Sitting of 9 April 1984

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  SELBY BRIDGE BILL
  Considered; to be read the Third time.
  METALS SOCIETY BILL [Lords]
  Read a Second time and committed
Oral Answers to Questions
  TRANSPORT

    North Greetwell (Traffic Conditions)
    Mr. Leighasked the Secretary of State for Transport if he is satisfied with traffic conditions in the village of North Greetwell in Lincolnshire.
    The Minister of State, Department of Transport (Mrs. Lynda Chalker): Over recent years the Department has imposed a 50 mph speed limit, put up new warning and direction signs, changed the road markings, and we are now providing right turning lanes at the junctions with roads to Nettleham and Reepham to the east of North Greetwell.
    Mr. Leigh: Now that the completion of the A158 and A15 link road will cause more traffic to roar through the
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    village, to the distress and dismay of my constituents, will my hon. Friend implement a ban on overtaking, which was called for as long ago as 1977 by my predecessor, Sir Marcus Kimball?
    Mrs. Chalker: I understand the problem, can be caused when a trunk road which is completely straight and flat passes through a village, but it would be difficult, if not impossible, to enforce such a ban. However, I am prepared to consider the need for further right turning lanes in the area in order to protect the traffic that has to move out from the left hand side of the road.

    East Anglia (Public Transport)
    Mr. Yeoasked the Secretary of State for Transport what plans he has to improve public transport in east Anglia.
    The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell): British Rail has had approval for substantial electrification within and to East Anglia.
    Mr. Yeo: I am sure my hon. Friend shares my desire to see as many people as possible using BR in east Anglia. To that end, will he consider encouraging BR to take advantage of the Manpower Services Commission scheme to improve some of the rural railway stations in east Anglia, many of which are in a rather sorry state?
    Mr. Mitchell: That is an interesting and helpful suggestion. The youth training scheme is primarily a matter for the Department of Employment. In mid-February BR recruited 936 YTS trainees. Sixty have been taken into permanent jobs and 730 remained on the scheme. Last month the Eastern region had 160 trainees.
    Mr. Prescott: In his concern for rural transport, will the Minister recognise that since 1979 about 66 million vehicle miles in stage carriage services have been lost in rural areas? Is it not about time that he got together with the Secretary of State and looked at the interests of rural people instead of giving the kind of answers that he has given today?
    Mr. Mitchell: The hon. Gentleman will realise that his question covers a period in which both parties have been in Government——
    Mr. Prescott: I said in 1979.
    Mr. Mitchell: I beg the hon. Gentleman's pardon. It was a continuation of a trend that had been apparent long before then, as the hon. Gentleman well knows.

    British Rail (Investment)
    Mr. Prescottasked the Secretary of State for Transport what is the total amount of investment in British Rail sanctioned by the Government since May 1979; what is the total amount of investment withdrawn by the board, excluding the advanced passenger train; and what amount of investment he has presently before him for consideration.
    The Secretary of State for Transport (Mr. Nicholas Ridley): The Government have sanctioned well over £2,000 million for British Rail's investment programmes. BR has withdrawn requests for approval of specific projects worth about £300 million. The only project currently before me is electrification of the east coast main line, worth £240 million.
    Mr. Prescott: Will the Secretary of State now recognise that over one third of the investment that has been withdrawn by British Rail, according to its request, has exposed it to the charge that it has sufficient funds? Will he now accept that the British Rail system is under-invested and under-funded compared with Europe, and that this is likely to lead to a reduction of 3,000 miles of track, as suggested in the 1983 report? Is it not time that he ended his complicity with the British Rail management and looked to the support of the railway system?
    Mr. Ridley: I am very happy with my relationship with British Rail whereby any investment projects that it proposes are approved or refused very quickly. That has enabled British Rail to proceed without delay with all the viable investments that it wants to make. The fact that BR is not investing more is not a sign of absence of virility. Investment is proper to be made only when a viable project is identified which can benefit from investment.
    Mr. Haselhurst: Does not the fact that the Government have been willing to sanction electrification of a number of rail lines, including in particular the Cambridge and Norwich lines, presage an altogether happy future for the modernisation and electrification of British Rail?
    Mr. Ridley: Whenever a good case is put to us for investment by British Rail, as on the Cambridge line, to which my hon. Friend rightly refers, we deal with it as quickly as possible. I think he will agree that, in that case the decision was right and was speedily arrived at.
    Mrs. Beckett: Does the Secretary of State not recognise that it is widely believed, not only in British Rail but by people interested in transport, that he has brought pressure to bear on BR to withdraw some of the projects that it had put forward previously, projects that it had defended over the years? Does he not accept that most people believe that his complicity with British Rail, to which he referred so complacently earlier, is leading to the rundown of our rail system?
    Mr. Ridley: If it is widely believed, it had better be quickly widely disbelieved, because it is not true.
    Mr. Soames: Will my right hon. Friend accept from me that many of my constituents are delighted with and congratulate British Rail on the very substantial investment that it has made on the Victoria to Gatwick line? Many hon. Members are very grateful for the services provided by British Rail and much enjoy travelling on them.
    Mr. Ridley: I am grateful to my hon. Friend. He brings up another example of a major investment speedily agreed to, to the benefit of travellers to Gatwick. My two hon. Friends seem to me to speak the truth about this matter. Opposition Members are simply lamenting that what they thought was a good case has ceased to be one. I am very sorry for them, but I cannot help them.
    Mr. Ron Lewis: Can the right hon. Gentleman give the House the complete list of electrification schemes submitted by British Rail and say what pressure he has brought to bear on British Rail to withdraw those schemes that he has mentioned?
    Mr. Ridley: I have the complete list before me, but it would take a long time to read out all the investment approvals that we have had, particularly for electrification. The hon. Member for Kingston upon Hull, East (Mr. Prescott) has had the list. If the hon. Member for Carlisle (Mr. Lewis) wishes me to send him the full list, I shall make sure that he gets it.

    M25 (Bridges 12 and 13)
    Mr. David Marshallasked the Secretary of State for Transport what assessments have been made of the structural defects on bridges 12 and 13 on the M25 motorway; which other bridges are affected; and if he will make a statement.
    Mrs. Chalker: My Department's consulting engineers and contractors are making a thorough survey of the substructure of these bridges, which are under construction. Remedial measures are in hand and will be completed during the construction period. No other structures have been affected, although they are being monitored.
    Mr. Marshall: Who will be responsible for footing the Bill for repairing those bridges? Does it not show a curious lack of judgment that the bridges should have been built on land where ground movements might have been expected anyway?
    Mrs. Chalker: The original site investigations revealed the conditions to be very difficult indeed, but ground movements have exceeded what was planned for and anticipated. It is far too early in the investigations to say whether the problem could have been foreseen, but as soon as I have information to that effect I shall let the hon. Gentleman know.

    Rail Electrification
    Mr. Flanneryasked the Secretary of State for Transport if he has received any proposals from British Rail concerning the further electrification of the St. Pancras to Sheffield line beyond Bedford.
    Mr. David Mitchell: I have not received detailed proposals for the electrification of this route.
    Mr. Flannery: Is the Minister aware that last October a very important national conference was held in Sheffield town hall between, in particular, representatives of the rail and steel industries in an attempt to help the failing steel industry and to secure electrification of that central line? The Secretary of State has told us that investment in the railways cannot proceed because there is not enough money, but will the hon. Gentleman bear in mind that last year £12 billion fled the country and found its way into the coffers of our competitors? Just a little bit of that £1 billion a month could have been put into British Rail and could put workers in the steel and rail industries back to work.
    Mr. Mitchell: There is no proposal before us from British Rail to electrify that route. It is up to British Rail to propose, and for us to dispose. If BR does not see a case that it thinks worth while, it is not for us to impose it upon BR.
    Mr. Flannery: But the Government do impose, and the hon. Gentleman knows it.
    Mr. Speaker: Order.
    Mr. Boyes: In response to my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), the Minister mentioned the electrification of the east coast line——
    Mr. Speaker: Order. We are well past that question now.
    Mr. Boyes: My question is on electrification, Mr. Speaker.
    Mr. Speaker: Come on then.
    Mr. Boyes: When is electrification of the east coast line is likely to begin?
    Mr. Mitchell: As hon. Members will know, the matter of electrifying the east coast main line has been held up, awaiting British Rail's strategy on its inter-city services. We expect to receive that very shortly and we then hope to be in a position to take further decisions.

    Local Government Reform (Transport Services)
    Mr. Wallerasked the Secretary of State for Transport what effects on the level of public transport services he expects to result directly from the abolition of the metropolitan county councils.
    Mr. Ridley: Public transport services will continue to be provided by the PTEs under the control of joint boards, as they were before the metropolitan counties were set up.
    Mr. Waller: As my right hon. Friend will know, people are naturally concerned about various aspects of the abolition of the metropolitan councils. Is it not grossly misleading, however, and does it not lower the argument generally, for the metropolitan county councils to give the public the impression—as they are doing—that the level of transport services will automatically fall as a result of their disappearance?
    Mr. Ridley: I quite agree. In 1983–84 the metropolitan counties determined the revenue support to public transport at £260 million, compared with the total of the protected expenditure level of £220 million. That is not a very big gap, but we must remember the ratepayers' interests.
    Mr. Meadowcraft: Will the Secretary of State accept that the experience of joint boards in local government is
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    not to be commended? How does he expect hon. Members to evaluate the comments that are made about his proposals—many of which are apparently critical—if they are not placed in the Library for us to see?
    Mr. Ridley: We have not yet made firm proposals on this issue. They will come forward in the Bill to abolish the metropolitan counties, and that will be the time for the House to comment on them.
    Mr. Leadbitter: Is the Secretary of State aware that I recently wrote to him pointing out 10 serious objections that had been raised by public bodies because the proposal to abolish the metropolitan counties will adversely affect transport? With great respect, although I shall await the right hon. Gentleman's answer, will he tell us to what extent he will take note of the authoratative and considered opinions of those who have made representations to him?
    Mr. Ridley: With great respect, I must await the hon. Gentleman's letter, which I have not yet received.
    Mr. Snape: The integrated transport service, which is now administered by the six metropolitan counties, is to be fragmented between the 36 metropolitan district councils, the six joint boards and the Department's regional offices under the Government's proposals. Is the right hon. Gentleman really saying that such fragmentation will lead to a more efficient and cost-effective provision of service than that which is presently provided by the metropolitan counties?
    Mr. Ridley: The hon. Gentleman knows that it is proposed in the White Paper that the PTAs should be taken over by joint boards. That means that they wilt be the authorities that will determine the future of public transport in the metropolitan counties. There is no need to add the districts, the boroughs or my regional offices. The proposal is exactly as I have said.

    London Regional Transport Bill
    Dr. Twinnasked the Secretary of State for Transport how much his Department is spending on publicity to advertise the consequences of the new London Regional Transport Bill.
    Mr. Ridley: Nothing in contrast with the GLC, which has now voted itself £3 million for its political campaigning. It is for consideration whether it is tolerable for ratepayers' money to be spent on grossly misleading literature and advertising.
    Dr. Twinn: I welcome my right hon. Friend's answer. As the Government are not able, and should not he able, to spend money on disgraceful advertising campaigns of the sort that have been embarked upon from across the river, will my right hon. Friend take this opportunity to deny the rumours that are often repeated from across the water that the Government have a hit list of bus and tube services in London and that the old-age pensioners' bus passes are still in danger?
    Mr. Ridley: I am grateful to my hon. Friend for his remarks. I have repeated the assurance—so many times that I forget the number of times that I have done so— that neither the hit list nor damage to the old person's bus pass is part of our plans. It is difficult for Londoners to realise that instead of having local authorities which issue factual material in a rather dry way, which has been their

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    experience in the past, they have a local authority which is actively campaigning and issuing propaganda on the basis of extremely dubious material. They are being subjected to a dubious type of hard sell, and not an accurate description of the facts.
    Mr. Anderson: Should not the ratepayers of the GLC be allowed to decide for themselves, through the ballot box, whether the expenditure is worth while? As the Minister has said that he will not use advertisements to state that some of the GLC's propaganda is wrong, is he prepared to give a solemn and binding undertaking to the House that the underground stations that have been mentioned will not be closed?
    Mr. Ridley: I have given the undertaking for which the hon. Gentleman asks on so many occasions that it is astonishing that he has not heard it. I can only assume that he has not attended the House for months on end. In response to the first part of the hon. Gentleman's supplementary question, I ask him to consider when the ratepayers were ever consulted by the GLC on the cost of London Transport or on any of its other extravagant policies, including the £3 million cost of its political campaigning. When have these policies been put to the ratepayers to ascertain whether they want them?
    Mr. Tracey: Will my right hon. Friend confirm that £30,000 of ratepayers' money went from the GLC to an organisation called Capital, which has spread scurrilous propaganda about the Government's proposals? Will he confirm also that London Transport is unnecessarily costing over £2 million a month because of the actions of the GLC's transport committee?
    Mr. Ridley: My hon. Friend is exactly right. Large sums have been spent on a political campaigning organisation. The Government would not be empowered to do that without specific legislative provisions. I must tell my hon. Friend, with regret, that his estimate of the cost of the GLC's stewardship of London Transport is, I believe, very much on the low side.
    Mr. Norman Atkinson: The Secretary of State implies that there has been a lack of morality. How does he justify the statement that he made earlier following his authorisation of the discussions that are taking place about the privatisation of the line between Victoria and Gatwick? He was doing so——
    Mr. Speaker: Order. The question is directed specifically to publicity on the London Regional Transport Bill.
    Mr. Atkinson: My supplementary question is directed to that, Mr. Speaker. I am concerned about Greater London transport because a part of the discussions that are taking place, which have been authorised by the Secretary of State, concern the privatisation of the line from Victoria to Gatwick. The discussions are taking place on the authorisation of the right hon. Gentleman.
    Mr. Speaker: Order. I do not think that the hon. Gentleman is ingenious enough. Hon. Members must relate their supplementaries to the questions that appear on the Order Paper. It is unfair to return to an earlier question. I had to stop the hon. Member for Houghton and Washington (Mr. Boyes) doing so earlier this afternoon, and I must stop the hon. Gentleman.
    Mr. Atkinson: So is Mr. Speaker being unfair.
    Mr. Speaker: Order. I call the Secretary of State.
    Mr. Atkinson: I wish to prove my ingenuity.
    Mr. Speaker: I must ask the hon. Gentleman not to persist.

    London (Bus and Underground Services)
    Mr. Snapeasked the Secretary of State for Transport whether he has met the chairman of London Transport to discuss future manpower levels on London's bus and underground services.
    Mr. Ridley: I have noted with interest the chairman's views, expressed in his 1983 plan and other public statements, that considerable manpower savings are possible on London Transport without detriment to the quality of service offered to Londoners.
    Mr. Snape: Is the right hon. Gentleman aware that that splendid organisation Capital to which the hon. Member for Surbiton (Mr. Tracey) referred, has projected more than 13,000 job losses for bus and Underground staff? Is he further aware that the transport correspondent of the Financial Times reported on 21 March that the Department wants between 12,000 and 14,000 job losses during the next few years? Has there been some collusion between those two unlikely sources? What is the right hon. Gentleman's estimate of job losses when the London Regional Transport Bill becomes law?
    Mr. Ridley: I can confirm neither figure, nor would it be for me to do so. I shall leave the efficiency of London's transport to the future chairman of LRT when he takes office. However, I must point out that since 1971 there has been a decline of 25 per cent. in the number of passengers using London Transport, but a decline of only 5 per cent. in the number of staff serving them.
    Mr. Bottomley: Does my right hon. Friend accept that London travellers and ratepayers want an improvement in the efficiency and productivity of London Transport? Will he discuss with the chairman exactly what contribution Les Huckfield and Arthur Latham are making to the efficiency of——
    Mr. Norman Atkinson: Now tell him, Mr. Speaker——
    Mr. Bottomley: —either London Transport or the board?
    Mr. Ridley: I entirely agree with my hon. Friend. We can secure——
    Mr. Flannery: That supplementary was nothing to do with the question.
    Mr. Ridley: We can secure that increase in efficiency when London Regional Transport comes under my Department. The money spent on Capital could have been better employed in helping the disabled or some other group that really needs help. It is extraordinary how their interests have been ignored and money thrown at other causes instead.
    Mr. Spearing: Does the Secretary of State agree that while, theoretically, the single manning of buses in central London can be shown to be marginally more economic, in efficiency and availability there are severe disadvantages to such a system?
    Mr. Ridley: No, Sir. The economic advantages are obvious and can be costed in millions. London Transport's studies show that the assault rate on bus staff per bus-mile on buses with conductors was 4·3 times higher than on buses operated by one person.
    Mr. Parris: Will my right hon. Friend confirm that if manpower can be saved on London Transport, a better service can be provided for lower fares?
    Mr. Ridley: Of course, my hon. Friend is right. It also means that we can take some of the burden off the ratepayers, as I hope to demonstrate later today. I hope that my hon. Friend will stay to listen to me.
    Mr. Stephen Ross: Is the right hon. Gentleman aware that, as a ratepayer in London, I am about to lose my rights to direct representation to the GLC or the LRT authority, which will now be run by the Secretary of State's Department? I plead with him to give more thought to the answer that he gave to the hon. Member for Newham, South (Mr. Spearing). Is the right hon. Gentleman not aware that to travel on a one-man-operated bus in London in peak hours is an absolute disaster, and that any saving is not worth making? Do not the statistics which the right hon. Gentleman has given relate to after midnight?
    Mr. Ridley: In a way, it is a pity that the hon. Gentleman will benefit in two directions. As a ratepayer in London he will have a reduction in the rates that he has to pay and, secondly, he can come to the House and raise his grievances direct with me across the Floor. I cannot think of anything better for him.

    M65–M6 (Link)
    Mr. Pikeasked the Secretary of State for Transport what progress has been made in reaching decisions on the M65 motorway link to the M6 and other motorway improvements in the north-west.
    Mrs. Chalker: We have made substantial progress in analysing the additional information on traffic, economies, and costs which we required in order to make a sound decision on Lancashire county council's case for the green route to the M6.
    Mr. Pike: Is the Minister aware that all councils, political parties and industries in north-east Lancashire are anxiously expecting this long-awaited decision? They recognise that communications are essential if north-east Lancashire is to survive and experience an economic recovery, and look forward to an early and favourable decision.
    Mrs. Chalker: I understand the impatience over a decision. Examination of the county council's report has, however, been a time-consuming and complex matter. I have received many representations both for and against the green route. I shall consider them all carefully before coming to a decision, which I hope to make fairly shortly.
    Mr. Thurnham: Is my hon. Friend aware of the benefits that would come to industry in Bolton with the improvement of the motorway connection, especially to the container port at Seaforth?
    Mrs. Chalker: I am aware of that aspect. That is one matter that I shall take into account when making my decision.
    Mr. Straw: Is the Minister aware that the residents of Brownhill, Pleckgate Revidge and the Green Bank areas in Blackburn have suffered increasing anxiety during the past four years since the original decision to cancel the link between the M65 at Blackburn and the M6 near Preston? What does the Minister mean by saying that "fairly shortly" she will make a decision? Will that decision be taken before or after May?
    Mrs. Chalker: The hon. Gentleman is asking me to look into a crystal ball which has not yet been completely formed. I understand the anxieties of the people of Brownhill. As I have said to the hon. Gentleman during meetings, some improvement at Brownhill will be needed, regardless of the decision on the green route. I shall come to a decision as soon as I can. I should not like to estimate whether it will be in six weeks or longer, because of the complexity of the information that is currently with the officers in my Department.
    Mr. Dover: Will my hon. Friend confirm that a strong body of opinion believes that there should not he a dual carriageway link to the M6 south of Preston, but that it would be better to upgrade the routes to the centre of Preston, as my hon. Friend and her predecessor have said on earlier occasions.
    Mrs. Chalker: Representations have been made both for and against a dual carriageway route to the M6. Considerable anxieties have been expressed about the link between the M6 and the M61 and the bypass to the south of Preston. All those matters must be taken into account before I can decide whether to go forward with the green route.
    Mr. Jim Callaghan: With regard to the improvement of motorways in the north-west of England, what date does the Minister have in mind for the start of work on the last remaining link of the M66 between Middleton and Denton?
    Mrs. Chalker: There is quite a long way to go before we can take a decision on that matter, but I shall write to the hon. Gentleman with the latest available information.
    Mr. Robert Atkins: Does my hon. Friend recognise that those of my constituents who are likely to be affected by this route share the view of hon. Members on both sides of the House that the green route is the obvious answer? My constituents will not thank her or anyone else in the Department if they choose the alternative, which would damage an already overcrowded road and property, including the 13th century Samlesbury hall.
    Mrs. Chalker: We must take account of all matters, such as ancient buildings and famous places, as well as the need to get traffic to ports as quickly and easily as possible. Many other considerations are involved in coming to this quite difficult decision. I believe that all hon. Members representing the area have now either met or had extensive correspondence with me on this matter. I ask them to be patient for a few more weeks until we have completed our investigations.

    Coal Freight (Wagons)
    Mr. Andersonasked the Secretary of State for Transport whether he has discussed with the chairman of the British Railways Board the effect of Government investment on the availability of wagons for coal freight movements.
    Mr. Ridley: No, Sir, but BR could count on my support for worthwhile investment if it considered it necessary. The hon. Member will recall that last year my right hon. Friend the Secretary of State for Wales made section 8 grants of more than £400,000 for four projects in south Wales for the carriage of coal by rail.
    Mr. Anderson: Leaving aside the temporary difficulties caused by the strike, is the right hon. Gentleman aware that, for financial reasons, British Rail is unable to carry all the freight, particularly coal, that is currently available, as it does not have enough conventional wagons to meet the demand? Is he also aware that in south Wales the National Coal Board has criticised the rapid rundown by British Rail of its wagon fleet, which will make inevitable a greater switch from rail to road, with all the consequent environmental problems for residents?
    Mr. Ridley: That is not correct. There is no shortage of rail wagons, conventional or otherwise, capable of carrying coal. If there were, British Rail would certainly be allowed to make good the shortage.
    I know that there are problems about handling coal trains, particularly at power stations and steel works in south Wales. British Rail is in contact with the other corporations involved and they are trying to solve the problems. I know that there is also a problem at the coal washery at Aberpergwm, but I can tell the hon. Gentleman the good news that when that problem is solved there will be rail traffic taking the briquettes from Blaenant to the power station, so there will be no shortage of opportunities for the railways.
    Mr. Nicholls: Does my right hon. Friend agree that there are many reasons, not least the damage that would otherwise be caused to the roads, for greater emphasis to be placed on getting heavy transport, including the transport of coal, on to rail and off the roads?
    Mr. Ridley: As I said in the objectives for the chairman of British Rail, we should welcome anything that British Rail could do to get more freight going by rail. Section 8 grants are available to help the private sector to accommodate more rail traffic. Since 1979 we have spent £29 million on these grants. We are doing all that we can, and so is British Rail.
    Mr. Roy Hughes: Does the right hon. Gentleman recall that I wrote to him on this matter a short time ago after receiving representations from my local branch of the NUR? Does he agree that there is a need to keep traffic on the railways, not only because of congestion on the roads, but because of the present lack of maintenance of the roads?
    Mr. Ridley: There is no problem here. British Rail is not short of the necessary wagons. The business has to be arranged between British Rail and its customers, and I know of no problem. I do not know what the worry is all about. I hope that if there is a worry, hon. Members will write to the chairman of British Rail and let him know what it is.

    British Rail Engineering Ltd.
    Mr. Ron Lewisasked the Secretary of State for Transport when he expects to receive British Rail's report on the future of British Rail Engineering Ltd.; and if he will publish it.
    Mr. David Mitchell: We have asked British Rail to complete its review of BREL by the middle of the year.
    Mr. Lewis: Will the hon. Gentleman give an absolute assurance that the Government will exercise no political pressure in favour of private companies when they are tendering with BREL for contracts on the railways?
    Mr. Mitchell: I can give the hon. Gentleman that assurance. When BREL is in competition with the private sector for tendering, the procedures are absolutely fair and straightforward.

    British Rail (Inter-city Strategy)
    Mr. Kirkwoodasked the Secretary of State for Transport whether he has yet received British Rail's intercity strategy report.
    Mr. David Mitchell: No, Sir.
    Mr. Kirkwood: Does the Minister accept the need for an urgent review of the decision on the electrification of the east coast route, which will flow from the inter-city strategy report by British Rail? Will he assure the House that as soon as he receives the strategy report he will eschew the predilection for written answers and will come to the House and give us not only the Government's initial reactions to the report, but a timetable according to which decisions will be taken?
    Mr. Mitchell: I shall have to consider that in the light of the contents of the strategy report. I should point out that there has not yet been a Question Time during which the matter has not been raised.
    Dr. Mawhinney: Over the past few months I have regularly asked my hon. Friend to convey to the chairman of British Rail the desire of the House that the report should be brought forward as quickly as possible. Has my hon. Friend yet had a chance to convey that message to the chairman?
    Mr. Mitchell: Yes, Sir.

    Cars (Rear Seat Belts)
    Mr. Roger Kingasked the Secretary of State for Transport whether he is prepared to consider the compulsory fitment of rear seat belts in passenger cars.
    Mrs. Chalker: We are considering this matter, but we are not yet ready to make a decision.
    Mr. King: Is my hon. Friend aware that about 5,000 new cars come on to our roads every day? Does she agree that the fitting of rear seat safety belts is a proven safety device which should be encouraged voluntarily, not compulsorily?
    Mrs. Chalker: I am aware of what my hon. Friend says. We estimate that at the moment between 5 and 10 per cent. of new cars already have rear seat belts fitted. I assured the Select Committee last month that I would consider its report before making a final decision. I believe that the report will be forthcoming fairly shortly, and I hope soon to be in a position to make such a decision.

  ATTORNEY-GENERAL

    Building Industry (Litigation)
    Mr. Chapmanasked the Attorney-General if he is satisfied with the status and number of official referees dealing with litigation in the building industry.
    The Attorney-General (Sir Michael Havers): I refer my hon. Friend to my speech on this subject in the debate on the Adjournment on Friday 30 March 1984 — to which my hon. Friend made such a substantial contribution—at columns 626–28.
    Mr. Chapman: Is my right hon. and learned Friend aware that the building industry welcomed the announcement in that Adjournment debate of the increase in the number of official referees from four to six? Will he use his good offices to try to improve the facilities for those courts, which do an important and valuable job?
    The Attorney-General: We are very much aware of the need for improved accommodation. The matter is being given urgent consideration.

    Official Secrets Act (Prosecutions)
    Mr. Winnickasked the Attorney-General if he will list the criteria used for deciding whether to prosecute under section 2 of the Official Secrets Act.
    The Attorney-General: I take my decisions on the basis, first, of an objective assessment of whether sufficient evidence is available to prove the offence. On this and on other aspects of the case I, of course, have the advantage of the advice of the Director of Public Prosecutions. Having satisfied myself on that, I then consider whether, in the particular case, the public interest requires a prosecution. I have no hard and fast rules. Each case is judged on its own particular facts and with special regard to the circumstances both of the alleged offence and of the alleged offender. This is simply an application of my general guidelines on the criteria for prosecution which I issued in March last year and a copy of which is in the Library. Official Secrets Act cases receive no different treatment.
    Mr. Winnick: Is the Attorney-General aware that there will be much disappointment about the refusal of the judges to permit Sarah Tisdall permission to appeal against an unjust and unnecessary sentence? How does the right hon. and learned Gentleman explain his attitude to section 2 of the Official Secrets act when he was in opposition and the manner in which a clearly politically motivated prosecution was brought in this case? Was Sarah Tisdall's real offence that she objected to Parliament being deceived over the delivery of cruise missiles to this country?
    The Attorney-General: I suspected that the hon. Gentleman would say that the prosecution was "politically motivated". Whether Franks, the 1889 Act or the 1911 Act had been in operation, it would have been an offence just the same. What Miss Tisdall did was a grave breach of trust. She lied a number of times about what she had done and sought to blame her colleagues for her own crimes. I decided that the case should be tried at the Central Criminal Court, and today the Court of Appeal has upheld the decision of the trial judge.
    Mr. Stanbrook: Although the recent prosecution and sentence in the Tisdall case were fully justified in all the
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    circumstances, is it not a fact that not all confidential information in the Government's possession needs the protection of the criminal law? Will my right hon. and learned Friend therefore consider whether we have got it right in the present law?
    The Attorney-General: My hon. Friend will recall that in 1979 we tried to legislate in respect of the Franks report. It went through some stages in the other House, but there was a concerted attack on it by Fleet street and many other organisations and it was withdrawn. Recently my right hon. Friend the Prime Minister has said that the Government have no intention of introducing further legislation on the subject.
    Mr. John Morris: During the weekend the Attorney-General stressed the need for reasonable consensus in law reform. Does he recognise that there is a growing consensus for reform of the catch-all effects of section 2 of the Official Secrets Act, which the Franks committee described as a mess? Should not the Government seize this nettle and accept that, in a democratic society, there should be provision to protect only such of the Government's information that can be proved to require protection? Does he further agree that the Government should not continue to demand coverage of such a wide umbrella, which has been described as a blot on the statute book and results, unhappily, in many people questioning the need for protection at all?
    The Attorney-General: If the right hon. and learned Gentleman will take the time and trouble to examine the cases that have been brought under section 2 since I have been Attorney-General, he will find that each was absolutely justified. The catch-all provisions are dangerous only when employed by a Government to prosecute the type of case that he described when such prosecutions are unnecessary. I am pround of my record during the five years that I have been Attorney-General. I have used section 2 sparingly and only when absolutely necessary.
    Mr. Mark Carlisle: Although I do not dispute the need to re-examine section 2 of the Official Secrets Act, will my right hon. and learned Friend, in view of the comments of the hon. Member for Walsall, North (Mr. Winnick), take the opportunity this afternoon to reiterate that individual sentences must be matters for individual members of the judiciary and the courts? It would be disastrous if the House attempted to impose its views on matters such as whether the sentence is too harsh or too lenient.
    The Attorney-General: My right hon. and learned Friend, whom I welcome back, is right. He will have noticed that I did not refer to sentences when the original question was put to me. It is an important part of our constitution that the Executive and the judiciary are kept entirely separate. It would be quite wrong for any Government to comment on sentencing, as that could damage the independence of the judiciary, on which we pride ourselves.
    Mr. Merlyn Rees: If there is to be no reform of the Official Secrets Act—it is a difficult matter—will the Attorney-General examine the report of the Franks committee, on which I served 12 years ago, which devoted much time to classification, which is a subjective rather than an objective matter? Even if there is to be no reform

    15
    of the legislation, surely the Government could consider classification, which I am sure plays a part in the nature of the sentence if the classification is too high.
    The Attorney-General: I entirely understand the right hon. Gentleman's point. I refreshed my memory on the Franks report this morning. According to proposal No. 6, it is quite clear that, even if we had implemented Franks by statute, the offence by the girl in question would still have been an offence. However, that is not a matter for me, as the right hon. Gentleman, as a former Home Secretary, knows. I shall ensure that his comments are drawn to the attention of my right hon. and learned Friend the Home Secretary.
    Mr. Dubsasked the Attorney-General how many people have been proceeded against under section 2 of the Official Secrets Act since 1979.
    The Attorney-General: Approaching such cases on the basis that I outlined in my answer to the hon. Member for Walsall, North (Mr. Winnick), there have been 14 prosecutions under section 2 of the Official Secrets Act 1911 since 1979.
    Mr. Dubs: Is it not a fact that the case of Sarah Tisdall differs from the others which the Attorney-General has mentioned in that no damage whatever was done to British security, even if it caused major embarrassment to the British Government? Is it not wrong in principle that section 2 should be used in that way and that we have an offence which in the United States and other countries is not an offence but is part of the rights of citizens in a democratic society to know the facts about their Government?
    The Attorney-General: As I read the Franks report and understand the law in other countries, I do not agree with the hon. Gentleman. The classification of documents —a matter raised by the right hon. Member for Morley and Leeds, South (Mr. Rees)—depends on the position when the classification was imposed. The position at the time of trial, as the Franks report pointed out, is irrelevant. When the Ministry of Defence classified the documents as secret, it was obvious for security reasons that plans for the movement of nuclear weapons should be kept secret. Their disclosure on the occasion in question could have heightened the risk of attempts by people opposed to the deployment of cruise missiles to interrupt the deliveries, thus increasing the risk of possible violent confrontation between security forces and demonstrators. It was also potentially a major source of embarrassment to us in our relations with those allies who were consulted about the timetable.
    In retrospect — I am referring to the damage assessment given to the court at the Old Bailey when Sarah Tisdall stood trial—because of some quick alterations in planning and timing by the Ministry of Defence, those expected damages, for which the classification was applied, did not occur.
    Mr. Jerry Hayes: On a point of order, Mr. Speaker.
    Mr. Speaker: I shall take points of order after Question Time.

  OVERSEAS DEVELOPMENT ADMINISTRATION

    United Nations Children's Fund
    Mr. Dalyellasked the Secretary of State for Foreign and Commonwealth Affairs how much it would cost to increase the United Kingdom's per capita contribution to the United Nations children's fund to the average per capita level of the Nordic countries.
    The Minister for Overseas Development (Mr. Timothy Raison): The average per capita contribution level for all purposes of Denmark, Norway and Sweden in 1983—using 1982 population figures—was US $4. Such a level for the United Kingdom would require a contribution of about US $223 million or some £156 million.
    Mr. Dalyell: Compared with $5·03 per head does the Minister think that $1·6 per head from the United Kingdom is a satisfactory contribution for the United Nations children's fund?
    Mr. Raison: I understand and share the belief of many hon. Members in the value and importance of the work that UNICEF does, but we have many pressures on our aid programme and must decide how best to use our resources. The £6 million that we give to UNICEF is not a paltry sum.
    Mr. Rhodes James: Although it is not a paltry sum, and we are grateful for what the Government and taxpayers provide for UNICEF, is that not one of the great success stories of the United Nations family and should not the Government be even more involved in that success story?
    Mr. Raison: I agree that it is a great success story of the United Nations family, and many hon. Members share that view. Each year I shall consider what contribution we can make, but we have many pressures on our resources.
    Mr. Stuart Holland: The Minister is keen to give the House figures on aid in current rather than real terms. What is the difference between the British and Norwegian contributions to UNICEF in relation to the real cuts in the aid budget? The right hon. Gentleman likes to give the House the impression that he is doing the best he can for development, but does he realise that if that is all the contribution that he can make to UNICEF, he may as well be the prince of darkness for all it benefits Third-world children?
    Mr. Raison: Our contribution of £6 million makes a significant difference. I have not sought to disguise the fact that the per capita contribution of Nordic countries is both substantial and greater than ours. Nevertheless, we are doing a good job.
    Sir John Biggs-Davison: Will my right hon. Friend consider a transfer of funds from the British contribution to UNESCO to this desirable cause? Does he agree that when we judge our contribution we should recall the generosity of British citizens to the Save the Children Fund?
    Mr. Raison: I am aware of the generosity of British citizens to the Save the Children Fund. We are examining carefully our position in relation to UNESCO, but I cannot guarantee that we shall give more to UNICEF in the near future.

    Voluntary Sector (Assistance)
    Mr. William Powellasked the Secretary of State for Foreign and Commonwealth Affairs what help is being provided to the voluntary sector for overseas activities.
    Mr. Raison: In the current financial year I have allocated, subject to parliamentary approval, £6 million for the British volunteer programme and £2·59 million for overseas development projects jointly funded with British agencies. During the past four years we have doubled our total help to the voluntary agencies, whose work overseas I greatly value.
    Mr. Powell: I congratulate my right hon. Friend on the excellent improvement in our contribution. What plans does he have for the future funding of voluntary agencies?
    Mr. Raison: The figures that I have given relate to the current financial year, which has only just begun. We review those funds every year, and I shall consider carefully our contribution to the joint funding scheme.
    Mr. Meadowcroft: Will the Minister be sympathetic to providing more resources to the voluntary bodies that enable young people to serve overseas, given that many idealistic youngsters, who have skills and talents that will be valuable to the Third world, cannot find jobs in Britian?
    Mr. Raison: I am very much in favour of the British volunteer programme. Since we came to power in 1979 we have increased our funding of the voluntary programme by between three and four times, so we have a good record in this area.
    Mr. Bowen Wells: Does my right hon. Friend agree that one of the most effective of the many voluntary agencies is Action Aid, which today gave a glass of cold, clean water to the Prime Minister as a symbol of its programme to help people to help themselves? Does he agree that that programme is the best way to help the poorest of the poor?
    Mr. Raison: I am sympathetic to Action Aid and its work, and would always be prepared to consider proposals put to me on its behalf.
    Mr. Deakins: Is not this form of aid the most effective way of getting most aid to the poorest people in the poorest countries? Is it not all the more valuable at a time when the Government are moving from that good objective towards commercial and strategic considerations, which do not enter into the calculations of voluntary agencies?
    Mr. Raison: We still pay great regard to the needs of the poorest countries. The voluntary agencies are effective in that respect, and that is one reason why I consider them sympathetically.

    Africa (Drought Victims)
    Mr. Baldryasked the Secretary of State for Foreign and Commonwealth Affairs what recent help has been made available to victims of drought in Africa.
    Mr. Raison: Since I last reported to the House on 5 December we have committed about £3·6 million of disaster relief and bilateral food aid for drought relief in Africa, together with £2·57 million as our share of the European Community's programme. This brings our total commitment in 1983–84 to £21·82 million. In addition, we have recently undertaken to provide 10,000 tonnes of food aid to Zimbabwe.
    Mr. Baldry: What specific aid is the United Kingdom giving to Ethiopia?
    Mr. Raison: My hon. Friend knows that we have done a great deal for Ethiopia. Last year we provided 19,000 tonnes of food aid and contributed to the £7·5 million worth of food aid provided by the European Community's food aid programme and to the £750,000 worth of Community emergency food aid for Tigre and Eritrea. We have also helped in other ways.
    Mr. Mark Carlisle: I welcome what the Government have done about famine relief in Africa. However, has my right hon. Friend heard the distressing reports of what is happening in Lesotho, and will he undertake to be sympathetic to any request for aid from that country?
    Mr. Raison: I shall consider carefully any request for aid. I visited Lesotho last year, and anyone who goes there must develop some sympathy for it.
    Mr. Andrew F. Bennett: Can the Minister estimate for how long the drought is likely to continue? Does he agree that, even if it rained within the next month or so, there would still be a food shortage in the area for some time?
    Mr. Raison: Only the right hon. Member for Birmingham, Small Heath (Mr. Howell), who was the responsible Minister in the Labour Government, would venture a prediction in that respect. However, this is a serious matter, which my Department is following closely.

    India and Sri Lanka
    Mr. Chapmanasked the Secretary of State for Foreign and Commonwealth Affairs if he will report progress on the Rihand super-thermal power station in India, and the Victoria darn in Sri Lanka.
    Mr. Raison: After some initial delays, progress on the Rihand power station is improving and the work is moving closer to completion in 1988.
    Progress on the Victoria project in Sri Lanka remains close to the original programme. The reservoir has just started filling and the power supply is due to start flowing in July.
    Mr. Chapman: I am grateful to my right hon. Friend for that information. Will he confirm that the Victoria dam project, as well as providing electricity to Sri Lanka, will help to irrigate 112,000 acres? Does he agree that such British overseas aid, drawing upon British building, construction and engineering skills, is the sort of aid that we should commend and encourage?
    Mr. Raison: I fully agree with my hon. Friend. The project is excellent and is being carried out in an excellent way by the British contractors.
    Mr. Spearing: While both these schemes are no doubt excellent in their own way, what is their cost in relation to the possible $6 million extra that might go to UNICEF?
    Mr. Raison: Both these projects are valued at more than £100 million and are, therefore, very substantial. They yield considerable benefits to British employment as well as to the social and economic conditions in the countries concerned. The hon. Gentlemen will have to make up his own mind about the relative value of our contribution in this regard compared with that to UNICEF.
    Sir Peter Blaker: Is my right hon. Friend aware that the Victoria dam, which I had the good fortune to visit a

    19
    few weeks ago, is an extremely impressive engineering achievement which reflcts great credit on British engineering skills and will bring enormous benefit to many thousands of people in Sri Lanka?
    Mr. Raison: It is widely accepted that the Victoria dam is an impressive engineering feat, and the House will be interested to know that it was formally Commissioned by the President of Sri Lanka yesterday.
    Mr. Hayes: On a point of order, Mr. Speaker. I seek your guidance on questions to the Attorney-General. As you know, the Court of Appeal made an important decision about the sentence on Miss Sarah Tisdall. You will notice that a large number of right hon. and hon. Members——
    Mr. Speaker: Order. It seems that the hon. Gentleman is seeking to do something which I hope the House will not do—to extend Question Time by seeking to raise a supplementary question as a point of order.
    Mr. Hayes: I was not, Mr. Speaker.
    Mr. Speaker: I think that the hon. Member was.
    Mr. Hayes: I was going to ask whether there could be an extension of Question Time.
    Mr. Stokes: On a point of order, Mr. Speaker. Is it in order for Opposition Members to make direct criticism of Her Majesty's judges — [HON. MEMBERS: "Yes."] — when they should, in fact, table a substantive motion? Furthermore, in spite of all their criticism, should they not be thankful that they live in England, not in Soviet Russia?
    Mr. Winnick: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I can take only one point of order at a time.
    I must tell the hon. Member for Halesowen and Stourbridge (Mr. Stokes) that it is not in order to criticise Her Majesty's judges, but that it is in order to criticise a sentence.
    Mr. Winnick: On a point of order, Mr. Speaker. As the hon. Member for Halesowen and Stourbridge (Mr. Stokes) said that we should be grateful that we live here and not in Soviet Russia, is not one of the virtues of having a free Parliament that we can express our point of view? I make no apologies for what I said earlier—none at all.
    Mr. Speaker: That is a point of order arising from someone else's point of order, but we must all agree with the hon. Member for Walsall, North (Mr. Winnick) on how fortunate we are.

Fowl Pest
3.32 pm
Mr. David Steel(by private notice) asked the Minister of Agriculture, Fisheries and Food if he will make a statement about the number of outbreaks of fowl pest throughout the United Kingdom, the number of chickens slaughtered and the source of infection, and what steps his Department is taking to prevent the sale of contaminated feedstuffs.
The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling): Eleven outbreaks of Newcastle disease have recently been confirmed in Great Britain. About 420,000 birds have been slaughtered. All the cases where investigations have been completed, with one exception, provide evidence suggesting that the disease was caused by feed contaminated by feral pigeons. Suspicions centred on two storage areas in the port of Liverpool — Huskisson and Alexandra — which have subsequently been strengthened by the isolation of virus from raw material stored there. The feed trade associations have given, and carried out, an undertaking to emphasise to their members the importance of ensuring as far as they can that none of the contaminated materials is used in the preparation of poultry feed. I understand that no materials are leaving the contaminated premises in question without a warning that they should not be used in poultry feed.
We are preparing an urgent amendment to the fowl pest order which will further strengthen these arrangements by giving me the power to declare the storage areas in question an infected place. Further movements of feedingstuffs material from these stores would then be subject to licensing. Finally, we have been in touch with the metropolitan county authority which is considering whether to institute proceedings under feedingstuffs provisions of the Agriculture Act 1970.
Mr. Steel: I am grateful to the Minister for his statement. Will he confirm that the British Poultry Federation considers that the outbreak has already cost the industry millions of pounds, and that in the summer jobs are likely to be lost in the food processing factories because of the lack of chicks and eggs?
Will the Minister explain why the Ministry has not taken powers to stop the distribution of feedstuffs since issuing its press notice on 23 March? Is he aware that there is strong criticism of the fact that feedstuffs have been allowed on to farms not connected with poultry, from which the disease will inevitably spread, as there are very few farms which do not have some poultry on them?
Who will pay for the havoc that has been caused?
Mr. Jopling: When there is an outbreak of this magnitude, naturally one greatly regrets the difficulties that will be caused throughout the poultry industry. We hope that there will be very few, if any, further outbreaks of the disease.
We have been engaged in intensive discussions with all the interests concerned. We sought their immediate assurance that they would seek the co-operation of their members in ensuring that infected material was not used for poultry feed. Since the first discussions, positive evidence that infection exists in feedingstuffs has come to light. We shall need to cover the possibility that individual traders may not give full support to voluntary
22
arrangements. In those circumstances, we considered it prudent to obtain more powers in the event of our not having the same co-operation as we have in this case.
Sir Hector Monro: Will my right hon. Friend accept that we are grateful for the extreme seriousness with which he has treated the outbreak and for the steps that he has in hand? I am sure that that is also appreciated by the British Poultry Federation.
Will my right hon. Friend have discussions with the Secretary of State for Scotland and do all that he can to prevent the disease from spreading into that country, which at the moment appears to be free of it?
Mr. Jopling: I am grateful to my hon. Friend for his opening remarks. We shall discuss the matter with the Scottish Office, but there have been two outbreaks in, I think, Berwickshire.
Mr. Robin Maxwell-Hyslop: After the House has risen for the Easter recess, if my right hon. Friend judges it necessary to bring in compulsory vaccination, will he have power to do it while the House is in recess?
Mr. Jopling: I hope that it will not be necessary to move to compulsory vaccination, but if it is we shall move with a minimum of delay.
Mr. Archy Kirkwood: Is the Minister aware that people in the areas surrounding the infected areas are astonished that the Government, having isolated the source of contaminated feedstuffs, did nothing about it? How can he possibly justify that decision?
Mr. Jopling: The hon. Gentleman has perhaps failed to note what happened subsequent to our discussions with the feed trades. I mentioned it in my statement.
I draw the hon. Gentleman's attention to the statement that was put out immediately by the United Kingdom Agricultural Supply Trade Association Ltd. The final paragraph of the statement, which I shall not read out to the House, says that the association has indicated to the Minister that it will emphasise to members the importance of ensuring, as far as they can, that none of the contaminated materials is used in the preparation of poultry feeds. It is ridiculous to suggest that we have done nothing.
Mr. Robert Hughes: Does the Minister agree that the correct course of action would have been to trace consignments of feed from the contaminated source and to warn individual purchasers of that feed that it might be contaminated?
We welcome the fact that there is no lateral infection of one flock by another, but is there any possibility of there being what I can only describe as lateral contamination in places where feed is held in store before being sent to individual customers?
Is the Ministry giving any help and advice to those whose flocks have had to be slaughtered, so that they may know how to obtain compensation from the suppliers of contaminated feed?
Mr. Jopling: This is a simple matter, on which producers should seek legal advice. I would not presume to give that advice. As to tracing consignments, the material from these stores was one of the rudimentary ingredients which appear in a large proportion of poultry

23
feeds. We thought it right that the best way to do this was through discussions with UKASTA— to which I have already referred—which issued a press notice, and by keeping in touch with the British Poultry Federation.

Coal Industry Dispute (Police Operations)
3.40 pm
Mr. Allen McKay: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"The implications for civil liberties and the rule of law of policing operations connected with the current mining dispute."
In seeking this debate it is not my intention to attack the police force. [HON. MEMBERS: "Oh!"] Despite what Conservative Members are suggesting, my relationship with the police is extremely good. I am sure that the House will realise their needs and also their difficulties. It is in the interests of all concerned—the police, the pickets, the general public and the House — that the issues involved should be aired before we break for the recess.
As I said before, and as the Leader of the House said on Thursday, after all, when it is all over we have "to live together again". The local police have said the same thing to some of my constituents and to some of the pickets. Over the weekend I have had the opportunity to discuss this problem at my surgery, at a family wedding, where most of the people were miners and their families, and all were extremely concerned, with my colleagues over a dinner—[HON. MEMBERS: "Oh!"]—this is because of the urgency of the debate — and also with the legal adviser to the Yorkshire area of the National Union of Mineworkers. Not all the comments were bad. There were also comments on the good nature of many members of the police force. However, what was said emphasised the need, and the urgency, for a debate.
I quote one incident to illustrate this. The deaconess of the church to which I belong complained to me about the treatment of her son, who works not in the mining industry but in British Rail. On three occasions recently he has been stopped and on one occasion was taken out of his car. Not only was his car searched, but he was bodily searched.
Therefore, I stress the urgency of the need for a debate. In recent weeks my right hon. and hon. Friends have had numerous complaints from constituents, as I am sure Conservative Members have had. These complaints do not come only from those working in the mining industry. There is great public concern, and for these reasons I seek leave to move the Adjournment of the House.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"The implications for civil liberties and the rule of law of policing operations connected with the current mining dispute."
I am satisfied that the matter that the hon. Gentleman raises is one that is proper to be discussed under Standing Order No. 10.
Does the hon. Gentleman have the leave of the House?
The leave of the House having been given—
Mr. Speaker: Under Standing Order No. 10, the motion for the Adjournment of the House will now stand over until the commencement of public business tomorrow, when a debate on the matter will take place for three hours.
Mr. Robert McCrindle: On a point of order, Mr. Speaker. I recognise that under Standing Order No. 10 you are under no obligation, either today or on the previous occasions when this matter has been raised, to declare your reasons for deciding one way or another. However, I ask for some clarification about how this Standing Order operates. You will remember that on several occasions in the past two weeks you have refused similar applications, but on the intimation that on this occasion the application had the support of the Opposition Front Bench it seems to have led to a different decision.
In the interests of Back Benchers, which you have rightly sought to protect since you became Speaker, can you make it clear that there is no difference between an hon. Member seeking the adjournment of the House under Standing Order No. 10 with the support of his Front Bench and another hon. Member making a similar application without that support?
Mr. Speaker: Order. I think that the hon. Member is in fact seeking to ask me to give reasons for my decision. He is right in saying that I seek to defend the interests of Back Benchers. I hope he will note that this application under Standing Order No. 10 was by a Back Bencher.
Mr. Tony Marlow: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I do not think that any point of order can arise on what I have just said.
Mr. David Steel: On a point of order, Mr. Speaker. Can you help the House, following your ruling, by saying whether tomorrow's debate, since it will be on the Adjournment of the House, will be a narrow or a wide one? In other words, will it be limited to the important issues raised by the hon. Member for Barnsley, West and Penistone (Mr. McKay), or will it be widened to include more primary issues about the mining dispute itself?
Mr. Speaker: The motion will be on the Standing Order No. 10 application which I have just granted.
Mr. Marlow: On a point of order, Mr. Speaker. You are saying how wide the debate might be. Will it be
26
possible to deal with the issue that the Labour party has brought this matter forward as a means of undermining the credibility of the police because the Opposition have no policies——
Mr. Speaker: Order. This debate will take place tomorrow and not now, please.
Mr. Peter Shore: On a point of order, Mr. Speaker. Your decision about tomorrow's business means, of course, that the Second Reading of the Finance Bill, which was scheduled for prime time tomorrow, beginning at 3.30 pm, will, unless certain other changes are made, not begin until after 7 o'clock. I hope very much that it will be possible for the Leader of the House to make a statement about the rearrangement of the business for tomorrow.
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): With the leave of the House, Mr. Speaker. I take note of what the right hon. Gentleman said, but the plan must be that the precedence that will be given to the debate on the Adjournment under Standing Order No. 10 means that the Second Reading of the Finance Bill will start that much later.
Mr. Ray Powell: On a point of order Mr. Speaker.
Mr. Speaker: Order. I do not want to take any further points of order on my ruling on the Standing Order No. 10 application. Does the hon. Member for Ogmore (Mr. Powell) wish to raise a different matter?
Mr. Powell: It is an important matter.
Mr. Speaker: I hope that the hon. Gentleman will reserve his comments until tomorrow.
Mr. Powell: I am not commenting about that. I want to comment only on your ruling, Mr. Speaker.
Mr. Speaker: Order. I do not think that the House wishes—certainly I do not—to hear any more points of order on my ruling upon the Standing Order No. 10 application, which I have granted.

Orders of the Day
  London Regional Transport Bill
  As amended (in the Standing Committee), further considered.
New Clause

  LONDON TRANSPORT MONEY ACT
  'The Secretary of State, in making the levy upon the rating authorities of Greater London, may only make such a levy which shall not exceed 55 per cent. of the Secretary of State's estimated expenditure in that year on grants under section 12 of this Act, and such a proposed levy shall be subject to consultation with the Greater London Council, the Common Council and the London Boroughs, and shall be authorised by a London Transport Money Act for that year, a bill for which shall be promoted by London Regional Transport.'.—[Mr. Prescott.]
  Brought up, and read the First time.
  3.48 pm
  Mr. John Prescott: I beg to move, That the clause be read a Second time.
  Mr. Speaker: With this it will be convenient to discuss amendment No. 54, in clause 13, page 11, line 26 leave out from 'as' to end of line 9 on page 12 and insert
  'appears to the Secretary of State to be appropriate to recover the amount of the levy authorised by the London Transport Money Act for the year to which the demand relates.'.
  Mr. Prescott: The purpose of the clause and the amendment is to consider means by which we can embody the proper supplementary rate in a money Bill and not in an order as presently prescribed and, secondly, to consider the ceiling imposed upon the ratepayers' contribution to any supplementary rate embodied in a money Bill.
  The Opposition believe that, if implemented, the London Regional Transport Bill will reduce services for Londoners, produce higher fares and, in the last analysis, produce higher rates as a direct result of the Government's policy and desire to reduce the amount of public money put into London Regional Transport.
  The Bill secures a reduction in the Government's contribution to the maintenance of the London Transport system. The Secretary of State has made it clear on numerous occasions that he disagrees fundamentally with the artificial level of fares, particularly in the metropolitan transport areas, and especially — one presumes — in London. Therefore, new clause 12 and the amendment seek to address our concern about the ratepayers' share of the cost of London Regional Transport.
  The Bill is largely concerned with the Government's contribution to London transport. The Government's contribution in TSG, capital and revenue grants is embodied in clause 12. The new clause deals with the proportion of the ratepayers' contribution, which is to be found in clause 13. The Bill gives the ratepayer no guarantee that the maximum of two thirds in clause 13(6) will be maintained. In fact, clause 13(8) says that the Secretary of State may come to the House with an order to increase the maximum proportion beyond 66 per cent. In reality, the ratepayers' contribution could be anything up to 100 per cent., and even beyond if the Secretary of State so wishes. The protection of two thirds in clause 13
  28
  is no guarantee that London ratepayers will be limited to that share of the bill. New clause 12 seeks to change 66 per cent. to 55 per cent.
  The travel card scheme had a surplus of £35 million, which this year went back to the ratepayers and helped to reduce the rate burden in London for the maintenance of London transport. However, the Bill makes it clear that any surplus from the operation of LRT similar to that from the travel card scheme may find its way back to the Treasury coffers. The Secretary of State shakes his head. We shall await his reply. He will have to agree that, as the Bill stands, any surplus could go to the Treasury. Presumably the Treasury will decide whether it will.
  New clause 12 seeks to change the means by which the rate supplementary grant will be presented to Parliament and to change to a more realistic level the proportion that should be carried by the ratepayers when the Government take over responsibility for the provision of London's transport. The Bill proposes that the share to be carried as a supplementary rate should in the first instance be no greater than two thirds unless a special order is presented by the Secretary of State to the House. In Committee the theme was that two thirds of the charge would be carried by the ratepayers and one third by the taxpayers in the form of a grant given by the Secretary of State to LRT. Whatever that proportion, it will be embodied in an order to be brought before the House.
  The new clause states that the proportion of the rate to be levied upon London ratepayers shall be embodied in a London Transport Money Bill. The Bill provides that such a supplementary rate shall be the subject of an order, on which there will be a positive vote in the House. As I understand procedure for dealing with orders, if the Government conclude that the percentage should be 66 per cent. and hon. Members wish to reduce the supplementary levy, they will not be able to change that percentage, though they might well be able to do so if the matter were dealt with under the procedures in force in a local council.
  I understand that the procedure for debating orders does not allow for amendments to be tabled. The House will therefore be provided with a maximum of one and a half hours to debate London's supplementary rate for the provision and financing of transport. For many hon. Members, that is not sufficient. I am bound to comment that the Secretary of State said in Committee that he was prepared to consider whether more time could be provided. Under the procedures of the House, if the debate on an order starts before 10 o'oclock, that amount of time can be added to the one and a half hours. If the previous business finishes early, theoretically the House could spend somewhat longer than the one and a half hours embodied in the procedure to deal with an order. Even that is not good enough however, because it still does not allow for amendments to be tabled.
  That is not satisfactory if we are to become the ratepayers' representatives for what is essentially a local service, namely, the provision of transport. There are 32 boroughs and the Greater London council, to begin with. Whatever the Government have in mind for legislation that is yet to be presented to the House for the abolition of the GLC, the rates procedure as determined by the local authority structure allows more than an hour and a half to determine the type of transport, what it will cost, and the rate to be levied for it.
  If Members of Parliament are now to act as councillors, as indeed the Secretary of State confirmed in reply to a

  29
  question by the hon. Member for Isle of Wight (Mr. Ross), there will be an opportunity for only a minute's intervention at Question Time to ask about London Transport or rates. The extensive ways now open to decide such matters in local democracy will be replaced by one minute's intervention at Question Time, and a one and a half hour debate on the rate to be levied. That is an unacceptable proposition for the provision of a service costing hundreds of millions of pounds, and one that is of great importance to the many people dependent on the future policy pursued by London Regional Transport.
  A second difficulty arises because the vote on the rates will not be limited to Members of Parliament representing London constituencies. Any hon. Member from Yorkshire, Scotland or Wales will have a right to decide on the rate that will be imposed upon a limited number of people in the London area for their transport services. That, too, is unacceptable. I therefore hope that the House will accept the argument that to deal with this important matter by a statutory order is unacceptable.
  The alternative embodied in the new clause is a London Transport money Bill. Most hon. Members will be aware that a London money Bill passes through the House regularly. It is a private Bill which is brought forward by the GLC, dealing with the capital requirements of the GLC. My first difficulty is over how the Government will be empowered to launch a private Bill. I presume that such a private Bill would not be presented to the House unless it was in order. Having taken advice from the Table Office, I am advised that it would be possible for the Government to present a money Bill embodying the rate to be levied. The way in which the House deals with Bills, as opposed to orders, would allow ample opportunity to discuss the judgment of the Government on the proportion to be levied on the ratepayers. This would allow an opportunity to debate the annual plans of the Government —as opposed to the statements, of which so much was heard in Committee—on the level of fares, the structure of services, the location of routes and all matters crucial to the provision of a modern sophisticated transport system in London.
  To that extent, a Bill would involve a Second Reading debate, for which a considerable amount of time would be allowed. More time is likely to be allowed for that than for all the procedures involved in an order. The Bill would then be considered in Committee and it would be possible for just those who represent London constituencies to debate the Bill, carrying out as councillors the role allotted to them by the Government, and considering the Government's view of the quality and costs of the service. When compared with the procedures involved in an order, all hon. Members, and particularly those representing London constituencies, will agree that a Bill offers us a far better way of fulfilling our responsibility to the ratepayers in providing what is, after all, a local service. I therefore hope that hon. Members will agree that that part of the new clause offers a much more satisfactory procedure.
  4 pm
  In the metropolitan council areas, elected representatives from the boroughs, and certainly from the district councils, will presumably sit on the boards. They will at least be able to argue with the proposed joint councils the exact provision of services and their cost. However, London is yet again unique, because, as the Secretary of State has said, a new nationalised industry is being set up
  30
  that will be financed from the rates. No other nationalised industry is, in that sense, comparable. Indeed, given what the Secretary of State said in Committee, there is a distinct possibility that London's ratepayers will have to contribute to the public service obligation for those of the Bill's provisions that deal with rail services.
  If the legislation in part II is enacted, Londoners will be unique in that they will have to face the cost of providing the PSO for maintaining the railway lines. That does not happen in other parts of the country, although I readily accept that the metropolitan authorities at present contribute nearly £100 million towards British Rail's PSO. However, they do so by agreement and negotiations between locally elected representatives and British Railways Board. By contrast, in this case, the cost will be determined solely by the LRT and levied by the Secretary of State by means of an order. Thus, London's ratepayers will have to carry, in addition, the burden of contributing to British Rail's PSO, which is normally borne by the taxpayers.
  Perhaps the most important aspect of the new clause is the ceiling to be imposed. The boroughs are entitled to be consulted about the proportion of the rate to be levied. In Committee we discussed the fact that even London's ratepayers had the right to challenge judgments made by their elected representatives. Later we shall deal with amendments covering the possibility of interventions by the courts. Clause 13 deals with the ceiling to he placed on the ratepayers' share of the cost of grants given by the Secretary of State, to be found in clause 12. In clause 13(6), the maximum is set at 66 per cent. Clause 13(8) allows the Secretary of State to impose an extra amount, presumably taking it to 100 per cent. However, in theory, the amount could go beyond that, although I shall not pursue that point now. Nevertheless, it remains true that under the Bill the ratepayers could be charged at 100 per cent.
  The Minister is shaking her head. If she wants to refute that, I shall sit down. London's ratepayers could be asked to pay up to 100 per cent. of the cost of provision by the LRT. That power is in the Bill. If that were not so, there would be no reason for subsection (8). The Minister has not risen to her feet, so it will clearly be possible to levy the full cost on London's ratepayers. Given that, we want to know exactly what the percentage will be. Even before the Bill was publicly launched there was considerable controversy about what proportion should be the ratepayers' share.
  The Secretary of State is, I know, somewhat concerned, because I was given a Bill containing, in clause 13, the figure of 50 per cent. I accept that the right hon. Gentleman may say that the Government thought about that figure and threw it into the clause as a sort of dummy. Well, it is a much cheaper dummy than the 66 per cent. now in the clause. The crucial question is what proportion the ratepayers will have to bear. For the sake of the argument I shall address my remarks to the mark two version of the Bill, which contains the figure of 66 per cent.
  On Second Reading the Secretary of State offered us several quotes, although, to be fair, when he spoke of the ratepayers' share being 90 per cent. he was citing Literature which he said had been published by the GLC. From my inquiries, I understand that that was largely to do with the

  31
  effects of the penalties resulting from the Government's policy on block grants and the "Fares Fair" system, which became the subject of court proceedings and so on.
  On Second Reading we learnt that the Minister thought that the figure was probably nearer 72 per cent. In Committee we produced a Tory Office leaflet where it was suggested that the ratepayers' share was at present 80 per cent. At a later stage in Committee the Minister rapidly jumped up to say that the figure had fallen to 69 per cent. I shall quote the passage if the Minister so wishes, but I do not think that that is necessary. She is on record as saying that, on reflection, the figure had fallen by three percentage points from 72 to 69 per cent. Thus, we make progress from 90 per cent. to 80 per cent. to 72 per cent. to 69 per cent. and, I hope, even further.
  The Minister of State, Department of Transport (Mrs. Lynda Chalker): For the sake of the record, I should point out that the question of what the percentage was came up when we were discussing revenue support. In Committee I explained that the figures used by the Department were the GLC's revenue grant determinations for 1983–84. There was a difference of three percentage points because the GLC had deducted the £25 million deficit from the 1982–83 figure which had been included in the determination and the estimated surplus of £35 million. It was the exclusion of the surplus that might have made a difference of three percentage points to the Department of Transport. It was a matter of interpreting the figures, which, as I think the hon. Gentleman will acknowledge, have been very complex throughout.
  Mr. Prescott: I thank the Minister of State for making that intervention. The hon. Lady has not contradicted what I have said.
  Mrs. Chalker: I have put the matter straight for the record.
  Mr. Prescott: I shall try to put it straighter. It is right that the travel card system has produced £35 million of extra income, and we are concerned about the cost to the ratepayer of the provision of transport for 1983–84, the last year of full control under the GLC. The £35 million went back to the GLC and was used to reduce rates for London ratepayers. That means that we cannot add that figure to the cost of transport provision for 1983–84. It seems that the Minister of State accepts that argument and in Committee she talked about the ratepayers providing 69 per cent. of the cost of the provision of transport in London. She reduced an earlier estimate by three percentage points. Percentages inevitably become confusing when statistics are thrown around. I am grateful to the Minister of State for writing to tell me that the experts from the GLC and the Government met and agreed the figures. I am pleased that there is general agreement. The totals are agreed, but items such as the £35 million that was generated by the successful travel card scheme still remain controversial.
  The central issue to which the Secretary of State should address himself is the cost to London ratepayers for the provision of transport in the 1983–84 transport year. Once that figure is established, it is relevant to consider whether 55 per cent., the percentage embodied in the new clause, is realistic. I think that there is general agreement that the
  32
  percentage decreased from 72 to 69 per cent. because of the £35 million which was generated by the travel card system. Revenue support for 1983–84 was £235 million and we can agree that the generation of £35 million has reduced it to £200 million. It has been agreed between the Department and the GLC that the £25 million of council grants to London transport applies to the previous year. That cannot be regarded as a charge on the running of London transport during 1983–84. This makes it possible to reduce the total by £25 million.
  There is a third item, which is controversial and which has not been accepted by the Government since the Minister's letter of 2 April. The experts have discussed a further reduction of £17 million, but the controversial item is the £48 million that London Regional Transport wishes to retain for redundancies within London Transport. That is not acceptable to the GLC, because it is not prepared to accept that level of redundancies. As the GLC is the paymaster, and as it determines policy as an elected representative body, it is entitled to make that judgment.
  There is a fundamental difference between the methods employed by the Department of the Environment and the Department of Transport in assessing transport supplementary grants. The Departments do not treat them in the same way and the Department of Transport's total of about £46 million is entirely different from that of the Department of the Environment. The GLC makes the reasonable point that in judging what London Transport has cost it is reasonable to take into account the moneys required for TSG and to remove them from block grant considerations.
  4.15 pm
  The figures that have been exchanged between the GLC's experts and those of LRT reflect the difference between the Government's view of the figures and the GLC's approach. The Government consider that the total support amounted to £390 million, and the GLC's calculation is £321 million. If those figures are translated into percentages, the GLC's view is that the support was 55 per cent., and the Government's view is that it was 72 per cent. The travel card consideration would reduce the Government's percentage to 69 per cent. If the transport supplementary grant were treated by the Department of Transport as it is by the Department of the Environment, the percentage would be reduced to 64 per cent. The Government's figure is now much nearer to 55 per cent. and a long way from the 70 to 80 per cent. that was discussed on Second Reading.
  Judgment against the Government cannot be made solely on those percentages. If the Government take control of London Transport, we can presume that they will wish to observe their own recommendations. They will wish to observe protected expenditure levels. The Government have set limits and have given the assurance that there will be no legal action if they are not exceeded. The Government's model of revenue support for London Transport would produce about £114 million. On that basis, the GLC's share would fall from 55 to 41 per cent., which would reflect a low level of ratepayer contribution.
  I am sorry to bore the House with these complex arguments.
  The Secretary of State for Transport (Mr. Nicholas Ridley): There are not many Members present to hear them.
  Mr. Prescott: The important thing is that the right hon. Gentleman and I are here, because many ratepayers are

  33
  concerned about the proportion of the funding that will be levied on them. We can presume that the Secretary of State will not spend at a level that will lead him to penalise himself. No doubt he will spend at about the level that he advocates for other transport systems apart from the GLC and will remain within protected expenditure limits. On the Government's terms, the ratepayer would provide about 52 per cent. of the funding. If that is so, the Government can achieve a level of expenditure for the maintenance of London Transport that is less than the 55 per cent. that is embodied in the new clause. It will certainly be less than the 66 per cent. which the Government have set as a maximum.
  It is hard to understand why the Government want to maintain the part of the clause that will allow a move from 66 to 100 per cent. The Ministers explained in Committee that, in effect, the Government were scared that an extreme GLC would spend all its money and leave them with the burden. That meant that they had to reserve the right to impose an extra burden on the ratepayer.
  That argument can no longer be maintained, because the 1983 Act provides that once agreement has been reached on the expenditure of revenue it is not possible to increase revenue support. That is the law, so I should like to know why it is necessary for the Secretary of State to retain the right to move from 66 to 100 per cent. Notwithstanding an argument over capital requirements, the right hon. Gentleman has a clause that will allow him to claw back resources. He would be able to do so even if the requirements were said to be in capital areas and not revenue areas.
  Quite frankly, the Bill gives the Secretary of State far more generous powers than he requires. It maintains the possibility of 100 per cent., which is not acceptable to the Opposition. Our new clause would allow the House to debate the matter and to impose a more realistic percentage level. We fear that the Bill will allow the Secretary of State to impose a tremendous burden on ratepayers.
  I wish to give the Secretary of State one other matter for thought. He is seeking to change the means of financing capital and revenue, which presently stands at £155 million to £160 million. He told the Committee that he intends that to operate as an expenditure in every year. As the GLC is financing it out of a capital debt fund, and in revenue terms the debts are reduced to £4 million a year, that can mean only that a two thirds share for the London ratepayers is an additional 100 million above what it already costs them.
  With that scale of problem, it is no surprise that the Secretary of State seeks to include 100 per cent. in the Bill. I hope that all London Members—especially those with local government experience — before they start to scream when the orders come before the House, will bear in mind what the Secretary of State is doing in the Bill. The Opposition, on behalf of London ratepayers, are giving an opportunity to provide a money Bill which we can debate in the House. If the House disagrees with the Secretary of State, it can change the percentage. It prevents the possibility of the Secretary of State finding an alternative form of financing that means reducing services, increasing fares, greater privatisation and more unemployment. That is not the solution that Londoners need.
  Mr. Ridley: I shall try to respond to the hon. Member for Kingston upon Hull, East (Mr. Prescott), but he knows that this is complicated country and it is not easy to express
  34
  the arguments and figures in debate. I think that the House agrees that there should be a high ratepayers' contribution to the subsidy to London Regional Transport. London, which has a high per capita rateable resource, has always paid a high proportion of the subsidy. Because London is the capital city, it is visited by many tourists, so the taxpayer also pays a share. I do not wish to go into the complicated local government finance considerations mentioned by the hon. Gentleman. However, in view of London's high rateable value and the many tourists who visit it, a share of two thirds for ratepayers and one third for taxpayers makes sense. It might help the hon. Gentleman to look at the matter in that way rather than the immensely complicated calculations that he has used.
  Mr. Nigel Spearing: I think that I have a point that may appeal to the right hon. Gentleman. Prior to the 1968 Act, the responsibility for London Transport was held by the then Minister, but without any rate precept. Does the right hon. Gentleman believe in the adage, "No taxation without representation?" Where is that representation for the ratepayer?
  Mr. Ridley: The hon. Gentleman knows that prior to 1968 London Transport's losses were small—indeed, in some years it was profitable. The problem of the large subsidy has emerged only since that time. I am not blaming either party, but simply stating that the economics have changed. That is why the question of who should pay —the ratepayer or the taxpayer—has become important. In equity, I do not think that we have the balance wrong with ratios of two thirds and one third. I intend to prove that a two thirds share is lower than Londoners paid in 1983–84 or will pay in 1984–85. We now have the figures for 1984–85, which the House will find interesting.
  There are great possibilities for reducing the amount that will have to be taken from the ratepayers by reducing the cost to London Transport and, therefore, the subsidy paid to it. The more I hear about the potential for saving, the more I believe that that is the aspect on which to concentrate. That is where the ratepayers' relief, in part, will come from.
  The hon. Member for Kingston upon Hull, East raised questions about how the House should handle the annual ratepayers' levy and how it should be expressed in. the Bill. As he said, there is a power to increase the proportion from 67 per cent. In some ways, especially for presentational reasons, it might have been easier not to include that power. I can think of no circumstance in which it will be used. However, if our successors wanted to increase the levy, it would be silly if they had to introduce primary legislation for that purpose only. Indeed, the only way to show disagreement with primary legislation is to vote against it. There is no difference between an affirmative order procedure for increasing the proportion, which the House can vote against, and a short one-clause Bill to increase it, which the House can vote against. It is six of one and two times three of another.
  Mr. Prescott: Is not one difference that the Bill can be amended so that a percentage can be changed, but that that cannot be done with an order? That is a crucial point.
  Mr. Ridley: I stress that I cannot envisage circumstances in which the power would be required. I have no intention of using it. It is a hypothetical case. If an order to increase the percentage were put forward, and

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  the Government did not get that order, they would have to return to the House with a more acceptable percentage. A vote that defeats the Government's proposals, whether on an order or on a Bill, has exactly the same effect— and the Government have to come forward with different proposals.
  There is also a power to decrease the percentage. I shall go further than I have gone before, and say that that is what I hope will happen. As we get London Transport under control and its costs are reduced, I hope to reduce not only the amount that the ratepayers pay absolutely, but what they pay proportionately.
  Mr. Edward Leigh: The hon. Member for Newham, South (Mr. Spearing) mentioned no taxation without representation. Is my right hon. Friend aware that a London-wide rate raises £80 million, while a Lincolnshire-wide rate raises only £300,000? My constituents wonder why, if Londoners want services, such as free bus passes for the elderly, they should not pay for them. My constituents and others throughout the country should not bear those heavy costs.
  Mr. Ridley: I shall not seek to compare Lincolnshire and London. However, I believe it right that the costs should fall in large part on the ratepayers. There is a complicated division through TSG and RSG on how much is paid by ratepayers and how much by taxpayers. It varies with every local authority. There is a different percentage for every year for every local authority.
  The hon. Member for Kingston upon Hull, East wants to introduce a money Bill procedure. That would be too difficult. It would make the timetable for the annual determination even more complex. The Bill would have to go through the House by the end of the year to make the rate determination later. That would add an extra stage to the parliamentary procedure.
  Mr. Prescott: No.
  4.30 pm
  Mr. Ridley: I wonder whether the hon. Gentleman has the right target. His proposal would mean adopting that new procedure for the relatively small amount of money involved in this levy, but leaving the same procedure for the rate support grant, which involves billions of pounds. The rate support grant is simply the subject of an affirmative order, which is exactly what I am proposing for the levy. The hon. Gentleman is mixing his priorities in wanting a money Bill for LRT's expenditure of £300 million, or whatever it is, and a simple affirmative order debate for rate support grant.
  There is no question of debating the police precept. I wonder whether the hon. Gentleman has consulted the Opposition's business managers to ascertain whether they want to accept an obligation to debate such a private Bill as well as an affirmative order on the levy. I am sure that if the Labour party cherished any hope of getting back into office, the Labour Whips would try to dissuade the hon. Gentleman from that idea.
  Mr. Prescott: This is amazing. I do not believe that the right hon. Gentleman has any sympathy for local democracy. We are talking about taking over the role of determining local services. The right hon. Gentleman has made a mistake about rate support grant. Admittedly, that
  36
  involves a larger sum, but he is not now determining the rate. With the consent of the House, the right hon. Gentleman will determine the rate for those people. A rate support grant does not do that directly.
  Mr. Ridley: The hon. Gentleman is, as always, quite wrong. The rate support grant determines the rate. The bigger it is, the lower the rate; the lower the rate support grant, the higher the rate. The rate support grant makes a difference far greater than this measure will ever make. The hon. Gentleman seems to be getting his priorities wrong in wanting an affirmative order for one thing and a money Bill for another.
  The new clause contains suggestions that there should be consultations with the local authorities at the time of setting the rate. The GLC does not consult the boroughs when fixing its precept, and the receiver of the Metropolitan police is not statutorily required to do so when fixing the police rate. There are no precedents to suggest that there should be consultation.
  Last Thursday I went through the list of consultations that we undertake. I believe that the House agrees that that is not the right thing to do. Provision is made for a three-year strategy under clause 7, informing local authorities of fare and service levels under clause 29; the annual business plan under new clause 10; the report and accounts of LRT, which are to be laid before Parliament, under clause 33; and an annual debate on the levy. Consultations can become otiose if we extend them beyond the enormous amount of work involved in those provisions.
  I shall now discuss the vexed question of the percentage presently being paid. There will never be a finite precise and accepted answer to this question, as it depends on the year taken and how these matters are examined. The capital side is an especially difficult matter. The 55 per cent., which the hon. Member for Kingston upon Hull, East has proposed, is fallacious. Payment for a capital debt incurred on assets—this is the first area of disagreement between the Government and the GLC—can be made annually as assets are acquired—for example, buses and rolling stock. That has been the GLC's practice towards London Transport. Payment can be made also by writing off, repaying or amortising the borrowing over the life of the asset, or over a shorter or longer period.
  An annual amount is still to be invested for London Transport, whether that is financed by capital grant or borrowing. It is for the GLC to decide how to finance its capital investment. The GLC decided to finance that investment by annual capital grant. Only in December 1983 did the GLC decide to switch that payment by moving some of the borrowing from the housing to the transport account. The GLC decides how to finance, but the amount of money that has gone to London Transport is there for all to see. It must be right to take into account LRT's annual capital grant. It is pure creative accounting suddenly at this late stage to make a major change in the figures by switching from capital grant to borrowing.
  Revenue is a complicated matter. In 1983–84—that is not the only year that we should consider—the GLC made a determination of £235 million for revenue support. The outturn may well have been only £158 million— and we have just got that figure—but the precept that the GLC charged to the ratepayers was based on £235 million. In discussing the share financed by the ratepayers, it is correct to take the figure of £235 million, not the outturn figure. The 72 per cent., which my hon. Friend the

  37
  Minister of State established in Committee, was derived from the precept, based on the £235 million revenue determination. That was the ratepayers' contribution, about which we last heard in Committee, but I know that the hon. Member for Kingston upon Hull, East seeks to chip it down by a further 3 percentage points because of the carry forward.
  Mr. Prescott: It was the Minister of State who did so.
  Mr. Ridley: The hon. Gentleman, not my hon. Friend the Minister of State, did that.
  A deficit of £25 million was carried forward from last year. Due to the travelcard, a £35 million surplus will be carried forward this year. For the hon. Gentleman's benefit, I point out that surpluses in future years will be carried forward by the Government, thereby reducing the ratepayers' contribution for that year. It is impossible to reach complete agreement on what should happen when one has inherited a £25 million deficit and passed on a £35 million surplus. The figure works out at 72 per cent., which is one of the points of difference between the GLC and the Department. I stick to my belief that 72 per cent. is the right figure.
  Mr. Prescott: The right hon. Gentleman must recognise that there is a difference between carrying forward a £35 million surplus and giving it to the ratepayer, so that the London ratepayer gets all the money. Presumably the proposal that the right hon. Gentleman has just announced means that the ratepayer would get two thirds and he would retain one third.
  Mr. Ridley: No. If money is carried forward, the subsidy needed for the following year will be that much less. To that extent—if the hon. Gentleman wishes to put it that way—the ratepayer will have to produce two thirds of the reduced figure and the taxpayer one third. The basis in the Bill is that the subsidy is shared two thirds and one third. Therefore, if the subsidy is higher than expected, the excess will have to be found in that ratio, and, if it is lower than expected, the benefits will be passed on in that ratio.
  My Department's figures for 1984–85 show that ratepayers will be paying 78 per cent. of the total subsidy. That calculation is not seriously challenged by the GLC, which admits that the figure will be 75 per cent. The dispute is between 69 and 72 per cent. for 1983–84 and 75 and 78 per cent. for 1984–85. I do not believe that those figures will ever be reconciled, because they depend on so many ifs—if the GLC had been receiving grant—it has not—if it had not ignored the allocation of TSG to boroughs' expenditure — it has. There are so many subjective interpretations of the calculation. However, all the figures involved in the dispute are very much higher than the two thirds included in the Bill.
  If LRT were already responsible for public transport in London, ratepayers would be paying 10 per cent. less of the subsidy, as their contribution will be set at a maximum of two thirds of the total. Under the GLC's plans, ratepayers will be contributing nearly 80 per cent.
  In addition, when LRT takes responsibility for public transport in London, there will be large savings from increased efficiency and reduced fraud. For example, the GLC is blocking savings of £20 million in a full year
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  identified by London Transport on extending the one-person operation on buses and on underground and bus engineering. I believe that there are many more savings to come.
  Even more money could be saved or put to better use if the GLC abandoned its extravagant political gimmickry and its £3 million political publicity campaign. All Londoners who are ratepayers or travellers will benefit from the change to LRT, and the benefits will be won without the swingeing fare increases and closures that the scaremongers predict.
  The Bill will be good for all those concerned. I believe that it contains substantial advantages for the ratepayers, not only next year, when LRT comes into existence, but over the years as we succeed in achieving the savings in the management of LRT that the managers themselves believe to be possible. I hope that the House will reject the new clause, because it would not be fair or right to include it in the Bill.
  Mr. Harry Cohen: I support the new clause, which would limit the ratepayers' contribution to the running of LRT. I believe it right that that contribution should not exceed 55 per cent.
  The new clause also provides for proper consultation with local authorities over the expenditure of LRT. The Bill does not provide for adequate consultation about the ratepayers' contribution. The limiting of the ratepayers' contribution and proper consultation are important elements in the new clause.
  4.45 pm
  The contribution of ratepayers is a vital aspect of our debates on the Bill and I am amazed that no Liberal or SDP Member is present. That is a measure of their interest in the contribution of London's ratepayers. I hope that that message gets back to those ratepayers.
  The Government insist on a minimum contribution of two thirds from the ratepayers.
  Mrs. Chalker: Maximum.
  Mr. Cohen: It will become a minimum, because the figure can be increased merely by order.
  Ratepayers will not have a two thirds share of the appointments to the management board or the passenger committee of LRT. The Secretary of State will appoint all the members of the board. The ratepayers will not have two thirds of the say in the running of LRT. My hon. Friend the Member for Newham, South (Mr. Spearing) pointed out that for many years we have operated on the principle of no taxation without representation. That should apply to LRT. If the Secretary of State wants total control of LRT, which he provides for in the Bill, he should pay for it, or he should at least pay much more than is proposed in the Bill.
  The two thirds is an arbitrary figure which the Government plucked out of the air. They originally proposed a figure of 50 per cent., but changed it in Committee. There has been no proper analysis of the correct proportions between ratepayers and the Government. The Secretary of State is trying to shift the burden from the Treasury to the ratepayer.
  Mr. Leigh: If the hon. Gentleman represented a seat outside London, would he still say that the ratepayers' contribution should be limited to 55 per cent.? Why should

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  that be so, when the rate base in London is so much higher than it is in other areas? Why should my constituents have to suffer taxation without services?
  Mr. Cohen: All transport services are subsidised. No service is fully self-financing. That is why the basis of the Bill is so wrong; it suggests that public transport can be run as a business. The Secretary of State said today that London, as the capital city, is a special case and has special problems in running a public transport service. The answer to the hon. Member for Gainsborough and Horncastle (Mr. Leigh) is that the Secretary of State is taking total control of the running of London's public transport. If he wants that, he should pay for it and not put the burden on the ratepayer.
  The Minister of State said on Thursday:
  "There is no hit list and there will not be, and the financial provision that the Government have approved gives no support to the GLC's allegations about the future of LT."
  The hon. Lady was under pressure on that issue. She said:
  "For 1984–85 the Government have approved £300 million of subsidy to LT which is close to LT's budget figure in its three-year plan." — [Official Report, 5 April, 1984; Vol. 57, c. 1136.]
  What the Minister did not say was that the Government's transport supplementary grant figure, showing their own support level, was about £90 million or £100 million. What the hon. Lady did not say about the subsidy is that it will not all come from the Government, but that £200 million of it will come from the ratepayers. There will be no savings for the ratepayers in that respect. The Government are taking advantage of the change to reduce the subsidy and shift the burden on to the ratepayer.
  Mrs. Chalker indicated dissent.
  Mr. Cohen: The Minister shakes her head, but she cannot have it both ways. On Thursday she tried to deny that there would be service cuts. She said that the level of subsidy would still be high. It was in that connection that she mentioned the figure of £300 million. Today she is facing pressure, not about service cuts, but about the ratepayers. We are concerned that ratepayers should not be asked to fork out too much. The Secretary of State says that there will be relief for the ratepayers because savings will be made. When it suits them, the Government try to have it both ways.
  When we discuss the level of services and rates, Conservative Members invariably argue for lower rates and fewer services and Labour Members invariably argue for higher rates and better services. However, in the council chambers, both sides have to spell out their proposals for the services and the rates. That is what local democracy is about.
  The Secretary of State and the Minister are trying to get away with not spelling out the consequences of their proposals either on services—they say that services will not suffer—or on the ratepayers. If the ratepayers are to benefit from the Government's proposals, the Minister should spell out the consequences for services, which she failed to do on Thursday. What cuts will there be in services? How many jobs will be lost? By how much will fares rise? The Minister has a duty to answer. If it is the other way round — that services are not to be cut dramatically and that fares will not rise—how much greater will the burden be on ratepayers?
  40
  The Minister said on Thursday that there would be a subsidy of £300 million. If £200 million of that comes from ratepayers, business as well as domestic ratepayers will suffer. They will suffer from the increase in fares, which will produce higher business costs and be reflected in the London weighting settlement, and they will not make savings from the increased rates.
  The 66 per cent. which the Government are trying to impose on the ratepayer is a heavy and unjustified burden. The Secretary of State has altered the basis on which transport in London is to be run. He proposes to take away the functions of the GLC. At least the GLC has to balance the interests of ratepayers with those of passengers, as well as considering the financial burdens. The Secretary of State does not have to consider the interests of the ratepayers. He does not have to calculate what the cost of his policies will be to ratepayers or, indeed, to take into account the effect of this burden in terms of rate-capping penalties.
  Local authorities could suffer penalties as a result of the charge which the Secretary of State puts on them by way of the rates contribution to running LRT. The fact that the local authorities could suffer penalties as a result of that charge is, by itself, reason for them to be properly consulted. That is why the new clause specifies that the local authorities should be consulted about the overall running charge for LRT.
  The debt charges of London Transport should be taken over by the Government. The Government are taking over the assets of London Transport. They are taking it over as a going concern. They should therefore take over the liabilities as well. In my view, they should write off the debt charges, at least in so far as they fall on the ratepayers.
  The Bill contains many other headaches for ratepayers, particularly in connection with privatisation. It is not surprising that clause 12, which enables a massive handout to be made to private operators, is immediately followed by clause 13, which is about the ratepayers' contribution towards those private handouts. I foresee that, on marginally profitable routes at least, private operators will move in and LRT will be increasingly dependent upon private operators for the running of those services. The ratepayers will have to fork out an increasing amount, year after year, for those services. They could find that the burden upon them increases.
  For the debating of those important consequences for the ratepayers, after the taking over of that local democratic function, the Government are allowing only a debate on an order in the House. London Members will have only one and a half hours in which to voice their views and defend the interests of their ratepayers on these vital matters. That is inadequate. It would be far better for LRT to promote a private Bill about the ratepayers' contribution, as proposed in the amendment, so that we can have a proper debate.
  The Secretary of State placed much reliance on the fact that savings would be made, but did not spell out where they would be made. However, towards the end of his speech he said that there would be savings because of the reduction in fraud. The current GLC campaign has already reduced fraud considerably, but when fares are increased — as will happen under the Bill—there will be more fraud, so there will be no savings in that area. In any event,

  41
  it is nonsense for the Secretary of State to suggest that the reduction in fraud will enable him substantially to reduce the ratepayers' contribution.
  The Minister of State and the Secretary of State have dressed themselves up, as the Government frequently do, as friends of the ratepayer. In fact, they are to tax them more and shift the burden from central Government on to the ratepayers. The trend will continue ever more in that direction. Talk about reducing fraud! The best way to reduce fraud would be to kill the Bill, as the real fraud is the Government making out that they are the taxpayers' friends, when the opposite is the truth.
  Mr. John Maples: I hope that the hon. Member for Leyton (Mr. Cohen) will forgive me if I do not follow him into that esoteric maze of figures, as it is possible to add them up in almost any way that one wants to suit one's argument. I am sure that my hon. Friend the Minister will set the record straight at the end of the debate.
  I should like to explore one burden that will fall on ratepayers—the capital expenditure of London Regional Transport — and how it is financed. The method of financing could substantially affect the amount of expenditure that must be borne by the Government or through the rate levy, and the total affects the two thirds that will be borne by ratepayers. We are discussing an enterprise that will have nearly £2 billion worth of assets and a provisional debt limit of £100 million. There is, therefore, an assumption that almost all capital expenditure will be financed by grant awarded by the Secretary of State. LRT is planning a capital expenditure programme of about £150 million to £180 million a year. I wonder whether that is right. Capital expenditure can be financed from internal sources such as profit, if there is any, or depreciation, and from a variety of external sources such as grant, loans—they are provided for to some extent, but perhaps should be provided for to a greater extent — and leasing, which is a form of off balance sheet borrowing.
  5 pm
  Although LRT might not be profitable for a long time, or ever, there will almost certainly be bits of it that are profitable. Some bus or tube services or tube line extensions clearly might make a substantial positive return. In those circumstances, it is right that some of the necessary capital expenditure should be borrowed as that enables the expenditure to be spread over several years. If all of the expenditure must be financed from grant, 100 per cent. of it will fall on the ratepayers in the year in which the grant is made. If the expenditure is financed wholly or partly by a loan or by leasing, the financing of the expenditure will occur over some time. If the assets in which the money is invested are profitable, the profits will repay the loan. If the asset is not profitable and the loan must be repaid by an annual ratepayers' subsidy, at least the expenditure is still spread out. We should question the assumption that such a substantial investment programme should be financed by grant.
  Conservative Members hope that, through the Bill, LRT will behave more commercially. Borrowing is a perfectly proper commercial activity and imposes discipline on how the enterprise is run as debt service payments must be made at the end of each year.
  By a perverse mechanism, Budget changes to capital allowances have made leasing an especially attractive
  42
  method of financing an asset for the next few years as people are anxious to use up capital allowances while they can still do so. The lessee now makes extremely advantageous deals. London Transport started to do some leasing last year and I see that it plans to lease about £27 million worth of assets this year. That is a step in the right direction and a proper way in which to finance capital expenditure.
  Will my hon. Friend the Minister say how the Department envisages LRT's capital expenditure being financed? In what circumstances would she regard it as right for LRT to borrow? In what circumstances might the Secretary of State approve borrowing and in what circumstances might he increase the £100 million limit? Although £100 million is a large sum to us, it is relatively small in the context of an enterprise which has £2 billion worth of assets and a turnover of about £1 billion. If LRT could demonstrate that it had an investment programme which could properly be financed partly or wholly by borrowing, it should be permitted to do so. They would have to be one-off expenditures which it would not be reasonable to ask ratepayers to finance in one year, or expenditures which offered some return to help finance the expenditure.
  It would be right for LRT to be able to borrow. I doubt whether £100 million is enough, and I should be grateful if my hon. Friend the Minister would say a little more about the policy that the Department will adopt in regard to LRT's capital expenditure.
  Mr. Spearing: The hon. Member for Lewisham, West (Mr. Maples) dwelt on LRT's capital structure and expressed anxiety for economy on behalf of the ratepayer. He has a right and, perhaps, a duty to do that, but I assure him that, as a London Member who, alas, will shortly have to take responsibility for liaison between his constituents, the Department of Transport and whoever is in 55 Broadway in future, these will not be matters that will take a great deal of his time. I suspect that he will deal not with the financial matters but with the level of service that whatever financial structure there is will provide. Such considerations were notably lacking in his speech.
  I intervened during the speech of the Secretary of State and said that, knowing his predilections, did he think that there should not be taxation without representation in regard to what he was saying. He neatly sidestepped the question by saying that some of the figures that he would produce would be reassuring. He dropped into the pattern that was followed by the hon. Member for Lewisham, West as he argued that if there is to be a rate precept, it will be lower than I think, not realising that I am worried about the rates and the level of services that they will provide.
  The Bill goes slap bang against the major constitutional principle about taxation and representation. Right hon. and hon. Members will represent taxpayers in regard to the proportion of moneys that go to London Regional Transport directly out of the Consolidated Fund on the approval of the Secretary of State. However, we shall also be asked to represent our ratepayers in respect of the precept which the Secretary of State will, through a single vote, put on all London ratepayers whether they be domestic, commercial, business or industrial. Representing such ratepayers in that way means that we shall have a much wider responsibility in respect of transport in London which I do not welcome. That is what

