not only given indefinite leave to remain, but also that he did not secure that permission either by making false representations to an entry certificate officer of an immigration officer but following the case of Zamir, that he did not withhold information from the officer which might have affected his decision had he known it. This investigation has to be carried out in relation to an event of many years ago, so obviously it is fraught with great difficulty. Apparently, it is not enough for the applicant to make a declaration that he did not withhold any relevant information.
The mind boggles when one tries to think how the officer could discover that some essential fact had been concealed 12 or 20 years ago, when the applicant first entered the country. The nationality Act could have provided that inquiries of this kind were not to be made in respect of applicants with say, more than 10 years' residence in the United Kingdom, thus eliminating the cases which are going to present the greatest difficulty. But, as things stand, if those checks have to be made it means that the persons whose applications are comparatively simple are going to have to contribute towards the investigations of others which may cost several thousand pounds. I believe that that is patently unfair.
The unsuccessful applicant is also going to be making a contribution for the first time. The fee is payable in advance, so the state will have an interest-free loan of the money. If it takes two years to process the application—and that is a very modest estimate—then, taking the interest which is available on a typical two-year gilt of over 13 per cent., it means that the applicant is going to pay an extra charge of something like £50, and that sum must be added to both the nominal amount which is being paid by the successful applicant and also it must be treated as the equivalent of a fee which is paid by an applicant who is unsuccessful.
These enormous charges will undoubtedly mean that citizenship is arbitrarily denied to thousands of people who could satisfy all the conditions, as Mrs. Ann Dummett pointed out in her letter to The Times of 22nd March. For a couple with an 18-year old son or daughter, the total amount payable would be £500, a

77
sum well beyond the means of the average wage-earner, let along the millions of unemployed, the disabled or the retired. And as Mr. David de Gale said, also in The Times, on 3rd April, the applicant has to pay also for a public notice to be inserted in a news-paper, which in his case being a "cheap" local paper in Suffolk came to another £76.20. Mr. de Gale asks—and I put it to the Minister—what lunatics bring these things about and whether we actually pay them. The answer is that "Thatcherism" is the crazy and perverted doctrine of laying burdens on those who can least afford them, while making life easier for the fat cats who support the Tory Government. We do indeed pay Ministers very large salaries for devising these means of soaking the poor. When we get into office, we shall introduce objective tests of citizenship, which will be simple and cheap to operate, and the fees will reflect our principle that the privilege of citizenship ought not to be conferred only on the rich. My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That this House calls on Her Majesty's Government to revoke the British Nationality (Amendment) Regulations 1982 (S.I. 1982, No. 283).—(Lord Avebury.)
7.40 p.m.
Lord Pitt of Hampstead: My Lords, I must join in protesting against these regulations. Your Lordships will remember that during the debate on the British Nationality Bill I tried to get the Government—at the time of moving that amendment it never occurred to me that they would reject it—to accept the power to waive or reduce the fees in certain circumstances in which people are needy. It was rejected by the Government on the advice of your Lordships' House. There has been an increase of 40 per cent. in most instances, and in some instances of about 300 per cent., on the fees required on application for British nationality. Moreover, we have a new system under which people are required to pay on application and not when they have received their citizenship. As the noble Lord, Lord Avebury, has already explained, it means that the Government are extracting an interest-free loan from these people and receiving money from them. I cannot imagine that nothing is done with the money and therefore since the money must have been used in some way or other it does constitute a loan to the Government for two years.
This is bound to create hardship for lots of people and, as the noble Lord, Lord Avebury, has pointed out, lots of poor people come here. They came here to work, to settle, and they have to save in order to be able to register themselves, their wives and their children; and this sort of sum is a real burden. In terms of society, I would have thought that it would be better to encourage people who are living and working here, and settling here, to become citizens and therefore to take out British nationality. Therefore, one would have expected the opposite approach to the one which is being followed—in other words, they would be encouraged rather than discouraged.
However, the way in which the fees are weighted, and in particular the fact of having to pay in advance, must have the opposite effect. It will encourage people to delay rather than bring forward their taking out of British nationality. Perhaps when the Minister replies
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he will say that is what the Government want. I cannot believe that is what they want, because this is certainly not the best thing for society. Therefore, I am sorry that the Government are pursuing this particular line of approach. I hope that the Minister will say that the Government are prepared to re-think the suggestion I made about taking powers to waive the fees in some instances where the people concerned cannot really afford them and to reduce the fees where it is quite obvious from people's means that they cannot afford the full fee.
If that were to be the case, then much of what I am saying now would not have the same weight, but since these fees have to be paid and they are in fact the cost of becoming nationalised, the cost of being able to register yourself as a British national, I am afraid it is a step in the wrong direction. Not only will it slow the rate of absorption in terms of people becoming British nationals but it will increase resentment. I am not going to repeat what I said on a previous occasion to your Lordships about a youngster who came to me objecting very strongly that after having been prepared to die for this country through serving in Northern Ireland he was then called upon to pay £150 in order to register as a citizen of this country. Now he has to pay £200. I take it that particular chap probably overcame his resentment and paid up: I do not know. But since then the fee has been increased. I cannot be sure, but I hope that the Minister would see the wisdom of changing this approach and really trying to encourage people to become citizens as soon as possible, and, far from making it more expensive for them to do that, to try to ease the burden as much as possible.
7.45 p.m.
Lord Campbell of Alloway: My Lords, this Motion, which calls upon Her Majesty's Government to revoke this regulation, will stand in effect on a Division as a veto on subordinate legislation. I would remind your Lordships that in the White Paper (Cmd.3779) in 1968 it was stated that on subordinate legislation the present power of the House of Lords on rejection was inappropriate and unsuited to modern conditions. This is the category of subordinate legislation, the delegation of power to make regulations, which is not subject to either affirmative or negative resolution in Parliament. This regulation is within the competence of my right honourable friend the Home Secretary by virtue of the will of Parliament.
I decline to follow the noble Lord, Lord Avebury, along the road which treats a debate on fees as serving as a vehicle for complaints about the operation of a telephone exchange, or indeed as comparable with dog licensing. Also, I do not know why we had a reference to "fat cats of any political complexion", together with cycling on roads and unspecified inefficiencies in administration and who takes the benefit of interests. But I do treat with great seriousness one of the points made by the noble Lord, Lord Pitt of Hampstead. He said that the question of arbitrary denial is a real question. I agree with him. He gave the example of a man who has fought in Northern Ireland then having to pay £150 or £200.
Your Lordships may well think that this is an aspect of the implementing regulations which ought to warrant consideration in due course. The offending words in

