Sitting of 10 May 1982

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  TRADE

    Exports
    Mr. Chapman asasked the Minister for Trade if he will give the change in value and volume in exports, and the movement in the visible balance of trade, over the last three years.
    The Minister for Trade (Mr. Peter Rees): In the three years ending 1980, which was the last year for which complete data are available, exports rose by 49 per cent. in value and 8 per cent. in volume. The visible balance of trade moved from a deficit of £2·3 billion to a surplus of £1·2 billion. With permission, I shall circulate the detailed figures in the Official Report.
    Mr. Chapman: I am grateful to my hon. and learned Friend for those figures. Does he agree that they are especially encouraging in view of the deep world

    Exports and the Visible Balance

    Balance of Payments Basis

    Exports

    Visible balance

    Value

    Percentage increase

    Volume Index

    Percentage increase

    Value increase

    £ million

    (year on year)

    1975 = 100

    (year on year)

    £ million

    1977

    31,728

    —

    118·4

    —

    -2,284

    —

    1978

    35,063

    +11

    121·5

    +2½

    -1,542

    +742

    1979

    40,687

    +16

    125·7

    +3½

    -3,449

    -1,907

    1980

    47,396

    +16

    128·0

    +2

    +1,185

    +4,634

    Special Steels (Exports)
    Mr. Hooleyasked the Minister for Trade what is the value of special steels exported from the United Kingdom to the United States of America in the first quarter of 1982.
    Mr. Peter Rees: This information is not yet available. In the last quarter of 1981 exports to the United States of tool steel, high-speed steel, and stainless steel bars and rods were valued at £1 million fob. Exports of stainless steel sheets, plates and strip were valued at nearly £3 million fob.
    Mr. Hooley: What representations have been made by the Government to the United States' Government about the impact of any restrictions on our export of special steels to the United States? Is the Minister aware that
    recession? Does he also agree that, with our increased competitiveness in world markets, as measured by recent output per man-hour trends, this augurs well for the future, particularly when the world recession ends and expansion takes place?
    Mr. Rees: I certainly agree that the figures demonstrate the enterprise of British business and emphasise the considerable increase in competitiveness over the past two or three years.
    Mr. John Smith: Is the Minister aware that the April report of the CBI predicts that non-oil exports will decline by 4 per cent. this year over the 1979 level, which is after three years of the present Government? The same report predicts an increase in those who are pessmistic about future export prospects. Is not the CBI's evidence a more accurate picture of what is happening to our overseas trade under this Government?
    Mr. Rees: The right hon. Gentleman describes it as a factual position. As he will readily appreciate, those are speculative figures which may well be falsified by events.
    Mr. Stokes: Does my hon. and learned Friend agree that we do not make enough of our great success in our export endeavour, which, I believe, is higher per head of the population than almost any other country? Can we not somehow use the lessons of this success to improve our share of trade in the home market?
    Mr. Rees: My hon. Friend is right to emphasise that Great Britain, at least by one test, is one of the most successful exporting nations in the world, whether it be measured by the proportion of the gross domestic product or by the proportion of exports per head of the population. As regards the internal market, I have no doubt that British industry will seek to improve its position, but my hon. Friend will appreciate that trade is a two-way operation.
    Following is the information:
    although the volume is small, the value is very high and that severe restrictions would have a damaging impact on the BSC?
    Mr. Rees: I am well aware of the importance of our special steels exports, particularly to the private steel making sector, although certain areas are a matter of concern for the British Steel Corporation. As the House will know, there is the possibility of action against exports of steel from the European Community. I can assure the House that the British Government have looked closely, so far as they have been able to do so, at the basis of these cases. Both the Government and the European Commission have made strong representations in Washington about the basis of these possible cases.

    Multi-fibre Arrangement
    Mr. Parkasked the Minister for Trade if he will report on the state of negotiations on the renewal of the bilateral agreements within the multi-fibre arrangement.
    Mr. Peter Rees: So far, the Commission has held only informal exploratory consultations with the supplying countries. Formal negotiations are scheduled to commence this week in Brussels.
    Mr. Park: Since any increased access to our markets by smaller supplying countries could be achieved only on the basis of cutbacks from the so-called dominant countries, how does the Minister justify starting negotiations with the dominant countries before he has successfully concluded the position with them to enable him to make concessions to the smaller countries?
    Mr. Rees: The whole House will know that the European Commission has been given a fairly strict mandate to negotiate bilateral agreements under the MFA and with the Mediterranean countries outside the arrangement. We have made it clear that we expect cutbacks of 10 per cent. from the dominant countries, perhaps compensated in certain cases by outward processing. Against that background, I feel sure that it will be possible for the Commission to negotiate satisfactory bilaterals, although we must wait until the autumn to hear the outcome.
    Mr. McNally: Is the Minister aware that some of our partners have been weak sisters in negotiating textile arrangements? Do we have a veto on the negotiations, and if we do will the Government use it if the result of the negotiations is not satisfactory to British textile interests?
    Mr. Rees: It is not for me to comment on the position of individual members of the Community. Each country has a slightly different perception of the interests of its textile industry. However, I have told the House previously that a common Community position was evolved which attracted the support of every member of the EEC. The Commission will have to negotiate within the confines of that position.
    Mr. Trippier: I thank my hon. and learned Friend for the concern that he has shown for the textile industry so far. In the run-up to the negotiation of the bilaterals, will he continue to listen to the strong case put to him by the British textile industry and disregard the representations of the British Consumers Association and the German Government?
    Mr. Rees: My hon. Friend's concern for the textile industry, particularly in North-East Lancashire, is well known to the House and I have had the privilege of meeting some of its representatives in his company. I assure him that the Community position has been clearly defined and, although it may not have attracted the universal support of the textile industry, I hope that there is grudging recognition that it could lead to a tougher MFA than the preceding arrangement. It is certainly the Government's intention that that should be the eventual outcome of the negotiations.
    Mr. Woolmer: Do the Government remain committed to the negotiation of a tough and effective MFA bilateral agreement, as the Minister has claimed in the past, and will the hon. and learned Gentleman confirm that the EEC
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    will withdraw from the MFA if the outcome of the negotiations is unsatisfactory? If so, why does he continually refuse to take immediate steps to prepare an alternative trading policy in case the negotiations fail?
    Mr. Rees: As I have reported to the House, it is the Community's intention to withdraw from the MFA if the bilaterals negotiated under it do not, in total, measure up to the guidelines agreed in Brussels and reported to the House. As regards the possibility of failure, it would be a little premature for the United Kingdom in isolation to devise an alternative regime for textiles. It would be an unnattractive position for the world if the EEC could not remain an adherent signatory of the MFA, and it is wrong to speculate too deeply at present on the consequences of failure. I hope that such speculation will prove to be unnecessary.
    Mr. Bowen Wells: Will my hon. and learned Friend bear in mind in the negotiations the interests of the consumer and of poorer countries which are trying to trade with us? The textile industry in this country needs a certain amount of protection, but it is essential for our general trade and for the benefit of our consumers that low-income countries are able to trade with us in low-price textiles.
    Mr. Rees: The Government are very conscious of the consumer interest, and a delicate balance has to be struck in the negotiations between the interests of the textile industry, which is important, of the consumers and, as my hon. Friend points out, of the developing nations. It was thought right in the mandate given to the Commission to cut back on some of the dominant suppliers, who are economically stronger, and perhaps to give a little more leeway to the developing nations.
    Mr. Spriggs: Will the Minister think again about the answers that he has given to my hon. Friends? A new MFA is of paramount importance to our textile industry. In view of the many thousands who have been made redundant and will never find work again in the industry, will the hon. and learned Gentleman look at the matter again and consider using the veto, if necessary, against any country that tries to foist on us an agreement that will cause further unemployment here?
    Mr. Rees: I reassure the house that the Government are conscious of the 150,000 jobs shed by the United Kingdom textile industry over the past 18 months. I also assure the hon. Gentleman that there is no need for a veto, because the decision of the EEC is that if successful bilaterals cannot be negotiated within the outline of the MFA, which the EEC has signed only on that tentative basis, the Community will withdraw. There is no need for a veto. I merely suggested to the hon. Member for Batley and Morley (Mr. Woolmer) that I preferred not to speculate on the consequences of failure, which would be damaging to consumers and the textile industry of this country.

    Manufactures (Balance of Trade)
    Mr. Marlowasked the Minister for Trade whether he will make a statement on trends in the balance of trade in manufactures with the European Economic Community.
    Mr. Squireasked the Minister for Trade whether he is satisfied with the existing balance of imports and exports with the European Economic Community.
    Mr. Peter Rees: The balance has fluctuated as our trade with the European Community has expanded. In 1980 the crude deficit fell to £1·8 billion from £3·1 billion the year before. This is not unsatisfactory in view of the large volume of trade involved and the large surplus on the United Kingdom's overall balance of payments.
    Mr. Marlow: Since our Community partners, instead of giving us wholehearted support over our problems with the Falklands, have now decided to put us on probation, will my hon. and learned Friend remind them that if they continue to wet their knickers at the first whiff of unvalidated Argentine propaganda, a lot of the trade benefit that they are getting from our membership of the Community will be put at risk?
    Mr. Rees: I do not think that it is necessary for me to comment on the sartorial position of the Community. My hon. Friend is showing too much concern. It was not intended that any decision should be taken on the extension of sanctions at the weekend meeting near Liege. The Government hope and expect that the EEC's common position on sanctions will be extended. My hon. Friend is right to point out that the United Kingdom market is important to the Continental European members of the Community, just as the European Continental market is important to our exporters.
    Mr. Squire: Will my hon. and learned Friend confirm that in the second part of last year we showed a specific increase in our manufactured exports to the EEC, which I am sure the whole House welcomes, and that to the extent that our manufacturing performance may still be less than we wish it is because of poor productivity in many of our manufacturing areas, which would only worsen our position in the unlikely event of our coming out of the Common Market?
    Mr. Rees: My hon. Friend is right to draw attention to the fact that the EEC is Britain's fastest growing export market. If I may inflict a statistic on the House, 39 per cent. of our exports of manufactures in 1980 went to the Continental European countries of the Community, campared with 29 per cent. in 1972. Echoing the point made by my hon. Friend, there is certainly scope for a further increase in British exports to the EEC and my Department has recently had an "Export to Europe" drive, which I hope will yield good results in the years to come.
    Mr. J. Enoch Powell: Does the hon. and learned Gentleman's Department keep separate trade statistics for Great Britain as opposed to the United Kingdom? If not, will he kindly apply the proper description to this country?
    Mr. Rees: The answer to the right hon. Gentleman's first question is "No". We shall certainly see if we can be more exact in our use of nomenclature.
    Sir Anthony Meyer: Does my hon. and learned Friend agree that my hon. Friend the Member for Northampton, North (Mr. Marlow), when he has finished providing The Sun with headlines, might reflect on the fact that this country requires markets for its exports and that it is for those who are constantly asserting the damage that results from our membership of the European Community to explain how a free trade area would resolve any of the problems that we face in our trade with the EEC or how, by sheltering behind a tariff wall, we could possibly find an outlet for our export industries?
    Mr. Rees: My hon. Friend is absolutely right to draw attention to the perils of protectionism, particularly if protectionism were applied by this country to the other countries of the European Community. I have emphasised that our fastest growing and, indeed, our largest, export market is Germany. One can reflect long and hard on the disadvantages to this country if we were on the outside of a free trade area of those dimensions.
    Mr. John Smith: The hon. and learned Gentleman will be aware of statements by Ministers representing other countries in the European Community to the effect that there should be a linking between the Community support for Britain over the Falkland Islands and other issues within the Community. Does he agree that it is wrong for such a linking to be made? Surely the Economic Community is supporting the United Kingdom because its stand is correct in terms of international law. Will the hon. and learned Gentleman undertake that there will be no linking of any kind with the basis of support that we receive from the Community?
    Mr. Rees: The right hon. Gentleman cannot have heard the contribution of the French Foreign Minister on "World at One" today when he demonstrated clearly that France sought no such linkage and gave us unstinted support in our defence of an important principle in the South Atlantic.

    British Airways
    Mr. Woolmerasked the Minister for Trade when he expects to receive the annual report of British Airways on its accounts for the year ended 31 March 1982.
    The Under-Secretary of State for Trade (Mr. Iain Sproat): During the summertime.
    Mr. Woolmer: Have not British Airways' subsidiary companies contributed £20 million profit a year to British Airways as well as an important cash flow throughout the financial year? As these are well-run and profitable nationalised concerns, will the Minister confirm a report in The Guardian on 29 April that there is no intention to sell off profitable subsidiaries such as British Airways Helicopters and International Air Radio?
    Mr. Sproat: No, Sir. I shall not confirm any report in The Guardian newspaper. I shall, however, tell the hon. Gentleman that if the board of British Airways decides that it wants to sell off the subsidiaries, that is its decision and we shall not stand in its way.
    Mr. Warren: In expressing my full confidence in the chairman of British Airways, may I ask what discussions my hon. Friend has had with him about deregulating air fares between this country and Europe? It now costs more in terms of seat pence per mile to fly economy to any capital city of Europe than to fly Concorde across the Atlantic.
    Mr. Sproat: I have had extensive discussions with Sir John King and other members of British Airways about the position in Western Europe. I assure my hon. Friend that it remains the policy of Her Majesty's Government to introduce much greater liberalisation into the European regime.
    Mr. Pavitt: Have the Minister's discussions with the chairman included any examination of the position

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    whereby first-class, senior officials of British Airways are now being made redundant? Is he taking any steps to make sure that their expertise is not lost to an important sector of industry?
    Mr. Sproat: That is mainly a matter for the board of British Airways. I am certain that the hon. Gentleman's point will be well taken by the board.
    Mr. Anthony Grant: Is my hon. Friend aware that the accounts of British Airways would be greatly improved and the service to the travelling public greatly enhanced if such activities as retail shops, building maintenance, aircraft cleaning and, above all, catering, were hived off to private enterprise—none of these services is at the moment profitable—leaving British Airways to conduct its proper business of running aircraft.
    Mr. Sproat: My hon. Friend makes an extremely interesting point which will be noted, I am sure, by the board of British Airways. Among the main objectives of Sir John King and his board are restoring British Airways to profit and giving a better service to the travelling public.
    Mr. Ioan Evans: Will the Minister recognise that most airlines are going through difficult times? Will he ensure that no Government pressure is applied on British Airways to break up and sell off various parts of the airline? Does he realise that we have already lost Laker Airways and that other airlines may go bankrupt if British Airways are not maintained?
    Mr. Sproat: I assure the hon. Gentleman and the House that there will be no improper pressure from the Government for British Airways to sell off subsidiaries. But, if that is the decision of the British Airways board, we shall not stand in its way. It is our wish to see British Airways profitable as soon as possible and privatised as soon as possible.
    Mr. Wilkinson: Will my hon. Friend assure the House that the Government will do nothing by their policies to impede progress by British Airways towards the profitability that we all seek? In this regard, will my hon. Friend facilitate the concentration of British Airways scheduled services at Heathrow airport, enabling them, especially, to transfer from Gatwick to Heathrow their scheduled services to the Iberian peninsula?
    Mr. Sproat: In regard to the latter part of my hon. Friend's question, I cannot give him any such assurance at this time. As he knows, complicated and intricate discussions are taking place. On the first part of his question, my hon. Friend can be certain that no Government in the history of this country will do less than this one will to stand in the way of British Airways returning to profitability.
    Mr. Woolmer: What did the Minister mean by saying that no "improper" pressure will be brought to bear on British Airways? Will he bring any pressure to bear on British Airways to sell off subsidiaries? Will he say whether the Price Waterhouse report proposed a major reconstruction of British Airways, whether it considered the possible injection of £600 million into British Airways and whether it considered the possible sale of subsidiaries? Is it not disgraceful that a British nationalised industry should be treated in such a cavalier fashion by the Minister, who will not even publish a major report of significance to a national institution?
    Mr. Sproat: On the first part of the hon. Gentleman's question, I plead guilty to tautology in talking about improper pressure. No pressure that I brought to bear would ever be improper. I need to bring no pressure on British Airways to restore itself to profitability. Sir John King has the airline on the right lines towards exactly that end.
    The Price Waterhouse report was commissioned by British Airways. It is for British Airways to decide whether they want to publish the report. British Airways have decided that they do not want to publish it. I shall not quarrel with that decision.

    Trade Statistics
    Mr. Lennox-Boydasked the Minister for Trade to what factors he attributes the state of the latest trade figures.
    Mr. Peter Rees: Export and import levels at the turn of the year were far higher than those reached in early 1981. This reflects the recovery in economic activity and the achievements of our exporters.
    Mr. Lennox-Boyd: Does my hon. and learned Friend agree that during the long, hard struggle of recent years, especially in regard to high levels of unemployment, many people have tended to overlook the great successes that we have enjoyed, particularly in trade? Does he agree that there are good prospects of improving still further on our current position from the firmer base that we now enjoy?
    Mr. Rees: The whole House, I am sure, agrees with my hon. Friend that the performance of British exporters has been notably successful in the last three years and that businesses, as a result, have maintained a higher level of employment. The House will have noticed the relish with which the Opposition Front Bench suggest that our export performance over the years to come might not be so successful, presumably because they are deeply conscious of the export figures achieved under the previous Administration.
    Mr. Hal Miller: Will my hon. and learned Friend accept that it will be difficult to improve upon our latest trade figures with Spain in motors cars and components, because of the adverse differential tariffs raised by the Spanish Government which prevent our exporters from achieving their full potential there? Will he look into a matter that has dragged on for far too long while it was hoped that Spain would one day accede to the Community? Action appears to be continually postponed.
    Mr. Rees: We do not look forward to an indefinite postponement of Spain's accession to the European Community. One of the benefits to the United Kingdom of Spain's accession will be the full opening up of the Spanish internal market.

    Falkland Islands
    Mr. Ginsburgasked the Minister for Trade what his Department is doing to ensure the long-term future of Anglo-Argentine trade after a successful outcome of the present situation in the Falkland Islands has been achieved; and if he will make a statement.
    Mr. Peter Rees: Action to promote the future development of Anglo-Argentine trade must await the settlement of the present conflict.
    Mr. Ginsburg: The Minister will be aware that major British trade and investment interests are at stake. May we have an assurance that when the diplomatic and military aspects of the problem have been settled steps will be taken to safeguard our legitimate and substantial commercial interests, which may have been put at risk?
    Mr. Rees: Neither I nor any Government spokesmen have concealed the fact that the present conflict cannot be costless. However, I intend to take every opportunity to secure a resumption of trade when relations are put on a normal and satisfactory footing.
    I must emphasise that the solution of this present unhappy conflict is prevented by the intransigence of the Argentine Government, not of her Majesty's Government.
    Mr. Dobson: Will the Minister confirm that the last British Minister to visit the Argentine to promote British exports was the right hon. Member for Hertfordshire, South (Mr. Parkinson), who is now a member of the War Cabinet?
    Mr. Rees: I am not entirely certain, but I think that the hon. Gentleman may be wrong. It may have been my right hon. Friend the Minister of Agriculture, Fisheries and Food. The conclusions to be drawn are matters for speculation.

    Textile and Clothing Imports
    Mr. Ron Lewisasked the Minister for Trade what progress has been made on the negotiations regarding textiles and clothing imports from the preferential countries.
    Mr. Peter Rees: Voluntary restraint arrangements have now been concluded with Egypt and Spain, and negotiations are continuing with the other preferential suppliers.
    Mr. Lewis: Does the Minister recognise that the quotas for trousers and jeans are consistently the most fully utilised and that, under MFA3, they will suffer from the higher growth rate of group 1 imports? Will the Minister ensure that pressure from some Mediterranean preferential countries for substantially increased quotas for trouser and jeans are decisively rejected?
    Mr. Rees: I cannot ensure that they will be decisively rejected. I assure the hon. Gentleman that whatever bilateral arrangements are concluded with the Mediterranean suppliers should be reconciled with those concluded with MFA participants and should be firmly comprised within the overall limits that have been set by the Council of Ministers of the European Community.
    Mr. Hal Miller: Will my hon. and learned Friend help the understanding of the House in this matter by commenting on the fact that, during the period of MFA2, whereas imports of clothing and textiles from developed countries have grown exceedingly, limits have been placed on the so-called developing countries and other less benefited suppliers? If so, would it not be more sensible either to impose overall control, if that is thought necessary, or to free a greater area of trade for competition than to seek continually to benefit the developed countries?
    Mr. Rees: As my hon. Friend will appreciate, the underlying principle of the MFA is to provide a period of
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    readjustment for the textile industries of the developed world, particularly the United Kingdom, to adjust to competition from low-cost countries. That is the theme of the MFA, and it is a theme that has commanded the respect of the House over the years.
    Mr. Woolmer: Bearing in mind the difficulty of ensuring restraint on imports, if no voluntary arrangements are reached with Portugal, Tunisia and Morocco, and those countries are informed by the EEC of the import levels that will be applied by the European Community, how will those levels be enforced?
    Mr. Rees: They will be enforced by the individual Governments of the member countries and the United Kingdom, in conformity with the levels that will be agreed through the Council of Ministers and notified to member countries by the European Commission.

    British Airways
    Mr. Jim Marshallasked the Minister for Trade if he expects British Airways to make a profit in the current financial year.
    Mr. Sproat: I expect British Airways to make a big improvement in their financial performance this year over the two previous years. I hope that they will make a profit.
    Mr. Marshall: With the reconstruction of British Airways into three operating divisions, will the Minister give an absolute assurance that no division will be sold off until the three individual divisions are all profitable?
    Mr. Sproat: I thought that I should be able to agree easily to that question by saying that it is not the present intention of Sir John King to sell off any of those three divisions piecemeal, but it is not dependent on when those individual profit centres become profitable. Privatisation of British Airways will go ahead as fast as possible in overall profit.
    Mr. Bill Walker: Does my hon. Friend agree that British Airways are unlikely to make a profit if they are plagued by idiotic strikes, such as that by the baggage handlers, and by practices such as flying empty aircraft from Belfast to Glasgow every evening? Would it not be better to take the example of the Scottish division, which shows the way forward to making a profit?
    Mr. Sproat: I am grateful to my hon. Friend for drawing to the attention of the House the satisfactory conclusion that has been reached in Scotland, where a predicted £6 million deficit has been turned into a predicted £1½ million profit. I hope that British Airways as a whole may benefit from that.
    Mr. John Smith: The Minister will be aware that there have been repeated press reports that the Government may write off £600 million of British Airways indebtedness to facilitate the floating of shares on the private market. Will he give a clear undertaking to the House that the Government will contemplate no such thing, which would be a gross fraud on the British taxpayer.
    Mr. Sproat: The right hon. Gentleman is always inviting me to comment on either press reports or hypotheses. That is a profitless hypothesis. I suggest that the right hon. Gentleman waits to see what happens. Privatisation cannot come soon enough for me, and I hope that the same is true for him.
    Sir William van Straubenzeeasked the Minister for Trade whether it is still his intention to sell shares in British Airways.
    Mr. Sproat: Yes, Sir.
    Sir William van Straubenzee: Does my hon. Friend realise that that is welcome news to a large number of my constituents who work for British Airways and who would much rather work for a private concern than for a nationalised one? Do I understand that previous exchanges across the Floor of the House mean that reorganisation within British Airways, which has been touched on, will not of itself hold up the Minister's medium and long-term intentions?
    Mr. Sproat: The formation of a number of new profit centres will enable the British Airways management to obtain a far tighter grip on British Airways, thus enabling an even quicker return to profitability. I thank my hon. Friend for his remarks in support of the Government's policy of privatising British Airways. It is our intention to make British Airways into a profitable private sector company that can be looked on with pride by its staff and shareholders and by members of the public.
    Mr. Hill: My hon. Friend, the chairman of British Airways, Sir John King, the board of British Airways and its staff should be congratulated on making what is a long overdue change to bring back continental and inter-continental departments in the routes that British Airways operate. It was a mistake in the past when BOAC and BEA were joined. Does my hon. Friend agree that British Airways should now be on a glide path to profitability? Will he help them in any way that he can so that they can re-equip with Boeing 757s and 767s as soon as possible?
    Mr. Sproat: I shall certainly do everything that I can to encourage British Airways to get back to profit as soon as possible. I welcome my hon. Friend's suport for the measures that Sir John King has recently taken to get a tight grip on the management and future profitability of British Airways. I especially welcome it coming from a former member of the old corporation.
    Mr. John Smith: Will the Minister make it crystal clear that there can be no question of the Government writing off British Airways' debt liabilities to facilitate the sale of shares? Will that option be in no way considered?
    Mr. Sproat: I do not know how often I must answer these questions from the right hon. Gentleman.
    Mr. Smith: Until the hon. Gentleman answers them.
    Mr. Sproat: The right hon. Gentleman must wait for details of the privatisation of British Airways. When the time comes, he will see what we hope to do, and we hope to have his support.
    Sir John Biggs-Davison: I welcome the Government's policy of privatisation, but will not prospective shareholders wish to know whether the craven refusal of British Airways's crews to stay overnight in Northern Ireland, which has cost thousands of pounds, has ended?
    Mr. Sproat: Investors will wish to know that nearer the time. They will be told nearer the time. The exact details of the Belfast flights are a matter for the board of British Airways.

    Laker Airways
    Mr. Dobsonasked the Minister for Trade what assessment has now been made of the total moneys owing to the creditors of Laker Airways at the time of its collapse.
    Mr. Dubsasked the Minister for Trade what assessment he has now made of the total sums owed to creditors of Laker Airways.
    The Minister for Consumer Affairs (Dr. Gerard Vaughan): I am informed that total liabilities are estimated at £260 million.
    Just under 17,000 people held scheduled tickets on Skytrain with a total value estimated at £3·85 million. Some of them were able to use their return coupons with other airlines. How many remain with unused coupons is not yet known.
    A further 139,000 people had paid in part or in full for a package holiday. Total liabilities are about £6 million, which can be met in full out of bonding arrangements and the air travel reserve fund.
    Mr. Dobson: In view of the fact that Ministers had drawn to their attention the shortcomings in the financial arrangements of Laker Airways before Christmas, that they decided to take no action, and that advertising by Laker continued after that time without any proper or improper pressure from Ministers to bring it to an end, will the Minister tell us what proportion of those massive liabilities the Government intend to bear, and will individual Ministers be held personally responsible?
    Dr. Vaughan: The answer to the latter part of the question is "Certainly not". The hon. Gentleman has not thought through the implications of his question, or he would not have asked it in that form.
    With the wisdom of hindsight, I believe that the Civil Aviation Authority used its powers sensibly. It would not have been right for that body to have stepped in earlier, because a hasty or premature intervention at that time could have brought matters to the very head to which they eventually came. The Government have no funds available for reimbursing the ticket holders.
    Mr. Dubs: Is it not clear that the sums owed by Laker Airways to travellers and to commercial concerns is much more than was admitted at the time of the company's collapse? Is the Minister really saying that he is satisfied that the Civil Aviation Authority effectively supervised the affairs of Laker Airways? Should not the whole matter be investigated and made public?
    Dr. Vaughan: The Government considered carefully whether they should appoint an inspector under section 165 of the Companies Act 1948. However, the CAA, the Bank of England and the receivers advised that they were not aware of anything that would fall within the provisions of that section. I do not believe that the collapse of a major airline, such as Laker, can of itself justify an inquiry of the sort suggested by the hon. Gentleman.
    Sir Peter Emery: In dealing with the sad collapse of Laker Airways, what immediate steps did the Government take to ensure that the routes operated by Laker were transferred to British companies? Could not the use of some of Laker's equipment have realised large sums of

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    money for the creditors and been of considerable use to the British aviation industry in ensuring that those routes did not fall into the hands of overseas airlines?
    Dr. Vaughan: I am glad that my hon. Friend has raised that matter. Great credit goes to other airlines for the way in which they assisted stranded passengers. The Los Angeles route has been taken over temporarily by British Caledonian. We are sympathetic to the position of those who hold scheduled air tickets which are not covered by the bonding and air travel reserve fund. As my hon. Friend will know, on 1 March the Government set up a review to consider any future provisions that might be made. We hope to have its report in June.
    Mr. William Hamilton: Does the Minister believe that Laker Airways was a good example of a private enterprise flying company? What assurance do we have that British Airways will not go the same way? Does the Prime Minister still believe that she is a Freddie Laker man?
    Dr. Vaughan: As the hon. Gentleman knows, we have great confidence in our private enterprises. The hon. Gentleman has no right to cast reflections on other private enterprises simply because one airline runs into economic difficulties.
    Mr. Bill Walker: Does my hon. Friend agree that very few major airlines make profits and that, if precipitate action were taken, few of those airlines, including British Airways, would be flying the North Atlantic?
    Dr. Vaughan: My hon. Friend knows that the number of airlines not making profits is not as large as he suggests. Some companies make profits. That emphasises what my hon. Friend the Under-Secretary of State said about ensuring that our airlines make profits as soon as possible.
    Mr. John Smith: Is the Minister aware that, bit by bit, more information is corning out about the way in which the affairs of Laker Airways were handled by the Government and the CAA in the months before the collapse? In view of the staggering figure of £260 million, which has been confirmed by the Minister today, is it not clear that there should be a full inquiry—judicial or otherwise—into the CAA's handling of the Laker affair and the handling of it by complacent Ministers at the Department of Trade?
    Dr. Vaughan: The right hon. Gentleman is trying very hard to make political points with the wisdom of hindsight. I wonder whether he would have had the same attitude some months ago when none of those matters were known. We must await the receiver's full report.
    Mr. Dobson: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's answer, I shall take the earliest opportunity to try to raise this matter on the Adjournment.

    Argentina
    Mr. Canavanasked the Minister for Trade whether he will make a statement about the efficacy of the operation of trade sanctions against Argentina.
    Mr. Peter Rees: While the efficacy of sanctions can never be precisely measured, it is already clear that the measures adopted by the European Community and others have put considerable pressure on the Argentine economy and undermined international confidence in it.
    Mr. Canavan: Will the Minister order an inquiry into how the merchant bankers Schroder Wagg secretly transferred their entire Argentine loan book from London to Zurich on the day before the Argentine invasion of the Falkland Islands? In view of the fact that a complete economic boycott would be far more effective than military action, why are the Government not bringing pressure to bear on unpatriotic, greedy, British bankers who are using their overseas subsidiaries to prop up the Argentine junta, or do the Tory Goverment prefer to send young men to their deaths than to offend their friends in the City?
    Mr. Rees: The hon. Gentleman speaks from a position of invincible prejudice. Even assuming that the facts outlined by him relating to a well-known City merchant bank are true, they obviously occurred before any measures were introduced by the Government.
    The Argentine Government have complained, within the terms of the GATT, about the effctiveness of the measures and the damage that they are likely to do to the Argentine economy in the long run. That suggests that the measures have been well designed and are achieving their objective.
    Mr. Eggar: Has my hon. and learned Friend any assessment of the value of trade that has taken place between the Soviet Union and Argentina since the commencement of hostilities?
    Mr. Rees: No. We would welcome any information that my hon. Friend can give on that matter.

  OVERSEAS DEVELOPMENT

    European Development Fund
    Mr. Spearingasked the Secretary of State for Foreign and Commonwealth Affairs if he is satified with the developmental quality of schemes initiated by the European development fund.
    The Minister for Overseas Development (Mr. Neil Marten): Not entirely. We have long been concerned about the design and implementation of the programmes of the European development fund. Partly owing to our efforts, their quality has improved in recent years. We shall continue to work to secure further improvements.
    Mr. Spearing: I am grateful to the Minister for his frank reply. Will he now look at some of the criticisms of the fund that have been made in the House? In particular, will he investigate why development investment in overseas territories enjoys the same criteria as that of the European Investment Bank inside Western Europe? Is that not an anomaly that should be looked at?
    Mr. Marten: I shall do as the hon. Gentleman suggests and look at it.
    Mr. Alton: What percentage of the total European budget accounts for the European development fund? What efforts will he make to achieve a greater coordination of effort between the various member States of the European Community in their approach to overseas aid and development?
    Mr. Marten: We constantly try to get better co-ordination at the Council of Ministers' meetings. I regret that I cannot give the hon. Gentleman the exact figures off-the-cuff.
    Sir Peter Emery: Will my right hon. Friend place in the Library an exact definition of the words in the question "developmental quality"?
    Mr. Marten: I shall write to my hon. Friend with a definition.

    Jamaica (Agricultural Products)
    Mr. Hooleyasked the Secretary of State for Foreign and Commonwealth Affairs what assistance is currently being given to Jamaica to improve the production and marketing of agricultural products.
    Mr. Marten: The Commonwealth Development Corporation is involved in development projects in forestry, coffee, the dairy industry and the flour milling industry. We are providing experts under the British technical co-operation programme for the Forestry Department and the Forest Industries Development Company.
    The Tropical Products Institute gives advice to both Government and non-Government agencies in Jamaica on many aspects of production and marketing.
    Mr. Hooley: That is a welcome and constructive reply. Is any particular help given to the Jamaican banana industry, which in recent years seems to have fallen far short of the quota that it could use in the European market?
    Mr. Marten: Throughout the Caribbean the banana industry is in considerable trouble. One of my senior officials was in Jamaica last week. If the Jamaican Government want any help, I am sure that they will have put that request to my official and I shall hear about it this week.
    Mr. Bowen Wells: Does my right hon. Friend agree that one of the major problems that Jamaica faces in marketing its products is the lack of managerial and administrative muscle? The principal cause of that is the lamentably low literacy rate on the island. Will my right hon. Friend consider assisting Jamaica by helping it to make primary schooling mandatory?
    Mr. Marten: Mandatory primary schooling must be a matter for the Jamaican Government.
    Mr. Pavitt: Will the Minister's decision to close an important sector of his Department dealing with land tenure and agricultural production and distribution, reducing the number of employees from 90 to 40, have any effect on the Government's assistance to Jamaica?
    Mr. Marten: No, I do not think that it will.

    Aid Programme
    Mr. Dubsasked the Secretary of State for Foreign and Commonwealth affairs what proportion of the United Kingdom's aid programme is devoted to supporting preventive health measures.
    Mr. Marten: We attach considerable importance to preventive health measures. Apart from specific health aid, we engage in agricultural, educational and engineering projects which help to promote good health, and in particular we are increasing our expenditure on water supply projects. I estimate that 8 to 10 per cent. of the total aid programme is spent on health, but it is not possible to say what proportion of this is for preventive measures.
    Mr. Dubs: Is there not an inconsistency between the fact that we are providing money to improve the health and well-being of people in the developing world and the fact that British tobacco companies are exporting their products to those countries under terms that are no longer acceptable in Britain? Are we not being hypocrites? Should not the Government seek to enforce the standard applying to British tobacco companies in Britain to their exports to those countries?
    Mr. Marten: Developing countries must set their own standards. It is not for us to set standards for them.
    Mr. Dorrell: Will my right hon. Friend confirm that one of the most effective and cheapest ways of ensuring an improvement in the standard of health of mothers and young children in developing countries is to ensure the proper availability of family planning services? Will my right hon. Friend also confirm that in future aid programmes that are approved by him he will try to ensure that proper precedence is given to population policy considerations?
    Mr. Marten: I agree with my hon. Friend. About two years ago I gave an instruction that the question of population should be looked at in relation to every project that was being considered.
    Mr. Deakins: Is there not a lack of liaison between the ODA and our multinational companies in the marketing of goods which might be prejudicial to the health of people in the developing world? Surely we do not want our aid efforts undermined by marketing practices which, with a little good will on both sides, could be prevented in the first place.
    Mr. Marten: I agree with the hon. Gentleman. This is primarily done by the World Health Organisation, on which we are represented.
    Mr. Hill: Is my right hon. Friend aware that there has been a serious outbreak of malaria in Sri Lanka in the past few months? Can he give the House any facts or figures on that and say what preventive steps he can take to help?
    Mr. Marten: No, I cannot. If the Sri Lanka Government bring it to our attention and ask for help, we shall certainly consider what we can do.
    Mr. McElhone: The Minister will be aware that grave concern was expressed last week at the World Health Organisation conference in Geneva regarding the high price and efficacy of drugs in Third world countries. Is it not high time that the Government set up an investigation into the dubious practices of some pharmaceutical companies?
    Mr. Marten: I was not aware of what happened at the World Health Organisation conference, because I was in the Caribbean. However, I shall certainly consider the hon. Gentleman's suggestion.

    European Development Fund
    Mr. Guy Barnettasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the discussions he has had with M. Pisani about the administration of the European development fund.
    Mr. Marten: In my discussions with M. Pisani on 16 March I was glad to find that he fully shares our concern

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    that improvements in the European development fund should be made wherever necessary to ensure that aid funds are used to the best effect.
    Mr. Barnett: Does the Minister agree that there is a long way to go in the light of the criticisms made by the Court of Auditors and by other bodies about the inefficiency of this scheme, its high administrative cost and the inappropriateness of much of the aid that is given? Will the Minister advise the House whether it is possible for the Government to transfer funds which they are currently making available to the European development fund to the Commonwealth fund for technical cooperation, which is efficiently run, cheaply administered and highly effective?
    Mr. Marten: I take note of the first part of the hon. Gentleman's question.
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    We are committed to our contribution to the European development fund for a specific number of years. We do not want to increase our contribution at the next round of talks on the EDF, because we are not happy with multilateral aid. We prefer bilateral aid.
    Mr. McNally: Does the Department monitor the contracts that are awarded country by country within the Community to ensure that there is an equitable distribution of orders among companies? If not, would it not be a good idea to do so?
    Mr. Marten: Yes, Sir. We keep an eye on the percentage of contracts awarded to British companies. It is primarily a matter of United Kingdom businesses getting orders. They used not to do that, but they are getting better at it. With help from our embassy, we hope to improve matters for Britain.

Falkland Islands
Mr. Tam Dalyell: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a matter of definite and urgent public importance, namely
"the need for Foreign Office Ministers to clarify the attitude of our European partners towards the Falkland Islands crisis."
It is exactly 20 years to the day since I was first elected to the House and this is the first occasion—
Mr. Speaker: Order. I remind the hon. Gentleman that the matter that he wishes to raise was known before 12 o'clock midday. Therefore, he should have given me notice that he would seek leave to move the Adjournment of the House.
Mr. Dalyell rose—
Mr. Speaker: Order. The hon. Gentleman must behave exactly like other hon. Members.
Mr. Dalyell: I was about to say that it was the first time in 20 years that I had not given you notice—
Mr. Speaker: Order. I fear that this is the first time in 20 years that the hon. Gentleman has been out of order. The House and the hon. Gentleman knew about this issue before 12 o'clock, and I cannot allow him to pursue his application.
Mr. Dalyell: Certain events have taken place since 12 o'clock. I refer to the broadcast by the Foreign Minister of France, M. Cheysson, on Radio 4, which throws into question the amount of support that we can expect from our European partners. The matter is important, not least because every ministerial statement, broadcast and television appearance mentions the importance of international support, yet that is in grave danger—
Mr. Speaker: Order. I have listened to the hon. Gentleman. If he has new information that has emerged since 12 o'clock midday that might have a serious effect, he is justified in seeking the leave of the House to move the Adjournment under Standing Order No. 9, but he must make out the case for urgency, and so on.
Mr. Dalyell: The case for urgency is that our European partners may question the legality of the whole Falkland Islands operation. They are mystified and obfuscated about whether we are at war. Only recently, after 12 o'clock—
Mr. Speaker: Order. I am sure that the hon. Gentleman will not seek to make the speech that he would make if I were to allow his application. I hope that he will tell us about the new information that was not available before 12 o'clock midday.
Mr. Dalyell: The new information is the mystification—
Mr. Speaker: Order. I am afraid that I disagree with the hon. Gentleman and believe that he could have given me notice of the matter that he wishes to raise. I am sorry, but I do not propose to allow him to continue.
Mr. David Ennals: On a point of order, Mr. Speaker. Unlike my hon. Friend the Member for West Lothian (Mr. Dalyell), I do not intend to seek to move the Adjournment of the House. Has the Foreign Secretary made any application to make a statement? Since the House met on Friday there have been many important developments of which hon. Members on both sides of the House should have been informed. I refer not only—
Mr. Speaker: Order. The answer is that I have not received any application to make a statement to the House. If I had received an application, there would have been a statement.
Mr. Dalyell: On a genuine point of order, Mr. Speaker. The Foreign Minister of France, one of our major partners, has made a broadcast since 12 o'clock, which we could not have anticipated—
Mr. Speaker: Order. I have already given a ruling on that point and I must stand by it. Like everyone else, I listened to the news at 1 o'clock but heard nothing that I could not have been told before 12 o'clock midday.

Orders of the Day

  Northern Ireland Bill
  Order for Second Reading read.
  3.35 pm
  The Secretary of State for Northern Ireland (Mr. James Prior): I have it in command from the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Northern Ireland Bill, has consented to place her Prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
  I beg to move, That the Bill be now read a Second time.
  Mr. Speaker: I have selected the amendment in the name of the right hon. Member for Brighton, Pavilion (Mr. Amery) and others.
  Mr. Prior: The White Paper debate of about two weeks ago could not have left anyone in any doubt that the search for an acceptable Government in Northern Ireland is difficult and contentious. I shall devote a good deal of my speech to seeking to deal with a number of the objections that have been raised in principle to the Bill. More detailed points can be dealt with by my hon. Friend the Minister at the end of the debate and in Committee.
  I recognise the sincerity with which my hon. Friends hold their views. I am very sorry to see my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) sitting on the Back Benches. As he knows, I have a high personal regard for him and I should much prefer to see him still sitting on the Front Bench. I say both to him and to those of my right hon. and hon. Friends who hold a different view that it is not within the capacity of any of us to be certain that the policy that we follow is right. Many solutions have been canvassed. Some have been tried and some have, regrettably, failed. A policy of continuing with direct rule does not offer a long-term answer. We either move to a position of total integration—the view of some of my right hon. and hon. Friends who have tabled the amendment—or we seek a gradual devolution of power, which is the course that the Government believe should be followed.
  As I said in the White Paper debate, direct rule is most people's second-best option. It could not prevent the upsurge in violence brought on by the hunger strike or the events of last autumn. Despite the most intense and dedicated efforts by the security forces, violence continues and tensions between the communities are quickly roused. What has given me much hope is that, despite all the provocations of last year, when it came to the crunch the vast majority on both sides of the community demonstrated once again their rejection of violence. This gives confidence to seek to make change now.
  I turn to my views on why I do not believe full integration is acceptable. It is not what any of the parties want or are committed to. They may not like the Government's proposals, but they would like full integration even less. I must tell the House that a return of power to local government—either to district councils or the creation of a new tier—would be bitterly opposed and offers no easier way out of the difficulties. This course—that is integration and a local government
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  structure—would deny the minority any proper opportunity of expressing their aspirations or assuming their share of responsibility. Direct rule is tolerated because it is regarded as a temporary arrangement. Full integration is an irrevocable step that would lead to great alienation and instability. Whatever labels one allocates to the people of Northern Ireland—and the vast majority wish to retain their connection with the United Kingdom—it will be possible only if we take fully into account the manner by which parts of the community identify with different policies and aspirations. Integration would simply not allow that to happen, and that is why a form of devolved Government is so necessary.
  Of all the criticisms of the Bill that have been made, the one that is most unacceptable is that we should not proceed because of the Falkland Islands crisis. It is said that political controversy is undesirable at times when Service men are at risk. We all agree to that. Many of those who say "Wait for another time" are those who wish us not to proceed at all. They realise, as I do, that to postpone now is for all practical purposes to kill off these proposals. It is perhaps salutary to remember that the same armed forces that now engage our attention in the Falkland Islands have, together with the RUC, suffered over 630 deaths since 1971. Northern Ireland has left the front pages, but the suffering continues. The Government do not share the view that it should be put on the back burner. Its problems are just as poignant and deserving of the attention of the House today as they have ever been.
  My right and hon. Friends in their amendment say that the Bill will do nothing to achieve the defeat of terrorism or revive the economy of the Province. Of course the introduction of an Assembly will not directly and immediately achieve either objective. It would be naive to suppose that it could. But that does not apply if we lift our eyes to a longer time span. Few will doubt that political stability would have a beneficial effect upon investment and therefore employment in the Province, and this is an essential element in economic revival. Simarly, few would doubt that the willingness of all parts of the community to associate with the institutions of law and order would, in time, improve the supply of information and strengthen active and positive resistance to terrorism.
  The Assembly is a necessary preliminary to political stability. The Bill does not deliver a better economy or better security, but without it we cannot proceed to later stages. Much patience and further negotiations will follow, and it will take time, but without the Assembly we cannot set out along this road. Of course, that makes for a different approach from that to the rest of the United Kingdom and as such raises constitutional issues and fears, but I ask the House most earnestly to consider the following proposition.
  Let us suppose that, for whatever reason, a sufficient measure of agreement were struck between the parties in Northern Ireland so that they were prepared to work together within an acceptable constitutional structure. Is there really any hon. Member here who would turn down that benefit simply to avoid restoring a constitutional anomaly which Northern Ireland enjoyed for 50 years? Are we really saying that the admitted difficulties that arise from devolution and the so-called West Lothian question are not a price worth paying for a degree of political cooperation and harmony in Northern Ireland?
  Is the constitutional structure of the United Kingdom so pure that we are not prepared to pay that price? Hon.

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  Members cannot evade this point. The Bill provides very clearly that devolution is not delivered until the agreement is reached. There is no blank cheque here. The parties must demonstrate their co-operation to the satisfaction of the House before devolution is given. The parties must honour that agreement or devolution is unwound. I can conceive of no better bargain, either for the House of for the United Kingdom.
  Mr. Tam Dalyell: In no curmudgeonly spirit, let alone a spirit of spite or may I ask the Secretary of State how he resolves the so-called West Lothian question?
  Mr. Prior: That is a matter that the House will need to consider when the time is ripe, which is still a good way off. If the time comes earlier, with devolution completed, that will be the right time for the House to consider the matter. However, we are a considerable way off that point.
  Mr. Dalyell: This is my last intervention. Is not that part of the trouble? In the Bills on Scotland and Wales, by a long process of self-education the House of Commons discovered that there was no answer to the so-called West Lothian question. Had there been an answer, it would have been found by able Ministers such as my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) and others, and by all the clever civil servants, such as Sir John Garlick and others, who set their minds to the question. If they could not find the answer at that time, how can anyone find it now?
  Mr. Prior: I repeat that the prize that we gain by a stable situation in Northern Ireland is worth a great deal of the difficulties, which I have admitted are there, in any arrangement that could allow hon. Members to vote on matters for which they have no responsibility in Northern Ireland or elsewhere in the United Kingdom. That matter was dealt with satisfactorily when Stormont was in operation. The situation would be no different in the future from what it was at that time.
  Mr. Julian Amery: My right hon. Friend said that the situation would be no different. It was part of the convention regulating Stormont that Ulster was under-represented because it would not interfere unduly in the affairs of the United Kingdom. Now that we have decided, rightly, to increase the representation of Ulster to the full extent that it deserves, surely my right hon. Friend's argument no longer applies.
  Mr. Prior: I can only tell the House what Mr. Airey Neave said during the passage of the Bill that created the 17 Members. He said that, regardless of any measures that might give greater devolution to Northern Ireland, the election of 17 Members from Northern Ireland was justified in its own right. That is the position that the Conservative Opposition stood by at the time and one that I expect Conservative Members to stand by in future. In any event, that would be a matter for the House to reach a judgment on at a later stage. It is probably the best way to proceed if hon. Members are not prepared to accept the arguments that I have used in reply to the hon. Member for West Lothian (Mr. Dalyell).
  Mr. Nick Budgen: Does my right hon. Friend agree that if Westminster had had general supervisory powers over Stormont, and if
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  Stormont had been in the nature of a large local government and not a devolved Government, perhaps our supervisory powers would have prevented the Catholic minority from losing confidence in Stormont?
  Mr. Prior: I do not believe that the manner in which Stormont was set up would have allowed that to happen. The fact that we shall now have those supervisory powers over whether we grant devolution to Northern Ireland, so we have to make up our minds whether there is cross-community support, is the guarantee that the House should require.
  Mr. Donald Stewart: Will the Secretary of State give way?
  Mr. Prior: I shall not give way. I want to move on.
  I accept that this is an important matter. I hope that hon. Members will not think that although we believe that the measure will help to provide stability in Northern Ireland—although it runs against other views that we hold on the constitution—we are not prepared to consider what we had for 50 years and what most people recognise as being the best way forward.
  Mr. J. Enoch Powell rose—
  Mr. Prior: This is the last time I shall give way, as I wish to move on.
  Mr. Powell: I am grateful to the right hon. Gentleman for giving way. I am sorry if, by rising, I have deprived any other hon. Member of the opportunity to intervene in the right hon. Gentleman's speech. I hope that I have not. What the right hon. Gentleman has said has not left clear—I hope that he can make it clear—the commitment of the Government this year, when the right hon. Gentleman receives the report of the Boundary Commission for Northern Ireland, to proceed under the statute to the provision of 17 seats for Northern Ireland, irrespective of what happens under or to the Bill.
  Mr. Prior: Of course I have made it clear. It has never been in doubt. There will be 17 seats for Northern Ireland. The only point that I have made is that at a much later date after devolution it will be for the House to consider whether 17 is right. As things stand, the 17 seats issue is a non-issue for the House. We proceed as we are doing. If there is doubt about the matter, I am grateful to the right hon. Gentleman for the opportunity to put it right It is a canard put up by Unionists from time to time to create ambiguity about Government's proposals. There never has been ambiguity on that matter.
  The general philosophy of our approach was set out in the White Paper and debated less than a fortnight ago. But the translation of the White Paper proposals into the language of a Bill highlights matters which are of special parliamentary concern, particularly in a Second Reading debate. Thus, before I turn to the detailed provisions of the Bill, the House may find it helpful if I sketch, first, the changes that the Bill seeks to bring about and how its provisions are designed to fit into the existing constitutional framework in Northern Ireland.
  The Bill's provisions reflect a radically different approach to the devolution of legislative and executive powers and to the formation of a Northern Ireland Administration, but it seeks to achieve its objectives, so far as possible, by using the constitutional frame-work established by the Northern Ireland Constitution Act 1973 and the Northern Ireland Act 1974. Three features of the

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  Constitution Act remain of particular importance. The first and most important is that Northern Ireland's position as a constituent part of the United Kingdom will remain as in section 1 of the Constitution Act. There will be no change. Let me say it once again: there can be no change in that status without the consent of a majority of the people of Northern Ireland voting in a border poll.
  Secondly, part III of the 1973 Act makes extensive provision for the prevention of religious and political discrimination in the Province. That, too, will remain unchanged by the Bill. I believe that fundamental human rights are well protected in Northern Ireland.
  The House will also recall that the Constitution Act places legislative responsibilities into three categories. They comprise "excepted" matters, which will remain permanently the responsibility of this Parliament—matters such as the Crown, foreign affairs, and defence. Then there are "reserved" matters. The responsibility for these would remain initially with Westminster, but it could be transferred to local control at some future date once a durable and stable system of government was established again in Northern Ireland. These chiefly concern various matters of law and order, which, for the time being, the Secretary of State will continue to administer. Lastly come the "transferred" matters, which comprise everything else. It is these, which are now the administrative responsibility of the seven—soon to become six—Northern Ireland departments, for which the Government envisage responsibility passing either in whole or in part to a devolved Administration.
  Having outlined the major points of continuity, I should like briefly to summarise the changes that the House, particularly in this Second Reading debate, may want to examine later in more detail. The major differences that we envisage from the Constitution Act are three. First, the Bill lays responsibility for making proposals for a devolved Administration squarely on the Assembly itself. Secondly, new provision is to be made to enable legislative and executive power to be devolved on the Assembly either by a complete return of all the matters in the transferred category or by devolving responsibilities in more than one stage. Thirdly, the Assembly is to have vital scrutinising and monitoring functions pending devolution. The Bill accordingly sets out the Assembly's functions before it assumes power.
  I should emphasise at this point that the reason why the Bill does not deal with relations with the Republic or with the Anglo-Irish Intergovernmental Council is that these are not matters on which any further legislation is required. The Anglo-Irish Intergovernmental Council is already established. There is already statutory provision in the 1973 Act enabling a Northern Ireland Administration to reach bilateral agreements with the Government of the Republic on transferred functions if they so wish. Hon. Members interested in the proposed interparliamentary body will appreciate that an elected Northern Ireland Assembly would provide an opportunity for a valuable Northern Ireland input to any such body on which this House and the Dail may agree. In that respect, the proposals are complementary and not alternatives to the Government's policy of maintaining sensible and, indeed, close arrangements for co-operation with the Republic.
  Mr. Michael McNair-Wilson: My right hon. Friend's answer to the right hon. Member for Down, South (Mr. Powell) was not as clear as he suggested. He
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  left a doubt, at least in my mind, about whether, if Northern Ireland had devolved Government, she would. get 17 hon. Members in the House. Will he make it clear that I have misunderstood him and that whatever happens there will be 17 hon. Members from Northern Ireland n the House?
  Mr. Prior: There will be 17 hon. Members from Northern Ireland in the House until the House decides otherwise. The only time that the House would be likely to decide otherwise is if it wished to look at the matter afresh pending full devolution. [HON. MEMBERS: "Ah!"] I cannot tell what a future House of Commons might do, but the Bill makes no difference to the fact that there will be 17 hon. Members representing Northern Ireland in the House. Nothing that we do changes that.
  Rev. Ian Paisley: If the right hon. Gentleman were to be fair to Northern Ireland he would give us 21 seats, as suggested by the convention report.
  Mr. Prior: Seventeen seats still leave Northern Ireland with bigger constituencies than it would have if it were anywhere else in the United Kingdom—certainly in Scotland. That is the point that Mr. Airey Neave made. That is another point that justifies 17 seats for Northern Ireland.
  I turn to the detailed provisions of the Bill. Clause 1, which gives effect to paragraphs 38 to 50 of the White Paper, goes to the heart of the whole Bill. It enables the Northern Ireland Assembly to submit proposals to the Secretary of State for the resumption of devolved Government in Northern Ireland, it allows for the devolution of only a few powers, if that is what the Assembly wishes, and it prescribes tests for the submission of devolution proposals. I shall deal with each of these points in turn.
  Under section 2 of the Northern Ireland Constitution Act 1973, devolution of legislative and executive functions could take place if it appeared to the Secretary of State that an Executive could be formed which was likely to be widely accepted throughout the community. The hope was to secure full devolution in one move, after agreement among the parties on the composition of what became known as a "power-sharing" Executive. But the provisions of clause 1 of the Bill are more flexible. As the Government explained in paragraphs 41 and 42 of the White Paper, our aim is to give the people of Northern Ireland themselves, through their elected representatives, the fullest opportunity to reach agreed arrangements for an acceptable form of government. There is therefore no requirement for a Northern Ireland Administration to be composed in a particular way, and the Government do not favour any particular scheme. The arrangements are to be settled by the Assembly.
  It is also because we wish to leave the greatest possible scope for local initiative that the Bill makes provision for devolution in stages. There are many issues, particularly in the economic sphere, on which representatives of local parties already make common cause, both in the European Parliament and elsewhere. Accordingly, there might be agreement on a scheme for partial devolution. Some hold that such a half-way house agreement is unlikely, but we believe that it is right to allow for that possibility. and provision is made in the clause for the Assembly to make such proposals.

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  Proposals put forward under subsection (1)(a) refer to the full devolution of legislative and Executive responsibility for the functions which were transferred under the 1973 arrangements. We do not propose that any matters which are "reserved" under the Constitution Act should, at this stage, be devolved. But, as we make clear in paragraph 54 of the White Paper, we shall consider whether any of the matters currently placed in the "reserved" category in the Constitution Act should eventually be removed to the "transferred" category. Any such consideration must depend on the establishment of a durable and stable system of government in Northern Ireland.
  I come now to the two alternative tests for the submission of devolution proposals to the Secretary of State. Under clause 1(4)(a), if 70 per cent. of the membership of the Assembly agree on devolution proposals, those proposals automatically go to the Secretary of State. It is important to be clear that 70 per cent. support for any proposals guarantees that they will be sent to the Secretary of State who will lay them before Parliament. At that point the proposals will be debated and the Government would have to give a clear view on whether those proposals met the essential criterion of acceptability to both sides of the community. If that criterion were met, the Government would ask Parliament to approve the Assembly's recommendations so that devolved government could be restored.
  Clause 1(4)(b) provides the alternative test whereby if a majority of the Assembly, but not 70 per cent., can agree on devolution proposals which in the Secretary of State's view commanded widespread acceptance throughout the community, the Secretary of State can ask for those proposals to be sent to him. Again, those proposals would be debated in Parliament if the Secretary of State was satisfied that, although falling short of 70 per cent., they did none the less enjoy cross-community support.
  Let me reiterate that the 70 per cent., guarantees parliamentary consideration. Once the Assembly's proposals have been submitted, it will be for Parliament, and Parliament alone, to decide whether powers should be devolved.
  I should also make it clear that the 70 per cent. relates solely to the Assembly's proposals for devolution. There have been misunderstandings—genuine in some quarters, wilful, I suspect, in others. Some people seem to think that, once devolution has taken place, all Assembly votes will be subject to a 70 per cent. hurdle. Others have said—most recently the deputy leader of the SDLP—that after devolution
  "all decisions taken on the floor of the Assembly … would be made by simple majority vote".
  I stress that there is nothing in the Bill that justifies or lends any colour to either of those different views. The truth is that the Bill lays down no limitations whatsoever on how the Assembly shall operate after devolution. That is a matter that will be wide open for the Assembly Members to consider together, and negotiate about, when they are drawing up proposals to be put to Parliament. Under clause 1(3) the Assembly's proposals for devolution could include recommendations on voting procedures—for example, on new key issues of confidence the Assembly may wish to propose that a specified majority should be required.
  Mr. Michael Brown: Will my right hon. Friend clarify the position about the referral to the House by the Secretary of State of a proposal for devolution that has been agreed by 70 per cent. in the Assembly? Can my right hon. Friend confirm that it is possible that the House might not agree to a proposal, even though it has the 70 per cent. approval of the Assembly? Can my right hon. Friend envisage such circumstances occurring and what a possible subject might be?
  Mr. Prior: That would be a matter for the House. The figure of 70 per cent. was struck because it should, under normal circumstances, ensure that there is cross-community support. All that it actually does is to ensure that there is a discussion by the House. It does no more nor less than that. I must make it absolutely clear that the House is not likely to grant a transfer of powers unless it is satisfied that there is cross-community support, otherwise there will not be the political stability that we are aiming to achieve. If I continue with one more sentence in my speech, that will become clear to my hon. Friend.
  Mr. Budgen rose—
  Mr. Prior: Perhaps my hon. Friend will allow me to continue, and I shall give way later if necessary.
  Once proposals have been submitted to the Secretary of State under these provisions, clause 1(5) and clause 2 will apply. The effect will be that Parliament will consider the proposals—and it is, of course, the Government's intention that they should have a full opportunity to do so before deciding whether to take further action. If the House's response is favourable, clause 2 provides for full or partial devolution by Order in Council, subject to affirmative resolution of Parliament. Parliament will, therefore, have two opportunities to consider matters before final decisions are taken.
  If the Assembly proceeds to partial devolution only, clause 2(1)(b) provides that only whole Departments can be devolved, and subsection (4) prevents the devolving of the Department of Finance and Personnel. This is, I believe, common sense. The Department of Finance and Personnel could scarcely be devolved while some Northern Ireland Departments remained under the control and direction of the Secretary of State.
  We intend, however, that devolved Departments should, nevertheless, have wide discretion to establish their own priorities in expenditure. The total resources that would be made available to the devolved Departments as a group would, of course, have to be settled between the Secretary of State and the heads of those Departments.
  Mr. Budgen: Once a power has been devolved, if the Assembly exercises that power in a way that the House of Commons suspects may be unfair or unjust to a group within the Province, will the House have no residual supervisory power and no right to ask questions about it?
  Mr. Prior: Under those circumstances we can take power back. I shall come to that point in a later clause that I believe is important.
  I come now to schedule 1. Part I provides for a return to full devolution and thus, in effect, reactivates the machinery established by the Constitution Act, as amended by the other provisions of the Bill. Part II makes provision for partial devolution, should this be a course which members of the Assembly would prefer to pursue. The essence of part II is that, under partial devolution,

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  direct rule as provided for by schedule 1 to the Northern Ireland Act 1974 will continue in respect of those Departments which are not devolved, while legislative and Executive responsibility will return to the Assembly and a Northern Ireland Administration in respect of those matters that are devolved.
  Mr. Dalyell: The Secretary of State referred to stability. For how long can a situation last where the hon. Member who, say, represents Lurgan on schedule 1 and 2 issues can vote in relation to matters affecting, say, the constituency of Lowestoft, but an hon. Member representing Lowestoft cannot vote on matters affecting Lurgan? How does the Secretary of State get over that rock-like difficulty?
  Mr. Prior: In the same manner as happened in the 50 years of previously devolved Government. Exactly the same happened then. Ulster Members were able to vote in the House—
  Mr. Dalyell: Does the right hon. Gentleman remember what my right hon. Friend the Member for Huyton (Sir H. Wilson) said about that?
  Mr. Prior: I shall not enter into a discussion on what the right hon. Member for Huyton (Sir H. Wilson) said on the subject.
  Mr. Tom Arnold: There is an answer to the so-called West Lothian question. Northern Ireland has never in its history been administered as an integral part of the United Kingdom.
  Mr. Prior: I shall come to that question in a moment. The general point that my hon. Friend makes is correct. Even now, although there is direct rule, all the apparatus of devolved administration is there, but in a different way from that in the rest of the United Kingdom.
  Clauses 3 and 4 provide that even before the Assembly acquires legislative functions following devolution it will, nevertheless, have, from its inception, important scrutinising, deliberative and consultative functions. Under clause 4 the Assembly will be obliged to establish a Committee corresponding to each Northern Ireland Department to enable it to carry out this work. Provision is also made for the payment of the Chairmen and Deputy Chairmen of these Committees. There is also provision for the Secretary of State to refer to the Assembly proposals for Orders in Council as well as subordinate instruments, and to consult it about other matters affecting Northern Ireland whether or not they lie within the transferred field.
  The Government intend to involve the Assembly in the consultation process on proposed legislation so that Members can make their views known and have them considered by the Government before the legislation is laid before Parliament. I want the House to be clear on the critical importance that the Government attach to this innovation. The new Assembly will provide what up to now has been lacking during direct rule—a local forum in which the views of the elected representatives can be expressed, formulated and presented to the Government and Parliament.
  As I have just said, there exists in Northern Ireland at the moment a substantial devolved administrative machine—the machine which underpinned Stormont for 50 years—but there is no corresponding democratic check on it. Hon. Members know full well that this House does not, and is never likely, to give close attention to the many
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  orders affecting Northern Ireland, and my hon. Friend the Under-Secretary of State, the hon. Member for Oxford (Mr. Patten), told the House a couple of weeks ago that the question he was then answering was the first he had had for 10 months, on health and social security—which amounts to about half of public expenditure in the Province.
  We believe that it is vital for the political health of Northern Ireland that locally elected representatives should be able to engage once again, and as soon as possible, in political dialogue and discussion, and be able to influence policy more directly than at present. I assure the House that the Government will therefore give the most careful considerations to the recommendations of the Assembly, both in regard to legislation and other matters.
  During the debate on the White Paper, various hon. Members from Northern Ireland suggested that, even before any devolution has occurred, the Assembly should be able to discuss questions of security. The Bill provides that, pending full devolution, they could do so only if it was referred to them by the Secretary of State. The Government have always recognised that questions of law and order are of vital concern to the people of Northern Ireland and their elected representatives. As the House knows from paragraph 54 of the White Paper, we envisaged that suitable arrangements would be needed to enable the Secretary of State and the Assembly to discuss security matters. The arguments put forward during the debate on the White Paper have highlighted the concern in Northern Ireland over law and order issues, and I know that the House will want to look carefully at the provision of clause 3 during the Committee stage of the Bill.
  I should also like to clarify the function of the presiding officer in relation to appointments to the statutory Committees. When the presiding officer comes to make appointments to committees, the House will see that, under clause 4(2), he is subject to a specific statutory duty to secure that the balance of parties in the Assembly is reflected, so far as is practicable, in the appointments of the chairman, deputy chairmen and members of each Committee.
  Clause 5 contains a number of provisions—which I hope it will never be necessary to invoke—dealing with the dissolution of the Assembly and the revocation of orders. This matter was referred to by my hon. Friend the Member for Wolverhampton, South-West.
  Clause 6 requires the Northern Ireland Constitution and Assembly Acts 1973 to be amended in accordance with schedule 2. The schedule affects a number of matters, including the detailed arrangements for appointments to the Northern Ireland Executive, and to the headships of Northern Ireland Departments; the Assembly's privileges and the remuneration of its Members; the arrangements for the dissolution and prorogation of the Assembly; legislation on "reserved" matters by Order in Council after full devolution takes place; and it contains other more technical and consequential provisions which I hope will not engender controversy.
  The Government recognise how difficult it will be to achieve lasting improvement. If they did not recognise that before, they have recognised it as a result of the comments of my hon. Friends and other hon. Members this afternoon. That is why the Bill takes such modest and limited steps, for no amount of window dressing can hide the fact that peace and improved prosperity will come to Northern Ireland only if the various factions are prepared

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  to make accommodations with one another. At present they do not wish to do this. To do nothing is, therefore, easier for them. They have all the advantages of political activity with none of the disadvantages of responsibility. There is, therefore, no reason why the parties should agree in advance.
  I make no complaint about that. It is, after all, what the representatives of the various parties were chosen to do, but it is not a luxury that this Government can share. Their job is to weigh the problems and to proceed in the best interests of the whole people. In the face of the suffering, the economic decline and the political stagnation, the onus of proof lies as much upon those who would do nothing as on the Government.
  It is said that there is no support in Ulster. I do not believe it. The Government believe there is a real desire across the broad mass of the population for a break in the deadlock. The Bill will begin that slow and difficult process, and I hope that it will have the support and good-will of the whole House.
  4.16 pm
  Mr. J. D. Concannon: During today's debate and in subsequent stages on the Bill, it will be the Opposition's intention to ensure that, wherever possible, this legislation matches some of the fine phrases contained in the first section of the Government's White Paper and reflects the spirit of our own policy document on Northern Ireland.
  In many respects, our policy document and the Government's views, as laid down in the White Paper, are similar. On the central issue of cross-community support on the devolution of powers, we are virtually in agreement. Paragraph 13 of the White Paper states:
  "The Government adheres to the view that in any administration in Northern Ireland there must be reasonable and appropriate arrangements to take account of the interests of the minority which are acceptable to both sides of the community".
  Our own policy paper says the same thing, but in fewer words. It states:
  "The success of devolved government depends upon it receiving the confidence and support of a substantial cross-section of both communities."
  It is in that spirit that the Opposition will in future be tackling the proposals in the Bill.
  Mr. Bill Walker: Will the right hon. Gentleman address his mind to the position in Scotland and to the Scottish National Party? Will he put that in the context of the Bill and the Opposition's proposals? Should the SNP also be represented in Scottish administration?
  Mr. Concannon: I said in the debate on the White Paper, and based on my experience in Northern Ireland, that the problems of Northern Ireland should be viewed in a different context from those of Scotland and Wales. I cannot envisage problems affecting Scotland and Wales that require the same kind of resolution or solution as the problems affecting Northern Ireland.
  When we debated the White Paper "A Framework For Devolution" on 28 April, I referred at length to the general inadequacies of the Government's proposals. On that occasion I pointed out that the Opposition do not think that the Government's proposals in the Bill live up to the political realities as outlined in the first part of the White Paper.
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  We find the Government's analysis of Northern Ireland's political problems broadly acceptable, and we support their recognition of the two identities. However, our conclusion is that the Bill does not properly cater for the political realities of Northern Ireland, and I intend to draw specific attention to those areas that we think fail to fulfil the Government's criteria of cross-community acceptability. We hope that the Bill and the Assembly will get off to a good start.
  The first worrying omission from the Bill concerns the election of the Presiding Officer of the Assembly. This matter was discussed at length in the debate on the White Paper, but I should like to say a few words on the subject.
  As the Presiding Officer is not mentioned in detail in the Bill, the provisions of the Northern Ireland Constitution Act 1973 will apply, once the Assembly has been elected. Section 24(1) and (2) of that Act provide for the presiding officer to be elected by the Assembly, presumably on a simple majority vote. In our view, if that provision remains in force, there is likely to be bitterness from the outset about the election of the Presiding Officer. He or she will almost certainly be a politically active unionist who will probably not have the confidence of all parties in the Assembly. The Presiding Officer will hold considerable powers, as several right hon. and hon. Members said during the debate on the White Paper, and in our view the Assembly would get off to a bad start if the Presiding Officer had the support of only one section of Assembly Members and only one section of the community.
  The Secretary of State should consider the potential problems should the 1973 provisions about the Presiding Officer remain unamended. He may wish to look at the arrangements introduced for the 1974 constitutional convention, when the Secretary of State had the power to appoint a Presiding Officer or Chairman, as he was then known. We should like the relevant provisions of the 1973 legislation to be amended so that the Secretary of State would have the power to appoint a Presiding Officer who at the time of appointment may or may not be a Member of the Assembly. Such an amendment would go a long way to ensure that a person acceptable to both sides of the community would hold this important position. It would not be a fail-safe method, but it would be a considerable improvement on the present provisions for electing a Presiding Officer.
  Clause 1 enables the Assembly
  "to submit proposals to the Secretary of State for the resumption of devolved government in Northern Ireland".
  We have several reservations about the clause. Subsection (1) permits either full or partial devolution. What concerns us particularly is that the Assembly can ask for some but not all of a Department's functions to be devolved. To cater for that, the existing departmental structure would have to be altered, because we are told that devolution can take place only by reference to all functions of a particular Department.
  I hope that the Secretary of State or one of his Ministers, in winding up, will explain what will happen if all the parties in the Assembly agree on devolving four functions of one department, say, the Department of the Environment. Will he then split the Department in half and make two Departments of the Environment with two political heads, one responsible to this House and one responsible to the Assembly?