  43
  must happen, however, as that is how the Government are setting the financial structure of accountability. At the moment, the rate element, of which the Secretary of State spoke, is expressed through the GLC rate. The GLC levies that rate on all London ratepayers and it is through members of the GLC that the resulting quality and detail of service is determined. It will now fall to Members of Parliament to exercise that rather unwelcome duty and we shall represent Londoners and their services.
  More than that, the precept will, as far as I can see, be a constitutional novelty. It will be an extension of centralised power over local government and ratepayers such as we have never had before. The Bill gives the Secretary of State enormous powers of direction over LRT. Finally, the rate precept will in part provide profits for some contractors and private enterprise — money which now flows into London Transport. Money may be made from the provision of some services, but I doubt whether much will come from economies, such as those about which the Secretary of State so airily spoke. He talked of economies in engineering services. It is true that London Transport has considerable engineering overheads, especially for the tube railways. Our deep level bored tube system is unique. The costs of ventilation, escalators and lifts are greater for that system than for other comparable rapid transit systems, for example, in New York or Paris. The statistics provided for Conservative Members are misleading in the respect, and the economies of which the Secretary of State talked will not be available.
  Mr. Maples: The hon. Gentleman does not believe that economies in the engineering services sector are available, but has he read the report of the Monopolies and Mergers Commission on bus maintenance in London Transport which shows that substantial savings are available?
  Mr. Spearing: My remarks were about the underground railways. My admiration of the existing London Transport system has not been unqualified. If the hon. Gentleman went through the files of successive chairmen of London Transport, he would find that I am one of its major critics, especially about the design and maintenance of buses. I had the pleasure of introducing a Bill to enable London Transport to go into partnership with bus production companies to provide buses to suit London conditions. I take the hon. Gentleman's point, but I was referring to the tube railways, where economies will be fewer than the Secretary of State realises.
  At present we have a fine bus called the Routemaster, which was designed and built 30 years ago. That may sound old but it is a good bus; indeed, the crews tell me it is the best bus in London. It has a rear entry and requires two men. There are several thousand of them and they are in almost as good condition as when they were new. When LRT gets rid of the conductors, who are necessary and useful, especially to ladies with shopping and for the safety of passengers, what will happen to those excellent Routemaster buses? Will they be sold off? Although there may not be the savings in engineering which the Secretary of State thinks there may be, there may not be savings in buses either.
  If the rate precept does not produce many savings— the proof of that pudding will be discovered only in the eating — it will have to provide profits for whatever element of London Transport is taken over by private
  44
  enterprise. The Bill makes it clear that wherever possible LRT will introduce private enterprise but no form of private enterprise will come unless there are profits. It will not make profits unless it does one of three things: take over the routes which provide cream now and help to keep going other routes which would otherwise be axed; cut existing services on the part of the service that they take over; or get grants from LRT through taxation and the precept to sustain those profits. Some will come from the precept on ratepayers. All hon. Members know that rates are unfair and that they are not the best way of raising public revenue. We cannot abolish the rates system, but where taxation can be raised in another way, we should do it.
  Therefore, the House should be able to decide on the rate not by a single, unamendable Order-in-Council, but by the procedure advocated by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott)— by a money Bill, where an amendment can substitute one figure for another. That cannot be done during proceedings on a statutory instrument.
  Mr. Jeremy Hanley: Does the hon. Gentleman agree that a fourth way of succeeding is to operate efficiently? The hon. Gentleman did not mention that, yet the Bill is about efficiency.
  5.15 pm
  Mr. Spearing: I should like to think that the hon. Gentleman was correct. The duties laid out in clause 2(1) are narrow, and neither efficiency nor service features in the general duties of LRT. However, I agree with him. I have criticised the management of London Transport on numerous occasions about the efficiency of the bus services, especially about the interval between buses and the generation of maximum traffic. That does not feature in the Bill. Its centre of gravity is not to provide as many passenger journeys in London as possible and so improve the quality of London life, but to integrate, sell off and distribute public assets. That is the motivation for the Bill.
  The hon. Gentleman properly reminded me of a fourth and genuine way of producing profit where no profit exists —the rewards for the conditions and terms of service of those who work in London Transport. It is a difficult job. It involves non-social hours, working at times when others are at leisure and providing service all the time. Our London Transport workers are not over-paid. The hon. Gentleman would not suggest that nor, I hope, that economies could be made there. I am glad to see the hon. Gentleman nod in agreement with me. They need canteens —popularly known as "P and T"—at the end of the bus routes and health services. Driving in London is not a particularly healthy occupation, and the staff need good health back-up. Public employees should have recreation clubs and sports grounds, which should not be regarded as surplus to capacity and sold off.
  I passed a bus garage—I shall not name it in case it gives people ideas—where there are tennis courts and a bowling green. I expect that Tory Members would consider it beautiful to sell off for housing. The hon. Member for Lewisham, West need not look askance because anybody leasing or taking over such facilities may be tempted to say that those tennis courts and sports grounds are not needed and that the space could be put to better use.
  When it comes to the crunch I hope that the hon. Gentleman will support delegations of bus, tube and other

  45
  London Transport workers who may feel it necessary—I hope that it will not be — to come to him and say, "Leaving aside the question of the precept and levels of service, important though they are, please do not let them screw us down on conditions, wages and terms of service". That is one way in which a private operator and a private person, even under the arrangements we shall discuss under clause 3, could induce lower costs and, therefore, increased profits at the expense of those who operate the service. I am glad that Conservative Members are shaking their heads because if it comes to that—I hope that it will not— we can rely on their support. Even if that happens, we should discuss those matters during annual debates on annual money Bills precepting upon the citizens of London. Unless the Secretary of State accepts the new clause, that will be impossible.
  Mr. Ernie Roberts: It has already been made clear in the debate that local authorities will have to make a 66 per cent. compulsory payment towards the financial support of London Regional Transport. That will mean that the rates for the 32 boroughs for the cost of transport will be fixed by the House; it will be done by dictation and not by local democracy. New clause 12 contains the London Transport Money Bill solution, which is a much more democratic method that will provide more time for discussion and amendment. Furthermore, if London's ratepayers are losing their democratic control of London's transport, they should not contribute towards the cost of running it through their rates.
  The Secretary of State said that London has high capital resources. Has he never heard of the poverty in Hackney and some other London boroughs? Hackney has 25 per cent. unemployment, 16,000 people on the housing waiting list, 5,000 one-parent families, many elderly and mentally ill people, and elementary social needs that it cannot meet even now. The City of London certainly has high capital resources, to much of which it has no right since it has taken them from other boroughs.
  The Secretary of State asked who should pay: ratepayer or taxpayer? To equalise the burden among the 32 boroughs—the poor boroughs as well as the richer ones —and among those who use London Transport, many of whom do not pay rates, the finance should come from central Government. They are not short of money. They have £126,000 million to spend. I have referred to that figure frequently in the House, because when hon. Members say that we cannot afford to provide various services I remind them of what they are taking from the pockets of British taxpayers, and of the way in which that money is being wasted in many areas. The Government could do no better than to spend some of that money on transport for the people of London, and for those who live in other areas when they begin to take over their transport services, as no doubt they will when they have finished with London.
  Ratepayers carry a great burden for all sorts of services and even the Government recognise that rating is an unfair taxation. This is their opportunity to put it right, at least in part, by placing the burden of London Transport on central taxation and so relieving the ratepayers of this burden. However, they will not do that. Instead this Bill will increase the burdens upon ratepayers and will increase transport costs.
  46
  The GLC, which is responsible for providing money to London Transport, states that examination shows
  "that the actual charge on the average domestic ratepayer in 1983–84 of operating LTE in line with GLC service and financial policies, after taking proper account of TSG and bearing the maximum block grant penalty is 39p a week. If LRT had existed in 1983–84 and had operated within government's plans, the charge would have been 58p per week (i.e. 50 per cent. higher than the actual charge because of the government's proposed treatment of capital expenditure. Similar figures for the actual charge in 1984–85 and the charge for financing LRT are 58p and 60p respectively. This narrow gap hides the fact that under LRT revenue support of £190 million would be £100 million lower than determined by the Council and to achieve this would have meant at the minimum a fares increase in the region of 25 per cent. and bus mileage reduced by around 5 per cent."
  That is the estimate of the body that now subsidises London Transport and which knows what it is talking about. It is based not on theory but on practice. The GLC continues:
  "On present estimates the financial regime which the Secretary of State intends to apply to LRT will in both proportionate and absolute terms result in a higher ratepayer contribution than at present."
  Mr. Richard Tracey: Does the hon. Gentleman agree that it is not right for him to stand up in the Chamber and read a brief prepared for him by the GLC, of which I have a copy in front of me?
  Mr. Roberts: Although hon. Members might have read this document, they have not understood it; if they have understood it, they have completely ignored it. They should take note of the advice being given to them by the GLC, because it knows what it is doing and saying from practice.
  If the Government are to reduce the costs of public transport to London ratepayers they must either significantly increase fares or cut services and major capital investment. I say to the Tory Government and to the Secretary of State: stop destroying the democratic rights of Londoners. Allow them to set their own rates, to control their own transport and, furthermore, to elect their own Government.
  Mr. Martin Stevens: I hope that the House will allow me to mention a few matters that are important to the London Boroughs Association. I do not know whether my right hon. Friend the Secretary of State or my hon. Friend the Minister of State will reply to this debate on the new clause, but I hope that at some time this evening they will answer the points made by the LBA, which are fairly simple.
  London Transport's bus and underground services extend in some cases beyond the Greater London area, and the association is concerned that the burden of those services should not be carried by the ratepayers of Greater London. Bus services are already subsidised by the relevant county councils, and underground services are already subsidised by central Government and will continue to be so. However, it would be helpful to the London Boroughs Association—on whose parliamentary panel I serve—if these matters could be clarified and confirmed by my ministerial friends.
  5.30 pm
  The second point is slightly more complex and relates to the contribution by London ratepayers to the Secretary of State's proposed expenditure on London's transport. The association claims that the two thirds provision is arbitrary and could at some time lead to —

  47
  [Interruption.] Opposition Members are suggesting that I am reading my speech from a piece of paper. When I have sat down I shall give them the piece of paper, and they will see that it contains nothing approximating to a speech.
  Mr. Jeremy Corbyn: As it is always useful to know the sources of these things, will the hon. Gentleman assist us by saying whether someone has assisted him in the preparation of his speech?
  Mr. Stevens: I began my remarks by saying that I was raising points put forward by the London Boroughs Association, on whose parliamentary panel I serve. I thought that I was declaring an interest as well as declaring the place from which these proposals emanate. I am glad to reassure the hon. Gentleman on that matter.
  The association feels that the two thirds rule has been adopted arbitrarily by the Secretary of State and fears that it could prove — not at the outset, but later — a considerable burden on the ratepayers of Greater London. I understand why the Secretary of State has acted in this way, and for that reason I have not tabled new clauses or amendments. It would, however, help the association if these points were clarified.
  The association expects the new LRT board to be treated as a local authority for grant-related expenditure purposes. I suspect that London Regional Transport will be treated by my right hon. Friend as a nationalised industry and, therefore, that it would be inappropriate to treat it as a local authority for such purposes. Naturally, the London Boroughs Association is concerned that those who use the service should pay for it and that in future the burden on London's ratepayers should not get out of hand. I very much hope that we shall have answers to those points.
  Mr. Chris Smith: I support the new clause. It has been said that the Bill is about efficiency. That is wrong, because efficiency is never achieved by the simple substitution of a Secretary of State-appointed bureaucracy for a bureaucracy that happens to be accountable through the GLC to the voters of London. That is not the way in which efficiency in any organisation can be promoted.
  The Bill is far more about accountability and political control. That is what the Government are about in taking away political control of London Transport from the GLC. It would be far more honest if the Government and their supporters said that quite openly, rather than cloaking it in words such as "efficiency". We are talking not about the efficient or inefficient administration of a particular transport undertaking, but about who controls that undertaking and makes the decisions. That is why the new clause is particularly important.
  Mr. Martin Stevens: Does the hon. Gentleman consider that the six members of the London Transport Executive, who have relatively recently been appointed by the leader of the GLC to that 10-man board, are contributing to efficiency?
  Mr. Smith: The hon. Gentleman is under a misapprehension. Those six members were appointed by the GLC, not by the leader of the GLC. Although I am not privy to the board's discussions, I have every confidence
  48
  in those members, and I have every confidence also that they are bringing much-needed sagacity to its deliberations.
  The new clause seeks to reduce the percentage contribution from London's ratepayers that is envisaged under the Bill. Secondly, it insists that when setting that contribution the Secretary of State consults the GLC, the Common Council and the London boroughs. Thirdly, it seeks to enshrine the Secretary of State's decision in a money Bill—to be debated by the House—rather than by means of an order.
  Those three purposes are extremely worth while and necessary. We are talking about a decision by the Secretary of State for Transport effectively on behalf of London's ratepayers. In determining the overall level of contribution of London's ratepayers to the administration, running, facilities and capital expenditure of London Transport, the Secretary of State is effectively levying a rate upon the people of London.
  Recently, this House debated a Bill—and it is being considered in another place this very day—in which the Secretary of State for the Environment took upon himself decisions to limit the amount that local authorities could levy on their ratepayers. Many of us rightly argued that that was profoundly undemocratic and that it removed rights from the voters in those local authority areas. That was a valid and necessary argument then, but how much more so is it now when the Secretary of State for Transport — in no way accountable to the people of London except through London Members—takes it upon himself to levy a rate on the people of London? To my mind, that is an extremely undemocratic form of expenditure and taxation.
  The new clause does not seek to do away with that power altogether— that would be too much to expect from the Government. Instead, it seeks to claim that at the very least they should, first, not increase the amount that London ratepayers will have to contribute compared with what they contribute now and, secondly, that they should consult the GLC, the Common Council and the London boroughs each year when embarking on this exercise. That, surely, is not too much to ask of the man who is taking upon himself a rate-levying power.
  If the Secretary of State hastens to tell us that he has no intention of increasing the levy that London ratepayers are to spend, is it his intention to reduce massively the capital investment that London Transport undertakes? That is the direction in which the figures in the Bill will lead us if he says that the cash contribution—never mind the percentage—of London ratepayers is not to rise. Their percentage contribution, under the Bill as it stands, will rise. If their cash contribution is not to rise, the overall amount of capital investment must fall. If that is the case, what future can we possibly expect for London Transport, which has been grossly under-invested in past years? Its future surely lies in better, more sensible and more fruitful investment, rather than in less investment.
  The Secretary of State must be frank with the House. He must tell us either that under his Bill as it stands the ratepayers' contribution is to increase, or that the contribution that anyone makes to the capital investment of London Transport in the future will decrease. Either of those two events must happen if the Bill goes through as it stands.
  Like any good and law-abiding Opposition, we are seeking in the new clause to make the Secretary of State's

  49
  life a bit easier. We are seeking to enable him to carry on with a full capital investment programme, but at the same time not to levy a greater rate upon the people of London than they now have. I hope that the Secretary of State will see the sweet reasonableness of the case and accept the new clause.
  I have dwelt only upon the first two provisions of the new clause—the one which seeks not to increase the ratepayers' contribution and the one which seeks some degree of consultation. I shall now touch briefly on the third provision of the new clause, concerning a money Bill.
  It is only appropriate that the House of Commons should want to discuss a capital contribution to London Transport of the magnitude that we expect to see under clauses 12 and 13, for many important capital projects will be at stake. It is right and proper that GLC money Bills come before the House. In exactly the same way, the new clause asks that the Secretary of State should come before the House with an RT money Bill which the House can discuss if it wishes.
  My hon. Friend the Member for Newham, South (Mr. Spearing) dwelt with great perspicacity on the difference between an order which might be made by the Secretary of State and a money Bill which can be properly debated and to which amendments can be tabled. When we are effectively talking about a rate levy upon the people of London — the determination of an amount which the ratepayers of London are asked to contribute and to spend — a debate should take place in this House. Hon. Members representing London seats will be the only accountable forum for London ratepayers in the matter, and they should have the opportunity to challenge, to amend and to discuss such a measure. That, surely, is not too much for us to ask.
  The new clause will provide the Secretary of State with a sensible procedure which can be followed when he takes the awesome decisions that he will have to take under the measure to levy a rate upon Londoners and to decide how that rate and his own contribution should be spent. The new clause raises three very important issues. It seeks to give Londoners at least a shred of democratic accountability and some degree of say over what the Secretary of State will do with their money once he is exercising the powers enshrined in the Bill.
  5.45 pm
  Mr. Corbyn: My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) has covered most of the ground that I intended to cover; therefore, I shall be brief.
  The new clause—which I hope the House will accept —does not fundamentally solve the problem raised by the very bad Bill that is before us, which removes from Londoners some fundamental democratic rights. The new clause will ensure only that the Secretary of State has to undertake some form of consultation with elected representatives of the people of London.
  The hon. Member for Fulham (Mr. Stevens) was correct in saying that the new body, LRT, is likely to be treated as a nationalised industry rather than as a local authority. I trust that that means that the hon. Gentleman will be voting with us on the new clause. If he is serious about local democracy, he must at least support the new clause; indeed, he should oppose the Bill altogether.
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  Londoners elect, through the GLC, the people who run London's transport system; they appoint the members of the board. The members of the board are accountable to the GLC and the GLC is open to re-election.
  In 1981, one of the major features of the GLC election campaign was transport policy and the administration of London Transport. In most GLC elections in my experience, transport has been the major issue, because it is of great concern to many people throughout London. They are concerned with the levels of fares, the services that are provided, and the methods by which the transport system is controlled. If the Bill goes through, that accountability will be lost. If the new clause is accepted, there will be some possibility of local people being able to go to their own locally elected councillors and make representations about various aspects of the service, rather than the Secretary of State arriving at the House, presenting his annual London transport Bill, and the House voting on it a few days later. If the new clause is accepted, it will at least mean that the local authority will have a period of consultation.
  In the borough represented by my hon. Friend the Member for Islington, South and Finsbury and myself, there are several London Transport and British Rail facilities at some risk. The North London line is the subject of a considerable amount of GLC support in its development and maintenance, and possibly in regard to its long-term running costs. I believe that that line has been put at risk by the management of British Rail. Therefore, I hope that the Secretary of State will assure us that the line is not at risk. I hope that he will also assure the House that, in the annual presentation of his London Transport Bill, we shall have at least nine months in which to consult adequately our constituents to find out what they think of his proposals for London's transport system.
  Nothing that I have heard has led me to doubt the validity of the GLC's fear that the Arsenal tube station may be closed. How will the people in that area be able to learn from the Secretary of State, in the space of a few days between the publication of his Bill and the House voting on it, what are his proposals for that tube station, which provides a particularly important local facility for them? If political pressures on the Secretary of State are to mean anything, it is not good enough to say that once a year the House will have a short debate on London's transport and vote upon it.
  Many of us who represent London constituencies already complain that we find it difficult to raise matters concerning the administration of London's police force through the Metropolitan police, where there is no democratic control, save for the Home Secretary's statement and any questions that we can put to him. It is not good enough for the same system to be repeated on London's transport.
  It is crucial to many people that we have a good transport system in London, and a transport system that is available to all. The proper motive for that transport system is not how little money the Government can spend on it, how bad the service can be or what profit it can make. The motive should be to ensure that everyone in London can travel about the city and can have confidence that there will always be a transport system. It should be to give those who are planning London's other transport systems, such as roads and road development, confidence

  51
  that there will be continued expansion of public transport undertakings, rather than a closure of some services and cutting of others, which can only lead to more traffic.
  The new clause goes some way towards ensuring that Londoners have some mechanism for raising their legitimate concerns about the future of London transport, and lays a small requirement on the Secretary of State so that he will be forced to listen to the elected voice of London before he produces his plan. What was said to us last week leads me to believe that a plan will be produced by a bunch of experts and we shall have to vote after a short debate in the House, without adequate time for consultation.
  This matter is fundamentally important to the rest of the country because if the Government are planning to take this action against the people of London, to produce this kind of transport policy, what future is there for democratic control of transport undertakings elsewhere? Is this a dry run for the rest of the country, so that eventually all public transport undertakings will be under the direct control of the Secretary of State with appointed boards that can sell off assets, cut services and license operators at will?
  This is a fundamentally bad Bill, but I hope that the new clause will add something to it and at least give some semblance of democratic control to the people.
  Mr. Ridley: With the leave of the House, I shall reply briefly to some of the few new points that have been made.
  I start with my hon. Friend the Member for Fulham (Mr. Stevens), who suggested that it was not fair that services that ran beyond the boundaries of the GLC should be financied by the boroughs through the rates. With the buses, London ratepayers will not be paying for the services that go beyond the boundaries, because if subsidy is needed it will be provided by the out-county ratepayers. Only tiny amounts of the subsidy to London Transport go on tube services that go beyond the boundaries of the GLC. My hon. Friend will no doubt agree that the fact that taxpayers are paying one third of the cost of the subsidy could be said to cover that small amount.
  My hon. Friend's second point was that the London Boroughs Association was worried that the two thirds for the ratepayers could get out of hand, and his concern may have been about capital. That point was also made by my hon. Friend the Member for Lewisham, West (Mr. Maples). It does not make any difference how the capital for LRT, for the investments that go to the business of running public transport, is financed. The GLC has paid 100 per cent. capital grants and we shall continue that practice for the main part of the public transport business.
  If we were to allow LRT to borrow for that capital, in the end the ratepayers would have to make repayments when the borrowings became due as well as repaying interest and there would be an ever greater amount of liability as the years went by. That would be to economise now and to pay much more later. That may have been the worry at the back of the mind of my hon. Friend the Member for Lewisham, West. However, there is no point in doing that while London Transport—or LRT—is inherently unprofitable and while its investment is not particularly lumpy—that is, it does not go up and down, but keeps more or less steady over the years.
  Mr. Maples: There were two circumstances in which it seemed to me that it might make good sense to borrow. One was where there was a substantial capital investment programme that would not continue at that rate for ever, so that there was a lump—although if investment were to continue for ever at £100 million a year and the ratepayers were effectively to service that debt it would not matter whether it was borrowed or not. However, there will be circumstances in which that may not be so. Secondly, particular capital investment programmes may be able to show a commercial rate of return on the investment—the new line to terminal 4 at Heathrow might be one. If that project could be profitable, even if LRT as a whole was not, would it not be in the ratepayers' interest to borrow capital to do that rather than to finance it from grants?
  Mr. Ridley: I agree with both of my hon. Friend's points, and those are our intentions. Profitable activities or a major one-off investment should be financed by borrowing. However, there will not be many of the latter, and there will be a fairly even investment programme, so it seems sensible to pay capital grants. That means that there will be no creation of the capital liabilities about which my hon. Friend the Member for Fulham was worried. I am convinced that the many economies that can be made will mean a diminishing ratepayers' contribution over the years.
  This brings me to the point raised by the hon. Member for Islington, South and Finsbury (Mr. Smith), who said that either I shall have to put up the ratepayers' contribution, or I shall have to cut investment. I am putting the ratepayers' contribution down—next year it would have been 78 per cent., but I am putting it down to 67 per cent.—and I shall not cut investment. I shall do none of the dire things suggested by the hon. Gentleman. That is all that needs to be said on that.
  The ratepayers are getting a better deal out of this Bill. Their contribution will be less than it has been, and as efficiency begins to work its way in it will come down still further. On that basis, the whole of the Opposition's case does not need answering, because they have argued for the proposition that the opposite will happen. I do not believe that it will, and I urge the House to reject the new clause.
  Mr. Prescott: The debate has been about local democracy, about which we shall hear more this week.
  There have been considerable differences between the difficult statistical definitions of how one can treat London Transport's accounts. Probably the most interesting point in the debate was made by the hon. Member for Fulham (Mr. Stevens), who called for more nationalisation, greater efficiency and improvement in the London transport system. That is not the sort of comment that one hears regularly from Conservative Benches about nationalised industries. I mention it in passing.
  The Secretary of State spoke about figures and, in reply to my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), told us how he would be saving the London ratepayers' money and how he would reduce their contribution. It is important for us to bear in mind what these arguements mean.
  The Secretary of State then spoke about capital financing and amortising debts, but that is the legitimate way to borrow for money requirements, and it is also a legitimate local authority practice. However, the Secretary

  53
  of State failed to answer the real point, because I think he fails to understand the nature of the problem, which is that the £150 million in capital payments made by the GLC for last year and for the coming year for the running of London's transport is a charge on the revenue of London Transport of approximately £4 million. That is what it is by way of funding from a capital debt fund. If all that is to be found in one year, which is what the Secretary of State is suggesting, that must mean that more than £140 million extra will be put on the burden of running London Transport in the first year. I am sure that the London boroughs are concerned about that method of financing London's public transport. That is the issue, and nothing that the Secretary of State said today denied that that would happen. That is one reason why he will need a bigger ceiling on the ratepayers' contribution.
  The Secretary of State appears to accept that the total amount of revenue support of £235 million is the sum involved. However, he got it wrong when he talked about £35 million extra income being created by the travel card. If he uses the £235 million total, he is really talking about a projection and not about reality. The reality after running the system for a year was that the total cost in revenue support was £200 million and not £235 million. He was working on an artificial ceiling. The reality is that the surplus at present under the GLC is such that that £35 million goes back to the ratepayer. If there are surpluses in the future in this profitable London transport system that the right hon. Gentleman promises us, they will be distributed in the ratio of two thirds to one third, so that the ratepayer will get back less of the surplus and presumably the taxpayer will gain.
  What the right hon. Gentleman did not reject, and presumably could not reject, was that on the basis of the GLC share for the ratepayer, observing all the right hon. Gentleman's recommendations under his protected expenditure levels the ratepayers' share will be 45 per cent. I presume that that is the right hon. Gentleman's target——
  Mr. Ridley indicated dissent.
  Mr. Prescott: If that is not the target, I do not know why we have protected expenditure levels recommended to the local authorities to observe. I thought that the target was supposed to show what it should cost to run a transport system. If the Secretary of State rejects that argument, he rejects the philosophy of the PELs themselves—and he implements them.
  The right hon. Gentleman rushed on from 1983–84, where we have real expenditures on which to make a judgment, into the projection for 1984–85. But here again he will have to deal with figures in projecting what the ratepayers' share shall be. He said that it was about 78 per cent. That is bound to be based on projections. It cannot be anything else. The Secretary of State has already said that the travel card resulted in £35 million more in income than was projected at the beginning of the year. How he can go on to say how much the ratepayers will pay this year without the final figure defies imagination, though it is not surprising coming from a former Treasury Minister.
  Looking at the figures for 1984–85, even balancing the right hon. Gentleman's argument, the way that he treats transport supplementary grants is distinctly different from the way that the Department of the Environment does it and makes me wish that the two Departments would get
  54
  together to decide the fair way of determining TSG. But taking them into account this year, London Transport will be receiving £38 million less on the basis of the present calculation made by the Department of Transport. If the system is to be maintained, that will have to be found by the ratepayer.
  The Government have pretty well made sure that there will be a tremendous increase in the costs of maintaining London's transport system, and in that case it will be denied the £38 million. If the right hon. Gentleman is running the system and directing London Regional Transport, the bill will not be so great. By increasing the penalties for the lack of resources and by reducing London Transport's income this year by nearly £38 million, the right hon. Gentleman pretty well guarantees that he has set up the Aunt Sally so that he can tell the electorate and the ratepayers, "We shall reduce it by 10 per cent." If he changes the calculation of the TSG, I have no doubt that he will be able to achieve it overnight without worrying about affecting levels of employment, effeciency and so on.
  As for the levels of efficiency, today's debate really means that large savings will be made out of redundancies. Government supporters say quite happily that the Commission report showed that many more redundancies could be made. Mr. Bright, who is in charge of London Transport, says that it is possible to save considerably more by making people redundant. Although that may reduce the sums paid by London ratepayers, presumably taxpayers will pay more in their contributions towards redundancies and the maintenance of unemployment. Since this Government came to power the sums that they have paid in redundancies have totalled more than £6,000 million. The taxpayers' share of the burden of that policy will increase, albeit that London ratepayers will bear a reduced amount.
  We have heard a considerable amount about the fares increase. The GLC has paid considerably more to freeze fares, and we hope that the Secretary of State will maintain that position. But it is expensive to the GLC. It represents an extra charge of £35 million, which affects costs in the year 1984–85. Nevertheless, presumably the Government are committed to a price increase equal to the level of inflation, which in London presumably means at least a 6 per cent. increase. We shall start the spiral yet again, as we saw when the Tories had control of the metropolitan areas, with prices going up with inflation, driving people off the buses, reducing services and resulting in an inadequate transport service in the rest of the country.
  The new clause seeks to allow more consultation, as asked for by the London boroughs, and it is no consolation to the House to hear the Secretary of State say that, because there is no legal requirement for the police to consult local authorities about the rate precept, that should encourage the House to consider that local authorities do not have the right to be consulted about a rate precept on them for the provision of public transport.
  I do not think that anyone has denied that the London Transport Money Bill proposed in the clause will provide more time for the House to debate the issue. It will provide the opportunity for amendments to be made to the percentage involved in the Bill. For anyone to suggest, as the Secretary of State has, that an order is somehow the same as a Bill defies imagination. That argument cannot possibly be accepted even by Government supporters.

  55
  Incidentally, as my hon. Friend the Member for Jarrow (Mr. Dixon) pointed out, the Government's proposal raises the spectre of devolution yet again. In the past we heard a great deal about the so-called West Lothian question — whether all hon. Members in this House could decide matters relating specifically to Scotland. Now we shall have the so-called London question—can everyone in the House determine London transport services and the rate supplementary levied upon the ratepayers? Surely that is not acceptable.
  We have established a case that a rate supplementary grant can be maintained within the 55 per cent. limit that we propose in the clause, but it is not an ideal way of dealing with it. The Opposition believe that it should be dealt with by the local authorities. It is a local service. It is not the role of the House to get involved in the details of transport embodied in the Bill. It will be bad for the ratepayers. It will be bad for transport users. Overall, we believe that it will be bad for London. I have no hesitation in recommending to the House that it should support the clause.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 164, Noes 260.

  Division No. 235]

  [6.07 pm

  AYES

  Abse, Leo

  Eastham, Ken

  Alton, David

  Edwards, Bob (W'h'mpt'n SE)

  Archer, Rt Hon Peter

  Ellis, Raymond

  Ashley, Rt Hon Jack

  Evans, John (St. Helens N)

  Atkinson, N. (Tottenham)

  Ewing, Harry

  Bagier, Gordon A. T.

  Fatchett, Derek

  Barron, Kevin

  Faulds, Andrew

  Beckett, Mrs Margaret

  Field, Frank (Birkenhead)

  Bell, Stuart

  Fisher, Mark

  Benn, Tony

  Flannery, Martin

  Bennett, A. (Dent'n & Red'sh)

  Foot, Rt Hon Michael

  Bermingham, Gerald

  Foster, Derek

  Bidwell, Sydney

  Fraser, J. (Norwood)

  Blair, Anthony

  George, Bruce

  Boothroyd, Miss Betty

  Gilbert, Rt Hon Dr John

  Boyes, Roland

  Godman, Dr Norman

  Brown, Hugh D. (Provan)

  Golding, John

  Brown, N. (N'c'tle-u-Tyne E)

  Gould, Bryan

  Brown, R. (N'c'tle-u-Tyne N)

  Hamilton, W. W. (Central Fife)

  Brown, Ron (E'burgh, Leith)

  Harman, Ms Harriet

  Buchan, Norman

  Harrison, Rt Hon Walter

  Callaghan, Jim (Heyw'd & M)

  Hart, Rt Hon Dame Judith

  Campbell, Ian

  Hattersley, Rt Hon Roy

  Campbell-Savours, Dale

  Haynes, Frank

  Canavan, Dennis

  Healey, Rt Hon Denis

  Carter-Jones, Lewis

  Heffer, Eric S.

  Clarke, Thomas

  Hogg, N. (C'nauld & Kilsyth)

  Clay, Robert

  Holland, Stuart (Vauxhall)

  Cocks, Rt Hon M. (Bristol S.)

  Hoyle, Douglas

  Cohen, Harry

  Hughes, Robert (Aberdeen N)

  Coleman, Donald

  Hughes, Roy (Newport East)

  Concannon, Rt Hon J. D.

  Hughes, Sean (Knowsley S)

  Cook, Frank (Stockton North)

  Hughes, Simon (Southwark)

  Corbett, Robin

  Jenkins, Rt Hon Roy (Hillh'd)

  Corbyn, Jeremy

  John, Brynmor

  Cowans, Harry

  Jones, Barry (Alyn & Deeside)

  Crowther, Stan

  Kennedy, Charles

  Cunliffe, Lawrence

  Kilroy-Silk, Robert

  Davies, Ronald (Caerphilly)

  Kinnock, Rt Hon Neil

  Davis, Terry (B'ham, H'ge H'l)

  Kirkwood, Archibald

  Deakins, Eric

  Leadbitter, Ted

  Dobson, Frank

  Leighton, Ronald

  Dormand, Jack

  Lewis, Ron (Carlisle)

  Dubs, Alfred

  Lewis, Terence (Worsley)

  Duffy, A. E. P.

  Litherland, Robert

  Dunwoody, Hon Mrs G.

  Lloyd, Tony (Stretford)

  56

  Lofthouse, Geoffrey

  Roberts, Allan (Bootle)

  McCartney, Hugh

  Roberts, Ernest (Hackney N)

  McDonald, Dr Oonagh

  Robertson, George

  McGuire, Michael

  Rooker, J. W.

  McKay, Allen (Penistone)

  Ross, Ernest (Dundee W)

  McKelvey, William

  Ross, Stephen (Isle of Wight)

  Maclennan, Robert

  Rowlands, Ted

  McNamara, Kevin

  Ryman, John

  McTaggart, Robert

  Sedgemore, Brian

  McWilliam, John

  Sheldon, Rt Hon R.

  Marek, Dr John

  Short, Ms Clare (Ladywood)

  Marshall, David (Shettleston)

  Short, Mrs R.(W'hampt'n NE)

  Martin, Michael

  Skinner, Dennis

  Maxton, John

  Smith, C.(Isl'ton S & F'bury)

  Maynard, Miss Joan

  Smith, Rt Hon J. (M'kl'ds E)

  Meacher, Michael

  Snape, Peter

  Meadowcroft, Michael

  Spearing, Nigel

  Michie, William

  Steel, Rt Hon David

  Mikardo, Ian

  Stott, Roger

  Miller, Dr M. S. (E Kilbride)

  Strang, Gavin

  Mitchell, Austin (G't Grimsby)

  Thomas, Dafydd (Merioneth)

  Morris, Rt Hon A. (W'shawe)

  Thorne, Stan (Preston)

  Morris, Rt Hon J. (Aberavon)

  Tinn, James

  Nellist, David

  Torney, Tom

  Oakes, Rt Hon Gordon

  Wainwright, R.

  O'Brien, William

  Wardell, Gareth (Gower)

  O'Neill, Martin

  Wareing, Robert

  Orme, Rt Hon Stanley

  Weetch, Ken

  Patchett, Terry

  Welsh, Michael

  Pavitt, Laurie

  White, James

  Pendry, Tom

  Wigley, Dafydd

  Pike, Peter

  Williams, Rt Hon A.

  Powell, Raymond (Ogmore)

  Winnick, David

  Prescott, John

  Woodall, Alec

  Randall, Stuart

  Redmond, M.

  Tellers for the Ayes:

  Rees, Rt Hon M. (Leeds S)

  Mr. James Hamilton and

  Richardson, Ms Jo

  Mr. Don Dixon.

  NOES

  Adley, Robert

  Bulmer, Esmond

  Aitken, Jonathan

  Butcher, John

  Alexander, Richard

  Butterfill, John

  Amess, David

  Carlisle, Kenneth (Lincoln)

  Ancram, Michael

  Carlisle, Rt Hon M. (W'ton S)

  Arnold, Tom

  Carttiss, Michael

  Ashby, David

  Chalker, Mrs Lynda

  Aspinwall, Jack

  Chapman, Sydney

  Atkins, Rt Hon Sir H.

  Chope, Christopher

  Atkins, Robert (South Ribble)

  Churchill, W. S.

  Atkinson, David (B'm'th E)

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

  Baker, Rt Hon K. (Mole Vall'y)

  Clark, Dr Michael (Rochford)

  Baker, Nicholas (N Dorset)

  Clark, Sir W. (Croydon S)

  Baldry, Anthony

  Clarke, Rt Hon K. (Rushcliffe)

  Banks, Robert (Harrogate)

  Cockeram, Eric

  Batiste, Spencer

  Colvin, Michael

  Beaumont-Dark, Anthony

  Conway, Derek

  Bendall, Vivian

  Coombs, Simon

  Benyon, William

  Cope, John

  Berry, Sir Anthony

  Couchman, James

  Best, Keith

  Crouch, David

  Biggs-Davison, Sir John

  Dickens, Geoffrey

  Blaker, Rt Hon Sir Peter

  Dicks, Terry

  Bonsor, Sir Nicholas

  Dorrell, Stephen

  Boscawen, Hon Robert

  Douglas-Hamilton, Lord J.

  Bowden, A. (Brighton K'to'n)

  Dover, Den

  Bowden, Gerald (Dulwich)

  du Cann, Rt Hon Edward

  Boyson, Dr Rhodes

  Dunn, Robert

  Braine, Sir Bernard

  Durant, Tony

  Brandon-Bravo, Martin

  Dykes, Hugh

  Bright, Graham

  Edwards, Rt Hon N. (P'broke)

  Brinton, Tim

  Emery, Sir Peter

  Brittan, Rt Hon Leon

  Evennett, David

  Brooke, Hon Peter

  Eyre, Sir Reginald

  Brown, M. (Brigg & Cl'thpes)

  Fairbairn, Nicholas

  Browne, John

  Fallon, Michael

  Bruinvels, Peter

  Fookes, Miss Janet

  Buchanan-Smith, Rt Hon A.

  Forman, Nigel

  Buck, Sir Antony

  Fox, Marcus

  Budgen, Nick

  Franks, Cecil

  57

  Fraser, Peter (Angus East)

  Moynihan, Hon C.

  Freeman, Roger

  Mudd, David

  Gardner, Sir Edward (Fylde)

  Newton, Tony

  Garel-Jones, Tristan

  Nicholls, Patrick

  Glyn, Dr Alan

  Normanton, Tom

  Goodhart, Sir Philip

  Norris, Steven

  Goodlad, Alastair

  Onslow, Cranley

  Gower, Sir Raymond

  Oppenheim, Philip

  Gregory, Conal

  Ottaway, Richard

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

  Page, Richard (Herts SW)

  Grist, Ian

  Parris, Matthew

  Ground, Patrick

  Patten, Christopher (Bath)

  Grylls, Michael

  Patten, John (Oxford)

  Gummer, John Selwyn

  Pawsey, James

  Hanley, Jeremy

  Peacock, Mrs Elizabeth

  Hannam,John

  Percival, Rt Hon Sir Ian

  Hayes, J.

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

  Hayhoe, Barney

  Powell, William (Corby)

  Hayward, Robert

  Powley, John

  Henderson, Barry

  Prentice, Rt Hon Reg

  Heseltine, Rt Hon Michael

  Price, Sir David

  Higgins, Rt Hon Terence L.

  Proctor, K. Harvey

  Hind, Kenneth

  Raffan, Keith

  Hogg, Hon Douglas (Gr'th'm)

  Raison, Rt Hon Timothy

  Holland, Sir Philip (Gedling)

  Rathbone, Tim

  Holt, Richard

  Renton, Tim

  Howard, Michael

  Rhodes James, Robert

  Howarth, Alan (Stratf'd-on-A)

  Ridley, Rt Hon Nicholas

  Howell, Rt Hon D. (G'ldford)

  Ridsdale, Sir Julian

  Howell, Ralph (N Norfolk)

  Rifkind, Malcolm

  Hunt, David (Wirral)

  Rippon, Rt Hon Geoffrey

  Hurd, Rt Hon Douglas

  Roberts, Wyn (Conwy)

  Johnson-Smith, Sir Geoffrey

  Robinson, Mark (N'port W)

  Key, Robert

  Roe, Mrs Marion

  King, Rt Hon Tom

  Rossi, Sir Hugh

  Lang, Ian

  Rost, Peter

  Latham, Michael

  Rowe, Andrew

  Lawler, Geoffrey

  Rumbold, Mrs Angela

  Lester, Jim

  Ryder, Richard

  Lewis, Sir Kenneth (Stamf'd)

  Sainsbury, Hon Timothy

  Lightbown, David

  St. John-Stevas, Rt Hon N.

  Lloyd, Ian (Havant)

  Sayeed, Jonathan

  Lloyd, Peter, (Fareham)

  Shaw, Sir Michael (Scarb')

  Lord, Michael

  Shepherd, Colin (Hereford)

  Luce, Richard

  Shepherd, Richard (Aldridge)

  Lyell, Nicholas

  Shersby, Michael

  McCrindle, Robert

  Silvester, Fred

  Macfarlane, Neil

  Skeet, T. H. H.

  MacGregor, John

  Smith, Tim (Beaconsfield)

  MacKay, Andrew (Berkshire)

  Soames, Hon Nicholas

  Maclean, David John

  Speed, Keith

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

  Speller, Tony

  McQuarrie, Albert

  Spencer, Derek

  Madel, David

  Spicer, Michael (S Worcs)

  Major, John

  Squire, Robin

  Malins, Humfrey

  Stanbrook, Ivor

  Malone, Gerald

  Stanley, John

  Maples, John

  Stern, Michael

  Marlow, Antony

  Stevens, Lewis (Nuneaton)

  Marshall, Michael (Arundel)

  Stevens, Martin (Fulham)

  Mates, Michael

  Stewart, Allan (Eastwood)

  Mather, Carol

  Stewart, Andrew (Sherwood)

  Maude, Hon Francis

  Stewart, Ian (N Hertf'dshire)

  Mawhinney, Dr Brian

  Stokes, John

  Maxwell-Hyslop, Robin

  Stradling Thomas, J.

  Mayhew, Sir Patrick

  Sumberg, David

  Mellor, David

  Taylor, Teddy (S'end E)

  Merchant, Piers

  Tebbit, Rt Hon Norman

  Miller, Hal (B'grove)

  Temple-Morris, Peter

  Mills,Iain (Meriden)

  Thomas, Rt Hon Peter

  Miscampbell, Norman

  Thompson, Donald (Calder V)

  Mitchell, David (NW Hants)

  Thompson, Patrick (N'ich N)

  Moate, Roger

  Thome, Neil (Word S)

  Molyneaux, Rt Hon James

  Thornton, Malcolm

  Monro, Sir Hector

  Thurnham, Peter

  Montgomery, Fergus

  Townend, John (Bridlington)

  Moore, John

  Tracey, Richard

  Morris, M. (N'hampton, S)

  Twinn, Dr Ian

  Morrison, Hon C. (Devizes)

  van Straubenzee, Sir W.

  Morrison, Hon P. (Chester)

  Vaughan, Sir Gerard

  58

  Wakeham, Rt Hon John

  Wiggin, Jerry

  Waldegrave, Hon William

  Winterton, Mrs Ann

  Walden, George

  Winterton, Nicholas

  Waller, Gary

  Wolfson, Mark

  Wardle, C. (Bexhill)

  Wood, Timothy

  Watson, John

  Woodcock, Michael

  Watts, John

  Yeo, Tim

  Wells, Bowen (Hertford)

  Young, Sir George (Acton)

  Wells, John (Maidstone)

  Wheeler, John

  Tellers for the Noes:

  Whitfield, John

  Mr. Archie Hamilton and

  Whitney, Raymond

  Mr. Michael Neubert.

  Question accordingly negatived.

Clause 3

  GENERAL POWERS
  Mrs. Chalker: I beg to move amendment No. 4, in page 3, line 10, leave out from 'Any' to 'may' in line 13 and insert
  'agreement entered into by London Regional Transport by virtue of subsection (2) above for the provision by any other person of any such public passenger transport services shall include such provision as appears to London Regional Transport to be appropriate for securing the proper discharge of their general duty under section 2(1) of this Act; and, without prejudice to the preceding provision, any agreement entered into by London Regional Transport by virtue of subsection (2) above'.
  Mr. Speaker: With this it will be convenient to take amendment (a) to the proposed amendment, after '2(1)' insert '2(2) and 2(3)'.
  Mrs. Chalker: Amendment No. 4 deals with the point which arose, and was extensively debated, in Committee. It seeks to respond to points made by the hon. Member for Barking (Ms. Richardson) and other hon. Members. In Committee, at column 311, I said that I agreed with the purpose of amendment No. 25 and would look for something that we could table on Report, which we are now doing.
  The amendment makes it clear that, in entering any agreement with an independent operator to provide a bus or train service for LRT under clause 3(2), London Regional Transport must include an appropriate provision in the agreement to ensure that the independent operator properly discharges his general duty under clause 2(1). In Committee, the hon. Member for Barking introduced two amendments, the intention of which was to strengthen the relationship between the agreement under clause 3(2) and the general duty of LRT under clause 2(1). I accepted the spirit of one of those amendments, and amendment No. 4 fulfils that undertaking completely. It establishes a mandatory link between the general duty to provide public passenger transport services and agreements which deal with the provision of such services.
  Amendment (a), in the name of the hon. Member for Newham, South (Mr. Spearing), seeks to take amendment No. 4 further. I believe that the hon. Gentleman wishes to refer explicitly to clause 2, subsections (2) and (3). I shall deal with those subsections in turn and say why I believe that the hon. Gentleman's amendment is unnecessary, and that amendment No. 4 fulfils everything discussed in Committee which was acceptable on both sides.
  The reference in amendment No. 4 to the proper discharge of LRT's general duty under clause 2(1) automatically includes clause 2(2), because clause 2(2) does not itself contain a duty. It merely states how the

  59
  general duty is to be carried out. It would therefore be wrong to refer to it specifically. I hope that the hon. Gentleman will not seek to press the point. As I said to the hon. Member for Barking in Committee, it is not that we do not wish to do what he intends, but that it would be superfluous to write this into the legislation.
  The reference to the clause (2)(1) general duty, strictly speaking, includes the relevant parts of subsection (3), because that is also concerned in part with how the general duty in subsection (1) is to be carried out. In entering any clause 3(2) agreement—an agreement by an independent operator to provide services for LRT under contract— LRT will always have to satisfy itself that its action is consistent with the discharge of clause 2(3). However, the answer is not as clear-cut as it was in clause 2(2).
  I should like to be helpful to the Member for Newham, South. I shall look again at the drafting of the introduction to clause 3(3), which is the relevant reference, and consider whether it is possible to amend it further in another place to establish a firmer link between clause 3(2) agreements and the duty on LRT in clause 2(3). That may seem a little convoluted, but, with amendment No. 4 in place, which improves the situation, it will be better to see how that works out, and to amend separately the clause 2(3) point in the amended clause 3(3), as it will be, in another place. I hope that the hon. Gentleman is satisfied that I am seeking to meet his point. I understand why he thinks that it is important.
  We have no doubt that any contractor carrying out services on behalf of LRT must behave in exactly the same way as LRT, LT bus or LT underground would in carrying out those similar services. If contractors can provide a service more economically, it must be in the interests of Londoners that that should happen. This must be at a standard no worse than that provided by LT.
  I hope that Opposition Members will acknowledge that in amendment No. 4 I am seeking to meet not only the points made in Committee in amendment No. 25, but in part of amendment (a) to amendment No. 4.
  Mr. Spearing: This short debate illustrates the value of Report stages. Although the matter was discussed to some extent in Committee, and the Minister has brought forward an amendment to meet the points made in that debate, she rightly says that they do not go far enough from my point of view. Report stage gives an opportunity to press the point further. However, I say straight away that I am grateful for the point that the Minister has made. We shall look forward to the introduction of an amendment in another place. It may be, therefore, that I shall not press amendment (a) to a vote.
  This apparently complex matter concerns the conditions that London Transport shall lay on any of its subsidiaries, contractors or those who are carrying services for it and, indeed, the London public under the auspices of the Bill. Amendment (a) would to some extent tighten up the degree to which those subsidiaries and contractors must abide by the duties of LRT. The reference in amendment (a) to clause 2, subsections (2) and (3), relates to the duties of LRT. It is to those duties that I wish to refer. The question of how the duties of the new statutory body are performed is important. If any legal proceeding
  60
  takes place as to whether they are performed or whether they are subsidiaries or contractors, I have no doubt that this part of the Bill will be important.
  The duties laid upon LRT are contained in two parts in the Bill. Clause 2(1) lays down a general duty, and subsection states:
  "In carrying out that duty London Regional Transport shall have due regard to—

  (a) the transport needs for the time being of Greater London; and

  (b) efficiency, economy and safety of operation."

  It is clear that, although the general duties may have to be performed in that way, the transport needs of Greater London for the time being and the efficiency, economy and safety of operation do not come within the statutorily defined general duties of LRT. Earlier, the Minister kindly gave us some information about a change, but by a very good sleight of hand she managed to slide over this point. However, amendment No. 4 refers to
  "such provision as appears to London Regional Transport to be appropriate for securing the proper discharge of their general duty under section (2)(1) of this Act".
  Thus, it is the general duty that will determine how the subsidiaries operate. Although they must carry out those duties in a particular way, it is the definition of general duties that counts.
  6.30 pm
  In 1933, the London Passenger Transport Bill was enacted. Under that Act, the board's general duty was much more specific and particular than that before us today. Section 3(1) of that Act states:
  "It shall be the general duty of the Board so to exercise their powers under this Act as to secure the provision of an adequate and properly co-ordinated system of passenger transport for the London Passenger Transport Area (as hereinafter in this Act defined), and for that purpose, while avoiding the provision of unnecessary and wasteful competitive services, to take from time to time such steps as they consider necessary for extending and improving the facilities for passenger transport in that area in such a manner as to provide most efficiently and conveniently for the needs thereof."
  That is an excellent general duty, and, as the House may have realised, there are several directions there that are not contained in the Bill.
  The Act contains the phrase
  "an adequate and properly co-ordinated system".
  Those words to not appear in the general duties before us.
  The Act also mentions
  "avoiding the provision of unnecessary and wasteful"
  competition. I should have thought that that would have greatly appealed to this Government, yet it does not appear in the general duties now before us. Indeed, the important phrase
  "for extending and improving the facilities for passenger transport in that area"
  does not appear either. Thus, quite apart from the competition point, two major general duties, which are absent from the provisions before us, were placed on the old London Passenger Transport Board by the House more
  It is the split between the definition of general duty and the manner in which it shall be carried out that gives us some cause for concern. In the Transport (London) Act 1969 similar general duties appear. The Act states:
  "Subject always to the requirements of section 7(3) of this Act, it shall be the general duty of the Executive to exercise and to perform their functions in accordance with principles from

  61
  time to time laid down or approved by the Council, in such manner as, in conjunction with the Railways Board and the Bus Company"—
  that is Green Line or London Country—
  "and with due regard to efficiency, economy and safety of operation, to provide or secure the provision of such public passenger transport services as best meet the needs for the time being of Greater London."
  Meeting the need
  "for the time being of Greater London"
  was placed fairly and squarely in section 5 of the Transport (London) Act 1969, yet that does not appear in the general duties in the Bill.
  I believe that in Committee there was a good deal of discussion on the point, including the obligation of integration. That word has been very much on the lips of both the Minister and the Secretary of State and has supposedly been on their minds, yet it is markedly absent from the legislation. That is what led me to table the amendment. I am glad that these points were raised in Committee to some extent by my hon. Friends, and I thank the Minister for tabling amendment No. 4 and for going a little further in accepting half of my amendment (a). However, I would have been much happier if there had been a completely new general duty, because the duty contained in the Bill is not adequate for the needs of Greater London.
  Mr. Simon Hughes: I rise briefly to support the amendment tabled by the hon. Member for Newham, South (Mr. Spearing). We had a long debate in Committee about the duties involved. I then expressed great unhappiness about the fact that there was a double inadequacy. The first inadequacy was that the duties were not broad or deep enough, and the second was that there was no way of enforcing them. After all, under clause 2(6) no member of the public can go to court and say that the LRT is not doing its job.
  Amendment (a) at least allows a broader and more detailed definition of duty, which is more like the duty on the present board and its predecessors. That is important if we are not to lose sight of the fact that primarily London Transport has been, is, and will be a social service. All its duties should be described in a way that makes that clear. That is why clause 2(2) and clause 3, which refer to the co-ordination and integration of all the services, contain fundamental objectives that should be the objectives of all the component parts of LRT, of the main board, and—until they are integrated—of the British Railways Board in the region comprising London and the south-east. The Government may be willing to go halfway down that road, but I hope that they are willing to go even further before the matter is finally dealt with.
  Mr. Peter Snape: The House will be grateful to the Minister for the way in which she opened this short debate, and to my hon. Friend the Member for Newham, South (Mr. Spearing) for tabling amendment (a).
  As has been said, the amendments refer to clause 3, which allows LRT to enter into agreements with private operators for the provision of transport in the LRT area. A few moments ago, the Minister said that if private operators could provide a service economically, it was presumably in the interests of Londoners to provide it. No Opposition Member has ever doubted that such a service could be provided by private operators. Indeed, in Committee that point was discussed extensively. The main
  62
  burden of our argument was that we appreciated that such a service could be widely and economically—to use the Minister's words—provided. That is not the argument. We know that any operator could operate a service along, for example, Oxford street. Private operators would be primarily interested in such locations, but they would not be interested in running all-night buses in the outer London suburbs.
  Our concern, as illustrated by amendment (a), is that the very high standards of public safety offered by the present London Transport Board and, we hope, by LRT — if that body must be inflicted on us — should be equalled and maintained by any private operator that LRT is unwise enough to allow to provide a service in its area.
  One of the purposes behind the amendment is integration. The hon. Member for Southwark and Bermondsey (Mr. Hughes) will be as aware as I am that the purpose behind the Bill is almost entirely contrary to that.
  Mrs. Chalker: That is not so.
  Mr. Snape: The Minister should take care of her voice during this debate. I say that in a kindly sense. There will be no integrated service if we countenance private operators of the sort which have caused us to express concern in Committee and on the Floor of the House. Integration is not the name of their game. Inevitably, their interest is profitability. If they provide a service that has played a large part in the aims of the transport system over the years, their primary purpose will be to make money. I do not blame them for that. They would be less than human if that was not their main purpose. However, standards of maintenance and the provision of services to which London Transport has long been dedicated must be insisted upon in the operations of private operators. The Minister has made some sympathetic noises about that principle. Therefore, I hope that my hon. Friend the Member for Newham, South will not feel it necessary to cause the House to divide on his amendment. I assure him that the amendment makes eminent sense, and I hope that the Government will recognise that when the Bill is discussed in another place.
  Mr. Spearing: My hon. Friend's advice is sound and I intend to take it. He will be aware that London Transport has a central training school for drivers and we all know that it has a worldwide reputation for the safety of its operations. Would it be right to insist that all operators engage drivers who have been subject to that training and have met the standards set by London Transport at the Chiswick driving school? That is an example of the way in which we could maintain safety standards, even under the Bill.
  Mr. Snape: I bored the Committee for a considerable time with stories of how I once drove a Metro bus around the streets of Birmingham. I hesitate to repeat those stories.
  Mr. Tom Pendry: Why not?
  Mr. Snape: My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) has the advantage, because, if I repeated my stories, they would be new to him, but I should be trying the patience of those who served on the Committee.
  Many private operators operate their services quite safely, but they often use part-time drivers, who inevitably

  63
  do not have the same high standards as the full-time public service vehicle driver. I hope that the Government will recognise the sense of the amendment and will write it into the Bill in their own form in another place.
  Mrs. Chalker: This has been a short debate but there are some comments that I wish to make in response to the hon. Members for Newham, South (Mr. Spearing) and Southwark and Bermondsey (Mr. Hughes), who have formed an interesting liaison. I have some sympathy with the hon. Member for Newham, South when he refers to the 1933 Act, but I think that he will find on further study —I am not being critical—that many of the things for which he is asking under general duties are contained in other clauses and in slightly different ways. That has helped us to introduce an up-to-date Bill that is in line with other more recent pieces of legislation.
  6.45 pm
  As I have said, I will consider amendment (a) to amendment No. 4 with a view to writing into the changed clause 3(3) something that is suitable to take account of clause 2(3). That might be done in another place if the House so decides.
  It would be easy to be sidetracked by the hon. Member for West Bromwich, East (Mr. Snape). He may have bored us many times, but I assure him that he will never bore me by talking about improved safety standards—a subject to which I am entirely committed. The hon. Gentleman must stop putting about the bogy that an operator who provides a service under a clause 3(1) agreement with London Regional Transport will provide a less safe service than London Transport's bus or underground division. The general duties are overriding and, as I said in Committee, the standards should be no less in the private sector. All the drivers employed by a private operator will be required to have public service vehicle licences. The hon. Member for West Bromwich, East left me with the impression, no doubt inadvertently, that they might not have PSV licences.
  London Regional Transport will enter into a clause 3(2) agreement with Snapey Transport Ltd., for example, when that operator can provide a more cost-effective service than that which London Transport can provide. I believe — and I understand that my belief is shared by the Board of London Transport — that greater efficiency could be achieved. Perhaps the spur to that greater efficiency is the provision of a service by a private operator under a clause 3(2) agreement for London Regional Transport. I hope that the House will accept amendment No. 4 and allow me to consider again amendment (a).
  Mr. Spearing: Does the Minister agree that while it would be incumbent upon Snapey Transport Ltd. or any other transport undertaking——
  Mr. Snape: Such as Chalkey Coaches Ltd.
  Mr. Spearing: —to employ drivers with public service vehicle licences, the important features of London Transport's training school include a system of supervision and spot checks — a psychological network which extends throughout its services? Surely the Minister will agree that that system should be found comprehensively within all operators, whether they be subsidiaries or contractors.
  Mrs. Chalker: I agree with the hon. Gentleman that the assumed psychological effect of there being one named company and one standard of operation would be marvellous if it were true in reality. The hon. Gentleman knows from his many long years of questioning the operations of London Transport's bus division that this philosophy does not always apply within the organisation. However, I agree that that philosophy should be extended and required of a clause 3(2) operator who is under contract to LRT to provide a service. The most important thing is to provide a better standard of service to the passenger in London. I am convinced that clause 3(2) agreements will put that need in the forefront of the provider's mind. I hope that the House will accept amendment No. 4 and that the hon. Member for Newham, South will not press amendment (a) to a Division.
  Amendment agreed to.
  Mrs. Chalker: I beg to move amendment No. 5, in page 3, line 23, leave out from 'fares' to 'other' in line 25 and insert
  'in respect of any such services and their routes and frequency of operation and over charges in respect of any'.
  Mr. Speaker: With this it will be convenient to discuss Government amendments Nos. 8 and 9.
  Mrs. Chalker: These amendments deal with two related points, both of which result from Opposition amendments in Committee. If the House so wishes, I shall discuss them in detail, but I do not think that there is much to add to what I said in Committee. Therefore, I shall wait to hear the Opposition's comments.
  Mr. Prescott: I do not wish to detain the House. The amendment is an amended version of an Opposition amendment moved in Committee, which the Minister was generous enough to accept in principle. Perhaps she will tell us why she is amending something that in Committee she found satisfactory. I accept that she said in Committee that she was not wholly satisfied with the wording of the amendment, and that may be why she has tabled these amendments.
  I notice that the reference to location of routes has been deleted. I am not sure about the difference between "location of routes" and "structure of routes". Lawyers make a great deal about different words. I assume that "location" means route 77 or route 88, and that there is no holding to a particular location. Why has the Minister deleted the word "location", which is quite important in the generality of words used about structure?
  In Committee we pressed the Minister to say whether she had reached a firm decision on whether the agreements should be properly monitored. An agreement can be arrived at between LRT and another body. Such agreements may not necessarily be public, although some people may wish to monitor them to ensure that they are being fully carried out. Has the Minister given any further thought to what she said about that in Committee? It is an important point when there is general concern that such agreements may lead to cuts in services and routes. Such agreements should be publicly available for examination.
  Mr. Spearing: Once again, the efficiency and necessity of Report stage comes to the fore. I understand that there was considerable discussion in the upstairs club about this matter——
  Mrs. Chalker: Club?
  Mr. Spearing: After many days and nights of debate, those acquainted with the Bill and the discussions about it are in a good position to speak on Report.
  The amendments are important, and may not go far enough. Since the founding of the London General Omnibus company and its money-making activities, adjustment to routes—in location, extent and frequency of service—has been the key to successful operation. A London bus manager said to me, "I have made London Transport million of pounds by looking at the arithmetic." If, under the Bill, an area is allocated to a subsidiary or a contractor, it is for the operator to decide where the routes should run, the frequency of the service, the times of the first early morning bus and the last bus at night, how many buses should run on a Sunday, and so on. That is crucial because a few changes in services could mean the difference between profit and loss and the difference between a subsidy and no subsidy.
  If an operator was told to run a quarter-hourly service on Sunday from 9 am to 9 pm, the economic requirements of that route would be different from where there was no Sunday service. Similarly, the late evening services and the degree to which a service is run clockface or every 15 minutes or less are fundamental features of bus operation.
  Whether a bus continues for only an additional 200 yd, or whether two routes are merged for economy of operation — that is why so many London bus routes appear to wander everywhere — is fundamental to the service provided for the public. It appears that the detailed discussions on these matters will no longer take place at 55 Broadway, but — the Minister may wish to correct any misapprehension—will be at the discretion of the operator. If that is not so, why does the amendment refer
  "the general structure of routes of such services"?
  The word "general" is, ironically, included as a qualification. The amendment also uses the phrase
  "general level of provision to be made with respect to their frequency".
  Not only is the general level important; the particular level is also.
  When the Minister replies, perhaps she will tell us the degree to which there will be an option or discretion available to the subsidiary or contractor for changing the routes and frequency. How much co-operation will there be between the contractors and local government? As any London Member knows, where the buses go is a matter for discussion between the local London borough council, the London Transport passenger committee, the informal committees that have operated over many years and, sometimes, the residents' associations and the owners of municipal and private facilities.
  Until now, the structure has been clear. There has been consultation with borough councils and with 55 Broadway. If there are to be subsidiaries and contractors, they should be bound by similar procedures. I hope that the amendments do not illustrate any loosening of those arrangements. They do not always work perfectly, but at least we know who is responsible. If the future structure is not as tight as it should be, I hope that the other place will examine this important matter.
  People who cannot easily get around — those to whom even the location of a bus stop or the withdrawal of a route is important to their daily life — will be dependent upon the legal interpretation of these
  66
  amendments and clauses. There must be no lesser obligation on public service operators than there is currently on London Transport.
  Mrs. Chalker: I wish to say a few appropriate words in response to the debate. In Committee I said that I agreed with the intention of the hon. Member for Kingston upon Hull, East (Mr. Prescott) in amendment No. 60. I said:
  "LRT will need to adopt some strategic control over service levels and routes and there is some advantage in giving it that control as a statutory duty … I shall be happy to make that amendment on Report.—[Official Report, Standing Committee B, 7 February 1984; c. 313.]
  In amendment No. 5 we have rearranged the wording of clause 3(3)(c), but not to change its substance. Clause 3(3) describes the various matters that may be provided for in agreements between LRT and another bus operator under clause 3(2). The wording in clause 3(3)(c) incorporated the amendment proposed by the hon. Member for Kingston upon Hull, East, which added references to service frequencies and location of routes.
  This is a drafting amendment which counsel believes will improve the present wording. A route must have a location as that is the definition of a route. I see no need to repeat that. The amendment does not change the substance of the clause or the meaning intended by the hon. Gentleman.
  7 pm
  Amendment No. 8 adds to clause 8 a requirement on LRT to determine the general structure of routes and level of frequency for the whole range of services, whether operated by LRT, its subsidiaries or independent operators, as allowed under clause 3(2) agreements. To some extent, that measure complements at a general level amendment No. 5. As I said before, I agreed that LRT should have a statutory duty to determine such matters in addition to the general level and structure of fares and charges for which clause 8 already provides.
  The hon. Member for Newham, South (Mr. Spearing) asked me about monitoring. The LRT, in ensuring that the contract between LRT and an independent operator under a clause 3(2) agreement was fulfilled, would need to monitor it. Undoubtedly, matters of commercial interest are involved in monitoring the contract, but I see no reason why we cannot devise some measures so that at least the provisions of the contract are made known publicly. I shall look into that matter.
  LRT will make decisions on routes under the clause 3(2) agreements. Clause 29 provides for discussions with the London boroughs. I realise that there are problems, as the hon. Member for Newham, South said, in deciding where a bus stop is sited—for instance, further up a hill because elderly people live at the top of that hill. Occasionally, it is important that extra distances are added to routes for passengers' benefit. The clause 3(2) agreement aims to provide a better service for passengers. The purpose of the amendment is simply to tidy up the wording and bring it into line with the general wording of the Bill. The measure does not go against anything that we decided in Committee. The hon. Gentleman need have no fears. I hope that the House will accept each of the three amendments.
  Amendment agreed to.
  Mr. Simon Hughes: I beg to move amendment No. 6, in page 5, line 13 leave out subsection (4).

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  I do not propose to push the amendment to a vote, but it raises an issue that we discussed in Committee. I believe that the Minister appreciates the amendment's objective. Subsection (4) provides for some guidance about the formation of companies, in pursuance of clause 4, to provide bus or underground rail transport services in London. If the Bill is passed, London Regional Transport will be set up as the overall authority. It will have the power to set up a bus and then an underground rail operation. Under subsection (3), those bodies will be public companies under the Companies Act 1948.
  The disadvantage of subsection (4), which the amendment seeks to delete, is the problem of the definition of "objects". Under the Companies Act, the objectives of companies can be enormously wide and general. The definition under subsection (4) is that the objects
  "shall be such as appear to London Regional Transport to be necessary or appropriate in view of the purpose for which that company is established".
  I hope the Department will accept that we need a statement of a company's objectives in meeting the duties that the Bill and its predecessors set on that company.
  LRT has a duty, as we have already said, under clause 2 to meet certain objectives to ensure that, for the time being, London's transport needs are met. Within that overall framework, I contend that the two companies to be set up should aim to meet those objectives. Those objectives should be incorporated in the statute that set them up, not left entirely to LRT's discretion.
  Subsections (3) and (4), by creating companies under the Companies Act for the bus and underground rail operations in London, clearly admit the possibility that one day shares in those companies could be sold. That option will become available. Of course, the Minister will say, "That is not our intention," but she must accept that that is a possibility. A company under the Companies Act, limited by shares and registered under the 1948 Act, can be sold if the Government decide to do so. If the shareholder—the Government—decides to get rid of its shares, the company will be put on the market. It is, therefore, vital to provide against that eventuality and prevent the opportunity of any privatisation of the bus and underground companies as they exist on the date of handover. Their objects should be written into statute and not just be left to be decided from time to time by LRT.
  I believe that the Department understands the amendment's objective. I should be grateful if the Minister would reveal whether the amendment is acceptable and whether later there will be an accommodation of the aim of incorporating the objects of the two companies in their articles of association.
  Mrs. Chalker: I thought that I had made it clear when we discussed our amendment in Standing Committee about subsidiaries of companies under the Companies Act that, in creating separate bus and underground subsidiaries within LRT, we would have exactly what the hon. Gentleman has been seeking — companies properly performing duties such as those we are requiring of LRT. By seeking to remove subsection (4), the hon. Gentleman will not achieve a specific change. I know that his amendment is a probing one, and that is why it is on the Amendment Paper.
  I do not find any measure in subsection (4) especially offensive. It provides for LRT to determine the appropriate
  68
  objectives for its subsidiaries. I have already given an undertaking, which I repeat, that LRT will determine appropriate objectives for the subsidiaries which are in line with its objectives. It is not, therefore, necessary to write that measure into the Bill. The objectives of a company, which are written out in its memorandum and articles, under the Companies Act, give the company powers. We cannot put duties into those objectives written into the memorandum and articles, and I believe that the hon. Gentleman understands that point.
  This measure covers the two companies—LRT bus and LRT underground — which are to be LRT's subsidiaries. They cannot be anything but under the control of LRT, so the first part of subsection (4) is a reasonable requirement and the second part is simply a matter of sensible administration.
  The hon. Gentleman is anxious that we should include words in the clause to ensure that the two separate companies act responsibly in line with the duty imposed on LRT. I see no need for any additional words to be written into the clause, because the hon. Gentleman's aim is the understanding on which we have been working and it is the way in which subsidiary companies would be required to work. The objectives under the memorandum and articles of association would simply give them the power to operate in that way.
  I made the matter clear to the hon. Gentleman in Committee. However, if he was not satisfied with what I told him in that long debate, I am not sure that these few remarks will make the matter clear. But we are not at odds. The Bill covers the point that he is making and I see no need for further amendments. If the hon. Gentleman can explain to me why he thinks that there should be an amendment I will look at the matter again, but I do not see from what he has said tonight or previously that the creation of separate subsidiaries, with separately identifiable costs and revenues, is anything but good commercial practice and a reflection of what LT has already done in treating the bus and tube services as separate businesses. All that LT has not done is to make them into Companies Act companies.
  The hon. Gentleman also mentioned the potential for selling off. It is a very, very, very remote possibility that that would happen, but I have to agree that, although it may be unlikely, it is possible. However, as long as the companies remain subsidiaries of LRT, which is what the Bill provides, they will be well provided for. If there is a change, it will involve the memorandum and articles of the company and conditions could be imposed on the sale. However, I cannot see that happening and I do not think that there is any need to write an amendment into the Bill. In any case, the amendment does not achieve the objective sought by the hon. Gentleman.
  Mr. Simon Hughes: I said earlier that I did not intend to press the amendment to a vote. I listened carefully to the Minister and I hope that the "very, very, very remote possibility" becomes an impossibility and that privatisation will be ruled out.
  The two operations — bus and underground —obviously need to be run separately. There is no objection to that. However, it is always safer — perhaps, as a relatively new hon. Member, I am naturally sceptical—to have things written down so that we know what will happen in future, rather than to sign a blank cheque for the Government. That was the objective behind the

  69
  amendment. The Minister has said that she will listen to further arguments, and perhaps I can take up that offer without detaining the House tonight.
  I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

Clause 8

  CO-ORDINATION OF CHARGES UNDER CONTROL OF LONDON REGIONAL TRANSPORT
  Amendments made: No. 8, in page 8, line 30, after Act;' insert—
  '( ) the general structure of routes of such services and the general level of provision to be made with respect to their frequency of operation;'.
  No. 9, in page 8, line 32, leave out 'so provided' and insert
  'provided as mentioned in paragraph (a) above'. — [Mrs. Chalker.]
  Mr. Simon Hughes: I beg to move amendment No.10, in page 8, line 33, leave out clauses 9, 10 and 11.
  Mr. Deputy Speaker (Mr. Paul Dean): With this, we may take the following amendments:
  No. 55, in clause 9, page 8, line 44, after '(1)(a)', insert 'and (b)'.
  No. 56, in clause 10, page 10, line 4, leave out subsection (4).
  Mr. Hughes: I shall not take the same conciliatory attitude in moving this amendment, which would delete a substantial and important part of the Bill. Clauses 9 to 11 come under the heading "Powers of disposal" and the key words are at the start of clause 10:
  "The Secretary of State may give directions to London Regional Transport requiring them to exercise their powers under section 9 of this Act"
  —the power to dispose of
  "the whole or any part of the undertaking of any of their subsidiaries"
  and the right hon. Gentleman may also give directions to LRT requiring it to exercise its powers under clause 3, which sets out the agreements that relate to other companies, routes and so on. The only constraint on the Secretary of State is that he shall consult LRT and, in certain cases, the local authorities for which any proposal to dispose will mean substantial changes in their public transport system.
  7.15 pm
  The enormous power that clauses 9 to 11 gives the Secretary of State is set out in clause 10(4), which shows that LRT cannot bark back, because the subsection says, as bold as brass:
  "It shall be the duty of London Regional Transport to give effect to any directions given to them by the Secretary of State under this section notwithstanding any of their other duties under this Act."
  Although LRT has been set up to look after London and its transport needs, the duties in clause 2, which we have debated at length, efficiency, economy, safety, the needs of pensioners and the disabled and the varying needs of the outlying districts and the inner city can all be disregarded. All that it needs is a decision from the Secretary of State, a formal process of consultation—the Secretary of State does not have to take account of anything that is said to him — and a direction. Then he can instruct LRT,
  70
  "Dispose of this part of your operations. Get rid of it. From now on, it will be run by an independent company. The public transport sector wilt not run that operation."
  Over the years, public transport in London has expanded as technology has advanced. We have moved from trams and overgrounds to the building of the underground and its extension to join other traffic routes, such as Heathrow airport. We have done that with less public subsidy than is given to the transport system of any comparable city in western Europe, let alone any where else.
  One reason why London Transport has so often been criticised is that insufficient money has been put in and insufficient capital has been provided for investment to keep transport going in our city and to make life for our people reasonable and satisfactory.
  A Select Committee looked at the needs of London Transport because of the disastrous state of transport in the capital, which has been improved by a sensible fares structure and other actions by those responsible for it in the past few years. However, transport in the capital will be improved fundamentally only if the Government realise that they have a responsibility not only to Londoners, but to the rest of the nation, to make sure that London's transport system works well.
  Clauses 9 to 11 give a power of disposal to the Secretary of State in a Government whom we know believe in privatisation and say so at every turn — they have already handed over to private enterprise British Telecom and North sea oilfields — and they are a signal that disposal may occur sooner rather than later. Of course, the Secretary of State will say that it may not and that there are no plans at the moment to do that. However, the greatest assurance that the House can give to the passengers of today and tomorrow is that there will be a public transport system, providing bus, underground and rail transport in a co-ordinated and increasingly integrated way, and that it will not be left to cut-throat competition that will oversubscribe the best routes and leave the less satisfactory routes with no one to run them.
  I have lived for some while in the inner south-east part of London, which the Secretary of State and the Minister of State admitted in Committee is a poor relation in transport terms. It does not have a good service from London Transport, and there is an enormous danger that things will get worse for such areas. For many Londoners, public transport is their only transport. They need guarantees that public transport will be cheap, efficient and economical and that it will answer their needs. That can be guaranteed only if it is run in an integrated way by people who are in some way accountable to them.
  Under this legislation, the thread of accountability will be thin enough. The private operators will not be accountable. There will be no guarantees, and the people will be badly served. The clauses should be deleted. This is a matter of principle to which the House should respond positively in the interests of the consumer.
  Mr. Snape: The clauses that would be struck out by amendment No. 10 are a disgrace. Under clause 10, the Secretary of State virtually appoints himself dictator in relation to the future of the assets of LRT. It is the most undemocratic clause that I have seen in the 10 years that I have spent in this House. As the hon. Member for Southwark and Bermondsey (Mr. Hughes) has rightly

  71
  said, all that is necessary to dispose of any part of the capital's transport system is for the Secretary of State to instruct LRT to dispose of certain assets.
  Clause 9 is profoundly undemocratic in that a non-elected quango could itself dispose of assets paid for by the London ratepayers and indeed by the nation's taxpayers, but the undemocratic nature of clause 9 is entirely and widely surpassed by the power of dictatorship in clause 10.
  As the hon. Member for Southwark and Bermondsey said, the Government have made no secret of their belief in the principle of privatisation. None of us on the Opposition Benches shares their views, and I suspect that some Conservative Members do not share them either. The Government make no secret of their views, and they are something that we have to live with during election campaigns, for example.
  The Secretary of State needs clause 10 to assist him in his plundering of the nation's assets. That is appalling. It would be bad enough if the powers of disposal under the clause were restricted by an affirmative resolution on the Floor of the House. The Government would be able to assemble the collection of juvenile stockbrokers whom the nation so mistakenly elected in June 1983, who could trot through the Division Lobby, perhaps believing that they would be able to get their sticky fingers on the assets when they are disposed of on the private market. However, we shall not even have that safeguard. All that will be needed is an instruction from the Secretary of State.
  There is something poignant about the fact that the hon. Member for Southwark and Bermondsey has moved an amendment to delete clause 9, which is the only clause to refer to employee share schemes. Such schemes are dear to the heart of the Liberal party. I nevertheless congratulate the hon. Gentleman on moving the amendment. He made a good speech. I am sorry that he did not make that speech when we discussed this matter in Committee. We discussed the matter at one o'clock in the morning, and the Liberal party does not operate at maximum efficiency after midnight. The hon. Member voted on the matter, but he did not make a speech. However, the speech he has just made was worth listening to.
  I doubt whether the Secretary of State will give us a satisfactory reply. It would be strange if he were to create such a precedent at such a late stage in the passage of the Bill. If we receive from the Secretary of State one of the arm-flailing laconic replies to which we have regrettably become accustomed, I shall urge my right hon. and hon. Friends to support the amendment.
  Mr. Spearing: The words "Powers of disposal" appear in italics before clauses 9 to 11. They are followed by two pages of close and, indeed, almost impenetrable prose devoted to giving powers to the Secretary of State and to LRT to dispose of assets. The three clauses are an asset-stripper's charter, and it is a disgrace that such a charter should be incorporated in the legislation. If I am wrong, or if I am exaggerating the position, I invite the Secretary of State to tell me why those clauses are included.
  If the Secretary of State thinks that he has gone a bit far, I draw his attention to my amendments Nos. 55 and 56. Even if he resists the amendment moved by the hon.
  72
  Member for Southwark and Bermondsey (Mr. Hughes), I hope that he will consider favourably amendments Nos. 55 and 56, either here or in another place.
  Amendment No. 55 gives LRT a duty, when considering the disposal of
  "the whole or any part of the undertaking of any of their subsidiaries",
  to obtain the consent of the Secretary of State. I have no doubt that the present Secretary of State will say "Aye, aye, aye" to any suggestion from LRT. After all, he is responsible for the Bill. However, the importance of the amendment lies in the responsibility of the Secretary of State to the House and, through the House, to the public. If at any time in the future I or any of my hon. Friends should wish to table a question asking the Secretary of State what assets LRT had disposed of in the previous year, the Secretary of State—or, indeed, an office not far from where you sit, Mr. Deputy Speaker—could say that under the Act that is not the responsibility of the Secretary of State, and that therefore the question may not be asked. We should therefore be unable to find out. The matter would be another official secret, and it is not inconceivable that some young lady at 55 Broadway might use a copying machine to her professional discredit.
  If we add the words "subsection (1)(b)" in subsection (2), it will be necessary for LRT to obtain the permission or consent of the Secretary of State for the disposal of:
  "The whole or any part of the undertaking of any of their subsidiaries."
  That would be a safeguard that does not exist at the moment. I see no reason why we should not have that safeguard.
  7.30 pm
  Amendment No. 56 proposes to leave out the most objectionable part of clause 10. The hon. Member for Southwark and Bermondsey has already read out part of clause 10 (4) but I should like to read it out in full so that its full enormity can sink in. It says:
  It shall be the duty of London Regional Transport to give effect to any directions given to them by the Secretary of State under this section notwithstanding any of their other duties under this Act."
  We all know that LRT's general powers are inadequately laid out and that even the weakest ones can be overridden by the Secretary of State at the drop of a hat with regard to the disposal of assets. The management can ask the Secretary of State to allow it to keep a garage, depot or piece of land because it wants to build offices due to expansion or because it wants to dispose of offices in one place and build them in another and the Secretary of State will be able to say, "No. Notwithstanding your wishes to retain that you must, for statutory reasons, get rid of it." The House is being invited to give him that power.
  Whatever might have been said in Committee, it is the Secretary of State's duty to say why such power is required. We might be able to understand the request for the power if he were Secretary of State for Defence but, even in that case, there is a good deal of lively and proper controversy. Is this elective dictatorship? He has an obligation to defend clause 10(4). I support what has been said about the enormity of clauses 9, 10 and 11, and challenge the Secretary of State to say why clause 10 (4) should remain part of the Bill.
  Mr. Ridley: I am amused that the amendment No. 10 has been tabled by the Liberals. We have had none of this from the Labour party, and it never occurred to me that

  73
  the Liberal party was the last defender of the public sector. The Liberals have stolen a march on the Labour party, which accepts, by and large, that it is reasonable for the Government to privatise parts of London Transport as and when we see fit. The Labour party did not raise clause 11 in Committee. It is one of the major clauses of the Bill, but we had not a word on it. We had a little perfunctory debate on clauses 9 and 10, in which the hon. Member for West Bromwich, East (Mr. Snape) demonstrated his rhetorical and amusing skills, but they went through quickly. Suddenly, at this last moment, the Liberal party comes along defending nationalisation with strong words such as "enormous powers".
  Mr. Stephen Ross: The right hon. Gentleman admitted in Committee that this was a nationalisation Bill which provided powers that exceeded Herbert Morrison's, so what is he saying now?
  Mr. Ridley: That I am trying to make it a little better. The hon. Member for West Bromwich, East called clause 10 most undemocratic, and the hon. Member for Newham, South (Mr. Spearing) described it as an asset stripper's charter.
  The simple objective is that the Government should be able to take legal powers to privatise parts of a nationalised industry. How else did we ever privatise anything except by presenting a Bill to the House to give us powers to sell to the public various bits or the whole of nationalised industries. We took powers in the Transport Act 1981 to privatise parts of British Rail and we took powers in the Transport Act 1982 to privatise bits of the National Bus Company. Why, therefore, should we not take powers in what will be the London Regional Transport Act 1984 to privatise London's regional transport?
  Mr. Simon Hughes: The answer to the Secretary of State's question is that we should judge issues on their merits. There is no merit in making London Transport a fairground for the private operator when we need a coordinated development of the present system, which is getting better and needs to be improved rather than dismantled.
  Mr. Ridley: That is not what the hon. Gentleman said. He said that these were enormous and unjustified powers. Granted that we differ in that the Government wish to take those powers, I do not see what is enormous or unjustified in putting them into a Bill and asking the House to approve them, as that is the only way which we can take such powers. There is nothing exceptional or unusual about that. We are taking powers because we will want them if we want to privatise parts of London Transport.
  Mr. Spearing: I am grateful to the Secretary of State for giving way and I do not want to do him an injustice. Privatisation for maintaining operations is one thing, but does he agree that clauses 9, 10 and 11 could also apply to the disposal of the operation of public transport, which is utterly different, and that that is the greatest danger?
  Mr. Ridley: We should consider the possibilities. My hon. Friend the Minister said in Committee —I have also said it—that we do not intend to use the powers to create a major erosion of London Transport as we know it. If we were blessed with the extreme good fortune of parts of London Transport being profitable, it is conceivable that we might be able to return large parts of it to the private sector. That would be nothing but good.
  74
  The hon. Member for Southwark and Bermondsey (Mr. Hughes) must not make the elementary mistake of equating public transport with public ownership. There is no reason why public transport should not be privately owned. Indeed, it would probably be much better if it were. His insistence that because it is called public transport it must be in public ownership is completely outwith his normal perspicacity. I agree with him about providing a service for Londoners and the need to maintain the network although some parts of it are uneconomic. There is no chance of returning it to the private sector, hut there will be parts or bits of London Transport which might be better in the private sector.
  Clause 3 enables LRT to get private contractors to do a job more cheaply. There might be a paucity of routes in south-east London and it might be better for London Transport to let the private sector provide transport in that part of London in the cheapest and best way. We are much more likely to get a decent service if the private sector is allowed to get on with the job than if we rely on nationalised industry, which we all know can let us down. I make no apology for asking for the powers. I apologise only to my hon. Friends that it might not be easy to find many candidates to make use of them.
  The hon. Member for Newham, South asked two questions in regard to two amendments. They go in opposite directions as, having castigated me as the arch privatiser and villain of all times, he was desperately keen that London Transport should require my consent before selling anything. On his definition, he would hardly have to bother, as I will be bound to give such consent. Given his strange view of me, I am surprised that the hon. Gentleman did not suggest that LRT should not have to ask me about selling anything. It will be helpful for him to know that there are precedents in all Acts concerning nationalised industries to the effect that the consent of the Secretary of State does not have to be obtained to sell part of one of their subsidiary's undertakings. That is modelled on British Rail's power in section 1(1)(b) of the Transport Act 1981.
  The hon. Member for Newham, South asked about the power in section 10(4), which provides that a direction from the Secretary of State would overrule LRT's duty. We must have that power. If we intend to require LRT to dispose of an asset, we cannot have LRT able to plead that that would interfere with performing its duty under clause 2 and, therefore, give rise to legal and other disputes about whether it was possible to do so. It is right for Parliament to take the power to require industries, which are owned by taxpayers and managed by the Government, to do what the Government want them to do. There can be no question of having that obfuscated by any conflict about the true position. I am proud to advocate that. The Government wish to be able to tell LRT to dispose of an asset if we think that that would be right. I do not want anything to stand in the way.
  Mr. Snape: When we asked the Secretary of State whether he could instruct LRT to operate services in the way that Londoners require and to instruct LRT about the level of the fares, why did he say that those matters were entirely the responsibility of management? What is wrong with management when it comes to flogging off public assets?
  Mr. Ridley: The difference is that management manages the assets, which taxpayers have invested in

  75
  LRT, while the owners of the assets are represented by the Government, who can decide what to do with the assets under their control. The Bill takes powers for the use of the Government's assets.
  This is a slightly amusing but mischievous debate to have so late in the day. I am sure that the House will want warmly to endorse the Government's proposals.
  Question put, That the amendment be made:—
  The House divided: Ayes 129, Noes 238.

  Division No. 236]

  [7.41 pm

  AYES

  Alton, David

  Hughes, Sean (Knowsley S)

  Archer, Rt Hon Peter

  Hughes, Simon (Southwark)

  Ashdown, Paddy

  John, Brynmor

  Ashley, Rt Hon Jack

  Jones, Barry (Alyn & Deeside)

  Bagier, Gordon A. T.

  Kennedy, Charles

  Banks, Tony (Newham NW)

  Kilroy-Silk, Robert

  Barron, Kevin

  Leighton, Ronald

  Beckett, Mrs Margaret

  Lewis, Ron (Carlisle)

  Beith, A. J.

  Lewis, Terence (Worsley)

  Bell, Stuart

  Lloyd, Tony (Stretford)

  Bennett, A. (Dent'n & Red'sh)

  Lofthouse, Geoffrey

  Bermingham, Gerald

  McGuire, Michael

  Blair, Anthony

  McKay, Allen (Penistone)

  Boothroyd, Miss Betty

  McKelvey, William

  Boyes, Roland

  Maclennan, Robert

  Bray, Dr Jeremy

  McNamara, Kevin

  Brown, Hugh D. (Provan)

  McTaggart, Robert

  Brown, N. (N'c'tle-u-Tyne E)

  McWilliam, John

  Brown, R. (N'c'tle-u-Tyne N)

  Martin, Michael

  Brown, Ron (E'burgh, Leith)

  Maxton, John

  Buchan, Norman

  Maynard, Miss Joan

  Callaghan, Jim (Heyw'd & M)

  Michie, William

  Campbell-Savours, Dale

  Mikardo, Ian

  Canavan, Dennis

  Miller, Dr M. S. (E Kilbride)

  Carter-Jones, Lewis

  Morris, Rt Hon A. (W'shawe)

  Clarke, Thomas

  Morris, Rt Hon J. (Aberavon)

  Clay, Robert

  Nellist, David

  Cocks, Rt Hon M. (Bristol S.)

  Oakes, Rt Hon Gordon

  Cohen, Harry

  Parry, Robert

  Cook, Frank (Stockton North)

  Patchett, Terry

  Corbett, Robin

  Pavitt, Laurie

  Craigen, J. M.

  Pendry, Tom

  Crowther, Stan

  Pike, Peter

  Cunliffe, Lawrence

  Prescott, John

  Dalyell, Tam

  Randall, Stuart

  Davies, Ronald (Caerphilly)

  Richardson, Ms Jo

  Davis, Terry (B'ham, H'ge H'l)

  Robertson, George

  Deakins, Eric

  Robinson, G. (Coventry NW)

  Dewar, Donald

  Robinson, P. (Belfast E)

  Dixon, Donald

  Ross, Ernest (Dundee W)

  Dobson, Frank

  Ross, Stephen (Isle of Wight)

  Dormand, Jack

  Sedgemore, Brian

  Dubs, Alfred

  Sheldon, Rt Hon R.

  Duffy, A. E. P.

  Shore, Rt Hon Peter

  Dunwoody, Hon Mrs G.

  Short, Ms Clare (Ladywood)

  Ellis, Raymond

  Skinner, Dennis

  Evans, John (St. Helens N)

  Smith, Rt Hon J. (M'kl'ds E)

  Ewing, Harry

  Snape, Peter

  Fatchett, Derek

  Spearing, Nigel

  Fisher, Mark

  Steel, Rt Hon David

  Flannery, Martin

  Stott, Roger

  Foot, Rt Hon Michael

  Thomas, Dr R, (Carmarthen)

  Fraser, J. (Norwood)

  Thorne, Stan (Preston)

  Godman, Dr Norman

  Tinn, James

  Golding, John

  Torney, Tom

  Gould, Bryan

  Wainwright, R.

  Hamilton, James (M'well N)

  Wardell, Gareth (Gower)

  Hamilton, W. W, (Central Fife)

  Wareing, Robert

  Hart, Rt Hon Dame Judith

  Weetch, Ken

  Haynes, Frank

  Welsh, Michael

  Heffer, Eric S.

  Wigley, Dafydd

  Hogg, N. (C'nauld & Kilsyth)

  Williams, Rt Hon A.

  Hoyle, Douglas

  Winnick, David

  Hughes, Robert (Aberdeen N)

  Woodall, Alec

  76

  Wrigglesworth, Ian

  Mr. Michael Meadowcroft and

  Mr. Archy Kirkwood.

  Tellers for the Ayes:

  NOES

  Aitken, Jonathan

  Glyn, Dr Alan

  Alexander, Richard

  Goodhart, Sir Philip

  Amess, David

  Goodlad, Alastair

  Ancram, Michael

  Gower, Sir Raymond

  Arnold, Tom

  Gregory, Conal

  Ashby, David

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

  Atkins, Robert (South Ribble)

  Grist, Ian

  Atkinson, David (B'm'th E)

  Grylls, Michael

  Baker, Rt Hon K. (Mole Vall'y)

  Gummer, John Selwyn

  Baker, Nicholas (N Dorset)

  Hampson, Dr Keith

  Baldry, Anthony

  Hanley, Jeremy

  Banks, Robert (Harrogate)

  Hannam, John

  Batiste, Spencer

  Hawkins, C. (High Peak)

  Beaumont-Dark, Anthony

  Hayes, J.

  Bellingham, Henry

  Hayward, Robert

  Bendall, Vivian

  Henderson, Barry

  Benyon, William

  Higgins, Rt Hon Terence L.

  Berry, Sir Anthony

  Holland, Sir Philip (Gedling)

  Best, Keith

  Holt, Richard

  Biggs-Davison, Sir John

  Howard, Michael

  Blaker, Rt Hon Sir Peter

  Howarth, Alan (Stratf'd-on-A)

  Bonsor, Sir Nicholas

  Howell, Rt Hon D. (G'ldford)

  Boscawen, Hon Robert

  Hunt, David (Wirral)

  Bowden, A. (Brighton K'to'n)

  Hurd, Rt Hon Douglas

  Boyson, Dr Rhodes

  Jenkin, Rt Hon Patrick

  Braine, Sir Bernard

  Key, Robert

  Brandon-Bravo, Martin

  King, Rt Hon Tom

  Bright, Graham

  Lang, Ian

  Brinton, Tim

  Latham, Michael

  Brittan, Rt Hon Leon

  Lawler, Geoffrey

  Brooke, Hon Peter

  Lester, Jim

  Brown, M. (Brigg & Cl'thpes)

  Lewis, Sir Kenneth (Stamf'd)

  Browne, John

  Lightbown, David

  Bruinvels, Peter

  Lloyd, Ian (Havant)

  Buchanan-Smith, Rt Hon A.

  Lloyd, Peter, (Fareham)

  Budgen, Nick

  Lord, Michael

  Bulmer, Esmond

  Luce, Richard

  Butcher, John

  Lyell, Nicholas

  Butterfill, John

  McCrindle, Robert

  Carlisle, Kenneth (Lincoln)

  Macfarlane, Neil

  Carlisle, Rt Hon M. (W'ton S)

  MacGregor, John

  Carttiss, Michael

  MacKay, Andrew (Berkshire)

  Chalker, Mrs Lynda

  Maclean, David John

  Chapman, Sydney

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

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

  McQuarrie, Albert

  Clark, Dr Michael (Rochford)

  Madel, David

  Clarke, Rt Hon K. (Rushcliffe)

  Major, John

  Cockeram, Eric

  Malins, Humfrey

  Colvin, Michael

  Malone, Gerald

  Conway, Derek

  Maples, John

  Coombs, Simon

  Marlow, Antony

  Cope, John

  Marshall, Michael (Arundel)

  Couchman, James

  Mather, Carol

  Crouch, David

  Maude, Hon Francis

  Dicks, Terry

  Maxwell-Hyslop, Robin

  Dorrell, Stephen

  Mayhew, Sir Patrick

  Douglas-Hamilton, Lord J.

  Mellor, David

  Dover, Den

  Merchant, Piers

  du Cann, Rt Hon Edward

  Meyer, Sir Anthony

  Dunn, Robert

  Miller, Hal (B'grove)

  Durant, Tony

  Mills, Iain (Meriden)

  Dykes, Hugh

  Miscampbell, Norman

  Edwards, Rt Hon N. (P'broke)

  Moate, Roger

  Emery, Sir Peter

  Molyneaux, Rt Hon James

  Evennett, David

  Monro, Sir Hector

  Eyre, Sir Reginald

  Montgomery, Fergus

  Fallon, Michael

  Moore, John

  Farr, John

  Morris, M. (N'hampton, S)

  Fookes, Miss Janet

  Morrison, Hon C. (Devizes)

  Forman, Nigel

  Morrison, Hon P. (Chester)

  Forsythe, Clifford (S Antrim)

  Moynihan, Hon C.

  Franks, Cecil

  Neubert, Michael

  Fraser, Peter (Angus East)

  Newton, Tony

  Fry, Peter

  Nicholls, Patrick

  Garel-Jones, Tristan

  Nicholson, J.

  77

  Norris, Steven

  Stevens, Martin (Fulham)

  Onslow, Cranley

  Stewart, Allan (Eastwood)

  Oppenheim, Philip

  Stewart, Andrew (Sherwood)

  Ottaway, Richard

  Stewart, Ian (N Hertf"dshire)

  Page, Richard (Herts SW)

  Stokes, John

  Parris, Matthew

  Stradling Thomas, J.