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this regulation are that the fees shall be payable which are mandatory and not discretionary. I see the noble Lord nodding assent. There is no leeway for the exercise of discretion in cases of hardship or on compassionate grounds, and the noble Lord, Lord Pitt of Hampstead, has given but one example. This is a matter for further regulations. I, for one, will oppose this Motion on a Division, if one takes place, because the resort to this power of veto at, so to speak, one remove is neither appropriate nor wise in the present political climate. We must not be seen as seeking to frustrate the will of Parliament.
Secondly, the merits as to the increases in charges, in my submission, do not warrant resort to supporting such a Motion. Thirdly, I would respectfully suggest to your Lordships that the appropriate procedure is not to call upon Her Majesty's Government to revoke this regulation but to seek to secure in due course a further regulation which gives the exercise of discretion so that in cases of hardship or on grounds of compassion the point made by the noble Lord, Lord Pitt of Hampstead—with which I say again that I agree—could be met.
7.50 p.m.
Baroness Jeger: My Lords, I shall not detain your Lordships for long, but it is important that we on these Benches should associate ourselves very firmly with the views put forward by the noble Lord, Lord Avebury, which I was glad to see were supported by the noble Lord, Lord Campbell of Alloway. It seems to us that, in a situation in our society where racial tension—
Lord Campbell of Alloway: Would the noble Baroness give way?
Baroness Jeger: Did I get it wrong?
Lord Campbell of Alloway: My Lords, on a point of correction, I am afraid that I was disagreeing—if I may say so with respect—hook, line and sinker with the noble Lord, Lord Avebury. I was taking one of the points of the noble Lord, Lord Pitt of Hampstead, which I did not know he was going to make, but which I thought was right and supported it. But I did not support the noble Lord, Lord Avebury.
Baroness Jeger: My Lords, I acknowledge that and thank the noble Lord for what he has said to make the position clear. I had thought that what my noble friend Lord Pitt had said was rather nearer to what the noble Lord, Lord Avebury, had said than, apparently, was the case in the view of the noble Lord, Lord Campbell.
But what I want to say officially from these Benches is that in the present situation, where racial tensions are at the heart of much discord and much difficulty in society, anything that can be done to reduce those tensions must be accepted. It seems to us that, in this very sensitive situation, the fact that it will cost a lot more money for people who have come from abroad to establish their citizenship cannot help to reduce those tensions.
It seems obvious that one of the ways in which we can help people who have come from overseas to settle
80
down and take their place in the community is to make them able to become citizens of this country and not to feel that they are strangers and aliens in our midst. When I read that the fees for application for citizenship are to go up to £200; that the fees for women who marry British citizens will rise from £50 to £70; that the fee for registration of minor children goes up from £25 to £35, all this seems to suggest the putting up of a barrier against these people from overseas settling down among us as citizens.
It also seems to us that it is very unfair to make a change whereby, instead of paying the money when they have been accepted as citizens, we are now asking people to put the money down in advance. This could mean that for one or two years the Home Office sits on the money, and I understand that if the applicant is refused citizenship he is paid back only the money which he put down, and that there is no consideration for the interest which he may have lost, or for the difficulties which he may have encountered through having, as it were, to sterilise his money while the Home Office thinks about his application. I hope that the Minister will say why this change has been made, because in all that I have read I have not seen any reason, other than fiduciary, for the Home Office demanding the money before the application is granted.
We also want to ask a little more about children. I understand that if a family is involved in this situation, children who are counted as minors will not have to he penalised drastically. But if there are any children over 18—who, under the law of our land, are adults who happen to be students they will also be expected to pay the whole £200. I hope that I am wrong, and maybe the Minister can enlighten the House. There are many families who have come from overseas, who have worked very hard and saved up a great deal of money in order to send their children to universities or polytechnics. If their child then becomes 18 years of age, will he or she still have to pay the £200? That would be very unfair.
I also want to support the protests that have been made about the difficulty of people making these applications. I recall that, when I was a Member of Parliament for a very cosmopolitan area in central London, I had more complaints about Lunar House and the Home Office than any other department of state. There were complaints about telephones not being answered, complaints about appointments not being kept, complaints about letters not being answered and complaints about forms not being available. I want to ask the Minister, who I know is very kind at heart, whether he could try to make these processes a little easier for some of these harassed people. Why cannot these forms of application for citizenship be available at post offices, at banks, at social security offices and at town halls—at all the places which are near to people? Why is there this withholding of even a form, as well as demanding the money? It is bad enough to be asked to pay £200, but if you cannot even get a form to fill up to put with the £200, that seems to be an excessive and mean attitude.
I do not want to go any further tonight. I understand all the difficulties, but I want to say that we very much support the noble Lord who has raised this matter tonight, because we think that the charge is excessive, particularly as regards children and over-

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18 year-old dependants. We think it is outrageous that the Government should demand the money in advance, instead of waiting to see whether or not an applicant is successful. We also think that the whole administrative procedure as to the availability of forms, the accessibility of phone calls and the general attitude of the department leaves a very great deal to be desired.
7.58 p.m.
Lord Belstead: My Lords, first, I ought to make clear the effect of this Motion by the noble Lord, Lord Avebury. The regulations that we are debating this evening are not subject to parliamentary procedure and would remain in force if your Lordships voted for the noble Lord's Motion. However, the Government would take very seriously an adverse vote on this matter, and my noble friend Lord Campbell of Alloway was quite right to conjecture that the Government would wish to give effect to the wishes of your Lordships' House.
But if, as a result of an adverse vote, these regulations were therefore to be revoked, it would be a very serious matter. Some £3 million would be lost in additional fees and the losses would have to be made good on the Home Office vote. It would mean that some £3 million was not available for spending on other things. Your Lordships could conjecture, in your turn, as to what those other things should be—prisons, police support services, or grants to voluntary organisations. But wherever it came from, the money would have to be found.
In recent years, successive Administrations have raised the fees which we are discussing. In 1975 the fee for naturalisation was £40 and the fee for registration as an entitlement was £10. Then, in October 1976, those fees were raised to £70 and £25 respectively. Despite the complaints of the noble Baroness, Lady Jeger, those were percentage increases comparable to those we are discussing today.
Baroness Jeger: My Lords, surely those payments were made when naturalisation was granted. They were not demanded when the application was first put in.
Lord Belstead: That is a matter, my Lords, which I shall come to in just a moment. I shall not go through the increases in fees which continued to occur under the previous Government, and now, because in the speeches which have been made your Lordships have quoted them.
There are two important provisions which, as in previous regulations, reduce the impact of these fees on families. I think it is important to emphasise these. A wife applying jointly with her husband for naturalisation or discretionary registration has to pay £70 and not the full fee of £200. However many children there may be of a marriage, all the children will be covered by the same £35 fee if application is made for their registration together. But we are of course talking about children under the age of 18, if I may pick up the point which was made by the noble Baroness, Lady Jeger.
There was a suggestion from the noble Lord, Lord Avebury, that in some way I had been concealing from your Lordships the fact that it would be necessary to
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increase the fees which we are debating this evening. The noble Lord is habitually fair. I do not really think that is quite true. My right honourable friend the Home Secretary said in another place last June that there would have to be an increase in fees, but he added that he would undertake to see what he could do to keep costs down and to look very carefully at this point. For my own part, during the Report stage of the British Nationality Bill last October I said that we were a very long way from achieving our objective of full recovery of costs through fees. It was at that time estimated to be nearer 30 per cent. than 100 per cent. recovery.
In his announcement on 10th March of this year about the increases which came into effect on 1st April, my right honourable friend stated that the new system of payment with the application would enable the increases for new applications to be kept at a lower level than would otherwise be necessary. In a nutshell, that is the answer to the noble Baroness, Lady Jeger, who asked why it is that we are doing this. By introducing this system we expect to be able to recover all the costs on applications made in 1982–83. To have retained the present system of payment of the fee only when the application is granted would have meant very much larger increases in fees if costs were to be recovered.
I must stress that the fee will of course be refunded in any case where the application is unsuccessful. I say "of course", because the noble Lord, Lord Pitt of Hampstead, in attempting to ram this point home said that in effect an interest free loan is being made. May I respond to the noble Lord and remind the House that before 1976 unsuccessful applicants were required to make a payment. This is not now required of them and we do not intend in this increase in fees to require that of them.
Your Lordships' House will be aware that there are delays in processing applications. This means that under the present system of payment on approval of the application it can be anything up to two years, depending on the type of application, before the fee is collected. In that period costs will probably have increased still further. Thus, in the past the fee collected has represented only a small proportion of the cost of processing the application. In fact, in the seven years up to 1980–81 the highest percentage recovery of costs which we achieved was 44 per cent., and the average was 27 per cent.
One reason why the recovery of costs has been so low in the past is that the number of applications has increased dramatically. This has led to an increase in the waiting time for applicants and, hence, to the time taken before the fee was recovered following the process and approval of the application. I will give just a few figures to illustrate what I am saying. In 1977, some 32,000 applications were received and the staff of the Nationality Division of the Home Office was 184. Last year, the total number of applications received had risen to 70,000. During those five years the staff has been increased. It was 231 in June of last year, but not enough to be able to cope with so significant a rise in new applications. The majority of the applications were from adults claiming an entitlement on grounds of residence or marriage, or they were applications for the registration of minor children.
Lord Avebury: My Lords, in giving these figures could the noble Lord tell the House how many applications were in fact completed in 1976 and 1981 respectively and what this represents in terms of the number of applications per employee in those two years respectively so that we can see whether the productivity of these officials did in fact go down, as I claimed?
Lord Belstead: My Lords, I will come to that, and if I do not entirely cover the point I shall endeavour to answer the noble Lord's question specifically before I finish speaking. The increase in applications for naturalisation and registration at discretion, where there is the greatest disparity between costs and fees because of the additional inquiries which are involved, was proportionately even higher than for other applications. In 1977, the intake of applications for naturalisation and registration at discretion was some 5,400. Last year it reached 16,300. May I again say to the noble Baroness, Lady Jeger, that one reason why we are asking for fees with applications is that these applications for naturalisation or registration by discretion take the longest to process because of the additional inquiries which have to be made, and increased delays with these applications have consequently led in the past to increased delays in recovery of the fees.
To try to streamline procedures and reduce costs and waiting times, the Government arranged a scrutiny under the guidance of Sir Derek Rayner into the handling of applications for citizenship. The report of the scrutineer, made available to your Lordships' House and another place last July, indicated that despite the pressures under which the staff were having to work the existing procedures were necessary and were operating with due regard for economy in manpower. Various recommendations which were made as a result of the scrunity have been followed up and productivity has in fact increased considerably as a result of simplification of procedures. Nearly 54,000 applications were completed last year as against 37,000 in 1980.
My right honourable friend is also hoping to make some additional staff available to the Nationality Division in this financial year. It is hoped that this may result in some improvement in waiting times, but this will of course depend on whether the present level of applications continues. I hope your Lordships will not mind my saying that I find a slight contradiction between the protests which have been put to me across the Floor of the House this evening, that costs are preventing people from applying, and this dramatic increase which has gone ahead over the last few years, continuing up to the present time, in applications for registration and also for naturalisation.
The suggestion has been made that insufficient publicity was given to the proposed increases in fees and also that individuals have difficulty in obtaining application forms from the Home Office. The first of those two complaints is one which your Lordships have not in fact made, and that I think I might leave to one side—simply saying that the Home Office did issue a press notice on 10th March and that the Nationality Division did write to all the community relations councils the day after suggesting that they draw the announcement to the attention of the ethnic majority organisations with which they liaise.
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So far as the second point is concerned, however, about individuals actually obtaining application forms, a point which the noble Baroness and the noble Lord both raised, I am not aware that any individuals have had difficulty in obtaining application forms from the Home Office. So far as I am aware, all such demands made direct to us have been met, but I admit that bulk orders from organisations such as Citizens' Advice Bureaux have sometimes not been met in full. If an organisation was short of forms, it had only to direct people to us or to convince us that they had a need for the full bulk orders for which they had asked. When the noble Baroness, Lady Jeger, asks me why the forms were not put in a whole variety of places all over the country, may I just answer that, of all the forms we issue to the agencies concerned, only one-third are used for actual applications.
A great deal has been said about the effect of increased fees on families. It has been suggested that for some the need to send in the fee with the application may effectively mean that people cannot afford to make an application. As I have said, provision is made for wives and children applying with the father, but, in setting the new level of fees and changing the procedure, it has been necessary to consider very carefully how to balance this whole aspect with the need to control public expenditure. Nationality fees have not been increased since 1980 but the cost of processing applications has continued to rise. The cost alone of staff and accommodation of the nationality division—and we really cannot disregard the cost—rose from £1·464 million in 1979–80 to £2·183 million in 1980–81, but the income from fees rose by only £350,000 to £1·009 million.
During this debate, your Lordships have proposed that the subsidisation of fees should take place and, indeed, I have noted the advice given to me by my noble friend Lord Campbell of Alloway. But, whatever may be the merits of subsidising these fees, there is the difficulty—it has come out in this debate—that there would be constant controversy as to where to draw the line. That is not just a bureaucratic and administrative answer. The noble Lord, Lord Avebury, recommended—he had every right to do so—that the line should be drawn at those who receive supplementary benefit or who are in receipt of family income supplements. The noble Lord, Lord Pitt of Hampstead, on the other hand—perfectly understandably—gave the example of a man who has served in Her Majesty's Forces in Northern Ireland. In addition to this difficulty, additional administration would undoubtedly lead to higher fees for those who are paying in full.
I would like to add just two other points which are also relevant to what your Lordships have been saying. First, may I just remind your Lordships that a successful application is a once-and-for-all affair. Citizenship really must not be compared with other areas where a fee may have to be paid annually or periodically. Secondly—here I come on to ground covered by the noble Lord, Lord Pitt of Hampstead—the British Nationality Act and indeed all the other nationality legislation will not adversely affect the position under the immigration law of anyone who is lawfully settled here. There is no compulsion, either expressed or implied. The Government really have to approach with caution the suggestion that scarce resources should