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  No doubt the Minister will say that I am taking an extreme example, but that is the logical consequence of the proposal. Will he say how far the Government are prepared to go with the reorganisation of the Northern Ireland Departments to accommodate devolution? There must be some limit to the departmental changes if total chaos is to be avoided. Confusion will be rife if every Department is split. No one will know where the responsibility for political decisions lies. We are anxious about this proposal and expect thorough answers to the questions that I have posed.
  Clause 1(2) gives the Assembly responsibility for deciding how executive functions should be operated when some or all the powers are devolved. This is a crucial provision of the Bill, as the Secretary of State said. We doubt whether there will be much agreement within the Assembly about how power should be exercised in the event of devolution.
  Had this been our Bill, we should have laid down much tighter criteria—this, possibly, is where the main difference between us lies—for the inclusion of the minority at every level of executive power. We do not fully agree with the thinking behind the subsection, but we do not intend to oppose it. The problems engendered in 1974 are still in our minds—they are certainly in my mind—and we are prepared to see what sort of proposals the parties in the Assembly hammer out for themselves.
  Dr. Brian Mawhinney: I fully understand that there may be differences of emphasis about the degree of protection that the Bill offers or should offer to the minority community, but is the right hon. Gentleman willing to say that, in his view, no minority community should have a veto?
  Mr. Concannon: Certainly. I shall come to the question of the veto later. It has been common ground, as I tried to make clear in the first instance, that before anything can succeed in Northern Ireland it needs the broad support not only of the minority community but of the majority community as well. Nothing would guarantee failure more than if anything proposed here did not have the support of the minority. However, I do not want to start talking about anyone having a veto. What we need is common agreement across the board. That is the only way to achieve success in Northern Ireland.
  The Opposition are not optimistic. We doubt whether the time has yet come when the majority is prepared to realise that real security lies in the sharing of power and in partnership with the minority community. If and when devolution reports come to the House from the Assembly, it is the proposals in subsection (2) that we shall need to scrutinise closely.
  Subsection (4), on which the Secretary of State spent some time, seems to be something of a mixed bag. On the one hand, we are told that any devolution proposals that have the support of at least 70 per cent. of the Members of the Assembly, will be laid before Parliament. On the other hand, we are told that devolution proposals with the support of between 50 and 75 per cent. of the Assembly Members may be laid before Parliament if the Secretary of State is satisfied that they carry cross-community support.
  We have no quarrel with paragraph (b). The Secretary of State is our man on the spot. He, more than anyone,
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  should be able to decide whether a set of proposals has cross-community support. Our quarrel is with paragraph (a). As I understand it, the reason for introducing the idea of a 70 per cent. majority was to ensure that devolution proposals had a demonstrable measure of cross-community support. As I said in our debate on the White Paper, I fully understand the reasoning here. The aim is a good one, but I doubt whether paragraph (a) will fulfil that aim. There is no guarantee that 70 per cent. of the Members of the Assembly supporting any given proposals will reflect all sections of opinion. The House should bear in mind that, in the 1974 Assembly and in the 1975 Convention, the Unionist Party had nearly 70 per cent. of the seats, but with the support of minor parties, it held well over 70 per cent. We cannot say whether that will be the case in the new Assembly, because elections have yet to take place. I do not suggest that we should await the election results before deciding on the percentage, but I question the need for this fixed percentage, given that we have paragraph (b).
  Let us suppose that certain devolution proposals have the support of 70 per cent. of the Members of the Assembly. Indeed, it could be even more than 70 per cent. In the convention report, it could have been as high as 78 per cent. of Members of the Assembly, and not one representative of the minority community needed to vote for that proposal. The Secretary of State would then, under subsection (5) of the clause, be bound to lay those proposals before Parliament. By that time, I imagine that it would have been made clear that the minority community did not like the proposals. What would the Secretary of State do then? Would he be prepared to come to the House and to say that although the proposals had fulfilled the criteria in the Bill, he could not recommend them to the House because they did not have cross-community support? That would be a very difficult position for the Secretary of State to take. His hands would be tied by this clause. Imagine the reaction in Northern Ireland if proposals with a 70 per cent. or even a 76 per cent. majority were turned down by Parliament, the very body that set such store by that figure.
  Mr. James A. Dunn: Does the right hon. Member agree that if the words "widespread acceptance throughout the community" were added to the percentage in subsection (4)(a), it would serve the purpose that he seeks?
  Mr. Concannon: The answer is contained in subsection (4)(b). Paragraph (a) could be done away with completely. We shall have to take a long, hard look at the subsection. Unless the weight of majority is 80 per cent. or more, it is worthless. Only a figure of that order would demonstrate that devolution proposals had cross-community support.
  Our view is that it is unnecessary to set any figure. During the White Paper debate, I could detect little support for the 70 per cent. idea. That lack of support is unsurprising, since each group is afraid that another will be able to veto its proposals. It would be more sensible to dispense altogether with the idea of a fixed majority. We believe that any devolution proposals which have a majority in the Assembly, of whatever order, should be submitted to the Secretary of State. It should then be for him, and for him alone, to decide whether they have the necessary measure of cross-community support.
  Mr. James Molyneaux: Will the right hon. Gentleman agree that the general understanding in the White Paper debate was that paragraphs (a) and (b) were much the same? The difference was that there was no compulsion in the second paragraph. Instead, the Secretary of State would give a clear indication, the Government would make their views known, and the Whips would be on to make sure that the decision was obeyed.
  Mr. Concannon: I certainly do not think that the paragraphs amount to the same thing. I shall refer later to parliamentary control, but my view is that the 70 per cent. is unnecessary. From what I have both heard and read and from the protestations made to me, nobody seems to want the provision. Everybody is suspicious of it and it is unnecessary. I accept that the Secretary of State knows his job and will be able to decide whether there is cross-community support, and make the right recommendations to the House. It will then be for the House to support or reject those recommendations. If a report commanding a 75 per cent. majority within the Assembly were presented to this House, and the Secretary of State had to report that the proposal did not have cross-community support, and that not one of the minority Members elected to the Assembly had voted for it, this House would be placed in a very difficult position. Leaving the 70 per cent. majority in the Bill presents a danger of creating two types of report from the Assembly. Any proposal that has a 70 per cent. majority or more will inevitably carry weight because it has met the superficial criteria laid down by Parliament, yet it may not have met the more important criteria of cross-community support.
  I urge the Secretary of State to examine paragraph (a) again and to consider dispensing with it. We shall be tabling an amendment to that effect, so we shall be able to discuss the matter much more thoroughly in Committee.
  Mr. J. Enoch Powell: It will not help the right hon. Gentleman in his lucubrations on his prospective amendments—[Interruption.] I am told that is an Irish word. It will not help him if he simply moves to leave out paragraph (a), because the effect will be that the Secretary of State will then exercise his discretion privately and negatively, and no proposal will come before the House. If the right hon. Gentleman wishes the House itself, on the motion of the Secretary of State, to take a view on the matter of widespread acceptance, he will need more far-reaching amendments—which I am sure could be debated—to the Bill. Perhaps he will not mind my pointing that out to him.
  Mr. Concannon: I am willing to accept advice on these matters. In due course, we shall be moving amendments that will have the purpose of removing the 70 per cent. and leaving the matter of cross-community support in the hands of the Secretary of State.
  The provisions in clause 2 do not meet with our entire approval. Should we ever reach the stage when the House considers that powers can be devolved to Northern Ireland, we think that a single Order in Council, which cannot be amended, and which may be taken late at night, is a very inadequate instrument through which to pass powers back to Northern Ireland. It is not practicable to propose that each power be devolved by Act of Parliament, but we
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  should like some assurances from the Secretary of State that adequate time and attention will be given by the House to the devolution proposals.
  Two possibilities spring to mind. First, if and when an Order in Council is made to devolve power, it will be more sensible if it contains provisions relating to a single Department. We can then have separate discussions on devolving powers under, say, agriculture and commerce, rather than having the two lumped together in a single order. Similarly, if and when all transferred functions are to be devolved, we think it would be wise to deal with them on the basis of one Department at a time. The House would then have an opportunity to assess fully the implications of devolving powers under each Department.
  Secondly, there may be scope here for developing a new procedure to consider proposals for a draft Order in Council. If the right hon. Member for Down, South (Mr. Powell) has any advice on this area, I shall be glad to look at it closely. I have been trying to find a solution that would enable this House to have a much greater say in or control over the devolution of power, other than by order.
  Mr. J. Enoch Powell: I am very grateful to the right hon. Gentleman and much complimented by his reference to me. However, there is a difficulty attaching to his suggestion that only one Department should be dealt with at a time by any one order. Indeed, there is an opposite difficulty, a deeper difficulty, in the Bill, namely, what is to be the relationship, under partial devolution, between the heads and the policies of the separate devolved Departments, since they will all be treated—so we heard from the Secretary of State this afternoon—as a group for the purposes of financial allocation?
  Mr. Concannon: We had better try to think of something else that might be helpful to the House. The legal advisers will have to start looking at the proposals for draft Orders in Council. At present, the proposals for a draft order are printed, and written objections are invited. I was wondering whether the matter could be dealt with by an appropriate Committee of the House of Commons. I do not think that the Northern Ireland Committee is the appropriate one, but possibly a Committee could be set up to consider the proposals for a draft order to suspend parts of direct rule. It would expand the opportunities for discussion and amendment on such an important issue. I should be interested to hear the Secretary of State's views on that matter. It would appear, from the debate on the White Paper, that many hon. Members would regard the all-in-one or take-it-or-leave-it basis of an Order in Council as an unsatisfactory way of devolving power to Northern Ireland.
  We do not have many objections to clause 3. As I said during the debate on the White Paper, there may be considerable merits in having a Northern Ireland Assembly which can make its views known, even if powers are never devolved. However, I wish to stress again that there are dangers in allowing the Assembly to turn into a talking shop which simply institutionalises the political differences in the Province. To avoid that, the Secretary of State must be prepared to take a great deal of notice of what the Assembly says, even if it is in direct conflict with his Government's policies.
  During the debate on the White Paper I asked what the Secretary of State will do if the Assembly makes it clear that it does not wish a particular piece of legislation to be

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  introduced in Northern Ireland. I did not receive an adequate answer to that question during the ministerial reply. The Secretary of State should tell the House today what will be the priorities in such a situation. What is the status of the opinion of the Assembly prior to devolution? Will the Secretary of State put the views of the Assembly before Government policies? The people of Northern Ireland, who will be electing Assembly Members, have a right to know the answers to those questions.
  We have said before that in several areas the Bill fails to cater for the political realities of Northern Ireland. One such failure concerns the lack of any reference to the Irish dimension. The White Paper contained a few derisory paragraphs and the Bill contains nothing. The Government clearly recognise that there are two nationalist identities in Northern Ireland. One group, the majority at the moment, prefers membership of the United Kingdom, while the other group would prefer its section of the country to be part of the Irish Republic. The two identities are there. Ignoring them will not make them go away.
  Furthermore, we should never forget that while Northern Ireland is presently part of the United Kingdom, it has a land border with the Irish Republic. The two parts of Ireland do have a common interest in matters of energy, commerce, culture and, as the Secretary of State mentioned, security. There are many ideas which can and should be shared.
  We should like to see provision in the Bill for the Assembly to establish a committee to deal solely with matters relating to the Irish Republic. Such a committee would be able to have joint discussions with the relevant authorities in the Irish Republic, and, as a result, could make recommendations to the Assembly. If such a committee were established under direct rule it could supplement the work of the Northern Ireland Ministers. Under devolution, it could make suggestions to the Executive.
  Section 12 of the Northern Ireland Constitution Act 1973 provides for the devolved executive authority to take part in consultations and agreements with the Irish Republic. In the absence of any devolution, we believe that elected representatives in Northern Ireland should talk about matters of common concern with the Irish Republic. We therefore ask the Secretary of State if he will consider making provisions for such a committee rather than leaving the decision to the Assembly under clause 1(3).
  I turn to clause 4. Once again we ask the Secretary of State a question which was posed under clause 3. What will be the status of reports from Assembly committees? What course of action will the Secretary of State take if one or other of those Committees makes an outright condemnation of Government policies in a certain area? In short, is he prepared to act against the elected representatives of Northern Ireland? That is a question that needs a clear answer.
  I have referred to some of those sections in the Bill which cause disquiet on the Opposition Benches. There are many more points that I wish to raise, but they can wait for the Committee stage of the Bill. We do not intend to divide the House on Second Reading. As I have said before, the Bill, in spite of its inadequacies in certain areas, is broadly in concert with our policy of devolving power back to Northern Ireland. Rolling devolution might be all right. The Opposition are very wary of creeping back
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  to Stormont. So, in the coming stages, our intention is to strengthen the Bill so that we can get the maximum of the cross-community support necessary for devolution.
  If, however, the House divides on the amendment, we shall not support such an attempt to wreck the Bill. For the reasons that I have just given, I shall advise my right lion. and hon. Friends to vote against the amendment.
  4.44 pm
  Sir John Biggs-Davison: I beg to move,
  That this House declines to give a Second Reading to a Bill which lacks broad support in Northern Ireland, does nothing to achieve the defeat of terrorism or to revive the economy of the Province, and contains provisions which, if enacted, would undermine the unity of the Kingdom.
  The supporters of the amendment include my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) and my hon. Friend the Member for Beckenham (Sir P. Goodhart) who was a Minister in the Northern Ireland Office. The fact that the speech of the right hon. Member for Mansfield (Mr. Concannon) was heard by only two Labour Back Benchers in this important debate, will he noted by the House and by the country.
  Mr. Concannon: The hon. Member for Epping Forest (Sir J. Biggs-Davison) must not regard the number of members on the Opposition Benches as anything more than a sign of the quiet confidence in which they hold their Front Bench spokesmen. It is quality, not quantity, that counts on the Labour side.
  Sir John Biggs-Davison: I still believe that on such an important Bill relating to the future of Northern Ireland we might have expected hon. Gentlemen to be in attendance in considerable numbers. The speech of the right hon. Member for Mansfield appeared to be constructive, but it came out extremely critical in detail.
  It gives me no pleasure to be at variance with my right hon. Friends on the Government Bench. My right hon. Friend the Secretary of State dislikes any comparison being made with the Falkland Islands, but that comparison was made by Ulster people long before he became Secretary of State.
  In the month before the Argentine aggression, I wrote in the Belfast News Letter of
  "policy makers who impatiently resent the insistence of Falkland Islanders and Gibraltarians that they are British. They regard the Northern Ireland loyalists as a bore."
  Lord George-Brown, when at the Foreign Office, tried to surrender the Falklands, but we stopped that. A Foreign and Commonwealth Office official connected with these matters told Airey Neave and me that he was "neutral on the Union". No wonder Galtieri believed that it would be nothing but a regatta. No wonder the IRA has persevered for a period longer than the two World Wars. The IRA can read White Papers, and its often flagging hopes have been revived by every political initiative taken since, and including, the prorogation of the Stormont Parliament which is now cited in support of devolution by those who abolished it. The IRA can read, and it reads in the Bill the differentiation and distancing of Northern Ireland from Great Britain. We should be doing everything we can to strengthen the Union in which we believe.
  The Bill and the White Paper damn the Union with faint praise. Whether in the South Atlantic or in Northern Ireland—my right hon. Friend mentioned the sacrifice in Northern Ireland—we pay in blood and treasure for the

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  impressions that we give. Both areas are of prime strategic importance. Without the Ulster ports, Hitler would have won the second battle of the Atlantic and, in Churchill's words, would have confronted us with "slavery and death". NATO thinks and must think in terms of a possible third battle of the Atlantic.
  I wish to compliment my right hon. Friend the Secretary of State and his colleagues on the Treasury Bench on their unremitting efforts to shield a hard-hit Province from the worst effects of the recession and to bring in investment. But my right hon. Friend regards political stability and, therefore, the Bill as going hand in hand with economic recovery and the defeat of terrorism. It is the contention of those who have set their hand to the reasoned amendment that the Bill will not make for that political stability and is more likely to provoke terrorism than to reduce it. Any suggestion that direct rule—that is the present system of government—is inherently unstable can only deter the investors that Ministers are courting. It contradicts the message of the films that some of us had the privilege of seeing recently which were made to demonstrate the normality of most of the Province most of the time.
  The Secretary of State from time to time describes direct rule as "everyone's second choice", but agreement on a second best seems better than no agreement. With all its defects, direct rule has wider acquiescence in Northern Ireland than the devolved government that preceded it.
  In 1979 the Northern Ireland Attitude Survey of Queen's University, Belfast, revealed that 92 per cent. of Roman Catholics wanted
  "Laws in Northern Ireland to be as far as possible … the same as laws in the rest of the United Kingdom."
  I know that my right hon. Friend the Secretary of State gets restive if I quote public opinion polls. I assure him that I agree that they are not infallible, but they are indicative when they follow a pattern. An NOP survey screened by Ulster Television on 12 February gave not merely the Union, but full integration, as acceptable to 80 per cent. of Protestants and 45 per cent. of Roman Catholics. An earlier MORI poll, published, and grossly misinterpreted, by The Sunday Times on 8 June last year, gave a figure of 39 per cent. of Roman Catholics, as against the 45 per cent. in the NOP survey in February.
  It is demonstrably foolish and mischievous to identify the Roman Catholic community with the Republican cause. That is not surprising when, for so long, members of that community have been the victims—terrorised, exploited and oppressed by gangsters, in the name of a united Ireland, or, rather, an all-Ireland Socialist Republic which would be about as Irish as Cuba.
  Part 3 of the White Paper relating to "The Two Identities" is incomplete—indeed, misleading. The phrase in the Bill
  "widespread acceptance throughout the community"
  lacks precision. I am not quite clear what it means. The assumption in the Bill is that whatever opinion polls or right hon. and hon. Members may say, devolved government, as distinct from administrative devolution, which amply obtains in Scotland and Wales and should amply obtain in Northern Ireland, is what the people of the Province want.
  One of my favourite newspapers in Northern Ireland is the Impartial Reporter and Farmers' Journal of
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  Enniskillen. It is a moderate Unionist paper, which is much read across the frontier in the border counties of Eire.
  Mr. Gerard Fitt: It is worse than the News Letter.
  Sir John Biggs-Davison: A leading article on 29 April stated:
  "The 'rolling devolution' scheme has fallen on stoney ground, with little prospect of fertilisation and eventual fruition."
  Referring to the Assembly, it says:
  "'A talking shop' is one description, but a very expensive one at that, as the election is estimated to cost in the region of £750,000 which could probably be spent to better account elsewhere in the Province, on housing for example. All the principal political parties have given Mr. Prior's plan the 'thumbs down'. The Official Unionists see no future in it; SDLP say it is unworkable; DUP are mainly against it, but find some parts acceptable and are willing to go into the election. Only the smallest party, Alliance, which is unlikely to have much strength in its representation, has shown any favour in the plan."
  There is an addition to make. I hope that my right hon. Friend takes comfort from the support of the Workers Party.
  What is the good of saying that political parties want devolved government when they want it in forms which are mutually exclusive? My right hon. Friend repeated today that he wants a local forum for politicians. I suppose that that is job creation of a sort, but Northern Ireland is the size of Yorkshire and has a population of 1½ million. Surely, if local government were properly constituted, with safeguards, and there were an enlarged representation in the House—and Ulster's representation in the House of Lords also needs attention—plus three seats in the European Assembly, that should give even the hon. Member for Antrim, North (Rev. Ian Paisley) enough scope.
  Why do Ministers close options? Why have they set their faces against giving much more power to district councils? Why do they mind filling the Macrory gap in the local government structure which was left after the removal of the Northern Ireland Parliament and which was to have played the dual role of legislature and upper tier of local government?
  If, as members of the SDLP commonly point out, injustice to the minority is feared, the Secretary of State has sticks and carrots to cure abuses, bash bigotry and allay those fears. We are often told about the enormities of the Lisburn borough council, but the council should not have been allowed to get away with that. We would not condemn English local government because of Mr. Ken Livingstone and Mr. Ted Knight.
  Mr. Michael Mates: But does my hon. Friend agree that, while councils are behaving like that, we would not want to give them extra powers, which is what he is advocating?
  Sir John Biggs-Davison: In accordance with the principle of rolling devolution, we could give councils powers according to their willingness and capability to use them. My right hon. Friend the Secretary of State has the power to deal with recalcitrant local authorities. For one thing, he has the money.
  In many districts, Nationalist and Unionist councillors work well together. I pay tribute to the SDLP for being responsible for bringing that about in many cases. It is in local government that power sharing is feasible, appropriate and acceptable.

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  It would help us if the Secretary of State would say that, if the Assembly were found incapable of undertaking the functions that could be transferred to it under the Bill, the Assembly could be transformed into a regional or provincial council, playing a local government rather than central government role, perhaps analogous to the Strathclyde regional council—that may give some pleasure to Labour Members—which has been the subject of study in the Official Unionist Party. But here I am stepping perilously close to the bad taste of mentioning the general election manifesto of the Conservative and Unionist Party.
  However, may I ask Conservative Ministers to refer now and again to the passage in that manifesto on Northern Ireland? Airey Neave is emblazoned in this Chamber and we might profit from his wisdom. In the "absence of devolved Government", to quote the manifesto, will my right hon. Friend not dishonour an election pledge, but proceed to implement it? It would help us if we could have an answer before the end of the debate.
  Mr. Prior: My hon. Friend asked whether, if the Assembly did not work, we could transform it into a provincial assembly on the lines of local government, and he mentioned the Strathclyde regional council. The answer is that all the problems that we would have with devolved government—for example ensuring that there was minority representation—would exist with a provincial assembly dealing with the sort of problems to which my hon. Friend referred. We would have the same problems with both sorts of Assembly. That is the truth on that point. I have looked at this to see whether there was some way that we could do it. It is nonsense that the only powers possessed by local government at the moment are those of refuse collection and recreation. On the other hand, as soon as one embarks on a programme of giving additional powers, one runs into all the difficulties that my hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison) has accepted. The second point he raises concerns the manifesto. The manifesto starts by saying:
  "In the absence of devolved government".
  I personally believe that, by seeking devolved government, we are not in any way going against our manifesto. I believe that this is abundantly clear.
  Sir John Biggs-Davison: In that case, I should like to know how long we must wait for this devolved government to come about. If there were agreement on sufficient scale in Northern Ireland and if the main elements in Northern Ireland politics were to come forward with a scheme of devolved government that they wanted, then, although we might have our reservations about the future of the Union and about what might happen in Scotland and Wales, we would have to accept what they wanted. But surely my right hon. Friend does not believe that this will happen. To set about trying to devolve central government powers without placing the minority in jeopardy is as difficult an operation as, or more difficult an operation than, trying to do the same in the sphere of local government.
  Mr. J. Enoch Powell: Will the hon. Gentleman remind the Secretary of State and the House that the existing district councils, in their consultative and advisory character, exercise wide functions within the Department of the Environment where their advice is almost invariably accepted by the Department? That is
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  substantial evidence that such extended functions would be exercised in the same co-operative manner as are the functions directly and legislatively conferred upon the district councils.
  Sir John Biggs-Davison: I am obliged to the right hon. Gentleman. I do not think that I need to remind my right hon. Friend of the words that came from the mouth of the right hon. Gentleman.
  I have another question that I should like to put to the Government Front Bench. The Minister who is to reply can perhaps define what is meant by "cross-community" support or acceptability in the context of the 70 per cent. of Assembly Members required to agree on the exercise of powers and formation of an Administration as set out in paragraph 43 of the White Paper. For 12 years, I have spoken on Unionist platforms in favour of a separat ton of the Orange Order from the Unionist Party and the bringing forward of Roman Catholics in that party. I have had the presumption to do that, and I have been allowed to say it, which speaks volumes for the patience, restraint and tolerance of Unionists in Northern Ireland.
  History and terrorism make this much easier for someone like myself to recommend than for it to be achieved. Nevertheless, let us suppose that a Unionist Party or group of parties were to return 70 per cent. representation made up of Catholic and Protestant Unionists perhaps in proportion to Catholics and Protestants in the Province. Does my right hon. Friend or the Government apprehend that Parliament would entrust those Unionists with devolved government? If the answer is "No", I say that this is one more way in which the Bill and the White Paper would have the effect of perpetuating a divided community.
  Mr. Molyneaux: It is my understanding—the Secretary of State may be able to enlighten us—that not only would Unionist Roman Catholics be unacceptable for the purposes of "cross-community consent", but that Roman Catholic Alliance Members would not be acceptable. In other words, they have to be Republican Roman Catholics.
  Sir John Biggs-Davison: This fills me with greater gloom and despondency about the Bill. Why should we say that "cross-community consent" means the agreement of Republicans and Unionists? This is the division that we should be trying to avoid in all that we endeavour to do for Northern Ireland within the United Kingdom. No encouragement is given to those Roman Catholics who increasingly favour the Union. I do not mean that they necessarily favour any Unionist party. However, they favour increasingly the Union and, more than that, full integretion of Northern Ireland within the Union.
  The Under-Secretary of State for Northern Ireland (Mr. John Patten): My hon. Friend has drawn attention to an opinion poll which suggested that a majority of Protestants and Roman Catholics wish to see integration with the United Kingdom. Like my hon. Friend, I have doubts about opinion polls. Does he recognise that the same opinion poll, taken on the same day, answered by the same respondents, as the sociologists so trendily call them, produced a majority of 75 per cent. of Protestants and 67 per cent. of Catholics who wished Northern Ireland to remain part of the United Kingdom with its own power-sharing Assembly?
  Sir John Biggs-Davison: I had not intended to spend too long on this point, but I am grateful to my hon. Friend for completing the story. That shows that a large majority not only of Protestants, but of Catholics, favour the British link, whereas 45 per cent., slightly less than half the Catholic minority, favour the solution that my right hon. and hon. Friends and myself favour on the Northern Ireland constitutional question.
  Mr. John Patten: I am grateful to my hon. Friend for giving way. I shall be much briefer this time. If my hon. Friend accepts the logic of the first set of answers that were given, he must accept the logic of the second set, which is that the majority of people, both Roman Catholic and Prostestant, wish to see a devolved Assembly within the Province.
  Sir John Biggs-Davison: The difficulty is that there is not sufficient agreement on the form of devolved government and the powers that would reside with the devolved Assembly. What there is agreement upon in large measure is the Union. There is considerable support for what may be the second choice of many people. It seems therefore, that this is something that might work, rather than the Bill, which, where it is not futile, is dangerous.
  Mr. Fitt: The hon. Gentleman has referred to a series of poll results in Northern Ireland. We who represent Northern Ireland and who live there are only too well aware that polls and elections produce completely different results. I should like to believe what the hon. Gentleman is trying to persuade himself is the case—that many Catholics believe in constitutional changes. How does the hon. Gentleman explain the two by-election results in Fermanagh and South Tyrone in the first of which almost the entire Catholic population voted for a Republican on hunger strike? It may be argued that this was done for emotional reasons. However, in the second by-election, the same Roman Catholic majority—almost 100 per cent. of it—voted for a Member of Parliament who does not even attend this House. It has to be remembered that there was an Alliance candidate who was a constitutionalist candidate. The result would not seem to support the view put forward by the hon. Gentleman.
  Sir John Biggs-Davison: The hon. Gentleman will agree that this was an exceptional election in exceptional circumstances in an exceptional constituency. However, his remarks go to the root of the matter. Until we integrate and decide that there is one Parliament of this Realm and that what matters is who is elected to this House of Commons, the party politics of Northern Ireland will remain in this distorted condition. I am grateful to the hon. Gentleman for making that point.
  My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), who always bears himself with dignity and honour, said that minority is best protected by Westminster. The minority in Northern Ireland might decide that that was the lesson of Stormont. If one goes back to the time when the Union between Great Britain and Ireland was made, it was then the Orange Order that wanted to keep a Protestant Parliament for a Protestant people—and it was 100 per cent. Protestant in those days. Catholics generally supported the legislative Union with Great Britain because that Union was to be coupled with their emancipation and protection, and that eventually came about.
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  The right hon. Member for Mansfield deplored the absence of sufficient place for the Irish dimension in all this. May I say, in parentheses, that there were those in Ireland, like Mr. Haughey and Mr. Power today, who saw in the events of that time—the Napoleonic war—some spurious opportunity for Ireland in England's difficulty. At that time Dean Warburton gave as the opinion of moderate men in Ireland:
  "It will be necessary to remove from this Kingdom the object of political contention, and they"—
  the moderate men in Ireland—
  "think if we have no parliament, we may have peace and security."
  On 18 May 1920, Carson, stunned by the accusation that the Ulster Unionists sought an oppressive Protestant ascendancy, declared in the House of Commons:
  "We have never asked to govern any Catholic. We are perfectly satisfied that all of them, Protestant and Catholic, should be governed from this Parliament"—[Official Report, 18 May 1920; Vol. 129, c. 1289.]
  My right hon. Friend should not, by his understandable eagerness for his measure, divide his party and, what matters more, the country, on both sides of the sea. This is a time for Ministers to seek unity on both sides. In the great emergency of 1914 the House and the Government agreed to postpone proceedings on a Home Rule Bill. The Prime Minister then said:
  "The issues of peace and war are hanging in the balance … it is of vital importance in the interests of the whole world that this country … should present a united front, and be able to speak and act with the authority of an undivided nation. If we were to proceed today with the first Order on the Paper,"—
  that was the Government of Ireland (Amendment) Bill—
  "we should inevitably, unless the Debate was conducted in an artificial tone, be involved in acute controversy in regard to domestic differences whose importance to ourselves no one in any quarter of the House is disposed to disparage or to belittle … We therefore propose to put off for the present the consideration of the Second Reading of the Amending Bill … In the meantime, the business which we shall take will be confined to necessary matters and will not be of a controversial character."—[Official Report, 30 July 1914; Vol. 65, c. 1601–2.]
  Let Her Majesty's Government and the House emulate today the statesmanship of those who came before us in this place.
  5.13 pm
  Mr. William Ross: Before we can express sensible views on the Bill, it needs to be set in its proper context. Some people discern a slight difficulty in Anglo-Irish relations, beginning with Strongbow, but why those folk ignore the kidnapping of St. Patrick is beyond me, other than the fact that that might well have put right on the side of the English.
  Mr. J. Enoch Powell: The Welsh.
  Rev. Martin Smyth: The Scots.
  Mr. Ross: My right hon. Friend the Member for Down, South (Mr. Powell) says the Welsh, but perhaps no one was too sure.
  For the purposes of today's debate, we must start with the destruction of the Stormont Parliament by the House in a most shameful exercise in March 1972. The Bill is presented to us as a serious attempt to restore to the people of Northern Ireland some control over their own affairs. As most people in the Province proclaim their desire to have such control, and as successive Governments have proclaimed their desire to grant that control, an outside observer could be well excused for wondering how bedlam has been the only result of the efforts made to date.

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  The reason for the continuing turmoil is simple. It revolves around the question not of the return of power to the people of Northern Ireland, but of who will wield that power when it is returned, and to what purpose the hands wielding the power will direct its force.
  In this part of the United Kingdom the basic political divisions revolve around the control of the ownership of wealth, simply because in normal circumstances that is the single biggest issue of the society here. Sometimes, as at the moment, another issue acquires an importance that supersedes the economic questions of the day. Then, as last Thursday, there is a political effect. We do not know yet how fleeting that effect will be or how long it will endure in the politics of Great Britain, but there is, and has been, an effect as a result of the invasion of our group of islands in the South Atlantic. It had an effect here on the voting patterns in the recent local authority elections.
  The most important political question for the people of Northern Ireland has always been whether there shall be a political united Ireland ruled from Dublin or the continuance of the United Kingdom as it is at present constituted. A backwash from that issue was displayed last week by the Government of the Irish Republic over the Falklands. I feel sure that the Dublin view of geographical position of territory rather than an adherence to the wishes of the inhabitants of that territory coloured the view of the Government of the Republic last week.
  In Ulster, the political parties, as elsewhere, reflect the political divisions of the Province. In power, all political parties must work for the objectives for which they were elected and work towards those long-term objectives, regardless of what temporary agreements there might be in any coalition. If politicians are not prepared to work for the political objectives on which they were elected, to carry out the manifestos on which they were elected, and fail to carry out the duties imposed on them by those manifestos, they cannot and will not survive.
  Successive Governments here seem to have acted as if they did not understand the realities of political life in Northern Ireland. At times, even past Northern Ireland Governments became infected by the strange madness that proclaimed that if only the minority viewpoint was given credibility by office, all would be well. In seeking what is now called, for the sake of politeness, cross-community support we had, some years ago, a politician from the Northern Ireland Labour Party, Mr. Bleakley as Minister for Community Relations. He was able to stay only for six months, from April to October 1971. I notice that the Secretary of State proposes to restore this power to his hands, or to the hands of the proposed Assembly in Northern Ireland.
  We then had in office Dr. Newe, a Roman Catholic, who proclaimed that he was not a member of the Unionist Party, and who, we are assured, wanted friendlier relations between the two parts of Ireland. These measures were, as history proved, not sufficient to deal with the problem that they were intended to deal with. The daftness reached its zenith, or seemed to, under the right hon. Member for Penrith and The Border (Mr. Whitelaw) when he created the Sunningdale power-sharing system. May 1974 proved that a rootless growth cannot survive a storm, and down it crashed at the first opposition. Let no one doubt that if the structure that was erected had had the support of people on the ground it would have survived, but it did not survive.
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  It is inconceivable that the rulers of this country did not understand those matters. Nor is it conceivable that they would have been tried if the commonly-accepted reason for the destruction of the 1920 Stormont Parliament were the real reason. Perhaps I should remind the House that the commonly-accepted reason was that the Northern Ireland Government were doing a poor security job. The right hon. Member for Cardiff, South-East (Mr. Callaghan), speaking in the debate in March 1972 on the destruction of Stormont, lamented the fact that between the coming of internment in August 1971 and that date, 220 people had died in Ulster. The latest available figure is 2,199. The measures taken by the House in March 1972 to deal with security have not been a screaming success. They have been almost a total failure, because the IRA is still killing people. In the past month it has killed five people in my constituency of Londonderry.
  The end result of that alleged security initiative makes me sick and angry. I feel the same way when I hear Ministers whining to us, as they have during the years, about the economic position in Ulster and asking us to do something about it by surrendering our principles—which is what it comes down to—on power sharing. We and those who preceded us did something about it 10 to 12 years ago. We warned the House about the results that would flow from the policies then being pursued, and. I regret that we were not proved wrong.
  The Government did not believe us then, nor did successive Governments. They will not listen to us today. They did not act on our advice about security and they did not seem to understand that the security position would have a backwash effect on investment and jobs, which has proved to be the fact. Any security committee set up to give advice would have its advice treated in the same way as the previous advice that we have given, because the Government would say to the members of that security committee, whether in the Assembly or outside, that it is all very well for them to give advice, but they do not have responsibility and are therefore acting irresponsibly. There is no getting away from that political fact of life. It follows as surely as day follows night that the Government must say that, if they disagree with the advice given on security, or on any other matter.
  The security policy has not destroyed the capacity of the IRA to commit acts of terrorism, and we have had too much proof of that in recent weeks. Instead, we are confronted today with the miserable nonsense that the communities in which IRA members live must expel them. I wonder whether anyone saying such things really understands what life is like in the Creggan estate, the Bogside or in parts of West Belfast. It is not the responsibility of unarmed, intimidated and terrorised civilians in any community to cut out the terrorist cancer. The law-abiding in such communities suffer more, than most from the attentions of the terrorists. How many people have the IRA murdered in the past year or two because they were alleged to be informers? It does not matter to the IRA whether they are informers or not. All that matters is that it has spilled blood and, therefore, by that action, increased the pressure on and terror of those who might otherwise be prepared to give information.
  The rulers have the duty to use the civil sword to restrain evildoers, and no excuse can hide their continuing failure. The security policy has not evolved in the way that

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  it should have done and would have done if the overriding consideration when getting rid of Stormont had been the military defeat of the terrorist.
  That means that we must look elsewhere for the real reason for the destruction of Stormont. Strangely enough, the real reason was set out for us in the same statement that declared that security policy and control of security was the issue. It is contained in the statement made to the House by the then Prime Minister, the right hon. Member for Sidcup (Mr. Heath), on 24 March 1972. He said:
  "We have made repeated attempts with all concerned to find an agreed solution to the problems of Northern Ireland."
  He went on to say:
  "We made it plain that in the British Government's view new and more radical measures were necessary if there was to be any prospect of breaking out of this deadlock."
  In the next column, he said that the late Brian Faulkner had told the Government that he could not accept proposals about the implementation of security. However, that was only a smokescreen which was used by the Government for the final point on the issue of finding an agreed solution, which was that the transfer of responsibility for security from Northern Ireland to the House would be
  "an indispensable condition for progress in finding a political solution in Northern Ireland."
  Clearly, the Northern Ireland Government could not, in the conditions that then prevailed in Ulster, accept the loss of security powers. After they lost them, they would simply be helpless bystanders in the slaughter of the citizens they were elected to defend. However, the real cat came out of the bag with the use of the words that I have just been quoting and by the following.
  The then Prime Minister said:
  "The Northern Ireland Government's decision therefore leaves them"—
  that is, the Government—
  "with no alternative to assuming full and direct responsibility for the administration of Northern Ireland until a political solution to the problems of the Province can be worked out in consultation with all those concerned."
  He then went on to say that the immediate proposals
  "do not in themselves constitute a lasting solution for the problems of Northern Ireland. We remain determined to find means of ensuring for the minority as well as the majority community an active permanent and guaranteed role in the life and public affairs of the Province."
  The right hon. Member for Huyton (Sir H. Wilson) said in the same debate:
  "This is now the occasion for a set conference and all-party talks between all parties here and all elected parties in Stormont, and the fullest programme of consultations with all the Irish parties in the Dail."
  In other words, the statement made on that occasion contained all the necessary ingredients to bake up the Sunningdale system and, in the light of developments since then, the real reason for the destruction of the Stormont system of government was not the security position but the installation and creation of a power-sharing regime in Northern Ireland.
  That course was not embarked upon lightly, casually or in haste. The right hon. Member for Sidcup said:
  "But what we are now doing as a deliberate act of policy is setting out to lower the tension and to reduce the violence and counter-violence in an attempt to achieve a lasting settlement."—[Official Report, 24 March 1972; Vol. 833, c. 1859–73.]
  The power-sharing policy, unpalatable, rejected, despised and unworkable though it has been, has been followed
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  consistently since that day, not by chance, but as a deliberate act of policy embarked upon by the right hon. Gentleman and his Government at that time. It was embarked upon in order to bring about a lasting—that is, a permanent—solution to the problems of Northern Ireland.
  If power sharing is to bring about its stated end, it cannot be between people who are low down in the Northern Ireland Government structure. It has to be at the highest level. It has to be, as has been said by my hon. Friend the Member for Antrim South (Mr. Molyneaux), between Unionists and Republicans. It is not a question of its being between Unionists and some Roman Catholics or between Protestants and Roman Catholics; it has to be between Unionists and Republicans. That is the deciding factor. I will come to the 70 per cent. in a moment or two.
  If the power-sharing regime is to be effective it must have a coercive force. Without that element of coercion no Unionist and no Unionist Party will ever go down the path which leads clearly to a united Ireland and to the permanent solution for Ulster of Dublin rule over a politically united Ireland. Some will say that coercive force is not present, but it is present. It is simply that all that the Republicans will have to do, especially under the rolling devolution system that is proposed, is to walk out. By that action the whole thing collapses around everybody's ears. That is the coercive force that will be used against the majority political parties in Northern Ireland if this operation ever gets under way.
  If power sharing is not the desired end, there is no reason at all why all the powers that the Northern Ireland Government and Parliament could have retained in 1972—all the powers that they had except security—could not have been put back into the hands of the people of Northern Ireland at any point between that day and this. There was no reason why it should not have been restored, and restored under the same system of majority role that had pertained up to that point. The fact that it has not been done proves the case that I am making. Not only those powers, but also the lesser system proposed in the Conservative Party manifesto for the last general election, have been deliberately withheld. All the systems proposed by Governments down the years have been for powers and control of functions for less than that which Brian Faulkner and his Government refused to consider as worth keeping as a devolved Parliament in Northern Ireland.
  It has always been clear that no Government intend to restore security powers if they can avoid it. If it is at all possible they intend to keep any effective control of security out of the hands and the knowledge of the people of Northern Ireland. One of the great difficulties that we all find is that we cannot have the detailed knowledge of security policy and security action and intelligence in order to make the balanced judgment that has to be made. Therefore, the Secretary of State should not be surprised whenever we complain, because there is no way in which any hon. Member for Northern Ireland can take any responsibility for the security situation in the Province unless we have control and power to direct the security forces within it.
  Faced with the problems that were thrown up by the demise of the 1920 Stormont parliamentary system, Northern Ireland politicians reacted in many different

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  ways as to how they would maintain the Union. After having given the matter some thought, on 28 March 1972 the hon. Member for Down, North (Mr. Kilfedder) said:
  "I am not an opponent of direct rule—by no means. By that I mean I support the full integration of Northern Ireland within the rest of the United Kingdom. To me it is far better to have full direct rule—full in the democratic sense—than a sham Parliament at Stormont."
  Later, he said:
  "I have been criticised by Unionists for holding these views, but I hold them firmly, and I am of the conviction that the best future for Northern Ireland is to be fully integrated within the United Kingdom. I do not believe that a local Stormant Parliament can preserve the union as strongly as if we were fully within the United Kingdom. Then there would be one people with one Parliament."—[Official Report, 28 March 1972: Vol. 834, c. 282.]
  On 24 March 1972 the hon. Member for Antrim, North (Rev. Ian Paisley) said:
  "Will he tell us why this Government, having accepted that the citizens of Northern Ireland are part and parcel of the United Kingdom, will not completely integrate Northern Ireland into the United Kingdom?"—[Official Report, 24 March 1972; Vol. 833, c. 1871.]
  On 28 March 1972 he said:
  "The House should face the reality that Stormont is a thing of the past. It is no use Unionists thinking that by some way or other Stormont will return, because I am afraid Ichabod has been written over it and the glory has departed."
  He went on to say:
  "face the reality that Stormont the way it was will not be returning. Having faced that reality, we must look to see what doors lie ahead for the people of Ulster."
  The hon. Gentleman also had some good advice for the people of Ulster at about the same time when he said:
  "'the voice and the advice of Mr. Craig are the voice and the advice of folly. Anarchy cannot be answered by more anarchy; lawlessness cannot be answered by more lawlessness'. Any responsible member of the public who says that the Protestant community should make Northern Ireland ungovernable is playing into the hands of the enemies of the Ulster people."
  He also said:
  "the people who took part in strikes seeking UDI want to make Northern Ireland ungovernable or want to call the Leader of the House and Secretary of State designate a traitor."—[Official Report, 28 March 1972; Vol. 834, c. 340–43.]
  No one should think the people who took part wanted to do that.
  The views expressed by the hon. Member for Antrim, North were the settled views of his party at that time. When speaking on the same subject, in the Stormont Parliament, on 28 March 1972 Rev. Beattie said:
  "we have to be realists because if Parliament is returned"—
  that is the Stormont Parliament—
  "it will be returned on conditions unacceptable to many hon. Members and unacceptable to the Protestant majority in our country. … My hon. Friend the Member for Bann Side"—
  who is the hon. Member for Antrim, North in this House—
  "and myself have been taking a line on this matter and we have advocated that if the powers of this Parliament are to be interfered with then Westminster should fully integrate us within the United Kingdom."
  Later, he said that if Stormont was to continue as a pruned Parliament, the only viable proposal was full integration within the United Kingdom.
  The House will gather from what has been said since and from what I have said, that there has been some slight shift of ground since then by some people. However, let the House clearly understand that the Ulster Unionist Party has always sought the return of a devolved Parliament on acceptable, democratic terms. We are not interested in rigged Governments, Parliaments, elections or systems of election that we have to suffer under. If the Secretary of
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  State cares to read up the debates for 1972, he will find that proportional representation was brought in in order to help the Alliance Party. It does not seem to have done very much for it.
  It is against that background that we place in the balance all the various schemes for devolution that have so far been put before us. On every occasion the Unionist population of Northern Ireland has found them wanting. We have asked for the Stormont type of devolution and we have constantly been offered the Sunningdale system. In the Bill as it is constituted the Frankenstein's corpse of Sunningdale is being stitched together—perhaps I should say, in the light of the words used by the Secretary of State when he met us on 8 March at Stormont Castle, cobbled together. It has been put back on the life-support machine. This time the Secretary of State has made it perfectly plain that he intends to keep switching the machine off and on, regardless of life being clinically extinct. Every time the cobbler arms himself with office and with the prestige and patronage that office can bring, and manages to recreate the 70 per cent. cross-community group, the switch will go down. Every time the Republicans walk out, the s w itch will go up. We will not have rolling devolution, we will have yo-yo devolution.
  May I turn briefly to paragraph 43 and the 70 per cent. that has given the right hon. Member for Mansfield (Mr. Concannon) some difficulty? I can assure him that that difficulty is widespread in Northern Ireland as well. I think that I can help the right hon. Gentleman and those in Ulster who are misled by it. A careful reading of paragraphs (a) and (b) will show that the only difference between 70 per cent. and a majority of less than 70 per cent. is that the Secretary of State has to lay the matter before the House if there is a 70 per cent. majority, but can forget all about it if the majority is less than 70 per cent. Whether the figure is 50 per cent. plus one or 90 per cent. there must be cross-community support. That is the only difference.
  I assure the right hon. Member for Mansfield that the figure of 70 per cent. is purely a smokescreen to make people think that a 70 per cent. Unionist vote is good enough. It is not. A careful reading of those two paragraphs will quickly reveal that. The Secretary of State will recall that at that meeting on 8 March we expressed opposition to the 70 per cent. system of cross-community support. The Secretary of State will recall that we were surprised to hear both from him and his officials that he had previously read out that proposal to all the other Northern Ireland political delegations that had gone to see him. I also recall that my hon. Friend the Member for Antrim, South (Mr. Molyneaux) had to ask him what he was reading from. My hon. Friend was then told that the Secretary of State was reacting from a draft of the White Paper. When the Secretary of State read that to the other political parties did he say where it came from? Whenever I mention this matter in Northern Ireland I am told that nothing was read out to the others. That is an important point and I hope that the Minister will clear it up. On that occasion, we went into the matter quite deeply.
  Mr. John Patten: I am not one of those who subscribe to the conspiracy theory of history. Surely the hon. Gentleman recognises that the Secretary of State was more open in his discussions in the Province during the period leading up to the publication of the White Paper than any

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  hon. Member has been in the past 10 years. My right hon. Friend should be paid due compliment and should not be insulted in that way.
  Mr. Ross: Of course I accept what the Under-Secretary says. I merely asked whether that paper had been read to the other political delegations before 8 March, when it was read to us. If it was read to them, were they told what it was? That is the point at issue and it needs to be answered. Did the other delegations understand it? Given the reaction throughout the Province since then, it would seem that they did not.
  Mr. Peter Robinson: As the Secretary of State has not answered the hon. Gentleman's point immediately, perhaps I can make some useful comment. I think that the hon. Gentleman will find that the Secretary of State has been more open with his party than with some others. Indeed, he was willing to address the executive and to go up lanes to give details to members of the party. Nothing was mentioned to us in any detail before the Official Unionist Party put out the minutes of a meeting in which the details were made known. The White Paper was not read to us before then. Indeed, at that time I asked the Secretary of State—outside the House—whether he had the draft of the White Paper and he said that it was not even ready.
  Mr. Ross: The House will understand why my party attaches importance to that point. Perhaps the Secretary of State will consult his hon. Friend the Under-Secretary of State so that he can give us the facts from the Dispatch Box. Others who were present might want to interrupt me about what happened on that occasion. It is an important point in Northern Ireland. The validity and accuracy of the statements made have been called into question and the situation cannot be allowed to go on.
  No doubt some in Northern Ireland believe that if a few Roman Catholics from the Alliance Party are involved in the cross-community support it will satisfy the Secretary of State. I do not believe that. He will not be satisfied that a few Roman Catholic politicians from the Alliance Party are sound evidence of cross-community support. Others believe that if we could find a few of those who are sometimes, insultingly, referred to as castle Catholics or—even more insultingly—as tame taigs, the necessary degree of cross-community support would be evident. I do not believe that nonsense either.
  Only an acceptance of Republicans at the highest levels of the executive in any body that is set up will be accepted as cross-community support. I am not sure whether the Republicans will include only the SDLP or whether they will have to include the offical IRA's representatives, republican clubs or whatever they are called. However, there is no doubt that Republicans of some sort or another will have to be involved to provide an acceptable level of cross-community support.
  Devolution in Northern Ireland will work only if there is a commitment to and acceptance by the Government of the democratic system. A prominent former Member of Parliament, Sir Winston Churchill, once said of democracy that it might not be the best principle, but it was the only one that we had found so far. If that principle is not accepted in Northern Ireland as it is in Britain, we shall never find a system that will instil confidence in the Province and that will have any hope of ultimate success.
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  In the convention report the Unionist parties had to face that fact of life. They went as far as possible while still remaining within the bounds of what was accepted as democracy. Today, the Government can decide whether to accept the democratic principle or to fail in their present effort. The motions before us are a fairly accurate reflection of the beliefs held. The Bill must be changed. In order to do so we must take the Sunningdale corpse back to the operating theatre for major surgery—which would pretty well disembowel it—and it must undergo widespread plastic surgery if it is to be possible to meet the needs and hopes of the people of Northern Ireland.
  Today, the Secretary of State said that direct rule was the second option. I cannot understand why so many politicians talk of direct rule as the second option. It is not. It might be the third or fourth option, or the last option before a United Ireland, but it is not the second option. The second option is probably some form of local government reform.
  The Secretary of State said that if direct rule continued, it would deny the minority the opportunity to achieve its objectives. Whether or not the right hon. Gentleman was aware of it, the minority that he spoke of is a Republican minority. The right hon. Gentleman was really saying that if the House did anything to tie the Province more tightly into the United Kingdom or did anything to put the Union beyond question—by permanent total integration, or by the restoration of a democratic form of devolution at Stormont—it would deny the Republicans their ultimate objective of a united Ireland. Of course, that is where I began. That is the point at issue and the point that successive Governments and our political masters in Ulster have apparently failed to grasp. If they do not grasp it, the present situation in Ulster will go on beyond the lifetimes of any of us.
  Because none of us want that, because those who represent constituencies in Northern Ireland have been to too many funerals, because there are too many widows and we have seen too many of our friends killed and too many businesses blown up, we want to see something done that is sensible and solid. The only sensible course is a democratic course. It works here. It was good enough for the Government on the day when the Labour Government fell, when one-sixth of one per cent. was good enough. If it is good enough here, it is good enough for Ulster. If it is not good enough for Ulster it cannot be good enough for any other place.
  The Secretary of State raised the question—perhaps unwisely—of direct representation to the House from Ulster. He drew attention to the 17 seats and said that they would remain. We do not have them yet. That process has not finished. The right hon. Gentleman said that those seats would remain until full devolution was achieved.
  The right hon. Gentleman went on to talk about Northern Ireland having a higher than normal rate of representation with those 17 seats. That is incorrect. Seventeen is roughly the quota for Wales. Whenever proposals were made for the devolution Bills concerning Scotland and Wales, guarantees were given that representation from both Scotland and Wales would remain. Therefore, any case that the present Government or any future Government try to make for cutting down the 17 Ulster seats in future has been slain before they began to think about it.
  Several Hon. Members rose—
  Mr. Speaker: Order. The speech of the hon. Member for Londonderry (Mr. Ross) lasted 35 minutes. He is not the only member of his party who is trying to catch my eye. There is a long list of right hon. and hon. Members who wish to speak. Unless hon. Members make speeches of reasonable length, many hon. Members who wish to explain their position will be unable to do so.
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  Mr. Peter Robinson: I shall take your comments to heart, Mr. Speaker. In addressing the House I am mindful of the fact that there is no other matter affects the people whom hon. Members from Ulster represent as much as constitutional change. Therefore, when we come to debate this subject it is essential that we do so thoughtfully and with the best of motives and intentions.
  When looking at a change of system of government in Northern Ireland, the first essential is to consider the present system. One point that I have in common with the hon. Member for Londonderry (Mr. Ross) is that direct rule, despite the fact that the White Paper says that it has done so, has not served Northern Ireland well. It is not the second option of my colleagues.
  We might come closer to the comment made by the Secretary of State that direct rule is tolerated, but it is not an option that we believe is to the benefit of the people of Northern Ireland. It is slow, evasive, unaccountable, unrepresentative and bureaucratic. As I have said that, hon. Members will guess that I am not in the fan club of direct rulers. It is accepted that local government, being bereft of power, and the small allocation of seats in the House, have left Northern Ireland people without proper democratic structures and representation. Therefore, that system must be ended and I look at any proposal with that at the back of my mind.
  The right hon. Member for Down, South (Mr. Powell) intervened to say that local government, through the Department of the Environment, had the opportunity for a consultative role. He said that invariably its advice was accepted.
  Mr. J. Enoch Powell: Almost invariably.
  Mr. Robinson: As a member of a district council for about six years, I can tell the House that that advice invariably is not heeded, and that on roads and planning matters invariably the Department goes its own way despite the unanimous wish of the council. Therefore, there is no democratic accountability for local government. I am happy to hear that the right hon. Gentleman may have had a more pleasant experience in South Down than I have had in East Belfast.
  Economically, our Province is being destroyed by direct rule. In the matter of security it is being destroyed by direct rule. Direct rule has brought about changes in the Constitution that are to the detriment of Northern Ireland. Therefore, I wait impatiently for the time when the Stormont structure is returned to Northern Ireland and we have real and meaningful devolution.
  I am realistic and pragmatic enough to understand and accept that it is not likely that the ideal solution that my party and I espouse will be on the table. Hon. Members, no matter on which side of the House they sit, will have to accept that in this package they will not achieve their ideal solution.
  The only criterion that I have to consider at this stage is whether the proposal is an improvement on direct rule
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  and whether it has two distinct qualities. The first is that the proposal must not endanger Northern Ireland's position in the United Kingdom. The second is that it must be capable of leading on to my larger policy of real and meaningful devolution.
  When the Secretary of State announced his proposal he said that it had some immediate functions, which he described as deliberative, scrutinising and consultative. When he was selling his words to the public he made it clear to them and to my colleagues in private that that deliberative role would enable them to discuss even matters of national interest. My colleagues and I welcome that. The right hon. Gentleman said that the scrutinising role would be a means of calling direct rule into account and for hon. Members to be able to probe what was going on and the reasons for the decisions that were made. Naturally, my colleagues and I welcome that. Those of us who must sit here in the early hours of the morning while Orders in Council are discussed will be only too glad to have a consultative role that allows us the opportunity to speak on the issue. Therefore, my colleagues and I welcome the consultative role.
  The Bill does not entirely live up to the Secretary of State's salesmanship of the early stages. I shall take the three functions one by one. The first is the deliberative function. Clause 3(1)(a) says that the Assembly
  "may … consider any matter affecting Northern Ireland which is not an excepted or reserved matter".
  That is the first qualification. As was said in the debate on the White Paper, that qualification would not enable hon. Members to discuss matters even as significant as security. Those matters are of such significance to the people of Northern Ireland that it is essential for the hon. Members who represented them to be able to deliberate and consider them. As a district councillor, I find it peculiar that I can speak on security issues in the council chamber, but if I were elected to the Assembly, under the Bill as it stands I should not be permitted to do so unless the Secretary of State deemed it permissible.
  As a district councillor I am entitled to be a member of a police liaison committee and to have consultations with the police chiefs in my area. As a member of a district council I can be on a local security committee and have UDR, Army and police chiefs brought in for discussions. We have found those discussions valuable. I cannot do that as an Assembly Member. The Secretary of State must look hard at that.
  The Bill does not make it essential that the Secretary of State's proposals for Orders in Council are put before the Assembly. He may do so, but, equally, he may not. It depends on the good nature of the Secretary of State whether the Members of the Assembly are consulted.
  On the matter of scrutinising power, the Secretary of State has made it clear that neither the Assembly nor its Committees shall have the power to require any person to give evidence or produce papers. What faith or confidence can the people of Northern Ireland have in the ability of Members of the Assembly to scrutinise direct rule if the people who come before it and the papers produced depend upon the good nature of the Secretary of State, who is in charge of direct rule? Those functions will depend upon the grace and favour of the Secretary of State.
  I do not believe that the Bill lives up to the White Paper or the Secretary of State's press statements. As someone who believes in devolved government, I ask the Secretary of State to meet us on those points, in order to make the

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  first and immediate task of the Assembly meaningful and worth while. Even if the right hon. Gentleman does that, that is not devolved government. It is a step on the way. If all that we are being offered is an instalment, we should take it, provided that it does not endanger the Union and that it leads to the achievement of our long-term policy.
  I have described the devolving part of the proposals as a dog's breakfast. The Secretary of State has caught hold of a mechanism triggered off by a figure of 70 per cent. Immediately 70 per cent. agree on a proposal, it is to be brought before the House. I am sure that the right hon. Gentleman is committed to having his proposals accepted by a simple majority in the House. We in Northern Ireland will not be offered the same option.
  I put two points to the Secretary of State. First, it is the clear intention of my colleagues to submit amendments requiring a simple majority. That is recognised as democratic throughout the world. I believe that it is also right for Northern Ireland, but if the Secretary of State believes that the magical figure of 70 per cent. is necessary he should be consistent. If he argues that one cannot effect constitutional change in Northern Ireland without having that degree of support, that must surely apply to all constitutional change.
  I am waiting with great interest—I know that it must be an oversight—for the Secretary of State to change section 1 of the Northern Ireland Constitution Act 1973, which states that there shall be no change in Northern Ireland's position within the United Kingdom
  "without the consent of the majority of the people of Northern Ireland".
  I trust that he will change that to require 70 per cent. cross-community support in Northern Ireland. If constitutional change in the Assembly requires 70 per cent. support the most fundamental constitutional change of putting a country out of the United Kingdom should require that same degree of acceptance.
  In the Secretary of State's press statements he has made great play of the safeguard that the political parties would have within his scheme. He has stated that if they do not wish to go along any particular path they have the ability and power to say that they will not go along it, they will be shielded against forced movement, yet he has retained, if not strengthened, that section of the Northern Ireland Constitution Act 1973 that allowed him to appoint an Executive. It is the same section that caused the United Ulster Unionist Council to clean the board in the 1974 Westminster elections and caused the Ulster Workers Council strike.
  Will the Secretary of State, if he is sincere—I am sure that he is—look again and take out of the Act that section which permits him, without the consent of the Assembly, to appoint an Executive? I believe that he will be prepared to do that if he is genuine. Will he confirm—as he has in private meetings to my colleagues and myself—that the cross-community support is not participation of parties in an Executive, but their support for a system of government and that the SDLP is not an essential ingredient in the cross-community support?
  I believe that it is important for the people of Northern Ireland to know what this cross-community support is. We have gone through something similar before and learnt by hard and bitter experience. In 1974, an Act was passed. A convention was set up in 1975. It was given a simple
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  task—to define a proposal that would have the most widespread acceptance in Northern Ireland. The elected Members came up with a proposal that had that acceptance. They did exactly as the House asked and met its criterion, but when the proposal came before the House it was rejected. I believe that it is only fair to those who will be elected to the Assembly that they should know the ground rules and how to score and succeed under the system. Let us know what the cross-community support is and what it has to contain.
  If it is the Secretary of State's intention, as some say and many suspect, to bring about a power-sharing Administration by this mechanism, I feel that failure will result. I believe that it is possible to have in Northern Ireland a system of government which is fair to all sections of the community and which maintains the right of every individual and minority to have a role in the Assembly, but which still holds strongly the belief that the democratic will of the people must be the only criterion and the ballot box the only door to government.
  My party is as opposed as ever to enforced power sharing. I believe that it would be bad for Northern Ireland. There would be no collective responsibility or role for the Opposition. We would have people in Government who did not believe in the existence of the State and who would use their position to further their goals. The losers in an election become the Government and we finish up by government by the lowest common denominator, and mongrel policies are all that result.
  I ask the Secretary of State to make it clear that it is not participation in an Executive that he requires, but support for a system of government. We have no alternative but to vote against the Bill as it stands. We shall table amendments to clear up its many imperfections, but we shall not be counted among those who wish to use the Bill's imperfections to scuttle the idea of devolution.
  Mr. William Ross: What essential difference does the hon. Gentleman see at the end of the day between participation in a Cabinet and support for the Government?
  Mr. Robinson: There is a significant difference. If it is possible to get a democratic system of government which does not contain Republicans, which has the support of 70 per cent. of the Assembly and which is acceptable to the Secretary of State, that is very different from having a Government with Republicans in it.
  We need devolved government. Direct rule has been a disaster for the Province. With the greatest charity, when direct rulers make mistakes they or their families do not lose jobs, go on social benefits or go homeless. The sooner that we have accountability, with the energy, enthusiasm, drive and vigour of the Ulster people being used in a democratic forum, the better it will be for Northern Ireland.
  6.11 pm
  Dr. Brian Mawhinney: There can have been few Bills recently on which hon. Members' views have been made as clear in advance as on this one. I repeat what I have said before. I welcome the Bill. It recognises the genuine wish of people in Northern Ireland to have a devolved Assembly. There is argument about what form the devolved Government should take, but that cannot be agreed until the Assembly is operating. It is the only way in which the regrettable community divisions can

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  be bridged. The Bill does not impose on the people of Northern Ireland a form that they might find unacceptable. It offers devolution. It is up to them to work out the details.
  My right hon. Friend the Secretary of State will doubtless want to thank the right hon. Member for Down, South (Mr. Powell) for his gratuitous advice during the White Paper debate on what he said was the inherently impossible task to which my right hon. Friend had set his hand. I, like others, pay great attention to what the right hon. Gentleman says. We consider his words with care. In the debate he said:
  "When we talk politics, as we do when we discuss constitutions, we are not talking about Roman Catholics and non-Roman Catholics. When we talk politics we are talking about those who are elected to maintain and those who are elected to destroy the Union. Of course the latter have a right to that opinion; but that is what they are in politics for, that is what they seek votes for, that is what they are elected for by those who elect them."—[Official Report, 28 April 1982; Vol. 22, c. 924.]
  That statement sounds admirable but it does not bear scrutiny. Few who seek to destroy the Union, such as the gunmen, are elected. The right hon. Gentleman makes a poor job of drawing a distinction between Roman Catholics and those elected to destroy the Union.
  My hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison) again referred to the poll which showed that 45 per cent. of Catholics were in favour of integration and 67 per cent. in favour of a devolved Assembly. Whatever else may be said about the minority community, it cannot be said that its representatives seek to destroy the Union, as the right hon. Gentleman would have us believe.
  My hon. Friend went on to say that it was demonstrably foolish and mischievous to identify Roman Catholics with the Republican cause. When I read the right hon. Gentleman's speech on the White Paper I failed to find out what he was advocating for the governance of Northern Ireland, so I went back to the 1972 debate on the abolition of Stormont. There the right hon. Gentleman made it clear that he had long been an advocate of integration. He still is.
  For two and a half days last week I was in Belfast primarily at the invitation of the Ulster Unionist women's council to speak at its annual rally. I pay tribute to the hon. Member for Antrim, South (Mr. Molyneaux), who is not in the Chamber, for his generous and kind welcome. I talked to over 100 ladies. A number were for the proposals, in substance or amended, a number were for Stormont-type devolution and a few were for direct rule. Not one was in favour of integration.
  In the 1972 debate the right hon. Gentleman said that he could support integration only if it had
  "the full-hearted consent of at least the majority in the Six Counties."
  Integration is not the preferred option of the majority.
  I thought that the right hon. Gentleman might have been advocating direct rule, but I read on. On the abolition of Stormont and the imposition, or introduction—call it what one will—of indirect rule—he stated:
  "this measure is the opposite of union. It is the opposite to a declaration of intending and recognising the union of the Six Counties with the rest of the United Kingdom. So it is not surprising if it should be deeply and instinctively offensive, and should appear to be dangerous, to those who believe in that union and are devoted to it."
  He also said:
  "The form of direct rule in this Bill emphasises, instead of removes, the distinction and the difference between the Six Counties and the rest of the United Kingdom. That distinction
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  is even sharper and more marked in this Bill than under existing legislation."—[Official Report, 28 March 1972; Vol. 834, c. 269–272.]
  I am, therefore, somewhat confused. I pick the speeches of the right hon. Member for Down, South because he has been by far and away the clearest and most marked defender of the form of integration. But by his own speech he makes it clear that he does not favour the imposition of integration because it does not meet his own criterion. He is against direct rule and even more against direct rule vis-a-vis Stormont. Then I read recently a helpful comment in the papers. It was reported that the right hon. Gentleman was advocating that our constituents should vote Labour at the next general election. Perhaps that was the clue.
  Mr. J. Enoch Powell: I made no such statement.
  Dr. Mawhinney: The House will be pleased to have that assurance. No doubt those in the media who reported him will want to make suitable corrections. Nevertheless, the position of the right hon. Gentleman on the European Community, and knowing on whose side he stands, makes it at least a possibility that he has a slight sympathy with that new point. But it is the Labour Party that is offering to the people of Northern Ireland a form of unification with consent.
  I have taken some time to deal with this aspect because it needs to be put on record that although some people may not support my right hon. Friend's proposals, the alternatives command no respect.
  Arguments have been put forward against my right hon. Friend's Bill. The first relates to the 70 per cent. proposal. The right hon. Member for Mansfield (Mr. Concannon) seems to be edging towards downgrading the 70 per cent. and upgrading cross-community support to a point where 70 per cent. may cease to have any relevance. In advocating that, the right hon. Gentleman is in effect saying that we should go back to an imposed form of power sharing. That is not acceptable to Conservative Members, nor to many people in the Province. The whole point about 70 per cent. is that is should reflect cross-community support on the basis that in previous elections the Unionists together have not mustered much more than 60 per cent. of the vote. Therefore, to attain 70 per cent. is, by definition, a measure of cross-community support. To add to that the sort of exclusions suggested by the right hon. Member for Mansfield is to go way down the road to undermine the Bill.
  I understand the point that cross-community support is necessary. The White Paper makes that clear. We cannot go forward without it. It is the element of stability that we all seek. The minority have rights, but the minority cannot have a veto. Any arrangement that is designed to give a veto to the minority will not, by itself, contribute to stability.
  Mr. Concannon: It seems that we are to have a very good argument on this issue in Committee. I stress that I see cross-community support as being much more important than an arbitrary figure of 70 per cent when we do not even know what the collection of 78 members will be. The Convention figures show that the Unionist seats were 66 per cent. at that time. That is a very good veto. The SDLP only had 22 per cent. No way is the SDLP to have a veto. Neither would I want it to. We should be

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  looking for the cross-community support that we all desire, not just an arbitrary figure that might not meet the hon. Gentleman's requirements.
  Dr. Mawhinney: I am grateful to the right hon. Gentleman for clarifying that he does not want the minority to have a veto. That is an important point to consider while bearing in mind the minority's rights.
  The second point relates to security. I listened with a great deal of sympathy to the hon. Member for Londonderry (Mr. Ross). It is easy for those of us whose constituents are not being killed and whose constituents are not walking behind coffins to take a remote attitude towards problems of security. I am inclined to listen to the representatives of the people of Northern Ireland when they talk about security. I discovered only last week that there is a limit beyond which nobody believes that increasing the Army will increase security. On the other hand there may be a case for increasing the police establishment in certain areas of the Province, particularly in parts of Londonderry and West Belfast. I ask my right hon. Friend to consider that proposal.
  I agree with the hon. Member for Belfast, East (Mr. Robinson) on the subject of a security committee. The Assembly cannot be debarred from debating a central issue in the life of the Province. Knowing Ulstermen as I do, if we seek to debar them from doing that, they will do as we do in the House and debate it under points of order. It would be much better if my right hon. Friend would tell the House that he will sympathetically consider setting up an advisory security committee.
  I refer now to the economy. Those who are opposed to the Bill have not explained exactly how they will reverse the economic decline of the Province. I was interested in the speech of the hon. Member for Belfast, East. He said that direct rule has destroyed the economy. I do not for one moment agree if by that he means it has been destroyed by the Government's economic policy. Nor do I agree if he is saying that the Government have withheld public expenditure from the Province. On the contrary, we are spending about 30 per cent. more per taxpayer in public expenditure than in the rest of the United Kingdom. The commitments on De Lorean and Harland and Wolff show the Government's economic commitment to the Province.
  Time and again over the past few days people have said to me that we must find some way of attracting investment to the Province. We will never do so without some evidence that the communities are at least making an attempt to work together. That is fundamental to my right hon. Friend's proposals. I have heard no significant argument on why investment should now be produced under direct rule when it has been slipping away over the past months.
  On Thursday night about a dozen, mainly professional, people invited me to meet them. Some of them belonged to political parties in Northern Ireland and some did not. Some were Catholics and some were Protestants. For three-and-a-half hours they talked about how it would be possible to implement the Bill and how they could exercise some influence. I was not entirely satisfied that they were serious and said that if they were they should try to produce some evidence over the weekend. At five o'clock on Friday afternoon I was offered a draft of a letter which in part said:
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  "We are convinced that genuine compromise between Unionism and Nationalism is the only way forward in dealing with our urgent economic and security problems. We therefore call on our elected representatives to make a positive attempt to seize the opportunity offered by the Government's proposals and to have the courage and statemanship to acknowledge that compromise is a worthy course and not a sign of weakness. It is indeed the only possible basis for a resolution of a conflict of ideals between two equally legitimate identities and aspirations.".
  I told those people "If I stand up in the House of Commons on Monday and read that, I shall be assailed because it does not have much support". They replied "We shall get you a few signatures". I told them "If you get me 30 or 40 signatures, perhaps someone will pay some attention".
  At lunchtime, I received a telegram showing that a statistically unrepresentative group of middle-class Protestants and Catholics now feel that the time has come to use these proposals as a basis for progress. That telegram indicated that within a period of 48 hours 166 people were given the opportunity to sign the letter and that 161 did so. I believe that in some small, statistically insignificant but perhaps politically important way the people of Northern Ireland, through the professional people, are beginning to say "We may not like these proposals in toto, but we see them at long last as a basis of moving forward and of bridging the gap between the two communities that has existed for far too long and behind which both communities have sought refuge for too many years. Please tell the House of Commons that we support this measure". I am pleased to oblige them.
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  Mr. James A. Dunn: I am pleased to follow the hon. Member for Peterborough (Dr. Mawhinney) and I am encouraged by the latter part of his speech and by the contents of the draft letter that he quoted. The fact that at present only 160 people have signified support should not be taken as final, because I am sure that there will be many more.
  It is, however, disappointing that so far only certain sections of the community are responding in that way. I know from personal experience, disappointing though it may be, that that would not be the majority response among all sections of the communities in Belfast. I doubt whether that type of response would be forthcoming in other localities.
  I would be as disappointed as I am sure the hon. Gentleman would be if that letter did not have the impact that we both desire. To do less than recognise that fact would do both of us a great injustice and would not serve the interests of the people of Northern Ireland, which is what we are attempting to do in the debate.
  I support the Bill's Second Reading. There are no words in the amendment that attract me. I speak on behalf of my colleagues and some other members of the alliance, although I have not had an opportunity to consult them all. Naturally—[Interruption.]—Are Conservative Members trying to make mean and petty political capital out of such an important subject? If you do a statistical exercise, by God, you are not well represented, unless you want to oppose the Bill. That is why most of you are here—[HON. MEMBERS: "Order".] I use the language of the area in which I was brought up. I do not employ the niceties of the verbiage of certain Conservative Members.
  Mr. J. Enoch Powell: Obey the orders of the House.
  Mr. Dunn: I am obeying the orders of the House. The right hon. Gentleman should not stimulate me to a reply, because he will always get one.
  I have the support of my colleagues in the Social Democratic Party for what I say and, I believe, of the majority of Liberal Members, although I have not consulted them all. The House should recognise that there are those among us who have opposed, and will continue to oppose, devolution of any kind as it may affect any part of the United Kingdom. I respect those who hold that view. They have a right to hold it and they have justified their sincerely held belief. However, I do not share it. That is a mark not of disrespect, but merely of disagreement with their judgment.
  I have limited experience of Northern Ireland, hut, in my view, we cannot compare the circumstances there with the rest of the United Kingdom, be it Scotland, England or Wales. The same criteria and challenges do not apply. The situations that apply to the Province certainly do not apply to the rest of the United Kingdom.
  I do not recall people who disagree politically taking any matter to the extremes of armed and physical violence—
  Mr. Bill Walker: I trust that the hon. Gentleman is aware that in Scotland we have had trials and convictions relating to arms and explosives.
  Mr. Dunn: Yes, but they have concerned Northern Ireland and have had nothing to do with what is happening in Scotland, Indeed, any such incidents have been small in number and have soon been stamped out by the people of Scotland. In Northern Ireland, such incidents are encouraged by a number of factors that are not present in Scotland.
  As I have said, I recognise that there are those who have strongly held views against devolution for Scotland, but in my view there is no comparison. I also recognise the sincerity of those who are prepared to pay a heavy price to demonstrate their opinions. In this respect, I pay tribute to the hon. Member for Wolverhampton, South-West (Mr. Budgen). I know the penalty that he has paid. It was not an easy decision to make. It must have presented the hon. Gentleman with some moments of anguish. All the more power to him because he has taken this decision in the light of his honestly-held views. The hon. Gentleman will understand that it is not a mark of disrespect when I say that I do not share his view. I can only judge on the basis of my own personal experience of Northern Ireland.
  I firmly believe that the Secretary of State may courageously have pointed the way forward for Northern Ireland, which no previous Secretary of State has been able to do. I believe that the right hon. Gentleman built upon a number of experiences and that, when the time came, he took the opportunity presented to him. I hope that the Secretary of State will not be offended when I say that it is a pity that his colleagues do not give him the support that he deserves, both in and out of Cabinet.
  The Bill is a step forward into a very sensitive area. If it goes wrong, it could have tragic results. Therefore, it is the responsibility of all right hon. and hon. Members not to make comments which might bring tragedy in the wake of a courageous attempt to resolve some of the problems of self-determination for the people of Northern Ireland.
  Many aspects of the Bill raise questions. I share the reservations of the right hon. Member for Mansfield (Mr.
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  Concannon) about the 70 per cent. As a fixed figure, 70 per cent. may not be sufficient to meet the Secretary of State's original intentions. If the composition of the newly elected Assembly included a greater percentage of the minority population, 70 per cent. could be too high. It could also be too low. I believe that the House should seek an accord, whereby decisions made by the Assembly find support and favour among the whole community in Northern Ireland. With the majority support of the whole of the community, perhaps there would be no necessity to have a percentage figure.
  I shall digress for a moment. I was interested to hear some of the statistics that were bandied about this evening supporting various points of view. They do not impress me greatly. Statisticians argue that if one puts one hand in cold water and the other in hot water, by the time the water reaches one's neck, one has an average temperature. Therefore, I do not take much notice of those who use selectively chosen statistics to impress the Secretary of State.
  However, there is one argument about the 70 per cent. which I hope the Secretary of State will recognise. It will depend on the composition of the Assembly. What is the intention? The Secretary of State is compelled to bring before the House any proposal put forward by the Assembly, but there are other ways in which that can be done in legislation. Does the Secretary of State believe that would find favour in the House? Would he recommend it, if it had little or no support from the minority community, whether that minority community were Catholic or Protestant? Some seem to think that the minority community is composed only of Catholics. I declare an interest. I am a practising Catholic, although I am not from the Province. The minority community is not composed entirely of Catholics. A substantial number of people, such as those who were mentioned by the hon. Member for Peterborough, are now becoming part of the minority because they see no way forward under other political groups in the Province. Those people should not be disregarded. The time will come when the House will have to recognise that fact.
  I want to say a word about the system of appointing the Executive Committee of the Assembly. By what method and on what criteria will Executive members be appointed?
  I also want to express concern about the method of choosing the Presiding Officer, whether under section 24 of the 1973 Act or any other provision. The Presiding Officer should be elected or appointed with great care. That person will hold great power and will greatly influence the work of the Assembly. That officer will have the responsibility of appointing chairmen and deputy chairmen. Doubtless, that person will also make recommendations about the composition of the constituent committees to deal with various departmental matters. He or she will also be responsible for the way that resolutions, reports or recommendations are framed and transmitted to the Secretary of State and eventually brought before the House. Thus, great caution should be exercised.
  I hope that we shall hear from the Secretary of State, from those who advise him and perhaps from those who will answer on his behalf tonight on this matter. If the Secretary of State cannot answer all the questions that have been posed today by right hon. and hon. Members, I hope that he will take an early opportunity to reply in writing,