  Patten, Christopher (Bath)

  Sumberg, David

  Pawsey, James

  Taylor, Teddy (S'end E)

  Peacock, Mrs Elizabeth

  Tebbit, Rt Hon Norman

  Powell, William (Corby)

  Temple-Morris, Peter

  Powley, John

  Terlezki, Stefan

  Prentice, Rt Hon Reg

  Thomas, Rt Hon Peter

  Price, Sir David

  Thompson, Donald (Calder V)

  Proctor, K. Harvey

  Thompson, Patrick (N'ich N)

  Raffan, Keith

  Thornton, Malcolm

  Raison, Rt Hon Timothy

  Thurnham, Peter

  Rathbone, Tim

  Townend, John (Bridlington)

  Renton, Tim

  Tracey, Richard

  Rhodes James, Robert

  Twinn, Dr Ian

  Ridley, Rt Hon Nicholas

  van Straubenzee, Sir W.

  Ridsdale, Sir Julian

  Vaughan, Sir Gerard

  Rifkind, Malcolm

  Waddington, David

  Rippon, Rt Hon Geoffrey

  Wakeham, Rt Hon John

  Roberts, Wyn (Conwy)

  Waldegrave, Hon William

  Roe, Mrs Marion

  Walden, George

  Rossi, Sir Hugh

  Waller, Gary

  Rost, Peter

  Wardle, C. (Bexhill)

  Rowe, Andrew

  Watson, John

  Rumbold, Mrs Angela

  Watts, John

  Ryder, Richard

  Wells, Bowen (Hertford)

  Sayeed, Jonathan

  Wells, John (Maidstone)

  Shaw, Sir Michael (Scarb')

  Wheeler, John

  Shelton, William (Streatham)

  Whitfield, John

  Shepherd, Colin (Hereford)

  Whitney, Raymond

  Shepherd, Richard (Aldridge)

  Wiggin, Jerry

  Shersby, Michael

  Winterton, Mrs Ann

  Silvester, Fred

  Winterton, Nicholas

  Smith, Tim (Beaconsfield)

  Wolfson, Mark

  Soames, Hon Nicholas

  Wood, Timothy

  Spencer, Derek

  Woodcock, Michael

  Spicer, Michael (S Worcs)

  Yeo, Tim

  Squire, Robin

  Young, Sir George (Acton)

  Stanbrook, Ivor

  Stanley, John

  Tellers for the Noes:

  Stern, Michael

  Mr. Archie Hamilton and

  Stevens, Lewis (Nuneaton)

  Mr. Tim Sainsbury.

  Question accordingly negatived.

Clause 13

  CONTRIBUTION FROM LONDON RATEPAYERS TO EXPENDITURE ON GRANTS UNDER SECTION 12
  Mr. Ridley: I beg to move amendment No. 11, in page 11, line 44, leave out from 'order' to end of line 2 on page 12.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 12.
  Mr. Ridley: This amendment makes an affirmative resolution in accordance with the pledge that I gave in Committee. I hope that the House will accept it.
  Amendment agreed to.
  Amendment made: No. 12, in page 12, line 7, leave out 'subsection (8) above' and insert 'this section'.

Clause 14

  PROVISIONS SUPPLEMENTARY TO SECTION 13
  Amendments made: No. 13, in page 13, line 5, end insert
  'and any such rules shall have effect, in their application by virtue of this section, with any further modifications necessary in consequence of this section.'.
  78
  No. 14, in page 13, line 6, leave out 'so applied' and insert 'applied by this section'.

Clause 21

  CONTROL OVER FINANCIAL COMMITMENTS OF SUBSIDIARIES
  Amendments made: No. 15, in page 19, line 5, leave out from 'not' to 'any' in line 7 and insert—
  '(a) except with the consent of the Secretary of Slate, lend money to or give any guarantee for the benefit of'.
  No. 16, in page 19, line 9, at end insert
  ';or
  (b) except with the consent of the Secretary of State and the approval of the Treasury, borrow money from any such person.'.

Clause 22

  LIMIT ON FINANCIAL COMMITMENTS OF LONDON REGIONAL TRANSPORT GROUP
  Mr. Simon Hughes: I beg to move amendment No. 17, in page 19, line 21, leave out '£100 million' and insert '£250 million'.
  When we debated this matter in Committee the Secretary of State rightly said that there is at present a project to extend the Piccadilly line to terminal 4 at Heathrow, and he said that that would be a profitable venture for which LRT would have to borrow. That project might cost between £60 million and £70 million. In addition, there is a margin for contingencies should additional short-term borrowing be needed if, for example, there were a long strike. A further £20 million to £30 million is allowed for that, and the total is £100 million. That is a large sum. Although the Piccadilly line extension might use £70 million of that, there is no provision at this stage in the Bill for another substantial sum to be aquired by borrowing for another project. We can all think of substantial capital investment projects that could be undertaken to improve London Transport.
  The Department of Transport generally accepts the need to extend transport provision in the south-east of the city, where there is almost no underground system. It was proposed that the Jubilee line should be extended far to the east of where the docklands light railway is proposed to go, adjacent to the Isle of Dogs and crossing the river several time before it reached Thamesmead. We must also consider whether the docklands light railway should be extended to the south of the river, and there are other substantial investments for which a far-sighted London Regional Transport, like a far-sighted London Transport, could plan.
  It seems highly sensible to say that, since London Transport is contemplating major public expenditure, we should provide at this stage for the Government, through LRT, to have that borrowing power. The alternative would be for the Government to return to the House each time the facility had to be increased, perhaps to £150 million, then to £175 million and then to £200 million. We should; grant LRT permission to borrow so that the foreseeable capital needs which are clearly identified — a phenomenal amount of needs are still unmet in London — can be planned for and the money provided. This amendment would allow that proposition to be contemplated now and the financial provision to be made.
  Mr. Ridley: The hon. Member for Southwark and Bermondsey (Mr. Hughes) knows from our debates in Committee that the Government intend that the vast majority of London Transport's investments will be met by 100 per cent. capital grants. Its investments in the underground railway and in buses are unlikely to be profitable. Therefore, there is no point in requiring LRT to borrow. That would simply add to a growing capital debt which, in the end, would fall on the ratepayers.
  However, the Government have decided to isolate those investments made by London Transport which will either be profitable or, if they are not profitable, should not be made—property development is one example—or other activities where it is carrying out activities extraneous to the provision of passenger transport. We shall also isolate investments, such as the extension of the Piccadilly line to terminal 4, which might be profitable. We have provided this £100 million borrowing power, which can be increased by order, for financing matters of that sort.
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  The point at issue is the limit of the first tranche that can be increased by order. I say £100 million, and the hon. Gentleman says £250 million. After all the lectures from the hon. Gentleman about the need to be accountable to the House and giving it the opportunity to debate at length all that happens in London Transport, he now offers me a prize which, were it not for my democratic instincts, I might even have grabbed by accepting the amendment. It would mean that the Government would not have to come to the House nearly so frequently to renew the borrowing power by order or later by primary legislation when the ultimate limit is reached.
  I think that the £100 million will last for a good few years. It can then be increased if the House makes an order to that effect. If the limit were £250 million, I doubt whether the Government would have to come back to the House for decades. Parliament has always been jealous of its opportunities to control the borrowing of the nationalised industries, and I should not like to defraud it of any opportunity that might occur earlier.
  Indeed, the only regular statutory opportunity for the House to debate the affairs of a nationalised industry—unless it does so on a Supply Day or in a debate on a Select Committee report — is when the Government come forward with a borrowing order or a new borrowing powers Bill. Therefore, the custom has been to set the limits rather lower so that the Government must occasionally come back to the House.
  If the hon. Gentleman wishes me to forgo that pleasure, there is a temptation to accept his amendment, but I am sure that the rest of the House would prefer to leave the limit at such a level that we would have to come back in a few years rather than for many years to come. In those circumstances, I hope that the hon. Gentleman will not press his amendment.
  Mr. Prescott: In view of the Secretary of State's outrageous remarks, I should like to make a few comments. He now talks of democracy and accountability, having just voted down the proposed London Transport Money Bill which would have given the House an annual opportunity to discuss what was happening with the money. The right hon. Gentleman's defence is that as the limit is £100 million the House will have the opportunity
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  to debate the matter once that limit is exceeded. The Secretary of State must ask himself whether his arguments are consistent.
  I do, however, have some sympathy with the nationalised industries when faced with these borrowing requirements. Inevitably, when such requirements are imposed upon the nationalised industries, their interest payments have become crippling. A good example is the borrowing requirements from the Treasury vis-a-vis the National Bus Company, which has to pay those interest charges as public dividends in competition with private companies which have not had the same stringent financial requirements placed on them.
  When the right hon. Gentleman talks of lines, routes or services that are profitable or non-profitable, it takes us back to the horrible arguments that we used when discussing the Cooper formulae in relation to British Rail, when we differentiated between inner cities and so on. I understand that the Victoria line was justified on the ground of social costing. In other words, a judgment was made that what the community saved by way of congestion, accidents and so on should be put into the computer. I understand that the Glazier model has demonstrated that every £1 investment can give £1·25 return if all the savings to the community are taken into account.
  I gather that the Secretary of State is not happy with that conclusion. I do not know whether he pulled out the plug, but modern economists take account of social costings in their assessments. I only hope that that modern way of looking at transport will commend itself to the Secretary of State, but I doubt whether social costings are an important consideration when he determines whether or not something is profitable.
  Amendment negatived.

Clause 33

  ANNUAL REPORT
  Mr. John Hannam: I beg to move amendment No. 52, in page 28, line 10, at end insert—
  '( ) include a statement of any action taken during that year by London Regional Transport and any subsidiaries of theirs in relation to, or for the purpose of securing, provision for disabled persons in the public passenger transport services and facilities provided for Greater London (whether by London Regional Transport or any subsidiary of theirs or by any other person);'.
  Mr. Deputy Speaker (Mr. Paul Dean): With this we may take amendment No. 61, in page 28, line 18, at end insert—
  '(d) provide individual and consolidated statistics relating to all modes of public passenger transport operated by or on behalf of London Regional Transport in respect of this Act, together with all personnel, property and equipment, in no less detail and in such a manner as to be comparable with those published by the predecessor authority.'
  Mr. Hannam: This amendment is the result of extensive discussions between the all-party disablement group and representatives of various organisations connected with the transport of disabled people in London. I first say a special thank you to the Royal Association for Disability and Rehabilitation for its help in drafting the amendment, as well as to Peter Large and the Joint Committee on Mobility who put forward various ideas during the Committee stage.

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  Under clause 33, LRT is required to make a report to the Secretary of State accounting for its functions during that year. The amendment will ensure that LRT includes in its report a statement of any action it or any of its subsidiaries has taken to provide for the transport needs of disabled people either during that year or in the future. It would go a long way towards reassuring the disabled— those who live in London and those who visit—that serious consideration will be given to the provision of transport that suits their special needs.
  Although the Government have done much to ensure that LRT will take account of the needs of the disabled, there is still anxiety that the Bill contains no specific commitment to ensure that their needs are not set aside or overlooked. The amendment does not cut across any of the Government's intentions or objectives. Indeed, through the provision that the Secretary of State will have to place a copy of the report before Parliament, we shall be guaranteed the opportunity to debate the provisions that are made for the disabled. My hon. Friend the Minister of State is fully committed to this cause. I therefore hope that she will recognise that the amendment will be of value in her efforts on behalf of the handicapped.
  Let me briefly mention some of the representations that I have received as secretary of the all-party disablement group. We held a meeting only last month to discuss transport for the disabled and were told of some of the problems faced by disabled travellers. For example, we heard of the difficulties experienced by blind people when travelling on the underground or on buses. Frequently, there is no oral announcement when a station or bus stop is reached. We were told that most underground trains are fitted with a tannoy system that is rarely used, even though blind people are totally dependent on that kind of oral information.
  Conversely, deaf people are totally dependent on visual information. At our meeting, the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) spoke of the difficulty for deaf people changing trains in the middle of a journey, particularly as all British Rail announcements are made over the tannoy. All that is required is a blackboard message on platforms indicating train changes.
  In many instances great improvements can be made to our transport system for very little additional cost. For example, the partially sighted would be vastly assisted if a strong white line were painted on the edge of steps leading to a train or bus. Arthritic people or others who have difficulty walking would be helped if sturdy hand rails were installed on buses, and deaf people would be helped by more visual signs.
  Many improvements have taken place, especially since the International Year of the Disabled Person. There is a growing awareness of some of the transport needs of the disabled. However, we must not let it stop there. There is still a great need to produce a coherent transport policy for people with disabilities, both in London and across the country.
  So far I have spoken only of disabled people who are able to use public transport, but many more are unable to use any form of public transport because of their disability. Only too frequently, the only service that those people can use is a door-to-door service, often by a vehicle that can accommodate a wheel chair. Such a service is provided in many areas, not least in London, by the dial-a-ride system.
  I do not wish to go into the pros and cons of that service, but the principle of such a service is most important,
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  because it can enable those who are effectively housebound through their disabilities to get out and about. A recent survey has shown that 80 per cent. of trips were of less than 5 miles, and that the vast majority of them are to carry out normal everyday activities such as shopping.
  Mr. Tony Banks: The advantages of dial-a-ride schemes are well known, and what the hon. Gentleman said is correct, but is he aware that the 12 or so dial-a-ride schemes now being operated in London would be at some risk were the GLC to be abolished? Therefore, what representations is he making to his colleagues on that matter?
  Mr. Hannam: I shall not be drawn into the hon. Gentleman's point about the abolition of the GLC. I am sure that dial-a-ride services will continue to be provided in London and elsewhere. I am sure that the Government will do all they can to assist in the provision of such services, because it has been accepted in principle by the Minister that the dial-a-ride scheme is worth while and should be continued. It is not a service that we can ignore. Great improvements have been made in the accessibility of services to disabled people. We are slowly but surely providing them with opportunities to lead full and fulfilling lives. Therefore, it would be ironic if they could not travel in order to make use of these opportunities because there was no public service accommodating their needs.
  I have read the Committee proceedings in the Official Report and I know that the Committee spent a considerable time discussing the needs of disabled people. I have seen the contributions made by my hon. Friend the Minister of State, and I know the contribution that she has made in general to the transport needs of disabled people. I do not doubt for one moment that she is genuine and wholehearted in that commitment, and I know from personal experience of working with her that she will carry it out. However, I recommend the amendment to the House as one which will help to ensure that the commitment is carried out not only by this Government but by other Ministers and other Governments, not least in respect of London Regional Transport.
  We are, after all, talking of providing a transport service to the public, and in doing so we must provide a service to those members of the public who are disabled. Disabled people have special needs, and special efforts must be made to satisfy those needs. A report is being submitted to the Secretary of State suggesting that there should be a statement of the public services available to the disabled. Many people would say that the services do not go far enough, but I believe that they will be seen to go much further than most people imagine.
  Similar amendments were made to what is now the Wildlife and Countryside Act, and the Countryside Commission has a duty to make an annual report to the Secretary of State on matters relating to disabled people. The National Heritage Bill was amended in another place to place such duties on the Historic Buildings and Monuments Commission for England. There was a welcome amendment in another place to the Telecommunications Bill which goes even further, setting up an advisory body for disabled people.
  In setting up a board to deal with the public transport of London, we cannot ignore the very special and great transport needs of disabled people. I place on record my

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  desire to see those needs given high priority under London Regional Transport. Disabled people, almost more than anyone else, depend on public transport, so I hope that we shall do all we can to ensure that it is accessible to them.
  8.15 pm
  Mr. Spearing: I endorse in general the remarks of the hon. Member for Exeter (Mr. Hannam) and hope that the Minister will accept his amendment. Clause 33 relates to the annual report of London Regional Transport, and the hon. Gentleman's amendment would add an obligation to report on facilities for disabled people. My amendment No. 61 has been coupled with the hon. Gentleman's amendment.
  One of the interesting aspects of the existing London Transport system has been the continuous series of annual reports published by that body and by its predecessors from 1933 onwards. At the end of most of those reports —and, I am glad to say, generally in increasing detail —there has been set out not only the general financial operation required under the various Companies Acts but detailed statistics relating to transport matters. For each mode—bus, tube and, formerly, trolleybus and tram— statistics were set out together with numbers of personnel, numbers of passengers carried, average takings per passenger mile, average costs per passenger mile, contributions to the overheads at 55 Broadway, numbers of vehicles employed, numbers purchased, numbers disposed of, and so on. Anyone reading those statistics could get a very good idea of some of the economics of the operation. I must admit to having perused them to some benefit over the past 30 years or so — and sometimes to the discomfort of people at 55 Broadway.
  The importance of the figures is twofold: first, they tell us how the operation is going and, secondly, they provide an invaluable tool to the understanding of how public transport in London has been working over that period. Of course, the reports do not cover all the statistics for public transport, which would have to include British Rail and, indeed, taxicabs, but it is a very good basis. It would be wrong if the successor authority did not maintain an equally comprehensive range of statistics. The statutory responsibility of London Regional Transport, particularly in respect of the rail network, goes beyond the present responsibility of the London Transport Executive. Let there be some additional statistics. But I hope that the operations, which have been run historically by London Transport, will be illustrated by exactly comparable statistics in no less detail.
  The Minister of State may say that the transport system will not always be run by LRT — there will be subsidiaries, and sales to private operators and so on. We have just debated them. That may be so, but I hope that part of the conditions, either of disposal or of contract, will be to make returns so that the comprehensive picture can be maintained. I have just realised that the title of the Bill is grossly inadequate, and what is purported or claimed by the Government to be the purposes of the Bill could not be fulfilled.
  The Minister of State may say that the inclusion of a statutory provision requiring such statistics is not necessary, in which case I hope that she will give an undertaking to make it a requirement upon the Secretary of State—he certainly has enough powers to do so—
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  because unless the statistical detail is maintained in at least a comparable form we shall not know how public transport in London is progressing, we shall not be able to follow the trends, and we shall not be able to follow the financial twists and turns, which clearly will accelerate. Above all, we should not be able to assess the way in which the LRT is fulfilling its statutory duties and the extent to which the Secretary of State for Transport will be doing the same to the House and to the people of London.
  Mr. Simon Hughes: It would perhaps have been wiser to wait for the Minister to respond. All hon. Members respect the view put forward by the hon. Member for Exeter (Mr. Hannam) on behalf of the many people who are disabled, and who have clearly made their views known to many hon. Members, particularly during the stages of this Bill. They find that the present transport system in London gives, often much more than those who are completely sighted and not handicapped, them neither the mobility nor the freedom that they need.
  On the days that we have had lobbies here on behalf of the disabled groups, they have been addressed by the Secretary of State, by the hon. Member for Kingston upon Hull, East (Mr. Prescott) and by others who have met them. The all-party disablement group has met them and listened to their needs. It is clear that although the Minister said in Committee that she will make it her responsibility to ensure that one member of the LRT board will have a particular interest, although not exclusive responsibility, for the needs of the disabled, their needs would best be met if they could be monitored year by year so that the House, and the public, could see what had been achieved and decide what still needed to be donè.
  There are three groups in our community about which we have been particularly concerned as the Bill has gone through its stages. The largest group are the pensioners, and we have already had debates about that. The second largest group of particular significance is that made up of the handicapped and the disabled. For them, public transport should be a lifeline, and even though it needs considerable planning and expenditure, if the public transport system will not provide that lifeline, nobody else will. It is vital that we take this opportunity to do what, as the hon. Member for Exeter said, has been done with other legislation— ensure that we respond to the call from the disabled that the needs for which the public sector provides are met through the legislation that we make.
  The third group are the young. Again the Minister responded positively by saying that she recognised that they have particular transport needs, have a voice and wish to be heard. It is important that the disabled can be sure that we have taken on board their strong appeal to us.
  For me, and I suspect that it was the same for the hon. Member for Kingston upon Hull, East, one of the most depressing moments since the Bill was introduced came when we went with the Secretary of State to a meeting in a Committee Room at which he addressed disabled people. I am sad to say—none of us would wish to say this— that it appeared then that he did not understand the difficulties and problems that so many have in getting on and off buses and tubes, with there not being enough space for wheelchairs, in having access to the system and in being able to be users of the public transport system. I hope that that was a false impression, and I hope that that

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  experience has chastened the Secretary of State, as much as he needed to be, to make sure that he will respond positively.
  I hope, too, that the Minister can give some positive reassurance. Her first step should be to respond to the amendment tabled by the hon. Member for Exeter on behalf of all parties by saying that the Government will accept it, and do their duty to the disabled. The Government must provide for the disabled more than has been provided in the past, and they must see what we are doing.
  Sir Hugh Rossi: I strongly support the amendment tabled by my hon. Friend the Member for Exeter (Mr. Hannam). During the two years when I had the privilege to serve the disabled as a Minister, I became deeply aware of their problems in integrating and participating in ordinary everyday life, and of how transport was so fundamental to their not becoming prisoners of their environment, within the four walls of their homes. Contrary to what the hon. Member for Southwark and Bermondsey (Mr. Hughes) said, I found the greatest goodwill in the Department of Transport, a realisation of this problem and the desire to do whatever is within its power, and that of Ministers, to help to resolve the problems of disabled people.
  I urge my hon. Friend the Minister, although I am sure that she does not require much urging on this matter, because I know her views as we worked closely together in the Department of Health and Social Security, to accept the amendment. However, the disabled desire not to be treated as separate from the rest of society, for example through special provisions for their transport made through the social services. My constituents have told me that they are tired of special handouts and special provisions. They want the transport authorities to bear in mind their needs when they are running their services and to make provision within those services so that the disabled can use them as ordinary members of the public.
  My hon. Friend the Member for Exeter was right to draw attention to such small matters as intelligible tannoy systems that blind people can hear and understand on station platforms, and provision for notices so that the deaf can see where they are going. Such small matters require only a little forethought by planners in the authority, but can make a world of difference to those suffering from disabilities and who need a little extra help to use the ordinary facilities that the rest of us can enjoy.
  I hope that this is the direction in which we shall go, and I hope that the LRT board will make it part of its responsibility to ensure that there is provision so that the disabled can regularly use, without difficulty, the services provided for the community as a whole.
  Mrs. Chalker: I thank my hon. Friend the Member for Exeter (Mr. Hannam) for moving the amendment. I welcome it and urge the House to accept it. No hon. Member can be in any doubt that I have always believed that transport provision for the disabled is among the most important ways in which we can help them. My hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) gave so much to them when he was Minister with responsibility for the disabled. He was right to say that careful thought is needed when providing for them, but they also wish to be provided for in line with able-bodied
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  people where that is practicable. While that may not always be practicable, we should do all that we can to achieve that aim.
  During the passage of the Bill, as at all other times, I have consulted a large number of representatives of disabled people, including my own advisory panel, on the transport of disabled persons. I have been very appreciative of the understanding that they have given me. Naturally I had a good deal of understanding about this from the outset, having made my maiden speech in the House on the subject.
  8.30 pm
  There are many comments that I could make, but I know that time is short. However, there are a few matters that I should outline.
  I have believed for a long time that to impose a statutory duty would not be practicable and appropriate in all cases, but I have always wished to see public transport made accessible where it reasonably could be. The matters that my hon. Friend the Member for Exeter mentioned as illustrations, including visual displays to help the deaf and verbal announcements to assist the blind and partially sighted, are all matters on which research is going on and which we are seeking to support through the Transport and Road Research Laboratory.
  We are seeking already in the Department to give support, and what I said in Committee and at all meetings about these issues was that I believed that LRT should have clear instructions to work towards the same end— access to the same transport systems as used by everyone else wherever possible. LRT will have clear instructions to work towards the development of its own vehicles and infrastructure with the needs of the disabled fully in mind.
  Mention was made of special services, such as dial-a-ride schemes for some severely disabled people who are unable to use conventional public transport. I shall comment further on them in a moment. I am certain that we must make flexible provision because there is a wide variety of disablement for which we wish to provide mobility.
  Some right hon. and hon. Members know already that we have been carrying out research and development in the Department, and from this we now have the possibility of a new generation of London taxis which will be able to make a major contribution to the carriage of many disabled people wishing to make use of them. These vehicles will provide a truly door-to-door service in the way that even the most accessible bus cannot hope to achieve, although that door-to-door service may not be necessary for everyone.
  I do not pretend that there are unlimited resources for funding all that we would like to do—I believe that we have to be cost-conscious and remember the need for cost- effectiveness and value for money in providing the system —but we want to expand the services so that they are solidly based financially and conceptually to continue and, where possible, extend the provision of transport for disabled people.
  Mr. Martin Stevens: Will the London Regional Transport Board be able to make available to local branches of dial-a-ride, "handicab", and the rest, advice on how to operate their schemes in the most efficient way, because that would be welcomed?
  Mrs. Chalker: If my hon. Friend will bear with me for a moment, I shall be coming to the need for advice.

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  While the responsibility for funding special services remains with local boroughs, there are ways in which we can help. I wish LRT to work closely with the specialist services and also to make sure that through its contacts not only with the Department but with the London Regional Passenger Committee and other representatives of the disabled they have as much information as they need. I made it clear in Committee that one member of the London Regional Transport Board would be required to provide a focal point for the interests of the disabled, but that I should expect all members of the board to take an active interest. I shall also ensure that at least one member of the LRPC is specifically there to represent the needs of the disabled, and I hope that there will be more.
  There is real concern among disabled people that assurances might not be carried into action. That is why I was delighted to see my hon. Friend's amendment, which I can accept, because that will require the LRT annual report to contain a statement of what it has done to improve services for the disabled—the very thing that LRT, with its provision of public transport, can do to help disabled people to enjoy the transport that the rest of us take so much for granted. I want it also to include what it has done to help those responsible for funding the special services as well as the improvement of its own services. I think that that partially meets the question asked by my hon. Friend the Member for Fulham (Mr. Stevens). That will be a useful way of focusing the attention of LRT at the highest levels on the continuing need year by year to make progress to bring additional mobility to the disabled.
  I am grateful to my hon. Friend the Member for Exeter for moving his amendment, because it has allowed these matters to come back to the attention of the House.
  Whilst I am discussing the need for the provision of mobility for the disabled, I take the opportunity to remind the House of a development which I announced last week and which I believe will make a major contribution to ensuring that the special services in London are sensibly and properly developed in future. These are the services for those who might not be able to enjoy public transport even as it is improved for the disabled in the years ahead.
  My Department is funding the setting up and running of a London section of the national advisory unit for community transport for a period initially of three years. The grant will cover 100 per cent. of the capital and running costs of that organisation and, I hope, will go a long way to giving the sort of advice so often sought by dial-a-ride schemes and others seeking to provide mobility for disabled people who cannot benefit from public transport.
  The national advisory unit has been in action for more than two years. It was set up and funded with the support of my Department, and it is well known and respected in other parts of the country. It provides a national source of expertise and advice on a wide range of community transport, including schemes for the elderly and for the disabled. Above all, it has achieved a major success in providing the most effective services within the resources available. It has the experience of some 70 dial-a-ride schemes round the country and many more at the planning and development stage. The advice of the unit is already in great demand.
  I have thought for some time that London needed closer and more concentrated help of this kind over the next few
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  years of transition and development. That is why I have asked the NAU to set up a special section to help take this forward. It will be starting work in the course of this summer, and I hope that it will make a significant impact on the London scene within a very few months.
  The hon. Member for Southwark and Bermondsey (Mr. Hughes) mentioned the meeting in the House a few weeks ago. I was very sorry to miss it. Unfortunately, I had influenza at the time.
  Mr. Prescott: I bet the Secretary of State wished the hon. Lady could have been there.
  Mrs. Chalker: At that meeting, a number of the people present were rather unhappy at the way that it was conducted by the Federation of Dial-a-Ride, and the Joint Committee for the Mobility of the Disabled and others have written saying that they do not believe the rather rowdy meeting and the tactics operated during it were representative of disabled people as a whole.
  I believe that most disabled people recognise that there are limits to what can be done, however willing and determined a Minister may be about the provision to be made. I believe that it is right that we are going ahead in a sensible and organised manner to help the dial-a-ride schemes, which is what the London branch of the national advisory unit will do.
  Dr. Alan Glyn: Will my hon. Friend confirm that she is trying to get the LRT to do as much as is physically and financially possible to help the categories of disabled people whom she mentioned?
  Mrs. Chalker: Indeed, I am certainly seeking to do as my hon. Friend said.
  The hon. Member for Kingston ùpon Hull, East (Mr. Prescott) seems to think that this is a waste of time. I believe that the mobility of the disabled is most important. In Committee I expressed clearly my determination to provide for that.
  Mr. Prescott: Window dressing.
  Mrs. Chalker: There is no such thing in my book on this score as window dressing. The hon. Gentleman would do well to withdraw his remark.
  Mr. Tony Banks: Will the Minister clarify a point? It is all very well to offer advice on facilities for the disabled and the efficient use of the dial-a-ride scheme, but will she also provide the resources? In the final analysis it is resources that the Minister needs to guarantee, not advice. Advice usually comes a lot cheaper than resources.
  Mrs. Chalker: I understand the hon. Gentleman's concern about this matter. That is why I said earlier that the provision of such services should be through the local authority. I have already undertaken to discuss this with my right hon. Friend the Secretary of State for the Environment because I am deeply concerned about the way in which money is already being spent. It should be spent to the best possible effect for the mobility of the disabled. The hon. Gentleman will take a different line from me on many things, but I am determined to see a better provision of mobility for the disabled, whether it be through local authorities or LRT.
  The hon. Member for Newham, South (Mr. Spearing) has been waiting patiently for me to deal with amendment No. 61. He asked for more information in the annual report. He will know that that matter was raised in

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  Committee. As I told the hon. Member for Kingston upon Hull, East, there will be the maximum statistical and performance information in LRT's reports, but I do not think that it is necessary to spell that out in statute. I undertake to tell the LRT chairman and board that such information is required in the annual report. I hope that that will meet at least the spirit of amendment No. 61, which I advise my hon. Friends not to support if the hon. Gentleman presses it to a Divsion.
  Whatever the mutterings that we have heard during the debate, my hon. Friend the Member for Exeter has done the House a service by moving this amendment. I hope that the House will receive it with acclamation.
  Mr. Alfred Morris: It would be churlish not to express some pleasure at the Government's acceptance of amendment No. 52. I understand from my Front Bench colleagues, to whose labours on the Bill I pay warm tribute, that concessions by the Government have been rare. For their part, they have made a number of extremely important propositions which, if accepted, would much have helped disabled people. Any concession is welcome, but this is not an occasion for self-congratulation by the Government since, as the Minister knows full well, much more was hoped for from the Bill by disabled people and their organisations.
  The clause is a lineal descendant of one that we enacted in section 22 of the Chronically Sick and Disabled Persons Act 1970. We included in that Act the request for an annual report on action taken by Departments of State to improve the outdoor mobility of the disabled, not for the purpose merely of reporting progress, but to excite progress in improving that mobility. Section 22 has led to much practical progress over the years. Yet there has not been as much progress as we looked for in 1970 and there is much more to do, both in London and throughout the country.
  I congratulate the hon. Member for Exeter (Mr. Hannam) on winning approval for his amendment, but feel sure he will agree that it is only a small consolation prize when considered against what many disabled people are still actively seeking in terms of improved mobility. When we talk about the disabled in the context of public transport, we must think not only of people who are unable to walk, but of those who are unable to see or to hear, among many other kinds of disabled people. As the hon. Gentleman said, while many people can walk, they are still severely handicapped as to outdoor mobility. In particular, we must not ignore the claims of people who are blind or deaf and I am glad that was emphasised in more than one speech tonight.
  8.45 pm
  Many disabled people wanted much more from the Bill than they have so far been offered. Their concern is not just for concessionary passes or even dial-a-ride, taxi-card or accessible buses and trains. They need a complete and integrated public transport system that will take into account the transport needs of people with disabilities along with those of all other passengers.
  When the Minister speaks about integration, she must be challenged to match precept with practice. All hon. Members know that there are considerable unmet claims among disabled people, and this debate provides a brief opportunity for the House to consider them tonight. I hope
  90
  that the Government will be more receptive to those claims in the other place than they have been in the House of Commons.
  Recently, I heard a Conservative Member say to disabled people that the main hope for strengthening the Bill in the interests of disabled people lay with the House of Lords, not with the House of Commons. That was a disturbing statement for any hon. Member to have made. Yet we must hope that as the Bill is in need of further improvement, in the view of disabled people, there will be serious efforts in another place to effect some of the amendments that have been unsuccessfully pressed on the Government.
  We are talking here of well in excess of half a million people in the capital city who are disabled in one way or another. The disabled are not a tiny minority and they are fully entitled to the time of this House for the fullest possible consideration of their claims. If disabled people are to be a part of society, and not apart from society, talk about integration must be matched with purposeful action. Much more action is necessary than the Government are prepared to take. While we welcome the clause, I hope that the Government will be more responsive to amendments in another place than they have been in the House of Commons in the proceedings on the Bill so far.
  Amendment agreed to.

Clause 35

  PROVISION FOR ADDITIONAL FUNCTIONS OF LONDON REGIONAL TRANSPORT AS TO RAILWAY SERVICES
  Mrs. Chalker: I beg to move amendment No. 18, in page 29, line 34, after 'made', insert—

  '(a) under subsection (1) above specifying a day for the application of sections 36 and 37 of this Act or revoking a previous order under that subsection specifying such a day; or

  (b) confirming any order under that subsection'.

  Mr. Deputy Speaker (Mr. Paul Dean): With this it will be convenient to take Government amendment No. 19.
  Mrs. Chalker: This amendment makes it clear that an order under clause 35 bringing part II of the Bill into force will require the approval of both Houses under the affirmative resolution procedure. The amendment also provides for the affirmative resolution procedure for an order to revoke an earlier order and return to the present position. That was an undertaken given in Committee, which the Government are honouring at this point.
  Amendment agreed to
  Amendment made: No. 19, in page 29, line 37, after 'above', insert
  'varying a previous order under that subsection'.—[Mrs. Chalker.]

Clause 39

  THE LONDON REGIONAL PASSENGERS' COMMITTEE
  Mr. Simon Hughes: I beg to move amendment No. 21, in page 33, line 24, leave out 'subject to subsection (6) below'.
  Mr. Deputy Speaker: With this it will be convenient to take amendment No. 22, in page 34, line 7, leave out subsection (6).
  Mr. Hughes: We here enter on that part of the Bill which deals with the representation of and the participation by the consumer in the affairs of LRT. Although there are provisions, which start at clause 39, about how passengers will be consulted and although there is one definite improvement in that there will be one body, the London Regional Passenger Committee, which in relation to public transport in London will replace the present two bodies, one with a responsibility in relation to British Rail and the other with a responsibility in relation to London Transport, there is a fundamental flaw in the procedure to which the amendment seeks to draw attention and which the amendment, if accepted, would begin to put right.
  The fundamental flaw is that if the Bill is unamended there will be no consumer voice at the table where the decisions are made. There will be nominees, and no one but nominees, of the Secretary of State for Transport of the day, all appointed by him, and at his entire discretion. There will be no opportunity for the consumer to participate in the decisions that will affect 7 million residents of London, let alone those from outer London, from outside London and from abroad who use LRT.
  The amendment seeks to limit the amount of subject matter that will be taken out of the competence of the consumer body set up under the Bill. By virtue of clause 39(6) there will be an area of discussion in which the consumer body will not be able to participate. Already it does not have a voice at the table, and already it is being told that it will not be able to discuss certain matters, such as the most fundamental fares. The fares structure, and the fundamental questions that affect most consumers regarding how much they will have to pay for the service, will be outside its remit.
  We have tabled some amendments, which have been accepted, and for that I am grateful. One has to be grateful for small crumbs from the table. However, the majority of the amendments have been rejected, some of which would give the consumer a better voice. It cannot be right that, by clause 39(6), the consumer will not be allowed to consider the charges to be made for any service or facility or any question relating to

  "(a) the discontinuance by London Regional Transport or any subsidary of theirs of all railway passenger services from any station or on any line on their railways; or

  (b) the discontinuance or reductions of railway services provided by the Railways Board or any subsidiary of theirs."

  That means that when there is a proposal to close a part of the railway network, this body — the strongest consumer body that we will have, and the only counterweight to the Department and its appointees— will not have a say on something as substantial as whether the railway line—a part of public passenger transport provision—continues. If the Government were to make this one concession they would show that they are serious and that they accept that the professional, respectable and experienced consumer bodies are very unhappy.
  As part of the briefing that all members of the Committee received, the National Consumer Council wrote to us and asked us to urge upon the Government improvements on behalf of the consumer. The two local consumer bodies for passenger transport in London made the same sort of approach to members of the Committee. They were obviously waiting to hear what the Minister said. It is interesting to observe that, as a result of all her fine words and kind responses, they hit the nail on the head when they said in a subsequent comment:
  92
  "Mrs. Chalker, the Minister of State, is very good at giving the impression that she is giving more away than she actually has … there are some matters which it would clearly be appropriate for us to come back to in the Lords."
  In a debate on an earlier amendment, the House heard about the disabled and the minority view on the Conservative Benches that, if something is sent to the House of Lords, they might take the matter seriously and say to the Government, "We are not letting you get away with this." There might be a sufficient number of Back Benchers in the House of Lords to say that the case has merit and that the least that can be done, if the consumer is to be excluded from decision-making, is to make sure that the consumer is properly consulted on everything regularly, and not in a cursory and casual way which allows the consumer view to be dismissed by a Secretary of State. The Government might give a token of their good faith by saying, "We accept that point. The provisions that we have laid down do not go anywhere near meeting the all-party Select Committee recommendation that there should be a consumer voice. They fall enormously short of that, and we are prepared to make yet another concession along the road to hearing the consumer's view of what London Transport should be doing."
  We are told by the Secretary of State that it is to be a nationalised industry. If nationalised industries are to be anything, they should be at the service of the public. At present, they are unlikely to be that. Indeed, LRT is unlikely to be that, because it will not even be in a position to hear adequately, regularly and consistently what the public want. That is not acceptable, it is disgraceful, and the amendment, if accepted, would allow some redemption of the Government Benches before it is too late.
  Mrs. Chalker: I think that the hon. Member for Southwark and Bermondsey (Mr. Hughes) has forgotten everything that I said in Committee. I suggest that he reads it again.
  Clause 39(6) in the Bill as published excludes certain questions of responsibility from LRPC so that its remit is comparable to that of the CTCC and the area transport users consultative committees—the TUCCs. Since the Bill was published, we have made two moves in the direction of these amendments. I have said that we accept that there is a role for the consumer bodies in relation to the structure and relativities of fares, and that the Government intend to deal with the matter if and when a suitable legislative opportunity arises. However, the hon. Gentleman accepted in Committee that it could not be done for London alone, and that it needed to be done for the whole country. That is why it does not arise on this Bill. Meanwhile, in advance of such legislation, British Rail will consult the CTCC and the London Regional Passengers committee about fares and charges on an informal basis. I am sure that LRT will do the same in relation to the LRPC. I cannot commit it because it has not yet been appointed, but I have every intention of asking it to do so. I see no reason why it should not do what BR already intends to do.
  An amendment to the clause was agreed in Committee which would enable the LRPC to consider reductions in services provided by LRT or its subsidiaries. In the case of BR services, informal consultation has always taken place, and will continue to do so. In the case of proposals by LRT or BR to withdraw rail passenger services, the role of the LRPC will be exactly the same as the role that the

  93
  area transport users consultative committee now has in relation to proposals affecting British Rail's passenger services. I can see no justification for making the position in the London area different from that elsewhere in the country.
  I have already said that we shall move on this matter. The hon. Gentleman knows that he is pushing at an open door in this respect. It is a question of doing it in the most orderly and sensible way to achieve a reasonable balance in the amount of discussion, deliberation and progress that needs to be made in the provision of transport for people in London. I hope that he will not press the amendment.
  Mr. Snape: I shall be very brief. If the LRPC is to be largely as concerned as LRT with such matters as the level of the provision of services, fare increases, and so on, it would seem to be common sense to give the committee as wide a remit as possible. To prevent it from discussing such issues as railway closures — whether they are proposed by BR or LRT — is unduly restrictive and makes one wonder why the Government are so terrified.
  The Minister talks about things being orderly. I did not think that she approved of countries where people went around saying that society must be orderly. However, railway closures frequently lead to people being somewhat disorderly. If the amendment were accepted, there would at least be an opportunity for such important matters to be debated before the committee. We are obviously grateful to the Minister for having widened the scope of the debate, but the amendment does not ask a great deal of her. Her refusal to accept it seems unduly restrictive and somewhat illogical.
  9 pm
  Mr. Simon Hughes: The one hope that we had was that the promise of jam tomorrow would be converted by the Minister into, "We shall do something." However, she has said only what the Secretary of State and the Minister said in Committee—that one day the Government will do something about the situation. For the consumer, one day is not soon enough. I do not wish to detain the House, but I feel strongly enough to press the amendment to a Division on behalf of the consumer, because he will otherwise be excluded. He will feel deserted by us if we do not make that noise on his behalf tonight. I hope that the Government will respond in the other place by doing something about it sooner rather than later.
  Question put, That the amendment be made:—
  The House divided: Ayes 145, Noes 235.

  Division No. 237]

  [9 pm

  AYES

  Abse, Leo

  Brown, Hugh D. (Provan)

  Alton, David

  Brown, N. (N'c'tle-u-Tyne E)

  Archer, Rt Hon Peter

  Brown, R. (N'c'tle-u-Tyne N)

  Ashdown, Paddy

  Brown, Ron (E'burgh, Leith)

  Ashley, Rt Hon Jack

  Buchan, Norman

  Atkinson, N. (Tottenham)

  Callaghan, Jim (Heyw'd & M)

  Bagier, Gordon A. T.

  Campbell, Ian

  Banks, Tony (Newham NW)

  Campbell-Savours, Dale

  Barron, Kevin

  Canavan, Dennis

  Beckett, Mrs Margaret

  Carter-Jones, Lewis

  Bell, Stuart

  Clarke, Thomas

  Benn, Tony

  Clay, Robert

  Bennett, A. (Dent'n & Red'sh)

  Cocks, Rt Hon M. (Bristol S.)

  Bermingham, Gerald

  Cohen, Harry

  Bidwell, Sydney

  Concannon, Rt Hon J. D.

  Boothroyd, Miss Betty

  Cook, Frank (Stockton North)

  Boyes, Roland

  Corbett, Robin

  Bray, Dr Jeremy

  Cowans, Harry

  94

  Craigen, J. M.

  McWilliam, John

  Cunliffe, Lawrence

  Marek, Dr John

  Dalyell, Tam

  Marshall, David (Shettleston)

  Davies, Ronald (Caerphilly)

  Martin, Michael

  Davis, Terry (B'ham, H'ge H'l)

  Maxton, John

  Deakins, Eric

  Maynard, Miss Joan

  Dewar, Donald

  Michie, William

  Dixon, Donald

  Miller, Dr M. S. (E Kilbride)

  Dobson, Frank

  Morris, Rt Hon A. (W'shawe)

  Dubs, Alfred

  Morris, Rt Hon J. (Aberavon)

  Duffy, A. E. P.

  Nellist, David

  Dunwoody, Hon Mrs G.

  Oakes, Rt Hon Gordon

  Eastham, Ken

  O'Brien, William

  Edwards, Bob (W'h'mpt'n SE)

  O'Neill, Martin

  Ellis, Raymond

  Parry, Robert

  Evans, John (St. Helens N)

  Patchett, Terry

  Ewing, Harry

  Pavitt, Laurie

  Fatchett, Derek

  Pendry, Tom

  Field, Frank (Birkenhead)

  Penhaligon, David

  Fisher, Mark

  Pike, Peter

  Flannery, Martin

  Powell, Raymond (Ogmore)

  Foot, Rt Hon Michael

  Prescott, John

  Foster, Derek

  Randall, Stuart

  Fraser, J. (Norwood)

  Richardson, Ms Jo

  Garrett, W. E.

  Roberts, Allan (Bootle)

  George, Bruce

  Robertson, George

  Gilbert, Rt Hon Dr John

  Robinson, G. (Coventry NW)

  Godman, Dr Norman

  Robinson, P. (Belfast E)

  Golding, John

  Ross, Ernest (Dundee W)

  Gould, Bryan

  Ross, Stephen (Isle of Wight)

  Hamilton, James (M'well N)

  Sedgemore, Brian

  Hamilton, W. W. (Central Fife)

  Shore, Rt Hon Peter

  Hart, Rt Hon Dame Judith

  Short, Ms Clare (Ladywood)

  Haynes, Frank

  Skinner, Dennis

  Heffer, Eric S.

  Snape, Peter

  Hogg, N. (C'nauld & Kilsyth)

  Spearing, Nigel

  Howells, Geraint

  Steel, Rt Hon David

  Hoyle, Douglas

  Stott, Roger

  Hughes, Roy (Newport East)

  Strang, Gavin

  Hughes, Sean (Knowsley S)

  Thomas, Dr R, (Carmarthen)

  Hughes, Simon (Southwark)

  Thorne, Stan (Preston)

  John, Brynmor

  Tinn, James

  Jones, Barry (Alyn & Deeside)

  Torney, Tom

  Kennedy, Charles

  Wainwright, R.

  Kilroy-Silk, Robert

  Wardell, Gareth (Gower)

  Kirkwood, Archibald

  Wareing, Robert

  Leadbitter, Ted

  Weetch, Ken

  Leighton, Ronald

  White, James

  Lewis, Ron (Carlisle)

  Wigley, Dafydd

  Lewis, Terence (Worsley)

  Winnick, David

  Lloyd, Tony (Stretford)

  Woodall, Alec

  Lofthouse, Geoffrey

  Wrigglesworth, Ian

  McGuire, Michael

  McKay, Allen (Penistone)

  Tellers for the Ayes:

  McKelvey, William

  Mr. A. J. Beith and

  McNamara, Kevin

  Mr. Michael Meadowcroft.

  McTaggart, Robert

  NOES

  Aitken, Jonathan

  Bowden, A. (Brighton K'to'n)

  Alexander, Richard

  Bowden, Gerald (Dulwich)

  Amess, David

  Boyson, Dr Rhodes

  Ancram, Michael

  Braine, Sir Bernard

  Arnold, Tom

  Brandon-Bravo, Martin

  Ashby, David

  Bright, Graham

  Atkins, Rt Hon Sir H.

  Brinton, Tim

  Atkins, Robert (South Ribble)

  Brittan, Rt Hon Leon

  Atkinson, David (B'm'th E)

  Brooke, Hon Peter

  Baker, Rt Hon K. (Mole Vall'y)

  Brown, M. (Brigg & Cl'thpes)

  Baker, Nicholas (N Dorset)

  Bruinvels, Peter

  Baldry, Anthony

  Buchanan-Smith, Rt Hon A.

  Banks, Robert (Harrogate)

  Budgen, Nick

  Batiste, Spencer

  Bulmer, Esmond

  Bellingham, Henry

  Butcher, John

  Bendall, Vivian

  Butterfill, John

  Benyon, William

  Carlisle, John (N Luton)

  Berry, Sir Anthony

  Carlisle, Kenneth (Lincoln)

  Biggs-Davison, Sir John

  Carlisle, Rt Hon M. (W'ton S)

  Blaker, Rt Hon Sir Peter

  Carttiss, Michael

  Boscawen, Hon Robert

  Chalker, Mrs Lynda

  95

  Chapman, Sydney

  Malone, Gerald

  Churchill, W. S.

  Maples, John

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

  Marland, Paul

  Clark, Dr Michael (Rochford)

  Marlow, Antony

  Clarke, Rt Hon K. (Rushcliffe)

  Marshall, Michael (Arundel)

  Cockeram, Eric

  Mather, Carol

  Colvin, Michael

  Maude, Hon Francis

  Conway, Derek

  Maxwell-Hyslop, Robin

  Coombs, Simon

  Mayhew, Sir Patrick

  Cope, John

  Mellor, David

  Couchman, James

  Merchant, Piers

  Crouch, David

  Meyer, Sir Anthony

  Dicks, Terry

  Miller, Hal (B'grove)

  Dorrell, Stephen

  Mills, Iain (Meriden)

  Douglas-Hamilton, Lord J.

  Miscampbell, Norman

  Dover, Den

  Moate, Roger

  du Cann, Rt Hon Edward

  Molyneaux, Rt Hon James

  Dunn, Robert

  Monro, Sir Hector

  Durant, Tony

  Montgomery, Fergus

  Edwards, Rt Hon N. (P'broke)

  Moore, John

  Evennett, David

  Morris, M. (N'hampton, S)

  Eyre, Sir Reginald

  Morrison, Hon C. (Devizes)

  Fallon, Michael

  Morrison, Hon P. (Chester)

  Farr, John

  Moynihan, Hon C.

  Fookes, Miss Janet

  Newton, Tony

  Forman, Nigel

  Nicholls, Patrick

  Forsythe, Clifford (S Antrim)

  Nicholson, J.

  Fox, Marcus

  Onslow, Cranley

  Franks, Cecil

  Oppenheim, Philip

  Fraser, Peter (Angus East)

  Ottaway, Richard

  Fry, Peter

  Page, Richard (Herts SW)

  Glyn, Dr Alan

  Parris, Matthew

  Goodlad, Alastair

  Patten, Christopher (Bath)

  Gower, Sir Raymond

  Pawsey, James

  Gregory, Conal

  Peacock, Mrs Elizabeth

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

  Powell, William (Corby)

  Grist, Ian

  Powley, John

  Grylls, Michael

  Prentice, Rt Hon Reg

  Gummer, John Selwyn

  Price, Sir David

  Hamilton, Hon A. (Epsom)

  Proctor, K. Harvey

  Hanley, Jeremy

  Raffan, Keith

  Hawkins, C. (High Peak)

  Raison, Rt Hon Timothy

  Hayes, J.

  Rathbone, Tim

  Hayward, Robert

  Renton, Tim

  Henderson, Barry

  Ridley, Rt Hon Nicholas

  Heseltine, Rt Hon Michael

  Rifkind, Malcolm

  Higgins, Rt Hon Terence L.

  Rippon, Rt Hon Geoffrey

  Hirst, Michael

  Roberts, Wyn (Conwy)

  Holland, Sir Philip (Gedling)

  Roe, Mrs Marion

  Holt, Richard

  Rossi, Sir Hugh

  Howard, Michael

  Rost, Peter

  Howarth, Alan (Stratf'd-on-A)

  Rowe, Andrew

  Howell, Rt Hon D. (G'ldford)

  Rumbold, Mrs Angela

  Hunt, David (Wirral)

  Ryder, Richard

  Hurd, Rt Hon Douglas

  Sainsbury, Hon Timothy

  Jackson, Robert

  Sayeed, Jonathan

  Key, Robert

  Shaw, Sir Michael (Scarb')

  King, Rt Hon Tom

  Shelton, William (Streatham)

  Lamont, Norman

  Shepherd, Colin (Hereford)

  Lang, Ian

  Shersby, Michael

  Latham, Michael

  Silvester, Fred

  Lawler, Geoffrey

  Smith, Tim (Beaconsfield)

  Lester, Jim

  Soames, Hon Nicholas

  Lewis, Sir Kenneth (Stamf'd)

  Speed, Keith

  Lightbown, David

  Spencer, Derek

  Lloyd, Ian (Havant)

  Spicer, Michael (S Worcs)

  Lloyd, Peter, (Fareham)

  Squire, Robin

  Lord, Michael

  Stanbrook, Ivor

  Luce, Richard

  Stanley, John

  Lyell, Nicholas

  Stern, Michael

  McCrindle, Robert

  Stevens, Lewis (Nuneaton)

  Macfarlane, Neil

  Stevens, Martin (Fulham)

  MacGregor, John

  Stewart, Allan (Eastwood)

  MacKay, Andrew (Berkshire)

  Stewart, Andrew (Sherwood)

  Maclean, David John

  Stewart, Ian (N Hertf'dshire)

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

  Stokes, John

  McQuarrie, Albert

  Stradling Thomas, J.

  Madel, David

  Sumberg, David

  Major, John

  Taylor, Teddy (S'end E)

  Malins, Humfrey

  Tebbit, Rt Hon Norman

  96

  Temple-Morris, Peter

  Watts, John

  Terlezki, Stefan

  Wells, Bowen (Hertford)

  Thomas, Rt Hon Peter

  Wells, John (Maidstone)

  Thompson, Donald (Calder V)

  Wheeler, John

  Thompson, Patrick (N'ich N)

  Whitfield, John

  Thorne, Neil (Ilford S)

  Whitney, Raymond

  Thornton, Malcolm

  Wiggin, Jerry

  Thurnham, Peter

  Winterton, Mrs Ann

  Townend, John (Bridlington)

  Winterton, Nicholas

  Tracey, Richard

  Wolfson, Mark

  Twinn, Dr Ian

  Wood, Timothy

  van Straubenzee, Sir W.

  Woodcock, Michael

  Waddington, David

  Yeo, Tim

  Wakeham, Rt Hon John

  Young, Sir George (Acton)

  Waldegrave, Hon William

  Walden, George

  Tellers for the Noes:

  Waller, Gary

  Mr. Tristan Garel-Jones and

  Wardle, C. (Bexhill)

  Mr. Michael Neubert.

  Watson, John

  Question accordingly negatived.
  Mr. Deputy Speaker: It may be for the convenience of the House if I put together the remaining Government amendments.

  Clause 39

    THE LONDON REGIONAL PASSENGERS' COMMITTEE
    Amendment made: No 23, in page 34, line 34, at end insert—
    '(8A) On reaching a decision with respect to matters dealt with in any recommendation received by them or him under subsection (7) above, London Regional Transport, the Railways Board or (as the case may be) the Secretary of State shall give notice in writing of that decision to the Passengers' Committee.' —[Mrs. Chalker.]

  Clause 42

    EXEMPTION OF LONDON BUS SERVICES UNDER CONTROL OF LONDON REGIONAL TRANSPORT FROM REQUIREMENT OF ROAD SERVICE LICENCE.
    Amendments made: No. 25, in page 38, line 12, leave out 'any local authority', and insert 'the local authorities'.
    No. 27, in page 38, line 26, at end insert 'and'.
    No. 28, in page 38, line 30, leave out from 'London' to 'any' in line 33 and insert,
    'and for the purposes of that subsection the local authorities affected are the Greater London Council and' — [Mrs. Chalker.]

  Clause 46

    COMPENSATION FOR LOSS OF EMPLOYMENT ETC.
    Amendments made: No. 29, in page 42, line 41, leave out 'or'.
    No. 30, in page 42, line 43, at end insert—
    'or
    (c) any preparatory steps taken (after the making of the scheme or order in question) for the purposes of any such transfer which does not in fact take place, or taken for the purposes of any action required by a direction under section 10 of this Act which ceases to be so required before the action is taken.'. — [Mrs. Chalker.]

  Clause 48

    TRAVEL CONCESSIONS ON JOURNEYS IN AND AROUND GREATER LONDON
    Amendments made: No. 34, in page 47, line 25, at end insert 'and'.
    No. 35, in page 47, line 27, leave out from '1981' to end of line 30 and insert—
    '(9) In this section and sections (Reserve free travel scheme for London residents) (Supplementary provisions with respect to the free travel scheme) and (Requirements as to scope and uniformity of arrangements for travel concessions under section 48(1)) of this Act "travel concession" means the reduction or waiver of a fare or charge either absolutely or subject to terms, limitations or conditions. '.—[Mrs. Chalker.]

  Clause 60
    INITIAL MEMBERSHIP OF LONDON REGIONAL TRANSPORT
    Amendment made: No. 36, in page 55, line 8, leave out from beginning to 'shall' in line 9 and insert 'London Regional Transport'.—[Mrs. Chalker.]
  Schedule 1

    CONSTITUTION AND PROCEEDINGS OF LONDON REGIONAL TRANSPORT
    Amendments made: No. 37, in page 57, line 8, at beginning insert '(1)'.
    No. 38, in page 57, line 12, at end insert—
    '(2) The Secretary of State may, after consultation with the chairman of the Corporation, appoint a member of the Corporation to be deputy chairman of the Corporation.'. —[Mrs. Chalker.]

  Schedule 2

    OPERATING POWERS OF LONDON REGIONAL TRANSPORT
    Amendment made: No. 39, in page 67, line 19, after 'Transport' insert—
    'or of any subsidiary of theirs'.—[Mrs. Chalker.]

  Schedule 5

    TRANSITIONAL PROVISIONS AND SAVINGS
    Amendment made: No. 40, in page 83, line 14, leave out from 'the' to 'of in line 15 and insert
    'references in sections 39(4)(b), (Reserve free travel scheme for London Residents) (3)(e) and Supplementary provisions with respect to the free travel scheme) (8)(b)'.—[Mrs. Chalker.]

  Schedule 6

    MINOR AND CONSEQUENTIAL AMENDMENTS
    Amendments made: No. 41, in page 86, line 38, at end insert
    ; but the duty to make byelaws under that section shall apply in relation to London Regional Transport as if any railway of any such subsidiary were a railway of theirs'.
    No. 42, in page 87, line 8, at end insert—
    '(4) If London Regional Transport cease to be a railway company within the meaning of that Act, section 35 shall nevertheless continue to apply to them as if they were such a railway company, so far as relates to the making of byelaws to apply as mentoned in sub-paragraph (2) above in relation to any subsidiary of theirs which is such a railway company. '.
    No. 43, in page 88, line 10, leave out from 'for' to '(d)' in line 12 and insert
    98
    'the words inserted at the end of paragraph (c) by section 3(2) of the 1969 Act there shall be substituted the words "or.'
    No. 44, in page 88, leave out lines 42 to 44 and insert—
    '(a) the words "the London Transport Executive and" shall be omitted; and'.
    No. 45, in page 88, line 46, leave out from 'words' to 'that' in line 47.
    No. 46, in page 91, line 37, leave out from beginning to end of line 46.—[Mrs. Chalker.]

  Schedule 7

    ENACTMENTS REPEALED
    Amendments made: No. 47, in page 97, line 47, at end insert—

    '1970 c. 10

    The Income and Corporation Taxes Act 1970

    In section 272(6) the words "the London Transport Executive and".'.

    No. 98, line 42, column 3, leave out—
    'Section 31(4)(a)'.—[Mrs. Chalker.]
    9.14 pm
    Mr. Ridley: I beg to move, That the Bill be now read the Third time.
    We have reached the end of our journey. It has not been a one-person operation. There has been a driver and a conductor, and I give my warm regards to my hon. Friend the Minister of State who has carried the burden of the debate.
    This is a good Bill for London's travellers and ratepayers and for democracy. The British Rail and the London Transport systems will be examined together by the liaison committee, in which I intend to take a special interest in line with the Select Committee's recommendations. The Bill contains new powers to facilitate interchanges, to set up park-and-ride facilities and to look at transport in London as a whole. London Regional Transport will be more responsive and more innovative. It will push forward the work on travel cards, automatic ticketing and the removal of barriers. It will pay special attention to the needs of the old and the disabled.
    We have set up a new, stronger, unitary passenger committee for LRT and BR. London Regional Transport will not be run politically. It will be run for the benefit of the passengers, not of the staff. The board will consist of professional managers, not political nominees. The board will not obstruct progress to reduce overmanning. It will not be used as a political pawn for extraneous reasons.
    On 29 March I received a letter from an employee of London Transport, in which he said:
    "I am a train driver on London Transport working at Acton Town station. As you will be aware, yesterday we were all on strike in order to save jobs, stop cuts in services, etc. At least these were the reasons offered by the union and carried in the popular press. The real reason for the strike was to save the GLC and for no other reason at all.
    As for the strike being well supported, as reported in the press, this is sheer rubbish. The reason the strike was well supported was because of the threat of losing one's union card which means no job or the union would not support a member if he got into trouble with LT. The unions were fully aware that had a ballot been taken over 90 per cent. of members would have been against the strike. Indeed, in my 10 years with London Transport I have never known a strike called to cause so much resentment as this one."
    That is the truth of the way the GLC has run London Transport.

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    The Bill will provide a better run system for the ratepayer. We shall cut LRT's costs. There will be no spending on propaganda or political advertising. There will be no gimmicks, no "nuclear-free zone" or "Babies against the Bomb" for which the ratepayers must pay.
    Already we can see many economies in London Transport's plan. There could be an increase in one-person operations worth £6 million per annum, but that measure is being blocked by the GLC. There could be savings in the underground and bus engineering spheres worth £15 million per annum. London Transport has identified many other examples of cost savings. The ratepayers would have been saved a further £25 million if fares had kept pace with the cost of living. The sum of £10 million will be saved by our system of off-peak concessionary fares while guaranteeing free transport for the elderly and the disabled.
    The levy at 67 per cent. is less by a long shot than next year's 78 per cent. With the cost-cutting operations I have described, prospects for the ratepayers will be improved to a far greater extent than Opposition Members have been prepared to concede. London business ratepayers have never been consulted, although they pay two thirds of the rates. So much for the democracy of the GLC.
    London Regional Transport will be a nationalised industry and will be run efficiently by managers. It is for politicians, democratically accountable, to set the objectives and settle the annual subsidy. I believe that it is better for Parliament to do that than for the GLC to do it. Parliament is elected too.
    Two thirds of the money from the rates comes from those in the business sector, but they have never had a vote; there is no democracy for them in how much money is levied in rates. When did the GLC ever consult business ratepayers about how much it should spend on London Transport or anything else?
    All Labour Members' arguments about democracy are sheer humbug. The ratepayers' interests have been ignored. The hon. Member for Kingston upon Hull, East (Mr. Prescott) started our debates in Committee by saying that we had to strike a balance between the interests of ratepayers and fare payers. He never mentioned ratepayers again in the 103 hours of debate that followed.
    A letter from Mr. Colin Smith, published in The Spectator, said:
    "For the record, Mr. Livingstone took over by ousting Andrew McIntosh, his moderate Labour predecessor, in a palace coup 24 hours after the polls had closed in 1981. The economy of effort involved in this transfer of power is widely admired even now, but the proceedings had absolutely nothing to do with London voters having any say in who runs London."
    There is the democracy to which the GLC pays lip service. It has packed the LT board with political nominees and made one of its employees the chairman of the so-called independent consumer body. In this great and important industry, we must separate politics from management.
    On Thursday we debated the many forms of consultation. We can add to those my accountability in the House to hon. Members who wish to put their point of view. We have a Bill which offers far more democracy in the conduct of London's transport than the GLC has ever attained. This is a good Bill; it will be good for travellers, ratepayers and democracy.
    9.22 pm
    Mr. Prescott: The Secretary of State's speech reflected his attitude to the Bill. It is an anti-democratic view. The Secretary of State tried to show, by quoting from The Spectator and from letters pulled out of a bag, that he believes that the Bill is a democratic advance. We believe that it is exactly the opposite.
    We have considered various parts of the Bill in Committee and on Report and we believe that we have exposed the fallacy of the claim that the Bill is supposed to meet the needs of London's transport. The statutory obligation to meet those needs has been changed into a requirement that LRT should take due regard of the need to do so, and that is another example of the lessening of the duty to provide proper and adequate transport to meet the needs of Londoners.
    The Bill will also prevent ratepayers from taking action through the courts, as in the Bromley case, if they disagree with the Secretary of State's judgment.
    The Bill looks to privatisation of transport, financed from the public purse, to undermine the integration of London's public transport service. It centralises the provision of transport in London by direction from Whitehall, providing a bureaucracy in the name of nationalisation, with the Secretary of State becoming the dictator of the provision of services to meet London's needs—and that from a Secretary of State who, before becoming a Minister, built his reputation on doing everything possible to prove that Whitehall and its bureaucracy did not know best. Yet the first Bill that the right hon. Gentleman brings to the House as Secretary of State gives Whitehall the authority to determine how the needs of transport in London will be met. We believe that it will reduce services in the London area and reduce the facilities now available to Londoners.
    The Secretary of State's press release of 4 April is headed,
    "A watertight guarantee for pensioners concessionary fares".
    That is an example of the promises offered by the Secretary of State to Londoners. Under the present free pass service, pensioners can travel from 9.30 am for the rest of the day to any part of London on a free pass. What does the Tory concessionary pass amount to? Pensioners will no longer be able to travel between 4.30 pm and 6.30 pm. They will be able to travel from midnight to I am. That is to make up for the loss of the earlier two hours. Does any hon. Member believe that that will be an advantage to the pensioners of London? There is also the possibility of the pensioners being charged for the pass. That will be money out of the pocket of the pensioners, whether it is for a pass or for the provision of a free service. Pensioners will get considerably less than they do now, and there will be no guarantee that even that minimum service will be retained.
    When my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) brought in his Bill for disabled people, we heard from the Conservative party that that was not the right vehicle to do certain things for them. As the Minister of State is aware, the amendments that we moved in the Committee on this Bill were drawn up by the disabled themselves. We made that clear at the time, and the amendments had been discussed with the Minister of State and the Secretary of State. The reason why the Secretary of State was given an angry reception at the meeting with the disabled was nothing to do with the

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    rigging. The reason was that the disabled people were sadly disappointed and angry because the Government had led them to believe that they were sympathetic to their needs, but had voted against every one of their amendments. The disabled people had found the right Bill for the amendments, but the Government rejected them.
    The Bill has one real intention, and that intention is to cut the cost to the Treasury and, one might argue, to the non-domestic payer. The Secretary of State refers to the non-domestic payer. We are only a small step away from the non-domestic payer being given two votes. That is what could happen as we move into the Tory form of local democracy.
    The Consumers Association had thought that its minimal amendments would be accepted. However, the door was not as open as wide as had been thought. Consumers have not been given what they thought had been promised, which was a major advance in consumers' rights.
    The Government are cutting the cost to the Treasury of the transport provision at the expense of a shift of the burden to the ratepayers who, as we have shown, will be paying more. Secondly, thousands of people will be made unemployed by the Secretary of State in the name of efficiency. There will be greater redundancy in the London transport system. Thirdly, high fares and cuts in the services, as we have seen in other areas where such policies have been pursued, will hit hardest those who depend on the public services. Women in particular are dependent upon public transport. It is women who tend not to have access to a private motor car.
    The Bill will lead to the establishment of a minimum system which will meet the minimum needs of London. The Secretary of State talks about the Bill as an advance in democracy. That flies in the face of my understanding of that word. People of London will be denied the right to determine their local transport services. Everywhere else in the country transport is determined by local people, but that will not be so in London. For Londoners, there will be a debate in he House of Commons lasting one and a half hours about the level of rate support and of the services to be provided.
    The Secretary of State is replacing democracy with a quango of people appointed by himself as chairman, paid by him and subject to dismissal by him. As an alternative to democratic accountability, that is a farce. Ratepayers will pay taxation without the normal local representation that is found in the rest of the country. Moreover, the GLC is to be abolished and replaced by a central bureaucracy.
    The Bill is ideological and will undoubtedly produce a transport service that costs more, is inferior and does not meet the needs of London. Moreover, it will be paid for by those who are least able to bear the cost and by the unemployed. The burden will be put on those who are in desperate need of a proper and adequate public transport service which, when we are returned to power, we shall see returned to London.
    9.30 pm
    Mr. Maples: The emotional style of the hon. Member for Kingston upon Hull, East (Mr. Prescott) shows the emotional and irrational way in which the Opposition have examined the Bill. It is an old record that is full of long and well-held prejudices which make no attempt to understand what the Bill attempts to do.
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    I welcome the Bill for two main reasons. First, it will introduce some competition into the provision of transport services in London and, secondly, as a result, London's transport will be better managed. It will be able to act more commercially and will therefore provide a better service at lower cost. LT is essentially a commercial enterprise and it is only in the past eight to 10 years that it has received substantial subsidy. Conservative Members would like that subsidy to be reduced, but not at the expense of increasing fares. To achieve that, LT must attract more traffic by providing a service at lower cost. Those are commercial matters which involve better marketing and cost control. That is what professional managers are good at, what they are trained to do and what they must be left free to do. We must remove from LT the dead hand of political control that has been so evident. Opposition Members laugh, but the dead hand of political control has resulted too often in public enterprises being run for the benefit of the staff and the votes that politicians can attract rather than for the benefit of users and the taxpayers who subsidise them.
    We need to strike a balance between efficiency and social or public need as running LT entirely as a public service is the road to less service and higher costs. The London Transport Board has not been composed of people with a deep knowledge of how to run a complicated and large enterprise. It needs people who know about marketing, operational management, financial control and vehicle servicing. It has had people who know and care only about political considerations. That is a recipe for bad management, the result of which is that tough decisions are postponed, new ideas are discouraged and efficiency is sacrificed. We need a board with a deep knowledge and which will back a strong management and allow it to run the operation efficiently and progressively.
    The introduction of competition will go some way to remedying the monopolistic character of LT Most monopolies are bad as they become self-satisfied and maximise their own convenience rather than that of their customers. Competition stimulates such good management. Opposition Members who do not believe that should reflect on what has happened to airlines on the north Atlantic route and in the United States since deregulation..
    Mr. Prescott: What about Laker?
    Mr. Maples: Laker has done wonders for people who want to travel to the United States. He collapsed the cartel and broke the monopoly. That is why we now have much cheaper air fares.
    Mr. Prescott: And he owed hundreds of millions of pounds.
    Mr. Maples: Ask the passengers, who like it. On that route, marketing and efficiency have been stimulated, with the result that choice has been widened and costs reduced. It is a fallacy to assume that a monopoly is the right way in which to run any enterprise.
    There are areas in which no one will be able to compete with LRT and others in which no one should be able to compete with LRT but there will be many in which private operators who are licensed by LRT or the Commissioners will be able to provide a better and cheaper service. The criticism that we hear is that it involves creaming off profits. We should examine what that means. It usually means that profitable routes which people want to use and

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    for which they are prepared to pay the economic price subsidise other routes, or that the ratepayers subsidise loss-making routes. Profitable routes are usually those which people use to get to and from work and the loss-making routes are usually in the outer-London suburbs.
    Mr. Snape: That is not true either.
    Mr. Maples: What I have described is usually termed the creaming off of profits. If socially necessary services must be provided and financed from public funds, they should be so financed and money should be earmarked for that purpose. It should not be lost in a web of cross subsidies.
    We have heard much about democratic control. That is a fine sounding phrase, but it is simply a recipe for inefficiency coupled with high costs. Do Opposition Members believe that Marks and Spencer would provide a better service if its board were appointed by the Greater London council, and it had to consult 33 local authorities before it made decisions? If London Regional Transport ever provides half as good a service to the public as Marks and Spencer it will deserve to be the toast of this town.
    9.35 pm
    Mr. Cohen: The Government are driving in the wrong direction. The Bill will bring about a deterioration in public transport in London and will set the pace for such a deterioration in public transport in the rest of the country.
    On Wednesday we debated concessionary fares. The old-age pensioners forced the Government to introduce a uniform scheme, but that scheme is worse than the present scheme. It will operate only at off-peak hours. The Secretary of State will be able to alter terms, limitations and conditions, and so make it worse in future. There will be an annual charge for pensioners, and private operators, by their own service licence scheme, need not accept pensioners' passes. The scheme will deteriorate and there will be an extinction of local democratic control and accountability for public transport. All powers will be taken away from the elected Greater London council and given to the Secretary of State. He will have tight financial control, and the ability to hire, fire and control the board of London Regional Transport and the LRPC. A quango will be set up, based on the Secretary of State's patronage, consisting of business managers, ex-Tory Members of Parliament and part-timers, who will be paid huge salaries at public expense. There is even provision for chauffeur-driven cars and large expense accounts. People responsible for public transport services should travel on bus passes.
    Privatisation will cream off the best routes—the lines to Heathrow and the Victoria line — and money from those profitable routes will not be available for local lines. Even on the break-even routes, the public will become reliant on private operators, who will receive increasing handouts from the public purse. Services will be unreliable. Buses will be turned round to meet the needs of a football crowd rather than to continue on an established route. Privatisation means lower wages and worse working conditions for public transport employees.
    The Government claim the the Bill supports the integration of the buses, tube and railways, but it does precious little in that respect. With private operators and separate companies for buses and the tubes, it is a recipe
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    for disintegration. The stated aim is subsidy reduction. The Bill alters the authority's duty to meet that end instead of the needs of the travelling public.
    The Secretary of State made it clear that financial criteria come first. The programme will reduce the subsidy. It may not be reduced immediately, but it will be reduced, and with it will come a dramatic reduction in services. The frequency of services, routes, and reliability will deteriorate, and station improvements and facilities for the disabled will be curtailed. Jobs will disappear. I forecast that 1,000 jobs a year will disappear during the next five years, and those people will be added to the dole queue.
    The Bill will be remembered as heralding the death knell of the cheap fares policy, which has been not only popular but of enormous benefit to the public, to businesses and to London Transport, since more passengers mean more revenue. The policy has meant less congestion and fewer accidents. However, the Bill will mean a return to the old, vicious circle of decline with higher fares and poorer services. In addition, it is a bad Bill for ratepayers, who will have to make a higher contribution than they do now. Although businesses may gain because of a cut in the overall subsidy, they will also suffer because of higher fares and increased transport costs.
    For those reasons, the Bill is a running sore for Londoners and will have to be repealed sooner rather than later.
    9.40 pm
    Mr. Hanley: I must take this opportunity to mention what, for me, will be the abiding memory of the Bill: the unparalleled propaganda campaign by the GLC during the past three months. I have received more than 400 letters from constituents who are frightened by the posters and leaflets produced by the GLC. Our debates on the Bill have provided an opportunity to lay to rest some of those fears. Conservative Members have not had money to waste on propaganda. The poster campaign was aimed at those least able to defend themselves, especially the elderly, the disabled and the blind, but when one considers that for the first time this Bill has enshrined in statute fare concessions for those people, one realises how cynical and sad some of the publicity was.
    The campaign that affected my constituents was "Come in No. 9, your time is up." The No. 9 bus route is used by the poorest in the old borough of Mortlake, which is in my constituency. I assure the House that that route is healthy. When Hammersmith bridge was closed recently, London Transport provided a shuttle service to the south side of the bridge, and passengers could walk across it and catch a No. 9 bus on the other side. That could have been London Transport's opportunity to axe the route, but it did not do so. It had confidence in the service and in my constituents. When I asked the hon. Member for Newham, North-West (Mr. Banks) why the GLC had chosen the No. 9 route, he replied, "We had to pick some number. It was not meant to be taken literally." It was taken literally by my constituents. I wish that GLC representatives would visit my constituency and say, "We are sorry that we picked your bus route. It could have been any one." The GLC picked a bus route at random without considering the facts or the finance for the purpose of spreading fear and despondency among those who cannot defend themselves.

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    Our debates in Committee produced some useful amendments, for which I thank my right hon. Friend the Secretary of State and my hon. Friend the Minister of State. The Bill is unique in another respect: for the first time, ratepayers will know how much they must spend on public transport. In the past they have not known until after the event. There has been one percentage for one year and another for the next. This time there is an absolute limit, and we know how much the ratepayers must pay.
    I warn the people of my constituency and of London that, now that this political football has gone, they had better watch out for the next one. It will probably be roads, with the GLC suggesting that some roads will be turned into motorways. It will stop at nothing to spread fear. After tonight, London Transport will be safe, but mark my words: there will be something else.
    9.44 pm
    Mr. Ernie Roberts: We discussed the Bill in Committee for many weeks, yet the Government have conceded very few amendments.
    This is a bad Bill because it takes London Transport out of democratic control. It is a bad Bill because it imposes financial burden on ratepayers without their authority. It is a bad Bill because it disintegrates London Transport, British Rail, the underground and bus services. It is a bad Bill because it worsens the conditions for free bus pass users. It is a bad Bill because it will permit the sale of parts of London Transport to private profiteers. It is a bad Bill because it will lead to cuts in services and increased fares. It is a bad Bill because, under the slogan of efficiency, thousands of transport staff will lose their jobs. It is a bad Bill because it will hold back all the improvements that London Transport needs. It is a bad Bill because it is antidemocratic and destructive, and fares will be more expensive. That is my opinion.
    9.45 pm
    Mr. Stephen Ross: We should, I suppose, at least congratulate the Secretary of State and his able Minister of State on getting the Bill this far. I repeat my total opposition to the whole philosophy behind it. The Bill was conceived to meet a situation which all of us who believe in local democracy must abhor. As the Secretary of State clearly said in his speech, it is a total anti-Livingstone Bill.
    In Committee I asked the Secretary of State whether he had ever served in local government, and he said that he had served on a rural district council. Three or four years ago I decided that there was no point in my trying to get concessions for my constituents in this House, so I deliberately fought a county council election. The only person on the register whose name I recognised was the Conservative agent, and I thought that I would not win. However, I did and I led the county council for the next two years. There is one statistic of which I am proud. In 1980, our income from industrial premises owned by the county council was £9,000. Today it is £84,000. That is no thanks to the Government, because we received no concessions or financial assistance from them. However, it shows what can be done as a local government initiative, and the same applies to transport.
    For the Secretary of State to infer that transport will be better run by a quango that he will set up is appalling. Equally, I cannot understand how the hon. Member for
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    Richmond and Barnes (Mr. Hanley) can claim that his constituents will be better off, given that they are losing their democratic rights.
    While very little was conceded in Committee we must be thankful for small gestures. There has been the cynical concession on concessionary fares, but that had to be given to Conservative Members representing London constituencies, most of whom fought the last election on the pledge that they would not yield that. What about the rest of the country? What about my constituents and others who do not enjoy such concessions? They, too, have rights, and they, too, should be written into statute for the first time.
    It is true that there has been some widening, of the responsibilities for regional transport boards, but I shall await developments because I believe that the Secretary of State will have to eat his words in relation to cutting costs. I only hope that the other place will have more influence than this House has had. It is extraordinary that the House of Lords, which no one elected, has become the conscience of the nation.
    It is particularly tragic, at a time when London Transport is showing signs of considerable improvement, that we should be taking this step. The rights of individuals are being swept aside. They cannot even challenge decisions in the courts—like Bromley—and they can make only limited representations on services through the relevant appointed passenger committee.
    For God's sake, let us consider the experiences of other countries. Let us look at what happened in America— the greatest supporter of private enterprise. Why was America forced to nationalise its railways? Why did it bring in Amtrac? Why can we not follow the French and have good public transport services, railways and underground systems? Why do we not follow the example of the Germans and Swiss? Why must we put the bloody clock back—[HON. MEMBERS: "Oh."] I withdraw that remark. Why must we go back to the chaotic times of the 1920s and 1930s? I realised how old I am getting when I listened to Mr. Kenneth Baker on the "Start of the Week" programme this morning, when the outbreak of war in 1939 was discussed.
    I remember the chaotic competition in transport in London and elsewhere in the late 1920s and early 1930s. We do not want to go back to that. We want an efficient public transport system in London and throughout the country, and the Bill is not the way to get it. It will be a costly process and one that is not worth taking. The Secretary of State is living in cloud-cuckoo-land, as he has shown by his remarks. I reject the Bill and bitterly resent what is happening.
    9.50 pm
    Dr. Ian Twinn: I welcome the Third Reading because it is a good Bill. Throughout the 103 hours of debate and sometimes heated rhetoric — but little more than heated rhetoric from the Opposition—we have improved the Bill through various amendments. The people of London will welcome the Bill because it will take day-to-day political control of their transport from the small clique of Left-wingers in county hall.
    I am not objecting to political control of transport as such, for where there is public subsidy elected politicians must have a say. I am concerned about Left-wing Labour party members on the board putting their fingers into the day-to-day organisation of London transport. That is patently not the way to run transport in the capital city. The

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    right course is to go for increased efficiency, and that is the goal behind the Bill. We can cut the cost by using professional management. We must have cost-effective provisions in the running of London Regional Transport.
    London Transport is heavily subsidised by national taxpayers. As London Members of Parliament, we must not forget that we have a certain privileged position in London. Some of our colleagues outside look rather enviously at public transport in London and wonder why we are so cushioned. It is because we are the capital city and we have an important role to play. It is right that the national taxpayer should contribute, but it is also right that the Secretary of State should have a strong say in the running of London Transport.
    I am particularly pleased that the amendment dealing with the disabled was accepted. It is right that the advances that have been made for them should not be thrown out simply because we are having a change in the system of control of London's transport. The protection for the disabled should be institutionalised. The annual reporting should do much to highlight what is being done, as well as acting as an effective pressure for improvements. I hope that improvements will continue to be made.
    I am very pleased that the principle of consultation has been kept in balance. I have sat through the 103 hours of debate and been astonished at the rhetoric from the Opposition Benches with regard to consultation. They seem to want to fossilise transport in London by overdoing the consultation. Consultation is of use only if it is genuine, and if there is time within the year to have it.
    I am sure that if Labour Members took the opportunity to talk to their colleagues in local government—which often they appear not to do, except at County hall— they would find that their colleagues do not want too much consultation. They want to be able to give clear views to LRT and to have those views taken into account. They do not want the process of consultation to be overdone.
    I support the Bill and recommend it to hon. Members.
    9.53 pm
    Mr. Tony Banks: The Secretary of State let slip the mask of cultivated indifference that he managed to maintain through most of the Committee stage when he made clear why the Bill is before us today. It has nothing whatever to do with transport policy, with the interests of Londoners or with strategic planning in London; it has everything to do with the abolition of the GLC. When his hon. Friends supported him we could see, with all the venom flowing from their lips, what the Bill is really about. As the Tories see it, it is intended to prepare the way for the abolition of the GLC.
    In economic and social terms, the GLC's control of London Transport has been a story of social and economic success. In the economic sphere, one can point to the operating surplus of £35 million this year. Londoners overwhelmingly want control of their transport system through a democratically elected and accountable body. All the opinion polls say so and all the good sense supports that wish. Instead, London is being offered a sawn-off transport authority, an unelected quango, as my hon. Friends have rightly said, entirely under the diktat of the Secretary of State, the new commissar for London
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    Transport. One realises now what LRT stands for—leave it to Ridley transport. Londoners will have no say and the Secretary of State will tell us what will be done.
    It is clear that the Bill is part of the Government's vindictive campaign against the GLC because they do not like the present political control of county hall. This is a shabby, squalid and basically dishonest Bill.
    9.55 pm
    Mr. Snape: The House has been entertained, if that is the word, by a series of speeches from Conservative Members which have moved from the predictably squalid from the Secretary of State to the predictably snivelling from the Back Benches. The only reason for the Bill is that we have a Secretary of State riddled with political prejudice, who was determined to prove, during the debates on the Bill, that the Greater London council is unfit to run London Transport. He failed to prove that at an early stage and disappeared from the Committee to leave the bulk of the work, the detail, the nitty gritty, to the Minister of State.
    If, after five months of the Bill, I have to listen again to speeches about business practices and professional management by people such as the hon. Member for Edmonton (Dr. Twinn), a lecturer, or the hon. Member for Richmond and Barnes (Mr. Hanley), a lecturer—he should have stuck to winning baby competitions, because it has been downhill ever since for him—or a lawyer like the hon. Member for Lewisham, West (Mr. Maples), or the other whipped-in puppet, the hon. Member for Surbiton (Mr. Tracey), who in Committee moved amendments at the Secretary of State's behest——
    Mr. Terry Dicks: What about me?
    Mr. Snape: No, I am saving the intellectual wing of the Tory party for later.
    The Government have proved only one thing—the incompetence of the Secretary of State. He started off in a predictably cheap manner by talking about the leadership of the GLC and saying that the people of London voted for the present Lord McIntosh, rather than Ken Livingstone, the leader of the GLC. Mr. Livingstone was elected by his colleagues shortly after the last general election. If there is a squalid appointment to be talked about in London Transport, it is the appointment of the right hon. Gentleman. Nobody voted for him as Secretary of State for Transport. In the private opinion of some of some his colleagues, he is the worst of the pretty poor bunch that. they have had since 1979. If he wants to lecture us about democracy, he should concede for once that the only reason he is doing that job is that he is a tame, neutered torn cat who will vote for the Prime Minister's policies in Cabinet—that is his only qualification.
    The intellectual quality of the Conservative party's argument has been put forward best of all by the hon. Member for Hayes and Harlington (Mr. Dicks) and that is a suitable comment on his colleagues in the Committee.
    The Bill is squalid, to say the least. It will be the top priority of the next Labour Government to repeal it. I hope that in the short time left for the right hon. Gentleman in his office of state the damage done to the transport of the capital can be minimised.
    9.59 pm
    Mrs. Chalker: It must be said at the outset that the Government would have introduced the Bill whoever

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    controlled the Greater London council. I am grateful to my right hon. Friend the Secretary of State for his support during Committee. It is crucial that we get a better deal for travellers, and that is the prime objective of the exercise. It is also important to bring together the British Rail and London Transport Executive systems to serve Londoners. For the first time, they will be looked at together, as was recommended by the Select Committee. I am confident that consumers will shortly see a considerable improvement, with more to follow formally in consumer legislation which is on the stocks.
    I am also quite certain that a better-run system will cut the cost to ratepayers. We have a clear picture of exactly what the ratepayer will be paying for, which is quite different from the bundled-up budget of the GLC. I am also confident not only that travellers will see a steadily improving system in London but that that will be accompanied by a reduction in their rate bill.
    I commend the Bill to the House and I hope that shortly we shall see the real reason why the GLC has fought it so hard.
    Question put, That the Bill be now read the Third time:—
    The House divided: Ayes 254, Noes 168.

    Division No. 238]

    [10 pm

    AYES

    Alexander, Richard

    Churchill, W. S.

    Amess, David

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

    Ancram, Michael

    Clark, Dr Michael (Rochford)

    Arnold, Tom

    Clark, Sir W. (Croydon S)

    Ashby, David

    Clarke, Rt Hon K. (Rushcliffe)

    Aspinwall, Jack

    Cockeram, Eric

    Atkins, Rt Hon Sir H.

    Colvin, Michael

    Atkins, Robert (South Ribble)

    Conway, Derek

    Atkinson, David (B'm'th E)

    Coombs, Simon

    Baker, Rt Hon K. (Mole Vall'y)

    Cope, John

    Baker, Nicholas (N Dorset)

    Couchman, James

    Baldry, Anthony

    Crouch, David

    Banks, Robert (Harrogate)

    Dickens, Geoffrey

    Batiste, Spencer

    Dicks, Terry

    Beaumont-Dark, Anthony

    Dorrell, Stephen

    Bellingham, Henry

    Douglas-Hamilton, Lord J.

    Bendall, Vivian

    Dover, Den

    Benyon, William

    du Cann, Rt Hon Edward

    Berry, Sir Anthony

    Dunn, Robert

    Best, Keith

    Durant, Tony

    Biggs-Davison, Sir John

    Edwards, Rt Hon N. (P'broke)

    Blaker, Rt Hon Sir Peter

    Emery, Sir Peter

    Bonsor, Sir Nicholas

    Evennett, David

    Boscawen, Hon Robert

    Eyre, Sir Reginald

    Bowden, A. (Brighton K'to'n)

    Fallon, Michael

    Bowden, Gerald (Dulwich)

    Farr, John

    Boyson, Dr Rhodes

    Fookes, Miss Janet

    Braine, Sir Bernard

    Forman, Nigel

    Brandon-Bravo, Martin

    Forsyth, Michael (Stirling)

    Bright, Graham

    Forth, Eric

    Brinton, Tim

    Fox, Marcus

    Brittan, Rt Hon Leon

    Franks, Cecil

    Brooke, Hon Peter

    Fraser, Peter (Angus East)

    Brown, M. (Brigg & Cl'thpes)

    Garel-Jones, Tristan

    Browne, John

    Glyn, Dr Alan

    Bruinvels, Peter

    Goodlad, Alastair

    Buchanan-Smith, Rt Hon A.

    Gower, Sir Raymond

    Budgen, Nick

    Gregory, Conal

    Bulmer, Esmond

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

    Butcher, John

    Grist, Ian

    Butterfill, John

    Grylls, Michael

    Carlisle, John (N Luton)

    Gummer, John Selwyn

    Carlisle, Kenneth (Lincoln)

    Hanley, Jeremy

    Carlisle, Rt Hon M. (W'ton S)

    Hawkins, C. (High Peak)

    Carttiss, Michael

    Hayes, J.

    Chalker, Mrs Lynda

    Hayward, Robert

    Chapman, Sydney

    Henderson, Barry

    Chope, Christopher

    Heseltine, Rt Hon Michael

    110

    Higgins, Rt Hon Terence L.

    Raffan, Keith

    Hirst, Michael

    Raison, Rt Hon Timothy

    Hogg, Hon Douglas (Gr'th'm)

    Rathbone, Tim

    Holland, Sir Philip (Gedling)

    Renton, Tim

    Holt, Richard

    Rhodes James, Robert

    Howard, Michael

    Rhys Williams, Sir Brandon

    Howarth, Alan (Stratf'd-on-A)

    Ridley, Rt Hon Nicholas

    Howell, Rt Hon D. (G'ldford)

    Ridsdale, Sir Julian

    Hurd, Rt Hon Douglas

    Rifkind, Malcolm

    Jackson, Robert

    Rippon, Rt Hon Geoffrey

    King, Rt Hon Tom

    Roberts, Wyn (Conwy)

    Lamont, Norman

    Roe, Mrs Marion

    Lang, Ian

    Ross, Wm. (Londonderry)

    Latham, Michael

    Rossi, Sir Hugh

    Lawler, Geoffrey

    Rost, Peter

    Lester, Jim

    Rowe, Andrew

    Lewis, Sir Kenneth (Stamf'd)

    Rumbold, Mrs Angela

    Lightbown, David

    Ryder, Richard

    Lloyd, Ian (Havant)

    Sainsbury, Hon Timothy

    Lloyd, Peter, (Fareham)

    Sayeed, Jonathan

    Lord, Michael

    Shaw, Sir Michael (Scarb')

    Luce, Richard

    Shelton, William (Streatham)

    Lyell, Nicholas

    Shepherd, Colin (Hereford)

    McCrindle, Robert

    Shepherd, Richard (Aldridge)

    Macfarlane, Neil

    Shersby, Michael

    MacGregor, John

    Silvester, Fred

    MacKay, Andrew (Berkshire)

    Skeet, T. H. H.

    Maclean, David John

    Smith, Tim (Beaconsfield)

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

    Soames, Hon Nicholas

    McQuarrie, Albert

    Speed, Keith

    Madel, David

    Spencer, Derek

    Major, John

    Spicer, Michael (S Worcs)

    Malins, Humfrey

    Squire, Robin

    Malone, Gerald

    Stanbrook, Ivor

    Maples, John

    Stanley, John

    Marland, Paul

    Stern, Michael

    Marlow, Antony

    Stevens, Lewis (Nuneaton)

    Marshall, Michael (Arundel)

    Stevens, Martin (Fulham)

    Mates, Michael

    Stewart, Allan (Eastwood)

    Mather, Carol

    Stewart, Andrew (Sherwood)

    Maude, Hon Francis

    Stewart, Ian (N Hertf'dshire)

    Maxwell-Hyslop, Robin

    Stokes, John

    Mayhew, Sir Patrick

    Stradling Thomas, J.

    Mellor, David

    Sumberg, David

    Merchant, Piers

    Taylor, Teddy (S'end E)

    Meyer, Sir Anthony

    Tebbit, Rt Hon Norman

    Miller, Hal (B'grove)

    Temple-Morris, Peter

    Mills, Iain (Meriden)

    Terlezki, Stefan

    Miscampbell, Norman

    Thomas, Rt Hon Peter

    Mitchell, David (NW Hants)

    Thompson, Donald (Calder V)

    Moate, Roger

    Thompson, Patrick (N'ich N)

    Molyneaux, Rt Hon James

    Thorne, Neil (llford S)

    Monro, Sir Hector

    Thornton, Malcolm

    Montgomery, Fergus

    Thurnham, Peter

    Moore, John

    Townend, John (Bridlington)

    Morris, M. (N'hampton, S)

    Townsend, Cyril D. (B'heath)

    Morrison, Hon C. (Devizes)

    Tracey, Richard

    Morrison, Hon P. (Chester)

    Twinn, Dr Ian

    Moynihan, Hon C.

    van Straubenzee, Sir W,

    Mudd, David

    Waddington, David

    Neubert, Michael

    Wakeham, Rt Hon John

    Newton, Tony

    Waldegrave, Hon William

    Nicholls, Patrick

    Walden, George

    Nicholson, J.

    Waller, Gary

    Onslow, Cranley

    Wardle, C. (Bexhill)

    Oppenheim, Philip

    Watson, John

    Ottaway, Richard

    Watts, John

    Page, Richard (Herts SW)

    Wells, Bowen (Hertford)

    Parris, Matthew

    Wells, John (Maidstone)

    Patten, Christopher (Bath)

    Wheeler, John

    Pawsey, James

    Whitfield, John

    Peacock, Mrs Elizabeth

    Whitney, Raymond

    Percival, Rt Hon Sir Ian

    Wiggin, Jerry

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

    Winterton, Mrs Ann

    Powell, William (Corby)

    Winterton, Nicholas

    Powley, John

    Wolfson, Mark

    Prentice, Rt Hon Reg

    Wood, Timothy

    Price, Sir David

    Woodcock, Michael

    Proctor, K. Harvey

    Yeo, Tim

    111

    Young, Sir George (Acton)

    Mr. David Hunt and

    Mr. Archie Hamilton.