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be devoted to a scheme for waiving fees for some categories but not others, especially where people settled here lawfully who are not our citizens are under little practical disadvantage.
It is a matter of priorities and I suggest that successive Governments have been right in declining to accord priority to expenditure on a scheme of that kind. Of course, in saying that, I am not disagreeing with the noble Lord, Lord Pitt of Hampstead, that we wish to encourage people to acquire citizenship, as it is an important way of expressing commitment to this country. I believe the figures I have given this evening show that people have been accepting this with both hands; I am delighted that this is so despite the fairly substantial fees which have been charged in recent years.
Parliament has entrusted the Home Secretary of the day with the responsibility of administering the nationality laws. We believe it is right, where applications are made, that inquiries should be instituted if necessary to see whether the statutory requirements have been met. This is especially so where an applicant must be of good character. Inevitably, such inquiries take time and cost money. Therefore, there must continue to be considerable costs involved, which we believe it is right should be met by the applicant concerned and not subsidised by the public at large.
The noble Lord, Lord Avebury, asked me two specific questions. One concerned questions to employers. These questions are desirable to build up a total picture of the applicant. They could produce information of relevance to the requirement that the applicant should be of good character. I realise that the noble Lord and the Government do not agree on that point, but that system was agreed by both Houses during the passage of the British Nationality Bill as being the way in which naturalisation applications should continue to be decided. The noble Lord also asked me about the use of a computer by the nationality division. As I believe the noble Lord knows because of his interest in this subject, we undertook a feasibility study which has now been completed and approved. A full study to design the new system is in train. I cannot today give details of this new system because its introduction will depend on the availability of the necessary resources, but we hope that it will be possible for the computer to print out certain documents, including citizenship certificates and some of the stock letters which the noble Lord mentioned—and which, I think, he is in receipt of from time to time.
Perhaps I might now sum up. The fees set in April 1980 have been maintained for a period of two years. One would not actually gather this from the debate this evening, but that is the longest period of such stability since April 1975. We have now raised the fees. Through the measures we have taken, we expect that in 1982–83 we can increase our income from fees to the extent necessary to eliminate the considerable annual deficit on this service and, in effect, its subsidy by the taxpayer. At the same time we have streamlined procedures and arranged for the provision of some additional staff. We hope very much that this will eventually lead to some reduction in waiting times. Our expectation is that the present level of fees can he held when the British Nationality Act comes into force on 1st January next year, although further
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increases could be necessary in April of next year. If the fees do have to be increased after 1st January they will then be subject, under the British Nationality Act, to the negative resolution procedure and there will be an opportunity for further debate in your Lordships' House, if any of your Lordships thought it necessary.
I know that there are points in this debate upon which we do not agree but I hope I have shown that the Government have acted reasonably in this matter. I ask the noble Lord, Lord Avebury, not to press his Motion. If the Motion is pressed to a Division and was agreed to it would have the very serious consequences which I tried to explain at the start of my remarks. If the noble Lord, Lord Avebury, does feel that he must press his Motion, I must ask your Lordships to vote against it.
8.18 p.m.
Lord Avebury: My Lords, your Lordships will understand that it is sometimes necessary to find a way of staging a debate which does not result in a Division, and there may be very good reasons why it should not do so. The form of Motion now before your Lordships may sometimes be the only way of raising a matter such as this.
I really do not need lectures from the noble Lord, Lord Campbell of Alloway, on what kind of Motions I should put down on the Order Paper. I think that he made an insufferably pompous speech, if I may say so, and I am perfectly able to look after the drafting of Motions without any advice from that quarter. The noble Lord, obviously, was not listening to me because he said that he disagreed hook, line and sinker with everything I said, yet at one point in his remarks he was suggesting to the Government that on a later occasion they might apply their minds to the possibility of relieving certain applicants who might suffer hardship as a result of the payment of these fees. I hope that I have not got the noble Lord wrong. He is neither affirming nor rejecting what I am saying. He was agreeing with the noble Lord, Lord Pitt of Hampstead, that where poor applicants could demonstrably show that they were not in a position to pay £200, or more if their families were registered at the same time, the Government might give further consideration to some system of evaluating their means—it would have to be a means test, obviously—and of waiving the fees in those cases. Am I right or not? Is that what the noble Lord wants.
Lord Belstead: My Lords, I wonder whether I could help the House. My noble friend, who is habitually fair and objective, was making a remark which was extremely helpful to the noble Lord, Lord Pitt, and was showing the Government that my noble friend, who is also of independent mind, had his own views on this particular subject. If the noble Lord, Lord Avebury, refuses to see any merit in anything my noble friend Lord Campbell of Alloway says, I am not particularly surprised that the noble Lord fails to understand what my noble friend says.
Lord Avebury: My Lords, I am not surprised that the noble Lord, Lord Campbell of Alloway, needs the Minister to defend him. When this proposition was put by the noble Lord, Lord Pitt, to your Lordships—
Lord Campbell of Alloway: My Lords, if I may inform your Lordships' House, I need no one to defend me. The only reason why I did not rise to the bait a little earlier was that I thought it was not worthwhile to do so, that we were getting late and I did not wish to indulge in any form of personal exchange or acrimony, not because I cannot defend myself, but because I preferred not to do so.
Lord Avebury: My Lords, the noble Lord would have had some difficulty in defending himself, because he did in fact vote against the proposition of the noble Lord, Lord Pitt, on 13th October. He will find his vote recorded at column 331 of Hansard of that day.
If I may turn to the remarks of the Minister, first of all may I say that I do not think he took on board the very relevant point of the noble Baroness, Lady Jeger, that if we want people to integrate into our society, if we want them to feel part of Britain after they have been here many years, we should be making citizenship easier rather than more difficult. It does not seem to me that to answer that with a figure of the amount which it was going to cost to accept a proposition of this kind, is really helpful at all, because if the expenditure of £3 million—which is what the noble Lord says it would cost to leave the fees as they are—would result in a very large number of people, something like 150,000 people, feeling that they were genuinely a part of British society, that would surely be expenditure well worth while. Nor would it mean, of course, as the noble Lord is well aware, that £3 million would be the actual figure.
We have had this argument many times when Ministers have spoken in exactly the opposite sense. I do not want to widen the discussion, but, for instance, every time somebody points out that if we did not have Trident we could afford to spend more on conventional weapons, this is strenuously denied by Ministers at the Dispatch Box. You cannot have one rule of arithmetic which applies to defence and a totally different one which applies to the Home Office.
May I say that I was not attempting to suggest that the Minister had concealed the implications from the House at the time when we were discussing these matters on Committee and Report. All I said was that when it was first raised in Committee the Minister had been a little reticent about the actual level of fees. I agree—and I did mention this—that when we came to it on Report he made it quite plain that it was the Government's intention and their policy ultimately to recover the whole cost of the service in terms of the fees.
The service has undoubtedly become less efficient, when you look at the number of applications processed and the number of civil servants engaged in the task over a period of years. In 1971, the number of applications granted divided by the number of officers employed in the division was 361. It steadily declined from that point until 1977 when it had fallen to 130. When the noble Lord's colleague, Mr. Timothy Raison, said to me in correspondence that the reason for the drop in efficiency was the consequence of the courts' decisions in the cases of Zambia and others in 1977, I believe this could only have been partly true because the decline in efficiency of the division had preceded those decisions of the courts.
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My Lords, I recognise that, having put all the arguments this evening, I am not going to make any impression on the Home Office, that the fees are not going to be put back where they were before these regulations were published. I only hope that, as a result of listening to the arguments that have been put this evening, the noble Lord the Minister and the Home Office will think twice before they impose such swingeing increases when the matter comes to be reconsidered next year. With that I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.