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  and thus ensure that, before the next stage of our proceedings, we know his intentions and those of the Department.
  I want to raise a number of other minor issues. A number of points in the schedules cause concern, not least about the way in which the Presiding Officer and the constituent committees are to be appointed. We should appreciate clarification of the intention of schedule 2, paragraph 1(6). What does that provision mean? Will the Secretary of State redraft subparagraph (4)(b) to include the words
  "throughout the whole of the community"
  instead of "throughout the community"? Everyone will then know what it means and will understand that, unless there is cross-community support, any proposals that might have the support of the Assembly will have little chance of success.
  I also want to say a word about schedule 2, paragraph 3. How many persons would be involved in this provision? Might I recall an anxious moment, to which vague references have been made today, and ask: what salaries are envisaged for Members of the Assembly, deputy chairmen, chairmen, and the Presiding Officer? What expenses will legitimately be allowed? What other emoluments will be paid to people holding office? Most important, to what level will shared responsibility and disclosure by Ministers be made to the people who hold the positions as Presiding Officer, chairmen, deputy chairmen or members of the Executive? The Secretary of State might be criticised if he were to share fully some of the responsibilities of his Department, such as security, though not necessarily law and order.
  Ultimately, we shall require sufficient time in which to consider each of the clauses and any amendments. The Secretary of State should appeal to those who control the parliamentary timetable to ensure that that happens.
  Will the Secretary of State consider including in the Bill a provision for an annual report and audit to be presented to the House, with a debate set down in the manner in which debates are arranged on other parts of the United Kingdom? At the same time, will he consider setting up a Committee to undertake the first perusal of recommendations and reports coming from the Assembly? They may have the Secretary of State's approval, but I hope that parliamentary approval will not be sought for them at some late hour. Indeed, I hope that such important matters will never again be considered at a late hour.
  6.50 pm
  Mr. Maurice Macmillan: I very much dislike having to oppose a measure that is brought forward by my right hon. Friend the Secretary of State—partly because I have a great affection and admiration for him and partly because he has tried so hard in circumstances which most people, on reflection, would regard as almost completely hopeless.
  In the course of the debate, the main argument in favour of the Bill is that "It is not a very good one but it is the best we could do—the best that anybody could do." Some supporters of the Bill, on each side of the Chamber, have rested on the argument "Don't shoot the pianist, he is doing his best." There may be something to be said for that argument, but it is not one that I feel very strongly about.
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  Neither do I support the view that "It is better than nothing and we have to do something." I do not find that argument as compelling as some hon. Members seem to find it.
  Arguments on those lines are at best a counsel of despair and at worst a support for measures that may well perpetuate the conflict that those measures are seeking to avoid. I do not agree with the view that at their worst the measures are harmless and that at their best they may help. I think that at their worst they may do serious damage to the concept of unity within the United Kingdom.
  Already, in company with other European States, we have been slightly battered from time to time by separatist forces. I do not regard the unity of the United Kingdom as being so normal and so certain that it can be left to look after itself. Like liberty, it has to be carefully guarded at all times against threats open and covert.
  Mr. John Patten: May I clear up one point at the end of my right hon. Friend's last interesting passage? Is he predicting that, should the provisions pass into law, the Union would be put at risk, and that terrorism would increase, or is he saying that those things might happen?
  Mr. Macmillan: If my hon. Friend pays attention to the rest of my speech he may find that it contains an answer to some of those points.
  It is a considerable time since the proposals for Scottish and Welsh devolution were brought forward, but I am sure that the House—or those hon. Members of it who are still interested in constitutional questions—will remember the arguments. There was the genuine fear that the Scottish Assembly, if it had real powers, would conflict intolerably with the United Kingdom Parliament. There was the opposite fear that, if the Assembly remained purely advisory, it would become but a method of putting increasing pressure on the British Government to devolve more and more powers to the Assembly, to the point at which the Assembly became more and more a forum for separatist forces.
  The fears were real, despite the fact that in Scotland the party political alignment is on United Kingdom lines, between Left and Right, between free enterprise and Socialism, and so on—apart from the element represented by the Scottish Nationalists.
  I have little doubt—and I think that most of those who took part in the debates had little doubt—that had the Assembly proposals gone ahead, the Scottish Nationalists would have gained strength within the party political alignment. How much more must that apply in Northern Ireland, where the party alignment is not the same as in the rest of the United Kingdom but is solely Unionist and Republican. As the speeches have made clear this afternoon, that is not quite the same as Protestant and Catholic.
  I should like to address a word or two to my hon. Friend the Member for Peterborough (Dr. Mawhinney). I think it encouraging that, as he said, intelligent and able middle class people are seeking a compromise between Nationalist and Unionist. Perhaps I am being over-cynical, but can such a compromise actually be reached? Is it not an attempt to compromise between two ideals which are irreconcilable?
  If we take the nationalists to mean those who wish the two parts of the island to be governed as one, and the Unionists to be those who wish the Province to remain part of the United Kingdom, I think that the wish to

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  compromise in order to save lives and to get a better form of government may well be there, but when the point of conflict comes, that compromise, with the best will in the world, may turn out to be impossible—particularly if, as has been indicated in the debate, the power sharing, although perhaps designed to protect the minority Catholic rights, is envisaged in the Bill as power sharing with nationalist and anti-Unionist elements and not simply with the Catholics.
  Whatever form power sharing may take in this type of Assembly, with this type of constitution, it is bound, in effect, to give a louder voice in the Assembly to the separatists than to the Unionists within the Catholic minority. I do not see how that could be escaped, even without the evidence given this evening that the Government do not wish to escape it.
  The validity of my argument can be judged from what has happened in the past. The White Paper said that devolution had worked for about 50 years. One could argue that Stormont did not produce the disruption or the pressures that I fear the Assembly would produce. Of course, it did not; it had no power sharing. It had a built-in majority and dominance by one party and one party alone. We cannot go back to that, and I think that is why my right hon. Friend is trying to do the impossible. We cannot, in my view, go forward on the lines that he has chosen.
  The proposals seem to contain the same basic contradictions that have made their predecessors unworkable. There is to be an Executive responsible to an elected body in which the minority must, by definition, have as much say as the majority, but not, we are told, a veto. That seems to be a curious and difficult concept, to say the least.
  We have not yet got an Executive, for at least the Bill has the quality that it is not seeking to impose on the Northern Irish, and is giving them a greater freedom of choice. Whether that will turn out to be successful is another matter. If it does, if an Executive is evolved out of this process, how will it avoid the same contradictions as were present in the 1973 arrangements? How will it avoid the West Lothian contradiction? My right hon. Friend really cannot say that that is a narrow, formal, constitutional point; it is not. It is a point of power. It is a point of the struggle for power between conflicting bodies. That is the most worrying element in the proposals.
  The right hon. Member for Mansfield (Mr. Concannon) put it clearly. He saw that to make it work, the Assembly had to be more important than the Government's powers and policies. If he believes that, he is saying that the Assembly must be more important than this House from which the Government's policies derive their only authority. That is a complication and whatever we may say about purely constitutional matters, it is inescapable and would be inescapable in any other type of relationship which has these particular defects, and not only in Northern Ireland.
  In the debate on the White Paper, the right hon. Member for Down, South (Mr. Powell) pointed out that with regard to the position in the Assembly, we were dealing not so much with two communities—Protestant and Catholic—as with two parties—Unionists and separatists. That is what is bound to cause the ultimate conflict. The correctness of his argument was borne out by many hon. Members who contributed to the debate today.
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  Even the supporters of the Bill are doubtful and divided about how well it will work in practice, what precisely it will achieve and how much it will have to be altered to be able to work at all. That is a sad comment on the state of the Bill before us.
  The Bill is likely to be a considerable threat to the unity of the United Kingom. It perpetuates a political division in Northern Ireland based wholly on Irish, that is to say constitutional, divisions between Unionists and separatists. To that extent it weakens the influence and impact of Northern Irish views and Northern Ireland Members in the House. They are overwhelmed by the problems at home and they cannot avoid that.
  The Bill is a retreat from the principle of self-determination as it affects those who wish to remain part of the United Kingdom. As such, I fear that it shows a tendancy which has, perhaps, grown too far and too fast in the past few years. I can understand my right hon. Friend's wish to do something, but the varying opinions that have been put forward in the debate, most of which have been against the Bill, have shown that this desire has been forced on the Government by the continuing difficulties they face—economic, political, racial and, above all, security.
  I beg the Government to consider just how much the campaigns of those who are hostile to the Union depend for their success upon creating in Britain a sense of despair and frustration that leads people to wish to get rid of Northern Ireland affairs as soon as they can. That is the weapon that I fear—the persistence of the terrorist and their supporters, the persistence of the hostility and the continuing difficulties. To say in these circumstances that anything is better than nothing is indeed a counsel of despair.
  7.4 pm
  Mr. Gerard Fitt: From the contents of the speeches that I have heard today, I think that it is very likely that I shall be the only hon. Member representing a Northern Ireland constituency who will support the Government.
  I shall support the Bill in full recognition of the fact that had I remained in my former position as leader of the SDLP, I should probably oppose the Bill, as the SDLP is opposing it in Northern Ireland. That is why I left the SDLP. I passionately believe that the only hope for Northern Ireland is the creation of devolved governmental structures that will receive the support of a cross-section of the Northern Ireland community.
  I know that the counsel of despair, which has been preached today, tells us that we will never get that support and that we are heading for, and perpetuating, conflict if we do create political structures in Northern Ireland. I do not believe that, because I have had the experience of a Northern Ireland one-party State—in the Unionist Government before the abolition of Stormont in 1972—and of the very short period of the power-sharing Executive in the first five months of 1974.
  I am absolutely and honestly convinced that had the power-sharing Executive been given an opportunity we should not have been faced with the tragedy of Northern Ireland, which has escalated since the downfall of the Executive in May 1974. 'The history of Ireland is littered with a series of might-have-beens. I am convinced that had the election of 1974, which was called by the then Conservative Government, not taken place at that time and

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  in that atmosphere, but been deferred for another year—the election had nothing to do with Northern Ireland but was brought about by trade union confrontation—the position would have been different.
  In the 12 Northern Ireland constituencies that were contested in that election, 49 per cent. of those who cast their votes voted for candidates who believed in the power-sharing Executive. The remaining 51 per cent. voted for anti-power-sharing candidates. The election in Northern Ireland was unlike that in Britain, and 51 per cent. of the vote returned 11 anti-power-sharing candidates to the House, and one power-sharing candidate who had the support of 49 per cent. of the voters—myself—was returned.
  That result enabled those who opposed power-sharing immediately to embark on a crusade, because they had 11 seats. To those who did not understand what the election was about and did not understand the passions that divided the Northern Ireland community it seemed reasonable to say that 11 newly elected Members of Parliament did not support power-sharing and that, therefore, in the eyes of the community, it was a failure.
  It was not that much of a failure, because 49 per cent. of those who cast their votes voted in support of the continuation of power-sharing. That was what the election in Northern Ireland was all about. Those who went to the polls in Northern Ireland in February 1974 were not voting on the miners' strike, the economic condition of the country or the Common Market tendencies. They were voting on the single issue of whether they supported the power-sharing Executive. That was what the election was about. That election brought about the end of the power-sharing Executive.
  The hon. Member for Londonderry (Mr. Ross) spoke of the IRA and Republican intimidation. I accept that that existed then and still exists now, but the right hon. Member for Leeds, South (Mr. Rees), who was Secretary of State for Northern Ireland after the February 1974 election, will confirm that there was massive intimidation against the power-sharing Executive and that it was led, not by the IRA, but by the Loyalist paramilitary organisations, whose intimidation is often even more vicious than that of the IRA.
  The Secretary of State said in the House recently:
  "There are a few in Northern Ireland whom I have met in recent days—I hope I can say there are none in the House—who would seek to draw comparison between themselves and the Falkland Islands."—[Official Report, 28 April 1982; Vol. 22, c. 852.]
  There are many in Northern Ireland on the Republican side and on the Unionist side who drew an analogy between Northern Ireland and what is happening in the Falkland Islands. The Unionists see themselves in the same position as the Falkland Islanders and have frequently hinted at that in the past few weeks. In addition, one has only to recall the attitude of the Irish Government to realise that they see a parallel with what is happening in the Falkland Islands. If nothing is done to allay the fears, such attitudes will do much damage to the Bill.
  I have heard the hon. Member for Epping Forest (Sir J. Biggs-Davison) suggest in Northern Ireland and in the House that a succession of opinion polls seem to show that a majority of Catholics in Northern Ireland support total integration. I do not believe that a significant section of
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  the Catholic community supports total integration. Certainly a minority support that aim, as is clear from the support that they give to the Alliance Party.
  However, the by-elections at Fermanagh and South Tyrone showed that when the crunch comes there is safety in the tribe. Those elections were disastrous for community relations in Northern Ireland. They created the worst polarisation that I have seen in my lifetime, and they convinced the Unionists that every Catholic in Northern Ireland was a potential supporter of the IRA. I regret that the SDLP allowed that to happen.
  I can understand the Falklands Islands syndrome affecting the Official Unionist Party. It wants total integration and does not want to feel isolated. Events in the Falkland Islands are having an effect on the psyche of Unionists in Northern Ireland.
  The hon. Member for Belfast, East (Mr. Robinson) said that he would not support the Second Reading and that if the Bill were approved he would table amendments to abolish the 70 per cent. weighted majority provision and replace it with a simple majority for new legislation. That means, in effect, a return to Unionist one-party government.
  The hon. Gentleman said that on the border poll and the Constitution Act he wanted a simple majority replaced by a 70 per cent. majority. Unionists of all brands and descriptions want absolute safety in the Constitution, a guarantee of their rights and a return of the powers that they held in Northern Ireland for 52 years. We cannot give that to the Unionists.
  The majority in Northern Ireland is an artificial majority, just as the minority is an artificial minority. A British Government drew the border in such a way as to give a 65–35 per cent. split in the population. That created a weighted majority. The British Government did that in 1920, and they ought to give some safeguards to the minority that was created by the will and might of this House.
  Everyone who is involved in trying to create some sanity in Northern Ireland must speak and act with respect for his opponents. I know that following what I have to say now I shall be called "Fitt the Brit" and will be accused of having sold out. I had that when I did not support the activities of the IRA and the terrible tragedy of the hunger strikers last year. However, I have to say that the Taoiseach in the Republic is being anything but helpful in the present situation.
  I refer the Secretary of State to what was said, not by a rural supporter of Fianna Fail, but by the Republic's Minister of Defence, who will be in charge of security in the border areas. Mr. Power said on Monday that Britain was now the aggressor over the Falkland Islands and that there would be no peace in Ireland until British troops were withdrawn.
  I have heard spokesmen for the "Troops Out" movement making such remarks on this side of the Irish Sea, and they certainly have an ally in the Republic. Mr. Power was not speaking off the top of his head, but was expressing the deeply held convictions of a significant section of Fianna Fail representatives and supporters. Those people are supported by the Provisional IRA, which also opposes the Bill.
  The IRA, the Taoiseach, the Republic's Minister of Defence and the hon. Member for Antrim, North (Rev, Ian Paisley) are all against the Bill. We see a strange conglomeration of personalities and political philosophies

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  trying to damn an honest, conscientious attempt by the Secretary of State to bring sanity into what is happening in Northern Ireland.
  We have heard many times about the unique relationship that exists between this island and the neighbouring island of Ireland. We heard that from Downing Street and we have also heard of the totality of the relationship. I can see little evidence of that unique relationship. First, Mr. Power labels Britain as the aggressor over the Falkland Islands, and he has done his damnedest in the Common Market to make things difficult for Britain. Secondly, Ireland is happy with the CAP, but the United Kingdom is not. This country is not happy with its contribution to the EEC budget. Ireland is content—the more it gives, the more it gets.
  There are many things about the unique relationship that should be analysed. The remarks of the Taoiseach in giving some explanation—I would not say an apology—of Ireland's attitude towards the Falkland Islands would be hilarious if they were not so tragic. He said:
  "We in Ireland are a peace-loving people".
  He could have fooled me. Where, in the name of God, has he been living in these last years? I say to the Taoiseach and to Fianna Fail that such speeches and attitudes will do nothing to bring peace to Northern Ireland, but will give justification to the hard-line paramilitary Unionist and the hard line paramilitary IRA. Those are the only people who benefit by such remarks.
  I left the SDLP because I was a sworn enemy of the IRA. I was also bitterly opposed to the extreme nationalism as avowed by the SDLP. This afternoon the Taoiseach has thrown the biggest possible spanner into the works to wreck the Bill. He has appointed one of my former colleagues, Seamus Mallon, to the Senate in the Irish Republic. That will do a great deal to escalate the fears of those hon. Members sitting on the Official Unionist Benches behind me.
  Given the tremendous difficulties and obstacles that have been created, the Secretary of State will not find his task easy. I remember, however, that in 1973 when, under a previous Conservative Government, we were talking about the creation of a power-sharing Executive, everyone said that it would not work. But it did. A significant section of the Unionist Party, led by the courageous Brian Faulkener, and I, as leader of the SDLP, were prepared to forget much of what had divided us for many years. We negotiated with each other. We created a power-sharing Executive. The great tragedy is that it was killed by the 1974 election and the activities of the paramilitaries during the succeeding three months.
  It may not be so difficult as the Secretary of State is being told to find people in Northern Ireland who are prepared to give this Assembly or an election one last chance. The Secretary of State is only too well aware that one cannot govern Northern Ireland from London. I would also say to the Taoiseach that one cannot govern Northern Ireland from Dublin. There can be reason in Northern Ireland only through the co-operation of the Protestant and Catholic populations.
  I accept, after all that has happened and the attitudes displayed over the last three or four weeks that the task will not be easy, but it is worth trying. I advise Right-wing, or hard line, members of the Conservative Party not to show their opposition to their own Government. I consider the
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  Government's proposals an honest attempt to create in Northern Ireland structures that attempt to grapple with the poverty, the social deprivation and unemployment there.
  I represent the estates of Ballymurphy, Turf Lodge, Divis Towers and New Barnsley, where 40 or 50 per cent. are unemployed, where housing conditions are appalling and where a great fear of intimidation exists. I do not go there once a week or once a fortnight. I deal with those problems every day either personally or by telephone or letter. I live every day with the problems of Northern Ireland. The Bill cannot be guaranteed success. I would, however, give the same advice to my right hon. and lion. Friends on the Opposition Benches as I give to people outside the House. We should exercise care over the amendments that are tabled in Committee. If we act in an irresponsible manner, that irresponsibility will he met by irresponsibility where it hurts most in Northern Ireland. The Bill is an opportunity. All hon. Members should do everything possible to try to bring to an end the tragedy that has existed in Northern Ireland for far too long.
  7.25 pm
  Mr. Nick Budgen: As the House listens to the hon. Member for Belfast, West (Mr. Fitt), hon. Members feel the tragedy of Ulster. We also feel a personal respect for the hon. Gentleman's gaiety and generosity. All hon. Members, especially those who are Englishmen, feel diffident about suggesting even partial solutions to the problems of Northern Ireland. I agree with my right hon. Friend the Member for Farnham (Mr. Macmillan) that it is not good enough to say that the Government are having another bash, that the Government, whichever party is in power, are advised by men of great distinction and good-will, and that hon. Members should go along with whatever is attempted this time. Surely hon. Members have some obligation to examine the proposals, to test some of the fundamental value judgments that are made and to expose some of the arguments that we see.
  I say with great diffidence that my particular preference for any constitutional move in Northern Ireland would be to carry out what I thought the Conservative Party promised in May 1979. I do not wish to say that its conclusion in the manifesto—I concede that it was in somewhat ambiguous terms—is necessarily binding on the Government at the present time. I recollect, however, that when my right hon. Friend the Secretary of State brought forward the Employment Bill, with great vigour and generosity, faced by considerable criticism, he was able to rely upon the argument that he was introducing precisely the measures that had been promised in May 1979. That is not a big point. I suggest, however, that the introduction of new powers to local government would be a considerable help in bringing some stability to Northern Ireland.
  The hon. Member for Belfast, East (Mr. Robinson) argues that the district council upon which he sits often puts forward ideas and finds that the Government turn them down. That is an inevitable consequence of belonging to a subordinate body. Members of Wolverhampton district council often put the same point to me. They say, for the sake of argument, "We deny planning permission to Mr. Bloggs and then, blow me, the Secretary of State for the Environment allows it on appeal". That is the consequence of belonging to a subordinate body. The hon. Member for Belfast, East

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  argues that this reduces the opportunity of his district council for doing good. So it does. It also reduces the opportunity for doing evil. The principal argument in favour of the extension of local government is that it leaves Westminster as a supervisory body. That is the best way to safeguard the rights and interests of the minority.
  I imagine that all of us are aware of the failings of one another, but perhaps the House might be agreed that the corporate judgment of the House of Commons is rather good. The more one sees the corporate judgment of the House of Commons, the more one feels that the disinterested, objective view of the House on broad issues is, more often than not, a far better safeguard than any anti-discrimination legislation or built-in constitutional check. The inbuilt sense of fairness, which some of us do not have on some issues, but which we have collectively on all issues, is the best safeguard in our United Kingdom.
  However humbly we approach the Bill, I agree with my right hon. Friend the Member for Farnham that we ought to examine the details with care. We have had some precedent for devolution legislation. All of us will recollect that the two Bills for devolution in the previous Parliament received considerable support on Second Reading. Then, as the Bills went through the House, we found that there were objections, objections that some of us had seen from the beginning.
  I hope that those who see objections now have the courage to vote against the Bill at this stage. It will not be helpful if colleagues come along in a month's time and say "Oh, I have just heard about the West Lothian question," or "Oh, I have just heard that there may be a conflict between the Ulster Assembly and Westminster", or "Oh, I have just heard that we have set up a talking shop that is likely to create nothing but frustration and impotence, and a sense of blaming Westminster for everything that goes wrong in Ulster".
  I suggest that the posture of many of those who will support the Bill tonight is one of putting forward objections, and saying that they can be met at some stage in Committee. It seems to me that the objections of substance fall into two categories. The first category is of those objections that relate to the nature of rolling devolution. One can see that each time one of those objections has been met, the balance is upset.
  For example, objection is taken to the 70 per cent. provision, and it is said by some who wish to see a return to Stormont that they wish to see the 70 per cent. provision done away with. However, the 70 per cent. provision is useful because it acts as a buffer between the Ulster Assembly and the Secretary of State. It enables the Secretary of State, for example, to say to the Unionists who have, say, a majority of 55 per cent. "Very sorry, we do not think that you have cross-community support for this proposal". As evidence of that the Secretary of State will say that this is not his English prejudice but the fact that the Ulster Unionists have only 55 per cent. Take away the 70 per cent., and we increase the potentiality for conflict between the Ulster Assembly and Westminster.
  Again, there are some of the proposals that are made by the Labour Party for an Anglo-Irish dimension. I cannot argue that point better than did the hon. Member for Belfast, West. What happens if, in this system of rolling devolution, we have an interesting change by which—I read this in the papers and am not saying anything out of
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  turn—there is a re-introduction of the Irish dimension? Surely there would be much greater opposition on the Conservative Benches to these proposals. At every stage at which the helpful suggestions are made for improving this so-called programme of rolling devolution, a concession to one side brings opposition from another side.
  I listened with interest to the right hon. Member for Mansfield (Mr. Concannon). As I listened to him saying that he was in favour of devolution, but not this form of devolution, I remembered my sense of irritation as I listened to some of those who led the Tory Party during the devolution debates in the previous Parliaments. That was exactly the argument—we are in favour of devolution in Scotland and Wales, but we think that perhaps it would be possible to find a solution to the West Lothian problem.
  Again, the right hon. Member for Mansfield said that the Labour Party is in favour of devolution but that it wants to be satisfied that there will be no conflict between the Ulster Assembly and Westminster. He went further and said that in his opinion, if by chance there should be such conflict, it should be resolved in favour of the Ulster Assembly.
  These are examples of those who delude themselves by saying that there are answers to the these problems. There are no such answers. I beg the House to face up honestly to those problems at this stage. Do not let the Bill have a large majority in favour of it on Second Reading, and then let it linger on for another two and a half months with great and good men coming along and saying on day five, "Is there an answer to the West Lothian question?"
  Mr. Nicholas Lyell: My hon. Friend has raised the West Lothian question a number of times, as though it were inextricably difficult. Can he put the problem in its most cogent form so that we can understand the full enormity of what we have to face?
  Mr. Budgen: I do not wish to go at length into the West Lothian question, which has already been raised by the hon. Member for West Lothian (Mr. Dalyell), as my hon. and learned Friend will know. There are a number of issues of principle—not just the West Lothian question, but the whole question of the relations between the Assembly in Ulster, the House, and this Parliament. They will be raised in the course of these discussions. If my hon. Friend, and any hon. Member who may be interested, comes to the conclusion that those problems are inevitably attached to any suggestion for devolution, then the honest thing to do is to vote against the Bill at this stage.
  Inevitably, the Bill will have a long and difficult journey through the House. There are a number of important issues and principles that have to be decided. For instance, some hon. Members in the Labour Party may have come to the conclusion that they are not too keen on the principle of devolution. It is inevitable, is it not, that as we debate these measures we find that those who are in favour of devolution in Scotland and Wales will express their pleasure at the precedent they see being created?
  I do not know whether the Labour Party is now in favour of devolution in Scotland and Wales. Neither do I know whether the Labour Party is in favour of proportional representation, but when it comes to examine the proposals for proportional representation in the Bill it may come to the conclusion that the setback that the Alliance suffered in the local elections is only a temporary one. It

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  may come to the conclusion that it might be important to vote down a proposal for proportional representation in the Bill.
  Those are all important matters. Some of them are important matters that cannot be resolved and which are inherent in any scheme of devolution. If that is so, let us vote against the Bill tonight. However, let us not be in the position of those who, using the Falkland Islands analogy, are prepared to send the task force but who are then not prepared to use it. Many will vote tonight in favour of the Bill who will then find themselves becoming more and more disillusioned with the inevitable difficulties of such a scheme.
  7.40 pm
  Mr. John Dunlop: The proposals before us are lacking in many major respects, but I wish to make it clear to the House that the United Ulster Unionist Party will participate in the elections in Northern Ireland. My party's representatives in the Assembly will also be prepared to express their views on the policy put forward by the Secretary of State. The functions of the Assembly fall far short of what we believe they should be, but any measure that gives locally elected representatives an opportunity to exercise some control or influence over the direct rule apparatus will be used by our representatives to the full. We shall also use the existence of an elected forum to press proposals for meaningful devolution and to express our views on the wide range of subjects that affect our people.
  We regret that the opportunity for Assembly Members to debate some subjects is to be denied to them by the Secretary of State's proposals. No elected representative in Northern Ireland can be expected to ignore security in the Province. We live with it daily. I was in the home of the late constable Alan Casky after his burial last Thursday. He was the 19-year-old constable—an only son—who was gunned down cruelly by the IRA. His woman constable companion, who was relentlessly pursued by the gallant members of the IRA striking force, was also gunned down, although she was unarmed, and she is now fighting for her life. Those are matters that we cannot ignore, and it is wrong that the Secretary of State should deny us some control in that important area. If he persists in his intention to muzzle the Assembly in that respect, he will get no support from me.
  Under the party system in the House it is almost impossible for any elected Member from Northern Ireland to obtain either Government or Cabinet rank. That is because no major party is organised in Northern Ireland. As a result, Northern Ireland parties, such as my own, must organise and try to play a significant part in our affairs, because in the House they are no more than an insignificant minority.
  As Northern Ireland is the region most distant from the centre of things here, we have special economic problems that can be dealt with best nearer home. Because of territorial claims by successive Irish Governments for many decades, my constituents would have more confidence in locally elected politicians over whom they have some control than in Ministers who, both now and in the past, have no electoral responsibility in Northern Ireland. The opportunity for elected representatives to discuss future constitutional problems should be seized, and my party will seize it.
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  We oppose the proposal that 70 per cent of the Assembly Members must agree before a transfer of functions can take place. In addition, the Secretary of State's proposal to bring the Assembly into the realm of the Anglo-Irish intergovernmental talks and proposed council raised doubts about the ultimate intention for Northern Ireland's future. 'We must think about that. We shall put forward our own proposals in the Assembly for meaningful devolution, and it is to be hoped that we can assure and secure widespread support for those measures. In those circumstances, we hope that the Secretary of State will realise that his proposals for the transfer of functions to elected representatives in Northern Ireland is not the best way forward and therefore not the best way to reestablish political stability.
  I was intrigued by the remark of the hon. Member for Belfast, West (Mr. Fitt) about the unique relationship that exists between the Government of the United Kingdom and the Government of the Irish Republic. I have always been puzzled about that. Some salient features of the relationship are only too plain. Irish Governments have taken every opportunity to stab Britain in the back. wish to hear a clear definition of that unique relationship. I wish to know how the Prime Minister of Great Britain and the Prime Minister of the Irish Republic can have such a wonderful, amicable arrangement that results from time to time in the Irish Republic doing all that it can to subvert and demonstrate its implacable and unrelenting enmity towards Britain and all that Britain stands for.
  I was talking to a friend the other day. In 1940, he volunteered to join the Forces. We were in the fishing town of Killybegs in County Donegal. He stayed in the hotel in which he usually stayed when on business in that area. He went down in the morning to have breakfast and noticed that the staff bore all the evidence of a monumental hangover. They were listless, ill-attentive and yawning their way through the morning's work. He asked one of the waiters "What is wrong with you this morning? You seem to have had a big night." The waiter said, "Yes, we had a big night. We had a big dance." My friend asked "Was this a parish dance?" The waiter said "Not at all. A German submarine is in port and the crew gave us a great night's entertainment, bought us plenty of drinks and danced the whole night with us." That is evidence of the neutrality that is observed by the Irish Republic in the face of a world conflict. We wish to hear the unique relationship explained.
  The hon. Member for Liverpool, Kirkdale (Mr. Dunn) and other hon. Members emphasised the importance of exercising great care in appointing a power-sharing Executive. It is evident that any administrative set-up in Northern Ireland by this or any Government will be along those lines. The hon. Member for Belfast, West emphasised that the Executive was one of the greatest things since sliced bread to come to Northern Ireland and that it should have had a chance to continue. But it was set up arbitrarily, not as a result of the expressed wishes of the people of Northern Ireland.
  I should like to reflect briefly on the composition of the Executive. The Deputy Chief Executive was the hon. Member for Belfast, West. He was then the leader of the SDLP. Incidentally, the SDLP received only about one-fifth of the total vote in that election in 1973. The Department of Housing, Local Government and Planning was headed by Mr. J. A. Currie, also of the SDLP. The Department of Health and Social Services was headed by

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  Mr. P. J. Devlin—"call me Paddy". He was also a member of the SDLP. The Department of Commerce was headed by Mr. John Hume, also of the SDLP.
  There is not much left. Further down I come to the Minister for Community Relations, Mr. Austin Cooper. He was an admirable Member and Minister. I heard him performing in the main street of Newtownstewart in County Tyrone, when he was taken to task by the Ulster Defence Regiment for leaving his car unattended, with the doors unlocked. That was against the regulations at that time. The members of the force did not know to whom it belonged. However, they took him to task and told him that he was breaking the law. I have heard language in all parts of the world, I have listened to many people, but I have never heard anything to touch his language on that day. He finished by calling the UDR the "scum of the earth". That was the Minister for Community Relations. He was certainly not bringing the people of Northern Ireland together and making them friendly to one another.
  Another member of the SDLP, Mr. McGrady, was head of the Office of Executive Planning and Co-ordination. I do not know what he planned. We already had a Minister of Planning. I do not know what he co-ordinated because nobody ever saw any evidence of his work. It was said at that time that he floated around Stormont looking for an office because he had not been provided with one. The Secretary of State had made up his mind that there were to be a certain number of people in that Executive, and he gave him the job, The dear man did not know what his job was and neither did we. Of course, I was not conscious of that.
  That shows the rather top-heavy proportions of a party that got only about one-fifth of the total vote. The party had all the main portfolios. It was running the country. The hon. Member for Belfast, West may have stuck to his job well and sat beside the Chief Executive, the late Lord Faulkner. Incidentally, that dear man could not move an inch without the approval of the hon. Member for Belfast, West. Otherwise, he would have taken his friends by the hand, walked out and ruined the whole thing. The Chief Executive had to do what the hon. Member for Belfast, West and his side-kicks said, or it would not have worked.
  The point is that the inordinate gift of power to those people was wrong. I hope and trust that, as the hon. Member for Kirkdale and others have said, in the setting up of the Executive a wee bit more regard will be given to the electoral performance of the people who make up the Executive.
  Incidentally, Mr. Oliver Napier was the leader of the Alliance Party, which was supposed to be the panacea for all our ills in Northern Ireland. The new Alliance Party was the thing. The BBC, UTV and all the news media pushed these people to the extremity of publicity, yet they did not get far. However, that man was made the Legal Member and Head of the Office of Law Reform, and he was not elected until the eighteenth count. He had to fool around on Saturday morning with his finger in his mouth to see whether he would get a seat.
  Mr. Fitt: He was not elected at all.
  Mr. Dunlop: I am talking not about those who were not elected, but about those who were, the jobs that they got and how long it took to elect them.
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  I trust that the Secretary of State will bear those facts in mind and will try to achieve a more equitable distribution of positions of power when the power-sharing Executive is set up.
  The hon. Member for Belfast, West mentioned the fall of the Convention with great regret and no little emotion. I should like to correct what he said. I admit that the Ulster Workers' Council had a great deal to do with it. The para-militaries also had a lot to do with it. However, there was a wave of revulsion from the people on the ground—the grassroots. [Interruption.] There was no intimidation of farmers away in the hinterland. They were away on the border areas of Castlederg and Strabane. There was no intimidation there. My telephone was red hot as a result of farmers calling to say that they had tumbled 500 gallons of milk into the drain that morning and bulldozed 2,000 chickens into an open grave instead of sending them to the processing factory. They said "God help you if you turn back now". That was the message of the people on the ground. The whole population was revolted at the system of government that had been imposed on them.
  I am inclined to think that the then Secretary of State, the right hon. Member for Penrith and The Border (Mr. Whitelaw), when picking these people, must have adopted the expedient chosen by many young housewives when the racing season is at its height. We know that many young housewives do not know much about form or the back page of the newspapers. However when the Grand National or the Derby come round, something grips them and they feel that they would like a flutter. They take the back page of the newspaper and dab some horse's name with a pin and trust to fortune and good luck. One can only suspect that it must have been some such expedient that the Secretary of State adopted when he was choosing the power-sharing Executive.
  As I said at the beginning, our party will go to the elections and play its part. It will go to the Assembly and seek, at the end of the process of rolling devolution, democratic devolution along the lines that exist in the House of Commons.
  7.57pm
  Mr. Tom Arnold: Like the hon. Member for Belfast, West (Mr. Fitt) I rise to give my support to the Bill. I hope that it will have a handsome majority. I hope also that the Government will do everything that they can to see that it becomes law and that we move ahead in the direction described by my right hon. Friend the Secretary of State.
  Clearly, there is a sequence to be followed, and the Bill is only the first stage in that sequence. After it becomes an Act there will be the elections, the setting up of the Assembly and the setting up of the Committees of the Assembly. We shall then see whether it is possible for the powers that the Assembly will obtain under clause 1 to be carried forward so that devolution, in the manner to which my right hon. Friend referred, can be carried out.
  This will be a long and slow process. If I may use a vulgar phrase, there are times in life when dramatic initiatives can take tricks. I do not believe that dramatic initiatives can take tricks in Northern Ireland. This legislation offers the possibility of slow, gradual progress towards the establishment of a measure of stability in the shape of local institutions. Those local institutions are

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  needed, because, without them, I do not believe, unlike some of my hon. Friends, that it will be possible to defeat the terrorists.
  The lack of stable local institutions feeds the cancer of terrorism and at the same time weakens the economic viability and basis of the working life of the people of Northern Ireland. We should not forget that last year the number of people employed in the Province fell by about 22,000 and only about 3,000 jobs were gained. That is a measure of the desperate straits in which the economy finds itself. Therefore, I very much agree with the remarks of the hon. Member for Belfast, West. The sooner that we move, the better. After all, there is a genesis to the legislation. From May 1979 until the autumn of 1981 I was privileged to serve my right hon. Friend the Member for Spelthorne (Mr. Atkins) as his Parliamentary Private Secretary. In the legislation and the White Paper I am delighted to recognise many of the ideas that he developed during the conference that he chaired in 1980 in Belfast and in the two White Papers that he subsequently published.
  This afternoon a good deal of scorn has been poured on the idea of a consultative Assembly and on the notion of simply setting up a talking shop. However, the second of the White Papers produced by my right hon. Friend the Member for Spelthorne, which proposed setting up a consultative Assembly, contained a sensible proposition. Had my right hon. Friend remained Secretary of State for Northern Ireland, it might have been carried forward. This proposal takes that proposition a stage further. I welcome that development, because it is right to offer political parties in Northern Ireland the possibility of making some progress towards devolution. Why is that so important? It is important because they say that that is what they want.
  Time and again I am deeply puzzled by the Official Unionist Party's attitude. Although the parliamentary representatives of that party call for integration, the situation in the Province is different. As recently as 12 March a resolution was passed unanimously by the executive committee of the Ulster Unionist Council. It stated:
  "The Ulster Unionist Party reaffirms its belief that Northern Ireland should be administered by an elected body empowered to legislate and govern, to be known as the Parliament and Government of Northern Ireland. This body must be elected and operate in accordance with the well established principles of normal British democracy and in particular the arrangement must in no way endanger the Union of the Kingdom, nor confer any contrived privileges on any section of the population."
  There is no comfort or argument for integration there. There is no reference to integration and no sign that the Ulster Unionist Party, in the shape of its members, wants integration.
  If I was puzzled by the Ulster Unionists Party's stand in not attending the conference at Stormont, I am equally puzzled by the SDLP's attitude, which is exposed in some of its more cloudy rhetoric. Often, its more extreme members seek to deny the principle of self-determination and to undermine the Union and the guarantee given in section 1 of the Northern Ireland Constitution Act. We are in danger of forgetting that that guarantee—as the Secretary of State reminded us today—stands absolutely rock firm. The majority of those who live in Northern Ireland will continue to vote for the Union, because that is what they want and that is the way in which they want to live. We should all recognise and support that principle.
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  Are the British Government right to proceed along the path of devolution—difficult though it may be and although the political parties in Northern Ireland may interpret it differently—should we continue with direct rule, or should we move towards some form of integration? The problem with integration is that the people of Northern Ireland do not want it. Much reference has been made to the West Lothian question. At the risk of being controversial, I must tell my hon. Friends and the hon. Member for West Lothian (Mr. Dalyell) that the West Lothian question is bogus in its application to Northern Ireland. Northern Ireland has never been governed as an integral part of the United Kingdom. That is a fact from which we cannot escape.
  Mr. Bill Walker: What about Scotland?
  Mr. Arnold: I do not represent a Scottish constituency, but my hon. Friend is entitled to put forward his point of view. In the time that I spent in Belfast with my right hon. Friend the Member for Spelthorne there was no sign that integration would be supported or was preferred by the people of Northern Ireland.
  What about the continuation of direct rule? Again at the risk of being controversial I must state that direct rule has not served the people of Northern Ireland all that well. For the most part it has been regarded as fair and vital and has had a great deal of cross-party support, but largely in the sense of being everybody's second choice. My right hon. Friend the Member for Spelthorne and his team of Ministers sought to grapple with the problems with which they were not familiar because they were English Members of Parliament.
  When I consider that I begin to appreciate how difficult it is for Englishmen to exercise the powers exercised under direct rule. It is neither right nor proper to continue with direct rule as a principle of government for ever and a day. It is unhealthy and encourages local politicians to be irresponsible in the literal sense that they do not have enough responsibility. In doing so, it again undermines the political stability of the Province.
  That raises difficult issues for the Government, because in introducing such legislation they cannot be certain that it will have the good effects that they hope for. Why? At the end of the day there are limits to what the Government can do to achieve their objectives. Ultimately, it will be up to the members of the Assembly to decide whether they can work together. I am a Conservative and have been a Conservative all my life. I cannot help thinking that those who work together gradually evolve and develop habits of mind and co-operation that enable them to do business. It is said that the habits of mind and of co-operation in the Assembly will only be bad habits. It is said that there will be nothing but argument and aggravation. That may happen, but if it does it will be the responsibility of the members of the Assembly.
  I sincerely hope that it will not happen, because one of the Bill's encouraging features is the real power and meat that it provides for politicians in the Assembly prior to the application of the powers in clause 1. I come to clauses 3 and 4. The proposed committee system goes much further than anything seen before in Northern Ireland. That is a positive advance. The White Paper foresaw—arid the Bill now contains—an extension of the development that has taken place in the House since the Conservative Party came to office in May 1979. I refer to the development of

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  the Select Committee system. The setting up of similar committees at Stormont in the new Assembly can go a long way towards encouraging members of the Assembly to do business not only with one another but with the Secretary of State and his Ministers. My right hon. Friend the Secretary of State and his colleagues should see whether it is possible to widen the scope of the clauses and to strengthen them—possibly by introducing amendments—so that the Assembly can have a free and unfettered rein to discuss whatever issues it thinks appropriate.
  To that extent I agree with what the hon. Member for Antrim, North (Rev. Ian Paisley) said in our debate on the White Paper. Ultimately, the people of Northern Ireland cannot escape the fact that security, politics and the economy are all linked and are part and parcel of the life of the community in which they live. We should not overlook that fact. In that sense, the committees of the Assembly should be encouraged to discuss problems relating to law and order and security and to discuss whatever other problems they think appropriate.
  I support the Bill. It is a brave and honest attempt to make some progress, which will be slow and gradual. I do not believe that it is any the worse for that. I hope that its Second Reading will have a large majority in the Lobby tonight.
  8.10 pm
  Rev. Martin Smyth: I oppose the Bill. I shall put on record some of the views of Ulster Unionists. The hon. Member for Hazel Grove (Mr. Arnold) drew a distinction between the views of the Ulster Unionist party in the country and the parliamentary party. He may not have been in the Chamber when my hon. Friend the Member for Londonderry (Mr. Ross) spoke on behalf of our party. He made it abundantly plain that we stood for devolution. I shall re-emphasise that by a quotation from a response from the devolution group to the Northern Ireland White Paper entitled "Northern Ireland: A Framework For Devolution", which stated:
  "There can be no doubt that Ulster people desire strongly and earnestly the return of powers over their own destiny, powers which citizens of every other part of the Kingdom have, but they do not seek that at any price. Unionists have made it unequivocally clear that they will not share power in government with republicans. Unionists have always been prepared to share power with Catholics—that has never been an obstacle; but they draw the line at republicans in government."
  If we are to be honest in the debate and are thinking of moving forward, we must put the record straight.
  Mr. John Patten: Does the hon. Gentleman agree that the non-departmental bodies in the Province, such as the education and library boards and the health and social services boards are splendid examples of cross-party, cross-religious and cross-sectarian co-operation? Why does he feel that such co-operation cannot be engendered in an Assembly?
  Rev. Martin Smyth: I could not agree that the existing boards are splendid examples. They are repudiated by most of the people because they are selected boards to defeat the powers of democracy. The sooner they are changed the better.
  I shall take the opportunity of putting on record that Roman Catholics and Protestants and other interests at
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  various levels have co-operated on matters of import, but when it comes to the concept of government we must recognise that it is the right of political parties to differ and to go in different directions. We learnt a lesson in the House not long ago. Even when the Prime Minister invited leaders of parties to consult concerning the national emergency over the Falkland Islands, the right hon. Member for Ebbw Vale (Mr. Foot) chose not to meet her.
  It is wrong to lecture Ulster Unionists because we take a political stance and say that we shall not go down that path. I should like to think that if the House is setting standards for democracy in future, it will not be long until it practises what it is preaching at Ulster Unionists, which is sharing power in government with those who are diametrically opposed on fundamental political issues.
  I should like to put the record straight at other levels. Twice today the House was presented with inaccurate statements. It has been said that Northern Ireland was never ruled as part of the United Kingdom. If by that the speakers meant that Northern Ireland has a separate indentity, that is right. However, if those speakers are thinking of the concept of the Union, we have been together for a long time. It is because of the experiences of the past that Ulster Unionists today are slow to give tacit acceptance to things that they know are destined for their destruction.
  An example is a half truth concerning the numbers of hon. Members to which we are entitled in Westminster. We were allowed 12 because we had a devolved Stormont. We were given 12 because those who drew up the 1920 Act never imagined that we would be part of the United Kingdom within four years. It was left to Ulster Unionists to vote themselves out of the Irish Free State and to maintain their identity with the United Kingdom. In the light of the debates on devolution in Scotland and Wales, when I understand that it was categorically stated that there would be no reduction in the number of hon. Members returned from Scotland and Wales to the House, it is the right of Northern Ireland to be numerically represented in the House, whatever goes on in Ulster by way of devolution.
  I oppose the Bill further because it has been spoken of as rolling devolution. That is a misnomer. When I read the Bill I wondered whether the Secretary of State was drawing on his experience in the Department of Employment to call to his assistance members of either the Associated Society of Locomotive Engineers and Firemen or the National Union of Railwaymen to help him evolve shunting devolution. We go one way and if we do not get a through journey, we go back again. Was the Secretary of State relying on his friends in the CBI to establish that new industry that is beginning to become popular? In the past we called it yo-yos. Some hon. Members still speak of yo-yos, but the modern terminology is spinners. We dance up and down to the dictates of the Secretary of State. At the heart of the Bill there is danger to democracy.
  Today we had one exposition that was close to what I call classical Socialism. We can have the President of the Council appointed by the rulers, but we cannot have a President chosen by the people. Under the Government's proposal we are getting close to the Platonic republic where one can have selected governors to rule over the people, governors who are selected by the fiat of the Secretary of State.
  Our party stands for a British parliamentary democracy. We demand it not by gift of the House but as the right of

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  every British citizen. The people of Ulster are British citizens. We will not accept any standard of democracy that is calculated to destroy us.
  In one of his jocular remarks, the hon. Member for Belfast, West (Mr. Fitt) may have unwittingly misled some hon. Members. He pointed to my party's Bench and said that our friend was not elected. The reason why our friend was not elected was that he did not stand. I have yet to find an election in which someone can be elected without standing.
  My party opposes the principle of the Bill and its concept of power sharing, call it what one will. We are happy to recognise that the Secretary of State has learnt from some of the failures of the past. Instead of having an election to a constitutional convention that is given a task and then sacked, the right hon. Gentleman is opening up the possibility of a talking shop. That is the danger that was highlighted today. The real point at issue is not how we jiggle with democracy, whether we should accept 70, 75 or 80 per cent. or a simple majority. The heart of it is community consent, and that will be judged by the Secretary of State.
  During the debate on the White Paper—if my memory is correct—the right hon. Member for Crosby (Mrs. Williams) suggested that Stormont fell because of its failure to govern properly. The reality is that it fell because the House refused to set up an inquiry over the shooting of two civilians in Londonderry by the British Army. The SDLP then walked out of Stormont.
  There is that basic instability in the Bill. We are giving the power to a particular group to opt out and the whole pack of cards—if I may change the metaphor—will collapse because that ingredient is missing. During the White Paper debate there were Members who lectured the representatives of Ulster on not being positive and not bringing proposals before the House. Let me put it on record that it is not our task to be prescriptive. That is because of the attitude of the House in the past. The House set up the Northern Ireland constitutional Convention. It was given a task to do which it did well. It fulfilled the terms required, but it did not guarantee places in the Executive, as of right, to those dedicated to destroy it. The House did not even debate the constitutional proposals. It passed away from it on a motion to adjourn. I understand that while some Members may have read the conclusions, they certainly did not read the report.
  I believe that an attempt was made honestly by Ulster's men and women to set a pattern that would be purposeful and useful to restore democracy to Ulster and give the lie to terrorism. I regret to say that as I read the Bill, we are bringing further instability into the Province. I believe that if the House decides to impose upon Ulster a form of government that is detrimental we shall do as our fathers did and successive generations will read history distorted, as it was distorted the other night, when Carson accepted the separation of the two parts of the island to maintain the Union and Ulster Unionists worked at Stormont with the abstentionists staying out. The House now dares to repeat such a folly by setting up a pattern that will allow the abstentionists to destroy Northern Ireland. There are still many hon. Members who desire to enter the debate and I shall rest my case at that level, urging the House to be a little more discerning in what it is asking us to do.
  May I express the hope that when the Prime Minister next meets the Prime Minister of the Irish Republic she will sing "Charlie is not my darling" and start governing
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  Northern Ireland as part of the United Kingdom, without our having to look over our shoulders at a country which seeks to destroy us.
  8.24 pm
  Sir Philip Goodhart: The long title of the Bill says that it is a Bill to
  "Make new provision for the resumption of legislative and executive functions by the Northern Ireland Assembly and by persons responsible to it".
  Everyone who has taken part in the debate knows that that will not happen. The fact that the three largest parties in Northern Ireland have declared that the steps to phase 2 are unacceptable means that in the lifetime of this Parliament powers will not be devolved to the people of Northern Ireland.
  There may be a sudden and dramatic change of mind. All things are possible. It is possible that the Secretary of State for Northern Ireland and I will complete the London marathon next year in under three hours and cross the finishing line hand in hand; but it is highly improbable. Executive devolution is highly improbable. The fact that the three major parties in Northern Ireland have said that phase 2 will not work means that the Bill will set up an Assembly that will, perforce, be irresponsible and powerless.
  The Secretary of State has said that the Assembly will provide the forum within which the necessary processes towards agreement can be developed constructively. That is possible. The hon. Member for Antrim, North (Rev. I. Paisley), in the debate on the White Paper a fortnight ago, improbably said that we should all be so astonished by the responsible attitude of those taking part in the Assembly that the House would be anxious to thrust powers upon it. That may be, but I doubt it. That doubt is shared by a majority of Conservative Members who know Northern Ireland well.
  I share the fears of my hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison) and my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery), who have eloquently stated that the Assembly will essentially be divisive. From the Opposition Front Bench the right hon. Member for Mansfield (Mr. Concannon) asked what will happen if the Assembly unanimously passes a vote of no confidence in some aspects of the Westminster Government's policy. Do we carry on as if nothing has happened or are we forced to change the policy?
  I have substantial fears about the role that an irresponsible Assembly will play, but I should be prepared to set aside my misgivings about the Bill if it were plain that the people of Northern Ireland wanted it. In an eloquent peroration to his speech on the White Paper the Secretary of State said of the people of Northern Ireland:
  "These proposals at least give them a chance arid a choice."—[Official Report, 28 April 1982; Vol. 22, c. 860.]
  We should give them a choice about the chance. I should be prepared to drop my opposition to the Bill if my right hon. Friend would include a clause to provide that the Bill will not come into effect until a referendum has been held.
  In the previous Parliament, my right hon. Friend, together with most members of the present Cabinet, voted in favour of holding referendums in Scotland and Wales on the Labour Government's devolution proposals. Those expensive and divisive schemes were dropped when it was shown that the Scottish and Welsh voters would not support them in sufficient numbers.

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  It would be folly to abandon the precedent that a referendum should be held before any Assembly, with potentially devolved powers, is set up in a part of the United Kingdom. Whatever my right hon. Friend the Secretary of State may say, these proposals will have an impact on the devolution argument in Scotland and in Wales. The smile on the face of the leader of the Scottish National Party when he attended the earlier part of our debate and the debate on the White Paper underlines the dangers of the course on which we are embarking.
  What would happen if the proposals in the Bill were rejected by a referendum or, at a later stage, by the House? I know that there are a number of alternative plans nestling in the desks of the Northern Ireland office, unless there has been a thorough spring clean in the 18 months since I left. Indeed, I wrote some of them myself.
  There are ways in which one can associate the people of Northern Ireland with executive decisions taken by the Westminster Government. We can give more powers to the district councils. The right hon. Member for Down, South (Mr. Powell) reminded us that district councils already have substantial advisory powers on planning proposals and local road schemes, and their advice is often taken. It would be perfectly possible, without any great administrative inconvenience, to increase the responsibilities of the district councils in this sphere.
  Perhaps the most dispiriting and discouraging half hour that I have ever spent in Northern Ireland was when talking some time ago to Seamus Mallon, vice-chairman of the SDLP, who is now, I understand, a Senator in Dublin. He explained to me at great length that it was impossible to hand back responsibility for the siting and maintenance of street lighting in any part of Northern Ireland because the street lights would be sited and maintained in a wholly sectarian fashion. I do not believe that that is true. The only way that one can prove that it is not true is by giving district councils the responsibility for siting and maintaining street lights. The area of mistrust might then be whittled away.
  There are many hon. Members who share the fears of Seamus Mallon that one cannot entrust powers to the district councils because they will behave in a sectarian fashion. My hon. Friend the Member for Petersfield (Mr. Mates) gave the example of Polglass. I happen to know that the whole story of the Polglass housing estate is much more complicated than my hon. Friend made out.
  I cannot understand how, on the one hand, people say that one must not transfer responsibility for street lighting to district councils because it will be handled in a sectarian fashion, and on the other urge that responsibility for all the powers in the Department of the Environment should be given to the devolved Assembly.
  I believe that there are alternative ways of making progress—ways that are safer for Northern Ireland and for this country as a whole. Much though I admire the hard work that the Secretary of State and his ministerial team have done in Northern Ireland in the last few months, I regret that this evening I cannot support their proposals.
  8.36 pm
  Mr. Peter Lloyd: I am grateful, Mr. Deputy Speaker, for having the good fortune of catching your eye, but I very much regret that it is on an occasion when I must explain the reasons why I cannot support the Government.
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  It has meant my resigning as Parliamentary Private Secretary to the Minister of State, Northern Ireland Office. It was a sad decision. My hon. Friend is not here. His duties keep him in Northern Ireland. However, I very much admire the work that he and his Department have done and are doing in Northern Ireland. They thoroughly deserved the encomium that they received from none other than the right hon. Member for Down, South (Mr. Powell) in Committee last week.
  I believe that the Northern Ireland Office has a particularly strong ministerial team, and in that I specifically include my right hon. Friend the Secretary of State. I do so purposely, because, in the debate on the White Paper, the hon. Member for Belfast, West (Mr. Fin) suggested that some of the criticism of this measure from the Conservative Benches was a spillover from attitudes created while my right hon. Friend was at the Department of Employment. I do not believe that to be the case. I believe that at the Department of Employment my right hon. Friend was much wiser and more courageous than his critics, and I was pleased to support him in this Chamber. I only regret that I cannot do so now, especially as I know that my right hon. Friend is using his great resources of skill and determination to try to end the vicious circle of sectarian violence, unemployment and failing investment in Northern Ireland.
  In the same way as my right hon. Friend the Member for Farnham (Mr. Macmillan), I have been tempted to back my right hon. Friend's initiative in the outside hope, against all the evidence, that it may achieve something of the prize that the Secretary of State seeks, not just final and complete proof that devolution is a blind alley. But I cannot do so, because I am convinced that it will make the situation in Northern Ireland worse.
  I am impressed by the almost universal condemnation by the parties and groupings in Northern Ireland. I am not sure whether, in my right hon. Friend's terms, I am being too naive or too cynical in being influenced by what they say, but the history of Northern Ireland, certainly since the ending of Stormont rule, shows that those people are all too likely to be proved right.
  I cannot see how the election of any Assembly in Northern Ireland can help to diminish the violence, which is one of my right hon. Friend's chief objectives. I should have thought that such essays in fragile constitutional bridge building are more likely to provoke it. I suspect that the men of violence are encouraged less by the mood within the total minority community than by what they see as the vulnerability of the institutions of government in Northern Ireland.
  I do not see how the Assembly will create a climate that will encourage the foreign investment that my right hon. Friend wants and that will be the product of this initiative if it works in the way that he hopes. I do not see how that can happen if, as I believe, the violence continues, or even increases, and the Assembly fails to agree on stage two. As every critic of the proposal—and, indeed, some of those who support it—have warned, the Assembly will or could easily be a platform for merely criticising the Government in London. That is natural and understandable. If its Members have no real responsibility, their existence will be more easily justified by pointing to the differences between their views and what is actually decided in London or in the Departments under the control of Northern Ireland Office Ministers either in Belfast or in London. I know ministerial backs are broad in these

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  matters, but it must undermine morale and confidence in the Province and in those who might bring business to it if the shortcomings of the Union Government, real or imagined, are continuously highlighted.
  Mr. Richard Needham: I have listened to my hon. Friend's speech with interest, and I understand how strongly he feels on this issue, but will he tell the House how much personal experience he has had of the affairs of the Province in his time at the Northern Ireland Office?
  Mr. Lloyd: I had very little experience of the affairs in Northern Ireland. I have looked at it from afar, and I have read about it in the newspapers. Like most Members of the House, I speak with considerable reluctance, because I know that my experience is limited. Nevertheless, on a matter of this nature, whether we like it or not, the responsibility lies with this Chamber. One is therefore bound to say how these matters strike one.
  My hon. Friend the Member for Chippenham (Mr. Needham) made a good point, but I hope that he will listen—as he has done on other occasions although today he has not done so—to right hon. and hon. Members who represent Northern Ireland constituencies. What I am saying chimes more with their experience than with what my hon. Friend says. His experience is more considerable than mine, but it is nevertheless limited and partial.
  No doubt there will be plenty of common ground between the communities. I believe that there is common ground between them. It will be shown in their criticisms and suggestions, some of which no doubt will be extremely constructive. I am certain that that is what my right hon. Friend wants to display and build on. However, in my view, it will prove an infirm foundation for a devolved Government. If my right hon. Friend succeeds in creating, perhaps for a time, a consensus that permits devolution, the arrangement must always be on a knife edge, brittle and uncertain. It must be a ground for increasing or continuing instability, because the rug could always be pulled from underneath it. In the framework that he suggests, there is no real opportunity for evolution and development if the minority has a stranglehold on the majority. Despite what was said by my hon. Friend the Member for Peterborough (Dr. Mawhinney), it does give a veto to the minority, and the minority can use it at any time.
  There is no incentive or real possibility, as there is in truly representative assemblies elsewhere, for the minority to try to convert itself into a majority, while the majority, under the arrangements proposed, will be continually frustrated. It is not enough to say that on many practical questions there is plenty of evidence, which I accept, that the communities see eye to eye, or very nearly so. So do the parties here at Westminster, and so, no doubt, they did in the old Stormont set-up. That is not the point.
  The whole purpose of the exercise in which my right hon. Friend is engaged is to bring the two national aspirations in Northern Ireland into a neutralising balance for the purpose of creating circumstances in which the underlying agreement between them—which he hopes will be there, and which to a considerable measure probably is there—on the more mundane issues can emerge, but I fear the effect will be the opposite.
  There has been much talk of public opinion polls. My hon. Friend the Member for Peterborough suggested that
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  the signatories to a letter saying that the irreconcilable ought to be reconciled were a significant sign that the measure will succeed. However, I prefer the observation made by the hon. Member for Belfast, West—that ultimately the best guide and the best evidence is what happens at the ballot box, and the message from there has been very clear over the years. I know that my right hon. Friend the Secretary of State and his predecessor, my right hon. Friend the Member for Spelthorne (Mr. Atkins), were impressed that both communities favour devolution. Evidence of this is indeed provided by the opinion polls and by some of the speeches that we have heard today.
  I suspect that the important factor is not any special desire for devolution that is permanently embedded in the psyche of Northern Ireland—certainly it was not there in 1920—but that the majority see devolution as a means, first, of ensuring that the security measures are pressed with greater vigour and, secondly, of forestalling any moves to Irish unity that they fear may one day be foisted upon them by the House. By contrast, the minority see the proposals, when combined with power-sharing and an Irish dimension, as a route forward to Irish unity.
  I believe that my right hon. Friend's cross-community formula must institutionalise that divide between the two communities and make even more difficult the emergence of cross-community parties or groupings based on different approaches to economic and social problems, which is the system in the rest of the United Kingdom. I fear that the formula will sharpen rather than put on ice, as my right hon. Friend hopes, the divide between the two communities in the only matter that fundamentally divides them. The representatives of the communities will feel able to measure their effectiveness only by the success with which they have either promoted or reduced the Irish dimension, which has been slightly written into these measures, which the Opposition would like to write in further, as would the Irish Republic, and which presumably the SDLP sees as its task to press further.
  I also feel obliged to vote against the Bill because it provides for devolution as the ultimate goal. My hon. Friend the Member for Perth and East Perthshire (Mr. Walker) fears that that may put dangerous thoughts into Welsh or Scottish heads. That is not, I feel, a logical criticism. Those who believe that devolution will do Northern Ireland no good cannot fear that it will prove an attractive model for the Scots or the Welsh to emulate. I believe that the springs of separatism come from people's own experience rather than from what they see going on elsewhere.
  The West Lothian question presents a more practical point. I think that I agree with the Secretary of State on this matter. I should be content to go along with that, and the many anomalies of devolution, if I could believe that it would bring harmony where we want it to bring harmony, but, like my right hon. Friend, I do not believe that constitutional tidiness has any particular virtue in itself. As my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) explained, the danger of devolution is that it will prevent Northern Ireland representatives from developing political groupings and relationships that are not primarily based on national aspirations. I am certain that that non-national basis can be achieved outside Northern Ireland only at Westminster, where the two national traditions of Northern Ireland can be subsumed in a wider United Kingdom party political context, and where the Northern Ireland representatives can have the

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  incentive—and would need to do so, if that were understood to be the permanent system of government—to ally themselves or even merge with party groupings here in order to achieve influence or effectiveness.
  That may be a long way off, but I believe that it will be much nearer after the next general election, when Northern Ireland will have an increased number of representatives. However, that will be so only if the full range of Northern Ireland legislation remains the responsibility of the House and we devise more flexible, complete and effective ways of examining it. Above all, there will have to be total confidence that no new recipe for devolved government will be sprung on Northern Ireland, the fear of which—I hope Northern Ireland Members will forgive me—prevents many Northern Ireland Members from serving as effective Members across the full range of the activities and responsibilities of the House and turns them into guard dogs, protecting their corner and Province, and barking whenever a constitutional intitiative appears to be approaching.
  Among many other questions, there is the large question of local government—the Macrory gap, which has to be filled if purely local matters are to be placed in the hands of local people, as they are in the rest of the United Kingdom. I doubt whether that gap is as severe a problem at the moment as it is sometimes said to be. It is a strain on Ministers, no doubt, but the fact that it is not such a large problem is a tribute to direct rule and those who administer it. However, I am sure that enduring stability in the long term in Northern Ireland demands that that gap should be filled with proper local government organs and institutions.
  My right hon. Friend, when opening the debate on the White Paper, said that he approached those vexed questions with humility. So do I, but doubly so, as I indicated to my hon. Friend the Member for Chippenham. I shall not try to proffer any neatly packaged solutions. However, I am certain that the chance of peace and stability in Northern Ireland, which has seen troubles enough, will be found more in the undertakings and along the lines of the Conservative manifesto for the 1979 general election than in the ingenious Bill that my right hon. Friend has put before the House this evening.
  8.53 pm
  Rev. Ian Paisley: The House will need to disabuse itself of any thoughts that the measure that we are discussing and its implementation will do anything about security in our Province. We need to get that firmly in our minds.
  I had the unhappy experience this morning, before I came to the House, of being in the home of a young police officer who had been savagely murdered by the IRA in Londonderry. When I spoke to his bereaved parents I knew that I could not offer them anything from what we are discussing today that would bring some solace to them.
  Let no one think that legislation passed by the House will put an end to IRA terrorism. The terrorists do not acknowledge the authority of the House, nor do they care for it. Their idea is to kill, maim and bomb, and to continue a campaign of terror.
  I wish that the Government—and this applies to previous Governments—had the same will to safeguard the people of Northern Ireland, who are about 500 miles
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  away, as they are now showing to safeguard the British citizens of the Falkland Islands. There must be a will and a determination in the House to win the war against terrorism. None of us should think that if the Assembly were set up it would instantly provide an economic panacea to our ills.
  Having said that, I should like to put on record tonight that I have confidence in the people of Northern Ireland. I do not believe that any Bill passed by the House will destroy Northern Ireland. I do not believe that Northern Ireland will be disintegrated and destroyed because the SDLP refuses to attend an Assembly set up in Northern Ireland.
  I was brought up from birth on the Unionist philosophy that as long as we had Stormont on the hill the Union would be defended. But Stormont left the hill, and the Union is still there. Why is it there? It is there because of the decision of the majority in Northern Ireland. I have every confidence in the courage and determination of the people of Northern Ireland to maintain the Union. I do not want to hear people saying that if we give this we will be destroyed, and if we have that we will be destroyed.
  The people of Northern Ireland made it clear what they thought of inter-Government talks with the South. Mr. Haughey got his answer. I am glad that in a recent interview the Secretary of State put it on record that he had learnt of the strong determination of the vast majority of the people of Northern Ireland to remain in the Union. As long as that determination is there, no act of the House will destroy Northern Ireland. That is the message that the people of Northern Ireland need to hear over and over again.
  I feel that there is a change in the thinking of many people in Northern Ireland. What is this change? The change is not that they want to go into a united Ireland; nor is it that they want enforced power sharing. The change is that they want to have a real say in the bread and butter issues and in the day-to-day running of Northern Ireland. They want to have a say in matters such as agriculture, education, health and social services, planning and housing. Those matters are largely outside the constitutional issue, although at times, of course, they do impinge upon it. The people of Northern Ireland want to have a real say and a real input into the Government as those decisions are made.
  No member of the Northern Ireland public realises how little say an Ulster Back Bencher has in bringing the Government to certain decisions. From my experience of local government in Northern Ireland, from the deputations of mayors and from the committees of local government, I can say that they do not believe that, as the right hon. Member for Down, South (Mr. Powell) has told the House, the Government usually heed what they say. They tell me that they are not heeded at all. They want to know why they are not heeded and they want their Members of Parliament to try to make the Government heed what they say.
  The first proposals in the Bill are a step in the right direction. I am convinced that the House, and even Northern Ireland Members, will be surprised at the amount of change among the people to get to a position where local representatives can really have a say in how the Government make their decisions.
  Today we have a Northern Ireland unbridled—direct rule. There is not even a Member from Northern Ireland on the Public Accounts Committee. In the old days of the

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  UUUC an effort was made to have a Northern Ireland Member on the Public Accounts Committee. Both sides of the House said "No". Therefore, when the accounts of Northern Ireland are considered by the House there is no voice from Northern Ireland to make a vital contribution to the debate on the expenditure and how it is carried out in Northern Ireland.
  There is a need for Committees to mark the procedures and the work of the Departments at Stormont. The Convention's report strongly recommended the establishment of such Committees. Indeed, it went so far as to suggest 50–50 Committees, but under the Bill the membership of the Committees will be in proportion to the numbers in the Assembly parties.
  I believe that there are those in Northern Ireland who are capable of showing their impartiality in the chair as Presiding Officer. We have seen that before. Republicans or Unionists have chaired committees and those who have served under their chairmanship have testified publicly that they gave members a fair deal. Indeed, when people of good will are in the chair they tend to lean over backwards to show that they are fair.
  If Parliament is not prepared to give the Assembly the right to elect its own Presiding Officer, we will destroy any confidence that the Assembly will be effective. I am confident that a Presiding Officer could be found in Northern Ireland to work within the parameters of the Bill and set up committees that would do excellent work in covering Government Departments and making recommendations for future legislation.
  I have heard the speeches of Conservative Members who oppose the Bill. The principle underlining them all is the opposition to devolution. I believe that we should have had total integration of Northern Ireland when Stormont was taken away. That was my party's policy. We said "Bring us under Westminster", but the Government of the day did not do that.
  We must now have what the people of Northern Ireland want, which is devolved government. They will not get it immediately, and if the Assembly is rushed into trying to get a 70 per cent. majority it will fail.
  I do not agree with the claim of the hon. Member for Belfast, South (Rev. Martin Smyth) that Stormont fell because the SDLP left. I served in Stormont for many a day after the SDLP had gone and I know that Stormont failed because Mr. Brian Faulkner, as Prime Minister of Northern Ireland, was not prepared to face the reality that Stormont had no security powers. Those powers had been returned to Westminster, but Mr. Faulkner was not prepared to accept that.
  I was a Member of the old Stormont and we asked questions about the Army and the UDR. Ministers tried to give answers, but they had no responsibility for those matters. I believed that it was a mistake to take responsibility for security away from Stormont, but there was no point in carrying on the facade of pretending that Stormont was responsible for security when it was not. There was no point in Ministers trying to answer questions about matters over which they had no authority.
  The House voted to destroy Stormont. I believe that if it had been able to foresee what would happen it would have gone for a restructuring of Stormont and not its abolition. Indeed, hon. Members have told me that.
  We have an opportunity at the first stage, but the second stage is absolute foolishness. The second stage provides no way forward in the form that it now takes. I have been
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  a Member for 10 years or more. I do not think that hon. Members would accept a discussion on whether we should withdraw powers today or bring them back in 12 months' time. The reaction of the House would be to say that we should wrap up the whole thing once and for all.
  The House needs to consider carefully the second phase. There has been reference to the need for more power for local government and the fact that a row can occur even over such matters as street lighting. I should like to put on record—there is no one here who represents the SDLP—that the SDLP has always opposed any improvement in local government powers. It opposes the Bill. It will oppose the granting of any further local government powers. It was known before the Bill was published that the SDLP intended to oppose it.
  I do not think that the second phase provides much hope. I have, nevertheless, hope for my Province. If l did not have that hope, I should no longer come to the House or spend my time trying to do something for the weary people of my Province. An opportunity has come now to the politicians of Northern Ireland. I am prepared to accept that opportunity and that challenge. I am confident that the Unionist people will be able to fight their own corner and that they will be able to answer any challenge that may come from Dublin, from this House or from any Republican element within Northern Ireland.
  We should give our people hope tonight. I believe that we can take the step contained in the first phase. I cannot, however, support the second phase, which, unfortunately is at the heart of the Bill. In accordance with my conscience and principles, I must vote against the Second Reading in the hope that some improvements can be made in Committee that will help Northern Ireland's case.
  9.8 pm
  Mr. J. Enoch Powell: I am on common ground with the hon. Member for Antrim, North (Rev. Ian Paisley) and with almost all those who, after studying the proposals, have taken part in this, or the previous debate, in believing that the proposition of rolling devolution with power sharing is unworkable, impracticable and—to use the word of the right hon. Member for Farnham (Mr. Macmillan) in what has perhaps been the most penetrating of the speeches delivered in the debate—impossible. It must therefore be a puzzle to many hon. Members, who will be called upon to vote tonight, to understand what has been the compulsion or at least the attraction for the Government, following so many tentatives, to bring forward a proposal for a rolling devolution that is almost universally regarded, especially by those who must work it, as impracticable, and for an Assembly designed to promote that, but which is, in itself, inherently without responsibility or powers and more likely to express and to exacerbate differences than to reconcile them.
  I am glad to see that the right hon. Member for Leeds, South (Mr. Rees), who has followed the affairs of Northern Ireland so closely since he ceased to be Secretary of State, is on the Front Bench tonight. The right hon. Gentleman will recall, as I do, a conversation between us in October 1979 when the first of these essays, that of the right hon. Member for Spehhorne (Mr. Atkins), had burst upon a surprised House.
  After a little chat together about its weaknesses and contradictions he fixed me with his eye and said, "I will tell you what will happen. There will be an Assembly; you can take that from me." Not to be misunderstood, he