    Tellers for the Ayes:

    NOES

    Archer, Rt Hon Peter

    Davis, Terry (B'ham, H'ge H'l)

    Ashdown, Paddy

    Deakins, Eric

    Ashley, Rt Hon Jack

    Dewar, Donald

    Atkinson, N. (Tottenham)

    Dixon, Donald

    Bagier, Gordon A. T.

    Dormand, Jack

    Banks, Tony (Newham NW)

    Dubs, Alfred

    Barron, Kevin

    Duffy, A. E. P.

    Beckett, Mrs Margaret

    Dunwoody, Hon Mrs G.

    Beith, A. J.

    Eadie, Alex

    Bell, Stuart

    Eastham, Ken

    Benn, Tony

    Edwards, Bob (W'h'mpt'n SE)

    Bennett, A. (Dent'n & Red'sh)

    Ellis, Raymond

    Bermingham, Gerald

    Evans, John (St. Helens N)

    Bidwell, Sydney

    Ewing, Harry

    Blair, Anthony

    Fatchett, Derek

    Boothroyd, Miss Betty

    Field, Frank (Birkenhead)

    Boyes, Roland

    Fisher, Mark

    Brown, Hugh D. (Provan)

    Flannery, Martin

    Brown, N. (N'c'tle-u-Tyne E)

    Foot, Rt Hon Michael

    Brown, R. (N'c'tle-u-Tyne N)

    Foster, Derek

    Brown, Ron (E'burgh, Leith)

    Fraser, J. (Norwood)

    Buchan, Norman

    Garrett, W. E.

    Callaghan, Jim (Heyw'd & M)

    George, Bruce

    Campbell, Ian

    Gilbert, Rt Hon Dr John

    Campbell-Savours, Dale

    Godman, Dr Norman

    Canavan, Dennis

    Golding, John

    Carter-Jones, Lewis

    Gould, Bryan

    Cartwright, John

    Hamilton, W. W. (Central Fife)

    Clarke, Thomas

    Harman, Ms Harriet

    Clay, Robert

    Harrison, Rt Hon Walter

    Cocks, Rt Hon M. (Bristol S.)

    Hart, Rt Hon Dame Judith

    Cohen, Harry

    Hattersley, Rt Hon Roy

    Coleman, Donald

    Heffer, Eric S.

    Concannon, Rt Hon J. D.

    Hogg, N. (C'nauld & Kilsyth)

    Cook, Frank (Stockton North)

    Holland, Stuart (Vauxhall)

    Corbett, Robin

    Howells, Geraint

    Corbyn, Jeremy

    Hoyle, Douglas

    Craigen, J. M.

    Hughes, Robert (Aberdeen N)

    Crowther, Stan

    Hughes, Roy (Newport East)

    Cunliffe, Lawrence

    Hughes, Sean (Knowsley S)

    Dalyell, Tam

    Hughes, Simon (Southwark)

    Davies, Rt Hon Denzil (L'lli)

    John, Brynmor

    Davies, Ronald (Caerphilly)

    Jones, Barry (Alyn & Deeside)

    112

    Kennedy, Charles

    Randall, Stuart

    Kilroy-Silk, Robert

    Redmond, M.

    Kirkwood, Archibald

    Rees, Rt Hon M. (Leeds S)

    Leadbitter, Ted

    Richardson, Ms Jo

    Leighton, Ronald

    Roberts, Allan (Bootle)

    Lewis, Ron (Carlisle)

    Roberts, Ernest (Hackney N)

    Lewis, Terence (Worsley)

    Robertson, George

    Litherland, Robert

    Robinson, G. (Coventry NW)

    Lloyd, Tony (Stretford)

    Robinson, P. (Belfast E)

    Lofthouse, Geoffrey

    Ross, Ernest (Dundee W)

    McCartney, Hugh

    Ross, Stephen (Isle of Wight)

    McGuire, Michael

    Rowlands, Ted

    McKay, Allen (Penistone)

    Sedgemore, Brian

    McKelvey, William

    Sheldon, Rt Hon R.

    McNamara, Kevin

    Shore, Rt Hon Peter

    McTaggart, Robert

    Short, Ms Clare (Ladywood)

    McWilliam, John

    Skinner, Dennis

    Marek, Dr John

    Smith, C.(Isl'ton S & F'bury)

    Marshall, David (Shettleston)

    Smith, Rt Hon J. (M'kl'ds E)

    Martin, Michael

    Snape, Peter

    Maxton, John

    Soley, Clive

    Maynard, Miss Joan

    Spearing, Nigel

    Meacher, Michael

    Stott, Roger

    Meadowcroft, Michael

    Strang, Gavin

    Michie, William

    Thomas, Dafydd (Merioneth)

    Mikardo, Ian

    Thomas, Dr R. (Carmarthen)

    Miller, Dr M. S. (E Kilbride)

    Thorne, Stan (Preston)

    Mitchell, Austin (G't Grimsby)

    Tinn, James

    Morris, Rt Hon A. (W'shawe)

    Torney, Tom

    Morris, Rt Hon J. (Aberavon)

    Warden, Gareth (Gower)

    Nellist, David

    Wareing, Robert

    Oakes, Rt Hon Gordon

    Weetch, Ken

    O'Brien, William

    Welsh, Michael

    O'Neill, Martin

    White, James

    Owen, Rt Hon Dr David

    Wigley, Dafydd

    Parry, Robert

    Williams, Rt Hon A.

    Patchett, Terry

    Winnick, David

    Pavitt, Laurie

    Woodall, Alec

    Pendry, Tom

    Wrigglesworth, Ian

    Penhaligon, David

    Pike, Peter

    Tellers for the Noes:

    Powell, Raymond (Ogmore)

    Mr. James Hamilton and

    Prescott, John

    Mr. Frank Haynes.

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

  Telecommunications Bill [Money]

    (No. 2)
    Queen's Recommendation having been signified.
    Question proposed,
    That, for the purposes of any Act resulting from the Telecommunications Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenses incurred by the Secretary of State in providing a radio interference service or in defraying or contribution towards the expenses of advisory bodies.—[Mr. Sainsbury.]
    10.12 pm
    Mr. Teddy Taylor: There is a reference in the money resolution to which I should like an explanation. It refers to the Secretary of State providing a radio interference service. My right hon. Friend the Secretary of State will know that I have asked him no fewer than five questions over a fairly long period of time about the future of the radio interference service. It was provided by British Telecom on the instructions of the Home Office. It was a Home Office policing responsibility, and it did a good job. It was of assistance to the whole community, partly in chasing up the people who, by operating some of these strange radio systems, were causing interference to the televisions of other people. It was also a valuable aid to the community in checking on radio and television interference.
    If the money resolution is passed, who will provide the service, and what will happen to the employees who currently work for British Telecom in the radio interference service? I assure my right hon. Friend the Minister, on the basis of the letter I sent to him, and the questions that I have asked of him, that for approximately one and a half years there has been great uncertainty among those working for the radio interference service. They have been constantly been asking me, just as I have been asking the Minister, what the future is for employees in that excellent Department.
    I should like briefly to ask my right hon. Friend three specific questions. First, who will be the employers of those in the radio interference service if the money resolution is passed, bearing in mind that they were formerly employees of British Telecom, which did the job for the Home Office? Secondly, what will be the security of employment for those who change from one employer to another? Thirdly, what will be the conditions of employment of those who are changing again from one employer to another? I should be interested to know my right hon. Friend's views on that. Will the size, scope and responsibilities of the radio interference service be the same as they were before, bearing in mind that it did a very good job for the whole community?
    10.16 pm
    Mr. Bowen Wells: I shall not detain the House for long, but I should like my right hon. Friend the Minister to explain the meaning of the phrase
    "defraying or contributing towards the expenses of advisory bodies."
    Those words appear in the money resolution, and the House should know what advisory bodies and expenses we are talking about before it votes on that resolution.
    10.17 pm
    The Minister for Information Technology (Mr. Kenneth Baker): My hon. Friend the Member for Hertford and Stortford (Mr. Wells) asked about the advisory bodies. The money resolution is needed in view of changes made in the other place. In amendments that we shall come to later, the other place asked that two additional advisory bodies be set up: one to advise the Director General on small businesses, and one to advise the Director General on the disabled. They will be, as it were, consumer advisory bodies for those interests. A s the expenses of those bodies, and the travelling and subsistence expenses of those who serve on them have to be met, that phrase has been used in the resolution. We expect expenditure covering those two advisory bodies to be small, and certainly less than £10,000 a year.
    My hon. Friend the Member for Southend, East (Mr. Taylor) mentioned the radio interference service. I entirely agree that its work is very valuable and important, and I know that he has taken an interest in it for some time. For many years there has been a radio interference service to deal with complaints about interference in broadcast reception and other radio services. The service originated with the Post Office, when the latter had responsibility for radio regulatory matters, and there it stayed until the creation of BT in 1981, when it passed to that body. Over the years, however, it has had several masters—as my hon. Friend rightly pointed out—as responsibility for radio regulation has shifted from one Department to another, from the Post Office to the Ministry of Posts and Telecommunications, to the Home Office and now to the Department of Trade and Industry. Throughout that time the service has been funded by Parliament.
    Currently, the service's costs are split between the Home Office, which pays for the investigation of complaints in sound and television broadcasting and recoups the money from the television licence fee revenue, and the Department of Trade and Industry, under our Vote, Class IV. There has, however, never been any express statutory provision for that expenditure. The Government are therefore taking this opportunity to make such provision, and the provision makes clear the Secretary of State's authority to pay for the radio interference service.
    I was asked about the future of the service, and I should say that the service is important and will have to continue. BT has expressed a wish to cease providing the radio interference service once it becomes a private company, and hon. Members may feel that it would be appropriate for it to do so, because it will be competing, and the role of the radio interference service is to act as a watchdog or policeman.
    In the light of that, we have been considering urgently the future form of the service, and I hope to make an announcement very shortly. However, I shall, of course, take into consideration the points made about the employees' contracts and their terms and conditions of employment and see whether, for a time, BT could undertake the service under contract. That may be a way out. However, I assure the House that the service will continue.
    Mr. Teddy Taylor: When does my right hon. Friend expect a statement to be made?
    Mr. Baker: I would hope in the early summer.
    Question put and agreed to.
    Resolved,

    115
    That, for the purposes of any Act resulting from the Telecommunications Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenses incurred by the Secretary of State in providing a radio interference service or in defraying or contributing towards the expenses of advisory bodies.

    Telecommunications Bill (Allocation of Time)
    Ordered,
    That the Order of the House [21st November] be supplemented as follows:

    Lords Amendments
    1. — (1) The proceedings on Consideration of Lords Amendments shall be completed at this day's sitting.
    (2) The order in which the proceedings are taken shall be Lords Amendments 1 to 60, Lords Amendments 62 to 79, Lords Amendments 181 to 251, Lords Amendments 80 and 81, Lords Amendment 82A, Lords Amendment 82, Lords Amendment 61, Lords Amendments 83 to 180 and Lords Amendments 252 to 277 and, subject to the provisions of the Order of 21st November, each part of the proceedings shall, if not previously brought to a conclusion, be brought to a conclusion at the end of such period beginning with the commencement of the proceedings on the Motion for this Order as is of the length specified in the second column of the Table set out below.

    TABLE

    Proceedings

    Lards Amendments

    Length of period

    1 to 56

    ¾hour

    6 to 60, 62 to 79 and 181 to 251

    1½hours

    80, 81 and 82A

    2¾hours

    82, 61 and 83 to 140

    3½hours

    141 to 180 and 252 to 277

    4 hours

    (3) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings.
    (4) No dilatory Motion with respect to, or in the course of, the proceedings shall be made except by a member of the Government, and the Question on any such Motion shall be put forthwith.
    2. For the purposes of bringing any proceedings to a conclusion in accordance with paragraph 1 above—

    (a)Mr. Speaker shall first put forthwith any Question which has already been proposed from the Chair and not yet decided and, if that Question is for the amendment of a Lords Amendment, shall then put forthwith the Question on any further Amendment of the said Lords Amendment moved by a Minister of the Crown and on any Motion moved by a Minister of the Crown, That this House doth agree or disagree with the Lords in the said Lords Amendment or, as the case may be, in the said Lords Amendment as amended;

    (b)Mr. Speaker shall then designate such of the remaining Lords Amendments as appear to him to involve questions of Privilege and shall—

    (i) put forthwith the Question on any Amendment moved by a Minister of the Crown to a Lords Amendment and then put forthwith the Question on any Motion made by a Minister of the Crown, That this House doth agree or disagree with the Lords in their Amendment, or, as the case may be, in their Amendment as amended;

    (ii) put forthwith the Question on any Motion made by a Minister of the Crown, That this House doth disagree with the Lords in a Lords Amendment;

    (iii)) put forthwith with respect to each Amendment designated by Mr. Speaker which has not been disposed of the Question, That this House doth agree with the Lords in their Amendment; and

    (iv) put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Amendments;

    (c) as soon as the House has agreed or disagreed with the Lords in any of their Amendments Mr. Speaker shall put forthwith a separate Question on any other Amendment moved by a Minister of the Crown relevant to that Lords Amendment.

    Stages subsequent to first Consideration of Lords Amendments
    3. The proceedings on any further message from the Lords on the Bill shall be brought to a conclusion one hour after the commencement of the proceedings.
    4. For the purpose of bringing those proceedings to a conclusion—

    (a) Mr. Speaker shall first put forthwith any Question which has already been proposed from the Chair and not yet decided, and shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair;

    (b) Mr. Speaker shall then designate such of the remaining items in the Lords Message as appear to him to involve questions of Privilege and shall—

    (i) put forthwith the Question on any Motion made by a Minister of the Crown on any item;

    (ii) in the case of each remaining item designated by Mr. Speaker, put forthwith the Question, That this House doth agree with the Lords in their Proposal; and

    (iii) put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Proposals.

    Supplemental
    5. — (1) In this paragraph "the proceedings" means proceedings on any further Message from the Lords on the Bill, on the appointment and quorum of a Committee to draw up Reasons and the Report of such a Committee.
    (2) Mr. Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the consideration forthwith of the Message or, as the case may be, for the appointment and quorum of the Committee.
    (3) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which they are appointed.
    (4) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings.
    (5) No dilatory Motion with respect to, or in the course of, the proceedings shall be made except by a member of the Government, and the Question on any such Motion shall be put forthwith.
    (6) If the proceedings are interrupted by a Motion for the Adjournment of the House under Standing Order No. 10 (Adjournment on specific and important matter that should have urgent consideration) a period equal to the duration of the proceedings on the Motion shall be added to the period at the end of which the proceedings are to be brought to a conclusion.
    Proceedings on the above Motion shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced, pursuant to the Order of the House [21st November] —[Mr. Kenneth Baker.]

    Telecommunications Bill
    Lords amendments considered.
  Clause 3

    GENERAL DUTIES OF SECRETARY OF STATE AND DIRECTOR
    Lords amendment: No. 1, in page 3, line 2, after second "services" insert "directory information services,"
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Speaker: With this it will be convenient to take Lords amendments Nos. 9, 11, 12, 30, 31, 33 and 170.
    Mr. Butcher: All the amendments are concerned with the directory inquiry service. They have been tabled in response to the worries expressed in another place and elsewhere. The amendments will write clearly into the Bill two firm safeguards. One safeguard will ensure that the directory inquiry service will continue and the other safeguard will protect the blind and others who through disability cannot use printed directories if charges are ever introduced for the service. Those who were members of the Committee which considered the Bill late last year will remember that these two issues were discussed in Committee. At that time we took the view that the Bill as drafted and the draft licence for BT provided sufficient safeguards. However, on reflection we have decided that it is desirable to put clear safeguards in the Bill, and that is what the amendments will achieve.
    Amendment No. 1 adds directory information services to the list of services in clause 3(1)(a), which imposes a paramount duty on the Secretary of State and director to exercise their functions so as to secure the provision of the services listed in the subsection. The main way in which this duty will be fulfilled is through the inclusion of conditions in the licence to be granted to operators of telecommunications systems. Most important in this respect is the licence to be granted to BT. This will include, as does the draft licence in condition 3, a condition requiring BT to provide directory information over the telephone. Directory information services are defined in clause 4(2)(b). As a result of the inclusion of amendment No. 1, some minor drafting changes are necessary and these are achieved by amendments Nos. 9, 11 and 12.
    Amendments Nos. 30, 31, 33 and 170 provide protection in respect of charges for directory inquiries for the blind and others who through disability cannot use the alternative of printed directories. We fully understand the concern that has been expressed, and we implemented such a safeguard in condition 34 of the draft licence. However, we agree that it is desirable to have the safeguard written into the Bill, and that is what amendment No. 30 does. The broad effect of the new subsection (1A) is to ensure that before the operators of the major systems providing voice telephony to the public— which are BT, Mercury and Hull—can be designated as PTOs under clause 9, their licences must include a condition requiring them to provide without charge for

    119
    subscribers who are blind or otherwise disabled such directory information services as are appropriate to meet the needs of those subscribers.
    The new subsection (1A) clarifies the precise information service that is to be required. It must be information for the purpose of facilitating the use of a voice telephony service. This covers telephone numbers and other information such as STD codes that are essential for making telephone calls but which sometimes have to be obtained from a different source. Subsection (1B) clarifies exactly to whom subsection (1A) applies as those "blind or otherwise disabled" persons who are
    "unable to use a telephone directory".
    That includes the blind, the acutely dyslexic and others who are so physically disabled that they cannot pick up or leaf through a telephone book.
    Amendments Nos. 31. 33 and 170 are consequential. Amendments Nos. 31 and 33 are simply drafting consequentials, and amendment No. 170 adds to the list of definitions in clause 94 a reference to directory inquiry services.
    Mr. Harry Ewing: The Opposition accept the amendments as improvements to the Bill on its return from another place, and we are grateful for them. It is a pity that nowhere in the Bill is there a reference to operator services, although it is true that there is a reference to directory services.
    The definition of "blind or otherwise disabled" will be left to the Director General of OFTEL. It is possible that the definition will be drawn too tightly. For example, does blind include the partially sighted? The Minister must agree that there is a danger that some people whom both he and I would want included in the definition may be excluded.
    There is a strong case for the Government to lay down the definition for the Director General. The House should discuss the definition so that we know how widely or how tightly it will be drawn. I am sure the House agrees that an illiterate person is disabled. Such a person cannot read a telephone directory. We take for granted our ability to read and write and forget the vast numbers of people who cannot do so. I hope that the definition of "blind or otherwise disabled" will include the illiterate.
    To a certain extent, old age is a disability. A whole host of the elderly become confused. They suffer from dementia and various other afflictions. It is a growing problem as the number of elderly people increases. There is a strong case for the House debating the drawing of the definition of "blind or otherwise disabled".
    I hope that the Minister will tell us how he envisages the Director General carrying out the responsibilities laid on him under the terms of the licences issued to Hull, Mercury and BT plc. As the Minister appreciates, it is an important matter. There is no doubt on either side of the House that as soon as BT becomes BT plc and Mercury comes into operation, they will charge for certain services. BT has been trying to charge for those services during the past 18 months to two years. Only the political storm that blew up stopped it from charging for the directory inquiry and other operator services. I want to hear the Minister explain to the House how he envisages the system working.
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    I am sure the Minister will concede that there is a strong possibility of BT and Mercury charging for those services. Will the blind or otherwise disabled be charged and then given a rebate? If so, the administrative problems will be monumental. Although the Opposition welcome the Bill's improvement, we are anxious to ensure that we do not need to return to this matter frequently on discovering pitfalls.
    For those reasons, I have put those points as constructively as I can. I hope that I have helped the Parliamentary Under-Secretary of State, but it is more important that we help the blind, the other disabled and the old who become confused. I hope that we shall help also the illiterate who cannot read directories but who must use operator services to a greater degree than many hon. Members appreciate.
    10.30 pm
    Mr. David Penhaligon: Does the legislation deal satisfactorily with the position of those who can read a telephone directory, but, because of Parkinson's disease or another disease, cannot dial a number. They use the telephone exchange a great deal to call eight and 10 digit numbers.
    Mr. Ewing: The hon. Gentleman draws out another example, as I am sure every other hon. Member can. I am anxious that the definition of "blind or otherwise disabled" is drawn as widely as possible. It should not be a restrictive definition that would exclude people such as those to which the hon. Gentleman referred.
    In the past 18 months to two years British Telecom has been balancing its tariff increases to load the cost of operator services on to those who use them most. The largest percentage tariff increase has been in operator-connected telephone calls. That brings out the point made by the hon. Member for Truro (Mr. Penhaligon). The increase in charges for operator-connected calls from a private telephone or call box has been much greater than the increase for direct dialling calls from the same source. An attempt is being made to balance the tariffs and load the cost of operator-connected services on to the people who use them most.
    This is my first opportunity to ask the Parliamentary Under-Secretary of State a particular question. We must bear in mind that the local telephone directory is the only directory issued to a subscriber free of charge. A person in Cornwall wishing to dial a number in Aberdeen would first think of ringing directory inquiries. Recently, the operator has been asking whether the inquiry is coming from a private of business telephone or another source.
    I hope that the hon. Gentleman will enlighten the House with the reasons for conducting a survey into charges. There must be a survey to decide the level of charge that British Telecom plc, and subsequently Mercury, will impose to finance the cost of operator-connected services.
    I end where I began: we welcome the improvement. As constructively as possible I have put forward the difficulties ahead, which we hope can be surmounted by the widest possible definition of "blind or otherwise disabled". I hope that we shall hear an equally constructive response from the hon. Gentleman.
    Mr. Stuart Randall: Neither the amendment nor the Bill refers to operator services. The amendment refers only to directory

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    information services and does not include operator services. That is a serious omission, because handicapped people and the elderly rely on operator services and they will face serious problems.
    The amendment will provide that the Secretary of State and the Director General will be obliged to provide directory information services. Clause 4, as it will be amended by amendment No. 11, defines such services as:
    "consisting in the provision by means of a telecommunication system of directory information".
    The clause defines a telecommunication system as a system:
    "for the conveyance, through the agency of electric, magnetic, electro-magnetic, electro-chemical or electro-mechanical energy"
    and so on, but it does not refer to flesh and blood and I infer that the Government do not intend to include operator services.
    The amendment is unsuitable, because the handicapped, dyslectic and illiterate need to use operator services. The amendment has serious shortcomings.
    Most people do not have problems in using telephone directories. We can cope with the books, except when we want to ring people outside our local area. Then we have to use the operator services. We should regard directory services as a sub-set of operator services.
    As technology becomes more complex, the requirement for operator services will increase. How many Conservative Members can use all the facilities on the House's telephone system? How many can find their way through the House's hopeless directory? We have to rely on directory services.
    Mr. Richard Page: Does the hon. Gentleman accept that new technology will mean less man-intervention in our affairs and that machines will take over and give us a 24-hour a day service that will be more effective? Surely the hon. Gentleman is going down the wrong path.
    Mr. Randall: The hon. Gentleman does not understand the complexity of man-machine interfaces. There will have to be years of development of software systems to ensure that the human being can communicate effectively with the new technology.
    For the elderly and the handicapped, the problems will be even more complex. As the new technology is introduced, the problems involved in communication for the handicapped will become even more immense.
    The Bill eliminates the option of providing operators services, simply by making no reference to such services. That is one of the results of the privatisation of BT. There will be other such developments.
    We know why the Government have taken this line, and we understand why BT supports the Government. Operator services are expensive. They are bound to be expensive because they involve people, and people tend to be expensive these days. The Labour party believes that the priority is wrong. People should come before profits: it is as simple as that. We believe that we should pay for the services, to make sure that the old, the infirm and the handicapped are properly cared for.
    As my hon. Friend the Member for Falkirk, East (Mr. Ewing) rightly pointed out, BT is re-balancing its tariffs, and those who have the greatest need for such services will have to carry the cost. The cost of operator-connected calls in the forthcoming year, during the cheap rate period on
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    a private telephone, will increase by up to 30 per cent. If one uses a call box, the increase will be up to 25 per cent. Those figures must be compared with an average increase in the cost of service of only 2·7 per cent. That shows how those who need the services are being discriminated against.
    As we know, BT hopes very much to charge for directory services. It has tried to do so in the past. I believe that after privatisation one will have to pay for directory calls. Although in amendment No. 30 the Government promise to provide services for the handicapped and the blind, it is crucially important to define precisely what that means. If the Government are to charge everyone for directory services—including the blind, the handicapped and the elderly—and then provide a rebate, the costs of administration will be phenomenal. There will be pressure to provide services just for the registered blind, and all the other people, such as the dyslexic and the illiterate, will be cast aside. They will not be entitled to use the telephone services. That will be a serious disadvantage to those who should be entitled to use the services.
    Mr. Paddy Ashdown: It is remarkable that in the course of a four-hour debate we have to deal with 277 amendments. That being so, I shall be brief. However, it is worth reminding the Government that we face a multitude of amendments on a deeply flawed Bill and that we have been asked to encompass a broad area in a short space of time.
    I welcome this group of amendments, especially Nos. 1 and 30, as I know that they were pressed hard in another place by noble Lords in the alliance parties. Amendment No. 1 on directories will be welcome to Lord Lloyd of Kilgerran who pressed the Minister in another place on this matter. Although amendment No. 1 is worth supporting, it should be pointed out that it is a cosmetic measure that does not go nearly as far as we would like.
    Mr. John Golding: How many Lords who are members of the Social Democratic party have supported it?
    Mr. Ashdown: Is the hon. Gentleman referring to amendment No. 1? The alliance has supported it, as it appears to improve the Bill.
    The hon. Member for Falkirk, East (Mr. Ewing) made an important point about operator services. Emergency and directory services are secured, but they are not secured free. The Government claim that that matter is reflected in the licence agreement, but that agreement can be changed by agreement between the Director General of Oftel and the licensee, perhaps with the inclusion of the Monopolies and Mergers Commission. The free directory and emergency services can be made not free without the licence being brought back before Parliament. That is a significant weakness.
    10.45 pm
    Amendment No. 30 deals with the maintenance of a free service for the blind and the disabled. The key issue is how those groups will be defined and how the scheme will operate. The hon. Member for Falkirk, East (Mr. Ewing) mentioned the illiterate. Are they included? The Minister has said that the illiterate and the dyslexic will be included. The Minister should clarify how he defines those people and the blind. We understand that implementation of the free service will lie with the Director General of

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    Oftel. How will we provide a service for a disabled person who is married to a sighted person? The possible removal of the free service will be a withdrawal of a significant right. We need clarification about how those rights will be defined and applied.
    We can agree with this group of amendments, as they are an improvement, but that is not to say that we are satisfied that they go far enough in terms of safeguards of the definitions that the Minister has given about how they will operate and to whom they will apply.
    Mr. Golding: Can the Minister say whether the further safeguards will be spelt out in the licence? Obviously it is impossible to change the Bill now, but will he assure the House that all the points raised tonight will be taken into account and that the licence will spell out all the safeguards for which hon. Members on both sides of the House have asked?
    Mr. Butcher: With the permission of the House, Mr. Deputy Speaker, I shall reply to the debate. The hon. Member for Yeovil (Mr. Ashdown) used the word "cosmetic". The Government reject that accusation because it does not bear examination. I can only assume that the hon. Gentleman is indulging in the habit of Liberal and SDP Members of speaking widely early in the debate, knowing that they need an early night, and wishing to get in very general points on specific amendments.
    Mr. Ashdown: I hope that the Minister will not seek to answer my points by insults. I asked for definitions. I asked him in particular whether the licence could be changed to remove free directory and emergency services without that matter returning to the House. He should answer those points in a more general way, and not throw insults.
    Mr. Butcher: The hon. Gentleman should not insult the House by betraying the fact that he and other members of his party have not read the Bill. If he examines amendment No. 30 carefully, he will see that "blind or otherwise disabled" means
    "so blind or otherwise disabled as to be unable to use a telephone directory."
    This amendment relates to the blind and to directory inquiry services. The Director General can draw that definition as wide as he wishes. For example, it might be rather dangerous to say that only the registered disabled should be treated in that way, because that might impose the restrictions that the hon. Gentleman fears. We have given the Director General a form of words which allows him adequately to fulfil this service.
    Furthermore, the definitions are subject to guidance from the disablement advisory group which the Bill states should be set up. Even when we move to the licence conditions mentioned by the hon. Member for Newcastle-under-Lyme (Mr. Golding), who was right to say that the licence conditions can be amended on the advice of that advisory group and others, the provisions will allow the Director General to meet the representations that might be made in that regard. The Director General will be guided by experts in such matters.
    Mr. Ashdown: The Minister mentioned those who are too blind to use telephone directories. What about those who are too blind or disabled to use telephones?
    Mr. Butcher: As I said to the hon. Gentleman earlier, if he reads on he will find that the more general question is dealt with in the next amendment. This amendment deals specifically with the blind and those who cannot use a telephone directory. I will not hazard a guess on the Floor of the House tonight as to how one draws a distinction between those who fall into this category, the illiterate and dyslexic. However, I agree that there are those with a genuine illness who cannot read to the required standard. I cannot say tonight that only they should be included in the provisions of the Bill, because that is the sort of definition that we shall require from those who advise the Director General.
    The way in which this condition will be implemented will not be decided until or unless British Telecom concludes that it wishes to levy charges for the generality of directory inquiry services. If it does—this meets the point made by the hon. Member for Newcastle-underLyme—that licence conditions will be drafted so that BT must agree with the Director General how the subscribers covered by subsection (1A) are to be identified before it can introduce charges. I have no doubt that the Director General's special advisory group on matters affecting the disabled will play a valuable role in this respect.
    The hon. Member for Truro (Mr. Penhaligon) made a specific point about those who are unable to dial. That, too, will be taken into consideration. However, as the information technology aficionado of his party, perhaps he will know about the developments in technology which allow people with limited speech ability access to repertory dialling. This facility is becoming more prevalent, and my own Department has special information technology schemes for the disabled which allow them to take advantage of this kind of facility.
    We are saying that there will be a directory inquiry service for those who are disabled in the manner so described should there be charges for such services. Elsewhere we deal with the old and the handicapped. However, in no circumstances can this amendment be seen to have any relevance to the future decisions of BT and other operators on whether they will always continue to supervise and implement the current level of operator services. I am unable to offer any reassurance in that regard in the context of this amendment.
    Question put and agreed to.
    Lords Amendment: No. 2, in page 3, line 14, after "disabled" insert "or of pensionable age".
    Mr. Kenneth Baker: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker (Mr. Ernest Armstrong): With this we may take Lords amendments Nos. 127, 128, 130 and 133.
    Mr. Baker: This group of amendments, as with the group that we have just discussed, is designed to strengthen the protection in the Bill for particular groups. In the last group we were concerned with a special category of people—those who through disability cannot use printed telephone directories, although hon. Members also mentioned other disabilities.
    In these amendments we are concerned with all disabled persons, with the elderly—or, strictly, persons of pensionable age as defined in the amendments—and with small businesses. In another place, concern was

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    expressed that though the Bill as drafted covered these groups, and explicitly so in the case of the disabled, there was a risk that their interests could be overlooked by the director, and that therefore a special mention of these groups on the face of the Bill was desirable. We agreed with this, and these amendments are the result.
    I should like, first, to explain amendments Nos. 127, 128, 130 and 133. Amendment No. 127 is purely a paving amendment, but the effect of amendment No. 128 is to require the Director — as opposed to the permissive provision in the Bill as it stands—to set up two special advisory bodies, one for matters affecting small businesses and one for matters affecting persons who are disabled or of pensionable age. In appointing members to these bodies, the director must, by amendment No. 130, have regard to the desirability of having members who are familiar with the special requirements and circumstances of small businesses or persons who are disabled or of pensionable age, as the case may be.
    The establishment of these two bodies, whose members will be experts in their appropriate fields, will ensure not only that the director has specialist advice at his disposal but also that he is kept fully informed of the needs and requirements—and, indeed, any changes to them—of small businesses, the disabled and the elderly.
    These advisory bodies will be required to make annual reports to the director which will be published in his own annual report. In addition, amendment No. 133 gives a further strengthening by requiring the director himself to include in his own report a review of developments and activities in telecommunications in so far as they affect small businesses, the disabled and persons of pensionable age.
    Amendment No. 2 simply follows the wording in the other amendments where we refer to the disabled and elderly together. Amendment No. 2, therefore, inserts a reference to the latter in clause 3(2)(a)—an important clause—so that the Secretary of State and the director will have a positive duty to promote the interests of all consumers and so on, including in particular those who are disabled and of pensionable age. These amendments will provide substantial reassurance to those affected, and I hope that they will be welcomed.
    The House, and those who have followed the Bill, will appreciate that in several respects the Bill significantly improves the position of the disabled in relation to telecommunications. There are provisions in the general clause 3(2)(a) that the Secretary of State and the Director have to take the disabled into account, and now we have added the elderly. Then there are the two special additional advisory bodies.
    11 pm.
    In clause 83 the Secretary of State has powers to pay money to develop equipment which could, for example, ensure that electronic PABXs could continue to be operated by blind telephone operators — it is an important source of employment for blind people—and to pay money for the adjustment of other equipment to help the disabled. Those obligations are reflected in the licence conditions at lines 31 to 34.
    Mr. Tony Marlow: Everyone has a great deal of good will and sympathy towards people of pensionable age, but what is it physically about such people that merits their having special consideration in the way suggested? I hate to give a personal example, but I
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    have a grannie of 90 who has been of pensionable age for 30 years. I do not think that either now or during the past 30 years has she required any special telephone apparatus or any special consideration from the telephone authorities. Will my right hon. Friend explain why people of pensionable age are being specially treated?
    Mr. Baker: The proposal emanated from the other House, where some of the Members may be closer to pensionable age than the Members of this House. Several Members in the other place expressed the view that the elderly are often hard of hearing and have various other difficulties which do not qualify them as being disabled but none the less have a bearing on the telecommunication services provided throughout the country. So it was felt —I think correctly—that there should be an advisory body dealing specifically with their present requirements and their changing requirements. I do not see anything against that. I think it would be helpful for the Director to draw advice from a group concerned with the ailments that come upon people as they grow older.
    One of the other advisory bodies to be set up is to advise the Director on small businesses. That is very important, because he will have an independent source of advice to him about how the telecommunications regime operates in that respect. We want to see a proliferation of small competing businesses in the provision of apparatus and services, and that would again be a definite improvement. I think that the Bill has been improved by the amendments which have come from the other place.
    Mr. David Crouch: In his intervention my hon. Friend the Member for Northampton, North (Mr. Marlow) mentioned a person of 90 who is quite capable of handling ordinary telephone equipment. My right hon. Friend will, I am sure, be aware that people age differently and at different ages. It is a well-known medical problem. I am much involved in health questions, and I hope that he will be sensitive to the matter. There are some persons in the mid-60s who cannot use a dial telephone because of alzheimer's disease or something of that sort, and find a push-button set much easier to use. Will my right hon. Friend take that thought into consideration?
    Mr. Baker: I am very glad that my hon. Friend the Member for Canterbury (Mr. Crouch) has mentioned that point, because I know that his remarks will be read by the managers and chairman of BT. I think that BT is rightly proud of the range of ancillary equipment that it has designed specifically for the disabled. It is an impressive range of equipment and does not just include inductive couplers for the hard of hearing, the deaf or the very deaf; it includes a range of equipment to help people who have physical disabilities in coping with the electronic equipment. I accept the point that for many people the push-button telephone is often easier to operate than the dial telephone.
    Those are the sorts of points that will be brought to the attention of the director, should he overlook them, by the advisory body that the amendments seek to set up.
    Question put and agreed to.
    Subsequent Lords amendments agreed to.
    Lords amendment: No. 5, in page 3, line 46, after "10(3)" insert
    "or (7A) or (Power to give assistance in relation to certain proceedings)"
    Mr. Butcher: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 37 to 39, 41 to 46, 70 and 122.
    Mr. Butcher: These amendments cover related subjects in the steps which the Government will take in licensing operators to use the powers of the telecommunications code to ensure that the environment is protected. Apart from amendment No. 38, which was an Opposition amendment which the Government accepted, these amendments were introduced in the other place in recognition of the genuine concern that was expressed that there must be adequate safeguards in this area. The Government are committed to the proposition that there——
    It being three quarters of an hour after the commencement of proceedings on the motion relating to the Telecommunications Bill (Allocation of Time), MR. DEPUTY SPEAKER proceeded, pursuant to the order this day, to put forthwith the Question necessary for the disposal of the business to be concluded at that hour.
    Lords amendment No. 5 agreed to.
    Mr. Golding: On a point of order, Mr. Deputy Speaker. Would it not be for the convenience of the House, at the end of each guillotine stage, unless hon. Members have informed you, to the contrary, to put together the Questions on all the amendments, so that we can vote on them together?
    Mr. Deputy Speaker: That is what will happen. We had already disposed of the first four amendments, and only amendments Nos. 1 to 5 were to be dealt with in the first three quarters of an hour.

  Clause 4

    MEANING OF TELECOMMUNICATION SYSTEM" AND RELATED EXPRESSIONS
    Lords amendment: No. 6, in page 4, leave out lines 17 to 21 and insert—
    "(1A) For the purposes of this Act telecommunication apparatus which is situated in the United Kingdom and—

    (a) is connected to but not comprised in a telecommunication system; or

    (b) is connected to and comprised in a telecommunication system which extends beyond the United Kingdom,

    shall be regarded as a telecommunication system and any person who controls the apparatus shall be regarded as running the system."
    Mr. Butcher: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 7, 8, 10, 13 to 18, 172 and 252.
    Mr. Butcher: These are straightforward amendments, designed to clarify and expand the meaning of what constitutes a telecommunications system and commercial activities connected with telecommunications. They also remove ambiguities from the definition of telecommunications apparatus and the circumstances in which a telecommunications system and apparatus are connected from the purpose of the Bill. I hope that these amendments will help the understanding of what is an important and complex clause.
    Mr. Golding: How will these amendments assist our understanding of the clause?
    Mr. Butcher: In some cases apparatus may switch without conveying, but apparatus may still need licensing. It would be nonsense if we were not to make that clear. Amendment No. 6 expands the definition of system. Subsection (1A) (a) provides that single items of apparatus that are
    "connected to but not comprised in a telecommunication system"
    are treated as systems and are therefore licensable.
    Subsection (1A)(b) provides that apparatus that
    "is connected to and comprised in a telecommunication system that extends beyond the United Kingdom"
    is also licensable.
    Amendment No. 7 clarifies the definition of commercial activities connected with telecommunications and so covers the acquisition of apparatus for a client. As the hon. Member for Newcastle-under-Lyme (Mr. Golding) will know, this covers BT.
    With that further clarification, I commend these amendments to the House.
    Question put and agreed to.
    Subsequent Lords amendments agreed to.

  Clause 6

    EXCEPTIONS TO SECTIONS 5
    Lords amendment: No. 19, in page 6, leave out lines 25 to 28 and insert
    "in the case of which every conveyance made by it is either—
    (a) a transmission, by wireless telegraphy, from a transmitting station for general reception of sounds, visual images or such signals as are mentioned in paragraph (c) of section 4(1) above; or
    (b) a conveyance within a single set of premises of sounds, visual images or such signals which are to be or have been so transmitted."
    Mr. Butcher: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 20 and 21.
    Mr. Butcher: These two amendments are technical amendments to the exemptions from licensing in clause 6. Amendment No. 19 concerns the exemption from licensing for the broadcasting authorities. We wish to ensure that they are exempt from licensing when they are engaged in activities that are strictly broadcasting but are not exempt in respect of other activities. As drafted, the exemption is defective in that in some circumstances it appears too wide, and in others too narrow. It is too wide because it covers some activities that we do not wish to exempt—for example, where the broadcasters run links from their studios to their transmitters and from outside broadcast locations back to their studios. It is too narrow because there is a doubt whether it covers, as is desired, relay stations run by the broadcasting authorities.
    Lords amendment No. 19 deals with both these problems.
    Lords amendment No. 20, to the tailpiece to subsection (2), is a clarifying amendment. It is desired that a radio or television set should be exempt from licensing when it is connected either to a United Kingdom broadcasting station or to a foreign broadcasting station. However, this provision has been read by many to imply that connection

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    of a radio set to a foreign station was not exempt. Lords amendment No. 20 removes this implication and makes the intention clear.
    Lords amendment No. 21 simply corrects a typographical error.
    Mr. John McWilliam: Is the Minister certain that the amendment covers a relay station? It seems to me that if it were to cover a relay station, it would have to say "reception and transmission" by wireless telegraphy rather than just "transmission". By its nature, a relay station has to receive as well as to transmit.
    Mr. Butcher: Yes, Mr. Deputy Speaker.
    Question put and agreed to.
    Subsequent Lords amendments agreed to.

  Clause 7

    POWER TO LICENSE SYSTEMS
    Lords amendment: No. 22, in page 8, line 24, after "any" insert "telecommunication"
    Mr. Butcher: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker: With this we may discuss Lords amendments Nos. 23 to 27.
    Mr. Butcher: These are all technical and drafting amendments.
    Question put and agreed to.
    Subsequent Lords amendments agreed to.
    Lords amendment: No. 28, in page 9, line 26, leave out subsection (8).
    Mr. Butcher: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker: With this it will be convenient to discuss Lords amendments Nos. 85, 94, 97 and 173.
    Mr. Butcher: These amendments are designed to reduce to a single reference the provisions in the Bill which mention descriptions of the classes being framed by reference to "any circumstances whatever." They are therefore designed to improve the structure of the Bill and have no policy significance.
    Question put and agreed to.

  Clause 8

    SPECIAL PROVISIONS APPLICABLE TO CERTAIN LICENCES
    Lords amendment: No. 29, in page 10, line 16 leave out from "against" to "and" in line 20 and insert
    "particular persons or persons of any class or description (including, in particular, persons in rural areas) as respects any service provided, connection made or permission given in pursuance of such conditions as are mentioned in the foregoing paragraphs (whether in respect of the charges or other terms or conditions applied or otherwise);"
    Mr. Kenneth Baker: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker: With this we may discuss Lords amendment No. 32.
    Mr. Baker: The purpose of Lords amendment No. 29 is to strengthen further the safeguards in the Bill for people living in rural areas. As such, I hope that it will be welcomed by right hon. and hon. Members on both sides
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    of the House, even by the elderly grandmother of my hon. Friend the Member for Northampton, North (Mr. Marlow), who does not even live in a rural area.
    The Government wish to safeguard the interests of those living in rural areas. We have no doubt about the importance of telecommunications service to people in rural and remote communities. It helps them keep in touch socially with each other and with people in towns. It helps them do many of the items of business such as ordering goods and arranging services which could involve them in quite difficult travelling. That is why we have included provisions in the Bill to safeguard services to rural areas. Clause 3, for example, places a fundamental duty on the Secretary of State and the Director to ensure that telecommunications services are provided throughout the United Kingdom to meet all reasonable demands for them, including especially those in rural areas.
    11.15 pm
    This is the first time that the interests of rural areas have been recognised in telecommunications legislation. However, in another place there was pressure to strengthen the safeguards further to ensure that people in rural areas are not discriminated against solely because they live in rural areas, particularly in respect of prices. We accepted the force of those arguments and this amendment is the result.
    It may be helpful if I explain briefly how it will work. As the House knows, clause 8(1) lists the conditions that must be included in licences before an operator can be designated as a public telecommunications operator. PTOs will comprise the main operators, including BT, which. I appreciate is the main focus of attention, but also Mercury and Hull. Therefore, in effect the Bill provides that BT's licence must contain the conditions listed in clause 8(1). Clause 8(1)(d) already contains a provision preventing undue discrimination. Amendment No. 29 spells out explicity that BT's and other PTO's licences must contain a condition requiring the operator not to show undue preference to, or to exercise undue discrimination against persons of any class or description, including, in particular, persons in rural areas, in respect of any service provided or connections made.
    Amendment No. 29 goes on to say that this prohibition on undue discrimination must apply not only to charges and terms and conditions but also in other respects as well. That makes it clear that the obligation not to discriminate unduly applies not only to the provision of service but also to charges made for the service and the use of the services provided.
    "Connections made or permission given"
    makes it quite clear that the obligation applies to installation, maintenance and usage. The amendments will be to the benefit of those living in rural areas and I commend them to the House.
    Mr. Ewing: We have had debates about the need to protect services in rural areas before and the arguments have been well rehearsed. One question that we continually ask and to which, equally continually, we do not receive an answer, concerns the possible demand to be placed on local authorities as a result of clause 84. It lays down that in future where local authorities—in Scotland it would be the regional, district and island authorities —wish to have an additional telephone or telecommunications service, or wish to preserve an existing telephone or telecommunications service for the benefit of that area,

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    they will be empowered to contribute or to make good the losses sustained by the particular telephone company, whether that company is Mercury — that is a remote possibility—or whether the company is BT plc—that is a distinct possibility.
    Will the Minister give the House and the local authorities, which are particularly hard-pressed as a result of the Government's cuts in public expenditure, an absolute assurance that at no time in future will they be asked to contribute to the cost of maintaining the services in the rural areas? If what lies ahead is that the islands and district councils in the rural areas are to be asked to sustain the telephone service in their areas, the guarantees and promises that are being made by the Minister tonight are simply not worth the paper on which they are written. The Director General of Oftel, Mercury and BT plc are under an obligation to provide services where it is reasonably practical to do so. Of course, that will give a fair leeway to the companies concerned. My great fear is that clause 84 will mean that local authorities, through the ratepayers, will sustain the rural service, otherwise why is clause 84 in the Bill? This will fall not on the Government or the telephone companies, whether it be BT plc or Mercury, and we know that Mercury is interested only in the intercity trunk roads in any case. It will fall on the local authorities through the ratepayers, and the remote areas of the United Kingdom will bear heavily the cost of sustaining these services in rural areas.
    I hope that the Minister will give us a specific assurance that the local authorities in those areas will not be asked under clause 84 to contribute to the costs of the services in the rural areas.
    Mr. Charles Kennedy: The Minister has heard me speak on several occasions about rural telephone services. In the course of those exchanges he has on several occasions indicated his awareness of my constituency—not only the enjoyment that he has derived from spending holidays there, but his recognition of the difficulties that my constituency and similar parts of Britain may face as a result of the measure and his repeated desire to try to safeguard it.
    That being the case, it is interesting to note that the Government have suddenly accepted that the addition that the other place has written into the Bill is to be welcomed, having said time and again that no such addition was necessary, because the Bill, as originally drafted, safeguarded rural telephone services and needed no further amendment or elaboration. That was to be ensured because of the good will and sense of the Minister and of the regime that will exist after BT is privatised, which would safeguard rural services. It is interesting to note how the Minister and the Government now so warmly embrace the measure that was imposed upon them by the upper House. I am glad that the Minister embraces this amendment, but it leaves hon. Members who argued about rural services deeply suspicious of the motives, methods and sense of priority of the Government in the first place.
    In consideration of rural telephone services, the important point about differential charging remains. We still have to look to the Minister to confirm that BT plc will not simply enjoy a carte blanche on differential charging. It is incumbent upon the Minister to point out forcibly to the House again, I hope more persuasively than before
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    —obviously more persuasively than his opposite number in another place was able to do — that, when privatisation takes place, it will not inevitably result in the outcome that many people fear — not just hon. Members, but those concerned about the implications of the Bill—that the Mercuries or Hulls of this world will be able to buy or operate in a lucrative market, be it London, Leicester or Leeds, with no interest in the much less lucrative market of the rural areas. One recalls the threat last time the Bill was debated. Given the additional safeguard that the other place has written in, it remains a possibility that the consumers and clients in rural areas will be faced with higher servicing charges and a lower quality of service from what remains of BT plc, which will be left with the less profitable and less commercially attractive part of the network. As a result, it will have fewer profits to churn into them.
    When the Minister refers to clause 3 and rural areas, he should explain why he is also defending and embracing an amendment introduced in the other place when he has said all along that no such amendment or addition was necessary. That is the contradiction in the Government's argument. Local authorities, particularly in the Highlands and Islands, which have corresponded with me at length on this subject, have been at pains to point out that contradiction. I hope that the Minister will say why they were wrong when I raised their objections earlier, and why —even though he accepts the amendments made to the Bill—he still feels that they have nothing to fear. I hope that the Minister will respond to that point.
    However, it remains to be seen whether the safeguards will be as strong as we would wish, and whether this thoroughly rotten piece of legislation on rural telephone services will be any better as a result of the mild safeguards, which we welcome, which were written into the Bill in the other place.
    Mr. Golding: I should point out to the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) that the Minister is very good at making the best of a bad job. He always looks content, even at his darkest hour. Month in, month out, we faced that Laurel and Hardy team, and it was obvious that the Minister was Oliver—content and happy despite all adversity.
    Like, no doubt, the hon. Member for Northampton, North (Mr. Marlow), I was delighted when the Minister eulogised the virtues of legislating specifically for rural areas. I was pleased, because it meant that all the letters sent by the Post Office Engineering Union, the Union of Communication Workers and the British Telecommunications Union Committee to the women's institutes, the National Farmers Union and the parish councils had led him to accept something that his officials, at a very early stage, had told him to resist. It is one "Resist" that has changed into "Accept with charm, as though one had wanted it all the time." Yet we know that the Minister fought hard not only for months, but for years, against making a special case for the rural areas. Now he has had to succumb.
    I warn the hon. Member for Ross, Cromarty and Skye, who is already a little suspicious of the Minister, not to be taken in by the Minister's smile or by his confident look and confiding manner. Incidentally, if the hon. Member for Croydon, South (Sir W. Clark) wishes to lounge, he may find the Embankment more to his taste. Despite the Minister's confiding manner, he has not told us what he

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    is going to put in the licence. The way in which the legislation works will not depend on last-minute acceptance of amendments. What happens in the rural areas will depend on whether substantial changes are made to the licence as a result of amendments made to the legislation.
    The Minister should be telling us not that he has been converted on the road to Damascus, but how he has changed the licence since the amendment was accepted in the other place. How will he ensure in the licence that maintenance and tariffs in the rural areas will be similar to those in the towns? Will telecommunications as well as telephone services in general be provided in rural areas? Having studied the licence, we know that rural areas will get a basic telephone service, but there is nothing in the licence—or there was not—to ensure that rural areas will receive the full telecommunications service. The Minister should tell us how in the licence he has improved services for rural areas. If he has not, what he has told us will be of no avail. If he has changed the terms of the licence, he should come clean and tell us precisely what he has done since the Bill was amended in another place.
    11.30 pm
    Mr. Gerrard Neale: First, since my right hon. Friend has played a real part in liberalising and privatising British Telecom, its service to those in rural areas has dramatically improved over and above what it used to be. Secondly, any sensible and realistic person who lives in a rural area and who has read the Bill and my right hon. Friend's statements will draw the unavoidable conclusion that the protection that he will receive will be far greater than that which he is receiving under British Telecom's current regime.
    A person who lives in a constituency such as mine knows only too well that in a scattered area he cannot possibly expect to get exactly the same standard of services as someone who lives in the middle of a town or city. It is ridiculous when Labour Members produce synthetic enthusiasm for the provision of services in rural areas similar to those provided in towns and cities. They know that it is utterly impracticable to try to do so. The protection that my right hon. Friend wishes to insert in the Bill goes as far as it is realistically possible to go to meet the requirements of those living in rural areas. He should be congratulated on seeking to put it in the Bill.
    Mr. Ashdown: I did not intend to intervene until I heard the contributions of the hon. Members for Newcastle-under-Lyme (Mr. Golding) and for Cornwall, North (Mr. Neale). The hon. Member for Newcastle-under-Lyme and, to a certain extent, my hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy), who were both involved in the Bill's consideration in Committee, gave a warmer welcome to the terms of the amendment than some with a colder eye might wish to do. It is right and proper that the hon. Gentleman and my hon. Friend should give it that welcome because we recognise that a good deal of pressure had to be put on the Minister to get him to agree to the introduction of the amendment that he now espouses with such enthusiasm. I look forward to hearing the reasons for his change of heart.
    My right hon. and hon. Friends are happy to support the amendment because it is an improvement to the Bill, but it includes words that are dripping with conditionality. If one were rather meaner, they could be described as weasel
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    words. There are terms such as "undue preference" and "in particular". The hon. Member for Cornwall, North was right to say that the amendment declares a commitment that is not in the Bill. We need the commitment because BT is moving into private hands. When that process is completed, we shall not be able to question the Minister of the responsible Department of state on these matters. We shall not be so effective an instrument of safeguard as we have been in the past.
    Mr. Neale: Does the hon. Gentleman accept that in the past BT has not had the same level of commitment and has not discharged its commitment in areas such as mine?
    Mr. Ashdown: I recognise that that commitment has, from time to time, been lacking. But there are many examples of good Members of the House having been able to push BT locally. Many of the recent moves in BT, due to competition opening up, have brought about a beneficial aspect. That is, however, not the reason why we are going as far as we are going now.
    The Minister said that the Government wish to safeguard the needs of rural areas. That safeguard will remain inadequately expressed. Nothing that could have been done under the original Bill could not now be done under the amended Bill. The wording of the amendment drips with conditionality, such as the word "undue". That must be defended by the Director General of Oftel and his tiny staff of only 50.
    What the Government have said about increasing charges by RPI minus X per cent. will be equally applied throughout the country and will protect rural charges for the next five years. But what will happen after that? I do not envisage a significant differential rental or significant differential call and maintenance charges for rural areas within the next five years because they are protected from that, but what will happen then? The words in the amendment are so conditional and so much to be defended by the Director General, who will have more than enough to do, that I doubt whether the Bill will honour the Minister's magnificent rhetoric about the protection and safeguarding of rural services.
    We may support the amendment, but with a good deal of scepticism.
    Mr. Marlow: We have just heard rather a lot of special pleading. I found it a little disturbing and unsettling, and I expect that my hon. Friend the Member for Croydon, South (Sir W. Clark) feels much the same — [Interruption.] I am sure that he will disagree with me if he feels like doing so.
    Let us return to Animal Farm—all animals are equal, except that pigs seem to be more equal than others. Why is it that in this legislation rural areas are more equal than urban areas? I am proud to represent an urban area I have no rural constituents. If there is to be no discrimination against
    "particular persons or persons of any class or description"
    why should that include especially persons in rural areas? If there is to be no discrimination, there is to be no discrimination. That is what the legislation means. Why do we have to qualify "no discrimination"? Why should we have a special privileged class—those who live in the leafy shires who are, perhaps, better breeched than my constituents — who must be looked after better than anyone else?
    Mr. Kenneth Baker: With permission, I shall reply to some of the points that have been raised.
    The hon. Members for Newcastle-under-Lyme (Mr. Golding) and for Ross, Cromarty and Skye (Mr. Kennedy) chided me for accepting amendments from the Lords. When the Bill went down the corridor to another place, it was almost perfect. There were just one or two blemishes that needed to be brushed off and one or two hidden delights that have been burnished in another place.
    If the Lords wanted, in Shakespeare's phrase
    "To gild refined gold … To throw a perfume on the violet",
    I am not the person to object. I am fully justified in accepting these amendments because they are in the spirit of the whole thrust of the Government's legislation to ensure that services are protected in rural areas.
    I draw the attention of the House to two of the clauses in the draft licence. Clause 25 provides for a uniform charge for maintenance for five years. For connection, provided that that takes less than 100 hours, again there is a uniform charge across the country for five years. That represents considerable protection.
    One must appreciate that the first clause of the draft licence imposes a universal obligation. The hon. Member for Falkirk, East (Mr. Ewing) asked whether this measure was to pave the way to withering away that universal obligation to allow local authorities to take over BT's telecommunications services. I assure the hon. Gentleman that the measure does not do that. He must take my word for it. The Director General will be obliged to enforce that licence condition.
    Specific obligations on rural services under clause 3 are being strengthened by the amendments. The obligations lie upon not only the Director General, but the Secretary of State.
    The hon. Member for Yeovil (Mr. Ashdown) said that, because of the implementation of the Bill, the capacity of Members of Parliament to take up telecommunications matters on behalf of their constituents will be diminished. I do not agree with the hon. Gentleman. Since telecommunications ceased being dealt with as a Department and became a nationalised industry, the capacity of Members of Parliament to take up specific cases with the Secretary of State or, previously, the Minister of Posts and Telecommunications has diminished. That was the policy behind turning it into a nationalised industry. It will still be possible for an hon. Member to question the Secretary of State on whether he has discharged his responsibilities under clause 3. Hon. Members will be able to question in the same way as Ministers are presently questioned during Question Time and Adjournment debates and when hon. Members are sufficiently awkward to cause matters to be discussed on the Floor of the House.
    The Bill greatly enhances the powers of our constituents. They will be able to complain directly to the Director General of Oftel instead of the Post Office Users National Council. Oftel has the only consumers' complaints body with powers of direction. A constituent could complain directly to that body, which would not only have to examine his or her complaint, but have the power to give a direction to remedy that complaint. As far as I am aware, that power of direction does not lie with any other consumer body in the United Kingdom.
    Mr. Kennedy: I appreciate the right hon. Gentleman's point about the Director General. Is not Oftel's central
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    problem the ability to attract skilled and talented manpower within the salary structure? Will that not render Oftel a good deal less useful and less important than the right hon. Gentleman would give credit for when defending the structure he is setting up in the Bill?
    Mr. Baker: I cannot agree with the hon. Gentleman. The effectiveness of Oftel is a key to the regime the Bill is setting up. We want to ensure that Oftel's personnel are suitably qualified and capable of fulfilling the considerable obligations placed upon them. In the past, we have thought that that could be done with a staff of about 50, but time will tell. I believe that will be the initial figure.
    The Post Office Users National Council deals with many thousands of consumer complaints each year, with a staff level well below that figure. Oftel has much wider responsibilities than dealing with consumer complaints —the policing and regulation of a market which we want to become more competitive.
    Mr. Ewing: I was anxious not to interrupt the right hon. Gentleman when he was explaining the point to the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy). I return to the point about clause 8 and the ability to ask local authorities to contribute to loss-making services. Is the right hon. Gentleman saying that under clause 8 there is no possibility that local authorities will be asked by British Telecom plc to contribute to a loss-making service in rural areas? We should get that statement on record because it is important.
    11.45 pm
    Mr. Baker: I am saying that there is a universal obligation imposed by the licence and it is strengthened by the provisions of clause 3(2)(a). That is the background against which any derogation below that service has to be measured.
    If BT said that it would not carry out telecommunication services in Ross, Cromarty and Skye, or any other remote part of the country, that would be in contravention of the licence and would lead to considerable pressure on the Secretary of State and the Director to ensure that the universal obligation is continued.
    I think that the hon. Member for Ross, Cromarty and Skye is more concerned about public call boxes which, collectively, lose a lot of money. The system that operates now will continue, but will be regularised by the lengthy condition 11 of the licence which spells out the procedure that must be followed if BT wishes to close a public call box. Various checks and balances are included in the procedure and knowledge of such a proposal must be spread widely throughout a community. Closure could not even be considered unless revenue from a box had fallen below a level that is to be agreed by the Director.
    If, after the procedure has been followed, the Director decides that a box should be closed, it will be open to a local authority, if it wishes, to contribute to the cost of the phone box. Before Opposition Members relish that fact too much, they should bear in mind that such a system operates at present and only seven of the 77,000 call boxes are supported by local authorities in those circumstances —at a cost of less than £3,000 a year.
    I understand the anxiety on this matter, but clause 84 allows, in extreme conditions, the possibility of a local authority deciding that a call box is so important to its

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    community that it will make a contribution to the running costs. The amendments improve the position for the rural areas.
    Mr. Marlow: There is to be no discrimination against rural areas, but can my right hon. Friend assure the House that there will also be no discrimination against urban areas?
    Mr. Baker: Yes. Under the licences granted under clause 8, public telecommunication operators must not show undue discrimination or preference. That is a comprehensive obligation to all subscribers.
    Question put and agreed to.
    Subsequent Lords amendments agreed to.

  Clause 9

    PUBLIC TELECOMMUNICATION SYSTEMS
    Lords amendment: No. 36, in page 11, line 7, at end insert—
    "(1A) An order under subsection (1) above shall not come into operation until after the end of the period of 28 days beginning with—

    (a) the day on which copies of the order, and of the licence to which section 8 above applies, are laid before each House of Parliament; or

    (b) if such copies are so laid on different days, the last of those days."

    Mr. Kenneth Baker: I beg to move, That this House doth agree with the Lords in the said amendment.
    This is an important amendment. It was introduced in another place to meet what the Government felt was a legitimate concern about the role of Parliament in respect of the major licences to be issued under the Bill, and in particular the licence for BT. We accepted the view that Parliament should not stand aside and that there should be arrangements that allowed parliamentary scrutiny of that important licence, while preserving the independence of the Director General in carrying out his regulatory functions and the flexibility of the licence modification procedures—two features which are at the heart of the regulatory regime. This amendment to clause 9 is designed to meet these two objectives.
    The effect of this amendment is to ensure that any order made by the Secretary of State under clause 9 for the purposes of designating as a PTO and operator, authorized to run his system by a licence to which clause 8 applies, must be laid before Parliament for at least 28 days before it can come into effect. This means that the privileges and powers that follow from PTO status will not be available to BT until the order takes effect at the end of this 28-day period. The amendment also provides that the order cannot come into effect until at least 28 days after the licence to which the order relates has been laid before Parliament.
    Lords amendment No. 36 agreed to.
    It being one and a half hours after the commencement of proceedings on the motion relating to the Telecommunications Bill (Allocation of Time), MR. DEPUTY SPEAKER proceeded, pursuant to the order of this day, to put forthwith the Question necessary for the disposal of the business to be concluded at that hour.

  Clause 18

    VALIDITY AND EFFECT OF ORDERS
    Lords amendment: No. 80, in page 22, line 30, leave out from "final" to second "is" in line 31 and insert "or provisional order"
    Mr. Kenneth Baker: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker: With this it will be convenient to take the following:
    Lords amendment: No. 81.
    Lords amendment: No. 82A, in page 22, line 35, at end insert—
    "(5C) Where a duty is owed by virtue of subsection (5) above to any person—

    (a) any breach of the duty which causes that person to sustain loss or damage; and

    (b) any act which, by inducing a breach of that duty or interfering with its performance causes that person to sustain loss or damage and which is done wholly or partly for the purpose of achieving that result,

    shall be actionable at the suit or instance of that person.
    (5D) In any proceedings brought against any person in pursuance of subsection (5C)(a) above, it shall be a defence for him to prove that he took all reasonable steps and exercised all due diligence to avoid contravening the order."
    and amendment (a) thereto in the name of the hon. Member for Newcastle under Lyme (Mr. Golding), at end insert—
    ' provided that no person shall be taken to have done an act wholly or partly for the purpose of causing loss or damage merely because he appreciated that such loss or damage would be a consequence of that act. A trade union shall not be liable under this section in respect of any act unless that act was authorised or endorsed by a responsible person for the purpose of causing such loss or damage. For the purposes of this section, "authorised or endorsed by a responsible person" shall have the same meaning as in section 15 of the Employment Act 1982.'
    Lords amendments Nos. 83, 84 and 117.
    Mr. Baker: This is a most important matter, and probably represents the most important change in the Bill since it went to the other House. I have asked the Solicitor-General to be present, because the amendments relate to a change in the law about industrial relations. It is a complex matter, and I am sure that the House will welcome the advice of the Solicitor-General when I invite him to reply to the debate.
    The amendments strengthen the enforcement procedures in the Bill and give greatly increased protection to those who depend upon telecommunications. The Bill as it left this House had two important defects. First, no one apart from the Director General could sue an operator for damages or apply for an injunction requiring the operator to comply with a provisional order until after the order had been confirmed. That meant that there could be a delay of well over 28 days between the Director General making a provisional order and anyone damaged by the breach of the order being able to obtain any relief.
    Second, the Bill made no provision for circumstances where the operator's failure—let us say, BT's failure— to comply with an enforcement order arose when he was doing his best to comply but the breach resulted from the deliberate action of someone else. As a result, there was no clear way of ensuring that those who were deliberately harmed would recover damages from those who actually caused the harm, and no adequate defence for operators

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    —the public telecommunications operators — who contravene their licence obligations through no fault of their own.
    These amendments correct these defects. Amendments Nos. 80 and 81 mean that clause 18(5) will specify that:
    "The obligation to comply with a final order or provisional order is a duty owed to any person who may be affected by a contravention of it".
    Therefore, as soon as a provisional order enters into force it must be obeyed. that is a significant change and represents a considerable strengthening of the powers of the Director General.
    If it is not obeyed, the customers or potential customers who are denied service or are otherwise affected by the breach of the order can go to the courts to obtain an injunction requiring compliance, or can sue for damages. This applies even where the provisional order is subsequently modified or revoked. During the period when the provisional order is in force, its provisions must be obeyed. If the operator fails to comply with a provisonal order, anyone caused loss or damage by that failure can sue.
    Lords amendment No. 82A ensures that anyone who suffers loss or damage as a result of the duty to comply with the enforcement order can sue the operator—for example, BT—who breached the duty and any person who acted deliberately to induce the breach or who interferred with the operator's duty to comply with the order. When the action is against someone who induced the breach or someone who interfered with the performance of the duty, the plaintiff will have to demonstrate that he has suffered loss or damage as a result of the breach of the duty to comply with the enforcement order and that the action was taken wholly or partly to achieve the resultant loss or damage.
    I apologise to the House for the complexity of that legal statement, but it will recognise that such provisions are vital. In the past few months we have all been subjected to a campaign by the British Telecom unions committee which has spent hundreds of thousands of its members' money to sow the idea that privatisation will lead to a loss of essential telecommunications services. The papers have been full of advertisements of heavy hands taking away public call boxes, of rural areas without telephones and wires being cut by scissors labelled "Telecommunications Bill". One advertisement has included a full-page photograph of my right hon. Friend the Secretary of State, implying that he will personally attack BT. I only hope that, when the advertisement appears, such is the wish for accuracy in promoting the campaign, that my right hon. Friend's name will be spelt correctly.
    The message has been that the Bill must include safeguards to ensure that rural areas and people who use call boxes will continue to receive services and that nobody in the privatised industry will be enable to cut off vital services. We entirely agree. The Bill has always contained safeguards and these amendments add to them. Nobody, management or worker, member of the telecommunications industry or outsider, will be able deliberately to cut off services to any telecommunication customer who is protected by a licence enforcement order without exposing himself to the risk of paying damages to the people who suffer loss or damage.
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    I appreciate that Opposition Members are worried about that. They claim that the Bill takes away from trade unions their right to strike. That is not so. Lords amendment No. 117 makes a substantial change to clause 45. The House will recall that that when the Bill left this House, clause 45, like the existing Telegraph Acts, contained the important provision that anyone engaged in the running of a public telecommunications system who intentionally prevented, delayed or interrupted the transmission or reception of a message committed a criminal offence, the maximum penalty for which was to be two years' imprisonment. That had been the law since the middle of the 19th century.
    Opposition Members claimed repeatedly and loudly that that restricted the right of telecommunication workers to strike. They were right. We have listened to their complaints and made a significant change to clause 45. Although we were convinced that telecommunications were specially important to all aspects of modern life, and although we were sure that some special protections were needed for people who depend on telecommunications, we were uneasy about the idea of criminal penalties being applicable to those who go on strike. We therefore decided that if we amended clause 18 to give people who were deliberately damaged by trade union actions the right to damage and injunctions, we could take away the criminal penalties.
    Amendment No. 117 therefore safeguards the right of unions to strike. It is wrong to say that it takes those rights away. Amendment No. 82A merely provides that if anyone, including a trade union, takes industrial action deliberately to damage anyone who depends on telecommunications, that person, whether a trade union, a firm or a private individual, exposes himself to being sued for damages.
    In another place the Lord Advocate made it clear that the sense of amendment No. 82A is that it does not limit the ability of trade unions to take generalised strike action, provided that it is wholly for the purpose of achieving an increase in pay, or an improvement in conditions, and so on. However, it ensures that if a union takes action which induces a breach of an operator's duty—in this case let us say British Telecom—to comply with an enforcement order issued by the Director General of Oftel, and if the union's action was taken partly for the purpose of achieving the result of causing loss or damage to an individual, that individual can sue the union for damages.
    12 midnight
    As I said, the Solicitor-General will reply to the debate because this is very much a matter of legal definition, but it is appropriate for me, as the Minister responsible for the policy, to set out and to defend that policy.
    The hon. Member for Newcastle-under-Lyme (Mr. Golding) has tabled an amendment which seeks to weaken the protection that we are now building into the Bill. I cannot speak to it yet because he has not moved the amendment, but I can say that I know the arguments that he is likely to adduce because there has been correspondence——
    Mr. Deputy Speaker: Order. It might help the Minister if I say that the hon. Member for Newcastle-under-Lyme (Mr. Golding) need not move the amendment. It is being taken with amendment No. 80, so

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    the Minister, or anyone who wishes to take part in the debate, can mention all the amendments that I called out when the debate began.
    Mr. Golding: On a point of order, Mr. Deputy Speaker. The Minister is right to say that he knows my arguments. I have always let him know my views, and I have always pleaded with him to do the same.
    Mr. Baker: The hon. Gentleman knows the arguments that I set out during the past 10 minutes.
    This group of amendments changes significantly the trade union law relating to telecommunications activities. It eliminates the criminality of deliberate interception, which has worried the Opposition Members and some Conservative Members, but it introduces, in the circumstances I described, a liability to damages should an enforcement order be wilfully broken as a result of trade union action.
    I strongly commend the amendments to the House. They represent a significant package which improves the enforcement arrangements in the Bill. I stress again the fact that the amendments ensure that trade unions will enjoy the right to strike, but at the same time they provide protection to individuals who depend on telecommunications and who may be damaged by the deliberate actions of telecommunications operators or their employees.
    Mr. Golding: Whenever the Minister of State has a legal brief that he does not quite understand he always tells the House that it is a complex matter. It is perhaps for that reason that the first sentence of my notes reads, "The background to this amendment is complex."
    The Minister of State told the House — I believe following the remorseless logic of my speech on Report — that the Government, after voting against this proposal at least three times, sneaked off to the other place and decided there to remove the criminality. I thank the Minister of State and the Solicitor-General for that. I have never relished a winter spent in Wormwood scrubs. However, I cannot thank the Minister for introducing a system of civil damages instead. The Government are saying to officials, such as myself, "You need not go to Wormwood scrubs, but you and your members will go instead to the debtors' prison after you have been bankrupted in the civil courts." As the Minister said, the Government have left a union open to civil actions when it is held to be its fault that the duty imposed by a licence is not fulfilled, thereby causing damage to a third party.
    As the right hon. Gentleman will know, with the help of lawyers we have been discussing this matter for several weeks. The unions do not agree that there should be any liability' for civil actions. They believe that they should be free in all respects to engage in strike action, whether it is political or directed against particular customers. However, we know that Government policy is firm on this point and that we shall not persuade them to change it. My amendment does not attempt to do so. It attempts to deal only with the rights of a trade union to take industrial action to further its legitimate industrial interests of securing higher pay, improved conditions, and so on.
    Mr. Marlow: Has not the hon. Gentleman uncharacteristically slipped up? This is not about where action interferes with the customer, but where the intention of that action is to interfere with the customer or potential customer. Is not that a great and important distinction?
    Mr. Golding: That is what the Minister and I have been discussing for several weeks, with the help of lawyers. I hope that the Solicitor-General will forgive me, but with lawyers it is a question of paying your money and they take their choice.
    Mr. Richard Shepherd: Wherein lies the equity when a union or union members, in pursuit of their own interests, may perhaps cause the bankruptcy of a private individual or company who may not sue for damages?
    Mr. Golding: The equity lies in the fact that, so far as I am concerned, all people have the right to withdraw their labour, just as the firms that the hon. Gentleman has in mind have the right to withdraw their services. That leads us into philosophical discussion, but firms are able to withdraw their services to me. For example, doctors can knock me off their panel without let or hindrance. I could go on, but we should then be discussing freedom when we ought to be discussing telecommunications.
    Mr. Marlow: Now answer the question.
    Mr. Golding: I have answered the question, although, if I were to answer it fully, it would take a long time.
    I know that I shall not persuade the Government or Conservative Back Benchers on this point. My amendment seeks only to make sure that unions have the right to strike for better pay and conditions without threat to their funds from civil actions. I believe that the Government agree that they should be able to do so. My argument is that the wording of the legislation is such that we cannot be certain that the unions will have that freedom.
    The Minister got out of answering my amendment by saying that you, Mr. Deputy Speaker, would not let him answer it. When you said that he could, the right hon. Gentleman collapsed and floundered. The Minister of State thought he could get out of answering the amendment by appealing to the Chair, but you scuppered him, Mr. Deputy Speaker. You clobbered him in what I was about to describe as an unseemly fashion, but, of course, you could not possibly do that.
    The Minister of State was hoping that the responsibility would be placed on the Solicitor-General to answer the amendment. The Minister of State came to the Dispatch Box and said, "I shall take the political responsibility", but he did not take the political responsibility of answering my amendment. He is leaving it instead to legal gobbledegook.
    I come to the nub of the argument, and here I have to say that the hon. Member for Northampton, North (Mr. Marlow), for the first time in three years, made a relevant intervention. The whole nub of the argument is about how the word "purpose" will be interpreted in the courts. 'The hon. Member was right, and that shows there is hope for everybody in the House.
    When a strike takes place, making it impossible for BT to fulfil a duty, the union is liable, if it can be proved that the act of inducement was done wholly or partly for the purpose of causing loss or damage. That is in the legislation. The difficulty is that all strikes cause loss or damage. That is inevitable. A union must assume that when loss or damage is caused to a customer, pressure will be placed on the employer. A strike does not take place to cause loss or damage to a customer. A strike takes place to persuade the employer to provide better conditions, to

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    pay more, and so on. However, when loss or damage is caused, an employer may be persuaded to pay out more readily.
    The question for the Minister is one that he has fobbed off to the Solicitor-General. What is meant by "purpose" in such cases? What is the purpose? Is it to cause loss or damage to the customer and so entitle him to sue the union, or is it to persuade BT? If it is the latter, it makes the union immune. That is the nub of the argument, as rightly seen by the hon. Member for Northampton, North.
    Our legal advisers tell us that the law can be interpreted either way. It is a toss-up. That is the advice we received from our solicitors and from counsel. They say that as the legislation is drafted, the interpretation can go either way. If we go before one judge, he may decide that we are subject to civil damages; if we go before another, he may decide that we are not. It is unsatisfactory that the Government are passing legislation that legal advisers are saying is ambiguous, unclear and uncertain. Perhaps it is forgivable if a Government do so not knowing what they are doing, but when, week in week out, we tell the Government that what they are doing is uncertain, they should clear up that uncertainty one way or the other.
    Mr. Marlow: I defer to the hon. Gentleman's expertise and experience and ask his advice. Is he not on a wild goose chase? Is not the position that, without the amendment, the Post Office Engineering Union, should it feel so inclined, would be able to prevent the operation of any other telecommunications system of any other licensee? Does not the amendment mean that if it does so it will be actionable in the courts? Without this amendment, the Bill as it is could be worthless, because the idea of increasing competition and the diversity of telecommunications services could be obstructed by the POEU.
    Mr. Golding: Wild geesing is out of season. I made it clear that my amendment would not have the consequence that the hon. Gentleman suggests. I said clearly that we do not like it, but we accept that Government policy is to make such actions actionable if they discriminate against the customer. We are not arguing about the amendment.
    My amendment is to make it clear that we can take general industrial action, in particular in support of pay and conditions claims. Counsel and solicitors have got that point, and I do not think that the Minister will argue on that. We are trying to make certain that the Government's intentions are set out clearly in statute.
    12.15 am
    I am advised that a judge could follow the case of Chandler v. the Director of Public Prosecutions, or Emerald Construction v. Lowthian, in which it is stated that a person is taken to intend the natural consequences if he or she runs the risk of such consequences. In other words, if one causes loss or damage to a customer while trying to persuade BT, one must pay the consequences. The judge can look at these cases and say that whatever the person has done, the purpose was defined in a narrow way, and any action that was taken could subject that person to damages.
    On the other hand, another judge could follow the case of Crofter, Harris Tweed v. Veitch, or Lonrho v. Shell or
    144
    Hadmor Production v. Hamilton, and that would be to the advantage of the union. Mr. Bryan Stanley, the general secretary of the POEU, has set these arguments down in a letter to the Minister. I shall quote for the record, because I am sure that the Solicitor-General has studied the letter from Mr. Stanley. These cases concern the tort of conspiracy that is frequently used in industrial relations. In Crofter, Harris Tweed v. Veitch, Viscount Simon said:
    "A question to be answered is not: 'Did the combiners appreciate, or should they be treated as appreciating, that others would suffer from their action?'; it is 'What is the real reason why the combiners did it?' or 'What is the real purpose of the combination?' The test is not what is the natural result to the Plaintiff of such combined action, or what is the resulting damage which the Defendants realise, or should realise, will follow, but what is in truth the object in the minds of the combiners when they acted as they did. It is not consequence that matters but purpose."
    In other words, did the union set out to get more pay and better conditions, or did it set out to cause loss or damage to customers? That was reaffirmed by the House of Lords in Lonrho v. Shell, when it was held that an intent to injure was essential in the tort of conspiracy. It was re-emphasised in Hadmor Productions v. Hamilton when Lord Diplock said:
    "However misguided the purpose of ACTT in threatening the blacking may have been, that purpose was not to injure Hadmor however inevitably injury to Hadmor might be one result of the blacking."
    The purpose of my amendment is to ensure that the courts follow the second rather than the first line of cases. My amendment uses the words "appreciate" and "consequence". Those words were used by Viscount Simon in the Crofter case. They were mentioned earlier and so should guide the courts in that direction.
    My amendment covers another point. The Bill at present does not specify when a trade union will be liable under clause 18(8)(b). That means that the common law concepts of vicarious liability and agency will be brought to bear in deciding whether a trade union is liable for the acts of its officials and other members.
    The purpose of my amendment is to eliminate the union's liability along the same lines as in section 15 of the Employment Act 1980. The common law concept of vicarious liability is drawn very widely and is likely to include a situation in which an official calls out members even if he or she is not authorised by the rules to do so. Under section 15 of the Employment Act, on the other hand, it is open to the executive council, president or general secretary to repudiate an action taken by anyone else who is not authorised by the rules to take such action.
    It should be noted that section 15 does not automatically apply to the Bill in the same way as section 16 on limitation of damages. Section 15 is limited to the three torts specified therein—intimidation, inducing breach of contract and conspiracy—whereas section 16 refers to any proceedings in tort.
    I am grateful to you, Mr. Deputy Speaker, for allowing me to put that on the record. This is a very important subject. It would be tragic if in the months to come it was found in the courts that what the Government intended had not come to pass. It would be tragic if it was not found that in reality, because of the threat of civil action to the funds of trade unions, the union had effectively lost the right to strike in cases where the dispute was about pay and conditions of service.

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    In my view, the Minister has acted in good faith, but he has not gone far enough in making certain that the law is clear.
    Mr. Kenneth Baker: I appreciate the arguments that the hon. Gentleman has adduced. They have been set out in two long letters to me by Mr. Brian Stanley and the chairman of the BTUC, to which I have replied at considerable length today.
    I shall let my hon. and learned Friend the Solicitor-General deal with some of the legal argumentation on the cases that were quoted, but I remind the hon. Gentleman of a question put to him my my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) to which the hon. Gentleman has not really addressed himself. My hon. Friend asked what was the equity in allowing a union total immunity when by its action it intended to cause damage that could drive a person or company into bankruptcy. What is the equity in that? The net result of the amendment would be to establish that position.
    Mr. Golding: I do not believe that the amendment is addressed to that. This is our advice. It is not an argument that I have dreamt up; it is an argument based on the advice of counsel and solicitors. The amendment is addressed to a situation in which action is taken not with the purpose of causing loss or damage to the firm involved, but to improve its employees' pay and conditions.
    There may be circumstances when, in an argument between a trade union and an employer, a third party gets hurt. That, historically, has been the case. Then the responsibility is as much on the employer as on the trade union. But in arguments between commercial organisations, third parties can be damaged. That is a risk that one takes in the free economy. My amendment is directed not to the point that the Minister and the hon. Member for Aldridge-Brownhills (Mr. Shepherd) made about what happens if the union deliberately sets out to smash a private firm, but to the situation that exists when a union sets out to negotiate better pay and conditions from the employer and the employer is adamant in his refusal to grant them.
    Mr. Richard Shepherd: I note what the hon. Gentleman says, but we are considering the provision of a monopoly service and members of the general public seeking satisfaction elsewhere, whether in transport or something else. If a monopoly service is withdrawn, it can damage ordinary members of the public and that is what is important. It is the duty of the House to try to protect the individual and the individual company against the situation which arises in monopoly industries. Will the hon. Gentleman comment on that?
    Mr. Golding: That is not the Government's position. As I understand the Government's position, if the union sets out deliberately to smash a company or to take political action, it is to be subject to action in the civil courts. The Government's position, as set out in letters, is that if the union sets out to process a normal industrial claim, it shall not be subject to action in the civil courts. I shall listen with interest to the Solicitor-General. All the Minister's statements to the union have been to the effect that the Government do not want to take away the normal right to strike or to make normal industrial action subject to action in the civil courts. The argument between us is one not of principle, but of definition. It is about writing into the Act the right words to achieve that.
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    I think that the Solicitor-General will say what the Government have said to us for weeks. He will tell us not to worry. That is what the Government said on the first occasion, and then they introduced an amendment. Then they said that there was no difference between us, but they thought that the wording of the legislation was sufficient to do what we wanted. The argument raised by the hon. Member for Aldridge-Brownhills is an entirely different one from that of the Minister. I understand the hon. Gentleman's difficulties because the Government have decided to keep a virtual monopoly in telecommunications when previously they promised competition. Of course, there is a difficulty when there is a monopoly. That is a difficult dilemma to solve in the private sector.
    12.30 am
    It is one of the problems that have arisen because the Minister has created a private monopoly. If the union could be subject to civil damages, having taken action against the employer and hurt a customer, that would mean effectively that the union could not take industrial action. It would be faced with a private monopoly employer and, as such, virtually a private monopoly employer of telecommunications skills as well. The union would be faced with a private monopoly employer against which it could not take industrial action. In those circumstances, where is the equality of bargaining? The employer would try always to resist wage claims and improvement in conditions. If the hon. Member for Aldridge-Brownhills were to get his way, the union could never take action against the employer for fear of being made bankrupt through action in the civil courts. There is a difference in position between the hon. Gentleman and the Minister.
    Mr. Marlow: As I understand it, there are two parts to the amendment. The first part states that if the employee, or group of employees, realises that what is being done could cause damage, that is not to say that it is the intention to cause damage. On this question, the House will hear from my hon. and learned Friend the Solicitor-General. The second part of the amendment says that, if damage is caused through unofficial action, that shall not be actionable in court. Does the hon. Gentleman intend to come to that point?
    Mr. Golding: That is to put it on a par with other unions, and that is reasonable. However, it is unreasonable to say that a union is to be subjected to civil damages for acts that it has not authorised. That makes the running of a union almost impossible. If a group of union members decide that their purpose is to bankrupt the union, they can do so, but it would be intolerable. All legislation has recognised that if one is to be able to sue a union, at least the people who have taken the decision must be those in the union authorised to do so. For that reason, the second part of the amendment is included. When the Solicitor-General speaks, he will say that in his view one set. of opinions will have greater weight than the other set of opinions. I look forward to hearing the Solicitor-General. We have paid our money to one lot, so we may as well get some free advice from the other.
    Mr. Ewing: I am glad that the Minister changed his mind about leaving the Chamber, because I wish to take him to task for his criticism of the BTUC, and the advertisements that it ran throughout the campaign against privatisation. Given his usual fairness, I thought that he

    147
    might have been a little more even-handed and taken British Telecom to task for the expenditure of hundreds of thousands of pounds of customers' money without the permission of the customers. At least BTUC spends its members' money with the full permission of its members. I am not aware of Sir George Jefferson or anyone else asking the permission of BT's customers to spend the hundreds and thousands of pounds that it has spent on its advertising campaign.
    I hope that the Solicitor-General will accept that the issue must be tested on one or two points. First, we must test whether the POEU is treated in the same way as all other trade unions under section 15 of the 1980 Act. Under the clause as amended—and we accept that the criminal aspect of taking industrial action has been removed, although the civil consequences are definitely still there — the POEU is clearly treated differently from other trade unions. As the hon. Member for Northampton, North (Mr. Marlow) said, the difference is that vicarious responsibility would lie with the POEU or any other union involved in the telecommunications industry if any union members took unofficial action. That would be so regardless of whether, for example, the president and general secretary of the POEU repudiated that unofficial action. The Solicitor-General is bound to accept that the POEU is being treated differently from all other trade unions and in that event my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) has proved our case beyond any shadow of doubt and the Minister must accept our argument.
    The issue must also be tested in relation to purpose and consequence. Although I have more than 30 years' experience of the trade union movement, I have never known a trade union or any of its members set out to damage a company beyond repair or to bankrupt it. Trade unions seek to improve the pay and conditions of their members. We all know what happens. Negotiations take place, and sometimes they break down. Sometimes the union decides to withdraw its members' labour, not in order to bankrupt the company, but to emphasise the arguments for the company being able to pay those increases, and so on. I should point out to the hon. Member for Aldridge-Brownhills (Mr. Shepherd) that both the employer and the trade union have a responsibility. One party, the union, argues that the company can afford to pay, while the other, the company, argues that it cannot afford to pay. Both seek to prove their point, but neither sets out to damage the company.
    All the cases cited by my hon. Friend the Member for Newcastle-under-Lyme show that case law is on our side. The Solicitor-General must accept that. In all the cases that my hon. Friend cited, the ruling is clear. It must be proved that it was the original intention to set out to damage the company as a result. In all these cases, some of which were considered by Viscount Salmon and Lord Diplock, it is made clear that that must be proved. In none of the cases was judgment given that it was the intention to damage the company. Therefore, damages were not awarded.
    The issue will stand or fall on the two tests to which I have referred. As my hon. Friend the Member for Newcastle-under-Lyme so rightly says, the amendment does not seek to amend what the Government have done in moving two thirds of the way to the position that we want them to adopt. We are seeking to take the
    148
    Government the remaining third of the way forward and clarify their intention by accepting the amendments which were introduced in another place.
    I hope that the Solicitor-General will base his reply on two tests. First, will employees in the telecommunications industry and members of the Post Office Engineering Union, for example, be treated in the same way under section 15 of the 1980 Act as the members of all other trade unions? The answer now is clearly and unequivocally no. The Solicitor-General has a legal obligation to correct that anomaly and the amendment gives him the opportunity to do so.
    The second test is the consequence and intent argument. If the right hon. and learned Gentleman draws on the case law on which my hon. Friend the Member for Newcastle-under-Lyme has drawn, he must come to the conclusion that the consequence and intent argument comes out strongly in favour. This will possibly be the last opportunity for a long time to correct the anomaly and I hope that the right hon. and learned Gentleman will not miss it. I trust that he will correct the anomaly once and for all so that at least the Post Office Engineering Union is treated in the same way as all other trade unions under section 15 of the 1980 Act.
    The Solicitor-General (Sir Patrick Mayhew): My right hon. Friend the Minister for Information Technology has explained the objective of the Government's group of amendment's and the amendment of the hon. Member for Newcastle-under-Lyme (Mr. Golding) must be considered in the light of that, especially when considering whether the objective is achieved. The Government's purpose is to safeguard the proper interests of those who are users of telecommunications services by protecting the security of their supply.
    A good deal has been said in the course of the Bill's passage through the House about the importance of these services to many people. Those concerned are not always the most profitable customers, but the Government agree that proper safeguards for those services should be provided.
    When the Bill left this House, as my right hon. Friend said, the means by which the interests of users were safeguarded against interruption was a criminal sanction. Clause 45 reproduced, in effect, the criminal sanction that has been in the telegraph Acts for about the past 100 years. That sanction was very unpopular. A good deal was said about it in Committee, as I know from the occasion when I was invited to explain the circumstances in which it would apply. Whether or not my appearance in Committee on that occasion had anything to do with it, the Government later considered the matter and concluded that the criminal sanction for preventing, delaying or interrupting telecommunications messages could properly be withdrawn. Clause 45 is therefore substantially amended by amendment No. 117. The criminal sanction remains only for the intentional modifications or interference with the contents of a message. There is an element there of deceit or fraud, and most people would say that that still warrants a criminal sanction.
    12.45 am
    With the criminal sanction removed from all other acts which, in breech of an order of the Director General of Oftel, either prevent, delay or interrupt the transmission of a message or induce such interference, the user of telecommunications services should not be left wholly

    149
    unprotected. With criminal liability removed, civil liability had to be substituted, otherwise there would be no sanction. A remedy had to exist in the form of an action for damages.
    The hon. Member for Newcastle-under-Lyme fairly said that although he did not like the policy, he would not be so unrealistic as to suppose that the Government would be moved from it. The House is grateful for that realism. This is where we come to the crux of the debate. It is common ground between the Opposition and the Government and between the union and my right hon. Friend, that that civil liability should not be used to the total exclusion of the immunity that protects those who have, in contemplation or furtherance of a trades dispute, sought to interfere with the performance of a commercial contract.
    That would be to go too far, and it would discriminate unnecessarily against those employed by operators of telecommunications systems. They should not be stopped from taking all industrial action — for example, in support of a pay claim. The Government do not intend that they should be, as the hon. Gentleman fairly acknowledged. Mr. Chamberlain, the secretary to the British Telecom unions committee, also fairly acknowledges that that is not the Government's intention.
    The Government intend that when an operator is under a duty to comply with an order of the Director General, and somebody either induces a breach of that duty or interferes with its performance with the purpose of achieving the result that loss or damage is sustained by the person to whom that duty is owed, the Government say that he should face the consequences. What will be those consequences? He will be liable to compensate the person who has sustained the loss or damage by reason of what was done.
    That should apply whether the act was done wholly with that purpose or only partly with that purpose, provided that that purpose was present. That is the Government's intention, and anything less would fail properly to protect the structure by which the Bill's provision enables the Director General to require that an operator's duty to telecom users, as set out in the conditions of the licence, shall be discharged. The Director General is, as it were, the policeman of the conditions of that licence.
    Mr. Ewing: Does the Solicitor-General agree that the purpose to which he referred would have to be proved as part of the civil action? Does he further agree that in none of the cases on record—he may correct me on this—was it proved that the purpose was to set out deliberately to damage the company? If there is no case law to support the Solicitor-General, why is he basing his argument so heavily on the conclusion that he appears to be drawing?
    The Solicitor-General: It is absolutely right that the burden of proof lies with the claimant. If there are few occasions on which such a burden has been discharged, there is little about which the Opposition can complain. It is important to bear in mind that the burden lies with those who claim that they have been injured and claim damages. The operator himself is already under a statutory duty once an enforcement order is made. That duty gives rise to an action for damages at the suit of anyone who sustains loss or damage through its breach. But that would be
    150
    insufficient protection if a third party can cause an operator to breach his duty to comply with the order, and the third party is not liable to damages.
    Government amendment No. 82A sets out to impose liability on the third party, and it achieves just that aim and no more. It does so by identifying a specific result which it must have been the defendant's sole or part purpose to achieve. "Result" is the key word. That result is the sustaining of loss or damage by the person to whom, under the enforcement order of the Director General, the operator owed a duty by means of inducing a breach of the operator's duty or interfering with his performance. The result places the burden on the plaintiff—the user—to show that it was with that sole or part purpose the defendant did the act complained of.
    It will not be sufficient to show that the defendant merely intended the act in the sense that he knew that such loss would be the inevitable or likely result of what he was reckoning to do—for example, when striking for more pay. That loss or damage must be shown to be the thing, or one of the things, he was setting out to do.
    I shall give the other side of the coin. It will not be a defence that the defendant's main purpose is to secure improved terms of employment, if his purpose includes a desire to bring about the breach of the order and thereby to cause loss to the customer. In that case, he will be liable. — [Interruption.] I know that this is not exhilarating stuff at 12.50 am, but it is important to the Government's case in answer to the amendment.
    "Purpose" is the key word to amendment No. 82A. I cite a dictum of Lord Diplock in Sweet v. Parsley decided in 1969. It states:
    "Purpose connotes an intention by some person to achieve a result desired by him."
    The use of the word "purpose" in the amendment therefore identifies a particular result which the defendant must have intended to achieve if he is to be liable. The result must be that a person would be deprived of the service, not an improvement of working conditions.
    I must deal with a contrary view that has been fairly expressed by the hon. Members for Falkirk, East (Mr. Ewing) and for Newcastle-under-Lyme—that the word "purpose" includes the natural and probable consequences that the person appreciates will probably flow from his act regardless of whether they are desired. My view, and that expressed by my noble and learned Friend the Lord Advocate in the other place, is that that belief does not give sufficient weight to the speech of Lord Simon in the Crofter Harris Tweed case, to which reference has been made, on the meaning of the word "purpose" when assessing the interpretation that the courts would apply to this clause. He states:
    "That word directs us—at any rate in the economic torts of which this is one—to the real reason for the act being done."
    Purpose has been consistently construed in that sense in numerous cases of economic torts, including recent cases. I have already cited Lord Diplock's dictum.
    The union's opinion effectively contends that that interpretation is not to be relied upon, because it was unnecessary to the real issue in that case and was obiter dictum. That is not the case. Before the conviction could be upheld it would be essential to determine that miss Sweet, the defendant in that case, had intended that relevant purpose.
    There is a high-water mark to the union's case, and that may be found in the Chandler case, which was decked in

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    1962. That was a criminal case, in very special circumstances under the Official Secrets Act 1911, in which the defendants denied that their subjective object was prejudicial to the state, and sought to prove it. It was held that the royal prerogative was involved and that the ultimate motive of the defendants in a criminal case was irrelevant. That case can be authority for the meaning of "purpose" only in the highly specialised context of section 1 of the Official Secrets Act. As Lord Radcliffe said in that case:
    "Lawyers must do the best they can to find what its content is in the context of this Act."
    The Government are, accordingly, confident that, in the context of the Bill, amendment No. 82A meets the objective that I have described. The first part of the amendment of the hon. Member for Newcastle-under-Lyme is unnecessary, because amendment No. 82A does not create liability for any loss or damage that was the intended but incidental result or the natural consequence of the actions taken. The second part is actively harmful and incompatible with the Government's objective, because it would confer too much protection on unions which could repudiate individual actions by union officials or members and thereby deny remedies to those who are damaged by breaches of the licence conditions induced by wildcat action.
    It is because the Government consider that the secure provision of and access to telecommunications services are so important that they believe it right to make this special provision. They thought it right to withdraw the criminal sanctions, but they also believe this proposal to be right.
    Mr. Marlow: If damage were caused and intended by unofficial action, who would find themselves in court? If that action were taken by men of straw with no assets or resources, what would be the result of the court action? Would responsibility fall on the main union?
    The Solicitor-General: The Opposition's amendment says—'A trade union shall not be liable in respect of any act unless it was authorised or endorsed by a responsible person for the purpose of causing loss or damage.' It would be easy for whoever authorises action to say that he authorised the act, but not for the purpose of causing damage to the user of a telecommunication service. It was because that would afford so ready a let-out that the Government felt that it could not be admitted and that therefore the ordinary rules should apply. The unions have a remedy in their own hands, since they can readily take steps to ensure that their members fully understand when strike action is authorised.
    I think that I have answered the two particular questions that I was asked. Of course, I do not argue that the opinion put forward on behalf of the union has no basis. It is seldom that in any matter of drafting one can say that no contrary argument can be put about its interpretation. However, if it does not seem arrogant to say so, the far better view is the one that the Lord Advocate and I have expressed. We did not pluck that view out of the air. We reached it by reference to the decided cases.
    As to whether the union is being treated in a different way, unions have been treated in a separate way under the Telegraph Acts for the past 100 years, by virtue of the criminal sanction. The Government have thought it right
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    to remove that, but the unions cannot be treated in exactly the same way, because of the importance of the telecommunication services.
    The Labour Government did not withdraw the criminal sanction when they had the opportunity. A Tory Government have done that, so let it not be said that we are manifesting some malicious intent.
    I hope that, notwithstanding the lateness of the hour and the turgid prose in which my argument has been expressed, hon. Members have been able to follow it and will acknowledge that the amendment of the hon. Member for Newcastle-under-Lyme should not be accepted.
    Question put and agreed to.
    Subsequent Lords amendment agreed to.
    Lords amendment: No. 82A, in page 22, line 35, at end insert—
    "(5C) Where a duty is owed by virtue of subsection (5) above to any person—

    (a) any breach of the duty which causes that person to sustain loss or damage; and

    (b) any act which, by inducing a breach of that duty or interfering with its performance causes that person to sustain loss or damage and which is done wholly or partly for the purpose of achieving that result,

    shall be actionable at the suit or instance of that person.
    (5D) In any proceedings brought against any person in pursuance of subsection (5C)(a) above, it shall be a defence for him to prove that he took all reasonable steps and exercised all due diligence to avoid contravening the order."
    Read a Second time.
    Amendment proposed to the Lords amendment, at end insert
    ' provided that no persons shall be taken to have done an act wholly or partly for the purpose of causing loss or damage merely because he appreciated that such loss or damage would be a consequence of that act. A trade union shall not be liable under this section in respect of any act unless that act was authorised or endorsed by a responsible person for the purpose of causing such loss or damage. For the purposes of this section, "authorised or endorsed by a responsible person" shall have the same meaning as in section 15 of the Employment Act 1982.' —[Mr. Golding.]
    Question put, That the amendment be made:—
    The House divided: Ayes 155, Noes 224.