"The Arts in Schools "
8.25 p.m.
Lord Beaumont of Whitley Lord Beaumont of Whitley rose to ask Her Majesty's Government whether they will make a positive response to the report of the Calouste Gulbenkian Foundation entitled The Arts in Schools.
The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. It is getting late, but I make no apology for introducing this very important subject at this particular time. I am only sorry that we are short of two speakers who would have liked to take part, two former Ministers for the Arts, one of them an ex-Secretary of State for Education. Unfortunately, the noble Viscount, Lord Eccles, is ill and unable to speak, and I am sure we send him our best wishes for a speedy recovery. And it is very sad that the noble Lord, Lord Jenkins, has had to scratch at the last moment.
My Lords, my Question is to ask the Government what action they intend to take on the very fine and valuable report The Arts in Schools, produced as the latest of a number of reports on these kind of subjects by the Calouste Gulbenkian Foundation. It is a major document and it deals with important and, on the whole, I think, neglected issues. I know that the present Secretary of State maintains that the Department of Education and Science in fact does take the question of art in education rather more seriously than the report makes out. I would fully grant that. But over a whole period of time I think it is true that there has not been enough emphasis on this particular side of education. The arts, of course, are not alone in this. It is part of the tradition that we have in this country, and it is common to many other countries too, that there is a great emphaiss on the academic tradition. I think we have been the poorer for this over a large number of years, in that both the arts side and the technological side have tended to be neglected.
This subject which we are debating tonight, and which is the subject of this report, is in fact the heart of the whole movement of education for capability which is being sponsored by the Royal Society of Arts at the present time, and which I believe has so much to offer to education in this country. I do not think that there is a great need to argue the case for the value of the arts to education. On the deepest level the arts are fundamental ways of organising our understanding of the world. I think there are few noble Lords who

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would want their own children to be educated without a knowledge of the arts, without the opportunity to learn to practise some of the arts.
What we want for our children surely we want for the children of this nation, because arts are not just a middle class icing on the cake; they are considerably more basic than that, as Professor Richard Hoggart pointed out a long time ago, and as has become more apparent since. I think we can see, particularly among ethnic groups, how concentration on the arts has helped with integration and with education as a whole. So we are not talking about arts for a particular class of people or a particular kind of people. We are talking about the arts in all schools and for all children. Not to attempt to involve our children in the arts is, as the report says in one place, simply to fail to educate them as fully developed, intelligent and feeling human beings.
One of the reasons why the arts have been neglected to a large extent in the past is that we still tend to think of education as education for something which is going to happen. Education is not just for the future: it is not a stage that children go through on their way to emerge at the end fully equipped. It is an ongoing process by which they live as they learn, and they learn in order that they may live. If our civilisation has any successful values and any success at all, it will become a civilisation in which people go on learning for the whole of their lives. Again, this is something which everyone in your Lordships' House experiences at some time in his or her life. My father-in-law always used to say, "You learn something new every day of your life", and that is, indeed, very true. Some of us learn more than others, but it is essential that we go on learning.
Therefore, we must think of the arts in school as not just the preparation for what happens afterwards, but as something which is deeply affecting children at the time it happens. But the future is important. The preparation is important and it is worth saying a word or two about it very briefly because the points that I want to make are, I think, self-apparent. None of us knows what the pattern of employment in the future will be, but we can make some intelligent guesses. Some of the things which we foresee happening will be things we shall look forward to, and some of them we can only feel rather pessimistic about. But both the optimistic and the pessimistic sides seem to me to make a case for the growing involvement of art in education.
On the optimistic side, if it is true, as many people tell us, that the growing sophistication of technology—the new industrial revolution—will need a highly educated people to operate it, surely it is the arts which foster both the innovation and initiative that we shall need to give impetus and inspiration to the people who are coming out of our schools. Equally, if unemployment, whether in regard to part-time or full-time work, should be one of the fates to come, we do not want to breed a population which will have no resources to put up with these hardships. The arts, and feeling for the arts and for creativeness, are one of the things by which people can creatively transfigure the time that they may find they have.
Much progress has been made in recent years as regards the introduction of arts into education. The document Curriculum: 11–16, written by a group of Her Majesty's Inspectors, has firmly marked out the
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aesthetic and creative experience as one of the essential areas of experience. In various parts of our educational system the arts have been taken up with enthusiasm and have been taught creatively, imaginatively and well. One only has to mention Leicestershire in the field of the visual arts or ILEA in the field of music to know that local education authorities have been able to make a great success of this field. But the picture is still very patchy even after everything that has happened over the last 20 or 30 years. There is, for instance, in the report, on pages 64 and 65, a mention of the study by Joan Freeman of aesthetically gifted children. She found:
"that, in some of her sample schools in Salford, there was 'a complete absence of measureable talent'. However,' … there were schools under the same authority, which had whole classes learning instruments and painting with fervour'.
"She found it difficult to believe that ' aesthetic talent is truly definable by school catchment area '"—
and so say all of us. It goes on to say:
"All of these ' aesthetically impoverished ' children were from economically poor areas: ' … and neither parents nor teachers were seen to be sufficiently motivated to foster anything that was not considered to be essentially education.' ".
That is the bad side of the picture. That is the reverse side of the coin.
To add to that complete desert which can be found in various parts of Britain, there is also very often the tokenism that is worse than useless. This very often comes in middle class areas where the arts are admitted to the curriculum but are regarded by everyone as not very important and by children and teachers alike as a holiday from the serious work of the school. That also is a blot on the picture and something which needs to be corrected. It is a vicious circle, and a vicious circle which can only be broken, I suspect, at the level of teacher training. It needs the enthusiasm and the toughness of teachers with real dedication to the arts actually to break into this circle and bring an enthusiasm which did not exist before.
I have painted so far, in very broad canvas, the picture of an increasing awareness of the arts in education. That has been so up to date. There have, of course, been problems. One of the major problems is that of assessment. That is in two forms. It comes, first of all, from the difficulty—which I think all of us in this House who are interested in education have debated time and time again—of the pressure on the educational system from the universities and the examination system working downwards, and the pressure on children to choose subjects which fit into the assessment and examination system.
On the other hand, there is the difficulty of devising proper examinations, if you like, but I think "assessments" would probably be more suitable, for testing children's progress in the arts. Here I should like to ask the noble Lord a question of which I have given him notice. I see that the noble Lord looks surprised. I did give the noble Lord notice; I passed a letter, but it may have got lost somewhere and, if so, I am sorry about that. However, there was an Assessment Performance Unit in the DES and it had a panel particularly dealing with aesthetic development. It was closed down fairly early in the life of this Government. My question was: what had happened to its work; had it produced a report of any kind—I do not think that a report has been published—if it did