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  added, "Of course, that is not a Cabinet leak; the Cabinet knows nothing about this, yet. You know how I know it, and that is how you know it will happen. There will be an Assembly." We have lived a rather long time since then, until the occasion tonight when that Assembly, which is the real purpose of the whole operation, has come before us. The purpose is not rolling devolution but just to have an Assembly.
  There is a wider context, as several speeches have shown, to tonight's debate. Occasionally references to Ulster and the Falkland Islands, have been taken with some impatience; but after all, it is a natural link. Those are the only two British territories, as far as I recollect at the moment, that are claimed by a foreign power, which in the one case has invaded the territory and taken it by force, and in the other case provides a base for continuing terrorist attack on the territory.
  We have therefore a real analogy, and indeed we are concerned in the Bill not only with the affairs of Northern Ireland, but with external affairs. Those who were watching would have noted that it was the Overseas and Defence Committee of the Cabinet—rather paradoxically for affairs internal to the United Kingdom—that considered and eventually approved the proposals that the Secretary of State has put forward. The key to the embarrassment and the puzzlement of the House lies in this larger background.
  As the question of the Falkland Islands has come up, perhaps it might help the House if I read something that was published as long ago as February 1980 by the political correspondent of the Belfast Telegraph. It was an article about Lord Carrington:
  "When he became Foreign Secretary at the General Election last year, Carrington was faced with growing diplomatic pressure from the United States, the Irish Republic and Europe for signs that the new Government would try to resolve the problems of Ulster.
  Following the European Assembly election, when the Rev. Ian Paisley won a sizeable 170,000 share of the poll, civil servants at the Foreign Office calculated that the DUP leader would be prepared to talk about political agreement with the prospect of real power being offered to him.
  There is strong evidence that Carrington, who is said to care little for any brand of Unionism, was a powerful figure among those who persuaded Mrs. Thatcher to press ahead with an initiative as speedily as possible.
  The aim… was primarily to persuade Mr. Paisley and the SDLP to talk about power sharing. For, despite peculiar noises in Opposition, the new Tory Government was, and still is, committed to the concept of genuine power sharing.
  And the belief, certainly held by senior Ministers at the time, was that Mr. Paisley was ready to talk about how this should be done."
  That was written a little time after the right hon. Member for Spelthorne had sprung his initiative, to my surprise but perhaps less to the surprise of the right hon. Member for Leeds, South. From that moment on, the theme has evolved consistently at each stage. Each stage has been marked by a contact between our Prime Minister and the Prime Minister, for the time being, of the Irish Republic. When it was Mr. Lynch, there was to be a two-reel drama in which the first reel—I am reading from a newspaper article of 29 November 1979—
  "would be exclusively devoted to the securing of an agreed internal settlement in the Province involving a restoration of devolution … The second reel, envisaged by Mr. Lynch, which would be put together after a … long interval, would concentrate on moves towards the reunification of Ireland by consent."
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  Then followed the meeting with Haughey a year later in 1980. One conclusion of that meeting was that the Prime Ministers would give special consideration to "the totality of relationships between these islands" and, for that purpose, they looked forward to "new institutional structures". Those new institutional structures were forthcoming following the meeting between the Prime Minister and Mr. FitzGerald in November 1981; for each case the interval was rather longer than had been forecast, certain delays and interruptions having prevented the smooth evolution of the notion.
  As the House probably still recollects, one point agreed at that meeting was that there should be an Anglo-Irish Council with a parliamentary tier in which the Republic, the United Kingdom and Northern Ireland as a separate entity would each be represented. When FitzGerald got home he found himself confronted with the criticism from our old friend Haughey that he had not gone far enough or fast enough on that occasion. His answer was—I am quoting from what he said in the Dail—that he believed it wise
  "not to press ahead at this stage with an Anglo-Irish parliamentary council because of the difficulties involved in securing fair representation from Northern Ireland where there was no elected representative body."
  That is what all this is about. The reason why it was pushed forward at the time was to ensure that before the next meeting between the two Prime Ministers took place there should exist a matrix—a Northern Ireland unit—from which the representation on that body could be drawn.
  The Secretary of State said this afternoon, "Irish dimension? Anglo-Irish parliamentary tier? What is all that about? I find nothing in my Bill about it, though there is of course a section in the Northern Ireland Constitution Act 1973 which is still in force and which would enable the same set-up essentially that we are using in the Bill to form direct contact with the Government of the Irish Republic." What is more, once we have an Assembly, we may be sure that there will be an Ulster contingent in the Anglo-Irish set-up which is the basis of what is colloquially referred to in the Northern Ireland Office as the "re-unification exercise". That is a well-known formula used by Northern Ireland officials, and this is the key piece in the exercise.
  In order that it may be available, in order that the missing part of which FitzGerald complained may be available, we must have an Assembly for which no other purpose can be produced or proposed than precisely that for which it is intended—to contribute to the parliamentary tier.
  Mr. Prior: The right hon. Member for Down, South (Mr. Powell) referred to a reunification exercise in the Northern Ireland Office. I have been in that Office only since September, but my right hon. Friend the Member for Spelthorne (Mr. Atkins) the former Secretary of State was there for a long while before that. I am certain that there is no such exercise. I have never heard any mention of that whatever. I hope that the right hon. Gentleman will not continue with what has nothing to do with what is set out in the Bill.
  Mr. Powell: I naturally accept the Secretary of State's assurance. However, I am afraid the consequence of that is to make the circumstances even more alarming than they would be if he knew what he was doing. For this is the ride for which he is being taken, and the ride for which the

  541
  House of Commons and the people of Northern Ireland are being taken. This is the explanation of the apparently inexplicable repetition of what the right hon. Member for Farnham called the impossible: it is part of the operation for bringing about peaceably—"by diplomatic means" would be the current phrase—that reunification which is desired not only by the nation which claims Northern Ireland as part of its territory, but also by the most powerful nation on earth—the United States.
  At the end of the debate the majority of hon. Members who vote will do so, as commonly happens, not having heard the debate. In many respects, the debate has—I have not had the opportunity to prove this by quotation—run on the same lines, and in some cases in the same words, as the debate on the previous failed attempt at a rigged devolution constitution for Northern Ireland in 1973.
  If I may say so, it is to the credit of the Conservative Party that whereas nine years ago hardly a single Conservative Member was found to draw attention to, and to refuse to vote for, inherent contradictions of what was put before him, we are debating a Conservative amendment tonight. But most hon. Members who will go through the Lobby will have heard nothing of this and will—this is no criticism—understand little of it. They have been told and they will say: "Let us have a try. It is worth trying. Let us see if it works."
  I want to say to them what I said in March 1973:
  Those who vote for this White Paper,"—
  in this case it is the Bill—
  "either because they have not analysed and understood the contradiction at the heart of it, or because they say to themselves: 'Maybe we shall get by for another year or two in this way', are betraying the trust with which they were sent here and will bear the guilt of what will follow."—[Official Report, 29 March 1973; Vol. 853, c. 1595.]
  9.22 pm
  Mr. Clive Soley: Whatever view we hold about the constitutional future or the constitutional structure of Northern Ireland, Northern Ireland will need a form of government that is not only acceptable but is fair and, above all, is seen to be fair. That is one reason why Labour Members have put forward the view that the parties in Northern Ireland need to give the Secretary of State's views careful and sympathetic consideration. That form of fair and open government is needed whatever the constitutional future of Northern Ireland.
  We recognise that the major parties in Northern Ireland do not regard the Secretary of State's proposals as workable. I note that the Belfast Telegraph in its editorial on 7 April 1982 said:
  "The politicians will fight the elections not to make Mr. Prior's plan work, but to stake out their own positions."
  There is nothing wrong with politicians staking out their claims. That is part of the political process, but in doing so they need to bear in mind the views and attitudes of the individuals and groups which they represent. If those groups within that area are not to be so alienated that they either resort to violence, or, perhaps worse still, passively permit violence to take place, we are forced back to the conclusion that a form of local government is needed in Northern Ireland which is fair, which is seen to be fair, and which works.
  As my right hon. Friend the Member for Mansfield (Mr. Concannon) said.. we are concerned about the appointment of a Presiding Officer in the first instance.
  542
  During the debate much was made of that point. It is no use pretending that Northern Ireland is like any other part of the United Kingdom or comparing it with Scotland, Wales or England. Its history and background are totally and utterly different and its relationship with its neighbouring State is totally and utterly different, and any attempt to ignore that ignores the fundamental and underlying problem.
  That is why the appointment of the Presiding Officer is a key factor in the Bill. If the person appointed is unacceptable to one section, or to both sections, of the community, the chances of the rolling devolution programme working will be slim. We are concerned also about the suggestion of 70 per cent. approval. The danger is that the minority might be alienated if it is overridden, and if the majority finds that its view is rejected it will feel that it has been subjected to what I have previously described as a con trick.
  There are areas of crucial concern. One area that springs to mind is that of the economy. During my last visit to Northern Ireland with my right hon. Friends the Members for Ebbw Vale (Mr. Foot) and for Mansfield almost every party—including the CBI in Northern Ireland—was clearly sympathetic to many aspects of the Labour Party's economic policy. They said that they did not believe that the free market philosophy could work in Northern Ireland. The CBI in Northern Ireland is on record as saying that both publicly and frequently.
  If the Assembly comes forward with recommendations about the economy, will the Government accept them? Although my next remarks do not apply to the Secretary of State, I must point out that the Government as a whole have been no friend of democratic control in local government. Indeed, the Government have made the deepest and most harmful attacks on local government in Britain for many years.
  We are concerned about having devolution extended by Order in Council. Because of the lack of time I shall leave that matter, but I hope to return to it in Committee.
  Perhaps the most important factor is the Irish dimension. The problem is that the Bill recognises the two identities in Northern Ireland but does not give expression to them. Ultimately, it must be the aim to give expression to those two identities. As my right hon. Friend the Member for Mansfield said, one way of doing that would be to allow the Assembly to look at areas that concern both North and South Ireland.
  Security will have to be discussed at one level or another. We cannot expect people on the Unionist or Republican side to be elected to an Assembly that does not discuss deaths by plastic bullets or assassinations by paramilitary groups from one side or the other. That would be unrealistic. The powers that are given are an entirely different matter, but there must be discussion.
  Economic co-operation between North and South is vital, and that is another area that must be discussed. It is interesting and encouraging to note that for the first time for years groups from Northern Ireland are prepared to discuss economic co-operation in detail with the South of Ireland, because they are becoming increasingly aware that Ireland's economic future does not lie in the border being an economic division. [Interruption.] If the hon. Member for Antrim, North (Rev. Ian Paisley) spots any change in the attitude of the people of Northern Ireland, he could do much worse than to address himself to the fear

  543
  of unemployment in the North and to the willingness to co-operate with the South in a way that would not have been considered even three or four years ago—let alone 10 or 20 years ago.
  In moving his amendment the hon. Member for Epping Forest (Sir J. Biggs-Davison) made great play of the opinion polls. This is not the first time that that matter has been brought up. Those who suggest that there should be government by opinion poll should take a long hard look at the excellent article in New Society on the conflicting results of opinion polls on the future of Northern Ireland. Most of us know, and I think that the hon. Member for Epping Forest will accept, that the one thing that those opinion polls show more than anything else is that the future of Northern Ireland is wide open for political leadership.
  The basic question that has come up today is whether the Conservative Party is still the Conservative and Unionist Party. That is the problem. The division in the Conservative Party is real and understandable. It is reflected by the division and splintering in the Unionist camp. This question must be asked: who speaks for the Unionists? Is it the Democratic Unionists, the Official Unionists or a group within those parties? We know that the Unionists have splintered. In the past, one of the reasons was that there had been a lack of positive political power in Northern Ireland. The only power that has been available to the various groups has been the power to say "No", to disrupt and to change in a negative way.
  The problem for the Conservative Party is serious. It has faced two resignations as a result of the Bill. As a relative not 100 miles away from the right hon. Member for Farnham (Mr. Macmillan) will know, that could be described as a little local difficulty. It shows the depth of the problem for the Conservative Party, which is to decide whether it will go on supporting the Union.
  The hon. Member for Londonderry (Mr. Rose) launched a justified and understandable attack on the Provisional IRA. I say to him and to the hon. Member for Antrim, North that I hope and pray that there will also be an attack on the paramilitaries on the Unionist side, but predictably and sadly we never hear that. There is never a condemnation of the violence that has been carried out for many years by the paramilitaries on the Unionist side.
  I say to the Unionist Party, whether it is the Democratic Unionists, the Official Unionists or any other group, that until it condemns just as forcefully and with as much clarity the activities of the paramilitaries on the Unionist side there will be some mistrust over how it will handle political power. To be killed by a bullet fired by a paramilitary Unionist is not essentially different from being killed by a bullet fired by a paramilitary on the Republican side. There have been killings within the Unionist paramilitary groups in the same way as there have been killings and disciplinings within the paramilitary groups on the Republican side. I hope that we shall hear more from the Unionists on that score in future.
  I listened with care to the hon. Member for Liverpool, Kirkdale (Mr. Dunn), who spoke for the Social Democratic Party. I was tempted to ask him the same question as I asked the right hon. Member for Crosby (Mrs. Williams) during the previous debate. What is the position of the Social Democratic Party, and for that matter the Liberal Party, on Ireland? Are they in favour
  544
  of a united Ireland? Are they in favour of integration? I take it that they are not, as they are not supporting the amendment. Do they support the status quo? Do they have a policy at all?
  Mr. James A. Dunn: If the people of Northern Ireland want it, we should not oppose it.
  Mr. Soley: Is the hon. Gentleman saying that he would support a united Ireland with consent? If he is, that is encouraging. I suspect that he wants to say that, but cannot. That is the problem. Whether his right hon. and hon. Friends also wish to say that, I am not sure. I suspect that that is what he personally would like to say.
  The hon. Member for Mid-Ulster (Mr. Dunlop) talked about the definition of the special relationship with Eire. There is a special relationship with Southern Ireland. It may have been negative at times, but one of the reasons why it has been negative is the long history of the struggle between the two halves of Ireland. It is not sufficient to pretend that there is no special relationship just because at times the relationship between the two countries has been strained and under pressure as a result of the division of Ireland in 1920.
  It does not mean that the special relationship is not there and that there is no need for talks with the Southern Irish Government. Clearly there is. It is one of the things that we shall be looking for in the future. If we do not have those talks, the opportunity to get a united Ireland will be diminished. That would be a great pity, not least for the people of Northern Ireland.
  I do not doubt that we shall spend a great deal of time in Committee on the details of the Bill. We are against the amendment moved by the hon. Member for Epping Forest, but we hope that the Secretary of State will get some form of devolution going. We are still pessimistic, but that is no reason for not giving the Bill a chance. It needs to be given a chance, if only for the reason that I stated at the beginning. Whatever one's views about the future of Northern Ireland's constitutional position, it still must have a form of accountable, acceptable and fair local government.
  9.35 pm
  The Under-Secretary of State for Northern Ireland (Mr. John Patten): There are rather more right hon. and hon. Members in the Chamber than are normally present for our debates on Irish matters. I suspect that not so many will be here when I move the Northern Ireland probation board and land compensation orders. I do not blame them. I have not always rushed into the Chamber when I have seen Welsh or Scottish matters on the annunciators.
  There are many Members here tonight because this is an important constitutional measure. I welcome the attention that my right hon. and hon. Friends have given to this issue and the attention that has been given to it by the Opposition.
  I say that this is an important constitutional issue, but I would not say that it is extremely important. Those who say that the Bill is radical and new are flying in the face of half a century of history in what the right hon. Member for Down, South (Mr. Powell) has taught me to think of as the north-eastern part of the island. For 50 years, people in the Province had their own devolved Government. Therefore, it would be entirely wrong for anyone in the Chamber to suggest that that was something new. Equally,

  545
  in the Province today there is a highly developed, sophisticated, articulated form of devolved Administration which is not subject to anything like enough democratic scrutiny and control. I hope there is at least that much agreement between myself and my right hon. and hon. Friends.
  I greatly regret the resignations of my hon. Friends. The fact that my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) has chosen to resign is a matter of great sadness to me. It was tinged, I must admit, with a tiny bit of relief, because, in his pre-existent form, he was my Whip, and a very fierce and intransigent Whip he was, too. That slight feeling of relief was quickly overturned when I realised that he had taken the decision after six months in the Whips' Office. During that period he built up a considerable head of steam which I am sure will emerge in Committee.
  My hon. Friend the Member for Fareham (Mr. Lloyd) has equally chosen to take that course, and it is greatly to be regretted. I shall greatly miss his friendship and advice in the Northern Ireland Office.
  Mrs. Jill Knight rose—
  Mr. Patten: Perhaps I may just finish my valedictory remarks about three of my hon. Friends before giving way.
  I understand also that my hon. Friend the Member for Dorset, South (Viscount Cranborne) has chosen to take that course. That, again, is a matter of great regret to me, because I have only just finished penning my note of congratulation to him on becoming a Parliamentary Private Secretary. He may well have been going for the parliamentary world record for the shortness of the period he held that post. I offer my sincere regrets to my three hon. Friends.
  Mrs. Knight: I sympathise with my hon. Friend's sadness at the now apparent distance between him and his hon. Friends. Others on the Government Back Benches fear, with good reason, that if devolution is all right for Northern Ireland, within a year or two it may be acceptable for Scotland and Wales—heaven forbid! That, above all else, worries some hon. Members.
  Mr. Patten: The devolution that existed in Northern Ireland for half a century was not a threat to the Union. The devolution proposed in the Bill will not be either.
  Viscount Cranborne: Will my hon. Friend give way?
  Mr. Patten: I cannot resist giving way to my hon. Friend.
  Viscount Cranborne: I am grateful to my hon. Friend for his charitable remarks and his public act of friendship after my short period as an official supporter of the Government.
  As a parallel to his case, my hon. Friend instances 50 years of successful devolved government in Northern Ireland. One reason for the success was that the minority in Northern Ireland was given no power of veto while Stormont existed. After it was abolished, the question of power-sharing arose. His case is intrinsically different from the parallel that he attempts to draw.
  Mr. Patten: We both know what happened on the collapse of the Assembly and also what happened in the previous 50 years.
  The Bill contains clear evidence of the Government's commitment to the people of Northern Ireland by
  546
  providing them with an opportunity for a devolved Government. I was delighted to hear Northern Ireland Members give that opportunity a qualified welcome.
  I draw attention to the flexibility in the Bill's provisions. We are not prescribing arrangements for the Assembly. It is for the Assembly to make recommendations on the composition of the Executive and to consider whether there should be a Chief Executive and whether the Northern Ireland Administration should operate a conventional system of cabinet government. It is for the parties within the Assembly to reach the necessary agreement on devolution proposals and to negotiate safeguards for their respective positions—minority and majority alike.
  Provided that the political will exists—I caught glimpses of political good will from Northern Ireland Members—together with a positive desire to take responsibility in Northern Ireland, the Government are convinced that the arrangements can work well and practically. My hon. Friend the Member for Peterborough (Dr. Mawhinney) pointed that out in his notable speech. The point was reinforced by my hon. Friend the Member for Hazel Grove (Mr. Arnold).
  We shall reject the amendment moved by my hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison). Like many of the points raised by my hon. Friends and by Northern Ireland Members, it advances criticisms which I hope were fully dealt with by my right hon. Friend the Secretary of State. It is not necessary for me to repeat the arguments put forward in the debate. However, I hope that my hon. Friend and I can agree that we should finally and solemnly bury the opinion poll that has caused so much aggravation and discussion in the debate. Statistical points were being knocked backwards and forwards across the Chamber as if it were some statistical tennis court. It was some relief that decimal points were not referred to.
  I hope that my right hon. Friend made it clear that our proposals in no way weaken the authority of Parliament or put at risk the Union of the United Kingdom. A number of hon. Members made this point, but it was made most lucidly by my right hon. Friend the Member for Farnham (Mr. MacMillan) in a notable speech.
  The Bill does not represent a threat to the sovereignty of the United Kingdom or to the Union. It is only this Chamber—Parliament, and only Parliament—that can decide whether devolution proposals are acceptable. The ultimate power of this Chamber is not taken away. Northern Ireland's position as a constituent part of the United Kingdom remains unaffected by the Bill. I repeat that Northern Ireland's position as a constituent part of the United Kingdom remains unaffected by the Bill.
  Hon. Members, particularly my right hon. and hon. Friends, may feel that I claim protection for the Union because it is in my interests to get the Bill through. If so, I draw their attention to that notable authority, my hon. Friend the Member for Northampton, North (Mr. Marlow). On 29 April during Question Time, he described the Assembly as a
  "bulwark to sustain the Union between Northern Ireland and the United Kingdom."
  My hon. Friend asked:
  "When the new Assembly has been set up will it not be unimaginable that the North can be forced into union with the South, against the will of that Assembly?"—[Official Report, 29 April 1982; Vol. 22, c. 963–64.]
  My hon. Friend is absolutely right.

  547
  Despite what my hon. Friend the Member for Beckenham (Sir P. Goodhart) has said and written, a referendum would not help the course on which we are set, not least because the Bill, in its flexibility, militates against any simple "Yes-No" question being introduced.
  The supreme authority of Parliament, as my hon. Friend the Member for Northampton, North rightly said, is not challenged by the Bill. I accept that there are those who strongly, passionately and articulately believe—I refer to speeches made today and earlier by my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery)—that full integration of Northern Ireland with the rest of the United Kingdom is the right course. A scattering of hon. Members believe that we should simply carry on with direct rule. However, I must tell the House frankly that no arrangement, other than a devolved Government, holds out the prospect of being acceptable to all the United Kingdom.
  Northern Ireland has a long tradition of devolved institutions. The case for devolution in Northern Ireland, because of its 50 years of devolved institutions, is totally different from that of Wales or Scotland. There are a number of constitutional experts in the Chamber tonight and to them I say that unity does not mean uniformity in the context of our constitution.
  I should also point out that nonconformity of institutions does not necessarily equal disunity in the kingdom itself. There is nothing more that I can say on this occasion to my right hon. and hon. Friends about the points that they raised. I hope that many of them who have listened in particular to my right hon. Friend the Secretary of State will be convinced by our arguments, but those who are not we shall endeavour to answer in Committee.
  I come now to the points raised by the right hon. Member for Mansfield (Mr. Concannon) and his hon. Friend the Member for Hammmersmith, North (Mr. Soley). I thank the hon. Member for Hammersmith, North for completing his speech so speedily.
  The right hon. Gentleman and his hon. Friend raised a number of important points on which they requested specific answers. I shall attempt, albeit briefly, to do so. The right hon. Gentleman asked whether it would be better if the Presiding Officer, rather than being elected by Members of the Assembly, were appointed by the Secretary of State for Northern Ireland. We do not think that that would be a good idea. We wish the Assembly to take as much responsibility as possible for the conduct of its own affairs. I agree with the hon. Member for Antrim, North (Rev. Ian Paisley), who believes that there are people in Northern Ireland, from whichever side of the political or sectarian divide they come, who are able to take on the responsibility of Presiding Officer.
  I am told by reliable Unionist sources in the Province that during the course of the Assembly a now-deceased sometime Member of the Stormont Parliament, Mr. Nat Minford, was an unqualified success in the non-partisan and non-sectarian way in which he chaired that Assembly. I do not see why a successor of his, or the hon. Member for Belfast, West (Mr. Fitt), or some other hon. Member should not fulfil that role.
  The right hon. Member for Mansfield asked what could or would happen should the Assembly decide that it would like to have certain of the powers exercised by one Northern Ireland Department given back, but without all
  548
  the powers being given back. The right hon. Gentleman used the Department of the Environment as an example. From the provisions in the Bill it is clear that only whole Departments can be given back, but there will be nothing to stop the Administration of the United Kingdom from deciding that Departments should be changed and split in order to make that possible. Indeed, there is a continuing process. Every new Administration and Government seem to change the shape and size of their own Departments.
  The right hon. Gentleman was right to say that there was nothing in the Bill to require what is colloquially known as power sharing, but equally there is nothing to prevent members of the Assembly from coming to whatever arrangements they think proper to achieve a measure of understanding between both sides. The responsibility is theirs. None of the responsibility is imposed by this House.
  The right hon. Gentleman also raised a number of detailed points about the 70 per cent. test. Many other hon. Members also raised the same matter. This is neither the time nor the place to deal with those points. However, many hon. Members have suggested that, somehow, devolution orders would be debated for an hour and a half in the dead of night without many hon. Members present. There will be at least two debates on any devolution order. There will be a full debate, as my right hon. Friend has said, and as the White Paper clearly spells out, on the principle of the devolution order, and another debate on the order itself. There is no halfway house between an Act and an Order in Council. No form of Second Reading Committee on any measure would be suitable for constitutional issues such as Orders in Council. That is the right way for the House to proceed.
  Northern Ireland Members, except for the hon. Member for Belfast, West, have stressed that on matters of security they wish the voice of the Assembly to be heard. We shall consider those points in Committee.
  The system of government that is to be introduced was criticised by the right hon. Member for Down, South in his speech on the White Paper, and by the hon. Member for Belfast, West, both of whom gave remarkable resumes of how the present situation had arisen. The right hon. Gentleman said that the biggest problem in the continuation of direct rule was that there would not be an authentic Northern Ireland voice in the government of the country. Both my right hon. Friend and I accept that that is a genuine drawback, but at least when the Assembly is set up, as I hope and trust it will be, the affairs of Northern Ireland, of the Northern Ireland Office and of Her Majesty's Government will be put under much closer scrutiny than has happened for a decade. That must mean better government for Northern Ireland.
  I hope that that was what prompted the hon. Member for Armagh (Mr. McCusker) to say in his speech on the White Paper—he was very honest—that he did not like what the Secretary of State was doing, but that he was prepared to try to make it work.
  The hon. Member for Belfast, East (Mr. Robinson) said tonight that he thought that it was sensible to take what was offered. The hon. Member for Belfast, West, in a remarkable and passionate speech, said that what was on offer was well worth trying. The hon. Member for Antrim, North said that it was a step in the right direction.
  My right hon. and hon. Friends who doubt the veracity of what we are doing cannot say that it is doubted across the whole of Northern Ireland. That is not true, and we

  549
  have evidence of that. I believe that it is the wish of the overwhelming majority of people in Great Britain, who share Northern Ireland's concern about its future, that devolution should occur. However, I stress that devolution will take place only by consent, double consent—that of the people of the Assembly, and that of the people in this Chamber. I assure my right hon. and hon. Friends that none of the sovereignty of this Chamber is taken away.
  It serves the people of Northern Ireland ill for people to suggest that this measure attempts to bring in power sharing by the back door or to impose majority rule again via Stormont, or to deflect in any way from the Union and from the integrity of the United Kingdom. The Bill, which I hope will receive its Second Reading tonight, does none of those things. It simply offers the people of Northern Ireland an opportunity to run their own affairs again.
  It is a chance and an opportunity for responsibility. It is a chance and an opportunity which should be grasped in Northern Ireland in a statesmanlike way.
  Question put, That the amendment be made:
  The House divided: Ayes 29, Noes 312.

  Division No. 140]

  [10 pm

  AYES

  Amery, Rt Hon Julian

  Morris, M. (N'hampton S)

  Biggs-Davison, Sir John

  Porter, Barry

  Body, Richard

  Powell, Rt Hon J.E. (S Down)

  Brown, Michael (Brigg & Sc'n)

  Proctor, K. Harvey

  Budgen, Nick

  Rees-Davies, W. R.

  Cranborne, Viscount

  Ross, Wm. (Londonderry)

  Dunlop, John

  Shepherd, Richard

  Fell, Sir Anthony

  Smyth, Rev. W. M. (Belfast S)

  Gardiner, George (Reigate)

  Stanbrook, Ivor

  Goodhart, Sir Philip

  Stokes, John

  Gorst, John

  Wells, John (Maidstone)

  Knight, Mrs Jill

  Winterton, Nicholas

  Lloyd, Peter (Fareham)

  McCusker, H.

  Tellers for the Ayes:

  Macmillan, Rt Hon M.

  Mr. John Farr and Mr. Christopher Murphy

  Molyneaux, James

  Morgan, Geraint

  NOES

  Adley, Robert

  Browne, John (Winchester)

  Alexander, Richard

  Bruce-Gardyne, John

  Alison, Rt Hon Michael

  Bryan, Sir Paul

  Allaun, Frank

  Buck, Antony

  Alton, David

  Bulmer, Esmond

  Ancram, Michael

  Butcher, John

  Arnold, Tom

  Cadbury, Jocelyn

  Aspinwall, Jack

  Campbell-Savours, Dale

  Atkins, Rt Hon H.(S'thorne)

  Carlisle, John (Luton West)

  Atkins, Robert(Preston N)

  Carlisle, Kenneth (Lincoln)

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

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

  Atkinson, N.(H'gey,)

  Cartwright, John

  Baker, Kenneth(St.M'bone)

  Chalker, Mrs. Lynda

  Baker, Nicholas (N Dorset)

  Chapman, Sydney

  Banks, Robert

  Churchill, W. S.

  Beaumont-Dark, Anthony

  Clark, Sir W. (Croydon S)

  Beith, A. J.

  Clarke, Kenneth (Rushcliffe)

  Bennett, Sir Frederic (T'bay)

  Clegg, Sir Walter

  Benyon, Thomas (A'don)

  Cockeram, Eric

  Best, Keith

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

  Bevan, David Gilroy

  Colvin, Michael

  Blackburn, John

  Concannon, Rt Hon J. D.

  Blaker, Peter

  Cope, John

  Bonsor, Sir Nicholas

  Corrie, John

  Boscawen, Hon Robert

  Costain, Sir Albert

  Bottomley, Peter (W'wich W)

  Crawshaw, Richard

  Bowden, Andrew

  Critchley, Julian

  Braine, Sir Bernard

  Crouch, David

  Bright, Graham

  Cunliffe, Lawrence

  Brinton, Tim

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

  Brocklebank-Fowler, C.

  Dean, Paul (North Somerset)

  Brooke, Hon Peter

  Dewar, Donald

  Brotherton, Michael

  Dickens, Geoffrey

  550

  Dorrell, Stephen

  Jessel, Toby

  Dover, Denshore

  Johnson Smith, Geoffrey

  du Cann, Rt Hon Edward

  Jopling, Rt Hon Michael

  Dunn, James A.

  Joseph, Rt Hon Sir Keith

  Dunn, Robert (Dartford)

  Kaberry, Sir Donald

  Dunwoody, Hon Mrs G.

  Kerr, Russell

  Dykes, Hugh

  Kershaw, Sir Anthony

  Eden, Rt Hon Sir John

  Kimball, Sir Marcus

  Edwards, Rt Hon N. (P'broke)

  Kitson, Sir Timothy

  Eggar, Tim

  Knox, David

  Elliott, Sir William

  Lamont, Norman

  Ellis, Tom (Wrexham)

  Lang, Ian

  Emery, Sir Peter

  Langford-Holt, Sir John

  English, Michael

  Lawrence, Ivan

  Eyre, Reginald

  Lawson, Rt Hon Nigel

  Fairgrieve, Sir Russell

  Lee, John

  Faith, Mrs Sheila

  Le Marchant, Spencer

  Fenner, Mrs Peggy

  Lennox-Boyd, Hon Mark

  Finsberg, Geoffrey

  Lester, Jim (Beeston)

  Fisher, Sir Nigel

  Lewis, Kenneth (Rutland)

  Fitt, Gerard

  Lloyd, Ian (Havant & W'loo)

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

  Luce, Richard

  Fletcher-Cooke, Sir Charles

  Lyell, Nicholas

  Fookes, Miss Janet

  Lyons, Edward (Bradf'd W)

  Forman, Nigel

  McCartney, Hugh

  Fowler, Rt Hon Norman

  Macfarlane, Neil

  Fox, Marcus

  MacGregor, John

  Fraser, Peter (South Angus)

  McGuire, Michael (Ince)

  Freud, Clement

  McKay, Allen (Penistone)

  Fry, Peter

  MacKay, John (Argyll)

  Gardner, Edward (S Fylde)

  Maclennan, Robert

  Garel-Jones, Tristan

  McNair-Wilson, M. (N'bury)

  Gilmour, Rt Hon Sir Ian

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

  Ginsburg, David

  McNamara, Kevin

  Glyn, Dr Alan

  McQuarrie, Albert

  Golding, John

  Madel, David

  Goodhew, Sir Victor

  Magee, Bryan

  Goodlad, Alastair

  Major, John

  Gow, Ian

  Marland, Paul

  Grant, Anthony (Harrow C)

  Marlow, Antony

  Grant, John (Islington C)

  Marshall, Michael (Arundel)

  Gray, Hamish

  Marten, Rt Hon Neil

  Greenway, Harry

  Mates, Michael

  Grieve, Percy

  Mawby, Ray

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

  Mawhinney, Dr Brian

  Griffiths, Peter Portsm'th N)

  Maxwell-Hyslop, Robin

  Grist, Ian

  Mayhew, Patrick

  Grylls, Michael

  Mellor, David

  Gummer, John Selwyn

  Meyer, Sir Anthony

  Hamilton, Hon A.

  Miller, Hal (B'grove)

  Hamilton, Michael (Salisbury)

  Mills, Iain (Meriden)

  Hampson, Dr Keith

  Mills, Peter (West Devon)

  Hannam, John

  Miscampbell, Norman

  Harrison, Rt Hon Walter

  Mitchell, R. C. (Soton Itchen)

  Haselhurst, Alan

  Moate, Roger

  Havers, Rt Hon Sir Michael

  Monro, Sir Hector

  Hawkins, Paul

  Montgomery, Fergus

  Hawksley, Warren

  Moore, John

  Hayhoe, Barney

  Morrison, Hon P. (Chester)

  Heath, Rt Hon Edward

  Mudd, David

  Heddle, John

  Myles, David

  Henderson, Barry

  Needham, Richard

  Heseltine, Rt Hon Michael

  Nelson, Anthony

  Hicks, Robert

  Neubert, Michael

  Higgins, Rt Hon Terence L.

  Nott, Rt Hon John

  Hill, James

  Onslow, Cranley

  Hogg, Hon Douglas (Gr'th'm)

  Oppenheim, Rt Hon Mrs S.

  Holland, Philip (Carlton)

  Osborn, John

  Home Robertson, John

  Owen, Rt Hon Dr David

  Hooson, Tom

  Page, John (Harrow, West)

  Horam, John

  Page, Richard (SW Herts)

  Hordern, Peter

  Parkinson, Rt Hon Cecil

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

  Parris, Matthew

  Howell, Ralph (N Norfolk)

  Patten, Christopher (Bath)

  Howells, Geraint

  Patten, John (Oxford)

  Hunt, David (Wirral)

  Pattie, Geoffrey

  Hunt, John (Ravensbourne)

  Pawsey, James

  Irving, Charles (Cheltenham)

  Percival, Sir Ian

  Jenkin, Rt Hon Patrick

  Peyton, Rt Hon John

  Jenkins, Rt Hon Roy (Hillh'd)

  Pink, R. Bonner

  551

  Pollock, Alexander

  Stewart, A.(E Renfrewshire)

  Prentice, Rt Hon Reg

  Stewart, Ian (Hitchin)

  Price, Sir David (Eastleigh)

  Stradling Thomas, J.

  Prior, Rt Hon James

  Tapsell, Peter

  Pym, Rt Hon Francis

  Tebbit, Rt Hon Norman

  Raison, Rt Hon Timothy

  Temple-Morris, Peter

  Rathbone, Tim

  Thatcher, Rt Hon Mrs M.

  Rees, Rt Hon M (Leeds S)

  Thomas, Mike (Newcastle E)

  Renton, Tim

  Thomas, Rt Hon Peter

  Rhodes James, Robert

  Thompson, Donald

  Rhys Williams, Sir Brandon

  Thorne, Neil (Ilford South)

  Ridsdale, Sir Julian

  Thornton, Malcolm

  Rifkind, Malcolm

  Tinn, James

  Rippon, Rt Hon Geoffrey

  Townend, John (Bridlington)

  Roberts, M. (Cardiff NW)

  Townsend, Cyril D, (B'heath)

  Roberts, Wyn (Conway)

  Trippier, David

  Rodgers, Rt Hon William

  Trotter, Neville

  Roper, John

  van Straubenzee, Sir W.

  Rossi, Hugh

  Vaughan, Dr Gerard

  Rost, Peter

  Viggers, Peter

  Royle, Sir Anthony

  Waddington, David

  Sainsbury, Hon Timothy

  Wakeham, John

  St. John-Stevas, Rt Hon N.

  Waldegrave, Hon William

  Scott, Nicholas

  Wall, Sir Patrick

  Shaw, Giles (Pudsey)

  Waller, Gary

  Shaw, Michael (Scarborough)

  Walters, Dennis

  Shelton, William (Streatham)

  Ward, John

  Silvester, Fred

  Warren, Kenneth

  Sims, Roger

  Watson, John

  Skeet, T. H. H.

  Wells, Bowen

  Skinner, Dennis

  Wells, John (Maidstone)

  Smith, Dudley

  Wheeler, John

  Soley, Clive

  Whitelaw, Rt Hon William

  Speed, Keith

  Whitney, Raymond

  Speller, Tony

  Wickenden, Keith

  Spence, John

  Wiggin, Jerry

  Spicer, Jim (West Dorset)

  Wilkinson, John

  Spicer, Michael (S Worcs)

  Williams, D.(Montgomery)

  Sproat, Iain

  Wolfson, Mark

  Squire, Robin

  Young, Sir George (Acton)

  Stainton, Keith

  Younger, Rt Hon George

  Stallard, A. W.

  Stanley, John

  Tellers for the Noes:

  Steen, Anthony

  Mr. Anthony Berry and Mr.Carol Mather

  Stevens, Martin

  Question accordingly negatived.
  Main Question put forthwith pursuant to Standing Order No.39 (Amendment on Second or Third reading):—
  The House divided:Ayes 291, Noes 29.

  Division No. 141]

  [10.13 pm

  AYES

  Adley, Robert

  Bowden, Andrew

  Alexander, Richard

  Braine, Sir Bernard

  Alison, Rt Hon Michael

  Bright, Graham

  Alton, David

  Brinton, Tim

  Amery, Rt Hon Julian

  Brocklebank-Fowler, C.

  Ancram, Michael

  Brooke, Hon Peter

  Arnold, Tom

  Brotherton, Michael

  Aspinwall, Jack

  Browne, John (Winchester)

  Atkins, Rt Hon H.(S'thorne)

  Bruce-Gardyne, John

  Atkins, Robert(Preston N)

  Bryan, Sir Paul

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

  Buck, Antony

  Baker, Kenneth(St.M'bone)

  Bulmer, Esmond

  Baker, Nicholas (N Dorset)

  Butcher, John

  Banks, Robert

  Cadbury, Jocelyn

  Beaumont-Dark, Anthony

  Carlisle, John (Luton West)

  Beith, A. J.

  Carlisle, Kenneth (Lincoln)

  Bennett, Sir Frederic (T'bay)

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

  Benyon, Thomas (A'don)

  Cartwright, John

  Best, Keith

  Chalker, Mrs. Lynda

  Bevan, David Gilroy

  Chapman, Sydney

  Blackburn, John

  Churchill, W. S.

  Blaker, Peter

  Clark, Sir W. (Croydon S)

  Bonsor, Sir Nicholas

  Clarke, Kenneth (Rushcliffe)

  Boscawen, Hon Robert

  Clegg, Sir Walter

  Bottomley, Peter (W'wich W)

  Cockeram, Eric

  552

  Colvin, Michael

  Hunt, John (Ravensbourne)

  Cope, John

  Irving, Charles (Cheltenham)

  Corrie, John

  Jenkin, Rt Hon Patrick

  Costain, Sir Albert

  Jenkins, Rt Hon Roy (Hillh'd)

  Crawshaw, Richard

  Jessel, Toby

  Critchley, Julian

  Johnson Smith, Geoffrey

  Crouch, David

  Jopling, Rt Hon Michael

  Dean, Paul (North Somerset)

  Joseph, Rt Hon Sir Keith

  Dickens, Geoffrey

  Kaberry, Sir Donald

  Dorrell, Stephen

  Kershaw, Sir Anthony

  Dover, Denshore

  Kimball, Sir Marcus

  du Cann, Rt Hon Edward

  Kitson, Sir Timothy

  Dunn, James A.

  Knox, David

  Dunn, Robert (Dartford)

  Lamont, Norman

  Dykes, Hugh

  Lang, Ian

  Eden, Rt Hon Sir John

  Langford-Holt, Sir John

  Edwards, Rt Hon N. (P'broke)

  Lawrence, Ivan

  Eggar, Tim

  Lawson, Rt Hon Nigel

  Elliott, Sir William

  Lee, John

  Ellis, Tom (Wrexham)

  Le Marchant, Spencer

  Emery, Sir Peter

  Lennox-Boyd, Hon Mark

  Eyre, Reginald

  Lester, Jim (Beeston)

  Fairgrieve, Sir Russell

  Lewis, Kenneth (Rutland)

  Faith, Mrs Sheila

  Lloyd, Ian (Havant & W'loo)

  Fenner, Mrs Peggy

  Luce, Richard

  Finsberg, Geoffrey

  Lyell, Nicholas

  Fisher, Sir Nigel

  Lyons, Edward (Bradf'd W)

  Fitt, Gerard

  Macfarlane, Neil

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

  MacGregor, John

  Fletcher-Cooke, Sir Charles

  MacKay, John (Argyll)

  Fookes, Miss Janet

  Maclennan, Robert

  Forman, Nigel

  McNair-Wilson, M. (N'bury)

  Fowler, Rt Hon Norman

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

  Fox, Marcus

  McQuarrie, Albert

  Fraser, Peter (South Angus)

  Madel, David

  Freud, Clement

  Magee, Bryan

  Fry, Peter

  Major, John

  Gardner, Edward (S Fylde)

  Marland, Paul

  Garel-Jones, Tristan

  Marlow, Antony

  Gilmour, Rt Hon Sir Ian

  Marshall, Michael (Arundel)

  Ginsburg, David

  Marten, Rt Hon Neil

  Glyn, Dr Alan

  Mates, Michael

  Goodhew, Sir Victor

  Mawby, Ray

  Goodlad, Alastair

  Mawhinney, Dr Brian

  Gow, Ian

  Maxwell-Hyslop, Robin

  Grant, Anthony (Harrow C)

  Mayhew, Patrick

  Grant, John (Islington C)

  Mellor, David

  Gray, Hamish

  Meyer, Sir Anthony

  Greenway, Harry

  Miller, Hal (B'grove)

  Grieve, Percy

  Mills, Iain (Meriden)

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

  Mills, Peter (West Devon)

  Griffiths, Peter Portsm'th N)

  Miscampbell, Norman

  Grist, Ian

  Mitchell, R. C. (Soton Itchen)

  Grylls, Michael

  Moate, Roger

  Gummer, John Selwyn

  Monro, Sir Hector

  Hamilton, Hon A.

  Montgomery, Fergus

  Hamilton, Michael (Salisbury)

  Moore, John

  Hampson, Dr Keith

  Morrison, Hon P. (Chester)

  Hannam, John

  Mudd, David

  Haselhurst, Alan

  Myles, David

  Havers, Rt Hon Sir Michael

  Needham, Richard

  Hawkins, Paul

  Nelson, Anthony

  Hawksley, Warren

  Neubert, Michael

  Hayhoe, Barney

  Nott, Rt Hon John

  Heath, Rt Hon Edward

  Onslow, Cranley

  Heddle, John

  Oppenheim, Rt Hon Mrs S.

  Henderson, Barry

  Osborn, John

  Heseltine, Rt Hon Michael

  Owen, Rt Hon Dr David

  Hicks, Robert

  Page, John (Harrow, West)

  Higgins, Rt Hon Terence L.

  Page, Richard (SW Herts)

  Hill, James

  Parkinson, Rt Hon Cecil

  Hogg, Hon Douglas (Gr'th'm)

  Parris, Matthew

  Holland, Philip (Carlton)

  Patten, Christopher (Bath)

  Hooson, Tom

  Patten, John (Oxford)

  Horam, John

  Pattie, Geoffrey

  Hordern, Peter

  Pawsey, James

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

  Percival, Sir Ian

  Howell, Ralph (N Norfolk)

  Peyton, Rt Hon John

  Howells, Geraint

  Pink, R. Bonner

  Hunt, David (Wirral)

  Pollock, Alexander

  553

  Prentice, Rt Hon Reg

  Squire, Robin

  Price, Sir David (Eastleigh)

  Stainton, Keith

  Prior, Rt Hon James

  Stanley, John

  Pym, Rt Hon Francis

  Steen, Anthony

  Raison, Rt Hon Timothy

  Stevens, Martin

  Rathbone, Tim

  Stewart, A.(E Renfrewshire)

  Renton, Tim

  Stewart, Ian (Hitchin)

  Rhodes James, Robert

  Stradling Thomas, J.

  Rhys Williams, Sir Brandon

  Tapsell, Peter

  Ridsdale, Sir Julian

  Taylor, Teddy (S'end E)

  Rifkind, Malcolm

  Tebbit, Rt Hon Norman

  Rippon, Rt Hon Geoffrey

  Temple-Morris, Peter

  Roberts, M. (Cardiff NW)

  Thatcher, Rt Hon Mrs M.

  Roberts, Wyn (Conway)

  Thomas, Mike (Newcastle E)

  Rodgers, Rt Hon William

  Thomas, Rt Hon Peter

  Roper, John

  Thompson, Donald

  Rossi, Hugh

  Thorne, Neil (Ilford South)

  Rost, Peter

  Thornton, Malcolm

  Royle, Sir Anthony

  Townend, John (Bridlington)

  Sainsbury, Hon Timothy

  Townsend, Cyril D, (B'heath)

  St. John-Stevas, Rt Hon N.

  Trippier, David

  Scott, Nicholas

  Trotter, Neville

  Shaw, Giles (Pudsey)

  van Straubenzee, Sir W.

  Shaw, Michael (Scarborough)

  Vaughan, Dr Gerard

  Shelton, William (Streatham)

  Viggers, Peter

  Silvester, Fred

  Waddington, David

  Sims, Roger

  Wakeham, John

  Skeet, T. H. H.

  Waldegrave, Hon William

  Smith, Dudley

  Walker, B. (Perth )

  Speed, Keith

  Wall, Sir Patrick

  Speller, Tony

  Waller, Gary

  Spence, John

  Walters, Dennis

  Spicer, Jim (West Dorset)

  Ward, John

  Spicer, Michael (S Worcs)

  Warren, Kenneth

  Sproat, Iain

  Watson, John

  554

  Wells, Bowen

  Williams, D.(Montgomery)

  Wells, John (Maidstone)

  Wolfson, Mark

  Wheeler, John

  Young, Sir George (Acton)

  Whitelaw, Rt Hon William

  Younger, Rt Hon George

  Whitney, Raymond

  Wickenden, Keith

  Tellers for the Ayes:

  Wiggin, Jerry

  Mr. Anthony Berry and Mr. Carol Mather.

  Wilkinson, John

  NOES

  Amery, Rt Hon Julian

  Morris, M. (N'hampton S)

  Biggs-Davison, Sir John

  Paisley, Rev Ian

  Body, Richard

  Porter, Barry

  Budgen, Nick

  Powell, Rt Hon J.E. (S Down)

  Cranborne, Viscount

  Proctor, K. Harvey

  Dunlop, John

  Robinson, P. (Belfast E)

  Gardiner, George (Reigate)

  Ross, Wm. (Londonderry)

  Goodhart, Sir Philip

  Shepherd, Richard

  Gorst, John

  Smyth, Rev. W. M. (Belfast S)

  Hooson, Tom

  Stanbrook, Ivor

  Knight, Mrs Jill

  Stokes, John

  Lloyd, Peter (Fareham)

  Winterton, Nicholas

  McCusker, H.

  Macmillan, Rt Hon M.

  Tellers for the Noes:

  McQuade, John

  Mr. Christopher Murphy and Mr. john Farr

  Molyneaux, James

  Morgan, Geraint

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Committee Of the whole House.—[Mr. Thompson.]
  Committee tomorrow.

  Northern Ireland [Money]
  Queen's Recommendation having been signified—
  Motion made, and Question proposed,
  That, for the purposes of any Act of the present Session to make new provision for the resumption of legislative and executive functions by the Northern Ireland Assembly and by persons responsible to it and to amend the Northern Ireland Constitution Act 1973 and the Northern Ireland Assembly Act 1973, it is expedient to authorise any payments out of or into the Consolidated Fund which are attributable to extending section 4(2) of the last-mentioned Act to subsequent elections of members of the Assembly.—[Mr. John Patten.]
  10.25 pm
  Mr. J. Enoch Powell: There are a number of questions which I would want to put.
  Mr. Michael McNair-Wilson: On a point of order, Mr. Speaker. Is it conceivable that some of those hon. Members who are blocking the gangway could leave the Chamber?
  Mr. Speaker: I think that hon. Members are crowding in to hear the right hon. Member for Down, South (Mr. Powell). I hope that they will be quiet.
  Mr. Powell: As the money resolution is drawn, it only provides from the issue out of the Consolidated Fund of expenditure due to subsequent elections of Members of the Assembly. That directs our attention to a rather curious feature in the financial effects clause of the explanatory and financial memorandum to the Bill which is our natural guide in seeking to understand the background to the resolution. The financial paragraph of the explanatory and financial memorandum refers to the expenses for the next Assembly election, which are estimated at £750,000. Curiously enough—this is a matter of considerable criticism—it does not give the House, as any financial memorandum should, any view or estimate whatever of the full additional expenditure which the legislation will involve.
  There seem to be two possibilities as regards the money resolution. First, the other expenditure incurred under the Bill will not come out of the Consolidated Fund. I do not see how that can be since one way or another the expenditure incurred in Northern Ireland must come out of the Consolidated Fund. The alternative, which I would welcome, is that the money resolution has been defectively drafted, in which case the Government will be aware that before they proceed further with the Bill they will have to introduce another money resolution. It will be realised that the point that I am putting is not merely a search for information but is vital to the further proceedings on the Bill.
  I trust that, however inadequate may have been the briefing of the Minister upon the question which the House has just decided, the Minister will have been fully briefed upon the wording of the money resolution. My proposition is that prima facie the money resolution does not cover the expenditure which will be involved as a result of this legislation. I should mention, not all the ways in which additional expenditure would be caused if this Bill ever unfortunately became law, but some of the more obvious ways.
  If the House will look at clause 4, it will find references to the chairman, deputy chairman and in some cases two deputy chairmen.
  556
  One way or another there is quite a plethora of chairmen. The House will note that special provision may be made for the payment, salaries, and so on, of such persons. I suppose that they will be drawing salaries as Members of the Assembly. Where does that appear? In addition, those who enjoy a patronage that could result in being appointed chairman, deputy chairman or second deputy chairman will have higher salaries.
  In Committee, the House will be inquisitive to know on what scale—I seek a neutral word—it is intended to reward for their services those who are fortunate enough to secure those appointments. I hope that no hon. Member will take exception to the phrase "reward for their services". Since there is to be a committee in respect of every Department of the Government of Northern Ireland and since the Assembly is to have the power to establish other committees, and since nothing in the Bill prevents the payment of salaries to the chairmen and deputy chairmen of the additional supernumerary or superfluous committees that the Assembly might create, a considerable sum of public money will be required by the very nature of the Bill's provisions.
  If that money is not to come from the Consolidated Fund, where will it come from? Before we accept the money resolution, we must understand that. I was once Financial Secretary to the Treasury. I hope that I shall not wound the present Financial Secretary too gravely when I say that, if I had been presented with such a scrappy and inadequate financial memorandum to a Bill, there would have been considerable trouble and I would have asked to be shown a much more substantial draft before letting the matter go forward.
  Regardless of whether the money resolution should cover the matter of such salaries, there is no doubt that the House should have been warned that an additional load was to fall on public funds. I do not know whether the Chancellor of the Exchequer and the Prime Minister—with her well-known keenness for avoiding excessive additions to public expenditure—have been made aware of the extent to which public expenditure will, or could, be increased as a result of the Bill. It cannot be denied that the House has been treated scurvily by the financial effects paragraph and by the scrappy four lines in the memorandum.
  The memorandum entirely ignores the matter of salaries. It also ignores the great duplication of effort that will inevitably arise if the Assembly develops in the way that the Bill envisages. Not only will the Assembly—[Interruption.]I do not wish to interrupt any communications that the Under-Secretary of State may be receiving. I am sure that they are vital. I should not wish to interrupt him and, if it assists, I shall be quite willing to include a sentence or two that might not be essential to my argument. The Under-Secretary may say that he can hear in two places at once. I do not want to be carried too far by speculation, but that may account for the fact that he could give his approval, on his own personal honour, to the Bill that has just been given a Second Reading.
  However, I shall leave that matter aside and go back to the financial resolution. There are other aspects of additional public expenditure on which the House should be informed. When, many years ago, the House laid down a rule that it was not prepared to be presented with a Bill for Second Reading, unless it was covered with a financial memorandum so that hon. Members might know, when they were voting for the Bill, what the financial effects

  557
  were, it expected that that financial resolution, although it might inevitably contain speculative and hypothetical matter, would nevertheless represent an honest attempt to assess the public expenditure that was involved.
  Apparently no thought has been given to the expenditure incurred on salaries; no thought has apparently been given to the expenditure incurred in the operations of the Assembly. We have been told repeatedly, and by no one more emphatically than the Minister, that the Assembly will carry out a detailed scrutiny such as we have not been able to achieve of the various operations of the Northern Ireland Departments.
  Are the Government going to tell us that this marvellous expansion from the, according to them, almost nugatory examination that we have been able to give to the Northern Ireland Office into a detailed investigation of what is going on Department by Department, branch by branch and activity by activity, will involve no extra public expenditure? It is almost a contradiction. It virtually reduces to a nullity one of the major reasons on the basis of which the Minister commended the Bill to the House on Second Reading.
  Mr. William Ross: I am listening with interest to my right hon. Friend pointing out to the House the things that are not covered by the memorandum. Will he assure us that covered by the memorandum is not only the cost of the officials and the printing of all the ballot papers—for instance, the ballot papers for Antrim, South will be the size of a newspaper page—but the cost of the extra security that will have to be provided throughout the lead-up period to the election and during the election?
  Mr. Powell: In answer to my hon. Friend the Member for Londonderry (Mr. Ross) may I say that perhaps I have been too ready to accept the estimate that we were offered of only £750,000 for the Assembly elections. I am sure that, having heard what my hon. Friend has said, the Government will be prepared to confirm that the estimate of £750,000 includes all the ancillary and incidental expenses that are involved in any election, including those incurred particularly in Northern Ireland. Otherwise, obviously, even the figure that they have vouchsafed to give us would be a careless and inadequate figure.
  But apart from that there are large areas of public expenditure, which, if the Bill is to mean anything, are bound to be incurred as a result. The thought has just entered my head that it is possible that the inadequacy of the financial resolution represented a conviction on the part of those who drew up the memorandum, perhaps a settled conviction on the part of the Treasury, that there never was going to be any devolution taking place by virtue of the Bill. That could be the reason why they have confined themselves to the Assembly and said that there will be no further public expenditure because the Assembly will not be able to do anything and there will not be rolling devolution. So it is possible that we have come upon a trace of the acute minds that look after the finances both in the Finance Department in Northern Ireland and in the Treasury.
  Mr. John Gorst: I hesitate to accuse the right hon. Gentleman of naivety, but surely when assemblies do nothing that never stops them from spending money?
  Mr. Powell: That is a point the hon. Gentleman must have out with the Government, because I am looking for
  558
  all possible reasons I can think of to account for the scrappy inadequacy of the explanatory and financial memorandum and, until we have the contrary explained to us, of the money resolution which in some senses, though not in all, is a more serious matter.
  However, I venture upon the purely hypothetical point, and I do not believe it, as I think very few other hon. Members believe it who have directed their minds to the Bill, that there should actually be some devolution. Is it actually contended that when you take successively out of the Northern Ireland Office elements of a Northern Ireland Government and put them under the control of the head of a department and at a later stage—this again is where the ability of the hon. Member, if he should be in charge of the proceedings, to hear with both ears will be invaluable—we shall have to try to explain how the head of a department can both be responsible to his colleagues in the Government of Northern Ireland—to go no further than that—and also be responsible to the Assembly of which he is a Member?
  It seems to me to be inconceivable that the rolling devolution could even go through its earlier stages without additional administrative expenditure being incurred. Remember, the finance and personnel section—that is to say, the sort of mini-Treasury of Northern Ireland—will not be part of the rolling devolution exercise unless amendments, which may be put down on the paper, to leave out subsection (4) of clause 2 are carried, and I trust that we shall carry some amendments in the course of the Committee stage because otherwise we cannot have a Report stage. Unless that is left out the Finance Department—whatever else is devolved—will remain firmly in its matrix in the Northern Ireland Office.
  It stands to reason that the difficulty and therefore the bureaucratic labour of the Finance Department in keeping the accurate check and tracks it keeps on the doings of the other Departments will be much greater during the period of rolling devolution than it is at present when all those Department are—not literally but at any rate metaphorically—administratively under the same roof.
  I do not believe that I have exhausted the subject. Indeed, it may be argued that in criticising the explanatory and financial memorandum for being cursory and scrappy my own few suggestions that I have thrown out as to obvious forms of expenditure which will be incurred are in themselves inadequate for the occasion, but we debate the resolution under some limitation of time, the absence of which before it was embodied in the Standing Orders of the House was painfully felt by hon. Members finding themselves in the Minister's present position. After indicating, and I hope proving, that the expenditure incurred cannot be limited to the costs of the election I leave the opportunity for the Government to explain why it is not covered in the explanatory and financial memorandum and included in the money resolution that is before the House.
  10.44 pm
  The Under-Secretary of State for Northern Ireland (Mr. John Patten): I am pleased to have the opportunity straightforwardly to explain to the right hon. Member for Down, South (Mr. Powell) why we need the money resolution.
  The right hon. Gentleman said that the Government had attempted to treat the House scurvily. I hope that, after I have replied to him, he will feel that that was perhaps a

  559
  little strong. I hope, too, that he will forgive me for appearing for a brief moment not to lend both my ears to what he was saying. I shall try in future to do so. Ten years in the Byzantine complexities of an Oxford common room taught me to listen in several directions at once.
  The purpose of the money resolution is to seek the approval of the House for expenditure out of the United Kingdom Consolidated Fund on the next and subsequent Assembly elections and by-elections. Under paragraph 11 of schedule 2 to the Northern Ireland Constitution Act 1973 such elections are excepted matters. As such they will remain the responsibility of this sovereign body in the event of partial or full devolution. That is why we have to make provision for the elections out of the United Kingdom Consolidated Fund.
  The cost of the next election has been estimated at £750,000, not including any extra security, which would be provided by security forces already available. Police and other security overtime costs would be met from the Northern Ireland Consolidated Fund. It is that fund, rather than the United Kingdom Consolidated Fund, from which the costs of running the new Assembly, should it come into being, would be paid.
  The explanatory and financial memorandum correctly and clearly relates to the precise provision and effects of the Bill. It does not refer to the annual running costs of the Assembly. As I said, those will be met from the Northern Ireland Consolidated Fund. We estimate—we cannot yet estimate with precision—that the annual cost of running the Assembly will be about £2 million. That sum will be met from the Northern Ireland Consolidated Fund.
  Mr. J. Enoch Powell: Is the Minister saying that an increase in the expenditure out of the Northern Ireland Consolidated Fund does not result in an increase in the expenditure out of the United Kingdom Consolidated Fund? I appreciate that the sum is directly from the Northern Ireland Consolidated Fund, but surely the consequence of an increase in the total budget of Northern Ireland must be to increase the issues out of the United Kingdom Consolidated Fund.
  Mr. Patten: Extra sums do not have to be covered by a money resolution appended to the Bill. The explanatory and financial memorandum makes it clear that it correctly relates to the precise provision and effects of the Bill. It does not refer to the annual running costs of the Assembly.
  Mr. Powell: In that case, in being presented with a financial memorandum, which, from the view of the House, is like any other, the House is being misled. I use that word with no overtones. The normal effect of a financial memorandum is to tell the House roughly what the Bill will cost so far as can be anticipated. Instead, the House has been told only what it will cost in direct, not indirect, payments, from the United Kingdom Consolidated Fund, let alone from public resources
  560
  generally. On the basis of what the Minister said, surely it must follow that the provision for increases in issues from the Consolidated Fund is inadequate.
  Mr. Patten: I am grateful for that lengthy intervention. I have described the legal position precisely as it stands according to the provisions of the Northern Ireland Bill. Section 13(1) of the Northern Ireland Constitution Act 1973 states:
  "The Consolidated Fund of Northern Ireland shall continue to exist but there shall cease to be an Exchequer of Northern Ireland separate from the Consolidated Fund."
  That is precisely the case. The House votes moneys to Northern Ireland. That is still called the Northern Ireland Consolidated Fund. It is from the Northern Ireland Consolidated Fund that the Government will correctly pay the money for the running of the Assembly—the payment of its staff, Chairmen, Deputy Chairmen and Members. The Bill requires only that moneys be voted to pay for the election and that suitable provision should be made for subsequent elections and by-elections.
  Paragraph 10 of schedule 2 to the Bill provides that section 4(2) of the Northern Ireland Assembly Act 1973 shall apply to subsequent elections and by-elections to the Assembly. The explanatory and financial memorandum states:
  "The expenses for the next Assembly election are estimated at about £750,000."
  That is what the money resolution is about. That is why it is correctly laid in the form attached to the Bill.
  Mr. Gorst: I hope that I am not being unduly foolish in not understanding my hon. Friend, but in reply to the right hon. Member for Down, South (Mr. Powell) he appeared to say that the Northern Ireland Consolidated Fund would be impoverished by about £2 million, which would otherwise presumably be spent in other ways in Northern Ireland. Am I correct in that assumption?
  Mr. Patten: That could be the case, or the House could vote extra moneys to the Northern Ireland Consolidated Fund. Whether "impoverished" is correct in connection with the Assembly is a matter for judgment. The fact that the basis of Supply is as I have described it means that the Northern Ireland Consolidated Fund will meet the estimated cost of £2 million for running the Assembly.
  Question put and agreed to.
  Resolved,
  That, for the purposes of any Act of the present Session to make new provision for the resumption of legislative and executive functions by the Northern Ireland Assembly and by persons responsible to it and to amend the Northern Ireland Constitution Act 1973 and the Northern Ireland Assembly Act 1973, it is expedient to authorise any payments out of or into the Consolidated Fund which are attributable to extending section 4(2) of the last-mentioned Act to subsequent elections of members of the Assembly.

  Northern Ireland [Money]

    LAND COMPENSATION (NORTHERN IRELAND)
    Resolved,
    That the draft Land Compensation (Northern Ireland) Order 1982, which was laid before this House on 26 January, be approved.—[Mr. John Patten.]