    Division No. 239]

    [1 am

    AYES

    Alton, David

    Concannon, Rt Hon J. D.

    Archer, Rt Hon Peter

    Cook, Frank (Stockton North)

    Ashdown, Paddy

    Corbett, Robin

    Ashley, Rt Hon Jack

    Corbyn, Jeremy

    Atkinson, N. (Tottenham)

    Cowans, Harry

    Banks, Tony (Newham NW)

    Craigen, J. M.

    Barron, Kevin

    Crowther, Stan

    Beckett, Mrs Margaret

    Dalyell, Tam

    Beith, A. J.

    Davies, Rt Hon Denzil (L'lli)

    Bell, Stuart

    Davies, Ronald (Caerphilly)

    Benn, Tony

    Davis, Terry (B'ham, H'ge H'l)

    Bennett, A. (Dent'n & Red'sh)

    Deakins, Eric

    Bermingham, Gerald

    Dewar, Donald

    Blair, Anthony

    Dixon, Donald

    Boyes, Roland

    Dormand, Jack

    Brown, Hugh D. (Provan)

    Dubs, Alfred

    Brown, N. (N'c'tle-u-Tyne E)

    Duffy, A. E. P.

    Brown, R. (N'c'tle-u-Tyne N)

    Dunwoody, Hon Mrs G.

    Brown, Ron (E'burgh, Leith)

    Eastham, Ken

    Callaghan, Jim (Heyw'd & M)

    Ellis, Raymond

    Campbell, Ian

    Evans, John (St. Helens N)

    Campbell-Savours, Dale

    Ewing, Harry

    Canavan, Dennis

    Fatchett, Derek

    Carter-Jones, Lewis

    Field, Frank (Birkenhead)

    Clarke, Thomas

    Fisher, Mark

    Clay, Robert

    Flannery, Martin

    Cocks, Rt Hon M. (Bristol S.)

    Foot, Rt Hon Michael

    Coleman, Donald

    Forrester, John

    153

    Forsythe, Clifford (S Antrim)

    Nellist, David

    Foster, Derek

    Nicholson, J.

    Fraser, J. (Norwood)

    O'Brien, William

    George, Bruce

    O'Neill, Martin

    Gilbert, Rt Hon Dr John

    Parry, Robert

    Godman, Dr Norman

    Patchett, Terry

    Golding, John

    Pavitt, Laurie

    Gould, Bryan

    Pendry, Tom

    Hamilton, James (M'well N)

    Penhaligon, David

    Harman, Ms Harriet

    Pike, Peter

    Harrison, Rt Hon Walter

    Powell, Raymond (Ogmore)

    Hart, Rt Hon Dame Judith

    Prescott, John

    Haynes, Frank

    Randall, Stuart

    Heffer, Eric S.

    Redmond, M.

    Hogg, N. (C'nauld & Kilsyth)

    Rees, Rt Hon M. (Leeds S)

    Holland, Stuart (Vauxhall)

    Richardson, Ms Jo

    Hoyle, Douglas

    Roberts, Allan (Bootle)

    Hughes, Robert (Aberdeen N)

    Robertson, George

    Hughes, Roy (Newport East)

    Ross, Ernest (Dundee W)

    Hughes, Sean (Knowsley S)

    Ross, Wm. (Londonderry)

    Hughes, Simon (Southwark)

    Rowlands, Ted

    John, Brynmor

    Ryman, John

    Jones, Barry (Alyn & Deeside)

    Sedgemore, Brian

    Kennedy, Charles

    Sheldon, Rt Hon R.

    Kirkwood, Archibald

    Shore, Rt Hon Peter

    Leadbitter, Ted

    Short, Ms Clare (Ladywood)

    Leighton, Ronald

    Skinner, Dennis

    Lewis, Ron (Carlisle)

    Smith, C.(Isl'ton S & F'bury)

    Lewis, Terence (Worsley)

    Smith, Rt Hon J. (M'kl'ds E)

    Litherland, Robert

    Snape, Peter

    Lloyd, Tony (Stretford)

    Soley, Clive

    Lofthouse, Geoffrey

    Spearing, Nigel

    McCartney, Hugh

    Steel, Rt Hon David

    McDonald, Dr Oonagh

    Stott, Roger

    McGuire, Michael

    Strang, Gavin

    McKay, Allen (Penistone)

    Thomas, Dafydd (Merioneth)

    McKelvey, William

    Thomas, Dr R. (Carmarthen)

    McNamara, Kevin

    Tinn, James

    McTaggart, Robert

    Wardell, Gareth (Gower)

    Marek, Dr John

    Wareing, Robert

    Marshall, David (Shettleston)

    Welsh, Michael

    Martin, Michael

    White, James

    Maxton, John

    Wigley, Dafydd

    Maynard, Miss Joan

    Williams, Rt Hon A.

    Meacher, Michael

    Winnick, David

    Meadowcroft, Michael

    Woodall, Alec

    Michie, William

    Wrigglesworth, Ian

    Mikardo, Ian

    Miller, Dr M. S. (E Kilbride)

    Tellers for the Ayes:

    Mitchell, Austin (G't Grimsby)

    Mr. Lawrence Cunliffe and

    Morris, Rt Hon A. (W'shawe)

    Mr. John McWilliam

    Morris, Rt Hon J. (Aberavon)

    NOES

    Aitken, Jonathan

    Boyson, Dr Rhodes

    Alexander, Richard

    Brandon-Bravo, Martin

    Amess, David

    Bright, Graham

    Ancram, Michael

    Brinton, Tim

    Arnold, Tom

    Brittan, Rt Hon Leon

    Ashby, David

    Brooke, Hon Peter

    Atkins, Robert (South Ribble)

    Brown, M. (Brigg & Cl'thpes)

    Atkinson, David (B'm'th E)

    Browne, John

    Baker, Rt Hon K. (Mole Vall'y)

    Bruinvels, Peter

    Baker, Nicholas (N Dorset)

    Budgen, Nick

    Baldry, Anthony

    Bulmer, Esmond

    Banks, Robert (Harrogate)

    Butcher, John

    Batiste, Spencer

    Butterfill, John

    Beaumont-Dark, Anthony

    Carlisle, John (N Luton)

    Bellingham, Henry

    Carttiss, Michael

    Bendall, Vivian

    Chalker, Mrs Lynda

    Benyon, William

    Chapman, Sydney

    Berry, Sir Anthony

    Chope, Christopher

    Best, Keith

    Churchill, W. S.

    Biggs-Davison, Sir John

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

    Blaker, Rt Hon Sir Peter

    Clark, Dr Michael (Rochford)

    Bonsor, Sir Nicholas

    Clark, Sir W. (Croydon S)

    Boscawen, Hon Robert

    Clarke, Rt Hon K. (Rushcliffe)

    Bottomley, Peter

    Cockeram, Eric

    Bowden, A. (Brighton K'to'n)

    Colvin, Michael

    Bowden, Gerald (Dulwich)

    Conway, Derek

    154

    Coombs, Simon

    Moynihan, Hon C.

    Cope, John

    Neale, Gerrard

    Couchman, James

    Newton, Tony

    Crouch, David

    Nicholls, Patrick

    Dicks, Terry

    Norris, Steven

    Dorrell, Stephen

    Onslow, Cranley

    Douglas-Hamilton, Lord J.

    Oppenheim, Philip

    Dover, Den

    Ottaway, Richard

    du Cann, Rt.Hon Edward

    Page, Richard (Herts SW)

    Dunn, Robert

    Parkinson, Rt Hon Cecil

    Durant, Tony

    Parris, Matthew

    Edwards, Rt Hon N. (P'broke)

    Patten, John (Oxford)

    Emery, Sir Peter

    Pawsey, James

    Evennett, David

    Peacock, Mrs Elizabeth

    Eyre, Sir Reginald

    Percival, Rt Hon Sir Ian

    Fallon, Michael

    Powell, William (Corby)

    Farr, John

    Powley, John

    Forman, Nigel

    Prentice, Rt Hon Reg

    Fox, Marcus

    Proctor, K. Harvey

    Fraser, Peter (Angus East)

    Raffan, Keith

    Garel-Jones, Tristan

    Rathbone, Tim

    Glyn, Dr Alan

    Renton, Tim

    Goodlad, Alastair

    Rhodes James, Robert

    Gregory, Conal

    Rhys Williams, Sir Brandon

    Grist, Ian

    Ridley, Rt Hon Nicholas

    Grylls, Michael

    Rippon, Rt Hon Geoffrey

    Gummer, John Selwyn

    Roberts, Wyn (Conwy)

    Hamilton, Hon A. (Epsom)

    Roe, Mrs Marion

    Hanley, Jeremy

    Rossi, Sir Hugh

    Hayes, J.

    Rost, Peter

    Hayward, Robert

    Rowe, Andrew

    Henderson, Barry

    Rumbold, Mrs Angela

    Heseltine, Rt Hon Michael

    Ryder, Richard

    Higgins, Rt Hon Terence L.

    Sayeed, Jonathan

    Hogg, Hon Douglas (Gr'th'm)

    Shaw, Sir Michael (Scarb')

    Holland, Sir Philip (Gedling)

    Shelton, William (Streatham)

    Holt, Richard

    Shepherd, Colin (Hereford)

    Howard, Michael

    Shepherd, Richard (Aldridge)

    Howell, Rt Hon D. (G'ldford)

    Shersby, Michael

    Hunt, David (Wirral)

    Silvester, Fred

    Hurd, Rt Hon Douglas

    Skeet, T. H. H.

    Key, Robert

    Smith, Tim (Beaconsfield)

    Lamont, Norman

    Soames, Hon Nicholas

    Lang, Ian

    Speed, Keith

    Latham, Michael

    Spencer, Derek

    Lawler, Geoffrey

    Spicer, Michael (S Worcs)

    Lewis, Sir Kenneth (Stamf'd)

    Squire, Robin

    Lightbown, David

    Stanbrook, Ivor

    Lloyd, Peter, (Fareham)

    Stanley, John

    Lord, Michael

    Stern, Michael

    Luce, Richard

    Stevens, Lewis (Nuneaton)

    Lyell, Nicholas

    Stevens, Martin (Fulham)

    McCrindle, Robert

    Stewart, Allan (Eastwood)

    Macfarlane, Neil

    Stewart, Andrew (Sherwood)

    MacGregor, John

    Stewart, Ian (N Hertf'dshire)

    Maclean, David John

    Stokes, John

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

    Stradling Thomas, J.

    Madel, David

    Sumberg, David

    Major, John

    Tebbit, Rt Hon Norman

    Malins, Humfrey

    Temple-Morris, Peter

    Malone, Gerald

    Terlezki, Stefan

    Marland, Paul

    Thomas, Rt Hon Peter

    Marlow, Antony

    Thompson, Donald (Calder V)

    Marshall, Michael (Arundel)

    Thompson, Patrick (N'ich N)

    Mates, Michael

    Thorne, Neil (Ilford S)

    Mather, Carol

    Thornton, Malcolm

    Maude, Hon Francis

    Thurnham, Peter

    Maxwell-Hyslop, Robin

    Townend, John (Bridlington)

    Mayhew, Sir Patrick

    Tracey, Richard

    Mellor David

    Twinn, Dr Ian

    Merchant, Piers

    van Straubenzee, Sir W.

    Meyer, Sir Anthony

    Vaughan, Sir Gerard

    Miller, Hal (B'grove)

    Waddington, David

    Mills, Iain (Meriden)

    Wakeham, Rt Hon John

    Mitchell, David (NW Hants)

    Waldegrave, Hon William

    Moate, Roger

    Walden, George

    Monro, Sir Hector

    Waller, Gary

    Morris, M. (N'hampton, S)

    Wardle, C. (Bexhill)

    Morrison, Hon C. (Devizes)

    Watson, John

    Morrison, Hon P. (Chester)

    Watts, John

    155

    Wells, Bowen (Hertford)

    Wood, Timothy,

    Wells, John (Maidstone)

    Woodcock, Michael

    Wheeler, John

    Yeo, Tim

    Whitfield, John

    Young, Sir George (Acton)

    Whitney, Raymond

    Winterton, Mrs Ann

    Tellers for the Noes:

    Winterton, Nicholas

    Mr. Michael Neubert and

    Wolfson, Mark

    Mr. Tim Sainsbury.

    Question accordingly negatived.
    Lords amendment No. 82A agreed to.
    Subsequent Lords amendments agreed to.
    Lords amendment: No. 82, in page 22, line 35, at end insert—
    "(5A) Where a final order has been made or a provisional order has been confirmed, any contravention of a condition of the licence to which it applies, which occurred prior to that order taking effect and which would have been in breach of the duty owed by virtue of subsection (5) above had that order then been in force, shall be actionable with the prior consent in writing of the Director at the suit or instance of any person who has suffered loss or damage as a result of that contravention.
    (5B) In any proceedings brought against any person in pursuance of subsection (5A) above, it shall be a defence for him to prove that he took all such reasonable steps and exercised all due diligence to avoid contravening the condition of the licence in question."
    1.15 am
    Mr. Kenneth Baker: I beg to move, That this House doth disagree with the Lords in the said amendment.
    Mr. Deputy speaker: With this we may take Government amendments (a) to (h) in lieu thereof, Lords amendment No. 61 and the Government amendment (a) thereto.
    Mr. Baker: There are some 12 Lords amendments—Nos. 58 to 60 and 62 to 70—to clause 16, which we have already considered. In addition, there are our proposed amendment to Lords amendment No. 61 and eight Government amendments to clause 16 in lieu of Lords amendment No. 82. The House may find it difficult at this, or any, hour to follow the proposed amendments, so for the convenience of the House I have placed in the Vote Office two documents. The one labelled A is the text of clause 16 incorporating the Lords amendments as sent to us, and the second, labelled B, is the text of clause 16 incorporating the Government's proposed amendments. Document A is the text which the Lords have asked us to accept, and document B is the text which the Government wish to send back to the Lords.
    The Government disagree with amendment No. 82, which adds two subsections (5A) and (5B) to clause 18. They would provide that, where a final order has been made or a provisional order confirmed, any person who has suffered loss or damage as a result of any contravention of the licence condition to which the order refers should have the right to sue for damages in respect of any contravention of the condition which took place before the order was made. That is a radical change from the Bill as approved by the House. We made provision for the right to obtain damages to commence only when a final order had been made or a provisional order confirmed. That means that an operator becomes exposed to a liability to pay damages only when the Director has taken formal steps to specify that a condition has been breached.
    The procedures leading up to the making of a final order or to the confirmation of a provisional order involve delay while the operator is given the opportunity to object to the
    156
    proposed final order or to the terms of a provisional order. The Government accept that this delay is undesirable and agree that damages should be payable earlier. Under amendment No. 80, which we have just approved, damages become payable as soon as a provisional order is made. That is a significant change from the point of view of strengthening the powers of the Director General of Oftel. But amendment No. 82 goes further and proposes that the right to damages should go right back to the time when the licence condition was first breached. The only limitation on the ability to claim damages is the proposed requirement.
    The Government are convinced that amendment No. 82 would do serious damage not only to telecommunications operators, both large and small, but to those who depend upon telecommunications generally. The main reason why amendment No. 82 is objectionable is that it introduces retrospection. If it remained in the Bill it would bring about circumstances in which an operator would be exposed to unlimited damages in respect of courses of action which were entirely acceptable when they were taken.
    This problem arises because licence conditions will not be precise rules. They will set out broad guidelines. Therefore, an area of uncertainty would be created in the operations of a public telecommunications operator. This uncertainty would obviously harm BT and, indeed, other public telecommunications operators. BT's position would be impossible if each of its 19 million customers had the opportunity to claim unlimited damages in respect of past actions.
    The position of small operators such as the radiotelephone or message handling companies would be no better. They, like BT, will have licence conditions, but they have limited resources, and actions for damages could readily drive them into liquidation.
    The amendment would also do serious harm to the enforcement provisions in the Bill. As it is drafted, licence conditions are enforced by the Director, and if he discovers a breach he must normally make an order requiring the operator to take specific steps to comply with his licence conditions.
    We have now changed that. The Director has a duty to act quickly. This will produce swift remedies. If, however, his action gives others the right to sue for damages in respect of the period before he makes his order, the Director will, before making any order, have to take account of the potential impact of those damages on the operator concerned. This will lead to delays in decision-making by the Director General, which no one wants.
    Mr. Richard Shepherd: Surely the right to sue for the proceeding period causes the licensee to be very much more cautious in its acts in relation to the general public or the third party concerned.
    Mr. Baker: The changes that we are now introducing will make any licensee very careful indeed not to breach the licence conditions. We have given the Director General the power to issue an interim order straight away, virtually on a prima facie case before an investigation. That is a considerable extra power.
    If a small company claimed that it was discriminated against by BT or Mercury—or vice-versa for that matter

    157
    —and if there was a good prima facie case, the Director General could issue a provisional order which would effectively say to the offending party, "Cease and desist."
    There could then be a further examination, and if the Director confirmed a prima facie case and issued a final order, damages would start from the day that a provisional order began.
    That is a considerable strengthening of the powers of the Director General of Oftel. That will make all licensees very cautious indeed. That is what we want, because the whole structure of the regime that we are setting up is swift and effective policing by the Director General.
    For these reasons, I hope that the House welcomes the changes that we have made. We recognise that their Lordships had a point, but we do not think that the amendments moved in another place met it effectively. We have now moved very far to meeting what they want. Towards the end of their Lordships' deliberations, those who proposed the changes felt that the purpose was not achieved by their original intention. We have now tidied it up, and I commend the amendments to the House.
    Mr. Stott: Throughout the progress of this miserable Bill I cannot recall an occasion when I have had the opportunity to agree with the Minister. However, I absolutely agree with his opposing their Lordships in their amendment.
    I do so for perhaps different reasons. Given that the Lords amendment contains retrospection, we are concerned not only about the operators but about those who work in the telecommunications industry as well as the trade unions in that industry. I refer to trade unions in the plural, because the Minister will be aware that the Secretary of State has granted licences not just to BT— whose principal union is the POEU—but to Mercury. It has granted licences to the Hull corporation and to two cellular radio companies, all of whose employees could be subject to the amendment if the House were to agree with their Lordships in the amendment.
    I should like to put on record why the Opposition agree with the Government in disagreeing with their Lordships in the amendment. As it stands, clause 18(6) allows for the retrospective imposition of damages on those, including the trade unions, who ignore an order prohibiting them from continuing a breach of a telecommunications operator's licensing conditions.
    Although we do not agree with the Bill and have said so on many occasions — the Minister for Information Technology is fully aware of that—we accept that it is essential for the Director General to decide whether action such as a breach of BT's licensing conditions would be liable, if continued, to damages. It follows that the period from which the damages would start must be when the Director General issues such an order. But following the Lords amendment a totally unsatisfactory situation has been created.
    The Director General would still decide his view of such action and issue or not issue an order as appropriate, and the trade unions concerned could then proceed on the reasonable assumption that the Director General's view was correct. However, it could see his view overturned at some time in the future in an entirely unexpected way. That could be because of the different views, perhaps, of a new Director General facing the same situation, or
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    because of a later decision of the same Director General which had the accidental effect of modifying his previous decision.
    The unions—I stress the plural: the unions, not just the POEU — would then be in an extremely onerous position in having to continue a course of action which, though it breached BT's licence, did not, they thought, malice them liable for damages, only to find subsequently that they were subject to those damages because of the retrospection clause. It is a matter which clearly concerns not just the Government in respect of the operation of the licence, but the trade unions, which would be subject to the conditions of the amendment if if were to be passed by the House this evening. Therefore, we wholeheartedly approve of the Government's decision not to support their Lordships in their amendment.
    Mr. Michael Marshall: I should like to say a few words about the Lords amendment that we are being asked to reject. Initially, I declare my interest as a parliamentary adviser to Cable and Wireless. Much of the debate that has taken place in a truncated form tonight relates to the problems that we have all had to examine very carefully when considering the difficulties with a near monopoly and its competitors.
    Due to the problems that we all know so well in this House, we have not had an opportunity for adequate debate in this whole area, and I think that their Lordships, in this matter, have performed a valuable service as a revising Chamber. I pay tribute to my noble Friend Lord Morris for his work in bringing the amendment forward, and to those who, on an all-party basis, have sharpened up the debate. Having said that, I should like to make the point to my right hon. Friend that I think throughout the whole proceedings on the Bill a great deal has depended on the good will and, indeed, the assurances that have been forthcoming from Ministers in trying to mark the card for the Director General of Oftel.
    I pay tribute to what my right hon. Friend and his colleagues have done in trying to meet the arguments that some of my hon. Friends have made. I hope that before the debate closes, my right hon. Friend will find an opportunity to provide further assurances on the value added network services, on the whole range of anticompetitive practices, and to touch on inter-connection. I know that he will be able to do this by correspondence, or when the licences are debated. On that I agree with what the hon. Member for Newcastle-under-Lyme (Mr. Golding) said, because we shall have an opportunity to raise some of the issues then. If some of these background problems can be met by Ministerial reassurances, the difficulties envisaged in the amendments may not come to pass.
    My right hon. Friend has clearly made out a case that the Government amendment strengthens the hand of the Director General of Oftel and of those likely to be affected by the Bill against non-compliance by a licensee with his licence in a way which would not have been the case were their Lordships' amendments to be sustained. It is true that the Director will have a specific duty to act, by issuing a provisional order where he deems that a licence provision is being breached, and he can, my right hon. Friend has fairly argued, do that quickly. I accept that that is a considerable step forward. He must also take account of any loss or damage that a person may be suffering from a breach of a licensee's conditions. In that, my right hon.

    159
    Friend has made out a case. While not decrying the efforts in the other place, we can see an opportunity not only to meet the thrust of the argument, but to avoid the retrospective problems that my right hon. Friend outlined.
    It would be churlish not to say that throughout the Bill's stages much has depended on the way in which my right hon. Friend, my hon. Friend the parliamentary Under-Secretary and their officials have met the spirit as well as the substance of our representations. As one who, in the past, had some part in the original Telecommunications Bill, I feel that we are in the process of removing one of the last remaining stumbling blocks on the forward path towards not just liberalisation but privatisation. I wish my right hon. Friend well in that further endeavour, and the House will look forward to what he still has to say tonight.
    Mr. Neale: I remind my right hon. Friend the Minister for Information Technology of the speech that he gave on Second Reading of the Bill that was introduced in 1981. If he recalls his words in that debate, he will take pride in introducing these amendments this evening. However, I point out to my hon. Friend the Member for Arundel (Mr. Marshall) that I have some slight reservations about the reduced nature of his proposals. The nature of this amendment has been supported so vigorously by my right hon. and hon. Friends in the various stages of the development of the law on telecommunications because of the fear of the extent of the BT monopoly and the way in which the nature of telecommunications has been contained in the various proposed licences for the next few years.
    The hon. Member for Newcastle-under-Lyme (Mr. Golding) made a point with which it is difficult to contend — that we are converting a public monopoly into a private monopoly—and asked what reason we have for doing so. I know that my right hon. and hon. Friends have made considerable efforts not only to liberalise but to increase competition. They have rightly referred to a whole range of issues where this has been done. The fear of continuing the power of the monopoly—the power to enter into unfair practices—is still there. My right hon. Friend is aware of a number of these practices that have been entered into by BT.
    In the time remaining to my right hon. Friend before the licence is finalised and the framework which he has worked so hard to prepare is established, I hope that he will take account of the comments being made and try to accelerate the process whereby the attachment side of BT is separately accounted and clearly identified apart from BT's network operation to ensure that it is clear to all concerned that there is no unfair cross-subsidisation that militates against other operators, providers of other attachments and the market generally. I hope that he will see that there must be some real sense in allowing the network side of BT to have an unfettered and unihibited desire to see anyone connect to it rather than having that desire inhibited purely because it is itself in the market providing attachments.
    I concede that in spirit the amendment is a considerable and welcome step forward, and I congratulate my right hon. Friend.
    1.30 am
    Mr. Richard Shepherd: I wish to add my own word of appreciation to the Government for taking on board the
    160
    legitimate concern expressed by many of my hon. Friends and fought for very spiritedly just over a year ago by my hon. Friends the Members for Arundel (Mr. Marshall) and for Cornwall, North (Mr. Neale). At that time the Government did not entirely appreciate the fears expressed by some of their colleagues. I am glad that they have now met some of the anxieties expressed and accepted in the other place.
    My only caveat—and it is a substantial one—is the moment from which one is entitled to sue for damages. My own feeling— and my experience of the Bill supports me in it — is that we do not always appreciate the moment at which we suffer damage or loss. It may be that our reckoning or understanding of the position in which we find ourselves consequential upon an act by a monopoly that is damaging to our interests is slow. Therefore, if we cannot identify to the satisfaction of the Director General of Oftel at an early stage the damage that we are experiencing and the breach of licence that we suspect, we are extremely vulnerable. It would not have been unreasonable for the Government to accept the contention that we ought to be able to sue for the entire amount of the damage and not just from the time that the Director General said that we suffered it.
    My right hon. Friend accepts that his proposal will act as a caution to what we all hope is the lessening monopoly of BT and the providers of services. I acknowledge that the Government have accepted a large number of the arguments advanced in the other place and by my hon. Friends, but I regret that they did not take the final step to give our citizens rights, which are available elsewhere, to sue in defence of their properties, businesses and own interests. Therein lie our freedoms. That is much of the argument behind the contentions of my hon. Friends— that if we are to have a liberal, dynamic society, each of us must be able to defend our rights in the courts and sue for redress.
    Mr. Ian Wrigglesworth: I share the anxieties expressed by Government supporters. I have had recent examples of the way in which the monopoly of BT can oppress those who seek to challenge its position and open up the market in the way that the Government intend.
    I have in my constituency a new firm which has been established to add on equipment to the BT system and provide a challenge to BT. It has found it very difficult to obtain equipment because of delays over approval and because of the purchasing power of the BT monopoly which prevents suppliers from supplying equipment. That will be a grave worry in future. People such as my constituents must have the power to seek redress if such unfair competition and obstacles are placed in their way. The purchasing power of BT which will remain after the enactment of the Bill will be substantial. There are ways in which that substantial purchasing power can be used against the interests of other people who want to purchase equipment from the manufacturers.
    In addition, I have had evidence of some of the most appalling behaviour by BT recently. I have written to the Minister about that and I look forward to receiving his response in due course. I have had evidence—it is not the only evidence of such things happening—of firms seeking to obtain business who have had to go to BT to seek approval for installing equipment and, lo and behold, five minutes later BT has gone to the customer and offered its services at a knock-down price, taking the business

    161
    away from the new company. Obviously, that will change in future. I regard that as sharp practice. It is unacceptable to have such action being taken by BT at present when it has this enormous power of approving the installation equipment when it is in competition with people who are seeking to install it.
    It is worrying for the future that BT will have such a substantial, dominating part of the market. Therefore, I hope that the Minister will assure the House that the right of redress will be there, and, as we proceed this evening, that the approval of equipment will be rapid and provide equipment manufacturers with the means of getting their new equipment on to the market so that purchasers other than BT will be able to obtain it in order to install it in competition with BT. I look forward to the new system coming into operation so that there can be much greater competition in the telecom sphere than we have at present.
    Mr. Kenneth Baker: My hon. Friend the Member for Cornwall, North (Mr. Neale) referred to the Second Reading of the Bill in 1981. It has been on a long journey and we are almost in port now. The Bill has changed quite a bit as it has journeyed across the seas, always—I think and hope—for the better.
    I have listened carefully to what has been said about competition and I accept that there is a growing concern about some of BT's activities. The hon. Member for Stockton, South (Mr. Wrigglesworth) has written to me about the case to which he referred. I have replied to him and I am raising the matter with Sir George Jefferson. If what he says is justified, there are unacceptable practices. We are considering such instances in determining the final details of the licence, because it is essential that it should be the instrument whereby one can ensure the competition that my hon. Friend said he wanted to see.
    I accept that the amendment does not go quite as far as my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) wants. On the other hand, this is a significant change. Under amendments (b) (d) and (e) the Director General has a duty to make a provisional order. He cannot just wait and see. In examining that duty he has to take into account specifically the extent to which any person is likely to suffer damage or loss if the contravention continues. Finally, there is the speed at which the provisional order can be introduced. Those are important weapons in the armoury to ensure greater competition.
    Question put and agreed to.
    Lords amendment No. 82 disagreed to.
    Amendments made to the Bill in lieu thereof:

    (a), in page 19, line 30, leave out '(3)' and insert '(2)'.

    (b), in page 19, line 35, leave out from 'condition' to end of line 38.

    (c), in page 19, line 39, leave out '(3)' and insert '(5)'.

    (d), in page 19, line 40, after 'Director', insert '(a).

    (e), in page 19, line 41, leave out 'may' and insert

    ',and
    (b) that it is requisite that a provisional order be made, the Director shall (instead of taking steps towards the making of a final order)'.
    (f), in page 20, leave out lines 1 and 2 and insert—
    '(3) In determining for the purposes of subection (2)(b) above whether it is requisite that a provisional order be made, the Director shall have regard, in particular, to the extent to which any person is likely to sustain loss or damage in consequence of anything which, in contravention of the relevant condition, is likely to be done, or omitted to be done, before a final order may be made.'.
    (g), in page 20, line 9, leave out
    162
    'The duty imposed by subsection 81) or'
    and insert
    'The duties imposed by subsections (1) to'.
    (h), in page 20, line 24, leave out from 'at' to 'is' in line 25 and insert
    'such time, being the earliest practicable time, as'. — [Mr. Kenneth Baker.]

  Clause 16

    SECURING COMPLIANCE WITH LICENCE CONDITIONS
    Lords amendment: No. 61 in page 19, line 40, leave out from "is" to "may" in line 41 and insert
    "contravening or has contravened and is likely again to contravene any of the conditions of his licence, the Director"
    Read a Second time.
    Amendment proposed to the Lords amendment, to leave out 'the Director'.—[Mr. Kenneth Baker.]
    Question put and agreed to.
    Lords amendment, as amended, agreed to.
    Subsequent Lords amendments agreed to, some with special entry.

  New Clause

    APPLICATION OF LAW IN RELATION TO OFFER OF SHARES OR DEBENTURES OF THE. SUCCESSOR COMPANY
    Lords amendment: No. 143, before clause 68 insert the following new clause—
    '.—(1) This section applies where the Secretary of State or a nominee of his offers for sale to the public shares or debentures of the successor company at a time when that company is wholly owned by the Crown; and in this section "Full prospectus" means a prospectus which complies, or is deemed to comply, with the requirements of Schedule 4 to the Companies Act 1948 (matters to be specified in prospectus and reports to be set out therein).
    (2) If the shares or debentures are offered by a full prospectus as respects which the conditions mentioned in subsection (3) below are fulfilled (in this section referred to as "the offer prospectus"), any form of application for the shares or debentures may (instead of being issued with a full prospectus) be issued with a notice given by the Secretary of State which includes—

    (a) a brief description of the shares or debentures offered, the terms of the offer, the successor company's business and its financial position;

    (b) an indication of the places in the United Kingdom where copies of the offer prospectus are to be available for inspection by members of the public; and

    (c) a statement of the effect of subsections (4) and (5) below.

    (3) The said conditions are—

    (a) that a copy of the prospectus has been delivered to the registrar of companies in pursuance of section 41 of the said Act of 1948; and

    (b) that arrangements have been made with a view to securing—

    (i) that on or before the date of receipt of the form of application by a member of the public a copy of the prospectus is published in not less than four national newspapers; and

    (ii) that on that date copies of the prospectus are generally available in the United Kingdom for inspection by members of the public.

    (4) Where a form of application is issued without a full prospectus but with a notice given by the Secretary of State under subsection (2) above, then, for the purposes of any enactment or any rule of law—

    (a) the notice shall be taken to have incorporated the offer prospectus; and

    (b) any application for the shares or debentures which is made in pursuance of the notice shall be taken to have been made in pursuance of that prospectus.

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    (5) Where a form of application is issued without a full prospectus, neither the form of application nor any document which is issued with it shall be regarded—

    (a) as a prospectus for the purposes of sections 37 to 46 of the said Act of 1948 (Prospectus requirements); or

    (b) as a circular for the purposes of section 14 of the Prevention of Fraud (Investments) Act 1958 or section 13 of the Prevention of Fraud (Investments) Act (Northern Ireland) 1940 (circulars relating to investments),

    but only, where the form of application is issued without a notice given by the Secretary of State under subsection (2) above, for the purpose of determining the liability of persons other than the Secretary of State.'
    Mr. Kenneth Baker: I beg to move, That this House doth agree with the Lords in the said amendment.
    This clause, which was introduced in the other place, was justified on the basis that it was aimed at meeting exceptional needs, while at the same time providing proper safeguards for the interests of the investor.
    The exceptional needs in this case are related to BT's size, and the unique familiarity of the public at large with the corporation. BT is very large, and to get a shareholder base appropriate to its size will require us to bring the sale offer to the attention of a very wide audience. For example, ICI has a shareholder register numbering 450,000 which it has built up over many years. BT is larger, and to achieve a comparable or larger shareholder base during the relatively short period of the flotation would require very much wider exposure.
    1.45 am
    We also need to go to a wide audience to ensure that everyone who is interested has the opportunity to be involved in the flotation. BT's subscribers number some 19 million and public awareness and interest in BT is therefore exceptionally widespread. We want to give those with an interest, and particularly telephone subscribers, the chance to invest because we should like the public at large to have a direct interest and influence in the running of BT. This would also, we hope, contribute to a spread of share ownership generally, which we believe would be of much wider benefit.
    We must plan for a share offer on an unprecedented size. On that basis we would be in danger of outstripping the physical capacity in the United Kingdom to print and distribute full prospectuses, if a prospectus was required with every share application form. I am doubtful whether such a set of circumstances was ever envisaged when the full prospectus requirement was drawn up. In fact, at that time full prospectuses were themselves very much shorter, so even if a share offer of this size had been envisaged the logistical problems that I have outlined would not have been so prohibitive.
    The clause therefore translates the prospectus requirement into terms which are practicable for an offer of this size. It does this by allowing us to issue a short notice with share application forms rather than a full prospectus. We nevertheless aim to fulfil the spirit of the existing legislation and this is made clear in the way that the clause is drafted. The clause ensures that the issue of a short notice takes place only against the background of a widely available full prospectus. I envisage a prospectus of the normal 50 to 60 pages which satisfies the prevailing stock exchange and legal requirements. I can assure the House that we intend to make the prospectus very widely
    164
    available indeed—at high street outlets and elsewhere—when the time comes. The clause also requires there to be arrangements for the publication of the full prospectus in at least four national newspapers. In these ways the clause ensures that investors who wish to make use of the full prospectus can do so without difficulty.
    For the notice itself, the clause requires there to be a description of the salient points about the offer and BT's business and finances. This should help to highlight the important points for those who are unfamiliar with working their way through a full prospectus. We do not want to lose sight of this as a benefit of the notice because it will be difficult for the ordinary public to identify the main points in what may be a complex and long and full prospectus. The notice can therefore make a genuine contribution to their understanding of what is on offer. Since the notice will also be required to indicate places where the full prospectus will be available, the further and more detailed information will still be signposted for those who are interested.
    In whole, therefore, the clause removes the practical obstructions to presenting BT to an audience appropriate to its size, but remains sensitive to investors' needs for information.
    I commend the amendment to the House.
    Mr. Roger Stott: We are back on track again as we rapidly conclude this evening's debate on this very important issue. By "back on track" I mean that I disagree profoundly with the spurious motives which the Minister has just enunciated for accepting the amendment. His remarks were completely and utterly fallacious.
    Conservative Members should realise that the amendment allows the Government to get round the strict requirements about what has to be published in the prospectus for any company which is to be publicly floated. It is expected that the so-called "full prospectus" will be a very substantial document and might, therefore, in the Government's eyes be too complicated and difficult to handle for the "ordinary shareholder". Consequently, they are providing what is euphemistically described as the "short prospectus".
    The point of having a full prospectus is that it provides the shareholders with a considerable amount of protection. It requires a company to provide fairly detailed information about its activities and prospects at a time when it is seeking to sell its shares to the public. Bitter experience has shown that these tight laws on information disclosure are very important if shareholders are to be adequately protected.
    However, in this Government's mad desire to sell off BT they have now instituted—by their support of the amendment — a new procedure for circumventing the full prospectus requirements. That raises very important issues about shareholder protection and the trustworthiness of offer documents. Is this to be the forerunner of several other truncated prospectuses for share flotations that the Government may or may not propose in future? To what extent will it alter the Stock Exchange rules and the general provision of shareholder protection? Recent experience has shown that, far from reducing the flow of information to shareholders, there is increasing necessity to expand it and give shareholders greater protection. It might seem ironic that I am advancing an argument for shareholders in British Telecom, but the seedy business of

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    the short prospectus is a further example of the way in which the Government continually try to bend the existing rules.
    Behind the amendment is the Government's real intention of selling off British Telecom at whatever cost at the first opportunity irrespective of whether that is in the interests of the nation as a whole or of the telecommunications industry in general. It is being claimed by those of us who oppose privatisation that the Government will encourage British Telecom to tart up its accounts so that it can provide the most attractive share offer possible, hence cutting down the prospectus, which will be a way of simplifying matters and making the share offer seem more attractive than it would otherwise be.
    The Opposition's argument has been reinforced by recent accounting changes in BT. There has been a change in the depreciation policy by the adoption of the historic cost approach. This has had the miraculous effect of boosting BT's profits, and for the first six months of 1983–84 there was a sharp increase. The trading profits for that period will be taken as a key factor in the flotation. The profits were reported at £462 million, with every expectation of a profit of nearly £1 billion in a full year. This compares with the reported profit in 1982–83 of only £365 million. The increased profit was due to a large change of supplementary depreciation.
    The corporation has shortened significantly the lives of its assets. This has led it to write them off sooner than it would have done previously. There has been an enormous write-off of £933 million, which was effective from 1 April. That write-off will be effective from the year of its flotation. This approach contravenes the standards of accountancy practice, but I understand that the auditors have complied with it. Such a write off has important consequences and the declared profits in the year after privatisation will be increased by the amount of the write off, which will be an enormous bonus to the would-be shareholders.
    Mr. Neale: Will the hon. Gentleman concede that BT's accounts have regularly been qualified by its auditors, so they are hardly accounts that have had a great record of reputability in the past? Secondly, will he concede that one of the defects of his argument about the long-term retainer within the accounting structure of the assets that he is describing has been the tendency of BT to keep its assets as part of its current supplies and not to write them off more quickly and take in new forms of product? Many of the assets have been in the books for ages, with the result that new technology has been prevented from entering the organisation.
    Mr. Stott: No, I do not accept that. If that were so, why was the different accountancy procedure not instituted some years ago? Why now, at the very time that the Government are proposing to sell off one of the most important assets that the nation owns, is it proposed to change the entire accountancy procedure? The Government are changing the accountancy procedure to make BT that much more attractive to the potential shareholder.
    I shall pray in aid a cutting from The Times of 4 April. It is a letter to the editor from Sir Ian Morrow, who is a distinguished accountant and a director of Hambro's bank. What greater credentials could the honourable knight have? The letter stated:
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    "British Telecom has now reinstated its profit for the year to March 1983, showing an increase from £365 million to £1,030 million. The first figure is used as the basis for the price increases to consumers, the second, for setting the price for investors. Both of course are certified as 'true and fair'.
    With this example will other nationalised industries, e.g. British Gas, Please reinstate their profits on a historical basis?
    Perhaps the Treasury could be persuaded that private contractors to the Government should use inflation accounting figures for determining their costs on non-competitive bids."
    Those are not my words, but those of Sir Ian Morrow. He drew the example that I have already drawn of the shameful way—I am tempted to say dishonest, but I would be ruled out of order—in which the government are encouraging British Telecom to cook the books to fatten the cow before they sell it.
    Mr. Neale: Does the hon. Gentleman accept that not only among Conservative Members but throughout the country there is considerable puzzlement about the way in which he projects the case for the members of his union? He is always sincere in the way in which he puts his argument, but surely someone working in an organisation such as British Telecom must be proud that it is now showing its true profitable position. It is getting its accounts into order. Until comparatively recently it had only one qualified accountant within its whole operation. How can the hon. Gentleman, on behalf of those for whom he speaks, suggest that it is not in their interests that BT is put on a proper commercial accounting basis so that it can compete in the open market with other companies?
    Mr. Stott: If it were for the benefit of those whom I represent, we would not be doing what we are doing this evening. It is as simple and straightforward as that. It is because it is not for their benefit, but because the Government are privatising a public asset and fattening the cow before it is slaughtered, that we are opposing the whole principle of the Bill. The clause, which the Government now support, is one further example of the way in which they want to ensure that the books of BT are altered and cooked to give it the greatest profit when the industry is privatised.
    Mr. Kenneth Baker: The hon. Gentleman is making allegations that it would be generous to describe as ignorant. In no way can a Government intervene in a nationalised industry and instruct it to change its asset lives. Indeed, the proposals agreed by the board of BT must be approved by its auditors. At no time did the Government intervene or express any view.
    Mr. Stott: That may be the case. The fact that the Bill's provisions have been debated in the House and in the other place, thereby giving the Secretary of State for Trade and Industry the right to sell off British Telecom has meant that at least two years ago BT's board was given the green light and told that the industry was about to be privatised. It may be that the Minister has not said to Sir George Jefferson, "Cook your books," because he cannot say that, but the fact that legislation has been introduced to allow privatised BT to come into operation has given BT the opportunity to do what I have said. The Government are guilty in complying with the regulations.
    2 am
    The Minister owes the House certain explanations. I am sure that he read The Sunday Times "Business News" last Sunday. It contained an interesting article headed, "BT bosses launch shares roadshow." I am sure that that article

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    appeared this morning in the Minister's press cuttings file. Would he comment on some of the salient points in that article?
    It does not come as any surprise to the Minister that the Opposition are totally opposed to the principles of privatisation and people making money out of the privatisation of British Telecom. It would appear, if my information is correct, that the stockbrokers whom the Department of Trade and Industry has designated as the appropriate people to facilitate this sale will benefit considerably. I understand that in the past the Commission to the stockbrokers who have participated in the flotation of other public assets has been levied at 1·55 per cent. The Sunday Times article said that the Commission had been increased to 2 per cent. If that is the case, the fat cats in the City — the Opposition are always accused of misrepresenting the Government's intentions—the seven or eight stockbrokers listed in the article, will receive a fee of £60 million merely for facilitating the sale of British Telecom.
    The Secretary of State is gracing us with his presence in the Chamber. The right hon. Gentleman should stand up at the Dispatch Box and tell my constituents that the Government will not pay £60 million of public money—not money belonging to the right hon. Gentleman, the Conservative party or me—to facilitate the privatisation of British Telecom. Can the right hon. Gentleman confirm that that will not be done? The way in which the Government have dealt with the flotation of the shares has been appalling. The amendment is one further example of the way in which the Government are getting around the law by not submitting a proper and full prospectus to those who wish to buy the shares. That is a disgraceful and contemptible act.
    Mr. Richard Shepherd: It is difficult to follow that mish-mash of low-level arguments, which raise doubt about the future of the Opposition Front Bench. When there is merit in any of those arguments one has to be cautious, but I wish to associate myself with two of the themes identified by the hon. Member for Wigan (Mr. Stott) in his awful diatribe.
    The hon. Gentleman mentioned the provision of a full prospectus. We are conscious that every investor, no matter how small, and no matter how ignorant he may be deemed to be, is entitled to the same information as everyone else. I understand the Government's laudable motive to make the issue as widely accessible as possible, but I am not sure that that necessitates a lesser form of prospectus than would otherwise be provided. However, I do not make a great deal of that.
    The second point that I think the hon. Member for Wigan made followed reports in the Sunday papers that the underwriting fee will be 2 per cent. We are talking about the disposal of what looks to be an extremely attractive company, whether on the old acccountancy basis or on the new historic cost convention basis. I wonder why a fee of 2 per cent. is necessary for what ought to be a successful launch. I understand that the valuation of the company is £4,000 million, which would give a gigantic underwriting fee of £80 million. I regret that I am not a shareholder in some of the companies that are being given such large sums to promote a highly attractive and, I predict, a successful and popular issue.
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    I shall be grateful if my right hon. Friend the Minister, in trying to reply to the arguments of the hon. Member for Wigan, will tell us why it is necessary to provide a lesser prospectus and why the Government are to pay an underwriting fee that raises concern on both sides of the House.
    Mr. Ashdown: I listened with interest to the measured and careful speech of the hon. Member for Aldridge-Brownhills (Mr. Shepherd) and I agree with what he said about the prospectus.
    The alliance parties firmly favour broader share ownership. That is an important aspect of the reforms that we should like to see made in the British economy. I agree in principle with the Minister's aim of a broader ownership of shares in British industry. However, I also share the concern of the hon. Members for Wigan (Mr. Stott) and for Aldridge-Brownhills about the unreasonable profit that will be made by the stockbrokers. Once again, it seems to be a case of large profits being delivered into the hands of the Government's friends.
    New and exciting methods of share ownership should be greeted with enthusiasm, though I suspect that the Government's motives are a mixture of broader share ownership, which we welcome, and the desire to bring their narrow ideology into practice. We must ask whether that is a sufficient reason for overturning a provision enshrined in he Companies Act. The provision of a full prospectus is a safeguard, and I thereforé oppose the amendment. It is the duty of the House to scrutinise the Government's actions and to consider the long-term consequences of the precedents that the Government are establishing—for short-term reasons, in most cases.
    We are seeing a change in the law of Britain and in the safeguards provided by that law, in pursuit of the sale of the company that we do not wish to be sold. Much more importantly, the change is contained in a Bill which is primarily nothing to do with the Companies Act, and it may have consequences that knock on into the future.
    The hon. Member for Wigan made a speech with the general tenor of which I found some difficulty in agreeing. However, it contained some nuggets of importance. The hon. Gentleman was right to be worried about the establishment of such an important precedent within the framework of a Bill which has, fundamentally, nothing to do with the Companies Act. He pointed out that the precedent is established not only in the generality of the application of the Companies Act elsewhere, but in the context of the Government's plans for privatisation. If this change is to be introduced at this stage how much more will the Goverment lean on this precedent in the sale and privatisation of other assets?
    Furthermore, are we not here establishing a capacity —it may or may not be made use of on this occasion— for advertising the shares in very broad terms in the newspapers or by other means, as was suggested in the article in The Sunday Times and not producing the prospectus until, perhaps, the day before the flotation? The setting of this precedent could damage the safeguards in the Companies Act about the publishing of a full prospectus.
    We may well support the Government's aim, but it is largely coloured by ideology and dogmatism about the privatisation of assets, and we believe that in pursuit of that aim they are setting a dangerous precedent.

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    The hon. Member for Wigan referred, not so very briefly, to the writing down of assets. We continue to oppose the sale of BT, but, given what the Government are trying to do, and within the context of a successful sale of BT. writing down the assets should be a reasonably sensible way of proceeding. However, BT will be left in a highly geared state. Funds will be low in relation to debts. Should not the gearing ratio be brought down? If the Government wish to equip BT to survive in the real world, might there not be a case for writing off some of the debts? Will not the Minister have to follow that logic through and take some action along these lines?
    It seems wrong to us, and it is a matter of deep concern, that the Government should be overturning some of the safeguards built into the Companies Act in order to pursue their advantage at this particular time. That is wrong, even though the aim of encouraging wider share ownership is something to which we could subscribe.
    Mr. Mark Fisher: In speaking to a previous amendment, the Minister for Information Technology said that the Bill was almost in port. It had been a long voyage, but he was almost there. As the Minister knows, however, as yet he has only the legislation. He now has to put the legislation into effect and sell the shares. That is what the new clause addresses itself to.
    The reasons given for what is a considerable change in normal flotation practice are not very satisfactory. The Minister said that for logistical reasons he could not publish a full prospectus. He said that it was not practicable and used the rather shaky logic of setting up a problem, saying that it could not be solved and that he should therefore change the normal rules of flotation. The Opposition do not find it satisfactory if the intention of the new clause—it probably is—is to find some way round the Stock Exchange rules as laid out in the Yellow Book. The Yellow Book makes it clear that, for a successful flotation, a company that offers itself for flotation should be able to present five years' certified and audited accounts and a full prospectus to all shareholders.
    2.15 am
    Mr. Kenneth Baker: The guillotine is about to fall and I shall not have time for a substantial reply, but on the mini prospectus, I beg the hon. Gentleman to appreciate that the full prospectus of 50 to 60 pages is likely to be printed in several hundred thousand copies. There are some 19 million telephone subscribers and we regard this as a wonderful opportunity to extend share ownership on an extensive scale. To fulfil that opportunity it is not possible during a flotation to print 19 million prospectuses and deliver them to the homes of every subscriber. I ask hon. Members to consider how difficult it is to organise their election addresses during the three weeks of an election campaign and the amount of effort that that requires.
    Our proposals are not sinister but are merely addressed to the possibility of trying to expose the prospectus to as many people as possible. My right hon. Friend the Secretary of State for Trade and Industry has said that he wants this to be an opportunity dramatically to increase share ownership. That cannot be done if we are obliged to print and deliver a 60-page prospectus for the sale of shares in four to five days, or one week at the most. That is not logistically possible.
    I should like to make it clear that the full prospectus will contain all of the details. The shorter one cannot contain
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    all of the details, but it will make clear where interested people can go to see a full one. They will be made widely available through the banks and possibly even through post offices. In no way are people being asked to buy a pig in a poke. I believe that the anxieties that have been expressed about this matter have been alarmist —I do not think that the hon. Gentleman is adding to them— and I hope that I have been able to settle some of that anxiety tonight.
    Mr. Fisher: I feel that what the Minister is saying is not quite true. There is not a logistical problem. BT is able to produce telephone directories that are far longer than the full prospectus and deliver them to every house. The Minister has set the problem. If he wants to sell shares to several hundred thousand or several million people, he has a responsibility to give them a full prospectus. It is not satisfactory for him to say that he has set himself a problem of trying to sell to millions of people but that he cannot fulfil his responsibilities as a seller to explain fully the problems, possibilities and, in the Government's terms, opportunities that the sale offers.
    The Secretary of State is smiling mockingly, but if he wishes to sell the shares of a company in which he believes, he owes it to the people to whom he is selling to make the accounting problems clear. As Sir George Jefferson's chairman's statement in this year's half yearly report shows, there are distinct problems about the accounts and presentation that need explaining. They might not be sinister, but they need some capital reconstruction and massaging of the accounts to be appreciated and accepted. The change in depreciation policy has much to commend it, and getting rid of the old supplementary basis is probably welcomed on both sides of the House. When hon. Members sniggered because standard accounting policy was not being followed, they might not have been aware that, instead of passing through the profit and loss account which, I believe, is normal practice, the reserves have been written off. That is not standard accounting practice, and such a substantial change — £993 million— requires some explanation in the accounts. It is doubtful whether that can be done in a short, crisp prospectus.
    Since time is running short, it will be difficult to put my entire case. However, the Government should answer serious questions in this prospectus not only about depreciation but about other accounting problems, including what provision will be made for——
    Question put and agreed to.
    It being four hours after the commencement of proceedings on the motion relating to the Telecommunications Bill (Allocation of Time), Mr. DEPUTY SPEAKER proceeded, pursuant to the miler this day, to put forthwith the Question necessary for the disposal of the business to be concluded at that hour.

  New Clause

    INFORMATION ETC. TO BE MARKED ON OR TO ACCOMPANY APPARATUS
    Lords amendment: No. 153, after the clause last inserted to insert the following new clause:
    . — (1) Where it appears to the Secretary of State expedient that any description of relevant apparatus should be marked with or accompanied by any information or instruction relating to the apparatus or its installation or use, the Secretary of State may by order—

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    (a) impose requirements for securing that relevant apparatus of that description is so marked or accompanied, and

    (b) regulate or prohibit the supply of any such apparatus with respect to which the requirements are not complied with;

    and the requirements may extend to the form and manner in which the information or instruction is given.
    (2) An order under this section may, in the case of apparatus supplied in circumstances where the information or instruction required by the order would not be conveyed until after delivery, require the whole or part thereof to be also displayed near the apparatus.
    (3) Where an order under this section is in force with respect to relevant apparatus of any description, any person who, in the course of any trade or business, supplies or offers to supply relevant apparatus of that description in contravention of the order shall, subject to section (Offences due to default of third person) below, be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
    (4) For the purposes of this section a person exposing relevant apparatus for supply or having such apparatus in his possession shall be deemed to offer to supply it.
    (5) In this section and section (Information etc. to be given in advertisements) below—

    (a) "relevant apparatus" means wireless telegraphy apparatus or apparatus designed or adapted for use in connection with wireless telegraphy apparatus; and

    (b) "supply" shall be construed in accordance with section 9 of the Consumer Safety Act 1978."

    Read a Second time.
    Manuscript amendment proposed to the Lords amendment, in subsection (4), at end insert 'for supply'. —[Mr. Kenneth Baker.]
    Question put and agreed to.
    Lords amendment, as amended, agreed to.
    Subsequent Lords amendments agreed to, some with special entry.

    CYCLE TRACKS BILL [MONEY]
    Queen's Recommendation having been signified,
    Resolved,
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    That, for the purposes of any Act resulting from the Cycle Tracks Bill, it is expedient to authorise the payment out of money provided by Parliament of—

    (a) any expenses incurred by the Secretary of State under that Act;

    (b) any increase attributable to that Act in the sums payable out of such money under any other Act.— [Mr. Garel-Jones.]

  STATUTORY INSTRUMENTS, &c.

    ADMINISTRATION OF ESTATES
    Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committee on Statutory Instruments, &c.),
    That the draft Administration of Estates (Small Payments) (Increase of Limit) Order 1984, which was laid before this House on 12th March, be approved.—[Mr. Garel-Jones.]
    Question agreed to.

    NATIONAL HEALTH SERVICE
    Motion made, and Question put forthwith pursuant to Standing Order No. 79 (Standing Committee on Statutory Instruments, &c.),
    That the draft General Practice Finance Corporation (Increase of Borrowing Powers) Order 1984, which was laid before this House on 14th March, be approved.—[Mr. Garel-Jones.]
    Question agreed to.

  EUROPEAN COMMUNITY DOCUMENTS

    COMMUNITY ROAD HAULAGE QUOTA
    Motion made, and Question put forthwith pursuant to Standing Order No. 80 (Standing Committees on European Community documents),
    That this House takes note of European Community Document No. 7933/83 and of the Department of Transport's Explanatory Memorandum of September 1983 and welcomes the Government's strong support for the proposal.—[Mr. Garel-Jones.]
    Question agreed to.

Alzheimer's Disease
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]
2.22 am
Mr. Richard Holt: One thing that all hon. Members would agree, irrespective of politics, is that we wish each other long and healthy lives. In doing so, we always regard our responsibilities and duties to society.
There is today a slowly growing awareness of a disease called Alzheimer's disease, which was first diagnosed in 1907 and which has taken 75 years to become the subject of comment in the House. Alzheimer's disease is the most common form of dementia. It is incurable and irreversible. Dementia is a progressive decline in the ability to speak, to think, to remember and to learn, with an accompanying loss in the capacity for deliberate actions and movement. A once active and responsible adult will no longer remember his spouse and children, will not be able to maintain even a simple conversation, will become disoriented, even in the familiar surroundings of his home, and completely incontinent. In short, as an adult, he will revert to infancy.
Dementia is not a normal part of the ageing process. Rather, it is a disease with a variety of causes and a wide range of symptoms. The likelihood that an individual will be affected by a dementing disorder increases with age, but this does not mean that it is inevitable.
Alzheimer's disease and stroke-associated or multi-infarct-dementia, which together account for 85 per cent. of all the incurable dementing illnesses, should be diagnosed only after the exclusion, by a series of tests, of other causes of the problem, such as poor nutrition, metabolic disorders, side effects of drugs, chronic alcohol abuse and so on. Diagnosis of AD, with all its catastrophic implications for both sufferer and family, is too often made without adequate investigation.
It is late and we have had a long day, but I would not be doing full justice to the sufferers of Alzheimer's disease, and more importantly to those who will suffer in future, if I did not to some extent underline the problems by referring to case histories. It would, of course be wrong in any way to identify the affected people. In one instance a man aged 38 —Mr. D, a qualified architect with a large well-known company — contemplated group and individual suicide on learning that he had AD. His wife is totally unable to cope with the change in her family life. That is an unusual and rare case, because it affects someone in a younger age group. Normally, the disease is found in older people. Obviously, the greatest stress affects not only the sufferers but their loved ones.
I have a short letter that I wish to place on record. It states:
"I am very sorry but your wife has Alzheimer's Disease. Unfortunately there is no cure. A lot of care will be needed."
A simple statement.
"I had stopped work because I could not cope. My wife had shown a lack of interest in household affairs which was quite out of character. After a few months she lost the ability to carry out the most simple household tasks. Any attempt to teach anew was met with anger and tears. Dressing became very difficult, but when assistance was given, she replied with anger and not thanks. This was very perplexing after years of close relationship.
As the disease had progressed, toilet and bathing became a problem. The use of the toilet was forgotten, and I had to insist on regular visits. When assisting with the removal of clothing
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extreme anger was displayed. The problem is worse when a wife is required to deal with her husband; the stronger and aggressive male usually wins, making the toilet problem a nightmare.
My efforts to see to my wife in the bath were frantically resisted. Hair washing was a particular problem, and rinsing off shampoo was rewarded with screams as the water flowed over her face. This was a very frightening experience and had to be handled with care. Toilet problems were at their worst when away from home. My wife quite often entered the conveniences and refused to allow anyone to help her to use the toilet, usually with disastrous results."
Such events continue until finally the person ebbs away and dies. That report was written not by an emotional, unrealistic person, but by a senior police officer who had to retire from the police force to look after his wife in this sad and demented state.
The cause of this condition is not known. It is only after a person has died, when there is a post-mortem, that it can be shown absolutely for sure that he has suffered from Alzheimer's disease, but the likelihood is that when the symptoms manifest themselves, the person has begun on a course that ultimately results in death.
There is the mild period, followed by the moderate period, followed by the severe period. The average length of life after the disease has been diagnosed is about two and a half to five years. Some people have been known to live longer, but that means that the deteriorating period is more severe and, equally, that the strain on those responsible for the individual's care is even greater.
In Cleveland, in my constituency, we have today a branch of the Alzheimer's Disease Society which is working wonders in providing a form of adult creche to enable those suffering from the dementia to be brought in and looked after on a daily basis, thereby enabling the carers themselves to have time off, for surely when the disease strikes one member of the family it equally strikes another.
I have known of people who have suffered from dementia and have seen for myself how they have deteriorated and died in a most miserable way. Twelve months ago, before I came to this House, I had never heard of Alzheimer's disease and did not know what it was. It has only recently been brought to my attention. During the past week, since my name appeared for an Adjournment debate on the subject, I have been spoken to by many colleagues, some with knowledge of relatives who have suffered and died from Alzheimer's disease, and others who were totally unaware of what the disease was and what its manifestations caused. It is because of that latter group of people that I have taken the opportunity of an Adjournment debate to bring to a wider audience the need for an understanding of it.
Everyone in society today, I believe, understands what multiple sclerosis is and what the initials MS stand for, and can recognise symptoms in people and know the care that is required. Regrettably, there has been far too much confusion historically between the normal ageing process and Alzheimer's disease, to such an extent that we as a society have failed so far to provide sufficient care, to obtain sufficient knowledge, or to do sufficient research into the subject.
I do not make a special plea for additional funds and resources for Alzheimer's disease over and above the many other worthy causes which require as much funding as they can be given, but I urge upon the Government, upon all hon. Members of this House, and upon people beyond this House, a greater understanding and awareness of the problem. It is one which can and will affect as many

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as one in 10 of our population. We have an aging population. Therefore, the manifestations will become greater. It is an incurable disease as things stand at the moment. Research is being carried out and many people are now turning their attention to seeing whether there is any way in which there can be a diagnosis in the first instance and a cure in the second. But until such time as either of those things come to pass, it is incumbent upon us to make sure that all people become more widely aware of the problems of Alzheimer's disease and the associated problems for the people who have to care for those who are suffering from that disease.
2.33 am
The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Patten): I welcome the opportunity presented by my hon. Friend the Member for Langbaurgh (Mr. Holt) to discuss a very important topic of which I think society is becoming increasingly aware. The fact that my hon. Friend has raised the issue on the Adjournment gives me the opportunity, first, to outline the action that the Government are taking in this area; secondly, to indicate some ways in which research is proceeding towards the common goal of us both, the hope of a cure for senile dementia; and, thirdly, to look at the important work being done by voluntary organisations in this field, in particular the work of the Alzheimer's Disease Society. My hon. Friend has a branch of that excellent society in his constituency as I have in mine.
It is important for us all to realise that the disease is not only a dementia; it can also derive from circulatory strokes of one form or another. But, however the dementias are derived, they are all characterised by progressive impairment of the higher brain function, leading to a deterioration in memory, in intellectual function, and in social behaviour. These are some of the things to which my hon. Friend referred in some of the moving extracts in letters from his constituents that he read. There is also deterioration in emotional control and in visual and motor skills. These symptoms are brought about by progressive and irreversible damage to the brain, as my hon. Friend said. Most of us will know from personal family experience—either our own families or those of our friends — and from our constituency postbags how terribly damaging the consequences of this form of dementia can be for the families of those who care, often in the home, for the suffering from Alzheimer's disease. We also know how terribly damaging the consequences can be on the sufferer himself, or, more commonly, herself, because most of the very elderly population are women, as are those looking after the sufferer.
Alzheimer's disease, with other conditions involving senile dementia, is one of the major challenges that we have to face both in the National Health Service and in the social services in the next 20 or 30 years. My hon. Friend will already know that the load of age-related disease has increased enormously, particularly in the past 20 years. For dementia, our best estimate is that the load will continue to increase at about the same rate until the end of the century, when it will probably level off. We shall require a rapid response to a rapidly growing problem.
This problem was not clearly understood or identified until the late 1960s or early 1970s. Since the beginning of
176
the 1970s, there has been a rapid development. Then, most local authorities no longer saw the care of demented people as a task for their residential provision. The new generic social workers of the day similarly put this low among their priorities. In the NHS, mental illness hospitals were providing a growing number of beds for long-stay care of the elderly, but here, too, it was regarded as a routine and rather unwelcome and unstimulating task. The philosophy of the day was that there was not much that could be done for patients who were termed psychogeriatric. All that was needed was the greenhouse philosophy of keeping them well watered, fed and warm until they died. Therefore, they received little medical attention, and the NHS offered little other then long-stay inpatient care.
In the early 1970s things began to improve. Some psychiatrists turned their attention to devoting their care and skill to this group of patients. It became clear that the best form of service was not restricted to those who were receiving inpatient care. Those occupying the beds in hospitals — long-stay residential care — formed only a tiny proportion of those who might be at risk from dementia in its progressive and most disturbing and distressing forms, as was rapidly realised.
The task of the psychogeriatric service today is to provide support and advice to all those in need through domiciliary visits by psychiatrists and community psychiatric nurses and drawing on the help of social service departments, which have taken an increasing interest in these matters.
Since 1979, we have regarded improvements in services for the elderly as a top priority, and, with the help of the Health Advisory Service, we published last year the important document "The Rising Tide". That report was the product of a detailed survey that enabled the HAS to set out models of good practice to be followed by health and local authorities everywhere. To hasten the task of bringing all services up to the level of the best, my noble Friend Lord Trefgarne, who was then Parliamentary Under-Secretary for Health and Social Security, launched what one might call a competition by providing central funds to enable every regional health authority to have a demonstration development district as an example of how to make progress.
There have been some remarkable responses to this challenge. I am happy to tell the House that most districts have put forward to their regional health authorities plans for progress in this area. Many which did not receive the central funding available under the scheme announced by my noble Friend nevertheless have gone forward using their own local funds, and quite rightly, because for too long in the National Health Service we have devoted a disproportionate amount of our expenditure to hospitals. We have not spent enough on the priority groups among other calls on our funds. The elderly, and especially the demented elderly, deserve special consideration.
The plans which have been produced are for local community-based services in which the same teams of professonal staff—social workers as well as NHS staff —can provide care for patients in whatever ways suit the patients best, whether at home, in residential care or in hospitals as the patients' needs change.
It is heartening to be able to say—10 years ago it would not have been possible to report this—that there seems to be no difficulty in interesting able psychiatrists to take up the psychiatry of old age and to accept special

177
responsibility for elderly patients. Equally, psychiatric nursing is becoming an increasingly popular specialty both in the community and in longer-stay frameworks. We welcome that change.
Suddenly, we see a picture where services, albeit imperfectly developed as yet, are beginning to develop to meet the need which is likely to become more pressing over the next 20 or 30 years. There are glimmers of hope. The picture is not dark, and my hon. Friend's speech was full of hope.
Recently, I read a book published by my noble Friend Lord Vaizey entitled "National Health". On page 67 he refers to the problems that society faces from senile dementia. I quote directly from the book, because it is a very important passage. Lord Vaizey writes:
"Senile confusion and dementia are partly the result of other (often undiagnosed) conditions; depression, for example, is often the cause of confusion. Once the primary condition has been treated, the apparent confusion is reduced. There are now also specific pharmaceuticals which will treat directly the process of senile confusion and possibly dementia itself. Thus one of the curses of old age, a sort of gentle and occasionally violent pottiness, is amenable to treatment. So, too, is the other curse, incontinence. Most people are aware that colostomies can be treated by means of a bag, but the use of catheters, which now often lead to infection, will be much improved, as will other techniques. The distress of incontinence may well be substantially alleviated as a result. Thus looking after the elderly will be not only a challenge but also an opportunity, having little to do with 'medicine' itself, as conventionally understood, but a great deal to do with the social arrangements made to cope with their problems."
There is a great deal of truth in what my noble Friend says.
In all this, research is critically important. I am glad to say that the topic of senile dementia is now attracting a good deal of research interest. The Medical Research Council is currently funding research at its brain metabolism unit in Edinburgh, at its neurochemical pharmacology unit in Cambridge and at its cyclotron unit at Hammersmith hospital. If the MRC researchers or some other researchers succeed in future years in unravelling the
178
complicated anomalies of brain chemistry which seem to be at the heart of the problem, it may well be possible to develop some form of remedy, rather as we can already compensate for the chemical deficiencies which cause diabetes. Today that is no more than a hope. Tomorrow, perhaps within the next 10 years, that hope may turn to reality. Meanwhile, less fundamental research can help us to find the best ways of caring for patients.
In that context there is the growing and invaluable work of the Alzheimer's Disease Society, which I am glad that my hon. Friend mentioned. It is a comparatively young body, unlike the disease, but it is doing valuable work, particularly in the counselling and support that it is able to give to families who face this serious problem. It is our duty to do what we can to care for the carers and not simply to leave it to statutory services. I am sure that my hon. Friend will be glad to know that the Alzheimer's Disease Society is one of the bodies which we centrally fund under section 64 of the Health Services and Public Health Act 1968.
I welcome the opportunity that my hon. Friend has given us to discuss this important subject. The name may be new, but the problem is old. It is just that we are now able to identify it much more easily than we were before. The name is not just a new fashion. Research in the past 10 years has made it clear that we are not talking about an inevitable last stage in the human lifespan. We are talking about a disease and the NHS and medical science are searching for cures for such diseases. Senile dementia is not some inevitable progression in the ageing process. It can, should and must eventually be reversible. We must work through research to prevent its ravages and we must in the meantime do all that we can to provide the best care to those who are suffering its ravages now.
Question put and agreed to.
Adjourned accordingly at fourteen minutes to Three o' clock.

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Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Southwell.
The Earl of Inchcape—Took the Oath.

Wrexham: Jobs
Lord Gridley: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many vacancies will be created by the Japanese firm Sharp at their recently proposed site at Llay near Wrexham.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, the Sharp Corporation's development at Wrexham promises to create 630 jobs.
Lord Gridley: My Lords, while congratulating Her Majesty's Government for securing this Japanese investment at a time of unemployment that will help our employment, may I ask whether, in the initial stages of this production, only 25 per cent. of the finished article is allowed in respect of European content and nothing allowed in respect of the content of Britain?
Baroness Young: My Lords, Sharp is establishing at Llay its first European manufacturing base and, as with other Japanese companies and other foreign owned companies, it will want to take full advantage of this facility and the benefits of our membership of the Community. Initially, Sharp will, however import a limited number of kits from Japan; but the company will be positively seeking to increase the local content as quickly as possible. It aims, I understand, to achieve 45 per cent. European value in two to three years.
Lord Cledwyn of Penrhos: My Lords, in addition to the local content to which the noble Baroness has referred, can she give an assurance that local people will be employed in the new plant in view of the very high unemployment rate there?
Baroness Young: My Lords, my understanding is that this development is being greatly welcomed both by the Wrexham district council and the Clwyd county council as a means of helping unemployment in that area.

US Bases and Facilities in UK
2.37 p.m.
Lord Jenkins of Putney: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
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The Question was as follows:
To ask Her Majesty's Government whether the statement made by the Commander in Chief of the US Air Forces in Europe and his staff to the United States Congress (reported at page 225 of the published evidence on Fiscal Year 1983 Military Construction Appropriations) that there are 112 US installations in the United Kingdom including 13 major or large minor installations and another 99 minor locations is true.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, as I told your Lordships on 21st March, Brigadier General Fillmore said that there were
"six major, seven large minor, and an additional 99 locations providing housing, storage, communications and operational support".
As I explained, we have never regarded mere housing estates as US bases. There is therefore no conflict between the figures given by the US General with those for US bases and facilities given on several occasions to your Lordships.
Lord Jenkins of Putney: My Lords, will the noble Lord agree that the difference between us can now be seen to be one of nomenclature only and that if one uses the word "bases", "locations" or, as the Americans say, "installations" one arrives at a figure in excess of 100? Since there is obviously no question of false allegations or plucking figures out of the sky, will the noble Lord perhaps be kind enough to agree that we can leave it at that?
Lord Trefgarne: My Lords, it does appear that the noble Lord and I seem to be approaching a meeting of minds on this matter, and I am happy for that.

NHS: Unemployment
2.39 p.m.
Lord Molloy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether consideration is being given to establishing a committee of inquiry consisting of representatives of the BMA, COHSE, RCN and NUPE and the DHSS to investigate unemployment in the National Health Service.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): No, my Lords.
Lord Molloy: My Lords, are the noble Lord and the person opposite who giggled aware that a whole range of professional people in the National Health Service, from the British Medical Association right the way through to the Confederation of Health Service Employees, will be somewhat distressed by the curt reply that their request will not even be considered by the Government? It was not a demand. It was simply to ask whether this really humane request would be considered. Is the Minister aware that all those I have

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mentioned are concerned about unemployment that extends from grades covered by the Confederation of Health Service Employees right through to the junior doctors and consultants of the BMA, and that they thought this was a reasonable request? Will the Minister ask his right honourable friend whether he will reconsider that curt and abrasive reply?
Lord Glenarthur: My Lords, there was no intention on my part that the Answer should be curt or abrasive. It may have been short, but there is no evidence to suggest that unemployment exists as the noble Lord has described it.
Lord Gisborough: My Lords, can my noble friend say how many people are employed now in the National Health Service, compared with the figure when the Government came to office?
Lord Glenarthur: My Lords, not without notice.
Lord Ennals: My Lords, can the noble Lord say how many doctors and nurses were affected by the 8,000 cut in manpower introduced for the first time ever last year?
Lord Glenarthur: My Lords, manpower targets were introduced to ensure that effective use of manpower resources could be attained and the targets provide for a cut of one-half of 1 per cent. of the total work force by the 31st March 1984; that was 4,800 staff.
Baroness Gaitskell: My Lords, may I say that there is every evidence—
Noble Lords: Question!
Baroness Gaitskell: My Lords, I am so sorry. Is the Minister aware that there is complete evidence about the amount of unemployment in this country, and it is not true to say that there is no evidence about this? I deeply deplore what the Minister has said.
Lord Glenarthur: My Lords, I was talking specifically about employment within the health service.
Lord Ennals: My Lords, does the noble Lord the Minister understand that if one seeks from, for instance, the Royal College of Nursing, the total number of trained nurses who are unemployed, one gets a figure of between 5,000 and 15,000, because they do not know and the department does not know? Is the noble Lord also aware that the Royal College of Nursing would greatly welcome such an inquiry, as I have been assured only today? Why did the Minister give such a negative Answer? Will the noble Lord convey to his right honourable friend the Secretary of State for Social Services the feeling that exists that it is gravely unsatisfactory that we do not know about how many doctors and nurses, available and trained by this country, are not now available for use in the National Health Service?
Lord Glenarthur: My Lords, the fact is that a large number of the charges that are made about
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unemployment among National Health Service doctors and nurses relate to those who are transiently unemployed, either because they do not want to work in a particular area, or because of domestic reasons which particularly affect the largely female workforce in the National Health Service so far as nurses are concerned, of which the noble Lord is fully aware. The latest statistics which are available before registration became voluntary in October 1982, show that in September of that year the number of qualified nurses and midwives registered as unemployed was about 7,057; the number registered as unemployed represented about 2 per cent. only of qualified staff and those in training.
Lord Molloy: My Lords, is the noble Minister aware that it is perfectly true to say that there are some disagreements apropos the extent of unemployment real, and unemployment threatened, right the way through from state enrolled nurses to state certified midwives, junior doctors and consultants? The situation varies from one RHA to another and different figures are being given. Therefore, would the noble Lord agree that the wise thing to do would be to have this inquiry, certainly not for my sake and not so much even for the sake of the associations, but for the sake of the patients and the people who provide and serve our great National Health Service, so that patients will not suffer in future?—which is what will happen if we do not examine the alleged increasing rate of unemployment of all grades in the National Health Service? Could we not reach a sensible agreement to have a national inquiry into the real extent and danger of the situation?
Lord Glenarthur: My Lords, an inquiry would not change the fact that the unemployment to which I have just referred is caused by such things as personal circumstances and, for example, preferences for work in various locations.
Baroness Hornsby-Smith: My Lords, can my noble friend say how many of these nurses (and this equally affects doctors) who come over here to take their training in England, then decide that, rather than returning to increase the services in their own country, as we would hope, they will stay here because of the better facilities, although we did not initially expect them to stay on?
Lord Glenarthur: My Lords, I am afraid that I cannot give my noble friend any figures. There may be some local difficulties about newly qualified nurses, but certainly no serious problems have been brought to the attention of the department.
Lord Avebury: My Lords, can the Minister say how there can be any sensible planning in the National Health Service as regards the intake of people into the training schools, when the Government have no information about the numbers who are at present out of work? It is unsatisfactory for the Minister to say, as he did in answer to an earlier question, that unemployment among female nurses does not matter, simply because they refuse to move into the areas where the work is available. That is a highly sexist comment.
Lord Glenarthur: My Lords, I can assure the noble Lord that it was not meant to be a highly sexist comment. It is a fact that those who are married and who are nurses may not find it convenient to move around the country to take up work in other places.
Lord Molloy: My Lords, this matter is very important to doctors, nurses, midwives and to the patients, about whom 1 hope the Government are concerned. In so far as the Minister has tried but could not, by his own admission, give the necessary facts and figures on the questions that were put to him this afternoon, surely the realistic course to follow would be to engage in a sensible collaboration between all those involved to estimate the real danger of unemployment in this great service?
Lord Glenarthur: My Lords, there is a continuing dialogue among all those to whom the noble Lord referred in his Question, but no inquiry is intended.
Lord Leatherland: My Lords, when the Minister said that there were large numbers of midwives unemployed, does he think that there is anything that Members of this noble House can do to remedy that situation?
Lord Glenarthur: My Lords, I am quite sure that the noble Lord's intervention is one of many interventions that will help all sorts of factors in this country.

Aircraft Operating Safety Requirements
2.48 p.m.
Lord Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what consideration is being given to the possibility of review by the Civil Aviation Authority of the operating safety requirements of aircraft less than 5,700 Kg all up mass, particularly in the case of those aircraft below that weight now capable of carrying up to 19 passengers.
Lord Trefgarne: My Lords, the Civil Aviation Authority is reviewing the flight crew complement required for aircraft with a maximum total weight authorised not exceeding 5,700 kilograms engaged in public transport operations. Any proposals to extend to such aircraft the existing statutory requirements for aircraft above that weight to carry not less than two pilots will be the subject of consultation with the industry.
Lord Beswick: My Lords, I thank the noble Lord for that reply, and particularly for its helpful content. I should like to ask the noble Lord whether there is a case today for relating the safety requirements to the number of passengers rather than to the weight of the aircraft?
Lord Trefgarne: My Lords, that is one point of view which will be taken into account although there are other matters that ought to be considered as well.
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Speaking from my own experience, I think that probably the workload is the important criterion.
Lord Beswick: My Lords, I am much obliged to the noble Lord, and, of course, I value his experience and agree with him that it may be necessary to have two pilots rather than one in the case of an aircraft carrying 19 passengers. When is it likely that there will be a decision taken as regards this matter?
Lord Trefgarne: My Lords, I cannot be precise, but I imagine that it will be within months rather than years.

Dinner
Lord Denham: My Lords, it may be for the convenience of your Lordships if I announce that dinner will be available at the usual time this evening.

Rates Bill
2.50 p.m.
The Minister of State, Department of the Environ-ment (Lord Bellwin): My Lords, I beg to move that this Bill be now read a second time. This Bill is designed to protect and strengthen the position of ratepayers, both domestic and business, in high expenditure and high rating areas. It is about the Government's economic policy. We were elected in 1979 in order to revive the economy, to restore the ability of this country to earn its living in the world, and to cut inflation and taxation by reducing the burden of public spending. We still have some way to go, but we are succeeding.
Let me briefly mention the economic arguments for the Bill. The basic case is straightforward. We cannot afford to relax in our control of public spending. All the pressures are upwards. Local government accounts for no less than a quarter of all public spending. It is therefore such a significant proportion that it must be kept under control, and nobody has seriously questioned that.
Some people have argued that the figures which we are talking about for overspending are too small to matter. They talk disparagingly about an overspend of "only" £770 million—only 4 per cent. But if all programmes were overspent to this extent, the total overspend would be nearly £5 billion. The overspend is not the full story, for in recent years public expenditure plans for local authorities have had to be uplifted by about £1 billion for each of 1982–83 and 1983–84, and by £500 million for 1984–85.
We are told that total local government spending has fallen as a proportion of GDP. Well, yes. But that is because local government capital spending has dramatically collapsed. The problem is—and has all along been—with current spending.
Let us look at the manpower figures. Local government total manpower fell by 4·2 per cent. from June 1979 to June 1983, although some of the high spenders actually increased. Now the overall numbers are on an upward path again. By comparison, Civil Service numbers have been reduced by 13 per cent, in a similar period, with the DoE cutting its staff by a massive 26 per cent.

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When we came into office in 1979 we found that the volume of local authority current spending, then at its highest point ever, was set to rise further by around 6 per cent. over the four years to 1982–83. That was inconsistent with our policy objectives. We asked local government to cut the volume of its current spending in 1981–82 to a level around 5½ per cent. below the outturn for 1978–79—over a period of three years, less than 2 per cent. per annum.
But what happened? Not only was it not cut, but local authorities as a whole actually increased their spending. In 1983–84 local authority budgets ran 4 per cent. above 1978–79 spending in volume terms. In cost terms, taking account of general inflation, the increase is 9 per cent. In cash terms local government is now spending £2½ billion—yes, billion—more than we had planned for at this stage.
Yet these average figures hide what has been happening in individual authorities. The average increase in current spending since 1978–79 has been 86 per cent. But although some authorities have managed to reduce real spending, and more have held it virtually steady, others have made major increases: Islington and Greater Manchester by 105 per cent.; Greenwich by 114 per cent. Hackney by 154 per cent.; and, of course, the GLC, at the top of the list, by 185 per cent.
Year after year our spending plans have had to be revised upwards to allow for overspending. The overspend in 1984–85 is in excess of £850 million. And. most significantly, last year and this 75 per cent. of the budgeted overspend is accounted for by fewer than 20 authorities.
We have not come to this without trying to alter approaches. For four years we tried to rely on the traditional approach of exhortation and local democratic accountability. Goodness knows, we tried. We introduced a new grant system which made high levels of spending more expensive. We introduced a specific system of targets, so that authorities should know exactly what was required of them, and grant penalties for overspending them. We even proposed that there should be a system of town polls so that local electors could decide whether they wanted to support a particular level of rate. But that was not acceptable to Parliament.
However, although there have been successes as a result of these changes, the big spenders have simply carried on spending and put the resulting load on to their ratepayers. This could not continue. The figures speak for themselves. For simplicity, I am using 1983–84 figures to avoid confusion. Between 1979 and 1983 domestic rates increased by 91 per cent. compared with a 55 per cent. increase in the RPI.
I hope that no one will say that that is because of grant percentage reductions. We did not see that effect when they were reduced in the past, and the harsh fact is that if authorities had met their targets, then rates would have gone up by less than the rate of inflation in each of the last four years. Even within the overall figures, in 10 authorities rates have gone up by more than 145 per cent. since 1979–80. The GLC rate rocketed by 118 per cent. in just two years. In inner London in 1983–84 the average borough rate was 52½P in the pound. Yet in Camden it was 78p, in Islington
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94p, in Greenwich 99p and in Southwark 116p. The figure for Lambeth was 91p, but for adjoining Wandsworth it was 20p—some difference!
In Leeds we used to be proud that we had the lowest rates of any major city in the country, and a high level of services too. In Leeds, now under Labour, the number of committees and sub-committees has rocketed, decisions take longer to obtain, the number of staff—not manuals or teachers—has gone up by more than 500 and inevitably (need I say it?) the rates have more than doubled, but the services are not better.
There are those who say that rates on industry do not matter—that they are a small part of turnover or whatever. Frankly, I find remarkable the attempt by some to minimise the impact of rates on industry and commerce, Those people should get out into the real world and talk to those who actually have to pay. They will tell you that rates can make the difference between staying in business and going out of it. That is the message that I hear from the CBI, from chambers of commerce, and particularly from individual businessmen in areas like Sheffield, where rates per employee in industry have gone up between 1979 and 1983 from £255 to £787. Just think what that does to their competitive ability. Is it any wonder that firms are queuing up to leave Sheffield?
I could quote a long list of examples to illustrate the effect of high rates, and if necessary I shall do so later in the debate. Meanwhile, for the moment, I offer just one. The London Chamber of Commerce and Industry trend survey last year said that one in six companies said that they had relocated in the last five years because of high rate increases or the promise of lower rates elsewhere.
To stand on the high ground and say, in the face of all this, that rates do not matter is an insult to the intelligence. Something has to be done to counter-balance the lack of accountability, especially in the small number of irresponsible authorities whose activities I have illustrated.
Part I of the Bill provides for the selective rate limitation scheme. This is the scheme which we believe is needed urgently. It enables the Secretary of State, on criteria which he will have to report to the other place, to designate authorities which are spending excessively, and, after designating them, to propose expenditure levels for them. We shall doubtless debate at later stages what the criteria will be. They will depend on local authorities' budgets for the given year. But they must be drawn up on general principles applicable to all authorities in a class. That is a safeguard against arbitrary selection.
In another place my right honourable friend the Secretary of State has illustrated the kind of criteria which we believe will be appropriate. They are likely to involve the use of grant-related expenditure (GRE) levels, which assess the cost of providing a standard level of service, and are therefore a good way of comparing the spending of different authorities. Let me say at once that it is not a precise basis for assessment, but we are talking only of those spending far, far above it, and so this means that the GRE is a perfectly valid figure to use.
We may, additionally, use a comparison with an authority's expenditure target, or some other relevant

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measures. We have made it clear—and I want to put it on the record here again—that we intend to select only between about 12 and 20 of the highest spenders. Once expenditure levels are proposed for selected authorities, they can argue for a higher figure in the light of their particular circumstances. Once an expenditure level is finally fixed, and after the rate support grant settlement, the Secretary of State will set an upper limit on the rates or precept which these authorities can levy.
Let me hasten to add that, contrary to the dreadful distortions in the campaign advertisements and the wild stories put out by our opponents, this will not interfere with how the money is spent. As ever priorities, deciding on what resources are spent, will be for the authority to decide. Only the total overall expenditure will be constrained, and I think that really does need highlighting. Where authorities disagree with the rate limit set, then the Secretary of State must seek the approval of the House of Commons by means of an affirmative resolution order. That is a very genuine safeguard.
The Bill provides that authorities can only be selected for rate limitation if they are excessive spenders. Authorities will be exempt from the selective scheme if their expenditure is less than £10 million a year, or below GRE. The figure of £10 million may be increased, but not reduced, by parliamentary order. These are major and very important exclusions. They are much misunderstood and have been played down by the opponents of the Bill. If the Bill had been in operation in 1983–84 they would automatically have excluded 355 out of the 458 authorities in England and Wales—about three-quarters. That means that all but 16 members of the ADC would be automatically exempted. Yet how often do I hear representatives of tiny authorities, spending £3 million or £4 million a year, worrying about being rate capped!
My Lords, some say that the Bill will not work. Others actually say that there will be increases in public spending as a result of the Bill. That really is nonsense. By this Bill we are restricting the spending of the highest spending authorities. There will therefore inevitably be a reduction in the amount of public expenditure. Even now, before enactment, the Bill is working. Look at the rate decisions being made for 1984–85. The average rate increase will be less than 6 per cent., the lowest for 10 years. That shows what can be done.
We have demonstrated that on certain reasonable assumptions local government current spending in 1983–84 could have been £350 million lower in that year if selective rate limitation had then been in operation. The savings could be even greater because of the shadow effect on authorities who are not selected and who wish to avoid possible selection in the future.
I totally reject the claims that this level of savings will mean cutting into the provision of essential services. The expenditure levels will be reasonable and there is always what I call the third option. Those particular authorities who will be affected are, by definition, the big spenders. Overall they have made no cuts in the past. They have actually added
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staff—great numbers of them in some cases. So for them especially it is not just a choice between high rates and cuts in services; millions of pounds can be saved by cutting out waste, reducing restrictive practices and improving efficiency, but the will has to be there.
The authorities selected will be those spending so far above the level of other authorities that savings must be available. Of course, we recognise the needs of many of these authorities. That is why their GREs are high, reflecting those needs. But their spending is out of all proportion. They need to increase their efficiency of operation. For example, why should the cost of refuse collection in Hackney be more than twice as much as in Wandsworth? If 22 authorites can put their refuse collection or cleansing services out to tender, and save £35 million, why cannot others follow their example? Let no one doubt but that the opportunities are enormous and nowhere more so than in the high spending authorities.
I would now like to turn to Part II of the Bill, which provides for the general rate limitation scheme. I emphasise, first, that the Government hope that Part II will never have to be used. I am confident that the selective scheme, combined with the existing system of block grant, targets and the other pressures on spending, will ensure that local government spending will come much more closely into line. I cannot stress too much that these are reserve powers.
However, the selective scheme is designed to deal with present circumstances. The situation could change. A number of local Labour councils are now in the hands of extremists. Their influence and numbers are growing, and there is no will or ability among the national leadership to curb them.
Several noble Lords: Oh!
Lord Bellwin: I am quite prepared to sit down if any noble Lord wishes to stand up. What if the present irresponsible behaviour of the few spread to 60, 80 or 100 authorities? It is that kind of circumstance for which Part II is designed. It would be disastrous if we had to come back to Parliament for a whole new Bill, with the time delay that would be involved, before we could then take effective action.
That is why Part II is in the Bill. It intensifies the pressure on non-selected authorities for moderation, and acts as a deterrent against wider overspending. And, my Lords, to put it quite simply, the general scheme is complementary to the selective scheme, and I believe it is the straightforward thing to do, to put the package as a whole before Parliament.
Even so, it is right that powerful safeguards are built into the general scheme. It could only be introduced after affirmative resolution approval by both Houses of Parliament. There would have to be a full and extensive debate and approval in each House. The Bill also provides that the local authority associations must be consulted before introduction of the general scheme. The Government would not then be given these wide powers unless they had made a very good case for them. Further, we have provided for the possibility of exemptions. At present the Bill simply says that authorities spending below a prescribed amount could be exempted. But we intend to go further.