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produce any work, is it possible that we could know something about it? Undoubtedly, whatever the answer to that question, more work is needed on the whole matter of assessment. Gulbenkian I do not think is particularly good on producing answers as regards that matter, and quite openly says that a great deal more work is needed. I hope that the Government will take this on board and will want to do something about it.
There is another minor point that I should like to raise and which I think the DES could do something about fairly quickly. That is the difficulty of the change-over from primary schools to secondary schools. So often when children come into secondary schools, the teachers do not know what has heen happening at the primary level and find it very difficult to find out. It is not like mathematics. You cannot just sit them down, ask them to do sums and say, "you have learnt that, and you have not learnt that". The aesthetic side is much more difficult and I should have thought that some guidance on that would be very helpful to many secondary schools.
So that is the picture to date. But we have the major problem of the recession, which we face in every field that we discuss in this House. I have already said that I think one needs the arts more than normally during a recession. Apart from anything else, they are extremely rewarding in terms of resources. They do not call for great amounts of material. We are not talking about building opera houses when we talk about arts in schools. On the whole, they need dedicated people, and dedicated people who would otherwise be on the dole and costing the state quite a lot of money anyway. I think that there is room for encouragement here.
There was one other question which I had set out in the letter to the noble Lord, which I delivered to the Government's Whip's Office. It was about college of education drama courses. Obviously, I do not expect the noble Lord to be able to answer it tonight if he has not received my letter, but perhaps he will write to me. As I understand the situation, in 1961 there were six drama courses in colleges of education, which I think is about the number that one would expect. By 1971, there were 110, which is a great flowering and very good indeed. In 1981, there were none. I think that that is right. There are no longer even six. If this is a result of the cuts, it is disgraceful and something ought to be done about it.
I think that I have said enough to introduce the report, which I am sure that noble Lords have already read and which I hope many more noble Lords will read, because it is an extremely good report and extremely important. I am delighted to have heard that the DES has sent out a questionnaire to HMIs asking for their comments on the report and that great interest is being shown there. I am sure that that is true. I only hope that it will result in some action. It is an important subject. It is not just the icing on the cake; it really is a part of the cake, because as Peter Brinson, the director of the Gulbenkian Foundation, has said, the title wealth of Britain lies not in her oil or coal or even her fields, but in the imagination of her people. We should be fostering this imagination, not least in these difficult times.
8.43 p.m.
The Earl of Gosford: My Lords, I have been asked by my noble friend Lord Jenkins to apologise for his being unable to be present this evening. He would like me to give your Lordships' House one brief message. He believes that the report is so admirable that he hopes that Her Majesty's Government will now give the money to carry out its recommendations.
I did not put my name down to speak because, due to pressures of my own work, I have been unable to complete the reading of this report. I must apologise to the noble Lord, Lord Beaumont of Whitley, that I have not supported him properly in this debate. However, there are one or two points that I should like to make which come out immediately from this document. After this debate, I shall look forward to reading the entire report. I feel already that this is another tour de force by the Gulbenkian Foundation and I am very impressed by the uncompromising stand that the report makes. It says things that I believe those who are artists and those who have been involved in the arts have been wanting to say for a long time and, indeed, have been saying for a long time.
However, when an organisation like the Gulbenkian takes the trouble to produce a report of this strength, we can only be grateful that it has taken the words out of our mouths. The fundamental point about the report is that the arts are fundamental to the school curriculum. They say:
"In our own view, teaching people about achievements and aspirations in the arts may amount to little more than providing courses in the history and sociology of the arts. Arts education, as we have indicated, involves a great deal more than that".
I like the way in which the report goes beyond the idea of art just as a leisure and decorative activity, which it most certainly is and most certainly can be. It goes into the psychological, the physical and the communicative aspects of it, and shows how very necessary it is, on an equal par with arithmetic, English, and all the other subjects that we have to learn at school. Out of this, it becomes its own vehicle for change. I should like to quote a couple of paragraphs which I think are fundamental to everything I should like to say about the arts and at which this report is getting:
"By 'rationality', we do not mean merely deductive logic of discursive reasoning. We mean the many different conventionalised ways in which, as human beings, we have learned to communicate—through noises, marks, and signs—our ideas and feelings to other people. Some of these do not require verbal communication at all: there are whole 'languages' of meaning which have no direct need for words. They are, nonetheless, exceedingly rich and complex forms of talking to other people".
They say earlier:
"The arts are not outpourings of emotion. They are disciplined forms of inquiry and expression through which to organise feelings and ideas about experience. The need for young people to do this, rather than just to give vent to emotions or to have them ignored, must be responded to in schools. The arts provide the natural means for this".
I think that the most difficult thing for a person who is trying to express himself early on in life is the realisation that he is exceptionally lucky if he finds an art teacher who can communicate with the other teachers in such a way that he shows that the art class is not just a corner for the dunces—those who do not particularly take on the ideas of mathematics or other subjects. When you take into account a man like

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Leonardo, you understand that that, of course, is all quite irrelevant. What we are trying to say, and what this report is saying so exceedingly well, is that the way to communicate is not necessarily through the traditional British school curriculum of the three Rs. The arts must be on an equal par.
I speak personally as an artist and someone who has come through the British education system. All the way through if you have an idea of expressing yourself other than in the ways of traditionally held examinations—and examinations that would get you to university, et cetera—you in some way were a person apart. This is reflected in the fact that in many jobs you are expected to have certain kinds of qualifications, and it seemed to me that the arts qualification was never of such a value as the other qualifications. I should like to hear from the noble Lord, Lord Elton, whether in fact this is now in the past—I would sincerely hope it was—and that an arts examination and an arts degree was in every way as valuable as a chemistry degree, a Latin degree, or a history degree. The same with O- and A-levels.
It is the abandonment of this old reasoning that so commends the arts in schools to us. I should like to end by quoting one more passage from this document:
"For the reasons which we elaborate throughout this report we are not prepared to concede that the arts can be options on the curriculum which can, under pressures of time, space and resources, be dispensed with. We are convinced that the forms of creative thinking and doing which they represent are fundamental to the curriculum along with other key disciplines: no more than they, but certainly no less. We maintain that the case we make for this is soundly-based. It makes sense not only within the framework of education in all of its forms but also with respect to the pragmatic and hardheaded realities of the current economic and political climate".
8.53 p.m.
Baroness David: My Lords, we are very glad that the Gulbenkian Foundation decided to commission this report and that the noble Lord, Lord Beaumont, was so quick off the mark and put down this Unstarred Question on the report so very soon after its publication. There was an urgent need for this review. The introduction tells us how it was sparked off by a discussion in 1977 between Peter Brinson of the Foundation and Peter Newsom of ILEA; a discussion on the public debate that had been opened on education, and in particular because of references to the core curriculum and a recurrent emphasis on the three Rs. They were worried that these references seemed to exclude the arts.
The committee was set up at the end of 1978, and as it worked the economic situation imposed further economies on local authorities. The School Curriculum issued in March 1981 showed a concern that schools should respond to the changing social and economic circumstances. It gave a list of six broad educational aims with which one could not possibly disagree, but apart from the sixth, to help pupils to appreciate human achievements and aspirations, the arts got no mention at all. This was typical of other statements being made.
The continuing cuts in education expenditure do bear heavily on arts subjects, as some materials, in spite of what the noble Lord, Lord Beaumont, has said, are cheap, but some are very expensive, like musical instruments, and some authorities seem to
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look on art and music as mere frills. These cuts are having effects on the quality and range of education as well as on its provision. The introduction to the report gives plenty of evidence for this, and HMI's report on The Effects of Local Authority Expenditure Policies on the Educational Service in England 1981, out only today—and I am grateful for a copy landing on my desk at lunchtime—provides plenty more evidence of this.
"In over one-third of authorities",
the HMI report says,
"and especially in the shire counties, inspectors report changes in the curriculum for secondary school pupils in the form of reduction in the range of courses offered".
Music, and particularly instrumental music, is mentioned again and again. Too few appropriately qualified staff are mentioned; most frequently in craft design and technology, history, art and design. Sometimes craft and design have vanished altogether from the curriculum.
The Gulbenkian Report is to be welcomed as it aims to redress the balance. It stresses the great importance of the arts in everyone's school life, and it is high time that the balance was redressed.
I think in the concern at the huge numbers of the young unemployed there has been a great deal said about the schools needing to prepare young people for the world of work and to give them qualifications that will satisfy possible employers. As the report says,
"In the secondary schools a premium is often placed on exam courses and academic qualifications. We believe this emphasis to be misplaced".
And so do I, and I believe from what he said that the noble Lord, Lord Beaumont, would agree with that. A little later it says:
"Literacy and numeracy are an important part of education. They should not be mistaken for it".
HMIs in their Aspects of Secondary Education 1979 said exactly the same thing. They went on to say that both literacy and numeracy seemed to improve when taught as part of a broad curriculum.
This report is pleading for that broader curriculum. It is attempting to have the arts accepted as an integral part of the whole.
"The arts should permeate the whole curriculum",
it says. It is odd that over 20 years ago, when things were pretty good compared with now, at a conference called A Consideration of Humanity, Technology and Education, Sir Herbert Read deplored the increasing specialisation of education. He said:
"In our own time that divisive process has been elaborated and legalised into a rigid structure of vocational education. The ideal of education is no longer the development of the whole man".
Summing up at the end of that conference, H. J. Blackham said:
"We believe that neither the contribution of the arts to general education, nor the place of general education in the national life, has yet been properly recognised, and we want to form a body of enlightened opinion drawn from all walks of life which will bring general public opinion to share our conviction, and to see our vision of the role of the arts in general education and the role of general education in the life of our industrial mass society".
This, say the authors of the report, is a motto for them.
I was talking to a retired HMI for arts at the week-end and he had seen this report. He said that what it