  Probation Board (Northern Ireland)
  The Under-Secretary of State for Northern Ireland (Mr. John Patten): I beg to move,
  That the draft Probation Board (Northern Ireland) Order 1982, which was laid before this House on 22nd April, be approved.
  I have been described by the right hon. Member for Down, South (Mr. Powell) as a maid of all work for the Northern Ireland Office. I hope that he will bear with me as I make my last speech of the evening, except, perhaps, for any reply that I must make.
  The order seeks to implement one of the recommendations of the review group on legislation and services for children and young persons, popularly known in Northern Ireland as the Black committee after its chairman the effective and much lamented late Sir Harold Black.
  The Black committee, in addition to the task that it was given in respect of juvenile offenders and children in need of care, was also asked to consider the future administration of the Northern Ireland probation service. I must stress that in my view what we are discussing tonight are not the broad issues of the Black committee report and its recommendations about which my right hon. Friend the Secretary of State recently made a substantial and, I hope, substantive statement to the House. Further debates on that must await another day. We are concerned purely with the contents of the draft order, which represents a significant development in the history of the Northern Ireland probation service.
  Some hon. Members will he aware that the Northern Ireland probation service, unlike its sister services in England and Wales, has for a good many years been administered direct by a Government Department. The reasons are largely historical and stem from a somewhat erratic development of probation services in Northern Ireland during the 1920s and 1930s. The legislation in force at that time—the Probation of Offenders Act 1907—applied throughout the United Kingdom and placed the responsibility for appointing probation officers on local justices. In certain parts of Northern Ireland, particularly and peculiarly in some rural areas, and for reasons best known to themselves, some justices chose not to appoint probation officers. It is difficult to explain that state of affairs. I expect that they had other preoccupations at the time.
  In 1935 the Summary Jurisdiction and Criminal Justice Act (Northern Ireland) transferred responsibility for appointing probation officers to the then Ministry for Home Affairs under the old Stormont. This arrangement was confirmed in the Probation Act (Northern Ireland) 1950 and has remained unchanged in its main provisions until this day, except that the Secretary of State for Northern Ireland is now responsible under the terms of the Northern Ireland Constitution Act.
  The 1950 Act authorises the Secretary of State to do many things concerned with the probation service. It authorises him to appoint and to pay probation officers, to assign them to courts, and to make available the necessary administrative facilities. The Act also provides that the full cost of the service should be borne on the Consolidated Fund—that self-same Northern Ireland Consolidated Fund that was the subject of some debate on the money resolution.
  That contrasts with the position in England and Wales, where administration is by probation and after-care
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  committees funded jointly by local authorities and by my right hon. Friend the Home Secretary. However, unity does not lead to uniformity. Scotland has its own arrangements, whereby the probation service has been integrated into local authority social work departments and has ceased to exist as a separate service.
  In considering the range of options open to it, the committee under Sir Harold Black invited comments from many people. When it received them it considered the lessons that might be learnt from other parts of the kingdom and looked at the options. On the basis of the information available to it, the committee decided that there were three options.
  The first was to leave things exactly as they were and to leave the probation service as a separate body responsible to the Northern Ireland Office. The second option was to depart entirely from that and to make the probation service a separate body responsible 10 a probation committee with a membership drawn from the community. As I am sure my hon. Friends will agree, that was a highly novel and interesting suggestion in the context of Northern Ireland
  The third suggestion was that Northern Ireland should follow the Scots model and that the probation service should be absorbed into the social service departments of area health and social service boards.
  I know that many hon. Members, including the hon. Members for Antrim, North (Rev. Ian Paisley) and Antrim, South (Mr. Molyneaux), are interested in these issues. As they will be aware, the report concluded that the probation service should remain a separate service and not be integrated into the health and social services of the Province. At the same time, the committee did not feel it right that the probation service should continue to be administered under the Northern Ireland Office, but not because the Northern Ireland Office had in any way failed to carry out its role responsibly.
  The committee recommended the change because it felt that the effectiveness of the probation service would be enhanced by community participation in the management of the probation service, and that that community participation could not be brought forward under the present provisions. The probation service was to be transferred lock, stock and barrel from the Northern Ireland Office to the new body.
  In endorsing that conclusion the Government have bean much encouraged by the experience since April 1979—starting under the Labour Government and subsequently under this Government—of community involvement in the management of the community service scheme. That has been a great success.
  Before turning to the provisions of the order I should mention that, following its publication last November as a proposal for legislation according to the normal formula in the Province, a number of interested bodies, including the probation service itself, submitted comments and recommendations. I am pleased to report, and I hope that the hon. Member for Hammersmith, North (Mr. Soley) shares this pleasure, that without exception, the main proposal that there should be an independent board to run the probation service was welcomed. There were several suggestions about ways in which the order might be improved. Again, the Government responded.
  I come now to the articles. If I say that there are 17 of them, that is not a threat, merely a description. Of those 17, three or four are the key articles to which we should

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  pay attention. Article 3 gives effect to schedule 1 to the order, which details the constitution of the board. It provides that the board will be a body corporate in its management and in the running of the probation service in Northern Ireland. It provides that the board should have members appointed by the Secretary of State, who will also appoint the chairman, to serve for three years. There will be consultations about the membership of the board, similar to the consultation that takes place when other non-departmental bodies are set up. We hope that the board will be broadly representative of community interests. I hope that it will be staffed by people who will support the aims and work of the probation service.
  We hope that the interests from which nominations will be sought will include district councils, the lay magistracy, the legal profession, the trades unions, commerce and industry, the universities and voluntary organisations. We see a significant role for voluntary organisations, particularly in providing some of the after-care services which any good community-encompassed probation service should have.
  Article 4 lists the main functions of the board and distinguishes between those which it must carry out and those which it may carry out. For example, it will provide the care of prisoners during sentence and after release, community service by offenders, which has been quite a success in many parts of the Province since its introduction, hostels and other facilities of that sort that are designed to help the reintegration of offenders into the community.
  Article 5 requires the board to assign probation officers to the Northern Ireland courts. This is an important provision.
  Article 6 recognises that my right hon. Friend has overall responsibility for the treatment of offenders in Northern Ireland. The provisions of article 6 will make it possible for him, should the occasion demand, to offer advice to the board on the exercise of its functions. That is an important provision, but I do not expect that it will be used often. Our experience of other very successful non-departmental bodies, such as the education and library boards and the health and social services boards, leads us to expect that that will be the case.
  Articles 7 to 16 first make financial provision and then provide for a number of other important issues affecting the new probation board; for example, the possibility of the board integrating voluntary organisations into its work, conducting research of its own—as the probation service does on this side of the water—and inspecting hostels and after-care facilities.
  Article 15 makes the very important provision that the Secretary of State can make rules for the proper regulation and management of hostels and after-care facilities.
  The order has been widely welcomed and it is intended that the staff of the probation service should move, perhaps quite soon—in months rather than years—from one particular form of employment, under the Northern Ireland Office, to another form of employment under the new probation board once that has been set up.
  The Opposition spokesman will have very much at heart those who were, at one remove, once his colleagues. We know that he was a professional probation officer in a previous career. Incidentally, I was very pleased to see that the term of probation to which the Leader of the
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  Opposition subjected him on the Back Benches, for five or six weeks, has come to an end so quickly and that we find him back in his accustomed place on the Opposition Front Bench.
  The board is required to make an offer of continuing employment to all such staff as want that employment, on terms which, taken as a whole—staff cannot, obviously, be given identical jobs in identical offices—will not be less favourable than the terms on which they are employed on the date on which the offer is made. That will ensure that no probation officer or probation assistant is disadvantaged overall by transfer.
  I draw to the attention of the House—and particularly to that of the Opposition spokesman—the substantial increase in the numerical strength of the probation service in Northern Ireland in recent years. In January 1978 there were 107 probation officers in the Province. In January 1982 there were 170—an increase of 59 per cent. over the period. The transfer of existing staff should allow the board to discharge its main responsibility under the order, which is to give adequate and efficient probation service to those in need of it, with an adequate number of probation officers in the Province. I do not think that there has been wide recognition in Northern Ireland of how dramatic that increase has been, and I give full credit to the previous Administration for their part in bringing about the plans on which the increase was based.
  My last point touches on a recommendation made by the Black committee as part of its wider recommendations on the care of children and young persons as a whole. The committee suggested that the probation board, as an additional responsibility outside its remit as a probation service, should have responsibility for the management of the custodial establishment catering for the more serious and persistent juvenile offenders. That recommendation is not addressed in the order, but it may be the subject of further legislation that may flow from the consideration of the Black committee recommendations.
  My right hon. Friend the Secretary of State told the House recently that he was convinced of the rightness of the Black committee recommendations and was anxious that they should be carried forward with all speed. We are determined to carry them forward and the order is the first significant step in that direction.
  11.10 pm
  Mr. Clive Soley: The Opposition welcome the setting up of an independent board for the Northern Ireland probation service. I am grateful for the Under-Secretary's comments about me. I am never sure of the relative advantages of discipline in the Conservative and Labour Parties. It seems to me that the Opposition are more generous, because we have conditional discharges, absolute discharges and occasionally suspended sentences, whereas the Conservatives tend towards incarceration or exile. Fortunately, they have dropped the death penalty; and we welcome that as a step in the right direction.
  It would not be in order for an hon. Member to deal in depth with the Black report. It is an interesting report which is well worth reading, but it would not be appropriate to discuss the recommendations on training schools or the custodial unit, which would require another order or a Bill.
  Before I became an hon. Member I visited the Northern Ireland probation service and was impressed by the work

  565
  done there. It is an extremely difficult environment in which to work, because views of Republicanism and Unionism and what side one takes infiltrate right through the State and its organisation. In addition, people in Northern Ireland do not always separate out crime as we do and it is sometimes given a political interpretation, regardless of whether we agree with that.
  A basic assumption in the setting up on the board is that there will be a coming down on the side of what has become known as the justice model, as opposed to the welfare model. I have come to share that view over the years. It is not an easy decision, and there is no final right or wrong. There are advantages and disadvantages in both models. The justice side recognises the importance of both punishment and the rights of the child, whereas the welfare side tries to deal with the needs of the child in a social, psychological or behavioural approach. The sides are difficult to separate. Anyone who has been in a juvenile court knows that the link between an offence and the environment and home of the offender is very close. That is also true of adult courts.
  I recognise the importance of punishment because it is a mistake to assume that it does not have a role in the rearing of children. It always has done, and that has been recognised by social workers and probation officers for many years. However, it is important to set the punishment in the context of the offence and when a child comes before a court from a home which is not as good as it should be and from an environment lacking many of the advantages that should be available it is wrong to impose on him a punishment that is greater than we would impose on our own children or would see others impose on them.
  I welcome the presence in the debate of the Minister of State, Home Office, who has an interest in these matters. I have batted his ears on a number of occasions with complaints about there being far too many people in our prisons, largely because we were putting so many into custodial settings as youngsters.
  All that one can say with safety about custodial experience, particularly for children, is that one learns to live in the institution which makes a return at a later date easier. Anyone admitted to hospital in an emergency will have some idea of the shock and horror that is felt when one is first admitted. The longer one stays, the greater the degree to which shock works off. If one stays a long time, the main anxiety is that of wondering what will happen when one leaves. Similarly, the shock occasioned to someone entering a penal institution for the first time is horrific. The shock lasts for several days and possibly for several weeks. Then follows the anxiety before one goes out again. Afterwards, however, it is easier to go back on a second, third or subsequent occasion.
  The political troubles aside, the social fabric in Northern Ireland is perhaps closer and more supportive than is the case on this side of the water. Nevertheless, unemployment and poor environment, combined with lack of love or lack of consistency in the parenting of a child, will inevitably lead towards trouble. This can be manifested in the form of delinquent behaviour or other behavioural problems that beset the child then or later in life as an adult. These matters should not be ignored.
  We are, however, concerned with the setting up of a board to run the probation service. Perhaps the most important question is the appointment of the chairman. I emphasised, as did my right hon. Friend the Member for Mansfield (Mr. Concannon) in the previous debate, the
  566
  importance of finding a presiding officer for the Assembly who was acceptable to the whole community. That requirement is reflected in many institutions of the State in Northern Ireland, not least in the probation service.
  One of the purposes of creating the board is to bring it nearer to the public. That is important. The probation service is able to enter homes across the divide. It is, therefore, even more important that the chairman and members of the board are seen to be able to cross the divide. The Opposition will be watching with concern to see that the right person is appointed. It will not he easy. It is, however, important if the probation service is to continue its impressive record in crossing the sectarian divide.
  When the debate took place in this country, considerable concern was expressed about what would happen to the social services. The setting up of family courts in Scotland was a courageous step. In England and Wales, juveniles were taken largely out of the hands of the probation service. Every now and then, there is talk of putting them back. One of my anxieties is as to the danger of undermining the role of the social worker and the social services. This lends credence to the myth that social workers are less able than the probation service to deal with delinquents. That is not necessarily true. A great deal depends on training and experience. I would not like to see the role of the social services undermined.
  It is not clear to me whether the order provides for payment only to the chairman or to all the members of the board. Schedule 1 contains the words:
  "The Board shall pay or make provision of such remuneration".
  I read from that that all members of the board will be paid in some way, but I am not clear whether the words "of such remuneration" alter that in some way. I should welcome clarification as to whether all members of the board will be paid. I do not know whether the Minister has any information on how that scale of payment will be worked out and what it will be related to, but it would be helpful to know that as well. I am not asking for a detailed reply.
  Article 12 of the order refers to loans to probation officers to buy cars. They do not have that facility in Northern Ireland, although they have had that facility for many years in other parts of the United Kingdom. It has been beneficial, because a newly appointed probation officer does not necessarily have the money to buy a Car, but a car is often essential, particularly for those living and working in a rural area. Will the Minister say what can be expected there?
  One of the things that ought to be relevant is whether the interest rate on the loan will be linked to the market rate of interest, or whether it will be a set rate of interest. There have been different practices in England and Wales on that. Again, I recognise that the Minister might not have an immediate reply, but I draw his attention to it. I am sure that the Minister would not want to draw this article in such a way as to impose on the negotiations between the trade union concerned and the employing side. Nevertheless, the provision is welcome.
  There are two or three other related points which, again, I recognise that the Minister might not be able to respond to straight away. Will the board be able to consider, if not setting up itself, at least giving considerable encouragement f o the establishment of victim schemes? These have been useful in the United Kingdom. It is one of the ways of getting the public to understand and

  567
  accept the problems that are posed by offenders in society, and a way of getting the general public to be more sympathetic to a humane and enlightened penal policy.
  I should also like to know, perhaps at a later stage, whether the board will be able to set up a limited company, as was done by the London probation service, when it formulated the organisation known as Bulldog. This was an attempt to give employment to those who had not had any for many years, in a relatively controlled and sheltered environment, yet doing real jobs in a community that needed the work done.
  I should not like the problem of alcohol abuse to be underestimated. Again, the Minister will know of my direct involvement in this, as chairman of the Alcohol Education Centre. It is no news to anybody who works in this field—all the statistics confirm a growing problem—that alcohol abuse is usually linked with crime. I should also like to press the Minister to remind the Government that unemployment is also linked to crime.
  The link in these things is never direct. I suspect that alcohol lowers the social control a little more and makes an offence that little bit more likely. Similarly, unemployment allows crime to take place by making time available, giving a greater motive for the need for money, and a host of other factors, not least the feeling that one is no longer able to contribute, or be of use, to society.
  I welcome the order, which is useful. In the long term it may have more uses than we recognise in our late and not all that well-attended debate, but I should like to give it that welcome and to have a response from the Minister in due course on some of the points that I have raised.
  11.23 pm
  Rev. Martin Smyth: I speak on behalf of the Official Unionist Party, which generally welcomes the order, particularly as it is a step forward in the implementation of the Black report.
  Many people in Northern Ireland are concerned over the tardiness with which the Black report has been implemented. Others are concerned that, as the hon. Member for Hammersmith, North (Mr. Soley) pointed out, there will be a conflict between the judicial model and the welfare model. I come close to the point of view of the hon. Member for Hammersmith, North, and I particularly underscore the point that it is not true justice or true welfare. Rather than thinking in terms of a conflict of interests, we should have better movement there.
  Having said that, I must disagree about some people in Northern Ireland not being able to act as chairmen of bodies. In Ulster we have an old saying—I am sure that it is common in other parts of the Kingdom—"As you live your life, you judge your neighbour." I suspect that, in view of the problems that are apparent in some areas of the United Kingdom, one may believe that there are no people in Ulster who are accepted by anyone but themselves. I wish to put on record the tremendous service that successive chairmen in this area have given in Northern Ireland. I could mention several who are held in the highest esteem although, at other levels, we may disagree with some of their views. I wish to pay tribute to the staff and to the work done for many years in Rathgael, where many a lad has found great help in moments of difficulty in his life.
  568
  There are one or two points on which I should like further clarification. Will the Minister assure the House that the position of probation officers under article 4(1)(c), in cases where they do not believe that they are social workers, has been properly understood? Equally, I voice concern about the pressure that has been put upon social workers in Northern Ireland to carry out court work over and above the other work that they have been doing. Sometimes there is insufficient staffing and some of them have insufficient training to do that work. If the Government want to involve them in such work—I question at times whether they should be doing it—there should be adequate resources to make it possible for them to carry out that work.
  Turning to article 12, I reinforce the point made by the hon. Member for Hammersmith, North, especially bearing in mind that social workers in Northern Ireland have that facility. Probation workers are entitled to have equal status with those involved in similar work.
  I gather that there is concern in some quarters about the composition of the board. It is for the Government to make it representative of the whole country. That is the purpose of the board, if we take into account the various interests.
  There is also concern about the understanding and use of the word "rehabilitation" in schedule 4. Some members of the probation service consider that it may be too restrictive. It would be helpful if the Minister would further consider its purpose and whether it would be to the good of the service if it were exchanged for some other word.
  Finally, on the employment of staff, the Minister repeated the term "taken as a whole". I understand what he meant by it. I hope that those who have to implement it also understand what the Minister meant and will take it in the same way, because it could be misused to deny some members' rights in the transfer of resources.
  11.28 pm
  Mr. James Molyneaux: I rise briefly to support and supplement what has been ably said by my hon. Friend the Member for Belfast, South (Rev. Martin Smyth).
  In the debate in the Northern Ireland Committee on the more general matter of the Select Committee report there was fairly general agreement on the desirability of avoiding piecemeal implementation of that report. The Government seem to have largely ignored that view, which they did not seem to resist when it was put in the course of the earlier debate.
  The first penny packet—if one can call it that—implementation of the Black report came in the form of the regrouping and reorganisation of the homes and institutions. This evening in this order we have a further step. As most of the ground was covered in an earlier debate and in various discussions with the previous Secretary of State, the right hon. Member for Spelthorne (Mr. Atkins), we did not feel it necessary or justified to ask for a further interim debate.
  My hon. Friend the Member for Belfast, South, sought certain assurances and clarifications. As he said, it may be that such assurances have been given to those most closely affected. He was right to seek to have those assurances placed on the record tonight.
  I stress the importance of adhering to the overall strategy of the Black committee report. All the people of Northern Ireland—not two communities; I believe that

  569
  there is only one—have a vested interest in obtaining results from the proposed structure as a whole. All of them have a right to expect us to insist on a plan and timetable for the introduction of the Black committee's recommendations as a whole.
  While I welcome the Minister's assurance in his opening speech that the Government recognise the desirability of treating the report as a whole, I must say that the limited step that we are taking tonight will not yield the desired result if it is left in isolation.
  11.31 pm
  Rev. Ian Paisley: I give a general welcome to the order that is before the House tonight. I should like also to pay a tribute to those who have been active in this area through the years. They have persevered, despite difficulties and problems, and those who know something about the care of young people who unfortunately in our society have gone astray have the highest possible tribute to pay to those who have engaged themselves in this regard, some as properly appointed probation officers and others in voluntary organisations. They have done a very good job of work and should not go unnoticed in the debate this evening.
  The appointment of the board is a vital and important matter. If the Under-Secretary of State had not drawn a parallel with the educational library boards when he introduced this, I would have been more happy. Northern Ireland is not particularly enamoured of the appointed boards that we have at present.
  I seek an assurance from the Minister that those boards are not for defeated candidates of certain parties that the Government feel should get into office even though the ballot rejects them. It is a sad and sometimes bitter experience to see appointed to education boards those who could not get elected to office. The sop of appointing them to boards was made by the Government. Those in large political parties have no nominations whatever.
  I am sure that, if the Government follow the same policy, no one with any sympathy whatever for the Democratic Unionist Party has a chance to be appointed to this board. If the Government are being fair, and if they say that they make appointees to spread the view of a particular board, they should have regard to the voting strengths of individual parties. They should also ensure that at least some voice from that particular party should be heard on that board. What I have said is true of the Democratic Unionist Party as it is of the Official Unionist Party and, in some instances, of the SDLP, which I have heard making the same complaint. I say without tongue in cheek that this must not be an Alliance board. Let the board extend across the divide. Let it embrace the Roman Catholic population and the Protestant population, including those who are called extreme Protestants, moderate Protestants and ecumenical Protestants, and the divisions that may exist in the Roman Catholic Church. Let them all have a place as of right on the board.
  I must take issue with the hon. Member for Hammersmith, North (Mr. Soley), who speaks from the Opposition Front Bench. He seems to think that there is no respect for the chairmen of committees in Northern Ireland. I may be exaggerating slightly—
  Mr. Soley: The hon. Gentleman is exaggerating.
  Rev. Ian Paisley: I shall put my argument another way. The hon. Gentleman seems to feel that our attitude
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  towards our chairmen is not our greatest strength. I ask him to remember all the strife and difficulty that have been experienced. Against that background, the chairmen have done a good job of work. There are people in Northern Ireland who are capable of doing the job.
  Mr. Soley: Has the hon. Gentleman forgotten what I said in the House only a fortnight ago? I said that it is my belief that the people of Northern Ireland are well capable of governing themselves I noticed that the hon. Gentleman was nodding enthusiastically at the time. At the same time probation officers recognise that there is a problem in relating to the various groups within the Province. The hon. Gentleman has touched on that problem quite effectively. I have no doubt about the ability of a number of people in Northern Ireland to perform that task.
  Rev. Ian Paisley: If a person is given a task, he must be allowed to prove himself. There was an individual who was reckoned to be a extreme Right-wing Unionist, and that was the Rt. Hon. Nat Minford. There was a debate in this Chamber about his conduct in an election in West Belfast. He took the chair at the Assembly, which was an extremely stormy body. Some of the members of the Assembly, including myself, did not give much trouble because they did not attend, but when they did attend the result was that there was a stormy passage. However, Nat Minford gained the respect of the Assembly. He did so because he had the opportunity of doing the job.
  I should like the Minister to tell us something more about the five co-opted members. If I were preaching, I would say that five was the number of grace in the scripture, but I do not know how much grace the five will have. Does the Minister feel that the appointed members of the board should have an opportunity to bring in others with professional skills?
  Mr. John Patten: The board has a maximum size and its membership does not have to be taken up to the maximum. We want as effective a body as possible. We wish the board to have the ability, if it so desires, to appoint additional experts. I understand that similar committees on this side of he water are made up largely, if not wholly, of lay magistrates who can co-opt additional people to help them in their deliberations. The Government are given some assurance that they are going down the right road if they see the community being brought in on this side of the water as they are planning to have it brought in from day one in the Province.
  Rev. Ian Paisley: I welcome the Minister's intervention on that part of the order. As he said, it is an important part. The old local authority committees and certain committees of local government offered the opportunity to co-opt certain members to aid the work of the board.
  I hope that the Minister will tell us more about the functions, organisation and jurisdiction of the bail hostels. The representations that I have received from the probation service are largely met by the order. Those of us in public life know that if there is a tremendous lobby on an issue it means that people are dissatisfied. Of course, there was a lobby when the order was drafted. However, many of the points have been met and welcome that. Nevertheless, like the hon. Member for Belfast, South (Rev. Martin Smyth), I feel that the probation officers are entitled to the matters that they put before the Minister.
  11.40 pm
  Mr. John Patten: I am pleased to reply to the debate and to note that the order has been given a general welcome. Hon. Members, particularly the hon. Members for Belfast, South (Rev. Martin Smyth) and for Antrim, North (Rev. Ian Paisley), have raised several detailed points. The hon. Member for Antrim, South (Mr. Molyneaux) made some general remarks about the Government's policy towards the Black report. He attempted to pin the Government down to give a clear undertaking that they would proceed as quickly as possible with the implementation of the Black strategy. I gave that undertaking at the beginning of the debate, but I happily give it again. The whole Black strategy could not have been implemented under the terms of one order. The order would have been extremely complex and long, and if our main aim remains the implementation of the strategy I cannot see why it is not best to legislate bit by bit as the strategy comes together.
  I greatly welcome the remarks of the hon. Members for Belfast, South and for Antrim, North about the high standard of the probation service in Northern Ireland and about the high standards of those who have helped to run that service. I assure the hon. Member for Belfast, South that probation officers fully understand their role, just as social workers do. Under the transfer of powers, there is no reason why that highly trained body should not carry on conducting affairs. To the best of my knowledge there has been little or no complaint in recent years about its conduct of affairs. Sometimes the overlap between social workers and probation officers is slightly blurred. That has not necessarily always worked against the welfare of society as a whole or that of—as social workers insist on saying—the "client". I wish that they could find a better word.
  I share some of the feelings expressed by the hon. Member for Belfast, South about the word "rehabilitation". That word caused him some concern. It causes quite a lot of concern to some probation officers and for that reason its use was avoided in the order. The reference to it is in schedule 4 in the context of the Prison Act (Northern Ireland) 1953.
  The hon. Members for Belfast, South and for Antrim, North raised the important issue of the composition of the committee and of who should be its chairman. For a while it seemed to be suggested that a chairman might not easily be found from among the people of Northern Ireland. I know that that was not really meant, but one need look only at the successful chairmen of some of the health and personal social service boards, and some of the education and library boards, to see that there is a galaxy of talent from which the Secretary of State can appoint a suitable chairman.
  I reassure the hon. Member for Antrim, North about the welfare of those young people who may be committed to the care of voluntary organisations and hostels at some stage of their rehabilitation into society. I draw the hon. Gentleman's attention to articles 14 and 15. Article 14 authorises the Secretary of State to appoint inspectors to look into the running of hostels and other establishments such as bail hostels and places where young and older offenders can be trained and rehabilitated.
  Article 15 enables the Secretary of State to make clear rules for the proper regulation and management of hostels. Those controls are necessary. They are made necessary by
  572
  the fact that such establishments provide accommodation for offenders, many of whom will be required to reside therein by the courts. I hope that the hon. Gentleman will accept that there is adequate provision in the order for the inspection and running of such establishments.
  A number of points were raised by the hon. Member for Hammersmith, North (Mr. Soley), who gave us the weight of his experience. That showed in the interesting remarks that he made about the overlap between the justice model and the welfare model of the treatment of offenders, both of which can be accommodated in the community framework. I do not know whether that accords with practice and theory in the probation service.
  The hon. Gentleman raised the issue of payment of the chairman of the board and of its members. The draft order makes it clear that payments to members will be determined by the Secretary of State with the approval of the Treasury. Once they have been determined, it will be the duty of the board to make the payments. The rates of payment have not been fixed, but it is the intention that the chairman should be paid an honorarium in the same way as chairman of the education and library boards and health and social services boards are paid honoraria. Other members, including the deputy chairman, should be paid attendance allowances and travel expenses in the same way as one could reasonably expect such committee members to be reimbursed. That is consistent with current practice in Northern Ireland in the non-departmental bodies—the statutory boards. We do not intend to deviate one little bit from that practice.
  The hon. Member also looked into the terms and conditions of service for those who are transferred from one form of authority—the Northern Ireland Office—to another form of authority and of employment—the board when it is set up, if the order is passed. He was interested in the issue of car loans and how those car loans should be calculated for probation officers. He said, rightly, that younger probation officers have considerable problems in finding the money to buy a car. There is no reason why they should come into the service with a car. In England and Wales probation officers are provided with loans from which they can purchase motor cars. The hon. Gentleman made a specific point about rates of interest. We hope that the rates of interest to be charged will be broadly in line with those applicable in England and Wales.
  The hon. Gentleman raised the issue whether such a board could introduce a victim scheme or a bulldog scheme. I have no doubt about this. The board may consider seriously the possibilities of participating in a form of victim scheme suitable for the Province. It is not required to do so, but it may decide to do so. I cannot commit the board in advance of the appointment of its chairman and members. However, there is nothing to prevent it from indulging in that form of after-care for victims, any more than there is to prevent it from setting up such schemes as the bulldog scheme, as carried out at present by the inner London probation service. I see no reason why, once it has been appointed, the board should not turn its mind to introducing a somewhat similar scheme in Northern Ireland. Once again, that is a matter for the board, but the board is not prevented by the provisions of the order from turning its attention to that matter.
  I appreciate the welcome that has been given to the order. Should it pass through the House tonight I believe that it will, to a certain extent, mark the coming of age of

  573
  the probation service in Northern Ireland. I am not referring just to its growth to more than 100 members since those rural justices in pre-1935 days, for reasons best known to themselves, decided not to appoint probation officers. It has come a very long way.
  I think that the order recognises the extremely important role that the community and the leaders of the community in Northern Ireland can and should play in the context of the probation service.
  Question put and agreed to.
  Resolved,
  That the draft Probation Board (Northern Ireland) Order 1982, which was laid before this House on 22nd April, be approved.

  Probation Board (Northern Ireland)
    STATUTORY INSTRUMENTS, &c.
    Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.)

    HOVERCRAFT
    That the draft Hovercraft (Application of Enactments) (Amendment) Order 1982, which was laid before this House on 20th April, be approved.—[Mr. Lang.]
    Question agreed to.

  Prison Officers (Transfer Expenses)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]
  11.53 pm
  Mr. Mark Hughes: Some 15 to 17 ye ars ago, long before I joined the House, as a member of the now defunct Durham rural district council I approved the building of the new prison at Frankland just outside the city of Durham knowing all the difficulties that would involve. We knew that the new prison would create problems. Some people, for example, would not wish to live near the new prison.
  I wish to raise a consequence that I never envisaged when I gave my assent to the Home Office request to build at Frankland the first new maximum security prison since the war. I raise it on behalf of Mr. Adams, who is symptomatic of a much wider and potentially more difficult problem.
  Mr. Adams, who worked for seven or eight years at Wakefield prison, was offered and accepted training as a dog handler. Having received that training and become a dog handler, he was asked, under the normal procedures of the prison service, to accept a transfer to Durham prison.
  I have not one but two prisons with high security prisoners in my constituency. I have the long-established Durham prison, with its record for high risk prisoners, and a new prison is being commissioned, which will have a proportion of high risk prisoners, although the majority will be low grade.
  In June 1981 Mr. Adams was asked to transfer from Wakefield to Durham. It was not the normal rotation in the prison service from, say, Parkhurst to Strangeways to Wakefield. The situation was unique. For the first time, the demand on housing specific to prison officers was grossly altered by the creation of a new prison that demanded almost 1,000 prison officers. In its wisdom, the Home Office sought to supply a certain proportion of the housing. I shall not quibble about whether it was 400 or 600 houses. To man Frankland, a number of prison officers would require to buy houses within the limits of the city of Durham which were not in the rotation system.
  When he was transferred from Wakefield to Durham, Mr. Adams was not in the position of a normal transferee. The Home Office had upset the housing market. Any estate agent in the city of Durham will tell the Minister that bringing Frankland into service has created a sellers' market for a certain type of house. Suddenly, a demand for houses is created. The Home Office provides about 400, but the new prison needs 1,000. Mr. Adams is the victim of that situation.
  The situation in Wakefield is clear. Of 185 Home Office owned properties for prison officers, 70 are vacant. There are Parker Morris grade houses. That was the situation that faced Mr. Adams when he left Wakefield to go to Durham not at his own request but at the request of the prison service. He was leaving an area that had surplus houses of the type that prison officers dwelt in and was moving to the one city in the country where the activities of the prison service and the Home Office had created a massive demand and high prices for that type of house. Mr. Adams left an area where nobody wanted a prison

  575
  officer's house and moved to an area where the commissioning of a new prison caused demand for such houses to be acute.
  That was not the fault of Mr. Adams. He did not ask to be moved from Wakefield to Durham. He did not ask to be trained as a dog handler and to be moved from Wakefield to Durham. He had had eight years of excellent service for the Home Office in the prison service.
  On 22 June 1981 Mr. Adams was transferred from Wakefield to Durham. At Wakefield he was given an assurance. I quote from letters sent to me by his wife, who is one of the most superb advocates of a husband's case that I have known in my 12 years in the House. She states:
  "My husband was told, word for word, 'not to worry, the department pays for all expenses if the transfer is at public expense', which it was."
  Following her letter of 5 January I took up the matter with the then Home Office Minister responsible for prisons. This is my first Adjournment debate in my 12 years as a Member of Parliament. The reply that I received was most insensitive. I wrote to the Minister on 28 January, but did not receive a reply until 1 March. It cannot be said that the letter was written in haste. The letter states:
  "The assistance available to civil servants when they have to move their home on transfer includes help with the cost of obtaining a bridging loan."
  The Minister made that clear unequivocal statement in his letter. He continued:
  "An officer is, however, expected to follow the usual procedures of arranging the sale and purchase of properties to take place at the same time."
  I have rarely read a more absurd piece of gobbledegook. Any Minister who on 1 March this year could have said that someone in the prison service could sell a house in Wakefield and buy a house in Durham on the same terms and at the same time must be so out of touch as to beggar understanding. It is not possible.
  The Minister continued:
  "Bridging loan interest is approved only when advance application is made and we can be satisfied that every effort has been made to avoid a substantial financial commitment. Mr. Adams was given general advice about transfer expenses before leaving Wakefield and detailed guidance about the procedure to follow was available to him on arrival at Durham".
  The net effect of that advice was that, had he left his wife and family in Wakefield, the public purse would have been called upon to pay to his wife something of the order of £24 per night for 30 days and £12 per night thereafter for the next six months. Therefore, the gap between what the public purse would have been asked to pay had he not asked for the bridging loan but left his wife in Wakefield makes a mockery of this whole thing. Is the Home Office really seeking to separate families by creating a pressure point in the prison service? Although this individual may not be involved in the Frankland transfer, it is symptomatic of the pressure that the Home Office has put on such people. My constituent, Mr. Adams, accepted training but did not volunteer for it. He did not seek to be transferred from Wakefield to Durham. I have been informed that, having been transferred, he finds himself grossly out of pocket for doing what he believes to be his public duty.
  I again quote from Lord Belstead's reply:
  "I am sorry that he did not make a specific inquiry about interest on a bridging loan before he committed himself to buying his present house in advance of completing the sale of his house
  576
  at Wakefield, but on the information available it does not appear that we would have approved an application. Mr. Adams applied for reimbursement of interest of £452·53 on a bridging loan in November 1981 after he had moved into his present house and, although the matter has been given fresh consideration, I am afraid that it cannot be approved."
  If that is the basis on which the Government will reimburse those transferred to the new Frankland prison, they will set up the prison on the very worst terms.
  12.10 am
  The Minister of State, Home Office (Mr. Patrick Mayhew): I am grateful to the hon. Member for Durham (Mr. Hughes) for raising this matter and for giving me the opportunity to explain the reasons why certain expenses incurred by his constituent, Mr. Adams, a prison officer, whose case the hon. Gentleman has put very fully, in connection with his transfer from Wakefield to Durham, have not been allowed for reimbursement.
  A prison officer is a civil servant, and the main conditions of employment are set out comprehensively in the Civil Service pay and conditions of service code. The code, which is available to all civil servants on request, explains in detail the assistance which is available when a civil servant is required to move his home to take up another post. Where the reimbursement of a particular item of expenditure is left to the discretion of employing Departments, additional advice is published in the form of a manual or handbook.
  The hon. Member received a letter about Mr. Adams' complaint from my noble Friend the former Under-Secretary of State, Lord Belstead, and I would like, first, to say something about the reference in that letter to an amount of £452·53 claimed by Mr. Adams as interest on the bridging loan which he took out to finance the purchase of a property in Durham. This claim was lodged by Mr. Adams on 4 November 1981 and was followed by further claims on 12 and 23 November which included the first one. Only the first one, however, was forwarded by Durham prison to the prison department headquarters for advice, and the others were retained locally. The first claim gave no indication that it formed part of a larger claim, and I am sorry if my noble Friend's reply gave rise to concern because it did not quote the figures given in the later claims. The hon. Gentleman did not mention that, but it is right that I should put it in the record.
  The same considerations do, however, apply whether the amount is small or large, as I will explain, but I can quite understand Mr. Adams' interest in ensuring that the extent to which he feels he is out of pocket is fully recognised.
  I will turn now to the events which led to the claim by Mr. Adams for reimbursement of bridging loan interest. He joined the prison service as a prison officer at Wakefield prison in 1974, and at that time he already owned his own house. In normal circumstances, he would have been required to occupy an official married quarter at the end of his probationary period of service, but as there was a temporary shortage of official accommodation at Wakefield he applied for, and was given, permission to continue to live in private accommodation with the benefit of a housing allowance. In 1979, the conditions under which prison officers could obtain permission to live out of quarters were relaxed in the interests of encouraging home ownership, and Mr. Adams has been unusually fortunate in having had the benefit of permission from the start of his career in the prison service. I have explained

  577
  this point to show that, compared with many of his more senior prison officer colleagues, Mr. Adams has managed to achieve an advantageous position in his ownership of private accommodation.
  Contrary to what the hon. Member for Durham was told, Mr. Adams applied to become a dog-handler. The hon. Gentleman said more than once that Mr. Adams did not ask to become a dog-handler, but I understand that he applied three times and was accepted only on the third occasion to become a dog-handler. That was in 1980. He was placed on a waiting list for training. He was aware when he applied that he would be expected to move to another prison. On 30 March 1981 he was notified that, subject to successful completion of a training course from 27 April 1981 to 19 June 1981, he would be transferred to Durham prison to serve as a dog-handler. Between 30 March and 17 April Mr. Adams sought advice from the administration department of Wakefield prison about the financial assistance available to civil servants when they have to move their home. Although he now claims that he made a specific inquiry about reimbursement of the cost of a bridging loan, the recollection of Mr. McIntyre, the officer who discussed transfer expenses with him, is that he sought and was given only general advice about allowances and expenses. Mr. McIntyre is an officer with 19 years' experience of advising staff about transfers, and he is quite clear that if a specific inquiry had been made about bridging loans he would have drawn Mr. Adams' attention to the conditions attached to reimbursement of interest. His practice is to have the code and the departmental instructions open on his desk, and to go through them with an officer in giving any advice. At that time Mr. Adams had not put his house on the market—he says that he did so later, on 1 May—and had not found a property at Durham, and there is no apparent reason why he, or Mr. McIntyre, should have singled out the particular matter of a bridging loan for special attention and explanation. I am unable to deal with this matter on the basis that Mr. Adams was given wrong or misleading information.
  From 21 April to 24 April Mr. and Mrs. Adams paid a visit to Durham at the Department's expense to find a new home. At the same time, Mr. Adams applied for, and was granted, permission to continue to live in private accommodation when he was transferred to Durham. It seems that the visit was successful and that Mr. Adams immediately set in train arrangements to buy a property at 19 Northside, Shadforth, Durham, and to sell his Wakefield property so that the transactions would coincide. On 1 June, when it became apparent that he would complete his dog-handler course successfully, he was given a formal notice of transfer to Durham at public expense and was told in writing to consult the administration department of the prison about expenses and allowances before entering into any financial commitment.
  Mr. Adams did not return to duty at Wakefield and took up his post at Durham on 22 June. He was seen by Mr. Summerbell of the administration department soon after his arrival, and apparently made no mention of any difficulty about synchronising the sale and purchase of properties. Mr. Adams was seen by Mr. Summerbell at weekly intervals in connection with claims for lodging allowance, and does not appear to have reported any problems or sought any advice about bridging loans. Mr. Summerbell is a higher executive officer with long
  578
  experience and would have responded immediately with advice if he had been asked. he would certainly have made the point that at least three months had to elapse from the date of transfer before an application for approval of a bridging loan could be made. The first knowledge that the administration department had of the bridging loan was when Mr. Adams submitted his initial claim on 4 November.
  The Civil Service code conditions attached to reimbursement of bridging, loan interest are, in general terms, that the extent of the finance obtained must not be excessive in the light of an officer's requirements, and it must be reasonable for him to obtain finance in his particular circumstances. He must have been unable, through no fault of his own, to arrange a satisfactory sale of his house at the old station so as to coincide with purchase at the new station, and it must be seen as unreasonable to expect him to delay further the purchase of a house at the new station on that account. It is clear that an officer contemplating taking out a bridging loan has to seek the prior approval of his Department if he wishes to be considered for reimbursement.
  My Department has issued, in a notice to staff and in a departmental manual, guidance of its own to supplement the information given in the code, as follows:
  "Assistance with bridging loan finance is provided at the Department's discretion to help an officer move his home to the new station without unreasonable delay, where through no fault of his own he has been unable to arrange the simultaneous sale of his property at the old station and purchase at the new. It is not intended that an officer should derive a personal advantage from the use of this facility, arid officers are required to take all reasonable steps to avoid unnecessary expense to public funds. Reimbursement of net interest charges on bridging loan finance is available only where it would be unreasonable to expect an officer to defer further the purchase and occupation of a home at the new station, but he is unable to do so as his capital is tied up in the house at the old station which remains unsold. Assistance will not be provided where an officer does not intend to move to the new station until the home at the former station has been sold. There should be some delay, following the date of transfer, to allow the home at the old station a reasonable chance to attract a buyer, before a bridging loan is considered. A three-month period is a reasonable minimum, although it must be recognised that more expensive properties may take longer to sell. This, and the questions whether the asking price is reasonable, and a genuine and sustained effort has been made to find a buyer, will be taken into account in assessing the acceptability of a request for assistance with loan costs. Officers must seek the Department's authority before a bridging loan is taken out as no responsibility can be accepted for charges which have been incurred without the Department's approval."
  That must be seen as reasonable.
  "Applications should be addressed to P8 Division, Expenses Section, accompanied by the Governor's comments on the points raised in Code paragraph 5527."
  The onus is upon staff to make their own inquiries and each member of staff is given a personal copy of a staff handbook.
  Mr. Adams put his property on the market on 1 May, and did not meet the conditions for approval of a bridging loan when, without having sold it, he completed the purchase of 19 Northside with borrowed money on 16 July. In all the circumstances, I cannot see that the interest should be paid from public funds. I hope that the hon. Member will not regard this as an exercise in petty economy. We have paid Mr. Adams just over £5,000 to help him with his move, which includes a tax-free grant of £1,200 and the legal expenses of purchase and sale. He has been able to buy a house of considerably higher value, and because he has chosen to do so he is receiving a special

  579
  supplementary annual allowance which lasts for nine years. Until recently, when mortgage interest fell, the allowance was £691. This is, of course, in addition to a housing allowance as a prison officer of £16·70 per week which is both index-linked and tax-compensated.
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  I am sorry that Mr. Adams feels that he has nevertheless been hard done by, but, for the reasons I have given I cannot accept that he has valid grounds for complaint.
  Question put and agreed to.
  Adjourned accordingly at twenty one minutes past Twelve o'clock.

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

Turkey: Arrest of Peace Association Members
Lord Jenkins of Putney: 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 have any information concerning the fate of members of the Turkish Peace Committee and whether the continued membership of NATO of Turkey under its military regime does not bring into question the democratic pretensions of NATO.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): My Lords, the Government share concern at the arrest of members of the Turkish Peace Association. We do not yet know the exact nature of the charges involved, but we are watching developments closely. We believe that the Turkish Government's commitment to restore democracy, and the steps that they are taking towards that end, are wholly compatible with Turkey's continued membership of NATO.
Lord Jenkins of Putney: My Lords, I am grateful to the noble Lord for that Answer, but will he say why it is that he appears to have so much confidence in the Turkish junta? Is there not here a strong contrast in the Government's attitude in that it seems
2
that Turkish aggression is acceptable to the Government, whereas Argentinian aggression, quite properly, is not?
Lord Belstead: My Lords, we continue to believe that the Turkish Government will honour their commitment to restore democracy. That is why we take the view that was contained in the Answer that I gave to the noble Lord.
Lord Paget of Northampton: My Lords, will the noble Lord make it clear not only to Turkey, but to the other members of NATO, that we are far less concerned with their democratic pretensions than we are with their willingness to stand by their allies in difficulties?
Lord Belstead: My Lords, I agree with the noble Lord that Turkey occupies a most important strategic part of the world, and is therefore an important member of NATO. At the same time we, and other member states of the Community, continue to make the Turkish Government aware of our concern over alleged human rights violations.
Lord Campbell of Alloway: My Lords, does my noble friend the Minister agree that the reference in the Question to "democratic pretensions" really constitutes a form of insult to all members of NATO?
Lord Belstead: My Lords, if one looks at the NATO Treaty, one will see that the reference in the Question is not very happily phrased.
Lord Davies of Leek: My Lords, may I ask the noble Lord—there is no ulterior motive—whether Turkey now has any representation at all in the CENTO organisation, or is that organisation on the point of being completely extinguished?
Lord Belstead: My Lords, the noble Lord is right that the reference to CENTO is no longer relevant.
Earl Alexander of Tunis: My Lords, is my noble friend aware that the Turkish Government have brought law and order to that country?
Lord Belstead: I did not hear my noble friend's question, my Lords.
Earl Alexander of Tunis: My Lords, I was wondering whether my noble friend is aware that the present Turkish Government have brought law and order to that country.
Lord Belstead: My Lords, I agree with my noble friend that it is the case that the amount of violence in Turkey has enormously reduced under the Government of General Evren.
Lord Brockway: My Lords, the Minister says that the Government have confidence in Turkey's Government restoring democracy. May I ask the Minister, are not the Government blind to all recent history, in which claims of that kind have been made and repeatedly denied? Cannot the Government begin to look at the problem of human rights from the point of view not of whether the parties are allies or are opposed, but of the important principle of human rights itself?
Lord Belstead: My Lords, if the alliance, of which Turkey and the United Kingdom are two of the members, did not exist, the question of human rights would very probably become academic, because Russia would occupy Europe. With regard to the confidence of this country in the future of Turkey, General Evren has announced a timetable for a constitutional referendum before the end of November this year, or in spring 1983, and parliamentary elections in autumn next year, or in spring 1984 at the latest.
Lord Leatherland: My Lords, when the noble Lord said that law and order were being restored in Turkey, did he mean by that that in future Turks will be able to have only one wife?
Lord Belstead: No, my Lords; I meant that the number of violent deaths in that country has very much decreased.
Lord Jenkins of Putney: My Lords, is it not the case that Turkey remains in forceful occupation of that part of Cyprus which she occupied by aggression —and what does the noble Lord say about that?
Lord Belstead: My Lords, in answer to this Question, I do not know that I am required to say anything.

Spain and Gibraltar
2.41 p.m.
Lord Merrivale: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government on what date Spain will become a full member of NATO; and
4
whether they will stress to our NATO allies that the strategic value of Gibraltar is of primary importance to this country and that the future of a British Gibraltar, as a strategic component in NATO defence, is of concern to all NATO nations.
Lord Belstead: My Lords, Spain will become a member of NATO when ratification of the protocol to the North Atlantic Treaty has been completed by all existing member countries. Her Majesty's Government hope that this process will be completed within the next few weeks. I can assure my noble friend that the strategic importance of Gibraltar to the alliance, and to Britain as a member of the alliance, will be taken fully into account in discussions within the alliance after Spain's entry to NATO and in the negotiations with Spain on Gibraltar envisaged by the Lisbon agreement.
Lord Merrivale: My Lords, I thank my noble friend very much for that Answer. In view of Gibraltar's strategic position, recognised by Her Majesty's Government, will Her Majesty's Government raise with NATO, either inside that organisation or in bilateral discussions with NATO members, the issue of full naval facilities—a naval base and a modernised dockyard—still being of considerable value to Britain and to its NATO allies?
Lord Belstead: My Lords, so far as the proposed closure of the naval dockyard is concerned, I replied to a Question which my noble friend put to me on this matter about a week ago. I do not think that I really have anything to add to what I said on that occasion, which was to the effect that the Government felt that the decision must stand, but that within that context we would be as flexible and helpful as possible so far as the interests of Gibraltar are concerned.
Lord Peart: My Lords, may I ask the Minister whether the Government still intend to close the naval dockyard in Gibraltar, and whether they will take into account the role played by the dockyard in converting the "Uganda" to enable it to join the Falklands fleet?
Lord Belstead: My Lords, I repeat that the decision to close the naval dockyard will stand, but, of course, as the noble Lord, Lord Peart, will know, the Government, with the Government of Gibraltar, are actively pursuing what opportunities there could be for the dockyard to be run commercially.
Lord Merrivale: My Lords, may I ask my noble friend whether he is aware of the fact (I am sure he is) that during the course of an adjournment debate on 1st April in the Canadian House of Commons the question of the future of Gibraltar within NATO arose? May I ask him, therefore, whether this question could be raised, either bilaterally or with the allies, by Her Majesty's Government, as the Canadian Government felt it was not a matter for them?
Lord Belstead: My Lords, I was not aware that this had been discussed in the Canadian Parliament. I agree with my noble friend that the position of Gibraltar is important within the NATO alliance, but I do not think there is anything else I can add at the moment about the position as to the naval dockyard.

Home Improvements
2.45 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 àsk Her Majesty's Government what action they are taking to help private home owners to improve their properties.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, this is a wide-ranging Question. The range of home improvement grants was extended and revised in the Housing Act 1980, and the limit of grant payable for the rehabilitation of houses in bad condition was raised to a more realistic level. The Government have also promoted initiatives in low-cost home ownership, notably the homesteading and improvement-for-sale schemes. My right honourable friend the Chancellor of the Exchequer announced further short-term measures in the Budget through local authorities amounting to £79.3 million.
Baroness Lane-Fox: My Lords, following that very positively encouraging reply, may I ask my noble friend the Minister to say how many local authorities are making improvement grants to first-time buyers who are willing to undertake homesteading?
Lord Bellwin: My Lords, I understand that so far 89 local authorities in England have sold or intend to sell unimproved houses for improvement by the purchaser. During the calendar year 1981, 1,455 dwellings were sold. I would expect all the local authorities involved to be offering purchasers improvement grants for renovating the houses they buy. Furthermore, 10 of those authorities sold the properties with the aid of a local authority mortgage with agreement from my right honourable friend to waive interest payments on the mortgage for a period as an even greater incentive to buy and improve.
Lord Hylton: My Lords, in relation to elderly owner-occupiers, can the noble Lord say whether his department is studying the very important experiments carried out recently in Rhondda and Tyneside, and elsewhere, by voluntary bodies; and would he agree that the level of bureaucratic complexity combined with personal poverty means that many elderly owner-occupiers are not getting the help they need with repairs, insulation and improvement?
Lord Bellwin: My Lords, I would hope that the noble Lord would bring to my notice any cases of the kind that he describes, so that one can look at them carefully and see whether the procedures are too tortuous, or whatever, with a view to improving them. As to the two schemes that he mentioned, I had heard of them. It will be interesting to know more of what they bring forth as time goes on.
Lord Mowbray and Stourton: My Lords, bearing in mind the enormous cost of new housing and also of
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improving old housing stock, is there not possibly a case for increasing the basic sum of money on which the grant for improvement can be given?
Lord Bellwin: My Lords, it depends in each case on what the figures show. In fact, the grants now go up to 90 per cent., which is very significant indeed; and the Government are absolutely determined to do all they can to improve this aspect of housing, within which we feel there is such great opportunity.
Lord Northfield: My Lords, can the noble Lord say what is the present position on insulation grants? Are they being taken up; and could not a lot more propaganda be carried out to encourage people to insulate their houses? This is one improvement which is very much in the national interest and is badly needed for the millions of houses constructed between the two wars.
Lord Bellwin: My Lords, the noble Lord is absolutely right, and we are very keen indeed. That is why we have allocated much larger funds than ever before for insulation grants. It may well be, as the noble Lord says, that even greater publicity ought to be brought to bear on this. He will know that already there is much more than ever before, but, nevertheless, the underlying point of his question is very valid. We must look all the time to see that we are bringing this grant to the notice of people.
Baroness Lane-Fox: My Lords, may I ask my noble friend the Minister to return to his answer to my supplementary question and tell us how many local authorities are improving properties for sale to first-time buyers?
Lord Bellwin: My Lords, the improvement-for-sale scheme under the Act came into effect in November 1980. I understand that since then approximately 79 local authorities have undertaken or are intending to undertake improvement-for-sale. Authorities do not have to offer dwellings to first-time buyers, but the sale price of such dwellings is relatively low, they are an attractive proposition for such purchasers and some local authorities give first-time buyers priority when offering such dwellings for sale.

Botswana Drought: Aid
2.51 p.m.
Lord Alport: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what assistance is being provided for Botswana in order to offset the effects of the very serious and prolonged drought in that country.
Lord Belstead: My Lords, the Botswana Government has been informed that up to £200,000 of additional financial assistance will be made available in the current financial year for drought relief measures

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to be agreed with them. In the meantime, three 5-ton 4-wheel-drive lorries have been presented to the Botswana Government for the transportation of food supplies to drought stricken areas.
Lord Alport: My Lords, while thanking my noble friend for his Answer, may I ask whether the Government will bear in mind that this small country deserves our assistance on the basis of its admirable record of constitutional stability since its independence, and that the continuance of this constitutional and social stability is of importance to the stability of the whole of southern Africa?
Lord Belstead: My Lords, I agree with what my noble friend has said. If I may add to what my noble friend has said from his experience of this country, I realise that Botswana is going through a difficult patch at the moment because of the fall in commodity prices, apart from this tragedy of drought which has struck the country. It is worth bearing in mind that, in addition to the Answer that I gave my noble friend about extra aid, there is the Government's bilateral aid, there is bilateral aid from other countries and, also, multilateral aid. The total of all this means that Botswana is receiving very considerable aid compared with many other African countries.
Lord Oram: My Lords, was it not in Botswana that the late Dr. Schumacher, the originator of the concept of intermediate technology and author of the phrase, "Small is beautiful", did pioneering work in the construction of small, easily constructed rainwater tanks? Would the noble Lord inquire as to whether that pioneering work has been followed up recently and, if it has not, will the Government enter into discussions with the Botswana Government as to whether that would not be a very good way of expending some of the additional grant to which the noble Lord referred?
Lord Belstead: My Lords, I will certainly look into the very interesting piece of information that the noble Lord, Lord Oram, has given to the Government. I think that it is worth adding that, as to how the additional aid to help relieve the drought is to be used, it is, I understand, to be decided by the British High Commissioner acting on the advice of the British Development Division in southern Africa based in Lilongwe, in consultation, of course, with the Botswana Government.
Lord Somers: My Lords, has the Government any information as to whether the main source of water in Botswana could be expanded?
Lord Belstead: My Lords, I am afraid that I cannot answer that specific question. There is no doubt that what has happened in this case is that the rains, when they were supposed to come at the end of last year and the beginning of this year, failed. I believe that some rain has now begun, but, of course, very late.
Lord Wells-Pestell: My Lords, may I ask the noble Lord whether he can indicate to the House how the
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amount which the Government will give, to which he has referred, is likely to be spent? May I ask whether there are any schemes for the digging of wells? When I myself was in Botswana a few years ago I was given to understand that there is a fair amount of water in places where there is a drought at some 100 ft. to 120 ft. below ground level. The problem was the cost of constructing the wells. I wonder whether noble Lord has any information on that.
Lord Belstead: My Lords, I do not want to cut off the noble Lord with my answer, but I do not think that I can add to what I have just said about the way in which the uses to which extra aid will be put would be decided. In essence, it will be by discussion and consultation between us and the Botswana Government. It is worth adding that, in addition to trying to go to the root of the problem, to which the supplementary questions of the noble Lords, Lord Oram and Lord Wells-Pestell, are directed, there is the matter of immediate relief. This is where aid not only from us but from other countries, including the USA, Norway, Sweden and the Federal Republic of Germany, will come in very useful.
Lord Brockway: My Lords, while welcoming the additional aid that has been offered and the assurance by the Minister that he will consider the constructive proposals made from this side of the House, may I ask this question: Will the Government keep in consideration the fact that Botswana is now a frontline state for democracy in Africa and that the success of democracy in Botswana will largely depend upon the economic assistance which it receives? Will the Government bear that worldwide principle in mind?
Lord Belstead: Yes, my Lords, the Government will bear that in mind.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I announce that dinners will be available this evening at the usual time. Subject to the progress of business, the Committee stage of the Local Government Finance (No. 2) Bill will be adjourned at approximately 7 p.m. for approximately one hour. During this adjournment, the Committee stage of the Social Security and Housing Benefits Bill be continued.
Planning Inquiries (Attendance of Public) Bill
Brought from the Commons; read a first time, and to be printed.

Local Government Finance (No. 2) Bill
2. 57 p.m.
Lord Bellwin: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Bellwin.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 1 [Limitation of rating powers.]:
Baroness Birk Baroness Birk moved Amendment No. 1:
Page 1, line 7, at beginning insert ("Except as provided in subsection (4) below").
The noble Baroness said: Before I move this amendment I think that there is something I must say by way of protest. The Government have tabled a number of very complicated amendments which we had sight of (those of us who managed to be here) only on Friday morning. During the Second Reading of the debate the Minister very clearly and frankly said at col. 627:
"Before I move on to Part II of the Bill, your Lordships may be aware of the commitment made by the Government during the course of the Bill's Committee stage in another place to bring forward amendments to clarify the position of rating and precepting authorities, and of ratepayers, in the light of the complicated rating issues which were raised by this House's ruling in the GLC/Bromley case."
He went on to say:
"I will be tabling the necessary amendments in good time for our discussion in Committee of Part I of the Bill".
I must put it to the Minister, although I do not think for a moment that it was his own personal fault, that it is extremely difficult, with Government amendments of this complexity and importance, to have them available only on Friday—while most of us have seen them only today.
Having said that, I now move the first amendment that stands in the name of my noble friend and the noble Lord, Lord Evans of Claughton. The purpose of this amendment is to try to deal with a situation which was raised—I remember raising it myself—on Second Reading where a local authority has to deal with emergencies of different kinds and would, as the Bill stands, be prohibited from doing so without either getting express permission and a grant from central Government, via the Secretary of State, or having the opportunity to borrow money, which is going to become more and more difficult for local authorities.
In moving this amendment, with the Committee's permission, I should like to speak to Amendment No. 12 as well. These amendments would give power to a local authority to make a supplementary rate or precept in cases where emergency expenditure is required or expected income is significantly reduced. This is extremely important for several reasons. First, in the past year alone we have witnessed a number of severe natural and also man-made disasters from flooding, snow and rioting. We are also going to see local authorities having to undertake a great deal of extra preventive and other expenditure if the Pope's proposed visit takes place to this country. The cost to local authorities is going to be very considerable in those places which the Pope will visit. In other years, we have seen on the coast that sea defences have been broken.
When exceptional expenditure has been incurred by local authorities affected by such events, they have had to go cap in hand to the appropriate Government department to seek financial assistance. Such assistance is by no means certain and depends on a number of variables which are not always relevant to the predicament in which the local authorities find themselves. Sometimes the extra assistance is not forthcoming at all. As a result of the Government's economic policies, local authorities—as we are well aware—are also experiencing significant reductions in anticipated income. Examples of losses of income in this category are as follows: reduced rateable values —for example, where steel mills and aluminium smelters are being closed and where other industrial projects have been discontinued; falls in the numbers of those able to afford school meal charges and a reduction of course, in the employees concerned; reductions in the numbers of bus passengers, causing a drop in fare income on buses; reduced income from trade waste. Leisure facilities have been affected. For example, some local authorities have found it difficult to use swimming pools. Where they had plans to build them, they have now found it impossible to do so.
Therefore, with expenditure rising, with cuts in public expenditure and with their disposable income being reduced, local authorities are being put in a far greater squeeze than ever before. The power to levy a supplementary rate in exceptional circumstances such as those I have outlined—but they are by no means definitive—would allow local authorities to react to local needs. Local authority members, I suggest, are in a much better poition to assess local needs than central Government and could react more sympathetically and more quickly, and, in the end, more economically to local circumstances.
This is not to say that local ratepayers should be called upon to meet all the cost of emergencies or loss of income in their own areas. Government grants will normally be forthcoming, one hopes, either through block grant or as special additional grants related to emergencies. However, this will not normally cover the full cost of the emergency, as we have seen happening on various occasions during the year, particularly in the aftermath of the riots in London and Liverpool. The power to levy a supplementary rate in these circumstances would be well understood and appreciated locally and would enable the local community to help itself in the way and to the extent that it thought best. I beg to move.
Lord Evans of Claughton: We entirely support the amendment which noble Baroness has so ably moved. It should be underlined that the levying of supplementary rates up to the point of this Bill has been perfectly legal and has been very rarely used. That ought to be underlined. It is not as though local authorities have been wildly creating supplementary rates year in and year out. It has been a very rare occurrence. I suggest that in the future it will remain such, particularly if the limited rights that the noble Baroness mentioned are granted.
One is very conscious of the type of problem to which she refers. We in Merseyside have been particularly the victims of disasters and have been required to spend unexpected sums of money as a

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result of rioting. There has been a loss of passenger transport users and we have been the subject of a great number of closures of factories and commercial premises. As a result, there has been a great loss of income. Merseyside, and many urban areas of that kind, are particularly exposed to the special difficulties that might arise with a problem of the nature that we are discussing.
In my opinion, the power would not be used irresponsibly, because, if it were, the ratepayers, quite properly, would react. It is very important that there should be this reserve power in the case of the extreme emergencies of the kind that the noble Baroness mentioned. No doubt it will be argued by the Government that if there are exceptional expenditures of this kind they will be met by grants from central resources. But we all know that when there are grants given after riots and that kind of occurrence, the grants are never sufficient to cover the full cost that they have occasioned. Consequently, if local authorities are to maintain their responsibility for local crises and local problems, this is a very important amendment which should be carried and which will improve the Bill.
3.8 p.m.
Lord Leatherland: I feel that the Bill is taking the wrong line. We read from day to day about wage rises. Usually they can be looked forward to but sometimes they are bigger than expected. We also have to bear in mind the possibility of rises in the rate of interest. The payment of interest on loans is a very, very big item in the budgets of local authorities. I feel that it would be a mistake to prohibit this supplementary rate. If the Bill's proposal is adopted it will mean that councils at their annual budget meetings will fix their local rates at a higher level than would otherwise be the case. If they are prohibited from introducing a supplementary rate during the year then they must budget for the very worst outlook that exists at the time of the budget.
If the accounts of the council result in a surplus, this cannot go back to the ratepayers. Any surplus on a year's revenue account of a local authority has to be transferred immediately to the capital account. So the immediate result to the ratepayers is that they are suffering. I feel therefore that it would be better to leave matters exactly as they are. I had to encounter consideration of this question in earlier times when I was finance committee chairman of one of the biggest county councils in the country. Therefore I feel I know what I am talking about on this occasion.
Lord Bellwin: I assumed that we would be speaking to a number of amendments because so many are very similar, but as the noble Baroness specifically stated she was covering Amendments Nos. 1 and 12 I will do the same and reserve my observations on others, because I think the points may come in a little later. In the main the noble Baroness spoke about her concern for emergencies that can arise. I understand the cause of the concern: for example, the bad weather last winter did much damage and authorities were put to considerable extra work, but as far as is known no local authority has ever levied a supplementary rate or a supplementary precept to finance expenditure
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dealing with an emergency caused by bad weather. Moreover, Scottish local authorities—and they are not without their share of climatic difficulties and the ensuing problems—have managed quite adequately without any power to levy supplementary rates.
Faced with the need to find money quickly for unforeseen items of expenditure within the year, local authorities normally rely on revenue balances or allowances they have made for contingencies in fixing the main rates, or they rely on temporary borrowing in anticipation of revenue due in the same financial year, or a combination of all these sources, all of which will continue to be available after the Bill comes into effect. In any case, if any local authority wished to borrow temporarily to finance unforeseen items of expenditure during the year they would be able to seek the Secretary of State's consent to do so. My right honourable friend the Secretary of State has made it clear that consent will be given in cases of genuine emergency, on condition that the money borrowed is repaid out of revenue income within the quarter of the following year.
For 1981–82, any authority forced to spend more than the product of a 1p inclusive rate on emergency work made necessary by adverse weather conditions can claim specific Government grant totalling up to 75 per cent. of the net additional expenditure. This scheme is similar to schemes operated under a Labour Administration in 1977–78 and 1978–79. Under those earlier schemes, claims were submitted by seven local authorities in 1977–78 and there were 16 in 1978–79. Special assistance was offered under a similar scheme in 1979–80 but no claims were submitted.
As regards the cost of riot damage last year, I appreciate this could not have been foreseen, but central Government is bearing 60 per cent. of the cost, some £16 million out of a total of some £26 million falling on local authorities. I do not know whether your Lordships are aware that my right honourable friend the Home Secretary is currently reviewing the Riot (Damages) Act of 1886 to see whether anything needs to be done about that.
Referring to unanticipated losses of income on which the noble Baroness touched, there are a number of reasons why a local authority might lose income it has expected to receive, but perhaps that is one of the parts of this debate in Part I that we might come across later. The noble Baroness specifically referred to authorities suffering a loss of income as a result of a sharp decline in rateable value, for example, presumably as a result of the closure of a factory or plant. Normally the grant system compensates for rateable value deficiencies but in England this does not flow through until the following year because the rateable value data used in the grant calculations, though revised annually, are frozen for the whole year. There is thus the potential for a sharp and uncompensated loss of income by an authority for part of the year until the new data come into effect.
The problem could be overcome by unfreezing the data, thus allowing mid-year revisions to an authority's rateable value and hence to its grant entitlement. Indeed, I understand this happens in Wales. The Government are quite prepared to consider this, but traditionally this is a matter on which they are guided by the views of local authority associations, and in

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England they favour keeping the data frozen because they provide greater certainty for local authorities' grant entitlements generally. This is a subject on which there is clearly a difference of opinion: it is a party political difference, I think.
The noble Baroness said that the amendment would allow local authorities to react to local needs. I would just pick up the point made by the noble Lord, Lord Evans, when he said how infrequently this power was used in the past. One can use that argument either in support of the amendment or against it. I would use it very strongly against it because, as I have said before to your Lordships, in all the years I was in local government I knew there was such a thing as a supplementary rate but we never ever contemplated it at all. It was just one of those things that one knew existed. But when you come to fix your rate at the beginning of the year it is quite true, as the noble Lord, Lord Leatherland, said, that you take into account likely movements in interest rates—they may well go up as well as down during the year—and you take into account the Government's suppositions about inflation on which they have given their grant. You come to your own conclusions and decide the rate, but it does not follow that you make it higher. You put into contingencies those elements which cover the kind of possibilities you fear may come about. That is what you do and that is how you do it. One does not say: "We had better rate higher than that because, if we do not, we may get caught out". The fact is that you may well get caught out the other way because interest rates can come down as well, and often do.
I can remember that, when first charged with budgeting on this very point, I tried to find out how accurate had been the forecasting by the officers in the past, so I took 10 years as a sample to see how accurate the various forecasts of interest rates and so on had been. I found that in nine years out of ten they had overestimated. They were prudent and thought they were being wise. But in the main that is where you put your allowances to cover what may happen, and certainly you never contemplate supplementary rates; so I do not think it needs to be a factor in any way as to how you fix the rates.
The noble Lord, Lord Evans, said that if there were this power it would not be used irresponsibly, but of course the whole reason why it is here in this Bill now is that the power has been used irresponsibly. It was never used for years, as I have said, but during the last year or two the fact is that a number of authorities have decided to use it, and to use it so as to increase their spending, against the Government's specific wishes. That is again something that brings into question the whole of the central and local government relationship. I am as sad as anyone that this should have to be so, but no Government are going to stand by and see this ignored in the way that has happened in the past.
Therefore, with only one more observation to make, I would say to the noble Baroness that the Government cannot accept these amendments. The one example I would give is that if this is going to cause the problems that she envisages, I would refer her to Scotland, where they have not had this power before and it has not led to problems of this kind there. So
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on all counts, as your Lordships will gather, the Government are strongly opposed to these amendments.
Lord Bruce of Donington: We on this side are a little disappointed with the noble Lord's response to the very reasoned arguments put forward by my noble friend and also by the noble Lord, Lord Evans of Claughton. The noble Lord addresses himself to this amendment with an air of almost injured innocence. He looks back nostalgically on the days when there was no such thing as a supplementary rate, and indeed, the noble Lord, Lord Evans, referred to this specifically.
What has been the change? The change has been the attitude of his right honourable friend the Secretary of State towards local authorities and, indeed, towards local authority spending. Under the auspices of his right honourable friends, grants to local authorities—central Government support—have been progressively cut down, at the same time as the demands on local services have been rising, partly as a result of the increase in the cost of the performance of their statutory obligations under conditions of inflation which, in spite of three years of the dubious blessings of Her Majesty's present Government, still remains at slightly above what it was when they took over. Moreover, owing to the industrial devastation which they have caused throughout the country, and in some of the big cities in particular, the rateable income from industrial properties has progressively declined. Therefore, local authorities have been faced with the job of performing their statutory and local responsibilities under conditions of ever-increasing stringency.
It is no answer to my noble friend to say that there have been a number of irresponsible local authorities. We on this side are just as much in favour as anybody else of proper economies and the elimination of waste in the provision of all local authority services. But we are bound to note that much of the reaction that has proceeded from certain local authorities, who have been grievously struck by the economic and monetary policies of the Government, has been against the harsh and uncompromising attitude of the noble Lord's right honourable friend the Secretary of State. In subsequent amendments, some references will be made from, I think, all sides of the Chamber to the growing tendency, particularly under this Government, of arbitrary restrictions being placed on the powers of local authorities, and since the argument will arise in its acute form then I shall refrain from enlarging upon it here.
But as the noble Lord, Lord Evans of Claughton, pointed out—and we might do well to remember it—if local authorities behave irresponsibly, then the electors of the authorities' areas have a right and an opportunity of changing the councils' policies by changing their political complexion, and this is what has happened in the case of various local authorities. Sometimes, local electors and some substantial ratepayers have chosen—and chosen quite deliberately—in spite of the insidious propaganda that all public expenditure is essentially evil, to elect back to office those whose deliberate policy, upon which the electorate has had a chance of voting, has been to increase public expenditure on services in the locality, at levels determined by the councils themselves, after consultation

15
with all interested parties and, indeed, contact with the electorate.
At other times, it has gone the other way. Sometimes, localities have had the dubious pleasure of changing the policy the other way and it has been decided by a majority of the electorate to restrict and, in some cases, to cut back local expenditure. But in all cases the decision has been made by the electorate under conditions which, mainly owing to the climate of social opinion that is determined largely by the media, have been favourable to the arguments put forward by the party opposite.
All one is asking for here, and asking for reasonably, under the conditions that are laid down in Amendment No. 12, is for a local authority, without having to have recourse to borrowing at interest rates at the exorbitant levels that have been very largely determined by the party opposite, to be able to make proper revenue provisions. Indeed—and we shall return to the theme in more detail later, because it is not suitable for this amendment—the present policy seems to be to deny a local authority the exercise of its ordinary democratic right, and to substitute the centralised direction from the state which is so vehemently put forward by the noble Lord's right honourable friend. Therefore, we hope that this amendment, which has been put forward in good faith and with adequate explanation by my noble friend, will commend itself to noble Lords on all sides who believe in local democracy and in the exercise of powers through local authorities.
Lord Mottistone: If I may help my noble friend, it seems to me, despite the honeyed words of the noble Lord, Lord Bruce of Donington, and other spokesmen opposite, that, bluntly, this is a wrecking amendment. It is against the principle of the Bill, it does nothing at all about democracy and I do not think it commends itself to anybody. My noble friend made a very good case and that is where the matter should rest.
Lord Bellwin: Just very briefly, may I say in reply to what the noble Lord, Lord Bruce, said about the increased cost of statutory provisions, that I am sure he knows that the levels of statutory provisions are very flexible indeed. They are really for interpretation by individual authorities, and I assure the noble Lord that many authorities interpret them in very different ways. He said, not unfairly, that the local electorate can give a view on an authority's performance and, in theory, that is right. I should be much happier, so far as rates levels and services are concerned, if the people who pay 60 per cent. of the rates—industry and commerce—had a vote of some kind which was meaningful. Unhappily, they do not and therefore, to some extent, it diminishes the case for that.
The noble Lord also asked why we do not accept that authorities should be allowed to make proper revenue provision. But there is nothing whatsoever in these proposals that in any way prevents them from making proper revenue provision. All we are suggesting is that they make provision in the right way, which is by contingencies, in the same manner as they always did in the past, until it was felt by some authorities that they wanted to overturn the previous administration's rates and come in on top and charge everybody more. We are very much concerned about the effects
16
of that on the ratepayers; and, as my noble friend Lord Mottistone said, in the context of the ban on supplementary rates that we are proposing in this Bill, we could not accept these amendments, which would drive a coach and horses through the Government's efforts to combat inflation and to protect ratepayers from unexpected demands for supplementary rates part way through the year.
Baroness Birk: I am glad that the Minister thought his noble friend Lord Mottistone was such a help to him. It seemed to me that he was not. He called this a wrecking amendment. I do not think that the noble Lord can have read it very carefully because the amendment makes it quite clear that this is in order to raise revenue to meet expenditure incurred or to be incurred in the exercise of powers under Section 138 of the Local Government Act 1972 (measures with respect to emergencies or disasters) or under the Riot (Damages) Act 1886. I shall not read any more of the amendment because I am sure that the noble Lord will have great pleasure in reminding himself of it when he reads it.
The answer which the Minister gave is completely unconvincing. His argument was: because supplementary rates are levied so seldom, why not get rid of them? Surely the right way to look at it is the other way round: if they are there to be used but will, according to the amendment, be restricted in their use in this way, then why not leave them alone? The noble Lord talked about what happened in the past, but he was talking about a completely different local government ball game. Local authorities are being squeezed very hard. As we heard from all sides of the House on Second Reading, the Minister got very little, if any, support, for the Government's case. His noble friends were asking him to change the Bill all the way through. So there is a difference in the money which local authorities are receiving. There is a difference in their disposable income, some examples of which I pointed out. The Minister's answer was that the problem could be overcome by unfreezing the data. Perhaps we can look at that, but it is not the answer when we are in the middle of dealing with a Bill of this kind which relates to supplementary rates.
The important point is that local authorities are highly disenchanted—that is a great meiosis—with the Government's attitude towards them. They see it as another way of strangling the life out of them and of again bringing everything back to central Government. There is lack of understanding—not understanding, even, but appreciation or acceptance of this point. My noble friend Lord Bruce of Donington was absolutely right when he said that the Secretary of State is anxious not to let a single inch go. It is a complete obsession. We saw it in the case of the Housing Bill and in the case of every other Bill to do with local government. This is how authorities throughout the country, whether they are Labour, Conservative or Liberal authorities, feel. They feel that local authority life is being squeezed out of them. Since the Minister was unable to give a satisfactory answer and was not prepared to consider this amendment at all, I must ask the Committee to divide upon it.
Lord Bellwin: Before the noble Baroness sits down, she said that we are in a new ball game—that local government is now being squeezed. I should like to remind her of Circular 45/1976, under which the then Labour Government imposed upon local government the instructions of the International Monetary Fund: a cut in expenditure—an immediate cut—of 3 per cent. within that one year. If that was not being squeezed and if it was not the same ball game as the noble Baroness thinks we are in now, I do not know what is.
Baroness Birk: Of course it was a squeeze then, and it was tied to the national economy, as it is now. But since then we have had cuts on that cut. Local authorities today are very much worse off. If he can do so, let the Minister tell me where services have not been cut almost to the bare bone: the education services, the social services. Let him try to prove that they were worse off in those days than they are today. It is getting worse and worse. The noble Lord knows that as well as I do.
Lord Bellwin: The noble Baroness had better try to prove that they are better off as a result of the extra rates which are being charged.
Lord Harris of Greenwich: If the noble Lord, Lord Bellwin, and the noble Baroness, Lady Birk, will forgive me for intervening in this extremely interesting series of exchanges between them, may I raise one or two slightly broader questions and explain why my noble friends and I will be voting for this amendment, though without necessarily the same degree of enthusiasm as the official Opposition? Most of us recognise that there is a real problem.
First, the noble Lord, Lord Bellwin—who always speaks with great fairness in this House—rather overstated his case, as did his noble friend behind him, when it was suggested that there were going to be very substantial economic effects one way or the other if this amendment was or was not carried. The effect of this amendment, were it to be passed or rejected, would be fairly marginal, for the simple reason that the number of occasions upon which supplementary rates have been imposed in the past has been very limited in number.
Secondly, if the noble Lord, Lord Bellwin, will forgive me for saying so, I was surprised to hear him use the argument about the instructions of the International Monetary Fund in 1976. I have had the pleasure of listening to Mr. Wedgwood Benn using that argument and I find it mildly surprising to hear it coming from the Government Front Bench. Having had some dealings with the matter in the past, may I say that the International Monetary fund, as the noble Lord, Lord Thorneycroft, will probably confirm, does not give instructions to British Governments about the way in which they should handle local authority expenditure in the way that the noble Lord, Lord Bellwin, seems to imagine.
On the broader question, may I make two points: First, the noble Lord, Lord Bellwin, has for the argument he has put this afternoon one justification with which I agree. I believe that there is a very different type of local authority now existing in some areas of this country. These authorities are composed of
18
people some of whom do not have a great deal of enthusiasm for parliamentary democracy and who are hankering for confrontation with central Government. Like the noble Lord, Lord Bellwin, in the past I, too, had the fortune of being a member of a local authority. When I was the leader of the Labour group on that authority, although we had major disagreements with the Conservative Government when they were in office the idea that we were going to spend the whole of our time trying to undermine the elected Government of this country would have been regarded with astonishment by the overwhelming majority of my colleagues on that authority
Unhappily, that situation now arises, as we all know perfectly well. There are examples which we can see in the Greater London Council, in Lambeth and in quite a few other authorities where people are being elected to those authorities who see this as a way of pursuing some form of pan-Marxist revolution. This is a real issue and it creates real problems for the Secretary of State, be he a Conservative or a Labour Secretary of State, or the Secretary of State of any other party. There is a new problem and we have to recognise it as such.
But where both the present Government and the present official Opposition are in total agreement in this debate—this matter has not yet been raised today, but it has been raised before in this House—is in maintaining a local authority voting system which encourages precisely what they profess to object to. If we look at the local authority election results in most of the London boroughs, with the very small exception of a few boroughs in the East End of London and one or two, I suspect, on the fringes of London in the opposite direction, the fact is that the overwhelming majority of the people who voted, voted against the party which is now in control of those boroughs.
If the noble Lord, Lord Bellwin, and his colleagues and other members of the Committee are disturbed by what is going on in local government, as I believe they have every right to be, I very much hope they will pay some attention to the voting system in local government which is just as objectionable—indeed, in some respects far more objectionable—as it is in central Government.
Baroness Fisher of Rednal: I think that the last speaker exaggerated what he said about local government. It is very easy to pick out two London boroughs and speak as though they are representative of local government throughout the country. As the noble Lord is fully aware, I come from the Birmingham local authority, with a great deal of experience in that city. Birmingham was one of those cities which decided to charge lower bus fares within the confines of the West Midlands public transport area. By no stretch of the imagination was that local authority Marxist or anything like that. For us to use such arguments to put over the power of changing the voting system is, with all due respect to the noble Lord, Lord Harris of Greenwich, a little unfair.
As my noble friend Lady Birk rightly said, this is a different ball game. In the inter-war years, it was very often local government which set the pace. Central Government took up local government ideas and helped them along with the finance, because it was local government ideas which were being brought

19
forward more and more. It is quite understandable that local authorities now find that they are not in that position; that they cannot be the innovators any more, because they are curtailed by all kinds of financial limitations. This makes them have to think seriously—and I accept that local government have to work within the confines of the economy—because if local government want to introduce a new service or extend an existing service, they can only do so by cutting back services already in operation. Central Government are persistently asking local government to cut back their number of employees, but this can only be done to a certain level. One must have a certain number of people to look after elderly person in social services' homes; one must have people to teach the children; and one must have people to undertake other social services. There is, therefore, a limit to the number of people to which one can cut back in local authorities.
I do not know whether I heard the noble Lord, Lord Bellwin, correctly when he spoke of the cost to industrial ratepayers. I have in front of me the City of Birmingham's budget, 1982–83, which shows that 38 per cent. of the money which the Birmingham local authority gets comes out of the rates. Of this 38 per cent., domestic ratepayers are paying 16 per cent. and industrial ratepayers 6 per cent. I would not have thought that the deputy city treasurer and the chief executive officer of the Birmingham local authority would issue figures like that in a publication which goes to the press unless they were correct. I would not have thought that they would publish anything which is incorrect. I will pass this document to the noble Lord, Lord Bellwin, afterwards, if he thinks that I cannot read, but the budget states quite clearly that domestic ratepayers pay 16 per cent., commercial ratepayers 10 per cent., industrial ratepayers 6 per cent., other ratepayers 4 per cent., and nationalised industries 2 per cent. That makes a total of 38 per cent. of the 100 per cent. rates which the city obtains from various types of ratepayers.
More often than not, when the domestic ratepayer is being levied a higher charge, I do not believe there is as much grumbling about the increased rate or supplementary rate that might be raised as there is about services not being provided. If any of your Lordships stand in bus queues when there is a gap of three-quarters of an hour between each bus, you will know that there is always much more grumbling about that—or when a 20-minute service is cut to a 35-minute service. If local government must continue to provide those services with a cutback from central Government, it behoves us to let progressive local authorities have the power to levy a supplementary rate, if they need to do so.
3.45 p.m.
Lord Bellwin: I am absolutely certain that the noble Baroness, Lady Fisher of Rednall, is not wrong about the figures she has read out—but in her interpretation of them she is absolutely wrong. The fact is that industry and commerce pay an average percentage rate throughout the country of about 60 per cent. of all the rates which are paid. The noble Baroness has quoted a figure of 6 per cent., but she may be looking in the wrong column or on the wrong page.
Baroness Fisher of Rednal: It is shown on a big graph.
Lord Bellwin: I do not want to go on at length about that point, but we will go into it later on, I am quite sure. I do not want to go on at length about this amendment, because we are slowly moving into other areas which are completely off the subject. The subject of this amendment is really supplementary rates. I will make only one brief observation, which is to say why both my noble friend Lord Mottistone and I feel that this is indeed a wrecking amendment that does drive a coach and horses through the Bill—despite what was said by the noble Lord, Lord Harris of Greenwich. Paragraph (c) of the suggested new subsection (4) would allow local authorities to continue to raise a supplementary rate or precept, for any and I quote: "unanticipated loss of income". That is so wide that clearly it is impossible, in view of what has happened, not in years gone by, but in the last year or two. This is a safeguard that we are bringing about for ratepayers who cannot accept the unanticipated burden which could come upon them suddenly for whatever reason. That is why I strongly oppose the amendment.
3.47 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 60; Not-Contents, 98.