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My Lords, this Bill is about curbing the high and irresponsible spenders—those with bad records. It is not meant for those who try and who, in the main, succeed in running their affairs responsibly. The Secretary of State has undertaken that we will provide for this in the Bill. It will give me great pleasure in due course to give details of what we propose. But I can tell your Lordships that we have accepted the principle that those with an established record of meeting the guidelines set for them will be expressly excluded from the operation even of the general scheme.
I know that voluntary organisations are concerned about our proposals. They fear that authorities who are rate capped might have to cut their support for voluntary work. This Government strongly believe in the work of the voluntary sector. This is why Section 64 grants by central government to the voluntary sector have been doubled in three years. Any authority that is rate capped will only be so because it is spending way above any reasonable level. It will have plenty of scope for reducing its spending. There need be no risk to sensible levels of spending on voluntary services, unless of course they deliberately want to make it so.
As I have said, even under rate capping, decisions about priorities will remain a responsibility of local councillors. When the chips are down, I simply do not believe they will sacrifice genuine voluntary work—whose value everyone acknowledges—in order to carry on with their high spending nonsenses; certainly they will not need to do so.
Part III of the Bill deals with reforms of the rating system. They are less controversial, but they are not unimportant. They will help business, by giving them a statutory right to be consulted about rate levels, and all will have the new right to pay their rates by instalments. Domestic ratepayers who do not now receive rate demands, such as council tenants, will receive specific information about the amount of their rates going to different authorities, and information to help them judge the performance of their local authorities.
My Lords, as I come towards the end, let me touch on the constitutional position. It is referred to in the amendment and I will come back to it, but for now let me say just this. This Bill is not unconstitutional and authoritarian. If anything is unconstitutional, it is the behaviour of the minority of councils at whom this Bill is directed.
Local authorities are not sovereign governments. They are creatures of statute. There was a convention in the past that local government would manage its affairs within the broad guidelines established by central government and approved by Parliament. One way or another, local government always managed this in the past. That constitutional convention is breaking down. A minority of authorities flatly refuse to accept it. It has only happened since 1979 and it has become more marked with the taking over of some Labour councils by the hard left. It is in these last five years that we have seen the rapidly growing deterioration of established conventions. This Bill will restore by statute the position which hitherto has rested on convention.
The present collapse of the convention is spectacularly highlighted by the abuse of Sections 137 and 142 monies, which permit wide discretion in spending. Yet lavish pouring out of millions—I repeat,
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millions—on left wing so-called newspapers, on huge advertisements, on propaganda and campaigns, is somehow justified by talk of "the right to explain policies"; and this from councils which claim they have insufficient funds to provide essential services. The propaganda is full of wicked and sinister distortion. The millions involved is an outrage to all sense of reasonableness; it is an insult to the reputation which local government properly claimed in the past.
I refute entirely this charge of constitutional change. We are doing nothing more nor less than protecting the ratepayers, and the Government's overall position on public spending. We are doing what must be done, precisely as we promised in our general election manifesto.
We accept that should Part II of the Bill ever come to be implemented—and we hope it will not—that would mark a change in the relations between central and local government. But it is a long leap from that point, to say that such a change is unconstitutional. We do not have a written constitution; it is a feature of our constitution that it evolves, and Parliament oversees the process. Surely, no one can argue that we can never properly make these changes, regardless of the consequences of inaction or the damage which is being done to other aspects of the constitution? Some argue, and I agree, that because we do not have a written constitution, extra care should be exercised in making changes. This Bill follows four years of strenuous effort to achieve the Government's policy by all other means, short of intervening in this way. We have not rushed into this; but it is now necessary.
The Bill has been fully discussed in another place. There were no fewer than 30 Committee sittings. Yes, there was a guillotine, because of deliberate Opposition time-wasting.
Noble Lords: Oh!
Lord Bellwin: My Lords, I hear the moans, but let me just say that one Member alone spoke to one point for no fewer than four and a half hours.
The amendment suggests a review. That always sounds reasonable. But it would take time that we have not got. The problem is with us now. Let me not sound negative. As the Secretary of State has said, never say never again! But is there a genuine likelihood of any review finding a solution for the immediate—I say again, immediate—problem which faces us?
We will doubtless be told of those who oppose the Bill. But you may be assured that there is no shortage of support for it. Industry is in favour; chambers of commerce favour it; and above all, the people, the ratepayers and taxpayers—those who actually pay—favour it!
Noble Lords: Oh!
Lord Bellwin: You will all have your turn, my Lords, in due course. I am sure. With 40 speakers the list is very impressive.
As I finish, many people have asked me if, with my ingrained local government background, I am personally in favour of the Bill. I will be frank. I deeply regret the necessity for these measures. They should

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not have been needed. We promised to act, we said precisely what we would do, and the majority for action in the country, 10 months ago, was massive. The final majority for it in another place was an overwhelming 125. So yes, I do support these measures, reluctantly, but unequivocally and wholeheartedly. I ask your Lordships to do the same, and to give the Bill a Second Reading.
Moved, That the Bill be now read a second time.—(Lord Bellwin.)
3.15 p.m.
Baroness Birk: My Lords, I beg to move the amendment standing in my name on the Order Paper. The amendment reads, at the end of the Motion to insert:
"but this House believes that it will result in damaging constitutional changes in the relationship between central and local government, will undermine the authority and responsibility of local councillors and will gravely weaken local democracy and accordingly calls upon Her Majesty's Government to embark on a thorough reform of local government finance."
Before I start my speech may I say how much I am looking forward to the maiden speech of my very old and noble friend Lord Bottomley.
The Minister, if I may say so without sounding patronising, did an extremely good job on a very sticky wicket. He managed to surmount the quite natural reaction to much of what he was saying. The doubt I have about it, apart from the substance of the Bill and the speech, is that it seemed to me that what he was dealing with was much more the detail of what is being proposed than the fundamental changes in the relationship between central and local government which are proposed by the Bill. In our view, and also in the view of many outside this House this change represents a weakening of the principles which have guided the development of local government and which have been maintained by Parliament over the years. Parliament and local government have evolved together over the centuries as parts of our democratic system for involving people in their own governance. Up to now each local authority has had the right and the duty to decide its own expenditure and the level of taxation to maintain that expenditure. For this the local authority has always been answerable to its electorate. It is something of which we in this country feel very proud.
It has never been Parliament's intention that local authorities should spend what central government decide. If it had, they would not have been given the right to tax, but a grant, as health authorities are given a grant. However, local authorities, unlike health authorities are elected. They have always varied in their choice of how much to spend, and on what. In the new-found jargon there has always been overspending and underspending, if by that is meant that there are authorities spending more or less than central government would have chosen. But that is the role of local government where each authority makes its own decisions on its level of expenditure.
The Government propose to restrict that right. That is the fundamental change. Restrict that right and one restricts the right of the local electorate to make their own choice on the level of services for which they are willing to pay. If the Government are concerned about
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the length of time before the electorate can express itself, the way to go about that is to decide to have more frequent elections, even having annual elections, so that the electorate can speak more frequently.
The local electorate will, in effect, only be able to vote for choices of which central government approves, and local authorities will be accountable to their electorates for decisions that are not of their own making. Survey evidence produced by the Institute of Economic Affairs in 1979 showed that 63 per cent. of the population are opposed to a reduction in rates if that means fewer services. It will be said that the change is not fundamental because the powers will be used against only a few authorities. The Minister stressed that point. Therefore, it has been widely asked, particularly in another place, why the general powers are in the Bill.
The fundamental change is that those powers, whether selective or general, should be used against any authorities. Breach that principle and the door is open to endless extension. If in principle the powers can be used against 18 authorities, there is nothing in principle against their being used against 38 or 58 or 78 or 278 authorities. Indeed, in another place in Committee, the Government, in answer to questions which became almost like a Dutch auction, refused to give any number at which they considered that one should then say, "Stop!". The powers were open, even on the selective part. Once powers conceded in central local relations are extended, there will always be a crisis to justify that extension. Breach the principle and the powers certainly will be used.
When Parliament passed the Local Government, Planning and Land Act in 1980, targets and penalties were never even mentioned. I think that targets were considered to be what one shot at in target practice, and penalties were what one had on a football field. Yet, within six months, they were announced by the Secretary of State; and each year they have grown in extent and severity. Nobody envisaged when that Act was passed that within three years a local authority spending 9 per cent. above target could be in danger of losing all its grant. What matters is not what Ministers say that they will do, but what the legislation gives them power to do.
Our amendment describes the change as having damaging constitutional consequences. The issue is a constitutional one. Indeed, the Secretary of State himself has recognised this. If Part II raises constitutional problems then so does Part I because it raises the same issues but on a selective basis. Yet the selective scheme can be as general as the Secretary of State wishes to make it and the general scheme can be as selective as he decrees. The Minister said—and, by the way he used his voice, emphasised—that the general powers are there only as a reserve. I think that I have shown (and it is very easy to see and understand) that there really is no demarcation line between these two propositions.
The constitution is involved because the Bill changes the relationship between the only elected bodies in this country, Parliament and the local authorities. To say that an issue is constitutional does not mean that a change should never be made; but it should be made only with great care, great deliberation and great trepidation; and, too, only when a very

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strong case has been made out. This supersedes any manifesto commitment. That case has not been made. The fact that one authority here and another authority there spend more than the Government want them to spend is not a case for a change of this tremendous sort. This is not something that should be dealt with in political terms—and I hesitate to say it—in almost a trivial way. We are talking about constitutional issues. We are not talking about what X did here and Y did there. There are other ways of dealing with that, as I shall suggest.
Because the case has not been made, so many of the Government's own Back-Benchers in another place, including an ex-Prime Minister and a former Conservative Secretary of State for the Environment, have condemned this Bill in terms which make the amendment I am moving almost complimentary. At different times the Conservative Secretary of State, the right honourable Michael Heseltine, Mr King and the present Secretary of State are on record as supporting, with a certain amount of passion, the autonomy and the necessity of the autonomy of local authorities.
Further, the Bill has united local authority associations in an unprecedented degree of critical co-operation which reflects the deep despair of their constituent parts—be they metropolitan authorities, district councils or country councils—who all support the amendment. Indeed, today the Leader of the Association of County Councils, Mr Lewis Moss, has said that the amendment is not sponsored by the ACC. I quote:
"The wording accords with our policy and therefore the ACC hopes that Members of the House of Lords will support it".
The White Paper (Cmnd. Paper 9008) which preceded this Bill stated:
"We live in a unitary and not a federal state. Although local authorities are responsible to their electorates, they derive their powers from Parliament".
In a unitary state Parliament has provided for a division of powers. In federal countries and in unitary states with a written constitution, that diffusion of power is protected. Without a written constitution Parliament must be the safeguard against undue concentration of power. This centralising concept comes, strangely enough, from a Conservative Party which has departed drastically from traditional Tory principles—a departure which will have Disraeli, Salisbury and many other past keepers of the Tory conscience turning incredulously in their graves. The noble and learned Lord who normally sits on the Woolsack seemed to me to touch very much on this point in his Dimbleby lecture, the "Dilemma of Democracy" when he referred to elected dictatorship.
The unitary state argument does not make the case for the Bill. Rather, it reinforces the need for caution. What then is the case? The Government argued, as did the Minister most strongly, on economic grounds. But that case has never been satisfactorily made out. Local Government expenditure is not out of control. It represents today only 25 per cent. of public expenditure; whereas 10 years ago it was 30 per cent. It is central Government expenditure which is increasing, not local government expenditure. The alleged overspend in 1983–84 was £770 million or about 3 per cent. Such a degree of overspend in the context of total economic management is
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insignificant. It is only 0.6 per cent. of public spending. That degree of overspend is less than in any year since the present block grant system was introduced in 1980; and there would not have been that degree of overspend had their not been serious consecutive cuts in Government grant to local authorities.
In any event, local government expediture does not affect the public sector borrowing requirement. Unlike central Government, local government expenditure has to be covered by income; so that local authorities cannot budget for a deficit and therefore there is a negligible inflationary effect. Indeed, if such powers were important to the management of the economy, one would expect the economies of federal countries like Germany to be unmanageable since, by definition, such powers are not available to them. But, of course, they are not. The Government argue that there is a weakness in local accountability. Many pay rates who do not vote and many vote who do not pay rates. Not only is this a massive attack on the principle of universal suffrage, but what it proposes does nothing to strengthen local accountability. Rather, it weakens it. Local authorities will be accountable at local elections not for their own decisions but for the Secretary of State's decisions. That creates a confusion at the heart of local accountability. Faced with a weakness in local democracy, the proper response is not to weaken it further but to strengthen it.
I must tell the Minister that he is absolutely wrong if he thinks that those of us on these Benches, or I think anywhere in the House, take the view that "Rates don't matter". We believe that they do matter. This is why we believe that what is required is a reform of local government finance that will widen the tax base of local authorities. It may well be that governments of both main parties neglected too readily the findings of the Layfield Committee. The issues involved are too important for both sides of the House not to admit that mistakes have been made. It is no part of our case that all is well in local government finance. This is the fifth Bill introduced into Parliament in four years on this matter. There have been eight different systems of grant and local government finance in that short period. This very instability is a measure of the gravity of the problem. What is required is not yet more ill-thought-out legislation but to find a new basis for local government finance.
Obviously, we should all be concerned about the effects of the proposals on the services provided by local government. The proposals are bound to mean a reduction in those services. In spite of what the noble Lord the Minister said, and with great respect, while he may believe that himself, the situation is impossible; the finance, the statistics and the economics make it completely impossible if, without its being amended to a very great extent, the Government carry out what they want to do. I repeat, the proposals are bound to mean a reduction in those services. The White Paper on Public Expenditure shows that the Government are seeking a reduction of over 10 per cent., which cannot be obtained from a few authorities alone. This is why the Government want the general powers in hand. Nor can reductions of that order be achieved without cruel cuts in services. Inevitably home-help, teachers, highways maintenance, libraries, help for the elderly, the young and many other services must be cut back.

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Furthermore, because certain statutory services have to be protected such as police and fire services and debt charges, those cuts will inevitably fall most harshly on discretionary services such as contributions to voluntary bodies which will affect the survival of many organisations with which many noble Lords are closely involved.
It is no good the noble Lord the Minister giving us his goodwill and his promise that it will not affect the voluntary services—it will. The voluntary organisations know this. Many have written to noble Lords in this House. They are not affiliated to the Labour Party; many have no great love for it, but are deeply concerned about the future of their own voluntary bodies. Expenditure on the arts, in which many Members of this House are keenly interested, is always on the hit list in thin times and will suffer another devastating blow from the effects of this Bill.
The Opposition could have opposed the Second Reading. Those outside this Chamber find it hard to accept that we are not rejecting the Bill entirely. It is a constitutional Bill. This House is the guardian of our constitution. Yet it is also a constitutional convention that we do not exercise our full parliamentary powers on the Second Reading of a Government Bill, especially if it appeared in the manifesto. On the other hand, it is unique for a manifesto commitment to be so strongly opposed by the Government's own supporters. One of the reasons why I feel so strongly about it is that one of the most important ingredients in the quality of local government is the calibre of the people prepared to stand for election. This House is peopled by noble Lords who have served for many, many years on local authorities all over the country. The Bill will weaken the authority and responsibility of local councillors and talented, able people will not be prepared to become involved with local government if they are to be only the agents of Whitehall.
My Lords, the noble Lord the Minister referred to local authorities as creatures of statute. I find that a rather offensive remark about local authorities. They are elected bodies, and the councillors representing them are people acting in the best interests, as they see them, of their local authorities. They do not like to feel they are impersonal creatures of statute, but rather that they are men and women doing their best in communal work. The 1971 Conservative White Paper on Local Government Reorganisation recognised the need for a vigorous local democracy. I quote:
"… a genuine local democracy implies that decisions should be taken—and should be seen to be taken—as locally as possible."
We have moved a long way away from that.
My Lords, the Opposition are going to respect the convention. Our amendment does not deny the Bill a Second Reading, neither does it even delay the Bill. The amendment conserves a careful and strict regard to the conventions of this House. However, the conventions do not require this Chamber to remain silent on issues that are of grave concern in this House, another place, and even beyond. As we have always said from every Bench, this House is a guardian of our rights, constitution and civil liberties—and also the speed with which things are done in another place. Indeed, if this House were to agree to the Second
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Reading without giving expression to those views, it would be failing gravely in its responsibilities not only to the House itself, but to the other place and to the country at large. Our amendment is expressed in very moderate terms, but its whole purpose is to sound a note of admonitory caution to the Government. By its very nature, your Lordships' House has a duty to do that, otherwise it will be failing in its historic task. We hope the Government will accept this and will listen to the many voices among their friends in local government who are expressing such grave concern.
Finally, my Lords, I know the Alliance stands with us on the amendment. I hope that Cross-Benchers who have a wide variety of experience in this and every other sphere will also join us, as I hope will the bishops who have great experience of social problems. I ask Government supporters to respect their consciences to remember the real traditions of the Tory party, and, some of them at any rate, to join us in the Division Lobby. I beg to move.
Moved, as an amendment to the Motion, That the Bill be now read a second time,—at the end to insert: "but this House believes that it will result in damaging constitutional changes in the relationship between central and local government, will undermine the authority and responsibility of local councillors and will gravely weaken local democracy and accordingly calls upon Her Majesty's Government to embark on a thorough reform of local government finance." —(Baroness Birk.)
3.36 p.m.
Baroness Stedman: My Lords, from these Benches we would like to thank the noble Lord, Lord Bellwin, for his introduction of the Bill, but to reflect that he has done nothing to assuage our fears or to quell our apprehensions about it and we will have no fears at all about going into the Lobby tonight in support of the amendment.
My Lords, this Bill does nothing at all to redress the failure of Government to solve the problem of local government finance. The Bill deals with the balance of power between local and central Government and it overweights that balance in favour of central Government. If confers much too great a power on the Secretary of State, because it will be within his discretion to determine what are the criteria for action to be taken. If, as many Ministers have said, the general powers would be invoked only in extreme cases, why, then, have them in the Bill at all? Why cannot the Minister come to both Houses of Parliament and ask for powers if he needs them in extreme cases? But even if that part of the Bill were given up, the Minister could still abuse the whole of local government finance. It is the basic principle that is in question.
My Lords, this Bill seeks to limit the rights of local authorities to decide on and set the local rates. According to the Secretary of State under selected powers in Part I, some 12 to 20 authorities would be subject to Government control of rates. But this is not what is said in the Bill. There is no limit to the number of selected authorities, apart from the £10 million small budget exclusion for most district councils. If this Bill is in force for long, since that £10 million is

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enshrined in statute, within a year or two, on inflation alone, many more districts will find themselves capped unless the Minister is willing to put the appropriate increase order before the House.
My Lords, under the general powers all authorities could have their rates directly controlled from Marsham Street. Whatever the noble Lord, Lord Bellwin, may say, this is a fundamental constitution change. Parliament has established local authorities with the right to decide on and levy their own rates. This tax is used to finance policies decided by democractically elected local authorities after they have given full consideration to their local problems. By attempting to take such wide-ranging powers, the Government are concentrating political power to an almost exceptional degree. We do live in a unitary state, but until now there has been a conscious dispersal of power. It is this diffusion of power which is both a value and a safeguard. Parliament should hesitate before concentrating greater power in central Government; and the sweeping away of the freedom of local authorities to prepare their own budgets and to levy their own rates merely because they do not accord with the Government's views focuses on the real danger of that kind of centralisation.
On these Benches we do not condone the excessive spending of a few authorities, but the fact remains that every authority is different and has different problems. It is at least interesting that seven out of the ten authorities in the analysis, prepared by the Department of the Environment Inner Cities Directorate, of the most deprived authorities in the country are now likely to be rate capped, making their deprivation even worse. The Secretary of State has said that if this Bill were operative today some £200 million would be saved by rate capping. The noble Lord, Lord Bellwin, I am sure, will tell us that that is a lot of money; but out of a total of £12 billion rate expenditure, and taking the total national expenditure of £126 billion, this really is a sledgehammer to crack a nut. The criteria for rate capping must be clearly defined in the legislation. Just to have a reserve power is not good enough. I do not deny that the present Ministers may have good intentions, but if we are to legislate then we must legislate for restraints on a bad Minister who might use his powers much more unwisely in the future.
The Government are taking away from local government the right to levy the rate which it, and not Parliament, considers necessary to carry out its statutory obligations. The expenditure of local government must be justified by its statutory functions, and that right of local government has existed for nearly 400 years. The only real freedom that local government has is its power under Section 137 of the Local Government Act 1972. The powers accruing to a Secretary of State under this Bill amount to an unprecedented increase in central Government power at the expense of the authority at present wielded by local councillors. These ministerial powers not only relate to the global expenditure of a local authority but they also allow direct interference by the Minister in the day-to-day running of the council.
These proposals have been overwhelmingly condemned by the three associations as a fundamental constitutional threat. The link is being broken between
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the responsibility for the provision of services and the accountability to the local community through the ballot box. No longer will local government be an instrument of local choice for experimentation and for initiative, responsive to local needs. I say again that we do not support the policies of the high spending authorities, but the record of local government overall does not warrant the draconian powers that are being taken under this Bill. Is not the real reason for the Bill the fact that the Government raised expectations about the abolition of domestic rates and later about the reform of local government finance, and it is because the Government have been either unwilling or unable properly to reform local government finance that we have had this Bill foisted upon us? What we need is not piecemeal interference in local government's powers and finance: we want to have a long, cool look at the functions we require local government to carry out, at what is the best structure to do the job, and at how best it can be financed. We might then make a proper assessment of any reorganisation that is necessary.
There have already been numerous grant systems, and in this House we spend hours and days arguing about GREA (grant-related expenditure assessment), clawback, tapers, multipliers, triggers, waivers and penalties. The local authorities were promised that the then hold-back and penalty systems would affect only a few councils, and yet the ACC tells us that this year 23 of their 37 members are affected, and next year all their members could be.
Many of us were suspicious when GREA first raised its head. The Ministers opposite asserted that it was just a test of an authority's need to spend, and they admitted that it was a rough form of justice and would be used only as a means of helping to allocate grant, and not to control expenditure. Past Governments have created the present situation by inflating the grants over the years, and now that the grants are less the rates have to rise. Some authorities overspend very much, but that should not mean that every authority must suffer. Does the Minister not accept that local government is in the mess that it is today because up to 1974 Governments had an expansion of grants, thus making local authorities less accountable to their ratepayers?
A previous Act reduced the target and penalty systems, and in this Bill we have yet another weapon with which local authorities can be taxed on their expenditure. A colleague of mine commented in another place:
"We understand that the Government feel that they need belt and braces, but to require a stout piece of string as well seems to be going rather far".
Even if we persuade the Government to withdraw the general powers in Part II, that does not save an increasing number of authorities from being penalised under Part I, unless the Government are willing to write in a limit to the list of 20 authorities. As the Bill stands one could argue that the reserve powers are not necessary, but if they are removed it does not save more than the 20 high spenders from being capped. This is precisely what happened under targeting in the Local Government Finance Act. It was said then that only a handful of authorities would be affected; yet now, in 1984, that handful has reached 150.

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What will be the criteria for rate capping? In another place the Secretary of State produced a table of 11 possible circumstances, or combinations of circumstances, and he also said, in col. 218 on 27th March in another place:
"We shall eventually choose the criteria for those principles in the light of the most up-to-date information".
This is much too open-ended. The list may or may not be used; the principles can be changed by a Secretary of State at any time, and new principles can be invented. Every local authority faces different problems, different issues, different concerns, and has a different political make-up. Rate capping is supposed to reduce Government spending to what the Secretary of State considers reasonable. What is not clearly stated is whether the GREA or target is what he considers reasonable. How did the Government arrive at targets? GREA we can understand, but what yardstick or formula has been used to work out the target for each authority? Was it, as many of us suspect, a purely arbitrary figure for each authority? We cannot accept arbitrary criteria. Local authorities have a right to know how the targets are assessed and the Government have a duty to make their reasons easily understandable.
What will be the criteria against which an authority will be judged? How will the target figure be arrived at? How will the Government arrive at a figure which denotes excessive overspending? What account will be taken of how much of that expenditure is on-going from previous years' decisions on capital spending, probably at the Government's behest? There must be consistent and understandable rules for setting the targets. We cannot depend on the arbitrary whims of the Secretary of State, or indeed of any Secretary of State. We all helped to create the precedent under the 1980 Act of the Secretary of State interfering in local government, and I remember the late Lord Greenwood saying then that if any Secretary of State wanted a precedent for interfering in local government then the Secretary of State at that time had given him the fullest scope.
The Secretary of State has said that central Government power must be invoked to protect ratepayers against extravagant, overspending authorities. It seems monstrous to me that any authority spending far below GREA should be liable to grant penalty yet that is what is happening in my county of Cambridgeshire, which is slightly over target. So let us spend a little time looking at Cambridgeshire, which is illustrative of many county councils today.
In 1984–85 their GREA exceeds the budget by 3·5 per cent. If they were to spend up to GREA—what the Government deem to be fair expenditure per capita on the statutory services—they would have to spend £7·1 million more, which would then result in a grant penalty of £28·5 million and a rate of 177p instead of the agreed 142p. Incidentally, that 142p includes 50p which is directly attributable to changes in Government grant. Their target for 1984–85 is £ 194·5 million. Their GREA exceeds it by £11 million, and yet to get to target in 1984–85 the budget would have had to be cut by a further 2 per cent. or £3·9 million. If these cuts had been made across the board, it would have meant a job loss of 275 and a cut of £3·9 million.
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In 1985–86 Cambridgeshire expect to be 4 per cent. over target on present trends. That would mean double the losses and double the cuts and, since teachers cannot be made redundant under a year, the major service cuts could not realistically be planned before 1985–86. My county council have acted responsibly and have planned their expenditure to meet their statutory obligations, the established norm and the Government's standards in other services. Yet by spending more than their target they could lose £4·5 million in penalties and in 1984–85, if they were to spend to GREA, they would lose £28·5 million in grant.
It is 10 years since I came to your Lordships' House and Cambridgeshire were adjusting their budgets then. They have been doing so ever since and every year there is less room for manoeuvre. The only decisions left to them now are the really hard ones which directly affect the quality and the quantity of services. As I said, they are well below GREA but just a little over the target, and to get to that figure this year they made cuts and savings amounting to over £1 million and used £800,000 from interest earned on their balances. There is now nothing left to cut. If the Government continue with their obsession with targets, then they must be realistic, take account of the persistently low spenders and make sure that some allowances are made for past performance and that they are not penalised.
The targets seem to be based on past spending, and thus they punish low spending authorities like Cambridgeshire who, for the past 10 years, have been doing exactly what the Government have asked them to do. Present spending plans could mean that the rates would go up from 142p today to 182p by 1986–87, and yet only 2p of that would be due to new spending. I do not think that Cambridgeshire object to a fair reduction of grant, and they would play their part in further reductions when the other authorities had matched their existing achievement. But the council, who are Conservative controlled, have announced that they will not voluntarily reduce expenditure simply to make good the inability of Government to bring down the high spenders.
Why cannot the Government see how unfair it is to penalise the low-spending shire counties, in order to keep within the global sum allowed to the DoE by the Treasury? What they are doing is penalising the low spenders to pay for the high spending of some other authorities. In a sense, this is not a Department of the Environment problem but is one for Government. The Treasury must be made to understand that they may have to find money to cushion the low spending authorities over a period to enable the high spenders to make a properly phased adjustment.
Rate capping must not be available to use against the low spending and the economically efficient authorities. The target must reflect the growing population of Cambridgeshire. Otherwise the so-called overspending will increase and with it even greater penalties in the future. Our population is growing by 3 per cent. per annum and, if spending grows by only 1 per cent. over the next three years, it will mean a £10 million overspend in 1986–87 and on today's figures grant penalties of £24 million or another 26p on the rates.

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As I have said, we on these Benches do not accept the spending priorities of some authorities and we would say that perhaps some of the things they do lead to unreasonable expenditure. But let us also be honest and say that the removal of all these kinds of nonsenses would not have any really dramatic effect on the spending level of the authorities concerned. Yes, my Lords, they can cause annoyance and irritation to many of us, but in terms of real spending levels they do not have all that much impact.
The arguments about spending levels should be settled by the electors of those authorities. When local councils cease to have control over their local revenue, and if they are no longer free to set their spending levels and their rate levels at the figures they feel to be appropriate, then they have lost the right to be called an instrument of local government. Today many officers and elected members in local government are seriously questioning the continued value of their role, and local government will not retain the interest and the commitment of these dedicated and experienced people if they do not have the right degree of autonomy to do their job.
Can we not learn that hasty and ill-conceived actions do nothing but destroy the stability of local government? We know, and the Minister knows, that with all the goodwill in the world many authorities could not get down to a much lower figure in one year only. Time must be allowed for councils to do a phased reduction of expenditure, because sensible and progressive local government cannot be organised on uncertainty.
The Secretary of State is in favour of freedom for local government so long as that freedom is used in exactly the way he wishes. What he has not realised is that overspenders, and indeed under-spenders, are not the result of either Left-wing or Right-wing conspiracies. They are inherent in local government as we have known it, because they derive from the right of an authority to make its own assessment of its need for expenditure. We need a system of responsible elected local authorities and local government must be maintained and strengthened. Central Government cannot take all the decisions. The major urban and rural problems must have that diversity of approach represented by a local government which accepts that no two authorities are exactly alike or have exactly the same problems.
I do not want to end up going down the path towards no genuine local government and no real means of redress against a centralist Government. I do not want to end up with quangos and boards and no one knowing where he is going. All of us would be the losers. Over the years local government has been a success story and we have no reason to be apologetic about it. To it we owe our public education system, the community aspects of the Health Service, municipal housing, the police and fire services, consumer protection, personal social services, help for the elderly and disabled and much more in the way of services which help to improve the quality of life. All this we owe to local government.
I believe in local government and many Members from all sides of your Lordships' House have served, or are serving, on local councils, as I did for nearly 30
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years. I am sure that they, like me, recognise its importance. I ask them to join with us tonight to support the amendment and to work through the Committee stage in order to make this Bill more acceptable; to seek a time limit on Part I together with a review of local government finance; to seek really adequate parliamentary safeguards; to limit the number of authorities to be designated for capping; to specify the criteria to be used, and to get the general powers in Part II withdrawn. I believe that this Bill, if so amended, would find favour in another place.
4 p.m.
Lord Harris of High Cross: My Lords, we do not have any Whips or scorpions on the Cross-Benches. Therefore I cannot pretend to speak for my noble friends, many of whom I look forward to hearing later in the debate before this day comes to its end. For myself, in the absence of radical reform to contain Government spending, I am content, with no more reluctance than that expressed by the noble Lord, Lord Bellwin, to support the Government in their effort to set some limit upon those I have come to regard as local, political pickpockets. Against the noble Lord, Lord Bellwin, I must say that I wish that a similar statute, however draconian, might be devised to limit the power of central Government to raise taxes, which everywhere damage economic efficiency and inevitably, therefore, reduce employment prospects for our people.
The noble Baroness, Lady Birk, referred to an IEA survey in 1979 which showed a majority opposed to reductions in rates if that involved fewer services. As I understood the thrust of the case put by the noble Lord, Lord Bellwin, it is that expenditure can be cut, and often cut very significantly, without any reduction in services if the laggards come up to the performance of the better councils. The amendment expresses concern about local democracy. I want to ask: what about the corrosive bitterness, the friction, the disrepute, the lack of social cohesion that has marked the post-war growth of all forms of Government spending? Democrats, in my view, should be more worried about the needless politicisation of so many decisions that could be peacefully resolved by choice in the competitive market, if we so wished. It is revealing that we do not have to curb, curtail or cap the local Co-op, for the simple reason that they cannot inflate their costs and pick our pockets to pay for goods and services which we do not wish to buy from them.
I have always acknowledged that the Government have to dip their hands fairly deeply into our pockets to provide essential public services, including help for those who are not able to help themselves; but the whole of my criticism is that the greater part of public spending has nothing to do with the relief of poverty. That is why I argued before the Layfield Committee 10 years ago that we should rely much less on Government and much more on the real democracy of the market where everyone votes each day between alternative suppliers by choosing how to spend his own money.
By comparision, special pleading about local democracy strikes me, frankly, as pure fantasy. Of all local spending, I have calculated that only £1 in £7 comes from the domestic ratepayers, of whom only

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one in three, or perhaps one in four, pays full rates. At the same time, industry and commerce provide on average half of the total of rates—in some areas they provide 70 per cent. or even 80 per cent. of the rate income—yet they have no votes; while the Government provide half as much again as the ratepayers and are then resented for interfering. When taxation is so sharply divorced from representation it is no wonder that the dominant pressure is to spend, and to spend more of other people's money.
I believe that a far more fundamental violation of local democracy has long been complacently perpetrated by both the Labour and Conservative parties in loading councils with multiplying statutory duties which local citizens have to endure and help to finance, whether they like it or not. Alas! it is unlikely that the political opponents of this Bill would be keen to show their interest in decentralisation and democracy by joining me in giving real autonomy to local councils in deciding the scope and financing of their functions, including the freedom to raise charges, for example, for libraries, schools and other services. Instead, rather than giving local authorities real choice and real responsibility, both parties have come to impose their detailed policies on all councils, which have become little more than agencies for decentralised administration. It is recognition of that sad fact which explains why such half-hearted voting as occurs in local elections is overwhelmingly based upon national policies and no longer on local issues or personalities.
So long as we acquiesce in this puppet role for local authorities, it is inevitable that central Government should wish to encourage efficiency in the local administration of public policy. Where the local Co-op is required to cover its costs by selling in a competitive market, the local council can finance reckless overspending by passing the bill to impotent ratepayers. The present lack of either a market discipline or of an effective electoral sanction explains why local government is so disgracefully overmanned throughout its entire operation. Its total payroll has increased from under 2 million in 1961 to around 3 million at the present time, or one in eight of the entire labour force. Of its budget—above £30,000 million—80 per cent. goes on wages and salaries. In education, employment has doubled, despite fewer children, with only half actually engaged in teaching. In other services there are wide variations in unit costs which do not reflect differences in the quality of services. Where contracting out has enabled more precise comparisons to be made, we find reductions in cost commonly of 20 per cent., 30 per cent. or 40 per cent.
I want to ask the Government why they do not make competitive tendering compulsory as in the case of building and the direct labour organisations. Why should councils resist the kind of economies that market forces have already imposed on private enterprise, with such great benefits in the fight against inflation? I do not believe that Sheffield or Liverpool will improve local employment by maintaining overmanned council jobs, because the additional cost to ratepayers must simply reduce private spending and employment in the market sector outside.
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Why should we pay the slightest attention to all the special pleading which has come through our letter boxes during recent weeks from many of those who are responsible for this overspending? There has been impressive evidence, as the noble Lord, Lord Bellwin, said, in favour of this Bill from the CBI, the chambers of commerce and from large numbers of businessmen whom I have been able to consult. The question is: who will speak for the other victims—the unorganised and oppressed millions of ratepayers—for whom rates can be as much as 10 per cent. of their net incomes?
I conclude with some revealing evidence which NALGO omitted to send to your Lordships but which came to light as part of its £1 million campaign to oppose the so-called "cuts". Before going public, NALGO commissioned a professional research organisation to test opinion on local government among what it specified as "broad left" sympathisers in three areas: surburban Chester, depressed Sheffield and mixed Westminster. It was to be a qualitative assessment, based upon group discussions and prompted by NALGO tapes and advertisements. The unpublished report, obligingly leaked by the Guardian last year, revealed that the findings were diametrically opposite to what NALGO must have hoped. Thus, there was constantly expressed strong opposition to high rates; there was acceptance that private enterprise was more efficient; there was recognition of overmanning; there were complaints about lazy home helps and doubts, if you would believe it, about social workers. Public attitudes towards NALGO were also explored and found to be even less flattering. The report quotes such judgments as bureaucratic, politically motivated, selfish, greedy and destructive.
To avoid further embarrassment, I shall give only one quotation of direct relevance to this debate:
"Jobs for the boys had seemed to become more important to unions than the good of industry and the country as a whole."
From behind the rhetorical smokescreen about local democracy the evidence of NALGO's unpublished research shines through to confirm the evidence of everyday observation of councils such as the GLC, Sheffield and Liverpool. People have rumbled that the self-serving inefficiency of the less responsible councils will not easily be avoided without extreme Government measures. They want protection against the last of the big spenders. I support this Bill as offering some modest prospect of relief for these otherwise defenceless ratepayers.
4.10 p.m.
Lord Bottomley: My Lords, it accords me a personal pleasure to take part in the debate opened by the noble Lord, Lord Bellwin, and opposed by my noble friend Baroness Birk. My first speech in Parliament was delivered in this Chamber. It would have been my wish that my maiden speech in your Lordships' House would have been about the Commonwealth. There was an opportunity for me to take part in such a debate when there was the recent debate on foreign and commonwealth affairs, but it was not possible for me to do so. As chairman of the Attlee Foundation, I had long been committed to take the Chair for the Attlee lecture delivered by Mr. Kenneth Harris. However, with my long association with local government I felt entitled to take part in today's debate.

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For 20 years I was a member of the Walthamstow council, and was mayor of the town, During the last war I was deputy regional commissioner for the South-East of England, co-ordinating the work of 96 local authorities. For many years I was a full-time official of the National Union of Public Employees. When Prime Minister Attlee asked me to join his government I naturally assumed that it would be as a local government Minister. When it was possible for me to speak freely to him I asked why he had not done so. Tartly, he replied: "It is time you got away from drains and dustbins." He went on to say that there would have been a danger, too, with my knowledge and experience, that I would argue with the experts. The job of a Minister is to listen to the views of the experts and help them to make up their minds and come to a decision consistent with what the public will accept.
The Bill aims to give central government two key powers. First, there is a selective power to pick out a number of local authorities and fix a top limit for their rates. Secondly, there is a general power to control the rate demands of all local authorities. It enables the Secretary of State to use those powers on the basis of principles not spelt out in the Bill. The powers given to the Secretary of State are remarkable. He can determine the principles and then depart from them. He can order a local authority to run down its balances without himself having to face the consequences. These powers will not be subject to parliamentary scrutiny or approval. It gives more power to Ministers and civil servants than the elected representatives over the budgets and services of towns. The Bill is a negation of the long tradition of local government independence. This view is strongly supported by local authority associations, the professional press and the academic world.
The Bill is a threat to individual freedom and local democracy. It is an affront to local and parliamentary democracy. Under the Bill a local authority will no longer be able to make its own expenditure decisions. It will only be able to make expenditure decisions of which central government approves. The Department of the Environment is not equipped to assess detailed local needs in the way in which they are now scrutinised by local people. It cannot be right in a democracy for more and more powers to be vested in the Executive rather than in Parliament itself or in locally elected representatives of the people. That is precisely what would happen if this Bill becomes law. Local electors will no longer be able to vote for councillors to carry out the expenditure policies approved by the electorate. If this legislation comes into being it cannot be ruled out that some future Government of a different political persuasion may use similar powers to penalise authorities who underspend, and force them to increase their rates.
Local government initiative has been responsible for much of the social progress in our country. Walthamstow council, of which I was a member, introduced the selective school. This school system pioneered raising the school leaving age to 15 years. The only major development in sewage disposal was the development of the activated sludge process which was invented and worked by the Sheffield city council. It is now universal and used all over the world. School meals were first introduced in the city of Bradford; and
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the noble Lord, Lord Bellwin, will know that it was the city of Leeds which introduced traffic lights. The first domestic smoke control was introduced by the city of Manchester. I could give many other examples, but perhaps I may give this final example because it concerns my old constituency. The first isolation hospital in the country was built in Middlesbrough and it was not until 20 years later that central government introduced a Bill to enable local authorities to follow that example. We should not forget that it was local authorities who pioneered many of the public utility undertakings—water, electricity and gas.
This Bill, as has already been said, will be a blow to the practice of partnership between local authorities and local voluntary organisations. Local authorities will be compelled to give priority to statutory require-ments and to meet the needs of their own staff. The Bill is unlikely to make any major changes in the total of public expenditure. It is likely to promote a good deal of administrative chaos and uncertainty in rate fixing. Some years ago I travelled with Lord Redcliffe-Maud to America and we discussed local government. It is sad that over the years no Governments have taken up the recommendations that he made and which were subsequently supported by the Layfield Committee report. Local government would have been much better today if those recommendations had been accepted. A healthy local democracy demands that local authorities should enjoy a genuine degree of financial independence. This Bill goes against those recommendations.
The Government assert that local government expenditure has been excessive. That is not so. During recent years local government spending has gone down by 3 per cent., whereas central government spending has gone on increasing. A former Conservative chairman of the GLC has written to me saying that he opposes this Bill. He further said that he was giving up local government. It is sad that a hard working, conscientious public servant should be so disgusted that he has decided to give up local government work.
This Bill will add to the country's most pressing problem—that of unemployment. Rate capping threatens the livelihood of 3,300 fire fighters, 12,000 teachers and 7,000 police. It could mean the loss of some 11,500 residential places for children and the mentally handicapped, and of 8,000 day centres. It may mean 66,000 homes without home helps, and the loss of 55,000 meals-on-wheels. If this Bill becomes law, it will be a sad day for social democracy. There is today a challenge to Parliamentary democracy. Vigorous, democratic and independent local government is an indispensable part of our democratic society.
4.20 p.m.
Lord Boyd-Carpenter: My Lords, the noble Lord, Lord Bottomley, knows without my telling him what a personal pleasure it is for me to follow him in this debate and therefore to have the first opportunity of congratulating him on that most interesting and impressive maiden speech. The noble Lord and I have sat opposite each other for more years than anyone looking at him would deem possible. I have always

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admired his grasp of the detail of the many subjects with which he has dealt in his long and distinguished career.
He has also shown this afternoon that he has the quality of courage, since there are very few people in this House or outside it who would dare to challenge an incumbent Prime Minister as to the reasons for one's appointment to one department rather than to another, as he confessed he had done. I know I speak for all of your Lordships in saying that we greatly welcome the noble Lord's arrival in this House and are certain that he will contribute very much to the experience, wisdom and quality of our debates.
As the noble Baroness on the Front Bench opposite has observed, and as the noble Baroness on the Liberal Benches commented, there are today some people in the party to which I happen to belong who are inclined to think that the policies of the Government are somewhat—I think the "in" word is—abrasive, and to hanker after the old days of consensus. I am not one of those, and I believe that one of the reasons why the Government, and the Prime Minister in particular, command so loyal and determined a following in the country is the fact that the Government and the Prime Minister say what they intend to do and then get on and do it. This is, perhaps, something of an innovation in English public life. This Bill is an example of that. It was spelt out in detail in the manifesto, and it is in accordance with the Government's pledge and promise to the electorate, on the basis of which the Government were returned by a very large majority to another place, that the Bill comes to us.
The Bill comes to us because—as I have been trying to say to your Lordships—ours is a Government which seek to carry out the mandate they have been given by the people. The noble Baroness, Lady Birk, made—I hope she will allow me to say—a most gallant and ingenious attempt to justify the extraordinary hotchpotch of an amendment which she has put on the Order Paper for this House to decide upon a little time from now. She started by suggesting—as some of the less well-informed outside bodies which have been deluging your Lordships with expensively-printed propaganda material lately have done—that this Bill was unconstitutional and that there was (and I think that I got her words exactly right) a constitutional right in every local authority to spend what it liked and to tax its ratepayers as it liked.
That view really will not stand up to analysis. As has already been pointed out, we have a unitary system in this country. The Queen in Parliament is sovereign, and local authorities—like every other organisation in this country—are subject to the will of Parliament expressed in the proper and appropriate way by statute. What the noble Baroness failed to realise (rather surprisingly, in view of her experience) was the part played in our unwritten constitution by conventions. Conventions are, I suggest to your Lordships, what make our unwritten constitution work. As my noble friend Lord Bellwin reminded your Lordships, it has for many years been the convention that local authorities, although they have the power in law to raise rates almost without limit, did in fact not raise them, nor raise their spending
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limits, out of line with the wishes indicated to them by the Government of the day. That was a convention.
That convention has now been broken. The history of your Lordships' House reminds us of what happens when people break conventions. For a couple of hundred years, your Lordships' House had not touched a Finance Bill. In 1909, this House was so infuriated by the one produced by the late Mr. Lloyd-George that they threw it out. Inevitably, as happens in this country when you break a major constitutional convention, judgment comes upon you. Within two years, your Lordships' power to deal with financial matters was reduced to a mere shadow.
What has happened in this case, I suggest to your Lordships, is that in the past few years a number of local authorities—politically motivated and almost without exception controlled by the extreme Left (who are much more of a worry to the noble Baroness than they are to me)—have pushed up expenditure and rates to excessive levels and have therefore violated that convention. No Government can accept that, since the function of managing the British economy is the function of central government. When one has local government expenditure in excess of 20 per cent. of total public expenditure (indeed, somewhere near 14 per cent. of gross domestic product) no Government discharging their own task of managing the national economy can allow the discharging of that task to be thwarted by other bodies acting in a totally conflicting way.
Our present Government—and I do not want to go into detail because I know this is controversial, but I ask your Lordships to accept it as fact—are pursuing a policy of restraint in public expenditure; control of public expenditure in an endeavour, which has so far proved highly successful, to combat inflation. When faced with a challenge of this kind, where local authorities have pushed their expenditure up and have taxed their ratepayers excessively in a way that conflicts with the Government's policy, your Lordships may remember Bernard Shaw's play, The Apple Cart, in which it is, I think, the king who observes:
"When two men ride a horse, one must ride behind".
In matters of financial management and economic policy, it is the local authorities who must ride behind. If they had continued to ride in accordance with convention, following the direction given to them by the organisation responsible for economic policy, it might not have been—probably would not have been—necessary to introduce this Bill. But they have defied that convention, and, as always in this country when constitutional convention is defied, retribution follows.
It goes further than that. All of us in this House are concerned that the economics of the country should be restored and that our trade and industry should be restored. But your Lordships cannot overlook the fact that today the rate burden on business premises alone—between £5 billion and £6 billion a year—is higher than the total yield of corporation tax upon industry and business. It is a very heavy burden being imposed on business, in complete conflict with the policy of Her Majesty's Government, which is to stimulate investment and the development of industry

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by lightening that burden. No Government with any self-respect can accept that challenge.
I would only remind your Lordships perhaps of one particular example—that of Sheffield. In a poll taken of those businesses and industries in Sheffield which had had to cut their manpower in the past two years, 48 per cent. directly attributed some part of their cut in manpower to the heavy level of rates. This could be repeated all over the country.
When the noble Baroness talks about local democracy, it sounds just a little sour in the ears of those who are trying to run industry and businesses and who are subjected to taxation of this sort, in respect of which they have no vote whatever. No taxation without representation is said to be an old principle, going back to certain teatime activities in Boston. But when you have industry hampered in this way and unable to raise a finger in its defence, and when you have these rates falling on businesses which may actually be making a loss (since no account is taken, as national taxation takes account, of profitability), it is understandable that industry should, as it has through the CBI, urge my noble friend to take action.
Then we should consider the domestic ratepayer. The domestic ratepayer actually pays less in rates overall than the business ratepayer; but some of them—a minority—who pay the full rate find this a very heavy burden. But it goes further than that. Through business and through the domestic ratepayer, it affects the whole level of employment in certain areas. At County Hall across the river the Greater London Council has displayed until recently a great poster: "London's unemployed, 350,000", or whatever the figure is. There has always seemed to me to be a somewhat Freudian element in the action of putting up that poster, since some at any rate of that unemployment is a direct consequence of its own activities in raising the level of rates. Offices are moving out of London—moving to the lower rated areas of what is now called the M4 valley. They are moving out from central London very largely because of the burden of rates both on their offices and works, on the one hand, and on their employees if they live in that area, on the other hand.
There again, is it really suggested that the Government of the day, who are responsible for economic management, should sit by and do nothing? Is it suggested that we should await yet another inquiry, such as is put forward in the proposed amendment? The noble Baroness knows as well as anybody that such an inquiry—aided no doubt by the attendance of learned counsel—would last for three or four years; there would then be consultation for another two or three years. We are talking of 10 years before any change would actually be in effect. In the present situation of this country, with the present state of our economy, a delay of that sort is not acceptable, and, I would suggest, could not be acceptable to such a Government.
Lord McIntosh of Haringey: My Lords, will the noble Lord forgive me? Can he point out the reference to an inquiry in the amendment? I cannot find it.
Lord Boyd-Carpenter: My Lords, I am assuming that even a dictatorial person like the noble Lord
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would not alter the system of local government without having an inquiry of some sort; but if I wrong him, I wrong him.
Seeing the noble Lord reminds me of one matter which I had intended to mention. We have been told—and indeed we have received masses of correspondence from various worthy and excellent organisations that fear this, perhaps justifiably—that if local authority public expenditure is capped the local authorities may decide that the first priority for capping is the grants to these organisations. In the light of the activities of some local authorities it may well be so, but it need not be. The extravagance of certain local authorities at the moment gives ample room for economy.
Let me, as the noble Lord has reminded me, refer to the Greater London Council. I do not know whether your Lordships know that among the organisations which receive grants of ratepayers' money from the GLC are the London Gay Teenage Group, Lesbian Line, London Lesbian and Gay Centre, English Collective of Prostitutes and London Gay Switchboard—I do not know what that is. The GLC also decorates our press by taking pages, one of which reproduces 12 likenesses of the Secretary of State for the Environment. Handsome man though he no doubt is, that seems to me slightly excessive as an expenditure of ratepayers' money. Having no police powers, it none the less sets up a police committee, staffs it and spends money on it. There are many directions in which the GLC, were it to continue—and your Lordships know that it is the prayer of most London ratepayers that it may not—would undoubtedly find room for economy. It could do so in all these directions without cutting out the useful grants to useful voluntary bodies. No one knows that better than the noble Lord, Lord McIntosh of Haringey.
The amendment which will be before us at the end of this debate is a very curious one. Your Lordships will no doubt have studied it, as I have, with close on incredulity. I would like to end by asking a question of the noble Lord who is to reply on behalf of the Opposition. In view of the fact that this Bill featured conspiciously in the Government's mandate less than a year ago, and in view of the fact that it was passed in another place by a large majority, does he regard it as consistent with the role that the Labour Party thinks is suitable for this House, for this House either to reject or seriously or heavily to amend it? He should recall that in answering that question he may well be setting a precedent which years hence under another Government may not be without value.
4.38 p.m.
The Lord Bishop of London: My Lords, reference has already been made to constitutional issues raised by this Bill, and to the way in which it affects, for example, the rights of local electors, not least by the noble Lord, Lord Bottomley—and I, too, should like to congratulate him on his admirable and informative maiden speech.
I begin by pursuing these aspects a little more deeply and by seeking to show what underlies them. It is clear

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from a study of human society that it has ever been necessary for man to store the results of his work and to arrive at some method of co-operation by which they are shared as need arises. Even in primitive food-gathering societies this is made necessary by the vagaries of crops, the uneven distribution of resources for man to realise, or the possible incapacity of the food-gatherer or hunter to meet the needs of his family. Reliable accounts of even the simplest food-gatherers show that, apart from all commercial instinct, economic life is penetrated by mutual aid.
What is necessary in such circumstances becomes increasingly necessary as civilisation becomes more complex. The greater the complexity, the greater the dependence of individuals, families, groups, nations, upon each other. The greater the dependence, the greater the need for established and accepted principles if the right balance is to be achieved between the just claims of individuals, associations and governments respectively. Such associations above the individual level are, I would suggest, not merely the creation of statute: they do represent a very natural and human instinct that we do group in various levels within our society for various purposes and we cannot treat them simply as if they were creations of statute.
Such a balance must have as its aim the maintenance of the common good by means of which a society is to help its members in the realisation of tasks which they alone cannot sufficiently achieve. There is a well established principle of Christian social thought which evolved through attempts to achieve this balance and which I would wish to commend to your Lordships today. I think you will be familiar with the principle, perhaps not with the title. It is called the principle of subsidiarity. That rather ugly term is of comparatively recent origin, having been coined in this century; but the truth it represents has been expressed and appreciated for a long time past. This principle states that social institutions, which include those of the state, have an auxiliary and complementary function concerning the tasks and needs of the smaller groupings and individuals. That means to say that on the one hand institutions must leave to smaller groupings and individuals what they can do by their own proper power, and that on the other hand they must assist the smaller groupings or individuals where they are unable to accomplish a necessary or socially desirable aim.
The principle was stated formerly in these words:
"Just as it is wrong to withdraw from the individual and commit to a group what personal initiative and industry can achieve, so too it is an injustice, a grave evil and a disturbance of right order for a larger and higher association to arrogate to itself functions which can be performed efficiently by smaller and lower societies."
In other words, it is an injustice to deprive an individual or a smaller group of the possibility of acting upon his, her or its potential, and to reduce their activities or responsibilities to those which are below it.
It follows from this principle that not only shall the responsibilities and powers be properly attributed, it also follows that those who exercise such powers and responsibilities shall properly represent and be accountable to those whom they represent and who have immediate knowledge and experience of the needs which are to be met at the respective levels. It is
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because I believe that this Bill does not adequately take account of this principle that I must express my concern from these Benches today.
I fully accept that central government have a responsibility to relate the realised resources of the country to its spending. I use the phrase, "realised resources" to express the product of man's transformation of natural resources which are to be used for the common good. I use that phrase, "realised resources" rather than the word "wealth" because of the association of the latter with the word, "wealthy" with its unfortunate overtones.
I accept—indeed I have frequently affirmed—that need and desire do not alone create those realised resources to enable them to be fulfilled and they must be related to work and production. I certainly do not support unwise or prodigal spending. But I do not believe that action which is necessary to curb that must be such—as I believe to be the case here—as to penalise those who are not guilty.
But the way in which the Government seek to exercise their responsibility in this Bill, in my judgment infringes this principle of subsidiarity. I believe it is just far too blunt an instrument. I believe it undermines the responsibilities which those engaged in local government and those whom they represent should exercise. I do not say that the rating system does not need drastic reform. That is not the point at issue. I believe it does need to be reformed and reformed in a way which increases responsibility and realism in the face of local needs, rather than the reverse. It is for these reasons that I shall find myself constrained to vote for the amendment in the name of the noble Baroness, Lady Birk.
I now wish to draw your Lordships' attention to the likely effects of this Bill in two specific areas: education and assistance to voluntary agencies. Education in this country has always been and still remains statutorily the responsibility of local government—and long may that be so. Certainly in recent years there has been a significant shift towards more central control. Because of the proportion of expenditure on education, I believe the effect of this Bill must inevitably serve to increase that shift. I accept that the Department of Education and Science has responsibility for major matters of policy and I should like to take this opportunity of expressing my appreciation of the present Secretary of State for Education. But may I just point out in passing that there is actually nothing to say in the Bill to which Secretary of State it refers? That seems to me a little strange, but I have assumed that it is Environment and I make it clear that I am talking about the Secretary of State for Education and Science. I should like to express my appreciation for the way in which he is so willing to discuss such matters of policy with Churches, and particularly those who are actually involved in the maintained system. Indeed, we appreciate that very much.
I maintain that the implementation of central policies, particularly in education, must take full account of the social needs of the localities. That is the great strength of having education statutorily a matter for local authorities. As chairman of the Board of Education of the Church of England, I am given good opportunity to see the widely differing needs of the

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various authorities. I find it difficult to see how adequate account will be taken of them if the proposals in the Bill are implemented. Let me take an example from my own area. As Bishop of London I have opportunity to experience constantly at first-hand the educational needs of London, both in the area of ILEA and in the boroughs. In mentioning the ILEA, may I say how relieved I was to hear of the decision that it should be an elected body.
Reference has already been made to the most deprived areas. I would point out that of the 10 listed in the document of the Department of the Environment, seven are in the ILEA area. Although most of the boroughs have problems, it is in the ILEA areas that they are felt most acutely. May I give a few facts. The population density in the ILEA area is double that of any city in Britain and a quarter of the pupils are from single parent families. Twice as many children than the national average qualify for free meals. The number of ethnic minorities means that there are 147 different mother tongues represented in the schools in the ILEA area. I know of one of our own Church schools, not large, where there are children of 31 nationalities.
I must also mention that the cost of providing for children in these very difficult inner city areas is met wholly from the rates. With respect to the noble Lord, Lord Harris of High Cross, the point about percentage rates in relation to overall expenditure is of no help whatever to those who are seeking to meet the needs of such areas. Whether there are savings possible without grave social damage is a matter of debate among the parties in the ILEA. I am not going to be judge of the extent of the effect that they might have. I can say, however, that I have looked at the ILEA budget. I have seen set out ways in which a budget of nearly £900 million could be reduced by £120 million if the target for 1984 had been met. I have looked at ways that this might be achieved. I find it most alarming. I see immediately the effects of some of this reduction in the very schools that I visit in inner London. I do not see how a reduction of that magnitude could be achieved without serious social effects on what already is a very difficult area. While some control is necessary, the arbitrary capping of rates is not the right way to ensure that proper account is taken of such problems with the least possible harm to the community in London.
I have already referred to the decision taken that ILEA should be an elected body. It seems to me strange that that principle should be accepted while, at the same time, the responsibility of those who will be elected to provide what in their judgment is right, necessary and proper for the schools of London should be restricted. I could go into more detail about London, but I just wish to say this. Whatever may be said about over-expenditure elsewhere, when I go round the schools of London I am humbled, amazed and thankful to see what the teachers are able to do under the most adverse conditions. I would wish to take this opportunity of paying tribute to them and to all those who help in our education service, not least in other areas as well as in schools. For example, much is being done to alleviate the problems of unemployment through the further education programme in London as a whole.
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My second specific point relates to the assistance given by voluntary agencies. There is little doubt, I think, that if the Bill is passed and implemented, one group that will suffer will be the voluntary, community based agencies. And if I may say so with respect to the noble Lord, Lord Bellwin, he is speaking from one side, while I am speaking as one whose almost entire life has been concerned with voluntary agencies. I know how they are normally treated when the pinch comes. I have no illusions about that. I have heard policies in the past, and I believe them when they are fulfilled. That is not to undermine in any way the integrity and intentions of those who make them. It is simply an economic fact of life that, when the pinch comes, it is those who do not have any statutory responsibility and those who have no rights who have to suffer.
Great play is made, and has been made by the noble Lord. Lord Boyd-Carpenter, of the fact that some grants are made by some local authorities to some extreme organisations. No one would, I think, deny that. I know perhaps a little more than the noble Lord does about some of those he mentioned as they have on occasion been somewhat troublesome. However, they are very unrepresentative. I would ask your Lordships to believe that. They are quite unrepresentative of the way in which most financial support is given to voluntary bodies. If rates are capped, a number of key voluntary bodies, including church-based bodies in places like the London boroughs, may well be threatened with severe cuts in their grants. These bodies are doing invaluable work with groups such as single-parent families, in training people in the local community in bereavement counselling, in work with specialist groups, and in all manner of ways—marriage support, care of prisoners' families and so on.
The support of public funds provided from a local base in local authority funding is vital to the continuation of genuine community-based voluntary work. The Government say that they are committed to the work of voluntary bodies. The recent cuts in another area, in funds made available to Mode B training schemes for unemployed young people, predominantly with community-based voluntary organisations, has undermined our confidence in that commitment. It confirms our fear that rate capping might well have the same effect.
To return to my main point, however necessary the objective that this Bill is intended to achieve, I must regard the method as defective in that it fails to fulfil the principle of subsidiarity and to take proper account of the legitimate interest of the various levels in community responsibility. As a matter of natural justice and for the harmonious and healthy working of our society, I believe that these proposals must be re-examined.
4.58 p.m.
Viscount Ridley: My Lords, it is my duty to give the House this afternoon the views of the Association of County Councils as its President for a little while yet. Although I hope that many noble Lords will have found time to read the notes sent round by the ACC, among all the other documents being circulated that may not have been possible, so I should like to pick out

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some of the main points as I see them. Almost all that I say will reflect the association's thoughts.
It will come, I think, as no surprise to your Lordships to hear that those comprising the Association of County Councils are strongly united in opposition to the Bill. Their views can be summarised by saying that they believe the Bill to be unnecessary and counter-productive. To take the first of these, the Bill is unnecessary because the Government have overstated the problem. My noble friend Lord Bellwin, in his excellent opening speech, fired a barrage of statistics at us. I was not able to get them all down, but he left out one, and it must be mentioned.
In comparing rate increases over recent years with the rate of inflation, it has not been adequately acknowledged that the Government grant has been reduced from 61 per cent. in 1978 to 53 per cent. in 1983. This has effectively transferred the equivalent of 2p in the pound income tax from the taxpayer to the ratepayer. No wonder rates have become high! I am sorry that the Conservative Party's leaflet, entitled A Better Deal for Ratepayers, which we have also circulated, makes no acknowledgement at all of this fact. The argument will not be helped by incomplete figures. It is the Government's money, of course, and they can vary the percentage if they wish. But they can give ratepayers a better deal by the stroke of a pen by reversing this trend at any time. Similarly, they can reverse the situation whereby the business or non-domestic rate, at 57 per cent. of the total, is far too high. I agree that it is far too high, but the percentage is hardly the fault of local government itself, and it lies within the power of central government to alter it.
The present system of targets, GREAs, et cetera, is biting very hard but has not yet had enough time for its full effect to be felt. Even so, the average increase in rates for this new financial year which we have just started is around 5½ per cent., which is very close indeed to the rate of inflation. I do not think this is due to the fear of rate capping, and we disagree when the Secretary of State says that it is the shadow of this Bill which has caused this lower figure. It is due to the savage penalties which councils faced if they had not, nearly all of them, made serious efforts to reduce expenditure. It is also a very real tribute to the great success of the present Government in reducing inflation, which has obviously had a substantial and beneficial effect upon the costs incurred by local authorities.
I am not defending the present system as a perfect system. It was described by a former Secretary of State for the Environment, Mr. Geoffrey Rippon, on the Second Reading of this Bill in another place, at col. 196 on 17th January, as: "a complex, unscientific muddled mess".
It is no substitute in itself for a permanent solution to the problem of local government finance, which sadly seems to be as far away as ever. As an example, perhaps, of the absurdity which now prevails, the GLC's decision to reduce its rates by 7½ per cent. this year has in fact meant penalising everybody else by a grant loss of £100 million all round. There is, I suppose, more joy in Whitehall over one sinner that repenteth than anywhere else.
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The association understands the Government's concern about the handful of local authorities which have not operated within national economic and social policies. I have said before that I, personally, can see very much the need for capping those authorities now threatened with oblivion. My experience between 1972 and 1974 showed me what can happen if that does not take place. However, I believe that it is wrong to deal with this problem by making a further fundamental shift of emphasis towards the centre. It is acknowledged that this is a shift of power to the centre, and a significant transfer. We are going down a one-way street with double yellow lines on either side. At the end of the road sits "the gentleman in Whitehall knowing best". If that is what we want, then, okay, let us have it. But we must recognise what we are doing.
The Government say that the selective scheme will affect only some 12 to 20 authorities. If the Bill is to proceed, the selective powers should be confined to that number, or to something very close to it, and there is a task for this House in that respect. There must also be a very important job for this House in defining the principles on which authorities should be capped under Part I. It is not good enough to leave it to the whim of any Secretary of State, as the Bill now does. It is only too easy to move the goal posts in the middle of the game. It is also doubtful if the affirmative resolution is a sufficient safeguard in a heavily whipped House of Commons, or in what seems now to have become a heavily whipped House of Lords as well.
The Government have indicated that the GREAs will be used as criteria by which to decide whether an authority is liable for capping. But quite apart from the fact that they were designed for quite a different purpose, they can themselves be altered by the Secretary of State, again at the stroke of a pen. There is, for instance, nothing in the Bill to stop any future Government so altering the GREAs that they could, for example, cap the rural shires very severely while allowing inner cities to spend far higher sums without capping, or, indeed, vice versa, so that the Bill could be used for political manipulation.
One of the fundamental problems which we examined in great depth when I sat on the Layfield Committee was the assessment of need in local government. We concluded unanimously after a long time—and I admit that it was a long time ago—that accurate assessment of need really cannot be carried out at the centre: it has to be done with at least the concurrence of those operating the services. But I am afraid that that is what the Bill now before us provides.
As regards the Bill being counter-productive, I point out that we are told that the object of the Bill is to reduce the totality of local expenditure. There may be no quarrel with that, but I do not believe that the Bill will do that if the electorate pressurises local authorities to spend up to the figure which would invoke rate capping, and that well may happen. As a Member of another place put it in the debate on Second Reading, a rate cap will be a "virility symbol" essential for a local authority to show that it is doing its best for its citizens. Nor do I believe it will have very much effect if only 20 authorities are to be capped. If we remove the GLC, ILEA and the metropolitan county councils from last year's overspend because

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they are likely to go anyway—and I am not becoming involved in that matter—the rate cap would only have saved under 2 per cent. of the total had it been operative, as we are not told it will be operative, in 1983–84. So I believe that there is a real danger of raising expectations which cannot be fulfilled. Also there is the possibility that an authority will provoke rate capping in order to be able to justify its policies and its decisions and explain its problems and plead its case with the Government. Indeed, my noble friend Lord Bellwin suggested himself that this could happen, and expenditure might rise in total for yet another reason under that heading.
The Bill would also be counter-productive because it could result in two possible trends which I think the Government may live to regret. Once it becomes law, especially if the general powers are to be there, every failure in the local government system, every school which is closed, every drain which remains blocked, even,' pavement which is cracked, every lane which is not cleared of snow and all the other things which do not get done, will all be blamed on the threat of rate capping, and responsibility will be thus transferred from local authorities, where it should lie, to Whitehall. There must be some electoral consequence of that in due course.
Secondly, there is a real danger of creating an atmosphere in which people think that the power of local councillors to make decisions will be so reduced that people of sense, experience and moderation will be reluctant to offer themselves for election, and the way will be left open for extremists to take over the system. This is not true. We do not think that the power of local councillors will be reduced. However, there are people who think that that is now happening, and that is what will do the damage. Indeed, it has already happened to some extent. I think that Members of this House are the most sensible, the most experienced and, by and large, the most moderate people in the land. Therefore, they should all be sitting on local councils. There are now very few Members of this House who sit on local authorities of any kind, but there used to be many more. That is an example of what is going on.
Therefore, I hope that the Government can tell us that they recognise these dangers and that they will face up to the fact that if this Bill is to proceed it must only be as a temporary stopgap until we can reform the system in a more accountable way, as has been said so often during our debates in this House, both in February 1982 and in October 1983.
Of course there is public anxiety about the rate levels, and rates are very unpopular. Of course Ministers and Members of Parliament will receive complaints about rates, and the phrase "rate capping" has an immediate and wide popular appeal. So would a Bill to promote "income tax capping", and even more so "beer tax capping", which would be an equally popular slogan. I remember, again during the time of the Layfield Committee, a witness who one day accused local authorities of:
"dangling a bottomless pit in front of the ratepayers"—
a difficult thing to do and a graphic phrase. I fear that the Government at this time are in danger of waving an impossible target in front of ratepayers. The way in
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which to control local spending in the long run is to increase control by the electorate and by the ratepayers and to reform the rating system. As I said myself last October and as I repeat, I believe that this Bill is a classic case of treating the symptoms and not the disease.
5.8 p.m.
Lord Irving of Dartford: My Lords, I am delighted to be able to congratulate my noble friend Lord Bottomley on a very successful maiden speech. I have been very fortunate to be a friend of his for more than 30 years through his long and distinguished career in another place. I am sure that his experience, as a successful Board of Trade Minister and as a Colonial Secretary at a most difficult time, will make his contributions here of great value, and I hope that we shall hear him frequently.
I am one of the Members of this House—few though there may be—referred to by the noble Viscount, Lord Ridley. I am still, after 32 years, a member of a local authority and associated with a number of organisations related to local government, including NALGO. The Bill with which we are dealing today is important because, on the admission of the Secretary of State during the Third Reading debate, it would mean,
"a significant change in the relationship between central and local government".—[Offical Report, Commons, 28/3/84; col. 325.]
This change makes it a constitutional issue, a matter which always gives rise to concern among Members of this House.
According to Mr. Edward Heath in another place on the Second Reading, the Bill was a breach of an important Conservative principle, which is:
"to seek the widest dispersal of power".
I am sure that it is also a matter of importance to many people who are not members of the Conservative Party.
These arguments may not have carried weight with the Government in another place, but I suggest that, as this House has often regarded itself as the custodian of what constitution we have, noble Lords will wish to consider whether they ought not properly to ask the Government to think again before taking this massive step in a direction which we believe would be very damaging.
On the Third Reading in another place Mr. Patrick Cormack put this change in powerful terms when he asked the Secretary of State whether he would be happy:
"if the tables were reversed and the Secretary of State was a Labour Member, and the electorate, in revulsion at what was being done, decided to elect a great many Conservative authorities and their will was immediately rejected, expunged and revoked by Government?"
If this happened, we would have the noble and learned Lord who sits on the Woolsack calling again for a written constitution to protect the nation from an elected dictatorship. Of course, some of us warned the House and the Government in 1980 that the draconian powers that they were taking then would have shocked Tories if they had been taken by a Labour Government.

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George Jones and John Stewart, two of the most distinguished academics in the country—one a professor of government at the LSE and the other a professor of local government at the Institute of Local Government Studies at the University of Birmingham—have said in their recent book, which is perhaps one of the most powerful books ever written on local government, that:
"The history of central and local government relations from 1979 to 1983 was a record of over-hasty legislation, many of whose main provisions had to be withdrawn or revised. The four Bills led to eight grant systems and is evidence of instability that should provide a warning. Ill-considered legislation in a constitutional area can have unintended consequences".
Then they went on to say that the period shows how the pressures—inevitable when central Government's and local authorities' areas of responsibility are confused—drive central Government controls and powers once "introduced" into new uses, even though the possibilities of such uses were denied when the powers were first introduced. Therefore, it can be predicted that powers against a few over-spending authorities will in time come to be applied to more and more authorities as the pressure for central intervention grows.
Further reserve powers will become actual powers and set a regular annual limit to local government rate increases. The moment for sober consideration of such proposals is now, before the powers are obtained. Afterwards it will be, and is always, too late. I believe that that moment is now. There is clear evidence of this kind of progression and change of mind. On 17th May 1982, in answer to a parliamentary Question, the Secretary of State for Defence said:
"I have not at any time proposed grant related expenditure assessments as the target for individual authorities".
Earlier, on 8th July 1980, the Secretary of State for Employment said:
"Some people have suggested imposing individual cash limits on every authority … when the public funds have been distributed, it is then a matter for individual local authorities and their councillors as to what their expenditure decisions are. It is their choice between services, their choice as to the volume of expenditure on those services, and their choice as to the rate level that they decide to impose"—
to which I think we can almost say, "Amen".
The Conservative-controlled Association of District Councils says of the GRE assessments:
"They are grossly unsuitable as individual targets because of the numerous and significant anomalies they contain".
The Secretary of State proposes to go back on these solemn undertakings, as Clause 2 of the Bill clearly says that grant-related expenditure is now to be used as a test of overspending. The noble Lord, Lord Boyd-Carpenter, had some fun at the expense of the GLC. I do not want to deal with the GLC because I am sure that the noble Lord, Lord McIntosh of Haringey, as a member of that body, will speak on that matter. But I wonder whether the House and the Government realise how massive some of the cuts are that they are demanding, especially of some of the high-spending authorities.
Let me take the case of Hackney. The grant-related expenduture to Hackney is £59.25 million, and its budget is £81.34 million. Is it supposed that a cut of £21 million can be imposed on Hackney, one of the
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poorest areas in the country, without cuts of such magnitude that some services would cease entirely and areas of administration collapse with misery, deprivation and massive job losses?
However, this measure also imposes a serious problem of split accountability. As the Association of County Councils says:
"The local authority will be accountable to central government for keeping to its expenditure within the financial limits whilst remaining accountable to its own electors for providing individual services which Parliament has determined that the local authority should provide. This is an intolerably muddled and unsatisfactory position".
How do the Government justify the Bill? They say that in 1983–84 local authority budgets are running 4 per cent. above the 1978–1979 spending, in volume terms. But the reason that these proposals were introduced could not have been that the spending of local authorities was greater than in the past. Indeed, it was less. Certainly, nobody could seriously argue that overspending of under 4 per cent. creates serious economic problems for the Government and, indeed, for the nation—at least, to justify these dramatic and constitutional changes.
Local spending has fallen in real terms. While central Government current spending has risen as a share of national income from 27 per cent. to 29 per cent. in the last five years; the local government share has fallen from 10.5 per cent. to 10.2 per cent. Overall, local government current expenditure, in cash terms, has increased by 90 per cent. in the same period, but similar central government expenditure has increased by 93 per cent. 1 think we are entitled to ask, which is out of control—who is profligate?
An accumulated loss to local government of about £9 billion has occurred between 1978–79 and 1984–85; without these reductions by the Government, and with the decline in the economy, tax increases of at least 3p in the pound would have been necessary. Instead, the burden has been shifted to local government, and therefore falls on the people who. in the main, benefit from local government services—the aged, those relying on social services, and indeed the young.
Sir Ian Gilmour put it bluntly on "The World At One" on 17th January:
"The reason the rates go up every year is because the rate support grant is cut".
The Chancellor of the Exchequer recently said that since 1979 local authority expenditure has risen by 9 per cent. more than prices generally. This is true. But the equivalent figure for central Government expenditure in the same period is 13 per cent. The Chancellor also said that the yield of non-domestic rates had doubled in the period. That is also true. But the yield of central Government taxation has also doubled from £43 billion to £87 billion.
The Secretary' of State says that only a small number of authorities need fear these proposals. Many of these so-called hit list authorities are recognised by the Government as having special problems. They are partnership councils. Rate control in these areas renders nonsensical the most important aspect of inner city policy. More than £400 million is pushed by the Secretary of State and his colleagues into special projects in the very councils where he now hopes to

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save hundreds of millions of pounds. In reality, the Secretary of State would have to act against several dozen authorities to make worthwhile savings, unless he intends to decimate services and jobs in the conurbations and cities.
However the Secretary of State tries to take the sting out of the Bill for the purpose of this debate, this is why the general powers will have to be used. His decision not to activate Part II and the argument that they are merely reserve powers, does not square up to the calculations made by Mr. Noel Hepworth, the Director of the Chartered Institute of Public Finance and Accounting, the municipal treasurers' professional body, who in a very good article in The Times on 16th January said:
"The argument about which authorities should be controlled and what lists should be used is exceedingly confused".
He also shares the view—and this is the important part—that these proposals are unlikely to produce immediately, or in the foreseeable future, reductions in spending to the level the Government apparently require. The Secretary of State has never been able to answer this statement made on accounting, and not on political, grounds.
Thus, with the broken assurances of the past, anyone who goes along with these assurances now is rather in the position of a second marriage, which Samuel Johnson described as a triumph of hope over experience—although with perhaps worse hope than in the case of a second marriage. Nye Bevan used to say, "Why look in the crystal ball when you can read the book?" The book is there to be read—the muddle and confusion of the last four years; the betrayal of solemn assurances and the expertise of the professional accountants. This is why all local authority associations have said, "Enough is enough".
If the Government had really been concerned for the impact of rates on industry—and I personally think they should have been—the very survey quoted by a Member earlier showed that rates are a relatively small part of their costs, and a number of other items like VAT, interest rates, and energy in the control of the Government make a much bigger impact on Government costs than rates.
Of course, if they wanted to do something they could have done a number of things. They could have done what they had already promised twice to do: reform the rating system; or they could have had a revaluation, which has not taken place since 1973; or they could, if you like, have given a measure of derating to industry.
The idea that all authorities under £10 million would escape overlooks the fact that this figure would be quickly eroded by inflation, so almost nobody is safe as inflation-proofing is not built into the system. The Association of County Councils says that the implementation of the Government's proposals appears to be based on expediency and would result in an unacceptable concentration of power in the hands of the Executive rather than Parliament, and a further weakening of local democratic control—and the price is too high.
The extraordinary thing is that the local authority associations, predominantly Tory dominated, believe that the legislation will not work and will not achieve
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the Government's objectives—this is the point I want to make—and they have from the start been willing to co-operate in helping the Government to achieve their objectives. It is a strange and indeed a pathetic sight to see the anguish of many of the most experienced people in local government, loyal Tories like Mr. John Lovell, chairman of the Association of County Councils, and Mr. John Morgan, chairman of the Association of District Councils, not only good Tories but honourable men, who cannot go along with their own party and their own Government because they believe that the proposals would damage the whole fabric of our local government system.
The proposals leave untouched the fundamental issues of local government finance. They do not alter the dependence of local authorities for over three-quarters of their income on taxes that do not bear clearly on the local electorate; namely, the non-domestic rate and national taxes that finance central grants. They do not strengthen but rather weaken the accountability of a local authority to its electorate. They do not clarify the role of local government in our society or provide it with a stable framework in which to operate.
All these are urgent and important matters which should have been dealt with, but there is no evidence that any of these proposals were deeply considered, that their implications were worked through, or that there was consultation with those who work within local authorities or study their activities. The view of Professors Jones and Stewart is that they were adopted in ill-considered haste as a means of meeting an immediate electoral problem, the writing of the party manifesto. I believe that, whatever attachment people have to party manifestos, in this case that devotion would be misplaced. This is not the way to conduct government or to make some of the biggest changes we have had in recent years, and I hope that noble Lords will support the amendment in the Division Lobbies tonight.
5.24 p.m.
Lord Thorneycroft: My Lords, I rise briefly to support the Bill. It gives me an opportunity of saying how much I enjoyed the speech of the noble Lord, Lord Bottomley. I have counted him as a friend over many years and I am indebted, as he knows, to him for one or two acts of kindness which I do not forget. I hope that we shall hear him on many future occasions.
May I say that I share to the full the reluctance expressed by the noble Lord, Lord Bellwin, at the introduction of this measure. I support it for one reason only. I support it because I see no other option open to the Government. The noble Baroness, Lady Birk, invited me and others to embark upon a thorough reform of local government finance as an alternative. Willingly, my Lords, if I had any idea how to do it. But Layfield does not know how to do it. The noble Baroness does not know how to do it. I am damn sure the Government do not know how to do it. As an alternative to a serious measure it seems, if I may say so, a little odd. If I could have a private word not with the noble Baroness, Lady Birk, because she is not here, but with the noble Lord who is to wind up for the Opposition—
Several noble Lords: She is back.
Lord Thorneycroft: I cannot see her. If I might have a private word with the noble Baroness—to which I would ask the Government not to listen too closely—she has followed legislation on local government matters over many years, and she may have held the view that some of the measures introduced by my honourable and right honourable friends have not been an unqualified success. The view has been expressed. I express no view myself, but the view has been expressed. Those were measures where the Government knew, or thought they knew, what they were trying to do. To urge them to introduce a measure when they plainly will not know what they are trying to do seems to me to be a recipe for disaster, and that we should be invited to vote for such a cause is surely a little unwise.
To return to the Bill, I can remember the time—and something that the noble Viscount, Lord Ridley, mentioned recalled it to me—when great families of all political persuasions played a large part in the local government of this country in great cities like Liverpool and Birmingham. They took a deep interest in the administration of their local communities, there was not a great deal of party politics in it, and the conventions were observed.
The decline in local government from those standards is due, I think, not to local government itself; it is due to central Government. Under all parties we have sought to do too much. We have interfered grossly in the affairs of individuals and institutions in every part of the country. As the frontiers of the state have advanced, so the responsibility of local citizens has declined.
Today the centre provides more than 50 per cent. of the cost of what is going on, and 60 per cent. of the remainder is provided by non-domestic ratepayers. The gearing—if I can use such a word—of responsibility between what one would have liked to spend and what one will have to pay is something like 5 to 1. This is not a system of local government. It has become practically a licence to print money. No one could seriously say that it could go on in that way.
The wonder is not that it has become somewhat frayed at the edges. The wonder is that it has worked as well as it has; and that it has worked as well as it has is of enormous credit to councillors of all political parties who have exercised a great deal of common sense in the way they have done things. Indeed, between 1974 and 1983 central Government expenditure, expressed as a percentage of the gross domestic product, went up from 33 per cent. to 37 per cent., while local government expenditure went down from 32 per cent. to 25 per cent. There is a lot to be said for leaving things in local hands.
Nevertheless, 16 authorities have demonstrated that it is practicable to exploit the system that has arisen in local government. They have grossly abused their powers and the weaknesses of the system. They—and broadly almost they alone—are responsible for the £¾ billion gap between what the Government think was reasonable and what in fact is happening. Something like 400 councils have been carrying on, trying to do their best, with everybody shouting, but keeping the thing by and large within the bounds of what is
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reasonable. Not only have those spending authorities spent far too much money, but, as my noble friend Lord Boyd-Carpenter pointed out, they have flaunted their power to exploit the ratepayer. They are spending money on Babies against the Bomb, Irish Women's Group, the Lesbian Line, the Southall Black Sisters, the. London Gay Teenage Group, Campaign to Curb Police Violence and masses of others. Against that background it was neither politically nor economically possible for the Government to do nothing. Therefore, very regretfully, I find myself having to support the measure.
It is not a measure of reform. It is basically a damage limitation measure. It deals not with the causes of what is wrong with local government today; it deals with the effects of what is wrong with local government today. I am unqualified in my support but I am bound to tell the Government that I share many of the doubts expressed by my noble friend Lord Ridley in the powerful speech which he addressed to your Lordships' House.
I do not see much good coming on the swing of policy decisions from the town hall to Whitehall, of power moving from local councils to Westminster. I agree with the noble Viscount that the time will come when those who sit in Westminster will not think much of that arrangement either, as they become increasingly responsible for what is going on in every corner of the country. I regret the gradual phasing out of the fine tuning which was possible in a local administration to meet the requirements and needs of a local community, to all the computer complexities of grant-related expenditure and the rest which we shall be compelled to rely heavily upon.
Therefore, what are we left to do? Surely we cannot embark on the unchartered seas, uninquired into, of reforms of local government expenditure. It is not in any practicable way an alternative for the Government to adopt. I think that the Government should do something else; they should begin to think deeply about the relations between local government at one end and the centre at the other. We ought to think on an all-party basis and not on a single-party basis. One way or another all of us, whatever Government are formed in this country, will require an effective local government institution with which to work. I see no profit in quarrelling all the time about the differences as to how they should be set up. A real effort should be made to reach some accommodation.
Of course we should look at the reform of local government finance; not, for heaven's sake, the abolition of the rates. I think that that folly has been abandoned by the Government. It was a folly because it distracted our minds from the real problem which exists, which is how to build a system of local government finance based largely on the rates, and probably rates paid over a somewhat wider area. But these things are controversial; they are difficult and can be done in my judgment only if some effort is made to discuss among all parties what should be acceptable, so that a party of any political complexion will have some local authorities reasonably established with which to deal.
It is against that background that I think that the worst thing possible is to divide the House at this moment on that issue. The real contribution that can

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be made by your Lordships' House would be for the Government to express a willingness to consult; to think; to co-operate on an all-party basis to try to find some way through these difficulties, and for the amendment to the Motion to be withdrawn.
5.35 p.m.
Lord Marsh: My Lords, I should like to join with others in congratulating the noble Lord, Lord Bottomley. We have known each other now for a time in excess of 30 years; indeed, after my election to another place in October 1959, on the day I left my office the noble Lord, Lord Bottomley, returned to the National Union of Public Employees, took over my secretary, my car and my office. Since those days the National Union of Public Employees has changed a great deal. We found it possible to do a solid job of work without some of the actions which have characterised it in recent years.
It is also true that local government has changed since those days; the day of the full-time councillor, frequently living on his expenses and acting virtually as an untrained, unqualified executive on a day-to-day basis. The politicisation (a word I practised for some time before daring to use it in this Chamber) of local government is a relatively new phenomenon. In large parts of the country even now, outside the big metropolitan areas, there is an apolitical approach to local problems which does not exist in other places. Every speaker has agreed that there are serious problems in the financing of local government. The amendment calls on Her Majesty's Government to embark on a thorough reform of local government finance. I think every speaker has supported that. The noble Lord, Lord Thorneycroft, in a characteristic speech, less enthusiastic than some I have heard him make, drew attention to how important this sort of reform is and how difficult it is to do.
I agree with the need, but it would take years. It is easy to argue that it should have been done. It was not done by either party, and if we go down that road—I sincerely hope we shall—it will be a period of years before anything can be obtained from it. The situation among some of the high spending authorities is far too urgent, far too serious, to allow it to continue while one sits back writing papers about a possible total reform.
Some action, in my belief—I make no secret of my total support for this Bill—has to be taken now to restrain some of the crass irresponsibilities of some of the local authorities, irresponsibilities which they support from the rooftops and for which ordinary people have to pay. It is not surprising to me that the Bill has produced almost hysterical opposition from many members of local authorities. Nothing produces a solidarity more total, more moving and more sincere than a good old-fashioned vested interest. That is true of all of us, whether we are trade unionists, industrialists or whatever. We have a go at defending that which we are enjoying.
There is no doubt that, like small children let loose in a sweetie shop, some local authorities are thoroughly enjoying themselves at present at great expense to everybody else. What is unusual about this
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particular campaign is not that people in those local authorities who have devoted their lives to local government react in this way—it is unlike the campaigns of any other vested interests—but that not a penny of it comes out of their own pockets. It is a classic example of the way in which there is now a confusion about the ultimate owner of the public purse.
In my view, it is perfectly right and proper for a member of a local authority to campaign against the Government and to combine in so doing, but if people wish to run what is essentially a political campaign they should join with others of like mind and finance it themselves. They should not raid the rates any time they feel like taking a few thousand pounds to help out their particular cause. It is another example of the growing willingness on the part of some municipal moguls to regard the rates as a method of financing their pet causes. Some of these causes are good causes.
The point is well taken that you can list all the loony activities that go on among a small group of local authorities, and exclude those from the majority, and many of the other causes are very good. But there is no limit to the amount of money that any one of us in this Chamber could spend on good causes, passionately believing in them. But, unfortunately, there is a limit on how much money is available for spending on good causes. I find very worrying, even in this debate, the way in which there has been a suggestion that somehow the odd few hundred million pounds does not matter if it goes by the way. It matters very much. Once the odd few hundred million—and that itself is quite interesting: one reads that there will be savings of only £300 million a year; but £300 million is an awful lot of money that an awful lot of people work awfully hard for—is regarded as something that does not matter, then it does not matter if it is £400 million or £500 million. The whole basis of financial control then goes out of the window.
It has been argued that this Bill is a direct affront to democracy. The amendment is couched in pretty heavy terms:
"this House believes that it will result in damaging constitutional changes in the relationship between central and local government, will undermine the authority and responsibility of local councillors and will gravely weaken local democracy"—
a sort of mugging of the Magna Carta! These constant references to local democracy and this picture which is painted of the pubs full of people discussing the county precept is not true. Those Members of this House who have served in politics know full well that it is not true. Local elections take place on the basis of national issues. One may regret that; it may be unfortunate. A noble Lord shakes his head. But I should be very interested to do a survey in this House to find out how many noble Lords know what is the county precept in their district. I should certainly be interested to know how many people in the street know that. People do not follow local elections on the basis of the size of the county precept or the level of expenditure directed to refuse disposal. They vote as to whether they like the sitting Government or do not like the sitting Government.
Labour local authorities tend to produce Labour Members of Parliament and, I would suspect, in those far off days when Members of this House had the

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democratic right to vote for Members of Parliament before they became elevated to this place, those on the Conservative side of the House predominantly voted for Conservative authorities and those on the Labour side of the House predominantly voted for Labour authorities—with the exception of members of the Alliance who have more catholic tastes on these occasions. If there is an argument about local democracy it is an argument as to whether Parliament shall retain the control over public expenditure, whether Parliament has the ultimate responsibility for the macro-management of the economy.
It has been said many times that local government is responsible for 25 per cent. of all public expenditure. How can noble Lords say that expenditure on that level is irrelevant to the macro-management of the economy? It is as much part of public expenditure as is state expenditure. And both parties have been increasingly concerned about their inability to exercise any sort of control over this massive element in the national economy. In the last few years a number of local authorities have abandoned any pretence of responsible finance management. This is where things have changed. It is very easy to poke fun at some of the dafter causes which some of the authorities, a minority, regularly indulge in; to argue that they are unimportant because they do not mean very much, they do not cost very much. It is said that the total savings are likely to be only a few hundred million pounds each year. I do not believe that that is so. I believe that this Bill would make very much larger savings because it would force a level of financial responsibility on some of the local authorities which does not exist at the present time.
Responsible financial control is not just about sophisticated management techniques and levels of authorisation of expenditure. Successful financial control of the vast sums of money by any standard spent by local authorities depends on the right attitude of mind at all levels and the example set at the top. If there is a sloppy attitude to financial control in any business, it will have a sloppy result at the end of the day. How do you get a sense of financial responsibility in handling other people's money when the leaders of some local authorities fight publicly and boast of their aim consciously to bankrupt their own local authority? How can you persuade young people working in a finance department, young executives who take their job seriously, when the governor goes on television and says, "One more heave and we can put the whole thing in the knacker's yard"? It really is an extraordinary approach. When Mrs. Frances Morrell, chairman of ILEA, insists on using an ILEA chauffeur driven car to take her daughter to school, that sets the attitude to public expenditure right through the organisation. If the chairman can do that, how can you argue about other people entertaining their relatives on the rates? It is not just the amount involved; it is the total lack in a very small group of local authorities of any attempt to control public expenditure.
Take the recent discovery that some 20 mildly delinquent children have been sent to a private institution on the Island of St. Vincent. After a time there were rumours of drug abuse which proved to be untrue. No fewer than five social workers were flown
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to St. Vincent to investigate these rumours in response to 20 children. When they got there it was a bit of a problem to carry out the investigation because the kids had gone to Venezuela for a couple of weeks' canoeing. People laugh, but the answer to it by the local authority, when they were challenged, was, "Ah, you would never believe it but it is actually cheaper to keep them there than in council care in London"—and that justifies it. It does not justify it at all.
The right reaction, I would suggest, for an authority which finds it can fly children to a private school in the Caribbean cheaper than keeping them in Lewisham would be to investigate the cost structure of Lewisham social services; not just simply to say it is cheaper, but to see why it is cheaper. It would be surprising if Members of this House found it was cheaper to send their children to the Caribbean to be educated; even those noble Lords who educate their children in Windsor, which one would have expected to be more expensive than the Caribbean.
A few weeks ago the Liverpool council advertised the post of rector of Liverpool Polytechnic at a salary of £30,000 per annum—a worthy post. They drew up a short list of six. One of the candidates was invited from Australia at a fare of £1,600. The £1,600 is not very much but, again, it demonstrates to everyone in the authority that you do not have to bother when it comes to council expenditure. A few weeks ago Mr. Ken Livingstone spelled out the course on which the high-spenders were embarked. I have an affection for Livingstone which I seek desperately hard to keep under control. He is about the only extreme left-winger I have ever met with a sense of humour. He has great charm and capability. He speaks his mind. He made a speech on 2nd March about this Bill. He said:
"Irrespective of the odds, Labour councils have no option but to refuse to comply with the new laws. No one can really expect the Tories to go through all this trouble just to shave 3 per cent. or 5 per cent. off existing council budgets … The Labour movement must begin now to build support in the trade unions and the wider community for a policy of total defiance to the Government's measures… If rate-capping becomes law we should present budgets which ignore the Government limits and continue with our manifesto programmes based on no cuts, no job losses, and no rent or fare increases".
Is the challenge to local government, or is it to Parliament itself? Can it really be said, if a local authority leader can get up and say, "We will defy the law, bankrupt other local authorities", that it is local government who are being persecuted by this piece of legislation?
In the light of statements like that, how does anyone believe that any government could fail to take up such a challenge? How can anyone, with the knowledge of what is going on now, and the knowledge of what is intended, believe that we can sit back for several years while we look at the overall financial structure of local government? There is a lot to be done in that area, but these are matters for the future. The problem is now so urgent that while there may be a better way of dealing with this problem in the short term, I do not know what it is. Nothing anyone has said today has caused me to believe we can wait for years. I believe that the general public need this Bill because they need the limited protection that it will provide.
5.50 p.m.
Lord Broxbourne: My Lords, may I start briefly, but cordially and sincerely, by adding my mite of congratulation to those so fittingly expressed, with characteristic felicity of phrase, by my noble friend Lord Boyd-Carpenter to the noble Lord, Lord Bottomley. The noble Lord, Lord Bottomley, was for many years an ornament in the other place, as some of us know. Very soon your Lordships will appreciate that their great loss is a great gain to this House.
This Bill, moved with clarity and cogency by my noble friend Lord Bellwin, has aroused much controversy and has attracted much criticism, most of it misconceived in my submission. In the forefront of the indictment stands the charge of unconstitutionality, a grave charge indeed in a parliamentary democracy. That charge figures at the outset of the Opposition amendment, which refers to "damaging constitutional changes". It figures in the submission of the Association of County Councils. It figures in the submission of the Association of Metropolitan Councils, which describes it as a "major change in our constitution", and "one of the biggest constitutional changes in modern times". It is this grave charge which I seek to meet and to rebut, within the constraints of a short speech. I shall confine my observations strictly within the constitutional issue.
My Lords, before plunging in medias reas I have two brief points to make. First, I cannot reasonably be accused of any lack of sympathy with local authorities or unawareness of the workings of local government. Like the noble Lord, Lord Irving of Dartford, I am a long-time vice-president of the Association of District Councils. I only hope that at the next annual general meeting the noble Lord will not move that I be struck off by reason of the speech upon which I am embarked today!
Many years ago, for reasons lost in the mists of time, I was chairman of the Conservative Party National Advisory Committee on Local Government. In professional life I have advised and appeared for many local authorities in rating and in other matters, as well as for citizens in dispute with them, though not, I hasten to say, both in the same cases.
My Lords, the second short point I would like to make by way of preliminary is that I certainly respect the points of view of critics of the Bill expressed in this House, in the other place and, indeed, elsewhere. In this House we have listened to the notable speech by the noble Viscount, Lord Ridley, the distinguished president of the Association of County Councils, who put his case with characteristic force and moderation. In the other place, and referred to by the noble Baroness, Lady Birk, as a former Secretary of State for the Environment, the right honourable and learned gentleman the Member for Hexham spoke with great authority, of course, and when I tell the House that he started his professional life devilling for me, noble Lords will appreciate that anybody who could overcome so heavy an initial handicap must be of exceptional quality indeed. But while respecting and giving due weight to his views and those of others having only marginally less authority, and having considered them carefully, I have come to the conclusion that the Bill is not vulnerable on constitutional grounds.
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The criticism that Ministers are acting in breach of constitutional propriety would only be valid if by this Bill they were derogating from an entrenched and established right of local authorities to exercise unfettered rights in matters of rating. But that is not so. In our constitution, neither local authorities nor any other bodies enjoy entrenched rights of this sort limiting our basic constitutional principle of the sovereignty of Parliament. Such entrenchment is characteristic and is perhaps a necessary feature of the constitution of federal countries. It is spelled out in a written constitution and designed to preserve the rights and autonomy of individual states from encroachment from central government; and such, of course, is the constitutional structure of the United States and other federations. But that is not the case here. The United Kingdom is a unitary state. It operates with an unwritten constitution and has no entrenched provisions. To some this may be a matter of regret; but it is a matter of fact, and the absence of entrenchment is the price paid for the advantages of flexibility and the capability to respond speedily to the will of the people, Rousseau's volonté général.
My Lords, the constitutional position of this country is clear enough—no written constitution, no entrenched rights. Instead, we have the sovereignty of Parliament, and this, together with the rule of law, constitutes what Dicey called the twin pillars of our constitution. The sovereignty and omnipotence of Parliament, as the basis of our unwritten constitution, is and must be absolute. It used to be expressed in the maxim,
"Parliament can do anything except make a man a woman or a woman a man"—
although your Lordships may think that the marvels of modern surgery have somewhat depreciated the value of that exemplar. Prima facie this Bill is a legitimate exercise of the sovereignty of Parliament. Therefore, we must ask the question: is there anything in the nature of the history of rating as a form of local taxation which makes it otherwise? I believe there is not. For that, there are two reasons.
The first derives from the history of the matter. There is a widespread belief that rating as an instrument of local government has its roots deep in history. Of course, that is somewhat of an exagger-ation. Certainly it is not part of the common law of the country. As my noble friend Lord Bellwin said, it is a creature of statute. I am sorry that the noble Baroness, Lady Birk, found this phrase offensive. In fact, it is somewhat of a truism in these matters, and the noble Baroness does my noble friend too much honour if she describes the authorship of it to him. As she pursues her studies in the course of the Bill, the noble Baroness will no doubt become more familiar with it.
The origin of rating is to be found in the Poor Relief Act 1601, one of the last statutes in the last year of the Elizabethan era, levied by what we now would call the rating authority, then known by the unlovely name of "overseers". The Act reads oddly to modern ears but its language heralds the beginning of the modern welfare state. The first object of this "weekly taxation", as it was called, was to finance the accumulation of sufficient material to "set the poor on work"; secondly, to "relieve the lame, impotent, old and blind unable to work," and the third was to put

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out children to be apprentices. That Act remained on the statute book until the General Rating Act 1967, a consolidating Act bringing together the law enshrined in 30 statutes, starting with the Act of 1601.
Your Lordships will, of course, know that the Act of 1601 started our welfare state on a local basis then, but of course that was not for ideological reasons but for logistical reasons: the constraints of time, space and movement. The modern welfare state, however, as we now call it, has emerged on a national or central pattern, with local authorities acting primarily on an agency basis, carrying out the duties imposed by Parliament. The financial position reflects the statutory position. Parliament imposes the obligations and meets half the cost of local government. It cannot therefore plausibly be said that the history and origins of rating and local government give any credence to the suggestion of unconstitutionally in this measure.
My second reason why rating is not an exception to the general rule of the sovereignty of Parliament derives from the basis in law of the power to levy rates. Essentially, as my noble friend said, the power is a creature of statute, as indeed is most local government. The power has no long lineage, in our context, deriving initially from the Act of 1601 via the Municipal Corporations Act 1835, and arriving at the General Rating Act 1967. It is all statutory; and what Parliament has given in the exercise of its sovereignty Parliament can clearly alter and amend in the exercise of the same sovereignty, without committing any constitutional outrage.
The constitutional propriety of the Government's approach is emphasised and proved beyond a peradventure by the fact that the purpose and content of the Bill lies fair and square within the parameters of Parliament's particular and peculiar responsibility as controller and custodian of the national finances. This is because more than half of local authority net spending is met by Exchequer grant—in other words, moneys voted by Parliament and paid for by the taxpayer. In these circumstances, to deny to Parliament the right and power to protect the taxpayer would be to separate responsibility from power; and we know whose prerogative such separation is said to be.
There is certainly no constitutional principle involved here. Indeed, it could more plausibly be argued that a constitutional breach would be involved if Parliament abdicated its power and responsibility and forswore its opportunity to protect the pockets of the taxpayer and the citizen, to whom it owes electoral responsibility.
There is one further constitutional principle involved and that, too, supports the constitutional propriety of the Bill. That is the ancient and basic principle of our unwritten constitution: "no taxation without representation". This, through the centuries, has been taken to mean that the duty to pay taxes lawfully imposed confers a parallel right: the right to a voice, however small and indirect, in the decision that leads to their imposition. That right is expressed in the form of a vote at the election of those who impose the tax. That principle is notably breached in rating, as we have it today, in that of the half, or nearly half, of the
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money for local expenditure raised locally (that is other than by the Exchequer grant) nearly 60 per cent. is contributed by those with no voice in the election of those who impose the rate—notably by industrial and commercial firms, whose views on this matter are well known and understandable.
It may be, of course, as many have said, that a long-term solution to this particular problem might be found in some alternative method of raising the money to fund local expenditure; but that time is clearly not yet and not much hope derives from the many studies undertaken, including the very authoritative Layfield Report under its distinguished chairman.
I conclude by saying this. I would not claim perfection for this Bill; nor, I imagine, would my noble friend or his colleagues. After nearly four decades of experience of legislation, including some Bills of my own presentation, I would think that a perfect Bill was extremely unlikely. I see my noble friend Lord Thorneycroft has one exception in mind with which we were both concerned; but I think it is right to say, as a general proposition, that you do not look for perfection, more particularly in the earlier stages. But, albeit not perfect, this Bill is entitled to a clear acquittal on the main charge of unconstitutionality. Its purpose is praiseworthy and its content appropriate for the attainment of its purpose. Of course it can be improved, and your Lordships will have the chance to improve it. I am sure that its consideration by this House will be characterised by a desire to improve and a willingness to amend. At this stage, however, and in that confident expectation, I would respectfully commend the Bill and its content to the House.
6.6 p.m.
The Lord Bishop of Southwell: My Lords, may I, too, begin by congratulating the noble Lord, Lord Bottomley, on his maiden speech? He has an affection, as I have, for a part of the world which ecclesiastically is called "London over the border" and where I spent some very happy years.
"The main argument against the bishops sitting in the House of Lords is this—that those most constant in their attendance get a certain worldliness by their position there, rather than any largeness; that they do not make good Life peers, and do lose their influence over their clergy so far as they assert themselves in the House of Lords. There is not a bishop on the bench who has ever discussed the question of the franchise, the question of democracy from a spiritual point of view at all, or who has ever spoken on such a question with anything like the authority, for instance, of Lord Shafiesbury".
Your Lordships will have realised that those are not my words but a quotation from the Spectator of exactly a hundred years ago.
However, whatever your Lordships' view may be about the performance of the present Bench of Bishops, I hope you will view it in the light of our proper role. I have never found that role better enunciated than by Archbishop William Temple in his book Christianity and Social Order. He said:
"The method of the Church's impact upon society at large should be twofold: the Church must announce Christian principles and point out where the existing order at any time is in conflict with them. It must then pass on to Christian citizens, acting in their civic capacity, the task of reshaping the existing order in closer conformity to the principles. For at this point technical knowledge may be required and judgements of practical expediency are always required."