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had in it is what he had been trying to preach and get over all the years he had been working. There is perhaps nothing very new in the report. Maybe it is a little disappointing for that reason, but if messages do not get received the only thing is to go on sending them until at last they penetrate, and we hope that the message in this report will penetrate.
The report makes a strong plea for prevailing attitudes to the arts to be changed:
"Many administrators, head teachers, parents, teachers and pupils have failed to see the value of the arts; in many cases we believe because of their own indifferent experiences of them at school. This pattern of indifference must be broken".
The report stresses that it is dealing with the value of the arts in all schools for all children. This is very important: all children, not just those with special talents. It asks for better co-ordination and continuity in arts education. There is too little contact, it says, between teachers working in the different arts and little co-ordination between the three main sectors of education: primary, secondary, and tertiary.
Among the valuable and excellent practical suggestions in Chapter 4 on provision in the primary schools—which both the authors of the report and HMI found disappointing, teachers' expectations of their pupils often being too low—is one that in the record and profile that is passed on to the secondary schools there should be a section on the pupil's artistic abilities and achievemnts, so there would be a greater understanding of the whole child by those who would be taking him on in the next phase—a point which the noble Lord, Lord Beaumont, also picked on. I am glad the Schools Council is sponsoring a research project on pupil profiles, and I hope that that will appear before long because it seems to me to be the way forward.
I hope the Government will pay heed to the comments on teachers and teacher training. There is no doubt that there is not enough emphasis on art training in the training colleges. I shall rashly and tentatively comment on what is taught—as the noble Lord, Lord Elton, has special knowledge of this subject, I would say I am perhaps being somewhat rash. I suspect there is too much theory and not enough practice. I was glad to see that there is a recommendation that the DES should undertake a survey to examine what now remains of the provision for initial training of teachers in the arts, paying particular attention to the balance between and the relationship of practical and theoretical courses. Students should get out much more into the schools. The HMI asked for more specialist teachers in primary schools, and I wish to urge that. It is unlikely, indeed probably impossible, for the class teacher to be equally capable of covering the three Rs, physical education and all the possible arts—music, dance, drama, drawing, painting and so on. Well trained, practically trained specialist teachers are needed, peripatetic some of them may well have to be. As in all schools, I guess the attitude and influence of the head is vital. It would be nice, as is suggested in the report, if heads of art, drama or music departments were sometimes appointed as heads of schools; they might manage to get the prevailing atmosphere changed.
I wish to comment on paragraphs 75 and 76–75 on
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"Availability: a resource bank"; and 76 on "Accessibility; the ethos of the schools". Paragraph 75 says that the stimuli for creative activity are plentiful and that the school needs to make them available. It suggests stones, fossils, bones, owl pellets, claws, feathers, coral, crab cases, driftwood, ball bearings, cogs, scrap metal and so on. Excellent, and they are all for free; they can be found and it is very good for the pupils to have to go out and find them.
Paragraph 76 says how important display is, but I do not think it puts quite enough emphasis on that. It encourages the display of children's work but, in my view, does not make enough of the whole school environment. If the aim of education in the visual arts is to ensure the development of visual awareness and the appreciation of colour, shape, form, line, texture, pattern, design and craftsmanship—in one word, aesthetics—of all pupils, one of the ways to achieve that is through the appearance of the school environment, which should be colourful and made attractive and interesting by the careful display of exhibits of various kinds, such as plants and other natural material, pictures, sculpture, mural decorations, wood, metal or clay objects, embroideries and fabric hangings as well as found objects, such as I have quoted, of particular interest, and through a rich, varied and ever-changing background in the work areas to provide inspiration for practical work. The ever-changing matters; people do not pay attention to something they see every day. It needs to be constantly altering.
In encouraging appreciation and interest in the arts through the environment of the school, I wonder how many authorities still have a picture fund whereby the art adviser had a sum he could spend every year on pictures, usually by living artists, partly because they were cheaper and partly of course as an encouragement to living artists. Such pictures or sculptures, or whatever they might be, made up a collection from which schools could borrow and have an always changing display on their walls. I believe that was valuable. In the days when I visited many schools as a member of an education committee, I always thought I could tell the sort of school I was visiting by the impression I got from the entrance and corridors; a good visual impact usually meant a good and lively school.
I turn to what is, to me, a most important chapter, Chapter 7 which deals with special needs. The writers of the report choose four groups for whom they think special measures may be necessary if the arts are to make their full contribution to the education of those children. They are the specially gifted, the disabled, those with learning difficulties and those who belong to racial minorities. Where highly talented pupils are concerned—those who show special ability in any art form and who may wish to go on to further education and/or training—there will be a need to go more deeply into aesthetics and craftsmanship. It is often found that teachers enjoy teaching the more gifted pupils and are prepared to go to great lengths to help them to become sensitive, creative people who can produce work of real quality. But outside help may also be necessary.
The Gulbenkian Foundation has produced reports on Going on the Stage, Training Musicians and Dance Education, and we are grateful for those. And this is

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the point at which to speak of the National Youth Orchestra, the National Youth Theatre and the National Festival of Youth Dance. All need support because our most gifted children in the arts need stimulation by meeting others of like ability. Are the Government committed to that support? The orchestra, the theatre and the festival will flourish only in so far as they receive encouragement from the department, Ministers, local authorities and devoted advisers and teachers who are willing often to give up their Saturdays to teaching and encouraging.
I hope very much that the Minister can tell us that the Secretary of State and the department will not let all those excellent things ebb away. A lead must come from the top. As a nation, I suspect we have been readier to look for and help the exceptionally gifted in sport. I hope we can be as generous to those gifted in the arts. Consider what, in the end, the nation gains; our international reputation for productions of opera, our Royal Ballet and the National Shakespeare Company, which have worldwide tours and successes and are a tremendous tourist attaction, too.
Lord Inglewood: My Lords, would the noble Baroness agree that our cathedral choirs and the wonderful tradition particularly of boys singing—and they are trained in special private schools—is something which is the envy of Europe? She did not mention that when speaking of the opera. They started long before the Arts Council was ever heard of.
Baroness David: I agree, my Lords, that our choirs, and some of the cathedral choirs—I appreciate, of course, that they are trained in special schools—are of tremendous benefit to the nation, and I know that the choirs of St. John's School, Cambridge, and King's Choir School have travelled all over the world to sing. I think that music has to have special attention; I would grant that.
I have spoken about the first group—the gifted. I now turn to the second group, the disabled, and I am glad to say that, with Warnock, the authors of the report think that these children should be integrated in the ordinary schools. I use the term "disabled" to cover many types of children; not only the physically disabled, and those in wheelchairs, who need special provision, but also disturbed children, for whom music and painting can perform miracles. The report gives examples, touching examples I thought, of how difficult, unresponsive children had been brought out of their shells and into active participation in the group by acting, and how their truancy from school had consequently been stopped.
When I was in Belfast six weeks or so ago I was very moved when I went to see a YOP drama course. There were 17- and 18-year olds taking part. Some of them had been delinquent, and of course they were all unemployed. They were practising, in fairly tatty surroundings, for a street drama. But they were so lively, they had such good teachers, and they were so unselfconscious that it impressed upon me how good drama can be for those children who are perhaps not getting on well in school in the ordinary way, as we think of it. I wondered whether perhaps unemployed actors could help with drama courses, particularly with the YOP courses; though that is not exactly what we are talking about tonight.
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It is difficult to draw a line between the disturbed and those with learning difficulties, who are the third group mentioned in Chapter 7. Both groups can be helped wonderfully by teachers in the arts departments. It is, I believe, becoming more and more certain that music can help the dyslexic and those with speech difficulties. A number of very interesting experiments are going on, and there is no doubt that the inarticulate can become very expressive with paint.
The fourth group are those who belong to racial minorities. There are concentrations of over 20 per cent. of immigrant children in a number of local education authorities, and sometimes as many as 50 per cent., or even more. Yet—and I quote from a paper prepared by the Commission for Racial Equality:
"The presence in such numbers of children from ethnic minorities, who very often had extreme contrasting culture, was not considered to warrant any consideration with regard to general curriculum development in the schools. Their needs were seen merely in terms of (i) intense language exposure, and (ii) behavioural correction under the guise of educational subnormality"
The report—The Arts in Schools—emphasises not only how important it is for appropriate cultural provision to be made for these pupils, but also how important it is for all students and all staff in our schools to have that provision and to understand the cultures of the racial minorities, and thereby bridge gaps. Out of that understanding of another culture can come a richness and diversity of artistic resources and a broadening of opportunity. In schools and in curricula where the arts are not highly regarded, the art forms of non-Europeans are likely to suffer most. But what riches there are if only advantage is taken of them! Many schools are doing very well. I visited a school in North London 10 days ago, and in one class I looked in on a dozen or so children, mostly black, were having a lovely time with a steel band. They certainly could have done with more space, but they were really enjoying themselves and making a gorgeous rhythmic sound.
So I hope that when the Minister replies we shall hear that the special needs of the racial minorities are receiving particular attention where education in the arts is concerned, and that the richness and diversity of the many cultures are going to be made use of. I hope, too, that the report can be drawn to the attention of the Youth Service Review, which is now taking place, and that the review can concentrate on it a little, and say what it is going to do about the arts.
Above all, we want to know whether the Secretary of State and the department are going to respond positively to the report and give it real support, not merely lip service. Are they going to listen to the HMI Report, which is out today, and which is asking for a great deal more for the arts, particularly for music. Are the arts to have their proper place in the curriculum and an equal status with other major areas? Most particularly, are resources going to be made available?—because without a proper allocation of resources the commitment will mean absolutely nothing.
9.13 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Elton): My Lords, this is indeed an important report, and a timely one. It is published as local education authorities and schools in England and Wales are reviewing their