DIVISION NO. 1

CONTENTS

Amulree, L.

John-Mackie, L.

Ardwick, L.

Leatherland, L.

Bacon, B.

Leonard, L.

Banks, L.

Listowel, E.

Beaumont of Whitley, L.

Llewelyn-Davies of Hastoe, B.

Birk, B.

Lovell-Davis, L.

Bishopston, L. [Teller.]

McCarthy, L.

Blyton, L.

Mais, L.

Boston of Faversham, L.

Mayhew, L.

Briginshaw, L,

Noel-Baker, L.

Brockway, L.

Oram, L.

Bruce of Donington, L.

Paget of Northampton, L.

Burton of Coventry, B.

Peart, L.

Byers, L.

Phillips, B.

Caradon, L.

Plant, L.

Collison, L.

Ponsonby of Shulbrede, L. [Teller.]

Crowther-Hunt, L.

David, B.

Sainsbury, L.

Davies of Leek, L.

Stedman, B.

Denington, B.

Stone, L.

Donnet of Balgay, L.

Strabolgi, L.

Evans of Claughton, L.

Strauss, L.

Fisher of Rednal, B.

Taylor of Mansfield, L.

Foot, L.

Underhill, L.

Gosford, E.

Wallace of Coslany, L.

Hall, V.

Wedderburn of Charlton, L.

Hampton, L.

Wells-Pestell, L.

Harris of Greenwich, L.

White, B.

Howie of Troon, L.

Wigoder, L.

Jacques, L.

Wootton of Abinger, B.

Jenkins of Putney, L.

NOT-CONTENTS

Ailesbury, M.

Alport, L.

Alexander of Tunis, E.

Ampthill, L.

Allerton, L.

Auckland, L.

21

Avon, E.

Lucas of Chilworth, L.

Belhaven and Stenton, L.

Luke, L.

Bellwin, L.

Lyell, L.

Beloff, L.

McFadzean, L.

Blake, L.

Mackay of Clashfern, L.

Campbell of Alloway, L.

Macleod of Borve, B.

Campbell of Croy, L.

Mancroft, L.

Cathcart, E.

Margadale, L.

Clwyd, L.

Marley, L.

Constantine of Stanmore, L.

Massereene and Ferrard, V.

Cottesloe, L.

Mersey, V.

Craigton, L.

Morris, L.

Cullen of Ashbourne, L.

Mottistone, L.

Daventry, V.

Mowbray and Stourton, L.

Davidson, V.

Murton of Lindisfarne, L.

De Freyne, L.

Norfolk, D.

Denham, L. [Teller.]

Northchurch, B.

Derwent, L.

Nugent of Guildford, L.

Dilhorne, V.

Orr-Ewing, L.

Drumalbyn, L.

Pender, L.

Dudley, B.

Penrhyn, L.

Duncan-Sandys, L.

Porritt, L.

Effingham, E.

Rankeillour, L.

Ellenborough, L.

Robbins, L.

Elles, B.

Saltoun, Ly.

Ely, M.

Sandford, L.

Enniskillen, E.

Sandys, L. [Teller.]

Glenkinglas, L.

Savile, L.

Gore-Booth, L.

Sempill, Ly.

Gormanston, V.

Skelmersdale, L.

Gridley, L.

Somers, L.

Grimston of Westbury, L.

Spens, L.

Hailsham of St. Marylebone, L.

Stamp, L.

Strathcona and Mount Royal, L.

Halsbury, E.

Hastings, L.

Strathspey, L.

Hill of Luton, L.

Sudeley, L.

Home of the Hirsel, L.

Terrington, L.

Hunter of Newington, L.

Thomas of Swynnerton, L.

Hylton-Foster, B.

Thorneycroft, L.

Ilchester, E.

Trefgarne, L.

Kinloss, Ly.

Vaux of Harrowden, L.

Kinnaird, L.

Vivian, L.

Kinross, L.

Wakefield of Kendal. L,

Lane-Fox, B.

Ward of Witley, V.

Long, V.

Willoughby de Broke, L.

Loudoun C.

Windlesham, L.

Resolved in the negative, and amendment disagreed to accordingly.
3.55 p.m.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 2:
Page 1, line 7, at beginning insert ("Except as provided in subsection (5) below").
The noble Lord said: I beg to move Amendment No. 2 which, with the Committee's permission, I will take with Amendments Nos. 13 and 16, together with some consequential amendments to Schedule 4. The purpose of this amendment is to give a local authority the power to raise a supplementary rate, where the Government themselves reduce the amount of grant made available to the local authority, in order that it may meet what it considers to be the proper needs of the community; that is, the correct and reasonable balance between social and service needs and the interests of those who provide the money for the provision of those services. The noble Lord when he was speaking to the last amendment made some reference to the fact that the previous Administration made certain cuts in public expenditure, including that of local authorities, at a time when the balance of payments position of this country most certainly needed a tight rein back under all heads.
We are not talking under the same circumstances at all; we are talking in terms of a country which is enjoying one of the largest balance of payments surpluses that it has had in years, for which the Government claim some credit, at the same time, of course, inflicting on the country, quite unnecessarily, the burden of an extra 2 million unemployed. How can he compare this with those circumstances of a very substantial balance of payments deficit, before the benefits of North Sea oil mysteriously proceeded to weave their way into the economy shortly after, but not consequential upon, the Government of the noble Lord opposite coming into office in May? They have been blessed by the biggest bonus in monetary and economic terms the country has ever had. Despite that they have adopted an economic policy—by the exercise of a dogma that is now discredited in practically every academic and economic circle outside his right honourable friend the Chancellor, inevitably the noble Lord, Lord Cockfield, and one or two hangers-on—completely discredited, a monetarist theory completely discredited, which even the Government themselves no longer believe in at all; and yet they still proceed with this policy of constriction.
The noble Lord, Lord Mottistone, put forward his usual, very understandable and very reasonable, plea for industry, pointing out how industry is not represented in local authority affairs. Well, I suppose it is the right honourable gentleman the Minister himself who compensates so weightily on his side to try to redress the electoral balance which he alleges exists. Local enterprise and commerce, after all, still need very good roads maintained, they still need refuse collected, they still need the provision of the police, they still need the provision of the fire services, they still need street lighting, and a whole series of other services provided by the local authority. Of course, unlike the domestic ratepayer who pays his or her rates out of taxed income, industry and commerce are allowed to deduct their rate contributions for tax purposes—a substantial relief that is not available to the domestic ratepayer.
Surely it must now be acknowledged by the Government—and I appeal to them to allow the rays of enlightenment to penetrate the prejudices under which they have so long laid—that their monetary and economic policies are as dead as a dodo and have no relevance any more? What is required is a resurgence in this country, not an ungoverned resurgence and not an ungovernable resurgence, no exercise of wild excess of slinging one's hat into the air and yelling "Alleluia" although I suspect that on the demise of the Government there would be expressions of pleasure that bordered upon those signs of exuberance. No, we do not require that. What surely is required, and what surely should be restored to the local authorities, is the means. If for any reason central Government decide that the contribution of the taxpayer in general to local authority revenues should be cut, and that should not be done by reasons of dogma but only by a careful consideration of the balance of where taxes should be borne, then surely in those circumstances a responsible local authority in close contact with its electorate ought to be able to do just exactly that. If it does it wrongly it will incur the opprobrium of its

23
electorate and will in due course be slung out. If it does it reasonably it will be sustained.
On the performance over the last two or the three years I think that it is abundantly clear that there are quite a large number of ratepayers in the United Kingdom—and they are not all confined to the wealthy, the very rich, or the industrial commercial companies—who see it as a matter of common, social necessity for the benefit of the community in which they live that certain expenditures should be increased in certain sections of the local authorities' activities. They should be the final arbiters in this matter.
I know that the noble Lord will describe this as a wrecking amendment. Of course, any Government do not like to have their own will challenged politically. I confess to admitting that I think that a reasonable person is a person who agrees with me, and I think that the noble Lord thinks likewise. The time has come for us to behave like reasonable and sensible people, without showing any vindictiveness to anybody, and to adopt common sense solutions and to restore to the local authorities the powers which they had and with them that degree of tranquillity in past local government affairs to which the noble Lord referred so nostalgically in his speech on the last amendment. I beg to move.
Lord Mottistone: I hope that the noble Lord, Lord Bruce of Donington, will not mind if I defer following him on the parts of his comments which referred to business rates until I come to my own amendments a little later on to which they are totally relevant. All I would say now is that the noble Lord was quite right when he said that this was a wrecking amendment, because, of course, it is. I had a better simile—namely, that he had harnessed a new set of horses to his coach to drive through the Bill and I think that they are much more dangerous horses. I really cannot understand how he thinks for one minute that the Government will accept the amendment and perhaps the sooner we get over this amendment, and get it out of the way, the better.
Lord Evans of Claughton: It seems to me from discussing this Bill with borough treasurers, directors of finance or whatever they are now called, that they regard—and they are of course non-political, publicly anyway—the proposal enshrined in the amendment as being one of some importance because if local authorities can be subject to decisions to reduce the amount of grant after a local authority has fixed its rates, it puts the director of finance, quite apart from the council, in a very considerable difficulty. I know that the right honourable gentleman the Secretary of State, when the Bill was going through another place, did away with differential super holdback at that time. But is it not correct that differential holdback is still possible? Is it not right that non-differential super holdback is still possible? I hate this jargon but they are the words that are bandied about the corridors of town halls with a frisson of fear at the moment.
If those penalties can be imposed it would seem to me that, unless the amendment is passed, local authorities have no certainty at all about what their grant will be or how much money they will be given by the
24
Government in any one year. If a local authority is not in any certainty, if a local authority is to have penalties imposed upon it retrospectively, it seems to me that it is very unfair and very difficult for local authorities to organise their affairs and they should, under those circumstances, be allowed to raise supplementary rates to cover those kind of circumstances.
I shall no doubt have the opportunity later on to express my views about the amendments of the noble Lord, Lord Mottistone. I do not regard this as a wrecking amendment; I regard it as a useful implement with which a responsible local authority will be able to make predictions about the kind of money that will be available to it in any one year from Government resources. I agree entirely that for local authorities to be much less dependent on grants, and for local government to be allowed to raise money from other sources, would be the healthiest thing of all. I hope that soon the Government will be putting forward proposals for changing the rating system completely. In the meantime, while local authorities are so dependent on grants, it seems to me that they must have some protection against the great uncertainties of this legislation; and this amendment seems to me a useful way of creating some certainty in these uncertain conditions.
Lord Bellwin: Before I respond to the amendment, I should like to say a few words in reply to the point that the noble Baroness made prior to introducing Amendment No. 1, when she referred to the problems of herself and her colleagues as regards the amount of time they had to look at amendments. Let me say at once that I very much regret that. As she knows, one tries very hard to ensure that all information, Notes on Clauses and anything else that noble Lords opposite feel they would need to enable them properly to study, to comment on and to criticise and to move amendments to the Bill, is made readily available. When amendments come in late, I am as sorry about it as anyone else, but the fact is that on this occasion it was not least at the behest of her colleagues in another place that, first, there should be amendments; secondly, specifically that they should be very carefully considered and gone into in detail; and, thirdly, that there should be as much consultation with the associations as possible. I assure the noble Baroness that that has, in fact, been done, but it has taken time—admittedly, longer than one would have hoped. I can only apologise to the noble Baroness and her colleagues on that.
I know she will not mind my saying that sometimes we on this side have also to deal with amendments at short notice, even manuscript amendments. But in no way is that an attempt to do other than to say that I regret the lateness of the tabling of some amendments. The noble Baroness will know from her own experience that that was ever thus. I think she will probably acknowledge that that is so; but that does not mean that it is right, and I agree with that.
Baroness Birk: Before the Minister replies to the debate, I should like to thank him for that very generous apology. I know that he always does all he can to help. But, of course, as he perhaps appreciates, when you are in Opposition and amendments go down late, you do not have at your disposal the resources of a great department that you would have when in

25
Government. Looking to the future of the Bill, I was concerned that, as we understand, amendments will be tabled on, for instance, Clause 4, and perhaps on later clauses in the Bill, and it was in order to ensure that they are tabled that I raised the matter. As regards new clauses, will Notes on Clauses be made available? However, they will not be of much use unless the notes take in the new clauses that are being put down now.
Lord Bellwin: I am happy to say that so far in your Lordships' House I have never been in Opposition, and I hope it will be a long time before that unhappy state of affairs comes about. Nevertheless, I hope that I can comply with the noble Baroness's request. I confess that I have some doubts about amendments being tabled late. Certainly, for what they are worth, Notes on Clauses will be available at all times. If the noble Baroness would like clarification and explanation, I shall readily make that available through the department, because we are all concerned to get as good a Bill as possible. This is not about scoring points. If it means that we get meaningful debate, then I am absolutely content as to that.
Would that I could be as relaxed on the points which the noble Lord, Lord Bruce, made as I am on this latter point. I do not want to enter into a general economic debate with the noble Lord. I had to smile when he said that the country was enjoying one of the largest balance of payments surpluses that we have had for years, but he hastened to say that it was because of the good fortune of North Sea oil. I suppose that that is fair comment; it is a political game. I wonder what he would say if I reminded him that since the Government came to office, certainly within the first year, oil prices rose 100 per cent. I understand that they trebled at one stage. How does one cope with that? May I also remind him—and this is all that I had better say on this, otherwise we shall be digressing—that in 1976 the then Government had been in office for some 2½ years, and it was then that they were in the pickle in which they found themselves from policies which they had been pursuing. But I shall not pursue this as it is somewhat off the subject.
Lord Jacques: Perhaps the noble Lord would give way on two points before he leaves that matter. First, the increase in the price of oil increased the balance of payments surplus. It was something that occurred, which the Government did not expect. Secondly, would the noble Lord bear in mind that when we were in office, instead of having the benefits of exporting oil, we had to import the capital equipment which was necessary to produce the oil?
Lord Bellwin: I said that I would not enter into a debate and nor shall I, but I should like to comment on the first point which the noble Lord made. The noble Lord, Lord Bruce, made the point that it was the result of the economic situation—he was picking up something I said on the earlier amendment—that led to the whole problem of shortage of funds and economic difficulty. In fact he referred—and I wrote it down, as he knows I always do—to economic policies as dead as a dodo, and so on. I shall say only this, and this will be my
26
last word on the subject. One observes the near panic with which those in the City and elsewhere contemplate even the possibility of an Administration other than a Conservative Administration being in power. So those are the discredited policies to which the noble Lord referred.
However, let us return to the point of the amendments. I would simply say—and this is very important—that a survey carried out not very long ago here in London of 500 firms by, I think, the London Chamber of Commerce, showed that as many as threequarters of those 500 firms said that they had either had to close plants or branches, had moved out of the area or had reduced staff solely because of the impact upon them of rates. I do not think that anyone would want to belittle that because it is an important factor in what happens to industry and commerce.
I thought that the noble Lord, Lord Evans, got to the point of the grant entitlements, which I understand is the first of these particular amendments. But the mid-year changes in grant are not new at all. Under the previous rate support grant system it was always necessary to adjust or to close-end grant entitlements in order to match them to the total of grant available for distribution. Authorities were able to plan for that contingency. As we have said before, there was no widespread recourse to supplementary rates. The new grant system retains this feature of the old, except that it now permits a fairer method of close-ending by adjusting the poundage schedule rather than by making the percentage reductions which were so unfair on those authorities which had low rateable values and which are so dependent on grant aid.
There will continue to be the need to adjust grant claims to match the grant available; but especially now, after a year's experience of the new grant system, I believe that local authorities will be able to anticipate the likely extent of such adjustments and provide for this in their initial rate demands, as they have always done in the past. I shall not resort to my long speaking note on this, because I am sure that the Committee would not want me to; it becomes a technical subject. But I have to go back to my own experience, and I hope that the noble Lord, Lord Bruce, will not deny me that.
One of the great grievances we had was the fact that what was then the resources element of the multiple regression analysis of the basis of the rate support grant settlement—the resources element—was always subject to clawback and you never knew what it would be. One could make one's rate and all of a sudden find that for no reason that affected you, but simply because another authority, or series of authorities, had decided to increase their rates, there had to be a deduction from your allocation of the resources element. That was unfair, yet we just did not know. Again, if we are not careful, we shall go into a great deal of complexity that is not necessary.
Whether or not this is a wrecking amendment, whether or not it drives a coach and horses through the Bill, whether or not they are the kind of horses which one of your Lordships thinks is more appropriate than another, I do not know. But what I do know is that the Government very strongly cannot accept the amendments.
Baroness Birk: The temperature goes down enormously directly you return to differential super holdbacks and things like that. It is very much more interesting to talk in a wider cosmos of events than on this, but this is what the amendment is about. It is true that the Secretary of State went back on the differential super holdback because he conceded that local authorities should have some certainty about grants, especially if they lost the power to levy supplementary rates. When we spoke about the past, clawbacks and so on, it was always in the context of authorities being able to levy supplementary rates if they wished to do so. The fact that very often they did not do so is quite another matter. To know that you have an opportunity is one thing, but not to have it at all is entirely different. Even now, without the super holdback, it still legalises a differential holdback by way of a system of expenditure targets and grant penalties. But the rules must be known before the start of the year so that the local authority can rate accordingly.
However, in spite of this, the Secretary of State can still make a change during the year. He can reduce everyone's grant across the board. This is the non-differential super hold, without reference to spending targets. He can also make the adjustment to authorities' grant claims to bring total claims in line with the national total in a penalising way. So there is a differential clawback.
To put it in a nutshell, the position is then that a local authority does not have certainty about its grant for any year and it has no fallback by way of being able to levy a supplementary rate at all. The Secretary of State certainly retains considerable powers to reduce grant, and we come back again to the same point of these amendments, and these powers need to be balanced by local revenue raising powers if programmes for spending on essential services are not to be at the whim of the Secretary of State. Therefore, we come back once again to the nub of the problem that in these various fairly extraordinary circumstances local authorities should still be able to have the power to levy supplementary rates.
I was impressed by what the noble Lord, Lord Evans, had to say about this. He has long and direct experience of this and he generally takes a relaxed and liberal—with a capital "L" and a small "1"—line on these matters and speaks both as a local authority man as well as a legislator in this House. I think that the arguments he put on this from his experience on the ground, so to speak, were entirely convincing.
4.21 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 65; Not-Contents, 99.

DIVISION NO. 2

CONTENTS

Airedale, L.

Banks, L.

Amherst, E.

Birk, B.

Amulree, L.

Bishopston, L.—[Teller.]

Ardwick, L.

Boston of Faversham, L.

Bacon, B.

Briginshaw, L.

Balogh, L.

Brockway, L.

28

Brooks of Tremorfa, L.

Lovell-Davis, L.

Bruce of Donington, L.

McCarthy, L.

Byers, L.

Mais, L.

Collison, L.

Mayhew, L.

David, B.

Molloy, L.

Davies of Leek, L.

Noel-Baker, L.

Denington, B.

Oram, L.

Donaldson of Kingsbridge, L.

Paget of Northampton, L.

Peart, L.

Elwyn-Jones, L.

Phillips, B.

Evans of Claughton, L.

Plant, L.

Fisher of Rednal, B.

Ponsonby of Shulbrede, L.

Foot, L.

Ross of Marnock, L.

Gosford, E.

Sainsbury, L.

Hall, V.

Seear, B.

Hampton, L.

Stedman, B.

Hanworth, V.

Stone, L.

Harris of Greenwich, L.

Strabolgi, L.

Hooson, L.

Strauss, L.

Houghton of Sowerby, L.

Taylor of Mansfield, L.

Howie of Troon, L.

Underhill, L.

Jacques, L.

Wallace of Coslany, L.

Jeger, B.

Wells-Pestell, L.

Jenkins of Putney, L.

White, B.

John-Mackie, L.

Wigoder, L.

Leatherland, L.

Wootton of Abinger, B.

Listowel, E.

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

NOT-CONTENTS

Airey of Abingdon, B.

Lucas of Chilworth, L.

Alexander of Tunis, E.

Luke, L.

Allen of Abbeydale, L.

Lyell, L.

Allerton, L.

McFadzean, L.

Ampthill, L.

Mackay of Clashfern, L.

Auckland, L.

Mancroft, L.

Avon, E.

Margadale, L.

Belhaven and Stenton, L.

Marley, L.

Bellwin, L.

Massereene and Ferrard, V.

Beloff, L.

Merrivale, L.

Blake, L.

Mersey, V.

Campbell of Alloway, L.

Mills, V.

Campbell of Croy, L.

Morris, L.

Cathcart, E.

Mottistone, L.

Clwyd, L.

Mowbray and Stourton, L.

Constantine of Stanmore, L.

Murton of Lindisfarne, L.

Cottesloe, L.

Norfolk, D.

Craigton, L.

Northchurch, B.

Cullen of Ashbourne, L.

Nugent of Guildford, L.

Daventry, V.

Orkney, E.

Davidson, V.

Orr-Ewing, L.

Denham, L.—[Teller.]

Pender, L.

Dilhorne, V.

Penrhyn, L.

Drumalbyn, L.

Plummer of St. Marylebone, L.

Ellenborough, L.

Elles, B.

Porritt, L.

Ely, M.

Rankeillour, L.

Enniskillen, E.

Redcliffe-Maud, L.

Glenkinglas, L.

St. Davids, V.

Gormanston, V.

Saltoun, Ly.

Gridley, L.

Sandford, L.

Grimston of Westbury, L.

Sandys, L.—[Teller.]

Hailsham of Saint Marylebone, L.

Savile, L.

Sempill, Ly.

Halsbury, E.

Skelmersdale, L.

Hastings, L.

Somers, L.

Hayter, L.

Spens, L.

Hill of Luton, L.

Stamp, L.

Holderness, L.

Strathcona and Mount Royal, L.

Home of the Hirsel, L.

Hunter of Newington, L.

Strathspey, L.

Hylton-Foster, B.

Sudeley, L.

Kinloss, Ly.

Swinfen, L.

Kinnaird, L.

Terrington, L.

Kinross, L.

Teviot, L.

Lane-Fox, B.

Thorneycroft, L.

Long, V.

Trefgarne, L.

Loudoun, C.

Vaux of Harrowden, L.

29

Vivian, L.

Westbury, L.

Wakefield of Kendal, L.

Willoughby de Broke, L.

Ward of Witley, V.

Windlesham, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.29 p.m.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 3:
Page 1, line 7, at end insert ("except as provided in subsection (6) below").
The noble Lord said: I beg to move Amendment No. 3, and with the permission of the Committee should like to take Amendment No. 14 with it. Amendment No. 14 is the substantive amendment with which the other is associated, and it reads:
("(6) A local authority shall have the power to levy a supplementary rate where it appears to the local authority that the level of prices, costs and remuneration payable by that authority and any future variation in that level that to that authority appears to be likely are in excess of the determination made by the Secretary of State in setting the level of grants under sub-section (4)(d) of section 54 of the Local Government Planning and Land Act 1980").
The Local Government Planning and Land Act 1980 requires the Secretary of State to take into account levels of inflation when setting the total of the rate support grant. The way in which, or the effect of the way in which, the levels of inflation have been taken into account by the Secretary of State has been diminished by three factors. The first is the tendency for the state to set cash limits on pay as a preface to the national pay round negotiations; the Government state a figure (it has been 4 per cent. in the present pay round) which tends to be treated as the minimum by negotiators. The Government know that to be the case and set a low figure to take account of it. Secondly, the Government tend to mask intended cuts in volume behind inadequate cash limits and build those into cash planning, thus shifting the blame for public expenditure reductions on to pay negotiators. The third factor is the move towards cash planning generally, which in many cases cuts completely across the whole trend of inflation.
If the Government had been able to live up to their electoral promises—not always incorporated in their manifesto but certainly well set out in speeches at election time—progressively to bring down, or even stabilise, the rate of inflation, the necessity for this amendment probably would not have arisen. But as everybody knows, only a short time after they returned to office they deliberately put up the rate of inflation by a series of measures, until ultimately it reached a peak of 22 per cent., and even today it is not down to the level at which it stood when they took over. I do not seek to make a political argument about that, because I have addressed your Lordships on a number of occasions when debating the question with the noble Lord, Lord Cockfield, and it would be inappropriate to rehearse those arguments now. But undoubtedly it has had an uncovenanted effect on the finances of local government. The rates of inflation which they have had to take into account have varied considerably, compared with the cash constraints to which they have been restricted, and the total effect has been to injure local government finances.
The amendment would give local authorities the
30
right to protect their services from inflation caused, first, by the general mismanagement of the economy—to which I have referred and which I do not want to labour because the noble Lord, Lord Bellwin, is well conscious of it—and, secondly, by the Government themselves being a party to special case pay awards, such as to the police and firemen. We on this side are second to none in stating emphatically that the police and firemen—and, I would add in parenthesis, the nurses—are entitled to reasonable pay awards. But the Governments have been party to special pay award which local authorities had not taken into account in advance but which they must satisfy by complying with the statutory obligations placed on them. As the Minister knows, and as the Home Secretary, reminds us, there is increased recruitment in to the various police forces, which tend to become more costly following the events in Toxteth and elsewhere, and there must be increases in equipment and so on.
The amendment would also protect local authorities further against the effects of generally inadequate cash limits set to 18 months before the end of the financial year to which they relate. Your Lordships will recall that the 4 per cent. policy was first announced in September 1981 by the Chancellor of the Exchequer to cover the year to 31st March 1981, six months later. That cannot be satisfactory. While to a minority on the Benches opposite this may appear to be a wrecking amendment, it is in fact put forward with all the reasonableness which the noble Lord, Lord Bellwin, would express if he were in my place. We therefore hope that noble Lords in all parts of the Committee will agree that it is a reasonable amendment, and I trust that Lord Bellwin will not recommend his noble friends to vote against it. I beg to move.
Lord Mottistone: It is interesting to hear the noble Lord, Lord Bruce, using Section 54(4)(d) in almost exactly the reverse way to that which I shall use when I move a later amendment; he is seeking to use it to allow local authorities to spend as much as they wish, while I shall seek to use it to restrict the amount of expenditure they can make. The noble Lord's blandishments are excellent; he is talking very well today and one might almost get carried away, even fooled, by him. As it happens, I am afraid the amendment is another wrecker, and I hope my noble friend Lord Bellwin agrees with me on that.
Lord Evans of Claughton: I have pleasure in disagreeing with the noble Lord, Lord Mottistone; I do not think this is a wrecking amendment. The problem Lord Mottistone has—I suspect it is a problem, to which we shall come later, which he and the CBI have—is that the rating system should be changed. However, at present we are not changing the rating system but trying to do something to make it a little more possible for local authorities to carry out the instructions given to them by Government. The present Government have agreed a formula by which the police and firemen get an increase in salaries on a regular basis. I am not quarrelling with that, certainly not so far as the police are concerned.
If the noble Lord asks any county treasurer, he will be told that this is the most difficult part of the situation. There are imposed regular increases for the police and

31
fire service, in order to meet inflation. The county treasurer is not allowed to take any steps to cover expected increases of that kind or unexpected increases imposed through a wage settlement, which might come at any time. God knows that the amount already put in by a county for contingencies is large enough, but I suppose that it will have to put in a much larger sum. When I was on Merseyside County Council I spent a lot of time suggesting that we lop £7 million or £8 million off contingencies. It now seems that county councils will have contingencies of much larger amounts, though I should not think that that would be the Government's wish.
The point that I am trying to make is that the Government impose on local authorities duties regarding wage settlements and then take away the means by which the authorities can carry out the duties. I hope that the amendment will receive the support of the Committee, though I have a nasty feeling that my hope will not be fulfilled.
Lord Bellwin: I really must smile at the noble Lord, Lord Bruce of Donington, who today seems to be beginning his speech on each amendment with an all-out attack on the Government's economic policies. He then slowly swings to the subject of the amendment, which I entirely agree he puts in the most reasonable of terms. Would that the content of his remarks was as reasonable as the way he makes them! That would make me much happier, but perhaps it is too much for which to hope.
The noble Lord knows that of course I would not agree with him in the view that the Government deliberately put up the rate of inflation. He would expect me to say, as I certainly do say, that it was the previous Administration who carefully sowed the seeds whereby, when we took over, the inflation rate was inevitably bound to go up, as it did. But now, when it comes down, it will stay down, and it will go lower than it has ever gone before. However we shall come to that point as we proceed.
I really cannot accept that supplementary rates or precepts should be permitted where an authority budgets in line with Government assumptions on pay and price increases, as embodied in the RSG settlement, but which then turn out in practice to be lower than the actual level of inflation. The pay and price increases assumed in the rate support grant settlements, including those made by the previous Administration, are as much a discipline and a guideline for local authorities as they are a forecast.
That must be so, since a large element in the assumption is pay, where the matter lies in the hands of the authorities themselves. Indeed, the Labour Government's last settlement, as I well remember, and as the noble Lord will no doubt recall, included a provision for pay increases of 5 per cent. and an 8 per cent. provision for prices, which was strictly in line with their pay policy. Members of that Government—most prominently the then Prime Minister and Chancellor—made it plain that pay increases in excess of the Government's guidelines would have to be met by cuts in services and jobs. Although authorities at that time had the power to levy supplementaries, it cannot have been within the contemplation of the
32
then Government that they should use those powers to make good any squeeze that may have arisen if the guidelines proved too tight.
No one whom I ever knew, of any political colour, in local government, ever talked of supplementary rates. We used to laugh at the then Government's suppositions and assumptions of what pay and prices would be. We simply listened, we went away, and we did what had to be done regarding our contingencies and balances. I would say that the realities of the actual out-turns are now very much nearer than they used to be in those times, and I forecast that they will become so near that they will be pretty much on the nail, certainly so far as inflation goes, and I am hoping that the same, or, if not exactly the same, something very near to it, will apply in regard to prices.
For the same reason, the present Government, in the context of the ban on supplementaries proposed in the Bill, cannot accept the amendments. I shall not any more talk about coaches and horses, but quite clearly the amendments are against what we are trying to do in the whole of this Part of the Bill, and it is for that reason that I cannot accept them.
Lord Bruce of Donington: I am very sorry that the noble Lord cannot accept the amendment that I have moved. In the course of his remarks he referred to the disciplines and said that if we had supplementary estimates, we could not possibly keep the disciplines. Example would be a very fine thing, if the noble Lord's Administration showed some signs of keeping to the disciplines that they are seeking to impose upon local authorities. I have here the supplementary estimates of Her Majesty's Government for 1981–82, which propose an increase of £1,459 million, or 2 per cent., on the total estimates previously made. This does not sound like frightfully good discipline for the moment, does it?
It is only an increase of 2 per cent., but if, for the moment I may anticipate the noble Lord, I would say that it goes to show that in government, whether national or local, there is no such thing as certainty. One is blown off the course. The estimates of central Government for the year may be, and I have no doubt are, made in perfectly good faith, after taking into account all the known factors; but as the year progresses things have to be changed, people are blown off course, all kinds of catastrophes occur. I sincerely trust that situations such as that in the Falklands will not recur many times, but it will have an impact on estimates.
So in suggesting that a local authority should have the powers that are proposed all one is really saying is that, subject to local democratic control, the authority should be entitled to just that kind of latitude that central Governments take to themselves, sure in the knowledge that they are sustained by a party majority for at least four years in the normal way.
Lord Bellwin: I must say that, coincidentally, the amount which I think the noble Lord referred to as an overspending equates almost exactly to the amount by which local government as a whole has overspent its budgets. We are talking of about £1.5 billion, which is a horrific figure. We used to talk of £50,000, £100,000, or £200,000. They were enormous amounts at one time, but here we are faced with an overspend by

33
local government of £1½ billion. No Government can stand by and do nothing about that.
As the noble Lord knows, I am as concerned as anyone that local government should not be hampered more than it need be. I shall not now go into that debate, but I could give many examples of how I consider that it is not hampered, despite what might be said. Nevertheless, there is a problem here. We are talking about something that never used to apply. In the past there was never an inhibition or a restriction on local government; it never even came into the reckoning. But all of a sudden the matter is assuming proportions as though it were of great moment, as though it concerned local democracy and the rights and freedoms of local government. I must say that there is being made here a case that is not so. It is not the use of the powers, but the abuse of the powers that has led to the present situation. That is why there is concern; that is why there is the necessity for this Part of the Bill, and that is why we cannot accept the amendment.
4.49 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 64; Not-Contents, 98.

DIVISION NO. 3

CONTENTS

Airedale, L.

Jenkins of Putney, L.

Amherst, E.

John-Mackie, L.

Amulree, L.

Kaldor, L.

Ardwick, L.

Leatherland, L.

Bacon, B.

Listowel, E.

Balogh, L.

Llewelyn-Davies of Hastoe, B.

Banks, L.

Beaumont of Whitley, L.

Longford, E.

Birk, B.

Lovell-Davis, L.

Bishopston, L—[Teller.]

McCarthy, L.

Boston of Faversham, L.

Mayhew, L.

Briginshaw, L.

Molloy, L.

Brooks of Tremorfa, L.

Northfield, L.

Bruce of Donington, L.

Oram, L.

Byers, L.

Peart, L.

Caradon, L.

Phillips, B.

Collison, L.

Plant, L.

David, B.

Ponsonby of Shulbrede, L.—[Teller.]

Davies of Leek, L.

Denington, B.

Ross of Marnock, L.

Donaldson of Kingsbridge, L.

Seear, B.

Stedman, B.

Elwyn-Jones, L.

Stone, L.

Evans of Claughton, L.

Strabolgi, L.

Ewart-Biggs, B.

Strauss, L.

Fisher of Rednal, B.

Taylor of Mansfield, L.

Foot, L.

Underhill, L.

Gosford, E.

Wallace of Coslany, L.

Hall, V.

Wells-Pestell, L.

Hampton, L.

White, B.

Hooson, L.

Wigoder, L.

Howie of Troon, L.

Wootton of Abinger, B.

Jacques, L.

Young of Dartington, L.

Jeger, B.

NOT-CONTENTS

Airey of Abingdon, B.

Belhaven and Stenton, L.

Alexander of Tunis, E.

Bellwin, L.

Allen of Abbeydale, L.

Beloff, L.

Allerton, L.

Bessborough, E.

Ampthill, L.

Blake, L.

Avon, E.

Campbell of Alloway, L.

Balerno, L.

Campbell of Croy, L.

34

Cathcart, E.

Merrivale, L.

Colwyn, L.

Mersey, V.

Constantine of Stanmore, L.

Mills, V.

Morris, L.

Cottesloe, L.

Mottistone, L.

Craigton, L.

Mowbray and Stourton, L.

Cullen of Ashbourne, L.

Murton of Lindisfarne, L.

Daventry, V.

Norfolk, D.

Davidson, V.

Northchurch, B.

Denhatn, L.—[Teller.]

Nugent of Guildford, L.

Dilhorne, V.

O'Neill of the Maine, L.

Drumalbyn, L.

Orkney, E.

Ellenborough, L.

Orr-Ewing, L.

Enniskillen, E.

Pender, L.

Glenkinglas, L.

Penrhyn, L.

Gormanston, V.

Plummer of St. Marylebone, L.

Gridley, L.

Hailsham of Saint Marylebone, L.

Rankeillour, L.

St. Davids, V.

Halsbury, E.

Saltoun, Ly.

Hastings, L.

Sandford, L.

Hayter, L.

Sandys, L.[Teller.]

Hill of Luton, L.

Savile, L.

Holderness, L.

Sempill, Ly.

Home of the Hirsel, L.

Sherfield, L.

Hunter of Newington, L.

Skelmersdale, L.

Hylton-Foster, B.

Somers, L.

Kilmany, L.

Spens, L.

Kinloss, Ly.

Strathcona and Mount Royal, L.

Kinnaird, L.

Kinross, L.

Strathspey, L.

Lane-Fox, B.

Sudeley, L.

Long, V.

Swinfen, L.

Loudoun, C.

Terrington, L.

Lucas of Chilworth, L.

Teviot, L.

Luke, L.

Thorneycroft, L.

Lyell, L.

Trefgarne, L.

McFadzean, L.

Vaux of Harrowden, L.

Mackay of Clashfern, L.

Vivian, L.

Macleod of Borve, B.

Wakefield of Kendal, L.

Mancroft, L.

Ward of Witley, V.

Margadale, L.

Westbury, L.

Marley, L.

Willoughby de Broke, L.

Massereene and Ferrard, V.

Windlesham, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.57 p.m.
Baroness David Baroness David moved Amendment No. 4:
Page 1, leave out line 8.
The noble Baroness said: In speaking to this amendment I shall also be speaking to Amendments Nos. 17 and 20. The purpose of Clause 1, according to paragraph 1 of the Notes on Clauses, is to require rating authorities to make a single rate to cover their estimated spending needs for a whole financial year without further recourse to their ratepayers during the year once their rates have been set. The Government's policy objective is declared to be that authorities may make only one rate for the year and shall contain their expenditure to the level that can be financed by that rate without further recourse to the ratepayer; and in order to achieve that objective (I am quoting from paragraph 5 of the Notes on Clauses):
"it is necessary to provide that not more than one rate shall be made for each financial year. Authorities will therefore no longer have discretion as to the length of the rate period; it will in all cases be 12 months".
There is no definition of "supplementary rate" in Clause 1, although the clause prohibits the making of a supplementary rate.
Clause 2 is exactly parallel with Clause 1 in dealing with precepts. However, in Clause 2 "supplementary precept" is defined. The reason given for this in paragraph 6 of the notes on Clause 2 is that some of the precepting powers do not refer to supplementary precepts. Reference is made to paragraph 4 of the notes, and paragraph 4 states:

(a) parish and community councils do not have power to issue supplementary precepts;

(b) the Receiver of the Metropolitan Police and Joint Boards under the 1936 Public Health Act do not have express powers to issue supplementary precepts, but there is nothing to stop them issuing successive precepts in a financial year;

(c) water authorities may issue supplementary precepts during the course of a financial year".

However, at the moment the Bill does not apply to water rates. It appears, therefore, that a definition of "supplementary precept" is included only to clarify the position in regard to authorities other than the main precepting ones.
It is difficult to understand the inclusion of a ban on both the making of a supplementary rate or precept and the levying of a rate or precept for a period other than a financial year. There would appear to be two cases with which the Bill is intended to deal. First, the levying of rates or precepts for periods of less than a year—that is, for example, for two half-years—or, second, the levying of a supplementary rate or precept during the course of a year. But as by definition the second case is for a period of less than a full financial year, it is difficult to understand why it needs to be dealt with separately. Both cases appear to be dealt with by prohibition (b), so that the Government's stated objective seems to be accomplished fully and simply by that prohibition.
The only reason given for the inclusion of the definition of a supplementary precept is a rather obscure technical one and appears to be adequately covered by the general prohibition in (b). One is driven to the conclusion that prohibition (a) in Clauses 1 and 2 is superfluous for reasons of economy and clarity and should be dropped. If (a) in Clause 2 is dropped (as Amendment No. 7 suggests) there is no need for the definition in the last three lines of subsection (2); and that makes up Amendment No. 20. I beg to move.
Lord Bellwin: It has to be said that these amendments would wreck Part I of the Bill. As we now know, the object of Part I is to ban supplementary rates and precepts, and all other aspects of Part I follow from that and exist to ensure that it will be satisfactorily achieved. If these amendments were to be accepted, there would be nothing to stop local authorities from making a supplementary rate or precept. There would be little point in proceeding with the rest of Clauses 1 and 2, since this would simply ensure that any supplementary rate or precept would have to be made, like the original rate or precept, for the whole year. The value of Clause 3 would be undermined and there would be no purpose in extending, for example, the Greater London Council's power to borrow with the Secretary of State's approval.
I made it clear at Second Reading why we propose to ban supplementary rate and precept. We have talked about it for a long time today—for two hours—and I
36
am sure that I should not be thanked for repeating all the arguments. I would say that we are not prepared to see a repetition of some of the problems which led to this whole situation in the past, that have put and are putting an intolerable burden on hard-pressed rate payers, domestic and non-domestic, many of whom can ill afford further, heavy, unexpected—and that is the operative word—demands for supplementary rates. Therefore, we cannot accept the amendment.
Baroness David: May I ask the Minister why the situation is not covered by (b)?
Lord Bellwin: I am not quite sure what the noble Baroness means by "covered by (b)".
Baroness David: I do not understand the necessity to have (a) because (b) says the rating authority shall not have power to make a rate for any period other than a financial year. Does that not cover the whole thing?
Lord Bellwin: A supplementary rate would always be for less than a whole year.
Baroness David: But (b) says that you cannot have a rate for any period other than a financial year. I should have thought that that covered the situation.
Lord Bellwin: I think not. As always, I will look into the point that the noble Baroness makes and, should it be otherwise, I will come back to her. My interpretation is that there is not this problem at the point she makes. I will undertake to look at it.
Baroness David: If the noble Lord says that he will look at it, then I shall be happy to withdraw the amendment.
Amendment, by leave, withdrawn.
5.5 p.m.
Baroness Birk Baroness Birk moved Amendment No. 5:
Page 1, line 9, leave out second ("a") and insert ("the").
The noble Baroness said: In moving Amendment No. 5, it may help the Committee and the Minister if I speak to Amendments No. 7, 8, 9, 10, 18, 21 and 22. They are all concerned with the question of the duration of this piece of legislation if it unfortunately gets on to the statute book. Incidentally, the Minister said (and he was right) that he was always anxious to be helpful. I would say that he could be a little more helpful if he accepted some amendments—not every one, but the odd one. This may be a good place to start because this is something that has been mentioned by the Government: the question of the duration of this legislation.
Notwithstanding the general opposition to the constitutional changes in this Bill, what we feel is that the restriction on supplementary rates and precepts should be expressed to be of a temporary nature only and limited to one year. I think that, if that were so, my noble friend Baroness David would feel happier if she and many of us knew that this was going to be of a temporary nature. The Association of Metropolitan Authorities and, I think, the other local authority associations are concerned about the length

37
of time for which this legislation may be in force. The AMA does not accept the need for restriction at all but, even if a need for some restraint on local revenue-raising powers of local authorities can be shown to be justified—and I do not think that anybody believes on any side of the Committee that local authorities should be encouraged or allowed to go haywire in financial matters—the measures in this Bill are of such magnitude as to be out of all proportion to the problem which is said to exist. The Government have stated that on many occasions. Every time we move an amendment to let things remain as they are and allow the local authorities to have their right to levy supplementary rates, the Government say that this is seldom done. This large hammer is being used in a very crashing manner.
Also, it involves major constitutional changes in the role of local government and therefore the point of these amendments is that, if they are to be introduced at all, they must be temporary in nature so that their effects can be judged after a period of trial. As the Government imply from time to time that this is to get over a particular economic hill, then it should not be necessary to have permanence for this Bill. A trial period is essential because of the haste with which the changes are being introduced and because of their fundamental nature.
We know there were certain changes in the other place and then, as the Minister explained this afternoon in answer to my complaint about the late arrival of the amendments here, a great deal of work had to go into that and it was difficult to be able to produce the changes here before last Friday. The problems encountered by Lothian in Scotland, for example, in not being able to raise additional revenue while faced with massive grant cuts are an example of the problems which will be forced upon many local authorities in England and Wales and the effect of these problems must be reassessed before making the restriction permanent.
Another reason for arguing for the restrictions to be temporary is the Government's own intention with regard to review of the rating system in total. The Green Paper, Alternatives to Domestic Rates, was presented by the Secretary of State in December. The paper concludes that the Government,
"wishes to move ahead as quickly as possible".
The intention is therefore that a new system for financing local government be introduced as soon as possible, and this may involve the abolition of the rating system in total. We do not yet know what the Government have in mind. Even if they were going to leave the situation as it is, they still have to go into these matters and examine them and realise what has happened in the process of consultation.
Therefore what is the point in creating problems and constitutional changes involved in the proposed restrictions that are now before us if the whole system is conceivably going to be altered very shortly in any event? If the restrictions are to come into effect, then they should be clearly limited so that they do not hinder the consideration of alternative financing arrangements, and also so that they clearly come to an end when the new financing arrangements come in.
The Secretary of State has certainly made it clear that he considers the restrictions to be of a temporary nature only. During the debate on 12th November
38
1981 on the Opposition Motion on encroachments on local government autonomy, the Secretary of State stated that he regarded the original Bill as an interim measure, related only to the short term. In fact, he further indicated that a limitation on the powers to three years would be,
"a sensible amendment to consider".
If he thinks that, why should not the temporary nature be explicit in the legislation? In fact, it is essential that it be written into the legislation itself. I also understand that the Secretary of State considers that the use of the restrictions in existing powers for one year would bring local government spending into line with the Government's wishes for the foreseeable future. Again, if this is his view, and he feels that he has confidence in the Government dealing with the economy and that what is being done here will do the trick that he wants done so far as local authorities are concerned, then it would be quite wrong not to limit the restriction to one year instead of creating major problems for local government and the constitution of the country for all time.
There are many precedents where controversial or constitutional legislation has been subject to renewal every year or is given a life of only one year. My friends and I believe that three years is too long for a piece of legislation of this type. The provisions in it are highly sensitive to and responsive to what is happening in the economic and social fields at any time. They should respond to the temperature of what is going on. The only way that can be done is by restricting the legislation to one year. When the Government are in power with a majority they can always introduce it again. It gives an opportunity and also acts as an incentive that the Government would want to use rather than always returning to the use of a blunderbuss which upsets more people than it cures, knocks more heads down and makes more people unconscious in this manner than encourages them to do what the Government want.
If I may give the Minister some examples so that this is not something taken out of the blue, the prices and incomes legislation was renewed every year; sanctions imposed on Rhodesia were renewed every year; and the Prevention of Terrorism Act comes up every year. Although it may be in a different category, this would seem a particularly good and right candidate for treatment of this sort. I do not believe for one moment that the Minister could answer that this is a wrecking amendment. It is not.
We have had now three divisions to try to get some "give" in the legislation on the levying of supplementary rates, and if the Government do not give on that, and we do not manage to get any further on that, then at least they can and should do—and it would be following the intentions, as we understand it, of the Secretary of State—is to make the legislation viable and valid for only one year and then review it and reassess the position again. I should have thought that this was not only sensible and reasonable but a beneficial addition to a piece of legislation of this sort. I beg to move.
Lord Evans of Claughton: From these Benches we support the amendment moved by the noble Baroness.

39
It seems to me a pity to create a huge upheaval in local government and its relationship with central Government and to emasculate it in the way that has been proposed. It is said that this is for reasons of financial control at a time when the Government propose in the Green Paper to proceed speedily with the introduction of new systems of local government finance. To destroy the independence of local government or make incursions or restrictions on that independence at a time when the root cause is the raising of the money and the level of public expenditure involved is a great pity. This is particularly so when creating this huge machine to do this at a time when, if the Government are telling the truth and if their intentions are accurately expressed, that they intend to amend the system to bring in new types of means of financing local government, local income tax, whatever causes they have to do this.
So if they are on the point of introducing legislation—perhaps the noble Lord the Minister can reassure us on this—to change the nature of local government finance, then surely it is good that this kind of legislation should be of a temporary nature. I would have thought that the noble Lord and his right honourable friend the Secretary of State would welcome this amendment because it is along the lines that his right honourable friend has been talking about for some months. I hope that the Government will on this occasion save us the inconvenience of trooping through the Division Lobbies again.
5.18 p.m.
Lord Bellwin: I think that the exercise is not doing any harm. Maybe I shall have to have some more of it because I fear that I cannot accept this amendment. The noble Baroness said—as has been said a few times today—that the supplementary rate is seldom used. The point is that the supplementary rate was seldom used. Unhappily, it is because in the last year or so it has not been seldom used that we are dealing with this whole matter today in the way that we are. I do not see the problem to which the noble Baroness refers. If it were so, then what has been going on in Scotland all these years? They have not had all this trauma and drama that we hear about.
When the noble Baroness refers to the observations of my right honourable friend, I would in turn have to quote back to her that he also said on 16th December:
"I do not believe that we should take a decision on the limitation of time on banning the supplementary rate. It was a commitment that I gave very much in the context of the referendum provisions. The case is different when one comes to judge supplementary rates".
The fact is that ratepayers must not lose protection from fear of heavy and unexpected supplementary rate demands and risk destruction of their budget after 31st March 1983. Confining operation of Clauses 1 and 2 to 1982–83 would mean that after only a year's brief but well earned respite for ratepayers they would again be at risk from this minority of authorities who levy supplementary rates to increase spending apparently—it has to be said—regardless of the burden on domestic ratepayers, industry and commerce.
In any event, the ban on supplementary rates and precepts is not intended to be a temporary measure.
40
We have made it clear that in the non-domestic sector, where rates will remain for the foreseeable future, the ban will continue. The ban could, however, be an interim measure in the domestic sector pending the proposals for the reform of the domestic rating system, to which we remain committed. It is too soon to say exactly when this will be. The timing of reform must depend upon the outcome of the consultations on the Green Paper and on the decisions on which options should be adopted; but I can and do assure the Committee that we want real reform just as quickly as circumstances allow and we are very seized of the importance of the time factor.
I am sorry I cannot be more precise. The noble Lord knows I would like to be more precise but I cannot be today. However, we are very much seized of the importance of the matter. All in all, I cannot accept that operation of Part I of the Bill should be limited as proposed by the amendment. I recognise the way in which noble Lords opposite are at least trying to get some mitigation of the underlying purpose of Part I but we feel very firmly that this is really important and we cannot shift on it. Whether or not we can do so on later amendments, we shall have to see as we go along.
Lord Bruce of Donington: I hope the noble Lord will assure himself that what we are really trying to do is to see that he himself does not stand in the way of his own creativity. We are trying to do him a favour. The noble Lord knows perfectly well, as indeed do noble Lords in all parts of the Chamber, that the Conservative Party were committed in their manifesto, which has a degree of importance, I would suppose, to people who profess themselves to be bound by it and who wave it on every conceivable opportunity as a justification of their actions. But the noble Lord ought to be proceeding with this review of the way in which local authorities can be financed.
He has correctly referred to the Green Paper, but the Green Paper has been about for a long time and the noble Lord knows perfectly well that phrases such as: "We are leaving no stone unturned"; "We are keeping the matter under close and continuous review"; "We intend to give it the utmost priority"; "We are deep in thought about the matter" and so on, have been made very popular indeed by the recent television series, "Yes, Minister". We know the jargon. All it really means is that you really have not the remotest intention of doing anything about it and are explaining why.
If the noble Lord set himself a target by which he had to do something then I am quite sure his ingenuity, his influence within his department and the deep arguments and conversations with his Minister would produce a solution on the basis of the alternatives, not only in the Green Paper but also in the Layfield Report. If he sets himself a target, I have the utmost confidence in the noble Lord that he would do it and proposals would be laid before us setting out different suggestions for financing. I implore him to set himself a target and to challenge himself; and there is no better way of doing it than by making this part of the Bill really temporary and lasting only for one year.

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I am quite sure his department would be galvanised into action if he accepted this amendment, because they would know that time was ticking on and they would have to produce proposals of a constructive kind for a complete reorganisation of the way in which local authorities get their money. I implore the noble Lord to look to his own reputation and the magnificent achievement he would ensure if only he made it possible and gave his department and everybody else the incentive to work to a time. We invite your Lordships to support us on this amendment.
Lord Bellwin: Before the House decides to do so, perhaps I should just say that, first, I hope the noble Lord knows that the consultation date finished at the end of March. There was the most extensive consultation on the Green Paper, although there were those who said they needed longer—but there would always be those who said that. The noble Lord could be surprised on this, whether pleasantly or not will depend upon the form it takes, and I am not going to be drawn today, however much I am tempted—and I am tempted—to put a time on it. The noble Lord knows it does not work like that. The fact is that we are now analysing the results of the consultation. We are seized, as I said before to the noble Lord, Lord Evans, of the importance of this. He is quite right: there is a commitment in the party manifesto. We are well aware of that and we understand the importance of it. More I will not say today, despite the great temptation to do so, because if it were that easy, it would have been done years ago.
The Layfield Report was published years ago and the debate has continued for as long as I can remember. I look round in the Committee today and see many people who have had years in local government: some of them are nodding their heads, because they know that "it ain't that easy", otherwise it would have been done. There needs to be change—that is beyond question—but what it should be is another matter, and one has to be very careful about how one goes about it.
If it in any way comforts the noble Lord, Lord Bruce, I tell him again that we are very alert to the need for some urgency in this matter, and that is what it is receiving. He said that we have not the remotest intention of doing anything about it. I trust he will make a careful note of today's date in his diary, and that when something is done he will refer to what was said today. I have said why we cannot accept this amendment. It may be that as we go along, to pick up a point made by the noble Baroness, there may be ways in which we shall be able to move—who knows? One always tries to do the best one can. We want the best Bill we can get, but I fear this amendment would not help to that end.
Baroness Birk: The noble Minister has concentrated on the question of when, where and how the Government will come to some conclusion on the domestic or general rating system, on its abolition or whatever. But this is not the whole point of the amendment. We can go back to what the noble Lord's right honourable friend said—it is true it was then in the context of a referendum, but he knows as well as I do that the whole thing was to deal with the question of authorities raising supplementary rates, either through a referendum
42
or in any other way. That is what this Bill is about. Therefore, the question of reassessment is a different factor from that of what is going to happen in future to the rating system. It is on that point, which should carry equal weight, that I have been pressing the Minister as well as on the question of the Government making up their mind. And I agree that is very difficult, because I do not deny that the previous Administration also found it a difficult and complex measure.
As far as legislation is concerned, all Governments legislate far too much. We get lumbered with legislation which becomes almost as obsolescent as yesterday's washing machine when you try to get it repaired, and repairing legislation is extremely difficult. It would be a good thing if, very much more often, legislation was contained for a year and then had to be reassessed to decide whether it should continue. This is an extraordinarily good vehicle in which to do that. It is for those reasons, as well as the question of the Government coming forward with their proposals on rating, that we should give very serious consideration in this Bill to the question. I shall not repeat all the points I raised in moving the amendment.
The amendment is not saying that it should only last for a year and that would be the end of it: that would be a definite date with a time limit. What the amendments are saying is that after a year there should be a reassessment and a monitoring during that year, and the Government would then have the opportunity to decide whether it is necessary to continue with something which after all has created great antagonism among local authorities. If it is not absolutely necessary, it need not be restored for another year. If it is made permanent, as it is in the Bill at the moment, it is very much more difficult to get a change, which the Minister knows as well as I do. You then have to bring in new legislation; and why should the Government, Parliament and everybody else be put through that hoop? We know that they will not, and that the legislation will go on and on, however unnecessary it is.
It is for those reasons that, in spite of what the Minister has said, I ask him quite seriously whether he will take this back, have a look at it and discuss it with his right honourable friends to see whether he can find some way of giving on this point. The arguments that have been put forward from this side, as well as by the noble Lord, Lord Evans, have not really been answered in a convincing way by the Government, and I still think that there is room for more thought and manoeuvre on this point.
Lord Bellwin: The noble Baroness knows that I should like to help and that I should like to say, "Yes, we will have a look at it." But I must be honest about it and say that, although I will talk—I always do in any case about matters that are raised where there seems to be some concern on a matter which is not absolutely cut and dried—when I contemplate what it would mean to have it for a year, with all the difficulties that would impose, I do not think we can do anything. What would be the situation if we said that we would have it for a year and then, if there were no problems, no supplementary rates and so on, we said that we would therefore no longer insist on this? Those who had been doing

43
these things would say "Now it is all right and we can come back again." We should be back to square one. That is why, in truth, I do not think we can do anything. But we will talk about it and, if I have anything helpful to suggest, I will do so. But I must be frank and say that I doubt very much whether we can get to where the noble Baroness wants to be.
Baroness Birk: Before I decide, may I say that I appreciate that the Minister is trying to be helpful and is always ready to talk. But I must get this really clear because I do not want to do him an injustice, nor do I or my noble frineds want to assume something which is misleading. If he is saying that he will be happy to continue just talking to me about it in a rather philosophical way, that is one thing. But if he is saying that the Government are still prepared to think about a limitation of a year that is another. If he cannot say that there is really room for consideration of this matter, then I really must divide the Committee. I do not want to do it, but I must have a little more than what he has just said, although he said it with his usual courtesy and in a very pleasant way. But this is a very important and practical point.
Lord Bellwin: I understand what the noble Baroness has said. I cannot give her the absolute assurance that she wants, much as I understand the point that she is making. Therefore, I cannot go any further.
5.34 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 59; Not-Contents, 91.

DIVISION NO. 4

CONTENTS

Airedale, L.

Jenkins of Putney, L.

Amherst, E.

John-Mackie, L.

Amulree, L.

Kaldor, L.

Ardwick, L.

Leatherland, L.

Bacon, B.

Llewelyn-Davies of Hastoe, B.

Balogh, L.

Banks, L.

Longford, E.

Beaumont of Whitley, L.

Lovell-Davis, L.

Birk, B.

McCarthy, L.

Bishopston, L —[Teller.]

Mayhew, L.

Boston of Faversham, L.

Molloy, L.

Brooks of Tremorfa, L.

Northfield, L.

Bruce of Donington, L.

Ogmore, L.

Byers, L.

Oram, L.

Caradon, L.

Peart, L.

Collison, L.

Perry of Walton, L.

David, B.

Phillips, B.

Davies of Leek, L.

Ponsonby of Shulbrede, L.

Donaldson of Kingsbridge, L.

Ross of Marnock, L.

Stedman, B.

Elwyn-Jones, L.

Stone, L.

Evans of Claughton, L.

Tanlaw, L.

Fisher of Rednal, B.

Taylor of Mansfield, L.

Gosford, E.

Underhill, L.

Hampton, L.

Wallace of Coslany, L.—[Teller.]

Hanworth, V.

Hooson, L.

Wells-Pestell, L.

Houghton of Sowerby, L.

White, B.

Howie of Troon, L.

Wigoder, L.

Jacques, L.

Wootton of Abinger, B.

Jeger, B.

Young of Dartington, L.

44

NOT-CONTENTS

Airey of Abingdon, B.

Mackay of Clashfern, L.

Alexander of Tunis, E.

Macleod of Borve, B.

Allen of Abbeydale, L.

Mancroft, L.

Allerton, L.

Mansfield, E.

Auckland, L.

Margadale, L.

Avon, E.

Marley, L.

Balerno, L.

Massereene and Ferrard, V

Belhaven and Stenton, L.

Merrivale, L.

Bellwin, L.

Mersey, V.

Blake, L.

Morris, L.

Boardman, L.

Mottistone, L.

Campbell of Croy, L.

Murton of Lindisfarne, L.

Cathcart, E.

Norfolk, D.

Colwyn, L.

Nugent of Guildford, L.

Constantine of Stanmore, L.

Orkney, E.

Orr-Ewing, L.

Craigton, L.

Pender, L.

Cullen of Ashbourne, L.

Penrhyn, L.

Daventry, V.

Plummer of St. Marylebone, L.

Denham, L — [Teller.]

Eccles, V.

Rankeillour, L.

Fortescue, E.

Ridley, V.

Fraser of Kilmorack, L.

St. Davids, V.

Gainford, L.

Sandford, L.

Glenkinglas, L.

Sandys, L.—[Teller.]

Gormanston, V.

Savile, L.

Greenway, L.

Seebohm, L.

Gridley, L.

Sempill, Ly.

Hailsham of Saint Marylebone, L.

Skelmersdale, L.

Soames, L.

Harmar-Nicholls, L.

Somers, L.

Hastings, L.

Spens, L.

Hayter, L.

Strathspey, L.

Hill of Luton, L.

Sudeley, L.

Holderness, L.

Swinfen, L.

Hylton-Foster, B.

Terrington, L.

Ironside, L.

Thorneycroft, L.

Kinloss, Ly.

Trefgarne, L.

Kinnaird, L.

Trumpington, B.

Kinnoull, E.

Vaux of Harrowden, L.

Kinross, L.

Vivian, L.

Long, V.

Wakefield of Kendal, L.

Loudoun, C.

Ward of Witley, V.

Lucas of Chilworth, L.

Westbury, L.

Luke, L.

Willoughby de Broke, L.

Lyell, L.

Windlesham, L.