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In short the Archbishop was saying that,
"the Church may tell the politician what ends the social order should promote but it must leave to the politician the devising of the precise means to those ends."
This, I believe, is the proper role of a Lord spiritual. Whether I can stick to my last is something quite different, but I shall try. My concern is that I shall be judged not as being either for or against this Bill, but as asking basic questions which should determine our view whichever side we take.
The first point at issue regarding this Bill is where decisions should be made. Have central government the right, perhaps even the duty, to control decision-making further down the line at county or even district level? The point of principle here is surely the value we put upon each individual as a person. Christian principle puts the highest value on the individual. He is a child of God, of absolute worth independent of his usefulness to society. The state exists for the citizen, not the citizen for the state. The first aim of social progress must be to give the fullest possible scope for the exercise by the individual of those powers and qualities which are essentially personal, and the chief of these is his capacity of exercising deliberate choice. It would seem to be a cardinal principle of democracy, to put it no higher, that the state has the duty to maximise the opportunities for personal decision-making and to remember that the concentration of power and choice in a few hands is, in principle, harmful.
The second issue is that we are being asked whether local authorities are to be trusted or coerced. The principle at issue here would seem to be that policies must be made on the assumption that unregenerate man is essentially self-centred. We are dealing not with an ideal society, but with individuals and groups all of whom, in greater or lesser degree, are seeking to promote their own ends. The dynamics of society is a maelstrom of competing self-interests. The duty of the Government must then surely be to ensure that the best checks and balances are in operation to prevent the worst excesses of self-interest.
Personal freedom can never be unlimited. Indeed, it requires self-discipline, and the function of law is surely to be a sort of schoolmaster to educate the indisciplined. The aim of the Government in this Bill in seeking to curtail the powers of local authorities, has at least this to say for it; namely, that self-discipline is essential, and if it is not being exercised then discipline has to do its educative work.
The third issue raised by this Bill is the issue of consequences. It is said that the financial consequences of this Bill will be unthinkably damaging. This need not be so. In my own diocese, our work is in large part dependent on the voluntary contributions of individu-als. There is much work that we feel to be essential, but we do not have the money to do it. We live in stringent times: but that is not all loss. Stringency makes you define priorities and prevents you from planning in a slovenly way and from being extravagant. We have found that the shortage of money exerts a godly discipline and can be a spiritual advantage.
Having said that, there comes a point when for lack of any resources the work folds up. One particularly vulnerable area, as others have pointed out, is in the
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field of education. It is expected that the Inner London Education Authority, as we have been told, may have to do without about £120 million. That is a lot of money by any standards, and cannot but have vast consequences upon children and those who teach them. Some teachers are already overwhelmed with the difficulties that they face. Larger classes and fewer resources, if that is what will result, will increase stress and diminish education. I feel that the Church and the state, too, are failing the younger generation. We do not give the young the priority which they deserve. Was it not Winston Churchill who said in wartime,
"There is no better investment than putting milk into babies"?
Surely the principle at stake here is that we are as responsible for the consequences of our actions as we are for the actions themselves. (That is why I personally can never be a pacifist). The Government in this Bill are not free to be selective about which consequences they will take into account and which they will not. I personally agree with the monetarist policy of the Government: they are keeping us out of the doghouse. But no Government can ignore the results of their policies on people, particularly the people who are least able to look after themselves.
One result of this Bill will surely be that local authorities will use the limited money which they receive or can raise on those things which they must statutorily provide, and there will be little or no money for supporting good work done, often economically and with great personal devotion, by people working for voluntary organisations. The Government are surely right in wanting to encourage initiative and self-help, but the one thing which voluntary societies cannot do without is money. They have none of their own; they have to beg for it.
We all get a horrific number of appeals for the support of good causes of one kind and another. The Government must accept responsibility for the consequences of their actions in limiting the expenditure of local authorities. It is people and agencies who are least able to help themselves who will be the first to suffer. Age Concern, for which I have some responsibility locally in Nottinghamshire, has movingly expressed its anxiety that there will be less help available at a time when, for instance, an attempt is being made to care for the mentally and physically handicapped in their own homes, rather than in institutions. If support for projects such as this is denied, where are we?
The Churches often provide back-up for the social services, without which the social services would find it hard to cope. In Nottinghamshire, a considerable and much admired contribution is made by the Church in the field of adoption, but this is heavily dependent on money from local government sources. Perhaps I might be allowed to underline one other principle in the words of the Bible:
"Judge not that ye be not judged. For with what judgment ye judge ye shall be judged, and with what measure ye mete it shall be measured to you again".
I quote from the Authorised Version, as it appears to be the version most of your Lordships prefer.
I ask the Government whether it is really wise to concentrate power in their own hands centrally in London. Should the government of our country fall

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into less scrupulous hands, men will find a tool well fitted for their purpose. The dispersal of power, so that those who exercise it can be more easily watched and so have to be more accountable, is surely prudent if nothing else. I have no doubt that in some strange translation of the Scriptures our Lord's words have been translated as:
"What is sauce for the goose is sauce for the gander".
Your Lordships will have observed that I live in Nottinghamshire. The limits which the Government have imposed on the budgets of both city and county have been carefully observed. We are, on the whole, a law-abiding people. At least, we know that it is foolish to pay heavy penalties if we can avoid it. Our fear is, however, that we shall not know how to avoid being penalised, because the proposals in this Bill give such general and sweeping powers to the Government that we may find ourselves playing the game by a different set of rules, of which we have not been previously appraised, and find ourselves inadvertently overspending.
Trust is a very precious commodity. Destroy it and it is hard, if not impossible, to restore. Would it not be wise for the Government to seek to promote mutual trust rather than aggravation? We are all in the business of trying to do the best for our country and our people. Would it not be best to mobilise goodwill, rather than create conditions that discourage, impoverish, and inflame tempers?
I fear that I may not have kept fully to the role which I originally described. I have done my best. All of us here in this House feel very strongly about this Bill. All of us will be speaking, to a certain extent, from the standpoint of self-advantage or prejudice. Too much is at stake for us to act in unprincipled or misguided ways. Surely our task is to think and think again, and to think on the Floor of this House in Committee, until we get this matter rightly resolved.
6.20 p.m.
Baroness Faithfull: My Lords, may I, too, congratu-late the noble Lord, Lord Bottomley, on his maiden speech. I presume to intervene in this debate on the basis that during my 40 years of professional life I have spent 18 years in the Civil Service, 20 years in local government and two years with voluntary organisations. During my time in local government, I was a chief officer for 18 years. May I therefore say to the noble Lord, Lord Marsh, that I do not have a vested interest—or, if I do, it is in the government of this country as a whole.
The Bill poses a dilemma, particularly for those of us who support, and support to the full, Her Majesty's Government. I would suggest that the Bill seeks to do the right thing the wrong way. I say, "the right thing" because, as has been said by my noble friend the Minister, the policy of Her Majesty's Government is to reduce public expenditure in order to reduce the domestic rate, which would benefit all ratepayers. Furthermore, as has been said by other speakers, such a policy would reduce the high commercial and business rates over which owners of businesses have no control. In some areas—and only in some areas—high rates are hampering productivity. I know of two firms in the Midlands which have closed down, due to the
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burden of rates, thus producing less rates for the local authority concerned and adding to the unemployment in the area. As for local authorities which are not conforming to the fiscal policy of Her Majesty's Government, it could be said that in some cases, though not all, they are undermining, for political and other reasons, the democratic system of the government of this country.
As I have already said, I believe that the Government are seeking to do the right thing the wrong way. First, the Bill reduces local authority responsibility and therefore accountability. I agree with the right reverend Prelate that philosophically, psychologically and emotionally this is bad. I wonder whether my noble friend the Minister has calculated how much extra money central government will have to spend because local councillors, believing that it is not their responsibility and that it is outside their control will refer people making complaints about their local services to central government.
Secondly, the strength of government in this country has been the interplay between central government and local government. Managerially, we have been fairly clear as to the role of each. Central government has laid down social policies and set standards, while local government has administered those policies and dealt with domestic issues to meet local needs. Those needs affect the day-to-day life of the citizens of this country, and they vary from city to city, from town to town and from rural area to rural area. Will not the Bill disturb the balance between Whitehall and town hall? Thirdly—this point has been mentioned by the noble Lord, Lord Bottomley, and by other speakers—will the Bill not be something of a Pandora's Box? Should there, in future, be a government of a different complexion, would we then be so pleased to have centralised so much of our local government?
Other noble Lords have spoken about Part II of the Bill. In the interests of time I shall not repeat what they have said. However, I believe that Part II is superfluous. Many other speakers have spoken about voluntary organisations. Is the Minister able to say how he can ensure that local authorities will meet the needs of the voluntary organisations under Section 64? The policy of Her Majesty's Government has been to support voluntary organisations and the use of volunteers from all sectors of society. Does not the Minister consider that, realistically, rate capping will not necessarily help the voluntary organisations? The noble Lord, Lord Boyd-Carpenter, said that there is not sufficient time to set up a Royal Commission. There have been so many commissions, including those of Lord Redcliffe-Maud and Layfield, that this would be quite unnecessary.
In a debate which was held earlier this year—initiated by the noble Lord, Lord Beloff—I suggested that an all-party Select Committee of both Houses should be set up to consider the position. Perhaps other action could be considered. What can the Government do, as an alternative to rate capping, to prevent excessive spending and to protect the ratepayer? First, could they not continue to use, but with greater stringency, the grant weapon by reducing the proportion of local expenditure financed from grant aid? Secondly, because in the short run the

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accountability arrangements in local government are not working well, in particular for non-domestic ratepayers, the Government could concentrate on ways of protecting them either by a system of local or national rate capping for non-domestic ratepayers only.
Thirdly, the Government could make use of their inspectorate—the Home Office, the Department of Health and Social Security, the Department of Education and Science, as well as the Audit Commission—to point out ineffective spending, spending which is frequently justified on the grounds of "policy" but without any analysis of the expected and resulting benefits. Again, an alternative approach would be to accept the selective powers but to put a time limit on their use, pending a thorough review of local government finance, particularly into ways of increasing political and consumer accountability.
I cannot support the Bill. I understand why it has been brought here, but if we go forward with it as it stands I believe that we shall live to rue the day.
6.29 p.m.
Lord Kilmarnock: My Lords, in the seven years during which I have had the privilege of sitting in your Lordships' House, this is one of the worst Bills, if not the worst, that I have yet seen, whatever the provoca-tion for it in certain cases. I dare say that some of your Lordships who have sat here for 10, 15 or 20 years can say the same. The noble Lord, Lord Broxbourne, made a powerful speech in defence of its constitutionality; but, just thumbing through, alarm bells start jangling:
"… in making any such re-determination, the Secretary of State may depart from the principles referred to in subsection (2) above … The duties of an authority under subsection (6) above shall be enforceable at the suit of the Secretary of State".
These words are taken from Clause 3. In Clause 4 we find:
"An order under subsection (4) above may relate to two or more authorities".
In other words, it is open-ended and there is precious little parliamentary control.
The noble Lord, Lord Broxbourne, spoke about the sovereignty of Parliament; but there are only three provisions subject to the negative procedure of the House of Commons and only one requiring the affirmative procedure. Your Lordships are to be consulted once, and only in relation to the general powers. Would the conventions by which we are bound allow us to prevent or delay this alarming extension of central government powers? I very much doubt it.
The powers of the Secretaries of State have increased, are increasing, and ought to be decreased. I refer not only to this Bill (in which it is most flagrantly apparent) but also to most other departments of state. To talk of "rolling back the frontiers of the state" rings a bit hollow when one gets a Bill such as this. A few civil servants may have been sacked, but that is about all it amounts to; and all the while, the powers of the Secretaries of State have been making increasing inroads into most aspects of our national life.
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This is not only my view or the view of Opposition parties. It is the view of the Association of County Councils who say in their briefing:
"The striking point about this Bill is the total absence of any limitations on or controls over the powers to be conferred on the Secretary of State".
Again, they say:
"The principles on which designation of authorities or determination of expenditure levels will take place are not set out in the Bill; these principles do not have to be approved by the Houses of Parliament".
As regard the general powers, the associations say quite rightly:
"A debate on an order is no substitute for the time-honoured and tested procedure of Second Reading debates on principles, followed by more detailed examination in Committee".
It is a sad day when a Conservative Government devoted, as I had always supposed, to the best of our past practices, brings such a Bill before Parliament.
I turn to matters more specific. This Bill if passed in its present form would have disastrous consequences for the personal social services which are already under such heavy pressure with inadequate funds. In the current year, taking an average of all London boroughs (both inner and outer) the grant-related expenditure assessments for social services were 78 per cent. of actual expenditure, indicating a cash shortfall in essential services of some £130 million. And social service expenditure is not incurred for fun; it is incurred because of genuine distress or deprivation. London is the subject of the Government's wrath for daring to be a sprawling old city with the standard problems of a large conurbation—and those associated with capital status on top—and for daring in large part to disagree with the Government's politics.
Let us turn to a less sinful area—for example, Cambridge, about which the noble Baroness, Lady Stedman, spoke so effectively. As she told us, to get to target in 1984–85, Cambridge would have to cut a further £3.9 million from their already highly responsible budget. If the cut were applied on a strictly pro rata basis between all the services, education would lose £2.5 million and 155 staff, while social services would lose £0.4 million and 35 staff. Who comprise that neutral word "staff"? They are in real life men and women in charge of residential homes for the elderly, in charge of children in care, working with the mentally ill, and making it possible for the frail and elderly to stay in their own homes through the home help service. As it is not likely that education would bear its proportional share, because there are statutory regulations to educate children, and anyway it takes a year to make a teacher redundant, the social service cut would probably be larger—say £0.6 million or £0.7 million and 50 staff. The following year those cuts would probably double if Cambridge wanted to avoid a 4 per cent. overshoot of target.
This is already a desperate plight and it will be made worse by this Bill. Councils have statutory obligations; obligations under a host of Acts of Parliament. Among them are the Education Act 1944, the Local Government Grants (Social Needs) Act 1969, Local Authority Social Services Act 1970, the Local Government Act 1972, the Housing Act 1974, the Housing (Homeless Persons) Act 1977, the National Health Service Act 1977, the Child Care Act 1980 and the Residential Homes Act 1980—to name only a few.

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Are the Government going to come before Parliament to repeal all those Acts and a few others, too, so that local councils can stay within their externally-imposed targets? No, of course they are not. Even the present Government do not have the stomach for that. So what will happen? Authorities will strive, first of all, to comply with their clearly-defined statutory obligations. Some feel that they are already getting close to the risk of challenge in the courts—for example, on education for children with special needs, minor road maintenance, and footpaths. Authorities will concentrate, naturally enough, on their inescapable duties and will withdraw further and further from the grey areas where their statutory duties are less well-defined.
On the whole, the statutory balance— understandably—leans in favour of children. As far as adults and the elderly are concerned, local authorities are empowered to provide a wide range of services, including residential places, but there is no duty to guarantee any specific levels or standards of service; levels are therefore bound to deteriorate, particularly for the mentally ill and handicapped and the elderly frail.
One successful mechanism particulary under threat is the joint financing between health authorities and local authorities, revised only recently by the Health and Socal Services and Social Security Adjudication Act 1983, in Section 28A. Although nothing is said in the Bill, I understand it is intended that joint financing arrangements (which are essential to the Government's Care in the Community policy) should be excluded from assessment of whether a local authority is spending above its target for so long as the scheme is being funded by both types of authority. But there is a catch, for as soon as the costs are borne entirely by the local authority, those costs will become part of that authority's general spending and will count against target. These "time-expired" schemes as they are called, will cost boroughs belonging to the ALA some £4 million in extra expenditure in 1984–85, which will count against target. If I am wrong then perhaps the noble Lord, Lord Bellwin, will correct me when he comes to wind up.
I give notice, if he does not correct me, that I intend to table an amendment to correct this injustice towards authorities which have shown willingness to collaborate with the health service. The truth of the matter is that the Government want to save money on the NHS by shifting more of the burden onto the local authorities without allowing them the adequate means for the job. There are already some other worrying signs. It was reported in the press recently that in Oxfordshire, health authority schemes involving joint funding for priority services in the community were underspent by £1 million. What is the reason for that? Does the Minister not agree that the local authorities in the area were probably unwilling to enter into partnerships which would eventually land them in the dock for overspending on community care?
The Government have not begun to understand the implications of their own decision to encourage Care in the Community. This was glibly seen as a smart way out of expensive institutional care, without any real
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thought about how an inherently desirable shift in the location of care was to be paid for. Worse than that, this Bill will not allow local authorities to make adequate provision for that scheme, even if their electors want it.
I turn now to the potentially even more devastating effects on voluntary organisations. This aspect has already been mentioned by the right reverend Prelate the Bishop of London and by the noble Baroness, Lady Faithfull. The present Government have done much to support the work of voluntary organisations and have encouraged them to play an active pan in joint health and social services finance arrangements. But this Bill will tend to negate and perhaps even terminate such developments, which have been of such value in providing both residential and day support for the elderly, in assisting one-parent families and all kinds of other areas of this nature. Because of the statutory priorities I have indicated, local authorities will reduce and even withdraw their contributions as a result of rate limitation. This will have a downward multiplier effect on contributions from other sources.
Even if rate limitation were applied to a relatively small number of authorities, they would be likely to be those in parts of the country with high levels of deprivation, where there is a concentration of voluntary organisations. Even those authorities not in the direct firing line are likely to give priority in funding to their directly-employed staff to whom they have legal and moral obligations. That point has been made by the noble Lord, Lord Bottomley. The financial partnership between local government, central government, trusts, corporate donors and the local community in support of the voluntary sector will be threatened. At risk are many local projects or organisations receiving multiple or dual source funding.
For example, the urban programme projects are funded 25 per cent. by local government and 75 per cent. by the DoE, but the DoE contribution is contingent on the LA contribution. Among the projects threatened with closure are the Wycliffe Day Centre for the Mentally I11 and the Frail Elderly in Leicester; North Tyneside's Key Enterprise Workshop providing therapeutic employment for people who have suffered from mental illness—and, goodness knows, mental illness is on the increase; a women's refuge in Southend; the CAB in South Shields, and so on. I could give your Lordships a list as long as my arm, but I want to mention briefly one statutory body—the probation service—which, if this Bill becomes law and if the metropolitan counties are abolished, will have to link with a larger number of reluctant paymasters in the shape of rate-capped boroughs and other smaller authorities which will simply not be able to carry the burden. Have the Government thought this one out?
Is it not the case that a reduction in the efficacy of the probation service would adversely affect the Home Secretary's policies on community-based alternatives to imprisonment, and very probably developments in crime prevention in the inner cities? Will the Government offer special help for the probation service if it cannot obtain sufficient funds under the new system? Can the noble Lord answer me that? I could go on to talk about the threat to primary schools,

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to books and equipment, to adult education, to youth services and to many other services, but the right reverend Prelate the Bishop of London has already made a powerful speech on that sector and I shall not follow him down that road.
All this turmoil, all this upheaval and all these uncertainties and anxieties—are they worth it to save £200 million to £300 million a year, or about 0.1 per cent. of GDP, if that is what they will save? With great respect to the noble Lord, Lord Marsh, it will certainly be impossible to save the £770 million supposed overspend without a swingeing cutback in services that could hardly be called frills—meals on wheels, incontinence laundry services, and so forth. Those things are at the coalface of life.
In view of the fact that local government expenditure has risen more slowly than that of central government, can financial savings have been the real motivation behind this proposed legislation which has incurred such vast resentment and criticism through-out the country and within the ranks of the Government's own party? No, it cannot. The Bill is not directed primarily at expenditure considerations but is rather a weapon—a blunt and clumsy one at that—in the civil war that central Government has unleashed on local government.
None of this was necessary. If the Government wanted to restrain the behaviour of a few irresponsible authorities, they did not have to start capping rates or abolishing elections. They had a tool ready to hand—proportional representation in local government elections. The noble Lord, Lord Boyd-Carpenter may laugh, but as Sir Ian Gilmour pointed out in an article in the Guardian on 2nd April, at the last GLC election Labour won less than 42 per cent. of the vote yet gained a majority. Much the same happened in West Yorkshire, Merseyside and Greater Manchester where Labour won under half of the vote but gained 60 to 70 per cent. of the seats. Under PR Labour could have governed only with the support of one of the other parties and moderation would have ensued. Whatever the merits or demerits of PR for our national Parliament, and whether the "strong Government" argument holds up or not, there can be little doubt that local government would benefit enormously from a less politicised and more consensual style of management. I think that was at the back of the mind of the noble Lord, Lord Marsh, at one point in his speech. That would have been a far better course than this really lamentable Bill that the Government have put before us. The Government, as Sir Ian Gilmour said, "would be preserving local democracy, which should be a conservative objective".
We shall get there in the end, but, in the meantime, we have this Bill which we shall strive to amend and ameliorate clause by deplorable clause at later stages. As a first step, and as an earnest of our intentions, I urge all of your Lordships, from whatever quarter of the House, with an interest in safeguarding our freedoms from further incursions by predatory Secretaries of State, to vote for the amendment moved in such moderate and persuasive terms by the noble Baroness, Lady Birk.
6.43 p.m.
Lord Beloff: My Lords, I do not know how well acquainted the noble Baroness, Lady Birk, is with the Yiddish language but there is at least one word that she probably does know and that is the word "chutzpah" which is usually translated as "cheek" or "brazen effrontery". In any event, that was the word which welled up in my mind when I read her amendment, because whatever one may think of the merits or demerits of the Bill—and we shall all be tired of its merits and demerits before this Session is much older—it is clear enough that for the Labour Party to present itself in a formal amendment as a defender of local democracy is straining credulity.
I have only to mention the fact that it was the Labour Party which insisted, through legislation, on imposing non-selective education upon all local authorities, whatever the wishes of those local authorities or their electors. One can well imagine how keen noble Lords opposite will be on local democracy supposing that the directly elected ILEA, having got rid of Mrs. Morrell and her friends, thinks that perhaps London could do with a few grammar schools for its bright children in all the communities. Therefore, let us not have that. It is paralleled, of course, by the spectacle, which I see when I attend meetings on this subject, of bearded, corduroyed gentlemen, who only yesterday were cheering Mr. Benn's demands for the total abolition of your Lordships' House, getting down on their knees to ask us to assert our constitutional rights to amend legislation.
On this side of the House I regret to say that there are people, with genuine convictions, in favour of local democracy; regrettable in that they may, through their devotion to this belief, fall into the socialist trap which has been laid by the Opposition in the form of this amendment. I would only appeal to them to avoid this trap and to consider that, whatever their views may be, they are not identical to the views which we have heard expressed from the Opposition Benches.
There is, I am afraid, in all these subjects—and notably perhaps on this side of the House—a degree of nostalgia whenever local government is talked about. Some people defend the present structure with the same vehemence as their spiritual or physical ancestors no doubt defended the unreformed municipal corporations or the government of counties by quarter sessions; or as their more remote ancestors in the reign of Henry II, crouching before the fires in their ancestral halls, muttered about "the creeping centralisation of these damned itinerant justices". There will always be people who get their history wrong. As the noble Lord, Lord Broxbourne, pointed out, there is no constitutional issue involved in the sense of the amendment. What it comes to is that no one in this country has, or ever has had, the right to raise money from his fellow citizens by compulsory means except under the authority of Parliament. That is what the lawyers mean by "creatures of statute". The county councils—or the metropolitan councils, if you like—are simply the most recent examples of the power of Parliament to delegate its tax-raising powers, which it alone has, to elected representatives of the people, just as in centuries before the 19th century they were exercised by delegation through people who were not elected at all.

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The noble Lord, Lord Bottomley, whose maiden speech I, too, much enjoyed, referred to academic opinion. I should like to introduce one academic quotation by my late and very distinguished colleague, Sir Llewellyn Woodward, in his volume in the Oxford History of England entitled, The Age of Reform and the chapter which is called, "The Organisation of a Civilised Social Life". He states:
"The development of an honest, competent and properly supervised system of local government stands out as one of the most original features of the 19th century".
I call the attention of your Lordships to the phrase "properly supervised". That passage was not written in the light of this debate. In fact, it was published in 1939. But it does encapsulate the British experience; that there is, and must be, a necessary collaboration between central government and the organs of local government. In the event of a clash between them the priority must naturally rest with the centre which holds the constitutional authority, but for most of the time there need not, and should not, be a clash since both sets of authorities are primarily there in order to serve the interests of the individuals: not the interests of councillors; not the interests of employees of local government associations: not the officers of the association of local government associations—but the ordinary citizens.
This interaction is unavoidable. It has been mentioned by, I think, the noble Lord, Lord Irving, that local government as a spender of excessive sums does not come out so badly, because over that period central government also increased their expenses. I think that it is well known to your Lordships that the major reason for this increase has been the increased burden of unemployment on the central Exchequer. But that unemployment itself, as was pointed out by the noble Lord, Lord Harris of High Cross, and others, is in part the result of the abuse of the rating system by local authorities; so that in a sense the expenditure of central government is a by-product of the excessive expenditure of local government, and one cannot seriously try to dissociate the two.
I think that most noble Lords would agree that if we could find some resting place in this long dialogue—some system of financing local government which would eliminate these clashes that arise—all of us would be better pleased. Probably one ought to be thinking about this, though that is no reason for postponing the action, the immediacy of which the noble Lord, Lord Marsh, called to our attention. I think it is important if we do this that we should look very carefully at the nature of this country and at the system which it has inherited, because we cannot begin in this, or indeed in any other field, as though we were starting from scratch.
I thought it conspicuous in the paper circulated by the Association of District Councils—one of the documents which did most to persuade me that this Bill must be right—that it talked about a so-called "European charter" insisting upon a high degree of local autonomy; and the United Kingdom, by the reckoning of the people who drafted this document, comes out very badly. There is apparently more central control in the United Kingdom than in other European countries. But if we leave aside the federal
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system in Germany, is it not the case that the reason why we have more central control is that we have much more local activity and many of the services which are provided locally here are in fact centrally provided in other countries, so that this issue of control does not arise? I think that those who deluge us with printed material might do some homework.
We have to think of the situation that we confront. The noble Lord, Lord Irving, referred us to, in his view, two very eminent political scientists, Professors Jones and Stewart. I had always thought that they were simply the representatives to the academy of NALGO, but clearly I was wrong. They are answered I think, if not directly, in an article by a much more distinguished political scientist, Dr. Nevil Johnson of the University of Oxford, in The Times today which I heartily recommend to your Lordships.
But there are in the situation, if you start analysing it, only three points. These are the points which have made it impossible so far to carry out either Layfield or any of the other suggestions that have been made for modifying the system. First, because this is a relatively small and in many senses a homogeneous country, the citizen expects equality of service wherever he is. This means that it is no good saying that we are going to give the kind of autonomy which will enable one local authority to spend more, let us say, on the aged, and the other more on the children, because the ratepayers—the citizens—of the local authorities will say, "We must have the best in each service of what is observable elsewhere"; so the system of equal services means an inevitable upward pressure on spending targets.
The second point is that, because we are not only a homogeneous population but very closely packed, and moving in our daily lives, businesses and professions between one local authority area and another, there is no form of taxation that has been devised other than rates which can treat localities as localities. We move; real property does not move. That is the root of the failure to devise a satisfactory system of local income tax and a satisfactory sales tax such as it is possible to practise when you are 200 miles from the next shopping centre, and so on.
The third and final point, which has been frequently referred to in this debate, and I therefore need not enlarge upon it, is that, desirable as it may be for the council's ultimate responsibility to be to its own ratepayers and citizens, this cannot be the case given the distribution of the rate burden and the fact—which we must cling to and which the noble Baroness emphatically dealt with—of our commitment to universal adult franchise. If everyone in a borough or county above the age of 18 has a local government vote, that will not correspond in any degree to the differentials in the rating burden either as between private citizens or, still more, as has been pointed out, between private citizens and business. Therefore, there probably is no way in which we can simply assure responsibility by saying that it is a matter for the voters.
We can in Parliament, even without proportional representation—the King Charles's head of the noble Lord, Lord Kilmarnock, comes out with the most unfailing regularity—in our general elections vote for a Government formed, let us say, by noble Lords and

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their friends opposite who will be in favour of a greater degree of redistribution of income or one who would favour a lesser redistribution of income and other things that go along with these. That cannot be done within the current framework of local government. Therefore, though I agree that a permanent system is what we need, I feel that it would be most misleading to regard our search for it as a reason for not taking the measures that we now need.
6.58 p.m.
Lord Northfield: My Lords, I hope that in this clash of extreme opinions from the two sides there is room for somebody standing more to the middle in this argument. At least, that is where I shall try to stand this evening. If one takes a rather longer historical perspec-tive, we all end up somewhere with the noble Lord, Lord Thorneycroft. In a sense this unhappy Bill is everybody's fault and nobody's fault. It is everybody's fault, including all of us in this Chamber, because in the past 10 years we have not got right the boundaries between the powers of local government and the powers of central government—a matter to which the noble Lord, Lord Thorneycroft, referred.
In the period from 1972 to 1974, by common consent and with all of us behind it, we carried out a so-called reform of local government. We made much larger units. We gave those larger units a stronger sense of status, stronger ambitions, an expanding role and a greater sense of responsibility, and, as the noble Lord, Lord Kilmarnock, said, we also heaped on them all sorts of statutory duties. It is not surprising that that happened at that time, because it was part of that early 1970s feeling of rising expectations and optimism about the never-ending period of growth. We can see that, in a sense, we got it wrong at that time, or at least we sowed the seeds of our present problems. If one looks at it this way, local government expanded from employing 2 million people in 1963, to 2.9 million 20 years later—a near 50 per cent. increase in people employed as part of that expanding work of local government that we all went along with and probably openly supported at that time.
In a sense, it was also nobody's fault, if one looks at this longer historical perspective, that all of this went wrong. What happened was that in the 1970s along came the oil price rise, the fantastic levels of inflation, the breakdown in our society of co-operation on wages and price restraint, the beginnings of world recession and the exposure of the essential backwardness of British industry. Great Britain Limited was pretty well "clapped out", as we discovered when world recession and the one-world economy, with other leaders more efficient than ourselves, began to show us how much regeneration we had to do. It is not surprising, and it was nobody's fault in a way, that a Government—and I believe a Labour Government would have had to do the same—had to come along and say, "To some extent we have to restrain these ambitions of the more optimistic, and the period of rising expectations of the 1970s, in the interests of reconstructing Great Britain Limited".
I think that is the essential historical background of how it has all changed in a decade; and what we are now facing, in my view, is a Bill that results from that about-turn that we have all had to do. With this in mind, what can one say briefly about the Bill?
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I guess it is popular in many areas; there is no doubt about that. I would also say it is an exaggeration to make a great constitutional issue out of capping a dozen out of 450 local authorities. I would go so far as to say that a lot of these high spending local authorities—and I do not treat it as quite a joke in the way that the noble Lord, Lord Marsh, did, although many of his examples were not only funny but also telling—if they want to buck the trend, if they want to say, "No" to Governments, if they want to exert these new powers that they thought they had attracted to themselves in the 1970s, they are their own worst enemies.
I take one example that I have been able to examine for myself in the last few days. There is a body called LAMSAC. This is the local authority body, managed and run by the local authorities, offering efficiency packages—good local authority practice sold to them in packages. This is a body that has done very good work indeed. It provides this sort of advisory service in a series of what are called packages. It is run by a local nine-man board. It is working successfully. It has (for example) sold one of its packages on how to be efficient in collecting refuse to 223 local authorities. In one borough alone, the borough of Southwark, it saves that borough £700,000 a year in showing it how to run that service efficiently. Similarly, it saved a million pounds a year in Havering. It has packages not only for refuse collection but for assessing the housing staff you need, assessing the staff you need for architectural services and so on; and it is, I repeat, a local authority own-provided service.
Let us have a look at some of the overspenders in the light of this example. I telephoned LAMSAC and said, "Tell me what the following authorities have used of your services". Answer: Basildon, top of the spenders, nothing (it has never been near LAMSAC); Lambeth, nothing; Camden, a small efficiency survey of no great importance on bonus calculation; Greenwich, a small audit, no full package; Hackney, only a job evaluation of professional staff; Islington and Lewisham, nothing. In Southwark, yes; it is used to good effect—the package that I have mentioned, saving them £700,000 a year. Brent, a small one: job evaluation of professional staff—and so on. If you want to buck the trend and say that you want to spend high—and I respect a great deal of that from the history that 1 have been outlining—at least you should set out to say, "We are doing it as efficiently as we can, and we will go through all the tests you like to prove it". But when great figures like that, £700,000 or a million pounds, are at stake in one service alone, I believe it is right to say that others in that list of overspenders should be using that service, especially as it is provided by their own local authorities through a co-operative effort.
So I say first, then, that I cannot see a great constitutional argument, and I think some of these big spenders who will not face up to this need to draw back from the heady days of the 1970s, perhaps, are to some extent their own worst enemies.
But then I come to the other side. There is something to be said against this Bill as a permanent piece of legislation. For all the dangers that the noble Baroness, Lady Faithfull, for example, and other speakers, mentioned in this debate, it is not right to put on the statute book a Bill of this kind for all time, to

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enable small numbers of civil servants to dictate to local democracy in the way that this Bill can be said to do. My own view is that the right way forward—and here is my middle position coming out—is to limit this Bill in this Chamber to, say, three years' operation, and then to say afterwards, just as we do with the Northern Ireland legislation, that if the Government want it renewed they should come forward every year with a justification, with an affirmative resolution to have it carried on beyond that point.
Yes, I took the point made by the noble Lord, Lord Marsh, and even the point made by the noble Lord, Lord Thorneycroft, that you will not rush this Government or any government into a reform of local government, and into getting these boundaries of power right all over again, overnight. But the more I see in business life and in professional life the more I know what a timetable does. Give this Government a Bill for three years and it will work like the devil to find the right solution, rather than come back in three years' time and say, "We have still no solution for this knotty problem that the 'seventies and 'eighties have put on our plate".
So I think we could limit it to three years. I think we could then ask for it to be renewed only by affirmative resolution. This is a role that your Lordships' House can carry out, if I may say so. We have done exactly that on telephone tapping. We passed an amendment which forced the Government to make a statement saying, "All right; we admit we have not really got it right so far, and we will now introduce a proper Bill". I suggested exactly this approach, although the House did not listen to me (and I am not complaining), on the issue of selling local authority old persons' dwellings. I said, "The problem is that the Government have not got a policy for housing the elderly; if we put an awkward amendment into the Bill it will force the Government to come along and say, "All right; we will now find a policy for housing the elderly and the ones who cannot afford to house themselves". I think we can do exactly the same in this Bill if we play our cards correctly. We can say to the Government, "You can have this Bill for a certain period, but then you must work doubly hard to find a more lasting solution which is more in line with our democratic traditions."
I have one further and final point. If you look at these authorities that are overspending by the Government's standards, what are they? I think the noble Lord, Lord Kilmamock, (and I think one of the Bishops, too) said that they are nearly all on the Government's list of most deprived urban authorities. They are nearly all of them struggling hard to keep up with the deprivation that many of them have as inner urban authorities in decaying cities. Just look at the Government's own list of most deprived local authorities. I give them in the following order, the Government's own list of the top 20: Hackney, Newham, Tower Hamlets, Lambeth, Hammersmith, Haringey, Islington, Brent, Wandsworth, Southwark, Manchester, Camden, and so on.
It is no coincidence that those authorities are the high spenders. In many cases they are struggling to try to keep up the level of services that they believe will counter the deprivation and decay that is all around them, although, as I stated earlier, not with the greatest
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efficiency that I should like to see. I hope that when we look at the longer term solution we will examine whether local government as such, even with partner-ship programmes, even with special grants to the most deprived areas, even with extra money—£450 million, I think it is—in the urban programme, is really capable of tackling some of these most deprived and decaying urban areas.
I speak feelingly because my new town of Telford is not a new town by one standard. It is a vast reclama-tion project of a "clapped out", dying industrial area. I know what it has taken in terms of years and money to regenerate that area to the new beginnings of prosperity. I do not believe that many of the local authorities in this country are capable of doing the job of reviving some of the most dying areas of this nation. We may well have to move over, as I have often said before, to some form of roving urban development corporation. After all, the Government set up at least two urban development corporations, on the principles of the new towns, to tackle parts of London and parts of Liverpool. We may need one to go round without coercive powers helping the other cities that are most deprived to revive themselves.
I come back to where I started. I believe that we encouraged all this optimism and these expectations in the 1970s. I believe that we had to damp them down. I believe that the high-spending local authorities most concerned have a case, but not a very good one when you look at the way they have behaved themselves in regard to LAMSAC and other things I could have mentioned. We have to look more fundamentally than ever for the right solution. That might involve something more than simple local government attention to social conditions and the conditions of decay and deprivation which are making some authorities want to spend more than the Government think is right. I hope that this sort of view will be taken into account in seeking a more long-term solution.
7.12 p.m.
Baroness Vickers: My Lords, I should first like to join with other noble Lords in congratulating the noble Lord, Lord Bottomley, not only on his maiden speech but also on the splendid service that he has given to the other House and now to this House and to the Government of the country as a whole. I recall that, as Commonwealth Secretary, the noble Lord was very much liked in all the different countries and that he and I had several jaunts together—on business, of course. We have tried to work hard for the Commonwealth Parliamentary Association ever since.
I have always understood that it was a Conservative tenet that local authorities should be reasonably autonomous in that, provided that they adhered to major economic and other policies of central government, they were free to attempt to meet local goverment problems largely out of locally raised taxation; in other words, from local rates. In Wiltshire, we have formed a committee with the CBI, local farmers, managers of factories and so on, in order to help local government and to help people to understand what local government is all about. It has been very successful. We have been able to put before local councillors ways in which the rates could be

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lowered, and particularly to co-operate with them in the work that they are doing.
This Bill tempts a government to be a dictator. When the Bill is on the statute book, it will give all future Secretaries of State the power to dictate to local authorities. That may be acceptable so long as the dictator is benevolent. But with changes of government happening so often nowadays, so much power in the hands of the Secretary of State may not be acceptable in the future to everyone concerned.
This is what I am concerned perhaps to see changed in the Bill. I should like to draw attention to the fact that supporters of the rate capping proposals point to alleged inefficiency in local government as the need for central government to take a more direct role on what is essentially a local issue. However, the following factors place the performance of local government in its true context. During recent years, local government spending has declined by 3 per cent. in real terms while that of central government has increased considerably. Local government spending has taken a much smaller proportion of the GDP and of public spending since 1974–75.
I should like to deal particularly with the smaller councils as they may be facing some difficulty. I should like to give the example of Plymouth. By any number of comparative indicators, the performance of Plymouth city council compared with other compar-able non-metropolitan district councils points to a relatively efficient organisation. It has the lowest net cost of all services per capita, the lowest manpower complement per 1,000 population, the lowest rate levy for 1983–84 and the best performance of expenditure compared to the grant-related expenditure assessment. Notwithstanding this, the proposals in the Bill, particularly the general or reserve scheme, could well mean that a ceiling is placed by central Government on Plymouth City Council and other councils like it—a rate levy irrespective of their performance in recent years vis-à-vis other comparable authorities.
Since the original rate-capping proposals were announced back in August 1983, a number of subtle changes have been made which will exacerbate the proposals and which to date have received little publicity. Originally, any local authority spending below its grant-related expenditure assessment or with a budget of less than £10 million, as mentioned by the Minister, would be excluded from the rate-capping proposals under both selective and reserve schemes. The subtle change now introduced is that these thresholds apply only to the selective scheme, and that if the reserve scheme is introduced, they will have no effect at all.
I should like to talk about the workings of the Bill. The Secretary of State has to lay before the House of Commons the report which names the authorities designated for rate capping and the principles he has used. The order fixing the actual rate capping for individual authorities has to be laid in draft and approved by resolution of the House of Commons. The speed with which the arrangements would have to be done creates much anxiety for the local authorities. The mechanics entail a great deal being done in a very short time. The Secretary of State first has to have the information on which he can decide which authorities
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shall be designated. He has to decide, presumably some time in the late autumn, in which financial year he will do this, mainly on the basis of past expenditure, perhaps assuming that no local authority will be able for practical purposes to bring down expenditure suddenly. If he confines himself to blatant cases, he may be on reasonably safe ground.
Next, he places the report before the House of Commons designating the authorities for rate capping. He then decides the maximum he will allow each of them to spend, translates this into the maximum rate which may be levied or, in the case of counties, fixed by precept on the districts. He has to do this as soon as practicable after the rate support grant announcement; say, late December. A local authority may then ask him to fix its total expenditure at a higher level and he can increase it. But, if he does, he can impose on the authority,
"such requirements relating to its expenditure or financial management as he thinks appropriate".
This will mean, I suggest, some very hasty negotiations and ad hoc decisions because the local authority will meanwhile be having to finalise its own budget in sufficient time to fix its rate or precept before the middle of March.
The power to lay down conditions for increasing the amount of expenditure is allowed in the Bill. The actual ceiling, unless agreed with the local authority concerned, must be fixed in a statutory instrument approved once again by the House of Commons. The tightness of the timetable seems to be recognised, as the Bill proposes a power to fix an interim maximum expenditure. The trouble about this is that, if the Secretary of State ultimately accepts that he has fixed too low a figure and increases it, a supplementary rate will have to be levied.
The Bill provides, understandably, that if a rate is levied or precept made above the level fixed, it is invalid. However, it must be a serious question whether this will lead to financing difficulties for all local authorities. Those lending to local authorities have always been able—and this is a very important point—to rest secure in the knowledge that a local authority will always have the power to levy a rate to meet its liabilities. This reassurance to banks and financial institutions may be killed by this Bill. The money market is extremely sensitive to credit-worthiness, and if only one authority places itself in jeopardy this could lead to borrowing difficulties for all. Even the difficulties of New York last year caused serious questions here for a time.
While total local government spending is of legitimate concern to central government, this Bill will damage irretrievably the long-established principle that local authorities are responsible to their electorate for the amount they spend. Henceforth, ratepayers in areas so designated will have to look to central government for a remedy. All shortcomings in the levels of service will be laid at the door of central Government; there will be an annual bargaining with civil servants as to how much may be spent and, if they are allowed to spend more, authorities may be told exactly how they can spend it. They will also have to furnish further information to the Secretary of State if he requires them to provide it. At a time when there is genuine and justified concern about the lack of

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accountability to ratepayers, it is felt that this Bill will both damage that sense of responsibility and put in its place a responsiblity to central government.
It is the beginning of making local authorities the creatures of central government. It is no answer to say that rate capping may be applied to only a few local authorities; it can be applied to them all. This answer can be tested against the Government's previous statements on grant holdback. In the 1980–81 Rate Support Grant Order the Minister stated in regard to grant holdback:
"It is intended that the power should be exercised—if at all—in such a way as to affect only a very small minority of authorities".
In 1983–84 the number of local authorities suffering holdback is 153. The percentage of authorities penalised in each of the past four years has grown from 2 per cent. to 17 per cent. to 31 per cent. to 37 per cent. This is hardly likely to give the authorities any confidence in a selective scheme for rate capping.
Furthermore, Part II of the Bill contemplates the possibility of the Secretary of State making an order under which all local authorities would be treated as designated as subject to rate capping unless he specifically exempted them. Part II of the Bill is scarcely comparable with the assertion that the Bill is directed at only a small minority of local authorities. It clearly contemplates the possibility of the vast majority of local authorities having their maximum expenditure fixed by central government. I am mentioning all these points because they are points which we can take up in Committee, and I hope that we shall be able to put down some amendments which may relieve some of the anxieties of the many local authorities.
7.24 p.m.
Lord Spens: My Lords, I can be brief because everything that I wanted to say has already been said far more eloquently by other noble Lords. I support the Bill because I believe that our democracy is based here, in the sovereignty of Parliament, and I believe that that is the only true democracy in this country. As the noble Lord, Lord Broxbourne, explained, that sovereignty is absolute. It is not limited. It is not limited either by a written constitution or by any form of federal constitution. It is absolutely absolute and as such is operative by Her Majesty's Government.
We have heard a lot of special pleading, not least from the right reverend Prelate the Bishop of London, about special need for expenditure not to be limited by Her Majesty's Government. However, the noble Lord, Lord Marsh, explained very successfully how those arguments were spurious. I am not inspired by cries that local democracy is being destroyed. There is no local democracy where the electors can vote for councils but have to pay for only a very small proportion of the money that those councils propose to spend. As the noble Lord, Lord Boyd-Carpenter, said, taxation without representation is not democracy.
Therefore, I oppose the amendment. The Bill will not result in any damaging constitutional changes. Our constitution is intact; it is centred here at Westminster, and no damage to it will occur. As for undermining the
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authority and responsibility of local councillors, I point out that it is they themselves who, in a very few cases, have damaged their own constituents by acting irresponsibly as to the amount they have decided to spend. Thirdly, the charge that the Bill will gravely weaken local democracy is quite false, because I do not accept that there is proper local democracy where the proportion of expenditure actually paid for by the electors is less than 15 per cent. of the total bill expended by councils.
Finally, I liked the suggestion of the noble Lord, Lord Northfield, that there should be a limit on the duration of the Bill. The noble Lord suggested three years. Perhaps that might be a little short. But I agree with him that it should be a temporary measure and not be absolutely permanent. I hope that Her Majesty's Government will give that matter quite serious consideration. Before I sit down I should just like to say that, in view of his excellent speech, I wonder how the noble Lord, Lord Northfield, will vote on the amendment.
7.28 p.m.
Lord Vaizey: My Lords, I also want to address myself to the amendment which was so ably moved by the noble Baroness, Lady Birk, and I want to follow the noble Lord, Lord Spens, in speaking a little about constitutional issues which seem to loom very large in the amendment. As this House is a defender of the constitutional freedoms of our fellow citizens, it seems to me right that we should address our minds to that particular question.
It seems to me that what my noble friend Lord Bellwin said from the Front Bench is irrefutable. The relationship between local and central authorities in this country has always been perfectly clear. Elected local authorities have, for most part, been created by statute for the past 100 years. They have been controlled by statute and they have exercised their powers within those statutes. The doctrine of ultra vires has very strongly limited the power of local authorities to go outside the strict terms of the statutes which give them their powers. Moreover, the powers of the local authorities have radically changed. They have changed even within the eight years that I have been a member of your Lordships' House. Since the war they have lost, for the most part, responsibility for health; their education responsibilities have also been radically changed; and housing has become the major activity of many authorities which previously were not housing authorities. They have also lost responsibility for electricity, gas and water.
To talk about the relationship between central government and local government as having been fixed at about the time of Magna Carta, and as being the absolutely solid base of our constitution, seems to me to fly in the face of the evidence. I must say that I was convinced by the argument of my noble friend Lord Bellwin on that particular point.
I do not think that anyone would disagree with the argument that in the longer term there is a need for a rethink of the local government structure that we now have, and especially of its finance. We have distinguished Royal Commissions which might well form the basis for a rethink of this question. But, as the noble Lord, Lord Northfield, so ably said, no party in

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this House has a particular monopoly of wisdom about the structure of local government. It is very difficult to get it right, precisely for the reasons that my noble friend Lord Beloff gave. People in this country, whether they live in Cumbria, Cornwall or Charlton, expect the same level of services, but they have different capacities to pay.
In a unitary system like ours, how one gets a degree of diversity of method of provision while getting uniformity of standards is something to test even the political genius of my noble friend the Leader of the House. It seems to me that it is a question of squaring the circle to a quite remarkable degree, and it is not surprising that every party has failed that particular test. But that is a matter for long-term consideration.
As the noble Lord, Lord Marsh, so ably argued, the task of this Bill is an urgent one. It must be tackled now for urgent and prior reasons. Why? Because a group of councils has determined to act extremely. It has determined to break the constitutional convention which hitherto has governed the relationship between local authorities and central government. I was saddened, and indeed surprised, to see in particular people on the Opposition Benches, who are members of the moderate Labour Party, supporting these councils. I believe that it was the noble Lord, Lord Northfield, who mentioned a list of authorities which have a large proportion of deprived people living within their boundaries. He pointed out that in many respects the list of authorities which will be rate-capped is the same. It might be supposed that the argument is that because they were deprived, they were spending more and therefore they were being rate-capped. But in many cases the essential issue in the equation has been the destruction of the old Labour Party which ran those boroughs and the election—often by very dubious means—of far Left parties.
Let me take as an example my own borough of Greenwich, where I was born, raised and brought up; or the Inner London Education Authority, which educated me, my sister, my mother and my father when it was the London County Council—and it was a great pity that it was ever abolished—and which I had the great privilege of serving as a co-opted member. It was a moderate authority, just as Greenwich was a moderate council. Now they are spending money like water, and to argue that they are raising the standards of public service in those communities is just not the case. It is not true that the Inner London Education Authority is any longer the model of education service for the nation as a whole, as it was when I was a pupil in the London County Council schools. It is not. It is an extravagant authority, badly run and ill-served by its present leadership. That is the first reason why these extremist councils have deliberately taken on the Government, as that amiable character Mr. Livingstone has said. Like the noble Lord, Lord Marsh, I am very fond of Mr. Livingstone; he is a typical Londoner, and I like him for that. But that does not mean to say that I have to support his arguments, which are preposterous.
Furthermore, it is essential to clawback the £300 million or so. To talk lightly of £300 million as if it is nothing, as if it is just pence that one is handing out, is the recipe for the financial ruin upon which this nation
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embarked, as the noble Lord, Lord Northfield, quite rightly said, when we had these enormously raised expectations in the early 1970s which coincided with the world economic crisis. We no longer have the means to spend the money to support those vast and elaborate expectations. As my friend Tony Crosland said on a memorable occasion referring to local government, "The party's over".
I also totally fail to share the view of my noble friends Lady Faithfull and Lady Vickers that an issue of principle is raised by rate-capping. It seems to me that no local authority has ever had the power to spend as much as it likes on what it likes. That, quite simply, happens to be, and has always been, against the law, let alone the constitution. It has just been straight-forwardly illegal.
What we are arguing about here, as is argued about in virtually every statute affecting local government—and there must be dozens of them which pass through Parliament every year—is where we draw the boundaries between what the central decision-making power is and what the local decision-making power is. In each case it seems to me that that is a matter of pragmatic decision rather than an issue of high political principle.
I want to turn very briefly to the speech of the right reverend Prelate the Bishop of Southwell. He said that this Bill would adversely affect the services in the deprived areas. Quite honestly, in the face of the evidence, I find that difficult to believe. Is the right reverend Prelate aware that the pupil-teacher ratio has improved in every single year in the last 15 years during this period of economic retrenchment? To talk about cutting back in education when the amount of money being spent per pupil in real terms has been steadily rising is, with great respect, just not the case. What we have seen—and we have seen it in the Inner London Education Authority—is frivolous and wasteful expenditure on extremist measures of the most intolerable kind: a kind which I venture to suggest many of your Lordships would not willingly subject your children to.
Is the right reverend Prelate aware—and I do not necessarily ask for an immediate answer—that his quite right and doctrinally absolutely correct advocacy of the doctrine of responsiblity of the individual for his own life and his own decisions, is not the same in any argument that I can think of as arguing that great metropolitan authorities purporting to represent millions of people should have the right to spend what money they like. How one moves from the doctrine of an individual taking a decison about his own life and his own resources to the doctrine of Mr. Livingstone and his friends taking decisions about what happens to all of us who live in London seems to me to be an unexamined assumption in the right reverend Prelate's otherwise extremely moving and important address.
With great respect, I think that the arguments about local responsibility are based upon a misunderstanding of the role and status of local government in our constitution, and they rest on the paradox to which the noble Lord, Lord Harris of High Cross, drew attention, which is that if one is concerned about individual responsibility, the only way to give people individual responsibility is to leave them free to spend their own money as they like.

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That is precisely what the Bill is about, as it is intended to stop this constant escalation of rates, which are now pauperising whole ranges of our population in the inner cities, where there are deprived people living on supplementary benefit in order to pay the extravagant rates which are levied by the local authorities. The road to pauperisation is not the road to individual responsiblity, and I very much hope that argument will not be directed against this Bill.
7.39 p.m.
Lord Milford: My Lords, I have a great many questions which are niggling in my head. Why has this Bill come about at this moment? Where are we going? Why is there this attack on the welfare state now? Why are the Government prepared to alienate the thousands of welfare workers, many working in voluntary' organisations?—for the recent mail of so many of your Lordships indicates their fear and their worry that they will not be able to carry on if this Bill becomes law.
Why is this Government onslaught on our democratic local government insititutions taking place? Are the central government hungry for more power, more control, to weaken any opposition to what they think British society should be? We must look at the Government's basic aim: the Tory philosophy that society must be a capitalist one, and that Britain must be made safe for capitalist business interests.
The battle over rates is nothing to do with alleviating any financial burden on the local people. It is to lower the rate money to be spent on social services so that there will be more to help local business. Does not this avowed aim link up with dismantling the nationalised sector of industry and the drive for privatisation? This is not a Bill in isolation. This Bill fits into the whole of the Government strategy to impose their image on Britain.
The right of ordinary people to elect their representatives on a local council, to choose him or her, who they think will look after their needs, can be frustrating to a central government which want to impose on us local government authorities who will carry out their wishes and their policies. To them, grass-root democracy can be a threat. So this Bill is to cut back local democracy. For decades the British people have slowly been advancing to more, deeper, democracy; towards true democracy, where fundamental power is in the hands of ordinary local people. And it will be up to them to decide where the money is to be spent. They would know what the people in their area need.
I can remember how thrilling it was when I was a councillor for several years to be able to work with the people and ask the people what they needed. These people would tip the scales towards the aims of more hospitals and hospital staff, more buses, more schools, more decent houses: and away from the vast expenditure on Trident and other weapons, and on a larger and larger army of police. Already we have had 300 police to protect the eviction of 30 Greenham women, and thousands of police to surround the miners and stop them going into other counties. Already we are going backwards. We are giving up some of our democratic rights.
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This capping Bill insists on limiting local authority spending and not taking into account what is needed in the particular locality, be it housing repairs, accommodation for homeless families, aid for the elderly (and we must remember that the elderly are fast increasing in numbers) of children's welfare and education. Instead of tackling such needs as these, the Government are possessed by the question of finance and expense. On expense, what of the army of unemployed created by the Government costing?
The Minister's speech contained no reference to people, no deep concern for the needy, the old, the handicapped. It was an inhuman performance, I felt. What about the voluntary organisations and the wonderful people who run them? I can thank the Government for giving me one thing that has affected me personally. Because of the fear and horror of what this capping Bill will mean to their institutions and organisations, I have been invited to visit and to see what wonderful work these voluntary organisations are now doing, and what less grants, or the cutting off of grants altogether, will do to them. During these visits I have met wonderful, devoted, committed people doing a terrific voluntary job for society. This Bill will almost certainly put paid to most of their work. I have had a vision of what a real democratic welfare state could be.
Again, I have been in touch with some aspects of the work of the GLC, particularly on the question of racialism. This year is the year of the Defeat of Racialism, and the GLC has organised a tremendous drive to get rid of racialism in London. I live in the borough of Camden. Its Committee for Community Relations has written in despair over how this Bill will prevent it from providing a service to the community, from helping it to continue to assist the black community. Since the Government have withdrawn many hundreds of millions of pounds from authorities in the London area, including Camden, the only alternative if they are to carry out their anti-racialist work has been to raise the rates.
If this Bill becomes law, Camden tells us that it will have to cut back drastically on voluntary organisations and its work on the ethnic minority community. The conclusions of a letter I have had from the Camden committee are as follows:
"The future of our organisation and our work is seriously threatened by your proposals.
Many ethnic minority organisations will vanish without trace because of the lack of funding.
The effect on community relations appears not even to have been considered by your Government but is likely to be disastrous".
But, again, the Minister did not appear to show any human emotion about such situations in his speech.
We are only at the first stage of the Government onslaught on local government and democracy, and it cannot be just coincidence that this Bill is brought on alongside the Government's announced intention to review the whole structure of social benefits.
7.48 p.m.
Baroness Gardner of Parkes: My Lords, much has been said in this debate, and I do not therefore intend to repeat points that I might well have made at an earlier stage. I support this Bill and believe the stage has been reached where only measures as strong as this

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can help the hard-pressed ratepayers. The case put by industry is well known to me, and I have spoken in this Chamber before on the impact of rates, particularly in central London, and the way in which businesses are moving out.
Like most Members of this House, I have been bombarded by pieces of paper from all sorts of groups and organisations pressing their own cases. I attach much weight to the CBI evidence of the importance of this Bill to future industrial prosperity. As a member of the Greater London Council I also receive letters, usually from individual constituents, and these have made clear to me where my sympathies must lie; with the hard-pressed ratepayer, domestic as well as business.
The domestic ratepayer has no alternative but to pay whatever rates are demanded. If you have no means to pay you get a rate rebate. If you have a hard-earned, hard-saved small amount of money, you see this being swallowed up by rate demands, and then see the money being used for purposes you think of as being either frivolous, wasteful, or just plain wrong. You can do nothing about it. My support for the Bill lies in the fact that I know how much it will mean towards helping these people.
We heard earlier in the debate that the co-ops succeed because they have to be aware of costs. As a shopper the individual has the option to buy or not. There are ways to economise; they may be difficult but there is a free choice. With rates there is no choice. You pay your rates or eventually you face imprisonment. I believe that under the Bill someone will be able to refuse to pay above the permitted limit, if anyone attempts to levy rates beyond that.
I congratulate the noble Lord, Lord Bottomley, on his excellent maiden speech, but one of his remarks worried me. I hope the Minister will allay my fears in due course. This was the remark that in the course of time these powers could be used to force up the spending of low-spending authority. The Minister's remark in his opening speech, that even the thought of this Bill was having an advance effect, may be true. But I should like to point out to your Lordships that the seeming reduction in the GLC precept from over 39p to 36p in the pound is nothing but a confidence trick. For the last two years the GLC has collected excessive rates from Londoners. Now it creates the illusion of a reduction by giving them back a little of their own money, while in reality increasing expenditure by over £100 million in a single year.
At a meeting a few months ago of the GLC special committee—the committee against abolition—the Conservative side suggested that it might be time for the GLC to consider moderating its policies and its expenditure. This was flatly rejected. Reference has been made in the debate to the GLC police committee; although the authority has no police responsibility, it has such a committee, more thought of as the anti-police committee.
I well recall the meeting at which a grant application for setting up a monitoring police group was to be considered. An application for £40,000 plus was before us in one of the boroughs described in this debate as deprived. The GLC member was an old Labour member who had represented the seat for
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many years. The chairman asked if the committee would delay the decision until the member arrived as he would like to seek his views. The member arrived and was asked his opinion. He replied instantly. He said "I would not like it at all. I think it would be very divisive. We have no problems with the police in my constituency. No, I ask you to turn it down". The chairman said: "Thank you for your views". The grant was approved instantly.
To put the expenditure of this police committee into context, for 10 month from April 1983 to the end of January 1984 there were 72 applications for funding for anti-police activities, all but one were approved and £697,838 was granted. The women's committee refused five of 325 applications in the same time. Those approved were to cost over £4,700,000 and the total grant approved in that 10 months was £34,900,000 plus—just under £35 million. I mention these figures because many noble Lords who have spoken are imagining that we are talking about small sums of money. These are anything but inconsiderable.
The right reverend prelate the Bishop of London told us that this Bill would undermine responsibility. I am convinced it is because there is such a degree of irresponsibility already that this Bill is necessary. My dental surgery is in Islington; one of the deprived boroughs quoted as benefiting from ILEA. He may see things from a different angle to me. In over 25 years I have seen the precept for ILEA go up and up—it is 80p in the pound today—but not the educational standard, which has worsened since it went comprehensive.
When we interview applicants for the job as chairside assistant we apply two simple tests. First, we ask them to write their own name and address on a piece of paper. Most manage that, although sometimes it is hard to read. Secondly, we give them 10 patients' cards and ask them to file them in alphabetical order. The failure rate if about 75 per cent. What is wrong with the inner London education system that even the most basic standards are not achieved? The outer London borough that I represent, Enfield, provides a better education at something like half the cost. Many of the people living in that borough have moved there from inner London because they were not satisfied with the future offered to them in central London.
It is simplistic to think that the seven most deprived boroughs cause their own problems. They do now, but they are the result of socialist policies pursued over the years which produced vast areas of council housing, such as in Tower Hamlets, without industry, business or local opportunities for employment. Efforts to reverse the situation are proving very difficult and money is being thrown away in ill-considered and extravagant schemes.
The noble Lord, Lord Northfield, made the point in his speech that the divisions and barriers between local authorities and Government were unclear. They never used to be unclear. The GLC seems to have established conventions from 1964 to 1979, and it is only since then that it has attempted to be a mini-parliament; debating Liverpool, apartheid, Northern Ireland and all sorts of topics which have nothing to do with the running of London. It is this type of effect that has caused this Bill to become necessary. I regret that it should be so, but I see no alternative. I support the Bill.
7.57 p.m.
Lord Monson: My Lords, I take genuine pleasure in being able to support the noble Lord, Lord Bellwin, wholeheartedly at last, certainly on the general principles of this Bill though not necessarily on every tiny detail.
Almost exactly 3½ years ago I moved an amendment to the Local Government, Planning and Land (No. 2) Bill which effectively introduced the principle of rate capping, albeit with a flexible foil cap like that on a milk bottle rather than a wired-down champagne cork. More precisely, the aim was to limit rate rises to the rise in the cost of living index, unless the Secretary of State with the approval of the House of Commons, as shown by affirmative resolution, decided otherwise in a particular case. I was ably supported from the Government Benches by the noble Lord, Lord Ellenborough, whose expertise in these matters is far greater than mine and whom I look forward to hearing later this evening. However, we were told—albeit in the most courteous manner characteristic of the noble Lord, Lord Bellwin—that, apart from the predictable technical defects of our amendment, such an idea was totally unthinkable and wholly unacceptable to the Government.
Now at last, the Government have seen the light. The sinners have come to repentance; for which millions of ratepayers all over Britain will be grateful. This is not to say that rate capping is a perfect long-term solution; and to this strictly limited degree I agree with the noble Baroness, Lady Birk.
Obviously some improved method of financing local government is desirable in the longer term, but it is not proving easy to find the right method. The noble Lord, Lord Beloff, gave us a few reasons why this should be so. Even if we were to get rid of the practice of representation without taxation, which is at the core of the present problem, we should still have taxation without representation to contend with, by which I mean the dilemma of the business ratepayer. My noble friend Lord Harris of High Cross and the noble Lord, Lord Boyd-Carpenter, both dealt with this point.
It is possible to conceive of a situation in which every local government elector is, at the same time, a local government ratepayer or a local government taxpayer, but nevertheless an extravagant high spending council is voted into power—possibly as the result of a promise to create some 10,000 or 15,000 new jobs. Such an eventuality would be vastly less likely than under the present dispensation, but it could still happen on rare occasions. In such circumstances, business rates would soar, businesses would be driven out of the area, unemployment and poverty would soar in consequence and it is central Government that would have to step in to pick up the pieces. It is impossible to conceive of circumstances where central Government could totally wash their hands of what goes on in local government, unless a region like the self-styled "People's Republic of South Yorkshire" were literally to become a wholly self-governing and, therefore, self-financing republic; and I do not think that that is very probable.
Some people have claimed that this Bill is unconstitutional. Frankly, this is rubbish. I think that the noble Lords, Lord Boyd-Carpenter and Lord
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Broxbourne, said as much. We have no written constitution in this country. Our unwritten constitution evolves automatically year in and year out, according to the demands made on it. Our present system of local government, is I believe, no more than 100 years old. France traditionally has a far more centralised system of government than we have ever had in this country or are likely ever to have, even after this Bill becomes law. But surely, nobody would claim seriously that France is a dictatorship.
For this reason I think that we should resist all attempts to limit the general powers contained in Part II of the Bill. Why should not ratepayers in Conservative-controlled areas, in the unlikely but nevertheless possible event of their councillors being extravagant; why should not ratepayers in Liberal-controlled areas and even those in Independent-controlled areas,—inconceivable though it would be for Independents to put a foot wrong!—be protected just as much as ratepayers in 20 Labour-controlled areas? Any agreement to restrict these powers would risk giving credence to Labour claims that Labour councils are being singled out for victimisation.
Let us look again at exactly why this Bill is necessary. If any Chancellor of the Exchequer were overnight to put up the price of beer by as much as 6 pence a pint or to raise the annual road fund licence by as much as £20 per annum at one fell stroke, there would be hell to pay and the survival of the Government might well be threatened—even though neither of these measures would add more than £20 per annum to the average family's expenditure. However, let that same family's rates go up by five times that amount, by £100 per annum, and there would be an almost, not quite, deafening silence. People will generally put up with it and, indeed, it is considered rather bad form not to put up with it. The reason for this is obvious. Virtually everybody pays tax at the national level. Even non-smoking, teetotal, non-motoring, retirement pensioners pay VAT on many of their purchases. In contrast, only a small minority of the electorate pays rates and even fewer pay rates in full. Until this anomaly is removed it is vital that ratepayers retain the protection conferred by this Bill.
May I make one point to the right reverend Prelate the Bishop of London, who was understandably concerned about the dwindling resources that would be available for certain worthy voluntary bodies. Is it not more seemly for the ratepayer to make donations voluntarily to such organisations—which this Bill will enable him to do by leaving more of his own money in his own pocket—than that he should be forced to do so unwillingly, at one remove, through the agency of the local authority?
I am bound to say that it is a pity that the form of this Bill has to be restrictive rather than permissive; in other words, that the local authorities are forbidden to ask for more than X or Y. From every point of view, not least the public relations point of view, it would have been better if instead the ratepayers had been absolved from the legal requirement to pay more than X or Y so that, for example, a ratepayer whose rates last year totalled £800 would not legally be required this year to pay more than £840, assuming inflation at 5 per cent. His council could still demand as much as they liked, perhaps £900 or £1,000 or £1,200 and, if

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the ratepayer wished, he or she could pay the entire sum. But he would not be obliged to pay more than £840.
The noble Baroness, Lady Gardner, seemed to be under the impression that the Bill already provides for this. I hope that she is right and that I am wrong, but that is not the way I interpret it. Technically difficult though this might be, it would have made the Bill even more widely welcomed and, what is more, it would have prevented the dangerous possibility, to which the noble Lord, Lord Bottomley, drew attention in his magnificently delivered maiden speech, of a future Government of an opposite political persuasion to this one forcing councils to spend more rather than less. However, it is probably too late to do anything about this now, assuming that I have interpreted the Bill correctly.
My Lords, I have always believed that this Bill should have been entitled the "Ratepayers' Protection Bill". It would make its purpose far more easily understood by the general public, and even more popular than it promises to be already. But I read not so long ago that the honourable Member for Hampstead, Sir Geoffrey Finsberg, had independently come to much the same conclusion and had suggested that it should be entitled the "Protection of Ratepayers Bill." I think that his title trips slightly more easily off the tongue than does mine. I therefore propose to table an amendment to change the Short Title of this Bill to that suggested by the honourable Member for Hampstead. I hope that your Lordships will seriously consider supporting it.
8.9 p.m.
Lord Campbell of Alloway: My Lords, with deference to those of your Lordships who oppose the principle of this Bill, and in particular to those with years of experience in the affairs of local government, such as the noble Baroness, Lady Stedman, and other noble Lords, surely the speech of the noble Lord, Lord Harris of High Cross, on the meretricious aspect of local democracy, met a main criticism; and, surely, no doubt the exposition by my noble friend Lord Boyd-Carpenter on the constitutional position, the overall economic policy and the business wastelands devastated by high rates, met another. As to the constitutional issue, not only do we have a unitary system but to carry a reasoned amendment against the Government in the circumstances could, in itself, constitute a serious breach of convention.
The power to levy rates but not to tax derives from the Municipal Corporations Act 1835. To say that the institution of local government is but "a creature of statute" means only that it has no prerogative or common law powers. There is no pejorative connotation whatsoever, which the noble Baroness, Lady Birk, appeared to resent. It is the challenge of this mere handful of "city states" to central authority which accounts for three-quarters of the overspending which must be met. For not only have the traditions of local government broken down, as stated by my noble friend Lord Bellwin: the traditions are openly flouted and traduced by these high spenders, afflicted by the motivations of Marx or the madness of Thrasyllus, who, as noble Lords will remember, went down to the
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Piraeus to imagine that all ships which entered the port were his own. Unless we now codify what was conventional we shall do no more and no less than to abrogate constitutional government, and we shall sell out to those whose interest lies not so much in the lawful conduct of local affairs but in acts of civil disobedience and confrontation. As every other measure, every other effort, including exhortation, has failed, there must be a compelling case for the introduction of these interventionist measures of selective incidence.
I, too, with the noble Baroness, Lady Gardner of Parkes, and with my noble friend Lord Bellwin and others, regret that voluntary means have failed and that legislation should be necessary. But how else shall we prick this bubble and put these cashiers to flight who act in disregard to the minority interests of 35 per cent., who pay full rates? How else shall we who pay over half of the money spent, without any say whatsoever in the spending, meet this challenge to central authority on matters which lie within the province of government? How else shall the burden upon business, which pays about 45 per cent. of the rates, be eased, the exodus stemmed and confidence in investment regenerated, this both in the local and national interest?
With respect to the noble Baroness, Lady Birk, this reasoned amendment appears to proceed upon a series of serious constitutional misconceptions which are then incorporated and elevated into the fabric of the amendment as reasoning. My noble friend Lord Boyd-Carpenter has stigmatised the call for a thorough reform of local government finance as incredulous. He has laid stress on the substantial delay which requisite consultation would involve. In this, I regret I cannot share his view if it relates to the matter of principle. It is a problem which one day can be resolved, which has been ducked for decades; but, of course, as a matter of timing, this proposal affords no viable alternative to the Bill. The noble Baroness, Lady Birk, said that there is (I quote) "something wrong with local government finance"—and so there is. What is wrong is that the delicate mechanism of that constitutional balance in which rights, obligations and conventional restraints are weighed has suffered a rude jolt, and the balance is out of true. This mechanism must be repaired and this balance reset to strengthen, preserve and, indeed, protect the ethos of the institution of local government according to tradition and convention.
As the noble Lord, Lord Bellwin, said, local priorities upon matters which properly lie within the province of local councillors are in no wise affected, and there will be no weakening of local democracy, as was suggested by the noble Baroness, Lady Birk. I take on board the point made by the noble Baroness, Lady Stedman, that there should be some uniform procedure which takes fair account of changes for the setting of targets. No doubt Her Majesty's Government already have this in mind. But this affirmation of authority on the part of central Government in no way damages the relationship between central and local government; quite the reverse. It is only timely and requisite that this measure to preserve such relationship as exists, or did exist, between local and central government according

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to constitutional custom and usage, should receive the approval of your Lordships.
8.16 p.m.
The Earl of Halsbury: My Lords, if all the propaganda shrapnel which has showered on me in the last few weeks had been metal rather than paper, I should be as full of holes as a pepper pot. I have been trying to learn what it is all about and I am most grateful to several noble Lords who have organised tutorials for various groups in this House—the noble Lord, Lord Sandford, the noble Lord, Lord Tennant, on behalf of the CBI, and even the noble Lord, Lord Bellwin, himself, who gave some of us a tutorial on what is at stake. The hour is late, so I shall be brief. Unrepentantly hawkish as I am, I wholly support the purpose of Part I. A Government must govern; rebellious irresponsibility must be clobbered—to my mind it is as simple as that. We cannot have 400 different councils initiating 400 different national policies for the country at their pleasure. They do not exist in order to be decorative or to have fun kicking their heels and playing politics; they exist for the purpose of relieving central Government of the heavy burden of administering central policy in localities each one of which has unique features differentiating it from its neighbours, and requiring central policy to be modified in the light of local knowledge but sticking as closely thereto as possible. In many of these contexts, party politics, of which we hear so much, are quite irrelevant. There can be no specifically socialist as opposed to capitalist method of sewage disposal.
Having said so much, I come to the first part of the amendment, and here I join issue with the noble Baroness, Lady Birk, over her choice of words when she spoke of power sharing. There is no sharing of power as power is shared between the House of Lords and the House of Commons on a basis of traditional amity between the two Houses. What there is, is delegation of authority—quite another matter. The noble Lords, Lord Boyd-Carpenter and Lord Broxbourne, both hit the nail on the head; what the Queen in Parliament can enact, the Queen in Parliament can rescind—and that is all there is to the matter. One can delegate authority, but not responsibility to the source of one's own; that is simple textbook managerial stuff with which I used to coach junior management when I was part of senior management. Parliament is responsible to the nation, for seeing its delegated powers are properly used. To effect this, it must require delegates to account for their use of it. This is a duty, not an optional extra. Again the noble Lord, Lord Broxbourne, hit the nail on the head when he said that, in effect, delegation without supervision is the equivalent of abdication. I cannot agree with the first part of the amendment. The second part of the amendment relating to the form of local government finance is quite another matter. The one feature common to all the propaganda with which I have been showered is that the reform of local government finance is long overdue. It is a can of worms which no Government has been prepared or willing to tackle. What are we waiting for? Have we not had the Maud report, the Layfield report and three Green Papers on the subject? What are we waiting
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for—another report recommending still further unacceptabilities? I want to see some action and not just an exercise in hotching the potch.
Central Government are using local government as an agency for implementing national policies. It is not clear to me, in the light of what I have read or been told, whether the terms of this relationship are clear and unambiguous (as they should be) or whether the incredible complexities of the rate support grant—the block grant or GREA—result in central Government welshing or not welshing on their due contributions. How do Government, for example, discriminate between irresponsible high spending, on the one hand, and inadequately supported high-spenders in poor districts, on the other hand? If they have to put an inadequate support grant on to the rates, is it because the nature of the support grant was wrong in the first instance? Because of the complexities of the system, it is quite impossible for the laity to gain any clear opinion on this; and the whole system is so complicated. I cannot imagine how voters in local government—we hear a lot about democracy—can possibly know what they are voting about.
I am most impressed with the unanimity of what I have listened to and heard of. The complexities of it all leave me bereft of any fixed opinion. This being so, I believe that the Government need stimulation by being made aware of the extent of the very general displeasure at the situation that they, equally with their predecessors—there is no discrimination here between one Government and another—have acquiesced in. I shall therefore vote for the concluding phrase of the amendment, excluding its first part, while supporting Part I of the Bill.
As to Part II, I want to say only this. Wherever there is power there is a struggle for the exercise of it. In Cabinet there is a power struggle between Left and Right or between wet and dry, whichever you prefer, and in Ministries there is a power struggle between the Minister and the immortal Sir Humphrey Appleby. In Parliament there is a power struggle for control of the legislature, and also—and this is what I wish to emphasise—there is a continuing power struggle between Parliament and any Government of the day. Governments are always tempted to exercise more power than Parliament think is proper, and Parliament is always tempted to intermeddle with more detail than Government thinks is wise. Somehow the struggle between the two parties has to be resolved, and for this reason I believe that Part II should lapse after a period which would give Government time to reorganise the finances on such terms as would make Part II unnecessary henceforward.
The noble Lord, Lord Boyd-Carpenter, quoted a phrase from Bernard Shaw which he attributed to the King in "The Applecart". May I remind your Lordships of another line from that same King Magnus when he was at loggerheads with his Cabinet? He said:
"Think once; think twice; for your danger is not that I may defeat you, but that your victory is certain if you insist".
8.24 p.m.
Viscount Massereene and Ferrard: My Lords, I support the Government wholeheartedly. I have been

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absolutely bombarded, as have many of your Lordships, with volumes of paper. It has been flung at me from all sides and I am almost dizzy with it. However, it has not altered my opinion at all, which was made up long before all these papers came. I do not know whether that is a good sign or a bad sign. People say that wise men change their minds. Perhaps I am not wise, but I have not changed my mind over this issue.
I am going to be very short because almost everything has been said, but I should like to make just a few remarks about the high-spending councils. Certainly I am not going to refer to the vast majority of county councils, who on the whole behave themselves excellently. I think it is unfortunate for them that the few high-spenders, numbering perhaps 12 or 16, have rather let the side down.
Three of the things I have been bombarded about by chiefly Opposition organisations are, first, that the Government's Bill is undemocratic; secondly, it is unconstitutional—we have heard a lot about that—and, thirdly, there is reference to a lack of accountability to the ratepayers. Might I just say that what has really surprised me has been the reference to its being undemocratic because, if you are really to be logical about it, local government is not very democratic. As we all know, only one-third of the electorate pay full rates and I believe that, as regards the GLC and one or two other big metropolitan councils, it is only one member of the electorate out of three who pays rates. You cannot really call that very democratic—at any rate I certainly cannot, but perhaps some noble Lords opposite can.
As we have heard this afternoon, all businesses in fact account for 60 per cent. of the rates. Part of the rates is paid for by the Government and the other part is paid by domestic householders, but, as we have heard, these businesses have no vote and so it cannot be said that that is democratic. Businesses, I understand, according to the CBI, supply nearly 60 per cent. of the rates, and last year I think the sum was £6,000 million.
May I continue for a short time on the GLC? There is no doubt that Mr. Ken Livingstone has a sense of humour, but I think he uses it in the wrong direction. What the GLC budget is I do not know, but presumably it is well over £1,000 million a year. Anyway, I understand it is far larger than that of one or two European countries. Who controls that? Are these men, the members of the GLC, with due respect, really fit to control such vast sums of money? Have they had the experience? By their actions in the last year or two, I would say no.
We heard my noble friend Lord Boyd-Carpenter say that since being in office the GLC had spent £30 million to support some pornographic societies—some appalling societies and organisations. It is absolutely intolerable, I think, for a supposedly responsible council to support such organisations. It would be far better, instead of spending that £30 million on those organisations which are really decadent and pornographic, to have spent it on the disabled—
Lord Birkett: My Lords, will the noble Viscount give way? I listened to the noble Viscount's speech. I
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cannot believe that he said £30 million. Would he like to confirm that? I cannot believe that could possibly be true.
Viscount Massereene and Ferrard: My Lords, £30 million included quite a number of organisations: yes, I said that—including, I think, Black Power and organisations of that sort. Also there was quite a lot of literature—rather subversive literature. That is most irresponsible.
We have had quoted in this House today the old saying, "No taxation without representation." In fact, many of the electorate in local government have representation but without local taxation, and that is surely undemocratic. I shall now leave aside the question of whether the Bill is democratic or undemocratic. I shall also leave out the constitutional question, because we have heard a lot about that. It is completely constitutional for the Government to act in this way because, as we all know, local government derives all its powers, financial and otherwise, from Parliament.
I should like to point out that health, sewage and water have been removed from local government. If the Government were to remove education from local government, they could easily do that and set up a board. That would relieve local government of a lot of expense. But there has been no cry about its being unconstitutional if that happened. Regarding account-ability, all the Government are doing is ensuring that a very small number of high-spending councils do not overspend, and do not send into liquidation many of the businesses in their areas. I should have thought that by doing that the Government were showing great accountability to the ratepayers—far more account-ability than the councillors.
I consider that quite a few of your Lordships rather exaggerated what the Government are doing in taking responsibility away from councils. As we have heard today, a council abusing the spending ceiling under the selective scheme cannot be penalised unless the House of Commons agrees; and the majority of councils will not come into that. Anyway, councils with a budget of under £10 million will not be affected at all. Regarding the reserve powers, there has to be a resolution of both Houses before they are imposed on a council, so I do not see that that is such a dastardly act by the Government. The Government are really trying to protect councillors from the folly of some of the actions which they might otherwise take.
Before I end, I should like to remind the House that what is in the Bill was in the manifesto. It was hinted at in the 1979 election and was also in the manifesto of 9th June last year. The public were promised that they would be relieved of ever-increasing rates, and the Government are carrying out that promise, so I do not see why anyone should object. I heartily support the Government on this Bill.
8.35 p.m.
Lord Brooks of Tremorfa: My Lords, we do not have before us a Rates Bill. That was promised in 1974 in the event of a Conservative victory in the general election. This Bill seeks to give power to central Government to limit the rate levying powers of local government. The debate that we are having today

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about local government is not merely on the question of money, as we are led to believe, but on how local authorities use that money and how local authorities rate for local needs. The debate is about the relationship between central and local government, about local government accountability and about the level and kinds of services that local authorities provide.
The narrow terms of this debate have to be challenged. The Government justify this Bill by claiming that local government expenditure is out of hand. But between 1975–76 and 1980–81, local government expenditure in the United Kingdom has fallen by 16½ per cent. Meanwhile, central Government's expenditure has risen by 7½ per cent. But the Government are talking not about the real level of spending, but about whether local government is meeting the targets set for it.
In 1983–84, local authorities in England spent 3.8 per cent. over their target for total expenditure; in Wales the figure was 1.7 per cent. and in Scotland it was 4½ per cent. The targets are meant to be averages and when you look back over the past six years you find that local authorities fluctuated above and below their set targets within what is usually a very small margin. The total level of overspending, or rather deviation from Government-set targets, for 1983–84 is more or less equal to ¾ per cent. of total public expenditure as planned in the February 1983 public expenditure White Paper. So we must not be beguiled by the image of big spending, profligate local government.
The Government make a second claim: rates have shot through the ceiling. Between April 1979 and 1983, rates rose by 91 per cent. and the retail price index rose by 55 per cent. But if you look at local authority spending as a whole—that is, income from rates and grants—it has risen by 54 per cent., which is just less than the retail price index. Government support for local authorities has been sharply reduced and that is why rates have gone up. You cannot pluck a figure out of the air without explanation. Rate rises make sense only when you consider cuts in the rate support grant and the penalty system. The grant percentage—that is, the level of grant as a percentage of local expenditure—has gone down from 66½ per cent. in England and Wales to 52.8 per cent. since 1975. This is a massive transfer of taxation to local rates. Local authorities have had no choice but to increase rates.
The Government make a third claim, which I have heard repeated in this Chamber today: rates are a serious problem for businesses. Much is made of the proportion of rates paid by industry which has no electoral rights in the way that domestic ratepayers do. But how serious is the burden on industry? The noble Viscount who preceded me in this debate said that 66 per cent. of rate expenditure is borne by industry. The noble Baroness, Lady Young, said the same thing some weeks ago. But the director of the London Chamber of Commerce has recently said that it is 40 per cent. We have therefore lost 20 per cent. immediately.
In a learned article today in The Times it has come down to 26 per cent. In my own local authority, rates
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are distributed in the following proportion for 1983–84: 43 per cent. paid by householders, 27.2 per cent. by commerce, 21.8 per cent. by other ratepayers and 8 per cent. by industry proper. If one looks at local authority spending in Wales as a whole, industry and commerce contribute 12 per cent. of their spending. Those are the facts. For the benefit of noble Lords who keep using this figure of 60 per cent., may I say—the CBI has been told over and over again what they are doing— that they are lumping in the whole of the non-domestic element and saying that industry and commerce are bearing that expense. They are not. They are taking into account local authority buildings, public buildings and buildings for which industry and commerce have no responsibility whatsoever. But what do industry get for the money they pay in rates? What would industry do without the roads we build? What would they do about the refuse which we collect? How does one measure the contribution of youth training and education to industry?
The Rates Bill empowers the Government to select 12 to 20 high spending local authorities for rate capping, and it provides in the much discussed general powers for the imposition of rate capping on all local authorities. But what counts as high spending? Are we to use the grant-related expenditure assessments as the yardstick? If we do, we come up with the wrong list politically, hence the anxious questioning by Mr. Bowen Wells, the Conservative Member of Parliament for Hertford and Stortford in the other place, of the Under-Secretary of State for the Environment in January of last year. He said:
"Will my hon. Friend undertake that GRE should not be used as a means of keeping under control, or putting a maximum on, expenditure of local authorities, because that denies local democracy?"
The Under-Secretary of State for the Environment replied:
"My hon. Friend has got it wrong. That is not the function of the GREA, nor should it be interpreted as such".
But if the Government use excess spending over targets, they will be accused of choosing arbitrary figures; so the Government will have to find a way of linking up the hit list to the GREA related method of assessing spending—a little bit of creative accounting or juggling, or even fiddling? What about the practicality of civil servants scrutinising the budgets of local authorities? A bureaucrat's delight, perhaps, but it does nothing for local democracy. It was Mr. Michael Heseltine who, as Secretary of State for the Environment, said:
"I believe that an effectively functioning local democracy can monitor the activities of local councils far better than civil servants at Marsham Street".
Will the Rates Bill save money? Many have argued that the Bill will fail to bring down aggregate local government spending. That is not an argument I intend to enter into tonight. I want to concentrate on the implication that this Bill has for the relationship between the centre and the localities. It was Mr. Tom King who said in the debate about the original block grant proposals:
"There are things that one could do in local government and ways in which local government finance could be approached which would substantially undermine the autonomy and the freedom of action of local authorities. Some people have suggested imposing cash limits on every authority. That would be a very serious step indeed".