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policies for the school curriculum. I believe that it will be widely read and will influence thinking, and that it will do so deservedly. The same may also be true of this debate, and I am sure there will be many outside this House, as well as in it, who will be grateful to the noble Lord, Lord Beaumont of Whitley, for introducing it. I would join with him in sending my sympathetic good wishes to my noble friend Lord Eccles, whose contribution would have done so much to increase the value of this occasion.
The report itself makes a cogent case for a secure place for the arts in the school curriculum. This is reflected, as the noble Baroness has rightly said, in the report from the Inspectorate, which reached her desk and mine today. The point that the report was anxious to drive home—I am speaking now of the Inspectorate's report—was that schools and local education authorities have to plan sensibly for the curriculum as a whole in order to avoid reductions in important areas such as the arts. This is the message also of the White Paper, the discussion paper, The School Curriculum, and the Government's Circular 6/81, which was issued last October.
The noble Baroness raised a number of points, to some of which I shall return. One of them which caught my ear, perhaps out of context, appeared to be that she felt that students in teacher-training colleges should get out more into the schools. My recollection of teaching in a teacher-training college is that it would be difficult for them to do so for the reasons of the administration of the courses and the dispersal of the supervising staff, but that a very great deal of their time certainly was, and I believe still is, spent in the schools. It may just be that the number of students studying the subjects in which the noble Baroness is interested is relatively small and that she does not encounter them, perhaps, as frequently as might otherwise be the case.
Returning to the report which is the subject of this debate, many noble Lords will have been impressed, as was I, by the quality of the argument, particularly in the early chapters of the report, which deal with the contribution of the arts in education and with the nature of creativity. There is room for debate about the weight which might be attached to particular considerations in this as in other areas of the curriculum, but for my part I believe the report makes a fundamental point when it explains that the committee of inquiry are not just pressing for the arts for their own sake—and I quote:
"Our concern is broader—with the development of those basic human qualities and capabilities, including the power of creative insight and activity and a concern with relationships and questions of value, which give rise to the arts in the first place".
In other words, I agree, as do the Government, that literacy and numeracy are not the only constituents of a proper and full education.
The school curriculum is first and foremost the responsibility of local education authorities and schools themselves; the Government cannot and, indeed, should not dictate what they should do. However, we have issued guidance for England and Wales in The School Curriculum, to which I have already referred, which was published last year. This makes specific reference to the need for subjects like art, music and drama to permit pupils to avail themselves of opportunities for enriching their personal experience; it identifies aesthetic subjects
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as an essential part of the primary school curriculum; and it makes it quite clear that pupils should retain opportunities for aesthetic activity up to the end of their compulsory schooling.
I believe that the authors of the Gulbenkian Report are wrong—and I think that the noble Lord, Lord Beaumont of Whitley, agrees with me in this—in concluding that the absence of detailed discussion of the arts in the Government's guidance is an indication of indifference on the Government's part, or that it will be taken as such by local education authorities and schools. But lest there be any doubt, let me make it quite clear now that the Government fully accept the case that the arts are not merely a desirable but an essential component of the education offered in schools. This means not only fostering the talents of the artistically gifted, important as that is, but providing opportunities for all pupils—and the noble Baroness I think emphasised this—at appropriate stages of their school careers, to participate in artistic activity and to learn about the arts.
There are, of course, schools and local education authorities—and they have been mentioned this evening—where the arts already play a prominent role in curriculum thinking and planning, and others which enjoy a high reputation in particular arts subjects. The report gives examples of good practice, and it also tackles squarely the obstacles to be overcome before such practice can be extended more widely.
In the primary schools, it rightly draws attention to the findings of Her Majesty's Inspectors that a broader curriculum need not be at the expense of achievement in the basic skills of reading, writing and mathematics. Quite the contrary: the evidence suggests that children do better in these skills when they can be practised and extended through a wider range of work.
Talking about performance, the noble Lord, Lord Beaumont, was kind enough to give notice to somebody of a question and that notice sufficed for the occasion. I can say in reply that the Assessment of Performance Unit of the Department of Education and Science did indeed have an exploratory group on the assessment of aesthetic development. This group completed its work and submitted a report last year. It is now being considered by the unit; and the report I understand makes recommendations for the assessment of children's work in the arts and sets out the group's model for assessment, which they consider could be applied to all arts subjects. No decisions have yet been taken on publication or on the case that the report makes for assessment in this field because it is still being considered. As to the particular exploratory group, it completed its work and for that reason it has closed down.
Many class teachers lack confidence in their own ability to teach effectively in the creative subjects. The same is very often true in science, which has also been neglected in many primary schools. The report's recommendations for the appointment of teacher leaders, co-ordinators or consultants and for greater encouragement and support for teachers are similar to methods already being used to improve the teaching of science. Her Majesty's Inspectorate's report Primary Education in England called for greater use of teacher consultants in primary schools. We hope, therefore, that teachers and those involved in primary schools will

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talk through these conclusions, and consider how far they are practicable in their own areas and their own schools. There is a limit to the number of teacher consultants that can be appointed and also the size of school in which they are appropriate. We cannot expect change to occur overnight. But I believe that close consideration or this proposal will prove to be fruitful.
At secondary school level, the report's authors make a number of interesting suggestions, which again need to be talked through. I believe they are right to draw attention to the fact that, if authorities and schools adopt a piecemeal approach to coping with the effects of falling schools rolls and of expenditure reductions, the arts are vulnerable. The Government's policy is designed to encourage them to plan the curriculum as a whole, so as to ensure that pupils are not deprived of opportunities in all the main areas of experience.
Many teachers, as the report points out, do not necessarily have the knowledge or experience to participate confidently in curriculum planning and policy-making beyond their own subject specialisms. It is important that they whould see this as part of their professional responsibility. Everybody knows his own subject; you have to become more senior before you are involved in time-tabling subjects other than your own, and relatively appreciably more senior before you recognise the effect of balance between the subjects and the way that balance is affected by your decisions. The planning of a curriculum is a specialised pursuit and it is important that teachers should see this as part of their professional responsibility. Whatever support the Government and local authorities may give—and their contribution is clearly important—the strength of the arts in education depends on the ability of heads of schools and their staff in individual schools to develop an ethos within which they can flourish, and to arrange timetables and the allocation of resources in such a way as to encourage effective teaching.
What a wealth of resources the noble Baroness read out. Whether the school in question was in a belfry or on the beach, I could not discover; but there was a limitless supply of materials; and the world is made up of arts material for those who know how to use them, Picasso was perhaps the first to show. But one must not fall into the trap of thinking that because a subject deserves curricular time, it can displace others which also deserve it. The school timetable is limited and the time allocation between subjects has to be a compromise. The point is that the compromise should be intelligent and suited to the needs of each pupil.
I was particularly interested to read the report's views on the need for co-operation in matters of policy among specialists in the different art forms, and its rather brief reference to what it calls "third sessions", by which it means the important role of voluntary extra-curricular activities in promoting interest in the arts. These are important matters, not often discussed in this context. The view of teachers on them will be of great interest. I hope this report will be widely discussed among teachers and not only teachers whose primary or only interest is in teaching art.
The authors of the report have made in all 32 recommendations—too many for me to deal with in detail this evening. Many are rightly directed at local education authorities, but I wonder if I may pick out
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one or two where the Government are playing, or can play, a part. I am pleased to see, for example, the report's support for the use of profile reports in schools. I do not see developments in this field as being restricted to the arts. I see a strong case for some form of pupil profile, or record of achievement, for all school-leavers and probably in all subjects. Such records are, in our view, potentially useful, not only as an aid to selection for employment or further and higher education, but to provide an incentive for young people in their later years of compulsory education, and as a means of recognising achievements and qualities which cannot be assessed in formal examinations. The noble Baroness and other noble Lords emphasised earlier tonight that an examination can be a very useful framework; it can also be a very dangerous straitjacket. Therefore this is an area of considerable importance.
What would we see forming a part of records of achievement? They might include evidence of educational attainment, and that by no means need be only examination achievements. I think it important that some reference be made to an individual's level of ability in basic skills, at least of numeracy and communication skills. But there would be scope for evidence on a broader front, where this was thought appropriate by the school or individual concerned. They should also include references to other achievements, whether or not these took place in school or in the wider community. And they should reflect an individual's personal qualities: punctuality, enthusiasm, imagination, sociability. We could all add to the list of qualities which we would find it helpful to know about.
It is in that kind of document that the arts could figure. It is clear to me that there would be ample scope here for schools and pupils to give free range to a record of their achievements and interests in the arts and this could extend to appreciation as well as to performance. I believe that it is important to tutor the eye as well as the hand in the arts.
The report asks for a full investigation. There are already useful initiatives being taken in various parts of the country by schools and LEAs. Some work is in hand in the Schools Council. I believe that more needs to be done before progress can be made on the wider scale which we would wish to see. The Government are already considering the way in which this might be tackled.
It is perhaps unfortunate that relatively little space is devoted to the enormous potential of the ethnic minority arts in our midst for enriching the experience of all children. I was interested and sympathetic to the way that the noble Baroness, Lady David, devoted proportionately more of her speech to the subject than the report did to its own reflections.
The points are there, but I should like to see them given more prominence, so that all teachers who read this report—and I hope many will—will be prompted to consider whether their approach to the arts excludes whole areas of our mutual cultural heritage. This is, of course, a matter which bears on the whole curriculum, and many noble Lords will know that the question of education in a multiracial society is one to which the Government are giving careful consideration in the light of a number of recent reports. I remind your Lordships of the Swan Report, the