McFadzean, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
The Deputy Chairman of Committees (Baroness Wootton of Abinger): I have to point out that if Amendment No. 6 is agreed to I shall not be able to call Amendments Nos. 7 to 11 inclusive.
5.42 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 6:
Page 2, line 1, leave out from beginning to end of line 13.
The noble Lord said: I beg to move Amendment No. 6 and with it I wish to speak to Amendments Nos. 9, 25, 26, 29, 71, 85 and 87. These amendments are a package, designed to clarify the position of rating and precepting authorities and of ratepayers, particularly where a precept or rate has been found to be unlawful. Your Lordships will, I am sure, be aware of the questions which arose out of their Lordships' decision in the GLC v. Bromley case that the GLC supplementary precept, levied last year, was invalid. Questions were raised relating to the powers of local authorities to reduce a partly invalid rate and their ability to refund ratepayers who had already made payments to meet the invalid precept.
These amendments seek to make a new statutory provision to deal with the complicated rating issues which arose. But your Lordships are aware that the Bill has always made invalid supplementary rates or precepts relating to 1982–83 and all future financial years, regardless of the date on which those rates or precepts were made or issued.
The Bedfordshire County Council, as I know your Lordships are also aware, issued a supplementary precept for 1982–83 in the mistaken belief that this would stand after the Bill becomes law. However, as we have made clear many times, it will fall on Royal Assent. As a result of this misunderstanding about the effect of the Bill, the authorities and ratepayers of Bedfordshire have been in some confusion as to their obligations and duties before and after the passing of this Bill. We have therefore ensured that these new statutory provisions provide authorities with the power to substitute for rates and precepts and a duty to make refunds to ratepayers, where appropriate, will apply equally to the ratepayers of Bedfordshire.
Since my right honourable friend announced in another place the Government's intention to table these amendments we have had useful discussions with the local authority associations on both the principles and the details of the amendments. It might be helpful if I outlined for the Committee what these amendments are designed to achieve.
New Clause 25 gives rating and precepting authorities the power to substitute rates and precepts for those previously made for the year, whether valid or invalid. This would, for example, enable an authority whose rate has been quashed by the courts to make a new one or, indeed, to substitute its rate in anticipation of it being quashed. The new rate or precept must not of course be higher than the one for which it is substituted, since this would defeat the object of the ban on supplementary rates and precepts. The new clause also provides that ratepayers and rating authorities who have paid sums to the rating and precepting authorities are entitled to get back their excess payments if they want them. Otherwise it is left to the discretion of the authorities whether to repay or credit the excess.
New Clause 26 provides, in the light of the GLC v. Bromley case and a number of other recent cases, that the validity of a rate or precept can, on the grounds specified, be challenged only in the High Court, and that where relief is granted the court shall quash the rate or precept entirely. This latter is necessary for the operation of the substituted rate procedure which I have just described. By providing that appeals against a rate in its general application to ratepayers should go to the High Court, we are again trying to clarify matters. Doubts have arisen recently as to whether the Crown court has jurisdiction to decide such appeals. We think that the High Court is the appropriate forum, leaving the Crown court with jurisdiction to decide appeals against the rate as it affects individual ratepayers.
New Schedule 71 comprises transitional provisions to deal with any supplementary rate or precept, or a rate or precept made for a period other than a year, made before the Bill is enacted, and whether before or after 1st April 1982, in respect of a period beginning on or after that date. These would in any case fall on Royal Assent, and the schedule covers the repayment of sums paid in respect of supplementary rates and precepts.
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It also provides that a rating authority whose main rate is partly to meet a supplementary precept shall make a new rate, lower by the amount of the supplementary precept. In that event, the provisions of new Clause 25 ensure that sums paid in respect of the supplementary precept can be repaid. The schedule also provides that if a rate or precept is made for other than a financial year, a new one must be substituted for the complete financial year.
Finally, new Clause 29 consolidates all the provisions relating to the interpretation and commencement of Part I. The amendments to the title, Clauses 1 and 2 and to Schedule 4 are consequentials. These amendments are designed to clarify a complex area of rating law and I commend them to your Lordships. I beg to move.
Lord Bruce of Donington: The Committee will be indebted to the noble Lord for having explained the new clauses to which Amendment No. 6 is a lead-in—which we have not had very much opportunity to consider, for reasons which the noble Lord has given an indication that he immediately recognises.
These are very important amendments, which arose originally from the famous case of the Bedfordshire county council who made what I shall describe for the moment as an initial precept, prior to 1st April, at a lower level than the majority party at that time, which was the Labour Party, wanted. There was then another meeting of the full council at which a supplementary precept was made in order to bring it up to the level at which the majority party had made the political decision that the rate should be set. Both of these events took place before the strategic date of 1st April. As a consequence, two district councils to whom precepts were sent at the old rate proceeded to sit on theirs. And when the supplementary precept went out, two others decided to raise a levy on their ratepayers. So we have a situation where two district councils have not passed on the precept to their ratepayers and two district councils have done so. That has produced the situation of which the noble Lord complains.
But Amendment No. 25 has nothing to do with the validity of the precept. I will come back to that point presently, because it has been implied—although I am sure that the noble Lord did it quite unwittingly—that Amendment No. 25, which deals with the substitution of one precept for another, was somehow connected with the validity of the precept which it replaced. It is, of course, nothing of the kind. Amendment 25, whether or not the validity of any precept is being challenged, gives the power to an incoming council, newly elected at an election after 1st April, which wants to reduce the rate set out in the budget, and indeed the rates of its predecessor, to reduce the rate, if it so wishes. One might have the circumstance in which a Conservative authority makes its appropriate rate and issues its appropriate precepts on 1st April and an election takes place after then, in May. A Conservative council may thereupon be elected and this amendment, Amendment No. 25, gives the incoming council the authority to substitute a new precept and a new rate budget altogether.
On the other hand, it applies only in that way. If, for example, there was a Conservative council up until the election in May which had already made

47
its budget—one would assume on a basis friendly to the diktats of the noble Lord's right honourable friend, the Minister of the Environment—and then a Labour authority was elected in May which wanted to increase the rate or precept, it would not have the power to do so. This is all that the clause really means. It is a way of ensuring almost on a ratchet basis that the rate can always be driven down on a change of political authority but can never be raised.
A political party that goes to the electorate may for perfectly good reasons say that, in view of the circumstances of the population, which it knows quite well; in view of the social circumstances of many of its aged inhabitants; and in view of circumstances relating to housing, roads and other things, it thinks that more should be spent during the forthcoming year. It tells the electorate that that is what it proposes to do because it believes that expenditure within the borough will serve a very useful purpose to the benefit of the majority of the population of that borough. If the party goes to the polls on that sort of programme—having explained it quite clearly, concisely and reasonably—and wins the election, then it will be inhibited by this clause from carrying out the mandate for which it was elected.
I do not call that democracy. The noble Lord, Lord Bellwin, can call it what he likes—but it is a complete violation of local democracy. The noble Lord himself made use of the mandate when his party was returned to power in May. He said that his party had a mandate to do things, and therefore, they could do them; they promised to do them, they were elected to do them, and were going to do them. Is that not so? Why then, if any Labour, Liberal or Alliance party goes to the polls and explains its policies, and succeeds in convincing the electorate that its proposals are more reasonable, wider and better for the locality than those of the Conservative party, will it under this particular clause be inhibited from carrying out what it said it was going to do?
If this clause is carried all the way through, local councils might as well pack up, because there is no further function for them to perform. They are inhibited from obtaining a mandate from the electorate because they know perfectly well that they cannot carry it out. I am quite sure the noble Lord is not really that kind of man. Perhaps owing to the way in which this work was done—to the consultations which had to be held and the legal opinions which were required to be assessed—this clause as set out in its present legal form does not meet the true wishes of the noble Lord. Maybe the noble Lord will wish time for reflection and will be able to say to us, "Now look, my civil servants cannot take me this far. This is really a bit too much. We will come back to it on Report". The noble Lord will readily have seen the manifest way in which a legal diktat can be used to gag the electorate and to gag a political party with which the noble Lord's party happens to disagree.
I pass to Amendment No. 26, which has been dealt with by the noble Lord. There are two ways of dealing with an alleged validity of a particular precept that has been made. The way that has hitherto been used is for an application to be made to the courts and then for the courts to decide, as in a recent
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case, that perhaps part of the precept was invalid. If it is a comparatively small amount the court might decide to declare that part invalid—but in such a way that it did not need the setting-up of a completely new precept, but merely carried over the balance for adjustment in the next period. That seems to be a very sensible way of dealing with it. Now we have a really heavy one. If the precept in any one, small, material particular can be declared upon application to the High Court to be invalid, one is faced with the necessity for invalidating the whole precept, even though the amount involved might be quite trivial.
Consider what that is going to mean for a local authority. It means that it will have to send out a corrective precept. It means that those who act upon that precept and proceed to levy rates on their individual citizens and business enterprises will have to send out an amended precept to each, involving repayment or otherwise of money, and so on. This will be an enormous administrative problem. On balance, I would have thought it was far better to leave the position as it was.
But then, of course, the noble Lord had the Bedford Council position to deal with, and perhaps this was the only way he could conceive of dealing with it, in spite of the fact that his right honourable friend in another place thought that the clause as it stood before was quite capable of dealing with the Bedford situation. Evidently it was not. I do not see why the House should be impaled because of the legal difficulties in which the noble Lord and his department have found themselves. These two amendments—and they are consequential amendments—are not acceptable to us on this side of the Committee. We shall certainly seek to obtain the support of all democrats for the particular repudiation of Amendment No. 25, but we shall of course vote against the others because, as the noble Lord has described them, they are all part of a package—rotten though that package may be.
Lord Bellwin: If I were to use the same kind of emotive language throughout this whole Committee stage, I am sure we would not get as far as we ought to get. I can use words like "rotten package" and all the rest. I do not think it really advances the noble Lord's case, and I do not intend to do that kind of thing. So far as my experience goes, it was always understood that whether you won or lost—I come from an authority where control changed very often—if you gained control when the Opposition had made the rates you stuck with that rate. There are always balances; there are always contingencies; there are always things you can do during the year. That is what all reasonable authorities do, regardless of how far control changes. That is the practicality of it. It is quite wrong to say that, after coming in with a mandate, having said you would spend more on this or that service, you are then prohibited from so doing. The fact is that there is great scope within local authority finance, to shuffle around from one vote head to another; there is freedom to spend more or less on education, housing, social services or whatever you like to do, despite what you might have committed yourself to spending at any moment in time. So there is no case for the emotive argument which the noble Lord makes implying that this is some great new

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suppression of local authority freedom. It is nothing of the kind. It is really a red herring.
What we are really trying to do with these amendments, especially Amendment No. 25, is to clarify the position, which clearly has to be clarified because there is uncertainty and concern. The noble Lord, Lord Bruce, knows that is one of the objects of this particular exercise. The amendments are not intended specifically for Bedfordshire County Council. Many of your Lordships will know that my right honourable friends made a commitment to make these amendments before Bedfordshire took their decision to levy a supplementary rate; the commitment was made during Committee stage of this Bill in another place. They were inspired by the position which arose from their Lordships' decisions in the GLC—Bromley case.
It would clearly be inconsistent with the ban on supplementary rates and precepts if it allowed an authority to make a substituted rate or precept higher than the previous one. It is as simple as that. It is an attempt to make clear what is the position as regards people and companies who have paid a rate in good faith and then find that there is a changed situation; how do they restore the position? That is the point of the clarification. I close on the point I have made; if I were as concerned as the noble Lord, Lord Bruce, is—and I know his concern is very genuine; I appreciate that and he knows that I understand that—but I would really say to him that in practice the real practical possibilities are that all reasonable authorities who are not committed to go from one extreme to another will live with the rates of their predecessors. It was always thus and many in your Lordships' House will surely confirm that this was so. If it was not so, how on earth have they managed in Scotland in the past when there have been changes of control there? How is it that we are only talking about supplementary rates here for the first time; we are told it has been seldom used. So what happened before when control changed hands? It was never such a catastrophic situation before, and it will not be again.
Lord Hill of Luton: If I may help to bring the discussion down to earth, at Second Reading I urged upon the Minister that he should make absolutely clear whether the relevant clauses in this matter were retrospective or not. As your Lordships would expect, he has carried out that undertaking to the full. This is clearly, like it or not, retrospective.
There is just one mercenary element in this that I must mention. If I quote the case of Luton, noble Lords will understand. They have got to return money to the ratepayers, having secured the return of money from the county council raised on its supplementary precept. It is a very difficult problem. There are, of course, those who have paid in full; they are relatively easy. There are those who have begun to pay in instalments; there are those who have not paid at all; there are those who are paying as part of a total weekly payment for a council house. Indeed, there are those who began the year in Luton, during which they paid an instalment or indeed the full rates, and have now moved somewhere else. And there are those who come in during the rating year. It is a very difficult matter, but it has got to be done. Money has been taken from them which by this retrospective decision is now illegal.
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But it is going to cost a lot of money. I understand Luton expects it to cost £50,000 to ascertain who are the potential recipients and what they are entitled to. It is a very expensive business. Who is going to pay? I am not going to destroy the peace that prevails by suggesting where the payment should be made, but it should not be made by Luton ratepayers. Why should they lose £50,000 by this sequence of events? It really is not good enough. If they have no balances they have to cut some services, or borrow, with the consent of the Minister.
I really think that where an authority has in no way misbehaved, has in no way done less than or more than it should have done, it should not be fined to the tune of £50,000. It is not for me to say who should pay, except that there is no decent or respectable case for the ratepayers of Luton to pay this extra money, probably £50,000. So while thanking the Minister warmly for establishing, one way or the other, the retrospective principle, and so clearing away a lot of doubt, I would ask him to give his mind between now and the next stage as to who should pay the additional cost of returning this money, instead of leaving it, as the Bill seems to leave it, for the ratepayers of Luton, who have done nothing naughty, broken no law. Rather than leave it to them I think the burden should be placed elsewhere.
Lord Bellwin: The noble Lord raises a very interesting point and I would like to look into it carefully. I understand that in Brent, for example, only about 300 of the 80,000 ratepayers in the borough asked for a refund of sums paid in connection with the GLC precept. If it should be that Luton and Bedfordshire have a special situation that is a problem for them which involves costs of the kind the noble Lord mentions, I would want to have a look at it and see what the implications are. I do not know what one could do or how to do it, but I certainly accept the point and would want to see exactly what it is. I assure the noble Lord, Lord Hill, that I will do that and see what one is able to report as we go along.
Baroness Fisher of Rednal: I have a great deal of sympathy with what the noble Lord, Lord Hill, has just said. That is aggravated in those local authorities that also had the county precept to repay. They will have to repay the county precept as well as the rate increase that they levied, which places a double burden on those local authorities.
If I could follow on what my noble friend Lord Bruce said, I do not want to get into a long political discussion about it, but does the noble Lord see problems because political parties have different philosophies? I use the example of privatisation, which is the nice word that we use now. Many local authorities say that they will save, for example, £½ million on privatising refuse collection and another £¼ million on privatising something else. An election address that came through my letterbox said that there would be a saving of about £1¼ million on privatisation. Does the Minister see that as a problem? If a local authority goes in for extensive privatisation and saves all the money which we are led to understand it will save, but it then loses at the next election, what it has decided its rate will be

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will obviously take into consideration a lesser amount because of privatisation.
Let us suppose that the Labour Party took control, or it might even be the Alliance, and decided that it did not want to privatise refuse collection—I take that as an example: it might find itself short of £¼ million or £½ million. Does the noble Lord see that as a problem? This follows on from what my noble friend has just been saying. I see it as a serious problem. As the noble Lord has said, Leeds is no different from Birmingham; it swaps and changes like the weather and next year there might be a complete change of party with a different political philosophy.
Lord Bellwin: If it should be that an authority does privatise its refuse collection (to use the example which the noble Baroness gives) and saves £1 million or £¼million—I have heard the figure for Birmingham talked of as £4 million, but I do not know what it is—and if it should be that it provides a satisfactory level of service and saves its ratepayers some millions of pounds, can the noble Baroness really envisage a situation where a party would come back to power and say, "We do not want to make that saving. We want to pay more"? With respect, I cannot see where that would ever be likely to arise.
If the noble Baroness had said that the authority had said that it would privatise and that it would save £X million or whatever, but had not achieved that, then it would be another matter. But if it does achieve it—and although I would love to go into that debate now, in view of the time I do not think that I ought to do so—then I assure the noble Baroness that there would be no problem, because I cannot see how any party could then say, "Well, it is true that we are now saving all this amount of money, but we do not think that we should save it and, therefore, we shall go back to the other system". I do not think that that would be the problem.
Baroness Fisher of Rednal: Perhaps I did not put the case as clearly as I ought to have done. As the noble Lord said, if the services that were being provided were equal, then I would support the noble Lord's case. But more often than not the new service will be a lesser service. I use the example of local governments that have decentralised their housing repairs. They have very good housing repair depots on all their large council housing estates. The tenants are in direct contact with the man who sits in a little shed and the work is carried out. Therefore, there is an excellent service. I was saying that if that excellent service were taken away and privatised, and there is a worse service, there would be difficulty in getting the original service back. I go along with what the noble Lord says in the case where a better service is provided, but I doubt whether that would be so.
Lord Bellwin: I did say that I did not want to go into a whole debate on this matter. However, if I did do so then I would want to say one thing; namely, the that record so far shows in the main that where the kind of service that the noble Baroness mentioned is done by the private sector, the standard of service—I shall say no more—is every bit as good as it was.
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I shall not make the claims for it that others do. But certainly it is as good, so I do not think that we shall have that problem.
But if in the hypothetical case which the noble Baroness put forward there was a diminished service, a worse service—and I think that is the only situation in which her point comes forward—then it would be for the party taking over to say, "Look what our service was before; look what it is now". Therefore, on the merits of the case they would have a very powerful argument. They would then do what I have said has always pertained in the past: they would say, "We will now find ways of doing things within our estimates"—and there are all the balances, the contingencies, the right to vire, the opportunities to manoeuvre. I am sure that they would find a way if they really wanted to do so, but, by Jove!, it would be a very bold authority which was saving money and was prepared to say, "We do not want to save this money"—unless the case was as the noble Baroness said.
Viscount Ridley: Would my noble friend care to speculate whether the promise of privatisation in Birmingham resulted in that city becoming Tory controlled last week?
Lord Bellwin: No, I would not want to speculate because I know somewhere where the promise was made and it did not result in the same thing—would that it had!—but it did result in some gains, for what it is worth.
Baroness David: I should like to go back to the main purpose of these clauses. I believe that the main purpose is to get at Bedfordshire and to deal with the Bedfordshire problem. I do not think that we would have had all these clauses if it had not been that the Government wished to right that situation. They have shown an extraordinary lack of confidence in their own Bill. I read through the Committee sittings in the Commons—the 20th and 21st—which dealt with the Bedfordshire situation. The Minister said with confidence on a number of occasions that the Bill as drafted would deal with the situation. Clearly the Government have decided that it does not do so if they have to bring in these new clauses to cover it. Admittedly they do a few other things as well, but I believe that this is the main thing they do.
There is real danger in having retrospective legislation. The noble Lord, Lord Hill of Luton, has made some of my points for me. There is the complication of claiming back the rates and the trouble that it makes for the rating authority. I am told that all the London treasurers are tearing their hair because of all the time they have to spend on getting the money back because of the judges' decision on the GLC transport case. It is so very difficult practically, and it takes up a great deal of officers' time. Retrospective legislation is a great mistake. The cost of the collection, as the noble Lord, Lord Hill, said, is the district's affair and has nothing to do with the county which is the precepting authority.
Again, this is another change. We have had so many changes. A number of officers have said to me that it is the constant changes which are wearing them out. So many local authority officers are now retiring

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early or at the first possible opportunity because the job is no longer the pleasure that it used to be. They are having to cope with these evermore numerous changes which are very difficult for them. The noble Lord, Lord Hill, has mentioned the difficulties about the many ways in which rates can be collected—instalments, annually, biannually and so on. In my view, these clauses are very bad indeed and I shall have very great pleasure in voting against them.
Lord Hill of Luton: Is the noble Baroness suggesting that the money that has been legally extracted from the pockets of the ratepayers of Luton should not go back to them?
Baroness David: This Bill is not law as yet and there has been a dispute as to whether the Bill as it originally stood would make Bedford's extra rate illegal. It certainly is not illegal at this moment.
Lord Bellwin: I want to repeat what I said before. These amendments are not specifically intended for Bedfordshire County Council. Your Lordships should bear well in mind that my right honourable friend gave a commitment to make these amendments before Bedfordshire made its decision to levy a supplementary rate. To me that is very significant. I shall say no more.
Baroness Birk: We seem to be coming to the end of a long debate on this subject. The outstanding matters that concern us on this side of the Committee are the question of what I would call the one-way democracy—that rates can be lowered but cannot be increased even if a party has a manifesto to do so; the question of the retrospective attitude in respect not only of Bedfordshire but of anywhere else, if the noble Lord so wishes; and the whole question of appeals—that it would now have to go to the High Court, and what was found was pointed out by my noble friend Lord Bruce over the Kensington and Chelsea case.
All this seems to be a mixture of a very illiberal and undemocratic approach. It certainly increases bureaucracy, although I should not have thought that that was the Government's intention. The whole thing appears to have been worked out in an extremely awkward but certainly painstaking way. I can now quite understand why it took so long to get these wretched amendments before us at all. It took a lot of doing and I think that the officials should be congratulated on so doing, although what they did is an unhappy thing. Nevertheless, it is done, and it is there. But it combines a whole package of more bureaucracy, fewer liheral attitudes and an extraordinary attitude towards the courts. This is all in aid of trying to strengthen the Bill. At least we are seeing this in its virgin state and, on this side of the Committee, I do not think that we like it very much at all.
6.22 p.m.
On Question, Whether the said amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 52.

DIVISION NO. 5

CONTENTS

Airey of Abingdon, B.

Ampthill, L.

Alexander of Tunis, E.

Auckland, L.

Allerton, L.

Avon, E.

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Balerno, L.

McFadzean, L.

Belhaven and Stenton, L.

Mackay of Clashfern, L.

Bellwin, L.

Macleod of Borve, B.

Bessborough, E.

Mansfield, E.

Blake, L.

Margadale, L.

Boardman, L.

Marley, L.

Caithness, E.

Merrivale, L.

Campbell of Croy, L.

Mersey, V.

Cathcart, E.

Morris, L.

Cockfield, L.

Mottistone, L.

Constantine of Stanmore, L.

Murton of Lindisfarne, L.

Nugent of Guildford, L.

Craigavon, V.

O'Neill of the Maine, L.

Cullen of Ashbourne, L.

Orkney, E.

Denham, L—[Teller.]

Pender, L.

Ebbisham, L.

Penrhyn, L.

Eccles, V.

Plummer of St. Marylebone, L.

Elton, L.

Enniskillen, E.

Rankeillour, L.

Fortescue, E.

Ridley, V.

Fraser of Kilmorack, L.

St. Davids, V.

Gainford, L.

Sandford, L.

Gormanston, V.

Sandys, L.—[Teller.]

Greenway, L.

Savile, L.

Gridley, L.

Seebohm, L.

Harmar-Nicholls, L.

Skelmersdale, L.

Hastings, L.

Spens, L.

Hill of Luton, L.

Strathspey, L.

Holderness, L.

Sudeley, L.

Hylton-Foster, B.

Swinfen, L.

Kinloss, Ly.

Terrington, L.

Kinross, L.

Trefgarne, L.

Lane-Fox, B.

Trumpington, B.

Lauderdale, E.

Vaux of Harrowden, L.

Lindsey and Abingdon, E.

Wakefield of Kendal, L.

Long, V.

Ward of Witley, V.

Lothian, M.

Willoughby de Broke, L.

Loudoun, C.

Windlesham, L.

Lucas of Chilworth, L.

Young, B.

Lyell, L.

NOT-CONTENTS

Airedale, L.

Kaldor, L.

Ardwick, L.

Kilmarnock, L.

Aylestone, L.

Llewelyn-Davies of Hastoe, B.

Bacon, B.

Balogh, L.

McCarthy, L.

Banks, L.

Mishcon, L.

Beaumont of Whitley, L.

Molloy, L.

Bernstein, L.

Northfield, L.

Birk,B.

Ogmore, L.

Bishopston, L.—[Teller.]

Oram, L.

Boston of Faversham, L.

Peart, L.

Brooks of Tremorfa, L.

Perry of Walton, L.

Bruce of Donington, L.

Phillips, B.

Chitnis, L.

Ponsonby of Shulbrede, L.

Collison, L.

Ross of Marnock, L.

David, B.

Stedman, B.

Davies of Leek, L.

Stone, L.

Elwyn-Jones, L.

Strabolgi, L.

Evans of Claughton, L.

Taylor of Mansfield, L.

Fisher of Rednal, B.

Underhill, L.

Hampton, L.

Wallace of Coslany, L.—[Teller.]

Harris of Greenwich, L.

Houghton of Sowerby, L.

Wells-Pestell, L.

Jacques, L.

Whaddon, L.

Jeger, B.

White, B.

Jenkins of Putney, L.

Winterbottom, L.

John-Mackie, L.

Wootton of Abinger, B.

Resolved in the affirmative, and amendment agreed to accordingly.
[Amendments Nos. 7 to 14 not moved.]
6.30 p.m.
On Question, Whether Clause 1, as amended, shall stand part of the Bill?
Lord Sandford: I do not think I can let Clause 1 go by without making one or two observations on the matters we have been discussing. I think it is true to say that most local authorities have accepted that central government have the right to impose financial constraints on public expenditure, and the great majority of them have succeeded in bringing their expenditure within those constraints. The situation last summer was that the great majority had achieved that, but by the autumn the efforts of the great majority had been completely set at nought by the irresponsibility of a few authorities led by the notorious Greater London Council. It is for that reason that we are having to deal with this sort of legislation, and it really is hypocrisy for the party opposite to pretend otherwise.
I look forward, as we all do, to the introduction of radical and fundamental changes to the financing of local government, and we have just had a good example of the absolute necessity to do away with precepting altogether. That is one of the features. But, in addition to that, it will be necessary before local Government can be made to work again properly for the irresponsible element that were responsible for what happened in the GLC, and have just been responsible for what has just happened in the Bedfordshire County Council where a combination of Liberal and Social councillors overturned the decision of the main budget meeting of the council a fortnight later, to be stopped by the political parties. We shall never get any progress until that kind of thing is stopped.
Lord Bruce of Donington: I really think I have to respond to the noble Lord who has just spoken on clause stand part. It is all very well for members of any political party to declare that the actions of their opponents, or any section of their opponents, are irresponsible. I will not go into the merits of the GLC case for the moment, save to point out that the mandate that the GLC obtained for what it did was quite decisive and perfectly open.
Furthermore, members of the legal profession, who tend to be in profusion, and deservedly so, in your Lordships' House, gave conflicting advice on this. It is not as though the GLC were not advised with the best quality legal advice that could be obtained as to the legality of what they did. I must tell the noble Lord that at any rate among the legal circles with whom I have the privilege of associating from time to time there is some dubiety as to where the law really stands anyway following the particular judgment to which he refers. Therefore, I do not think that we ought to talk in those terms.
The whole series of amendments that we on this side of the Committee have endeavoured to persuade your Lordships to agree with has been put forward with one aim only, and that is to endeavour to restore responsibility to local authorities, comprising the elected representatives of the people—the responsibility for carrying out the policies on which they were elected and for raising the funds for that purpose. Sometimes I think that all of us—I include myself in this—tend to take a hostile attitude towards rates. I had a rate demand dropped in my letter box a while back the contents and amount of which frankly appalled me. Therefore, as a person who has to pay out of his own pocket a rate demand—and I perhaps ought to inform
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your Lordships that I have a personal interest in this in that I pay rates within the Royal Borough of Kensington and Chelsea, and that from what I can gather I am paying at about roughly double the rate of the average for Kensington and Chelsea—my immediate response to it was to say, "Well, hang it, this is a wee bit high".
Then I endeavoured to analyse the services that we all, as ratepayers, get from our local authorities. I believe the average weekly rate payment in Chelsea is some £13, which means that the lowest must be somewhere in the region of about £6 or £7, and the higher ones, including regrettably myself, pay roughly double the average, or possibly even more. But on looking through the services provided by the local authority—and the Royal Borough of Kensington and Chelsea were kind enough to send me a copy of how they spent their money and what proportion they spent on the police, magistrates, probation and after-care—I said to myself, "Well, after all, is the police service in London, and in my own particular borough, satisfactory? I am bound to say it is, and I am bound to say that I derive some personal benefit from it".
I am talking only on my own account, but I can go all the way through and say that possibly the better-off people in London, or elsewhere in the boroughs, are probably spending less a week on their rates than they pay for a perhaps once a week visit to a restaurant for a dinner at current prices, and yet they complain. We have no business to complain. The benefits that the ordinary ratepayer gets from his local authority—and I speak without reference to any party in particular—are pretty good value for money anyway.
I know we are coming at a later stage in Part III of the Bill to those clauses that deal with audit, and checking for waste and so on. So be it. We all desire to see that. But sometimes when we are discussing rates I think that we ought to remember that all of us, at whatever income level we are and whatever rates we pay, are in any event getting very good value for money indeed. It is high time that the snide attacks, the press attacks—from editors who probably get twice as much on their expenses allowances as they even pay on rates—on all public expenditure, as being essentially something that is bad and anti-social, stopped.
It would be far better if, instead of regarding rates as some kind of despicable burden which everybody pays with reluctance—and of course nobody likes shelling out money of any kind, wherever one goes—one kept the matter in proportion regardless of the inequalities and inequities that exist within the existing rating system. As I say, the value as a whole is good. Our regret is that the liberty of local authorities and their councillors to react to the moods, wishes, desires and needs of their citizens as they see them are being eroded by the Bill, in particular by this clause. We very much regret that and assure the Minister that we shall return to the matter again.
Viscount Ridley: I have not been able to take part in the debates on this part of the Bill but I feel strongly that the Government are right to abolish the supplementary rate and I am glad that Clause 1 does so. I equally strongly support my noble friend Lord Sandford in that the time has come to end the system of precepting. It is responsible for the troubles of

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Luton and many other places and it must be the Government's aim now to move as soon as possible to some system whereby each tier has its own source of finance.
Baroness Stedman: The debates today have ranged wide and over many subjects, but I feel that we cannot let this part of the Bill pass without reminding noble Lords opposite that there is still considerable disquiet among local authorities and their members about the effects of the Bill and the fact that although very few of them have used the supplementary rate, there has always been that safety net there. I and my colleagues in the SDP and the Alliance want to see local authorities budget carefully and prudently. but Governments do not always interpret what they see in the crystal ball in the right way. They do not always get their answers right about what will be the level of inflation, what will be the possible salary and wage rises or what will be the material costs in which local authorities must deal, and until now the local authorities have had the safety net of the supplementary rate, albeit very few of them have had to use it. The Bill as drafted allows the Government to get their sums wrong, but if the local authorities also get them wrong through following the Government's advice, they no longer have the guaranteed safety net of a possible supplementary rate under them to get them out of difficulty. I believe there is still a case for the availability of the supplementary rate to be retained.
Clauses 1 and 2 should be deferred until 1983, and I am still unhappy about the new clauses which the Government have just carried in a Division because the retrospective element of legislation is still in the Bill. We should not let the Bill go as it is; we should make our protest, although it will make no difference to the Bill and this part will, no doubt, go through. The alternative which the Government are suggesting—of special borrowing powers—goes against the established principle in local government that the relevant finance should be in the same operation as the determination of the expenditure. If that is no longer to be allowed, it involves central Government's interference in local affairs, and that is regrettable.
Lord Bellwin: I do not want to go yet again round the track we seem to have been circling for the last few hours. Perhaps I should comment, on the general philosophical points, that as the Committee will be aware, I by no means see the bogies that concern noble Lords opposite. There is no shortage of precedent; the Scottish situation does not throw up the kind of concerns that have been expressed today. The supplementary rate, as has been said, was hitherto almost unknown, used only in the last year or so. It was never even contemplated before and there was no need for it, despite the fact that there have for years been situations where pay and prices have been quite different from what successive Governments forecast they would be. Despite all of that, authorities did not have to resort to a supplementary rate, nor in my view was it necessary.
It becomes necessary not as part of something you did not expect or foresee but when you are determined and massively to increase your expenditure; as I say, not because events have overtaken you but
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because that is your positive decision. That is how we have, for the first time—or in practical terms for the first time—come into this whole area, which has become such a burden to so many people. It cannot be wrong, in my view, to protect people from it, not least businesses, and it is at our peril that we simply shrug off business and commerce as being of little consequence. If we are genuinely concerned about employment and jobs, as we all say we are, we cannot turn away from the fact that in a survey of 500 companies in London, three-quarters of them said they reduced, closed down, or moved out because they could not afford the rates. How many retail people are saying the same? That represents jobs too; people work in shops just as they work in other places. We must therefore be concerned about what happens to rates, and simply to impose a supplementary rate on people who are not anticipating it can be devastating in its impact, and unhappily the number of jobs lost for that reason is there to be seen if one wants to analyse the figures.
As I said at the outset, we have been round this track a few times already today. Clearly there is a a difference of view. I do not see the sinister aspects of what we are proposing. On the contrary, it is protective of people and need not be the problem of which noble Lords have spoken. What my noble friend Lord Ridley said about precepting is all part of the debate in relation to local government. Some would say the debate is only just beginning. That is for another day, and I urge support for the clause.
Clause 1, as amended, agreed to.
Baroness Stedman Baroness Stedman moved Amendment No. 15:
After Clause 1, insert the following new clause:
"Duration of Part I of this 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."
The noble Baroness said: I shall be brief because we have not got far with the Bill yet, though we have been at it a long time. The amendment is straightforward. It simply asks that the duration of Part I shall be for 12 months from the time the legislation comes into force, and it gives the Government, as the noble Baroness, Lady Birk, was asking earlier, the opportunity to renew Part I and look at it to see if it is really working, and that can be done by statutory instrument subject to the affirmative procedure.
The Secretary of State and his Ministers have said in another place that it is an interim measure. Local authorities and their associations do not like the Bill, but they might be a little happier about it if it were treated as legislation lasting for only one year, and would then be reconsidered. It would also enable the Government to decide what action they are proposing to take on the rating system and for those proposals also to be considered by Parliament as a whole. Many of us feel that the legislation would be better introduced as an interim measure and not as primary legislation for all time. Parliament would then have an opportunity to review these major changes annually,

59
and the amendment would allow for just that. I beg to move.
Lord Bellwin: We debated an amendment similar to this on Report and I am not sure I can add a great deal to what I said then, except to repeat that this is in no way a temporary expedient. Nor is it intended to avoid the need for the fundamental reform of the domestic rating system to which, I repeat, we are committed. The ban on supplementary rates and precepts could indeed, therefore, be an interim measure in the domestic sector, pending our proposals for reform. But as regards the commercial and industrial sector, where rates will remain for the foreseeable future, the ban will continue.
I hope it is clearly understood that authorities remain free to plan their expenditure and initial rate levies as they think fit. The effect of the ban on suplementaries is simply and solely to oblige them to live within their means once they have set the rate or precept for the year. That is what it is about. It is not in any way as onerous as noble Lords opposite feel, and I therefore hope the noble Baroness, Lady Stedman, who knows so much about the whole scene, will, at least in time if not now, say, "It really was not as bad as we thought".
Baroness Birk: I should like to support the noble Baroness, Lady Stedman, in what she said on both the amendment and Clause 1 stand part. The Minister is uite right in saying that we had a debate on the earlier amendment that I moved, but the present amendment involves a slightly different approach to the matter, and perhaps the Minister will consider that it has a greater attraction for him and for the Government, since it would involve a statutory instrument, rather than legislation having to be renewed each year. The amendment makes a very specific suggestion. It lays down a way of dealing with the matter. It makes it quite clear that the statutory instrument would have to be approved by resolution of the House of Commons. It proposes the use of the statutory instrument, which is a much less cumbersome way of doing things than having to bring in new legislation in order to change, or get away from, old legislation.
I must reiterate what the noble Baroness said about a safety net. This is the point that we have been trying to get across, but unfortunately it does not seem to have made any impact at all. It is so important that authorities should know that there is this safety net for use where needed. It need not be used all the time; it has not been used all the time in the past. But there is a feeling among local authorities that their safety net is being taken away, that they are being stripped to the bone, and that they are not being trusted at all. As so many of us have said during the many long hours spent on amendments this afternoon, this feeling is causing so much anguish among local authorities.
It is not good enough merely to point out that some authorities behave irresponsibly. The noble Lord who said that is not in his place at the moment, but I would say that I suppose there are authorities that behave irresponsibly, there are individuals who behave irresponsibly, there are businesses which behave irresponsibly, and there are Government departments
60
which sometimes behave irresponsibly; but because of that there is not imposed an overwhelming rule, thus making it impossible for anybody to have any breathing space. We have seen all the way through the Bill what amounts virtually to a complete shutdown, and that is what we all find so objectionable. We have tried to make the point by many different means and proposals, some of which I should have thought the Government would have been able to consider. We have now reached the stage after the first clause of the Bill and have got nowhere; it is very sad.
Baroness Stedman: I have listened to what the Minister has said, and I am grateful to the noble Baroness, Lady Birk, for her support. I really consider that I must test the feeling of the Committee on this amendment. Members on the other side of the Committee know of the disquiet that there is on this side about the effects of the Bill and the clause. Surely it is not too much to ask that the Government come back in a year's time with a statutory instrument, and I should be delighted if I were able to be the first to say to them, "It has worked, we were wrong, and you were right". I now say please, let us have one more chance, let the Committee agree that the Government should come back with a statutory instrument for affirmative resolution in both Houses. Then we can be quite sure that we have got it right. I am sorry, but I must ask the Committee to vote.
6.54 p.m.
On Question, Whether the said amendment (No. 15) shall be agreed to?
Their Lordships divided: Contents, 46; Not-Contents, 67.

DIVISION NO. 6

CONTENTS

Airedale, L.

Jenkins of Putney, L.

Aylestone, L.

John-Mackie, L.

Bacon, B.

Kaldor, L.

Banks, L.

Kilmarnock, L.

Beaumont of Whitley, L. [Teller.]

Llewelyn-Davies of Hastoe, B.

Bernstein, L.

Lloyd of Kilgerran, L.

Birk, B.

Oram, L.

Bishopston, L.

Perry of Walton, L.

Boston of Faversham, L.

Phillips, B.

Brooks of Tremorfa, L.

Pitt of Hampstead, L.

Bruce of Donington, L.

Ponsonby of Shulbrede, L.

Chitnis, L.

Reilly, L.

Collison, L.

Ross of Marnock, L.

David, B.

Stedman, B. [Teller.]

Davies of Leek, L.

Stone, L.

Elwyn-Jones, L.

Strabolgi, L.

Evans of Claughton, L.

Taylor of Mansfield, L.

Fisher of Rednal, B.

Underhill, L.

Hampton, L.

Wallace of Coslany, L.

Harris of Greenwich, L.

Wells-Pestell, L.

Houghton of Sowerby, L.

White, B.

Jacques, L.

Winterbottom, L.

Jeger, B.

Wootton of Abinger, B.

NOT-CONTENTS

Airey of Abingdon, B.

Avon, E.

Alexander of Tunis, E.

Balerno, L.

Allerton, L.

Belhaven and Stenton, L.

Ampthill, L.

Bellwin, L.

61

Birdwood, L.

Lindsey and Abingdon, E.

Blake, L.

Long, V.

Boardman, L.

Loudoun, C.

Caithness, E.

Lyell, L.

Campbell of Croy, L.

McFadzean, L.

Cathcart, E.

Mackay of Clashfern, L.

Cockfield, L.

Mansfield, E.

Constantine of Stanmore, L.

Margadale, L.

Marley, L.

Craigavon, V.

Mersey, V.

Cullen of Ashbourne, L.

Morris, L.

Denham, L. [Teller.]

Mottistone, L.

Eccles, V.

Murton of Lindisfarne, L.

Elton, L.

Orkney, E.

Enniskillen, E.

Pender, L.

Fortescue, E.

Penrhyn, L.

Fraser of Kilmorack, L.

Plummer of St. Marylebone, L.

Gainford, L.

Gormanston, V.

Rankeillour, L.

Greenway, L.

Ridley, V.

Gridley, L.

St. Davids, V.

Hailsham of Saint Marylebone, L.

Sandford, L.

Sandys, L. [Teller.]

Harmar-Nicholls, L.

Savile, L.

Hastings, L.

Shannon, E.

Hill of Luton, L.

Skelmersdale, L.

Holderness, L.

Somers, L.

Hylton-Foster, B.

Trefgarne, L.

Kinloss, Ly.

Vaux of Harrowden, L.

Kinross, L.

Ward of Witley, V.

Lane-Fox, B.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
Lord Denham: I think this is probably a suitable moment at which to break off this Committee stage before going on to the next one. For the convenience of your Lordships, perhaps I could suggest that we should not come back to this particular Committee stage before eight o'clock. I beg to move the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Social Security and Housing Benefits Bill
7.3 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): 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 Trefgarne.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AMPTHILL in the Chair.]
Clause 29 [Up-rating of needs allowances]:
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 29:
Page 23, line 45, leave out paragraph (a).
The noble Lord said: I understand that in relation to the previous Bill the Committee has adjourned during pleasure, but so far as I am concerned it is during displeasure because it is regrettable that the Committee
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stage of an important Bill like this should be the odd job done during the dinner break for noble Lords. However, I shall refrain from calling a Division so as not to upset noble Lords while they are having their meal.
This amendment is in fact a probing amendment. I passed that news on, and I hope that Government Ministers received the information. It goes back to Clause 28. Subsection (4) of Clause 29, which relates to the uprating of needs allowances following a review period, states that the Secretary of State must lay a report before Parliament explaining why he is not awarding an appropriate increase in the needs allowance, if that is his decision,
"unless in his opinion the amount by which those elements will not have retained their value or, as the case may be, the amount by which the increase is less than the appropriate amount is inconsiderable …".
This would mean that if the Secretary of State felt that a 1 per cent. or 2 per cent. rise was inconsiderable he could avoid having to make it, and need not explain himself to Parliament. Such a decision would effectively erode over a period of time the difference between the supplementary benefits scales and the needs allowance reducing the rebates available.
While I fully understand that there is no statutory obligation on a Government to operate the needs allowance in any case, the custom has always been for it to rise by the same amount (not percentage) as the retirement pension. I make no bones about this because Age Concern have raised the issue. The point itself was raised in another place, but no satisfactory response was received from the Minister, who so far had managed to get away without saying anything about this aspect either in Committee or on Report. Looking at the Bill it seems to me that there is a complete get-out of parliamentary protection, because the Minister, if he thinks an increase in inconsiderable, need not bother. This is something that worries a number of people very much indeed. As the Minister in another place "dodged" the issue in Committee and on Report, I am now hoping that the noble Lord will be able to come forward with something a bit better than what happened in another place. I beg to move.
The Earl of Avon: I think I can set the noble Lord's mind at rest, and I shall try to do so. The Government freely put down what is now Clause 29 in the other place to make provision for the uprating of housing benefits, and I am sure the Committee will understand why we could not mortgage the future by making provision for automatic index-linking of the needs allowances. But the Government freely put down a provision that where the Secretary of State considers that some or all the needs allowances have not retained their value over the course of a year, but decides not to increase some or all allowances, or only to increase some or all of them by part of the amount required to restore their value, then he must report his reasons to Parliament. I feel that this is surely what the Opposition would most wish us to do, and it is in fact what this clause does do.
The noble Lord may perhaps have misunderstood the clause. Deleting it will not oblige the Secretary of State to uprate the needs allowances each year. All

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that will happen is that the Secretary of State will no longer have to table a report if he decides no increase is appropriate. I hope that that has satisfied the noble Lord and that he will be able to withdraw his amendment.
Lord Wallace of Coslany: It satisfies me to the extent that I shall have something to read in Hansard tomorrow; and, having read that, I shall decide what action to take on Report. But, at this stage, and in the circumstances under which we are regrettably operating, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Wallace of Coslany Lord Wallace of Coslany had given notice of his intention to move Amendment No. 30:
Page 24, leave out line 27.
The noble Lord said: This amendment was dealt with together with my Amendment No. 25. I spoke about it then and I do not intend to do so now, so I will not move it.
[Amendment No. 30 not moved.]
Clause 29 agreed to.
Clause 39 [Local schemes]:
Lord Kinross Lord Kinross moved Amendment No. 31:
Page 25, line 38, at end insert—
("( ) Without prejudice to the generality of the powers conferred by subsection (1) above, a variation under that subsection of the statutory scheme, may provide that in ascertaining for the purposes of a rate rebate, a rent rebate and rent allowance the weekly income of a person to whom this Part of this Act applies and his spouse, if any, there is a total disregard of war disablement pension and war widows pension.").
The noble Lord said: I beg to move the amendment which stands in my name and in that of Lord Haig, who had hoped to be here tonight but who, in his capacity as President of the Royal British Legion (Scotland), is attending a function in Glasgow at the opening of an ex-servicemen's sheltered housing scheme.
The aim of this amendment is to re-enact certain of the provisions of existing legislation concerning the total disregard by local authorities in Scotland of war disability pensions and war widows' pensions in assessing entitlement to rates and rent rebates and rent allowances. The current legislation is contained in two Scottish Acts. The first is the Housing (Financial Provisions) (Scotland) Act 1972, Section 18 of which authorises local authorities to make variations in what the Act describes as their "model" schemes for rent rebates and allowances; and the second is the Local Government (Scotland) Act 1973, Section 114 of which authorises local authorities to make variations in what that Act describes as their "standard" schemes for rates rebates. Both sections have a subsection in substantially similar terms, to the effect that, in assessing the income of a person to whom the scheme applies,
"there is a total disregard of war disablement pensions and special war widows pension".
There is a definition of "war disablement pension" and "special war widows" in both statutes, but suffice it to say that the term "special war widow" includes a war
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widow and is also wide enough to include a serviceman disabled or killed in the service of his country in the past or the future; and wide enough to include Falkland Island casualties.
The reason behind this authority to disregard war pensions is that these are paid in compensation for loss of the amenities of life and not as a supplement to income. For the same reason, war pensions and war widows' pensions are not subject to income tax. Perhaps I should declare that I am myself a war pensioner, although I am not in receipt of a rent or rates rebate, as yet. Before 1972, a local authority had a general discretion to decide what, if any, part of a war pension to disregard and certain of the more enlightened local authorities disregarded part of the pension and, some of them even the whole, sometimes at the request and with the encouragement of the British Legion. But it was only after the specific authority contained in the 1972 and 1973 Acts to operate a total disregard was promulgated, that local authorities made wide use of the power to do so.
Today, the position in Scotland is that all nine regional, three island and 53 district councils operate a total disregard, as do five new town development corporations and the Scottish Special Housing Association. I am confident that this situation, so advantageous to the war pensioner and the war widow, would not obtain were it not for the specific reference to total disregard in the two statues. Certainly, their existence very greatly helped the Royal British Legion Scotland to bring to the attention of local authorities the very special position—and it is a very special position—of those ex-servicemen and ex-servicewomen who suffered wounds or disease in two world wars and later. We must not forget that, even now, the services are suffering casualties in the South Atlantic, some of whom may be glad of the total disregard of rates should they be looking for a rate rebate pension in years to come.
The concern of the Royal British Legion Scotland is that the 100 per cent. disregard should continue to be brought to the attention of local authorities—which was why we wanted to see the appropriate subsections of the two statutes carried forward into this Bill. But, alas! we find that, instead of being reenacted, they are actually repealed by Clause 28(5)(b) of the Bill. Surely, this is a retrograde step. It is one which my amendment seeks to remedy. It has been said by the Minister of State for Social Security and the Disabled that, while he appreciates the concern of the British Legion that authorities in Scotland should continue to operate a total disregard, he does not accept that a specific reference to it in the new legislation is necessary. His reason is apparently that under the existing provisions Scottish local authorities cannot vary their local schemes without the consent of the Secretary of State and that, under the new scheme, no such consent is required. This, to my mind, is quite irrelevant, and successive Secretaries of State for Scotland have always willingly given their consent. It is further said that this amendment is unnecessary because local authorities will have the discretion anyway.
But a new generation of councillors is emerging who know nothing of war and of its aftermath of suffering. The Legion cares for ex-servicemen from the First World War whose average age is 82 and from

65
the Second World War whose average age is 64—and much younger for subsequent conflicts. The need to keep the needs of the pensioners before councillors will therefore still subsist well past the year 2000. I suggest that for this reason it is desirable that specific attention should be drawn in the Bill to the war pensioners and war widows. My amendment seeks to do this I beg to move.
Lord Campbell of Croy: May I support my noble friend? He has very ably stated the purpose of his amendment and I am very glad that he and my noble friend Lord Haig have enabled this matter to be clarified. I know that the British Legion are much concerned about these matters, because they have been in touch with me about them in my capacity last year as chairman for Scotland of the International Year for Disabled People. As my noble friend Lord Kinross has said, parts of the 1972 Housing (Financial Provisions) Scotland Act and of the 1973 Scottish Local Government Act are being repealed; and they are the ones which, in Section 5, are described as entries relating to rent rebates and rent allowance subsidies. I, as Secretary of State for Scotland, introduced both those Bills and was responsible for them going through Parliament and, in particular, the other place, where I was at that time.
I made certain that there were the proper disregards for war disabled pensioners. I introduced rent rebates and allowances into Scotland for the first time ever. in that 1972 Bill, which became an Act. There may be some satisfactory explanation which the Government can give us. I entirely understand that it may not be necessary to put words in the Bill, as my noble friend has suggested, but I think we need this to be carefully explained. Certainly, there will be numbers of people in Scotland who will need to be satisfied that the Bill continues the disregards and also makes sure that all local authorities concerned are informed about these disregards. I must declare an interest in case I have been successful in disguising the fact that I myself am in the category of 80 per cent. war disabled—although I do not ever intend to apply for a rebate or allowance myself.
I am sure that the Government are not intending to take away any benefit which war disabled people have been eligible for. It is not an expensive matter. The war disabled are a small and diminishing band of people in our population. We sincerely hope that that will continue to be the case and that there will be no future world war which would add to their numbers, and so we hope that this trend will continue and that it is a known and comparatively small part of our population who are affected. But T must reinforce what my noble friend has said. That is that, with the onset of old age, their problems and their situation have become more serious. The very large majority of the people we are considering are over 60, many in the late 60s and 70s. Their state is not improving either medically or in other ways.
Knowing that this is a Committee stage and that one can speak more than once, I will not say any more now. I think the situation has been described very well by my noble friend. I will await the explanation of the Government and then, depending upon that
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explanation, will add any points that may need to be made.
The Earl of Avon: Perhaps it would be helpful if I intervene now. Clause 30 carries forward authorities' discretionary powers to make, at their own expense, more generous local rebate/allowances schemes than the provisions of statutory schemes. May I first make it clear to the Committee that the Government wholeheartedly agree with my noble friends that authorities should be able, as now, to disregard war pensions completely when they assess claimants under local schemes. Nothing in the housing benefit scheme will prevent authorities from doing so. In fact, local authorities will have power under Clause 30 to frame more generous schemes within their areas which disregard war widows and disablement pensions completely.
What concerns the Government about the amendment is, first, that it is both unnecessary and declaratory and I know that this kind of legislation disturbs some noble Lords. Secondly, we do not think that this kind of provision is the most effective way of achieving the aim of my noble friends, that is to bring the power of disregarding war pensions to the attention of authorities. So it is a question of method and perhaps I may explain.
First, I said that the amendment is unnecessary. That is because Part II of the Bill essentially sets out enabling powers to set out the details of the housing benefits scheme in regulations. The enabling powers are sufficiently wide to provide for total disregards of war pensions so no further primary legislation is required.
My noble friends cited a precedent for their amendment, the existing Scottish legislation; but, with respect, I hope to show that is not relevant. The current legislation was framed in this way—as my noble friend Lord Campbell of Croy told us—because Scottish authorities must seek the Secretary of State's approval before making enhancements to the national schemes. In England and Wales prior permission is not required. That is why the Scottish provisions at present give authorities power to disregard war pensions—otherwise permission would be required in individual cases. We have decided for housing benefits to bring Scotland into line with the simpler English and Welsh provision. They will no longer need the Secretary of State's permission to make local modifications, so no general legislative clearance is required.
My noble friends have argued that, despite the points, the amendment is still desired to draw the provision to the attention of authorities. They have indeed advocated this approach in preference to the alternative proposed by my honourable friend the Minister for Social Security that attention should be given to this point in the major advisory circular that will be issued by DHSS in connection with the new scheme. My honourable friend the Minister suggested his approach because this seems to be the most effective way to bring the matter to the notice of authorities. Few officials are likely to study the primary legislation when it only gives enabling powers. They will, rather, concentrate on the regulations and the parallel guidance issued by DHSS. That is why my honourable friend made his proposal—he wanted the provision to get the widest publicity. I am sure all those noble Lords

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who have experience of local government matters will agree that clerks and other officers dealing with rebates and allowances will look to the circulars for guidance rather than to a subsection of the Act.
In addition, if authorities did not wish to make this provision, I fear that they are just as likely to ignore declaratory phrases in an Act as they are advice in a circular. The special nature of war disability and war widows' pensions has always been recognised by the rent and rates assistance schemes. A partial (£4) disregard is included in the schemes. This disregard will be carried forward into housing benefit. I know how strongly my noble friends feel about this, but I hope I have reassured the Committee that the Government are anxious to do the best by war pensioners. We believe that the amendment is unnecessary to this end and I would therefore ask my noble friends to consider my remarks.
Lord Campbell of Croy: Perhaps I should speak before my noble friend decides what to do and closes the debate. I am grateful to my noble friend for giving that explanation of the Government's reason for not including specifically the wording or something like it that appears in the Scottish legislation. For my part, I should like to examine what my noble friend on the Front Bench said and ask advice from legal experts and those who are concerned about this matter in Scotland. So I hope my friend may decide not to press his amendment at this stage.
May I give one warning. It was stated at one period when this matter was being discussed that the Minister for the Disabled would send a letter or circular round to local authorities. The Minister for the Disabled appears to have functioned only for England. He may function for Wales too, I do not know. There was a debate last year in another place on the whole question of the International Year for Disabled People during which the Minister for the Disabled announced a competition. Everybody taking part in that debate—and certainly the newspapers—thought that it was a competition for the whole country. I was a little suspicious because the judges' names were given and there was not a single one from north of the border. When I inquired in correspondence, the Minister, Mr. Rossi, kindly replied but said that of course I was right. It was limited to England. I do not think that it even covered Wales. I am sure nobody taking part in the debate realised that at the time.
In the same way, I suggest that if the Minister for the Disabled is going to write to local authorities, he should remember that means either he has to extend his normal remit as DHSS Minister dealing with health, and also take in other local authorities in the United Kingdom or else his counterparts, including the Parliamentary Under-Secretary concerned in the Scottish Office and the other Ministers in the other parts of the United Kingdom, will need to do the same. Otherwise the same trap could be fallen into as was in that debate in another place.
Lord Kinross: Having heard the Minister's reply, for which I am very grateful, I concur with my noble friend Lord Campbell of Croy in saying that we should like to take this amendment away and consider his
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reply in greater detail. There is one point that I should like to make. He referred to a circular to be sent to all local authorities—in Scotland presumably as well as in England—advising them of the necessity to consider 100 per cent. disregards for the war pensioners and war widows. The objection to that is the same as I have to not carrying this provision forward into legislation, because councillors change. We have a generation now of councillors who were not in the last great war and some of them do not have very much sympathy therefore for war pensioners, and that situation will increase. Circulars get pigeon-holed. They get thrown away and they get filed, whereas if the provision is in an Act of Parliament, it is less likely to be overlooked. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 30 agreed to.
Clause 31 agreed to.
Clause 32 [Subsidies to authorities]:
7.28 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 32:
Page 26, line 22, leave out from ("be") to end of line 24.
The noble Lord said: This is a probing amendment. This should be fairly simple for the Government to answer, if in fact they have the information to give me in an answer. The purpose of the amendment is to receive from the Government information on what basis local authority costs will be calculated. Will the total be aggregated on a national basis or shared among local authorities? If so, on what basis would the division be made—on the total amount the authority pays out or the number of cases dealt with? On the other hand, would it be the amount paid in housing benefits together with administrative costs? This is something that everybody—in the local authority world anyway—is waiting to find out.
In another place, indication was given by the Minister that negotiations were proceeding with local authority associations and therefore my question to the noble Earl and the Government is this: Have these been finalised and, if so, what is the position? I beg to move.
The Earl of Avon: The Government's position is that local authorities will be fully compensated for additional costs incurred as a result of the provisions of this Bill. That remains our intention and I have no hestiation in repeating that pledge. The order to be made under Clause 32 in due course will ensure that authorities receive full reimbursement not only for the extra benefit costs arising from the new scheme but also for any additional expenses in administration which they need to incur in dealing with the extra work which the new scheme brings them. This clear undertaking could be no more generous than this. Where authorities' costs are forced up by this Bill, they will be met in full by central Government. But nothing in the Bill provides any justification for increasing the rate of subsidy for existing cases or for those cases which will be dealt with by an authority irrespective of the new scheme.

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Rebates and allowances granted in these case already attract a central Government subsidy of 90 per cent. and administration costs are reflected in the rate support grant arrangements. There can be no question of transferring responsibility for the balance of expenditure to the Exchequer. In terms of benefit costs alone, this amounts to about £100 million for 1981–82, and it would not be right to transfer to the taxpayer the financial stake which the ratepayer has always had in schemes of housing assistance administered to the benefit of the local population. Without this degree of commitment, authorities will simply become agents of central Government in the matter and it does not seem right to down grade their standing in this way.
There is an important distinction between the new responsibilities of authorities and those they have held for the last 10 years. The former represents a duty transfered to them from central Government and the supplementary benefits scheme; and it would clearly be unreasonable to expect authorities to take this on without full recompense. But in the latter case there is no such justification and the Government cannot contemplate an additional charge. I hope I have satisfied the noble Lord and that he will feel able to withdraw his probing amendment.
Lord Wallace of Coslany: I thank the noble Earl for the extremely lengthy reply he has given. I think he has given me a little more detail than was given in another place. That, after all, is something that we all expect from this Chamber. Therefore, I will beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 agreed to.
Clauses 33 to 35 agreed to.
Clause 36 [Other supplementary provisions]:
The Earl of Avon The Earl of Avon moved Amendment No. 32A:
Page 31, line 6, leave out ("the use of furniture or").
The noble Earl said: This amendment simply tidies up the legislation following the announcement of my noble friend Lord Bellwin during the Committee debate last week that furniture charges would become eligible for help under housing benefits. Furniture charges are not assisted under the current rebate and allowance schemes and to save authorities granting rebates or allowances having to do a second assessment of the ineligible furniture charges where the rent has already been assessed for rent registration purposes rent officers and rent assessment committees are required to note separately in the rent register:
"amounts fairly attributable to the use of furniture".
Now that the Government have decided to make furniture charges eligible for housing benefit, these charges will no longer be noted separately on the rent register. This amendment simply removes the requirement. I beg to move.
Lord Wallace of Coslany: I think I can be satisfied with the Government's amendment because, if I remember correctly, it followed an undertaking given by the noble Lord, Lord Bellwin, who gave me a very broad hint of possible action later. This appears to be
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the Government's reply, which is extraordinarily good because it is a starred amendment; so they have come to a conclusion very quickly. What is the cost of this? I suppose it would be about £1 million: have the Government estimated it?
The Earl of Avon: I have not got that figure with me but I am told that the amount suggested by the noble Lord is correct.
Lord Wallace of Coslany: I am very grateful to the noble Earl, and also to the noble Lord, Lord Bellwin.
On Question, amendment agreed to.
Clause 36, as amended, agreed to.
Clause 37 [Sick pay to count as remuneration for principal Act]:
Lord Cullen of Ashbourne Lord Cullen of Ashbourne moved Amendment No. 33:
Page 32, line 2, at end insert—
("(2) In any case where regulations made under subparagraph (1) above have the effect of requiring a registered friendly society (within the meaning of the Friendly Societies Act 1974) to make amendments to its rules, the amendments may, notwithstanding any provision of those rules, be made in accordance with the procedure prescribed by regulations made by the Chief Registrar of Friendly Societies for the purposes of this paragrph.
(3) Regulations made under sub-paragraph (2) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.").
The noble Lord said: This is essentially a technical and beneficial amendment. The regulations which it will allow would enable friendly societies to change their rules to comply with regulations made under Clause 37(2) without going through the elaborate procedures which such a change would normally require.
Clause 37 brings into the definition of "earnings" liable for contributions sickness payments made to employees, where the secondary contributor (normally the employer) has paid towards their provision. Typically these would be where an employer has made arrangements, by taking out a policy with an insurance company or setting up a trust fund, for an employee to receive payments when he is off sick.
As these payments will attract liability for contributions, the secondary contributor will need to know about them so that he can calculate the contributions due. This may also involve aggregating the sickness payments with any other earnings paid for the same period before working out what contributions should be paid. So Clause 37(2) enables regulations to be made prescribing how and through whom these sickness payments are to be made. This will enable the Secretary of State to require them to be routed through the employer, who will then be in a position to calculate contribution liabilities.
Clause 37(2) has been generally welcomed by the friendly societies, who are involved in some of the schemes which it will catch. But to comply with a statutory requirement to route payments through employers they would need to change their rules. This is a long and expensive business, involving consultation with all their members. So a simplified procedure for changing their rules specifically to comply with regulations under Clause 37(2) would obviously help

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them, and this is what the Amendment would make possible.
Regulations made under this provision could enable the rule change to be made by the approval of the societies' committees of management, subject to endorsement by the Registrar of Friendly Societies. There is a precedent for this, where the change in rules was needed purely to comply with a statutory provision. The Amendment would therefore be of real help to friendly societies and would not have implications for other bodies. I beg to move.
On Question, amendment agreed to.
Clause 37, as amended, agreed to.
Clauses 38 to 41 agreed to.
Lord Banks Lord Banks moved Amendment No. 34:
After Clause 41, insert the following new clause:
("Up-rating of sickness and unemployment benefit.
. The Secretary of State shall in preparing any increase in sickness and unemployment benefit in November 1982 include in it such sum as is necessary to make good the effect of section 1(1) and (2)(a) of the Social Security Act 1980 upon these benefits.").
The noble Lord said: I beg to move Amendment No. 34 in the name of my noble friend Lord Kilmarnock and myself. The Social Security Act (No. 2) of 1980 provided for short-term national insurance benefits, including unemployment benefit and sickness benefit, to be increased by 5 per cent. less than the increase in prices. It was argued in support of this that this was purely an interim measure designed to fill the gap until these benefits were brought into tax. However, the five per cent. abatement was suffered by those who would have paid no tax as well as by those who would have paid tax.
To that extent, it was exceedingly unfair. The abatement was only applied in one year but of course the effect is cumulative. Further increases in subsequent years were calculated on the reduced figure. Provision is being made for these benefits to be taxed, but even when that is established the cumulative effect of the abatement will be continued. Now that the Government are to receive the benefit of a reduction in costs through taxation, it is only right and proper that the effect of the abatement should be removed. This the proposed new clause would do for sickness and unemployment benefit. I understand that the taxation of unemployment benefit will raise some £525 million in a full year, and that to restore the abatement for unemployment benefit would cost £60 million in a full year. I imagine that the relationship of the figures is not very different for sickness benefit, so that the money will be there to meet the cost. An impression was undoubtedly given, however unintentionally, that the abatement would be made good when benefits were brought into taxation. This was an expectation supported by logic and by a sense of fairness, and I hope that the Government will recognise this. I beg to move.
Lord Kilmarnock: I wish very strongly to support the noble Lord, Lord Banks, in this amendment which he has outlined with his usual thoroughness. In the other place there were debates at Second Reading and on Report on this issue. In the latter, on 18th March,
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1982, it was shown conclusively that the Minister for Social Services had said on 9th February in Standing Committee:
"The abatement will be restored as soon as benefits are brought into taxation. That undertaking is unqualified".
Mr. Douglas Hogg, for the Government, strove to override this retrospectively by referring to what the Minister had said in 1980, when introducing the abatement measure. He even turned to this House in his distress, quoting from the noble Baroness, Lady Young, when she said on 2nd June 1980, at col. 1190:
"I should like to make it clear … that we have taken no decision at all on the 5 per cent. abatements in the following years 1981 and 1982".
But that, at least, leaves the matter open, and might well be taken to imply that the introduction of taxation would be taken into account. At any rate, it was not sufficient to reassure all the Government's supporters and a number of them went into the Division Lobby against the Government, and in favour of the new clause to restore the abatement. One of them said that it was a matter of principle and conscience.
So far as I am concerned, that is what it remains. It is quite simply unfair to perpetrate what is, in effect, double taxation on the unemployed. The 5 per cent. abatement was further compounded by a 2 per cent. shortfall in the up-rating in 1981. The cumulative loss of unemployment benefit from November 1982, if the abatement is not made good—and this is not counting the shortfall—will be £1·05 a week for a single person and £1·70 for a married couple. If the married man has two children, the cumulative loss rises to £5·50, as a result of the continuing application of the November 1980 formula to the calculation of child dependency addition. That cannot be right.
If the Government seek to justify themselves on the grounds that they agree in principle, but that present constraints will not permit them to repair this injustice, they really cannot be allowed to get away with that, as it has been calculated by the Social Security Advisory Committee that the social security savings made by measures introduced since the Government came into office—and I am not including the SSP which is not yet law—amount to approximately £1·4 billion. Furthermore, it has been calculated that the taxation of unemployment benefit will yield something like £500 million—though I think that the noble Lord, Lord Banks, said £525 million—in a full year; whereas the restoration of the abatement would cost, on my figures, only £50 million, although the noble Lord, Lord Banks, said £60 million (there is not a great deal of difference) some of which would also return home in tax.
It is surely relevant, also, to look at the advice of the Social Security Advisory Committee on page 26 of their first report, where they say:
"The growth in numbers of people unemployed long term, the entry into unemployment of young people who have paid too few or no contributions, the 5 per cent. cut in the real value of unemployment benefit and the abolition of the earnings-related supplement are all increasing dependence on supplementary benefit".
So all that will happen if the abatement is not restored is that more and more short-term unemployed are going to be thrust on to supplementary benefit, which

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was never intended to play the massive role which it does today in our social support mechanisms.
I do not object, in principle, to the taxation of benefits, as that it is a first step towards a tax credit scheme in which I, like our Liberal allies, believe. I am not quarrelling with that. What I am quarrelling with is this constant raiding of benefits, snatching a percentage point here and a percentage point there and even, in this case, a whacking 5 per cent., in the hope, presumably, that no one will notice. The trouble is that they do. Watchdogs like the SSAC notice, pressure groups notice, back-bench Conservative MPs notice and, above all, people themselves notice. A pound or two a week makes a great deal of difference if you are trying to survive on, for example, £30 a week. The Government are harming people and they are harming themselves. Their honour and reputation are at stake here. I beg them to think again on this issue. I warn them that if they do not, we shall lose no opportunity to return to it.
Baroness Jeger: May I associate my noble friends on this side with the amendment that has been put forward. Many quotations have been brought before us about statements from various Ministers on the question of bringing taxation into benefits when benefits were up-rated. But what we are dealing with tonight in this amendment is the situation where it is proposed to tax these benefits without up-rating them. This seems to us absolutely wrong and we therefore support the amendment. We very much hope that the Government will abide by the indications which they gave in the other place, that there was to be a link between the taxation of benefits and the up-rating of benefits.
Lord Molloy: The proposal of this new clause is of fundamental importance to your Lordships' House on two counts. One has been mentioned by the noble Lord, Lord Kilmarnock, who pointed out that in another place, and indeed in this House, promises were made by Government spokesmen. Now is the opportunity for those promises to be redeemed and, if Government spokesmen cannot do that this evening, no one in this Chamber will be able to take too seriously anything that is said from the Front Bench opposite. The noble Baroness, Lady Young, was mentioned, not in her capacity as Lord Privy Seal, when she was answering a debate on this issue. Noble Lords on the Front Bench opposite might do well to read the Hansard report of what was said at that time.
The other point which I should like to make is that, as my noble friend Lady Jeger has said, this is bound to cause great upset to all kinds of organisations, because there are very many people who believe that the massive total of unemployed has been an act of deliberation on the part of this Government; that they have set out to create unemployment. Whether or not that be true, the test will come with regard to this new clause, because they will be adding a new distasteful feature. If they have assisted in the creation of unemployment—though I am bound to say that the world recession has made a large contribution as well—the failure of the Government was in not recognising that recession. But if, in addition to that, they are now going to add penalties on the unemployed, that
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is highly distasteful, and what this new clause does is to give the Government an opportunity to maintain promises that were made, and not to make any unjustified attack upon the unemployed of our country.
Lord Trefgarne: The noble Baroness, Lady Jeger, and other noble Lords and Ladies who have spoken, will probably not be surprised to hear that the Government cannot accept this amendment. The 5 per cent abatement of short-term benefits and invalidity benefit in November 1980 was part of a package of measures designed to secure essential public expenditure reductions. It was carried out in anticipation of the taxation of these benefits, and it takes from claimants overall very much less than the tax would have yielded. We have given a commitment that the 5 per cent. abatement of invalidity pension will be restored when the benefit is brought into tax, but we have said on many occasions that the restoration of the abatement in the case of the other benefits would have to he considered in the light of the economic and other circumstances prevailing at the time that each benefit was to be brought into tax. Proposals for taxing sickness benefit have not yet been brought forward and we have no plans to restore the abatement of this benefit.
As regards unemployment benefit which will be taxed from July 1982, we have reviewed the abatement but in the present difficult economic circumstances we have been unable to restore it. We are up-rating unemployment benefit fully in line with estimated price increases in November 1982, and in addition we are making good the 2 per cent. shortfall in last year's up-rating. Restoration would cost £60 million in a full year and we have decided that further resources cannot be made available for this purpose. We shall, however, continue to keep the matter under review and, when circumstances allow, the claim will be considered, along with other priorities for the available money.
Much has been made, in particular by the noble Lord, Lord Molloy, of various Government pronouncements on this matter. May I draw your Lordships' attention to the words of my honourable friend the Minister of State for Social Security. Speaking during the Report stage of this Bill in the other place on 18th March my honourable friend said:
"We have said the abatement will not be a permanent reduction. It is equally clear that the abatement cannot be made good now, but it will be made good. My right honourable friends have the matter under review. At the right time it will be made good".
Lord Banks: I am grateful to the noble Lord, Lord Kilmarnock, to the noble Baroness, Lady Jeger, and to the noble Lord, Lord Molloy, for the support which they have given to this amendment. And I thank the noble Lord, Lord Trefgarne, for his reply, which he will not be surprised to know I find very unsatisfactory. He said that the abatement was designed to get reductions in expenditure. Well, they got them, and they have had the reduction over the years since it was reduced. Now that they are going to have a reduction through taxation, which is going to give them a bigger reduction than the one they have obtained through the abatement, it seems right at this point to restore the cumulative effect of the abatement. I am quite sure that all logic and all fairness is on the side of that argument.

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Because of that, I should like to test the opinion of the Committee.
7.53 p.m.
On Question, Whether the said amendment (No. 34) shall be agreed to?
Their Lordships divided: Contents, 41; Not-Contents, 55.

DIVISION NO. 7

CONTENTS

Ardwick, L.

John-Mackie, L.

Aylestone, L.

Kaldor, L.

Banks, L.

Kilmarnock, L.—[Teller.]

Beaumont of Whitely, L.—[Teller.]

Kirkhill, L.

Llewelyn-Davies of Hastoe, B.

Birk, B.

Bishopston, L.

Molloy, L.

Boston of Faversham, L.

Northfield, L.

Brooks of Tremorfa, L.

Peart, L.

Bruce of Donington, L.

Pitt of Hampstead, L.

Chitnis, L.

Ponsonby of Shulbrede, L.

Collison, L.

Ross of Marnock, L.

David, B.

Stedman, B.

Davies of Leek, L.

Stone, L.

Elwyn-Jones, L.

Strabolgi, L.

Evans of Claughton, L.

Tanlaw, L,

Fisher of Rednal, B.

Underhill, L.

Hampton, L.

Wallace of Coslany, L.

Harris of Greenwich, L.

Wells-Pestell, L.

Houghton of Sowerby, L.

White, B.

Jeger, B.

Winstanley, L.

Jenkins of Putney, L.

NOT-CONTENTS

Airey of Abingdon, B.

Lane-Fox, B.

Allerton, L.

Lindsey and Abingdon, E.

Avon, E.

Long, V.

Bellwin, L.

Lyell, L.

Belstead, L.

McFadzean, L.

Boardman, L.

Mackay of Clashfern, L.

Brougham and Vaux, L.

Mansfield, E.

Campbell of Croy, L.

Margadale, L.

Cathcart, E.

Marley, L.

Coleraine, L.

Mersey, V.

Craigavon, V.

Mottistone, L.

Craigmyle, L.

Mountevans, L.

Cranbrook, E.

Murton of Lindisfarne, L.

Cullen of Ashbourne, L.

O'Neill of the Maine, L.

Denham, L.—[Teller.]

Pender, L.

Drumalbyn, L.

Plummer of St. Marylebone, L.

Eccles, V.

Elton, L.

Rankeillour, L.

Enniskillen, E.

Ridley, V.

Fortescue, E.

Sandford, L.

Fraser of Kilmorack, L.

Sandys, L.—[Teller.]

Gainford, L.

Savile, L.

Gardner of Parkes, B.

Skelmersdale, L.

Gridley, L.

Trefgarne, L.

Harmar-Nicholls, L.

Vaux of Harrowden, L.

Hastings, L.

Ward of Witley, V.

Holderness, L.

Windlesham, L.

Kinross, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
Clauses 42 to 46 agreed to.
Clause 47 [Short title etc.]:
Lord Cullen of Ashbourne Lord Cullen of Ashbourne moved Amendment No. 35:
Page 40, line 13, leave out from beginning to ("and") in line 16 and insert—
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("(3) The following provisions come into force on the passing of this Act—

(a) sections 7, 26, 40, 42 and 44 to 46;

(b) paragraphs 1 to 4, 7, 10, 13(1) and (3), 15, 19, 21 to 23, 28 to 32, 35 and 36 of Schedule 4; and

(c) subsections (1) to (4) and (7) of this section and subsection (5) of this section so far as it relates to the provisions mentioned in paragraph (b) above").

The noble Lord said: This is a technical amendment. Its effect is to include subsection (5), which gives effect to Schedule 4 to the Bill, among those provisions which take effect immediately on Royal Assent. It will be obvious to noble Lords that this amendment is not introducing anything new but is intended to correct a defect in the Bill. As presently worded, subsection (3) brings specified paragraphs of Schedule 4 into effect on Royal Assent. However, it does not bring subsection (5) into effect at that time. As it is subsection (5) which gives effect to Schedule 4, the legal unsoundness is clear and I commend this amendment to the House. I beg to move.
Baroness Jeger: This amendment is so technical that my noble friends and myself could not possibly have any objection to it.
On Question, amendment agreed to.
Clause 47, as amended, agreed to.
Schedules 1 to 3 agreed to.
Schedule 4 [Amendments and transitional provisions]:
Lord Trefgarne Lord Trefgarne moved Amendment No. 36:
Page 59, line 3, leave out paragraph 36 and insert—
("36.—(1) Neither section 141(2) of the principal Act nor section 10(1) of the Social Security Act 1980 (duty of Secretary of State to refer proposals for regulations to Industrial Injuries Advisory Council and Social Security Advisory Committee) shall apply to any regulations contained in a statutory instrument which states that it satisfies the requirements of this paragraph.
(2) A statutory instrument satisfies the requirements of this paragraph if it contains only one or more of the following—

(a) regulations made under or by virtue of any provision of this Act and before the expiry of the period of six months beginning with the commencement of that provision;

(b) regulations made under any enactment in consequence of a provision of this Act, or in consequence of any provision made by virtue of a provision of this Act, and before the expiry of the period of six months beginning with the commencement of the relevant provision of this Act;

(c) regulations proposals for which are not subject to the requirements of section 141(2) or section 10(1).").

The noble Lord said: This amendment substitutes for paragraph 36 of Schedule 4 to the Bill before your Lordships a slightly longer paragraph with exactly the same objective in view but rather better designed to achieve that objective. Usually, social security regulations have to go to one or other of the two independent advisory committees. In most cases, it is the wide-ranging Social Security Advisory Committee. The traditional view, reflected in a succession of social security Bills, is that where a social security change is being effected by main legislation and by regulations made under that legislation, and within six months of Royal Assent to it, then the regulations are part and parcel of what Parliament has discussed already and it is not sensible to refer them to an advisory committee for further discussion. In some cases the timetable for carrying through the Bill changes would

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make a reference to the advisory committee difficult or impossible in any event.
Paragraph 36 follows the usual practice but elaborates a little on the original text simply because the lawyers have spotted that we had not got quite what was needed and intended. In particular, one set of regulations may be made under the Act but this in turn will require a consequential amendment of another set of regulations. Social security regulations tend to interact with one another because we have an overall system with various benefits within it. So the chain of causation from the Act itself is unbroken; it is just a little longer than the Act to initial regulations link on which the original draft focused. I hope therefore that your Lordships will agree to this modest change. I beg to move.
Baroness Jeger: We cannot understand why this was not properly set out at the previous stage, but as the Government have obviously recognised that there were mistakes and have now brought the matter to us in a more proper way, we will certainly agree. We hope this amendment will now pass.
On Question, amendment agreed to.
Schedule 4, as amended, agreed to.
Remaining schedule agreed to.
Title agreed to.
House resumed: Bill reported with the amendments.

Local Government Finance (No. 2) Bill
8.6 p.m.
House again in Committee.
Clause 2 [Limitation of precepting powers]:
[Amendments Nos. 16 to 18 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 19:
Page 2, line 18, leave out subsections (2) and (3).
The noble Lord said: I spoke to this amendment earlier and I beg to move.
On Question, amendment agreed to.
The Deputy Chairman of Committees (Lord Wells-Pestell): As Amendment No. 19 has been agreed to, I cannot call Amendments Nos. 20 to 23.
[Amendments Nos. 20 to 23 not moved.]
[Amendment No. 24 not moved.]
Clause 2, as amended, agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 25:
After Clause 2, insert the following new clause:
("Substituted rates and precepts.
.—(1) Subject to subsection (2) below—

(a) a rating authority may make a rate for a financial year in substitution for a rate previously made by it for that year; and

(b) a precepting authority may issue a precept in respect of a financial year in substitution for a precept previously issued by it in respect of that year.

(2) The estimated product of a substituted rate or precept shall not exceed the estimated product of the rate or precept for
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which it is subsitituted (the "original" rate or precept); and for the purposes of this subsection the product of a substituted rate or precept shall be estimated by reference to the same gross rateable value as the product of the original rate or precept.
(3) Section 12(6) of the General Rate Act 1967 (which requires a precept to be issued or notificed before the beginning of a financial year) shall not apply to a precept issued by virtue of subsection (1)(b) above.
(4) Where a precept is substituted by virtue of this section any rating authority which has made a rate by reference to the original precept shall under subsection (1)(a) above make a substituted rate by reference to the substituted precept and in relation to that substituted rate the estimated product of the original rate shall for the purposes of subsection (2) above be treated as reduced by the difference (if any) between the estimated products of the original and the substituted precepts.
(5) Where a rate or precept is substituted by virtue of this section any sum paid to the rating or precepting authority in respect of the original rate or precept (including any sum paid by way of an instalment or other part payment) shall—

(a) to the extent to which it would have been payable if the original rate or precept had corresponded to the substituted rate or precept, be treated as paid in respect of the substituted rate or precept; and

(b) as to any excess, be repaid if the ratepayer by whom that sum was paid or, as the case may be, the authority to which the precept was issued so requires.

(6) Where repayment of any amount is not required under subsection (5)(b) above that amount shall, as the rating or precepting authority may determine, either be repaid or—

(a) in the case of an amount paid in respect of a rate, be credited against any subsequent liability of the ratepayer for rates in respect of the hereditament in question;

(b) in the case of an amount paid in respect of a precept, be credited against any subsequent liability of the authority to which the precept was issued in respect of precepts issued to it by the precepting authority.

(7) This section applies whether or not the original rate or precept was validly made or issued but shall not be construed as authorising the substitution of a rate or precept for one made or issued after the passing of this Act in contravention of section 1 or 2 above.").
The noble Lord said: I spoke to this amendment earlier and I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 26:
After Clause 26, insert the following new clause:
("Proceedings in respect of rates and precepts.
.—(1) The validity of a precept shall not be questioned except by an application for judicial review; and the validity of a rate shall not be questioned except as aforesaid on any of the grounds mentioned in subsection (2) below.
(2) The grounds referred to in subsection (1) above in the case of a rate are—

(a) that any part of it was made for financing expenditure which the rating authority could not lawfully incur;

(b) that it was made by reference to a precept which was wholly or partly invalid; or

(c) any other ground not based on facts relating to a particular hereditament or to the inclusion or exclusion of any particular person in or from the rate.