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The Bill creates a dangerous precedent. It encroaches on a local authority's power to levy its own rates at a level which it thinks appropriate.
Many have said that this is a constitutional issue—hence our special interest as the House of Lords. It is about the constitutional relationship between central and local government. Many of your Lordships may have seen raised recently the question of Her Majesty's role as Head of the Commonwealth. Her title has no constitutional character, nor does it have any statutory responsibilities; but few would challenge her right, her role, her function, as Head of the Commonwealth, to speak on behalf of those countries. It is a convention which is universally accepted. So it is with local government. Central Government lays out the duties, the powers, the national objectives for resources and services within local authorities. Local authorities are elected bodies with powers beyond the mere administration of services. Local authorities are not meant to be the mere agents of central Government. As the Redcliffe-Maud report on local government said in 1969:
"Local Government is not to be seen merely as the provider of services".
No one denies the sovereignty of Parliament, but there are different ways in which that sovereignty can be exercised over local government. For this Government their legitimate concern in local government has come to mean direct control—direct control in the selective power to cap the rates of chosen authorities, direct control to impose such require-ments relating to local authorities' expenditure or financial management as the Secretary of State for the Environment thinks appropriate. We seem to have forgotten what the words "local government" mean. Local authorities are the only elected bodies outside the House of Commons with executive power. They express the diversity of the United Kingdom. They allow our regions—Wales and Scotland—a modicum of autonomy. They are closest to the people they represent. They are best able to assess local needs. They are, above all, the components of a diffused power. We are talking about local democracy—not a perfect local democracy, but not something to be demolished with a sweep of the hand. This Bill embodies a dangerous concentration of power which destroys the very character established by convention over hundreds of years of local autonomy.
My final contribution to this debate is to touch on what rate capping can mean for an individual authority. What happens to a local authority caught in the double bind of drastically reduced block grants and deprived of the power to raise its own revenue? To maintain the services it is obliged to maintain and to cut expenditure is Hobson's choice. What goes on in those circumstances? Nobody is suggesting that old people will be turned out of their homes on to the streets. Children will still be educated. We have heard a great deal about the voluntary sector—the voluntary movement. This is the area which is going to be affected: the local theatres, the local art galleries, the dance groups and the arts centres. In Wales, many national institutions rely on local government for their survival. For those people who cannot rush off to the National Theatre or to the Barbican in London this is
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the only contact that they have with the arts: the late-night and weekend facilities in libraries, parks, sports centres, youth and old people's centres. I know this from my own experience as chairman of the finance committee in South Glamorgan. These facilities are not just the icing on the cake. Leisure, arts, the environment are what make the difference between life and drudgery.
I am not painting the blackest picture, either. Most of the local authorities on the suggested hit list for rate capping fall into the top 20 most deprived urban areas. Newham is third, Lambeth fourth, Haringey sixth, Islington seventh, and the list goes on. Public opinion is weighted against the Government's proposals. All the local authority associations have rejected the Rates Bill. Major figures on the Conservative Benches in the other place, The Times, the Financial Times, the Guardian are all ranged together in opposition to the Bill. We must not let ourselves be bought off by these concessions. These do not change the substance of the proposals. The Government are implementing their own dogma without regard to criticism. Their rhetoric of freedom is meaningless. Whether it is the sale of our national assets, lock, stock and barrel, to reduce the public sector borrowing requirement or the obliteration of the trade unions, or the botch created by the so-called rationalisation of housing benefits, or the Rates Bill, the Government are plucking issues out of the air in an ad hoc fashion. It is Government by "ad-hoc-ery"; dogmatic "ad-hoc-ery". I simply do not accept that the Government have no alternative but to introduce this Bill. I believe that we have a duty to call for a fundamental review and reform of local government finance.
I finish with this thought. In 1925, Mr. Stanley Baldwin called a special meeting of the Cabinet to discuss a Private Member's Bill which aimed at banning the levies paid by the trade unions to the Labour Party. He had an overwhelming majority in Parliament. Every member of the Cabinet argued that the Bill must be supported. Mr. Baldwin disagreed and said that he would tell Parliament and the nation that his Government were not prepared to use their massive majority to steamroller through a Bill which had provoked acute controversy and bitterness. That is the wisdom which is called for from a Government in those circumstances; it is a wisdom that is lacking in the present Government.
8.51 p.m.
Lord Gisborough: My Lords, I should like to start by congratulating the noble Lord, Lord Bottomley, on his maiden speech. He is an old friend and we had the great fortune to travel through China together two years ago. I, together with many others, was so glad when I heard that he was to join us, and I know that we shall benefit from his wisdom.
I thoroughly support this Bill. We have heard figures—and many figures vary—showing how local authority staff were first cut in the past four years and that their numbers have now started to rise again. We have heard various figures showing how rates have risen more than the RPI—I have a figure of 91 per cent. compared with 55 per cent. Sheffield is up 173 per cent. and Greenwich up 212 per cent. Many others

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have been quoted. All this has occurred during a recession.
The high rates do bear very heavily on people, particularly in London. There is no doubt about that. I have had much correspondence with people in Chelsea. There are many elderly people living there on fixed incomes who find it extremely difficult to stay in the flats and homes in which they have lived for so long. Some are having to move out and are desperate—particularly in the Chelsea area.
Outside London, high rates have encouraged businesses and domestic ratepayers either to set up work outside areas of high rating or to live outside those areas—making it forever worse for those who are locked into the high rating areas. While industry and householders have been squeezed during the recession, and while industry has had to cut back with great difficulty and streamline itself, some councils have ignored the exhortations of the Government and have let rip with their expenditure, and have deliberately spent on frivolous items.
Whatever anybody says, high rates are a severe threat to industry. My own particular example is an hotel in which I have an interest. During the recession the rates have been increased regularly—we are in a high spending area. We have had to increase prices. This has reduced our business, and we have therefore had to reduce our staff quite considerably. Any increase in profits has always been swallowed up by the rate increase. In fact, our rates are the biggest single cost we have. If local authorities will not respond to the Government's request for moderating their rate increases, then it is high time that such a Bill should be introduced and I wish it all the best luck. Meanwhile, the Bill will not affect all those local authorities which have reasonable rates and have not put them up unreasonably.
I am delighted that businesses are to be consulted by local authorities during the formative process of the rates, but one must realise that the business community has complained each year to local authorities which are high spenders, and not a blind bit of notice has been taken of them. All they have got is a free cup of tea at the meeting. Not only must businesses be able to complain to local authorities but they must have recourse to the Minister if the local authorities ignore their views. We have heard how non-voting business rates pay for something like 60 per cent. of the rate bill. Perhaps this is an acceptable figure during prosperity, but in a recession high rates can be a very serious factor. They have raised costs and have inevitably raised prices, they have reduced competitiveness and volume, and they have reduced jobs. Businesses have no vote, and therefore they must have an effective say in the formulation of rates.
I am glad that an explanation of the rates is to be sent to all householders; that is to say, not only to those who pay the rates. I would like to suggest that this may provide an opportunity for some very political messages to be sent at the same time, and perhaps this point should be taken into account by the Government.
In some boroughs, rents and rates are unpaid by a huge number of householders. I wonder whether
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consideration should be given to the question of whether it is fair that householders who persistently refuse to pay their rents and rates should be able to vote on how to spend other people's money.
There are other quite genuine causes of concern and I should like to give a couple of examples—both of which apply to my own county of Cleveland. In education, for example, as well as the GRE, rural counties receive an extra weighting on account of the spread of their schools and the inevitable inefficiency of small village schools. Likewise, metropolitan boroughs get an extra weighting on account of ethnic minorities who have to receive extra tuition in the English language and who also have a certain unemployment problem.
In Cleveland, we have no ethnic population and nor do we have any form of spread. Therefore, we receive very little extra weighting. Yet Cleveland has the largest number of unemployed in the whole mainland. In some of the villages having a population of around 3,000, unemployment rises up to 60 per cent. I therefore feel that the county has been correct in devoting extra resources to the schools in such areas, in order to push the young in those villages out of the poverty trap. Surely half of the weighting that is paid in metropolitan areas is in respect of the ethnic element and the other half is for unemployment. While statistically we may not be due the extra weighting, I believe that the enormous unemployment in Cleveland should account for as much weighting as the ethnic population.
Another example concerns the fire risk. I am quite sure that my county could make economies and must do so, but we have some extraordinary statistics in Cleveland. Some 13 per cent. of our land area is a high fire risk—the top risk. Out of 13,000 hectares in the country, 7,000 are in Cleveland. That is to say, 60 per cent. of the high risk fire areas of the country are in Cleveland. In addition, a figure that does not show up on statistics is the extra hazard due to the proximity of the fire risk to habitation. As in Cleveland, there must be other counties with similar problems—particularly Humberside, although on a smaller scale.
In spite of that terrific risk, our high risk fire areas are weighted the same as "A" risk areas, which puts us in a very invidious situation. High risks should really be rated at one and a half times more. The point of this is that it is necessary to be realistic about particular problems, even though they do not show up on statistics—and it will be extremely difficult for Whitehall to generalise over the whole country, as between one county and another.
There is concern regarding the timetable for the budget. The rate capping for 1985–86 is going to be determined and notified in December 1984. This will leave about eight weeks for counties to discuss their rate with the Secretary of State. Most major authorities start thinking about their budget in about October, for completion at the end of February. Therefore, it may be found that the timescale allowed will be extremely tight indeed.
There is also concern about the Minister agreeing the rate with counties. If the rate is not agreed there will be recourse, as the Bill says, to Parliament; but knowing the complexities of local government finance

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(which many noble Lords know much better than I) and the realities of the parliamentary timetable, I wonder how the detailed arguments for each of the authorities which do not reach agreement with the Miinster will get time to be debated on the Floor of the House in another place.
I now come to those who have talked about the constitution, disfranchisement, making local elections look meaningless, endangering democracy and destroying the very existence of local government. All those phrases have been used, but what nonsense they are. We have heard about the constitutional matter very adequately from my noble friend Lord Broxbourne, and from many others. Rate capping was in the manifesto, and if ever a manifesto was confirmed by an electorate, this time with a huge majority, surely the country knew what it was getting. Central government must be allowed to govern and if the local authorities deny that right they must expect to be forced into it. We have heard about disfran-chisement of voters. Of course, the majority of voters do not pay rates—two in every three. The huge majority of the rates is produced by industry and, of course, by Government. Therefore, disfranchisement already exists.
It is nonsense to suggest, as it has been, that there will be interference in the detail of how local government employ this person or that. It is only the overall limit of cash which is to be controlled. This Bill is only going to legalise the amount of rates to be raised, which was previously accepted by Government exhortation. As Alec Samuels, at the University of Southampton, said, the over-reaction to this has been absurd. Another press report on 17th January said:
"The attempt to depict rate capping as an attack on the constitution is just humbug."
9.2 p.m.
Lord Broadbridge: My Lords, I wish to urge you this evening to support the amendment in the name of the noble Baroness, Lady Birk. It is not a wrecking amendment and is about the only constructive thing we can do with this objectionable Bill at this stage. For in 1974, or thereabouts, the present Government promised a searching review and reconstruction of the rating system, but they have ducked the issue and now, 10 years later, have got themselves into a corner, to extricate themselves from which they have produced this Bill. Doctors who deal with alcoholism have an expression that all you get if you give strong black coffee to a drunk is a wideawake drunk. Our rating arrangements in this country are in a state of drunkenness and this Bill is the Government's strong black coffee.
The rating system is full of inequities. Council services downstream suffer from financial cuts while town hall staffs grow bigger. But this Bill will not get at that. What administrator wants to administrate himself out of a job? In one inner London borough debt repayment, which has to be met, is 44 per cent. of income. Salaries are a further 31 per cent.—and cutting jobs leads to an even greater expense in redundancy payments in the shorter term. This leaves only a quarter of the total available for consideration for cuts. Much of this goes in providing services which are statutory services—such as child care—and have to
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be provided by law; leaving an even smaller fraction of total income available for cost saving. I believe that many labour under the delusion that most of the rating bill is a sort of optional luxury, most of which does not really have to be levied, collected and spent. The fact is that nearly all of it has to be spent on debt, salaries and statutory services before we get to the options.
Before I sit down I should like to re-emphasise one more inequity; which is the lack—for want of a better term—of a commercial vote. In this perhaps I have something in common with the noble Lord, Lord Gisborough. Unless you live over your business as an office, shop or an industrial user, you have no say in the election of your council which administers the rates. As a result, in some inner London boroughs about two-thirds of the voters qualify technically as ratepayers without paying full or, indeed, any rates as a result of rate rebate. If you are baking a pudding and forget to put in the plums then you have had it; the only thing to do is to chuck it away and start again with fresh ingredients. That is what the Government should do now. I again urge your Lordships to support the amendment tabled by the noble Baroness, Lady Birk.
9.6 p.m.
Lord Mottistone: My Lords, I should like to include myself with those who have offered congratulations to the noble Lord, Lord Bottomley. It is remarkable that he was able to make what must have been an uncontroversial speech, by our rules, on a very controversial Bill without anyone noticing whether he had or not. Let us hope he gives us splendid speeches in future. I should also like to give my thanks and congratulations to my noble friend Lord Bellwin on the Front Bench. I think that only the noble Baroness, Lady Birk, has done that. I thought he gave a very' good introductory speech to lead us into this Bill. As usual it was a very mild one, although perhaps his winding-up speech will not be quite so mild.
I shall be as brief as I can. To take the amendment first, the constitutional issue was very well dealt with by my noble friend Lord Broxbourne. That, and the undermining of authority and the weakening of local authority features, were very skilfully dealt with by my noble friend Lord Boyd-Carpenter, and, indeed, by many other noble Lords. They have also been dealt with very well in a couple of excellent articles in The Times—one on 29th March by my honourable friend Mr. William Waldegrave, entitled "Power house or parish pump?", and one in today's Times entitled "Rate-capping: why all the fuss?" by Professor Nevil Johnson. I believe that everybody should have read those articles, particularly the second one, before they took part in the debate. Perhaps we should then have had no speeches at all. It was interesting that the noble Lord, Lord Brooks of Tremorfa, included The Times among those who were against the Bill. Those two articles would indicate that it is not wholly against it, or perhaps the noble Lord is misinformed.
I turn now to the Bill. I have been advised on it by the CBI, a fact which I should tell your Lordships. I welcome the Bill for the restraining features of Part I, the reserve powers in Part II and the obligations for consultation with industry and commerce in Part III. A few amendments may come forward on detail, but

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in principle all those points are much welcomed by industry.
Although other noble Lords have done so, I too should like to say a few words about the effect of rates on industry. It has not perhaps been put in this particular way, and it is worth taking into account. First, business rates as a cost to industry rose by over 75 per cent. between 1979 and 1982, while all other costs to industry, and the retail price index, rose by under 50 per cent. Rates were going up then. The year 1982 seems to be the last full year for which I have figures. The situation has probably become worse since then, particularly in the high spending areas.
Next, business rates do not in the main act as a payment for services. The noble Lord, Lord Brooks, said that they did, but I think that your Lordships will agree that many local public services are not directly used by business. For one thing, some of the bigger companies handle their own refuse collection. For another, education, which, as everybody knows, represents the largest single percentage of all local authority costs, is not of direct benefit to business. It is a benefit to employees who are parents but not to the business itself. It is fairer to say that rates for a business are a tax and not rates in the sense that they are meant to be to the householder. As a tax they do not, as is generally the case with other taxes, relate to ability to pay. For example, corporation tax relates to profits made; income tax relates to the income that somebody gets. But business rates are paid regardless of the profitability of the company, and thus they are a bad tax.
Although I do not go along with the amendment, I go along with many noble Lords who have spoken, including my noble friend Lord Thorneycroft, who say that this Bill is a holding item to deal with a specific point. But I think that the Government—and certainly they have promised to do this in two successive elections—need to go at the whole business of rating again and certainly business rating. Domestic rating is rather different but, as I have tried to indicate, business rating is really a form of taxation. Perhaps it should be treated as such and handled differently for that reason.
It would be very nice if my noble friend the Minister could say that the Government will not drop the idea of looking at rates altogether just because this Bill is before us, but will have it in mind as something to tackle. They may not reach a conclusion. I think that we are all agreed that it is a frightfully difficult matter. We had the business of the Green Paper in the previous Parliament. We did not get very far, except to know what would not do. We must not give up. We must get it solved somehow.
Coming back to business rates, I have one other point to make. An enormous number of the bigger businesses, and indeed many of the smaller ones too, are especially strong in the areas of the high spending local authorities. In supplement to what I have been saying, they are particularly badly hurt by the uncontrolled nature of the rates. In all respects uncontrolled business rates are profoundly bad for industry and hence act strongly to make our industry uncompetitive in the world market, to the detriment of the country as a whole. I think that it is fair to say that it is only when industry is fully competitive that
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the country has the resources with which to fund all the services—the social services, the National Health Service and all the other local authority services. These are funded only when the country has lots of resources. If these are stultified by hampering the competitiveness of our businesses, the country will not be profitable and the problems that are before us will keep recurring.
There are other small details of the Bill, such as partial business derating, mothballing relief and the abolition of rates on empty business premises, which will be the subject of amendments at a later stage of the Bill. But to sum up, I welcome the Bill for its dealing with a particular, immediate problem. I trust that it will be given a Second Reading without difficulty and that the irrelevant amendment will be firmly rejected by your Lordships.
9.14 p.m.
Lord McGregor of Durris: My Lords, I speak from a double interest: as honorary president of both the National Association of Citizens' Advice Bureaux and the National Council for One Parent Families. It is therefore no part of my intention to make political, party or even controversial points.
The Minister, in his opening speech, referred to the anxieties of voluntary bodies and said that he did not believe (I hope I am quoting him accurately) that high spending authorities "will sacrifice genuine voluntary bodies to their high spending nonsenses". But why should they not? The Minister gave us a catalogue of what he regarded as the follies of such authorities. Surely, on this argument, one folly is as likely as another, and it would be an imprudent voluntary body which did not take that possibility into account. Moreover, I think he was over-optimistic in his account of the possible effects of the Bill. I wish to draw your Lordships' attention to one or two of what seem to be the likely effects of the Bill on the National Council for One Parent Families and on the Citizens' Advice Bureaux, as examples of the hazards which may face voluntary bodies under the Bill.
Let me take, first, the case of one parent families. In 1981, for example, grant related expenditure replaced the rate support grant. As I understand it, this new measure attempts to calculate more accurately all the elements within local government's block grants. One parent families are not used as a general indicator of need but are specifically identified in the calculations relating to certain areas, and the services relating to one parent families are costed out. The rapidly increasing numbers of one parent families are unhappily very seriously underestimated in the calculations of grant related expenditure derived by the department from 1981 Census data. I think it is agreed that the underestimate is roughly of the nature of one-half. This underestimate must be seen in the setting of the fact that, although the national average of one parent families (that is, the proportion which they bear to other families) is 14 per cent., in some of the big spending authorities the proportion ranges from 27 per cent., as, for example, in Wandsworth, to 33 per cent. in Lambeth.
This arithmetic helps to visit the sins of the authorities on the poorest and most vulnerable children, because the highest percentages of one parent

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families are concentrated in the areas of the biggest spending authorities. Inevitably, such authorities house Citizens' Advice Bureaux serving the most needy people in Britain. These bureaux run on a shoestring. There is a very small number of professional workers who assist and organise the fundamentally important work of the 10,000 volunteers. But a cut in grant locally, which falls upon the numbers of professional workers, has a disproportionately great effect throughout the bureaux in that particular area.
The Citizens' Advice Bureaux face a double pressure from the Bill. Some local authorities will cut back direct grants; some have already told us that they are going to do so; and at the same time some local authorities will restrict their own services to the public. Thus the demands on the bureaux will increase from two sources; because people will come to us for the assistance that they used to get, not only from local authorities but also from other voluntary bodies which have had to reduce their services, too. Thus the CABs face a paradoxical situation. The Government recently responded urgently and most generously to the report of the Lovelock Committee set up to review the Citizens' Advice Bureaux. The Government accepted its recommendations for a substantially increased grant to the national association. But what the bureaux have gained with one hand from the centre they are now in the process of losing from local authorities at the other end.
I have regularly admired the urbane and reasonable responses of the noble Lord the Minister to reasonable arguments. I believe that those of the National Council for One Parent Families and of the Citizens' Advice Bureaux are reasonable and, indeed, irresistible. I therefore ask him to give an assurance that in the transitional period of implementing this Bill the Government will protect the real incomes of such organisations as the Citizens' Advice Bureaux and the National Council for One Parent Familities, and so enable them to maintain their indispensable work.
9.21 p.m.
Lord Ellenborough: My Lords, I, too, would like to congratulate the noble Lord, Lord Bottomley, on what was an excellent maiden speech by any standard and to say, after such a long and distinguished career in another place, how glad we are to have him in your Lordships' House. I fear that in some quarters hearts may sink as to what I am going to say. But no matter what my noble friend Lord Bellwin and other Ministers may say in attempted explanation of the Government's failure to implement the Conservative 1974 election promise to abolish the rates—its postponement or suspension, if not withdrawal of it in 1979—and, finally, saying in 1983 that domestic rates must continue for the foreseeable future, hundreds of thousands of domestic ratepayers believe that they have been very sadly misled and let down by Her Majesty's Government. I regret to say this on the evidence of information reaching the offices of the National Union of Ratepayers' Associations and its vice-chairmen in many parts of England and Wales.
The 1981 Green Paper stated that it was the Government's aim to remedy as fully as possible the shortcomings of the existing system. In that, we have
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totally failed. The great majority of ratepayers believe that the existing system is unfair and arbitrary. Less than a year ago—last April, in fact—the national union received a letter from the Prime Minister's office which said:
"The Government remains determined to achieve fair, effective and lasting reforms. We are now in the final stages of preparing our proposals".
Nothing really has happened. As always, the same old excuses are trotted out; too little time, better to hasten slowly, lack of agreement, no consensus on an alternative, and so on. However, this matter has dragged on for years and years.
Of course, the poor old ratepayer is taken for granted. There are no flying pickets or Arthur Scargills among the ratepayers. The ratepayer will in the end stump up, no matter how unfair or exorbitant the demand may be. I feel that the Government have lost a great chance, still in their first year in a new Parliament with an impregnable majority in another place, in failing to make a start on the reform of the rates system. It seems to me that there is a defeatist attitude about it. One or two noble Lords seem to think there is something eccentric about it. I believe that the difficulties are much exaggerated. The National Union of Ratepayers have no monopoly of wisdom, but they have examined the matter in the minutest detail over many, many years, and I believe that the proposals with which they have come forward, if studied carefully, are viable.
I appreciate that a complete reform of the rating system might well take some years. Indeed, it probably would take more than the lifetime of a single Parliament. But pending a more radical reform, no doubt involving the introduction of a local income or services tax, surely at least as an interim measure a poll tax could quite quickly be introduced, paid by all adults in receipt of a certain minimum income, and based on the electoral register? In addition there could be a transfer to the national exchequer of most of the cost of the education and fire services, as they are now really almost as much national services as the defence forces.
In the meantime, people feel that they have been fobbed off by the present rate capping Bill which fudges the real problem. Part I of the Bill may stop some of the worst instances of extravagance and irresponsibility on the part of a few of the ultra-lunatic authorities, and for that we must indeed be duly grateful. Nevertheless, the Bill fails to tackle the fundamental enemies of good local government: first, the non-accountability of councillors; secondly, representation without taxation; and thirdly, the inherent inequitability of the existing property tax which is known as "rates".
Under the existing system the accountability of councillors to the electorate is largely non-effective for two reasons. First, about 7 million—I believe it might even be 8 million—local government electors out of about 24 million, do not make any effective contribution towards the local cost of the local services—of which they are very often the principal users—because they are not statutory occupiers of domestic hereditaments. It is, therefore, not surprising that either they do not take the trouble to vote at all or they are perhaps easily persuaded to vote for extremist

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and non-cost-effective schemes towards which they will be making no direct contribution.
Secondly, in those areas where councillors are elected for a four-year term and where extravagant and unnecessary financial expenditure has been incurred against the wishes of the majority of the electorate, nothing can be done to replace those councillors until the proposals have become a fait accompli. In any case at the end of four years, so short are political memories, the earlier extravagances may well have been forgotten, especially if there is a rate reduction in the municipal year immediately preceeding the local election or—as now in the case of the GLC threatened with oblivion—rates are miraculously reduced as a deathbed repentance.
There is no doubt that, under our present system of local taxation, which is related to the occupation of property, there is an inbuilt tendency to the pursuance of irresponsible and extravagant financial policies at local level. But all those entitled to a parliamentary vote and in receipt of a taxable income contribute to the national Exchequer according to their ability to pay and to spend. Yet those entitled to vote at local government elections can do so either without making any contribution whatever at local level, or some while making a small contribution to the householder towards the rates which would otherwise be payable entirely by the domestic ratepayers in whose houses they are living. In other words, "representation without taxation".
I find it difficult to see how the Government justify the retention at local government level of such a system, which is so completely different from that operating at national level. No amount of rate-capping will make one iota of difference to the fundamental unfairness.
Moreover, the Bill fails to tackle the basic inequality of the present system as between different ratepayers. Even if rate capping prevents excessive expenditure on the part of certain local authorities, the burden of such expenditure as may be permitted will still be spread inequitably among the existing domestic ratepayers, except those whose incomes fall within the rate rebate scheme.
The national union is well aware of many instances where domestic ratepayers, both elderly and young couples, particularly in the London heavily-rated areas, have to bear quite disproportionate shares of the total burden as compared with neighbouring families living in houses of the same size but with many more salary or wage earners. In this context it is only fair to note that there are some families for whom the present system is definitely advantageous; for the total amount of rates payable by them is negligible in relation to their total incomes. Obviously they do not want the system to be changed.
The selective limitation scheme can be accepted as an essentially emergency measure to cope with a very serious situation in a certain number of authorities and for a strictly limited period. I would say that on this basis it is, in fact, welcomed by the great majority of ratepayers, but only as an interim measure pending further really unprejudiced consideration of the fundamental issues which I have already outlined.
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However, supporters of this Government, and other people, throughout the country are surprised at the "centralist" policy by which the Government seem to be motivated in putting forward their longer term proposals for a general limitation of rates. It seems to me that traditional Tory philosophy has surely been directly opposed to the concentration of authority in central government as being potentially dangerous to the rights of individuals in the hands of extremists. In fact, in the field of industry and commerce the Government have made considerable headway in reversing this trend.
Now, however, we have an example of the very opposite—as I understand it, a proposed system under which officials and clerks in the Department of the Environment would try to work out in detail the local needs and requirements, under all sorts of different local conditions, of all the local authorities throughout the country; and these expenditure levels would then be authorised on behalf of Her Majesty's Government by the Secretary of State.
Moreover, let us remember that the Government of the day could well be—or perhaps, as I would say, could ill be—a Government of the extreme Left. I therefore appeal to the Government, even at this rather late stage, to make an announcement that, during the lifetime of this Parliament, they will grasp the nettle of rate reform and start to get rid of domestic rates—as was promised in 1974—and once more show that this Government are not frightened of opposing vested interests, wherever they may be found. Let Her Majesty's Government now tackle the basic and generally admitted anomaly of the existing rating system, just as they have recently shown that they intend to tidy up the existing national taxation system.
I take a grain of comfort from my right honourable friend the Secretary of State for the Environment when he said on Third Reading in another place:
"I do not preclude the possibility that at some future date the search for a satisfactory alternative to rates, which has so far eluded us, will succeed."
He went on to say:
"I hope that we can resume the search, but in the meantime we must get the Bill through Parliament". [Official Report, Commons, 28/3/84; col. 361-362.]
I very much hope that my noble friend Lord Bellwin can elaborate on this and perhaps when he comes to wind up give a somewhat stronger indication of what his right honourable friend meant, although I appreciate that he has another 30 or so speakers to take into account. After all, we are fortunate, I think, in my right honourable friend the Prime Minister—a Prime Minister with an indomitable will, capable of surmounting far more difficult problems than this, and no one better able to tell her Ministers that she expects action this day, or, to be practical, action this Parliament. After all, as recently as 23rd December last year the Prime Minister said in another place:
"Only a minority of the electorate pay rates. That is one of the worrying things about the system".
I am not very convinced by the amendment in the name of the noble Baroness, Lady Birk. It is of course cunningly devised, and designed, I have no doubt, to lure all critics of this Bill into their Lobby, but it does smack a little of rather cynical, if not blatant, opportunism. The Labour Party has held office for 11

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of the past 20 years and I do not recall any great haste on their part in trying to reform the rating system.
Nevertheless, together with other noble Lords on this side of the House I find myself in a dilemma. I have been President of the National Union of Ratepayers' Associations for many years now, and our consistent and foremost aim has always been a thorough reform of the rating system and, as I have
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said, we have put forward detailed proposals. I would therefore ask my noble friend, if he can find a moment, to try to give a satisfactory indication whether it is the intention of Her Majesty's Government to make a start in tackling the real issue of rating reform during the lifetime of this Parliament, because that, no less, is what the majority of domestic ratepayers want and have been denied for so long.
9.37 p.m.
Lord Bancroft: My Lords, I apologise in advance for being a bit repetitious, but I shall be brief. As has been pointed out, for reasons which most of us understand and sympathise with, this is a centralising Bill, but there is a limit to what the centre can efficiently and responsibly bear. A lot has already been said about accountability or answerability. I rather like the latter word. It seems to me a real worry under the Bill as it is now drafted.
As has already been pointed out by more than one speaker, the existing arrangements are already messy enough. We have been reminded that the taxpayer at large pays about half the bills of each local authority through the rate support grant. He has no vote at local elections. Industry and commerce pay a considerable share. They have no local vote, and a big and justifiable grievance. Agriculture is derated and generally pays no rates, but farmers and others who work on the land have a local vote. Of the private citizens in a given local authority some pay no domestic rates but all have a local vote. It is indeed a mess.
The effect of the Bill will be to remove local answerability in the case of the designated local authorities. And why? Because the expenditure decisions, and the policy decisions which determine them, will effectively be taken by Ministers and officials of the Department of the Environment in Marsham Street. Opening the debate the noble Lord, Lord Bellwin, in his lucid speech said that the Government's intention was to constrain only the total spending of the designated authorities, not the priorities between their individual services. But the Bill provides at some length for the authorities to appeal against the central decision. The noble Lord used the word "argue". In another place the word "negotiate" was used.
Many of us here have been concerned in different spheres with the control of expenditure, and all of us know that you cannot begin to control the totality of a body's spending, especially when there is a right of argument and negotiation about the decision, without forming a view on the individual items of expenditure and without being drawn into detailed discussions about their proper levels. So let there be no illusion about what will happen in practice.
It is a touch ironic (and I note the point in its sweet charity) that an Administration opposed to bureaucracy and dedicated to the market should selectively reject the democratic surrogate of the market forces—namely the ballot box—in favour of central bureaucracy. In exchange for the forfeit of local answerability will DoE Ministers be answerable to Parliament for the day-to-day running of the councils that they will, in effect, have taken over? Will the relevant accounting officer among the Permanent Secretaries from the Department of the Environment be similarly answerable to the public accounts committee? If the answer is no, where will answerability lie if it is neither at local level nor at the centre? It is a good working rule that too much centralised power breeds irresponsibility both in the locality
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and at the centre. I submit that the arrangement laid out in the Bill should not be of indefinite duration.
I have to say, too, that I pause at the practicability of Ministers and officials possessing the resources, the information and the time to have properly informed views about the policies and expenditures of individual local authorities. As I have said earlier, I believe that this will, in practice, prove to be inevitable and from the word "go". It is hard enough to second-guess local authorities from Marsham Street. It will be harder still to first-guess them.
I yield to no one in my admiration for the Ministers and the officials in the Department of the Environment, for their ingenuity, assiduity and their indomitability. But even they must look a touch apprehensively to the mountain of detailed work which lies ahead of them. All this is on top of the existing complexities of calculating the rate support grant with its needs element, regression analyses and all that.
I note that the number of extra staff needed in the Department of the Environment is estimated at 45. If 20 local authorites are designated that averages two and a quarter staff" per authoritiy to check, know and argue about those authorities' spending policies and decisions. Even taking into account the quality of the DoE staff, two and a quarter seems flippantly low; that comment would still be apt if the number were doubled.
If the Bill reaches the statute book in its present form there can be no assurance that its wide powers would not be exploited by less benign Secretaries of State or Ministers of State. As time passes, its provisions will be used and could be misused. They will come to be set in concrete. There is another good and unsurprising rule which experience will have taught many noble Lords. It is unsurprising and it is this: for good or for ill, every slope is slippery.
I end with this thought. Most of us recognise and sympathise with the Government's desire to curb the increasingly rum and increasingly offensive excesses of a handful of local authorities. A Bill broadly on these lines is inescapable, but as drafted it will not do. On grounds of answerability, practicability and scope for future misuse could the Bill not be limited?—limited by confining it more to a selective scheme, and limited in terms of time so that its powers have to be renewed or not by substantive parliamentary debate and decision after a defined period of years. It may be several years, indeed, as more than one noble Lord has remarked. This would give time for a review of the system of local government finance, which is longhand for power.
The system has been patched and bodged over the years by a heroic though necessarily capricious succession of emergency repairs. The result is not a pretty or a dignified sight, nor is it efficient. I recognise that yet another inquiry into local government finance is the most desperate of all possible remedies, but the position we find ourselves in is desperate indeed. In the absence of limits of scope and on time, I shall support the rather rococo amendment moved by the noble Baroness.
9.45 p.m.
Lord Sandford: My Lords, how excellent was the advice recently profferred to the clergy to give up politics for Lent. But, alas, when I accepted the presidency of the ADC some four or five years ago I did not stipulate that I should be allowed to indulge in such abstinence. So here I am, to my dismay, and certainly I am sure to yours, up to my neck in politics. My first link with local government began 20 years ago when I was a full-time curate recently invited by one of my parishioners—she was the village postmistress—to be her chaplain. She was then the chairman of the St. Albans Rural District Council—those were pre-reformation days, of course. I had to ask my rector what this new duty involved. "Well, John," he said to me, "You call the council to prayer, you look at the chairman, you look at the councillors, you look round at the officers; and you pray for the people of St. Albans!"
Now, as president of 333 of the 457 councils of England and Wales, I have to enlarge my vision and I look round at the Ministers and the civil servants of the Department of the Environment—and, having served there, I know them pretty well. I look round at the officers and members of the local authority associations and, I look round at your Lordships in your Lordships' House in whose company I have enjoyed working for the past 25 years. I look round and I pray for the local electors and ratepayers of England and Wales, who I believe are getting a poor deal from us. I look at the electors and ratepayers who look to us—and this particular moment they look to this particular House—for a better deal than they have been getting. And my prayer as I look round to your Lordships tonight is not without hope; because I believe that I can convince you that more is needed than just this Bill to put matters right, to put local government finace on a proper footing.
Ministers argue, and argue very eloquently and cogently, that this Bill is needed to curb the extravagant expenditure of a few councils. I agree as much as my noble friend Lord Boyd-Carpenter, as much as my noble friend Lord Bellwin on the Front Bench, that some version of this Bill is indeed needed. But the whole of local government argue—and again I agree with the right reverend Prelate the Bishop of London, with the noble Lord, Lord Harris, and with many others; and Her Majesty's Government do not deny—that a thorough reform of local Government finance is needed, too, and is badly overdue. We all came to that conclusion at the end of the debate instituted by my noble friend Lord Boyd-Carpenter two years ago.
The latter, the long-term, the thorough reform does not exclude the short-term, the stop-gap measure now presented before us. Nor does this measure obviate the need for the longer-term reform. They are not alternatives. Both are needed. The two approaches, the immediate, urgent one and longer-term one, must be brought together and must be held together, must be pursued together. A thorough long-term reform of local government finance cannot be left any longer—for some time, maybe, after this Bill.
We do not have to start from scratch. A lot of the work has been done by Layfield and can be picked up
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where he left off. It might take some time to complete, but it need not take long to produce its first fruits. The whole process can be progressive. Five or six of the simpler measures are already fully agreed on. A commitment to the undertaking of a thorough reform of local government finance should be a sine qua non of our consideration of the legislation now before us, and it is to this point alone that I address the rest of my remarks—the paramount need for a thorough reform of the financing of local government.
I do not want to dwell on the lack of effort, the failed efforts, the misguided efforts, the unfulfilled efforts and the wasted efforts that go to make up the sorry saga of the last 15 years. They offer endless scope for recrimi-nation and criticism, for wailing and gnashing of teeth generally, but that does not get us anywhere. Better to admit, as my noble friend Lord Thorneycroft has done, that this reform is very, very difficult indeed. It is politically hazardous and most demanding, but I believe it is our duty as a House to insist that Her Majesty's Government return to the charge and press on with it this time, despite the difficulties, until they succeed. I submit that the House has to decide that it cannot allow things to go on any longer as they are.
I know, and the noble Earl, Lord Halsbury, has said it so explicitly, that many of your Lordships have now acquainted themselves with the grotesque complexities of rate support grant as it now stands, with the shifting labyrinth that goes under the simple-sounding name of "target", the grant-related expenditure assessment introduced in 1980 by Mr. Heseltine to help the ratepayers, now being used by civil servants in a way repudiated by Mr. King in 1982 to help Mr. Jenkin in 1984. This is really an absurd situation. Your Lordships are now thus better able to judge for yourselves what a dreadful distraction this repeated kind of legislation is to the generality of councillors, to the officers, to the finance and general purposes committees, to the councils—what a distraction it is from their proper task of exercising their common statutory duties, with their own priorities in the light of their own circumstances, with their own resources to meet their own needs.
Your Lordships also will be aware of the appalling effect this sorry state of affairs is having on the ability of local government to attract and hold able people to serve as councillors. This is a point made by the noble Viscount, Lord Ridley, and many others. This is the factor that more than anything else, as my noble friend Lord Mottistone said, leads to business, industry and commerce feeling that they are becoming disenfranchised from local government. Of course, business must have a say in local government, but not only just through the votes of their individual employees; not just through the occasional consultation which this Bill provides for; they should have their own members in local councils. They should be putting them forward as candidates at elections, to stand and serve as councillors. But, alas, after one look at what is now involved—the constraints on decision-taking, the limits to discretion, the lack of accountability to those who are left—only too many good councillors from business bow out of their council work after one spell, never to return to local government again.

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Ministers are asking for tight control over local expenditure. Very good; we all applaud it. But in this Bill they are looking to their Whitehall civil servants to achieve it for them. What a strange place to look for help! There are many more much better allies far closer to hand. They are the earners and owners of the money which has to be taken for their local services. Just start to make councillors more closely account-able to their own electorate whose money they need to spend, then you will see some cost-cutting. Ministers and civil servants would soon be learning lessons in cost-cutting that they would never have dreamed of.
This transformation in thriftiness in councils is not unheard of. We see it happen every time a thrifty, cost-conscious council takes control from an extrava-gant one: Wandsworth, Bristol, Birmingham and Brent are all recent examples. This discipline could be brought into play everywhere all the time. In a system of local government finance such as the noble Lord, Lord Harris, looked forward to, where it was the local electorate which more directly paid the piper, you could be quite sure that they would also call the tune, and a thrifty tune that certainly would be. However, this Bill will not bring that about; far from it.
So what is our duty? What are we to do? Ministers are urging Her Majesty's Government to discharge what they claim to be a manifesto commitment on which they were elected. Local authorities, with unprecedented unanimity, would dearly like us to reject it altogether. The Bill, they claim, imperils local democracy and further weakens their accountability, and, they say, it will not work.
My Lords, we are not going to reject the Bill. There is nothing before us to that effect. We are a revising Chamber. We shall need to scrutinise the Bill with great care. That is certainly our duty; but I would submit that our judgment of this particular Bill depends crucially on Her Majesty's Government's intentions towards a proper and thorough reform of local government finance, and those intentions need to be revealed to us, as my noble friend Lord Ellenborough said just now.
As many speakers have said, it is important for us to remember in Parliament that neither central Government nor local government have any powers at all save those that are conferred upon them by Parliament. As we do our revising work we have an absolute duty to see that each sphere of government—central and local—has its own particu-lar appropriate powers and scale of resources to serve its own respective electorate. I submit, therefore, that we have a very clear duty now, as my noble friend Lord Thorneycroft has already said, to encourage both central and local government to review and to combine their efforts towards a thorough reform of local government finance, so as to restore its proper state of balance, its separate accountabilities and its separate autonomies.
Knowing now, as we do, more clearly the parlous and muddled state of affairs which prevails in local government finance, we must persist in this encouragement. As the noble Earl, Lord Halsbury, said, we must persist, despite the scepticism of the noble Lord, Lord Thorneycroft, until we are satisfied
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that this Bill, in measurable time, is to be superseded by a successor better suited to the millions of local electors that local government is supposed to serve. So I do not oppose this Bill but, for the sentiments contained at the end of it, I support the amendment and I invite your Lordships to do likewise.
9.58 p.m.
Lord McIntosh of Haringey: My Lords, I have much sympathy with the Government, and in particu-lar with the Ministers who have the job of steering this Bill through your Lordships' House. Here they are: they have brought forward a Bill couched in calm, neutral tones—an administrative measure—and what do they find? They find that noble Lords on all sides of the House react to it in an emotional way. Noble Lords from these Benches and from the Alliance Benches are concerned to defend the social services, the under-fives, the unmarried mothers and their families. They are concerned about voluntary organisations, none of which are referred to anywhere in the Bill. I cannot think where they got these references from.
Equally, it must be said that there are noble Lords on the other side of the House, notably the noble Lord, Lord Boyd-Carpenter, and the noble Lord, Lord Marsh, on the Cross-Benches, who seemed to think that the Bill is about Babies Against the Bomb and Gay Switchboards and things of that sort. There is no reference to either of those in the legislation. The Minister must be feeling that he has been misrepresented. I think it would be as well for us to turn to the text of the Bill to discover what it is about and then look at the implications, rather than drawing wild and unjustified conclusions from the Bill.
Clause 1(1) reads:
"The Secretary of State may … prescribe a maximum for the rate made … by an authority … which is designated by him".
What is "designated by him"? Clause 2(1) states that it is designated,
"by the Secretary' of State in a report laid before the House of Commons in the preceding financial year"—
not, your Lordships will notice, with the approval of the House of Commons, but in a report laid before the House of Commons.
Clause 2(2) reads:
"The Secretary of State shall not … designate an authority unless it appears to him … that its total expenditure in that year is likely—

(a) to exceed its grant-related expenditure for that year or £10 million, whichever is the greater, and

(b) to be excessive having regard to general economic conditions".

I have heard noble Lords on the Government Benches who were severely critical of phrases like "general economic conditions". They do not seem to think that this has adequate precision for legislation. I wonder why it is that they have not come forward with suggestions that there might be greater precision?
Clause 3(2) states:
"The power to determine a level for the total expenditure … shall be exercised in accordance with principles determined by the Secretary of State … those principles shall be the same for all authorities falling within that class".
Clause 3(6) reads:
"… the Secretary of State … may impose on the authority in question such requirements relating to its expenditure or financial management as he thinks appropriate".

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This, I suspect, may be the reason why some noble Lords appear to have the idea that the Secretary of State and his officials will take some part in the determination of the expenditure of individual local authorities. I cannot think where they got that idea, but there is a hint of it in the words of Clause 3(6).Clause 4(2) states:
"The Secretary of State shall determine that maximum by reference to"—
another weak phrase. It is not that he shall be controlled by principles, but that he will determine it by reference to a number of principles in paragraphs (a), (b) and (c).
So what we have is a neutral Bill; a Bill which permits, or does not permit, anything that the Secretary of State may choose to permit or not to permit. The noble Lord, Lord Cockfield, will recall the phrase from recent legislation, when I say that in policy terms the Bill is a perfect and absolute blank. Let us think about the implications of that and think, horror of horrors, that there might be a Left-wing Secretary of State. There might be Ken Livingstone, Ted Knight or, much more likely, David Blunkett, Louise Ellman, Jeremy Beecham or other moderate members of the Labour Party as Secretary of State. They could use this legislation exactly as the Government intend to use it, for controlling wild Left-wing expenditure in order to make it compulsory for local authorities to carry out the kind of expenditure that such a Secretary of State would want.
Because it is neutral, the Bill is capable of being interpreted in the other direction as well, and there is nothing in the terms of the legislation—there may be in the assurances of the Minister, but there is not in the legislation—which makes it impossible for a Left-wing Secretary of State to use legislation of this kind, in order to push through the ideological principles which he or she may wish to push through.
I would remind your Lordships of the parable of the sorcerer's apprentice. The sorcerer left his cave and the apprentice had remembered bits and pieces of the spell. He found out how to order the broom to sweep the cave and how to get the bucket to draw water. What he had forgotten was the spell to turn them off. When the sorcerer came back the cave was flooded and it required the sorcerer himself to reverse the process. This Bill is starting the process of control of local authorities by central Government. It is starting it in a way that the Government cannot from their own legislation stop. I appeal to the Government: remember the parable of the sorcerer. Remember that you have to consider whether you can stop what you have started.
10.4 p.m.
Lord Ingrow: My Lords, I suppose that your Lordships may now be hoping that the end of today's travail is at last arriving. I can only say that in my sporting days I was very accustomed to batting last. The difference was that then one had to make runs that had not been made. Today, so many points have already been made; but perhaps there are one or two left. I share even more strongly than my noble friend
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Lord Bellwin his views on this Bill. I support it, not with regret but with a good deal of anger that the action of a comparative handful of authorities has made it necessary for a Bill such as this to be introduced.
I was elected to local government in 1946 by a very small majority. At least, I thought it was small. My noble friend Lord Harmar-Nicholls would no doubt regard it as the height of affluence. I served for 20 years on my non-county borough. In passing, I might say that I have no great attachment to two-tier local government, but that is perhaps a matter for another Bill and another day. It was a balanced council politically. I served mainly as education chairman or finance chairman. I have been both poacher and gamekeeper. But everybody on that council, in all parties, accepted the traditions of local government. Nobody was so grand as to think that we could take on the Government of the day, whatever they might be, and put our views in substitution for them. As my noble friend Lord Boyd-Carpenter said, the conventions were there and we followed them.
Since then I have been inundated with paper from various local authority associations, and later I may say something about that. However, the gist of their complaint was the lack of democracy on the one hand, and the lack of individuality, on the other. The question of the power to levy rates has already been adequately dealt with. Its legitimacy has been dealt with by my noble friend Lord Broxbourne. However, I take exception to a phrase in one of the AMA circulars relating to the unconstrained tax-raising powers of local authorities. This seems to me to be nonsense when so much money is provided by other people. One has only the power of the pocket money from an indulgent parent.
Local government has sold the pass on individuality. When one enters local government one finds that one can do very little. There are conditions of service which apply throughout every kind of authority according to its size, and it is very hard to alter them. In the case of schools, for example, there were very keen and tight building limits which applied, per place, to both primary and secondary schools. Having listened to the debate today, one would think that there was a golden age when local authorities had an unlimited amount of money and when they were entirely uncontrolled by central Government. That was not true in my day, and I suspect that it is not entirely true today.
The problem is that the present system of local government election is a travesty of democracy. Much has been made of the voting and the paying. Until it is possible to relate more closely those who vote to those who pay the bill, there will not be effective democratic control. It is also fair to say that no Government can ever again tolerate untrammelled local government expenditure. With the greatest respect, this would apply to the noble Lords opposite if they were to form a Government. I believe that they sought restraint in 1975–76. The brokers men were in on that occasion. However, this Government have a mandate which was overwhelmingly supported last year in the general election. I recall that last year there were complaints

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that the Conservative manifesto was fairly vague and did not promise very much, but on this issue it was very specific indeed. The manifesto made quite clear what would be done, and I believe that it ought to be supported.
There must be many in this Chamber who, like myself, greatly enjoy the works of Conan Doyle. I am equally sure that there will be many who are familiar with the story in the Memoirs of Sherlock Holmes when the inspector asked him if there was anything to which his attention should be drawn, to which he replied, "The curious incident of the dog in the night-time". The inspector replied that the dog did nothing in the night-time. Sherlock Holmes replied that that was the curious incident.
If you go out into the street today you will not find a great queue of people from industry saying, "Please stop this beastly rate capping Bill". You will not find Sir Terence Beckett, bare fisted, saying, "Please allow industry to be taxed more and more by the Rates Bill". You will not find angry queues of ratepayers wanting this Bill to be stopped and urging to be allowed to pay more and more rates. The interests of the people who pay seem not to have been so strongly stressed today as I would have liked. We have had debates in your Lordships' House recently on the importance of industry and its costs, and I believe that the interests of industry and of the ratepayers should be considered. We are not in fact a local authorities protection society, however much we may like them.
I did some sums just in looking at my own particular town. I found that the rateable value of my business premises had increased by 22 per cent. over the rate of inflation in the past five years. It seemed to me quite a lot. When it comes to all the paper we have been sent, I rather think that the time of all those highly-paid officials might have been better spent on running their authorities more closely, instead of writing the memos we have received. Even too many of the very good councils have, in making their economies, cut capital expenditure and not running costs. The papers we have been asked to believe saying that the powers that be in local government are opposed to this Bill ignore certain facts.
I have received today a signed letter from my own county of Yorkshire. We call it Yorkshire whatever the various local government Bills may have done to divide it up. In that county, we have four county councils—two metropolitan and two non-metropolitan. All the Conservative leaders of those four county councils (one of whom is the leader of the council in North Yorkshire) all the Conservative leaders of the five metropolitan districts in West Yorkshire, all the Conservative leaders of the four Metropolitan districts in South Yorkshire, the Conservative leader of Hull City Council (which is the largest district in North Yorkshire), and the Conservative leader of Hull District Council (which is the largest council in Hull) have urged me in terms rather more blunt than those which I have used that their hope is that the rate capping Bill will be dealt with as soon as possible and passed.
I am very glad that in support of that decision in Parliament last year, as far as I can gather, none of the Yorkshire Conservative Members of Parliament in
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any way reneged on their election promises in regard to this Bill when in another place. I have been assured by my noble friend Lord Kaberry of Adel—for many years the leader of the Yorkshire Members—that all the Conservative Yorkshire Members as well supported this Bill. I might add that many of those Members won their seats for the first time last year. If, when asked about the rates, they had answered: "We will not do anything about the rates; we shall just let them go up", I suspect that many of them would not then have won their seats.
Anomalies can be sorted out. The right reverend Prelate the Bishop of London said, and I admit, that this Bill is a blunt instrument, but it is made necessary by the fact that speed is the essential part of all this; delay cannot be tolerated. The Bill is urgent because of the financial problems which will accrue if we wait and wait on yet another report. One has, perhaps, the slightly unworthy feeling that those wanting delay are looking for nothing at all to happen.
In the times we have today, any Government who are trying to cut the associations of local government are in for a great deal of trouble. We have a Government who are accustomed to taking courageous decisions, and I believe that they are absolutely right. I believe that we should support this Bill to the full and ensure that we have a better chance in future to get the affairs of local government right.
Lord Grimston of Westbury: My Lords, I had not intended to speak at all in this debate, but this morning I received a letter from one of our higher spending councils which very much infringes upon the ability of people like myself to run businesses. I want to make just one point. The council in question, which is one of our highest spending councils, has invoked the Public Order Act 1936 to add to the already high rate burden. Therefore, having already been a major supporter of this Bill nationally, I feel that this little example should encourage all Conservatives to support a courageous Government.
10.15 p.m.
Lord Evans of Claughton: My Lords, I have the feeling that your Lordships would not welcome at this hour the four-and-a-half hour speech which was commended to us in another place in the course of this Bill's going through the Committee stage. I shall be able to keep my remarks brief because my noble friends, particularly my noble friend Lady Stedman, have put the case from the Alliance's point of view extremely well.
I have some hesitation in daring to cross swords, as it were, with the noble Lord, Lord Broxbourne, because of his much greater expertise than mine in the field of constitutional law. However, none of us on this side say that what the Government are proposing is unconstitutional. We are saying that it is a matter of constitutional importance, which is a different matter. Power is being taken to change the constitution, and this right to change the constitutional position lies with Parliament. One concedes that. In making this kind of change in the relationship between local government and central Government your Lordships, and Parliament generally, must act with care and with deliberation as in the past on the Wales Bill and the Scotland Bill, including the idea of a referendum in

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that case. That is the point. In dealing with a matter which changes checks and balances we have an obligation to behave with great care and great deliberation.
This Bill, whatever else it does, removes from local authorities which have been set up by Parliament the right to control their own taxes and concentrates Government power to an unprecedented extent at the central level. To me, those are matters of great importance and are a very important constitutional issue. I feel—and several speeches have brought this out—that the Government have allowed themselves to be needled by a small number of highly irresponsible local authorities. There are, as the Minister has conceded in what I must say was a very good speech (there is no point in alienating him at this stage), 12 at the most; and I hope he is not going to increase that number or we shall have another problem.
I was very impressed by the speech of the noble Viscount, Lord Ridley, and that of the noble Lord, Lord Sandford, both of them presidents of local authority associations. I am sure I shall be equally impressed by the speech, when I hear it, of the noble Lord. Lord Underhill, the chairman of the third of those bodies. I intensely admired the speech in support of the Bill of the noble Lord, Lord Thorneycroft. I should very much like to hear him when he is speaking against a Bill.
Turning briefly to Part I of the Bill, the correct level of spending for local authorities is, in my submission, not an objective test but is totally a political judgment. Similarly, there is no objective standard of what is overspending or underspending. What is underspending for Liverpool—an area with many problems—might well be considerable overspending for Surrey. One must look at each of the cases with its own particular problems.
Several of your Lordships have mentioned that the authorities with the biggest problems in terms of urban decay and problems at every level for the people living in the area are also those which are the highest spenders. Let me underline the truth of what was said earlier in the debate. Many of these high spending authorities do not take advantage of LAMSAC and other organisations. That is quite wrong. They should take advantage of them. I concede whole-heartedly that many of the high-spending authorities, without damaging in any way the services they offer, could considerably reduce their costs. That is a truism; I do not think that it is open to challenge. It is a matter to which those high-spending authorities, particularly in the city of Liverpool, should be turning their attention.
What is underspending or overspending today might entirely change with Government policy. I wonder whether your Lordships have ever considered that, if quite suddenly this or a subsequent Government were to change their policy towards the subsidisation (an unpleasant word) of urban transport, authorities which are at present overspenders, like South Yorkshire, would suddenly become underspenders. You cannot assess such things objectively. Grant-related expenditure certainly cannot be tested objectively. As the noble Baroness, Lady Vickers, pointed out, how can a Government find the people and resources to give detailed scrutiny over a wide area to see whether local authorities
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transgress the rules? We shall need not only a Secretary of State for the Environment but an Under-Secretary for rate capping. It will be a full-time job for a Minister and require a whole new department of local government if we follow this road.
What worries me is, what is to prevent the inclusion of those authorities which may now be basking in the belief that they are excluded and can trot off happily and not be worried by interference from central Government? That could be done by a subsequent Government, or indeed by this Government, in a moment of irritation at the activities of one or two of them. Part I of the Bill could, if sufficient authorities were brought into its purview, become a reserve or a general power in exactly the same way as Part II is proposed to be. If 30, 40, 50 or 60 authorities came into its purview, it would become a general power in exactly the same way as Part II, which is described as a reserve power only. If this is only a reserve power—and I genuinely believe that the Minister, metaphorically with his hand on his heart, means this—I wonder why the Government need now to include it in the Bill. Why not bring it forward as a separate Bill at a subsequent stage if local authorities prove to be recalcitrant?
Under the Bill—and this is why I so strongly support the amendment—at one stroke local accountability will be totally destroyed. As the noble Lord, Lord Sandford, rightly said, councillors of ability are already reluctant to take part in local government in many areas because they have already lost so many of the powers and responsibilities. If this Bill is passed and local accountability goes, why should anyone who is seriously concerned about improving the standards and quality of services in a district bother to get involved in local government at all? One wonders why this Government should not extend their proposals for abolishing elections for the Greater London Council and the county councils to the whole of local government and just have the whole thing as a central government agency.
I have a lot of sympathy with the views expressed by the noble Lord, Lord Mottistone, and the CBI, although I am aware that rates account for only 2·7 per cent. of the costs such as wages and salaries in industry. I concede—as a ratepayer in the city of Liverpool I feel this fairly warmly and strongly—that the payment of rates by industry and commerce can be a grave deterrent, particularly in areas where we can least afford to deter them. I should have thought that the answer would be for the Government to consider—I do not support this view myself—the possibility of industrial derating, as has been done for some time with agriculture, or to make non-industrial rates a national instead of a local tax, and to introduce local income tax, partly to replace that and partly to enable local government to reduce its dependency on central Government grants. But Layfield has set us off in the right direction, and I would think that with compara-tively little additional examination (if any) the lines that were set for us by Layfield could be used to introduce a very thorough reform of local government. I know that I will be accused of producing my noble friend's King Charles' head by saying that if your Lordships really care about making local government answerable to the domestic ratepayer, then you should introduce proportional representation.

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I would like to draw the attention of those of your Lordships who are older, like myself, to the problems of the Borough of Sligo in the 1880s and 1890s. There they had to put in a commissioner because the councillors of Sligo behaved very similarly to their fellow Irishmen on the City of Liverpool council. Eventually the Government of the day decided that the only way to make those people behave responsibly and sensitively to the wishes of the people in that area was to introduce proportional representation—since when, I am happy to tell your Lordships, Sligo has never looked back!
There are certain immediate benefits that could be produced. Rates should be assessed on capital, not on rental values; there should be a re-assessment every three or five years; and as 1 have said, local income tax should be introduced. We are the only country in Western Europe that makes our local government rely on one source of taxation. Most Western European countries have two, three, four or even five sources of local government tax. We make our local government rely on one source, and now we intend to go on and cap it. So, in the whole of Europe, we are going to be the country which, after East Germany, is most controlled by central Government. I wonder whether Members on the Government Benches are really very happy about having that kind of reputation.
But I support very warmly the proposal that the noble Lord. Lord Thorneycroft, made: that all parties should get together, in as non-partisan a way as possible to try to find a way of re-financing local government. We have had two reforms of the administration of local government: we have not had a single serious reform of the financing of local government.
The noble Lord, Lord Marsh, in a very powerful speech—with practically every word of which I entirely disagreed—painted an attractive picture of people standing in public houses discussing with excitement the doctrine of the rate support grant and the county precept, and he doubted whether many people did this. Outside Liberal clubs, I think I would probably agree with him. But I also doubt whether during the general election, and before it, people were standing about and saying, "Byjove! I'm going to vote Tory next time because they have this proposal to rate cap in their manifesto". People do not behave like that. What people do is to say, "I want better services and lower taxes". That is the level at which they operate. They do not have these deeply intellectual conversations, either of the kind that Lord Marsh mentions, or the kind that I mention, quite frankly. I personally do not support the doctrine of the mandate. I belong more to the view that Sir Henry Campbell-Bannerman took. When asked how the Liberal Government would rule, he said, "We will be guided by the principles of Liberalism". To me, that is a far better basis for running a country; but we have not had the opportunity recently—not in the spirit of partisanship.
But I want to point out that the present rate capping Bill is opposed. I know it is not opposed by everyone, but it is opposed by a very wide spectrum of public opinion; by academics (which I know immediately condemns the whole thing to many of your Lordships);
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by such eminent figures as Geoffrey Rippon; by the ACC; by the ADC; by the AMA; by voluntary organisations and by teachers. So there is a very considerable volume of opposition to the form of this legislation. If we were willing to get together, without seeking to win political advantage from it, I am sure that this country, which has been the pioneer of so many reforms of government at every level could come forward with a scheme for refinancing local government capable of being supported by a wide spectrum of people. That is why, at this stage I strongly support the amendment moved by the noble Baroness.
10.30 p.m.
Lord Underhill: My Lords, I must first warmly congratulate my noble friend Lord Bottomley on his maiden speech. While he was doing his valuable council work at Walthamstow, I was in the neighbouring borough doing voluntary political work. I know full well, therefore, the value of his council work. I am sure that his local, national and international experience will make a great contribution to your Lordships' House.
As the thirty-eighth speaker in this marathon debate, I believe that I can safely say that the amendment so ably moved by my noble friend Lady Birk represents a cross-party opinion, and strong cross-opinion, of concern about aspects of this Bill. I am honoured, as already mentioned, to be the president of the Association of Metropolitan Authorities. When the Government asked for responses to their White Paper, the three associations gave somewhat the same view. The counties, the districts and the metropolitan areas were of one opinion in general opposition to the Government's proposals. We are told by the noble Lord, Lord Bellwin, that at a later stage, if the Bill is enacted, the local authority associations will be consulted. The Government took no notice whatever of the united view of the three local authority associations in their criticism of the Government's White Paper on rates.
The noble Lord, Lord Evans of Claughton, has referred to the constitutional position. My noble friend Lady Birk, in moving the amendment, did not say that the Bill was unconstitutional. She said what is said in the amendment. The Bill will result in damaging constitutional changes in the relationship between central and local government. Those relationships are at a very low ebb already, even before the Bill is enacted, if it is to be enacted. I had intended to refer to some of the possible constitutional changes between central and local government if the Bill is enacted. I shall save your Lordships' time by not doing so. However, in all their responses, the Association of County Councils, the Association of District Councils and the Association of Metropolitan Authorities—my two fellow presidents from whom you have heard will, I think, agree—say that the proposals in the Bill will have a far-reaching constitutional effect on the relationships between central Government and local government. That is something that we must avoid.
At this time of night it is not a good idea to introduce quotations. However, there is an important one to which I should like to draw your Lordships' attention. In 1980, when the Local Government, Planning and Land Bill was going through Parliament,

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the then Minister of Local Government, Mr. Tom King, said in the Standing Committee on 27th March something very important:
"My Department will not be in the business of saying how much each authority should spend, where it should or would not make cuts or on what it should spend money".
He went on:
"Local authorities are autonomous. They fix their rate systems. I can comment and urge the need for economy. I have some influence over the distribution of public funds, but the ultimate decision on rating and the volume of expenditure of local authorities is a matter for the councillors themselves."
Most noble Lords will, I think, agree with that. It is the position to which we wish the Government to return by the House carrying the amendment this evening.
Under the Bill, the Secretary of State will be involved in the detailed budgetry process of a local council. The noble Lord. Lord Bellwin, said that it is not the intention of the Government to interfere with how money will be spent. I would refer the noble Lord to the Explanatory and Financial Memorandum to the Bill. I see that Clause 3 allows an authority to apply for a re-determination of its expenditure level and:
"enables the Secretary of State to confirm the original level or to re-determine it. and to impose any requirements he thinks appropriate".
My reading of that is quite clear. The Minister seems to criticise it and so I shall read it again:
"to impose any requirements he thinks appropriate".
It is the local councillors who will have to face their electors. It is the local councillors who will be accountable to their electors. It would be a tragedy if councillors have to face the electors not with their own scheme, but with a scheme which has been imposed upon them by the provision that I have just read from the Bill.
Reference has been made to the fact that it is nonsense to talk about local democracy being gravely weakened. I am a simple soul. I believe that the Government have every right to determine how much money they will give to local government in the rate support grant. But I then believe that it is up to the local councils to decide the needs in their area. It is up to the local councillors to decide how they will meet the balance of the money. I am a simple soul. If electors are dissatisfied with the policies of their council, then they can change it. But I have been amazed at some of the comments from some noble Lords in this debate tonight, which have been rather disparaging of local democracy in council elections, as if the whole thing is a farce and does not matter. There are people on all sides of this House who have served in local government for years and years and who I am certain will not support that attitude. Local council elections are important and we must never let it go out from this House that we regard them as merely an expression of opinion about which we need not worry. The Government in some of their comments and in this Bill, appear no longer to trust the electors with this decision, and I regret that one or two other noble Lords seem to echo that view.
It is Government action which has really increased the proportion of local authority costs which have to be raised locally. Right at the outset of the debate my noble friend Lady Birk referred to the rate support grant. I will not worry your Lordships with figures. The
1014
fact is that the amount of rate support grant given to the authorities in the last three to four years has been progressively decreased. If an authority has less support from central Government, it has only two alternatives: either it can cut services or it can increase the rates. There is no other alternative. The noble Lord. Lord Bellwin, believes that the whole of this can be met by savings, by economies, by efficiency and so on.
The noble Lord, Lord Ingrow, referred to a letter from his council. It so happens that I have a letter from my council and, strangely enough, it is not a Labour-controlled council—it is a council with a very strong Conservative majority in Essex. After referring to the fact that the expenditure, which the council regard as essential to carry out its present services, happens to be more than the target set by Government, the Essex County Council said that either we have:
"drastic cuts in service provision or exceed the Government's target and incur grant penalties".
The chairman of the council, who is not of my political persuasion, said:
"The point 1 wish to make here is that the Secretary of State for the Environment cannot be aware of or be responsive to the demands and needs of local circumstances as locally elected members are".
That leads me to the criteria to be laid down by the Secretary of State. The Bill is completely silent on this aspect, although it has been mentioned that the grant-related expenditure assessments will be the basis for this operation. When grant-related expenditure assessments were first introduced, Ministers time and time again, said that they would never be used as a test for overspending. How will they decide on the needs of each authority? The Minister cannot do it. With all his ability—and I admire his ability and his knowledge of local government—the noble Lord, Lord Bellwin, is not going home at weekends with masses of documentation to decide just what are the needs of every local authority. Nor do 1 believe that the civil servants in Marsham Street, expert as they are, can do it. The noble Lord, Lord Bellwin, said: "Get out into the real world"; and that is what I say: "Get out into the real world, see what the real needs of the community are", and only elected local councillors can do that.
As has been mentioned, a number of local councils and other bodies have written to noble Lords. Most of them set out the massive effect on local rates because of the reduction of block grant. I was sorry that the noble Lord, Lord Bellwin, who I respect, tossed off a few criticisms of a number of authorities. In his remarks the right reverend prelate the Bishop of London referred to the problems of the inner London areas.
Hackney was mentioned by the Minister and by the right reverend Prelate. I want to say just a few words about Hackney, because I did go out into the real world. With my noble friend Lord Graham and the Secretary of the AMA, I spent a whole day in Hackney to see what their problems were. My noble friend Lord Irving has mentioned the financial position, where their GRE is some £21 million below what the council considers its budget to be. Even at this time of night I should just like to give a few figures. According to the 1981 Census 17 per cent. of the people in Hackney are of pensionable age; 22 per cent. are under the age of

1015
15; 10 per cent. share the same bath; two of three do not own a car; Hackney has the highest proportion of single-parent households of any borough in the country; wages are 7 per cent. below the national average and 20 per cent. below the London average; there are appalling housing problems, and I saw some of them; Hackney has the second highest rate of overcrowding; and it has 26.8 per cent. male unemployment.
I challenge the Minister to tell me, to tell this House, to tell the country what is Hackney supposed to do if the amount of money that it is receiving does not enable it to cope with that situation? Yet it is not supposed to increase rates. Do not say that it can save £21 million by economies. That would be nonsense. What does the Minister say?
Then allegations were just tossed off about other authorities, and I cannot possibly deal with them. But how will this position be dealt with when an order comes before Parliament? Will it cover 12, 18, 20 or 30 authorities? How long will be devoted to each one? How long will this House and the other place be able to consider the problems of Hackney, of Islington or of all the other areas, to see whether the Government are right? Parliamentary accountability will be fairly absent.
This Bill will bring centralisation, it will bring more bureaucracy, and it gives massive powers to the Secretary of State. I believe that it is irrelevant to the problems of local councils and, basically, it is irrelevant to the financial problems and economic policies nationally. As the right reverend Prelate the Bishop of Southwell said, the Bill encourages confrontation, and I believe that that is one of the strongest criticisms that we can make of it.
The noble Lord, Lord Boyd-Carpenter. said that the amendment on which we shall vote is a hotch-potch of an amendment. That is echoed on the Government Benches as "Hear, hear". Read it, because the local authority associations agree with the criticisms of the Bill, and they are very moderate criticisms. We are not asking the House to vote against the Second Reading; we are asking the House to express its concern on three or four aspects of the proposals which are very serious.
In reply to the noble Lord, Lord Boyd-Carpenter, who asked me a deliberate question, may I say that it is the job of this House to look responsibly at legislation coming before it and to pass its comments upon it. I hope that noble Lords will do that by carrying the amendment and then, at Committee stage, by making the necessary amendments, at least we shall alleviate some of the worst features of the Bill.
10.45 p.m.
Lord Bellwin: My Lords, the hour is late, the debate has been long, and the passions, I hope, are spent.
Noble Lords: No!
Lord Bellwin: Well then, my Lords, they are not spent and we shall see if we can add a few to them. My passion certainly is not. I have to try to reply as briefly as possible because I suspect that perhaps I know better than most that there is always a moment in time when the talking has to end. May I begin by saying that
1016
I am deeply grateful to all who have taken part in what has been a fascinating debate. I too join in the tributes to the noble Lord, Lord Bottomley, on his maiden speech. If I do not respond to the actual points he made, it is because I too do not want to be controversial, but nevertheless I say in all sincerity that we look forward to hearing him many more times in your Lordships' House.
Many good points have been raised today in this discussion on this controversial Bill. I would dearly like to answer each one of them but your Lordships know that that is just never practicable or possible, and I therefore intend simply to take up a few of the main points, and I hope that those whose points I do not mention—and they will be many, with nearly 40 speakers—will acquit me of discourtesy.
This Bill, as I said in opening the debate, is about protecting ratepayers. We have heard much this afternoon and this evening about the constitutional implications. What we have seen over the last few years is a fight by the Government to re-establish the economic position of the country. Local government has had to play its part in that, and the majority of local authorities I say immediately, and again, have done their best to help. It is the small minority which have not, and it is they who have put unreasonable burdens on their ratepayers. The Bill's principal purpose is to put that right, and it is to restore account-ability in those areas where it has all but disappeared from view.
It should be said again that the selective rate limitation scheme is aimed only at a small number—the noble Lord, Lord Evans, will note—of some 12 to 20, or thereabouts, of irresponsible and high-spending authorities. More than 95 per cent. of authorities will not come within a mile of selective rate limitation, and even if an authority is rate limited—and this is a point which still has to be made again and again because the noble Lord, Lord Bancroft, seemed to miss it and so did others—within its overall limit an authority will have the right to decide its own spending priorities. If there is a constitutional complaint to be made, I believe it is against those high-spending authorities and not against the Government.
Yes. the general rate limitation does raise wider issues and if. I say again, it were introduced then it would represent a change in the balance of power between central and local government, and I am not going to spoil what I consider to be a superb case by even the slightest modicum of distortion in any way whatsoever, so I say that because that is the position. But we make, and have made, it clear that we trust that it will never need to be introduced in that—and this is the point—the combination of selective rate limitation and the other pressures on local government spending arising from the grant system will enable the Government's overall economic plans to be achieved.
We have heard much from the right reverend Prelate the Bishop of Southwell, and my noble friend Lady Faithfull, and others, about the worries of the voluntary organisations. I say again, as I did in opening, that we fully recognise the value of voluntary organisations. Indeed, the National Council for Voluntary Organisations say:

1017
"The present Government has done much to support and encourage the work of voluntary organisations".
Nevertheless I know, as has been said, that there are those who are worried about the implications of the Bill. But a huge variation in spending levels between authorities gives me confidence that this worry is not justified. Prudent authorities are meeting their duties and have money to spend on their voluntary sectors. We are only going to cap the outrageously high spenders. And even when they are rate capped they certainly will not be restricted to any one sector of their provision for services.
Again, just look who we are talking about: authorities spending 20, 30, maybe 40 per cent. over GREAs. When one considers these 12 to 20 and the impact and the scope they will have for their voluntary sector, I recognise the concern. It would be wrong not to acknowledge it and to think further, which I promise we will do. But I do not have the fears that have been expressed today.
I shall say a word about something which arguably is the most important point that I consider has been mentioned all the way through. I begin to do that by reminding your Lordships that we are talking about limiting spending in about 12 to 20 authorities. The noble Lord, Lord Irving of Dartford, and the noble Lord, Lord Underhill, in his last remarks, spoke about the problems of Hackney, the self-styled poorest borough in England. He asked, "Will the Minister tell the House what does Hackney have to do?"
I will tell the House what Hackney has to do. It has to look at the 993, nearly 1,000, extra people that it added to its staff in the last 21 months. It has to look at what all those nearly 1,000 people are doing. No cuts—these are additional staff in the last 21 months. That is costing between £8 million and £10 million a year. When it has done that, it has to explain why it now has a public relations department, this poorest borough needing so much, has 14 people to explain its policies; why it has 40 additional people now added to its personnel department. It has to explain why now it has 20 more architects—not 20; 20 more; another 13 quantity surveyors—not 13; 13 more. It has to explain why it is not concerned to do what the noble Lord, Lord Northfield, said that others are doing.
Why it is not even prepared to go to its own local authority association LAMSAC to ask, "Tell me how do I provide my services, not at a worse level, but at the same or a better level, at the same hundreds of thousands, if not millions of pounds, less in cost as other authorities are able to do". Another thing it has to decide is to abandon its dogma about the contracting out of services and say, "Our main concern is the provision of the standards for our people"; because, as to what one of the noble Lords on the Cross Benches said earlier—I think it was Lord Milford—I am talking about people. I am exactly and only talking about people. One should consider the opportunities that exist for these high-spending authorities—and that is the key to the whole of this debate today: the fact that it is the high spenders who have the best opportunities. It is they who have most increased their costs. We disregard that, and say that that is not important, at our peril.
The Audit Commission has now produced a handbook full of ways of saving money. There are
1018
others. LAMSAC has to be brought more into the picture and I hope it will be. I am not for a long speech at this time, but just two or three other points were mentioned. May I mention what I thought was a magnificent speech by the noble Lord, Lord Marsh—
Noble Lords: Ah!
Lord Bellwin: I would think so, would I not, my Lords?
The Lord President of the Council (Viscount Whitelaw): It was very good, anyway, my Lords.
Lord Bellwin: My Lords, it was indeed very good. He said one thing which nobody who has served in local government can deny. We all know it and I have been on the receiving end like every one of you who has served in local government. You know as well as I do what he said about the ultimate fate of every authority at election time depending upon the national scene. It happens again and again. You can have the lowest rates in the country; you can have the best services, but if the fortunes of your party at Westminster are such, then out you will go despite what you do. All those of your Lordships who have served in local government know it; I certainly do.
I shall not "make a meal of it" because the hour is late. I just reply to the noble Lord, Lord Bancroft, that in a thoughtful and interesting speech he asked: "Dare we be responsible for the day-to-day running of councils; the councils that we will have taken over?" But we are not taking over anyone by this Bill. This is a point that the noble Lord, Lord Evans of Claughton, touched upon and I say the same thing to him, too. What they spend their money on will be the decision for them to take. It is a shame that I have to keep repeating this; but it has to be said because there is so much misunderstanding and anxiety caused by it.
The noble Lord, Lord Bancroft, asked where the accountability would lie. The answer is simple. The Secretary of State will be answerable to Parliament for the expenditure levels, but it will be open to the authorities to apply for derogations. It will be incumbent upon the Secretary of State to ensure that those derogations are considered, that the levels set will be reasonable in the context of what an authority has to provide by way of services. That must also be made clear; because you cannot expect (and we do not expect) that the authorities in one fell swoop will come from their high levels right down to the levels that one would want. So this will be done sensibly and reasonably. You know that is always an obligation upon the the Secretary of State.
My Lords, we have before us tonight a very unusual attempt to amend the Motion for the Second Reading. The amendment moved by the noble Baroness, Lady Birk, refers to constitutional change, to the weakening of local democracy, and calls for a further reform of local government. We have already dealt at some length with the issues of constitution and local democracy and, if I may say so, no one in greater detail or with more authority than my noble friend Lord Broxbourne. For me, my right honourable friend the Secretary of State for Trade and Industry summed it up well enough when he said recently:
"It is no more a constitutional impropriety to limit the power to rate than it is to grant that power in the first place."

1019
Let no one be deluded by the seemingly innocuous wording of the amendment. The idea of embarking on reform is always appealing. It means that you can avoid actually having to do anything and it always sounds so reasonable. But we are men and women of the world. We know that this amendment is anything but reasoned. It is a skilful attempt—and I pay tribute to the noble Baroness for that—to secure the biggest possible anti-Government vote, and, if possible, even to defeat the Government. It has been said, "Who is against the Bill?" I want to say, "Who is in support of the Bill?" Those in support are those who actually have to live and work under the burden of the high spenders. Support, I can tell you, from those areas is rock solid behind the Government.
Again, I want to stress this point because at the end of the day it is the key factor of the whole issue. The Government have the support of those who pay the bills, those who meet the full burden of their rates, of industry, of commerce, of the wealth-creating sector, the country's economic base, without which there is nothing. Their voice has been heard today, loudly and clearly. They support the Bill.
We have heard much about protecting local government. Many of your Lordships have spoken from their personal experience of service on local councils. The noble Baroness, Lady Birk, said that this House is peopled by many who have served in local authorities—and she is right. I am sure that your Lordships know that I, too, have some experience in this field. But I know (and 1 am sure that in their hearts many of your Lordships know) as the noble Lord, Lord Marsh, so rightly said, that local government or at least a part of it is changing. The ACC and the ADC may well believe that because most of their members try to run their authorities responsibly and in the interests of all their ratepayers—and most of them do—let them not be deluded as to what goes on in the other world.
Prudence, caring about where the money comes from, getting the best value for every pound so that you can afford—and that is the critical word: so that you can afford—to spend more on social services and on housing and the voluntary sector and the like: all this means nothing to the people who run the high-spending authorities. Their concern—and it has to be said—is solely with their political ambitions and power. It has been said time and again today that they never try to equate their cries of lack of resources with the vast sums that they lavish on the campaigns, on the political propaganda departments, on their staff crèches and the other lunacies.
I am not going to spoil a good case by going into a lot of detail; but the fact is that much of this spending cannot be held up and justified in terms of anything which is reasonable. When will our opponents speak out about what is happening and about what is being done to the name and reputation of local government?
I finish on this note. My noble friend Lord Thorneycroft said it, and I repeat it: what are the alternatives to this Bill?—to do nothing, to let the spending rip? How many more billions of pounds have to be overspent each year before the opponents of the Bill become concerned? What should we do? Should we abandon the ratepayers in high-rating areas? Have
1020
they not put up with it long enough? It might suit the Labour Party in Opposition, but they were not so happy about it when they were in power. Should we alter the electoral system to disfranchise those voters who do not perhaps pay full rates? I agree with my noble friend Lord Beloff; and I think the noble Baroness, Lady Birk, made the same point. That would certainly focus the minds of what would then be the electorate. That would be a truly constitutional change. Is that the price our opponents are prepared to pay? It is not a price we want to pay. I am certain about that.
Should we take services like education away from local government and give them to the central Government? Would that appeal to the AMA and the ACC? The amendment refers to "a thorough reform". As my noble friend Lord Boyd-Carpenter said, reform without a review. Hardly. I groan, "Again? Another one? That is where I came in". We have had so many reviews—there has been the Green Paper on rates, which looked at every known alternative. I do not think many people had even thought about a poll tax before that.
My noble friend Lord Ellenborough might be disappointed, and so am I, but no consensus emerged. The Select Committee on the Environment agreed with that. They thought local income tax was worth another look, but the administrative problems make it only a long-term possibility, and we need to act now. What is called for?—another Maude Report, another Layfield Report, another Green Paper? Nothing is for ever.
The Secretary of State said recently, and I hope your Lordships will note this carefully because it is important:
"It would be foolish in the extreme to rule out for all time the possibility of a more satisfactory local tax. just as it would be foolish to rule out for all time a more satisfactory relationship between central and local government. I and my Ministers are already hard at work seeing how we can cut a path through what has become an incredibly complicated rate support grant system."
That should please the noble Baroness, Lady Stedman, in particular. The Minister went on:
"I have no doubt whatever that after we have curbed the excesses of the few monstrously extravagant councils and after we have established single-tier local government in London and the metropolitan counties, we will be able to resume the search for a better financial régime for local authorities".
That is for the future; that must not be allowed to delay this Bill, the need for which is now. It would take years; to talk of it is not an option. Alongside the criticism, alongside the attacks, the objections, we are entitled to ask for valid and meaningful alternatives. So far they are conspicuous only by their absence. The high spending and high rating problem exists today. We have promised ratepayers protection, and we must see that they get it. The amendment on the Order Paper is a formula for still further vacillation and delay. The constitutional and democratic points are pure red herrings and have been more than fully disproved by this debate. The time has come to face reality in this House. We should start to do so with this Bill. I urge the House to reject this amendment and to give the Bill an unqualified Second Reading.
Lord Kilmarnock: Before the noble Lord sits down—
Several noble Lords: Sit down!
Lord Kilmarnock:—would he reply to me on the point I raised on the probation service?
11.5 p.m.
Baroness Birk: My Lords, it seems to me nearly eight hours since I moved this amendment. I only hope noble Lords will have a very good recollection of it because I fear, with great respect, that the Minister seems to have forgotten some of it, or rather got it wrong.
We have had a very serious debate in this House, and some of the most serious speeches have been made by people who have expressed concern about one aspect or another of the Bill, even those who are in favour of the Bill. In particular, the thread that ran through that concern was the worry about local government finance. I thought some of the most interesting contributions were from the right reverend Prelate, who knew very well the sort of effect this would have on the social lives of people, the community life in local areas.
So far as centralisation is concerned, I think all that needed to be said on that was said by the noble Lord, Lord Bancroft. He was Permanent Secretary to the Department of the Environment when I was a Minister there. He then went on to become head of the Civil Service. If a man in that position expresses his worry to us about the centralisation which this Bill will cause, about the impracticality of it, the concern it will raise and the difficulties it will bring for the department, which he spoke about—and I know he means it—with great admiration and affection, then I would say that it is our duty to listen and to think about this.
The Minister said that the reform sounds reasonable, but what does it in fact mean? I said when I opened all those hours ago that both parties shared the blame for vacillating over local government finance. The noble Lord, Lord Evans of Claughton,—and I think he is right—said that we should bring out Layfield, take the dust off it and have another look at it. The evidence is all there: we just have to move forward and bring some fresh thinking to it. It is no good just saying, "There is nothing we can do". Almost everybody who has spoken has said they think something can be done. Something should be done, and this is what is being asked in this amendment.
The noble Lord, Lord Sandford, said that the most important point is a thorough reform of local government finance. The rest, which the Minister dismissed, has been raised in all parts of the House. So all I would say now is that noble Lords who support this amendment will, in doing so, be fulfilling their responsibilities as members of this House, and also will be doing a great deal for the Government themselves. They really will be helping the Government, because Governments need to be brought up short, if they say that this Bill needs a great deal of amendment. They should do that. The Minister asked: "What should we do?" I will tell him what he should do. He should get together with the three local authority associations, undust Layfield and
1022
then say: "We are determined to beat this. We are going to do something about local government finance and not leave it in this parlous state, as in this very unsavoury Bill".
The Deputy Speaker (Lord Murton of Lindisfarne): The original Question was that this Bill be now read a second time; since when an amendment has been moved, at the end to insert the words on the order paper.
The Question, therefore, is that this amendment be agreed to?
11.8 p.m.
On Question, Whether the said amendment to the Motion for Second Reading shall be agreed to?
Their Lordships divided: Contents, 153; Not-Contents, 235.

DIVISION NO. 1

CONTENTS

Airedale, L.

Gainsborough, E.

Alport, L.

Gaitskell, B.

Amherst, E.

Gallacher, L.

Ardwick, L.

Galpern, L.

Attlee, E.

Gifford, L.

Aylestone, L.

Gladwyn, L.

Bancroft, L.

Glenamara, L.

Banks, L.

Graham of Edmonton, L.

Barnett, L.

Greenhill of Harrow, L.

Beaumont of Whitley, L.

Gregson, L.

Beswick, L.

Grimond, L.

Birk, B.

Hale, L.

Birkett, L.

Halsbury, E.

Bishopston, L.

Hampton, L.

Blease, L.

Hatch of Lusby, L.

Blyton, L.

Hooson, L.

Boston of Faversham, L.

Houghton of Sowerby, L.

Bottomley, L.

Howie of Troon, L.

Bowden, L.

Hughes, L.

Briginshaw, L.

Hunt, L.

Brimelow, L.

Hutchinson of Lullington, L.

Broadbridge, L.

Irving of Dartford, L.

Brooks of Tremorfa, L.

Jacobson, L.

Bruce of Donington, L.

Jacques, L.

Burton of Coventry. B.

Jeger, B.

Caradon, L.

Jenkins of Putney, L.

Carmichael of Kelvingrove, L.

John-Mackie, L.

Chandos, V.

Kagan, L.

Chitnis, L.

Kearton, L.

Cledwyn of Penrhos, L.

Rennet, L.

Collison, L.

Kilbracken, L.

Congleton, L.

Kilmarnock, L.

Cudlipp, L.

Kirkhill, L.

Darcy (de Knayth), B.

Listowel, E.

David, B.[Teller. ]

Llewelyn-Davies of Hastoe, B.

Davies of Penrhys, L.

Lloyd of Kilgerran, L.

Dean of Beswick, L.

Lockwood, B.

Delacourt-Smith of Alteryn,

London, Bp.

B.

Longford, E.

Denington, B.

Loudoun, C.

Donaldson of Kingsbridge, L.

Lovell-Davis, L.

Elwyn-Jones, L.

McCarthy, L.

Elystan-Morgan, L.

McCluskey, L.

Ennals, L.

McGregor of Durris, L.

Esher, V.

McIntosh of Haringey, L.

Evans of Claughton, L.

Mackie of Benshie, L.

Ewart-Biggs, B.

McNair, L.

Falkender, B.

Mayhew, L.

Feversham, L.

Melchett, L.

Fisher of Rednal, B.

Meston, L.

Fitt, L.

Milford, L.

Fulton, L.

Mishcon, L.

1023

Molloy, L.

Sharp, B.

Mountevans, L.

Shaughnessy, L.

Mulley, L.

Sidmouth, V.

Nicol, B.

Simon, V.

Ogmore, L.

Southwark, Bp.

Perry of Walton, L.

Southwell, Bp.

Phillips, B.

Stallard, L.

Pitt of Hampstead, L.

Stedman, B.

Plant, L.

Stoddart of Swindon, L.

Ponsonby of Shulbrede, L.

Strabolgi, L.

[Teller.]

Taylor of Blackburn, L.

Prys-Davies, L.

Taylor of Gryfe, L.

Raglan, L.

Taylor of Mansfield, L.

Rea, L.

Tordoff, L.

Reilly, L.

Underhill, L.

Rhodes, L.

Wallace of Coslany, L.

Robson of Kiddington, B.

Walston, L.

Rochester, Bp.

Wedderburn of Charlton, L.

Rochester, L.

Wells-Pestell, L.

Ross of Mamock, L.

White, B.

Sainsbury, L.

Wigoder, L.

Sandford. L.

Wilson of Rievaulx, L.

Seear, B.

Winchilsea and Nottingham,

Sefton of Garston, L.

E.

Serota, B.

Winstanley, L.

Shackleton, L.

Young of Dartington, L.

NOT-CONTENTS

Airey of Abingdon, B.

Coleraine, L.

Aldenham, L.

Colwyn, L.

Aldington, L.

Cork of Orrery, E.

Alexander of Tunis, E.

Cox, B.

Allerton, L.

Craigavon, V.

Ampthill, L.

Craigmyle, L.

Arran, E.

Craigton, L.

Astor of Hever, L.

Crathorne, L.

Atholl, D.

Crawshaw, L.

Audley, L.

Croft, L.

Avon, E.

Cullen of Ashbourne, L.

Barber, L.

Davidson. V.

Bathurst, E.

De La Warr, E.

Belhaven and Stenton, L.

Denham, L. [Teller.]

Bellwin, L.

Digby, L.

Beloff, L.

Donegall, M.

Belper, L.

Donoughmore, E.

Belstead, L.

Dormer, L.

Bessborough, E.

Drogheda, E.

Bethell, L.

Drumalbyn, L.

Biddulph, L.

Eden of Winton, L.

Birdwood, L.

Elles, B.

Blake, L.

Elliot of Harwood, B.

Boardman, L.

Elphinstone, L.

Bolton, L.

Elton, L.

Boothby, L.

Enroll of Hale, L.

Boyd-Carpenter, L.

Fairfax of Cameron, L.

Brabazon of Tara, L.

Falmouth, V.

Braye, L.

Fanshawe of Richmond, L.

Brookeborough, V.

Ferrers, E.

Brookes, L.

Forbes, L.

Brougham and Vaux, L.

Forte, L.

Broxbourne, L.

Fortescue, E.

Bruce-Gardyne, L.

Freyberg, L.

Burton, L.

Gainford, L.

Buxton of Alsa, L.

Gardner of Parkes, B.

Cairns, E.

Gibson, L.

Caithness, E.

Gibson-Watt, L.

Caldecote, V.

Gisborough, L.

Campbell of Alloway, L.

Glanusk, L.

Campbell of Croy, L.

Glasgow, E.

Camegy of Lour, B.

Glenarthur, L.

Carnock, L.

Glenkinglas, L.

Carr of Hadley, L.

Gormanston, V.

Carrick, E.

Gowrie, E.

Cayzer, L.

Grantchester, L.

Chalfont, L.

Gray, L.

Chelmer, L.

Gray of Contin, L.

Chelwood, L.

Greenway, L.

Chesham, L.

Gridley, L.

Chorley, L.

Grimston of Westbury, L.

Clinton, L.

Grimthorpe, L.

Cockfield, L.

Haig, E.

1024

Hailsham of Saint

Orkney, E.

Marylebone, L.

Orr-Ewing, L.

Halifax, E.

Peel, E.

Harmar-Nicholls, L.

Pender, L.

Harris of High Cross, L.

Penrhyn, L.

Harvey of Tasburgh, L.

Perth, E.

Harvington, L.

Peyton of Yeovil, L.

Hastings, L.

Plummer of St. Marylebone,

Hayter, L.

L.

Henley, L.

Plunket, L.

Hertford, M.

Portland, D.

Hives, L.

Portman, V.

Home of the Hirsel, L.

Radnor, E.

Hood, V.

Rankeillour, L.

Horsnby-Smith, B.

Rawlinson of Ewell, L.

Howard of Henderskelfe, L.

Redesdale, L.

Hylton-Foster, B.

Reigate, L.

Inchcape, E.

Remnant, L.

Inglewood, L.

Renton, L.

Ingrow, L.

Renwick, L.

Jessel, L.

Rochdale, V.

Kaberry of Adel, L.

Rodney, L.

Keith of Castleacre, L.

Rollo, L.

Kemsley V.

Romney, E.

Kilmany, L.

Rotherwick, L.

Kimberley, E.

St. Aldwyn, E.

Kinnaird, L.

Saltoun, Ly.

Kintore, E.

Sandys, L.

Kitchener, E.

Savile, L.

Knutsford, V.

Selbourne, E.

Lane-Fox, B.

Selkirk, E.

Lauderdale, E.

Sempill, Ly.

Lindsey and Abingdon, E.

Sharpies, B.

Long, V.

Sherfield, L.

Lonsdale, E.

Skelmersdale, L.

Lucas of Chilworth, L.

Soames, L.

Lyell, L.

Southborough, L.

McFadzean, L.

Spens, L.

Mackay of Clashfern, L.

Stamp, L.

Mackintosh of Halifax, V.

Strathcarron, L.

Macleod of Borve, B.

Suffield, L.

Mancroft, L.

Swansea, L.

Marchwood, V.

Swinfen, L.

Margadale, L.

Swinton, E. [Teller.]

Marley, L.

Teviot, L.

Marsh, L.

Thomas of Swynnerton, L.

Marshall of Leeds, L.

Thorneycroft, L.

Masham of Ilton, B.

Torphichen, L.

Maude of Stratford-upon-

Townshend, M.

Avon, L.

Tranmire, L.

Melville, V.

Trefgarne, L.

Merrivale, L.

Trenchard, V.

Molson, L.

Trumpington, B.

Monckton of Brenchley, V.

Ullswater, V.

Monk Bretton, L.

Vaizey, L.

Monson, L.

Vaux of Harrowden, L.

Montgomery of Alamein, V.

Vestey, L.

Morris, L.

Vickers, B.

Mottistone, L.

Waldegrave, E.

Mowbray and Stourton, L.

Ward of Witley, V.

Moyola, L.

Watkinson, V.

Murton of Lindisfarne, L.

Westbury, L.

Norfolk, D.

Whitelaw, V.

Northchurch, B.

Windlesham, L.

Northesk, E.

Wynford, L.

Onslow, E.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

On Question, Bill read a second time, and committed to a Committee of the Whole House.
11.21 p.m.

Betting, Gaming and Lotteries (Amendment) (No. 2) Bill
Brought from the Commons; read a first time, and to be printed.

Juries (Disqualification) Bill
Brought from the Commons; read a first time, and to be printed.
House adjourned at twenty-two minutes past eleven o'clock.

  COURT OF APPEAL: JUDGES
  COURT OF APPEAL: JUDGES
  DURHAM GAOL: WOMEN PRISONERS
  DURHAM GAOL: WOMEN PRISONERS
  TELECOMMUNICATIONS BILL: REAL TIME SERVICES
  TELECOMMUNICATIONS BILL: REAL TIME SERVICES
  MONTREUX CONVENTION: AIRCRAFT CARRIERS
  MONTREUX CONVENTION: AIRCRAFT CARRIERS
  INTERNAL WATERS
  INTERNAL WATERS
  HERR RUDOLF HESS: VISITS
  HERR RUDOLF HESS: VISITS
  INCOME TAX: PERSONAL ALLOWANCES
  INCOME TAX: PERSONAL ALLOWANCES
  "STREAMLINING THE CITIES": RESPONSE
  "STREAMLINING THE CITIES": RESPONSE