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Home Affairs Committee's report on Racial Disadvantage, the Scarman Report, and the Report of the Education, Science and Arts Committee. There may be here a whole untapped well of talent. As the noble Earl, Lord Gosford, said in a most interesting contribution, the arts provide a channel for communication at a depth not always reached by those who articulate and express themselves in the more conventional and examinable forms.
An especially interesting section of the report is that which deals with practising artists and education. No one would oppose the suggestion that there should be co-operation between arts funding bodies and education authorities, and that contacts between children and artists should be fostered—often with surprising result. There is already a good deal of commitment and co-operation on both sides, between arts bodies and the education service. Improving co-operation is not simply a question of the level of resources, but of ensuring that they are used sensibly and to maximum effect.
On one particular point, the examples of good practice cited in the report concentrate mainly on the performing arts in schools. Although the report does not devote a great deal of attention to the contribution which museums and galleries can make to the teaching, the understanding, the practice and the love of art, I am sure noble Lords would agree that we should not overlook this aspect. I regret that the noble Lord, Lord Donaldson, is not present to contribute his great experience in this field to this debate.
The museums and galleries of this country are the repositories of many of our national artistic treasures and a source of pride and joy to us all. But these institutions are not static, and they are not passive. Not only do their collections expand but their staff devote their energy and skill to interesting displays, to stimulating programmes of special exhibitions and to the production of catalogues, brochures and written material of all kinds. Above all, in the context of this debate, they devote themselves not only to informing and educating us all in the broad sense of that term but also to serving the schools. I should like to see more made of that.
Baroness David: My Lords, I wonder whether the noble Lord will allow me to ask one question which I had intended to raise earlier. This concerns the slides from the Victoria and Albert Museum. There was trouble and it was thought that the whole service was going to stop. I am not quite sure what the latest news is. After what the noble Lord has said about museums, it would be very interesting if we could hear what is happening.
Lord Elton: My Lords, I will endeavour to bring that into my closing remarks. I began that passage with a reference to the performing arts and that reminds me of the other point put by the noble Lord, Lord Beaumont, of which he gave some advanced warning. I think I can reassure him on this by saying that some 45 institutions offer drama as an option within initial teacher training. Provisional estimates for the 1981 admissions suggest that about 300 students entered either postgraduate or undergraduate initial teacher
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training courses with drama as a secondary specialist subject. A further as yet unknown number are pursuing drama in the context of training for primary schools. Part-time or full-time in-service training courses in drama for teachers were offered in the current academic year at some 13 institutions with a total enrolment of over 150 students; so I think that the thing looks a great deal more healthy than perhaps the noble Lord feared.
Noble Lords might think it understandable that during this period when public expenditure and public service manpower must come under review, the museums and galleries education services were themselves to be looked at closely. I am confident, however, that wherever such scrutiny may take place the value of the services offered will certainly not be lost from view.
The final sections of the report are concerned with the contribution which can be made by the arts funding bodies, the media, the youth service and teacher training. I must say something about the Government's policy towards the youth service and the role of the voluntary youth organisations, because I believe the report paints an inaccurate national picture in Section 236 in describing the service as one suffering from neglect, expenditure cuts, dwindling support and a loss of adolescent participants.
The Government attach a high priority to the informal social education of young people, and therefore to the youth service. Indeed, even during this period of financial restraint we have taken the view that expenditure on the youth service should be maintained, and have taken steps to help local authorities to do so. This is reflected in the recent rate support grant settlements. The grants made centrally by the Department of Education and Science towards the headquarters expenditure of the national voluntary youth organisations have also been maintained. I take this opportunity to pay tribute to the voluntary youth organisations who are making a significant and vital contribution towards the wellbeing of our young people in these difficult times. The report, I think, does a little less than justice here.
It is fair to say that the service has adapted significantly in recent years to meet present-day requirements. The balance of provision has swung heavily towards work with the older age groups, and particularly with the young unemployed. For example, I understand that the National Association of Youth Clubs alone has about 300,000 members aged 16-plus. To sum up, I do not accept, as the report implies, that the youth service is wasting away through neglect. We look forward to receiving the report of the review group on the youth service this summer and shall be giving careful consideration to their recommendations.
The report makes a particular recommendation that the National Youth Bureau should consider establishing a standing conference for the arts in the youth service. Although the National Youth Bureau receives substantial help from the Government, it is an independent body which reaches its own conclusions on which activities to support through its council and its executive committee. I cannot, therefore, answer for it or say how far the bureau would see an appropriate role for itself in supporting the arts. However, I can say that several national voluntary youth organisations already have well-established activities relating to the arts.

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In addition, many arts-orientated activities provided by the youth service are funded at local level.
I should like, in conclusion, to congratulate the noble Lord, Lord Beaumont of Whitley, for drawing the attention of this House to the report. Where the recommendations make claims for additional resources, progress may well be constrained by the overriding need to control public expenditure. But there is much in the report which is not dependent on increased expenditure by local education authorities, and I hope that they will give the recommendations addressed to them the very fullest consideration. For their part, the Government have noted those recommendations where they are called upon to take the lead, and will be considering these carefully in the context of their educational policies as a whole.
The noble Baroness hoped for an immediate commitment on numbers of specific issues. It is too early for that. It is, indeed, too early for a response to the report of the inspectorate, which we have only just received. But I can say that I am sure that in these considerations my colleagues in the Department of Education and Science will take note of the sage and worthy views expressed by noble Lords today. I will be writing to the noble Baroness about the slides, which fall within the purview of my honourable friend the Minister for the Arts and not directly of the Department of Education and Science.

  TAXIS: EXTERIOR ADVERTISING
  TAXIS: EXTERIOR ADVERTISING
  THE LAW REFORM COMMITTEE: REPORTS
  THE LAW REFORM COMMITTEE: REPORTS
  THE CRIMINAL LAW REVISION COMMITTEE: REPORTS
  THE CRIMINAL LAW REVISION COMMITTEE: REPORTS
  PRISON LIBRARIES: RULES ON TREATMENT
  PRISON LIBRARIES: RULES ON TREATMENT
  THE NEW UNIVERSITY OF ULSTER
  THE NEW UNIVERSITY OF ULSTER
  BRITISH ATLANTIC COMMITTEE: GRANT
  BRITISH ATLANTIC COMMITTEE: GRANT
  THE SINGLE HOMELESS
  THE SINGLE HOMELESS
  SUPPLEMENTARY BENEFIT 1979: TAKE-UP ESTIMATES
  SUPPLEMENTARY BENEFIT 1979: TAKE-UP ESTIMATES