(3) If on an application for judicial review the court decides to grant relief in respect of a rate or precept it shall quash the rate or precept whether the ground of invalidity relates to the whole or only to a part of it.
(4) Subsection (1) above is without prejudice to the making of an application for judicial review in any case in which it could be made apart from that subsection.
(5) Section 7 of the General Rate Act 1967 (appeal against rate) shall have effect subject to the foregoing provisions of this section, and accordingly the court shall not under that section amend or quash a rate except in relation to a parricular hereditament.").
The noble Lord said: I spoke to this amendment earlier and I beg to move.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 27:
After Clause 2, insert the following new clause:
("Limit of increase in rates for non-domestic sector.
.—(1) Where the rating authority makes an increase in the rate the percentage of this increase shall not in respect of non-domestic hereditaments exceed any percentage increase provided for by the Secretary of State under the Rate Support Grant in accordance with section 54(4)(d) of the Local Government Planning and Land Act 1980.
(2) In this section "rate" and "rating authority" has the same meaning as in section (1) above, "non-domestic hereditament" means a hereditament which is not a domestic hereditament as defined in section 48 of the General Rate Act 1967.").
The noble Lord said: With the permission of the House I should like to speak also to Amendment No. 88. Before starting to speak to my amendment, I should like your Lordships to recall the remarks of my noble friend Lord Bellwin with regard to the business rate, when he was speaking to Clause 1 stand part, many of the points of which thoroughly endorse the fact that the business rate must receive proper consideration at this stage. The other point made by my noble friend —to my surprise, although perhaps I have been missing things—was in relation to Amendment No. 15, when he said;:
"Business rates will continue for the foreseeable future".
So I believe we have a problem. As was said in the Green Paper, the rates under consideration are only those for domestic rates and that we therefore have to think rather carefully how the business rates are dealt with.
The purpose of my Amendment No. 27 is to restrict the rates for buisness, to limit them each year to the Government's inflation assumption in the rate support grant settlement. It is referred to in Section 54(4)(d) of the Local Government Planning and Land Act 1980. The CBI, who advised me on this amendment, have been discussing with the Government for some time the case for imposing such a limit. Their representations have been prompted by rapidly rising rates, which have increased as a proportion of the real inflation-adjusted profits in recent years and particularly since 1980–81.
The noble Lord, Lord Bruce of Donington, when speaking on Amendment No. 2 incited me to respond by talking about business rates—and I am sorry not to see him in his place. I remember that among other things he said that the business rates, after all, had to pay for the roads and refuse collection and all sorts of things. Well, that is true, but the business ratepayer pays at a higher poundage than the domestic ratepayer, yet he benefits less from the provision of services. In addition he usually has to pay relatively more for the services he uses, such as refuse collection, than his domestic counterpart.
I will not go over the pros and cons of this amendment because I did so at Second Reading in columns 653–4 of Hansard of 22nd April. Perhaps I may conclude my introduction of this amendment by saying that the arguments used against the proposal for a ceiling on business rate increases have in the past been that it reduces local autonomy and that it would result in an intolerable burden on the domestic ratepayer. However, the counter-arguments run, the ability of local authorities to collect rates from the domestic ratepayer will not be affected, and the fact that the cost of marginal expenditure decisions will fall on domestic ratepayers will in fact greatly enhance local accountability. In
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practice, it is unlikely that there will be a large increase in the burden on domestic ratepayers, as the increased accountability that arises will be a powerful influence in limiting excessive expenditure.
I am sure that the philosophy behind that remark will appeal to the Government, who repeatedly on other amendments have been making the point that it is necessary in certain areas where local authorities have gone off on a trip to restrict their excessive expenditure. For authorities where the domestic contribution to total rate income is small, the possibility of large increases falling on the domestic ratepayers could be softened by the use of an equalisation grant. I think that is enough to demonstrate the importance of this amendment in supplementing what I said on Second Reading. I beg to move.
Lord Bellwin: I wonder whether my noble friend would permit me—but, if he thinks it would be confusing, of course I will not do so—in speaking to this Amendment, No. 27, and to No. 88, to cover also Amendments Nos. 30,31 and 89.
Lord Mottistone: I would in fact find it confusing. I do not want to offend my noble friend, because I hope he is going to agree, but the subject matter of the other amendments is really quite different and they need fighting on their own account.
Lord Bellwin: Of course, I entirely accept that. May I say that underlying all these new clauses is the point that high rates can harm employment and development prospects in the areas where they are levied? My noble friend has very commendably looked at ways in which the impact of these high rate levels on the business community can be reduced. I suspect he will not be surprised that I cannot say today that the principle and the drafting of his new clauses are acceptable and that I commend them to the House. But I should like to establish clearly—and indeed I hope that all that I was saying earlier established clearly—that we take very seriously the plight of commerce and industry in some areas and that we take very much to heart what is said to us on the subject by the CBI, by firms and individuals, and indeed by my noble friend this evening.
However, I am not convinced that a ceiling on business rates, as proposed in the new clause in Amendment No. 27, would achieve our aim of getting very high-spending authorities to cut back. The effects of a single percentage limit on increases in business rates would be diverse and could mean cuts in expenditure for some authorities but increases in others. Moreover, it could in some cases put an intoleable burden on domestic ratepayers, who would have to finance the balance of an authority's expenditure.
The abolition of supplementary rates and precepts will enable both non-domestic and domestic ratepayers to plan their budgets free of any fears that they may be faced later in the year by heavy, unexpected demands for supplementary rates. This measure, together with our determined efforts to secure continued reductions in local authority spending, should benefit all ratepayers, including those in the business sector.
The point to remember, though, is that extra protection for some ratepayers inescapably means an extra

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burden for those who do not benefit from the ceiling, or the relief or the exemption involved. Any such large-scale relief as those proposed by my noble friend for non-domestic ratepayers in the new clauses in Amendments Nos. 27, 30 and 31, would mean that the extra burden would fall on the domestic ratepayer, who himself will he hard-pressed in many instances. For this reason alone, I fear I could not agree this afternoon to the principle of relief for commercial hereditaments proposed in the new clause in Amendment No. 30, which we will come to later. Also, as drafted, the new clause would provide relief for commercial but not industrial premises. I am not convinced that that distinction, whether or not deliberate on my noble friend's part, could be justified.
Nevertheless, the Government have already taken some comparatively small but, we hope, useful measures to give specific assistance with non-domestic rate bills in the Local Government, Planning and Land Act 1980. Using order-making powers under the Act, the Government have reduced the amount of empty property rates chargeable on non-domestic property to 50 per cent. of the normal rate; and have given a range of smaller businesses the right, which previously only domestic ratepayers had, to pay rates by instalments. These powers also give us the flexibility to vary further the ceiling on rates on unoccupied property and to increase the number of businesses eligible to pay by instalments in response to changing circumstances.
Just a word on the Green Paper to which my noble friend made reference, Alternatives to Domestic Rates. It is true, as I said earlier, that this applies to the domestic sector, but we have always said that whatever measures are taken—and there will be measures taken—we should have to ensure that business ratepayers were safeguarded from any authority which, following reform of the domestic rate system, sought to maintain excessive spending policies by loading the marginal cost on to the non-domestic rate poundage. We will certainly have this very much in mind. In the light of what I have said, I hope my noble friend will accept that the Government are keeping the problems and needs of business ratepayers very much in mind. We are anxious about it, and I hope that what I said earlier will illustrate this. Perhaps in those circumstances he may feel able to withdraw his amendment.
Baroness Birk: I listened very carefully to what the noble Lord, Lord Mottistone, said and what the Minister said in reply. Indeed, from the reply, the noble Lord, Lord Mottistone, might have felt that perhaps he should have supported the amendments moved from my Bench and also by the Alliance relating to considering the Bill and reassessing the legislation every year in relation to this part of the Bill as well. The Government would have had a chance to look at it and it would also have furthered the noble Lord's case as regards the Government getting on with their assessment of what local financial policy should be.
The Minister quite rightly made various points on the Green Paper as regards the rates and also the services provided to industry. One point which he did not make, and which I think is very relevant in this area, is that the domestic rate increases have been rather greater than the non-domestic rate increases. We have seen a decline in real value of the domestic rate
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relief grant. This would put an unfair impact on domestic ratepayers in authorities which have a high percentage of non-domestic rateable values, for example, Westminster and the City of London.
Although we are not anxious just to squeeze industry, which would be wrong and in any case an extremely unproductive view to take, I think we must agree that the amendment tabled by the noble Lord, along the lines of the Minister's reply, is right at that point, but its effect as regards domestic rate increases and industrial rate increases puts the whole matter rather out of focus at the moment. Until the Government, or a Government, come up with a new and fresh look at the whole situation it would be wrong to take the amendment in its present form on its own. So if the noble Lord is thinking of dividing the Committee on this amendment, I think I ought to break the news to him that my noble friends and I find reluctantly that we shall not be able to support him.
Lord Evans of Claughton: Briefly, I appreciate the problems that industry and commerce suffer under the present rating system. Until comparatively recently it could be said that the level of rates was not a problem for industry. I still think that the level of interest charges is probably a greater problem for industrial concerns than the level of the rates. I do understand the situation. In the part of the world where I live we are continually receiving deputations and delegations from commercial, industrial and shopping interests asking that something be done about the very high level of rates which commercial and industrial hereditaments have to pay.
I do not think that the proposal that the noble Lord puts forward is one that we could support at this stage. The Green Paper is, of course, about domestic rates and not about non-domestic rates. However, I am chairman of a working party within my own party on the subject of financing local government and one comes back, I am afraid, all the time to the point that the remedy for the industrial ratepayer—as it is, I think, for the domestic ratepayer—is a change in the way in which we finance local government. I really cannot see that the rating system can be tinkered with much more to produce the kind of results that the CBI and, indeed, all kinds of interests want. I think that there must be a root and branch reform of the rating system.
I suspect, from my own researches, that one of the big difficulties will be encountered, in finding a fair way in which to require industry and commerce to pay for the services they receive without imposing too heavy a burden upon them. I suspect that this will be a very difficult and more serious problem than finding remedies like local income tax for the domestic ratepayer, and whether it be by addition or a supplement to the corporation tax I do not know.
I have a great deal of sympathy with the desire of the noble Lord to reduce the burden that industry and commerce suffer. But I do not think that this proposal would be fair in relation to other ratepayers. We will have to wait to find some form of reform of rating which would be fairer to industry and to all people who pay rates. Quite frankly, that must be the only way out. As the noble Baroness, Lady Birk, has said, one could not support this amendment in its present form.
Viscount Ridley: I should like to add that I agree with the last speaker. We come back to the reform of the whole system of local government financing. The amendment is in a sense premature. Although we have enormous sympathy with the business ratepayer who is literally being squeezed very hard, I think that Members on the Benches opposite and members of the Labour party have not realised how serious this squeeze is—they may deny that, but it is I am sure a fact. I hope that the Government, while not accepting the amendment, will take the opportunity yet again to reinforce their wish to those who make the decisions to get on with the root and branch reform of local government finance, otherwise we are all wasting our time.
Lord Molloy: We in the Labour party understand very well the predicaments of local government because we have been more involved in local government throughout the length and breadth of Great Britain than at any time when the Tory party were—
Lord Mottistone: Perhaps the noble Lord would address his remarks to business in local government and not just to local government itself.
Lord Molloy: I was just coming to it. The point I was trying to make is that I hope it will not be considered audacious for me to defend my party from the Benches opposite in this noble House, because I shall carry on doing that as long as God gives me breath. Noble Lords opposite must realise that and the quicker they do so the better. I shall continue with what I have to say. I have as much right to be here as any noble Lord opposite.
What gives us very grave concern is the massive interference in local government which existed on these islands before there was a national Government of the present Conservative Administration. What is worrying many businessmen, small factory owners and small businessmen, is that they are seeing the rate support grant cut, which is, roughly speaking, a fair method of taking money from taxpayers and ratepayers to assist local authorities, particularly those which are in very difficult circumstances. Local businessmen and local industrialists realise that their local authority, to make good some of the cuts imposed on them by central Government, will have no alternative but to raise the rates both for the industrial ratepayer and the domestic ratepayer. Until we understand that and get that quite clear, the very good points made by the noble Lord, Lord Mottistone, will not really be understood.
I have a great deal of sympathy with the noble Lords' submission, but the problem has been put not only on the domestic ratepayer but also on the industrial ratepayer. The men in industry understand, company directors understand that they have to find the money for some of the things that they wish to do in their local authority. The money has been taken away from the central grant by Mr. Heseltine and therefore their local authority will look for other ways and naturally they are looking to local industry to make a bigger contribution. I should like to say this to the noble Lord, Lord Mottistone. He wants to put the blame
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fairly and squarely where it belongs and that is on the shoulders of this Conservative Government.
Lord Bellwin: The noble Lord will not be surprised if I spring up to tell him that I, too, will speak as often as I like and whenever I like to defend the policies of my party. The fact is that I disagree with him absolutely and totally. It is not grant that decides the level of funds that are available to a local authority; it is the rate at which it spends. I can recall having served—the noble Lord may sneer, but I can recall being in local government when our rate support grant was reduced from 66 per cent. down to 61 per cent., an enormous reduction of 5 per cent. The fact is that it was always those same authorities who managed, who somehow ordered their affairs, who did things better, who got better value for money, who went on providing services at a rate which did not impose upon their industry and commerce the kind of burdens that were being imposed upon them by other authorities who did not care so much about value for money and those things that some Members opposite care about so little. So when we discuss matters in this Bill, as we are doing, and try to make progress, I suggest that it helps if we do not start to make political party points, because I can assure the noble Lord that on this subject I know every bit as much about it as he does.
Lord Molloy: Before the noble Lord sits down, I would point out that the point was made by his noble friend behind him and I believe that he had every right to make his attack on the Labour Party. I committed the grave offence in the noble Lord's mind of defending the Labour Party. When this country was in similar circumstances in the 1930s under Conservative Governments, there was, and there had to be, a release of rates up to 50 per cent. for industrial ratepayers. In other parts of the country there were queues of domestic ratepayers miles long, as in Merthyr Tydfil, where it took people eight or nine hours queueing outside the county court to answer summonses for not paying their rates. That is a situation which I do not want to see arise in this country again, and that is why I made the points that I made in response to the very able and sensible way in which the amendment was moved by the noble Lord, Lord Mottistone.
Lord Underhill: There are two brief points that I should like to make on this amendment. I agree with practically every criticism that has been made on the amendment put forward by the noble Lord, Lord Mottistone. But, in considering the whole question of the difficulties of commercial and industrial ratepayers, one other matter has been overlooked. The lack or absence of adequate services and facilities provided locally can itself have an effect upon the position of employment in particular areas. That must be taken into consideration. The criticism that I would make of the noble Lord, Lord Bellwin, is that he continually refers to extravagance in local government. We know that there must be some tightening up, and there will be subsequent clauses which deal with this. But we must not get away from the fact that local government has cut its real spending by 21

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per cent. in the last five to six years, whereas central Government have increased their expenditure by 8 per cent.
The noble Lord ought not continually to knock local government as if it is the only extravagant spender, whereas we know that the services provided by local government are of the utmost importance, not just to members of the Labour Party, but to the whole community, and that local government services must be kept at a sufficient level which can not only affect the livelihoods of people, but which can also have some effect on their employment.
Lord Bellwin: I do not knock local government. First, I query very much the figures that the noble Lord mentioned, but apart from that I do not continually knock local government. Quite the contrary, I have every bit as much interest in local government as has the noble Lord—some might think even more so. But I am concerned when I see things happen within local government that I know are harming it and harming its future. When there is this inability of central and local government to work together, then it is local government as well as central Government that is harmed. At the end of the day it is central Government that prevails to the detriment of local government. I did not talk about extravagance; I talked about levels of spending what we can afford and what ratepayers can afford. The ability to pay does not come into this whole debate at all, but it is certainly having its effect upon business and commerce. It is at our peril that we fail to recognise this.
I want local government to work better. All those I know on all sides—and I know very many leaders on the Labour side—are also concerned, but they are equally concerned—and I hope that the noble Lord will take this from me—about some of the activities of their own colleagues in other authorities who make it hard for everyone who has the interests of local government at heart, as I certainly do.
8.35 p.m.
Lord Mottistone: Perhaps I may conclude this debate around my amendment because, with the greatest possible respect to all sides, there has been quite a lot of talk which has had nothing to do with it. Perhaps noble Lords and the noble Baroness, Lady Birk, will forgive me if I do not respond to her points, which I do not think were strictly on the lines of the amendment.
The particular points that I should like to make are general. One of the dangers of high business rates is that they are moving the businesses away from the big cities. That is bad for life in the big cities. I hope that local government in cities will realise that the more they squeeze financially the small businesses in particular, and the not-so-small businesses, the more they will send away the available jobs within their area and the more they will make themselves destitute. Whether this is the right answer is another matter, but I honestly think that the Government on the one hand and the local authorities on the other must watch the implications of squeezing businesses.
I was very much concerned about two things. The first was the fact that my noble friend's advisers had put my three amendments together. Perhaps I
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may say to him that if I think they can be taken together, I shall always tell him. If this happens again, perhaps he could note that, because I think that they are separate points. Furthermore, it is bad news for me because it sounds as though he has a brief to turn them all down and I thought that I might get one out of three. Apart from anything else, I think that that is bad debating. I am sorry to have to criticise the way this has been handled, but perhaps my noble friend will note that I shall always let him know if I think amendments can be taken together, unless, of course, it is absolutely obvious, as in the case of a consequential amendment.
What I did not like was the fact that he said this amendment—I think it was this amendment, but it may have been one of the others—related to commercial and not industrial ratepayers. It is not supposed to. If that is so, perhaps he will be good enough to let me know where it is wrong. When my noble friend specifically answered this amendment, he in fact answered many points which I had already made; that is, I had provided the answer to what he was saying to me. Therefore, if he could look at the earlier part of his speech against what I said, he might find that there is a bit more in this which he could accept than he thinks. I am quite prepared to accept that the wording could be improved, but I should have thought that, whatever other noble Lords may have said, there was room here for something on these lines to provide this limit so that there is some sort of a future.
We, as domestic ratepayers, live in our houses and, because there are many of us, when the rates go up they are relatively shared. But some of the businesses unexpectedly get tremendously clobbered, regardless of supplementary rates: as from one year to the next they get clobbered and they do not know what will happen next. So it is very difficult for them to work out a five-year plan as to how they will develop their business if, shall we say, in year three there is a substantial increase in rates, which is a substantial cost. I know that they can be set off against tax, as the noble Lord, Lord Bruce, said, but it is all part of the cost. It does not of itself mean that there is not money to be spent out. Therefore—and I am not trying to incite the noble Lord, Lord Molloy, to his feet—one of the underlying feelings about having a restraint on the non-domestic rates is in order that businesses can plan. I should like to suggest to my noble friend that he makes some sort of slightly more encouraging answer to me on this particular point. I shall then—with the aid of a letter telling me why I am commercial and not industrial—table another amendment at the next stage of the Bill and have a bash at that.
Lord Bellwin: I do not know about this having a bash at things—it is getting very close! Of course, I shall certainly write to my noble friend and we will sort out this business of commercial and industrial. I think that we had better sort out also the particular amendments on which we are speaking, because, so far as I am concerned, I confess that there is some confusion, although I am sure that that is not the case for my noble friend—he obviously knows exactly what he has in mind.
I stated in general where we stood on this whole matter. In fact, everyone who has spoken, regardless

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of the politics, has an understanding that this is something that we had better recognise. I think we do recognise it because it concerns everything that we are all troubled about. There is no lack of sympathy—I hate to use the word because that implies that you just brush it off, and I do not mean that at all.
I said that in any review, and indeed the review that is going on now, we would have to keep in mind the position of the business and commercial ratepayer. The noble Lord, Lord Evans, rightly said how hard it is, and yes, it is, but even so, we cannot walk away from it; it is part of this whole scene. I assure your Lordships and my noble friend Lord Mottistone that we are thinking of it in that way, and if we have to get down to splitting out these amendments I shall do everything I can to try to be helpful.
Lord Mottistone: I thank my noble friend. With the proviso that if the picture looks right I shall perhaps come back again at Report stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 [Borrowing powers]:
Lord Mottistone Lord Mottistone moved Amendment No. 28:
Page 2, line 29, leave out from ("(2A)") to end of line 33 and insert ("The reference in sub-paragraph (1) above to money borrowed by a local authority includes a reference to the interest for the time being payable in respect of that money.").
The noble Lord said: This is a different subject, so do not think that it is all back to the same argument. My amendments which relate to the last one come later. Clause 3(1) of the Bill provides that interest payable on local authority borrowing is a first charge on local authority revenues. It does so by adding to paragraph 11 of Schedule 13 to the Local Government Act 1972, where money borrowed is already secured as a charge on a local authority's revenues.
In making this addition I understand that the Government's purpose has been to reinforce and maintain the existing excellent credit-worthiness of local authorities as borrowers, given that after the passage of this Bill they will no longer have the ability to raise revenue by way of supplementary rates at any time in the year. I wholeheartedly support this objective; whether noble Lords opposite do is another matter. Indeed, I would suggest that we all ought to support it. However, I wonder whether interest should be preferred to principal.
The majority of prospectuses issued assume "money borrowed" in the 1972 Act covers interest as well as principal debt, and that these two elements are secured as equal charges on a local authority's revenues. Since the 1972 Act does not specifically mention interest, it might be useful to clarify this point, and the amendment I have tabled does exactly that. My amendment would underline the credit-worthiness of local authorities and would be acceptable and welcome to the lending institutions. It also has the merit of being simple. Since it would have the same effect in meeting any anxieties about local authorities' future credit-worthiness as the Government's original subsection, I would ask my noble friend to consider accepting my amendment to the Bill.
Lord Bellwin: I am grateful to my noble friend for the careful thought he has clearly given to this matter. As he rightly says, our intention has been to ensure that no doubt should arise as to the credit rating of local authorities. Money borrowed, as my noble friend has said, is secured as a charge on local authority revenues by the 1972 Local Government Act. It is not entirely clear whether interest as well as principal debt is covered by the term "money borrowed", although I am aware that many existing prospectuses state as much because the term "interest" is not specifically used.
The need for local authorities to be seen to be absolutely credit worthy, as indeed they are seen to be in this country, is not contentious, and considering what steps might be taken to reinforce this standing the Government had, as the Committee will have seen, adopted the Scottish model for securing interest as a first charge on revenues. I have certainly been interested in studying the amendment proposed by my noble friend. On reflection, it seems to have several advantages. First, it clarifies and confirms the position which many had thought already existed, fitting in neatly with the existing legislation. As a result, it avoids any problem of discrepency between existing and future prospectuses for stock issues. Thirdly, I understand that it would be seen by those who are interested to provide all necessary guarantees of local authorities' credit-worthiness. For these reasons, I thank my noble friend for helpfully putting this forward, and I am pleased to be able to tell your Lordships that the Government can, and will, accept my noble friend's amendment.
Lord Bruce of Donington: We are very pleased to note that the noble Lord opposite has been, for the first time this evening, a little amenable to some suggestion from the Back Benches; of which side, for the moment, is immaterial for our purposes. We most certainly felicitate the noble Lord, Lord Mottistone, on obtaining this concession from the Government. I was a little curious to know why this amendment was put down at all. So far as I am aware, the credit-worthiness of British local authorities throughout the United Kingdom has never been subject to question.
Local authorities throughout the United Kingdom enjoy a very high credit rating indeed, in contrast to perhaps some of the less fortunate cities in the United States who have been in some difficulties. I just wondered why there should be this sudden anxiety that possibly our own local authorities might perhaps be subject to the same kind of economic circumstances that obtain, or did obtain, for example in the state of New York. I should be glad if the noble Lord would give the backing to what I think I now assert correctly, that local authorities in the United Kingdom are of the utmost credit-worthiness in any event, and that in all save the theoretical sense the assurance given in this amendment is not really necessary at all.
If the noble Lord will restrain himself for just a little longer, might I suggest more particularly that one way in which the credit rating of local authorities could be established and seen on a firmer basis—and we shall come to this in Part III of the Bill—is if it were a requirement for local authorities' accounts to incorporate an account of the assets that they actually possess

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and which are in the ownership of the people of the local authority, in fact governed by the local authority.
So far, as the noble Lord knows perfectly well and it has been pointed out in the Layfield Report, the existing form of accounts does not require any accounting for assets possessed by a local authority in a balance sheet form. I do not want to raise the matter any further now, because it will arise in Part III of the Bill, but I should like the noble Lord to give some assurance to the public at large that, by and large, and with obvious varying fortunes, our local authorities in the United Kingdom have a credit rating second to none in the world.
Lord Mottistone: Perhaps my noble friend would allow me to bring us back to my amendment. The main point is that the paragraph we have sought to remove had interest as the first charge on the revenues. My amendment sought to make it even handed between the prinicpal and the interest, and that is the only purpose of it. This great long political speech, all about Second Reading, is no doubt relevant, but it is not relevant to my amendment.
Lord Bellwin: That is the point. It is really a question of putting the interest and principal as equal charges on local authority revenues for all loans. This removes any ambiguity that there may be in the 1972 Act, which in fact does not mention interest specifically, and reproduces existing practices. I understand that the money market now considers this amendment acceptable and indeed preferable to the original proposals they were making. Of course, as I sit down, I endorse what the noble Lord, Lord Bruce, says. It does no harm to reiterate that because, as there are changes, even restrictions on supplementary rates and so on, people wonder, sometimes worry; so it does no harm to restate the position.
Baroness Birk: My noble friend Lord Bruce was making a relevant point, not a political speech, because when he spoke of the credit-worthiness of local authorities, he was pointing out that because one of their revenue-making possibilities is being taken from them—they cannot levy supplementary rates—people who are in a position to lend them money are becoming scared. That is why the provision was in the Bill and has now been polished up a little by the noble Lord, Lord Mottistone. In other words, it is not so much his amendment against which we are arguing—he has made it neater and more polished—but the original clause, and my noble friend was right in what he said about that.
Lord Bellwin: We could spend all night discussing a point of that kind, so I shall be brief. I am sure the noble Baroness, Lady Birk, is not seriously suggesting that the raising of a supplementary rate in one year would seriously affect the credit-worthiness of a local authority; and the noble Lord, Lord Bruce, explained how credit-worthy local authorities really were. I agree, and of course we are talking about something which has a year's run. It is a point—I made it myself a few moments ago—in terms of the totality of creditworthiness, and I do not think I need say more.
On Question, amendment agreed to.
Clause 3, as amended, agreed to.
8.52 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 29:
After Clause 3, insert the following new clause:
("Interpretation and commencement of Part I.
.—(1) In this Part of this Act—
"financial year" means a period of twelve months beginning with 1st April;
"gross rateable value", in relation to a rating or precepting authority, means the aggregate of the rateable values of the hereditaments in the authority's area;
"precepting authority" means an authority having power to issue a precept either to a rating authority or to a county council;
"rate" means a general rate except that—

(a) in the case of the City of London, it includes the poor rate; and

(b) in the case of the Inner Temple and the Middle Temple, it means any rate in the nature of a general rate levied in the Inner Temple or the Middle Temple, as the case may be;

"rating authority" means any authority having power to make a rate under section 1 of the General Rate Act 1967;
"supplementary precept" means a precept which is issued by a precepting authority—

(a) in respect of (or of part of) a financial year in respect of which it has already issued a precept; and

(b) by way of addition to and not in substitution for that previous precept.

(2) Sections 1, 2 and (Substituted rates and precepts) above have effect in relation to any financial year beginning on or after 1st April 1982.
(3) Schedule (Rates and precepts: transisitional provisions) to this Act shall have effect in connection with the coming into force of sections 1 and 2 above").
The noble Lord said: I have spoken to this. I beg to move.
Lord Hill of Luton: For clarification, I would refer the Minister to subsection (2) of the proposed new clause, which says:
"Sections 1, 2 and (Substituted rates and precepts) above have the effect in relation to any financial year beginning on or after 1st April 1982".
Does that mean that it has effect in dealing with any action taken before 1st April, or that it affects anything which may have been done before 1st April but which does not come into effect until after 1st April? I should be grateful for his advice on that because a good deal hangs on it.
Lord Bellwin: As soon as the noble Lord said "a good deal hangs on it" I began to wonder; one must double check everything in that situation, and I know he would want me to do that. My interpretation—I think this touches on the point we were discussing earlier—is that it is what was in effect before the date 1st April 1982, but I shall confirm that and contact the noble Lord.
On Question, amendment agreed to.
8.54 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 30:
After Clause 3, insert the following new clause:
("Rate relief for commercial hereditaments.
.The following section shall be inserted after section 19 of the General Rate Act 1967:—
"19A.—(1) The rateable value of commercial hereditaments shall, for the purposes of valuation lists in force at the appointed day as from that day, and for the purposes of subsequent valuation lists, be ascertained as follows:—

(a) In the case of a commercial hereditament shown in a valuation list as being occupied and used wholly for

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commercial purposes, the rateable value of the hereditament shall, subject as hereinafter provided, be taken to be eighty-five per cent. of the net annual value thereof:—

(b) in the case of a commercial hereditament shown in a valuation list as being occupied and used partly for commercial purposes, the rateable value of the hereditament shall, subject as hereinafter provided, be taken to be an amount equal to eighty-five per cent. of the net annual value shown in the list as apportioned to the occupation and user of the hereditament for commercial purposes, together with the whole of the net annual value so shown as apportioned to the occupation and user of the hereditament for other purposes.

(2) Where before the appointed day a rate has been made for any rating area in respect of a period beginning before, but terminating on or after, that day, the amount of the rate payable in respect of the occupation of a commercial hereditament shall be calculated as if the rate made had been two rates, the first being a rate in respect of the part of the period terminating on the day preceding the appointed day, and the second being a rate in respect of the remainder of the period, and as if the amount in the pound of the rate made had been apportioned between those two rates, in the case of a rate made in respect of a year in equal parts, and, in any other case in the proportion which the number of days in the first part of the period bears to the number of days in the remainder of the period.
(2) In this section references to a commercial hereditament are references to a hereditament (not being a dwelling house with or without any garden, yard, forecourt, outhouse or other appurtenance belonging thereto) whose net annual value falls to be ascertained under section 19(2) or (3) of this Act."").
The noble Lord said: With the permission of the Committee, I will speak at the same time to Amendment No. 89. This is another way of approaching the subject we have been discussing, but it is not to be viewed with disrespect for that reason. It is being suggested here—again, I am advised by the CBI—that there should be 15 per cent. de-rating for business. Though we believe there is a case for total de-rating for business, like there is for agriculture—and in particular for small businesses, who have to compete on level terms with agriculture—we recognise there would be funding difficulties, as business is expected to contribute about £5·9 billion to the rates in 1982–83. De-rating of 15 per cent. would cost approximately £850 million in that financial year and would have the effect of putting the business ratepayer on a par with his domestic counterpart, who benefits from the present subsidy to the domestic sector, which is known as domestic rate relief.
At present, business ratepayers pay at a higher poundage and in general benefit less, as I said in relation to my last amendment, from the provision of services from local authorities. The CBI's view is that if the finance could not be raised in any other way, the subsidy to the domestic ratepayer should be reduced and spread evenly between the business and domestic ratepayer. I cannot say whether there is any noticeable fault in the amendment as drafted, but with a long amendment of this kind, expert parliamentary draftsmen might find other ways of doing it, and if my noble friend does not wish to accept the amendment on those grounds, he might be able to give assistance to produce another amendment to be tabled at the later stage of the Bill.
Lord Bellwin: As I intimated when discussing the previous amendment in the name of my noble friend Lord Mottistone, we are in some difficulty because this
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proposed new clause as drafted would provide relief for commercial but not industrial premises, which is not what he has in mind. However, I said when we spoke of this before that I would clarify the position for him, and that I have done. For the reason I gave earlier—our concern because when someone somewhere gets relief, somebody else has to pay for it—relief of 15 per cent. for commercial hereditaments would throw an extra burden on the domestic ratepayer.
That brings us back to the whole debate regarding the reform of the system and the position in which we find ourselves now. I am sure my noble friend would wish to look at the amendment again, in view of what I have said about it, and while I in turn undertake to do the same—so we can get the amendments in this sphere clarified—I must intimate that what I have said represents the philosophical concern we have at this time, not least bearing in mind the question of looking at the whole scene (as I have mentioned more than once today) which is perhaps the most important aspect of it.
Lord Bruce of Donington: I need not delay the Committee on this. I am sure the noble Lord, Lord Mottistone, will take it from me—I am sure he is well aware of the fact—that rates in the commercial profit and loss account or commercial trading account, whichever it may be, are in the nature of a fixed charge. Although, like other charges, they go up with the rate of inflation, they are classified as a fixed charge. From that it follows that if the turnover of one's enterprise is continually expanding, or is even maintained, the rates, together with other fixed charges, are a far less proportion of the burden.
Would not the noble Lord agree that very largely it has been the stagnation of consumer demand, reflecting itself in manufacturing output in this country, that has led to lower turnovers? Consequently, lower turnovers mean that the fixed charge operates at a far greater proportion of the company's gross profitability than it otherwise would. Would he not also agree that if it were possible to produce an expanded demand in all sections of commerce and industry in this country—which the pursuit of sane economic and monetary policies would produce—the problem to which he has very rightly drawn attention would largely disappear?
Is not the noble Lord aware that even as we are sitting here this evening there are very many commercial firms busily trying to move into London, despite the high rates here? If he looks at the property sections of the Financial Times, he will find that the phenomenon to which he is referring is limited mainly to those areas where the Government's economic policy itself has caused local devastation.
Lord Mottistone: I would take issue with the noble Lord on two points. First, in concentrating on the question of whether or not a business is doing well, he has said that rates go up only in proportion to inflation, but the fact of the matter is—and this is the problem—that rates have been going up very much more than that. That is exactly what the whole of the Bill is about, so far as I can guess. In certain parts of the country rates have gone up by a considerable amount. They might be shown by the accountants in the fixed parts of a firm's obligations, but in fact

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the rates have crept out of that classification and have become a particularly serious factor—
Lord Bruce of Donington: I thank the noble Lord for permitting me to interrupt him. Is he not aware that since the year 1975–76 it is precisely the domestic rates which have risen at a higher rate than those in the commercial and industrial sector? Is the noble Lord aware of that?—because unless he is aware of it, he cannot approach this question in the right way. I must remind the noble Lord—though I am quite sure that he realises it—that whereas the domestic ratepayer has to pay rates out of taxed income, commercial and industrial enterprises are allowed to charge their rates for income tax or corporation tax purposes, whichever is the most appropriate to the circumstances.
Everybody would like to see the commercial and industrial ratepayers relieved and see them be more profitable. I should like to be able to follow economic policies that would help to restore their turnover, but one must have a sense of proportion, as the noble Lord, Lord Bellwin, has already pointed out. One must study the interests of the domestic ratepayers as well. I hope that the noble Lord, Lord Bellwin, who is of notoriously generous sentiment, will not succumb too much to the very attractice blandishments offered to him by his noble friend this evening.
Lord Bellwin: I shall not say much on this point, but I believe that in all fairness it should be remembered that if a domestic ratepayer cannot afford to pay his rates, he can obtain a rate rebate. If an industrial or commercial person cannot afford to pay his rates, then he must cut back his staff and his business, move to another area where the rates are lower, or go out of business. So I must say in all fairness that the matter is not quite so simple, as I am sure the noble Lord knows.
Lord Mottistone: Perhaps I will be allowed to continue with my speech, having given way to the noble Lord. If he wishes me to give way to him in future, perhaps he will not go on for quite so long, because it is rather irritating to find that one has forgotten what he said and so one cannot properly reply to him. However, based on what I do remember of what he said, I would say that it is all very well bringing in the domestic ratepayer, but everybody is in favour of the domestic ratepayer. I am in favour of him because I, too, pay rates. But in fact people do not secure the right balance of the problem of staying in business as a business ratepayer. That is what the argument is all about. It is a matter of getting that into the right proportion and I suggest that the basis of my amendment is to try to ensure that the matter is dealt with fairly in the future.
I do not think that my noble friend gave me a terribly good answer, though it was fairly good, considering his brief. As I understand it, this was the amendment that covered commercial, but not industrial, businesses, and perhaps he is going to get me right on that. Perhaps we shall come back to the charge at the next stage of the Bill, with an improved amendment on which we shall have been advised by my noble friend. We can then tackle the matter on its own account. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.6 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 31:
After Clause 3, insert the following new clause:
("Rating relief for hereditaments partly used.
.There shall be added after section 25 of the 1967 Act the After Clause 3, insert the following new clause:
"25A.—(1) This section applies where—

(a) the whole or part of any hereditament, which has been and remains constructed or adapted for use as a factory, mill or other premises of a similar character for use wholly or mainly for industrial purposes, is not so used (the unused part); or

(b) the whole or part of a hereditament comprising a commercial building is not used for the purpose for which it has been used remains constructed or adopted for use (the unused part)

provided that in either case no other use is made of the unused hereditament, but notwithstanding that the building or plant or machinery therein, or appurtenant land is or continues to be maintained in a workable condition.
(2) In this section, references to a hereditament comprising a commercial building are references to a hereditament (not being a dwelling-house or a hereditament having a floor space not exceeding 240 square feet and used as a lock-up garage) whose net annual value falls to be ascertained under section 19(2) of this Act.
(3) If the rating authority is satisfied upon application in the prescribed form being made to it that

(a) either paragraph (a) or (b) of subsection (1) above applies in respect of a hereditament and

(b) the unused part under the said subsection (1) is sufficiently identified in the prescribed form then it shall request the valuation officer to apportion the rateable value of the hereditament between the unused part and remaining part of the hereditament; and if the apportionment made by the valuation officer is agreed by the authority and the occupier, then as from—

(1) the date upon which the unused part became unused; or

(2) the commencement of the rate period in which the request was made

whichever is the later, until the event in subsection (4) below occurs the value apportioned to the remaining part shall be treated for rating purposes as if it were the value ascribed for the hereditament in the valuation list.
(4) The event referred to in subsection (3) above is whichever is the first to occur of the following:

(a) any of the unused part becomes used;

(b) a further apportionment of the value of the hereditament is made;

(c) the person in occupation of the hereditament at the time that the apportionment under this section is made ceases to be in occupation.

(5)(a) In determining whether the unused part is sufficiently identified for the purpose of paragraph (b) of subsection (3) above the rating authority shall have regard to the requirements of the valuation officer in determining whether he could reasonably carry out the apportionment mentioned in subsection (3) above if requested so to do and if either the applicant or the valuation officer is dissatisfied with the decision of the rating authority he may apply to the local valuation court who on hearing the applicant, the rating authority and the valuation officer or such of them as choose to appear before it may confirm or reverse the decision of the local authority.
(b) No appeal shall lie from the decision of the local valuation court.
(6) Without prejudice to any other statutory rights vested in any person where an application has been received by a rating authority it or the valuation officer or both of them may at any time enter upon the relevant hereditament to satisfy itself or himself or themselves that the unused part is or has been or is likely to remain unused and such right of entry shall continue until any of the events mentioned in subsection (4) above occurs.
(7)(a) Where at any time in any period during which it has been represented to the rating authority that part of a hereditament is, was or will be an unused part as defined above that part or any of it was not in the opinion of the rating authority unused as so represented the authority may require

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rates to be paid in respect of the whole hereditament as if none of it is, was or had been during the relevant period an unused part and may require interest to be paid on the said amount of rates at such reasonable rate as may from time to time be prescribed by the Secretary of State as if the whole of the said amount of rates had been due on the first day upon which any part of the rates in respect of the unused part would normally have fallen due if no application under section (1) above had been made.
(b) Where a rating authority requires an amount to be paid by way of rates under subparagraph (a) above the said sum shall be paid, without any option to pay by instalments under section 50 of the 1967 Act, on such date following the notification by the rating authority to the person liable for the rates on the hereditament upon which the next normal payment of rates on that hereditament falls due or if there is no such date on the thirty first day after the said notification and allowance shall be made for any rates already paid on the part of the hereditament which was not represented to be unused.
(c) Where an amount falls to be paid under this subsection all rights and remedies shall be available to all parties concerned as if the said amount was a normal amount of rates and all time limits shall apply having due regard to the date for payment specified in paragraph (b) above.
(8) In this section

(a) the prescribed form shall be such form as the Secretary of State shall from time to time prescribe as being necessary for the proper application of this section.

(b) The Secretary of State shall issue regulations governing procedures for appeals under subsection (5) above.

(c) The Secretary of State shall exercise his powers under this section by Statutory Instrument which shall be of no effect until approved by a resolution of both Houses of Parliament."").

The noble Lord said: I should have thought that this amendment was not quite in the same class as the last two amendments, and I am particularly sorry that my noble friend's advisers bracketed it with the others. This amendment seeks to achieve what we tried to persuade the Government to adopt in the 1980 local government Bill—that there should be "moth-balling", or a means of not paying rates on unoccupied business buildings, with the specific object of ensuring that factories, parts of which had to be shut down, could at least remain part of the business and not be sold off. They could be opened up again when business improved. People can do this in relation to their own houses, and it seems only reasonable that it should apply to businesses, too, in particular in these times when businesses are finding the general situation difficult, and when we all hope—I imagine even noble Lords opposite hope—that things will get better as times goes on. It seems to me that what we have here is a very reasonable type of argument, and what is more, the amount of money involved is no where near as great as the several hundred thousands, or the millions, of pounds that we were talking about in relation to the earlier amendments.
The other feature about this new clause is that the earlier part of it, up to and including subsection (4), explains the rules under which it should work. Then, subsections (5), (6) and (7) go into some detail by way of giving powers to the local authority to recover unpaid rates on any business which cheats. There is a lot of it there to make quite certain, because it would be quite easy to cheat inadvertently, in that you might re-occupy part of your factory and forget that you were not paying rates on it, and then have to come up for air and decide upon it. Subsections (5), (6) and (7) make that extremely clear.
Finally, it gives power to the Secretary of State to
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embody these rules in regulations and to make sure that the thing is kept under what might be called his day-to-day control. I would have thought, therefore, that of all the amendments (in addition to the one that my noble friend accepted) that I have laid before your Lordships' Committee today, this is the one which deserves the most favourable consideration. I beg to move.
Lord Bellwin: I am sorry I have to disappoint my noble friend. I think the "moth-balling relief" suggestion is really a very interesting one, and I know that my noble friend feels very strongly that such measures would do much to mitigate the effects of economic recession on industry and commerce. But, likewise, he will know from the debates of his proposals on this subject during the progress of the Local Government Planning and Land Act 1980 through your Lordships' House that although the Government, as I have said more than once this evening, are more than sympathetic to the plight of businesses which are forced to shut down all or part of their premises temporarily, we do not consider that this measure is one which will be workable in practice.
I have already referred to the question of the cost to the remainder of giving relief to selected ratepayers. I do not think it would be helpful to dwell in detail upon the other reasons why we have doubts about this measure—my noble friend will recall them only too well from our previous debates—but there are difficulties in the fact that the relief proposed would cover all industry and all commerce, not only those in need; and there would be a conflict with fundamental rating principles making for inconsistency, not to say inequity. Then there are the practical difficulties of defining "out of use" and of inspection and enforcement. which I submit would be formidable.
I think—in fact, I know—I understand exactly what my noble friend is trying to achieve with this, and I really do have great concern for the situation which he describes, because so many people are now raising it all over the country at all levels. But I just do not think that this is a way to go about it. It may well be that we ought to talk more, perhaps, about other options or whatever, but I fear I could not accept this amendment from my noble friend, although in saying that I hope he realises my sharing with him of the concern.
Lord Bruce of Donington: I rise merely to say that on this matter the noble Lord, Lord Bellwin, has expressed sentiments identical to my own. It will therefore be unnecessary for me to detain the Committee further. I entirely agree with his approach to this, and I would suggest respectfully to the noble Lord, Lord Mottistone, that this is just one of the factors that one has to consider when one tries to formulate proposals for a new method of raising revenue for local authorities.
Lord Mottistone: I listened with great care to what my noble friend had to say, an I am sorry that his noble friend opposite (who I must so describe as he had the same viewpoint), Lord Bruce, took the same view. I know the arguments against it—unfairness, difficulty to enforce and all that sort of thing—and we should not

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forget the fact that ordinary domestic occupiers of premises can have reduced rates for unoccupied premises, so there is a precedent for how to run these things; but I took the trouble to draw particular attention to subsections (5), (6) and (7), because I think that when you look at it through the eyes of the central, official world of Westminster you probably do not think of it in terms of real people.
Real people, confronted with one or two severe cases drawn under subsections (5), (6) and (7) for somebody who has cheated, as published in the local newspaper, will think twice before they apply for this if they are not absolutely certain that they are going to apply fairly and correctly and not cheat—because that is really what my noble friend was talking about, in the politest language. So I would suggest that this really deserves another look. It may be difficult to quantify cost in this area, but as it will be very selective at given parts of given local authority areas, I would have thought that the relative costs will not be too much. However, they might make all the difference to the small or medium business which needs to survive and could just be helped to do so by being able to shut down half a factory or even a whole one because half a factory is difficult to define, but something manageable, and then this would be something which could make a great difference. It would be a good gesture on the part of the Government towards business to say, "We cannot give you reduced rates or put a ceiling on your rates but we can give you this which shows an earnest of our intention". If I could leave that thought with my noble friend, and in the meantime let us talk about this and see whether we might tighten up in certain areas to make it a starter, I would beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 [Adjustments of distribution of block grant.]:
Lord Evans of Claughton Lord Evans of Claughton moved Amendment No. 32:
Page 3, line 10, after ("any") insert ("increase or").
The noble Lord said: It is a pity that we are coming to Clause 4 at this fairly late hour for I suspect that in many respects this is the most controversial and serious clause in the whole Bill. All the amendments here in Part II of the Bill are to do with the adjustment of the distribution of block grants, in other words, holdback. In moving my first amendment, Amendment No. 32, I shall speak to Amendment No. 33. They seek to amend the power which the Government are seeking to give themselves and to any future Government to penalise authorities for overspending and also to give the noble Lord the Minister and his right honourable friends the flexibility to take sanctions against authorities that are spending too little; and I am sure that this will commend itself immediately to the present Government.
Frankly and seriously, while there are authorities, a small minority of them, that overspend and against whom the whole panoply of' this power is sought, there are also authorities which grossly underspend. I have been speaking at meetings with chief executives of some authorities—I should not dare to mention which they are—who are concerned about the extremely low level
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of spending in which some of the more rural authorities are engaged, almost to the point where they are not fulfilling their statutory or common law duties. I think that the Secretary of State should have this flexibility if he is seeking—I am opposed to the whole concept of holdback as being too centralist—to have the power of holdback; he should also have the power of imposing penalties against authorities that underspend.
At the moment, Her Majesty's Inspectorate of Schools have identified in a report, which was published in the last few days, four education authorities who are not complying with or providing an adequate education service. I know that there is a great guessing game going on as to which those authorities are. I mention that as an example. I think that the Government should seriously consider not only that there are overspending authorities, which I say are not as many as the Minister believes, but also authorities where the residents, the people living in the authorities, are suffering, from an authority which has been overenthusiastic in cutting back local services. I beg to move.
Lord Bellwin: As the noble Lord says, these amendments would allow Clause 4 to be used to encourage increases in local government spending as well as reduction. As such, I should have thought that they were probably unnecessary. Local authorities, in my experience, were never backward at coming forward when it came to increasing their expenditure. I should have thought that these amendments were perhaps redundant in view of the noble Lord's great support for local government independence. I am surprised that he is moving these amendments. They would enable a future Government to determine exactly the level of service that each authority should provide and, despite the criticisms made constantly to me over the last three years that that is what we are trying to do, I have argued staunchly, and would argue, that that is not what we are trying to do. Quite the opposite.
While the overall level of public expenditure is, I am sure, the proper concern of central government—that is at the nub of so many present problems—I am equally sure that local government must be given the greatest possible freedom within that constraint to reach its own responsible decisions. Provided proper attention is paid to the interests of the national economy and so long as local government stays within the parameters set down by central Government, authorities are free to establish their own priorities in the light of local circumstances. Whatever their intention, I think that the noble Lord will concede that these amendments will take away that freedom and will quickly condemn local authorities to be the local agents of central policy. I wonder whether I am missing the point. If so, the noble Lord will tell me. Certainly the amendments indicate that that is so and I would not think that he will want to press them.
Baroness Birk: From what the noble Lord, Lord Evans, said about his amendment, and reading from it, he is saying that the central Government are now tying down local authorities so strictly so far as expenditure is concerned and certainly so far as any increases in expenditure are concerned that he is worried about the level of services that some authorities

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may be giving or not giving. There may be some truth in that.
We hear stories of tremendous variations which would not appear to be absolutely necessary so far as the authorities are concerned. If that is so, it seems to me that he is saying that if we have this financial straitjacket then the quality of the services ought to be preserved in those authorities which are not spending the amount that they should spend, and people are not getting the value that they should from their local authority.
If that is so, and if I am right in my interpretation of what the noble Lord is seeking to do by his amendment, then it seems to me that the Minister should look at it. Otherwise, the Government should unknit a great deal in this Bill so that there is not the same tight hold on this. What the noble Lord is doing is trying to get the right balance. If you are going to be so strict on any increases, then you ought to be a bit more careful about authorities which are reducing what they are doing for the community. I doubt if the noble Lord is going to press the amendment, but it seems to me there is something in it that perhaps ought to be considered.
Lord Bellwin: If I may come back on this, the fallacy of the point that the noble Baroness makes is that it should not be the amount of money that is spent that itself decides the level of services—least of all by comparison, one authority with the other. So often in the past we have fallen into that trap of deciding that an authority is profligate or the opposite, parsimonious, or providing a good or bad level of service, on the basis of what it spends.
If one looks at the statistics, there are many authorities that provide a very good level of service. If one looks at what they actually spend, it is often far less than others are spending on the same basis. If we take only that criterion of spending, then we often miss the boat and we often label authorities "good" and "bad"in the wrong areas.
The converse is that if you find an authority which is spending a great deal of money on a particular service by comparison with the average or like authorities, it does not necessarily follow that it is giving better services. I shall not go into this now because we are on the fringe of a great subject; but I know many authorities who by any standards—and everybody within local government knows—do not provide a good service in particular areas. Yet their spending is so high. That is all about value for money. That is why it is so difficult, leaving apart the other objections that I made a moment ago. This is a complex subject which we cannot dispose of in the simplest of terms.
9.25 p.m.
Lord Beaumont of Whitley: Of course it is a complex subject. My noble friend's amendment, which no doubt is slightly lighthearted in its intention, nevertheless exposes a very real flaw in the thinking behind this Bill and the various steps the Government are taking. The steps to which the noble Lord on the Government Front Bench is driven in trying to answer this amendment really amount to an attack on his own policies. If we must attack over-spending, why should we not
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attack under-spending? If money is an important measure, as it apparently is, at the top of the scale, why is it not important at the bottom? We on these Benches would accept that it is not a good measure from either point of view but, if it is not, this Bill should not have been put forward.
I think the first reaction to this amendment of the noble Lord, Lord Bellwin, really underrated the extent to which some services are suffering in the country through under-spending. If you take the report by Her Majesty's Inspectors on the effect of local authorities' expenditure policies, there one is talking not just about what is happening in education but, as they say in the title, the effects of local authority expenditure. That is exactly the point that we are making and which the noble Lord, Lord Bellwin, is trying to brush under the carpet. They say in paragraph 14:
"In over one-third of the authorities, and especially in the shire counties, district inspectors report changes in the curriculum for secondary school pupils in the form of reduction of range of courses offered. These changes affected pupils of all abilities to some extent, but particularly the less able".
If this is happening at a time of growing unemployment, and particularly growing unemployment for the less highly educated and possibly even the less clever in our population, it is something extremely serious. And whereas I am sure my noble friend does not intend to press this amendment, it is in fact pointing out a very real and important flaw in the Government's thinking on this matter, and one which has been underlined by the response from the Government Front Bench.
Viscount Ridley: I am sure that my noble friend Lord Bellwin is right to try to divorce expenditure from efficiency because it is not always a correlation that can be followed; but I wonder whether some of his words will have to be eaten when we reach Clause 20 later tonight.
Lord Evans of Claughton: The prediction made by my noble friend and others is correct: I do not intend to press this amendment to a Division; but philosophically I felt bound to raise this matter, because we have been taken down the road to democratic centralism by the noble Lord, Lord Bellwin, and the Government in this Bill and, going down that road, what is sauce for the goose is sauce for the gander. If you tell people you are going to interfere with their spending plans if they are over-spending, you should also be willing to interfere if you think they are not providing adequate services.
Lord Bellwin: May I intervene briefly to make just one point? I should like to make one point very clear. The Government are not saying they will curtail spending plans at all. What they are saying is, "If you spend beyond certain levels, it is the grant that will be reduced"—because those are the levels decided, whether on the basis of the grant related expenditure assessments or other criteria which we need not go into at the moment; and it is the grant which is being reduced. The authority at the end of the day still has its power, if it so wishes, to spend and to rate. That is where we are today.
Lord Evans of Claughton: I accept that it is hold-back of grant: I do not dispute that. The point I was making in this amendment was the error in the concept of interfering with the independence of local government. I am suggesting that one should carry it to the reductio ad absurdum of saying that if you are going to interfere for over-spending by hold-back then you ought to interfere for under-spending. You should, in fact, be leaving local government alone. But having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 33 not moved.]
Lord Evans of Claughton Lord Evans of Claughton moved Amendment No. 34:
Page 3, line 14, after ("conditions") insert ("and having regard to the ability of every local authority to carry out its duties imposed by or under any enactment or at common law").
The noble Lord said: If I may, I should like, with your Lordships' permission, to speak also to Amendment No. 37. With these amendments I seek to provide an opportunity for the Secretary of State, when reducing grants payable to a local authority because of what he considers is over-spending, to take account not only of the general economic conditions, which are mentioned in subsection (1)(cc), but also of each local authority's requirement to carry out certain duties under the law.
The best example of this is the conflict between non-metropolitan counties and non-metropolitan districts about the duty to provide a satisfactory education service, and the present Government's continued demand that many of these authorities make what I regard as continued and unacceptably large cuts in spending. Over many years Parliament has placed a vast range of duties upon local authorities to provide education and social services, to maintain the highways et cetera, and the great bulk of local authority expenditure is directed towards fulfilling statutory obligations.
The second of these amendments, No. 37, seeks to ensure that, in exercising his powers to withdraw grant from local authorities and to prevent them from levying supplementary rates or precepts, the Secretary of State must not by holdback prevent local authorities from carrying out their statutory duties and obligations. Unless this amendment, or some other form of words which is satisfactory to the Government's advisers, is carried, it is possible that under Clause 4 many local authorities will be faced with the position where they have no choice but to break the law for not carrying out their statutory duties. Therefore, I hope that Government will take very seriously the amendments which I have put down to ensure that, not only general economic conditions but the obligation to obey their statutory duties are taken into account on the question of the holdback. I beg to move.
Baroness Birk: I thought the idea was that the amendments were being grouped together. Perhaps we can find another copy of the grouping list, which seems to have disappeared. In moving amendment No. 35, I should like to speak to No. 36 as well, because No. 35 paves the way to No. 36—
Lord Evans of Claughton: If I may interrupt, what I was trying to do was to move Amendment No. 34 and speak to No. 37.
Lord Bellwin: I must confess that there is certainly confusion here. The grouping has gone adrift and that is causing difficulties. If the fault is on this side, then I readily apologise. It is important to get it right, if we can.
Lord Bruce of Donington: If I recall correctly, the noble Lord, Lord Evans of Claughton, moved Amendment No. 34 and spoke to No. 37 and, so far, Nos. 35 and 36 have not been called.
Lord Evans of Claughton: No. Amendment No. 34 is in my name. I thought that it would be wise in moving it to consider the same point which comes under Amendment No. 37, which is also in my name. I should not have the temerity to seek to move Amendments Nos. 35 and 36, which are in the name of the noble Baroness, Lady Birk.
Baroness Birk: I am going to have the temerity to move them because they are in my name and that of my noble friend. If the noble Lord agrees, Amendments Nos. 36 and 37 are very much on the same lines. If he does not agree with me, perhaps he will interrupt me now. I am moving Amendment No. 35, if he will agree, and speaking to Amendment No. 36 as well.
The Earl of Avon: If the noble Baroness would speak to those amendments rather than move them, it would be helpful.
Baroness Birk: Yes.
Lord Evans of Claughton: Very well.
Baroness Birk: I am following the suggestion which we received this afternoon from the Government side. As Amendment No. 36 is very similar to Amendment No. 37, it seemed to me that it would save some time if I spoke to them both. I shall speak very briefly, as the noble Lord, Lord Evans of Claughton, has covered the ground.
The way that this block grant works out fails to take regard of the conduct of local administration both in relation to their efforts to control expenditure and in relation to local economic conditions which may well have unequal effects on an individual authority. Legislation imposes responsibilities on local authorities on two levels: first, in those areas in which they are under a duty to provide an efficient service, irrespective of cost, and, secondly, in those areas which local authorities have the power to provide and in which they may operate their discretion regarding the level of provision. The imposition of the Bill in its un-amended form (the wording of the two amendments is different, and I will explain in a moment why I prefer the wording standing in my name and that of my noble friend, as well as the noble Lord, Lord Evans of Claughton, who has his name to Amendment No. 37 as well, which is the alternative wording) could lead to an adverse effect on essential services. Either amendment would serve to retain a high level of central control without unreasonable restriction on local administration when operating in a reasonable and prudent manner in the service of the population in their areas. Without an amendment along these

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lines, the Bill will ultimately lead to further erosion of local democracy and perpetuate the inequalities in local services. The reason why I prefer the first amendment, Amendment No. 36, is that there the wording is:
"The local authority have taken all reasonable and prudent steps to avoid an unreasonable increase in expenditure",
which is probably marginally better than "an acceptable level" in Amendment No. 37, which also specifically says that the local authority will notify the Secretary of State, whereas Amendment No. 36 leaves it more open. Obviously, the motivation behind both amendments is exactly the same and what they are trying to achieve is the same. Therefore, I shall not say any more about it at this point.
Lord Bellwin: I should like to cover Amendments Nos. 34 and 37 and also to comment on Amendments Nos. 35 and 36. I am glad to have the opportunity to discuss these amendments, which are expressed in similar terms to ones which were negatived during the Committee and Report stages of the Bill in another place. I agree that Clause 4 is concerned with the proper relationship of central and local government and, above all, with central Government's right to determine the overall level of public expenditure and the level of grant support provided by central taxpayers to local services. These are important questions, and I do not want to be accused of failing to address myself to them.
It should be axiomatic that the control of public expenditure is an essential tool of economic management and is the proper concern of those responsible for the national economy. There is nothing new in local government being set expenditure targets. What is new—or, rather, what was new in 1980–81—is the failure of local government as a whole to meet those targets, sometimes by a wide margin. This year initial budgets indicate, as I said earlier today, aggregate overspending of £1½ billion. Faced with an aggregate overspend, the Government reduced the aggregate amount of rate support grant payable in respect of 1980–81 by £200 million. The effect of this was felt by all local authorities, irrespective of whether or not they had met their individual targets, for there was no power to distinguish between them under the 1974 Act.
The 1980 Act, which came into force in 1981–82, provided for multipliers to be determined, which will have the effect of adjusting the grant entitlements of individual authorities. My right honourable friend the Secretary of State therefore made it clear that, if there was continued general over-budgeting in 1981–82, he would once again reduce the grant aggregate, but would use multipliers to make sure that the effects of any general grant reduction were felt only by those authorities which had individually over-budgeted. A similar proposal has since been announced for 1982–83.
It is with this use of multipliers that Clause 4 is concerned; a discriminatory use, certainly—but equally certain, in my opinion, is that it is not an unreasonable one. Nor is it an unreasonable extension of the powers of central Government, for it has only become necessary with, I am sad to say, the failure of local
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government to maintain the tradition of voluntary adherence to public expenditure guidelines.
I do not wish to repeat the remarks I was making during the passage of the Local Government (Planning and Land) Bill 1980, but I said then, on more than one occasion, how proud we always were that, year after year, local government got, at worse, within 1 per cent. of the national guidelines laid down, and often much closer than that. We managed to achieve that year after year because we felt, and I used to say this when talking to Labour colleagues on the AMA, that Governments have to govern. That was a basic tenet which we all accepted. But now we see, for the first time, a whole new scene—and no Government can let that go by.
The noble Baroness Lady Birk, said that we must look at these amendments in this context. Of course, they sound eminently reasonable; reasonable steps to avoid an unreasonable increase. But their purpose is to undermine Clause 4 and to make the Government's policy unworkable. Who is to say what are reasonable steps? We would say: those steps which are taken to achieve the small, overall reduction in expenditure that is required of local government. Remember, we are talking here of 5½ per cent. over a three-year period. I cannot help but equate that with the 3 per cent. we were given to achieve in one year, in 1976. That puts it into perspective.
Amendments Nos. 35 and 36, as they stand, would make it impossible to ask local authorities to make any expenditure reductions at all. Amendment No. 36 says that reasonableness must be judged:
"…having particular regard to local economic conditions".
But we are concerned with grant. I would argue that the amount of grant support to local revenues is something that must be judged in regard to national, not local, economic considerations. We cannot allow political disagreements to obscure this fact. I will say again that we were always so proud of the fact in local government that we worked within the parameters even if we did not like them—and be reassured that there were times when we hated them. But there it was—Governments had to govern and that is a tradition to which I would like to return.
The second amendment in the name of the noble Lord, Lord Evans of Claughton, seems on the face of it to be eminently reasonable—but only if one forgets that grant is only one source of an authority's income and that statutory services form only part of their expenditure. Authorities can and should take their probable grant entitlement into account when setting their rate. This Bill does not in any way diminish the duty or the right to do so. Councils also have to consider the level of provision of discretionary services, and the Bill does not take away anything from that responsibility either. And above all, because it is the ratepayers' money that they are spending and not their own, they have the duty to see that their services are provided in an efficient and economical way. I simply do not believe that the cuts for which we have asked should be made entirely at the cost of service levels. Most of them—well, I qualify the "most", but a considerable percentage—can, in my submission, be absorbed simply by running the business of the authority more economically.

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In conclusion, therefore, I say to your Lordships that these amendments, despite their innocent appearance—I use the word not in any offensive way—would undermine the purpose of the clause; and that the clause and the holdback scheme for which it provides are not at all unreasonable, as these amendments would suggest. Therefore, I ask your Lordships not to approve them.
9.46 p.m.
Viscount Ridley: Before we decide this matter I would like to say something about Clause 4. I think it has given local authorities a great deal of worry since it first saw the light of day. I believe it was substantially amended in another place due to the objections of the local authority associations and might be regarded as possibly a sensible compromise now. I am delighted that my noble friend the Minister has not accepted these amendments, because I think they would destroy this rather fragile compromise between all the interests involved. I do not think anybody would disagree with the Minister's targets, the desire to loose his missiles into the total exclusion zone of overspending authorities to hit the right targets if not to hit everybody. I hope he is successful.
He said something on Second Reading, although I am afraid I was not here to hear it, about which subsequent correspondence leads me to think that he is himself preparing a number of amendments to Clause 4 which may achieve a good deal of the purposes of the amendments we are discussing. Whether he is laying minefields for his own torpedoes, or whether he is trying to destroy the arguments he has just put forward, or whether he is supporting the noble Lord, Lord Evans, I do not know. We have not seen these amendments; they have not been published. It seems to me to be leaving them rather late to leave them to the Report stage in this House in a matter of this great importance.
I hope that what he has himself said may lead him to feel that these amendments are not really necessary. I am bound to say that the Association of County Councils are gravely disturbed at the thought of any amendments to Clause 4. They believe it to be a workable compromise which has been achieved in the other place and that it would be wrong to tinker with it, if only because some of the exclusions to holdback and some of the powers which the Secretary of State is asking for in the suggested amendments would, as I think, open all sorts of doors and be wrong. I hope my noble friend might agree that it would be better to leave Clause 4 entirely alone for the very reasons that he has just given to the Committee.
Lord Evans of Claughton: I am not dealing with Amendment No. 36, although I know we have discussed it. I am dealing with Amendments Nos. 34 and 37. I can see the argument the noble Lord puts about Amendment No. 36 being a difficult one to enforce and destroying the whole of his holdback proposals, but I really cannot see why he should take this rather unhelpful attitude to Amendment 34. Surely nobody, of whatever political affiliation, would seek to put a local authority in the position where to carry out its duties it had to break the holdback provisions in Clause 4. I hope the noble Lord can assure us that he is going to put down further amendments, or reassure me that my
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belief is wrong; I hope he can reassure me that local authorities would not be put in the position of having to break the law.
If they were having holdback imposed on them which reduced the level of services they are required by law or by common law to carry out, they would have their grant reduced, they obviously could not impose a supplementary rate, they could not borrow the money because they would have no legal authority; and so if they did make the reduction of expenditure required under holdback, it would be open to individuals to take action against the council for failing to meet their statutory obligations.
I referred to the example that my noble friend mentioned and that I spoke of earlier, of four unidentified local authorities either obviously non-metropolitan counties or metropolitan districts which are being criticised by the inspectorate of schools for not providing an adequate or satisfactory service. If he can reassure me that they would never get into the legal difficulty that I have described of having to break the law in order to comply with Section 4, then I shall withdraw the amendment.
Baroness Birk: Before the Minister replies, I think that we ought to get something clear now. Are the Government going to put down amendments to Clause 4 or not? During his Second Reading speech, the Minister, after referring to Part I, then said on Part II that the Government would possibly be bringing forward amendments. Earlier this afternoon when I complained about the lateness of the putting down of amendments that we were discussing today, I asked the Minister whether any amendments that were going to be put down to Clause 4 would be put down in plenty of time. At that point I must confess that I did not think that we would get as far as we have got this evening.
We are now discussing Clause 4 and spending a considerable amount of time on it. A number of noble Lords have taken part in the debate including the noble Lord, Lord Evans of Claughton, and the noble Viscount, Lord Ridley. It is, apart from anything else, a tremendous waste of everybody's time, if amendments are, at a subsequent stage, going to be moved by the Government and we are all just talking around the subject tonight without knowing what is going to happen. Therefore, I would ask before we go any further whether we can have a straight answer on this question.
Lord Bellwin: I shall comment on the matter raised by the noble Baroness in a moment. But, so that it does not slip my mind, I should like to say this to the noble Lord, Lord Evans, on his point about the statutory duties and his concern that, of course, the statutory duty is so often very flexible: one decides oneself what will be its level. It is always arguable—it is open to challenge if you put it too low, and conversely it could be open to challenge by those who are paying more if it was felt that it was too high. This is a judgment which the local authorities take. Therefore, in my experience, it is not an exact science, if I may put it that way. Also, I make the point that I made earlier—namely, that it might be said that there is an authority which has education as a function.

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It might be considered by some that it was not achieving the levels that it should be. The noble Lord will please note that I am not saying that that is because of what it is spending, but because of what it is actually achieving. One could argue that possibly it was, therefore, using money for some other service that ought to be going for the provision of that one. It is a view which it must take itself, based upon the totality of the grant or its rates; or however it raises its income. Therefore, it is hard to say. I do not know in all the years of my experience—and I am open to be guided on this or to be told something on this—of a situation where an authority has been specifically pinpointed as failing in its statutory duty to provide its service levels. I am open to further debate on that.
I turn to the point made by the noble Baroness who categorically asked whether we are moving an amendment to Clause 4. I understand that we are doing so at Report stage. The great difficulty here—I tried to make it clear earlier on when the noble Baroness was pressing me about why amendments have come down so late, and I expressed my concern about that as well—is that we have been under great pressure from another place to do things and to consult. That is the point: it takes time to consult. As the noble Baroness must know from her own very considerable experience of seeing goodness knows how many Bills through this House when she was this side of the Dispatch Box, the parliamentary counsel has to have his say, he has to go through it carefully word for word and then there are colleagues in the departments—the noble Baroness probably knows the drill better than I do. It is a regrettable point. But again one has to offset the point with where we do not make amendments. We really cannot have it all ways. Unless someone tells me something in the next few minutes that I do not know now, my information is that an undertaking was given in another place that by the Report stage there would be an amendment to Clause 4. That is my guidance, but, if I am wrong, someone will tell me in the next few minutes.
Baroness Llewelyn-Davies of Hastoe: I think that I ought to ask the noble Lord the Chief Whip whether he was aware of this undertaking, apparently given in another place, that there would be amendments to Clause 4 at the Report stage, because this is the important point. When we were discussing how far we would try to get with the legislation tonight, we were told first that the department hoped to go to Clause 3, which we agreed. We were then told that we would go to Clause 4 if there was time and if the debate fitted in properly. We now find that we have been debating Clause 4 under a total misapprehension. We did not expect to debate a clause which would subsequently be amended. This is not the way in which Bills are carried through. I know that my noble friend Lady Birk never did this kind of thing when she was in charge of Bills from the Government Bench. I really must ask for an explanation.
Lord Denham: The noble Baroness has asked me to comment on the business aspects of this. I must say at the beginning that never at any stage have we agreed that we would not go beyond Clause 3 today. From
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business arrangements we were certainly hoping to get up to but not including Clause 5. It is not unusual to make an offer to consider amending a Bill at a future stage, and, equally, it is not unusual, if the consultations have not reached any agreement, not to be able to do it at this particular stage of the Bill. I do not think it would have made a lot of difference whether we reached this particular point tonight or the next day we deal with the Bill. I cannot see what the noble Baroness is worried about.
Baroness Llewelyn-Davies of Hastoe: I am worried about your Lordships' Committee considering a clause which the Government have every intention of altering later on. Surely this is a waste of the Committee's time.
Lord Bellwin: I said during the Second Reading debate—it is obviously on the record—that it might be necessary to introduce Government amendments to ensure that the amendments introduced in another place did not, by accident, prevent us from making those exemptions from holdback that we had already announced for 1981–82. We are very anxious to get this right, and to find a form of words which in no way goes back on assurances given by my right honourable friend in another place and which will ensure that no future Government could use Clause 4 in an arbitrary or capricious way.
Having said that, I understand the point that is being made. I think it is something that everyone would want to see. Clearly, we would want to carry out what we said we would do, but I certainly take the point that I do not know how we can discuss further a clause which I am saying will be altered at a later stage. But then, I do not know how we proceed beyond that.
Baroness Llewelyn-Davies of Hastoe: I am most grateful to the noble Lord. With his usual fairness, he appreciates the point that we are making—not in any antagonistic spirit at all. We understand the haste with which the Government have had to prepare their case, but that is not the fault of the Opposition. I think that I must ask the noble Lord the Chief Whip what he proposes to do now. I should have thought the thing to do would be to stop.
Lord Denham: I cannot quite see the concern tonight over the progress of this particular Bill. I understand that the amendments which we are now discussing are not affected, or are not necessarily affected, by changes that may be made at another stage. Of course, all Governments consider Bills all the way through. The commitment has been given to consider how this particular clause is going to be affected. If the noble Baroness is suggesting that until we know how eventually we might wish to amend this Bill we should put it into cold storage, so to speak, I think that would be an odd way of proceeding. I really cannot see why we cannot discuss these amendments that we are discussing at the moment and take my noble friend's undertaking in the spirit in which it is meant.
Baroness Birk: May I come in on a point of the substance of these amendments. There is a tremendous difference. My noble friend the Opposition Chief Whip

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is right. If in another place you say that you are going to amend a Bill, it is usually taken for granted that the amendments will be placed before the Committee stage of this House. I really have thought back about this in Government, and I have no recollection of ever having brought forward amendments on Report, having gone through a Bill on Committee which had already been discussed in another place, and when it was known that we were going to bring forward amendments which would have forced this House to miss a stage altogether. This is the point about the discussion. If these amendments are going to be brought forward on Report, we lose a stage entirely.
If it was decided in another place, it really has come as quite a surprise to us tonight to find that we are discussing Clause 4 and amendments will come. It is not correct for the Chief Whip to say that it would not have made any difference to these amendments, because we do not know. We might want to amend the Government amendments, and then we are left with just Third Reading. I do not think that that is good enough. I do not want to put the Minister in a difficult position, but we are being put in an impossible position over this Bill.
Viscount Ridley: May I just add the Minister's own words? He said at Second Reading that he might find it necessary to introduce further amendments in Committee. I agree with the noble Baroness, Lady Birk, that we cannot discuss this clause without those amendments, because I feel strongly on them.
Baroness Llewelyn-Davies of Hastoe: I think that the noble Lord, Lord Bellwin, has a clear understanding of the situation on the Bill and where we are in this particular clause. Might I suggest respectfully to the noble Lord the Chief Whip that the whole Committee would find the situation clearer when we start again if we finished discussing, I think it is, Amendments Nos. 34, 35, 36 and 37, and started again with a clear slate.
Lord Denham: If this is clearly the feeling of the Committee, I shall certainly agree to that.
Baroness Llewelyn-Davies of Hastoe: That is very generous of the noble Lord, and we are grateful.
Lord Denham: I beg to move that the House do now resume.
Lord Evans of Claughton: With respect, I was at the tail end of moving an amendment. Whether that is suspended until Thursday I do not know, but I was in the middle of moving an amendment—extremely well, I thought.
Lord Denham: I think that Lord Evans's amendment is the one over which we are having this difficulty, in which case we will adjourn in the middle of the debate on this particular amendment.
I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Port of London Bill
Reported from the Unopposed Bill Committee with amendments.
Epsom and Walton Downs Regulation Bill [H.L.]
The Examiner's Certificate that the further Standing Orders applicable have been complied with was ordered to lie on the Table and the Bill was committed to a Select Committee.
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